tbk-10q_20150630.htm

 

  

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to            

Commission File Number 001-36722

 

TRIUMPH BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

 

Texas

 

20-0477066

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

12700 Park Central Drive, Suite 1700

Dallas, Texas 75251

(Address of principal executive offices)

(214) 365-6900

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

¨

Accelerated filer

¨

 

 

 

 

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock — $0.01 par value, 18,041,072 shares, as of July 31, 2015

 

 

 

 

 

 


 

TRIUMPH BANCORP, INC.

FORM 10-Q

June 30, 2015

TABLE OF CONTENTS

 

PART I — FINANCIAL INFORMATION

 

 

    Item 1.

 

Financial Statements

 

 

 

   Consolidated Balance Sheets

2

 

 

   Consolidated Statements of Income

3

 

 

   Consolidated Statements of Comprehensive Income

4

 

 

   Consolidated Statements of Changes in Equity

5

 

 

   Consolidated Statements of Cash Flows

6

 

 

   Condensed Notes to Consolidated Financial Statements

7

 

    Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

33

 

    Item 3.

 

Quantitative and Qualitative Disclosures About Market Risks

69

 

    Item 4.

 

Controls and Procedures

70

 

 

PART II — OTHER INFORMATION

 

 

    Item 1.

 

Legal Proceedings

71

 

    Item 1A.

 

Risk Factors

71

 

    Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

71

 

    Item 3.

 

Defaults Upon Senior Securities

71

 

    Item 4.

 

Mine Safety Disclosures

71

 

    Item 5.

 

Other Information

71

 

    Item 6.

 

Exhibits

72

 

 

 

 

i


 

PART I – FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

 

 

 

 

1


 

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2015 and December 31, 2014

(Dollar amounts in thousands, except per share amounts)

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2015

 

 

2014

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

27,678

 

 

$

21,312

 

Interest bearing deposits with other banks

 

 

72,036

 

 

 

139,576

 

Total cash and cash equivalents

 

 

99,714

 

 

 

160,888

 

Securities - available for sale

 

 

158,693

 

 

 

162,024

 

Securities - held to maturity, fair value of $744 and $750, respectively

 

 

746

 

 

 

745

 

Loans held for sale, at fair value

 

 

4,096

 

 

 

3,288

 

Loans, net of allowance for loan and lease losses of $11,462 and $8,843, respectively

 

 

1,141,217

 

 

 

997,035

 

Federal Home Loan Bank and Federal Reserve Bank stock, at cost

 

 

5,707

 

 

 

4,903

 

Premises and equipment, net

 

 

21,677

 

 

 

21,933

 

Other real estate owned, net

 

 

6,322

 

 

 

8,423

 

Goodwill

 

 

15,968

 

 

 

15,968

 

Intangible assets, net

 

 

14,206

 

 

 

13,089

 

Bank-owned life insurance

 

 

29,295

 

 

 

29,083

 

Deferred tax assets, net

 

 

15,582

 

 

 

15,956

 

Other assets

 

 

16,036

 

 

 

14,563

 

Total assets

 

$

1,529,259

 

 

$

1,447,898

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Noninterest bearing

 

$

164,560

 

 

$

179,848

 

Interest bearing

 

 

1,024,699

 

 

 

985,381

 

Total deposits

 

 

1,189,259

 

 

 

1,165,229

 

Customer repurchase agreements

 

 

13,011

 

 

 

9,282

 

Federal Home Loan Bank advances

 

 

19,000

 

 

 

3,000

 

Junior subordinated debentures

 

 

24,553

 

 

 

24,423

 

Other liabilities

 

 

25,957

 

 

 

8,455

 

Total liabilities

 

 

1,271,780

 

 

 

1,210,389

 

Commitments and contingencies - See Note 8 and Note 9

 

 

 

 

 

 

 

 

Stockholders' equity - See Note 12

 

 

 

 

 

 

 

 

Preferred Stock Series A

 

 

4,550

 

 

 

4,550

 

Preferred Stock Series B

 

 

5,196

 

 

 

5,196

 

Common stock

 

 

181

 

 

 

180

 

Additional paid-in-capital

 

 

192,605

 

 

 

191,049

 

Treasury stock, at cost

 

 

(170

)

 

 

(161

)

Retained earnings

 

 

54,053

 

 

 

35,744

 

Accumulated other comprehensive income

 

 

1,064

 

 

 

951

 

Total stockholders’ equity

 

 

257,479

 

 

 

237,509

 

Total liabilities and stockholders' equity

 

$

1,529,259

 

 

$

1,447,898

 

See accompanying condensed notes to consolidated financial statements.

 

 

 

 

2


 

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

For the Three and Six Months Ended June 30, 2015 and 2014

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

17,158

 

 

$

13,860

 

 

$

30,397

 

 

$

28,236

 

Factored receivables, including fees

 

 

8,654

 

 

 

6,838

 

 

 

16,163

 

 

 

12,110

 

Taxable securities

 

 

659

 

 

 

663

 

 

 

1,337

 

 

 

1,319

 

Tax exempt securities

 

 

16

 

 

 

15

 

 

 

28

 

 

 

31

 

Cash deposits

 

 

110

 

 

 

77

 

 

 

251

 

 

 

135

 

Total interest income

 

 

26,597

 

 

 

21,453

 

 

 

48,176

 

 

 

41,831

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,667

 

 

 

1,141

 

 

 

3,237

 

 

 

2,249

 

Senior secured note

 

 

 

 

 

137

 

 

 

 

 

 

276

 

Junior subordinated debentures

 

 

278

 

 

 

272

 

 

 

550

 

 

 

543

 

Other

 

 

7

 

 

 

22

 

 

 

19

 

 

 

28

 

Total interest expense

 

 

1,952

 

 

 

1,572

 

 

 

3,806

 

 

 

3,096

 

Net interest income

 

 

24,645

 

 

 

19,881

 

 

 

44,370

 

 

 

38,735

 

Provision for loan losses

 

 

2,541

 

 

 

1,747

 

 

 

3,186

 

 

 

2,672

 

Net interest income after provision for loan losses

 

 

22,104

 

 

 

18,134

 

 

 

41,184

 

 

 

36,063

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

666

 

 

 

813

 

 

 

1,278

 

 

 

1,552

 

Card income

 

 

578

 

 

 

548

 

 

 

1,101

 

 

 

1,037

 

Net OREO gains (losses) and valuation adjustments

 

 

52

 

 

 

(252

)

 

 

78

 

 

 

(329

)

Net gains on sale of securities

 

 

242

 

 

 

 

 

 

242

 

 

 

16

 

Net gains on sale of loans

 

 

491

 

 

 

319

 

 

 

1,033

 

 

 

575

 

Fee income

 

 

502

 

 

 

421

 

 

 

924

 

 

 

819

 

Bargain purchase gain

 

 

 

 

 

 

 

 

12,509

 

 

 

 

Asset management fees

 

 

1,274

 

 

 

129

 

 

 

2,232

 

 

 

129

 

Other

 

 

964

 

 

 

655

 

 

 

2,031

 

 

 

1,444

 

Total noninterest income

 

 

4,769

 

 

 

2,633

 

 

 

21,428

 

 

 

5,243

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

12,042

 

 

 

9,471

 

 

 

25,311

 

 

 

18,347

 

Occupancy, furniture and equipment

 

 

1,555

 

 

 

1,336

 

 

 

3,127

 

 

 

2,725

 

FDIC insurance and other regulatory assessments

 

 

271

 

 

 

280

 

 

 

534

 

 

 

541

 

Professional fees

 

 

852

 

 

 

793

 

 

 

2,179

 

 

 

1,385

 

Amortization of intangible assets

 

 

895

 

 

 

724

 

 

 

1,659

 

 

 

1,451

 

Advertising and promotion

 

 

526

 

 

 

683

 

 

 

1,069

 

 

 

1,126

 

Communications and technology

 

 

927

 

 

 

945

 

 

 

1,813

 

 

 

1,834

 

Other

 

 

2,567

 

 

 

1,928

 

 

 

4,726

 

 

 

3,647

 

Total noninterest expense

 

 

19,635

 

 

 

16,160

 

 

 

40,418

 

 

 

31,056

 

Net income before income tax

 

 

7,238

 

 

 

4,607

 

 

 

22,194

 

 

 

10,250

 

Income tax expense

 

 

2,586

 

 

 

1,626

 

 

 

3,498

 

 

 

3,542

 

Net income

 

 

4,652

 

 

 

2,981

 

 

 

18,696

 

 

 

6,708

 

Income attributable to noncontrolling interests

 

 

 

 

 

(500

)

 

 

 

 

 

(887

)

Net income attributable to Triumph Bancorp, Inc.

 

 

4,652

 

 

 

2,481

 

 

 

18,696

 

 

 

5,821

 

Dividends on preferred stock

 

 

(195

)

 

 

(196

)

 

 

(387

)

 

 

(388

)

Net income available to common stockholders

 

$

4,457

 

 

$

2,285

 

 

$

18,309

 

 

$

5,433

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.25

 

 

$

0.23

 

 

$

1.03

 

 

$

0.55

 

Diluted

 

$

0.25

 

 

$

0.23

 

 

$

1.01

 

 

$

0.55

 

See accompanying condensed notes to consolidated financial statements.

 

 

 

3


 

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended June 30, 2015 and 2014

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Net income

 

$

4,652

 

 

$

2,981

 

 

$

18,696

 

 

$

6,708

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) arising during the period

 

 

(557

)

 

 

574

 

 

 

431

 

 

 

1,159

 

Reclassification of amount realized through sale of securities

 

 

(242

)

 

 

 

 

 

(242

)

 

 

(16

)

Tax effect

 

 

292

 

 

 

(218

)

 

 

(76

)

 

 

(435

)

Total other comprehensive income (loss)

 

 

(507

)

 

 

356

 

 

 

113

 

 

 

708

 

Comprehensive income

 

 

4,145

 

 

 

3,337

 

 

 

18,809

 

 

 

7,416

 

Income attributable to noncontrolling interests

 

 

 

 

 

(500

)

 

 

 

 

 

(887

)

Comprehensive income attributable to Triumph Bancorp, Inc.

 

$

4,145

 

 

$

2,837

 

 

$

18,809

 

 

$

6,529

 

See accompanying condensed notes to consolidated financial statements.

 

 

 

 

4


 

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Six Months Ended June 30, 2015 and 2014

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

 

 

 

 

Preferred Stock – Series A

 

 

Preferred Stock – Series B

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidation

 

 

 

 

 

 

Liquidation

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

Non

 

 

 

 

 

 

 

Shares

 

 

Preference

 

 

Shares

 

 

Preference

 

 

Shares

 

 

Par

 

 

Paid-in-

 

 

Shares

 

 

 

 

 

 

Retained

 

 

Comprehensive

 

 

Controlling

 

 

Total

 

 

 

Outstanding

 

 

Amount

 

 

Outstanding

 

 

Amount

 

 

Outstanding

 

 

Amount

 

 

Capital

 

 

Outstanding

 

 

Cost

 

 

Earnings

 

 

Income

 

 

Interest

 

 

Equity

 

Balance, January 1, 2014

 

 

45,500

 

 

$

4,550

 

 

 

51,956

 

 

$

5,196

 

 

 

9,832,585

 

 

$

98

 

 

$

104,631

 

 

 

 

 

$

 

 

$

18,992

 

 

$

133

 

 

$

26,997

 

 

$

160,597

 

Vesting of restricted stock units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

196

 

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(277

)

 

 

 

 

 

 

 

 

277

 

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

(4

)

Series T-1 and T-2 dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(730

)

 

 

 

 

 

 

 

 

(730

)

Series A Preferred dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(182

)

 

 

 

 

 

 

 

 

(182

)

Series B Preferred dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(206

)

 

 

 

 

 

 

 

 

(206

)

TCF Class B distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(63

)

 

 

 

 

 

 

 

 

(63

)

TCF Class B redemption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,100

)

 

 

(1,100

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,708

 

 

 

 

 

 

 

 

 

6,708

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

708

 

 

 

 

 

 

708

 

Balance, June 30, 2014

 

 

45,500

 

 

$

4,550

 

 

 

51,956

 

 

$

5,196

 

 

 

9,845,819

 

 

$

98

 

 

$

104,827

 

 

 

277

 

 

$

(4

)

 

$

24,519

 

 

$

841

 

 

$

25,897

 

 

$

165,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2015

 

 

45,500

 

 

$

4,550

 

 

 

51,956

 

 

$

5,196

 

 

 

17,963,783

 

 

$

180

 

 

$

191,049

 

 

 

10,984

 

 

$

(161

)

 

$

35,744

 

 

$

951

 

 

$

 

 

$

237,509

 

Issuance of restricted stock awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

77,956

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of restricted stock awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(667

)

 

 

 

 

 

9

 

 

 

667

 

 

 

(9

)

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,548

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,548

 

Series A Preferred dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(181

)

 

 

 

 

 

 

 

 

(181

)

Series B Preferred dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(206

)

 

 

 

 

 

 

 

 

(206

)

Net income