Triumph Financial, Inc. · NYSE:TFIN
Triumph Financial — Triumph Bancorp — Q1 2018 Earnings Presentation
29 slides from Triumph Financial's earnings presentation, May 7, 2018
Slide 1: Q1 2018 Investor Information
Q1 2018 Investor Information Exhibit 99.1
Slide 2: 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: Company Overview
company OVERVIEW PAGE Triumph Bancorp, Inc. (NASDAQ: TBK) (“Triumph”) 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 Community Ban
Slide 4: Platform Overview - Lending
PLATFORM OVERVIEW - LENDING PAGE 25% Texas Geographic Concentrations1 as of March 31, 2018 Diversification by asset class, geography, and collateral Commercial Finance target mix of 40% Industry leading portfolio yields 1 Excludes factored receivables 26% Colorado 1% Kansas 7% Iowa 17% Illinois
Slide 5: Platform Overview - Branch Network
PLATFORM OVERVIEW – branch network PAGE team members(2) Western division 32 branches in Colorado 2 branches in western Kansas MIDwest division 10 branches in the Quad Cities metroplex 8 branches throughout northern and central Illinois Dallas Corporate Headquarters 1 branch (Primarily CODs) In Progr
Slide 6: Community Bank Acquisitions
Community Bank Acquisitions Acquisition of two holding companies with three bank subsidiaries: First Bancorp of Durango, Inc. First National Bank of Durango Bank of New Mexico Southern Colorado Corp. Citizens Bank of Pagosa Springs All entities currently controlled by the Fitzgerald family $734 mill
Slide 7: Interstate Capital Corp. Acquisition
INTERSTATE CAPITAL CORP. ACQUISITION PAGE Pending acquisition of Interstate Capital Corp. represents a combination with a company and a management team that Triumph has known for years Clear cultural fit Similar focus on transportation industry Delivers additional scale in a niche in which the Compa
Slide 8: Overview of Acquisition Terms
Required Approvals Customary regulatory/other approvals; voting agreements signed with all or a majority of holders of voting shares on all transactions OVERVIEW OF acquisition TERMS PAGE Price / LTM Net Income(3) Core Deposit Premium(2) Projected TBV Delivered at Close Expected Closing Transaction
Slide 9: Consolidated Financial Impact
CONSOLIDATED FINANCIAL IMPACT Combined pro forma impact of the pending acquisitions and the announced follow-on equity offering yields attractive EPS accretion and TBV earn back period, while providing the Company sufficient capital to sustain its attractive growth profile PAGE Projected Combined Pr
Slide 10: Enhanced Combined Operations
First Bancorp of Durango, Inc. ENHANCED Combined OPERATIONS PAGE Branch Presence Provides efficient scale to drive towards our net overhead target of 3.00% Note: Financials as of and for the three months ended 12/31/2017. Quarterly metrics are annualized. Reconciliations of non-GAAP financial measur
Slide 11: Triumph Commercial Finance
PAGE Triumph Commercial Finance Asset Based Lending Borrowing base working capital lending Focus on facilities between $1MM - $20MM Core industries include manufacturing, distribution, and services Equipment Finance Secured by revenue producing, essential-use equipment with broad resale markets Core
Slide 12: Loan Portfolio Detail
LOAN PORTFOLIO DETAIL PAGE Community Banking Commercial Finance Loans Held for Investment Chart data labels – dollars in millions 42825 42916 43008 43100 43190 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Community Banking 1,321.6 1,493.4259999999999 1,538.607 1,91
Slide 13: Long Term Performance Goals vs Actual Q1
Return on Average Assets (“ROAA”) GAAP: 1.43% Core: 1.34% Goal: > 1.80% Net Overhead Ratio Net Interest Income to Average Assets Credit Costs Pre-Provision Net Revenue Taxes GAAP: 5.60% Core: 5.60% Goal: > 5.00% GAAP: 3.43% Core: 3.56% Goal: < 3.00% GAAP: 2.17% Core: 2.04% Goal: > 2.80% GAAP: 0.30%
Slide 14: First Quarter Highlights
PAGE Diluted earnings per share of $0.56 for the first quarter Net income for the quarter was impacted by (i) a gain on sale of Triumph Healthcare Finance, our healthcare asset based lending line of business, of $1.1 million, or $0.8 million net of tax, and (ii) a combined loss on the sale of munici
Slide 15: Loan Yields and Net Interest Margin
loan yields and NET INTEREST MARGIN PAGE *Reconciliations of non-GAAP financial measures can be found at the end of the presentation **SNL U.S. Bank $1-$5B: Includes all Major Exchange (NYSE, NYSE MKT, NASDAQ) Banks in SNL’s coverage universe with $1B to $5B in Assets. Q1 2018 SNL data not available
Slide 16: Triumph Business Capital Factoring
TRIUMPH BUSINESS CAPITAL FACTORING PAGE Yield of 17.40% in the first quarter Average annual charge-off rate of 0.50% over the past 3 years 3,438 factoring clients at March 31, 2018
Slide 17: Transportation Market Size
Annual Gross Revenues (8% GDP) $750 Billion : 4 Million Trucks For-Hire $400 Billion : 2.6 Million Trucks *This data utilizes high-level estimates from multiple data sources including FMCSA authority registrations, carrier reported numbers of power units, mercantile credit bureau reports and Triumph
Slide 18: What is Factoring?
Factoring 101 Client Account Debtor What is factoring? Factoring is one of the oldest forms of finance. Factoring is a financial transaction in which a business sells its accounts receivable to a third party (factor) at a discount. A business typically factors its receivable assets to meet its prese
Slide 19: TriumphPay
Triumphpay 101 TriumphPay Economics: Client approves invoice for $2,000. Payment terms are 21 days. Carrier opts for QuickPay. Triumph pays the carrier $1,980 same day or next day. The $20 difference represents the QuickPay fee. That fee is then split between the broker and Triumph, $10 each. At day
Slide 20: Loan Portfolio
Loan portfolio PAGE * Net charge-offs totaled $2 thousand for the quarter, resulting in a net charge-offs to average loans ratio of 0.00%. **Loans with a fair value of $95.8 million and original purchase discount of $3.4 million were acquired in the Independent Bank Group, Inc. branch acquisition, a
Slide 21: Deposit Mix and Growth
DEPOSIT MIX AND GROWTH PAGE *Deposits totaling $160.7 million were assumed in the Independent Bank Group, Inc. branch acquisition, and deposits totaling $293.4 million were assumed in the Valley Bancorp, Inc. acquisition.
Slide 22: Pro Forma Loan Portfolio
PRO FORMA LOAN PORTFOLIO PAGE MRQ Yield: 7.73% MRQ Yield: 5.25% MRQ Yield: 5.32% MRQ Yield: 8.13% Commercial Real Estate Construction & Development Farmland Commercial Factored Receivables Mortgage Warehouse & Other 1-4 Family Residential Consumer Southern CO Pro Forma Data as of 12/31/2017. Quarter
Slide 23: Pro Forma Deposit Portfolio
PRO FORMA DEPOSIT PORTFOLIO PAGE MRQ Cost: 0.67% MRQ Cost: 0.19% MRQ Cost: 0.40% MRQ Cost: 0.58% Non-Interest Bearing Demand Interest Bearing Demand Money Market Savings Certificates of Deposit IRAs Brokered Deposits Triumph Durango Southern CO Pro Forma Loans / Deposits: 107.2% Loans / Deposits: 47
Slide 24: Investment Considerations
INVESTMENT CONSIDERATIONS PAGE Coverage Analysts: Brad Milsaps – Sandler O’Neill & Partners Jared Shaw – Wells Fargo Securities, LLC Stephen Moss – FBR Capital Markets & Co. Brett Rabatin – Piper Jaffray & Co. Gary Tenner – D.A. Davidson & Co. Brady Gailey – Keefe, Bruyette & Woods, a Stifel Company
Slide 25: Financial Highlights
FINANCIAL HIGHLIGHTS PAGE Reconciliations of non-GAAP financial measures can be found at the end of the presentation Metric adjusted to exclude material gains and expenses related to merger and acquisition-related activities, net of tax where applicable Asset quality ratios exclude loans held for sa
Slide 26: Non-GAAP Financial Reconciliation
NON-GAAP FINANCIAL RECONCILIATION PAGE Triumph uses certain non-GAAP financial measures to provide meaningful supplemental information regarding our operational performance and to enhance investors' overall understanding of such financial performance. 43190QTD 42916QTD 42825QTD 42460QTD 42185QTD Per
Slide 27: Non-GAAP Financial Reconciliation
NON-GAAP FINANCIAL RECONCILIATION PAGE 43190QTD 42916QTD 42825QTD 42460QTD 42185QTD Period end date 43190 43100 43008 42916 42825 Quarter Days in Year 365 365 365 365 365 Days in Quarter 90 92 92 91 90 As of and for the Three Months Ended (Dollars in thousands, March 31, December 31, September 30, J
Slide 28: Non-GAAP Financial Reconciliation
NON-GAAP FINANCIAL RECONCILIATION PAGE 43190QTD 42916QTD 42825QTD 42460QTD 42185QTD Period end date 43190 43100 43008 42916 42825 Quarter Days in Year 365 365 365 365 365 Days in Quarter 90 92 92 91 90 As of and for the Three Months Ended (Dollars in thousands, March 31, December 31, September 30, J
Slide 29: Non-GAAP Financial Reconciliation
NON-GAAP FINANCIAL RECONCILIATION PAGE 43190QTD 42916QTD 42825QTD 42460QTD 42185QTD Period end date 43190 43100 43008 42916 42825 Quarter Days in Year 365 365 365 365 365 Days in Quarter 90 92 92 91 90 As of and for the Three Months Ended (Dollars in thousands, March 31, December 31, September 30, J