Core Insights - The company is focused on achieving 20% annual growth in transportation revenue while also driving margin expansion through operational efficiency [2][10][21] - A restructuring initiative has been implemented to reduce the expense run rate by 5%, with most savings expected in the fourth quarter [3][4][30] - The company has successfully integrated its products and services, enhancing its value proposition in the transportation market [7][19] Revenue Growth Strategy - The company aims to grow its factoring segment by 20%, leveraging a robust go-to-market strategy and bundled products [10][15][42] - The payments business is expected to grow significantly, with a focus on enhancing customer relationships and expanding the payments network [17][20][63] - The intelligence segment is projected to grow, with a pilot program aimed at obtaining critical shipper data to enhance service offerings [44][45] Operational Efficiency - The company has made significant investments in technology, spending $110 million to enhance its operational capabilities [32][33] - A focus on efficiency is emphasized, with plans to maintain flat expenses while driving revenue growth [30][31] - The integration of various business segments is aimed at reducing duplication and improving overall operational effectiveness [35][63] Market Position and Competitive Landscape - The company holds a strong market position, touching a significant portion of invoices in the transportation sector, which provides a competitive edge [60][61] - The company emphasizes a customer-centric approach, aiming to deliver a comprehensive value chain that includes liquidity solutions, digital banking, and intelligence [40][42][63] - The competitive landscape is characterized by a need for integrated solutions, with the company leveraging its extensive data and technology to maintain its leadership [62][63]

Financial Data and Key Metrics Changes - The company reported continued revenue growth in its payments business despite a challenging market environment [2][4] - A restructuring effort is expected to reduce the expense run rate by 5%, with most savings starting in Q4 [6][7] - The company anticipates flat expenses while expecting revenue to increase in the upcoming year [5][41] Business Line Data and Key Metrics Changes - The transportation revenue is targeted to grow by 20% annually, with a focus on operational efficiency and margin expansion [7][34] - The factoring segment has shown mid to high single-digit revenue growth, with a target of 20% growth moving forward [16][34] - The intelligence segment has integrated its products and is expected to contribute significantly to revenue growth in 2026 [12][40] Market Data and Key Metrics Changes - The company has a strong presence in the for-hire market, touching approximately 6% to 7% of all trucks on the road [44] - The company is positioned to benefit from potential market distortions due to regulatory changes affecting driver availability [42][49] Company Strategy and Development Direction - The company is focused on enhancing its value proposition through technology investments and operational efficiency [6][60] - A customer-centric approach is emphasized, aiming to provide a comprehensive suite of services beyond just factoring [68][70] - The company plans to leverage its payments network to enhance its intelligence offerings and drive growth [110][114] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the freight market but remains optimistic about revenue growth and margin expansion [5][41] - The company is committed to improving efficiency and maintaining a flat expense structure while targeting significant revenue growth [61][62] - Management expressed confidence in the company's ability to navigate the current economic landscape and capitalize on market opportunities [49][115] Other Important Information - The company is winding down non-core lending activities to focus on its transportation business and community banking [96][98] - Updates on the Tricolor credit situation indicate a cautious but positive outlook regarding collateral recovery [99][102] Q&A Session Summary Question: When will the fully integrated product for the Intelligence segment be available? - The fully integrated product is currently in the market, with significant progress made in integration efforts [12][14] Question: What is the expected revenue growth for the factoring segment next year? - The target for growth in the factoring segment is 20%, driven by a robust go-to-market strategy [16][34] Question: How much of the TPAY volume is onboarded? - All TPAY payment volume is onboarded, but full revenue charging has not yet commenced [23][25] Question: What is the retention rate for new accounts? - The retention rate is high, with around 70% of accounts linked and funded shortly after opening [53][54] Question: What are the expectations for expense management in 2026? - The company aims to maintain expenses at approximately 96.5% of revenue, focusing on efficiency improvements [56][58] Question: How does the company view competition in the market? - The company recognizes competition but believes its integrated value chain and data capabilities provide a significant advantage [106][110]

Company Overview - Triumph Financial's market capitalization was $1.1 billion as of October 13, 2025 [10] - The company's revenue for the trailing twelve months (TTM) ending September 30, 2025, was $422 million [10] - Net income to common shareholders for the same period was $6.8 million [10] - The U S freight and logistics industry represents a $990 billion market based on gross freight revenue from U S trucking on primary shipments [13] - Trucking accounts for 72 6% of freight carried in the U S [13] Business Segments - Factoring's annualized revenue is $155 million [15] - Payments' annualized revenue is $73 million [15] - Intelligence's annualized revenue is $9 million [15] - Triumph Network includes 535 brokers, 57 factors, 75 shippers, and over 173,000 carriers (TTM) [15] - Triumph handles payments for 43 of the top 100 freight brokers, disbursing over $166 million every day [22] - Triumph is the second-largest transportation factoring firm, purchasing $47 million in invoices daily [23] Sustainable Business Practices - Women represent 61% of the company's overall team members [75] - Ethnic minorities represent 43% of the company's overall team members [75] - In 2024, 424 team members volunteered 8,366 hours, supporting 398 organizations [77] - $54,190 was donated through the Matching Gifts Program in 2024 [79]

Core Insights - Triumph Financial (TFIN) reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, with an earnings surprise of +58.33% [1] - The company posted revenues of $109.28 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 1.55% [2] - The stock has underperformed, losing about 46.8% since the beginning of the year compared to the S&P 500's gain of 13% [3] Earnings Performance - Triumph Financial has surpassed consensus EPS estimates two times over the last four quarters [2] - The company had an earnings surprise of +275% in the previous quarter, where it reported earnings of $0.15 against an expected $0.04 [1] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $115.07 million, and for the current fiscal year, it is $0.56 on revenues of $435.34 million [7] - The estimate revisions trend for Triumph Financial was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Financial - Miscellaneous Services industry, to which Triumph Financial belongs, is currently in the top 39% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Oportun Financial Corporation (OPRT), another company in the same industry, is expected to report quarterly earnings of $0.26 per share, reflecting a significant year-over-year change of +1200% [9]

Financial Performance - For the nine months ended September 30, 2025, net income available to common stockholders was $3.7 million, or $0.16 per diluted share, down from $9.8 million, or $0.42 per diluted share for the same period in 2024[242]. - Net income for the three months ended September 30, 2025, was $1.7 million, a decrease of $3.6 million or 68.1% compared to $5.3 million for the same period in 2024[268]. - Net income for the nine months ended September 30, 2025, was $6.1 million, a decrease of $6.2 million or 49.8% compared to $12.3 million for the same period in 2024[338]. Revenue and Income Segments - The Banking segment generated 58% of total segment revenue, while the Factoring segment contributed 30%, Payments segment 11%, and Intelligence segment 1% for the nine months ended September 30, 2025[240]. - Noninterest income for the three months ended September 30, 2025, was $21.4 million, up from $17.5 million in 2024, representing a 22.3% increase[263]. - Noninterest income increased by $3.951 million, or 22.6%, to $21.448 million compared to $17.497 million in the same period of 2024[274]. - Noninterest income rose by $8.4 million, or 16.8%, to $58.0 million compared to $49.7 million in 2024[339]. - Total revenue for the nine months ended September 30, 2025, was $50.918 million, an increase of 21.7% from $41.861 million in the same period of 2024[398]. Assets and Loans - As of September 30, 2025, the company had total assets of $6.357 billion, total loans held for investment of $4.987 billion, and total deposits of $4.955 billion[234]. - Total assets increased to $6,357.1 million as of September 30, 2025, compared to $5,948.975 million at the end of 2024[264]. - Total loans held for investment increased by $440 million during the nine months ended September 30, 2025, with Banking loans increasing by 6.6% to $3.559 billion[243][245]. - Gross loans as of September 30, 2025, were $4,986,922,000, compared to $5,150,806,000 at the end of 2024, indicating a reduction in loan volume[307]. - Loans held for investment increased to $4.987 billion, up from $4.547 billion at the end of 2024[409]. Expenses and Costs - The company recognized $3.1 million in expenses related to a reduction in force during the three months ended September 30, 2025[251]. - Noninterest expense rose by $8.068 million, or 8.4%, to $103.714 million from $95.646 million in the previous year[274]. - Noninterest expense increased by $21.4 million, or 7.5%, to $304.7 million, primarily due to higher salaries and benefits[339]. - Salaries and employee benefits increased by $4.7 million, or 8.6%, to $60.192 million for the three months ended September 30, 2025, which included $3.1 million of severance expenses[294]. Credit and Losses - Credit loss expense for the period was $4.284 million, a slight increase of $21, or 0.5%, from $4.263 million in the previous year[274]. - Credit loss expense on loans decreased by $0.9 million, or 17.9%, to $4.249 million for the three months ended September 30, 2025, compared to $5.174 million in the same period of 2024[283]. - The allowance for credit losses (ACL) on loans was $33.5 million as of September 30, 2025, down from $40.7 million as of December 31, 2024, representing a decrease in the ACL to total loans ratio from 0.90% to 0.67%[286]. - Total credit loss expense decreased by $9.4 million, or 65.7%, from $14.3 million in 2024 to $4.9 million in 2025[356]. Segment Performance - The Payments segment processed 8.8 million invoices, paying Carriers a total of $10.662 billion during the three months ended September 30, 2025, compared to 6.3 million invoices for $7.091 billion in the same period a year ago[249]. - The Factoring segment reported a net income before income tax expense of $27,075,000 for Q3 2025, compared to $29,074,000 in Q3 2024, reflecting a decline in profitability[306]. - Noninterest income in the Payments segment increased by $2.2 million, or 33.9%, to $8.462 million for the three months ended September 30, 2025, compared to $6.322 million in the same period a year ago[326]. - Operating income in the Factoring segment rose by $15.2 million, or 77.3%, compared to the same period in 2024[391]. Tax and Regulatory - The effective tax rate for the three months ended September 30, 2025, was (33)%, compared to 15% for the same period in 2024, influenced by lower pre-tax income and increased estimated research and development tax credits[296]. - The effective tax rate increased to 34% for the nine months ended September 30, 2025, compared to 16% in the same period of 2024[369]. Strategic Initiatives - The company plans to focus on technology initiatives, including artificial intelligence, to enhance efficiency and profitability in its factoring segment[261]. - The company acquired Greenscreens AI, Inc. for $139.1 million in cash and $12.7 million in common stock on May 8, 2025[252]. - The company launched a data intelligence segment in Q4 2024, enhancing its service offerings through acquisitions of Isometric Technologies Inc. and Greenscreens AI, Inc.[372].

[CEO Letter to Shareholders](index=1&type=section&id=CEO%20Letter%20to%20Shareholders) [Q3 Financial Performance Overview](index=1&type=section&id=Q3%20Financial%20Performance%20Overview) Q3 net income was **$0.9 million** and diluted EPS **$0.04**, including **$4.4 million** non-core restructuring expenses - Q3 net income was **$0.9 million**, with diluted EPS of **$0.04**[1](index=1&type=chunk) - Results included **$4.4 million** in non-core expenses, primarily from restructuring efforts[1](index=1&type=chunk) [Strategic Execution & Efficiency Initiatives](index=1&type=section&id=Strategic%20Execution%20%26%20Efficiency%20Initiatives) Q3 total expenses decreased by **~5%** due to efficiency initiatives, with **90%** of savings recurring by early Q4 - The company continues its investment cycle and network integration strategy, with benefits beginning to emerge[1](index=1&type=chunk) - Total expenses decreased by **~5%** in Q3 through efficiency improvements, with **90%** of savings expected to be recurring by early Q4[4](index=4&type=chunk) - Investments in AI tools have shown initial success, with plans to continue streamlining and enhancing efficiency into 2026[4](index=4&type=chunk) [Capital Allocation & Credit Update](index=1&type=section&id=Capital%20Allocation%20%26%20Credit%20Update) The board authorized a **$30 million** share repurchase, and credit remains robust despite the Tricolor bankruptcy event - The board authorized a **$30 million** share repurchase program, believing the current stock price does not reflect the company's intrinsic value[5](index=5&type=chunk)[7](index=7&type=chunk) - The company will maintain capital buffers above regulatory requirements and plans to use a portion of earnings for share repurchases[7](index=7&type=chunk) - Regarding the Tricolor bankruptcy, the company believes its **$22.5 million** loan is well-collateralized by vehicle inventory, requiring no specific loss reserves, and plans to reduce its non-transportation footprint[5](index=5&type=chunk)[56](index=56&type=chunk) [CEO Summary of Key Points](index=1&type=section&id=CEO%20Summary%20of%20Key%20Points) [Noninterest Expense](index=1&type=section&id=Noninterest%20Expense) Adjusted total noninterest expense decreased by **1.8%** quarter-over-quarter to **$99.3 million** in Q3 due to efficiency gains Adjusted Noninterest Expense (in millions of dollars) | (in millions of dollars) | 2Q25 Adjusted | 3Q25 Adjusted | Adjusted QoQ Change ($) | Adjusted QoQ Change (%) | | :----------------------- | :------------ | :------------ | :---------------------- | :---------------------- | | Factoring | 19.5 | 18.0 | (1.5) | (7.7)% | | Payments | 16.8 | 16.6 | (0.2) | (1.2)% | | Intelligence | 4.7 | 5.7 | 1.0 | 21.3% | | Banking | 32.0 | 31.2 | (0.8) | (2.5)% | | Corporate | 28.1 | 27.8 | (0.3) | (1.1)% | | Total | 101.1 | 99.3 | (1.8) | (1.8)% | - Adjusted total noninterest expense decreased by **1.8%** quarter-over-quarter to **$99.3 million**, primarily due to efficiency improvements[3](index=3&type=chunk)[4](index=4&type=chunk) [Transportation Revenue Growth & Outlook](index=1&type=section&id=Transportation%20Revenue%20Growth%20%26%20Outlook) Q3 total transportation revenue grew **3.7%** quarter-over-quarter, with Payments revenue up **7.4%** and a positive pre-tax operating profit - Q3 Payments revenue grew **7.4%** quarter-over-quarter, with EBITDA margin improving to **16.8%** and achieving positive pre-tax operating profit for the first time[4](index=4&type=chunk) - Factoring revenue saw slight growth, with improved core operating margins, while Intelligence revenue remained flat[4](index=4&type=chunk) - Q3 total transportation revenue increased by **3.7%** quarter-over-quarter, and the company anticipates **20%** annual growth in transportation revenue[4](index=4&type=chunk) [Expense Reduction & Margin Improvement](index=1&type=section&id=Expense%20Reduction%20%26%20Margin%20Improvement) Total expenses decreased by **~5%** in Q3, with **90%** of savings recurring by early Q4, and Q4 expenses projected at **$96.5 million** - Total expenses decreased by **~5%** in Q3, with **90%** of savings incorporated into recurring expenses by early Q4[4](index=4&type=chunk) - Q4 expenses are projected to be **$96.5 million**, **4.5%** lower than Q2 adjusted figures[4](index=4&type=chunk) - Investments in AI tools have shown initial success, and the company will continue to integrate them into operations, with further efficiency gains planned for 2026[4](index=4&type=chunk) [Credit](index=1&type=section&id=Credit) Despite market volatility from the Tricolor bankruptcy, the company believes its collateral is well-secured and plans to reduce non-transportation lending - The Tricolor bankruptcy event caused market volatility, but the company believes its collateral remains well-secured[5](index=5&type=chunk) - The company's collateral differs from lenders likely to incur maximum losses, and it has diligently monitored the situation[5](index=5&type=chunk) - Non-transportation lending is not a core strategy, and the company expects to continue reducing its non-transportation footprint[5](index=5&type=chunk) [Share Repurchase Announcement](index=3&type=section&id=Share%20Repurchase%20Announcement) The board authorized a **$30 million** share repurchase program, believing the current stock price undervalues Triumph - The board authorized a **$30 million** share repurchase program[5](index=5&type=chunk) - The company believes the current stock price does not reflect Triumph's intrinsic value[5](index=5&type=chunk) - The company will maintain capital buffers above regulatory requirements and plans to use a portion of earnings for share repurchases when the stock price is near current levels[7](index=7&type=chunk) [Our Strategy and The Harmony of a Customer-Centric Organization](index=3&type=section&id=Our%20Strategy%20and%20The%20Harmony%20of%20a%20Customer-Centric%20Organization) [Integrated Value Chain & Competitive Advantage](index=3&type=section&id=Integrated%20Value%20Chain%20%26%20Competitive%20Advantage) Triumph, a technology and payments provider in trucking, builds an integrated value chain to improve data strategy, payments, and working capital - Triumph is a technology and payments provider in the trucking industry, aiming to improve data strategy, payments, and working capital through an integrated value chain[8](index=8&type=chunk) - The company creates a unique competitive advantage through mutually reinforcing activities like audit, payments, liquidity solutions, digital banking, and intelligence services[8](index=8&type=chunk)[9](index=9&type=chunk) - This integrated value chain is expected to drive sustainable revenue growth and margin expansion for shareholders[8](index=8&type=chunk) [Core Activities](index=3&type=section&id=Core%20Activities) Triumph's core activities include audit, payments, liquidity solutions, digital banking, and intelligence services, all designed to streamline freight transactions - Audit: Reduces invoice processing time and effort through automation and efficiency at scale - Payments: Enhances transaction confidence through efficient payments and fraud mitigation - Liquidity Solutions: Includes factoring, supply chain finance (SCF), FaaS, quick pay, and cash advances, converting freight receivables to cash, and equipment financing - Digital Banking+: Commercial bank accounts integrated with the company's network for seamless fund movement and integrated tools as a central back office for carriers - Intelligence: Data-driven fraud protection, pricing, capacity, and performance insights[12](index=12&type=chunk) [Market Context & Future Focus](index=5&type=section&id=Market%20Context%20%26%20Future%20Focus) The company built the sole financial network in brokered freight during a challenging cycle and will now focus on customer service, revenue growth, and margin expansion - The company successfully built the only financial network in brokered freight during the most challenging freight cycle since the 1980s[14](index=14&type=chunk) - Future focus will be on serving customers excellently, growing revenue, and expanding margins to create long-term shareholder value[14](index=14&type=chunk) - The company will continue to expand its network value and is committed to building a leaner enterprise[14](index=14&type=chunk) [Segment Performance](index=5&type=section&id=Segment%20Performance) [Payments](index=5&type=section&id=Payments) Payments revenue grew **7.4%** quarter-over-quarter to **$18.5 million** in Q3, with EBITDA margin improving to **16.8%** and achieving positive pre-tax operating profit - Q3 Payments revenue grew **7.4%** quarter-over-quarter to **$18.5 million**, with EBITDA margin improving to **16.8%** and achieving positive pre-tax operating profit for the first time[15](index=15&type=chunk)[16](index=16&type=chunk)[86](index=86&type=chunk) Payments Key Operating Data | Metric | September 30, 2025 (3Q) | June 30, 2025 (2Q) | QoQ Change (%) | YoY Change (%) | | :----------------------- | :---------------------- | :----------------- | :------------- | :------------- | | Invoice Volume | 8,826,848 | 8,500,565 | 3.8% | 40.6% | | Payment Volume | $10,662,418,000 | $10,081,206,000 | 5.8% | 50.4% | | Network Invoice Volume | 1,057,606 | 1,004,603 | 5.3% | 59.8% | | Network Payment Volume | $1,696,817,000 | $1,579,662,000 | 7.4% | 59.6% | | Total Revenue | $18,503,000 | $17,231,000 | 7.4% | 24.4% | | LoadPay Accounts | 4,421 | 2,367 | 86.8% | 6701.5% | | EBITDA Margin | 16.8% | 13.9% | 2.9% | 3260.0% | [Financial and Operational Performance_Payments](index=5&type=section&id=Financial%20and%20Operational%20Performance_Payments) - Q3 Payments revenue grew **7.4%**, with EBITDA margin improving to **16.8%** and achieving positive pre-tax operating profit for the first time[15](index=15&type=chunk) - Network payment volume increased by **59.6%** year-over-year, reaching **$1.697 billion**[16](index=16&type=chunk) [Pricing Changes & Revenue Growth Forecasts](index=5&type=section&id=Pricing%20Changes%20%26%20Revenue%20Growth%20Forecasts) - Payments revenue growth was primarily driven by new customer additions, with pricing strategies expected to accelerate revenue growth in 2025 Q4 and 2026 Q1[16](index=16&type=chunk) - Fee revenue accounted for approximately **54%** of this quarter's growth and is expected to continue leading growth, with the payment fee collection rate increasing from **28.5%** to **30.8%**[20](index=20&type=chunk) - The company estimates an additional **$42 million** in annual revenue if existing customers fully utilize audit functions and pay at standard pricing[23](index=23&type=chunk) [LoadPay Update](index=7&type=section&id=LoadPay%20Update) - **2,054** new LoadPay accounts were added in Q3, nearly doubling the total to **4,421**[26](index=26&type=chunk) - LoadPay is expanding its capabilities, beginning to connect limited factoring capacity, and plans to introduce lane rate insights, savings goals, and cash advances to become a comprehensive financial partner for carriers[27](index=27&type=chunk) - The company reiterates LoadPay's addressable market is approximately **$100 million**[25](index=25&type=chunk) [Additional Segment Financial Analysis_Payments](index=9&type=section&id=Additional%20Segment%20Financial%20Analysis_Payments) - Payments revenue CAGR was approximately **27.8%** over the past two years and **102%** over the past six years, despite half of that period being in the longest trucking recession in history[28](index=28&type=chunk) [Factoring](index=10&type=section&id=Factoring) Factoring's Q3 adjusted revenue grew **0.3%** quarter-over-quarter, with pre-tax operating profit of **$9.3 million** and an adjusted pre-tax operating margin of **23.5%** - Q3 Factoring adjusted revenue grew **0.3%** quarter-over-quarter, with pre-tax operating profit of **$9.3 million** and an adjusted pre-tax operating margin of **23.5%**[34](index=34&type=chunk) Factoring Key Operating Data | Metric | September 30, 2025 (3Q) | June 30, 2025 (2Q) | QoQ Change (%) | YoY Change (%) | | :--------------------- | :---------------------- | :----------------- | :------------- | :------------- | | Invoice Volume | 1,735,860 | 1,697,851 | 2.2% | 17.2% | | Purchased Volume | $2,997,895,000 | $2,873,659,000 | 4.3% | 14.9% | | Average Invoice Size | $1,690 | $1,663 | 1.6% | (2.0)% | | Discount Rate | 1.29% | 1.37% | (5.8)% | (7.9)% | | Operating Margin | 20.71% | 48.46% | (57.3)% | (1.3)% | [Financial and Operational Performance_Factoring](index=10&type=section&id=Financial%20and%20Operational%20Performance_Factoring) - Q3 Factoring adjusted revenue grew **0.3%** quarter-over-quarter, with pre-tax operating profit of **$9.3 million** and an adjusted pre-tax operating margin of **23.5%**[34](index=34&type=chunk) - Total purchased volume reached **$3 billion**, increasing **4.3%** quarter-over-quarter and **14.9%** year-over-year[38](index=38&type=chunk)[39](index=39&type=chunk) - The average freight invoice price was **$1,690**, higher than Q2 but lower than the prior year period[34](index=34&type=chunk)[39](index=39&type=chunk) [Automation & AI Update](index=14&type=section&id=Automation%20%26%20AI%20Update) - Automated cash posting was launched in Q3, improving finance department efficiency by approximately **20%**[42](index=42&type=chunk) - An automated bill reminder system was introduced, with test results showing it can handle **10 times** the number of invoices as before[43](index=43&type=chunk) - The instant decision model achieved a **58%** pass rate in the O/O (owner-operator) segment, and the company is working to improve the model to support larger fleet operations[44](index=44&type=chunk) [FaaS Update](index=14&type=section&id=FaaS%20Update) - Factoring-as-a-Service (FaaS) business is growing slowly and beginning to reach an adoption inflection point[46](index=46&type=chunk) - The company and its partners are committed to advancing FaaS technology to provide a more seamless, efficient, and intuitive customer experience, laying the groundwork for meaningful future growth[46](index=46&type=chunk) [Intelligence](index=14&type=section&id=Intelligence) Intelligence segment Q3 total revenue was **$2.3 million**, with an average contract value (ACV) of **$43 thousand** and a gross margin of **89%** - Q3 Intelligence segment total revenue was **$2.3 million**, with an average contract value (ACV) of **$43 thousand** and a gross margin of **89%**[47](index=47&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - The company launched an integrated pricing and performance intelligence solution, combining Greenscreens.ai and the ISO platform, to provide AI-driven predictive analytics and capacity procurement recommendations for freight brokers[49](index=49&type=chunk) [Financial and Operational Performance_Intelligence](index=14&type=section&id=Financial%20and%20Operational%20Performance_Intelligence) - Q3 Intelligence segment total revenue was **$2.3 million**, with an average contract value (ACV) of **$43 thousand** and a gross margin of **89%**[47](index=47&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Product Roadmap](index=14&type=section&id=Product%20Roadmap) - The company launched an integrated pricing and performance intelligence solution, unifying pricing, performance, and capacity procurement, offering AI-driven predictive analytics and capacity procurement recommendations[49](index=49&type=chunk) - Plans include launching intelligence solutions for shippers in the second half of 2026, accumulating data through pilot programs[51](index=51&type=chunk) - Approximately **400** Payments network customers have not yet adopted Intelligence solutions, with more existing Payments customers expected to become Intelligence customers in 2026[49](index=49&type=chunk) [Partnership with Highway on Trusted Freight Exchange](index=15&type=section&id=Partnership%20with%20Highway%20on%20Trusted%20Freight%20Exchange) - The company continues its partnership with Highway to power the Trusted Freight Exchange (TFX), a secure public freight platform alternative[52](index=52&type=chunk) - Within TFX, carriers can leverage the company's intelligence rate data for market rate ranges and understand payment terms for specific freight through the payments platform[53](index=53&type=chunk) [Banking](index=15&type=section&id=Banking) The Banking segment's Q3 operating income increased by **$0.7 million** to **$27.1 million**, a **2.7%** quarter-over-quarter rise, driven by lower noninterest and credit loss expenses - Q3 Banking segment operating income increased by **$0.7 million** to **$27.1 million**, a **2.7%** quarter-over-quarter increase[54](index=54&type=chunk) - Growth was primarily attributed to lower noninterest and credit loss expenses, with a slight increase in revenue[54](index=54&type=chunk) [Financial and Operational Performance_Banking](index=15&type=section&id=Financial%20and%20Operational%20Performance_Banking) - Q3 Banking segment operating income increased by **$0.7 million** to **$27.1 million**, a **2.7%** quarter-over-quarter increase[54](index=54&type=chunk) [Credit Metrics Update](index=15&type=section&id=Credit%20Metrics%20Update) - The Tricolor bankruptcy event led to a slight negative shift in credit metrics, but the company believes its loan portfolio is low-risk and well-collateralized[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - Total non-performing loans as a percentage of total loans increased by **0.16%** to **1.36%** - Total classified assets increased by **$8.2 million** - Delinquent loans as a percentage of total loans improved by **0.30%** to **1.91%**[60](index=60&type=chunk) [Freight Market Update](index=15&type=section&id=Freight%20Market%20Update) [State of the US Trucking Market](index=15&type=section&id=State%20of%20the%20US%20Trucking%20Market) The US trucking industry remains in a prolonged adjustment phase due to excess capacity, leading to stagnant rates and squeezed carrier profits - The US trucking industry is in a prolonged adjustment phase due to excess capacity from the post-pandemic boom, resulting in stagnant freight rates and pressure on carrier profits[58](index=58&type=chunk) - The FMCSA's temporary final ruling on non-domiciled Commercial Driver's Licenses (CDLs) is expected to remove approximately **200,000** non-domiciled CDL holders from the market over the next two years, potentially significantly impacting the for-hire freight market and restoring pricing power to small US carriers[61](index=61&type=chunk) - Small carriers have persisted longer than expected in the downturn due to lower operating costs and greater flexibility[34](index=34&type=chunk)[37](index=37&type=chunk) [Expense Forecast & Closing Thoughts](index=17&type=section&id=Expense%20Forecast%20%26%20Closing%20Thoughts) [Expense Forecast & Closing Thoughts_Summary](index=17&type=section&id=Expense%20Forecast%20%26%20Closing%20Thoughts_Summary) Q3 saw non-recurring expenses from restructuring, but core expense run-rate is improving, with Q4 noninterest expenses projected at **$96.5 million** - Q3 restructuring efforts resulted in non-recurring expenses, but the core expense run-rate is improving[62](index=62&type=chunk) - Q4 noninterest expenses are projected to be approximately **$96.5 million**, with further efficiency gains planned for 2026[62](index=62&type=chunk) - The company is committed to strategic investments that help broker clients ensure legitimate capacity, help carriers partner with legitimate and solvent payers, and drive continuous innovation[63](index=63&type=chunk)[64](index=64&type=chunk) [Company Information](index=21&type=section&id=Company%20Information) [Conference Call Information](index=21&type=section&id=Conference%20Call%20Information) The company will host a conference call on Thursday, October 16, 2025, at 9:30 AM CT to review financial results - The company will host a conference call on Thursday, October 16, 2025, at 9:30 AM CT to review financial results[70](index=70&type=chunk) - Investors can access the live webcast or archive via a designated link or the company's investor relations website[71](index=71&type=chunk) [About Triumph Financial](index=21&type=section&id=About%20Triumph%20Financial) Triumph Financial, Inc. (NYSE: TFIN) is a financial and technology company focused on payments, factoring, intelligence, and banking services to modernize freight transactions - Triumph Financial, Inc. (NYSE: TFIN) is a financial and technology company focused on payments, factoring, intelligence, and banking services, aiming to modernize and simplify freight transactions[72](index=72&type=chunk) - Headquartered in Dallas, Texas, the company's brands include Triumph, TBK Bank, and LoadPay[72](index=72&type=chunk) [Forward-Looking Statements](index=21&type=section&id=Forward-Looking%20Statements) This letter contains forward-looking statements regarding future events or performance, which are not historical facts and may differ materially from actual results - This letter contains forward-looking statements concerning expectations, beliefs, and plans for future events or performance, which are not historical facts[72](index=72&type=chunk) - These statements rely on assumptions, data, or methods that may be incorrect or imprecise, and actual results could differ materially from forward-looking statements[72](index=72&type=chunk)[73](index=73&type=chunk) - The company undertakes no obligation to update any forward-looking statements, except as required by applicable law[73](index=73&type=chunk) [Non-GAAP Financial Measures Introduction](index=22&type=section&id=Non-GAAP%20Financial%20Measures%20Introduction) This letter includes non-GAAP financial measures to supplement GAAP metrics, with reconciliations provided at the end of the letter - This letter includes certain non-GAAP financial measures intended to supplement, not substitute, comparable GAAP metrics[74](index=74&type=chunk) - Reconciliations of non-GAAP to GAAP financial measures are provided at the end of this letter[74](index=74&type=chunk) [Non-Recurring Items Summary](index=18&type=section&id=Non-Recurring%20Items%20Summary) [Noninterest Expense Adjustments](index=18&type=section&id=Noninterest%20Expense%20Adjustments) The company adjusted noninterest expenses in Q2 and Q3 to exclude non-recurring items like restructuring costs, USPS legal fee recovery, and new HQ termination fees Noninterest Expense Adjustments (in millions of dollars) | (in millions of dollars) | 2Q25 Reported | 3Q25 Reported | 2Q25 Adjusted | 3Q25 Adjusted | | :----------------------- | :------------ | :------------ | :------------ | :------------ | | Factoring | 14.1 | 19.1 | 19.5 | 18.0 | | Payments | 16.8 | 17.1 | 16.8 | 16.6 | | Intelligence | 7.7 | 5.9 | 4.7 | 5.7 | | Banking | 32.0 | 31.7 | 32.0 | 31.2 | | Corporate | 30.2 | 29.9 | 28.1 | 27.8 | | Total | 100.8 | 103.7 | 101.1 | 99.3 | - Adjustment items include restructuring costs, USPS legal fee recovery, Greenscreens transaction costs, other legal settlements, and new HQ termination fees[65](index=65&type=chunk) [Revenue Adjustments](index=19&type=section&id=Revenue%20Adjustments) The company adjusted Q2 and Q3 total revenue to exclude non-recurring items such as intersegment noninterest income and USPS fee collection Total Revenue Adjustments (in millions of dollars) | (in millions of dollars) | 2Q25 Reported | 3Q25 Reported | 2Q25 Adjusted | 3Q25 Adjusted | | :--------------------------------- | :------------ | :------------ | :------------ | :------------ | | Factoring | 40.8 | 39.7 | 38.7 | 38.8 | | Payments | 17.2 | 18.5 | 16.8 | 18.2 | | Intelligence | 1.7 | 2.3 | 1.7 | 2.3 | | Total Transportation Revenue | 59.7 | 60.5 | 57.2 | 59.3 | | Annualized Adjusted Total Transportation Revenue | 228.8 | 237.2 | | | - Adjustment items primarily include intersegment noninterest income and USPS fee collection[66](index=66&type=chunk) [2Q Non-Recurring Items](index=19&type=section&id=2Q%20Non-Recurring%20Items) Q2 non-recurring items had a net **$5.271 million** impact on pre-tax operating income, primarily from the USPS settlement and other non-recurring expenses 2Q25 Impact of Non-Recurring Items on Pre-Tax Operating Income | Broad Category | Line Item | Segment | Description | $ Impact | | :------------------ | :------------------------ | :----------- | :------------------------------------------------- | :----------- | | Interest income | Interest income and fees | Factoring | USPS - Collection of fees | $1,213,000 | | Noninterest expense | Professional Fees | Factoring | USPS - Recovery of legal expense | $7,376,000 | | Credit loss expense | Credit loss expense | Factoring | USPS - ACL Recovery | $3,773,000 | | **Net impact of USPS settlement** | | | | **$12,362,000** | | Noninterest expense | Professional Fees | Intelligence | Greenscreens transaction costs | $(3,024,000) | | Noninterest expense | Other Noninterest Expense | Factoring | Other Legal Settlements | $(2,000,000) | | Noninterest expense | Other & Amortization of intangibles | Corporate | New HQ termination fees and accelerated amortization | $(2,067,000) | | **Net impact of other non-recurring items** | | | | **$(7,091,000)** | | **Pre-tax operating income impact** | | | | **$5,271,000** | [Footnotes on Network Engagement & Invoice Sizes](index=19&type=section&id=Footnotes%20on%20Network%20Engagement%20%26%20Invoice%20Sizes) Network engagement, defined as freight volume processed through the company's products, is a key metric for market density and data asset growth - Network engagement is defined as freight volume processed through the company's payments, audit, full AP automation, and rate intelligence products, serving as a key metric for broker market density and data asset growth[67](index=67&type=chunk) - The increase in network depth this quarter is primarily attributed to the inclusion of all broker-related transaction volume from Triumph Factoring[67](index=67&type=chunk) - The average invoice size for Payments is typically smaller than Factoring, as Factoring primarily handles long-haul trucking invoices, while Payments covers all freight broker invoices, including smaller LTL and parcel shipments[69](index=69&type=chunk) [Financial Statements & Key Metrics](index=23&type=section&id=Financial%20Statements%20%26%20Key%20Metrics) [Financial Highlights](index=23&type=section&id=Financial%20Highlights) As of September 30, 2025, total assets were **$6,357,149 thousand**, with net income of **$907 thousand** and diluted EPS of **$0.04** September 30, 2025 Financial Highlights (in thousands of dollars) | Metric | September 30, 2025 | | :---------------------------------------- | :----------------- | | Total assets | $6,357,149 | | Loans held for investment | $4,986,922 | | Deposits | $4,955,246 | | Net income attributable to common stockholders | $907 | | Annualized return on average assets | 0.11% | | Annualized return on average common equity | 0.41% | | Yield on loans | 8.17% | | Cost of interest-bearing deposits | 2.36% | | Net interest margin | 6.29% | | Non-performing loans to total loans | 1.36% | | Non-performing assets to total assets | 1.10% | | ACL to non-performing loans | 49.53% | | Tier 1 capital to average assets | 9.55% | | Common equity tier 1 capital to risk-weighted assets | 8.65% | | Book value per share | $36.79 | | Diluted earnings per share | $0.04 | [Consolidated Balance Sheet](index=24&type=section&id=Consolidated%20Balance%20Sheet) As of September 30, 2025, total assets were **$6,357,149 thousand**, with net loans of **$4,953,373 thousand** and total liabilities of **$5,437,816 thousand** Consolidated Balance Sheet Summary (in thousands of dollars) | Metric | September 30, 2025 | | :--------------------------- | :----------------- | | **Assets** | | | Total cash and cash equivalents | $147,222 | | Net loans | $4,953,373 | | Goodwill | $353,898 | | Total assets | $6,357,149 | | **Liabilities** | | | Total deposits | $4,955,246 | | Federal Home Loan Bank advances | $280,000 | | Total liabilities | $5,437,816 | | **Equity** | | | Total stockholders' equity | $919,333 | | Total liabilities and equity | $6,357,149 | [Consolidated Statement of Income](index=25&type=section&id=Consolidated%20Statement%20of%20Income) For the three months ended September 30, 2025, net interest income was **$87,833 thousand**, with total noninterest expense of **$103,714 thousand**, resulting in **$907 thousand** net income attributable to common stockholders Consolidated Statement of Income Summary (in thousands of dollars) | Metric | Three Months Ended September 30, 2025 | | :---------------------------------------- | :------------------------------------ | | Total interest income | $108,940 | | Total interest expense | $21,107 | | Net interest income | $87,833 | | Provision for credit losses | $4,284 | | Net interest income after provision for credit losses | $83,549 | | Total noninterest income | $21,448 | | Total noninterest expense | $103,714 | | Net income before income taxes | $1,283 | | Net income | $1,708 | | Net income attributable to common stockholders | $907 | [Earnings Per Share](index=26&type=section&id=Earnings%20Per%20Share) For the three months ended September 30, 2025, basic and diluted earnings per share were both **$0.04** Earnings Per Share Summary | Metric | Three Months Ended September 30, 2025 | | :---------------------------------------- | :------------------------------------ | | Net income attributable to common stockholders | $907 | | Weighted average common shares outstanding | 23,752,331 | | Basic earnings per share | $0.04 | | Diluted net income attributable to common stockholders | $907 | | Diluted weighted average common shares outstanding | 23,924,858 | | Diluted earnings per share | $0.04 | [Loans Held for Investment](index=27&type=section&id=Loans%20Held%20for%20Investment) As of September 30, 2025, total loans held for investment amounted to **$4,986,922 thousand**, including **$1,424,631 thousand** in factoring receivables Loans Held for Investment Summary (in thousands of dollars) | Loan Type | September 30, 2025 | | :-------------------- | :----------------- | | Commercial real estate | $769,314 | | Commercial | $1,144,872 | | Factoring receivables | $1,424,631 | | Mortgage warehouse | $1,202,445 | | Total loans | $4,986,922 | | Total bank loans held for investment | $3,559,118 | [Segment Operating Results](index=28&type=section&id=Segment%20Operating%20Results) For the three months ended September 30, 2025, the Banking segment reported **$27,075 thousand** in operating income, while the Intelligence segment had an operating loss of **$3,598 thousand** Segment Operating Income (in thousands of dollars) | Segment | Three Months Ended September 30, 2025 | | :--------- | :------------------------------------ | | Banking | $27,075 | | Factoring | $8,212 | | Payments | $450 | | Intelligence | $(3,598) | | Total operating income | $1,283 | [Factoring Segment Details](index=30&type=section&id=Factoring%20Segment%20Details) As of September 30, 2025, Factoring receivables ending balance was **$1,193,849 thousand**, with total purchased receivables of **$2,997,895 thousand** and an operating margin of **20.71%** Factoring Segment Details (in thousands of dollars) | Metric | September 30, 2025 | | :--------------------- | :----------------- | | Factoring receivables ending balance | $1,193,849,000 | | Total purchased receivables | $2,997,895,000 | | Number of invoices purchased | 1,735,860 | | Average invoice size | $1,727 | | Operating margin | 20.71% | [Payments Segment Details](index=31&type=section&id=Payments%20Segment%20Details) As of September 30, 2025, Payments segment total factoring receivables ending balance was **$230,782 thousand**, with total revenue of **$18,503 thousand** and an EBITDA margin of **16.8%** Payments Segment Details (in thousands of dollars) | Metric | September 30, 2025 | | :--------------------- | :----------------- | | Total factoring receivables ending balance | $230,782,000 | | Total revenue | $18,503,000 | | Pre-tax operating income (loss) | $450,000 | | EBITDA margin | 16.8% | | Number of invoices processed | 8,826,848 | | Amount of payments processed | $10,662,418,000 | [Intelligence Segment Details](index=32&type=section&id=Intelligence%20Segment%20Details) As of September 30, 2025, Intelligence segment revenue was **$2,338 thousand**, with a gross profit of **$2,072 thousand** and a gross margin of **89%** Intelligence Segment Details (in thousands of dollars) | Metric | September 30, 2025 | | :--------------------------- | :----------------- | | Revenue | $2,338,000 | | Selling, general and administrative expenses | $5,670,000 | | Pre-tax operating income (loss) | $(3,598,000) | | Gross margin | 89% | [Deposits Summary](index=33&type=section&id=Deposits%20Summary) As of September 30, 2025, total deposits were **$4,955,246 thousand**, including **$2,095,017 thousand** in noninterest-bearing demand deposits Deposits Summary (in thousands of dollars) | Deposit Type | September 30, 2025 | | :------------------------ | :----------------- | | Noninterest-bearing demand | $2,095,017 | | Interest-bearing demand | $668,576 | | Money market | $580,748 | | Savings | $522,469 | | Time deposits | $228,415 | | Brokered time deposits | $705,772 | | Other brokered deposits | $115,116 | | Total deposits | $4,955,246 | [Net Interest Margin](index=34&type=section&id=Net%20Interest%20Margin) For the three months ended September 30, 2025, net interest income was **$87,833 thousand**, with an interest rate spread of **5.22%** and a net interest margin of **6.29%** Net Interest Margin Summary (in thousands of dollars) | Metric | Three Months Ended September 30, 2025 | | :------------------------ | :------------------------------------ | | Average interest-earning assets | $5,537,450 | | Average interest-bearing liabilities | $3,227,428 | | Net interest income | $87,833 | | Interest rate spread | 5.22% | | Net interest margin | 6.29% | [Loan Portfolio Additional Information](index=35&type=section&id=Loan%20Portfolio%20Additional%20Information) For the three months ended September 30, 2025, average bank loans were **$3,484,400 thousand**, with an average yield on total loans of **8.17%** Loan Portfolio Additional Information (in thousands of dollars) | Metric | Three Months Ended September 30, 2025 | | :------------------------ | :------------------------------------ | | Average bank loans | $3,484,400 | | Average factoring receivables | $1,167,092 | | Average payments receivables | $213,386 | | Average yield on total loans | 8.17% | [Non-GAAP Financial Measures & Definitions](index=35&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Definitions) The company uses non-GAAP financial measures like tangible common equity and tangible book value per share to provide a clearer view of operational performance - Tangible common stockholders' equity: Common stockholders' equity less goodwill and other intangible assets - Total tangible assets: Total assets less goodwill and other intangible assets - Tangible book value per share: Tangible common stockholders' equity divided by total common shares outstanding - Tangible common stockholders' equity ratio: Tangible common stockholders' equity divided by total tangible assets - Return on average tangible common equity: Net income attributable to common stockholders divided by average tangible common stockholders' equity[94](index=94&type=chunk)[97](index=97&type=chunk) Non-GAAP Financial Measures Summary (in thousands of dollars) | Metric | September 30, 2025 | | :---------------------------------------- | :----------------- | | Average tangible common stockholders' equity | $472,434 | | Return on average tangible common equity | 0.76% | | Net noninterest expense to average assets | 5.08% | | Tangible common stockholders' equity | $468,144 | | Tangible book value per share | $19.70 | | Period-end tangible assets | $5,950,960 | | Tangible common stockholders' equity ratio | 7.87% |

Core Insights - Triumph Financial, Inc. has released its third quarter 2025 financial results, which are available on the company's website [1] - A conference call to discuss the financial results will be held on October 16, 2025, at 9:30 a.m. central time [1] Company Overview - Triumph Financial is a financial and technology company focused on modernizing and simplifying freight transactions through payments, factoring, intelligence, and banking [3]

Core Viewpoint - Triumph Financial, Inc. is set to release its third quarter financial results and management commentary on October 15, 2025, after market close [1] Group 1: Financial Results Announcement - The financial results and management commentary will be available on the Company's Investor Relations website [1] - A conference call to review the financial results will take place on October 16, 2025, at 9:30 a.m. central time [2] - The live video conference can be accessed through a specific link or via the Company's IR website, with an archive available afterward [3] Group 2: Company Overview - Triumph Financial, Inc. (NYSE: TFIN) is a financial and technology company focused on modernizing freight transactions through payments, factoring, intelligence, and banking [4] - The company is headquartered in Dallas, Texas, and its portfolio includes brands such as Triumph, TBK Bank, and LoadPay [4]

Core Insights - Triumph has launched an integrated Pricing and Performance Intelligence solution aimed at unifying pricing, performance, and capacity sourcing for freight brokers [1][5] - The new solution incorporates carrier capacity and performance benchmarks from the Triumph Network, allowing brokers to enhance pricing decisions with real-time data [2][4] - Triumph's strategy includes leveraging recent acquisitions to strengthen its capacity-centric Intelligence offerings [3] Company Overview - Triumph (NYSE: TFIN) is a financial and technology company focused on modernizing freight transactions through payments, factoring, intelligence, and banking solutions [6] - The company is headquartered in Dallas, Texas, and its portfolio includes Triumph, TBK Bank, and LoadPay [6] Product Features - The Pricing and Performance Intelligence solution is designed to improve efficiency, reduce risk, and scale operations for freight brokers [4][8] - Key features include a unified interface for rate, performance, and capacity data, as well as predictive analytics to support carrier relationships and spot coverage [8]

Core Insights - Highway has launched the Trusted Freight Exchange (TFX), a secure digital freight exchange designed exclusively for verified carriers and vetted brokers [1][2] - TFX integrates identity verification, compliance, pricing, and payment functionalities into a single platform, enhancing trust and efficiency in freight transactions [2][3] - The platform aims to eliminate issues such as impersonation, double brokering, fraud, non-payment, and poor visibility, establishing a reliable foundation for brokers and carriers [2][3] Company Overview - Highway specializes in Carrier Identity® solutions, helping freight brokers reduce fraud and streamline the digital booking process [4] - The company emphasizes transparency, trust, and truth, equipping brokers with necessary data to enhance service delivery and business growth [4] Industry Context - The launch of TFX represents a significant milestone in the freight industry, setting a new standard for identity-first infrastructure in freight transactions [3] - Triumph, a financial and technology company, collaborates with Highway to provide payment, factoring, and intelligence solutions that modernize freight transactions [5]