Triumph Bancorp, Inc. - FORM 8-K - EX-99.1

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8-K - FORM 8-K - Triumph Bancorp, Inc.	d917233d8k.htm
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Exhibit 99.1

Triumph Bancorp Reports First Quarter Net Income to Common Stockholders of $13.9 Million.

DALLAS – April 29, 2015 (GLOBE NEWSWIRE) – Triumph Bancorp, Inc. (NASDAQ: TBK) today announced earnings and operating results for the first quarter of 2015.

“Our first quarter 2015 results reflect our opportunistic approach to our business”, said Aaron P. Graft, Chief Executive Officer, Triumph Bancorp, Inc. “Our acquisition of Doral Money, Inc. added approximately $700 million to our asset management business and generated a profit for our investors, in addition to core earnings for the quarter.”

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.

First Quarter Highlights

•

For the first quarter of 2015, net income was $14.0 million and net income available to common stockholders was $13.9 million, compared to net income of $2.8 million and net income available to common stockholders of $2.0 million for the quarter ended December 31, 2014.

•

Triumph Capital Advisors (“TCA”) completed the acquisition of Doral Money, Inc. (“DMI”). This transaction added two active collateralized loan obligation (“CLO”) management contracts to TCA’s portfolio, which increased assets under management by approximately $700 million. Triumph recorded a preliminary bargain purchase gain associated with this transaction of $12.5 million.

•

Fully diluted earnings per share were $0.76 for the quarter ended March 31, 2015, compared to $0.14 for the quarter ended December 31, 2014. Excluding the impact of the net contribution of the DMI acquisition, fully diluted earnings per share were $0.14 for the quarter ended March 31, 2015.

•

For the quarter ended March 31, 2015, excluding the DMI transaction our annualized return on average common equity and return on average assets were 4.29% and 0.69%, compared to 4.30% and 0.78%, respectively, for the quarter ended December 31, 2014.

Doral Money, Inc. Transaction Summary

Set forth below is a summary of the estimated acquisition date fair value of the assets acquired as part of the DMI acquisition, the consideration transferred, and the resulting bargain purchase gain recorded from the acquisition. As previously disclosed, TCA financed a portion of the consideration paid in the acquisition with the proceeds of a credit facility in an amount equal to the value of the acquired CLO securities, which was repaid immediately following the closing through transfer of the acquired CLO securities to the lender.


	Acquisition Summary
(Dollars in thousands)
Cash	$	8,273
CLO securities		98,316
SNC loans		36,765
Prepaid income tax		3,014
Other assets/liabilities		87

Fair value of DMI net assets	$	146,455
Fair value of CLO contracts		1,918

Net fair value of acquired assets	$	148,373
Consideration transferred		(135,864	)

Bargain purchase gain, nontaxable	$	12,509

Transaction costs, net of tax		(158	)
Incremental bonus, net of tax		(1,138	)
Escrow recovery from Doral Healthcare, net of tax		195

Net contribution of acquisition	$	11,408

In addition to the delivery of the CLO securities to the lender as described above, the shared national credit (“SNC”) loan portfolio was sold to third parties shortly following the closing at its acquisition date fair value. There were no material gains or losses associated with this liquidation. Following the delivery of the CLO securities to the lender and the sale of the SNC loan portfolio, the remaining primary assets resulting from the acquisition consist of the cash, prepaid tax asset and CLO contracts set forth above. In conjunction with the transaction, the Company incurred direct transaction expenses of $243 thousand.

Also as a result of the transaction, the Company recognized $300 thousand in other income due to the release of cash previously held in escrow but controlled by DMI as part of the Company’s June 2014 purchase agreement to acquire Doral Healthcare Finance, and accrued $1.8 million in incremental bonus expense for the anticipated amount expected to be paid to team members to recognize their contribution to this transaction.

Balance Sheet

Total loans held for investment were $1.011 billion at March 31, 2015, an increase of $5.6 million or 0.6% during the first quarter. This increase was primarily due to continued growth in our commercial finance loan portfolio, which consists of factored receivables, asset based and equipment loans originated under our Triumph Commercial Finance brand, and healthcare asset based loans originated under our Triumph Healthcare Finance brand. Our commercial finance loan portfolio totaled $385.8 million as of March 31, 2015, an increase of $10.4 million or 2.8% in the first quarter of 2015.

Total deposits were $1.174 billion at March 31, 2015, an increase of $8.5 million or 0.7% for the first quarter of 2015. Noninterest-bearing deposits accounted for 14.3% of total deposits and non-time deposits accounted for 50.6% of total deposits. The average cost of our interest-bearing deposits was 0.64% for the quarter ended March 31, 2015 compared to 0.61% for the quarter ended December 31, 2014, on an annualized basis.

Net Interest Income

We earned net interest income for the quarter ended March 31, 2015, of $19.7 million compared to $21.3 million for the quarter ended December 31, 2014. Yields on loans for the quarter ended March 31, 2015 were down 0.48% to 8.50% (8.04% adjusted for loan discount accretion) compared to 8.98% (8.29% adjusted for loan discount accretion) for the quarter ended December 31, 2014. Net interest margin (“NIM”) decreased 0.47% to 6.11% for the quarter ended March 31, 2015 from 6.58% for the quarter ended December 31, 2014. Net interest margin adjusted for loan discount accretion was 5.76% for the quarter ended March 31, 2015 compared to 6.05% for the quarter ended December 31, 2014. The decrease in adjusted loan yield and adjusted NIM is largely attributable to the change in the mix of our loan portfolio between higher yielding factored receivables and mortgage warehouse loans during the quarter.

Asset Quality

Our provision for loan losses was $0.6 million for the quarter ended March 31, 2015 compared to $1.8 million for the quarter ended December 31, 2014. We experienced net charge-offs of $0.2 million for the quarter ended March 31, 2015 compared to net charge-offs of $0.3 million for the quarter ended December 31, 2014. From December 31, 2014 to March 31, 2015, our allowance for loan and lease losses (“ALLL”) increased from $8.8 million or 0.88% of total loans to $9.3 million or 0.92% of total loans. Nonperforming Assets (“NPAs”) improved 11 bps from December 31, 2014 to March 31, 2015 to 1.62% of total assets.

Noninterest Income and Expense

We earned noninterest income for the quarter ended March 31, 2015 of $16.7 million (or $3.9 million excluding the DMI transaction) compared to $3.7 million for the quarter ended December 31, 2014.

For the quarter ended March 31, 2015, noninterest expense totaled $20.8 million (or $18.8 million excluding the DMI transaction), compared to $19.7 million for the quarter ended December 31, 2014, an increase 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 8:00 a.m. Central Time on Thursday, April 30^th, 2015. Dan Karas, Chief Lending Officer of Triumph Savings Bank and Gibran Mahmud, Senior Managing Director at Triumph Capital Advisors will also be available for questions.

To participate in the live conference call, please dial 1 (855) 779-1042 (U.S. and Canada) and enter Conference ID # 21869542. 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/c9f3zyrb/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 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 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 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 March 6, 2015.

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
	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
Key Metrics	2015			2014			2014			2014			2014
Financial Highlights (in thousands)
Total assets	$	1,472,743		$	1,447,898		$	1,347,798		$	1,407,072		$	1,297,110
Total loans held for investment		1,011,446			1,005,878			977,139			939,517			800,667
Total deposits		1,173,679			1,165,229			1,105,624			1,108,254			1,050,312
Net income available to common stockholders	$	13,852		$	2,021		$	9,495		$	2,285		$	3,148

Performance ratios - annualized
Return on average assets		3.93	%		0.78	%		3.01	%		0.88	%		1.19	%
Return on average common equity⁽¹⁾		23.95	%		4.30	%		26.84	%		7.05	%		10.10	%
Return on average tangible common equity (ROATCE)⁽¹⁾		27.38	%		5.11	%		34.26	%		8.98	%		13.00	%
Return on average total equity		23.31	%		5.02	%		23.16	%		7.18	%		9.26	%
Yield on loans		8.50	%		8.98	%		8.66	%		8.83	%		9.17	%
Adjusted yield on loans⁽¹⁾		8.04	%		8.29	%		8.03	%		7.75	%		7.73	%
Cost of interest bearing deposits		0.64	%		0.61	%		0.56	%		0.50	%		0.50	%
Cost of total deposits		0.55	%		0.52	%		0.48	%		0.42	%		0.43	%
Cost of total funds		0.63	%		0.65	%		0.59	%		0.53	%		0.56	%
Net interest margin⁽¹⁾		6.11	%		6.58	%		6.69	%		6.58	%		6.85	%
Adjusted net interest margin⁽¹⁾		5.76	%		6.05	%		6.19	%		5.74	%		5.73	%
Net noninterest expense to average assets ⁽¹⁾		4.18	%		4.44	%		4.48	%		3.99	%		3.92	%
Efficiency ratio⁽¹⁾		79.70	%		78.58	%		78.29	%		71.78	%		69.40	%

Asset Quality⁽²⁾
Past due to total loans		2.91	%		2.57	%		2.61	%		2.82	%		2.99	%
Nonperforming loans to total loans		1.66	%		1.66	%		1.80	%		1.54	%		1.32	%
Nonperforming assets to total assets		1.62	%		1.73	%		2.05	%		1.82	%		1.86	%
ALLL to nonperforming loans		55.28	%		53.02	%		41.68	%		43.16	%		43.92	%
ALLL to total loans		0.92	%		0.88	%		0.75	%		0.67	%		0.58	%
Net charge-offs to average loans		0.02	%		0.03	%		0.03	%		0.01	%		(0.01	%)

Capital⁽³⁾
Tier 1 capital to average assets		17.32	%		15.92	%		12.20	%		11.00	%		11.89	%
Tier 1 capital to risk-weighted assets		20.68	%		19.56	%		14.59	%		12.66	%		14.32	%
Common equity tier 1 capital to risk-weighted assets		18.32	%		N/A			N/A			N/A			N/A
Total capital to risk-weighted assets		21.47	%		20.35	%		15.27	%		13.22	%		14.78	%
Total equity to total assets		17.16	%		16.40	%		13.05	%		11.79	%		12.66	%
Total stockholders’ equity to total assets		17.16	%		16.40	%		11.12	%		9.95	%		10.58	%
Tangible common stockholders’ equity to tangible assets		14.75	%		14.00	%		8.38	%		7.21	%		7.85	%

Per Share Amounts
Book value per share	$	13.52		$	12.68		$	14.18		$	13.23		$	12.94
Tangible book value per share⁽¹⁾	$	11.84		$	11.06		$	11.17		$	10.08		$	10.12
Basic earnings per common share	$	0.78		$	0.14		$	0.96		$	0.23		$	0.32
Diluted earnings per common share	$	0.76		$	0.14		$	0.91		$	0.23		$	0.32
Shares outstanding end of period		17,963,783			17,963,783			9,886,778			9,845,819			9,846,096

Unaudited consolidated balance sheet as of:


	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
(Dollars in thousands)	2015			2014			2014			2014			2014
ASSETS
Total cash and cash equivalents	$	178,442		$	160,888		$	75,625		$	85,716		$	106,951
Securities - available for sale		161,360			162,024			165,489			168,694			165,276
Securities - held to maturity		746			745			745			744			744
Loans held for sale		3,401			3,288			7,295			4,088			4,902
Loans held for investment		1,011,446			1,005,878			977,139			939,517			800,667
Allowance for loan and lease losses		(9,286	)		(8,843	)		(7,320	)		(6,253	)		(4,631	)

Loans, net		1,002,160			997,035			969,819			933,264			796,036
Branch assets held for sale		—			—			—			80,331			88,692
FHLB and FRB stock		4,466			4,903			5,826			7,976			5,233
Premises and equipment, net		21,716			21,933			21,744			20,708			20,502
Other real estate owned (OREO)		6,991			8,423			10,019			11,103			13,575
Goodwill and intangible assets, net		30,211			29,057			29,783			31,043			27,792
Bank-owned life insurance		29,193			29,083			28,955			28,829			28,695
Other assets		34,057			30,519			32,498			34,576			38,712

Total assets	$	1,472,743		$	1,447,898		$	1,347,798		$	1,407,072		$	1,297,110

LIABILITIES
Noninterest bearing deposits	$	167,538		$	179,848		$	154,750		$	176,245		$	155,879
Interest bearing deposits		1,006,141			985,381			950,874			932,009			894,433

Total deposits		1,173,679			1,165,229			1,105,624			1,108,254			1,050,312
Customer repurchase agreements		8,666			9,282			15,644			15,313			17,670
Federal Home Loan Bank advances		—			3,000			—			70,000			20,750
Senior secured note		—			—			11,630			11,944			12,259
Junior subordinated debentures		24,487			24,423			24,359			24,296			24,233
Other liabilities		13,234			8,455			14,713			11,341			7,705

Total liabilities		1,220,066			1,210,389			1,171,970			1,241,148			1,132,929

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			180			99			98			98
Additional paid-in-capital		191,745			191,049			105,304			104,827			104,744
Treasury stock		(161	)		(161	)		(68	)		(4	)		—
Retained earnings		49,596			35,744			34,014			24,519			22,111
Accumulated other comprehensive income		1,571			951			836			841			485

Total stockholders’ equity		252,677			237,509			149,931			140,027			137,184
Noncontrolling interests		—			—			25,897			25,897			26,997

Total equity		252,677			237,509			175,828			165,924			164,181

Total liabilities and equity	$	1,472,743		$	1,447,898		$	1,347,798		$	1,407,072		$	1,297,110

Unaudited consolidated statement of income for the three months ended:


	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
(Dollars in thousands)	2015			2014			2014			2014			2014
Interest income:
Loans, including fees	$	13,239		$	14,138		$	13,706		$	13,860		$	14,376
Factored receivables, including fees		7,509			8,367			7,681			6,838			5,272
Taxable securities		678			644			666			663			657
Tax exempt securities		12			14			15			15			16
Cash deposits		141			117			50			77			58

Total interest income		21,579			23,280			22,118			21,453			20,379

Interest expense:
Deposits		1,570			1,498			1,289			1,141			1,108
Federal Home Loan Bank advances		1			2			19			20			4
Senior secured note		—			173			134			137			140
Junior subordinated debentures		272			276			276			272			271
Other		11			2			5			2			1

Total interest expense		1,854			1,951			1,723			1,572			1,524
Net interest income		19,725			21,329			20,395			19,881			18,855
Provision for loan losses		645			1,811			1,375			1,747			925

Net interest income after provision for loan losses		19,080			19,518			19,020			18,134			17,930
Noninterest income:
Service charges on deposits		612			647			811			813			738
Card income		523			516			544			548			490
Net realized gains/(losses) & valuation adjustments on OREO		26			(242	)		(11	)		(252	)		(77	)
Net gains on sale of securities		—			62			10			—			16
Net gains on sale of loans		542			437			484			319			255
Fee income		422			553			448			421			398
Gain on branch sale		—			—			12,619			—			—
Bargain purchase gain		12,509			—			—			—			—
Asset management fees		958			486			374			129			—
Other		1,067			1,262			525			655			789

Total noninterest income		16,659			3,721			15,804			2,633			2,609

Noninterest expense:
Salaries and employee benefits		13,269			12,752			11,032			9,471			8,876
Occupancy, furniture and equipment		1,572			1,429			1,319			1,336			1,390
FDIC insurance assessment		263			221			280			280			261
Carrying costs for OREO		79			68			73			100			132
Professional fees		1,327			1,146			1,043			793			592
Amortization of intangible assets		764			727			746			724			726
Advertising and promotion		543			366			1,102			683			443
Communications and technology		886			961			954			945			888
Other		2,080			2,015			1,912			1,828			1,588

Total noninterest expense		20,783			19,685			18,461			16,160			14,896

Net income before income tax		14,956			3,554			16,363			4,607			5,643
Income tax expense		912			747			6,089			1,626			1,916

Net income	$	14,044		$	2,807		$	10,274		$	2,981		$	3,727

Effect of noncontrolling interests and preferred shares		(192	)		(786	)		(779	)		(696	)		(579	)

Net income to common stockholders	$	13,852		$	2,021		$	9,495		$	2,285		$	3,148

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


	Mar 31,		Dec 31,		Sep 30,		Jun 30,		Mar 31,
(Dollars in thousands)	2015		2014		2014		2014		2014
Commercial real estate	$	236,659	$	249,164	$	261,836	$	265,129	$	268,863
Construction, land development, land		52,203		42,914		45,996		43,040		39,230
1-4 family residential properties		73,605		78,738		80,419		81,187		79,542
Farmland		24,805		22,496		20,059		19,644		20,114
Commercial		371,614		364,567		340,316		328,361		234,986
Factored receivables		171,452		180,910		169,112		156,272		129,531
Consumer		11,201		11,941		12,527		13,525		13,515
Mortgage warehouse		69,907		55,148		46,874		32,359		14,886

Total loans	$	1,011,446	$	1,005,878	$	977,139	$	939,517	$	800,667

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


	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
(Dollars in thousands)	2015			2014			2014			2014			2014
Equipment*	$	118,273		$	106,354		$	94,460		$	71,198		$	58,737
Asset based lending (General)*		36,511			46,388			50,046			48,699			39,643
Asset based lending (Healthcare)*		59,572			41,770			40,885			45,751			—
Factored receivables		171,452			180,910			169,112			156,272			129,531

Commercial finance	$	385,808		$	375,422		$	354,503		$	321,920		$	227,911


Total loans held for investment	$	1,011,446		$	1,005,878		$	977,139		$	939,517		$	800,667
Commercial finance as a % of total		38	%		37	%		36	%		34	%		28	%
Community banking as a % of total		62	%		63	%		64	%		66	%		72	%

*	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:


	Mar 31,		Dec 31,		Sep 30,		Jun 30,		Mar 31,
(Dollars in thousands)	2015		2014		2014		2014		2014
Noninterest bearing demand	$	167,538	$	179,848	$	154,750	$	176,245	$	155,879
Interest-bearing demand		231,718		236,525		209,491		248,992		209,170
Individual retirement accounts		55,773		55,034		54,378		53,856		54,709
Money market		120,001		117,514		125,371		138,204		142,522
Savings		74,236		70,407		72,012		73,207		73,011
Certificates of deposit		474,413		455,901		439,603		367,731		356,844
Brokered deposits		50,000		50,000		50,019		50,019		58,177

Total deposits	$	1,173,679	$	1,165,229	$	1,105,624	$	1,108,254	$	1,050,312

Net interest margin summarized for the most recent two quarters:


	For the three months ended
	March 31, 2015							December 31, 2014
(Dollars in thousands)	Average Balance		Interest		Average Rate			Average Balance		Interest		Average Rate
Interest earning assets:
Interest earning cash balances	$	154,615	$	141		0.37	%	$	121,935	$	117		0.38	%
Taxable securities		154,810		627		1.64	%		157,294		590		1.49	%
Tax-exempt securities		5,910		12		0.82	%		6,401		14		0.87	%
FHLB & Fed Reserve stock		4,538		51		4.56	%		5,203		54		4.12	%
Total loans		990,450		20,748		8.50	%		994,633		22,505		8.98	%

Total interest earning assets	$	1,310,323	$	21,579		6.68	%	$	1,285,466	$	23,280		7.19	%

Noninterest earning assets:
Other assets		139,468							142,009

Total assets	$	1,449,791						$	1,427,475

Interest bearing liabilities:
Deposits:
Interest bearing deposits	$	230,455	$	33		0.06	%	$	232,784	$	35		0.06	%
Individual retirement accounts		55,369		156		1.14	%		53,381		154		1.14	%
Money market		119,199		67		0.23	%		121,242		71		0.23	%
Savings deposits		72,034		9		0.05	%		72,956		9		0.05	%
Certificates of deposit		468,573		1,181		1.02	%		449,166		1,103		0.97	%
Brokered deposits		50,003		124		1.01	%		50,190		126		1.00	%

Total deposits		995,633		1,570		0.64	%		979,719		1,498		0.61	%
Short-term borrowings		15,229		12		0.32	%		18,696		4		0.08	%
Senior secured note		—		—		0.00	%		5,337		173		12.86	%
Junior subordinated debentures		24,449		272		4.51	%		24,388		276		4.49	%

Total interest bearing liabilities	$	1,035,311	$	1,854		0.73	%	$	1,028,140	$	1,951		0.75	%

Noninterest bearing liabilities and equity:
Noninterest bearing demand deposits		160,875							164,369
Other liabilities		9,304							13,268
Total equity		244,301							221,698

Total liabilities and equity	$	1,449,791						$	1,427,475

Net interest income			$	19,725						$	21,329

Interest spread						5.95	%						6.44	%

Net interest margin on a fully tax-equivalent basis						6.11	%						6.58	%


Cost of total deposits						0.55	%						0.52	%
Cost of total funds						0.63	%						0.65	%

Metrics and non-GAAP financial reconciliation


	As of and For the Three Months Ended
(Dollars in thousands, except per share amounts)	Mar 31, 2015			Dec 31, 2014			Sep 30, 2014			Jun 30, 2014			Mar 31, 2014
Net income available to common stockholders	$	13,852		$	2,021		$	9,495		$	2,285		$	3,148
Dilutive effect of preferred stock		—			—			—			—			192
Less: gain on branch sale, net of tax		—			—			7,892			—			—
Less: bargain purchase gain, nontaxable		12,509			—			—			—			—
Add: merger and acquisition expenses, net of tax		158			—			—			—			—
Add: incremental bonus accrual, net of tax		1,138			—			—			—			—
Less: escrow recovery from Doral Healthcare Finance, net of tax		195			—			—			—			—

Adjusted net income available to common stockholders	$	2,444		$	2,021		$	1,603		$	2,285		$	3,340

Weighted average shares outstanding - diluted		18,428,663			14,261,717			10,602,155			9,910,507			10,544,902
Less: adjusted effects of assumed Preferred Stock conversion		676,351			—			676,351			—			—

Adjusted weighted average shares outstanding - diluted		17,752,312			14,261,717			9,925,804			9,910,507			10,544,902

Adjusted diluted earnings per common share	$	0.14		$	0.14		$	0.16		$	0.23		$	0.32

Average common equity	$	234,555			N/A			N/A			N/A			N/A
Less: average contribution impact of Doral Money, Inc transaction		3,549			N/A			N/A			N/A			N/A

Adjusted average common equity		231,006			N/A			N/A			N/A			N/A

Adjusted return on average common equity		4.29	%		N/A			N/A			N/A			N/A

Average total assets	$	1,449,791			N/A			N/A			N/A			N/A
Less: average contribution impact of Doral Money, Inc transaction		3,549			N/A			N/A			N/A			N/A

Adjusted average total assets		1,446,242			N/A			N/A			N/A			N/A

Adjusted return on average total assets		0.69	%		N/A			N/A			N/A			N/A

Net income available to common stockholders	$	13,852		$	2,021		$	9,495		$	2,285		$	3,148
Average tangible common equity		205,204			156,888			109,944			102,107			98,198

Return on average tangible common equity (ROATCE)		27.38	%		5.11	%		34.26	%		8.98	%		13.00	%

Efficiency ratio:
Net interest income	$	19,725		$	21,329		$	20,395		$	19,881		$	18,855
Noninterest income		16,659			3,721			15,804			2,633			2,609

Operating revenue		36,384			25,050			36,199			22,514			21,464
Less: gain on branch sale		—			—			12,619			—			—
Less: bargain purchase gain		12,509			—			—			—			—
Less: escrow recovery from Doral Healthcare Finance		300			—			—			—			—

Adjusted operating revenue	$	23,575		$	25,050		$	23,580		$	22,514		$	21,464

Total noninterest expenses	$	20,783		$	19,685		$	18,461		$	16,160		$	14,896
Less: merger and acquisition expenses		243			—			—			—			—
Less: incremental bonus accrual		1,750			—			—			—			—

Adjusted noninterest expenses	$	18,790		$	19,685		$	18,461		$	16,160		$	14,896

Efficiency ratio		79.70	%		78.58	%		78.29	%		71.78	%		69.40	%

Net noninterest expense to average assets ratio:
Total noninterest expenses	$	20,783		$	19,685		$	18,461		$	16,160		$	14,896
Less: merger and acquisition expenses		243			—			—			—			—
Less: incremental bonus accrual		1,750			—			—			—			—
Less: noninterest income, excluding gain on branch sale and bargain purchase gain		4,150			3,721			3,185			2,633			2,609
Add: escrow recovery from Doral Healthcare Finance		300			—			—			—			—

Adjusted net noninterest expenses	$	14,940		$	15,964		$	15,276		$	13,527		$	12,287
Average total assets		1,449,791			1,427,475			1,354,207			1,359,503			1,271,024

Net noninterest expense to average assets ratio		4.18	%		4.44	%		4.48	%		3.99	%		3.92	%

Reported yield on loans		8.50	%		8.98	%		8.66	%		8.83	%		9.17	%
Effect of accretion income on acquired loans		(0.46	%)		(0.69	%)		(0.63	%)		(1.08	%)		(1.44	%)

Adjusted yield on loans		8.04	%		8.29	%		8.03	%		7.75	%		7.73	%

Reported net interest margin		6.11	%		6.58	%		6.69	%		6.58	%		6.85	%
Effect of accretion income on acquired loans		(0.35	%)		(0.53	%)		(0.50	%)		(0.84	%)		(1.12	%)

Adjusted net interest margin		5.76	%		6.05	%		6.19	%		5.74	%		5.73	%

Total stockholders’ equity	$	252,677		$	237,509		$	149,931		$	140,027		$	137,184
Less: Preferred stock liquidation preference		9,746			9,746			9,746			9,746			9,746

Total common stockholders’ equity		242,931			227,763			140,185			130,281			127,438
Less: Goodwill and other intangibles		30,211			29,057			29,783			31,043			27,792

Tangible common stockholders’ equity	$	212,720		$	198,706		$	110,402		$	99,238		$	99,646
Common shares outstanding		17,963,783			17,963,783			9,886,778			9,845,819			9,846,096
Tangible book value per share	$	11.84		$	11.06		$	11.17		$	10.08		$	10.12

Total assets at end of period	$	1,472,743		$	1,447,898		$	1,347,798		$	1,407,072		$	1,297,110
Less: Goodwill and other intangibles		30,211			29,057			29,783			31,043			27,792

Adjusted total assets at period end	$	1,442,532		$	1,418,841		$	1,318,015		$	1,376,029		$	1,269,318
Tangible common stockholders’ equity ratio		14.75	%		14.00	%		8.38	%		7.21	%		7.85	%

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 material 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.

•

“Adjusted average common equity” is defined as average common equity less the average bargain purchase gain.

•

“Adjusted average total assets” is defined as average total assets less the average bargain purchase gain.

•

“Adjusted return on average common equity” is defined as adjusted net income available to common stockholders divided by adjusted average common equity.

•

“Adjusted return on average total assets” is defined as adjusted net income available to common stockholders divided by adjusted average total assets.

•

“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 material 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 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 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)	Asset quality ratios exclude loans held for sale.

3)	Current quarter ratios are preliminary and, beginning January 1, 2015, are calculated under the requirements of Basel III.

Source: Triumph Bancorp, Inc.

###

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

Triumph Bancorp, Inc. - FORM 8-K - EX-99.1 - April 29, 2015

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