10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

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 BANCORP, 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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

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,18,107,493shares, as of August 1, 2016

TRIUMPH BANCORP, INC.

FORM 10-Q

June 30, 2016

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Changes in Equity	5
	Consolidated Statements of Cash Flows	6
	Condensed Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	67
Item 4.	Controls and Procedures	68
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	68
Item 1A.	Risk Factors	68
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	69
Item 5.	Other Information	69
Item 6.	Exhibits	69

i

PART I – FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

1

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2016 and December 31, 2015

(Dollar amounts in thousands, except per share amounts)

	June 30,			December 31,
	2016			2015
	(Unaudited)
ASSETS
Cash and due from banks	$	22,567		$	23,447
Interest bearing deposits with other banks		39,183			81,830
Total cash and cash equivalents		61,750			105,277
Securities - available for sale		159,790			163,169
Securities - held to maturity, fair value of $28,362 and $0, respectively		27,502			—
Loans held for sale, at fair value		—			1,341
Loans, net of allowance for loan and lease losses of $13,772 and $12,567, respectively		1,396,746			1,279,318
Federal Home Loan Bank stock, at cost		6,368			3,818
Premises and equipment, net		19,629			22,227
Other real estate owned, net		6,074			5,177
Goodwill		15,968			15,968
Intangible assets, net		10,192			11,886
Bank-owned life insurance		29,786			29,535
Deferred tax assets, net		15,042			15,945
Other assets		34,548			37,652
Total assets	$	1,783,395		$	1,691,313
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing	$	170,834		$	168,264
Interest bearing		1,104,320			1,080,686
Total deposits		1,275,154			1,248,950
Customer repurchase agreements		13,635			9,317
Federal Home Loan Bank advances		180,500			130,000
Junior subordinated debentures		24,823			24,687
Other liabilities		9,520			10,321
Total liabilities		1,503,632			1,423,275
Commitments and contingencies - See Note 8 and Note 9
Stockholders' equity - See Note 12
Preferred Stock Series A		4,550			4,550
Preferred Stock Series B		5,196			5,196
Common stock		182			181
Additional paid-in-capital		195,711			194,297
Treasury stock, at cost		(741	)		(560	)
Retained earnings		73,340			64,097
Accumulated other comprehensive income		1,525			277
Total stockholders’ equity		279,763			268,038
Total liabilities and stockholders' equity	$	1,783,395		$	1,691,313

See accompanying condensed notes to consolidated financial statements.

2

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

For the Three and Six Months Ended June 30, 2016 and 2015

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Interest and dividend income:
Loans, including fees	$	18,547		$	17,158		$	34,635		$	30,397
Factored receivables, including fees		8,639			8,654			16,461			16,163
Taxable securities		965			659			1,733			1,337
Tax exempt securities		6			16			13			28
Cash deposits		197			110			405			251
Total interest income		28,354			26,597			53,247			48,176
Interest expense:
Deposits		2,020			1,667			4,013			3,237
Junior subordinated debentures		312			278			614			550
Other borrowings		115			7			224			19
Total interest expense		2,447			1,952			4,851			3,806
Net interest income		25,907			24,645			48,396			44,370
Provision for loan losses		1,939			2,541			1,428			3,186
Net interest income after provision for loan losses		23,968			22,104			46,968			41,184
Noninterest income:
Service charges on deposits		695			666			1,354			1,278
Card income		577			578			1,123			1,101
Net OREO gains (losses) and valuation adjustments		(1,204	)		52			(1,215	)		78
Net gains on sale of securities		—			242			5			242
Net gains on sale of loans		4			491			16			1,033
Fee income		504			502			1,038			924
Bargain purchase gain		—			—			—			12,509
Asset management fees		1,605			1,274			3,234			2,232
Other		1,487			964			3,094			2,031
Total noninterest income		3,668			4,769			8,649			21,428
Noninterest expense:
Salaries and employee benefits		12,229			12,042			24,481			25,311
Occupancy, furniture and equipment		1,534			1,555			3,027			3,127
FDIC insurance and other regulatory assessments		281			271			505			534
Professional fees		1,101			852			2,174			2,179
Amortization of intangible assets		717			895			1,694			1,659
Advertising and promotion		628			526			1,147			1,069
Communications and technology		1,263			927			2,695			1,813
Other		2,578			2,567			4,686			4,726
Total noninterest expense		20,331			19,635			40,409			40,418
Net income before income tax		7,305			7,238			15,208			22,194
Income tax expense		2,679			2,586			5,576			3,498
Net income		4,626			4,652			9,632			18,696
Dividends on preferred stock		(195	)		(195	)		(389	)		(387	)
Net income available to common stockholders	$	4,431		$	4,457		$	9,243		$	18,309
Earnings per common share
Basic	$	0.25		$	0.25		$	0.52		$	1.03
Diluted	$	0.25		$	0.25		$	0.51		$	1.01

See accompanying condensed notes to consolidated financial statements.

3

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended June 30, 2016 and 2015

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Net income	$	4,626		$	4,652		$	9,632		$	18,696
Other comprehensive income:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period		536			(557	)		1,993			431
Reclassification of amount realized through sale of securities		—			(242	)		(5	)		(242	)
Tax effect		(199	)		292			(740	)		(76	)
Total other comprehensive income (loss)		337			(507	)		1,248			113
Comprehensive income	$	4,963		$	4,145		$	10,880		$	18,809

See accompanying condensed notes to consolidated financial statements.

4

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2016 and 2015

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

	Preferred Stock – Series A				Preferred Stock – Series B				Common Stock								Treasury Stock								Accumulated
			Liquidation				Liquidation							Additional											Other
	Shares		Preference		Shares		Preference		Shares			Par		Paid-in-			Shares					Retained			Comprehensive		Total
	Outstanding		Amount		Outstanding		Amount		Outstanding			Amount		Capital			Outstanding		Cost			Earnings			Income		Equity
Balance, January 1, 2015		45,500	$	4,550		51,956	$	5,196		17,963,783		$	180	$	191,049			10,984	$	(161	)	$	35,744		$	951	$	237,509
Issuance of restricted stock awards		—		—		—		—		77,956			1		(1	)		—		—			—			—		—
Forfeiture of restricted stock awards		—		—		—		—		(667	)		—		9			667		(9	)		—			—		—
Stock based compensation		—		—		—		—		—			—		1,548			—		—			—			—		1,548
Series A Preferred dividends		—		—		—		—		—			—		—			—		—			(181	)		—		(181	)
Series B Preferred dividends		—		—		—		—		—			—		—			—		—			(206	)		—		(206	)
Net income		—		—		—		—		—			—		—			—		—			18,696			—		18,696
Other comprehensive income		—		—		—		—		—			—		—			—		—			—			113		113
Balance, June 30, 2015		45,500	$	4,550		51,956	$	5,196		18,041,072		$	181	$	192,605			11,651	$	(170	)	$	54,053		$	1,064	$	257,479
Balance, January 1, 2016		45,500	$	4,550		51,956	$	5,196		18,018,200		$	181	$	194,297			34,523	$	(560	)	$	64,097		$	277	$	268,038
Issuance of restricted stock awards		—		—		—		—		101,105			1		(1	)		—		—			—			—		—
Forfeiture of restricted stock awards		—		—		—		—		(6,759	)		—		101			6,759		(101	)		—			—		—
Excess tax benefit on restricted stock vested		—		—		—		—		—			—		35			—		—			—			—		35
Stock based compensation		—		—		—		—		—			—		1,279			—		—			—			—		1,279
Purchase of treasury stock		—		—		—		—		(5,053	)		—		—			5,053		(80	)		—			—		(80	)
Series A Preferred dividends		—		—		—		—		—			—		—			—		—			(182	)		—		(182	)
Series B Preferred dividends		—		—		—		—		—			—		—			—		—			(207	)		—		(207	)
Net income		—		—		—		—		—			—		—			—		—			9,632			—		9,632
Other comprehensive income		—		—		—		—		—			—		—			—		—			—			1,248		1,248
Balance, June 30, 2016		45,500	$	4,550		51,956	$	5,196		18,107,493		$	182	$	195,711			46,335	$	(741	)	$	73,340		$	1,525	$	279,763

See accompanying condensed notes to consolidated financial statements.

5

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2016 and 2015

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	9,632		$	18,696
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		1,162			1,069
Net accretion on loans and deposits		(3,453	)		(2,720	)
Amortization of junior subordinated debentures		136			130
Net amortization on securities		326			301
Amortization of intangible assets		1,694			1,659
Deferred taxes		(135	)		(366	)
Provision for loan losses		1,428			3,186
Stock based compensation		1,279			1,548
Origination of loans held for sale		(891	)		(36,220	)
Proceeds from loan sales		2,248			36,445
Net gains on sale of securities		(5	)		(242	)
Net loss on transfer of loans to loans held for sale		81			—
Net gains on sale of loans		(16	)		(1,033	)
Net OREO (gains) losses and valuation adjustments		1,215			(78	)
Bargain purchase gain		—			(12,509	)
Income from CLO warehouse investments		(1,758	)		(1,151	)
(Increase) decrease in other assets		944			608
Increase (decrease) in other liabilities		(801	)		3,888
Net cash provided by (used in) operating activities		13,086			13,211
Cash flows from investing activities:
Purchases of securities available for sale		(3,264	)		(15,072	)
Proceeds from sales of securities available for sale		4,345			12,559
Proceeds from maturities, calls, and pay downs of securities available for sale		3,872			5,973
Purchases of securities held to maturity		(27,409	)		—
Purchases of loans (shared national credits)		(995	)		(16,685	)
Proceeds from sales of loans (shared national credits)		4,038			—
Net change in loans		(119,071	)		(115,935	)
Purchases of premises and equipment, net		(779	)		(813	)
Net proceeds from sale of OREO		528			2,926
Net cash paid for CLO warehouse investments		(10,000	)		—
Net proceeds from CLO warehouse investments		14,000			2,450
Purchases of FHLB and FRB stock, net		(2,550	)		(804	)
Cash paid for acquisitions, net of cash acquired		—			(127,591	)
Proceeds from sale of loans obtained through Doral Money Inc. acquisition		—			36,765
Net cash provided by (used in) investing activities		(137,285	)		(216,227	)
Cash flows from financing activities:
Net increase in deposits		26,323			24,184
Increase (decrease) in customer repurchase agreements		4,318			3,729
Increase (decrease) in Federal Home Loan Bank advances		50,500			16,000
Proceeds from the issuance of other borrowings		—			99,975
Repayment of other borrowings		—			(1,659	)
Purchase of treasury stock		(80	)		—
Dividends on preferred stock		(389	)		(387	)
Net cash provided by (used in) financing activities		80,672			141,842
Net increase (decrease) in cash and cash equivalents		(43,527	)		(61,174	)
Cash and cash equivalents at beginning of period		105,277			160,888
Cash and cash equivalents at end of period	$	61,750		$	99,714
Supplemental cash flow information:
Interest paid	$	4,717		$	3,629
Income taxes paid, net	$	6,018		$	2,488
Supplemental noncash disclosures:
Loans transferred to OREO	$	425		$	747
Premises transferred to OREO	$	2,215		$	—
Securities transferred in satisfaction of other borrowings	$	—		$	98,316
Loan purchases, not yet settled (shared national credits)	$	—		$	12,929
Loans transferred to loans held for sale at fair value	$	4,038		$	—

See accompanying condensed notes to consolidated financial statements.

6

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Triumph Bancorp, Inc. (collectively with its subsidiaries, “Triumph”, or the “Company” as applicable) is a financial holding company headquartered in Dallas, Texas. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Triumph Capital Advisors, LLC (“TCA”), Triumph CRA Holdings, LLC (“TCRA”), TBK Bank, SSB (“TBK Bank”), TBK Bank’s wholly owned subsidiary Advance Business Capital LLC, which currently operates under the d/b/a of Triumph Business Capital (“TBC”), and TBK Bank’s wholly owned subsidiary Triumph Insurance Group, Inc. (“TIG”).

TBK Bank does business under the following names:  (i) Triumph Community Bank (“TCB”) and Triumph Savings Bank (“TSB”) with respect to its community banking business in respective markets; (ii) Triumph Commercial Finance (“TCF”) with respect to its asset-based lending, equipment lending and general factoring commercial finance products; (iii) Triumph Healthcare Finance (“THF”) with respect to its healthcare asset-based lending business; and (iv) Triumph Premium Finance (“TPF”) with respect to its insurance premium financing business.

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. 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. 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, 2015. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The Company has four reportable segments consisting of Factoring, Banking, Asset Management, and Corporate. The Company’s Chief Executive Officer uses segment results to make operating and strategic decisions.  

Newly Issued, But Not Yet Effective Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard was originally effective for the Company on January 1, 2017.  However, in August 2015 the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date” which deferred the mandatory effective date the new standard would take effect to reporting periods beginning after December 15, 2017, with early adoption allowed as of the original effective date for public companies. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the effect that ASU 2016-01 will have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued this ASU to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under current U.S. GAAP and disclosing key information about leasing arrangements. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early application of this ASU is permitted for all entities. The Company is currently assessing the impact that the adoption of this standard will have on the financial condition and results of operations of the Company.

7

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”).  The FASB issued this ASU to improve the accounting for share-based payments.  ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions, including:  the presentation of income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and calculation of diluted earnings per share.  The amendments in this ASU are effective for fiscal years beginning after December 31, 2016, and interim periods within those years for public business entities.  Early adoption is permitted in any interim or annual period provided that the entire ASU is adopted.  Adoption of ASU 2016-09 is not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 31, 2019, and interim periods within those years for public business entities that are SEC filers.  Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018.  The Company is currently assessing the impact that the adoption of this standard will have on the financial condition and results of operations of the Company.

NOTE 2 – Business combinations

ColoEast Bankshares, Inc.

On August 1, 2016, the Company acquired 100% of the outstanding common stock of ColoEast Bankshares, Inc. (“ColoEast”) and its community banking subsidiary, Colorado East Bank & Trust, in an all-cash transaction for $70,000,000. Colorado East Bank & Trust, which was merged into TBK Bank upon closing, offers personal checking, savings, CD, money market, HSA, IRA, NOW and business accounts, as well as consumer, commercial and mortgage loans from 18 branches and one loan production office located throughout Colorado and far western Kansas. The acquisition expands the Company’s market into Colorado and further diversifies the Company’s loan, customer, and deposit base.

The initial accounting for the ColoEast acquisition has not been completed because the fair value of loans, deposits, and numerous other items has not yet been determined.

Doral Money Acquisition

On February 27, 2015, the Company entered into a Purchase and Sale Agreement with the Federal Deposit Insurance Corporation (“FDIC”), in its capacity as receiver of Doral Bank, to acquire 100% of the equity of Doral Money, Inc. (“Doral Money”), a subsidiary of Doral Bank, and the management contracts associated with two active collateralized loan obligations (“CLOs”) with approximately $700,000,000 in assets under management. The consideration transferred in the acquisition consisted of cash paid of $135,864,000. The primary purpose of the acquisition was to expand the CLO assets under management at TCA.

On February 26, 2015, the Company entered into a $99,975,000 secured term loan credit facility payable to a third party, with an interest rate equal to LIBOR plus 3.5%, and a maturity date of March 31, 2015.  The proceeds from the loan were used by the Company to partially fund the Doral Money acquisition.

The acquisition was completed on March 3, 2015, at which time the Company also repaid the $99,975,000 third party secured term loan credit facility in full by delivering the securities issued by the CLOs that were acquired from Doral Money with an acquisition date fair value of $98,316,000 and cash representing payments received on the CLO securities in the amount of $1,659,000.

8

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A summary of the fair values of assets acquired, liabilities assumed, net consideration transferred, and the resulting bargain purchase gain is as follows:

	Initial Values			Measurement
	Recorded at			Period			Adjusted
(Dollars in thousands)	Acquisition Date			Adjustments			Values
Assets acquired:
Cash	$	8,273		$	—		$	8,273
CLO Securities		98,316			—			98,316
Intangible asset - CLO management contracts		1,918			—			1,918
Loans		36,765			900			37,665
Prepaid corporate income tax		3,014			1,688			4,702
Other assets		772			—			772
		149,058			2,588			151,646
Liabilities assumed:
Deferred tax liability		663			—			663
Other liabilities		22			(20	)		2
		685			(20	)		665
Fair value of net assets acquired		148,373			2,608			150,981
Net consideration transferred		135,864			—			135,864
Bargain purchase gain	$	(12,509	)	$	(2,608	)	$	(15,117	)

The Company completed the acquisition via an FDIC bid process for Doral Money as part of the Doral Bank failure and the resulting nontaxable bargain purchase gain represents the excess of the fair value of the net assets acquired over the fair value of the net consideration transferred.  The Company subsequently recorded measurement period adjustments related to the finalization of income taxes associated with the transaction and the valuation of loans acquired in the transaction, which increased the bargain purchase gain by $1,708,000 and $900,000 during the three months ended September 30, 2015 and the three months ended December 31, 2015, respectively.  

NOTE 3 - SECURITIES

Securities have been classified in the financial statements as available for sale or held to maturity. The amortized cost of securities and their approximate fair values at June 30, 2016 and December 31, 2015 are as follows:

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
June 30, 2016	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,388	$	1,749	$	—		$	92,137
Mortgage-backed securities, residential		25,004		623		—			25,627
Asset backed securities		13,179		12		(335	)		12,856
State and municipal		1,266		36		—			1,302
Corporate bonds		27,358		351		(11	)		27,698
SBA pooled securities		168		2		—			170
Total available for sale securities	$	157,363	$	2,773	$	(346	)	$	159,790
			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
	Cost		Gains		Losses			Value
Held to maturity securities:
CLO securities	$	27,502	$	860	$	—		$	28,362

9

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,533	$	518	$	(17	)	$	91,034
Mortgage-backed securities, residential		28,006		361		(27	)		28,340
Asset backed securities		17,957		24		(455	)		17,526
State and municipal		1,509		17		—			1,526
Corporate bonds		24,542		74		(57	)		24,559
SBA pooled securities		183		1		—			184
Total available for sale securities	$	162,730	$	995	$	(556	)	$	163,169

The amortized cost and estimated fair value of securities at June 30, 2016, 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
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	31,040	$	31,136	$	—	$	—
Due from one year to five years		86,162		88,132		—		—
Due from five years to ten years		1,534		1,538		—		—
Due after ten years		276		331		27,502		28,362
		119,012		121,137		27,502		28,362
Mortgage-backed securities, residential		25,004		25,627		—		—
Asset backed securities		13,179		12,856		—		—
SBA pooled securities		168		170		—		—
	$	157,363	$	159,790	$	27,502	$	28,362

For the six months ended June 30, 2016, securities were sold resulting in proceeds of $4,345,000, gross gains of $5,000, and no losses. There were no sales of securities during the three months ended June 30, 2016. For the three and six months ended June 30, 2015, securities were sold resulting in proceeds of $12,559,000, gross gains of $242,000, and no losses.

Securities with a carrying amount of approximately $98,969,000 and $100,034,000 at June 30, 2016 and December 31, 2015, respectively, were pledged to secure customer repurchase agreements, Federal Home Loan Bank advances, and for other purposes required or permitted by law.

10

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Information pertaining to securities with gross unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2016	Value		Losses			Value		Losses			Value		Losses
Available for sale securities:
U.S. Government agency obligations	$	—	$	—		$	—	$	—		$	—	$	—
Mortgage-backed securities, residential		—		—			—		—			—		—
Asset backed securities		7,947		(335	)		—		—			7,947		(335	)
State and municipal		—		—			—		—			—		—
Corporate bonds		1,395		(11	)		—		—			1,395		(11	)
SBA pooled securities		—		—			—		—			—		—
	$	9,342	$	(346	)	$	—	$	—		$	9,342	$	(346	)
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Government agency obligations	$	10,029	$	(17	)	$	—	$	—		$	10,029	$	(17	)
Mortgage-backed securities, residential		4,948		(27	)		—		—			4,948		(27	)
Asset backed securities		8,031		(416	)		4,605		(39	)		12,636		(455	)
State and municipal		—		—			—		—			—		—
Corporate bonds		10,434		(57	)		—		—			10,434		(57	)
SBA pooled securities		—		—			—		—			—		—
	$	33,442	$	(517	)	$	4,605	$	(39	)	$	38,047	$	(556	)

Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been 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.

As of June 30, 2016, management does not have the intent to sell any of the securities classified as available for sale with unrealized losses in the table above 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 bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe that any of the securities are impaired due to reasons of credit quality. Accordingly, as of June 30, 2016, management believes that the unrealized losses detailed in the previous table are temporary and no other than temporary impairment loss has been recognized in the Company’s consolidated statements of income.

11

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 - LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES

Loans at June 30, 2016 and December 31, 2015 consisted of the following:

	June 30,			December 31,
(Dollars in thousands)	2016			2015
Commercial real estate	$	298,991		$	291,819
Construction, land development, land		36,498			43,876
1-4 family residential properties		74,121			78,244
Farmland		35,795			33,573
Commercial		574,508			495,356
Factored receivables		237,520			215,088
Consumer		17,339			13,050
Mortgage warehouse		135,746			120,879
Total		1,410,518			1,291,885
Allowance for loan and lease losses		(13,772	)		(12,567	)
	$	1,396,746		$	1,279,318

Total loans include net deferred origination and factoring fees totaling $1,114,096 and $1,218,000 at June 30, 2016 and December 31, 2015, respectively.

Loans with carrying amounts of $290,975,000 and $280,289,000 at June 30, 2016 and December 31, 2015, respectively, were pledged to secure Federal Home Loan Bank borrowing capacity.

During the three and six months ended June 30, 2016, loans with a carrying amount of $1,238,000 and $4,119,000, respectively, were transferred to loans held for sale at their fair value of $1,233,000 and $4,038,000, respectively, as the Company made the decision to sell the loans. The declines in fair value of $5,000 and $81,000 for the three and six months ended June 30, 2016, respectively, were recorded as a reduction in other noninterest income in the consolidated statements of income. During the three months ended June 30, 2016, these loans were sold resulting in proceeds equal to their fair values at the time of transfer. No loan transfers were recorded during the six months ended June 30, 2015.

12

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Allowance for Loan and Lease Losses

The activity in the allowance for loan and lease losses (“ALLL”) during the three and six months ended June 30, 2016 and 2015 is as follows:

(Dollars in thousands)	Beginning										Ending
Three months ended June 30, 2016	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,619	$	161		$	(1	)	$	13	$	1,792
Construction, land development, land		198		(17	)		—			—		181
1-4 family residential properties		285		(50	)		(47	)		71		259
Farmland		133		10			—			—		143
Commercial		5,331		1,134			(169	)		401		6,697
Factored receivables		4,110		524			(450	)		20		4,204
Consumer		222		169			(112	)		14		293
Mortgage warehouse		195		8			—			—		203
	$	12,093	$	1,939		$	(779	)	$	519	$	13,772
(Dollars in thousands)	Beginning										Ending
Three months ended June 30, 2015	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,075	$	183		$	(54	)	$	10	$	1,214
Construction, land development, land		344		2			—			—		346
1-4 family residential properties		223		29			(78	)		77		251
Farmland		26		2			—			—		28
Commercial		3,996		1,109			(45	)		4		5,064
Factored receivables		3,380		1,049			(312	)		18		4,135
Consumer		84		61			(52	)		67		160
Mortgage warehouse		158		106			—			—		264
	$	9,286	$	2,541		$	(541	)	$	176	$	11,462

13

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)	Beginning										Ending
Six months ended June 30, 2016	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,489	$	290		$	(1	)	$	14	$	1,792
Construction, land development, land		367		(186	)		—			—		181
1-4 family residential properties		274		(28	)		(63	)		76		259
Farmland		134		9			—			—		143
Commercial		5,276		1,159			(169	)		431		6,697
Factored receivables		4,509		84			(458	)		69		4,204
Consumer		216		199			(155	)		33		293
Mortgage warehouse		302		(99	)		—			—		203
	$	12,567	$	1,428		$	(846	)	$	623	$	13,772
(Dollars in thousands)	Beginning										Ending
Six months ended June 30, 2015	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	533	$	773		$	(143	)	$	51	$	1,214
Construction, land development, land		333		13			—			—		346
1-4 family residential properties		215		119			(183	)		100		251
Farmland		19		9			—			—		28
Commercial		4,003		1,102			(47	)		6		5,064
Factored receivables		3,462		1,004			(379	)		48		4,135
Consumer		140		40			(147	)		127		160
Mortgage warehouse		138		126			—			—		264
	$	8,843	$	3,186		$	(899	)	$	332	$	11,462

The following table presents loans individually and collectively evaluated for impairment, as well as purchased credit impaired (“PCI”) loans, and their respective ALLL allocations:

(Dollars in thousands)	Loan Evaluation								ALLL Allocations
June 30, 2016	Individually		Collectively		PCI		Total loans		Individually		Collectively		PCI		Total ALLL
Commercial real estate	$	687	$	294,583	$	3,721	$	298,991	$	100	$	1,251	$	441	$	1,792
Construction, land development, land		275		35,121		1,102		36,498		25		156		—		181
1-4 family residential properties		920		70,489		2,712		74,121		1		258		—		259
Farmland		—		35,795		—		35,795		—		143		—		143
Commercial		13,270		558,299		2,939		574,508		2,047		4,650		—		6,697
Factored receivables		3,207		234,313		—		237,520		1,315		2,889		—		4,204
Consumer		34		17,305		—		17,339		—		293		—		293
Mortgage warehouse		—		135,746		—		135,746		—		203		—		203
	$	18,393	$	1,381,651	$	10,474	$	1,410,518	$	3,488	$	9,843	$	441	$	13,772
(Dollars in thousands)	Loan Evaluation								ALLL Allocations
December 31, 2015	Individually		Collectively		PCI		Total loans		Individually		Collectively		PCI		Total ALLL
Commercial real estate	$	724	$	286,006	$	5,089	$	291,819	$	100	$	1,034	$	355	$	1,489
Construction, land development, land		—		42,499		1,377		43,876		—		367		—		367
1-4 family residential properties		618		74,714		2,912		78,244		1		273		—		274
Farmland		—		33,573		—		33,573		—		134		—		134
Commercial		7,916		483,587		3,853		495,356		796		4,480		—		5,276
Factored receivables		3,422		211,666		—		215,088		1,694		2,815		—		4,509
Consumer		—		13,050		—		13,050		—		216		—		216
Mortgage warehouse		—		120,879		—		120,879		—		302		—		302
	$	12,680	$	1,265,974	$	13,231	$	1,291,885	$	2,591	$	9,621	$	355	$	12,567

14

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following is a summary of information pertaining to impaired loans. Loans included in these tables are non-PCI impaired loans and PCI loans that have deteriorated subsequent to acquisition and as a result have been deemed impaired and an allowance recorded. PCI loans that have not deteriorated subsequent to acquisition are not considered impaired and therefore do not require an allowance and are excluded from these tables.

	Impaired Loans and Purchased Credit						Impaired Loans
	Impaired Loans With a Valuation Allowance						Without a Valuation Allowance
(Dollars in thousands)	Recorded		Unpaid		Related		Recorded		Unpaid
June 30, 2016	Investment		Principal		Allowance		Investment		Principal
Commercial real estate	$	517	$	517	$	100	$	170	$	206
Construction, land development, land		275		275		25		—		—
1-4 family residential properties		10		19		1		910		1,031
Farmland		—		—		—		—		—
Commercial		7,164		7,191		2,047		6,106		6,115
Factored receivables		1,980		1,980		1,315		1,227		1,227
Consumer		—		—		—		34		34
Mortgage warehouse		—		—		—		—		—
PCI		1,442		1,679		441		—		—
	$	11,388	$	11,661	$	3,929	$	8,447	$	8,613
	Impaired Loans and Purchased Credit						Impaired Loans
	Impaired Loans With a Valuation Allowance						Without a Valuation Allowance
(Dollars in thousands)	Recorded		Unpaid		Related		Recorded		Unpaid
December 31, 2015	Investment		Principal		Allowance		Investment		Principal
Commercial real estate	$	531	$	532	$	100	$	193	$	229
Construction, land development, land		—		—		—		—		—
1-4 family residential properties		14		21		1		604		793
Farmland		—		—		—		—		—
Commercial		1,491		1,520		796		6,425		6,433
Factored receivables		2,850		2,850		1,694		572		572
Consumer		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
PCI		525		525		355		—		—
	$	5,411	$	5,448	$	2,946	$	7,794	$	8,027

15

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents average impaired loans and interest recognized on impaired loans for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended				Three Months Ended
	June 30, 2016				June 30, 2015
	Average		Interest		Average		Interest
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate	$	702	$	—	$	1,926	$	1
Construction, land development, land		138		—		—		—
1-4 family residential properties		779		—		433		9
Farmland		—		—		—		—
Commercial		12,769		73		4,833		80
Factored receivables		4,074		—		1,957		—
Consumer		35		—		—		—
Mortgage warehouse		—		—		—		—
PCI		1,432		—		721		—
	$	19,929	$	73	$	9,870	$	90
	Six Months Ended				Six Months Ended
	June 30, 2016				June 30, 2015
	Average		Interest		Average		Interest
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate	$	706	$	—	$	1,928	$	4
Construction, land development, land		138		2		—		—
1-4 family residential properties		775		4		647		32
Farmland		—		—		—		—
Commercial		10,593		247		4,992		119
Factored receivables		3,309		—		1,958		—
Consumer		16		—		—		—
Mortgage warehouse		—		—		—		—
PCI		983		—		263		—
	$	16,520	$	253	$	9,788	$	155

16

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the unpaid principal and recorded investment for loans at June 30, 2016 and December 31, 2015. The difference between the unpaid principal balance and recorded investment is principally associated with (1) premiums and discounts associated with acquisition date fair value adjustments on acquired loans (both PCI and non-PCI), (2) net deferred origination costs and fees, and (3) previous charge-offs.

(Dollars in thousands)	Recorded		Unpaid
June 30, 2016	Investment		Principal		Difference
Commercial real estate	$	298,991	$	301,586	$	(2,595	)
Construction, land development, land		36,498		37,972		(1,474	)
1-4 family residential properties		74,121		76,456		(2,335	)
Farmland		35,795		35,741		54
Commercial		574,508		575,213		(705	)
Factored receivables		237,520		238,660		(1,140	)
Consumer		17,339		17,321		18
Mortgage warehouse		135,746		135,746		—
	$	1,410,518	$	1,418,695	$	(8,177	)
	Recorded		Unpaid
December 31, 2015	Investment		Principal		Difference
Commercial	$	291,819	$	299,272	$	(7,453	)
Construction, land development, land		43,876		45,376		(1,500	)
1-4 family residential properties		78,244		81,141		(2,897	)
Farmland		33,573		33,533		40
Commercial		495,356		496,719		(1,363	)
Factored receivables		215,088		216,201		(1,113	)
Consumer		13,050		13,072		(22	)
Mortgage warehouse		120,879		120,879		—
	$	1,291,885	$	1,306,193	$	(14,308	)

At June 30, 2016 and December 31, 2015, the Company had $23,854,000 and $21,188,000, 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.

17

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Past Due and Nonaccrual Loans

The following is a summary of contractually past due and nonaccrual loans at June 30, 2016 and December 31, 2015:

			Past Due 90
(Dollars in thousands)	30-89 Days		Days or More
June 30, 2016	Past Due		Still Accruing		Nonaccrual		Total
Commercial real estate	$	—	$	—	$	687	$	687
Construction, land development, land		—		—		275		275
1-4 family residential properties		320		—		949		1,269
Farmland		—		—		—		—
Commercial		6,377		174		8,666		15,217
Factored receivables		12,703		2,260		—		14,963
Consumer		375		—		34		409
Mortgage warehouse		—		—		—		—
PCI		102		786		5,771		6,659
	$	19,877	$	3,220	$	16,382	$	39,479
			Past Due 90
(Dollars in thousands)	30-89 Days		Days or More
December 31, 2015	Past Due		Still Accruing		Nonaccrual		Total
Commercial real estate	$	693	$	—	$	673	$	1,366
Construction, land development, land		—		—		—		—
1-4 family residential properties		909		9		533		1,451
Farmland		—		—		—		—
Commercial		3,704		—		2,021		5,725
Factored receivables		12,379		1,931		—		14,310
Consumer		286		—		—		286
Mortgage warehouse		—		—		—		—
PCI		1,092		—		6,867		7,959
	$	19,063	$	1,940	$	10,094	$	31,097

The following table presents information regarding nonperforming loans at the dates indicated:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Nonaccrual loans(1)	$	16,382	$	10,094
Factored receivables greater than 90 days past due		2,260		1,931
Troubled debt restructurings accruing interest		3,359		1,330
	$	22,001	$	13,355

⁽¹⁾ Includes troubled debt restructurings of $2,789,000 and $53,000 at June 30, 2016 and December 31, 2015, respectively.

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. This analysis includes every loan and is performed 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:

Loans classified as pass are loans with low to average risk and not otherwise classified as substandard or doubtful.

18

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Substandard:

Loans classified as substandard 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.

Doubtful:

Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with 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.

PCI:

At acquisition, PCI loans had the characteristics of substandard loans and it was probable, at acquisition, that all contractually required principal and interest payments would not be collected. The Company evaluates these loans on a projected cash flow basis with this evaluation performed quarterly.

As of June 30, 2016 and December 31, 2015, based on the most recent analysis performed, the risk category of loans is as follows:

(Dollars in thousands)
June 30, 2016	Pass		Substandard		Doubtful		PCI		Total
Commercial real estate	$	294,273	$	997	$	—	$	3,721	$	298,991
Construction, land development, land		35,121		275		—		1,102		36,498
1-4 family residential		70,489		920		—		2,712		74,121
Farmland		35,795		—		—		—		35,795
Commercial		546,663		24,906		—		2,939		574,508
Factored receivables		234,313		2,239		968		—		237,520
Consumer		17,303		36		—		—		17,339
Mortgage warehouse		135,746		—		—		—		135,746
	$	1,369,703	$	29,373	$	968	$	10,474	$	1,410,518
(Dollars in thousands)
December 31, 2015	Pass		Substandard		Doubtful		PCI		Total
Commercial real estate	$	284,753	$	1,977	$	—	$	5,089	$	291,819
Construction, land development, land		42,499		—		—		1,377		43,876
1-4 family residential		73,838		1,494		—		2,912		78,244
Farmland		33,573		—		—		—		33,573
Commercial		470,208		21,295		—		3,853		495,356
Factored receivables		212,588		1,019		1,481		—		215,088
Consumer		13,050		—		—		—		13,050
Mortgage warehouse		120,879		—		—		—		120,879
	$	1,251,388	$	25,785	$	1,481	$	13,231	$	1,291,885

Troubled Debt Restructurings

The Company had a recorded investment in troubled debt restructurings of $6,148,000 and $1,383,000 as of June 30, 2016 and December 31, 2015, respectively.

19

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents loans modified as troubled debt restructurings that occurred during the six months ended June 30, 2016 and 2015:

			Pre-Modification		Post-Modification
			Outstanding		Outstanding
(Dollars in thousands)	Number of		Recorded		Recorded
June 30, 2016	Loans		Investment		Investment
Commercial		16	$	5,730	$	5,730

			Pre-Modification		Post-Modification
			Outstanding		Outstanding
(Dollars in thousands)	Number of		Recorded		Recorded
June 30, 2015	Loans		Investment		Investment
Commercial		1	$	148	$	148

As of June 30, 2016, there have been no defaults on any loans that were modified as troubled debt restructurings during the preceding twelve months. Default is determined at 90 or more days past due. The modifications primarily related to extending the amortization periods of the loans. The Company did not grant principal reductions on any restructured loans.

Purchased Credit Impaired Loans

The Company has loans that were acquired, for which there was, at acquisition, evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding contractually required principal and interest and the carrying amount of these loans included in the balance sheet amounts of loans at June 30, 2016 and December 31, 2015, are as follows:

	June 30,		December 31,
	2016		2015
Contractually required principal and interest:
Real estate loans	$	13,277	$	17,800
Commercial loans		4,032		5,335
Outstanding contractually required principal and interest	$	17,309	$	23,135
Gross carrying amount included in loans receivable	$	10,474	$	13,231

The changes in accretable yield during the three and six months ended June 30, 2016 and 2015 in regard to loans transferred at acquisition for which it was probable that all contractually required payments would not be collected are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Accretable yield, beginning balance	$	2,064		$	4,496		$	2,593		$	4,977
Additions		—			—			—			—
Accretion		(1,518	)		(1,031	)		(2,034	)		(1,460	)
Reclassification from nonaccretable to accretable yield		646			585			646			585
Disposals		—			(147	)		(13	)		(199	)
Accretable yield, ending balance	$	1,192		$	3,903		$	1,192		$	3,903

20

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5 - GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets consist of the following:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Goodwill	$	15,968	$	15,968

	June 30, 2016							December 31, 2015
	Gross Carrying		Accumulated			Net Carrying		Gross Carrying		Accumulated			Net Carrying
(Dollars in thousands)	Amount		Amortization			Amount		Amount		Amortization			Amount
Core deposit intangibles	$	14,586	$	(6,855	)	$	7,731	$	14,586	$	(5,765	)	$	8,821
Other intangible assets		4,830		(2,369	)		2,461		4,830		(1,765	)		3,065
	$	19,416	$	(9,224	)	$	10,192	$	19,416	$	(7,530	)	$	11,886

The changes in goodwill and intangible assets during the three and six months ended June 30, 2016 and 2015 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015			2016			2015
Beginning balance	$	26,877		$	30,211		$	27,854		$	29,057
Acquired intangibles		—			858			—			2,776
Amortization of intangibles		(717	)		(895	)		(1,694	)		(1,659	)
Ending balance	$	26,160		$	30,174		$	26,160		$	30,174

NOTE 6 – Variable Interest Entities

Collateralized Loan Obligation Funds – Closed

The Company, through its subsidiary TCA, acts as the asset manager or provides certain middle- and back-office services to the asset manager of various CLO funds. TCA earns asset management fees in accordance with the terms of its asset management or staff and services agreements associated with the CLO funds. TCA earned asset management fees totaling $1,605,000 and $3,234,000 for the three and six months ended June 30, 2016, respectively, and $1,274,000 and $2,232,000 for the three and six months ended June 30, 2015, respectively.

The following table summarizes the closed CLO offerings with assets managed by TCA:

	Offering	Offering
(Dollars in thousands)	Date	Amount
Trinitas CLO I, LTD (Trinitas I)	May 1, 2014	$	400,000
Trinitas CLO II, LTD (Trinitas II)	August 4, 2014	$	416,000
Doral CLO III, LTD (Doral III)(1)	December 17, 2012	$	310,800
Trinitas CLO III, LTD (Trinitas III)	June 9, 2015	$	409,375

⁽¹⁾ Acquired management contract as part of the Doral Money acquisition discussed in Note 2.

The securities sold in the above CLO offerings were issued in a series of tranches ranging from an AAA rated debt tranche to an unrated tranche of subordinated notes. The Company does not hold any of the securities issued in these CLO offerings.  A related party of the Company holds insignificant interests in Trinitas II and Trinitas III.

21

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company performed a consolidation analysis to determine whether the Company was required to consolidate the assets, liabilities, equity or operations of the above closed CLO funds in its financial statements. The Company concluded that the closed CLO funds are variable interest entities; however, the Company, through TCA, does not hold variable interests in the entities as the Company’s interest in the CLO funds is limited to the asset management fees payable to TCA under their asset management agreements and the interests of its related parties are insignificant.  The Company concluded that the asset management fees were not variable interests in the CLO funds as (a) the asset management fees are commensurate with the services provided, (b) the asset management agreements include only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated on an arm’s-length basis, and (c) the Company does not hold other interests in the CLO funds (including interests held through related parties) that individually or in the aggregate absorb more than an insignificant amount of the CLO funds’ expected losses or receive more than an insignificant amount of the CLO funds’ expected residual returns. Consequently, the Company concluded that it was not required to consolidate the assets, liabilities, equity or operations of these CLO funds in its financial statements.

The following table summarizes the closed CLO offerings for which TCA is not the asset manager, but provides certain middle- and back-office services to the asset manager:

	Offering	Offering
(Dollars in thousands)	Date	Amount
Trinitas CLO IV, LTD (Trinitas IV)	June 2, 2016	$	406,650

The securities sold in the above CLO offering were issued in a series of tranches ranging from an AAA rated debt tranche to an unrated tranche of subordinated notes. The Company holds an investment in the subordinated notes of Trinitas IV with a carrying amount of $1,634,000, which is classified as a held to maturity security within the Company’s consolidated balance sheet at June 30, 2016.  

The Company performed a consolidation analysis to confirm whether the Company was required to consolidate the assets, liabilities, equity or operations of the above closed CLO fund in its financial statements. The Company concluded that the closed CLO fund is a variable interest entity and that the Company holds a variable interest in the entity in the form of its investment in the subordinated notes of entity. However, the Company also concluded that as TCA is not the named asset manager of the CLO fund, the Company does not have the power to direct the activities that most significantly impact the entity’s economic performance. As a result, the Company is not the primary beneficiary and therefore is not required to consolidate the assets, liabilities, equity, or operations of the closed CLO fund in the Company’s financial statements.

Collateralized Loan Obligation Funds – Warehouse Phase

On September 21, 2015 and June 17, 2016, Trinitas CLO V, Ltd. (“Trinitas V”) and Trinitas CLO VI, Ltd. (“Trinitas VI”), respectively, were formed to be the issuers of CLO offerings.  Trinitas V and Trinitas VI are capitalized with subordinated debt issued to the Company and third party investors.  Each entity entered into a warehouse credit agreement in order to begin acquiring senior secured loan assets that will comprise the initial collateral pool of the CLOs once issued. When finalized, Trinitas V and Trinitas VI will use the proceeds of the debt and equity interests sold in the offering for the final CLO securitization structures to repay the initial warehouse phase debt and equity holders. In the final CLO securitization structures, interest and principal repayment of the leveraged loans held by Trinitas V and Trinitas VI will be used to repay debt holders with any excess cash flows used to provide a return on capital to equity investors. During their warehousing periods, TCA acts as portfolio manager for Trinitas V and provides middle- and back-office support as a staff and services provider for Trinitas VI. TCA does not earn management or other fees from Trinitas V or Trinitas VI during the warehouse phase.  

At June 30, 2016, the Company’s loss exposure to Trinitas V and Trinitas VI is limited to its combined $17,301,000 investment in the entities which is classified as other assets within the Company’s consolidated balance sheet.

The Company performed a consolidation analysis of Trinitas V and Trinitas VI during the warehouse phase and concluded that Trinitas V and Trinitas VI are variable interest entities and that the Company holds variable interests in the entities that could potentially be significant to the entities in the form of its investments in the subordinated notes of the entities. However, the Company also concluded that due to certain approval and denial powers available to the senior lender under the warehouse credit facility for Trinitas V which provide for shared decision-making powers, and as the Company is not the named portfolio manager for Trinitas VI, but only acts as staff and services provider, the Company does not have the power to direct the activities that most significantly impact the entities’ economic performance.  As a result, the Company is not the primary beneficiary and therefore is not required to consolidate the assets, liabilities, equity, or operations of the entities in the Company’s financial statements.

22

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 7 - Deposits

Deposits at June 30, 2016 and December 31, 2015 are summarized as follows:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Noninterest bearing demand	$	170,834	$	168,264
Interest bearing demand		235,877		238,833
Individual retirement accounts		64,204		60,971
Money market		120,929		112,214
Savings		77,625		74,759
Certificates of deposit		555,710		543,909
Brokered deposits		49,975		50,000
Total Deposits	$	1,275,154	$	1,248,950

At June 30, 2016, scheduled maturities of certificates of deposits, individual retirement accounts and brokered deposits are as follows:

(Dollars in thousands)	June 30, 2016
Within one year	$	510,421
After one but within two years		120,524
After two but within three years		21,961
After three but within four years		10,956
After four but within five years		6,027
Total	$	669,889

Time deposits, including individual retirement accounts, certificates of deposit, and brokered deposits, with individual balances of $250,000 and greater totaled $112,418,000 and $106,258,000 at June 30, 2016 and December 31, 2015, respectively.

NOTE 8 - Legal Contingencies

Various legal claims have arisen from time to time in the normal course of business which, in the opinion of management, will have no material effect on the Company’s consolidated financial statements. The Company does not anticipate any material losses as a result of commitments and contingent liabilities.

Trademark Infringement Lawsuit

On February 18, 2015, a trademark infringement suit was filed in the United States District Court for the Western District of Tennessee Western Division against the Company and certain subsidiaries by Triumph Bancshares, Inc. and Triumph Bank, N.A., asserting that the Company’s use of “Triumph” as part of the Company’s trademarks and domain names causes a likelihood of confusion, has caused actual confusion, and infringes plaintiffs’ trademarks.  The suit was settled and did not have a material impact on the financial condition and results of operations of the Company.

NOTE 9 - 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 instruments.

23

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The contractual amounts of financial instruments with off-balance sheet risk were as follows:

	June 30, 2016				December 31, 2015
(Dollars in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	25,881	$	3,950	$	6,571	$	2,949
Unused lines of credit		45,862		86,396		35,514		81,189
Standby letters of credit		1,072		2,169		1,030		1,999

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.

NOTE 10 - 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 our methodologies disclosed in our annual financial statements.

Assets measured at fair value on a recurring basis are summarized in the table below. There were no liabilities measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015.

(Dollars in thousands)	Fair Value Measurements Using						Total
June 30, 2016	Level 1		Level 2		Level 3		Fair Value
Securities available for sale	$	—	$	159,790	$	—	$	159,790
(Dollars in thousands)	Fair Value Measurements Using						Total
December 31, 2015	Level 1		Level 2		Level 3		Fair Value
Securities available for sale	$	—	$	163,169	$	—	$	163,169
Loans held for sale		—		1,341		—		1,341

There were no transfers between levels during 2016 or 2015.  

24

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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, 2016 and December 31, 2015.

(Dollars in thousands)	Fair Value Measurements Using						Total
June 30, 2016	Level 1		Level 2		Level 3		Fair Value
Impaired loans
Commercial real estate	$	—	$	—	$	417	$	417
Construction, land development, land		—		—		250		250
1-4 family residential properties		—		—		9		9
Commercial		—		—		5,117		5,117
Factored receivables		—		—		665		665
PCI		—		—		1,001		1,001
Other real estate owned (1)
Commercial		—		—		698		698
Construction, land development, land		—		—		253		253
1-4 family residential properties		—		—		124		124
	$	—	$	—	$	8,534	$	8,534
(Dollars in thousands)	Fair Value Measurements Using						Total
December 31, 2015	Level 1		Level 2		Level 3		Fair Value
Impaired loans
Commercial real estate	$	—	$	—	$	431	$	431
1-4 family residential properties		—		—		13		13
Commercial		—		—		695		695
Factored receivables		—		—		1,156		1,156
PCI		—		—		170		170
Other real estate owned (1)
1-4 family residential properties		—		—		128		128
Construction, land development, land		—		—		1,377		1,377
	$	—	$	—	$	3,970	$	3,970

⁽¹⁾ Represents the fair value of OREO that was adjusted during the period and subsequent to its initial classification as OREO

Impaired Loans with Specific Allocation of ALLL:    A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due pursuant to the contractual terms of the loan agreement. Impairment 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. Fair value of the impaired 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 of the underlying collateral.

OREO:    OREO is comprised of real estate acquired in partial or full satisfaction of loans. OREO is recorded at its estimated fair value less estimated selling and closing costs at the date of transfer, with any excess of the related loan balance over the fair value less expected selling costs is charged to the ALLL. Subsequent changes in fair value are reported as adjustments to the carrying amount and are recorded against earnings. The Company outsources the valuation of OREO with material balances to third party appraisers. 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.

25

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The estimated fair values of the Company’s financial instruments at June 30, 2016 and December 31, 2015 were as follows:

(Dollars in thousands)	Carrying		Fair Value Measurements Using						Total
June 30, 2016	Amount		Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and cash equivalents	$	61,750	$	61,750	$	—	$	—	$	61,750
Securities - held to maturity		27,502		—		26,713		1,649		28,362
Loans not previously presented, net		1,389,287		—		—		1,392,276		1,392,276
FHLB stock		6,368	N/A		N/A		N/A		N/A
Accrued interest receivable		5,260		—		5,260		—		5,260
Financial liabilities:
Deposits		1,275,154		—		1,277,777		—		1,277,777
Customer repurchase agreements		13,635		—		13,635		—		13,635
Federal Home Loan Bank advances		180,500				180,497				180,497
Junior subordinated debentures		24,823		—		25,477		—		25,477
Accrued interest payable		1,348		—		1,348		—		1,348
(Dollars in thousands)	Carrying		Fair Value Measurements Using						Total
December 31, 2015	Amount		Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and cash equivalents	$	105,277	$	105,277	$	—	$	—	$	105,277
Loans not previously presented, net		1,276,853		—		—		1,281,408		1,281,408
FHLB stock		3,818	N/A		N/A		N/A		N/A
Accrued interest receivable		4,832		—		4,832		—		4,832
Financial liabilities:
Deposits		1,248,950		—		1,249,751		—		1,249,751
Customer repurchase agreements		9,317		—		9,317		—		9,317
Federal Home Loan Bank advances		130,000		—		130,000		—		130,000
Junior subordinated debentures		24,687		—		23,153		—		23,153
Accrued interest payable		1,231		—		1,231		—		1,231

NOTE 11 - 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.

The Company is subject to the Basel III regulatory capital framework. Beginning in January 2016, the implementation of the capital conservation buffer was effective for the Company starting at the 0.625% level and increasing 0.625% each year thereafter, until it reaches 2.5% on January 1, 2019. 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.

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, 2016 and December 31, 2015, the Company and TBK Bank meet all capital adequacy requirements to which they are subject, including the capital buffer requirement.

26

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of June 30, 2016 and December 31, 2015, 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, 2016 that management believes have changed TBK Bank’s category.

The actual capital amounts and ratios for the Company and TBK Bank are presented in the following table as of June 30, 2016 and December 31, 2015.  

					To Be Adequately				To Be Well
					Capitalized Under				Capitalized Under
					Prompt Corrective				Prompt Corrective
(Dollars in thousands)	Actual				Action Provisions				Action Provisions
As of June 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	288,194		18.0%	$	127,944		8.0%	N/A		N/A
TBK Bank, SSB	$	215,780		14.0%	$	122,948		8.0%	$	153,685		10.0%
Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	274,253		17.1%	$	95,958		6.0%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	92,211		6.0%	$	122,948		8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	243,086		15.2%	$	71,968		4.5%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	69,158		4.5%	$	99,895		6.5%
Tier 1 capital (to average assets)
Triumph Bancorp, Inc.	$	274,253		16.0%	$	68,494		4.0%	N/A		N/A
TBK Bank, SSB	$	201,915		12.3%	$	65,902		4.0%	$	82,378		5.0%
As of December 31, 2015
Total capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	276,924		19.1%	$	115,929		8.0%	N/A		N/A
TBK Bank, SSB	$	205,978		14.7%	$	111,869		8.0%	$	139,836		10.0%
Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	264,239		18.2%	$	86,968		6.0%	N/A		N/A
TBK Bank, SSB	$	193,293		13.8%	$	83,919		6.0%	$	111,892		8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	235,253		16.2%	$	65,227		4.5%	N/A		N/A
TBK Bank, SSB	$	193,293		13.8%	$	62,939		4.5%	$	90,912		6.5%
Tier 1 capital (to average assets)
Triumph Bancorp, Inc.	$	264,239		16.6%	$	63,824		4.0%	N/A		N/A
TBK Bank, SSB	$	193,293		12.7%	$	61,024		4.0%	$	76,280		5.0%

Dividends paid by bank are limited to, without prior regulatory approval, current year earnings and earnings less dividends paid during the preceding two years.

27

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 12 – STOCKHOLDERS’ EQUITY

The following summarizes the capital structure of Triumph Bancorp, Inc.

	Preferred Stock
	Series A						Series B						Common Stock				Treasury Stock
	June			December			June			December			June		December		June		December
	2016			2015			2016			2015			2016		2015		2016		2015
Number of shares authorized		50,000			50,000			115,000			115,000			50,000,000		50,000,000
Number of shares issued		45,500			45,500			51,956			51,956			18,153,828		18,052,723
Number of shares outstanding		45,500			45,500			51,956			51,956			18,107,493		18,018,200		46,335		34,523
Par value per share	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01	$	0.01
Liquidation preference per share	$	100		$	100		$	100		$	100
Dividend rate	Prime + 2%			Prime + 2%				8.00	%		8.00	%
Dividend rate - floor		8.00	%		8.00	%		8.00	%		8.00	%
Subsequent dividend payment dates	Quarterly			Quarterly			Quarterly			Quarterly
Convertible to common stock	Yes			Yes			Yes			Yes
Conversion period	Anytime			Anytime			Anytime			Anytime
Conversion ratio - preferred to common	6.94008			6.94008			6.94008			6.94008

NOTE 13 – STOCK BASED COMPENSATION

Stock based compensation expense that has been charged against income was $926,000 and $1,279,000 for the three and six months ended June 30, 2016, respectively, and $852,000 and $1,548,000 for the three and six months ended June 30, 2015, 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 aggregate number of shares of common stock available for issuance under the Omnibus Incentive Plan is 1,200,000 shares.

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, 2016 were as follows:

				Weighted-Average
				Grant-Date
Nonvested RSAs	Shares			Fair Value
Nonvested at January 1, 2016		201,270		$	14.24
Granted		101,105			15.87
Vested		(47,727	)		14.60
Forfeited		(6,759	)		15.02
Nonvested at June 30, 2016		247,889		$	14.82

RSAs granted to employees under the Omnibus Incentive Plan typically vest over two to three years. Compensation expense for RSAs granted under the Omnibus Incentive Program 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, 2016, there was $1,730,000 of unrecognized compensation cost related to nonvested RSAs granted under the Omnibus Incentive Plan. The cost is expected to be recognized over a remaining period of 2.67 years.

28

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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, 2016 were as follows:

			Weighted-Average
Stock Options	Shares		Exercise Price
Outstanding at January 1, 2016		—	$	—
Granted		164,175		15.87
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2016		164,175	$	15.87

Stock options outstanding at June 30, 2016 had an intrinsic value of $21,000, a weighted-average remaining contractual term of 9.75 years, were all expected to vest, and were not exercisable. The weighted-average grant date fair value of options granted during the six months ended June 30, 2016 was $5.85 per option.

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 were determined based on historical volatilities of a peer group of companies with a similar size, industry, stage of life cycle, and capital structure. The expected term of the options granted was determined based on the SEC simplified method. The risk-free interest rate for the expected term of the options was 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:

	2016
Risk-free interest rate		1.49	%
Expected Term	6.25 Years
Expected stock price volatility		34.96	%
Dividend yield		—

As of June 30, 2016, there was $836,000 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 3.75 years.

NOTE 14 – 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)	2016		2015		2016		2015
Basic
Net income to common stockholders	$	4,431	$	4,457	$	9,243	$	18,309
Weighted average common shares outstanding		17,859,604		17,711,527		17,838,267		17,711,527
Basic earnings per common share	$	0.25	$	0.25	$	0.52	$	1.03
Diluted
Net income to common stockholders	$	4,431	$	4,457	$	9,243	$	18,309
Dilutive effect of preferred stock		—		—		—		387
Net income to common stockholders - diluted	$	4,431	$	4,457	$	9,243	$	18,696
Weighted average common shares outstanding		17,859,604		17,711,527		17,838,267		17,711,527
Add:  Dilutive effects of restricted stock		112,880		71,022		113,334		41,492
Add:  Dilutive effects of assumed exercises of stock warrants		70,101		31,276		60,330		30,050
Add:  Dilutive effects of assumed conversion of Preferred A		—		—		—		315,773
Add:  Dilutive effects of assumed conversion of Preferred B		—		—		—		360,578
Average shares and dilutive potential common shares		18,042,585		17,813,825		18,011,931		18,459,420
Dilutive earnings per common share	$	0.25	$	0.25	$	0.51	$	1.01

29

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

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,
	2016		2015		2016		2015
Shares assumed to be converted from Preferred Stock Series A		315,773		315,773		315,773		—
Shares assumed to be converted from Preferred Stock Series B		360,578		360,578		360,578		—
Restricted stock awards		76,362		—		76,362		—
Stock options		164,175		—		164,175		—

NOTE 15 – BUSINESS SEGMENT INFORMATION

The following table presents the Company’s operating segments. Transactions between segments consist primarily of borrowed funds. Intersegment interest expense is allocated to the Factoring segment based on the Company’s prime rate. The provision for loan loss is allocated based on the segment’s allowance for loan loss determination which considers the effects of charge-offs. Noninterest income and expense directly attributable to a segment are assigned to it. Taxes are paid on a consolidated basis but not allocated for segment purposes The Factoring segment includes only factoring originated by TBC. General factoring services not originated through TBC are included in the Banking segment.

(Dollars in thousands)						Asset
Three Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	7,939		$	20,109	$	33	$	273		$	28,354
Intersegment interest allocations		(1,099	)		1,099		—		—			—
Total interest expense		—			2,135		—		312			2,447
Net interest income (expense)		6,840			19,073		33		(39	)		25,907
Provision for loan losses		555			1,392		—		(8	)		1,939
Net interest income after provision		6,285			17,681		33		(31	)		23,968
Other noninterest income		496			822		1,614		736			3,668
Noninterest expense		4,962			13,405		1,213		751			20,331
Operating income (loss)	$	1,819		$	5,098	$	434	$	(46	)	$	7,305

(Dollars in thousands)						Asset
Three Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	8,275		$	18,189	$	5	$	128		$	26,597
Intersegment interest allocations		(1,017	)		1,017		—		—			—
Total interest expense		—			1,674		—		278			1,952
Net interest income (expense)		7,258			17,532		5		(150	)		24,645
Provision for loan losses		477			1,971		—		93			2,541
Net interest income after provision		6,781			15,561		5		(243	)		22,104
Other noninterest income		450			2,708		1,352		259			4,769
Noninterest expense		4,450			12,707		809		1,669			19,635
Operating income (loss)	$	2,781		$	5,562	$	548	$	(1,653	)	$	7,238

(Dollars in thousands)						Asset
Six Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,124		$	37,535	$	64	$	524		$	53,247
Intersegment interest allocations		(2,100	)		2,100		—		—			—
Total interest expense		—			4,237		—		614			4,851
Net interest income (expense)		13,024			35,398		64		(90	)		48,396
Provision for loan losses		85			1,267		—		76			1,428
Net interest income after provision		12,939			34,131		64		(166	)		46,968
Other noninterest income		942			2,836		3,285		1,586			8,649
Noninterest expense		9,535			26,987		2,559		1,328			40,409
Operating income (loss)	$	4,346		$	9,980	$	790	$	92		$	15,208

30

TRIUMPH BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)						Asset
Six Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,503		$	32,424	$	65	$	184		$	48,176
Intersegment interest allocations		(1,926	)		1,926		—		—			—
Total interest expense		—			3,246		10		550			3,806
Net interest income		13,577			31,104		55		(366	)		44,370
Provision for loan losses		368			2,725		—		93			3,186
Net interest income after provision		13,209			28,379		55		(459	)		41,184
Bargain purchase gain		—			—		12,509		—			12,509
Other noninterest income		781			5,293		2,309		536			8,919
Noninterest expense		8,762			25,107		3,435		3,114			40,418
Operating income (loss)	$	5,228		$	8,565	$	11,438	$	(3,037	)	$	22,194

(Dollars in thousands)					Asset
June 30, 2016	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	216,649	$	1,708,861	$	15,208	$	311,887	$	(469,210	)	$	1,783,395
Gross loans	$	206,256	$	1,338,314	$	889	$	13,809	$	(148,750	)	$	1,410,518
(Dollars in thousands)					Asset
December 31, 2015	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	198,629	$	1,601,072	$	17,676	$	303,253	$	(429,317	)	$	1,691,313
Gross loans	$	186,457	$	1,223,028	$	945	$	18,455	$	(137,000	)	$	1,291,885

31

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, 2015. 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. Through our wholly owned bank subsidiary, TBK Bank, we offer traditional banking services as well as commercial finance product lines focused on businesses that require specialized financial solutions. Our banking operations include a full suite of lending and deposit products and services focused on our local market areas. These activities generate a stable source of core deposits and a diverse asset base to support our overall operations. Our commercial finance product lines include factoring, asset-based lending, equipment lending, healthcare lending, and premium finance products offered on a nationwide basis. These product offerings supplement the asset generation capacity in our community banking markets and enhance the overall yield of our loan portfolio, enabling us to earn attractive risk-adjusted net interest margins. In addition, through our Triumph Capital Advisors asset management subsidiary, we provide investment management services currently focused on the origination, management, and provision of other services related to collateralized loan obligations. We believe our integrated business model distinguishes us from other banks and non-bank financial services companies in the markets in which we operate. As of June 30, 2016, we had consolidated total assets of $1.783 billion, total loans held for investment of $1.411 billion, total deposits of $1.275 billion and total stockholders’ equity of $279.8 million.

Most of our products and services share basic processes and have similar economic characteristics. However, our factoring subsidiary operates in a highly specialized niche and earns substantially higher yields on its factored accounts receivable portfolio than our other lending products. This business also has a legacy and structure as a standalone company. In addition, through our Triumph Capital Advisors asset management subsidiary, we provide fee-based asset management services distinct from our traditional banking offerings and operations.  As a result, we have determined our reportable segments are Banking, Factoring, Asset Management, and Corporate. For the six months ended June 30, 2016, our Banking segment generated 66% of our total revenue (comprised of interest and noninterest income, excluding bargain purchase gains), our Factoring segment generated 26% of our total revenue, our Asset Management segment generated 5% of our total revenue, and our Corporate segment generated 3% of our total revenue.

Recent Developments

ColoEast Bankshares, Inc.

On August 1, 2016, the Company acquired 100% of the outstanding common stock of ColoEast Bankshares, Inc. (“ColoEast”) and its community banking subsidiary, Colorado East Bank & Trust, in an all-cash transaction for $70 million. Colorado East Bank & Trust, which was merged into TBK Bank upon closing, offers personal checking, savings, CD, money market, HSA, IRA, NOW and business accounts, as well as consumer, commercial and mortgage loans from 18 branches and one loan production office located throughout Colorado and far western Kansas. The acquisition expands the Company’s market into Colorado and further diversifies the Company’s loan, customer, and deposit base.

As of June 30, 2016, ColoEast had approximately $753 million of total assets, $464 million of loans, and $659 million of deposits.  The initial accounting for the ColoEast acquisition has not been completed because the fair value of loans, deposits, and numerous other items has not yet been determined.

32

Financial Highlights

The Company’s key financial highlights as of and for the three and six months ended June 30, 2016, as compared to the prior period, are shown below:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except per share amounts)	2016			2015			2016			2015
Income Statement Data:
Interest income	$	28,354		$	26,597		$	53,247		$	48,176
Interest expense		2,447			1,952			4,851			3,806
Net interest income		25,907			24,645			48,396			44,370
Provision for loan losses		1,939			2,541			1,428			3,186
Net interest income after provision		23,968			22,104			46,968			41,184
Bargain purchase gain		—			—			—			12,509
Other noninterest income		3,668			4,769			8,649			8,919
Noninterest income		3,668			4,769			8,649			21,428
Noninterest expense		20,331			19,635			40,409			40,418
Net income before income taxes		7,305			7,238			15,208			22,194
Income tax expense		2,679			2,586			5,576			3,498
Net income		4,626			4,652			9,632			18,696
Dividends on preferred stock		(195	)		(195	)		(389	)		(387	)
Net income available to common stockholders	$	4,431		$	4,457		$	9,243		$	18,309
Per Share Data:
Basic earnings per common share	$	0.25		$	0.25		$	0.52		$	1.03
Diluted earnings per common share	$	0.25		$	0.25		$	0.51		$	1.01
Weighted average shares outstanding - basic		17,859,604			17,711,527			17,838,267			17,711,527
Weighted average shares outstanding - diluted		18,042,585			17,813,825			18,011,931			18,459,420
Adjusted Per Share Data(1):
Adjusted diluted earnings per common share	N/A			N/A			N/A			$	0.39
Adjusted weighted average shares outstanding - diluted	N/A			N/A			N/A				17,783,069
Performance ratios - Annualized(2):
Return on average assets		1.07	%		1.23	%		1.13	%		2.55	%
Return on average common equity (1)		6.64	%		7.27	%		7.00	%		15.37	%
Return on average tangible common equity (1)		7.37	%		8.28	%		7.80	%		17.54	%
Return on average total equity		6.69	%		7.30	%		7.04	%		15.08	%
Yield on loans		8.50	%		9.49	%		8.18	%		9.02	%
Adjusted yield on loans (1)		7.81	%		8.96	%		7.65	%		8.52	%
Cost of interest bearing deposits		0.72	%		0.65	%		0.73	%		0.65	%
Cost of total deposits		0.63	%		0.56	%		0.64	%		0.56	%
Cost of total funds		0.68	%		0.63	%		0.68	%		0.63	%
Net interest margin (1)		6.53	%		7.20	%		6.22	%		6.67	%
Adjusted net interest margin (1)		5.98	%		6.78	%		5.79	%		6.28	%
Efficiency ratio (1)		68.74	%		66.75	%		70.84	%		72.52	%
Net noninterest expense to average assets (1)		3.85	%		3.95	%		3.73	%		4.06	%

33

	June 30,			December 31,
(Dollars in thousands, except per share amounts)	2016			2015
Balance Sheet Data:
Total assets	$	1,783,395		$	1,691,313
Cash and cash equivalents		61,750			105,277
Investment securities		187,292			163,169
Loans held for sale		—			1,341
Loans held for investment, net		1,396,746			1,279,318
Total liabilities		1,503,632			1,423,275
Noninterest bearing deposits		170,834			168,264
Interest bearing deposits		1,104,320			1,080,686
FHLB advances		180,500			130,000
Junior subordinated debentures		24,823			24,687
Total stockholders’ equity		279,763			268,038
Preferred stockholders' equity		9,746			9,746
Common stockholders' equity (1)		270,017			258,292
Per Share Data:
Book value per share	$	14.91		$	14.34
Tangible book value per share (1)	$	13.47		$	12.79
Shares outstanding end of period		18,107,493			18,018,200
Asset Quality ratios(3):
Past due to total loans		2.80	%		2.41	%
Nonperforming loans  to total loans		1.56	%		1.03	%
Nonperforming assets to total assets		1.60	%		1.10	%
ALLL to nonperforming loans		62.60	%		94.10	%
ALLL to total loans		0.98	%		0.97	%
Net charge-offs to average loans(4)		0.02	%		0.07	%
Capital ratios:
Tier 1 capital to average assets		16.02	%		16.56	%
Tier 1 capital to risk-weighted assets		17.14	%		18.23	%
Common equity Tier 1 capital to risk-weighted assets		15.19	%		16.23	%
Total capital to risk-weighted assets		18.01	%		19.11	%
Total stockholders' equity to total assets		15.69	%		15.85	%
Tangible common stockholders' equity ratio (1)		13.88	%		13.85	%

⁽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:

• “Common stockholders’ equity” is defined as total stockholders’ equity at end of period less the liquidation preference value of the preferred stock.

• “Adjusted diluted earnings per common share” is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding.  Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, including divestitures, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.  Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.  

• “Net interest margin” is defined as net interest income divided by average interest earning assets.

• “Tangible common stockholders’ equity” is common stockholders’ equity less goodwill and other intangible assets.

34

• “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.

• “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.

• “Efficiency ratio” is defined as noninterest expenses divided by our operating revenue, which is equal to net interest income plus noninterest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.

• “Net noninterest expense to average total assets” is defined as noninterest expenses net of noninterest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures.  This metric is used by our management to better assess our operating efficiency.  

• “Adjusted yield on loans” is our yield on loans after excluding loan accretion from our acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on our yield on loans, as the effect of loan discount accretion is expected to decrease as the acquired loans roll off of our balance sheet, absent the impact, if any, of future acquisitions.

• “Adjusted net interest margin” is net interest margin after excluding loan accretion from the acquired loan portfolio.  Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discount accretion is expected to decrease as the acquired loans mature or roll off of our balance sheet, absent the impact, if any, of future acquisitions.

⁽²⁾ Amounts have been annualized.

⁽³⁾ Asset quality ratios exclude loans held for sale.

⁽⁴⁾ Net charge-offs to average loans ratios are for the six months ended June 30, 2016 and the year ended December 31, 2015.

35

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)	2016			2015			2016			2015
Net income available to common stockholders	N/A			N/A			N/A			$	18,309
Less: bargain purchase gain, nontaxable	N/A			N/A			N/A				12,509
Add: merger and acquisition expenses, net of tax	N/A			N/A			N/A				158
Add: incremental bonus related to acquisition, net of tax	N/A			N/A			N/A				1,138
Less: escrow recovery from DHF, net of tax	N/A			N/A			N/A				195
Adjusted net income available to common stockholders	N/A			N/A			N/A			$	6,901
Weighted average shares outstanding - diluted	N/A			N/A			N/A				18,459,420
Less: adjusted effects of assumed preferred stock conversion	N/A			N/A			N/A				676,351
Adjusted weighted average shares outstanding - diluted	N/A			N/A			N/A				17,783,069
Adjusted diluted earnings per common share	N/A			N/A			N/A			$	0.39
Net income available to common stockholders	$	4,431		$	4,457		$	9,243		$	18,309
Average tangible common equity		241,666			215,846			238,420			210,554
Return on average tangible common equity		7.37	%		8.28	%		7.80	%		17.54	%
Efficiency ratio:
Net interest income	$	25,907		$	24,645		$	48,396		$	44,370
Noninterest income		3,668			4,769			8,649			21,428
Operating revenue		29,575			29,414			57,045			65,798
Less: bargain purchase gain, nontaxable		—			—			—			12,509
Less: escrow recovery from DHF, pre-tax		—			—			—			300
Adjusted operating revenue	$	29,575		$	29,414		$	57,045		$	52,989
Total noninterest expense	$	20,331		$	19,635		$	40,409		$	40,418
Less: merger and acquisition expenses, pre-tax		—			—			—			243
Less: incremental bonus related to acquisition, pre-tax		—			—			—			1,750
Adjusted noninterest expense	$	20,331		$	19,635		$	40,409		$	38,425
Efficiency ratio		68.74	%		66.75	%		70.84	%		72.52	%
Net noninterest expense to average assets ratio:
Total noninterest expense	$	20,331		$	19,635		$	40,409		$	40,418
Less: merger and acquisition expenses, pre-tax		—			—			—			243
Less: incremental bonus related to acquisition, pre-tax		—			—			—			1,750
Adjusted noninterest expense	$	20,331		$	19,635		$	40,409		$	38,425
Total noninterest income	$	3,668		$	4,769		$	8,649		$	21,428
Less: bargain purchase gain, nontaxable		—			—			—			12,509
Less: escrow recovery from DHF, pre-tax		—			—			—			300
Adjusted noninterest income		3,668			4,769			8,649			8,619
Adjusted net noninterest expenses	$	16,663		$	14,866		$	31,760		$	29,806
Average Total Assets		1,742,942			1,511,045			1,712,784			1,480,546
Net noninterest expense to average assets ratio		3.85	%		3.95	%		3.73	%		4.06	%
Reported yield on loans		8.50	%		9.49	%		8.18	%		9.02	%
Effect of accretion income on acquired loans		(0.69	%)		(0.53	%)		(0.53	%)		(0.50	%)
Adjusted yield on loans		7.81	%		8.96	%		7.65	%		8.52	%
Reported net interest margin		6.53	%		7.20	%		6.22	%		6.67	%
Effect of accretion income on acquired loans		(0.55	%)		(0.42	%)		(0.43	%)		(0.39	%)
Adjusted net interest margin		5.98	%		6.78	%		5.79	%		6.28	%

36

	June 30,			December 31,
(Dollars in thousands, except per share amounts)	2016			2015
Total stockholders' equity	$	279,763		$	268,038
Less: Preferred stock liquidation preference		9,746			9,746
Total common stockholders' equity		270,017			258,292
Less: Goodwill and other intangibles		26,160			27,854
Tangible common stockholders' equity	$	243,857		$	230,438
Common shares outstanding		18,107,493			18,018,200
Tangible book value per share	$	13.47		$	12.79
Total assets at end of period	$	1,783,395		$	1,691,313
Less: Goodwill and other intangibles		26,160			27,854
Adjusted total assets at period end	$	1,757,235		$	1,663,459
Tangible common stockholders' equity ratio		13.88	%		13.85	%

Results of Operations

Net Income

Three months ended June 30, 2016 compared with three months ended June 30, 2015. We earned net income of $4.6 million for the three months ended June 30, 2016 compared to $4.7 million for the three months ended June 30, 2015, a decrease of $0.1 million. The decrease was primarily the result of a $1.1 million decrease in noninterest income, a $0.7 million increase in noninterest expense, and a $0.1 million increase in income tax expense, offset in part by a $1.3 million increase in net interest income and a $0.6 million reduction in the provision for loan losses.

Six months ended June 30, 2016 compared with six months ended June 30, 2015. We earned net income of $9.6 million for the six months ended June 30, 2016 compared to $18.7 million for the six months ended June 30, 2015, a decrease of $9.1 million.

These results for the six months ended June 30, 2015 were impacted by our acquisition of Doral Money, Inc. (“Doral Money”) which closed in March 2015.  The Doral Money acquisition resulted in a nontaxable bargain purchase gain in the amount of $12.5 million included in noninterest income for the six months ended June 30, 2015, offset by an additional $1.8 million bonus accrual and approximately $0.3 million of transaction costs recorded in connection with the Doral Money acquisition and reported as noninterest expense.  

Excluding the impact of the Doral Money acquisition, we earned net income of $7.3 million for the six months ended June 30, 2015 compared to net income of $9.6 for the six months ended June 30, 2016, an increase of $2.3 million.  The adjusted increase was primarily the result of a $4.0 million increase in net interest income and a $1.8 million reduction in the provision for loan losses, offset in part by a $2.0 million increase in noninterest expense and a $2.1 million increase in income tax expense.

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.”

37

Three months ended June 30, 2016 compared with three months ended June 30, 2015. 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 for the three month periods ended June 30, 2016 and 2015:

	Three Months Ended June 30,
	2016							2015
	Average				Average			Average				Average
(Dollars in thousands)	Balance		Interest		Rate(4)			Balance		Interest		Rate(4)
Interest earning assets:
Cash and cash equivalents	$	120,088	$	197		0.66	%	$	119,969	$	110		0.37	%
Taxable securities		184,010		952		2.08	%		153,073		609		1.60	%
Tax-exempt securities		1,063		6		2.27	%		3,643		16		1.76	%
FHLB and FRB stock		4,748		13		1.10	%		5,288		50		3.79	%
Loans (1)		1,286,159		27,186		8.50	%		1,090,472		25,812		9.49	%
Total interest earning assets		1,596,068		28,354		7.15	%		1,372,445		26,597		7.77	%
Noninterest earning assets:
Cash and cash equivalents		23,619							24,921
Other noninterest earning assets		123,255							113,679
Total assets	$	1,742,942						$	1,511,045
Interest bearing liabilities:
Deposits:
Interest bearing demand	$	242,862	$	59		0.10	%	$	239,033	$	36		0.06	%
Individual retirement accounts		64,075		197		1.24	%		55,778		168		1.21	%
Money market		122,670		69		0.23	%		116,517		66		0.23	%
Savings		78,795		10		0.05	%		74,088		9		0.05	%
Certificates of deposit		565,600		1,560		1.11	%		485,533		1,263		1.04	%
Brokered deposits		49,950		125		1.01	%		50,002		125		1.00	%
Total deposits		1,123,952		2,020		0.72	%		1,020,951		1,667		0.65	%
Junior subordinated debentures		24,788		312		5.06	%		24,513		278		4.55	%
Other borrowings		139,601		115		0.33	%		28,862		7		0.10	%
Total interest bearing liabilities		1,288,341		2,447		0.76	%		1,074,326		1,952		0.73	%
Noninterest bearing liabilities and equity:
Noninterest bearing demand deposits		166,863							170,240
Other liabilities		9,770							10,825
Total equity		277,968							255,654
Total liabilities and equity	$	1,742,942						$	1,511,045
Net interest income			$	25,907						$	24,645
Interest spread (2)						6.39	%						7.04	%
Net interest margin(3)						6.53	%						7.20	%

⁽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.

We earned net interest income of $25.9 million for the three months ended June 30, 2016 compared to $24.6 million for the three months ended June 30, 2015, an increase of $1.3 million, or 5.3%.

This increase in net interest income was driven by increases in average interest earning assets, which increased to $1.596 billion for the three months ended June 30, 2016 from $1.372 billion for the three months ended June 30, 2015, an increase of $224 million, or 16.3%.  This increase was primarily attributable to additional interest income resulting from growth in our loan portfolio.  Our commercial finance product lines, including our factored receivables, asset-based loans, and equipment finance loans all increased on a period over period basis as a result of the continued execution of our growth strategy for such products.  Our outstanding commercial finance balances increased $139.2 million, or 29.8%, from $467.7 million at June 30, 2015 to $606.9 million at June 30, 2016.  We also experienced growth in our mortgage warehouse facilities and community banking lending products period over period, including commercial real estate and general commercial and industrial loans.

38

The change in net interest income for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 was also impacted by interest income associated with certain loan payoff and restructuring activity.  Interest income for the three months ended June 30, 2016 included approximately $1.2 million of loan discount accretion resulting from the payoff of an individual purchased credit impaired loan in excess of its carrying amount.  Interest income for the three months ended June 30, 2015 included approximately $1.7 million of delinquent interest collected upon the resolution, for cash, of a nonperforming commercial loan and approximately $0.6 million of fees received in conjunction with the restructuring of an asset-based healthcare loan.  The combination of this loan payoff and restructuring activity contributed to a net period over period decrease in net interest income of $1.1 million.  

The increases in our net interest income resulting from changes in the interest income generated by our loan portfolio discussed above were offset in part by an increase in our interest expense associated with the growth in customer deposits and other borrowings.  Average total interest bearing deposits increased to $1.124 billion for the three months ended June 30, 2016 from $1.021 billion for the three months ended June 30, 2015, an increase of $103 million, or 10.1%.  This increase was primarily due to growth in our certificates of deposit as these higher cost deposit products were used to fund our growth period over period.  In addition, our use of other interest bearing borrowings, consisting primarily of FHLB advances, was also increased to fund our growth.

Net interest margin decreased to 6.53% for the three months ended June 30, 2016 from 7.20% for the three months ended June 30, 2015, a decrease of 67 basis points.

The decline in our net interest margin primarily resulted from a decrease in yields on our interest earning assets.  Our average yield on earning assets decreased to 7.15% for the three months ended June 30, 2016 from 7.77% for the three months ended June 30, 2015, a decrease of 62 basis points. The decrease was partially due to changes in loan portfolio interest income related to the discount accretion, delinquent interest, and restructuring fees collected on the specific loans discussed above.  In addition, a change in the mix within our loan portfolio period over period contributed to the decrease, as our transportation factoring balances, which generate a higher yield than our non-transportation factoring balances, decreased as a percentage of the overall factoring portfolio to 78% at June 30, 2016 compared to 85% at June 30, 2015 as we continue to expand our non-transportation factoring product lines in 2016.  Finally, excluding the impact of the $1.2 million of discount accretion recorded on the payoff of the purchased credit impaired loan discussed above, we have experienced a diminishing impact of discount accretion on the loan portfolio yield period over period.

A component of the yield on our loan portfolio consists of discount accretion on the Triumph Savings Bank legacy portfolio acquired in connection with our original acquisition of Equity Bank in 2010 and the portfolio acquired in the Triumph Community Bank acquisition in 2013. The aggregate increased yield on our loan portfolio attributable to this discount accretion was 69 basis points for the three months ended June 30, 2016 and 53 basis points for the three months ended June 30, 2015.  Excluding the impact of this discount accretion, the adjusted yield on our loan portfolio was 7.81% and 8.96% for the three months ended June 30, 2016 and 2015, respectively.  Subject to future acquisitions, including our recent acquisition of ColoEast, we anticipate that the contribution of this discount accretion to our interest income will continue to decline over time, but we expect that any resulting decreases in aggregate yield on our loan portfolio will be offset in part by continued growth in our higher yielding specialized commercial finance product lines which include our factored receivables, asset-based loans, equipment finance loans.  As of June 30, 2016, there was approximately $4.2 million of purchase discount remaining that is expected to be accreted over the remaining lives of the acquired Triumph Savings Bank and acquired Triumph Community Bank loan portfolios.

Our adjusted net interest margin, which excludes the impact of the acquired loan discount accretion described above, was 5.98% and 6.78% for the three months ended June 30, 2016 and 2015, respectively.

An increase in our average cost of funds also contributed to the decrease in our net interest margin.  Our average cost of interest bearing liabilities increased to 0.76% for the three months ended June 30, 2016 from 0.73% for the three months ended June 30, 2015, an increase of 3 basis points.  This increase was primarily due to a change in the mix of our interest bearing deposits toward higher rate certificates of deposit as these deposit products were used to fund our growth period over period.  In addition, we increased the use of and extended the maturities of our advances with the FHLB due to the inclusion of mortgage warehouse facilities in our borrowing base with the FHLB, which began in late 2015.

39

The following table shows the effects changes in average balances (volume) and average interest rates (rate) had on the interest earned in our interest earning assets and the interest incurred on our interest bearing liabilities for the three month periods ended June 30, 2016 and 2015:

	Three Months Ended
	June 30, 2016 vs. 2015
	Increase (Decrease) Due to:
(Dollars in thousands)	Rate			Volume			Net Increase
Interest earning assets:
Cash and cash equivalents	$	87		$	—		$	87
Taxable securities		183			160			343
Tax-exempt securities		5			(15	)		(10	)
FHLB and FRB stock		(36	)		(1	)		(37	)
Loans		(2,762	)		4,136			1,374
Total interest income		(2,523	)		4,280			1,757
Interest bearing liabilities:
Interest bearing demand		22			1			23
Individual retirement accounts		3			26			29
Money market		—			3			3
Savings		—			1			1
Certificates of deposit		76			221			297
Brokered deposits		—			—			—
Total deposits		101			252			353
Junior subordinated debentures		31			3			34
Other borrowings		17			91			108
Total interest expense		149			346			495
Change in net interest income	$	(2,672	)	$	3,934		$	1,262

40

Six months ended June 30, 2016 compared with six months ended June 30, 2015. 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 for the six month periods ended June 30, 2016 and 2015:

	Six Months Ended June 30,
	2016							2015
	Average				Average			Average				Average
(Dollars in thousands)	Balance		Interest		Rate(4)			Balance		Interest		Rate(4)
Interest earning assets:
Cash and cash equivalents	$	124,660	$	405		0.65	%	$	137,373	$	251		0.37	%
Taxable securities		177,353		1,710		1.94	%		153,938		1,236		1.62	%
Tax-exempt securities		1,099		13		2.38	%		4,770		28		1.18	%
FHLB and FRB stock		4,508		23		1.03	%		4,915		101		4.14	%
Loans (1)		1,256,362		51,096		8.18	%		1,040,737		46,560		9.02	%
Total interest earning assets		1,563,982		53,247		6.85	%		1,341,733		48,176		7.24	%
Noninterest earning assets:
Cash and cash equivalents		24,503							25,444
Other noninterest earning assets		124,299							113,369
Total assets	$	1,712,784						$	1,480,546
Interest bearing liabilities:
Deposits:
Interest bearing demand	$	231,851	$	116		0.10	%	$	234,766	$	69		0.06	%
Individual retirement accounts		62,993		388		1.24	%		55,575		324		1.18	%
Money market		117,448		134		0.23	%		117,851		133		0.23	%
Savings		77,673		19		0.05	%		73,067		18		0.05	%
Certificates of deposit		563,637		3,106		1.11	%		477,100		2,444		1.03	%
Brokered deposits		49,973		250		1.01	%		50,003		249		1.00	%
Total deposits		1,103,575		4,013		0.73	%		1,008,362		3,237		0.65	%
Junior subordinated debentures		24,751		614		4.99	%		24,481		550		4.53	%
Other borrowings		135,514		224		0.33	%		22,083		19		0.17	%
Total interest bearing liabilities		1,263,840		4,851		0.77	%		1,054,926		3,806		0.73	%
Noninterest bearing liabilities and equity:
Noninterest bearing demand deposits		163,621							165,583
Other liabilities		10,178							10,028
Total equity		275,145							250,009
Total liabilities and equity	$	1,712,784						$	1,480,546
Net interest income			$	48,396						$	44,370
Interest spread (2)						6.08	%						6.51	%
Net interest margin(3)						6.22	%						6.67	%

⁽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.

We earned net interest income of $48.4 million for the six months ended June 30, 2016 compared to $44.4 million for the six months ended June 30, 2015, an increase of $4.0 million, or 9.0%.

This increase in net interest income was driven by increases in average interest earning assets, which increased to $1.564 billion for the six months ended June 30, 2016 from $1.342 billion for the six months ended June 30, 2015, an increase of $222 million, or 16.5%.  This increase was primarily attributable to additional interest income resulting from growth in our loan portfolio.  Our commercial finance product lines, including our factored receivables, asset-based loans, and equipment finance loans all increased on a period over period basis as a result of the continued execution of our growth strategy for such products.  Our outstanding commercial finance balances increased $139.2 million, or 29.8%, from $467.7 million at June 30, 2015 to $606.9 million at June 30, 2016.  We also experienced growth in our mortgage warehouse facilities and community banking lending products period over period, including commercial real estate and general commercial and industrial loans.

41

The change in net interest income for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 was also impacted by interest income associated with certain loan payoff and restructuring activity.  Interest income for the six months ended June 30, 2016 included approximately $1.2 million of loan discount accretion resulting from the payoff of an individual purchased credit impaired loan in excess of its carrying amount.  Interest income for the six months ended June 30, 2015 included approximately $1.7 million of delinquent interest collected upon the resolution, for cash, of a nonperforming commercial loan and approximately $0.6 million of fees received in conjunction with the restructuring of an asset-based healthcare loan.  The combination of this loan payoff and restructuring activity contributed to a net period over period decrease in net interest income of $1.1 million.

The increases in our net interest income resulting from changes in the interest income generated by our loan portfolio discussed above were offset in part by an increase in our interest expense associated with the growth in customer deposits and other borrowings.  Average total interest bearing deposits increased to $1.104 billion for the six months ended June 30, 2016 from $1.008 billion for the six months ended June 30, 2015, an increase of $96 million, or 9.5%.  This increase was primarily due to growth in our certificates of deposit as these higher cost deposit products were used to fund our growth period over period.  In addition, our use of other interest bearing borrowings, consisting primarily of FHLB advances, was also increased to fund our growth.

Net interest margin decreased to 6.22% for the six months ended June 30, 2016 from 6.67% for the six months ended June 30, 2015, a decrease of 45 basis points.

The decline in our net interest margin primarily resulted from a decrease in yields on our interest earning assets.  Our average yield on earning assets decreased to 6.85% for the six months ended June 30, 2016 from 7.24% for the six months ended June 30, 2015, a decrease of 39 basis points. The decrease was partially due to changes in loan portfolio interest income related to the discount accretion, delinquent interest, and restructuring fees collected on the specific loans discussed above.  In addition, a change in the mix within our loan portfolio period over period contributed to the decrease, as our transportation factoring balances, which generate a higher yield than our non-transportation factoring balances, decreased as a percentage of the overall factoring portfolio to 78% at June 30, 2016 compared to 85% at June 30, 2015 as we continue to expand our non-transportation factoring product lines in 2016.  Finally, excluding the impact of the $1.2 million of discount accretion recorded on the payoff of the purchased credit impaired loan discussed above, we have experienced a diminishing impact of discount accretion on the loan portfolio yield period over period.

A component of the yield on our loan portfolio consists of discount accretion on the Triumph Savings Bank legacy portfolio acquired in connection with our original acquisition of Equity Bank in 2010 and the portfolio acquired in the Triumph Community Bank acquisition in 2013. The aggregate increased yield on our loan portfolio attributable to this discount accretion was 53 basis points for the six months ended June 30, 2016 and 50 basis points for the six months ended June 30, 2015.  Excluding the impact of this discount accretion, the adjusted yield on our loan portfolio was 7.65% and 8.52% for the six months ended June 30, 2016 and 2015, respectively.  Subject to future acquisitions, including our recent acquisition of ColoEast, we anticipate that the contribution of this discount accretion to our interest income will continue to decline over time, but we expect that any resulting decreases in aggregate yield on our loan portfolio will be offset in part by continued growth in our higher yielding specialized commercial finance product lines which include our factored receivables, asset-based loans, equipment finance loans.  As of June 30, 2016, there was approximately $4.2 million of purchase discount remaining that is expected to be accreted over the remaining lives of the acquired Triumph Savings Bank and acquired Triumph Community Bank loan portfolios.

Our adjusted net interest margin, which excludes the impact of the acquired loan discount accretion described above, was 5.79% and 6.28% for the six months ended June 30, 2016 and 2015, respectively.

An increase in our average cost of funds also contributed to the decrease in our net interest margin.  Our average cost of interest bearing liabilities increased to 0.73% for the six months ended June 30, 2016 from 0.65% for the six months ended June 30, 2015, an increase of 8 basis points.  This increase was primarily due to a change in the mix of our interest bearing deposits toward higher rate certificates of deposit as these deposit products were used to fund our growth period over period. In addition, we increased the use of and extended the maturities of our advances with the FHLB due to the inclusion of mortgage warehouse facilities in our borrowing base with the FHLB, which began in late 2015.

42

The following table shows the effects changes in average balances (volume) and average interest rates (rate) had on the interest earned in our interest earning assets and the interest incurred on our interest bearing liabilities for the six month periods ended June 30, 2016 and 2014:

	Six Months Ended
	June 30, 2016 vs. 2015
	Increase (Decrease) Due to:
(Dollars in thousands)	Rate			Volume			Net Increase
Interest earning assets:
Cash and cash equivalents	$	195		$	(41	)	$	154
Taxable securities		248			226			474
Tax-exempt securities		28			(43	)		(15	)
FHLB and FRB stock		(76	)		(2	)		(78	)
Loans		(4,233	)		8,769			4,536
Total interest income		(3,838	)		8,909			5,071
Interest bearing liabilities:
Interest bearing demand		48			(1	)		47
Individual retirement accounts		18			46			64
Money market		1			—			1
Savings		—			1			1
Certificates of deposit		185			477			662
Brokered deposits		1			—			1
Total deposits		253			523			776
Junior subordinated debentures		57			7			64
Other borrowings		18			187			205
Total interest expense		328			717			1,045
Change in net interest income	$	(4,166	)	$	8,192		$	4,026

Provision for Loan Losses

The provision for loan losses is the amount of expense that, based on our judgment, is required to maintain the allowance for loan and lease losses at an adequate level to absorb probable losses incurred in the loan portfolio at the balance sheet date and that, in management’s judgment, is appropriate under GAAP. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity.

Under accounting standards for business combinations, acquired loans are recorded at fair value on the date of acquisition. This fair value adjustment eliminates any of the seller’s allowance for loan loss associated with such loans as of such date as any credit exposure associated with such loans is incorporated into the fair value adjustment.  A provision for loan losses is recorded for the emergence of new probable and estimable losses on acquired loans after the acquisition date.

Three months ended June 30, 2016 compared with three months ended June 30, 2015.  Our provision for loan losses was $1.9 million for the three months ended June 30, 2016 compared to $2.5 million for the three months ended June 30, 2015.  We experienced net charge-offs of $0.3 million in the three months ended June 30, 2016 compared to net charge-offs of $0.4 million for the same period in 2015.  The provision for loan losses is primarily driven by the allowance allocation for incurred losses recorded on collectively evaluated loans outstanding for a period.  As outstanding loan balances fluctuate period over period, the associated provision for loan losses typically increases or decreases accordingly.  In addition, the product types associated with fluctuations within the loan portfolio also contribute to the allowance allocation, as different loan products require different levels of ALLL based upon their credit risk characteristics. During the three months ended June 30, 2016 outstanding loans increased $164.7 million from March 31, 2016.  During the three months ended June 30, 2015, outstanding loans increased $141.2 million from March 31, 2015.  The larger increase in outstanding loan balances within the three months ended June 30, 2016 typically would result in a higher provision for loan losses compared to the three months ended June 30, 2015.  However, a larger portion of the increase in the three months ended June 30, 2016 was generated by our non-commercial finance loan portfolio, including our mortgage warehouse and community bank portfolios, which generally require a lower level of ALLL.  In contrast, a larger percentage of the growth generated in the three months ended June 30, 2015 was in our commercial finance loan portfolio, including factored receivables, asset-based lending, and equipment finance loans, which generally require a higher level of ALLL.  

43

The reduced provision in the three months ended June 30, 2016 also reflects our low level of net charge-offs, which impacts the historical loss rates used in the quantitative component of our required ALLL calculations, as more recent periods are more indicative of incurred losses than prior years in which we experienced higher loss rates, resulting in a lower required ALLL as a percentage of outstanding loan balances as of June 30, 2016.

Six months ended June 30, 2016 compared with six months ended June 30, 2015.  Our provision for loan losses was $1.4 million for the six months ended June 30, 2016 compared to $3.2 million for the six months ended June 30, 2015. We experienced net charge-offs of $0.2 million in the six months ended June 30, 2016 compared to net charge-offs of $0.6 million for the same period in 2015. Decreases in the provision for loan losses were partly the result of a lower loan portfolio growth rate period over period in our factored receivables. The provision for loan losses is primarily driven by the allowance allocation for incurred losses recorded on collectively evaluated loans outstanding for a period.  As outstanding loan balances fluctuate period over period, the associated provision for loan losses typically increases or decreases accordingly.  During the six months ended June 30, 2016 outstanding loans increased $118.6 million from December 31, 2015.  During the six months ended June 30, 2015, outstanding loans increased $146.8 million from December 31, 2014.  The lower increase in outstanding balances within the six months ended June 30, 2016 was the primary driver of a lower provision for loan losses compared to the six months ended June 30, 2015.

The reduced provision in the six months ended June 30, 2016 also reflects our low level of net charge-offs, which impacts the historical loss rates used in the quantitative component of our required ALLL calculations, as more recent periods are more indicative of incurred losses than prior years in which we experienced higher loss rates, resulting in a lower required ALLL as a percentage of outstanding loan balances as of June 30, 2016.

Our ALLL was $13.8 million as of June 30, 2016 versus $12.6 million as of December 31, 2015, representing an ALLL to total loans ratio of 0.98% and 0.97% respectively.

Noninterest Income

The following table presents the major categories of noninterest income for the three and six month periods ended June 30, 2016 and 2015:

	Three Months Ended June 30,											Six Months Ended June 30,
(Dollars in thousands)	2016			2015		$ Change			% Change			2016			2015		$ Change			% Change
Service charges on deposits	$	695		$	666	$	29			4.4	%	$	1,354		$	1,278	$	76			5.9	%
Card income		577			578		(1	)		(0.2	%)		1,123			1,101		22			2.0	%
Net OREO gains (losses) and valuation adjustments		(1,204	)		52		(1,256	)		(2415.4	%)		(1,215	)		78		(1,293	)		(1657.7	%)
Net gains on sale of securities		—			242		(242	)		(100.0	%)		5			242		(237	)		(97.9	%)
Net gains on sale of loans		4			491		(487	)		(99.2	%)		16			1,033		(1,017	)		(98.5	%)
Fee income		504			502		2			0.4	%		1,038			924		114			12.3	%
Bargain purchase gain		—			—		—			—			—			12,509		(12,509	)		(100.0	%)
Asset management fees		1,605			1,274		331			26.0	%		3,234			2,232		1,002			44.9	%
Other		1,487			964		523			54.3	%		3,094			2,031		1,063			52.3	%
Total noninterest income	$	3,668		$	4,769	$	(1,101	)		(23.1	%)	$	8,649		$	21,428	$	(12,779	)		(59.6	%)

Three months ended June 30, 2016 compared with three months ended June 30, 2015. We earned noninterest income of $3.7 million for the three months ended June 30, 2016, compared to $4.8 million for the three months ended June 30, 2015, a decrease of $1.1 million. The decrease was primarily due to an increase in OREO valuation adjustments and a decrease in gains on the sale of securities and loans.  These decreases in noninterest income were offset in part by the increase in CLO asset management fees earned by Triumph Capital Advisors and other noninterest income.

• Net OREO Gains (Losses) and Valuation Adjustments.  Net OREO gains (losses) and valuation adjustments represents gains on loans transferred to OREO with a fair value in excess of the foreclosed loans’ carrying value, gains and losses on the sale of OREO, and valuation allowances recorded due to subsequent write-downs of OREO.  The net loss of $1.2 million for the three months ended June 30, 2016 was primarily due to a $1.2 million OREO write-down related to a branch facility previously transferred to OREO that is no longer being actively operated.  The write-down was the result of obtaining an updated appraisal on the property.

• Net Gains on Sale of Securities.  Net gains on sale of securities for the three months ended June 30, 2015 were the result of the sale of approximately $12.6 million of securities for a gain of $0.2 million as part of our ongoing securities portfolio management.  There were no security sales during the three months ended June 30, 2016.

44

• Net Gains on Sale of Loans.  Net gains on sale of loans, comprised primarily of residential mortgage loans sold, decreased 99% due to decreased sales activity period over period.  Proceeds from loan sales decreased from $16.7 million for the three months ended June 30, 2015 to $0.2 million for the three months ended June 30, 2016.  We made the decision to exit the residential mortgage production business in the fourth quarter of 2015.  The decline in residential mortgage loan sale activity experienced during the three months ended June 30, 2016 is indicative of the run off of the business and we reported no residential mortgage loans as held for sale at June 30, 2016. 

• Asset Management Fees.  Asset management fees earned by Triumph Capital Advisors increased 26% from $1.3 million for the three months ended June 30, 2015 to $1.6 million for the three months ended June 30, 2016.  Triumph Capital Advisors closed an additional CLO offering in June 2015 and was named staff and services provider for another CLO offering in June 2016, which increased its asset management fees on a period over period basis. In May 2016, a CLO with approximately $329 million in assets being managed by Triumph Capital Advisors was called, reducing our overall managed CLO assets.  As of June 30, 2016, Triumph Capital Advisors managed $1.490 billion of CLO assets earning approximately 31 basis points on average in asset management fees and provides middle- and back-office services under staff and services agreements for $399 million of CLO assets earning approximately 26 basis points on average in fees.

• Other.  Other income increased from $1.0 million for the three months ended June 30, 2015 to $1.5 million for the three months ended June 30, 2016.  Other income includes income for check cashing and wire transfer fees, income associated with trust activities, bank-owned life insurance, Triumph Insurance Group commissions, and income earned from our CLO warehouse equity investments.  Income from our CLO warehouse equity investments increased $0.6 million, from $0.2 million for the three months ended June 30, 2015 to $0.8 million for the three months ended June 30, 2016 due to our increased investments in the CLO warehouse entities.  There were no significant increases or decreases in the remaining components of other income period over period.

Six months ended June 30, 2016 compared with six months ended June 30, 2015. We earned noninterest income of $8.6 million for the six months ended June 30, 2016, compared to $21.4 million for the six months ended June 30, 2015, a decrease of $12.8 million. This activity was significantly impacted by the realization of a pre-tax bargain purchase gain in the amount of $12.5 million associated with the acquisition of Doral Money in March 2015.  

Excluding the bargain purchase gain, we earned noninterest income of $8.9 million for the six months ended June 30, 2015 compared to $8.6 million for the six months ended June 30, 2016, a decrease of $0.3 million, or only 3%.  The decrease was primarily due to an increase in OREO valuation adjustments and a decrease in gains on the sale of securities and loans.  These decreases in noninterest income were offset in part by the increase in CLO asset management fees earned by Triumph Capital Advisors and other noninterest income.

• Net OREO Gains (Losses) and Valuation Adjustments.  Net OREO gains (losses) and valuation adjustments represents gains on loans transferred to OREO with a fair value in excess of the foreclosed loans’ carrying value, gains and losses on the sale of OREO, and valuation allowances recorded due to subsequent write-downs of OREO.  The net loss of $1.2 million for the six months ended June 30, 2016 was primarily due to a $1.2 million OREO write-down related to a branch facility previously transferred to OREO that is no longer being actively operated.  The write-down was the result of obtaining an updated appraisal on the property.

• Net Gains on Sale of Securities.  Net gains on sale of securities for the six months ended June 30, 2015 were the result of the sale of approximately $12.6 million of securities for a gain of $0.2 million as part of our ongoing securities portfolio management.  We sold approximately $4.3 million of securities for a minimal net gain during the six months ended June 30, 2016.

• Net Gains on Sale of Loans.  Net gains on sale of loans, comprised primarily of residential mortgage loans sold, decreased 99% due to decreased sales activity period over period.  Proceeds from loan sales decreased from $36.4 million for the six months ended June 30, 2015 to $2.2 million for the six months ended June 30, 2016.  We made the decision to exit the residential mortgage production business in the fourth quarter of 2015.  The decline in residential mortgage loan sale activity experienced during the six months ended June 30, 2016 is indicative of the run off of the business and we reported no residential mortgage loans as held for sale at June 30, 2016.

45

• Asset Management Fees.  Asset management fees earned by Triumph Capital Advisors increased 45% from $2.2 million for the six months ended June 30, 2015 to $3.2 million for the six months ended June 30, 2016.  Triumph Capital Advisors closed an additional CLO offering in June 2015, assumed two CLO asset management agreements in March 2015 as a result of the Doral Money acquisition, and was named staff and services provider for another CLO offering in June 2016, which increased its asset management fees on a period over period basis. In May 2016, a CLO with approximately $329 million in assets being managed by Triumph Capital Advisors was called, reducing our overall managed CLO assets.  As of June 30, 2016, Triumph Capital Advisors managed $1.490 billion of CLO assets earning approximately 31 basis points on average in asset management fees and provides middle- and back-office services under staff and services agreements for $399 million of CLO assets earning approximately 26 basis points on average in fees.  

• Other.  Other income increased from $2.0 million for the six months ended June 30, 2015 to $3.1 million for the six months ended June 30, 2016.  Other income includes income for check cashing and wire transfer fees, income associated with trust activities, bank-owned life insurance, Triumph Insurance Group commissions, and income earned from our CLO warehouse equity investments.  Income from our CLO warehouse equity investments increased $1.4 million, from $0.4 million for the six months ended June 30, 2015 to $1.8 million for the six months ended June 30, 2016 due to our increased investments in the CLO warehouse entities.  There were no significant increases or decreases in the remaining components of other income period over period.

Noninterest Expense

The following table presents the major categories of noninterest expense for the three and six month periods ended June 30, 2016 and 2015:

	Three Months Ended June 30,										Six Months Ended June 30,
(Dollars in thousands)	2016		2015		$ Change			% Change			2016		2015		$ Change			% Change
Salaries and employee benefits	$	12,229	$	12,042	$	187			1.6	%	$	24,481	$	25,311	$	(830	)		(3.3	%)
Occupancy, furniture and equipment		1,534		1,555		(21	)		(1.4	%)		3,027		3,127		(100	)		(3.2	%)
FDIC insurance and other regulatory assessments		281		271		10			3.7	%		505		534		(29	)		(5.4	%)
Professional fees		1,101		852		249			29.2	%		2,174		2,179		(5	)		(0.2	%)
Amortization of intangible assets		717		895		(178	)		(19.9	%)		1,694		1,659		35			2.1	%
Advertising and promotion		628		526		102			19.4	%		1,147		1,069		78			7.3	%
Communications and technology		1,263		927		336			36.2	%		2,695		1,813		882			48.6	%
Other		2,578		2,567		11			0.4	%		4,686		4,726		(40	)		(0.8	%)
Total noninterest expense	$	20,331	$	19,635	$	696			3.5	%	$	40,409	$	40,418	$	(9	)		0.0	%

Three months ended June 30, 2016 compared with three months ended June 30, 2015. Noninterest expense totaled $20.3 million for the three months ended June 30, 2016 compared to $19.6 million for the three months ended June 30, 2015, an increase of $0.7 million. The changes in the more significant noninterest expense items are discussed below.

• Salaries and Employee Benefits. Salaries and employee benefits expenses have historically been our largest category of noninterest expense. Salaries and employee benefits expenses were $12.2 million for the three months ended June 30, 2016 compared to $12.0 million for the three months ended June 30, 2015, an increase of $0.2 million. This increase is attributable to several factors.  We experienced a slight increase in the total size of our workforce between these periods as our full-time equivalent employees totaled 505.5 and 497.0 at June 30, 2016 and 2015, respectively. Sources of this increased headcount were primarily employees hired to support growth in our commercial finance product lines and other strategic initiatives. Other factors contributing to this increase include merit increases for existing employees, higher health insurance benefit costs, incentive compensation, and 401(k) expense.

• Professional Fees. Professional fees are primarily comprised of external audit, tax, consulting, and legal fees and were $1.1 million for the three months ended June 30, 2016 compared to $0.9 million for the three months ended June 30, 2015, an increase of $0.2 million. This increase is attributable to expenses associated with various ongoing external audit, legal, and consulting activities. There were no significant increases or decreases in the components of professional fees period over period.

46

• Amortization of Intangibles. Amortization of intangible assets was $0.7 million for the three months ended June 30, 2016 compared to $0.9 million for the three months ended June 30, 2015, a decrease of $0.2 million.  The decrease is primarily due to the reduction in the amortization of intangible assets recorded in conjunction with our acquisition of Doral Money.  During the third quarter of 2015, we adjusted the estimated remaining life of one of the acquired Doral Money CLO contracts based upon an anticipated CLO call date, and the intangible became fully amortized in the first quarter of 2016.  The remaining lives of CLO management contracts and the related intangible asset amortization periods depend upon several factors, most notably commercial loan market conditions which impact the distributions to be made to the CLO equity holders upon liquidation of the CLO.  These factors are out of our control and can change on a quarter-over-quarter basis.  As of June 30, 2016, we had total intangible assets with a recorded net carrying amount of $10.2 million, with remaining amortization of $1.4 million scheduled in the remainder of fiscal year 2016, $2.5 million of amortization scheduled in fiscal year 2017, and the remaining $6.3 million of amortization scheduled thereafter. 

• Communications and Technology. Communications and technology expenses were $1.3 million for the three months ended June 30, 2016, compared to $0.9 million for the three months ended June 30, 2015, an increase of $0.4 million. This increase is primarily attributed to the communications and technology expense associated with the recent investments we have made in our communications and technology infrastructure to further our movement toward a single operating platform, which positions us for future acquisitions and greater operating efficiencies.

• Other. Increases experienced in other noninterest expense items in the three months ended June 30, 2016 versus the three months ended June 30, 2015 are generally attributable to the impact of continued growth of our business and workforce and include increases in loan-related expenses, training and recruiting, postage, insurance, business travel, and subscription expenses.

Six months ended June 30, 2016 compared with six months ended June 30, 2015. Noninterest expense totaled $40.4 million for the six months ended June 30, 2016 which was consistent with the $40.4 million of noninterest expense for the six months ended June 30, 2015.  The change in noninterest expense was impacted by the accrual of an incremental $1.8 million bonus expense during the six months ended June 30, 2015 for the anticipated amount expected to be paid to team members to recognize their contribution to the Doral Money acquisition and approximately $0.3 million of transactions costs associated with the acquisition.

Excluding the Doral Money bonus accrual and transaction costs, noninterest expense totaled $38.4 million for the six months ended June 30, 2015 compared to $40.4 million for the six months ended June 30, 2016, an increase of $2.0 million.  This increase is primarily attributable to continuing investments made in personnel and infrastructure to support growth in organically generated product lines and other strategic initiatives.  The changes in the more significant noninterest expense items are discussed below.

• Salaries and Employee Benefits. Salaries and employee benefits expenses have historically been our largest category of noninterest expense. Salaries and employee benefits expenses were $24.5 million for the six months ended June 30, 2016 compared to $25.3 million for the six months ended June 30, 2015, a decrease of $0.8 million. This decrease was impacted by the accrual of an incremental $1.8 million bonus expense during the six months ended June 30, 2015 for the anticipated amount expected to be paid to team members to recognize their contribution to the Doral Money acquisition.  Offsetting this decrease, we experienced a slight increase in the total size of our workforce between these periods as our full-time equivalent employees totaled 505.5 and 497.0 at June 30, 2016 and 2015, respectively.  Sources of this increased headcount were primarily employees hired to support growth in our commercial finance product lines and other strategic initiatives. Other factors contributing to the offsetting increase in salaries and employee benefits include merit increases for existing employees, higher health insurance benefit costs, incentive compensation, and 401(k) expense.

• Communications and Technology. Communications and technology expenses were $2.7 million for the six months ended June 30, 2016, compared to $1.8 million for the six months ended June 30, 2015, an increase of $0.9 million. This increase is primarily attributed to the communications and technology expense associated with the recent investments we have made in our communications and technology infrastructure to further our movement toward a single operating platform, which positions us for future acquisitions and greater operating efficiencies.

• Other. Increases experienced in other noninterest expense items in the six months ended June 30, 2016 versus the six months ended June 30, 2015 are generally attributable to the impact of continued growth of our business and workforce and include increases in loan-related expenses, training and recruiting, postage, insurance, business travel, and subscription expenses.

47

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.

Three months ended June 30, 2016 compared with three months ended June 30, 2015.  Income tax expense for the three months ended June 30, 2016 was $2.7 million compared to $2.6 million for the three months ended June 30, 2015. The effective tax rate for the three months ended June 30, 2016 was 37% compared to 36% for the three months ended June 30, 2015.  

Six months ended June 30, 2016 compared with six months ended June 30, 2015.  Income tax expense was $5.6 million for the six months ended June 30, 2016 compared to $3.5 million for the six months ended June 30, 2015. The effective tax rate for the six months ended June 30, 2016 was 37% compared to 16% for the six months ended June 30, 2015.  The lower effective tax rate for the six months ended June 30, 2015 reflects the significant increase in nontaxable income attributed to the $12.5 million bargain purchase gain associated with the Doral Money acquisition. Excluding the impact of the bargain purchase gain, our effective tax rate for the six months ended June 30, 2015 was 36%.

Operating Segment Results

Our reportable segments are Factoring, Banking, Asset Management, and Corporate 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 Factoring segment includes the operations of Triumph Business Capital with revenue derived from factoring services. The Banking segment includes the operations of TBK Bank, including loans originated under our Triumph Commercial Finance, Triumph Healthcare Finance, and Triumph Premium Finance brands. Our Banking segment derives its revenue principally from investments in interest earning assets as well as noninterest income typical for the banking industry. The Banking segment also includes certain factored receivables which are purchased by TBK Bank under its Triumph Commercial Finance brand as opposed to at Triumph Business Capital.  The Asset Management segment includes the operations of Triumph Capital Advisors with revenue derived from fees for managing or providing other services related to collateralized loan obligation funds. Corporate includes holding company financing and investment activities and management and administrative expenses to support the overall operations of the Company.

Reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in future changes to previously reported segment financial data. Transactions between segments consist primarily of borrowed funds.  Intersegment interest expense is allocated to the Factoring segment based on the Company’s prime rate. The provision for loan loss is allocated based on the segment’s ALLL determination which considers the effects of charge-offs. Noninterest income and expense directly attributable to a segment are assigned to it. Taxes are paid on a consolidated basis and are not allocated for segment purposes.  Certain factored receivables not originated through Triumph Business Capital are included in the Banking segment.

Three months ended June 30, 2016 compared with three months ended June 30, 2015. The following tables present our primary operating results for our operating segments as of and for the three month periods ended June 30, 2016 and 2015, respectively.

(Dollars in thousands)						Asset
Three Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	7,939		$	20,109	$	33	$	273		$	28,354
Intersegment interest allocations		(1,099	)		1,099		—		—			—
Total interest expense		—			2,135		—		312			2,447
Net interest income (expense)		6,840			19,073		33		(39	)		25,907
Provision for loan losses		555			1,392		—		(8	)		1,939
Net interest income after provision		6,285			17,681		33		(31	)		23,968
Other noninterest income		496			822		1,614		736			3,668
Noninterest expense		4,962			13,405		1,213		751			20,331
Operating income (loss)	$	1,819		$	5,098	$	434	$	(46	)	$	7,305

48

(Dollars in thousands)						Asset
Three Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	8,275		$	18,189	$	5	$	128		$	26,597
Intersegment interest allocations		(1,017	)		1,017		—		—			—
Total interest expense		—			1,674		—		278			1,952
Net interest income (expense)		7,258			17,532		5		(150	)		24,645
Provision for loan losses		477			1,971		—		93			2,541
Net interest income after provision		6,781			15,561		5		(243	)		22,104
Other noninterest income		450			2,708		1,352		259			4,769
Noninterest expense		4,450			12,707		809		1,669			19,635
Operating income (loss)	$	2,781		$	5,562	$	548	$	(1,653	)	$	7,238

(Dollars in thousands)					Asset
June 30, 2016	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	216,649	$	1,708,861	$	15,208	$	311,887	$	(469,210	)	$	1,783,395
Gross loans	$	206,256	$	1,338,314	$	889	$	13,809	$	(148,750	)	$	1,410,518
(Dollars in thousands)					Asset
December 31, 2015	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	198,629	$	1,601,072	$	17,676	$	303,253	$	(429,317	)	$	1,691,313
Gross loans	$	186,457	$	1,223,028	$	945	$	18,455	$	(137,000	)	$	1,291,885

Factoring

Our Factoring segment’s operating income for the three months ended June 30, 2016 was $1.8 million, compared with $2.8 million for the three months ended June 30, 2015, a decrease of $1.0 million. This decrease was primarily due to reductions in net interest income and increases in noninterest expenses.  

Factored receivables in our Factoring segment grew 17% from $176.1 million as of June 30, 2015 to $206.3 million as of June 30, 2016. Our average number of clients increased from 1,796 for the three months ended June 30, 2015 to 2,191 for the three months ended June 30, 2016 and the corresponding factored accounts receivable purchases increased from $416.8 million during the three months ended June 30, 2015 to $434.2 million during the three months ended June 30, 2016.  Our average invoice size decreased 17% from $1,509 for the three months ended June 30, 2015 to $1,295 for the three months ended June 30, 2016, however, the number of invoices purchased increased 25% period over period.

Net interest income was $6.8 million for the three months ended June 30, 2016 compared to $7.3 million for the three months ended June 30, 2015, a decrease of $0.5 million. The decrease in net interest income is partly due to pricing pressure on factored receivable balances in the current period due to increased competition and market conditions, resulting in slightly lower yields on net funds employed at our Factoring segment.  In addition, a change in the mix within our factored receivables portfolio period over period contributed to the decrease, as our transportation factoring balances, which generate a higher yield than our non-transportation factoring balances, decreased as a percentage of the overall Factoring segment portfolio to 89% at June 30, 2016 compared to 97% at June 30, 2015 as we continue to expand our non-transportation factoring product lines in 2016.  These decreases were offset slightly by a 3% increase in overall average net funds employed from $158.3 million for the three months ended June 30, 2015 to $163.6 million for the three months ended June 30, 2016.

Our provision for loan losses was $0.6 million for the three months ended June 30, 2016 compared with $0.5 million for the three months ended June 30, 2015. The provision for loan losses on factored receivables is primarily driven by the allowance allocation for incurred losses recorded on collectively evaluated factored receivables purchased and outstanding for a period.  As factored receivables purchased fluctuate period over period, the associated provision for loan losses typically increases or decreases accordingly.  In addition, loan loss valuation allowances are recorded on specific at-risk balances, typically consisting of invoices greater than 90 days past due with negative cash reserves.  The higher provision in the three months ended June 30, 2016 compared to the three months ended June 30, 2015 was primarily due to higher net purchases recorded during the three months ended June 30, 2016.  During the three months ended June 30, 2016 factored receivables increased approximately $41 million from March 31, 2016.  During the three months ended June 30, 2015, factored receivables increased approximately $20 million from March 31, 2015.  The higher increase in factored receivable balances within the three month period ended June 30, 2016 resulted in a higher provision for loan losses compared to the three months ended June 30, 2015.

49

Noninterest income was $0.5 million for the three months ended June 30, 2016 compared to $0.5 million for the three months ended June 30, 2015.  The slight increase in noninterest income is consistent with the increase in factored receivable purchase volume period over period.

Noninterest expense was $5.0 million for the three months ended June 30, 2016 compared with $4.5 million for the three months ended June 30, 2015, driven primarily by increased personnel and operating costs incurred in connection with growth in our factoring portfolio, particularly the increase in the number of clients and number of invoices processed period over period.

Banking

Our Banking segment’s operating income totaled $5.1 million for the three months ended June 30, 2016 compared to operating income of $5.6 million for the three months ended June 30, 2015. We experienced a decrease in noninterest income and an increase in noninterest expense for the three months ended June 30, 2016.  These decreases in operating income were partially offset by increases in net interest income and a reduction in the provision for loan losses period over period.  

The increase in net interest income was primarily the result of increases in the balances of our interest earning assets, primarily loans, due to the continued growth of our commercial finance products, including equipment loans, general asset-based loans, and healthcare asset-based loans.  Outstanding loans in our Banking segment grew 40% from $958 million as of June 30, 2015 to $1.338 billion as of June 30, 2016.

Our provision for loan losses was $1.4 million for the three months ended June 30, 2016 compared with $2.0 million for the three months ended June 30, 2015.  As outstanding loan balances fluctuate period over period, the associated provision for loan losses typically increases or decreases accordingly.  In addition, the product types associated with fluctuations within the loan portfolio also contribute to the allowance allocation, as different loan products require different levels of ALLL based upon their credit risk characteristics. During the three months ended June 30, 2016 outstanding loans at our Banking segment increased $161.2 million from March 31, 2016.  During the three months ended June 30, 2015, outstanding loans at our Banking segment increased $102.5 million from March 31, 2015.  The larger increase in outstanding loan balances within the three months ended June 30, 2016 typically would result in a higher provision for loan losses compared to the three months ended June 30, 2015.  However, a larger portion of the increase in the three months ended June 30, 2016 was generated by our non-commercial finance loan portfolio, including our mortgage warehouse and community bank portfolios, which generally require a lower level of ALLL.  In contrast, a larger percentage of the growth generated in the three months ended June 30, 2015 was in our commercial finance loan portfolio, including asset-based lending and equipment finance loans, which generally require a higher level of ALLL.  

The reduced provision in the three months ended June 30, 2016 also reflects our low level of net charge-offs, which impacts the historical loss rates used in the quantitative component of our required ALLL calculations, as more recent periods are more indicative of incurred losses than prior years in which we experienced higher loss rates, resulting in a lower required ALLL as a percentage of outstanding loan balances as of June 30, 2016.

Noninterest income was $0.8 million for the three months ended June 30, 2016 compared to $2.7 million for the three months ended June 30, 2015. This decrease was primarily due to a $1.2 million OREO write-down during the three months ended June 30, 2016 related to a branch facility previously transferred to OREO that is no longer being actively operated as a depository branch.  The write-down was the result of obtaining an updated appraisal on the property.  In addition, net gains on sale of loans, comprised primarily of residential mortgage loans sold, decreased 99% due to decreased sales activity period over period.  Proceeds from loan sales decreased from $16.7 million for the three months ended June 30, 2015 to $0.2 million for the three months ended June 30, 2016.  We made the decision to exit the residential mortgage production business in the fourth quarter of 2015.  The decline in residential mortgage loan sale activity experienced during the three months ended June 30, 2016 is indicative of the run off of the business.  Finally, there were no security sales during the three months ended June 30, 2016, however, net gains on sale of securities for the three months ended June 30, 2015 were the result of the sale of approximately $12.6 million of securities for a gain of $0.2 million as part of our ongoing securities portfolio management.

Noninterest expense was $13.4 million  for the three months ended June 30, 2016, compared with $12.7 million for the three months ended June 30, 2015, an increase of $0.7 million driven by increased operating expenses in personnel, facilities and infrastructure to support the continued growth in our asset-based lending and equipment lending, including communications and technology expense associated with the recent investments we have made in our communications and technology infrastructure to further our movement toward a single operating platform, which positions us for future acquisitions and greater operating efficiencies.  In addition, increases due to merit increases for existing employees, higher health insurance benefit costs, incentive compensation, and 401(k) expense contributed to the increase.  Finally, the increase in noninterest expense is partially related to the reassignment of certain personnel to the Banking segment in connection with the merger of our subsidiary banks in October 2015.

50

Asset Management

Our Asset Management segment’s operating income totaled $0.4 million for the three months ended June 30, 2016 compared to $0.5 million for the three months ended June 30, 2015.  This decrease was primarily due to an increase in noninterest expenses of $0.4 million from $0.8 million for the three months ended June 30, 2015 to $1.2 million for the three months ended June 30, 2016.  The increased noninterest expenses were primarily related to increases in personnel costs to support the growth in this segment.  This decrease in operating income was offset in part by an increase in noninterest income during the three months ended June 30, 2016.  Triumph Capital Advisors closed an additional CLO offering in June 2015 and was named staff and services provider for another CLO offering in June 2016, which increased its asset management fees on a period over period basis. In May 2016, a CLO with approximately $329 million in assets being managed by Triumph Capital Advisors was called, reducing our overall managed CLO assets.  As of June 30, 2016, Triumph Capital Advisors managed $1.490 billion of CLO assets earning approximately 31 basis points on average in asset management fees and provides middle- and back-office services under staff and services agreements for $399 million of CLO assets earning approximately 26 basis points on average in fees.

Corporate

The Corporate segment’s operating loss totaled approximately $0.1 million for the three months ended June 30, 2016, compared with an operating loss of $1.7 million for the three months ended June 30, 2015.  The increase in interest income at the holding company is primarily due to the investment in shared national credits purchased by the holding company during 2015.  These shared national credits had a remaining balance of $13.8 million as of June 30, 2016.  Also included in the Corporate segment’s increased operating income is an increase of $0.5 million in noninterest income and a decrease of $0.9 million in operating expenses for the three months ended June 30, 2016.  The increase in noninterest income is primarily due to earnings associated with the Corporate segment’s additional equity investments in CLO warehouse entities.  The decrease in operating expenses is primarily related to the reassignment of certain personnel to the Banking segment in connection with the merger of our subsidiary banks in October 2015.

Six months ended June 30, 2016 compared with six months ended June 30, 2015. The following tables present our primary operating results for our operating segments as of and for the six month periods ended June 30, 2016 and 2015, respectively.

(Dollars in thousands)						Asset
Six Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,124		$	37,535	$	64	$	524		$	53,247
Intersegment interest allocations		(2,100	)		2,100		—		—			—
Total interest expense		—			4,237		—		614			4,851
Net interest income (expense)		13,024			35,398		64		(90	)		48,396
Provision for loan losses		85			1,267		—		76			1,428
Net interest income after provision		12,939			34,131		64		(166	)		46,968
Other noninterest income		942			2,836		3,285		1,586			8,649
Noninterest expense		9,535			26,987		2,559		1,328			40,409
Operating income (loss)	$	4,346		$	9,980	$	790	$	92		$	15,208

(Dollars in thousands)						Asset
Six Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,503		$	32,424	$	65	$	184		$	48,176
Intersegment interest allocations		(1,926	)		1,926		—		—			—
Total interest expense		—			3,246		10		550			3,806
Net interest income		13,577			31,104		55		(366	)		44,370
Provision for loan losses		368			2,725		—		93			3,186
Net interest income after provision		13,209			28,379		55		(459	)		41,184
Bargain purchase gain		—			—		12,509		—			12,509
Other noninterest income		781			5,293		2,309		536			8,919
Noninterest expense		8,762			25,107		3,435		3,114			40,418
Operating income (loss)	$	5,228		$	8,565	$	11,438	$	(3,037	)	$	22,194

51

(Dollars in thousands)					Asset
June 30, 2016	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	216,649	$	1,708,861	$	15,208	$	311,887	$	(469,210	)	$	1,783,395
Gross loans	$	206,256	$	1,338,314	$	889	$	13,809	$	(148,750	)	$	1,410,518
(Dollars in thousands)					Asset
December 31, 2015	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	198,629	$	1,601,072	$	17,676	$	303,253	$	(429,317	)	$	1,691,313
Gross loans	$	186,457	$	1,223,028	$	945	$	18,455	$	(137,000	)	$	1,291,885

Factoring

Our Factoring segment’s operating income for the six months ended June 30, 2016 was $4.3 million, compared with $5.2 million for the six months ended June 30, 2015, a decrease of $0.9 million. This decrease was primarily due to reductions in net interest income and increases in noninterest expenses.

Factored receivables in our Factoring segment grew 17% from $176.1 million as of June 30, 2015 to $206.3 million as of June 30, 2016. Our average number of clients increased from 1,707 for the six months ended June 30, 2015 to 2,161 for the six months ended June 30, 2016 and the corresponding factored accounts receivable purchases increased from $782.1 million during the six months ended June 30, 2015 to $815.8 million during the six months ended June 30, 2016.  Our average invoice size decreased 16% from $1,524 for the six months ended June 30, 2015 to $1,277 for the six months ended June 30, 2016, however, the number of invoices purchased increased 24% period over period.

Net interest income was $13.0 million for the six months ended June 30, 2016 compared to $13.6 million for the six months ended June 30, 2015, a decrease of $0.6 million. The decrease in net interest income is partly due to pricing pressure on factored receivable balances in the current period due to increased competition and market conditions, resulting in slightly lower yields on net funds employed at our Factoring segment.  In addition, a change in the mix within our factored receivables portfolio period over period contributed to the decrease, as our transportation factoring balances, which generate a higher yield than our non-transportation factoring balances, decreased as a percentage of the overall Factoring segment portfolio to 89% at June 30, 2016 compared to 97% at June 30, 2015 as we continue to expand our non-transportation factoring product lines in 2016.  These decreases were offset slightly by a 3% increase in overall average net funds employed from $148.5 million for the six months ended June 30, 2015 to $155.0 million for the six months ended June 30, 2016.

Our provision for loan losses was $0.1 million for the six months ended June 30, 2016 compared with $0.4 million for the six months ended June 30, 2015. The provision for loan losses on factored receivables is primarily driven by the allowance allocation for incurred losses recorded on collectively evaluated factored receivables purchased and outstanding for a period.  As factored receivables purchased fluctuate period over period, the associated provision for loan losses typically increases or decreases accordingly.  In addition, loan loss valuation allowances are recorded on specific at-risk balances, typically consisting of invoices greater than 90 days past due with negative cash reserves.  The lower provision in the six months ended June 30, 2016 compared to the six months ended June 30, 2015 was primarily due to reductions in specific reserves required on at-risk balances recorded during the six months ended June 30, 2016 compared to increases in such specific reserves during the six months ended June 30, 2015.  These decreases were offset in part by higher net purchases recorded during the six months ended June 30, 2016.  During the six months ended June 30, 2016 factored receivables increased approximately $20 million from December 31, 2015.  During the six months ended June 30, 2015, factored receivables increased approximately $6 million from December 31, 2014.  The higher increase in factored receivable balances within the six month period ended June 30, 2016 contributes to a higher provision for loan losses compared to the six months ended June 30, 2015.

Noninterest income was $0.9 million for the six months ended June 30, 2016 compared to $0.8 million for the six months ended June 30, 2015.  The slight increase in noninterest income is consistent with the increase in factored receivable purchase volume period over period.

Noninterest expense was $9.5 million for the six months ended June 30, 2016 compared with $8.8 million for the six months ended June 30, 2015, driven primarily by increased personnel and operating costs incurred in connection with growth in our factoring portfolio, particularly the increase in the number of clients and  number of invoices processed period over period.

52

Banking

Our Banking segment’s operating income totaled $10.0 million for the six months ended June 30, 2016 compared to operating income of $8.6 million for the six months ended June 30, 2015, an increase of $1.4 million. We experienced an increase in net interest income and a decrease in the provision for loan losses for the six months ended June 30, 2016.  These increases in operating income were partially offset by decreases in noninterest income and an increase in noninterest expense period over period.

The increase in net interest income was primarily the result of increases in the balances of our interest earning assets, primarily loans, due to the continued growth of our commercial finance products, including equipment loans, general asset-based loans, and healthcare asset-based loans.  Outstanding loans in our Banking segment grew 40% from $958 million as of June 30, 2015 to $1.338 billion as of June 30, 2016.

Our provision for loan losses was $1.3 million for the six months ended June 30, 2016 compared with $2.7 million for the six months ended June 30, 2015.  As outstanding loan balances fluctuate period over period, the associated provision for loan losses typically increases or decreases accordingly.  In addition, the product types associated with fluctuations within the loan portfolio also contribute to the allowance allocation, as different loan products require different levels of ALLL based upon their credit risk characteristics.  During the six months ended June 30, 2016 outstanding loans in our Banking segment increased $115.3 million from December 31, 2015.  During the six months ended June 30, 2015, outstanding loans in our Banking segment increased $122.4 million from December 31, 2014.  The lower increase in outstanding balances within the six months ended June 30, 2016 contributes to a lower provision for loan losses compared to the six months ended June 30, 2015. In addition, much of the increase in the six months ended June 30, 2016 was generated by our non-commercial finance loan portfolio, including our mortgage warehouse and community bank portfolios, which generally require a lower level of ALLL.  In contrast, a larger percentage of the growth generated in the six months ended June 30, 2015 was in our commercial finance loan portfolio, including asset-based lending and equipment finance loans, which generally require a higher level of ALLL.  

The reduced provision in the six months ended June 30, 2016 also reflects our low level of net charge-offs, which impacts the historical loss rates used in the quantitative component of our required ALLL calculations, as more recent periods are more indicative of incurred losses than prior years in which we experienced higher loss rates, resulting in a lower required ALLL as a percentage of outstanding loan balances as of June 30, 2016

Noninterest income was $2.8 million for the six months ended June 30, 2016 compared to $5.3 million for the six months ended June 30, 2015. This decrease was primarily due to a $1.2 million OREO write-down during the six months ended June 30, 2016 related to a branch facility previously transferred to OREO that is no longer being actively operated as a depository branch.  The write-down was the result of obtaining an updated appraisal on the property.  In addition, net gains on sale of loans, comprised primarily of residential mortgage loans sold, decreased 99% due to decreased sales activity period over period.  Proceeds from loan sales decreased from $36.4 million for the six months ended June 30, 2015 to $2.2 million for the six months ended June 30, 2016.  We made the decision to exit the residential mortgage production business in the fourth quarter of 2015.  The decline in residential mortgage loan sale activity experienced during the three months ended June 30, 2016 is indicative of the run off of the business.  Finally, we sold approximately $4.3 million of securities for a minimal net gain during the six months ended June 30, 2016.  Net gains on sale of securities for the six months ended June 30, 2015 were the result of the sale of approximately $12.6 million of securities for a gain of $0.2 million as part of our ongoing securities portfolio management.

Noninterest expense was $27.0 million for the six months ended June 30, 2016, compared with $25.1 million for the six months ended June 30, 2015, an increase of $1.9 million driven by increased operating expenses in personnel, facilities and infrastructure to support the continued growth in our asset-based lending and equipment lending, including communications and technology expense associated with the recent investments we have made in our communications and technology infrastructure to further our movement toward a single operating platform, which positions us for future acquisitions and greater operating efficiencies.  In addition, increases due to merit increases for existing employees, higher health insurance benefit costs, incentive compensation, and 401(k) expense contributed to the increase.  Finally, the increase in noninterest expense is partially related to the reassignment of certain personnel to the Banking segment in connection with the merger of our subsidiary banks in October 2015.  

53

Asset Management

Our Asset Management segment’s operating income totaled $0.8 million for the six months ended June 30, 2016 compared to $11.4 million for the six months ended June 30, 2015. This increase was significantly impacted by the recording of a pre-tax bargain purchase gain in the amount of $12.5 million associated with the acquisition of Doral Money in 2015, offset by direct transaction costs of $0.3 million and the accrual of a $1.8 million incremental bonus expense for the anticipated amount expected to be paid to team members to recognize their contribution to the transaction.  Excluding the bargain purchase gain net of transaction costs and the incremental bonus accrual, the Asset Management segment reported operating income of $1.0 million for the six months ended June 30, 2015 compared to $0.8 million for the six months ended June 30, 2016.  The decrease for the six months ended June 30, 2016 was due in part to an increase in noninterest expenses of $1.3 million from $1.3 million (adjusted to exclude the incremental bonus expense and direct transaction costs of the Doral Money acquisition) for the six months ended June 30, 2015 to $2.6 million for the six months ended June 30, 2016.  The increased noninterest expenses were primarily related to increases in personnel costs to support the growth in this segment.  This decrease in operating income was offset in part by a $1.0 million increase in noninterest income during the six months ended June 30, 2016.  Triumph Capital Advisors closed an additional CLO offering in June 2015, assumed two CLO asset management agreements in March 2015 as a result of the Doral Money acquisition, and was named staff and services provider for another CLO offering in June 2016, which increased its asset management fees on a period over period basis. In May 2016, a CLO with approximately $329 million in assets being managed by Triumph Capital Advisors was called, reducing our overall managed CLO assets.  As of June 30, 2016, Triumph Capital Advisors managed $1.490 billion of CLO assets earning approximately 31 basis points on average in asset management fees and provides middle- and back-office services under staff and services agreements for $399 million of CLO assets earning approximately 26 basis points on average in fees.

Corporate

The Corporate segment’s operating income totaled $0.1 million for the six months ended June 30, 2016, compared with an operating loss of $3.0 million for the six months ended June 30, 2015.  The increase in interest income at the holding company is primarily due to the investment in shared national credits purchased by the holding company during 2015.  These shared national credits had a remaining balance of $13.8 million as of June 30, 2016.  Also included in the Corporate segment’s increased operating income is an increase of $1.1 million in noninterest income and a decrease of $1.8 million in operating expenses for the six months ended June 30, 2016.  The increase in noninterest income is primarily due to earnings associated with the Corporate segment’s additional equity investments in CLO warehouse entities.  The decrease in operating expenses is primarily related to the reassignment of certain personnel to the Banking segment in connection with the merger of our subsidiary banks in October 2015.

Financial Condition

Assets

Total assets were $1.783 billion at June 30, 2016, compared to $1.691 billion at December 31, 2015, an increase of $92 million, the components of which are discussed below.  

Loan Portfolio

Loans held for investment were $1.411 billion at June 30, 2016, compared with $1.292 billion at December 31, 2015.

We offer a broad range of lending and credit products.  Within our TBK Bank subsidiary, we offer a full range of lending products, including commercial real estate, construction and development, residential real estate, general commercial, mortgage warehouse facilities, farmland and consumer loans, focused on our community banking markets in Iowa and Illinois.  We also originate a variety of commercial finance products offered on a nationwide basis.  These products include our factored receivables, the asset-based loans and equipment loans originated under our Triumph Commercial Finance brand, the healthcare asset-based loans originated under our Triumph Healthcare Finance brand, and the premium finance loans originated under our Triumph Premium Finance brand.  

54

The following table shows our loan portfolio by portfolio segments as of June 30, 2016 and December 31, 2015:

	June 30, 2016					December 31, 2015
(Dollars in thousands)			% of Total					% of Total
Commercial real estate	$	298,991		21	%	$	291,819		23	%
Construction, land development, land		36,498		3	%		43,876		3	%
1-4 family residential properties		74,121		5	%		78,244		6	%
Farmland		35,795		3	%		33,573		3	%
Commercial		574,508		40	%		495,356		38	%
Factored receivables		237,520		17	%		215,088		17	%
Consumer		17,339		1	%		13,050		1	%
Mortgage warehouse		135,746		10	%		120,879		9	%
Total Loans	$	1,410,518		100	%	$	1,291,885		100	%

Commercial Real Estate Loans. Our commercial real estate loans were $299.0 million at June 30, 2016, an increase of $7.2 million from $291.8 million at December 31, 2015, due primarily to new loan origination activity during the six months ended June 30, 2016.

Construction and Development Loans. Our construction and development loans were $36.5 million at June 30, 2016, a decrease of $7.4 million from $43.9 million at December 31, 2015, due primarily to paydowns that offset new loan activity for the period.

Residential Real Estate Loans. Our one-to-four family residential loans were $74.1 million at June 30, 2016, a decrease of $4.1 million from $78.2 million at December 31, 2015, due primarily to paydowns that offset new loan activity for the period.  As previously discussed, we made the decision to exit the residential mortgage production business in the fourth quarter of 2015.  As a result, we expect our residential real estate loan balances to continue to decline as existing loans payoff.

Commercial Loans. Our commercial loans held for investment were $574.5 million at June 30, 2016, an increase of $79.1 million from $495.4 million at December 31, 2015. This increase was driven by growth in the asset-based and equipment finance loans originated under our Triumph Commercial Finance brand and asset-based healthcare loans originated under our Triumph Healthcare Finance brand as we continue to execute on our growth strategy for such products. In addition, premium finance loans originated under our Triumph Premium Finance brand continued to grow during the period.  Our other commercial lending products, comprised primarily of general commercial loans originated in our community banking markets and purchased shared national credits, increased from $189.5 million at December 31, 2015 to $205.1 million at June 30, 2016.  This increase is a result of new originations in our community banking markets in excess of paydowns as we continue to focus on lending activities to support businesses within our local communities. A portion of this increase was offset by a decrease due to $4.0 million of shared national credits being transferred to the held for sale classification during six months ended June 30, 2016 and subsequently being sold.  The following table shows our commercial loans as of June 30, 2016 and December 31, 2015:

	June 30,		December 31,
(Dollars in thousands)	2016		2015
Commercial
TCF equipment	$	167,000	$	148,951
TCF asset-based lending		114,632		75,134
THF asset-based lending		81,664		80,200
Premium finance		6,117		1,612
Other commercial lending		205,095		189,459
Total commercial loans	$	574,508	$	495,356

Factored Receivables. Our factored receivables were $237.5 million at June 30, 2016, an increase of $22.4 million from $215.1 million at December 31, 2015 as we continue to execute on our growth strategy for this product at Triumph Business Capital, our factoring subsidiary, as well as through growth in factored receivables purchased under our Triumph Commercial Finance brand.  Purchase volume at our factoring subsidiary Triumph Business Capital was $816 million during the six months ended June 30, 2016 and Triumph Commercial Finance recorded purchase volume of $126 million for the six months ended June 30, 2016.

Mortgage Warehouse. Our mortgage warehouse facilities maintained outstanding balances of $135.7 million at June 30, 2016, an increase of $14.8 million from $120.9 million at December 31, 2015. The increase was primarily due to higher utilization of our clients’ mortgage warehouse facilities during the period.  Client utilization of mortgage warehouse facilities may experience significant fluctuation on a day-to-day basis given mortgage origination market conditions.

55

Other Loans. Our portfolio also includes real estate loans secured by farmland and consumer loans. All of these categories of loans in the aggregate were less than 5% of our total loan portfolio as of June 30, 2016 and December 31, 2015.

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 as of June 30, 2016.

	June 30, 2016
(Dollars in thousands)	One Year or Less		After One but within Five Years		After Five Years		Total
Commercial real estate	$	77,134	$	179,404	$	42,453	$	298,991
Construction, land development, land		18,983		16,040		1,475		36,498
1-4 family residential properties		6,482		30,911		36,728		74,121
Farmland		1,780		22,033		11,982		35,795
Commercial		188,155		367,175		19,178		574,508
Factored receivables		237,520		—		—		237,520
Consumer		1,517		7,401		8,421		17,339
Mortgage warehouse		135,746		—		—		135,746
	$	667,317	$	622,964	$	120,237	$	1,410,518
Sensitivity of loans to changes in interest rates:
Predetermined (fixed) interest rates			$	441,989	$	45,918
Floating interest rates				180,975		74,319
Total			$	622,964	$	120,237

As of June 30, 2016, most of the Company’s non-factoring business activity is with customers located within certain states. The states of Texas (32%), Illinois (28%), and Iowa (12%) make up 72% 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.

Further, a majority (78%) of our factored receivables, representing approximately 13% of our total loan portfolio as of June 30, 2016, are receivables purchased from trucking fleets and owner-operators 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, and small-to-mid-sized operators in such industry specifically, 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.

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 significant senior management review of proposed extensions of credit exceeding certain thresholds. When delinquencies exist, we rigorously 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.

56

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, loans modified under restructurings as a result of the borrower experiencing financial difficulties (“TDR”), 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.

	June 30,			December 31,
(Dollars in thousands)	2016			2015
Nonperforming loans:
Commercial real estate	$	687		$	725
Construction, land development, land		275			—
1-4 family residential properties		966			551
Farmland		—			—
Commercial		12,008			3,281
Factored receivables		2,260			1,931
Consumer		34			—
Mortgage warehouse		—			—
Purchased credit impaired		5,771			6,867
Total nonperforming loans		22,001			13,355
Other real estate owned, net		6,074			5,177
Other repossessed assets		378			—
Total nonperforming assets	$	28,453		$	18,532
Nonperforming assets to total assets		1.60	%		1.10	%
Nonperforming loans to total loans held for investment		1.56	%		1.03	%
Total past due loans to total loans held for investment		2.80	%		2.41	%

We had $22.0 million and $13.4 million in nonperforming loans, including nonaccrual PCI loans, as of June 30, 2016 and December 31, 2015, respectively. Nonperforming loans increased from December 31, 2015 to June 30, 2016, primarily due to the addition of five commercial finance loans totaling $8.3 million, one of which was a relationship restructured as a TDR.  We recorded an additional $1.5 million of specific loan loss reserves against these balances during the six months ended June 30, 2016.  As a result, the ratio of nonperforming loans to total loans increased to 1.56% at June 30, 2016 and, combined with the increase in our OREO balances, our ratio of nonperforming assets to total assets increased to 1.60% at June 30, 2016 compared to 1.10% at December 31, 2015.  We did experience a reported increase in our total past due loans to total loans during the six months ended June 30, 2016 to 2.80% from 2.41% at December 31, 2015.  This increase was primarily attributable to the increase in nonperforming loans described above.

Our OREO as of June 30, 2016 totaled $6.1 million, an increase of $0.9 million from the $5.2 million as of December 31, 2015.  During the six months ended June 30, 2016 we reclassified two retail branch facilities that were no longer being actively operated as depository branches to OREO, one of which also supported our residential mortgage production business, which we have exited.  One of the branch facilities was sold and we recorded a $1.2 million OREO write-down on the other facility to reduce its carrying amount to $0.7 million at June 30, 2016.  The write-down was the result of obtaining an updated appraisal on the property.

Potential problem loans consist of loans that are performing in accordance with contractual terms but for which management has concerns about the ability of an obligor to continue to comply with repayment terms because of the obligor’s potential operating or financial difficulties. Management monitors these loans and reviews their performance on a regular basis. Potential problem loans contain potential weaknesses that could improve, persist or further deteriorate.  At June 30, 2016 and December 31, 2015, we had $11.6 million and $13.9 million in loans of this type which are not included in any of the nonperforming loan categories.  All of the loans identified as potential problem loans at June 30, 2016 and December 31, 2015 were graded as “substandard”.

Allowance for Loan and Lease Losses

ALLL is a valuation allowance for probable incurred credit losses. Loan losses are charged against the ALLL when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the ALLL. Management estimates the ALLL balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors. Allocations of the ALLL may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

57

The following table sets forth the ALLL by category of loan:

	June 30, 2016								December 31, 2015
(Dollars in thousands)	Allocated Allowance		% of Loan Portfolio			ALLL to Loans			Allocated Allowance		% of Loan Portfolio			ALLL to Loans
Commercial real estate	$	1,792		21	%		0.60	%	$	1,489		23	%		0.51	%
Construction, land development, land		181		3	%		0.50	%		367		3	%		0.84	%
1-4 family residential properties		259		5	%		0.35	%		274		6	%		0.35	%
Farmland		143		3	%		0.40	%		134		3	%		0.40	%
Commercial		6,697		40	%		1.17	%		5,276		38	%		1.07	%
Factored receivables		4,204		17	%		1.77	%		4,509		17	%		2.10	%
Consumer		293		1	%		1.69	%		216		1	%		1.66	%
Mortgage warehouse		203		10	%		0.15	%		302		9	%		0.25	%
Total Loans	$	13,772		100	%		0.98	%	$	12,567		100	%		0.97	%

From December 31, 2015 to June 30, 2016, the ALLL increased from $12.6 million or 0.97% of total loans to $13.8 million or 0.98% of total loans. The increase was principally driven by the $117.6 million increase in the loan portfolio during the six months ended June 30, 2016.  In addition, our ALLL increased due to a net $1.0 million increase in specific allowances recorded on impaired loans during the six months ended June 30, 2016.

The following table presents the unpaid principal and recorded investment for loans at June 30, 2016. The difference between the unpaid principal balance and recorded investment is principally associated with (1) premiums and discounts associated with acquisition date fair value adjustments on acquired loans (both PCI and non-PCI) of which approximately $4.2 million is expected to be accretable into income over the remaining lives of the acquired loans, (2) net deferred origination costs and fees, and (3) previous charge-offs. The net difference can provide protection from credit loss in addition to the ALLL as future potential charge-offs for an individual loan is limited to the recorded investment plus unpaid accrued interest.

(Dollars in thousands)	Recorded		Unpaid
June 30, 2016	Investment		Principal		Difference
Commercial real estate	$	298,991	$	301,586	$	(2,595	)
Construction, land development, land		36,498		37,972		(1,474	)
1-4 family residential properties		74,121		76,456		(2,335	)
Farmland		35,795		35,741		54
Commercial		574,508		575,213		(705	)
Factored receivables		237,520		238,660		(1,140	)
Consumer		17,339		17,321		18
Mortgage warehouse		135,746		135,746		—
	$	1,410,518	$	1,418,695	$	(8,177	)

At June 30, 2016 and December 31, 2015, we had on deposit $23.9 million and $21.2 million, respectively, of customer reserves associated with factored receivables. These deposits 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 on our consolidated balance sheets.

58

The following table provides an analysis of the provisions for loan losses, net charge-offs and recoveries for the three and six months ended June 30, 2016 and 2015, and the effects of those items on our ALLL:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015			2016			2015
Balance at beginning of period	$	12,093		$	9,286		$	12,567		$	8,843
Loans charged-off:
Commercial real estate		(1	)		(54	)		(1	)		(143	)
Construction, land development, land		—			—			—			—
1-4 family residential properties		(47	)		(78	)		(63	)		(183	)
Farmland		—			—			—			—
Commercial		(169	)		(45	)		(169	)		(47	)
Factored receivables		(450	)		(312	)		(458	)		(379	)
Consumer		(112	)		(52	)		(155	)		(147	)
Mortgage warehouse		—			—			—			—
Total loans charged-off	$	(779	)	$	(541	)	$	(846	)	$	(899	)
Recoveries of loans charged-off:
Commercial real estate		13			10			14			51
Construction, land development, land		—			—			—			—
1-4 family residential properties		71			77			76			100
Farmland		—			—			—			—
Commercial		401			4			431			6
Factored receivables		20			18			69			48
Consumer		14			67			33			127
Mortgage warehouse		—			—			—			—
Total loans recoveries	$	519		$	176		$	623		$	332
Net loans charged-off	$	(260	)	$	(365	)	$	(223	)	$	(567	)
Provision for (reversal of) loan losses:
Commercial real estate		161			183			290			773
Construction, land development, land		(17	)		2			(186	)		13
1-4 family residential properties		(50	)		29			(28	)		119
Farmland		10			2			9			9
Commercial		1,134			1,109			1,159			1,102
Factored receivables		524			1,049			84			1,004
Consumer		169			61			199			40
Mortgage warehouse		8			106			(99	)		126
Total provision for loan losses	$	1,939		$	2,541		$	1,428		$	3,186
Balance at end of period	$	13,772		$	11,462		$	13,772		$	11,462
Average total loans held for investment	$	1,286,065		$	1,087,409		$	1,255,977		$	1,037,273
Net charge-offs to average total loans held for investment		0.02	%		0.03	%		0.02	%		0.05	%
Allowance to total loans held for investment		0.98	%		0.99	%		0.98	%		0.99	%

Net loans charged off for the three and six months ended June 30, 2016 were $0.3 million and $0.2 million, respectively, compared to net loans charged off of $0.4 million and $0.6 million, respectively, for the three and six months ended June 30, 2015.

Loans Held for Sale

At June 30, 2016 we held no originated mortgage loans for sale.  The Company made the decision to exit the residential mortgage production business in the fourth quarter of 2015.  We chose to exit this business as the infrastructure investments necessary to appropriately address the operational and compliance risk associated with the business outweighed the amount of profitability generated.

At December 31, 2015, originated mortgage loans held for sale were $1.3 million. Loan sales of $0.2 million and $2.2 million occurred during the three and six months ended June 30, 2016, respectively, with negligible gains recorded.  Loan sales of $16.7 million and $36.4 million occurred during the three and six months ended June 30, 2015, respectively, and resulted in recognized net gains on sale of $0.5 million and $1.0 million in the respective periods.

59

Securities

We held securities classified as available for sale with a fair value of $159.8 million as of June 30, 2016, a decrease of $3.4 million from $163.2 million at December 31, 2015. The decrease is attributable to normal portfolio management activities, with the net reduction being attributed to normal sales, payment, and amortization activity. For the six months ended June 30, 2016, securities were sold resulting in proceeds of $4.3 million, which approximated their carrying value. 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, 2016, we have investments classified as held to maturity with an amortized cost of $27.5 million, all of which were purchased during the six months ended June 30, 2016.  Approximately $25.8 million of these securities represent investments in “A” rated floating rate CLO securities.  Credit spreads on these products widened early this year due to market volatility, providing an opportunity to purchase these securities at attractive risk-adjusted yields.  We were able to leverage the expertise of our Triumph Capital Advisors team to underwrite and select the securities purchased.  These floating rate CLO securities provide an initial yield of approximately 4.7% with an estimated average expected life of approximately 6.5 years.  These are not CLO securities issued or managed by Triumph Capital Advisors, but by other CLO managers.  The remaining $1.7 million of held to maturity securities represent a minority investment in the unrated subordinated notes of a recently issued CLO managed by Trinitas Capital Management.  Triumph Capital Advisors provides certain middle- and back-office services to Trinitas Capital Management with respect to the CLO, but does not serve as asset manager.

The following tables set forth the amortized cost and average yield of our securities, by type and contractual maturity as of June 30, 2016:

	Maturity as of June 30, 2016
	One Year or Less					After One but within Five Years					After Five but within Ten Years					After Ten Years					Total
	Amortized		Average			Amortized		Average			Amortized		Average			Amortized		Average			Amortized		Average
(Dollars in thousands)	Cost		Yield			Cost		Yield			Cost		Yield			Cost		Yield			Cost		Yield
U.S. Government agency obligations	$	30,316		0.98	%	$	60,072		1.78	%	$	—		—		$	—		—		$	90,388		1.51	%
Mortgage-backed securities		—		—			721		2.37	%		336		4.27	%		23,947		2.29	%		25,004		2.32	%
Asset backed securities		—		—			—		—			4,923		1.61	%		8,256		1.95	%		13,179		1.83	%
State and municipal		350		2.22	%		788		2.55	%		128		4.00	%		—		—			1,266		2.61	%
Corporate bonds		374		2.68	%		25,302		1.97	%		1,406		2.36	%		276		5.09	%		27,358		2.03	%
SBA pooled securities		—		—			3		1.67	%		165		2.76	%		—		—			168		2.75	%
Total available for sale securities	$	31,040		1.01	%	$	86,886		1.85	%	$	6,958		1.96	%	$	32,479		2.22	%	$	157,363		1.76	%
Held to maturity securities:	$	—		—		$	—		—		$	—		—		$	27,502		5.16	%	$	27,502		5.16	%

Liabilities

Our total liabilities were $1.504 billion as of June 30, 2016, an increase of $81 million, from $1.423 billion at December 31, 2015. The net change was primarily due to a $26 million increase in customer deposits, a $4 million increase in customer repurchase agreements, and a $51 million increase in Federal Home Loan Bank advances, offset by a $1 million decrease in other liabilities.

Deposits

Deposits represent our primary source of funds. We intend to continue to focus on growth in transactional deposit accounts as part of our growth strategy, both in our existing branch networks and through targeted acquisitions.

Our total deposits were $1.275 billion as of June 30, 2016, compared to $1.249 billion as of December 31, 2015, an increase of $26 million.  As of June 30, 2016, interest bearing demand deposits, noninterest bearing deposits, money market deposits and savings deposits accounted for 47% of our total deposits, while individual retirement accounts, certificates of deposit, and brokered deposits made up 53% of total deposits. See Note 7 – Deposits in the accompanying condensed notes to consolidated financial statements included elsewhere in this report for details of our deposit balances as of June 30, 2016 and December 31, 2015.

60

The following table provides information on the maturity distribution of time deposits with individual balances of $100,000 to $250,000 and of time deposits with individual balances of $250,000 or more as of June 30, 2016:

	$100,000 to		$250,000 and
(Dollars in thousands)	$250,000		Over		Total
Maturity
3 months or less	$	73,060	$	37,929	$	110,989
Over 3 through 6 months		60,635		18,419		79,054
Over 6 through 12 months		89,616		35,666		125,282
Over 12 months		60,337		20,404		80,741
	$	283,648	$	112,418	$	396,066

The following table summarizes our average deposit balances and weighted average rates for the three and six month periods ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016								Three Months Ended June 30, 2015
	Average		Weighted			% of			Average		Weighted			% of
(Dollars in thousands)	Balance		Avg Yields			Total			Balance		Avg Yields			Total
Interest bearing demand	$	242,862		0.10	%		19	%	$	239,033		0.06	%		20	%
Individual retirement accounts		64,075		1.24	%		5	%		55,778		1.21	%		5	%
Money market		122,670		0.23	%		10	%		116,517		0.23	%		10	%
Savings		78,795		0.05	%		6	%		74,088		0.05	%		6	%
Certificates of deposit		565,600		1.11	%		43	%		485,533		1.04	%		41	%
Brokered deposits		49,950		1.01	%		4	%		50,002		1.00	%		4	%
Total interest bearing deposits		1,123,952		0.72	%		87	%		1,020,951		0.65	%		86	%
Noninterest bearing demand		166,863		—			13	%		170,240		—			14	%
Total deposits	$	1,290,815		0.63	%		100	%	$	1,191,191		0.56	%		100	%
	Six Months Ended June 30, 2016								Six Months Ended June 30, 2015
	Average		Weighted			% of			Average		Weighted			% of
(Dollars in thousands)	Balance		Avg Yields			Total			Balance		Avg Yields			Total
Interest bearing demand	$	231,851		0.10	%		18	%	$	234,766		0.06	%		20	%
Individual retirement accounts		62,993		1.24	%		5	%		55,575		1.18	%		5	%
Money market		117,448		0.23	%		9	%		117,851		0.23	%		10	%
Savings		77,673		0.05	%		6	%		73,067		0.05	%		6	%
Certificates of deposit		563,637		1.11	%		45	%		477,100		1.03	%		41	%
Brokered deposits		49,973		1.01	%		4	%		50,003		1.00	%		4	%
Total interest bearing deposits		1,103,575		0.73	%		87	%		1,008,362		0.65	%		86	%
Noninterest bearing demand		163,621		—			13	%		165,583		—			14	%
Total deposits	$	1,267,196		0.64	%		100	%	$	1,173,945		0.56	%		100	%

The increase in the average balance of certificates of deposit as a percentage of average total deposits was due to a change in the mix of our interest bearing deposits toward higher rate certificates of deposit as these deposit products were used in part to fund our organic loan growth period over period.

61

Other Borrowings

Customer Repurchase Agreements

Customer repurchase agreements outstanding totaled $13.6 million at June 30, 2016 and $9.3 million at December 31, 2015. Our customer repurchase agreements generally overnight maturities. Variances in these balances are attributable to normal customer behavior and seasonal factors affecting their liquidity positions. The following provides a summary of our customer repurchase agreements as of and for the six months ended June 30, 2016 and the year ended December 31, 2015:

	June 30,			December 31,
(Dollars in thousands)	2016			2015
Amount outstanding at end of period	$	13,635		$	9,317
Weighted average interest rate at end of period		0.02	%		0.02	%
Average daily balance during the year	$	10,752		$	13,158
Weighted average interest rate during the year		0.02	%		0.02	%
Maximum month-end balance during the year	$	13,635		$	16,033

FHLB Advances

As part of our overall funding and liquidity management program, from time to time we borrow from the Federal Home Loan Bank. Our FHLB advances are collateralized by assets, including a blanket pledge of certain loans.  Our FHLB borrowings totaled $180.5 million as of June 30, 2016 and $130.0 million as of December 31, 2015.  As of June 30, 2016 and December 31, 2015, we had $110.5 million and $150.3 million, respectively, in unused and available advances from the FHLB. The increase in our average borrowing capacity from the year ended December 31, 2015 to the six months ended June 30, 2016 was primarily the result of the new inclusion of mortgage warehouse facilities in our borrowing base with the FHLB, which began in late 2015.

The following provides a summary of our FHLB advances as of and for the six months ended June 30, 2016 and the year ended December 31, 2015:

	June 30,			December 31,
(Dollars in thousands)	2016			2015
Amount outstanding at end of period	$	180,500		$	130,000
Weighted average interest rate at end of period		0.36	%		0.32	%
Average amount outstanding during the period		124,762			34,244
Weighted average interest rate during the period		0.36	%		0.19	%
Highest month end balance during the period		180,500			130,000

Junior Subordinated Debentures

We have two junior subordinated debentures outstanding with a combined face value of $33.0 million. These debentures are unsecured obligations and were issued to two trusts that are unconsolidated subsidiaries. The trusts in turn issued trust preferred securities with identical payment terms to unrelated investors. The debentures mature in September 2033 and July 2036 and may be called 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 rate equal to three month LIBOR plus a weighted average spread of 2.28%. As part of the purchase accounting adjustments made with the Triumph Community Bank acquisition, we adjusted the carrying value of the junior subordinated debentures to fair value as of October 15, 2013. The junior subordinated debentures had a combined carrying value of $24.8 million as of June 30, 2016 and $24.7 million as of December 31, 2015, and the discount 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 $24.8 million and $24.7 million was allowed in the calculation of Tier I capital as of June 30, 2016 and December 31, 2015, respectively.

Capital Resources and Liquidity Management

Capital Resources

Our stockholders’ equity totaled $279.8 million as of June 30, 2016, an increase of $11.8 million from $268.0 million as of December 31, 2015. Stockholders’ equity increased during this period primarily due to net income for the period of $9.6 million. Offsetting this increase were preferred dividends paid on our Series A and Series B preferred stock.

62

Liquidity Management

We define liquidity as our ability to generate sufficient cash to fund current loan demand, deposit withdrawals, or 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 are subject to regulatory guidelines and requirements which require minimum levels of liquidity. We believe that our liquidity ratios meet or exceed those guidelines and our present position is adequate to meet our current and future liquidity needs.

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, 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, 2016, TBK Bank had unsecured federal funds lines of credit with six unaffiliated banks totaling $112.5 million, with no amounts advanced against those lines at that time.

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. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and TBK Bank each 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.

The Company is subject to the Basel III regulatory capital framework.  Beginning in January 2016, the implementation of the capital conservation buffer was effective for the Company starting at the 0.625% level and increasing 0.625% each year thereafter, until it reaches 2.5% on January 1, 2019.  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.

Quantitative measures established by regulations to ensure capital adequacy require the Company and TBK Bank to maintain minimum amounts and ratios (as set forth in the table below) of total, Tier 1, and common equity Tier 1 capital to risk weighted assets, and of Tier 1 capital to average assets. Management believes, as of June 30, 2016, the Company and TBK Bank meet all capital adequacy requirements to which they are subject, including the capital buffer requirement.

As of June 30, 2016, 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, 2016 that management believes would have changed TBK Bank’s category.

63

The actual capital amounts and ratios for the Company and TBK Bank are presented in the following table as of June 30, 2016.

					To Be Adequately				To Be Well
					Capitalized Under				Capitalized Under
					Prompt Corrective				Prompt Corrective
(Dollars in thousands)	Actual				Action Provisions				Action Provisions
As of June 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	288,194		18.0%	$	127,944		8.0%	N/A		N/A
TBK Bank, SSB	$	215,780		14.0%	$	122,948		8.0%	$	153,685		10.0%
Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	274,253		17.1%	$	95,958		6.0%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	92,211		6.0%	$	122,948		8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	243,086		15.2%	$	71,968		4.5%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	69,158		4.5%	$	99,895		6.5%
Tier 1 capital (to average assets)
Triumph Bancorp, Inc.	$	274,253		16.0%	$	68,494		4.0%	N/A		N/A
TBK Bank, SSB	$	201,915		12.3%	$	65,902		4.0%	$	82,378		5.0%

Contractual Obligations

The following table summarizes our contractual obligations and other commitments to make future payments as of June 30, 2016 excluding purchase accounting adjustments for our junior subordinated debentures and deposits. The amount of the obligations presented in the table reflects principal amounts only and excludes the amount of interest we are obligated to pay. 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, 2016
(Dollars in thousands)	Total		One Year or Less		After One but within Three Years		After Three but within Five Years		After Five Years
Customer repurchase agreements	$	13,635	$	13,635	$	—	$	—	$	—
Federal Home Loan Bank advances		180,500		40,500		140,000		—		—
Junior subordinated debentures		32,990		—		—		—		32,990
Operating lease agreements		6,352		1,608		2,756		1,988		—
Time deposits with stated maturity dates		669,889		510,421		142,485		16,983		—
Total contractual obligations	$	903,366	$	566,164	$	285,241	$	18,971	$	32,990

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.

64

The following table details our commitments associated with outstanding standby and commercial letters of credit and commitments to extend credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect actual future cash funding requirements.

	June 30,		December 31,
(Dollars in thousands)	2016		2015
Commitments to make loans	$	29,831	$	9,520
Unused lines of credit		132,258		116,703
Standby letters of credit		3,241		3,029
Total other commitments	$	165,330	$	129,252

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 policies which we believe to be the most critical in preparing our consolidated financial statements relate to originated loans, purchased loans, factored receivables, ALLL, goodwill and intangibles, and fair values of financial instruments. Since December 31, 2015, 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 2015 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.

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. 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:

• our limited operating history as an integrated company and our recent acquisitions;

• business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market area;

• our ability to mitigate our risk exposures;

• our ability to maintain our historical earnings trends;

• risks related to the integration of acquired businesses (including our recent acquisition of ColoEast Bankshares, Inc.) and any future acquisitions;

• changes in management personnel;

• interest rate risk;

• concentration of our factoring services in the transportation industry;

• credit risk associated with our loan portfolio;

65

• 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;

• 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;

• risks related to our acting as the asset manager for one or more CLOs;

• 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 obligations associated with being a public company;

• 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;

• 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;

• 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;

• increases in our capital requirements; and

• risk retention requirements under the Dodd-Frank Act.

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.

66

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, 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.

The following table summarizes simulated change in net interest income versus unchanged rates as of June 30, 2016 and December 31, 2015:

	June 30, 2016						December 31, 2015
	Following 12 Months			Months 13-24			Following 12 Months			Months 13-24
+400 basis points		3.0	%		(2.6	%)		5.5	%		(1.7	%)
+300 basis points		2.2	%		(1.9	%)		3.9	%		(1.4	%)
+200 basis points		1.4	%		(1.3	%)		2.3	%		(1.2	%)
+100 basis points		0.7	%		(0.4	%)		0.9	%		(0.7	%)
Flat rates		0.0	%		0.0	%		0.0	%		0.0	%
-100 basis points		(2.0	%)		(2.7	%)		(1.9	%)		(1.6	%)

The following table presents the change in our economic value of equity as of June 30, 2016 and December 31, 2015, assuming immediate parallel shifts in interest rates:

	Economic Value of Equity at Risk (%)
	June 30, 2016			December 31, 2015
+400 basis points		5.2	%		0.2	%
+300 basis points		4.2	%		(0.2	%)
+200 basis points		2.9	%		(1.0	%)
+100 basis points		1.9	%		(1.2	%)
Flat rates		0.0	%		0.0	%
-100 basis points		(9.0	%)		(5.9	%)

67

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

Evaluation of disclosure controls and procedures. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this Quarterly Report on Form 10-Q was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. 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 upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms.

Changes in internal control over financial reporting. There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q 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. 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.

Trademark Infringement Lawsuit

On February 18, 2015, a trademark infringement suit was filed in the United States District Court for the Western District of Tennessee Western Division against the Company and certain subsidiaries by Triumph Bancshares, Inc. and Triumph Bank, N.A., asserting that the Company’s use of “Triumph” as part of the Company’s trademarks and domain names causes a likelihood of confusion, has caused actual confusion, and infringes plaintiffs’ trademarks.  The suit was settled and did not have a material impact on the financial condition and results of operations of the Company.

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, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

68

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits (Exhibits marked with a “†” denote management contracts or compensatory plans or arrangements)

3.1	Second Amended and Restated Certificate of Formation of the Registrant, effective November 7, 2014, incorporated by reference to Exhibit 3.1 to Form 8-K filed with the SEC on November 13, 2014.
3.2	Second Amended and Restated Bylaws of the Registrant, effective November 7, 2014, incorporated by reference to Exhibit 3.2 to Form 8-K filed with the SEC on November 13, 2014.
10.1†	Amended and Restated Employment Agreement of Daniel J. Karas dated March 30, 2016.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	XBRL Instance Document

69

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 BANCORP, INC.
		(Registrant)
Date:	August 3, 2016	/s/ Aaron P. Graft
		Aaron P. Graft
		President and Chief Executive Officer
Date:	August 3, 2016	/s/ R. Bryce Fowler
		R. Bryce Fowler
		Chief Financial Officer

70

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into on March 30, 2016, to be effective as of January 1, 2016 (the “Effective Date”), by and between TBK BANK, SSB (the “Bank”), and Daniel J. Karas (“Executive”).

RECITALS

WHEREAS, the Bank is the wholly-owned subsidiary of Triumph Bancorp, Inc. (the “Company”); and

WHEREAS, Executive has agreed to continue serving as the Executive Vice President and Chief Lending Officer the Bank; and

WHEREAS, the Bank and Executive are parties to that certain Employment Agreement dated and effective as of August 16, 2012 (the “Prior Employment Agreement”), which the parties now wish to amend and restate in full as follows, and as of the Effective Date, the Prior Employment Agreement is null and void; and

WHEREAS, Executive is willing to enter into this Agreement in consideration of his employment by the Bank and the benefits that Executive will receive under the terms hereof.

AGREEMENTS

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. EMPLOYMENT OF EXECUTIVE.

1.1Duties and Status. The Bank hereby engages Executive as the Executive Vice President and Chief Lending Officerof the Bank for the Term (as defined in Section 3.1 hereof), and Executive accepts such employment, on the terms and subject to the conditions set forth in this Agreement. During the Term, Executive will faithfully exercise such authority and perform such duties on behalf of the Bank as are normally associated with his title and position as Executive Vice President and Chief Lending Officer and such other duties or positions as Executive and the Bank will mutually determine from time to time, including service for such other affiliates of the Company as shall be mutually determined. In the capacity defined in this Section 1.1, Executive will report to the Chief Executive Officer of the Bank and the Company.

1.2Time and Effort. During the Term, Executive will devote his full working time, energy, skill and commercially reasonable best efforts to the performance of his duties hereunder in a manner which will faithfully and diligently further the business and interests of the Bank and the Company. Notwithstanding the foregoing, Executive may participate fully in social, charitable,

1

civic activities and such other personal affairs of Executive as do not interfere with performance of his duties hereunder. The Parties have also agreed that Executive may continue to serve as a director for other entities, and may from time to time provide consulting or other services for remuneration unrelated to his services to the Bank and the Company; however, as an express condition thereto, Executive will be required to fully disclose for consent all such directorships and consulting or services engagements to the Board of Directors of the Bank and/or the Company in advance, and acknowledges and agrees that such consent may be withheld in the sole discretion of the Bank and/or the Company. 

2. COMPENSATION AND BENEFITS.

2.1Annual Base Salary. For all of the employment rendered by Executive to the Bank and to the Company, the Bank will pay Executive an annual base salary of $250,000.00 (the “Annual Base Salary”). Executive’s Annual Base Salary will be payable in equal installments in accordance with the practice of the Bank in effect from time to time for the payment of salaries to officers of the Bank, but in no event less than bi-monthly, and may be increased or decreased during the Term.  Any increase or decrease in the amount will henceforth be the Annual Base Salary.

2.2Annual Incentive Program. Executive shall be eligible to participate in any annual incentive program maintained by the Bank or the Company to the same extent as other executives of the Bank or the Company and shall be eligible to receive cash incentive awards thereunder, as determined by the Board of Directors of the Bank or the Company (as applicable, the “Board”) or a committee of the Board.

2.3Long-Term Incentive Program. Executive shall be eligible to participate in any long-term incentive program (“LTIP”) maintained by the Bank or the Company to the same extent as other executives of the Bank or the Company and shall be eligible to receive equity and long-term cash incentive awards (“LTI Awards”) thereunder, as determined by the Board or a committee of the Board.

2.4Expenses. The Bank will timely pay or reimburse Executive for all reasonable travel, entertainment and other business expenses actually paid or incurred by Executive during the Term in the performance of Executive’s duties under this Agreement in accordance with the Bank’s employee business expense reimbursement policies in effect from time to time, but in no event less than monthly.

2.5Benefits. To the extent the Bank or the Company provides employee benefits plans including, without limitation, any pension, disability, group life, sickness, accident and health and dental insurance plans or programs, Executive will be entitled to participate in such employee benefit plans on such terms as determined by the Bank or the Company. For the avoidance of doubt, Executive will not be reimbursed by the Bank or the Company for any health-related expenses, unless otherwise agreed to by the Bank or the Company.

2.6Paid Time Off. During the Term, Executive will be entitled to paid time off of at least four weeks per calendar year and leave of absence and leave for illness or temporary disability in accordance with the policies of the Bank in effect from time to time.

2

2.7Indemnification. During the Term, the Bank or the Company agrees to maintain one or more directors and officers liability insurance policies covering Executive pursuant to the terms of such policies. 

3. TERM AND TERMINATION.

3.1Term.The term of employment hereunder will commence on the Effective Date and will terminate on the earlier of (a) the close of business on the first anniversary of the Effective Date (the “Original Term”) or (b) any termination of employment pursuant to Section 3.2 hereof; provided, however, if a Change in Control should occur at any time during the Term of the Agreement, then such Term shall end no earlier than the second anniversary of the date of such Change in Control (or if earlier, a termination of employment pursuant to Section 3.2 hereof).  Thereafter, unless written notification is given by either the Bank or Executive at least sixty (60) days before the expiration of the Original Term or any subsequent renewal term, the Term will automatically renew for successive one year periods (each, a “Renewal Term”). For purposes of this Agreement, when the word “Term” is used alone, it collectively refers to the Original Term and all Renewal Term(s). The Bank’s decision not to extend the Term will not be considered termination of Executive’s employment, whether with or without Cause, as defined below. Notwithstanding any provision of this Agreement to the contrary, the nonrenewal of this Agreement in accordance with this Section 3.1 shall not discharge the Bank’s obligation to pay any benefits that Executive became entitled to under this Agreement prior to such nonrenewal.  

3.2Termination of Employment. Each party will have the right to terminate Executive’s employment hereunder before the Term expires to the extent, and only to the extent, permitted by this Section.

(a)By the Bank for Cause. The Bank will have the right to terminate Executive’s employment at any time upon delivery of written notice of termination for Cause to Executive (which notice will specify in reasonable detail the basis upon which such termination is made), such employment to terminate immediately upon delivery of such notice unless otherwise specified by the Bank. In the event that Executive’s employment is terminated for Cause, Executive will be entitled to receive the payments referred to in Section 3.3(a) hereof. Notwithstanding the foregoing, if termination is pursuant to Section 6.2(iii), Bank shall provide Executive a written notice describing in detail the alleged neglected duties and Executive will be provided thirty (30) business days to defend and/or cure such alleged breach.

(b)By the Bank Upon Total Disability. The Bank will have the right to terminate Executive’s employment on thirty (30) days’ prior written notice to Executive if the Bank determines in good faith that Executive is unable to perform his duties by reason of Total Disability, but any termination of employment pursuant to this subsection (b) will obligate the Bank to make the payments referred to in Section 3.3(b) hereof.

(c)Due to Death of Executive. Executive’s employment hereunder will terminate upon the death of Executive. In such an event, Executive’s estate will be entitled to receive the payments referred to in Section 3.3(c) hereof.

3

(d)By Executive other than for Good Reason. If Executive terminates his employment other than for Good Reason Executive shall be entitled to receive the payments referred to in Section 3.3(d) hereof.  

(e)By the Bank Other Than for Cause, Death or Total Disability or By Executive For Good Reason. The Bank will have the right to terminate Executive’s employment, other than for Cause, death or Total Disability, on sixty (60) days’ prior written notice to Executive in the Bank’s sole discretion and Executive may terminate his employment for Good Reason pursuant to the notice requirements set forth in Section 6.5(c). In either event, Executive shall be entitled to receive the payments referred to in Section 3.3(e) or in Section 3.3(f), as applicable.

3.3Compensation and Severance Benefits Following Termination. Except as specifically provided in this Section, any and all obligations of the Bank to make payments to Executive under this Agreement will cease as of the date the Term expires pursuant to Section 3.1 or as of the date Executive’s employment is terminated pursuant to Section 3.2, as the case may be. Executive will be entitled to receive only the following compensation and benefits following the termination of his employment hereunder:

(a)Benefits Payable upon Termination For Cause. In the event that the Bank terminates the employment of Executive pursuant to Section 3.2(a), Executive will be entitled to receive a lump-sum amount equal to the Standard Termination Payments within sixty (60) days of such termination of employment.

(b)Benefits Payable Upon Termination for Total Disability. In the event that the Bank elects to terminate the employment of Executive pursuant to Section 3.2(b), (i) the Bank will pay to Executive a lump-sum amount equal to the Standard Termination Payments within sixty (60) days of such termination of employment and (ii) Executive will be entitled to such disability and other employee benefits as may be provided under the terms of the Bank’s employee benefit plans.

(c)Benefits Payable Upon Death. In the event that the Term terminates pursuant to Section 3.2(c), (i) the Bank will pay to Executive’s surviving spouse or, if none, his estate, a lump-sum amount equal to Executive’s Standard Termination Payments within sixty (60) days of such termination of employment and (ii) death benefits, if any, under the Bank’s employee benefit plans will be paid to Executive’s beneficiaries as properly designated in writing by Executive.

(d)Benefits Payable Upon Executive’s Voluntary Termination other than for Good Reason. In the event Executive elects to terminate his employment pursuant to Section 3.2(d), (i) the Bank will pay to Executive a lump-sum amount equal to the Standard Termination Payments within sixty (60) days of such termination of employment and (ii) Executive will be entitled to such other employee benefits as may be provided under the terms of the Bank’s employee benefit plans for the time period and in such amounts and forms as provided for in such plans.

4

(e)Benefits Payable Upon a Qualifying Termination Outside of a Change in Control. 

(i)In the event of a Qualifying Termination prior to or more than 24 months following a Change in Control, (i) the Bank will pay to Executive a lump-sum amount equal to the Standard Termination Payments within sixty (60) days of such Qualifying Termination and (ii) Executive will be entitled to such other employee benefits as may be provided under the terms of the Bank’s employee benefit plans for the time period and in such amounts and forms as provided for in such plans.

(ii)In the event of a Qualifying Termination prior to or more than twenty-four (24) months following a Change in Control, and subject to Executive's execution of a full release of claims in a form satisfactory to the Bank (“Release”) within 45 days following Executive’s Qualifying Termination, and provided there has been no revocation or attempted revocation of the Release of Claims during the statutory revocation period (the date after the lapse of such revocation period without a revocation or attempted revocation, the “Release Effective Date”) and subject to the terms of this Agreement, Executive will be eligible for the following benefits:

A.  Cash Severance. A lump sum cash amount equal to the product of (x) and (y) where (x) is Executive’s Annual Base Salary as then in effect in accordance with Section 2.1 and (y) is 1.0.

B.  Continuation of Health Care Coverage.  The Executive (and his eligible dependents) shall be entitled to continued participation in the Bank’s or the Company’s medical, dental and vision plans, as in effect from time to time, at then-existing participation and coverage levels, for twelve (12) months immediately following Executive’s Qualifying Termination.  For the avoidance of doubt, the Participant (and his eligible dependents) shall be responsible for paying all deductibles and other cost sharing items under such plans but shall not be responsible for the payment of premiums. If and to the extent that any benefit described in this paragraph (B) is not or cannot be paid or provided under a Bank or Company plan or arrangement, then the Bank will pay or provide for the payments to Executive of such employee benefits. Nothing in this paragraph (B) shall be construed to impair or reduce Executive's rights under Consolidated Omnibus Reconciliation Act “COBRA” or other applicable law.

(f)Benefits Payable Upon a Qualifying Termination in the event of a Change in Control.

(i)Standard Termination Benefits In the event of Executive’s Qualifying Termination within twenty-four (24) months after a Change in Control, (i) the Bank will pay to Executive a lump-sum amount equal to the Standard Termination Payments within sixty (60) days of such Qualifying Termination and (ii) Executive will be entitled to such other employee benefits as may be provided under the terms of the Bank’s employee benefit plans for the time period and in such amounts and forms as provided for in such plans.

(ii)In the event of a Qualifying Termination within 24 months after a Change in Control, and subject to Executive’s execution of a Release within forty-five (45) days

5

following such Qualifying Termination, and provided there occurs a Release Effective Date, and subject to the terms of this Agreement, Executive will be eligible for the following benefits: 

A.  Cash Severance. A lump sum cash amount equal to the product of (x) and (y) where (x) is the sum of Executive’s Annual Base Salary as then in effect in accordance with Section 2.1 and Executive’s Average Bonus and (y) is 2.0.

B.  Continuation of Health Care Coverage.  The Executive (and his eligible dependents) shall be entitled to continued participation in the Bank’s medical, dental and vision plans, as in effect from time to time, at then-existing participation and coverage levels, for twenty four (24) months immediately following Executive’s Qualifying Termination. For the avoidance of doubt, the Participant (and his eligible dependents) shall be responsible for paying all deductibles and other cost sharing items under such plans but shall not be responsible for the payment of premiums.  If and to the extent that any benefit described in this paragraph (B) is not or cannot be paid or provided under a Bank or Company plan or arrangement, then the Bank will pay or provide for the payments to Executive of such employee benefits. Nothing in this paragraph (B) shall be construed to impair or reduce an Executive's rights under COBRA or other applicable law.

3.4Form and Time of Payment of Benefits Payable in the Event of a Qualifying Termination Outside of a Change in Control. Subject to the timely execution of the required Release, and the occurrence of the Release Effective Date, benefits provided under Section 3.3(e)(ii) shall be paid in accordance with the following provisions:

(a)Cash severance benefits under Section 3.3(e)(ii)(A) shall be paid to Executive in a lump sum no later than the 75^th day following Executive’s Qualifying Termination.

(b)Any obligation of the Bank to provide or to continue to provide Benefit Continuation under Section 3.3(e)(ii)(B), shall cease in the event that the Release Effective Date does not occur.

(c)All payments and benefits under this Section 3.4 are subject to Executive’s continuing compliance with restrictive covenants set forth in Section 4 of this Agreement and the Bank’s policies on recoupment, as in effect from time to time.

(d)For avoidance of doubt, if Executive is entitled to receive payment pursuant to this Section 3.4, then Executive will not also be entitled to receive any payments pursuant to any other section of this Agreement.

3.5Form and Time of Payment of Benefits in the Event of a Change in Control. Subject to the timely execution of the required Release, and the occurrence of the Release Effective Date, benefits provided under Section 3.3(f)(ii) shall be paid in accordance with the following provisions:

(a)Cash severance benefits under Section 3.3(f)(ii)(A) shall be paid to Executive in a lump sum no later than the 75^th day following the Qualifying Termination.

6

(b)Any obligation of the Bank to provide or to continue to provide Benefit Continuation under Section 3.3(e)(iii), shall cease in the event that the Release Effective Date does not occur.  

(c)All payments and benefits under this Section 3.5 are subject to Executive’s continuing compliance with restrictive covenants set forth in Section 4 of the Agreement and the Bank’s policies on recoupment, as in effect from time to time.

(d)For avoidance of doubt, if Executive is entitled to receive payment pursuant to this Section 3.5, then Executive will not also be entitled to receive any payments pursuant to any other section of this Agreement.

3.6Best Net.

(a)It is the object of this paragraph to provide for the maximum after-tax income to Executive with respect to any payment, benefit or distribution to or for the benefit of Executive, whether paid or payable or distributed or distributable or provided pursuant to this Agreement or any other plan, arrangement or agreement, that would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (“Code”) or any similar federal, state or local tax that may hereafter be imposed (a “Payment”) (Section 4999 of the Code or any similar federal, state or local tax are collectively referred to as the “Excise Tax”).  Accordingly, before any Payments are made, a determination will be made as to which of two alternatives will maximize such Executive’s after-tax proceeds, and the Bank must notify Executive in writing of such determination.  The first alternative is the payment in full of all Payments potentially subject to the Excise Tax.  The second alternative is the payment of only a part of Executive’s Payments so that Executive receives the largest payment and benefits possible without causing the Excise Tax to be payable by Executive.  This second alternative is referred to in this paragraph as “Limited Payment”.  The Executive’s Payments shall be paid only to the extent permitted under the alternative determined to maximize Executive’s after-tax proceeds, and Executive shall have no rights to any greater payments on his or her Payments.  If Limited Payment applies, Payments shall be reduced in a manner that would not result in Executive incurring an additional tax under Section 409A.

(b)Accordingly, Payments not constituting nonqualified deferred compensation under Section 409A shall be reduced first, in this order but only to the extent that doing so avoids the Excise Tax (e.g., accelerated vesting or payment provisions in any LTIP Award will be ignored to the extent that such provisions would not trigger the Excise Tax):

(i)Payment of the severance amounts under Section 3.3(f) hereof to the extent such payments do not constitute deferred compensation under Section 409A.

(ii)LTIP Awards the vesting of which is subject to the satisfaction of one or more performance conditions (“Performance-Based Awards”), but excluding such LTI Awards subject to Section 409A.

(iii)LTIP Awards the vesting of which is subject to the satisfaction of a service condition (“Service-Based Awards”), but excluding such LTIP Awards subject to Section 409A.

7

(iv)Awards of stock options and stock appreciation rights under any LTIP. 

(c)Then, if the foregoing reductions are insufficient, Payments constituting deferred compensation under Section 409A shall be reduced, in this order:

(i)Payment of the severance amounts under Section 3.3(f) hereof to the extent such payments constitute deferred compensation under Section 409A.

(ii)Performance-Based Awards subject to Section 409A.

(iii)Service-Based Awards subject to Section 409A.

(d)In the event of conflict between the order of reduction under this Agreement and the order provided by any other Bank document governing a Payment, then the order under this Agreement shall control.

(e)All determinations required to be made under this Section 3.6 shall be made by Bank’s external auditor (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Bank and Executive within ten (10) business days of the termination of employment giving rise to benefits under the Plan, or such earlier time as is requested by the Bank.  All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Bank.  In the event the Accounting Firm determines that the Payments shall be reduced, it shall furnish Executive with a written opinion to such effect. The determination by the Accounting Firm shall be binding upon the Bank and Executive.

3.7All Payments. All payments made to Executive upon the termination of Executive’s employment will be made in U.S dollars and are in lieu of all other termination or severance payments available at law or otherwise.

4. Restrictive covenants.

4.1Access to Confidential Information. Executive 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 and its affiliates. Executive 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, the Bank and its customers and investors, and information that Executive may create or prepare certain information related to his duties. Executive 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 Executive), 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 and its affiliates. Executive agrees further not to remove or retain any figures, financial information, personnel data, calculations, letters, documents, lists, papers, or copies thereof, which

8

embody Confidential Information of the Company, and to return any such information in Executive’s possession at the conclusion of Executive’s use of such information and at the conclusion of Executive’s employment with the Bank. 

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 Executive 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.  For purposes of this Section 4, all references to the Company shall, unless the context clearly indicates otherwise, include the Company and its affiliates, including the Bank.

4.2Non-Competition.  Executive acknowledges that, as a result of Executive’s service with the Company, a special relationship of trust and confidence will develop between Executive, 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. Executive 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. Executive further acknowledges that throughout his service with the Company, Executive 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 Executive 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, Executive agrees that, during Executive’s employment with the Company, and for a period of twelve (12) months following the date of the termination of Executive’s employment with the Company (whether by the Company or by Executive) for any reason, Executive will not, either for himself or in conjunction with others:

(a)compete or engage anywhere in the geographic area comprised of any Metropolitan Statistical Area, as defined by the US Office of Management & Budget, in which Executive has performed duties on behalf of the Company during the preceding twelve (12) months, whether such duties were performed in person, telephonically, electronically or otherwise (“Market Area”), in any business that is the same or similar, or offers competing products and services as those offered by the Company;

(b)take any action to invest in, own, manage, operate, control, participate in, be employed or engaged by, or be connected in any manner with any partnership, corporation or other business or entity engaging in a business the same or similar, or which offers competing products and services as those offered by the Company anywhere within the Market Area; notwithstanding the foregoing, Executive is permitted hereunder to own, directly or indirectly, up to five percent (5%) of the issued and outstanding securities of any publicly traded financial institution conducting business within the Market Area;

9

(c)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 Executive has Proprietary Information, or with whom Executive has done business or attempted to do business on behalf of the Company;  

(d)(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) procure or facilitate the making of any such offer or attempt described in the preceding clause (i) by any other person, (iii) interfere with the material business relationships of the Company, or entice away any material suppliers or contractors, 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. This restriction in Section 4.2(d)(iv) shall not apply to any investor with which Executive had a preexisting relationship prior to becoming employed by the Company.

(e)(i) enter into employment, consultancy, association or affiliation with any entity that provides Conflicting Services (as defined below) if any former employee of the Company with whom Executive had contact as part of his or her duties with the Company (a “Covered Person”) has become employed by, associated or affiliated with, or a consultant of such entity during the twelve (12) month period preceding Executive’s termination of employment with the Company; or (ii) continue employment, consultancy, association or affiliation with any entity that provides Conflicting Services if any Covered Person becomes employed by, associated or affiliated with, or a consultant to such entity during the twelve (12) month period subsequent to Executive’s termination of employment with the Company.  It is the intention of the parties to prevent the irreparable harm to the Company that would occur from the pooling of information that two or more former Covered Persons can provide to a competing entity or the misuse of Confidential Information.  As used herein, “Conflicting Services” is defined as services that are the same or substantially similar to those services of Company or its affiliates and subsidiaries (x) which were provided by Executive (directly or indirectly) during the twelve (12) months preceding Executive’s termination from employment by Company or (y) about which Executive acquired Confidential Information during Executive’s employment by Company.

4.3Non-Competition Period.  The restrictions on Executive’s activities identified in Section 4.2 hereof will apply for twelve (12) months after the termination of Executive’s employment with the Company, regardless of reason for the termination of such employment.

4.4Representations of Executive.  EXECUTIVE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIS, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF SECTION 4 HEREOF, FOR EXAMPLE, BY USING SUCH KNOWLEDGE, SKILLS AND ABILITIES, OR SOME OF THEM, IN THE SERVICE OF A NON COMPETITOR.

4.5Severable 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

10

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. 

4.6Intellectual Property. Executive agrees to disclose and assign 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 Executive may conceive, invent, author or discover, either solely or jointly with another or other during Executive’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. Executive will, upon request of the Company, either during or at any time after Executive’s employment ends, regardless of how or why Executive’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.

4.7Remedy.  Executive understands and acknowledges that the Company has a legitimate business interest in preventing Executive from taking any actions in violation of this Section 4 and that this Section 4 is intended to protect the business and goodwill of the Company. Executive further acknowledges that a breach of this Section 4 will irreparably and continually damage the Company and that monetary damages alone will be inadequate to compensate the Company for such breach. Executive therefore agrees that in the event Executive violates any of the terms of this Section 4, 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 Section 4 without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond. If Executive does take actions in violation of Section 4 of this Agreement, Executive understands that the time periods set forth in those paragraphs will run from the date on which Executive’s violations of those sections, whether by injunction or otherwise, ends and not from the date that Executive’s employment ends. In the event any lawsuit, claim or other proceeding is brought to enforce the terms of this Section 4, 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 Section 4.

4.8Waiver.Executive understands and agrees that in the event the Company or the Bank waives or allows any breach of this Section 4, such waiver or allowance will not constitute a waiver or allowance of any future breach, whether of a similar or dissimilar nature.

4.9Tolling. If the Company or the Bank files a lawsuit in any court of competent jurisdiction alleging a breach of the non-disclosure or non-solicitation provisions of this Agreement by Executive, then any time period set forth in this Agreement relating to the post-termination restrictions on the activities of Executive 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

11

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. 

5. MISCELLANEOUS.

5.1Governing Law; Dispute Resolution. This Agreement will be governed by and construed in accordance with the laws of the State of Texas excluding that body of law known as conflicts of law. The Parties will endeavor to settle amicably by mutual discussions any disputes or claims related to this Agreement (“Dispute”). Failing such settlement, and excepting such claims as may be brought pursuant to Section 4 hereof in a state or federal court having jurisdiction, any other Dispute will finally be settled by arbitration in accordance with the rules of the American Arbitration Association then applicable to employment-related disputes. The Parties will agree upon a single arbitrator. The Arbitrator will not have authority to award punitive damages to either Party. Each Party will bear its own expenses, but the Bank will bear the fees and expenses of the arbitrator. This Agreement will be enforceable, and any arbitration award will be final. In any such arbitration, the decision in any prior arbitration under this Agreement will not be deemed conclusive of the rights as among themselves of the Parties hereunder. The arbitration will be held in Dallas, Texas. Any notices, including a demand for arbitration will be deemed served when delivered to the address indicated in Section 5.6.

5.2Tax Withholding. All payments and benefits under this Agreement shall be subject to, and made net of, applicable deductions and withholdings.

5.3Non-Payment of Benefits Due to Prohibition under 12 C.F.R. Part 359. Notwithstanding anything in this Agreement to the contrary, the Bank will not be required to pay any benefit under this Agreement if the Bank reasonably determines that the payment of such benefit would be prohibited by 12 C.F.R. Part 359 or any successor regulations regarding employee compensation promulgated by any regulatory agency having jurisdiction over the Bank or its affiliates.

5.4Code Section 409A.

(a)It is the intent of the parties that this Agreement be interpreted and administered in compliance with the requirements of Code section 409A to the extent applicable. In this connection, the Bank will have authority to take any action, or refrain from taking any action, with respect to this Agreement that is reasonably necessary to ensure compliance with Code section 409A (provided that the Bank will choose the action that best preserves the value of the payments and benefits provided to Executive under this Agreement), and the parties agree that this Agreement will be interpreted in a manner that is consistent with Code section 409A.

(b)In furtherance, but not in limitation of the foregoing paragraph (a): (i) in the event that Executive is a “specified employee” within the meaning of Code section 409A, payments which constitute a “deferral of compensation” under Code section 409A and which would otherwise become due during the first six (6) months following Executive’s termination of employment will be delayed and all such delayed payments will be paid in full in the seventh (7^th) month after Executive’s termination of employment, and all subsequent payments will be paid in accordance with their original payment schedule, provided that the above delay will not

12

apply to any payments that are excepted from coverage by Code section 409A, such as those payments covered by the short-term deferral exception described in Treasury Regulations section 1.409A-1(b)(4); (ii) notwithstanding any other provision of this Agreement, a termination of Executive’s employment hereunder will mean, and be interpreted consistent with, a “separation from service” within the meaning of Code section 409A; and (iii) with respect to the reimbursement of fees and expenses provided for herein, the following will apply: (A) unless a specific time period during which such expense reimbursements may be incurred is provided for herein, such time period will be deemed to be Executive’s lifetime; (B) the amount of expenses eligible for reimbursement hereunder in any particular year will not affect the expenses eligible for reimbursement in any other year; (C) the right to reimbursement of expenses will not be subject to liquidation or exchange for any other benefit; and (D) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the calendar year in which the expense was incurred or the tax was remitted, as the case may be.  

(c)If the maximum period within which Executive must sign and not revoke the Release could begin in one calendar year and expire in the following calendar year, then any payments contingent on the occurrence of the Release Effective Date shall be made in such following calendar year (regardless of the year of execution of such release) if payment in such following calendar year is required in order to comply with Section 409A.  If the Release Effective Date has not occurred by the 60^th day following Executive’s termination of employment, Executive will not be entitled to any amounts that are subject to the timely execution of the Release and the occurrence of the Release Effective Date.

5.5Headings. The headings and captions set forth herein are for convenience of reference only and will not affect the construction or interpretation hereof.

5.6Notices. Any notice or other communication required, permitted, or desirable hereunder will be hand delivered (including delivery by a commercial courier service) or sent by United States registered or certified mail, postage prepaid, by facsimile or by electronic mail addressed as follows:

If to the Bank:TBK Bank, SSB

Physical address: 12700 Park Central Drive, Suite 1700 Dallas, Texas 75251

Attn: Chief Executive Officer

If to Executive: Daniel J. Karas

Physical address: 4606 Eaton Court
Plano, TX 75093

or such other addresses as will be furnished in writing by the parties. Any such notice or communication will be deemed to have been given as of the date so delivered in person or three business days after so mailed.

5.7Successors and Assigns. The Bank may assign its rights under this Agreement to any successor to its business (by merger, acquisition of substantially all of the Bank’s assets or

13

otherwise), provided that such successor entity expressly assumes, in a writing reasonably acceptable to Executive, this Agreement and all obligations and undertakings of the Bank hereunder. Executive may not assign his rights or delegate his duties under this Agreement without the prior written consent of the Bank. Executive understands and agrees that this Agreement will be binding upon and inure to the benefit of the Bank and its legal representatives, successors and assigns. Executive also understands and agrees that this Agreement will be binding upon and inure to the benefit of Executive’s heirs and executors or administrators. 

5.8Entire Agreement; Amendments. This Agreement sets forth the entire agreement and understanding of the parties with respect to the subject matter hereof, and there are no other contemporaneous written or oral agreements, undertakings, promises, warranties or covenants not specifically referred to or contained herein. This Agreement specifically supersedes any and all prior agreements and understandings of the parties with respect to the subject matter hereof, all of which prior agreements and understandings (if any) are hereby terminated and of no further force and effect. This Agreement may be amended, modified or terminated only by a written instrument signed by the parties hereto.

5.9Execution of Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (.pdf)) for the convenience of the parties hereto, each of which will be deemed an original, but all of which together will constitute one and the same instrument. No signature page to this Agreement evidencing a party’s execution hereof will be deemed to be delivered by such party to any other party hereto until such delivering party has received signature pages from all parties signatory to this Agreement.

5.10Severability. If any provision, clause or part of this Agreement, or the applications thereof under certain circumstances, is held invalid or unenforceable for any reason, the remainder of this Agreement, or the application of such provision, clause or part under other circumstances, will not be affected thereby.

5.11Action by the Bank.  Any action, consent, approval or waiver to be taken, made or given by the Bank or the Board of Directors of the Bank hereunder may be taken, made or given by the Compensation Committee or such similar committee of the Bank or the Company as may be granted authority to act for the Bank with respect to such matters.

5.12Third Party Beneficiary.  The Company is an intended third-party beneficiary of the terms of this Agreement, including the provisions of Section 4 hereof

5.13Incorporation of Recitals. The Recitals to this Agreement are an integral part of, and by this reference are hereby incorporated into, this Agreement.

6. DEFINITIONS.

6.1Average Bonus. “Average Bonus” shall mean the average of the annual cash bonuses earned (regardless of when paid) by Executive during the three fiscal years immediately preceding the fiscal year in which Executive terminated employment; provided, however, if Executive was not eligible to participate in the Bank’s or the Company’s annual cash bonus program (either due to the fact Executive was not an employee of the Bank or the Company during such fiscal year or any other reason) during each such fiscal year, then Average Bonus shall mean

14

the average of the annual cash bonuses earned (regardless of when paid) by Executive during the fiscal years that Executive was a participant in the Bank’s or the Company’s annual cash bonus program. 

6.2Cause. “Cause” shall mean the Bank’s determination in good faith that Executive: (i) has misappropriated, stolen or embezzled funds or property from the Bank, or the Company, or any of their respective affiliates, or secured or attempted to secure personally any profit in connection with any transaction entered into on behalf of the Bank, or the Company or any of their respective affiliates, (ii) has been indicted or arrested on a felony, (iii) has neglected his duties hereunder, (iv) has materially violated a provision of Section 4 hereof, (v) has willfully violated or breached any material provision of this Agreement in any material respect or violated any material law or regulation or (vi) any other misconduct by Executive that is injurious to the financial condition or business reputation of the Bank, or the Company, or any of their respective affiliates.

6.3Change in Control. A “Change in Control” shall mean the first to occur:

(a)A direct or indirect acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (a “Person”) of beneficial ownership of shares of Company common stock which, together with other direct or indirect acquisitions or beneficial ownership by such Person, results in aggregate beneficial ownership by such Person of more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the Company (the “Outstanding Company Voting Securities”); excluding, however, the following:

(i)any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from Company,

(ii)any acquisition by the Company or a wholly owned subsidiary,

(iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company any entity controlled by the Company, or

(iv) any acquisition by any entity pursuant to a transaction which complies with Section 6 .3(c)(i), (ii) or (iii); or

(b)A change in the composition of the Board of the Company over a 12-month period such that the individuals who, as of the date of the beginning of the period (the “Effective Incumbency Date”), constitute the Board of the Company (the “Incumbent Board”) cease for any reason to constitute a majority of the Board of the Company; provided, however, that any individual who becomes a member of the Board of the Company subsequent to the Effective Incumbency Date, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of a majority of those individuals then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of the Company shall not be so considered as a member of the Incumbent Board; or

15

(c)The consummation of a Corporate Transaction; excluding, however, such a Corporate Transaction pursuant to which: 

(i)all or substantially all of the individuals and entities who are the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the surviving or acquiring entity resulting from such Corporate Transaction or a direct or indirect parent entity of the surviving or acquiring entity (including, without limitation, an entity which as a result of such transaction owns all or substantially all of Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions (as compared to each other) as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Voting Securities,

(ii)no Person (other than the Company, any wholly owned subsidiary, any employee benefit plan (or related trust) sponsored or maintained by the Company, any entity controlled by the Company, such surviving or acquiring entity resulting from such Corporate Transaction or any entity controlled by such surviving or acquiring entity or a direct or indirect parent entity of the surviving or acquiring entity that, after giving effect to the Corporate Transaction, beneficially owns, directly or indirectly, 100% of the outstanding voting securities of the surviving or acquiring entity) will beneficially own, directly or indirectly, thirty percent (30%) or more of the outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Corporate Transaction or

(iii)individuals who were members of the Incumbent Board will constitute a majority of the members of the board of directors (or similar governing body) of the surviving or acquiring entity resulting from such Corporate Transaction or a direct or indirect parent entity of the surviving or acquiring entity.

6.4Corporate Transaction. “Corporate Transaction” shall mean a

(a)dissolution or liquidation of the Company,

(b)sale of all or substantially all of the assets of the Company,

(c)merger or consolidation of the Company with or into any other corporation, regardless of whether Company is the surviving corporation or

(d)statutory share exchange involving capital stock of the Company.

6.5Good 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 Executive’s base salary as in effect immediately prior to Executive’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 Bank’s executive officers;   or

16

(ii)a material reduction in Executive’s target annual bonus opportunity as in effect immediately prior to Executive’s Good Reason Notice of Termination unless such reduction is made in accordance with a uniform reduction in target annual bonus opportunity of the Bank’s executive officers. 

(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 Executive’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 Executive’s base salary opportunity as in effect immediately prior to the Change in Control;

(iii)a material reduction in Executive’s target annual bonus opportunity as in effect immediately prior to the Change in Control;

(iv)receipt of notice by Executive with regard to the mandatory relocation of the office at which Executive is to perform the majority of his duties following the Change in Control to a location more than 50 miles from the location at which Executive performed such duties prior to the Change in Control; provided that such new location is farther from Executive’s residence than the prior location; or

(v)the failure at any time of a successor to the Bank explicitly to assume and agree to be bound by this Agreement.

(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)Executive provides the Bank thirty (30) day advance written notice of his 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 Executive’s first actual knowledge of such act, omission or event;

(iii)the Bank fails to cure such act, omission or event within the thirty (30) day period after receiving the Good Reason Notice of Termination; and

(iv)Executive’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.

6.6Qualifying Termination. A “Qualifying Termination” shall mean (i) Executive’s involuntary termination of employment without Cause or (ii) Executive’s voluntary termination for Good Reason.

17

6.7Standard Termination Payments. “Standard Termination Payments” shall mean earned and unpaid salary through the date of Executive’s termination of employment, any bonus definitively earned by Executive but not yet paid to Executive, additional salary in lieu of Executive’s accrued and unused vacation (to the extent such is paid in accordance with the Company’s policies for its executives generally), any unreimbursed business and entertainment expenses, each  in accordance with the Bank’s or the Company’s policies, and any unreimbursed employee benefit expenses that are reimbursable in accordance with the Bank’s or the Company’s employee benefit plans through the date of Executive’s termination of employment. For the avoidance of doubt, the Standard Termination Payments do not include any unvested portion of any annual or long-term incentive compensation or bonus.  

6.8Total Disability. “Total Disability” shall mean the inability of Executive, due to a physical or a mental condition, to perform the essential functions of Executive’s job, with or without accommodation, for any period of 180 consecutive days; provided that the return of Executive to his duties for periods of 15 days or less will not interrupt such 180-day period.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

18

IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement as of the day and year first above written.

TBK BANK, SSB

By:__/s/Aaron P. Graft______

Name:Aaron P. Graft

Title:Chief Executive Officer

EXECUTIVE: DANIEL J. KARAS

______/s/ Daniel J. Karas__________

19

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Aaron P. Graft, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Triumph Bancorp, 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.

August 3, 2016

By:	/s/ Aaron P. Graft
	Name:	Aaron P. Graft
	Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, R. Bryce Fowler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Triumph Bancorp, 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.

August 3, 2016

By:	/s/ R. Bryce Fowler
	Name:	R. Bryce Fowler
	Title:	Executive Vice President and Chief Financial Officer

EX-32.1

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 Bancorp, 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, 2016, as filed with the Securities and Exchange Commission on August 3, 2016, (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:	August 3, 2016

By:	/s/ R. Bryce Fowler
	Name:	R. Bryce Fowler
	Title:	Executive Vice President and Chief Financial Officer
	Date:	August 3, 2016

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.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 01, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	TBK
Entity Registrant Name	TRIUMPH BANCORP, INC.
Entity Central Index Key	0001539638
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		18,107,493

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 22,567	$ 23,447
Interest bearing deposits with other banks	39,183	81,830
Total cash and cash equivalents	61,750	105,277
Securities - available for sale	159,790	163,169
Securities - held to maturity, fair value of $28,362 and $0, respectively	27,502
Loans held for sale, at fair value		1,341
Loans, net of allowance for loan and lease losses of $13,772 and $12,567, respectively	1,396,746	1,279,318
Federal Home Loan Bank stock, at cost	6,368	3,818
Premises and equipment, net	19,629	22,227
Other real estate owned, net	6,074	5,177
Goodwill	15,968	15,968
Intangible assets, net	10,192	11,886
Bank-owned life insurance	29,786	29,535
Deferred tax assets, net	15,042	15,945
Other assets	34,548	37,652
Total assets	1,783,395	1,691,313
Liabilities
Noninterest bearing	170,834	168,264
Interest bearing	1,104,320	1,080,686
Total deposits	1,275,154	1,248,950
Customer repurchase agreements	13,635	9,317
Federal Home Loan Bank advances	180,500	130,000
Junior subordinated debentures	24,823	24,687
Other liabilities	9,520	10,321
Total liabilities	1,503,632	1,423,275
Commitments and contingencies - See Note 8 and Note 9
Stockholders' equity - See Note 12
Common stock	182	181
Additional paid-in-capital	195,711	194,297
Treasury stock, at cost	(741)	(560)
Retained earnings	73,340	64,097
Accumulated other comprehensive income	1,525	277
Total stockholders’ equity	279,763	268,038
Total liabilities and stockholders' equity	1,783,395	1,691,313
Preferred Class A
Stockholders' equity - See Note 12
Preferred Stock	4,550	4,550
Preferred Class B
Stockholders' equity - See Note 12
Preferred Stock	$ 5,196	$ 5,196

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Securities - Held to maturity, Fair value	$ 28,362		$ 0
Allowance for loan and lease losses	$ 13,772	$ 12,093	$ 12,567	$ 11,462	$ 9,286	$ 8,843

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest and dividend income:
Loans, including fees	$ 18,547	$ 17,158	$ 34,635	$ 30,397
Factored receivables, including fees	8,639	8,654	16,461	16,163
Taxable securities	965	659	1,733	1,337
Tax exempt securities	6	16	13	28
Cash deposits	197	110	405	251
Total interest income	28,354	26,597	53,247	48,176
Interest expense:
Deposits	2,020	1,667	4,013	3,237
Junior subordinated debentures	312	278	614	550
Other borrowings	115	7	224	19
Total interest expense	2,447	1,952	4,851	3,806
Net interest income	25,907	24,645	48,396	44,370
Provision for loan losses	1,939	2,541	1,428	3,186
Net interest income after provision for loan losses	23,968	22,104	46,968	41,184
Noninterest income:
Service charges on deposits	695	666	1,354	1,278
Card income	577	578	1,123	1,101
Net OREO gains (losses) and valuation adjustments	(1,204)	52	(1,215)	78
Net gains on sale of securities		242	5	242
Net gains on sale of loans	4	491	16	1,033
Fee income	504	502	1,038	924
Bargain purchase gain				12,509
Asset management fees	1,605	1,274	3,234	2,232
Other	1,487	964	3,094	2,031
Total noninterest income	3,668	4,769	8,649	21,428
Noninterest expense:
Salaries and employee benefits	12,229	12,042	24,481	25,311
Occupancy, furniture and equipment	1,534	1,555	3,027	3,127
FDIC insurance and other regulatory assessments	281	271	505	534
Professional fees	1,101	852	2,174	2,179
Amortization of intangible assets	717	895	1,694	1,659
Advertising and promotion	628	526	1,147	1,069
Communications and technology	1,263	927	2,695	1,813
Other	2,578	2,567	4,686	4,726
Total noninterest expense	20,331	19,635	40,409	40,418
Net income before income tax	7,305	7,238	15,208	22,194
Income tax expense	2,679	2,586	5,576	3,498
Net income	4,626	4,652	9,632	18,696
Dividends on preferred stock	(195)	(195)	(389)	(387)
Net income available to common stockholders	$ 4,431	$ 4,457	$ 9,243	$ 18,309
Earnings per common share
Basic	$ 0.25	$ 0.25	$ 0.52	$ 1.03
Diluted	$ 0.25	$ 0.25	$ 0.51	$ 1.01

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 4,626	$ 4,652	$ 9,632	$ 18,696
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period	536	(557)	1,993	431
Reclassification of amount realized through sale of securities		(242)	(5)	(242)
Tax effect	(199)	292	(740)	(76)
Total other comprehensive income (loss)	337	(507)	1,248	113
Comprehensive income	$ 4,963	$ 4,145	$ 10,880	$ 18,809

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in-Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income	Preferred Stock - Series A	Preferred Stock - Series B	Series A Preferred Dividends	Series A Preferred Dividends Retained Earnings	Series B Preferred Dividends	Series B Preferred Dividends Retained Earnings
Beginning Balance at Dec. 31, 2014	$ 237,509	$ 180	$ 191,049	$ (161)	$ 35,744	$ 951	$ 4,550	$ 5,196
Beginning Balance (in shares) at Dec. 31, 2014		17,963,783		10,984			45,500	51,956
Issuance of restricted stock awards		$ 1	(1)
Issuance of restricted stock awards (in shares)		77,956
Forfeiture of restricted stock awards			9	$ (9)
Forfeiture of restricted stock awards (in shares)		(667)		667
Stock based compensation	1,548		1,548
Preferred dividends									$ (181)	$ (181)	$ (206)	$ (206)
Net income	18,696				18,696
Other comprehensive income	113					113
Ending Balance at Jun. 30, 2015	257,479	$ 181	192,605	$ (170)	54,053	1,064	$ 4,550	$ 5,196
Ending Balance (in shares) at Jun. 30, 2015		18,041,072		11,651			45,500	51,956
Beginning Balance at Dec. 31, 2015	268,038	$ 181	194,297	$ (560)	64,097	277	$ 4,550	$ 5,196
Beginning Balance (in shares) at Dec. 31, 2015		18,018,200		34,523			45,500	51,956
Issuance of restricted stock awards		$ 1	(1)
Issuance of restricted stock awards (in shares)		101,105
Forfeiture of restricted stock awards			101	$ (101)
Forfeiture of restricted stock awards (in shares)		(6,759)		6,759
Excess tax benefit on restricted stock vested	35		35
Stock based compensation	1,279		1,279
Purchase of treasury stock	(80)			$ (80)
Purchase of treasury stock (in shares)		(5,053)		5,053
Preferred dividends									$ (182)	$ (182)	$ (207)	$ (207)
Net income	9,632				9,632
Other comprehensive income	1,248					1,248
Ending Balance at Jun. 30, 2016	$ 279,763	$ 182	$ 195,711	$ (741)	$ 73,340	$ 1,525	$ 4,550	$ 5,196
Ending Balance (in shares) at Jun. 30, 2016		18,107,493		46,335			45,500	51,956

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 9,632	$ 18,696
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	1,162	1,069
Net accretion on loans and deposits	(3,453)	(2,720)
Amortization of junior subordinated debentures	136	130
Net amortization on securities	326	301
Amortization of intangible assets	1,694	1,659
Deferred taxes	(135)	(366)
Provision for loan losses	1,428	3,186
Stock based compensation	1,279	1,548
Origination of loans held for sale	(891)	(36,220)
Proceeds from loan sales	2,248	36,445
Net gains on sale of securities	(5)	(242)
Net loss on transfer of loans to loans held for sale	81
Net gains on sale of loans	(16)	(1,033)
Net OREO (gains) losses and valuation adjustments	1,215	(78)
Bargain purchase gain		(12,509)
Income from CLO warehouse investments	(1,758)	(1,151)
(Increase) decrease in other assets	944	608
Increase (decrease) in other liabilities	(801)	3,888
Net cash provided by (used in) operating activities	13,086	13,211
Cash flows from investing activities:
Purchases of securities available for sale	(3,264)	(15,072)
Proceeds from sales of securities available for sale	4,345	12,559
Proceeds from maturities, calls, and pay downs of securities available for sale	3,872	5,973
Purchases of securities held to maturity	(27,409)
Purchases of loans (shared national credits)	(995)	(16,685)
Proceeds from sales of loans (shared national credits)	4,038
Net change in loans	(119,071)	(115,935)
Purchases of premises and equipment, net	(779)	(813)
Net proceeds from sale of OREO	528	2,926
Net cash paid for CLO warehouse investments	(10,000)
Net proceeds from CLO warehouse investments	14,000	2,450
Purchases of FHLB and FRB stock, net	(2,550)	(804)
Cash paid for acquisitions, net of cash acquired		(127,591)
Proceeds from sale of loans obtained through Doral Money Inc. acquisition		36,765
Net cash provided by (used in) investing activities	(137,285)	(216,227)
Cash flows from financing activities:
Net increase in deposits	26,323	24,184
Increase (decrease) in customer repurchase agreements	4,318	3,729
Increase (decrease) in Federal Home Loan Bank advances	50,500	16,000
Proceeds from the issuance of other borrowings		99,975
Repayment of other borrowings		(1,659)
Purchase of treasury stock	(80)
Dividends on preferred stock	(389)	(387)
Net cash provided by (used in) financing activities	80,672	141,842
Net increase (decrease) in cash and cash equivalents	(43,527)	(61,174)
Cash and cash equivalents at beginning of period	105,277	160,888
Cash and cash equivalents at end of period	61,750	99,714
Supplemental cash flow information:
Interest paid	4,717	3,629
Income taxes paid, net	6,018	2,488
Supplemental noncash disclosures:
Loans transferred to OREO	425	747
Premises transferred to OREO	2,215
Securities transferred in satisfaction of other borrowings		98,316
Loan purchases, not yet settled (shared national credits)		$ 12,929
Loans transferred to loans held for sale at fair value	$ 4,038

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Triumph Bancorp, Inc. (collectively with its subsidiaries, “Triumph”, or the “Company” as applicable) is a financial holding company headquartered in Dallas, Texas. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Triumph Capital Advisors, LLC (“TCA”), Triumph CRA Holdings, LLC (“TCRA”), TBK Bank, SSB (“TBK Bank”), TBK Bank’s wholly owned subsidiary Advance Business Capital LLC, which currently operates under the d/b/a of Triumph Business Capital (“TBC”), and TBK Bank’s wholly owned subsidiary Triumph Insurance Group, Inc. (“TIG”).

TBK Bank does business under the following names:  (i) Triumph Community Bank (“TCB”) and Triumph Savings Bank (“TSB”) with respect to its community banking business in respective markets; (ii) Triumph Commercial Finance (“TCF”) with respect to its asset-based lending, equipment lending and general factoring commercial finance products; (iii) Triumph Healthcare Finance (“THF”) with respect to its healthcare asset-based lending business; and (iv) Triumph Premium Finance (“TPF”) with respect to its insurance premium financing business.

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. 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. 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, 2015. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The Company has four reportable segments consisting of Factoring, Banking, Asset Management, and Corporate. The Company’s Chief Executive Officer uses segment results to make operating and strategic decisions.  

Newly Issued, But Not Yet Effective Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard was originally effective for the Company on January 1, 2017.  However, in August 2015 the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date” which deferred the mandatory effective date the new standard would take effect to reporting periods beginning after December 15, 2017, with early adoption allowed as of the original effective date for public companies. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the effect that ASU 2016-01 will have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued this ASU to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under current U.S. GAAP and disclosing key information about leasing arrangements. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early application of this ASU is permitted for all entities. The Company is currently assessing the impact that the adoption of this standard will have on the financial condition and results of operations of the Company.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”).  The FASB issued this ASU to improve the accounting for share-based payments.  ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions, including:  the presentation of income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and calculation of diluted earnings per share.  The amendments in this ASU are effective for fiscal years beginning after December 31, 2016, and interim periods within those years for public business entities.  Early adoption is permitted in any interim or annual period provided that the entire ASU is adopted.  Adoption of ASU 2016-09 is not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 31, 2019, and interim periods within those years for public business entities that are SEC filers.  Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018.  The Company is currently assessing the impact that the adoption of this standard will have on the financial condition and results of operations of the Company.

XML

Business Combinations

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Business Combinations

NOTE 2 – Business combinations

ColoEast Bankshares, Inc.

On August 1, 2016, the Company acquired 100% of the outstanding common stock of ColoEast Bankshares, Inc. (“ColoEast”) and its community banking subsidiary, Colorado East Bank & Trust, in an all-cash transaction for $70,000,000. Colorado East Bank & Trust, which was merged into TBK Bank upon closing, offers personal checking, savings, CD, money market, HSA, IRA, NOW and business accounts, as well as consumer, commercial and mortgage loans from 18 branches and one loan production office located throughout Colorado and far western Kansas. The acquisition expands the Company’s market into Colorado and further diversifies the Company’s loan, customer, and deposit base.

The initial accounting for the ColoEast acquisition has not been completed because the fair value of loans, deposits, and numerous other items has not yet been determined.

Doral Money Acquisition

On February 27, 2015, the Company entered into a Purchase and Sale Agreement with the Federal Deposit Insurance Corporation (“FDIC”), in its capacity as receiver of Doral Bank, to acquire 100% of the equity of Doral Money, Inc. (“Doral Money”), a subsidiary of Doral Bank, and the management contracts associated with two active collateralized loan obligations (“CLOs”) with approximately $700,000,000 in assets under management. The consideration transferred in the acquisition consisted of cash paid of $135,864,000. The primary purpose of the acquisition was to expand the CLO assets under management at TCA.

On February 26, 2015, the Company entered into a $99,975,000 secured term loan credit facility payable to a third party, with an interest rate equal to LIBOR plus 3.5%, and a maturity date of March 31, 2015.  The proceeds from the loan were used by the Company to partially fund the Doral Money acquisition.

The acquisition was completed on March 3, 2015, at which time the Company also repaid the $99,975,000 third party secured term loan credit facility in full by delivering the securities issued by the CLOs that were acquired from Doral Money with an acquisition date fair value of $98,316,000 and cash representing payments received on the CLO securities in the amount of $1,659,000.

A summary of the fair values of assets acquired, liabilities assumed, net consideration transferred, and the resulting bargain purchase gain is as follows:

	Initial Values			Measurement
	Recorded at			Period			Adjusted
(Dollars in thousands)	Acquisition Date			Adjustments			Values
Assets acquired:
Cash	$	8,273		$	—		$	8,273
CLO Securities		98,316			—			98,316
Intangible asset - CLO management contracts		1,918			—			1,918
Loans		36,765			900			37,665
Prepaid corporate income tax		3,014			1,688			4,702
Other assets		772			—			772
		149,058			2,588			151,646
Liabilities assumed:
Deferred tax liability		663			—			663
Other liabilities		22			(20	)		2
		685			(20	)		665
Fair value of net assets acquired		148,373			2,608			150,981
Net consideration transferred		135,864			—			135,864
Bargain purchase gain	$	(12,509	)	$	(2,608	)	$	(15,117	)

The Company completed the acquisition via an FDIC bid process for Doral Money as part of the Doral Bank failure and the resulting nontaxable bargain purchase gain represents the excess of the fair value of the net assets acquired over the fair value of the net consideration transferred.  The Company subsequently recorded measurement period adjustments related to the finalization of income taxes associated with the transaction and the valuation of loans acquired in the transaction, which increased the bargain purchase gain by $1,708,000 and $900,000 during the three months ended September 30, 2015 and the three months ended December 31, 2015, respectively.  

XML

Securities

6 Months Ended

Jun. 30, 2016

Investments Debt And Equity Securities [Abstract]

Securities

NOTE 3 - SECURITIES

Securities have been classified in the financial statements as available for sale or held to maturity. The amortized cost of securities and their approximate fair values at June 30, 2016 and December 31, 2015 are as follows:

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
June 30, 2016	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,388	$	1,749	$	—		$	92,137
Mortgage-backed securities, residential		25,004		623		—			25,627
Asset backed securities		13,179		12		(335	)		12,856
State and municipal		1,266		36		—			1,302
Corporate bonds		27,358		351		(11	)		27,698
SBA pooled securities		168		2		—			170
Total available for sale securities	$	157,363	$	2,773	$	(346	)	$	159,790
			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
	Cost		Gains		Losses			Value
Held to maturity securities:
CLO securities	$	27,502	$	860	$	—		$	28,362

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,533	$	518	$	(17	)	$	91,034
Mortgage-backed securities, residential		28,006		361		(27	)		28,340
Asset backed securities		17,957		24		(455	)		17,526
State and municipal		1,509		17		—			1,526
Corporate bonds		24,542		74		(57	)		24,559
SBA pooled securities		183		1		—			184
Total available for sale securities	$	162,730	$	995	$	(556	)	$	163,169

The amortized cost and estimated fair value of securities at June 30, 2016, 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
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	31,040	$	31,136	$	—	$	—
Due from one year to five years		86,162		88,132		—		—
Due from five years to ten years		1,534		1,538		—		—
Due after ten years		276		331		27,502		28,362
		119,012		121,137		27,502		28,362
Mortgage-backed securities, residential		25,004		25,627		—		—
Asset backed securities		13,179		12,856		—		—
SBA pooled securities		168		170		—		—
	$	157,363	$	159,790	$	27,502	$	28,362

For the six months ended June 30, 2016, securities were sold resulting in proceeds of $4,345,000, gross gains of $5,000, and no losses. There were no sales of securities during the three months ended June 30, 2016. For the three and six months ended June 30, 2015, securities were sold resulting in proceeds of $12,559,000, gross gains of $242,000, and no losses.

Securities with a carrying amount of approximately $98,969,000 and $100,034,000 at June 30, 2016 and December 31, 2015, respectively, were pledged to secure customer repurchase agreements, Federal Home Loan Bank advances, and for other purposes required or permitted by law.

Information pertaining to securities with gross unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2016	Value		Losses			Value		Losses			Value		Losses
Available for sale securities:
U.S. Government agency obligations	$	—	$	—		$	—	$	—		$	—	$	—
Mortgage-backed securities, residential		—		—			—		—			—		—
Asset backed securities		7,947		(335	)		—		—			7,947		(335	)
State and municipal		—		—			—		—			—		—
Corporate bonds		1,395		(11	)		—		—			1,395		(11	)
SBA pooled securities		—		—			—		—			—		—
	$	9,342	$	(346	)	$	—	$	—		$	9,342	$	(346	)
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Government agency obligations	$	10,029	$	(17	)	$	—	$	—		$	10,029	$	(17	)
Mortgage-backed securities, residential		4,948		(27	)		—		—			4,948		(27	)
Asset backed securities		8,031		(416	)		4,605		(39	)		12,636		(455	)
State and municipal		—		—			—		—			—		—
Corporate bonds		10,434		(57	)		—		—			10,434		(57	)
SBA pooled securities		—		—			—		—			—		—
	$	33,442	$	(517	)	$	4,605	$	(39	)	$	38,047	$	(556	)

Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been 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.

As of June 30, 2016, management does not have the intent to sell any of the securities classified as available for sale with unrealized losses in the table above 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 bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe that any of the securities are impaired due to reasons of credit quality. Accordingly, as of June 30, 2016, management believes that the unrealized losses detailed in the previous table are temporary and no other than temporary impairment loss has been recognized in the Company’s consolidated statements of income.

XML

Loans and Allowance for Loan and Lease Losses

6 Months Ended

Jun. 30, 2016

Loans And Leases Receivable Disclosure [Abstract]

Loans and Allowance for Loan and Lease Losses

NOTE 4 - LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES

Loans at June 30, 2016 and December 31, 2015 consisted of the following:

	June 30,			December 31,
(Dollars in thousands)	2016			2015
Commercial real estate	$	298,991		$	291,819
Construction, land development, land		36,498			43,876
1-4 family residential properties		74,121			78,244
Farmland		35,795			33,573
Commercial		574,508			495,356
Factored receivables		237,520			215,088
Consumer		17,339			13,050
Mortgage warehouse		135,746			120,879
Total		1,410,518			1,291,885
Allowance for loan and lease losses		(13,772	)		(12,567	)
	$	1,396,746		$	1,279,318

Total loans include net deferred origination and factoring fees totaling $1,114,096 and $1,218,000 at June 30, 2016 and December 31, 2015, respectively.

Loans with carrying amounts of $290,975,000 and $280,289,000 at June 30, 2016 and December 31, 2015, respectively, were pledged to secure Federal Home Loan Bank borrowing capacity.

During the three and six months ended June 30, 2016, loans with a carrying amount of $1,238,000 and $4,119,000, respectively, were transferred to loans held for sale at their fair value of $1,233,000 and $4,038,000, respectively, as the Company made the decision to sell the loans. The declines in fair value of $5,000 and $81,000 for the three and six months ended June 30, 2016, respectively, were recorded as a reduction in other noninterest income in the consolidated statements of income. During the three months ended June 30, 2016, these loans were sold resulting in proceeds equal to their fair values at the time of transfer. No loan transfers were recorded during the six months ended June 30, 2015.

Allowance for Loan and Lease Losses    

The activity in the allowance for loan and lease losses (“ALLL”) during the three and six months ended June 30, 2016 and 2015 is as follows:

(Dollars in thousands)	Beginning										Ending
Three months ended June 30, 2016	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,619	$	161		$	(1	)	$	13	$	1,792
Construction, land development, land		198		(17	)		—			—		181
1-4 family residential properties		285		(50	)		(47	)		71		259
Farmland		133		10			—			—		143
Commercial		5,331		1,134			(169	)		401		6,697
Factored receivables		4,110		524			(450	)		20		4,204
Consumer		222		169			(112	)		14		293
Mortgage warehouse		195		8			—			—		203
	$	12,093	$	1,939		$	(779	)	$	519	$	13,772
(Dollars in thousands)	Beginning										Ending
Three months ended June 30, 2015	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,075	$	183		$	(54	)	$	10	$	1,214
Construction, land development, land		344		2			—			—		346
1-4 family residential properties		223		29			(78	)		77		251
Farmland		26		2			—			—		28
Commercial		3,996		1,109			(45	)		4		5,064
Factored receivables		3,380		1,049			(312	)		18		4,135
Consumer		84		61			(52	)		67		160
Mortgage warehouse		158		106			—			—		264
	$	9,286	$	2,541		$	(541	)	$	176	$	11,462

(Dollars in thousands)	Beginning										Ending
Six months ended June 30, 2016	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,489	$	290		$	(1	)	$	14	$	1,792
Construction, land development, land		367		(186	)		—			—		181
1-4 family residential properties		274		(28	)		(63	)		76		259
Farmland		134		9			—			—		143
Commercial		5,276		1,159			(169	)		431		6,697
Factored receivables		4,509		84			(458	)		69		4,204
Consumer		216		199			(155	)		33		293
Mortgage warehouse		302		(99	)		—			—		203
	$	12,567	$	1,428		$	(846	)	$	623	$	13,772
(Dollars in thousands)	Beginning										Ending
Six months ended June 30, 2015	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	533	$	773		$	(143	)	$	51	$	1,214
Construction, land development, land		333		13			—			—		346
1-4 family residential properties		215		119			(183	)		100		251
Farmland		19		9			—			—		28
Commercial		4,003		1,102			(47	)		6		5,064
Factored receivables		3,462		1,004			(379	)		48		4,135
Consumer		140		40			(147	)		127		160
Mortgage warehouse		138		126			—			—		264
	$	8,843	$	3,186		$	(899	)	$	332	$	11,462

The following table presents loans individually and collectively evaluated for impairment, as well as purchased credit impaired (“PCI”) loans, and their respective ALLL allocations:

(Dollars in thousands)	Loan Evaluation								ALLL Allocations
June 30, 2016	Individually		Collectively		PCI		Total loans		Individually		Collectively		PCI		Total ALLL
Commercial real estate	$	687	$	294,583	$	3,721	$	298,991	$	100	$	1,251	$	441	$	1,792
Construction, land development, land		275		35,121		1,102		36,498		25		156		—		181
1-4 family residential properties		920		70,489		2,712		74,121		1		258		—		259
Farmland		—		35,795		—		35,795		—		143		—		143
Commercial		13,270		558,299		2,939		574,508		2,047		4,650		—		6,697
Factored receivables		3,207		234,313		—		237,520		1,315		2,889		—		4,204
Consumer		34		17,305		—		17,339		—		293		—		293
Mortgage warehouse		—		135,746		—		135,746		—		203		—		203
	$	18,393	$	1,381,651	$	10,474	$	1,410,518	$	3,488	$	9,843	$	441	$	13,772
(Dollars in thousands)	Loan Evaluation								ALLL Allocations
December 31, 2015	Individually		Collectively		PCI		Total loans		Individually		Collectively		PCI		Total ALLL
Commercial real estate	$	724	$	286,006	$	5,089	$	291,819	$	100	$	1,034	$	355	$	1,489
Construction, land development, land		—		42,499		1,377		43,876		—		367		—		367
1-4 family residential properties		618		74,714		2,912		78,244		1		273		—		274
Farmland		—		33,573		—		33,573		—		134		—		134
Commercial		7,916		483,587		3,853		495,356		796		4,480		—		5,276
Factored receivables		3,422		211,666		—		215,088		1,694		2,815		—		4,509
Consumer		—		13,050		—		13,050		—		216		—		216
Mortgage warehouse		—		120,879		—		120,879		—		302		—		302
	$	12,680	$	1,265,974	$	13,231	$	1,291,885	$	2,591	$	9,621	$	355	$	12,567

The following is a summary of information pertaining to impaired loans. Loans included in these tables are non-PCI impaired loans and PCI loans that have deteriorated subsequent to acquisition and as a result have been deemed impaired and an allowance recorded. PCI loans that have not deteriorated subsequent to acquisition are not considered impaired and therefore do not require an allowance and are excluded from these tables.

	Impaired Loans and Purchased Credit						Impaired Loans
	Impaired Loans With a Valuation Allowance						Without a Valuation Allowance
(Dollars in thousands)	Recorded		Unpaid		Related		Recorded		Unpaid
June 30, 2016	Investment		Principal		Allowance		Investment		Principal
Commercial real estate	$	517	$	517	$	100	$	170	$	206
Construction, land development, land		275		275		25		—		—
1-4 family residential properties		10		19		1		910		1,031
Farmland		—		—		—		—		—
Commercial		7,164		7,191		2,047		6,106		6,115
Factored receivables		1,980		1,980		1,315		1,227		1,227
Consumer		—		—		—		34		34
Mortgage warehouse		—		—		—		—		—
PCI		1,442		1,679		441		—		—
	$	11,388	$	11,661	$	3,929	$	8,447	$	8,613
	Impaired Loans and Purchased Credit						Impaired Loans
	Impaired Loans With a Valuation Allowance						Without a Valuation Allowance
(Dollars in thousands)	Recorded		Unpaid		Related		Recorded		Unpaid
December 31, 2015	Investment		Principal		Allowance		Investment		Principal
Commercial real estate	$	531	$	532	$	100	$	193	$	229
Construction, land development, land		—		—		—		—		—
1-4 family residential properties		14		21		1		604		793
Farmland		—		—		—		—		—
Commercial		1,491		1,520		796		6,425		6,433
Factored receivables		2,850		2,850		1,694		572		572
Consumer		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
PCI		525		525		355		—		—
	$	5,411	$	5,448	$	2,946	$	7,794	$	8,027

The following table presents average impaired loans and interest recognized on impaired loans for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended				Three Months Ended
	June 30, 2016				June 30, 2015
	Average		Interest		Average		Interest
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate	$	702	$	—	$	1,926	$	1
Construction, land development, land		138		—		—		—
1-4 family residential properties		779		—		433		9
Farmland		—		—		—		—
Commercial		12,769		73		4,833		80
Factored receivables		4,074		—		1,957		—
Consumer		35		—		—		—
Mortgage warehouse		—		—		—		—
PCI		1,432		—		721		—
	$	19,929	$	73	$	9,870	$	90
	Six Months Ended				Six Months Ended
	June 30, 2016				June 30, 2015
	Average		Interest		Average		Interest
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate	$	706	$	—	$	1,928	$	4
Construction, land development, land		138		2		—		—
1-4 family residential properties		775		4		647		32
Farmland		—		—		—		—
Commercial		10,593		247		4,992		119
Factored receivables		3,309		—		1,958		—
Consumer		16		—		—		—
Mortgage warehouse		—		—		—		—
PCI		983		—		263		—
	$	16,520	$	253	$	9,788	$	155

The following table presents the unpaid principal and recorded investment for loans at June 30, 2016 and December 31, 2015. The difference between the unpaid principal balance and recorded investment is principally associated with (1) premiums and discounts associated with acquisition date fair value adjustments on acquired loans (both PCI and non-PCI), (2) net deferred origination costs and fees, and (3) previous charge-offs.

(Dollars in thousands)	Recorded		Unpaid
June 30, 2016	Investment		Principal		Difference
Commercial real estate	$	298,991	$	301,586	$	(2,595	)
Construction, land development, land		36,498		37,972		(1,474	)
1-4 family residential properties		74,121		76,456		(2,335	)
Farmland		35,795		35,741		54
Commercial		574,508		575,213		(705	)
Factored receivables		237,520		238,660		(1,140	)
Consumer		17,339		17,321		18
Mortgage warehouse		135,746		135,746		—
	$	1,410,518	$	1,418,695	$	(8,177	)
	Recorded		Unpaid
December 31, 2015	Investment		Principal		Difference
Commercial	$	291,819	$	299,272	$	(7,453	)
Construction, land development, land		43,876		45,376		(1,500	)
1-4 family residential properties		78,244		81,141		(2,897	)
Farmland		33,573		33,533		40
Commercial		495,356		496,719		(1,363	)
Factored receivables		215,088		216,201		(1,113	)
Consumer		13,050		13,072		(22	)
Mortgage warehouse		120,879		120,879		—
	$	1,291,885	$	1,306,193	$	(14,308	)

At June 30, 2016 and December 31, 2015, the Company had $23,854,000 and $21,188,000, 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.

Past Due and Nonaccrual Loans

The following is a summary of contractually past due and nonaccrual loans at June 30, 2016 and December 31, 2015:

			Past Due 90
(Dollars in thousands)	30-89 Days		Days or More
June 30, 2016	Past Due		Still Accruing		Nonaccrual		Total
Commercial real estate	$	—	$	—	$	687	$	687
Construction, land development, land		—		—		275		275
1-4 family residential properties		320		—		949		1,269
Farmland		—		—		—		—
Commercial		6,377		174		8,666		15,217
Factored receivables		12,703		2,260		—		14,963
Consumer		375		—		34		409
Mortgage warehouse		—		—		—		—
PCI		102		786		5,771		6,659
	$	19,877	$	3,220	$	16,382	$	39,479
			Past Due 90
(Dollars in thousands)	30-89 Days		Days or More
December 31, 2015	Past Due		Still Accruing		Nonaccrual		Total
Commercial real estate	$	693	$	—	$	673	$	1,366
Construction, land development, land		—		—		—		—
1-4 family residential properties		909		9		533		1,451
Farmland		—		—		—		—
Commercial		3,704		—		2,021		5,725
Factored receivables		12,379		1,931		—		14,310
Consumer		286		—		—		286
Mortgage warehouse		—		—		—		—
PCI		1,092		—		6,867		7,959
	$	19,063	$	1,940	$	10,094	$	31,097

The following table presents information regarding nonperforming loans at the dates indicated:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Nonaccrual loans(1)	$	16,382	$	10,094
Factored receivables greater than 90 days past due		2,260		1,931
Troubled debt restructurings accruing interest		3,359		1,330
	$	22,001	$	13,355

⁽¹⁾ Includes troubled debt restructurings of $2,789,000 and $53,000 at June 30, 2016 and December 31, 2015, respectively.

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. This analysis includes every loan and is performed 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:

Loans classified as pass are loans with low to average risk and not otherwise classified as substandard or doubtful.

Substandard:

Loans classified as substandard 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.

Doubtful:

Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with 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.

PCI:

At acquisition, PCI loans had the characteristics of substandard loans and it was probable, at acquisition, that all contractually required principal and interest payments would not be collected. The Company evaluates these loans on a projected cash flow basis with this evaluation performed quarterly.

As of June 30, 2016 and December 31, 2015, based on the most recent analysis performed, the risk category of loans is as follows:

(Dollars in thousands)
June 30, 2016	Pass		Substandard		Doubtful		PCI		Total
Commercial real estate	$	294,273	$	997	$	—	$	3,721	$	298,991
Construction, land development, land		35,121		275		—		1,102		36,498
1-4 family residential		70,489		920		—		2,712		74,121
Farmland		35,795		—		—		—		35,795
Commercial		546,663		24,906		—		2,939		574,508
Factored receivables		234,313		2,239		968		—		237,520
Consumer		17,303		36		—		—		17,339
Mortgage warehouse		135,746		—		—		—		135,746
	$	1,369,703	$	29,373	$	968	$	10,474	$	1,410,518
(Dollars in thousands)
December 31, 2015	Pass		Substandard		Doubtful		PCI		Total
Commercial real estate	$	284,753	$	1,977	$	—	$	5,089	$	291,819
Construction, land development, land		42,499		—		—		1,377		43,876
1-4 family residential		73,838		1,494		—		2,912		78,244
Farmland		33,573		—		—		—		33,573
Commercial		470,208		21,295		—		3,853		495,356
Factored receivables		212,588		1,019		1,481		—		215,088
Consumer		13,050		—		—		—		13,050
Mortgage warehouse		120,879		—		—		—		120,879
	$	1,251,388	$	25,785	$	1,481	$	13,231	$	1,291,885

Troubled Debt Restructurings

The Company had a recorded investment in troubled debt restructurings of $6,148,000 and $1,383,000 as of June 30, 2016 and December 31, 2015, respectively.

The following table presents loans modified as troubled debt restructurings that occurred during the six months ended June 30, 2016 and 2015:

			Pre-Modification		Post-Modification
			Outstanding		Outstanding
(Dollars in thousands)	Number of		Recorded		Recorded
June 30, 2016	Loans		Investment		Investment
Commercial		16	$	5,730	$	5,730

			Pre-Modification		Post-Modification
			Outstanding		Outstanding
(Dollars in thousands)	Number of		Recorded		Recorded
June 30, 2015	Loans		Investment		Investment
Commercial		1	$	148	$	148

As of June 30, 2016, there have been no defaults on any loans that were modified as troubled debt restructurings during the preceding twelve months. Default is determined at 90 or more days past due. The modifications primarily related to extending the amortization periods of the loans. The Company did not grant principal reductions on any restructured loans.

Purchased Credit Impaired Loans

The Company has loans that were acquired, for which there was, at acquisition, evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding contractually required principal and interest and the carrying amount of these loans included in the balance sheet amounts of loans at June 30, 2016 and December 31, 2015, are as follows:

	June 30,		December 31,
	2016		2015
Contractually required principal and interest:
Real estate loans	$	13,277	$	17,800
Commercial loans		4,032		5,335
Outstanding contractually required principal and interest	$	17,309	$	23,135
Gross carrying amount included in loans receivable	$	10,474	$	13,231

The changes in accretable yield during the three and six months ended June 30, 2016 and 2015 in regard to loans transferred at acquisition for which it was probable that all contractually required payments would not be collected are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Accretable yield, beginning balance	$	2,064		$	4,496		$	2,593		$	4,977
Additions		—			—			—			—
Accretion		(1,518	)		(1,031	)		(2,034	)		(1,460	)
Reclassification from nonaccretable to accretable yield		646			585			646			585
Disposals		—			(147	)		(13	)		(199	)
Accretable yield, ending balance	$	1,192		$	3,903		$	1,192		$	3,903

XML

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 5 - GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets consist of the following:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Goodwill	$	15,968	$	15,968

	June 30, 2016							December 31, 2015
	Gross Carrying		Accumulated			Net Carrying		Gross Carrying		Accumulated			Net Carrying
(Dollars in thousands)	Amount		Amortization			Amount		Amount		Amortization			Amount
Core deposit intangibles	$	14,586	$	(6,855	)	$	7,731	$	14,586	$	(5,765	)	$	8,821
Other intangible assets		4,830		(2,369	)		2,461		4,830		(1,765	)		3,065
	$	19,416	$	(9,224	)	$	10,192	$	19,416	$	(7,530	)	$	11,886

The changes in goodwill and intangible assets during the three and six months ended June 30, 2016 and 2015 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015			2016			2015
Beginning balance	$	26,877		$	30,211		$	27,854		$	29,057
Acquired intangibles		—			858			—			2,776
Amortization of intangibles		(717	)		(895	)		(1,694	)		(1,659	)
Ending balance	$	26,160		$	30,174		$	26,160		$	30,174

XML

Variable Interest Entities

6 Months Ended

Jun. 30, 2016

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Variable Interest Entities

NOTE 6 – Variable Interest Entities

Collateralized Loan Obligation Funds – Closed

The Company, through its subsidiary TCA, acts as the asset manager or provides certain middle- and back-office services to the asset manager of various CLO funds. TCA earns asset management fees in accordance with the terms of its asset management or staff and services agreements associated with the CLO funds. TCA earned asset management fees totaling $1,605,000 and $3,234,000 for the three and six months ended June 30, 2016, respectively, and $1,274,000 and $2,232,000 for the three and six months ended June 30, 2015, respectively.

The following table summarizes the closed CLO offerings with assets managed by TCA:

	Offering	Offering
(Dollars in thousands)	Date	Amount
Trinitas CLO I, LTD (Trinitas I)	May 1, 2014	$	400,000
Trinitas CLO II, LTD (Trinitas II)	August 4, 2014	$	416,000
Doral CLO III, LTD (Doral III)(1)	December 17, 2012	$	310,800
Trinitas CLO III, LTD (Trinitas III)	June 9, 2015	$	409,375

⁽¹⁾ Acquired management contract as part of the Doral Money acquisition discussed in Note 2.

The securities sold in the above CLO offerings were issued in a series of tranches ranging from an AAA rated debt tranche to an unrated tranche of subordinated notes. The Company does not hold any of the securities issued in these CLO offerings.  A related party of the Company holds insignificant interests in Trinitas II and Trinitas III.

The Company performed a consolidation analysis to determine whether the Company was required to consolidate the assets, liabilities, equity or operations of the above closed CLO funds in its financial statements. The Company concluded that the closed CLO funds are variable interest entities; however, the Company, through TCA, does not hold variable interests in the entities as the Company’s interest in the CLO funds is limited to the asset management fees payable to TCA under their asset management agreements and the interests of its related parties are insignificant.  The Company concluded that the asset management fees were not variable interests in the CLO funds as (a) the asset management fees are commensurate with the services provided, (b) the asset management agreements include only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated on an arm’s-length basis, and (c) the Company does not hold other interests in the CLO funds (including interests held through related parties) that individually or in the aggregate absorb more than an insignificant amount of the CLO funds’ expected losses or receive more than an insignificant amount of the CLO funds’ expected residual returns. Consequently, the Company concluded that it was not required to consolidate the assets, liabilities, equity or operations of these CLO funds in its financial statements.

The following table summarizes the closed CLO offerings for which TCA is not the asset manager, but provides certain middle- and back-office services to the asset manager:

	Offering	Offering
(Dollars in thousands)	Date	Amount
Trinitas CLO IV, LTD (Trinitas IV)	June 2, 2016	$	406,650

The securities sold in the above CLO offering were issued in a series of tranches ranging from an AAA rated debt tranche to an unrated tranche of subordinated notes. The Company holds an investment in the subordinated notes of Trinitas IV with a carrying amount of $1,634,000, which is classified as a held to maturity security within the Company’s consolidated balance sheet at June 30, 2016.  

The Company performed a consolidation analysis to confirm whether the Company was required to consolidate the assets, liabilities, equity or operations of the above closed CLO fund in its financial statements. The Company concluded that the closed CLO fund is a variable interest entity and that the Company holds a variable interest in the entity in the form of its investment in the subordinated notes of entity. However, the Company also concluded that as TCA is not the named asset manager of the CLO fund, the Company does not have the power to direct the activities that most significantly impact the entity’s economic performance. As a result, the Company is not the primary beneficiary and therefore is not required to consolidate the assets, liabilities, equity, or operations of the closed CLO fund in the Company’s financial statements.

Collateralized Loan Obligation Funds – Warehouse Phase

On September 21, 2015 and June 17, 2016, Trinitas CLO V, Ltd. (“Trinitas V”) and Trinitas CLO VI, Ltd. (“Trinitas VI”), respectively, were formed to be the issuers of CLO offerings.  Trinitas V and Trinitas VI are capitalized with subordinated debt issued to the Company and third party investors.  Each entity entered into a warehouse credit agreement in order to begin acquiring senior secured loan assets that will comprise the initial collateral pool of the CLOs once issued. When finalized, Trinitas V and Trinitas VI will use the proceeds of the debt and equity interests sold in the offering for the final CLO securitization structures to repay the initial warehouse phase debt and equity holders. In the final CLO securitization structures, interest and principal repayment of the leveraged loans held by Trinitas V and Trinitas VI will be used to repay debt holders with any excess cash flows used to provide a return on capital to equity investors. During their warehousing periods, TCA acts as portfolio manager for Trinitas V and provides middle- and back-office support as a staff and services provider for Trinitas VI. TCA does not earn management or other fees from Trinitas V or Trinitas VI during the warehouse phase.  

At June 30, 2016, the Company’s loss exposure to Trinitas V and Trinitas VI is limited to its combined $17,301,000 investment in the entities which is classified as other assets within the Company’s consolidated balance sheet.

The Company performed a consolidation analysis of Trinitas V and Trinitas VI during the warehouse phase and concluded that Trinitas V and Trinitas VI are variable interest entities and that the Company holds variable interests in the entities that could potentially be significant to the entities in the form of its investments in the subordinated notes of the entities. However, the Company also concluded that due to certain approval and denial powers available to the senior lender under the warehouse credit facility for Trinitas V which provide for shared decision-making powers, and as the Company is not the named portfolio manager for Trinitas VI, but only acts as staff and services provider, the Company does not have the power to direct the activities that most significantly impact the entities’ economic performance.  As a result, the Company is not the primary beneficiary and therefore is not required to consolidate the assets, liabilities, equity, or operations of the entities in the Company’s financial statements.

XML

Deposits

6 Months Ended

Jun. 30, 2016

Deposits [Abstract]

Deposits

NOTE 7 - Deposits

Deposits at June 30, 2016 and December 31, 2015 are summarized as follows:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Noninterest bearing demand	$	170,834	$	168,264
Interest bearing demand		235,877		238,833
Individual retirement accounts		64,204		60,971
Money market		120,929		112,214
Savings		77,625		74,759
Certificates of deposit		555,710		543,909
Brokered deposits		49,975		50,000
Total Deposits	$	1,275,154	$	1,248,950

At June 30, 2016, scheduled maturities of certificates of deposits, individual retirement accounts and brokered deposits are as follows:

(Dollars in thousands)	June 30, 2016
Within one year	$	510,421
After one but within two years		120,524
After two but within three years		21,961
After three but within four years		10,956
After four but within five years		6,027
Total	$	669,889

Time deposits, including individual retirement accounts, certificates of deposit, and brokered deposits, with individual balances of $250,000 and greater totaled $112,418,000 and $106,258,000 at June 30, 2016 and December 31, 2015, respectively.

XML

Legal Contingencies

6 Months Ended

Jun. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Legal Contingencies

NOTE 8 - Legal Contingencies

Various legal claims have arisen from time to time in the normal course of business which, in the opinion of management, will have no material effect on the Company’s consolidated financial statements. The Company does not anticipate any material losses as a result of commitments and contingent liabilities.

Trademark Infringement Lawsuit

On February 18, 2015, a trademark infringement suit was filed in the United States District Court for the Western District of Tennessee Western Division against the Company and certain subsidiaries by Triumph Bancshares, Inc. and Triumph Bank, N.A., asserting that the Company’s use of “Triumph” as part of the Company’s trademarks and domain names causes a likelihood of confusion, has caused actual confusion, and infringes plaintiffs’ trademarks.  The suit was settled and did not have a material impact on the financial condition and results of operations of the Company.

XML

Off-Balance Sheet Loan Commitments

6 Months Ended

Jun. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Off-Balance Sheet Loan Commitments

NOTE 9 - 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 instruments.

The contractual amounts of financial instruments with off-balance sheet risk were as follows:

	June 30, 2016				December 31, 2015
(Dollars in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	25,881	$	3,950	$	6,571	$	2,949
Unused lines of credit		45,862		86,396		35,514		81,189
Standby letters of credit		1,072		2,169		1,030		1,999

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.

XML

Fair Value Disclosures

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures

NOTE 10 - 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 our methodologies disclosed in our annual financial statements.

Assets measured at fair value on a recurring basis are summarized in the table below. There were no liabilities measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015.

(Dollars in thousands)	Fair Value Measurements Using						Total
June 30, 2016	Level 1		Level 2		Level 3		Fair Value
Securities available for sale	$	—	$	159,790	$	—	$	159,790
(Dollars in thousands)	Fair Value Measurements Using						Total
December 31, 2015	Level 1		Level 2		Level 3		Fair Value
Securities available for sale	$	—	$	163,169	$	—	$	163,169
Loans held for sale		—		1,341		—		1,341

There were no transfers between levels during 2016 or 2015.  

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, 2016 and December 31, 2015.

(Dollars in thousands)	Fair Value Measurements Using						Total
June 30, 2016	Level 1		Level 2		Level 3		Fair Value
Impaired loans
Commercial real estate	$	—	$	—	$	417	$	417
Construction, land development, land		—		—		250		250
1-4 family residential properties		—		—		9		9
Commercial		—		—		5,117		5,117
Factored receivables		—		—		665		665
PCI		—		—		1,001		1,001
Other real estate owned (1)
Commercial		—		—		698		698
Construction, land development, land		—		—		253		253
1-4 family residential properties		—		—		124		124
	$	—	$	—	$	8,534	$	8,534
(Dollars in thousands)	Fair Value Measurements Using						Total
December 31, 2015	Level 1		Level 2		Level 3		Fair Value
Impaired loans
Commercial real estate	$	—	$	—	$	431	$	431
1-4 family residential properties		—		—		13		13
Commercial		—		—		695		695
Factored receivables		—		—		1,156		1,156
PCI		—		—		170		170
Other real estate owned (1)
1-4 family residential properties		—		—		128		128
Construction, land development, land		—		—		1,377		1,377
	$	—	$	—	$	3,970	$	3,970

⁽¹⁾ Represents the fair value of OREO that was adjusted during the period and subsequent to its initial classification as OREO

Impaired Loans with Specific Allocation of ALLL:    A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due pursuant to the contractual terms of the loan agreement. Impairment 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. Fair value of the impaired 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 of the underlying collateral.

OREO:    OREO is comprised of real estate acquired in partial or full satisfaction of loans. OREO is recorded at its estimated fair value less estimated selling and closing costs at the date of transfer, with any excess of the related loan balance over the fair value less expected selling costs is charged to the ALLL. Subsequent changes in fair value are reported as adjustments to the carrying amount and are recorded against earnings. The Company outsources the valuation of OREO with material balances to third party appraisers. 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.

The estimated fair values of the Company’s financial instruments at June 30, 2016 and December 31, 2015 were as follows:

(Dollars in thousands)	Carrying		Fair Value Measurements Using						Total
June 30, 2016	Amount		Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and cash equivalents	$	61,750	$	61,750	$	—	$	—	$	61,750
Securities - held to maturity		27,502		—		26,713		1,649		28,362
Loans not previously presented, net		1,389,287		—		—		1,392,276		1,392,276
FHLB stock		6,368	N/A		N/A		N/A		N/A
Accrued interest receivable		5,260		—		5,260		—		5,260
Financial liabilities:
Deposits		1,275,154		—		1,277,777		—		1,277,777
Customer repurchase agreements		13,635		—		13,635		—		13,635
Federal Home Loan Bank advances		180,500				180,497				180,497
Junior subordinated debentures		24,823		—		25,477		—		25,477
Accrued interest payable		1,348		—		1,348		—		1,348
(Dollars in thousands)	Carrying		Fair Value Measurements Using						Total
December 31, 2015	Amount		Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and cash equivalents	$	105,277	$	105,277	$	—	$	—	$	105,277
Loans not previously presented, net		1,276,853		—		—		1,281,408		1,281,408
FHLB stock		3,818	N/A		N/A		N/A		N/A
Accrued interest receivable		4,832		—		4,832		—		4,832
Financial liabilities:
Deposits		1,248,950		—		1,249,751		—		1,249,751
Customer repurchase agreements		9,317		—		9,317		—		9,317
Federal Home Loan Bank advances		130,000		—		130,000		—		130,000
Junior subordinated debentures		24,687		—		23,153		—		23,153
Accrued interest payable		1,231		—		1,231		—		1,231

XML

Regulatory Matters

6 Months Ended

Jun. 30, 2016

Regulatory Capital Requirements [Abstract]

Regulatory Matters

NOTE 11 - 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.

The Company is subject to the Basel III regulatory capital framework. Beginning in January 2016, the implementation of the capital conservation buffer was effective for the Company starting at the 0.625% level and increasing 0.625% each year thereafter, until it reaches 2.5% on January 1, 2019. 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.

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, 2016 and December 31, 2015, the Company and TBK Bank meet all capital adequacy requirements to which they are subject, including the capital buffer requirement.

As of June 30, 2016 and December 31, 2015, 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, 2016 that management believes have changed TBK Bank’s category.

The actual capital amounts and ratios for the Company and TBK Bank are presented in the following table as of June 30, 2016 and December 31, 2015.  

					To Be Adequately				To Be Well
					Capitalized Under				Capitalized Under
					Prompt Corrective				Prompt Corrective
(Dollars in thousands)	Actual				Action Provisions				Action Provisions
As of June 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	288,194		18.0%	$	127,944		8.0%	N/A		N/A
TBK Bank, SSB	$	215,780		14.0%	$	122,948		8.0%	$	153,685		10.0%
Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	274,253		17.1%	$	95,958		6.0%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	92,211		6.0%	$	122,948		8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	243,086		15.2%	$	71,968		4.5%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	69,158		4.5%	$	99,895		6.5%
Tier 1 capital (to average assets)
Triumph Bancorp, Inc.	$	274,253		16.0%	$	68,494		4.0%	N/A		N/A
TBK Bank, SSB	$	201,915		12.3%	$	65,902		4.0%	$	82,378		5.0%
As of December 31, 2015
Total capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	276,924		19.1%	$	115,929		8.0%	N/A		N/A
TBK Bank, SSB	$	205,978		14.7%	$	111,869		8.0%	$	139,836		10.0%
Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	264,239		18.2%	$	86,968		6.0%	N/A		N/A
TBK Bank, SSB	$	193,293		13.8%	$	83,919		6.0%	$	111,892		8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	235,253		16.2%	$	65,227		4.5%	N/A		N/A
TBK Bank, SSB	$	193,293		13.8%	$	62,939		4.5%	$	90,912		6.5%
Tier 1 capital (to average assets)
Triumph Bancorp, Inc.	$	264,239		16.6%	$	63,824		4.0%	N/A		N/A
TBK Bank, SSB	$	193,293		12.7%	$	61,024		4.0%	$	76,280		5.0%

Dividends paid by bank are limited to, without prior regulatory approval, current year earnings and earnings less dividends paid during the preceding two years.

XML

Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Stockholders' Equity

NOTE 12 – STOCKHOLDERS’ EQUITY

The following summarizes the capital structure of Triumph Bancorp, Inc.

	Preferred Stock
	Series A						Series B						Common Stock				Treasury Stock
	June			December			June			December			June		December		June		December
	2016			2015			2016			2015			2016		2015		2016		2015
Number of shares authorized		50,000			50,000			115,000			115,000			50,000,000		50,000,000
Number of shares issued		45,500			45,500			51,956			51,956			18,153,828		18,052,723
Number of shares outstanding		45,500			45,500			51,956			51,956			18,107,493		18,018,200		46,335		34,523
Par value per share	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01	$	0.01
Liquidation preference per share	$	100		$	100		$	100		$	100
Dividend rate	Prime + 2%			Prime + 2%				8.00	%		8.00	%
Dividend rate - floor		8.00	%		8.00	%		8.00	%		8.00	%
Subsequent dividend payment dates	Quarterly			Quarterly			Quarterly			Quarterly
Convertible to common stock	Yes			Yes			Yes			Yes
Conversion period	Anytime			Anytime			Anytime			Anytime
Conversion ratio - preferred to common	6.94008			6.94008			6.94008			6.94008

XML

Stock Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

NOTE 13 – STOCK BASED COMPENSATION

Stock based compensation expense that has been charged against income was $926,000 and $1,279,000 for the three and six months ended June 30, 2016, respectively, and $852,000 and $1,548,000 for the three and six months ended June 30, 2015, 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 aggregate number of shares of common stock available for issuance under the Omnibus Incentive Plan is 1,200,000 shares.

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, 2016 were as follows:

				Weighted-Average
				Grant-Date
Nonvested RSAs	Shares			Fair Value
Nonvested at January 1, 2016		201,270		$	14.24
Granted		101,105			15.87
Vested		(47,727	)		14.60
Forfeited		(6,759	)		15.02
Nonvested at June 30, 2016		247,889		$	14.82

RSAs granted to employees under the Omnibus Incentive Plan typically vest over two to three years. Compensation expense for RSAs granted under the Omnibus Incentive Program 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, 2016, there was $1,730,000 of unrecognized compensation cost related to nonvested RSAs granted under the Omnibus Incentive Plan. The cost is expected to be recognized over a remaining period of 2.67 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, 2016 were as follows:

			Weighted-Average
Stock Options	Shares		Exercise Price
Outstanding at January 1, 2016		—	$	—
Granted		164,175		15.87
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2016		164,175	$	15.87

Stock options outstanding at June 30, 2016 had an intrinsic value of $21,000, a weighted-average remaining contractual term of 9.75 years, were all expected to vest, and were not exercisable. The weighted-average grant date fair value of options granted during the six months ended June 30, 2016 was $5.85 per option.

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 were determined based on historical volatilities of a peer group of companies with a similar size, industry, stage of life cycle, and capital structure. The expected term of the options granted was determined based on the SEC simplified method. The risk-free interest rate for the expected term of the options was 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:

	2016
Risk-free interest rate		1.49	%
Expected Term	6.25 Years
Expected stock price volatility		34.96	%
Dividend yield		—

As of June 30, 2016, there was $836,000 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 3.75 years.

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 14 – 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)	2016		2015		2016		2015
Basic
Net income to common stockholders	$	4,431	$	4,457	$	9,243	$	18,309
Weighted average common shares outstanding		17,859,604		17,711,527		17,838,267		17,711,527
Basic earnings per common share	$	0.25	$	0.25	$	0.52	$	1.03
Diluted
Net income to common stockholders	$	4,431	$	4,457	$	9,243	$	18,309
Dilutive effect of preferred stock		—		—		—		387
Net income to common stockholders - diluted	$	4,431	$	4,457	$	9,243	$	18,696
Weighted average common shares outstanding		17,859,604		17,711,527		17,838,267		17,711,527
Add:  Dilutive effects of restricted stock		112,880		71,022		113,334		41,492
Add:  Dilutive effects of assumed exercises of stock warrants		70,101		31,276		60,330		30,050
Add:  Dilutive effects of assumed conversion of Preferred A		—		—		—		315,773
Add:  Dilutive effects of assumed conversion of Preferred B		—		—		—		360,578
Average shares and dilutive potential common shares		18,042,585		17,813,825		18,011,931		18,459,420
Dilutive earnings per common share	$	0.25	$	0.25	$	0.51	$	1.01

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,
	2016		2015		2016		2015
Shares assumed to be converted from Preferred Stock Series A		315,773		315,773		315,773		—
Shares assumed to be converted from Preferred Stock Series B		360,578		360,578		360,578		—
Restricted stock awards		76,362		—		76,362		—
Stock options		164,175		—		164,175		—

XML

Business Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business Segment Information

NOTE 15 – BUSINESS SEGMENT INFORMATION

The following table presents the Company’s operating segments. Transactions between segments consist primarily of borrowed funds. Intersegment interest expense is allocated to the Factoring segment based on the Company’s prime rate. The provision for loan loss is allocated based on the segment’s allowance for loan loss determination which considers the effects of charge-offs. Noninterest income and expense directly attributable to a segment are assigned to it. Taxes are paid on a consolidated basis but not allocated for segment purposes The Factoring segment includes only factoring originated by TBC. General factoring services not originated through TBC are included in the Banking segment.

(Dollars in thousands)						Asset
Three Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	7,939		$	20,109	$	33	$	273		$	28,354
Intersegment interest allocations		(1,099	)		1,099		—		—			—
Total interest expense		—			2,135		—		312			2,447
Net interest income (expense)		6,840			19,073		33		(39	)		25,907
Provision for loan losses		555			1,392		—		(8	)		1,939
Net interest income after provision		6,285			17,681		33		(31	)		23,968
Other noninterest income		496			822		1,614		736			3,668
Noninterest expense		4,962			13,405		1,213		751			20,331
Operating income (loss)	$	1,819		$	5,098	$	434	$	(46	)	$	7,305

(Dollars in thousands)						Asset
Three Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	8,275		$	18,189	$	5	$	128		$	26,597
Intersegment interest allocations		(1,017	)		1,017		—		—			—
Total interest expense		—			1,674		—		278			1,952
Net interest income (expense)		7,258			17,532		5		(150	)		24,645
Provision for loan losses		477			1,971		—		93			2,541
Net interest income after provision		6,781			15,561		5		(243	)		22,104
Other noninterest income		450			2,708		1,352		259			4,769
Noninterest expense		4,450			12,707		809		1,669			19,635
Operating income (loss)	$	2,781		$	5,562	$	548	$	(1,653	)	$	7,238

(Dollars in thousands)						Asset
Six Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,124		$	37,535	$	64	$	524		$	53,247
Intersegment interest allocations		(2,100	)		2,100		—		—			—
Total interest expense		—			4,237		—		614			4,851
Net interest income (expense)		13,024			35,398		64		(90	)		48,396
Provision for loan losses		85			1,267		—		76			1,428
Net interest income after provision		12,939			34,131		64		(166	)		46,968
Other noninterest income		942			2,836		3,285		1,586			8,649
Noninterest expense		9,535			26,987		2,559		1,328			40,409
Operating income (loss)	$	4,346		$	9,980	$	790	$	92		$	15,208

(Dollars in thousands)						Asset
Six Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,503		$	32,424	$	65	$	184		$	48,176
Intersegment interest allocations		(1,926	)		1,926		—		—			—
Total interest expense		—			3,246		10		550			3,806
Net interest income		13,577			31,104		55		(366	)		44,370
Provision for loan losses		368			2,725		—		93			3,186
Net interest income after provision		13,209			28,379		55		(459	)		41,184
Bargain purchase gain		—			—		12,509		—			12,509
Other noninterest income		781			5,293		2,309		536			8,919
Noninterest expense		8,762			25,107		3,435		3,114			40,418
Operating income (loss)	$	5,228		$	8,565	$	11,438	$	(3,037	)	$	22,194

(Dollars in thousands)					Asset
June 30, 2016	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	216,649	$	1,708,861	$	15,208	$	311,887	$	(469,210	)	$	1,783,395
Gross loans	$	206,256	$	1,338,314	$	889	$	13,809	$	(148,750	)	$	1,410,518
(Dollars in thousands)					Asset
December 31, 2015	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	198,629	$	1,601,072	$	17,676	$	303,253	$	(429,317	)	$	1,691,313
Gross loans	$	186,457	$	1,223,028	$	945	$	18,455	$	(137,000	)	$	1,291,885

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

Triumph Bancorp, Inc. (collectively with its subsidiaries, “Triumph”, or the “Company” as applicable) is a financial holding company headquartered in Dallas, Texas. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Triumph Capital Advisors, LLC (“TCA”), Triumph CRA Holdings, LLC (“TCRA”), TBK Bank, SSB (“TBK Bank”), TBK Bank’s wholly owned subsidiary Advance Business Capital LLC, which currently operates under the d/b/a of Triumph Business Capital (“TBC”), and TBK Bank’s wholly owned subsidiary Triumph Insurance Group, Inc. (“TIG”).

TBK Bank does business under the following names:  (i) Triumph Community Bank (“TCB”) and Triumph Savings Bank (“TSB”) with respect to its community banking business in respective markets; (ii) Triumph Commercial Finance (“TCF”) with respect to its asset-based lending, equipment lending and general factoring commercial finance products; (iii) Triumph Healthcare Finance (“THF”) with respect to its healthcare asset-based lending business; and (iv) Triumph Premium Finance (“TPF”) with respect to its insurance premium financing business.

Basis of Presentation

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. 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. 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, 2015. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The Company has four reportable segments consisting of Factoring, Banking, Asset Management, and Corporate. The Company’s Chief Executive Officer uses segment results to make operating and strategic decisions.  

Newly Issued, But Not Yet Effective Accounting Standards

Newly Issued, But Not Yet Effective Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard was originally effective for the Company on January 1, 2017.  However, in August 2015 the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date” which deferred the mandatory effective date the new standard would take effect to reporting periods beginning after December 15, 2017, with early adoption allowed as of the original effective date for public companies. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the effect that ASU 2016-01 will have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued this ASU to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under current U.S. GAAP and disclosing key information about leasing arrangements. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early application of this ASU is permitted for all entities. The Company is currently assessing the impact that the adoption of this standard will have on the financial condition and results of operations of the Company.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”).  The FASB issued this ASU to improve the accounting for share-based payments.  ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions, including:  the presentation of income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and calculation of diluted earnings per share.  The amendments in this ASU are effective for fiscal years beginning after December 31, 2016, and interim periods within those years for public business entities.  Early adoption is permitted in any interim or annual period provided that the entire ASU is adopted.  Adoption of ASU 2016-09 is not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 31, 2019, and interim periods within those years for public business entities that are SEC filers.  Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018.  The Company is currently assessing the impact that the adoption of this standard will have on the financial condition and results of operations of the Company.

XML

Business Combinations (Tables)

6 Months Ended

Jun. 30, 2016

Doral Money Acquisition

Business Acquisition [Line Items]

Summary of Fair Values of the Identifiable Assets Acquired and Liabilities Assumed

A summary of the fair values of assets acquired, liabilities assumed, net consideration transferred, and the resulting bargain purchase gain is as follows:

	Initial Values			Measurement
	Recorded at			Period			Adjusted
(Dollars in thousands)	Acquisition Date			Adjustments			Values
Assets acquired:
Cash	$	8,273		$	—		$	8,273
CLO Securities		98,316			—			98,316
Intangible asset - CLO management contracts		1,918			—			1,918
Loans		36,765			900			37,665
Prepaid corporate income tax		3,014			1,688			4,702
Other assets		772			—			772
		149,058			2,588			151,646
Liabilities assumed:
Deferred tax liability		663			—			663
Other liabilities		22			(20	)		2
		685			(20	)		665
Fair value of net assets acquired		148,373			2,608			150,981
Net consideration transferred		135,864			—			135,864
Bargain purchase gain	$	(12,509	)	$	(2,608	)	$	(15,117	)

XML

Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investments Debt And Equity Securities [Abstract]

Schedule of Amortized Cost of Securities and Their Approximate Fair Values

Securities have been classified in the financial statements as available for sale or held to maturity. The amortized cost of securities and their approximate fair values at June 30, 2016 and December 31, 2015 are as follows:

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
June 30, 2016	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,388	$	1,749	$	—		$	92,137
Mortgage-backed securities, residential		25,004		623		—			25,627
Asset backed securities		13,179		12		(335	)		12,856
State and municipal		1,266		36		—			1,302
Corporate bonds		27,358		351		(11	)		27,698
SBA pooled securities		168		2		—			170
Total available for sale securities	$	157,363	$	2,773	$	(346	)	$	159,790
			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
	Cost		Gains		Losses			Value
Held to maturity securities:
CLO securities	$	27,502	$	860	$	—		$	28,362

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,533	$	518	$	(17	)	$	91,034
Mortgage-backed securities, residential		28,006		361		(27	)		28,340
Asset backed securities		17,957		24		(455	)		17,526
State and municipal		1,509		17		—			1,526
Corporate bonds		24,542		74		(57	)		24,559
SBA pooled securities		183		1		—			184
Total available for sale securities	$	162,730	$	995	$	(556	)	$	163,169

Schedule of Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity

The amortized cost and estimated fair value of securities at June 30, 2016, 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
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	31,040	$	31,136	$	—	$	—
Due from one year to five years		86,162		88,132		—		—
Due from five years to ten years		1,534		1,538		—		—
Due after ten years		276		331		27,502		28,362
		119,012		121,137		27,502		28,362
Mortgage-backed securities, residential		25,004		25,627		—		—
Asset backed securities		13,179		12,856		—		—
SBA pooled securities		168		170		—		—
	$	157,363	$	159,790	$	27,502	$	28,362

Schedule of Information Pertaining to Securities with Gross Unrealized Losses

Information pertaining to securities with gross unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
June 30, 2016	Value		Losses			Value		Losses			Value		Losses
Available for sale securities:
U.S. Government agency obligations	$	—	$	—		$	—	$	—		$	—	$	—
Mortgage-backed securities, residential		—		—			—		—			—		—
Asset backed securities		7,947		(335	)		—		—			7,947		(335	)
State and municipal		—		—			—		—			—		—
Corporate bonds		1,395		(11	)		—		—			1,395		(11	)
SBA pooled securities		—		—			—		—			—		—
	$	9,342	$	(346	)	$	—	$	—		$	9,342	$	(346	)
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2015	Value		Losses			Value		Losses			Value		Losses
U.S. Government agency obligations	$	10,029	$	(17	)	$	—	$	—		$	10,029	$	(17	)
Mortgage-backed securities, residential		4,948		(27	)		—		—			4,948		(27	)
Asset backed securities		8,031		(416	)		4,605		(39	)		12,636		(455	)
State and municipal		—		—			—		—			—		—
Corporate bonds		10,434		(57	)		—		—			10,434		(57	)
SBA pooled securities		—		—			—		—			—		—
	$	33,442	$	(517	)	$	4,605	$	(39	)	$	38,047	$	(556	)

XML

Loans and Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2016

Loans And Leases Receivable Disclosure [Abstract]

Summary of Information Concerning Loan Portfolio

Loans at June 30, 2016 and December 31, 2015 consisted of the following:

	June 30,			December 31,
(Dollars in thousands)	2016			2015
Commercial real estate	$	298,991		$	291,819
Construction, land development, land		36,498			43,876
1-4 family residential properties		74,121			78,244
Farmland		35,795			33,573
Commercial		574,508			495,356
Factored receivables		237,520			215,088
Consumer		17,339			13,050
Mortgage warehouse		135,746			120,879
Total		1,410,518			1,291,885
Allowance for loan and lease losses		(13,772	)		(12,567	)
	$	1,396,746		$	1,279,318

Summary of Allowance for Loan and Lease Losses

Allowance for Loan and Lease Losses    

The activity in the allowance for loan and lease losses (“ALLL”) during the three and six months ended June 30, 2016 and 2015 is as follows:

(Dollars in thousands)	Beginning										Ending
Three months ended June 30, 2016	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,619	$	161		$	(1	)	$	13	$	1,792
Construction, land development, land		198		(17	)		—			—		181
1-4 family residential properties		285		(50	)		(47	)		71		259
Farmland		133		10			—			—		143
Commercial		5,331		1,134			(169	)		401		6,697
Factored receivables		4,110		524			(450	)		20		4,204
Consumer		222		169			(112	)		14		293
Mortgage warehouse		195		8			—			—		203
	$	12,093	$	1,939		$	(779	)	$	519	$	13,772
(Dollars in thousands)	Beginning										Ending
Three months ended June 30, 2015	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,075	$	183		$	(54	)	$	10	$	1,214
Construction, land development, land		344		2			—			—		346
1-4 family residential properties		223		29			(78	)		77		251
Farmland		26		2			—			—		28
Commercial		3,996		1,109			(45	)		4		5,064
Factored receivables		3,380		1,049			(312	)		18		4,135
Consumer		84		61			(52	)		67		160
Mortgage warehouse		158		106			—			—		264
	$	9,286	$	2,541		$	(541	)	$	176	$	11,462

(Dollars in thousands)	Beginning										Ending
Six months ended June 30, 2016	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	1,489	$	290		$	(1	)	$	14	$	1,792
Construction, land development, land		367		(186	)		—			—		181
1-4 family residential properties		274		(28	)		(63	)		76		259
Farmland		134		9			—			—		143
Commercial		5,276		1,159			(169	)		431		6,697
Factored receivables		4,509		84			(458	)		69		4,204
Consumer		216		199			(155	)		33		293
Mortgage warehouse		302		(99	)		—			—		203
	$	12,567	$	1,428		$	(846	)	$	623	$	13,772
(Dollars in thousands)	Beginning										Ending
Six months ended June 30, 2015	Balance		Provision			Charge-offs			Recoveries		Balance
Commercial real estate	$	533	$	773		$	(143	)	$	51	$	1,214
Construction, land development, land		333		13			—			—		346
1-4 family residential properties		215		119			(183	)		100		251
Farmland		19		9			—			—		28
Commercial		4,003		1,102			(47	)		6		5,064
Factored receivables		3,462		1,004			(379	)		48		4,135
Consumer		140		40			(147	)		127		160
Mortgage warehouse		138		126			—			—		264
	$	8,843	$	3,186		$	(899	)	$	332	$	11,462

Summary of Individual and Collective Allowance for Loan Losses and Loan Balances by Class

The following table presents loans individually and collectively evaluated for impairment, as well as purchased credit impaired (“PCI”) loans, and their respective ALLL allocations:

(Dollars in thousands)	Loan Evaluation								ALLL Allocations
June 30, 2016	Individually		Collectively		PCI		Total loans		Individually		Collectively		PCI		Total ALLL
Commercial real estate	$	687	$	294,583	$	3,721	$	298,991	$	100	$	1,251	$	441	$	1,792
Construction, land development, land		275		35,121		1,102		36,498		25		156		—		181
1-4 family residential properties		920		70,489		2,712		74,121		1		258		—		259
Farmland		—		35,795		—		35,795		—		143		—		143
Commercial		13,270		558,299		2,939		574,508		2,047		4,650		—		6,697
Factored receivables		3,207		234,313		—		237,520		1,315		2,889		—		4,204
Consumer		34		17,305		—		17,339		—		293		—		293
Mortgage warehouse		—		135,746		—		135,746		—		203		—		203
	$	18,393	$	1,381,651	$	10,474	$	1,410,518	$	3,488	$	9,843	$	441	$	13,772
(Dollars in thousands)	Loan Evaluation								ALLL Allocations
December 31, 2015	Individually		Collectively		PCI		Total loans		Individually		Collectively		PCI		Total ALLL
Commercial real estate	$	724	$	286,006	$	5,089	$	291,819	$	100	$	1,034	$	355	$	1,489
Construction, land development, land		—		42,499		1,377		43,876		—		367		—		367
1-4 family residential properties		618		74,714		2,912		78,244		1		273		—		274
Farmland		—		33,573		—		33,573		—		134		—		134
Commercial		7,916		483,587		3,853		495,356		796		4,480		—		5,276
Factored receivables		3,422		211,666		—		215,088		1,694		2,815		—		4,509
Consumer		—		13,050		—		13,050		—		216		—		216
Mortgage warehouse		—		120,879		—		120,879		—		302		—		302
	$	12,680	$	1,265,974	$	13,231	$	1,291,885	$	2,591	$	9,621	$	355	$	12,567

Summary of Information Pertaining to Impaired Loans

The following is a summary of information pertaining to impaired loans. Loans included in these tables are non-PCI impaired loans and PCI loans that have deteriorated subsequent to acquisition and as a result have been deemed impaired and an allowance recorded. PCI loans that have not deteriorated subsequent to acquisition are not considered impaired and therefore do not require an allowance and are excluded from these tables.

	Impaired Loans and Purchased Credit						Impaired Loans
	Impaired Loans With a Valuation Allowance						Without a Valuation Allowance
(Dollars in thousands)	Recorded		Unpaid		Related		Recorded		Unpaid
June 30, 2016	Investment		Principal		Allowance		Investment		Principal
Commercial real estate	$	517	$	517	$	100	$	170	$	206
Construction, land development, land		275		275		25		—		—
1-4 family residential properties		10		19		1		910		1,031
Farmland		—		—		—		—		—
Commercial		7,164		7,191		2,047		6,106		6,115
Factored receivables		1,980		1,980		1,315		1,227		1,227
Consumer		—		—		—		34		34
Mortgage warehouse		—		—		—		—		—
PCI		1,442		1,679		441		—		—
	$	11,388	$	11,661	$	3,929	$	8,447	$	8,613
	Impaired Loans and Purchased Credit						Impaired Loans
	Impaired Loans With a Valuation Allowance						Without a Valuation Allowance
(Dollars in thousands)	Recorded		Unpaid		Related		Recorded		Unpaid
December 31, 2015	Investment		Principal		Allowance		Investment		Principal
Commercial real estate	$	531	$	532	$	100	$	193	$	229
Construction, land development, land		—		—		—		—		—
1-4 family residential properties		14		21		1		604		793
Farmland		—		—		—		—		—
Commercial		1,491		1,520		796		6,425		6,433
Factored receivables		2,850		2,850		1,694		572		572
Consumer		—		—		—		—		—
Mortgage warehouse		—		—		—		—		—
PCI		525		525		355		—		—
	$	5,411	$	5,448	$	2,946	$	7,794	$	8,027

The following table presents average impaired loans and interest recognized on impaired loans for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended				Three Months Ended
	June 30, 2016				June 30, 2015
	Average		Interest		Average		Interest
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate	$	702	$	—	$	1,926	$	1
Construction, land development, land		138		—		—		—
1-4 family residential properties		779		—		433		9
Farmland		—		—		—		—
Commercial		12,769		73		4,833		80
Factored receivables		4,074		—		1,957		—
Consumer		35		—		—		—
Mortgage warehouse		—		—		—		—
PCI		1,432		—		721		—
	$	19,929	$	73	$	9,870	$	90
	Six Months Ended				Six Months Ended
	June 30, 2016				June 30, 2015
	Average		Interest		Average		Interest
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate	$	706	$	—	$	1,928	$	4
Construction, land development, land		138		2		—		—
1-4 family residential properties		775		4		647		32
Farmland		—		—		—		—
Commercial		10,593		247		4,992		119
Factored receivables		3,309		—		1,958		—
Consumer		16		—		—		—
Mortgage warehouse		—		—		—		—
PCI		983		—		263		—
	$	16,520	$	253	$	9,788	$	155

Schedule of Recorded Investment and Unpaid Principal Balances

The following table presents the unpaid principal and recorded investment for loans at June 30, 2016 and December 31, 2015. The difference between the unpaid principal balance and recorded investment is principally associated with (1) premiums and discounts associated with acquisition date fair value adjustments on acquired loans (both PCI and non-PCI), (2) net deferred origination costs and fees, and (3) previous charge-offs.

(Dollars in thousands)	Recorded		Unpaid
June 30, 2016	Investment		Principal		Difference
Commercial real estate	$	298,991	$	301,586	$	(2,595	)
Construction, land development, land		36,498		37,972		(1,474	)
1-4 family residential properties		74,121		76,456		(2,335	)
Farmland		35,795		35,741		54
Commercial		574,508		575,213		(705	)
Factored receivables		237,520		238,660		(1,140	)
Consumer		17,339		17,321		18
Mortgage warehouse		135,746		135,746		—
	$	1,410,518	$	1,418,695	$	(8,177	)
	Recorded		Unpaid
December 31, 2015	Investment		Principal		Difference
Commercial	$	291,819	$	299,272	$	(7,453	)
Construction, land development, land		43,876		45,376		(1,500	)
1-4 family residential properties		78,244		81,141		(2,897	)
Farmland		33,573		33,533		40
Commercial		495,356		496,719		(1,363	)
Factored receivables		215,088		216,201		(1,113	)
Consumer		13,050		13,072		(22	)
Mortgage warehouse		120,879		120,879		—
	$	1,291,885	$	1,306,193	$	(14,308	)

Summary of Contractually Past Due and Nonaccrual Loans

Past Due and Nonaccrual Loans

The following is a summary of contractually past due and nonaccrual loans at June 30, 2016 and December 31, 2015:

			Past Due 90
(Dollars in thousands)	30-89 Days		Days or More
June 30, 2016	Past Due		Still Accruing		Nonaccrual		Total
Commercial real estate	$	—	$	—	$	687	$	687
Construction, land development, land		—		—		275		275
1-4 family residential properties		320		—		949		1,269
Farmland		—		—		—		—
Commercial		6,377		174		8,666		15,217
Factored receivables		12,703		2,260		—		14,963
Consumer		375		—		34		409
Mortgage warehouse		—		—		—		—
PCI		102		786		5,771		6,659
	$	19,877	$	3,220	$	16,382	$	39,479
			Past Due 90
(Dollars in thousands)	30-89 Days		Days or More
December 31, 2015	Past Due		Still Accruing		Nonaccrual		Total
Commercial real estate	$	693	$	—	$	673	$	1,366
Construction, land development, land		—		—		—		—
1-4 family residential properties		909		9		533		1,451
Farmland		—		—		—		—
Commercial		3,704		—		2,021		5,725
Factored receivables		12,379		1,931		—		14,310
Consumer		286		—		—		286
Mortgage warehouse		—		—		—		—
PCI		1,092		—		6,867		7,959
	$	19,063	$	1,940	$	10,094	$	31,097

Schedule of Nonperforming Loans

The following table presents information regarding nonperforming loans at the dates indicated:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Nonaccrual loans(1)	$	16,382	$	10,094
Factored receivables greater than 90 days past due		2,260		1,931
Troubled debt restructurings accruing interest		3,359		1,330
	$	22,001	$	13,355

⁽¹⁾ Includes troubled debt restructurings of $2,789,000 and $53,000 at June 30, 2016 and December 31, 2015, respectively.

Summary of Risk Category of Loans

As of June 30, 2016 and December 31, 2015, based on the most recent analysis performed, the risk category of loans is as follows:

(Dollars in thousands)
June 30, 2016	Pass		Substandard		Doubtful		PCI		Total
Commercial real estate	$	294,273	$	997	$	—	$	3,721	$	298,991
Construction, land development, land		35,121		275		—		1,102		36,498
1-4 family residential		70,489		920		—		2,712		74,121
Farmland		35,795		—		—		—		35,795
Commercial		546,663		24,906		—		2,939		574,508
Factored receivables		234,313		2,239		968		—		237,520
Consumer		17,303		36		—		—		17,339
Mortgage warehouse		135,746		—		—		—		135,746
	$	1,369,703	$	29,373	$	968	$	10,474	$	1,410,518
(Dollars in thousands)
December 31, 2015	Pass		Substandard		Doubtful		PCI		Total
Commercial real estate	$	284,753	$	1,977	$	—	$	5,089	$	291,819
Construction, land development, land		42,499		—		—		1,377		43,876
1-4 family residential		73,838		1,494		—		2,912		78,244
Farmland		33,573		—		—		—		33,573
Commercial		470,208		21,295		—		3,853		495,356
Factored receivables		212,588		1,019		1,481		—		215,088
Consumer		13,050		—		—		—		13,050
Mortgage warehouse		120,879		—		—		—		120,879
	$	1,251,388	$	25,785	$	1,481	$	13,231	$	1,291,885

Schedule of Loans Modified as Troubled Debt Restructurings

The following table presents loans modified as troubled debt restructurings that occurred during the six months ended June 30, 2016 and 2015:

			Pre-Modification		Post-Modification
			Outstanding		Outstanding
(Dollars in thousands)	Number of		Recorded		Recorded
June 30, 2016	Loans		Investment		Investment
Commercial		16	$	5,730	$	5,730

			Pre-Modification		Post-Modification
			Outstanding		Outstanding
(Dollars in thousands)	Number of		Recorded		Recorded
June 30, 2015	Loans		Investment		Investment
Commercial		1	$	148	$	148

Schedule of Outstanding Contractually Required Principal and Interest and Carrying Amount of PCI Loans Receivable

The outstanding contractually required principal and interest and the carrying amount of these loans included in the balance sheet amounts of loans at June 30, 2016 and December 31, 2015, are as follows:

	June 30,		December 31,
	2016		2015
Contractually required principal and interest:
Real estate loans	$	13,277	$	17,800
Commercial loans		4,032		5,335
Outstanding contractually required principal and interest	$	17,309	$	23,135
Gross carrying amount included in loans receivable	$	10,474	$	13,231

Schedule of Changes in Accretable Yield for the PCI Loans

The changes in accretable yield during the three and six months ended June 30, 2016 and 2015 in regard to loans transferred at acquisition for which it was probable that all contractually required payments would not be collected are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Accretable yield, beginning balance	$	2,064		$	4,496		$	2,593		$	4,977
Additions		—			—			—			—
Accretion		(1,518	)		(1,031	)		(2,034	)		(1,460	)
Reclassification from nonaccretable to accretable yield		646			585			646			585
Disposals		—			(147	)		(13	)		(199	)
Accretable yield, ending balance	$	1,192		$	3,903		$	1,192		$	3,903

XML

Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

Goodwill and intangible assets consist of the following:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Goodwill	$	15,968	$	15,968

	June 30, 2016							December 31, 2015
	Gross Carrying		Accumulated			Net Carrying		Gross Carrying		Accumulated			Net Carrying
(Dollars in thousands)	Amount		Amortization			Amount		Amount		Amortization			Amount
Core deposit intangibles	$	14,586	$	(6,855	)	$	7,731	$	14,586	$	(5,765	)	$	8,821
Other intangible assets		4,830		(2,369	)		2,461		4,830		(1,765	)		3,065
	$	19,416	$	(9,224	)	$	10,192	$	19,416	$	(7,530	)	$	11,886

Schedule of Changes in Goodwill and Intangible Assets

The changes in goodwill and intangible assets during the three and six months ended June 30, 2016 and 2015 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015			2016			2015
Beginning balance	$	26,877		$	30,211		$	27,854		$	29,057
Acquired intangibles		—			858			—			2,776
Amortization of intangibles		(717	)		(895	)		(1,694	)		(1,659	)
Ending balance	$	26,160		$	30,174		$	26,160		$	30,174

XML

Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Variable Interest Entities

The following table summarizes the closed CLO offerings with assets managed by TCA:

	Offering	Offering
(Dollars in thousands)	Date	Amount
Trinitas CLO I, LTD (Trinitas I)	May 1, 2014	$	400,000
Trinitas CLO II, LTD (Trinitas II)	August 4, 2014	$	416,000
Doral CLO III, LTD (Doral III)(1)	December 17, 2012	$	310,800
Trinitas CLO III, LTD (Trinitas III)	June 9, 2015	$	409,375

Non-Managed CLO Assets

Schedule of Variable Interest Entities

The following table summarizes the closed CLO offerings for which TCA is not the asset manager, but provides certain middle- and back-office services to the asset manager:

	Offering	Offering
(Dollars in thousands)	Date	Amount
Trinitas CLO IV, LTD (Trinitas IV)	June 2, 2016	$	406,650

XML

Deposits (Tables)

6 Months Ended

Jun. 30, 2016

Deposits [Abstract]

Summary Of Deposits

Deposits at June 30, 2016 and December 31, 2015 are summarized as follows:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Noninterest bearing demand	$	170,834	$	168,264
Interest bearing demand		235,877		238,833
Individual retirement accounts		64,204		60,971
Money market		120,929		112,214
Savings		77,625		74,759
Certificates of deposit		555,710		543,909
Brokered deposits		49,975		50,000
Total Deposits	$	1,275,154	$	1,248,950

Scheduled Maturities of Certificate of Deposits, Individual Retirement Accounts and Brokered Deposits

At June 30, 2016, scheduled maturities of certificates of deposits, individual retirement accounts and brokered deposits are as follows:

(Dollars in thousands)	June 30, 2016
Within one year	$	510,421
After one but within two years		120,524
After two but within three years		21,961
After three but within four years		10,956
After four but within five years		6,027
Total	$	669,889

XML

Off-Balance Sheet Loan Commitments (Tables)

6 Months Ended

Jun. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Summary of Financial Instruments with Off-Balance Sheet Risk

The contractual amounts of financial instruments with off-balance sheet risk were as follows:

	June 30, 2016				December 31, 2015
(Dollars in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	25,881	$	3,950	$	6,571	$	2,949
Unused lines of credit		45,862		86,396		35,514		81,189
Standby letters of credit		1,072		2,169		1,030		1,999

XML

Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on a Recurring Basis

There were no liabilities measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015.

(Dollars in thousands)	Fair Value Measurements Using						Total
June 30, 2016	Level 1		Level 2		Level 3		Fair Value
Securities available for sale	$	—	$	159,790	$	—	$	159,790
(Dollars in thousands)	Fair Value Measurements Using						Total
December 31, 2015	Level 1		Level 2		Level 3		Fair Value
Securities available for sale	$	—	$	163,169	$	—	$	163,169
Loans held for sale		—		1,341		—		1,341

Fair Value of Assets Measured on Non-recurring Basis

There were no liabilities measured at fair value on a non-recurring basis at June 30, 2016 and December 31, 2015.

(Dollars in thousands)	Fair Value Measurements Using						Total
June 30, 2016	Level 1		Level 2		Level 3		Fair Value
Impaired loans
Commercial real estate	$	—	$	—	$	417	$	417
Construction, land development, land		—		—		250		250
1-4 family residential properties		—		—		9		9
Commercial		—		—		5,117		5,117
Factored receivables		—		—		665		665
PCI		—		—		1,001		1,001
Other real estate owned (1)
Commercial		—		—		698		698
Construction, land development, land		—		—		253		253
1-4 family residential properties		—		—		124		124
	$	—	$	—	$	8,534	$	8,534
(Dollars in thousands)	Fair Value Measurements Using						Total
December 31, 2015	Level 1		Level 2		Level 3		Fair Value
Impaired loans
Commercial real estate	$	—	$	—	$	431	$	431
1-4 family residential properties		—		—		13		13
Commercial		—		—		695		695
Factored receivables		—		—		1,156		1,156
PCI		—		—		170		170
Other real estate owned (1)
1-4 family residential properties		—		—		128		128
Construction, land development, land		—		—		1,377		1,377
	$	—	$	—	$	3,970	$	3,970

⁽¹⁾ Represents the fair value of OREO that was adjusted during the period and subsequent to its initial classification as OREO

Estimated Fair Value of Company's Financial Assets and Financial Liabilities

The estimated fair values of the Company’s financial instruments at June 30, 2016 and December 31, 2015 were as follows:

(Dollars in thousands)	Carrying		Fair Value Measurements Using						Total
June 30, 2016	Amount		Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and cash equivalents	$	61,750	$	61,750	$	—	$	—	$	61,750
Securities - held to maturity		27,502		—		26,713		1,649		28,362
Loans not previously presented, net		1,389,287		—		—		1,392,276		1,392,276
FHLB stock		6,368	N/A		N/A		N/A		N/A
Accrued interest receivable		5,260		—		5,260		—		5,260
Financial liabilities:
Deposits		1,275,154		—		1,277,777		—		1,277,777
Customer repurchase agreements		13,635		—		13,635		—		13,635
Federal Home Loan Bank advances		180,500				180,497				180,497
Junior subordinated debentures		24,823		—		25,477		—		25,477
Accrued interest payable		1,348		—		1,348		—		1,348
(Dollars in thousands)	Carrying		Fair Value Measurements Using						Total
December 31, 2015	Amount		Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and cash equivalents	$	105,277	$	105,277	$	—	$	—	$	105,277
Loans not previously presented, net		1,276,853		—		—		1,281,408		1,281,408
FHLB stock		3,818	N/A		N/A		N/A		N/A
Accrued interest receivable		4,832		—		4,832		—		4,832
Financial liabilities:
Deposits		1,248,950		—		1,249,751		—		1,249,751
Customer repurchase agreements		9,317		—		9,317		—		9,317
Federal Home Loan Bank advances		130,000		—		130,000		—		130,000
Junior subordinated debentures		24,687		—		23,153		—		23,153
Accrued interest payable		1,231		—		1,231		—		1,231

XML

Regulatory Matters (Tables)

6 Months Ended

Jun. 30, 2016

Regulatory Capital Requirements [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

The actual capital amounts and ratios for the Company and TBK Bank are presented in the following table as of June 30, 2016 and December 31, 2015.  

					To Be Adequately				To Be Well
					Capitalized Under				Capitalized Under
					Prompt Corrective				Prompt Corrective
(Dollars in thousands)	Actual				Action Provisions				Action Provisions
As of June 30, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	288,194		18.0%	$	127,944		8.0%	N/A		N/A
TBK Bank, SSB	$	215,780		14.0%	$	122,948		8.0%	$	153,685		10.0%
Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	274,253		17.1%	$	95,958		6.0%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	92,211		6.0%	$	122,948		8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	243,086		15.2%	$	71,968		4.5%	N/A		N/A
TBK Bank, SSB	$	201,915		13.1%	$	69,158		4.5%	$	99,895		6.5%
Tier 1 capital (to average assets)
Triumph Bancorp, Inc.	$	274,253		16.0%	$	68,494		4.0%	N/A		N/A
TBK Bank, SSB	$	201,915		12.3%	$	65,902		4.0%	$	82,378		5.0%
As of December 31, 2015
Total capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	276,924		19.1%	$	115,929		8.0%	N/A		N/A
TBK Bank, SSB	$	205,978		14.7%	$	111,869		8.0%	$	139,836		10.0%
Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	264,239		18.2%	$	86,968		6.0%	N/A		N/A
TBK Bank, SSB	$	193,293		13.8%	$	83,919		6.0%	$	111,892		8.0%
Common equity Tier 1 capital (to risk weighted assets)
Triumph Bancorp, Inc.	$	235,253		16.2%	$	65,227		4.5%	N/A		N/A
TBK Bank, SSB	$	193,293		13.8%	$	62,939		4.5%	$	90,912		6.5%
Tier 1 capital (to average assets)
Triumph Bancorp, Inc.	$	264,239		16.6%	$	63,824		4.0%	N/A		N/A
TBK Bank, SSB	$	193,293		12.7%	$	61,024		4.0%	$	76,280		5.0%

XML

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Summary of Capital Structure

The following summarizes the capital structure of Triumph Bancorp, Inc.

	Preferred Stock
	Series A						Series B						Common Stock				Treasury Stock
	June			December			June			December			June		December		June		December
	2016			2015			2016			2015			2016		2015		2016		2015
Number of shares authorized		50,000			50,000			115,000			115,000			50,000,000		50,000,000
Number of shares issued		45,500			45,500			51,956			51,956			18,153,828		18,052,723
Number of shares outstanding		45,500			45,500			51,956			51,956			18,107,493		18,018,200		46,335		34,523
Par value per share	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01	$	0.01
Liquidation preference per share	$	100		$	100		$	100		$	100
Dividend rate	Prime + 2%			Prime + 2%				8.00	%		8.00	%
Dividend rate - floor		8.00	%		8.00	%		8.00	%		8.00	%
Subsequent dividend payment dates	Quarterly			Quarterly			Quarterly			Quarterly
Convertible to common stock	Yes			Yes			Yes			Yes
Conversion period	Anytime			Anytime			Anytime			Anytime
Conversion ratio - preferred to common	6.94008			6.94008			6.94008			6.94008

XML

Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Changes in Company's Nonvested 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, 2016 were as follows:

				Weighted-Average
				Grant-Date
Nonvested RSAs	Shares			Fair Value
Nonvested at January 1, 2016		201,270		$	14.24
Granted		101,105			15.87
Vested		(47,727	)		14.60
Forfeited		(6,759	)		15.02
Nonvested at June 30, 2016		247,889		$	14.82

Summary of Changes in Company's 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, 2016 were as follows:

			Weighted-Average
Stock Options	Shares		Exercise Price
Outstanding at January 1, 2016		—	$	—
Granted		164,175		15.87
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2016		164,175	$	15.87

Fair Value of Stock Options Granted Weighted-Average Assumptions

The fair value of the stock options granted was determined using the following weighted-average assumptions:

	2016
Risk-free interest rate		1.49	%
Expected Term	6.25 Years
Expected stock price volatility		34.96	%
Dividend yield		—

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Factors Used in Computation of 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)	2016		2015		2016		2015
Basic
Net income to common stockholders	$	4,431	$	4,457	$	9,243	$	18,309
Weighted average common shares outstanding		17,859,604		17,711,527		17,838,267		17,711,527
Basic earnings per common share	$	0.25	$	0.25	$	0.52	$	1.03
Diluted
Net income to common stockholders	$	4,431	$	4,457	$	9,243	$	18,309
Dilutive effect of preferred stock		—		—		—		387
Net income to common stockholders - diluted	$	4,431	$	4,457	$	9,243	$	18,696
Weighted average common shares outstanding		17,859,604		17,711,527		17,838,267		17,711,527
Add:  Dilutive effects of restricted stock		112,880		71,022		113,334		41,492
Add:  Dilutive effects of assumed exercises of stock warrants		70,101		31,276		60,330		30,050
Add:  Dilutive effects of assumed conversion of Preferred A		—		—		—		315,773
Add:  Dilutive effects of assumed conversion of Preferred B		—		—		—		360,578
Average shares and dilutive potential common shares		18,042,585		17,813,825		18,011,931		18,459,420
Dilutive earnings per common share	$	0.25	$	0.25	$	0.51	$	1.01

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,
	2016		2015		2016		2015
Shares assumed to be converted from Preferred Stock Series A		315,773		315,773		315,773		—
Shares assumed to be converted from Preferred Stock Series B		360,578		360,578		360,578		—
Restricted stock awards		76,362		—		76,362		—
Stock options		164,175		—		164,175		—

XML

Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

(Dollars in thousands)						Asset
Three Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	7,939		$	20,109	$	33	$	273		$	28,354
Intersegment interest allocations		(1,099	)		1,099		—		—			—
Total interest expense		—			2,135		—		312			2,447
Net interest income (expense)		6,840			19,073		33		(39	)		25,907
Provision for loan losses		555			1,392		—		(8	)		1,939
Net interest income after provision		6,285			17,681		33		(31	)		23,968
Other noninterest income		496			822		1,614		736			3,668
Noninterest expense		4,962			13,405		1,213		751			20,331
Operating income (loss)	$	1,819		$	5,098	$	434	$	(46	)	$	7,305

(Dollars in thousands)						Asset
Three Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	8,275		$	18,189	$	5	$	128		$	26,597
Intersegment interest allocations		(1,017	)		1,017		—		—			—
Total interest expense		—			1,674		—		278			1,952
Net interest income (expense)		7,258			17,532		5		(150	)		24,645
Provision for loan losses		477			1,971		—		93			2,541
Net interest income after provision		6,781			15,561		5		(243	)		22,104
Other noninterest income		450			2,708		1,352		259			4,769
Noninterest expense		4,450			12,707		809		1,669			19,635
Operating income (loss)	$	2,781		$	5,562	$	548	$	(1,653	)	$	7,238

(Dollars in thousands)						Asset
Six Months Ended June 30, 2016	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,124		$	37,535	$	64	$	524		$	53,247
Intersegment interest allocations		(2,100	)		2,100		—		—			—
Total interest expense		—			4,237		—		614			4,851
Net interest income (expense)		13,024			35,398		64		(90	)		48,396
Provision for loan losses		85			1,267		—		76			1,428
Net interest income after provision		12,939			34,131		64		(166	)		46,968
Other noninterest income		942			2,836		3,285		1,586			8,649
Noninterest expense		9,535			26,987		2,559		1,328			40,409
Operating income (loss)	$	4,346		$	9,980	$	790	$	92		$	15,208

(Dollars in thousands)						Asset
Six Months Ended June 30, 2015	Factoring			Banking		Management		Corporate			Consolidated
Total interest income	$	15,503		$	32,424	$	65	$	184		$	48,176
Intersegment interest allocations		(1,926	)		1,926		—		—			—
Total interest expense		—			3,246		10		550			3,806
Net interest income		13,577			31,104		55		(366	)		44,370
Provision for loan losses		368			2,725		—		93			3,186
Net interest income after provision		13,209			28,379		55		(459	)		41,184
Bargain purchase gain		—			—		12,509		—			12,509
Other noninterest income		781			5,293		2,309		536			8,919
Noninterest expense		8,762			25,107		3,435		3,114			40,418
Operating income (loss)	$	5,228		$	8,565	$	11,438	$	(3,037	)	$	22,194

(Dollars in thousands)					Asset
June 30, 2016	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	216,649	$	1,708,861	$	15,208	$	311,887	$	(469,210	)	$	1,783,395
Gross loans	$	206,256	$	1,338,314	$	889	$	13,809	$	(148,750	)	$	1,410,518
(Dollars in thousands)					Asset
December 31, 2015	Factoring		Banking		Management		Corporate		Eliminations			Consolidated
Total assets	$	198,629	$	1,601,072	$	17,676	$	303,253	$	(429,317	)	$	1,691,313
Gross loans	$	186,457	$	1,223,028	$	945	$	18,455	$	(137,000	)	$	1,291,885

XML

Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2016 Segments
Accounting Policies [Abstract]
Number of reportable segments	4

XML

Business Combinations - Additional Information (Details) - USD ($) $ in Thousands					3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 01, 2016	Mar. 03, 2015	Feb. 27, 2015	Feb. 26, 2015	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Business Acquisition [Line Items]
Securities transferred in satisfaction of other borrowings								$ 98,316
Repayment of other borrowings								1,659
Business acquisition, bargain purchase gain								$ 12,509
ColoEast Bankshares, Inc. | Scenario, Forecast
Business Acquisition [Line Items]
Business acquisition, percentage of voting interests acquired	100.00%
Cash paid for business acquisition	$ 70,000
Doral Money Acquisition
Business Acquisition [Line Items]
Business acquisition, percentage of voting interests acquired			100.00%
CLO management contract acquired - Assets under management			$ 700,000
Total consideration transferred			$ 135,864						$ 135,864
Business acquisition, bargain purchase gain									15,117
Doral Money Acquisition | Secured term loan credit facility
Business Acquisition [Line Items]
Other borrowings payable to third party				$ 99,975
Debt instrument maturity date				Mar. 31, 2015
Repayment of debt instrument		$ 99,975
Securities transferred in satisfaction of other borrowings		98,316
Repayment of other borrowings		$ 1,659
Doral Money Acquisition | Secured term loan credit facility | London Interbank Offered Rate (LIBOR)
Business Acquisition [Line Items]
Debt instrument, marginal interest rate				3.50%
Debt instrument, interest rate description							LIBOR plus 3.5%
Doral Money Acquisition | Measurement Period Adjustments
Business Acquisition [Line Items]
Business acquisition, bargain purchase gain					$ 900	$ 1,708			$ 2,608

XML

Business Combinations - Summary of Fair Values of the Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended	12 Months Ended
	Mar. 03, 2015	Feb. 27, 2015	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2015
Liabilities assumed:
Bargain purchase gain					$ (12,509)
Doral Money Acquisition
Assets acquired:
Cash			$ 8,273			$ 8,273
CLO Securities			98,316			98,316
Loans			37,665			37,665
Prepaid corporate income tax			4,702			4,702
Other assets			772			772
Total Assets Acquired			151,646			151,646
Liabilities assumed:
Deferred tax liability			663			663
Other liabilities			2			2
Total liabilities			665			665
Fair value of net assets acquired			150,981			150,981
Net consideration transferred		$ 135,864				135,864
Bargain purchase gain						(15,117)
Initial Values Recorded at Acquisition Date | Doral Money Acquisition
Assets acquired:
Cash	$ 8,273
CLO Securities	98,316
Loans	36,765
Prepaid corporate income tax	3,014
Other assets	772
Total Assets Acquired	149,058
Liabilities assumed:
Deferred tax liability	663
Other liabilities	22
Total liabilities	685
Fair value of net assets acquired	148,373
Net consideration transferred	135,864
Bargain purchase gain	(12,509)
Measurement Period Adjustments | Doral Money Acquisition
Assets acquired:
Loans			900			900
Prepaid corporate income tax			1,688			1,688
Total Assets Acquired			2,588			2,588
Liabilities assumed:
Other liabilities			(20)			(20)
Total liabilities			(20)			(20)
Fair value of net assets acquired			2,608			2,608
Bargain purchase gain			(900)	$ (1,708)		(2,608)
CLO Management Contracts | Doral Money Acquisition
Assets acquired:
Intangible assets			$ 1,918			$ 1,918
CLO Management Contracts | Initial Values Recorded at Acquisition Date | Doral Money Acquisition
Assets acquired:
Intangible assets	$ 1,918

XML

Securities - Schedule of Amortized Cost of Securities and Their Approximate Fair Values (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Available for sale securities:
Available for sale securities, Amortized Cost	$ 157,363	$ 162,730
Available for sale securities, Gross Unrealized Gains	2,773	995
Available for sale securities, Gross Unrealized Losses	(346)	(556)
Available for sale securities, Fair Value	159,790	163,169
Held to maturity securities:
Held to maturity securities, Amortized Cost	27,502
Held to maturity securities, Fair Value	28,362	0
U.S. Government Agency Obligations
Available for sale securities:
Available for sale securities, Amortized Cost	90,388	90,533
Available for sale securities, Gross Unrealized Gains	1,749	518
Available for sale securities, Gross Unrealized Losses		(17)
Available for sale securities, Fair Value	92,137	91,034
Mortgage-backed Securities, Residential
Available for sale securities:
Available for sale securities, Amortized Cost	25,004	28,006
Available for sale securities, Gross Unrealized Gains	623	361
Available for sale securities, Gross Unrealized Losses		(27)
Available for sale securities, Fair Value	25,627	28,340
Asset Backed Securities
Available for sale securities:
Available for sale securities, Amortized Cost	13,179	17,957
Available for sale securities, Gross Unrealized Gains	12	24
Available for sale securities, Gross Unrealized Losses	(335)	(455)
Available for sale securities, Fair Value	12,856	17,526
State and Municipal
Available for sale securities:
Available for sale securities, Amortized Cost	1,266	1,509
Available for sale securities, Gross Unrealized Gains	36	17
Available for sale securities, Fair Value	1,302	1,526
Corporate Bonds
Available for sale securities:
Available for sale securities, Amortized Cost	27,358	24,542
Available for sale securities, Gross Unrealized Gains	351	74
Available for sale securities, Gross Unrealized Losses	(11)	(57)
Available for sale securities, Fair Value	27,698	24,559
SBA Pooled Securities
Available for sale securities:
Available for sale securities, Amortized Cost	168	183
Available for sale securities, Gross Unrealized Gains	2	1
Available for sale securities, Fair Value	170	$ 184
CLO Securities
Held to maturity securities:
Held to maturity securities, Amortized Cost	27,502
Held to maturity securities, Gross Unrealized Gains	860
Held to maturity securities, Fair Value	$ 28,362

XML

Securities - Schedule of Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Available for Sale Securities, Amortized Cost
Due in one year or less, Amortized Cost	$ 31,040
Due from one year to five years, Amortized Cost	86,162
Due from five years to ten years, Amortized Cost	1,534
Due after ten years, Amortized Cost	276
Available for Sale Securities, with single maturity date, Amortized Cost	119,012
Available for sale securities, Amortized Cost	157,363	$ 162,730
Available for Sale Securities, Fair Value
Due in one year or less, Fair Value	31,136
Due from one year to five years, Fair Value	88,132
Due from five years to ten years, Fair Value	1,538
Due after ten years, Fair Value	331
Available for Sale Securities, with single maturity date, Fair Value	121,137
Available for Sale Securities, Fair Value	159,790	163,169
Held to Maturity Securities, Amortized Cost
Due after ten years, Amortized Cost	27,502
Held to Maturity Securities, with single maturity date, Amortized Cost	27,502
Held to Maturity Securities, Amortized Cost	27,502
Held to Maturity Securities, Fair Value
Due after ten years, Fair Value	28,362
Held to Maturity Securities, with single maturity date, Fair Value	28,362
Held to Maturity Securities, Fair Value	28,362	0
Mortgage-backed Securities, Residential
Available for Sale Securities, Amortized Cost
Available for Sale Securities, without single maturity date, Amortized Cost	25,004
Available for sale securities, Amortized Cost	25,004	28,006
Available for Sale Securities, Fair Value
Available for Sale Securities, without single maturity date, Fair Value	25,627
Available for Sale Securities, Fair Value	25,627	28,340
Asset Backed Securities
Available for Sale Securities, Amortized Cost
Available for Sale Securities, without single maturity date, Amortized Cost	13,179
Available for sale securities, Amortized Cost	13,179	17,957
Available for Sale Securities, Fair Value
Available for Sale Securities, without single maturity date, Fair Value	12,856
Available for Sale Securities, Fair Value	12,856	17,526
SBA Pooled Securities
Available for Sale Securities, Amortized Cost
Available for Sale Securities, without single maturity date, Amortized Cost	168
Available for sale securities, Amortized Cost	168	183
Available for Sale Securities, Fair Value
Available for Sale Securities, without single maturity date, Fair Value	170
Available for Sale Securities, Fair Value	$ 170	$ 184

XML

Securities - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investments Debt And Equity Securities [Abstract]
Proceeds from sales of securities available for sale	$ 0	$ 12,559,000	$ 4,345,000	$ 12,559,000
Gross gains on sale of securities		242,000	5,000	242,000
Gross losses on sale of securities		$ 0	0	$ 0
Pledged securities, at carrying value	$ 98,969,000		$ 98,969,000		$ 100,034,000

XML

Securities - Schedule of Information Pertaining to Securities with Gross Unrealized Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule Of Available For Sale Securities [Line Items]
Less than 12 Months, Fair Value	$ 9,342	$ 33,442
Less than 12 Months, Unrealized Losses	(346)	(517)
12 Months or More, Fair Value		4,605
12 Months or More, Unrealized Losses		(39)
Total, Fair Value	9,342	38,047
Total, Unrealized Losses	(346)	(556)
U.S. Government Agency Obligations
Schedule Of Available For Sale Securities [Line Items]
Less than 12 Months, Fair Value		10,029
Less than 12 Months, Unrealized Losses		(17)
Total, Fair Value		10,029
Total, Unrealized Losses		(17)
Mortgage-backed Securities, Residential
Schedule Of Available For Sale Securities [Line Items]
Less than 12 Months, Fair Value		4,948
Less than 12 Months, Unrealized Losses		(27)
Total, Fair Value		4,948
Total, Unrealized Losses		(27)
Asset Backed Securities
Schedule Of Available For Sale Securities [Line Items]
Less than 12 Months, Fair Value	7,947	8,031
Less than 12 Months, Unrealized Losses	(335)	(416)
12 Months or More, Fair Value		4,605
12 Months or More, Unrealized Losses		(39)
Total, Fair Value	7,947	12,636
Total, Unrealized Losses	(335)	(455)
Corporate Bonds
Schedule Of Available For Sale Securities [Line Items]
Less than 12 Months, Fair Value	1,395	10,434
Less than 12 Months, Unrealized Losses	(11)	(57)
Total, Fair Value	1,395	10,434
Total, Unrealized Losses	$ (11)	$ (57)

XML

Loans and Allowance for Loan and Lease Losses - Summary of Information Concerning Loan Portfolio (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Accounts Notes And Loans Receivable [Line Items]
Loans	$ 1,410,518		$ 1,291,885
Allowance for loan and lease losses	(13,772)	$ (12,093)	(12,567)	$ (11,462)	$ (9,286)	$ (8,843)
Loans, net	1,396,746		1,279,318
Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
Loans	298,991		291,819
Allowance for loan and lease losses	(1,792)	(1,619)	(1,489)	(1,214)	(1,075)	(533)
Construction, land development, land
Accounts Notes And Loans Receivable [Line Items]
Loans	36,498		43,876
Allowance for loan and lease losses	(181)	(198)	(367)	(346)	(344)	(333)
1-4 family residential properties
Accounts Notes And Loans Receivable [Line Items]
Loans	74,121		78,244
Allowance for loan and lease losses	(259)	(285)	(274)	(251)	(223)	(215)
Farmland
Accounts Notes And Loans Receivable [Line Items]
Loans	35,795		33,573
Allowance for loan and lease losses	(143)	(133)	(134)	(28)	(26)	(19)
Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Loans	574,508		495,356
Allowance for loan and lease losses	(6,697)	(5,331)	(5,276)	(5,064)	(3,996)	(4,003)
Factored receivables
Accounts Notes And Loans Receivable [Line Items]
Loans	237,520		215,088
Allowance for loan and lease losses	(4,204)	(4,110)	(4,509)	(4,135)	(3,380)	(3,462)
Consumer
Accounts Notes And Loans Receivable [Line Items]
Loans	17,339		13,050
Allowance for loan and lease losses	(293)	(222)	(216)	(160)	(84)	(140)
Mortgage warehouse
Accounts Notes And Loans Receivable [Line Items]
Loans	135,746		120,879
Allowance for loan and lease losses	$ (203)	$ (195)	$ (302)	$ (264)	$ (158)	$ (138)

XML

Loans and Allowance for Loan and Lease Losses - Additional Information (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($) loan	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Accounts Notes And Loans Receivable [Line Items]
Net deferred origination and factoring fees	$ 1,114,096	$ 1,114,096		$ 1,218,000
Pledged loans	290,975,000	290,975,000		280,289,000
Loans transferred to loans held for sale	1,238,000	4,119,000	$ 0
Loans transferred to loans held for sale at fair value	1,233,000	4,038,000
Recorded investments in troubled debt restructurings	6,148,000	$ 6,148,000		1,383,000
Number of defaults on modified loans | loan		0
Factored receivables
Accounts Notes And Loans Receivable [Line Items]
Customer reserves	23,854,000	$ 23,854,000		$ 21,188,000
Other non interest income
Accounts Notes And Loans Receivable [Line Items]
Decline in fair value of loans held sale	$ 5,000	$ 81,000

XML

Loans and Allowance for Loan and Lease Losses - Summary of Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	$ 12,093	$ 9,286	$ 12,567	$ 8,843
Provision for loan losses	1,939	2,541	1,428	3,186
Charge-offs	(779)	(541)	(846)	(899)
Recoveries	519	176	623	332
Ending Balance	13,772	11,462	13,772	11,462
Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	1,619	1,075	1,489	533
Provision for loan losses	161	183	290	773
Charge-offs	(1)	(54)	(1)	(143)
Recoveries	13	10	14	51
Ending Balance	1,792	1,214	1,792	1,214
Construction, land development, land
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	198	344	367	333
Provision for loan losses	(17)	2	(186)	13
Ending Balance	181	346	181	346
1-4 family residential properties
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	285	223	274	215
Provision for loan losses	(50)	29	(28)	119
Charge-offs	(47)	(78)	(63)	(183)
Recoveries	71	77	76	100
Ending Balance	259	251	259	251
Farmland
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	133	26	134	19
Provision for loan losses	10	2	9	9
Ending Balance	143	28	143	28
Commercial Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	5,331	3,996	5,276	4,003
Provision for loan losses	1,134	1,109	1,159	1,102
Charge-offs	(169)	(45)	(169)	(47)
Recoveries	401	4	431	6
Ending Balance	6,697	5,064	6,697	5,064
Factored receivables
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	4,110	3,380	4,509	3,462
Provision for loan losses	524	1,049	84	1,004
Charge-offs	(450)	(312)	(458)	(379)
Recoveries	20	18	69	48
Ending Balance	4,204	4,135	4,204	4,135
Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	222	84	216	140
Provision for loan losses	169	61	199	40
Charge-offs	(112)	(52)	(155)	(147)
Recoveries	14	67	33	127
Ending Balance	293	160	293	160
Mortgage warehouse
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	195	158	302	138
Provision for loan losses	8	106	(99)	126
Ending Balance	$ 203	$ 264	$ 203	$ 264

XML

Loans and Allowance for Loan and Lease Losses - Summary of Individual and Collective Allowance for Loan Losses and Loan Balances by Class (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Individually	$ 18,393		$ 12,680
Loan Evaluation, Collectively	1,381,651		1,265,974
Loan, Total	1,410,518		1,291,885
ALLL Allocations, Individually	3,488		2,591
ALLL Allocations, Collectively	9,843		9,621
ALLL Allocations, Total ALLL	13,772	$ 12,093	12,567	$ 11,462	$ 9,286	$ 8,843
Purchase Credit Impaired
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, PCI	10,474		13,231
ALLL Allocations, PCI	441		355
Commercial real estate
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Individually	687		724
Loan Evaluation, Collectively	294,583		286,006
Loan, Total	298,991		291,819
ALLL Allocations, Individually	100		100
ALLL Allocations, Collectively	1,251		1,034
ALLL Allocations, Total ALLL	1,792	1,619	1,489	1,214	1,075	533
Commercial real estate | Purchase Credit Impaired
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, PCI	3,721		5,089
ALLL Allocations, PCI	441		355
Construction, land development, land
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Individually	275
Loan Evaluation, Collectively	35,121		42,499
Loan, Total	36,498		43,876
ALLL Allocations, Individually	25
ALLL Allocations, Collectively	156		367
ALLL Allocations, Total ALLL	181	198	367	346	344	333
Construction, land development, land | Purchase Credit Impaired
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, PCI	1,102		1,377
1-4 family residential properties
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Individually	920		618
Loan Evaluation, Collectively	70,489		74,714
Loan, Total	74,121		78,244
ALLL Allocations, Individually	1		1
ALLL Allocations, Collectively	258		273
ALLL Allocations, Total ALLL	259	285	274	251	223	215
1-4 family residential properties | Purchase Credit Impaired
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, PCI	2,712		2,912
Farmland
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Collectively	35,795		33,573
Loan, Total	35,795		33,573
ALLL Allocations, Collectively	143		134
ALLL Allocations, Total ALLL	143	133	134	28	26	19
Commercial Loans
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Individually	13,270		7,916
Loan Evaluation, Collectively	558,299		483,587
Loan, Total	574,508		495,356
ALLL Allocations, Individually	2,047		796
ALLL Allocations, Collectively	4,650		4,480
ALLL Allocations, Total ALLL	6,697	5,331	5,276	5,064	3,996	4,003
Commercial Loans | Purchase Credit Impaired
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, PCI	2,939		3,853
Factored receivables
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Individually	3,207		3,422
Loan Evaluation, Collectively	234,313		211,666
Loan, Total	237,520		215,088
ALLL Allocations, Individually	1,315		1,694
ALLL Allocations, Collectively	2,889		2,815
ALLL Allocations, Total ALLL	4,204	4,110	4,509	4,135	3,380	3,462
Consumer
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Individually	34
Loan Evaluation, Collectively	17,305		13,050
Loan, Total	17,339		13,050
ALLL Allocations, Collectively	293		216
ALLL Allocations, Total ALLL	293	222	216	160	84	140
Mortgage warehouse
Financing Receivable Allowance For Credit Losses [Line Items]
Loan Evaluation, Collectively	135,746		120,879
Loan, Total	135,746		120,879
ALLL Allocations, Collectively	203		302
ALLL Allocations, Total ALLL	$ 203	$ 195	$ 302	$ 264	$ 158	$ 138

XML

Loans and Allowance for Loan and Lease Losses - Summary of Information Pertaining to Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Financing Receivable Impaired [Line Items]
Recorded Investment, With Valuation Allowance	$ 11,388		$ 11,388		$ 5,411
Unpaid Principal, With Valuation Allowance	11,661		11,661		5,448
Related Allowance, With Valuation Allowance	3,929		3,929		2,946
Recorded Investment, Without Valuation Allowance	8,447		8,447		7,794
Unpaid Principal, Without Valuation Allowance	8,613		8,613		8,027
Average Impaired Loans	19,929	$ 9,870	16,520	$ 9,788
Interest Recognized	73	90	253	155
Purchased Credit Impaired Loans
Financing Receivable Impaired [Line Items]
Recorded Investment, With Valuation Allowance	1,442		1,442		525
Unpaid Principal, With Valuation Allowance	1,679		1,679		525
Related Allowance, With Valuation Allowance	441		441		355
Average Impaired Loans	1,432	721	983	263
Commercial real estate
Financing Receivable Impaired [Line Items]
Recorded Investment, With Valuation Allowance	517		517		531
Unpaid Principal, With Valuation Allowance	517		517		532
Related Allowance, With Valuation Allowance	100		100		100
Recorded Investment, Without Valuation Allowance	170		170		193
Unpaid Principal, Without Valuation Allowance	206		206		229
Average Impaired Loans	702	1,926	706	1,928
Interest Recognized		1		4
Construction, land development, land
Financing Receivable Impaired [Line Items]
Recorded Investment, With Valuation Allowance	275		275
Unpaid Principal, With Valuation Allowance	275		275
Related Allowance, With Valuation Allowance	25		25
Average Impaired Loans	138		138
Interest Recognized			2
1-4 family residential properties
Financing Receivable Impaired [Line Items]
Recorded Investment, With Valuation Allowance	10		10		14
Unpaid Principal, With Valuation Allowance	19		19		21
Related Allowance, With Valuation Allowance	1		1		1
Recorded Investment, Without Valuation Allowance	910		910		604
Unpaid Principal, Without Valuation Allowance	1,031		1,031		793
Average Impaired Loans	779	433	775	647
Interest Recognized		9	4	32
Commercial Loans
Financing Receivable Impaired [Line Items]
Recorded Investment, With Valuation Allowance	7,164		7,164		1,491
Unpaid Principal, With Valuation Allowance	7,191		7,191		1,520
Related Allowance, With Valuation Allowance	2,047		2,047		796
Recorded Investment, Without Valuation Allowance	6,106		6,106		6,425
Unpaid Principal, Without Valuation Allowance	6,115		6,115		6,433
Average Impaired Loans	12,769	4,833	10,593	4,992
Interest Recognized	73	80	247	119
Factored receivables
Financing Receivable Impaired [Line Items]
Recorded Investment, With Valuation Allowance	1,980		1,980		2,850
Unpaid Principal, With Valuation Allowance	1,980		1,980		2,850
Related Allowance, With Valuation Allowance	1,315		1,315		1,694
Recorded Investment, Without Valuation Allowance	1,227		1,227		572
Unpaid Principal, Without Valuation Allowance	1,227		1,227		$ 572
Average Impaired Loans	4,074	$ 1,957	3,309	$ 1,958
Consumer
Financing Receivable Impaired [Line Items]
Recorded Investment, Without Valuation Allowance	34		34
Unpaid Principal, Without Valuation Allowance	34		34
Average Impaired Loans	$ 35		$ 16

XML

Loans and Allowance for Loan and Lease Losses - Schedule of Recorded Investment and Unpaid Principal Balances for Impaired Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	$ 1,410,518	$ 1,291,885
Unpaid Principal	1,418,695	1,306,193
Difference	(8,177)	(14,308)
Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	298,991	291,819
Unpaid Principal	301,586	299,272
Difference	(2,595)	(7,453)
Construction, land development, land
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	36,498	43,876
Unpaid Principal	37,972	45,376
Difference	(1,474)	(1,500)
1-4 family residential properties
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	74,121	78,244
Unpaid Principal	76,456	81,141
Difference	(2,335)	(2,897)
Farmland
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	35,795	33,573
Unpaid Principal	35,741	33,533
Difference	54	40
Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	574,508	495,356
Unpaid Principal	575,213	496,719
Difference	(705)	(1,363)
Factored receivables
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	237,520	215,088
Unpaid Principal	238,660	216,201
Difference	(1,140)	(1,113)
Consumer
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	17,339	13,050
Unpaid Principal	17,321	13,072
Difference	18	(22)
Mortgage warehouse
Accounts Notes And Loans Receivable [Line Items]
Loan, Total	135,746	120,879
Unpaid Principal	$ 135,746	$ 120,879

XML

Loans and Allowance for Loan and Lease Losses - Summary of Contractually Past Due and Nonaccrual Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
30-89 Days Past Due	$ 19,877	$ 19,063
Past Due 90 Days or More Still Accruing	3,220	1,940
Nonaccrual	16,382	10,094
Total Past Due	39,479	31,097
Purchased Credit Impaired Loans
Accounts Notes And Loans Receivable [Line Items]
30-89 Days Past Due	102	1,092
Past Due 90 Days or More Still Accruing	786
Nonaccrual	5,771	6,867
Total Past Due	6,659	7,959
Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
30-89 Days Past Due		693
Nonaccrual	687	673
Total Past Due	687	1,366
Construction, land development, land
Accounts Notes And Loans Receivable [Line Items]
Nonaccrual	275
Total Past Due	275
1-4 family residential properties
Accounts Notes And Loans Receivable [Line Items]
30-89 Days Past Due	320	909
Past Due 90 Days or More Still Accruing		9
Nonaccrual	949	533
Total Past Due	1,269	1,451
Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
30-89 Days Past Due	6,377	3,704
Past Due 90 Days or More Still Accruing	174
Nonaccrual	8,666	2,021
Total Past Due	15,217	5,725
Factored receivables
Accounts Notes And Loans Receivable [Line Items]
30-89 Days Past Due	12,703	12,379
Past Due 90 Days or More Still Accruing	2,260	1,931
Total Past Due	14,963	14,310
Consumer
Accounts Notes And Loans Receivable [Line Items]
30-89 Days Past Due	375	286
Nonaccrual	34
Total Past Due	$ 409	$ 286

XML

Loans and Allowance for Loan and Lease Losses - Schedule of Nonperforming Loans (Details) - USD ($) $ in Thousands		Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
Nonaccrual loans		$ 16,382	$ 10,094
Factored receivables greater than 90 days past due		3,220	1,940
Nonperforming Loans
Accounts Notes And Loans Receivable [Line Items]
Nonaccrual loans	[1]	16,382	10,094
Factored receivables greater than 90 days past due		2,260	1,931
Troubled debt restructurings accruing interest		3,359	1,330
Total loans		$ 22,001	$ 13,355

[1] Includes troubled debt restructurings of $2,789,000 and $53,000 at June 30, 2016 and December 31, 2015, respectively.

XML

Loans and Allowance for Loan and Lease Losses - Schedule of Nonperforming Loans (Parenthetical) (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
Nonaccrual	$ 16,382,000	$ 10,094,000
Troubled Debt Restructuring
Accounts Notes And Loans Receivable [Line Items]
Nonaccrual	$ 2,789,000	$ 53,000

XML

Loans and Allowance for Loan and Lease Losses - Summary of Analysis Performed Risk category Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
Loans	$ 1,410,518	$ 1,291,885
Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
Loans	298,991	291,819
Construction, land development, land
Accounts Notes And Loans Receivable [Line Items]
Loans	36,498	43,876
1-4 family residential properties
Accounts Notes And Loans Receivable [Line Items]
Loans	74,121	78,244
Farmland
Accounts Notes And Loans Receivable [Line Items]
Loans	35,795	33,573
Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Loans	574,508	495,356
Factored receivables
Accounts Notes And Loans Receivable [Line Items]
Loans	237,520	215,088
Consumer
Accounts Notes And Loans Receivable [Line Items]
Loans	17,339	13,050
Mortgage warehouse
Accounts Notes And Loans Receivable [Line Items]
Loans	135,746	120,879
Pass
Accounts Notes And Loans Receivable [Line Items]
Loans	1,369,703	1,251,388
Pass | Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
Loans	294,273	284,753
Pass | Construction, land development, land
Accounts Notes And Loans Receivable [Line Items]
Loans	35,121	42,499
Pass | 1-4 family residential properties
Accounts Notes And Loans Receivable [Line Items]
Loans	70,489	73,838
Pass | Farmland
Accounts Notes And Loans Receivable [Line Items]
Loans	35,795	33,573
Pass | Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Loans	546,663	470,208
Pass | Factored receivables
Accounts Notes And Loans Receivable [Line Items]
Loans	234,313	212,588
Pass | Consumer
Accounts Notes And Loans Receivable [Line Items]
Loans	17,303	13,050
Pass | Mortgage warehouse
Accounts Notes And Loans Receivable [Line Items]
Loans	135,746	120,879
Substandard
Accounts Notes And Loans Receivable [Line Items]
Loans	29,373	25,785
Substandard | Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
Loans	997	1,977
Substandard | Construction, land development, land
Accounts Notes And Loans Receivable [Line Items]
Loans	275
Substandard | 1-4 family residential properties
Accounts Notes And Loans Receivable [Line Items]
Loans	920	1,494
Substandard | Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Loans	24,906	21,295
Substandard | Factored receivables
Accounts Notes And Loans Receivable [Line Items]
Loans	2,239	1,019
Substandard | Consumer
Accounts Notes And Loans Receivable [Line Items]
Loans	36
Doubtful
Accounts Notes And Loans Receivable [Line Items]
Loans	968	1,481
Doubtful | Factored receivables
Accounts Notes And Loans Receivable [Line Items]
Loans	968	1,481
Purchased Credit Impaired Loans
Accounts Notes And Loans Receivable [Line Items]
Loans	10,474	13,231
Purchased Credit Impaired Loans | Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
Loans	3,721	5,089
Purchased Credit Impaired Loans | Construction, land development, land
Accounts Notes And Loans Receivable [Line Items]
Loans	1,102	1,377
Purchased Credit Impaired Loans | 1-4 family residential properties
Accounts Notes And Loans Receivable [Line Items]
Loans	2,712	2,912
Purchased Credit Impaired Loans | Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Loans	$ 2,939	$ 3,853

XML

Loans and Allowance for Loan and Lease Losses - Schedule of Loans Modified as Troubled Debt Restructurings (Details) - Commercial Loans $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) loan	Jun. 30, 2015 USD ($) loan
Accounts Notes And Loans Receivable [Line Items]
Number of Loans | loan	16	1
Pre-Modification Outstanding Recorded Investment	$ 5,730	$ 148
Post-Modification Outstanding Recorded Investment	$ 5,730	$ 148

XML

Loans and Allowance for Loan and Lease Losses - Schedule of Outstanding Contractually Required Principal and Interest and Carrying Amount of PCI Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Notes And Loans Receivable [Line Items]
Outstanding contractually required principal and interest	$ 17,309	$ 23,135
Real Estate Loans
Accounts Notes And Loans Receivable [Line Items]
Outstanding contractually required principal and interest	13,277	17,800
Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Outstanding contractually required principal and interest	4,032	5,335
Purchase Credit Impaired
Accounts Notes And Loans Receivable [Line Items]
Gross carrying amount included in loans receivable	$ 10,474	$ 13,231

XML

Loans and Allowance for Loan and Lease Losses - Schedule of Changes in Accretable Yield for the PCI Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Accretable yield, beginning balance	$ 2,064	$ 4,496	$ 2,593	$ 4,977
Accretion	(1,518)	(1,031)	(2,034)	(1,460)
Reclassification from nonaccretable to accretable yield	646	585	646	585
Disposals		(147)	(13)	(199)
Accretable yield, ending balance	$ 1,192	$ 3,903	$ 1,192	$ 3,903

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 15,968	$ 15,968
Finite-Lived Intangible Assets, Gross Carrying Amount	19,416	19,416
Finite-Lived Intangible Assets, Accumulated Amortization	(9,224)	(7,530)
Finite-Lived Intangible Assets, Net Carrying Amount	10,192	11,886
Core Deposit Intangibles
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross Carrying Amount	14,586	14,586
Finite-Lived Intangible Assets, Accumulated Amortization	(6,855)	(5,765)
Finite-Lived Intangible Assets, Net Carrying Amount	7,731	8,821
Other Intangible Assets
Goodwill And Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross Carrying Amount	4,830	4,830
Finite-Lived Intangible Assets, Accumulated Amortization	(2,369)	(1,765)
Finite-Lived Intangible Assets, Net Carrying Amount	$ 2,461	$ 3,065

XML

Goodwill and Intangible Assets - Schedule of Changes in Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill and intangible assets, beginning	$ 26,877	$ 30,211	$ 27,854	$ 29,057
Acquired intangibles		858		2,776
Amortization of intangibles	(717)	(895)	(1,694)	(1,659)
Goodwill and intangible assets, ending	$ 26,160	$ 30,174	$ 26,160	$ 30,174

XML

Variable Interest Entities - Additional Information - (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Variable Interest Entity [Line Items]
Asset management fees	$ 1,605	$ 1,274	$ 3,234	$ 2,232
Held to Maturity Securities, Amortized Cost	27,502		27,502
Trinitas IV
Variable Interest Entity [Line Items]
Held to Maturity Securities, Amortized Cost	1,634		1,634
Trinitas V and VI | Collateralized Loan Obligation Funds
Variable Interest Entity [Line Items]
Equity investments	$ 17,301		$ 17,301

XML

Variable Interest Entities - Summarizes of Closed CLO Offerings with Assets (Details) - Collateralized Loan Obligation Funds - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 09, 2015	Aug. 04, 2014	May 01, 2014	Dec. 17, 2012
Trinitas I
Variable Interest Entity [Line Items]
Offering Amount				$ 400,000
Offering Date	May 01, 2014
Trinitas II
Variable Interest Entity [Line Items]
Offering Amount			$ 416,000
Offering Date	Aug. 04, 2014
Doral III
Variable Interest Entity [Line Items]
Offering Amount					$ 310,800
Offering Date	Dec. 17, 2012
Trinitas III
Variable Interest Entity [Line Items]
Offering Amount		$ 409,375
Offering Date	Jun. 09, 2015

XML

Variable Interest Entities - Summarizes of Closed CLO Offerings for which TCA is Not Asset Manager (Details) - Trinitas IV - Collateralized Loan Obligation Funds - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 02, 2016
Variable Interest Entity [Line Items]
Offering Amount		$ 406,650
Offering Date	Jun. 02, 2016

XML

Deposits - Summary of Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Deposits [Abstract]
Noninterest bearing demand	$ 170,834	$ 168,264
Interest bearing demand	235,877	238,833
Individual retirement accounts	64,204	60,971
Money market	120,929	112,214
Savings	77,625	74,759
Certificates of deposit	555,710	543,909
Brokered deposits	49,975	50,000
Total deposits	$ 1,275,154	$ 1,248,950

XML

Deposits - Scheduled Maturities of Certificate of Deposits, Individual Retirement Accounts and Brokered Deposits (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Deposits [Abstract]
Within one year	$ 510,421
After one but within two years	120,524
After two but within three years	21,961
After three but within four years	10,956
After four but within five years	6,027
Total	$ 669,889

XML

Deposits - Additional Information (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Deposits [Abstract]
Time deposits	$ 112,418	$ 106,258

XML

Off-Balance Sheet Loan Commitments - Summary of Financial Instruments with Off-Balance Sheet Risk - (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Standby Letters of Credit
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Financial instruments, off balance sheet risk, fixed rate	$ 1,072	$ 1,030
Financial instruments, off balance sheet risk, variable rate	2,169	1,999
Commitments to Make Loans
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Financial instruments, off balance sheet risk, fixed rate	25,881	6,571
Financial instruments, off balance sheet risk, variable rate	3,950	2,949
Unused Lines of Credit
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]
Financial instruments, off balance sheet risk, fixed rate	45,862	35,514
Financial instruments, off balance sheet risk, variable rate	$ 86,396	$ 81,189

XML

Fair Value Disclosures - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities, fair value disclosure, recurring	$ 0	$ 0
Liabilities, fair value disclosure, nonrecurring	$ 0	$ 0
Level 3 | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Selling and closing costs for loans as a percentage of appraised value	5.00%
Real estate selling and closing costs as a percentage of appraised value	5.00%
Level 3 | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Selling and closing costs for loans as a percentage of appraised value	8.00%
Real estate selling and closing costs as a percentage of appraised value	8.00%

XML

Fair Value Disclosures - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities - available for sale	$ 159,790	$ 163,169
Loans held for sale		1,341
Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities - available for sale	159,790	163,169
Loans held for sale		1,341
Level 2 | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities - available for sale	$ 159,790	163,169
Loans held for sale		$ 1,341

XML

Fair Value Disclosures - Fair Value of Assets Measured on Non-recurring Basis (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 8,534	$ 3,970
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	8,534	3,970
Impaired Loans | Commercial real estate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	417	431
Impaired Loans | Commercial real estate | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	417	431
Impaired Loans | Construction, land development, land
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	250
Impaired Loans | Construction, land development, land | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	250
Impaired Loans | 1-4 family residential properties
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	9	13
Impaired Loans | 1-4 family residential properties | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	9	13
Impaired Loans | Commercial Loans
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	5,117	695
Impaired Loans | Commercial Loans | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	5,117	695
Impaired Loans | Factored receivables
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	665	1,156
Impaired Loans | Factored receivables | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	665	1,156
Impaired Loans | PCI
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	1,001	170
Impaired Loans | PCI | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	1,001	170
Other real estate owned | Construction, land development, land
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	253	1,377
Other real estate owned | Construction, land development, land | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	253	1,377
Other real estate owned | 1-4 family residential properties
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	124	128
Other real estate owned | 1-4 family residential properties | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	124	$ 128
Other real estate owned | Commercial Loans
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	698
Other real estate owned | Commercial Loans | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 698

XML

Fair Value Disclosures - Estimated Fair Value of Company's Financial Assets and Financial Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Financial assets:
Cash and cash equivalents, Fair Value	$ 61,750	$ 105,277
Securities - Held to maturity, Fair value	28,362	0
Loans not previously presented, net, Fair Value	1,392,276	1,281,408
Accrued interest receivable, Fair Value	5,260	4,832
Cash and cash equivalents, Carrying Amount	61,750	105,277	$ 99,714	$ 160,888
Securities - held to maturity, Carrying Amount	27,502
Loans not previously presented, net, Carrying Amount	1,389,287	1,276,853
FHLB stock, Carrying Amount	6,368	3,818
Accrued interest receivable, Carrying Amount	5,260	4,832
Financial liabilities:
Deposits, Fair Value	1,277,777	1,249,751
Customer repurchase agreements, Fair Value	13,635	9,317
Federal Home Loan Bank advances, Fair Value	180,497	130,000
Junior subordinated debentures, Fair Value	25,477	23,153
Accrued interest payable, Fair Value	1,348	1,231
Deposits, Carrying Amount	1,275,154	1,248,950
Customer repurchase agreements, Carrying Amount	13,635	9,317
Federal Home Loan Bank advances, Carrying Amount	180,500	130,000
Junior subordinated debentures, Carrying Amount	24,823	24,687
Accrued interest payable, Carrying Amount	1,348	1,231
Level 1
Financial assets:
Cash and cash equivalents, Fair Value	61,750	105,277
Level 2
Financial assets:
Securities - Held to maturity, Fair value	26,713
Accrued interest receivable, Fair Value	5,260	4,832
Financial liabilities:
Deposits, Fair Value	1,277,777	1,249,751
Customer repurchase agreements, Fair Value	13,635	9,317
Federal Home Loan Bank advances, Fair Value	180,497	130,000
Junior subordinated debentures, Fair Value	25,477	23,153
Accrued interest payable, Fair Value	1,348	1,231
Level 3
Financial assets:
Securities - Held to maturity, Fair value	1,649
Loans not previously presented, net, Fair Value	$ 1,392,276	$ 1,281,408

XML

Regulatory Matters - Additional Information (Details)	6 Months Ended
	Jun. 30, 2016
Regulatory Capital Requirements [Abstract]
Capital conservation buffer rate in 2016	0.625%
Capital conservation buffer rate increase in 2017	0.625%
Capital conservation buffer rate increase in 2018	0.625%
Capital conservation buffer rate in 2019	2.50%

XML

Regulatory Matters - Schedule of Actual Capital Amounts and Ratios (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Triumph Bancorp Inc
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Total capital (to Risk Weighted Assets) Actual Amount	$ 288,194	$ 276,924
Total Capital (to Risk Weighted Assets) Actual Ratio	18.00%	19.10%
Total Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 127,944	$ 115,929
Total Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	8.00%
Tier 1 Capital (to Risk Weighted Assets) Actual Amount	$ 274,253	$ 264,239
Tier 1 Capital (to Risk Weighted Assets) Actual Ratio	17.10%	18.20%
Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 95,958	$ 86,968
Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Amount	$ 243,086	$ 235,253
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Ratio	15.20%	16.20%
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 71,968	$ 65,227
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	4.50%	4.50%
Tier 1 Capital (to Average Assets) Actual Amount	$ 274,253	$ 264,239
Tier 1 Capital (to Average Assets) Actual Ratio	16.00%	16.60%
Tier 1 Capital (to Average Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 68,494	$ 63,824
Tier 1 Capital (to Average Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	4.00%	4.00%
TBK Bank SSB
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Total capital (to Risk Weighted Assets) Actual Amount	$ 215,780	$ 205,978
Total Capital (to Risk Weighted Assets) Actual Ratio	14.00%	14.70%
Total Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 122,948	$ 111,869
Total Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	8.00%
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 153,685	$ 139,836
Total Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 Capital (to Risk Weighted Assets) Actual Amount	$ 201,915	$ 193,293
Tier 1 Capital (to Risk Weighted Assets) Actual Ratio	13.10%	13.80%
Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 92,211	$ 83,919
Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 122,948	$ 111,892
Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Amount	$ 201,915	$ 193,293
Common Equity Tier 1 Capital (to Risk Weighted Assets) Actual Ratio	13.10%	13.80%
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 69,158	$ 62,939
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	4.50%	4.50%
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 99,895	$ 90,912
Common Equity Tier 1 Capital (to Risk Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.50%	6.50%
Tier 1 Capital (to Average Assets) Actual Amount	$ 201,915	$ 193,293
Tier 1 Capital (to Average Assets) Actual Ratio	12.30%	12.70%
Tier 1 Capital (to Average Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Amount	$ 65,902	$ 61,024
Tier 1 Capital (to Average Assets) To Be Adequately Capitalized Under Prompt Corrective Action Provisions Ratio	4.00%	4.00%
Tier 1 Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 82,378	$ 76,280
Tier 1 Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%

XML

Stockholders' Equity - Summary of Capital Structure (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Class Of Stock [Line Items]
Number of shares authorized	50,000,000	50,000,000
Number of shares issued	18,153,828	18,052,723
Number of shares outstanding	18,107,493	18,018,200
Par value per share	$ 0.01	$ 0.01
Number of shares outstanding, treasury stock	46,335	34,523
Preferred Stock - Series A
Class Of Stock [Line Items]
Number of shares authorized	50,000	50,000
Number of shares issued	45,500	45,500
Number of shares outstanding	45,500	45,500
Par value per share	$ 0.01	$ 0.01
Liquidation preference per share	$ 100	$ 100
Dividend rate	Prime + 2%	Prime + 2%
Dividend rate - floor	8.00%	8.00%
Subsequent dividend payment dates	Quarterly	Quarterly
Convertible to common stock	Yes	Yes
Conversion period	Anytime	Anytime
Conversion ratio - preferred to common	6.94008	6.94008
Preferred Stock - Series B
Class Of Stock [Line Items]
Number of shares authorized	115,000	115,000
Number of shares issued	51,956	51,956
Number of shares outstanding	51,956	51,956
Par value per share	$ 0.01	$ 0.01
Liquidation preference per share	$ 100	$ 100
Dividend rate	8.00%	8.00%
Dividend rate - floor	8.00%	8.00%
Subsequent dividend payment dates	Quarterly	Quarterly
Convertible to common stock	Yes	Yes
Conversion period	Anytime	Anytime
Conversion ratio - preferred to common	6.94008	6.94008

XML

Stock Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based compensation	$ 926	$ 852	$ 1,279	$ 1,548
2014 Omnibus Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares approved for issuance					1,200,000
2014 Omnibus Incentive Plan | Restricted Stock Awards (RSAs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized compensation cost	1,730		$ 1,730
Weighted-average period to recognize cost			2 years 8 months 1 day
2014 Omnibus Incentive Plan | Restricted Stock Awards (RSAs) | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based compensation, award vesting period			2 years
2014 Omnibus Incentive Plan | Restricted Stock Awards (RSAs) | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based compensation, award vesting period			3 years
2014 Omnibus Incentive Plan | Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average period to recognize cost			3 years 9 months
Stock based compensation, award vesting period			4 years
Stock options outstanding intrinsic value	21		$ 21
Weighted average remaining contractual term			9 years 9 months
Weighted average grant date fair value			$ 5.85
Employees stock options contractual terms			10 years
Total unrecognized compensation cost	$ 836		$ 836

XML

Stock Based Compensation - Summary of Changes in Nonvested Restricted Stock Awards (Details) - Restricted Stock Awards (RSAs)	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Nonvested, Beginning balance | shares	201,270
Nonvested, Granted | shares	101,105
Nonvested, Vested | shares	(47,727)
Nonvested, Forfeited | shares	(6,759)
Nonvested, Ending balance | shares	247,889
Weighted-Average Granted-Date Fair Value, Nonvested, Beginning balance | $ / shares	$ 14.24
Weighted-Average Granted-Date Fair Value, Nonvested, Granted | $ / shares	15.87
Weighted-Average Granted-Date Fair Value, Nonvested, Vested | $ / shares	14.60
Weighted-Average Granted-Date Fair Value, Nonvested, Forfeited | $ / shares	15.02
Weighted-Average Granted-Date Fair Value, Nonvested, Ending balance | $ / shares	$ 14.82

XML

Stock Based Compensation - Summary of Changes in Company's Stock Options (Details) - Stock Options	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock Options, Granted | shares	164,175
Stock Options, Ending Balance | shares	164,175
Weighted-Average Exercise Price, Granted | $ / shares	$ 15.87
Weighted-Average Exercise Price, Ending Balance | $ / shares	$ 15.87

XML

Stock Based Compensation - Fair Value of Stock Options Granted Using Weighted-Average Assumptions (Details) - Stock Options	6 Months Ended
	Jun. 30, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate	1.49%
Expected Term	6 years 3 months
Expected stock price volatility	34.96%

XML

Earnings Per Share - Factors Used in Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Basic
Net income to common stockholders	$ 4,431	$ 4,457	$ 9,243	$ 18,309
Weighted average common shares outstanding	17,859,604	17,711,527	17,838,267	17,711,527
Basic earnings per common share	$ 0.25	$ 0.25	$ 0.52	$ 1.03
Diluted
Net income to common stockholders	$ 4,431	$ 4,457	$ 9,243	$ 18,309
Dilutive effect of preferred stock				387
Net income to common stockholders - diluted	$ 4,431	$ 4,457	$ 9,243	$ 18,696
Weighted average common shares outstanding	17,859,604	17,711,527	17,838,267	17,711,527
Average shares and dilutive potential common shares	18,042,585	17,813,825	18,011,931	18,459,420
Dilutive earnings per common share	$ 0.25	$ 0.25	$ 0.51	$ 1.01
Restricted Stock
Diluted
Dilutive effects of restricted stock	112,880	71,022	113,334	41,492
Preferred Stock - Series A
Diluted
Dilutive effects of assumed conversion of shares				315,773
Antidilutive shares	315,773	315,773	315,773
Preferred Stock - Series B
Diluted
Dilutive effects of assumed conversion of shares				360,578
Antidilutive shares	360,578	360,578	360,578
Restricted Stock
Diluted
Antidilutive shares	76,362		76,362
Stock Option
Diluted
Antidilutive shares	164,175		164,175
Warrant
Diluted
Dilutive effects of assumed exercises of stock warrants	70,101	31,276	60,330	30,050

XML

Business Segment Information - Banking Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total interest income	$ 28,354	$ 26,597	$ 53,247	$ 48,176
Total interest expense	2,447	1,952	4,851	3,806
Net interest income	25,907	24,645	48,396	44,370
Provision for loan losses	1,939	2,541	1,428	3,186
Net interest income after provision for loan losses	23,968	22,104	46,968	41,184
Bargain purchase gain				12,509
Other noninterest income	3,668	4,769	8,649	8,919
Noninterest expense	20,331	19,635	40,409	40,418
Net income before income tax	7,305	7,238	15,208	22,194
Total assets	1,783,395		1,783,395		$ 1,691,313
Gross loans	1,410,518		1,410,518		1,291,885
Operating Segments | Factoring
Segment Reporting Information [Line Items]
Total interest income	7,939	8,275	15,124	15,503
Intersegment interest allocations	(1,099)	(1,017)	(2,100)	(1,926)
Net interest income	6,840	7,258	13,024	13,577
Provision for loan losses	555	477	85	368
Net interest income after provision for loan losses	6,285	6,781	12,939	13,209
Other noninterest income	496	450	942	781
Noninterest expense	4,962	4,450	9,535	8,762
Net income before income tax	1,819	2,781	4,346	5,228
Total assets	216,649		216,649		198,629
Gross loans	206,256		206,256		186,457
Operating Segments | Banking
Segment Reporting Information [Line Items]
Total interest income	20,109	18,189	37,535	32,424
Intersegment interest allocations	1,099	1,017	2,100	1,926
Total interest expense	2,135	1,674	4,237	3,246
Net interest income	19,073	17,532	35,398	31,104
Provision for loan losses	1,392	1,971	1,267	2,725
Net interest income after provision for loan losses	17,681	15,561	34,131	28,379
Other noninterest income	822	2,708	2,836	5,293
Noninterest expense	13,405	12,707	26,987	25,107
Net income before income tax	5,098	5,562	9,980	8,565
Total assets	1,708,861		1,708,861		1,601,072
Gross loans	1,338,314		1,338,314		1,223,028
Operating Segments | Asset Management
Segment Reporting Information [Line Items]
Total interest income	33	5	64	65
Total interest expense				10
Net interest income	33	5	64	55
Net interest income after provision for loan losses	33	5	64	55
Bargain purchase gain				12,509
Other noninterest income	1,614	1,352	3,285	2,309
Noninterest expense	1,213	809	2,559	3,435
Net income before income tax	434	548	790	11,438
Total assets	15,208		15,208		17,676
Gross loans	889		889		945
Operating Segments | Corporate
Segment Reporting Information [Line Items]
Total interest income	273	128	524	184
Total interest expense	312	278	614	550
Net interest income	(39)	(150)	(90)	(366)
Provision for loan losses	(8)	93	76	93
Net interest income after provision for loan losses	(31)	(243)	(166)	(459)
Other noninterest income	736	259	1,586	536
Noninterest expense	751	1,669	1,328	3,114
Net income before income tax	(46)	$ (1,653)	92	$ (3,037)
Total assets	311,887		311,887		303,253
Gross loans	13,809		13,809		18,455
Eliminations
Segment Reporting Information [Line Items]
Total assets	(469,210)		(469,210)		(429,317)
Gross loans	$ (148,750)		$ (148,750)		$ (137,000)