Triumph Beats Earnings Estimates, Quintuples Carrier Payments Business

Triumph Bancorp TBK reported earnings for the fourth quarter of 2019 on Tuesday after markets closed.

Triumph reported net income available to shareholders of $16.7 million or earnings per share of $0.66, beating the Street's expectations of $0.63 but down 7.7% year-over-year. In the fourth quarter of 2019, Triumph bought back $14.4 million of its own stock.

As the yield curve flattened over the past year, Triumph's net interest margin (NIM) compressed to 5.72% from 6.34%  in the fourth quarter of 2018.

Total loans held for investment fell 0.4% quarter-on-quarter to $4.195 billion but grew 16.2% on a year-over-year basis.

TriumphPay, the trucking carrier payments factoring business, has grown dramatically since the fourth quarter of 2018. In the fourth quarter of 2019, TriumphPay processed 442,428 invoices for a total of $474.9 million, compared with 83,326 invoices worth $123.1 million in the fourth quarter of 2018.

Embedded in TriumphPay's payments data is a read-through to the trucking market. In the fourth quarter of 2018, TriumphPay's average invoice was $1,477; in the fourth quarter of 2019, the average invoice was worth just $1,073, a difference of 27.3%.

We believe that generally falling trucking spot rates over that period only account for about a 7.8% drop in invoice size; the rest of the difference is largely due to TriumphPay's changing customer mix as the business expanded.

Triumph has been able to improve its asset quality numbers on both a quarterly and annual basis. Nonperforming assets — defined as loans for which principal or payments are overdue by 90 days — declined 4 basis points quarter-on-quarter to 0.87% of total assets. The ratio of the past due to total loans also decreased quarter-on-quarter to 2.19%.

In the third quarter of 2018, nonperforming assets were 0.84% of total assets and the ratio of past due to total loans was 2.41%.

Image by Hyein Nam from Pixabay