NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) currently rates Triumph Bancorp, Inc. (NASDAQ: “TBK”, “Triumph”, or the “Company”), a holding company based in Dallas, Texas, with senior unsecured and subordinated debt ratings of BBB/BBB- and a short-term debt rating of K3. The outlook on the long-term ratings is stable.
Triumph recently acquired ColoEast Bankshares, Inc. (“ColoEast”), the holding company for Colorado East Bank & Trust. Since the close of the ColoEast transaction on August 1, 2016, Triumph has been focused on fully integrating ColoEast’s core systems into its operations. In addition to increasing Triumph’s consolidated total assets to approximately $2.52 billion, the transaction is expected to enhance TBK’s deposit base, augment market accessibility, and improve loan portfolio diversification, thereby the Company’s overall operational efficiency.
During the second quarter of 2016, TBK’s net income stood at $4.6 million compared to $5.0 million recorded during the three-month period ending March 31, 2016. The slight decrease in net income is due, in part, to a decrease in noninterest income as a result of the $1.2 million OREO write-down, related to a branch facility previously transferred to OREO for inefficiency. As of June 30, 2016, the Company’s total loans grew 13% from the linked quarter to a record high of $1.4 billion, largely driven by a $78.8 million increase in the commercial finance portfolio, combined with approximately $57.7 million in growth in the mortgage warehouse business and a $28.2 million increase in the Community Bank portfolio. TBK maintained strong profitability metrics with a net interest margin (NIM) of 5.98% as of June 30, 2016, compared to 5.61% in the linked quarter. The return on average assets (ROAA) stood at 1.07%, while the efficiency ratio improved to 68.74% in relation to the linked quarter. Asset quality improved slightly during the second quarter of 2016, as evidenced by a 12 basis points decrease in nonperforming assets as a percentage of total assets, which stood at 1.60%. Triumph is “well capitalized” with Tier 1 risk based capital and total risk based capital ratios of 17.1% and 18.0%, respectively.
In July 2016, KBRA assigned a senior unsecured debt rating of BBB, subordinated debt rating of BBB-, and short-term debt rating of K3 to Triumph Bancorp, Inc. In addition, KBRA assigned deposit and senior unsecured debt ratings of BBB+ and short-term debt and deposit ratings of K2 to the subsidiary bank, TBK Bank, SSB (“the Bank”). The ratings are supported by TBK’s stronger than average earnings metrics and sound regulatory capital levels, as well as diversified business lines and revenue streams. The ratings are also reflective of the institution’s position in the niche market of invoice factoring, a methodical acquisition strategy, and national footprint. Constraints to the ratings include TBK’s operation in business lines with higher than average risk, though resulting in high yields, as well as a comparatively high efficiency ratio, large concentration in commercial and industrial (C&I) lending and above-average nonperforming assets as a percentage of total assets.
To view the report, please use the following link: Triumph Bancorp, Inc.
The rating was assigned using KBRA’s Global Bank & Bank Holding Company Rating Methodology, published on February 19, 2016.
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