Triumph Bancorp Reports Second Quarter Net Income to Common Stockholders of $9.5 Million and Diluted Earnings per Share of $0.51

Dallas, Texas


DALLAS, July 19, 2017 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (NASDAQ:TBK) today announced earnings and operating results for the second quarter of 2017.

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 document.

2017 Second Quarter Highlights

  • For the second quarter of 2017, net income was $9.7 million and net income available to common stockholders was $9.5 million, compared to net income of $10.5 million and net income available to common stockholders of $10.3 million for the quarter ended March 31, 2017. The first quarter of 2017 included a pre-tax gain on the sale of our asset management subsidiary, Triumph Capital Advisors, LLC (“TCA”) of $20.9 million.  Adjusted net income available to common stockholders excluding the gain on sale of TCA and transaction related costs was $0.3 million for the quarter ended March 31, 2017.

  • Diluted earnings per share were $0.51 for the quarter ended June 30, 2017, compared to $0.55 for the quarter ended March 31, 2017.  Adjusted diluted earnings per share, excluding the gain on sale of TCA and transaction related costs, were $0.02 for the quarter ended March 31, 2017.

  • Total loans held for investment increased $259.9 million, or 12.8%, to $2.295 billion at June 30, 2017, compared to $2.035 billion at March 31, 2017.   

  • Non-performing assets to total assets decreased to 1.50% at June 30, 2017 from 1.92% at March 31, 2017. Net charge-offs to average loans decreased to 0.03% for the quarter ended June 30, 2017, compared to 0.20% for the quarter ended March 31, 2017.

  • Net interest margin (“NIM”) was 6.16% for the quarter ended June 30, 2017, compared to 5.37% for the quarter ended March 31, 2017. Adjusted NIM, which excludes loan discount accretion, was 5.70% for the quarter ended June 30, 2017, compared to 5.19% for the quarter ended March 31, 2017.

Balance Sheet

Total loans held for investment were $2.295 billion at June 30, 2017.  Our commercial finance loans, which comprise 35% of the loan portfolio, were $801.7 million at June 30, 2017, compared to $713.6 million at March 31, 2017.  This is an increase of $88.0 million, or 12.3%, in the second quarter of 2017, and includes a $51.5 million, or 21.3%, increase in factored receivables.  We also experienced $43.1 million of growth in our commercial real estate portfolio and a $107.4 million increase in our mortgage warehouse facilities in the quarter ended June 30, 2017.

Total deposits were $2.072 billion at June 30, 2017, an increase of $47.9 million or 2.4% for the second quarter of 2017.  Non-interest-bearing deposits accounted for 18% of total deposits and non-time deposits accounted for 54% of total deposits at June 30, 2017.

Net Interest Income

We earned net interest income for the quarter ended June 30, 2017 of $38.6 million compared to $31.8 million for the quarter ended March 31, 2017.  Net interest income for the quarter ended June 30, 2017 includes accelerated purchase discount accretion of $1.8 million associated with previously acquired loans that were prepaid during the quarter. 

Yields on loans for the quarter ended June 30, 2017 were up 64 bps from the prior quarter to 7.79% (up 32 bps from the prior quarter to 7.25% adjusted to exclude loan discount accretion). The average cost of our total deposits was 0.60% for the quarter ended June 30, 2017 compared to 0.58% for the quarter ended March 31, 2017, on an annualized basis. 

Asset Quality

Non-performing assets decreased 42 bps from March 31, 2017 to 1.50% of total assets at June 30, 2017.  The ratio of past due to total loans decreased to 2.51% at June 30, 2017 from 3.16% at March 31, 2017.  We recorded total net charge-offs of $0.7 million for the quarter ended June 30, 2017 compared to net charge-offs of $4.0 million for the quarter ended March 31, 2017.  We recorded a provision for loan losses of $1.4 million for the quarter ended June 30, 2017 compared to a provision of $7.7 million for the quarter ended March 31, 2017. From March 31, 2017 to June 30, 2017, our ALLL increased from $19.1 million or 0.94% of total loans to $19.8 million or 0.86% of total loans. 

Non-interest Income and Expense

We earned non-interest income for the quarter ended June 30, 2017 of $5.2 million compared to $27.3 million (or $6.4 million excluding the gain on sale of TCA) for the quarter ended March 31, 2017.  Subsequent to the sale of TCA, we no longer earn asset management fee income, which was $1.7 million for the quarter ended March 31, 2017.

For the quarter ended June 30, 2017, non-interest expense totaled $27.3 million compared to $34.8 million (or $29.7 million excluding the transaction related costs associated with the sale of TCA) for the quarter ended March 31, 2017.

Conference Call Information

Aaron P. Graft, Vice Chairman and CEO and Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 8:30 a.m. Central Time on Thursday, July 20, 2017. Dan Karas, Chief Lending Officer, will also be available for questions.

To participate in the live conference call, please dial 1-855-940-9472 (Canada: 1-855-669-9657) and request to be joined into the Triumph Bancorp, Inc. (TBK) call.  A simultaneous audio-only webcast may be accessed via our website at www.triumphbancorp.com through the Investor Relations, News & Events, Webcasts and Presentations links, or through a direct link here at http://services.choruscall.com/links/tbk170720.html. An archive of this conference call will subsequently be available at this same location on our website.

About Triumph

Triumph Bancorp, Inc. (NASDAQ:TBK) is a financial holding company headquartered in Dallas, Texas.  Triumph offers a diversified line of community banking and commercial finance products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com

Forward-Looking Statements

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

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 17, 2017 and in Triumph’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, filed with the Securities and Exchange Commission on April 26, 2017.

Non-GAAP Financial Measures

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

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

  As of and for the Three Months Ended   As of and for the Six Months
Ended
 
  June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
(Dollars in thousands) 2017  2017  2016  2016  2016  2017  2016 
Financial Highlights:                            
Total assets $2,836,684  $2,635,358  $2,641,067  $2,575,490  $1,783,395  $2,836,684  $1,783,395 
Loans held for investment $2,295,100  $2,035,236  $2,027,624  $1,959,855  $1,410,518  $2,295,100  $1,410,518 
Deposits $2,072,181  $2,024,288  $2,015,785  $1,950,677  $1,275,154  $2,072,181  $1,275,154 
Net income available to common stockholders $9,467  $10,281  $6,064  $4,506  $4,431  $19,748  $9,243 
                             
Performance Ratios - Annualized:                            
Return on average assets  1.42%  1.62%  0.96%  0.84%  1.07%  1.52%  1.13%
Return on average total equity  12.60%  14.44%  8.58%  6.63%  6.69%  13.49%  7.04%
Return on average common equity  12.75%  14.66%  8.60%  6.51%  6.64%  13.67%  7.00%
Return on average tangible common equity (1)  14.94%  17.49%  10.32%  7.60%  7.37%  16.17%  7.80%
Yield on loans  7.79%  7.15%  7.36%  7.42%  8.50%  7.49%  8.18%
Adjusted yield on loans (1)  7.25%  6.93%  6.82%  7.10%  7.81%  7.10%  7.65%
Cost of interest bearing deposits  0.74%  0.71%  0.66%  0.68%  0.72%  0.73%  0.73%
Cost of total deposits  0.60%  0.58%  0.54%  0.57%  0.63%  0.59%  0.64%
Cost of total funds  0.83%  0.79%  0.73%  0.61%  0.68%  0.81%  0.68%
Net interest margin  6.16%  5.37%  5.60%  5.79%  6.53%  5.78%  6.22%
Adjusted net interest margin (1)  5.70%  5.19%  5.15%  5.53%  5.98%  5.45%  5.79%
Net non-interest expense to average assets  3.26%  1.17%  3.16%  3.43%  3.85%  2.24%  3.73%
Adjusted net non-interest expense to average assets (1)  3.26%  3.60%  3.16%  3.15%  3.85%  3.43%  3.73%
Efficiency ratio  62.44%  58.94%  67.70%  70.63%  68.74%  60.43%  70.84%
Adjusted efficiency ratio (1)  62.44%  77.65%  67.70%  66.20%  68.74%  69.53%  70.84%
                             
Asset Quality:(2)                            
Past due to total loans  2.51%  3.16%  3.61%  3.86%  2.80%  2.51%  2.80%
Non-performing loans to total loans  1.36%  1.80%  2.23%  2.25%  1.56%  1.36%  1.56%
Non-performing assets to total assets  1.50%  1.92%  1.98%  2.05%  1.60%  1.50%  1.60%
ALLL to non-performing loans  63.56%  52.18%  34.00%  33.78%  62.60%  63.56%  62.60%
ALLL to total loans  0.86%  0.94%  0.76%  0.76%  0.98%  0.86%  0.98%
Net charge-offs to average loans  0.03%  0.20%  0.10%  0.10%  0.02%  0.23%  0.02%
                             
Capital:                            
Tier 1 capital to average assets(3)  11.28%  11.32%  10.85%  12.04%  16.02%  11.28%  16.02%
Tier 1 capital to risk-weighted assets(3)  11.30%  12.05%  11.85%  11.94%  17.14%  11.30%  17.14%
Common equity tier 1 capital to risk-weighted assets(3)  9.73%  10.32%  10.18%  10.24%  15.19%  9.73%  15.19%
Total capital to risk-weighted assets(3)  13.87%  14.87%  14.60%  14.77%  18.01%  13.87%  18.01%
Total equity to total assets  10.94%  11.40%  10.96%  11.05%  15.69%  10.94%  15.69%
Tangible common stockholders' equity to tangible assets  9.22%  9.51%  8.98%  8.99%  13.88%  9.22%  13.88%
                             
Per Share Amounts:                            
Book value per share $16.59  $16.08  $15.47  $15.18  $14.91  $16.59  $14.91 
Tangible book value per share (1) $14.20  $13.63  $12.89  $12.55  $13.47  $14.20  $13.47 
Basic earnings per common share $0.53  $0.57  $0.34  $0.25  $0.25  $1.10  $0.52 
Diluted earnings per common share $0.51  $0.55  $0.33  $0.25  $0.25  $1.07  $0.51 
Adjusted diluted earnings per common share(1) $0.51  $0.02  $0.33  $0.32  $0.25  $0.54  $0.51 
Shares outstanding end of period  18,132,585   18,078,769   18,078,247   18,106,978   18,107,493   18,132,585   18,107,493 
                             
                             

Unaudited consolidated balance sheet as of:

  June 30,  March 31,  December 31,  September 30,  June 30, 
(Dollars in thousands) 2017  2017  2016  2016  2016 
ASSETS                    
Total cash and cash equivalents $117,502  $126,084  $114,514  $104,725  $61,750 
Securities - available for sale  227,206   254,452   275,029   286,574   159,790 
Securities - held to maturity  26,036   28,882   29,352   29,316   27,502 
Loans held for sale           9,623    
Loans held for investment  2,295,100   2,035,236   2,027,624   1,959,855   1,410,518 
Allowance for loan and lease losses  (19,797)  (19,093)  (15,405)  (14,912)  (13,772)
Loans, net  2,275,303   2,016,143   2,012,219   1,944,943   1,396,746 
FHLB stock  14,566   7,167   8,430   8,397   6,368 
Premises and equipment, net  43,957   44,630   45,460   45,050   19,629 
Other real estate owned ("OREO"), net  10,740   11,638   6,077   8,061   6,074 
Goodwill and intangible assets, net  43,321   44,233   46,531   47,449   26,160 
Bank-owned life insurance  36,852   36,679   36,509   36,347   29,786 
Deferred tax asset, net  15,111   15,678   18,825   20,042   15,042 
Other assets  26,090   49,772   48,121   34,963   34,548 
Total assets $2,836,684  $2,635,358  $2,641,067  $2,575,490  $1,783,395 
LIABILITIES                    
Non-interest bearing deposits $381,042  $382,009  $363,351  $339,999  $170,834 
Interest bearing deposits  1,691,139   1,642,279   1,652,434   1,610,678   1,104,320 
Total deposits  2,072,181   2,024,288   2,015,785   1,950,677   1,275,154 
Customer repurchase agreements  14,959   10,468   10,490   15,329   13,635 
Federal Home Loan Bank advances  340,000   200,000   230,000   230,000   180,500 
Subordinated notes  48,780   48,757   48,734   48,676    
Junior subordinated debentures  32,943   32,840   32,740   32,640   24,823 
Other liabilities  17,354   18,580   13,973   13,647   9,520 
Total liabilities  2,526,217   2,334,933   2,351,722   2,290,969   1,503,632 
EQUITY                    
Preferred stock series A  4,550   4,550   4,550   4,550   4,550 
Preferred stock series B  5,108   5,196   5,196   5,196   5,196 
Common stock  182   182   182   182   182 
Additional paid-in-capital  198,570   197,866   197,157   196,306   195,711 
Treasury stock, at cost  (1,759)  (1,494)  (1,374)  (751)  (741)
Retained earnings  103,658   94,191   83,910   77,846   73,340 
Accumulated other comprehensive income  158   (66)  (276)  1,192   1,525 
Total equity  310,467   300,425   289,345   284,521   279,763 
  Total liabilities and equity $2,836,684  $2,635,358  $2,641,067  $2,575,490  $1,783,395 
                     
                     

Unaudited consolidated statement of income:

  For the Three Months Ended   For the Six Months
Ended
 
  June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
(Dollars in thousands) 2017  2017  2016  2016  2016  2017  2016 
Interest income:                            
Loans, including fees $  30,663  $   25,185  $26,486  $23,123  $ 18,547  $  55,848  $  34,635 
Factored receivables, including fees  10,812   9,167   9,731   9,021   8,639   19,979   16,461 
Securities  1,738   1,611   1,368   1,218   958   3,349   1,723 
FHLB stock  36   42   34   16   13   78   23 
Cash deposits  289   327   155   93   197   616   405 
Total interest income  43,538   36,332   37,774   33,471   28,354   79,870   53,247 
Interest expense:                            
Deposits  3,057   2,869   2,735   2,408   2,020   5,926   4,013 
Subordinated notes  836   835   835         1,671    
Junior subordinated debentures  475   465   431   382   312   940   614 
Other borrowings  613   344   229   263   115   957   224 
Total interest expense  4,981   4,513   4,230   3,053   2,447   9,494   4,851 
Net interest income  38,557   31,819   33,544   30,418   25,907   70,376   48,396 
Provision for loan losses  1,447   7,678   2,446   2,819   1,939   9,125   1,428 
Net interest income after provision for loan losses  37,110   24,141   31,098   27,599   23,968   61,251   46,968 
Non-interest income:                            
Service charges on deposits  977   980   1,109   984   695   1,957   1,354 
Card income  917   827   842   767   577   1,744   1,123 
Net OREO gains (losses) and valuation adjustments  (112)  11   (275)  63   (1,204)  (101)  (1,215)
Net gains (losses) on sale of securities        7   (68)        5 
Net gains on sale of loans              4      16 
Fee income  637   583   547   655   504   1,220   1,038 
Asset management fees     1,717   1,787   1,553   1,605   1,717   3,234 
Gain on sale of subsidiary     20,860            20,860    
Other  2,783   2,307   2,191   2,145   1,487   5,090   3,094 
Total non-interest income  5,202   27,285   6,208   6,099   3,668   32,487   8,649 
Non-interest expense:                            
Salaries and employee benefits  16,012   21,958   15,351   14,699   12,229   37,970   24,481 
Occupancy, furniture and equipment  2,348   2,359   2,353   1,921   1,534   4,707   3,027 
FDIC insurance and other regulatory assessments  270   226   265   143   281   496   505 
Professional fees  1,238   1,968   1,481   1,874   1,101   3,206   2,174 
Amortization of intangible assets  911   1,111   1,130   958   717   2,022   1,694 
Advertising and promotion  911   938   790   779   628   1,849   1,147 
Communications and technology  2,233   2,174   1,830   1,966   1,263   4,407   2,695 
Other  3,398   4,103   3,711   3,452   2,578   7,501   4,686 
Total non-interest expense  27,321   34,837   26,911   25,792   20,331   62,158   40,409 
Net income before income tax  14,991   16,589   10,395   7,906   7,305   31,580   15,208 
Income tax expense  5,331   6,116   4,134   3,099   2,679   11,447   5,576 
Net income $9,660  $10,473  $6,261  $4,807  $4,626  $20,133  $9,632 
Dividends on preferred stock  (193)  (192)  (197)  (301)  (195)  (385)  (389)
Net income available to common stockholders $9,467  $10,281  $6,064  $4,506  $4,431  $19,748  $9,243 
                             
                             

Earnings per share:

  For the Three Months Ended  For the Six Months
Ended
 
  June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
(Dollars in thousands) 2017  2017  2016  2016  2016  2017  2016 
Basic                            
Net income to common stockholders $9,467  $10,281  $6,064  $4,506  $4,431  $19,748  $9,243 
Weighted average common shares outstanding  18,012,905   17,955,144   17,890,781   17,859,604   17,859,604   17,984,184   17,838,267 
Basic earnings per common share $0.53  $0.57  $0.34  $0.25  $0.25  $1.10  $0.52 
                             
Diluted                            
Net income to common stockholders $9,467  $10,281  $6,064  $4,506  $4,431  $19,748  $9,243 
Dilutive effect of preferred stock  193   192   197         385    
Net income to common stockholders - diluted $9,660  $10,473  $6,261  $4,506  $4,431  $20,133  $9,243 
Weighted average common shares outstanding  18,012,905   17,955,144   17,890,781   17,859,604   17,859,604   17,984,184   17,838,267 
Dilutive effects of:                            
  Restricted stock  47,521   87,094   66,613   148,977   112,880   67,308   113,334 
  Assumed exercises of stock warrants  129,896   145,896   118,285   93,095   70,101   137,896   60,330 
  Assumed exercises of stock options  32,592   47,873   12,511         40,233    
  Assumed conversion of Preferred A  315,773   315,773   315,773         315,773    
  Assumed conversion of Preferred B  354,471   360,578   360,578         354,471    
Weighted average shares outstanding - diluted  18,893,158   18,912,358   18,764,541   18,101,676   18,042,585   18,899,865   18,011,931 
Diluted earnings per common share $0.51  $0.55  $0.33  $0.25  $0.25  $1.07  $0.51 
                             
                             
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 Six Months
Ended
 
  June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
  2017  2017  2016  2016  2016  2017  2016 
Assumed conversion of Preferred A           315,773   315,773      315,773 
Assumed conversion of Preferred B           360,578   360,578      360,578 
Restricted stock awards  35,270            76,362   35,270   76,362 
Stock options  58,442         164,175   164,175   58,442   164,175 
                             
                             

Loans held for investment summarized as of:

  June 30,  March 31,  December 31,  September 30,  June 30, 
(Dollars in thousands) 2017  2017  2016  2016  2016 
Commercial real estate $541,217  $498,099  $442,237  $420,742  $298,991 
Construction, land development, land  120,253   109,849   109,812   101,169   36,498 
1-4 family residential properties  101,833   105,230   104,974   108,721   74,121 
Farmland  136,258   136,537   141,615   139,109   35,795 
Commercial  842,715   792,764   778,643   777,806   574,508 
Factored receivables  293,633   242,098   238,198   213,955   237,520 
Consumer  29,497   28,415   29,764   25,602   17,339 
Mortgage warehouse  229,694   122,244   182,381   172,751   135,746 
Total loans $  2,295,100  $  2,035,236  $2,027,624  $1,959,855  $  1,410,518 
                     

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

  June 30,  March 31,  December 31,  September 30,  June 30, 
(Dollars in thousands) 2017  2017  2016  2016  2016 
Equipment $  219,904  $  203,251  $190,393  $181,987  $  167,000 
Asset based lending (General)  188,257   166,917   161,454   129,501   114,632 
Asset based lending (Healthcare)  68,606   78,208   79,668   84,900   81,664 
Premium finance  31,274   23,162   23,971   27,573   6,117 
Factored receivables  293,633   242,098   238,198   213,955   237,520 
Commercial finance $801,674  $713,636  $693,684  $637,916  $606,933 
                     
Commercial finance % of total loans  35%  35%  34%  33%  43%
Yield on commercial finance loans  11.42%  10.25%  10.54%  10.57%  11.40%
                     

Deposits summarized as of:

  June 30,  March 31,  December 31,  September 30,  June 30,  
(Dollars in thousands) 2017  2017  2016  2016  2016  
Non-interest bearing demand $381,042  $382,009  $363,351  $339,999  $170,834  
Interest bearing demand  350,966   329,201   340,362   311,351   235,877  
Individual retirement accounts  99,694   100,436   103,022   103,007   64,204  
Money market  205,243   203,686   213,253   209,572   120,929  
Savings  173,137   173,258   171,354   171,665   77,625  
Certificates of deposit  777,459   767,602   756,351   765,093   555,710  
Brokered deposits  84,640   68,096   68,092   49,990   49,975  
Total deposits $  2,072,181  $  2,024,288  $2,015,785  $1,950,677  $  1,275,154  
                      
                      


Net interest margin summarized for the three months ended:

 June 30, 2017  March 31, 2017 
 Average      Average  Average      Average 
(Dollars in thousands)Balance  Interest  Rate  Balance  Interest  Rate 
Interest earning assets:                       
Interest earning cash balances$99,918  $289   1.16% $153,621  $327   0.86%
Taxable securities 240,725   1,653   2.75%  266,591   1,527   2.32%
Tax-exempt securities 25,389   85   1.34%  26,190   84   1.30%
FHLB stock 10,395   36   1.39%  8,536   42   2.00%
Loans 2,135,346   41,475   7.79%  1,947,483   34,352   7.15%
Total interest earning assets$2,511,773  $43,538   6.95% $2,402,421  $36,332   6.13%
Non-interest earning assets:                       
Other assets 211,530           216,861         
  Total assets$2,723,303          $2,619,282         
Interest bearing liabilities:                       
Deposits:                       
Interest bearing demand$342,947  $136   0.16% $325,589  $111   0.14%
Individual retirement accounts 100,505   303   1.21%  101,484   291   1.16%
Money market 206,163   120   0.23%  209,216   118   0.23%
Savings 171,602   27   0.06%  171,828   34   0.08%
Certificates of deposit 773,178   2,224   1.15%  756,606   2,079   1.11%
Brokered deposits 67,852   247   1.46%  68,086   236   1.41%
Total deposits 1,662,247   3,057   0.74%  1,632,809   2,869   0.71%
Subordinated notes 48,767   836   6.88%  48,743   835   6.95%
Junior subordinated debentures 32,878   475   5.79%  32,780   465   5.75%
Other borrowings 271,136   613   0.91%  222,561   344   0.63%
Total interest bearing liabilities$2,015,028  $4,981   0.99% $1,936,893  $4,513   0.94%
Non-interest bearing liabilities and equity:                       
Non-interest bearing demand deposits   387,877           377,769         
Other liabilities 12,808           10,384         
Total equity 307,590           294,236         
  Total liabilities and equity$  2,723,303          $  2,619,282         
Net interest income    $  38,557          $  31,819     
Interest spread         5.96%          5.19%
Net interest margin         6.16%          5.37%
                        
                        


Metrics and non-GAAP financial reconciliation:

  As of and for the Three Months Ended   As of and for the Six
Months Ended
 
(Dollars in thousands, June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
except per share amounts) 2017  2017  2016  2016  2016  2017  2016 
Net income available to common stockholders $9,467  $10,281  $6,064  $4,506  $4,431  $19,748  $9,243 
Gain on sale of subsidiary     (20,860)           (20,860)   
Incremental bonus related to transaction     4,814            4,814    
Transaction related costs     325      1,618      325    
Tax effect of adjustments     5,754      (251)     5,754    
Adjusted net income available to common stockholders $9,467  $314  $6,064  $5,873  $4,431  $9,781  $9,243 
Dilutive effect of convertible preferred stock  193      197   197          
Adjusted net income available to common stockholders - diluted $9,660  $314  $6,261  $6,070  $4,431  $9,781  $9,243 
                             
Weighted average shares outstanding - diluted  18,893,158   18,912,358   18,764,541   18,101,676   18,042,585   18,899,865   18,011,931 
Adjusted effects of assumed Preferred Stock conversion     (676,351)     676,351      (670,244)   
Adjusted weighted average shares outstanding - diluted  18,893,158   18,236,007   18,764,541   18,778,027   18,042,585   18,229,621   18,011,931 
Adjusted diluted earnings per common share $0.51  $0.02  $0.33  $0.32  $0.25  $0.54  $0.51 
                             
Net income available to common stockholders $9,467  $10,281  $6,064  $4,506  $4,431  $19,748  $9,243 
Average tangible common equity  254,088   238,405   233,733   235,938   241,666   246,290   238,420 
Return on average tangible common equity  14.94%  17.49%  10.32%  7.60%  7.37%  16.17%  7.80%
                             
Adjusted efficiency ratio:                            
Net interest income $38,557  $31,819  $33,544  $30,418  $25,907  $70,376  $48,396 
Non-interest income  5,202   27,285   6,208   6,099   3,668   32,487   8,649 
Operating revenue  43,759   59,104   39,752   36,517   29,575   102,863   57,045 
Gain on sale of subsidiary     (20,860)           (20,860)   
Adjusted operating revenue $43,759  $38,244  $39,752  $36,517  $29,575  $82,003  $57,045 
Non-interest expenses $27,321  $34,837  $26,911  $25,792  $20,331  $62,158  $40,409 
Incremental bonus related to transaction     (4,814)           (4,814)   
Transaction related costs     (325)     (1,618)     (325)   
Adjusted non-interest expenses $27,321  $29,698  $26,911  $24,174  $20,331  $57,019  $40,409 
Adjusted efficiency ratio  62.44%  77.65%  67.70%  66.20%  68.74%  69.53%  70.84%
                             
Adjusted net non-interest expense to average assets ratio:                            
Non-interest expenses $27,321  $34,837  $26,911  $25,792  $20,331  $62,158  $40,409 
Incremental bonus related to transaction     (4,814)           (4,814)   
Transaction related costs     (325)     (1,618)     (325)   
Adjusted non-interest expenses $27,321  $29,698  $26,911  $24,174  $20,331  $57,019  $40,409 
                             
Total non-interest income $5,202  $27,285  $6,208  $6,099  $3,668  $32,487  $8,649 
Gain on sale of subsidiary     (20,860)           (20,860)   
Adjusted non-interest income $5,202  $6,425  $6,208  $6,099  $3,668  $11,627  $8,649 
Adjusted net non-interest expenses $22,119  $23,273  $20,703  $18,075  $16,663  $45,392  $31,760 
Average total assets $2,723,303  $2,619,282  $2,603,226  $2,282,279  $1,742,942  $2,671,580  $1,712,783 
Adjusted net non-interest expense to average assets ratio  3.26%  3.60%  3.16%  3.15%  3.85%  3.43%  3.73%
                             
                             


  As of and for the Three Months Ended   As of and for the Six Months
Ended
 
(Dollars in thousands, June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
except per share amounts) 2017  2017  2016  2016  2016  2017  2016 
Reported yield on loans  7.79%  7.15%  7.36%  7.42%  8.50%  7.49%  8.18%
Effect of accretion income on acquired loans  (0.54%)  (0.22%)  (0.54%)  (0.32%)  (0.69%)  (0.39%)  (0.53%)
Adjusted yield on loans  7.25%  6.93%  6.82%  7.10%  7.81%  7.10%  7.65%
                             
Reported net interest margin  6.16%  5.37%  5.60%  5.79%  6.53%  5.78%  6.22%
Effect of accretion income on acquired loans  (0.46%)  (0.18%)  (0.45%)  (0.26%)  (0.55%)  (0.33%)  (0.43%)
Adjusted net interest margin  5.70%  5.19%  5.15%  5.53%  5.98%  5.45%  5.79%
                             
Total stockholders' equity $310,467  $300,425  $289,345  $284,521  $279,763  $310,467  $279,763 
Preferred stock liquidation preference  (9,658)  (9,746)  (9,746)  (9,746)  (9,746)  (9,658)  (9,746)
Total common stockholders' equity  300,809   290,679   279,599   274,775   270,017   300,809   270,017 
Goodwill and other intangibles  (43,321)  (44,233)  (46,531)  (47,449)  (26,160)  (43,321)  (26,160)
Tangible common stockholders' equity $257,488  $246,446  $233,068  $227,326  $243,857  $257,488  $243,857 
Common shares outstanding  18,132,585   18,078,769   18,078,247   18,106,978   18,107,493   18,132,585   18,107,493 
Tangible book value per share $14.20  $13.63  $12.89  $12.55  $13.47  $14.20  $13.47 
                             
Total assets at end of period $2,836,684  $2,635,358  $2,641,067  $2,575,490  $1,783,395  $2,836,684  $1,783,395 
Goodwill and other intangibles  (43,321)  (44,233)  (46,531)  (47,449)  (26,160)  (43,321)  (26,160)
Adjusted total assets at period end $2,793,363  $2,591,125  $2,594,536  $2,528,041  $1,757,235  $2,793,363  $1,757,235 
Tangible common stockholders' equity ratio  9.22%  9.51%  8.98%  8.99%  13.88%  9.22%  13.88%
                             

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

  • “Adjusted diluted earnings per common share” is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding.  Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, including divestitures, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.  Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.  

  • "Tangible common stockholders' equity" is common stockholders' equity less goodwill and other intangible assets.

  • "Total tangible assets" is defined as total assets less goodwill and other intangible assets.

  • "Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.

  • "Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.

  • "Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.

  • "Adjusted efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue and non-interest expense allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.

  • "Adjusted net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures.  This metric is used by our management to better assess our operating efficiency. 

  • "Adjusted yield on loans" is our yield on loans after excluding loan discount accretion from our acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on our yield on loans, as the effect of loan discount accretion is expected to decrease as the acquired loans pay down or mature and are removed from our balance sheet.

  • “Adjusted net interest margin” is net interest margin after excluding loan accretion from the acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discount accretion is expected to decrease as the acquired loans pay down or mature and are removed from our balance sheet. 

2) Asset quality ratios exclude loans held for sale.

3) Current quarter ratios are preliminary.


            

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