Triumph’s factoring business softens in most significant metrics

Triumph Bancorp’s factoring business got noticeably smaller in the second quarter of this year, according to the earnings released by the company Monday.

Triumph’s factoring business, which is 85% transportation, saw its book of business and the size of the accounts receivable it purchased both decline. Total interest income also declined.

Factored receivable loans held by Triumph for investment purposes were reported at $561.57 million for the three months ended June 30, down from $661.1 at the end of the first quarter. The size of that book a year earlier was $583.1 million.

The average yield on the size of the company’s factoring loans in the quarter was 15.48%. That marks a fourth consecutive slide, declining from 16.13% in the prior quarter and 18.73% a year ago.

Given that decline, and the decline in the size of the book, the amount of interest income from the factoring business at Triumph also declined, to $20.38 million from $23.49 million. A year ago, it was $24.762 million.

The rolling two-quarter annual charge-off rate, which would show weakness if rising, was 0.43%. That’s up from 0.42% in the prior quarter and 0.4% a year ago.

Triumph purchased $1.238 billion in receivables in the quarter. That too is down significantly from $1.45 billion in the first quarter and $1.4 billion a year ago.

The number of invoices purchased was 812,902, down from 878,767 in the first quarter. The average invoice size specifically for the transportation part of the factoring business was down to $1,378 from $1,481 in the first quarter and $1,492 in the second quarter of 2019. 

The company as a whole outperformed Wall Street expectations. Its non-GAAP earnings of 25 cents per share was 16 cents more than projections, according to estimates from SeekingAlpha. GAAP EPS of 56 cents per share outperformed expectations by 48 cents per share.

Triumph’s revenue of $74.52 million was up 4.9% year on year, and beat expectations by just over $3 million. 

Triumph will hold a conference call with analysts Tuesday.