PART I — FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and notes for the period ended June 30, 2020 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $5.62 billion, driven by loan growth, while liabilities increased due to higher deposits and borrowings Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$5,617,493** | **$5,060,297** | | Total cash and cash equivalents | $437,064 | $197,880 | | Loans, net of allowance | $4,338,698 | $4,165,420 | | Goodwill | $158,743 | $158,743 | | **Total Liabilities** | **$4,960,622** | **$4,423,707** | | Total deposits | $4,062,332 | $3,789,906 | | Paycheck Protection Program Liquidity Facility | $223,809 | $0 | | **Total Stockholders' Equity** | **$656,871** | **$636,590** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2020 net income rose due to a one-time gain, while year-to-date income fell sharply on higher credit loss expense Consolidated Income Statement Summary (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $64,251 | $63,419 | $126,751 | $124,730 | | Credit Loss Expense | $13,609 | $3,681 | $33,907 | $4,695 | | Noninterest Income | $20,029 | $7,623 | $27,506 | $15,161 | | Noninterest Expense | $52,726 | $50,704 | $107,479 | $99,270 | | **Net Income** | **$13,440** | **$12,730** | **$8,990** | **$27,518** | | **Diluted EPS** | **$0.56** | **$0.48** | **$0.37** | **$1.03** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Financing activities provided significant cash inflow, offsetting cash used in investing, resulting in a net cash increase Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $20,557 | $33,826 | | Net cash provided by (used in) investing activities | ($313,899) | ($226,280) | | Net cash provided by (used in) financing activities | $532,526 | $166,820 | | **Net increase (decrease) in cash and cash equivalents** | **$239,184** | **($25,634)** | [Condensed Notes to Consolidated Financial Statements](index=11&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the adoption of CECL, the significant impact of COVID-19, a key divestiture, and a subsequent acquisition - The company adopted ASU 2016-13 (CECL) on January 1, 2020, resulting in a net reduction to retained earnings of **$1.77 million**[102](index=102&type=chunk)[103](index=103&type=chunk) - The COVID-19 pandemic has had a significant impact, leading the company to implement payment deferral programs for borrowers on loans totaling **$572 million** as of June 30, 2020[33](index=33&type=chunk)[41](index=41&type=chunk) - The company originated 1,937 Paycheck Protection Program (PPP) loans with a book value of **$219 million** as of June 30, 2020[42](index=42&type=chunk)[95](index=95&type=chunk) - On June 30, 2020, the company sold the assets of its Triumph Premium Finance (TPF) division for total consideration of $94.5 million, resulting in a net gain of **$9.8 million**[29](index=29&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - Subsequent to quarter-end, the company acquired transportation factoring assets and identified that approximately **$66 million** were advances for services not yet performed[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results, highlighting the impact of COVID-19, the sale of a division, and the shift to the CECL model [Overview and Recent Developments](index=54&type=section&id=Overview%20and%20Recent%20Developments) Key developments include the TPF division sale, a preferred stock offering, and a problematic acquisition of TFS assets - On July 8, 2020, the company acquired transportation factoring assets and discovered approximately **$66.0 million** were advances for unperformed services[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - The company sold its Triumph Premium Finance (TPF) division on June 30, 2020, resulting in a gain on sale of **$9.8 million**[277](index=277&type=chunk)[288](index=288&type=chunk) - On June 19, 2020, the company issued **$45.0 million** of 7.125% Series C Preferred Stock, with net proceeds of $42.4 million[290](index=290&type=chunk) - The company completed its **$50.0 million** stock repurchase program in Q1 2020, having repurchased 871,319 shares for $35.6 million during the quarter[291](index=291&type=chunk) [Impact of COVID-19](index=56&type=section&id=Impact%20of%20COVID-19) The pandemic materially increased credit loss provisions and prompted significant loan deferrals and PPP lending - The company is executing a payment deferral program for clients, with 1,320 deferrals on outstanding loan balances of **$572 million** as of June 30, 2020[307](index=307&type=chunk) - The company originated 1,937 PPP loans totaling **$219 million**, receiving approximately $7.3 million in fees from the SBA[308](index=308&type=chunk) - The ACL calculation and provision for credit losses were **significantly impacted** by changes in forecasted economic conditions due to the pandemic[297](index=297&type=chunk) - The company identified specific loan exposures considered 'at-risk' due to the pandemic: Retail Lending (**$179.9M**), Energy Lending (**$86.6M**), and Hospitality Lending (**$129.4M**)[309](index=309&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) [Results of Operations](index=65&type=section&id=Results%20of%20Operations) Q2 2020 net income was boosted by a one-time gain, masking a surge in credit loss expense and margin compression - Q2 2020 net income of $13.4 million included a **$9.8 million gain** on the sale of the TPF division; excluding this, adjusted net income was $6.1 million[331](index=331&type=chunk)[332](index=332&type=chunk) - Credit loss expense for Q2 2020 surged to **$13.6 million** from $3.7 million in Q2 2019, an increase of 269.7%, due to deteriorating economic forecasts[346](index=346&type=chunk)[350](index=350&type=chunk) - Net interest margin decreased by **88 basis points to 5.11%** in Q2 2020, driven by a 143 basis point reduction in loan yield[341](index=341&type=chunk)[342](index=342&type=chunk) - For the six months ended June 30, 2020, total credit loss expense was **$33.9 million**, a 622.2% increase from the prior-year period[391](index=391&type=chunk) [Financial Condition](index=86&type=section&id=Financial%20Condition) Total assets grew to $5.62 billion, while credit quality deteriorated with rising nonperforming loans and a larger ACL Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2020 | Dec 31, 2019 | % Change | | :--- | :--- | :--- | :--- | | Commercial real estate | $910,261 | $1,046,961 | (13.1%) | | Commercial | $1,518,656 | $1,342,683 | 13.1% | | Mortgage warehouse | $876,785 | $667,988 | 31.3% | | Factored receivables | $561,576 | $619,986 | (9.4%) | | **Total Loans** | **$4,393,311** | **$4,194,512** | **4.7%** | Nonperforming Assets (in thousands) | Category | June 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total nonperforming loans | $55,924 | $40,613 | | Held to maturity securities | $8,140 | $0 | | Other real estate owned, net | $1,962 | $3,009 | | **Total nonperforming assets** | **$67,166** | **$44,098** | | **NPLs to Total Loans** | **1.27%** | **0.97%** | - The Allowance for Credit Losses (ACL) on loans increased to **$54.6 million (1.24% of total loans)** at June 30, 2020, from $29.1 million (0.69% of total loans) at year-end[443](index=443&type=chunk)[444](index=444&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=101&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company's primary market risk is interest rate volatility, with an asset-sensitive balance sheet position Simulated Change in Net Interest Income (NII) | Rate Shock | NII Change (Next 12 Months) - June 30, 2020 | NII Change (Next 12 Months) - Dec 31, 2019 | | :--- | :--- | :--- | | +200 bps | 8.6% | 6.3% | | +100 bps | 3.9% | 3.1% | | Flat rates | 0.0% | 0.0% | | -100 bps | (1.5%) | (3.3%) | Simulated Change in Economic Value of Equity (EVE) | Rate Shock | EVE Change (%) - June 30, 2020 | EVE Change (%) - Dec 31, 2019 | | :--- | :--- | :--- | | +200 bps | 28.2% | 13.4% | | +100 bps | 15.7% | 7.5% | | Flat rates | 0.0% | 0.0% | | -100 bps | (19.4%) | (9.9%) | [Controls and Procedures](index=102&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[501](index=501&type=chunk) - **No changes** occurred during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[502](index=502&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=102&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any legal proceedings expected to have a material adverse effect on its business - The company states it is **not presently party** to any legal proceedings that would have a material adverse effect on its business or financial condition[504](index=504&type=chunk) [Risk Factors](index=102&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor related to the COVID-19 pandemic has been added to existing company risks - A **new material risk factor** has been added concerning the ongoing COVID-19 pandemic, which could have a material adverse effect on the business[505](index=505&type=chunk) - Potential adverse impacts from COVID-19 include **increased credit losses**, declines in collateral values, third-party disruptions, and increased fraud risk[507](index=507&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=103&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the reporting period - The report indicates '**None**' for this item[511](index=511&type=chunk) [Exhibits](index=104&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL data

Financial Data and Key Metrics Changes - For Q2 2020, the company reported net income of $13.4 million or $0.56 per diluted share, with adjusted diluted earnings per share at $0.25 after accounting for the gain on sale of Triumph Premium Finance assets [7] - Total credit loss expense decreased to $13.6 million from $20.3 million in the prior quarter, with credit loss expense on funded loans at $11 million [8] - The allowance for credit loss (ACL) increased to $54.6 million, representing 1.24% of loans held for investment, and 1.77% when excluding certain loan types [10] Business Line Data and Key Metrics Changes - Triumph Business Capital's factoring revenue was $21.5 million, with a 12% decrease in dollar volume of invoices purchased compared to Q2 2019 [30] - The loan portfolio experienced charge-offs of $1.1 million, with past due loans decreasing by 49 basis points to 1.5% of total loans [11] - Non-interest-bearing deposits grew by $275 million, now accounting for 28% of total deposits, a significant increase from the previous year [13] Market Data and Key Metrics Changes - The company forecasts unemployment to remain between 9% to 10% over the next four quarters, with expectations of depressed retail sales [9] - The mortgage warehouse segment saw an increase in average balances by $203 million over Q1, reaching $716 million [15] Company Strategy and Development Direction - The company aims to focus on completing PPP loan forgiveness, unwinding loan deferrals, and managing credit risk while pursuing new relationships across lending units [28] - TriumphPay is expected to reach profitability in the latter half of 2021, with a run rate payment volume target of $7 billion or more by year-end [39] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic forecast has worsened, impacting credit loss expectations and overall business performance [9][72] - The company anticipates a recovery in the transportation factoring portfolio, with expectations for margin expansion as the business rebounds [35] Other Important Information - The company completed the asset sale of Triumph Premium Finance, realizing a pre-tax net gain of $9.8 million [19] - Service charge fees were below historical levels by approximately $1 million in Q2, but this is not expected to continue in Q3 [18] Q&A Session Summary Question: Update on Triumph Business Capital and invoice purchases - Management indicated that it is difficult to set specific goals due to the correlation with real-time economic conditions, but noted that freight markets appear to be improving [45] Question: Loan growth expectations - Management expressed hope for disproportionate growth in the transportation business, while acknowledging that overall loan growth may not be significant [47] Question: TriumphPay integration progress - Management reported that COVID-19 heightened awareness of TriumphPay's value, with several top brokers in various stages of integration [49] Question: Operating expenses and expectations for Q3 - Management expects Q3 expenses to increase marginally from Q2, influenced by ongoing uncertainties and growth in TriumphPay [78] Question: Credit exposure in hospitality and restaurants - Management highlighted concerns regarding hospitality exposure, with a significant portion on deferral, while restaurant loans are less impacted [68][70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-36722 TRIUMPH BANCORP, INC. (Exact name of registrant as specified in its charter) Texas 20-0477066 (State or other jurisdiction of incorpo ...

Triumph Bancorp, Inc. (TBK) Q1 2020 Results Earnings Conference Call April 21, 2020 8:00 AM ET Company Participants Luke Wyse - SVP of Finance and IR Aaron Graft - Founder, Vice Chairman and CEO Bryce Fowler - Executive Vice President, Chief Financial Officer and Treasurer Todd Ritterbusch - Chief Lending Officer Conference Call Participants Brad Milsaps - Piper Sandler Brady Gailey - KBW Matt Olney - Stephens Inc. Jared Shaw - Wells Fargo Securities Nicholas Duafala - B. Riley FBR Operator Good day, and we ...

Financial Performance - The company reported a diluted loss per share of $0.18 for Q1 2020[25] - Net Interest Margin (NIM) was 5.63%[28] - Return on Average Tangible Common Equity (ROATCE) was (4.09%)[31] - Tangible Common Equity / Tangible Assets (TCE/TA) was 7.77%[30] Loan Portfolio - Total loans held for investment increased by $126 million[25] - The commercial finance portfolio increased $135.1 million, the national lending portfolio increased $61.2 million, and the community banking portfolio decreased $70.3 million[25] - Community Banking represents 47% of the total loan portfolio, Commercial Finance 32%, and National Lending 21%, totaling $4,325.1 million[41] COVID-19 Impact and Response - As of April 15th, the company executed 404 deferrals on outstanding loan balances of $233 million and had 397 additional deferral requests on outstanding loan balances of $276 million[17] - As of April 17th, the company closed or approved with the SBA, 732 PPP loans representing $158 million in funding[17] - Total exposure to industries most impacted by COVID-19 includes $195.5 million in Retail (4.52% of gross loans), $133.1 million in Energy (3.08% of gross loans), and $128.9 million in Hospitality (2.98% of gross loans)[22] Deposits - Total deposits decreased by $107.9 million, or 2.9%; however, noninterest bearing demand deposits grew $36.7 million, or 4.5%[25]

Part I [Business](index=3&type=section&id=Item%201.%20Business) Triumph Bancorp, Inc. is a Dallas-based financial holding company with **$5.06 billion** in assets as of December 31, 2019, operating through its bank subsidiary, TBK Bank, across banking, factoring, and corporate segments, subject to extensive federal and state regulation Key Financial Metrics as of December 31, 2019 | Metric | Value (USD) | | :--- | :--- | | Consolidated Total Assets | **$5.060 billion** | | Total Loans Held for Investment | **$4.195 billion** | | Total Deposits | **$3.790 billion** | | Total Stockholders' Equity | **$636.6 million** | - The company operates through three reportable segments: **Banking (69% of total revenue)**, **Factoring (30%)**, and **Corporate (1%)** for the year ended December 31, 2019[10](index=10&type=chunk) - The company's business model integrates traditional community banking, national commercial finance (with a focus on the transportation industry), and national lending lines like mortgage warehouse and premium finance[9](index=9&type=chunk) - As of December 31, 2019, the company had **1,107 full-time equivalent employees**[94](index=94&type=chunk) [Principal Products and Services](index=3&type=section&id=Item%201.%20Business%23Principal%20Products%20and%20Services) The company offers community banking, specialized commercial finance for the transportation sector, and national lending products - Community banking services are offered through a network of retail branches in Illinois, Iowa, Colorado, Kansas, and New Mexico, with a corporate office and deposit-gathering branch in Dallas, Texas[12](index=12&type=chunk) - The Commercial Finance division has a significant focus on the transportation industry, with transportation factoring constituting approximately **77% of the total factoring portfolio** and equipment lending to transportation clients being **75% of the total equipment lending portfolio** as of December 31, 2019[21](index=21&type=chunk)[23](index=23&type=chunk) - The TriumphPay platform, a proprietary payment solution for the freight industry, generates fee income and additional factored receivables through its "Quick Pay" option[25](index=25&type=chunk) - National Lending includes mortgage warehouse facilities, which had an outstanding balance of **$668 million** as of December 31, 2019, across 17 customers[31](index=31&type=chunk) [Credit Risk Management](index=6&type=section&id=Item%201.%20Business%23Credit%20Risk%20Management) Triumph manages credit risk through disciplined underwriting, tiered loan authorities, and proprietary scoring models - The underwriting process involves a tiered system of loan authorities, with larger transactions requiring approval from management-level or executive loan committees[38](index=38&type=chunk) - For factoring, the company uses a proprietary web-based application and scoring model to manage high volumes of invoice purchase requests and monitors concentration limits for individual account debtors[37](index=37&type=chunk) - A proprietary risk management program assigns a daily risk score to each factoring client to determine monitoring levels and servicing protocols, aiming to control fraud and credit risk[41](index=41&type=chunk) [Supervision and Regulation](index=7&type=section&id=Item%201.%20Business%23Supervision%20and%20Regulation) Triumph, as a financial holding company, is extensively regulated by federal and state authorities, adhering to capital and consumer protection laws - The company has elected to be a financial holding company (FHC), allowing it to engage in a broader range of financial activities, contingent on maintaining "well-capitalized" and "well-managed" status[50](index=50&type=chunk) - The company and its bank subsidiary are subject to Basel III capital rules, requiring minimum ratios for CET1, Tier 1, and Total Capital, plus a capital conservation buffer, with both entities exceeding "well-capitalized" levels as of year-end 2019[57](index=57&type=chunk)[60](index=60&type=chunk) - TBK Bank, a Texas state savings bank, is regulated by the FDIC and the Texas Department of Savings and Mortgage Lending (TDSML), which restricts its ability to pay dividends and enforces safety and soundness standards[71](index=71&type=chunk)[73](index=73&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including interest rate volatility, credit defaults, transportation industry concentration, operational challenges, and regulatory changes - A substantial portion of revenues (estimated at **30-35% in 2019**) is derived from the transportation industry, making the company vulnerable to economic downturns, regulatory changes, or other negative factors impacting this sector[107](index=107&type=chunk) - The upcoming transition from LIBOR to alternative reference rates presents considerable risk and cost, as it will affect pricing models, valuation tools, and contracts for numerous financial instruments[102](index=102&type=chunk)[104](index=104&type=chunk) - The adoption of the new CECL accounting standard (ASU 2016-13) effective January 1, 2020, will require estimating credit losses over the life of financial instruments and may increase the volatility of the allowance for loan losses[125](index=125&type=chunk) - The company is subject to extensive regulation, and changes in laws or their interpretation by agencies like the Federal Reserve, FDIC, and CFPB could significantly increase costs and limit business opportunities[162](index=162&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[195](index=195&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties) The company's corporate office is in Dallas, Texas, with its TBK Bank subsidiary operating 65 owned and leased branches and loan offices across six states - The corporate headquarters is located at 12700 Park Central Drive, Suite 1700, Dallas, Texas 75251[196](index=196&type=chunk) - As of year-end 2019, TBK Bank operated ten branches in the Quad Cities area (Iowa/Illinois), eight in northern/central Illinois, seven in Colorado and three in New Mexico (Mountain Division), and thirty in Colorado and two in Kansas (Western Division), plus several loan production offices[197](index=197&type=chunk) [Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) The company is party to various litigation matters incidental to its business but does not believe any current proceedings will have a material adverse effect - The company is not presently party to any legal proceedings expected to have a material adverse effect on its business, financial condition, or results of operations[199](index=199&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[200](index=200&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under "TBK"; it retains earnings for growth, not paying dividends, and actively repurchased over **2 million shares** in 2019 - The company's common stock is listed on the NASDAQ Global Select Market under the symbol "TBK", with **24,605,453 shares outstanding** and **366 stockholders of record** as of February 6, 2020[203](index=203&type=chunk) - The company does not intend to pay cash dividends on its common stock in the foreseeable future, planning to retain all earnings to support operations and finance growth[204](index=204&type=chunk) Issuer Purchases of Equity Securities (Q4 2019) | Period | Total Shares Purchased | Average Price Paid per Share (USD) | Total Shares Purchased as Part of Program | Maximum Dollar Value that May Yet Be Purchased (USD) | | :--- | :--- | :--- | :--- | :--- | | Oct 2019 | — | $— | — | **$50,000,000** | | Nov 2019 | **114,344** | **$35.81** | **114,344** | **$45,902,000** | | Dec 2019 | **278,213** | **$37.05** | **278,213** | **$35,586,000** | | **Total** | **392,557** | **$36.69** | **392,557** | **$35,586,000** | [Selected Financial Data](index=39&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five years of historical consolidated financial data, including income statement, balance sheet, per-share metrics, and non-GAAP reconciliations for operational performance insights Selected Historical Financial Data (2017-2019) | (In thousands, except per share) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Income Statement Data** | | | | | Net Interest Income | **$255,903** | **$227,050** | **$155,684** | | Provision for Loan Losses | **$7,942** | **$16,167** | **$11,628** | | Noninterest Income | **$31,569** | **$22,970** | **$40,656** | | Noninterest Expense | **$204,084** | **$167,353** | **$123,614** | | Net Income | **$58,544** | **$51,708** | **$36,220** | | **Balance Sheet Data (End of Period)** | | | | | Total Assets | **$5,060,297** | **$4,559,779** | **$3,499,033** | | Loans Held for Investment, net | **$4,165,420** | **$3,581,073** | **$2,792,108** | | Total Deposits | **$3,789,906** | **$3,450,349** | **$2,621,348** | | Total Stockholders' Equity | **$636,590** | **$636,607** | **$391,698** | | **Per Share Data** | | | | | Diluted EPS | **$2.25** | **$2.03** | **$1.81** | | Book Value per Share | **$25.50** | **$23.62** | **$18.35** | | Tangible Book Value per Share (Non-GAAP) | **$17.88** | **$16.22** | **$15.29** | - The company utilizes non-GAAP financial measures such as 'Tangible common stockholders' equity', 'Adjusted diluted earnings per common share', and 'Adjusted efficiency ratio' to supplement its GAAP reporting and provide a clearer understanding of core operational performance, excluding items like M&A costs[218](index=218&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, net income rose to **$58.5 million**, driven by strong loan growth and increased net interest income, despite net interest margin compression due to higher funding costs, with total assets reaching **$5.06 billion** 2019 vs. 2018 Performance | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Net Income to Common Stockholders | **$58.5 million** | **$51.1 million** | | Diluted EPS | **$2.25** | **$2.03** | | Return on Average Assets | **1.23%** | **1.33%** | | Return on Average Common Equity | **9.04%** | **9.27%** | - Organic loan growth totaled **$585.9 million** in 2019, with significant increases in national lending lines (up **119.8%**) and commercial finance loans (up **5.6%**)[230](index=230&type=chunk) - The TriumphPay platform processed **$975.1 million** in payments in 2019, a significant increase from **$328.4 million** in 2018[113](index=113&type=chunk)[233](index=233&type=chunk) - The company repurchased **2,080,791 shares** of its common stock for a total of **$64.4 million** during 2019[237](index=237&type=chunk) [Results of Operations](index=47&type=section&id=Item%207.%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) In 2019, net interest income increased **12.7%** to **$255.9 million**, despite a **43 bps** net interest margin decline, while noninterest income grew **37.4%** and noninterest expense rose **21.9%** due to growth Net Interest Income and Margin Analysis (2019 vs. 2018) | Metric | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | **$255.9M** | **$227.1M** | **+12.7%** | | Net Interest Margin | **5.92%** | **6.35%** | **-43 bps** | | Yield on Earning Assets | **7.20%** | **7.35%** | **-15 bps** | | Cost of Interest-Bearing Liabilities | **1.66%** | **1.33%** | **+33 bps** | - The provision for loan losses decreased by **$8.3 million** to **$7.9 million** in 2019, attributed to lower net charge-offs, reduced specific reserves, and a shift in the loan portfolio mix toward products with lower reserve requirements[259](index=259&type=chunk)[260](index=260&type=chunk) - Noninterest expense increased by **$36.7 million**, primarily due to a **$22.7 million** rise in salaries and benefits and a **$4.2 million** increase in occupancy costs, reflecting a larger workforce and infrastructure from recent acquisitions and organic growth[264](index=264&type=chunk)[265](index=265&type=chunk) [Financial Condition](index=57&type=section&id=Item%207.%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Financial%20Condition) As of December 31, 2019, total assets grew to **$5.06 billion**, driven by a **$585.9 million** increase in loans to **$4.195 billion**, while asset quality remained stable, deposits rose to **$3.79 billion**, and borrowings increased Loan Portfolio Composition (December 31, 2019) | Loan Category | Balance (in millions) | % of Total | | :--- | :--- | :--- | | Commercial Real Estate | **$1,047.0** | **25%** | | Commercial | **$1,342.7** | **31%** | | Mortgage Warehouse | **$668.0** | **16%** | | Factored Receivables | **$620.0** | **15%** | | Other | **$516.8** | **13%** | | **Total Loans** | **$4,194.5** | **100%** | Asset Quality Ratios (As of Dec 31) | Ratio | 2019 | 2018 | | :--- | :--- | :--- | | Nonperforming Assets to Total Assets | **0.87%** | **0.84%** | | Nonperforming Loans to Total Loans | **0.97%** | **1.00%** | | ALLL to Total Loans | **0.69%** | **0.76%** | - Total deposits increased by **$339.6 million** to **$3.790 billion**, with growth primarily in certificates of deposit and non-interest bearing demand deposits[322](index=322&type=chunk) - Total borrowings increased, driven by a **$100 million** increase in FHLB advances to **$430 million** and the issuance of **$39.5 million** in new subordinated notes[325](index=325&type=chunk)[327](index=327&type=chunk) [Critical Accounting Policies and Estimates](index=68&type=section&id=Item%207.%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Critical%20Accounting%20Policies%20and%20Estimates) The Allowance for Loan and Lease Losses (ALLL) is the most critical accounting estimate, involving significant judgment; CECL adoption on January 1, 2020, is expected to reduce retained earnings by **$1.5 million** - The Allowance for Loan and Lease Losses (ALLL) is considered the most critical accounting policy, requiring complex and subjective judgments about probable incurred credit losses[342](index=342&type=chunk)[344](index=344&type=chunk) - Upon adopting the CECL standard on Jan 1, 2020, the company anticipates a combined increase of approximately **$1.9 million** to its allowance for credit losses and reserve for unfunded commitments, leading to an expected after-tax reduction in retained earnings of about **$1.5 million**[347](index=347&type=chunk)[349](index=349&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate volatility, managed by balance sheet structuring; sensitivity analysis indicates asset-sensitivity, with a **+100 bps** rate shock projected to increase NII by **3.1%** and EVE by **7.5%** Simulated Change in Net Interest Income (NII) | Rate Shock | Change in NII (Next 12 Months) | | :--- | :--- | | **+400 bps** | **+12.5%** | | **+200 bps** | **+6.3%** | | **+100 bps** | **+3.1%** | | **-100 bps** | **-3.3%** | Simulated Change in Economic Value of Equity (EVE) | Rate Shock | Change in EVE (%) | | :--- | :--- | | **+400 bps** | **+22.4%** | | **+200 bps** | **+13.4%** | | **+100 bps** | **+7.5%** | | **-100 bps** | **-9.9%** | [Financial Statements and Supplementary Data](index=72&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2019, with Crowe LLP issuing an unqualified opinion, noting ALLL qualitative loss factors as a Critical Audit Matter due to subjective judgments - The independent auditor, Crowe LLP, issued an unqualified opinion on the financial statements and internal control over financial reporting as of December 31, 2019[360](index=360&type=chunk) - The auditor identified the 'Allowance for Loan and Lease Losses – Qualitative Loss Factors' as a Critical Audit Matter due to the high degree of management judgment and subjectivity involved in its determination[366](index=366&type=chunk)[369](index=369&type=chunk) [Note 2 — Business Combinations and Divestitures](index=90&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Note%202%20%E2%80%94%20Business%20Combinations%20and%20Divestitures) In 2018, the company completed three significant acquisitions, including FBD, SCC, and ICC's factoring business, adding substantial loans, deposits, and goodwill, while also divesting THF and TCA - Acquired FBD and SCC effective September 8, 2018, adding a combined **$287.8 million** in loans, **$674.7 million** in deposits, and recording **$72.1 million** in goodwill[476](index=476&type=chunk)[477](index=477&type=chunk) - Acquired the factoring business of ICC on June 2, 2018, adding **$131.0 million** in factored receivables and recording **$43.0 million** in goodwill, with the deal including contingent consideration valued at **$20.0 million** initially[485](index=485&type=chunk)[487](index=487&type=chunk) - Sold the assets of Triumph Healthcare Finance on March 16, 2018, resulting in a net pre-tax gain of **$1.1 million**[490](index=490&type=chunk)[492](index=492&type=chunk) [Note 4 — Loans and Allowance for Loan and Lease Losses](index=100&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Note%204%20%E2%80%94%20Loans%20and%20Allowance%20for%20Loan%20and%20Lease%20Losses) At year-end 2019, gross loans totaled **$4.195 billion**, diversified across commercial, real estate, and mortgage warehouse, with **ALLL at $29.1 million** and **nonperforming loans at $40.6 million**, actively managed through risk rating systems Allowance for Loan and Lease Losses (ALLL) Activity - 2019 | (In thousands) | Amount | | :--- | :--- | | Beginning Balance (Jan 1, 2019) | **$27,571** | | Provision for Loan Losses | **$7,942** | | Gross Charge-offs | **($7,484)** | | Gross Recoveries | **$1,063** | | **Ending Balance (Dec 31, 2019)** | **$29,092** | Credit Quality Indicators (as of Dec 31, 2019) | Metric | Amount (in thousands) | % of Total Loans | | :--- | :--- | :--- | | Nonaccrual Loans | **$36,054** | **0.86%** | | Total Nonperforming Loans | **$40,613** | **0.97%** | | Loans Past Due 30-89 Days | **$51,589** | **1.23%** | - The loan portfolio has geographic concentrations, with **70% of gross loans** (excluding factored receivables) located in Texas (**27%**), Colorado (**23%**), Illinois (**13%**), and Iowa (**7%**)[521](index=521&type=chunk) [Note 18 — Regulatory Matters](index=124&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Note%2018%20%E2%80%94%20Regulatory%20Matters) The company and TBK Bank are subject to regulatory capital requirements and were categorized as "well capitalized" as of December 31, 2019, exceeding all minimum capital ratios including the conservation buffer Triumph Bancorp, Inc. Capital Ratios (as of Dec 31, 2019) | Ratio | Actual | Minimum for Adequacy | | :--- | :--- | :--- | | Total Capital (to risk-weighted assets) | **12.8%** | **8.0%** | | Tier 1 Capital (to risk-weighted assets) | **10.3%** | **6.0%** | | Common Equity Tier 1 Capital | **9.5%** | **4.5%** | | Tier 1 Capital (to average assets) | **10.0%** | **4.0%** | - TBK Bank, SSB, the subsidiary bank, exceeded all thresholds to be categorized as "well capitalized" under the prompt corrective action provisions[647](index=647&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=135&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[693](index=693&type=chunk) [Controls and Procedures](index=135&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with no material changes in Q4 2019 - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[694](index=694&type=chunk) - Management determined that the company maintained effective internal control over financial reporting as of December 31, 2019[697](index=697&type=chunk) [Other Information](index=135&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[698](index=698&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=136&type=section&id=Items%2010-14) Information for Items 10 through 14, covering governance, compensation, security ownership, and related party transactions, is incorporated by reference from the 2020 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Registrant's Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[701](index=701&type=chunk)[702](index=702&type=chunk)[703](index=703&type=chunk)[704](index=704&type=chunk)[705](index=705&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=137&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the annual report, including consolidated financial statements from Item 8, a comprehensive list of exhibits, and required SEC certifications - The financial statements listed in Item 8 are filed as part of this report[709](index=709&type=chunk) - A list of **30+ exhibits** is provided, including key agreements related to M&A, debt issuance, and executive compensation plans[710](index=710&type=chunk)[712](index=712&type=chunk)[713](index=713&type=chunk) - Certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are included as exhibits[713](index=713&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2019, the company reported net income of $16.7 million, or $0.66 per diluted share, indicating strong financial performance [7] - Provision expense for the quarter was modest at $382,000, attributed to a slight decline in total loans and a change in loan mix [8] - The company issued $39.5 million of fixed to floating subordinated notes due 2029, with plans to use most proceeds for share repurchases [9] - Net charge-offs were 8 basis points in Q4 and 17 basis points for the full year 2019, indicating good credit quality [11] Business Line Data and Key Metrics Changes - Non-interest bearing deposits grew by $55 million in Q4 and are up $125 million since increasing deposit gathering efforts [13] - TriumphPay processed 442,000 invoices in Q4, with payments totaling $475 million, representing a 150% increase from the prior quarter and a 286% increase from Q4 2018 [23] - Total factoring revenue at Triumph Business Capital was relatively flat at $26 million, with the dollar volume of invoices purchased holding at $1.5 billion [25] Market Data and Key Metrics Changes - The company anticipates a 4% to 6% decline in total revenue from Q4 2019 in Q1 2020, consistent with seasonal patterns [31][92] - The transportation market is expected to continue working through excess carrier capacity created in 2018, with further attrition within the small trucking segment [30] Company Strategy and Development Direction - The company is focused on improving operating efficiency and plans to continue investing in its transportation FinTech platform, which is seen as a substantial part of its future growth [14] - The company aims to repurchase shares as a high internal rate of return investment, indicating a commitment to returning capital to shareholders [53] Management's Comments on Operating Environment and Future Outlook - Management expressed a somewhat gloomy outlook for the first two quarters of 2020 due to excess capacity in the transportation market [50] - The company expects to see continued growth in its mortgage warehouse business, although it may stabilize if mortgage activity declines [42] Other Important Information - The company plans to disclose the impact of CECL adoption in its 10-K, estimating an increase in the allowance on the funded loan portfolio by approximately $300,000 [10] - Management noted that credit standards have tightened over the last 12 months, indicating a proactive approach to risk management [11] Q&A Session Summary Question: Margin outlook for the year - Management indicated that NIM compression in Q4 was due to disproportionate growth in the mortgage warehouse business, which is lower margin [37] Question: Growth in mortgage warehouse business - Management noted that growth is due to gaining market share with existing clients rather than a significant increase in the number of relationships [39] Question: TriumphPay invoice processing - Management stated that QuickPay penetration is not disclosed, but the long-term goal is a 20% penetration rate [43] Question: EPS guidance for 2020 - Management suggested that the bottom end of the previously provided EPS range of $2.25 to $2.50 is more likely, depending on transportation market conditions [49] Question: Share buyback strategy - Management emphasized that the share buyback program is not solely to defend stock price but is viewed as a high-return investment opportunity [52] Question: TriumphPay client onboarding - Management explained that revenue from new clients typically begins within the first 90 days, with initial expenses related to onboarding [85]

Q4 2019 EARNINGS RELEASE January 21, 2020 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 forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "could," "may," "will," "should," "seeks," "likely," "intends," "plans," ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from to Commission File Number 001-36722 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 TRIUMPH BANCORP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Texas 20-0477066 (I.R.S. Employer Identification No.) 12700 Park Central Drive, Sui ...

Triumph Bancorp, Inc. (TBK) Q3 2019 Earnings Conference Call October 17, 2019 8:00 AM ET Company Participants Luke Wyse – Senior Vice President of Finance and Investor Relations Aaron Graft – Vice Chairman and Chief Executive Officer Todd Ritterbusch – Chief Lending Officer Bryce Fowler – Chief Financial Officer Conference Call Participants Brady Gailey – KBW Brad Milsaps – Sandler O’Neill Gary Tenner – D.A. Davidson Matt Olney – Stephens Steve Moss – B. Riley FBR Timur Braziler – Wells Fargo Operator Good ...