DALLAS, Jan. 21, 2021 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the fourth 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 Fourth Quarter Highlights

• For the fourth quarter of 2020, net income to common shareholders was $31.3 million, and diluted earnings per share were $1.25.
• Net interest income was $83.6 million.
• Net interest margin was 6.20%. Yield on loans and the average cost of our total deposits were 7.20% and 0.38%, respectively.
• Non-interest income was $22.4 million, including $14.2 million related to the Transport Financial Solutions (“TFS”) acquisition as described below.
• Non-interest expense was $59.3 million. Our occupancy, furniture and equipment expense includes $1.4 million related to our decision to consolidate part of our El Paso, TX factoring operations to our TBC headquarters in Coppell, TX.
• Credit loss expense for the quarter ended December 31, 2020 was $4.7 million. Components of our credit loss expense included:
  • An $8.0 million reduction in current expected losses in the loan portfolio and off balance sheet loan commitments due to improvements in our macroeconomic forecasts.
  • $11.6 million expense due to net increases in specific reserves, including $11.5 million related to the TFS acquisition as discussed below.
  • Net charge-offs of $1.3 million.
• Triumph Business Capital and TriumphPay processed a combined $4.034 billion in transportation invoice payments.
• The total dollar value of invoices purchased by Triumph Business Capital was $2.461 billion with an average invoice size of $2,070. The transportation average invoice size for the quarter was $1,943.
• TriumphPay processed 1,758,865 invoices paying carriers a total of $1.815 billion.

Balance Sheet

Total loans held for investment increased $143.9 million, or 3.0%, during the fourth quarter to $4.997 billion at December 31, 2020. Average loans for the quarter increased $350.7 million, or 7.7%, to $4.877 billion. The commercial finance portfolio increased $187.5 million, or 11.1%, to $1.874 billion, the national lending portfolio increased $33.8 million, or 2.8%, to $1.222 billion, and the community banking portfolio decreased $77.5 million, or 3.9%, to $1.901 billion during the quarter.

Total deposits were $4.717 billion at December 31, 2020, an increase of $468.5 million, or 11.0%, in the fourth quarter of 2020. Non-interest-bearing deposits accounted for 29% of total deposits and non-time deposits accounted for 70% of total deposits at December 31, 2020.  

Asset Quality and Allowance for Credit Loss

Non-performing assets were 1.15% of total assets at December 31, 2020 compared to 1.52% of total assets at September 30, 2020. The ratio of past due to total loans increased to 3.22% at December 31, 2020 from 2.40% at September 30, 2020. These ratios were impacted by items related to our TFS acquisition, as discussed below.

We recorded total net charge-offs of $1.3 million, or 0.03% of average loans, for the quarter ended December 31, 2020. Net charge-offs for the year ended December 31, 2020 were 0.10% of average loans.

Our ACL as a percentage of loans held for investment increased 4 basis points during the quarter to 1.92% at December 31, 2020. The recorded reserves on the acquired over-formula advance portfolio contributed 97 basis points to the ratio at December 31, 2020.

CARES Act and Paycheck Protection Program

As of December 31, 2020, our balance sheet reflected deferrals on outstanding loan balances of $104.6 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 December 31, 2020, these deferred balances carried accrued interest of $0.7 million.

As of December 31, 2020, we carried 1,913 PPP loans representing a balance of $189.9 million classified as commercial loans. We have received approximately $7.7 million in total fees from the SBA, $2.0 million and $4.6 million of which were recognized in earnings during the three and twelve months ended December 31, 2020, respectively. The remaining fees will be amortized over the respective lives 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. Developments related to that transaction impacted our operating results for the three months ended December 31, 2020, as well as our asset quality statistics for December 31, 2020, as follows:

• We recognized $8.9 million of non-interest income for the three months ended December 31, 2020 related to CVLG’s delivery of proceeds to us resulting from the liquidation of its acquired stock in connection with the September 23, 2020 Account Management Agreement, Amendment to Purchase Agreement and Mutual Release.
• We recorded $11.5 million in credit loss expense to increase the specific reserve on over-advances to the largest over-formula advance carrier. This expense was partially offset by a $5.3 million increase in our indemnification asset, which was recorded to other noninterest income.
• Approximately 17 basis points of our 1.15% nonperforming assets ratio at December 31, 2020 consisted of $10.0 million of the acquired over-formula advance portfolio which represents the portion that is not covered by CVLG’s indemnification. An additional 10 basis points of this ratio at December 31, 2020 consisted of $6.0 million of the Misdirected Payments, as discussed below.
• Approximately 1.24% of our 3.22% past-due loan ratio at December 31, 2020 consisted of $62.2 million of past due factored receivables related to the over-formula advance portfolio. An additional 39 basis points of this ratio at December 31, 2020 consisted of the $19.6 million of Misdirected Payments, as discussed below.
• At year end, the face value of the acquired over-formula advances was $62.1 million, the total reserve on acquired over-formula advances was $48.5 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 $35.8 million.
  

As of December 31, 2020 we carry a separate $19.6 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 aforementioned 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 also filed a declaratory judgment action in Federal District Court for the Southern District of Florida seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. Based on our legal analysis and discussions with our counsel advising us on this matter, we 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 December 31, 2020. The full amount of such receivable is reflected as past due factored receivables as of December 31, 2020, and $6.0 million of such receivable, reflecting the portion of such receivable that was greater than 90 days past due, is included in our non-performing asset calculation as of December 31, 2020 in accordance with our policy.

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 Friday, January 22, 2021. Todd Ritterbusch, Chief Lending Officer, and Geoff Brenner, Triumph Business Capital CEO, 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/tbk210122.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 (including 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 (including related to our pending litigation with the United States Postal Service and a counterparty relating to certain misdirected payments) 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 October 20, 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 Years Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019				2020				2019
Financial Highlights:
Total assets		$	5,935,791			$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297			$	5,935,791			$	5,060,297
Loans held for investment		$	4,996,776			$	4,852,911			$	4,393,311			$	4,320,548			$	4,194,512			$	4,996,776			$	4,194,512
Deposits		$	4,716,600			$	4,248,101			$	4,062,332			$	3,682,015			$	3,789,906			$	4,716,600			$	3,789,906
Net income available to common stockholders		$	31,328			$	22,005			$	13,440			$	(4,450	)		$	16,709			$	62,323			$	58,544
Performance Ratios - Annualized:
Return on average assets			2.21	%			1.65	%			0.99	%			(0.36	%)			1.31	%			1.18	%			1.23	%
Return on average total equity			17.73	%			13.24	%			8.86	%			(2.85	%)			10.24	%			9.67	%			9.04	%
Return on average common equity			18.44	%			13.61	%			8.94	%			(2.85	%)			10.24	%			9.77	%			9.04	%
Return on average tangible common equity (1)			25.70	%			19.43	%			12.96	%			(4.09	%)			14.54	%			13.92	%			12.93	%
Yield on loans(2)			7.20	%			7.05	%			6.52	%			7.22	%			7.48	%			7.00	%			7.75	%
Cost of interest bearing deposits			0.54	%			0.79	%			1.08	%			1.34	%			1.45	%			0.93	%			1.40	%
Cost of total deposits			0.38	%			0.56	%			0.79	%			1.05	%			1.15	%			0.67	%			1.12	%
Cost of total funds			0.51	%			0.67	%			0.85	%			1.23	%			1.35	%			0.80	%			1.36	%
Net interest margin(2)			6.20	%			5.83	%			5.11	%			5.63	%			5.72	%			5.71	%			5.92	%
Net non-interest expense to average assets			2.54	%			3.23	%			2.40	%			3.88	%			3.46	%			2.98	%			3.61	%
Adjusted net non-interest expense to average assets (1)			2.54	%			3.17	%			3.11	%			3.88	%			3.46	%			3.14	%			3.61	%
Efficiency ratio			55.95	%			65.15	%			62.56	%			78.24	%			70.15	%			64.35	%			70.99	%
Adjusted efficiency ratio (1)			55.95	%			64.18	%			70.75	%			78.24	%			70.15	%			65.97	%			70.99	%
Asset Quality:(3)
Past due to total loans(4)			3.22	%			2.40	%			1.50	%			1.99	%			1.74	%			3.22	%			1.74	%
Non-performing loans to total loans			1.16	%			1.17	%			1.27	%			1.26	%			0.97	%			1.16	%			0.97	%
Non-performing assets to total assets			1.15	%			1.52	%			1.20	%			1.09	%			0.87	%			1.15	%			0.87	%
ACL to non-performing loans(5)			164.98	%			159.67	%			97.66	%			82.37	%			71.63	%			164.98	%			71.63	%
ACL to total loans(5)			1.92	%			1.88	%			1.24	%			1.04	%			0.69	%			1.92	%			0.69	%
Net charge-offs to average loans			0.03	%			0.02	%			0.02	%			0.04	%			0.08	%			0.10	%			0.17	%
Capital:
Tier 1 capital to average assets(6)			10.80	%			10.75	%			9.98	%			9.62	%			10.03	%			10.80	%			10.03	%
Tier 1 capital to risk-weighted assets(6)			10.60	%			10.32	%			10.57	%			9.03	%			10.29	%			10.60	%			10.29	%
Common equity tier 1 capital to risk-weighted assets(6)			9.05	%			8.72	%			8.84	%			8.24	%			9.46	%			9.05	%			9.46	%
Total capital to risk-weighted assets(5)			13.03	%			12.94	%			13.44	%			11.63	%			12.76	%			13.03	%			12.76	%
Total equity to total assets			12.24	%			11.89	%			11.69	%			11.01	%			12.58	%			12.24	%			12.58	%
Tangible common stockholders' equity to tangible assets(1)			8.56	%			8.09	%			7.84	%			7.77	%			9.16	%			8.56	%			9.16	%
Per Share Amounts:
Book value per share		$	27.42			$	26.11			$	25.28			$	24.45			$	25.50			$	27.42			$	25.50
Tangible book value per share (1)		$	19.78			$	18.38			$	17.59			$	16.64			$	17.88			$	19.78			$	17.88
Basic earnings (loss) per common share		$	1.27			$	0.89			$	0.56			$	(0.18	)		$	0.67			$	2.56			$	2.26
Diluted earnings (loss) per common share		$	1.25			$	0.89			$	0.56			$	(0.18	)		$	0.66			$	2.53			$	2.25
Adjusted diluted earnings per common share(1)		$	1.25			$	0.91			$	0.25			$	(0.18	)		$	0.66			$	2.26			$	2.25
Shares outstanding end of period			24,868,218				24,851,601				24,202,686				24,101,120				24,964,961				24,868,218				24,964,961

Unaudited consolidated balance sheet as of:

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019
ASSETS
Total cash and cash equivalents		$	314,393			$	288,278			$	437,064			$	208,414			$	197,880
Securities - available for sale			224,310				242,802				331,126				302,122				248,820
Securities - held to maturity, net			5,919				6,096				6,285				8,217				8,417
Equity securities			5,826				6,040				6,411				5,678				5,437
Loans held for sale			24,546				36,716				50,382				4,431				2,735
Loans held for investment			4,996,776				4,852,911				4,393,311				4,320,548				4,194,512
Allowance for credit losses			(95,739	)			(90,995	)			(54,613	)			(44,732	)			(29,092	)
Loans, net			4,901,037				4,761,916				4,338,698				4,275,816				4,165,420
Assets held for sale			—				—				—				97,895				—
FHLB and other restricted stock			6,751				18,464				26,345				37,080				19,860
Premises and equipment, net			103,404				105,455				107,736				98,363				96,595
Other real estate owned ("OREO"), net			1,432				1,704				1,962				2,540				3,009
Goodwill and intangible assets, net			189,922				192,041				186,162				188,208				190,286
Bank-owned life insurance			41,608				41,440				41,298				41,122				40,954
Deferred tax asset, net			6,427				7,716				8,544				9,457				3,812
Indemnification asset			36,225				31,218				—				—				—
Other assets			73,991				96,901				75,480				74,386				77,072
Total assets		$	5,935,791			$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297
LIABILITIES
Non-interest bearing deposits		$	1,352,785			$	1,315,900			$	1,120,949			$	846,412			$	809,696
Interest bearing deposits			3,363,815				2,932,201				2,941,383				2,835,603				2,980,210
Total deposits			4,716,600				4,248,101				4,062,332				3,682,015				3,789,906
Customer repurchase agreements			3,099				14,192				6,732				3,693				2,033
Federal Home Loan Bank advances			105,000				435,000				455,000				850,000				430,000
Payment Protection Program Liquidity Facility			191,860				223,713				223,809				—				—
Subordinated notes			87,509				87,455				87,402				87,347				87,327
Junior subordinated debentures			40,072				39,944				39,816				39,689				39,566
Other liabilities			64,870				94,540				85,531				101,638				74,875
Total liabilities			5,209,010				5,142,945				4,960,622				4,764,382				4,423,707
EQUITY
Preferred Stock			45,000				45,000				45,000				—				—
Common stock			280				279				273				272				272
Additional paid-in-capital			489,151				488,094				472,795				474,441				473,251
Treasury stock, at cost			(103,052	)			(102,942	)			(102,888	)			(102,677	)			(67,069	)
Retained earnings			289,583				258,254				236,249				222,809				229,030
Accumulated other comprehensive income (loss)			5,819				5,157				5,442				(5,498	)			1,106
Total stockholders' equity			726,781				693,842				656,871				589,347				636,590
Total liabilities and equity		$	5,935,791			$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297

Unaudited consolidated statement of income:

		For the Three Months Ended																				For the Years Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019				2020				2019
Interest income:
Loans, including fees		$	50,723			$	48,774			$	50,394			$	48,323			$	52,395			$	198,214			$	195,648
Factored receivables, including fees			37,573				31,468				21,101				24,292				25,573				114,434				101,257
Securities			1,519				1,927				2,676				2,107				2,379				8,229				10,474
FHLB and other restricted stock			56				122				148				204				165				530				712
Cash deposits			68				73				79				488				659				708				3,062
Total interest income			89,939				82,364				74,398				75,414				81,171				322,115				311,153
Interest expense:
Deposits			4,308				5,834				7,584				9,677				10,961				27,403				40,225
Subordinated notes			1,347				1,348				1,321				1,347				1,035				5,363				3,553
Junior subordinated debentures			452				462				554				646				687				2,114				2,910
Other borrowings			234				341				688				1,244				2,080				2,507				8,562
Total interest expense			6,341				7,985				10,147				12,914				14,763				37,387				55,250
Net interest income			83,598				74,379				64,251				62,500				66,408				284,728				255,903
Credit loss expense (benefit)			4,680				(258	)			13,609				20,298				382				38,329				7,942
Net interest income after credit loss expense			78,918				74,637				50,642				42,202				66,026				246,399				247,961
Non-interest income:
Service charges on deposits			1,643				1,470				573				1,588				1,889				5,274				7,132
Card income			1,949				2,091				1,941				1,800				1,943				7,781				7,873
Net OREO gains (losses) and valuation adjustments			(217	)			(41	)			(101	)			(257	)			50				(616	)			351
Net gains (losses) on sale of securities			16				3,109				63				38				39				3,226				61
Fee income			1,615				1,402				1,304				1,686				1,686				6,007				6,441
Insurance commissions			1,327				990				864				1,051				1,092				4,232				4,219
Gain on sale of subsidiary			—				—				9,758				—				—				9,758				—
Other			16,053				1,472				5,627				1,571				1,967				24,723				5,492
Total non-interest income			22,386				10,493				20,029				7,477				8,666				60,385				31,569
Non-interest expense:
Salaries and employee benefits			33,798				31,651				30,804				30,722				29,586				126,975				112,862
Occupancy, furniture and equipment			7,046				5,574				4,964				5,182				4,667				22,766				18,196
FDIC insurance and other regulatory assessments			350				360				495				315				(302	)			1,520				298
Professional fees			2,326				3,265				1,651				2,107				1,904				9,349				7,288
Amortization of intangible assets			2,065				2,141				2,046				2,078				2,154				8,330				9,131
Advertising and promotion			1,170				1,105				1,151				1,292				1,347				4,718				6,126
Communications and technology			5,639				5,569				5,444				5,501				5,732				22,153				20,976
Other			6,904				5,632				6,171				7,556				7,573				26,263				29,207
Total non-interest expense			59,298				55,297				52,726				54,753				52,661				222,074				204,084
Net income (loss) before income tax			42,006				29,833				17,945				(5,074	)			22,031				84,710				75,446
Income tax expense (benefit)			9,876				6,929				4,505				(624	)			5,322				20,686				16,902
Net income (loss)		$	32,130			$	22,904			$	13,440			$	(4,450	)		$	16,709			$	64,024			$	58,544
Dividends on preferred stock			(802	)			(899	)			—				—				—				(1,701	)			—
Net income available to common stockholders		$	31,328			$	22,005			$	13,440			$	(4,450	)		$	16,709			$	62,323			$	58,544

Earnings per share:

		For the Three Months Ended																				For the Years Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019				2020				2019
Basic
Net income (loss) to common stockholders		$	31,328			$	22,005			$	13,440			$	(4,450	)		$	16,709			$	62,323			$	58,544
Weighted average common shares outstanding			24,653,099				24,592,092				23,987,049				24,314,329				25,089,447				24,387,932				25,941,395
Basic earnings (loss) per common share		$	1.27			$	0.89			$	0.56			$	(0.18	)		$	0.67			$	2.56			$	2.26
Diluted
Net income (loss) to common stockholders - diluted		$	31,328			$	22,005			$	13,440			$	(4,450	)		$	16,709			$	62,323			$	58,544
Weighted average common shares outstanding			24,653,099				24,592,092				23,987,049				24,314,329				25,089,447				24,387,932				25,941,395
Dilutive effects of:
Assumed exercises of stock options			101,664				48,102				38,627				—				69,865				64,104				63,808
Restricted stock awards			136,239				67,907				37,751				—				70,483				86,498				47,242
Restricted stock units			50,156				18,192				4,689				—				13,264				25,978				3,441
Performance stock units - market based			112,228				76,095				6,326				—				11,803				51,304				4,119
Performance stock units - performance based			—				—				—				—				—				—				—
Weighted average shares outstanding - diluted			25,053,386				24,802,388				24,074,442				24,314,329				25,254,862				24,615,816				26,060,005
Diluted earnings (loss) per common share		$	1.25			$	0.89			$	0.56			$	(0.18	)		$	0.66			$	2.53			$	2.25
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
		For the Three Months Ended																				For the Years Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
		2020				2020				2020				2020				2019				2020				2019
Stock options			—				98,513				148,528				225,055				66,019				64,947				66,019
Restricted stock awards			—				—				109,834				147,748				—				—				—
Restricted stock units			—				—				38,801				55,228				—				—				—
Performance stock units - market based			—				—				76,461				67,707				55,228				—				55,228
Performance stock units - performance based			256,625				261,125				262,625				254,000				254,000				256,625				254,000

Loans held for investment summarized as of:

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019
Commercial real estate		$	779,158			$	762,531			$	910,261			$	985,757			$	1,046,961
Construction, land development, land			219,647				244,512				213,617				198,050				160,569
1-4 family residential properties			157,147				164,785				168,707				169,703				179,425
Farmland			103,685				110,966				125,259				133,579				154,975
Commercial			1,562,957				1,536,903				1,518,656				1,412,822				1,342,683
Factored receivables			1,120,770				1,016,337				561,576				661,100				619,986
Consumer			15,838				17,106				18,450				20,326				21,925
Mortgage warehouse			1,037,574				999,771				876,785				739,211				667,988
Total loans		$	4,996,776			$	4,852,911			$	4,393,311			$	4,320,548			$	4,194,512

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:

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019
Commercial - Equipment		$	573,163			$	509,849			$	487,145			$	479,483			$	461,555
Commercial - Asset-based lending			180,488				160,711				176,235				245,001				168,955
Factored receivables			1,120,770				1,016,337				561,576				661,100				619,986
Commercial finance		$	1,874,421			$	1,686,897			$	1,224,956			$	1,385,584			$	1,250,496
Commercial finance % of total loans			38	%			35	%			28	%			32	%			30	%

National lending loans are further summarized below:

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019
Mortgage warehouse		$	1,037,574			$	999,771			$	876,785			$	739,211			$	667,988
Commercial - Liquid credit			184,027				188,034				192,118				172,380				81,353
Commercial - Premium finance			—				—				—				—				101,015
National lending		$	1,221,601			$	1,187,805			$	1,068,903			$	911,591			$	850,356
National lending % of total loans			24	%			24	%			24	%			21	%			20	%

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

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019
Average community banking		$	1,963,435			$	2,047,059			$	2,111,615			$	2,041,256			$	2,170,149
Average commercial finance			1,798,550				1,480,593				1,259,584				1,292,749				1,260,000
Average national lending			1,114,822				998,411				1,038,476				711,837				704,244
Average total loans		$	4,876,807			$	4,526,063			$	4,409,675			$	4,045,842			$	4,134,393
Community banking yield			5.46	%			5.05	%			5.23	%			5.67	%			5.89	%
Commercial finance yield			10.74	%			11.23	%			10.21	%			11.00	%			11.64	%
National lending yield			4.58	%			4.98	%			4.67	%			4.80	%			4.96	%
Total loan yield			7.20	%			7.05	%			6.52	%			7.22	%			7.48	%

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:

		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
Factored receivable period end balance		$	1,036,369,000			$	948,987,000			$	528,379,000			$	641,366,000			$	573,372,000
Yield on average receivable balance			13.81	%			15.65	%			15.48	%			16.13	%			17.20	%
Rolling twelve quarter annual charge-off rate			0.37	%			0.43	%			0.43	%			0.42	%			0.39	%
Factored receivables - transportation concentration			89	%			88	%			85	%			80	%			81	%
Interest income, including fees		$	35,439,000			$	30,068,000			$	20,387,000			$	23,497,000			$	24,813,000
Non-interest income(1)			1,358,000				1,157,000				1,072,000				1,296,000				1,154,000
Factored receivable total revenue			36,797,000				31,225,000				21,459,000				24,793,000				25,967,000
Average net funds employed			924,899,000				694,170,000				477,112,000				537,138,000				524,546,000
Yield on average net funds employed			15.83	%			17.89	%			18.09	%			18.56	%			19.64	%
Accounts receivable purchased		$	2,461,249,000			$	1,984,490,000			$	1,238,465,000			$	1,450,618,000			$	1,489,538,000
Number of invoices purchased			1,189,271				1,027,839				812,902				878,767				896,487
Average invoice size		$	2,070			$	1,931			$	1,524			$	1,651			$	1,662
Average invoice size - transportation		$	1,943			$	1,787			$	1,378			$	1,481			$	1,507
Average invoice size - non-transportation		$	5,091			$	5,181			$	4,486			$	4,061			$	3,891

⁽¹⁾  Total factoring segment non-interest income was $15.5 million and $3.2 million for the three months ended December 31, 2020 and September 30, 2020, respectively. December 31, 2020 non-interest income used to calculate yield on average net funds employed excludes a gain of $8.9 million during the quarter then ended related to CVLG’s delivery of proceeds resulting from the liquidation of its acquired stock. Also excluded from noninterest income used to calculate yield on average net funds employed for the quarter ended December 31, 2020 is a $5.3 million increase in the value of 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 during the quarter then ended on the increased value of the receivable due from CVLG.

Deposits summarized as of:

		December 31,				September 30,				June 30,				March 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019
Non-interest bearing demand		$	1,352,785			$	1,315,900			$	1,120,949			$	846,412			$	809,696
Interest bearing demand			688,680				634,272				648,309				583,445				580,323
Individual retirement accounts			92,584				94,933				97,388				101,743				104,472
Money market			393,325				384,476				397,914				412,376				497,105
Savings			421,488				405,954				391,624				367,163				363,270
Certificates of deposit			790,844				857,514				937,766				1,056,012				1,084,425
Brokered time deposits			516,786				344,986				258,378				314,864				350,615
Other brokered deposits			460,108				210,066				210,004				—				—
Total deposits		$	4,716,600			$	4,248,101			$	4,062,332			$	3,682,015			$	3,789,906

Net interest margin summarized for the three months ended:

		December 31, 2020												September 30, 2020
		Average								Average				Average								Average
(Dollars in thousands)		Balance				Interest				Rate				Balance				Interest				Rate
Interest earning assets:
Interest earning cash balances		$	230,893			$	68				0.12	%		$	224,958			$	73				0.13	%
Taxable securities			202,867				1,283				2.52	%			259,470				1,674				2.57	%
Tax-exempt securities			37,070				236				2.53	%			39,847				253				2.53	%
FHLB and other restricted stock			15,759				56				1.41	%			22,121				122				2.19	%
Loans			4,876,807				88,296				7.20	%			4,526,063				80,242				7.05	%
Total interest earning assets		$	5,363,396			$	89,939				6.67	%		$	5,072,459			$	82,364				6.46	%
Non-interest earning assets:
Other assets			425,153												446,249
Total assets		$	5,788,549											$	5,518,708
Interest bearing liabilities:
Deposits:
Interest bearing demand		$	662,458			$	235				0.14	%		$	635,287			$	207				0.13	%
Individual retirement accounts			94,328				250				1.05	%			95,962				300				1.24	%
Money market			395,900				257				0.26	%			385,620				263				0.27	%
Savings			413,214				157				0.15	%			400,102				152				0.15	%
Certificates of deposit			814,954				2,633				1.29	%			905,075				3,782				1.66	%
Brokered time deposits			221,346				528				0.95	%			247,928				941				1.51	%
Other brokered deposits			560,805				248				0.18	%			251,701				189				0.30	%
Total interest bearing deposits			3,163,005				4,308				0.54	%			2,921,675				5,834				0.79	%
Federal Home Loan Bank advances			80,217				43				0.21	%			255,163				143				0.22	%
Subordinated notes			87,476				1,347				6.13	%			87,425				1,348				6.13	%
Junior subordinated debentures			39,996				452				4.50	%			39,874				462				4.61	%
Other borrowings			223,501				191				0.34	%			236,297				198				0.33	%
Total interest bearing liabilities		$	3,594,195			$	6,341				0.70	%		$	3,540,434			$	7,985				0.90	%
Non-interest bearing liabilities and equity:
Non-interest bearing demand deposits			1,392,389												1,213,494
Other liabilities			81,073												76,453
Total equity			720,892												688,327
Total liabilities and equity		$	5,788,549											$	5,518,708
Net interest income						$	83,598											$	74,379
Interest spread											5.97	%											5.56	%
Net interest margin											6.20	%											5.83	%

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 Years Ended
(Dollars in thousands,		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
except per share amounts)		2020				2020				2020				2020				2019				2020				2019
Net income available to common stockholders		$	31,328			$	22,005			$	13,440			$	(4,450	)		$	16,709			$	62,323			$	58,544
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		$	31,328			$	22,635			$	6,133			$	(4,450	)		$	16,709			$	55,646			$	58,544
Weighted average shares outstanding - diluted			25,053,386				24,802,388				24,074,442				24,314,329				25,254,862				24,615,816				26,060,005
Adjusted diluted earnings per common share		$	1.25			$	0.91			$	0.25			$	(0.18	)		$	0.66			$	2.26			$	2.25
Average total stockholders' equity		$	720,892			$	688,327			$	610,258			$	627,369			$	647,546			$	661,942			$	647,726
Average preferred stock liquidation preference			(45,000	)			(45,000	)			(5,934	)			—				—				(24,099	)			—
Average total common stockholders' equity			675,892				643,327				604,324				627,369				647,546				637,843				647,726
Average goodwill and other intangibles			(191,017	)			(192,682	)			(187,255	)			(189,359	)			(191,551	)			(190,088	)			(194,905	)
Average tangible common stockholders' equity		$	484,875			$	450,645			$	417,069			$	438,010			$	455,995			$	447,755			$	452,821
Net income available to common stockholders		$	31,328			$	22,005			$	13,440			$	(4,450	)		$	16,709			$	62,323			$	58,544
Average tangible common equity			484,875				450,645				417,069				438,010				455,995				447,755				452,821
Return on average tangible common equity			25.70	%			19.43	%			12.96	%			(4.09	%)			14.54	%			13.92	%			12.93	%
Net interest income		$	83,598			$	74,379			$	64,251			$	62,500			$	66,408			$	284,728			$	255,903
Non-interest income			22,386				10,493				20,029				7,477				8,666				60,385				31,569
Operating revenue			105,984				84,872				84,280				69,977				75,074				345,113				287,472
Gain on sale of subsidiary or division			—				—				(9,758	)			—				—				(9,758	)			—
Adjusted operating revenue		$	105,984			$	84,872			$	74,522			$	69,977			$	75,074			$	335,355			$	287,472
Non-interest expenses		$	59,298			$	55,297			$	52,726			$	54,753			$	52,661			$	222,074			$	204,084
Transaction costs			—				(827	)			—				—				—				(827	)			—
Adjusted non-interest expenses		$	59,298			$	54,470			$	52,726			$	54,753			$	52,661			$	221,247			$	204,084
Adjusted efficiency ratio			55.95	%			64.18	%			70.75	%			78.24	%			70.15	%			65.97	%			70.99	%
Adjusted net non-interest expense to average assets ratio:
Non-interest expenses		$	59,298			$	55,297			$	52,726			$	54,753			$	52,661			$	222,074			$	204,084
Transaction costs			—				(827	)			—				—				—				(827	)			—
Adjusted non-interest expenses		$	59,298			$	54,470			$	52,726			$	54,753			$	52,661			$	221,247			$	204,084
Total non-interest income		$	22,386			$	10,493			$	20,029			$	7,477			$	8,666			$	60,385			$	31,569
Gain on sale of subsidiary or division			—				—				(9,758	)			—				—				(9,758	)			—
Adjusted non-interest income		$	22,386			$	10,493			$	10,271			$	7,477			$	8,666			$	50,627			$	31,569
Adjusted net non-interest expenses		$	36,912			$	43,977			$	42,455			$	47,276			$	43,995			$	170,620			$	172,515
Average total assets		$	5,788,549			$	5,518,708			$	5,487,072			$	4,906,547			$	5,050,860			$	5,426,469			$	4,773,652
Adjusted net non-interest expense to average assets ratio			2.54	%			3.17	%			3.11	%			3.88	%			3.46	%			3.14	%			3.61	%
Total stockholders' equity		$	726,781			$	693,842			$	656,871			$	589,347			$	636,590			$	726,781			$	636,590
Preferred stock liquidation preference			(45,000	)			(45,000	)			(45,000	)			—				—				(45,000	)			—
Total common stockholders' equity			681,781				648,842				611,871				589,347				636,590				681,781				636,590
Goodwill and other intangibles			(189,922	)			(192,041	)			(186,162	)			(188,208	)			(190,286	)			(189,922	)			(190,286	)
Tangible common stockholders' equity		$	491,859			$	456,801			$	425,709			$	401,139			$	446,304			$	491,859			$	446,304
Common shares outstanding			24,868,218				24,851,601				24,202,686				24,101,120				24,964,961				24,868,218				24,964,961
Tangible book value per share		$	19.78			$	18.38			$	17.59			$	16.64			$	17.88			$	19.78			$	17.88
Total assets at end of period		$	5,935,791			$	5,836,787			$	5,617,493			$	5,353,729			$	5,060,297			$	5,935,791			$	5,060,297
Goodwill and other intangibles			(189,922	)			(192,041	)			(186,162	)			(188,208	)			(190,286	)			(189,922	)			(190,286	)
Tangible assets at period end		$	5,745,869			$	5,644,746			$	5,431,331			$	5,165,521			$	4,870,011			$	5,745,869			$	4,870,011
Tangible common stockholders' equity ratio			8.56	%			8.09	%			7.84	%			7.77	%			9.16	%			8.56	%			9.16	%

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 Years Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(Dollars in thousands)		2020				2020				2020				2020				2019				2020				2019
Loan discount accretion		$	2,334			$	4,104			$	2,139			$	2,134			$	1,555			$	10,711			$	5,568

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