Triumph Financial, Inc. (NASDAQ:TFIN) Q4 2023 Earnings Call Transcript January 24, 2024

Triumph Financial, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Luke Wyse: Good morning. It's 9:30 in Dallas, and we're looking forward to our time with you this morning. I'd like to start by thanking you for your interest in Triumph Financial. I speak with enough of you to know what a busy time of year this is, and we sincerely appreciate you taking a moment to discuss our Fourth Quarter results with us. With that, let's get to business. We had some great developments this quarter, and we're carrying a lot of momentum despite a persistently challenging freight environment. As you read in the letter last evening, we are also working on some interesting opportunities and seeing positive results from our efforts and investments. We remain encouraged and optimistic. Last evening, we published our quarterly shareholder letter.

That letter and our quarterly results will form the basis of our call today. However, before we get started, I would like to remind you that this conversation may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to publicly revise any forward-looking statements. For details, please refer to the safe harbor statement in our shareholder letter published last evening. All comments made during today's call are subject to that safe harbor statement. With that, I'd like to turn the call over to Aaron for a welcome and to kick off our Q&A. Aaron?

Aaron Graft: Thank you, Luke. Good morning, everyone, and welcome. I too, hope that you found the shareholder letter, informative and even thought provoking. Before turning it over to questions, I do want to reiterate the four things that I think investors should know. First, TriumphPay hit the much anticipated target of being breakeven one year ahead of schedule. We're not calling this a mission accomplished moment. but it is encouraging to see this performance in the face of a very soft transportation market. Second, we used this letter to announce LoadPay as a natural extension of the payments network. This wallet is targeted towards smaller truckers, which make up 95% of the entire trucking universe. And we believe that the total addressable market for LoadPay will be very large.

We further believe that our unique positioning for distribution will set LoadPay apart from any others who've come before, and we hope and expect we will see widespread adoption. Third, we did recognize some credit expense during the quarter that was outside our normal performance. The majority of that was tied to the rate and freight environment. And while we don't ever love having that happen. I would say overall, I'm pleased with how our credit performed through one of the most challenging years in recent memory. And finally, the year ahead could continue to be difficult from a short-term or near-term earnings perspective, especially if interest rates fall as projected and transportation remains weak. And we have the ability to adjust our strategy at the margins to offset some of those headwinds, but we will not deviate from the plan.