DALLAS, Oct. 20, 2021 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the third quarter of 2021.
As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance. These non-GAAP financial measures are reconciled in the section labeled “Metrics and non-GAAP financial reconciliation” at the end of this press release.
2021 Third Quarter Highlights
- For the third quarter of 2021, net income to common shareholders was $23.6 million, and diluted earnings per share were $0.94.
- Net interest income was $91.8 million.
- Non-interest income was $12.1 million.
- Non-interest expense was $72.8 million.
- Net interest margin was 6.69%. Yield on loans and the average cost of our total deposits were 7.92% and 0.16%, respectively.
- Credit loss expense for the quarter ended September 30, 2021 was a benefit of $1.2 million.
- Net charge-offs were $3.7 million, or 0.08% of average loans, for the quarter.
- We recognized a downward adjustment to third quarter interest income of $3.5 million related to certain factored receivables. The majority of this adjustment represents a timing difference for revenue that will be recognized in future periods. This adjustment will have minimal impact on subsequent quarters.
- The total dollar value of invoices purchased by Triumph Business Capital was $3.532 billion with an average invoice size of $2,300. The transportation average invoice size for the quarter was $2,195.
- TriumphPay processed 3,760,948 invoices paying carriers a total of $4.191 billion.
Balance Sheet
Total loans held for investment decreased $48.5 million, or 1.0%, during the third quarter to $4.783 billion at September 30, 2021. Average loans held for investment for the quarter decreased $27.9 million, or 0.6%, to $4.771 billion.
Total deposits were $4.823 billion at September 30, 2021, an increase of $97.1 million, or 2.1%, in the third quarter of 2021. Non-interest-bearing deposits accounted for 42% of total deposits and non-time deposits accounted for 84% of total deposits at September 30, 2021.
Asset Quality and Allowance for Credit Loss
Our nonperforming assets ratio at September 30, 2021 was 0.86%. Approximately 2 basis points of this ratio at September 30, 2021 consisted of $1.4 million of the acquired Over-Formula Advance portfolio which represents the portion that is not covered by CVLG's indemnification. An additional 32 basis points of this ratio at September 30, 2021 consisted of $19.4 million of the Misdirected Payments. Over-Formula Advances and Misdirected Payments are discussed in greater detail below.
Our past-due loan ratio at September 30, 2021 was 2.31%. Approximately 21 basis points of this ratio at September 30, 2021 consisted of $10.1 million of past due factored receivables related to the Over-Formula Advance portfolio. An additional 40 basis points of this ratio at September 30, 2021 consisted of the $19.4 million of Misdirected Payments, as discussed below.
Our ACL as a percentage of loans held for investment decreased 9 basis point during the quarter to 0.86% at September 30, 2021.
CARES Act and Paycheck Protection Program
As of September 30, 2021, our balance sheet reflected deferrals on outstanding loan balances of $32.2 million to assist customers impacted by COVID-19. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not considered troubled debt restructurings. As of September 30, 2021, these deferred balances carried accrued interest of $0.1 million.
As of September 30, 2021, we carried 815 PPP loans representing a balance of $87.4 million classified as commercial loans. We recognized $1.6 million in fees from the SBA on PPP loans during the three months ended September 30, 2021 and carry $3.6 million of deferred fees on PPP loans at quarter end. The remaining fees will be amortized over the respective lives of the loans or recognized upon forgiveness of the loans.
Items related to our July 2020 acquisition of TFS
As disclosed on our SEC Forms 8-K filed on July 8, 2020 and September 23, 2020, we acquired the transportation factoring assets of TFS, a wholly owned subsidiary of Covenant Logistics Group, Inc. ("CVLG"), and subsequently amended the terms of that transaction. There were no material developments related to that transaction that impacted our operating results for the three months ended September 30, 2021.
At September 30, 2021, the carrying value of the acquired over-formula advances was $10.1 million, the total reserve on acquired over-formula advances was $10.1 million and the balance of our indemnification asset, the value of the payment that would be due to us from CVLG in the event that these over-advances are charged off, was $4.8 million.
As of September 30, 2021 we carried a separate $19.4 million receivable (the “Misdirected Payments”) payable by the United States Postal Service (“USPS”) arising from accounts factored to the largest over-formula advance carrier. This amount is separate from the acquired Over-Formula Advances. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputes their obligation to make such payment, citing purported deficiencies in the notices delivered to them. In addition to commencing litigation against such customer, we have commenced litigation against the USPS seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. During the third quarter of 2021 we, together with the USPS, entered into a stipulation of dismissal without prejudice for our initial action with respect to this matter in United States Federal District Court and filed a new action seeking recourse from the USPS in the United States Court of Federal Claims. Based on our legal analysis and discussions with our counsel advising us on this matter, we continue to believe it is probable that we will prevail in such action and that the USPS will have the capacity to make payment on such receivable. Consequently, we have not reserved for such balance as of September 30, 2021. The full amount of such receivable is reflected in non-performing and past due factored receivables as of September 30, 2021 in accordance with our policy. As of September 30, 2021, the entire $19.4 million Misdirected Payments amount was greater than 90 days past due.
Conference Call Information
Aaron P. Graft, Vice Chairman and CEO and Brad Voss, CFO will review the quarterly results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Thursday, October 21, 2021.
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/tbk211021.html. An archive of this conference call will subsequently be available at this same location on the Company’s website.
About Triumph
Triumph Bancorp, Inc. (Nasdaq: TBK) is a financial holding company headquartered in Dallas, Texas. Triumph offers a diversified line of banking, payments, and factoring services 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; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses, including our acquisition of HubTran Inc. and developments related to our acquisition of Transport Financial Solutions and the related over-formula advances, and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.
While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2021.
Non-GAAP Financial Measures
This press release includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided at the end of this press release.
The following table sets forth key metrics used by Triumph to monitor our operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.
| As of and for the Three Months Ended | As of and for the Nine Months Ended | ||||||||||||||||||||||||||
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||||||
| Financial Highlights: | |||||||||||||||||||||||||||
| Total assets | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 | $ | 5,836,787 | $ | 6,024,535 | $ | 5,836,787 | |||||||||||||
| Loans held for investment | $ | 4,782,730 | $ | 4,831,215 | $ | 5,084,512 | $ | 4,996,776 | $ | 4,852,911 | $ | 4,782,730 | $ | 4,852,911 | |||||||||||||
| Deposits | $ | 4,822,575 | $ | 4,725,450 | $ | 4,789,665 | $ | 4,716,600 | $ | 4,248,101 | $ | 4,822,575 | $ | 4,248,101 | |||||||||||||
| Net income available to common stockholders | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 22,005 | $ | 83,929 | $ | 30,995 | |||||||||||||
| Performance Ratios - Annualized: | |||||||||||||||||||||||||||
| Return on average assets | 1.61 | % | 1.84 | % | 2.29 | % | 2.21 | % | 1.65 | % | 1.91 | % | 0.80 | % | |||||||||||||
| Return on average total equity | 11.85 | % | 14.27 | % | 18.42 | % | 17.73 | % | 13.24 | % | 14.72 | % | 6.63 | % | |||||||||||||
| Return on average common equity | 12.13 | % | 14.70 | % | 19.14 | % | 18.44 | % | 13.61 | % | 15.18 | % | 6.62 | % | |||||||||||||
| Return on average tangible common equity (1) | 19.21 | % | 20.92 | % | 26.19 | % | 25.70 | % | 19.43 | % | 22.12 | % | 9.51 | % | |||||||||||||
| Yield on loans(2) | 7.92 | % | 7.77 | % | 7.24 | % | 7.20 | % | 7.05 | % | 7.65 | % | 6.92 | % | |||||||||||||
| Cost of interest bearing deposits | 0.27 | % | 0.31 | % | 0.41 | % | 0.54 | % | 0.79 | % | 0.33 | % | 1.07 | % | |||||||||||||
| Cost of total deposits | 0.16 | % | 0.20 | % | 0.28 | % | 0.38 | % | 0.56 | % | 0.21 | % | 0.79 | % | |||||||||||||
| Cost of total funds | 0.38 | % | 0.34 | % | 0.42 | % | 0.51 | % | 0.67 | % | 0.38 | % | 0.90 | % | |||||||||||||
| Net interest margin(2) | 6.69 | % | 6.47 | % | 6.06 | % | 6.20 | % | 5.83 | % | 6.41 | % | 5.52 | % | |||||||||||||
| Net non-interest expense to average assets | 4.00 | % | 3.75 | % | 3.14 | % | 2.54 | % | 3.23 | % | 3.63 | % | 3.14 | % | |||||||||||||
| Adjusted net non-interest expense to average assets (1) | 4.00 | % | 3.55 | % | 3.14 | % | 2.54 | % | 3.17 | % | 3.57 | % | 3.37 | % | |||||||||||||
| Efficiency ratio | 70.13 | % | 67.96 | % | 62.57 | % | 55.95 | % | 65.15 | % | 66.98 | % | 68.07 | % | |||||||||||||
| Adjusted efficiency ratio (1) | 70.13 | % | 65.09 | % | 62.57 | % | 55.95 | % | 64.18 | % | 66.00 | % | 70.61 | % | |||||||||||||
| Asset Quality:(3) | |||||||||||||||||||||||||||
| Past due to total loans | 2.31 | % | 2.28 | % | 1.96 | % | 3.22 | % | 2.40 | % | 2.31 | % | 2.40 | % | |||||||||||||
| Non-performing loans to total loans | 0.90 | % | 1.06 | % | 1.17 | % | 1.16 | % | 1.17 | % | 0.90 | % | 1.17 | % | |||||||||||||
| Non-performing assets to total assets | 0.86 | % | 0.97 | % | 1.15 | % | 1.15 | % | 1.52 | % | 0.86 | % | 1.52 | % | |||||||||||||
| ACL to non-performing loans | 95.75 | % | 88.92 | % | 80.87 | % | 164.98 | % | 159.67 | % | 95.75 | % | 159.67 | % | |||||||||||||
| ACL to total loans | 0.86 | % | 0.95 | % | 0.94 | % | 1.92 | % | 1.88 | % | 0.86 | % | 1.88 | % | |||||||||||||
| Net charge-offs to average loans | 0.08 | % | 0.01 | % | 0.85 | % | 0.03 | % | 0.02 | % | 0.94 | % | 0.08 | % | |||||||||||||
| Capital: | |||||||||||||||||||||||||||
| Tier 1 capital to average assets(4) | 10.43 | % | 9.73 | % | 10.89 | % | 10.80 | % | 10.75 | % | 10.43 | % | 10.75 | % | |||||||||||||
| Tier 1 capital to risk-weighted assets(4) | 11.06 | % | 10.33 | % | 11.28 | % | 10.60 | % | 10.32 | % | 11.06 | % | 10.32 | % | |||||||||||||
| Common equity tier 1 capital to risk-weighted assets(4) | 9.45 | % | 8.74 | % | 9.72 | % | 9.05 | % | 8.72 | % | 9.45 | % | 8.72 | % | |||||||||||||
| Total capital to risk-weighted assets | 13.69 | % | 12.65 | % | 13.58 | % | 13.03 | % | 12.94 | % | 13.69 | % | 12.94 | % | |||||||||||||
| Total equity to total assets | 13.62 | % | 13.17 | % | 12.53 | % | 12.24 | % | 11.89 | % | 13.62 | % | 11.89 | % | |||||||||||||
| Tangible common stockholders' equity to tangible assets(1) | 8.63 | % | 8.04 | % | 8.98 | % | 8.56 | % | 8.09 | % | 8.63 | % | 8.09 | % | |||||||||||||
| Per Share Amounts: | |||||||||||||||||||||||||||
| Book value per share | $ | 30.87 | $ | 29.76 | $ | 28.90 | $ | 27.42 | $ | 26.11 | $ | 30.87 | $ | 26.11 | |||||||||||||
| Tangible book value per share (1) | $ | 19.73 | $ | 18.35 | $ | 21.34 | $ | 19.78 | $ | 18.38 | $ | 19.73 | $ | 18.38 | |||||||||||||
| Basic earnings (loss) per common share | $ | 0.95 | $ | 1.10 | $ | 1.34 | $ | 1.27 | $ | 0.89 | $ | 3.40 | $ | 1.28 | |||||||||||||
| Diluted earnings (loss) per common share | $ | 0.94 | $ | 1.08 | $ | 1.32 | $ | 1.25 | $ | 0.89 | $ | 3.33 | $ | 1.27 | |||||||||||||
| Adjusted diluted earnings per common share(1) | $ | 0.94 | $ | 1.17 | $ | 1.32 | $ | 1.25 | $ | 0.91 | $ | 3.42 | $ | 0.99 | |||||||||||||
| Shares outstanding end of period | 25,123,342 | 25,109,703 | 24,882,929 | 24,868,218 | 24,851,601 | 25,123,342 | 24,851,601 | ||||||||||||||||||||
Unaudited consolidated balance sheet as of:
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | ||||||||||||||
| ASSETS | |||||||||||||||||||
| Total cash and cash equivalents | $ | 532,764 | $ | 444,439 | $ | 380,811 | $ | 314,393 | $ | 288,278 | |||||||||
| Securities - available for sale | 164,816 | 193,627 | 205,330 | 224,310 | 242,802 | ||||||||||||||
| Securities - held to maturity, net | 5,488 | 5,658 | 5,828 | 5,919 | 6,096 | ||||||||||||||
| Equity securities | 5,623 | 5,854 | 5,826 | 5,826 | 6,040 | ||||||||||||||
| Loans held for sale | 26,437 | 31,136 | 22,663 | 24,546 | 36,716 | ||||||||||||||
| Loans held for investment | 4,782,730 | 4,831,215 | 5,084,512 | 4,996,776 | 4,852,911 | ||||||||||||||
| Allowance for credit losses | (41,017 | ) | (45,694 | ) | (48,024 | ) | (95,739 | ) | (90,995 | ) | |||||||||
| Loans, net | 4,741,713 | 4,785,521 | 5,036,488 | 4,901,037 | 4,761,916 | ||||||||||||||
| FHLB and other restricted stock | 4,901 | 8,096 | 9,807 | 6,751 | 18,464 | ||||||||||||||
| Premises and equipment, net | 104,311 | 106,720 | 105,390 | 103,404 | 105,455 | ||||||||||||||
| Other real estate owned ("OREO"), net | 893 | 1,013 | 1,421 | 1,432 | 1,704 | ||||||||||||||
| Goodwill and intangible assets, net | 280,055 | 286,567 | 188,006 | 189,922 | 192,041 | ||||||||||||||
| Bank-owned life insurance | 41,540 | 41,912 | 41,805 | 41,608 | 41,440 | ||||||||||||||
| Deferred tax asset, net | — | — | 1,260 | 6,427 | 7,716 | ||||||||||||||
| Indemnification asset | 4,786 | 5,246 | 5,246 | 36,225 | 31,218 | ||||||||||||||
| Other assets | 111,208 | 100,088 | 89,747 | 73,991 | 96,901 | ||||||||||||||
| Total assets | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 | $ | 5,836,787 | |||||||||
| LIABILITIES | |||||||||||||||||||
| Non-interest bearing deposits | $ | 2,020,984 | $ | 1,803,552 | $ | 1,637,653 | $ | 1,352,785 | $ | 1,315,900 | |||||||||
| Interest bearing deposits | 2,801,591 | 2,921,898 | 3,152,012 | 3,363,815 | 2,932,201 | ||||||||||||||
| Total deposits | 4,822,575 | 4,725,450 | 4,789,665 | 4,716,600 | 4,248,101 | ||||||||||||||
| Customer repurchase agreements | 11,990 | 9,243 | 2,668 | 3,099 | 14,192 | ||||||||||||||
| Federal Home Loan Bank advances | 30,000 | 130,000 | 180,000 | 105,000 | 435,000 | ||||||||||||||
| Payment Protection Program Liquidity Facility | 97,554 | 139,673 | 158,796 | 191,860 | 223,713 | ||||||||||||||
| Subordinated notes | 106,755 | 87,620 | 87,564 | 87,509 | 87,455 | ||||||||||||||
| Junior subordinated debentures | 40,467 | 40,333 | 40,201 | 40,072 | 39,944 | ||||||||||||||
| Deferred tax liability, net | 982 | 3,333 | — | — | — | ||||||||||||||
| Other liabilities | 93,538 | 87,837 | 76,730 | 64,870 | 94,540 | ||||||||||||||
| Total liabilities | 5,203,861 | 5,223,489 | 5,335,624 | 5,209,010 | 5,142,945 | ||||||||||||||
| EQUITY | |||||||||||||||||||
| Preferred Stock | 45,000 | 45,000 | 45,000 | 45,000 | 45,000 | ||||||||||||||
| Common stock | 282 | 282 | 280 | 280 | 279 | ||||||||||||||
| Additional paid-in-capital | 499,282 | 494,224 | 490,699 | 489,151 | 488,094 | ||||||||||||||
| Treasury stock, at cost | (104,600 | ) | (104,486 | ) | (103,059 | ) | (103,052 | ) | (102,942 | ) | |||||||||
| Retained earnings | 373,512 | 349,885 | 322,705 | 289,583 | 258,254 | ||||||||||||||
| Accumulated other comprehensive income (loss) | 7,198 | 7,483 | 8,379 | 5,819 | 5,157 | ||||||||||||||
| Total stockholders' equity | 820,674 | 792,388 | 764,004 | 726,781 | 693,842 | ||||||||||||||
| Total liabilities and equity | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 | $ | 5,836,787 | |||||||||
Unaudited consolidated statement of income:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||
| Loans, including fees | $ | 44,882 | $ | 45,988 | $ | 48,706 | $ | 50,723 | $ | 48,774 | $ | 139,576 | $ | 147,491 | |||||||||||||
| Factored receivables, including fees | 50,516 | 47,328 | 37,795 | 37,573 | 31,468 | 135,639 | 76,861 | ||||||||||||||||||||
| Securities | 1,126 | 1,187 | 1,650 | 1,519 | 1,927 | 3,963 | 6,710 | ||||||||||||||||||||
| FHLB and other restricted stock | 28 | 27 | 76 | 56 | 122 | 131 | 474 | ||||||||||||||||||||
| Cash deposits | 183 | 158 | 126 | 68 | 73 | 467 | 640 | ||||||||||||||||||||
| Total interest income | 96,735 | 94,688 | 88,353 | 89,939 | 82,364 | 279,776 | 232,176 | ||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||
| Deposits | 1,948 | 2,470 | 3,372 | 4,308 | 5,834 | 7,790 | 23,095 | ||||||||||||||||||||
| Subordinated notes | 2,449 | 1,350 | 1,349 | 1,347 | 1,348 | 5,148 | 4,016 | ||||||||||||||||||||
| Junior subordinated debentures | 443 | 446 | 442 | 452 | 462 | 1,331 | 1,662 | ||||||||||||||||||||
| Other borrowings | 124 | 140 | 170 | 234 | 341 | 434 | 2,273 | ||||||||||||||||||||
| Total interest expense | 4,964 | 4,406 | 5,333 | 6,341 | 7,985 | 14,703 | 31,046 | ||||||||||||||||||||
| Net interest income | 91,771 | 90,282 | 83,020 | 83,598 | 74,379 | 265,073 | 201,130 | ||||||||||||||||||||
| Credit loss expense (benefit) | (1,187 | ) | (1,806 | ) | (7,845 | ) | 4,680 | (258 | ) | (10,838 | ) | 33,649 | |||||||||||||||
| Net interest income after credit loss expense (benefit) | 92,958 | 92,088 | 90,865 | 78,918 | 74,637 | 275,911 | 167,481 | ||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||
| Service charges on deposits | 2,030 | 1,857 | 1,787 | 1,643 | 1,470 | 5,674 | 3,631 | ||||||||||||||||||||
| Card income | 2,144 | 2,225 | 1,972 | 1,949 | 2,091 | 6,341 | 5,832 | ||||||||||||||||||||
| Net OREO gains (losses) and valuation adjustments | (9 | ) | (287 | ) | (80 | ) | (217 | ) | (41 | ) | (376 | ) | (399 | ) | |||||||||||||
| Net gains (losses) on sale of securities | 4 | 1 | — | 16 | 3,109 | 5 | 3,210 | ||||||||||||||||||||
| Fee income | 5,198 | 4,470 | 2,249 | 1,615 | 1,402 | 11,917 | 4,392 | ||||||||||||||||||||
| Insurance commissions | 1,231 | 1,272 | 1,486 | 1,327 | 990 | 3,989 | 2,905 | ||||||||||||||||||||
| Gain on sale of subsidiary | — | — | — | — | — | — | 9,758 | ||||||||||||||||||||
| Other | 1,457 | 4,358 | 6,877 | 16,053 | 1,472 | 12,692 | 8,670 | ||||||||||||||||||||
| Total non-interest income | 12,055 | 13,896 | 14,291 | 22,386 | 10,493 | 40,242 | 37,999 | ||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||
| Salaries and employee benefits | 43,769 | 41,658 | 35,980 | 33,798 | 31,651 | 121,407 | 93,177 | ||||||||||||||||||||
| Occupancy, furniture and equipment | 6,388 | 6,112 | 5,779 | 7,046 | 5,574 | 18,279 | 15,720 | ||||||||||||||||||||
| FDIC insurance and other regulatory assessments | 353 | 500 | 977 | 350 | 360 | 1,830 | 1,170 | ||||||||||||||||||||
| Professional fees | 2,362 | 5,052 | 2,545 | 2,326 | 3,265 | 9,959 | 7,023 | ||||||||||||||||||||
| Amortization of intangible assets | 3,274 | 2,428 | 1,975 | 2,065 | 2,141 | 7,677 | 6,265 | ||||||||||||||||||||
| Advertising and promotion | 1,403 | 1,241 | 890 | 1,170 | 1,105 | 3,534 | 3,548 | ||||||||||||||||||||
| Communications and technology | 7,090 | 6,028 | 5,900 | 5,639 | 5,569 | 19,018 | 16,514 | ||||||||||||||||||||
| Other | 8,174 | 7,779 | 6,846 | 6,904 | 5,632 | 22,799 | 19,359 | ||||||||||||||||||||
| Total non-interest expense | 72,813 | 70,798 | 60,892 | 59,298 | 55,297 | 204,503 | 162,776 | ||||||||||||||||||||
| Net income before income tax | 32,200 | 35,186 | 44,264 | 42,006 | 29,833 | 111,650 | 42,704 | ||||||||||||||||||||
| Income tax expense | 7,771 | 7,204 | 10,341 | 9,876 | 6,929 | 25,316 | 10,810 | ||||||||||||||||||||
| Net income | $ | 24,429 | $ | 27,982 | $ | 33,923 | $ | 32,130 | $ | 22,904 | $ | 86,334 | $ | 31,894 | |||||||||||||
| Dividends on preferred stock | (802 | ) | (802 | ) | (801 | ) | (802 | ) | (899 | ) | (2,405 | ) | (899 | ) | |||||||||||||
| Net income available to common stockholders | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 22,005 | $ | 83,929 | $ | 30,995 | |||||||||||||
Earnings per share:
| For the Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||
| Net income to common stockholders | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 22,005 | $ | 83,929 | $ | 30,995 | |||||||||||||
| Weighted average common shares outstanding | 24,759,419 | 24,724,128 | 24,675,109 | 24,653,099 | 24,592,092 | 24,719,861 | 24,298,897 | ||||||||||||||||||||
| Basic earnings per common share | $ | 0.95 | $ | 1.10 | $ | 1.34 | $ | 1.27 | $ | 0.89 | $ | 3.40 | $ | 1.28 | |||||||||||||
| Diluted | |||||||||||||||||||||||||||
| Net income to common stockholders - diluted | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 22,005 | $ | 83,929 | $ | 30,995 | |||||||||||||
| Weighted average common shares outstanding | 24,759,419 | 24,724,128 | 24,675,109 | 24,653,099 | 24,592,092 | 24,719,861 | 24,298,897 | ||||||||||||||||||||
| Dilutive effects of: | |||||||||||||||||||||||||||
| Assumed exercises of stock options | 121,110 | 134,358 | 130,016 | 101,664 | 48,102 | 129,149 | 53,232 | ||||||||||||||||||||
| Restricted stock awards | 141,204 | 139,345 | 169,514 | 136,239 | 67,907 | 146,172 | 65,893 | ||||||||||||||||||||
| Restricted stock units | 74,268 | 73,155 | 66,714 | 50,156 | 18,192 | 71,620 | 15,198 | ||||||||||||||||||||
| Performance stock units - market based | 131,346 | 134,313 | 128,167 | 112,228 | 76,095 | 131,275 | 30,995 | ||||||||||||||||||||
| Performance stock units - performance based | — | — | — | — | — | — | — | ||||||||||||||||||||
| Employee stock purchase plan | 616 | 3,708 | 1,418 | — | — | 1,914 | — | ||||||||||||||||||||
| Weighted average shares outstanding - diluted | 25,227,963 | 25,209,007 | 25,170,938 | 25,053,386 | 24,802,388 | 25,199,991 | 24,464,215 | ||||||||||||||||||||
| Diluted earnings per common share | $ | 0.94 | $ | 1.08 | $ | 1.32 | $ | 1.25 | $ | 0.89 | $ | 3.33 | $ | 1.27 | |||||||||||||
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
| For the Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||
| Stock options | 16,939 | 16,939 | — | — | 98,513 | 16,939 | 98,513 | |||||||||||||
| Restricted stock awards | — | — | — | — | — | 195,640 | — | |||||||||||||
| Restricted stock units | — | — | — | — | — | 17,757 | — | |||||||||||||
| Performance stock units - market based | 12,020 | 13,520 | — | — | — | 12,020 | — | |||||||||||||
| Performance stock units - performance based | 259,383 | 265,625 | 256,625 | 256,625 | 261,125 | 259,383 | 261,125 | |||||||||||||
| Employee stock purchase plan | — | — | — | — | — | — | — | |||||||||||||
Loans held for investment summarized as of:
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | ||||||||||||||
| Commercial real estate | $ | 630,106 | $ | 701,576 | $ | 784,110 | $ | 779,158 | $ | 762,531 | |||||||||
| Construction, land development, land | 171,814 | 185,444 | 223,841 | 219,647 | 244,512 | ||||||||||||||
| 1-4 family residential properties | 127,073 | 135,288 | 142,859 | 157,147 | 164,785 | ||||||||||||||
| Farmland | 82,990 | 91,122 | 97,835 | 103,685 | 110,966 | ||||||||||||||
| Commercial | 1,398,497 | 1,453,583 | 1,581,125 | 1,562,957 | 1,536,903 | ||||||||||||||
| Factored receivables | 1,607,028 | 1,398,299 | 1,208,718 | 1,120,770 | 1,016,337 | ||||||||||||||
| Consumer | 12,677 | 12,389 | 14,332 | 15,838 | 17,106 | ||||||||||||||
| Mortgage warehouse | 752,545 | 853,514 | 1,031,692 | 1,037,574 | 999,771 | ||||||||||||||
| Total loans | $ | 4,782,730 | $ | 4,831,215 | $ | 5,084,512 | $ | 4,996,776 | $ | 4,852,911 | |||||||||
Our banking loan portfolio consists of traditional community bank loans as well as commercial finance product lines focused on businesses that require specialized financial solutions and national lending product lines that further diversify our lending operations.
Banking loans held for investment are further summarized below:
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | ||||||||||||||
| Commercial real estate | $ | 630,106 | $ | 701,576 | $ | 784,110 | $ | 779,158 | $ | 762,531 | |||||||||
| Construction, land development, land | 171,814 | 185,444 | 223,841 | 219,647 | 244,512 | ||||||||||||||
| 1-4 family residential | 127,073 | 135,288 | 142,859 | 157,147 | 164,785 | ||||||||||||||
| Farmland | 82,990 | 91,122 | 97,835 | 103,685 | 110,966 | ||||||||||||||
| Commercial - General | 289,242 | 290,562 | 288,458 | 340,850 | 342,858 | ||||||||||||||
| Commercial - Paycheck Protection Program | 87,413 | 135,307 | 237,299 | 189,857 | 223,230 | ||||||||||||||
| Commercial - Agriculture | 77,263 | 76,346 | 83,859 | 94,572 | 112,221 | ||||||||||||||
| Commercial - Equipment | 588,105 | 604,396 | 623,248 | 573,163 | 509,849 | ||||||||||||||
| Commercial - Asset-based lending | 213,927 | 181,394 | 188,825 | 180,488 | 160,711 | ||||||||||||||
| Commercial - Liquid Credit | 142,547 | 165,578 | 159,436 | 184,027 | 188,034 | ||||||||||||||
| Consumer | 12,677 | 12,389 | 14,332 | 15,838 | 17,106 | ||||||||||||||
| Mortgage Warehouse | 752,545 | 853,514 | 1,031,692 | 1,037,574 | 999,771 | ||||||||||||||
| Total banking loans held for investment | $ | 3,175,702 | $ | 3,432,916 | $ | 3,875,794 | $ | 3,876,006 | $ | 3,836,574 | |||||||||
The following table presents the Company’s operating segments:
| (Dollars in thousands) | ||||||||||||||||||||
| Three months ended September 30, 2021 | Banking | Factoring | Payments | Corporate | Consolidated | |||||||||||||||
| Total interest income | $ | 46,175 | $ | 47,222 | $ | 3,295 | $ | 43 | $ | 96,735 | ||||||||||
| Intersegment interest allocations | 2,452 | (2,341 | ) | (111 | ) | — | — | |||||||||||||
| Total interest expense | 2,073 | — | — | 2,891 | 4,964 | |||||||||||||||
| Net interest income (expense) | 46,554 | 44,881 | 3,184 | (2,848 | ) | 91,771 | ||||||||||||||
| Credit loss expense (benefit) | (2,399 | ) | 1,164 | 38 | 10 | (1,187 | ) | |||||||||||||
| Net interest income after credit loss expense | 48,953 | 43,717 | 3,146 | (2,858 | ) | 92,958 | ||||||||||||||
| Noninterest income | 7,371 | 1,557 | 3,086 | 41 | 12,055 | |||||||||||||||
| Noninterest expense | 41,183 | 19,106 | 11,416 | 1,108 | 72,813 | |||||||||||||||
| Operating income (loss) | $ | 15,141 | $ | 26,168 | $ | (5,184 | ) | $ | (3,925 | ) | $ | 32,200 | ||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Three months ended June 30, 2021 | Banking | Factoring | Payments | Corporate | Consolidated | |||||||||||||||
| Total interest income | $ | 47,356 | $ | 44,653 | $ | 2,675 | $ | 4 | $ | 94,688 | ||||||||||
| Intersegment interest allocations | 2,723 | (2,584 | ) | (139 | ) | — | — | |||||||||||||
| Total interest expense | 2,610 | — | — | 1,796 | 4,406 | |||||||||||||||
| Net interest income (expense) | 47,469 | 42,069 | 2,536 | (1,792 | ) | 90,282 | ||||||||||||||
| Credit loss expense (benefit) | (4,335 | ) | 2,444 | 218 | (133 | ) | (1,806 | ) | ||||||||||||
| Net interest income after credit loss expense | 51,804 | 39,625 | 2,318 | (1,659 | ) | 92,088 | ||||||||||||||
| Noninterest income | 10,018 | 2,742 | 1,083 | 53 | 13,896 | |||||||||||||||
| Noninterest expense | 41,860 | 17,174 | 10,842 | 922 | 70,798 | |||||||||||||||
| Operating income (loss) | $ | 19,962 | $ | 25,193 | $ | (7,441 | ) | $ | (2,528 | ) | $ | 35,186 | ||||||||
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:
| September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | |||||||||||||||
| Factored receivable period end balance | $ | 1,479,989,000 | $ | 1,284,314,000 | $ | 1,118,988,000 | $ | 1,036,548,000 | $ | 953,434,000 | |||||||||
| Yield on average receivable balance | 13.75 | % | 14.99 | % | 13.85 | % | 13.80 | % | 15.59 | % | |||||||||
| Current quarter charge-off rate(1) | 0.24 | % | 0.04 | % | 3.95 | % | 0.02 | % | 0.09 | % | |||||||||
| Factored receivables - transportation concentration | 90 | % | 91 | % | 90 | % | 89 | % | 88 | % | |||||||||
| Interest income, including fees | $ | 47,222,000 | $ | 44,653,000 | $ | 35,824,000 | $ | 35,439,000 | $ | 30,068,000 | |||||||||
| Non-interest income(2) | 1,557,000 | 2,742,000 | 1,757,000 | 1,358,000 | 1,157,000 | ||||||||||||||
| Factored receivable total revenue | 48,779,000 | 47,395,000 | 37,581,000 | 36,797,000 | 31,225,000 | ||||||||||||||
| Average net funds employed | 1,235,610,000 | 1,072,405,000 | 936,528,000 | 924,899,000 | 694,170,000 | ||||||||||||||
| Yield on average net funds employed | 15.66 | % | 17.73 | % | 16.27 | % | 15.83 | % | 17.89 | % | |||||||||
| Accounts receivable purchased | $ | 3,531,811,000 | $ | 3,068,262,000 | $ | 2,492,468,000 | $ | 2,461,249,000 | $ | 1,984,490,000 | |||||||||
| Number of invoices purchased | 1,535,321 | 1,401,695 | 1,188,678 | 1,189,271 | 1,027,839 | ||||||||||||||
| Average invoice size | $ | 2,300 | $ | 2,189 | $ | 2,097 | $ | 2,070 | $ | 1,931 | |||||||||
| Average invoice size - transportation | $ | 2,195 | $ | 2,090 | $ | 1,974 | $ | 1,943 | $ | 1,787 | |||||||||
| Average invoice size - non-transportation | $ | 4,944 | $ | 4,701 | $ | 4,775 | $ | 5,091 | $ | 5,181 | |||||||||
| (1) | March 31, 2021 includes a $41.3 million charge-off related to the TFS acquisition, which contributed approximately 3.94% to the net charge-off rate for the quarter. |
| (2) | Total factoring segment non-interest income was $6.4 million, $15.5 million, and $3.2 million for the three months ended March 31, 2021, December 31, 2020 and September 30, 2020. |
| March 31, 2021 non-interest income used to calculate yield on average net funds employed excludes a $4.7 million gain on our indemnification asset. | |
| December 31, 2020 non-interest income used to calculate yield on average net funds employed excludes a gain of $8.9 million related to CVLG’s delivery of proceeds resulting from the liquidation of its acquired stock and a $5.3 million gain on our indemnification asset. | |
| September 30, 2020 non-interest income used to calculate yield on average net funds employed excludes a $2.0 million gain recognized on the increased value of the receivable due from CVLG resulting from the amended TFS acquisition agreement. | |
Information pertaining to our payments segment, which includes only our TriumphPay division, summarized as of and for the quarters ended:
| September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | |||||||||||||||
| Factored receivable period end balance | $ | 127,039,000 | $ | 113,985,000 | $ | 89,730,000 | $ | 84,222,000 | $ | 62,903,000 | |||||||||
| Interest income | $ | 3,295,000 | $ | 2,675,000 | $ | 1,969,000 | $ | 2,034,000 | $ | 1,361,000 | |||||||||
| Noninterest income | 3,086,000 | 1,083,000 | 73,000 | 51,000 | 47,000 | ||||||||||||||
| Total revenue | $ | 6,381,000 | $ | 3,758,000 | $ | 2,042,000 | $ | 2,085,000 | $ | 1,408,000 | |||||||||
| Pre-tax operating income (loss) | $ | (5,184,000 | ) | $ | (7,441,000 | ) | $ | (2,552,000 | ) | $ | (2,026,000 | ) | $ | (1,936,000 | ) | ||||
| Interest expense | 111,000 | 139,000 | 167,000 | 178,000 | 147,000 | ||||||||||||||
| Depreciation and software amortization expense | 77,000 | 68,000 | 65,000 | 63,000 | 63,000 | ||||||||||||||
| Intangible amortization expense | 1,490,000 | 497,000 | — | — | — | ||||||||||||||
| Earnings (losses) before interest, taxes, depreciation, and amortization | $ | (3,506,000 | ) | $ | (6,737,000 | ) | $ | (2,320,000 | ) | $ | (1,785,000 | ) | $ | (1,726,000 | ) | ||||
| Transaction costs | — | 2,992,000 | — | — | — | ||||||||||||||
| Adjusted earnings (losses) before interest, taxes, depreciation, and amortization(1) | $ | (3,506,000 | ) | $ | (3,745,000 | ) | $ | (2,320,000 | ) | $ | (1,785,000 | ) | $ | (1,726,000 | ) | ||||
| Number of invoices processed | 3,760,948 | 3,165,119 | 2,529,673 | 1,818,145 | 1,408,232 | ||||||||||||||
| Amount of payments processed | $ | 4,191,424,000 | $ | 3,426,808,000 | $ | 2,301,632,000 | $ | 1,920,037,000 | $ | 1,221,305,000 | |||||||||
(1) Adjusted earnings (losses) before interest, taxes, depreciation, and amortization excludes material gains and expenses related to merger and acquisition-related activities and is a non-GAAP financial measure used to provide meaningful supplemental information regarding the segment's operational performance and to enhance investors' overall understanding of such financial performance by removing the volatility associated with certain acquisition-related items that are unrelated to our core business.
Deposits summarized as of:
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | ||||||||||||||
| Non-interest bearing demand | $ | 2,020,984 | $ | 1,803,552 | $ | 1,637,653 | $ | 1,352,785 | $ | 1,315,900 | |||||||||
| Interest bearing demand | 795,234 | 760,874 | 729,364 | 688,680 | 634,272 | ||||||||||||||
| Individual retirement accounts | 86,012 | 87,052 | 89,748 | 92,584 | 94,933 | ||||||||||||||
| Money market | 472,242 | 395,035 | 402,070 | 393,325 | 384,476 | ||||||||||||||
| Savings | 483,946 | 474,163 | 464,035 | 421,488 | 405,954 | ||||||||||||||
| Certificates of deposit | 574,539 | 612,730 | 740,694 | 790,844 | 857,514 | ||||||||||||||
| Brokered time deposits | 117,064 | 306,975 | 516,006 | 516,786 | 344,986 | ||||||||||||||
| Other brokered deposits | 272,554 | 285,069 | 210,095 | 460,108 | 210,066 | ||||||||||||||
| Total deposits | $ | 4,822,575 | $ | 4,725,450 | $ | 4,789,665 | $ | 4,716,600 | $ | 4,248,101 | |||||||||
Net interest margin summarized for the three months ended:
| September 30, 2021 | June 30, 2021 | ||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||||||
| Interest earning assets: | |||||||||||||||||||||
| Interest earning cash balances | $ | 474,122 | $ | 183 | 0.15 | % | $ | 572,485 | $ | 158 | 0.11 | % | |||||||||
| Taxable securities | 154,017 | 948 | 2.44 | % | 165,786 | 967 | 2.34 | % | |||||||||||||
| Tax-exempt securities | 27,839 | 178 | 2.54 | % | 33,451 | 220 | 2.64 | % | |||||||||||||
| FHLB and other restricted stock | 7,956 | 28 | 1.40 | % | 9,518 | 27 | 1.14 | % | |||||||||||||
| Loans | 4,777,409 | 95,398 | 7.92 | % | 4,814,050 | 93,316 | 7.77 | % | |||||||||||||
| Total interest earning assets | $ | 5,441,343 | $ | 96,735 | 7.05 | % | $ | 5,595,290 | $ | 94,688 | 6.79 | % | |||||||||
| Non-interest earning assets: | |||||||||||||||||||||
| Other assets | 579,288 | 498,515 | |||||||||||||||||||
| Total assets | $ | 6,020,631 | $ | 6,093,805 | |||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Interest bearing demand | $ | 779,625 | $ | 435 | 0.22 | % | $ | 757,529 | $ | 469 | 0.25 | % | |||||||||
| Individual retirement accounts | 86,571 | 126 | 0.58 | % | 88,142 | 143 | 0.65 | % | |||||||||||||
| Money market | 417,435 | 225 | 0.21 | % | 398,290 | 216 | 0.22 | % | |||||||||||||
| Savings | 479,915 | 185 | 0.15 | % | 468,517 | 178 | 0.15 | % | |||||||||||||
| Certificates of deposit | 595,001 | 725 | 0.48 | % | 664,478 | 1,157 | 0.70 | % | |||||||||||||
| Brokered time deposits | 99,116 | 29 | 0.12 | % | 138,102 | 51 | 0.15 | % | |||||||||||||
| Other brokered deposits | 441,446 | 223 | 0.20 | % | 685,397 | 256 | 0.15 | % | |||||||||||||
| Total interest bearing deposits | 2,899,109 | 1,948 | 0.27 | % | 3,200,455 | 2,470 | 0.31 | % | |||||||||||||
| Federal Home Loan Bank advances | 36,522 | 22 | 0.24 | % | 39,341 | 22 | 0.22 | % | |||||||||||||
| Subordinated notes | 114,071 | 2,449 | 8.52 | % | 87,590 | 1,350 | 6.18 | % | |||||||||||||
| Junior subordinated debentures | 40,390 | 443 | 4.35 | % | 40,251 | 446 | 4.44 | % | |||||||||||||
| Other borrowings | 127,946 | 102 | 0.32 | % | 138,649 | 118 | 0.34 | % | |||||||||||||
| Total interest bearing liabilities | $ | 3,218,038 | $ | 4,964 | 0.61 | % | $ | 3,506,286 | $ | 4,406 | 0.50 | % | |||||||||
| Non-interest bearing liabilities and equity: | |||||||||||||||||||||
| Non-interest bearing demand deposits | 1,912,398 | 1,749,858 | |||||||||||||||||||
| Other liabilities | 72,173 | 51,257 | |||||||||||||||||||
| Total equity | 818,022 | 786,404 | |||||||||||||||||||
| Total liabilities and equity | $ | 6,020,631 | $ | 6,093,805 | |||||||||||||||||
| Net interest income | $ | 91,771 | $ | 90,282 | |||||||||||||||||
| Interest spread | 6.44 | % | 6.29 | % | |||||||||||||||||
| Net interest margin | 6.69 | % | 6.47 | % | |||||||||||||||||
Loan balance totals include respective nonaccrual assets.
Net interest spread is the yield on average interest earning assets less the rate on interest bearing liabilities.
Net interest margin is the ratio of net interest income to average interest earning assets.
Average rates have been annualized.
Additional information pertaining to our loan portfolio, including loans held for investment and loans held for sale, summarized for the quarters ended:
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | ||||||||||||||
| Average Banking loans | $ | 3,299,152 | $ | 3,516,747 | $ | 3,722,895 | $ | 3,777,553 | $ | 3,707,293 | |||||||||
| Average Factoring receivables | 1,362,856 | 1,195,209 | 1,048,968 | 1,024,307 | 768,087 | ||||||||||||||
| Average Payments receivables | 115,401 | 102,094 | 76,412 | 74,947 | 50,683 | ||||||||||||||
| Average total loans | $ | 4,777,409 | $ | 4,814,050 | $ | 4,848,275 | $ | 4,876,807 | $ | 4,526,063 | |||||||||
| Banking yield | 5.40 | % | 5.25 | % | 5.31 | % | 5.34 | % | 5.23 | % | |||||||||
| Factoring yield | 13.75 | % | 14.99 | % | 13.85 | % | 13.80 | % | 15.59 | % | |||||||||
| Payments Yield | 11.33 | % | 10.51 | % | 10.45 | % | 10.80 | % | 10.68 | % | |||||||||
| Total loan yield | 7.92 | % | 7.77 | % | 7.24 | % | 7.20 | % | 7.05 | % | |||||||||
Metrics and non-GAAP financial reconciliation:
| As of and for the Three Months Ended | As of and for the Nine Months Ended | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||||||||||||||
| Net income available to common stockholders | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 22,005 | $ | 83,929 | $ | 30,995 | |||||||||||||||||||||
| Transaction costs | — | 2,992 | — | — | 827 | 2,992 | 827 | ||||||||||||||||||||||||||||
| Gain on sale of subsidiary or division | — | — | — | — | — | — | (9,758 | ) | |||||||||||||||||||||||||||
| Tax effect of adjustments | — | (715 | ) | — | — | (197 | ) | (715 | ) | 2,254 | |||||||||||||||||||||||||
| Adjusted net income available to common stockholders - diluted | $ | 23,627 | $ | 29,457 | $ | 33,122 | $ | 31,328 | $ | 22,635 | $ | 86,206 | $ | 24,318 | |||||||||||||||||||||
| Weighted average shares outstanding - diluted | 25,227,963 | 25,209,007 | 25,170,938 | 25,053,386 | 24,802,388 | 25,199,991 | 24,464,215 | ||||||||||||||||||||||||||||
| Adjusted diluted earnings per common share | $ | 0.94 | $ | 1.17 | $ | 1.32 | $ | 1.25 | $ | 0.91 | $ | 3.42 | $ | 0.99 | |||||||||||||||||||||
| Average total stockholders' equity | $ | 818,022 | $ | 786,404 | $ | 746,849 | $ | 720,892 | $ | 688,327 | $ | 784,019 | $ | 642,151 | |||||||||||||||||||||
| Average preferred stock liquidation preference | (45,000 | ) | (45,000 | ) | (45,000 | ) | (45,000 | ) | (45,000 | ) | (45,000 | ) | (17,080 | ) | |||||||||||||||||||||
| Average total common stockholders' equity | 773,022 | 741,404 | 701,849 | 675,892 | 643,327 | 739,019 | 625,071 | ||||||||||||||||||||||||||||
| Average goodwill and other intangibles | (284,970 | ) | (220,310 | ) | (188,980 | ) | (191,017 | ) | (192,682 | ) | (231,751 | ) | (189,776 | ) | |||||||||||||||||||||
| Average tangible common stockholders' equity | $ | 488,052 | $ | 521,094 | $ | 512,869 | $ | 484,875 | $ | 450,645 | $ | 507,268 | $ | 435,295 | |||||||||||||||||||||
| Net income available to common stockholders | $ | 23,627 | $ | 27,180 | $ | 33,122 | $ | 31,328 | $ | 22,005 | $ | 83,929 | $ | 30,995 | |||||||||||||||||||||
| Average tangible common equity | 488,052 | 521,094 | 512,869 | 484,875 | 450,645 | 507,268 | 435,295 | ||||||||||||||||||||||||||||
| Return on average tangible common equity | 19.21 | % | 20.92 | % | 26.19 | % | 25.70 | % | 19.43 | % | 22.12 | % | 9.51 | % | |||||||||||||||||||||
| Net interest income | $ | 91,771 | $ | 90,282 | $ | 83,020 | $ | 83,598 | $ | 74,379 | $ | 265,073 | $ | 201,130 | |||||||||||||||||||||
| Non-interest income | 12,055 | 13,896 | 14,291 | 22,386 | 10,493 | 40,242 | 37,999 | ||||||||||||||||||||||||||||
| Operating revenue | 103,826 | 104,178 | 97,311 | 105,984 | 84,872 | 305,315 | 239,129 | ||||||||||||||||||||||||||||
| Gain on sale of subsidiary or division | — | — | — | — | — | — | (9,758 | ) | |||||||||||||||||||||||||||
| Adjusted operating revenue | $ | 103,826 | $ | 104,178 | $ | 97,311 | $ | 105,984 | $ | 84,872 | $ | 305,315 | $ | 229,371 | |||||||||||||||||||||
| Non-interest expenses | $ | 72,813 | $ | 70,798 | $ | 60,892 | $ | 59,298 | $ | 55,297 | $ | 204,503 | $ | 162,776 | |||||||||||||||||||||
| Transaction costs | — | (2,992 | ) | — | — | (827 | ) | (2,992 | ) | (827 | ) | ||||||||||||||||||||||||
| Adjusted non-interest expenses | $ | 72,813 | $ | 67,806 | $ | 60,892 | $ | 59,298 | $ | 54,470 | $ | 201,511 | $ | 161,949 | |||||||||||||||||||||
| Adjusted efficiency ratio | 70.13 | % | 65.09 | % | 62.57 | % | 55.95 | % | 64.18 | % | 66.00 | % | 70.61 | % | |||||||||||||||||||||
| Adjusted net non-interest expense to average assets ratio: | |||||||||||||||||||||||||||||||||||
| Non-interest expenses | $ | 72,813 | $ | 70,798 | $ | 60,892 | $ | 59,298 | $ | 55,297 | $ | 204,503 | $ | 162,776 | |||||||||||||||||||||
| Transaction costs | — | (2,992 | ) | — | — | (827 | ) | (2,992 | ) | (827 | ) | ||||||||||||||||||||||||
| Adjusted non-interest expenses | $ | 72,813 | $ | 67,806 | $ | 60,892 | $ | 59,298 | $ | 54,470 | $ | 201,511 | $ | 161,949 | |||||||||||||||||||||
| Total non-interest income | $ | 12,055 | $ | 13,896 | $ | 14,291 | $ | 22,386 | $ | 10,493 | $ | 40,242 | $ | 37,999 | |||||||||||||||||||||
| Gain on sale of subsidiary or division | — | — | — | — | — | — | (9,758 | ) | |||||||||||||||||||||||||||
| Adjusted non-interest income | $ | 12,055 | $ | 13,896 | $ | 14,291 | $ | 22,386 | $ | 10,493 | $ | 40,242 | $ | 28,241 | |||||||||||||||||||||
| Adjusted net non-interest expenses | $ | 60,758 | $ | 53,910 | $ | 46,601 | $ | 36,912 | $ | 43,977 | $ | 161,269 | $ | 133,708 | |||||||||||||||||||||
| Average total assets | $ | 6,020,631 | $ | 6,093,805 | $ | 6,013,668 | $ | 5,788,549 | $ | 5,518,708 | $ | 6,042,677 | $ | 5,304,903 | |||||||||||||||||||||
| Adjusted net non-interest expense to average assets ratio | 4.00 | % | 3.55 | % | 3.14 | % | 2.54 | % | 3.17 | % | 3.57 | % | 3.37 | % | |||||||||||||||||||||
| Total stockholders' equity | $ | 820,674 | $ | 792,388 | $ | 764,004 | $ | 726,781 | $ | 693,842 | $ | 820,674 | $ | 693,842 | |||||||||||||||||||||
| Preferred stock liquidation preference | (45,000 | ) | (45,000 | ) | (45,000 | ) | (45,000 | ) | (45,000 | ) | (45,000 | ) | (45,000 | ) | |||||||||||||||||||||
| Total common stockholders' equity | 775,674 | 747,388 | 719,004 | 681,781 | 648,842 | 775,674 | 648,842 | ||||||||||||||||||||||||||||
| Goodwill and other intangibles | (280,055 | ) | (286,567 | ) | (188,006 | ) | (189,922 | ) | (192,041 | ) | (280,055 | ) | (192,041 | ) | |||||||||||||||||||||
| Tangible common stockholders' equity | $ | 495,619 | $ | 460,821 | $ | 530,998 | $ | 491,859 | $ | 456,801 | $ | 495,619 | $ | 456,801 | |||||||||||||||||||||
| Common shares outstanding | 25,123,342 | 25,109,703 | 24,882,929 | 24,868,218 | 24,851,601 | 25,123,342 | 24,851,601 | ||||||||||||||||||||||||||||
| Tangible book value per share | $ | 19.73 | $ | 18.35 | $ | 21.34 | $ | 19.78 | $ | 18.38 | $ | 19.73 | $ | 18.38 | |||||||||||||||||||||
| Total assets at end of period | $ | 6,024,535 | $ | 6,015,877 | $ | 6,099,628 | $ | 5,935,791 | $ | 5,836,787 | $ | 6,024,535 | $ | 5,836,787 | |||||||||||||||||||||
| Goodwill and other intangibles | (280,055 | ) | (286,567 | ) | (188,006 | ) | (189,922 | ) | (192,041 | ) | (280,055 | ) | (192,041 | ) | |||||||||||||||||||||
| Tangible assets at period end | $ | 5,744,480 | $ | 5,729,310 | $ | 5,911,622 | $ | 5,745,869 | $ | 5,644,746 | $ | 5,744,480 | $ | 5,644,746 | |||||||||||||||||||||
| Tangible common stockholders' equity ratio | 8.63 | % | 8.04 | % | 8.98 | % | 8.56 | % | 8.09 | % | 8.63 | % | 8.09 | % | |||||||||||||||||||||
1) Triumph uses certain non-GAAP financial measures to provide meaningful supplemental information regarding Triumph's operational performance and to enhance investors' overall understanding of such financial performance. The non-GAAP measures used by Triumph include the following:
- “Adjusted diluted earnings per common share” is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding. Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, including divestitures, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business. Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.
- "Tangible common stockholders' equity" is defined as common stockholders' equity less goodwill and other intangible assets.
- "Total tangible assets" is defined as total assets less goodwill and other intangible assets.
- "Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
- "Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
- "Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
- "Adjusted efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue and non-interest expense allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.
- "Adjusted net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. This metric is used by our management to better assess our operating efficiency.
2) Performance ratios include discount accretion on purchased loans for the periods presented as follows:
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||
| (Dollars in thousands) | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||||||
| Loan discount accretion | $ | 1,953 | $ | 2,161 | $ | 3,501 | $ | 2,334 | $ | 4,104 | $ | 7,615 | $ | 8,377 | |||||||||||||
3) Asset quality ratios exclude loans held for sale, except for non-performing assets to total assets.
4) Current quarter ratios are preliminary.
Source: Triumph Bancorp, Inc.
Investor Relations:
Luke Wyse
Senior Vice President, Finance & Investor Relations
lwyse@tbkbank.com
214-365-6936
Media Contact:
Amanda Tavackoli
Senior Vice President, Director of Corporate Communication
atavackoli@tbkbank.com
214-365-6930
