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Triumph Bancorp Reports Fourth Quarter Net Income to Common Stockholders of $16.7 Million

DALLAS, Jan. 21, 2020 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the fourth quarter of 2019.

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.

2019 Fourth Quarter Highlights and Recent Developments

  • For the fourth quarter of 2019, net income available to common stockholders was $16.7 million. Diluted earnings per share were $0.66. 
  • Net interest margin (“NIM”) was 5.72% for the quarter ended December 31, 2019. 
  • Total loans held for investment decreased $14.9 million, or 0.4%, to $4.195 billion at December 31, 2019. Average loans for the quarter increased $190.7 million, or 4.8%, to $4.134 billion.
  • The total dollar value of invoices purchased by Triumph Business Capital for the quarter ended December 31, 2019 was $1.490 billion with an average invoice size of $1,662. The transportation average invoice size for the quarter was $1,507.
  • For the quarter ended December 31, 2019, TriumphPay processed 442,428 invoices paying 41,222 distinct carriers a total of $474.9 million.
  • During the quarter ended December 31, 2019, we completed a $39.5 million subordinated debt offering.
  • During the quarter ended December 31, 2019, we repurchased 392,557 shares into treasury stock under our stock repurchase program at an average price of $36.69, for a total of $14.4 million. During the year ended December 31, 2019, we have repurchased 2,080,791 shares into treasury stock under our stock repurchase programs at an average price of $30.90, for a total of $64.4 million.

Balance Sheet

Total loans held for investment decreased $14.9 million, or 0.4%, during the fourth quarter to $4.195 billion at December 31, 2019. The community banking portfolio decreased $113.0 million, or 5.1%, to $2.094 billion, the commercial finance portfolio decreased $25.6 million, or 2.0%, to $1.250 billion, and the national lending portfolio increased $123.7 million, or 17.0%, to $850.4 million during the quarter.

Total deposits were $3.790 billion at December 31, 2019, an increase of $92.1 million, or 2.5%, in the fourth quarter of 2019.  Non-interest-bearing deposits accounted for 21% of total deposits and non-time deposits accounted for 59% of total deposits at December 31, 2019. 

Net Interest Income

We earned net interest income for the quarter ended December 31, 2019 of $66.4 million compared to $64.8 million for the quarter ended September 30, 2019.

Yields on loans for the quarter ended December 31, 2019 were down 15 bps from the prior quarter to 7.48%. The average cost of our total deposits was 1.15% for the quarter ended December 31, 2019 compared to 1.19% for the quarter ended September 30, 2019. 

Asset Quality

Non-performing assets were 0.87% of total assets at December 31, 2019 compared to 0.91% of total assets at September 30, 2019.  The ratio of past due to total loans decreased to 2.19% at December 31, 2019 from 2.47% at September 30, 2019. We recorded total net charge-offs of $3.2 million, or 0.08% of average loans, for the quarter ended December 31, 2019 compared to net charge-offs of $0.4 million, or 0.01% of average loans, for the quarter ended September 30, 2019. 

We recorded a provision for loan losses of $0.4 million for the quarter ended December 31, 2019 compared to a provision of $2.9 million for the quarter ended September 30, 2019. From September 30, 2019 to December 31, 2019, our ALLL decreased from $31.9 million or 0.76% of total loans to $29.1 million or 0.69% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended December 31, 2019 of $8.7 million compared to $7.7 million for the quarter ended September 30, 2019.

For the quarter ended December 31, 2019, non-interest expense totaled $52.7 million, compared to $52.2 million for the quarter ended September 30, 2019. 

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 5:00 p.m. Central Time on Tuesday, January 21, 2020. Todd Ritterbusch, Chief Lending Officer, will also be available for questions.

To participate in the live conference call, please dial 1-855-940-9472 (Canada:1-855-669-9657) and request to be joined into the Triumph Bancorp, Inc. call.  A simultaneous audio-only webcast may be accessed via the Company's website at www.triumphbancorp.com through the Investor Relations, News & Events, Webcasts and Presentations links, or through a direct link here at: https://services.choruscall.com/links/tbk200121.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. (TBK) is a financial holding company headquartered in Dallas, Texas.  Triumph offers a diversified line of community banking, national lending, and commercial finance products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com

Forward-Looking Statements

This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; 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 acquisitions of First Bancorp of Durango, Inc., Southern Colorado Corp., and the operating assets of Interstate Capital Corporation and certain of its affiliates) 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 12, 2019.

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 Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
(Dollars in thousands)   2019     2019     2019     2019     2018     2019     2018  
Financial Highlights:                                                        
Total assets   $ 5,060,297     $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 5,060,297     $ 4,559,779  
Loans held for investment   $ 4,194,512     $ 4,209,417     $ 3,835,903     $ 3,612,869     $ 3,608,644     $ 4,194,512     $ 3,608,644  
Deposits   $ 3,789,906     $ 3,697,833     $ 3,658,978     $ 3,314,440     $ 3,450,349     $ 3,789,906     $ 3,450,349  
Net income available to common stockholders   $ 16,709     $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 58,544     $ 51,130  
                                                         
Performance Ratios - Annualized:                                                        
Return on average assets     1.31 %     1.17 %     1.09 %     1.33 %     1.60 %     1.23 %     1.33 %
Return on average total equity     10.24 %     8.79 %     7.83 %     9.30 %     11.35 %     9.04 %     9.24 %
Return on average common equity     10.24 %     8.79 %     7.83 %     9.30 %     11.40 %     9.04 %     9.27 %
Return on average tangible common equity (1)     14.54 %     12.56 %     11.19 %     13.43 %     16.73 %     12.93 %     11.90 %
Yield on loans(2)     7.48 %     7.63 %     7.95 %     7.99 %     8.14 %     7.75 %     8.07 %
Cost of interest bearing deposits     1.45 %     1.49 %     1.42 %     1.24 %     1.15 %     1.40 %     1.02 %
Cost of total deposits     1.15 %     1.19 %     1.14 %     0.99 %     0.91 %     1.12 %     0.80 %
Cost of total funds     1.35 %     1.41 %     1.40 %     1.28 %     1.14 %     1.36 %     1.09 %
Net interest margin(2)     5.72 %     5.85 %     5.99 %     6.15 %     6.34 %     5.92 %     6.35 %
Net non-interest expense to average assets     3.46 %     3.64 %     3.68 %     3.70 %     3.55 %     3.61 %     3.70 %
Adjusted net non-interest expense to average assets (1)     3.46 %     3.64 %     3.68 %     3.70 %     3.55 %     3.61 %     3.55 %
Efficiency ratio     70.15 %     71.93 %     71.37 %     70.54 %     65.52 %     70.99 %     66.94 %
Adjusted efficiency ratio (1)     70.15 %     71.93 %     71.37 %     70.54 %     65.52 %     70.99 %     64.43 %
                                                         
Asset Quality:(3)                                                        
Past due to total loans     2.19 %     2.47 %     1.90 %     2.33 %     2.41 %     2.19 %     2.41 %
Non-performing loans to total loans     0.97 %     1.00 %     0.96 %     0.95 %     1.00 %     0.97 %     1.00 %
Non-performing assets to total assets     0.87 %     0.91 %     0.86 %     0.84 %     0.84 %     0.87 %     0.84 %
ALLL to non-performing loans     71.63 %     75.58 %     79.91 %     80.70 %     76.47 %     71.63 %     76.47 %
ALLL to total loans     0.69 %     0.76 %     0.77 %     0.76 %     0.76 %     0.69 %     0.76 %
Net charge-offs to average loans     0.08 %     0.01 %     0.05 %     0.03 %     0.05 %     0.17 %     0.23 %
                                                         
Capital:                                                        
Tier 1 capital to average assets(4)     10.03 %     10.37 %     10.84 %     11.32 %     11.08 %     10.03 %     11.08 %
Tier 1 capital to risk-weighted assets(4)     10.29 %     10.08 %     11.08 %     11.76 %     11.49 %     10.29 %     11.49 %
Common equity tier 1 capital to risk-weighted assets(4)     9.45 %     9.26 %     10.19 %     10.81 %     10.55 %     9.45 %     10.55 %
Total capital to risk-weighted assets(4)     12.75 %     11.79 %     12.88 %     13.62 %     13.35 %     12.75 %     13.35 %
Total equity to total assets     12.58 %     12.57 %     13.45 %     14.27 %     13.96 %     12.58 %     13.96 %
Tangible common stockholders' equity to tangible assets(1)     9.16 %     9.10 %     9.78 %     10.37 %     10.03 %     9.16 %     10.03 %
                                                         
Per Share Amounts:                                                        
Book value per share   $ 25.50     $ 24.99     $ 24.56     $ 24.19     $ 23.62     $ 25.50     $ 23.62  
Tangible book value per share (1)   $ 17.88     $ 17.40     $ 17.13     $ 16.82     $ 16.22     $ 17.88     $ 16.22  
Basic earnings per common share   $ 0.67     $ 0.56     $ 0.48     $ 0.55     $ 0.68     $ 2.26     $ 2.06  
Diluted earnings per common share   $ 0.66     $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 2.25     $ 2.03  
Adjusted diluted earnings per common share(1)   $ 0.66     $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 2.25     $ 2.21  
Shares outstanding end of period     24,964,961       25,357,985       26,198,308       26,709,411       26,949,936       24,964,961       26,949,936  
                                                         

Unaudited consolidated balance sheet as of:

    December 31,     September 30,     June 30,     March 31,     December 31,  
(Dollars in thousands)   2019     2019     2019     2019     2018  
ASSETS                                        
Total cash and cash equivalents   $ 197,880     $ 115,043     $ 209,305     $ 171,950     $ 234,939  
Securities - available for sale     248,820       302,917       329,991       339,465       336,423  
Securities - held to maturity     8,417       8,517       8,573       8,499       8,487  
Equity securities     5,437       5,543       5,479       5,183       5,044  
Loans held for sale     2,735       7,499       2,877       610       2,106  
Loans held for investment     4,194,512       4,209,417       3,835,903       3,612,869       3,608,644  
Allowance for loan and lease losses     (29,092 )     (31,895 )     (29,416 )     (27,605 )     (27,571 )
Loans, net     4,165,420       4,177,522       3,806,487       3,585,264       3,581,073  
FHLB and other restricted stock     19,860       23,960       18,037       21,191       15,943  
Premises and equipment, net     96,595       87,112       84,998       84,931       83,392  
Other real estate owned ("OREO"), net     3,009       2,849       3,351       3,073       2,060  
Goodwill and intangible assets, net     190,286       192,440       194,668       197,015       199,417  
Bank-owned life insurance     40,954       40,724       40,847       40,667       40,509  
Deferred tax asset, net     3,812       5,971       7,278       7,608       8,438  
Other assets     77,072       69,600       71,298       64,327       41,948  
Total assets   $ 5,060,297     $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779  
LIABILITIES                                        
Non-interest bearing deposits   $ 809,696     $ 754,233     $ 684,223     $ 667,597     $ 724,527  
Interest bearing deposits     2,980,210       2,943,600       2,974,755       2,646,843       2,725,822  
Total deposits     3,789,906       3,697,833       3,658,978       3,314,440       3,450,349  
Customer repurchase agreements     2,033       14,124       12,788       3,727       4,485  
Federal Home Loan Bank advances     430,000       530,000       305,000       405,000       330,000  
Subordinated notes     87,327       49,010       48,983       48,956       48,929  
Junior subordinated debentures     39,566       39,443       39,320       39,200       39,083  
Other liabilities     74,875       75,594       74,758       72,244       50,326  
Total liabilities     4,423,707       4,406,004       4,139,827       3,883,567       3,923,172  
EQUITY                                        
Common stock     272       272       271       271       271  
Additional paid-in-capital     473,251       472,368       471,145       470,292       469,341  
Treasury stock, at cost     (67,069 )     (52,632 )     (27,468 )     (9,881 )     (2,288 )
Retained earnings     229,030       212,321       198,004       185,274       170,486  
Accumulated other comprehensive income     1,106       1,364       1,410       260       (1,203 )
Total stockholders' equity     636,590       633,693       643,362       646,216       636,607  
Total liabilities and equity   $ 5,060,297     $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779  
                                         

Unaudited consolidated statement of income:

    For the Three Months Ended     For the Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
(Dollars in thousands)   2019     2019     2019     2019     2018     2019     2018  
Interest income:                                                        
Loans, including fees   $ 52,395     $ 50,249     $ 47,910     $ 45,094     $ 44,435     $ 195,648     $ 160,723  
Factored receivables, including fees     25,573       25,570       25,558       24,556       28,070       101,257       92,103  
Securities     2,379       2,784       2,667       2,644       2,314       10,474       6,354  
FHLB and other restricted stock     165       209       146       192       154       712       507  
Cash deposits     659       603       1,022       778       877       3,062       3,289  
Total interest income     81,171       79,415       77,303       73,264       75,850       311,153       262,976  
Interest expense:                                                        
Deposits     10,961       11,036       10,010       8,218       7,931       40,225       23,058  
Subordinated notes     1,035       840       839       839       839       3,553       3,351  
Junior subordinated debentures     687       719       744       760       717       2,910       2,741  
Other borrowings     2,080       2,055       2,291       2,136       1,482       8,562       6,776  
Total interest expense     14,763       14,650       13,884       11,953       10,969       55,250       35,926  
Net interest income     66,408       64,765       63,419       61,311       64,881       255,903       227,050  
Provision for loan losses     382       2,865       3,681       1,014       1,910       7,942       16,167  
Net interest income after provision for loan losses     66,026       61,900       59,738       60,297       62,971       247,961       210,883  
Non-interest income:                                                        
Service charges on deposits     1,889       1,937       1,700       1,606       1,702       7,132       5,469  
Card income     1,943       2,015       2,071       1,844       1,999       7,873       6,514  
Net OREO gains (losses) and valuation adjustments     50       (56 )     148       209       37       351       (514 )
Net gains (losses) on sale of securities     39       19       14       (11 )           61       (272 )
Fee income     1,686       1,624       1,519       1,612       1,636       6,441       5,150  
Insurance commissions     1,092       1,247       961       919       846       4,219       3,492  
Gain on sale of subsidiary                                         1,071  
Other     1,967       956       1,210       1,359       574       5,492       2,060  
Total non-interest income     8,666       7,742       7,623       7,538       6,794       31,569       22,970  
Non-interest expense:                                                        
Salaries and employee benefits     29,586       28,717       28,120       26,439       25,586       112,862       90,212  
Occupancy, furniture and equipment     4,667       4,505       4,502       4,522       4,402       18,196       14,023  
FDIC insurance and other regulatory assessments     (302 )     (2 )     303       299       184       298       1,129  
Professional fees     1,904       1,969       1,550       1,865       1,837       7,288       8,939  
Amortization of intangible assets     2,154       2,228       2,347       2,402       2,438       9,131       6,980  
Advertising and promotion     1,347       1,379       1,796       1,604       1,036       6,126       4,974  
Communications and technology     5,732       5,382       4,988       4,874       4,388       20,976       18,270  
Other     7,573       7,975       7,098       6,561       7,091       29,207       22,826  
Total non-interest expense     52,661       52,153       50,704       48,566       46,962       204,084       167,353  
Net income before income tax     22,031       17,489       16,657       19,269       22,803       75,446       66,500  
Income tax expense     5,322       3,172       3,927       4,481       4,718       16,902       14,792  
Net income   $ 16,709     $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 58,544     $ 51,708  
Dividends on preferred stock                                         (578 )
Net income available to common stockholders   $ 16,709     $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 58,544     $ 51,130  
                                                         

Earnings per share:

...
    For the Three Months Ended     For the Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
(Dollars in thousands)   2019     2019     2019     2019     2018     2019     2018  
Basic                                                        
Net income to common stockholders   $ 16,709     $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 58,544     $ 51,130  
Weighted average common shares outstanding     25,089,447       25,621,054       26,396,351       26,679,724       26,666,554       25,941,395       24,791,448  
Basic earnings per common share   $ 0.67     $ 0.56     $ 0.48     $ 0.55     $ 0.68     $ 2.26     $ 2.06  
                                                         
Diluted                                                        
Net income to common stockholders   $ 16,709     $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 58,544     $ 51,130  
Dilutive effect of preferred stock                                         578  
Net income to common stockholders - diluted   $ 16,709     $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 58,544     $ 51,708  
Weighted average common shares outstanding     25,089,447       25,621,054       26,396,351       26,679,724       26,666,554       25,941,395       24,791,448  
Dilutive effects of:                                                        
Assumed conversion of Preferred A                             89,240             258,674  
Assumed conversion of Preferred B                             100,176             290,375  
Assumed exercises of stock options     69,865       60,068       59,962       64,166       76,219       63,808       84,126  
Restricted stock awards     70,483       45,631       30,110       49,795       46,457       47,242       52,851  
Restricted stock units     13,264       3,045                   1,303       3,441       3,039  
Performance stock units - market based     11,803       4,673                         4,119        
Performance stock units - performance based                                          
Weighted average shares outstanding - diluted     25,254,862       25,734,471       26,486,423       26,793,685       26,979,949       26,060,005       25,480,513  
Diluted earnings per common share   $ 0.66     $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 2.25     $ 2.03  
                                                         
                                                         
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 Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
    2019     2019     2019     2019     2018     2019     2018  
Assumed conversion of Preferred A                                          
Assumed conversion of Preferred B                                          
Stock options     66,019       67,023       70,037       50,752       51,952       66,019       51,952  
Restricted stock awards           3,209             13,290       14,513              
Restricted stock units                 58,400       58,400                    
Performance stock units - market based     55,228       55,228       70,879       58,400       59,658       55,228       59,658  
Performance stock units - performance based     254,000