TRIUMPH FINANCIAL, INC. FORM 10-Q SEPTEMBER 30, 2024

Press release · 10/16 20:30
TRIUMPH FINANCIAL, INC. FORM 10-Q SEPTEMBER 30, 2024

TRIUMPH FINANCIAL, INC. FORM 10-Q SEPTEMBER 30, 2024

Triumph Financial, Inc. (TFIN) reported its quarterly financial results for the period ended September 30, 2024. The company’s consolidated net income was $[insert amount], a decrease of [insert percentage] compared to the same period last year. Total revenue was $[insert amount], a decrease of [insert percentage] compared to the same period last year. The company’s net interest income was $[insert amount], a decrease of [insert percentage] compared to the same period last year. Non-interest income was $[insert amount], a decrease of [insert percentage] compared to the same period last year. The company’s total assets were $[insert amount], an increase of [insert percentage] compared to the same period last year. The company’s total liabilities were $[insert amount], an increase of [insert percentage] compared to the same period last year. The company’s stockholders’ equity was $[insert amount], a decrease of [insert percentage] compared to the same period last year.

Overview

Triumph Financial, Inc. is a financial holding company headquartered in Dallas, Texas that offers a diversified line of payments, factoring and banking services. As of September 30, 2024, the company had consolidated total assets of $5.866 billion, total loans held for investment of $4.333 billion, total deposits of $4.707 billion and total stockholders’ equity of $885.8 million.

The company operates through three main segments:

  1. Banking: Offers traditional banking services, commercial lending products, and national lending products through its wholly owned bank subsidiary, TBK Bank. This segment generated 61% of the company’s total segment revenue for the nine months ended September 30, 2024.

  2. Factoring: Provides working capital to the trucking industry through the purchase of invoices generated by medium to large sized trucking fleets. This segment generated 30% of the company’s total segment revenue.

  3. Payments: Operates TriumphPay, a payments network for the over-the-road trucking industry that connects brokers, shippers, factors and carriers. This segment generated 9% of the company’s total segment revenue.

Third Quarter 2024 Overview

  • Net income available to common stockholders was $4.5 million, or $0.19 per diluted share, compared to $12.0 million, or $0.51 per diluted share, in Q3 2023.
  • Total assets increased to $5.866 billion, including $4.333 billion in gross loans held for investment, compared to $5.347 billion in total assets and $4.163 billion in gross loans at the end of 2023.
  • Total deposits increased to $4.707 billion, up from $3.977 billion at the end of 2023.
  • Capital ratios remained strong, with Tier 1 capital and total capital to risk-weighted assets ratios of 13.57% and 16.62%, respectively, at September 30, 2024.

Revenue and Profit Trends

  • Net interest income decreased 2.8% to $88.7 million in Q3 2024 from $91.3 million in Q3 2023, primarily due to lower yields on loans and higher interest expense.
  • Noninterest income increased 30.5% to $17.5 million in Q3 2024, driven by higher fees and other income.
  • Noninterest expense increased 10.9% to $95.6 million in Q3 2024, mainly due to higher salaries, occupancy, and technology costs.
  • Credit loss expense increased significantly to $4.3 million in Q3 2024 from $0.8 million in Q3 2023, primarily due to higher specific reserves and net charge-offs.

Strengths and Weaknesses

Strengths:

  • Diversified business model with banking, factoring, and payments segments
  • Strong capital and liquidity positions
  • Specialized expertise in the trucking industry

Weaknesses:

  • Exposure to softness in the freight and transportation markets
  • Increasing credit loss expense
  • Rising noninterest expenses outpacing revenue growth

Outlook

The company faces headwinds from the softness in the freight and transportation markets, which has led to lower invoice prices and equipment costs. However, the company has sufficient access to capital and the ability to diversify factoring income. Management plans to focus on managed growth in the factoring segment with a greater emphasis on enhancing efficiency and profitability. The company will also continue to invest in technology initiatives to improve operations and the customer experience across its business lines.