Triumph Financial, Inc. · NYSE:TFIN
Triumph Financial — Triumph Bancorp — Q2 2015 Earnings Presentation
32 slides from Triumph Financial's earnings presentation, Jul 27, 2015
Slide 1: Q2 2015 Earnings Release
Q2 2015 Earnings Release July 27, 2015 Exhibit 99.2
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer 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 fo
Slide 3: Platform overview
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 $1.5 billion in assets 15 states(4) 522 team members(5) (1) (2) (3) (1) Triumph
Slide 4: How we go to market
How we go to market Community Banking Focused on reaching our communities through service, selling and saturation Emphasis on long-term customer relationships Demonstrated ability to work with clients throughout economic cycles Focused on cross-selling additional products and services to enhance rel
Slide 5: Q2 2015 highlights
Reported fully diluted earnings per share of $0.25 for the quarter Loan growth of $5.5 million in Triumph Healthcare Finance, $19.7 million in TCF Equipment Finance, $28.3 million in TCF ABL, and $35.8 million in our mortgage warehouse facilities Factored receivables increased $28.3 million to an hi
Slide 6: Financial highlights
Financial highlights 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. Asset quality ratios exclude loans held for sale Cur
Slide 7: Loan portfolio detail
Real estate Commercial Real Estate $234.1 Construction, Land & Development $46.7 1-4 Family Residential $75.6 Farmland $25.7 Commercial $186.3 Consumer $11.0 Mortgage Warehouse $105.7 Loans HFI = $1,152.7 million 2Q15 Yield = 9.49% GAAP(1) Chart data labels – dollars in millions (1) Adjusted yield o
Slide 8: Loan mix, yield, and growth
Loan mix, yield, and growth *Reconciliations of non-GAAP financial measures can be found at the end of the presentation
Slide 9: Loan yields and net interest margin
Loan yields and net interest margin Loan Yields Net Interest Margin ** SNL U.S. Bank $1B-$5B : Includes all Major Exchange (NYSE, NYSE MKT, NASDAQ) Banks in SNL's coverage universe with $1B to $5B in Assets as of 07/24/2015 *Reconciliations of non-GAAP financial measures can be found at the end of t
Slide 10: Deposit mix, rate, and growth
Deposit mix, rate, and growth
Slide 11: Noninterest Income
Noninterest Income Note: Excludes $12.5 million bargain purchase gain in Q1 2015 and $12.6 million branch sale gain in Q3 2014 for comparability purposes
Slide 12: Noninterest Expense
Noninterest Expense Noninterest expense = $19.6 million Efficiency Ratio = 66.75%* Q2 2015 Q1 2015 Chart data labels – dollars in thousands *Reconciliations of non-GAAP financial measures can be found at the end of the presentation. Q1 2015 efficiency ratio calculated on adjusted noninterest expense
Slide 13: Asset Quality
ASSET QUALITY $23 i x 2 8 Net Chargeoffs {in thousands) % of Average Loans 8 2Q14 3Q14 4Q14 11s 2Q15 MME Net Chargeoffs (NCOs) ——=NCOs/ Average Loans $30 4.0% _& 35% i 30% 3 _ 20 | 2 22 25% § = a fs i. a —+ 2% 3 ge | | 1x § 2=s10 | — 3 3 L106 $s ->—I 7 —— ose on i J A! ox 2Q14 3Qi4 4Qi4 1Q Is 2Q15 N
Slide 14: Coverage Analysts and Investment Considerations
Coverage Analysts: Brad Milsaps - Sandler O’Neill & Partners Stephen Moss - Evercore ISI Jared Shaw - Wells Fargo Securities, LLC Jefferson Harralson - Keefe, Bruyette and Woods Bill Carcache - Nomura Securities International Investment Considerations We are an entrepreneurial financial services com
Slide 15: Appendix
at TRIUMPH APPENDIX LIKE NO OTHER tL TRIUMPH
Slide 16: Non-GAAP Financial Reconciliation
Non-GAAP Financial Reconciliation Metrics and non-GAAP financial reconciliation As of and for the Three Months Ended June 30, March 31, December 31, September 30, June 30, (Dollars in thousands, except per share amounts) 2015 2015 2014 2014 2014 Net income available to common stockholders $4,457 $13
Slide 17: Non-GAAP Financial Reconciliation (cont'd)
Non-GAAP Financial Reconciliation Metrics and non-GAAP financial reconciliation (cont'd) As of and for the Three Months Ended June 30, March 31, December 31, September 30, June 30, (Dollars in thousands, except per share amounts) 2015 2015 2014 2014 2014 Efficiency ratio: Net interest income $24,645
Slide 18: Non-GAAP Financial Reconciliation (cont'd)
Non-GAAP Financial Reconciliation Metrics and non-GAAP financial reconciliation (cont'd) As of and for the Three Months Ended June 30, March 31, December 31, September 30, June 30, (Dollars in thousands, except per share amounts) 2015 2015 2014 2014 2014 Reported yield on loans 9.49% 8.50% 8.98% 8.6
Slide 19: Commercial Finance Primer July 2015
Commercial Finance Primer July 2015
Slide 20: Asset Based Lending (ABL)
Asset Based Lending (“ABL”)
Slide 21: Introduction to the Asset Based Lending market
introduction to the Asset Based Lending (“ABL”) market What is Asset Based Lending? Asset Based Lending (“ABL”) is a type of senior secured lending that is typically governed by a borrowing base which revolves with the movement of the underlying assets - primarily accounts receivable and inventory.
Slide 22: Introduction to the ABL market: capital structure hierarchy
introduction to the ABL market Capital Structure Hierarchy ABL is the most senior component and lowest risk category of a company’s capital structure. Target Lending Class Lowest risk category Attractive for banks / lenders with low cost of funds Fully collateralized First priority security interest
Slide 23: ABL characteristics profile
CHARACTERISTICS PROFILE Facility Size $1 million to $25 million Types of Business Manufacturers ▪ Distributors ▪ Wholesalers ▪ Service Providers ▪ Retailers Business Profile Privately owned or publicly traded Sponsor or non-sponsor backed Annual Sales ranging between $7.5 million to $250 million EBI
Slide 24: Introduction to the ABL process
introduction to the ABL Process Source: "Introduction to ABL for Community Banks". Commercial Finance Association. www.cfa.com Typical Underwriting Process Flow Before receipt of good faith deposit Due diligence process up to commitment fee Closing process Post closing process Pre-clearance summary
Slide 25: ABL process: borrowing base
introduction to the ABL Process Source: "Introduction to ABL for Community Banks". Commercial Finance Association. www.cfa.com Assets as Collateral—The Borrowing Base The borrowing base is comprised of working capital assets, generally accounts receivable and inventory, that are available to use as
Slide 26: ABL process: standard ineligible categories
For Inventory Work-in-process Obsolete or slow moving Inventory in transit Consigned inventory; supplies and packaging inventory Inventory located outside the United States Inventory purchased or manufactured pursuant to a license agreement introduction to the ABL Process For Accounts Receivables So
Slide 27: Introduction to the ABL customers
introduction to the ABL customers Emerging Middle Mkt / Growth Mature Restructure Emerging growth Start-Up Acquisition financing Business expansions Spin-Offs Recapitalization Bank refinancing DIP, POR & early stage turnaround Company Lifecycle Company Size / Credit Quality Target Markets Company Li
Slide 28: Factoring
FACTORING wi a ( re lin HE. 4
Slide 29: Invoice factoring overview
Invoice factoring is a style of working capital finance by which businesses (“clients”) sell their invoices (“accounts” or “accounts receivable”) to a third party commercial financial company, also known as a “factor”. Accounts are typically sold at a discount to their face value, thereby generating
Slide 30: Transportation factoring types
Non-Recourse Transportation Small-Ticket Recourse Transportation Small-Mid Fleet Freight Brokers General Factoring Small ticket, higher risk accounts: 1-5 trucks Non-Recourse (Triumph Business Capital retains debtor credit risk) Average monthly purchases/carrier = $30,000 3% to 5% discount rate on p
Slide 31: Collateral Acceptability and Client Reserves
Collateral Acceptability and Client Reserves In all cases, a factor is in a primary, first-lien position against its client’s accounts receivable. There may be other liens on the accounts, but these are subordinate to the factor. An acceptable invoice is one that has no outstanding contingencies aff
Slide 32: Anatomy of a Factoring Transaction
Anatomy of a Factoring Transaction Factoring of a $1,000 Freight Invoice Carrier Example Client Account Debtor Factor 1 2 3 6 4 5 Summary Account Debtor contracts with Client to provide services, such as trucking delivery. Invoice amount is $1,000. Client renders services and presents Account Debtor