July 19, 2017 - EX-99.1 - 8-K: Current report | Triumph Financial, Inc. (TFIN)

Exhibit 99.1

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

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

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

2017 Second Quarter Highlights

•

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

•

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

•

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

•

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

•

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

Balance Sheet

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

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

Net Interest Income

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

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

Asset Quality

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

Non-interest Income and Expense

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

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

Conference Call Information

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

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

About Triumph

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

Forward-Looking Statements

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

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 17, 2017 and in Triumph’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, filed with the Securities and Exchange Commission on April 26, 2017.

Non-GAAP Financial Measures

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

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

	As of and for the Three Months Ended															As of and for the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands)	2017			2017			2016			2016			2016			2017			2016
Financial Highlights:
Total assets	$	2,836,684		$	2,635,358		$	2,641,067		$	2,575,490		$	1,783,395		$	2,836,684		$	1,783,395
Loans held for investment	$	2,295,100		$	2,035,236		$	2,027,624		$	1,959,855		$	1,410,518		$	2,295,100		$	1,410,518
Deposits	$	2,072,181		$	2,024,288		$	2,015,785		$	1,950,677		$	1,275,154		$	2,072,181		$	1,275,154
Net income available to common stockholders	$	9,467		$	10,281		$	6,064		$	4,506		$	4,431		$	19,748		$	9,243

Performance Ratios - Annualized:
Return on average assets		1.42	%		1.62	%		0.96	%		0.84	%		1.07	%		1.52	%		1.13	%
Return on average total equity		12.60	%		14.44	%		8.58	%		6.63	%		6.69	%		13.49	%		7.04	%
Return on average common equity		12.75	%		14.66	%		8.60	%		6.51	%		6.64	%		13.67	%		7.00	%
Return on average tangible common equity ⁽¹⁾		14.94	%		17.49	%		10.32	%		7.60	%		7.37	%		16.17	%		7.80	%
Yield on loans		7.79	%		7.15	%		7.36	%		7.42	%		8.50	%		7.49	%		8.18	%
Adjusted yield on loans⁽¹⁾		7.25	%		6.93	%		6.82	%		7.10	%		7.81	%		7.10	%		7.65	%
Cost of interest bearing deposits		0.74	%		0.71	%		0.66	%		0.68	%		0.72	%		0.73	%		0.73	%
Cost of total deposits		0.60	%		0.58	%		0.54	%		0.57	%		0.63	%		0.59	%		0.64	%
Cost of total funds		0.83	%		0.79	%		0.73	%		0.61	%		0.68	%		0.81	%		0.68	%
Net interest margin		6.16	%		5.37	%		5.60	%		5.79	%		6.53	%		5.78	%		6.22	%
Adjusted net interest margin⁽¹⁾		5.70	%		5.19	%		5.15	%		5.53	%		5.98	%		5.45	%		5.79	%
Net non-interest expense to average assets		3.26	%		1.17	%		3.16	%		3.43	%		3.85	%		2.24	%		3.73	%
Adjusted net non-interest expense to average assets ⁽¹⁾		3.26	%		3.60	%		3.16	%		3.15	%		3.85	%		3.43	%		3.73	%
Efficiency ratio		62.44	%		58.94	%		67.70	%		70.63	%		68.74	%		60.43	%		70.84	%
Adjusted efficiency ratio⁽¹⁾		62.44	%		77.65	%		67.70	%		66.20	%		68.74	%		69.53	%		70.84	%

Asset Quality:⁽²⁾
Past due to total loans		2.51	%		3.16	%		3.61	%		3.86	%		2.80	%		2.51	%		2.80	%
Non-performing loans to total loans		1.36	%		1.80	%		2.23	%		2.25	%		1.56	%		1.36	%		1.56	%
Non-performing assets to total assets		1.50	%		1.92	%		1.98	%		2.05	%		1.60	%		1.50	%		1.60	%
ALLL to non-performing loans		63.56	%		52.18	%		34.00	%		33.78	%		62.60	%		63.56	%		62.60	%
ALLL to total loans		0.86	%		0.94	%		0.76	%		0.76	%		0.98	%		0.86	%		0.98	%
Net charge-offs to average loans		0.03	%		0.20	%		0.10	%		0.10	%		0.02	%		0.23	%		0.02	%

Capital:
Tier 1 capital to average assets⁽³⁾		11.28	%		11.32	%		10.85	%		12.04	%		16.02	%		11.28	%		16.02	%
Tier 1 capital to risk-weighted assets⁽³⁾		11.30	%		12.05	%		11.85	%		11.94	%		17.14	%		11.30	%		17.14	%
Common equity tier 1 capital to risk-weighted assets⁽³⁾		9.73	%		10.32	%		10.18	%		10.24	%		15.19	%		9.73	%		15.19	%
Total capital to risk-weighted assets⁽³⁾		13.87	%		14.87	%		14.60	%		14.77	%		18.01	%		13.87	%		18.01	%
Total equity to total assets		10.94	%		11.40	%		10.96	%		11.05	%		15.69	%		10.94	%		15.69	%
Tangible common stockholders' equity to tangible assets		9.22	%		9.51	%		8.98	%		8.99	%		13.88	%		9.22	%		13.88	%

Per Share Amounts:
Book value per share	$	16.59		$	16.08		$	15.47		$	15.18		$	14.91		$	16.59		$	14.91
Tangible book value per share⁽¹⁾	$	14.20		$	13.63		$	12.89		$	12.55		$	13.47		$	14.20		$	13.47
Basic earnings per common share	$	0.53		$	0.57		$	0.34		$	0.25		$	0.25		$	1.10		$	0.52
Diluted earnings per common share	$	0.51		$	0.55		$	0.33		$	0.25		$	0.25		$	1.07		$	0.51
Adjusted diluted earnings per common share⁽¹⁾	$	0.51		$	0.02		$	0.33		$	0.32		$	0.25		$	0.54		$	0.51
Shares outstanding end of period		18,132,585			18,078,769			18,078,247			18,106,978			18,107,493			18,132,585			18,107,493

Unaudited consolidated balance sheet as of:

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

Unaudited consolidated statement of income:

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

Earnings per share:

	For the Three Months Ended										For the Six Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
(Dollars in thousands)	2017		2017		2016		2016		2016		2017		2016
Basic
Net income to common stockholders	$	9,467	$	10,281	$	6,064	$	4,506	$	4,431	$	19,748	$	9,243
Weighted average common shares outstanding		18,012,905		17,955,144		17,890,781		17,859,604		17,859,604		17,984,184		17,838,267
Basic earnings per common share	$	0.53	$	0.57	$	0.34	$	0.25	$	0.25	$	1.10	$	0.52

Diluted
Net income to common stockholders	$	9,467	$	10,281	$	6,064	$	4,506	$	4,431	$	19,748	$	9,243
Dilutive effect of preferred stock		193		192		197		—		—		385		—
Net income to common stockholders - diluted	$	9,660	$	10,473	$	6,261	$	4,506	$	4,431	$	20,133	$	9,243
Weighted average common shares outstanding		18,012,905		17,955,144		17,890,781		17,859,604		17,859,604		17,984,184		17,838,267
Dilutive effects of:
Restricted stock		47,521		87,094		66,613		148,977		112,880		67,308		113,334
Assumed exercises of stock warrants		129,896		145,896		118,285		93,095		70,101		137,896		60,330
Assumed exercises of stock options		32,592		47,873		12,511		—		—		40,233		—
Assumed conversion of Preferred A		315,773		315,773		315,773		—		—		315,773		—
Assumed conversion of Preferred B		354,471		360,578		360,578		—		—		354,471		—
Weighted average shares outstanding - diluted		18,893,158		18,912,358		18,764,541		18,101,676		18,042,585		18,899,865		18,011,931
Diluted earnings per common share	$	0.51	$	0.55	$	0.33	$	0.25	$	0.25	$	1.07	$	0.51


Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:

	For the Three Months Ended										For the Six Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
	2017		2017		2016		2016		2016		2017		2016
Assumed conversion of Preferred A		—		—		—		315,773		315,773		—		315,773
Assumed conversion of Preferred B		—		—		—		360,578		360,578		—		360,578
Restricted stock awards		35,270		—		—		—		76,362		35,270		76,362
Stock options		58,442		—		—		164,175		164,175		58,442		164,175

Loans held for investment summarized as of:

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

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

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

Commercial finance % of total loans		35	%		35	%		34	%		33	%		43	%
Yield on commercial finance loans		11.42	%		10.25	%		10.54	%		10.57	%		11.40	%

Deposits summarized as of:

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

Net interest margin summarized for the three months ended:

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

Metrics and non-GAAP financial reconciliation:

	As of and for the Three Months Ended															As of and for the Six Months Ended
(Dollars in thousands,	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
except per share amounts)	2017			2017			2016			2016			2016			2017			2016
Net income available to common stockholders	$	9,467		$	10,281		$	6,064		$	4,506		$	4,431		$	19,748		$	9,243
Gain on sale of subsidiary		—			(20,860	)		—			—			—			(20,860	)		—
Incremental bonus related to transaction		—			4,814			—			—			—			4,814			—
Transaction related costs		—			325			—			1,618			—			325			—
Tax effect of adjustments		—			5,754			—			(251	)		—			5,754			—
Adjusted net income available to common stockholders	$	9,467		$	314		$	6,064		$	5,873		$	4,431		$	9,781		$	9,243
Dilutive effect of convertible preferred stock		193			—			197			197			—			—			—
Adjusted net income available to common stockholders - diluted	$	9,660		$	314		$	6,261		$	6,070		$	4,431		$	9,781		$	9,243

Weighted average shares outstanding - diluted		18,893,158			18,912,358			18,764,541			18,101,676			18,042,585			18,899,865			18,011,931
Adjusted effects of assumed Preferred Stock conversion		—			(676,351	)		—			676,351			—			(670,244	)		—
Adjusted weighted average shares outstanding - diluted		18,893,158			18,236,007			18,764,541			18,778,027			18,042,585			18,229,621			18,011,931
Adjusted diluted earnings per common share	$	0.51		$	0.02		$	0.33		$	0.32		$	0.25		$	0.54		$	0.51

Net income available to common stockholders	$	9,467		$	10,281		$	6,064		$	4,506		$	4,431		$	19,748		$	9,243
Average tangible common equity		254,088			238,405			233,733			235,938			241,666			246,290			238,420
Return on average tangible common equity		14.94	%		17.49	%		10.32	%		7.60	%		7.37	%		16.17	%		7.80	%

Adjusted efficiency ratio:
Net interest income	$	38,557		$	31,819		$	33,544		$	30,418		$	25,907		$	70,376		$	48,396
Non-interest income		5,202			27,285			6,208			6,099			3,668			32,487			8,649
Operating revenue		43,759			59,104			39,752			36,517			29,575			102,863			57,045
Gain on sale of subsidiary		—			(20,860	)		—			—			—			(20,860	)		—
Adjusted operating revenue	$	43,759		$	38,244		$	39,752		$	36,517		$	29,575		$	82,003		$	57,045
Non-interest expenses	$	27,321		$	34,837		$	26,911		$	25,792		$	20,331		$	62,158		$	40,409
Incremental bonus related to transaction		—			(4,814	)		—			—			—			(4,814	)		—
Transaction related costs		—			(325	)		—			(1,618	)		—			(325	)		—
Adjusted non-interest expenses	$	27,321		$	29,698		$	26,911		$	24,174		$	20,331		$	57,019		$	40,409
Adjusted efficiency ratio		62.44	%		77.65	%		67.70	%		66.20	%		68.74	%		69.53	%		70.84	%

Adjusted net non-interest expense to average assets ratio:
Non-interest expenses	$	27,321		$	34,837		$	26,911		$	25,792		$	20,331		$	62,158		$	40,409
Incremental bonus related to transaction		—			(4,814	)		—			—			—			(4,814	)		—
Transaction related costs		—			(325	)		—			(1,618	)		—			(325	)		—
Adjusted non-interest expenses	$	27,321		$	29,698		$	26,911		$	24,174		$	20,331		$	57,019		$	40,409

Total non-interest income	$	5,202		$	27,285		$	6,208		$	6,099		$	3,668		$	32,487		$	8,649
Gain on sale of subsidiary		—			(20,860	)		—			—			—			(20,860	)		—
Adjusted non-interest income	$	5,202		$	6,425		$	6,208		$	6,099		$	3,668		$	11,627		$	8,649
Adjusted net non-interest expenses	$	22,119		$	23,273		$	20,703		$	18,075		$	16,663		$	45,392		$	31,760
Average total assets	$	2,723,303		$	2,619,282		$	2,603,226		$	2,282,279		$	1,742,942		$	2,671,580		$	1,712,783
Adjusted net non-interest expense to average assets ratio		3.26	%		3.60	%		3.16	%		3.15	%		3.85	%		3.43	%		3.73	%

	As of and for the Three Months Ended															As of and for the Six Months Ended
(Dollars in thousands,	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
except per share amounts)	2017			2017			2016			2016			2016			2017			2016
Reported yield on loans		7.79	%		7.15	%		7.36	%		7.42	%		8.50	%		7.49	%		8.18	%
Effect of accretion income on acquired loans		(0.54	%)		(0.22	%)		(0.54	%)		(0.32	%)		(0.69	%)		(0.39	%)		(0.53	%)
Adjusted yield on loans		7.25	%		6.93	%		6.82	%		7.10	%		7.81	%		7.10	%		7.65	%

Reported net interest margin		6.16	%		5.37	%		5.60	%		5.79	%		6.53	%		5.78	%		6.22	%
Effect of accretion income on acquired loans		(0.46	%)		(0.18	%)		(0.45	%)		(0.26	%)		(0.55	%)		(0.33	%)		(0.43	%)
Adjusted net interest margin		5.70	%		5.19	%		5.15	%		5.53	%		5.98	%		5.45	%		5.79	%

Total stockholders' equity	$	310,467		$	300,425		$	289,345		$	284,521		$	279,763		$	310,467		$	279,763
Preferred stock liquidation preference		(9,658	)		(9,746	)		(9,746	)		(9,746	)		(9,746	)		(9,658	)		(9,746	)
Total common stockholders' equity		300,809			290,679			279,599			274,775			270,017			300,809			270,017
Goodwill and other intangibles		(43,321	)		(44,233	)		(46,531	)		(47,449	)		(26,160	)		(43,321	)		(26,160	)
Tangible common stockholders' equity	$	257,488		$	246,446		$	233,068		$	227,326		$	243,857		$	257,488		$	243,857
Common shares outstanding		18,132,585			18,078,769			18,078,247			18,106,978			18,107,493			18,132,585			18,107,493
Tangible book value per share	$	14.20		$	13.63		$	12.89		$	12.55		$	13.47		$	14.20		$	13.47

Total assets at end of period	$	2,836,684		$	2,635,358		$	2,641,067		$	2,575,490		$	1,783,395		$	2,836,684		$	1,783,395
Goodwill and other intangibles		(43,321	)		(44,233	)		(46,531	)		(47,449	)		(26,160	)		(43,321	)		(26,160	)
Adjusted total assets at period end	$	2,793,363		$	2,591,125		$	2,594,536		$	2,528,041		$	1,757,235		$	2,793,363		$	1,757,235
Tangible common stockholders' equity ratio		9.22	%		9.51	%		8.98	%		8.99	%		13.88	%		9.22	%		13.88	%

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.

Asset quality ratios exclude loans held for sale.

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

Vice President, Marketing & Communication

atavackoli@tbkbank.com

214-365-6930

Form: 8-K

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