8-K
Triumph Financial, Inc. (TFIN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 20, 2022
TRIUMPH BANCORP, INC.
(Exact name of registrant as specified in its charter)
| Texas<br><br>(State or Other Jurisdiction<br><br>of Incorporation) | 001-36722<br><br>(Commission<br><br>File Number) | 20-0477066<br><br>(IRS Employer<br><br>Identification No.) |
|---|---|---|
| 12700 Park Central Drive, Suite 1700,<br><br>Dallas, Texas<br><br>(Address of Principal Executive Offices) | 75251<br><br>(Zip Code) |
(214) 365-6900
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
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):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2b) |
| ☐ | 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:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $0.01 per share | TBK | NASDAQ Global Select Market |
| Depositary Shares Each Representing a 1/40th Interest in a Share of 7.125% Series C Fixed-Rate Non-Cumulative Perpetual Preferred Stock | TBKCP | NASDAQ Global Select Market |
Item 2.02.Results of Operations and Financial Condition
On January 20, 2022, Triumph Bancorp, Inc. (the “Company”) issued a press release that announced its 2021 fourth 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 December 31, 2021, 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, including our acquisition of HubTran Inc. and developments related to our acquisition of Transport Financial Solutions and the related over-formula advances, and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.
While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to
place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 12, 2021.
Item 9.01.Financial Statements and Exhibits
(d)Exhibits.
| Exhibit | Description |
|---|---|
| 99.1 | Press release, dated January 20, 2022 |
| 99.2 | Triumph Bancorp, Inc. Investor Presentation |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
EXHIBIT INDEX
| Exhibit | Description |
|---|---|
| 99.1 | Press release, dated January 20, 2022 |
| 99.2 | Triumph Bancorp, Inc. Investor Presentation |
| 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.
| TRIUMPH BANCORP, INC. | |
|---|---|
| By: | /s/ Adam D. Nelson |
| Name: Adam D. Nelson<br>Title: Executive Vice President & General Counsel |
Date: January 20, 2022
Document
Exhibit 99.1
Triumph Bancorp Reports Fourth Quarter Net Income to Common Stockholders of $25.8 million
DALLAS – January 20, 2022 (GLOBE NEWSWIRE) – Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the fourth quarter of 2021.
As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance. These non-GAAP financial measures are reconciled in the section labeled “Metrics and non-GAAP financial reconciliation” at the end of this press release.
2021 Fourth Quarter Highlights
•For the fourth quarter of 2021, net income to common shareholders was $25.8 million, and diluted earnings per share were $1.02.
•Net interest income was $104.1 million.
•Non-interest income was $14.3 million.
•Non-interest expense was $83.0 million. Included in non-interest expense was a $7.4 million accrual for our Strategic Equity Grant ("SEG") reflected in salaries and employee benefits which represents a cumulative catch-up to cover two-thirds of the three year vesting period. Further discussion of the SEG can be found in our 2020 Proxy.
•Net interest margin was 7.66%. Yield on loans and the average cost of our total deposits were 8.68% and 0.16%, respectively.
•Credit loss expense for the quarter ended December 31, 2021 was $2.0 million.
•Net charge-offs were $0.2 million for the quarter.
•The total dollar value of invoices purchased by Triumph Business Capital was $4.033 billion with an average invoice size of $2,416. The transportation average invoice size for the quarter was $2,291.
•TriumphPay processed 4,027,680 invoices paying carriers a total of $5.242 billion.
Balance Sheet
Total loans held for investment increased $84.8 million, or 1.8%, during the fourth quarter to $4.868 billion at December 31, 2021. Average loans held for investment for the quarter increased $73.1 million, or 1.5%, to $4.844 billion.
Total deposits were $4.647 billion at December 31, 2021, a decrease of $175.9 million, or 3.6%, in the fourth quarter of 2021. Non-interest-bearing deposits accounted for 41% of total deposits and non-time deposits accounted for 86% of total deposits at December 31, 2021.
Asset Quality and Allowance for Credit Loss
Our nonperforming assets ratio at December 31, 2021 was 0.92%. Approximately 2 basis points of this ratio at December 31, 2021 consisted of $1.4 million of the acquired Over-Formula Advance portfolio which represents the portion that is not covered by CVLG's indemnification. An additional 33 basis points of this ratio at December 31, 2021 consisted of $19.4 million of the Misdirected Payments. Over-Formula Advances and Misdirected Payments are discussed in greater detail below.
Our past-due loan ratio at December 31, 2021 was 2.86%. Approximately 21 basis points of this ratio at December 31, 2021 consisted of $10.1 million of past due factored receivables related to the Over-Formula Advance portfolio. An additional 40 basis points of this ratio at December 31, 2021 consisted of the $19.4 million of Misdirected Payments, as discussed below.
Our ACL as a percentage of loans held for investment increased 1 basis point during the quarter to 0.87% at December 31, 2021.
CARES Act and Paycheck Protection Program
As of December 31, 2021, our balance sheet reflected deferrals on outstanding loan balances of $31.9 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 December 31, 2021, these deferred balances carried accrued interest of $0.1 million.
As of December 31, 2021, we carried 118 PPP loans representing a balance of $27.2 million classified as commercial loans. We recognized $2.7 million in fees from the SBA on PPP loans during the three months ended December 31, 2021 and carry $0.8 million of deferred fees on PPP loans at quarter end. The remaining fees will be amortized over the respective lives of the loans or recognized upon forgiveness of the loans.
Items related to our July 2020 acquisition of TFS
As disclosed on our SEC Forms 8-K filed on July 8, 2020 and September 23, 2020, we acquired the transportation factoring assets of TFS, a wholly owned subsidiary of Covenant Logistics Group, Inc. ("CVLG"), and subsequently amended the terms of that transaction. There were no material developments related to that transaction that impacted our operating results for the three months ended December 31, 2021.
At December 31, 2021, the carrying value of the acquired over-formula advances was $10.1 million, the total reserve on acquired over-formula advances was $10.1 million and the balance of our indemnification asset, the value of the payment that would be due to us from CVLG in the event that these over-advances are charged off, was $4.8 million.
As of December 31, 2021 we carried a separate $19.4 million receivable (the “Misdirected Payments”) payable by the United States Postal Service (“USPS”) arising from accounts factored to the largest over-formula advance carrier. This amount is separate from the acquired Over-Formula Advances. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputes their obligation to make such payment, citing purported deficiencies in the notices delivered to them. In addition to commencing litigation against such customer, we have commenced litigation in the United States Court of Federal Claims against the USPS seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. Based on our legal analysis and discussions with our counsel advising us on this matter, we continue to believe it is probable that we will prevail in such action and that the USPS will have the capacity to make payment on such receivable. Consequently, we have not reserved for such balance as of December 31, 2021. The full amount of such receivable is reflected in non-performing and past due factored receivables as of December 31, 2021 in accordance with our policy. As of December 31, 2021, the entire $19.4 million Misdirected Payments amount was greater than 90 days past due.
Conference Call Information
Aaron P. Graft, Vice Chairman and CEO and Brad Voss, CFO will review the financial results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Friday, January 21, 2022.
To participate in the live conference call, please dial 1-844-200-6205 (International: +1-929-526-1599) and access code
984179. 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/tbk220121.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, offering a diversified line of payments, factoring, and banking services. www.triumphbancorp.com
Forward-Looking Statements
This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses, including our acquisition of HubTran Inc. and developments related to our acquisition of Transport Financial Solutions and the related over-formula advances, and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.
While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2021.
Non-GAAP Financial Measures
This press release includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided at the end of this press release.
The following table sets forth key metrics used by Triumph to monitor our operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.
| As of and for the Three Months Ended | As of and for the Twelve Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | ||||||||||||||
| Financial Highlights: | |||||||||||||||||||||
| Total assets | $ | 5,956,250 | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 | $ | 5,956,250 | $ | 5,935,791 | |||||||
| Loans held for investment | $ | 4,867,572 | $ | 4,782,730 | $ | 4,831,215 | $ | 5,084,512 | $ | 4,996,776 | $ | 4,867,572 | $ | 4,996,776 | |||||||
| Deposits | $ | 4,646,679 | $ | 4,822,575 | $ | 4,725,450 | $ | 4,789,665 | $ | 4,716,600 | $ | 4,646,679 | $ | 4,716,600 | |||||||
| Net income available to common stockholders | $ | 25,839 | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 109,768 | $ | 62,323 | |||||||
| Performance Ratios - Annualized: | |||||||||||||||||||||
| Return on average assets | 1.77 | % | 1.61 | % | 1.84 | % | 2.29 | % | 2.21 | % | 1.87 | % | 1.18 | % | |||||||
| Return on average total equity | 12.41 | % | 11.85 | % | 14.27 | % | 18.42 | % | 17.73 | % | 14.10 | % | 9.67 | % | |||||||
| Return on average common equity | 12.71 | % | 12.13 | % | 14.70 | % | 19.14 | % | 18.44 | % | 14.52 | % | 9.77 | % | |||||||
| Return on average tangible common equity (1) | 19.41 | % | 19.21 | % | 20.92 | % | 26.19 | % | 25.70 | % | 21.42 | % | 13.92 | % | |||||||
| Yield on loans(2) | 8.68 | % | 7.92 | % | 7.77 | % | 7.24 | % | 7.20 | % | 7.91 | % | 7.00 | % | |||||||
| Cost of interest bearing deposits | 0.27 | % | 0.27 | % | 0.31 | % | 0.41 | % | 0.54 | % | 0.32 | % | 0.93 | % | |||||||
| Cost of total deposits | 0.16 | % | 0.16 | % | 0.20 | % | 0.28 | % | 0.38 | % | 0.20 | % | 0.67 | % | |||||||
| Cost of total funds | 0.29 | % | 0.38 | % | 0.34 | % | 0.42 | % | 0.51 | % | 0.36 | % | 0.80 | % | |||||||
| Net interest margin(2) | 7.66 | % | 6.69 | % | 6.47 | % | 6.06 | % | 6.20 | % | 6.72 | % | 5.71 | % | |||||||
| Net non-interest expense to average assets | 4.56 | % | 4.00 | % | 3.75 | % | 3.14 | % | 2.54 | % | 3.87 | % | 2.98 | % | |||||||
| Adjusted net non-interest expense to average assets (1) | 4.56 | % | 4.00 | % | 3.55 | % | 3.14 | % | 2.54 | % | 3.82 | % | 3.14 | % | |||||||
| Efficiency ratio | 70.16 | % | 70.13 | % | 67.96 | % | 62.57 | % | 55.95 | % | 67.87 | % | 64.35 | % | |||||||
| Adjusted efficiency ratio (1) | 70.16 | % | 70.13 | % | 65.09 | % | 62.57 | % | 55.95 | % | 67.16 | % | 65.97 | % | |||||||
| Asset Quality:(3) | |||||||||||||||||||||
| Past due to total loans | 2.86 | % | 2.31 | % | 2.28 | % | 1.96 | % | 3.22 | % | 2.86 | % | 3.22 | % | |||||||
| Non-performing loans to total loans | 0.95 | % | 0.90 | % | 1.06 | % | 1.17 | % | 1.16 | % | 0.95 | % | 1.16 | % | |||||||
| Non-performing assets to total assets | 0.92 | % | 0.86 | % | 0.97 | % | 1.15 | % | 1.15 | % | 0.92 | % | 1.15 | % | |||||||
| ACL to non-performing loans | 91.20 | % | 95.75 | % | 88.92 | % | 80.87 | % | 164.98 | % | 91.20 | % | 164.98 | % | |||||||
| ACL to total loans | 0.87 | % | 0.86 | % | 0.95 | % | 0.94 | % | 1.92 | % | 0.87 | % | 1.92 | % | |||||||
| Net charge-offs to average loans | — | % | 0.08 | % | 0.01 | % | 0.85 | % | 0.03 | % | 0.95 | % | 0.10 | % | |||||||
| Capital: | |||||||||||||||||||||
| Tier 1 capital to average assets(4) | 11.11 | % | 10.43 | % | 9.73 | % | 10.89 | % | 10.80 | % | 11.11 | % | 10.80 | % | |||||||
| Tier 1 capital to risk-weighted assets(4) | 11.51 | % | 11.06 | % | 10.33 | % | 11.28 | % | 10.60 | % | 11.51 | % | 10.60 | % | |||||||
| Common equity tier 1 capital to risk-weighted assets(4) | 9.94 | % | 9.45 | % | 8.74 | % | 9.72 | % | 9.05 | % | 9.94 | % | 9.05 | % | |||||||
| Total capital to risk-weighted assets | 14.10 | % | 13.69 | % | 12.65 | % | 13.58 | % | 13.03 | % | 14.10 | % | 13.03 | % | |||||||
| Total equity to total assets | 14.42 | % | 13.62 | % | 13.17 | % | 12.53 | % | 12.24 | % | 14.42 | % | 12.24 | % | |||||||
| Tangible common stockholders' equity to tangible assets(1) | 9.46 | % | 8.63 | % | 8.04 | % | 8.98 | % | 8.56 | % | 9.46 | % | 8.56 | % | |||||||
| Per Share Amounts: | |||||||||||||||||||||
| Book value per share | $ | 32.35 | $ | 30.87 | $ | 29.76 | $ | 28.90 | $ | 27.42 | $ | 32.35 | $ | 27.42 | |||||||
| Tangible book value per share (1) | $ | 21.34 | $ | 19.73 | $ | 18.35 | $ | 21.34 | $ | 19.78 | $ | 21.34 | $ | 19.78 | |||||||
| Basic earnings per common share | $ | 1.04 | $ | 0.95 | $ | 1.10 | $ | 1.34 | $ | 1.27 | $ | 4.44 | $ | 2.56 | |||||||
| Diluted earnings per common share | $ | 1.02 | $ | 0.94 | $ | 1.08 | $ | 1.32 | $ | 1.25 | $ | 4.35 | $ | 2.53 | |||||||
| Adjusted diluted earnings per common share(1) | $ | 1.02 | $ | 0.94 | $ | 1.17 | $ | 1.32 | $ | 1.25 | $ | 4.44 | $ | 2.26 | |||||||
| Shares outstanding end of period | 25,158,879 | 25,123,342 | 25,109,703 | 24,882,929 | 24,868,218 | 25,158,879 | 24,868,218 |
Unaudited consolidated balance sheet as of:
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||
| Total cash and cash equivalents | $ | 383,178 | $ | 532,764 | $ | 444,439 | $ | 380,811 | $ | 314,393 |
| Securities - available for sale | 182,426 | 164,816 | 193,627 | 205,330 | 224,310 | |||||
| Securities - held to maturity, net | 4,947 | 5,488 | 5,658 | 5,828 | 5,919 | |||||
| Equity securities | 5,504 | 5,623 | 5,854 | 5,826 | 5,826 | |||||
| Loans held for sale | 7,330 | 26,437 | 31,136 | 22,663 | 24,546 | |||||
| Loans held for investment | 4,867,572 | 4,782,730 | 4,831,215 | 5,084,512 | 4,996,776 | |||||
| Allowance for credit losses | (42,213) | (41,017) | (45,694) | (48,024) | (95,739) | |||||
| Loans, net | 4,825,359 | 4,741,713 | 4,785,521 | 5,036,488 | 4,901,037 | |||||
| FHLB and other restricted stock | 10,146 | 4,901 | 8,096 | 9,807 | 6,751 | |||||
| Premises and equipment, net | 105,729 | 104,311 | 106,720 | 105,390 | 103,404 | |||||
| Other real estate owned ("OREO"), net | 524 | 893 | 1,013 | 1,421 | 1,432 | |||||
| Goodwill and intangible assets, net | 276,856 | 280,055 | 286,567 | 188,006 | 189,922 | |||||
| Bank-owned life insurance | 40,993 | 41,540 | 41,912 | 41,805 | 41,608 | |||||
| Deferred tax asset, net | 10,023 | — | — | 1,260 | 6,427 | |||||
| Indemnification asset | 4,786 | 4,786 | 5,246 | 5,246 | 36,225 | |||||
| Other assets | 98,449 | 111,208 | 100,088 | 89,747 | 73,991 | |||||
| Total assets | $ | 5,956,250 | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 |
| LIABILITIES | ||||||||||
| Non-interest bearing deposits | $ | 1,925,370 | $ | 2,020,984 | $ | 1,803,552 | $ | 1,637,653 | $ | 1,352,785 |
| Interest bearing deposits | 2,721,309 | 2,801,591 | 2,921,898 | 3,152,012 | 3,363,815 | |||||
| Total deposits | 4,646,679 | 4,822,575 | 4,725,450 | 4,789,665 | 4,716,600 | |||||
| Customer repurchase agreements | 2,103 | 11,990 | 9,243 | 2,668 | 3,099 | |||||
| Federal Home Loan Bank advances | 180,000 | 30,000 | 130,000 | 180,000 | 105,000 | |||||
| Payment Protection Program Liquidity Facility | 27,144 | 97,554 | 139,673 | 158,796 | 191,860 | |||||
| Subordinated notes | 106,957 | 106,755 | 87,620 | 87,564 | 87,509 | |||||
| Junior subordinated debentures | 40,602 | 40,467 | 40,333 | 40,201 | 40,072 | |||||
| Deferred tax liability, net | — | 982 | 3,333 | — | — | |||||
| Other liabilities | 93,901 | 93,538 | 87,837 | 76,730 | 64,870 | |||||
| Total liabilities | 5,097,386 | 5,203,861 | 5,223,489 | 5,335,624 | 5,209,010 | |||||
| EQUITY | ||||||||||
| Preferred Stock | 45,000 | 45,000 | 45,000 | 45,000 | 45,000 | |||||
| Common stock | 283 | 282 | 282 | 280 | 280 | |||||
| Additional paid-in-capital | 510,939 | 499,282 | 494,224 | 490,699 | 489,151 | |||||
| Treasury stock, at cost | (104,743) | (104,600) | (104,486) | (103,059) | (103,052) | |||||
| Retained earnings | 399,351 | 373,512 | 349,885 | 322,705 | 289,583 | |||||
| Accumulated other comprehensive income (loss) | 8,034 | 7,198 | 7,483 | 8,379 | 5,819 | |||||
| Total stockholders' equity | 858,864 | 820,674 | 792,388 | 764,004 | 726,781 | |||||
| Total liabilities and equity | $ | 5,956,250 | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 |
Unaudited consolidated statement of income:
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | |||||||
| Interest income: | ||||||||||||||
| Loans, including fees | $ | 43,979 | $ | 44,882 | $ | 45,988 | $ | 48,706 | $ | 50,723 | $ | 183,555 | $ | 198,214 |
| Factored receivables, including fees | 62,196 | 50,516 | 47,328 | 37,795 | 37,573 | 197,835 | 114,434 | |||||||
| Securities | 1,438 | 1,126 | 1,187 | 1,650 | 1,519 | 5,401 | 8,229 | |||||||
| FHLB and other restricted stock | 25 | 28 | 27 | 76 | 56 | 156 | 530 | |||||||
| Cash deposits | 141 | 183 | 158 | 126 | 68 | 608 | 708 | |||||||
| Total interest income | 107,779 | 96,735 | 94,688 | 88,353 | 89,939 | 387,555 | 322,115 | |||||||
| Interest expense: | ||||||||||||||
| Deposits | 1,907 | 1,948 | 2,470 | 3,372 | 4,308 | 9,697 | 27,403 | |||||||
| Subordinated notes | 1,297 | 2,449 | 1,350 | 1,349 | 1,347 | 6,445 | 5,363 | |||||||
| Junior subordinated debentures | 444 | 443 | 446 | 442 | 452 | 1,775 | 2,114 | |||||||
| Other borrowings | 74 | 124 | 140 | 170 | 234 | 508 | 2,507 | |||||||
| Total interest expense | 3,722 | 4,964 | 4,406 | 5,333 | 6,341 | 18,425 | 37,387 | |||||||
| Net interest income | 104,057 | 91,771 | 90,282 | 83,020 | 83,598 | 369,130 | 284,728 | |||||||
| Credit loss expense (benefit) | 2,008 | (1,187) | (1,806) | (7,845) | 4,680 | (8,830) | 38,329 | |||||||
| Net interest income after credit loss expense (benefit) | 102,049 | 92,958 | 92,088 | 90,865 | 78,918 | 377,960 | 246,399 | |||||||
| Non-interest income: | ||||||||||||||
| Service charges on deposits | 2,050 | 2,030 | 1,857 | 1,787 | 1,643 | 7,724 | 5,274 | |||||||
| Card income | 2,470 | 2,144 | 2,225 | 1,972 | 1,949 | 8,811 | 7,781 | |||||||
| Net OREO gains (losses) and valuation adjustments | 29 | (9) | (287) | (80) | (217) | (347) | (616) | |||||||
| Net gains (losses) on sale of securities | — | 4 | 1 | — | 16 | 5 | 3,226 | |||||||
| Fee income | 5,711 | 5,198 | 4,470 | 2,249 | 1,615 | 17,628 | 6,007 | |||||||
| Insurance commissions | 1,138 | 1,231 | 1,272 | 1,486 | 1,327 | 5,127 | 4,232 | |||||||
| Gain on sale of subsidiary | — | — | — | — | — | — | 9,758 | |||||||
| Other | 2,861 | 1,457 | 4,358 | 6,877 | 16,053 | 15,553 | 24,723 | |||||||
| Total non-interest income | 14,259 | 12,055 | 13,896 | 14,291 | 22,386 | 54,501 | 60,385 | |||||||
| Non-interest expense: | ||||||||||||||
| Salaries and employee benefits | 52,544 | 43,769 | 41,658 | 35,980 | 33,798 | 173,951 | 126,975 | |||||||
| Occupancy, furniture and equipment | 6,194 | 6,388 | 6,112 | 5,779 | 7,046 | 24,473 | 22,766 | |||||||
| FDIC insurance and other regulatory assessments | 288 | 353 | 500 | 977 | 350 | 2,118 | 1,520 | |||||||
| Professional fees | 2,633 | 2,362 | 5,052 | 2,545 | 2,326 | 12,592 | 9,349 | |||||||
| Amortization of intangible assets | 3,199 | 3,274 | 2,428 | 1,975 | 2,065 | 10,876 | 8,330 | |||||||
| Advertising and promotion | 1,640 | 1,403 | 1,241 | 890 | 1,170 | 5,174 | 4,718 | |||||||
| Communications and technology | 7,844 | 7,090 | 6,028 | 5,900 | 5,639 | 26,862 | 22,153 | |||||||
| Other | 8,662 | 8,174 | 7,779 | 6,846 | 6,904 | 31,461 | 26,263 | |||||||
| Total non-interest expense | 83,004 | 72,813 | 70,798 | 60,892 | 59,298 | 287,507 | 222,074 | |||||||
| Net income before income tax | 33,304 | 32,200 | 35,186 | 44,264 | 42,006 | 144,954 | 84,710 | |||||||
| Income tax expense | 6,664 | 7,771 | 7,204 | 10,341 | 9,876 | 31,980 | 20,686 | |||||||
| Net income | $ | 26,640 | $ | 24,429 | $ | 27,982 | $ | 33,923 | $ | 32,130 | $ | 112,974 | $ | 64,024 |
| Dividends on preferred stock | (801) | (802) | (802) | (801) | (802) | (3,206) | (1,701) | |||||||
| Net income available to common stockholders | $ | 25,839 | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 109,768 | $ | 62,323 |
Earnings per share:
| For the Three Months Ended | Twelve Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | |||||||
| Basic | ||||||||||||||
| Net income to common stockholders | $ | 25,839 | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 109,768 | $ | 62,323 |
| Weighted average common shares outstanding | 24,786,720 | 24,759,419 | 24,724,128 | 24,675,109 | 24,653,099 | 24,736,713 | 24,387,932 | |||||||
| Basic earnings per common share | $ | 1.04 | $ | 0.95 | $ | 1.10 | $ | 1.34 | $ | 1.27 | $ | 4.44 | $ | 2.56 |
| Diluted | ||||||||||||||
| Net income to common stockholders - diluted | $ | 25,839 | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 109,768 | $ | 62,323 |
| Weighted average common shares outstanding | 24,786,720 | 24,759,419 | 24,724,128 | 24,675,109 | 24,653,099 | 24,736,713 | 24,387,932 | |||||||
| Dilutive effects of: | ||||||||||||||
| Assumed exercises of stock options | 124,462 | 121,110 | 134,358 | 130,016 | 101,664 | 130,198 | 64,104 | |||||||
| Restricted stock awards | 236,251 | 141,204 | 139,345 | 169,514 | 136,239 | 170,276 | 86,498 | |||||||
| Restricted stock units | 87,605 | 74,268 | 73,155 | 66,714 | 50,156 | 76,049 | 25,978 | |||||||
| Performance stock units - market based | 150,969 | 131,346 | 134,313 | 128,167 | 112,228 | 136,199 | 51,304 | |||||||
| Performance stock units - performance based | — | — | — | — | — | — | — | |||||||
| Employee stock purchase plan | 4,726 | 616 | 3,708 | 1,418 | — | 2,617 | — | |||||||
| Weighted average shares outstanding - diluted | 25,390,733 | 25,227,963 | 25,209,007 | 25,170,938 | 25,053,386 | 25,252,052 | 24,615,816 | |||||||
| Diluted earnings per common share | $ | 1.02 | $ | 0.94 | $ | 1.08 | $ | 1.32 | $ | 1.25 | $ | 4.35 | $ | 2.53 |
Shares that were not considered in computing diluted earnings per common share because they were antidilutive or have not met the thresholds to be considered in the dilutive calculation are as follows:
| For the Three Months Ended | Twelve Months Ended | ||||||
|---|---|---|---|---|---|---|---|
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | |
| Stock options | — | 16,939 | 16,939 | — | — | 16,939 | 64,947 |
| Restricted stock awards | 8,463 | — | — | — | — | 8,463 | — |
| Restricted stock units | 15,000 | — | — | — | — | 15,000 | — |
| Performance stock units - market based | — | 12,020 | 13,520 | — | — | — | — |
| Performance stock units - performance based | 259,383 | 259,383 | 265,625 | 256,625 | 256,625 | 259,383 | 256,625 |
| Employee stock purchase plan | — | — | — | — | — | — | — |
Loans held for investment summarized as of:
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Commercial real estate | $ | 632,775 | $ | 630,106 | $ | 701,576 | $ | 784,110 | $ | 779,158 |
| Construction, land development, land | 123,464 | 171,814 | 185,444 | 223,841 | 219,647 | |||||
| 1-4 family residential properties | 123,115 | 127,073 | 135,288 | 142,859 | 157,147 | |||||
| Farmland | 77,394 | 82,990 | 91,122 | 97,835 | 103,685 | |||||
| Commercial | 1,430,429 | 1,398,497 | 1,453,583 | 1,581,125 | 1,562,957 | |||||
| Factored receivables | 1,699,537 | 1,607,028 | 1,398,299 | 1,208,718 | 1,120,770 | |||||
| Consumer | 10,885 | 12,677 | 12,389 | 14,332 | 15,838 | |||||
| Mortgage warehouse | 769,973 | 752,545 | 853,514 | 1,031,692 | 1,037,574 | |||||
| Total loans | $ | 4,867,572 | $ | 4,782,730 | $ | 4,831,215 | $ | 5,084,512 | $ | 4,996,776 |
Our banking loan portfolio consists of traditional community bank loans as well as commercial finance product lines focused on businesses that require specialized financial solutions and national lending product lines that further diversify our lending operations.
Banking loans held for investment are further summarized below:
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Commercial real estate | $ | 632,775 | $ | 630,106 | $ | 701,576 | $ | 784,110 | $ | 779,158 |
| Construction, land development, land | 123,464 | 171,814 | 185,444 | 223,841 | 219,647 | |||||
| 1-4 family residential | 123,115 | 127,073 | 135,288 | 142,859 | 157,147 | |||||
| Farmland | 77,394 | 82,990 | 91,122 | 97,835 | 103,685 | |||||
| Commercial - General | 295,662 | 289,242 | 290,562 | 288,458 | 340,850 | |||||
| Commercial - Paycheck Protection Program | 27,197 | 87,413 | 135,307 | 237,299 | 189,857 | |||||
| Commercial - Agriculture | 70,127 | 77,263 | 76,346 | 83,859 | 94,572 | |||||
| Commercial - Equipment | 621,437 | 588,105 | 604,396 | 623,248 | 573,163 | |||||
| Commercial - Asset-based lending | 281,659 | 213,927 | 181,394 | 188,825 | 180,488 | |||||
| Commercial - Liquid Credit | 134,347 | 142,547 | 165,578 | 159,436 | 184,027 | |||||
| Consumer | 10,885 | 12,677 | 12,389 | 14,332 | 15,838 | |||||
| Mortgage Warehouse | 769,973 | 752,545 | 853,514 | 1,031,692 | 1,037,574 | |||||
| Total banking loans held for investment | $ | 3,168,035 | $ | 3,175,702 | $ | 3,432,916 | $ | 3,875,794 | $ | 3,876,006 |
The following table presents the Company’s operating segments:
| (Dollars in thousands) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended December 31, 2021 | Banking | Factoring | Payments | Corporate | Consolidated | |||||||||||||||||
| Total interest income | $ | 45,534 | $ | 58,042 | $ | 4,154 | $ | 49 | $ | 107,779 | ||||||||||||
| Intersegment interest allocations | 2,272 | (2,178) | (94) | — | — | |||||||||||||||||
| Total interest expense | 1,980 | — | — | 1,742 | 3,722 | |||||||||||||||||
| Net interest income (expense) | 45,826 | 55,864 | 4,060 | (1,693) | 104,057 | |||||||||||||||||
| Credit loss expense (benefit) | 171 | 1,600 | (110) | 347 | 2,008 | |||||||||||||||||
| Net interest income after credit loss expense | 45,655 | 54,264 | 4,170 | (2,040) | 102,049 | |||||||||||||||||
| Noninterest income | 8,308 | 2,295 | 3,209 | 447 | 14,259 | |||||||||||||||||
| Noninterest expense | 46,617 | 22,335 | 13,376 | 676 | 83,004 | |||||||||||||||||
| Operating income (loss) | $ | 7,346 | $ | 34,224 | $ | (5,997) | $ | (2,269) | $ | 33,304 | (Dollars in thousands) | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Three months ended September 30, 2021 | Banking | Factoring | Payments | Corporate | Consolidated | |||||||||||||||||
| Total interest income | $ | 46,175 | $ | 47,222 | $ | 3,295 | $ | 43 | $ | 96,735 | ||||||||||||
| Intersegment interest allocations | 2,452 | (2,341) | (111) | — | — | |||||||||||||||||
| Total interest expense | 2,073 | — | — | 2,891 | 4,964 | |||||||||||||||||
| Net interest income (expense) | 46,554 | 44,881 | 3,184 | (2,848) | 91,771 | |||||||||||||||||
| Credit loss expense (benefit) | (2,399) | 1,164 | 38 | 10 | (1,187) | |||||||||||||||||
| Net interest income after credit loss expense | 48,953 | 43,717 | 3,146 | (2,858) | 92,958 | |||||||||||||||||
| Noninterest income | 7,371 | 1,557 | 3,086 | 41 | 12,055 | |||||||||||||||||
| Noninterest expense | 41,183 | 19,106 | 11,416 | 1,108 | 72,813 | |||||||||||||||||
| Operating income (loss) | $ | 15,141 | $ | 26,168 | $ | (5,184) | $ | (3,925) | $ | 32,200 |
Information pertaining to our factoring segment, which includes only factoring originated by our Triumph Business Capital subsidiary, summarized as of and for the quarters ended:
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Factored receivable period end balance | $ | 1,546,361,000 | $ | 1,479,989,000 | $ | 1,284,314,000 | $ | 1,118,988,000 | $ | 1,036,548,000 | |||||
| Yield on average receivable balance | 14.42 | % | 13.75 | % | 14.99 | % | 13.85 | % | 13.80 | % | |||||
| Current quarter charge-off rate(1) | 0.01 | % | 0.24 | % | 0.04 | % | 3.95 | % | 0.02 | % | |||||
| Factored receivables - transportation concentration | 90 | % | 90 | % | 91 | % | 90 | % | 89 | % | |||||
| Interest income, including fees | $ | 58,042,000 | $ | 47,222,000 | $ | 44,653,000 | $ | 35,824,000 | $ | 35,439,000 | |||||
| Non-interest income(2) | 2,295,000 | 1,557,000 | 2,742,000 | 1,757,000 | 1,358,000 | ||||||||||
| Factored receivable total revenue | 60,337,000 | 48,779,000 | 47,395,000 | 37,581,000 | 36,797,000 | ||||||||||
| Average net funds employed | 1,442,551,000 | 1,235,610,000 | 1,072,405,000 | 936,528,000 | 924,899,000 | ||||||||||
| Yield on average net funds employed | 16.59 | % | 15.66 | % | 17.73 | % | 16.27 | % | 15.83 | % | |||||
| Accounts receivable purchased | $ | 4,032,585,000 | $ | 3,531,811,000 | $ | 3,068,262,000 | $ | 2,492,468,000 | $ | 2,461,249,000 | |||||
| Number of invoices purchased | 1,669,387 | 1,535,321 | 1,401,695 | 1,188,678 | 1,189,271 | ||||||||||
| Average invoice size | $ | 2,416 | $ | 2,300 | $ | 2,189 | $ | 2,097 | $ | 2,070 | |||||
| Average invoice size - transportation | $ | 2,291 | $ | 2,195 | $ | 2,090 | $ | 1,974 | $ | 1,943 | |||||
| Average invoice size - non-transportation | $ | 5,648 | $ | 4,944 | $ | 4,701 | $ | 4,775 | $ | 5,091 |
(1)March 31, 2021 includes a $41.3 million charge-off related to the TFS acquisition, which contributed approximately 3.94% to the net charge-off rate for the quarter.
(2)Total factoring segment non-interest income was $6.4 million and $15.5 million for the three months ended March 31, 2021 and December 31, 2020, respectively.
March 31, 2021 non-interest income used to calculate yield on average net funds employed excludes a $4.7 million gain on our indemnification asset.
December 31, 2020 non-interest income used to calculate yield on average net funds employed excludes a gain of $8.9 million related to CVLG’s delivery of proceeds resulting from the liquidation of its acquired stock and a $5.3 million gain on our indemnification asset.
Information pertaining to our payments segment, which includes only our TriumphPay division, summarized as of and for the quarters ended:
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Factored receivable period end balance | $ | 153,176,000 | $ | 127,039,000 | $ | 113,985,000 | $ | 89,730,000 | $ | 84,222,000 |
| Interest income | $ | 4,154,000 | $ | 3,295,000 | $ | 2,675,000 | $ | 1,969,000 | $ | 2,034,000 |
| Noninterest income | 3,209,000 | 3,086,000 | 1,083,000 | 73,000 | 51,000 | |||||
| Total revenue | $ | 7,363,000 | $ | 6,381,000 | $ | 3,758,000 | $ | 2,042,000 | $ | 2,085,000 |
| Pre-tax operating income (loss) | $ | (5,997,000) | $ | (5,184,000) | $ | (7,441,000) | $ | (2,552,000) | $ | (2,026,000) |
| Interest expense | 94,000 | 111,000 | 139,000 | 167,000 | 178,000 | |||||
| Depreciation and software amortization expense | 57,000 | 77,000 | 68,000 | 65,000 | 63,000 | |||||
| Intangible amortization expense | 1,489,000 | 1,490,000 | 497,000 | — | — | |||||
| Earnings (losses) before interest, taxes, depreciation, and amortization | $ | (4,357,000) | $ | (3,506,000) | $ | (6,737,000) | $ | (2,320,000) | $ | (1,785,000) |
| Transaction costs | — | — | 2,992,000 | — | — | |||||
| Adjusted earnings (losses) before interest, taxes, depreciation, and amortization(1) | $ | (4,357,000) | $ | (3,506,000) | $ | (3,745,000) | $ | (2,320,000) | $ | (1,785,000) |
| Number of invoices processed | 4,027,680 | 3,760,948 | 3,165,119 | 2,529,673 | 1,818,145 | |||||
| Amount of payments processed | $ | 5,242,051,000 | $ | 4,191,424,000 | $ | 3,426,808,000 | $ | 2,301,632,000 | $ | 1,920,037,000 |
(1)Adjusted earnings (losses) before interest, taxes, depreciation, and amortization excludes material gains and expenses related to merger and acquisition-related activities and is a non-GAAP financial measure used to provide meaningful supplemental information regarding the segment's operational performance and to enhance investors' overall understanding of such financial performance by removing the volatility associated with certain acquisition-related items that are unrelated to our core business.
Deposits summarized as of:
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Non-interest bearing demand | $ | 1,925,370 | $ | 2,020,984 | $ | 1,803,552 | $ | 1,637,653 | $ | 1,352,785 |
| Interest bearing demand | 830,019 | 795,234 | 760,874 | 729,364 | 688,680 | |||||
| Individual retirement accounts | 83,410 | 86,012 | 87,052 | 89,748 | 92,584 | |||||
| Money market | 520,358 | 472,242 | 395,035 | 402,070 | 393,325 | |||||
| Savings | 504,146 | 483,946 | 474,163 | 464,035 | 421,488 | |||||
| Certificates of deposit | 533,206 | 574,539 | 612,730 | 740,694 | 790,844 | |||||
| Brokered time deposits | 40,125 | 117,064 | 306,975 | 516,006 | 516,786 | |||||
| Other brokered deposits | 210,045 | 272,554 | 285,069 | 210,095 | 460,108 | |||||
| Total deposits | $ | 4,646,679 | $ | 4,822,575 | $ | 4,725,450 | $ | 4,789,665 | $ | 4,716,600 |
Net interest margin summarized for the three months ended:
| December 31, 2021 | September 30, 2021 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | Average<br>Balance | Interest | Average<br>Rate | Average<br>Balance | Interest | Average<br>Rate | ||||||
| Interest earning assets: | ||||||||||||
| Interest earning cash balances | $ | 361,059 | $ | 141 | 0.15 | % | $ | 474,122 | $ | 183 | 0.15 | % |
| Taxable securities | 142,658 | 1,266 | 3.52 | % | 154,017 | 948 | 2.44 | % | ||||
| Tax-exempt securities | 26,691 | 172 | 2.56 | % | 27,839 | 178 | 2.54 | % | ||||
| FHLB and other restricted stock | 5,170 | 25 | 1.92 | % | 7,956 | 28 | 1.40 | % | ||||
| Loans | 4,851,171 | 106,175 | 8.68 | % | 4,777,409 | 95,398 | 7.92 | % | ||||
| Total interest earning assets | $ | 5,386,749 | $ | 107,779 | 7.94 | % | $ | 5,441,343 | $ | 96,735 | 7.05 | % |
| Non-interest earning assets: | ||||||||||||
| Other assets | 593,013 | 579,288 | ||||||||||
| Total assets | $ | 5,979,762 | $ | 6,020,631 | ||||||||
| Interest bearing liabilities: | ||||||||||||
| Deposits: | ||||||||||||
| Interest bearing demand | $ | 825,784 | $ | 486 | 0.23 | % | $ | 779,625 | $ | 435 | 0.22 | % |
| Individual retirement accounts | 84,966 | 115 | 0.54 | % | 86,571 | 126 | 0.58 | % | ||||
| Money market | 486,939 | 261 | 0.21 | % | 417,435 | 225 | 0.21 | % | ||||
| Savings | 493,796 | 190 | 0.15 | % | 479,915 | 185 | 0.15 | % | ||||
| Certificates of deposit | 550,746 | 647 | 0.47 | % | 595,001 | 725 | 0.48 | % | ||||
| Brokered time deposits | 33,263 | 9 | 0.11 | % | 99,116 | 29 | 0.12 | % | ||||
| Other brokered deposits | 299,290 | 199 | 0.26 | % | 441,446 | 223 | 0.20 | % | ||||
| Total interest bearing deposits | 2,774,784 | 1,907 | 0.27 | % | 2,899,109 | 1,948 | 0.27 | % | ||||
| Federal Home Loan Bank advances | 38,967 | 24 | 0.24 | % | 36,522 | 22 | 0.24 | % | ||||
| Subordinated notes | 106,847 | 1,297 | 4.82 | % | 114,071 | 2,449 | 8.52 | % | ||||
| Junior subordinated debentures | 40,530 | 444 | 4.35 | % | 40,390 | 443 | 4.35 | % | ||||
| Other borrowings | 62,143 | 50 | 0.32 | % | 127,946 | 102 | 0.32 | % | ||||
| Total interest bearing liabilities | $ | 3,023,271 | $ | 3,722 | 0.49 | % | $ | 3,218,038 | $ | 4,964 | 0.61 | % |
| Non-interest bearing liabilities and equity: | ||||||||||||
| Non-interest bearing demand deposits | 2,022,973 | 1,912,398 | ||||||||||
| Other liabilities | 81,835 | 72,173 | ||||||||||
| Total equity | 851,683 | 818,022 | ||||||||||
| Total liabilities and equity | $ | 5,979,762 | $ | 6,020,631 | ||||||||
| Net interest income | $ | 104,057 | $ | 91,771 | ||||||||
| Interest spread | 7.45 | % | 6.44 | % | ||||||||
| Net interest margin | 7.66 | % | 6.69 | % |
Loan balance totals include respective nonaccrual assets.
Net interest spread is the yield on average interest earning assets less the rate on interest bearing liabilities.
Net interest margin is the ratio of net interest income to average interest earning assets.
Average rates have been annualized.
Additional information pertaining to our loan portfolio, including loans held for investment and loans held for sale, summarized for the quarters ended:
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average Banking loans | $ | 3,112,072 | $ | 3,299,152 | $ | 3,516,747 | $ | 3,722,895 | $ | 3,777,553 | |||||
| Average Factoring receivables | 1,597,091 | 1,362,856 | 1,195,209 | 1,048,968 | 1,024,307 | ||||||||||
| Average Payments receivables | 142,008 | 115,401 | 102,094 | 76,412 | 74,947 | ||||||||||
| Average total loans | $ | 4,851,171 | $ | 4,777,409 | $ | 4,814,050 | $ | 4,848,275 | $ | 4,876,807 | |||||
| Banking yield | 5.61 | % | 5.40 | % | 5.25 | % | 5.31 | % | 5.34 | % | |||||
| Factoring yield | 14.42 | % | 13.75 | % | 14.99 | % | 13.85 | % | 13.80 | % | |||||
| Payments Yield | 11.61 | % | 11.33 | % | 10.51 | % | 10.45 | % | 10.80 | % | |||||
| Total loan yield | 8.68 | % | 7.92 | % | 7.77 | % | 7.24 | % | 7.20 | % |
Metrics and non-GAAP financial reconciliation:
| As of and for the Three Months Ended | As of and for the Twelve Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands,<br>except per share amounts) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | ||||||||||||||
| Net income available to common stockholders | $ | 25,839 | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 109,768 | $ | 62,323 | |||||||
| Transaction costs | — | — | 2,992 | — | — | 2,992 | 827 | ||||||||||||||
| Gain on sale of subsidiary or division | — | — | — | — | — | — | (9,758) | ||||||||||||||
| Tax effect of adjustments | — | — | (715) | — | — | (715) | 2,254 | ||||||||||||||
| Adjusted net income available to common stockholders - diluted | $ | 25,839 | $ | 23,627 | $ | 29,457 | $ | 33,122 | $ | 31,328 | $ | 112,045 | $ | 55,646 | |||||||
| Weighted average shares outstanding - diluted | 25,390,733 | 25,227,963 | 25,209,007 | 25,170,938 | 25,053,386 | 25,252,052 | 24,615,816 | ||||||||||||||
| Adjusted diluted earnings per common share | $ | 1.02 | $ | 0.94 | $ | 1.17 | $ | 1.32 | $ | 1.25 | $ | 4.44 | $ | 2.26 | |||||||
| Average total stockholders' equity | $ | 851,683 | $ | 818,022 | $ | 786,404 | $ | 746,849 | $ | 720,892 | $ | 801,074 | $ | 661,942 | |||||||
| Average preferred stock liquidation preference | (45,000) | (45,000) | (45,000) | (45,000) | (45,000) | (45,000) | (24,099) | ||||||||||||||
| Average total common stockholders' equity | 806,683 | 773,022 | 741,404 | 701,849 | 675,892 | 756,074 | 637,843 | ||||||||||||||
| Average goodwill and other intangibles | (278,528) | (284,970) | (220,310) | (188,980) | (191,017) | (243,541) | (190,088) | ||||||||||||||
| Average tangible common stockholders' equity | $ | 528,155 | $ | 488,052 | $ | 521,094 | $ | 512,869 | $ | 484,875 | $ | 512,533 | $ | 447,755 | |||||||
| Net income available to common stockholders | $ | 25,839 | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 109,768 | $ | 62,323 | |||||||
| Average tangible common equity | 528,155 | 488,052 | 521,094 | 512,869 | 484,875 | 512,533 | 447,755 | ||||||||||||||
| Return on average tangible common equity | 19.41 | % | 19.21 | % | 20.92 | % | 26.19 | % | 25.70 | % | 21.42 | % | 13.92 | % | |||||||
| Net interest income | $ | 104,057 | $ | 91,771 | $ | 90,282 | $ | 83,020 | $ | 83,598 | $ | 369,130 | $ | 284,728 | |||||||
| Non-interest income | 14,259 | 12,055 | 13,896 | 14,291 | 22,386 | 54,501 | 60,385 | ||||||||||||||
| Operating revenue | 118,316 | 103,826 | 104,178 | 97,311 | 105,984 | 423,631 | 345,113 | ||||||||||||||
| Gain on sale of subsidiary or division | — | — | — | — | — | — | (9,758) | ||||||||||||||
| Adjusted operating revenue | $ | 118,316 | $ | 103,826 | $ | 104,178 | $ | 97,311 | $ | 105,984 | $ | 423,631 | $ | 335,355 | |||||||
| Non-interest expenses | $ | 83,004 | $ | 72,813 | $ | 70,798 | $ | 60,892 | $ | 59,298 | $ | 287,507 | $ | 222,074 | |||||||
| Transaction costs | — | — | (2,992) | — | — | (2,992) | (827) | ||||||||||||||
| Adjusted non-interest expenses | $ | 83,004 | $ | 72,813 | $ | 67,806 | $ | 60,892 | $ | 59,298 | $ | 284,515 | $ | 221,247 | |||||||
| Adjusted efficiency ratio | 70.16 | % | 70.13 | % | 65.09 | % | 62.57 | % | 55.95 | % | 67.16 | % | 65.97 | % | |||||||
| Adjusted net non-interest expense to average assets ratio: | |||||||||||||||||||||
| Non-interest expenses | $ | 83,004 | $ | 72,813 | $ | 70,798 | $ | 60,892 | $ | 59,298 | $ | 287,507 | $ | 222,074 | |||||||
| Transaction costs | — | — | (2,992) | — | — | (2,992) | (827) | ||||||||||||||
| Adjusted non-interest expenses | $ | 83,004 | $ | 72,813 | $ | 67,806 | $ | 60,892 | $ | 59,298 | $ | 284,515 | $ | 221,247 | |||||||
| Total non-interest income | $ | 14,259 | $ | 12,055 | $ | 13,896 | $ | 14,291 | $ | 22,386 | $ | 54,501 | $ | 60,385 | |||||||
| Gain on sale of subsidiary or division | — | — | — | — | — | — | (9,758) | ||||||||||||||
| Adjusted non-interest income | $ | 14,259 | $ | 12,055 | $ | 13,896 | $ | 14,291 | $ | 22,386 | $ | 54,501 | $ | 50,627 | |||||||
| Adjusted net non-interest expenses | $ | 68,745 | $ | 60,758 | $ | 53,910 | $ | 46,601 | $ | 36,912 | $ | 230,014 | $ | 170,620 | |||||||
| Average total assets | $ | 5,979,762 | $ | 6,020,631 | $ | 6,093,805 | $ | 6,013,668 | $ | 5,788,549 | $ | 6,026,819 | $ | 5,426,469 | |||||||
| Adjusted net non-interest expense to average assets ratio | 4.56 | % | 4.00 | % | 3.55 | % | 3.14 | % | 2.54 | % | 3.82 | % | 3.14 | % | |||||||
| Total stockholders' equity | $ | 858,864 | $ | 820,674 | $ | 792,388 | $ | 764,004 | $ | 726,781 | $ | 858,864 | $ | 726,781 | |||||||
| Preferred stock liquidation preference | (45,000) | (45,000) | (45,000) | (45,000) | (45,000) | (45,000) | (45,000) | ||||||||||||||
| Total common stockholders' equity | 813,864 | 775,674 | 747,388 | 719,004 | 681,781 | 813,864 | 681,781 | ||||||||||||||
| Goodwill and other intangibles | (276,856) | (280,055) | (286,567) | (188,006) | (189,922) | (276,856) | (189,922) | ||||||||||||||
| Tangible common stockholders' equity | $ | 537,008 | $ | 495,619 | $ | 460,821 | $ | 530,998 | $ | 491,859 | $ | 537,008 | $ | 491,859 | |||||||
| Common shares outstanding | 25,158,879 | 25,123,342 | 25,109,703 | 24,882,929 | 24,868,218 | 25,158,879 | 24,868,218 | ||||||||||||||
| Tangible book value per share | $ | 21.34 | $ | 19.73 | $ | 18.35 | $ | 21.34 | $ | 19.78 | $ | 21.34 | $ | 19.78 | |||||||
| Total assets at end of period | $ | 5,956,250 | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 | $ | 5,956,250 | $ | 5,935,791 | |||||||
| Goodwill and other intangibles | (276,856) | (280,055) | (286,567) | (188,006) | (189,922) | (276,856) | (189,922) | ||||||||||||||
| Tangible assets at period end | $ | 5,679,394 | $ | 5,744,480 | $ | 5,729,310 | $ | 5,911,622 | $ | 5,745,869 | $ | 5,679,394 | $ | 5,745,869 | |||||||
| Tangible common stockholders' equity ratio | 9.46 | % | 8.63 | % | 8.04 | % | 8.98 | % | 8.56 | % | 9.46 | % | 8.56 | % |
1)Triumph uses certain non-GAAP financial measures to provide meaningful supplemental information regarding Triumph's operational performance and to enhance investors' overall understanding of such financial performance. The non-GAAP measures used by Triumph include the following:
•“Adjusted diluted earnings per common share” is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding. Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, including divestitures, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business. Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.
•"Tangible common stockholders' equity" is defined as common stockholders' equity less goodwill and other intangible assets.
•"Total tangible assets" is defined as total assets less goodwill and other intangible assets.
•"Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
•"Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
•"Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
•"Adjusted efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue and non-interest expense allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.
•"Adjusted net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. This metric is used by our management to better assess our operating efficiency.
2)Performance ratios include discount accretion on purchased loans for the periods presented as follows:
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | |||||||
| Loan discount accretion | $ | 1,674 | $ | 1,953 | $ | 2,161 | $ | 3,501 | $ | 2,334 | $ | 9,289 | $ | 10,711 |
3)Asset quality ratios exclude loans held for sale, except for non-performing assets to total assets.
4)Current quarter ratios are preliminary.
Source: Triumph Bancorp, Inc.
Investor Relations:
Luke Wyse
Senior Vice President, Finance & Investor Relations
lwyse@tbkbank.com
214-365-6936
Media Contact:
Amanda Tavackoli
Senior Vice President, Director of Corporate Communication
atavackoli@tbkbank.com
214-365-6930
15
a4q21investordeck-final
January 20, 2022 Q4 2021 Earnings Release Exhibit 99.2
PAGE 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 (including our acquisition of HubTran Inc. and developments related to our acquisition of Transport Financial Solutions and the related over-formula advances) and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation (including related to our pending litigation with the United States Postal Service and a counterparty relating to certain misdirected payments) and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements. While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2021. Non-GAAP Financial Measures This 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 December 31, 2021.
PAGE 3 Q4 2021 CONSOLIDATED RESULTS • Diluted earnings per share of $1.02 for the quarter • TriumphPay: ◦ Added 3 factors4 to the TriumphPay Audit (formerly HubTran) platform in Q4 ▪ Triumph has grown factors by 14, or 25% since the announcement of the HubTran acquisition. ◦ Added 22 freight brokers ◦ Paid 4.0 million invoices for a total of $5.2 billion ◦ Run rate payment volume entering 1Q2022 of over $21.0 billion ◦ Revenue increased 15.4% over 3Q21 and 253.1% over 4Q20 • Triumph Business Capital: ◦ Purchased $4.0 billion in invoices: ▪ @ an average transportation invoice price of $2,291 ▪ as invoice volume increased 40.4% over 4Q20 & revenue increased 64.0% over the same period $25.8 million Net income to common stockholders TRIUMPHPAY PAYMENT VOLUME1 $21.0B NIM 7.66% Net Interest Margin2 ROATCE 19.41% Return on Average Tangible Common Equity3 TBC PURCHASED INVOICES 1.7 MM 1 Annualized 2 Includes discount accretion on purchased loans of $1,674 in Q4 2021 (dollars in thousands) 3 Reconciliations of non-GAAP financial measures can be found at the end of the presentation 4 Two TriumphPay factoring customers have announced their intent to merge with two other existing TriumphPay factoring customers. While this could impact future client counts, if the mergers proceed as announced, it will have no impact on TriumphPay expected volumes.
PAGE 4 TRIUMPH BUSINESS CAPITAL FACTORING Triumph Business Capital and Total Gross Revenue adjusted for revaluing the indemnification asset and the difference between the value of the stock issued to CVLG and the value returned in the TFS amended transaction agreement. By proudly serving over-the-road trucking, Triumph Business Capital has become a leading player in a large and profitable sector of the industry. Enterprise products we offer to transportation clients include: ◦ Factoring & working capital ◦ Equipment finance ◦ Fuel cards ◦ Insurance brokerage ◦ Checking ◦ Treasury management ◦ Commercial lending 37% 38% 44% 45% 49% 4Q20 1Q21 2Q21 3Q21 4Q21 21% 22% 27% 31% 32% 4Q20 1Q21 2Q21 3Q21 4Q21 Triumph Business Capital Revenue as a % of Total Gross Revenue Triumph Business Capital Accounts Receivable as a % of Total Loans
PAGE 5 TRIUMPH BUSINESS CAPITAL FACTORING • Yield of 14.42% in the current quarter • Net charge-off rate of 0.01% in the current quarter 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 89% 11% [Bar/Line Chart] Total Purchases Number of Invoices Purchased [Bar Chart] Average Invoice Size CLIENT PORTFOLIO MIX 90% 10% Transportation Non-Transportation T o ta l P u rc h a se s (i n m il li o n s) # o f In v o ice s P u rch a se d (in th o u sa n d s) Total $ Amount Purchased Number of Invoices Purchased 4Q 14 3Q 15 2Q 16 1Q 17 4Q 17 3Q 18 2Q 19 1Q 20 4Q 20 3Q 21 $0 $300 $600 $900 $1,200 $1,500 $1,800 $2,100 $2,400 $2,700 $3,000 $3,300 $3,600 $3,900 $4,200 0 300 600 900 1,200 1,500 1,800 2,100 2,400 In v o ic e S iz e Average Transportation Invoice Size 4Q 14 3Q 15 2Q 16 1Q 17 4Q 17 3Q 18 2Q 19 1Q 20 4Q 20 3Q 21 $0 $500 $1,000 $1,500 $2,000 $2,500
PAGE 6 Manual Process Email Paperwork Upload Paperwork Via Portal Carrier Doctype Associate with load and carrier Send Check Verification Phone Call Pay Status Call 30-45 Days Application Phone Call Phone Calls Doctype Associate with debtor and carrier Verification Phone Call Email Paperwork Pay Status Call Receive in Lockbox Post Payment Application Phone Call Purchase Decision Factor Broker / 3PL HOW BROKERED FREIGHT PAYMENTS OCCUR: CURRENT MANUAL PROCESS
PAGE 7 Factor Portal Submit Paperwork Factor Specific Load Data Submit Paperwork Paperwork Status • Receive and Post Payment Approve • Doctype • Carrier • Load Funds drafted once per day Load Data Carrier/Load Mapping Load/Invoice Mapping Payment/Invoice Mapping Carrier/Load Mapping Manual Process Phone Calls Carrier Factor Broker / 3PL HOW BROKERED FREIGHT PAYMENTS OCCUR: THE PAYMENTS NETWORK FOR TRUCKING
PAGE 8 TRIUMPHPAY: CONFORMING TRANSACTION Screenshot of the raw version of the first payment status update for a conforming transaction completed on the TriumphPay network. January 11, 2022.
PAGE 9 Brokers 554 Factors 69 Payment Volume** $21.0 Billion Carriers* 189K+ *Unique carriers paid since inception **Annualized payment volume of TriumphPay in 4Q21 $21.0B. TRIUMPHPAY: INTEGRATIONS ARE THE FOCUS PAYMENTS AUDITBOTH
PAGE 10 TRIUMPHPAY INTEGRATIONS ARE THE FOCUS KEY PERFORMANCE INDICATORS Top 20 Factors Represent 75% of the Factor Industry Top 25 Brokers Represent 40% of the Broker Industry Top 20 Factors TriumphPay Audit, 11 Prospects, 9 Top 25 Brokers TriumphPay Audit, 9 Both, 2 TriumphPay, 6 Prospects, 8
PAGE 11 FOR-HIRE TRUCKING ~$420 Billion* CONTRACT SHIPPING ~$250 Billion* BROKERED FREIGHT ~$170 Billion* *This data utilizes high-level estimates from multiple data sources including ATA industry reports (2019), FMCSA authority registrations, carrier reported numbers of power units, mercantile credit bureau reports, Broughton Capital reports and Triumph’s own portfolio data. TOTAL ADDRESSABLE MARKET In 4Q21, TriumphPay paid an annualized $18.1 billion on behalf of 279 freight broker clients In 4Q21, TriumphPay paid an annualized $2.9 billion on behalf of 40 contract shipping clients
PAGE 12 *This data utilizes high-level estimates from multiple data sources including ATA industry reports (2019), FMCSA authority registrations, carrier reported numbers of power units, mercantile credit bureau reports, Broughton Capital reports and Triumph’s own portfolio data. **Unique carriers paid in the last quarter. TOTAL ADDRESSABLE MARKET: PARTICIPANTS Brokered Freight (8,300 Freight Brokers*) 93.3% 6.7% Potential Brokered Freight TriumphPay & TriumphPay Audit Clients Factors (382 Factors*) 81.9% 18.1% Potential Factors TriumphPay & TriumphPay Audit Clients Carriers (250,000*) 51.8% 48.2% Potential Carriers TriumphPay Carriers Paid**
PAGE 13 TBK LOAN PORTFOLIO DETAIL Factoring $1,700 34.9% Real Estate(1) $958 19.6% C&I $393 8.1% Consumer $11 0.2%Mtg. Warehouse $770 15.8% Liquid Credit(2) $141 2.9% Equipment $621 12.7% ABL $282 5.8% Total Loans: $4.9 Billion Chart data labels – dollars in millions (1) Includes $1 million of 1-4 residential mortgage loans held for sale (2) Includes $7 million of liquid credit loans held for sale Select Commentary (as of 12/31/2021) • Total loans held for investment increased $84.8 million from the previous quarter • Total Loan Yield of 8.68% • Covid-19 deferrals remaining: $31.9 million • Triumph Business Capital operations comprise 32% of the portfolio
PAGE 14 TBK DEPOSIT SUCCESS (1) June 30, 2019 is the quarter end prior to the strategic shift we announced during the second half of 2019. *Transactional deposits defined as noninterest and interest bearing checking, money market and savings deposits. Non-interest bearing demand Interest bearing demand Individual retirement accounts Money market Savings Certificates of deposit Brokered time deposits Other brokered deposits 29% 14% 2% 8% 9% 17% 11% 10% Cost of interest bearing deposits 0.54% Cost of total funds 0.51% (in billions) $2.1 $2.9 $3.2 $3.4 $3.8 $3.8 2Q 19 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 Current as of December 31, 2021 and Changes From June 30, 2019(1): Transactional Deposits* $3.8B Deposit Composition ($ in millions) NIB Demand $1,925 41.4% IB Demand $830 17.9% MMDA $520 11.2% Savings $504 10.8% CDs $533 11.5% Brokered CDs $40 0.9% Other Brokered $210 4.5% IRAs $83 1.8% Transactional deposits up 82.2%Transactional Deposits Non-Interest Bearing Deposits Non-interest bearing demand up $1.2 billion from 19% to 41% of deposit base Cost of Deposits Cost of total deposits down by 86% from 1.14% to 0.16%
PAGE 15 TBK ASSET QUALITY NCOs / AVERAGE LOANS* 4Q20 1Q21 2Q21 3Q21 4Q21 0.00% 0.15% 0.30% 0.45% 0.60% 0.75% 0.90% NPAs / TOTAL ASSETS 4Q20 1Q21 2Q21 3Q21 4Q21 0.0% 0.3% 0.6% 0.9% 1.2% 1.5% 1.8% 2.1% 2.4% PAST DUE / TOTAL LOANS 4Q20 1Q21 2Q21 3Q21 4Q21 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% ACL / TOTAL LOANS 4Q20 1Q21 2Q21 3Q21 4Q21 0.00% 0.50% 1.00% 1.50% 2.00% *1Q21 includes $41.3 million charge-off related to the TFS acquisition, $35.6 million of which was indemnified and reimbursed to us by Covenant Logistics Group, Inc. The charge-off contributed approximately 0.85%, or substantially all of the net charge-off rate for the quarter.
PAGE 16 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 $1,674 in 4Q21, $1,953 in 3Q21, $2,161 in 2Q21, $3,501 in 1Q21, and $2,334 in 4Q20 (dollars in thousands). 3) Asset quality ratios exclude loans held for sale, except for nonperforming assets. 4) Current quarter ratios are preliminary As of and for the Three Months Ended Key Metrics December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Performance ratios - annualized Return on average assets 1.77% 1.61% 1.84% 2.29% 2.21% Return on average tangible common equity (ROATCE) (1) 19.41% 19.21% 20.92% 26.19% 25.70% Yield on loans(2) 8.68% 7.92% 7.77% 7.24% 7.20% Cost of total deposits 0.16% 0.16% 0.20% 0.28% 0.38% Net interest margin(2) 7.66% 6.69% 6.47% 6.06% 6.20% Net non-interest expense to average assets 4.56% 4.00% 3.75% 3.14% 2.54% Adjusted net non-interest expense to average assets (1) 4.56% 4.00% 3.55% 3.14% 2.54% Efficiency ratio 70.16% 70.13% 67.96% 62.57% 55.95% Adjusted efficiency ratio (1) 70.16% 70.13% 65.09% 62.57% 55.95% Asset Quality(3) Non-performing assets to total assets 0.92% 0.86% 0.97% 1.15% 1.15% ACL to total loans 0.87% 0.86% 0.95% 0.94% 1.92% Net charge-offs to average loans —% 0.08% 0.01% 0.85% 0.03% Capital(4) Tier 1 capital to average assets 11.11% 10.43% 9.73% 10.89% 10.80% Tier 1 capital to risk-weighted assets 11.51% 11.06% 10.33% 11.28% 10.60% Common equity tier 1 capital to risk-weighted assets 9.94% 9.45% 8.74% 9.72% 9.05% Total capital to risk-weighted assets 14.10% 13.69% 12.65% 13.58% 13.03% Per Share Amounts Book value per share $ 32.35 $ 30.87 $ 29.76 $ 28.90 $ 27.42 Tangible book value per share (1) $ 21.34 $ 19.73 $ 18.35 $ 21.34 $ 19.78 Basic earnings per common share $ 1.04 $ 0.95 $ 1.10 $ 1.34 $ 1.27 Diluted earnings per common share $ 1.02 $ 0.94 $ 1.08 $ 1.32 $ 1.25 Adjusted diluted earnings per common share(1) $ 1.02 $ 0.94 $ 1.17 $ 1.32 $ 1.25
PAGE 17 NON-GAAP FINANCIAL RECONCILIATION Metrics and non-GAAP financial reconciliation As of and for the Three Months Ended December 31, September 30, June 30, March 31, December 31, (Dollars in thousands, except per share amounts) 2020 2020 2020 2020 2019 Net income available to common stockholders $31,328 $22,005 $13,440 $(4,450) $16,709 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 $31,328 $22,635 $6,133 $(4,450) $16,709 Weighted average shares outstanding - diluted 25,053,386 24,802,388 24,074,442 24,314,329 25,254,862 Adjusted diluted earnings per common share $1.25 $0.91 $0.25 $(0.18) $0.66 Average total stockholders' equity $720,892 $688,327 $610,258 $627,369 $647,546 Average preferred stock liquidation preference (45,000) (45,000) (5,934) — — Average total common stockholders' equity 675,892 643,327 604,324 627,369 647,546 Average goodwill and other intangibles (191,017) (192,682) (187,255) (189,359) (191,551) Average tangible common stockholders' equity $484,875 $450,645 $417,069 $438,010 $455,995 Net income (loss) $31,328 $22,005 $13,440 $(4,450) $16,709 Average tangible common equity 484,875 450,645 417,069 438,010 455,995 Return on average tangible common equity 25.70% 19.43% 12.96% (4.09%) 14.54% Adjusted efficiency ratio: Net interest income $83,598 $74,379 $64,251 $62,500 $66,408 Non-interest income 22,386 10,493 20,029 7,477 8,666 Operating revenue 105,984 84,872 84,280 69,977 75,074 Gain on sale of subsidiary or division — — (9,758) — — Adjusted operating revenue $105,984 $84,872 $74,522 $69,977 $75,074 Non-interest expenses $59,298 $55,297 $52,726 $54,753 $52,661 Transaction costs — (827) — — — Adjusted non-interest expense $59,298 $54,470 $52,726 $54,753 $52,661 Adjusted efficiency ratio 55.95% 64.18% 70.75% 78.24% 70.15% Metrics and non-GAAP financial reconciliation As of and for the Three Months Ended (Dollars in thousands, except per share amounts) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Net income available to common stockholders $ 25,839 $ 23,627 $ 27,180 $ 33,122 $ 31,328 Transaction costs — — 2,992 — — Tax effect of adjustments — — (715) — — Adjusted net income available to common stockholders $ 25,839 $ 23,627 $ 29,457 $ 33,122 $ 31,328 Weighted average shares outstanding - diluted (in thousands) 25,391 25,228 25,209 25,171 25,053 Adjusted diluted earnings per common share $ 1.02 $ 0.94 $ 1.17 $ 1.32 $ 1.25 Average total stockholders' equity $ 851,683 $ 818,022 $ 786,404 $ 746,849 $ 720,892 Average preferred stock liquidation preference (45,000) (45,000) (45,000) (45,000) (45,000) Average total common stockholders' equity 806,683 773,022 741,404 701,849 675,892 Average goodwill and other intangibles (278,528) (284,970) (220,310) (188,980) (191,017) Average tangible common stockholders' equity $ 528,155 $ 488,052 $ 521,094 $ 512,869 $ 484,875 Net income $ 25,839 $ 23,627 $ 27,180 $ 33,122 $ 31,328 Average tangible common equity 528,155 488,052 521,094 512,869 484,875 Return on average tangible common equity 19.41 % 19.21 % 20.92 % 26.19 % 25.70 % Adjusted efficiency ratio: Net interest income $ 104,057 $ 91,771 $ 90,282 $ 83,020 $ 83,598 Non-interest income 14,259 12,055 13,896 14,291 22,386 Operating revenue 118,316 103,826 104,178 97,311 105,984 Non-interest expenses $ 83,004 $ 72,813 $ 70,798 $ 60,892 $ 59,298 Transaction costs — — (2,992) — — Adjusted non-interest expense $ 83,004 $ 72,813 $ 67,806 $ 60,892 $ 59,298 Adjusted efficiency ratio 70.16 % 70.13 % 65.09 % 62.57 % 55.95 %
PAGE 18 NON-GAAP FINANCIAL RECONCILIATION Metrics and non-GAAP financial reconciliation (cont'd) As of and for the Three Months Ended December 31, September 30, June 30, March 31, December 31, (Dollars in thousands, except per share amounts) 2020 2020 2020 2020 2019 Adjusted net non-interest expense to average assets ratio: Non-interest expenses $59,298 $55,297 $52,726 $54,753 $52,661 Transaction costs — (827) — — — Adjusted non-interest expense 59,298 54,470 52,726 54,753 52,661 Total non-interest income 22,386 10,493 20,029 7,477 8,666 Gain on sale of subsidiary or division — — (9,758) — — Adjusted non-interest income $22,386 $10,493 $10,271 $7,477 $8,666 Adjusted net non-interest expenses $36,912 $43,977 $42,455 $47,276 $43,995 Average total assets $5,788,549 $5,518,708 $5,487,072 $4,906,547 $5,050,860 Adjusted net non-interest expense to average assets ratio 2.54% 3.17% 3.11% 3.88% 3.46% Total stockholders' equity $726,781 $693,842 $656,871 $589,347 $636,590 Preferred stock liquidation preference (45,000) (45,000) (45,000) — — Total common stockholders' equity 681,781 648,842 611,871 589,347 636,590 Goodwill and other intangibles (189,922) (192,041) (186,162) (188,208) (190,286) Tangible common stockholders' equity $491,859 $456,801 $425,709 $401,139 $446,304 Common shares outstanding at end of period 24,868,218 24,851,601 24,202,686 24,101,120 24,964,961 Tangible book value per share $19.78 $18.38 $17.59 $16.64 $17.88 Total assets at end of period $5,935,791 $5,836,787 $5,617,493 $5,353,729 $5,060,297 Goodwill and other intangibles (189,922) (192,041) (186,162) (188,208) (190,286) Tangible assets at period end $5,745,869 $5,644,746 $5,431,331 $5,165,521 $4,870,011 Tangible common stockholders' equity ratio 8.56% 8.09% 7.84% 7.77% 9.16% Metrics and non-GAAP financial reconciliation (cont’d) As of and for the Three Months Ended (Dollars in thousands, except per share amounts) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Adjusted net non-interest expense to average assets ratio: Non-interest expenses $ 83,004 $ 72,813 $ 70,798 $ 60,892 $ 59,298 Transaction costs — — (2,992) — — Adjusted non-interest expense 83,004 72,813 67,806 60,892 59,298 Total non-interest income 14,259 12,055 13,896 14,291 22,386 Adjusted net non-interest expenses $ 68,745 $ 60,758 $ 53,910 $ 46,601 $ 36,912 Average total assets $ 5,979,762 $ 6,020,631 $ 6,093,805 $ 6,013,668 $ 5,788,549 Adjusted net non-interest expense to average assets ratio 4.56% 4.00% 3.55% 3.14% 2.54% Total stockholders' equity $ 858,864 $ 820,674 $ 792,388 $ 764,004 $ 726,781 Preferred stock liquidation preference (45,000) (45,000) (45,000) (45,000) (45,000) Total common stockholders' equity 813,864 775,674 747,388 719,004 681,781 Goodwill and other intangibles (276,856) (280,055) (286,567) (188,006) (189,922) Tangible common stockholders' equity $ 537,008 $ 495,619 $ 460,821 $ 530,998 $ 491,859 Common shares outstanding at end of period (in thousands) 25,159 25,123 25,110 24,883 24,868 Tangible book value per share $ 21.34 $ 19.73 $ 18.35 $ 21.34 $ 19.78