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Triumph Bancorp Reports 2014 Net Income to Common Stockholders of $16.9 Million and 4th Quarter Net Income to Common Stockholders of $2.0 Million

DALLAS, March 4, 2015 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq:TBK) today announced earnings and operating results for the fourth quarter and full year of 2014.

"Our 2014 results reflect a year of substantial accomplishments and progress as we completed our first full year of consolidated operations with our Triumph Community Bank subsidiary, experienced continued strong loan growth and yields in our national commercial finance lending platforms and issued two collateralized loan obligations ("CLOs") at our asset management subsidiary. We also completed the initial public offering of our common stock in the fourth quarter of 2014," said Aaron P. Graft, Chief Executive Officer, Triumph Bancorp, Inc. "The completion of our initial public offering has us well positioned with the capital and liquidity to pursue our strategy of supplementing strong organic loan growth with acquisitions to improve our deposit mix and operating leverage."

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.

2014 Annual and 4th Quarter Highlights

  • Triumph Bancorp, Inc. reported net income of $19.8 million and net income available to common stockholders of $16.9 million for the year ended December 31, 2014, compared to net income of $13.4 million and net income available to common stockholders of $11.8 million for the year ended December 31, 2013. For the fourth quarter of 2014, net income was $2.8 million and net income available to common stockholders was $2.0 million, compared to net income of $11.7 million and net income available to common stockholders of $11.3 million for the quarter ended December 31, 2013. Net income for 2014 and 2013 was impacted by the recognition of a $12.6 million pretax gain on branch sale in the third quarter of 2014 and a $9.0 million bargain purchase gain in the fourth quarter of 2013, respectively.
  • Fully diluted earnings per share were $1.52 for the year ended December 31, 2014, compared to $1.39 for the same period in 2013. Diluted earnings per share were $0.14 for the quarter ended December 31, 2014, compared to $1.12 for the same period in 2013. Earnings per share results were impacted during 2014 as a result of 7,705,000 shares of common stock issued in the Company's initial public offering completed in November 2014. This offering increased common equity by $83.8 million.
  • Return on average common equity was 11.61% and return on average assets was 1.46% for the year ended December 31, 2014, compared to 11.98% and 2.40%, respectively, for the year ended December 31, 2013. For the quarter ended December 31, 2014, our annualized return on average common equity and return on average assets were 4.30% and 0.78%, compared to 37.88% and 3.99% for the quarter ended December 31, 2013.

Recent Developments

On March 3, 2015, Triumph Capital Advisors, LLC, a wholly owned subsidiary of Triumph Bancorp, Inc., acquired all of the equity of Doral Money, Inc. ("Doral Money"), a subsidiary of Doral Bank, in connection with the Federal Deposit Insurance Corporation's ("FDIC") auction process for Doral Bank. As a result of this transaction, Triumph Capital Advisors also acquired the management contracts to two active CLOs consisting of approximately $703 million in assets under management, bringing Triumph Capital Advisors' outstanding assets under management ("AUM") to approximately $1.7 billion, including both active CLOs and warehouse assets. In addition to the CLO management contracts being acquired, the primary assets of Doral Money consist of loans with a face value of approximately $37 million, which were acquired as part of the transaction, and certain securities of the CLOs, which were divested to a third party following the closing as part of an agreement entered into by Triumph Capital Advisors in connection with the transaction.

Balance Sheet

Total loans held for investment were $1.0 billion at December 31, 2014, an increase of $124.8 million or 14.2% for our full 2014 fiscal year, and $28.7 million or 2.9%, during the fourth quarter. This increase was primarily due to continued growth in our commercial finance loan portfolio, which consists of our factored receivables, the asset based loans and equipment loans we originate under our Triumph Commercial Finance brand, and the healthcare asset based loans we originate under our Triumph Healthcare Finance brand. In aggregate, our commercial finance loan portfolio totaled $375.4 million as of December 31, 2014, an increase of $178.2 million or 90.4% in 2014, and $20.9 million or 5.9% in the fourth quarter of 2014.

Total deposits were $1.2 billion at December 31, 2014, an increase of $120.4 million or 11.5% for our full 2014 fiscal year, and $59.6 million or 5.4% for the fourth quarter of 2014. Noninterest-bearing deposits accounted for 15.4% of total deposits and non-time deposits accounted 51.9% of total deposits. The average cost of our interest-bearing deposits was 0.61% for the quarter ended December 31, 2014 compared to 0.56% for the quarter ended September 30, 2014, on an annualized basis.

Net Interest Income

We earned net interest income of $80.5 million for our full 2014 fiscal year. For the quarter ended December 31, 2014, we earned net interest income of $21.3 million compared to $20.4 million for the quarter ended September 30, 2014. Yields on loans for the quarter ended December 31, 2014 were up 32 bps to 8.98% (8.29% adjusted for purchase discount accretion) compared to 8.66% (8.03% adjusted for purchase discount accretion) for the quarter ended September 30, 2014, driven primarily by the growth in our commercial finance loan portfolio, both in aggregate and as a percentage of total loans. Net interest margin ("NIM") decreased 11 bps to 6.58% for the quarter ended December 31, 2014 from 6.69% for the quarter ended September 30, 2014. Adjusted net interest margin was 6.05% for the quarter ended December 31, 2014 compared to 6.19% for the quarter ended September 30, 2014. The decrease in net interest margin in the fourth quarter of 2014 (compared to the increase in our yield on loans over the same period) was attributable primarily to the receipt of our initial public offering proceeds during such period.

Asset Quality

Our provision for loan losses was $1.8 million for the quarter ended December 31, 2014 compared to $1.4 million for the quarter ended September 30, 2014. We experienced net charge-offs of $0.3 million for the quarter ended December 31, 2014 compared to net charge-offs of $0.3 million for the quarter ended September 30, 2014. From September 30, 2014 to December 31, 2014, our allowance for loan and lease losses ("ALLL") increased from $7.3 million or 0.75% of total loans to $8.8 million or 0.88% of total loans. Nonperforming Assets ("NPAs") improved 32 bps from September 30, 2014 to December 31, 2014 to 1.73% of total assets.

Noninterest Income and Expense

We earned noninterest income of $24.8 million for our full 2014 fiscal year. For the quarter ended December 31, 2014 we earned noninterest income of $3.7 million compared to $3.2 million (excluding the $12.6 million gain on branch sale) for the quarter ended September 30, 2014. Noninterest income was positively impacted in the fourth quarter of 2014 by approximately $0.7 million in recoveries on loans previously charged off by Triumph Community Bank prior to the Company's acquisition of Triumph Community Bank. We earned $0.5 million in asset management fees during the fourth quarter.

We incurred noninterest expense of $69.2 million for our full 2014 fiscal year. For the quarter ended December 31, 2014, noninterest expense totaled $19.7 million, compared to $18.5 million for the quarter ended September 30, 2014, an increase of $1.2 million. Noninterest expense incurred during the quarter ended December 31, 2014 includes $2.1 million of stock-based compensation expense recognized in connection with the grant of 378,343 shares of common stock to our officers and employees shortly following our initial public offering pursuant to our 2014 Omnibus Incentive Plan. One third of these grants vested at issuance, causing the entire expense impact of the fully vested portion of such grants to be reflected during the quarter.

Income tax expense for the year ended December 31, 2014 was $ 10.4 million or 34.4% of net income before taxes, compared to $2.1 million or 13.7% for the year ended December 31, 2013. The lower effective tax rate in 2013 is substantially due to the nontaxable nature of the $9.0 million bargain purchase gain recognized on the acquisition of Triumph Community Bank. Income tax expense for the year ended December 31, 2014 includes a $1.0 million benefit from the reversal of a valuation allowance on capital loss carryforwards and the revaluation of the Company's net deferred tax asset at a higher effective tax rate based upon the estimated tax rate expected to be in effect when realized.

Other Items

On February 18, 2015, a trademark infringement suit was filed against us and certain of our subsidiaries by a third party asserting that our use of "Triumph" as part of our trademarks and domain names causes a likelihood of confusion and has caused actual confusion, and infringes plaintiffs' trademarks. The suit seeks damages as well as an injunction to prevent our use of the name "Triumph" and certain other matters. We have been served with process with respect to the suit and expect to file a timely answer.

Conference Call Information

Aaron P. Graft, Vice Chairman and CEO, Bryce Fowler, CFO and Dan Karas, Chief Lending Officer of Triumph Savings Bank, will review the quarterly results in a conference call for investors and analysts beginning at 9:00 a.m. Central Time on Thursday, March 5th, 2015.

To participate in the live conference call, please dial 1 (888) 771-4371 (U.S. and Canada) and enter Conference ID # 38868986. A simultaneous audio-only webcast may be accessed via the Company's website at www.triumphbancorp.com through the Investor Relations, Webcasts and Presentations links, or through a direct link here at http://edge.media-server.com/m/p/ni3qzjr3/lan/en. An archive of this conference call will subsequently be available at this same location on the Company's website.

About Triumph

Headquartered in Dallas, Texas, Triumph Bancorp, Inc. (Nasdaq:TBK) is a financial holding company with a diversified line of community banking, commercial finance and asset management activities. www.triumphbancorp.com

Forward-Looking Statements

This presentation 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 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; risks related to our asset management business; 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 obligations associated with being a public company; 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 further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled "Risk Factors" in the most recent registration statement on Form S-1 (the "Prospectus") filed by us with the Securities and Exchange Commission.

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. See page 10 of this press release for additional information.

The following table sets forth key metrics used by Triumph to monitor its operations.

As of and For the Three Months Ended
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
Key Metrics 2014 2014 2014 2014 2013
Financial Highlights (in thousands)
Total assets $1,447,898 $1,347,798 $1,407,072 $1,297,110 $1,288,239
Total loans held for investment 1,005,878 977,139 939,517 800,667 881,099
Total deposits 1,165,229 1,105,624 1,108,254 1,050,312 1,044,854
Net income available to common stockholders $2,021 $9,495 $2,285 $3,148 $11,318
Performance ratios - annualized(2)
Return on average assets 0.78% 3.01% 0.88% 1.19% 3.99%
Return on average common equity (1) 4.30% 26.84% 7.05% 10.10% 37.88%
Return on average tangible common equity (ROATCE) (1) 5.11% 34.26% 8.98% 13.00% 48.88%
Return on average total equity 5.02% 23.16% 7.18% 9.26% 31.83%
Yield on loans 8.98% 8.66% 8.83% 9.17% 9.38%
Adjusted yield on loans (1) 8.29% 8.03% 7.75% 7.73% 7.69%
Cost of interest bearing deposits 0.61% 0.56% 0.50% 0.50% 0.55%
Cost of total deposits 0.52% 0.48% 0.42% 0.43% 0.47%
Cost of total funds 0.65% 0.59% 0.53% 0.56% 0.59%
Net interest margin (1) 6.58% 6.69% 6.58% 6.85% 6.68%
Adjusted net interest margin (1) 6.05% 6.19% 5.74% 5.73% 5.43%
Net noninterest expense to average assets (1) 4.44% 4.48% 3.99% 3.92% 3.82%
Noninterest expense to average assets 5.47% 5.41% 4.77% 4.75% 4.99%
Efficiency ratio (1) 78.58% 78.29% 71.78% 69.40% 69.06%
Asset Quality(3)
Past due to total loans 2.57% 2.61% 2.82% 2.99% 2.78%
Nonperforming loans to total loans 1.66% 1.80% 1.54% 1.32% 1.41%
Nonperforming assets to total assets 1.73% 2.05% 1.82% 1.86% 2.03%
ALLL to nonperforming loans 53.02% 41.68% 43.16% 43.92% 29.41%
ALLL to total loans 0.88% 0.75% 0.67% 0.58% 0.41%
Net charge-offs to average loans 0.03% 0.03% 0.01% (0.01%) 0.02%
Capital
Tier 1 capital to average assets 15.92% 12.20% 11.00% 11.89% 12.87%
Tier 1 capital to risk-weighted assets 19.56% 14.59% 12.66% 14.32% 14.11%
Total capital to risk-weighted assets 20.35% 15.27% 13.22% 14.78% 14.47%
Total equity to total assets 16.40% 13.05% 11.79% 12.66% 12.47%
Total stockholders' equity to total assets 16.40% 11.12% 9.95% 10.58% 10.37%
Tangible common stockholders' equity to tangible assets 14.00% 8.38% 7.21% 7.85% 7.57%
Market
Book value per share $12.68 $14.18 $13.23 $12.94 $12.60
Tangible book value per share (1) $11.06 $11.17 $10.08 $10.12 $9.70
Basic earnings per common share $0.14 $0.96 $0.23 $0.32 $1.17
Diluted earnings per common share $0.14 $0.91 $0.23 $0.32 $1.12
Shares outstanding end of period 17,963,783 9,886,778 9,845,819 9,846,096 9,832,585
Weighted average shares outstanding - basic 14,172,889 9,872,923 9,845,819 9,832,735 9,675,991
Weighted average shares outstanding - diluted 14,261,717 10,602,155 9,910,507 10,544,902 10,259,904

Unaudited consolidated balance sheet as of:

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(Dollars in thousands) 2014 2014 2014 2014 2013
ASSETS
Cash and cash equivalents $160,888 $75,625 $85,716 $106,951 $85,797
Securities - available for sale 162,024 165,489 168,694 165,276 184,654
Securities - held to maturity 745 745 744 744 743
Loans held for sale 3,288 7,295 4,088 4,902 5,393
Loans held for investment 1,005,878 977,139 939,517 800,667 881,099
Allowance for loan and lease losses (8,843) (7,320) (6,253) (4,631) (3,645)
Loans, net 997,035 969,819 933,264 796,036 877,454
Branch assets held for sale 80,331 88,692
FHLB and FRB stock 4,903 5,826 7,976 5,233 5,802
Premises and equipment, net 21,933 21,744 20,708 20,502 23,344
Other real estate owned (OREO) 8,423 10,019 11,103 13,575 13,783
Goodwill and intangible assets, net 29,057 29,783 31,043 27,792 28,518
Bank-owned life insurance 29,083 28,955 28,829 28,695 28,554
Other assets 30,519 32,498 34,576 38,712 34,197
Total assets $1,447,898 $1,347,798 $1,407,072 $1,297,110 $1,288,239
LIABILITIES
Noninterest bearing deposits $179,848 $154,750 $176,245 $155,879 $150,238
Interest bearing deposits 985,381 950,874 932,009 894,433 894,616
Total deposits 1,165,229 1,105,624 1,108,254 1,050,312 1,044,854
Customer repurchase agreements 9,282 15,644 15,313 17,670 11,330
Federal Home Loan Bank advances 3,000 70,000 20,750 21,000
Senior secured note 11,630 11,944 12,259 12,573
Junior subordinated debentures 24,423 24,359 24,296 24,233 24,171
Other liabilities 8,455 14,713 11,341 7,705 13,714
Total liabilities 1,210,389 1,171,970 1,241,148 1,132,929 1,127,642
EQUITY
Preferred stock series A 4,550 4,550 4,550 4,550 4,550
Preferred stock series B 5,196 5,196 5,196 5,196 5,196
Common stock 180 99 98 98 98
Additional paid-in-capital 191,049 105,304 104,827 104,744 104,631
Treasury stock (161) (68) (4)
Retained earnings 35,744 34,014 24,519 22,111 18,992
Accumulated other comprehensive income 951 836 841 485 133
Total stockholders' equity 237,509 149,931 140,027 137,184 133,600
Noncontrolling interests 25,897 25,897 26,997 26,997
Total equity 237,509 175,828 165,924 164,181 160,597
Total liabilities and equity $1,447,898 $1,347,798 $1,407,072 $1,297,110 $1,288,239

Unaudited consolidated statement of income for the three months ended:

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(Dollars in thousands) 2014 2014 2014 2014 2013
Interest income:
Loans, including fees $14,138 $13,706 $13,860 $14,376 $12,906
Factored receivables, including fees 8,367 7,681 6,838 5,272 5,205
Taxable securities 644 666 663 657 618
Tax exempt securities 14 15 15 16 39
Cash deposits 117 50 77 58 74
Total interest income 23,280 22,118 21,453 20,379 18,842
Interest expense:
Deposits 1,498 1,289 1,141 1,108 1,103
Federal Home Loan Bank advances 2 19 20 4 9
Senior secured note 173 134 137 140 123
Junior subordinated debentures 276 276 272 271 247
Other 2 5 2 1 2
Total interest expense 1,951 1,723 1,572 1,524 1,484
Net interest income 21,329 20,395 19,881 18,855 17,358
Provision for loan losses 1,811 1,375 1,747 925 1,057
Net interest income after provision for loan losses 19,518 19,020 18,134 17,930 16,301
Noninterest income:
Service charges on deposits 647 811 813 738 703
Card income 516 544 548 490 405
Net realized gains/(losses) & valuation adjustments on OREO (242) (11) (252) (77) 86
Net gains on sale of securities 62 10 16
Net gains on sale of loans 437 484 319 255 494
Fee income 553 448 421 398 355
Gain on branch sale 12,619
Bargain purchase gain 9,014
Asset management fees 486 374 129
Other 1,262 525 655 789 465
Total noninterest income 3,721 15,804 2,633 2,609 11,522
Noninterest expense:
Salaries and employee benefits 12,752 11,032 9,471 8,876 8,322
Occupancy, furniture and equipment 1,429 1,319 1,336 1,390 1,119
FDIC insurance assessment 221 280 280 261 283
Carrying costs for OREO 68 73 100 132 52
Professional fees 1,146 1,043 793 592 1,455
Amortization of intangible assets 727 746 724 726 620
Advertising and promotion 366 1,102 683 443 222
Communications and technology 961 954 945 888 754
Other 2,015 1,912 1,828 1,588 1,830
Total noninterest expense 19,685 18,461 16,160 14,896 14,657
Net income before income tax 3,554 16,363 4,607 5,643 13,166
Income tax expense 747 6,089 1,626 1,916 1,449
Net income $2,807 $10,274 $2,981 $3,727 $11,717
Effect of noncontrolling interests and preferred shares (786) (779) (696) (579) (399)
Net income to common stockholders $2,021 $9,495 $2,285 $3,148 $11,318

Loans held for investment summarized for the most recent five quarters:

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(Dollars in thousands) 2014 2014 2014 2014 2013
Commercial real estate $249,164 $261,836 $265,129 $268,863 $331,462
Construction, land development, land 42,914 45,996 43,040 39,230 37,626
1-4 family residential properties 78,738 80,419 81,187 79,542 91,301
Farmland 22,496 20,059 19,644 20,114 20,294
Commercial 364,567 340,316 328,361 234,986 255,655
Factored receivables 180,910 169,112 156,272 129,531 117,370
Consumer 11,941 12,527 13,525 13,515 13,878
Mortgage warehouse 55,148 46,874 32,359 14,886 13,513
Total loans $1,005,878 $977,139 $939,517 $800,667 $881,099

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

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(Dollars in thousands) 2014 2014 2014 2014 2013
Equipment* $106,354 $94,460 $71,198 $58,737 $48,978
Asset based lending (General)* 46,388 50,046 48,699 39,643 30,827
Asset based lending (Healthcare)* 41,770 40,885 45,751
Factored receivables 180,910 169,112 156,272 129,531 117,370
Commercial finance $375,422 $354,503 $321,920 $227,911 $197,175
Total loans held for investment $1,005,878 $977,139 $939,517 $800,667 $881,099
Commercial finance as a % of total 37% 36% 34% 28% 22%
Community banking / other as a % of total 63% 64% 66% 72% 78%

*Denotes equipment loans offered under our Triumph Commercial Finance brand, general asset based loans offered under our Triumph Commercial Finance brand and healthcare asset based loan products offered under our Triumph Healthcare Finance brand.

Deposits summarized for the most recent five quarters:

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(Dollars in thousands) 2014 2014 2014 2014 2013
Noninterest bearing demand $179,848 $154,750 $176,245 $155,879 $150,238
Interest-bearing demand 236,525 209,491 248,992 209,170 199,826
Individual retirement accounts 55,034 54,378 53,856 54,709 54,512
Money market 117,514 125,371 138,204 142,522 157,406
Savings 70,407 72,012 73,207 73,011 69,336
Certificates of deposit 455,901 439,603 367,731 356,844 354,940
Brokered deposits 50,000 50,019 50,019 58,177 58,596
Total deposits $1,165,229 $1,105,624 $1,108,254 $1,050,312 $1,044,854

Net interest margin summarized for the most recent two quarters:

For the three months ended
December 31, 2014 September 30, 2014
Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
Interest earning assets:
Interest earning cash balances $121,935 $117 0.38% $55,558 $50 0.36%
Taxable securities 157,294 590 1.49% 159,779 612 1.52%
Tax-exempt securities 6,401 14 0.87% 6,569 15 0.91%
FHLB & Fed Reserve stock 5,203 54 4.12% 6,665 54 3.21%
Total loans (1) 994,633 22,505 8.98% 980,238 21,387 8.66%
Total interest earning assets $1,285,466 $23,280 7.19% $1,208,809 $22,118 7.26%
Noninterest earning assets:
Other assets 142,009 145,398
Total assets $1,427,475 $1,354,207
Interest bearing liabilities:
Deposits:
Interest bearing demand $232,784 $35 0.06% $215,862 $37 0.07%
Individual retirement accounts 53,381 154 1.14% 51,942 148 1.13%
Money market 121,242 71 0.23% 126,932 75 0.23%
Savings deposits 72,956 9 0.05% 73,833 9 0.05%
Certificates of deposit 449,166 1,103 0.97% 396,287 920 0.92%
Brokered deposits 50,190 126 1.00% 45,235 100 0.88%
Total deposits 979,719 1,498 0.61% 910,091 1,289 0.56%
Short-term borrowings 18,696 4 0.08% 55,915 24 0.17%
Senior secured note 5,337 173 12.86% 11,678 134 4.55%
Junior subordinated debentures 24,388 276 4.49% 24,320 276 4.50%
Total interest bearing liabilities $1,028,140 $1,951 0.75% $1,002,004 $1,723 0.68%
Noninterest bearing liabilities and equity:
Noninterest bearing demand deposits 164,369 162,619
Other liabilities 13,268 13,611
Total equity 221,698 175,973
Total liabilities and equity $1,427,475 $1,354,207
Net interest income $21,329 $20,395
Interest spread (2) 6.44% 6.58%
Net interest margin on a fully tax-equivalent basis (3) 6.58% 6.69%

Cost of total deposits 0.52% 0.48%
Cost of total funds 0.65% 0.59%

1. Balance totals include respective nonaccrual assets.

2. Net interest spread is the yield on average interest-earning assets less the rate on interest-bearing liabilities.

3. Net interest margin is the ratio of net interest income to average interest-earning assets.

Metrics and Non-GAAP financial reconciliation As of and For the Three Months Ended
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
(Dollars in thousands, except per share amounts) 2014 2014 2014 2014 2013
Net income available to common stockholders $2,021 $9,495 $2,285 $3,148 $11,318
Average tangible common equity 156,888 109,944 102,107 98,198 91,865
Return on average tangible common equity (ROATCE) 5.11% 34.26% 8.98% 13.00% 48.88%
Efficiency ratio:
Net interest income $21,329 $20,395 $19,881 $18,855 $17,358
Noninterest income 3,721 15,804 2,633 2,609 11,522
Operating revenue 25,050 36,199 22,514 21,464 28,880
Less: gain on branch sale 12,619
Less: bargain purchase gain 9,014
Adjusted operating revenue $25,050 $23,580 $22,514 $21,464 $19,866
Total noninterest expenses $19,685 $18,461 $16,160 $14,896 $14,657
Less: merger and acquisition expenses 938
Adjusted noninterest expenses $19,685 $18,461 $16,160 $14,896 $13,719
Efficiency ratio 78.58% 78.29% 71.78% 69.40% 69.06%
Net noninterest expense to average assets ratio:
Total noninterest expenses $19,685 $18,461 $16,160 $14,896 $14,657
Less: merger and acquisition expenses 938
Less: noninterest income, excluding gain on branch sale and bargain purchase gain 3,721 3,185 2,633 2,609 2,508
Adjusted net noninterest expenses $15,964 $15,276 $13,527 $12,287 $11,211
Average total assets 1,427,475 1,354,207 1,359,503 1,271,024 1,164,758
Net noninterest expense to average assets ratio 4.44% 4.48% 3.99% 3.92% 3.82%
Reported yield on loans 8.98% 8.66% 8.83% 9.17% 9.38%
Effect of accretion income on acquired loans (0.69%) (0.63%) (1.08%) (1.44%) (1.69%)
Adjusted yield on loans 8.29% 8.03% 7.75% 7.73% 7.69%
Reported net interest margin 6.58% 6.69% 6.58% 6.85% 6.68%
Effect of accretion income on acquired loans (0.53%) (0.50%) (0.84%) (1.12%) (1.25%)
Adjusted net interest margin 6.05% 6.19% 5.74% 5.73% 5.43%
Total stockholders' equity $237,509 $149,931 $140,027 $137,184 $133,600
Less: Preferred stock liquidation preference 9,746 9,746 9,746 9,746 9,746
Total common stockholders' equity 227,763 140,185 130,281 127,438 123,854
Less: Goodwill and other intangibles 29,057 29,783 31,043 27,792 28,518
Tangible common stockholders' equity $198,706 $110,402 $99,238 $99,646 $95,336
Common shares outstanding 17,963,783 9,886,778 9,845,819 9,846,096 9,832,585
Tangible book value per share $11.06 $11.17 $10.08 $10.12 $9.70
Total assets at end of period $1,447,898 $1,347,798 $1,407,072 $1,297,110 $1,288,239
Less: Goodwill and other intangibles 29,057 29,783 31,043 27,792 28,518
Adjusted total assets at period end $1,418,841 $1,318,015 $1,376,029 $1,269,318 $1,259,721
Tangible common stockholders' equity ratio 14.00% 8.38% 7.21% 7.85% 7.57%

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

  • "Common stockholders' equity" is defined as total stockholders' equity at end of period less the liquidation preference value of the preferred stock.
  • "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 non-routine gains and expenses related to merger and acquisition-related activities, 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.
  • "Net interest margin" is defined as net interest income divided by average interest-earning assets.
  • "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.
  • "Efficiency ratio" is defined as noninterest expenses divided by our operating revenue, which is equal to net interest income plus noninterest income. Also excluded are non-routine gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue 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.
  • "Net noninterest expense to average total assets" is defined as noninterest expenses net of noninterest income divided by total average assets. Excluded are non-routine 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 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 roll off of 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 mature or roll off of our balance sheet.

2) Amounts have been annualized.

3) Asset quality ratios exclude loans held for sale.

CONTACT: Investor Relations: Luke Wyse Vice President, Finance & Investor Relations lwyse@triumphllc.com 214-365-6936 Media Contact: Amanda Tavackoli Vice President, Marketing & Communication atavackoli@triumphllc.com 214-365-6930

Source:Triumph Bancorp, Inc.