Triumph Financial(TFIN) - 2024 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2024, net income available to common stockholders was $4.5 million, or$ 0.19 per diluted share, a decrease from $12.0 million, or$ 0.51 per diluted share for the same period in 2023[179]. - Net income for Q3 2024 was $5,347,000, down from$ 12,794,000 in Q3 2023, representing a decline of about 58%[189]. - Net income for the nine months ended September 30, 2024, was $12.3 million, down from$ 31.5 million in the same period of 2023, a decrease of $19.2 million or 61.0%[257]. - Operating income for the Banking segment decreased by$ 7.9 million, or 21.4%, to $29.1 million[232]. - Corporate and Other reported an operating loss of$ 28.1 million for Q3 2024, compared to a loss of $24.2 million in Q3 2023, an increase in loss of$ 3.9 million or 16.2%[256]. Revenue and Income Sources - The Banking segment generated 61% of total segment revenue, the Factoring segment generated 30%, and the Payments segment generated 9% for the nine months ended September 30, 2024[178]. - Noninterest income increased to $17,497,000 in Q3 2024 from$ 13,410,000 in Q3 2023, reflecting a growth of approximately 30.5%[189]. - Noninterest income rose to $49.7 million for the nine months ended September 30, 2024, compared to$ 35.9 million in 2023, representing a growth of 38.2%[258]. - Total interest income for the nine months ended September 30, 2024, was $317.0 million, a slight increase of$ 3.3 million or 1.1% from $313.7 million in 2023[258]. Asset and Loan Growth - As of September 30, 2024, the company had total assets of$ 5.866 billion, total loans held for investment of $4.333 billion, and total deposits of$ 4.707 billion[173]. - Total loans held for investment increased by $169.9 million during the nine months ended September 30, 2024, with Banking loans increasing by 2.7% and Factoring receivables increasing by 9.5%[180]. - Total assets increased to$ 5,866,046,000 as of September 30, 2024, compared to $5,347,334,000 at the end of 2023, marking a growth of approximately 9.7%[191]. - The aggregate outstanding balances of banking products increased by$ 82.9 million, or 2.7%, to $3.129 billion as of September 30, 2024[302]. Credit Quality and Losses - Nonperforming loans to total loans ratio increased to 2.62% as of September 30, 2024, compared to 1.65% at the end of 2023, indicating a deterioration in asset quality[191]. - Credit loss expense on loans increased by$ 4.1 million, or 392.3%, for the three months ended September 30, 2024, compared to the same period in 2023[212]. - The allowance for credit losses (ACL) on loans was $41.2 million as of September 30, 2024, representing an ACL to total loans ratio of 0.95%[212]. - Total credit loss expense rose to$ 14.3 million for the nine months ended September 30, 2024, up from $6.1 million in the same period in 2023, representing a 135.9% increase[270]. Expenses and Efficiency - Total noninterest expense increased to$ 95,646 thousand in Q3 2024, up 10.9% from $86,259 thousand in Q3 2023[197]. - The efficiency ratio for Q3 2024 was 90.06%, compared to 82.36% in Q3 2023, suggesting increased operational costs relative to income[189]. - Salaries and employee benefits expenses increased by$ 4.6 million, or 9.0%, driven by an increase in workforce size to an average of 1,542.3 full-time equivalent employees[218]. - Total noninterest expense increased by $17.4 million or 6.6%, totaling$ 283.4 million for the nine months ended September 30, 2024[280]. Capital and Equity - Total stockholders' equity increased by $21.4 million during the nine months ended September 30, 2024, reaching$ 885.8 million[181]. - The company reported a book value per share of $35.95 as of September 30, 2024, up from$ 35.16 at the end of 2023[191]. - The company’s stockholders' equity increased to $885.8 million as of September 30, 2024, up from$ 864.4 million at the end of 2023, primarily due to net income of $12.3 million[361]. Deposits and Funding - Total deposits rose by$ 729.2 million, or 18.3%, to $4.706694 billion, primarily driven by an increase in noninterest bearing demand deposits and brokered time deposits[351]. - The average daily balance of customer repurchase agreements was$ 723 thousand for the year ended December 31, 2023, with a weighted average interest rate of 0.03%[354]. - The company’s deposit base is diverse, with a significant portion being FDIC insured, reflecting a normalizing trend from pandemic-era balances[352]. Strategic Initiatives and Investments - The company made a $9.7 million minority investment in Trax Group, Inc. for transportation spend management solutions[186]. - The acquisition of HubTran has shifted TriumphPay's strategy towards an open-loop payments network, enhancing its presentment, audit, and payment capabilities[253]. - The company has enhanced its stress testing to mitigate interest rate reset risk due to rising market interest rates since 2022[333]. Market and Economic Outlook - The company forecasts minimal change in national unemployment and a slight decline in national retail sales over the next quarters[342]. - Forward-looking statements indicate that actual results may differ materially from expectations due to inherent uncertainties[371].