Triumph Financial, Inc. · NYSE:TFIN
Triumph Financial — Triumph Bancorp — Debt Investor Presentation (August 2021)
39 slides from Triumph Financial's debt investor presentation, Aug 26, 2021
Slide 1: Subordinated Debt Investor Presentation, August 2021
August 2021 Subordinated Debt Investor Presentation Exhibit 99.2
Slide 2: Disclaimer: Forward-Looking Statements
PAGE 2 DISCLAIMER FORWARD-LOOKING STATEMENTS This presentation contains, and future oral and written statements of Triumph Bancorp, Inc. ("TBK," "we," "ou r" or "us") may contain, forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, a
Slide 3: Disclaimer (Cont'd)
PAGE 3 DISCLAIMER (CONT’D) DISCLAIMERS This presentation has been prepared by TBK solely for informational purposes based on its own information, as well as information from public sou rces. This presentation (references to which shall be deemed to include any information which has been or may be su
Slide 4: Terms of the Proposed Subordinated Debt Offering
PAGE 4 TERMS OF THE PROPOSED SUBORDINATED DEBT OFFERING (1) A rating is not a recommendation to buy, sell, or hold securities. Ratings may be subject to revision or withdrawal at any ti me by the assigning rating organization. Each rating organization has i ts own methodology for assigning ratings a
Slide 5: Company Overview
PAGE 5 COMPANY OVERVIEW TOTAL ASSETS $6.0 billion MARKET CAP(1) $2.1 billion TOTAL LOANS $4.9 billion TOTAL DEPOSITS $4.7 billion N ote: Data is as of Ju ne 30, 2021, except as noted below Sou rce: S&P Global Market Intelligence (1) Data is as of August 11, 2021 Triumph Bancorp, Inc. (NASDAQ: TBK) i
Slide 6: Q2 2021 TBK Segment Information
PAGE 6 Segment Name Banking / Corporate Factoring Payments Revenue* $55.7 million $44.8 million $3.6 million | $2.6 million² Y oY Growth - % 1.5%¹ 135.8% 500.0% | 333.3%² Expenses $42.8 million $17 .2 million $7 .8 million³ | $6.5 million² ³ Y oY Growth - % 14.4% 43.3% 136.4% | 97.0%² ³ Business Seg
Slide 7: Q2 2021 Consolidated Results
PAGE 7 Q2 2021 CONSOLIDATED RESULTS • Diluted earnings per share of $1.08 for the quarter, or $1.17 when adjusted for HubTran closing costs3 • Total loans held for investment decreased $253.3 million, major changes experienced in: ◦ Factored Receivables increased $190 million ◦ Mortgage Warehouse de
Slide 8: Experienced Management Team
PAGE 8 EXPERIENCED MANAGEMENT TEAM Mr . Graft is the Founder, Vice Chairman and Chief Ex ecutive Officer of Triumph Bancorp, In c. Prior to esta blishing Triumph Bancorp, In c., Mr . Graft served as the Founder and President of Triumph Land and Ca pital Ma nagement, LLC, where he ov ersaw the manage
Slide 9: Material Insider Ownership
PAGE 9 MATERIAL INSIDER OWNERSHIP (1) Market and shareholder data as of August 4th, 2021 Sou rce: IR Insight and Company filings Shares(1) Nam e T itle Position % Outstanding Market Value ($000s) Carlos M. Sepulveda Jr Chairman, Director 380,869 1.52% 29,144$ C Todd Sparks Director 305,7 31 1.22 23,
Slide 10: Balance Sheet Trends
PAGE 10 BALANCE SHEET TRENDS Total Assets ($M) Total Loans ($M)* Tangible Common Equity ($M)1 Total Deposits ($M) $2,641 $3,499 $4,560 $5,060 $5,936 $6,016 '16Y '17Y '18Y '19Y '20Y 2Q'21 $233 $318 $437 $446 $492 $461 '16Y '17Y '18Y '19Y '20Y 2Q'21 $190 $135 $2,028 $2,811 $3,611 $4,197 $5,021 $4,862
Slide 11: Performance Trends
PAGE 11 PERFORMANCE TRENDS Net Interest Margin (%) Non-interest Income / Op Revenue (%) ROAA and ROAE (%) Efficiency Ratio (%) 5.9% 5.9% 6.3% 5.9% 5.7% 6.3% '16Y '17Y '18Y '19Y '20Y 06/30/21 YTD 1.0% 1.3% 1.3% 1.2% 1.2% 2.1% 7.3% 10.7% 9.2% 9.0% 9.7% 16.3% '16Y '17Y '18Y '19Y '20Y 06/30/21 YTD ROAA
Slide 12: Yield & Cost Trends
PAGE 12 YIELD & COST TRENDS Yield on Loans & Earnings Assets (%) Cost of Deposits and Funds (%) * For the three months ended June 30, 2021, annualized Sou rce: Company filings; S&P Global Market Intelligence 7.71% 7.55% 8.07% 7.75% 7.00% 7.77% 6.55% 6.74% 7.35% 7.20% 6.46% 6.79% '16Y '17Y '18Y '19Y
Slide 13: Robust Revenue Stream
PAGE 13 ROBUST REVENUE STREAM Total Revenues $201.5 million For the Six Months Ended June 30, 2021 Non-Interest Income (by Segment) $28.2 million 86% 14% 63% 32% 5% Non-Interest Income Net Interest Income Sou rce: Company filings; S&P Global Market Intelligence Banking & Corporate Factoring Payments
Slide 14: Operating Non-Interest Expense
PAGE 14 • Adjusted operating non-interest expense totaled $67.8 million for the quarter ended June 30, 2021: • Includes one month of run-rate expenses of $1.3 million associated with the HubTran acquisition • Excludes $3.0 million in one-time transaction fees associated with the HubTran acquisition
Slide 15: TBK Loan Portfolio Detail
PAGE 15 TBK LOAN PORTFOLIO DETAIL N ote: Composition represented by factoring includes TriumphPay (1) Includes $1 million of 1-4 residential mortgage loans held for sale and $20 million in CRE held for sale (2) Includes $11 million of l iquid credit loans held for sale Please See Following Pages for
Slide 16: Triumph Business Capital Factoring
PAGE 16 TRIUMPH BUSINESS CAPITAL (“TBC”) FACTORING By proudly serving over-the-road trucking, Triumph Business Capital has become a leading player in a large and profitable sector of the transportation industry. * Revenue and gross revenue defined as interest income plus non-interest income N ote: T
Slide 17: Triumph Business Capital Factoring (Cont'd)
PAGE 17 TRIUMPH BUSINESS CAPITAL FACTORING (CONT’D) [ Pi e Chart ] Transport at ion Non- Transportati on 89% 11% [ Bar/Li ne Chart ] Total Purchases Number of Invoi ces Purchased [ Bar Chart ] Average Invoice Size * Does not include $41.3 million charge-off related to the TFS acqu isition, $35.6 mil
Slide 18: Asset Quality Trends
PAGE 18 ASSET QUALITY TRENDS NCOs / Average Loans (%)* NPAs / Total Assets (%) Past Due / Total Loans (%) ACL / Total Loans (%) * 1Q21 includes $41.3 million charge-off related to the TFS acqu isition, $35.6 million of which was indemnified and reimbursed to us by Covenant Logistics Grou p, Inc. The
Slide 19: COVID-19 Update: Exposure
PAGE 19 COVID-19 UPDATE: EXPOSURE INDUSTRY TOTAL EXPOSURE1 % OF GROSS LOANS LOANS IN DEFERRAL Retail $160.8 3.3% $— Office $187.6 3.9% $— Hospitality $119.8 2.5% $18.7 Health Care/Senior Care $44.5 0.9% $— Restaurants $32.4 0.7% $— OFFICE TOTAL EXPOSURE1 Non-owner occupied $158.2 Owner occupied $28.
Slide 20: COVID-19 Update: Loan Deferrals
PAGE 20 COVID-19 UPDATE: LOAN DEFERRALS ($ in millions) BALANCE OF LOANS IN DEFERRAL TOTAL LOANS % OF PORTFOLIO 1Q21 2Q21 2Q21 2Q21 Commercial real estate $71.7 $51.6 $701.6 7% Construction, land development, land $1.3 $1.3 $185.4 1% 1-4 family residential $1.2 $0.5 $135.3 —% Farmland $— $— $91.1 —%
Slide 21: TBK Deposit Success
PAGE 21 NIB Dem and $1 ,804 IB Demand $7 61 Money Mkt $395 Savings $47 4 IRA $87 CDs $613 Brokered Time $307 Other Brokered $285 TBK DEPOSIT SUCCESS * Transaction deposits defined as noninterest and interest bearing checking, Money Market and Savings deposits (1) Ju ne 30, 2019 is the quarter end pr
Slide 22: TBK Bank Liquidity and Securities Portfolio
PAGE 22 TBK BANK LIQUIDITY AND SECURITIES PORTFOLIO (AS OF JUNE 30, 2021) (1) Other security types includes SBAs, foreign bonds, and CMOs (2) Largely consists of de-feased municipal bonds Portfolio Breakout by Type Portfolio Breakout by Classification Portfolio Breakout by Overall Rating 97% 3% AFS
Slide 23: Interest Rate Sensitivity
PAGE 23 INTEREST RATE SENSITIVITY At June 30, 2021: % Variance from Base Case Scenario • Net interest income forecasted on static balance sheet projections based on regulatory guidance • Assumes no negative rates • We use interest rate risk simulation models and shock analyses to test the interest r
Slide 24: Sources of Liquidity and Current Debt Profile
PAGE 24 SOURCES OF LIQUIDITY AND CURRENT DEBT PROFILE N on- i nterest bearing demand Interest bearing demand Individual reti rement acount s Money market Savings Certi fi cates of deposi t Brokered t i me deposit s Ot her brokered deposi ts 29% 14% 2% 8% 9% 17% 11% 10% Cost of i nterest beari ng dep
Slide 25: Regulatory Capital Trends
PAGE 25 REGULATORY CAPITAL TRENDS (1) A ssumes proceeds of $50.0 million from the proposed offering of subordinated notes. Assumes proceeds are used to redeem $50.0 million of extant subordinated indebtedness with no net proceeds down streamed to the Bank Sou rce: Company filings; S&P Global Market
Slide 26: Double Leverage and Earnings to Interest Expense Ratios
PAGE 26 YT D YT D For the Year Ended Decem ber 31, Actual Offering Pro Form a ($M) 2018Y 2019Y 2020Y 6/30/2021 Adjustm ents 6/30/2021 Investment in Subsidiaries $67 9.0 $7 21.0 $801.2 $87 6.1 $0.0 $87 6.1 Consolidated Equity 636.6 636.6 7 26.8 7 92.4 7 92.4 Double Leverage Ratio 106.7 % 113.3% 110.2
Slide 27: Financial Highlights
PAGE 27 FINANCIAL HIGHLIGHTS (1) Reconciliations of non-GAAP financial measures can be found at the end of the presentation. Adjusted metrics exclude material gains and expenses related to acquisition-related activities, net of tax where applicable; (2) Includes discou nt accretion on purchased loan
Slide 28: Non-GAAP Financial Reconciliation
PAGE 28 NON-GAAP FINANCIAL RECONCILIATION Met ri cs and non- GAAP f inancial reconcil iation As of and for t he Three Months Ended D ecember 31, Sept ember30, June30, March 31, December31, ( Dol lars i n t housands, except per share amounts) 2020 2020 2020 2020 2019 Net i ncome availabl e t o common
Slide 29: Non-GAAP Financial Reconciliation (Cont'd)
PAGE 29 NON-GAAP FINANCIAL RECONCILIATION (CONT’D) Met ri cs and non- GAAP f inancial reconcil iation ( cont'd) As of and f or t he Thre Months Ended D ecember 31, Sept ember30, June30, March 31, D ecember31, ( Dol ars i n thousands, except per share amounts) 2020 2020 2020 2020 2019 Adj usted net n
Slide 30: Non-GAAP Financial Reconciliation (Cont'd)
PAGE 30 NON-GAAP FINANCIAL RECONCILIATION (CONT’D) Met ri cs and non- GAAP f inancial reconcil iation ( cont'd) As of and f or t he Thre Months Ended D ecember 31, Sept ember30, June30, March 31, D ecember31, ( Dol ars i n thousands, except per share amounts) 2020 2020 2020 2020 2019 Adj usted net n
Slide 31: Non-GAAP Financial Reconciliation (Cont'd)
PAGE 31 NON-GAAP FINANCIAL RECONCILIATION (CONT’D) Met ri cs and non- GAAP f inancial reconcil iation ( cont'd) As of and f or t he Thre Months Ended D ecember 31, Sept ember30, June30, March 31, D ecember31, ( Dol ars i n thousands, except per share amounts) 2020 2020 2020 2020 2019 Adj usted net n
Slide 32: Non-GAAP Financial Reconciliation (Cont'd)
PAGE 32 NON-GAAP FINANCIAL RECONCILIATION (CONT’D) Met ri cs and non- GAAP f inancial reconcil iation ( cont'd) As of and f or t he Thre Months Ended D ecember 31, Sept ember30, June30, March 31, D ecember31, ( Dol ars i n thousands, except per share amounts) 2020 2020 2020 2020 2019 Adj usted net n
Slide 33: Appendix: TriumphPay
Appendix TriumphPay
Slide 34: TriumphPay payments network for trucking
PAGE 34 TriumphPay is the payments network for trucking, creating frictionless presentment, audit and payment of invoices +
Slide 35: TriumphPay Integrations Are the Focus
PAGE 35 Brokers 482 Factors 60 Payment Volume** $13.7 Billion Carriers* 135K+ TRIUMPHPAY INTEGRATIONS ARE THE FOCUS * Uniqu e carriers paid in the last 12 months. ** A nnualized payment volume of TriumphPay in 2Q21 $13.7B. HubTran customers present an additional $13B payment opportunity. Sou rce: Co
Slide 36: TriumphPay Key Performance Indicators
PAGE 36 TRIUMPHPAY INTEGRATIONS ARE THE FOCUS KEY PERFORMANCE INDICATORS 25 New Brokers in 2Q21 5 New Factors in 2Q21 Top 20 Factors Represent 75% of the Factor Industry Top 25 Brokers Represent 40% of the Broker Industry
Slide 37: Total Addressable Market
PAGE 37 FOR-HIRE TRUCKING ~$420 Billion* CONTRACT SHIPPING ~$250 Billion* BROKERED FREIGHT ~$170 Billion* TOTAL ADDRESSABLE MARKET In 2Q21, TriumphPay paid an annualized $11.2 billion on behalf of 250 freight broker clients In 2Q21, TriumphPay paid an annualized $2.5 billion on behalf of 36 contract
Slide 38: Total Addressable Market: Payment Volume
PAGE 38 TOTAL ADDRESSABLE MARKET: PAYMENT VOLUME * This data utilizes high-level estimates from multiple data sources including ATA industry reports (2019), FMCSA authority registrations, carrier reported numbers of power units, mercantile credit bureau reports, Broughton Capital reports and Triumph
Slide 39: Total Addressable Market: Participants
PAGE 39 TOTAL ADDRESSABLE MARKET: PARTICIPANTS * This data utilizes high-level estimates from multiple data sources including ATA industry reports (2019), FMCSA authority registrations, carrier reported numbers of power units, mercantile credit bureau reports, Broughton Capital reports and Triumph’s
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