CEO Summary of Key Points Events That Impacted Earnings During the quarter, we had several events that resulted in positive earnings impact for the quarter and reduced ongoing operating expenses. 1 January 26, 2026 Fellow Shareholders, For the fourth quarter, we recorded net income to common stockholders of $18.4 million, or $0.77 per diluted share. There were some unique items this quarter, which I summarize below as well as covering our core operating metrics. As we enter 2026, our focus is on the operati ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Triumph Financial's unaudited consolidated financial statements for Q3 2025, detailing financial position and performance [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section provides a detailed overview of Triumph Financial's consolidated balance sheet, highlighting key assets, liabilities, and equity changes Consolidated Balance Sheet Highlights (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Total Assets | $6,357,149 | $5,948,975 | $408,174 | 6.86% | | Total Liabilities | $5,437,816 | $5,058,056 | $379,760 | 7.51% | | Total Deposits | $4,955,246 | $4,820,820 | $134,426 | 2.79% | | Total Stockholders' Equity | $919,333 | $890,919 | $28,414 | 3.19% | | Loans, net | $4,953,373 | $4,506,246 | $447,127 | 9.92% | | Goodwill | $353,898 | $241,949 | $111,949 | 46.27% | | Intangible assets, net | $52,291 | $16,259 | $36,032 | 221.62% | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) This section presents Triumph Financial's consolidated income statements, detailing revenues, expenses, and net income for the periods ended September 30, 2025 and 2024 Consolidated Statements of Income Highlights (Three Months Ended September 30, 2025 vs. 2024): | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Total interest income | $108,940 | $108,075 | $865 | 0.80% | | Total interest expense| $21,107 | $19,376 | $1,731 | 8.93% | | Net interest income | $87,833 | $88,699 | $(866) | -0.98% | | Credit loss expense | $4,284 | $4,263 | $21 | 0.49% | | Total noninterest income | $21,448 | $17,497 | $3,951 | 22.58% | | Total noninterest expense | $103,714 | $95,646 | $8,068 | 8.44% | | Net income | $1,708 | $5,347 | $(3,639) | -68.06% | | Net income available to common stockholders | $907 | $4,546 | $(3,639) | -80.05% | | Basic EPS | $0.04 | $0.19 | $(0.15) | -78.95% | | Diluted EPS | $0.04 | $0.19 | $(0.15) | -78.95% | Consolidated Statements of Income Highlights (Nine Months Ended September 30, 2025 vs. 2024): | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Total interest income | $320,411 | $317,037 | $3,374 | 1.06% | | Total interest expense| $59,517 | $54,388 | $5,129 | 9.43% | | Net interest income | $260,894 | $262,649 | $(1,755) | -0.67% | | Credit loss expense | $4,912 | $14,314 | $(9,402) | -65.69% | | Total noninterest income | $58,022 | $49,663 | $8,359 | 16.83% | | Total noninterest expense | $304,727 | $283,360 | $21,367 | 7.54% | | Net income | $6,145 | $12,252 | $(6,107) | -49.84% | | Net income available to common stockholders | $3,741 | $9,848 | $(6,107) | -61.91% | | Basic EPS | $0.16 | $0.42 | $(0.26) | -61.90% | | Diluted EPS | $0.16 | $0.42 | $(0.26) | -61.90% | [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents Triumph Financial's consolidated statements of comprehensive income, including net income and other comprehensive income (loss) Consolidated Statements of Comprehensive Income (Three Months Ended September 30, 2025 vs. 2024): | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | ---------: | ---------: | ---------: | ---------: | | Net income | $1,708 | $5,347 | $(3,639) | -68.06% | | Other comprehensive income (loss), net of tax | $722 | $1,577 | $(855) | -54.22% | | Comprehensive income (loss) | $2,430 | $6,924 | $(4,494) | -64.91% | Consolidated Statements of Comprehensive Income (Nine Months Ended September 30, 2025 vs. 2024): | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | ---------: | ---------: | ---------: | ---------: | | Net income | $6,145 | $12,252 | $(6,107) | -49.84% | | Other comprehensive income (loss), net of tax | $1,192 | $1,108 | $84 | 7.58% | | Comprehensive income (loss) | $7,337 | $13,360 | $(6,023) | -45.08% | [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section details changes in Triumph Financial's stockholders' equity, including common stock, retained earnings, and comprehensive income adjustments Changes in Stockholders' Equity (January 1, 2025 to September 30, 2025): | Metric (in thousands) | Balance, Jan 1, 2025 | Balance, Sep 30, 2025 | Change ($) | | :-------------------- | -------------------: | --------------------: | ---------: | | Total Stockholders' Equity | $890,919 | $919,333 | $28,414 | | Common Stock Shares Outstanding | 23,391,411 | 23,763,401 | 371,990 | | Additional Paid-in Capital | $567,884 | $593,624 | $25,740 | | Retained Earnings | $549,215 | $552,956 | $3,741 | | Accumulated Other Comprehensive Income (Loss) | $(3,115) | $(1,923) | $1,192 | - Key activities contributing to the change in stockholders' equity for the nine months ended September 30, 2025, include net income of **$6,145,000**, issuance of common stock totaling **$12,732,000**, stock-based compensation of **$10,274,000**, and an increase in accumulated other comprehensive income (loss) of **$1,192,000**. These were partially offset by dividends on preferred stock of **$2,404,000** and treasury stock purchases of **$2,227,000**[17](index=17&type=chunk)[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Triumph Financial's consolidated cash flow statements, categorizing cash movements into operating, investing, and financing activities Consolidated Statements of Cash Flows (Nine Months Ended September 30, 2025 vs. 2024): | Metric (in thousands) | 2025 | 2024 | Change ($) | | :-------------------- | -----------: | -----------: | ---------: | | Net cash provided by (used in) operating activities | $30,583 | $37,723 | $(7,140) | | Net cash provided by (used in) investing activities | $(595,975) | $(336,206) | $(259,769) | | Net cash provided by (used in) financing activities | $382,497 | $501,128 | $(118,631) | | Net increase (decrease) in cash and cash equivalents | $(182,895) | $202,645 | $(385,540) | | Cash and cash equivalents at end of period | $147,222 | $489,280 | $(342,058) | - Operating cash flows decreased primarily due to lower net income. Investing activities saw a significant increase in net cash used, driven by net cash paid for acquisitions (**$137.5 million** in 2025 vs. **$0** in 2024) and increased net change in loans (**$449.2 million** used in 2025 vs. **$190.9 million** used in 2024). Financing activities decreased due to a lower net increase in deposits and a higher increase in Federal Home Loan Bank advances in 2025 compared to 2024[21](index=21&type=chunk) [Condensed Notes to Consolidated Financial Statements](index=13&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides condensed notes to the consolidated financial statements, offering additional details and context for reported figures [NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%201%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines Triumph Financial's significant accounting policies, including its business segments, recent settlements, and restructuring activities - Triumph Financial, Inc. is a financial holding company offering banking, factoring, payments, and intelligence services, primarily through its subsidiary TBK Bank, SSB. Effective January 1, 2025, Triumph Financial Services LLC (factoring operations) merged into TBK Bank, SSB[25](index=25&type=chunk)[26](index=26&type=chunk) - **Reportable Segments:** The Company operates in four reportable segments: Banking, Factoring, Payments, and Intelligence. The Intelligence segment was launched in Q4 2024 with the acquisition of Isometric Technologies Inc. and further supplemented by Greenscreens AI. Inc. in Q2 2025. - **USPS Settlement:** On June 30, 2025, the Company settled litigation with the USPS for **$47.5 million**, resolving disputes related to misdirected payments. The settlement had an **$11.5 million** positive impact on pretax net income for the nine months ended September 30, 2025. - **Restructuring Activities:** In August 2025, the Company initiated a reduction in force (approx. **5%** of workforce) and other cost-saving measures, incurring **$3.1 million** in severance and **$1.3 million** in contract amendment fees during Q3 2025. These costs were allocated across segments and corporate[29](index=29&type=chunk)[34](index=34&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) [NOTE 2 — ACQUISITIONS AND DIVESTITURES](index=18&type=section&id=NOTE%202%20%E2%80%94%20ACQUISITIONS%20AND%20DIVESTITURES) This note details Triumph Financial's acquisition activities, including the Greenscreens AI and Isometric Technologies Inc. purchases, and their financial impact Greenscreens AI, Inc. Acquisition (May 8, 2025): | Metric (in thousands) | Amount | | :-------------------- | -----------: | | Cash paid | $139,118 | | Stock consideration | $12,732 | | Total consideration | $151,850 | | Goodwill recognized | $111,949 | | Intangible assets acquired (customer relationship, software) | $44,720 | - **Greenscreens AI Acquisition:** Acquired for **$151.85 million** (cash and stock), adding pricing intelligence for the logistics industry. Goodwill of **$111.9 million** was recognized, allocated primarily to the Intelligence segment (**$80.4 million**). - **Isometric Technologies Inc. Acquisition:** Acquired on December 1, 2024, for **$10.0 million** in cash, providing service and performance scoring for the trucking industry. Goodwill of **$8.24 million** was recognized and allocated to the Intelligence segment[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[58](index=58&type=chunk) [NOTE 3 — SECURITIES](index=19&type=section&id=NOTE%203%20%E2%80%94%20SECURITIES) This note provides details on Triumph Financial's securities portfolio, including equity and debt securities, their fair values, and credit loss allowances Equity Securities with Readily Determinable Fair Values (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :-------------------- | -----------: | -----------: | | Carrying Value | $4,569 | $4,445 | Available for Sale Securities (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :-------------------- | -----------: | -----------: | | Fair Value | $378,088 | $381,561 | | Gross Unrealized Gains | $1,566 | $1,725 | | Gross Unrealized Losses | $(4,098) | $(5,822) | - The Company holds debt securities classified as available for sale and held to maturity. Available for sale securities in an unrealized loss position are primarily due to noncredit-related factors (interest rates, market conditions), and no allowance for credit losses has been recorded for them. Held to maturity securities, primarily CLO subordinated notes, had an allowance for credit losses of **$1.4 million** at September 30, 2025, down from **$3.5 million** at December 31, 2024, following a **$2.16 million** charge-off of an uncollectible CLO fund investment[65](index=65&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk) [NOTE 4 — LOANS AND ALLOWANCE FOR CREDIT LOSSES](index=24&type=section&id=NOTE%204%20%E2%80%94%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) This note details Triumph Financial's loan portfolio, including growth trends, allowance for credit losses, and overall credit quality metrics Loans Held for Investment (September 30, 2025 vs. December 31, 2024): | Loan Type (in thousands) | Sep 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :----------------------- | -----------: | -----------: | ---------: | ---------: | | Commercial real estate | $769,314 | $777,689 | $(8,375) | -1.08% | | Construction, land development, land | $204,247 | $203,804 | $443 | 0.22% | | 1-4 family residential | $180,970 | $154,020 | $26,950 | 17.50% | | Farmland | $43,208 | $56,366 | $(13,158) | -23.34% | | Commercial | $1,144,872 | $1,119,245 | $25,627 | 2.29% | | Factored receivables | $1,424,631 | $1,204,510 | $220,121 | 18.28% | | Consumer | $17,235 | $8,000 | $9,235 | 115.44% | | Mortgage warehouse | $1,202,445 | $1,023,326 | $179,119 | 17.50% | | Total Loans | $4,986,922 | $4,546,960 | $439,962 | 9.68% | Allowance for Credit Losses (ACL) Activity (Nine Months Ended September 30, 2025): | Metric (in thousands) | Amount | | :-------------------- | -----------: | | Beginning balance | $40,714 | | Credit Loss Expense | $5,047 | | Charge-offs | $(27,953) | | Recoveries | $4,961 | | Initial ACL on Loans Purchased with Credit Deterioration | $10,780 | | Ending balance | $33,549 | - **Loan Portfolio Growth:** Total loans held for investment increased by **$439.96 million** (**9.68%**) to **$4.987 billion** at September 30, 2025, driven by growth in factored receivables, mortgage warehouse, and 1-4 family residential loans. - **ACL Decrease:** The Allowance for Credit Losses (ACL) decreased by **$7.165 million** (**17.6%**) to **$33.549 million**, primarily due to net charge-offs of **$22.992 million** (including a **$10.78 million** charge-off on a purchased credit deteriorated loan with no impact on credit loss expense) and a decrease in required specific reserves. - **Credit Quality:** Nonperforming loans decreased by **$45.575 million** (**40.2%**) to **$67.737 million**, leading to a decrease in the nonperforming loans to total loans ratio from **2.49%** to **1.36%**. Past due loans to total loans also decreased from **3.27%** to **1.91%**[78](index=78&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[109](index=109&type=chunk)[126](index=126&type=chunk)[432](index=432&type=chunk) [NOTE 5 — GOODWILL AND INTANGIBLE ASSETS](index=39&type=section&id=NOTE%205%20%E2%80%94%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note explains changes in Triumph Financial's goodwill and intangible assets, primarily driven by recent acquisitions and their associated valuations Goodwill and Intangible Assets (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Goodwill | $353,898 | $241,949 | $111,949 | 46.27% | | Intangible assets, net | $52,291 | $16,259 | $36,032 | 221.62% | - Goodwill increased significantly due to the Greenscreens AI acquisition, which added **$111.9 million** in goodwill. Intangible assets also saw a substantial increase, primarily from acquired customer relationships and software related to the Greenscreens acquisition[53](index=53&type=chunk)[54](index=54&type=chunk)[130](index=130&type=chunk) [NOTE 6 — VARIABLE INTEREST ENTITIES](index=41&type=section&id=NOTE%206%20%E2%80%94%20VARIABLE%20INTEREST%20ENTITIES) This note discusses Triumph Financial's investments in variable interest entities, specifically CLO funds, and the determination of non-consolidation - The Company holds investments in subordinated notes of closed Collateralized Loan Obligation (CLO) funds, totaling **$1.766 million** at September 30, 2025. These are classified as held-to-maturity securities. The Company determined these CLO funds are variable interest entities but is not the primary beneficiary, thus not requiring consolidation[131](index=131&type=chunk)[132](index=132&type=chunk) [NOTE 7 — LEGAL CONTINGENCIES](index=41&type=section&id=NOTE%207%20%E2%80%94%20LEGAL%20CONTINGENCIES) This note discloses Triumph Financial's legal contingencies, including a significant floorplan loan facility for Tricolor Holdings, LLC, facing bankruptcy and fraud allegations - TBK Bank, SSB is the agent bank for a **$60.5 million** floorplan loan facility for Tricolor Holdings, LLC, holding **$22.5 million**. - Tricolor filed for Chapter 7 bankruptcy on September 10, 2025, amidst fraud allegations. - The Bank believes its collateral position adequately secures the loan, but potential disputes over vehicle inventory and additional claims in bankruptcy proceedings could lead to material losses for the Company[133](index=133&type=chunk) [NOTE 8 — OFF-BALANCE SHEET LOAN COMMITMENTS](index=43&type=section&id=NOTE%208%20%E2%80%94%20OFF-BALANCE%20SHEET%20LOAN%20COMMITMENTS) This note details Triumph Financial's off-balance sheet loan commitments, including unused lines of credit and mortgage warehouse commitments, and associated credit loss allowances Off-Balance Sheet Commitments (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Unused lines of credit | $572,032 | $590,198 | $(18,166) | -3.08% | | Standby letters of credit | $11,036 | $23,950 | $(12,914) | -53.92% | | Commitments to purchase loans | $287 | $9,500 | $(9,213) | -96.98% | | Mortgage warehouse commitments | $625,792 | $810,913 | $(185,121) | -22.83% | - The Company's off-balance sheet commitments, including unused lines of credit and mortgage warehouse commitments, decreased significantly. An allowance for credit losses of **$2.518 million** was recorded for these exposures at September 30, 2025[138](index=138&type=chunk)[141](index=141&type=chunk) [NOTE 9 — FAIR VALUE DISCLOSURES](index=43&type=section&id=NOTE%209%20%E2%80%94%20FAIR%20VALUE%20DISCLOSURES) This note provides fair value disclosures for Triumph Financial's assets and liabilities, categorizing measurements into Level 1, 2, and 3 based on input observability Assets Measured at Fair Value on a Recurring Basis (September 30, 2025): | Asset Type (in thousands) | Level 1 | Level 2 | Level 3 | Total Fair Value | | :------------------------ | ------: | ---------: | ------: | ---------------: | | Securities available for sale | $0 | $378,088 | $0 | $378,088 | | Equity securities with readily determinable fair values | $4,569 | $0 | $0 | $4,569 | | Loans held for sale | $0 | $9,741 | $0 | $9,741 | | Indemnification asset | $0 | $0 | $74 | $74 | | Revenue share asset | $0 | $0 | $1,772 | $1,772 | - The Company categorizes fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs). Most recurring fair value assets, like available-for-sale securities and loans held for sale, are classified as Level 2. The indemnification and revenue share assets are Level 3, reflecting unobservable inputs and management's assumptions[142](index=142&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk) [NOTE 10 — REGULATORY MATTERS](index=49&type=section&id=NOTE%2010%20%E2%80%94%20REGULATORY%20MATTERS) This note outlines Triumph Financial's regulatory capital matters, including capital ratios and compliance with adequacy requirements for both the holding company and its bank subsidiary Capital Ratios (September 30, 2025): | Ratio Type | Triumph Financial, Inc. | TBK Bank, SSB | | :-------------------------- | ----------------------: | ------------: | | Total capital (to risk weighted assets) | 12.1% | 11.8% | | Tier 1 capital (to risk weighted assets) | 10.2% | 11.2% | | Common equity Tier 1 capital (to risk weighted assets) | 8.6% | 11.2% | | Tier 1 capital (to average assets) | 9.6% | 10.4% | - Both Triumph Financial, Inc. and its subsidiary TBK Bank, SSB, met all capital adequacy requirements as of September 30, 2025, with TBK Bank categorized as 'well capitalized'. The temporary regulatory capital benefits from ASU 2016-13 were fully reversed after December 31, 2024[161](index=161&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk) [NOTE 11 — STOCKHOLDERS' EQUITY](index=51&type=section&id=NOTE%2011%20%E2%80%94%20STOCKHOLDERS%27%20EQUITY) This note details Triumph Financial's stockholders' equity structure, including authorized and outstanding shares of preferred and common stock Stockholders' Equity Structure (September 30, 2025): | Metric | Amount/Value | | :-------------------- | -----------: | | Preferred Stock Series C (Shares authorized) | 51,750 | | Preferred Stock Series C (Shares issued/outstanding) | 45,000 | | Preferred Stock Series C (Liquidation preference amount) | $45,000,000 | | Common Stock (Shares authorized) | 50,000,000 | | Common Stock (Shares outstanding) | 23,763,401 | [NOTE 12 — STOCK BASED COMPENSATION](index=51&type=section&id=NOTE%2012%20%E2%80%94%20STOCK%20BASED%20COMPENSATION) This note describes Triumph Financial's stock-based compensation plans, including expense recognition, unrecognized costs, and employee stock purchases Stock-Based Compensation Expense (Nine Months Ended September 30): | Year | Amount (in thousands) | | :--- | --------------------: | | 2025 | $10,274 | | 2024 | $11,092 | - **Omnibus Incentive Plan:** The Company's 2014 Omnibus Incentive Plan allows for various equity awards, including restricted stock awards (RSAs), restricted stock units (RSUs), and market-based performance stock units (Market Based PSUs). - **Unrecognized Compensation Cost:** As of September 30, 2025, there was **$6.175 million** of unrecognized compensation cost related to RSUs (expected to be recognized over **2.76 years**) and **$13.888 million** for Market Based PSUs (over **2.18 years**). For stock options, **$2.625 million** remains unrecognized (over **3.03 years**). - **Employee Stock Purchase Plan (ESPP):** Under the ESPP, **44,048** shares were issued in the nine months ended September 30, 2025, allowing eligible employees to purchase common stock at a discount[173](index=173&type=chunk)[176](index=176&type=chunk)[180](index=180&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [NOTE 13 — EARNINGS PER SHARE](index=54&type=section&id=NOTE%2013%20%E2%80%94%20EARNINGS%20PER%20SHARE) This note presents Triumph Financial's basic and diluted earnings per common share for the three and nine months ended September 30 Earnings Per Common Share (Three Months Ended September 30): | Metric | 2025 | 2024 | | :----- | ----: | ----: | | Basic | $0.04 | $0.19 | | Diluted| $0.04 | $0.19 | Earnings Per Common Share (Nine Months Ended September 30): | Metric | 2025 | 2024 | | :----- | ----: | ----: | | Basic | $0.16 | $0.42 | | Diluted| $0.16 | $0.42 | [NOTE 14 — REVENUE FROM CONTRACTS WITH CUSTOMERS](index=55&type=section&id=NOTE%2014%20%E2%80%94%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) This note outlines Triumph Financial's revenue recognition policies from customer contracts across its Banking, Factoring, Payments, and Intelligence segments - The Company recognizes revenue from contracts with customers in accordance with ASC Topic 606, identifying performance obligations, transaction prices, and recognizing revenue as obligations are satisfied. - **Banking & Factoring:** Revenue primarily from interest-earning assets (Topic 310), but also includes Topic 606 revenue from service charges on deposits, card income, net OREO gains/losses, fee income, and insurance commissions. - **Payments Segment:** Earns transaction and network fees (Topic 606) for auditing and payment processing services in the trucking industry, recognized over time as services are rendered. Also earns interest income on factored receivables (Topic 310). - **Intelligence Segment:** Earns subscription revenue (Topic 606) from access and subscription fees to its platform, recognized ratably over the service period. Contracts are typically one to two years[189](index=189&type=chunk)[190](index=190&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) Payments Segment Fee Income from External Customers (Three Months Ended September 30): | Customer Category | 2025 (in thousands) | 2024 (in thousands) | | :---------------- | ------------------: | ------------------: | | Broker fee income | $7,131 | $4,804 | | Factor fee income | $933 | $1,339 | | Other fee income | $365 | $42 | | Total fee income | $8,429 | $6,185 | [NOTE 15 — LESSOR OPERATING LEASES](index=58&type=section&id=NOTE%2015%20%E2%80%94%20LESSOR%20OPERATING%20LEASES) This note provides details on Triumph Financial's lessor operating lease revenue, including fixed and variable payments and amortization of intangibles Lessor Operating Lease Revenue (Nine Months Ended September 30): | Revenue Type (in thousands) | 2025 | 2024 | | :-------------------------- | ----: | ----: | | Fixed payments | $1,071| $2,073| | Variable payments | $665 | $994 | | Amortization of intangibles included in lease income | $(56) | $(57) | | Total fee income | $1,680| $3,010| [NOTE 16 — BUSINESS SEGMENT INFORMATION](index=58&type=section&id=NOTE%2016%20%E2%80%94%20BUSINESS%20SEGMENT%20INFORMATION) This note provides information on Triumph Financial's business segments (Banking, Factoring, Payments, Intelligence), their revenue contributions, and expense allocation methodologies - The Company's reportable segments are Banking, Factoring, Payments, and Intelligence, determined by business processes and economic characteristics. - The Intelligence segment was launched in Q4 2024, so prior period comparative results are not applicable. - Expenses directly attributable to segments are allocated, while shared service costs (e.g., HR, IT) are assigned to the Corporate and Other category for clear visibility into segment performance. - Intersegment interest expense is allocated to Factoring and Payments based on one-month term SOFR, or Federal Funds effective rate when Payments is self-funded[212](index=212&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk)[218](index=218&type=chunk) Total Segment Revenue Contribution (Nine Months Ended September 30, 2025): | Segment | % of Total Segment Revenue | | :----------- | -------------------------: | | Banking | 58% | | Factoring | 30% | | Payments | 11% | | Intelligence | 1% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=66&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Triumph Financial's Q3 2025 financial condition and results, covering performance, asset quality, liquidity, capital, and risks [Overview](index=66&type=section&id=Overview) This section provides an overview of Triumph Financial, Inc.'s business, its primary services, and key consolidated financial metrics as of September 30, 2025 - Triumph Financial, Inc. is a financial holding company offering banking, factoring, payments, and intelligence services, primarily through TBK Bank, SSB. - As of September 30, 2025, consolidated total assets were **$6.357 billion**, total loans held for investment were **$4.987 billion**, total deposits were **$4.955 billion**, and total stockholders' equity was **$919.3 million**. - The business is primarily focused on providing financial services to the for-hire trucking ecosystem in the United States, including Brokers, Shippers, Factors, and Carriers[234](index=234&type=chunk)[239](index=239&type=chunk) Segment Revenue Contribution (Nine Months Ended September 30, 2025): | Segment | % of Total Segment Revenue | | :----------- | -------------------------: | | Banking | 58% | | Factoring | 30% | | Payments | 11% | | Intelligence | 1% | [Third Quarter 2025 Overview](index=67&type=section&id=Third%20Quarter%202025%20Overview) This section provides a high-level overview of Triumph Financial's key financial performance and operational highlights for the third quarter of 2025 Key Financial Metrics (Three Months Ended September 30, 2025 vs. 2024): | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | -----------: | -----------: | ---------: | ---------: | | Net income available to common stockholders | $0.9 million | $4.5 million | $(3.6) million | -80.0% | | Diluted EPS | $0.04 | $0.19 | $(0.15) | -78.9% | | Return on average common equity | 0.41% | 2.14% | -1.73% | -80.8% | | Return on average assets | 0.11% | 0.36% | -0.25% | -69.4% | Balance Sheet Growth (September 30, 2025 vs. December 31, 2024): | Metric | Sep 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :-------------------------- | -----------: | -----------: | ---------: | ---------: | | Total Assets | $6.357 billion | $5.949 billion | $408 million | 6.86% | | Gross Loans Held for Investment | $4.987 billion | $4.547 billion | $440 million | 9.68% | | Total Deposits | $4.955 billion | $4.821 billion | $134 million | 2.78% | | Total Stockholders' Equity | $919.3 million | $890.9 million | $28.4 million | 3.19% | - Factoring segment purchased **$2.998 billion** in invoices (average size **$1,727**) in Q3 2025, up from **$2.610 billion** (average size **$1,763**) in Q3 2024. - Payments segment processed **8.8 million** invoices totaling **$10.662 billion** in Q3 2025, up from **6.3 million** invoices totaling **$7.091 billion** in Q3 2024[248](index=248&type=chunk)[249](index=249&type=chunk) [2025 Items of Note](index=69&type=section&id=2025%20Items%20of%20Note) This section highlights significant events and strategic initiatives for Triumph Financial in 2025, including restructuring, acquisitions, and a major litigation settlement - **Restructuring Activities:** In August 2025, the Company reduced its workforce by approximately **5%** and implemented other cost-saving initiatives. This resulted in **$3.1 million** in severance expenses and **$1.3 million** in contract amendment fees in Q3 2025. - **Greenscreens.ai Acquisition:** On May 8, 2025, Triumph acquired Greenscreens AI, Inc. for **$139.1 million** in cash and **$12.7 million** in common stock, enhancing its logistics pricing intelligence capabilities[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - The USPS Settlement on June 30, 2025, resulted in a **$47.5 million** payment to resolve litigation, including **$19.4 million** to relieve the Misdirected Payments Receivable. This settlement had an **$11.5 million** positive impact on pretax net income for the nine months ended September 30, 2025[254](index=254&type=chunk)[255](index=255&type=chunk)[259](index=259&type=chunk) [2024 Items of Note](index=70&type=section&id=2024%20Items%20of%20Note) This section outlines notable events for Triumph Financial in 2024, including the acquisition of Isometric Technologies Inc. and the purchase of its new headquarters building - **Isometric Technologies Inc. Acquisition:** On December 1, 2024, Triumph acquired Isometric Technologies Inc. for **$10.0 million** in cash, adding service and performance scoring for the trucking industry. - **Triumph Financial Headquarters Purchase:** On March 20, 2024, the Company purchased a building in Dallas, TX, for **$54.6 million** to serve as its future headquarters[256](index=256&type=chunk)[258](index=258&type=chunk) [Trucking transportation and factoring](index=70&type=section&id=Trucking%20transportation%20and%20factoring) This section discusses the impact of freight market fluctuations on Triumph Financial's Factoring and Payments segments, including rates, volumes, and strategic responses - The Factoring and Payments segments are significantly impacted by fluctuations in freight markets, particularly brokered freight, which has seen falling volumes and excess capacity in 2023-2025. - Average rates per mile have decreased to 2019 levels, impacting invoice prices and equipment values, leading to increased equipment finance delinquencies and loan modifications. - Despite headwinds, the Company maintains sufficient capital access and is focusing on technology initiatives, including AI, to enhance efficiency and profitability in its factoring segment[260](index=260&type=chunk)[261](index=261&type=chunk) [Financial Highlights](index=72&type=section&id=Financial%20Highlights) This section presents key financial highlights for Triumph Financial, including income statement, balance sheet, and asset quality data for recent periods Income Statement Data (Nine Months Ended September 30, 2025 vs. 2024): | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Net interest income | $260,894 | $262,649 | $(1,755) | -0.67% | | Credit loss expense | $4,912 | $14,314 | $(9,402) | -65.69% | | Noninterest income | $58,022 | $49,663 | $8,359 | 16.83% | | Noninterest expense | $304,727 | $283,360 | $21,367 | 7.54% | | Net income | $6,145 | $12,252 | $(6,107) | -49.84% | | Diluted EPS | $0.16 | $0.42 | $(0.26) | -61.90% | Balance Sheet Data (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | | :-------------------- | -----------: | -----------: | | Total assets | $6,357,149 | $5,948,975 | | Loans held for investment, net | $4,953,373 | $4,506,246 | | Total deposits | $4,955,246 | $4,820,820 | | Total stockholders' equity | $919,333 | $890,919 | Asset Quality Ratios (September 30, 2025 vs. December 31, 2024): | Metric | Sep 30, 2025 | Dec 31, 2024 | | :-------------------------- | -----------: | -----------: | | Past due to total loans | 1.91% | 3.27% | | Nonperforming loans to total loans | 1.36% | 2.49% | | Nonperforming assets to total assets | 1.10% | 2.02% | | ACL to total loans | 0.67% | 0.90% | [Results of Operations - Three months ended September 30, 2025 compared with three months ended September 30, 2024](index=77&type=section&id=Results%20of%20Operations%20-%20Three%20months%20ended%20September%2030%2C%202025%20compared%20with%20three%20months%20ended%20September%2030%2C%202024) This section analyzes Triumph Financial's operating results for Q3 2025 compared to Q3 2024, focusing on net income, EPS, net interest income, and expenses Net Income & EPS (Three Months Ended September 30): | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----- | -----------: | -----------: | ---------: | ---------: | | Net income | $1,708,000 | $5,347,000 | $(3,639,000) | -68.1% | | Diluted EPS | $0.04 | $0.19 | $(0.15) | -78.9% | Net Interest Income (Three Months Ended September 30): | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Net interest income | $87,833 | $88,699 | $(866) | -1.0% | | Net interest margin | 6.29% | 6.81% | -52 bps | -7.6% | | Yield on loans | 8.17% | 8.85% | -68 bps | -7.7% | | Cost of interest bearing liabilities | 2.59% | 2.65% | -6 bps | -2.3% | - **Credit Loss Expense:** Total credit loss expense remained relatively flat at **$4.284 million** (2025) vs. **$4.263 million** (2024). Credit loss expense on loans decreased by **$0.9 million** due to decreased required specific reserves, partially offset by increased net charge-offs (**$9.4 million** in 2025 vs. **$3.5 million** in 2024). - **Noninterest Income:** Increased by **$4.0 million** (**22.6%**) to **$21.448 million**, driven by a **$5.2 million** increase in fee income (Payments and Intelligence segments) and partially offset by a **$0.9 million** decrease in other noninterest income. - **Noninterest Expense:** Increased by **$8.1 million** (**8.4%**) to **$103.714 million**, primarily due to a **$4.7 million** increase in salaries and employee benefits (including **$3.1 million** severance from restructuring) and a **$1.4 million** increase in software amortization. Professional fees increased by **$0.5 million**, including **$1.3 million** from cost-saving initiatives[283](index=283&type=chunk)[286](index=286&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk)[301](index=301&type=chunk) [Results of Operations - Nine months ended September 30, 2025 compared with nine months ended September 30, 2024](index=97&type=section&id=Results%20of%20Operations%20-%20Nine%20months%20ended%20September%2030%2C%202025%20compared%20with%20nine%20months%20ended%20September%2030%2C%202024) This section analyzes Triumph Financial's operating results for the nine months ended September 30, 2025, compared to the same period in 2024, covering key income and expense drivers Net Income & EPS (Nine Months Ended September 30): | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----- | -----------: | -----------: | ---------: | ---------: | | Net income | $6,145,000 | $12,252,000 | $(6,107,000) | -49.8% | | Diluted EPS | $0.16 | $0.42 | $(0.26) | -61.9% | Net Interest Income (Nine Months Ended September 30): | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Net interest income | $260,894 | $262,649 | $(1,755) | -0.7% | | Net interest margin | 6.40% | 7.05% | -65 bps | -9.2% | | Yield on loans | 8.31% | 9.01% | -70 bps | -7.8% | | Cost of interest bearing liabilities | 2.53% | 2.56% | -3 bps | -1.2% | - **Credit Loss Expense:** Decreased by **$9.4 million** (**65.7%**) to **$4.912 million**, primarily due to a **$9.6 million** decrease in required specific reserves and lower credit loss expense from projected loss drivers. Net charge-offs (excluding the **$10.8 million** PCD loan charge-off) increased to **$12.2 million** from **$8.1 million**, including a **$3.8 million** recovery from the USPS settlement. - **Noninterest Income:** Increased by **$8.4 million** (**16.8%**) to **$58.022 million**, driven by a **$9.8 million** increase in fee income (Payments and Intelligence segments), partially offset by decreases in insurance commissions and other noninterest income. - **Noninterest Expense:** Increased by **$21.4 million** (**7.5%**) to **$304.727 million**, mainly due to a **$13.2 million** increase in salaries and employee benefits (including **$3.1 million** severance), a **$3.7 million** increase in software amortization, and a **$7.3 million** increase in other noninterest expense (including a **$2.0 million** litigation settlement and **$2.4 million** lease termination payments). Professional fees decreased by **$1.9 million** due to a **$6.5 million** recovery from the USPS Settlement, offset by **$4.0 million** in Greenscreens acquisition costs[356](index=356&type=chunk)[359](index=359&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk)[364](index=364&type=chunk)[366](index=366&type=chunk)[367](index=367&type=chunk)[371](index=371&type=chunk) [Financial Condition](index=120&type=section&id=Financial%20Condition) This section analyzes Triumph Financial's financial condition, including asset growth, loan portfolio changes, deposit trends, and other borrowings Total Assets (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Total Assets | $6,357,149 | $5,948,975 | $408,174 | 6.86% | | Loans held for investment | $4,986,922 | $4,546,960 | $439,962 | 9.68% | | Securities | $384,423 | $387,882 | $(3,459) | -0.89% | Nonperforming Assets (September 30, 2025 vs. December 31, 2024): | Metric (in thousands) | Sep 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :-------------------- | -----------: | -----------: | ---------: | ---------: | | Total nonperforming assets | $70,195 | $120,272 | $(50,077) | -41.64% | | Nonperforming loans to total loans held for investment | 1.36% | 2.49% | -1.13% | -45.38% | - **Loan Portfolio:** Increased by **$439.96 million** (**9.68%**) to **$4.987 billion**, driven by growth in factored receivables, mortgage warehouse, and 1-4 family residential loans. Commercial real estate and farmland loans decreased. - **Allowance for Credit Losses (ACL):** Decreased by **$7.2 million** (**17.6%**) to **$33.5 million**, reflecting net charge-offs of **$23.0 million** and credit loss expense of **$5.0 million**. The ACL to total loans ratio decreased to **0.67%** from **0.90%**. - **Deposits:** Total deposits increased by **$134.4 million** (**2.8%**) to **$4.955 billion**, primarily due to increases in noninterest bearing demand deposits and brokered time deposits. Uninsured deposits were **$1.291 billion** at September 30, 2025. - **Other Borrowings:** FHLB advances increased to **$280.0 million** from **$30.0 million**. Subordinated notes and junior subordinated debentures remained relatively stable, with **$69.8 million** and **$42.8 million** outstanding, respectively[410](index=410&type=chunk)[411](index=411&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk)[418](index=418&type=chunk)[432](index=432&type=chunk)[445](index=445&type=chunk)[448](index=448&type=chunk)[451](index=451&type=chunk)[453](index=453&type=chunk) [Off-Balance Sheet Arrangements](index=137&type=section&id=Off-Balance%20Sheet%20Arrangements) This section describes Triumph Financial's off-balance sheet arrangements, including credit commitments and standby letters of credit, and their associated risks - The Company engages in off-balance sheet arrangements, including commitments to extend credit and standby letters of credit, to meet customer financing needs. These instruments carry credit and interest rate risk, with an allowance for credit losses of **$2.518 million** recorded for these exposures[141](index=141&type=chunk)[464](index=464&type=chunk) [Critical Accounting Policies and Estimates](index=137&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies Triumph Financial's critical accounting policies and estimates, emphasizing the significant judgment involved in determining the allowance for credit losses - The most critical accounting policy is the determination of the allowance for credit losses, which involves significant judgment and complexity. No material changes to critical accounting policies have occurred since December 31, 2024[465](index=465&type=chunk) [Recently Issued Accounting Pronouncements](index=137&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note 1 for details on recently issued accounting pronouncements and their expected impact on Triumph Financial's financial statements - The Company refers to Note 1 for details on recently issued accounting pronouncements and their expected impact on consolidated financial statements[466](index=466&type=chunk) [Forward-Looking Statements](index=137&type=section&id=Forward-Looking%20Statements) This section highlights that the document contains forward-looking statements subject to various risks and uncertainties, which may cause actual results to differ materially - The document contains forward-looking statements subject to risks and uncertainties, including business and economic conditions, credit risk, integration of acquired businesses, interest rate risk, and regulatory changes. Actual results may differ materially from expectations[467](index=467&type=chunk)[468](index=468&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=139&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) This section details the Company's exposure to market risks, primarily interest rate volatility, and its asset/liability management strategies [Asset/Liability Management and Interest Rate Risk](index=139&type=section&id=Asset%2FLiability%20Management%20and%20Interest%20Rate%20Risk) This section describes how Triumph Financial manages interest rate risk through simulation models and economic value of equity analysis to optimize net income and maintain liquidity - The primary market risk is interest rate volatility, impacting income, expense, and fair value of assets/liabilities. - The Company uses an interest rate risk simulation model and economic value of equity analysis to test sensitivity to interest rate changes, with oversight from the subsidiary bank's board of directors and senior executive management. - Management emphasizes originating shorter-duration and variable-rate loans and acquiring noninterest or low interest-bearing non-maturity deposit accounts to mitigate negative exposure to rate increases[471](index=471&type=chunk)[473](index=473&type=chunk)[475](index=475&type=chunk)[477](index=477&type=chunk) Simulated Change in Net Interest Income (September 30, 2025): | Rate Shift | Following 12 Months | 13-24 Months | | :---------------- | ------------------: | -----------: | | +400 basis points | 8.4% | 9.8% | | +100 basis points | 2.3% | 2.6% | | -100 basis points | (2.1%) | (2.6%) | | -400 basis points | (8.4%) | (11.4%) | Economic Value of Equity at Risk (September 30, 2025): | Rate Shift | % Change | | :---------------- | -------: | | +400 basis points | 8.3% | | +100 basis points | 2.0% | | -100 basis points | (4.8%) | | -400 basis points | (20.4%) | [Item 4. Controls and Procedures](index=143&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms effective disclosure controls and procedures as of September 30, 2025, with no material changes in internal control [Disclosure Controls and Procedures](index=143&type=section&id=Disclosure%20Controls%20and%20Procedures) The Company's CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2025 - The Company's CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2025, providing reasonable assurance of achieving control objectives[479](index=479&type=chunk) [Changes in Internal Control Over Financial Reporting](index=143&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2025 - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2025[480](index=480&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=143&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses ongoing legal matters, specifically a Chapter 7 bankruptcy filing by Tricolor Holdings, LLC, impacting a $60.5 million loan facility - TBK Bank, SSB is the agent bank for a **$60.5 million** floorplan loan facility for Tricolor Holdings, LLC, holding **$22.5 million**. - Tricolor filed for Chapter 7 bankruptcy on September 10, 2025, with public reports alleging fraud. - The Bank believes its collateral position adequately secures the loan, but potential disputes over vehicle inventory and additional claims could materially impact the Company's financial condition[483](index=483&type=chunk) [Item 1A. Risk Factors](index=143&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the Company's risk factors have occurred since the December 31, 2024 Annual Report on Form 10-K - No material changes in risk factors have occurred since the Annual Report on Form 10-K for December 31, 2024[484](index=484&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=143&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds are reported for the period - No unregistered sales of equity securities or use of proceeds to report[485](index=485&type=chunk) [Item 3. Defaults Upon Senior Securities](index=145&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No applicable defaults upon senior securities are reported for the period - Not applicable; no defaults upon senior securities to report[487](index=487&type=chunk) [Item 4. Mine Safety Disclosures](index=145&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No applicable mine safety disclosures are reported for the period - Not applicable; no mine safety disclosures to report[488](index=488&type=chunk) [Item 5. Other Information](index=145&type=section&id=Item%205.%20Other%20Information) This section details insider trading arrangements, specifically Rule 10b5-1(c) trading plans adopted by executive officers - **Aaron P. Graft (President and CEO):** Adopted a Rule 10b5-1 trading plan on August 29, 2024, to sell up to **54,000** shares by November 28, 2025. - **Edward J. Schreyer (EVP and COO):** Adopted a Rule 10b5-1 trading plan on March 4, 2025, to sell up to **90%** of net shares from vested equity awards. This plan was terminated as of September 2, 2025, after all shares were sold. - **Adam D. Nelson (EVP and General Counsel):** Adopted a Rule 10b5-1 trading plan on March 12, 2025, to sell up to **10,000** shares by March 31, 2026[489](index=489&type=chunk)[490](index=490&type=chunk)[491](index=491&type=chunk) [Item 6. Exhibits](index=146&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, agreements, and certifications - Includes organizational documents (Certificate of Formation, Bylaws), a Separation Agreement, and certifications from the CEO and CFO. - Also includes Inline XBRL Instance Document and Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[494](index=494&type=chunk)[495](index=495&type=chunk)

Financial Performance - Net income for Q3 2025 was $0.9 million, or $0.04 per diluted share, impacted by non-core expenses of $4.4 million due to restructuring efforts[1] - Total revenue for 2Q25 was $40.8 million, decreasing to $39.7 million in 3Q25, while adjusted total revenue slightly increased from $38.7 million to $38.8 million[66] - Net income available to common stockholders was $907 thousand, a decrease from $4,546 thousand in the same quarter last year[76] - Net income for the three months ended September 30, 2025, was $1,708, a decrease of 61.4% from $4,420 in the previous quarter[78] - The net income to common stockholders for the three months ended September 30, 2025, was $907,000, a decrease from $3,618,000 in the previous quarter[79] Revenue Growth - Transportation revenue grew 3.7% quarter-over-quarter in Q3, with Payments revenue increasing by 7.4% and EBITDA margin improving to 16.8%[4] - The company aims for annual transportation revenue growth of 20%[4] - Payments revenue grew 7.4% in Q3 to an annualized rate of $74.0 million, driven by new customer additions and expected repricing efforts[16] - The annualized adjusted total transportation revenue increased from $228.8 million to $237.2 million[66] - Total purchased volume reached $3.0 billion for the quarter, representing a 4.3% increase over the previous quarter and a 14.9% increase year-over-year[38] Operational Efficiency - The company is focusing on improving operational efficiency through AI tools and restructuring efforts, with ongoing progress expected into 2026[4] - The integrated value chain is expected to drive sustainable revenue growth and margin expansion, enhancing profitability and reducing fraud[8] - The company is focused on strategic investments to enhance customer efficiency and revenue generation, while maintaining expense discipline[64] Expenses and Cost Management - Total expenses were reduced by approximately 5% in Q3, with projected expenses for Q4 expected to be $96.5 million, which is 4.5% below adjusted Q2 2025 numbers[4] - Total noninterest expense increased from $100.8 million in 2Q25 to $103.7 million in 3Q25, with adjusted noninterest expense decreasing from $101.1 million to $99.3 million[65] - Total noninterest expense for the three months ended September 30, 2025, was $103,714, an increase of 2.0% from $100,840 in the previous quarter[78] Customer Engagement and Market Potential - LoadPay accounts nearly doubled to 4,421, with expectations to open between 5,000 and 10,000 accounts in 2025[26] - The company has sized the LoadPay addressable market at about $100 million, indicating significant growth potential[25] - The inclusion of Triumph Factoring's broker-related volumes contributed to a significant increase in network engagement metrics this quarter[67] Banking and Loans - Total assets increased to $6,357,149 thousand from $5,866,046 thousand year-over-year, representing an 8.36% growth[76] - Loans held for investment rose to $4,986,922 thousand, up from $4,332,967 thousand, marking a 15.11% increase compared to the previous year[76] - Total loans held for investment as of September 30, 2025, amounted to $4,986,922,000, an increase from $4,953,170,000 in the previous quarter[80] Challenges and Risks - The U.S. trucking industry remains in a correction phase, with excess capacity leading to stagnant rates and margin pressures for carriers[58] - Forward-looking statements indicate potential risks including economic conditions, credit risk, and regulatory changes that could impact future performance[72] Innovation and Future Outlook - The company launched an integrated Pricing and Performance Intelligence solution, enhancing freight brokers' decision-making capabilities[49] - The company is committed to innovation to address future challenges and capitalize on emerging opportunities[64]

Financial Performance - For the six months ended June 30, 2025, net income available to common stockholders was $2.8 million, or $0.12 per diluted share, compared to $5.3 million, or $0.22 per diluted share for the same period in 2024[239]. - Net income available to common stockholders for the three months ended June 30, 2025, was $3,618 thousand, compared to $1,945 thousand in 2024, reflecting an increase of 85.9%[255]. - Net income for the three months ended June 30, 2025, was $4.4 million, an increase of $1.7 million or 60.9% compared to $2.7 million in the same period of 2024[260]. - Net income for the six months ended June 30, 2025, was $4.4 million, a decrease of $2.5 million or 35.7% compared to $6.9 million for the same period in 2024[325]. - The company reported a net income before income tax expense of $68.382 million for the six months ended June 30, 2025[366]. Assets and Loans - As of June 30, 2025, the company had total assets of $6.495 billion, total loans held for investment of $4.953 billion, and total deposits of $5.186 billion[229]. - Total assets increased to $6,494,748 thousand as of June 30, 2025, up from $5,948,975 thousand at the end of 2024[256]. - Total loans held for investment increased by $406.2 million during the six months ended June 30, 2025, with Banking loans increasing by 6.3% and Factoring receivables increasing by 13.7%[240]. - Loans held for investment rose to $4.953 billion at June 30, 2025, an increase of 8.9% from $4.547 billion at December 31, 2024[395]. - The aggregate outstanding balances of banking products increased by $208.9 million, or 6.3%, to $3.549 billion as of June 30, 2025[375]. Income and Expenses - Noninterest income for the six months ended June 30, 2025, was $36,574 thousand, an increase from $32,166 thousand in 2024[255]. - Noninterest income increased by $2.2 million, or 12.9%, reaching $19.4 million for the three months ended June 30, 2025[261]. - Total noninterest expense rose by $3.5 million, or 3.6%, to $100.840 million, with salaries and employee benefits increasing by $3.9 million, or 6.9%[284]. - Total noninterest expense increased to $142.204 million, with significant increases in other noninterest expenses by $5.4 million, or 48.2%[357]. - Noninterest income totaled $34.896 million, with the Payments segment contributing $14.255 million and the Intelligence segment contributing $2.119 million[366]. Credit Quality - The past due to total loans ratio improved to 2.21% as of June 30, 2025, down from 3.27% at the end of 2024[256]. - Credit loss expense showed a significant improvement, with a benefit of $702, compared to an expense of $4.2 million in the prior year, reflecting a change of 116.9%[261][274]. - Total credit loss expense decreased by $4.9 million, or 116.9%, to $(702) thousand for the three months ended June 30, 2025, compared to $4,155 thousand in the same period of 2024[275]. - Credit loss expense on loans decreased by $8.2 million, or 91.1%, to $798 thousand for the six months ended June 30, 2025 compared to $8.977 million in the same period of 2024[343]. - Nonperforming loans decreased by $55.8 million, or 49.2%, due to various payoffs and decreases in nonperforming relationships[412]. Segment Performance - The Banking segment generated 59% of total segment revenue, while the Factoring segment contributed 30%, Payments segment 10%, and Intelligence segment 1% for the six months ended June 30, 2025[237]. - The Payments segment processed 8.5 million invoices, paying Carriers a total of $10.081 billion during the three months ended June 30, 2025, compared to $6.688 billion for 6.1 million invoices in the same period a year ago[244]. - The Factoring segment's operating income increased by $15.1 million, or 326.9%, to $19.8 million in Q2 2025[308]. - Noninterest income in the Payments segment increased by $2.845 million, or 24.9%, to $14.255 million[384]. - The Payments segment's revenue is derived from transaction fees and interest income on factored receivables, indicating a focus on liquidity options for Brokers[356]. Acquisitions and Investments - The company acquired Greenscreens AI, Inc. for $139.1 million in cash and $12.7 million in common stock on May 8, 2025[245]. - The acquisition of HubTran in 2021 was a significant turning point, shifting the focus to an open-loop payments network for the trucking industry, enhancing fee revenue[390]. - The company launched its Intelligence business in Q4 2024, focusing on actionable insights for the trucking industry, coinciding with the acquisition of Isometric Technologies[235]. - The company acquired a $23.4 million nonperforming equipment finance commercial loan for $3.3 million, establishing a $10.8 million ACL on Day 1[279]. - The company recognized a benefit to credit loss expense of $0.1 million during the current quarter, compared to $27 thousand in the same period a year ago[277]. Tax and Regulatory - The effective tax rate increased to 44% for the three months ended June 30, 2025, compared to 23% for the same period in 2024, influenced by higher state tax rates and disallowed expenses[287]. - The effective tax rate increased to 44% for the six months ended June 30, 2025, compared to 17% for the same period in 2024, influenced by limited stock-based compensation deductibility and higher state tax rates[355].

July 16, 2025 Fellow Shareholders, For the second quarter, we recorded net income to common stockholders of $3.6 million, or $0.15 per diluted share. It was the textbook definition of a noisy quarter, but there were encouraging signals within the noise. Our results include certain non-core gains and recoveries detailed in the table below. A substantial portion of the gain and recovery this quarter is attributable to settling our long-running litigation with the United States Postal Service (USPS). This liti ...

Table of Contents 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, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission F ...

Exhibit 99.1 April 16, 2025 Fellow Shareholders, For the first quarter, we recorded a net loss to common stockholders of $(0.8) million, or $(0.03) per diluted share. These results include certain non-core expenses totaling just under $3.0 million, partially offset by $0.8 million in non-core gains. Those items negatively impacted EPS by $0.07. Here are a few things I think investors should note for the first quarter: • We foresaw a quarter like this was possible, even if we hoped against it. Our product st ...