TFIN 10-K & 10-Q changes, risk factors and insider trading

Our business and results of operations are subject to numerous risks and uncertainties, many of which are beyond our control. The material risks and uncertainties that management believes affect the Company are described below. Additional risks and uncertainties that management is not aware of or that management currently deems immaterial may also impair the Company’s business operations. This report is qualified in its entirety by these risk factors. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of our securities could decline significantly, and you could lose all or part of your investment. Additionally, while some of the factors, events and contingencies described herein may have occurred in the past, the disclosures herein are not representations as to whether or not they have occurred and are instead provided because future occurrences thereof could adversely affect the Company. In addition to the factors discussed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the risk factors below, global economic and geopolitical conditions and additional or unforeseen circumstances, developments, or events may give rise to or amplify many of the risks discussed below.Somebelow. Some statements in the following risk factors constitute forward-looking statements. Please refer to “Cautionary Note Regarding Forward-Looking Statements” in Item 7 of this report.

•Risks Relating to our Payments Businessand Intelligence Businesses

•risks related to our Payments, Intelligence, and Factoring business and the associated growth in such product linelines;

•the impact of a global pandemic on our businessbusiness.

The majority of our banking assets and liabilities are monetary in nature and subject to risk from changes in interest rates. Like most financial institutions, our earnings are significantly dependent on our net interest income, the principal component of our earnings, which is the difference between interest earned by us from our interest-earning assets, such as loans and investment securities, and interest paid by us on our interest-bearing liabilities, such as deposits and borrowings. We expect that we will periodically experience “gaps” in the interest rate sensitivities of our assets and liabilities, meaning that either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our interest-earning assets, or vice versa. In either event, if market interest rates should move contrary to our position, this “gap” will negatively impact our earnings. The impact on earnings is more adverse when short-term interest rates increase more than long-term interest rates or when long-term interest rates decrease more than short-term interest rates. Many factors impact interest rates, including governmental monetary policies, inflation, recession, changes in unemployment, the money supply and international disorder and instability in domestic and foreign financial markets.

We rely on the structural features embedded in our asset-based lending and factoring products to mitigate the credit risk associated with such products. With respect to our asset-based loans, we limit our lending to a percentage of the customer’s borrowing base assets that we believe can be readily liquidated in the event of financial distress of the borrower. With respect to our factoring products, we purchase the underlying invoices of our customers and become the direct payee under such invoices, thus transferring the credit risk in such transactions from our customers to the underlying account debtors on such invoices. In the event one or more of our customers fraudulently represents the existence or valuation of borrowing base assets in the case of an asset-based loan, or the existence or validity of an invoice we purchase in the case of a factoring transaction, we may advance more funds to such customer than we otherwise would and lose the benefit of the structural protections of our products with respect to such advances. In such event we could be exposed to material additional losses with respect to such loans or factoring products. Although we believe we have controls in place to monitor and detect fraud with respect to our asset-based lending and factoring products, there is no guarantee such controls will be effective. We have experienced fraud with respect to these products in the past, which has not had a material effect. We anticipate that we will experience such fraud in the future and it could have a material effect. Losses from such fraudulent activity or otherwise related to identifying, securing, and liquidating such collateral could have a material impact on our business, financial condition and results of operations.

As a part of our products and services, we make commercial and commercial real estate loans. The principal economic risk associated with each class of loans is the creditworthiness of the borrower, which is affected by the strength of the relevant business market segment, local market conditions and general economic conditions. Additional factors related to the credit quality of commercial loans include the quality of the management of the business and the borrower’s ability both to properly evaluate changes in the supply and demand characteristics affecting ourtheir market for products and servicesbusinesses and to effectively respond to those changes. Additional factors related to the credit quality of commercial real estate loans include tenant vacancy rates and the quality of management of the property. A failure to effectively measure and limit the credit risk associated with our loan portfolio could have an adverse effect on our business, financial condition and results of operations.

Depending on the condition of any institution or assets or liabilities that we may acquire, that acquisition may, at least in the near term, adversely affect our capital and earnings and, if not successfully integrated with our organization, may continue to have such effects over a longer period. We may not be successful in overcoming these risks or any other problems encountered in connection with potential acquisitions and any acquisition we may consider will be subject to prior regulatory approval. Our inability to overcome these risks could have an adverse effect on our profitability, return on equity and return on assets, and our ability to implement our business strategy and enhance stockholder value, which, in turn, could have an adverse effect on our business, financial condition and results of operations.

We may engage in acquisitions in the future. Our previous acquisitions may make it more difficult for investors to evaluate historical trends in our financial results and operating performance, as the impact of such acquisitions makemakes it more difficult to identify organic trends that would be reflected absent such acquisitions. Consequently, predictions and forecasts about our future revenue and expense may be impacted by future acquisitions, the terms of such acquisitions, and the specific attributes of the acquired companies, each of which are subject to factors outside of our control and which may vary materially depending on any future acquisition targets ultimately pursued. Thus, any predictions or forecasts about our future operations may not be as accurate as they would be if we were to grow purely on an organic basis.

A substantial portion of our revenues are derived from the transportation industry, including our transportation factoring business, our TriumphPaypayments and intelligence operations, and our equipment finance lending, which are focused on the transportation sector. Given the concentration of such businesses in the transportation industry, economic conditions or other factors that negatively impact the transportation industry could impact our revenues, expose us to an increased risk of fraud or credit loss, or otherwise negatively impact our business. For example, reductions in economic activity reducing the volume of goods in commerce, changes in the spot rate market for transportation, the impact of any imposed tariffs, and other factors impacting Carriers in the over the road transportation business, such as the cost of insurance, may influence both the size of invoices we are able to purchase in our transportation business (both in traditional factoring as well as factoring transactions being originated through TriumphPayour Payments segment) as well as the number of Carriers engaged in this business and their utilization of available capacity. Negative trends in such items will directly correlate with a reduction in our net funds employed from transportation factored receivables and with reduced revenues from our Factoring and TriumphPayPayments operations. In addition, as negative factors in the transportation industry induce more financial stress on our clients in such businesses, we may experience an increased number of defaults in our equipment finance and other loans focused on this industry, as well as an increased risk of fraud, particularly in our factoring operations. For the year ended December 31, 2024,2025, we estimate that approximately 48%42% percent of our revenues were derived from the transportation industry, and as of December 31, 2024,2025, 97% of our period end factored receivables portfolio consisted of invoices purchased from transportation clients. Growth of our businesses focused on the transportation industry, in particular our transportation factoring and TriumphPaypayments operations, are a key strategic focus for the Company. The occurrence of any of such events as described above resulting from factors negatively impacting the transportation industry may have an adverse effect on our strategic plans, business, financial condition and results of operations.

Our current customer base consists primarily of third party logistics companies, or Brokers, making payments to their Carriers through our TriumphPaypayments platform, as well as Brokers and Factors that process their invoices for payment or purchase, as applicable, through the audit functionality on the TriumphPaypayments platform. We intend to continue to pursue growth within each of our target customer markets (Broker, Shipper and Factor) and to seek to convert customers using only a portion of the TriumphPaypayments platform functionality (payments or audit), to use the other services on the TriumphPaypayments platform to conduct end to end integrated payments transactions that create benefit for the other parties to the payment transaction on the platform, and to continue exploring the use and deployment of artificial intelligence as well as other new technology tools on the platform. This also includes the development of additional data driven products and services as part of our Intelligence business. Each of these efforts pose different sales and marketing challenges, and present different requirements. We cannot be sure that we will achieve the success in these expanded efforts and failure to achieve such success will hinder our growth prospects and strategic outlook.

Our business also depends on retaining our existing Payments customers. Our business is currently based on contract terms for our products for Brokers and Shippers making payments to their Carriers on the TriumphPaypayments platform, and are generally month to month for Factors and Brokers processing their invoices for payment or purchase, as applicableapplicable, through the audit functionality on the TriumphPaypayments platform. Customers are not obligated to, and may not, renew their services after their existing subscriptions expire or may terminate month to month contracts at any time. As a result, even though the number of customers using our platform has grown rapidly in recent years, there can be no assurance that we will be able to retain these customers or new customers that may enter into services. Renewals of services may decline or fluctuate as a result of a number of factors, including dissatisfaction with our platform or support, the perception that a competitive platform, product or service presents a better or less expensive option, or our failure to successfully deploy sales and marketing efforts towards existing customers as they approach the expiration of their agreement term. In addition, we may terminate our relationships with customers for various reasons, such as unacceptable business practices or contract breaches. Further, if Payments customers on our platform were to cease operations, temporarily or permanently, or face financial distress or other business disruption, our ability to retain customers would suffer.

Our Payments operations have grown significantly in recent periods both organically and through acquisition, and have a limited operating history, particularly at our current scale. Our Intelligence division was established in the fourth quarter of 20242024, andwas supplemented by our acquisition of Greenscreens AI Inc. in the second quarter of 2025, an also has noa materiallimited activityoperating or operational history to date.history. These businesses operate in rapidly evolving industries. We have frequently expanded, and plan to continue to expand, our network platform features and services for these businesses and will likely continue to change and develop our pricing methodologies for these products and services. This limited operating history and our evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter. These risks and challenges include, but are not limited to, our ability to:

Our growth prospects and strategic outlook depend in part on adoption of the full TriumphPaypayments platform functionality to conduct end to end integrated payments transactions that create benefit for the other parties to the payment transaction on the platform.

Even if we succeed in adding new customers to our platform and retaining existing customers, our growth prospects and strategic outlook depend on adoption by our customers for the full TriumphPaypayments platform functionality to conduct end to end integrated payments transactions for which we will earn fee income based on transaction volume. Such adoption and the amount of fee income we are able to earn may vary from period to period and depend on a variety of factors, many of which are beyond our control and difficult to predict. Such factors may include, among other things, our successful rollout of such integrated end to end payments functionality, customer acceptance of agreeable pricing terms for such functionality, the success of our customers’ operations which generate transaction volume, the proportion of our customers’ payment volumes processed through our platform and overall economic conditions.

Our Payments business handles payment processing administration for certain of our customers. Consequently, at any given time, we may be holding or directing funds of Payments customers. This function creates a risk of loss arising from, among other things, fraud by employees or third parties, execution of unauthorized transactions, ACH reversals, or errors relating to transaction processing. We are also potentially at risk if the financial institution in which we hold these funds,funds suffers any kind of insolvency or liquidity event or fails, for any reason, to deliver their services in a timely manner. The occurrence of any of these types of events could cause us financial loss and reputational harm. Our Payments business in particular involves unique and more complex payments issues such as the management of notices of assignment and maintenance of carrier wallets which may increase the overall risk of this business line.

If any material security breach involving our systems or the systems of third parties that store or process our data or significant denial-of-service or other cyber-attack occurs or is believed to have occurred, our reputation and brand could be damaged, we could be required to expend significant capital and other resources to alleviate problems caused by such actual or perceived breaches or attacks and remediate our systems. In addition, we could be exposed to a risk of loss, litigation, or regulatory action and possible liability, some or all of which may not be covered by insurance, and our ability to operate our business may be impaired. Unauthorized parties may in the future gain access, to systems or facilities used in our payments business through various means, including gaining unauthorized access into our systems or facilities or those of customers, attempting to fraudulently induce our employees, customers, or others into disclosing user names, passwords, payment information, or other sensitive information, which may in turn be used to access our IT systems or fraudulently transfer funds to bad actors.

Cyberattacks or other information or security breaches, whether directed at us or third parties, may result in a material loss or have material consequences. In the event of cyberattacks impacting our transportation payments business (i.e., Factoring and TriumphPayPayments), such attacks may result in payment diversions or other events that could cause us financial loss, which could be material given the payment volumes of such businesses. Furthermore, the public perception that a cyberattack on our systems has been successful, whether or not this perception is correct, may damage our reputation with customers and third parties with whom it does business. Unauthorized access of personal information and identity theft risks, in particular, could cause serious reputational harm. A successful penetration or circumvention of system security could cause us serious negative consequences, including loss of customers and business opportunities, costs associated with maintaining business relationships after an attack or breach; significant business disruption to our operations and business, misappropriation, exposure, or destruction of its confidential information, intellectual property, funds, and/or those of its customers; or damage to our, our customers’ and/or third parties’ computers or systems, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs, additional compliance costs, and could adversely impact our results of operations, liquidity and financial condition. In addition, we may not have adequate insurance coverage to compensate for losses from a cybersecurity event.

At December 31, 2024,2025, we held no$10.2 million of OREO. In the event the amount of OREO should increase due to an increase in defaults on bank loans, our losses and the costs and expenses to maintain the real estate,estate likewise would increase. Any additional increase in losses and maintenance costs and expenses due to OREO may have a material adverse effect on our business, financial condition and results of operations. Such effects may be particularly pronounced in a market of reduced real estate values and excess inventory, which may make the disposition of OREO properties more difficult, increase maintenance costs and expenses and may reduce our ultimate realization from any OREO sales, which could have an adverse effect on our business, financial condition and results of operations.

We currently hold investments in certain CLO subordinated notes or preference shares or other CLO securities, and may continue to make such investments in the future. The subordinated notes or preference shares of a CLO are usually entitled to all of the income generated by the CLO after the CLO pays all of the interest due on the debt notes and its expenses. However, there will be little or no income available to the CLO subordinated notes or preference shares if there are defaults on the underlying collateral in excess of certain amounts or if the recoveries on such defaulted collateral are less than certain amounts. Similarly, any investment we make in debt securities of a CLO that are junior to other debt securities of the entity will be payable only in the event that the underlying collateral generates sufficient income to make the interest payments on the securities of the CLO that are senior to any such junior debt instruments. Consequently, the value of any investment we make in the subordinated notes, preference shares or other debt securities of CLOs could decrease substantially depending on the performance of the underlying collateral in such CLO. In addition, the subordinated notes, preference shares and other debt securities of CLOs are generally illiquid, and because they represent a leveraged investment in the CLO’s assets, their value will generally fluctuate more than the values of the underlying collateral. As of December 31, 2024,2025, we had investments with a net carrying amount of $1.9$1.6 million in the subordinated notes of three CLOs.

Our board of directors intends to retain all of our earnings to promote growth and build capital.capital, or to deploy a portion of such earnings through share repurchase programs. Accordingly, we do not expect to pay dividends in the foreseeable future. In addition, we are subject to certain restrictions on the payment of cash dividends as a result of banking laws, regulations and policies. Further, the Federal Reserve issued Supervisory Letter SR 09-4 on February 24, 2009 and revised as of March 27, 2009, which provides guidance on the declaration and payment of dividends, capital redemptions and capital repurchases by bank holding companies. Supervisory Letter SR 09-4 provides that, as a general matter, a financial holding company should eliminate, defer or significantly reduce its dividends, if: (1) the financial holding company’s net income available to stockholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (2) the financial holding company’s prospective rate of earnings retention is not consistent with the financial holding company’s capital needs and overall current and prospective financial condition; or (3) the financial holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. Failure to do so could result in a supervisory finding that the financial holding company is operating in an unsafe and unsound manner.

We are a financial holding company headquartered in Dallas, Texas and registered under the Bank Holding Company Act, that offers a diversified line of banking, factoring, payments, and intelligence services. Our principal subsidiary is TBK Bank, SSB, a Texas state savings bank and the entity through which we offer substantially all of our products and services. Effective January, 1, 2025, we merged Triumph Financial Services LLC, the entity though which we previously conducted all of our factoring operations, with and into TBK Bank, SSB. As of December 31, 2024,2025, we had consolidated total assets of $5.949$6.381 billion, total loans held for investment of $4.547$4.991 billion, total deposits of $4.821$4.950 billion and total stockholders’ equity of $890.9$941.8 million.

We offer traditional banking services, commercial lending product lines focused on businesses that require specialized financial solutions and national lending product lines that further diversify our lending operations. Our banking operations commenced in 2010 and include a branch network developed through organic growth and acquisition, including concentrations in the front range of Colorado, the Quad Cities market in Iowa and Illinois and atwo full service branchbranches in Dallas, Texas. Our traditional banking offerings include a full suite of lending and deposit products and services. These activities are focused on our local market areas and some products are offered on a nationwide basis. They generate a stable source of core deposits and a diverse asset base to support our overall operations. Our asset-based lending and equipment lending products are offered on a nationwide basis and generate attractive returns. Additionally, we offer equipment lending and mortgage warehouse lending and purchase liquid credit lending products on a nationwide basis to provide further asset base diversification and our mortgage warehouse lending generates stable deposits. Our Banking products and services share basic processes and have similar economic characteristics.

In addition to our traditional banking operations, we also operate a factoring business focused primarily on serving the over-the-road trucking industry. This business involves the provision of working capital to the trucking industry through the purchase of invoices generated by small to medium sized trucking fleets ("Carriers") at a discount to provide immediate working capital to such Carriers. In 2024, our factoring business also launched its Factoring as a Service ("FaaS") product. As part of our FaaS product, we offer certain back-office factoring services to the over-the-road transportation industry, enabling our FaaS customers to either supplement their own factoring operations or to offer factoring services to their customers wholly supported by our platform. Our factoring business operates in a highly specialized niche with unique processes and earns substantially higher yields on its factored accounts receivable portfolio than our other lending products described above.

Our payments business, TriumphPay,business is a payments network for the over-the-road trucking industry. TriumphPayThis platform was originally designed as a platform to manage Carrier payments for third party logistics companies, or 3PLs ("Brokers") and the manufacturers and other businesses that contract directly for the shipment of goods (“Shippers”), with a focus on increasing on-balance sheet factored receivable transactions through the offering of quick pay transactions for Carriers receiving such payments through the TriumphPay platform.network. During 2021, TriumphPaywe acquired HubTran, Inc., a software platform that offers workflow solutions for the processing and approval of Carrier Invoices for approval by Brokers or purchase by the factoring businesses providing working capital to Carriers ("Factors"). Following such acquisition, the TriumphPayour strategy shifted from a capital-intensive on-balance sheet product with a greater focus on interest income to a network for the trucking industry with an additional focus on fee revenue. TriumphPayOur network connects Brokers, Shippers, Factors and Carriers through forward-thinking solutions that help each party successfully manage the life cycle of invoice presentment for services provided by Carrier through the processing and audit of such invoice to its ultimate payment to the Carrier or the Factor providing working capital to such Carrier. DuringAs 2024,party of our payments business, we introducedalso offer our LoadPay product; a digital bank account developed for Carriers. LoadPay provides a user experience and financial products, including small business checkingtransactional accounts, tailored to the financial needs of the small trucking companies that are the ultimate payees inside of the TriumphPay network. A key feature of the LoadPay product is our ability to rapidly fund invoices approved for payment through the TriumphPay network or approved for purchase as part of our factoring operations to the LoadPay account without the need for such payments to be processed through traditional payment rails such as ACH transfers. TriumphPayWe offersalso offer supply chain finance to Brokers, allowing them to pay their Carriers faster and drive Carrier loyalty. TriumphPayIn providesaddition, through the network, we provide tools and services to increase automation, mitigate fraud, create back-office efficiency and improve the payment experience. TriumphPayOur payments business also operates in a highly specialized niche with unique processes and key performance indicators.

Our data intelligence business, which we call Intelligence, was launched at the beginning of the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of Isometric Technologies Inc., a company that provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry. The operations of this segment were further supplemented with our acquisition of Greenscreens AI. Inc., a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights during the quarter ended June 30, 2025. Data has the ability to drive efficiency, enhance decision-making, and enable Shippers, Brokers, and Carriers to operate more profitably in a very competitive over-the-road trucking market. With our access to data from our TriumphPaypayments network and other sources, we believe we can develop products and services to offer to logistics service providers, allowing them to better plan for peak periods, competitively source freight capacity, and allocate resources efficiently, thus improving their profitability. Going forward,Our Intelligence willbusiness operateoperates in a highly specialized niche with unique processes and key performance indicators.

At December 31, 2024,2025, our business is primarily focused on providing financial services to participants in the for-hire trucking ecosystem in the United States, including Brokers, Shippers, Factors and Carriers. Within such ecosystem, we operate our TriumphPay payments platform, which connects such parties to streamline and optimize the presentment, audit and payment of transportation invoices. We also act as capital provider to the Carrier industry through our factoring subsidiary, Triumph Financial Services.business. We have begun to offer data services through our Intelligence offerings. Our traditional banking operations provide stable, low cost deposits to support our operations, a diversified lending portfolio to add stability to our balance sheet, and a suite of traditional banking products and services to participants in the for-hire trucking ecosystem to deepen our relationship with such clients.

We have determined our reportable segments are Banking, Factoring, Payments and Intelligence. For the year ended December 31, 2024,2025, our Banking segment generated 60%57% of our total segment revenue (comprised of interest and noninterest income),revenue, our Factoring segment generated 30%31% of our total segment revenue, our Payments segment generated 10%11% of our total segment revenue, and our Intelligence segment generated less than 1% of our total segment revenue. Total segment revenue is defined as interest and noninterest income.

At December 31, 2024,2025, we had total assets of $5.949$6.381 billion, including gross loans of $4.547$4.991 billion, compared to $5.347$5.949 billion of total assets and $4.163$4.547 billion of gross loans at December 31, 2023.2024. Total loans increased $383.9$444.3 million during the year ended December 31, 2024.2025. Our Banking loans, which constitute 73%71% of our total loan portfolio at December 31, 2024,2025, increased from $3.046$3.340 billion in aggregate as of December 31, 20232024 to $3.340$3.525 billion as of December 31, 2024,2025, an increase of 9.6%.5.5%. Our Factoring factored receivables, which constitute 23%24% of our total loan portfolio at December 31, 2024,2025, increased from $0.942$1.033 billion in aggregate as of December 31, 20232024 to $1.033$1.221 billion as of December 31, 2024,2025, an increase of 9.7%.18.2%. Our Payments factored receivables, which constitute 4%5% of our total loan portfolio at December 31, 2024,2025, decreasedincreased from $174.7$171.7 million in aggregate as of December 31, 20232024 to $171.7$242.1 million as of December 31, 2024,2025, aan decreaseincrease of 1.8%.41.0%.

At December 31, 2024,2025, we had total stockholders' equity of $890.9$941.8 million. During the year ended December 31, 2024,2025, total stockholders’ equity increased $26.5$50.9 million. Capital ratios remained strong with Tier 1 capital and total capital to risk weighted assets ratios ofwere 13.06%10.74% and 15.23%,12.71%, respectively, at December 31, 2024.2025.

The total dollar value of invoices purchased by Triumphour FinancialFactoring Servicessegment during the year ended December 31, 20242025 was $10.370$11.699 billion with an average invoice size of $1,786.$1,752. The transportation average invoice size for the year was $1,750.$1,717. This compares to invoice purchase volume of $10.837$10.370 billion with an average invoice size of $1,862$1,786 and average transportation invoice size of $1,810$1,750 duringfor the same period a year ago.ended December 31, 2024.

During 2022 and the early part of 2023, the U.S. experienced decades-high inflation and a rising interest rate environment not seen in several years. TheSince then, the rate of inflation has slowed; during the latter part of 2023 and throughout 2024. That said,however, the impacts of prior inflation and the looming threat of further inflation, whether caused by monetary policy, tariffs, or other factors, could make it more difficult for our borrowers to repay their loans, potentially leading to increased delinquencies, increased volume of loan modifications, and financial losses for the Company. In terms of our borrowers' repayment of loans, we have experienced some of these effects during 2023 and 2024,effects, particularly in our commercial real estate and equipment finance portfolios. This resulted in an increase in the volume of loan modifications, including modifications made to troubled borrowers. At current rates, we believe that our borrowers have incentives to work constructively with us toward viable long-term solutions and our approach is to be both proactive and patient with them in an effort to minimize loan losses. Additionally, while interest rates in the macro economy were relatively flat throughout 2024,2024 furtherand decreased throughout 2025, future increases in such rates to combat inflation could incentivize our depositors to seek higher yielding products, which could result in some deposit run-off, and our ability to retain or grow our deposit base could be hindered by higher market interest rates in the future. See Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” for a discussion of the Company's Asset/Liability Management and Interest Rate Risk. Additionally, increased rates on our borrowers' variable rate loans could lead to increased delinquencies, increased volume of loan modifications, and financial losses for the Company.

The Company did experience the direct impact of inflation and rising costs in the form of higher salaries, general and administrative costs due to wage inflation and price increases throughout the 2023past andthree 2024.years. While such impact was softer during 2024 than 20232025 and the Company has not yet experienced any material adverse effects, the prolonged impact of a higher interest rate environment and resumed inflation could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2024.2025.

Given the nature of the Company's operations, supply chain disruptions, whether caused by tariffs, thenatural wildfires in California,disasters, or otherwise, do not have a direct impact on the Company; however, such disruptions could make it more difficult for our borrowers to repay their loans, potentially leading to increased delinquencies, increased volume of loan modifications, and financial losses for the Company. We did not experience such adverse effects during the year ended December 31, 2024.2025. Supply chain disruptions most prominently impact our trucking transportation and factoring operations discussed in terms of trucking volume in the following section. While the Company has not yet experienced any material adverse effects, the prolonged impact or increased intensity of supply chain disruptions could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2024.2025.

While economic conditions in foreign countries, including impacts related to the war in Ukraine, conflict in the Middle East,East and South America, and tensions in U.S.-China relations, could affect the stability of global financial markets, which could hinder U.S. economic growth, we did not experience a financial impact due to such conditions during the year ended December 31, 2024.2025. While the Company has not yet experienced any material adverse effects, the prolonged impact of such conflicts, or other global economic events, could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2024.2025.

TheOver the last few years, including most of 2025, the largest driver of changes in revenue at our Factoring segmentsegment, and to a lesser extent, our Payments segment, is fluctuation in the freight markets, particularly in brokered freight, which is priced largely off the spot market (a reflection of real-time balance of carrier supply and shipper demand in the market) and subject to variability in diesel prices. The softness in freight duringsince 2023 washas been the result of a combination of falling volumes and excess capacity and such softness continued throughout 2024.capacity. In recent quarters, average rates per mile have decreased and returned spot rates to levels last seen in 2019. For the spot rate market, the drop was a little higher than the drop in diesel prices over the same period. Throughout much of 2023 and into 2024, spotSpot rates had fallen below the cost per mile to operate for many carriers. As a result, we have observed a number of small and medium-sized trucking companies either leave the market by signing on with larger carriers or electing to sell their fleets or companies and move on to other endeavors, though the pace of these exits has slowed recently. The confluence of these circumstances has resulted in apersistently steady decline inlow invoice prices and costsdecreased prices of new and used equipment. Such invoice prices and costsprices of new and used equipment remainedremain consistently below recentthe years throughoutleading theup latterto half of 2023 and all of 2024.2023. This has put pressure on the revenue of our Factoring segment as well as our equipment finance borrowers, resulting in increased equipment finance delinquencies and loan modifications. Equipment finance losses have been manageable, but continued softness in the freight markets could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2024.2025.

Though the transportation factoring industry continues to fight headwinds due to higher cost of capital and lower average invoices, we have sufficient access to capital, manageable funding costs, and an ability to diversify transportation and factoring income. We continue to focus our efforts on technology initiatives to be more efficient, support the enterprise, and enhance our customer experience while delivering various products to strengthen our clients throughout their business lifecycle. Our plan is for managed growth in our factoring segment with a greater emphasis on enhancing efficiency and profitability. These plans may include use of new technology tools, including those that integrate artificial intelligence capabilities.

We earned net income of $25.4 million for the year ended December 31, 2025 compared to $16.1 million for the year ended December 31, 20242024, comparedan to $41.1 million for the year ended December 31, 2023, a decreaseincrease of $25.0$9.3 million.

We earned net interest income of $350.6 million for the year ended December 31, 2025 compared to $350.5 million for the year ended December 31, 20242024, comparedan to $368.1 million for the year ended December 31, 2023, a decreaseincrease of $17.6$0.1 million, or 4.8%,0.03%, primarily driven by the following factors.

Interest income increased $0.1$8.0 million, or 0.0%, and was relatively flat1.9%, due to the following items. Yields across all of our broad interest earning asset categories increased with the exception of loans. We experienced an increase in total average interest earning assets of $242.7$439.9 million, or 5.1%,8.7%, including increasesan of $214.7 million and $55.8 million of cash and cash equivalents and taxable securities, respectively. That said, we experienced a decreaseincrease in average total loans of $16.6$540.2 million, or 0.4%.12.8%. The average balance of our higher yielding Factoring factored receivables decreasedincreased $40.3$145.2 million, or 3.9%,14.5%, and we also experienced an increase in average Payments factored receivables. The decrease in average Factoring factored receivables and the increase in average Payments factored receivables was impacted by our decision to move supply chain financing receivables from our Factoring segment to our Payments segment at the end of the second quarter 2023. Average Banking loans increased $15.1$364.2 million, or 0.5%,12.0%, due to increases in the average balances of commercial real estate and construction and developmentdevelopment, 1-4 family residential, commercial, consumer, and mortgage warehouse loans, partially offset by decreases in commercial real estate and mortgage warehousefarmland loans. Interest income from our Banking loans is impacted by our lower yielding mortgage warehouse lending product. The average mortgage warehouse lending balance was $1.087 billion for the year ended December 31, 2025 compared to $739.4 million for the year ended December 31, 2024 compared to $763.6 million for the year ended December 31, 2023. A component of interest income consists of discount accretion on acquired loan portfolios and acquired liquid credit loans. We recognized discount accretion on purchased loans of $2.8 million and $5.2 million for the years ended December 31, 2024 and 2023, respectively.2024.

Our mortgage warehouse business has nearly self-funded for several quarters due to the servicing deposits of its customers. The average balance of such deposits was $777.4 million for the year ended December 31, 2025 and $587.6 million for the year ended December 31, 2024. These deposits are noninterest bearing deposits on our balance sheet. Despite their classification, many of these deposits are not truly free of cost as our clients are compensated for these balances in the form of an earnings interest rebate rather than deposit interest. As a result, such noninterest bearing deposits decrease our loan yield rather than increase our deposit rates. It is important to note that our net interest margin is not affected by this arrangement. During the year ended December 31, 2025, these deposits decreased our overall yield on loans by 57 bps and our overall cost of deposits and cost of funds would have been 54 bps and 51 bps higher, respectively. During the year ended December 31, 2024, these deposits decreased our overall yield on loans by 60 bps and our overall cost of deposits and cost of funds would have been 56 bps and 53 bps higher, respectively.

We are a financial holding company headquartered in Dallas, Texas and registered under the Bank Holding Company Act, that offers a diversified line of banking, factoring, payments, and intelligence services. Our principal subsidiary is TBK Bank, SSB, a Texas state savings bank and the entity through which we offer substantially all of our products and services. Effective January, 1, 2025, we merged Triumph Financial Services LLC, the entity through which we previously conducted all of our factoring operations, with and into TBK Bank, SSB. As of MarchJune 31,30, 2026, we had consolidated total assets of $6.877$7.404 billion, total loans held for investment of $5.189$5.477 billion, total deposits of $5.700$6.217 billion and total stockholders’ equity of $950.7$963.3 million.

In addition to our traditional banking operations, we also operate a factoring business focused primarily on serving the over-the-road trucking industry. This business involves the provision of working capital to the trucking industry through the purchase of invoices generated by small to medium sized trucking fleets ("Carriers") at a discount to provide immediate working capital to such Carriers. In 2024, our factoring business also launched its Factoring as a Service ("FaaS") product. As part of our FaaS product, we offer certain back-office or white-labeled factoring services to the over-the-road transportation industry, enabling our FaaS customers to either supplement their own factoring operations or to offer factoring services to their customers wholly supported by our platform. Our factoring business operates in a highly specialized niche with unique processes and earns substantially higher yields on its factored accounts receivable portfolio than our other lending products described above.

As part of our payments business, we also offer our LoadPay product; a digital bankbanking accountplatform developed for Carriers. LoadPay provides a user experience and financial products, including small business transactional accounts, tailored to the financial needs of the small trucking companies that are the ultimate payees inside of the network. A key feature of the LoadPay product is our ability to rapidly fund invoices approved for payment through the network or approved for purchase as part of our factoring operations to the LoadPay account without the need for such payments to be processed through traditional payment rails such as ACH transfers. We also offer supply chain finance to Brokers, allowing them to pay their Carriers faster and drive Carrier loyalty. In addition, through the network, we provide tools and services to increase automation, mitigate fraud, create back-office efficiency and improve the payment experience. Our payments business also operates in a highly specialized niche with unique processes and key performance indicators.

At MarchJune 31,30, 2026, our business is primarily focused on providing financial services to participants in the for-hire trucking ecosystem in the United States, including Brokers, Shippers, Factors and Carriers. Within such ecosystem, we operate our payments platform, which connects such parties to streamline and optimize the presentment, audit and payment of transportation invoices. We also act as capital provider to the Carrier industry through our factoring business. We have begun to offer data services through our Intelligence offerings. Our traditional banking operations provide stable, low cost deposits to support our operations, a diversified lending portfolio to add stability to our balance sheet, and a suite of traditional banking products and services to participants in the for-hire trucking ecosystem to deepen our relationship with such clients.

We have determined our reportable segments are Banking, Factoring, Payments and Intelligence. For the threesix months ended MarchJune 31,30, 2026, our Banking segment generated 51%50% of our total segment revenue (comprised of interest and noninterest income), our Factoring segment generated 33%35% of our total segment revenue, our Payments segment generated 13%14% of our total segment revenue, and our Intelligence segment generated 3%1% of our total segment revenue.

FirstSecond Quarter 2026 Overview

Net income available to common stockholders for the three months ended MarchJune 31,30, 2026 was $5.6$10.6 million, or $0.23$0.44 per diluted share, compared to a net lossincome to common stockholders for the three months ended MarchJune 31,30, 2025 of $0.8$3.6 million, or $(0.03)$0.15 per diluted share. For the three months ended MarchJune 31,30, 2026, our return on average common equity was 2.48%4.59% and our return on average assets was 0.39%.0.63%.

At MarchJune 31,30, 2026, we had total assets of $6.877$7.404 billion, including gross loans held for investment of $5.189$5.477 billion, compared to $6.381 billion of total assets and $4.991 billion of gross loans held for investment at December 31, 2025. Total loans held for investment increased $197.8$485.8 million during the threesix months ended MarchJune 31,30, 2026. Our Banking loans, which constitute 67%61% of our total loan portfolio at MarchJune 31,30, 2026, decreased from $3.525 billion in aggregate as of December 31, 2025 to $3.467$3.337 billion as of MarchJune 31,30, 2026, a decrease of 1.6%.5.3%. Our Factoring factored receivables, which constitute 27%32% of our total loan portfolio at MarchJune 31,30, 2026, increased from $1.221 billion in aggregate as of December 31, 2025 to $1.405$1.748 billion as of MarchJune 31,30, 2026, an increase of 15.1%.43.2%. Our Payments factored receivables, which constitute 6%7% of our total loan portfolio at MarchJune 31,30, 2026, increased from $242.1 million in aggregate as of December 31, 2025 to $312.9$387.4 million as of MarchJune 31,30, 2026, an increase of 29.2%.60.0%.

At MarchJune 31,30, 2026, we had total liabilities of $5.926$6.440 billion, including total deposits of $5.700$6.217 billion, compared to $5.439 billion of total liabilities and $4.950 billion of total deposits at December 31, 2025. Deposits increased $749.7$1.267 millionbillion during the threesix months ended MarchJune 31,30, 2026.

At MarchJune 31,30, 2026, we had total stockholders' equity of $950.7$963.3 million. During the threesix months ended MarchJune 31,30, 2026, total stockholders’ equity increased $8.9$21.5 million. Capital ratios remained strong with Tier 1 capital and total capital to risk weighted assets ratios of 10.68%10.47% and 12.56%,12.28%, respectively, at MarchJune 31,30, 2026.

The total dollar value of invoices purchased by our Factoring segment during the three months ended MarchJune 31,30, 2026 was $3.263$4.117 billion with an average invoice size of $1,938.$2,201. The average transportation invoice size for the three months ended MarchJune 31,30, 2026 was $1,897.$2,160. This compares to invoice purchase volume of $2.708$2.874 billion with an average invoice size of $1,808$1,693 and average transportation invoice size of $1,769$1,663 during the same period a year ago.

Our Payments segment processed 8.29.1 million invoices paying Carriers a total of $11.014$13.492 billion during the three months ended MarchJune 31,30, 2026. This compares to processed volume of 7.28.5 million invoices for a total of $8.778$10.081 billion during the same period a year ago.

The USPS Settlement had ana $12.4 million and $11.5 million positive impact on pretax net income for the yearthree and six months ended DecemberJune 31,30, 20252025, respectively made up of the prior period impacts of the interest and fees, legal expense recovery, and the recovery of the previously charged-off acquired over-formula advances. The $19.4 million Misdirected Payments Receivable balance was legally discharged upon receipt of the settlement proceeds on July 10, 2025.

Our transportation revenues, particularly factoring revenue in our factoringFactoring and paymentsPayments segments, are highly correlated to fluctuations in the freight markets, particularly in brokered freight, which is priced largely off the spot market (a reflection of real-time balance of carrier supply and shipper demand in the market) and subject to variability in diesel prices. The softness in freight since 2023 was a combination of falling volumes and excess capacity. Throughout those years, average rates per mile have decreased and returned spot rates to levels last seen in 2019. For the spot rate market, the drop was a little higher than the drop in diesel prices over the same period. Spot rates had fallen below the cost per mile to operate for many carriers. As a result, we observed a number of small and medium-sized trucking companies either leave the market by signing on with larger carriers or electing to sell their fleets or companies and move on to other endeavors, though the pace of these exits has slowed recently. The confluence of these circumstances resulted in persistently low invoice prices and decreased prices of new and used equipment in recent years. Beginning in the fourth quarter of 2025 and continuing through the first quarterhalf of 2026, capacity dynamics have begun to shiftshifted as increased CDL enforcement for non-domiciled drivers and heightened focus on English proficiency requirements reduced the effective supply of available drivers. This tightening in capacity began to rebalance the freight market, contributing to improved freight availability and rising spot rates. Over the same period, diesel prices also increased, driven primarily by higher crude oil prices and refinery constraints resulting in spot rates and fuel level reaching highs not seen in several years and driving improved revenue performance in our factoring segment.

Payments segment revenue growth generally has three drivers: winning new relationships, deepening existing relationships, and value-based pricing. Value-based pricing was the largest growth driver in payments revenue during the first quarterhalf of 2026, but we also brought on and ramped up several new relationships while deepening relationships with others through our cross-selling efforts. Further, as fees are generally charged on a per invoice processed basis, an increase in payment invoices processed also drove an increase in Payments segment revenue.

(3)Net charge-offs to average loans ratios are for the threesix months ended MarchJune 31,30, 2026 and the year ended December 31, 2025.

Three months ended MarchJune 31,30, 2026 compared with three months ended MarchJune 31,30, 2025.

We earned net income of $6.4$11.4 million for the three months ended MarchJune 31,30, 2026 compared to net income of $17$4.4 thousandmillion for the three months ended MarchJune 31,30, 2025, an increase of $6.4$7.0 million.

We earned net interest income of $86.1$98.8 million for the three months ended MarchJune 31,30, 2026 compared to $84.4$88.7 million for the three months ended MarchJune 31,30, 2025, an increase of $1.7$10.1 million, or 2.0%,11.4%, primarily driven by the following factors.

Interest income increased $0.5$15.3 million, or 0.5%,14.0%, due to changes in average interest earning assets which increased $491.8$912.9 million, or 9.3%,16.5%, including an increase in average total loans of $446.4$546.0 million, or 10.0%.11.6%. The average balance of our higher yielding Factoring factored receivables increased $209.2$441.4 million, or 19.7%,38.8%, and our average Payments factored receivables increased $85.3$124.2 million, or 49.1%.60.7%. Average Banking loans increaseddecreased $151.9$19.6 million, or 4.7%0.6% due to increasesdecreases in the average balances of commercial real estate, construction, land development, and land, residential real estate, commercial, consumer, and mortgage warehousefarmland loans. Interest income from our Banking loans is impacted by our lower yielding mortgage warehouse lending product. The average mortgage warehouse lending balance was $1.088$1.110 billion for the three months ended MarchJune 31,30, 2026 compared to $936.5$1.068 millionbillion for the three months ended MarchJune 31,30, 2025.

Interest expense decreasedincreased $1.2$5.2 million, or 6.9%,25.3%, primarily driven by $12.3 million of deposit interest expense incurred in the current period from mortgage warehouse earnings interest rebates that exceeded interest earned on a given client's loans (see detailed discussion of this arrangement below). The impact of the excess mortgage warehouse rebates was partially offset by a decrease in total average interest-bearing liabilities of $28.5$584.9 million, or 0.9%,18.2%, period over period, despiteincluding ana increasedecrease in average total interest bearing deposits of $28.2$293.7 million, or 1.0%.10.5% Theand a decrease in average FHLB borrowings of $292.0 million, or 98.0%. Increases and decrease in interest expenserates was also driven by decreased ratespaid on our interest bearing liabilities.liabilities were mixed. Average noninterest bearing demand deposits grew $553.7$1.417 million.billion primarily due to the recent influx of mortgage warehouse client deposits.

Net interest margin decreased to 6.06%6.15% for the three months ended MarchJune 31,30, 2026 from 6.49%6.43% for the three months ended MarchJune 31,30, 2025, a decrease of 4328 basis points or 6.6%.4.4%.

The decrease in our net interest margin was partially offset by a decrease in ourOur average cost of interest bearing liabilities ofincreased 15by 136 basis points. This decreaseincrease in average cost was caused by decreased rates across the majorityaforementioned ofexcess ourmortgage interestwarehouse bearingrebates liabilitiesassociated periodwith overmortgage period.warehouse client deposits.

Our mortgage warehouse business hasis nearlymore than self-funded for several quarters due to the noninterest bearing servicing deposits of its customers.clients. The average balance of such deposits was $1.135$2.045 billion and $646.1$781.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. TheseGiven their legal form, these deposits are classified as noninterest bearing deposits on our balance sheet. Despite their classification, many of these deposits are not truly free of cost as we compensate our clients are compensated for these balances in the form of an earnings interest rebate rather than deposit interest. As a result, such noninterest bearing deposits first decrease our loan yield ratherbefore than increaseincreasing our deposit rates. ItBecause isof importantthe recent influx of these deposits, some clients hold significantly higher deposit balances than loan balances. As a result, we are now, in some cases, paying out more in rebates than we earn in interest on a given client’s loans. In those cases, we are recording that excess rebate as deposit interest expense. Whether recorded as interest expense or an offset to noteinterest thatincome, ourthe effect on net interest marginincome and net income is notthe affectedsame: bythese thisare arrangement.profitable funds as they displace more expensive wholesale funding and can be invested risk-free above their cost. During the three months ended MarchJune 31,30, 2026,2026 and June 30, 2025, deposit interest expense recognized on these deposits decreasedwas our$12.3 overall yield on loans by 74 bpsmillion and our overall cost of deposits and cost of funds would have been 68 bps and 65 bps higher,$0, respectively. During the three months ended March 31, 2025, these deposits decreased our overall yield on loans by 52 bps and our overall cost of deposits and cost of funds would have been 49 bps and 46 bps higher, respectively.

For available for sale debt securities in an unrealized loss position, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense. At MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, the Company determined that all impaired available for sale securities experienced a decline in fair value below the amortized cost basis due to noncredit-related factors. Therefore, the Company carried no ACL at those respective dates and there was no credit loss expense recognized by the Company during the three months ended MarchJune 31,30, 2026. The same was true for the same period in the prior year.

The ACL on held to maturity ("HTM") securities is estimated at each measurement date on a collective basis by major security type. At MarchJune 31,30, 2026 and December 31, 2025, the Company’s held to maturity ("HTM") securities consisted of investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. At MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, the Company carried $3.1 million and $3.2$3.1 million, respectively, of these HTM securities at amortized cost. The required ACL on these balances was $2.1 million at MarchJune 31,30, 2026 and $1.6$2.1 million at DecemberMarch 31, 2025.2026. We recognized $0.5a millionbenefit ofto credit loss expense of $0.1 million during the current quarter. Credit loss expense during the three months ended MarchJune 31,30, 2025 was also a benefit of $0.1 million. None of the overcollateralization triggers tied to the CLO securities were tripped as of MarchJune 31,30, 2026. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call.

Our ACL on loans was $34.2$34.8 million as of MarchJune 31,30, 2026, compared to $36.5 million as of December 31, 2025, representing an ACL to total loans ratio of 0.66%0.64% and 0.73%, respectively.

Our credit loss expense on loans decreasedincreased $1.8$2.9 million, or 137.8%,558.1%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.

The decreaseincrease in credit loss expense was primarily driven by net charge-off activity. During the three months ended MarchJune 31,30, 2026, we had net charge-offs of $1.9$1.7 million. Excluding the $10.8 million charge-off on the acquired PCD loan which had no impact on credit loss expense, we had a net recovery of $3.0 million during the three months ended June 30, 2025. Such net charge-offs for the three months ended June 30, 2025 includes the aforementioned $3.8 million recovery resulting from the USPS Settlement. Further, changes in volume and mix of the loan portfolio resulted in credit loss expense of $3.1 million during the three months ended June 30, 2026 compared to net$1.2 charge-offsmillion of $5.8credit millionloss expense during the same period a year ago. ChangesThe increase in credit loss expense was partially offset by changes to projected loss drivers and prepayment speeds that the Company forecasted over the reasonable and supportable forecast periods to calculate expected losses which resulted in a benefit to credit loss expense of $1.7$2.0 million during the three months ended MarchJune 31,30, 2026 compared to $0.5$0.2 million of benefit to credit loss expense during the same period a year ago. Further,The changes in volume and mix of the loan portfolio resultedincrease in credit loss expense ofwas $0.1also partially offset by changes in required specific reserves. Such specific reserves decreased $0.6 million during the three months ended MarchJune 31,30, 2026 compared to $0.6an millionincrease of credit$1.5 loss expensemillion during the same period a year ago.

Credit loss expense for off balance sheet credit exposures decreasedincreased $0.5$0.6 million, primarily due to changes to outstanding commitments to fund and changes to assumed loss rates period over period.

•Fee income. Fee income increased $4.6$2.8 million due to a $2.6$3.1 million increase in fee income from our Payments segment and a $2.0$0.7 million increase in fee income from our Intelligence segmentsegment, mostlypartially drivenoffset by thea acquisition$1.1 ofmillion Greenscreensdecrease in Mayfee 2025.income from insurance services. There were no other significant changes within the components of fee income.

•Other. Other noninterest income decreasedincreased $1.5$0.9 million due to a $0.8$1.8 million decreasepayment tied to a change in rentalcontrol incomeprovision generated byon the property purchased by the Company in Marchsale of 2024an andunrelated subsequentlythird-party sold in December of 2025 as well as a $0.5 million decrease in noninterest income on loans.business. There were no other significant changes within the components of other noninterest income.

Noninterest expense decreasedincreased $1.9$0.8 million, or 1.9%.0.8%. Details of the more significant changes in the various components of noninterest expense are further discussed below.

•Salaries and Employee Benefits. Salaries and employee benefits expenses decreasedincreased $0.6$0.2 million, or 0.9%.0.3%. Our average full-time equivalent employees were 1,443.31,440.3 and 1,547.71,576.0 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Employee salaries decreased $2.3$1.3 millionmillion, and commissionsbonus expense decreased $0.2$1.4 million, and temporary labor decreased $0.1 million. These decreases were offset by an increase in bonusseverance expense of $0.4$1.8 millionmillion, an increase in commissions expense of $0.5 million, and an increase in employee benefits expense such as 401(k) benefits match, employee insurance and stock based compensation of $1.5$0.9 million.

•Occupancy, Furniture and Equipment. Occupancy, furniture and equipment expenses decreased $1.9$1.8 million, or 23.0%,21.8%, primarily due to a $1.1$1.2 million decrease in depreciation expense and a $0.3 million decrease in building property taxes mostly driven by the sale of the building in December 2025 that had been purchased for the purpose of constructing a future headquarters for Triumph and a $0.3 million decrease in building property taxes period over period.Triumph.

•Software Amortization. Software amortization expense increased $1.3$0.6 million, or 65.7%,21.4%, primarily due to additional software assets coming on line during late 2025 and early 2025.2026.

•Other. Other noninterest expenseexpense, which includes loan-related expenses, training and recruiting, postage, insurance, and subscription services.services, decreased $3.8 million, or 37.3%. Other noninterest expense decreasedfor $0.5the million,three ormonths 7.9%.ended June 30, 2025 included a $2.0 million litigation settlement (unrelated to the USPS Settlement) and $1.8 million of lease termination payments related to the building we sold in December 2025. There were no other significant changes within the components of other noninterest expense.

Income tax expense increased $1.7$1.0 million, from $0.1$3.5 million for the three months ended MarchJune 31,30, 2025 to $1.8$4.5 million for the three months ended MarchJune 31,30, 2026. The effective tax rate was 22%28% for the three months ended MarchJune 31,30, 2026, compared to 76%44% for the three months ended MarchJune 31,30, 2025. The effective tax rate for the three months ended MarchJune 31,30, 2025 was impacted by limited restricted stock stock-based compensation deductibility, higher state tax rates, and higher disallowed expenses including some transaction costs paid in connection with the relativelyGreenscreens small numbers used to calculate such rate.acquisition.