2013 Triumph Annual Report

2013
ANNUAL
REPORT
If you’re a sports fan, the end of the year is a very exciting time as you have the opportunity to experience the previous
year’s “Best Plays,” “Best Shots,” or “Best Putts” of your favorite sports team or golfer. Since our specialty is banking,
we want to share our “2013 Top 5 Triumph Moments” with you. As we continue to grow both in size and profitability,
we predict our future “Top 5” will be even more exciting than this year’s.
First, we are pleased to report to you a record 2013 after tax profit of $3,399,000 which is up 71% over our 2012 profit
of $1,986,000. Increases of over 13% in loans and an increased profit margin on loans were key reasons for the large
increase. Per share earnings were $0.83 and ROE (return on beginning equity) was 8.7%. Our short term goal is to
get the ROE above 10% so we are progressing toward our goal. We are pleased with this profit as it demonstrates
the convergence of a growing balance sheet, attention to operating expenses, and good asset quality. Another important
note is this is our fifth year in a row to report a profit, and only one other Memphis based bank can say this.
Second, our asset quality continues to be very good. Despite our rapid growth, we have been able to keep our asset
quality expense (loan losses, losses on the sale of foreclosed properties and the legal expense of collecting loan balances)
below 30/100 of 1%. This compares very favorably with our peers.
Third, we ended the year with assets in excess of $430,000,000 and now have $500,000,000 in our sights. The $500,000,000
in assets is an important objective as our industry recognizes this as a different class of community bank.
Fourth, on August 31, 2013, we purchased M&P Mortgage from Merchants & Planters Bank of Bolivar, TN. We merged this
company into our own mortgage operation and named the combined operation Triumph Mortgage. The combined
volume will be more than 10 times the previous pre-acquisition volume and also allows us to add additional mortgage
products such as Jumbo Loans without Private Mortgage Insurance and very competitively priced Adjustable Rate
Mortgages. Mortgage did not contribute to our income in 2013, but we expect it will have a favorable impact on our
2014 earnings.
Fifth and finally, we opened our new Operations Center in May at Moriah Woods Office Park. This will help us increase
efficiencies and allow for future growth of bank operations and administration.
One negative this year was the value of our investment portfolio. Banks have investment portfolios to provide backup
liquidity to fund loans. In 2013, the market value of our portfolio fell $800,000. Per GAAP accounting, we are required
to report this loss as a reduction in Equity on the Balance Sheet, and it is not shown on the income statement. We
normally purchase investments that have a shorter duration, higher credit quality and with a plan to hold until maturity.
We expect some rebound in the market value of these assets as they mature, and since we plan
on holding most until maturity, this should have a minimal effect on our equity over time.
Our plan for 2014 is to increase loans and assets another 13-14% and exceed $500 million in Assets. We encourage
you to refer business to us which will help us reach this goal.
Thank you for all of your support, as always. Please call us when we can be of service to you, your family and friends.
Sincerely,
Hilliard R. Crews
William J. Chase, Jr.
Chairman of the Board
President and Chief Executive Officer
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$500,000,000
$400,000,000
$400,000,000
$300,000,000
$300,000,000
$200,000,000
$200,000,000
NET LOANS
TOTAL ASSETS
$500,000,000
$100,000,000
2010
2011
2012
2013
$40,000,000
$400,000,000
$30,000,000
$300,000,000
TOTAL DEPOSITS &
BORROWED FUNDS
SHAREHOLDERS’ EQUITY
2009
$20,000,000
$10,000,000
2009
2010
2011
2012
NET INCOME BEFORE TAXES
$1,125,000
$750,000
$375,000
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
$200,000,000
$100,000,000
2013
$1,500,000
NON INTEREST INCOME
$100,000,000
$6,000,000
$4,500,000
$3,000,000
$1,500,000
2
Consolidated Balance Sheet
Period Ending 12/31/2013
Assets
2013
2012
2011
Cash and Cash Equivalents
9,881,829 9,012,435
12,401,311
Securities Available for Sale
56,682,383 63,116,259
43,717,719
Loans Held for Sale
3,061,953 Loans, Net of Deferred Fees and Allowance for Loan Losses
354,929,170
1,764,117 313,627,988
165,500
241,289,209
Premises and Equipment, Net of Accumulated Depreciation 3,306,270 3,475,742 3,573,357
Other Assets
9,578,567 8,048,476 7,242,128
Total Assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
437,440,172
399,045,017
Deposits
308,389,224
380,257,481
340,221,235
275,592,184
Other Borrowings
13,000,000 18,000,000 6,600,000
Other Liabilities
2,188,077 1,530,214 1,430,248
Total Liabilities
395,445,558
283,622,432
359,751,449
Preferred Stock: 1,000,000 Shares Authorized
Class A - 295,500 Shares Issued and Outstanding
3,546,000 3,546,000
146,004 146,004
4,115,708 3,629,311 2,279,311
Capital Surplus and Additional Paid-In Capital
35,126,606 31,846,582 21,030,259
Treasury Stock, 43,600 Shares Redeemed
(490,500) (490,500) (490,500)
Accumulated Other Comprehensive Income
(677,881) 91,563 (290,106)
Retained Earnings (Accumulated Deficit)
3,920,681 524,608 (1,454,176)
Total Shareholders’ Equity
41,994,614 39,293,568 24,766,792
Class B - 12,167 Shares Issued and Outstanding
Common Stock: 5,000,000 Shares Authorized
4,115,708 Shares Issued
4,072,108 Shares Outstanding
Total Liabilities and Shareholders’ Equity
3
437,440,172
399,045,017
308,389,224
Consolidated Income Statement
Period Ending 12/31/2013
INTEREST INCOME
2013
16,841,698 Loan Interest Income
2012
2011
14,291,471
12,401,485
Fee Income
648,195 568,860 406,689
Investment
1,210,595 1,209,260 989,658
Fed Funds Sold
9,665 20,212 20,034
Other Income
114,396 75,260 58,440
Total Interest and Fee Income
INTEREST EXPENSE
18,824,549 Checking
16,165,063
13,876,306
957,503
982,271 875,279
Savings
14,946 20,620 15,981
CD
1,622,239 1,937,211 2,361,413
Borrowed Funds
40,102 103,012 135,771
Total Interest Expenses
2,634,790
3,043,114
Net Interest Income
16,189,759 Non-Interest Income
NON-INTEREST EXPENSE
Employee
3,388,444
13,121,949
10,487,862
1,410,630 808,901 621,723
6,006,723 5,060,613 3,818,621
Occupancy
1,151,371 1,046,580 822,752
F.F. & E. and D.P.
1,323,741 1,075,362 240,919
Other
2,295,383 2,136,289 2,384,269
10,777,218 9,318,844 7,266,561
Total Non-Interest Expenses
Allowance for Loan Losses
1,065,000 1,281,000 1,262,000
Net Income Before Taxes
5,758,171 3,331,006 2,581,024
Income Tax (Credit)
2,358,450 1,344,922 (545,000)
Net Income
3,399,721 1,986,084 3,126,024
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Confidence.
Ability.
Worth.
A bank should be more
about safeguarding your
savings. It should help you
reach your potential. Triumph
offers a host of services that
can do just that.
Welcome to Triumph.
Let’s talk growth.
triumphbank.com
triumphmortgage.com
(901) 333-8800
Growth,
without the
growing pains.
Your personal growth should be without limits.
Without impediment. Triumph offers a suite of
financial services that capitalize on your potential
without ever slowing you down. Welcome to Triumph.
Let’s talk growth.
triumphbank.com
triumphmortgage.com
(901) 333-8800
Triumph is happy to announce that the Board of Directors recently adopted a new logo and brand message
that is being rolled out throughout 2014. Let’s talk growth reflects Triumph’s focus of working side by
side with its customers each day to help them reach their goals and experience growth. This growth can
be demonstrated through helping them fund a new or existing business, earn a greater interest rate on
their accounts and CDs, or through the purchase of a new home.
2014 also brings enhanced technology to our customers, including a new Mobile App for all hand held
devices featuring Mobile Capture for our consumer customers that allows remote depositing of checks. We
are also proud to launch our new redesigned website www.triumphbank.com. Our new site offers more
convenient navigation for Triumph customers to conduct their online banking and discover the features of
additional accounts they may need.
Let’s talk growth also reflects inwardly as we are proud of the team of Triumph employees that
demonstrate outstanding customer service and always strive to exceed your expectations. Triumph
encourages them to grow and flourish in their careers because when we triumph, you triumph.
Let’s talk growth.
5
FINANCIAL SERVICES
Commercial Lending Services
Commercial Real Estate Loans
Residential Real Estate Loans
Accounts Receivable, Inventory, & Equipment Loans
Small Business “SBA” Loans
Consumer Lending Services
Home Equity Lines of Credit
Automobile Loans
Loans for Personal Expenditures
Mortgage Origination Loans
Commercial Deposit Services
Business Analysis Accounts
Business Checking
Business Savings
Business Wealth Money Market Accounts
Certificates of Deposit
Business Remote Deposit Capture
Lock Box Services
Online Banking
ACH & Wire Transfer Services
Night Depository
Business Credit Cards
Business Bill Payment
Positive Pay
eStatements
Investment / Loan Sweep
Consumer Deposit Services
Complimentary Checking
Performance Checking
Prime Timer Checking
Classic Savings
Junior Banker Savings
Consumer Wealth Money Market Accounts
Certificates of Deposit
Individual Retirement Accounts (IRAs)
Online Banking & Bill Pay Services
Mobile Banking
Mobile Deposit Capture
Telephone Banking
Safe Deposit Boxes
ATMs Including nationwide networks
eStatements
BOARD OF DIRECTORS
Hilliard R. Crews
Joseph W. Mirabile, Ph.D.
Chairman of the Board of Triumph Bancshares, Inc.
CEO, Mirabile Investment Corporation
Chairman, Shelby Group International, Inc.
William J. Chase, Jr.
Larry W. Papasan
Retired President of MLG&W, Smith & Nephew Orthopaedics
President & CEO, Triumph Bank
Michael J. McCarver
David C. Perdue
CEO, Asentinel
EVP & COO, Triumph Bank
A. Douglas Collins
Richard L. Powell
Principal, HMP Insurance
President & ceo, coldwell banker collins-maury, inc. realtors
FOUNDER & CEO, SOVEREIGN HOMES, LLC.
King W. Rogers, III
Attorney of Counsel, Glankler Brown, PLLC
Jason L. Crews
Chief Manager, Crews Realty, LLC
Mitchell D. Spurlock
Chairman, Aqua Chempacs
Stephen T. Dunavant
Senior Managing Director, CBIZ MHM
Thomas G. Stovall, M.D., MBA
Physician & Partner, Women’s Health Specialists, Inc.
Mark J. Halperin
EVP & COO, Boyle Investment Company
Rick C. Masson
Senior Director, Caissa Public Strategy
Special Master, overseeing schools merger
6
triumphbank.com
triumphmortgage.com