DALLAS, Oct. 19, 2020 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the third quarter of 2020.

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.

2020 Third Quarter Highlights

• For the third quarter of 2020, net income available to common stockholders was $22.0 million. Diluted earnings per share were $0.89.
• Adjusted diluted earnings per share were $0.91 for the quarter ended September 30, 2020, which exclude transaction costs related to the acquisition of Transport Financial Solutions (“TFS”), net of taxes.
• On July 8, 2020, we acquired the transportation factoring assets (the “TFS Acquisition”) of Transport Financial Solutions (“TFS”), a wholly owned subsidiary of Covenant Logistics Group, Inc. ("CVLG"). Details of the TFS Acquisition can be found in our SEC Form 8-K filed on July 13, 2020. On September 23, 2020, we entered into an Account Management Agreement, Amendment to Purchase Agreement and Mutual Release (the “Agreement”) with Covenant Transport Solutions, LLC (“CTS”) and CVLG the details of which can be found in our SEC Form 8-K filed on September 23, 2020. The TFS Acquisition and subsequent Agreement resulted in our acquisition of $101.9 million of net factored receivables, a purchase credit deteriorated (“PCD”) allowance for credit loss (“ACL”) of $37.4 million, an indemnification asset of $31.2 million, a net deferred tax asset of $1.4 million, and $8.0 million of intangible assets including $4.5 million of goodwill. Total consideration paid was $105.1 million. Further details regarding the transaction can be found in the appendix to the accompanying investor deck.
• For the quarter ended September 30, 2020, we recorded a $0.3 million benefit to total credit loss expense, comprised of a $0.4 million benefit to credit loss expense related to our loan portfolio and $0.1 million of credit loss expense related to held to maturity securities. Credit loss expense related to off balance sheet loan commitments was insignificant for the quarter. Regarding the $0.4 million benefit to credit loss expense on our loan portfolio:
  • Our macroeconomic forecasts did not change materially from the prior quarter and resulted in credit loss expense of approximately $0.6 million.
  • Changes in the volume and mix of our loan portfolio provided a benefit of $1.7 million to credit loss expense. Net charge offs were $0.7 million and the increase in non-purchase credit deteriorated specific reserves was $0.1 million.
  • Our ACL as a percentage of loans held for investment increased 64 basis points during the quarter to 1.88% at September 30, 2020. We recorded PCD specific reserves of $37.4 million during the quarter on the Over-Formula Advance Portfolio obtained through the TFS Acquisition, which contributed 77 basis points to the ratio at September 30, 2020. The PCD reserves were recorded through purchase accounting and had no impact on our credit loss expense for the quarter.
• As of September 30, 2020, the Company’s balance sheet reflected short-term deferrals on outstanding loan balances of $103.0 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, 2020, these deferred balances carried accrued interest of $0.7 million.
• As of September 30, 2020, the Company carried 2,080 PPP loans representing a balance of $223.2 million classified as commercial loans. The Company has received approximately $7.7 million in total fees from the SBA, $1.2 million and $2.6 million of which were recognized in earnings during the three and nine months ended September 30, 2020, respectively. The remaining fees will be amortized over the respective lives of the loans.
• Net interest margin (“NIM”) was 5.83% for the quarter ended September 30, 2020.
• Included in noninterest income for the quarter ended September 30, 2020 was a $3.1 million gain on sale of securities and a $2.0 million gain recognized on the increased value of the receivable due from CVLG resulting from the Agreement. These gains were partially offset by a $0.7 million loss recognized on the donation of a branch to a local municipality during the same period.
• Total loans held for investment increased $459.6 million, or 10.5%, to $4.853 billion at September 30, 2020. Average loans for the quarter increased $116.4 million, or 2.6%, to $4.526 billion. The increase in total loans reflects $107.5 million of factored receivables purchased through the TFS Acquisition. Excluding the TFS Acquisition, organic growth in factored receivables was $347.2 million, or 61.8%, during the three months ended September 30, 2020.
• Triumph Business Capital and TriumphPay processed a combined $2.920 billion in invoice payments for the quarter ended September 30, 2020.
• The total dollar value of invoices purchased by Triumph Business Capital for the quarter ended September 30, 2020 was $1.984 billion with an average invoice size of $1,931. The transportation average invoice size for the quarter was $1,787.
• For the quarter ended September 30, 2020, TriumphPay processed 1,364,606 invoices paying 57,953 distinct carriers a total of $1.161 billion.
  

Balance Sheet

Total loans held for investment increased $459.6 million, or 10.5%, during the third quarter to $4.853 billion at September 30, 2020. The national lending portfolio increased $118.9 million, or 11.1%, to $1,187.8 million, the commercial finance portfolio increased $461.9 million, or 37.7%, to $1.687 billion, and the community banking portfolio decreased $121.2 million, or 5.8%, to $1.978 billion during the quarter. The increase in total loans and the commercial finance portfolio reflects $107.5 million of factored receivables purchased through the TFS Acquisition.

Total deposits were $4.248 billion at September 30, 2020, an increase of $185.8 million, or 4.6%, in the third quarter of 2020. Non-interest-bearing deposits accounted for 31% of total deposits and non-time deposits accounted for 69% of total deposits at September 30, 2020.

Net Interest Income

We earned net interest income for the quarter ended September 30, 2020 of $74.4 million compared to $64.3 million for the quarter ended June 30, 2020.

Yields on loans for the quarter ended September 30, 2020 were up 53 bps from the prior quarter to 7.05%. The average cost of our total deposits was 0.56% for the quarter ended September 30, 2020 compared to 0.79% for the quarter ended June 30, 2020.

Asset Quality

Non-performing assets were 1.52% of total assets at September 30, 2020 compared to 1.20% of total assets at June 30, 2020. Approximately 17 basis points of this ratio at September 30, 2020 consisted of $10.0 million of the Over-Formula Advance Portfolio obtained through TFS Acquisition which represents the portion that not covered by CVLG’s indemnification.

The ratio of past due to total loans increased to 2.40% at September 30, 2020 from 1.50% at June 30, 2020. Approximately 79 basis points of this ratio at September 30, 2020 consisted of $38.5 million of past due factored receivables related to the Over-Formula Advance Portfolio. We recorded total net charge-offs of $0.7 million, or 0.02% of average loans, for the quarter ended September 30, 2020 compared to net charge-offs of $1.1 million, or 0.02% of average loans, for the quarter ended June 30, 2020.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended September 30, 2020 of $10.5 million compared to $20.0 million for the quarter ended June 30, 2020. Excluding the gain on sale of TPF, we earned adjusted noninterest income of $10.2 million for the three months ended June 30, 2020.

For the quarter ended September 30, 2020, non-interest expense totaled $55.3 million. Non-interest expense for the quarter ended June 30, 2020 was $52.7 million. Excluding the transaction costs related to the TFS acquisition, we incurred adjusted noninterest expense of $54.5 million for the three months ended September 30, 2020.

Conference Call Information

Aaron P. Graft, Vice Chairman and CEO and Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Tuesday, October 20, 2020. Todd Ritterbusch, Chief Lending Officer, will also be available for questions.

To participate in the live conference call, please dial 1-855-940-9472 (Canada: 1-855-669-9657) and request to be joined into the Triumph Bancorp, Inc. call. A simultaneous audio-only webcast may be accessed via the Company's website at www.triumphbancorp.com through the Investor Relations, News & Events, Webcasts and Presentations links, or through a direct link here at: https://services.choruscall.com/links/tbk201020.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, national lending, and commercial finance products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com

Forward-Looking Statements

This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; 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 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 11, 2020 and its Quarterly Report on Form 10-Q, filed with the SEC on August 7, 2020.

Non-GAAP Financial Measures

This press release includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided at the end of this press release.

The following table sets forth key metrics used by Triumph to monitor our operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.

		As of and for the Three Months Ended																				As of and for the Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019				2020				2019
Financial Highlights:
Total assets		$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297			$	5,039,697			$	5,836,787			$	5,039,697
Loans held for investment		$	4,852,911			$	4,393,311			$	4,320,548			$	4,194,512			$	4,209,417			$	4,852,911			$	4,209,417
Deposits		$	4,248,101			$	4,062,332			$	3,682,015			$	3,789,906			$	3,697,833			$	4,248,101			$	3,697,833
Net income available to common stockholders		$	22,005			$	13,440			$	(4,450	)		$	16,709			$	14,317			$	30,995			$	41,835
Performance Ratios - Annualized:
Return on average assets			1.65	%			0.99	%			(0.36	%)			1.31	%			1.17	%			0.80	%			1.20	%
Return on average total equity			13.24	%			8.86	%			(2.85	%)			10.24	%			8.79	%			6.63	%			8.63	%
Return on average common equity			13.61	%			8.94	%			(2.85	%)			10.24	%			8.79	%			6.62	%			8.63	%
Return on average tangible common equity (1)			19.43	%			12.96	%			(4.09	%)			14.54	%			12.56	%			9.51	%			12.38	%
Yield on loans(2)			7.05	%			6.52	%			7.22	%			7.48	%			7.63	%			6.92	%			7.85	%
Cost of interest bearing deposits			0.79	%			1.08	%			1.34	%			1.45	%			1.49	%			1.07	%			1.39	%
Cost of total deposits			0.56	%			0.79	%			1.05	%			1.15	%			1.19	%			0.79	%			1.11	%
Cost of total funds			0.67	%			0.85	%			1.23	%			1.35	%			1.41	%			0.90	%			1.36	%
Net interest margin(2)			5.83	%			5.11	%			5.63	%			5.72	%			5.85	%			5.52	%			5.99	%
Net non-interest expense to average assets			3.23	%			2.40	%			3.88	%			3.46	%			3.64	%			3.14	%			3.67	%
Adjusted net non-interest expense to average assets (1)			3.17	%			3.11	%			3.88	%			3.46	%			3.64	%			3.37	%			3.67	%
Efficiency ratio			65.15	%			62.56	%			78.24	%			70.15	%			71.93	%			68.07	%			71.29	%
Adjusted efficiency ratio (1)			64.18	%			70.75	%			78.24	%			70.15	%			71.93	%			70.61	%			71.29	%
Asset Quality:(3)
Past due to total loans(4)			2.40	%			1.50	%			1.99	%			1.74	%			1.91	%			2.40	%			1.91	%
Non-performing loans to total loans			1.17	%			1.27	%			1.26	%			0.97	%			1.00	%			1.17	%			1.00	%
Non-performing assets to total assets			1.52	%			1.20	%			1.09	%			0.87	%			0.91	%			1.52	%			0.91	%
ACL to non-performing loans(5)			159.67	%			97.66	%			82.37	%			71.63	%			75.58	%			159.67	%			75.58	%
ACL to total loans(5)			1.88	%			1.24	%			1.04	%			0.69	%			0.76	%			1.88	%			0.76	%
Net charge-offs to average loans			0.02	%			0.02	%			0.04	%			0.08	%			0.01	%			0.08	%			0.09	%
Capital:
Tier 1 capital to average assets(6)			10.75	%			9.98	%			9.62	%			10.03	%			10.37	%			10.75	%			10.37	%
Tier 1 capital to risk-weighted assets(6)			10.32	%			10.57	%			9.03	%			10.29	%			10.08	%			10.32	%			10.08	%
Common equity tier 1 capital to risk-weighted assets(6)			8.72	%			8.84	%			8.24	%			9.46	%			9.26	%			8.72	%			9.26	%
Total capital to risk-weighted assets(5)			12.94	%			13.44	%			11.63	%			12.76	%			11.79	%			12.94	%			11.79	%
Total equity to total assets			11.89	%			11.69	%			11.01	%			12.58	%			12.57	%			11.89	%			12.57	%
Tangible common stockholders' equity to tangible assets(1)			8.09	%			7.84	%			7.77	%			9.16	%			9.10	%			8.09	%			9.10	%
Per Share Amounts:
Book value per share		$	26.11			$	25.28			$	24.45			$	25.50			$	24.99			$	26.11			$	24.99
Tangible book value per share (1)		$	18.38			$	17.59			$	16.64			$	17.88			$	17.40			$	18.38			$	17.40
Basic earnings (loss) per common share		$	0.89			$	0.56			$	(0.18	)		$	0.67			$	0.56			$	1.28			$	1.60
Diluted earnings (loss) per common share		$	0.89			$	0.56			$	(0.18	)		$	0.66			$	0.56			$	1.27			$	1.59
Adjusted diluted earnings per common share(1)		$	0.91			$	0.25			$	(0.18	)		$	0.66			$	0.56			$	0.99			$	1.59
Shares outstanding end of period			24,851,601				24,202,686				24,101,120				24,964,961				25,357,985				24,851,601				25,357,985

Unaudited consolidated balance sheet as of:

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019
ASSETS
Total cash and cash equivalents		$	288,278			$	437,064			$	208,414			$	197,880			$	115,043
Securities - available for sale			242,802				331,126				302,122				248,820				302,917
Securities - held to maturity			6,096				6,285				8,217				8,417				8,517
Equity securities			6,040				6,411				5,678				5,437				5,543
Loans held for sale			36,716				50,382				4,431				2,735				7,499
Loans held for investment			4,852,911				4,393,311				4,320,548				4,194,512				4,209,417
Allowance for credit losses			(90,995	)			(54,613	)			(44,732	)			(29,092	)			(31,895	)
Loans, net			4,761,916				4,338,698				4,275,816				4,165,420				4,177,522
Assets held for sale			—				—				97,895				—				—
FHLB and other restricted stock			18,464				26,345				37,080				19,860				23,960
Premises and equipment, net			105,455				107,736				98,363				96,595				87,112
Other real estate owned ("OREO"), net			1,704				1,962				2,540				3,009				2,849
Goodwill and intangible assets, net			192,041				186,162				188,208				190,286				192,440
Bank-owned life insurance			41,440				41,298				41,122				40,954				40,724
Deferred tax asset, net			7,716				8,544				9,457				3,812				5,971
Other assets			128,119				75,480				74,386				77,072				69,600
Total assets		$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297			$	5,039,697
LIABILITIES
Non-interest bearing deposits		$	1,315,900			$	1,120,949			$	846,412			$	809,696			$	754,233
Interest bearing deposits			2,932,201				2,941,383				2,835,603				2,980,210				2,943,600
Total deposits			4,248,101				4,062,332				3,682,015				3,789,906				3,697,833
Customer repurchase agreements			14,192				6,732				3,693				2,033				14,124
Federal Home Loan Bank advances			435,000				455,000				850,000				430,000				530,000
Payment Protection Program Liquidity Facility			223,713				223,809				—				—				—
Subordinated notes			87,455				87,402				87,347				87,327				49,010
Junior subordinated debentures			39,944				39,816				39,689				39,566				39,443
Other liabilities			94,540				85,531				101,638				74,875				75,594
Total liabilities			5,142,945				4,960,622				4,764,382				4,423,707				4,406,004
EQUITY
Preferred Stock			45,000				45,000				—				—				—
Common stock			279				273				272				272				272
Additional paid-in-capital			488,094				472,795				474,441				473,251				472,368
Treasury stock, at cost			(102,942	)			(102,888	)			(102,677	)			(67,069	)			(52,632	)
Retained earnings			258,254				236,249				222,809				229,030				212,321
Accumulated other comprehensive income (loss)			5,157				5,442				(5,498	)			1,106				1,364
Total stockholders' equity			693,842				656,871				589,347				636,590				633,693
Total liabilities and equity		$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297			$	5,039,697

Unaudited consolidated statement of income:

		For the Three Months Ended																				For the Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019				2020				2019
Interest income:
Loans, including fees		$	48,774			$	50,394			$	48,323			$	52,395			$	50,249			$	147,491			$	143,253
Factored receivables, including fees			31,468				21,101				24,292				25,573				25,570				76,861				75,684
Securities			1,927				2,676				2,107				2,379				2,784				6,710				8,095
FHLB and other restricted stock			122				148				204				165				209				474				547
Cash deposits			73				79				488				659				603				640				2,403
Total interest income			82,364				74,398				75,414				81,171				79,415				232,176				229,982
Interest expense:
Deposits			5,834				7,584				9,677				10,961				11,036				23,095				29,264
Subordinated notes			1,348				1,321				1,347				1,035				840				4,016				2,518
Junior subordinated debentures			462				554				646				687				719				1,662				2,223
Other borrowings			341				688				1,244				2,080				2,055				2,273				6,482
Total interest expense			7,985				10,147				12,914				14,763				14,650				31,046				40,487
Net interest income			74,379				64,251				62,500				66,408				64,765				201,130				189,495
Credit loss expense (benefit)			(258	)			13,609				20,298				382				2,865				33,649				7,560
Net interest income after credit loss expense			74,637				50,642				42,202				66,026				61,900				167,481				181,935
Non-interest income:
Service charges on deposits			1,470				573				1,588				1,889				1,937				3,631				5,243
Card income			2,091				1,941				1,800				1,943				2,015				5,832				5,930
Net OREO gains (losses) and valuation adjustments			(41	)			(101	)			(257	)			50				(56	)			(399	)			301
Net gains (losses) on sale of securities			3,109				63				38				39				19				3,210				22
Fee income			1,402				1,304				1,686				1,686				1,624				4,392				4,755
Insurance commissions			990				864				1,051				1,092				1,247				2,905				3,127
Gain on sale of subsidiary			—				9,758				—				—				—				9,758				—
Other			1,472				5,627				1,571				1,967				956				8,670				3,525
Total non-interest income			10,493				20,029				7,477				8,666				7,742				37,999				22,903
Non-interest expense:
Salaries and employee benefits			31,651				30,804				30,722				29,586				28,717				93,177				83,276
Occupancy, furniture and equipment			5,574				4,964				5,182				4,667				4,505				15,720				13,529
FDIC insurance and other regulatory assessments			360				495				315				(302	)			(2	)			1,170				600
Professional fees			3,265				1,651				2,107				1,904				1,969				7,023				5,384
Amortization of intangible assets			2,141				2,046				2,078				2,154				2,228				6,265				6,977
Advertising and promotion			1,105				1,151				1,292				1,347				1,379				3,548				4,779
Communications and technology			5,569				5,444				5,501				5,732				5,382				16,514				15,244
Other			5,632				6,171				7,556				7,573				7,975				19,359				21,634
Total non-interest expense			55,297				52,726				54,753				52,661				52,153				162,776				151,423
Net income (loss) before income tax			29,833				17,945				(5,074	)			22,031				17,489				42,704				53,415
Income tax expense (benefit)			6,929				4,505				(624	)			5,322				3,172				10,810				11,580
Net income (loss)		$	22,904			$	13,440			$	(4,450	)		$	16,709			$	14,317			$	31,894			$	41,835
Dividends on preferred stock			(899	)			—				—				—				—				(899	)			—
Net income available to common stockholders		$	22,005			$	13,440			$	(4,450	)		$	16,709			$	14,317			$	30,995			$	41,835

Earnings per share:

		For the Three Months Ended																				For the Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019				2020				2019
Basic
Net income (loss) to common stockholders		$	22,005			$	13,440			$	(4,450	)		$	16,709			$	14,317			$	30,995			$	41,835
Weighted average common shares outstanding			24,592,092				23,987,049				24,314,329				25,089,447				25,621,054				24,298,897				26,228,499
Basic earnings (loss) per common share		$	0.89			$	0.56			$	(0.18	)		$	0.67			$	0.56			$	1.28			$	1.60
Diluted
Net income (loss) to common stockholders - diluted		$	22,005			$	13,440			$	(4,450	)		$	16,709			$	14,317			$	30,995			$	41,835
Weighted average common shares outstanding			24,592,092				23,987,049				24,314,329				25,089,447				25,621,054				24,298,897				26,228,499
Dilutive effects of:
Assumed exercises of stock options			48,102				38,627				—				69,865				60,068				53,232				61,054
Restricted stock awards			67,907				37,751				—				70,483				45,631				65,893				40,572
Restricted stock units			18,192				4,689				—				13,264				3,045				15,198				57
Performance stock units - market based			76,095				6,326				—				11,803				4,673				30,995				1,558
Performance stock units - performance based			—				—				—				—				—				—				—
Weighted average shares outstanding - diluted			24,802,388				24,074,442				24,314,329				25,254,862				25,734,471				24,464,215				26,331,740
Diluted earnings (loss) per common share		$	0.89			$	0.56			$	(0.18	)		$	0.66			$	0.56			$	1.27			$	1.59
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
		For the Three Months Ended																				For the Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
		2020				2020				2020				2019				2019				2020				2019
Stock options			98,513				148,528				225,055				66,019				67,023				98,513				67,023
Restricted stock awards			—				109,834				147,748				—				3,209				—				3,209
Restricted stock units			—				38,801				55,228				—				—				—				54,077
Performance stock units - market based			—				76,461				67,707				55,228				55,228				—				55,228
Performance stock units - performance based			261,125				262,625				254,000				254,000				—				261,125				—

Loans held for investment summarized as of:

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019
Commercial real estate		$	762,531			$	910,261			$	985,757			$	1,046,961			$	1,115,559
Construction, land development, land			244,512				213,617				198,050				160,569				164,186
1-4 family residential properties			164,785				168,707				169,703				179,425				186,405
Farmland			110,966				125,259				133,579				154,975				161,447
Commercial			1,536,903				1,518,656				1,412,822				1,342,683				1,369,505
Factored receivables			1,016,337				561,576				661,100				619,986				599,651
Consumer			17,106				18,450				20,326				21,925				24,967
Mortgage warehouse			999,771				876,785				739,211				667,988				587,697
Total loans		$	4,852,911			$	4,393,311			$	4,320,548			$	4,194,512			$	4,209,417

Our total loans held for investment 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.

Commercial finance loans are further summarized below:

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019
Commercial - Equipment		$	509,849			$	487,145			$	479,483			$	461,555			$	429,412
Commercial - Asset-based lending			160,711				176,235				245,001				168,955				247,026
Factored receivables			1,016,337				561,576				661,100				619,986				599,651
Commercial finance		$	1,686,897			$	1,224,956			$	1,385,584			$	1,250,496			$	1,276,089
Commercial finance % of total loans			35	%			28	%			32	%			30	%			30	%

National lending loans are further summarized below:

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019
Mortgage warehouse		$	999,771			$	876,785			$	739,211			$	667,988			$	587,697
Commercial - Liquid credit			188,034				192,118				172,380				81,353				37,386
Commercial - Premium finance			—				—				—				101,015				101,562
National lending		$	1,187,805			$	1,068,903			$	911,591			$	850,356			$	726,645
National lending % of total loans			24	%			24	%			21	%			20	%			17	%

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

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019
Average community banking		$	2,047,059			$	2,111,615			$	2,041,256			$	2,170,149			$	2,193,533
Average commercial finance			1,480,593				1,259,584				1,292,749				1,260,000				1,208,823
Average national lending			998,411				1,038,476				711,837				704,244				541,367
Average total loans		$	4,526,063			$	4,409,675			$	4,045,842			$	4,134,393			$	3,943,723
Community banking yield			5.05	%			5.23	%			5.67	%			5.89	%			5.79	%
Commercial finance yield			11.23	%			10.21	%			11.00	%			11.64	%			12.31	%
National lending yield			4.98	%			4.67	%			4.80	%			4.96	%			4.63	%
Total loan yield			7.05	%			6.52	%			7.22	%			7.48	%			7.63	%

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,				June 30,				March 31,				December 31,				September 30,
		2020				2020				2020				2019				2019
Factored receivable period end balance		$	948,987,000			$	528,379,000			$	641,366,000			$	573,372,000			$	562,009,000
Yield on average receivable balance			15.65	%			15.48	%			16.13	%			17.20	%			18.23	%
Rolling twelve quarter annual charge-off rate			0.43	%			0.43	%			0.42	%			0.39	%			0.36	%
Factored receivables - transportation concentration			88	%			85	%			80	%			81	%			83	%
Interest income, including fees		$	30,068,000			$	20,387,000			$	23,497,000			$	24,813,000			$	24,869,000
Non-interest income(1)			1,157,000				1,072,000				1,296,000				1,154,000				1,291,000
Factored receivable total revenue			31,225,000				21,459,000				24,793,000				25,967,000				26,160,000
Average net funds employed			694,170,000				477,112,000				537,138,000				524,546,000				494,198,000
Yield on average net funds employed			17.89	%			18.09	%			18.56	%			19.64	%			21.00	%
Accounts receivable purchased		$	1,984,490,000			$	1,238,465,000			$	1,450,618,000			$	1,489,538,000			$	1,450,905,000
Number of invoices purchased			1,027,839				812,902				878,767				896,487				890,986
Average invoice size		$	1,931			$	1,524			$	1,651			$	1,662			$	1,628
Average invoice size - transportation		$	1,787			$	1,378			$	1,481			$	1,507			$	1,497
Average invoice size - non-transportation		$	5,181			$	4,486			$	4,061			$	3,891			$	3,467

⁽¹⁾  September 30, 2020 balance excludes the $2.0 million gain recognized on the increased value of the receivable due from CVLG resulting from the amended TFS acquisition agreement.

Deposits summarized as of:

		September 30,				June 30,				March 31,				December 31,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019
Non-interest bearing demand		$	1,315,900			$	1,120,949			$	846,412			$	809,696			$	754,233
Interest bearing demand			634,272				648,309				583,445				580,323				587,123
Individual retirement accounts			94,933				97,388				101,743				104,472				108,593
Money market			384,476				397,914				412,376				497,105				424,162
Savings			405,954				391,624				367,163				363,270				356,368
Certificates of deposit			857,514				937,766				1,056,012				1,084,425				1,120,850
Brokered time deposits			344,986				258,378				314,864				350,615				346,504
Other brokered deposits			210,066				210,004				—				—				—
Total deposits		$	4,248,101			$	4,062,332			$	3,682,015			$	3,789,906			$	3,697,833

Net interest margin summarized for the three months ended:

	September 30, 2020												June 30, 2020
	Average								Average				Average								Average
(Dollars in thousands)	Balance				Interest				Rate				Balance				Interest				Rate
Interest earning assets:
Interest earning cash balances	$	224,958			$	73				0.13	%		$	262,615			$	79				0.12	%
Taxable securities		259,470				1,674				2.57	%			303,519				2,400				3.18	%
Tax-exempt securities		39,847				253				2.53	%			43,796				276				2.53	%
FHLB and other restricted stock		22,121				122				2.19	%			36,375				148				1.64	%
Loans		4,526,063				80,242				7.05	%			4,409,675				71,495				6.52	%
Total interest earning assets	$	5,072,459			$	82,364				6.46	%		$	5,055,980			$	74,398				5.92	%
Non-interest earning assets:
Other assets		446,249												431,092
Total assets	$	5,518,708											$	5,487,072
Interest bearing liabilities:
Deposits:
Interest bearing demand	$	635,287			$	207				0.13	%		$	630,023			$	287				0.18	%
Individual retirement accounts		95,962				300				1.24	%			100,211				359				1.44	%
Money market		385,620				263				0.27	%			398,276				363				0.37	%
Savings		400,102				152				0.15	%			382,521				144				0.15	%
Certificates of deposit		905,075				3,782				1.66	%			1,008,644				5,055				2.02	%
Brokered time deposits		247,928				941				1.51	%			301,262				1,374				1.83	%
Other brokered deposits		251,701				189				0.30	%			4,670				2				0.17	%
Total interest bearing deposits		2,921,675				5,834				0.79	%			2,825,607				7,584				1.08	%
Federal Home Loan Bank advances		255,163				143				0.22	%			678,225				572				0.34	%
Subordinated notes		87,425				1,348				6.13	%			87,368				1,321				6.08	%
Junior subordinated debentures		39,874				462				4.61	%			39,745				554				5.61	%
Other borrowings		236,297				198				0.33	%			137,045				116				0.34	%
Total interest bearing liabilities	$	3,540,434			$	7,985				0.90	%		$	3,767,990			$	10,147				1.08	%
Non-interest bearing liabilities and equity:
Non-interest bearing demand deposits		1,213,494												1,038,979
Other liabilities		76,453												69,845
Total equity		688,327												610,258
Total liabilities and equity	$	5,518,708											$	5,487,072
Net interest income					$	74,379											$	64,251
Interest spread										5.56	%											4.84	%
Net interest margin										5.83	%											5.11	%

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.

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,		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
except per share amounts)		2020				2020				2020				2019				2019				2020				2019
Net income available to common stockholders		$	22,005			$	13,440			$	(4,450	)		$	16,709			$	14,317			$	30,995			$	41,835
Transaction costs			827				—				—				—				—				827				—
Gain on sale of subsidiary or division			—				(9,758	)			—				—				—				(9,758	)			—
Tax effect of adjustments			(197	)			2,451				—				—				—				2,254				—
Adjusted net income available to common stockholders - diluted		$	22,635			$	6,133			$	(4,450	)		$	16,709			$	14,317			$	24,318			$	41,835
Weighted average shares outstanding - diluted			24,802,388				24,074,442				24,314,329				25,254,862				25,734,471				24,464,215				26,331,740
Adjusted diluted earnings per common share		$	0.91			$	0.25			$	(0.18	)		$	0.66			$	0.56			$	0.99			$	1.59
Average total stockholders' equity		$	688,327			$	610,258			$	627,369			$	647,546			$	646,041			$	642,151			$	647,787
Average preferred stock liquidation preference			(45,000	)			(5,934	)			—				—				—				(17,080	)			—
Average total common stockholders' equity			643,327				604,324				627,369				647,546				646,041				625,071				647,787
Average goodwill and other intangibles			(192,682	)			(187,255	)			(189,359	)			(191,551	)			(193,765	)			(189,776	)			(196,035	)
Average tangible common stockholders' equity		$	450,645			$	417,069			$	438,010			$	455,995			$	452,276			$	435,295			$	451,752
Net income available to common stockholders		$	22,005			$	13,440			$	(4,450	)		$	16,709			$	14,317			$	30,995			$	41,835
Average tangible common equity			450,645				417,069				438,010				455,995				452,276				435,295				451,752
Return on average tangible common equity			19.43	%			12.96	%			(4.09	%)			14.54	%			12.56	%			9.51	%			12.38	%
Net interest income		$	74,379			$	64,251			$	62,500			$	66,408			$	64,765			$	201,130			$	189,495
Non-interest income			10,493				20,029				7,477				8,666				7,742				37,999				22,903
Operating revenue			84,872				84,280				69,977				75,074				72,507				239,129				212,398
Gain on sale of subsidiary or division			—				(9,758	)			—				—				—				(9,758	)			—
Adjusted operating revenue		$	84,872			$	74,522			$	69,977			$	75,074			$	72,507			$	229,371			$	212,398
Non-interest expenses		$	55,297			$	52,726			$	54,753			$	52,661			$	52,153			$	162,776			$	151,423
Transaction costs			(827	)			—				—				—				—				(827	)			—
Adjusted non-interest expenses		$	54,470			$	52,726			$	54,753			$	52,661			$	52,153			$	161,949			$	151,423
Adjusted efficiency ratio			64.18	%			70.75	%			78.24	%			70.15	%			71.93	%			70.61	%			71.29	%
Adjusted net non-interest expense to average assets ratio:
Non-interest expenses		$	55,297			$	52,726			$	54,753			$	52,661			$	52,153			$	162,776			$	151,423
Transaction costs			(827	)			—				—				—				—				(827	)			—
Adjusted non-interest expenses		$	54,470			$	52,726			$	54,753			$	52,661			$	52,153			$	161,949			$	151,423
Total non-interest income		$	10,493			$	20,029			$	7,477			$	8,666			$	7,742			$	37,999			$	22,903
Gain on sale of subsidiary or division			—				(9,758	)			—				—				—				(9,758	)			—
Adjusted non-interest income		$	10,493			$	10,271			$	7,477			$	8,666			$	7,742			$	28,241			$	22,903
Adjusted net non-interest expenses		$	43,977			$	42,455			$	47,276			$	43,995			$	44,411			$	133,708			$	128,520
Average total assets		$	5,518,708			$	5,487,072			$	4,906,547			$	5,050,860			$	4,840,540			$	5,304,903			$	4,680,234
Adjusted net non-interest expense to average assets ratio			3.17	%			3.11	%			3.88	%			3.46	%			3.64	%			3.37	%			3.67	%
Total stockholders' equity		$	693,842			$	656,871			$	589,347			$	636,590			$	633,693			$	693,842			$	633,693
Preferred stock liquidation preference			(45,000	)			(45,000	)			—				—				—				(45,000	)			—
Total common stockholders' equity			648,842				611,871				589,347				636,590				633,693				648,842				633,693
Goodwill and other intangibles			(192,041	)			(186,162	)			(188,208	)			(190,286	)			(192,440	)			(192,041	)			(192,440	)
Tangible common stockholders' equity		$	456,801			$	425,709			$	401,139			$	446,304			$	441,253			$	456,801			$	441,253
Common shares outstanding			24,851,601				24,202,686				24,101,120				24,964,961				25,357,985				24,851,601				25,357,985
Tangible book value per share		$	18.38			$	17.59			$	16.64			$	17.88			$	17.40			$	18.38			$	17.40
Total assets at end of period		$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297			$	5,039,697			$	5,836,787			$	5,039,697
Goodwill and other intangibles			(192,041	)			(186,162	)			(188,208	)			(190,286	)			(192,440	)			(192,041	)			(192,440	)
Tangible assets at period end		$	5,644,746			$	5,431,331			$	5,165,521			$	4,870,011			$	4,847,257			$	5,644,746			$	4,847,257
Tangible common stockholders' equity ratio			8.09	%			7.84	%			7.77	%			9.16	%			9.10	%			8.09	%			9.10	%

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
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
(Dollars in thousands)		2020				2020				2020				2019				2019				2020				2019
Loan discount accretion		$	4,104			$	2,139			$	2,134			$	1,555			$	1,159			$	8,377			$	4,013

3)	Asset quality ratios exclude loans held for sale, except for non-performing assets to total assets.
4)	Past due ratio has been revised to exclude nonaccrual loans with contractual payments less than 30 days past due.
5)	Beginning January 1, 2020, the allowance for credit losses was calculated in accordance with Accounting Standards Codification Topic 326, “Financial Instruments – Credit Losses” (“ASC 326”).
6)	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