Triumph Bancorp Reports Third Quarter Net Income to Common Stockholders of $9.0 Million

DALLAS, Oct. 17, 2018 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. TBK ("Triumph") today announced earnings and operating results for the third quarter of 2018.

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

2018 Third Quarter Highlights and Recent Developments

For the third quarter of 2018, net income available to common stockholders was $9.0 million. Diluted earnings per share were $0.34.
Adjusted diluted earnings per share were $0.51 for the quarter ended September 30, 2018, which exclude $5.9 million of transaction costs, $4.5 million net of tax, related to our acquisitions of First Bancorp of Durango, Inc. ("FBD") and Southern Colorado Corp. ("SCC").
Effective September 8, 2018, we acquired First Bancorp of Durango, Inc. and its two community banking subsidiaries, The First National Bank of Durango and Bank of New Mexico, in an all-cash transaction for $134.7 million. On the same date, we acquired Southern Colorado Corp. and its community banking subsidiary, Citizens Bank of Pagosa Springs, in an all-cash transaction for $13.3 million. As part of the FBD and SCC acquisitions, we acquired a combined $287.8 million of loans held for investment, assumed a combined $674.7 million of deposits, and recorded a combined $14.1 million of core deposit intangible assets and $72.1 million of goodwill.
Net income for the quarter ended September 30, 2018 was impacted by the aforementioned transaction costs and $5.8 million of provision for loan loss expense attributable to a single asset based lending relationship previously disclosed in a Form 8-K filing with the Securities and Exchange Commission on September 20, 2018.
Net interest margin ("NIM") was 6.59% for the quarter ended September 30, 2018. Adjusted NIM, which excludes loan discount accretion, was 6.45%.
Total loans held for investment increased $315.7 million, or 9.9%, to $3.512 billion at September 30, 2018. Average loans for the quarter increased $371.7 million, or 12.7%, to $3.294 billion.
Triumph Business Capital grew period-end clients to 5,932 clients which is an increase of 422 clients, or 7.7%. The total dollar value of invoices purchased for the quarter ended September 30, 2018 was $1.503 billion with an average invoice price of $1,796.
At September 30, 2018, Triumph Business Capital had 86 clients utilizing the TriumphPay platform. For the quarter ended September 30, 2018, TriumphPay processed 65,535 invoices paying 16,125 distinct carriers a total of $95.8 million.

Balance Sheet

Total loans held for investment were $3.512 billion at September 30, 2018. We acquired loans held for investment with a combined acquisition date fair value of $287.8 million in the FBD and SCC transactions. Our commercial finance loans, which comprise 37% of the loan portfolio, were $1.284 billion at September 30, 2018, compared to $1.207 billion at June 30, 2018, an increase of $76.6 million, or 6.3% in the third quarter of 2018.

Total deposits were $3.439 billion at September 30, 2018, an increase of $814.1 million or 31.0% in the third quarter of 2018. We assumed deposits with a combined acquisition date fair value of $674.7 million in the FBD and SCC transactions. Non-interest-bearing deposits accounted for 20% of total deposits and non-time deposits accounted for 61% of total deposits at September 30, 2018.

Net Interest Income

We earned net interest income for the quarter ended September 30, 2018 of $61.8 million compared to $53.3 million for the quarter ended June 30, 2018.

Yields on loans for the quarter ended September 30, 2018 were up 24 bps from the prior quarter to 8.33% (up 59 bps from the prior quarter to 8.18% adjusted to exclude loan discount accretion). The average cost of our total deposits was 0.85% for the quarter ended September 30, 2018 compared to 0.73% for the quarter ended June 30, 2018, on an annualized basis.

Asset Quality

Non-performing assets decreased 35 bps from June 30, 2018 to 0.93% of total assets at September 30, 2018. The ratio of past due to total loans decreased to 2.23% at September 30, 2018 from 2.54% at June 30, 2018. We recorded total net charge-offs of $4.1 million, or 0.12% of average loans, for the quarter ended September 30, 2018 compared to net charge-offs of $0.4 million, or 0.01% of average loans, for the quarter ended June 30, 2018.

We recorded a provision for loan losses of $6.8 million for the quarter ended September 30, 2018 which includes the $5.8 million impact attributable to a single asset based lending relationship. We recorded a provision of $4.9 million for the quarter ended June 30, 2018. From June 30, 2018 to September 30, 2018, our ALLL increased from $24.5 million or 0.77% of total loans to $27.3 million or 0.78% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended September 30, 2018 of $6.1 million compared to $4.9 million for the quarter ended June 30, 2018. Non-interest income for the quarter ended September 30, 2018 was negatively impacted by a $0.5 million increase in the fair value of the contingent consideration liability related to the Interstate Capital Corporation acquisition.

For the quarter ended September 30, 2018, non-interest expense totaled $48.9 million, compared to $37.4 million for the quarter ended June 30, 2018. Non-interest expense for the quarter ended September 30, 2018 included transaction costs related to the FBD and SCC acquisitions of $5.9 million. Non-interest expense for the quarter ended June 30, 2018 included transaction costs related to the Interstate Capital Corporation acquisition of $1.1 million.

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 Thursday, October 18, 2018. Dan Karas, Chief Lending Officer, will also be available for questions.

To participate in the live conference call, please dial 1-855-940-9472 (Canada: 1-855-669-9657) and request to be joined into the Triumph Bancorp, Inc. (TBK) call. A simultaneous audio-only webcast may be accessed via the Company's website at www.triumphbancorp.com through the Investor Relations, News & Events, Webcasts and Presentations links, or through a direct link here at: https://services.choruscall.com/links/tbk181018.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. 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: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses (including our acquisitions of First Bancorp of Durango, Inc., Southern Colorado Corp., the operating assets of Interstate Capital Corporation and certain of its affiliates, Valley Bancorp, Inc., and nine branches from Independent Bank in Colorado) and any future acquisitions; changes in management personnel; interest rate risk; concentration of our factoring services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets, or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally, or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities, and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of the Federal Deposit Insurance Corporation insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

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

Non-GAAP Financial Measures

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

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

	As of and for the Three Months Ended															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)	2018			2018			2018			2017			2017			2018			2017
Financial Highlights:
Total assets	$	4,537,102		$	3,794,631		$	3,405,010		$	3,499,033		$	2,906,161		$	4,537,102		$	2,906,161
Loans held for investment	$	3,512,143		$	3,196,462		$	2,873,985		$	2,810,856		$	2,425,463		$	3,512,143		$	2,425,463
Deposits	$	3,439,049		$	2,624,942		$	2,533,498		$	2,621,348		$	2,012,545		$	3,439,049		$	2,012,545
Net income available to common stockholders	$	8,975		$	12,192		$	11,878		$	6,111		$	9,587		$	33,045		$	29,335

Performance Ratios - Annualized:
Return on average assets		0.90	%		1.37	%		1.43	%		0.79	%		1.36	%		1.21	%		1.46	%
Return on average total equity		5.88	%		8.53	%		12.20	%		6.35	%		10.71	%		8.40	%		12.44	%
Return on average common equity		5.85	%		8.54	%		12.30	%		6.30	%		10.79	%		8.41	%		12.58	%
Return on average tangible common equity ⁽¹⁾		7.57	%		9.95	%		14.75	%		7.33	%		12.28	%		10.27	%		14.65	%
Yield on loans		8.33	%		8.09	%		7.65	%		7.73	%		7.44	%		8.05	%		7.47	%
Adjusted yield on loans⁽¹⁾		8.18	%		7.59	%		7.36	%		7.47	%		7.20	%		7.74	%		7.14	%
Cost of interest bearing deposits		1.08	%		0.93	%		0.86	%		0.84	%		0.80	%		0.96	%		0.75	%
Cost of total deposits		0.85	%		0.73	%		0.68	%		0.67	%		0.64	%		0.76	%		0.61	%
Cost of total funds		1.16	%		1.06	%		0.95	%		0.92	%		0.90	%		1.06	%		0.84	%
Net interest margin		6.59	%		6.36	%		6.06	%		6.16	%		5.90	%		6.35	%		5.82	%
Adjusted net interest margin⁽¹⁾		6.45	%		5.92	%		5.81	%		5.93	%		5.69	%		6.08	%		5.54	%
Net non-interest expense to average assets		4.19	%		3.59	%		3.43	%		3.65	%		3.35	%		3.76	%		2.63	%
Adjusted net non-interest expense to average assets ⁽¹⁾		3.62	%		3.47	%		3.56	%		3.43	%		3.35	%		3.55	%		3.40	%
Efficiency ratio		72.15	%		64.26	%		65.09	%		66.74	%		64.61	%		67.50	%		61.68	%
Adjusted efficiency ratio⁽¹⁾		63.49	%		62.38	%		66.45	%		63.35	%		64.61	%		63.98	%		67.82	%

Asset Quality:⁽²⁾
Past due to total loans		2.23	%		2.54	%		2.41	%		2.33	%		2.22	%		2.23	%		2.22	%
Non-performing loans to total loans		1.13	%		1.43	%		1.41	%		1.38	%		1.25	%		1.13	%		1.25	%
Non-performing assets to total assets		0.93	%		1.28	%		1.47	%		1.39	%		1.42	%		0.93	%		1.42	%
ALLL to non-performing loans		68.82	%		53.57	%		49.52	%		48.41	%		67.33	%		68.82	%		67.33	%
ALLL to total loans		0.78	%		0.77	%		0.70	%		0.67	%		0.84	%		0.78	%		0.84	%
Net charge-offs to average loans		0.12	%		0.01	%		0.05	%		0.06	%		0.00	%		0.19	%		0.22	%

Capital:
Tier 1 capital to average assets⁽³⁾		11.75	%		15.00	%		11.23	%		11.80	%		13.50	%		11.75	%		13.50	%
Tier 1 capital to risk-weighted assets⁽³⁾		11.16	%		14.68	%		11.54	%		11.15	%		13.45	%		11.20	%		13.45	%
Common equity tier 1 capital to risk-weighted assets⁽³⁾		9.96	%		13.32	%		10.05	%		9.70	%		11.95	%		10.00	%		11.95	%
Total capital to risk-weighted assets⁽³⁾		13.05	%		16.73	%		13.66	%		13.21	%		15.91	%		13.09	%		15.91	%
Total equity to total assets		13.59	%		16.00	%		11.83	%		11.19	%		13.29	%		13.59	%		13.29	%
Tangible common stockholders' equity to tangible assets⁽¹⁾		9.35	%		13.05	%		9.86	%		9.26	%		11.66	%		9.35	%		11.66	%

Per Share Amounts:
Book value per share	$	23.10		$	22.76		$	18.89		$	18.35		$	18.08		$	23.10		$	18.08
Tangible book value per share⁽¹⁾	$	15.42		$	18.27		$	15.82		$	15.29		$	16.04		$	15.42		$	16.04
Basic earnings per common share	$	0.34		$	0.48		$	0.57		$	0.29		$	0.48		$	1.37		$	1.58
Diluted earnings per common share	$	0.34		$	0.47		$	0.56		$	0.29		$	0.47		$	1.35		$	1.53
Adjusted diluted earnings per common share⁽¹⁾	$	0.51		$	0.50		$	0.52		$	0.34		$	0.47		$	1.53		$	1.02
Shares outstanding end of period		26,279,761			26,260,785			20,824,509			20,820,445			20,820,900			26,279,761			20,820,900

Unaudited consolidated balance sheet as of:

	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2018			2018			2018			2017			2017
ASSETS
Total cash and cash equivalents	$	282,409		$	133,365		$	106,046		$	134,129		$	80,557
Securities - available for sale		355,981			183,184			192,916			250,603			207,301
Securities - held to maturity		8,403			8,673			8,614			8,557			17,999
Equity securities		4,981			5,025			4,925			5,006			2,025
Loans held for sale		683			—			—			—			—
Loans held for investment		3,512,143			3,196,462			2,873,985			2,810,856			2,425,463
Allowance for loan and lease losses		(27,256	)		(24,547	)		(20,022	)		(18,748	)		(20,367	)
Loans, net		3,484,887			3,171,915			2,853,963			2,792,108			2,405,096
Assets held for sale		—			—			—			71,362			—
FHLB stock		23,109			19,223			16,508			16,006			16,076
Premises and equipment, net		82,935			68,313			62,826			62,861			43,678
Other real estate owned ("OREO"), net		2,442			2,528			9,186			9,191			10,753
Goodwill and intangible assets, net		201,842			117,777			63,923			63,778			42,452
Bank-owned life insurance		40,339			40,168			44,534			44,364			37,025
Deferred tax asset, net		8,137			8,810			8,849			8,959			14,130
Other assets		40,954			35,650			32,720			32,109			29,069
Total assets	$	4,537,102		$	3,794,631		$	3,405,010		$	3,499,033		$	2,906,161
LIABILITIES
Non-interest bearing deposits	$	697,903		$	561,033		$	548,991		$	564,225		$	403,643
Interest bearing deposits		2,741,146			2,063,909			1,984,507			2,057,123			1,608,902
Total deposits		3,439,049			2,624,942			2,533,498			2,621,348			2,012,545
Customer repurchase agreements		13,248			10,509			6,751			11,488			19,869
Federal Home Loan Bank advances		330,000			420,000			355,000			365,000			385,000
Subordinated notes		48,903			48,878			48,853			48,828			48,804
Junior subordinated debentures		38,966			38,849			38,734			38,623			33,047
Other liabilities		50,295			44,228			19,230			22,048			20,799
Total liabilities		3,920,461			3,187,406			3,002,066			3,107,335			2,520,064
EQUITY
Preferred stock series A		4,550			4,550			4,550			4,550			4,550
Preferred stock series B		5,108			5,108			5,108			5,108			5,108
Common stock		264			264			209			209			209
Additional paid-in-capital		458,920			457,980			265,406			264,855			264,531
Treasury stock, at cost		(2,285	)		(2,254	)		(1,853	)		(1,784	)		(1,760	)
Retained earnings		152,401			143,426			131,234			119,356			113,245
Accumulated other comprehensive income		(2,317	)		(1,849	)		(1,710	)		(596	)		214
Total equity		616,641			607,225			402,944			391,698			386,097
Total liabilities and equity	$	4,537,102		$	3,794,631		$	3,405,010		$	3,499,033		$	2,906,161

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)	2018			2018			2018			2017			2017			2018			2017
Interest income:
Loans, including fees	$	41,257		$	38,148		$	36,883		$	34,856		$	30,863		$	116,288		$	86,711
Factored receivables, including fees		27,939			20,791			15,303			15,000			12,198			64,033			32,177
Securities		1,551			1,179			1,310			1,819			1,655			4,040			5,004
FHLB stock		147			101			105			78			51			353			129
Cash deposits		865			1,030			517			464			370			2,412			986
Total interest income		71,759			61,249			54,118			52,217			45,137			187,126			125,007
Interest expense:
Deposits		6,219			4,631			4,277			3,884			3,272			15,127			9,198
Subordinated notes		837			838			837			836			837			2,512			2,508
Junior subordinated debentures		714			713			597			520			495			2,024			1,435
Other borrowings		2,207			1,810			1,277			1,181			1,021			5,294			1,978
Total interest expense		9,977			7,992			6,988			6,421			5,625			24,957			15,119
Net interest income		61,782			53,257			47,130			45,796			39,512			162,169			109,888
Provision for loan losses		6,803			4,906			2,548			1,931			572			14,257			9,697
Net interest income after provision for loan losses		54,979			48,351			44,582			43,865			38,940			147,912			100,191
Non-interest income:
Service charges on deposits		1,412			1,210			1,145			1,178			1,046			3,767			3,003
Card income		1,877			1,394			1,244			1,122			956			4,515			2,700
Net OREO gains (losses) and valuation adjustments		65			(528	)		(88	)		(764	)		15			(551	)		(86	)
Net gains (losses) on sale of securities		—			—			(272	)		—			35			(272	)		35
Fee income		1,593			1,121			800			658			625			3,514			1,845
Insurance commissions		1,113			819			714			857			826			2,646			2,125
Asset management fees		—			—			—			—			—			—			1,717
Gain on sale of subsidiary		—			—			1,071			—			—			1,071			20,860
Other		(1	)		929			558			947			668			1,486			4,459
Total non-interest income		6,059			4,945			5,172			3,998			4,171			16,176			36,658
Non-interest expense:
Salaries and employee benefits		24,695			20,527			19,404			18,009			16,717			64,626			54,687
Occupancy, furniture and equipment		3,553			3,014			3,054			2,728			2,398			9,621			7,105
FDIC insurance and other regulatory assessments		363			383			199			411			294			945			790
Professional fees		3,384			2,078			1,640			2,521			1,465			7,102			4,671
Amortization of intangible assets		2,064			1,361			1,117			2,309			870			4,542			2,892
Advertising and promotion		1,609			1,300			1,029			573			804			3,938			2,653
Communications and technology		7,252			3,271			3,359			2,291			2,145			13,882			6,552
Other		6,026			5,469			4,240			4,389			3,532			15,735			11,033
Total non-interest expense		48,946			37,403			34,042			33,231			28,225			120,391			90,383
Net income before income tax		12,092			15,893			15,712			14,632			14,886			43,697			46,466
Income tax expense		2,922			3,508			3,644			8,327			5,104			10,074			16,551
Net income	$	9,170		$	12,385		$	12,068		$	6,305		$	9,782		$	33,623		$	29,915
Dividends on preferred stock		(195	)		(193	)		(190	)		(194	)		(195	)		(578	)		(580	)
Net income available to common stockholders	$	8,975		$	12,192		$	11,878		$	6,111		$	9,587		$	33,045		$	29,335

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)	2018		2018		2018		2017		2017		2018		2017
Basic
Net income to common stockholders	$	8,975	$	12,192	$	11,878	$	6,111	$	9,587	$	33,045	$	29,335
Weighted average common shares outstanding		26,178,194		25,519,108		20,721,363		20,717,548		19,811,577		24,159,543		18,600,009
Basic earnings per common share	$	0.34	$	0.48	$	0.57	$	0.29	$	0.48	$	1.37	$	1.58

Diluted
Net income to common stockholders	$	8,975	$	12,192	$	11,878	$	6,111	$	9,587	$	33,045	$	29,335
Dilutive effect of preferred stock		195		193		190		194		195		578		580
Net income to common stockholders - diluted	$	9,170	$	12,385	$	12,068	$	6,305	$	9,782	$	33,623	$	29,915
Weighted average common shares outstanding		26,178,194		25,519,108		20,721,363		20,717,548		19,811,577		24,159,543		18,600,009
Dilutive effects of:
Assumed conversion of Preferred A		315,773		315,773		315,773		315,773		315,773		315,773		315,773
Assumed conversion of Preferred B		354,471		354,471		354,471		354,471		354,471		354,471		354,471
Assumed exercises of stock warrants		—		—		—		—		54,476		—		110,089
Assumed exercises of stock options		90,320		86,821		83,872		56,359		45,788		86,728		42,084
Restricted stock awards		45,796		37,417		85,045		74,318		63,384		55,087		65,999
Restricted stock units		7,276		2,288		—		—		—		2,706		—
Performance stock units		—		—		—		—		—		—		—
Weighted average shares outstanding - diluted		26,991,830		26,315,878		21,560,524		21,518,469		20,645,469		24,974,308		19,488,425
Diluted earnings per common share	$	0.34	$	0.47	$	0.56	$	0.29	$	0.47	$	1.35	$	1.53


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,
	2018		2018		2018		2017		2017		2018		2017
Assumed conversion of Preferred A		—		—		—		—		—		—		—
Assumed conversion of Preferred B		—		—		—		—		—		—		—
Stock options		51,952		51,952		—		57,926		58,442		51,952		58,442
Restricted stock awards		14,513		—		—		—		—		14,513		—
Restricted stock units		—		—		—		—		—		—		—
Performance stock units		59,658		59,658		—		—		—		59,658		—

Loans held for investment summarized as of:

	September 30,		June 30,		March 31,		December 31,		September 30,
(Dollars in thousands)	2018		2018		2018		2017		2017
Commercial real estate	$	906,494	$	766,839	$	781,006	$	745,893	$	574,530
Construction, land development, land		190,920		147,852		143,876		134,812		141,368
1-4 family residential properties		194,752		122,653		122,979		125,827		96,032
Farmland		177,313		177,060		184,064		180,141		130,471
Commercial		1,123,598		1,006,443		930,283		920,812		890,372
Factored receivables		611,285		603,812		397,145		374,410		341,880
Consumer		31,423		28,775		29,244		31,131		30,093
Mortgage warehouse		276,358		343,028		285,388		297,830		220,717
Total loans	$	3,512,143	$	3,196,462	$	2,873,985	$	2,810,856	$	2,425,463

A portion of our total loans held for investment portfolio consists of traditional community bank loans as well as commercial finance products offered under our commercial finance brands on a nationwide basis. Commercial finance loans are further summarized below:

	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2018			2018			2018			2017			2017
Equipment	$	323,832		$	290,314		$	260,502		$	254,119		$	226,120
Asset based lending (General)		273,096			261,412			230,314			213,471			193,884
Asset based lending (Healthcare)		—			—			—			—			67,889
Premium finance		75,293			51,416			48,561			55,520			57,083
Factored receivables		611,285			603,812			397,145			374,410			341,880
Commercial finance	$	1,283,506		$	1,206,954		$	936,522		$	897,520		$	886,856

Commercial finance % of total loans		37	%		38	%		33	%		32	%		37	%

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

	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2018			2018			2018			2017			2017
Average community banking	$	2,039,624		$	1,897,678		$	1,816,921		$	1,637,195		$	1,463,401
Average commercial finance⁽¹⁾		1,254,095			1,024,369			949,938			921,579			831,955
Average total loans	$	3,293,719		$	2,922,047		$	2,766,859		$	2,558,774		$	2,295,356
Community banking yield		5.68	%		5.80	%		5.81	%		5.87	%		5.60	%
Commercial finance yield⁽¹⁾		12.66	%		12.08	%		11.17	%		11.03	%		10.62	%
Total loan yield		8.33	%		8.09	%		7.65	%		7.73	%		7.44	%

⁽¹⁾ Includes assets held for sale for the periods ended March 31, 2018 and December 31, 2017

Information pertaining to our factoring segment, which includes only factoring originated by our Triumph Business Capital subsidiary, summarized as of and for the quarters ended:

	September 30,			June 30,			March 31,			December 31,			September 30,
	2018			2018			2018			2017			2017
Factored receivable period end balance	$	579,985,000		$	577,548,000		$	372,771,000		$	346,293,000		$	315,742,000
Yield on average receivable balance		18.96	%		18.70	%		17.40	%		16.91	%		16.64	%
Rolling twelve quarter annual charge-off rate		0.38	%		0.41	%		0.50	%		0.41	%		0.44	%
Factored receivables - transportation concentration		83	%		84	%		86	%		84	%		84	%

Interest income, including fees	$	27,420,000		$	20,314,000		$	14,780,000		$	14,518,000		$	11,736,000
Non-interest income		942,000			920,000			590,000			535,000			774,000
Factored receivable total revenue		28,362,000			21,234,000			15,370,000			15,053,000			12,510,000
Average net funds employed		525,499,000			398,096,000			316,488,000			309,614,000			260,384,000
Yield on average net funds employed		21.41	%		21.39	%		19.70	%		19.29	%		19.06	%

Accounts receivable purchased	$	1,503,049,000		$	1,162,810,000		$	912,336,000		$	872,373,000		$	732,406,000
Number of invoices purchased		836,771			656,429			521,906			511,879			476,370
Average invoice size	$	1,796		$	1,771		$	1,751		$	1,705		$	1,537
Average invoice size - transportation	$	1,666		$	1,695		$	1,662		$	1,647		$	1,486
Average invoice size - non-transportation	$	3,267		$	2,522		$	2,627		$	2,251		$	1,965

Net new clients		422			2,072			280			233			235
Period end clients		5,932			5,510			3,438			3,158			2,925

Deposits summarized as of:

	September 30,		June 30,		March 31,		December 31,		September 30,
(Dollars in thousands)	2018		2018		2018		2017		2017
Non-interest bearing demand	$	697,903	$	561,033	$	548,991	$	564,225	$	403,643
Interest bearing demand		608,775		358,246		392,947		403,244		284,282
Individual retirement accounts		118,459		101,380		105,558		108,505		97,186
Money market		413,402		268,699		283,354		283,969		189,177
Savings		373,062		239,127		244,103		235,296		158,464
Certificates of deposit		854,048		751,290		783,651		837,384		770,599
Brokered deposits		373,400		345,167		174,894		188,725		109,194
Total deposits	$	3,439,049	$	2,624,942	$	2,533,498	$	2,621,348	$	2,012,545

Net interest margin summarized for the three months ended:

	September 30, 2018							June 30, 2018
	Average				Average			Average				Average
(Dollars in thousands)	Balance		Interest		Rate			Balance		Interest		Rate
Interest earning assets:
Interest earning cash balances	$	156,876	$	865		2.19	%	$	217,605	$	1,030		1.90	%
Taxable securities		183,238		1,207		2.61	%		168,182		1,024		2.44	%
Tax-exempt securities		66,208		344		2.06	%		35,016		155		1.78	%
FHLB stock		20,984		147		2.78	%		18,297		101		2.21	%
Loans		3,293,719		69,196		8.33	%		2,922,047		58,939		8.09	%
Total interest earning assets	$	3,721,025	$	71,759		7.65	%	$	3,361,147	$	61,249		7.31	%
Non-interest earning assets:
Other assets		339,535							267,813
Total assets	$	4,060,560						$	3,628,960
Interest bearing liabilities:
Deposits:
Interest bearing demand	$	418,226	$	200		0.19	%	$	381,114	$	215		0.23	%
Individual retirement accounts		105,774		339		1.27	%		103,358		315		1.22	%
Money market		303,843		594		0.78	%		256,841		335		0.52	%
Savings		272,230		60		0.09	%		241,029		30		0.05	%
Certificates of deposit		793,685		3,068		1.53	%		767,484		2,593		1.36	%
Brokered deposits		384,337		1,958		2.02	%		246,089		1,143		1.86	%
Total deposits		2,278,095		6,219		1.08	%		1,995,915		4,631		0.93	%
Subordinated notes		48,890		837		6.79	%		48,864		838		6.88	%
Junior subordinated debentures		38,905		714		7.28	%		38,787		713		7.37	%
Other borrowings		425,781		2,207		2.06	%		385,646		1,810		1.88	%
Total interest bearing liabilities	$	2,791,671	$	9,977		1.42	%	$	2,469,212	$	7,992		1.30	%
Non-interest bearing liabilities and equity:
Non-interest bearing demand deposits		608,245							553,309
Other liabilities		41,961							23,823
Total equity		618,683							582,616
Total liabilities and equity	$	4,060,560						$	3,628,960
Net interest income			$	61,782						$	53,257
Interest spread						6.23	%						6.01	%
Net interest margin						6.59	%						6.36	%

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)	2018			2018			2018			2017			2017			2018			2017
Net income available to common stockholders	$	8,975		$	12,192		$	11,878		$	6,111		$	9,587		$	33,045		$	29,335
Gain on sale of subsidiary		—			—			(1,071	)		—			—			(1,071	)		(20,860	)
Incremental bonus related to transaction		—			—			—			—			—			—			4,814
Transaction related costs		5,871			1,094			—			1,688			—			6,965			325
Tax effect of adjustments		(1,392	)		(257	)		248			(601	)		—			(1,401	)		5,754
Adjusted net income available to common stockholders	$	13,454		$	13,029		$	11,055		$	7,198		$	9,587		$	37,538		$	19,368
Dilutive effect of convertible preferred stock		195			193			190			194			195			578			580
Adjusted net income available to common stockholders - diluted	$	13,649		$	13,222		$	11,245		$	7,392		$	9,782		$	38,116		$	19,948

Weighted average shares outstanding - diluted		26,991,830			26,315,878			21,560,524			21,518,469			20,645,469			24,974,308			19,488,425
Adjusted effects of assumed Preferred Stock conversion		—			—			—			—			—			—			—
Adjusted weighted average shares outstanding - diluted		26,991,830			26,315,878			21,560,524			21,518,469			20,645,469			24,974,308			19,488,425
Adjusted diluted earnings per common share	$	0.51		$	0.50		$	0.52		$	0.34		$	0.47		$	1.53		$	1.02

Net income available to common stockholders	$	8,975		$	12,192		$	11,878		$	6,111		$	9,587		$	33,045		$	29,335
Average tangible common equity		470,553			491,492			326,614			330,819			309,624			430,080			267,633
Return on average tangible common equity		7.57	%		9.95	%		14.75	%		7.33	%		12.28	%		10.27	%		14.65	%

Adjusted efficiency ratio:
Net interest income	$	61,782		$	53,257		$	47,130		$	45,796		$	39,512		$	162,169		$	109,888
Non-interest income		6,059			4,945			5,172			3,998			4,171			16,176			36,658
Operating revenue		67,841			58,202			52,302			49,794			43,683			178,345			146,546
Gain on sale of subsidiary		—			—			(1,071	)		—			—			(1,071	)		(20,860	)
Adjusted operating revenue	$	67,841		$	58,202		$	51,231		$	49,794		$	43,683		$	177,274		$	125,686
Non-interest expenses	$	48,946		$	37,403		$	34,042		$	33,231		$	28,225		$	120,391		$	90,383
Incremental bonus related to transaction		—			—			—			—			—			—			(4,814	)
Transaction related costs		(5,871	)		(1,094	)		—			(1,688	)		—			(6,965	)		(325	)
Adjusted non-interest expenses	$	43,075		$	36,309		$	34,042		$	31,543		$	28,225		$	113,426		$	85,244
Adjusted efficiency ratio		63.49	%		62.38	%		66.45	%		63.35	%		64.61	%		63.98	%		67.82	%

Adjusted net non-interest expense to average assets ratio:
Non-interest expenses	$	48,946		$	37,403		$	34,042		$	33,231		$	28,225		$	120,391		$	90,383
Incremental bonus related to transaction		—			—			—			—			—			—			(4,814	)
Transaction related costs		(5,871	)		(1,094	)		—			(1,688	)		—			(6,965	)		(325	)
Adjusted non-interest expenses	$	43,075		$	36,309		$	34,042		$	31,543		$	28,225		$	113,426		$	85,244

Total non-interest income	$	6,059		$	4,945		$	5,172		$	3,998		$	4,171		$	16,176		$	36,658
Gain on sale of subsidiary		—			—			(1,071	)		—			—			(1,071	)		(20,860	)
Adjusted non-interest income	$	6,059		$	4,945		$	4,101		$	3,998		$	4,171		$	15,105		$	15,798
Adjusted net non-interest expenses	$	37,016		$	31,364		$	29,941		$	27,545		$	24,054		$	98,321		$	69,446
Average total assets	$	4,060,560		$	3,628,960		$	3,410,883		$	3,181,697		$	2,849,170		$	3,702,513		$	2,731,426
Adjusted net non-interest expense to average assets ratio		3.62	%		3.47	%		3.56	%		3.43	%		3.35	%		3.55	%		3.40	%

	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)	2018			2018			2018			2017			2017			2018			2017
Reported yield on loans		8.33	%		8.09	%		7.65	%		7.73	%		7.44	%		8.05	%		7.47	%
Effect of accretion income on acquired loans		(0.15	%)		(0.50	%)		(0.29	%)		(0.26	%)		(0.24	%)		(0.31	%)		(0.33	%)
Adjusted yield on loans		8.18	%		7.59	%		7.36	%		7.47	%		7.20	%		7.74	%		7.14	%

Reported net interest margin		6.59	%		6.36	%		6.06	%		6.16	%		5.90	%		6.35	%		5.82	%
Effect of accretion income on acquired loans		(0.14	%)		(0.44	%)		(0.25	%)		(0.23	%)		(0.21	%)		(0.27	%)		(0.28	%)
Adjusted net interest margin		6.45	%		5.92	%		5.81	%		5.93	%		5.69	%		6.08	%		5.54	%

Total stockholders' equity	$	616,641		$	607,225		$	402,944		$	391,698		$	386,097		$	616,641		$	386,097
Preferred stock liquidation preference		(9,658	)		(9,658	)		(9,658	)		(9,658	)		(9,658	)		(9,658	)		(9,658	)
Total common stockholders' equity		606,983			597,567			393,286			382,040			376,439			606,983			376,439
Goodwill and other intangibles		(201,842	)		(117,777	)		(63,923	)		(63,778	)		(42,452	)		(201,842	)		(42,452	)
Tangible common stockholders' equity	$	405,141		$	479,790		$	329,363		$	318,262		$	333,987		$	405,141		$	333,987
Common shares outstanding		26,279,761			26,260,785			20,824,509			20,820,445			20,820,900			26,279,761			20,820,900
Tangible book value per share	$	15.42		$	18.27		$	15.82		$	15.29		$	16.04		$	15.42		$	16.04

Total assets at end of period	$	4,537,102		$	3,794,631		$	3,405,010		$	3,499,033		$	2,906,161		$	4,537,102		$	2,906,161
Goodwill and other intangibles		(201,842	)		(117,777	)		(63,923	)		(63,778	)		(42,452	)		(201,842	)		(42,452	)
Adjusted total assets at period end	$	4,335,260		$	3,676,854		$	3,341,087		$	3,435,255		$	2,863,709		$	4,335,260		$	2,863,709
Tangible common stockholders' equity ratio		9.35	%		13.05	%		9.86	%		9.26	%		11.66	%		9.35	%		11.66	%

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

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

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

3) Current quarter ratios are preliminary.

Source: Triumph Bancorp, Inc.

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

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

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