TBK - Earnings call transcript Q3 2020 | Triumph Financial, Inc.

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Operator

Good morning, everyone, and welcome to the Triumph Bancorp, Inc.

Third Quarter 2020 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the conference call over to Luke Wyse, Senior Vice President of Finance and Investor Relations. ahead. go please Sir,

Luke Wyse

to quarter Bancorp XXXX Welcome discuss call our third financial the morning. conference Triumph to Good results.

are forward-looking Before to we actual forward-looking undertakes Those and include The to could revise any no remind like risks statements statements. company you that anticipated statements. uncertainties get this presentation cause started, that subject to I'd obligation differ. publicly and results may to

refer on to our If X. the presentation you're webcast, logged including statement into available safe please harbor Slide our online, slide

Bryce For our and those I'm Graft; address our the our please may statement. to phone, Capital. questions CEO, Business Aaron during note Aaron? that Officer; Chief Chief of and our to presentation over subject to Todd the statement After have. Brenner, Chairman turn harbor this joining by Financial I'd Ritterbusch, Aaron. www.triumphbancorp.com. happy Lending joined any CEO be made safe this are Officer, website comments are like safe Geoff harbor available and to All morning time, call the on Triumph by call today's that At Vice at you Triumph's presentation, we'll Fowler;

Aaron Graft

Good Luke. you, Thank morning.

earned million to share. net quarter, stockholders of common $XX third the For or we diluted per $X.XX income

million and acquisition Excluding warehouse share acquisition-related grew factoring growth expenses mostly in balances. related loans activities, to Total merger July. per factored $X.XX. mortgage $XXX.X was through XX.X% includes to and in acquired related Total diluted our earnings $XXX.X or loan receivables million TFS

a actually ACL million for quarter. the in expense. charge Total credit allowance the million $XX credit prior in accounted XX $XXX,XXX We was have acquisition. treatment acquisition deck are deteriorated accounting million in The ACL in without as TFS million loans. loss slides of a in increase against $XX.X to accounting our expense acquired purchase assets $XX.X the this the or or purchased of X.XX% versus resulting benefit through credit increased $XX.X and XX in expense prepared over for total advances The loss of to walk

of ACL factors acquisition, in shift with decrease from the As in result, shorter relatively due decreased the loss duration QX reserve CECL in of to excluding $X lower the impact and This primarily a line in portfolio growth by rates, the net to $X remaining million and ACL factoring million. TFS products is strong balance mortgage loan mix with warehouse. continuing

flat of quarters. ratio TFS over an $XXX,XXX of less basis ratio Our due economic XX with increased related X% loans to X.X% advanced increase reserves acquired total average We forecast receivables QX this and XX through of four Approximately advanced this loans sales an to points basis assets of basis X.XX%. were basis total TFS over $XXX,XXX. million of XX than loans, forecast to the retail maintain from points $XX.X points basis points of in net the past specific the consists portfolio. million unemployment relatively next charge-offs of assets approximately consists to to acquired increased experienced growth loans to total of of quarter-over-quarter for of we CECL X of XX% and Past marginal or factored $XX Non-performing points the XX receivables over due acquisition.

funding deposits, the increase is ago. XXXX. million second we mix. the a that on we million and XX% at to quarter focus $XXX deposits on of are from a of increased our of to the which a to total end $XXX in in bearing percentage bearing as will now year see gathering total continue deposits Non-interest Turning you deposit note grew significant which since you XX, quarter deposits Slide can up Non-interest our improve are deposits,

the to second points continue trend for growth costs near-term. lower market in ratio moved and lower non-interest deposit the mortgage is to XX loan of balances, warehouse loan Giving Our quarter. accounts, slightly funding conditions quarter. ratio in bearing basis to our from the Adjusted XXX% this expect up the XXX% approximately to we

our up to number QX. unexpected accretion to were X.XX% discount yields million quarter. on paid-off That this Now versus loan quarter in loans the margin, during in $X.X an X.XX% includes

XX the over in factoring to on increased X.XX% related basis of of was both the QX. majority was portfolio However, strength shift Net revenue in our funds. of mix loan transportation as our cost of interest a materially improvement continued and and this to change volume the margin our up businesses our points

to into that the in metrics. beyond, our forecasts say that key margin interest expand. growth, a regarding other What or that I QX net this we is As will you almost and tell factoring will leads interest practice of making not would is certainty can our I segment when loan it our whether continue are margin net

in QX, for quarter and transportation is than client out more pipeline before. the favor we for few of spot this market our to in truckers noted items release ever I'd earnings much specific like As that the new remains very full point rate a yesterday.

quarter. $X.X First, were gains securities. on in sale the available of for the purchased froze sale during the we These up million we market when first CLOs realized

of the to Given portion these embedded elected the asset gain. in run-up portfolio sell a our recognized values, and we

to million we due our dispute increase in We cash through $X to the the receive in to quarter the income date realized expect in account estimated TFS stock price settlement our run-up of other from end. of for also the

be a We approximately $XXX,XXX city Moline as former write-down the to on also had branch a library. to East donated of used

TFS we book the X%. tangible $X.XX by quarter The to finalized value dilutive covenant is or on revised with deal about this transaction. our Lastly, agreement

contribution from expect the portfolio. EPS acquired around conventionally to annually of $X.XX portion the $X.XX of structured We

over portion medium-term. by However, downside the the could our in additional portfolio, some resolution create upside efforts supported from near- on the of indemnification advanced covenant, the or to

of accounting around caps final the range upside. and the deck outcomes while million noted, summarize As loss and XX exposure the structure previously and we've potential pretax advanced portfolio over accounting to of slides XX settlement The preserving our $XX on some transaction. the prepared our to in the

into for out quarter, quarterly expenses relatively $XX.X fourth flat look expenses with the remain contained the QX. core we in with million printed to Looking

Now community Officer, communities like talk the turn to lending customers Ritterbusch, during and our Lending pandemic. and bank our our call about over efforts to support Chief Todd to our I'd continued this to

Todd Ritterbusch

start and Thanks, Aaron. like deferrals an progress our regarding relief to I'd loan by update on providing PPP forgiveness. pandemic

balances Slide short-term to payment Loan deferral $XXX on June September XX. can on XX of find our $XXX or loan or X.X% from information You balances full partial million million this investor XX presentation. on declined on of

million and have $XX deferral requests Consequently, pipeline for million. deferrals deferral a totals in $XXX request first need total of current – not but time that clients the balance requested now. also previously, them did We referrals

several next most the the Over remaining of deferral weeks, will extensions expire.

our they less. of remaining As with facilities million average this longer-term further payments. this resumed or The require weighted $XX value million or remaining in community but personal no of related greatest concern XX% modifications a our most facilities either bank. have expect cases, to in balance require to assistance exits. million source on occurs, along normal we in of These is remain the hospitality LTV $XX will guarantees roughly to $XX loan Approximately

generally offer recapture fees additional in and that modified covenants for longer-term equity cash return flow those provisions. flexibility payment injections, are XX and support, we excess up we for For providing months to

on we approval back quarter Moving forth applications our year PPP and loan began received the to and with extensive of loan applications of forgiveness first interaction October SBA, we is the PPP this and The year and extend bank forgiveness, many associated $XXX balances. our and SBA have the forgiveness forgiveness fourth the forgiveness the first quarter borrower, million the complexity requires into XX% received documentation X the of week between timeline for of next The likely in approving borrowers. October the effort application X. for to which and

However, highlighting. we and verify quality worth be are both our final eligibility a very remain large based two balances are our on that clients. efforts forgiven points of forgiveness with PPP amount majority to our will credit that loan There optimistic

balances First, past-due TBC. TFS were and excluding the the of flat loan effect acquisition

Second, sale a held acquisition the excluding NPA single can be increase for TFS balances, the in asset. attributed to

to short-term it well believe this and collateralized. We situation is the expect in itself resolve

Consequently look lending, new investments. credit. extending our and across lending growing our of board, lending expect are we finance, balance targeted our when selective credit recently full future on remain returns. be and new in to contributes we've which transportation to the the attractive we pipelines focused growth in it businesses, lending see growth strategy to markets We equipment building based clients to only which in with As made asset relationship extending allows concentrated our relationships fits and/or with us depository

business. warehouse reductions by offset and partially be balances, will only mortgage PPP growth loan of relationships eventually CRE this However, in loan line

the the how Aaron well specifically of taken clients. given mortgage us I these on build want update. commend to back now they mortgage for mortgage has the they team the the discussion with also the them have topic great market advantage opportunity On of and relationships deposit have warehouse, for helped to warehouse our over I'll turn transportation

Aaron Graft

Todd. you, Thank

part As future. investors be transportation the brightest know TBK's of to consider we

experience this digital a Capital whole, and believe area the as will provide finance. eventually we Triumph market of customers Specifically, via transform we our to TriumphPay Business the and

we paid rate foreseeable growth to future. our share approximately our near-parabolic purchased payments annualized expect businesses, which an million billion in We Combining this quarter, under paid approximately the results third billion. of X.X just invoices XX and in transportation of totaling invoices X.XX transportation continue for its run

of this You a Slide can breakdown X. see on

XXXX. over We and XX% revenue QX you XXXX, in Triumph prior for size invoice throughout total compared quarter X transportation of that and XXXX $X,XXX previous dollar high We in August Turning the the XQ again of trending the $X,XXX quarter, in average the give of September was quarter in Business A $X,XXX $X,XXX and was XXXX the to the increase this average Capital for invoices third second XXXX. increase of point XXXX. to a XX% Average third invoices surpassed XX, QX sizes purchased was invoice. a QX compared The XX% during at XX% of quarter. general a to To how per billion XX% July year during factoring were X.XX to at increase sense quarter, of invoice over up quarter were million Slide XX.X total invoice prices the some million. increase XXXX. volume purchased compared

TBC quarter. this the prices revenues increased You for client above from may XX% have our per a increased XX% as noticed invoice mentioned purchases prices. client, The than utilization invoice even at prior capacity reason is while increased that faster that measure of have

quarter to in pickup transportation. second steady we and a related our trends to volumes shifting in call, During also alluded activity

driver by caused spend spent picked as by throughout transportation, noticed elevated concerts with like outings and experiential As might've pressure up caused shortages, upward quarter. sporting capacity of rates trucks. watching in consumers on market be money substantially continued Volumes lack their limitations goods spot on those related unable flush that it unemployment moved and the benefits the to COVID must and the on events, liquidity

Going looks the an Christmas quarter, the the it saw. holiday largely exactly rather forward those and is Business than into in curve QX, historically we being was look a than beyond, alluded V that that could like July we that volumes fact October higher a continue, season. with and best Last more freight month to sustained if and what recovery also to throughout recovery average extended-U Triumph suggest freight we for Capital's trends expected

We well seasonal new quarter and low as quarter a that XX.X% to third with increase Triumph In this is received successively addition In capacity, a choosing more holiday client storm new perfect more inventory in which X,XXX growth industry client new robust new each applications. the unique applications, factoring over the liquidity the XXXX. Triumph behavior, client veterans over than to tailwinds, builds. month us records a ever, Capital's restocking recognize clients as Business pipeline the of quarter is the with competitors, than intersection setting for surge, quarter, benefiting of factoring consumer Business from of represents Capital third third aforementioned

and in the run, of efficiency, long continue and And not advantage to our rates factoring our our so while strong be these and the over sustainable technology in spot grow may both operations competition. fundamentals are scale

invoices X.X turning distinct on paying TriumphPay Now quarter Slide to the during XX,XXX third million TriumphPay processed carriers. XX,

quarter and since As totaled $X.X XX% over increase carriers XXX,XXX approximately largest of from XXXX. broker billion, of inception. proud have we increase X XX brokers brokers Payments define September and contracting. we the prior Logistics XX XXX% paid quarter second a then, processed the XX, in that four Since a Redwood momentum I'm on various billion. and we very integration contract negotiation. TriumphPay’s our freight had told Top volume. following strong of was fact Tier as run payments in annual just alluded rate we've another platform a fourth integration have to I as quarter-end September, that we Last two I the $X.X of three TriumphPay. you the have the added say the XX active the that of top by freight stages to which the as and We in in of more now five quarter,

of the expect four quarter the to following trucking approximately of XX our That be are brokers XX% planned. move and proceed integration and that top payment in as signature nexus the We of for serving end should becoming to those of much will contracting everything the be first fulfill of will XXXX. by industry. the us initial to And six billing closer live goal live the months

X,XXXth year rate Program. that more. this is XXXX we paid are is June This program TriumphPay in opened to we basis then network. TriumphPay and it by targets run X Also drive rolled all of of who regard reach XXXX. choose opened our in quarter back the to carriers nearing Select August. this to we've test has payment our to hope TriumphPay, positive a out very to on invite-only to in allows to we We have in an expect Carrier customer. are quick interesting this their exit the response invoices half broker The And it automatically any in and carriers they billion volume on subsequently Our with been unchanged, or profitability for

year to to Program in and expected have have we TriumphPay believe is the on and by of go Our brokers to sight goal given adoption, to of due X,XXX goal, we in pace Carrier the carriers Select the that near-term. the end live line

quarter context, on For of XX total X,XXX which Capital versus is at years. months Triumph had level a founded that in adoption achieve clients to carrier pace was Business in of XXXX TriumphPay end. six

and platform, differs While that transportation growth client the become appreciation Capital investors have will pronounced in for the an more as of the only market contribution the long in participants we this TriumphPay more give Triumph scalability versus our Business which rate reach join should network. of

is plan. wish back continues will questions. the per to of from in our work guidelines while so turn With of we we work. established be it our and could safety and protected these in we safely Despite the one do clear, for XX% call our their difficulties, over in health pandemic in that all quarters over team home, history. we we not our business Finally, our together proud is team finest exceptionally employees continuity I'm our will turned offices, until the of

Operator

[Operator question. today question Raymond Instructions] your Michael from from And our with first ahead Rose Please comes go James.

Michael Rose

Hey, guys. good morning you? are How

Aaron Graft

Good morning, Michael. Good.

Michael Rose

get some of know the to term intermediate Can profitability remind just plans Aaron, we us as of and you the Just, of targeting kind the the $X end appreciate second decline I goals? updates your of the intermediate year. what in the TPay, billion especially you're the Thanks. pipeline to have on by updates on year. in getting I annualized just Any based of terms you the your board goals? half on

Aaron Graft

year. the is Well, of goal end the $X we by the Yes. as billion mentioned,

about were $X.X you September, month If running to billion. the annualize we of were just at

If you billion. annualize the quarter, it $X.X was

the or that QX. they surpass number on to if on on $X in brokers far slide the any to – are as the system, with come adoptions whether broker billion So come QX we side, as the once will pipeline in freight that

equation, the penetration. just So that one market is which driving around goals of made side

which be that's this of The discussed we just second TriumphPay. part, inside call increasing volume how carrier would adoption because monetize on ultimately you

part haul the And the broker from we end so TriumphPay on on more daily process, your that drives for of choosing they who of as get more and QuickPay think X,XXX the the more a we virtuous brokers just carriers any mentioned, automatically and The the carriers come to that's network. profitability. do QuickPay between June And the year, that cycle. are system, to it's of automatic become which we'll take sort that the

think on. speed two scalable in to focused while after even that. the and product metrics the – we're but are doing to those continuing invest the market, back would on by it's those, of just And next the that, we So the and focusing that execution we profitable, half of pretty expect becomes year

Michael Rose

to looking then the Nice, side, the Slide the X, nice it bank on know growth some about and looks stop percentage a Or in there? of in headwinds growth. And kind like helpful. is time that's as of core revenue. that exceed Any grow of XX% of expect Okay, there. gross We at revenues we overall should that revenue future? think kind any XX% of obviously foreseeable transportation reason to from that, would the

Aaron Graft

trends, given year, achieving beyond growth, year point I think seeing given where the I see could perhaps next or some perhaps the XX% we're at out. and us

made So defensible, we it's transportation have our line most profitable we're – as first think we We organization. are of most business. clear, a

the We looking will the looking at – would our revenue state percentage transportation to But come. of I of grow. that the transportation a pipeline, that, just will expect if as the will grow community market, continue opportunities at bank

Michael Rose

lever for revenue one that me. like Okay. margin And seems besides to be next mix the larger in support the couple of have maybe still It Do potential the Thanks. maturities just deposit you any shift would last quarters? over a expansion.

Bryce Fowler

one. take I Bryce. that is This Sure. will

It's coming, there's but the quarter. mean, reflected bit like I of had deposits, little another can points not continue Those environment given we've So, on of substantial. have CDs XX the in amounts great repricing that are cost should our higher more raising maturities. current and repriced. abnormal down that cost so But We see a just really But do nothing numbers. some any quality have yes, deal. of or rate basis I next deposits success a this there's

Michael Rose

Okay. taking Thanks my for questions.

Operator

comes KBW. ahead question Gailey from your Please with next from go Our question. Brady

Brady Gailey

Thanks. Good guys. morning,

Aaron Graft

Good morning.

Brady Gailey

all TPay, you can do you XX? time at think on other top the look time? the already the So if over XX of XX have And get line you you for the XX. platform What's top

Aaron Graft

as so Yes. top top the of all I – we've XX, might you Well, expect. mean touched certainly XX, base of the it's with some the –

interested not are them of now. Some the right in product

think demonstrate carriers and is win is you and brokers frankly, this by for And other you demonstrate savings the so a cost the them enhancement I them revenue adoption a over and, way you how for them.

So it's of all impossible me XX for you the top them. – through predict to get when

As if of freight about X, XX next spend. control roughly is we we've which $XX billion control you XXX brokers, spend. think the billion top the $XX brokers said, – it, freight Tier of

smaller, much So it's get it lower than fragmented. and very win and gets more much – that, you

our carriers if it. virtuous the the So we getting, brokers belief adopt like what that of that top that control market, majority of therefore, they're cycle you the and, end is other in network the see a freight create

make predictions them. get them. So that, when we hesitate can I tell if any But we would can dialogues – of to having all of of ever with certainly, get all we're I or could you all them

Brady Gailey

provision How if do Okay. this a there provisioning any? is And then forward, about you think basically need the of quarter. going zero

Aaron Graft

I lot when if called lead the tied quickly growth know can't of or warehouse as – I around mortgage because to did get catalyst If not bank just stimulus, when out as scrubbed provision. we factoring doesn't mean, how we of a think worse you of depth every in turn. the that. at our we've I or for get were the there's mean, additional Well, the out, certainty economy our see COVID portfolio material they or provision we March, a those as of I – and pandemic needing unknown least April, it doesn't that coming

increases need know don't that in provision, absent some don't catalysts we foresee So I material about. a for

Brady Gailey

had I over All NDR right. last we now our trading the over It's a you possibilities with which is up mean, trades relative a KBW, that XX%. It's I stock's tangible, fairly looked when from attractive I you huge currency mean, move see. know within month, to but kind you X.XX virtual mean, basically the downplaying you've at times that And then, to Having M&A? if here. make Aaron, currency, did that, of have especially great a been M&A, peers. rethink like does I

So the that does way M&A the change move you're here? stock about thinking

Aaron Graft

really Brady. It doesn't,

to has view, what don't of we're Of beginning course, the the all know stock is has none for is because and want drivers. and performed running – you it TriumphPay view processed. own Triumph is growth people of But reason annualized to payments and the way all billion our Capital My understand my the foreclose anything. which – of are own us the all fintech transportation opportunity, $XX Business me in there, I

tangible that's I spread doing. lastly, will who which which the think have income; what think, probably business, fee in fintech be think brought would is, thing a on and or growing network effect of we're it's doing, should deposits, to base as keeping and transportation income, I a right and Brady, think drive defensible the the enhancement because of but credit value, to the think mean is clean, well do as then I I continue understands sees non-interest transportation. in focusing we we what everything do, is our towards that investor I quality of we're different opportunity enhancing bearing line long-term which be value book

of we have acquisition, to it fall think going as one those So disciplines about four any would forward. within

told not take a we're and if out on model that buy going And you because that's we – not figure side, not try it we're deal. work transportation space organic the so unique And there's currency and run to about. things to through I community need. out we in any just congruent those things we've it bank the to we've would going But look use this hard with created the the something and four built, to

Brady Gailey

Perfect.

up. doing color guys. job. for Keep Thanks the it all great You’re

Aaron Graft

you. Thank

Operator

with question. next from comes ahead Please Stephens. Matt from question Our go Olney your

Matt Olney

Hey, highlighted level thanks. adoption a minutes I really to within around is I interesting. in assumptions go Good that want And you adoption the few discussed that is morning. carrier you that sounds It back think the TriumphPay. QuickPay to that the baseline ago. past, XX%

that the adoption So higher seeing that could QuickPay than I'm implies success to recent be that trying you're understand if XX%. its

Aaron Graft

Well, in Matt. in the long run mind,

So that. let's X just system Select carriers long hauling I take We're because in for are that Tier what time Carriers or carriers aren't when But these TriumphPay XX% QuickPay just adoption we below brokers can some on certainly at whole. as source zero, a we one a their as that's as Because they we they're X otherwise. freight new Tier select And already you a do now large carrier start almost add not Carrier, generate or zero to A become financing as every that of when that. Select used be. TriumphPay a onboard QuickPay from of can except even are zero carriers treating paid broker. those is brokers, of their Carriers. mean revenue Select we are they to

previously things So lot of of that competitors base, do. the been that's market them in factoring interesting, untouched them part by one of other and have we're ourselves a some or penetrating you no look relationship, of interesting the But it's when a carrier space. at factoring the is

That's of space. territory. new So a segment that's exciting the because new us that's to

stabilization little a time long adoption as go new you think add again, run, XX% bit still That you again you QuickPay one, is conservative a at very every the your to down – start because, their market product assumption. Over a carriers. we stabilization, XX% you

us that our time of going to as to we're we're achieve hope we will But longer beyond allow about and of indication an And to that. where well of we'll period to Select back our a to conservative go you continue report Carrier adoption to so us that of might which if XX%. view with the give we're go beyond Carrier what I program, Select and showing all – going of should penetration over XX% where stick number be, you

Matt Olney

helpful, what's add maybe it each that the year? on came longer-term But clients That's the adoption Okay. because those you for I Are it's XX% time your rate larger platform appreciate at today over of starts that XX% some yet? customer. Aaron. last a

Aaron Graft

Yes.

specific who've me platform And global we're it's getting so customers we're high for longest, mid be been below adoption. below the reasons, a giving XX%. teens on clear, to on The the scale, the competitive on numbers – let not but to

Matt Olney

it. Got

just of us Okay. step back, going this just forecast already. not Aaron, out our taking be And of then if us week, Can to lot are a XXXX about some of that rolling a you your line that that stretch pretty XXXX have remind as on? sight goals are goals indicate goals today? Can these you you have it good you stands or

Aaron Graft

discipline XXXX. on perspective is at be to you say revenue that. basis, while we're to stretch. X% to Yes. growing things have want are revenue we I going want mean, with look, but said, a and ROA going is that I our a We lot where think exit while expense achieve to to discipline we've – we – achievable, what And to have we've a to talked about and maintain ROA. investors would growing it's profitability well, go

achievable we've The growth, run lot talked rate. if work but $XX between about goal XXXX second of thing an and the TriumphPay at for look at there. is that achieving you here a of rate a end our Again, would be there's to of be billion

to most Obviously, is talked two our Triumph that of line continue business, Capital, those growth laid are that about. has It, – We've it. Business need not profitable thing things other we've The of really we out and been exceptional. the course, any growth. for goals

happening, funds. of to we specific bearing deposits And goal a And to so cost continue deposits anchor but to you our grow on we haven't need see non-interest that. that obviously, given

billion Matt, book two mind the X% things rate. run we've drives on high tangible that So that a line also $XX and would that ROA for be the profitability come are the talked me, that levers that think and about multiple bottom the to maintains we profit,

not Business and would XXXX, to to and that is growth amount processed expect If is at probably TriumphPay be, in those $XX an should what of billion. you things look rate TriumphPay's but is we of exit holistically talk about at total where my to were time, idea between to invoice you better would to us $XX be the be run what would That towards view that would be, need I of goals. Triumph give that between pull what help Business it's number would Triumph Capital, in say, billion Capital just it and

that's holistically, going future to whole the talking very to of how start we And in hard transportation do be. what probably that instead hear volume to see those. just but you're TriumphPay, both it of platform work to to going we're get want So us about to

Matt Olney

Congrats Okay. That’s quarter. on helpful. the

Operator

our next Please D.A. comes question Tenner from from And question. ahead Davidson. your Gary go with

Gary Tenner

ask Wanted guys. four morning Good yes. Thanks. the about or brokers to –

Sorry, current integration. the brokers various four stages in you or have that stages of

quarter all does rate the of of Assuming first end invoices four first are run push what quarter, the of of annual the by those live that there? end

Aaron Graft

a from north but don't position have we – don't But that to be don't disclose number we – would those specific well of it. we're Gary, – have disclose number. $X.X can't billion not we I incremental volume of in it a four,

Gary Tenner

that I inclusive of of just billion, that goal is those clarify rate was payment does volume if not the Okay. the those? run exiting all of all with or $X XXXX include trying to of

Aaron Graft

about. other – brokers I lot the it rate. in of of we X Tier bellwether a coming there because focus be of we don't $X there's some that's on run mean on, It other would so about includes the billion But talk – but think other should yes, targeted lot you that them, some that and some platform four much queue are talk those to that the in we a brokers included includes

Gary Tenner

Select carriers any That's – the Okay. Triumph just is years. are Is I that total X,XXX And to Program of Or Capital just of there? similar clarify, active? carriers that currently about Business helpful. a your sort program to that you XX related similar want Carrier after talked on

Geoff Brenner

is a little up the what at make Hey, different clients is Triumph Gary, you Capital than Geoff. see of The this TriumphPay. that Business segmentation

but medium-sized So be likely of smaller those TriumphPay the a technology the probably move large will also a owner-operators number we least solution. obviously significant towards very there's and carriers, have to fleets, the fleets, and

I correct. think are So the numbers

of larger – the carriers you because that took just many of I got it there make-up time those were and Does significantly of sense? think the more make number clients. how carrier

Gary Tenner

Yes. Yes, think so. I

Okay. That's good.

questions I were answered. rest my think of the

you. thank So,

Operator

go Our Moss next Riley question. your question B. from comes from Securities. ahead Please Steve with

Steve Moss

Good morning.

Aaron Graft

Good morning.

Steve Moss

truckers of curious the you on – I look you just further a situation the think environment towards would obviously, little invoice normalizing down more drive pricing we kind quarter strong $X,XXX, for $X,XXX we're market the out, the on further size factoring. you're current it fourth do And as in kind Just being XXXX? out, the about Just of little time about a back here. the hear seem thinking into how level the in, maybe would that over

Aaron Graft

people every Triumph of lot about written any Yes. be other there's – otherwise. It clearing pass going And they – Those like to it's mean, people a come convictions, out more were be I house, the this failed house it probably have reapply in the three for years. like example, clearing there's for States, applicants, in who and XX,XXX are who are a difficult – it, market. of that seem drivers. than are They there this. than re-seat to are knows the who – so, whether And perhaps been reasons to think live to have informed drivers transportation there but can't better you part would I people bank United will – Steve. I there drugs, I some back – who to the day, feel that are will drivers lot related us. tell transportation But of that

responsive. word were the slowdown market that I were the which of that it be but or the invoice going of in not if takes things going you quickly would it's it, just the and market that's right So are how And trucks. knew the have that the of tighter, market. – in freight the There's going gotten that the were XX,XXX-ish direction for put entrants eventually, The mean, as new we've out market rate. example, are it frozen to just that in those into in freight right sure, – does has anything was think we is XX,XXX replacements. the And qualified struggles now, QX, new to coming you're And respond the there economics third freight quarter, for units people there's less the turned in where prices market where if these crisis market, pull – volatility not how nobody that Well power ordered. stay you is they tells just just we long seen around. I to where take? to

all But continues are are will I and might finding yes, eventually, we and you being for down. tells number come that you right are to they it that to expect if now But now. people up, don't brokers. drivers invoice do go contracts sizes between they mean these and well they – where ultimately, remember, shippers to QX. So got right renegotiated stay

bank. you upward profitable And what renegotiated, is predict thing the obviously, in sets up do can't more we is for in I'd anything is future. freight an in leave the we and else so downward as being But last we year. sideways even with I do everything far transportation next there a it market, the mean trending than or pressure nicely is

very, of that's us, tougher, to for profitable are it's smart going still like when that's business. we're and our they And why in fantastic. grow safe great are very always times lines when So transportation look But we're there. and to times focused are now, even

Steve Moss

for a That's credit then just to Okay. second. And helpful. maybe turning

there new million You were deferral request. guys mentioned that in $XX

Just kind deferrals what that we're type requesting here? loans of of where wondering –

Bryce Fowler

situation specific That that Yes. was a brand-new under construction. hotel was

So They it requested and it. we online. approved deferral deferral, in it. it provided a wasn't previously We've came when

Steve Moss

And to it or what's what the the what's expected is And got – – loan And of six-month is kind what – deferral? like a it. value?

Bryce Fowler

So I we of call, hospitality sort prolonged don't that clients say but in want general, a to to with address are the provide recovery. specific credit the in trying terms get through this our space there enough to will I flexibility on

XX with providing we're during long different So as providing as out options that months. options And repayment go them period fees with to time we're them different of that structures.

and payment a choose of may a like to for the than resume the if a portion their pay deferral. full modification interest-only they lower So payment, choose they fee to us

recover way. of flow. so capture to time, cash they then providing And if excess able we're some flexibility the same we're in At that also faster, the

make sooner. options. So if given exactly sure of that them we're some to that we them going a to can't than begin predict to trying giving have take giving collecting then And plenty better go to it's them long expected, we we're how recover, we're way things time,

Steve Moss

Okay. All right, appreciate I very thank much. that. you

Operator

question And next from from question. ahead Capital. Joyce go with your comes our Ian Hovde Please

Ian Joyce

was past And Can us receivables what this acquisition-driven? breakdown than how guys. the Good model give core a I more investors provide morning due What for million of I'm receivables. last could you this you next Thanks impact increase was you $XX little so my in – quarter just interest We're looking on taking was booked growth? factored quarter, hoping in to color question. quarter's the earnings. stock. a in number? in

Aaron Graft

don't where at be acquisition here. October now I I analysis we if of will above we real-time profitable. The call, today TFS think just of a call, super sit I we specific and look growth can't we is the And say of portion that to high-level I where the think TFS continue QX, – – you can for some be versus organic said you run QX. we growth as is in the a we I the between rate mean part information acquisition. and XX, I that. – the will on differentiated earlier there on give right finished mean, in the

Now it now, QX. aside are the we purchased our generated, But October right invoices total in looking best fees could acquisition, change, were at where we historically just set is and month. trending and above

So as you, that's I don't for can say. – if that's helpful as much we probably know that but

Bryce Fowler

mean as as less impact XX%. I might not you It's of not great TFS, than it's – it's the think.

Ian Joyce

I helpful. it That’s appreciate Okay. guys.

Bryce Fowler

Sure.

Operator

go Please Tenner And question your Gary follow-up. is Davidson. next from D.A. our follow with up ahead a from

Gary Tenner

Thanks guys.

So sheet balance I to wanted overall. thinking about ask about just the you're how

I about side, the As of of is on a focus at when a recall, the the you billion talked the I you the how factoring on the couple shift bank deemphasize I even made quarters a optimizing $X been think deposit thinking and last kind the there's hard you but a about kind several balance sheet the $X strategic as business, sand in to bit size you thinking Obviously, factoring growth ago, talked more of asset around really size billion. of quarters, of are opportunity line you're that necessarily, the think past? in growth. that lot about wouldn't about

Aaron Graft

Sure.

I that think So $X $X billion billion to range is exit. the XXXX brackets about the that is

how fee to what ties which A is than the of the so principles do come, get be day is and a Business TriumphPay these income. of question, that handle of many multiple, ways where Triumph long in capital at our would one earlier, it expect, enhance that it generating. exposure when And that volume run more our us transportation and we a we our hold you short-term here And are to four Gary, these balance may in high-yielding love have and of of we that asked willing are Capital we network growth to I to in would receivables markets think on sheet. and we the great alluded other to continue will time think receivables, participants to of than is there sooner

interest that. present to the $XX think time, sake. I growth's now our sell extent in of able over will so going for that we no will doing be portion the off And day balance growth recognize sheet from to a or have when income grows billion At it a that fee I come growing and

that equity more we and, on investors. on in exceptionally fairway. can think much to return we are focused ultimately, We $X for And well ROA billion sort do that of $X our

Gary Tenner

very much. you Thank

Operator

Please And question. Olney we have from go ahead an Matt Stephens. additional with follow-up your from

Matt Olney

of for that now a the how think TFS I my about you've the The prepared more overadvanced, could up that like? for some How the set from in And still what range is for goalpost look had asset EPS do is follow-up. was unknown. think kind weeks, this performing? you appreciate you taking so losses? a it few of mentioned potential the us Can Yes. it remarks, receivable for deal can you Thanks accretion we just

Geoff Brenner

were portfolio portfolio mean, Yes, speaking, numbers. that makes working as Geoff. one a going not had the part been factoring there I earlier, the mentioned or were make as you've really to it how obviously, terms I the It's difficult parts perform. of can't on positive overall how But portfolio way to going Matt, to performance I speculate unknown. that the look. of to through it's segment. has overadvanced as read basis, work. We're that's to still, whole other a But Generally a the the the impact noteworthy of predict this unknown in and or this that in certainly is a it's us, disclosures, list on predict

Aaron Graft

outcome, happen of EPS as think through of then accretion comprise the And the it of a long-term portfolio. an no that be be other EPS of clients material the working That Triumph. the customers outcome. portfolio may a is And overadvances what on obviously what is be piece, guidance will these longer some from Matt, would bulk be of will who the why the result just we understand we can't difference that that has give an to may if

So of rest trying the on the and a pipeline. consequential performing basis. And rest perhaps not focus things be or to in the not growth just out a it that we loss get given to road. But We're these know. going experiencing, back we're small it's trying be portfolio of down no answer into our don't additional about frankly, organic the not hopefully, with whatsoever collected the is and growth cagey number we're compared to the to gain. a We'll share,

Matt Olney

Got it.

you. Thank Okay.

Aaron Graft

Sure.

Operator

turn [Operator showing I'd like no and questions. ladies over additional the Instructions] remarks. conference closing back management to for this at to And I'm any time, call gentlemen,

Luke Wyse

day. a have Thank you hope We us. all you for great joining

Operator

And with We for call. you that, thank joining. conference do ladies and conclude today's gentlemen, we'll

may disconnect You now lines. your

Triumph Financial (TFIN) 20 Oct 202020 Q3 Earnings call transcript