株探米国株
英語
エドガーで原本を確認する
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________
FORM 10-Q
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☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 001-36722
___________________________________________________________
TRIUMPH FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
___________________________________________________________
Texas 20-0477066
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
12700 Park Central Drive, Suite 1700
Dallas, Texas 75251
(Address of principal executive offices)
(214) 365-6900
(Registrant’s telephone number, including area code)
___________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
 Accelerated filer
☐
Non-accelerated filer
☐
 Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock — $0.01 par value, 23,734,073 shares, as of July 14, 2025.
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading
Symbol(s)		 Name of each exchange on which registered
Common stock, par value $0.01 per share TFIN
NASDAQ Global Select Market
Depositary Shares Each Representing a 1/40th Interest in a Share of 7.125% Series C Fixed-Rate Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share
 TFINP
NASDAQ Global Select Market

Table of Contents
TRIUMPH FINANCIAL, INC.
FORM 10-Q
June 30, 2025
TABLE OF CONTENTS
i
Table of Contents
PART I – FINANCIAL INFORMATION
ITEM 1
FINANCIAL STATEMENTS
1
Table of Contents
TRIUMPH FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2025 and December 31, 2024
(Dollar amounts in thousands)
June 30,
2025		 December 31,
2024
(Unaudited)
ASSETS
Cash and due from banks $ 84,561  $ 73,836 
Interest bearing deposits with other banks 197,785  256,281 
Total cash and cash equivalents 282,346  330,117 
Securities - equity investments with readily determinable fair values 4,526  4,445 
Securities - available for sale 392,275  381,561 
Securities - held to maturity, net of allowance for credit losses of $1,399 and $3,491, respectively, fair value of $2,294 and $2,514, respectively
 1,782  1,876 
Loans held for sale 6,066  1,172 
Loans, net of allowance for credit losses of $38,691 and $40,714, respectively
 4,914,479  4,506,246 
Federal Home Loan Bank and other restricted stock 13,339  14,054 
Premises and equipment, net 149,120  160,737 
Capitalized software, net 43,011  37,971 
Goodwill 353,900  241,949 
Intangible assets, net 55,265  16,259 
Bank-owned life insurance 63,787  62,690 
Deferred tax asset, net 3,023  13,581 
Other assets 211,829  176,317 
Total assets $ 6,494,748  $ 5,948,975 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing $ 2,285,327  $ 1,964,457 
Interest bearing 2,900,771  2,856,363 
Total deposits 5,186,098  4,820,820 
Federal Home Loan Bank advances 180,000  30,000 
Subordinated notes 69,780  69,662 
Junior subordinated debentures 42,666  42,352 
Other liabilities 103,822  95,222 
Total liabilities 5,582,366  5,058,056 
Commitments and contingencies - See Note 7 and Note 8
Stockholders' equity - See Note 11
Preferred stock 45,000  45,000 
Common stock, 23,727,046 and 23,391,411 shares outstanding, respectively
 295  291 
Additional paid-in-capital 588,302  567,884 
Treasury stock, at cost (270,619) (268,356)
Retained earnings 552,049  549,215 
Accumulated other comprehensive income (loss) (2,645) (3,115)
Total stockholders’ equity 912,382  890,919 
Total liabilities and stockholders' equity $ 6,494,748  $ 5,948,975 
See accompanying condensed notes to consolidated financial statements.
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TRIUMPH FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Six Months Ended June 30, 2025 and 2024
(Dollar amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Interest and dividend income:
Loans, including fees $ 54,836  $ 54,900  $ 108,412  $ 108,452 
Factored receivables, including fees 44,217  40,028  82,911  77,937 
Securities 5,721  5,523  11,029  10,874 
FHLB and other restricted stock 246  234  495  466 
Cash deposits 4,181  6,330  8,624  11,233 
Total interest income 109,201  107,015  211,471  208,962 
Interest expense:
Deposits 15,505  15,520  29,902  27,672 
Subordinated notes 661  1,225  1,343  2,449 
Junior subordinated debentures 1,035  1,162  2,029  2,346 
Other borrowings 3,322  1,193  5,136  2,545 
Total interest expense 20,523  19,100  38,410  35,012 
Net interest income 88,678  87,915  173,061  173,950 
Credit loss expense (benefit) (702) 4,155  628  10,051 
Net interest income after credit loss expense (benefit) 89,380  83,760  172,433  163,899 
Noninterest income:
Service charges on deposits 1,742  1,810  3,338  3,537 
Card income 1,922  2,085  3,719  3,953 
Net gains (losses) on sale of loans 190  123  324  (69)
Fee income 12,755  8,517  21,869  17,200 
Insurance commissions 1,282  1,505  2,532  3,073 
Other 1,493  3,127  4,792  4,472 
Total noninterest income 19,384  17,167  36,574  32,166 
Noninterest expense:
Salaries and employee benefits 59,882  56,005  118,600  110,190 
Occupancy, furniture and equipment 8,139  8,565  16,581  16,201 
FDIC insurance and other regulatory assessments 894  641  1,621  1,294 
Professional fees (320) 4,558  5,744  8,099 
Amortization of intangible assets 3,400  2,869  5,800  5,593 
Advertising and promotion 1,838  2,008  3,302  3,222 
Communications and technology 12,315  14,307  24,559  26,201 
Software amortization 2,865  1,357  4,857  2,531 
Travel and entertainment 1,619  1,513  3,111  3,022 
Other 10,208  5,520  16,838  11,361 
Total noninterest expense 100,840  97,343  201,013  187,714 
Net income before income tax expense 7,924  3,584  7,994  8,351 
Income tax expense 3,504  837  3,557  1,446 
Net income $ 4,420  $ 2,747  $ 4,437  $ 6,905 
Dividends on preferred stock (802) (802) (1,603) (1,603)
Net income (loss) available to common stockholders $ 3,618  $ 1,945  $ 2,834  $ 5,302 
Earnings per common share
Basic $ 0.15  $ 0.08  $ 0.12  $ 0.23 
Diluted $ 0.15  $ 0.08  $ 0.12  $ 0.22 
See accompanying condensed notes to consolidated financial statements.
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TRIUMPH FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three and Six Months Ended June 30, 2025 and 2024
(Dollar amounts in thousands)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Net income $ 4,420  $ 2,747  $ 4,437  $ 6,905 
Other comprehensive income:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period 1,019  (344) 613  (554)
Tax effect (245) 82  (143) 85 
Unrealized holding gains (losses) arising during the period, net of taxes 774  (262) 470  (469)
Reclassification of amount realized through sale or call of securities —  —  —  — 
Tax effect —  —  —  — 
Reclassification of amount realized through sale or call of securities, net of taxes —  —  —  — 
Change in unrealized gains (losses) on securities, net of tax 774  (262) 470  (469)
Total other comprehensive income (loss) 774  (262) 470  (469)
Comprehensive income (loss) $ 5,194  $ 2,485  $ 4,907  $ 6,436 
See accompanying condensed notes to consolidated financial statements.
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TRIUMPH FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Three and Six Months Ended June 30, 2025 and 2024
(Dollar amounts in thousands)
(Unaudited)
Preferred Stock Common Stock Additional
Paid-in-
Capital		 Treasury Stock Retained
Earnings		 Accumulated Total
Stockholders'
Equity
Liquidation
Preference
Amount		 Shares
Outstanding		 Par
Amount		 Shares
Outstanding		 Cost Other
Comprehensive
Income (Loss)
Balance, January 1, 2025 $ 45,000  23,391,411  $ 291  $ 567,884  5,729,802  $ (268,356) $ 549,215  $ (3,115) $ 890,919 
Vesting of restricted stock units and performance stock units —  8,973  —  —  —  —  —  —  — 
Stock option exercises, net —  495  —  25  —  —  —  —  25 
Issuance of common stock pursuant to the Employee Stock Purchase Plan —  20,892  1  1,367  —  —  —  —  1,368 
Stock based compensation —  —  —  2,831  —  —  —  —  2,831 
Forfeiture of restricted stock awards —  (575) —  36  575  (36) —  —  — 
Purchase of treasury stock, net —  (1,456) —  —  1,456  (128) —  —  (128)
Dividends on preferred stock —  —  —  —  —  —  (801) —  (801)
Net income —  —  —  —  —  —  17  —  17 
Other comprehensive income (loss) —  —  —  —  —  —  —  (304) (304)
Balance, March 31, 2025 $ 45,000  23,419,740  $ 292  $ 572,143  5,731,833  $ (268,520) $ 548,431  $ (3,419) $ 893,927 
Issuance of common stock —  256,984  2  12,730  —  —  —  —  12,732 
Vesting of restricted stock units and performance stock units —  88,930  1  (1) —  —  —  —  — 
Stock based compensation —  —  —  3,430  —  —  —  —  3,430 
Purchase of treasury stock, net —  (38,608) —  —  38,608  (2,099) —  —  (2,099)
Dividends on preferred stock —  —  —  —  —  —  (802) —  (802)
Net income —  —  —  —  —  —  4,420  —  4,420 
Other comprehensive income (loss) —  —  —  —  —  —  —  774  774 
Balance, June 30, 2025 $ 45,000  23,727,046  $ 295  $ 588,302  5,770,441  $ (270,619) $ 552,049  $ (2,645) 912,382 
5
Table of Contents
Preferred Stock Common Stock Additional
Paid-in-
Capital		 Treasury Stock Retained
Earnings		 Accumulated
Other
Comprehensive
Income (Loss)		 Total
Stockholders'
Equity
Liquidation
Preference
Amount		 Shares
Outstanding		 Par
Amount		 Shares
Outstanding		 Cost
Balance, January 1, 2024 $ 45,000  23,302,414  $ 290  $ 550,743  5,683,841  $ (265,038) $ 536,331  $ (2,926) $ 864,400 
Vesting of restricted stock and performance stock units —  9,877  —  —  —  —  —  —  — 
Stock option exercises, net —  5,401  —  144  —  —  —  —  144 
Issuance of common stock pursuant to the Employee Stock Purchase Plan —  18,328  —  1,099  —  —  —  —  1,099 
Stock based compensation —  —  —  3,627  —  —  —  —  3,627 
Purchase of treasury stock, net —  (1,023) —  —  1,023  (81) —  —  (81)
Dividends on preferred stock —  —  —  —  —  —  (801) —  (801)
Net income —  —  —  —  —  —  4,158  —  4,158 
Other comprehensive income (loss) —  —  —  —  —  —  —  (207) (207)
Balance, March 31, 2024 $ 45,000  23,334,997  $ 290  $ 555,613  5,684,864  $ (265,119) $ 539,688  $ (3,133) $ 872,339 
Vesting of restricted stock and performance stock units —  63,401  1  (1) —  —  —  —  — 
Stock based compensation —  —  —  3,439  —  —  —  —  3,439 
Forfeiture of restricted stock awards —  (278) —  21  278  (21) —  —  — 
Purchase of treasury stock, net —  (44,601) —  —  44,601  (3,212) —  —  (3,212)
Dividends on preferred stock —  —  —  —  —  —  (802) —  (802)
Net income —  —  —  —  —  —  2,747  —  2,747 
Other comprehensive income (loss) —  —  —  —  —  —  —  (262) (262)
Balance, June 30, 2024 $ 45,000  23,353,519  $ 291  $ 559,072  5,729,743  $ (268,352) $ 541,633  $ (3,395) $ 874,249 
See accompanying condensed notes to consolidated financial statements.
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TRIUMPH FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Dollar amounts in thousands)
(Unaudited)
Six Months Ended June 30,
2025 2024
Cash flows from operating activities:
Net income $ 4,437  $ 6,905 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation 7,899  7,604 
Net accretion on loans (778) (1,598)
Amortization of subordinated notes issuance costs 118  261 
Amortization of junior subordinated debentures 314  302 
Net (accretion) amortization on securities (216) (593)
Amortization of intangible assets 5,800  5,593 
Software amortization 4,857  2,531 
Deferred taxes, net 4,164  2,243 
Credit loss expense (benefit) 628  10,051 
Stock based compensation 6,261  7,066 
Net (gains) losses on equity securities (81) (468)
Net OREO (gains) losses and valuation adjustments —  16 
Net (gains) losses on disposal of premises and equipment (443) — 
Origination of loans held for sale (8,627) (3,495)
Proceeds from sale of loans originated or purchased for sale 8,101  1,368 
Net (gains) losses on sale of loans (324) 69 
Net change in operating leases (217) 312 
Change in estimated fair value of indemnification asset 409  409 
Change in estimated fair value of revenue share asset (274) (879)
(Increase) decrease in other assets (36,001) (11,556)
Increase (decrease) in other liabilities 10,152  (15,015)
Net cash provided by (used in) operating activities 6,179  11,126 
Cash flows from investing activities:
Purchases of securities available for sale (105,000) (83,261)
Proceeds from maturities, calls, and pay downs of securities available for sale 95,028  43,194 
Proceeds from maturities, calls, and pay downs of securities held to maturity 135  307 
Purchases of loans held for investment (21,742) (2,503)
Proceeds from sale of loans 13,795  18,016 
Net change in loans (406,345) (141,637)
Purchases of premises and equipment (7,294) (53,735)
Proceeds from sales of premises and equipment 11,455  — 
Net proceeds from sale of OREO —  64 
Expenditures for capitalized software (9,897) (10,748)
(Purchases) redemptions of FHLB and other restricted stock, net 715  238 
Net cash paid for acquisitions (137,517) — 
Acquired intangible assets (124) (2,920)
Net cash provided by (used in) investing activities (566,791) (232,985)
Cash flows from financing activities:
Net increase (decrease) in deposits 365,278  414,540 
Increase (decrease) in Federal Home Loan Bank advances 150,000  25,000 
Preferred stock dividends (1,603) (1,603)
Stock option exercises, net 25  144 
Proceeds from employee stock purchase plan common stock issuance 1,368  1,099 
Purchase of treasury stock, net (2,227) (3,293)
Net cash provided by (used in) financing activities 512,841  435,887 
Net increase (decrease) in cash and cash equivalents (47,771) 214,028 
Cash and cash equivalents at beginning of period 330,117  286,635 
Cash and cash equivalents at end of period 282,346  500,663 
See accompanying condensed notes to consolidated financial statements.
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TRIUMPH FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Dollar amounts in thousands)
(Unaudited)
Six Months Ended June 30,
2025 2024
Supplemental cash flow information:
Interest paid $ 37,472  $ 33,824 
Income taxes paid, net $ 1,642  $ 646 
Cash paid for operating lease liabilities $ 2,952  $ 2,425 
Supplemental noncash disclosures:
Loans transferred to OREO $ 1,995  $ 43 
Loans held for investment transferred to loans held for sale $ 18,075  $ 16,388 
Lease liabilities arising from obtaining right-of-use assets $ 548  $ 2,382 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Triumph Financial, Inc. (collectively with its subsidiaries, “Triumph Financial”, or the “Company” as applicable) is a financial holding company headquartered in Dallas, Texas, offering a diversified line of banking, factoring, payments, and intelligence services. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Triumph CRA Holdings, LLC (“TCRA”), TBK Bank, SSB (“TBK Bank”), and TBK Bank’s wholly owned subsidiary Triumph Insurance Group, Inc. (“TIG”). Substantially all of the Company's products and services (other than certain insurance brokerage activities at TIG) are offered through TBK Bank.
Effective January, 1, 2025, Triumph Financial Services LLC, the entity through which the Company previously conducted all of its factoring operations, was merged with and into TBK Bank, SSB.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and in accordance with guidance provided by the Securities and Exchange Commission (“SEC”). Accordingly, the condensed financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary for a fair presentation. Transactions between the subsidiaries have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
Reportable Segments
The Company’s reportable segments are comprised of strategic business units primarily based upon industry categories and, to a lesser extent, the core competencies relating to product origination, distribution methods, operations and servicing. Segment determination also considers organizational structure and is consistent with the presentation of financial information to the chief operating decision maker to evaluate segment performance, develop strategy, and allocate resources. The Company's chief operating decision maker is the Chief Executive Officer of Triumph Financial, Inc. Management has determined that the Company has four reportable segments consisting of Banking, Factoring, Payments, and Intelligence.
The Banking segment includes the operations of TBK Bank's traditional community banking services. The Banking segment derives its revenue principally from investments in interest-earning assets as well as noninterest income typical for the banking industry.
The Factoring segment derives its revenue principally from factoring services.
The Payments segment includes the operations of the TBK Bank's payments products and services focused on the transportation industry, which is the payments network for presentment, audit, and payment of over-the-road trucking invoices. The Payments segment derives its revenue from transaction fees and interest income on factored receivables related to invoice payments. These factored receivables consist of (i) invoices where we offer a carrier a quickpay opportunity to receive payment at a discount in advance of the standard payment term for such invoice in exchange for the assignment of such invoice to us, (ii) offering freight brokers the ability to settle their invoices with us on an extended term following our payment to their carriers as an additional liquidity option for such freight brokers, and (iii) factoring transactions where we purchase receivables payable to such freight brokers from their shipper clients.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Intelligence segment was launched in the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of the assets of Isometric Technologies Inc., a company that provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry. The operations of this segment were further supplemented with our acquisition of Greenscreens AI. Inc., a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights, during the quarter ended June 30, 2025. Intelligence offerings enable better decision making, market intelligence and automation. The revenue for these offerings is derived through access and subscription fees, as well as seat licenses where applicable.
For further discussion of management's operating segments and allocation methodology, see Note 16 – Business Segment Information.
Adoption of New Accounting Standards
In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 Requires public entities to disclose significant segment expenses, an amount and description for other segment items, the title and position of the entity’s chief operating decision maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss to assess segment performance, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis. ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 effective December 31, 2024. Adoption of ASU 2023-07 did not have a material impact on the Company's consolidated financial statements. See Note 16 – Business Segment Information for new disclosures required by ASU 2023-07.
Newly Issued, But Not Yet Effective Accounting Standards
In December 2023, the FASB issued Accounting Standards Update 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. ASU 2023-09 is effective for the Company for annual periods beginning after December 15, 2024 with early adoption permitted. The Company will update its income tax disclosures upon adoption.
In November 2024, the FASB issued Accounting Standards Update 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)" ("ASU 2024-03"). ASU 2024-03 requires public entities to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. ASU 2024-03 is effective for the Company for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will update its expense disclosures upon adoption.
USPS Settlement
As of June 30, 2025, we carried a receivable (the “Misdirected Payments Receivable”) payable by the United States Postal Service (“USPS”) arising from accounts factored to a large carrier. The balance of such Misdirected Payments Receivable, net of customer reserves, was $19.4 million. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputed their obligation to make such payment, citing purported deficiencies in the notices delivered to them. We have been a party to litigation in the United States Court of Federal Claims against the USPS seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. On June 30, 2025, we reached an agreement with the USPS ("the USPS Settlement") whereby the USPS agreed to pay us $47.5 million to settle the litigation in the United States Court of Federal Claims and certain other related proceedings. Such settlement was entered into as part of a global settlement of the disputes related to the Misdirected Payments Receivable, other amounts we asserted were due to us from USPS for other balances owed to us as a result of their failure to honor our notices of assignment, and certain claims of the large carrier involved in this matter against the USPS for underpayment on certain transportation contracts in which we had a security interest. We received the full $47.5 million settlement proceeds on July 10, 2025. The proceeds of the USPS Settlement will be applied as follows:
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
•$11.5 million to the aforementioned large carrier,
•$19.4 million to relieve the entire balance of Misdirected Payments Receivable, net of customer reserves,
•$1.1 million of interest and fees,
•$7.9 million of legal expense recovery
•$3.8 million to recovery of previously charged-off acquired over-formula advances related to the aforementioned large carrier, and
•$3.8 million to CVLG in accordance with the amended terms of the CVLG transaction.
The USPS Settlement had a $12.4 million and $11.5 million positive impact on pretax net income for the three and six months ended June 30, 2025, respectively made up of the prior period impacts of the interest and fees, legal expense recovery, and the recovery of the previously charged-off acquired over-formula advances. The $19.4 million Misdirected Payments Receivable balance was legally discharged upon receipt of the settlement proceeds on July 10, 2025.
NOTE 2 — ACQUISITIONS AND DIVESTITURES
Greenscreens.ai
On May 8, 2025, the Company, through its wholly-owned subsidiary TBK Bank, SSB, acquired Greenscreens AI, Inc. ("Greenscreens"), a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights.
A summary of the estimated fair values of assets acquired, consideration transferred, and the resulting goodwill is as follows:
(Dollars in thousands)
Assets acquired:
Cash and cash equivalents $ 1,601 
Accounts receivable and other 933 
Intangible assets - customer relationship 36,380 
Intangible assets - software 8,340 
47,254 
Liabilities assumed:
Accounts payable and other 1,104 
Deferred tax liabilities, net 6,251 
7,355 
Fair value of net assets acquired $ 39,899 
Consideration:
Cash paid $ 139,118 
Stock consideration 12,732 
Total consideration $ 151,850 
Goodwill $ 111,951 
Consideration paid for the acquisition totaled $151,850,000, including $139,118,000 in cash and 256,984 shares of the Company's common stock valued at $12,732,000.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company has recognized goodwill of $111,951,000, which was calculated as the excess of the fair value of consideration exchanged as compared to the fair value of identifiable net assets acquired. The goodwill in this acquisition resulted from expected synergies between our Factoring, Payments, and Intelligence segments, as well as progress towards the development of data products to be offered to the freight brokerage community; therefore goodwill of $16,096,000 was allocated to the Company's Factoring segment, $15,425,000 was allocated to the Company's Payments segment, and $80,430,000 was allocated to the Company’s Intelligence segment. The goodwill will not be deducted for tax purposes. The initial accounting for the acquisition has not been completed because the fair values of the consideration paid, the assets acquired, and the liabilities assumed have not yet been finalized.
The intangible assets recognized include a customer relationship intangible asset with an acquisition date fair value of $36,380,000 which will be amortized utilizing an accelerated method over its twelve year estimated useful life and a capitalized software intangible asset with an acquisition date fair value of $8,340,000 which will be amortized on a straight-line basis over its five year estimated useful life. A customer relationship intangible asset of $21,520,000 was allocated to the Company's Intelligence segment and a customer relationship intangible asset of $14,860,000 was allocated to the Company's Payments segment. The entire software intangible asset was allocated to the Company's Intelligence segment.
Revenue and earnings of Greenscreens since the acquisition date have not been disclosed as the acquired company was merged into the Company and separate financial information is not readily available.
Expenses related to the acquisition totaling $3,009,000 and $967,000 were recorded in professional fees in the consolidated statements of income during the three months ended June 30, 2025 and March 31, 2025, respectively.
Isometric Technologies Inc.
On December 1, 2024, the Company acquired the assets of Isometric Technologies Inc. ("ISO"), a freight technology company engaged in providing service and performance scoring and benchmarking capabilities to the over-the-road trucking industry.
A summary of the estimated fair values of assets acquired, consideration transferred, and the resulting goodwill is as follows:
(Dollars in thousands)
Assets acquired:
Intangible assets - capitalized software $ 1,680 
Intangible assets - customer relationship 60 
Intangible assets - other 20 
Fair value of net assets acquired $ 1,760 
Consideration:
Cash paid $ 10,000 
Goodwill $ 8,240 
The Company has recognized goodwill of $8,240,000, which was calculated as the excess of the fair value of consideration exchanged as compared to the fair value of identifiable net assets acquired and was allocated to the Company’s Intelligence segment. The goodwill in this acquisition resulted from expected synergies and progress towards the development of data products to be offered to the freight brokerage community. The goodwill will be deducted for tax purposes. The initial accounting for the acquisition has not been completed because the fair values of the assets acquired have not yet been finalized.
The intangible assets recognized include a capitalized software intangible asset with an acquisition date fair value of $1,680,000 which will be amortized on a straight-line basis over its four year estimated useful life, a customer relationship intangible asset with an acquisition date fair value of $60,000 which will be amortized utilizing an accelerated method over its four year estimated useful life, and a trade name intangible asset with an acquisition date fair value of $20,000 which will be amortized on a straight-line basis over its one year estimated useful life.
Revenue and earnings of ISO since the acquisition date have not been disclosed as the acquired company was merged into the Company and separate financial information is not readily available.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Expenses related to the acquisition totaling $324,000 were recorded in professional fees in the consolidated statements of income during the three months ended December 31, 2024.
NOTE 3 — SECURITIES
Equity Securities With Readily Determinable Fair Values
The Company held equity securities with readily determinable fair values of $4,526,000 and $4,445,000 at June 30, 2025 and December 31, 2024, respectively. The gross realized and unrealized gains and losses recognized on equity securities with readily determinable fair values in noninterest income in the Company’s consolidated statements of income were as follows:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Unrealized gains (losses) on equity securities held at the reporting date $ 14  $ (19) $ 81  $ (66)
Realized gains (losses) on equity securities sold during the period —  —  —  — 
$ 14  $ (19) $ 81  $ (66)
Equity Securities Without Readily Determinable Fair Values
The following table summarizes the Company's investments in equity securities without readily determinable fair values:
(Dollars in thousands) June 30, 2025 December 31, 2024
Equity Securities without readily determinable fair value, at cost $ 74,809  $ 71,807 
Upward adjustments based on observable price changes, cumulative 10,163  10,163 
Equity Securities without readily determinable fair value, carrying value $ 84,972  $ 81,970 
Equity securities without readily determinable fair values include Federal Home Loan Bank and other restricted stock, which are reported separately in the Company's consolidated balance sheets. Equity securities without readily determinable fair values also include the Company's investments in the common stock of Trax Group, Inc. and Warehouse Solutions Inc., with carrying amounts of $9,700,000 and $38,088,000, respectively, at June 30, 2025. Both investments have been allocated to our Payments segment and are included in other assets in the Company's consolidated balance sheets.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
There were no realized or unrealized gains or losses recognized on equity securities without readily determinable fair values during the three and six months ended June 30, 2025 and 2024.
Management monitors its equity securities without readily determinable fair values for observable transactions in similar equity instruments as well as indicators of impairment either of which would require it to mark such equity securities to fair value. No such transactions or indicators of impairment were detected during the three and six months ended June 30, 2025.
Debt Securities
Debt securities have been classified in the financial statements as available for sale or held to maturity. The following table summarizes the amortized cost, fair value, and allowance for credit losses of debt securities and the corresponding amounts of gross unrealized gains and losses of available for sale securities recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses of held to maturity securities:
(Dollars in thousands) Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Allowance
for Credit
Losses		 Fair
Value
June 30, 2025
Available for sale securities:
Mortgage-backed securities, residential $ 104,322  $ 253  $ (4,666) $ —  $ 99,909 
Asset-backed securities 862  6  —  —  868 
State and municipal 2,872  —  (79) —  2,793 
CLO securities 286,224  1,063  —  —  287,287 
Corporate bonds 266  —  (9) —  257 
SBA pooled securities 1,211  7  (57) —  1,161 
Total available for sale securities $ 395,757  $ 1,329  $ (4,811) $ —  $ 392,275 
(Dollars in thousands) Amortized
Cost		 Gross
Unrecognized
Gains		 Gross
Unrecognized
Losses		 Fair
Value
June 30, 2025
Held to maturity securities:
CLO securities $ 3,181  $ —  $ (887) $ 2,294 
Allowance for credit losses (1,399)
Total held to maturity securities, net of ACL $ 1,782 
(Dollars in thousands) Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Allowance for Credit Losses Fair
Value
December 31, 2024
Available for sale securities:
Mortgage-backed securities, residential $ 89,740  $ 89  $ (5,644) $ —  $ 84,185 
Asset-backed securities 907  —  (2) —  905 
State and municipal 3,154  —  (91) —  3,063 
CLO Securities 290,286  1,627  —  —  291,913 
Corporate bonds 266  —  (4) —  262 
SBA pooled securities 1,305  9  (81) —  1,233 
Total available for sale securities $ 385,658  $ 1,725  $ (5,822) $ —  $ 381,561 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrecognized
Losses		 Fair
Value
December 31, 2024
Held to maturity securities:
CLO securities $ 5,367  $ —  $ (2,853) $ 2,514 
Allowance for credit losses (3,491)
Total held to maturity securities, net of ACL $ 1,876 
The amortized cost and estimated fair value of securities at June 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Available for Sale Securities Held to Maturity Securities
(Dollars in thousands) Amortized
Cost		 Fair
Value		 Amortized
Cost		 Fair
Value
Due in one year or less $ 191  $ 190  $ —  $ — 
Due from one year to five years 2,178  2,151  3,181  2,294 
Due from five years to ten years 43,368  43,444  —  — 
Due after ten years 243,625  244,552  —  — 
289,362  290,337  3,181  2,294 
Mortgage-backed securities, residential 104,322  99,909  —  — 
Asset-backed securities 862  868  —  — 
SBA pooled securities 1,211  1,161  —  — 
$ 395,757  $ 392,275  $ 3,181  $ 2,294 
There were no sales of debt securities during the three and six months ended June 30, 2025 and 2024.
Debt securities with a carrying amount of approximately $32,416,000 and $25,818,000 at June 30, 2025 and December 31, 2024, respectively, were pledged to secure public deposits, customer repurchase agreements, and for other purposes required or permitted by law.
Accrued interest on available for sale securities totaled $3,677,000 and $4,755,000 at June 30, 2025 and December 31, 2024, respectively, and was included in other assets on the Company's consolidated balance sheets. There was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2025 and 2024.
The following table summarizes available for sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position:
Less than 12 Months 12 Months or More Total
(Dollars in thousands) Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses
June 30, 2025
Available for sale securities:
 Mortgage-backed securities, residential $ 31,297  $ (565) $ 28,296  $ (4,101) $ 59,593  $ (4,666)
 Asset-backed securities —  —  —  —  —  — 
 State and municipal —  —  2,358  (79) 2,358  (79)
 CLO securities —  —  —  —  —  — 
 Corporate bonds 257  (9) —  —  257  (9)
 SBA pooled securities —  —  814  (57) 814  (57)
$ 31,554  $ (574) $ 31,468  $ (4,237) $ 63,022  $ (4,811)
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Less than 12 Months 12 Months or More Total
(Dollars in thousands) Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses
December 31, 2024
Available for sale securities:
Mortgage-backed securities, residential $ 32,124  $ (641) $ 35,340  $ (5,003) $ 67,464  $ (5,644)
Asset-backed securities —  —  905  (2) 905  (2)
State and municipal 355  (5) 2,356  (86) 2,711  (91)
CLO Securities —  —  —  —  —  — 
Corporate bonds 262  (4) —  —  262  (4)
SBA pooled securities —  —  876  (81) 876  (81)
$ 32,741  $ (650) $ 39,477  $ (5,172) $ 72,218  $ (5,822)
Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.
At June 30, 2025, the Company had 78 available for sale debt securities in an unrealized loss position without an allowance for credit losses. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of June 30, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore the Company carried no allowance for credit losses on available for sale debt securities at June 30, 2025.
The following table presents the activity in the allowance for credit losses for held to maturity debt securities:
(Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30,
Held to Maturity CLO Securities 2025 2024 2025 2024
Allowance for credit losses:
Beginning balance $ 1,476  $ 3,135  $ 3,491  $ 3,190 
Credit loss expense (97) 27  48  (28)
Charge-offs —  —  (2,160) — 
Recoveries 20  —  20  — 
Allowance for credit losses ending balance $ 1,399  $ 3,162  $ 1,399  $ 3,162 
The Company’s held to maturity securities are investments in the unrated subordinated notes of collateralized loan obligation funds. These securities are the junior-most in securitization capital structures, and are subject to suspension of distributions if the credit of the underlying loan portfolios deteriorates materially. The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type. At June 30, 2025 and December 31, 2024, the Company’s held to maturity securities consisted of investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call. During the three months ended March 31, 2025, the Company charged off one of it's three investments in these CLO funds as it was deemed to be an uncollectible investment. The charge-off was fully reserved in a prior period. At June 30, 2025 and December 31, 2024, $1,913,000 and $4,073,000, respectively, of the Company’s held to maturity securities were classified as nonaccrual.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 — LOANS AND ALLOWANCE FOR CREDIT LOSSES
Loans Held for Sale
The following table presents loans held for sale:
(Dollars in thousands) June 30, 2025 December 31, 2024
Commercial real estate $ 36  $ — 
Construction, land development, land 1,964  — 
1-4 family residential 1,595  1,167 
Commercial 2,471  5 
Total loans held for sale $ 6,066  $ 1,172 
At June 30, 2025, construction, land development and land loans held for sale totaling $1,964,000 and commercial real estate loans held for sale totaling $36,000 were past due more than 90 days, on nonaccrual status, and risk rated as classified.
Loans Held for Investment
Loans
The following table presents the amortized cost and unpaid principal balance of loans held for investment:
June 30, 2025 December 31, 2024
(Dollars in thousands) Amortized
Cost		 Unpaid
Principal		 Difference Amortized
Cost		 Unpaid
Principal		 Difference
Commercial real estate $ 754,509  $ 754,769  $ (260) $ 777,689  $ 777,980  $ (291)
Construction, land development, land 221,419  221,719  (300) 203,804  204,268  (464)
1-4 family residential 172,312  171,797  515  154,020  153,711  309 
Farmland 44,069  44,153  (84) 56,366  56,450  (84)
Commercial 1,132,269  1,144,082  (11,813) 1,119,245  1,120,551  (1,306)
Factored receivables 1,401,377  1,404,906  (3,529) 1,204,510  1,208,486  (3,976)
Consumer 17,520  17,538  (18) 8,000  8,005  (5)
Mortgage warehouse 1,209,695  1,209,695  —  1,023,326  1,023,326  — 
Total loans held for investment 4,953,170  $ 4,968,659  $ (15,489) 4,546,960  $ 4,552,777  $ (5,817)
Allowance for credit losses (38,691) (40,714)
$ 4,914,479  $ 4,506,246 
The difference between the amortized cost and the unpaid principal is due to (1) premiums and discounts associated with acquired loans totaling $12,122,000 and $2,689,000 at June 30, 2025 and December 31, 2024, respectively, and (2) net deferred origination and factoring fees totaling $3,367,000 and $3,128,000 at June 30, 2025 and December 31, 2024, respectively.
Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $40,608,000 and $36,838,000 at June 30, 2025 and December 31, 2024, respectively, and was included in other assets on the Company's consolidated balance sheets.
During the three months ended June 30, 2025, the Company acquired a $23,411,000 nonperforming commercial loan for $3,284,000. The loan was purchased credit deteriorated ("PCD") and a $10,780,000 ACL was established on Day 1 resulting in a discount of $9,348,000. Prior to June 30, 2025, the Company determined that the entire $10,780,000 ACL was uncollectible and charged off the entire amount. Such charge-off had no impact on credit loss expense.
As of June 30, 2025, most of the Company’s non-factoring business activity is with customers located within certain states. The states of Texas (21%), Colorado (11%), Illinois (10%), and Iowa (4%) make up 46% of the Company’s gross loans, excluding factored receivables. Therefore, the Company’s exposure to credit risk is affected by changes in the economies in these states. At December 31, 2024, the states of Texas (22%), Illinois (12%), Colorado (10%), and Iowa (4%) made up 48% of the Company’s gross loans, excluding factored receivables.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A majority (97%) of the Company's factored receivables, representing approximately 27% of the Company's total loan portfolio as of June 30, 2025, are transportation receivables. At December 31, 2024, 97% of the Company's factored receivables, representing approximately 26% of the Company's total loan portfolio, were transportation receivables.
At June 30, 2025 and December 31, 2024, the Company had $258,514,000 and $267,891,000, respectively, of customer reserves associated with factored receivables. These amounts represent customer reserves held to settle any payment disputes or collection shortfalls, may be used to pay customers’ obligations to various third parties as directed by the customer, are periodically released to or withdrawn by customers, and are reported as deposits in the consolidated balance sheets.
As of June 30, 2025 the Company carried a separate receivable (the “Misdirected Payments Receivable”) payable by the United States Postal Service (“USPS”) arising from accounts factored to a large carrier. The balance of such Misdirected Payments Receivable, net of customer reserves, was $19,361,000 at June 30, 2025 and is reflected in factored receivables. As supported by the USPS Settlement, we have not reserved for such balance as of June 30, 2025. Refer to Note 1 for further discussion.
Loans with carrying amounts of $1,805,520,000 and $1,744,145,000 at June 30, 2025 and December 31, 2024, respectively, were pledged to secure Federal Home Loan Bank borrowing capacity and Federal Reserve Bank discount window borrowing capacity.
Allowance for Credit Losses
The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications. The activity in the allowance for credit losses (“ACL”) related to loans held for investment is as follows:
(Dollars in thousands) Beginning
Balance		 Credit Loss
Expense		 Charge-offs Recoveries Initial ACL on Loans Purchased with Credit Deterioration Ending
Balance
Three Months Ended June 30, 2025
Commercial real estate $ 4,657  $ (518) $ (5) $ 64  $ —  $ 4,198 
Construction, land development, land 2,639  199  (250) 1  —  2,589 
1-4 family residential 1,446  158  (45) 1  —  1,560 
Farmland 326  (24) —  —  —  302 
Commercial 16,191  1,693  (11,132) 281  10,780  17,813 
Factored receivables 9,851  (2,638) (665) 4,005  —  10,553 
Consumer 155  368  (91) 34  —  466 
Mortgage warehouse 964  246  —  —  —  1,210 
$ 36,229  $ (516) $ (12,188) $ 4,386  $ 10,780  $ 38,691 
(Dollars in thousands) Beginning
Balance		 Credit Loss
Expense		 Charge-offs Recoveries Initial ACL on Loans Purchased with Credit Deterioration Ending
Balance
Three Months Ended June 30, 2024
Commercial real estate $ 5,666  $ (228) $ —  $ —  $ —  $ 5,438 
Construction, land development, land 2,666  (71) —  1  —  2,596 
1-4 family residential 979  6  (14) 1  —  972 
Farmland 407  (12) —  —  —  395 
Commercial 16,560  2,018  (1,237) 31  —  17,372 
Factored receivables 11,192  2,166  (1,774) 344  —  11,928 
Consumer 135  96  (77) 2  —  156 
Mortgage warehouse 641  93  —  —  —  734 
$ 38,246  $ 4,068  $ (3,102) $ 379  $ —  $ 39,591 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Beginning
Balance		 Credit Loss
Expense		 Charge-offs Recoveries Initial ACL on Loans Purchased with Credit Deterioration Ending
Balance
Six Months Ended June 30, 2025
Commercial real estate $ 3,825  $ 427  $ (121) $ 67  $ —  $ 4,198 
Construction, land development, land 2,873  (35) (250) 1  —  2,589 
1-4 family residential 1,404  199  (46) 3  —  1,560 
Farmland 386  (84) —  —  —  302 
Commercial 21,419  762  (15,503) 355  10,780  17,813 
Factored receivables 9,600  (1,129) (2,073) 4,155  —  10,553 
Consumer 185  470  (270) 81  —  466 
Mortgage warehouse 1,022  188  —  —  —  1,210 
$ 40,714  $ 798  $ (18,263) $ 4,662  $ 10,780  $ 38,691 
(Dollars in thousands) Beginning
Balance		 Credit Loss
Expense		 Charge-offs Recoveries Initial ACL on Loans Purchased with Credit Deterioration Ending
Balance
Six Months Ended June 30, 2024
Commercial real estate $ 6,030  $ (592) $ —  $ —  $ —  $ 5,438 
Construction, land development, land 965  1,630  —  1  —  2,596 
1-4 family residential 927  56  (14) 3  —  972 
Farmland 442  (47) —  —  —  395 
Commercial 14,060  5,069  (1,821) 64  —  17,372 
Factored receivables 11,896  2,722  (3,332) 642  —  11,928 
Consumer 171  133  (194) 46  —  156 
Mortgage warehouse 728  6  —  —  —  734 
$ 35,219  $ 8,977  $ (5,361) $ 756  $ —  $ 39,591 
The increase in required ACL during the three months ended June 30, 2025 is a function of net charge-offs of $7,802,000 and credit loss benefit of $516,000.
The decrease in required ACL during the six months ended June 30, 2025 is a function of net charge-offs of $13,601,000 and credit loss expense of $798,000.
The Company uses the discounted cash flow (DCF) method to estimate ACL for the commercial real estate, construction, land development, land, 1-4 family residential, commercial (excluding liquid credit), and consumer loan pools. For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment as a loss driver. The Company also utilizes and forecasts either one-year percentage change in national retail sales (commercial real estate – non multifamily, commercial general, commercial agriculture, commercial asset-based lending, commercial equipment finance, consumer), one-year percentage change in the national home price index (1-4 family residential and construction, land development, land), or one-year percentage change in national gross domestic product (commercial real estate – multifamily) as a second loss driver depending on the nature of the underlying loan pool and how well that loss driver correlates to expected future losses. Consistent forecasts of the loss drivers are used across the loan segments. The Company also forecasts prepayments speeds for use in the DCF models with higher prepayment speeds resulting in lower required ACL levels and vice versa for shorter prepayment speeds. These assumed prepayment speeds are based upon our historical prepayment speeds by loan type adjusted for the expected impact of the future interest rate environment. The impact of these assumed prepayment speeds is lesser in magnitude than the aforementioned loss driver assumptions.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For all DCF models at June 30, 2025, the Company has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. The Company leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by the Company when developing the forecast metrics. At June 30, 2025 as compared to December 31, 2024, the Company forecasted a modest increase in national unemployment and modest degradation in one-year percentage change in national retail sales, one-year percentage change in national home price index, and one-year percentage change in national gross domestic product. At June 30, 2025 for national unemployment, the Company projected a low percentage in the first quarter followed by a gradual rise in the following three quarters. For percentage change in national retail sales, the Company projected a small increase in the first projected quarter followed by a decline to negative levels over the last three projected quarters to a level below recent actual periods. For percentage change in national home price index, the Company projected an increase in the first projected quarter followed by a steep drop to negative levels for the remaining three quarters with such negative levels peaking in the fourth projected quarter. For percentage change in national gross domestic product, management projected negative growth for each projected quarter with the exception of slightly positive growth in the first projected quarter. At June 30, 2025, the Company used its historical prepayment speeds with minimal adjustment.
The Company uses a loss-rate method to estimate expected credit losses for the farmland, liquid credit, factored receivable, and mortgage warehouse loan pools. For each of these loan segments, the Company applies an expected loss ratio based on internal and peer historical losses adjusted as appropriate for qualitative factors. Qualitative loss factors are based on the Company's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions. Loss factors used to calculate the required ACL on pools that use the loss-rate method reflect the forecasted economic conditions described above.
For the three months ended June 30, 2025, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period decreased the required ACL by $207,000. Changes in loan volume and mix increased the required ACL by $1,185,000. Changes in required specific reserves increased the ACL by $1,484,000. Net charge-offs during the period were $7,802,000.
For the three months ended June 30, 2024, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period increased the required ACL by $1,104,000. Changes in loan volume and mix increased the required ACL by $245,000. Changes in required specific reserves did not have a significant impact on the required ACL. Net charge-offs during the period were $2,723,000.
For the six months ended June 30, 2025, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period increased the required ACL by $286,000. Changes in loan volume and mix increased the required ACL by $1,787,000. Decreases in required specific reserves decreased the required ACL by $4,095,000. Net charge-offs during the period were $13,601,000.
For the six months ended June 30, 2024, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period increased the required ACL by $2,008,000. Changes in loan volume and mix increased the required ACL by $1,010,000. Increases in required specific reserves increased the required ACL by $1,354,000. Net charge-offs during the period were $4,605,000.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:
(Dollars in thousands) Real Estate Accounts
Receivable		 Equipment Other Total ACL
Allocation
June 30, 2025
Commercial real estate $ 24,370  $ —  $ —  $ —  $ 24,370  $ — 
Construction, land development, land —  —  —  —  —  — 
1-4 family residential 838  —  —  —  838  — 
Farmland 1,247  —  64  53  1,364  — 
Commercial 46  —  30,335  14,026  44,407  5,173 
Factored receivables —  9,010  —  —  9,010  3,495 
Consumer —  —  —  23  23  — 
Mortgage warehouse —  —  —  —  —  — 
Total $ 26,501  $ 9,010  $ 30,399  $ 14,102  $ 80,012  $ 8,668 
Commercial loans secured by Other collateral primarily consist of large liquid credit loans secured by the underlying enterprise values of the borrowers.
(Dollars in thousands) Real Estate Accounts
Receivable		 Equipment Other Total ACL
Allocation
December 31, 2024
Commercial real estate $ 30,042  $ —  $ —  $ 4,211  $ 34,253  $ 28 
Construction, land development, land 2,410  —  —  —  2,410  — 
1-4 family residential 810  —  —  —  810  47 
Farmland 1,870  —  73  53  1,996  — 
Commercial 2,196  —  52,364  18,819  73,379  9,294 
Factored receivables —  32,773  —  —  32,773  3,993 
Consumer —  —  —  116  116  — 
Mortgage warehouse —  —  —  —  —  — 
Total $ 37,328  $ 32,773  $ 52,437  $ 23,199  $ 145,737  $ 13,362 
Past Due and Nonaccrual Loans
The following tables present an aging of contractually past due loans:
(Dollars in thousands) Past Due
30-59 Days		 Past Due
60-90 Days		 Past Due 90
Days or More		 Total
Past Due		 Current Total Past Due 90
Days or More
and Accruing
June 30, 2025
Commercial real estate $ —  $ 992  $ 5,885  $ 6,877  $ 747,632  $ 754,509  $ — 
Construction, land development, land —  —  —  —  221,419  221,419  — 
1-4 family residential 772  96  613  1,481  170,831  172,312  247 
Farmland 586  —  287  873  43,196  44,069  — 
Commercial 7,513  12,175  27,496  47,184  1,085,085  1,132,269  — 
Factored receivables 22,912  5,330  22,830  51,072  1,350,305  1,401,377  22,830 
Consumer 30  60  —  90  17,430  17,520  — 
Mortgage warehouse —  —  —  —  1,209,695  1,209,695  — 
Total $ 31,813  $ 18,653  $ 57,111  $ 107,577  $ 4,845,593  $ 4,953,170  $ 23,077 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Past Due
30-59 Days		 Past Due
60-90 Days		 Past Due 90
Days or More		 Total
Past Due		 Current Total Past Due 90
Days or More
and Accruing
December 31, 2024
Commercial real estate $ 840  $ 3,404  $ 10,363  $ 14,607  $ 763,082  $ 777,689  $ — 
Construction, land development, land —  2,410  —  2,410  201,394  203,804  — 
1-4 family residential 1,188  631  229  2,048  151,972  154,020  — 
Farmland 601  140  150  891  55,475  56,366  — 
Commercial 7,525  16,150  51,437  75,112  1,044,133  1,119,245  — 
Factored receivables 24,828  4,193  24,718  53,739  1,150,771  1,204,510  24,718 
Consumer 33  11  —  44  7,956  8,000  — 
Mortgage warehouse —  —  —  —  1,023,326  1,023,326  — 
Total $ 35,015  $ 26,939  $ 86,897  $ 148,851  $ 4,398,109  $ 4,546,960  $ 24,718 
At June 30, 2025 and December 31, 2024, the Misdirected Payments Receivable, net of customer reserves, totaled $19,361,000, all of which was considered past due 90 days or more. Given the nature of factored receivables, these assets are disclosed as past due 90 days or more still accruing; however, the Company is not recognizing income on the assets. Historically, any income recognized on factored receivables that are past due 90 days or more has not been material.
The following table presents the amortized cost basis of loans on nonaccrual status and the amortized cost basis of loans on nonaccrual status for which there was no related allowance for credit losses:
June 30, 2025 December 31, 2024
(Dollars in thousands) Total Nonaccrual Nonaccrual
With No ACL		 Total Nonaccrual Nonaccrual
With No ACL
Commercial real estate $ 8,279  $ 8,279  $ 11,254  $ 10,481 
Construction, land development, land —  —  2,410  2,410 
1-4 family residential 808  808  810  763 
Farmland 452  452  1,996  1,996 
Commercial 45,054  25,392  73,437  45,405 
Factored receivables —  —  —  — 
Consumer 23  23  116  116 
Mortgage warehouse —  —  —  — 
$ 54,616  $ 34,954  $ 90,023  $ 61,171 
The following table presents accrued interest on nonaccrual loans reversed through interest income:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Commercial real estate $ 62  $ —  $ 76  $ — 
Construction, land development, land —  —  —  2 
1-4 family residential 2  —  2  1 
Farmland —  13  —  13 
Commercial —  5  3  188 
Factored receivables —  —  —  — 
Consumer —  —  —  — 
Mortgage warehouse —  —  —  — 
$ 64  $ 18  $ 81  $ 204 
There was no interest earned on nonaccrual loans during the three and six months ended June 30, 2025 and 2024.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents information regarding nonperforming loans:
(Dollars in thousands) June 30, 2025 December 31, 2024
Nonaccrual loans $ 54,616  $ 90,023 
Nonperforming factored receivables 2,893  23,289 
$ 57,509  $ 113,312 
Credit Quality Information
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including: current collateral and financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk on a regular basis. Large groups of smaller balance homogeneous loans, such as consumer loans, are analyzed primarily based on payment status. The Company uses the following definitions for risk ratings:
Pass – Pass rated loans have low to average risk and are not otherwise classified.
Classified – Classified loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Certain classified loans have the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. As of June 30, 2025 and December 31, 2024, based on the most recent analysis performed, the risk category of loans is as follows:
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Revolving
Loans		 Revolving
Loans
Converted
To Term
Loans		 Total
(Dollars in thousands) Year of Origination
June 30, 2025 2025 2024 2023 2022 2021 Prior
Commercial real estate
Pass $ 93,468  $ 193,643  $ 78,868  $ 39,695  $ 75,492  $ 106,558  $ 56,072  $ 238  $ 644,034 
Classified —  —  84,385  315  1,391  23,674  710  —  110,475 
Total commercial real estate $ 93,468  $ 193,643  $ 163,253  $ 40,010  $ 76,883  $ 130,232  $ 56,782  $ 238  $ 754,509 
YTD gross charge-offs $ —  $ —  $ 116  $ —  $ —  $ 5  $ —  $ —  $ 121 
Construction, land development, land
Pass $ 6,286  $ 126,546  $ 86,564  $ 808  $ 822  $ 393  $ —  $ —  $ 221,419 
Classified —  —  —  —  —  —  —  —  — 
Total construction, land development, land $ 6,286  $ 126,546  $ 86,564  $ 808  $ 822  $ 393  $ —  $ —  $ 221,419 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ 250  $ —  $ —  $ 250 
1-4 family residential
Pass $ 28,939  $ 43,858  $ 17,404  $ 12,170  $ 14,645  $ 20,948  $ 29,245  $ 1,266  $ 168,475 
Classified —  —  1,396  —  1,123  1,123  195  —  3,837 
Total 1-4 family residential $ 28,939  $ 43,858  $ 18,800  $ 12,170  $ 15,768  $ 22,071  $ 29,440  $ 1,266  $ 172,312 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ 46  $ —  $ —  $ 46 
Farmland
Pass $ 3,358  $ 11,609  $ 4,165  $ 4,744  $ 4,214  $ 13,505  $ 1,402  $ 379  $ 43,376 
Classified —  —  —  —  —  693  —  —  693 
Total farmland $ 3,358  $ 11,609  $ 4,165  $ 4,744  $ 4,214  $ 14,198  $ 1,402  $ 379  $ 44,069 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Commercial
Pass $ 173,275  $ 268,247  $ 109,632  $ 52,116  $ 12,991  $ 14,531  $ 453,651  $ 300  $ 1,084,743 
Classified 3,346  7,319  20,095  12,591  1,317  2,102  756  —  47,526 
Total commercial $ 176,621  $ 275,566  $ 129,727  $ 64,707  $ 14,308  $ 16,633  $ 454,407  $ 300  $ 1,132,269 
YTD gross charge-offs $ —  $ 834  $ 3,699  $ 61  $ 129  $ 10,780  $ —  $ —  $ 15,503 
Factored receivables
Pass $ 1,372,207  $ —  $ —  $ —  $ —  $ 19,936  $ —  $ —  $ 1,392,143 
Classified 9,234  —  —  —  —  —  —  —  9,234 
Total factored receivables $ 1,381,441  $ —  $ —  $ —  $ —  $ 19,936  $ —  $ —  $ 1,401,377 
YTD gross charge-offs $ 665  $ 1,408  $ —  $ —  $ —  $ —  $ —  $ —  $ 2,073 
Consumer
Pass $ 10,390  $ 1,768  $ 1,156  $ 369  $ 231  $ 606  $ 2,977  $ —  $ 17,497 
Classified —  —  —  —  —  23  —  —  23 
Total consumer $ 10,390  $ 1,768  $ 1,156  $ 369  $ 231  $ 629  $ 2,977  $ —  $ 17,520 
YTD gross charge-offs $ 218  $ 40  $ 7  $ 5  $ —  $ —  $ —  $ —  $ 270 
Mortgage warehouse
Pass $ 1,209,695  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ 1,209,695 
Classified —  —  —  —  —  —  —  —  — 
Total mortgage warehouse $ 1,209,695  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ 1,209,695 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Total loans
Pass $ 2,897,618  $ 645,671  $ 297,789  $ 109,902  $ 108,395  $ 176,477  $ 543,347  $ 2,183  $ 4,781,382 
Classified 12,580  7,319  105,876  12,906  3,831  27,615  1,661  —  171,788 
Total loans $ 2,910,198  $ 652,990  $ 403,665  $ 122,808  $ 112,226  $ 204,092  $ 545,008  $ 2,183  $ 4,953,170 
YTD gross charge-offs $ 883  $ 2,282  $ 3,822  $ 66  $ 129  $ 11,081  $ —  $ —  $ 18,263 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Revolving
Loans		 Revolving
Loans
Converted
To Term
Loans		 Total
(Dollars in thousands) Year of Origination
December 31, 2024 2024 2023 2022 2021 2020 Prior
Commercial real estate
Pass $ 212,265  $ 77,836  $ 48,149  $ 79,860  $ 90,460  $ 28,579  $ 87,634  $ 125  $ 624,908 
Classified 6,283  116,794  —  9,591  659  19,454  —  —  152,781 
Total commercial real estate $ 218,548  $ 194,630  $ 48,149  $ 89,451  $ 91,119  $ 48,033  $ 87,634  $ 125  $ 777,689 
YTD gross charge-offs $ —  $ —  $ 352  $ 425  $ 54  $ —  $ —  $ —  $ 831 
Construction, land development, land
Pass $ 126,504  $ 67,977  $ 850  $ 950  $ 257  $ 178  $ 4,678  $ —  $ 201,394 
Classified —  —  —  —  —  2,410  —  —  2,410 
Total construction, land development, land $ 126,504  $ 67,977  $ 850  $ 950  $ 257  $ 2,588  $ 4,678  $ —  $ 203,804 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
1-4 family residential
Pass $ 45,087  $ 19,836  $ 13,458  $ 17,192  $ 6,326  $ 18,287  $ 32,144  $ 302  $ 152,632 
Classified 113  626  100  204  —  254  91  —  1,388 
Total 1-4 family residential $ 45,200  $ 20,462  $ 13,558  $ 17,396  $ 6,326  $ 18,541  $ 32,235  $ 302  $ 154,020 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ 72  $ —  $ —  $ 72 
Farmland
Pass $ 14,914  $ 6,077  $ 8,726  $ 4,334  $ 6,472  $ 12,866  $ 898  $ 73  $ 54,360 
Classified 68  53  1,503  —  11  371  —  —  2,006 
Total farmland $ 14,982  $ 6,130  $ 10,229  $ 4,334  $ 6,483  $ 13,237  $ 898  $ 73  $ 56,366 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Commercial
Pass $ 325,712  $ 125,419  $ 81,599  $ 28,177  $ 8,249  $ 8,686  $ 442,362  $ 221  $ 1,020,425 
Classified 6,659  56,378  12,365  6,275  6,680  3  10,460  —  98,820 
Total commercial $ 332,371  $ 181,797  $ 93,964  $ 34,452  $ 14,929  $ 8,689  $ 452,822  $ 221  $ 1,119,245 
YTD gross charge-offs $ 934  $ 1,540  $ 2,209  $ 452  $ 579  $ 153  $ 351  $ —  $ 6,218 
Factored receivables
Pass $ 1,170,308  $ —  $ —  $ —  $ 1,429  $ —  $ —  $ —  $ 1,171,737 
Classified 13,412  —  —  —  19,361  —  —  —  32,773 
Total factored receivables $ 1,183,720  $ —  $ —  $ —  $ 20,790  $ —  $ —  $ —  $ 1,204,510 
YTD gross charge-offs $ 5,628  $ 1,558  $ —  $ —  $ —  $ —  $ —  $ —  $ 7,186 
Consumer
Pass $ 4,242  $ 1,710  $ 587  $ 312  $ 203  $ 720  $ 110  $ —  $ 7,884 
Classified 16  —  3  63  —  34  —  —  116 
Total consumer $ 4,258  $ 1,710  $ 590  $ 375  $ 203  $ 754  $ 110  $ —  $ 8,000 
YTD gross charge-offs $ —  $ 457  $ 20  $ 5  $ —  $ 1  $ —  $ —  $ 483 
Mortgage warehouse
Pass $ 1,023,326  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ 1,023,326 
Classified —  —  —  —  —  —  —  —  — 
Total mortgage warehouse $ 1,023,326  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ 1,023,326 
YTD gross charge-offs $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Total loans
Pass $ 2,922,358  $ 298,855  $ 153,369  $ 130,825  $ 113,396  $ 69,316  $ 567,826  $ 721  $ 4,256,666 
Classified 26,551  173,851  13,971  16,133  26,711  22,526  10,551  —  290,294 
Total loans $ 2,948,909  $ 472,706  $ 167,340  $ 146,958  $ 140,107  $ 91,842  $ 578,377  $ 721  $ 4,546,960 
YTD gross charge-offs $ 6,562  $ 3,555  $ 2,581  $ 882  $ 633  $ 226  $ 351  $ —  $ 14,790 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Loan Modifications to Borrowers Experiencing Financial Difficulty
In an effort to mitigate potential losses on loans, the Company will endeavor to work with borrowers experiencing financial difficulty to modify the terms of such loans to improve the likelihood of principal repayment. Such modifications generally fall into four broad categories; principal forgiveness, interest rate reduction, other-than-insignificant payment delay, or a term extension. Modifications can reflect one or multiple modification categories. For all loan types, including commercial real estate loans, the Company considers the likelihood of repayment by the borrower experiencing financial difficulty under the potential agreed upon modified terms. If such repayment is not deemed likely, the Company will not grant the troubled borrower a modification and will commence ultimate collection proceedings. On an ongoing basis, the Company monitors the performance of modified loans related to their restructured terms.
The following tables present the amortized cost basis of loan modifications to borrowers experiencing financial difficulty made during the reporting period:
Term Extension
Financial Effect
(Dollars in thousands) Amortized Cost % of Portfolio Term Extended By
Three Months Ended June 30, 2025
Commercial real estate $ 134,268  17.8  % 0.3 years
Commercial 2,087  0.2  % 1.3 years
$ 136,355  2.8  %
Three Months Ended June 30, 2024
Commercial real estate $ 194  —  % 0.5 years
Consumer 18  0.2  % 6.1 years
$ 212  —  %
Six Months Ended June 30, 2025
Commercial real estate $ 134,268  17.8  % 0.5 years
1-4 family residential 15  —  % 5.0 years
Commercial 2,087  0.2  % 1.3 years
$ 136,370  2.8  %
Six Months Ended June 30, 2024
Commercial real estate $ 194  —  % 0.5 years
Consumer 18  0.2  % 6.1 years
$ 212  —  %
Term Extension and Payment Delay
Financial Effect
(Dollars in thousands) Amortized Cost % of Portfolio Term Extended By Payments Delayed By
Three Months Ended June 30, 2025
Commercial $ 302  —  % 0.5 years 0.5 years
$ 302  —  %
Six Months Ended June 30, 2025
Commercial $ 302  —  % 0.8 years 0.8 years
$ 302  —  %
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Term Extension and Rate Reduction
Year Ended Year Ended Financial Effect
Interest Rate Reduced
(Dollars in thousands) Amortized Cost % of Portfolio Term Extended By From To
Three Months Ended June 30, 2024
Commercial real estate $ 143  —  % 1.0 year 12.5% 10.0%
$ 143  —  %
Six Months Ended June 30, 2024
Commercial real estate $ 143  —  % 1.0 year 12.5% 10.0%
$ 143  —  %

Term Extension and Principal Forgiveness
Financial Effect
(Dollars in thousands) Amortized Cost % of Portfolio Term Extended By Principal Forgiven
Three Months Ended June 30, 2024
Commercial $ 4,128  0.4  % 1.8 years $ 507 
$ 4,128  0.1  %
Six Months Ended June 30, 2024
Commercial $ 4,128  0.4  % 1.8 years $ 507 
$ 4,128  0.1  %
Payment Delay
Financial Effect
(Dollars in thousands) Amortized Cost % of Portfolio Payments Delayed By
Six Months Ended June 30, 2025
Commercial $ 528  —  % 0.5 years
$ 528  —  %
Generally, if a loan to a borrower experiencing financial difficulty is modified, the Company will seek to obtain credit enhancements when possible.
The following table presents the payment status of loans that have been modified in the last twelve months:
June 30, 2025
(Dollars in thousands) Current Past Due
30-89 Days		 Past Due
90 Days or More		 Total
Commercial real estate $ 136,556  $ —  $ —  $ 136,556 
Construction, land development, land —  —  —  — 
1-4 family residential 15  —  —  15 
Farmland —  —  —  — 
Commercial 9,254  171  —  9,425 
Factored receivables —  —  —  — 
Consumer —  —  —  — 
Mortgage warehouse —  —  —  — 
$ 145,825  $ 171  $ —  $ 145,996 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
At June 30, 2025, the Company had $221,000 of commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.
There were no loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2025 and 2024 and were modified in the twelve months prior to that default. Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance for credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the allowance for credit losses is adjusted accordingly.
Residential Real Estate Loans In Process of Foreclosure
At June 30, 2025 and December 31, 2024, the Company had no 1-4 family residential real estate loans for which formal foreclosure proceedings were in process.
Other Real Estate Owned
At June 30, 2025 and December 31, 2024, the Company had $1,995,000 and $0 of other real estate owned, net.
NOTE 5 — GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets consist of the following:
(Dollars in thousands) June 30, 2025 December 31, 2024
Goodwill $ 353,900  $ 241,949 
June 30, 2025 December 31, 2024
(Dollars in thousands) Gross Carrying
Amount		 Accumulated
Amortization		 Net Carrying
Amount		 Gross Carrying
Amount		 Accumulated
Amortization		 Net Carrying
Amount
Core deposit intangibles $ 43,578  $ (41,073) $ 2,505  $ 43,578  $ (40,310) $ 3,268 
Customer relationship intangibles 66,394  (25,027) 41,367  30,014  (23,053) 6,961 
Software intangible assets 26,952  (17,420) 9,532  18,612  (15,168) 3,444 
Other intangible assets 5,433  (3,572) 1,861  5,627  (3,041) 2,586 
$ 142,357  $ (87,092) $ 55,265  $ 97,831  $ (81,572) $ 16,259 
The changes in goodwill and intangible assets during the three and six months ended June 30, 2025 and 2024 are as follows:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Beginning balance $ 255,912  $ 257,551  $ 258,208  $ 257,355 
Acquired goodwill 111,951  —  111,951  — 
Acquired intangible assets 44,721  —  44,844  2,920 
Amortization of intangibles (3,400) (2,869) (5,800) (5,593)
Amortization of intangibles included in lease income (19) (30) (38) (30)
Ending balance $ 409,165  $ 254,652  $ 409,165  $ 254,652 
NOTE 6 — VARIABLE INTEREST ENTITIES
Collateralized Loan Obligation Funds – Closed
The Company holds investments in the subordinated notes of the following closed Collateralized Loan Obligation (“CLO”) funds:
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Offering
Date		 Offering
Amount
Trinitas CLO IV, LTD (Trinitas IV) June 2, 2016 $ 406,650 
Trinitas CLO VI, LTD (Trinitas VI) June 20, 2017 $ 717,100 
The net carrying amounts of the Company’s investments in the subordinated notes of the CLO funds, which represent the Company’s maximum exposure to loss as a result of its involvement with the CLO funds, totaled $1,782,000 and $1,876,000 at June 30, 2025 and December 31, 2024, respectively, and are classified as held to maturity securities within the Company’s consolidated balance sheets.
The Company performed a consolidation analysis to confirm whether the Company was required to consolidate the assets, liabilities, equity or operations of the closed CLO funds in its financial statements. The Company concluded that the closed CLO funds were variable interest entities and that the Company holds variable interests in the entities in the form of its investments in the subordinated notes of entities. However, the Company also concluded that the Company does not have the power to direct the activities that most significantly impact the entities’ economic performance. As a result, the Company was not the primary beneficiary and therefore was not required to consolidate the assets, liabilities, equity, or operations of the closed CLO funds in the Company’s financial statements.
NOTE 7 — LEGAL CONTINGENCIES
Various legal claims have arisen from time to time in the normal course of business which, in the opinion of management as of June 30, 2025, will have no material effect on the Company’s consolidated financial statements.
NOTE 8 — OFF-BALANCE SHEET LOAN COMMITMENTS
From time to time, the Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments.
The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet financial instruments.
The contractual amounts of financial instruments with off-balance sheet risk were as follows:
June 30, 2025 December 31, 2024
(Dollars in thousands) Fixed Rate Variable Rate Total Fixed Rate Variable Rate Total
Unused lines of credit $ 105,898  $ 499,987  $ 605,885  $ 103,784  $ 486,414  $ 590,198 
Standby letters of credit $ 7,067  $ 4,577  $ 11,644  $ 16,630  $ 7,320  $ 23,950 
Commitments to purchase loans $ —  $ 290  $ 290  $ —  $ 9,500  $ 9,500 
Mortgage warehouse commitments $ —  $ 599,691  $ 599,691  $ —  $ 810,913  $ 810,913 
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by the Company, upon extension of credit, is based on management’s credit evaluation of the customer.
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, the Company has rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The credit risk to the Company in issuing letters of credit is essentially the same as that involved in extending loan facilities to its customers.
Commitments to purchase loans represent loans purchased by the Company that have not yet settled.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Mortgage warehouse commitments are unconditionally cancellable and represent the unused capacity on mortgage warehouse facilities the Company has approved. The Company reserves the right to refuse to buy any mortgage loans offered for sale by a customer, for any reason, at the Company’s sole and absolute discretion.
The Company records an allowance for credit losses on off-balance sheet credit exposures through a charge to credit loss expense on the Company’s consolidated statements of income. At June 30, 2025 and December 31, 2024, the allowance for credit losses on off-balance sheet credit exposures totaled $2,481,000 and $2,701,000, respectively, and was included in other liabilities on the Company’s consolidated balance sheets. The following table presents credit loss expense for off balance sheet credit exposures:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Credit loss expense (benefit) $ (89) $ 60  $ (218) $ 1,102 
NOTE 9 — FAIR VALUE DISCLOSURES
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The methods of determining the fair value of assets and liabilities presented in this note are consistent with the methodologies disclosed in Note 16 of the Company’s 2024 Form 10-K.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Assets and liabilities measured at fair value on a recurring basis are summarized in the table below.
(Dollars in thousands) Fair Value Measurements Using Total
Fair Value
June 30, 2025 Level 1 Level 2 Level 3
Assets measured at fair value on a recurring basis
Securities available for sale
Mortgage-backed securities, residential $ —  $ 99,909  $ —  $ 99,909 
Asset-backed securities —  868  —  868 
State and municipal —  2,793  —  2,793 
CLO securities —  287,287  —  287,287 
Corporate bonds —  257  —  257 
SBA pooled securities —  1,161  —  1,161 
$ —  $ 392,275  $ —  $ 392,275 
Equity securities with readily determinable fair values
Mutual fund $ 4,526  $ —  $ —  $ 4,526 
Loans held for sale $ —  $ 6,066  $ —  $ 6,066 
Indemnification asset $ —  $ —  $ 270  $ 270 
Revenue share asset $ —  $ —  $ 2,344  $ 2,344 
(Dollars in thousands) Fair Value Measurements Using Total
Fair Value
December 31, 2024 Level 1 Level 2 Level 3
Assets measured at fair value on a recurring basis
Securities available for sale
Mortgage-backed securities, residential $ —  $ 84,185  $ —  $ 84,185 
Asset-backed securities —  905  —  905 
State and municipal —  3,063  —  3,063 
CLO Securities —  291,913  —  291,913 
Corporate bonds —  262  —  262 
SBA pooled securities —  1,233  —  1,233 
$ —  $ 381,561  $ —  $ 381,561 
Equity securities with readily determinable fair values
Mutual fund $ 4,445  $ —  $ —  $ 4,445 
Loans held for sale $ —  $ 1,172  $ —  $ 1,172 
Indemnification asset $ —  $ —  $ 679  $ 679 
Revenue share asset $ —  $ —  $ 2,616  $ 2,616 
There were no transfers between levels during 2025 or 2024.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Indemnification Asset
The fair value of the indemnification asset is calculated as the present value of the estimated cash payments expected to be received from Covenant for probable losses on the covered Over-Formula Advance Portfolio acquired during 2020. The cash flows are discounted at a rate to reflect the uncertainty of the timing and receipt of the payments from Covenant. The indemnification asset is reviewed quarterly and changes to the asset are recorded as adjustments to other noninterest income or expense, as appropriate, within the Consolidated Statements of Income. The indemnification asset fair value is considered a Level 3 classification. At June 30, 2025 and December 31, 2024, the estimated cash payments expected to be received from Covenant for probable losses on the covered Over-Formula Advance Portfolio were approximately $284,000 and $715,000, respectively, and a discount rate of 5.0% and 5.0%, respectively, was applied to calculate the present value of the indemnification asset. A reconciliation of the opening balance to the closing balance of the fair value of the indemnification asset is as follows:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Beginning balance $ 475  $ 1,292  $ 679  $ 1,497 
Indemnification asset recognized in business combination —  —  —  — 
Change in fair value of indemnification asset recognized in earnings (205) (204) (409) (409)
Indemnification reduction —  —  —  — 
Ending balance $ 270  $ 1,088  $ 270  $ 1,088 
Revenue Share Asset
On June 30, 2022 and September 6, 2022, the Company entered into and closed two separate agreements to sell two separate portfolios of factored receivables. The June 30, 2022 agreement contains revenue share provisions that entitles the Company to an amount equal to fifteen percent of the future gross monthly revenue of the clients associated with the sold factored receivable portfolio. The September 6, 2022 agreement contains revenue share provisions that entitles the Company to an amount ranging from fifteen to twenty percent, depending on the client, of the future gross monthly revenue of the clients associated with the sold factored receivable portfolio. The fair value of the revenue share assets is calculated each reporting period, and changes in the fair value of the revenue share assets are recorded in noninterest income in the consolidated statements of income. The revenue share asset fair value is considered a Level 3 classification.
At June 30, 2025 and December 31, 2024, the estimated cash payments expected to be received from the purchaser for the Company's share of future gross monthly revenue as $2,967,000 and $3,572,000, respectively, and a discount rate of 10.0% was applied to calculate the present value of the revenue share asset. A reconciliation of the opening balance to the closing balance of the fair value of the revenue share asset is as follows:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Beginning balance $ 2,507  $ 2,689  $ 2,616  $ 2,516 
Revenue share asset recognized —  —  —  — 
Change in fair value of revenue share asset recognized in earnings 101  407  274  879 
Revenue share payments received (264) (307) (546) (606)
Ending balance $ 2,344  $ 2,789  $ 2,344  $ 2,789 
Assets measured at fair value on a non-recurring basis are summarized in the table below. There were no liabilities measured at fair value on a non-recurring basis at June 30, 2025 and December 31, 2024.
(Dollars in thousands) Fair Value Measurements Using Total
Fair Value
June 30, 2025 Level 1 Level 2 Level 3
Collateral dependent loans
Commercial $ —  $ —  $ 14,494  $ 14,494 
Factored receivables —  —  5,515  5,515 
$ —  $ —  $ 20,009  $ 20,009 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Fair Value Measurements Using Total
Fair Value
December 31, 2024 Level 1 Level 2 Level 3
Collateral dependent loans
Commercial real estate $ —  $ —  $ 745  $ 745 
1-4 family residential —  —  —  — 
Commercial —  —  18,727  18,727 
Factored receivables —  —  28,780  28,780 
$ —  $ —  $ 48,252  $ 48,252 
Collateral Dependent Loans Specific Allocation of ACL: A loan is considered to be a collateral dependent loan when, based on current information and events, the Company expects repayment of the financial assets to be provided substantially through the operation or sale of the collateral and the Company has determined that the borrower is experiencing financial difficulty as of the measurement date. The ACL is measured by estimating the fair value of the loan based on the present value of expected cash flows, the market price of the loan, or the underlying fair value of the loan’s collateral. For real estate loans, fair value of the loan’s collateral is determined by third party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Company reviews the third party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5% to 8% of the appraised value. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.
The estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis at June 30, 2025 and December 31, 2024 were as follows:
(Dollars in thousands) Carrying
Amount		 Fair Value Measurements Using Total
Fair Value
June 30, 2025 Level 1 Level 2 Level 3
Financial assets:
Cash and cash equivalents $ 282,346  $ 282,346  $ —  $ —  $ 282,346 
Securities - held to maturity 1,782  —  —  2,294  2,294 
Loans not previously presented, gross 4,933,161  37,820  —  4,843,759  4,881,579 
FHLB and other restricted stock 13,339   N/A  N/A  N/A N/A
Accrued interest receivable 44,640  44,640  —  —  44,640 
Financial liabilities:
Deposits 5,186,098  —  5,182,013  —  5,182,013 
Federal Home Loan Bank advances 180,000  —  180,000  —  180,000 
Subordinated notes 69,780  —  65,489  —  65,489 
Junior subordinated debentures 42,666  —  43,812  —  43,812 
Accrued interest payable 10,271  10,271  —  —  10,271 

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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Carrying
Amount		 Fair Value Measurements Using Total
Fair Value
December 31, 2024 Level 1 Level 2 Level 3
Financial assets:
Cash and cash equivalents $ 330,117  $ 330,117  $ —  $ —  $ 330,117 
Securities - held to maturity 1,876  —  —  2,514  2,514 
Loans not previously presented, gross 4,505,408  49,860  —  4,389,000  4,438,860 
FHLB and other restricted stock 14,054  N/A N/A N/A N/A
Accrued interest receivable 41,940  41,940  —  —  41,940 
Financial liabilities:
Deposits 4,820,820  —  4,817,208  —  4,817,208 
Customer repurchase agreements —  —  —  —  — 
Federal Home Loan Bank advances 30,000  —  30,000  —  30,000 
Subordinated notes 69,662  —  56,643  —  56,643 
Junior subordinated debentures 42,352  —  43,835  —  43,835 
Accrued interest payable 9,766  9,766  —  —  9,766 
NOTE 10 — REGULATORY MATTERS
The Company (on a consolidated basis) and TBK Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s or TBK Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and TBK Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Company and TBK Bank to maintain minimum amounts and ratios (set forth in the table below) of total, common equity Tier 1, and Tier 1 capital to risk weighted assets, and of Tier 1 capital to average assets. Management believes, as of June 30, 2025 and December 31, 2024, the Company and TBK Bank meet all capital adequacy requirements to which they are subject.
As of June 30, 2025 and December 31, 2024, TBK Bank’s capital ratios exceeded those levels necessary to be categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” TBK Bank must maintain minimum total risk based, common equity Tier 1 risk based, Tier 1 risk based, and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since June 30, 2025 that management believes have changed TBK Bank’s category.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The actual capital amounts and ratios for the Company and TBK Bank are presented in the following table.
(Dollars in thousands) Actual Minimum for Capital
Adequacy Purposes		 To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
June 30, 2025 Amount Ratio Amount Ratio Amount Ratio
Total capital (to risk weighted assets)
Triumph Financial, Inc. $ 677,415  11.9% $ 453,600  8.0%  N/A N/A
TBK Bank, SSB $ 656,241  11.6% $ 451,933  8.0% $ 564,916  10.0%
Tier 1 capital (to risk weighted assets)
Triumph Financial, Inc. $ 565,631  10.0% $ 340,200  6.0%  N/A N/A
TBK Bank, SSB $ 615,637  10.9% $ 338,950  6.0% $ 451,933  8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Financial, Inc. $ 477,965  8.4% $ 255,150  4.5%  N/A N/A
TBK Bank, SSB $ 615,637  10.9% $ 254,212  4.5% $ 367,196  6.5%
Tier 1 capital (to average assets)
Triumph Financial, Inc. $ 565,631  9.5% $ 239,183  4.0%  N/A N/A
TBK Bank, SSB $ 615,637  10.3% $ 239,050  4.0% $ 298,812  5.0%
December 31, 2024
Total capital (to risk weighted assets)
Triumph Financial, Inc. $ 802,192  15.2% $ 421,400  8.0% N/A N/A
TBK Bank, SSB $ 784,157  15.0% $ 419,480  8.0% $ 524,350  10.0%
Tier 1 capital (to risk weighted assets)
Triumph Financial, Inc. $ 688,025  13.1% $ 316,050  6.0% N/A N/A
TBK Bank, SSB $ 742,989  14.2% $ 314,610  6.0% $ 419,480  8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Financial, Inc. $ 600,673  11.4% $ 237,037  4.5% N/A N/A
TBK Bank, SSB $ 742,989  14.2% $ 235,957  4.5% $ 340,827  6.5%
Tier 1 capital (to average assets)
Triumph Financial, Inc. $ 688,025  12.0% $ 228,843  4.0% N/A N/A
TBK Bank, SSB $ 742,989  13.0% $ 228,726  4.0% $ 285,907  5.0%
As permitted by the interim final rule issued on March 27, 2020 by the federal banking regulatory agencies, the Company elected the option to delay the estimated impact on regulatory capital of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which was effective January 1, 2020. The initial impact of adoption of ASU 2016-13 as well as 25% of the quarterly increases in the allowance for credit losses subsequent to adoption of ASU 2016-13 (collectively the “transition adjustments”) was delayed for two years. After two years, the cumulative amount of the transition adjustments became fixed and was phased out of the regulatory capital calculations evenly over a three-year period, with 75% recognized in year three, 50% recognized in year four, and 25% recognized in year five. After December 31, 2024, the temporary regulatory capital benefits were fully reversed.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Dividends paid by TBK Bank are limited to, without prior regulatory approval, current year earnings and earnings less dividends paid during the preceding two years.
The capital conservation buffer set forth by the Basel III regulatory capital framework was 2.5% at June 30, 2025 and December 31, 2024. The capital conservation buffer is designed to absorb losses during periods of economic stress and requires increased capital levels for the purpose of capital distributions and other payments. Failure to meet the full amount of the buffer will result in restrictions on the Company’s ability to make capital distributions, including dividend payments and stock repurchases, and to pay discretionary bonuses to executive officers. At June 30, 2025 and December 31, 2024, the Company’s and TBK Bank’s risk based capital exceeded the required capital conservation buffer.
NOTE 11 — STOCKHOLDERS' EQUITY
The following summarizes the capital structure of Triumph Financial, Inc.
Preferred Stock Series C
(Dollars in thousands, except per share amounts) June 30, 2025 December 31, 2024
Shares authorized 51,750  51,750 
Shares issued 45,000  45,000 
Shares outstanding 45,000  45,000 
Par value per share $ 0.01  $ 0.01 
Liquidation preference per share $ 1,000  $ 1,000 
Liquidation preference amount $ 45,000  $ 45,000 
Dividend rate 7.125  % 7.125  %
Dividend payment dates  Quarterly Quarterly
Common Stock
(Dollars in thousands, except per share amounts) June 30, 2025 December 31, 2024
Shares authorized 50,000,000  50,000,000 
Shares issued 29,497,487  29,121,213 
Treasury shares (5,770,441) (5,729,802)
Shares outstanding 23,727,046  23,391,411 
Par value per share $ 0.01  $ 0.01 
NOTE 12 — STOCK BASED COMPENSATION
Stock based compensation expense that has been charged against income was $3,430,000 and $3,439,000 for the three months ended June 30, 2025 and 2024, respectively, and $6,261,000 and $7,066,000 for the six months ended June 30, 2025 and 2024, respectively.
2014 Omnibus Incentive Plan
The Company’s 2014 Omnibus Incentive Plan (“Omnibus Incentive Plan”) provides for the grant of nonqualified and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other awards that may be settled in, or based upon the value of, the Company’s common stock. The maximum number of shares of common stock available for issuance under the Omnibus Incentive Plan is 3,650,000 shares.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Restricted Stock Awards
A summary of changes in the Company’s nonvested Restricted Stock Awards (“RSAs”) under the Omnibus Incentive Plan for the six months ended June 30, 2025 were as follows:
Nonvested RSAs Shares Weighted-Average
Grant-Date
Fair Value
Nonvested at January 1, 2025 48,868  90.18 
Granted —  — 
Vested (48,293) 90.21 
Forfeited (575) 87.77 
Nonvested at June 30, 2025 —  — 
RSAs granted to employees under the Omnibus Incentive Plan typically vest immediately or over four years. Compensation expense for the RSAs will be recognized over the vesting period of the awards based on the fair value of the stock at the issue date. As of June 30, 2025, there was no unrecognized compensation cost related to nonvested RSAs.
Restricted Stock Units
A summary of changes in the Company’s nonvested Restricted Stock Units (“RSUs”) under the Omnibus Incentive Plan for the six months ended June 30, 2025 were as follows:
Nonvested RSUs Shares Weighted-Average
Grant-Date
Fair Value
Nonvested at January 1, 2025 224,568  66.07 
Granted 108,545  55.42 
Vested (88,110) 70.18 
Forfeited (27,573) 60.99 
Nonvested at June 30, 2025 217,430  59.73 
RSUs granted to employees under the Omnibus Incentive Plan typically vest over two to four years. Compensation expense for the RSUs will be recognized over the vesting period of the awards based on the fair value of the stock at the issue date. As of June 30, 2025, there was $8,187,000 of unrecognized compensation cost related to the nonvested RSUs. The cost is expected to be recognized over a remaining period of 2.97 years.
Market Based Performance Stock Units
A summary of changes in the Company’s nonvested Market Based Performance Stock Units (“Market Based PSUs”) under the Omnibus Incentive Plan for the six months ended June 30, 2025 were as follows:
Nonvested Market Based PSUs Shares Weighted-Average
Grant-Date
Fair Value
Nonvested at January 1, 2025 167,780  $ 93.10 
Granted 115,508  93.21 
Performance adjustment (19,595) — 
Vested (9,793) 89.79 
Forfeited (4,443) 105.59 
Nonvested at June 30, 2025 249,457  $ 93.97 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Market Based PSUs granted to employees under the Omnibus Incentive Plan vest after three years. The number of shares issued upon vesting will range from 0% to 175% of the Market Based PSUs granted based on the Company’s relative total shareholder return (“TSR”) as compared to the TSR of specified groups of peer banks and financial technology companies, and with respect to the Company's awards granted during and after 2023, may include an additional multiplier of up to 200% of the otherwise earned award based on the Company's absolute TSR. Compensation expense for the Market Based PSUs will be recognized over the vesting period of the awards based on the fair value of the award at the grant date. The fair value of Market Based PSUs granted is estimated using a Monte Carlo simulation. Expected volatilities were determined based on the historical volatilities of the Company and the specified peer group. The risk-free interest rate for the performance period was derived from the Treasury constant maturities yield curve on the valuation dates.
The fair value of the Market Based PSUs granted was determined using the following weighted-average assumptions:
Six Months Ended June 30,
2025 2024
Grant date May 1, 2025 May 1, 2024
Performance period 3.00 years 3.00 years
Stock price $ 54.38  $ 72.00 
Triumph Financial stock price volatility 42.22  % 42.31  %
Risk-free rate 3.62  % 4.67  %
As of June 30, 2025, there was $16,012,000 of unrecognized compensation cost related to the nonvested Market Based PSUs. The cost is expected to be recognized over a remaining period of 2.38 years.
Stock Options
A summary of the changes in the Company’s stock options under the Omnibus Incentive Plan for the six months ended June 30, 2025 were as follows:
Stock Options Shares Weighted-Average
Exercise Price		 Weighted-Average
Remaining
Contractual Term
(In Years)		 Aggregate
Intrinsic Value
(In Thousands)
Outstanding at January 1, 2025 257,603  $ 49.68 
Granted 91,552  54.38 
Exercised (495) 51.25 
Forfeited or expired (4,836) 65.62 
Outstanding at June 30, 2025 343,824  $ 50.71  6.61 $ 3,246 
Fully vested shares and shares expected to vest at June 30, 2025 343,824  $ 50.71  6.61 $ 3,246 
Shares exercisable at June 30, 2025 184,936  $ 44.26  4.43 $ 3,076 
Information related to the stock options for the six months ended June 30, 2025 and 2024 was as follows:
Six Months Ended June 30,
(Dollars in thousands, except per share amounts) 2025 2024
Aggregate intrinsic value of options exercised $ 14  $ 289 
Cash received from option exercises, net 25  144 
Tax benefit realized from option exercises 3  61 
Weighted average fair value per share of options granted $ 28.35  $ 37.30 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Stock options awarded to employees under the Omnibus Incentive Plan are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant, vest over four years, and have ten year contractual terms. The fair value of stock options granted is estimated at the date of grant using the Black-Scholes option-pricing model. Expected volatilities are determined based on the Company’s historical volatility. The expected term of the options granted is determined based on the SEC simplified method, which calculates the expected term as the mid-point between the weighted average time to vesting and the contractual term. The risk-free interest rate for the expected term of the options is derived from the Treasury constant maturity yield curve on the valuation date.
The fair value of the stock options granted was determined using the following weighted-average assumptions:
Six Months Ended June 30,
2025 2024
Risk-free interest rate 3.88  % 4.52  %
Expected term 6.25 years 6.25 years
Expected stock price volatility 48.48  % 46.50  %
Dividend yield —  — 
As of June 30, 2025, there was $3,240,000 of unrecognized compensation cost related to nonvested stock options granted under the Omnibus Incentive Plan. The cost is expected to be recognized over a remaining period of 3.20 years.
Employee Stock Purchase Plan
During the year ended December 31, 2019, the Company’s Board of Directors adopted, and the Company’s stockholders approved, the Company's 2019 Employee Stock Purchase Plan (“ESPP”). Under the ESPP, 2,500,000 shares of common stock were reserved for issuance. The ESPP enables eligible employees to purchase the Company’s common stock at a price per share equal to 85% of the lower of the fair market value of the common stock at the beginning or end of each six month offering period. During the six months ended June 30, 2025 and 2024, 20,892 shares and 18,328 shares, respectively, were issued under the plan.
NOTE 13 — EARNINGS PER SHARE
The factors used in the earnings per share computation follow:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Basic
Net income (loss) to common stockholders $ 3,618  $ 1,945  $ 2,834  $ 5,302 
Weighted average common shares outstanding 23,590,119  23,274,089  23,476,888  23,237,674 
Basic earnings (loss) per common share $ 0.15  $ 0.08  $ 0.12  $ 0.23 
Diluted
Net income (loss) to common stockholders $ 3,618  $ 1,945  $ 2,834  $ 5,302 
Weighted average common shares outstanding 23,590,119  23,274,089  23,476,888  23,237,674 
Dilutive effects of:
Assumed exercises of stock options 54,952  86,645  67,878  86,905 
Restricted stock awards 16,097  60,614  30,785  81,499 
Restricted stock units 89,156  118,919  124,984  128,243 
Performance stock units - market based 17,704  121,907  23,171  120,176 
Employee stock purchase program 4,627  2,931  4,299  2,426 
Average shares and dilutive potential common shares 23,772,655  23,665,105  23,728,005  23,656,923 
Diluted earnings (loss) per common share $ 0.15  $ 0.08  $ 0.12  $ 0.22 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Stock options 199,859  77,520  122,151  61,644 
Restricted stock units 5,171  7,500  3,750  7,500 
Performance stock units - market based 56,311  55,677  28,313  27,836 
NOTE 14 — REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“Topic 606”). Under Topic 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices can be fixed or variable; charged either on a periodic basis or based on activity. Except as disclosed below, the Company presents disaggregated revenue from contracts with customers in the consolidated statements of income.
Banking and Factoring Segments
The Banking segment derives its revenue principally from investments in interest-earning assets as well as noninterest income typical for the banking industry, and the Factoring segment derives the large majority of its revenue from interest income on purchased factored receivables. The majority of such revenue streams fall under Accounting Standards Codification Topic 310, “Receivables” (“Topic 310”) which is outside the scope of Topic 606. There are, however, certain Banking and Factoring activities that generate revenue under Topic 606. Descriptions of the Company's significant Banking and Factoring revenue-generating activities within the scope of Topic 606, which are included in non-interest income in the Company's consolidated statements of income, are as follows:
•Service charges on deposits. Service charges on deposits primarily consists of fees from the Company's deposit customers for account maintenance, account analysis, and overdraft services. Account maintenance fees and analysis fees are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs.
•Card income. Card income primarily consists of interchange fees. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized when the transaction processing services are provided to the cardholder.
•Net OREO gains (losses) and valuation adjustments. The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.
•Fee income. Fee income for the Banking and Factoring segments primarily consists of transaction-based fees, including wire transfer fees, ACH and check fees, early termination fees, and other fees, earned from the Company's banking and factoring customers. Transaction based fees are recognized at the time the transaction is executed as that is the point in time the Company satisfies its performance obligations.
•Insurance commissions. Insurance commissions are earned for brokering insurance policies. The Company's primary performance obligations for insurance commissions are satisfied and revenue is recognized when the brokered insurance policies are executed.
Payments Segment
The Payments segment derives a portion of its revenue from interest income on factored receivables and commercial loans related to invoice payments. These factored receivables consist of (i) invoices where we offer a Carrier a QuickPay opportunity to receive payment at a discount in advance of the standard payment term for such invoice in exchange for the assignment of such invoice to us and (ii) factoring transactions where we purchase receivables payable to such freight brokers from their shipper clients.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Payments segment also offers commercial loans that result from our offering certain Brokers an additional liquidity option through the ability to settle their invoices with us on an extended term following our payment to their Carriers. There were no such commercial loans at June 30, 2025 and December 31, 2024. Such revenue falls under Topic 310 and is outside the scope of Topic 606.
The products and services offered through the Company's Payments segment connect Brokers, Shippers, Factors and Carriers through forward-thinking solutions that help each party successfully manage the life cycle of invoice presentment for services provided by Carrier through processing and audit of such invoice to its ultimate payment to the Carrier or the Factor. The Payments segment earns transaction revenue for such services from fees paid by its customers to receive auditing and payment processing of their invoices. Transaction revenue is recorded in Fee Income on the Consolidated Statements of Income and is subject to Topic 606. Transaction fees can be variable in nature. When such fees are variable, they are typically based upon the number of audit and payment transactions executed during a stated period; generally a calendar month. The customer is charged either a set fee per transaction or a set minimum fee for a stated number of transactions with the variable component being a per-invoice amount for transactions exceeding the stated minimum number. When applicable, the stated minimum number of transactions typically resets on a monthly basis. Transaction volume and related variable fees are known and recognized at each reporting period. Transaction fees can also be fixed in nature with such fees reflecting a set annual amount that is recognized ratably over the terms of the related contracts. In both variable and fixed arrangements, customers are typically billed monthly in arrears with payment due on 30 day terms and as such, no revenue is deferred.
The Payments segment also earns network fees for providing its customers access to the network. Network fees are recorded in Fee Income on the Consolidated Statements of Income and are subject to Topic 606. Network fees are generally a fixed annual amount and are recognized ratably over the terms of the related contracts. Customers are typically billed monthly in arrears with payment due on 30 day terms and as such, no revenue is deferred.
The Payments segment's service comprises a single performance obligation to provide stand-ready access to its payments and audit platforms for its customers which is satisfied over time as services are rendered. Given the nature of its services and related revenue, no significant judgments are made in applying Topic 606 and there are no refund, warranty, or similar obligations.
The Payments segment's contracts with its customers are usually short-term in nature and can generally be terminated by either party without a termination penalty or refund after the notice period has lapsed. Therefore, the contracts are defined at the transaction level and do not extend beyond the service already provided. The contracts generally renew automatically without any significant material rights. Some of the contracts include tiered pricing, which is based primarily on volume. The fee charged per transaction is adjusted up or down based on the volume processed for a specified period. Management has concluded that this volume-based pricing approach does not constitute a future material right since changes in the fee ranges are typically offered to classes of customers with similar volume.
The Payments segment recognizes fees charged to its customers on a gross basis as transaction revenue as it is the principal in respect of completing Payments segment transactions. As a principal to the transaction, the Payments segment controls the services on its platforms. The Payments segment bears primary responsibility for the fulfillment of the services, contracts directly with its customers, controls the product specifications, and defines the value proposal from its services. Further, the Payments segment has full discretion in determining the fee charged to its customers. The Payments segment is also responsible for providing customer support.
Capitalized contract costs consist of (i) deferred sales commissions that are incremental costs of obtaining customer contracts and (ii) deferred set-up costs, primarily direct payroll costs, for implementation services provided to customers prior to the launching of the Company’s products for general availability (go-live) to customers. Deferred sales commissions are amortized ratably over two years, taking into consideration the initial contract term, expected renewal periods, and sales commissions paid on such renewal periods. Deferred set-up costs are amortized ratably over four years which estimates the benefit period of the capitalized costs starting on the go-live date of the service. Deferred sales commissions and deferred set-up costs were included in other assets in the accompanying consolidated balance sheets and were $251,000 and $1,647,000, respectively, at June 30, 2025 and $319,000 and $1,354,000, respectively, at December 31, 2024. The amortization of deferred sales commissions and deferred set-up costs is included in salaries and employee benefits in the consolidated statements of income and was not significant for the six months ended June 30, 2025 and 2024.
Given the nature of services provided, the Payments segment does not carry any material contract balances.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The table below shows the Payments segment’s revenue from transaction and network fees from external customers, which are disaggregated by customer category.
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Broker fee income $ 6,443  $ 4,392  $ 11,621  $ 8,507 
Factor fee income 993  1,296  2,226  2,591 
Other fee income 150  93  257  $ 154 
Total fee income $ 7,586  $ 5,781  $ 14,104  $ 11,252 
NOTE 15 — LESSOR OPERATING LEASES
The table below shows the Company's revenue from operating leases, which is included in non-interest income in the Company's consolidated statements of income.
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands) 2025 2024 2025 2024
Fixed payments $ 133  $ 1,095  $ 682  $ 1,095 
Variable payments 142  553  436  553 
Amortization of intangibles included in lease income (19) (30) (38) $ (30)
Total fee income $ 256  $ 1,618  $ 1,080  $ 1,618 
NOTE 16 — BUSINESS SEGMENT INFORMATION
The Company's reportable segments are Banking, Factoring, Payments, and Intelligence, which have been determined based upon their business processes and economic characteristics. This determination also gave consideration to the structure and management of various product lines. The Banking segment includes the operations of TBK Bank. The Banking segment derives its revenue principally from investments in interest earning assets as well as noninterest income typical for the banking industry. The Factoring segment derives its revenue from factoring services. The Payments segment includes the presentment, audit, and payment solutions offered to Shipper, Broker, and Factor clients in the trucking industry. The Payments segment derives its revenue from transaction fees and interest income on factored receivables related to invoice payments. These factored receivables consist of both invoices where we offer a Carrier a QuickPay opportunity to receive payment at a discount in advance of the standard payment term for such invoice in exchange for the assignment of such invoice to us and from offering Brokers the ability to settle their invoices with us on an extended term following our payment to their Carriers as an additional liquidity option for such Brokers. The Intelligence segment was launched at the beginning of the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of the assets of Isometric Technologies Inc., a company that provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry. The operations of this segment were further supplemented with our acquisition of Greenscreens AI. Inc., a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights, during the quarter ended June 30, 2025. The revenue for Intelligence offerings is derived through access and subscription fees, as well as seat licenses where applicable. Prior to the fourth quarter of 2024, there were no individuals allocated specifically to our data intelligence segment and an explicit data intelligence segment did not exist. Therefore, revision of prior period segment operating results is not applicable.
Prior to September 30, 2024, the Company disclosed Corporate as a reportable segment. The Company has determined that what was previously deemed the Corporate reportable segment consists of other business activities that do not represent a reportable segment, but rather, such activities belong in a Corporate and Other category as reported in the tabular disclosure below. It should be noted that such restructuring of the tabular disclosure did not result in any changes to the Company's revenue and expense allocation methodology described below. The Company restructured prior period tabular disclosures to achieve appropriate comparability.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Expenses that are directly attributable to the Company's Banking, Factoring, Payments, and Intelligence segments such as, but not limited to, occupancy, salaries and benefits to employees that are fully dedicated to the segment, and certain technology costs that can be attributed to specific users or functional areas within the segment are allocated as such. The Company continues to make considerable investments in shared services that benefit the entire organization and these expenses are allocated to the Corporate and Other category. The Company allocates such expenses to the Corporate and Other category in order for the Company's chief operating decision maker and investors to have clear visibility into the operating performance of each reportable segment.
The Company allocates intersegment interest expense to the Factoring and Payments segments based on one-month term SOFR for their funding needs. When the Payments segment is self-funded, with customer deposit funding in excess of its factored receivables, intersegment interest income is allocated based on the Federal Funds effective rate. Management believes that such intersegment interest allocations appropriately reflect the current interest rate environment and the relatively quick turn of the underlying receivables.
Reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. Changes in management structure or allocation methodologies and procedures may result in future changes to previously reported segment financial data. The accounting policies of the segments are substantially the same as those described in the “Summary of Significant Accounting Policies” in Note 1 of the Company’s 2024 Form 10-K.
Transactions between segments consist primarily of borrowed funds, payment network fees, and servicing fees. Intersegment interest expense is allocated to the Factoring and Payments segments as described above. Payment network fees are paid by the Factoring segment to the Payments segment for use of the payments network. Servicing fees are paid by the Payments segment to the Factoring segment for servicing factoring transactions with freight broker clients transferred from the Factoring segment to the Payments segment to align with the supply chain finance product offerings for this business. Servicing fees are paid by the Payments segment to the Factoring segment for servicing such product. Beginning prospectively on January 1, 2024, the Factoring and Payments segments began paying fees to our Banking segment for the Banking segment's execution of various banking services that benefit those segments. Credit loss expense is allocated based on the segment’s ACL determination. Noninterest income and expense directly attributable to a segment are assigned to the related segment. Various shared service costs such as human resources, accounting, finance, risk management and information technology expense are assigned to the Corporate and Other category if they are not directly attributable to a segment. Other segment expense consists of various loan and card related expenses and other insignificant miscellaneous costs not specifically reviewed by the Company's chief operating decision maker. Taxes are paid on a consolidated basis and are not allocated for segment purposes.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Total Corporate
Three Months Ended June 30, 2025 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 64,851  $ 38,040  $ 6,230  $ —  $ 109,121  $ 80  $ 109,201 
Intersegment interest allocations 6,386  (9,282) 2,896  —  —  —  — 
Total interest expense 18,825  2  —  —  18,827  1,696  20,523 
Net interest income (expense) 52,412  28,756  9,126  —  90,294  (1,616) 88,678 
Credit loss expense (benefit) 2,219  (2,916) 92  —  (605) (97) (702)
Net interest income after credit loss expense 50,193  31,672  9,034  —  90,899  (1,519) 89,380 
Noninterest income 7,989  1,811  7,724  1,724  19,248  136  19,384 
Noninterest expense:
Salaries and employee benefits 16,001  13,444  8,711  3,234  41,390  18,492  59,882 
Depreciation 1,656  468  222  7  2,353  1,602  3,955 
Other occupancy, furniture and equipment 1,896  508  163  14  2,581  1,603  4,184 
FDIC insurance and other regulatory assessments 894  —  —  —  894  —  894 
Professional fees 1,801  (7,272) 240  2,995  (2,236) 1,916  (320)
Amortization of intangible assets 385  193  1,418  946  2,942  458  3,400 
Advertising and promotion 557  223  669  22  1,471  367  1,838 
Communications and technology 5,257  2,438  2,455  278  10,428  1,887  12,315 
Software amortization —  1,125  1,413  —  2,538  327  2,865 
Travel and entertainment 306  245  456  130  1,137  482  1,619 
Other 3,210  2,770  1,097  84  7,161  3,047  10,208 
Total noninterest expense 31,963  14,142  16,844  7,710  70,659  30,181  100,840 
Net intersegment noninterest income (expense)(2)
 155  413  (568) —  —  —  — 
Net income (loss) before income tax expense $ 26,374  $ 19,754  $ (654) $ (5,986) $ 39,488  $ (31,564) $ 7,924 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands) Total Corporate
Three Months Ended June 30, 2024 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 66,900  $ 34,307  $ 5,721  $ —  $ 106,928  $ 87  $ 107,015 
Intersegment interest allocations 7,188  (9,198) 2,010  —  —  —  — 
Total interest expense 16,713  —  —  —  16,713  2,387  19,100 
Net interest income (expense) 57,375  25,109  7,731  —  90,215  (2,300) 87,915 
Credit loss expense (benefit) 1,961  2,176  (9) —  4,128  27  4,155 
Net interest income after credit loss expense 55,414  22,933  7,740  —  86,087  (2,327) 83,760 
Noninterest income 7,599  2,016  5,867  —  15,482  1,685  17,167 
Noninterest expense:
Salaries and employee benefits 16,733  12,863  9,224  —  38,820  17,185  56,005 
Depreciation 1,714  546  263  —  2,523  1,469  3,992 
Other occupancy, furniture and equipment 2,124  544  172  —  2,840  1,733  4,573 
FDIC insurance and other regulatory assessments 641  —  —  —  641  —  641 
Professional fees 1,622  1,453  658  —  3,733  825  4,558 
Amortization of intangible assets 607  362  1,687  —  2,656  213  2,869 
Advertising and promotion 867  229  509  —  1,605  403  2,008 
Communications and technology 5,504  2,984  2,717  —  11,205  3,102  14,307 
Software amortization 57  584  580  —  1,221  136  1,357 
Travel and entertainment 305  255  416  —  976  537  1,513 
Other 2,691  875  844  —  4,410  1,110  5,520 
Total noninterest expense 32,865  20,695  17,070  —  70,630  26,713  97,343 
Net intersegment noninterest income (expense)(2)
 137  373  (510) —  —  —  — 
Net income (loss) before income tax expense $ 30,285  $ 4,627  $ (3,973) $ —  $ 30,939  $ (27,355) $ 3,584 
(Dollars in thousands) Total Corporate
Six Months Ended June 30, 2025 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 128,344  $ 71,371  $ 11,593  $ —  $ 211,308  $ 163  $ 211,471 
Intersegment interest allocations 11,121  (16,935) 5,814  —  —  —  — 
Total interest expense 35,036  2  —  —  35,038  3,372  38,410 
Net interest income (expense) 104,429  54,434  17,407  —  176,270  (3,209) 173,061 
Credit loss expense (benefit) 2,726  (2,356) 210  —  580  48  628 
Net interest income after credit loss expense 101,703  56,790  17,197  —  175,690  (3,257) 172,433 
Noninterest income 14,992  3,530  14,255  2,119  34,896  1,678  36,574 
Noninterest expense:
Salaries and employee benefits 32,318  26,666  18,324  4,718  82,026  36,574  118,600 
Depreciation 3,286  971  452  14  4,723  3,176  7,899 
Other occupancy, furniture and equipment 3,998  1,045  331  21  5,395  3,287  8,682 
FDIC insurance and other regulatory assessments 1,621  —  —  —  1,621  —  1,621 
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Professional fees 2,866  (5,420) 446  3,946  1,838  3,906  5,744 
Amortization of intangible assets 770  386  2,969  1,062  5,187  613  5,800 
Advertising and promotion 1,068  477  1,050  52  2,647  655  3,302 
Communications and technology 10,272  4,712  4,924  505  20,413  4,146  24,559 
Software amortization 56  1,719  2,609  2  4,386  471  4,857 
Travel and entertainment 544  428  833  248  2,053  1,058  3,111 
Other 6,235  3,511  2,019  150  11,915  4,923  16,838 
Total noninterest expense 63,034  34,495  33,957  10,718  142,204  58,809  201,013 
Net intersegment noninterest income (expense)(2)
 292  848  (1,140) —  —  —  — 
Net income (loss) before income tax expense $ 53,953  $ 26,673  $ (3,645) $ (8,599) $ 68,382  $ (60,388) $ 7,994 
(Dollars in thousands) Total Corporate
Six Months Ended June 30, 2024 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 130,894  $ 67,059  $ 10,878  $ —  $ 208,831  $ 131  $ 208,962 
Intersegment interest allocations 13,932  (18,103) 4,171  —  —  —  — 
Total interest expense 30,217  —  —  —  30,217  4,795  35,012 
Net interest income (expense) 114,609  48,956  15,049  —  178,614  (4,664) 173,950 
Credit loss expense (benefit) 6,488  3,531  60  —  10,079  (28) 10,051 
Net interest income after credit loss expense 108,121  45,425  14,989  —  168,535  (4,636) 163,899 
Noninterest income 14,075  4,919  11,410  —  30,404  1,762  32,166 
Noninterest expense:
Salaries and employee benefits 33,542  25,124  18,355  —  77,021  33,169  110,190 
Depreciation 3,513  1,052  507  —  5,072  2,532  7,604 
Other occupancy, furniture and equipment 4,481  1,069  316  —  5,866  2,731  8,597 
FDIC insurance and other regulatory assessments 1,294  —  —  —  1,294  —  1,294 
Professional fees 2,296  2,056  1,451  —  5,803  2,296  8,099 
Amortization of intangible assets 1,225  766  3,389  —  5,380  213  5,593 
Advertising and promotion 1,204  475  869  —  2,548  674  3,222 
Communications and technology 10,487  5,282  4,800  —  20,569  5,632  26,201 
Software amortization 72  1,165  1,107  —  2,344  187  2,531 
Travel and entertainment 590  505  933  —  2,028  994  3,022 
Other 5,290  1,894  1,828  —  9,012  2,349  11,361 
Total noninterest expense 63,994  39,388  33,555  —  136,937  50,777  187,714 
Net intersegment noninterest income (expense)(2)
 258  762  (1,020) —  —  —  — 
Net income (loss) before income tax expense $ 58,460  $ 11,718  $ (8,176) $ —  $ 62,002  $ (53,651) $ 8,351 
(1) Includes revenue and expense from the Company’s holding company, which does not meet the definition of an operating segment. Also includes corporate shared service costs such as the majority of salaries and benefits expense for the Company's executive leadership team, as well as other selling, general, and administrative shared services costs including human resources, accounting, finance, risk management and a significant amount of information technology expense.
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TRIUMPH FINANCIAL, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(2) Net intersegment noninterest income (expense) includes:
(Dollars in thousands) Banking Factoring Payments
Three Months Ended June 30, 2025
Factoring revenue received from Payments $ —  $ 910  $ (910)
Payments revenue received from Factoring —  (381) 381 
Banking revenue received from Payments and Factoring 155  (116) (39)
Net intersegment noninterest income (expense) $ 155  $ 413  $ (568)
Three Months Ended June 30, 2024
Factoring revenue received from Payments $ —  $ 750  $ (750)
Payments revenue received from Factoring —  (264) 264 
Banking revenue received from Payments and Factoring 137  (113) (24)
Net intersegment noninterest income (expense) $ 137  $ 373  $ (510)
Six months ended June 30, 2025
Factoring revenue received from Payments $ —  $ 1,821  $ (1,821)
Payments revenue received from Factoring —  (753) 753 
Banking revenue received from Payments and Factoring 292  (220) (72)
Net intersegment noninterest income (expense) $ 292  $ 848  $ (1,140)
Six months ended June 30, 2024
Factoring revenue received from Payments $ —  $ 1,500  $ (1,500)
Payments revenue received from Factoring —  (529) 529 
Banking revenue received from Payments and Factoring 258  (209) (49)
Net intersegment noninterest income (expense) $ 258  $ 762  $ (1,020)
Total assets and gross loans below include intercompany loans, which eliminate in consolidation. Effective January, 1, 2025, Triumph Financial Services LLC, the entity through which the Company previously conducted all of its factoring operations, was merged with and into TBK Bank, SSB. Concurrent with the legal entity merger, the Banking segment intercompany advance to the Factoring segment was extinguished.
(Dollars in thousands) Total Corporate
June 30, 2025 Banking Factoring Payments Intelligence Segments and Other Eliminations Consolidated
Total assets $ 5,075,248  $ 1,240,792  $ 657,648  $ 118,292  $ 7,091,980  $ 673,102  $ (1,270,334) $ 6,494,748 
Gross loans $ 3,552,700  $ 1,177,423  $ 226,547  $ —  $ 4,956,670  $ —  $ (3,500) $ 4,953,170 
(Dollars in thousands) Total Corporate
December 31, 2024 Banking Factoring Payments Intelligence Segments and Other Eliminations Consolidated
Total assets $ 5,443,452  $ 1,186,342  $ 590,063  $ 10,099  $ 7,229,956  $ 1,119,825  $ (2,400,806) $ 5,948,975 
Gross loans $ 3,944,146  $ 1,034,992  $ 171,668  $ —  $ 5,150,806  $ —  $ (603,846) $ 4,546,960 
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ITEM 2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section presents management’s perspective on our financial condition and results of operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Company’s interim consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q and with the consolidated financial statements and accompanying notes and other detailed information appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. See the “Forward-Looking Statements” section of this discussion for further information on forward-looking statements.
Overview
We are a financial holding company headquartered in Dallas, Texas and registered under the Bank Holding Company Act, that offers a diversified line of banking, factoring, payments, and intelligence services. Our principal subsidiary is TBK Bank, SSB, a Texas state savings bank and the entity through which we offer substantially all of our products and services. Effective January, 1, 2025, we merged Triumph Financial Services LLC, the entity through which we previously conducted all of our factoring operations, with and into TBK Bank, SSB. As of June 30, 2025, we had consolidated total assets of $6.495 billion, total loans held for investment of $4.953 billion, total deposits of $5.186 billion and total stockholders’ equity of $912.4 million.
We offer traditional banking services, commercial lending product lines focused on businesses that require specialized financial solutions and national lending product lines that further diversify our lending operations. Our banking operations commenced in 2010 and include a branch network developed through organic growth and acquisition, including concentrations the front range of Colorado, the Quad Cities market in Iowa and Illinois and a full-service branch in Dallas, Texas. Our traditional banking offerings include a full suite of lending and deposit products and services. These activities are focused on our local market areas and some products are offered on a nationwide basis. They generate a stable source of core deposits and a diverse asset base to support our overall operations. Our asset-based lending and equipment lending products are offered on a nationwide basis and generate attractive returns. Additionally, we offer mortgage warehouse lending and purchase liquid credit lending products on a nationwide basis to provide further asset base diversification and our mortgage warehouse lending generates stable deposits. Our Banking products and services share basic processes and have similar economic characteristics.
In addition to our traditional banking operations, we also operate a factoring business focused primarily on serving the over-the-road trucking industry. This business involves the provision of working capital to the trucking industry through the purchase of invoices generated by small to medium sized trucking fleets ("Carriers") at a discount to provide immediate working capital to such Carriers. In 2024, our factoring business also launched its Factoring as a Service ("FaaS") product. As part of our FaaS product, we offer certain back-office factoring services to the over-the-road transportation industry, enabling our FaaS customers to either supplement their own factoring operations or to offer factoring services to their customers wholly supported by our platform. Our factoring business operates in a highly specialized niche with unique processes and earns substantially higher yields on its factored accounts receivable portfolio than our other lending products described above.
Our payments business is a payments network for the over-the-road trucking industry. This platform was originally designed to manage Carrier payments for third party logistics companies, or 3PLs ("Brokers") and the manufacturers and other businesses that contract directly for the shipment of goods (“Shippers”), with a focus on increasing on-balance sheet factored receivable transactions through the offering of quick pay transactions for Carriers receiving such payments through the network. During 2021, we acquired HubTran, Inc., a software platform that offers workflow solutions for the processing and approval of Carrier Invoices for approval by Brokers or purchase by the factoring businesses providing working capital to Carriers ("Factors"). Following such acquisition, our strategy shifted from a capital-intensive on-balance sheet product with a greater focus on interest income to a network for the trucking industry with an additional focus on fee revenue. Our network connects Brokers, Shippers, Factors and Carriers through forward-thinking solutions that help each party successfully manage the life cycle of invoice presentment for services provided by Carrier through the processing and audit of such invoice to its ultimate payment to the Carrier or the Factor providing working capital to such Carrier. During 2024, we introduced our LoadPay product; a digital bank account developed for Carriers. LoadPay provides a user experience and financial products, including small business checking accounts, tailored to the financial needs of the small trucking companies that are the ultimate payees inside of the network. A key feature of the LoadPay product is our ability to rapidly fund invoices approved for payment through the network or approved for purchase as part of our factoring operations to the LoadPay account without the need for such payments to be processed through traditional payment rails such as ACH transfers.
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We also offer supply chain finance to Brokers, allowing them to pay their Carriers faster and drive Carrier loyalty. In addition, through the network, we provide tools and services to increase automation, mitigate fraud, create back-office efficiency and improve the payment experience. Our payments business also operates in a highly specialized niche with unique processes and key performance indicators.
Our data intelligence business, which we call Intelligence, was launched at the beginning of the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of the assets of Isometric Technologies Inc., a company that provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry. During the second quarter of 2025, we also acquired Greenscreens AI, Inc. ("Greenscreens"), a company that provides a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights. Data has the ability to drive efficiency, enhance decision-making, and enable Shippers, Brokers, and Carriers to operate more profitably in a very competitive over-the-road trucking market. With our access to data from our payments network and other sources, we believe we can develop products and services to offer to logistics service providers, allowing them to better plan for peak periods, competitively source freight capacity, and allocate resources efficiently, thus improving their profitability. Intelligence operates in a highly specialized niche with unique processes and key performance indicators.
At June 30, 2025, our business is primarily focused on providing financial services to participants in the for-hire trucking ecosystem in the United States, including Brokers, Shippers, Factors and Carriers. Within such ecosystem, we operate our payments platform, which connects such parties to streamline and optimize the presentment, audit and payment of transportation invoices. We also act as capital provider to the Carrier industry through our factoring business. We also offer data services through our intelligence offerings. Our traditional banking operations provide stable, low cost deposits to support our operations, a diversified lending portfolio to add stability to our balance sheet, and a suite of traditional banking products and services to participants in the for-hire trucking ecosystem to deepen our relationship with such clients.
We have determined our reportable segments are Banking, Factoring, Payments and Intelligence. For the six months ended June 30, 2025, our Banking segment generated 59% of our total segment revenue (comprised of interest and noninterest income), our Factoring segment generated 30% of our total segment revenue, our Payments segment generated 10% of our total segment revenue, and our Intelligence segment generated 1% of our total segment revenue.
Second Quarter 2025 Overview
Net income available to common stockholders for the three months ended June 30, 2025 was $3.6 million, or $0.15 per diluted share, compared to net income available to common stockholders for the three months ended June 30, 2024 of $1.9 million, or $0.08 per diluted share. For the three months ended June 30, 2025, our return on average common equity was 1.68% and our return on average assets was 0.28%.
Net income available to common stockholders for the six months ended June 30, 2025 was $2.8 million, or $0.12 per diluted share, compared to net income available to common stockholders for the six months ended June 30, 2024 of $5.3 million, or $0.22 per diluted share. For the six months ended June 30, 2025, our return on average common equity was 0.66% and our return on average assets was 0.14%.
At June 30, 2025, we had total assets of $6.495 billion, including gross loans held for investment of $4.953 billion, compared to $5.949 billion of total assets and $4.547 billion of gross loans held for investment at December 31, 2024. Total loans held for investment increased $406.2 million during the six months ended June 30, 2025. Our Banking loans, which constitute 72% of our total loan portfolio at June 30, 2025, increased from $3.340 billion in aggregate as of December 31, 2024 to $3.549 billion as of June 30, 2025, an increase of 6.3%. Our Factoring factored receivables, which constitute 24% of our total loan portfolio at June 30, 2025, increased from $1.033 billion in aggregate as of December 31, 2024 to $1.175 billion as of June 30, 2025, an increase of 13.7%. Our Payments factored receivables, which constitute 5% of our total loan portfolio at June 30, 2025, increased from $171.7 million in aggregate as of December 31, 2024 to $226.5 million as of June 30, 2025, an increase of 32.0%.
At June 30, 2025, we had total liabilities of $5.582 billion, including total deposits of $5.186 billion, compared to $5.058 billion of total liabilities and $4.821 billion of total deposits at December 31, 2024. Deposits increased $365.3 million during the six months ended June 30, 2025.
At June 30, 2025, we had total stockholders' equity of $912.4 million. During the six months ended June 30, 2025, total stockholders’ equity increased $21.5 million. Capital ratios remained strong with Tier 1 capital and total capital to risk weighted assets ratios of 9.98% and 11.95%, respectively, at June 30, 2025.
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The total dollar value of invoices purchased by our Factoring segment during the three months ended June 30, 2025 was $2.874 billion with an average invoice size of $1,693. The average transportation invoice size for the three months ended June 30, 2025 was $1,663. This compares to invoice purchase volume of $2.542 billion with an average invoice size of $1,775 and average transportation invoice size of $1,738 during the same period a year ago.
Our Payments segment processed 8.5 million invoices paying Carriers a total of $10.081 billion during the three months ended June 30, 2025. This compares to processed volume of 6.1 million invoices for a total of $6.688 billion during the same period a year ago.
2025 Items of Note
Greenscreens.ai
On May 8, 2025, we, through our wholly-owned subsidiary TBK Bank, SSB, acquired Greenscreens AI, Inc. ("Greenscreens"), a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights, for $139.1 million in cash and $12.7 million of our common stock.
For further information on the above transactions see Note 2 – Acquisitions and Divestitures in the accompanying condensed notes to the consolidated financial statements included elsewhere in this report.
USPS Settlement
As of June 30, 2025, we carried a receivable (the “Misdirected Payments Receivable”) payable by the United States Postal Service (“USPS”) arising from accounts factored to a large carrier. The balance of such Misdirected Payments Receivable, net of customer reserves, was $19.4 million. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputed their obligation to make such payment, citing purported deficiencies in the notices delivered to them. We have been a party to litigation in the United States Court of Federal Claims against the USPS seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. On June 30, 2025, we reached an agreement with the USPS ("the USPS Settlement") whereby the USPS agreed to pay us $47.5 million to settle the litigation in the United States Court of Federal Claims and certain other related proceedings. Such settlement was entered into as part of a global settlement of the disputes related to the Misdirected Payments Receivable, other amounts we asserted were due to us from USPS for other balances owed to us as a result of their failure to honor our notices of assignment, and certain claims of the large carrier involved in this matter against the USPS for underpayment on certain transportation contracts in which we had a security interest. We received the full $47.5 million settlement proceeds on July 10, 2025. The proceeds of the USPS Settlement will be applied as follows:
•$11.5 million to the aforementioned large carrier,
•$19.4 million to relieve the entire balance of Misdirected Payments Receivable, net of customer reserves,
•$1.1 million of interest and fees,
•$7.9 million of legal expense recovery
•$3.8 million to recovery of previously charged-off acquired over-formula advances related to the aforementioned large carrier, and
•$3.8 million to CVLG in accordance with the amended terms of the CVLG transaction.
The USPS Settlement had a $12.4 million and $11.5 million positive impact on pretax net income for the three and six months ended June 30, 2025, respectively made up of the prior period impacts of the interest and fees, legal expense recovery, and the recovery of the previously charged-off acquired over-formula advances. The $19.4 million Misdirected Payments Receivable balance was legally discharged upon receipt of the settlement proceeds on July 10, 2025.
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2024 Items of Note
Isometric Technologies Inc
On December 1, 2024, we acquired the assets of Isometric Technologies Inc. ("ISO"), a freight technology company, for $10.0 million in cash. Isometric Technologies provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry.
For further information on the above transactions see Note 2 – Acquisitions and Divestitures in the accompanying condensed notes to the consolidated financial statements included elsewhere in this report.
Triumph Financial Headquarters Purchase
On March 20, 2024, we purchased a building in Dallas, TX that will be the future headquarters for Triumph Financial. The purchase price, including direct costs, was $54.6 million with approximately $51.7 million allocated to land and building and $2.9 million allocated to lease-related intangibles.
Trucking transportation and factoring
The largest driver of changes in revenue at our Factoring segment, and to a lesser extent, our Payments segment, is fluctuation in the freight markets, particularly in brokered freight, which is priced largely off the spot market (a reflection of real-time balance of carrier supply and shipper demand in the market) and subject to variability in diesel prices. The softness in freight during 2023, 2024 and into the first half of 2025 was a combination of falling volumes and excess capacity. In recent quarters, average rates per mile have decreased and returned spot rates to levels last seen in 2019. For the spot rate market, the drop was a little higher than the drop in diesel prices over the same period. Spot rates had fallen below the cost per mile to operate for many carriers. As a result, we have observed a number of small and medium-sized trucking companies either leave the market by signing on with larger carriers or electing to sell their fleets or companies and move on to other endeavors, though the pace of these exits has slowed recently. The confluence of these circumstances has resulted in persistently low invoice prices and decreased prices of new and used equipment. Such invoice prices and prices of new and used equipment remain consistently below the years leading up to 2023. This has put pressure on the revenue of our Factoring segment as well as our equipment finance borrowers, resulting in increased equipment finance delinquencies and loan modifications. Equipment finance losses have been manageable, but continued softness in the freight markets could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at June 30, 2025.
Though the transportation factoring industry continues to fight headwinds due to higher cost of capital and lower average invoices, we have sufficient access to capital, manageable funding costs, and an ability to diversify transportation and factoring income. We continue to focus our efforts on technology initiatives to be more efficient, support the enterprise, and enhance our customer experience while delivering various products to strengthen our clients throughout their business lifecycle. Our plan is for managed growth in our factoring segment with a greater emphasis on enhancing efficiency and profitability. These plans may include use of new technology tools, including those that integrate artificial intelligence capabilities.

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Financial Highlights
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands, except per share amounts) 2025 2024 2025 2024
Income Statement Data:
Interest income $ 109,201  $ 107,015  $ 211,471  $ 208,962 
Interest expense 20,523  19,100  38,410  35,012 
Net interest income 88,678  87,915  173,061  173,950 
Credit loss expense (benefit) (702) 4,155  628  10,051 
Net interest income after credit loss expense (benefit) 89,380  83,760  172,433  163,899 
Noninterest income 19,384  17,167  36,574  32,166 
Noninterest expense 100,840  97,343  201,013  187,714 
Net income (loss) before income taxes 7,924  3,584  7,994  8,351 
Income tax expense (benefit) 3,504  837  3,557  1,446 
Net income (loss) $ 4,420  $ 2,747  $ 4,437  $ 6,905 
Dividends on preferred stock (802) (802) (1,603) (1,603)
Net income available (loss) to common stockholders $ 3,618  $ 1,945  $ 2,834  $ 5,302 
Per Share Data:
Basic earnings (loss) per common share $ 0.15  $ 0.08  $ 0.12  $ 0.23 
Diluted earnings (loss) per common share $ 0.15  $ 0.08  $ 0.12  $ 0.22 
Weighted average shares outstanding - basic 23,590,119  23,274,089  23,476,888  23,237,674 
Weighted average shares outstanding - diluted 23,772,655  23,665,105  23,728,005  23,656,923 
Performance ratios - Annualized:
Return on average assets 0.28  % 0.19  % 0.14  % 0.25  %
Return on average total equity 1.95  % 1.26  % 0.99  % 1.58  %
Return on average common equity 1.68  % 0.94  % 0.66  % 1.28  %
Return on average tangible common equity (1)
 2.81  % 1.35  % 1.02  % 1.84  %
Yield on loans 8.41  % 9.10  % 8.39  % 9.10  %
Cost of interest bearing deposits 2.22  % 2.34  % 2.18  % 2.17  %
Cost of total deposits 1.25  % 1.39  % 1.24  % 1.28  %
Cost of total funds 1.53  % 1.62  % 1.49  % 1.54  %
Net interest margin 6.43  % 7.07  % 6.46  % 7.18  %
Net noninterest expense to average assets 5.13  % 5.67  % 5.36  % 5.64  %
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(Dollars in thousands, except per share amounts) June 30,
2025		 December 31,
2024
Balance Sheet Data:
Total assets $ 6,494,748  $ 5,948,975 
Cash and cash equivalents 282,346  330,117 
Investment securities 398,583  387,882 
Loans held for investment, net 4,914,479  4,506,246 
Total liabilities 5,582,366  5,058,056 
Noninterest bearing deposits 2,285,327  1,964,457 
Interest bearing deposits 2,900,771  2,856,363 
FHLB advances 180,000  30,000 
Subordinated notes 69,780  69,662 
Junior subordinated debentures 42,666  42,352 
Total stockholders’ equity 912,382  890,919 
Preferred stockholders' equity 45,000  45,000 
Common stockholders' equity 867,382  845,919 
Per Share Data:
Book value per share $ 36.56  $ 36.16 
Tangible book value per share (1)
 $ 19.31  $ 25.13 
Shares outstanding end of period 23,727,046  23,391,411 
Asset Quality ratios(2):
Past due to total loans 2.21  % 3.27  %
Nonperforming loans to total loans 1.20  % 2.49  %
Nonperforming assets to total assets 1.04  % 2.02  %
ACL to nonperforming loans 65.02  % 35.93  %
ACL to total loans 0.78  % 0.90  %
Net charge-offs to average loans(3)
 0.30  % 0.31  %
Capital ratios:
Tier 1 capital to average assets 9.46  % 12.03  %
Tier 1 capital to risk-weighted assets 9.98  % 13.06  %
Common equity Tier 1 capital to risk-weighted assets 8.43  % 11.40  %
Total capital to risk-weighted assets 11.95  % 15.23  %
Total stockholders' equity to total assets 14.05  % 14.98  %
Tangible common stockholders' equity ratio (1)
 7.53  % 10.33  %
(1)The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. The non-GAAP measures used by the Company include the following:
•"Tangible common stockholders' equity" is defined as common stockholders' equity less goodwill and other intangible assets.
•“Total tangible assets” is defined as total assets less goodwill and other intangible assets.
•“Tangible book value per share” is defined as tangible common stockholders’ equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
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•“Tangible common stockholders’ equity ratio” is defined as the ratio of tangible common stockholders’ equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
•“Return on average tangible common equity” is defined as net income available to common stockholders divided by average tangible common stockholders’ equity.
(2)Asset quality ratios exclude loans held for sale, except for non-performing assets to total assets.
(3)Net charge-offs to average loans ratios are for the six months ended June 30, 2025 and the year ended December 31, 2024.
GAAP Reconciliation of Non-GAAP Financial Measures
We believe the non-GAAP financial measures included above provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures:
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands, except per share amounts) 2025 2024 2025 2024
Average total stockholders' equity $ 910,202  $ 880,227  $ 906,253  $ 880,025 
Average preferred stock liquidation preference (45,000) (45,000) (45,000) (45,000)
Average total common stockholders' equity 865,202  835,227  861,253  835,025 
Average goodwill and other intangibles (347,894) (256,552) (302,896) (256,327)
Average tangible common equity $ 517,308  $ 578,675  $ 558,357  $ 578,698 
Net income available to common stockholders $ 3,618  $ 1,945  $ 2,834  $ 5,302 
Average tangible common equity 517,308  578,675  558,357  578,698 
Return on average tangible common equity 2.81  % 1.35  % 1.02  % 1.84  %
Net noninterest expense to average assets ratio:
Total noninterest expense $ 100,840  $ 97,343  $ 201,013  $ 187,714 
Total noninterest income 19,384  17,167  36,574  32,166 
Net noninterest expenses $ 81,456  $ 80,176  $ 164,439  $ 155,548 
Average total assets $ 6,366,984  $ 5,690,767  $ 6,181,549  $ 5,545,063 
Net noninterest expense to average assets ratio 5.13  % 5.67  % 5.36  % 5.64  %
(Dollars in thousands, except per share amounts) June 30,
2025		 December 31,
2024
Total stockholders' equity $ 912,382  $ 890,919 
Preferred stock liquidation preference (45,000) (45,000)
Total common stockholders' equity 867,382  845,919 
Goodwill and other intangibles (409,165) (258,208)
Tangible common stockholders' equity $ 458,217  $ 587,711 
Common shares outstanding 23,727,046  23,391,411 
Tangible book value per share $ 19.31  $ 25.13 
Total assets at end of period $ 6,494,748  $ 5,948,975 
Goodwill and other intangibles (409,165) (258,208)
Tangible assets at period end $ 6,085,583  $ 5,690,767 
Tangible common stockholders' equity ratio 7.53  % 10.33  %
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Results of Operations
Three months ended June 30, 2025 compared with three months ended June 30, 2024.
Net Income
We earned net income of $4.4 million for the three months ended June 30, 2025 compared to net income of $2.7 million for the three months ended June 30, 2024, an increase of $1.7 million or 60.9%.
Three Months Ended June 30, 2025
(Dollars in thousands, except per share amounts) 2025 2024 $ Change % Change
Interest income $ 109,201  $ 107,015  $ 2,186  2.0  %
Interest expense 20,523  19,100  1,423  7.5  %
Net interest income 88,678  87,915  763  0.9  %
Credit loss expense (benefit) (702) 4,155  (4,857) (116.9) %
Net interest income after credit loss expense (benefit) 89,380  83,760  5,620  6.7  %
Noninterest income 19,384  17,167  2,217  12.9  %
Noninterest expense 100,840  97,343  3,497  3.6  %
Net income (loss) before income taxes 7,924  3,584  4,340  121.1  %
Income tax expense (benefit) 3,504  837  2,667  318.6  %
Net income (loss) $ 4,420  $ 2,747  $ 1,673  60.9  %
Details of the changes in the various components of net income are further discussed below.
Net Interest Income
Our operating results heavily depend on our net interest income, which is the difference between interest income on interest earning assets, including loans and securities, and interest expense incurred on interest bearing liabilities, including deposits and other borrowed funds. Interest rate fluctuations, as well as changes in the amount and type of interest earning assets and interest bearing liabilities, combine to affect net interest income. Our net interest income is affected by changes in the amount and mix of interest earning assets and interest bearing liabilities, referred to as a “volume change.” It is also affected by changes in yields earned on interest earning assets and rates paid on interest bearing liabilities, referred to as a “rate change.”
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The following table presents the distribution of average assets, liabilities and equity, as well as interest income and fees earned on average interest earning assets and interest expense paid on average interest bearing liabilities. Average balances and interest are inclusive of assets and deposits classified as held for sale.
Three Months Ended June 30,
2025 2024
(Dollars in thousands) Average
Balance		 Interest
Average
Rate(4)
 Average
Balance		 Interest
Average
Rate(4)
Interest earning assets:
Cash and cash equivalents 377,775  4,181  4.44  % 463,759  6,330  5.49  %
Taxable securities 409,277  5,705  5.59  % 328,987  5,501  6.73  %
Tax-exempt securities 2,535  16  2.53  % 3,153  22  2.81  %
FHLB and other restricted stock 17,687  246  5.58  % 7,598  234  12.39  %
Loans (1)
 4,725,240  99,053  8.41  % 4,195,669  94,928  9.10  %
Total interest earning assets 5,532,514  109,201  7.92  % 4,999,166  107,015  8.61  %
Noninterest earning assets:
Cash and cash equivalents 77,913  77,389 
Other noninterest earning assets 756,557  614,212 
Total assets 6,366,984  5,690,767 
Interest bearing liabilities:
Deposits:
Interest bearing demand 722,653  916  0.51  % 748,699  1,164  0.63  %
Individual retirement accounts 41,694  131  1.26  % 49,917  175  1.41  %
Money market 586,420  3,931  2.69  % 565,612  4,097  2.91  %
Savings 519,067  1,354  1.05  % 541,408  1,480  1.10  %
Certificates of deposit 225,333  1,520  2.71  % 257,292  1,945  3.04  %
Brokered time deposits 614,168  6,618  4.32  % 433,096  5,698  5.29  %
Other brokered deposits 93,315  1,035  4.45  % 71,196  961  5.43  %
Total interest bearing deposits 2,802,650  15,505  2.22  % 2,667,220  15,520  2.34  %
Federal Home Loan Bank advances 298,132  3,322  4.47  % 85,769  1,193  5.59  %
Subordinated notes 69,749  661  3.80  % 108,868  1,225  4.53  %
Junior subordinated debentures 42,587  1,035  9.75  % 41,951  1,162  11.14  %
Total interest bearing liabilities 3,213,118  20,523  2.56  % 2,903,808  19,100  2.65  %
Noninterest bearing liabilities and equity:
Noninterest bearing demand deposits 2,166,628  1,832,154 
Other liabilities 77,036  74,578 
Total equity 910,202  880,227 
Total liabilities and equity 6,366,984  5,690,767 
Net interest income 88,678  87,915 
Interest spread (2)
 5.36  % 5.96  %
Net interest margin (3)
 6.43  % 7.07  %
(1)Balance totals include respective nonaccrual assets.
(2)Net interest spread is the yield on average interest earning assets less the rate on interest bearing liabilities.
(3)Net interest margin is the ratio of net interest income to average interest earning assets.
(4)Ratios have been annualized.
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The following table presents loan yields earned on our loan portfolios:
Three Months Ended June 30,
2025 2024
(Dollars in thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate
Banking $ 3,381,919  $ 54,784  6.50  % $ 3,035,612  $ 54,900  7.27  %
Factoring 1,138,792  38,040  13.40  % 976,087  34,307  14.14  %
Payments 204,529  6,230  12.22  % 183,970  5,721  12.51  %
Total loans $ 4,725,240  $ 99,054  8.41  % $ 4,195,669  $ 94,928  9.10  %
We earned net interest income of $88.7 million for the three months ended June 30, 2025 compared to $87.9 million for the three months ended June 30, 2024, an increase of $0.8 million, or 0.9%, primarily driven by the following factors.
Interest income increased $2.2 million, or 2.0%, due to changes in average interest earning assets which increased $533.3 million, or 10.7%, including an increase in average total loans of $529.6 million, or 12.6%. The average balance of our higher yielding Factoring factored receivables increased $162.7 million, or 16.7%, and we experienced an increase in average Payments factored receivables. Average Banking loans increased $346.3 million, or 11.4% due to increases in the average balances of residential real estate, consumer, and mortgage warehouse loans. Interest income from our Banking loans is impacted by our lower yielding mortgage warehouse lending product. The average mortgage warehouse lending balance was $1.068 billion for the three months ended June 30, 2025 compared to $681.7 million for the three months ended June 30, 2024.
Interest expense increased $1.4 million, or 7.5%, primarily driven by higher average interest-bearing liabilities which increased in total period over period, including average total interest bearing deposits which increased $135.4 million, or 5.1%. The increase in interest expense was partially offset by decreased rates on our interest bearing liabilities. Average noninterest bearing demand deposits grew $334.5 million.
Net interest margin decreased to 6.43% for the three months ended June 30, 2025 from 7.07% for the three months ended June 30, 2024, a decrease of 64 basis points or 9.1%.
The decrease in our net interest margin was most impacted by a decrease in our yield on interest earning assets of 69 basis points to 7.92% for the three months ended June 30, 2025. This decrease was primarily driven by lower yields on loans which decreased 69 basis points to 8.41% for the period. Yield on our Banking loans decreased 77 basis points period over period driving much of the decrease in the yield on our overall loan portfolio. Our yield on Factoring and Payments factored receivables also decreased period over period. That said, our higher yielding Factoring and Payments factored receivables as a percentage of the total loan portfolio increased period over period which had an upward impact on our overall loan yield. Non-loan yields were lower across the board period over period.
The decrease in our net interest margin was also impacted by a decrease in our average cost of interest bearing liabilities of 9 basis points. This decrease in average cost was caused by decreased rates across our interest bearing liabilities period over period.
Our mortgage warehouse business has nearly self-funded for several quarters due to the servicing deposits of its customers. The average balance of such deposits was $781.3 million for the three months ended June 30, 2025. These deposits are noninterest bearing deposits on our balance sheet. Despite their classification, many of these deposits are not truly free of cost as our clients are compensated for these balances in the form of an earnings interest rebate rather than deposit interest. As a result, such noninterest bearing deposits decrease our loan yield rather than increase our deposit rates. It is important to note that our net interest margin is not affected by this arrangement. During the three months ended June 30, 2025, these deposits decreased our overall yield on loans by 58 bps and our overall cost of deposits and cost of funds would have been 56 bps and 51 bps higher, respectively.


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The following table shows the effects that changes in average balances (volume) and average interest rates (rate) had on the interest earned on our interest earning assets and the interest incurred on our interest bearing:
Three Months Ended
June 30, 2025 vs. 2024
Increase (Decrease) Due to:
(Dollars in thousands) Rate Volume Net Increase
Interest earning assets:
Cash and cash equivalents $ (1,197) $ (952) $ (2,149)
Taxable securities (915) 1,119  204 
Tax-exempt securities (2) (4) (6)
FHLB and other restricted stock (128) 140  12 
Loans (6,976) 11,101  4,125 
Total interest income (9,218) 11,404  2,186 
Interest bearing liabilities:
Interest bearing demand (215) (33) (248)
Individual retirement accounts (18) (26) (44)
Money market (305) 139  (166)
Savings (68) (58) (126)
Certificates of deposit (209) (216) (425)
Brokered time deposits (1,031) 1,951  920 
Other brokered deposits (171) 245  74 
Total interest bearing deposits (2,017) 2,002  (15)
Federal Home Loan Bank advances (237) 2,366  2,129 
Subordinated notes (193) (371) (564)
Junior subordinated debentures (142) 15  (127)
Other borrowings —  —  — 
Total interest expense (2,589) 4,012  1,423 
Change in net interest income $ (6,629) $ 7,392  $ 763 
Credit Loss Expense
Credit loss expense is the amount of expense that, based on our judgment, is required to maintain the allowances for credit losses (“ACL”) at an appropriate level under the current expected credit loss model. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity. Refer to Note 1 of the Company’s 2024 Form 10-K for detailed discussion regarding ACL methodologies for available for sale debt securities, held to maturity securities and loans held for investment.
The following table presents the major categories of credit loss expense:
Three Months Ended June 30,
(Dollars in thousands) 2025 2024 $ Change % Change
Credit loss expense (benefit) on loans $ (516) $ 4,068  $ (4,584) (112.7) %
Credit loss expense (benefit) on off balance sheet credit exposures (89) 60  (149) (248.3) %
Credit loss expense (benefit) on held to maturity securities (97) 27  (124) (459.3) %
Credit loss expense on available for sale securities —  —  —  — 
Total credit loss expense (benefit) $ (702) $ 4,155  $ (4,857) (116.9) %
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For available for sale debt securities in an unrealized loss position, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense. At June 30, 2025 and March 31, 2025, the Company determined that all impaired available for sale securities experienced a decline in fair value below the amortized cost basis due to noncredit-related factors. Therefore, the Company carried no ACL at those respective dates and there was no credit loss expense recognized by the Company during the three months ended June 30, 2025. The same was true for the same period in the prior year.
The ACL on held to maturity ("HTM") securities is estimated at each measurement date on a collective basis by major security type. At June 30, 2025 and December 31, 2024, the Company’s held to maturity securities consisted of investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. At June 30, 2025 and March 31, 2025, the Company carried $3.2 million and $3.2 million, respectively, of these HTM securities at amortized cost. The required ACL on these balances was $1.4 million at June 30, 2025 and $1.5 million at March 31, 2025. We recognized a benefit to credit loss expense of $0.1 million during the current quarter. Credit loss expense during the three months ended June 30, 2024 was $27 thousand. None of the overcollateralization triggers tied to the CLO securities were tripped as of June 30, 2025. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call.
Our ACL on loans was $38.7 million as of June 30, 2025, compared to $40.7 million as of December 31, 2024, representing an ACL to total loans ratio of 0.78% and 0.90%, respectively.
Our credit loss expense on loans decreased $4.6 million, or 112.7%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
During the three months ended June 30, 2025, the Company acquired a $23.4 million nonperforming equipment finance commercial loan for $3.3 million. The loan was purchased credit deteriorated ("PCD") and a $10.8 million ACL was established on Day 1 resulting in a discount of $9.3 million. Prior to June 30, 2025, the Company determined that the $10.8 million ACL was uncollectible and charged off the entire amount. Such charge-off had no impact on credit loss expense.
The decrease in credit loss expense was primarily driven by net charge-off activity. Excluding the $10.8 million charge-off on the acquired PCD loan which had no impact on credit loss expense, we had a net recovery of $3.0 million during the three months ended June 30, 2025 compared to net charge-offs of $2.7 million during the same period a year ago. Such net recovery for the three months ended June 20, 2025 includes the aforementioned $3.8 million recovery resulting from the USPS Settlement. Changes to projected loss drivers and prepayment speeds that the Company forecasted over the reasonable and supportable forecast periods to calculate expected losses resulted in a benefit to credit loss expense of $0.2 million during the three months ended June 30, 2025 compared to $1.1 million of credit loss expense during the same period a year ago.
The decrease in credit loss expense was partially offset by changes in required specific reserves. Such specific reserves increased $1.5 million during the three months ended June 30, 2025 compared to an insignificant increase during the same period a year ago. Further, changes in volume and mix of the loan portfolio resulted in credit loss expense of $1.2 million during the three months ended June 30, 2025 compared to $0.2 million of credit loss expense during the same period a year ago.
Credit loss expense for off balance sheet credit exposures decreased $0.1 million, primarily due to changes to outstanding commitments to fund and changes to assumed loss rates period over period.
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Noninterest Income
The following table presents our major categories of noninterest income:
Three Months Ended June 30,
(Dollars in thousands) 2025 2024 $ Change % Change
Service charges on deposits $ 1,742  $ 1,810  $ (68) (3.8) %
Card income 1,922  2,085  (163) (7.8) %
Net gains (losses) on sale of loans 190  123  67  54.5  %
Fee income 12,755  8,517  4,238  49.8  %
Insurance commissions 1,282  1,505  (223) (14.8) %
Other 1,493  3,127  (1,634) (52.3) %
Total noninterest income $ 19,384  $ 17,167  $ 2,217  12.9  %
Noninterest income increased $2.2 million, or 12.9%. Changes in selected components of noninterest income in the above table are discussed below.
•Fee income. Fee income increased $4.2 million due to a $1.8 million increase in fee income from our Payments segment, a $1.6 million increase in fee income from our Intelligence segment mostly driven by the acquisition of Greenscreens during the three months ended June 30, 2025, and a $0.7 million increase in fee income from insurance services period over period.
•Other. Other noninterest income decreased $1.6 million due to a $0.5 million gain on sale of equity securities during the three months ended June 30, 2024 that did not repeat during the current period and a $1.4 million decrease in rental income generated by the property purchased by the Company during late March of 2024 period over period. These decreases were partially offset by a $0.4 million increase in bank owned life insurance income period over period.
Noninterest Expense
The following table presents our major categories of noninterest expense:
Three Months Ended June 30,
(Dollars in thousands) 2025 2024 $ Change % Change
Salaries and employee benefits $ 59,882  $ 56,005  $ 3,877  6.9  %
Occupancy, furniture and equipment 8,139  8,565  (426) (5.0) %
FDIC insurance and other regulatory assessments 894  641  253  39.5  %
Professional fees (320) 4,558  (4,878) (107.0) %
Amortization of intangible assets 3,400  2,869  531  18.5  %
Advertising and promotion 1,838  2,008  (170) (8.5) %
Communications and technology 12,315  14,307  (1,992) (13.9) %
Software amortization 2,865  1,357  1,508  111.1  %
Travel and entertainment 1,619  1,513  106  7.0  %
Other 10,208  5,520  4,688  84.9  %
Total noninterest expense $ 100,840  $ 97,343  $ 3,497  3.6  %
Noninterest expense increased $3.5 million, or 3.6%. Details of the more significant changes in the various components of noninterest expense are further discussed below.
•Salaries and Employee Benefits. Salaries and employee benefits expenses increased $3.9 million, or 6.9%. Employee salaries and payroll taxes increased $2.0 million and $0.1 million, respectively. Our average full-time equivalent employees were 1,576.0 and 1,571.0 for the three months ended June 30, 2025 and 2024, respectively. Temporary labor expense decreased $0.5 million, bonus expense increased $0.7 million and commissions expense increased $0.7 million period over period. Additionally, employee benefits expense such as 401(k) benefits match, employee insurance and stock based compensation decreased $0.1 million.
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•Professional Fees. Professional fees decreased $4.9 million, or 107.0%, primarily due to the recovery of $7.4 million of previously expensed legal fees through the USPS Settlement during the three months ended June 30, 2025. This decrease was partially offset by $3.0 million of professional fees incurred during the three months ended June 30, 2025 as a result of the Greenscreens acquisition.
•Amortization of Intangible Assets. Amortization of intangible assets increased $0.5 million, or 18.5%, primarily due to the amortization of addition of intangible assets resulting from the Greenscreens acquisition.
•Communication and Technology. Communication and technology decreased $2.0 million, or 13.9%, primarily due to decreased IT professional services fees.
•Software Amortization. Software amortization expense increased $1.5 million, or 111.1%, primarily due to additional software assets coming on line during late 2024 and early 2025.
•Other. Other noninterest expense includes loan-related expenses, training and recruiting, postage, insurance, and subscription services. Other noninterest expense increased $4.7 million, or 84.9% primarily due to a $2.0 million settlement of litigation (unrelated to the USPS Settlement) during the three months ended June 30, 2025, $1.8 million of current period lease termination payments related to the building we acquired during March 2024, and an increase of $0.7 million in loan-related expenses period over period. There were no other significant variances in other noninterest expense period over period.
Income Taxes
The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income and the effect of changes in valuation allowances maintained against deferred tax benefits.
Income tax expense increased $2.7 million, from $0.8 million for the three months ended June 30, 2024 to $3.5 million for the three months ended June 30, 2025. The effective tax rate was 44% for the three months ended June 30, 2025, compared to 23% for the three months ended June 30, 2024. The effective tax rate for the three months ended June 30, 2025 was impacted by limited restricted stock stock-based compensation deductibility, higher state tax rates, and higher disallowed expenses including some transaction costs paid in connection with the Greenscreens acquisition.
Operating Segment Results
Our reportable segments are Banking, Factoring, Payments, and Intelligence, which have been determined based upon their business processes and economic characteristics. This determination also gave consideration to the structure and management of various product lines. The Banking segment includes the community banking products and services offered through TBK Bank. Our Banking segment derives its revenue principally from investments in interest earning assets as well as noninterest income typical for the banking industry. The Factoring segment derives its revenue from factoring services. The Payments segment includes the operations of TBK Bank's presentment, audit, and payment solutions to Shipper, Broker, and Factor clients in the trucking industry. The Payments segment derives its revenue from transaction fees and interest income on factored receivables related to invoice payments. These factored receivables consist of both invoices where we offer a Carrier a quickpay opportunity to receive payment at a discount in advance of the standard payment term for such invoice in exchange for the assignment of such invoice to us and from offering Brokers the ability to settle their invoices with us on an extended term following our payment to their Carriers as an additional liquidity option for such Brokers. Our data intelligence segment was launched at the beginning of the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of the assets Isometric Technologies Inc., a company that provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry. The operations of this segment were further supplemented with our acquisition of Greenscreens AI, Inc., a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights, during the quarter ended June 30, 2025. The revenue for Intelligence offerings is derived through access and subscription fees, as well as seat licenses where applicable. Prior to the fourth quarter of 2024, there were no individuals allocated specifically to our data intelligence segment and an explicit data intelligence segment did not exist. Therefore, revision of prior period segment operating results is not applicable.
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Prior to September 30, 2024, the Company disclosed Corporate as a reportable segment. The Company has determined that what was previously deemed the Corporate reportable segment consists of other business activities that do not represent a reportable segment, but rather, such activities belong in a Corporate and Other category as reported in the tabular disclosure below. It should be noted that such restructuring of the tabular disclosure did not result in any changes to the Company's revenue and expense allocation methodology described below. The Company restructured prior period tabular disclosures to achieve appropriate comparability.
Expenses that are directly attributable to the Company's Banking, Factoring, Payments, and Intelligence segments such as, but not limited to, occupancy, salaries and benefits to employees that are fully dedicated to the segment, and certain technology costs that can be attributed to specific users or functional areas within the segment are allocated as such. The Company continues to make considerable investments in shared services that benefit the entire organization and these expenses are allocated to the Corporate and Other category. The Company allocates such expenses to the Corporate and Other category in order for the Company's chief operating decision maker and investors to have clear visibility into the operating performance of each reportable segment.
We allocate intersegment interest expense to the Factoring and Payments segments based on one-month term SOFR for their funding needs. When the Payments segment is self-funded, with customer deposit funding in excess of its factored receivables, intersegment interest income is allocated based on the Federal Funds effective rate. Management believes that such intersegment interest allocations appropriately reflect the current interest rate environment and the relatively quick turn of the underlying receivables.
Reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. Changes in management structure or allocation methodologies and procedures may result in future changes to previously reported segment financial data. The accounting policies of the segments are substantially the same as those described in the “Summary of Significant Accounting Policies” in Note 1 of the Company’s 2024 Form 10-K.
Transactions between segments consist primarily of borrowed funds, payment network fees, and servicing fees. Intersegment interest expense is allocated to the Factoring and Payments segments as described above. Payment network fees are paid by the Factoring segment to the Payments segment for use of the payments network. Servicing fees are paid by the Payments segment to the Factoring segment for servicing factoring transactions with freight broker clients transferred from our Factoring segment to our Payments segment to align with the supply chain finance product offerings for this business. Beginning prospectively on January 1, 2024, the Factoring and Payments segments began paying fees to our Banking segment for the Banking segment's execution of various banking services that benefit those segments. Credit loss expense is allocated based on the segment’s ACL determination. Noninterest income and expense directly attributable to a segment are assigned to it with various shared service costs such as human resources, accounting, finance, risk management and information technology expense assigned to the Corporate and Other category if they are not directly attributable to a segment. Other segment expense consists of various loan and card related expenses and other insignificant miscellaneous costs not specifically reviewed by the Company's chief operating decision maker. Taxes are paid on a consolidated basis and are not allocated for segment purposes.
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The following tables present our primary operating results for our operating segments:
(Dollars in thousands) Total Corporate
Three Months Ended June 30, 2025 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 64,851  $ 38,040  $ 6,230  $ —  $ 109,121  $ 80  $ 109,201 
Intersegment interest allocations 6,386  (9,282) 2,896  —  —  —  — 
Total interest expense 18,825  2  —  —  18,827  1,696  20,523 
Net interest income (expense) 52,412  28,756  9,126  —  90,294  (1,616) 88,678 
Credit loss expense (benefit) 2,219  (2,916) 92  —  (605) (97) (702)
Net interest income after credit loss expense 50,193  31,672  9,034  —  90,899  (1,519) 89,380 
Noninterest income 7,989  1,811  7,724  1,724  19,248  136  19,384 
Noninterest expense:
Salaries and employee benefits 16,001  13,444  8,711  3,234  41,390  18,492  59,882 
Depreciation 1,656  468  222  7  2,353  1,602  3,955 
Other occupancy, furniture and equipment 1,896  508  163  14  2,581  1,603  4,184 
FDIC insurance and other regulatory assessments 894  —  —  —  894  —  894 
Professional fees 1,801  (7,272) 240  2,995  (2,236) 1,916  (320)
Amortization of intangible assets 385  193  1,418  946  2,942  458  3,400 
Advertising and promotion 557  223  669  22  1,471  367  1,838 
Communications and technology 5,257  2,438  2,455  278  10,428  1,887  12,315 
Software amortization —  1,125  1,413  —  2,538  327  2,865 
Travel and entertainment 306  245  456  130  1,137  482  1,619 
Other 3,210  2,770  1,097  84  7,161  3,047  10,208 
Total noninterest expense 31,963  14,142  16,844  7,710  70,659  30,181  100,840 
Net intersegment noninterest income (expense)(2)
 155  413  (568) —  —  —  — 
Net income (loss) before income tax expense $ 26,374  $ 19,754  $ (654) $ (5,986) $ 39,488  $ (31,564) $ 7,924 
(Dollars in thousands) Total Corporate
Three Months Ended June 30, 2024 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 66,900  $ 34,307  $ 5,721  $ —  $ 106,928  $ 87  $ 107,015 
Intersegment interest allocations 7,188  (9,198) 2,010  —  —  —  — 
Total interest expense 16,713  —  —  —  16,713  2,387  19,100 
Net interest income (expense) 57,375  25,109  7,731  —  90,215  (2,300) 87,915 
Credit loss expense (benefit) 1,961  2,176  (9) —  4,128  27  4,155 
Net interest income after credit loss expense 55,414  22,933  7,740  —  86,087  (2,327) 83,760 
Noninterest income 7,599  2,016  5,867  —  15,482  1,685  17,167 
Noninterest expense:
Salaries and employee benefits 16,733  12,863  9,224  —  38,820  17,185  56,005 
Depreciation 1,714  546  263  —  2,523  1,469  3,992 
Other occupancy, furniture and equipment 2,124  544  172  —  2,840  1,733  4,573 
FDIC insurance and other regulatory assessments 641  —  —  —  641  —  641 
Professional fees 1,622  1,453  658  —  3,733  825  4,558 
Amortization of intangible assets 607  362  1,687  —  2,656  213  2,869 
Advertising and promotion 867  229  509  —  1,605  403  2,008 
Communications and technology 5,504  2,984  2,717  —  11,205  3,102  14,307 
Software amortization 57  584  580  —  1,221  136  1,357 
Travel and entertainment 305  255  416  —  976  537  1,513 
Other 2,691  875  844  —  4,410  1,110  5,520 
Total noninterest expense 32,865  20,695  17,070  —  70,630  26,713  97,343 
Net intersegment noninterest income (expense)(2)
 137  373  (510) —  —  —  — 
Net income (loss) before income tax expense $ 30,285  $ 4,627  $ (3,973) $ —  $ 30,939  $ (27,355) $ 3,584 
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(1) Includes revenue and expense from the Company’s holding company, which does not meet the definition of an operating segment. Also includes corporate shared service costs such as the majority of salaries and benefits expense for our executive leadership team, as well as other selling, general, and administrative shared services costs including human resources, accounting, finance, risk management and a significant amount of information technology expense.
(2) Net intersegment noninterest income (expense) includes:
(Dollars in thousands) Banking Factoring Payments
Three Months Ended June 30, 2025
Factoring revenue received from Payments $ —  $ 910  $ (910)
Payments revenue received from Factoring —  (381) 381 
Banking revenue received from Payments and Factoring 155  (116) (39)
Net intersegment noninterest income (expense) $ 155  $ 413  $ (568)
Three Months Ended June 30, 2024
Factoring revenue received from Payments $ —  $ 750  $ (750)
Payments revenue received from Factoring —  (264) 264 
Banking revenue received from Payments and Factoring 137  (113) (24)
Net intersegment noninterest income (expense) $ 137  $ 373  $ (510)
(Dollars in thousands) Total Corporate
June 30, 2025 Banking Factoring Payments Intelligence Segments and Other Eliminations Consolidated
Total assets $ 5,075,248  $ 1,240,792  $ 657,648  $ 118,292  $ 7,091,980  $ 673,102  $ (1,270,334) $ 6,494,748 
Gross loans $ 3,552,700  $ 1,177,423  $ 226,547  $ —  $ 4,956,670  $ —  $ (3,500) $ 4,953,170 
(Dollars in thousands) Total Corporate
December 31, 2024 Banking Factoring Payments Intelligence Segments and Other Eliminations Consolidated
Total assets $ 5,443,452  $ 1,186,342  $ 590,063  $ 10,099  $ 7,229,956  $ 1,119,825  $ (2,400,806) $ 5,948,975 
Gross loans $ 3,944,146  $ 1,034,992  $ 171,668  $ —  $ 5,150,806  $ —  $ (603,846) $ 4,546,960 
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Banking
(Dollars in thousands) Three Months Ended June 30,
Banking 2025 2024 $ Change % Change
Total interest income $ 64,851  $ 66,900  $ (2,049) (3.1) %
Intersegment interest allocations 6,386  7,188  (802) (11.2) %
Total interest expense 18,825  16,713  2,112  12.6  %
Net interest income (expense) 52,412  57,375  (4,963) (8.7) %
Credit loss expense (benefit) 2,219  1,961  258  13.2  %
Net interest income after credit loss expense 50,193  55,414  (5,221) (9.4) %
Noninterest income 7,989  7,599  390  5.1  %
Noninterest expense:
Salaries and employee benefits 16,001  16,733  (732) (4.4) %
Depreciation 1,656  1,714  (58) (3.4) %
Other occupancy, furniture and equipment 1,896  2,124  (228) (10.7) %
FDIC insurance and other regulatory assessments 894  641  253  39.5  %
Professional fees 1,801  1,622  179  11.0  %
Amortization of intangible assets 385  607  (222) (36.6) %
Advertising and promotion 557  867  (310) (35.8) %
Communications and technology 5,257  5,504  (247) (4.5) %
Software amortization —  57  (57) (100.0) %
Travel and entertainment 306  305  1  0.3  %
Other 3,210  2,691  519  19.3  %
Total noninterest expense 31,963  32,865  (902) (2.7) %
Net intersegment noninterest income (expense) 155  137  18  13.1  %
Operating income (loss) $ 26,374  $ 30,285  $ (3,911) (12.9) %
Our Banking segment’s operating income decreased $3.9 million, or 12.9%.
Interest income decreased $2.0 million, or 3.1%, at our Banking segment primarily as a result of decreased yields at our Banking segment in spite of increased average balances of interest earning assets. More specifically, average loans in our Banking segment, excluding intersegment loans, increased 11.4% from $3.036 billion for the three months ended June 30, 2024 to $3.382 billion for the three months ended June 30, 2025; however, this increase was more than offset by decreased yields. Intersegment interest income allocated to our Banking segment decreased period over period due to increased funding provided by our Payments segment resulting in increased intersegment interest allocation to such segment. The decrease in intersegment interest income allocated to our Banking segment was also a result of decreased intercompany borrowing rates charged to our Factoring segment driven by decreases in rates in the macroeconomy.
Interest expense increased $2.1 million, or 12.6%, primarily driven by higher average interest-bearing liabilities which increased in total period over period, including average total interest bearing deposits which increased $135.4 million, or 5.1%. The increase in interest expense was partially offset by decreased rates on our interest bearing liabilities. Further, our Banking segment experienced an increased usage of higher-priced brokered time deposits period over period.
Credit loss expense at our Banking segment is made up of credit loss expense related to loans and credit loss expense related to off balance sheet commitments to lend. Credit loss expense related to loans was $2.3 million for the three months ended June 30, 2025 compared to credit loss expense on loans of $1.9 million for the three months ended June 30, 2024. The increase in credit loss expense was the result of increased specific reserves and an increase driven by changes in the volume and mix of our Banking segment's loan portfolio period over period. Such increases were partially offset by a decrease driven by changes to the projected loss drivers and prepayment speeds that the Company forecasted over the reasonable and supportable forecast periods and a decrease driven by a decrease in net charge-offs period over period.
Credit loss expense for off balance sheet credit exposures decreased $0.2 million, from $0.1 million of credit loss expense for the three months ended June 30, 2024 to a benefit of $0.1 million for the three months ended June 30, 2025, primarily due to changes to outstanding commitments to fund and changes to assumed loss rates period over period.
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Noninterest income at our Banking segment increased period over period due to a $0.8 million increase in fee income and a $0.4 million increase in bank owned life insurance income period over period. These increases were partially offset by a $0.5 million decrease in gain on sale of equity securities. There were no other significant changes in the components of noninterest income at our Banking segment period over period.
Noninterest expense at our Banking segment decreased period over period the details of which are illustrated in the table above.
Year to date, our aggregate outstanding balances for our banking products, excluding intercompany loans, has increased $208.9 million, or 6.3%, to $3.549 billion as of June 30, 2025. The following table sets forth our banking loans:
(Dollars in thousands) June 30,
2025		 December 31,
2024		 $ Change % Change
Banking
Commercial real estate $ 754,509  $ 777,689  $ (23,180) (3.0) %
Construction, land development, land 221,419  203,804  17,615  8.6  %
1-4 family residential 172,312  154,020  18,292  11.9  %
Farmland 44,069  56,366  (12,297) (21.8) %
Commercial - General 298,653  285,469  13,184  4.6  %
Commercial - Agriculture 48,107  49,365  (1,258) (2.5) %
Commercial - Equipment 543,062  511,855  31,207  6.1  %
Commercial - Asset-based lending 192,793  205,353  (12,560) (6.1) %
Commercial - Liquid Credit 47,061  65,053  (17,992) (27.7) %
Consumer 17,520  8,000  9,520  119.0  %
Mortgage Warehouse 1,209,695  1,023,326  186,369  18.2  %
Total banking loans $ 3,549,200  $ 3,340,300  $ 208,900  6.3  %
Factoring
(Dollars in thousands) Three Months Ended June 30,
Factoring 2025 2024 $ Change % Change
Total interest income $ 38,040  $ 34,307  $ 3,733  10.9  %
Intersegment interest allocations (9,282) (9,198) (84) (0.9) %
Total interest expense 2  —  2  100.0  %
Net interest income (expense) 28,756  25,109  3,647  14.5  %
Credit loss expense (benefit) (2,916) 2,176  (5,092) (234.0) %
Net interest income (expense) after credit loss expense 31,672  22,933  8,739  38.1  %
Noninterest income 1,811  2,016  (205) (10.2) %
Noninterest expense:
Salaries and employee benefits 13,444  12,863  581  4.5  %
Depreciation 468  546  (78) (14.3) %
Other occupancy, furniture and equipment 508  544  (36) (6.6) %
FDIC insurance and other regulatory assessments —  —  —  —  %
Professional fees (7,272) 1,453  (8,725) (600.5) %
Amortization of intangible assets 193  362  (169) (46.7) %
Advertising and promotion 223  229  (6) (2.6) %
Communications and technology 2,438  2,984  (546) (18.3) %
Software amortization 1,125  584  541  92.6  %
Travel and entertainment 245  255  (10) (3.9) %
Other 2,770  875  1,895  216.6  %
Total noninterest expense 14,142  20,695  (6,553) (31.7) %
Net intersegment noninterest income (expense) 413  373  40  10.7  %
Net income (loss) before income tax expense $ 19,754  $ 4,627  $ 15,127  326.9  %
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Three Months Ended June 30,
2025 2024
Factored receivable period end balance $ 1,174,830,000  $ 1,035,159,000 
Commercial loans period end balance $ 2,593,000  $ — 
Yield on average receivable balance(1)
 13.40  % 14.14  %
Current quarter charge-off rate(2)
 (0.19) % 0.15  %
Factored receivables - transportation concentration 96  % 97  %
Interest income, including fees $ 38,040,000  $ 34,307,000 
Non-interest income 1,811,000  2,016,000 
Intersegment noninterest income 910,000  750,000 
Factored receivable total revenue 40,761,000  37,073,000 
Average net funds employed 1,065,073,000  873,355,000 
Yield on average net funds employed(1)
 15.35  % 17.07  %
Operating income (loss) $ 19,754,000  $ 4,627,000 
Factoring total revenue $ 40,761,000  $ 37,073,000 
Operating margin(1)
 48.46  % 12.48  %
Accounts receivable purchased $ 2,873,659,000  $ 2,542,327,000 
Number of invoices purchased 1,697,851  1,432,366 
Average invoice size $ 1,693  $ 1,775 
Average invoice size - transportation $ 1,663  $ 1,738 
Average invoice size - non-transportation $ 3,638  $ 4,561 
(1)Operating margin is a non-GAAP financial measure used as a supplemental measure to evaluate the performance of our Factoring segment. It provides meaningful supplemental information regarding the segment's operational performance and enhances investors' overall understanding of the Factoring segment's profitability and operational efficiency. For the three months ended June 30, 2025, operating income and factoring total revenue were impacted by $1.2 million of interest and fees resulting from the USPS Settlement and such settlement further impacted operating income by $7.4 million of legal expense accrual reversal and $3.8 million of recovery of factoring balances charged off in a prior period. Operating income was also impacted by a $2.0 million legal settlement that was unrelated to the USPS Settlement. Such items had a 24.71% impact on operating margin, a 0.43% impact on yield on average receivables, and a 0.46% impact on yield on average net funds employed for the three months ended June 30, 2025.
(2)The current quarter charge-off rate for the three months ended June 30, 2025 reflects a $3.8 million recovery of factoring balances charged off in a prior period. Such recovery impacted the current quarter charge-off rate for that period by (0.33%).
Our Factoring segment’s operating income increased $15.1 million, or 326.9%.
Our average invoice size decreased 4.6% from $1,775 for the three months ended June 30, 2024 to $1,693 for the three months ended June 30, 2025. This decrease is the result of a broad drop in transportation invoice prices across the industry as well as a change in mix as we add more short-haul fleets to our factoring purchases. That said, the number of invoices purchased increased 18.5% period over period.
Net interest income at our Factoring segment increased period over period. Overall average net funds employed (“NFE”) increased 22.0% during the three months ended June 30, 2025 compared to the same period in 2024. The increase in average NFE was the result of increased invoice purchase volume in the face of decreased average invoice sizes. See further discussion under the Recent Developments: Trucking Transportation section. We maintained a high concentration in transportation factoring balances, which typically generate a higher yield than our non-transportation factoring balances. This concentration was at 96% at June 30, 2025 and 97% at June 30, 2024. Net interest income at our Factoring segment was also impacted by a relatively flat intersegment interest allocation charge period over period driven by decreased rates in the macroeconomy offset by higher average balances at our Factoring segment.
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Credit loss expense at our Factoring segment is made up of credit loss expense related to factored receivables and loans at our Factoring segment as well as credit loss expense related to off balance sheet commitments to lend. Credit loss expense related to factored receivables and loans was a benefit of $2.9 million for the three months ended June 30, 2025 compared to credit loss expense on factored receivables of $2.2 million for the three months ended June 30, 2024. The decrease in credit loss expense on factored receivables and loans was driven by decreased net charge-offs period over period including the $3.8 million recovery resulting from the USPS settlement. The decrease was also driven by a decrease in required specific reserves. These decreases were partially offset by increases to the ACL driven by changes in volume and mix of the portfolio period over period and changes in loss assumptions period over period. We experienced no credit loss expense for off balance sheet credit exposures during the three months ended June 30, 2024 and June 30, 2025 as there were no such commitments to lend at that time.
Noninterest income at our Factoring segment decreased slightly period over period with no significant variances in its components period over period.
Noninterest expense at our Factoring segment decreased period over period the details of which are illustrated in the table above. For the three months ended June 30, 2025, professional fees, a component of noninterest expense, at our Factoring segment reflect a $7.4 million recovery of previously expensed legal fees associated with the USPS Settlement. Other noninterest expense at our Factoring segment reflects a $2.0 million expense driven by settlement of litigation unrelated to the USPS Settlement for the three months ended June 30, 2025.
Payments
(Dollars in thousands) Three Months Ended June 30,
Payments 2025 2024 $ Change % Change
Total interest income $ 6,230  $ 5,721  $ 509  8.9  %
Intersegment interest allocations 2,896  2,010  886  44.1  %
Total interest expense —  —  —  —  %
Net interest income (expense) 9,126  7,731  1,395  18.0  %
Credit loss expense (benefit) 92  (9) 101  1122.2  %
Net interest income after credit loss expense 9,034  7,740  1,294  16.7  %
Noninterest income 7,724  5,867  1,857  31.7  %
Noninterest expense:
Salaries and employee benefits 8,711  9,224  (513) (5.6) %
Depreciation 222  263  (41) (15.6) %
Other occupancy, furniture and equipment 163  172  (9) (5.2) %
FDIC insurance and other regulatory assessments —  —  —  —  %
Professional fees 240  658  (418) (63.5) %
Amortization of intangible assets 1,418  1,687  (269) (15.9) %
Advertising and promotion 669  509  160  31.4  %
Communications and technology 2,455  2,717  (262) (9.6) %
Software amortization 1,413  580  833  143.6  %
Travel and entertainment 456  416  40  9.6  %
Other 1,097  844  253  30.0  %
Total noninterest expense 16,844  17,070  (226) (1.3) %
Net intersegment noninterest income (expense) (568) (510) (58) (11.4) %
Net income (loss) before income tax expense $ (654) $ (3,973) $ 3,319  83.5  %
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Three Months Ended June 30,
2025 2024
Supply chain financing factored receivables $ 152,054,000  $ 95,163,000 
QuickPay factored receivables 74,493,000  77,158,000 
Factored receivable period end balance $ 226,547,000  $ 172,321,000 
Supply chain finance interest income $ 3,412,000  $ 2,649,000 
QuickPay interest income 2,818,000  3,072,000 
Intersegment interest income 2,896,000  2,010,000 
Total interest income 9,126,000  7,731,000 
Broker noninterest income 6,443,000  4,392,000 
Factor noninterest income 993,000  1,296,000 
Other noninterest income 288,000  179,000 
Intersegment noninterest income 381,000  264,000 
Total noninterest income 8,105,000  6,131,000 
Total revenue $ 17,231,000  $ 13,862,000 
Credit loss expense (benefit) 92,000  (9,000)
Noninterest expense 16,844,000  17,070,000 
Intersegment noninterest expense 949,000  774,000 
Total expense $ 17,885,000  $ 17,835,000 
Operating income (loss) $ (654,000) $ (3,973,000)
Depreciation expense 222,000  263,000 
Software amortization expense 1,413,000  580,000 
Intangible amortization expense 1,418,000  1,687,000 
Earnings (losses) before interest, taxes, depreciation, and amortization $ 2,399,000  $ (1,443,000)
EBITDA margin(1)
 13.9  % (10.4) %
Number of invoices processed 8,500,565  6,062,779 
Amount of payments processed $ 10,081,206,000  $ 6,687,587,000 
Network invoice volume 1,004,603  701,768 
Network payment volume $ 1,579,662,000  $ 1,133,118,000 
(1)Earnings (losses) before interest, taxes, depreciation, and amortization ("EBITDA") and EBITDA margin (the ratio of EBITDA to total revenue) are non-GAAP financial measures used to provide meaningful supplemental information regarding the segment's operational performance and to enhance investors' overall understanding of such financial performance.
Our Payments segment's operating loss decreased $3.3 million, or 83.5%.
The number of invoices processed by our Payments segment increased 40.2% from 6,062,779 for the three months ended June 30, 2024 to 8,500,565 for the three months ended June 30, 2025, and the amount of payments processed increased 50.7% from $6.688 billion for the three months ended June 30, 2024 to $10.081 billion for the three months ended June 30, 2025.
A "network transaction" occurs when a fully integrated payor payments client receives an invoice from a fully integrated payee payments client. All network transactions are included in our payment processing volume above. These transactions are facilitated through our payments application programming interfaces ("APIs") with parties on both sides of the transaction using structured data; similar to how a credit card works at a point-of-sale terminal. The integrations largely automate the process and make it cheaper, faster and safer. During the three months ended June 30, 2025, we processed 1,004,603 network invoices representing a network payment volume of $1.580 billion. During the three months ended June 30, 2024, we processed 701,768 network invoices representing a network payment volume of $1.133 billion.
Net interest income increased due to increased average balance of interest earning assets at our Payments segment and increased intersegment interest allocation period over period. These increases were partially offset by decreased average rates at our Payments segment.
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Noninterest income increased due to a $1.8 million increase in payment and audit fees earned from our payments and audit business during the three months ended June 30, 2025 compared to the same period a year ago. There were no other significant changes in the components of noninterest income at our Payments segment period over period.
Noninterest expense at our Payments segment decreased period over period the details of which are illustrated in the table above.
The acquisition of HubTran during the year ended December 31, 2021 allowed us to create a fully integrated payments network for transportation; servicing Brokers and Factors. Prior to the HubTran acquisition, our payments platform already offered tools and services to increase automation, mitigate fraud, create back-office efficiency and improve the payment experience. Through the acquisition of HubTran, we created additional value through the enhancement of its presentment, audit, and payment capabilities for Shippers, third party logistics companies (i.e., Brokers) and their Carriers, and Factors. The acquisition of HubTran was a meaningful inflection point in the operations of our payments and audit business as our strategy shifted from a capital-intensive on-balance sheet product with a focus on interest income to an open-loop payments network for the trucking industry with an additional focus on fee revenue. It is for this reason that management believes that earnings before interest, taxes, depreciation, and amortization enhance investors' overall understanding of the financial performance of the Payments segment.
Intelligence
(Dollars in thousands) Three Months Ended June 30,
Intelligence 2025 2024
Total interest income $ —  $ — 
Intersegment interest allocations —  — 
Total interest expense —  — 
Net interest income (expense) —  — 
Credit loss expense (benefit) —  — 
Net interest income (expense) after credit loss expense —  — 
Other noninterest income 1,724  — 
Noninterest expense:
Salaries and employee benefits 3,234  — 
Depreciation 7  — 
Other occupancy, furniture and equipment 14  — 
FDIC insurance and other regulatory assessments —  — 
Professional fees 2,995  — 
Amortization of intangible assets 946  — 
Advertising and promotion 22  — 
Communications and technology 278  — 
Software amortization —  — 
Travel and entertainment 130  — 
Other 84  — 
Total noninterest expense 7,710  — 
Net income (loss) before income tax expense $ (5,986) $ — 
Our Intelligence segment's operating loss for the three months ended June 30, 2025 was $6.0 million. As previously disclosed, prior to the fourth quarter of 2024, the data intelligence line of business did not exist. Therefore, there are no comparative periods to discuss regarding our Intelligence segment. As illustrated in the table above, to date, the majority of the expense related to our Intelligence segment is salaries and benefits expense and professional fees. A majority of the professional fees recognized at our Intelligence segment during the three months ended June 30, 2025 relate to our acquisition of Greenscreens.
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Corporate and Other
(Dollars in thousands) Three Months Ended June 30,
Corporate and Other 2025 2024 $ Change % Change
Total interest income $ 80  $ 87  $ (7) (8.0) %
Intersegment interest allocations —  —  —  — 
Total interest expense 1,696  2,387  (691) (28.9) %
Net interest income (expense) (1,616) (2,300) 684  29.7  %
Credit loss expense (benefit) (97) 27  (124) (459.3) %
Net interest income (expense) after credit loss expense (1,519) (2,327) 808  34.7  %
Other noninterest income 136  1,685  (1,549) (91.9) %
Noninterest expense:
Salaries and employee benefits 18,492  17,185  1,307  7.6  %
Depreciation 1,602  1,469  133  9.1  %
Other occupancy, furniture and equipment 1,603  1,733  (130) (7.5) %
FDIC insurance and other regulatory assessments —  —  —  —  %
Professional fees 1,916  825  1,091  132.2  %
Amortization of intangible assets 458  213  245  115.0  %
Advertising and promotion 367  403  (36) (8.9) %
Communications and technology 1,887  3,102  (1,215) (39.2) %
Software amortization 327  136  191  140.4  %
Travel and entertainment 482  537  (55) (10.2) %
Other 3,047  1,110  1,937  174.5  %
Total noninterest expense 30,181  26,713  3,468  13.0  %
Net income (loss) before income tax expense $ (31,564) $ (27,355) $ (4,209) (15.4) %
Corporate and other is not a reportable segment, but rather includes certain revenue and expense from the Company's holding company as well as activities not allocated to specific business segments. Corporate and other reported an operating loss of $31.6 million for the three months ended June 30, 2025 compared to an operating loss of $27.4 million for the three months ended June 30, 2024.
The increased operating loss was driven by increased noninterest expense which was the result of a $1.3 million increase in salaries and benefits expense. Further, Corporate experienced a $1.1 million increase in professional fees and a $1.9 million increase in other noninterest expense driven by $1.8 million of current period lease termination payments related to the building we acquired during March 2024. Noninterest income at our Corporate segment decreased primarily due to a $1.4 million decrease in rental income from the same property. Additionally, Corporate experienced a $0.7 million decrease in interest expense period over period as a result of decreased average borrowings.
Results of Operations
Six months ended June 30, 2025 compared with six months ended June 30, 2024
Net Income
We earned net income of $4.4 million for the six months ended June 30, 2025 compared to $6.9 million for the six months ended June 30, 2024, a decrease of $2.5 million or 35.7%.
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Six Months Ended June 30, 2025
(Dollars in thousands, except per share amounts) 2025 2024 $ Change % Change
Interest income $ 211,471  $ 208,962  $ 2,509  1.2  %
Interest expense 38,410  35,012  3,398  9.7  %
Net interest income 173,061  173,950  (889) (0.5) %
Credit loss expense (benefit) 628  10,051  (9,423) (93.8) %
Net interest income after credit loss expense (benefit) 172,433  163,899  8,534  5.2  %
Noninterest income 36,574  32,166  4,408  13.7  %
Noninterest expense 201,013  187,714  13,299  7.1  %
Net income (loss) before income taxes 7,994  8,351  (357) (4.3) %
Income tax expense (benefit) 3,557  1,446  2,111  146.0  %
Net income (loss) $ 4,437  $ 6,905  $ (2,468) (35.7) %
Details of the changes in the various components of net income are further discussed below.
Net Interest Income
Our operating results depend primarily on our net interest income, which is the difference between interest income on interest earning assets, including loans and securities, and interest expense incurred on interest bearing liabilities, including deposits and other borrowed funds. Interest rate fluctuations, as well as changes in the amount and type of interest earning assets and interest bearing liabilities, combine to affect net interest income. Our net interest income is affected by changes in the amount and mix of interest earning assets and interest bearing liabilities, referred to as a “volume change.” It is also affected by changes in yields earned on interest earning assets and rates paid on interest bearing liabilities, referred to as a “rate change.”
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The following table presents the distribution of average assets, liabilities and equity, as well as interest income and fees earned on average interest earning assets and interest expense paid on average interest bearing liabilities. Average balances and interest are inclusive of assets and deposits classified as held for sale.
Six Months Ended June 30,
2025 2024
(Dollars in thousands) Average
Balance		 Interest
Average
Rate(4)
 Average
Balance		 Interest
Average
Rate(4)
Interest earning assets:
Cash and cash equivalents $ 390,146  $ 8,624  4.46  % $ 412,228  $ 11,233  5.48  %
Taxable securities 394,247  10,997  5.62  % 325,165  10,828  6.70  %
Tax-exempt securities 2,541  32  2.54  % 3,330  46  2.78  %
FHLB and other restricted stock 15,833  495  6.30  % 10,624  466  8.82  %
Loans (1)
 4,599,176  191,323  8.39  % 4,120,518  186,389  9.10  %
Total interest earning assets 5,401,943  211,471  7.89  % 4,871,865  208,962  8.63  %
Noninterest earning assets:
Cash and cash equivalents 74,069  83,369 
Other noninterest earning assets 705,537  589,829 
Total assets $ 6,181,549  $ 5,545,063 
Interest bearing liabilities:
Deposits:
Interest bearing demand $ 727,873  $ 1,769  0.49  % $ 740,223  $ 2,015  0.55  %
Individual retirement accounts 42,399  265  1.26  % 50,675  338  1.34  %
Money market 598,763  7,811  2.63  % 567,604  8,067  2.86  %
Savings 518,879  2,722  1.06  % 537,551  2,802  1.05  %
Certificates of deposit 228,480  3,041  2.68  % 260,427  3,810  2.94  %
Brokered time deposits 591,808  13,038  4.44  % 358,807  9,438  5.29  %
Other brokered deposits 56,810  1,256  4.46  % 44,528  1,202  5.43  %
Total interest bearing deposits 2,765,012  29,902  2.18  % 2,559,815  27,672  2.17  %
Federal Home Loan Bank advances 231,519  5,136  4.47  % 92,088  2,545  5.56  %
Subordinated notes 69,721  1,343  3.88  % 108,804  2,449  4.53  %
Junior subordinated debentures 42,509  2,029  9.63  % 41,875  2,346  11.27  %
Other borrowings —  —  —  % —  —  —  %
Total interest bearing liabilities 3,108,761  38,410  2.49  % 2,802,582  35,012  2.51  %
Noninterest bearing liabilities and equity:
Noninterest bearing demand deposits 2,086,412  1,782,257 
Other liabilities 80,123  80,199 
Total equity 906,253  880,025 
Total liabilities and equity $ 6,181,549  $ 5,545,063 
Net interest income $ 173,061  $ 173,950 
Interest spread (2)
 5.40  % 6.12  %
Net interest margin (3)
 6.46  % 7.18  %
(1)Balance totals include respective nonaccrual assets.
(2)Net interest spread is the yield on average interest earning assets less the rate on interest bearing liabilities.
(3)Net interest margin is the ratio of net interest income to average interest earning assets.
(4)Ratios have been annualized.
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The following table presents loan yields earned on our loan portfolios:
Six Months Ended June 30,
2025 2024
(Dollars in thousands) Average
Balance		 Interest Average Rate Average
Balance		 Interest Average Rate
Banking $ 3,310,204  $ 108,360  6.60  % $ 2,984,129  $ 108,452  7.31  %
Factoring 1,099,854  71,371  13.09  % 959,251  67,059  14.06  %
Payments 189,118  11,593  12.36  % 177,138  10,878  12.35  %
Total loans $ 4,599,176  $ 191,324  8.39  % $ 4,120,518  $ 186,389  9.10  %
We earned net interest income of $173.1 million for the six months ended June 30, 2025 compared to $174.0 million for the six months ended June 30, 2024, a decrease of $0.9 million, or 0.5%, primarily driven by the following factors.
Interest income increased $2.5 million, or 1.2%, due to changes in average interest earning assets which increased $530.1 million, or 10.9% including an increase in average total loans of $478.7 million, or 11.6%. The average balance of our higher yielding Factoring factored receivables increased $140.6 million, or 14.7%, and we experienced an increase in average Payments factored receivables. We experienced an increase in average Banking loans of $326.1 million, or 10.9% due to increases in the average balances of construction, land development, and land, residential real estate, consumer, and mortgage warehouse loans. Interest income from our Banking loans is impacted by our lower yielding mortgage warehouse lending product. The average mortgage warehouse lending balance was $1.003 billion for the six months ended June 30, 2025 compared to $657.8 million for the six months ended June 30, 2024.
Interest expense increased $3.4 million, or 9.7%, primarily driven by higher average interest-bearing liabilities which increased in total period over period, including average total interest bearing deposits which increased $205.2 million, or 8.0%. The increase in interest expense was partially offset by decreased rates on almost all of our interest bearing liabilities. Average noninterest bearing deposits grew $304.2 million.
Net interest margin decreased to 6.46% for the six months ended June 30, 2025 from 7.18% for the six months ended June 30, 2024, a decrease of 72 basis points, or 10.0%.
Our net interest margin was impacted by a decrease in yield on our interest earning assets of 74 basis points to 7.89% for the six months ended June 30, 2025. This decrease was primarily driven by lower yields on loans which decreased 71 basis points to 8.39% for the period. Yield on our Banking loans decreased 71 basis points period over period driving much of the decrease in the yield on our overall loan portfolio. Our yield on Factoring and Payments factored receivables also decreased period over period. That said, our higher yielding Factoring and Payments factored receivables as a percentage of the total loan portfolio increased period over period which had an upward impact on our overall loan yield. Non-loan yields were lower across the board period over period.
The decrease in our net interest margin was also impacted by a decrease in our average cost of interest bearing liabilities of 2 basis points. This decrease in average cost was caused by decreased rates across our interest bearing liabilities period over period.
Our mortgage warehouse business has nearly self-funded for several quarters due to the servicing deposits of its customers. The average balance of such deposits was $713.7 million for the six months ended June 30, 2025. These deposits are noninterest bearing deposits on our balance sheet. Despite their classification, many of these deposits are not truly free of cost as our clients are compensated for these balances in the form of an earnings interest rebate rather than deposit interest. As a result, such noninterest bearing deposits decrease our loan yield rather than increase our deposit rates. It is important to note that our net interest margin is not affected by this arrangement. During the six months ended June 30, 2025, these deposits decreased our overall yield on loans by 55 bps and our overall cost of deposits and cost of funds would have been 52 bps and 49 bps higher, respectively.

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The following table shows the effects that changes in average balances (volume) and average interest rates (rate) had on the interest earned on our interest earning assets and the interest incurred on our interest bearing liabilities:
Six Months Ended
June 30, 2025 vs. 2024
Increase (Decrease) Due to: Net Increase
(Dollars in thousands) Rate Volume
Interest earning assets:
Cash and cash equivalents $ (2,121) $ (488) $ (2,609)
Taxable securities (1,758) 1,927  169 
Tax-exempt securities (4) (10) (14)
FHLB and other restricted stock (134) 163  29 
Loans (14,978) 19,912  4,934 
Total interest income (18,995) 21,504  2,509 
Interest bearing liabilities:
Interest bearing demand (216) (30) (246)
Individual retirement accounts (21) (52) (73)
Money market (662) 406  (256)
Savings 18  (98) (80)
Certificates of deposit (344) (425) (769)
Brokered time deposits (1,533) 5,133  3,600 
Other brokered deposits (218) 272  54 
Total interest bearing deposits (2,976) 5,206  2,230 
Federal Home Loan Bank advances (502) 3,093  2,591 
Subordinated notes (353) (753) (1,106)
Junior subordinated debentures (347) 30  (317)
Other borrowings —  —  — 
Total interest expense (4,178) 7,576  3,398 
Change in net interest income $ (14,817) $ 13,928  $ (889)
Credit Loss Expense
Credit loss expense is the amount of expense that, based on our judgment, is required to maintain the allowances for credit losses (“ACL”) at an appropriate level under the current expected credit loss model. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity. Refer to Note 1 of the Company’s 2024 Form 10-K for detailed discussion regarding ACL methodologies for available for sale debt securities, held to maturity securities and loans held for investment.
The following table presents the major categories of credit loss expense:
Six Months Ended June 30,
(Dollars in thousands) 2025 2024 $ Change % Change
Credit loss expense on loans $ 798  $ 8,977  $ (8,179) (91.1) %
Credit loss expense on off balance sheet credit exposures (218) 1,102  (1,320) (119.8) %
Credit loss expense on held to maturity securities 48  (28) 76  271.4  %
Credit loss expense on available for sale securities —  —  —  — 
Total credit loss expense $ 628  $ 10,051  $ (9,423) (93.8) %
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For available for sale debt securities in an unrealized loss position, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense. At December 31, 2024 and June 30, 2025, the Company determined that all impaired available for sale securities experienced a decline in fair value below the amortized cost basis due to noncredit-related factors. Therefore, the Company carried no ACL at those respective dates and there was no credit loss expense recognized by the Company during the six months ended June 30, 2025. The same was true for the same period in the prior year.
The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type. At June 30, 2025 and December 31, 2024, the Company’s held to maturity securities consisted investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. At June 30, 2025 and December 31, 2024, the Company carried $3.2 million and $5.4 million of these HTM securities at amortized cost, respectively. The ACL on these balances was $1.4 million at June 30, 2025 and $3.5 million at December 31, 2024. During the six months ended June 30, 2025, the Company charged off one of its three investments in these CLO funds in the amount of $2.2 million. The charge-off was fully reserved in a prior period and as a result, there was no impact to credit loss expense during the six months ended June 30, 2025. We recognized credit loss expense of $48 thousand during the six months ended June 30, 2025. During the six months ended June 30, 2024, we recognized a benefit to credit loss expense of $28 thousand. None of the overcollateralization triggers tied to the CLO securities were tripped as of June 30, 2025. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call.
Our ACL on loans was $38.7 million as of June 30, 2025, compared to $40.7 million as of December 31, 2024, representing an ACL to total loans ratio of 0.78% and 0.90% respectively.
Our credit loss expense on loans decreased $8.2 million, or 91.1%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
During the six months ended June 30, 2025, the Company acquired a $23.4 million nonperforming loan for $3.3 million. The loan was purchased credit deteriorated ("PCD") and therefore, a $10.8 million ACL was established on Day 1 resulting in a discount of $9.3 million. Prior to June 30, 2025, the Company determined that the $10.8 million ACL was uncollectible and charged off the entire amount. Such charge-off had no impact on credit loss expense.
The decrease in credit loss expense was primarily driven by a decrease in required specific reserves. Such specific reserves decreased $4.1 million during the six months ended June 30, 2025 compared to an increase in specific reserves of $1.4 million during the same period a year ago. The decrease in credit loss expense was also driven by net charge-off activity. Excluding the $10.8 million charge-off on the acquired PCD loan which had no impact on credit loss expense, we had a net charge-offs of $2.8 million during the six months ended June 30, 2025 compared to net charge-offs of $4.6 million during the same period a year ago. Such net charge-offs for the six months ended June 20, 2025 includes the aforementioned $3.8 million recovery resulting from the USPS Settlement. Changes to projected loss drivers and prepayment speeds that the Company forecasted over the reasonable and supportable forecast periods to calculate expected losses resulted in $0.3 million of credit loss expense during the six months ended June 30, 2025 compared to $2.0 million of credit loss expense during the same period a year ago.
The decrease in credit loss expense was partially offset by changes in volume and mix of the loan portfolio which resulted in credit loss expense of $1.8 million during the six months ended June 30, 2025 compared to $1.0 million of credit loss expense during the same period a year ago.
Credit loss expense for off balance sheet credit exposures decreased $1.3 million, primarily due to changes to outstanding commitments to fund and assumed loss rates period over period.
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Noninterest Income
The following table presents our major categories of noninterest income:
Six Months Ended June 30,
(Dollars in thousands) 2025 2024 $ Change % Change
Service charges on deposits $ 3,338  $ 3,537  $ (199) (5.6  %)
Card income 3,719  3,953  (234) (5.9  %)
Net gains (losses) on sale of loans 324  (69) 393  569.6  %
Fee income 21,869  17,200  4,669  27.1  %
Insurance commissions 2,532  3,073  (541) (17.6  %)
Other 4,792  4,472  320  7.2  %
Total noninterest income $ 36,574  $ 32,166  $ 4,408  13.7  %
Noninterest income increased $4.4 million, or 13.7%. Changes in selected components of noninterest income in the above table are discussed below.
•Fee income. Fee income increased $4.7 million, or 27.1% due to a $2.9 million increase in fee income from our Payments segment, a $1.9 million increase in fee income from our Intelligence segment mostly driven by the acquisition of Greenscreens during the three months ended June 30, 2025, and a $0.8 million increase in fee income from insurance services period over period.
•Insurance commissions. Insurance commissions decreased $0.5 million, or 17.6%, due to lower volumes of processed policies.
•Other. Other noninterest income increased $0.3 million, or 7.2% primarily due to a $0.8 million increase in BOLI income and a $0.6 million increase in gain on sale of business assets period over period. These increases were partially offset by a $0.5 million gain on sale of equity securities during the six months ended June 30, 2024 that did not repeat during the current period and a $0.3 million gain on a revenue share asset for the six months ended June 30, 2025 compared to a $0.9 million gain for the same period a year ago. We also experienced a $0.5 million decrease in rental income generated by the property purchased by the Company during late March of 2024 period over period.
Noninterest Expense
The following table presents our major categories of noninterest expense:
Six Months Ended June 30,
(Dollars in thousands) 2025 2024 $ Change % Change
Salaries and employee benefits $ 118,600  $ 110,190  $ 8,410  7.6  %
Occupancy, furniture and equipment 16,581  16,201  380  2.3  %
FDIC insurance and other regulatory assessments 1,621  1,294  327  25.3  %
Professional fees 5,744  8,099  (2,355) (29.1  %)
Amortization of intangible assets 5,800  5,593  207  3.7  %
Advertising and promotion 3,302  3,222  80  2.5  %
Communications and technology 24,559  26,201  (1,642) (6.3  %)
Software amortization 4,857  2,531  2,326  91.9  %
Travel and entertainment 3,111  3,022  89  2.9  %
Other 16,838  11,361  5,477  48.2  %
Total noninterest expense $ 201,013  $ 187,714  $ 13,299  7.1  %
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Noninterest expense increased $13.3 million, or 7.1%. Details of the more significant changes in the various components of noninterest expense are further discussed below.
•Salaries and Employee Benefits. Salaries and employee benefits expenses increased $8.4 million, or 7.6%. Employee salaries and payroll tax expense increased $6.2 million and $0.2 million, respectively. The size of our workforce increased period over period due to organic growth within the Company. Our average full-time equivalent employees were 1,561.8 and 1,544.7 for the six months ended June 30, 2025 and 2024, respectively. Bonus expense increased $0.9 million, commissions expense increased $0.8 million, and temporary labor expense increased $0.1 million period over period. Employee benefits expense such as 401(k) matching, employee insurance, and stock based compensation paid to employees increased $0.2 million.
•Professional Fees. Professional fees decreased $2.4 million, or 29.1%, primarily due to the recovery of $6.5 million of previously expensed legal fees through the USPS Settlement during the six months ended June 30, 2025. This decrease was partially offset by $4.0 million of professional fees incurred during the six months ended June 30, 2025 as a result of the Greenscreens acquisition.
•Communications and Technology. Communications and technology expenses decreased $1.6 million, or 6.3%, primarily due to decreased IT professional services fees.
•Software amortization. Software amortization increased $2.3 million, or 91.9%, primarily due to additional software assets coming on line during late 2024 and early 2025.
•Other. Other noninterest expense includes loan-related expenses, training and recruiting, postage, insurance, and subscription services. Other noninterest expense increased $5.4 million, or 48.2% primarily due to a $2.0 million settlement of litigation (unrelated to the USPS Settlement) during the six months ended June 30, 2025, $2.4 million of current period lease termination payments related to the building we acquired during March 2024, and an increase of $0.7 million in loan-related expenses period over period. There were no other significant variances in other noninterest expense period over period.
Income Taxes
The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income and the effect of changes in valuation allowances maintained against deferred tax benefits.
Income tax expense increased $2.1 million, or 146.0%, from $1.4 million for the six months ended June 30, 2024 to $3.6 million for the six months ended June 30, 2025. The effective tax rate was 44% for the six months ended June 30, 2025 and 17% for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025 was impacted by limited restricted stock stock-based compensation deductibility, higher state tax rates, and higher disallowed expenses including some transaction costs paid in connection with the Greenscreens acquisition. The effective tax rate for the six months ended June 30, 2024 was impacted by an adjustment to our disallowance related to highly compensated individuals.
Operating Segment Results
Our reportable segments are Banking, Factoring, Payments, and Intelligence, which have been determined based upon their business processes and economic characteristics. This determination also gave consideration to the structure and management of various product lines. The Banking segment includes the community banking products and services offered through TBK Bank. Our Banking segment derives its revenue principally from investments in interest earning assets as well as noninterest income typical for the banking industry. The Factoring segment derives its revenue from factoring services. The Payments segment includes the operations of TBK Bank's presentment, audit, and payment solutions to Shipper, Broker, and Factor clients in the trucking industry. The Payments segment derives its revenue from transaction fees and interest income on factored receivables related to invoice payments. These factored receivables consist of both invoices where we offer a Carrier a quickpay opportunity to receive payment at a discount in advance of the standard payment term for such invoice in exchange for the assignment of such invoice to us and from offering Brokers the ability to settle their invoices with us on an extended term following our payment to their Carriers as an additional liquidity option for such Brokers. Our data intelligence segment was launched at the beginning of the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of the assets Isometric Technologies Inc., a company that provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry. The operations of this segment were further supplemented with our acquisition of Greenscreens AI, Inc., a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights, during the quarter ended June 30, 2025. The revenue for Intelligence offerings is derived through access and subscription fees, as well as seat licenses where applicable. Prior to the fourth quarter of 2024, there were no individuals allocated specifically to our data intelligence segment and an explicit data intelligence segment did not exist.
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Therefore, revision of prior period segment operating results is not applicable.
Prior to September 30, 2024, the Company disclosed Corporate as a reportable segment. The Company has determined that what was previously deemed the Corporate reportable segment consists of other business activities that do not represent a reportable segment, but rather, such activities belong in a Corporate and Other category as reported in the tabular disclosure below. It should be noted that such restructuring of the tabular disclosure did not result in any changes to the Company's revenue and expense allocation methodology described below. The Company restructured prior period tabular disclosures to achieve appropriate comparability.
Expenses that are directly attributable to the Company's Banking, Factoring, Payments, and Intelligence segments such as, but not limited to, occupancy, salaries and benefits to employees that are fully dedicated to the segment, and certain technology costs that can be attributed to specific users or functional areas within the segment are allocated as such. The Company continues to make considerable investments in shared services that benefit the entire organization and these expenses are allocated to the Corporate and Other category. The Company allocates such expenses to the Corporate and Other category in order for the Company's chief operating decision maker and investors to have clear visibility into the operating performance of each reportable segment.
We allocate intersegment interest expense to the Factoring and Payments segments based on one-month term SOFR for their funding needs. When the Payments segment is self-funded, with customer deposit funding in excess of its factored receivables, intersegment interest income is allocated based on the Federal Funds effective rate. Management believes that such intersegment interest allocations appropriately reflect the current interest rate environment and the relatively quick turn of the underlying receivables.
Reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. Changes in management structure or allocation methodologies and procedures may result in future changes to previously reported segment financial data. The accounting policies of the segments are substantially the same as those described in the “Summary of Significant Accounting Policies” in Note 1 of the Company’s 2024 Form 10-K.
Transactions between segments consist primarily of borrowed funds, payment network fees, and servicing fees. Intersegment interest expense is allocated to the Factoring and Payments segments as described above. Payment network fees are paid by the Factoring segment to the Payments segment for use of the payments network. Servicing fees are paid by the Payments segment to the Factoring segment for servicing factoring transactions with freight broker clients transferred from our Factoring segment to our Payments segment to align with the supply chain finance product offerings for this business. Beginning prospectively on January 1, 2024, the Factoring and Payments segments began paying fees to our Banking segment for the Banking segment's execution of various banking services that benefit those segments. Credit loss expense is allocated based on the segment’s ACL determination. Noninterest income and expense directly attributable to a segment are assigned to it with various shared service costs such as human resources, accounting, finance, risk management and information technology expense assigned to the Corporate and Other category if they are not directly attributable to a segment. Other segment expense consists of various loan and card related expenses and other insignificant miscellaneous costs not specifically reviewed by the Company's chief operating decision maker. Taxes are paid on a consolidated basis and are not allocated for segment purposes.
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The following tables present our primary operating results for our operating segments:
(Dollars in thousands) Total Corporate
Six Months Ended June 30, 2025 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 128,344  $ 71,371  $ 11,593  $ —  $ 211,308  $ 163  $ 211,471 
Intersegment interest allocations 11,121  (16,935) 5,814  —  —  —  — 
Total interest expense 35,036  2  —  —  35,038  3,372  38,410 
Net interest income (expense) 104,429  54,434  17,407  —  176,270  (3,209) 173,061 
Credit loss expense (benefit) 2,726  (2,356) 210  —  580  48  628 
Net interest income after credit loss expense 101,703  56,790  17,197  —  175,690  (3,257) 172,433 
Noninterest income 14,992  3,530  14,255  2,119  34,896  1,678  36,574 
Noninterest expense:
Salaries and employee benefits 32,318  26,666  18,324  4,718  82,026  36,574  118,600 
Depreciation 3,286  971  452  14  4,723  3,176  7,899 
Other occupancy, furniture and equipment 3,998  1,045  331  21  5,395  3,287  8,682 
FDIC insurance and other regulatory assessments 1,621  —  —  —  1,621  —  1,621 
Professional fees 2,866  (5,420) 446  3,946  1,838  3,906  5,744 
Amortization of intangible assets 770  386  2,969  1,062  5,187  613  5,800 
Advertising and promotion 1,068  477  1,050  52  2,647  655  3,302 
Communications and technology 10,272  4,712  4,924  505  20,413  4,146  24,559 
Software amortization 56  1,719  2,609  2  4,386  471  4,857 
Travel and entertainment 544  428  833  248  2,053  1,058  3,111 
Other 6,235  3,511  2,019  150  11,915  4,923  16,838 
Total noninterest expense 63,034  34,495  33,957  10,718  142,204  58,809  201,013 
Net intersegment noninterest income (expense)(2)
 292  848  (1,140) —  —  —  — 
Net income (loss) before income tax expense $ 53,953  $ 26,673  $ (3,645) $ (8,599) $ 68,382  $ (60,388) $ 7,994 
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(Dollars in thousands) Total Corporate
Six Months Ended June 30, 2024 Banking Factoring Payments Intelligence Segments
and Other(1)
 Consolidated
Total interest income $ 130,894  $ 67,059  $ 10,878  $ —  $ 208,831  $ 131  $ 208,962 
Intersegment interest allocations 13,932  (18,103) 4,171  —  —  —  — 
Total interest expense 30,217  —  —  —  30,217  4,795  35,012 
Net interest income (expense) 114,609  48,956  15,049  —  178,614  (4,664) 173,950 
Credit loss expense (benefit) 6,488  3,531  60  —  10,079  (28) 10,051 
Net interest income after credit loss expense 108,121  45,425  14,989  —  168,535  (4,636) 163,899 
Noninterest income 14,075  4,919  11,410  —  30,404  1,762  32,166 
Noninterest expense:
Salaries and employee benefits 33,542  25,124  18,355  —  77,021  33,169  110,190 
Depreciation 3,513  1,052  507  —  5,072  2,532  7,604 
Other occupancy, furniture and equipment 4,481  1,069  316  —  5,866  2,731  8,597 
FDIC insurance and other regulatory assessments 1,294  —  —  —  1,294  —  1,294 
Professional fees 2,296  2,056  1,451  —  5,803  2,296  8,099 
Amortization of intangible assets 1,225  766  3,389  —  5,380  213  5,593 
Advertising and promotion 1,204  475  869  —  2,548  674  3,222 
Communications and technology 10,487  5,282  4,800  —  20,569  5,632  26,201 
Software amortization 72  1,165  1,107  —  2,344  187  2,531 
Travel and entertainment 590  505  933  —  2,028  994  3,022 
Other 5,290  1,894  1,828  —  9,012  2,349  11,361 
Total noninterest expense 63,994  39,388  33,555  —  136,937  50,777  187,714 
Net intersegment noninterest income (expense)(2)
 258  762  (1,020) —  —  —  — 
Net income (loss) before income tax expense $ 58,460  $ 11,718  $ (8,176) $ —  $ 62,002  $ (53,651) $ 8,351 
(1) Includes revenue and expense from the Company’s holding company, which does not meet the definition of an operating segment. Also includes corporate shared service costs such as the majority of salaries and benefits expense for our executive leadership team, as well as other selling, general, and administrative shared services costs including human resources, accounting, finance, risk management and a significant amount of information technology expense.
(2) Net intersegment noninterest income (expense) includes:
(Dollars in thousands) Banking Factoring Payments
Six Months Ended June 30, 2025
Factoring revenue received from Payments $ —  $ 1,821  $ (1,821)
Payments revenue received from Factoring —  (753) 753 
Banking revenue received from Payments and Factoring $ 292  $ (220) $ (72)
Net intersegment noninterest income (expense) $ 292  $ 848  $ (1,140)
Six Months Ended June 30, 2024
Factoring revenue received from Payments $ —  $ 1,500  $ (1,500)
Payments revenue received from Factoring —  (529) 529 
Banking revenue received from Payments and Factoring $ 258  $ (209) $ (49)
Net intersegment noninterest income (expense) $ 258  $ 762  $ (1,020)
(Dollars in thousands) Total Corporate
June 30, 2025 Banking Factoring Payments Intelligence Segments and Other Eliminations Consolidated
Total assets $ 5,075,248  $ 1,240,792  $ 657,648  $ 118,292  $ 7,091,980  $ 673,102  $ (1,270,334) $ 6,494,748 
Gross loans $ 3,552,700  $ 1,177,423  $ 226,547  $ —  $ 4,956,670  $ —  $ (3,500) $ 4,953,170 
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(Dollars in thousands) Total Corporate
December 31, 2024 Banking Factoring Payments Intelligence Segments and Other Eliminations Consolidated
Total assets $ 5,443,452  $ 1,186,342  $ 590,063  $ 10,099  $ 7,229,956  $ 1,119,825  $ (2,400,806) $ 5,948,975 
Gross loans $ 3,944,146  $ 1,034,992  $ 171,668  $ —  $ 5,150,806  $ —  $ (603,846) $ 4,546,960 
Banking
(Dollars in thousands) Six Months Ended June 30,
Banking 2025 2024 $ Change % Change
Total interest income $ 128,344  $ 130,894  $ (2,550) (1.9  %)
Intersegment interest allocations 11,121  13,932  (2,811) (20.2  %)
Total interest expense 35,036  30,217  4,819  15.9  %
Net interest income 104,429  114,609  (10,180) (8.9  %)
Credit loss expense (benefit) 2,726  6,488  (3,762) (58.0  %)
Net interest income after credit loss expense 101,703  108,121  (6,418) (5.9  %)
Noninterest income 14,992  14,075  917  6.5  %
Noninterest expense:
Salaries and employee benefits 32,318  33,542  (1,224) (3.6  %)
Depreciation 3,286  3,513  (227) (6.5  %)
Other occupancy, furniture and equipment 3,998  4,481  (483) (10.8  %)
FDIC insurance and other regulatory assessments 1,621  1,294  327  25.3  %
Professional fees 2,866  2,296  570  24.8  %
Amortization of intangible assets 770  1,225  (455) (37.1  %)
Advertising and promotion 1,068  1,204  (136) (11.3  %)
Communications and technology 10,272  10,487  (215) (2.1  %)
Software amortization 56  72  (16) (22.2  %)
Travel and entertainment 544  590  (46) (7.8  %)
Other 6,235  5,290  945  17.9  %
Total noninterest expense 63,034  63,994  (960) (1.5  %)
Net intersegment noninterest income (expense) 292  258  34  13.2  %
Net income (loss) before income tax expense $ 53,953  $ 58,460  $ (4,507) (7.7  %)
Our Banking segment’s operating income decreased $4.5 million, or 7.7%.
Total interest income decreased $2.6 million, or 1.9%, at our Banking segment primarily as a result of decreased yields at our Banking segment in spite of increased average balances of interest earning assets. More specifically, average loans in our Banking segment, excluding intersegment loans, increased 10.9% from $2.984 billion for the six months ended June 30, 2024 to $3.310 billion for the six months ended June 30, 2025; however, this increase was more than offset by decreased yields. Intersegment interest income allocated to our Banking segment decreased period over period due to increased funding provided by our Payments segment resulting in increased intersegment interest allocation to such segment. The decrease in intersegment interest income allocated to our Banking segment was also a result of decreased intercompany borrowing rates charged to our Factoring segment driven by decreases in rates in the macroeconomy.
Interest expense increased $4.8 million, or 15.9% primarily due to higher higer average balances in our Banking interest bearing liabilities. Average total interest bearing deposits increased $205.2 million, or 8.0%. The increase in interest expense was partially offset by decreased rates on our interest bearing liabilities. Further, our Banking segment experienced an increased usage of higher-priced brokered time deposits period over period.
Credit loss expense at our Banking segment is made up of credit loss expense related to loans and credit loss expense related to off balance sheet commitments to lend. Credit loss expense related to loans was $2.9 million for the six months ended June 30, 2025 compared to $6.3 million for the six months ended June 30, 2024. The decrease in credit loss expense was the result of decreased required specific reserves, changes to the projected loss drivers and prepayment speeds that the Company forecasted over the reasonable and supportable forecast period, and a decrease driven by changes in the volume and mix of our loan portfolio at our Banking segment period over period. These decreases were partially offset by increased net charge-offs period over period.
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Credit loss expense for off balance sheet credit exposures decreased $0.4 million from credit loss expense of $0.2 million for the six months ended June 30, 2024 to a $0.2 million benefit to credit loss expense for the six months ended June 30, 2025, primarily due to changes to outstanding commitments to fund and assumed loss rates period over period.
Noninterest income at our Banking segment increased period over period due to a $0.7 million increase in fee income at our Banking segment and a $0.8 million increase in BOLI income at our Banking segment. These increases were partially offset by a $0.5 million decrease in gain on sale of equity securities and a $0.5 million decrease of insurance commissions at our Banking segment.
Noninterest expense at our Banking segment decreased period over period the details of which are illustrated in the table above.
During the six months ended June 30, 2025, the aggregate outstanding balances of our banking products increased $208.9 million, or 6.3%, to $3.549 billion as of June 30, 2025. See the Financial Condition section below for further discussion of changes in loan balances:
(Dollars in thousands) June 30,
2025		 December 31,
2024		 $ Change % Change
Banking
Commercial real estate $ 754,509  $ 777,689  $ (23,180) (3.0  %)
Construction, land development, land 221,419  203,804  17,615  8.6  %
1-4 family residential 172,312  154,020  18,292  11.9  %
Farmland 44,069  56,366  (12,297) (21.8  %)
Commercial - General 298,653  285,469  13,184  4.6  %
Commercial - Agriculture 48,107  49,365  (1,258) (2.5  %)
Commercial - Equipment 543,062  511,855  31,207  6.1  %
Commercial - Asset-based lending 192,793  205,353  (12,560) (6.1  %)
Commercial - Liquid Credit 47,061  65,053  (17,992) (27.7  %)
Consumer 17,520  8,000  9,520  119.0  %
Mortgage Warehouse 1,209,695  1,023,326  186,369  18.2  %
Total banking loans $ 3,549,200  $ 3,340,300  $ 208,900  6.3  %
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Factoring
(Dollars in thousands) Six Months Ended June 30,
Factoring 2025 2024 $ Change % Change
Total interest income $ 71,371  $ 67,059  $ 4,312  6.4  %
Intersegment interest allocations (16,935) (18,103) 1,168  6.5  %
Total interest expense 2  —  2  100.0  %
Net interest income 54,434  48,956  5,478  11.2  %
Credit loss expense (benefit) (2,356) 3,531  (5,887) (166.7  %)
Net interest income after credit loss expense 56,790  45,425  11,365  25.0  %
Noninterest income 3,530  4,919  (1,389) (28.2  %)
Noninterest expense:
Salaries and employee benefits 26,666  25,124  1,542  6.1  %
Depreciation 971  1,052  (81) (7.7  %)
Other occupancy, furniture and equipment 1,045  1,069  (24) (2.2  %)
FDIC insurance and other regulatory assessments —  —  —  —  %
Professional fees (5,420) 2,056  (7,476) (363.6  %)
Amortization of intangible assets 386  766  (380) (49.6  %)
Advertising and promotion 477  475  2  0.4  %
Communications and technology 4,712  5,282  (570) (10.8  %)
Software amortization 1,719  1,165  554  47.6  %
Travel and entertainment 428  505  (77) (15.2  %)
Other 3,511  1,894  1,617  85.4  %
Total noninterest expense 34,495  39,388  (4,893) (12.4  %)
Net intersegment noninterest income (expense) 848  762  86  11.3  %
Net income (loss) before income tax expense $ 26,673  $ 11,718  $ 14,955  127.6  %
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Six Months Ended June 30,
2025 2024
Factored receivable period end balance $ 1,174,830,000  $ 1,035,159,000 
Commercial loans period end balance $ 2,593,000  $ — 
Yield on average receivable balance 13.09  % 14.06  %
Year to date charge-off rate (0.09) % 0.27  %
Factored receivables - transportation concentration 96  % 97  %
Interest income, including fees $ 71,371,000  $ 67,059,000 
Noninterest income 3,530,000  4,919,000 
Intersegment noninterest income 1,821,000  1,500,000 
Factored receivable total revenue 76,722,000  73,478,000 
Average net funds employed 1,007,223,000  856,245,000 
Yield on average net funds employed 15.36  % 17.26  %
Operating income (loss) $ 26,673,000  $ 11,718,000 
Factoring total revenue $ 76,722,000  $ 73,478,000 
Operating margin(1)
 34.77  % 15.95  %
Accounts receivable purchased $ 5,581,464,000  $ 5,012,124,000 
Number of invoices purchased 3,195,495  2,799,991 
Average invoice size $ 1,747  $ 1,790 
Average invoice size - transportation $ 1,713  $ 1,754 
Average invoice size - non-transportation $ 3,830  $ 4,321 
(1)Operating margin is a non-GAAP financial measure used as a supplemental measure to evaluate the performance of our Factoring segment. It provides meaningful supplemental information regarding the segment's operational performance and enhances investors' overall understanding of the Factoring segment's profitability and operational efficiency. For the six months ended June 30, 2025, operating income and factoring total revenue were impacted by $1.2 million of interest and fees resulting from the USPS Settlement and such settlement further impacted operating income by $6.5 million of legal expense accrual reversal and $3.8 million of recovery of factoring balances charged off in a prior period. Operating income was also impacted by a $2.0 million legal settlement that was unrelated to the USPS Settlement. Such items had a 12.00% impact on operating margin, a 0.23% impact on yield on average receivables, and a 0.24% impact on yield on average net funds employed for the six months ended June 30, 2025.
(2)The current quarter charge-off rate for the six months ended June 30, 2025 reflects a $3.8 million recovery of factoring balances charged off in a prior period. Such recovery impacted the current quarter charge-off rate for that period by (0.34%).
Our Factoring segment’s operating income increased $15.0 million, or 127.6%.
Our average invoice size decreased 2.4% from $1,790 for the six months ended June 30, 2024 to $1,747 for the six months ended June 30, 2025 This decrease is the result of a broad drop in transportation invoice prices across the industry as well as a change in mix as we add more short-haul fleets to our factoring purchases. The number of invoices purchased increased 14.1% period over period.
Net interest income at our Factoring segment increased period over period. Overall average net funds employed (“NFE”) increased 17.6% during the six months ended June 30, 2025 compared to the same period in 2024. The increase in average NFE was the result of increased invoice purchase volume in the face of decreased average invoice sizes. See further discussion under the Recent Developments: Trucking Transportation section. We maintained high concentration in transportation factoring balances, which typically generate a higher yield than our non-transportation factoring balances. This concentration, calculated based on receivables held for investment and held for sale, was at 97% at June 30, 2024 and 96% at June 30, 2025. Net interest income at our Factoring segment was also impacted by a decrease in its intersegment interest allocation charge period over period driven by lower intercompany rates consistent with lower rates in the broader macro economy.
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Credit loss expense at our Factoring segment is made up of credit loss expense related to factored receivables and loans at our Factoring segment as well as credit loss expense related to off balance sheet commitments to lend to the extent there are any such commitments. Credit loss expense related to factored receivables and loans was a benefit of $2.4 million for the six months ended June 30, 2025 compared to credit loss expense of $2.7 million for the six months ended June 30, 2024. The decrease in credit loss expense on factored receivables and loans was driven by decreased net charge-offs period over period including the $3.8 million recovery resulting from the USPS settlement. The decrease was also driven by a decrease in required specific reserves. These decreases were partially offset by increases to the ACL driven by changes in volume and mix of the portfolio period over period and changes in loss assumptions period over period. Credit loss expense for off balance sheet credit exposures was $0.9 million for the six months ended June 30, 2024 and $0 for the six months ended June 30, 2025 as there were no commitments to lend at the end of the current period.
The decrease in noninterest income at our Factoring segment was due to a $0.8 million decrease in early termination fees and a $0.6 million decrease in gains on our revenue share asset period over period. There were no other significant variances in noninterest income at our Factoring segment.
Noninterest expense at our Factoring segment decreased period over period the details of which are illustrated in the table above. For the six months ended June 30, 2025, professional fees, a component of noninterest expense, at our Factoring segment reflect a $6.5 million recovery of previously expensed legal fees associated with the USPS Settlement. Other noninterest expense at our Factoring segment reflects a $2.0 million expense driven by settlement of litigation unrelated to the USPS Settlement for the six months ended June 30, 2025.
Payments
(Dollars in thousands) Six Months Ended June 30,
Payments 2025 2024 $ Change % Change
Total interest income $ 11,593  $ 10,878  $ 715  6.6  %
Intersegment interest allocations 5,814  4,171  1,643  39.4  %
Total interest expense —  —  —  —  %
Net interest income 17,407  15,049  2,358  15.7  %
Credit loss expense (benefit) 210  60  150  250.0  %
Net interest income after credit loss expense 17,197  14,989  2,208  14.7  %
Noninterest income 14,255  11,410  2,845  24.9  %
Noninterest expense:
Salaries and employee benefits 18,324  18,355  (31) (0.2) %
Depreciation 452  507  (55) (10.8) %
Other occupancy, furniture and equipment 331  316  15  4.7  %
FDIC insurance and other regulatory assessments —  —  —  —  %
Professional fees 446  1,451  (1,005) (69.3) %
Amortization of intangible assets 2,969  3,389  (420) (12.4) %
Advertising and promotion 1,050  869  181  20.8  %
Communications and technology 4,924  4,800  124  2.6  %
Software amortization 2,609  1,107  1,502  135.7  %
Travel and entertainment 833  933  (100) (10.7) %
Other 2,019  1,828  191  10.4  %
Total noninterest expense 33,957  33,555  402  1.2  %
Net intersegment noninterest income (expense) (1,140) (1,020) (120) (11.8) %
Net income (loss) before income tax expense $ (3,645) $ (8,176) $ 4,531  55.4  %
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Six Months Ended
2025 2024
Supply chain financing factored receivables $ 152,054,000  $ 95,163,000 
QuickPay factored receivables 74,493,000  77,158,000 
Factored receivable period end balance $ 226,547,000  $ 172,321,000 
Supply chain finance interest income $ 6,107,000  $ 5,202,000 
QuickPay interest income 5,486,000  5,676,000 
Intersegment interest income 5,814,000  4,171,000 
Total interest income 17,407,000  15,049,000 
Broker fee income 11,621,000  8,507,000 
Factor fee income 2,226,000  2,591,000 
Other noninterest income 408,000  312,000 
Intersegment noninterest income 753,000  529,000 
Total noninterest income 15,008,000  11,939,000 
Total revenue $ 32,415,000  $ 26,988,000 
Credit loss expense (benefit) 210,000  60,000 
Noninterest expense 33,957,000  33,555,000 
Intersegment noninterest expense 1,893,000  1,549,000 
Total expense 36,060,000  35,164,000 
Operating income (loss) $ (3,645,000) $ (8,176,000)
Depreciation expense 452,000  507,000 
Software amortization expense 2,609,000  1,107,000 
Intangible amortization expense 2,969,000  3,389,000 
Earnings (losses) before interest, taxes, depreciation, and amortization $ 2,385,000  $ (3,173,000)
EBITDA margin(1)
 7.4  % (11.8) %
Number of invoices processed 15,682,609  11,779,795 
Amount of payments processed $ 18,859,031,000  $ 13,067,267,000 
Network invoice volume 1,724,134  1,322,977 
Network payment volume $ 2,747,126,000  $ 2,168,217,000 
(1)Earnings (losses) before interest, taxes, depreciation, and amortization ("EBITDA") and EBITDA margin (the ratio of EBITDA to total revenue) are non-GAAP financial measures used to provide meaningful supplemental information regarding the segment's operational performance and to enhance investors' overall understanding of such financial performance.
Our Payments segment's operating loss decreased $4.5 million, or 55.4%.
The number of invoices processed by our Payments segment increased 33.1% from 11,779,795 for the six months ended June 30, 2024 to 15,682,609 for the six months ended June 30, 2025, and the amount of payments processed increased 44.3% from $13.067 billion for the six months ended June 30, 2024 to $18.859 billion for the six months ended June 30, 2025.
We began processing network transactions during the first quarter of 2022. When a fully integrated payments customer payor receives an invoice from a fully integrated payments customer payee, we call that a “network transaction.” All network transactions are included in our payment processing volume above. These transactions are facilitated through payments platform APIs with parties on both sides of the transaction using structured data; similar to how a credit card works at a point-of-sale terminal. The integrations largely automate the process and make it cheaper, faster and safer. During the six months ended June 30, 2025, we processed 1,724,134 network invoices representing a network payment volume of $2.747 billion. During the six months ended June 30, 2024, we processed 1,322,977 network invoices representing a network payment volume of $2,168.2 million.
Net interest income increased due to increased average balance of interest earning assets at our Payments segment and increased intersegment interest allocation period over period. Changes in average rates at our Payments segment were little changed period over period.
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Noninterest income increased due to a $2.9 million increase in payment processing and audit fees earned during the six months ended June 30, 2025 compared to the same period a year ago. There were no other significant changes in the components of noninterest income at our Payments segment period over period.
Noninterest expense at our Payments segment was relatively flat period over period the details of which are illustrated in the table above.
The acquisition of HubTran during 2021 allowed us to create a fully integrated payments network for trucking; servicing brokers and factors. Our payments platform already offered tools and services to increase automation, mitigate fraud, create back-office efficiency and improve the payment experience. Through the acquisition of HubTran, we created additional value through the enhancement of its presentment, audit, and payment capabilities for third party logistics companies (i.e., freight brokers) and their carriers, and factors. The acquisition of HubTran was a meaningful inflection point in the operations of our payments and audit business as our strategy shifted from a capital-intensive on-balance sheet product with a focus on interest income to an open-loop payments network for the trucking industry with a focus on fee revenue. It is for this reason that management believes that earnings before interest, taxes, depreciation, and amortization and the adjustment to that metric enhance investors' overall understanding of the financial performance of the Payments segment.
Intelligence
(Dollars in thousands) Six Months Ended June 30,
Intelligence 2025 2024
Total interest income $ —  $ — 
Intersegment interest allocations —  — 
Total interest expense —  — 
Net interest income (expense) —  — 
Credit loss expense (benefit) —  — 
Net interest income (expense) after credit loss expense —  — 
Noninterest income 2,119  — 
Noninterest expense:
Salaries and employee benefits 4,718  — 
Depreciation 14  — 
Other occupancy, furniture and equipment 21  — 
FDIC insurance and other regulatory assessments —  — 
Professional fees 3,946  — 
Amortization of intangible assets 1,062  — 
Advertising and promotion 52  — 
Communications and technology 505  — 
Software amortization 2  — 
Travel and entertainment 248  — 
Other 150  — 
Total noninterest expense 10,718  — 
Net income (loss) before income tax expense $ (8,599) $ — 
Our Intelligence segment's operating loss for the six months ended June 30, 2025 was $8.6 million. As previously disclosed, prior to the fourth quarter of 2024, the data intelligence line of business did not exist. Therefore, there are no comparative periods to discuss regarding our Intelligence segment. As previously disclosed, prior to the fourth quarter of 2024, the data intelligence line of business did not exist. Therefore, there are no comparative periods to discuss regarding our Intelligence segment. As illustrated in the table above, to date, the majority of the expense related to our Intelligence segment is salaries and benefits expense and professional fees. A majority of the professional fees recognized at our Intelligence segment during the six months ended June 30, 2025 relate to our acquisition of Greenscreens.
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Corporate and Other
(Dollars in thousands) Six Months Ended June 30, % Change
Corporate and Other 2025 2024 $ Change
Total interest income $ 163  $ 131  $ 32  24.4  %
Intersegment interest allocations —  —  —  — 
Total interest expense 3,372  4,795  (1,423) (29.7  %)
Net interest income (expense) (3,209) (4,664) 1,455  31.2  %
Credit loss expense (benefit) 48  (28) 76  271.4  %
Net interest income (expense) after credit loss expense (3,257) (4,636) 1,379  29.7  %
Noninterest income 1,678  1,762  (84) (4.8  %)
Noninterest expense:
Salaries and employee benefits 36,574  33,169  3,405  10.3  %
Depreciation 3,176  2,532  644  25.4  %
Other occupancy, furniture and equipment 3,287  2,731  556  20.4  %
FDIC insurance and other regulatory assessments —  —  —  —  %
Professional fees 3,906  2,296  1,610  70.1  %
Amortization of intangible assets 613  213  400  187.8  %
Advertising and promotion 655  674  (19) (2.8  %)
Communications and technology 4,146  5,632  (1,486) (26.4  %)
Software amortization 471  187  284  151.9  %
Travel and entertainment 1,058  994  64  6.4  %
Other 4,923  2,349  2,574  109.6  %
Total noninterest expense 58,809  50,777  8,032  15.8  %
Net income (loss) before income tax expense $ (60,388) $ (53,651) $ (6,737) (12.6  %)
Corporate and other is not a reportable segment, but rather includes certain revenue and expense from the Company's holding company as well as activities not allocated to specific business segments. Corporate and other reported an operating loss of $60.4 million for the six months ended June 30, 2025 compared to an operating loss of $53.7 million for the six months ended June 30, 2024.
The increased operating loss was driven by increased noninterest expense which was the result of a $3.4 million increase in salaries and benefits expense. Further, Corporate experienced a $1.6 million increase in professional fees and a $2.6 million increase in other noninterest expense driven by $2.4 million of current period lease termination payments related to the building we acquired during March 2024. Noninterest income at our Corporate segment decreased primarily due to a $0.5 million decrease in rental income from the same property. Additionally, Corporate experienced a $1.4 million decrease in interest expense period over period as a result of decreased average borrowings.
Financial Condition
Assets
Total assets were $6.495 billion at June 30, 2025, compared to $5.949 billion at December 31, 2024, an increase of $545.8 million, the components of which are discussed below.
Loan Portfolio
Loans held for investment were $4.953 billion at June 30, 2025, compared with $4.547 billion at December 31, 2024.
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The following table shows our total loan portfolio by portfolio segments:
June 30, 2025 December 31, 2024 $ Change % Change
(Dollars in thousands) % of Total % of Total
Commercial real estate $ 754,509  15  % $ 777,689  17  % $ (23,180) (3.0  %)
Construction, land development, land 221,419  4  % 203,804  4  % 17,615  8.6  %
1-4 family residential 172,312  3  % 154,020  3  % 18,292  11.9  %
Farmland 44,069  1  % 56,366  1  % (12,297) (21.8  %)
Commercial 1,132,269  23  % 1,119,245  25  % 13,024  1.2  %
Factored receivables 1,401,377  30  % 1,204,510  27  % 196,867  16.3  %
Consumer 17,520  —  % 8,000  —  % 9,520  119.0  %
Mortgage warehouse 1,209,695  24  % 1,023,326  23  % 186,369  18.2  %
Total Loans $ 4,953,170  100  % $ 4,546,960  100  % $ 406,210  8.9  %
Commercial Real Estate Loans. Our commercial real estate loans decreased $23.2 million, or 3.0%, due to paydowns that outpaced new origination activity. A significant portion of our loan portfolio at June 30, 2025 consisted of commercial real estate loans secured by properties. Such loans can involve high principal loan amounts, and the repayment of these loans is dependent, in large part, on a borrower's ongoing business operations or on income generated from the properties. The table below sets forth the Company's commercial real estate loan portfolio, by portfolio industry sector and collateral location as of June 30, 2025.
(Dollars in thousands) Illinois New York Texas Colorado New Jersey Iowa Other Total
Non-owner occupied
Office $ 3,657  $ 25,329  $ 18,116  $ 4,003  $ 83,075  $ 355  $ 14,209  $ 148,744 
Multifamily 12,024  —  1,354  9,885  —  143  111,250  134,656 
Retail 5,950  57,266  —  6,758  —  2,171  30,873  103,018 
Industrial 8,414  37,306  1,765  1,060  —  103  11,433  60,081 
Hospitality 914  —  —  10,608  —  —  27,192  38,714 
Other 24,257  —  25,394  9,242  —  762  22,594  82,249 
55,216  119,901  46,629  41,556  83,075  3,534  217,551  567,462 
Owner occupied
Industrial 19,605  —  2,600  6,242  —  20,848  13,404  62,699 
Hospitality 3,006  —  —  3,787  —  8,664  17  15,474 
Restaurant 18,107  —  —  4,441  —  1,298  2,641  26,487 
Retail 1,609  —  —  8,355  —  539  1,492  11,995 
Office 1,937  113  —  6,295  —  635  1,346  10,326 
Other 3,938  —  —  17,951  —  32,549  5,628  60,066 
48,202  113  2,600  47,071  —  64,533  24,528  187,047 
Total commercial real estate $ 103,418  $ 120,014  $ 49,229  $ 88,627  $ 83,075  $ 68,067  $ 242,079  $ 754,509 
Construction and Development Loans. Our construction and development loans increased $17.6 million, or 8.6%, due to origination and draw activity that outpaced paydowns and conversions to term loans.
Residential Real Estate Loans. Our one-to-four family residential loans increased $18.3 million, or 11.9%, due to new origination activity that outpaced paydowns.
Farmland Loans. Our farmland loans decreased $12.3 million, or 21.8%, due to paydowns that outpaced modest origination activity.
Commercial Loans. Our commercial loans held for investment increased $13.0 million, or 1.2%, due to increased equipment lending balances and other commercial lending balances. This increase was partially offset by decreases in asset-based lending, liquid credit lending, and agriculture lending. Our other commercial lending products, comprised primarily of general commercial loans originated in our community banking markets, increased $13.6 million, or 4.7%.
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The following table shows our commercial loans:
(Dollars in thousands) June 30, 2025 December 31, 2024 $ Change % Change
Commercial
Equipment $ 543,062  $ 511,855  $ 31,207  6.1  %
Asset-based lending 192,793  205,353  (12,560) (6.1  %)
Liquid credit 47,061  65,053  (17,992) (27.7  %)
Agriculture 48,107  49,365  (1,258) (2.5  %)
Other commercial lending 301,246  287,619  13,627  4.7  %
Total commercial loans $ 1,132,269  $ 1,119,245  $ 13,024  1.2  %
Factored Receivables. Our factored receivables increased $196.9 million, or 16.3%. See discussion of our factoring subsidiary in the Operating Segment Results for analysis of the key drivers impacting the change in the ending factored receivables balance during the period.
Consumer Loans. Our consumer loans increased $9.5 million, or 119.0%, due to origination activity that outpaced paydowns during the period.
Mortgage Warehouse. Our mortgage warehouse facilities increased $186.4 million, or 18.2%, due to seasonal changes in utilization. Client utilization of mortgage warehouse facilities may experience significant fluctuation on a day-to-day basis given mortgage origination market conditions. Our average mortgage warehouse lending balance was $1.068 billion for the three months ended June 30, 2025 compared to $681.7 million for the three months ended June 30, 2024 and $1.003 billion for the six months ended June 30, 2025 compared to $657.8 million for the six months ended June 30, 2024.
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The following tables set forth the contractual maturities, including scheduled principal repayments, of our loan portfolio and the distribution between fixed and floating interest rate loans:
June 30, 2025
(Dollars in thousands) One Year or
Less		 After One
but within
Five Years		 After Five but within Fifteen
Years		 After Fifteen
Years		 Total
Commercial real estate $ 354,729  $ 368,453  $ 31,302  $ 25  $ 754,509 
Construction, land development, land 116,774  103,578  1,067  —  221,419 
1-4 family residential 8,382  26,699  6,076  131,155  172,312 
Farmland 5,420  24,944  12,949  756  44,069 
Commercial 392,227  706,813  33,229  —  1,132,269 
Factored receivables 1,401,377  —  —  —  1,401,377 
Consumer 7,828  8,948  737  7  17,520 
Mortgage warehouse 1,209,695  —  —  —  1,209,695 
$ 3,496,432  $ 1,239,435  $ 85,360  $ 131,943  $ 4,953,170 
Sensitivity of loans to changes in interest rates: After One
but within
Five Years		 After Five but within Fifteen
Years		 After Fifteen
Years
Predetermined (fixed) interest rates
Commercial real estate $ 238,829  $ 2,045  $ — 
Construction, land development, land 78,905  173  — 
1-4 family residential 21,290  1,648  46,492 
Farmland 20,875  188  — 
Commercial 543,942  7,742  — 
Factored receivables —  —  — 
Consumer 8,948  737  7 
Mortgage warehouse —  —  — 
$ 912,789  $ 12,533  $ 46,499 
Floating interest rates
Commercial real estate $ 129,624  $ 29,257  $ 25 
Construction, land development, land 24,673  894  — 
1-4 family residential 5,409  4,428  84,663 
Farmland 4,069  12,761  756 
Commercial 162,871  25,487  — 
Factored receivables —  —  — 
Consumer —  —  — 
Mortgage warehouse —  —  — 
$ 326,646  $ 72,827  $ 85,444 
Total $ 1,239,435  $ 85,360  $ 131,943 
As of June 30, 2025, most of the Company’s non-factoring business activity is with customers located within certain states. The states of Texas (21%), Colorado (11%), Illinois (10%), and Iowa (4%) make up 46% of the Company’s gross loans, excluding factored receivables. Therefore, the Company’s exposure to credit risk is affected by changes in the economies in these states. At December 31, 2024, the states of Texas (22%), Illinois (12%), Colorado (10%), and Iowa (4%) made up 48% of the Company’s gross loans, excluding factored receivables.
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Further, a majority (97%) of our factored receivables, representing approximately 27% of our total loan portfolio as of June 30, 2025, are receivables purchased from trucking fleets, owner-operators, and freight brokers in the transportation industry. Although such concentration may cause our future interest income with respect to our factoring operations to be correlated with demand for the transportation industry in the United States generally, we feel that the credit risk with respect to our outstanding portfolio is appropriately mitigated as we limit the amount of receivables acquired from individual debtors and creditors thereby achieving diversification across a number of companies and industries. At December 31, 2024, 97% of our factored receivables, representing approximately 26% of our total loan portfolio, were receivables purchased from trucking fleets, owner-operators, and freight brokers in the transportation industry.
Nonperforming Assets
We have established procedures to assist us in maintaining the overall quality of our loan portfolio. In addition, we have adopted underwriting guidelines to be followed by our lending officers and require senior management review of proposed extensions of credit exceeding certain thresholds. When delinquencies exist, we monitor them for any negative or adverse trends. Our loan review procedures include approval of lending policies and underwriting guidelines by the board of directors of our bank subsidiary, independent loan review, approval of large credit relationships by our bank subsidiary’s Management Loan Committee and loan quality documentation procedures. We, like other financial institutions, are subject to the risk that our loan portfolio will be subject to increasing pressures from deteriorating borrower credit due to general economic conditions.
To manage the credit risks associated with its loan portfolio, management may, depending on current or anticipated economic conditions and related exposures, apply enhanced risk management measures to loans through analysis of a specific borrower's financial condition, including cash flow, collateral values, and guarantees, among other credit factors. In response to the current market dynamics, including economic uncertainties and elevated market interest rates since 2022, the Company has enhanced its stress testing to mitigate interest rate reset risk with a specific emphasis on borrowers’ abilities to absorb the impact of higher interest loan rates.
The following table sets forth the allocation of our nonperforming assets among our different asset categories as of the dates indicated. We classify nonperforming assets as nonaccrual loans and securities, factored receivables greater than 90 days past due, OREO, and other repossessed assets. The balances of nonperforming loans reflect the recorded investment in these assets, including deductions for purchase discounts.
(Dollars in thousands) June 30, 2025 December 31, 2024
Nonperforming loans:
Commercial real estate $ 8,279  $ 11,254 
Construction, land development, land —  2,410 
1-4 family residential 808  810 
Farmland 452  1,996 
Commercial 45,054  73,437 
Factored receivables 2,893  23,289 
Consumer 23  116 
Mortgage warehouse —  — 
Total nonperforming loans held for investment 57,509  113,312 
Loans held for sale 2,000  — 
Held to maturity securities 1,913  4,073 
Equity investments without readily determinable fair value 4,166  2,462 
Other real estate owned, net 1,995  — 
Other repossessed assets 87  425 
Total nonperforming assets $ 67,670  $ 120,272 
Nonperforming assets to total assets 1.04  % 2.02  %
Nonperforming loans to total loans held for investment 1.20  % 2.49  %
Total past due loans to total loans held for investment 2.21  % 3.27  %
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Nonperforming loans decreased $55.8 million, or 49.2%, due to a $7.5 million payoff of a nonperforming multifamily relationship, a $24.9 million decrease in nonperforming equipment finance relationships, a $7.2 million decrease in nonperforming liquid credit relationships, a $1.5 million payoff of a nonperforming farmland relationship, $1.2 million of partial charge-offs of a nonperforming other commercial lending relationship, and a $20.4 million decrease in nonperforming factored receivables. The decrease in nonperforming factored receivables includes the reduction of the $19.4 million Misdirected Payments Receivable, net of customer reserves. These decreases were partially offset by a $4.9 million increase in nonperforming equipment finance relationships and a $6.6 million increase in nonperforming commercial real estate relationships.
OREO increased $2.0 million due to the addition of one property during the period.
As a result of the activity previously described and changes in our period end total loans held for investment, the ratio of nonperforming loans to total loans held for investment decreased to 1.20% at June 30, 2025 from 2.49% at December 31, 2024.
Our ratio of nonperforming assets to total assets decreased to 1.04% at June 30, 2025 from 2.02% at December 31, 2024. This is due to the aforementioned loan activity, and also impacted by an increase in nonperforming equity investments and OREO as well as changes in our period end total assets.
Past due loans to total loans held for investment decreased to 2.21% at June 30, 2025 from 3.27% at December 31, 2024, reflecting decreases in past due loans across several loan segments.
Allowance for Credit Losses on Loans
The ACL is a valuation allowance estimated at each balance sheet date in accordance with US GAAP that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. When the Company deems all or a portion of a loan to be uncollectible the appropriate amount is written off and the ACL is reduced by the same amount. Subsequent recoveries, if any, are credited to the ACL when received. See Note 1 of the Company’s 2024 Form 10-K and notes to the consolidated financial statements included elsewhere in this report for discussion of our ACL methodology on loans. Allocations of the ACL may be made for specific loans, but the entire allowance is available for any loan that, in the Company’s judgment, should be charged-off.
Loan loss valuation allowances are recorded on specific at-risk balances, typically consisting of collateral dependent loans and factored invoices greater than 90 days past due with negative cash reserves.
The following table sets forth the ACL by category of loan:
June 30, 2025 December 31, 2024
(Dollars in thousands) Allocated
Allowance		 % of Loan
Portfolio		 ACL to
Loans		 Allocated
Allowance		 % of Loan
Portfolio		 ACL to
Loans
Commercial real estate $ 4,198  15  % 0.56  % $ 3,825  17  % 0.49  %
Construction, land development, land 2,589  4  % 1.17  % 2,873  4  % 1.41  %
1-4 family residential 1,560  3  % 0.91  % 1,404  3  % 0.91  %
Farmland 302  1  % 0.69  % 386  1  % 0.68  %
Commercial 17,813  23  % 1.57  % 21,419  25  % 1.91  %
Factored receivables 10,553  30  % 0.75  % 9,600  27  % 0.80  %
Consumer 466  —  % 2.66  % 185  —  % 2.31  %
Mortgage warehouse 1,210  24  % 0.10  % 1,022  23  % 0.10  %
Total Loans $ 38,691  100  % 0.78  % $ 40,714  100  % 0.90  %
The ACL decreased $2.0 million, or 5.0%. This decrease reflects net charge-offs of $13.6 million and credit loss expense of $0.8 million. It should be noted that the $10.8 million ACL on the acquired PCD loan was booked as part of the loan purchase with no impact on credit loss expense. Therefore, the corresponding $10.8 million charge-off also had no impact on credit loss expense.
A driver of the change in ACL is change in the loss drivers that the Company forecasted to calculate expected losses at June 30, 2025 as compared to December 31, 2024. Such change had a negative impact on the Company’s loss drivers and assumptions over the reasonable and supportable forecast period and resulted in an increase of $0.3 million of ACL period over period.
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The Company uses the discounted cash flow (DCF) method to estimate ACL for the commercial real estate, construction, land development, land, 1-4 family residential, commercial (excluding liquid credit), and consumer loan pools. For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment as a loss driver. The Company also utilizes and forecasts either one-year percentage change in national retail sales (commercial real estate – non multifamily, commercial general, commercial agriculture, commercial asset-based lending, commercial equipment finance, consumer), one-year percentage change in the national home price index (1-4 family residential and construction, land development, land), or one-year percentage change in national gross domestic product (commercial real estate – multifamily) as a second loss driver depending on the nature of the underlying loan pool and how well that loss driver correlates to expected future losses. Consistent forecasts of the loss drivers are used across the loan segments. The Company also forecasts prepayment speeds for use in the DCF models with higher prepayment speeds resulting in lower required ACL levels and vice versa for shorter prepayment speeds. These assumed prepayment speeds are based upon our historical prepayment speeds by loan type adjusted for the expected impact of the future interest rate environment. The impact of these assumed prepayment speeds is lesser in magnitude than the aforementioned loss driver assumptions.
For all DCF models at June 30, 2025, the Company has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. The Company leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by the Company when developing the forecast metrics. At June 30, 2025 as compared to December 31, 2024, the Company forecasted a modest increase in national unemployment and modest degradation in one-year percentage change in national retail sales, one-year percentage change in national home price index, and one-year percentage change in national gross domestic product. At June 30, 2025 for national unemployment, the Company projected a low percentage in the first quarter followed by a gradual rise in the following three quarters. For percentage change in national retail sales, the Company projected a small increase in the first projected quarter followed by a decline to negative levels over the last three projected quarters to a level below recent actual periods. For percentage change in national home price index, the Company projected an increase in the first projected quarter followed by a steep drop to negative levels for the remaining three quarters with such negative levels peaking in the fourth projected quarter. For percentage change in national gross domestic product, management projected negative growth for each projected quarter with the exception of slightly positive growth in the first projected quarter. At June 30, 2025, the Company used its historical prepayment speeds with minimal adjustment.
The Company uses a loss-rate method to estimate expected credit losses for the farmland, liquid credit, factored receivables, and mortgage warehouse loan pools. For each of these loan segments, the Company applies an expected loss ratio based on internal and peer historical losses adjusted as appropriate for qualitative factors. Qualitative loss factors are based on the Company's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions. Loss factors used to calculate the required ACL on pools that use the loss-rate method reflect the forecasted economic conditions described above.
The following tables show our credit ratios and an analysis of our credit loss expense:
(Dollars in thousands) June 30, 2025 December 31, 2024
Allowance for credit losses on loans $ 38,691  $ 40,714 
Total loans held for investment $ 4,953,170  $ 4,546,960 
Allowance to total loans held for investment 0.78  % 0.90  %
Nonaccrual loans $ 54,616  $ 90,023 
Total loans held for investment $ 4,953,170  $ 4,546,960 
Nonaccrual loans to total loans held for investment 1.10  % 1.98  %
Allowance for credit losses on loans $ 38,691  $ 40,714 
Nonaccrual loans $ 54,616  $ 90,023 
Allowance for credit losses to nonaccrual loans 70.84  % 45.23  %
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Three Months Ended June 30,
2025 2024
(Dollars in thousands) Net
Charge-Offs		 Average Loans HFI Net Charge-Off Ratio Net
Charge-Offs		 Average Loans HFI Net Charge-Off Ratio
Commercial real estate $ (59) $ 769,624  (0.01) % $ —  $ 823,222  —  %
Construction, land development, land 249  217,235  0.11  % (1) 219,988  —  %
1-4 family residential 44  163,894  0.03  % 13  128,831  0.01  %
Farmland —  44,767  —  % —  57,328  —  %
Commercial 10,851  1,101,336  0.99  % 1,206  1,113,004  0.11  %
Factored receivables (3,340) 1,340,895  (0.25) % 1,430  1,160,057  0.12  %
Consumer 57  12,800  0.45  % 75  8,092  0.93  %
Mortgage warehouse —  1,068,476  —  % —  681,671  —  %
Total Loans $ 7,802  $ 4,719,027  0.17  % $ 2,723  $ 4,192,193  0.06  %
Quarter to date net loans charged off increased $5.1 million. Net charge-offs during the three months ended June 30, 2025 reflect the $10.8 million charge off on the acquired PCD loan that had no impact on earnings. Such charge-offs also reflect the $3.8 million recovery resulting from the USPS settlement. There were no individually significant charge-offs during the three months ended June 30, 2024.
Six Months Ended June 30,
2025 2024
(Dollars in thousands) Net
Charge-Offs		 Average Loans HFI Net Charge-Off Ratio Net
Charge-Offs		 Average Loans HFI Net Charge-Off Ratio
Commercial real estate $ 54  $ 768,822  0.01  % $ —  $ 818,326  —  %
Construction, land development, land 249  213,347  0.12  % (1) 183,758  —  %
1-4 family residential 43  160,080  0.03  % 11  127,683  0.01  %
Farmland —  48,839  —  % —  58,707  —  %
Commercial 15,148  1,104,141  1.37  % 1,757  1,126,695  0.16  %
Factored receivables (2,082) 1,286,489  (0.16) % 2,690  1,136,389  0.24  %
Consumer 189  10,453  1.81  % 148  8,818  1.68  %
Mortgage warehouse —  1,002,867  —  % —  657,773  —  %
Total Loans $ 13,601  $ 4,595,038  0.30  % $ 4,605  $ 4,118,149  0.11  %
Year to date net loans charged off increased $9.0 million. Net charge-offs during the six months ended June 30, 2025 reflect the $10.8 million charge off on the acquired PCD loan that had no impact on earnings. Such charge-offs also reflect the $3.8 million recovery resulting from the USPS settlement, a $3.7 million partial charge-off of a liquid credit relationship and a $0.7 million charge-off of a separate liquid credit relationship. There were no individually significant charge-offs during the six months ended June 30, 2024.
Securities
As of June 30, 2025 and December 31, 2024, we held equity securities with readily determinable fair values of $4.5 million and $4.4 million, respectively. These securities represent investments in a publicly traded Community Reinvestment Act mutual fund and are subject to market pricing volatility, with changes in fair value reflected in earnings.
As of June 30, 2025, we held debt securities classified as available for sale with a fair value of $392.3 million, an increase of $10.7 million from $381.6 million at December 31, 2024. The following table illustrates the changes in our available for sale debt securities:
Available For Sale Debt Securities:
(Dollars in thousands) June 30, 2025 December 31, 2024 $ Change % Change
Mortgage-backed securities, residential $ 99,909  $ 84,185  $ 15,724  18.7  %
Asset-backed securities 868  905  (37) (4.1) %
State and municipal 2,793  3,063  (270) (8.8) %
CLO Securities 287,287  291,913  (4,626) (1.6) %
Corporate bonds 257  262  (5) (1.9) %
SBA pooled securities 1,161  1,233  (72) (5.8) %
$ 392,275  $ 381,561  $ 10,714  2.8  %
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Our available for sale CLO portfolio consists of investment grade positions in high ranking tranches within their respective securitization structures. As of June 30, 2025, the Company determined that all impaired available for sale securities experienced a decline in fair value below their amortized cost basis due to noncredit-related factors. Therefore, the Company carried no ACL at June 30, 2025. Our available for sale securities can be used for pledging to secure FHLB borrowings and public deposits, or can be sold to meet liquidity needs.
As of June 30, 2025, we held investments classified as held to maturity with an amortized cost, net of ACL, of $1.8 million, a decrease of $0.1 million from $1.9 million at December 31, 2024. See previous discussion of Credit Loss Expense related to our held to maturity securities for further details regarding the nature of these securities and the required ACL at June 30, 2025.
The following tables set forth the amortized cost and average yield of our debt securities, by type and contractual maturity:
Maturity as of June 30, 2025
One Year or Less After One but within Five Years After Five but within Ten Years After Ten Years Total
(Dollars in thousands) Amortized
Cost		 Average
Yield		 Amortized
Cost		 Average
Yield		 Amortized
Cost		 Average
Yield		 Amortized
Cost		 Average
Yield		 Amortized
Cost		 Average
Yield
Mortgage-backed securities $ 6,479  2.28  % $ 632  2.33  % $ 680  2.69  % $ 96,531  4.60  % $ 104,322  4.43  %
Asset-backed securities —  —  % —  —  % 862  5.59  % —  —  % 862  5.59  %
State and municipal 191  3.19  % 2,178  2.72  % 503  2.66  % —  —  % 2,872  2.74  %
CLO securities —  —  % —  —  % 42,599  6.18  % 243,625  5.86  % 286,224  5.91  %
Corporate bonds —  —  % —  —  % 266  5.14  % —  —  % 266  5.14  %
SBA pooled securities —  —  % —  —  % 328  2.64  % 883  4.23  % 1,211  3.80  %
Total available for sale securities $ 6,670  2.30  % $ 2,810  2.64  % $ 45,238  6.05  % $ 341,039  5.50  % $ 395,757  5.48  %
Held to maturity securities: $ —  —  % $ 3,181  4.13  % $ —  —  % $ —  —  % $ 3,181  4.13  %
Liabilities
Total liabilities were $5.582 billion as of June 30, 2025, compared to $5.058 billion at December 31, 2024, an increase of $524.3 million, the components of which are discussed below.
Deposits
The following table summarizes our deposits:
(Dollars in thousands) June 30, 2025 December 31, 2024 $ Change % Change
Noninterest bearing demand $ 2,285,327  $ 1,964,457  $ 320,870  16.3  %
Interest bearing demand 694,005  697,949  (3,944) (0.6  %)
Individual retirement accounts 40,888  43,937  (3,049) (6.9  %)
Money market 565,781  629,610  (63,829) (10.1  %)
Savings 517,474  515,545  1,929  0.4  %
Certificates of deposit 230,179  232,232  (2,053) (0.9  %)
Brokered time deposits 701,059  490,650  210,409  42.9  %
Other brokered deposits 151,385  246,440  (95,055) (38.6  %)
Total Deposits $ 5,186,098  $ 4,820,820  $ 365,278  7.6  %
Our total deposits increased $365.3 million, or 7.6%, primarily due to an increase in noninterest bearing demand deposits, savings deposits, and brokered time deposits. The Company experienced decreases in all other material deposit categories. Other brokered deposits are non-maturity deposits obtained from wholesale sources. As of June 30, 2025, interest bearing demand deposits, noninterest bearing deposits, money market deposits, other brokered deposits, and savings deposits accounted for 81% of our total deposits, while individual retirement accounts, certificates of deposit, and brokered time deposits made up 19% of total deposits. At June 30, 2025 and December 31, 2024, our estimated uninsured deposits were $1.551 billion and $1.488 billion, respectively.
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At June 30, 2025 we held $66.9 million of time deposits that meet or exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limit. The following table provides information on the maturity distribution of time deposits exceeding the FDIC insurance limit as of June 30, 2025:
(Dollars in thousands) Over
$250,000
Maturity
3 months or less $ 30,032 
Over 3 through 6 months 21,767 
Over 6 through 12 months 11,233 
Over 12 months 1,603 
$ 64,635 
The following table summarizes our average deposit balances and weighted average rates:
Three Months Ended June 30, 2025 Three Months Ended June 30, 2024
(Dollars in thousands) Average
Balance		 Weighted
Avg Rates		 % of
Total		 Average
Balance		 Weighted
Avg Rates		 % of
Total
Interest bearing demand $ 722,653  0.51  % 15  % $ 748,699  0.63  % 17  %
Individual retirement accounts 41,694  1.26  % 1  % 49,917  1.41  % 1  %
Money market 586,420  2.69  % 12  % 565,612  2.91  % 13  %
Savings 519,067  1.05  % 10  % 541,408  1.10  % 12  %
Certificates of deposit 225,333  2.71  % 5  % 257,292  3.04  % 6  %
Brokered time deposits 614,168  4.32  % 12  % 433,096  5.29  % 10  %
Other brokered deposits 93,315  4.45  % 2  % 71,196  5.43  % 2  %
Total interest bearing deposits 2,802,650  2.22  % 57  % 2,667,220  2.34  % 61  %
Noninterest bearing demand 2,166,628  —  43  % 1,832,154  —  39  %
Total deposits $ 4,969,278  1.25  % 100  % $ 4,499,374  1.39  % 100  %
Six Months Ended June 30, 2025 Six Months Ended June 30, 2024
(Dollars in thousands) Average
Balance		 Weighted
Avg Yields		 % of
Total		 Average
Balance		 Weighted
Avg Yields		 % of
Total
Interest bearing demand $ 727,873  0.49  % 15  % $ 740,223  0.55  % 17  %
Individual retirement accounts 42,399  1.26  % 1  % 50,675  1.34  % 1  %
Money market 598,763  2.63  % 12  % 567,604  2.86  % 13  %
Savings 518,879  1.06  % 11  % 537,551  1.05  % 12  %
Certificates of deposit 228,480  2.68  % 5  % 260,427  2.94  % 6  %
Brokered time deposits 591,808  4.44  % 12  % 358,807  5.29  % 8  %
Other brokered deposits 56,810  4.46  % 1  % 44,528  5.43  % 1  %
Total interest bearing deposits 2,765,012  2.18  % 57  % 2,559,815  2.17  % 58  %
Noninterest bearing demand 2,086,412  —  43  % 1,782,257  —  42  %
Total deposits $ 4,851,424  1.24  % 100  % $ 4,342,072  1.28  % 100  %
The Company's deposit base is made up of a high number of customers with accounts spread across 63 locations in six states. Our deposit base is diverse in terms of both geography and industry, comprised largely of retail as well small-to-medium sized business customers. The majority of our deposits are FDIC insured.
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Other Borrowings
FHLB Advances
The following provides a summary of our FHLB advances as of and for the six months ended June 30, 2025 and the year ended December 31, 2024:
(Dollars in thousands) June 30, 2025 December 31, 2024
Amount outstanding at end of period $ 180,000  $ 30,000 
Weighted average interest rate at end of period 4.62  % 4.79  %
Average amount outstanding during the period 231,519  120,369 
Weighted average interest rate during the period 4.47  % 5.38  %
Highest month end balance during the period 355,000  280,000 
Our FHLB advances are collateralized by assets, including a blanket pledge of certain loans. At June 30, 2025 and December 31, 2024, we had $773.2 million and $819.1 million, respectively, in unused and available advances from the FHLB.
Subordinated Notes
On November 27, 2019, the Company issued $39.5 million of Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2019 Notes”). The 2019 Notes initially incurred interest at 4.875% per annum, payable semi-annually in arrears, to, but excluding, November 27, 2024. The 2019 Notes were redeemed on November 27, 2024 at a redemption price equal to the outstanding principal amount of the 2019 Notes plus accrued and unpaid interest to, but excluding, the date of redemption.
On August 26, 2021, the Company issued $70.0 million of Fixed-to-Floating Rate Subordinated Notes due 2031 (the “2021 Notes”). The 2021 Notes initially bear interest at 3.500% per annum, payable semi-annually in arrears, to, but excluding, September 1, 2026, and, thereafter and to, but excluding, the maturity date or earlier redemption, interest shall be payable quarterly in arrears, at an annual floating rate equal to a benchmark rate, initially three-month SOFR, as determined for the applicable quarterly period, plus 2.860%. The Company may, at its option, beginning on September 1, 2026 and on any scheduled interest payment date thereafter, redeem the 2021 Notes, in whole or in part, at a redemption price equal to the outstanding principal amount of the 2021 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption.
The Subordinated Notes are included on the consolidated balance sheets as liabilities at their carrying values; however, for regulatory purposes, the $69.8 million and $69.7 million carrying value of these obligations at June 30, 2025 and December 31, 2024, respectively, were eligible for inclusion in Tier 2 regulatory capital. Issuance costs related to the Subordinated Notes have been netted against the subordinated notes liability on the balance sheet. The debt issuance costs are being amortized using the effective interest method through maturity and recognized as a component of interest expense.
The Subordinated Notes are subordinated in right of payment to the Company’s existing and future senior indebtedness and are structurally subordinated to the Company’s subsidiaries’ existing and future indebtedness and other obligations.
Junior Subordinated Debentures
The following provides a summary of our junior subordinated debentures as of June 30, 2025:
(Dollars in thousands) Face Value Carrying Value Maturity Date Interest Rate
National Bancshares Capital Trust II $ 15,464  $ 13,863  September 2033
Three Month SOFR + 3.26%
National Bancshares Capital Trust III 17,526  14,004  July 2036
Three Month SOFR + 1.64%
ColoEast Capital Trust I 5,155  3,965  September 2035
Three Month SOFR + 1.86%
ColoEast Capital Trust II 6,700  5,101  March 2037
Three Month SOFR + 2.05%
Valley Bancorp Statutory Trust I 3,093  2,945  September 2032
Three Month SOFR + 3.66%
Valley Bancorp Statutory Trust II 3,093  2,788  July 2034
Three Month SOFR + 3.01%
$ 51,031  $ 42,666 
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These debentures are unsecured obligations and were issued to trusts that are unconsolidated subsidiaries. The trusts in turn issued trust preferred securities with identical payment terms to unrelated investors. The debentures may be called by the Company at par plus any accrued but unpaid interest; however, we have no current plans to redeem them prior to maturity. Interest on the debentures is calculated quarterly, based on a contractual rate equal to three month SOFR plus a weighted average spread of 2.41%. As part of the purchase accounting adjustments made with the National Bancshares, Inc. acquisition on October 15, 2013, the ColoEast acquisition on August 1, 2016, and the Valley acquisition on December 9, 2017, we adjusted the carrying value of the junior subordinated debentures to fair value as of the respective acquisition dates. The discounts on the debentures will continue to be amortized through maturity and recognized as a component of interest expense.
The debentures are included on our consolidated balance sheet as liabilities; however, for regulatory purposes, these obligations are eligible for inclusion in regulatory capital, subject to certain limitations. All of the carrying value of $42.7 million was allowed in the calculation of Tier I capital as of June 30, 2025.
Capital Resources and Liquidity Management
Capital Resources
Our stockholders’ equity totaled $912.4 million as of June 30, 2025, compared to $890.9 million as of December 31, 2024, an increase of $21.5 million. Stockholders’ equity increased during this period primarily due to stock based compensation expense and the issuance of common stock pursuant to our employee stock purchase plan.
Liquidity Management
We define liquidity as our ability to generate sufficient cash to fund current loan demand, deposit withdrawals, other cash demands and disbursement needs, and otherwise to operate on an ongoing basis.
We manage liquidity at the holding company level as well as that of our bank subsidiary. The management of liquidity at both levels is critical, because the holding company and our bank subsidiary have different funding needs and sources, and each is subject to regulatory guidelines and requirements which require minimum levels of liquidity. We believe that our liquidity ratios meet or exceed those guidelines and that our present position is adequate to meet our current and future liquidity needs.
As part of our liquidity management process, we regularly stress test our balance sheet to ensure that we are continually able to withstand unexpected liquidity shocks such as sudden or protracted material deposit runoff. This analysis explicitly contemplates the immediate runoff of any meaningful deposit concentrations such as the servicing deposits that we hold on behalf of our mortgage warehouse customers.
Our liquidity requirements are met primarily through cash flow from operations, receipt of pre-paid and maturing balances in our loan and investment portfolios, debt financing and increases in customer deposits. Our liquidity position is supported by management of liquid assets and liabilities and access to other sources of funds. Liquid assets include cash, interest earning deposits in banks, federal funds sold, securities available for sale and maturing or prepaying balances in our investment and loan portfolios. Liquid liabilities include core deposits, federal funds purchased, securities sold under repurchase agreements and other borrowings. Other sources of funds include the sale of loans, brokered deposits, the issuance of additional collateralized borrowings such as FHLB advances or borrowings from the Federal Reserve, the issuance of debt securities and the issuance of common securities. For additional information regarding our operating, investing and financing cash flows, see the Consolidated Statements of Cash Flows provided in our consolidated financial statements.
In addition to the liquidity provided by the sources described above, our subsidiary bank maintains correspondent relationships with other banks in order to sell loans or purchase overnight funds should additional liquidity be needed. As of June 30, 2025, TBK Bank had $796.4 million of unused borrowing capacity from the Federal Reserve Bank discount window and unsecured federal funds lines of credit with seven unaffiliated banks totaling $227.5 million, with no amounts advanced against those lines. Additionally, as of June 30, 2025, we had $773.2 million in unused and available advances from the FHLB. We have historically utilized FHLB advances to support the fluctuating and sometimes unpredictable balances in our mortgage warehouse lending portfolio, and we continue to have the ability to do so. Further, as of June 30, 2025, we had $182.2 million in unused and available capacity to deliver factored receivables to another bank should additional liquidity be needed.
Contractual Obligations
The following table summarizes our contractual obligations and other commitments to make future payments as of June 30, 2025. The amount of the obligations presented in the table reflect principal amounts only and exclude the amount of interest we are obligated to pay.
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Also excluded from the table are a number of obligations to be settled in cash. These excluded items are reflected in our consolidated balance sheet and include deposits with no stated maturity, trade payables, and accrued interest payable.
Payments Due by Period - June 30, 2025
(Dollars in thousands) Total One Year or
Less		 After One
but within
Three Years		 After Three
but within
Five Years		 After Five
Years
Federal Home Loan Bank advances $ 180,000  $ 150,000  $ 30,000  $ —  $ — 
Subordinated notes 70,000  —  —  —  70,000 
Junior subordinated debentures 51,031  —  —  —  51,031 
Operating lease agreements 29,157  5,802  10,610  8,390  4,355 
Time deposits with stated maturity dates 972,126  947,493  22,312  2,321  — 
Total contractual obligations $ 1,302,314  $ 1,103,295  $ 62,922  $ 10,711  $ 125,386 
Regulatory Capital Requirements
Our capital management consists of providing equity to support our current and future operations. We are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s or TBK Bank’s financial statements. For further information regarding our regulatory capital requirements, see Note 10 – Regulatory Matters in the accompanying condensed notes to the consolidated financial statements included elsewhere in this report.
Off-Balance Sheet Arrangements
In the normal course of business, we enter into various transactions, which, in accordance with GAAP, are not included in our consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby and commercial letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. For further information, see Note 8 – Off-Balance Sheet Loan Commitments in the accompanying condensed notes to the consolidated financial statements included elsewhere in this report.
Critical Accounting Policies and Estimates
Our accounting policies are fundamental to understanding our management’s discussion and analysis of our results of operations and financial condition. We have identified certain significant accounting policies which involve a higher degree of judgment and complexity in making certain estimates and assumptions that affect amounts reported in our consolidated financial statements. The significant accounting policy which we believe to be the most critical in preparing our consolidated financial statements is the determination of the allowance for credit losses. Since December 31, 2024, there have been no changes in critical accounting policies as further described under “Critical Accounting Policies and Estimates” and in Note 1 to the Consolidated Financial Statements in our 2024 Form 10-K.
Recently Issued Accounting Pronouncements
See Note 1 – Summary of Significant Accounting Policies in the accompanying condensed notes to consolidated financial statements included elsewhere in this report for details of recently issued accounting pronouncements and their expected impact on our consolidated financial statements.
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Forward-Looking Statements
This document contains forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable of a future or forward-looking nature. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control, particularly with regard to developments related to COVID-19. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following:
•business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas;
•our ability to mitigate our risk exposures;
•our ability to maintain our historical earnings trends;
•changes in management personnel;
•interest rate risk;
•concentration of our products and services in the transportation industry;
•credit risk associated with our loan portfolio;
•lack of seasoning in our loan portfolio;
•deteriorating asset quality and higher loan charge-offs;
•time and effort necessary to resolve nonperforming assets;
•inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates;
•risks related to the integration of acquired businesses, including our recent acquisition of Greenscreens, and any future acquisitions;
•our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance;
•lack of liquidity;
•fluctuations in the fair value and liquidity of the securities we hold for sale;
•impairment of investment securities, goodwill, other intangible assets or deferred tax assets;
•our risk management strategies;
•environmental liability associated with our lending activities;
•increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms;
•the accuracy of our financial statements and related disclosures;
•material weaknesses in our internal control over financial reporting;
•system failures or failures to prevent breaches of our network security;
•the institution and outcome of litigation and other legal proceedings against us or to which we become subject;
•changes in carry-forwards of net operating losses;
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•changes in federal tax law or policy;
•the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Act and their application by our regulators as well as privacy, cybersecurity, and artificial intelligence regulation and oversight;
•governmental monetary and fiscal policies;
•changes in the scope and cost of FDIC, insurance and other coverages;
•failure to receive regulatory approval for future acquisitions; and
•increases in our capital requirements.
The foregoing factors should not be construed as exhaustive. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Asset/Liability Management and Interest Rate Risk
The principal objective of our asset and liability management function is to evaluate the interest rate risk within the balance sheet and pursue a controlled assumption of interest rate risk while maximizing net income and preserving adequate levels of liquidity and capital. The board of directors of our subsidiary bank has oversight of our asset and liability management function, which is managed by our Chief Financial Officer. Our Chief Financial Officer meets with our senior executive management team regularly to review, among other things, the sensitivity of our assets and liabilities to market interest rate changes, local and national market conditions and market interest rates. That group also reviews our liquidity, capital, deposit mix, loan mix and investment positions.
As a financial institution, our primary component of market risk is interest rate volatility. Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the fair value of all interest-earning assets and interest-bearing liabilities, other than those which have a short term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair values.
We manage our exposure to interest rates primarily by structuring our balance sheet in the ordinary course of business. We do not typically enter into derivative contracts for the purpose of managing interest rate risk, but we may elect to do so in the future. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.
We use an interest rate risk simulation model to test the interest rate sensitivity of net interest income and the balance sheet. Instantaneous parallel rate shift scenarios are modeled and utilized to evaluate risk and establish exposure limits for acceptable changes in projected net interest margin. These scenarios, known as rate shocks, simulate an instantaneous change in interest rates and use various assumptions, including, but not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, and reinvestment and replacement of asset and liability cash flows. We also analyze the economic value of equity as a secondary measure of interest rate risk. This is a complementary measure to net interest income where the calculated value is the result of the fair value of assets less the fair value of liabilities. The economic value of equity is a longer term view of interest rate risk because it measures the present value of all future cash flows. The impact of changes in interest rates on this calculation is analyzed for the risk to our future earnings and is used in conjunction with the analyses on net interest income.
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The following table summarizes simulated change in net interest income versus unchanged rates as of June 30, 2025 and December 31, 2024:
June 30, 2025 December 31, 2024
Following 12 Months Months
13-24		 Following 12 Months Months
13-24
+400 basis points 11.1  % 12.1  % 10.1  % 13.2  %
+300 basis points 8.4  % 9.1  % 7.6  % 9.9  %
+200 basis points 5.7  % 6.1  % 5.1  % 6.6  %
+100 basis points 2.9  % 3.1  % 2.6  % 3.3  %
Flat rates 0.0  % 0.0  % 0.0  % 0.0  %
-100 basis points (2.8  %) (3.1  %) (2.6  %) (3.7  %)
-200 basis points (5.6  %) (6.5  %) (5.4  %) (7.5  %)
-300 basis points (8.6  %) (10.2  %) (8.2  %) (11.8  %)
-400 basis points (11.0  %) (13.1  %) (11.0  %) (16.0  %)
The following table presents the change in our economic value of equity as of June 30, 2025 and December 31, 2024, assuming immediate parallel shifts in interest rates:
Economic Value of Equity at Risk (%)
June 30, 2025 December 31, 2024
+400 basis points 10.8  % 9.3  %
+300 basis points 8.4  % 7.3  %
+200 basis points 5.8  % 5.2  %
+100 basis points 2.6  % 2.6  %
Flat rates 0.0  % 0.0  %
-100 basis points (5.6  %) (5.6  %)
-200 basis points (11.6  %) (11.5  %)
-300 basis points (18.0  %) (17.7  %)
-400 basis points (24.1  %) (24.2  %)
Many assumptions are used to calculate the impact of interest rate fluctuations. Actual results may be significantly different than our projections due to several factors, including the timing and frequency of rate changes, market conditions and the shape of the yield curve. The computations of interest rate risk shown above do not include actions that our management may undertake to manage the risks in response to anticipated changes in interest rates, and actual results may also differ due to any actions taken in response to the changing rates.
As part of our asset/liability management strategy, our management has emphasized the origination of shorter duration loans as well as variable rate loans to limit the negative exposure to a rate increase. We also desire to acquire deposit transaction accounts, particularly noninterest or low interest-bearing non-maturity deposit accounts, whose cost is less sensitive to changes in interest rates. We intend to focus our strategy on utilizing our deposit base and operating platform to increase these deposit transaction accounts.
ITEM 4
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of the end of the period covered by this report.
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Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
From time to time we are a party to various litigation matters incidental to the conduct of our business. Except as set forth below, we are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.
We were a party to a lawsuit in the United States Court of Federal Claims seeking a ruling that the United States Postal Service (“USPS”) is obligated to make payment to us with respect to invoices totaling approximately $19.4 million, net of customer reserves, that it separately paid to our customer, a vendor to the USPS who hauled mail pursuant to contracts it has with such entity, in violation of notices provided to the USPS that such payments were to be made directly to us (the “Misdirected Payments Receivable”).
On June 30, 2025, we reached an agreement with the USPS ("the USPS Settlement") whereby the USPS agreed to pay us $47.5 million to settle the litigation in the United States Court of Federal Claims and certain other related proceedings. Such settlement was entered into as part of a global settlement of the disputes related to the Misdirected Payments Receivable, other amounts we asserted were due to us from USPS for other balances owned to us as a result of their failure to honor our notices of assignment, and certain claims of the large carrier involved in this matter against the USPS for underpayment on certain transportation contracts in which we had a security interest. We received payment of the full $47.5 million settlement proceeds on July 10, 2025. The receipt of such proceeds allowed up to retire the Misdirected Payments Receivable in full on such date. The remainder of the settlement proceeds were distributed as more fully set forth in Note 1 to our financial statements for the quarter ended June 30, 2025.
Item 1A. Risk Factors
There have been no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In connection with the closing of the previously announced acquisition of Greenscreens AI, Inc. (“Greenscreens”) by TBK Bank, SSB (“TBK Bank”), on May 8, 2025 Triumph Financial, Inc. (the “Company”) issued a total of 256,984 shares of Company common stock as stock consideration to certain stockholders of Greenscreens (the “Stock Consideration”). The Stock Consideration has not been registered under the Securities Act of 1933, as amended, and has been issued in reliance upon the exemption provided in Regulation D promulgated thereunder.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements
On August 29, 2024, Mr. Aaron P. Graft, the Company’s President and Chief Executive Officer, adopted a written plan for the sale of our common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (the “Graft Trading Plan”). The Graft Trading Plan covers the sale of up to 54,000 shares of the Company’s common stock in several transactions over a period commencing after the later of (1) 91 days from the execution of the Graft Trading Plan and (2) the third trading day following the public disclosure of the Company’s financial results on Form 10-Q for the quarter ended September 30, 2024, and will cease upon the earlier of November 28, 2025 or the sale of all shares subject to the Graft Trading Plan.
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On March 4, 2025, Mr. Edward J. Schreyer, the Company’s Executive Vice President and Chief Operating Officer, adopted a written plan for the sale of our common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (the “Schreyer Trading Plan”). The Schreyer Trading Plan covers the sale of up to 90 percent of the net shares (after applicable tax withholding) of the Company’s common stock received by Mr. Schreyer upon the May 1, 2025 vesting of equity awards previously issued to Mr. Schreyer, to occur in several transactions over a period commencing after the later of (1) 90 days from the execution of the Schreyer Trading Plan and (2) the second trading day following the public disclosure of the Company’s financial results on Form 10-Q for the quarter ended March 31, 2025, and will cease upon the earlier of January 31, 2026 or the sale of all shares subject to the Schreyer Trading Plan.
On March 12, 2025, Mr. Adam D. Nelson, the Company’s Executive Vice President and General Counsel, adopted a written plan for the sale of our common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (the “Nelson Trading Plan”). The Nelson Trading Plan covers the sale of up to 10,000 shares of the Company’s common stock in several transactions over a period commencing after the later of (1) 90 days from the execution of the Nelson Trading Plan and (2) the second trading day following the public disclosure of the Company’s financial results on Form 10-Q for the quarter ended March 31, 2025, and will cease upon the earlier of March 31, 2026 or the sale of all shares subject to the Nelson Trading Plan.
As of the end of the second quarter of 2025, none of our other directors or executive officers adopted Rule 10b5-1 trading plans and none of our directors or executive officers terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
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Item 6. Exhibits
Exhibits (Exhibits marked with a “†” denote management contracts or compensatory plans or arrangements)
3.1
3.2
3.3
3.4
3.5
3.6
10.1†
10.2†
10.3†
10.4†
31.1
31.2
32.1
101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
* Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the Securities and Exchange Commission upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TRIUMPH FINANCIAL INC.
(Registrant)
Date: July 16, 2025 /s/ Aaron P. Graft
Aaron P. Graft
President and Chief Executive Officer
Date: July 16, 2025 /s/ W. Bradley Voss
W. Bradley Voss
Chief Financial Officer
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EX-10.1 2 a10-1rsu2025.htm EX-10.1 Document
Exhibit 10.1

2014 OMNIBUS INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of May 1, 2025 (the “Grant Date”), is made by and between Triumph Financial, Inc., a Texas corporation (the “Company”), and [[FIRSTNAME]] [[LASTNAME]] (“Participant”). Capitalized terms used herein without definition have the meanings ascribed to such terms in the Triumph Financial, Inc. 2014 Omnibus Incentive Plan (the “Plan”), pursuant to which this Award is granted.
WHEREAS, the Company has adopted the Plan to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and consultants and to provide the Company and its Subsidiaries and Affiliates with a means of providing incentives for future performance of services directly linked to the profitability of the Company’s businesses and increases in shareholder value; and
    WHEREAS, the Committee has determined that it would be in the best interests of the Company and its shareholders to grant Participant an award of Restricted Stock Units (“RSUs”) on the terms and subject to the conditions set forth in this Agreement and the Plan.
NOW THEREFORE, in consideration of the premises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
1.Grant of RSU Award.
(a)Grant. The Company hereby grants to Participant an award (the “RSU Award”) of [[SHARESGRANTED]] RSUs, on the terms and subject to the conditions set forth in this Agreement and as otherwise provided in the Plan. Each RSU represents the right to receive one Share on the terms, and subject to the conditions, set forth in this Agreement.
(b)Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan.
2.Vesting; Delivery of Shares.
(a)Generally. Except as may otherwise be provided herein, (i) one fourth (rounded down to the nearest whole Share if applicable) of the RSU Award shall become earned, vested and non-forfeitable on the first anniversary of the Grant Date, (ii) one fourth (rounded down to the nearest whole Share if applicable) of the RSU Award shall become earned, vested and non-forfeitable on the second annual anniversary of the Grant Date, (iii) one fourth (rounded down to the nearest whole Share if applicable) of the RSU Award shall become earned, vested and non-forfeitable on the third annual anniversary of the Grant Date, and (iv) the remaining RSU Award shall become earned, vested and non-forfeitable on the fourth annual anniversary of the Grant Date (each such date, a “Vesting Date”), in each case, subject to Participant not having incurred a Termination of Service prior to the applicable Vesting Date; provided that if such Termination of Service is due to Participant’s Retirement, except as otherwise provided in Section 2(c), the RSU Award shall continue to vest and become earned in accordance with the schedule set forth in this Section 2(a), so long as Participant does not engage in activities reasonably determined by the Committee to be competitive with the Company or any of its Affiliates (it being understood that in the event of any such engagement, the remaining portion of the RSU Award that has not vested shall be immediately forfeited). For purposes hereof, Retirement means a Termination of Service (other than a termination by the Company for Cause) on or after reaching the minimum retirement age adopted by the Company for its executives generally as in effect at the time of such Termination of Service.
    W/3088565
    

(b)Vesting upon Death or Disability. If Participant dies or becomes Disabled, the remaining unvested portion of the RSU Award shall immediately become earned, vested and non-forfeitable as of the date of Termination of Service.
(c)Vesting upon post-Change in Control Severance Event. If, during the two-year period following a Change in Control, Participant incurs a Termination of Service due to a termination by the Company without Cause or due to the Participant’s Retirement, the remaining portion of the RSU Award that has not theretofore vested shall immediately become earned, vested and non-forfeitable as of the date of Termination of Service. If Participant is party to an Individual Agreement or covered under any severance plan or arrangement with a “good reason” or similar provision, a Termination of Employment by Participant for good reason or similar term (as defined in the applicable Individual Agreement or severance plan or similar arrangement) during such two-year period shall be treated as a termination by the Company without Cause for purposes of this paragraph.
(d)Other Termination of Service. If Participant incurs a Termination of Service prior to any Vesting Date for any reason other than as set forth in Section 2(b) and 2(c) above, any remaining portion of the RSU Award that has not theretofore vested shall be forfeited by Participant without consideration.
3.Tax Withholding. No later than the date as of which an amount first becomes includible in the gross income of Participant for federal income tax purposes with respect to any RSUs, Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all federal, state and local income and employment taxes that are required by applicable laws and regulations to be withheld with respect to such amount. Participant may direct the Company, to the extent permitted by law and as may be authorized by the Committee or as may otherwise be permitted under Section 14(d) of the Plan, to deduct any such taxes from any payment otherwise due to Participant, including the delivery of Shares of Common Stock that gives rise to the withholding requirement. The Company’s obligation to deliver the Shares underlying RSUs (or to make a book entry or other electronic notation indicating ownership of the Shares), is subject to the condition precedent that Participant either pay or provide for the amount of any such withholding.
4.Settlement of RSU Award. Vested RSUs shall be settled by the issuance of Shares within thirty (30) days following the Vesting Date, except that (a) if Participant dies or becomes Disabled or (b) if Participant incurs a Termination of Service during the two-year period following a 409A Change in Control, subject to Section 10(j), vested RSUs shall be settled by the issuance of Shares within thirty (30) days following such event. Nothing herein shall preclude the Company from settling this RSU Award upon a 409A Change in Control the Award if it is not replaced by a Replacement Award, to the extent such settlement is effectuated in accordance with Treas. Regs. § 1.409A-3(j)(ix).

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5.Dividend Equivalent Units. If the Company declares a cash dividend on its Common Stock, Participant will be entitled to be credited with dividend equivalent units equal to (i) the amount of such dividend declared and paid with respect to one Share, multiplied by (ii) the total number of unvested RSUs plus the number of dividend equivalent units previously credited with respect to such unvested RSUs, that are outstanding on the applicable dividend record date with respect to such dividend payment date, divided by (iii) the Fair Market Value of a Share on the dividend payment date. Dividend equivalent units will not be credited with interest. Each dividend equivalent unit represents the right to receive one Share and will become vested to the same extent as the underlying RSUs and settled at the same time as the underlying RSUs.
6.Transferability; Rights as a Stockholder. The RSU Award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, its Subsidiaries and its Affiliates; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. Until the issuance of the Shares subject to this RSU Award (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a holder of Common Stock shall exist with respect to this Award.
7.Adjustment. In the event of any event described in Section 3(c) of the Plan occurring after the Grant Date and while any portion of the RSU Award remains outstanding, the adjustment provisions as provided for under Section 3(c) of the Plan shall apply to the unvested portion of such RSU Award.
8.Change in Control. The provisions of this Section 8 shall govern the treatment of the RSU Award upon a Change of Control.
(a)In the event of a Change in Control of the Company occurring after the Grant Date and prior to any Vesting Date, the remaining unvested portion of the RSU Award (if and to the extent not previously forfeited) shall vest, except to the extent that another award meeting the requirements of Section 8(b) is provided to Participant to replace the RSU Award (any award meeting the requirements of Section 8(b), a “Replacement Award”).
(b)An award shall meet the conditions of this Section 8(b) (and hence qualify as a Replacement Award) if: (1) it relates to publicly traded equity securities of the Company or the surviving corporation following the Change in Control, (2) it is of the same type as the remaining unvested portion of the RSU Award, (3) it has a value at least equal to the value of the remaining unvested portion of the RSU Award as of the date of the Change in Control (other than in respect of customary fractional rounding of share amounts), (4) it contains terms relating to time-based vesting (including with respect to Termination of Service) that are substantially identical to those of this Award, and (5) its other terms and conditions are not less favorable to Participant than the terms and conditions of this RSU Award (including provisions that apply in the event of a subsequent Change in Control) as of the date of the Change in Control. Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of this RSU Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 8(b) are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

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9.Clawback Policy. Participant agrees that, notwithstanding any other provision of this Agreement or the Plan, the RSU Award and any Shares delivered thereunder shall be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of any clawback policy that the Company may adopt and that is applicable to Participant, as it may be amended from time to time, and any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation.
10.Miscellaneous.
(a)Waiver and Amendment. The Committee may unilaterally amend the terms of this Agreement and the RSU Award granted thereunder; provided that no such amendment shall, without the Participant’s consent, materially impair the rights of any Participant with respect to this Agreement and the RSU Award granted thereunder, except such an amendment made to cause the Plan, this Agreement, or the RSU Award granted thereunder to comply with applicable law, Applicable Exchange listing standards, or accounting rules. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.
(b)Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, facsimile, courier service or personal delivery:
if to the Company to:
Triumph Financial, Inc.
12700 Park Central Drive, Suite 1700
Dallas, TX 75251
Facsimile: (214) 237-3197
Attention: General Counsel
if to Participant: at the address last on the records of the Company.
All such notices, demands and other communications shall be deemed to have been duly given (i) when delivered by hand, if personally delivered; (ii) when delivered by courier, if delivered by commercial courier service; (iii) five business days after being deposited in the mail, postage prepaid, if mailed; and (iv) when receipt is mechanically acknowledged, if by facsimile.
(c)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.
(d)No Rights to Service. Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which is hereby expressly reserved, to remove, terminate or discharge Participant at any time for any reason whatsoever.

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(e)Beneficiary. Participant may file with the Company a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, change or revoke such designation by filing a new designation with the Company. The last such designation received by the Company shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Company prior to Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by Participant, the beneficiary shall be deemed to be his or her spouse or, if Participant is unmarried at the time of death, his or her estate.
(f)Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of Participant and the beneficiaries, executors, administrators, heirs and successors of Participant.
(g)Entire Agreement. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations with respect thereto.
(h)Bound by the Plan. By signing this Agreement, Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.
(i)Governing Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Texas without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Texas.
(j)Section 409A. Section 13 of the Plan is hereby incorporated by reference herein and shall apply to this Agreement as if set forth herein, mutatis mutandis.
(k)Headings. The headings of the Sections of this Agreement are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.
(l)Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
11.Compliance with Legal Requirements. The grant of the RSU Award and any other obligations of the Company under this Agreement shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Committee, in its sole discretion, may postpone the issuance or delivery of Shares as the Committee may consider appropriate and may require Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the Shares in compliance with applicable laws, rules and regulations.
[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
TRIUMPH FINANCIAL, INC.
image_01.jpg
By: _______________________
Name: Adam Nelson    
Title: EVP and General Counsel



PARTICIPANT


_ [[SIGNATURE]] __ ____ ____
[[FIRSTNAME]] [[LASTNAME]]


[Signature Page to 2025 RSU Award Agreement]



TRIUMPH BANCORP, INC.
RESTRICTIVE COVENANTS AGREEMENT
As a condition of any incentive compensation that I may earn and receive under any incentive-based compensation plan maintained by Triumph Financial, Inc. (together with its subsidiaries, the “Company”), and in particular, my receipt of restricted stock units granted under the terms of the Restricted Stock Unit Award Agreement entered into between the Company and me (such agreements, the “Award Agreements”), I agree to the terms and conditions of this Restrictive Covenants Agreement (“Agreement”):
(a)Access to Confidential Information. Employee understands and agrees that in the course of performing work on behalf of the Company, he will continue to have access to, and will continue to be given Confidential Information relating to the business of the Company. Employee acknowledges and agrees that such Confidential Information includes, but is not limited to financial information pertinent to the Company and its customers, and investors, customer lists, customer and investor identities and their preferences, confidential banking and financial information of both the Company and its customers and investors, and information that Employee may create or prepare certain information related to his duties. Employee hereby expressly agrees to maintain in strictest confidence and not to access without proper business purposes (including repetitive unnecessary access), use (including without limitation in any future business or personal relationship of Employee), publish, disclose or in any way authorize anyone else to use, publish or disclose in any way, any Confidential Information relating in any manner to the business or affairs of the Company and its customers and investors, except for legitimate business-related reasons while performing duties on behalf of the Company. Employee agrees further not to remove or retain any figures, financial information, personnel data, calculations, letters, documents, lists, papers, or copies thereof, which embody Confidential Information of the Company, and to return any such information in Employee’s possession at the conclusion of Employee’s use of such information and at the conclusion of Employee’s employment with the Company.
For purposes of this Agreement, “Confidential Information” includes, but is not limited to, information in the possession of, prepared by, obtained by, compiled by, or that is used by Company, its customers, investors and/or vendors, or is prepared by, obtained by, compiled by or that is used by Employee in conjunction with his duties, and (1) is proprietary to, about, or created by the Company, its customers, investors and/or vendors; (2) is information the disclosure of which might be detrimental to the interest of the Company, its investors or customers; or (3) is not typically disclosed by the Company, its customers, investors and/or vendors, or known by persons who are not associated with the Company.



(b)Restrictive Covenants. Employee acknowledges that, as a result of Employee’s service with the Company, a special relationship of trust and confidence will develop between Employee, the Company and its clients and customers, and that this relationship will generate a substantial amount of good will between the Company and its clients and customers. Employee further acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect it from the loss of its Confidential Information or its customer goodwill. Employee further acknowledges that throughout his service with the Company, Employee will be provided with access to and informed of confidential, proprietary and highly sensitive information relating to the Company’s clients and customers, which is a competitive asset of the Company, and which enables Employee to benefit from the goodwill and know-how of the Company. Therefore, as a material condition to the Company’s willingness to perform its obligations hereunder, Employee agrees that, for a period of twelve (12) months following the date of the termination of employment by the Company for any reason (except as specifically set forth below), Employee will not, either for himself or in conjunction with others:
(i)solicit, divert, take away, do business with, or provide information about, or attempt to solicit, divert, take away or do business with in any fashion any of the Company’s customers, clients, business or patrons about whom Employee has Confidential Information, or with whom Employee has done business or attempted to do business on behalf of the Company;
(ii)(i) offer employment to, enter into a contract for the employment of, or attempt to entice away from the Company, any individual who is at the time of such offer or attempt, or has been during the twelve months prior to such offer or attempt, an employee of the Company, (ii) interfere with the material business relationships of the Company, or entice away any material suppliers or contractors, (iii) procure or facilitate the making of any such offer or attempt by any other person, or (iv) solicit, directly or through any other person, any investor of the Company for purposes of facilitating any investment, partnership or business opportunity unrelated to the Company. The restriction in subsection (iv) above shall not apply to any investor with which the Employee had a preexisting relationship prior to becoming employed by the Company.
Notwithstanding anything to the contrary contained herein, the foregoing restrictions in Section (b) this Restrictive Covenants Agreement shall not apply in the event Employee is terminated by the Company without Cause (as defined in the Award Agreements) during the first twelve (12) months following Employee’s execution of the Award Agreements.
(c)Representations of Employee.
(i)EMPLOYEE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF THIS AGREEMENT.



(ii)EMPLOYEE ACKNOWLEDGES AND RECOGNIZES THE HIGHLY COMPETITIVE NATURE OF THE COMPANY’S BUSINESS, THAT ACCESS TO CONFIDENTIAL INFORMATION RENDERS THE EMPLOYEE SPECIAL AND UNIQUE WITHIN THE COMPANY’S INDUSTRY, AND THAT THE EMPLOYEE WILL HAVE THE OPPORTUNITY TO DEVELOP SUBSTANTIAL RELATIONSHIPS WITH EXISTING AND PROSPECTIVE CLIENTS, ACCOUNTS, CUSTOMERS, CONSULTANTS, CONTRACTORS, INVESTORS, AND STRATEGIC PARTNERS OF THE COMPANY DURING THE COURSE OF AND AS A RESULT OF THE EMPLOYEE’S EMPLOYMENT WITH THE COMPANY. IN LIGHT OF THE FOREGOING, EMPLOYEE RECOGNIZES AND ACKNOWLEDGES THAT THE RESTRICTIONS AND LIMITATIONS SET FORTH IN THIS AGREEMENT ARE REASONABLE AND VALID IN GEOGRAPHICAL AND TEMPORAL SCOPE AND IN ALL OTHER RESPECTS AND ARE ESSENTIAL TO PROTECT THE VALUE OF THE BUSINESS AND ASSETS OF THE COMPANY.
(d)Severable Provisions. The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision. In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, the parties hereto agree that said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.
(e)Intellectual Property. Employee agrees to disclose and hereby assigns to the Company any and all material of a proprietary nature, particularly including, without limitation, material subject to protection as trade secrets or as patentable ideas or copyrightable works, that Employee may conceive, invent, author or discover, either solely or jointly with another or other during Employee’s employment and that relates to or is capable of use in connection with the business of the Company or any employment or products offered, manufactured, used, sold or being developed by the Company at the time said material is developed. Employee will, upon request of the Company, either during or at any time after Employee’s employment ends, regardless of how or why Employee’s employment ends, execute and deliver all papers, including applications for patents and registrations for copyrights, and do such other legal acts (entirely at the Company’s expense) as may be necessary to obtain and maintain proprietary rights in any and all countries and to vest title thereto in the Company.



(f)Remedy. Employee understands and acknowledges that the Company has a legitimate business interest in preventing Employee from taking any actions in violation of this Policy and that this Policy is intended to protect the business and goodwill of the Company. Employee further acknowledges that a breach of this Policy will irreparably and continually damage the Company and that monetary damages alone will be inadequate to compensate the Company for such breach. Employee therefore agrees that in the event Employee violates any of the terms of this Policy, the Company will be entitled to, in addition to any other remedies available to it in law or in equity, seek temporary, preliminary and permanent injunctive relief and specific performance to enforce the terms of this Policy without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond. If Employee does take actions in violation of this Policy, Employee understands that the time periods set forth in in the applicable provisions herein will run from the date on which violations of those provisions, whether by injunction or otherwise, ends and not from the date that Employee’s employment ends. In the event any lawsuit, claim or other proceeding is brought to enforce the terms of this Policy, or to determine the validity of its terms, then the prevailing party will be entitled to recover from the non-prevailing party its reasonable attorneys’ fees and court costs incurred in obtaining enforcement of, or determining the validity of, this Policy.
(g)Waiver. Employee understands and agrees that in the event the Company waives or allows any breach of this Policy, such waiver or allowance will not constitute a waiver or allowance of any future breach, whether of a similar or dissimilar nature.
(h)Tolling. If the Company files a lawsuit in any court of competent jurisdiction alleging a breach of the non-disclosure or non-solicitation provisions of this Agreement by Employee, then any time period set forth in this Agreement relating to the post-termination restrictions on the activities of Employee will be deemed tolled as of the time the lawsuit is filed and will remain tolled until the dispute is finally resolved, either by written settlement agreement resolving all claims raised in the lawsuit, or by entry of a final judgment and final resolution of any post-judgment appellate proceedings.

* * * * * *

I, [[FIRSTNAME]] [[LASTNAME]], have executed this Agreement on the respective date set forth below:


Date: [[DATE]]        [[SIGNATURE]]    
(Signature)
EX-10.2 3 a10-2psubank2025.htm EX-10.2 Document
Exhibit 10.2

2014 OMNIBUS INCENTIVE PLAN
PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of May 1, 2025 (the “Grant Date”), is made by and between Triumph Financial, Inc., a Texas corporation (the “Company”), and [[FIRSTNAME]] [[LASTNAME]] (“Participant”). Capitalized terms used herein without definition have the meanings ascribed to such terms in the Triumph Financial, Inc. 2014 Omnibus Incentive Plan (the “Plan”), pursuant to which this Award is granted.
WHEREAS, the Company has adopted the Plan to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and consultants and to provide the Company and its Subsidiaries and Affiliates with a means of providing incentives for future performance of services directly linked to the profitability of the Company’s businesses and increases in shareholder value; and
    WHEREAS, the Committee has determined that it would be in the best interests of the Company and its shareholders to grant Participant an award of Performance Restricted Stock Units (“PSUs”) on the terms and subject to the conditions set forth in this Agreement and the Plan.
NOW THEREFORE, in consideration of the premises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
1.Grant of PSU Award.
(a)Grant. The Company hereby grants to Participant an award (the “PSU Award”) of a target aggregate number of [[SHARESGRANTED]] PSUs (the “Target PSUs”), on the terms and subject to the conditions set forth in this Agreement and as otherwise provided in the Plan. Each PSU represents the right to receive one Share on the terms, and subject to the conditions, set forth in this Agreement. Subject to the Award Maximum, the total number of PSUs that may be earned pursuant to the PSU Award in accordance with this Agreement shall range from 0% to 350% of the Target PSUs.
(b)Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan.
2.Vesting. Except as may otherwise be provided herein, the PSU Award shall become earned, vested and nonforfeitable according to the following provisions:
(a)General Vesting. Except as may otherwise be provided herein, subject to the Award Maximum, a number of PSUs subject to the PSU Award shall be earned (such number, the “Earned PSUs”) based on the achievement of the Performance Goals set forth in Exhibit A hereto and the Earned PSUs shall vest on the date on which the Committee determines the extent to which the Performance Goals have been achieved (the “Vesting Date”), which determination shall occur no later than thirty (30) days
    W/3080931
    

following the conclusion of the Performance Period set forth on Exhibit A, subject to Participant not having incurred a Termination of Service prior to the Vesting Date.
(b)Death, Disability, and Retirement. If Participant experiences a Termination of Service after the Grant Date due to Participant’s death or Disability, or after the first anniversary of the Grant Date due to Participant’s Retirement, then a portion of the PSU Award, calculated by multiplying the Target PSUs by a fraction, the numerator of which is equal to the number of days worked by Participant during the Performance Period and the denominator of which is the total number of days in the Performance Period (the “Prorated Portion”), shall remain outstanding and eligible to vest in accordance with Section 2(a) based on the actual level of achievement of the Performance Goals, so long as Participant does not breach any restrictive covenants set forth in any written agreement between Participant and the Company (it being understood that in the event of any such breach prior to the Vesting Date, the Prorated Portion shall be immediately forfeited). For purposes hereof, “Retirement” means a Termination of Service on or after reaching the minimum retirement age adopted by the Company for its executives generally as in effect at the time of such Termination of Service (or, if earlier, as in effect immediately prior to a Change in Control). For the avoidance of doubt, the Target PSUs that do not constitute the Prorated Portion shall be forfeited as of the date of Termination of Service.
(c)Termination without Cause or Resignation for Good Reason.
(i)If, after the first anniversary of the Grant Date (and other than during the two-year period immediately following a Change in Control), a Participant incurs a Termination of Service due to a termination by the Company without Cause (as defined in Exhibit B), or due to a resignation by Participant for Good Reason (as defined in Exhibit B), the Prorated Portion shall remain outstanding and eligible to vest in accordance with Section 2(a) based on the actual level of achievement of the Performance Goals, so long as Participant does not breach any restrictive covenants set forth in any written agreement between Participant and the Company (it being understood that in the event of any such breach prior to the Vesting Date, the Prorated Portion shall be immediately forfeited). For the avoidance of doubt, the Target PSUs that do not constitute the Prorated Portion shall be forfeited as of the date of Termination of Service.
(ii)If, during the two-year period immediately following a Change in Control, a Participant incurs a Termination of Service due to a termination by the Company without Cause (as defined in Exhibit B), or due to a resignation by Participant for Good Reason (as defined in Exhibit B), the Replacement Award (as defined in Section 7 below) granted in respect of the PSU Award shall vest in full.
(d)Other Termination of Service. If Participant incurs a Termination of Service prior to the Vesting Date for any reason other than as set forth in Section 2(b) and 2(c) above, the PSU Award shall be forfeited by Participant without consideration.
3.Tax Withholding. No later than the date as of which an amount first becomes includible in the gross income of Participant for federal income tax purposes with respect to any PSUs, Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all federal, state and local income and employment taxes that are required by applicable laws and regulations to be withheld with respect to such amount. Participant may direct the Company, to the extent permitted by law and as may be authorized by the Committee or as may otherwise be permitted under Section 14(d) of the Plan, to deduct any such taxes from any payment otherwise due to Participant, including the delivery of Shares of Common Stock that gives rise to the withholding requirement. The Company’s obligation to

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deliver the Shares underlying Earned PSUs (or to make a book entry or other electronic notation indicating ownership of the Shares), is subject to the condition precedent that Participant either pay or provide for the amount of any such withholding.
4.Settlement of PSU Award. The Earned PSUs shall be settled by the issuance of Shares within thirty (30) days following the Vesting Date (except (a) as otherwise provided in Section 7(a), and (b) that Earned PSUs will be settled upon a Participant’s Termination of Service following a Change in Control by the issuance of Shares within thirty (30) days following the Termination of Service; provided that if the PSU Award constitutes “nonqualified deferred compensation” subject to Section 409A of the Code, this clause (b) shall apply only if the Termination of Service occurs within two (2) years following a 409A Change in Control).
5.Transferability; Rights as a Stockholder. The PSU Award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, its Subsidiaries and its Affiliates; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. Until the issuance of the Shares subject to this PSU Award (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a holder of Common Stock shall exist with respect to this Award.
6.Adjustment. In the event of any event described in Section 3(c) of the Plan occurring after the Grant Date and while the PSU Award remains outstanding, the adjustment provisions as provided for under Section 3(c) of the Plan shall apply to the PSU Award.
7.Change in Control. The provisions of this Section 7 shall govern the treatment of the PSU Award upon a Change of Control.
(a)In the event of a Change in Control of the Company occurring after the Grant Date and prior to the Vesting Date, the PSU Award (if and to the extent not previously forfeited) shall vest and be deemed to be earned, with the Performance Goals deemed achieved at the level of achievement of the Performance Goals as determined by the Committee as of the latest practicable date prior to the Change in Control and in accordance with Exhibit A (treating such date as the final day of the Performance Period for purposes thereof), and shall be settled within ten (10) days following the Change in Control (provided that if the PSU Award constitutes “nonqualified deferred compensation” subject to Section 409A of the Code, settlement shall occur at such time only if (i) the Change in Control is a 409A Change in Control and (ii) such settlement would not constitute an impermissible acceleration under Section 409A of the Code, and otherwise such PSU Award will be settled in accordance with Section 4), except to the extent that another award meeting the requirements of Section 7(b) is provided to Participant to replace the PSU Award (any award meeting the requirements of Section 7(b), a “Replacement Award”).
(b)An award shall meet the conditions of this Section 7(b) (and hence qualify as a Replacement Award) if: (1) it relates to publicly traded equity securities of the Company or the surviving corporation following the Change in Control, (2) it is of the same type as the PSU Award (except that the Replacement Award shall be subject solely to time-based vesting for the remainder of the applicable performance period (or such shorter period as determined by the Committee) and the Performance Goals shall be deemed to be achieved at the level of achievement of the Performance Goals as determined by the Committee as of the latest practicable date prior to the Change

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in Control and in accordance with Exhibit A, treating such date as the final day of the Performance Period for purposes thereof), (3) it has a value at least equal to the value of the PSU Award as of the date of the Change in Control (other than in respect of customary fractional rounding of share amounts and exercise price), (4) it contains terms relating to time-based vesting (including with respect to Termination of Service) that are substantially identical to those of this Award, and (5) its other terms and conditions are not less favorable to Participant than the terms and conditions of this Award (including provisions that apply in the event of a subsequent Change in Control) as of the date of the Change in Control. Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of this Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 7(b) are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
8.Clawback Policy. Participant agrees that, notwithstanding any other provision of this Agreement or the Plan, the PSU Award and any Shares delivered thereunder shall be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of any clawback policy that the Company may adopt and that is applicable to Participant, as it may be amended from time to time, and any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation.
9.Miscellaneous.
(a)Waiver and Amendment. The Committee may unilaterally amend the terms of this Agreement and the PSU Award granted thereunder; provided that no such amendment shall, without the Participant’s consent, materially impair the rights of any Participant with respect to this Agreement and the PSU Award granted thereunder, except such an amendment made to cause the Plan, this Agreement, or the PSU Award granted thereunder to comply with applicable law, Applicable Exchange listing standards, or accounting rules. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.
(b)Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, facsimile, courier service or personal delivery:
if to the Company to:
Triumph Financial, Inc.
12700 Park Central Drive, Suite 1700
Dallas, TX 75251
Facsimile: (214) 237-3197
Attention: General Counsel
if to Participant: at the address last on the records of the Company.
All such notices, demands and other communications shall be deemed to have been duly given (i) when delivered by hand, if personally delivered; (ii) when

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delivered by courier, if delivered by commercial courier service; (iii) five business days after being deposited in the mail, postage prepaid, if mailed; and (iv) when receipt is mechanically acknowledged, if by facsimile.
(c)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.
(d)No Rights to Service. Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which is hereby expressly reserved, to remove, terminate or discharge Participant at any time for any reason whatsoever.
(e)Beneficiary. Participant may file with the Company a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, change or revoke such designation by filing a new designation with the Company. The last such designation received by the Company shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Company prior to Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by Participant, the beneficiary shall be deemed to be his or her spouse or, if Participant is unmarried at the time of death, his or her estate.
(f)Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of Participant and the beneficiaries, executors, administrators, heirs and successors of Participant.
(g)Entire Agreement. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations with respect thereto.
(h)Bound by the Plan. By signing this Agreement, Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.
(i)Governing Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Texas without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Texas.
(j)Headings. The headings of the Sections of this Agreement are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.
(k)Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
10.Compliance with Legal Requirements. The grant of the PSU Award and any other obligations of the Company under this Agreement shall be subject to all applicable federal and

5


state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Committee, in its sole discretion, may postpone the issuance or delivery of Shares as the Committee may consider appropriate and may require Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the Shares in compliance with applicable laws, rules and regulations.
[Signature Page Follows]

6


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

TRIUMPH FINANCIAL, INC.
image_02.jpg
By: _______________________
Name: Adam Nelson    
Title: EVP and General Counsel



PARTICIPANT


_ [[SIGNATURE]] __ ____ ____
[[FIRSTNAME]] [[LASTNAME]]



[Signature Page to 2025 PSU Award Agreement]


TRIUMPH FINANCIAL, INC.
RESTRICTIVE COVENANTS AGREEMENT
As a condition of any incentive compensation that I may earn and receive under any incentive-based compensation plan maintained by Triumph Financial, Inc. (together with its subsidiaries, the “Company”), and in particular, my receipt of restricted stock units granted under the terms of the Performance Restricted Stock Unit Award Agreement entered into between the Company and me (such agreements, the “Award Agreements”), I agree to the terms and conditions of this Restrictive Covenants Agreement (“Agreement”):
(a)Access to Confidential Information. Employee understands and agrees that in the course of performing work on behalf of the Company, he will continue to have access to, and will continue to be given Confidential Information relating to the business of the Company. Employee acknowledges and agrees that such Confidential Information includes, but is not limited to financial information pertinent to the Company and its customers, and investors, customer lists, customer and investor identities and their preferences, confidential banking and financial information of both the Company and its customers and investors, and information that Employee may create or prepare certain information related to his duties. Employee hereby expressly agrees to maintain in strictest confidence and not to access without proper business purposes (including repetitive unnecessary access), use (including without limitation in any future business or personal relationship of Employee), publish, disclose or in any way authorize anyone else to use, publish or disclose in any way, any Confidential Information relating in any manner to the business or affairs of the Company and its customers and investors, except for legitimate business-related reasons while performing duties on behalf of the Company. Employee agrees further not to remove or retain any figures, financial information, personnel data, calculations, letters, documents, lists, papers, or copies thereof, which embody Confidential Information of the Company, and to return any such information in Employee’s possession at the conclusion of Employee’s use of such information and at the conclusion of Employee’s employment with the Company.
For purposes of this Agreement, “Confidential Information” includes, but is not limited to, information in the possession of, prepared by, obtained by, compiled by, or that is used by Company, its customers, investors and/or vendors, or is prepared by, obtained by, compiled by or that is used by Employee in conjunction with his duties, and (1) is proprietary to, about, or created by the Company, its customers, investors and/or vendors; (2) is information the disclosure of which might be detrimental to the interest of the Company, its investors or customers; or (3) is not typically disclosed by the Company, its customers, investors and/or vendors, or known by persons who are not associated with the Company.
(b)Restrictive Covenants. Employee acknowledges that, as a result of Employee’s service with the Company, a special relationship of trust and confidence will develop between Employee, the Company and its clients and customers, and that this relationship will generate a substantial amount of good will between the Company and its clients and customers. Employee further acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect it from the loss of its Confidential Information or its customer goodwill. Employee further acknowledges that throughout his service with the Company, Employee will be provided with access to and informed of confidential, proprietary and highly sensitive information relating to the Company’s clients and customers, which is a competitive asset of the Company, and which enables Employee to benefit from the goodwill and know-how
8


of the Company. Therefore, as a material condition to the Company’s willingness to perform its obligations hereunder, Employee agrees that, for a period of twelve (12) months following the date of the termination of employment by the Company for any reason (except as specifically set forth below), Employee will not, either for himself or in conjunction with others:
(i)solicit, divert, take away, do business with, or provide information about, or attempt to solicit, divert, take away or do business with in any fashion any of the Company’s customers, clients, business or patrons about whom Employee has Confidential Information, or with whom Employee has done business or attempted to do business on behalf of the Company;
(ii)(i) offer employment to, enter into a contract for the employment of, or attempt to entice away from the Company, any individual who is at the time of such offer or attempt, or has been during the twelve months prior to such offer or attempt, an employee of the Company, (ii) interfere with the material business relationships of the Company, or entice away any material suppliers or contractors, (iii) procure or facilitate the making of any such offer or attempt by any other person, or (iv) solicit, directly or through any other person, any investor of the Company for purposes of facilitating any investment, partnership or business opportunity unrelated to the Company. The restriction in subsection (iv) above shall not apply to any investor with which the Employee had a preexisting relationship prior to becoming employed by the Company.
Notwithstanding anything to the contrary contained herein, the foregoing restrictions in Section (b) this Restrictive Covenants Agreement shall not apply in the event Employee is terminated by the Company without Cause (as defined in the Award Agreements) during the first twelve (12) months following Employee’s execution of the Award Agreements.
(c)Representations of Employee.
(i)EMPLOYEE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF THIS AGREEMENT.
(ii)EMPLOYEE ACKNOWLEDGES AND RECOGNIZES THE HIGHLY COMPETITIVE NATURE OF THE COMPANY’S BUSINESS, THAT ACCESS TO CONFIDENTIAL INFORMATION RENDERS THE EMPLOYEE SPECIAL AND UNIQUE WITHIN THE COMPANY’S INDUSTRY, AND THAT THE EMPLOYEE WILL HAVE THE OPPORTUNITY TO DEVELOP SUBSTANTIAL RELATIONSHIPS WITH EXISTING AND PROSPECTIVE CLIENTS, ACCOUNTS, CUSTOMERS, CONSULTANTS, CONTRACTORS, INVESTORS, AND STRATEGIC PARTNERS OF THE COMPANY DURING THE COURSE OF AND AS A RESULT OF THE EMPLOYEE’S EMPLOYMENT WITH THE COMPANY. IN LIGHT OF THE FOREGOING, EMPLOYEE RECOGNIZES AND ACKNOWLEDGES THAT THE RESTRICTIONS AND LIMITATIONS SET FORTH IN THIS AGREEMENT ARE REASONABLE AND VALID IN GEOGRAPHICAL AND TEMPORAL SCOPE AND IN ALL OTHER RESPECTS AND ARE ESSENTIAL TO PROTECT THE VALUE OF THE BUSINESS AND ASSETS OF THE COMPANY.
(d)Severable Provisions. The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other
9


provision. In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, the parties hereto agree that said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.
(e)Intellectual Property. Employee agrees to disclose and hereby assigns to the Company any and all material of a proprietary nature, particularly including, without limitation, material subject to protection as trade secrets or as patentable ideas or copyrightable works, that Employee may conceive, invent, author or discover, either solely or jointly with another or other during Employee’s employment and that relates to or is capable of use in connection with the business of the Company or any employment or products offered, manufactured, used, sold or being developed by the Company at the time said material is developed. Employee will, upon request of the Company, either during or at any time after Employee’s employment ends, regardless of how or why Employee’s employment ends, execute and deliver all papers, including applications for patents and registrations for copyrights, and do such other legal acts (entirely at the Company’s expense) as may be necessary to obtain and maintain proprietary rights in any and all countries and to vest title thereto in the Company.
(f)Remedy. Employee understands and acknowledges that the Company has a legitimate business interest in preventing Employee from taking any actions in violation of this Policy and that this Policy is intended to protect the business and goodwill of the Company. Employee further acknowledges that a breach of this Policy will irreparably and continually damage the Company and that monetary damages alone will be inadequate to compensate the Company for such breach. Employee therefore agrees that in the event Employee violates any of the terms of this Policy, the Company will be entitled to, in addition to any other remedies available to it in law or in equity, seek temporary, preliminary and permanent injunctive relief and specific performance to enforce the terms of this Policy without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond. If Employee does take actions in violation of this Policy, Employee understands that the time periods set forth in in the applicable provisions herein will run from the date on which violations of those provisions, whether by injunction or otherwise, ends and not from the date that Employee’s employment ends. In the event any lawsuit, claim or other proceeding is brought to enforce the terms of this Policy, or to determine the validity of its terms, then the prevailing party will be entitled to recover from the non-prevailing party its reasonable attorneys’ fees and court costs incurred in obtaining enforcement of, or determining the validity of, this Policy.
(g)Waiver. Employee understands and agrees that in the event the Company waives or allows any breach of this Policy, such waiver or allowance will not constitute a waiver or allowance of any future breach, whether of a similar or dissimilar nature.
(h)Tolling. If the Company files a lawsuit in any court of competent jurisdiction alleging a breach of the non-disclosure or non-solicitation provisions of this Agreement by Employee, then any time period set forth in this Agreement relating to the post-termination restrictions on the activities of Employee will be deemed tolled as of the time the lawsuit is filed and will remain tolled until the dispute is finally resolved, either by written settlement agreement resolving all claims raised in the lawsuit, or by entry of a final judgment and final resolution of any post-judgment appellate proceedings.
10



* * * * * *

I, [[FIRSTNAME]] [[LASTNAME]], have executed this Agreement on the respective date set forth below:


Date: [[DATE]]         [[SIGNATURE]]    
(Signature)

11


EXHIBIT A

Performance Goals

Performance Measure:

The performance measures for the Performance Goal are (A) the Company’s relative Total Shareholder Return (as defined below) as compared to the TSR of the companies identified below as the “Peer Group” over the period commencing on and including May 1, 2025 and ending on and including April 30, 2028 (the “Performance Period”); provided, that if, on the last day of the Performance Period, one of the listed companies is no longer publicly traded, such company shall not be considered to be part of the Peer Group and shall not be replaced and (B) the Company’s absolute Total Shareholder Return over the Performance Period.

Performance Goal:

Subject to the terms, definitions and provisions of this PSU Award and the Plan, Participant will be entitled to receive a number of shares of Shares equal to the number of Earned PSUs (subject to the Award Maximum). The number of Earned PSUs will be equal to the number of Target PSUs (plus the number of dividend equivalent units credited with respect thereto), multiplied by (A) the Relative TSR Vesting Percentage, multiplied by (B) the Absolute TSR Modifier.

The Relative TSR Vesting Percentage shall be correlated to the Company’s Relative TSR Percentile for the Performance Period in accordance with the table below (with linear interpolation between the 25th and 75th percentiles and between the 75th and 90th percentiles, as applicable):

Relative TSR Percentile
Relative TSR Vesting Percentage
Below 25th percentile
0%
25th percentile
50%
75th percentile
150%
90th percentile or above
175%

The Absolute TSR Modifier shall be correlated to the Company’s absolute Total Shareholder Return for the Performance Period in accordance with the table below (with linear interpolation between 30% and 100% absolute Total Shareholder Return):

Absolute TSR
Absolute TSR Modifier
30% or below
100%
100% or above
200%


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Any PSUs that were eligible to vest with respect to the Performance Period and did not become Earned PSUs in accordance with this Exhibit A shall be forfeited and cancelled as of the Vesting Date.


Definitions

“Award Maximum” shall mean:
(a) in the event the Company has a negative Total Shareholder Return for the Performance Period, 100% of the Target PSUs, and

(b) in the event that clause (a) is not applicable, and the value of the Earned PSUs (computed as the product of the number of the Earned PSUs determined without regard to the Award Maximum, multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Vesting Date) would exceed 8 times the initial value of the Target PSUs (computed as the product of the number of Target PSUs multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Grant Date), such number of PSUs that, if multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Vesting Date, would equal 8 times the initial value of the Target PSUs (computed as the product of the Target PSUs multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Grant Date).

“Beginning Stock Price” shall mean the average of the closing prices of common shares during the twenty (20) consecutive trading days ending on the last trading day immediately preceding the first day of the Performance Period.

“Ending Stock Price” shall mean the average of the closing prices of common shares (as appropriately adjusted to reflect stock splits, spin-offs, and similar transactions that occurred during the Performance Period) during the twenty (20) consecutive trading days ending on the last trading day of the Performance Period. If a Change in Control occurs during the Performance Period, the Ending Stock Price of the Company shall equal (i) the value of the consideration paid for each Share in the Change in Control transaction, with the value of any non-cash consideration determined by the Committee in its discretion, or (ii) if no consideration is paid in respect of Shares in connection with the Change in Control, the volume weighted average price of a Share on the Nasdaq Global Select Market during the period of twenty (20) consecutive trading days ending on, and including, the last practicable trading day preceding the Change in Control.

“Total Shareholder Return” shall mean the appreciation of share price during the Performance Period, plus any Dividends Paid on the common stock during such Performance Period, calculated as follows:

[ Ending Stock Price minus Beginning Stock Price plus Dividends Paid ]

divided by

13


[ Beginning Stock Price ]


“Relative TSR Percentile” shall mean the percentile rank of the Company’s TSR relative to the TSR of the companies in the Peer Group for the Performance Period. Relative TSR Percentile will be determined by ranking the TSR of the Company and each of the companies in the Peer Group (with the company having the lowest TSR being ranked number 1, the company with the second lowest TSR being ranked number 2, and so forth) and determining the Company’s percentile rank based upon its position in the list by dividing the Company’s position by the total number of companies (including the Company) in the Peer Group and rounding the quotient to the nearest hundredth.

“Dividends Paid” shall mean all dividends paid with respect to an ex-dividend date that occurs during the Performance Period (whether or not the dividend payment date occurs during the Performance Period), which shall be deemed to have been reinvested in the underlying common shares and shall include dividends paid with respect to such reinvested dividends, appropriately adjusted to reflect stock splits, spin-offs, and similar transactions.

“Peer Group” shall mean the companies set on Exhibit C hereto; provided, that if, on the last day of the Performance Period, one of the foregoing companies is no longer publicly traded, such companies shall not be considered to be part of the Peer Group and shall not be replaced.





14




EXHIBIT B

Certain Definitions

“Cause” shall mean the Company’s determination in good faith that Participant: (i) has misappropriated, stolen or embezzled funds or property from the Company or any of its subsidiaries or affiliates, or secured or attempted to secure personally any profit in connection with any transaction entered into on behalf of the Company or any of its subsidiaries or affiliates, (ii) has been indicted or arrested on a felony, (iii) has neglected his or her employment duties, (iv) has materially violated a restrictive covenant contained in any written agreement between Participant and the Company, (v) has willfully violated or breached any material provision of any written agreement between Participant and the Company in any material respect or violated any material law or regulation or (vi) any other misconduct by Participant that is injurious to the financial condition or business reputation of the Company or any of its Subsidiaries or Affiliates.

“Good Reason”
(a)    In the case of a voluntary termination of employment not occurring on or after a Change in Control, “Good Reason” shall mean:
(i)    a material reduction in Participant’s base salary as in effect immediately prior to Participant’s “Good Reason Notice of Termination” as defined below unless such reduction is made in accordance with a uniform reduction in base salaries of the Company’s similarly situated employees; or
(ii)     a material reduction in Participant’s target annual bonus opportunity as in effect immediately prior to Participant’s Good Reason Notice of Termination unless such reduction is made in accordance with a uniform reduction in target annual bonus opportunity of the Company’s similarly situated employees.

(b) In the case of a voluntary termination of employment occurring on or after a Change in Control, “Good Reason” shall mean:
(i)     a material reduction in Participant’s position, authority, duties or responsibilities relative to such position, authority, duties or responsibilities immediately prior to the Change in Control;
(ii)     a material reduction in Participant’s base salary opportunity as in effect immediately prior to the Change in Control;
(iii)     a material reduction in Participant’s target annual bonus opportunity as in effect immediately prior to the Change in Control; or
(iv)     receipt of notice by Participant with regard to the mandatory relocation of the office at which Participant is to perform the majority of his duties following the Change in
15


Control to a location more than 50 miles from the location at which Participant performed such duties prior to the Change in Control; provided that such new location is farther from Participant’s residence than the prior location.
(c)     Notwithstanding anything in this Agreement to the contrary, no act, omission or event shall constitute grounds for a voluntary termination due to “Good Reason” under either paragraph (a) or (b) immediately above unless:
(i)     Participant provides the Company thirty (30) day advance written notice of his or her intent to termination employment for Good Reason which notice must describe the claimed act, omission or event giving rise to Good Reason (“Good Reason Notice of Termination”);
(ii)     the Good Reason Notice of Termination is given within ninety (90) days of Participant’s first actual knowledge of such act, omission or event;
(iii)     the Company fails to cure such act, omission or event within the thirty (30) day period after receiving the Good Reason Notice of Termination; and
(iv)     Participant’s termination of employment for Good Reason actually occurs at the end of such 30-day cure period if the Good Reason is not cured.


16


EXHIBIT C – BANK PEER GROUP

Company (n=182) Assets ($M) Market Cap - 3/31/2025 ($M) GICS Sub-Industry
FY2024 TTM
First Interstate BancSystem, Inc. $29,137 $29,137 $2,995 Regional Banks
WaFd, Inc. $28,060 $27,684 $2,331 Regional Banks
Glacier Bancorp, Inc. $27,903 $27,903 $5,019 Regional Banks
United Community Banks, Inc. $27,720 $27,720 $3,360 Regional Banks
Simmons First National Corporation $26,876 $26,876 $2,583 Regional Banks
Ameris Bancorp $26,262 $26,262 $3,961 Regional Banks
Eastern Bankshares, Inc. $25,558 $25,558 $3,283 Regional Banks
Atlantic Union Bankshares Corporation $24,585 $24,585 $2,807 Regional Banks
Provident Financial Services, Inc. $24,052 $24,052 $2,241 Regional Banks
First Hawaiian, Inc. $23,828 $23,828 $3,084 Regional Banks
Bank of Hawaii Corporation $23,601 $23,601 $2,744 Regional Banks
Cathay General Bancorp $23,055 $23,055 $3,024 Regional Banks
Axos Financial, Inc. $22,855 $23,709 $3,684 Regional Banks
Home Bancshares, Inc. (Conway, AR) $22,491 $22,491 $5,613 Regional Banks
Customers Bancorp, Inc. $22,308 $22,308 $1,580 Regional Banks
WSFS Financial Corporation $20,814 $20,814 $3,037 Regional Banks
Independent Bank Corp. $19,374 $19,374 $2,669 Regional Banks
First BanCorp. $19,293 $19,293 $3,122 Regional Banks
WesBanco, Inc. $18,684 $18,684 $2,073 Regional Banks
First Financial Bancorp. $18,570 $18,570 $2,384 Regional Banks
First Merchants Corporation $18,312 $18,312 $2,367 Regional Banks
Trustmark Corporation $18,152 $18,152 $2,097 Regional Banks
Renasant Corporation $18,035 $18,035 $2,162 Regional Banks
Pacific Premier Bancorp, Inc. $17,904 $17,904 $2,056 Regional Banks
ServisFirst Bancshares, Inc. $17,352 $17,352 $4,508 Regional Banks
TowneBank $17,247 $17,247 $2,538 Regional Banks
TFS Financial Corporation $17,091 $17,058 $3,452 Regional Banks
Hope Bancorp, Inc. $17,054 $17,054 $1,264 Regional Banks
Community Financial System, Inc. $16,386 $16,386 $2,997 Regional Banks
Hilltop Holdings Inc. $16,268 $16,268 $1,975 Regional Banks
Banner Corporation $16,200 $16,200 $2,198 Regional Banks
International Bancshares Corporation $15,739 $15,739 $3,923 Regional Banks
17


Enterprise Financial Services Corp $15,596 $15,596 $1,987 Regional Banks
Seacoast Banking Corporation of Florida $15,176 $15,176 $2,178 Regional Banks
CVB Financial Corp. $15,154 $15,154 $2,577 Regional Banks
Northwest Bancshares, Inc. $14,408 $14,408 $1,533 Regional Banks
Dime Community Bancshares, Inc. $14,353 $14,353 $1,217 Regional Banks
First Financial Bankshares, Inc. $13,979 $13,979 $5,102 Regional Banks
NBT Bancorp Inc. $13,787 $13,787 $2,027 Regional Banks
BancFirst Corporation $13,554 $13,554 $3,651 Regional Banks
OceanFirst Financial Corp. $13,421 $13,421 $994 Regional Banks
FB Financial Corporation $13,157 $13,157 $2,164 Regional Banks
Live Oak Bancshares, Inc. $12,943 $12,943 $1,215 Regional Banks
Veritex Holdings, Inc. $12,768 $12,768 $1,360 Regional Banks
First Foundation Inc. $12,645 $12,645 $427 Regional Banks
Berkshire Hills Bancorp, Inc. $12,273 $12,273 $1,190 Regional Banks
First Bancorp $12,148 $12,148 $1,660 Regional Banks
First Busey Corporation $12,047 $12,047 $1,230 Regional Banks
Brookline Bancorp, Inc. $11,905 $11,905 $971 Regional Banks
First Commonwealth Financial Corporation $11,585 $11,585 $1,576 Regional Banks
OFG Bancorp $11,501 $11,501 $1,817 Regional Banks
Eagle Bancorp, Inc. $11,130 $11,130 $634 Regional Banks
Stellar Bancorp, Inc. $10,906 $10,906 $1,465 Regional Banks
Columbia Financial, Inc. $10,475 $10,475 $1,571 Regional Banks
Amerant Bancorp Inc. $9,902 $9,902 $864 Regional Banks
ConnectOne Bancorp, Inc. $9,880 $9,880 $930 Regional Banks
National Bank Holdings Corporation $9,808 $9,808 $1,456 Regional Banks
Park National Corporation $9,805 $9,805 $2,446 Regional Banks
Origin Bancorp, Inc. $9,679 $9,679 $1,083 Regional Banks
TriCo Bancshares $9,674 $9,674 $1,318 Regional Banks
S&T Bancorp, Inc. $9,658 $9,658 $1,418 Regional Banks
Capitol Federal Financial, Inc. $9,528 $9,538 $727 Regional Banks
Byline Bancorp, Inc. $9,497 $9,497 $1,169 Regional Banks
Peoples Bancorp Inc. $9,254 $9,254 $1,036 Regional Banks
Flushing Financial Corporation $9,039 $9,039 $429 Regional Banks
QCR Holdings, Inc. $9,026 $9,026 $1,205 Regional Banks
1st Source Corporation $8,932 $8,932 $1,469 Regional Banks
Stock Yards Bancorp, Inc. $8,863 $8,863 $2,035 Regional Banks
Nicolet Bankshares, Inc. $8,797 $8,797 $1,663 Regional Banks
18


The Bancorp, Inc. $8,728 $8,728 $2,501 Regional Banks
Southside Bancshares, Inc. $8,517 $8,517 $880 Regional Banks
Amalgamated Financial Corp. $8,257 $8,257 $882 Regional Banks
Univest Financial Corporation $8,128 $8,128 $822 Regional Banks
HomeStreet, Inc. $8,124 $8,124 $222 Regional Banks
Tompkins Financial Corporation $8,109 $8,109 $909 Regional Banks
FirstSun Capital Bancorp $8,097 $8,097 $1,003 Regional Banks
Business First Bancshares, Inc. $7,857 $7,857 $720 Regional Banks
Burke & Herbert Financial Services Corp. $7,812 $7,812 $841 Regional Banks
Horizon Bancorp, Inc. $7,801 $7,801 $664 Regional Banks
Kearny Financial Corp. $7,683 $7,731 $391 Regional Banks
Hanmi Financial Corporation $7,678 $7,678 $678 Regional Banks
Pathward Financial, Inc. $7,549 $7,622 $1,740 Regional Banks
Midland States Bancorp, Inc. $7,529 $7,529 $368 Regional Banks
First Mid Bancshares, Inc. $7,520 $7,520 $837 Regional Banks
Central Pacific Financial Corp. $7,472 $7,472 $733 Regional Banks
Metropolitan Bank Holding Corp. $7,301 $7,301 $628 Regional Banks
Heritage Financial Corporation $7,106 $7,106 $827 Regional Banks
Peapack-Gladstone Financial Corporation $7,011 $7,011 $496 Regional Banks
Washington Trust Bancorp, Inc. $6,931 $6,931 $595 Regional Banks
Preferred Bank $6,923 $6,923 $1,103 Regional Banks
Republic Bancorp, Inc. $6,847 $6,847 $1,244 Regional Banks
Lakeland Financial Corporation $6,678 $6,678 $1,546 Regional Banks
City Holding Company $6,459 $6,459 $1,723 Regional Banks
German American Bancorp, Inc. $6,296 $6,296 $1,403 Regional Banks
TrustCo Bank Corp NY $6,239 $6,239 $580 Regional Banks
MidWestOne Financial Group, Inc. $6,236 $6,236 $616 Regional Banks
Shore Bancshares, Inc. $6,231 $6,231 $452 Regional Banks
Community Trust Bancorp, Inc. $6,193 $6,193 $912 Regional Banks
CNB Financial Corporation $6,192 $6,192 $463 Regional Banks
Financial Institutions, Inc. $6,117 $6,117 $501 Regional Banks
Westamerica Bancorporation $6,076 $6,076 $1,353 Regional Banks
Mercantile Bank Corporation $6,052 $6,052 $705 Regional Banks
Great Southern Bancorp, Inc. $5,982 $5,982 $642 Regional Banks
Triumph Financial, Inc. $5,949 $5,949 $1,351 Regional Banks
Camden National Corporation $5,805 $5,805 $683 Regional Banks
HarborOne Bancorp, Inc. $5,753 $5,753 $451 Regional Banks
19


First Internet Bancorp $5,738 $5,738 $233 Regional Banks
Northfield Bancorp, Inc. (Staten Island, NY) $5,666 $5,666 $470 Regional Banks
Old Second Bancorp, Inc. $5,649 $5,649 $750 Regional Banks
Heritage Commerce Corp $5,645 $5,645 $585 Regional Banks
First Financial Corporation $5,560 $5,560 $581 Regional Banks
Mid Penn Bancorp, Inc. $5,471 $5,471 $502 Regional Banks
Orrstown Financial Services, Inc. $5,442 $5,442 $585 Regional Banks
Independent Bank Corporation $5,338 $5,338 $646 Regional Banks
Equity Bancshares, Inc. $5,332 $5,332 $690 Regional Banks
SmartFinancial, Inc. $5,276 $5,276 $529 Regional Banks
Northpointe Bancshares, Inc. $5,224 $5,224 $495 Regional Banks
NB Bancorp, Inc. $5,158 $5,158 $697 Regional Banks
Farmers National Banc Corp. $5,119 $5,119 $491 Regional Banks
Peoples Financial Services Corp. $5,092 $5,092 $445 Regional Banks
Bridgewater Bancshares, Inc. $5,066 $5,066 $383 Regional Banks
HBT Financial, Inc. $5,033 $5,033 $707 Regional Banks
Third Coast Bancshares, Inc. $4,942 $4,942 $460 Regional Banks
Enterprise Bancorp, Inc. $4,828 $4,828 $478 Regional Banks
Carter Bankshares, Inc. $4,659 $4,659 $374 Regional Banks
Southern Missouri Bancorp, Inc. $4,604 $4,908 $587 Regional Banks
HomeTrust Bancshares, Inc. $4,595 $4,595 $596 Regional Banks
Bank First Corporation $4,495 $4,495 $1,007 Regional Banks
Hingham Institution for Savings $4,458 $4,458 $518 Regional Banks
Capital City Bank Group, Inc. $4,325 $4,325 $613 Regional Banks
Arrow Financial Corporation $4,306 $4,306 $440 Regional Banks
South Plains Financial, Inc. $4,232 $4,232 $546 Regional Banks
Coastal Financial Corporation $4,121 $4,121 $1,357 Regional Banks
The First of Long Island Corporation $4,119 $4,119 $280 Regional Banks
Civista Bancshares, Inc. $4,098 $4,098 $302 Regional Banks
Southern First Bancshares, Inc. $4,088 $4,088 $269 Regional Banks
Bar Harbor Bankshares $4,083 $4,083 $452 Regional Banks
Northeast Bank $3,132 $4,083 $777 Regional Banks
Five Star Bancorp $4,053 $4,053 $593 Regional Banks
California BanCorp. $4,032 $4,032 $462 Regional Banks
West Bancorporation, Inc. $4,015 $4,015 $336 Regional Banks
RBB Bancorp $3,992 $3,992 $293 Regional Banks
First Guaranty Bancshares, Inc. $3,973 $3,973 $96 Regional Banks
20


First Business Financial Services, Inc. $3,853 $3,853 $391 Regional Banks
First Bank $3,780 $3,780 $372 Regional Banks
Bank of Marin Bancorp $3,701 $3,701 $352 Regional Banks
Primis Financial Corp. $3,699 $3,699 $242 Regional Banks
Sierra Bancorp $3,614 $3,614 $384 Regional Banks
BCB Bancorp, Inc. $3,599 $3,599 $169 Regional Banks
MetroCity Bankshares, Inc. $3,594 $3,594 $700 Regional Banks
Community West Bancshares $3,522 $3,522 $352 Regional Banks
Home Bancorp, Inc. $3,444 $3,444 $363 Regional Banks
Farmers & Merchants Bancorp, Inc. $3,365 $3,365 $324 Regional Banks
Bankwell Financial Group, Inc. $3,268 $3,268 $232 Regional Banks
First Community Bankshares, Inc. $3,261 $3,261 $691 Regional Banks
Capital Bancorp, Inc. $3,207 $3,207 $472 Regional Banks
The First Bancorp, Inc. $3,157 $3,157 $277 Regional Banks
Red River Bancshares, Inc. $3,150 $3,150 $350 Regional Banks
MVB Financial Corp. $3,129 $3,129 $224 Regional Banks
Guaranty Bancshares, Inc. $3,116 $3,116 $456 Regional Banks
Colony Bankcorp, Inc. $3,110 $3,110 $283 Regional Banks
PCB Bancorp $3,064 $3,064 $267 Regional Banks
Northrim BanCorp, Inc. $3,042 $3,042 $404 Regional Banks
Ponce Financial Group, Inc. $3,040 $3,040 $304 Regional Banks
FS Bancorp, Inc. $3,029 $3,029 $291 Regional Banks
Citizens Financial Services, Inc. $3,026 $3,026 $276 Regional Banks
First Western Financial, Inc. $2,919 $2,919 $191 Regional Banks
LINKBANCORP, Inc. $2,879 $2,879 $253 Regional Banks
Southern States Bancshares, Inc. $2,848 $2,848 $355 Regional Banks
Greene County Bancorp, Inc. $2,826 $2,966 $411 Regional Banks
Chemung Financial Corporation $2,776 $2,776 $228 Regional Banks
Blue Ridge Bankshares, Inc. $2,737 $2,737 $286 Regional Banks
ChoiceOne Financial Services, Inc. $2,723 $2,723 $258 Regional Banks
Investar Holding Corporation $2,723 $2,723 $173 Regional Banks
BayCom Corp $2,665 $2,665 $278 Regional Banks
Unity Bancorp, Inc. $2,654 $2,654 $409 Regional Banks
Western New England Bancorp, Inc. $2,653 $2,653 $191 Regional Banks
Citizens & Northern Corporation $2,611 $2,611 $311 Regional Banks
Fidelity D & D Bancorp, Inc. $2,585 $2,585 $243 Regional Banks
USCB Financial Holdings, Inc. $2,581 $2,581 $372 Regional Banks
21


C&F Financial Corporation $2,563 $2,563 $218 Regional Banks
Orange County Bancorp, Inc. $2,510 $2,510 $266 Regional Banks



22
EX-10.3 4 a10-3psufintech2025.htm EX-10.3 Document
Exhibit 10.3

2014 OMNIBUS INCENTIVE PLAN
PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of May 1, 2025 (the “Grant Date”), is made by and between Triumph Financial, Inc., a Texas corporation (the “Company”), and [[FIRSTNAME]] [[LASTNAME]] (“Participant”). Capitalized terms used herein without definition have the meanings ascribed to such terms in the Triumph Financial, Inc. 2014 Omnibus Incentive Plan (the “Plan”), pursuant to which this Award is granted.
WHEREAS, the Company has adopted the Plan to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and consultants and to provide the Company and its Subsidiaries and Affiliates with a means of providing incentives for future performance of services directly linked to the profitability of the Company’s businesses and increases in shareholder value; and
    WHEREAS, the Committee has determined that it would be in the best interests of the Company and its shareholders to grant Participant an award of Performance Restricted Stock Units (“PSUs”) on the terms and subject to the conditions set forth in this Agreement and the Plan.
NOW THEREFORE, in consideration of the premises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
1.Grant of PSU Award.
(a)Grant. The Company hereby grants to Participant an award (the “PSU Award”) of a target aggregate number of [[SHARESGRANTED]] PSUs (the “Target PSUs”), on the terms and subject to the conditions set forth in this Agreement and as otherwise provided in the Plan. Each PSU represents the right to receive one Share on the terms, and subject to the conditions, set forth in this Agreement. Subject to the Award Maximum, the total number of PSUs that may be earned pursuant to the PSU Award in accordance with this Agreement shall range from 0% to 350% of the Target PSUs.
(b)Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan.
2.Vesting. Except as may otherwise be provided herein, the PSU Award shall become earned, vested and nonforfeitable according to the following provisions:
(a)General Vesting. Except as may otherwise be provided herein, subject to the Award Maximum, a number of PSUs subject to the PSU Award shall be earned (such number, the “Earned PSUs”) based on the achievement of the Performance Goals set forth in Exhibit A hereto and the Earned PSUs shall vest on the date on which the Committee determines the extent to which the Performance Goals have been achieved (the “Vesting Date”), which determination shall occur no later than thirty (30) days
    W/3080931
    

following the conclusion of the Performance Period set forth on Exhibit A, subject to Participant not having incurred a Termination of Service prior to the Vesting Date.
(b)Death, Disability, and Retirement. If Participant experiences a Termination of Service after the Grant Date due to Participant’s death or Disability, or after the first anniversary of the Grant Date due to Participant’s Retirement, then a portion of the PSU Award, calculated by multiplying the Target PSUs by a fraction, the numerator of which is equal to the number of days worked by Participant during the Performance Period and the denominator of which is the total number of days in the Performance Period (the “Prorated Portion”), shall remain outstanding and eligible to vest in accordance with Section 2(a) based on the actual level of achievement of the Performance Goals, so long as Participant does not breach any restrictive covenants set forth in any written agreement between Participant and the Company (it being understood that in the event of any such breach prior to the Vesting Date, the Prorated Portion shall be immediately forfeited). For purposes hereof, “Retirement” means a Termination of Service on or after reaching the minimum retirement age adopted by the Company for its executives generally as in effect at the time of such Termination of Service (or, if earlier, as in effect immediately prior to a Change in Control). For the avoidance of doubt, the Target PSUs that do not constitute the Prorated Portion shall be forfeited as of the date of Termination of Service.
(c)Termination without Cause or Resignation for Good Reason.
(i)If, after the first anniversary of the Grant Date (and other than during the two-year period immediately following a Change in Control), a Participant incurs a Termination of Service due to a termination by the Company without Cause (as defined in Exhibit B), or due to a resignation by Participant for Good Reason (as defined in Exhibit B), the Prorated Portion shall remain outstanding and eligible to vest in accordance with Section 2(a) based on the actual level of achievement of the Performance Goals, so long as Participant does not breach any restrictive covenants set forth in any written agreement between Participant and the Company (it being understood that in the event of any such breach prior to the Vesting Date, the Prorated Portion shall be immediately forfeited). For the avoidance of doubt, the Target PSUs that do not constitute the Prorated Portion shall be forfeited as of the date of Termination of Service.
(ii)If, during the two-year period immediately following a Change in Control, a Participant incurs a Termination of Service due to a termination by the Company without Cause (as defined in Exhibit B), or due to a resignation by Participant for Good Reason (as defined in Exhibit B), the Replacement Award (as defined in Section 7 below) granted in respect of the PSU Award shall vest in full.
(d)Other Termination of Service. If Participant incurs a Termination of Service prior to the Vesting Date for any reason other than as set forth in Section 2(b) and 2(c) above, the PSU Award shall be forfeited by Participant without consideration.
3.Tax Withholding. No later than the date as of which an amount first becomes includible in the gross income of Participant for federal income tax purposes with respect to any PSUs, Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all federal, state and local income and employment taxes that are required by applicable laws and regulations to be withheld with respect to such amount. Participant may direct the Company, to the extent permitted by law and as may be authorized by the Committee or as may otherwise be permitted under Section 14(d) of the Plan, to deduct any such taxes from any payment otherwise due to Participant, including the delivery of Shares of Common Stock that gives rise to the withholding requirement. The Company’s obligation to

2


deliver the Shares underlying Earned PSUs (or to make a book entry or other electronic notation indicating ownership of the Shares), is subject to the condition precedent that Participant either pay or provide for the amount of any such withholding.
4.Settlement of PSU Award. The Earned PSUs shall be settled by the issuance of Shares within thirty (30) days following the Vesting Date (except (a) as otherwise provided in Section 7(a), and (b) that Earned PSUs will be settled upon a Participant’s Termination of Service following a Change in Control by the issuance of Shares within thirty (30) days following the Termination of Service; provided that if the PSU Award constitutes “nonqualified deferred compensation” subject to Section 409A of the Code, this clause (b) shall apply only if the Termination of Service occurs within two (2) years following a 409A Change in Control).
5.Transferability; Rights as a Stockholder. The PSU Award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, its Subsidiaries and its Affiliates; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. Until the issuance of the Shares subject to this PSU Award (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a holder of Common Stock shall exist with respect to this Award.
6.Adjustment. In the event of any event described in Section 3(c) of the Plan occurring after the Grant Date and while the PSU Award remains outstanding, the adjustment provisions as provided for under Section 3(c) of the Plan shall apply to the PSU Award.
7.Change in Control. The provisions of this Section 7 shall govern the treatment of the PSU Award upon a Change of Control.
(a)In the event of a Change in Control of the Company occurring after the Grant Date and prior to the Vesting Date, the PSU Award (if and to the extent not previously forfeited) shall vest and be deemed to be earned, with the Performance Goals deemed achieved at the level of achievement of the Performance Goals as determined by the Committee as of the latest practicable date prior to the Change in Control and in accordance with Exhibit A (treating such date as the final day of the Performance Period for purposes thereof), and shall be settled within ten (10) days following the Change in Control (provided that if the PSU Award constitutes “nonqualified deferred compensation” subject to Section 409A of the Code, settlement shall occur at such time only if (i) the Change in Control is a 409A Change in Control and (ii) such settlement would not constitute an impermissible acceleration under Section 409A of the Code, and otherwise such PSU Award will be settled in accordance with Section 4), except to the extent that another award meeting the requirements of Section 7(b) is provided to Participant to replace the PSU Award (any award meeting the requirements of Section 7(b), a “Replacement Award”).
(b)An award shall meet the conditions of this Section 7(b) (and hence qualify as a Replacement Award) if: (1) it relates to publicly traded equity securities of the Company or the surviving corporation following the Change in Control, (2) it is of the same type as the PSU Award (except that the Replacement Award shall be subject solely to time-based vesting for the remainder of the applicable performance period (or such shorter period as determined by the Committee) and the Performance Goals shall be deemed to be achieved at the level of achievement of the Performance Goals as determined by the Committee as of the latest practicable date prior to the Change

3


in Control and in accordance with Exhibit A, treating such date as the final day of the Performance Period for purposes thereof), (3) it has a value at least equal to the value of the PSU Award as of the date of the Change in Control (other than in respect of customary fractional rounding of share amounts and exercise price), (4) it contains terms relating to time-based vesting (including with respect to Termination of Service) that are substantially identical to those of this Award, and (5) its other terms and conditions are not less favorable to Participant than the terms and conditions of this Award (including provisions that apply in the event of a subsequent Change in Control) as of the date of the Change in Control. Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of this Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 7(b) are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
8.Clawback Policy. Participant agrees that, notwithstanding any other provision of this Agreement or the Plan, the PSU Award and any Shares delivered thereunder shall be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of any clawback policy that the Company may adopt and that is applicable to Participant, as it may be amended from time to time, and any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation.
9.Miscellaneous.
(a)Waiver and Amendment. The Committee may unilaterally amend the terms of this Agreement and the PSU Award granted thereunder; provided that no such amendment shall, without the Participant’s consent, materially impair the rights of any Participant with respect to this Agreement and the PSU Award granted thereunder, except such an amendment made to cause the Plan, this Agreement, or the PSU Award granted thereunder to comply with applicable law, Applicable Exchange listing standards, or accounting rules. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.
(b)Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, facsimile, courier service or personal delivery:
if to the Company to:
Triumph Financial, Inc.
12700 Park Central Drive, Suite 1700
Dallas, TX 75251
Facsimile: (214) 237-3197
Attention: General Counsel
if to Participant: at the address last on the records of the Company.
All such notices, demands and other communications shall be deemed to have been duly given (i) when delivered by hand, if personally delivered; (ii) when

4


delivered by courier, if delivered by commercial courier service; (iii) five business days after being deposited in the mail, postage prepaid, if mailed; and (iv) when receipt is mechanically acknowledged, if by facsimile.
(c)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.
(d)No Rights to Service. Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which is hereby expressly reserved, to remove, terminate or discharge Participant at any time for any reason whatsoever.
(e)Beneficiary. Participant may file with the Company a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, change or revoke such designation by filing a new designation with the Company. The last such designation received by the Company shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Company prior to Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by Participant, the beneficiary shall be deemed to be his or her spouse or, if Participant is unmarried at the time of death, his or her estate.
(f)Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of Participant and the beneficiaries, executors, administrators, heirs and successors of Participant.
(g)Entire Agreement. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations with respect thereto.
(h)Bound by the Plan. By signing this Agreement, Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.
(i)Governing Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Texas without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Texas.
(j)Headings. The headings of the Sections of this Agreement are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.
(k)Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
10.Compliance with Legal Requirements. The grant of the PSU Award and any other obligations of the Company under this Agreement shall be subject to all applicable federal and

5


state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Committee, in its sole discretion, may postpone the issuance or delivery of Shares as the Committee may consider appropriate and may require Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the Shares in compliance with applicable laws, rules and regulations.
[Signature Page Follows]

6


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

TRIUMPH FINANCIAL, INC.
image_0.jpg
By: _______________________
Name: Adam Nelson    
Title: EVP and General Counsel



PARTICIPANT


_ [[SIGNATURE]] __ ____ ____
[[FIRSTNAME]] [[LASTNAME]]



[Signature Page to 2025 PSU Award Agreement]


TRIUMPH FINANCIAL, INC.
RESTRICTIVE COVENANTS AGREEMENT
As a condition of any incentive compensation that I may earn and receive under any incentive-based compensation plan maintained by Triumph Financial, Inc. (together with its subsidiaries, the “Company”), and in particular, my receipt of restricted stock units granted under the terms of the Performance Restricted Stock Unit Award Agreement entered into between the Company and me (such agreements, the “Award Agreements”), I agree to the terms and conditions of this Restrictive Covenants Agreement (“Agreement”):
(a)Access to Confidential Information. Employee understands and agrees that in the course of performing work on behalf of the Company, he will continue to have access to, and will continue to be given Confidential Information relating to the business of the Company. Employee acknowledges and agrees that such Confidential Information includes, but is not limited to financial information pertinent to the Company and its customers, and investors, customer lists, customer and investor identities and their preferences, confidential banking and financial information of both the Company and its customers and investors, and information that Employee may create or prepare certain information related to his duties. Employee hereby expressly agrees to maintain in strictest confidence and not to access without proper business purposes (including repetitive unnecessary access), use (including without limitation in any future business or personal relationship of Employee), publish, disclose or in any way authorize anyone else to use, publish or disclose in any way, any Confidential Information relating in any manner to the business or affairs of the Company and its customers and investors, except for legitimate business-related reasons while performing duties on behalf of the Company. Employee agrees further not to remove or retain any figures, financial information, personnel data, calculations, letters, documents, lists, papers, or copies thereof, which embody Confidential Information of the Company, and to return any such information in Employee’s possession at the conclusion of Employee’s use of such information and at the conclusion of Employee’s employment with the Company.
For purposes of this Agreement, “Confidential Information” includes, but is not limited to, information in the possession of, prepared by, obtained by, compiled by, or that is used by Company, its customers, investors and/or vendors, or is prepared by, obtained by, compiled by or that is used by Employee in conjunction with his duties, and (1) is proprietary to, about, or created by the Company, its customers, investors and/or vendors; (2) is information the disclosure of which might be detrimental to the interest of the Company, its investors or customers; or (3) is not typically disclosed by the Company, its customers, investors and/or vendors, or known by persons who are not associated with the Company.
(b)Restrictive Covenants. Employee acknowledges that, as a result of Employee’s service with the Company, a special relationship of trust and confidence will develop between Employee, the Company and its clients and customers, and that this relationship will generate a substantial amount of good will between the Company and its clients and customers. Employee further acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect it from the loss of its Confidential Information or its customer goodwill. Employee further acknowledges that throughout his service with the Company, Employee will be provided with access to and informed of confidential, proprietary and highly sensitive information relating to the Company’s clients and customers, which is a competitive asset of the Company, and which enables Employee to benefit from the goodwill and know-how
8


of the Company. Therefore, as a material condition to the Company’s willingness to perform its obligations hereunder, Employee agrees that, for a period of twelve (12) months following the date of the termination of employment by the Company for any reason (except as specifically set forth below), Employee will not, either for himself or in conjunction with others:
(i)solicit, divert, take away, do business with, or provide information about, or attempt to solicit, divert, take away or do business with in any fashion any of the Company’s customers, clients, business or patrons about whom Employee has Confidential Information, or with whom Employee has done business or attempted to do business on behalf of the Company;
(ii)(i) offer employment to, enter into a contract for the employment of, or attempt to entice away from the Company, any individual who is at the time of such offer or attempt, or has been during the twelve months prior to such offer or attempt, an employee of the Company, (ii) interfere with the material business relationships of the Company, or entice away any material suppliers or contractors, (iii) procure or facilitate the making of any such offer or attempt by any other person, or (iv) solicit, directly or through any other person, any investor of the Company for purposes of facilitating any investment, partnership or business opportunity unrelated to the Company. The restriction in subsection (iv) above shall not apply to any investor with which the Employee had a preexisting relationship prior to becoming employed by the Company.
Notwithstanding anything to the contrary contained herein, the foregoing restrictions in Section (b) this Restrictive Covenants Agreement shall not apply in the event Employee is terminated by the Company without Cause (as defined in the Award Agreements) during the first twelve (12) months following Employee’s execution of the Award Agreements.
(c)Representations of Employee.
(i)EMPLOYEE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF THIS AGREEMENT.
(ii)EMPLOYEE ACKNOWLEDGES AND RECOGNIZES THE HIGHLY COMPETITIVE NATURE OF THE COMPANY’S BUSINESS, THAT ACCESS TO CONFIDENTIAL INFORMATION RENDERS THE EMPLOYEE SPECIAL AND UNIQUE WITHIN THE COMPANY’S INDUSTRY, AND THAT THE EMPLOYEE WILL HAVE THE OPPORTUNITY TO DEVELOP SUBSTANTIAL RELATIONSHIPS WITH EXISTING AND PROSPECTIVE CLIENTS, ACCOUNTS, CUSTOMERS, CONSULTANTS, CONTRACTORS, INVESTORS, AND STRATEGIC PARTNERS OF THE COMPANY DURING THE COURSE OF AND AS A RESULT OF THE EMPLOYEE’S EMPLOYMENT WITH THE COMPANY. IN LIGHT OF THE FOREGOING, EMPLOYEE RECOGNIZES AND ACKNOWLEDGES THAT THE RESTRICTIONS AND LIMITATIONS SET FORTH IN THIS AGREEMENT ARE REASONABLE AND VALID IN GEOGRAPHICAL AND TEMPORAL SCOPE AND IN ALL OTHER RESPECTS AND ARE ESSENTIAL TO PROTECT THE VALUE OF THE BUSINESS AND ASSETS OF THE COMPANY.
(d)Severable Provisions. The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other
9


provision. In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, the parties hereto agree that said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.
(e)Intellectual Property. Employee agrees to disclose and hereby assigns to the Company any and all material of a proprietary nature, particularly including, without limitation, material subject to protection as trade secrets or as patentable ideas or copyrightable works, that Employee may conceive, invent, author or discover, either solely or jointly with another or other during Employee’s employment and that relates to or is capable of use in connection with the business of the Company or any employment or products offered, manufactured, used, sold or being developed by the Company at the time said material is developed. Employee will, upon request of the Company, either during or at any time after Employee’s employment ends, regardless of how or why Employee’s employment ends, execute and deliver all papers, including applications for patents and registrations for copyrights, and do such other legal acts (entirely at the Company’s expense) as may be necessary to obtain and maintain proprietary rights in any and all countries and to vest title thereto in the Company.
(f)Remedy. Employee understands and acknowledges that the Company has a legitimate business interest in preventing Employee from taking any actions in violation of this Policy and that this Policy is intended to protect the business and goodwill of the Company. Employee further acknowledges that a breach of this Policy will irreparably and continually damage the Company and that monetary damages alone will be inadequate to compensate the Company for such breach. Employee therefore agrees that in the event Employee violates any of the terms of this Policy, the Company will be entitled to, in addition to any other remedies available to it in law or in equity, seek temporary, preliminary and permanent injunctive relief and specific performance to enforce the terms of this Policy without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond. If Employee does take actions in violation of this Policy, Employee understands that the time periods set forth in in the applicable provisions herein will run from the date on which violations of those provisions, whether by injunction or otherwise, ends and not from the date that Employee’s employment ends. In the event any lawsuit, claim or other proceeding is brought to enforce the terms of this Policy, or to determine the validity of its terms, then the prevailing party will be entitled to recover from the non-prevailing party its reasonable attorneys’ fees and court costs incurred in obtaining enforcement of, or determining the validity of, this Policy.
(g)Waiver. Employee understands and agrees that in the event the Company waives or allows any breach of this Policy, such waiver or allowance will not constitute a waiver or allowance of any future breach, whether of a similar or dissimilar nature.
(h)Tolling. If the Company files a lawsuit in any court of competent jurisdiction alleging a breach of the non-disclosure or non-solicitation provisions of this Agreement by Employee, then any time period set forth in this Agreement relating to the post-termination restrictions on the activities of Employee will be deemed tolled as of the time the lawsuit is filed and will remain tolled until the dispute is finally resolved, either by written settlement agreement resolving all claims raised in the lawsuit, or by entry of a final judgment and final resolution of any post-judgment appellate proceedings.
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* * * * * *

I, [[FIRSTNAME]] [[LASTNAME]], have executed this Agreement on the respective date set forth below:


Date: [[DATE]]         [[SIGNATURE]]    
(Signature)

11


EXHIBIT A

Performance Goals

Performance Measure:

The performance measures for the Performance Goal are (A) the Company’s relative Total Shareholder Return (as defined below) as compared to the TSR of the companies identified below as the “Peer Group” over the period commencing on and including May 1, 2025 and ending on and including April 30, 2028 (the “Performance Period”); provided, that if, on the last day of the Performance Period, one of the listed companies is no longer publicly traded, such company shall not be considered to be part of the Peer Group and shall not be replaced and (B) the Company’s absolute Total Shareholder Return over the Performance Period.

Performance Goal:

Subject to the terms, definitions and provisions of this PSU Award and the Plan, Participant will be entitled to receive a number of shares of Shares equal to the number of Earned PSUs (subject to the Award Maximum). The number of Earned PSUs will be equal to the number of Target PSUs (plus the number of dividend equivalent units credited with respect thereto), multiplied by (A) the Relative TSR Vesting Percentage, multiplied by (B) the Absolute TSR Modifier.

The Relative TSR Vesting Percentage shall be correlated to the Company’s Relative TSR Percentile for the Performance Period in accordance with the table below (with linear interpolation between the 25th and 75th percentiles and between the 75th and 90th percentiles, as applicable):

Relative TSR Percentile
Relative TSR Vesting Percentage
Below 25th percentile
0%
25th percentile
50%
75th percentile
150%
90th percentile or above
175%

The Absolute TSR Modifier shall be correlated to the Company’s absolute Total Shareholder Return for the Performance Period in accordance with the table below (with linear interpolation between 30% and 100% absolute Total Shareholder Return):

Absolute TSR
Absolute TSR Modifier
30% or below
100%
100% or above
200%


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Any PSUs that were eligible to vest with respect to the Performance Period and did not become Earned PSUs in accordance with this Exhibit A shall be forfeited and cancelled as of the Vesting Date.


Definitions

“Award Maximum” shall mean:
(a) in the event the Company has a negative Total Shareholder Return for the Performance Period, 100% of the Target PSUs, and

(b) in the event that clause (a) is not applicable, and the value of the Earned PSUs (computed as the product of the number of the Earned PSUs determined without regard to the Award Maximum, multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Vesting Date) would exceed 8 times the initial value of the Target PSUs (computed as the product of the number of Target PSUs multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Grant Date), such number of PSUs that, if multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Vesting Date, would equal 8 times the initial value of the Target PSUs (computed as the product of the Target PSUs multiplied by the closing price of the Company’s common stock on the Nasdaq Global Select Market on the Grant Date).

“Beginning Stock Price” shall mean the average of the closing prices of common shares during the twenty (20) consecutive trading days ending on the last trading day immediately preceding the first day of the Performance Period.

“Ending Stock Price” shall mean the average of the closing prices of common shares (as appropriately adjusted to reflect stock splits, spin-offs, and similar transactions that occurred during the Performance Period) during the twenty (20) consecutive trading days ending on the last trading day of the Performance Period. If a Change in Control occurs during the Performance Period, the Ending Stock Price of the Company shall equal (i) the value of the consideration paid for each Share in the Change in Control transaction, with the value of any non-cash consideration determined by the Committee in its discretion, or (ii) if no consideration is paid in respect of Shares in connection with the Change in Control, the volume weighted average price of a Share on the Nasdaq Global Select Market during the period of twenty (20) consecutive trading days ending on, and including, the last practicable trading day preceding the Change in Control.

“Total Shareholder Return” shall mean the appreciation of share price during the Performance Period, plus any Dividends Paid on the common stock during such Performance Period, calculated as follows:

[ Ending Stock Price minus Beginning Stock Price plus Dividends Paid ]

divided by

13


[ Beginning Stock Price ]


“Relative TSR Percentile” shall mean the percentile rank of the Company’s TSR relative to the TSR of the companies in the Peer Group for the Performance Period. Relative TSR Percentile will be determined by ranking the TSR of the Company and each of the companies in the Peer Group (with the company having the lowest TSR being ranked number 1, the company with the second lowest TSR being ranked number 2, and so forth) and determining the Company’s percentile rank based upon its position in the list by dividing the Company’s position by the total number of companies (including the Company) in the Peer Group and rounding the quotient to the nearest hundredth.

“Dividends Paid” shall mean all dividends paid with respect to an ex-dividend date that occurs during the Performance Period (whether or not the dividend payment date occurs during the Performance Period), which shall be deemed to have been reinvested in the underlying common shares and shall include dividends paid with respect to such reinvested dividends, appropriately adjusted to reflect stock splits, spin-offs, and similar transactions.

“Peer Group” shall mean the companies set on Exhibit C hereto; provided, that if, on the last day of the Performance Period, one of the foregoing companies is no longer publicly traded, such companies shall not be considered to be part of the Peer Group and shall not be replaced.





14




EXHIBIT B

Certain Definitions

“Cause” shall mean the Company’s determination in good faith that Participant: (i) has misappropriated, stolen or embezzled funds or property from the Company or any of its subsidiaries or affiliates, or secured or attempted to secure personally any profit in connection with any transaction entered into on behalf of the Company or any of its subsidiaries or affiliates, (ii) has been indicted or arrested on a felony, (iii) has neglected his or her employment duties, (iv) has materially violated a restrictive covenant contained in any written agreement between Participant and the Company, (v) has willfully violated or breached any material provision of any written agreement between Participant and the Company in any material respect or violated any material law or regulation or (vi) any other misconduct by Participant that is injurious to the financial condition or business reputation of the Company or any of its Subsidiaries or Affiliates.

“Good Reason”
(a)    In the case of a voluntary termination of employment not occurring on or after a Change in Control, “Good Reason” shall mean:
(i)    a material reduction in Participant’s base salary as in effect immediately prior to Participant’s “Good Reason Notice of Termination” as defined below unless such reduction is made in accordance with a uniform reduction in base salaries of the Company’s similarly situated employees; or
(ii)     a material reduction in Participant’s target annual bonus opportunity as in effect immediately prior to Participant’s Good Reason Notice of Termination unless such reduction is made in accordance with a uniform reduction in target annual bonus opportunity of the Company’s similarly situated employees.

(b) In the case of a voluntary termination of employment occurring on or after a Change in Control, “Good Reason” shall mean:
(i)     a material reduction in Participant’s position, authority, duties or responsibilities relative to such position, authority, duties or responsibilities immediately prior to the Change in Control;
(ii)     a material reduction in Participant’s base salary opportunity as in effect immediately prior to the Change in Control;
(iii)     a material reduction in Participant’s target annual bonus opportunity as in effect immediately prior to the Change in Control; or
(iv)     receipt of notice by Participant with regard to the mandatory relocation of the office at which Participant is to perform the majority of his duties following the Change in
15


Control to a location more than 50 miles from the location at which Participant performed such duties prior to the Change in Control; provided that such new location is farther from Participant’s residence than the prior location.
(c)     Notwithstanding anything in this Agreement to the contrary, no act, omission or event shall constitute grounds for a voluntary termination due to “Good Reason” under either paragraph (a) or (b) immediately above unless:
(i)     Participant provides the Company thirty (30) day advance written notice of his or her intent to termination employment for Good Reason which notice must describe the claimed act, omission or event giving rise to Good Reason (“Good Reason Notice of Termination”);
(ii)     the Good Reason Notice of Termination is given within ninety (90) days of Participant’s first actual knowledge of such act, omission or event;
(iii)     the Company fails to cure such act, omission or event within the thirty (30) day period after receiving the Good Reason Notice of Termination; and
(iv)     Participant’s termination of employment for Good Reason actually occurs at the end of such 30-day cure period if the Good Reason is not cured.


16


EXHIBIT C – FINTECH PEER GROUP


Company (n=32) Revenue ($M) Market Cap - 3/31/2025 ($M) GICS Sub-Industry
FY2024 TTM
Affirm Holdings, Inc. $2,323 $10,481 $14,465 Transaction and Payment Processing Services
AvidXchange Holdings, Inc. $439 $2,090 $1,734 Transaction and Payment Processing Services
Block, Inc. $24,121 $36,778 $33,697 Transaction and Payment Processing Services
Cantaloupe, Inc. $269 $303 $575 Transaction and Payment Processing Services
Cass Information Systems, Inc. $220 $2,395 $582 Transaction and Payment Processing Services
Corpay, Inc. $3,975 $17,957 $24,498 Transaction and Payment Processing Services
Euronet Worldwide, Inc. $3,990 $5,835 $4,674 Transaction and Payment Processing Services
EVERTEC, Inc. $845 $1,858 $2,339 Transaction and Payment Processing Services
Fidelity National Information Services, Inc. $10,127 $33,784 $39,557 Transaction and Payment Processing Services
Fiserv, Inc. $20,456 $77,176 $123,949 Transaction and Payment Processing Services
Flywire Corporation $492 $1,122 $1,174 Transaction and Payment Processing Services
Global Payments Inc. $10,106 $46,890 $24,076 Transaction and Payment Processing Services
International Money Express, Inc. $659 $462 $387 Transaction and Payment Processing Services
Jack Henry & Associates, Inc. $2,216 $2,912 $13,311 Transaction and Payment Processing Services
Marqeta, Inc. $507 $1,463 $2,078 Transaction and Payment Processing Services
Mastercard Incorporated $28,167 $48,081 $500,882 Transaction and Payment Processing Services
NCR Atleos Corporation $4,317 $5,552 $1,927 Transaction and Payment Processing Services
PagSeguro Digital Ltd. $2,964 $72,901 $2,318 Transaction and Payment Processing Services
Payoneer Global Inc. $978 $7,930 $2,631 Transaction and Payment Processing Services
PayPal Holdings, Inc. $31,797 $81,611 $64,548 Transaction and Payment Processing Services
Paysafe Limited $1,705 $4,809 $940 Transaction and Payment Processing Services
Paysign, Inc. $58 $179 $114 Transaction and Payment Processing Services
Priority Technology Holdings, Inc. $880 $1,827 $542 Transaction and Payment Processing Services
Remitly Global, Inc. $1,264 $1,013 $4,173 Transaction and Payment Processing Services
Repay Holdings Corporation $313 $1,572 $495 Transaction and Payment Processing Services
Sezzle Inc. $271 $298 $1,181 Transaction and Payment Processing Services
Shift4 Payments, Inc. $3,331 $5,041 $5,662 Transaction and Payment Processing Services
StoneCo Ltd. $2,060 $54,813 $2,875 Transaction and Payment Processing Services
The Western Union Company $4,210 $8,371 $3,575 Transaction and Payment Processing Services
Toast, Inc. $4,960 $2,408 $19,073 Transaction and Payment Processing Services
Visa Inc. $35,926 $91,888 $684,651 Transaction and Payment Processing Services
WEX Inc. $2,628 $13,322 $6,095 Transaction and Payment Processing Services

17
EX-10.4 5 a10-4options2025.htm EX-10.4 Document
Exhibit 10.4

2014 OMNIBUS INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS OPTION AGREEMENT (this “Agreement”), dated as of May 1, 2025 (the “Grant Date”), is made by and between Triumph Financial, Inc., a Texas corporation (the “Company”), and [[FIRSTNAME]] [[LASTNAME]] (“Participant”). Capitalized terms used herein without definition have the meanings ascribed to such terms in the Triumph Financial, Inc., 2014 Omnibus Incentive Plan (the “Plan”).
WHEREAS, the Company has adopted the Plan, pursuant to which Nonqualified Stock Options may be granted to purchase shares of Common Stock; and
WHEREAS, the Committee has determined that it would be in the best interests of the Company and its shareholders to grant Participant Nonqualified Stock Options on the terms and subject to the conditions set forth in this Agreement and the Plan.
NOW, THEREFORE, in consideration of the premises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
1.Grant of Option.
(a)Grant. The Company hereby grants to Participant a Nonqualified Stock Option (the “Option” and any portion thereof, the “Options”) to purchase [[SHARESGRANTED]] shares of Common Stock (such shares of Common Stock, the “Shares”), on the terms and subject to the conditions set forth in this Agreement and as otherwise provided in the Plan. The Option is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
(b)Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan.
2.Exercise Price.
(a)Exercise Price. The option price, being the price at which Participant shall be entitled to purchase the Shares upon the exercise of all or any of the Options, shall be [[GRANTPRICE]] per Share (the “Exercise Price”).
(b)Payment of the Exercise Price. The Option may be exercised only by written notice, substantially in the form provided by the Company, delivered in person or by mail in accordance with Section 10(b) and accompanied by payment of the Exercise Price. The aggregate Exercise Price shall be payable in cash, or, to the extent permitted by the Committee, by any of the other methods permitted under Section 5(g) of the Plan.
3.Vesting. Except as may otherwise be provided herein, the Option shall become vested and nonforfeitable (any Options that shall have become vested and nonforfeitable pursuant to this Section 3, the “Vested Options”) and shall become exercisable according to the following provisions:
    W/2629214v1
    

(a)General Vesting. The Options (rounded down to the nearest whole Share, if applicable) shall become Vested Options and exercisable per schedule below, in each case, subject to Participant not having incurred a Termination of Service as of the applicable vesting date; provided that if such Termination of Service is due to Participant’s Retirement, the Options shall continue to become Vested Options in accordance with the schedule set forth in this Section 3(a), so long as Participant does not engage in activities reasonably determined by the Committee to be competitive with the Company or any of its Affiliates (it being understood that in the event of any such engagement, any Options that have not become Vested Options shall be immediately forfeited). For purposes hereof, Retirement means a Termination of Service on or after reaching the minimum retirement age adopted by the Company for its executives generally as in effect at the time of such Termination of Service.
[[ALLVESTSEGS]]
(b)Vesting upon Death or Disability. If Participant incurs a Termination of Service due to death or Disability, all Options that have not theretofore become Vested Options shall become Vested Options and be exercisable in accordance with Section 4.
(c)Vesting upon post-Change in Control Severance Event. If, during the 24-month period following a Change in Control, Participant incurs a Termination of Service due to a termination by the Company without Cause, all Options that have not theretofore become Vested Options shall become Vested Options and be exercisable in accordance with Section 4. If Participant is party to an Individual Agreement or covered under any severance plan or arrangement with a “good reason” or similar provision, a Termination of Employment by Participant for good reason or similar term during such 24-month period shall be treated as a termination by the Company without Cause for purposes of this paragraph.
(d)Other Termination of Service. If Participant incurs a Termination of Service for any reason other than as set forth in Section 3(b) or 3(c), any Options that have not theretofore become Vested Options shall be forfeited by Participant without consideration.
4.Termination.
(a)The Options (to the extent not otherwise forfeited) shall automatically terminate and shall become null and void, be unexercisable and be of no further force and effect upon the earliest of:
(i)the tenth anniversary of the Grant Date;
(ii)the first anniversary of Participant’s Termination of Service in the case of a Termination of Service due to death or Disability;
(iii)the 90th day following Participant’s Termination of Service in the case of a Termination of Service by the Company without Cause or a Termination of Service due to Participant’s resignation for any reason; and
(iv)the day of Participant’s Termination of Service in the case of a Termination of Service for Cause.
2

(b)Notwithstanding the provisions of Section 4(a) to the contrary, in the event of a Termination of Service under the circumstances described in Section 3(c), the Option shall remain outstanding and exercisable until the earlier of (i) the tenth anniversary of the Grant Date and (ii) the third anniversary of such Termination of Service.
5.Transferability. The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, its Subsidiaries and its Affiliates; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. The Option shall be subject to the restrictions on transfer set forth in the Plan and this Agreement.
6.Adjustment. In the event of any event described in Section 3(c) of the Plan occurring after the Grant Date, the adjustment provisions as provided for under Section 3(c) of the Plan shall apply to the Option.
7.Change in Control. The provisions of this Section 7 shall govern vesting of the Option upon a Change of Control.
(a)In the event of a Change in Control of the Company occurring after the Grant Date, any unvested Options (if not previously forfeited) shall become Vested Options, except to the extent that another award meeting the requirements of Section 7(b) is provided to Participant to replace this Option (any award meeting the requirements of Section 7(b), a “Replacement Award”).
(b)An award shall meet the conditions of this Section 7(b) (and hence qualify as a Replacement Award) if: (1) it is a stock option or stock appreciation right in respect of publicly traded equity securities of the Company or the surviving corporation following the Change in Control, (2) it has a value at least equal to the value of this Option as of the date of the Change in Control (other than in respect of customary fractional rounding of share amounts and exercise price), (3) it contains terms relating to vesting and exercisability (including with respect to Termination of Service) that are substantially identical to those of this Option, and (4) its other terms and conditions are not less favorable to Participant than the terms and conditions of this Option (including provisions that apply in the event of a subsequent Change in Control) as of the date of the Change in Control. Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of this Option if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 7(b) are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
8.Tax Withholding. As a condition to exercising the Option, in whole or in part, Participant will pay to the Company, or, to the extent permitted by the Committee, make provisions satisfactory to the Company for payment of, any federal, state and local and employment taxes in respect of the exercise or the transfer of the Shares upon the exercise of the Option that are required by applicable laws and regulations to be withheld. Participant may direct the Company, to the extent permitted by law and as may be authorized by the Committee or as may otherwise be permitted under Section 14(d) of the Plan, to deduct any such taxes from any payment otherwise due to Participant, including the delivery of Shares upon the exercise of the Option that gives rise to the withholding requirement. The Company’s obligation to deliver the Shares upon exercise of the Option (or to make a book entry or other electronic notation indicating ownership of the Shares) is subject to the condition precedent that Participant either pay or provide for the amount of any such withholding.
3

9.Clawback Policy. Participant agrees that, notwithstanding any other provision of this Agreement or the Plan, the Option awarded under this Agreement shall be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of any clawback policy that the Company may adopt and that is applicable to Participant, as it may be amended from time to time, and any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation.
10.Miscellaneous.
(a)Waiver and Amendment. The Committee may unilaterally amend the terms of this Agreement and the Option granted thereunder; provided that no such amendment shall, without the Participant’s consent, materially impair the rights of any Participant with respect to this Agreement and the Option granted thereunder, except such an amendment made to cause the Plan, this Agreement, or the Option Stock granted thereunder to comply with applicable law, Applicable Exchange listing standards, or accounting rules. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.
(b)Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, facsimile, courier service or personal delivery:
if to the Company to:

Triumph Financial, Inc.
12700 Park Central Drive, Suite 1700
Dallas, TX 75251
Facsimile: (214) 237-3197
Attention: General Counsel
if to Participant: at the address last on the records of the Company.
All such notices, demands and other communications shall be deemed to have been duly given (i) when delivered by hand, if personally delivered; (ii) when delivered by courier, if delivered by commercial courier service; (iii) five business days after being deposited in the mail, postage prepaid, if mailed; and (iv) when receipt is mechanically acknowledged, if by facsimile.
(c)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.
4

(d)No Rights to Service. Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which is hereby expressly reserved, to remove, terminate or discharge Participant at any time for any reason whatsoever.
(e)Beneficiary. Participant may file with the Company a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, change or revoke such designation by filing a new designation with the Company. The last such designation received by the Company shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Company prior to Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by Participant, the beneficiary shall be deemed to be his or her spouse or, if Participant is unmarried at the time of death, his or her estate.
(f)Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of Participant and the beneficiaries, executors, administrators, heirs and successors of Participant.
(g)Entire Agreement. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations with respect thereto.
(h)Bound by the Plan. By signing this Agreement, Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.
(i)Governing Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Texas without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Texas.
(j)Headings. The headings of the Sections of this Agreement are provided for convenience only and are not to serve as a basis for interpretation or construction and shall not constitute a part, of this Agreement.
(k)Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
11.Compliance with Legal Requirements. The grant of the Option and any other obligations of the Company under this Agreement shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Committee, in its sole discretion, may postpone the issuance or delivery of Shares as the Committee may consider appropriate and may require Participant to make such
5

representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the Shares in compliance with applicable laws, rules and regulations
[Signature Page Follows]

6

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
TRIUMPH FINANCIAL, INC.
image_03.jpg
By: _______________________
Name: Adam Nelson    
Title: EVP and General Counsel

PARTICIPANT

_ [[SIGNATURE]] __ ____ ____
[[FIRSTNAME]] [[LASTNAME]]



[Signature Page to 2025 Nonqualified Stock Option Agreement]


TRIUMPH BANCORP, INC.
RESTRICTIVE COVENANTS AGREEMENT
As a condition of any incentive compensation that I may earn and receive under any incentive-based compensation plan maintained by Triumph Financial, Inc. (together with its subsidiaries, the “Company”), and in particular, my receipt of non-qualified stock options granted under the terms of the Nonqualified Stock Option Agreement entered into between the Company and me (such agreements, the “Award Agreements”), I agree to the terms and conditions of this Restrictive Covenants Agreement (“Agreement”):
(a)Access to Confidential Information. Employee understands and agrees that in the course of performing work on behalf of the Company, he will continue to have access to, and will continue to be given Confidential Information relating to the business of the Company. Employee acknowledges and agrees that such Confidential Information includes, but is not limited to financial information pertinent to the Company and its customers, and investors, customer lists, customer and investor identities and their preferences, confidential banking and financial information of both the Company and its customers and investors, and information that Employee may create or prepare certain information related to his duties. Employee hereby expressly agrees to maintain in strictest confidence and not to access without proper business purposes (including repetitive unnecessary access), use (including without limitation in any future business or personal relationship of Employee), publish, disclose or in any way authorize anyone else to use, publish or disclose in any way, any Confidential Information relating in any manner to the business or affairs of the Company and its customers and investors, except for legitimate business-related reasons while performing duties on behalf of the Company. Employee agrees further not to remove or retain any figures, financial information, personnel data, calculations, letters, documents, lists, papers, or copies thereof, which embody Confidential Information of the Company, and to return any such information in Employee’s possession at the conclusion of Employee’s use of such information and at the conclusion of Employee’s employment with the Company.
For purposes of this Agreement, “Confidential Information” includes, but is not limited to, information in the possession of, prepared by, obtained by, compiled by, or that is used by Company, its customers, investors and/or vendors, or is prepared by, obtained by, compiled by or that is used by Employee in conjunction with his duties, and (1) is proprietary to, about, or created by the Company, its customers, investors and/or vendors; (2) is information the disclosure of which might be detrimental to the interest of the Company, its investors or customers; or (3) is not typically disclosed by the Company, its customers, investors and/or vendors, or known by persons who are not associated with the Company.
8

(b)Restrictive Covenants. Employee acknowledges that, as a result of Employee’s service with the Company, a special relationship of trust and confidence will develop between Employee, the Company and its clients and customers, and that this relationship will generate a substantial amount of good will between the Company and its clients and customers. Employee further acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect it from the loss of its Confidential Information or its customer goodwill. Employee further acknowledges that throughout his service with the Company, Employee will be provided with access to and informed of confidential, proprietary and highly sensitive information relating to the Company’s clients and customers, which is a competitive asset of the Company, and which enables Employee to benefit from the goodwill and know-how of the Company. Therefore, as a material condition to the Company’s willingness to perform its obligations hereunder, Employee agrees that, for a period of twelve (12) months following the date of the termination of employment by the Company for any reason (except as specifically set forth below), Employee will not, either for himself or in conjunction with others:
(i)solicit, divert, take away, do business with, or provide information about, or attempt to solicit, divert, take away or do business with in any fashion any of the Company’s customers, clients, business or patrons about whom Employee has Confidential Information, or with whom Employee has done business or attempted to do business on behalf of the Company;
(ii)(i) offer employment to, enter into a contract for the employment of, or attempt to entice away from the Company, any individual who is at the time of such offer or attempt, or has been during the twelve months prior to such offer or attempt, an employee of the Company, (ii) interfere with the material business relationships of the Company, or entice away any material suppliers or contractors, (iii) procure or facilitate the making of any such offer or attempt by any other person, or (iv) solicit, directly or through any other person, any investor of the Company for purposes of facilitating any investment, partnership or business opportunity unrelated to the Company. The restriction in subsection (iv) above shall not apply to any investor with which the Employee had a preexisting relationship prior to becoming employed by the Company.
Notwithstanding anything to the contrary contained herein, the foregoing restrictions in Section (b) this Restrictive Covenants Agreement shall not apply in the event Employee is terminated by the Company without Cause (as defined in the Award Agreements) during the first twelve (12) months following Employee’s execution of the Award Agreements.
(c)Representations of Employee.
(i)EMPLOYEE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF THIS AGREEMENT.
9

(ii)EMPLOYEE ACKNOWLEDGES AND RECOGNIZES THE HIGHLY COMPETITIVE NATURE OF THE COMPANY’S BUSINESS, THAT ACCESS TO CONFIDENTIAL INFORMATION RENDERS THE EMPLOYEE SPECIAL AND UNIQUE WITHIN THE COMPANY’S INDUSTRY, AND THAT THE EMPLOYEE WILL HAVE THE OPPORTUNITY TO DEVELOP SUBSTANTIAL RELATIONSHIPS WITH EXISTING AND PROSPECTIVE CLIENTS, ACCOUNTS, CUSTOMERS, CONSULTANTS, CONTRACTORS, INVESTORS, AND STRATEGIC PARTNERS OF THE COMPANY DURING THE COURSE OF AND AS A RESULT OF THE EMPLOYEE’S EMPLOYMENT WITH THE COMPANY. IN LIGHT OF THE FOREGOING, EMPLOYEE RECOGNIZES AND ACKNOWLEDGES THAT THE RESTRICTIONS AND LIMITATIONS SET FORTH IN THIS AGREEMENT ARE REASONABLE AND VALID IN GEOGRAPHICAL AND TEMPORAL SCOPE AND IN ALL OTHER RESPECTS AND ARE ESSENTIAL TO PROTECT THE VALUE OF THE BUSINESS AND ASSETS OF THE COMPANY.
(d)Severable Provisions. The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision. In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, the parties hereto agree that said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.
(e)Intellectual Property. Employee agrees to disclose and hereby assigns to the Company any and all material of a proprietary nature, particularly including, without limitation, material subject to protection as trade secrets or as patentable ideas or copyrightable works, that Employee may conceive, invent, author or discover, either solely or jointly with another or other during Employee’s employment and that relates to or is capable of use in connection with the business of the Company or any employment or products offered, manufactured, used, sold or being developed by the Company at the time said material is developed. Employee will, upon request of the Company, either during or at any time after Employee’s employment ends, regardless of how or why Employee’s employment ends, execute and deliver all papers, including applications for patents and registrations for copyrights, and do such other legal acts (entirely at the Company’s expense) as may be necessary to obtain and maintain proprietary rights in any and all countries and to vest title thereto in the Company.
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(f)Remedy. Employee understands and acknowledges that the Company has a legitimate business interest in preventing Employee from taking any actions in violation of this Policy and that this Policy is intended to protect the business and goodwill of the Company. Employee further acknowledges that a breach of this Policy will irreparably and continually damage the Company and that monetary damages alone will be inadequate to compensate the Company for such breach. Employee therefore agrees that in the event Employee violates any of the terms of this Policy, the Company will be entitled to, in addition to any other remedies available to it in law or in equity, seek temporary, preliminary and permanent injunctive relief and specific performance to enforce the terms of this Policy without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond. If Employee does take actions in violation of this Policy, Employee understands that the time periods set forth in in the applicable provisions herein will run from the date on which violations of those provisions, whether by injunction or otherwise, ends and not from the date that Employee’s employment ends. In the event any lawsuit, claim or other proceeding is brought to enforce the terms of this Policy, or to determine the validity of its terms, then the prevailing party will be entitled to recover from the non-prevailing party its reasonable attorneys’ fees and court costs incurred in obtaining enforcement of, or determining the validity of, this Policy.
(g)Waiver. Employee understands and agrees that in the event the Company waives or allows any breach of this Policy, such waiver or allowance will not constitute a waiver or allowance of any future breach, whether of a similar or dissimilar nature.
(h)Tolling. If the Company files a lawsuit in any court of competent jurisdiction alleging a breach of the non-disclosure or non-solicitation provisions of this Agreement by Employee, then any time period set forth in this Agreement relating to the post-termination restrictions on the activities of Employee will be deemed tolled as of the time the lawsuit is filed and will remain tolled until the dispute is finally resolved, either by written settlement agreement resolving all claims raised in the lawsuit, or by entry of a final judgment and final resolution of any post-judgment appellate proceedings.

* * * * * *

I, [[FIRSTNAME]] [[LASTNAME]], have executed this Agreement on the respective date set forth below:


Date: [[Date]]        [[SIGNATURE]]    
(Signature)

11
EX-31.1 6 tfin-exx311xx2q25.htm EX-31.1 Document

Exhibit 31.1
CERTIFICATION
I, Aaron P. Graft, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Triumph Financial, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounted principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
July 16, 2025
By: /s/ Aaron P. Graft
Name: Aaron P. Graft
Title: President and Chief Executive Officer

EX-31.2 7 tfin-exx312xx2q25.htm EX-31.2 Document

Exhibit 31.2
CERTIFICATION
I, W. Bradley Voss, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Triumph Financial, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounted principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
July 16, 2025
By: /s/ W. Bradley Voss
Name: W. Bradley Voss
Title: Executive Vice President and Chief Financial Officer

EX-32.1 8 tfin-exx321xx2q25.htm EX-32.1 Document

Exhibit 32.1
CERTIFICATIONS
SARBANES-OXLEY ACT SECTION 906
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, the undersigned President and Chief Executive Officer and Executive Vice President and Chief Financial Officer of Triumph Financial, Inc. (the Company) certify, on the basis of such officers’ knowledge and belief that:
(1)The Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on July 16, 2025, (the Report) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
By: /s/ Aaron P. Graft
Name: Aaron P. Graft
Title: President and Chief Executive Officer
Date: July 16, 2025
By: /s/ W. Bradley Voss
Name: W. Bradley Voss
Title: Executive Vice President and Chief Financial Officer
Date: July 16, 2025
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request. This certification accompanies the Report and shall not be treated as having been filed as part of this Report.