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Triumph Bancorp Reports Third Quarter Net Income to Common Stockholders of $14.3 Million

DALLAS, Oct. 16, 2019 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the third 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 Third Quarter Highlights and Recent Developments

  • For the third quarter of 2019, net income available to common stockholders was $14.3 million. Diluted earnings per share were $0.56. 

  • Net interest margin (“NIM”) was 5.85% for the quarter ended September 30, 2019. 

  • Total loans held for investment increased $373.5 million, or 9.7%, to $4.209 billion at September 30, 2019. Average loans for the quarter increased $235.7 million, or 6.4%, to $3.944 billion.

  • Triumph Business Capital grew period-end clients to 6,471 clients, which is an increase of 16 clients, or 0.2%. The total dollar value of invoices purchased for the quarter ended September 30, 2019 was $1.451 billion with an average invoice price of $1,628. 

  • At September 30, 2019, there were 163 clients utilizing the TriumphPay platform, which is an increase of 17 clients, or 11.6%, during the quarter. For the quarter ended September 30, 2019, TriumphPay processed 168,562 invoices paying 30,333 distinct carriers a total of $190.3 million.

  • During the quarter ended September 30, 2019, we repurchased 850,093 shares into treasury stock under our stock repurchase program at an average price of $29.38, for a total of $25.0 million. During the nine months ended September 30, 2019, we have repurchased 1,688,234 shares into treasury stock under our stock repurchase programs at an average price of $29.56, for a total of $49.9 million, effectively completing both of our previously announced $25.0 million stock repurchase programs.

Repurchase Program Authorization

On October 16, 2019 our board of directors authorized us to repurchase up to an additional $50.0 million of our outstanding common stock. We may repurchase these shares from time to time in open market transactions or through privately negotiated transactions at our discretion.  The amount, timing and nature of any share repurchases will be based on a variety of factors, including the trading price of our common stock, applicable securities laws restrictions, regulatory limitations and market and economic factors.  This repurchase program is authorized for a period of up to one year and does not require us to repurchase any specific number of shares.  The repurchase program may be modified, suspended or discontinued at any time, at our discretion.

Balance Sheet

Total loans held for investment increased $373.5 million, or 9.7%, during the third quarter to $4.209 billion at September 30, 2019. The commercial finance portfolio increased $89.0 million, or 7.5%, to $1.276 billion, the national lending portfolio increased $249.4 million, or 52.3%, to $726.6 million, and the community banking portfolio increased $35.1 million, or 1.6%, to $2.207 billion during the quarter.

Total deposits were $3.698 billion at September 30, 2019, an increase of $38.9 million, or 1.1%, in the third quarter of 2019.  Non-interest-bearing deposits accounted for 20% of total deposits and non-time deposits accounted for 57% of total deposits at September 30, 2019. 

Net Interest Income

We earned net interest income for the quarter ended September 30, 2019 of $64.8 million compared to $63.4 million for the quarter ended June 30, 2019.

Yields on loans for the quarter ended September 30, 2019 were down 32 bps from the prior quarter to 7.63%. The average cost of our total deposits was 1.19% for the quarter ended September 30, 2019 compared to 1.14% for the quarter ended June 30, 2019. 

Asset Quality

Non-performing assets were 0.91% of total assets at September 30, 2019 compared to 0.86% of total assets at June 30, 2019.  The ratio of past due to total loans increased to 2.47% at September 30, 2019 from 1.90% at June 30, 2019. We recorded total net charge-offs of $0.4 million, or 0.01% of average loans, for the quarter ended September 30, 2019 compared to net charge-offs of $1.9 million, or 0.05% of average loans, for the quarter ended June 30, 2019. 

We recorded a provision for loan losses of $2.9 million for the quarter ended September 30, 2019 compared to a provision of $3.7 million for the quarter ended June 30, 2019. From June 30, 2019 to September 30, 2019, our ALLL increased from $29.4 million or 0.77% of total loans to $31.9 million or 0.76% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended September 30, 2019 of $7.7 million compared to $7.6 million for the quarter ended June 30, 2019.

For the quarter ended September 30, 2019, non-interest expense totaled $52.2 million, compared to $50.7 million for the quarter ended June 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 7:00 a.m. Central Time on Thursday, October 17, 2019. 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/tbk191017.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 Nine Months
Ended
 
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018     2019     2018  
Financial Highlights:                                                        
Total assets   $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 4,537,102     $ 5,039,697     $ 4,537,102  
Loans held for investment   $ 4,209,417     $ 3,835,903     $ 3,612,869     $ 3,608,644     $ 3,512,143     $ 4,209,417     $ 3,512,143  
Deposits   $ 3,697,833     $ 3,658,978     $ 3,314,440     $ 3,450,349     $ 3,439,049     $ 3,697,833     $ 3,439,049  
Net income available to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
                                                         
Performance Ratios - Annualized:                                                        
Return on average assets     1.17 %     1.09 %     1.33 %     1.60 %     0.90 %     1.20 %     1.21 %
Return on average total equity     8.79 %     7.83 %     9.30 %     11.35 %     5.88 %     8.63 %     8.40 %
Return on average common equity     8.79 %     7.83 %     9.30 %     11.40 %     5.85 %     8.63 %     8.41 %
Return on average tangible common equity (1)     12.56 %     11.19 %     13.43 %     16.73 %     7.57 %     12.38 %     10.27 %
Yield on loans(2)     7.63 %     7.95 %     7.99 %     8.14 %     8.33 %     7.85 %     8.05 %
Cost of interest bearing deposits     1.49 %     1.42 %     1.24 %     1.15 %     1.08 %     1.39 %     0.96 %
Cost of total deposits     1.19 %     1.14 %     0.99 %     0.91 %     0.85 %     1.11 %     0.76 %
Cost of total funds     1.41 %     1.40 %     1.28 %     1.14 %     1.16 %     1.36 %     1.06 %
Net interest margin(2)     5.85 %     5.99 %     6.15 %     6.34 %     6.59 %     5.99 %     6.35 %
Net non-interest expense to average assets     3.64 %     3.68 %     3.70 %     3.55 %     4.19 %     3.67 %     3.76 %
Adjusted net non-interest expense to average assets (1)     3.64 %     3.68 %     3.70 %     3.55 %     3.62 %     3.67 %     3.55 %
Efficiency ratio     71.93 %     71.37 %     70.54 %     65.52 %     72.15 %     71.29 %     67.50 %
Adjusted efficiency ratio (1)     71.93 %     71.37 %     70.54 %     65.52 %     63.49 %     71.29 %     63.98 %
                                                         
Asset Quality:(3)                                                        
Past due to total loans     2.47 %     1.90 %     2.33 %     2.41 %     2.23 %     2.47 %     2.23 %
Non-performing loans to total loans     1.00 %     0.96 %     0.95 %     1.00 %     1.13 %     1.00 %     1.13 %
Non-performing assets to total assets     0.91 %     0.86 %     0.84 %     0.84 %     0.93 %     0.91 %     0.93 %
ALLL to non-performing loans     75.58 %     79.91 %     80.70 %     76.47 %     68.82 %     75.58 %     68.82 %
ALLL to total loans     0.76 %     0.77 %     0.76 %     0.76 %     0.78 %     0.76 %     0.78 %
Net charge-offs to average loans     0.01 %     0.05 %     0.03 %     0.05 %     0.12 %     0.09 %     0.19 %
                                                         
Capital:                                                        
Tier 1 capital to average assets(4)     10.37 %     10.84 %     11.32 %     11.08 %     11.75 %     10.37 %     11.75 %
Tier 1 capital to risk-weighted assets(4)     10.08 %     11.08 %     11.76 %     11.49 %     11.16 %     10.08 %     11.16 %
Common equity tier 1 capital to risk-weighted assets(4)     9.26 %     10.19 %     10.81 %     10.55 %     9.96 %     9.26 %     9.96 %
Total capital to risk-weighted assets(4)     11.79 %     12.88 %     13.62 %     13.35 %     13.05 %     11.79 %     13.05 %
Total equity to total assets     12.57 %     13.45 %     14.27 %     13.96 %     13.59 %     12.57 %     13.59 %
Tangible common stockholders' equity to tangible assets(1)     9.10 %     9.78 %     10.37 %     10.03 %     9.35 %     9.10 %     9.35 %
                                                         
Per Share Amounts:                                                        
Book value per share   $ 24.99     $ 24.56     $ 24.19     $ 23.62     $ 23.10     $ 24.99     $ 23.10  
Tangible book value per share (1)   $ 17.40     $ 17.13     $ 16.82     $ 16.22     $ 15.42     $ 17.40     $ 15.42  
Basic earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.68     $ 0.34     $ 1.60     $ 1.37  
Diluted earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 0.34     $ 1.59     $ 1.35  
Adjusted diluted earnings per common share(1)   $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 0.51     $ 1.59     $ 1.53  
Shares outstanding end of period     25,357,985       26,198,308       26,709,411       26,949,936       26,279,761       25,357,985       26,279,761  
                                                         

Unaudited consolidated balance sheet as of:

    September 30,     June 30,     March 31,     December 31,     September 30,  
 (Dollars in thousands)   2019     2019     2019     2018     2018  
ASSETS                                        
Total cash and cash equivalents   $ 115,043     $ 209,305     $ 171,950     $ 234,939     $ 282,409  
Securities - available for sale     302,917       329,991       339,465       336,423       355,981  
Securities - held to maturity     8,517       8,573       8,499       8,487       8,403  
Equity securities     5,543       5,479       5,183       5,044       4,981  
Loans held for sale     7,499       2,877       610       2,106       683  
Loans held for investment     4,209,417       3,835,903       3,612,869       3,608,644       3,512,143  
Allowance for loan and lease losses     (31,895 )     (29,416 )     (27,605 )     (27,571 )     (27,256 )
Loans, net     4,177,522       3,806,487       3,585,264       3,581,073       3,484,887  
FHLB and other restricted stock     23,960       18,037       21,191       15,943       23,109  
Premises and equipment, net     87,112       84,998       84,931       83,392       82,935  
Other real estate owned ("OREO"), net     2,849       3,351       3,073       2,060       2,442  
Goodwill and intangible assets, net     192,440       194,668       197,015       199,417       201,842  
Bank-owned life insurance     40,724       40,847       40,667       40,509       40,339  
Deferred tax asset, net     5,971       7,278       7,608       8,438       8,137  
Other assets     69,600       71,298       64,327       41,948       40,954  
Total assets   $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 4,537,102  
LIABILITIES                                        
Non-interest bearing deposits   $ 754,233     $ 684,223     $ 667,597     $ 724,527     $ 697,903  
Interest bearing deposits     2,943,600       2,974,755       2,646,843       2,725,822       2,741,146  
Total deposits     3,697,833       3,658,978       3,314,440       3,450,349       3,439,049  
Customer repurchase agreements     14,124       12,788       3,727       4,485       13,248  
Federal Home Loan Bank advances     530,000       305,000       405,000       330,000       330,000  
Subordinated notes     49,010       48,983       48,956       48,929       48,903  
Junior subordinated debentures     39,443       39,320       39,200       39,083       38,966  
Other liabilities     75,594       74,758       72,244       50,326       50,295  
Total liabilities     4,406,004       4,139,827       3,883,567       3,923,172       3,920,461  
EQUITY                                        
Preferred stock series A                             4,550  
Preferred stock series B                             5,108  
Common stock     272       271       271       271       264  
Additional paid-in-capital     472,368       471,145       470,292       469,341       458,920  
Treasury stock, at cost     (52,632 )     (27,468 )     (9,881 )     (2,288 )     (2,285 )
Retained earnings     212,321       198,004       185,274       170,486       152,401  
Accumulated other comprehensive income     1,364       1,410       260       (1,203 )     (2,317 )
Total equity     633,693       643,362       646,216       636,607       616,641  
Total liabilities and equity   $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 4,537,102  
                                         

Unaudited consolidated statement of income:

    For the Three Months Ended     For the Nine Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
 (Dollars in thousands)   2019     2019     2019     2018     2018     2019     2018  
Interest income:                                                        
Loans, including fees   $ 50,249     $ 47,910     $ 45,094     $ 44,435     $ 41,257     $ 143,253     $ 116,288  
Factored receivables, including fees     25,570       25,558       24,556       28,070       27,939       75,684       64,033  
Securities     2,784       2,667       2,644       2,314       1,551       8,095       4,040  
FHLB and other restricted stock     209       146       192       154       147       547       353  
Cash deposits     603       1,022       778       877       865       2,403       2,412  
Total interest income     79,415       77,303       73,264       75,850       71,759       229,982       187,126  
Interest expense:                                                        
Deposits     11,036       10,010       8,218       7,931       6,219       29,264       15,127  
Subordinated notes     840       839       839       839       837       2,518       2,512  
Junior subordinated debentures     719       744       760       717       714       2,223       2,024  
Other borrowings     2,055       2,291       2,136       1,482       2,207       6,482       5,294  
Total interest expense     14,650       13,884       11,953       10,969       9,977       40,487       24,957  
Net interest income     64,765       63,419       61,311       64,881       61,782       189,495       162,169  
Provision for loan losses     2,865       3,681       1,014       1,910       6,803       7,560       14,257  
Net interest income after provision for loan losses     61,900       59,738       60,297       62,971       54,979       181,935       147,912  
Non-interest income:                                                        
Service charges on deposits     1,937       1,700       1,606       1,702       1,412       5,243       3,767  
Card income     2,015       2,071       1,844       1,999       1,877       5,930       4,515  
Net OREO gains (losses) and valuation adjustments     (56 )     148       209       37       65       301       (551 )
Net gains (losses) on sale of securities     19       14       (11 )                 22       (272 )
Fee income     1,624       1,519       1,612       1,636       1,593       4,755       3,514  
Insurance commissions     1,247       961       919       846       1,113       3,127       2,646  
Gain on sale of subsidiary                                         1,071  
Other     956       1,210       1,359       574       (1 )     3,525       1,486  
Total non-interest income     7,742       7,623       7,538       6,794       6,059       22,903       16,176  
Non-interest expense:                                                        
Salaries and employee benefits     28,717       28,120       26,439       25,586       24,695       83,276       64,626  
Occupancy, furniture and equipment     4,505       4,502       4,522       4,402       3,553       13,529       9,621  
FDIC insurance and other regulatory assessments     (2 )     303       299       184       363       600       945  
Professional fees     1,969       1,550       1,865       1,837       3,384       5,384       7,102  
Amortization of intangible assets     2,228       2,347       2,402       2,438       2,064       6,977       4,542  
Advertising and promotion     1,379       1,796       1,604       1,036       1,609       4,779       3,938  
Communications and technology     5,382       4,988       4,874       4,388       7,252       15,244       13,882  
Other     7,975       7,098       6,561       7,091       6,026       21,634       15,735  
Total non-interest expense     52,153       50,704       48,566       46,962       48,946       151,423       120,391  
Net income before income tax     17,489       16,657       19,269       22,803       12,092       53,415       43,697  
Income tax expense     3,172       3,927       4,481       4,718       2,922       11,580       10,074  
Net income   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 9,170     $ 41,835     $ 33,623  
Dividends on preferred stock                             (195 )           (578 )
Net income available to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
                                                         

Earnings per share:

    For the Three Months Ended     For the Nine Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018     2019     2018  
Basic                                                        
Net income to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
Weighted average common shares outstanding     25,621,054       26,396,351       26,679,724       26,666,554       26,178,194       26,228,499       24,159,543  
Basic earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.68     $ 0.34     $ 1.60     $ 1.37  
                                                         
Diluted                                                        
Net income to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
Dilutive effect of preferred stock                             195             578  
Net income to common stockholders - diluted   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 9,170     $ 41,835     $ 33,623  
Weighted average common shares outstanding     25,621,054       26,396,351       26,679,724       26,666,554       26,178,194       26,228,499       24,159,543  
Dilutive effects of:                                                        
Assumed conversion of Preferred A                       89,240       315,773             315,773  
Assumed conversion of Preferred B                       100,176       354,471             354,471  
Assumed exercises of stock options     60,068       59,962       64,166       76,219       90,320       61,054       86,728  
Restricted stock awards     45,631       30,110       49,795       46,457       45,796       40,572       55,087  
Restricted stock units     3,045                   1,303       7,276       57       2,706  
Performance stock units     4,673                               1,558        
Weighted average shares outstanding - diluted     25,734,471       26,486,423       26,793,685       26,979,949       26,991,830       26,331,740       24,974,308  
Diluted earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 0.34     $ 1.59     $ 1.35  
                                                         
                                                         
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:  
                                                         
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
    2019     2019     2019     2018     2018     2019     2018  
Assumed conversion of Preferred A                                          
Assumed conversion of Preferred B                                          
Stock options     67,023       70,037       50,752       51,952       51,952       67,023       51,952  
Restricted stock awards     3,209             13,290       14,513       14,513       3,209       14,513  
Restricted stock units           58,400       58,400                   54,077        
Performance stock units     55,228       70,879       58,400       59,658       59,658       55,228       59,658  
                                                         

Loans held for investment summarized as of:

...
    September 30,     June 30,     March 31,     December 31,     September 30,  
 (Dollars in thousands)   2019     2019     2019     2018