Triumph Bancorp takes coronavirus loss, gets out of insurance premium financing

In first-quarter 2020 earnings released after markets closed Monday, Triumph Bancorp (NASDAQ: TBK) reported a net loss to common shareholders of $4.5 million or diluted losses per share of 18 cents, lower than the Street’s expectations of earnings per share of 24 cents.

The bank said that due to worsening economic conditions, it recorded $20.3 million of total credit loss expense; $10.5 million was directly attributable to the impact of COVID-19.

In the first quarter, Triumph bought back $35.6 million worth of stock, completing the $50 million stock repurchase program that its board had authorized in October.

Triumph announced that it had agreed to sell Triumph Premium Finance, which issues loans to cover the borrower’s insurance premium costs, transferring $98 million of loans to “assets held for sale.”

As the yield curve flattened further in the first quarter of 2020, Triumph’s net interest margin (NIM) compressed to 5.63% from 5.72% in the fourth quarter of 2019.

Total loans held for investment increased $126 million, or 3%, to $4.321 billion.

TriumphPay, the trucking carrier payments business, has grown dramatically over the past year. In the first quarter of 2020, TriumphPay processed 504,250 invoices for a total of $530.8 million, compared with 114,066 invoices worth $141 million in the first quarter of 2019.

The total dollar value of invoices purchased by Triumph Business Capital for the first quarter was $1.451 billion, with an average invoice size of $1,651. The transportation average invoice size for the quarter was $1,481.

Triumph’s asset quality deteriorated as the macroeconomic backdrop weakened. Nonperforming assets — defined as loans for which principal or payments are overdue by 90 days — ticked up 22 basis points quarter-on-quarter to 1.09% of total assets.

The ratio of past due to total loans increased to 1.99% at March 31, 2020, from 1.74% at Dec. 31, 2019 (these numbers have been updated relative to past releases after Triumph changed its reporting to be more in line with industry peers).