Triumph Financial(US:TFIN)2022-07-20 20:16Financial Performance - For the three months ended June 30, 2022, net income available to common stockholders was $43.4 million, or $1.74 per diluted share, compared to $27.2 million, or $1.08 per diluted share for the same period in 2021, representing a 60% increase in net income [234]. - Net income for the three months ended June 30, 2022, was $44.2 million, an increase of $16.2 million compared to $28.0 million for the same period in 2021 [283]. - For the six months ended June 30, 2022, net income was $68.5 million, an increase of $6.6 million compared to $61.9 million for the same period in 2021 [346]. - Adjusted net income for the three months ended June 30, 2021, was $30.3 million after accounting for $3.0 million in transaction costs related to the HubTran acquisition [284]. - Adjusted net income for the six months ended June 30, 2022, increased by $4.3 million, driven by a $31.1 million rise in noninterest income and a $28.2 million increase in net interest income [347]. Revenue Breakdown - The company's Banking segment generated 43% of total revenue, the Factoring segment generated 48%, and the Payments segment generated 8% for the six months ended June 30, 2022 [233]. - Noninterest income increased by $34.4 million, while net interest income rose by $11.1 million for the three months ended June 30, 2022 [284]. - Total revenue for the three months ended June 30, 2022, was $14.481 million, a significant increase of 285.5% from $3.758 million in the same period of 2021 [339]. - Total noninterest income increased by $31.1 million, or 110.3%, for the six months ended June 30, 2022, reaching $59.3 million [376]. Asset and Equity Position - As of June 30, 2022, the company had total assets of $5.956 billion, total loans held for investment of $4.435 billion, total deposits of $4.781 billion, and total stockholders' equity of $874.3 million [228]. - Total stockholders' equity increased by $15.4 million during the six months ended June 30, 2022, primarily due to net income, despite treasury stock purchases [238]. - Total stockholders' equity as of June 30, 2022, was $874.3 million, up from $858.9 million at the end of 2021 [282]. - Tangible book value per share increased to $22.84 as of June 30, 2022, compared to $21.34 at the end of 2021 [282]. Loan and Credit Quality - Total loans held for investment decreased by $432.2 million during the six months ended June 30, 2022, with Banking loans decreasing by 10.4% and Factoring factored receivables decreasing by 6.2% [236]. - Nonperforming loans to total loans remained stable at 0.95% as of June 30, 2022 [280]. - The allowance for credit loss (ACL) on loans was $43.4 million as of June 30, 2022, representing an ACL to total loans ratio of 0.98%, up from 0.87% as of December 31, 2021 [305]. - Credit loss expense for the three months ended June 30, 2022, was $2.9 million, compared to a benefit of $1.8 million in the same period of 2021 [275]. Operational Efficiency - The efficiency ratio improved to 59.23% for the three months ended June 30, 2022, compared to 67.96% in the same period of 2021 [275]. - The company reported a net noninterest expense to average assets ratio of 2.76% for the three months ended June 30, 2022, compared to 3.55% for the same period in 2021 [281]. - Noninterest expense increased by $17.8 million, or 25.2%, totaling $88.61 million for the three months ended June 30, 2022 [313]. Investment and Acquisitions - The acquisition of HubTran, Inc. for $97 million in cash is expected to enhance TriumphPay's capabilities in the trucking industry, shifting the focus from interest income to fee revenue [259][260]. - The acquisition of HubTran has allowed the company to shift its strategy towards a fee revenue model, enhancing its payment capabilities and creating a fully integrated payments network for the trucking industry [344]. - The company recognized a total loss on impairment of warrants of $3.2 million related to its investment in Warehouse Solutions Inc. due to changes in its investment structure [250]. Market and Industry Trends - The trucking transportation segment experienced steady volumes despite a slight decline in utilization, with spot rates continuing a slow decline due to rising diesel prices [262][264]. - The number of invoices processed increased by 38.7% from 3,165,119 in Q2 2021 to 4,388,711 in Q2 2022, while the amount of payments processed rose by 76.1% from $3.427 billion to $6.034 billion [340]. - The average invoice size in the Factoring segment increased by 6.5% to $2,332 for the three months ended June 30, 2022, up from $2,189 in the same period of 2021 [334]. Tax and Regulatory Compliance - The effective tax rate increased to 24% for the three months ended June 30, 2022, compared to 20% for the same period in 2021 [315]. - The company maintains access to multiple sources of liquidity, with all capital ratios exceeding regulatory requirements as of June 30, 2022 [270].