DALLAS, July 19, 2017 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (NASDAQ:TBK) today announced earnings and operating results for the second quarter of 2017.

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 document.

2017 Second Quarter Highlights
  • For the second quarter of 2017, net income was $9.7 million and net income available to common stockholders was $9.5 million, compared to net income of $10.5 million and net income available to common stockholders of $10.3 million for the quarter ended March 31, 2017. The first quarter of 2017 included a pre-tax gain on the sale of our asset management subsidiary, Triumph Capital Advisors, LLC ("TCA") of $20.9 million.  Adjusted net income available to common stockholders excluding the gain on sale of TCA and transaction related costs was $0.3 million for the quarter ended March 31, 2017.
  • Diluted earnings per share were $0.51 for the quarter ended June 30, 2017, compared to $0.55 for the quarter ended March 31, 2017.  Adjusted diluted earnings per share, excluding the gain on sale of TCA and transaction related costs, were $0.02 for the quarter ended March 31, 2017.
  • Total loans held for investment increased $259.9 million, or 12.8%, to $2.295 billion at June 30, 2017, compared to $2.035 billion at March 31, 2017.   
  • Non-performing assets to total assets decreased to 1.50% at June 30, 2017 from 1.92% at March 31, 2017. Net charge-offs to average loans decreased to 0.03% for the quarter ended June 30, 2017, compared to 0.20% for the quarter ended March 31, 2017.
  • Net interest margin ("NIM") was 6.16% for the quarter ended June 30, 2017, compared to 5.37% for the quarter ended March 31, 2017. Adjusted NIM, which excludes loan discount accretion, was 5.70% for the quarter ended June 30, 2017, compared to 5.19% for the quarter ended March 31, 2017.

Balance Sheet

Total loans held for investment were $2.295 billion at June 30, 2017.  Our commercial finance loans, which comprise 35% of the loan portfolio, were $801.7 million at June 30, 2017, compared to $713.6 million at March 31, 2017.  This is an increase of $88.0 million, or 12.3%, in the second quarter of 2017, and includes a $51.5 million, or 21.3%, increase in factored receivables.  We also experienced $43.1 million of growth in our commercial real estate portfolio and a $107.4 million increase in our mortgage warehouse facilities in the quarter ended June 30, 2017.

Total deposits were $2.072 billion at June 30, 2017, an increase of $47.9 million or 2.4% for the second quarter of 2017.  Non-interest-bearing deposits accounted for 18% of total deposits and non-time deposits accounted for 54% of total deposits at June 30, 2017.

Net Interest Income

We earned net interest income for the quarter ended June 30, 2017 of $38.6 million compared to $31.8 million for the quarter ended March 31, 2017.  Net interest income for the quarter ended June 30, 2017 includes accelerated purchase discount accretion of $1.8 million associated with previously acquired loans that were prepaid during the quarter. 

Yields on loans for the quarter ended June 30, 2017 were up 64 bps from the prior quarter to 7.79% (up 32 bps from the prior quarter to 7.25% adjusted to exclude loan discount accretion). The average cost of our total deposits was 0.60% for the quarter ended June 30, 2017 compared to 0.58% for the quarter ended March 31, 2017, on an annualized basis. 

Asset Quality

Non-performing assets decreased 42 bps from March 31, 2017 to 1.50% of total assets at June 30, 2017.  The ratio of past due to total loans decreased to 2.51% at June 30, 2017 from 3.16% at March 31, 2017.  We recorded total net charge-offs of $0.7 million for the quarter ended June 30, 2017 compared to net charge-offs of $4.0 million for the quarter ended March 31, 2017.  We recorded a provision for loan losses of $1.4 million for the quarter ended June 30, 2017 compared to a provision of $7.7 million for the quarter ended March 31, 2017. From March 31, 2017 to June 30, 2017, our ALLL increased from $19.1 million or 0.94% of total loans to $19.8 million or 0.86% of total loans. 

Non-interest Income and Expense

We earned non-interest income for the quarter ended June 30, 2017 of $5.2 million compared to $27.3 million (or $6.4 million excluding the gain on sale of TCA) for the quarter ended March 31, 2017.  Subsequent to the sale of TCA, we no longer earn asset management fee income, which was $1.7 million for the quarter ended March 31, 2017.

For the quarter ended June 30, 2017, non-interest expense totaled $27.3 million compared to $34.8 million (or $29.7 million excluding the transaction related costs associated with the sale of TCA) for the quarter ended March 31, 2017.

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 8:30 a.m. Central Time on Thursday, July 20, 2017. Dan Karas, Chief Lending Officer, will also be available for questions.

To participate in the live conference call, please dial 1-855-940-9472 (Canada: 1-855-669-9657) and request to be joined into the Triumph Bancorp, Inc. (TBK) call.  A simultaneous audio-only webcast may be accessed via our website at www.triumphbancorp.com through the Investor Relations, News & Events, Webcasts and Presentations links, or through a direct link here at http://services.choruscall.com/links/tbk170720.html. An archive of this conference call will subsequently be available at this same location on our website.

About Triumph

Triumph Bancorp, Inc. (NASDAQ:TBK) is a financial holding company headquartered in Dallas, Texas.  Triumph offers a diversified line of community banking and commercial finance products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com

Forward-Looking Statements

This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "could," "may," "will," "should," "seeks," "likely," "intends," "plans," "pro forma," "projects," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: our limited operating history as an integrated company; business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market area; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses (including our pending acquisition of nine branches from Independent Bank in Colorado) and any future acquisitions; changes in management personnel; interest rate risk; concentration of our factoring services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve non-performing assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of the Federal Deposit Insurance Corporation insurance and other coverages; failure to receive regulatory approval for future acquisitions; increases in our capital requirements; and risk retention requirements under the Dodd-Frank Act.

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 17, 2017 and in Triumph's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, filed with the Securities and Exchange Commission on April 26, 2017.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of this press release.

The following table sets forth key metrics used by Triumph to monitor its operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.
    As of and for the Three Months Ended      As of and for the Six Months Ended  
    June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
(Dollars in thousands)   2017     2017     2016     2016     2016     2017     2016  
Financial Highlights:                                                        
Total assets   $ 2,836,684     $ 2,635,358     $ 2,641,067     $ 2,575,490     $ 1,783,395     $ 2,836,684     $ 1,783,395  
Loans held for investment   $ 2,295,100     $ 2,035,236     $ 2,027,624     $ 1,959,855     $ 1,410,518     $ 2,295,100     $ 1,410,518  
Deposits   $ 2,072,181     $ 2,024,288     $ 2,015,785     $ 1,950,677     $ 1,275,154     $ 2,072,181     $ 1,275,154  
Net income available to common stockholders   $ 9,467     $ 10,281     $ 6,064     $ 4,506     $ 4,431     $ 19,748     $ 9,243  
                                                         
Performance Ratios - Annualized:                                                        
Return on average assets     1.42 %     1.62 %     0.96 %     0.84 %     1.07 %     1.52 %     1.13 %
Return on average total equity     12.60 %     14.44 %     8.58 %     6.63 %     6.69 %     13.49 %     7.04 %
Return on average common equity     12.75 %     14.66 %     8.60 %     6.51 %     6.64 %     13.67 %     7.00 %
Return on average tangible common equity  (1)     14.94 %     17.49 %     10.32 %     7.60 %     7.37 %     16.17 %     7.80 %
Yield on loans     7.79 %     7.15 %     7.36 %     7.42 %     8.50 %     7.49 %     8.18 %
Adjusted yield on loans (1)     7.25 %     6.93 %     6.82 %     7.10 %     7.81 %     7.10 %     7.65 %
Cost of interest bearing deposits     0.74 %     0.71 %     0.66 %     0.68 %     0.72 %     0.73 %     0.73 %
Cost of total deposits     0.60 %     0.58 %     0.54 %     0.57 %     0.63 %     0.59 %     0.64 %
Cost of total funds     0.83 %     0.79 %     0.73 %     0.61 %     0.68 %     0.81 %     0.68 %
Net interest margin     6.16 %     5.37 %     5.60 %     5.79 %     6.53 %     5.78 %     6.22 %
Adjusted net interest margin (1)     5.70 %     5.19 %     5.15 %     5.53 %     5.98 %     5.45 %     5.79 %
Net non-interest expense to average assets     3.26 %     1.17 %     3.16 %     3.43 %     3.85 %     2.24 %     3.73 %
Adjusted net non-interest expense to average assets (1)     3.26 %     3.60 %     3.16 %     3.15 %     3.85 %     3.43 %     3.73 %
Efficiency ratio     62.44 %     58.94 %     67.70 %     70.63 %     68.74 %     60.43 %     70.84 %
Adjusted efficiency ratio (1)     62.44 %     77.65 %     67.70 %     66.20 %     68.74 %     69.53 %     70.84 %
                                                         
Asset Quality: (2)                                                        
Past due to total loans     2.51 %     3.16 %     3.61 %     3.86 %     2.80 %     2.51 %     2.80 %
Non-performing loans to total loans     1.36 %     1.80 %     2.23 %     2.25 %     1.56 %     1.36 %     1.56 %
Non-performing assets to total assets     1.50 %     1.92 %     1.98 %     2.05 %     1.60 %     1.50 %     1.60 %
ALLL to non-performing loans     63.56 %     52.18 %     34.00 %     33.78 %     62.60 %     63.56 %     62.60 %
ALLL to total loans     0.86 %     0.94 %     0.76 %     0.76 %     0.98 %     0.86 %     0.98 %
Net charge-offs to average loans     0.03 %     0.20 %     0.10 %     0.10 %     0.02 %     0.23 %     0.02 %
                                                         
Capital:                                                        
Tier 1 capital to average assets (3)     11.28 %     11.32 %     10.85 %     12.04 %     16.02 %     11.28 %     16.02 %
Tier 1 capital to risk-weighted assets (3)     11.30 %     12.05 %     11.85 %     11.94 %     17.14 %     11.30 %     17.14 %
Common equity tier 1 capital to risk-weighted assets (3)     9.73 %     10.32 %     10.18 %     10.24 %     15.19 %     9.73 %     15.19 %
Total capital to risk-weighted assets (3)     13.87 %     14.87 %     14.60 %     14.77 %     18.01 %     13.87 %     18.01 %
Total equity to total assets     10.94 %     11.40 %     10.96 %     11.05 %     15.69 %     10.94 %     15.69 %
Tangible common stockholders' equity to tangible assets     9.22 %     9.51 %     8.98 %     8.99 %     13.88 %     9.22 %     13.88 %
                                                         
Per Share Amounts:                                                        
Book value per share   $ 16.59     $ 16.08     $ 15.47     $ 15.18     $ 14.91     $ 16.59     $ 14.91  
Tangible book value per share (1)   $ 14.20     $ 13.63     $ 12.89     $ 12.55     $ 13.47     $ 14.20     $ 13.47  
Basic earnings per common share   $ 0.53     $ 0.57     $ 0.34     $ 0.25     $ 0.25     $ 1.10     $ 0.52  
Diluted earnings per common share   $ 0.51     $ 0.55     $ 0.33     $ 0.25     $ 0.25     $ 1.07     $ 0.51  
Adjusted diluted earnings per common share (1)   $ 0.51     $ 0.02     $ 0.33     $ 0.32     $ 0.25     $ 0.54     $ 0.51  
Shares outstanding end of period     18,132,585       18,078,769       18,078,247       18,106,978       18,107,493       18,132,585       18,107,493  
                                                         
                                                         

Unaudited consolidated balance sheet as of:
    June 30,     March 31,     December 31,     September 30,     June 30,  
(Dollars in thousands)   2017     2017     2016     2016     2016  
ASSETS                                        
Total cash and cash equivalents   $ 117,502     $ 126,084     $ 114,514     $ 104,725     $ 61,750  
Securities - available for sale     227,206       254,452       275,029       286,574       159,790  
Securities - held to maturity     26,036       28,882       29,352       29,316       27,502  
Loans held for sale                       9,623        
Loans held for investment     2,295,100       2,035,236       2,027,624       1,959,855       1,410,518  
Allowance for loan and lease losses     (19,797 )     (19,093 )     (15,405 )     (14,912 )     (13,772 )
Loans, net     2,275,303       2,016,143       2,012,219       1,944,943       1,396,746  
FHLB stock     14,566       7,167       8,430       8,397       6,368  
Premises and equipment, net     43,957       44,630       45,460       45,050       19,629  
Other real estate owned ("OREO"), net     10,740       11,638       6,077       8,061       6,074  
Goodwill and intangible assets, net     43,321       44,233       46,531       47,449       26,160  
Bank-owned life insurance     36,852       36,679       36,509       36,347       29,786  
Deferred tax asset, net     15,111       15,678       18,825       20,042       15,042  
Other assets     26,090       49,772       48,121       34,963       34,548  
Total assets   $ 2,836,684     $ 2,635,358     $ 2,641,067     $ 2,575,490     $ 1,783,395  
LIABILITIES                                        
Non-interest bearing deposits   $ 381,042     $ 382,009     $ 363,351     $ 339,999     $ 170,834  
Interest bearing deposits     1,691,139       1,642,279       1,652,434       1,610,678       1,104,320  
Total deposits     2,072,181       2,024,288       2,015,785       1,950,677       1,275,154  
Customer repurchase agreements     14,959       10,468       10,490       15,329       13,635  
Federal Home Loan Bank advances     340,000       200,000       230,000       230,000       180,500  
Subordinated notes     48,780       48,757       48,734       48,676        
Junior subordinated debentures     32,943       32,840       32,740       32,640       24,823  
Other liabilities     17,354       18,580       13,973       13,647       9,520  
Total liabilities     2,526,217       2,334,933       2,351,722       2,290,969       1,503,632  
EQUITY                                        
Preferred stock series A     4,550       4,550       4,550       4,550       4,550  
Preferred stock series B     5,108       5,196       5,196       5,196       5,196  
Common stock     182       182       182       182       182  
Additional paid-in-capital     198,570       197,866       197,157       196,306       195,711  
Treasury stock, at cost     (1,759 )     (1,494 )     (1,374 )     (751 )     (741 )
Retained earnings     103,658       94,191       83,910       77,846       73,340  
Accumulated other comprehensive income     158       (66 )     (276 )     1,192       1,525  
Total equity     310,467       300,425       289,345       284,521       279,763  
  Total liabilities and equity   $ 2,836,684     $ 2,635,358     $ 2,641,067     $ 2,575,490     $ 1,783,395  
                                         
                                         

Unaudited consolidated statement of income:
    For the Three Months Ended      For the Six Months Ended  
    June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
(Dollars in thousands)   2017     2017     2016     2016     2016     2017     2016  
Interest income:                                                        
Loans, including fees   $   30,663     $    25,185     $ 26,486     $ 23,123     $  18,547     $   55,848     $   34,635  
Factored receivables, including fees     10,812       9,167       9,731       9,021       8,639       19,979       16,461  
Securities     1,738       1,611       1,368       1,218       958       3,349       1,723  
FHLB stock     36       42       34       16       13       78       23  
Cash deposits     289       327       155       93       197       616       405  
Total interest income     43,538       36,332       37,774       33,471       28,354       79,870       53,247  
Interest expense:                                                        
Deposits     3,057       2,869       2,735       2,408       2,020       5,926       4,013  
Subordinated notes     836       835       835                   1,671        
Junior subordinated debentures     475       465       431       382       312       940       614  
Other borrowings     613       344       229       263       115       957       224  
Total interest expense     4,981       4,513       4,230       3,053       2,447       9,494       4,851  
Net interest income     38,557       31,819       33,544       30,418       25,907       70,376       48,396  
Provision for loan losses     1,447       7,678       2,446       2,819       1,939       9,125       1,428  
Net interest income after provision for loan losses     37,110       24,141       31,098       27,599       23,968       61,251       46,968  
Non-interest income:                                                        
Service charges on deposits     977       980       1,109       984       695       1,957       1,354  
Card income     917       827       842       767       577       1,744       1,123  
Net OREO gains (losses) and valuation adjustments     (112 )     11       (275 )     63       (1,204 )     (101 )     (1,215 )
Net gains (losses) on sale of securities                 7       (68 )                 5  
Net gains on sale of loans                             4             16  
Fee income     637       583       547       655       504       1,220       1,038  
Asset management fees           1,717       1,787       1,553       1,605       1,717       3,234  
Gain on sale of subsidiary           20,860                         20,860        
Other     2,783       2,307       2,191       2,145       1,487       5,090       3,094  
Total non-interest income     5,202       27,285       6,208       6,099       3,668       32,487       8,649  
Non-interest expense:                                                        
Salaries and employee benefits     16,012       21,958       15,351       14,699       12,229       37,970       24,481  
Occupancy, furniture and equipment     2,348       2,359       2,353       1,921       1,534       4,707       3,027  
FDIC insurance and other regulatory assessments     270       226       265       143       281       496       505  
Professional fees     1,238       1,968       1,481       1,874       1,101       3,206       2,174  
Amortization of intangible assets     911       1,111       1,130       958       717       2,022       1,694  
Advertising and promotion     911       938       790       779       628       1,849       1,147  
Communications and technology     2,233       2,174       1,830       1,966       1,263       4,407       2,695  
Other     3,398       4,103       3,711       3,452       2,578       7,501       4,686  
Total non-interest expense     27,321       34,837       26,911       25,792       20,331       62,158       40,409  
Net income before income tax     14,991       16,589       10,395       7,906       7,305       31,580       15,208  
Income tax expense     5,331       6,116       4,134       3,099       2,679       11,447       5,576  
Net income   $ 9,660     $ 10,473     $ 6,261     $ 4,807     $ 4,626     $ 20,133     $ 9,632  
Dividends on preferred stock     (193 )     (192 )     (197 )     (301 )     (195 )     (385 )     (389 )
Net income available to common stockholders   $ 9,467     $ 10,281     $ 6,064     $ 4,506     $ 4,431     $ 19,748     $ 9,243  
                                                         
                                                         

Earnings per share:
    For the Three Months Ended     For the Six Months Ended  
    June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
(Dollars in thousands)   2017     2017     2016     2016     2016     2017     2016  
Basic                                                        
Net income to common stockholders   $ 9,467     $ 10,281     $ 6,064     $ 4,506     $ 4,431     $ 19,748     $ 9,243  
Weighted average common shares outstanding     18,012,905       17,955,144       17,890,781       17,859,604       17,859,604       17,984,184       17,838,267  
Basic earnings per common share   $ 0.53     $ 0.57     $ 0.34     $ 0.25     $ 0.25     $ 1.10     $ 0.52  
                                                         
Diluted                                                        
Net income to common stockholders   $ 9,467     $ 10,281     $ 6,064     $ 4,506     $ 4,431     $ 19,748     $ 9,243  
Dilutive effect of preferred stock     193       192       197                   385        
Net income to common stockholders - diluted   $ 9,660     $ 10,473     $ 6,261     $ 4,506     $ 4,431     $ 20,133     $ 9,243  
Weighted average common shares outstanding     18,012,905       17,955,144       17,890,781       17,859,604       17,859,604       17,984,184       17,838,267  
Dilutive effects of:                                                        
  Restricted stock     47,521       87,094       66,613       148,977       112,880       67,308       113,334  
  Assumed exercises of stock warrants     129,896       145,896       118,285       93,095       70,101       137,896       60,330  
  Assumed exercises of stock options     32,592       47,873       12,511                   40,233        
  Assumed conversion of Preferred A     315,773       315,773       315,773                   315,773        
  Assumed conversion of Preferred B     354,471       360,578       360,578                   354,471        
Weighted average shares outstanding - diluted     18,893,158       18,912,358       18,764,541       18,101,676       18,042,585       18,899,865       18,011,931  
Diluted earnings per common share   $ 0.51     $ 0.55     $ 0.33     $ 0.25     $ 0.25     $ 1.07     $ 0.51  
                                                         
                                                         
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 Six Months Ended  
    June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
    2017     2017     2016     2016     2016     2017     2016  
Assumed conversion of Preferred A                       315,773       315,773             315,773  
Assumed conversion of Preferred B                       360,578       360,578             360,578  
Restricted stock awards     35,270                         76,362       35,270       76,362  
Stock options     58,442                   164,175       164,175       58,442       164,175  
                                                         
                                                         

Loans held for investment summarized as of:
    June 30,     March 31,     December 31,     September 30,     June 30,  
(Dollars in thousands)   2017     2017     2016     2016     2016  
Commercial real estate   $ 541,217     $ 498,099     $ 442,237     $ 420,742     $ 298,991  
Construction, land development, land     120,253       109,849       109,812       101,169       36,498  
1-4 family residential properties     101,833       105,230       104,974       108,721       74,121  
Farmland     136,258       136,537       141,615       139,109       35,795  
Commercial     842,715       792,764       778,643       777,806       574,508  
Factored receivables     293,633       242,098       238,198       213,955       237,520  
Consumer     29,497       28,415       29,764       25,602       17,339  
Mortgage warehouse     229,694       122,244       182,381       172,751       135,746  
Total loans   $   2,295,100     $   2,035,236     $ 2,027,624     $ 1,959,855     $   1,410,518  
                                         

A portion of our total loan portfolio consists of commercial finance products offered under our commercial finance brands on a nationwide basis, as further summarized below:
    June 30,     March 31,     December 31,     September 30,     June 30,  
(Dollars in thousands)   2017     2017     2016     2016     2016  
Equipment   $   219,904     $   203,251     $ 190,393     $ 181,987     $   167,000  
Asset based lending (General)     188,257       166,917       161,454       129,501       114,632  
Asset based lending (Healthcare)     68,606       78,208       79,668       84,900       81,664  
Premium finance     31,274       23,162       23,971       27,573       6,117  
Factored receivables     293,633       242,098       238,198       213,955       237,520  
Commercial finance   $ 801,674     $ 713,636     $ 693,684     $ 637,916     $ 606,933  
                                         
Commercial finance % of total loans     35 %     35 %     34 %     33 %     43 %
Yield on commercial finance loans     11.42 %     10.25 %     10.54 %     10.57 %     11.40 %
                                         

Deposits summarized as of:
    June 30,     March 31,     December 31,     September 30,     June 30,    
(Dollars in thousands)   2017     2017     2016     2016     2016    
Non-interest bearing demand   $ 381,042     $ 382,009     $ 363,351     $ 339,999     $ 170,834    
Interest bearing demand     350,966       329,201       340,362       311,351       235,877    
Individual retirement accounts     99,694       100,436       103,022       103,007       64,204    
Money market     205,243       203,686       213,253       209,572       120,929    
Savings     173,137       173,258       171,354       171,665       77,625    
Certificates of deposit     777,459       767,602       756,351       765,093       555,710    
Brokered deposits     84,640       68,096       68,092       49,990       49,975    
Total deposits   $   2,072,181     $   2,024,288     $ 2,015,785     $ 1,950,677     $   1,275,154    
                                           
                                           

Net interest margin summarized for the three months ended:

  June 30, 2017     March 31, 2017  
  Average             Average     Average             Average  
(Dollars in thousands) Balance     Interest     Rate     Balance     Interest     Rate  
Interest earning assets:                                              
Interest earning cash balances $ 99,918     $ 289       1.16 %   $ 153,621     $ 327       0.86 %
Taxable securities   240,725       1,653       2.75 %     266,591       1,527       2.32 %
Tax-exempt securities   25,389       85       1.34 %     26,190       84       1.30 %
FHLB stock   10,395       36       1.39 %     8,536       42       2.00 %
Loans   2,135,346       41,475       7.79 %     1,947,483       34,352       7.15 %
Total interest earning assets $ 2,511,773     $ 43,538       6.95 %   $ 2,402,421     $ 36,332       6.13 %
Non-interest earning assets:                                              
Other assets   211,530                       216,861                  
  Total assets $ 2,723,303                     $ 2,619,282                  
Interest bearing liabilities:                                              
Deposits:                                              
Interest bearing demand $ 342,947     $ 136       0.16 %   $ 325,589     $ 111       0.14 %
Individual retirement accounts   100,505       303       1.21 %     101,484       291       1.16 %
Money market   206,163       120       0.23 %     209,216       118       0.23 %
Savings   171,602       27       0.06 %     171,828       34       0.08 %
Certificates of deposit   773,178       2,224       1.15 %     756,606       2,079       1.11 %
Brokered deposits   67,852       247       1.46 %     68,086       236       1.41 %
Total deposits   1,662,247       3,057       0.74 %     1,632,809       2,869       0.71 %
Subordinated notes   48,767       836       6.88 %     48,743       835       6.95 %
Junior subordinated debentures   32,878       475       5.79 %     32,780       465       5.75 %
Other borrowings   271,136       613       0.91 %     222,561       344       0.63 %
Total interest bearing liabilities $ 2,015,028     $ 4,981       0.99 %   $ 1,936,893     $ 4,513       0.94 %
Non-interest bearing liabilities and equity:                                              
Non-interest bearing demand deposits     387,877                       377,769                  
Other liabilities   12,808                       10,384                  
Total equity   307,590                       294,236                  
  Total liabilities and equity $   2,723,303                     $   2,619,282                  
Net interest income         $   38,557                     $   31,819          
Interest spread                   5.96 %                     5.19 %
Net interest margin                   6.16 %                     5.37 %
                                               
                                               

Metrics and non-GAAP financial reconciliation:

    As of and for the Three Months Ended      As of and for the Six Months Ended  
(Dollars in thousands,   June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
except per share amounts)   2017     2017     2016     2016     2016     2017     2016  
Net income available to common stockholders   $ 9,467     $ 10,281     $ 6,064     $ 4,506     $ 4,431     $ 19,748     $ 9,243  
Gain on sale of subsidiary           (20,860 )                       (20,860 )      
Incremental bonus related to transaction           4,814                         4,814        
Transaction related costs           325             1,618             325        
Tax effect of adjustments           5,754             (251 )           5,754        
Adjusted net income available to common stockholders   $ 9,467     $ 314     $ 6,064     $ 5,873     $ 4,431     $ 9,781     $ 9,243  
Dilutive effect of convertible preferred stock     193             197       197                    
Adjusted net income available to common stockholders - diluted   $ 9,660     $ 314     $ 6,261     $ 6,070     $ 4,431     $ 9,781     $ 9,243  
                                                         
Weighted average shares outstanding - diluted     18,893,158       18,912,358       18,764,541       18,101,676       18,042,585       18,899,865       18,011,931  
Adjusted effects of assumed Preferred Stock conversion           (676,351 )           676,351             (670,244 )      
Adjusted weighted average shares outstanding - diluted     18,893,158       18,236,007       18,764,541       18,778,027       18,042,585       18,229,621       18,011,931  
Adjusted diluted earnings per common share   $ 0.51     $ 0.02     $ 0.33     $ 0.32     $ 0.25     $ 0.54     $ 0.51  
                                                         
Net income available to common stockholders   $ 9,467     $ 10,281     $ 6,064     $ 4,506     $ 4,431     $ 19,748     $ 9,243  
Average tangible common equity     254,088       238,405       233,733       235,938       241,666       246,290       238,420  
Return on average tangible common equity     14.94 %     17.49 %     10.32 %     7.60 %     7.37 %     16.17 %     7.80 %
                                                         
Adjusted efficiency ratio:                                                        
Net interest income   $ 38,557     $ 31,819     $ 33,544     $ 30,418     $ 25,907     $ 70,376     $ 48,396  
Non-interest income     5,202       27,285       6,208       6,099       3,668       32,487       8,649  
Operating revenue     43,759       59,104       39,752       36,517       29,575       102,863       57,045  
Gain on sale of subsidiary           (20,860 )                       (20,860 )      
Adjusted operating revenue   $ 43,759     $ 38,244     $ 39,752     $ 36,517     $ 29,575     $ 82,003     $ 57,045  
Non-interest expenses   $ 27,321     $ 34,837     $ 26,911     $ 25,792     $ 20,331     $ 62,158     $ 40,409  
Incremental bonus related to transaction           (4,814 )                       (4,814 )      
Transaction related costs           (325 )           (1,618 )           (325 )      
Adjusted non-interest expenses   $ 27,321     $ 29,698     $ 26,911     $ 24,174     $ 20,331     $ 57,019     $ 40,409  
Adjusted efficiency ratio     62.44 %     77.65 %     67.70 %     66.20 %     68.74 %     69.53 %     70.84 %
                                                         
Adjusted net non-interest expense to average assets ratio:                                                        
Non-interest expenses   $ 27,321     $ 34,837     $ 26,911     $ 25,792     $ 20,331     $ 62,158     $ 40,409  
Incremental bonus related to transaction           (4,814 )                       (4,814 )      
Transaction related costs           (325 )           (1,618 )           (325 )      
Adjusted non-interest expenses   $ 27,321     $ 29,698     $ 26,911     $ 24,174     $ 20,331     $ 57,019     $ 40,409  
                                                         
Total non-interest income   $ 5,202     $ 27,285     $ 6,208     $ 6,099     $ 3,668     $ 32,487     $ 8,649  
Gain on sale of subsidiary           (20,860 )                       (20,860 )      
Adjusted non-interest income   $ 5,202     $ 6,425     $ 6,208     $ 6,099     $ 3,668     $ 11,627     $ 8,649  
Adjusted net non-interest expenses   $ 22,119     $ 23,273     $ 20,703     $ 18,075     $ 16,663     $ 45,392     $ 31,760  
Average total assets   $ 2,723,303     $ 2,619,282     $ 2,603,226     $ 2,282,279     $ 1,742,942     $ 2,671,580     $ 1,712,783  
Adjusted net non-interest expense to average assets ratio     3.26 %     3.60 %     3.16 %     3.15 %     3.85 %     3.43 %     3.73 %
                                                         
                                                         

    As of and for the Three Months Ended      As of and for the Six Months Ended  
(Dollars in thousands,   June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
except per share amounts)   2017     2017     2016     2016     2016     2017     2016  
Reported yield on loans     7.79 %     7.15 %     7.36 %     7.42 %     8.50 %     7.49 %     8.18 %
Effect of accretion income on acquired loans     (0.54 %)     (0.22 %)     (0.54 %)     (0.32 %)     (0.69 %)     (0.39 %)     (0.53 %)
Adjusted yield on loans     7.25 %     6.93 %     6.82 %     7.10 %     7.81 %     7.10 %     7.65 %
                                                         
Reported net interest margin     6.16 %     5.37 %     5.60 %     5.79 %     6.53 %     5.78 %     6.22 %
Effect of accretion income on acquired loans     (0.46 %)     (0.18 %)     (0.45 %)     (0.26 %)     (0.55 %)     (0.33 %)     (0.43 %)
Adjusted net interest margin     5.70 %     5.19 %     5.15 %     5.53 %     5.98 %     5.45 %     5.79 %
                                                         
Total stockholders' equity   $ 310,467     $ 300,425     $ 289,345     $ 284,521     $ 279,763     $ 310,467     $ 279,763  
Preferred stock liquidation preference     (9,658 )     (9,746 )     (9,746 )     (9,746 )     (9,746 )     (9,658 )     (9,746 )
Total common stockholders' equity     300,809       290,679       279,599       274,775       270,017       300,809       270,017  
Goodwill and other intangibles     (43,321 )     (44,233 )     (46,531 )     (47,449 )     (26,160 )     (43,321 )     (26,160 )
Tangible common stockholders' equity   $ 257,488     $ 246,446     $ 233,068     $ 227,326     $ 243,857     $ 257,488     $ 243,857  
Common shares outstanding     18,132,585       18,078,769       18,078,247       18,106,978       18,107,493       18,132,585       18,107,493  
Tangible book value per share   $ 14.20     $ 13.63     $ 12.89     $ 12.55     $ 13.47     $ 14.20     $ 13.47  
                                                         
Total assets at end of period   $ 2,836,684     $ 2,635,358     $ 2,641,067     $ 2,575,490     $ 1,783,395     $ 2,836,684     $ 1,783,395  
Goodwill and other intangibles     (43,321 )     (44,233 )     (46,531 )     (47,449 )     (26,160 )     (43,321 )     (26,160 )
Adjusted total assets at period end   $ 2,793,363     $ 2,591,125     $ 2,594,536     $ 2,528,041     $ 1,757,235     $ 2,793,363     $ 1,757,235  
Tangible common stockholders' equity ratio     9.22 %     9.51 %     8.98 %     8.99 %     13.88 %     9.22 %     13.88 %
                                                         

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 common stockholders' equity less goodwill and other intangible assets.
  • "Total tangible assets" is defined as total assets less goodwill and other intangible assets.
  • "Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
  • "Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
  • "Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
  • "Adjusted efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue and non-interest expense allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.
  • "Adjusted net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures.  This metric is used by our management to better assess our operating efficiency. 
  • "Adjusted yield on loans" is our yield on loans after excluding loan discount accretion from our acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on our yield on loans, as the effect of loan discount accretion is expected to decrease as the acquired loans pay down or mature and are removed from our balance sheet.
  • "Adjusted net interest margin" is net interest margin after excluding loan accretion from the acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discount accretion is expected to decrease as the acquired loans pay down or mature and are removed from our balance sheet. 

2) Asset quality ratios exclude loans held for sale.

3) Current quarter ratios are preliminary.

Investor Relations:Luke WyseSenior Vice President, Finance & Investor Relationslwyse@tbkbank.com214-365-6936Media Contact:Amanda TavackoliVice President, Marketing & Communicationatavackoli@tbkbank.com 214-365-6930

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