Triumph Financial(US:TFIN)2023-07-21 18:21Financial Data and Key Metrics Changes - The company reported a revenue run rate of just under $43 million, up from $38 million at the end of the last quarter, indicating a significant increase in annualized revenue [24][54]. - Earnings were impacted by a freight recession and rising funding costs, leading to a decrease in earnings compared to prior periods [4][14]. Business Line Data and Key Metrics Changes - The Payments segment demonstrated profitable growth despite a challenging market environment, with expectations to capitalize on future market improvements [5][14]. - The Corporate segment expenses increased noticeably, attributed to support functions such as technology, finance, and human resources [27]. Market Data and Key Metrics Changes - The freight market is currently experiencing a recession, with rates approximately 17% below breakeven for many carriers [85]. - The company has seen a decrease in freight under management from $37 billion to $35 billion, despite a 6% increase in transaction volume [83]. Company Strategy and Development Direction - The company aims to position TriumphPay as the payments network for trucking, focusing on supply chain financing as a key growth area [14][17]. - There is a strategy to partner with and invest in technology companies to enhance competitive capabilities against legacy players [49][50]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, stating that the current freight recession will not last indefinitely and that they are prepared to support clients through this period [86]. - The company is focused on maintaining a strong capital position to navigate uncertainties and pursue growth opportunities [160]. Other Important Information - The company has a significant amount of payment volume expected to come online, estimated at roughly $9 billion in the next few quarters [40]. - The management highlighted the importance of data and technology in enhancing operational efficiency and customer value [57][82]. Q&A Session Summary Question: Can you discuss the term of broker deposits and funding profile? - Management indicated that broker deposits generally have terms ranging from one month to a year, and the company is leveraging its own deposits for supply chain financing [19][20]. Question: What is the expected payment and audit volume from new customer wins? - The company expects a significant increase in payment volume from new customer wins, with a current revenue run rate of just under $43 million [24][40]. Question: Can you provide insights on the increase in Corporate segment expenses? - The increase in Corporate segment expenses is due to support functions for the enterprise, including executive team and technology costs [27]. Question: What are the long-term impacts of adding Highway and Trax? - Management believes that these investments will enhance the network's capabilities and generate significant data and float over time [50][51]. Question: How is the company managing its equipment finance portfolio amid the freight recession? - The company is requiring down payments to maintain safe long-term loan values and is working with long-term relationships to manage credit performance [157][159]. Question: What is the company's approach to share buybacks? - The company maintains a consistent appetite for buybacks, evaluating opportunities based on long-term value creation and capital needs [141][169].