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

As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance.  These non-GAAP financial measures are reconciled in the section labeled “Metrics and non-GAAP financial reconciliation” at the end of this press release.

2018 First Quarter Highlights and Recent Developments

• For the first quarter of 2018, net income was $12.1 million and net income available to common stockholders was $11.9 million, compared to net income of $6.3 million and net income available to common stockholders of $6.1 million for the quarter ended December 31, 2017. Diluted earnings per share were $0.56 for the quarter ended March 31, 2018, compared to $0.29 for the quarter ended December 31, 2017. 
  
  
• Net income for the quarter ended March 31, 2018 was impacted by (i) a gain on sale of Triumph Healthcare Finance (“THF”), our healthcare asset based lending line of business, of $1.1 million, or $0.8 million net of tax, and (ii) a combined loss on the sale of municipal securities and OREO valuation adjustments of $0.4 million.
  
  
• We report adjusted diluted earnings per share to remove the volatility of material gains and expenses related to merger and acquisition-related activities. Adjusted diluted earnings per share, which exclude the gain on sale of THF, net of taxes, were $0.52 for the quarter ended March 31, 2018. Adjusted diluted earnings per share, which exclude transaction costs related to our acquisition of Valley Bancorp, Inc. and our acquisition of nine branches from Independent Bank Group, Inc., net of taxes, were $0.34 for the quarter ended December 31, 2017.    
  
  
• Net interest margin (“NIM”) was 6.06% for the quarter ended March 31, 2018, compared to 6.16% for the quarter ended December 31, 2017. Adjusted NIM, which excludes loan discount accretion, was 5.81% for the quarter ended March 31, 2018, compared to 5.93% for the quarter ended December 31, 2017.
  
  
• Total loans held for investment increased $63.1 million, or 2.2%, to $2.874 billion at March 31, 2018, compared to $2.811 billion at December 31, 2017. Average loans for the quarter were $2.767 billion compared to $2.559 billion for the quarter ended December 31, 2017, an increase of 8.1%.
  
  
• Triumph Business Capital grew period-end clients to 3,438 clients at March 31, 2018 from 3,158 clients at December 31, 2017; an increase of 280 clients, or 8.9%. The total dollar value of invoices purchased for the quarter ended March 31, 2018 was $912.3 million with an average invoice price of $1,751 compared to purchases of $872.4 million and an average invoice price of $1,705 for the quarter ended December 31, 2017.
  
  
• At March 31, 2018, Triumph Business Capital had 61 clients utilizing the TriumphPay platform, our proprietary payment processing application. Of those 61 clients, 58 clients were freight broker factoring clients paying through the TriumphPay platform and 3 were freight brokers integrated directly with TriumphPay. For the quarter ended March 31, 2018, the TriumphPay application processed 35,780 invoices paying 11,438 distinct carriers a total of $51.1 million.
  
  
• On April 9, 2018 we entered into agreements to acquire First Bancorp of Durango, Inc. and Southern Colorado Corp. At December 31, 2017, First Bancorp of Durango, Inc. and Southern Colorado Corp. had a combined $734 million in assets, including $308 million in loans, and $653 million in deposits.
  
  
• On April 9, 2018 we entered into an agreement to acquire the transportation factoring assets of Interstate Capital Corporation. At December 31, 2017, Interstate Capital Corporation had $112 million in gross factored receivables.
  
  
• We completed a public offering of 5.4 million shares of our common stock on April 12, 2018. Our net proceeds from the offering, after deducting the underwriting discount and offering expenses, were approximately $192.1 million. The Company intends to use a significant portion of the net proceeds of this offering to fund the consideration payable in the pending acquisitions of First Bancorp of Durango, Inc., Southern Colorado Corp. and Interstate Capital Corporation, as well as, for general corporate purposes.

Balance Sheet

Total loans held for investment were $2.874 billion at March 31, 2018. Our commercial finance loans, which comprise 33% of the loan portfolio, were $936.5 million at March 31, 2018, compared to $897.5 million at December 31, 2017, an increase of $39.0 million, or 4.3% in the first quarter of 2018.

Total deposits were $2.533 billion at March 31, 2018, a decrease of $87.9 million or 3.4% in the first quarter of 2018.  Non-interest-bearing deposits accounted for 22% of total deposits and non-time deposits accounted for 58% of total deposits at March 31, 2018. 

Net Interest Income

We earned net interest income for the quarter ended March 31, 2018 of $47.1 million compared to $45.8 million for the quarter ended December 31, 2017. 

Yields on loans for the quarter ended March 31, 2018 were down 8 bps from the prior quarter to 7.65% (down 11 bps from the prior quarter to 7.36% adjusted to exclude loan discount accretion). The average cost of our total deposits was 0.68% for the quarter ended March 31, 2018 compared to 0.67% for the quarter ended December 31, 2017, on an annualized basis. 

Asset Quality

Non-performing assets increased 8 bps from December 31, 2017 to 1.47% of total assets at March 31, 2018.  The ratio of past due to total loans increased to 2.41% at March 31, 2018 from 2.33% at December 31, 2017. We recorded total net charge-offs of $1.3 million, or 0.05% of average loans, for the quarter ended March 31, 2018 compared to net charge-offs of $1.4 million, or 0.06% of average loans, for the quarter ended December 31, 2017.  We recorded a provision for loan losses of $2.5 million for the quarter ended March 31, 2018 compared to a provision of $1.9 million for the quarter ended December 31, 2017. From December 31, 2017 to March 31, 2018, our ALLL increased from $18.7 million or 0.67% of total loans to $20.0 million or 0.70% of total loans. 

Non-interest Income and Expense

We earned non-interest income for the quarter ended March 31, 2018 of $5.2 million compared to $4.0 million for the quarter ended December 31, 2017. Non-interest income for the quarter ended March 31, 2018 included a gain on sale of THF of $1.1 million and a combined loss on the sale of municipal securities and OREO valuation adjustments of $0.4 million.

For the quarter ended March 31, 2018, non-interest expense totaled $34.0 million, compared to $33.2 million for the quarter ended December 31, 2017.

Conference Call Information

Aaron P. Graft, Vice Chairman and CEO and Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 8:30 a.m. Central Time on Thursday, April 19, 2018. Dan Karas, Chief Lending Officer, will also be available for questions.

To participate in the live conference call, please dial 1-855-940-9472 (Canada: 1-855-669-9657) and request to be joined into the Triumph Bancorp, Inc. (TBK) call.  A simultaneous audio-only webcast may be accessed via the Company's website at www.triumphbancorp.com through the Investor Relations, News & Events, Webcasts and Presentations links, or through a direct link here at: https://services.choruscall.com/links/tbk180419.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 community banking and commercial finance products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com

Forward-Looking Statements

This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: risks relating to our ability to consummate the pending acquisitions of First Bancorp of Durango, Inc. and Southern Colorado Corp., and our pending acquisition of the operating assets of Interstate Capital Corporation and certain of its affiliates, including the possibility that the expected benefits related to the pending acquisitions may not materialize as expected; of the pending acquisitions not being timely completed, if completed at all; that prior to the completion of the pending acquisitions, the targets’ businesses could experience disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities, difficulty retaining key employees; and of the parties’ being unable to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within our management’s expected timeframes or at all; business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses (including our pending acquisitions of First Bancorp of Durango, Inc. and Southern Colorado Corp., and our pending acquisition of the operating assets of Interstate Capital Corporation and certain of its affiliates, and our prior acquisitions of Valley Bancorp, Inc. and nine branches from Independent Bank in Colorado) and any future acquisitions; changes in management personnel; interest rate risk; concentration of our factoring services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets, or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally, or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities, and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of the Federal Deposit Insurance Corporation insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

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

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 its operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.

		As of and for the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
Financial Highlights:
Total assets		$	3,405,010			$	3,499,033			$	2,906,161			$	2,836,684			$	2,635,358
Loans held for investment		$	2,873,985			$	2,810,856			$	2,425,463			$	2,295,100			$	2,035,236
Deposits		$	2,533,498			$	2,621,348			$	2,012,545			$	2,072,181			$	2,024,288
Net income available to common stockholders		$	11,878			$	6,111			$	9,587			$	9,467			$	10,281
Performance Ratios - Annualized:
Return on average assets			1.43	%			0.79	%			1.36	%			1.42	%			1.62	%
Return on average total equity			12.20	%			6.35	%			10.71	%			12.60	%			14.44	%
Return on average common equity			12.30	%			6.30	%			10.79	%			12.75	%			14.66	%
Return on average tangible common equity (1)			14.75	%			7.33	%			12.28	%			14.94	%			17.49	%
Yield on loans			7.65	%			7.73	%			7.44	%			7.79	%			7.15	%
Adjusted yield on loans (1)			7.36	%			7.47	%			7.20	%			7.25	%			6.93	%
Cost of interest bearing deposits			0.86	%			0.84	%			0.80	%			0.74	%			0.71	%
Cost of total deposits			0.68	%			0.67	%			0.64	%			0.60	%			0.58	%
Cost of total funds			0.95	%			0.92	%			0.90	%			0.83	%			0.79	%
Net interest margin			6.06	%			6.16	%			5.90	%			6.16	%			5.37	%
Adjusted net interest margin (1)			5.81	%			5.93	%			5.69	%			5.70	%			5.19	%
Net non-interest expense to average assets			3.43	%			3.65	%			3.35	%			3.26	%			1.17	%
Adjusted net non-interest expense to average assets (1)			3.56	%			3.43	%			3.35	%			3.26	%			3.60	%
Efficiency ratio			65.09	%			66.74	%			64.61	%			62.44	%			58.94	%
Adjusted efficiency ratio (1)			66.45	%			63.35	%			64.61	%			62.44	%			77.65	%
Asset Quality:(2)
Past due to total loans			2.41	%			2.33	%			2.22	%			2.51	%			3.16	%
Non-performing loans to total loans			1.41	%			1.38	%			1.25	%			1.36	%			1.80	%
Non-performing assets to total assets			1.47	%			1.39	%			1.42	%			1.50	%			1.92	%
ALLL to non-performing loans			49.52	%			48.41	%			67.33	%			63.56	%			52.18	%
ALLL to total loans			0.70	%			0.67	%			0.84	%			0.86	%			0.94	%
Net charge-offs to average loans			0.05	%			0.06	%			0.00	%			0.03	%			0.20	%
Capital:
Tier 1 capital to average assets(3)			12.06	%			11.80	%			13.50	%			11.28	%			11.32	%
Tier 1 capital to risk-weighted assets(3)			11.54	%			11.15	%			13.45	%			11.30	%			12.05	%
Common equity tier 1 capital to risk-weighted assets(3)			10.05	%			9.70	%			11.95	%			9.73	%			10.32	%
Total capital to risk-weighted assets(3)			13.66	%			13.21	%			15.91	%			13.87	%			14.87	%
Total equity to total assets			11.83	%			11.19	%			13.29	%			10.94	%			11.40	%
Tangible common stockholders' equity to tangible assets(1)			9.86	%			9.26	%			11.66	%			9.22	%			9.51	%
Per Share Amounts:
Book value per share		$	18.89			$	18.35			$	18.08			$	16.59			$	16.08
Tangible book value per share (1)		$	15.82			$	15.29			$	16.04			$	14.20			$	13.63
Basic earnings per common share		$	0.57			$	0.29			$	0.48			$	0.53			$	0.57
Diluted earnings per common share		$	0.56			$	0.29			$	0.47			$	0.51			$	0.55
Adjusted diluted earnings per common share(1)		$	0.52			$	0.34			$	0.47			$	0.51			$	0.02
Shares outstanding end of period			20,824,509				20,820,445				20,820,900				18,132,585				18,078,769

Unaudited consolidated balance sheet as of:

		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
ASSETS
Total cash and cash equivalents		$	106,046			$	134,129			$	80,557			$	117,502			$	126,084
Securities - available for sale			192,916				250,603				207,301				225,183				252,441
Securities - held to maturity			8,614				8,557				17,999				26,036				28,882
Equity securities			4,925				5,006				2,025				2,023				2,011
Loans held for investment			2,873,985				2,810,856				2,425,463				2,295,100				2,035,236
Allowance for loan and lease losses			(20,022	)			(18,748	)			(20,367	)			(19,797	)			(19,093	)
Loans, net			2,853,963				2,792,108				2,405,096				2,275,303				2,016,143
Assets held for sale			—				71,362				—				—				—
FHLB stock			16,508				16,006				16,076				14,566				7,167
Premises and equipment, net			62,826				62,861				43,678				43,957				44,630
Other real estate owned ("OREO"), net			9,186				9,191				10,753				10,740				11,638
Goodwill and intangible assets, net			63,923				63,778				42,452				43,321				44,233
Bank-owned life insurance			44,534				44,364				37,025				36,852				36,679
Deferred tax asset, net			8,849				8,959				14,130				15,111				15,678
Other assets			32,720				32,109				29,069				26,090				49,772
Total assets		$	3,405,010			$	3,499,033			$	2,906,161			$	2,836,684			$	2,635,358
LIABILITIES
Non-interest bearing deposits		$	548,991			$	564,225			$	403,643			$	381,042			$	382,009
Interest bearing deposits			1,984,507				2,057,123				1,608,902				1,691,139				1,642,279
Total deposits			2,533,498				2,621,348				2,012,545				2,072,181				2,024,288
Customer repurchase agreements			6,751				11,488				19,869				14,959				10,468
Federal Home Loan Bank advances			355,000				365,000				385,000				340,000				200,000
Subordinated notes			48,853				48,828				48,804				48,780				48,757
Junior subordinated debentures			38,734				38,623				33,047				32,943				32,840
Other liabilities			19,230				22,048				20,799				17,354				18,580
Total liabilities			3,002,066				3,107,335				2,520,064				2,526,217				2,334,933
EQUITY
Preferred stock series A			4,550				4,550				4,550				4,550				4,550
Preferred stock series B			5,108				5,108				5,108				5,108				5,196
Common stock			209				209				209				182				182
Additional paid-in-capital			265,406				264,855				264,531				198,570				197,866
Treasury stock, at cost			(1,853	)			(1,784	)			(1,760	)			(1,759	)			(1,494	)
Retained earnings			131,234				119,356				113,245				103,658				94,191
Accumulated other comprehensive income			(1,710	)			(596	)			214				158				(66	)
Total equity			402,944				391,698				386,097				310,467				300,425
Total liabilities and equity		$	3,405,010			$	3,499,033			$	2,906,161			$	2,836,684			$	2,635,358

Unaudited consolidated statement of income:

		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
Interest income:
Loans, including fees		$	36,883			$	34,856			$	30,863			$	30,663			$	25,185
Factored receivables, including fees			15,303				15,000				12,198				10,812				9,167
Securities			1,310				1,819				1,655				1,738				1,611
FHLB stock			105				78				51				36				42
Cash deposits			517				464				370				289				327
Total interest income			54,118				52,217				45,137				43,538				36,332
Interest expense:
Deposits			4,277				3,884				3,272				3,057				2,869
Subordinated notes			837				836				837				836				835
Junior subordinated debentures			597				520				495				475				465
Other borrowings			1,277				1,181				1,021				613				344
Total interest expense			6,988				6,421				5,625				4,981				4,513
Net interest income			47,130				45,796				39,512				38,557				31,819
Provision for loan losses			2,548				1,931				572				1,447				7,678
Net interest income after provision for loan losses			44,582				43,865				38,940				37,110				24,141
Non-interest income:
Service charges on deposits			1,145				1,178				1,046				977				980
Card income			1,244				1,122				956				917				827
Net OREO gains (losses) and valuation adjustments			(88	)			(764	)			15				(112	)			11
Net gains (losses) on sale of securities			(272	)			—				35				—				—
Fee income			800				658				625				637				583
Insurance commissions			714				857				826				708				590
Asset management fees			—				—				—				—				1,717
Gain on sale of subsidiary			1,071				—				—				—				20,860
Other			558				947				668				2,075				1,717
Total non-interest income			5,172				3,998				4,171				5,202				27,285
Non-interest expense:
Salaries and employee benefits			19,404				18,009				16,717				16,012				21,958
Occupancy, furniture and equipment			3,054				2,728				2,398				2,348				2,359
FDIC insurance and other regulatory assessments			199				411				294				270				226
Professional fees			1,640				2,521				1,465				1,238				1,968
Amortization of intangible assets			1,117				2,309				870				911				1,111
Advertising and promotion			1,029				573				804				911				938
Communications and technology			3,359				2,291				2,145				2,233				2,174
Other			4,240				4,389				3,532				3,398				4,103
Total non-interest expense			34,042				33,231				28,225				27,321				34,837
Net income before income tax			15,712				14,632				14,886				14,991				16,589
Income tax expense			3,644				8,327				5,104				5,331				6,116
Net income		$	12,068			$	6,305			$	9,782			$	9,660			$	10,473
Dividends on preferred stock			(190	)			(194	)			(195	)			(193	)			(192	)
Net income available to common stockholders		$	11,878			$	6,111			$	9,587			$	9,467			$	10,281

Earnings per share:

		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
Basic
Net income to common stockholders		$	11,878			$	6,111			$	9,587			$	9,467			$	10,281
Weighted average common shares outstanding			20,721,363				20,717,548				19,811,577				18,012,905				17,955,144
Basic earnings per common share		$	0.57			$	0.29			$	0.48			$	0.53			$	0.57
Diluted
Net income to common stockholders		$	11,878			$	6,111			$	9,587			$	9,467			$	10,281
Dilutive effect of preferred stock			190				194				195				193				192
Net income to common stockholders - diluted		$	12,068			$	6,305			$	9,782			$	9,660			$	10,473
Weighted average common shares outstanding			20,721,363				20,717,548				19,811,577				18,012,905				17,955,144
Dilutive effects of:
Restricted stock			85,045				74,318				63,384				47,521				87,094
Assumed exercises of stock warrants			—				—				54,476				129,896				145,896
Assumed exercises of stock options			83,872				56,359				45,788				32,592				47,873
Assumed conversion of Preferred A			315,773				315,773				315,773				315,773				315,773
Assumed conversion of Preferred B			354,471				354,471				354,471				354,471				360,578
Weighted average shares outstanding - diluted			21,560,524				21,518,469				20,645,469				18,893,158				18,912,358
Diluted earnings per common share		$	0.56			$	0.29			$	0.47			$	0.51			$	0.55
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2018				2017				2017				2017				2017
Assumed conversion of Preferred A			—				—				—				—				—
Assumed conversion of Preferred B			—				—				—				—				—
Restricted stock awards			—				—				—				35,270				—
Stock options			—				57,926				58,442				58,442				—

Loans held for investment summarized as of:

		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
Commercial real estate		$	781,006			$	745,893			$	574,530			$	541,217			$	498,099
Construction, land development, land			143,876				134,812				141,368				120,253				109,849
1-4 family residential properties			122,979				125,827				96,032				101,833				105,230
Farmland			184,064				180,141				130,471				136,258				136,537
Commercial			930,283				920,812				890,372				842,715				792,764
Factored receivables			397,145				374,410				341,880				293,633				242,098
Consumer			29,244				31,131				30,093				29,497				28,415
Mortgage warehouse			285,388				297,830				220,717				229,694				122,244
Total loans		$	2,873,985			$	2,810,856			$	2,425,463			$	2,295,100			$	2,035,236

A portion of our total loans held for investment portfolio consists of commercial finance products offered under our commercial finance brands on a nationwide basis, as further summarized below:

		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
Equipment		$	260,502			$	254,119			$	226,120			$	219,904			$	203,251
Asset based lending (General)			230,314				213,471				193,884				188,257				166,917
Asset based lending (Healthcare)			—				—				67,889				68,606				78,208
Premium finance			48,561				55,520				57,083				31,274				23,162
Factored receivables			397,145				374,410				341,880				293,633				242,098
Commercial finance		$	936,522			$	897,520			$	886,856			$	801,674			$	713,636
Commercial finance % of total loans			33	%			32	%			37	%			35	%			35	%
Yield on commercial finance loans			11.04	%			11.03	%			10.62	%			11.42	%			10.25	%

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:

		March 31,				December 31,				September 30,				June 30,				March 31,
		2018				2017				2017				2017				2017
Factored receivable period end balance		$	372,771,000			$	346,293,000			$	315,742,000			$	268,707,000			$	218,601,000
Yield on average receivable balance			17.40	%			16.91	%			16.64	%			17.35	%			17.45	%
Rolling twelve quarter annual charge-off rate			0.50	%			0.41	%			0.44	%			0.41	%			0.32	%
Factored receivables - transportation concentration			86	%			84	%			84	%			84	%			82	%
Interest income, including fees		$	14,780,000			$	14,518,000			$	11,736,000			$	10,387,000			$	8,705,000
Non-interest income			590,000				535,000				774,000				758,000				670,000
Factored receivable total revenue			15,370,000				15,053,000				12,510,000				11,145,000				9,375,000
Average net funds employed			316,488,000				309,614,000				260,384,000				219,694,000				184,640,000
Yield on average net funds employed			19.70	%			19.29	%			19.06	%			20.35	%			20.59	%
Accounts receivable purchased		$	912,336,000			$	872,373,000			$	732,406,000			$	639,131,000			$	521,768,000
Number of invoices purchased			521,906				511,879				476,370				446,153				375,943
Average invoice size		$	1,751			$	1,705			$	1,537			$	1,433			$	1,388
Average invoice size - transportation		$	1,662			$	1,647			$	1,486			$	1,386			$	1,319
Average invoice size - non-transportation		$	2,627			$	2,251			$	1,965			$	1,782			$	1,967
Net new clients			280				233				235				151				97
Period end clients			3,438				3,158				2,925				2,690				2,539

Deposits summarized as of:

		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2018				2017				2017				2017				2017
Non-interest bearing demand		$	548,991			$	564,225			$	403,643			$	381,042			$	382,009
Interest bearing demand			392,947				403,244				284,282				350,966				329,201
Individual retirement accounts			105,558				108,505				97,186				99,694				100,436
Money market			283,354				283,969				189,177				205,243				203,686
Savings			244,103				235,296				158,464				173,137				173,258
Certificates of deposit			783,651				837,384				770,599				777,459				767,602
Brokered deposits			174,894				188,725				109,194				84,640				68,096
Total deposits		$	2,533,498			$	2,621,348			$	2,012,545			$	2,072,181			$	2,024,288

Net interest margin summarized for the three months ended:

		March 31, 2018												December 31, 2017
		Average								Average				Average								Average
(Dollars in thousands)		Balance				Interest				Rate				Balance				Interest				Rate
Interest earning assets:
Interest earning cash balances		$	131,723			$	517				1.59	%		$	134,661			$	464				1.37	%
Taxable securities			179,395				1,057				2.39	%			198,997				1,658				3.31	%
Tax-exempt securities			59,029				253				1.74	%			39,082				161				1.63	%
FHLB stock			16,311				105				2.61	%			16,764				78				1.85	%
Loans			2,766,859				52,186				7.65	%			2,558,774				49,856				7.73	%
Total interest earning assets		$	3,153,317			$	54,118				6.96	%		$	2,948,278			$	52,217				7.03	%
Non-interest earning assets:
Other assets			257,566												233,419
Total assets		$	3,410,883											$	3,181,697
Interest bearing liabilities:
Deposits:
Interest bearing demand		$	390,001			$	188				0.20	%		$	343,560			$	141				0.16	%
Individual retirement accounts			106,893				310				1.18	%			102,234				319				1.24	%
Money market			282,697				377				0.54	%			220,040				153				0.28	%
Savings			239,707				30				0.05	%			191,814				24				0.05	%
Certificates of deposit			813,244				2,584				1.29	%			826,018				2,644				1.27	%
Brokered deposits			186,390				788				1.71	%			140,914				603				1.70	%
Total deposits			2,018,932				4,277				0.86	%			1,824,580				3,884				0.84	%
Subordinated notes			48,839				837				6.95	%			48,814				836				6.79	%
Junior subordinated debentures			38,672				597				6.26	%			34,515				520				5.98	%
Other borrowings			342,426				1,277				1.51	%			391,840				1,181				1.20	%
Total interest bearing liabilities		$	2,448,869			$	6,988				1.16	%		$	2,299,749			$	6,421				1.11	%
Non-interest bearing liabilities and equity:
Non-interest bearing demand deposits			545,118												469,596
Other liabilities			15,709												18,081
Total equity			401,187												394,271
Total liabilities and equity		$	3,410,883											$	3,181,697
Net interest income						$	47,130											$	45,796
Interest spread											5.80	%											5.92	%
Net interest margin											6.06	%											6.16	%

Metrics and non-GAAP financial reconciliation:

		As of and for the Three Months Ended
(Dollars in thousands,		March 31,				December 31,				September 30,				June 30,				March 31,
except per share amounts)		2018				2017				2017				2017				2017
Net income available to common stockholders		$	11,878			$	6,111			$	9,587			$	9,467			$	10,281
Gain on sale of subsidiary			(1,071	)			—				—				—				(20,860	)
Incremental bonus related to transaction			—				—				—				—				4,814
Transaction related costs			—				1,688				—				—				325
Tax effect of adjustments			248				(601	)			—				—				5,754
Adjusted net income available to common stockholders		$	11,055			$	7,198			$	9,587			$	9,467			$	314
Dilutive effect of convertible preferred stock			190				194				195				193				—
Adjusted net income available to common stockholders - diluted		$	11,245			$	7,392			$	9,782			$	9,660			$	314
Weighted average shares outstanding - diluted			21,560,524				21,518,469				20,645,469				18,893,158				18,912,358
Adjusted effects of assumed Preferred Stock conversion			—				—				—				—				(676,351	)
Adjusted weighted average shares outstanding - diluted			21,560,524				21,518,469				20,645,469				18,893,158				18,236,007
Adjusted diluted earnings per common share		$	0.52			$	0.34			$	0.47			$	0.51			$	0.02
Net income available to common stockholders		$	11,878			$	6,111			$	9,587			$	9,467			$	10,281
Average tangible common equity			326,614				330,819				309,624				254,088				238,405
Return on average tangible common equity			14.75	%			7.33	%			12.28	%			14.94	%			17.49	%
Adjusted efficiency ratio:
Net interest income		$	47,130			$	45,796			$	39,512			$	38,557			$	31,819
Non-interest income			5,172				3,998				4,171				5,202				27,285
Operating revenue			52,302				49,794				43,683				43,759				59,104
Gain on sale of subsidiary			(1,071	)			—				—				—				(20,860	)
Adjusted operating revenue		$	51,231			$	49,794			$	43,683			$	43,759			$	38,244
Non-interest expenses		$	34,042			$	33,231			$	28,225			$	27,321			$	34,837
Incremental bonus related to transaction			—				—				—				—				(4,814	)
Transaction related costs			—				(1,688	)			—				—				(325	)
Adjusted non-interest expenses		$	34,042			$	31,543			$	28,225			$	27,321			$	29,698
Adjusted efficiency ratio			66.45	%			63.35	%			64.61	%			62.44	%			77.65	%
Adjusted net non-interest expense to average assets ratio:
Non-interest expenses		$	34,042			$	33,231			$	28,225			$	27,321			$	34,837
Incremental bonus related to transaction			—				—				—				—				(4,814	)
Transaction related costs			—				(1,688	)			—				—				(325	)
Adjusted non-interest expenses		$	34,042			$	31,543			$	28,225			$	27,321			$	29,698
Total non-interest income		$	5,172			$	3,998			$	4,171			$	5,202			$	27,285
Gain on sale of subsidiary			(1,071	)			—				—				—				(20,860	)
Adjusted non-interest income		$	4,101			$	3,998			$	4,171			$	5,202			$	6,425
Adjusted net non-interest expenses		$	29,941			$	27,545			$	24,054			$	22,119			$	23,273
Average total assets		$	3,410,883			$	3,181,697			$	2,849,170			$	2,723,303			$	2,619,282
Adjusted net non-interest expense to average assets ratio			3.56	%			3.43	%			3.35	%			3.26	%			3.60	%

		As of and for the Three Months Ended
(Dollars in thousands,		March 31,				December 31,				September 30,				June 30,				March 31,
except per share amounts)		2018				2017				2017				2017				2017
Reported yield on loans			7.65	%			7.73	%			7.44	%			7.79	%			7.15	%
Effect of accretion income on acquired loans			(0.29	%)			(0.26	%)			(0.24	%)			(0.54	%)			(0.22	%)
Adjusted yield on loans			7.36	%			7.47	%			7.20	%			7.25	%			6.93	%
Reported net interest margin			6.06	%			6.16	%			5.90	%			6.16	%			5.37	%
Effect of accretion income on acquired loans			(0.25	%)			(0.23	%)			(0.21	%)			(0.46	%)			(0.18	%)
Adjusted net interest margin			5.81	%			5.93	%			5.69	%			5.70	%			5.19	%
Total stockholders' equity		$	402,944			$	391,698			$	386,097			$	310,467			$	300,425
Preferred stock liquidation preference			(9,658	)			(9,658	)			(9,658	)			(9,658	)			(9,746	)
Total common stockholders' equity			393,286				382,040				376,439				300,809				290,679
Goodwill and other intangibles			(63,923	)			(63,778	)			(42,452	)			(43,321	)			(44,233	)
Tangible common stockholders' equity		$	329,363			$	318,262			$	333,987			$	257,488			$	246,446
Common shares outstanding			20,824,509				20,820,445				20,820,900				18,132,585				18,078,769
Tangible book value per share		$	15.82			$	15.29			$	16.04			$	14.20			$	13.63
Total assets at end of period		$	3,405,010			$	3,499,033			$	2,906,161			$	2,836,684			$	2,635,358
Goodwill and other intangibles			(63,923	)			(63,778	)			(42,452	)			(43,321	)			(44,233	)
Adjusted total assets at period end		$	3,341,087			$	3,435,255			$	2,863,709			$	2,793,363			$	2,591,125
Tangible common stockholders' equity ratio			9.86	%			9.26	%			11.66	%			9.22	%			9.51	%

1)  Triumph uses certain non-GAAP financial measures to provide meaningful supplemental information regarding Triumph's operational performance and to enhance investors' overall understanding of such financial performance.  The non-GAAP measures used by Triumph include the following:

• “Adjusted diluted earnings per common share” is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding.  Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, including divestitures, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.  Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.  
  
  
• "Tangible common stockholders' equity" is common stockholders' equity less goodwill and other intangible assets.
  
  
• "Total tangible assets" is defined as total assets less goodwill and other intangible assets.
  
  
• "Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
  
  
• "Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
  
  
• "Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
  
  
• "Adjusted efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue and non-interest expense allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.
  
  
• "Adjusted net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures.  This metric is used by our management to better assess our operating efficiency. 
  
  
• "Adjusted yield on loans" is our yield on loans after excluding loan discount accretion from our acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on our yield on loans, as the effect of loan discount accretion is expected to decrease as the acquired loans pay down or mature and are removed from our balance sheet.
  
  
• “Adjusted net interest margin” is net interest margin after excluding loan accretion from the acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discount accretion is expected to decrease as the acquired loans pay down or mature and are removed from our balance sheet. 

2) Asset quality ratios exclude loans held for sale, except for non-performing assets to total assets.

3) Current quarter ratios are preliminary.

Source: Triumph Bancorp, Inc.

Investor Relations:
Luke Wyse
Senior Vice President, Finance & Investor Relations
lwyse@tbkbank.com 
214-365-6936

Media Contact:
Amanda Tavackoli
Senior Vice President, Marketing & Communication
atavackoli@tbkbank.com  
214-365-6930