EX-99.1 2 tbk-ex991_6.htm EX-99.1 tbk-ex991_6.htm

 

Exhibit 99.1

Triumph Bancorp Reports Second Quarter Net Income to Common Stockholders of $12.2 Million

DALLAS – July 18, 2018 (GLOBE NEWSWIRE) – Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph”) today announced earnings and operating results for the second quarter of 2018.

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.

2018 Second Quarter Highlights and Recent Developments

 

•

For the second quarter of 2018, net income available to common stockholders was $12.2 million. Diluted earnings per share were $0.47.  

 

•

Adjusted diluted earnings per share were $0.50 for the quarter ended June 30, 2018, which exclude $1.1 million of transaction costs, $0.8 million net of tax, related to our acquisition of Interstate Capital Corporation (“ICC”).

 

•

On June 2, 2018 we acquired substantially all of the operating assets of, and assumed certain liabilities associated with, ICC’s accounts receivable factoring business for total consideration of $180.3 million, which was comprised of $160.3 million in cash and contingent consideration with an initial fair value of $20.0 million. As part of the ICC acquisition, we acquired $131.0 million of factored receivables and recorded $13.9 million of intangible assets and $43.0 million of goodwill.

 

•

We completed a public offering of 5.4 million shares of our common stock on April 12, 2018. Our net proceeds from the offering were approximately $192.1 million after deducting the underwriting discount and offering expenses. We used the proceeds of this offering to fund the acquisition of ICC and we intend to use the remaining net proceeds of this offering to fund a portion of the consideration payable in the pending acquisitions of First Bancorp of Durango, Inc. and Southern Colorado Corp., and for general corporate purposes.

 

•

Acquired ICC factored receivables were brought over in purchase accounting without an allowance. Given the short term nature of factored receivables, ICC contributed $1.8 million in provision for loan loss during the quarter to provide for turnover of the receivables subsequent to acquisition as well as portfolio growth. Turnover of the acquired receivables also resulted in the recognition of $1.6 million of discount accretion into interest income over the same period.

 

•

Net interest margin (“NIM”) was 6.36% for the quarter ended June 30, 2018. Adjusted NIM, which excludes loan discount accretion, was 5.92%.

 

•

Total loans held for investment increased $322.5 million, or 11.2%, to $3.196 billion at June 30, 2018. Average loans for the quarter increased $155.2 million, or 5.6%, to $2.922 billion.

 

•

Triumph Business Capital grew period-end clients to 5,584 clients which is an increase of 2,146 clients, or 62.4%. Excluding the 1,714 clients added as a result of the ICC acquisition, Triumph Business Capital added 432 clients organically; an increase of 12.6%. The total dollar value of invoices purchased for the quarter ended June 30, 2018 was $1.163 billion with an average invoice price of $1,771.  

 

•

At June 30, 2018, Triumph Business Capital had 76 clients utilizing the TriumphPay platform. For the quarter ended June 30, 2018, TriumphPay processed 45,373 invoices paying 12,561 distinct carriers a total of $62.7 million.

 

•

On April 9, 2018 we entered into agreements to acquire First Bancorp of Durango, Inc. and Southern Colorado Corp. for aggregate cash consideration of approximately $147.5 million.  At December 31, 2017, First Bancorp of Durango, Inc. and Southern Colorado Corp. had a combined $734 million in assets, including $308 million in loans, and $653 million in deposits.

1

 

Balance Sheet

Total loans held for investment were $3.196 billion at June 30, 2018. Our commercial finance loans, which comprise 38% of the loan portfolio, were $1.207 billion at June 30, 2018, compared to $0.937 billion at March 31, 2018, an increase of $270.4 million, or 28.9% in the second quarter of 2018. The increase in commercial finance loans includes the impact of the ICC acquisition which has allowed us to increase the size and scope of our factored receivables operations.

Total deposits were $2.625 billion at June 30, 2018, an increase of $91.4 million or 3.6% in the second quarter of 2018.  Non-interest-bearing deposits accounted for 21% of total deposits and non-time deposits accounted for 54% of total deposits at June 30, 2018.  

Net Interest Income

We earned net interest income for the quarter ended June 30, 2018 of $53.3 million compared to $47.1 million for the quarter ended March 31, 2018. As a result of the ICC acquisition, we accreted $1.6 million into interest income during the quarter ended June 30, 2018.

Yields on loans for the quarter ended June 30, 2018 were up 44 bps from the prior quarter to 8.09% (up 23 bps from the prior quarter to 7.59% adjusted to exclude loan discount accretion). The average cost of our total deposits was 0.73% for the quarter ended June 30, 2018 compared to 0.68% for the quarter ended March 31, 2018, on an annualized basis.  

 

Asset Quality

Non-performing assets decreased 19 bps from March 31, 2018 to 1.28% of total assets at June 30, 2018.  The ratio of past due to total loans increased to 2.54% at June 30, 2018 from 2.41% at March 31, 2018. We recorded total net charge-offs of $0.4 million, or 0.01% of average loans, for the quarter ended June 30, 2018 compared to net charge-offs of $1.3 million, or 0.05% of average loans, for the quarter ended March 31, 2018.  

We recorded a provision for loan losses of $4.9 million for the quarter ended June 30, 2018 compared to a provision of $2.5 million for the quarter ended March 31, 2018. Acquired ICC factored receivables were brought over in purchase accounting without an allowance. Given the short term nature of factored receivables, ICC contributed $1.8 million in provision for loan loss during the quarter to provide for turnover of the receivables subsequent to acquisition as well as portfolio growth. From March 31, 2018 to June 30, 2018, our ALLL increased from $20.0 million or 0.70% of total loans to $24.5 million or 0.77% of total loans.  

Non-interest Income and Expense

We earned non-interest income for the quarter ended June 30, 2018 of $4.9 million compared to $5.2 million for the quarter ended March 31, 2018. Non-interest income for the quarter ended March 31, 2018 included a gain on sale of THF of $1.1 million.

For the quarter ended June 30, 2018, non-interest expense totaled $37.4 million, compared to $34.0 million for the quarter ended March 31, 2018. Non-interest expense for the quarter ended June 30, 2018 included transaction costs related to the ICC acquisition of $1.1 million.

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 19, 2018. 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 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/tbk180719.html.  An archive of this conference call will subsequently be available at this same location on the Company’s website.

2

 

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: risks relating to our ability to consummate the pending acquisitions of First Bancorp of Durango, Inc. and Southern Colorado Corp., including the possibility that the expected benefits related to the pending acquisitions may not materialize as expected; of the pending acquisitions not being timely completed, if completed at all; that prior to the completion of the pending acquisitions, the targets’ businesses could experience disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities, difficulty retaining key employees; and of the parties’ being unable to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within our management’s expected timeframes or at all; business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses (including our pending acquisitions of First Bancorp of Durango, Inc. and Southern Colorado Corp., and our prior acquisitions of the operating assets of Interstate Capital Corporation and certain of its affiliates, Valley Bancorp, Inc., and 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 nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets, or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally, or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities, and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of the Federal Deposit Insurance Corporation insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 13, 2018.

3

 

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.


4

 

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)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

2018

 

 

2017

 

Financial Highlights:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,794,631

 

 

$

3,405,010

 

 

$

3,499,033

 

 

$

2,906,161

 

 

$

2,836,684

 

 

$

3,794,631

 

 

$

2,836,684

 

Loans held for investment

 

$

3,196,462

 

 

$

2,873,985

 

 

$

2,810,856

 

 

$

2,425,463

 

 

$

2,295,100

 

 

$

3,196,462

 

 

$

2,295,100

 

Deposits

 

$

2,624,942

 

 

$

2,533,498

 

 

$

2,621,348

 

 

$

2,012,545

 

 

$

2,072,181

 

 

$

2,624,942

 

 

$

2,072,181

 

Net income available to common stockholders

 

$

12,192

 

 

$

11,878

 

 

$

6,111

 

 

$

9,587

 

 

$

9,467

 

 

$

24,070

 

 

$

19,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios - Annualized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.37

%

 

 

1.43

%

 

 

0.79

%

 

 

1.36

%

 

 

1.42

%

 

 

1.40

%

 

 

1.52

%

Return on average total equity

 

 

8.53

%

 

 

12.20

%

 

 

6.35

%

 

 

10.71

%

 

 

12.60

%

 

 

10.01

%

 

 

13.49

%

Return on average common equity

 

 

8.54

%

 

 

12.30

%

 

 

6.30

%

 

 

10.79

%

 

 

12.75

%

 

 

10.05

%

 

 

13.67

%

Return on average tangible common equity (1)

 

 

9.95

%

 

 

14.75

%

 

 

7.33

%

 

 

12.28

%

 

 

14.94

%

 

 

11.85

%

 

 

16.17

%

Yield on loans

 

 

8.09

%

 

 

7.65

%

 

 

7.73

%

 

 

7.44

%

 

 

7.79

%

 

 

7.88

%

 

 

7.49

%

Adjusted yield on loans (1)

 

 

7.59

%

 

 

7.36

%

 

 

7.47

%

 

 

7.20

%

 

 

7.25

%

 

 

7.48

%

 

 

7.10

%

Cost of interest bearing deposits

 

 

0.93

%

 

 

0.86

%

 

 

0.84

%

 

 

0.80

%

 

 

0.74

%

 

 

0.89

%

 

 

0.73

%

Cost of total deposits

 

 

0.73

%

 

 

0.68

%

 

 

0.67

%

 

 

0.64

%

 

 

0.60

%

 

 

0.70

%

 

 

0.59

%

Cost of total funds

 

 

1.06

%

 

 

0.95

%

 

 

0.92

%

 

 

0.90

%

 

 

0.83

%

 

 

1.00

%

 

 

0.81

%

Net interest margin

 

 

6.36

%

 

 

6.06

%

 

 

6.16

%

 

 

5.90

%

 

 

6.16

%

 

 

6.21

%

 

 

5.78

%

Adjusted net interest margin (1)

 

 

5.92

%

 

 

5.81

%

 

 

5.93

%

 

 

5.69

%

 

 

5.70

%

 

 

5.87

%

 

 

5.45

%

Net non-interest expense to average assets

 

 

3.59

%

 

 

3.43

%

 

 

3.65

%

 

 

3.35

%

 

 

3.26

%

 

 

3.51

%

 

 

2.24

%

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

 

 

3.47

%

 

 

3.56

%

 

 

3.43

%

 

 

3.35

%

 

 

3.26

%

 

 

3.51

%

 

 

3.43

%

Efficiency ratio

 

 

64.26

%

 

 

65.09

%

 

 

66.74

%

 

 

64.61

%

 

 

62.44

%

 

 

64.65

%

 

 

60.43

%

Adjusted efficiency ratio (1)

 

 

62.38

%

 

 

66.45

%

 

 

63.35

%

 

 

64.61

%

 

 

62.44

%

 

 

64.29

%

 

 

69.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality:(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due to total loans

 

 

2.54

%

 

 

2.41

%

 

 

2.33

%

 

 

2.22

%

 

 

2.51

%

 

 

2.54

%

 

 

2.51

%

Non-performing loans to total loans

 

 

1.43

%

 

 

1.41

%

 

 

1.38

%

 

 

1.25

%

 

 

1.36

%

 

 

1.43

%

 

 

1.36

%

Non-performing assets to total assets

 

 

1.28

%

 

 

1.47

%

 

 

1.39

%

 

 

1.42

%

 

 

1.50

%

 

 

1.28

%

 

 

1.50

%

ALLL to non-performing loans

 

 

53.57

%

 

 

49.52

%

 

 

48.41

%

 

 

67.33

%

 

 

63.56

%

 

 

53.57

%

 

 

63.56

%

ALLL to total loans

 

 

0.77

%

 

 

0.70

%

 

 

0.67

%

 

 

0.84

%

 

 

0.86

%

 

 

0.77

%

 

 

0.86

%

Net charge-offs to average loans

 

 

0.01

%

 

 

0.05

%

 

 

0.06

%

 

 

0.00

%

 

 

0.03

%

 

 

0.06

%

 

 

0.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital to average assets(3)

 

 

15.00

%

 

 

11.23

%

 

 

11.80

%

 

 

13.50

%

 

 

11.28

%

 

 

15.00

%

 

 

11.28

%

Tier 1 capital to risk-weighted assets(3)

 

 

14.69

%

 

 

11.54

%

 

 

11.15

%

 

 

13.45

%

 

 

11.30

%

 

 

14.69

%

 

 

11.30

%

Common equity tier 1 capital to risk-weighted assets(3)

 

 

13.33

%

 

 

10.05

%

 

 

9.70

%

 

 

11.95

%

 

 

9.73

%

 

 

13.33

%

 

 

9.73

%

Total capital to risk-weighted assets(3)

 

 

16.75

%

 

 

13.66

%

 

 

13.21

%

 

 

15.91

%

 

 

13.87

%

 

 

16.75

%

 

 

13.87

%

Total equity to total assets

 

 

16.00

%

 

 

11.83

%

 

 

11.19

%

 

 

13.29

%

 

 

10.94

%

 

 

16.00

%

 

 

10.94

%

Tangible common stockholders' equity to tangible assets(1)

 

 

13.05

%

 

 

9.86

%

 

 

9.26

%

 

 

11.66

%

 

 

9.22

%

 

 

13.05

%

 

 

9.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Amounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

22.76

 

 

$

18.89

 

 

$

18.35

 

 

$

18.08

 

 

$

16.59

 

 

$

22.76

 

 

$

16.59

 

Tangible book value per share (1)

 

$

18.27

 

 

$

15.82

 

 

$

15.29

 

 

$

16.04

 

 

$

14.20

 

 

$

18.27

 

 

$

14.20

 

Basic earnings per common share

 

$

0.48

 

 

$

0.57

 

 

$

0.29

 

 

$

0.48

 

 

$

0.53

 

 

$

1.04

 

 

$

1.10

 

Diluted earnings per common share

 

$

0.47

 

 

$

0.56

 

 

$

0.29

 

 

$

0.47

 

 

$

0.51

 

 

$

1.02

 

 

$

1.07

 

Adjusted diluted earnings per common share(1)

 

$

0.50

 

 

$

0.52

 

 

$

0.34

 

 

$

0.47

 

 

$

0.51

 

 

$

1.02

 

 

$

0.54

 

Shares outstanding end of period

 

 

26,260,785

 

 

 

20,824,509

 

 

 

20,820,445

 

 

 

20,820,900

 

 

 

18,132,585

 

 

 

26,260,785

 

 

 

18,132,585

 



5

 

Unaudited consolidated balance sheet as of:

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

(Dollars in thousands)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash and cash equivalents

 

$

133,365

 

 

$

106,046

 

 

$

134,129

 

 

$

80,557

 

 

$

117,502

 

Securities - available for sale

 

 

183,184

 

 

 

192,916

 

 

 

250,603

 

 

 

207,301

 

 

 

225,183

 

Securities - held to maturity

 

 

8,673

 

 

 

8,614

 

 

 

8,557

 

 

 

17,999

 

 

 

26,036

 

Equity securities

 

 

5,025

 

 

 

4,925

 

 

 

5,006

 

 

 

2,025

 

 

 

2,023

 

Loans held for investment

 

 

3,196,462

 

 

 

2,873,985

 

 

 

2,810,856

 

 

 

2,425,463

 

 

 

2,295,100

 

Allowance for loan and lease losses

 

 

(24,547

)

 

 

(20,022

)

 

 

(18,748

)

 

 

(20,367

)

 

 

(19,797

)

Loans, net

 

 

3,171,915

 

 

 

2,853,963

 

 

 

2,792,108

 

 

 

2,405,096

 

 

 

2,275,303

 

Assets held for sale

 

 

—

 

 

 

—

 

 

 

71,362

 

 

 

—

 

 

 

—

 

FHLB stock

 

 

19,223

 

 

 

16,508

 

 

 

16,006

 

 

 

16,076

 

 

 

14,566

 

Premises and equipment, net

 

 

68,313

 

 

 

62,826

 

 

 

62,861

 

 

 

43,678

 

 

 

43,957

 

Other real estate owned ("OREO"), net

 

 

2,528

 

 

 

9,186

 

 

 

9,191

 

 

 

10,753

 

 

 

10,740

 

Goodwill and intangible assets, net

 

 

117,777

 

 

 

63,923

 

 

 

63,778

 

 

 

42,452

 

 

 

43,321

 

Bank-owned life insurance

 

 

40,168

 

 

 

44,534

 

 

 

44,364

 

 

 

37,025

 

 

 

36,852

 

Deferred tax asset, net

 

 

8,810

 

 

 

8,849

 

 

 

8,959

 

 

 

14,130

 

 

 

15,111

 

Other assets

 

 

35,650

 

 

 

32,720

 

 

 

32,109

 

 

 

29,069

 

 

 

26,090

 

Total assets

 

$

3,794,631

 

 

$

3,405,010

 

 

$

3,499,033

 

 

$

2,906,161

 

 

$

2,836,684

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

561,033

 

 

$

548,991

 

 

$

564,225

 

 

$

403,643

 

 

$

381,042

 

Interest bearing deposits

 

 

2,063,909

 

 

 

1,984,507

 

 

 

2,057,123

 

 

 

1,608,902

 

 

 

1,691,139

 

Total deposits

 

 

2,624,942

 

 

 

2,533,498

 

 

 

2,621,348

 

 

 

2,012,545

 

 

 

2,072,181

 

Customer repurchase agreements

 

 

10,509

 

 

 

6,751

 

 

 

11,488

 

 

 

19,869

 

 

 

14,959

 

Federal Home Loan Bank advances

 

 

420,000

 

 

 

355,000

 

 

 

365,000

 

 

 

385,000

 

 

 

340,000

 

Subordinated notes

 

 

48,878

 

 

 

48,853

 

 

 

48,828

 

 

 

48,804

 

 

 

48,780

 

Junior subordinated debentures

 

 

38,849

 

 

 

38,734

 

 

 

38,623

 

 

 

33,047

 

 

 

32,943

 

Other liabilities

 

 

44,228

 

 

 

19,230

 

 

 

22,048

 

 

 

20,799

 

 

 

17,354

 

Total liabilities

 

 

3,187,406

 

 

 

3,002,066

 

 

 

3,107,335

 

 

 

2,520,064

 

 

 

2,526,217

 

EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock series A

 

 

4,550

 

 

 

4,550

 

 

 

4,550

 

 

 

4,550

 

 

 

4,550

 

Preferred stock series B

 

 

5,108

 

 

 

5,108

 

 

 

5,108

 

 

 

5,108

 

 

 

5,108

 

Common stock

 

 

264

 

 

 

209

 

 

 

209

 

 

 

209

 

 

 

182

 

Additional paid-in-capital

 

 

457,980

 

 

 

265,406

 

 

 

264,855

 

 

 

264,531

 

 

 

198,570

 

Treasury stock, at cost

 

 

(2,254

)

 

 

(1,853

)

 

 

(1,784

)

 

 

(1,760

)

 

 

(1,759

)

Retained earnings

 

 

143,426

 

 

 

131,234

 

 

 

119,356

 

 

 

113,245

 

 

 

103,658

 

Accumulated other comprehensive income

 

 

(1,849

)

 

 

(1,710

)

 

 

(596

)

 

 

214

 

 

 

158

 

Total equity

 

 

607,225

 

 

 

402,944

 

 

 

391,698

 

 

 

386,097

 

 

 

310,467

 

Total liabilities and equity

 

$

3,794,631

 

 

$

3,405,010

 

 

$

3,499,033

 

 

$

2,906,161

 

 

$

2,836,684

 


6

 

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)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

2018

 

 

2017

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

39,710

 

 

$

36,883

 

 

$

34,856

 

 

$

30,863

 

 

$

30,663

 

 

$

76,593

 

 

$

55,848

 

Factored receivables, including fees

 

 

19,229

 

 

 

15,303

 

 

 

15,000

 

 

 

12,198

 

 

 

10,812

 

 

 

34,532

 

 

 

19,979

 

Securities

 

 

1,179

 

 

 

1,310

 

 

 

1,819

 

 

 

1,655

 

 

 

1,738

 

 

 

2,489

 

 

 

3,349

 

FHLB stock

 

 

101

 

 

 

105

 

 

 

78

 

 

 

51

 

 

 

36

 

 

 

206

 

 

 

78

 

Cash deposits

 

 

1,030

 

 

 

517

 

 

 

464

 

 

 

370

 

 

 

289

 

 

 

1,547

 

 

 

616

 

Total interest income

 

 

61,249

 

 

 

54,118

 

 

 

52,217

 

 

 

45,137

 

 

 

43,538

 

 

 

115,367

 

 

 

79,870

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

4,631

 

 

 

4,277

 

 

 

3,884

 

 

 

3,272

 

 

 

3,057

 

 

 

8,908

 

 

 

5,926

 

Subordinated notes

 

 

838

 

 

 

837

 

 

 

836

 

 

 

837

 

 

 

836

 

 

 

1,675

 

 

 

1,671

 

Junior subordinated debentures

 

 

713

 

 

 

597

 

 

 

520

 

 

 

495

 

 

 

475

 

 

 

1,310

 

 

 

940

 

Other borrowings

 

 

1,810

 

 

 

1,277

 

 

 

1,181

 

 

 

1,021

 

 

 

613

 

 

 

3,087

 

 

 

957

 

Total interest expense

 

 

7,992

 

 

 

6,988

 

 

 

6,421

 

 

 

5,625

 

 

 

4,981

 

 

 

14,980

 

 

 

9,494

 

Net interest income

 

 

53,257

 

 

 

47,130

 

 

 

45,796

 

 

 

39,512

 

 

 

38,557

 

 

 

100,387

 

 

 

70,376

 

Provision for loan losses

 

 

4,906

 

 

 

2,548

 

 

 

1,931

 

 

 

572

 

 

 

1,447

 

 

 

7,454

 

 

 

9,125

 

Net interest income after provision for loan losses

 

 

48,351

 

 

 

44,582

 

 

 

43,865

 

 

 

38,940

 

 

 

37,110

 

 

 

92,933

 

 

 

61,251

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

1,210

 

 

 

1,145

 

 

 

1,178

 

 

 

1,046

 

 

 

977

 

 

 

2,355

 

 

 

1,957

 

Card income

 

 

1,394

 

 

 

1,244

 

 

 

1,122

 

 

 

956

 

 

 

917

 

 

 

2,638

 

 

 

1,744

 

Net OREO gains (losses) and valuation adjustments

 

 

(528

)

 

 

(88

)

 

 

(764

)

 

 

15

 

 

 

(112

)

 

 

(616

)

 

 

(101

)

Net gains (losses) on sale of securities

 

 

—

 

 

 

(272

)

 

 

—

 

 

 

35

 

 

 

—

 

 

 

(272

)

 

 

—

 

Fee income

 

 

1,121

 

 

 

800

 

 

 

658

 

 

 

625

 

 

 

637

 

 

 

1,921

 

 

 

1,220

 

Insurance commissions

 

 

819

 

 

 

714

 

 

 

857

 

 

 

826

 

 

 

708

 

 

 

1,533

 

 

 

1,299

 

Asset management fees

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,717

 

Gain on sale of subsidiary

 

 

—

 

 

 

1,071

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,071

 

 

 

20,860

 

Other

 

 

929

 

 

 

558

 

 

 

947

 

 

 

668

 

 

 

2,075

 

 

 

1,487

 

 

 

3,791

 

Total non-interest income

 

 

4,945

 

 

 

5,172

 

 

 

3,998

 

 

 

4,171

 

 

 

5,202

 

 

 

10,117

 

 

 

32,487

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

20,527

 

 

 

19,404

 

 

 

18,009

 

 

 

16,717

 

 

 

16,012

 

 

 

39,931

 

 

 

37,970

 

Occupancy, furniture and equipment

 

 

3,014

 

 

 

3,054

 

 

 

2,728

 

 

 

2,398

 

 

 

2,348

 

 

 

6,068

 

 

 

4,707

 

FDIC insurance and other regulatory assessments

 

 

383

 

 

 

199

 

 

 

411

 

 

 

294

 

 

 

270

 

 

 

582

 

 

 

496

 

Professional fees

 

 

2,078

 

 

 

1,640

 

 

 

2,521

 

 

 

1,465

 

 

 

1,238

 

 

 

3,718

 

 

 

3,206

 

Amortization of intangible assets

 

 

1,361

 

 

 

1,117

 

 

 

2,309

 

 

 

870

 

 

 

911

 

 

 

2,478

 

 

 

2,022

 

Advertising and promotion

 

 

1,300

 

 

 

1,029

 

 

 

573

 

 

 

804

 

 

 

911

 

 

 

2,329

 

 

 

1,849

 

Communications and technology

 

 

3,271

 

 

 

3,359

 

 

 

2,291

 

 

 

2,145

 

 

 

2,233

 

 

 

6,630

 

 

 

4,407

 

Other

 

 

5,469

 

 

 

4,240

 

 

 

4,389

 

 

 

3,532

 

 

 

3,398

 

 

 

9,709

 

 

 

7,501

 

Total non-interest expense

 

 

37,403

 

 

 

34,042

 

 

 

33,231

 

 

 

28,225

 

 

 

27,321

 

 

 

71,445

 

 

 

62,158

 

Net income before income tax

 

 

15,893

 

 

 

15,712

 

 

 

14,632

 

 

 

14,886

 

 

 

14,991

 

 

 

31,605

 

 

 

31,580

 

Income tax expense

 

 

3,508

 

 

 

3,644

 

 

 

8,327

 

 

 

5,104

 

 

 

5,331

 

 

 

7,152

 

 

 

11,447

 

Net income

 

$

12,385

 

 

$

12,068

 

 

$

6,305

 

 

$

9,782

 

 

$

9,660

 

 

$

24,453

 

 

$

20,133

 

Dividends on preferred stock

 

 

(193

)

 

 

(190

)

 

 

(194

)

 

 

(195

)

 

 

(193

)

 

 

(383

)

 

 

(385

)

Net income available to common stockholders

 

$

12,192

 

 

$

11,878

 

 

$

6,111

 

 

$

9,587

 

 

$

9,467

 

 

$

24,070

 

 

$

19,748

 

 


7

 

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)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

2018

 

 

2017

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income to common stockholders

 

$

12,192

 

 

$

11,878

 

 

$

6,111

 

 

$

9,587

 

 

$

9,467

 

 

$

24,070

 

 

$

19,748

 

Weighted average common shares outstanding

 

 

25,519,108

 

 

 

20,721,363

 

 

 

20,717,548

 

 

 

19,811,577

 

 

 

18,012,905

 

 

 

23,133,489

 

 

 

17,984,184

 

Basic earnings per common share

 

$

0.48

 

 

$

0.57

 

 

$

0.29

 

 

$

0.48

 

 

$

0.53

 

 

$

1.04

 

 

$

1.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income to common stockholders

 

$

12,192

 

 

$

11,878

 

 

$

6,111

 

 

$

9,587

 

 

$

9,467

 

 

$

24,070

 

 

$

19,748

 

Dilutive effect of preferred stock

 

 

193

 

 

 

190

 

 

 

194

 

 

 

195

 

 

 

193

 

 

 

383

 

 

 

385

 

Net income to common stockholders - diluted

 

$

12,385

 

 

$

12,068

 

 

$

6,305

 

 

$

9,782

 

 

$

9,660

 

 

$

24,453

 

 

$

20,133

 

Weighted average common shares outstanding

 

 

25,519,108

 

 

 

20,721,363

 

 

 

20,717,548

 

 

 

19,811,577

 

 

 

18,012,905

 

 

 

23,133,489

 

 

 

17,984,184

 

Dilutive effects of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assumed conversion of Preferred A

 

 

315,773

 

 

 

315,773

 

 

 

315,773

 

 

 

315,773

 

 

 

315,773

 

 

 

315,773

 

 

 

315,773

 

Assumed conversion of Preferred B

 

 

354,471

 

 

 

354,471

 

 

 

354,471

 

 

 

354,471

 

 

 

354,471

 

 

 

354,471

 

 

 

354,471

 

Assumed exercises of stock warrants

 

 

—

 

 

 

—

 

 

 

—

 

 

 

54,476

 

 

 

129,896

 

 

 

—

 

 

 

137,896

 

Assumed exercises of stock options

 

 

86,821

 

 

 

83,872

 

 

 

56,359

 

 

 

45,788

 

 

 

32,592

 

 

 

85,123

 

 

 

40,233

 

Restricted stock awards

 

 

37,417

 

 

 

85,045

 

 

 

74,318

 

 

 

63,384

 

 

 

47,521

 

 

 

60,425

 

 

 

67,308

 

Restricted stock units

 

 

2,288

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Performance stock units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Weighted average shares outstanding - diluted

 

 

26,315,878

 

 

 

21,560,524

 

 

 

21,518,469

 

 

 

20,645,469

 

 

 

18,893,158

 

 

 

23,949,281

 

 

 

18,899,865

 

Diluted earnings per common share

 

$

0.47

 

 

$

0.56

 

 

$

0.29

 

 

$

0.47

 

 

$

0.51

 

 

$

1.02

 

 

$

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

2018

 

 

2017

 

Assumed conversion of Preferred A

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Assumed conversion of Preferred B

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Stock options

 

 

51,952

 

 

 

—

 

 

 

57,926

 

 

 

58,442

 

 

 

58,442

 

 

 

51,952

 

 

 

58,442

 

Restricted stock awards

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

35,270

 

 

 

—

 

 

 

35,270

 

Restricted stock units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Performance stock units

 

 

59,658

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

59,658

 

 

 

—

 

 

 


8

 

Loans held for investment summarized as of:

  

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

(Dollars in thousands)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

Commercial real estate

 

$

766,839

 

 

$

781,006

 

 

$

745,893

 

 

$

574,530

 

 

$

541,217

 

Construction, land development, land

 

 

147,852

 

 

 

143,876

 

 

 

134,812

 

 

 

141,368

 

 

 

120,253

 

1-4 family residential properties

 

 

122,653

 

 

 

122,979

 

 

 

125,827

 

 

 

96,032

 

 

 

101,833

 

Farmland

 

 

177,060

 

 

 

184,064

 

 

 

180,141

 

 

 

130,471

 

 

 

136,258

 

Commercial

 

 

1,006,443

 

 

 

930,283

 

 

 

920,812

 

 

 

890,372

 

 

 

842,715

 

Factored receivables

 

 

603,812

 

 

 

397,145

 

 

 

374,410

 

 

 

341,880

 

 

 

293,633

 

Consumer

 

 

28,775

 

 

 

29,244

 

 

 

31,131

 

 

 

30,093

 

 

 

29,497

 

Mortgage warehouse

 

 

343,028

 

 

 

285,388

 

 

 

297,830

 

 

 

220,717

 

 

 

229,694

 

     Total loans

 

$

3,196,462

 

 

$

2,873,985

 

 

$

2,810,856

 

 

$

2,425,463

 

 

$

2,295,100

 

A portion of our total loans held for investment portfolio consists of traditional community bank loans as well as commercial finance products offered under our commercial finance brands on a nationwide basis. Commercial finance loans are further summarized below:

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

(Dollars in thousands)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

Equipment

 

$

290,314

 

 

$

260,502

 

 

$

254,119

 

 

$

226,120

 

 

$

219,904

 

Asset based lending (General)

 

 

261,412

 

 

 

230,314

 

 

 

213,471

 

 

 

193,884

 

 

 

188,257

 

Asset based lending (Healthcare)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

67,889

 

 

 

68,606

 

Premium finance

 

 

51,416

 

 

 

48,561

 

 

 

55,520

 

 

 

57,083

 

 

 

31,274

 

Factored receivables

 

 

603,812

 

 

 

397,145

 

 

 

374,410

 

 

 

341,880

 

 

 

293,633

 

     Commercial finance

 

$

1,206,954

 

 

$

936,522

 

 

$

897,520

 

 

$

886,856

 

 

$

801,674

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial finance % of total loans

 

 

38

%

 

 

33

%

 

 

32

%

 

 

37

%

 

 

35

%

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

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

(Dollars in thousands)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

Average community banking

 

$

1,897,678

 

 

$

1,816,921

 

 

$

1,637,195

 

 

$

1,463,508

 

 

$

1,382,448

 

Average commercial finance(1)

 

 

1,024,369

 

 

 

949,938

 

 

 

921,579

 

 

 

831,955

 

 

 

752,586

 

Average total loans

 

$

2,922,047

 

 

$

2,766,859

 

 

$

2,558,774

 

 

$

2,295,463

 

 

$

2,135,034

 

Community banking yield

 

 

5.87

%

 

 

5.81

%

 

 

5.87

%

 

 

5.60

%

 

 

5.81

%

Commercial finance yield(1)

 

 

12.21

%

 

 

11.17

%

 

 

11.03

%

 

 

10.62

%

 

 

11.42

%

Total loan yield

 

 

8.09

%

 

 

7.65

%

 

 

7.73

%

 

 

7.44

%

 

 

7.79

%

(1) Includes assets held for sale for the periods ended March 31, 2018 and December 31, 2017

9

 

Information pertaining to our factoring segment, which includes only factoring originated by our Triumph Business Capital subsidiary, summarized as of and for the quarters ended:

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

Factored receivable period end balance

 

$

577,548,000

 

 

$

372,771,000

 

 

$

346,293,000

 

 

$

315,742,000

 

 

$

268,707,000

 

Yield on average receivable balance

 

 

18.70

%

 

 

17.40

%

 

 

16.91

%

 

 

16.64

%

 

 

17.35

%

Rolling twelve quarter annual charge-off rate

 

 

0.41

%

 

 

0.50

%

 

 

0.41

%

 

 

0.44

%

 

 

0.41

%

Factored receivables - transportation concentration

 

 

84

%

 

 

86

%

 

 

84

%

 

 

84

%

 

 

84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, including fees

 

$

20,314,000

 

 

$

14,780,000

 

 

$

14,518,000

 

 

$

11,736,000

 

 

$

10,387,000

 

Non-interest income

 

 

920,000

 

 

 

590,000

 

 

 

535,000

 

 

 

774,000

 

 

 

758,000

 

Factored receivable total revenue

 

 

21,234,000

 

 

 

15,370,000

 

 

 

15,053,000

 

 

 

12,510,000

 

 

 

11,145,000

 

Average net funds employed

 

 

398,096,000

 

 

 

316,488,000

 

 

 

309,614,000

 

 

 

260,384,000

 

 

 

219,694,000

 

Yield on average net funds employed

 

 

21.39

%

 

 

19.70

%

 

 

19.29

%

 

 

19.06

%

 

 

20.35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable purchased

 

$

1,162,810,000

 

 

$

912,336,000

 

 

$

872,373,000

 

 

$

732,406,000

 

 

$

639,131,000

 

Number of invoices purchased

 

 

656,429

 

 

 

521,906

 

 

 

511,879

 

 

 

476,370

 

 

 

446,153

 

Average invoice size

 

$

1,771

 

 

$

1,751

 

 

$

1,705

 

 

$

1,537

 

 

$

1,433

 

Average invoice size - transportation

 

$

1,695

 

 

$

1,662

 

 

$

1,647

 

 

$

1,486

 

 

$

1,386

 

Average invoice size - non-transportation

 

$

2,522

 

 

$

2,627

 

 

$

2,251

 

 

$

1,965

 

 

$

1,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net new clients

 

 

2,146

 

 

 

280

 

 

 

233

 

 

 

235

 

 

 

151

 

Period end clients

 

 

5,584

 

 

 

3,438

 

 

 

3,158

 

 

 

2,925

 

 

 

2,690

 

Deposits summarized as of:

  

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

(Dollars in thousands)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

Non-interest bearing demand

 

$

561,033

 

 

$

548,991

 

 

$

564,225

 

 

$

403,643

 

 

$

381,042

 

 

Interest bearing demand

 

 

358,246

 

 

 

392,947

 

 

 

403,244

 

 

 

284,282

 

 

 

350,966

 

 

Individual retirement accounts

 

 

101,380

 

 

 

105,558

 

 

 

108,505

 

 

 

97,186

 

 

 

99,694

 

 

Money market

 

 

268,699

 

 

 

283,354

 

 

 

283,969

 

 

 

189,177

 

 

 

205,243

 

 

Savings

 

 

239,127

 

 

 

244,103

 

 

 

235,296

 

 

 

158,464

 

 

 

173,137

 

 

Certificates of deposit

 

 

751,290

 

 

 

783,651

 

 

 

837,384

 

 

 

770,599

 

 

 

777,459

 

 

Brokered deposits

 

 

345,167

 

 

 

174,894

 

 

 

188,725

 

 

 

109,194

 

 

 

84,640

 

 

     Total deposits

 

$

2,624,942

 

 

$

2,533,498

 

 

$

2,621,348

 

 

$

2,012,545

 

 

$

2,072,181

 

 

10

 

Net interest margin summarized for the three months ended:

 

June 30, 2018

 

 

March 31, 2018

 

 

 

Average

 

 

 

 

 

 

Average

 

 

Average

 

 

 

 

 

 

Average

 

(Dollars in thousands)

 

Balance

 

 

Interest

 

 

Rate

 

 

Balance

 

 

Interest

 

 

Rate

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning cash balances

 

$

217,605

 

 

$

1,030

 

 

 

1.90

%

 

$

131,723

 

 

$

517

 

 

 

1.59

%

Taxable securities

 

 

168,182

 

 

 

1,024

 

 

 

2.44

%

 

 

179,395

 

 

 

1,057

 

 

 

2.39

%

Tax-exempt securities

 

 

35,016

 

 

 

155

 

 

 

1.78

%

 

 

59,029

 

 

 

253

 

 

 

1.74

%

FHLB stock

 

 

18,297

 

 

 

101

 

 

 

2.21

%

 

 

16,311

 

 

 

105

 

 

 

2.61

%

Loans

 

 

2,922,047

 

 

 

58,939

 

 

 

8.09

%

 

 

2,766,859

 

 

 

52,186

 

 

 

7.65

%

     Total interest earning assets

 

$

3,361,147

 

 

$

61,249

 

 

 

7.31

%

 

$

3,153,317

 

 

$

54,118

 

 

 

6.96

%

Non-interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

267,813

 

 

 

 

 

 

 

 

 

 

 

257,566

 

 

 

 

 

 

 

 

 

          Total assets

 

$

3,628,960

 

 

 

 

 

 

 

 

 

 

$

3,410,883

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand

 

$

381,114

 

 

$

215

 

 

 

0.23

%

 

$

390,001

 

 

$

188

 

 

 

0.20

%

Individual retirement accounts

 

 

103,358

 

 

 

315

 

 

 

1.22

%

 

 

106,893

 

 

 

310

 

 

 

1.18

%

Money market

 

 

256,841

 

 

 

335

 

 

 

0.52

%

 

 

282,697

 

 

 

377

 

 

 

0.54

%

Savings

 

 

241,029

 

 

 

30

 

 

 

0.05

%

 

 

239,707

 

 

 

30

 

 

 

0.05

%

Certificates of deposit

 

 

767,484

 

 

 

2,593

 

 

 

1.36

%

 

 

813,244

 

 

 

2,584

 

 

 

1.29

%

      Brokered deposits

 

 

246,089

 

 

 

1,143

 

 

 

1.86

%

 

 

186,390

 

 

 

788

 

 

 

1.71

%

     Total deposits

 

 

1,995,915

 

 

 

4,631

 

 

 

0.93

%

 

 

2,018,932

 

 

 

4,277

 

 

 

0.86

%

Subordinated notes

 

 

48,864

 

 

 

838

 

 

 

6.88

%

 

 

48,839

 

 

 

837

 

 

 

6.95

%

Junior subordinated debentures

 

 

38,787

 

 

 

713

 

 

 

7.37

%

 

 

38,672

 

 

 

597

 

 

 

6.26

%

Other borrowings

 

 

385,646

 

 

 

1,810

 

 

 

1.88

%

 

 

342,426

 

 

 

1,277

 

 

 

1.51

%

     Total interest bearing liabilities

 

$

2,469,212

 

 

$

7,992

 

 

 

1.30

%

 

$

2,448,869

 

 

$

6,988

 

 

 

1.16

%

Non-interest bearing liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing demand deposits

 

 

553,309

 

 

 

 

 

 

 

 

 

 

 

545,118

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

23,823

 

 

 

 

 

 

 

 

 

 

 

15,709

 

 

 

 

 

 

 

 

 

Total equity

 

 

582,616

 

 

 

 

 

 

 

 

 

 

 

401,187

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

3,628,960

 

 

 

 

 

 

 

 

 

 

$

3,410,883

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

53,257

 

 

 

 

 

 

 

 

 

 

$

47,130

 

 

 

 

 

Interest spread

 

 

 

 

 

 

 

 

 

 

6.01

%

 

 

 

 

 

 

 

 

 

 

5.80

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

6.36

%

 

 

 

 

 

 

 

 

 

 

6.06

%

 

 


11

 

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)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

2018

 

 

2017

 

Net income available to common stockholders

 

$

12,192

 

 

$

11,878

 

 

$

6,111

 

 

$

9,587

 

 

$

9,467

 

 

$

24,070

 

 

$

19,748

 

Gain on sale of subsidiary

 

 

—

 

 

 

(1,071

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,071

)

 

 

(20,860

)

Incremental bonus related to transaction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,814

 

Transaction related costs

 

 

1,094

 

 

 

—

 

 

 

1,688

 

 

 

—

 

 

 

—

 

 

 

1,094

 

 

 

325

 

Tax effect of adjustments

 

 

(257

)

 

 

248

 

 

 

(601

)

 

 

—

 

 

 

—

 

 

 

(9

)

 

 

5,754

 

Adjusted net income available to common stockholders

 

$

13,029

 

 

$

11,055

 

 

$

7,198

 

 

$

9,587

 

 

$

9,467

 

 

$

24,084

 

 

$

9,781

 

Dilutive effect of convertible preferred stock

 

 

193

 

 

 

190

 

 

 

194

 

 

 

195

 

 

 

193

 

 

 

383

 

 

 

—

 

Adjusted net income available to common stockholders - diluted

 

$

13,222

 

 

$

11,245

 

 

$

7,392

 

 

$

9,782

 

 

$

9,660

 

 

$

24,467

 

 

$

9,781

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - diluted

 

 

26,315,878

 

 

 

21,560,524

 

 

 

21,518,469

 

 

 

20,645,469

 

 

 

18,893,158

 

 

 

23,950,143

 

 

 

18,899,865

 

Adjusted effects of assumed Preferred Stock conversion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(670,244

)

Adjusted weighted average shares outstanding - diluted

 

 

26,315,878

 

 

 

21,560,524

 

 

 

21,518,469

 

 

 

20,645,469

 

 

 

18,893,158

 

 

 

23,950,143

 

 

 

18,229,621

 

Adjusted diluted earnings per common share

 

$

0.50

 

 

$

0.52

 

 

$

0.34

 

 

$

0.47

 

 

$

0.51

 

 

$

1.02

 

 

$

0.54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

12,192

 

 

$

11,878

 

 

$

6,111

 

 

$

9,587

 

 

$

9,467

 

 

$

24,070

 

 

$

19,748

 

Average tangible common equity

 

 

491,492

 

 

 

326,614

 

 

 

330,819

 

 

 

309,624

 

 

 

254,088

 

 

 

409,509

 

 

 

246,290

 

Return on average tangible common equity

 

 

9.95

%

 

 

14.75

%

 

 

7.33

%

 

 

12.28

%

 

 

14.94

%

 

 

11.85

%

 

 

16.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted efficiency ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

53,257

 

 

$

47,130

 

 

$

45,796

 

 

$

39,512

 

 

$

38,557

 

 

$

100,387

 

 

$

70,376

 

Non-interest income

 

 

4,945

 

 

 

5,172

 

 

 

3,998

 

 

 

4,171

 

 

 

5,202

 

 

 

10,117

 

 

 

32,487

 

Operating revenue

 

 

58,202

 

 

 

52,302

 

 

 

49,794

 

 

 

43,683

 

 

 

43,759

 

 

 

110,504

 

 

 

102,863

 

Gain on sale of subsidiary

 

 

—

 

 

 

(1,071

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,071

)

 

 

(20,860

)

Adjusted operating revenue

 

$

58,202

 

 

$

51,231

 

 

$

49,794

 

 

$

43,683

 

 

$

43,759

 

 

$

109,433

 

 

$

82,003

 

Non-interest expenses

 

$

37,403

 

 

$

34,042

 

 

$

33,231

 

 

$

28,225

 

 

$

27,321

 

 

$

71,445

 

 

$

62,158

 

Incremental bonus related to transaction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,814

)

Transaction related costs

 

 

(1,094

)

 

 

—

 

 

 

(1,688

)

 

 

—

 

 

 

—

 

 

 

(1,094

)

 

 

(325

)

Adjusted non-interest expenses

 

$

36,309

 

 

$

34,042

 

 

$

31,543

 

 

$

28,225

 

 

$

27,321

 

 

$

70,351

 

 

$

57,019

 

Adjusted efficiency ratio

 

 

62.38

%

 

 

66.45

%

 

 

63.35

%

 

 

64.61

%

 

 

62.44

%

 

 

64.29

%

 

 

69.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net non-interest expense to average assets ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses

 

$

37,403

 

 

$

34,042

 

 

$

33,231

 

 

$

28,225

 

 

$

27,321

 

 

$

71,445

 

 

$

62,158

 

Incremental bonus related to transaction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,814

)

Transaction related costs

 

 

(1,094

)

 

 

—

 

 

 

(1,688

)

 

 

—

 

 

 

—

 

 

 

(1,094

)

 

 

(325

)

Adjusted non-interest expenses

 

$

36,309

 

 

$

34,042

 

 

$

31,543

 

 

$

28,225

 

 

$

27,321

 

 

$

70,351

 

 

$

57,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-interest income

 

$

4,945

 

 

$

5,172

 

 

$

3,998

 

 

$

4,171

 

 

$

5,202

 

 

$

10,117

 

 

$

32,487

 

Gain on sale of subsidiary

 

 

—

 

 

 

(1,071

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,071

)

 

 

(20,860

)

Adjusted non-interest income

 

$

4,945

 

 

$

4,101

 

 

$

3,998

 

 

$

4,171

 

 

$

5,202

 

 

$

9,046

 

 

$

11,627

 

Adjusted net non-interest expenses

 

$

31,364

 

 

$

29,941

 

 

$

27,545

 

 

$

24,054

 

 

$

22,119

 

 

$

61,305

 

 

$

45,392

 

Average total assets

 

$

3,628,960

 

 

$

3,410,883

 

 

$

3,181,697

 

 

$

2,849,170

 

 

$

2,723,303

 

 

$

3,520,522

 

 

$

2,671,580

 

Adjusted net non-interest expense to average assets ratio

 

 

3.47

%

 

 

3.56

%

 

 

3.43

%

 

 

3.35

%

 

 

3.26

%

 

 

3.51

%

 

 

3.43

%

 

12

 

 

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)

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

2018

 

 

2017

 

Reported yield on loans

 

 

8.09

%

 

 

7.65

%

 

 

7.73

%

 

 

7.44

%

 

 

7.79

%

 

 

7.88

%

 

 

7.49

%

Effect of accretion income on acquired loans

 

 

(0.50

%)

 

 

(0.29

%)

 

 

(0.26

%)

 

 

(0.24

%)

 

 

(0.54

%)

 

 

(0.40

%)

 

 

(0.39

%)

Adjusted yield on loans

 

 

7.59

%

 

 

7.36

%

 

 

7.47

%

 

 

7.20

%

 

 

7.25

%

 

 

7.48

%

 

 

7.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net interest margin

 

 

6.36

%

 

 

6.06

%

 

 

6.16

%

 

 

5.90

%

 

 

6.16

%

 

 

6.21

%

 

 

5.78

%

Effect of accretion income on acquired loans

 

 

(0.44

%)

 

 

(0.25

%)

 

 

(0.23

%)

 

 

(0.21

%)

 

 

(0.46

%)

 

 

(0.34

%)

 

 

(0.33

%)

Adjusted net interest margin

 

 

5.92

%

 

 

5.81

%

 

 

5.93

%

 

 

5.69

%

 

 

5.70

%

 

 

5.87

%

 

 

5.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

607,225

 

 

$

402,944

 

 

$

391,698

 

 

$

386,097

 

 

$

310,467

 

 

$

607,225

 

 

$

310,467

 

Preferred stock liquidation preference

 

 

(9,658

)

 

 

(9,658

)

 

 

(9,658

)

 

 

(9,658

)

 

 

(9,658

)

 

 

(9,658

)

 

 

(9,658

)

Total common stockholders' equity

 

 

597,567

 

 

 

393,286

 

 

 

382,040

 

 

 

376,439

 

 

 

300,809

 

 

 

597,567

 

 

 

300,809

 

Goodwill and other intangibles

 

 

(117,777

)

 

 

(63,923

)

 

 

(63,778

)

 

 

(42,452

)

 

 

(43,321

)

 

 

(117,777

)

 

 

(43,321

)

Tangible common stockholders' equity

 

$

479,790

 

 

$

329,363

 

 

$

318,262

 

 

$

333,987

 

 

$

257,488

 

 

$

479,790

 

 

$

257,488

 

Common shares outstanding

 

 

26,260,785

 

 

 

20,824,509

 

 

 

20,820,445

 

 

 

20,820,900

 

 

 

18,132,585

 

 

 

26,260,785

 

 

 

18,132,585

 

Tangible book value per share

 

$

18.27

 

 

$

15.82

 

 

$

15.29

 

 

$

16.04

 

 

$

14.20

 

 

$

18.27

 

 

$

14.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets at end of period

 

$

3,794,631

 

 

$

3,405,010

 

 

$

3,499,033

 

 

$

2,906,161

 

 

$

2,836,684

 

 

$

3,794,631

 

 

$

2,836,684

 

Goodwill and other intangibles

 

 

(117,777

)

 

 

(63,923

)

 

 

(63,778

)

 

 

(42,452

)

 

 

(43,321

)

 

 

(117,777

)

 

 

(43,321

)

Adjusted total assets at period end

 

$

3,676,854

 

 

$

3,341,087

 

 

$

3,435,255

 

 

$

2,863,709

 

 

$

2,793,363

 

 

$

3,676,854

 

 

$

2,793,363

 

Tangible common stockholders' equity ratio

 

 

13.05

%

 

 

9.86

%

 

 

9.26

%

 

 

11.66

%

 

 

9.22

%

 

 

13.05

%

 

 

9.22

%

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.  

 

13

 

 

•

"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, except for non-performing assets to total assets.

 

3)

Current quarter ratios are preliminary.

 


Source: Triumph Bancorp, Inc.

 

###

 

Investor Relations:

Luke Wyse

Senior Vice President, Finance & Investor Relations

lwyse@tbkbank.com

214-365-6936

 

Media Contact:

Amanda Tavackoli

Senior Vice President, Marketing & Communication

atavackoli@tbkbank.com

214-365-6930

14