UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2b) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Item 2.02. Results of Operations and Financial Condition
On October 19, 2020, Triumph Bancorp, Inc. (the “Company”) issued a press release that announced its 2020 third quarter earnings. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. This press release includes certain non-GAAP financial measures. A reconciliation of those measures to the most directly comparable GAAP measures is included as a table in the press release. The information in this Item 2.02, including Exhibit 99.1, shall be considered furnished for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed “filed” for any purpose.
Item 7.01.Regulation FD Disclosure
In addition, this Form 8-K includes a copy of the Company’s presentation to analysts and investors for its quarter ended September 30, 2020, which is attached hereto as Exhibit 99.2. The information in this Item 7.01, including Exhibit 99.2, shall be considered furnished for purposes of the Exchange Act and shall not be deemed “filed” for any purpose.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of
FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.
While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 11, 2020, and Triumph’s Quarterly Report on Form 10-Q, filed with the SEC on April 21, 2020.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
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Exhibit |
Description |
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99.1 |
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99.2 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
EXHIBIT INDEX
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Exhibit |
Description |
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99.1 |
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99.2 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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TRIUMPH BANCORP, INC.
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By: |
/s/ Adam D. Nelson |
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Name: Adam D. Nelson Title: Executive Vice President & General Counsel |
Date: October 19, 2020
Exhibit 99.1
Triumph Bancorp Reports Third Quarter Net Income to Common Stockholders of $22.0 Million
DALLAS – October 19, 2020 (GLOBE NEWSWIRE) – Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the third quarter of 2020.
As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance. These non-GAAP financial measures are reconciled in the section labeled “Metrics and non-GAAP financial reconciliation” at the end of this press release.
2020 Third Quarter Highlights
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For the third quarter of 2020, net income available to common stockholders was $22.0 million. Diluted earnings per share were $0.89. |
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Adjusted diluted earnings per share were $0.91 for the quarter ended September 30, 2020, which exclude transaction costs related to the acquisition of Transport Financial Solutions (“TFS”), net of taxes. |
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On July 8, 2020, we acquired the transportation factoring assets (the “TFS Acquisition”) of Transport Financial Solutions (“TFS”), a wholly owned subsidiary of Covenant Logistics Group, Inc. ("CVLG"). Details of the TFS Acquisition can be found in our SEC Form 8-K filed on July 13, 2020. On September 23, 2020, we entered into an Account Management Agreement, Amendment to Purchase Agreement and Mutual Release (the “Agreement”) with Covenant Transport Solutions, LLC (“CTS”) and CVLG the details of which can be found in our SEC Form 8-K filed on September 23, 2020. The TFS Acquisition and subsequent Agreement resulted in our acquisition of $101.9 million of net factored receivables, a purchase credit deteriorated (“PCD”) allowance for credit loss (“ACL”) of $37.4 million, an indemnification asset of $31.2 million, a net deferred tax asset of $1.4 million, and $8.0 million of intangible assets including $4.5 million of goodwill. Total consideration paid was $105.1 million. Further details regarding the transaction can be found in the appendix to the accompanying investor deck. |
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For the quarter ended September 30, 2020, we recorded a $0.3 million benefit to total credit loss expense, comprised of a $0.4 million benefit to credit loss expense related to our loan portfolio and $0.1 million of credit loss expense related to held to maturity securities. Credit loss expense related to off balance sheet loan commitments was insignificant for the quarter. Regarding the $0.4 million benefit to credit loss expense on our loan portfolio: |
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Our macroeconomic forecasts did not change materially from the prior quarter and resulted in credit loss expense of approximately $0.6 million. |
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Changes in the volume and mix of our loan portfolio provided a benefit of $1.7 million to credit loss expense. Net charge offs were $0.7 million and the increase in non-purchase credit deteriorated specific reserves was $0.1 million. |
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Our ACL as a percentage of loans held for investment increased 64 basis points during the quarter to 1.88% at September 30, 2020. We recorded PCD specific reserves of $37.4 million during the quarter on the Over-Formula Advance Portfolio obtained through the TFS Acquisition, which contributed 77 basis points to the ratio at September 30, 2020. The PCD reserves were recorded through purchase accounting and had no impact on our credit loss expense for the quarter. |
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As of September 30, 2020, the Company’s balance sheet reflected short-term deferrals on outstanding loan balances of $103.0 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 September 30, 2020, these deferred balances carried accrued interest of $0.7 million. |
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As of September 30, 2020, the Company carried 2,080 PPP loans representing a balance of $223.2 million classified as commercial loans. The Company has received approximately $7.7 million in total fees from the SBA, $1.2 million and $2.6 million of which were recognized in earnings during the three and nine months ended September 30, 2020, respectively. The remaining fees will be amortized over the respective lives of the loans. |
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Net interest margin (“NIM”) was 5.83% for the quarter ended September 30, 2020. |
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Included in noninterest income for the quarter ended September 30, 2020 was a $3.1 million gain on sale of securities and a $2.0 million gain recognized on the increased value of the receivable due from CVLG resulting from the Agreement. These gains were partially offset by a $0.7 million loss recognized on the donation of a branch to a local municipality during the same period. |
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Triumph Business Capital and TriumphPay processed a combined $2.920 billion in invoice payments for the quarter ended September 30, 2020. |
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The total dollar value of invoices purchased by Triumph Business Capital for the quarter ended September 30, 2020 was $1.984 billion with an average invoice size of $1,931. The transportation average invoice size for the quarter was $1,787. |
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For the quarter ended September 30, 2020, TriumphPay processed 1,364,606 invoices paying 57,953 distinct carriers a total of $1.161 billion. |
Balance Sheet
Total loans held for investment increased $459.6 million, or 10.5%, during the third quarter to $4.853 billion at September 30, 2020. The national lending portfolio increased $118.9 million, or 11.1%, to $1,187.8 million, the commercial finance portfolio increased $461.9 million, or 37.7%, to $1.687 billion, and the community banking portfolio decreased $121.2 million, or 5.8%, to $1.978 billion during the quarter. The increase in total loans and the commercial finance portfolio reflects $107.5 million of factored receivables purchased through the TFS Acquisition.
Total deposits were $4.248 billion at September 30, 2020, an increase of $185.8 million, or 4.6%, in the third quarter of 2020. Non-interest-bearing deposits accounted for 31% of total deposits and non-time deposits accounted for 69% of total deposits at September 30, 2020.
Net Interest Income
We earned net interest income for the quarter ended September 30, 2020 of $74.4 million compared to $64.3 million for the quarter ended June 30, 2020.
Yields on loans for the quarter ended September 30, 2020 were up 53 bps from the prior quarter to 7.05%. The average cost of our total deposits was 0.56% for the quarter ended September 30, 2020 compared to 0.79% for the quarter ended June 30, 2020.
Asset Quality
Non-performing assets were 1.52% of total assets at September 30, 2020 compared to 1.20% of total assets at June 30, 2020. Approximately 17 basis points of this ratio at September 30, 2020 consisted of $10.0 million of the Over-Formula Advance Portfolio obtained through TFS Acquisition which represents the portion that not covered by CVLG’s indemnification.
The ratio of past due to total loans increased to 2.40% at September 30, 2020 from 1.50% at June 30, 2020. Approximately 79 basis points of this ratio at September 30, 2020 consisted of $38.5 million of past due factored receivables related to the Over-Formula Advance Portfolio. We recorded total net charge-offs of $0.7 million, or 0.02% of average loans, for the quarter ended September 30, 2020 compared to net charge-offs of $1.1 million, or 0.02% of average loans, for the quarter ended June 30, 2020.
Non-Interest Income and Expense
We earned non-interest income for the quarter ended September 30, 2020 of $10.5 million compared to $20.0 million for the quarter ended June 30, 2020. Excluding the gain on sale of TPF, we earned adjusted noninterest income of $10.2 million for the three months ended June 30, 2020.
For the quarter ended September 30, 2020, non-interest expense totaled $55.3 million. Non-interest expense for the quarter ended June 30, 2020 was $52.7 million. Excluding the transaction costs related to the TFS acquisition, we incurred adjusted noninterest expense of $54.5 million for the three months ended September 30, 2020.
Conference Call Information
Aaron P. Graft, Vice Chairman and CEO and Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Tuesday, October 20, 2020. Todd Ritterbusch, Chief Lending Officer, will also be available for questions.
2
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/tbk201020.html. An archive of this conference call will subsequently be available at this same location on the Company’s website.
About Triumph
Triumph Bancorp, Inc. (Nasdaq: TBK) is a financial holding company headquartered in Dallas, Texas. Triumph offers a diversified line of community banking, national lending, and commercial finance products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com
Forward-Looking Statements
This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.
While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 11, 2020 and its Quarterly Report on Form 10-Q, filed with the SEC on August 7, 2020.
3
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.
4
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.
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As of and for the Three Months Ended |
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As of and for the Nine Months Ended |
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September 30, |
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June 30, |
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March 31, |
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December 31, |
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September 30, |
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September 30, |
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September 30, |
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(Dollars in thousands) |
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2020 |
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2020 |
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2020 |
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2019 |
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2019 |
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2020 |
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2019 |
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Financial Highlights: |
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Total assets |
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$ |
5,836,787 |
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$ |
5,617,493 |
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$ |
5,353,729 |
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$ |
5,060,297 |
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$ |
5,039,697 |
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$ |
5,836,787 |
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$ |
5,039,697 |
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Loans held for investment |
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$ |
4,852,911 |
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$ |
4,393,311 |
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$ |
4,320,548 |
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$ |
4,194,512 |
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$ |
4,209,417 |
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$ |
4,852,911 |
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$ |
4,209,417 |
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Deposits |
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$ |
4,248,101 |
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$ |
4,062,332 |
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$ |
3,682,015 |
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$ |
3,789,906 |
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$ |
3,697,833 |
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$ |
4,248,101 |
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$ |
3,697,833 |
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Net income available to common stockholders |
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$ |
22,005 |
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$ |
13,440 |
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$ |
(4,450 |
) |
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$ |
16,709 |
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$ |
14,317 |
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$ |
30,995 |
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$ |
41,835 |
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Performance Ratios - Annualized: |
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Return on average assets |
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1.65 |
% |
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0.99 |
% |
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(0.36 |
%) |
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1.31 |
% |
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1.17 |
% |
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0.80 |
% |
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1.20 |
% |
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Return on average total equity |
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13.24 |
% |
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8.86 |
% |
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(2.85 |
%) |
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10.24 |
% |
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8.79 |
% |
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6.63 |
% |
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8.63 |
% |
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Return on average common equity |
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13.61 |
% |
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8.94 |
% |
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(2.85 |
%) |
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10.24 |
% |
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8.79 |
% |
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6.62 |
% |
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8.63 |
% |
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Return on average tangible common equity (1) |
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19.43 |
% |
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12.96 |
% |
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(4.09 |
%) |
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14.54 |
% |
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12.56 |
% |
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9.51 |
% |
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12.38 |
% |
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Yield on loans(2) |
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7.05 |
% |
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6.52 |
% |
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7.22 |
% |
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7.48 |
% |
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7.63 |
% |
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6.92 |
% |
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7.85 |
% |
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Cost of interest bearing deposits |
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0.79 |
% |
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1.08 |
% |
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1.34 |
% |
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1.45 |
% |
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1.49 |
% |
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1.07 |
% |
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1.39 |
% |
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Cost of total deposits |
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0.56 |
% |
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0.79 |
% |
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1.05 |
% |
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1.15 |
% |
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1.19 |
% |
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0.79 |
% |
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1.11 |
% |
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Cost of total funds |
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0.67 |
% |
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0.85 |
% |
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1.23 |
% |
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1.35 |
% |
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1.41 |
% |
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0.90 |
% |
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1.36 |
% |
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Net interest margin(2) |
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5.83 |
% |
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5.11 |
% |
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5.63 |
% |
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5.72 |
% |
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5.85 |
% |
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5.52 |
% |
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5.99 |
% |
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Net non-interest expense to average assets |
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3.23 |
% |
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2.40 |
% |
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3.88 |
% |
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3.46 |
% |
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3.64 |
% |
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3.14 |
% |
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3.67 |
% |
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Adjusted net non-interest expense to average assets (1) |
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3.17 |
% |
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3.11 |
% |
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3.88 |
% |
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3.46 |
% |
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3.64 |
% |
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3.37 |
% |
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3.67 |
% |
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Efficiency ratio |
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65.15 |
% |
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62.56 |
% |
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78.24 |
% |
|
|
70.15 |
% |
|
|
71.93 |
% |
|
|
68.07 |
% |
|
|
71.29 |
% |
|
Adjusted efficiency ratio (1) |
|
|
64.18 |
% |
|
|
70.75 |
% |
|
|
78.24 |
% |
|
|
70.15 |
% |
|
|
71.93 |
% |
|
|
70.61 |
% |
|
|
71.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality:(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past due to total loans(4) |
|
|
2.40 |
% |
|
|
1.50 |
% |
|
|
1.99 |
% |
|
|
1.74 |
% |
|
|
1.91 |
% |
|
|
2.40 |
% |
|
|
1.91 |
% |
|
Non-performing loans to total loans |
|
|
1.17 |
% |
|
|
1.27 |
% |
|
|
1.26 |
% |
|
|
0.97 |
% |
|
|
1.00 |
% |
|
|
1.17 |
% |
|
|
1.00 |
% |
|
Non-performing assets to total assets |
|
|
1.52 |
% |
|
|
1.20 |
% |
|
|
1.09 |
% |
|
|
0.87 |
% |
|
|
0.91 |
% |
|
|
1.52 |
% |
|
|
0.91 |
% |
|
ACL to non-performing loans(5) |
|
|
159.67 |
% |
|
|
97.66 |
% |
|
|
82.37 |
% |
|
|
71.63 |
% |
|
|
75.58 |
% |
|
|
159.67 |
% |
|
|
75.58 |
% |
|
ACL to total loans(5) |
|
|
1.88 |
% |
|
|
1.24 |
% |
|
|
1.04 |
% |
|
|
0.69 |
% |
|
|
0.76 |
% |
|
|
1.88 |
% |
|
|
0.76 |
% |
|
Net charge-offs to average loans |
|
|
0.02 |
% |
|
|
0.02 |
% |
|
|
0.04 |
% |
|
|
0.08 |
% |
|
|
0.01 |
% |
|
|
0.08 |
% |
|
|
0.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to average assets(6) |
|
|
10.75 |
% |
|
|
9.98 |
% |
|
|
9.62 |
% |
|
|
10.03 |
% |
|
|
10.37 |
% |
|
|
10.75 |
% |
|
|
10.37 |
% |
|
Tier 1 capital to risk-weighted assets(6) |
|
|
10.32 |
% |
|
|
10.57 |
% |
|
|
9.03 |
% |
|
|
10.29 |
% |
|
|
10.08 |
% |
|
|
10.32 |
% |
|
|
10.08 |
% |
|
Common equity tier 1 capital to risk-weighted assets(6) |
|
|
8.72 |
% |
|
|
8.84 |
% |
|
|
8.24 |
% |
|
|
9.46 |
% |
|
|
9.26 |
% |
|
|
8.72 |
% |
|
|
9.26 |
% |
|
Total capital to risk-weighted assets(5) |
|
|
12.94 |
% |
|
|
13.44 |
% |
|
|
11.63 |
% |
|
|
12.76 |
% |
|
|
11.79 |
% |
|
|
12.94 |
% |
|
|
11.79 |
% |
|
Total equity to total assets |
|
|
11.89 |
% |
|
|
11.69 |
% |
|
|
11.01 |
% |
|
|
12.58 |
% |
|
|
12.57 |
% |
|
|
11.89 |
% |
|
|
12.57 |
% |
|
Tangible common stockholders' equity to tangible assets(1) |
|
|
8.09 |
% |
|
|
7.84 |
% |
|
|
7.77 |
% |
|
|
9.16 |
% |
|
|
9.10 |
% |
|
|
8.09 |
% |
|
|
9.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
26.11 |
|
|
$ |
25.28 |
|
|
$ |
24.45 |
|
|
$ |
25.50 |
|
|
$ |
24.99 |
|
|
$ |
26.11 |
|
|
$ |
24.99 |
|
|
Tangible book value per share (1) |
|
$ |
18.38 |
|
|
$ |
17.59 |
|
|
$ |
16.64 |
|
|
$ |
17.88 |
|
|
$ |
17.40 |
|
|
$ |
18.38 |
|
|
$ |
17.40 |
|
|
Basic earnings (loss) per common share |
|
$ |
0.89 |
|
|
$ |
0.56 |
|
|
$ |
(0.18 |
) |
|
$ |
0.67 |
|
|
$ |
0.56 |
|
|
$ |
1.28 |
|
|
$ |
1.60 |
|
|
Diluted earnings (loss) per common share |
|
$ |
0.89 |
|
|
$ |
0.56 |
|
|
$ |
(0.18 |
) |
|
$ |
0.66 |
|
|
$ |
0.56 |
|
|
$ |
1.27 |
|
|
$ |
1.59 |
|
|
Adjusted diluted earnings per common share(1) |
|
$ |
0.91 |
|
|
$ |
0.25 |
|
|
$ |
(0.18 |
) |
|
$ |
0.66 |
|
|
$ |
0.56 |
|
|
$ |
0.99 |
|
|
$ |
1.59 |
|
|
Shares outstanding end of period |
|
|
24,851,601 |
|
|
|
24,202,686 |
|
|
|
24,101,120 |
|
|
|
24,964,961 |
|
|
|
25,357,985 |
|
|
|
24,851,601 |
|
|
|
25,357,985 |
|
5
Unaudited consolidated balance sheet as of:
|
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
September 30, |
|
|||||
|
(Dollars in thousands) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents |
|
$ |
288,278 |
|
|
$ |
437,064 |
|
|
$ |
208,414 |
|
|
$ |
197,880 |
|
|
$ |
115,043 |
|
|
Securities - available for sale |
|
|
242,802 |
|
|
|
331,126 |
|
|
|
302,122 |
|
|
|
248,820 |
|
|
|
302,917 |
|
|
Securities - held to maturity |
|
|
6,096 |
|
|
|
6,285 |
|
|
|
8,217 |
|
|
|
8,417 |
|
|
|
8,517 |
|
|
Equity securities |
|
|
6,040 |
|
|
|
6,411 |
|
|
|
5,678 |
|
|
|
5,437 |
|
|
|
5,543 |
|
|
Loans held for sale |
|
|
36,716 |
|
|
|
50,382 |
|
|
|
4,431 |
|
|
|
2,735 |
|
|
|
7,499 |
|
|
Loans held for investment |
|
|
4,852,911 |
|
|
|
4,393,311 |
|
|
|
4,320,548 |
|
|
|
4,194,512 |
|
|
|
4,209,417 |
|
|
Allowance for credit losses |
|
|
(90,995 |
) |
|
|
(54,613 |
) |
|
|
(44,732 |
) |
|
|
(29,092 |
) |
|
|
(31,895 |
) |
|
Loans, net |
|
|
4,761,916 |
|
|
|
4,338,698 |
|
|
|
4,275,816 |
|
|
|
4,165,420 |
|
|
|
4,177,522 |
|
|
Assets held for sale |
|
|
— |
|
|
|
— |
|
|
|
97,895 |
|
|
|
— |
|
|
|
— |
|
|
FHLB and other restricted stock |
|
|
18,464 |
|
|
|
26,345 |
|
|
|
37,080 |
|
|
|
19,860 |
|
|
|
23,960 |
|
|
Premises and equipment, net |
|
|
105,455 |
|
|
|
107,736 |
|
|
|
98,363 |
|
|
|
96,595 |
|
|
|
87,112 |
|
|
Other real estate owned ("OREO"), net |
|
|
1,704 |
|
|
|
1,962 |
|
|
|
2,540 |
|
|
|
3,009 |
|
|
|
2,849 |
|
|
Goodwill and intangible assets, net |
|
|
192,041 |
|
|
|
186,162 |
|
|
|
188,208 |
|
|
|
190,286 |
|
|
|
192,440 |
|
|
Bank-owned life insurance |
|
|
41,440 |
|
|
|
41,298 |
|
|
|
41,122 |
|
|
|
40,954 |
|
|
|
40,724 |
|
|
Deferred tax asset, net |
|
|
7,716 |
|
|
|
8,544 |
|
|
|
9,457 |
|
|
|
3,812 |
|
|
|
5,971 |
|
|
Other assets |
|
|
128,119 |
|
|
|
75,480 |
|
|
|
74,386 |
|
|
|
77,072 |
|
|
|
69,600 |
|
|
Total assets |
|
$ |
5,836,787 |
|
|
$ |
5,617,493 |
|
|
$ |
5,353,729 |
|
|
$ |
5,060,297 |
|
|
$ |
5,039,697 |
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
$ |
1,315,900 |
|
|
$ |
1,120,949 |
|
|
$ |
846,412 |
|
|
$ |
809,696 |
|
|
$ |
754,233 |
|
|
Interest bearing deposits |
|
|
2,932,201 |
|
|
|
2,941,383 |
|
|
|
2,835,603 |
|
|
|
2,980,210 |
|
|
|
2,943,600 |
|
|
Total deposits |
|
|
4,248,101 |
|
|
|
4,062,332 |
|
|
|
3,682,015 |
|
|
|
3,789,906 |
|
|
|
3,697,833 |
|
|
Customer repurchase agreements |
|
|
14,192 |
|
|
|
6,732 |
|
|
|
3,693 |
|
|
|
2,033 |
|
|
|
14,124 |
|
|
Federal Home Loan Bank advances |
|
|
435,000 |
|
|
|
455,000 |
|
|
|
850,000 |
|
|
|
430,000 |
|
|
|
530,000 |
|
|
Payment Protection Program Liquidity Facility |
|
|
223,713 |
|
|
|
223,809 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Subordinated notes |
|
|
87,455 |
|
|
|
87,402 |
|
|
|
87,347 |
|
|
|
87,327 |
|
|
|
49,010 |
|
|
Junior subordinated debentures |
|
|
39,944 |
|
|
|
39,816 |
|
|
|
39,689 |
|
|
|
39,566 |
|
|
|
39,443 |
|
|
Other liabilities |
|
|
94,540 |
|
|
|
85,531 |
|
|
|
101,638 |
|
|
|
74,875 |
|
|
|
75,594 |
|
|
Total liabilities |
|
|
5,142,945 |
|
|
|
4,960,622 |
|
|
|
4,764,382 |
|
|
|
4,423,707 |
|
|
|
4,406,004 |
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock |
|
|
45,000 |
|
|
|
45,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Common stock |
|
|
279 |
|
|
|
273 |
|
|
|
272 |
|
|
|
272 |
|
|
|
272 |
|
|
Additional paid-in-capital |
|
|
488,094 |
|
|
|
472,795 |
|
|
|
474,441 |
|
|
|
473,251 |
|
|
|
472,368 |
|
|
Treasury stock, at cost |
|
|
(102,942 |
) |
|
|
(102,888 |
) |
|
|
(102,677 |
) |
|
|
(67,069 |
) |
|
|
(52,632 |
) |
|
Retained earnings |
|
|
258,254 |
|
|
|
236,249 |
|
|
|
222,809 |
|
|
|
229,030 |
|
|
|
212,321 |
|
|
Accumulated other comprehensive income (loss) |
|
|
5,157 |
|
|
|
5,442 |
|
|
|
(5,498 |
) |
|
|
1,106 |
|
|
|
1,364 |
|
|
Total stockholders' equity |
|
|
693,842 |
|
|
|
656,871 |
|
|
|
589,347 |
|
|
|
636,590 |
|
|
|
633,693 |
|
|
Total liabilities and equity |
|
$ |
5,836,787 |
|
|
$ |
5,617,493 |
|
|
$ |
5,353,729 |
|
|
$ |
5,060,297 |
|
|
$ |
5,039,697 |
|
6
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) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
48,774 |
|
|
$ |
50,394 |
|
|
$ |
48,323 |
|
|
$ |
52,395 |
|
|
$ |
50,249 |
|
|
$ |
147,491 |
|
|
$ |
143,253 |
|
|
Factored receivables, including fees |
|
|
31,468 |
|
|
|
21,101 |
|
|
|
24,292 |
|
|
|
25,573 |
|
|
|
25,570 |
|
|
|
76,861 |
|
|
|
75,684 |
|
|
Securities |
|
|
1,927 |
|
|
|
2,676 |
|
|
|
2,107 |
|
|
|
2,379 |
|
|
|
2,784 |
|
|
|
6,710 |
|
|
|
8,095 |
|
|
FHLB and other restricted stock |
|
|
122 |
|
|
|
148 |
|
|
|
204 |
|
|
|
165 |
|
|
|
209 |
|
|
|
474 |
|
|
|
547 |
|
|
Cash deposits |
|
|
73 |
|
|
|
79 |
|
|
|
488 |
|
|
|
659 |
|
|
|
603 |
|
|
|
640 |
|
|
|
2,403 |
|
|
Total interest income |
|
|
82,364 |
|
|
|
74,398 |
|
|
|
75,414 |
|
|
|
81,171 |
|
|
|
79,415 |
|
|
|
232,176 |
|
|
|
229,982 |
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
5,834 |
|
|
|
7,584 |
|
|
|
9,677 |
|
|
|
10,961 |
|
|
|
11,036 |
|
|
|
23,095 |
|
|
|
29,264 |
|
|
Subordinated notes |
|
|
1,348 |
|
|
|
1,321 |
|
|
|
1,347 |
|
|
|
1,035 |
|
|
|
840 |
|
|
|
4,016 |
|
|
|
2,518 |
|
|
Junior subordinated debentures |
|
|
462 |
|
|
|
554 |
|
|
|
646 |
|
|
|
687 |
|
|
|
719 |
|
|
|
1,662 |
|
|
|
2,223 |
|
|
Other borrowings |
|
|
341 |
|
|
|
688 |
|
|
|
1,244 |
|
|
|
2,080 |
|
|
|
2,055 |
|
|
|
2,273 |
|
|
|
6,482 |
|
|
Total interest expense |
|
|
7,985 |
|
|
|
10,147 |
|
|
|
12,914 |
|
|
|
14,763 |
|
|
|
14,650 |
|
|
|
31,046 |
|
|
|
40,487 |
|
|
Net interest income |
|
|
74,379 |
|
|
|
64,251 |
|
|
|
62,500 |
|
|
|
66,408 |
|
|
|
64,765 |
|
|
|
201,130 |
|
|
|
189,495 |
|
|
Credit loss expense (benefit) |
|
|
(258 |
) |
|
|
13,609 |
|
|
|
20,298 |
|
|
|
382 |
|
|
|
2,865 |
|
|
|
33,649 |
|
|
|
7,560 |
|
|
Net interest income after credit loss expense |
|
|
74,637 |
|
|
|
50,642 |
|
|
|
42,202 |
|
|
|
66,026 |
|
|
|
61,900 |
|
|
|
167,481 |
|
|
|
181,935 |
|
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits |
|
|
1,470 |
|
|
|
573 |
|
|
|
1,588 |
|
|
|
1,889 |
|
|
|
1,937 |
|
|
|
3,631 |
|
|
|
5,243 |
|
|
Card income |
|
|
2,091 |
|
|
|
1,941 |
|
|
|
1,800 |
|
|
|
1,943 |
|
|
|
2,015 |
|
|
|
5,832 |
|
|
|
5,930 |
|
|
Net OREO gains (losses) and valuation adjustments |
|
|
(41 |
) |
|
|
(101 |
) |
|
|
(257 |
) |
|
|
50 |
|
|
|
(56 |
) |
|
|
(399 |
) |
|
|
301 |
|
|
Net gains (losses) on sale of securities |
|
|
3,109 |
|
|
|
63 |
|
|
|
38 |
|
|
|
39 |
|
|
|
19 |
|
|
|
3,210 |
|
|
|
22 |
|
|
Fee income |
|
|
1,402 |
|
|
|
1,304 |
|
|
|
1,686 |
|
|
|
1,686 |
|
|
|
1,624 |
|
|
|
4,392 |
|
|
|
4,755 |
|
|
Insurance commissions |
|
|
990 |
|
|
|
864 |
|
|
|
1,051 |
|
|
|
1,092 |
|
|
|
1,247 |
|
|
|
2,905 |
|
|
|
3,127 |
|
|
Gain on sale of subsidiary |
|
|
— |
|
|
|
9,758 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,758 |
|
|
|
— |
|
|
Other |
|
|
1,472 |
|
|
|
5,627 |
|
|
|
1,571 |
|
|
|
1,967 |
|
|
|
956 |
|
|
|
8,670 |
|
|
|
3,525 |
|
|
Total non-interest income |
|
|
10,493 |
|
|
|
20,029 |
|
|
|
7,477 |
|
|
|
8,666 |
|
|
|
7,742 |
|
|
|
37,999 |
|
|
|
22,903 |
|
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
31,651 |
|
|
|
30,804 |
|
|
|
30,722 |
|
|
|
29,586 |
|
|
|
28,717 |
|
|
|
93,177 |
|
|
|
83,276 |
|
|
Occupancy, furniture and equipment |
|
|
5,574 |
|
|
|
4,964 |
|
|
|
5,182 |
|
|
|
4,667 |
|
|
|
4,505 |
|
|
|
15,720 |
|
|
|
13,529 |
|
|
FDIC insurance and other regulatory assessments |
|
|
360 |
|
|
|
495 |
|
|
|
315 |
|
|
|
(302 |
) |
|
|
(2 |
) |
|
|
1,170 |
|
|
|
600 |
|
|
Professional fees |
|
|
3,265 |
|
|
|
1,651 |
|
|
|
2,107 |
|
|
|
1,904 |
|
|
|
1,969 |
|
|
|
7,023 |
|
|
|
5,384 |
|
|
Amortization of intangible assets |
|
|
2,141 |
|
|
|
2,046 |
|
|
|
2,078 |
|
|
|
2,154 |
|
|
|
2,228 |
|
|
|
6,265 |
|
|
|
6,977 |
|
|
Advertising and promotion |
|
|
1,105 |
|
|
|
1,151 |
|
|
|
1,292 |
|
|
|
1,347 |
|
|
|
1,379 |
|
|
|
3,548 |
|
|
|
4,779 |
|
|
Communications and technology |
|
|
5,569 |
|
|
|
5,444 |
|
|
|
5,501 |
|
|
|
5,732 |
|
|
|
5,382 |
|
|
|
16,514 |
|
|
|
15,244 |
|
|
Other |
|
|
5,632 |
|
|
|
6,171 |
|
|
|
7,556 |
|
|
|
7,573 |
|
|
|
7,975 |
|
|
|
19,359 |
|
|
|
21,634 |
|
|
Total non-interest expense |
|
|
55,297 |
|
|
|
52,726 |
|
|
|
54,753 |
|
|
|
52,661 |
|
|
|
52,153 |
|
|
|
162,776 |
|
|
|
151,423 |
|
|
Net income (loss) before income tax |
|
|
29,833 |
|
|
|
17,945 |
|
|
|
(5,074 |
) |
|
|
22,031 |
|
|
|
17,489 |
|
|
|
42,704 |
|
|
|
53,415 |
|
|
Income tax expense (benefit) |
|
|
6,929 |
|
|
|
4,505 |
|
|
|
(624 |
) |
|
|
5,322 |
|
|
|
3,172 |
|
|
|
10,810 |
|
|
|
11,580 |
|
|
Net income (loss) |
|
$ |
22,904 |
|
|
$ |
13,440 |
|
|
$ |
(4,450 |
) |
|
$ |
16,709 |
|
|
$ |
14,317 |
|
|
$ |
31,894 |
|
|
$ |
41,835 |
|
|
Dividends on preferred stock |
|
|
(899 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(899 |
) |
|
|
— |
|
|
Net income available to common stockholders |
|
$ |
22,005 |
|
|
$ |
13,440 |
|
|
$ |
(4,450 |
) |
|
$ |
16,709 |
|
|
$ |
14,317 |
|
|
$ |
30,995 |
|
|
$ |
41,835 |
|
7
|
|
|
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) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) to common stockholders |
|
$ |
22,005 |
|
|
$ |
13,440 |
|
|
$ |
(4,450 |
) |
|
$ |
16,709 |
|
|
$ |
14,317 |
|
|
$ |
30,995 |
|
|
$ |
41,835 |
|
|
Weighted average common shares outstanding |
|
|
24,592,092 |
|
|
|
23,987,049 |
|
|
|
24,314,329 |
|
|
|
25,089,447 |
|
|
|
25,621,054 |
|
|
|
24,298,897 |
|
|
|
26,228,499 |
|
|
Basic earnings (loss) per common share |
|
$ |
0.89 |
|
|
$ |
0.56 |
|
|
$ |
(0.18 |
) |
|
$ |
0.67 |
|
|
$ |
0.56 |
|
|
$ |
1.28 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) to common stockholders - diluted |
|
$ |
22,005 |
|
|
$ |
13,440 |
|
|
$ |
(4,450 |
) |
|
$ |
16,709 |
|
|
$ |
14,317 |
|
|
$ |
30,995 |
|
|
$ |
41,835 |
|
|
Weighted average common shares outstanding |
|
|
24,592,092 |
|
|
|
23,987,049 |
|
|
|
24,314,329 |
|
|
|
25,089,447 |
|
|
|
25,621,054 |
|
|
|
24,298,897 |
|
|
|
26,228,499 |
|
|
Dilutive effects of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumed exercises of stock options |
|
|
48,102 |
|
|
|
38,627 |
|
|
|
— |
|
|
|
69,865 |
|
|
|
60,068 |
|
|
|
53,232 |
|
|
|
61,054 |
|
|
Restricted stock awards |
|
|
67,907 |
|
|
|
37,751 |
|
|
|
— |
|
|
|
70,483 |
|
|
|
45,631 |
|
|
|
65,893 |
|
|
|
40,572 |
|
|
Restricted stock units |
|
|
18,192 |
|
|
|
4,689 |
|
|
|
— |
|
|
|
13,264 |
|
|
|
3,045 |
|
|
|
15,198 |
|
|
|
57 |
|
|
Performance stock units - market based |
|
|
76,095 |
|
|
|
6,326 |
|
|
|
— |
|
|
|
11,803 |
|
|
|
4,673 |
|
|
|
30,995 |
|
|
|
1,558 |
|
|
Performance stock units - performance based |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Weighted average shares outstanding - diluted |
|
|
24,802,388 |
|
|
|
24,074,442 |
|
|
|
24,314,329 |
|
|
|
25,254,862 |
|
|
|
25,734,471 |
|
|
|
24,464,215 |
|
|
|
26,331,740 |
|
|
Diluted earnings (loss) per common share |
|
$ |
0.89 |
|
|
$ |
0.56 |
|
|
$ |
(0.18 |
) |
|
$ |
0.66 |
|
|
$ |
0.56 |
|
|
$ |
1.27 |
|
|
$ |
1.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|||||||
|
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||
|
Stock options |
|
|
98,513 |
|
|
|
148,528 |
|
|
|
225,055 |
|
|
|
66,019 |
|
|
|
67,023 |
|
|
|
98,513 |
|
|
|
67,023 |
|
|
Restricted stock awards |
|
|
— |
|
|
|
109,834 |
|
|
|
147,748 |
|
|
|
— |
|
|
|
3,209 |
|
|
|
— |
|
|
|
3,209 |
|
|
Restricted stock units |
|
|
— |
|
|
|
38,801 |
|
|
|
55,228 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
54,077 |
|
|
Performance stock units - market based |
|
|
— |
|
|
|
76,461 |
|
|
|
67,707 |
|
|
|
55,228 |
|
|
|
55,228 |
|
|
|
— |
|
|
|
55,228 |
|
|
Performance stock units - performance based |
|
|
261,125 |
|
|
|
262,625 |
|
|
|
254,000 |
|
|
|
254,000 |
|
|
|
— |
|
|
|
261,125 |
|
|
|
— |
|
8
Loans held for investment summarized as of:
|
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
September 30, |
|
|||||
|
(Dollars in thousands) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|||||
|
Commercial real estate |
|
$ |
762,531 |
|
|
$ |
910,261 |
|
|
$ |
985,757 |
|
|
$ |
1,046,961 |
|
|
$ |
1,115,559 |
|
|
Construction, land development, land |
|
|
244,512 |
|
|
|
213,617 |
|
|
|
198,050 |
|
|
|
160,569 |
|
|
|
164,186 |
|
|
1-4 family residential properties |
|
|
164,785 |
|
|
|
168,707 |
|
|
|
169,703 |
|
|
|
179,425 |
|
|
|
186,405 |
|
|
Farmland |
|
|
110,966 |
|
|
|
125,259 |
|
|
|
133,579 |
|
|
|
154,975 |
|
|
|
161,447 |
|
|
Commercial |
|
|
1,536,903 |
|
|
|
1,518,656 |
|
|
|
1,412,822 |
|
|
|
1,342,683 |
|
|
|
1,369,505 |
|
|
Factored receivables |
|
|
1,016,337 |
|
|
|
561,576 |
|
|
|
661,100 |
|
|
|
619,986 |
|
|
|
599,651 |
|
|
Consumer |
|
|
17,106 |
|
|
|
18,450 |
|
|
|
20,326 |
|
|
|
21,925 |
|
|
|
24,967 |
|
|
Mortgage warehouse |
|
|
999,771 |
|
|
|
876,785 |
|
|
|
739,211 |
|
|
|
667,988 |
|
|
|
587,697 |
|
|
Total loans |
|
$ |
4,852,911 |
|
|
$ |
4,393,311 |
|
|
$ |
4,320,548 |
|
|
$ |
4,194,512 |
|
|
$ |
4,209,417 |
|
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) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|||||
|
Commercial - Equipment |
|
$ |
509,849 |
|
|
$ |
487,145 |
|
|
$ |
479,483 |
|
|
$ |
461,555 |
|
|
$ |
429,412 |
|
|
Commercial - Asset-based lending |
|
|
160,711 |
|
|
|
176,235 |
|
|
|
245,001 |
|
|
|
168,955 |
|
|
|
247,026 |
|
|
Factored receivables |
|
|
1,016,337 |
|
|
|
561,576 |
|
|
|
661,100 |
|
|
|
619,986 |
|
|
|
599,651 |
|
|
Commercial finance |
|
$ |
1,686,897 |
|
|
$ |
1,224,956 |
|
|
$ |
1,385,584 |
|
|
$ |
1,250,496 |
|
|
$ |
1,276,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial finance % of total loans |
|
|
35 |
% |
|
|
28 |
% |
|
|
32 |
% |
|
|
30 |
% |
|
|
30 |
% |
National lending loans are further summarized below:
|
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
September 30, |
|
|||||
|
(Dollars in thousands) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|||||
|
Mortgage warehouse |
|
$ |
999,771 |
|
|
$ |
876,785 |
|
|
$ |
739,211 |
|
|
$ |
667,988 |
|
|
$ |
587,697 |
|
|
Commercial - Liquid credit |
|
|
188,034 |
|
|
|
192,118 |
|
|
|
172,380 |
|
|
|
81,353 |
|
|
|
37,386 |
|
|
Commercial - Premium finance |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
101,015 |
|
|
|
101,562 |
|
|
National lending |
|
$ |
1,187,805 |
|
|
$ |
1,068,903 |
|
|
$ |
911,591 |
|
|
$ |
850,356 |
|
|
$ |
726,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
National lending % of total loans |
|
|
24 |
% |
|
|
24 |
% |
|
|
21 |
% |
|
|
20 |
% |
|
|
17 |
% |
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) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|||||
|
Average community banking |
|
$ |
2,047,059 |
|
|
$ |
2,111,615 |
|
|
$ |
2,041,256 |
|
|
$ |
2,170,149 |
|
|
$ |
2,193,533 |
|
|
Average commercial finance |
|
|
1,480,593 |
|
|
|
1,259,584 |
|
|
|
1,292,749 |
|
|
|
1,260,000 |
|
|
|
1,208,823 |
|
|
Average national lending |
|
|
998,411 |
|
|
|
1,038,476 |
|
|
|
711,837 |
|
|
|
704,244 |
|
|
|
541,367 |
|
|
Average total loans |
|
$ |
4,526,063 |
|
|
$ |
4,409,675 |
|
|
$ |
4,045,842 |
|
|
$ |
4,134,393 |
|
|
$ |
3,943,723 |
|
|
Community banking yield |
|
|
5.05 |
% |
|
|
5.23 |
% |
|
|
5.67 |
% |
|
|
5.89 |
% |
|
|
5.79 |
% |
|
Commercial finance yield |
|
|
11.23 |
% |
|
|
10.21 |
% |
|
|
11.00 |
% |
|
|
11.64 |
% |
|
|
12.31 |
% |
|
National lending yield |
|
|
4.98 |
% |
|
|
4.67 |
% |
|
|
4.80 |
% |
|
|
4.96 |
% |
|
|
4.63 |
% |
|
Total loan yield |
|
|
7.05 |
% |
|
|
6.52 |
% |
|
|
7.22 |
% |
|
|
7.48 |
% |
|
|
7.63 |
% |
9
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, |
|
|||||
|
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|||||
|
Factored receivable period end balance |
|
$ |
948,987,000 |
|
|
$ |
528,379,000 |
|
|
$ |
641,366,000 |
|
|
$ |
573,372,000 |
|
|
$ |
562,009,000 |
|
|
Yield on average receivable balance |
|
|
15.65 |
% |
|
|
15.48 |
% |
|
|
16.13 |
% |
|
|
17.20 |
% |
|
|
18.23 |
% |
|
Rolling twelve quarter annual charge-off rate |
|
|
0.43 |
% |
|
|
0.43 |
% |
|
|
0.42 |
% |
|
|
0.39 |
% |
|
|
0.36 |
% |
|
Factored receivables - transportation concentration |
|
|
88 |
% |
|
|
85 |
% |
|
|
80 |
% |
|
|
81 |
% |
|
|
83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, including fees |
|
$ |
30,068,000 |
|
|
$ |
20,387,000 |
|
|
$ |
23,497,000 |
|
|
$ |
24,813,000 |
|
|
$ |
24,869,000 |
|
|
Non-interest income(1) |
|
|
1,157,000 |
|
|
|
1,072,000 |
|
|
|
1,296,000 |
|
|
|
1,154,000 |
|
|
|
1,291,000 |
|
|
Factored receivable total revenue |
|
|
31,225,000 |
|
|
|
21,459,000 |
|
|
|
24,793,000 |
|
|
|
25,967,000 |
|
|
|
26,160,000 |
|
|
Average net funds employed |
|
|
694,170,000 |
|
|
|
477,112,000 |
|
|
|
537,138,000 |
|
|
|
524,546,000 |
|
|
|
494,198,000 |
|
|
Yield on average net funds employed |
|
|
17.89 |
% |
|
|
18.09 |
% |
|
|
18.56 |
% |
|
|
19.64 |
% |
|
|
21.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable purchased |
|
$ |
1,984,490,000 |
|
|
$ |
1,238,465,000 |
|
|
$ |
1,450,618,000 |
|
|
$ |
1,489,538,000 |
|
|
$ |
1,450,905,000 |
|
|
Number of invoices purchased |
|
|
1,027,839 |
|
|
|
812,902 |
|
|
|
878,767 |
|
|
|
896,487 |
|
|
|
890,986 |
|
|
Average invoice size |
|
$ |
1,931 |
|
|
$ |
1,524 |
|
|
$ |
1,651 |
|
|
$ |
1,662 |
|
|
$ |
1,628 |
|
|
Average invoice size - transportation |
|
$ |
1,787 |
|
|
$ |
1,378 |
|
|
$ |
1,481 |
|
|
$ |
1,507 |
|
|
$ |
1,497 |
|
|
Average invoice size - non-transportation |
|
$ |
5,181 |
|
|
$ |
4,486 |
|
|
$ |
4,061 |
|
|
$ |
3,891 |
|
|
$ |
3,467 |
|
|
|
(1) |
September 30, 2020 balance excludes the $2.0 million gain recognized on the increased value of the receivable due from CVLG resulting from the amended TFS acquisition agreement. |
Deposits summarized as of:
|
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
September 30, |
|
|
|||||
|
(Dollars in thousands) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
|||||
|
Non-interest bearing demand |
|
$ |
1,315,900 |
|
|
$ |
1,120,949 |
|
|
$ |
846,412 |
|
|
$ |
809,696 |
|
|
$ |
754,233 |
|
|
|
Interest bearing demand |
|
|
634,272 |
|
|
|
648,309 |
|
|
|
583,445 |
|
|
|
580,323 |
|
|
|
587,123 |
|
|
|
Individual retirement accounts |
|
|
94,933 |
|
|
|
97,388 |
|
|
|
101,743 |
|
|
|
104,472 |
|
|
|
108,593 |
|
|
|
Money market |
|
|
384,476 |
|
|
|
397,914 |
|
|
|
412,376 |
|
|
|
497,105 |
|
|
|
424,162 |
|
|
|
Savings |
|
|
405,954 |
|
|
|
391,624 |
|
|
|
367,163 |
|
|
|
363,270 |
|
|
|
356,368 |
|
|
|
Certificates of deposit |
|
|
857,514 |
|
|
|
937,766 |
|
|
|
1,056,012 |
|
|
|
1,084,425 |
|
|
|
1,120,850 |
|
|
|
Brokered time deposits |
|
|
344,986 |
|
|
|
258,378 |
|
|
|
314,864 |
|
|
|
350,615 |
|
|
|
346,504 |
|
|
|
Other brokered deposits |
|
|
210,066 |
|
|
|
210,004 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
Total deposits |
|
$ |
4,248,101 |
|
|
$ |
4,062,332 |
|
|
$ |
3,682,015 |
|
|
$ |
3,789,906 |
|
|
$ |
3,697,833 |
|
|
10
Net interest margin summarized for the three months ended:
|
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
||||||||||||||||||
|
|
|
Average |
|
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
|
|
Average |
|
||||
|
(Dollars in thousands) |
|
Balance |
|
|
Interest |
|
|
Rate |
|
|
Balance |
|
|
Interest |
|
|
Rate |
|
||||||
|
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest earning cash balances |
|
$ |
224,958 |
|
|
$ |
73 |
|
|
|
0.13 |
% |
|
$ |
262,615 |
|
|
$ |
79 |
|
|
|
0.12 |
% |
|
Taxable securities |
|
|
259,470 |
|
|
|
1,674 |
|
|
|
2.57 |
% |
|
|
303,519 |
|
|
|
2,400 |
|
|
|
3.18 |
% |
|
Tax-exempt securities |
|
|
39,847 |
|
|
|
253 |
|
|
|
2.53 |
% |
|
|
43,796 |
|
|
|
276 |
|
|
|
2.53 |
% |
|
FHLB and other restricted stock |
|
|
22,121 |
|
|
|
122 |
|
|
|
2.19 |
% |
|
|
36,375 |
|
|
|
148 |
|
|
|
1.64 |
% |
|
Loans |
|
|
4,526,063 |
|
|
|
80,242 |
|
|
|
7.05 |
% |
|
|
4,409,675 |
|
|
|
71,495 |
|
|
|
6.52 |
% |
|
Total interest earning assets |
|
$ |
5,072,459 |
|
|
$ |
82,364 |
|
|
|
6.46 |
% |
|
$ |
5,055,980 |
|
|
$ |
74,398 |
|
|
|
5.92 |
% |
|
Non-interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
446,249 |
|
|
|
|
|
|
|
|
|
|
|
431,092 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
5,518,708 |
|
|
|
|
|
|
|
|
|
|
$ |
5,487,072 |
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing demand |
|
$ |
635,287 |
|
|
$ |
207 |
|
|
|
0.13 |
% |
|
$ |
630,023 |
|
|
$ |
287 |
|
|
|
0.18 |
% |
|
Individual retirement accounts |
|
|
95,962 |
|
|
|
300 |
|
|
|
1.24 |
% |
|
|
100,211 |
|
|
|
359 |
|
|
|
1.44 |
% |
|
Money market |
|
|
385,620 |
|
|
|
263 |
|
|
|
0.27 |
% |
|
|
398,276 |
|
|
|
363 |
|
|
|
0.37 |
% |
|
Savings |
|
|
400,102 |
|
|
|
152 |
|
|
|
0.15 |
% |
|
|
382,521 |
|
|
|
144 |
|
|
|
0.15 |
% |
|
Certificates of deposit |
|
|
905,075 |
|
|
|
3,782 |
|
|
|
1.66 |
% |
|
|
1,008,644 |
|
|
|
5,055 |
|
|
|
2.02 |
% |
|
Brokered time deposits |
|
|
247,928 |
|
|
|
941 |
|
|
|
1.51 |
% |
|
|
301,262 |
|
|
|
1,374 |
|
|
|
1.83 |
% |
|
Other brokered deposits |
|
|
251,701 |
|
|
|
189 |
|
|
|
0.30 |
% |
|
|
4,670 |
|
|
|
2 |
|
|
|
0.17 |
% |
|
Total interest bearing deposits |
|
|
2,921,675 |
|
|
|
5,834 |
|
|
|
0.79 |
% |
|
|
2,825,607 |
|
|
|
7,584 |
|
|
|
1.08 |
% |
|
Federal Home Loan Bank advances |
|
|
255,163 |
|
|
|
143 |
|
|
|
0.22 |
% |
|
|
678,225 |
|
|
|
572 |
|
|
|
0.34 |
% |
|
Subordinated notes |
|
|
87,425 |
|
|
|
1,348 |
|
|
|
6.13 |
% |
|
|
87,368 |
|
|
|
1,321 |
|
|
|
6.08 |
% |
|
Junior subordinated debentures |
|
|
39,874 |
|
|
|
462 |
|
|
|
4.61 |
% |
|
|
39,745 |
|
|
|
554 |
|
|
|
5.61 |
% |
|
Other borrowings |
|
|
236,297 |
|
|
|
198 |
|
|
|
0.33 |
% |
|
|
137,045 |
|
|
|
116 |
|
|
|
0.34 |
% |
|
Total interest bearing liabilities |
|
$ |
3,540,434 |
|
|
$ |
7,985 |
|
|
|
0.90 |
% |
|
$ |
3,767,990 |
|
|
$ |
10,147 |
|
|
|
1.08 |
% |
|
Non-interest bearing liabilities and equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing demand deposits |
|
|
1,213,494 |
|
|
|
|
|
|
|
|
|
|
|
1,038,979 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
76,453 |
|
|
|
|
|
|
|
|
|
|
|
69,845 |
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
688,327 |
|
|
|
|
|
|
|
|
|
|
|
610,258 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
5,518,708 |
|
|
|
|
|
|
|
|
|
|
$ |
5,487,072 |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
74,379 |
|
|
|
|
|
|
|
|
|
|
$ |
64,251 |
|
|
|
|
|
|
Interest spread |
|
|
|
|
|
|
|
|
|
|
5.56 |
% |
|
|
|
|
|
|
|
|
|
|
4.84 |
% |
|
Net interest margin |
|
|
|
|
|
|
|
|
|
|
5.83 |
% |
|
|
|
|
|
|
|
|
|
|
5.11 |
% |
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.
11
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) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||
|
Net income available to common stockholders |
|
$ |
22,005 |
|
|
$ |
13,440 |
|
|
$ |
(4,450 |
) |
|
$ |
16,709 |
|
|
$ |
14,317 |
|
|
$ |
30,995 |
|
|
$ |
41,835 |
|
|
Transaction costs |
|
|
827 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
827 |
|
|
|
— |
|
|
Gain on sale of subsidiary or division |
|
|
— |
|
|
|
(9,758 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,758 |
) |
|
|
— |
|
|
Tax effect of adjustments |
|
|
(197 |
) |
|
|
2,451 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,254 |
|
|
|
— |
|
|
Adjusted net income available to common stockholders - diluted |
|
$ |
22,635 |
|
|
$ |
6,133 |
|
|
$ |
(4,450 |
) |
|
$ |
16,709 |
|
|
$ |
14,317 |
|
|
$ |
24,318 |
|
|
$ |
41,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - diluted |
|
|
24,802,388 |
|
|
|
24,074,442 |
|
|
|
24,314,329 |
|
|
|
25,254,862 |
|
|
|
25,734,471 |
|
|
|
24,464,215 |
|
|
|
26,331,740 |
|
|
Adjusted diluted earnings per common share |
|
$ |
0.91 |
|
|
$ |
0.25 |
|
|
$ |
(0.18 |
) |
|
$ |
0.66 |
|
|
$ |
0.56 |
|
|
$ |
0.99 |
|
|
$ |
1.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total stockholders' equity |
|
$ |
688,327 |
|
|
$ |
610,258 |
|
|
$ |
627,369 |
|
|
$ |
647,546 |
|
|
$ |
646,041 |
|
|
$ |
642,151 |
|
|
$ |
647,787 |
|
|
Average preferred stock liquidation preference |
|
|
(45,000 |
) |
|
|
(5,934 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(17,080 |
) |
|
|
— |
|
|
Average total common stockholders' equity |
|
|
643,327 |
|
|
|
604,324 |
|
|
|
627,369 |
|
|
|
647,546 |
|
|
|
646,041 |
|
|
|
625,071 |
|
|
|
647,787 |
|
|
Average goodwill and other intangibles |
|
|
(192,682 |
) |
|
|
(187,255 |
) |
|
|
(189,359 |
) |
|
|
(191,551 |
) |
|
|
(193,765 |
) |
|
|
(189,776 |
) |
|
|
(196,035 |
) |
|
Average tangible common stockholders' equity |
|
$ |
450,645 |
|
|
$ |
417,069 |
|
|
$ |
438,010 |
|
|
$ |
455,995 |
|
|
$ |
452,276 |
|
|
$ |
435,295 |
|
|
$ |
451,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders |
|
$ |
22,005 |
|
|
$ |
13,440 |
|
|
$ |
(4,450 |
) |
|
$ |
16,709 |
|
|
$ |
14,317 |
|
|
$ |
30,995 |
|
|
$ |
41,835 |
|
|
Average tangible common equity |
|
|
450,645 |
|
|
|
417,069 |
|
|
|
438,010 |
|
|
|
455,995 |
|
|
|
452,276 |
|
|
|
435,295 |
|
|
|
451,752 |
|
|
Return on average tangible common equity |
|
|
19.43 |
% |
|
|
12.96 |
% |
|
|
(4.09 |
%) |
|
|
14.54 |
% |
|
|
12.56 |
% |
|
|
9.51 |
% |
|
|
12.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
74,379 |
|
|
$ |
64,251 |
|
|
$ |
62,500 |
|
|
$ |
66,408 |
|
|
$ |
64,765 |
|
|
$ |
201,130 |
|
|
$ |
189,495 |
|
|
Non-interest income |
|
|
10,493 |
|
|
|
20,029 |
|
|
|
7,477 |
|
|
|
8,666 |
|
|
|
7,742 |
|
|
|
37,999 |
|
|
|
22,903 |
|
|
Operating revenue |
|
|
84,872 |
|
|
|
84,280 |
|
|
|
69,977 |
|
|
|
75,074 |
|
|
|
72,507 |
|
|
|
239,129 |
|
|
|
212,398 |
|
|
Gain on sale of subsidiary or division |
|
|
— |
|
|
|
(9,758 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,758 |
) |
|
|
— |
|
|
Adjusted operating revenue |
|
$ |
84,872 |
|
|
$ |
74,522 |
|
|
$ |
69,977 |
|
|
$ |
75,074 |
|
|
$ |
72,507 |
|
|
$ |
229,371 |
|
|
$ |
212,398 |
|
|
Non-interest expenses |
|
$ |
55,297 |
|
|
$ |
52,726 |
|
|
$ |
54,753 |
|
|
$ |
52,661 |
|
|
$ |
52,153 |
|
|
$ |
162,776 |
|
|
$ |
151,423 |
|
|
Transaction costs |
|
|
(827 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(827 |
) |
|
|
— |
|
|
Adjusted non-interest expenses |
|
$ |
54,470 |
|
|
$ |
52,726 |
|
|
$ |
54,753 |
|
|
$ |
52,661 |
|
|
$ |
52,153 |
|
|
$ |
161,949 |
|
|
$ |
151,423 |
|
|
Adjusted efficiency ratio |
|
|
64.18 |
% |
|
|
70.75 |
% |
|
|
78.24 |
% |
|
|
70.15 |
% |
|
|
71.93 |
% |
|
|
70.61 |
% |
|
|
71.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net non-interest expense to average assets ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses |
|
$ |
55,297 |
|
|
$ |
52,726 |
|
|
$ |
54,753 |
|
|
$ |
52,661 |
|
|
$ |
52,153 |
|
|
$ |
162,776 |
|
|
$ |
151,423 |
|
|
Transaction costs |
|
|
(827 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(827 |
) |
|
|
— |
|
|
Adjusted non-interest expenses |
|
$ |
54,470 |
|
|
$ |
52,726 |
|
|
$ |
54,753 |
|
|
$ |
52,661 |
|
|
$ |
52,153 |
|
|
$ |
161,949 |
|
|
$ |
151,423 |
|
|
Total non-interest income |
|
$ |
10,493 |
|
|
$ |
20,029 |
|
|
$ |
7,477 |
|
|
$ |
8,666 |
|
|
$ |
7,742 |
|
|
$ |
37,999 |
|
|
$ |
22,903 |
|
|
Gain on sale of subsidiary or division |
|
|
— |
|
|
|
(9,758 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,758 |
) |
|
|
— |
|
|
Adjusted non-interest income |
|
$ |
10,493 |
|
|
$ |
10,271 |
|
|
$ |
7,477 |
|
|
$ |
8,666 |
|
|
$ |
7,742 |
|
|
$ |
28,241 |
|
|
$ |
22,903 |
|
|
Adjusted net non-interest expenses |
|
$ |
43,977 |
|
|
$ |
42,455 |
|
|
$ |
47,276 |
|
|
$ |
43,995 |
|
|
$ |
44,411 |
|
|
$ |
133,708 |
|
|
$ |
128,520 |
|
|
Average total assets |
|
$ |
5,518,708 |
|
|
$ |
5,487,072 |
|
|
$ |
4,906,547 |
|
|
$ |
5,050,860 |
|
|
$ |
4,840,540 |
|
|
$ |
5,304,903 |
|
|
$ |
4,680,234 |
|
|
Adjusted net non-interest expense to average assets ratio |
|
|
3.17 |
% |
|
|
3.11 |
% |
|
|
3.88 |
% |
|
|
3.46 |
% |
|
|
3.64 |
% |
|
|
3.37 |
% |
|
|
3.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
$ |
693,842 |
|
|
$ |
656,871 |
|
|
$ |
589,347 |
|
|
$ |
636,590 |
|
|
$ |
633,693 |
|
|
$ |
693,842 |
|
|
$ |
633,693 |
|
|
Preferred stock liquidation preference |
|
|
(45,000 |
) |
|
|
(45,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45,000 |
) |
|
|
— |
|
|
Total common stockholders' equity |
|
|
648,842 |
|
|
|
611,871 |
|
|
|
589,347 |
|
|
|
636,590 |
|
|
|
633,693 |
|
|
|
648,842 |
|
|
|
633,693 |
|
|
Goodwill and other intangibles |
|
|
(192,041 |
) |
|
|
(186,162 |
) |
|
|
(188,208 |
) |
|
|
(190,286 |
) |
|
|
(192,440 |
) |
|
|
(192,041 |
) |
|
|
(192,440 |
) |
|
Tangible common stockholders' equity |
|
$ |
456,801 |
|
|
$ |
425,709 |
|
|
$ |
401,139 |
|
|
$ |
446,304 |
|
|
$ |
441,253 |
|
|
$ |
456,801 |
|
|
$ |
441,253 |
|
|
Common shares outstanding |
|
|
24,851,601 |
|
|
|
24,202,686 |
|
|
|
24,101,120 |
|
|
|
24,964,961 |
|
|
|
25,357,985 |
|
|
|
24,851,601 |
|
|
|
25,357,985 |
|
|
Tangible book value per share |
|
$ |
18.38 |
|
|
$ |
17.59 |
|
|
$ |
16.64 |
|
|
$ |
17.88 |
|
|
$ |
17.40 |
|
|
$ |
18.38 |
|
|
$ |
17.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at end of period |
|
$ |
5,836,787 |
|
|
$ |
5,617,493 |
|
|
$ |
5,353,729 |
|
|
$ |
5,060,297 |
|
|
$ |
5,039,697 |
|
|
$ |
5,836,787 |
|
|
$ |
5,039,697 |
|
|
Goodwill and other intangibles |
|
|
(192,041 |
) |
|
|
(186,162 |
) |
|
|
(188,208 |
) |
|
|
(190,286 |
) |
|
|
(192,440 |
) |
|
|
(192,041 |
) |
|
|
(192,440 |
) |
|
Tangible assets at period end |
|
$ |
5,644,746 |
|
|
$ |
5,431,331 |
|
|
$ |
5,165,521 |
|
|
$ |
4,870,011 |
|
|
$ |
4,847,257 |
|
|
$ |
5,644,746 |
|
|
$ |
4,847,257 |
|
|
Tangible common stockholders' equity ratio |
|
|
8.09 |
% |
|
|
7.84 |
% |
|
|
7.77 |
% |
|
|
9.16 |
% |
|
|
9.10 |
% |
|
|
8.09 |
% |
|
|
9.10 |
% |
|
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. |
|
12
|
|
• |
"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) |
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||
|
Loan discount accretion |
|
$ |
4,104 |
|
|
$ |
2,139 |
|
|
$ |
2,134 |
|
|
$ |
1,555 |
|
|
$ |
1,159 |
|
|
$ |
8,377 |
|
|
$ |
4,013 |
|
|
3) |
Asset quality ratios exclude loans held for sale, except for non-performing assets to total assets. |
|
|
4) |
Past due ratio has been revised to exclude nonaccrual loans with contractual payments less than 30 days past due. |
|
|
5) |
Beginning January 1, 2020, the allowance for credit losses was calculated in accordance with Accounting Standards Codification Topic 326, “Financial Instruments – Credit Losses” (“ASC 326”). |
|
|
6) |
Current quarter ratios are preliminary. |
|
Source: Triumph Bancorp, Inc.
###
Investor Relations:
Luke Wyse
Senior Vice President, Finance & Investor Relations
lwyse@tbkbank.com
214-365-6936
Media Contact:
Amanda Tavackoli
Senior Vice President, Director of Corporate Communication
atavackoli@tbkbank.com
214-365-6930
13
Q3 2020 Earnings Release October 19, 2020 Exhibit 99.2
DISCLAIMER Forward-Looking Statements This presentation contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements. While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 11, 2020 and its Quarterly Report on Form 10-Q, filed with the SEC on August 7, 2020. Non-GAAP Financial Measures This presentation 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 the presentation. Numbers in this presentation may not sum due to rounding. Unless otherwise referenced, all data presented is as of September 30, 2020. PAGE
COMPANY OVERVIEW PAGE Triumph Bancorp, Inc. (NASDAQ: TBK) (“Triumph”) 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 TOTAL ASSETS $5.8 billion MARKET CAP(1) $1.1 billion TOTAL LOANS $4.9 billion TOTAL DEPOSITS $4.2 billion Data is as of September 30, 2020, except as noted below (1) Data is as of October 16, 2020
Q3 2020 RESULTS PAGE Diluted earnings per share of $0.89 for the quarter Adjusted diluted earnings per share of $0.91 for the quarter excluding the transaction costs related to the receivables acquired from Transport Financial Solutions (“TFS”), net of taxes Total loans held for investment increased $459.6 million The commercial finance portfolio increased $461.9 million, the national lending portfolio increased $118.9 million, and the community banking portfolio decreased $121.2 million Total deposits increased $185.8 million, or 4.6%. Noninterest bearing demand deposits grew $195.0 million, or 17.4% Acquired $107.5 million of factored receivables from TFS on July 8, 2020. $22.0 million Net income to common stockholders LOAN GROWTH 10.5% Loans Held for Investment NIM 5.83% Net Interest Margin1 ROATCE 19.43% Return on Average Tangible Common Equity2 TCE/TA 8.09% Tangible Common Equity / Tangible Assets2 1 Includes discount accretion on purchased loans of $4,104 in Q3 2020 2 Reconciliations of non-GAAP financial measures can be found at the end of the presentation
LONG TERM PERFORMANCE GOALS VS ACTUAL Q3 NET INTEREST INCOME TO AVERAGE ASSETS Q3: 5.36% Q3 Adjusted: 5.36% Goal 6.00 - 6.50% NET OVERHEAD RATIO Q3: 3.23% Q3 Adjusted: 3.17% Goal 3.00 - 3.50% Annualized performance metrics presented are for the three months ended September 30, 2020 Reconciliations of these financial measures can be found at the end of the presentation PRE-PROVISION NET REVENUE Q3: 2.13% Q3 Adjusted: 2.19% Goal > 3.00% CREDIT COSTS Q3: (0.02)% Q3 Adjusted: (0.02)% Goal < 0.30% TAXES Q3: 0.50% Q3 Adjusted: 0.52% Goal ~ 0.57% RETURN ON AVERAGE ASSETS TO COMMON STOCKHOLDERS Q3: 1.59% Q3 Adjusted: 1.63% Goal > 2.00% AVERAGE TANGIBLE COMMON EQUITY TO AVERAGE ASSETS Q3: 8.17% Q3 Adjusted: 8.17% Goal ~ 8.75% RETURN ON AVERAGE TANGIBLE COMMON EQUITY (“ROATCE”) Goal > 20.00% Q3: 19.43% Q3 Adjusted: 19.98% PAGE PREFERRED DIVIDENDS Q3: 0.06% Q3 Adjusted: 0.06% Goal ~ 0.06%
LOAN PORTFOLIO TOTAL LOANS (in millions) COMMUNITY BANKING Focused on core deposit generation and business lending in the communities we serve COMMERCIAL FINANCE Factoring, asset based lending, and equipment finance produce top tier return on assets NATIONAL LENDING Mortgage warehouse to provide portfolio diversification and liquid credit to opportunistically scale our loan portfolio $4,889.6 Total loans include $19.9 million of commercial real estate loans held for sale, $11.6 million of 1-4 residential mortgage loans held for sale and $5.2 million of liquid credit loans held for sale PAGE Community Banking $2,009.7 41% Commercial Finance $1,686.9 35% National Lending $1,193.0 24%
LOAN PORTFOLIO DETAIL COMMUNITY BANKING 41% of Total Portfolio NATIONAL LENDING 24% of Total Portfolio COMMERCIAL FINANCE 35% of Total Portfolio $2,009.7 $1,193.0 $1,686.9 Chart data labels – dollars in millions (1) Includes $19.9 million of commercial real estate loans held for sale (2) Includes $11.6 million of mortgage loans held for sale (3) Includes $5.2 million of liquid credit loans held for sale PAGE Real Estate & Farmland $1,314.3 65% Commercial $678.2 34% Consumer $17.2 1% Factored Receivables $1,016.3 60% Equipment Finance $509.9 30% Asset-Based Lending $160.7 10% Mortgage Warehouse $999.8 84% Liquid Credit $193.2 16% REAL ESTATE Commercial Real Estate(1) $782.4 Construction, Land & Development $244.5 1-4 Family Residential(2) $176.4 Farmland $111.0 COMMERCIAL Agriculture $112.2 Payment Protection Program $223.2 General $342.8 CONSUMER $17.2 FACTORED RECEIVABLES Triumph Business Capital $949.0 Other Factored Receivables $67.3 EQUIPMENT FINANCE $509.9 ASSET BASED LENDING $160.7 $1,686.9 MORTGAGE WAREHOUSE $999.8 LIQUID CREDIT(3) $193.2
TRANSPORTATION FINANCE Gross transportation revenue consists of factoring revenue from transportation clients, interest and fees from commercial loans to borrowers in transportation industries, transportation related insurance commissions, and revenue from TriumphPay. Total gross revenue consists of total interest income and noninterest income. Transportation assets include transportation related factored receivables and commercial loans to borrowers in transportation industries. By proudly banking the trucking industry, we intend to be a dominant player in a large industry that is a profitable sector for a well-positioned bank. Products we offer to transportation clients include: Checking Treasury management Factoring Equipment finance TriumphPay Commercial lending Fuel cards Insurance brokerage PAGE
Transportation Payment Amounts Processed (in millions) TRANSPORTATION PAYMENTS PROCESSED $2,920.1 PAGE Triumph Business Capital TriumphPay COMBINED TRANSPORTATION PAYMENTS ANNUALIZED RUN RATE ~$12 BILLION Data is for the quarter ended September 30, 2020 Triumph Business Capital $1,758.8 60% TriumphPay $1,161.3 40%
TRIUMPH BUSINESS CAPITAL FACTORING Yield of 15.65% in the current quarter Average annual charge-off rate of 0.43% over the past 3 years * On July 8, 2020, we acquired $107.5 million of factored receivables from Transport Financial Solutions. On June 2, 2018, we acquired $131.0 million of transportation factoring assets via the acquisition of Interstate Capital Corporation and certain of its affiliates [Pie Chart] Transportation Non-Transportation 88% 12% [Bar/Line Chart] Total Purchases Number of Invoices Purchased [Bar Chart] Average Invoice Size PAGE
CARRIER PAYMENT PLATFORM CLIENTS ON PLATFORM [Bar/Line Chart] Invoice and Payment Trends Number of Invoices Payment Amounts Processed Total payment amounts processed (annualized) Total invoices processed (annualized) PAGE
ASSET QUALITY PAGE
COVID-19 EXPOSURE Industry Total Exposure1 (millions) % of Gross Loans Loans in Deferral (millions) Retail $202.5 4.2% $− Hospitality $129.1 2.7% $24.1 Energy $78.6 1.6% $9.0 Health Care/Senior Care $48.9 1.0% $− Restaurants $38.5 0.8% $1.2 Energy Total Exposure1 (millions) Equipment finance $43.4 Factoring $22.0 Asset-based lending $2.4 Other $10.8 No exposure to E&P or reserve based lending Retail Total Exposure1 (millions) Retail real estate $75.1 Vehicle lending (DFP) $42.3 Grocery and sundries2 $36.3 Factoring $18.4 Other $30.4 September 30, 2020 exposure to industries most impacted by COVID-19 1 On balance sheet loans and unfunded commitments to lend; excludes Paycheck Protection Program loans. 2 Includes exposure to grocery, pharmacy, gas stations, convenience stores and pet stores. PAGE
COVID-19 LOAN DEFERRALS (Dollars in millions) Balance of Loans in Deferral Total Loans % of Portfolio 2Q20 3Q20 3Q20 3Q20 Commercial $274.2 $16.8 $1,536.9 1% Factored receivables $− $− $1,016.3 −% Mortgage warehouse $− $− $999.8 −% Commercial real estate $269.6 $77.4 $762.5 10% Construction, land development, land $9.9 $0.1 $244.5 −% 1-4 family residential $17.5 $8.6 $164.8 5% Farmland $0.2 $− $111.0 −% Consumer $0.4 $0.1 $17.1 1% Total $571.8 $103.0 $4,852.9 2% Loans modified for borrowers impacted by the COVID-19 pandemic have decreased significantly from the prior quarter. PAGE
DEPOSIT MIX PAGE Changes From June 30, 2019(1) to September 30, 2020: Non-interest bearing demand up $632 million from 19% to 31% of deposit base CD balances down from 31% to 20% with an average cost of 1.66% in the current quarter Total cost of funds down by over 50% from 1.14% to 0.56% (1) June 30, 2019 is the quarter end prior to the strategic shift we announced during the second half of 2019. ü Non-interest bearing demand $1,315,900 Interest bearing demand 634,272 Individual retirement accounts 94,933 Money market 384,476 Savings 405,954 Certificates of deposit 857,514 Brokered time deposits 344,986 Other brokered deposits 210,066 Total deposits $4,248,101 31% 15% 2% 9% 10% 20% 8% 5%
FINANCIAL HIGHLIGHTS 1) Reconciliations of non-GAAP financial measures can be found at the end of the presentation. Adjusted metrics exclude material gains and expenses related to acquisition-related activities, net of tax where applicable. 2) Includes discount accretion on purchased loans of $1,159 in 3Q19, $1,555 in 4Q19, $2,134 in 1Q20, $2,139 in 2Q20, and $4,104 in 3Q20 (dollars in thousands). 3) Asset quality ratios exclude loans held for sale, except for nonperforming assets. 4) Current quarter ratios are preliminary PAGE As of and For the Three Months Ended Key Metrics September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019 Performance ratios - annualized Return on average assets 1.65% 0.99% (0.36%) 1.31% 1.17% Return on average tangible common equity (ROATCE) (1) 19.43% 12.96% (4.09%) 14.54% 12.56% Yield on loans(2) 7.05% 6.52% 7.22% 7.48% 7.63% Cost of total deposits 0.56% 0.79% 1.05% 1.15% 1.19% Net interest margin(2) 5.83% 5.11% 5.63% 5.72% 5.85% Net non-interest expense to average assets 3.23% 2.40% 3.88% 3.46% 3.64% Adjusted net non-interest expense to average assets (1) 3.17% 3.11% 3.88% 3.46% 3.64% Efficiency ratio 65.15% 62.56% 78.24% 70.15% 71.93% Adjusted efficiency ratio (1) 64.18% 70.75% 78.24% 70.15% 71.93% Asset Quality(3) Non-performing assets to total assets 1.52% 1.20% 1.09% 0.87% 0.91% ACL to total loans 1.88% 1.24% 1.04% 0.69% 0.76% Net charge-offs to average loans 0.02% 0.02% 0.04% 0.08% 0.01% Capital(4) Tier 1 capital to average assets 10.75% 9.98% 9.62% 10.03% 10.37% Tier 1 capital to risk-weighted assets 10.32% 10.57% 9.03% 10.29% 10.08% Common equity tier 1 capital to risk-weighted assets 8.72% 8.84% 8.24% 9.46% 9.26% Total capital to risk-weighted assets 12.94% 13.44% 11.63% 12.76% 11.79% Per Share Amounts Book value per share $26.11 $25.28 $24.45 $25.50 $24.99 Tangible book value per share (1) $18.38 $17.59 $16.64 $17.88 $17.40 Basic earnings (loss) per common share $0.89 $0.56 $(0.18) $0.67 $0.56 Diluted earnings (loss) per common share $0.89 $0.56 $(0.18) $0.66 $0.56 Adjusted diluted earnings per common share(1) $0.91 $0.25 $(0.18) $0.66 $0.56
PLATFORM OVERVIEW – BRANCH NETWORK 63 TOTAL BRANCHES 38 in Colorado 15 in Illinois 3 in Iowa 3 in New Mexico 2 in Kansas 2 in Texas BRANCH LOCATIONS as of September 30, 2020 PAGE
PLATFORM OVERVIEW – LENDING 23% Texas GEOGRAPHIC LENDING CONCENTRATIONS1 as of September 30, 2020 20% Colorado 1% Kansas 6% Iowa 11% Illinois 2% New Mexico 1 States with a physical branch presence. Excludes factored receivables PAGE
COVID-19 RESPONSE We are supporting our customers and communities affected by the COVID-19 pandemic. Loan payment deferral program and participation in the Paycheck Protection Program (PPP). As of September 30th our balance sheet reflected short-term deferrals on outstanding loan balances of $103.0 million to assist customers impacted by COVID-19. These deferred balances carried accrued interest of $0.7 million and the modifications were not considered troubled debt restructurings. As of September 30th, we carried 2,080 PPP loans with a total balance of $223.2 million classified as commercial loans. We have received approximately $7.7 million in total fees from the SBA, $1.2 million and $2.6 million of which were recognized in earnings during the three and nine months ended September 30, 2020. The remaining fees will be amortized over the respective lives of the loans. We waived a variety of deposit fees during the second quarter and continue to support the prompt processing of payments including such payments for non-bank customers. We continue to invest in, serve, and care for our communities. Local teams have made donations and purchased meals for those in need, including first responders. Most branches remain open with drive-through access. Over 90% of non-retail staff team members are working from home with minimal impact to our operations and service levels. PAGE
NON-GAAP FINANCIAL RECONCILIATION PAGE Metrics and non-GAAP financial reconciliation As of and for the Three Months Ended September 30, June 30, March 31, December 31, September 30, (Dollars in thousands, except per share amounts) 2020 2020 2020 2019 2019 Net income available to common stockholders $22,005 $13,440 $(4,450) $16,709 $14,317 Transaction costs 827 — — — — Gain on sale of subsidiary or division — (9,758) — — — Tax effect of adjustments (197) 2,451 — — — Adjusted net income available to common stockholders $22,635 $6,133 $(4,450) $16,709 $14,317 Weighted average shares outstanding - diluted 24,802,388 24,074,442 24,314,329 25,254,862 25,734,471 Adjusted diluted earnings per common share $0.91 $0.25 $(0.18) $0.66 $0.56 Average total stockholders' equity $688,327 $610,258 $627,369 $647,546 $646,041 Average preferred stock liquidation preference (45,000) (5,934) — — — Average total common stockholders' equity 643,327 604,324 627,369 647,546 646,041 Average goodwill and other intangibles (192,682) (187,255) (189,359) (191,551) (193,765) Average tangible common stockholders' equity $450,645 $417,069 $438,010 $455,995 $452,276 Net income (loss) $22,005 $13,440 $(4,450) $16,709 $14,317 Average tangible common equity 450,645 417,069 438,010 455,995 452,276 Return on average tangible common equity 19.43% 12.96% (4.09%) 14.54% 12.56% Adjusted efficiency ratio: Net interest income $74,379 $64,251 $62,500 $66,408 $64,765 Non-interest income 10,493 20,029 7,477 8,666 7,742 Operating revenue 84,872 84,280 69,977 75,074 72,507 Gain on sale of subsidiary or division — (9,758) — — — Adjusted operating revenue $84,872 $74,522 $69,977 $75,074 $72,507 Non-interest expenses $55,297 $52,726 $54,753 $52,661 $52,153 Transaction costs (827) — — — — Adjusted non-interest expense $54,470 $52,726 $54,753 $52,661 $52,153 Adjusted efficiency ratio 64.18% 70.75% 78.24% 70.15% 71.93%
NON-GAAP FINANCIAL RECONCILIATION PAGE Metrics and non-GAAP financial reconciliation (cont'd) As of and for the Three Months Ended September 30, June 30, March 31, December 31, September 30, (Dollars in thousands, except per share amounts) 2020 2020 2020 2019 2019 Adjusted net non-interest expense to average assets ratio: Non-interest expenses $55,297 $52,726 $54,753 $52,661 $52,153 Transaction costs (827) — — — — Adjusted non-interest expense 54,470 52,726 54,753 52,661 52,153 Total non-interest income 10,493 20,029 7,477 8,666 7,742 Gain on sale of subsidiary or division — (9,758) — — — Adjusted non-interest income $10,493 $10,271 $7,477 $8,666 $7,742 Adjusted net non-interest expenses $43,977 $42,455 $47,276 $43,995 $44,411 Average total assets $5,518,708 $5,487,072 $4,906,547 $5,050,860 $4,840,540 Adjusted net non-interest expense to average assets ratio 3.17% 3.11% 3.88% 3.46% 3.64% Total stockholders' equity $693,842 $656,871 $589,347 $636,590 $633,693 Preferred stock liquidation preference (45,000) (45,000) — — — Total common stockholders' equity 648,842 611,871 589,347 636,590 633,693 Goodwill and other intangibles (192,041) (186,162) (188,208) (190,286) (192,440) Tangible common stockholders' equity $456,801 $425,709 $401,139 $446,304 $441,253 Common shares outstanding at end of period 24,851,601 24,202,686 24,101,120 24,964,961 25,357,985 Tangible book value per share $18.38 $17.59 $16.64 $17.88 $17.40 Total assets at end of period $5,836,787 $5,617,493 $5,353,729 $5,060,297 $5,039,697 Goodwill and other intangibles (192,041) (186,162) (188,208) (190,286) (192,440) Tangible assets at period end $5,644,746 $5,431,331 $5,165,521 $4,870,011 $4,847,257 Tangible common stockholders' equity ratio 8.09% 7.84% 7.77% 9.16% 9.10%
NON-GAAP FINANCIAL RECONCILIATION Ratios may not recalculate due to rounding Ratios may not recalculate due to rounding PAGE Metrics and non-GAAP financial reconciliation (cont'd) For the Three Months Ended For the Three Months Ended September 30, 2020 September 30, 2020 (Dollars in thousands, except per share amounts) GAAP Adjusted (Dollars in thousands, except per share amounts) GAAP Adjusted Net interest income to average total assets: Taxes to average total assets: Net interest income $74,379 $74,379 Income tax expense (benefit) $6,929 $6,929 Average total assets 5,518,708 5,518,708 Tax effect of adjustments — 197 Net interest income to average assets 5.36% 5.36% Adjusted Tax Expense $6,929 $7,126 Average total assets 5,518,708 5,518,708 Net noninterest expense to average total assets: Taxes to average assets 0.50% 0.52% Total noninterest expense $55,297 $55,297 Transaction costs — (827) Preferred dividends to average total assets: Adjusted noninterest expense 55,297 54,470 Preferred dividends $899 $899 Total noninterest income 10,493 10,493 Average total assets 5,518,708 5,518,708 Net noninterest expense $44,804 $43,977 Preferred dividends to average assets 0.06% 0.06% Average total assets 5,518,708 5,518,708 Net noninterest expense to average assets ratio 3.23% 3.17% Return on average total assets: Net interest income to average assets 5.36% 5.36% Pre-provision net revenue to average total assets: Net noninterest expense to average assets ratio (3.23%) (3.17%) Net interest income $74,379 $74,379 Pre-provision net revenue to average assets 2.13% 2.19% Adjusted net noninterest expense 44,804 43,977 Credit costs to average assets 0.02% 0.02% Pre-provision net revenue $29,575 $30,402 Taxes to average assets (0.50%) (0.52%) Average total assets 5,518,708 5,518,708 Return on average assets 1.65% 1.69% Pre-provision net revenue to average assets 2.13% 2.19% Dividends to average assets (0.06%) (0.06%) Return on average assets to common stockholders 1.59% 1.63% Credit costs to average total assets: Credit loss expense $(258) $(258) Average tangible common equity to average assets: Average total assets 5,518,708 5,518,708 Average tangible equity $450,645 $450,645 Credit costs to average assets (0.02%) (0.02%) Average assets 5,518,708 5,518,708 Average tangible equity to average assets 8.17% 8.17% Return on average tangible common equity: Return on average assets to common stockholders 1.59% 1.63% Average tangible equity to average assets 8.17% 8.17% Return on average tangible common equity: 19.43% 19.98%
Appendix
TFS TRANSACTION: DAY 1 ACCOUNTING PAGE Day 1 Acquisition Accounting (millions) Face Value of Over-Advances $62.2 Allowance for Credit Loss(1) (37.4) (1)ACL established on acquired PCD assets in purchase accounting - not through earnings. Discount (0.9) Net Over-Advances 23.8 Other Receivables 46.3 Escrows Payable (5.6) Indemnification Asset(2) 31.2 (2)Fair Value of Settlement Indemnification. Values of 1 and 2 Deferred Tax Asset 1.4 considers risk of not collecting all Over-Advances. Customer Intangible 3.5 Goodwill 4.5 Net Assets Acquired $105.1 Initial Cash Paid $108.4 Stock Issued(3) 13.9 (3)630,268 shares issued at July 8 price of $22.12 Receivable from Seller(4) (17.2) (4)Net proceeds expected based on 9-23 settlement date and Consideration Paid $105.1 $27.89 stock price
TFS TRANSACTION: DISPUTE SETTLEMENT PAGE As of and For the Three Months Ended Key Metrics June 30, March 31, December 31, September 30, June 30, 2020 2020 2019 2019 2019 Performance ratios - annualized Return on average assets 0.99% (0.36%) 1.31% 1.17% 1.09% Return on average tangible common equity (ROATCE) (1) 12.96% (4.09%) 14.54% 12.56% 11.19% Yield on loans(2) 6.52% 7.22% 7.48% 7.63% 7.95% Cost of total deposits 0.79% 1.05% 1.15% 1.19% 1.14% Net interest margin(2) 5.11% 5.63% 5.72% 5.85% 5.99% Net non-interest expense to average assets 2.40% 3.88% 3.46% 3.64% 3.68% Adjusted net non-interest expense to average assets (1) 3.11% 3.88% 3.46% 3.64% 3.68% Efficiency ratio 62.56% 78.24% 70.15% 71.93% 71.37% Adjusted efficiency ratio (1) 70.75% 78.24% 70.15% 71.93% 71.37% Asset Quality(3) Non-performing assets to total assets 1.20% 1.09% 0.87% 0.91% 0.86% ACL to total loans 1.24% 1.04% 0.69% 0.76% 0.77% Net charge-offs to average loans 0.02% 0.04% 0.08% 0.01% 0.05% Capital(4) Tier 1 capital to average assets 9.98% 9.62% 10.03% 10.37% 10.84% Tier 1 capital to risk-weighted assets 10.57% 9.03% 10.29% 10.08% 11.08% Common equity tier 1 capital to risk-weighted assets 8.84% 8.24% 9.46% 9.26% 10.19% Total capital to risk-weighted assets 13.44% 11.63% 12.76% 11.79% 12.88% Per Share Amounts Book value per share $25.28 $24.45 $25.50 $24.99 $24.56 Tangible book value per share (1) $17.59 $16.64 $17.88 $17.40 $17.13 Basic earnings (loss) per common share $0.56 $(0.18) $0.67 $0.56 $0.48 Diluted earnings (loss) per common share $0.56 $(0.18) $0.66 $0.56 $0.48 Adjusted diluted earnings per common share(1) $0.25 $(0.18) $0.66 $0.56 $0.48 STRUCTURE OF THE DISPUTE SETTLEMENT AGREEMENT CVLG (the "Seller") has agreed to provide indemnification for 100% of the first $30 million of any losses related to the face value of Over Advances, and for 50% of the next $30 million of losses, for total indemnification of $45 million. WHAT IS THE RANGE OF OUTCOMES TO PRE-TAX EARNINGS? Complete Loss Scenario Should 100% of the Face Value be charged off the loss equals ~ $10 million. Charge-Off Face Value Net of ACL $(23.8) Max Indemnification = $45M - $31.2 NBV 13.8 Maximum Pre-Tax Loss $(10.0) No Loss Scenario Should none of the Face Value be charged off the gain equals ~ $6.2 million. Release ACL to Income $37.4 Write-off Indemnification Asset (31.2) Maximum Pre-Tax Income $6.2 OTHER ITEMS OF NOTE: - The Fair Value of the Company's stock issued exceeds the total intangibles created, but on a per share basis is 22 cents dilutive, or just over 1%. - The Company provided a Line of Credit to the Seller for $45 million secured by $60 million of collateral. The collateral secures the Seller's indemnification obligations, and the Line of Credit provides the Seller liquidity, if needed, to fund the indemnification. - The payment expected from the Seller increased $2 million from the date of settlement to September 30th, 2020. This increase was recorded in Q3 as "Other Income" to reflect the increase in the Company's stock price from the settlement date. Should actual proceeds at sale collected increase or decrease from this estimate, the delta will be similarly recorded in earnings.