Triumph Financial Q2 2025 Earnings Report

Triumph Financial EPS Results

• Actual EPS: $0.15
• Consensus EPS: $0.04
• Beat/Miss: Beat by +$0.11
• One Year Ago EPS: N/A

Triumph Financial Revenue Results

• Actual Revenue: $108.06 million
• Expected Revenue: $105.85 million
• Beat/Miss: Beat by +$2.22 million
• YoY Revenue Growth: N/A

Triumph Financial Announcement Details

• Quarter: Q2 2025
• Date: 7/16/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 17, 2025
• Conference Call Time: 10:30AM ET

Triumph Financial (NASDAQ:TFIN), a financial holding company, provides various payments, factoring, and banking services in the United States. It operates through Banking, Factoring, and Payments segments. The company offers deposit products, including checking, savings, money market and certificates of deposit; and loan products, such as commercial real estate, land, commercial construction and land development, residential real estate, commercial agriculture, and consumer loans, as well as commercial and industrial loans, equipment loans, asset-based loans, business loans for working capital and operational purposes, and liquid credit loans. It also provides electronic banking services, debit cards, insurance brokerage services, mortgage warehouse facilities, and transportation factoring services, as well as payments services offered through TriumphPay platform, a payments network for the over-the-road trucking industry. The company was formerly known as Triumph Bancorp, Inc. and changed its name to Triumph Financial Inc. in December 2022. Triumph Financial Inc. was incorporated in 2003 and is headquartered in Dallas, Texas.

Triumph Financial Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company resolved a five-year dispute with the USPS, fully recouping owed funds and reinforcing its commitment to deliver on investor and customer promises.
• Positive Sentiment: Q2 saw strong core transportation revenue growth across factoring, payments and intelligence, and management targets ~20% annual growth for these segments.
• Positive Sentiment: The GreenScreens acquisition adds $10 M in ARR and will integrate 40 billion data points over 90 days to boost model precision and has already doubled average customer contract value to $80 K.
• Negative Sentiment: GreenScreens brings approximately $4 M in quarterly expenses (including $1.8 M in amortization), creating a near-term drag on earnings until scale benefits materialize.
• Positive Sentiment: The payments network improved to a 14% EBITDA margin, with ongoing repricing discussions and a long-term goal of surpassing 40% efficiency.

Presentation

[Luke Wyse, EVP - Head of Investor Relations at Triumph Financial]

Morning. It's 09:30 in Dallas, and we're looking forward to the conversation this morning. As always, we'd like to thank you for your interest in Triumph and for joining us this morning to discuss our second quarter twenty twenty five results. With that, let's get to business. Erin's letter last evening discussed a noisy quarter's results, but underneath that, albeit positive distraction, laid out a quarter with a lot going the right direction, particularly in our transportation businesses and around revenue growth.

[Luke Wyse, EVP - Head of Investor Relations at Triumph Financial]

We are demonstrating the ability to monetize what we've built and the value we add to our customers and shareholders. That quarterly shareholder letter published last evening and our quarterly results will form the basis of our call today. However, before we get started, I would like to remind you that this conversation may include forward looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to publicly revise any forward looking statement.

[Luke Wyse, EVP - Head of Investor Relations at Triumph Financial]

For details, please refer to the safe harbor statement in our shareholder letter published last evening. All comments made during today's call are subject to that safe harbor statement. With that, I'd like to turn the call over to Aaron for a welcome and to kick off our q and a. Aaron?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Thank you, Luke. Good morning, and welcome. Not sure how many of you made it through all 34 pages of the letter that was published last evening. If not, maybe you've got an AI summary that did it justice. We use AI in our business, but we do not use AI to draft this letter because, frankly, we value the discipline and the grind to put it together.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

We don't draft it just for investors. We do it to recalibrate internally to focus on our goals and our strategy. And we work hard to not have any throwaway phrases or sections, and we avoid legalese as much as possible. So I hope you find it as valuable to read as we do as a team to prepare. Now as you saw, there was a lot of noise in the court.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

The loudest noise was due to the successful resolution of the five year kerfuffle with the United States Postal Service. It was long overdue, but in the end, it's what we expected. Beyond the financial recoupment of all that we were owed, I hope investors can see that as just one piece of evidence that you can take Triumph at its word. We will work deliberately to deliver on our promises. Now some investors don't always like what we have to say, what our strategy is, but we work very hard to never give you a reason to doubt what we have to say.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And we said we would recover that those funds from the USPS, and we did. Turning back to core results and strategy. The core transportation business had a great quarter of revenue growth, and I see lots of opportunity in front of us. Second, credit quality also improved materially. And finally, with regard to strategy, I would encourage investors who want to understand our strategy pay close attention to the value chain section in the shareholder letter.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

It helps frame what we have been working on for quite some time, but only recently publicly revealed. With that introduction and my personal welcome to Dawn Fabier, our president of intelligence to the call, we will turn it over for questions.

[Operator]

We will now move to our question and answer session. If you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. When you are called on, please unmute your line and ask your question. We will now pause a moment to assemble the queue. Our first question will come from Matt Olney with Stephens. Please unmute your line and ask your question.

[Matt Olney, Managing Director at Stephens Inc]

Hey, thanks. Good morning. Appreciate you guys taking my questions here. Wanna start on the GreenScreens acquisition. Now that the deal is closed, any early observations, that you can see?

[Matt Olney, Managing Director at Stephens Inc]

And just remind us of the timing of the of the integration of GreenScreens and what your initial expectations are as far as, customer adoption, following the integration. Thank you.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. Great question, Matt. I'm gonna start and then let Dawn speak to specifically the customer meetings because she's in more of those than me. Mean, I how you think about or at least how I think about green screens is there's the green screens that existed, which is what we bought. There is the green screens that is now being integrated into Triumph over the next, call it, ninety days.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And then there is the Triumph Intelligence product that is a big part of our future story. And so if you look at the green screens we bought and we, you know, talked about this, you had a business It was roughly $10,000,000 in contracted ARR. They served the long tail of the brokerage community and had carved out a successful niche in demonstrating that they were able to take data and return it back to customers in a way that was frankly better than others in the industry, and they were winning a lot of business and growing. That is now part of Triumph. And over the next ninety days, what we are doing is taking the data we hold in Triumph, specifically about 40,000,000,000 of audit and payment data that is not currently part of what is inside of green screens and moving that data into their models, which as you would expect and as we wrote about in the letter, is going to make their models better, more precise, and give them broader coverage.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And so finally, after that ninety day period, we're now gonna be talking about the Triumph Intelligence offering, which does more than just provide modeling of buy and sell rate data, but does other things that we talked about in the letter. And we're gonna distribute that to the customers that we already have and all the customers who already know us. And so maybe, Dawn, from that, you could talk about what you've just seen since May 8 and and and what feedback you're getting.

[Dawn Salvucci-Favier, President - Triumph Intelligence at Triumph Financial]

Right. Thank you, Erin. I that's a great question. I think, look, we're less than seventy days into this, and we are already starting to see great results, being part of the Triumph family now. First and foremost, you know, the goal of penetrating the top sixties or 66 of the top 100 freight brokers, We had historically, you know, with the traction we were seeing as Greens Greens been selling into the long tail of the market, and we started to make some traction in the the top tier brokers.

[Dawn Salvucci-Favier, President - Triumph Intelligence at Triumph Financial]

But we are already starting to see the results of of really more engagement with that top 100 brokers that Triumph brings to the table for us. Our ACV historically before the deal closing was about $37,000. In our pipeline right now, we are seeing that increase to $80,000 ACV. So significant increase there. I think the other piece of that is the data.

[Dawn Salvucci-Favier, President - Triumph Intelligence at Triumph Financial]

The power of the data coming from the Triumph network with Sightline to nearly 70% of of all freight transactions. That work is already underway. We have, at this point, ingested less than 5% of that data and are seeing significant improvement, in both our lane density coverage, which then leads to improved accuracy both on lesser traveled or less dense lanes, which is what's most important to a freight broker, but of of course across the network. And finally, a lot of engagement with our customers both on ISO and green screen sides independently as well as our joint customers on the value that we will be able to deliver to those customers when by combining price and performance into a single intelligence solution.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. And and the final point and and it's so it's gone great, Matt. The final point is of our three transportation businesses, factoring, payments, intelligence, intelligence as a percentage will grow the fastest in the next two to three years. I I it won't be linear every quarter, but that one has the most upside. We've written about that in the past even as we were moving into it, and nothing has changed my view that intelligence will will grow more quickly than any of our transportation related businesses.

[Matt Olney, Managing Director at Stephens Inc]

Okay. Perfect. Thanks for the color on on all that. And then just switching over to the payment side, I think you guys reported the EBITDA margin this past quarter was closer to 14%. That's a pretty big improvement from where we have been.

[Matt Olney, Managing Director at Stephens Inc]

We'd we'd love to hear more about expectations for that EBITDA margin, moving forward from from here.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Thanks for the

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

question, Matt. Yeah. I expect EBITDA margin to continue to improve as we continue to scale revenues without scaling expenses as fast. And so I I think you should expect regular improvement. My long term goal is to get us above 40%.

[Matt Olney, Managing Director at Stephens Inc]

Thanks for taking my questions. I'll hop back in the queue.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Thank you, Matt.

[Operator]

Our next question comes from Joe Yakunis with Raymond James. Please unmute your line and ask your question.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Good morning.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Good morning, Joe.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

So I appreciate your opening remarks, particularly about the idea of using AI to summarize the shareholder letter. Be taking that under advisement next quarter. So starting off here, I was hoping you could talk about load pay a little more. You reported a really solid, you know, quarter on account growth, and it seems that growth should really accelerate in the back half of the year. Now that you have more accounts in your belt and data on this initiative, do you have a better sense on what the average annual revenue impact will be from each account?

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

Sure. Yeah. I can take that. So when you think about the average revenue per account, there are a couple of factors you have to consider. The the first is the season of the accounts over time.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

And just like any business checking account, it takes a while to get those accounts linked, funded, and actively used to the point where you can get a good sense for what the ongoing revenue will be. The second factor is that we are adding a lot of new accounts every quarter. And so when you think about the average revenue account for the foreseeable future here, I think you have to recognize that those new accounts will dilute the average revenue figure. But when you talk about a a mature seasoned account, you know, you're already seeing in the investor deck some statistics that suggest that we're getting $700 or more on average, and in some cases, significantly higher.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

So yeah.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Okay. I I appreciate that. And then the next one from me. So given your initiatives, you know, with load pay, factory as a service, you know, your intelligence offering with green screens, know, you all all these appear to be very disruptive to the industry. What type of pushback have you seen from some of the competitors in the market?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Oh, yeah. How long do you have? So the look. If if you think about if you think about how these things fit together. Right?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And and that's where I think why I really honed in on that value chain. Everything we do in that in those five parts of our value chain is something our customers have asked us to do. Now when we say customers, what do we mean? Like, we serve different constituencies, but primarily what we're talking about is we serve freight brokerages, and, you know, we serve all different sizes of freight brokerages, but the core part of our customer base certainly includes the tier one or the largest brokerages, but we we frankly serve all the way down to some really small ones. And then secondly, in the carrier universe.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And in the carrier universe, our customers are generally gonna be the smaller carriers, which by numbers make up the largest proportion of all carriers. Something like 96% of all carriers have four trucks or less. And for us, our sweet spot is serving carriers that probably I don't know. Kim would say a 100 trucks or less. We have some that are larger, but but by and large, small truckers.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

So if you think about on the audit side, let's let's just walk through the value chain. On the audit side, we do more audit than any known competitor. There are other people who do audit, but they don't do it at the scale or for the largest players like we do. So I don't know that we disrupted. I mean, you could argue we disrupted there, but we just have have been able to go grab the largest part of the market share.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

If you go to payments, there is no real competitor at scale doing payments from brokers to factors or from brokers to carriers. Right? And that is something we pioneered with the payments network. So kind of a greenfield opportunity and something that that we've grown really well. Go to the next step.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

If you do audit, then you do payments. Now you get back to where we started, which is liquidity. So there are other factoring companies who wanna provide liquidity to carriers. How did they feel about our technology platform enabling CH Robinson and RXO and others to join the industry? I'm sure they don't love it.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

The point is those large brokers were going to be coming into financial products whether we were part of it or not. We just have the technology platform that empowers them to do so because they wanna be bound more tightly to the carrier. And if you take all that data that we have from doing audit and payments and factoring and you talk about intelligence, there are incumbent intelligence providers. I would say there's if you add green screens into the mix, there's, like, three to four who were well known in the industry, and some are much larger than others. How do they feel about Triumph stepping into intelligence?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Again, I think they probably don't love it. The one thing I I would point out about intelligence is it's not a zero sum game. A large customer is gonna consume intelligence most likely from multiple sources. Our goal is just to be their primary source because our data is better, our models are more precise. So, you know, the in in all of those areas and then on the performance part, which we kind of fold into what we do in intelligence, there's no real known competitor there who provides truly market neutral performance.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And the same would be true, lest I skip over the important one of load pay, there isn't somebody who has a dominant market share of providing banking services to small truckers. There are people who do it. We would suggest, and I can't point you to third party data on this, but I would guess that by q one of next year, we will be the largest in the industry. Once and and in any event, once we get to 10,000 load pay accounts, I don't think there's anyone in the industry close to that. So who you're competing with to win load pay business are banks and credit unions who generally don't care too much about small truckers.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

I know they don't care about them nearly as much as I do. So different parts of that value chain touch different competitive sets. Some of it truly is areas where where there is no known competitor. Others of it, we're already in a dominant market position. And in others, there's gonna be a fight, and competitiveness is part of capitalism.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And so we're here for it, and and I think the industry will be better for it.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Very thorough answer. I appreciate that. I'll hop back in the queue.

[Operator]

A reminder, if you'd like to ask a question, please use the raise hand icon, which can be found at the bottom of your webinar application. Our next question will come from Tim Switzer with Key, Friette and Woods. Please unmute your line and ask your question.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Hey. Good morning.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Thank you for taking my questions. For the for the GreenScreens acquisition, we're trying to think of, the go forward run rate here. Is it is it correct to think of the near term quarterly run rate to be about 2 and a half million of noninterest income and 4 and a half million of expenses including the amortization? And then what's the timeline for breaking even on that, you know, particularly as you, you know, start to feed in the data you guys have?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

You wanna take the near term and short term?

[W. Brad Voss, CFO at Triumph Financial]

Yeah. Tim, that that's a that's a fair characterization. I would say that we we won't be talking after this quarter about green screens in isolation. You should be looking at our intelligence segment broadly because there was a little bit of, of other activity there. But, yes, we're talking about roughly $10,000,000 in in revenue on an ongoing basis there.

[W. Brad Voss, CFO at Triumph Financial]

And, yes, that that expense number that that you quoted makes makes a lot of sense. There's probably about a little over $2,200,000 or so from green screen specifically, that we've added to our run rate and then that million 8 of ongoing amortization. So that contributes about $4,000,000 to our quarterly expense run rate, of that 104 that we talked about going forward.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. And and so, Tim, it's it's like, let me just say, as I think you would have expected from us, none of that surprised us. We knew when we bought green screens what its revenue was gonna be, and we modeled what the intangibles would be. And and and the impact on near term earnings is is, like, call it 3,000,000 a quarter of drag. That's not insignificant.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

We don't take it lightly, but we did not make this decision lightly either. And so you asked about what to expect going forward. What I expect Don and team to do going forward is to take that 10,000,000 run rate and grow it faster than any of our transportation businesses because, number one, it's starting with the smallest denominator. But number two, you just heard her allude to the average contractual value, the ACV historically for them is $34,000. If we look at their pipeline now, the average is in the $80,000 range.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Why? Because the distribution mechanism and the brand credibility of being part of Triumph who services 66 of the top 100 freight brokers in this country is materially different. It's also materially different that we touch 64% of all freight transactions in The United States. We have verified, audited, and paid data, which is the cleanest dataset you can possibly get. I would say, on the record, no one in the world has that level of precision data about what's going on real time in trucking, audited down to the last penny.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And if you have that and you have the team that can deploy these models like our green screens team, we're, you know, calling intelligence can do, you're equipped to win. And so on the whole, look, transportation for us, we talk about it. You can see it in the letter. We talk about factoring, payments, and intelligence, the three segments that make up our transportation business. I will be disappointed if our transportation businesses in the aggregate don't grow at 20% a year because we have invested heavily to build the opportunity to create revenue growth there.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And as I said earlier, of those three, the one on a percentage basis that I would expect will grow the fastest is intelligence. And so their ability to grow into that earnings drag over the next several quarters and get to themselves where we do the exact same thing we talked about with payments, which is now 14% positive EBITDA margin. It was negative 160% not all that long ago. I expect the same thing to happen more rapidly with intelligence. So that's that's as much future guidance, as we're able to give right now, but I hope that helps.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Yeah. That was very helpful. Appreciate all the color there. For sure. And then on, the credit trends, it's good to see a lot of the improvement there kind of all around.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Can you help confirm what dollar charge offs looks like if we exclude the impacts from USPS and, the acquired portfolio you made? And, you know, what are the expectations for provision, for the back half of the year?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

If you normalize for those two things, our charge offs were less than a million dollars. So an extremely good quarter from a credit perspective. Todd, I'll let you speak about the rest of the year. Yeah. So projecting credit losses.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

It's it's

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

I would just give you some general guidance that the credit losses we experienced this quarter were pretty typical of what we would expect. I wouldn't say we had a great quarter with respect to credit loss expense. I also wouldn't say that it was a terrible quarter with respect to credit loss expense. So just use that as a a general reference point. You know, last year, we were talking about as high as $20,000,000 of of credit loss expense.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

Going back further in history, it was more like $10,000,000 of credit loss expense the year. We're gonna end up on average somewhere at the low end of that range.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. And I wanna be clear on the million dollars. That was charge off. That was net charge off.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. Net charge off, not just credit loss expense, but you've heard Todd say roughly the low end of that range. And and let me just unpack it just so it's clear on you know, we opened the letter with this loan. What happened is we had the opportunity to buy a loan that we understood at a very steep discount to face value. Right?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

We understand the equipment space. We understood the the specifics of this loan. And so, you know, some people may not say that's not core. Look. I'm not too proud.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

If you're gonna leave nickels on the ground, we're gonna bend over and pick them up. Right? That's just how this company has operated since day one since it was me and a laptop. Like, if we can see an opportunity to make money in the near term on a great risk adjusted return, we should do that. Even if investors don't wanna give us credit for it, that's fine.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

It goes into tangible book value, and making money now allows us to do things. Frankly, that all the money that we've made over the last few years allowed us to buy green screens, which is highly dilutive to capital without diluting our shareholders in a meaningful way. So if you're gonna if if circumstances give us the opportunity to get small near term wins like that, even if they make our quarters noisy, we're going to do it. And and that's why, that's in there. It's why it happened, and we'll we'll recognize that back into revenue.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And whether it shows up in top line revenue or recovery or reversal or provision, look. It's cash. And cash going into tier one capital is a good thing as long as you get it with by not taking undue risk.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Great. Thank you, guys. And, yeah, certainly, appreciate the strategy on that loan acquisition there.

[Operator]

Sure. Our next question will come from Gary Tenner with D. A. Davidson. Please unmute your line and ask your question.

[Gary Tenner, Managing Director & Senior Research Analyst at D.A. Davidson]

Thanks. Good morning, everybody. Good morning, Derek. I wanted to ask a question about the competitive environment again, I think a follow-up maybe on somebody else's question. But in terms of DAT and the acquisition that they did of the Alco payment platform.

[Gary Tenner, Managing Director & Senior Research Analyst at D.A. Davidson]

It seems to me that that is more specific to carriers versus brokers. So is that more of a competitive impact potentially to the traditional factoring business than any other part of of your transportation business?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. I mean, look. We we don't generally use our earnings calls to talk, about competitors. But since you asked a specific question, DAT has moved in with this acquisition to the factoring space. That's frankly not totally new as they operated referral relationships before.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. In the small world syndrome here, their referral business started with Triumph some eight or nine years ago. So we understand how the offering works. We know that we we've seen the product at Algo and DAT acquired it, and I'm sure they're gonna try to use that to grow factoring revenue. And it goes back to what I said, like, competition is a fundamental part of capitalism, and we're here for it.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Like and the and the customers will benefit from it, and it sharpens us. So, yeah, I I would think that's what they're aiming at. I can't speak to their entire product map, but that seems like what they were doing, and that'll just be one of about 400 factoring companies that that we compete with. And and so on we go.

[Gary Tenner, Managing Director & Senior Research Analyst at D.A. Davidson]

Okay. Fair enough. Sorry to put you on the spot on that one. No. No problem.

[Gary Tenner, Managing Director & Senior Research Analyst at D.A. Davidson]

And then just, I guess, Brad, in terms of the $1,200,000 on the USPS, fee collection, looks like that's split between interest income and fees. Could you parse out a little more, how much was in each?

[W. Brad Voss, CFO at Triumph Financial]

Yeah. That that actually was all in interest income. So when we think about factoring fees, that were accrued, it was factoring fees, but factoring fees typically end up in interest income.

[Gary Tenner, Managing Director & Senior Research Analyst at D.A. Davidson]

Okay. Alright. Got it. Thank you.

[Operator]

Our next question will come from Harold Goach with B. Riley. Please unmute your line and ask your question.

[Hal Goetsch, Managing Director at B Riley Financial]

Hi there. Hey. My question is about pricing.

[Hal Goetsch, Managing Director at B Riley Financial]

I know we have a lot of early players on in monetization. Just wanna get your thoughts on that. I don't if I missed that on the call, but the growth is terrific. It'd be better if it was a little bit better monetization. I wanna know where you're at on that.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

I'm sorry. We had a little bit of hard time hearing. The question was referring to monetization of what?

[Hal Goetsch, Managing Director at B Riley Financial]

Of of TriumphPay. You know?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Oh, the payments network. Yeah. So well, for I just wanted before I hand it off to Todd, I just wanna say congratulations to him. I mean, what got built here historically with, you know, the the Melissa's work to get us to where we are was great. And then when this when Todd stepped in the role, his ability to you gotta remember how you know, one of the hard things about starting something totally new is you your first foray with these customers is you're begging them.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Right? You're asking them to do something not only that you've never done, but that the industry's never done. Right? Outsourcing payments at scale to create a network in brokered freight was not on anybody's radar. And so I think you can develop a psychology, and, I mean, this is just deep into the weeds of how you run a business of gaining market share, gaining market share, gaining market share.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Are we for real? Have we proven this out? And and at some point along the way, it's a healthy discipline, and maybe it's my fault as a leader, maybe I should have been quicker on this, is to step back and go, okay. We've done this long enough now. We've done this well enough now.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

It's time to start having people pay us for the value we created. And Todd was able to walk into this with a fresh set of eyes and go, Aaron, there is a lot of value here. I'm like, great. Let me step out of the way. And and so you take the rest of the questions.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

Yeah. So just to elaborate a little further on that, in late March when Aaron asked me to to step in and take responsibility for payments, one of the first things I wanted to do was understand the value we're creating for our clients. And that has been the most encouraging lesson for me over the last four months. The reality is case by case, client by client, we can put together the value that we're creating for them, and it's it's very, very encouraging. And so with that underpinning, I feel very confident going out and asking for our fair share of that value that's been created.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

And I I you know, to date, we've you saw in the shareholder letter, we referenced the the the clients that we've already had the repricing conversation with, and those conversations are are going just as we expected them to go. They will accelerate in the coming quarters. We'll start dealing with, the bigger clients, the bigger brokers in a more focused and concentrated way in the third quarter. And so, you know, we'll see where it all comes out, but I have a lot of confidence that we're delivering the value that earns the opportunity to reprice.

[Hal Goetsch, Managing Director at B Riley Financial]

Great. Thank you very much.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

So it's it's just just to put a capsule on it, it's the sort of the transition from start up mode to value mode. And and everyone who helped get us there, we really I mean, there was a lot of hardwood to chop, and I think Todd would acknowledge that that he gets the benefit of going faster because of all the work that was done. And so I hope you're pleased with the revenue growth you saw this quarter. We're not gonna get that every quarter, but it is gonna grow from here.

[Hal Goetsch, Managing Director at B Riley Financial]

Thank you very much.

[Operator]

Our next question comes from Matt Olney with Stephens. Please unmute your line and ask your question.

[Matt Olney, Managing Director at Stephens Inc]

Yeah. Thanks for the follow-up, guys. Just a few more questions here. Within factoring, I I think you disclosed that the average invoice size was slowed by the market pressures in February, but but also slowed by the mix of customers that you added as there were a few larger customers. Looking forward, I think we're still assuming that factoring continues to grow at a pretty healthy clip.

[Matt Olney, Managing Director at Stephens Inc]

Should we anticipate a a similar dynamic to continue where invoice price could be pressured as you add larger customers, or do you think this two q event that you disclosed is more of a a one off event within the mix shift?

[Kim Fisk, President - Triumph Factoring at Triumph Financial]

Yeah. Thanks for the question. Know, as you go up market, you might get a diversified mix of carriers, that might be doing different types of hauling. And so some might do some shorter regional type loads, which will reduce your invoice price. And so what we like to look at is segmenting out our portfolio from our large versus our small segment, which when you look at a small segment, I think you see more of, like, a normal $1,200 invoice value, which kind of pairs up with what we see in our payment segment that looks at a lot of small carriers.

[Kim Fisk, President - Triumph Factoring at Triumph Financial]

So as we go up market, yeah, you may see a fluctuation in the invoice price overall. Yeah.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Matt, the the if you real and this is our fault because we started training investors to look at average invoice size back when all we did was factoring. And and and if you want to really look at average invoice size as a barometer of what the market is doing, you're probably better off looking in our payment segment than our factoring segment. And what Kim just said so well, I mean, I hope you heard that. Smaller carriers even have smaller invoices on average than larger carriers. It's like $111,200 dollars because they're doing shorter runs.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

What you see in our business is the mix shift. It's not just about large and small. It's about the nature of what these carriers do, and it just so happens that Triumph's factoring business has a lot of shipper exposure in it. Meaning that our carriers not only run for brokers, but they also run for shippers sometimes, you know, under under contracts, and those are large can be, depends, but can be larger invoices. And so to look at Triumph's factoring business in isolation, you have to understand the mix of our customers is more diverse than if you just had what I think people assume factoring is, which is small carriers falling in the spot market for brokered freight.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

We do a lot of that, and it's very, very profitable. But we have a mix shift that in incorporates other things, and so you should not think that the movement of the average invoice size in our factoring business has a perfect r squared correlation to what's happening in the market as a whole. There is some correlation. You can obviously see that in the historical numbers when invoice sizes ran up to $2,400 in back in 2021, but it's not a perfect correlation. And and so, again, if I can get you to look at average invoice size as an approximation of what the spot market is doing, Number one, I'd say subscribe to our intelligence product, and Don will do a tremendous job telling you what the market's doing.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

But number two, look in our payment segment versus our factoring segment because it's not as influenced by a mix shift of customers.

[Matt Olney, Managing Director at Stephens Inc]

Got it. Okay. Appreciate the commentary from from Kim and Aaron. Thank you for that.

[Aaron Graft, Co-Founder, Vice Chairman & CEO at Triumph Financial]

Sure.

[Matt Olney, Managing Director at Stephens Inc]

And then switching over to I think the letter last night had some good details behind supply chain supply chain financing, some some good growth there sequentially. And I appreciate this provides liquidity to some of your customers, especially those, you know, within the industry that has some headwinds right now. I'm just curious about how much growth we could see in supply chain financing over the next few years.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

I I'm pretty excited about the potential growth for supply chain financing. It fits very naturally with our brand promise of helping the players to transact confidently. We can inject more liquidity into the brokers, but we can do it in a way that protects the carriers as well. And I I think we should just be doing a lot more of that.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Matt, the the brokers have an interesting business model relative to a lot of other business. 85% of their expense, more or less, is going to be hiring truckers to haul these loads. So if you think and I alluded to this before. So if that's true, supply chain finance allows what Todd is leading allows us us to collect from the account debtor, which would be the shipper, the manufacturing company, whoever the broker is contracted with, and to pay the carriers directly. There are very few people who can do that and at scale, and I I think we would probably buy it far and away be the largest.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

But it's not just about creating liquidity for these brokers with what Todd's doing. It's about making their business more efficient and managing their cash flows better. And then just so you can see how this all fits together, I think this is is really important. The work we do in audit and payments was always around helping brokers get more efficient in the 15% of their expense base that was had nothing to do with hiring truckers. Right?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Just their back office workflow automation, etcetera. That's what audit and payments was designed to do to make their life easier and to improve their margins. Don't miss this fact, and it goes back to why I'm so bullish on where intelligence goes. Intelligence speaks to the 85% of their cost base, which is how much do I need to pay this trucker to run this load? And so when you look at the value chain, once again together, we're now able to add value in the back office, the 15%, but we're also able to add value, if this is the right word for it, in the front office of where of how we set our rates with our customers and with our truckers.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And holistically, supply chain finance intelligence, all of this gets bundled together in a product suite that's designed to go back to exactly what Todd said for every broker to achieve their business goals and ultimately for every trucker to thrive. Like, that's that's what we're after, and that's why it's designed the way it is.

[Matt Olney, Managing Director at Stephens Inc]

Yep. Okay. Thanks for that. And then lastly from me, I wanna ask about deposits And, specifically, the the the noninterest bearing deposit growth has been really strong over the last year. And I'd I it's my understanding that for for Triumph, the NIB deposits are a mix of of of mortgage escrow, traditional banking DDA, but also, the float from the payments business.

[Matt Olney, Managing Director at Stephens Inc]

Any color on kinda what that mix looks like? And and specifically, just trying to appreciate how much of that growth over last year on the NIB deposits has been from from the payment side.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

Sure, Matt. I can break that down for you. So the largest share, a little more than half of that is mortgage warehouse deposit growth. Little less than half of that is related to TPAY float growth. The commute the other community bank deposit base, the noninterest bearing deposit base has been flat to down slightly.

[Todd Ritterbusch, President - Payments & Banking at Triumph Financial]

We have seen a little bit of migration out towards interest bearing accounts, and we've also seen some large commercial clients needing to use their deposits for other business purposes. But other than that, those community bank deposits are flat.

[Matt Olney, Managing Director at Stephens Inc]

Perfect. Thank you guys for the commentary.

[Operator]

Our next question will come from Joseph Yukunis with Raymond James. Please unmute your line and ask your question.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Again, they in for taking my follow-up here. So just kinda wanted to go back to the factoring segment. You know, so the number of invoices purchased had a pretty nice pickup in the quarter. Does that figure include factoring as a service volume? And if so, can you give us a sense for how much of those purchases were done from your in house factoring segment?

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Know, You this is kind of a price times volume story and with the price being a little less correlated with the spot rate market. Just trying to better understand the forward trajectory as the number of invoice purchases outpaces the market.

[Kim Fisk, President - Triumph Factoring at Triumph Financial]

Yes. So what you're seeing in the letter is the mixture of both, FAS and our factoring core business. And, really, what you're seeing is the growth is on the first side of with us on the factoring portfolio and a little on the fast side. So in the coming quarters, when fast picks up and our second customer comes on board, RXO, next week, you may see fast volume grow over the next coming quarters.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Alright. And then last one for me here. Is there any seasonality within your intelligence segment? Like, would that kind of, ebb and flow with kind of, the volume within the trucking market and those seasonal trends, or will it just kind of be or I'll just open it up there.

[Dawn Salvucci-Favier, President - Triumph Intelligence at Triumph Financial]

Thanks for that question. No. There really is no seasonality associated with that business. And in fact, not only is there no seasonality, but historically, there has not necessarily been any seasonality as the market shifts. Right?

[Dawn Salvucci-Favier, President - Triumph Intelligence at Triumph Financial]

Greens Cranes as a company was created during 2020 when the market was booming. Right? And but we had our largest growth in in a down market period. So that that business is is really stable from a seasonality and volatility perspective.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Perfect. Thank you very much for answering my follow-up questions.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Our

[Operator]

next question comes from a private investor, Li Pai. Please unmute your line and ask your question.

[Analyst]

Hi there. Can you guys hear me?

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

We can.

[Analyst]

Oh, great. Thanks for taking the question. Sure.

[Analyst]

Going on a different direction, could you go into more detail about the, growth in net noninterest expense under corporate and other? The 10 q characterizes them as, you know, continued investment in shared services for all the other segments, and certainly do appreciate, you know, that it's prudent to continuing to internally invest, especially during down cycles. But I'd just like more, you know, color to understand, you know, how these investments are going to deliver, you know, value for Triumph going forward.

[W. Brad Voss, CFO at Triumph Financial]

Well, the the flavor of those those investments in our in our corporate segment, particularly, come in a few different flavors, but the the predominant amount of growth that we've had in that segment has been around things like, information security and infrastructure, that support all of these other businesses that we're that we're invested in.

[Aaron Graft, Co-Founder, Vice Chairman & CEO at Triumph Financial]

That answer

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

your question, or do you have a follow-up to that?

[Analyst]

No. That answers the question. Thank you.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Yeah. And and so I just look. I think it's a great question, and it's a very fair question. You know, we have to think about since we report segments, like, how do we allocate things? It has been quite a lot of, as as you get deeper into handling the volumes of payments and audit and then the things we're doing and and even intelligence and data security and fraud in our space, we've really had to get out in front of that.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

It's just we're a bank. Right? And more than just being a bank, we are telling the market you can trust us to disperse $200,000,000 every day and get it to the right people or we're on the hook. And I don't, you know, I don't know how closely you follow the transportation market, but organized crime is here. I would argue state sponsored crime is here, And it is attacking every vector in transportation, not the least of which are those of us who remit payments.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

I mean, a lot's been written about stolen loads, and and there's a whole lot, and and, you know, our fingers are are in that slightly, but they also aim at they know there's a they know that there's a ton of money being dispersed from this institution, and so we just have to be bulletproof. But we are not ignorant of it. It is a fair question. And what we owe you, frankly, and and I I hope we laid the groundwork for this, is we said we are going to hold expenses flat from here while we grow revenue. I would argue to you that the expense base that we have, you can you can look at any specific little line item, but the bulk of it is there to be prudent in the face of a of a marketplace that that we play a critical role in and that when I lay awake at night and think about things, I wanna make sure we got the money to the right person the right way, and we were able to identify people who have been hacked, which happens every day.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

And so we just we feel the need to bulwark our defenses around that in order to fulfill the brand promise. Right? If you read our slide deck, it's transact confidently. That is our brand promise, that if Triumph is involved in your transaction, for you to know that we've done the work, the hard work, the credit work, the fraud work, all of the the regulatory work that you can trust that we will get we will do for you what we said we will do for you. And and so we've had some expense growth, and I I I hear you or I think it's a a a valid question. Hopefully, that helps you understand the why.

[Operator]

There are no more questions at this time. I'd now like to turn the call over to management for closing remarks.

[Aaron Graft, Founder, Vice Chairman & CEO at Triumph Financial]

Thank you all for being with us today. We look forward to seeing you in about ninety days. Have a great one.

Participants

Executives

• Luke Wyse, EVP - Head of Investor Relations
• Aaron Graft, Founder, Vice Chairman & CEO
• Dawn Salvucci-Favier, President - Triumph Intelligence
• Todd Ritterbusch, President - Payments & Banking
• W. Brad Voss, CFO
• Kim Fisk, President - Triumph Factoring
• Aaron Graft, Co-Founder, Vice Chairman & CEO

Analysts

• Matt Olney, Managing Director at Stephens Inc
• Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial
• Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)
• Gary Tenner, Managing Director & Senior Research Analyst at D.A. Davidson
• Hal Goetsch, Managing Director at B Riley Financial
• Analyst