Triumph Bancorp Reports Third Quarter Net Income to Common Stockholders of $9.6 Million and Diluted Earnings per Share of $0.47

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DALLAS, Oct. 18, 2017 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. TBK ("Triumph") today announced earnings and operating results for the third 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 press release.

2017 Third Quarter Highlights

  • For the third quarter of 2017, net income was $9.8 million and net income available to common stockholders was $9.6 million, compared to net income of $9.7 million and net income available to common stockholders of $9.5 million for the quarter ended June 30, 2017.

  • Diluted earnings per share were $0.47 for the quarter ended September 30, 2017, compared to $0.51 for the quarter ended June 30, 2017.  Earnings per share were impacted by our public offering of 2.53 million shares of our common stock on August 1, 2017.  Our net proceeds from the offering, after deducting the underwriting discount and offering expenses, were $65.5 million.

  • Total loans held for investment increased $130.4 million, or 5.7%, to $2.425 billion at September 30, 2017, compared to $2.295 billion at June 30, 2017.

  • Non-performing assets to total assets decreased to 1.42% at September 30, 2017 from 1.50% at June 30, 2017. Net charge-offs to average loans decreased to 0.00% for the quarter ended September 30, 2017, compared to 0.03% for the quarter ended June 30, 2017.

  • Net interest margin ("NIM") was 5.90% for the quarter ended September 30, 2017, compared to 6.16% for the quarter ended June 30, 2017. Adjusted NIM, which excludes loan discount accretion, was 5.69% for the quarter ended September 30, 2017, compared to 5.70% for the quarter ended June 30, 2017.

Balance Sheet

Total loans held for investment were $2.425 billion at September 30, 2017.  Our commercial finance loans, which comprise 37% of the loan portfolio, were $886.9 million at September 30, 2017, compared to $801.7 million at June 30, 2017.  This is an increase of $85.2 million, or 10.6%, in the third quarter of 2017, and includes a $48.2 million, or 16.4%, increase in factored receivables. 

Total deposits were $2.013 billion at September 30, 2017, a decrease of $59.6 million or 2.9% for the third quarter of 2017.  The decrease in deposits was due in part to our intentional plan to reduce our reliance on the use of public funds. Non-interest-bearing deposits accounted for 20% of total deposits and non-time deposits accounted for 51% of total deposits at September 30, 2017.

Net Interest Income

We earned net interest income for the quarter ended September 30, 2017 of $39.5 million compared to $38.6 million for the quarter ended June 30, 2017. 

Yields on loans for the quarter ended September 30, 2017 were down 35 bps from the prior quarter to 7.44% (down 5 bps from the prior quarter to 7.20% adjusted to exclude loan discount accretion). The average cost of our total deposits was 0.64% for the quarter ended September 30, 2017 compared to 0.60% for the quarter ended June 30, 2017, on an annualized basis. 

Asset Quality

Non-performing assets decreased 8 bps from June 30, 2017 to 1.42% of total assets at September 30, 2017.  The ratio of past due to total loans decreased to 2.22% at September 30, 2017 from 2.51% at June 30, 2017.  We recorded total net charge-offs of $0.0 million for the quarter ended September 30, 2017 compared to net charge-offs of $0.7 million for the quarter ended June 30, 2017.  We recorded a provision for loan losses of $0.6 million for the quarter ended September 30, 2017 compared to a provision of $1.4 million for the quarter ended June 30, 2017. From June 30, 2017 to September 30, 2017, our ALLL increased from $19.8 million or 0.86% of total loans to $20.4 million or 0.84% of total loans. 

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Non-interest Income and Expense

We earned non-interest income for the quarter ended September 30, 2017 of $4.2 million compared to $5.2 million for the quarter ended June 30, 2017. Non-interest income for the quarter ended June 30, 2017 included $1.0 million of income from our CLO warehouse investment. The CLO associated with our CLO warehouse investment was closed and our invested funds were returned in June 2017.

For the quarter ended September 30, 2017, non-interest expense totaled $28.2 million compared to $27.3 million for the quarter ended June 30, 2017.

Branch Acquisition

As previously announced, we closed our acquisition of 9 branches in Colorado from Independent Bank Group, Inc.'s banking subsidiary Independent Bank on October 6, 2017. TBK Bank purchased approximately $99 million in loans and assumed approximately $162 million in deposits associated with the branches.

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, October 19, 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/tbk171019.html. An archive of this conference call will subsequently be available at this same location on our website.

About Triumph

Triumph Bancorp, Inc. 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 acquisition of nine branches from Independent Bank in Colorado and our pending acquisition of Valley Bancorp, Inc.) 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 and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of the Federal Deposit Insurance Corporation insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 17, 2017 and Triumph's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2017, filed with the Securities and Exchange Commission on July 21, 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 Nine Months
Ended
 
  September 30,  June 30,  March 31,  December 31,  September 30,  September 30,  September 30, 
(Dollars in thousands) 2017  2017  2017  2016  2016  2017  2016 
Financial Highlights:                            
Total assets $2,906,161  $2,836,684  $2,635,358  $2,641,067  $2,575,490  $2,906,161  $2,575,490 
Loans held for investment $2,425,463  $2,295,100  $2,035,236  $2,027,624  $1,959,855  $2,425,463  $1,959,855 
Deposits $2,012,545  $2,072,181  $2,024,288  $2,015,785  $1,950,677  $2,012,545  $1,950,677 
Net income available to common stockholders $9,587  $9,467  $10,281  $6,064  $4,506  $29,335  $13,749 
                             
Performance Ratios - Annualized:                            
Return on average assets  1.36%  1.42%  1.62%  0.96%  0.84%  1.46%  1.01%
Return on average total equity  10.71%  12.60%  14.44%  8.58%  6.63%  12.44%  6.89%
Return on average common equity  10.79%  12.75%  14.66%  8.60%  6.51%  12.58%  6.83%
Return on average tangible common equity (1)  12.28%  14.94%  17.49%  10.32%  7.60%  14.65%  7.73%
Yield on loans  7.44%  7.79%  7.15%  7.36%  7.42%  7.47%  7.87%
Adjusted yield on loans (1)  7.20%  7.25%  6.93%  6.82%  7.10%  7.14%  7.42%
Cost of interest bearing deposits  0.80%  0.74%  0.71%  0.66%  0.68%  0.75%  0.71%
Cost of total deposits  0.64%  0.60%  0.58%  0.54%  0.57%  0.61%  0.61%
Cost of total funds  0.90%  0.83%  0.79%  0.73%  0.61%  0.84%  0.65%
Net interest margin  5.90%  6.16%  5.37%  5.60%  5.79%  5.82%  6.05%
Adjusted net interest margin (1)  5.69%  5.70%  5.19%  5.15%  5.53%  5.54%  5.69%
Net non-interest expense to average assets  3.35%  3.26%  1.17%  3.16%  3.43%  2.63%  3.61%
Adjusted net non-interest expense to average assets (1)  3.35%  3.26%  3.60%  3.16%  3.15%  3.40%  3.50%
Efficiency ratio  64.61%  62.44%  58.94%  67.70%  70.63%  61.68%  70.76%
Adjusted efficiency ratio (1)  64.61%  62.44%  77.65%  67.70%  66.20%  67.82%  69.03%
                             
Asset Quality:(2)                            
Past due to total loans  2.22%  2.51%  3.16%  3.61%  3.86%  2.22%  3.86%
Non-performing loans to total loans  1.25%  1.36%  1.80%  2.23%  2.25%  1.25%  2.25%
Non-performing assets to total assets  1.42%  1.50%  1.92%  1.98%  2.05%  1.42%  2.05%
ALLL to non-performing loans  67.33%  63.56%  52.18%  34.00%  33.78%  67.33%  33.78%
ALLL to total loans  0.84%  0.86%  0.94%  0.76%  0.76%  0.84%  0.76%
Net charge-offs to average loans  0.00%  0.03%  0.20%  0.10%  0.10%  0.22%  0.13%
                             
Capital:                            
Tier 1 capital to average assets(3)  13.50%  11.28%  11.32%  10.85%  12.04%  13.50%  12.04%
Tier 1 capital to risk-weighted assets(3)  13.45%  11.30%  12.05%  11.85%  11.94%  13.45%  11.94%
Common equity tier 1 capital to risk-weighted assets(3)  11.95%  9.73%  10.32%  10.18%  10.24%  11.95%  10.24%
Total capital to risk-weighted assets(3)  15.91%  13.87%  14.87%  14.60%  14.77%  15.91%  14.77%
Total equity to total assets  13.29%  10.94%  11.40%  10.96%  11.05%  13.29%  11.05%
Tangible common stockholders' equity to tangible assets  11.66%  9.22%  9.51%  8.98%  8.99%  11.66%  8.99%
                             
Per Share Amounts:                            
Book value per share $18.08  $16.59  $16.08  $15.47  $15.18  $18.08  $15.18 
Tangible book value per share (1) $16.04  $14.20  $13.63  $12.89  $12.55  $16.04  $12.55 
Basic earnings per common share $0.48  $0.53  $0.57  $0.34  $0.25  $1.58  $0.77 
Diluted earnings per common share $0.47  $0.51  $0.55  $0.33  $0.25  $1.53  $0.76 
Adjusted diluted earnings per common share(1) $0.47  $0.51  $0.02  $0.33  $0.32  $1.02  $0.84 
Shares outstanding end of period  20,820,900   18,132,585   18,078,769   18,078,247   18,106,978   20,820,900   18,106,978 

Unaudited consolidated balance sheet as of:

  September 30,  June 30,  March 31,  December 31,  September 30, 
 (Dollars in thousands) 2017  2017  2017  2016  2016 
ASSETS                    
Total cash and cash equivalents $80,557  $117,502  $126,084  $114,514  $104,725 
Securities - available for sale  209,326   227,206   254,452   275,029   286,574 
Securities - held to maturity  17,999   26,036   28,882   29,352   29,316 
Loans held for sale              9,623 
Loans held for investment  2,425,463   2,295,100   2,035,236   2,027,624   1,959,855 
Allowance for loan and lease losses  (20,367)  (19,797)  (19,093)  (15,405)  (14,912)
Loans, net  2,405,096   2,275,303   2,016,143   2,012,219   1,944,943 
FHLB stock  16,076   14,566   7,167   8,430   8,397 
Premises and equipment, net  43,678   43,957   44,630   45,460   45,050 
Other real estate owned ("OREO"), net  10,753   10,740   11,638   6,077   8,061 
Goodwill and intangible assets, net  42,452   43,321   44,233   46,531   47,449 
Bank-owned life insurance  37,025   36,852   36,679   36,509   36,347 
Deferred tax asset, net  14,130   15,111   15,678   18,825   20,042 
Other assets  29,069   26,090   49,772   48,121   34,963 
Total assets $2,906,161  $2,836,684  $2,635,358  $2,641,067  $2,575,490 
LIABILITIES                    
Non-interest bearing deposits $403,643  $381,042  $382,009  $363,351  $339,999 
Interest bearing deposits  1,608,902   1,691,139   1,642,279   1,652,434   1,610,678 
Total deposits  2,012,545   2,072,181   2,024,288   2,015,785   1,950,677 
Customer repurchase agreements  19,869   14,959   10,468   10,490   15,329 
Federal Home Loan Bank advances  385,000   340,000   200,000   230,000   230,000 
Subordinated notes  48,804   48,780   48,757   48,734   48,676 
Junior subordinated debentures  33,047   32,943   32,840   32,740   32,640 
Other liabilities  20,799   17,354   18,580   13,973   13,647 
Total liabilities  2,520,064   2,526,217   2,334,933   2,351,722   2,290,969 
EQUITY                    
Preferred stock series A  4,550   4,550   4,550   4,550   4,550 
Preferred stock series B  5,108   5,108   5,196   5,196   5,196 
Common stock  209   182   182   182   182 
Additional paid-in-capital  264,531   198,570   197,866   197,157   196,306 
Treasury stock, at cost  (1,760)  (1,759)  (1,494)  (1,374)  (751)
Retained earnings  113,245   103,658   94,191   83,910   77,846 
Accumulated other comprehensive income  214   158   (66)  (276)  1,192 
Total equity  386,097   310,467   300,425   289,345   284,521 
Total liabilities and equity $2,906,161  $2,836,684  $2,635,358  $2,641,067  $2,575,490 

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) 2017  2017  2017  2016  2016  2017  2016 
Interest income:                            
Loans, including fees $30,863  $30,663  $25,185  $26,486  $23,123  $86,711  $57,758 
Factored receivables, including fees  12,198   10,812   9,167   9,731   9,021   32,177   25,482 
Securities  1,655   1,738   1,611   1,368   1,218   5,004   2,941 
FHLB stock  51   36   42   34   16   129   39 
Cash deposits  370   289   327   155   93   986   498 
Total interest income  45,137   43,538   36,332   37,774   33,471   125,007   86,718 
Interest expense:                            
Deposits  3,272   3,057   2,869   2,735   2,408   9,198   6,421 
Subordinated notes  837   836   835   835      2,508    
Junior subordinated debentures  495   475   465   431   382   1,435   996 
Other borrowings  1,021   613   344   229   263   1,978   487 
Total interest expense  5,625   4,981   4,513   4,230   3,053   15,119   7,904 
Net interest income  39,512   38,557   31,819   33,544   30,418   109,888   78,814 
Provision for loan losses  572   1,447   7,678   2,446   2,819   9,697   4,247 
Net interest income after provision for loan losses  38,940   37,110   24,141   31,098   27,599   100,191   74,567 
Non-interest income:                            
Service charges on deposits  1,046   977   980   1,109   984   3,003   2,338 
Card income  956   917   827   842   767   2,700   1,890 
Net OREO gains (losses) and valuation adjustments  15   (112)  11   (275)  63   (86)  (1,152)
Net gains (losses) on sale of securities  35         7   (68)  35   (63)
Net gains on sale of loans                    16 
Fee income  625   637   583   547   655   1,845   1,693 
Asset management fees        1,717   1,787   1,553   1,717   4,787 
Gain on sale of subsidiary        20,860         20,860    
Other  1,494   2,783   2,307   2,191   2,145   6,584   5,239 
Total non-interest income  4,171   5,202   27,285   6,208   6,099   36,658   14,748 
Non-interest expense:                            
Salaries and employee benefits  16,717   16,012   21,958   15,351   14,699   54,687   39,180 
Occupancy, furniture and equipment  2,398   2,348   2,359   2,353   1,921   7,105   4,948 
FDIC insurance and other regulatory assessments  294   270   226   265   143   790   648 
Professional fees  1,465   1,238   1,968   1,481   1,874   4,671   4,048 
Amortization of intangible assets  870   911   1,111   1,130   958   2,892   2,652 
Advertising and promotion  804   911   938   790   779   2,653   1,926 
Communications and technology  2,145   2,233   2,174   1,830   1,966   6,552   4,661 
Other  3,532   3,398   4,103   3,711   3,452   11,033   8,138 
Total non-interest expense  28,225   27,321   34,837   26,911   25,792   90,383   66,201 
Net income before income tax  14,886   14,991   16,589   10,395   7,906   46,466   23,114 
Income tax expense  5,104   5,331   6,116   4,134   3,099   16,551   8,675 
Net income $9,782  $9,660  $10,473  $6,261  $4,807  $29,915  $14,439 
Dividends on preferred stock  (195)  (193)  (192)  (197)  (301)  (580)  (690)
Net income available to common stockholders $9,587  $9,467  $10,281  $6,064  $4,506  $29,335  $13,749 

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) 2017  2017  2017  2016  2016  2017  2016 
Basic                            
Net income to common stockholders $9,587  $9,467  $10,281  $6,064  $4,506  $29,335  $13,749 
Weighted average common shares outstanding  19,811,577   18,012,905   17,955,144   17,890,781   17,859,604   18,600,009   17,845,431 
Basic earnings per common share $0.48  $0.53  $0.57  $0.34  $0.25  $1.58  $0.77 
                             
Diluted                            
Net income to common stockholders $9,587  $9,467  $10,281  $6,064  $4,506  $29,335  $13,749 
Dilutive effect of preferred stock  195   193   192   197      580    
Net income to common stockholders - diluted $9,782  $9,660  $10,473  $6,261  $4,506  $29,915  $13,749 
Weighted average common shares outstanding  19,811,577   18,012,905   17,955,144   17,890,781   17,859,604   18,600,009   17,845,431 
Dilutive effects of:                            
Restricted stock  63,384   47,521   87,094   66,613   148,977   65,999   125,215 
Assumed exercises of stock warrants  54,476   129,896   145,896   118,285   93,095   110,089   71,251 
Assumed exercises of stock options  45,788   32,592   47,873   12,511      42,084    
Assumed conversion of Preferred A  315,773   315,773   315,773   315,773      315,773    
Assumed conversion of Preferred B  354,471   354,471   360,578   360,578      354,471    
Weighted average shares outstanding - diluted  20,645,469   18,893,158   18,912,358   18,764,541   18,101,676   19,488,425   18,041,897 
Diluted earnings per common share $0.47  $0.51  $0.55  $0.33  $0.25  $1.53  $0.76 
                             
                             
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, 
  2017  2017  2017  2016  2016  2017  2016 
Assumed conversion of Preferred A              315,773      315,773 
Assumed conversion of Preferred B              360,578      360,578 
Restricted stock awards     35,270                
Stock options  58,442   58,442         164,175   58,442   164,175 

Loans held for investment summarized as of:

  September 30,  June 30,  March 31,  December 31,  September 30, 
 (Dollars in thousands) 2017  2017  2017  2016  2016 
Commercial real estate $574,530  $541,217  $498,099  $442,237  $420,742 
Construction, land development, land  141,368   120,253   109,849   109,812   101,169 
1-4 family residential properties  96,032   101,833   105,230   104,974   108,721 
Farmland  130,471   136,258   136,537   141,615   139,109 
Commercial  890,372   842,715   792,764   778,643   777,806 
Factored receivables  341,880   293,633   242,098   238,198   213,955 
Consumer  30,093   29,497   28,415   29,764   25,602 
Mortgage warehouse  220,717   229,694   122,244   182,381   172,751 
Total loans $2,425,463  $2,295,100  $2,035,236  $2,027,624  $1,959,855 

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:

  September 30,  June 30,  March 31,  December 31,  September 30, 
(Dollars in thousands) 2017  2017  2017  2016  2016 
Equipment $226,120  $219,904  $203,251  $190,393  $181,987 
Asset based lending (General)  193,884   188,257   166,917   161,454   129,501 
Asset based lending (Healthcare)  67,889   68,606   78,208   79,668   84,900 
Premium finance  57,083   31,274   23,162   23,971   27,573 
Factored receivables  341,880   293,633   242,098   238,198   213,955 
Commercial finance $886,856  $801,674  $713,636  $693,684  $637,916 
                     
Commercial finance % of total loans  37%  35%  35%  34%  33%
Yield on commercial finance loans  10.62%  11.42%  10.25%  10.54%  10.57%

Deposits summarized as of:

  September 30,  June 30,  March 31,  December 31,  September 30,  
(Dollars in thousands) 2017  2017  2017  2016  2016  
Non-interest bearing demand $403,643  $381,042  $382,009  $363,351  $339,999  
Interest bearing demand  284,282   350,966   329,201   340,362   311,351  
Individual retirement accounts  97,186   99,694   100,436   103,022   103,007  
Money market  189,177   205,243   203,686   213,253   209,572  
Savings  158,464   173,137   173,258   171,354   171,665  
Certificates of deposit  770,599   777,459   767,602   756,351   765,093  
Brokered deposits  109,194   84,640   68,096   68,092   49,990  
Total deposits $2,012,545  $2,072,181  $2,024,288  $2,015,785  $1,950,677  

Net interest margin summarized for the three months ended:

  September 30, 2017  June 30, 2017 
  Average      Average  Average      Average 
(Dollars in thousands) Balance  Interest  Rate  Balance  Interest  Rate 
Interest earning assets:                        
Interest earning cash balances $111,364  $370   1.32% $99,918  $289   1.16%
Taxable securities  211,354   1,570   2.95%  240,725   1,653   2.75%
Tax-exempt securities  25,174   85   1.34%  25,389   85   1.34%
FHLB stock  14,885   51   1.36%  10,395   36   1.39%
Loans  2,295,356   43,061   7.44%  2,135,346   41,475   7.79%
Total interest earning assets $2,658,133  $45,137   6.74% $2,511,773  $43,538   6.95%
Non-interest earning assets:                        
Other assets  191,037           211,530         
Total assets $2,849,170          $2,723,303         
Interest bearing liabilities:                        
Deposits:                        
Interest bearing demand $312,009  $137   0.17% $342,947  $136   0.16%
Individual retirement accounts  98,713   309   1.24%  100,505   303   1.21%
Money market  201,462   118   0.23%  206,163   120   0.23%
Savings  167,908   20   0.05%  171,602   27   0.06%
Certificates of deposit  773,075   2,381   1.22%  773,178   2,224   1.15%
Brokered deposits  72,094   307   1.69%  67,852   247   1.46%
Total deposits  1,625,261   3,272   0.80%  1,662,247   3,057   0.74%
Subordinated notes  48,791   837   6.81%  48,767   836   6.88%
Junior subordinated debentures  32,983   495   5.95%  32,878   475   5.79%
Other borrowings  365,464   1,021   1.11%  271,136   613   0.91%
Total interest bearing liabilities $2,072,499  $5,625   1.08% $2,015,028  $4,981   0.99%
Non-interest bearing liabilities and equity:                        
Non-interest bearing demand deposits  398,774           387,877         
Other liabilities  15,698           12,808         
Total equity  362,199           307,590         
Total liabilities and equity $2,849,170          $2,723,303         
Net interest income     $39,512          $38,557     
Interest spread          5.66%          5.96%
Net interest margin          5.90%          6.16%

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) 2017  2017  2017  2016  2016  2017  2016 
Net income available to common stockholders $9,587  $9,467  $10,281  $6,064  $4,506  $29,335  $13,749 
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   1,618 
Tax effect of adjustments        5,754      (251)  5,754   (251)
Adjusted net income available to common stockholders $9,587  $9,467  $314  $6,064  $5,873  $19,368  $15,116 
Dilutive effect of convertible preferred stock  195   193      197   197   580    
Adjusted net income available to common stockholders - diluted $9,782  $9,660  $314  $6,261  $6,070  $19,948  $15,116 
                             
Weighted average shares outstanding - diluted  20,645,469   18,893,158   18,912,358   18,764,541   18,101,676   19,488,425   18,041,897 
Adjusted effects of assumed Preferred Stock conversion        (676,351)     676,351       
Adjusted weighted average shares outstanding - diluted  20,645,469   18,893,158   18,236,007   18,764,541   18,778,027   19,488,425   18,041,897 
Adjusted diluted earnings per common share $0.47  $0.51  $0.02  $0.33  $0.32  $1.02  $0.84 
                             
Net income available to common stockholders $9,587  $9,467  $10,281  $6,064  $4,506  $29,335  $13,749 
Average tangible common equity  309,624   254,088   238,405   233,733   235,938   267,633   237,647 
Return on average tangible common equity  12.28%  14.94%  17.49%  10.32%  7.60%  14.65%  7.73%
                             
Adjusted efficiency ratio:                            
Net interest income $39,512  $38,557  $31,819  $33,544  $30,418  $109,888  $78,814 
Non-interest income  4,171   5,202   27,285   6,208   6,099   36,658   14,748 
Operating revenue  43,683   43,759   59,104   39,752   36,517   146,546   93,562 
Gain on sale of subsidiary        (20,860)        (20,860)   
Adjusted operating revenue $43,683  $43,759  $38,244  $39,752  $36,517  $125,686  $93,562 
Non-interest expenses $28,225  $27,321  $34,837  $26,911  $25,792  $90,383  $66,201 
Incremental bonus related to transaction        (4,814)        (4,814)   
Transaction related costs        (325)     (1,618)  (325)  (1,618)
Adjusted non-interest expenses $28,225  $27,321  $29,698  $26,911  $24,174  $85,244  $64,583 
Adjusted efficiency ratio  64.61%  62.44%  77.65%  67.70%  66.20%  67.82%  69.03%
                             
Adjusted net non-interest expense to average assets ratio:                            
Non-interest expenses $28,225  $27,321  $34,837  $26,911  $25,792  $90,383  $66,201 
Incremental bonus related to transaction        (4,814)        (4,814)   
Transaction related costs        (325)     (1,618)  (325)  (1,618)
Adjusted non-interest expenses $28,225  $27,321  $29,698  $26,911  $24,174  $85,244  $64,583 
                             
Total non-interest income $4,171  $5,202  $27,285  $6,208  $6,099  $36,658  $14,748 
Gain on sale of subsidiary        (20,860)        (20,860)   
Adjusted non-interest income $4,171  $5,202  $6,425  $6,208  $6,099  $15,798  $14,748 
Adjusted net non-interest expenses $24,054  $22,119  $23,273  $20,703  $18,075  $69,446  $49,835 
Average total assets $2,849,170  $2,723,303  $2,619,282  $2,603,226  $2,282,279  $2,731,426  $1,904,001 
Adjusted net non-interest expense to average assets ratio  3.35%  3.26%  3.60%  3.16%  3.15%  3.40%  3.50%


  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) 2017  2017  2017  2016  2016  2017  2016 
Reported yield on loans  7.44%  7.79%  7.15%  7.36%  7.42%  7.47%  7.87%
Effect of accretion income on acquired loans  (0.24%)  (0.54%)  (0.22%)  (0.54%)  (0.32%)  (0.33%)  (0.45%)
Adjusted yield on loans  7.20%  7.25%  6.93%  6.82%  7.10%  7.14%  7.42%
                             
Reported net interest margin  5.90%  6.16%  5.37%  5.60%  5.79%  5.82%  6.05%
Effect of accretion income on acquired loans  (0.21%)  (0.46%)  (0.18%)  (0.45%)  (0.26%)  (0.28%)  (0.36%)
Adjusted net interest margin  5.69%  5.70%  5.19%  5.15%  5.53%  5.54%  5.69%
                             
Total stockholders' equity $386,097  $310,467  $300,425  $289,345  $284,521  $386,097  $284,521 
Preferred stock liquidation preference  (9,658)  (9,658)  (9,746)  (9,746)  (9,746)  (9,658)  (9,746)
Total common stockholders' equity  376,439   300,809   290,679   279,599   274,775   376,439   274,775 
Goodwill and other intangibles  (42,452)  (43,321)  (44,233)  (46,531)  (47,449)  (42,452)  (47,449)
Tangible common stockholders' equity $333,987  $257,488  $246,446  $233,068  $227,326  $333,987  $227,326 
Common shares outstanding  20,820,900   18,132,585   18,078,769   18,078,247   18,106,978   20,820,900   18,106,978 
Tangible book value per share $16.04  $14.20  $13.63  $12.89  $12.55  $16.04  $12.55 
                             
Total assets at end of period $2,906,161  $2,836,684  $2,635,358  $2,641,067  $2,575,490  $2,906,161  $2,575,490 
Goodwill and other intangibles  (42,452)  (43,321)  (44,233)  (46,531)  (47,449)  (42,452)  (47,449)
Adjusted total assets at period end $2,863,709  $2,793,363  $2,591,125  $2,594,536  $2,528,041  $2,863,709  $2,528,041 
Tangible common stockholders' equity ratio  11.66%  9.22%  9.51%  8.98%  8.99%  11.66%  8.99%

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.

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

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

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