UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________

FORM 10-Q

___________________________________________________________


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

For the quarterly period ended ~~June~~September 30, 2025


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

For the transition period from _______ to _______

Commission File Number 001-36722

___________________________________________________________

TRIUMPH FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

___________________________________________________________


Texas						20-0477066
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

12700 Park Central Drive, Suite 1700

Dallas, Texas 75251

(Address of principal executive offices)

(214) 365-6900

(Registrant’s telephone number, including area code)

___________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

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


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock — $0.01 par value, 23,~~734~~763,~~073~~401 shares, as of ~~July~~October 1413, 2025.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

TradingSymbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

TFIN

~~NASDAQ~~New ~~Global~~York ~~Select~~Stock ~~Market~~Exchange

Depositary Shares Each Representing a 1/40th Interest in a Share of 7.125% Series C Fixed-Rate Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share

TFINP

NASDAQ Global Select Market

NYSE Texas

Depositary Shares Each Representing a 1/40th Interest in a Share of 7.125% Series C Fixed-Rate Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share

TFIN PR

New York Stock Exchange

Table of Contents

TRIUMPH FINANCIAL, INC.

FORM 10-Q

~~June~~September 30, 2025

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 Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	7
	Condensed Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4852
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	~~103~~108
Item 4.	Controls and Procedures	~~104~~110
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	~~105~~110
Item 1A.	Risk Factors	~~105~~110
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~105~~110
Item 3.	Defaults Upon Senior Securities	~~105~~110
Item 4.	Mine Safety Disclosures	~~105~~111
Item 5.	Other Information	~~105~~111
Item 6.	Exhibits	~~107~~112

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

Table of Contents

TRIUMPH FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

~~June~~September 30, 2025 and December 31, 2024

(Dollar amounts in thousands)

	June 30,2025		December 31,2024
	September 30,2025		December 31,2024
	(Unaudited)
ASSETS
Cash and due from banks	$	8470,~~561~~528	$	73,836
Interest bearing deposits with other banks	~~197~~76,~~785~~694		256,281
Total cash and cash equivalents	~~282~~147,~~346~~222		330,117
Securities - equity investments with readily determinable fair values	4,~~526~~569		4,445
Securities - available for sale	~~392~~378,~~275~~088		381,561
Securities - held to maturity, net of allowance for credit losses of $1,399 and $3,491, respectively, fair value of $2,294 and $2,514, respectively	1,782		1,876
Securities - held to maturity, net of allowance for credit losses of $1,399 and $3,491, respectively, fair value of $1,939 and $2,514, respectively	1,766		1,876
Loans held for sale	69,~~066~~741		1,172
Loans, net of allowance for credit losses of $38,691 and $40,714, respectively	4,914,479		4,506,246
Loans, net of allowance for credit losses of $33,549 and $40,714, respectively	4,953,373		4,506,246
Federal Home Loan Bank and other restricted stock	1314,~~339~~092		14,054
Premises and equipment, net	~~149~~141,~~120~~141		160,737
Capitalized software, net	4344,~~011~~934		37,971
Goodwill	353,~~900~~898		241,949
Intangible assets, net	5552,~~265~~291		16,259
Bank-owned life insurance	6364,~~787~~338		62,690
Deferred tax asset, net	3,023		13,581
Deferred tax assets, net	—		13,581
Other assets	~~211~~191,~~829~~696		176,317
Total assets	$	6,~~494~~357,~~748~~149	$	5,948,975
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing	$	2,~~285~~095,~~327~~017	$	1,964,457
Interest bearing	2,~~900~~860,~~771~~229		2,856,363
Total deposits	54,~~186~~955,~~098~~246		4,820,820
Federal Home Loan Bank advances	~~180~~280,000		30,000
Subordinated notes	69,~~780~~829		69,662
Junior subordinated debentures	42,~~666~~829		42,352
Other liabilities	103,822		95,222
Deferred tax liabilities, net	687		—
Total liabilities	5,582,366		5,058,056
Other liabilities	89,225		95,222
Total liabilities	5,437,816		5,058,056
Commitments and contingencies - See Note 7 and Note 8
Stockholders' equity - See Note 11
Preferred stock	45,000		45,000
Common stock, 23,727,046 and 23,391,411 shares outstanding, respectively	295		291
Common stock, 23,763,401 and 23,391,411 shares outstanding, respectively	295		291
Additional paid-in-capital	~~588~~593,~~302~~624		567,884
Treasury stock, at cost	(270,619)		(268,356)
Retained earnings	552,~~049~~956		549,215
Accumulated other comprehensive income (loss)	(21,~~645~~923)		(3,115)
Total stockholders’ equity	~~912~~919,~~382~~333		890,919
Total liabilities and stockholders' equity	$	6,~~494~~357,~~748~~149	$	5,948,975

See accompanying condensed notes to consolidated financial statements.

Table of Contents

TRIUMPH FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2025 and 2024

(Dollar amounts in thousands, except per share amounts)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Interest and dividend income:

Loans, including fees

5456,~~836~~400

5452,~~900~~886

~~108~~164,~~412~~812

~~108~~161,~~452~~338

Factored receivables, including fees

4443,~~217~~841

40,~~028~~598

82126,~~911~~752

77118,~~937~~535

Securities

5,~~721~~489

56,~~523~~500

1116,~~029~~518

1017,~~874~~374

FHLB and other restricted stock

~~246~~223

~~234~~379

~~495~~718

~~466~~845

Cash deposits

42,~~181~~987

67,~~330~~712

811,~~624~~611

1118,~~233~~945

Total interest income

~~109~~108,~~201~~940

~~107~~108,~~015~~075

~~211~~320,~~471~~411

~~208~~317,~~962~~037

Interest expense:

Deposits

1517,~~505~~532

1514,~~520~~041

2947,~~902~~434

2741,~~672~~713

Subordinated notes

661

1,~~225~~227

12,~~343~~004

23,~~449~~676

Junior subordinated debentures

1,~~035~~049

1,~~162~~172

23,~~029~~078

23,~~346~~518

Other borrowings

31,~~322~~865

12,~~193~~936

57,~~136~~001

25,~~545~~481

Total interest expense

2021,~~523~~107

19,~~100~~376

3859,~~410~~517

3554,~~012~~388

Net interest income

8887,~~678~~833

8788,~~915~~699

~~173~~260,~~061~~894

~~173~~262,~~950~~649

Credit loss expense (benefit)

~~(702)~~4,284

4,~~155~~263

~~628~~4,912

1014,~~051~~314

Net interest income after credit loss expense (benefit)

8983,~~380~~549

8384,~~760~~436

~~172~~255,~~433~~982

~~163~~248,~~899~~335

Noninterest income:

Service charges on deposits

1,~~742~~847

1,~~810~~865

35,~~338~~185

35,~~537~~402

Card income

1,~~922~~968

2,~~085~~135

35,~~719~~687

36,~~953~~088

Net gains (losses) on sale of loans

~~190~~119

~~123~~253

~~324~~443

~~(69)~~184

Fee income

1214,~~755~~305

89,~~517~~129

2136,~~869~~174

1726,~~200~~329

Insurance commissions

1,~~282~~481

1,~~505~~472

24,~~532~~013

34,~~073~~545

Other

1,~~493~~728

32,~~127~~643

46,~~792~~520

47,~~472~~115

Total noninterest income

1921,~~384~~448

17,~~167~~497

3658,~~574~~022

3249,~~166~~663

Noninterest expense:

Salaries and employee benefits

5960,~~882~~192

5655,~~005~~447

~~118~~178,~~600~~792

~~110~~165,~~190~~637

Occupancy, furniture and equipment

87,~~139~~862

8,~~565~~701

1624,~~581~~443

1624,~~201~~902

FDIC insurance and other regulatory assessments

~~894~~1,468

~~641~~679

13,~~621~~089

1,~~294~~973

Professional fees

~~(320)~~5,228

4,~~558~~734

510,~~744~~972

812,~~099~~833

Amortization of intangible assets

32,~~400~~956

23,~~869~~600

58,~~800~~756

59,~~593~~193

Advertising and promotion

12,~~838~~209

21,~~008~~416

35,~~302~~511

34,~~222~~638

Communications and technology

12,~~315~~295

1412,~~307~~422

2436,~~559~~854

2638,~~201~~623

Software amortization

2,~~865~~868

1,~~357~~484

47,~~857~~725

24,~~531~~015

Travel and entertainment

1,~~619~~043

1,~~513~~431

34,~~111~~154

34,~~022~~453

Other

107,~~208~~593

5,~~520~~732

1624,~~838~~431

1117,~~361~~093

Total noninterest expense

~~100~~103,~~840~~714

9795,~~343~~646

~~201~~304,~~013~~727

~~187~~283,~~714~~360

Net income before income tax expense

71,~~924~~283

36,~~584~~287

79,~~994~~277

814,~~351~~638

Income tax expense

~~3,504~~(425)

~~837~~940

3,~~557~~132

12,~~446~~386

Net income

41,~~420~~708

25,~~747~~347

46,~~437~~145

612,~~905~~252

Dividends on preferred stock

(~~802~~801)

(12,~~603~~404)

Net income (loss) available to common stockholders

~~3,618~~907

14,~~945~~546

23,~~834~~741

59,~~302~~848

Earnings per common share

Basic

0.1504

0.0819

0.1216

0.2342

Diluted

0.1504

0.0819

0.1216

0.2242

See accompanying condensed notes to consolidated financial statements.

Table of Contents

TRIUMPH FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2025 and 2024

(Dollar amounts in thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income	$	41,~~420~~708	$	25,~~747~~347	$	46,~~437~~145	$	612,~~905~~252
Other comprehensive income:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period	~~1,019~~950		~~(344)~~2,073		~~613~~1,565		~~(554)~~1,518
Tax effect	(~~245~~228)		82(496)		(~~143~~373)		85(410)
Unrealized holding gains (losses) arising during the period, net of taxes	~~774~~722		~~(262)~~1,577		~~470~~1,192		~~(469)~~1,108
Reclassification of amount realized through sale or call of securities	—		—		—		—
Reclassification of amount realized through sale or call securities	—		—		—		—
Tax effect	—		—		—		—
Reclassification of amount realized through sale or call of securities, net of taxes	—		—		—		—
Change in unrealized gains (losses) on securities, net of tax	~~774~~722		~~(262)~~1,577		~~470~~1,192		~~(469)~~1,108
Total other comprehensive income (loss)	~~774~~722		~~(262)~~1,577		~~470~~1,192		~~(469)~~1,108
Comprehensive income (loss)	$	52,~~194~~430	$	26,~~485~~924	$	47,~~907~~337	$	613,~~436~~360

See accompanying condensed notes to consolidated financial statements.

Table of Contents

TRIUMPH FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2025 and 2024

(Dollar amounts in thousands)

(Unaudited)

	Preferred Stock		Common Stock			AdditionalPaid-in-Capital		Treasury Stock			RetainedEarnings		Accumulated		TotalStockholders'Equity
	LiquidationPreferenceAmount		SharesOutstanding	ParAmount				SharesOutstanding	Cost				OtherComprehensiveIncome (Loss)
Balance, January 1, 2025	$	45,000	23,391,411	$	291	$	567,884	5,729,802	$	(268,356)	$	549,215	$	(3,115)	$	890,919
Vesting of restricted stock units and performance stock units	—		8,973	—		—		—	—		—		—		—
Stock option exercises, net	—		495	—		25		—	—		—		—		25
Issuance of common stock pursuant to the Employee Stock Purchase Plan	—		20,892	1		1,367		—	—		—		—		1,368
Stock based compensation	—		—	—		2,831		—	—		—		—		2,831
Forfeiture of restricted stock awards	—		(575)	—		36		575	(36)		—		—		—
Purchase of treasury stock, net	—		(1,456)	—		—		1,456	(128)		—		—		(128)
Purchase of treasury stock	—		(1,456)	—		—		1,456	(128)		—		—		(128)
Dividends on preferred stock	—		—	—		—		—	—		(801)		—		(801)
Net income	—		—	—		—		—	—		17		—		17
Other comprehensive income (loss)	—		—	—		—		—	—		—		(304)		(304)
Balance, March 31, 2025	$	45,000	23,419,740	$	292	$	572,143	5,731,833	$	(268,520)	$	548,431	$	(3,419)	$	893,927
Issuance of common stock	—		256,984	2		12,730		—	—		—		—		12,732
Vesting of restricted stock units and performance stock units	—		88,930	1		(1)		—	—		—		—		—
Stock based compensation	—		—	—		3,430		—	—		—		—		3,430
Purchase of treasury stock, net	—		(38,608)	—		—		38,608	(2,099)		—		—		(2,099)
Purchase of treasury stock	—		(38,608)	—		—		38,608	(2,099)		—		—		(2,099)
Dividends on preferred stock	—		—	—		—		—	—		(802)		—		(802)
Net income	—		—	—		—		—	—		4,420		—		4,420
Other comprehensive income (loss)	—		—	—		—		—	—		—		774		774
Balance, June 30, 2025	$	45,000	23,727,046	$	295	$	588,302	5,770,441	$	(270,619)	$	552,049	$	(2,645)	912,382
Vesting of restricted stock units and performance stock units	—		7,027	—		—		—	—		—		—		—
Stock option exercises, net	—		6,172	—		193		—	—		—		—		193
Stock based compensation	—		—	—		4,013		—	—		—		—		4,013
Issuance of common stock pursuant to the Employee Stock Purchase Plan	—		23,156	—		1,116		—	—		—		—		1,116
Dividends on preferred stock	—		—	—		—		—	—		(801)		—		(801)
Net income	—		—	—		—		—	—		1,708		—		1,708
Other comprehensive income (loss)	—		—	—		—		—	—		—		722		722
Balance, September 30, 2025	$	45,000	23,763,401	$	295	$	593,624	5,770,441	$	(270,619)	$	552,956	$	(1,923)	$	919,333

Table of Contents

	Preferred Stock		Common Stock			AdditionalPaid-in-Capital		Treasury Stock			RetainedEarnings		AccumulatedOtherComprehensiveIncome (Loss)		TotalStockholders'Equity
	LiquidationPreferenceAmount		SharesOutstanding	ParAmount				SharesOutstanding	Cost
Balance, January 1, 2024	$	45,000	23,302,414	$	290	$	550,743	5,683,841	$	(265,038)	$	536,331	$	(2,926)	$	864,400
Vesting of restricted stock and performance stock units	—		9,877	—		—		—	—		—		—		—
Stock option exercises, net	—		5,401	—		144		—	—		—		—		144
Issuance of common stock pursuant to the Employee Stock Purchase Plan	—		18,328	—		1,099		—	—		—		—		1,099
Stock based compensation	—		—	—		3,627		—	—		—		—		3,627
Purchase of treasury stock, net	—		(1,023)	—		—		1,023	(81)		—		—		(81)
Dividends on preferred stock	—		—	—		—		—	—		(801)		—		(801)
Net income	—		—	—		—		—	—		4,158		—		4,158
Other comprehensive income (loss)	—		—	—		—		—	—		—		(207)		(207)
Balance, March 31, 2024	$	45,000	23,334,997	$	290	$	555,613	5,684,864	$	(265,119)	$	539,688	$	(3,133)	$	872,339
Vesting of restricted stock and performance stock units	—		63,401	1		(1)		—	—		—		—		—
Stock based compensation	—		—	—		3,439		—	—		—		—		3,439
Forfeiture of restricted stock awards	—		(278)	—		21		278	(21)		—		—		—
Purchase of treasury stock, net	—		(44,601)	—		—		44,601	(3,212)		—		—		(3,212)
Dividends on preferred stock	—		—	—		—		—	—		(802)		—		(802)
Net income	—		—	—		—		—	—		2,747		—		2,747
Other comprehensive income (loss)	—		—	—		—		—	—		—		(262)		(262)
Balance, June 30, 2024	$	45,000	23,353,519	$	291	$	559,072	5,729,743	$	(268,352)	$	541,633	$	(3,395)	$	874,249
Vesting of restricted stock units and performance stock units	—		5,332	—		—		—	—		—		—		—
Stock option exercises, net	—		10,350	—		281		—	—		—		—		281
Issuance of common stock pursuant to the employee stock purchase plan	—		18,321	—		1,085		—	—		—		—		1,085
Stock based compensation	—		—	—		4,026		—	—		—		—		4,026
Dividends on preferred stock	—		—	—		—		—	—		(801)		—		(801)
Net income	—		—	—		—		—	—		5,347		—		5,347
Other comprehensive income (loss)	—		—	—		—		—	—		—		1,577		1,577
Balance, September 30, 2024	$	45,000	23,387,522	$	291	$	564,464	5,729,743	$	(268,352)	$	546,179	$	(1,818)	$	885,764

See accompanying condensed notes to consolidated financial statements.

Table of Contents

TRIUMPH FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the ~~Six~~Nine Months Ended ~~June~~September 30, 2025 and 2024

(Dollar amounts in thousands)

(Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

2025

2024

Cash flows from operating activities:

Net income

46,~~437~~145

612,~~905~~252

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation

711,~~899~~600

711,~~604~~545

Net accretion on loans

(~~778~~2,066)

(12,~~598~~491)

Amortization of subordinated notes issuance costs

~~118~~167

~~261~~394

Amortization of junior subordinated debentures

~~314~~477

~~302~~456

Net (accretion) amortization on securities

(~~216~~349)

(~~593~~665)

Amortization of intangible assets

58,~~800~~756

59,~~593~~193

Software amortization

47,~~857~~725

24,~~531~~015

Deferred taxes, net

47,~~164~~646

(2,~~243~~279)

Credit loss expense (benefit)

~~628~~4,912

1014,~~051~~314

Stock based compensation

610,~~261~~274

711,~~066~~092

Net (gains) losses on equity securities

(81213)

(~~468~~629)

Net OREO (gains) losses and valuation adjustments

—(304)

Net (gains) losses on disposal of premises and equipment

(~~443~~441)

—1

Origination of loans held for sale

(813,~~627~~747)

(35,~~495~~844)

Proceeds from sale of loans originated or purchased for sale

86,~~101~~955

15,~~368~~253

Net (gains) losses on sale of loans

(~~324~~443)

69(184)

Net change in operating leases

(~~217~~351)

~~312~~211

Change in estimated fair value of indemnification asset

~~409~~605

~~409~~614

Change in estimated fair value of revenue share asset

~~(274)~~47

(~~879~~1,295)

(Increase) decrease in other assets

(3614,~~001~~543)

(116,~~556~~957)

Increase (decrease) in other liabilities

10(2,~~152~~269)

(1511,~~015~~289)

Net cash provided by (used in) operating activities

630,~~179~~583

1137,~~126~~723

Cash flows from investing activities:

Purchases of securities available for sale

(105,000)

(83,261)

Proceeds from sales of equity securities

—

Proceeds from maturities, calls, and pay downs of securities available for sale

95,028

43,194

Purchases of securities available for sale

(105,000)

(165,451)

Proceeds from maturities, calls, and pay downs of securities held to maturity

135

307

Proceeds from maturities, calls, and pay downs of securities available for sale

110,253

68,959

Purchases of loans held for investment

(21,742)

(2,503)

Proceeds from maturities, calls, and pay downs of securities held to maturity

196

796

Proceeds from sale of loans

13,795

18,016

Purchases of loans held for investment

(22,663)

(7,839)

Net change in loans

(406,345)

(141,637)

Proceeds from sale of loans

18,257

24,578

Purchases of premises and equipment

(7,294)

(53,735)

Net change in loans

(449,241)

(190,878)

Proceeds from sales of premises and equipment

11,455

—

Purchases of premises and equipment

(9,261)

(54,550)

Net proceeds from sale of OREO

—

Proceeds from sales of premises and equipment

11,458

—

Expenditures for capitalized software

(9,897)

(10,748)

Net proceeds from sale of OREO

2,299

(Purchases) redemptions of FHLB and other restricted stock, net

715

238

Expenditures for capitalized software

(14,688)

(16,131)

(Purchases) redemptions of FHLB and other restricted stock, net

(38)

7,166

Net cash paid for acquisitions

(137,517)

—

Acquired intangible assets

(124)

(2,920)

Net cash provided by (used in) investing activities

(~~566~~595,~~791~~975)

(~~232~~336,~~985~~206)

Cash flows from financing activities:

Net increase (decrease) in deposits

~~365~~134,~~278~~426

~~414~~729,~~540~~216

Increase (decrease) in Federal Home Loan Bank advances

~~150~~250,000

25(225,000)

Preferred stock dividends

(12,~~603~~404)

Stock option exercises, net

25218

~~144~~425

Proceeds from employee stock purchase plan common stock issuance

12,~~368~~484

12,~~099~~184

Purchase of treasury stock, net

(2,227)

(3,293)

Net cash provided by (used in) financing activities

~~512~~382,~~841~~497

~~435~~501,~~887~~128

Net increase (decrease) in cash and cash equivalents

(47182,~~771~~895)

~~214~~202,~~028~~645

Cash and cash equivalents at beginning of period

330,117

286,635

Cash and cash equivalents at end of period

~~282~~147,~~346~~222

~~500~~489,~~663~~280

See accompanying condensed notes to consolidated financial statements.

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TRIUMPH FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the ~~Six~~Nine Months Ended ~~June~~September 30, 2025 and 2024

(Dollar amounts in thousands)

(Unaudited)

	Six Months Ended June 30,
	Nine Months Ended September 30,
	2025		2024
Supplemental cash flow information:
Interest paid	$	3756,~~472~~416	$	3353,~~824~~026
Income taxes paid, net	$	1,~~642~~829	$	~~646~~813
Cash paid for operating lease liabilities	$	24,~~952~~452	$	23,~~425~~881
Supplemental noncash disclosures:
Loans transferred to OREO	$	12,~~995~~205	$	43621
Loans held for investment transferred to loans held for sale	$	1819,~~075~~842	$	1622,~~388~~787
Lease liabilities arising from obtaining right-of-use assets	$	548	$	2,382
Assets transferred to assets held for sale	$	6,240	$	—
Lease liabilities arising from obtaining right-of-use assets	$	548	$	2,482
Securities available for sale purchased, not settled	$	—	$	5,000

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Triumph Financial, Inc. (collectively with its subsidiaries, “Triumph Financial”, or the “Company” as applicable) is a financial holding company headquartered in Dallas, Texas, offering a diversified line of banking, factoring, payments, and intelligence services. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Triumph CRA Holdings, LLC (“TCRA”), TBK Bank, SSB (“TBK Bank”), and TBK Bank’s wholly owned subsidiary Triumph Insurance Group, Inc. (“TIG”). Substantially all of the Company's products and services (other than certain insurance brokerage activities at TIG) are offered through TBK Bank.

Effective January, 1, 2025, Triumph Financial Services LLC, the entity through which the Company previously conducted all of its factoring operations, was merged with and into TBK Bank, SSB.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and in accordance with guidance provided by the Securities and Exchange Commission (“SEC”). Accordingly, the condensed financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary for a fair presentation. Transactions between the subsidiaries have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for the three and ~~six~~nine months ended ~~June~~September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Reportable Segments

The Company’s reportable segments are comprised of strategic business units primarily based upon industry categories and, to a lesser extent, the core competencies relating to product origination, distribution methods, operations and servicing. Segment determination also considers organizational structure and is consistent with the presentation of financial information to the chief operating decision maker to evaluate segment performance, develop strategy, and allocate resources. The Company's chief operating decision maker is the Chief Executive Officer of Triumph Financial, Inc. Management has determined that the Company has four reportable segments consisting of Banking, Factoring, Payments, and Intelligence.

The Banking segment includes the operations of TBK Bank's traditional community banking services. The Banking segment derives its revenue principally from investments in interest-earning assets as well as noninterest income typical for the banking industry.

The Factoring segment derives its revenue principally from factoring services.

The Payments segment includes the operations of the TBK Bank's payments products and services focused on the transportation industry, which is the payments network for presentment, audit, and payment of over-the-road trucking invoices. The Payments segment derives its revenue from transaction fees and interest income on factored receivables related to invoice payments. These factored receivables consist of (i) invoices where we offer a carrier a quickpay opportunity to receive payment at a discount in advance of the standard payment term for such invoice in exchange for the assignment of such invoice to us, (ii) offering freight brokers the ability to settle their invoices with us on an extended term following our payment to their carriers as an additional liquidity option for such freight brokers, and (iii) factoring transactions where we purchase receivables payable to such freight brokers from their shipper clients.

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Intelligence segment was launched in the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of the assets of Isometric Technologies Inc., a company that provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry. The operations of this segment were further supplemented with our acquisition of Greenscreens AI. Inc., a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights, during the quarter ended June 30, 2025. Intelligence offerings enable better decision making, market intelligence and automation. The revenue for these offerings is derived through access and subscription fees, as well as seat licenses where applicable.

For further discussion of management's operating segments and allocation methodology, see Note 16 – Business Segment Information.

Adoption of New Accounting Standards

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 Requires public entities to disclose significant segment expenses, an amount and description for other segment items, the title and position of the entity’s chief operating decision maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss to assess segment performance, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis. ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 effective December 31, 2024. Adoption of ASU 2023-07 did not have a material impact on the Company's consolidated financial statements. See Note 16 – Business Segment Information for new disclosures required by ASU 2023-07.

Newly Issued, But Not Yet Effective Accounting Standards

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. ASU 2023-09 is effective for the Company for annual periods beginning after December 15, 2024 with early adoption permitted. The Company will update its income tax disclosures upon adoption.

In November 2024, the FASB issued Accounting Standards Update 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)" ("ASU 2024-03"). ASU 2024-03 requires public entities to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. ASU 2024-03 is effective for the Company for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will update its expense disclosures upon adoption.

~~USPS~~In ~~Settlement~~July 2025, the FASB issued Accounting Standards Update 2025-05, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets" ("ASU 2025-05"). ASU 2025-05 provides the option to elect a practical practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. ASU 2025-05 is effective for the Company for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years. The Company does not expect adoption of ASU 2025-05 to have a material impact on its consolidated financial statements.

AsIn ofSeptember ~~June 30,~~ 2025, wethe ~~carried~~FASB aissued ~~receivable~~Accounting ~~(the~~Standards ~~“Misdirected~~Update ~~Payments~~2025-06, ~~Receivable”)~~Intangibles ~~payable~~- byGoodwill ~~the~~and ~~United~~Other ~~States~~- ~~Postal~~Internal-Use ~~Service~~Software (~~“USPS”~~Subtopic 350-40), ~~arising~~Targeted ~~from~~Improvements ~~accounts factored~~ to athe ~~large~~Accounting ~~carrier.~~for ~~The~~Internal-Use ~~balance~~Software" of("ASU ~~such Misdirected Payments Receivable, net of customer reserves, was $19~~2025-06").~~4 million.~~ ~~The~~ASU ~~amounts~~2025-06 ~~represented~~clarified ~~by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to,~~ and ~~previously~~modernizes ~~honored by,~~ the ~~USPS,~~accounting ~~which~~for ~~amount~~costs ~~was~~related ~~then not remitted back~~ to usinternal-use ~~by such customer as required~~software. The ~~USPS~~amendments ~~disputed their obligation to make such payment, citing purported deficiencies~~ in ~~the~~ASU ~~notices~~2025-06 ~~delivered~~remove toall ~~them.~~references ~~We have been a party~~ to ~~litigation~~project instages ~~the~~throughout ~~United~~Subtopic ~~States~~350-40 ~~Court~~and ofclarify ~~Federal Claims against~~ the ~~USPS~~threshold ~~seeking~~entities aapply ~~ruling that the USPS was obligated~~ to ~~make~~begin ~~the~~capitalizing ~~payments represented by this receivable directly to us~~costs. OnASU ~~June 30,~~ 2025,-06 weis ~~reached~~effective anfor ~~agreement with~~ the ~~USPS~~Company ~~("the~~for ~~USPS~~fiscal ~~Settlement")~~years ~~whereby~~beginning ~~the~~after ~~USPS~~December ~~agreed~~15, to2027 ~~pay~~and usinterim ~~$47.5 million~~periods towithin ~~settle~~those ~~the~~fiscal ~~litigation in the United States Court of Federal Claims and certain other related proceedings~~years. ~~Such~~The ~~settlement~~Company ~~was~~is ~~entered~~currently ~~into~~evaluating ~~as part of a global settlement of~~ the ~~disputes~~impact ~~related to the Misdirected Payments Receivable, other amounts we asserted were due to us from USPS for other balances owed to us as a result~~ of ~~their~~adoption ~~failure to honor our notices~~ of ~~assignment,~~ASU ~~and~~2025-06 ~~certain claims of the large carrier involved in this matter against the USPS for underpayment~~ on ~~certain~~its ~~transportation~~consolidated ~~contracts~~financial ~~in which we had a security interest~~statements. ~~We received the full $47.5 million settlement proceeds on July 10, 2025. The proceeds of the USPS Settlement will be applied as follows:~~

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

USPS Settlement

At June 30, 2025, we carried a receivable (the “Misdirected Payments Receivable”) payable by the United States Postal Service (“USPS”) arising from accounts factored to a large carrier. The balance of such Misdirected Payments Receivable, net of customer reserves, was $19.4 million. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputed their obligation to make such payment, citing purported deficiencies in the notices delivered to them. We were a party to litigation in the United States Court of Federal Claims against the USPS seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. On June 30, 2025, we reached an agreement with the USPS ("the USPS Settlement") whereby the USPS agreed to pay us $47.5 million to settle the litigation in the United States Court of Federal Claims and certain other related proceedings. Such settlement was entered into as part of a global settlement of the disputes related to the Misdirected Payments Receivable, other amounts we asserted were due to us from USPS for other balances owed to us as a result of their failure to honor our notices of assignment, and certain claims of the large carrier involved in this matter against the USPS for underpayment on certain transportation contracts in which we had a security interest. We received the full $47.5 million settlement proceeds on July 10, 2025. The proceeds of the USPS Settlement were applied as follows:

•$11.5 million to the aforementioned large carrier,

•$19.4 million to relieve the entire balance of Misdirected Payments Receivable, net of customer reserves,

•$1.1 million of interest and fees,

•$7.9 million of legal expense recovery

•$3.8 million to recovery of previously charged-off acquired over-formula advances related to the aforementioned large carrier, and

•$3.8 million to CVLG in accordance with the amended terms of the CVLG transaction.

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

Restructuring Activities

In August 2025, the Company announced a reduction in force involving approximately 5% of the Company's workforce, as well as other cost saving initiatives including non-headcount related reductions in facilities, legacy technology, vendor spend, and travel. These actions are part of the Company’s initiatives to re-balance its cost structure in light of technology investments that have delivered significant efficiencies across the organization. These advancements have reduced the need for certain roles and prompted a reorganization of teams and responsibilities to better serve the Company’s transportation verticals. The Company believes these actions will strengthen its competitive position, enhance operational agility, and support sustainable long-term growth.

During the three months ended September 30, 2025, the Company recognized $3,134,000 of expense related to the reduction in force, which consisted primarily of one-time termination charges arising from severance obligations and other customary employee benefit payments made in connection with a reduction in force. These costs were included in salaries and benefits expense in the consolidated statements of income and for segment reporting, $522,000 of the expense was recognized by the Banking segment, $1,059,000 was recognized by the Factoring segment, $513,000 was recognized by the Payments segment, $210,000 was recognized by the Intelligence segment, and $830,000 was allocated to the corporate and other category. The Company also recognized $1,250,000 of expense during the three months ended September 30, 2025 related to the cost saving initiatives, which consisted primarily of one-time contract amendment fees. These costs were included in professional fees in the consolidated statements of income and were allocated to the corporate and other category for segment reporting.

All of the restructuring costs were incurred and substantially all of the restructuring costs were paid during the three months ended September 30, 2025. The remaining liability for these costs totaled $246,000 at September 30, 2025 and was included in other liabilities in the consolidated balance sheets.

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 — ACQUISITIONS AND DIVESTITURES

Greenscreens.ai

On May 8, 2025, the Company, through its wholly-owned subsidiary TBK Bank, SSB, acquired Greenscreens AI, Inc. ("Greenscreens"), a pricing solution for the logistics industry that delivers short-term freight market pricing intelligence and business insights.

A summary of the estimated fair values of assets acquired, consideration transferred, and the resulting goodwill is as follows:

(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	1,601
Accounts receivable and other	~~933~~935
Intangible assets - customer relationship	36,380
Intangible assets - software	8,340
	47,254
	47,256
Liabilities assumed:
Accounts payable and other	1,104
Deferred tax liabilities, net	6,251
	7,355
Fair value of net assets acquired	$	39,~~899~~901
Consideration:
Cash paid	$	139,118
Stock consideration	12,732
Total consideration	$	151,850
Goodwill	$	111,~~951~~949

Consideration paid for the acquisition totaled $151,850,000, including $139,118,000 in cash and 256,984 shares of the Company's common stock valued at $12,732,000.

11The Company has recognized goodwill of $111,949,000, which was calculated as the excess of the fair value of consideration exchanged as compared to the fair value of identifiable net assets acquired. The goodwill in this acquisition resulted from expected synergies between our Factoring, Payments, and Intelligence segments, as well as progress towards the development of data products to be offered to the freight brokerage community; therefore goodwill of $16,096,000 was allocated to the Company's Factoring segment, $15,425,000 was allocated to the Company's Payments segment, and $80,428,000 was allocated to the Company’s Intelligence segment. The goodwill will not be deducted for tax purposes. The initial accounting for the acquisition has not been completed because the fair values of the consideration paid, the assets acquired, and the liabilities assumed have not yet been finalized.

The intangible assets recognized include a customer relationship intangible asset with an acquisition date fair value of $36,380,000 which will be amortized utilizing an accelerated method over its twelve year estimated useful life and a capitalized software intangible asset with an acquisition date fair value of $8,340,000 which will be amortized on a straight-line basis over its five year estimated useful life. A customer relationship intangible asset of $21,520,000 was allocated to the Company's Intelligence segment and a customer relationship intangible asset of $14,860,000 was allocated to the Company's Payments segment. The entire software intangible asset was allocated to the Company's Intelligence segment.

Revenue and earnings of Greenscreens since the acquisition date have not been disclosed as the acquired company was merged into the Company and separate financial information is not readily available.

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company has recognized goodwill of $111,951,000, which was calculated as the excess of the fair value of consideration exchanged as compared to the fair value of identifiable net assets acquired. The goodwill in this acquisition resulted from expected synergies between our Factoring, Payments, and Intelligence segments, as well as progress towards the development of data products to be offered to the freight brokerage community; therefore goodwill of $16,096,000 was allocated to the Company's Factoring segment, $15,425,000 was allocated to the Company's Payments segment, and $80,430,000 was allocated to the Company’s Intelligence segment. The goodwill will not be deducted for tax purposes. The initial accounting for the acquisition has not been completed because the fair values of the consideration paid, the assets acquired, and the liabilities assumed have not yet been finalized.

Expenses related to the acquisition totaling $3,009,000 and $967,000 were recorded in professional fees in the consolidated statements of income during the three months ended June 30, 2025 and March 31, 2025, respectively.

Isometric Technologies Inc.

On December 1, 2024, the Company acquired the assets of Isometric Technologies Inc. ("ISO"), a freight technology company engaged in providing service and performance scoring and benchmarking capabilities to the over-the-road trucking industry.

A summary of the estimated fair values of assets acquired, consideration transferred, and the resulting goodwill is as follows:


(Dollars in thousands)
Assets acquired:
Intangible assets - capitalized software	$	1,680
Intangible assets - customer relationship	60
Intangible assets - other	20
Fair value of net assets acquired	$	1,760
Consideration:
Cash paid	$	10,000
Goodwill	$	8,240

The Company has recognized goodwill of $8,240,000, which was calculated as the excess of the fair value of consideration exchanged as compared to the fair value of identifiable net assets acquired and was allocated to the Company’s Intelligence segment. The goodwill in this acquisition resulted from expected synergies and progress towards the development of data products to be offered to the freight brokerage community. The goodwill will be deducted for tax purposes. The initial accounting for the acquisition has not been completed because the fair values of the assets acquired have not yet been finalized.

The intangible assets recognized include a capitalized software intangible asset with an acquisition date fair value of $1,680,000 which will be amortized on a straight-line basis over its four year estimated useful life, a customer relationship intangible asset with an acquisition date fair value of $60,000 which will be amortized utilizing an accelerated method over its four year estimated useful life, and a trade name intangible asset with an acquisition date fair value of $20,000 which will be amortized on a straight-line basis over its one year estimated useful life.

Revenue and earnings of ISO since the acquisition date have not been disclosed as the acquired company was merged into the Company and separate financial information is not readily available.

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Expenses related to the acquisition totaling $324,000 were recorded in professional fees in the consolidated statements of income during the three months ended December 31, 2024.

NOTE 3 — SECURITIES

Equity Securities With Readily Determinable Fair Values

The Company held equity securities with readily determinable fair values of $4,~~526~~569,000 and $4,445,000 at ~~June~~September 30, 2025 and December 31, 2024, respectively. The gross realized and unrealized gains and losses recognized on equity securities with readily determinable fair values in noninterest income in the Company’s consolidated statements of income were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Unrealized gains (losses) on equity securities held at the reporting date	$	1443	$	~~(19)~~161	$	81124	$	~~(66)~~95
Realized gains (losses) on equity securities sold during the period	—		—		—		—
	$	1443	$	~~(19)~~161	$	81124	$	~~(66)~~95

Equity Securities Without Readily Determinable Fair Values

The following table summarizes the Company's investments in equity securities without readily determinable fair values:

(Dollars in thousands)	June 30, 2025		December 31, 2024
Equity Securities without readily determinable fair value, at cost	$	74,809	$	71,807
Upward adjustments based on observable price changes, cumulative	10,163		10,163
Equity Securities without readily determinable fair value, carrying value	$	84,972	$	81,970

Equity securities without readily determinable fair values include Federal Home Loan Bank and other restricted stock, which are reported separately in the Company's consolidated balance sheets. Equity securities without readily determinable fair values also include the Company's investments in the common stock of Trax Group, Inc. and Warehouse Solutions Inc., with carrying amounts of $9,700,000 and $38,088,000, respectively, at June 30, 2025. Both investments have been allocated to our Payments segment and are included in other assets in the Company's consolidated balance sheets.

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~There~~Equity ~~were~~Securities noWithout ~~realized~~Readily orDeterminable ~~unrealized~~Fair ~~gains or losses recognized on equity securities without readily determinable fair values during the three and six months ended June 30, 2025 and 2024.~~ Values

~~Management~~The ~~monitors~~following ~~its~~table ~~equity~~summarizes ~~securities~~the ~~without~~Company's ~~readily~~investments ~~determinable fair values for observable transactions~~ in ~~similar~~ equity ~~instruments~~securities aswithout ~~well~~readily asdeterminable ~~indicators of impairment either of which would require it to mark such equity securities to~~ fair ~~value. No such transactions or indicators of impairment were detected during the three and six months ended June 30, 2025.~~values:


(Dollars in thousands)	September 30, 2025		December 31, 2024
Equity Securities without readily determinable fair value, at cost	$	75,652	$	71,807
Upward adjustments based on observable price changes, cumulative	10,163		10,163
Equity Securities without readily determinable fair value, carrying value	$	85,815	$	81,970

Equity securities without readily determinable fair values include Federal Home Loan Bank and other restricted stock, which are reported separately in the Company's consolidated balance sheets. Equity securities without readily determinable fair values also include the Company's investments in the common stock of Trax Group, Inc. and Warehouse Solutions Inc., with carrying amounts of $9,700,000 and $38,088,000, respectively, at September 30, 2025. Both investments have been allocated to our Payments segment and are included in other assets in the Company's consolidated balance sheets.

The gross realized and unrealized gains (losses) recognized on equity securities without readily determinable fair values in noninterest income in the Company’s consolidated statements of income were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Unrealized gains (losses) on equity securities still held at the reporting date	$	—	$	—	$	—	$	—
Realized gains (losses) on equity securities sold during the period	89		—		89		534
	$	89	$	—	$	89	$	534

Management monitors its equity securities without readily determinable fair values for observable transactions in similar equity instruments as well as indicators of impairment either of which would require it to mark such equity securities to fair value. No such transactions or indicators of impairment were detected during the three and nine months ended September 30, 2025.

Debt Securities

Debt securities have been classified in the financial statements as available for sale or held to maturity. The following table summarizes the amortized cost, fair value, and allowance for credit losses of debt securities and the corresponding amounts of gross unrealized gains and losses of available for sale securities recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses of held to maturity securities:

(Dollars in thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		Allowancefor CreditLosses		FairValue
June 30, 2025
September 30, 2025
Available for sale securities:
Mortgage-backed securities, residential	$	~~104~~99,~~322~~123	$	~~253~~282	$	(43,~~666~~989)	$	—	$	9995,~~909~~416
Asset-backed securities	~~862~~838		613		—		—		~~868~~851
State and municipal	2,~~872~~870		—1		(7952)		—		2,~~793~~819
CLO securities	~~286~~276,~~224~~381		1,~~063~~262		—		—		~~287~~277,~~287~~643
Corporate bonds	~~266~~265		—		(94)		—		~~257~~261
SBA pooled securities	1,~~211~~143		78		(5753)		—		1,~~161~~098
Total available for sale securities	$	~~395~~380,~~757~~620	$	1,~~329~~566	$	(4,~~811~~098)	$	—	$	~~392~~378,~~275~~088

(Dollars in thousands)	AmortizedCost		GrossUnrecognizedGains		GrossUnrecognizedLosses		FairValue
June 30, 2025
Held to maturity securities:
CLO securities	$	3,181	$	—	$	(887)	$	2,294
Allowance for credit losses	(1,399)
Total held to maturity securities, net of ACL	$	1,782

(Dollars in thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		Allowance for Credit Losses		FairValue
December 31, 2024
Available for sale securities:
Mortgage-backed securities, residential	$	89,740	$	89	$	(5,644)	$	—	$	84,185
Asset-backed securities	907		—		(2)		—		905
State and municipal	3,154		—		(91)		—		3,063
CLO Securities	290,286		1,627		—		—		291,913
Corporate bonds	266		—		(4)		—		262
SBA pooled securities	1,305		9		(81)		—		1,233
Total available for sale securities	$	385,658	$	1,725	$	(5,822)	$	—	$	381,561

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

AmortizedCost

~~GrossUnrealizedGains~~GrossUnrecognizedGains

GrossUnrecognizedLosses

FairValue

December 31, 2024

September 30, 2025

Held to maturity securities:

CLO securities

53,~~367~~165

—

(21,~~853~~226)

21,~~514~~939

Allowance for credit losses

(31,~~491~~399)

Total held to maturity securities, net of ACL

1,~~876~~766

The amortized cost and estimated fair value of securities at June 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
December 31, 2024
Available for sale securities:
Mortgage-backed securities, residential	$	89,740	$	89	$	(5,644)	$	—	$	84,185
Asset-backed securities	907		—		(2)		—		905
State and municipal	3,154		—		(91)		—		3,063
CLO Securities	290,286		1,627		—		—		291,913
Corporate bonds	266		—		(4)		—		262
SBA pooled securities	1,305		9		(81)		—		1,233
Total available for sale securities	$	385,658	$	1,725	$	(5,822)	$	—	$	381,561

	Available for Sale Securities				Held to Maturity Securities
(Dollars in thousands)	AmortizedCost		GrossUnrecognizedGains		GrossUnrecognizedLosses		FairValue
(Dollars in thousands)	AmortizedCost		FairValue		AmortizedCost		FairValue
December 31, 2024
Due in one year or less	$	191	$	190	$	—	$	—
Held to maturity securities:
Due from one year to five years	2,178		2,151		3,181		2,294
CLO securities	$	5,367	$	—	$	(2,853)	$	2,514
Due from five years to ten years	43,368		43,444		—		—
Allowance for credit losses	(3,491)
Due after ten years	243,625		244,552		—		—
Total held to maturity securities, net of ACL	$	1,876
	289,362		290,337		3,181		2,294
Mortgage-backed securities, residential	104,322		99,909		—		—
Asset-backed securities	862		868		—		—
SBA pooled securities	1,211		1,161		—		—
	$	395,757	$	392,275	$	3,181	$	2,294

~~There~~The ~~were~~amortized nocost ~~sales~~and ofestimated ~~debt~~fair ~~securities~~value ~~during~~of ~~the~~securities ~~three~~at ~~and~~September 30, ~~six~~2025, ~~months~~by ~~ended~~contractual ~~June 30~~maturity, ~~2025~~are ~~and~~shown ~~2024~~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.

Debt securities with a carrying amount of approximately $32,416,000 and $25,818,000 at June 30, 2025 and December 31, 2024, respectively, were pledged to secure public deposits, customer repurchase agreements, and for other purposes required or permitted by law.


	Available for Sale Securities				Held to Maturity Securities
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	190	$	190	$	—	$	—
Due from one year to five years	2,176		2,163		3,165		1,939
Due from five years to ten years	39,545		39,622		—		—
Due after ten years	237,605		238,748		—		—
	279,516		280,723		3,165		1,939
Mortgage-backed securities, residential	99,123		95,416		—		—
Asset-backed securities	838		851		—		—
SBA pooled securities	1,143		1,098		—		—
	$	380,620	$	378,088	$	3,165	$	1,939

Accrued interest on available for sale securities totaled $3,677,000 and $4,755,000 at June 30, 2025 and December 31, 2024, respectively, and was included in other assets on the Company's consolidated balance sheets. There ~~was~~were no ~~accrued~~sales ~~interest~~of ~~related to~~ debt securities ~~reversed~~during ~~against interest income for~~ the three and ~~six~~nine months ended ~~June~~September 30, 2025 and 2024.

~~The~~Debt ~~following~~securities ~~table~~with ~~summarizes~~a ~~available~~carrying ~~for~~amount ~~sale~~of ~~debt~~approximately ~~securities~~$28,884,000 inand an$25,818,000 ~~unrealized~~at ~~loss~~September 30, ~~position~~2025 ~~for~~and ~~which~~December 31, an2024, ~~allowance~~respectively, ~~for~~were ~~credit~~pledged ~~losses~~to ~~has~~secure ~~not~~public ~~been recorded~~deposits, ~~aggregated~~customer byrepurchase ~~investment~~agreements, ~~category~~ and ~~length~~for ofother ~~time~~purposes ~~that~~required ~~individual~~or ~~securities~~permitted ~~have~~by ~~been in a continuous loss position:~~law.

	Less than 12 Months				12 Months or More				Total
(Dollars in thousands)	FairValue		UnrealizedLosses		FairValue		UnrealizedLosses		FairValue		UnrealizedLosses
June 30, 2025
Available for sale securities:
Mortgage-backed securities, residential	$	31,297	$	(565)	$	28,296	$	(4,101)	$	59,593	$	(4,666)
Asset-backed securities	—		—		—		—		—		—
State and municipal	—		—		2,358		(79)		2,358		(79)
CLO securities	—		—		—		—		—		—
Corporate bonds	257		(9)		—		—		257		(9)
SBA pooled securities	—		—		814		(57)		814		(57)
	$	31,554	$	(574)	$	31,468	$	(4,237)	$	63,022	$	(4,811)

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Accrued interest on available for sale securities totaled $3,810,000 and $4,755,000 at September 30, 2025 and December 31, 2024, respectively, and was included in other assets on the Company's consolidated balance sheets. There was no accrued interest related to debt securities reversed against interest income for the three and nine months ended September 30, 2025 and 2024.

The following table summarizes available for sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position:


	Less than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2025
Available for sale securities:
Mortgage-backed securities, residential	$	12,247	$	(49)	$	44,373	$	(3,940)	$	56,620	$	(3,989)
Asset-backed securities	—		—		—		—		—		—
State and municipal	—		—		1,876		(52)		1,876		(52)
CLO securities	3,108		—		—		—		3,108		—
Corporate bonds	262		(4)		—		—		262		(4)
SBA pooled securities	—		—		805		(53)		805		(53)
	$	15,617	$	(53)	$	47,054	$	(4,045)	$	62,671	$	(4,098)


	Less than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2024
Available for sale securities:
Mortgage-backed securities, residential	$	32,124	$	(641)	$	35,340	$	(5,003)	$	67,464	$	(5,644)
Asset-backed securities	—		—		905		(2)		905		(2)
State and municipal	355		(5)		2,356		(86)		2,711		(91)
CLO Securities	—		—		—		—		—		—
Corporate bonds	262		(4)		—		—		262		(4)
SBA pooled securities	—		—		876		(81)		876		(81)
	$	32,741	$	(650)	$	39,477	$	(5,172)	$	72,218	$	(5,822)

Management evaluates available for sale debt securities in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors. Consideration is given to (1) the extent to which the fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At ~~June~~September 30, 2025, the Company had 7876 available for sale debt securities in an unrealized loss position without an allowance for credit losses. Management does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of ~~June~~September 30, 2025, management believes that the unrealized losses detailed in the previous table are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore the Company carried no allowance for credit losses on available for sale debt securities at ~~June~~September 30, 2025.

The following table presents the activity in the allowance for credit losses for held to maturity debt securities:

(Dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Held to Maturity CLO Securities	2025		2024		2025		2024
Allowance for credit losses:
Beginning balance	$	1,476	$	3,135	$	3,491	$	3,190
Credit loss expense	(97)		27		48		(28)
Charge-offs	—		—		(2,160)		—
Recoveries	20		—		20		—
Allowance for credit losses ending balance	$	1,399	$	3,162	$	1,399	$	3,162

The Company’s held to maturity securities are investments in the unrated subordinated notes of collateralized loan obligation funds. These securities are the junior-most in securitization capital structures, and are subject to suspension of distributions if the credit of the underlying loan portfolios deteriorates materially. The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type. At June 30, 2025 and December 31, 2024, the Company’s held to maturity securities consisted of investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call. During the three months ended March 31, 2025, the Company charged off one of it's three investments in these CLO funds as it was deemed to be an uncollectible investment. The charge-off was fully reserved in a prior period. At June 30, 2025 and December 31, 2024, $1,913,000 and $4,073,000, respectively, of the Company’s held to maturity securities were classified as nonaccrual.

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the activity in the allowance for credit losses for held to maturity debt securities:


(Dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Held to Maturity CLO Securities	2025		2024		2025		2024
Allowance for credit losses:
Beginning balance	$	1,399	$	3,162	$	3,491	$	3,190
Credit loss expense	—		221		48		193
Charge-offs	—		—		(2,160)		—
Recoveries	—		—		20		—
Allowance for credit losses ending balance	$	1,399	$	3,383	$	1,399	$	3,383

The Company’s held to maturity securities are investments in the unrated subordinated notes of collateralized loan obligation funds. These securities are the junior-most in securitization capital structures, and are subject to suspension of distributions if the credit of the underlying loan portfolios deteriorates materially. The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type. At September 30, 2025 and December 31, 2024, the Company’s held to maturity securities consisted of investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call. During the three months ended March 31, 2025, the Company charged off one of it's three investments in these CLO funds as it was deemed to be an uncollectible investment. The charge-off was fully reserved in a prior period. At September 30, 2025 and December 31, 2024, $1,913,000 and $4,073,000, respectively, of the Company’s held to maturity securities were classified as nonaccrual.

NOTE 4 — LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans Held for Sale

The following table presents loans held for sale:

(Dollars in thousands)	~~June~~September 30, 2025		December 31, 2024
Commercial real estate	$	36	$	—
1-4 family residential	$	8,214	$	1,167
Construction, land development, land	1,964		—
Commercial	1,527		5
1-4 family residential	1,595		1,167
Total loans held for sale	$	9,741	$	1,172
Commercial	2,471		5
Total loans held for sale	$	6,066	$	1,172

At June 30, 2025, construction, land development and land loans held for sale totaling $1,964,000 and commercial real estate loans held for sale totaling $36,000 were past due more than 90 days, on nonaccrual status, and risk rated as classified.17

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Loans Held for Investment

Loans

The following table presents the amortized cost and unpaid principal balance of loans held for investment:

	June 30, 2025						December 31, 2024
	September 30, 2025						December 31, 2024
(Dollars in thousands)	AmortizedCost		UnpaidPrincipal		Difference		AmortizedCost		UnpaidPrincipal		Difference
Commercial real estate	$	~~754~~769,~~509~~314	$	~~754,~~769,589	$	(~~260~~275)	$	777,689	$	777,980	$	(291)
Construction, land development, land	~~221~~204,~~419~~247		~~221~~204,~~719~~483		(~~300~~236)		203,804		204,268		(464)
1-4 family residential	~~172~~180,~~312~~970		~~171~~180,~~797~~211		~~515~~759		154,020		153,711		309
Farmland	4443,~~069~~208		4443,~~153~~278		(8470)		56,366		56,450		(84)
Commercial	1,~~132~~144,~~269~~872		1,~~144~~155,~~082~~281		(1110,~~813~~409)		1,119,245		1,120,551		(1,306)
Factored receivables	1,~~401~~424,~~377~~631		1,~~404~~428,~~906~~388		(3,~~529~~757)		1,204,510		1,208,486		(3,976)
Consumer	17,~~520~~235		17,~~538~~252		(1817)		8,000		8,005		(5)
Mortgage warehouse	1,~~209~~202,~~695~~445		1,~~209~~202,~~695~~445		—		1,023,326		1,023,326		—
Total loans held for investment	4,~~953~~986,~~170~~922		$	45,~~968~~000,~~659~~927	$	(1514,~~489~~005)	4,546,960		$	4,552,777	$	(5,817)
Allowance for credit losses	(3833,~~691~~549)						(40,714)
	$	4,~~914~~953,~~479~~373					$	4,506,246

The difference between the amortized cost and the unpaid principal is due to (1) premiums and discounts associated with acquired loans totaling $1210,~~122~~581,000 and $2,689,000 at ~~June~~September 30, 2025 and December 31, 2024, respectively, and (2) net deferred origination and factoring fees totaling $3,~~367~~424,000 and $3,128,000 at ~~June~~September 30, 2025 and December 31, 2024, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $4042,~~608~~827,000 and $36,838,000 at ~~June~~September 30, 2025 and December 31, 2024, respectively, and was included in other assets on the Company's consolidated balance sheets.

During the three months ended June 30, 2025, the Company acquired a $23,411,000 nonperforming commercial loan for $3,284,000. The loan was purchased credit deteriorated ("PCD") and a $10,780,000 ACL was established on Day 1 resulting in a discount of $9,348,000. Prior to June 30, 2025, the Company determined that the entire $10,780,000 ACL was uncollectible and charged off the entire amount. Such charge-off had no impact on credit loss expense.

As of ~~June~~September 30, 2025, most of the Company’s non-factoring business activity is with customers located within certain states. The states of Texas (2119%), Colorado (11%), Illinois (1011%), and Iowa (4%) make up 4645% of the Company’s gross loans, excluding factored receivables. Therefore, the Company’s exposure to credit risk is affected by changes in the economies in these states. At December 31, 2024, the states of Texas (22%), Illinois (12%), Colorado (10%), and Iowa (4%) made up 48% of the Company’s gross loans, excluding factored receivables.

17A majority (96%) of the Company's factored receivables, representing approximately 28% of the Company's total loan portfolio as of September 30, 2025, are transportation receivables. At December 31, 2024, 97% of the Company's factored receivables, representing approximately 26% of the Company's total loan portfolio, were transportation receivables.

At September 30, 2025 and December 31, 2024, the Company had $290,479,000 and $267,891,000, respectively, of customer reserves associated with factored receivables. These amounts represent customer reserves held to settle any payment disputes or collection shortfalls, may be used to pay customers’ obligations to various third parties as directed by the customer, are periodically released to or withdrawn by customers, and are reported as deposits in the consolidated balance sheets.

As of December 31, 2024, the Company carried a separate receivable (the “Misdirected Payments Receivable”) payable by the United States Postal Service (“USPS”) arising from accounts factored to a large carrier. The balance of such Misdirected Payments Receivable, net of customer reserves, was $0 and $19,361,000 at September 30, 2025 and December 31, 2024, respectively and is reflected in factored receivables. Refer to Note 1 for further discussion.

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

ALoans ~~majority~~with ~~(97%) of~~carrying ~~the~~amounts ~~Company's~~of ~~factored receivables~~$1,859,817,000 ~~representing~~and ~~approximately~~$1,744,145,000 ~~27%~~at ~~of the Company's total loan portfolio as of June~~September 30, 2025, ~~are~~and ~~transportation receivables. At~~ December 31, 2024, ~~97%~~respectively, ofwere ~~the~~pledged ~~Company's~~to ~~factored~~secure ~~receivables,~~Federal ~~representing~~Home ~~approximately~~Loan ~~26%~~Bank ofborrowing ~~the~~capacity ~~Company's~~and ~~total~~Federal ~~loan~~Reserve ~~portfolio,~~Bank ~~were~~discount ~~transportation~~window ~~receivables~~borrowing capacity.

At June 30, 2025 and December 31, 2024, the Company had $258,514,000 and $267,891,000, respectively, of customer reserves associated with factored receivables. These amounts represent customer reserves held to settle any payment disputes or collection shortfalls, may be used to pay customers’ obligations to various third parties as directed by the customer, are periodically released to or withdrawn by customers, and are reported as deposits in the consolidated balance sheets.

As of June 30, 2025 the Company carried a separate receivable (the “Misdirected Payments Receivable”) payable by the United States Postal Service (“USPS”) arising from accounts factored to a large carrier. The balance of such Misdirected Payments Receivable, net of customer reserves, was $19,361,000 at June 30, 2025 and is reflected in factored receivables. As supported by the USPS Settlement, we have not reserved for such balance as of June 30, 2025. Refer to Note 1 for further discussion.

Loans with carrying amounts of $1,805,520,000 and $1,744,145,000 at June 30, 2025 and December 31, 2024, respectively, were pledged to secure Federal Home Loan Bank borrowing capacity and Federal Reserve Bank discount window borrowing capacity.

Allowance for Credit Losses

The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications. The activity in the allowance for credit losses (“ACL”) related to loans held for investment is as follows:

(Dollars in thousands)	BeginningBalance		Credit LossExpense		Charge-offs		Recoveries		Initial ACL on Loans Purchased with Credit Deterioration		EndingBalance
Three Months Ended June 30, 2025
Three Months Ended September 30, 2025
Commercial real estate	$	4,~~657~~198	$	~~(518)~~306	$	(536)	$	644	$	—	$	4,~~198~~472
Construction, land development, land	2,~~639~~589		~~199~~(415)		~~(250)~~—		146		—		2,~~589~~220
1-4 family residential	1,~~446~~560		~~158~~243		(4558)		123		—		1,~~560~~768
Farmland	~~326~~302		(247)		—		—		—		~~302~~295
Commercial	1617,~~191~~813		1,~~693~~724		(115,~~132~~424)		~~281~~18		~~10,780~~—		1714,~~813~~131
Factored receivables	910,~~851~~553		(2,~~638)~~310		(~~665~~4,014)		~~4,005~~183		—		109,~~553~~032
Consumer	~~155~~466		~~368~~114		(91158)		3425		—		~~466~~447
Mortgage warehouse	~~964~~1,210		~~246~~(26)		—		—		—		1,~~210~~184
	$	3638,~~229~~691	$	~~(516)~~4,249	$	(129,~~188~~690)	$	~~4,386~~299	$	~~10,780~~—	$	3833,~~691~~549
(Dollars in thousands)	BeginningBalance		Credit LossExpense		Charge-offs		Recoveries		Initial ACL on Loans Purchased with Credit Deterioration		EndingBalance
Three Months Ended June 30, 2024
Three Months Ended September 30, 2024
Commercial real estate	$	5,~~666~~438	$	(~~228~~206)	$	—(831)	$	—	$	—	$	54,~~438~~401
Construction, land development, land	2,~~666~~596		~~(71)~~333		—		1—		—		2,~~596~~929
1-4 family residential	~~979~~972		615		(1418)		1		—		~~972~~970
Farmland	~~407~~395		(121)		—		—		—		~~395~~394
Commercial	1617,~~560~~372		24,~~018~~489		(1,~~237~~913)		3118		—		1719,~~372~~966
Factored receivables	11,~~192~~928		~~2,166~~323		(~~1,774~~951)		~~344~~270		—		11,~~928~~570
Consumer	~~135~~156		9688		(77114)		216		—		~~156~~146
Mortgage warehouse	~~641~~734		93133		—		—		—		~~734~~867
	$	3839,~~246~~591	$	45,~~068~~174	$	(3,~~102~~827)	$	~~379~~305	$	—	$	3941,~~591~~243

1819

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)	BeginningBalance		Credit LossExpense		Charge-offs		Recoveries		Initial ACL on Loans Purchased with Credit Deterioration		EndingBalance
Six Months Ended June 30, 2025
Nine Months Ended September 30, 2025
Commercial real estate	$	3,825	$	~~427~~733	$	(~~121~~157)	$	6771	$	—	$	4,~~198~~472
Construction, land development, land	2,873		(35450)		(250)		147		—		2,~~589~~220
1-4 family residential	1,404		~~199~~442		(46104)		326		—		1,~~560~~768
Farmland	386		(8491)		—		—		—		~~302~~295
Commercial	21,419		~~762~~2,486		(1520,~~503~~927)		~~355~~373		10,780		1714,~~813~~131
Factored receivables	9,600		(1,~~129)~~181		(26,~~073~~087)		4,~~155~~338		—		109,~~553~~032
Consumer	185		~~470~~584		(~~270~~428)		81106		—		~~466~~447
Mortgage warehouse	1,022		~~188~~162		—		—		—		1,~~210~~184
	$	40,714	$	~~798~~5,047	$	(1827,~~263~~953)	$	4,~~662~~961	$	10,780	$	3833,~~691~~549
(Dollars in thousands)	BeginningBalance		Credit LossExpense		Charge-offs		Recoveries		Initial ACL on Loans Purchased with Credit Deterioration		EndingBalance
Six Months Ended June 30, 2024
Nine Months Ended September 30, 2024
Commercial real estate	$	6,030	$	(~~592~~798)	$	—(831)	$	—	$	—	$	54,~~438~~401
Construction, land development, land	965		1,~~630~~963		—		1		—		2,~~596~~929
1-4 family residential	927		5671		(1432)		34		—		~~972~~970
Farmland	442		(4748)		—		—		—		~~395~~394
Commercial	14,060		59,~~069~~558		(13,~~821~~734)		6482		—		1719,~~372~~966
Factored receivables	11,896		23,~~722~~045		(34,~~332~~283)		~~642~~912		—		11,~~928~~570
Consumer	171		~~133~~221		(~~194~~308)		4662		—		~~156~~146
Mortgage warehouse	728		6139		—		—		—		~~734~~867
	$	35,219	$	814,~~977~~151	$	(59,~~361~~188)	$	~~756~~1,061	$	—	$	3941,~~591~~243

The ~~increase~~decrease in required ACL during the three months ended ~~June~~September 30, 2025 is a function of net charge-offs of $79,~~802~~391,000 and credit loss ~~benefit~~expense of $~~516~~4,249,000.

The decrease in required ACL during the ~~six~~nine months ended ~~June~~September 30, 2025 is a function of net charge-offs of $1322,~~601~~992,000 and credit loss expense of $~~798~~5,047,000. Included in charge-offs for the nine months ended September 30, 2025 was the $10,780,000 day-one purchased credit deteriorated ACL that was deemed uncollectible and charged off with no impact to credit loss expense.

The Company uses the discounted cash flow (DCF) method to estimate ACL for the commercial real estate, construction, land development, land, 1-4 family residential, commercial (excluding liquid credit), and consumer loan pools. For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment as a loss driver. The Company also utilizes and forecasts either one-year percentage change in national retail sales (commercial real estate – non multifamily, commercial general, commercial agriculture, commercial asset-based lending, commercial equipment finance, consumer), one-year percentage change in the national home price index (1-4 family residential and construction, land development, land), or one-year percentage change in national gross domestic product (commercial real estate – multifamily) as a second loss driver depending on the nature of the underlying loan pool and how well that loss driver correlates to expected future losses. Consistent forecasts of the loss drivers are used across the loan segments. The Company also forecasts prepayments speeds for use in the DCF models with higher prepayment speeds resulting in lower required ACL levels and vice versa for shorter prepayment speeds. These assumed prepayment speeds are based upon our historical prepayment speeds by loan type adjusted for the expected impact of the future interest rate environment. The impact of these assumed prepayment speeds is lesser in magnitude than the aforementioned loss driver assumptions.

1920

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For all DCF models at ~~June~~September 30, 2025, the Company has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. The Company leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by the Company when developing the forecast metrics. At ~~June~~September 30, 2025 as compared to December 31, 2024, the Company forecasted a modest increase in national unemployment and modest degradation in one-year percentage change in national retail sales, one-year percentage change in national home price index, and one-year percentage change in national gross domestic product. At ~~June~~September 30, 2025 for national unemployment, the Company projected a low percentage in the first quarter followed by a gradual rise in the following three quarters. For percentage change in national retail sales, the Company projected a small ~~increase~~increases in the first two projected ~~quarter~~quarters followed by a decline to negative levels over the last ~~three~~two projected quarters to a level below recent actual periods. For percentage change in national home price index, the Company projected ana ~~increase~~breakeven level in the first projected quarter followed by a steep drop to negative levels for the remaining three quarters with such negative levels peaking in the fourth projected quarter. For percentage change in national gross domestic product, management projected ~~negative~~very low growth for ~~each~~the first two projected ~~quarter~~quarters with ~~the~~low ~~exception~~levels of ~~slightly~~contraction ~~positive~~for ~~growth in~~ the ~~first~~final two projected ~~quarter~~quarters. At ~~June~~ September 30, 2025, the Company used its historical prepayment speeds with minimal adjustment.

The Company uses a loss-rate method to estimate expected credit losses for the farmland, liquid credit, factored receivable, and mortgage warehouse loan pools. For each of these loan segments, the Company applies an expected loss ratio based on internal and peer historical losses adjusted as appropriate for qualitative factors. Qualitative loss factors are based on the Company's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions. Loss factors used to calculate the required ACL on pools that use the loss-rate method reflect the forecasted economic conditions described above.

For the three months ended ~~June~~September 30, 2025, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period ~~decreased~~increased the required ACL by $~~207~~156,000. Changes in loan volume and mix increased the required ACL by $1243,~~185,~~000. Changes in required specific reserves ~~increased~~decreased the ACL by $15,~~484~~542,000. Net charge-offs during the period were $79,~~802~~391,000.

For the three months ended ~~June~~September 30, 2024, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period increased the required ACL by $1531,~~104,~~000. Changes in loan volume and mix ~~increased~~decreased the required ACL by $~~245~~1,068,000. Changes in required specific reserves ~~did~~increased ~~not have a significant impact on~~ the ~~required~~ ACL by $2,189,000. Net charge-offs during the period were $23,~~723~~522,000.

For the ~~six~~nine months ended ~~June~~September 30, 2025, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period increased the required ACL by $~~286~~442,000. Changes in loan volume and mix increased the required ACL by $12,~~787~~029,000. Decreases in required specific reserves decreased the required ACL by $49,~~095~~637,000. Net charge-offs during the period were $1322,~~601~~992,000.

For the ~~six~~nine months ended ~~June~~September 30, 2024, changes in projected loss drivers and prepayment assumptions over the reasonable and supportable forecast period increased the required ACL by $2,~~008~~539,000. Changes inon loan volume and mix ~~increased~~had ~~the~~an ~~required~~insignificant ~~ACL~~impact byon ~~$1,010,000~~the ACL. Increases in required specific reserves increased the required ACL by $13,~~354~~543,000. Net charge-offs during the period were $48,~~605~~127,000.

2021

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:

(Dollars in thousands)	Real Estate		AccountsReceivable		Equipment		Other		Total		ACLAllocation
June 30, 2025
September 30, 2025
Commercial real estate	$	2425,~~370~~236	$	—	$	—	$	—	$	2425,~~370~~236	$	—
Construction, land development, land	—		—		—		—		—		—
1-4 family residential	~~838~~1,038		—		—		—		~~838~~1,038		—
Farmland	1,~~247~~418		—		6459		53166		1,~~364~~643		—
Commercial	46281		—		3044,~~335~~664		1411,~~026~~499		4456,~~407~~444		51,~~173~~338
Factored receivables	—		94,~~010~~447		—		—		94,~~010~~447		31,~~495~~788
Consumer	—		—		—		2318		2318		—
Mortgage warehouse	—		—		—		—		—		—
Total	$	2627,~~501~~973	$	94,~~010~~447	$	3044,~~399~~723	$	1411,~~102~~683	$	8088,~~012~~826	$	83,~~668~~126

Commercial loans secured by Other collateral primarily consist of large liquid credit loans secured by the underlying enterprise values of the borrowers.


(Dollars in thousands)	Real Estate		Accounts Receivable		Equipment		Other		Total		ACL Allocation
December 31, 2024
Commercial real estate	$	30,042	$	—	$	—	$	4,211	$	34,253	$	28
Construction, land development, land	2,410		—		—		—		2,410		—
1-4 family residential	810		—		—		—		810		47
Farmland	1,870		—		73		53		1,996		—
Commercial	2,196		—		52,364		18,819		73,379		9,294
Factored receivables	—		32,773		—		—		32,773		3,993
Consumer	—		—		—		116		116		—
Mortgage warehouse	—		—		—		—		—		—
Total	$	37,328	$	32,773	$	52,437	$	23,199	$	145,737	$	13,362

Past Due and Nonaccrual Loans

The following tables present an aging of contractually past due loans:

(Dollars in thousands)

Past Due30-59 Days

Past Due60-90 Days

Past Due 90Days or More

TotalPast Due

Current

Total

Past Due 90Days or Moreand Accruing

June 30, 2025

September 30, 2025

Commercial real estate

—51

~~992~~140

56,885

67,~~877~~076

~~747~~762,~~632~~238

~~754~~769,~~509~~314

—

Construction, land development, land

—

~~221~~204,~~419~~247

—

1-4 family residential

~~772~~532

96362

~~613~~280

1,~~481~~174

~~170~~179,~~831~~796

~~172~~180,~~312~~970

~~247~~—

Farmland

~~586~~—

—234

~~287~~458

~~873~~692

4342,~~196~~516

4443,~~069~~208

—

Commercial

727,~~513~~361

1214,~~175~~994

2718,~~496~~385

4760,~~184~~740

1,~~085~~084,~~085~~132

1,~~132~~144,~~269~~872

—

Factored receivables

2220,~~912~~566

53,~~330~~781

221,~~830~~300

5125,~~072~~647

1,~~350~~398,~~305~~984

1,~~401~~424,~~377~~631

221,~~830~~300

Consumer

3017

6037

—

9054

17,~~430~~181

17,~~520~~235

—

Mortgage warehouse

—

1,~~209~~202,~~695~~445

—

Total

3148,~~813~~527

1819,~~653~~548

5727,~~111~~308

~~107~~95,~~577~~383

4,~~845~~891,~~593~~539

4,~~953~~986,~~170~~922

231,~~077~~300

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


(Dollars in thousands)	Past Due 30-59 Days		Past Due 60-90 Days		Past Due 90 Days or More		Total Past Due		Current		Total		Past Due 90 Days or More and Accruing
December 31, 2024
Commercial real estate	$	840	$	3,404	$	10,363	$	14,607	$	763,082	$	777,689	$	—
Construction, land development, land	—		2,410		—		2,410		201,394		203,804		—
1-4 family residential	1,188		631		229		2,048		151,972		154,020		—
Farmland	601		140		150		891		55,475		56,366		—
Commercial	7,525		16,150		51,437		75,112		1,044,133		1,119,245		—
Factored receivables	24,828		4,193		24,718		53,739		1,150,771		1,204,510		24,718
Consumer	33		11		—		44		7,956		8,000		—
Mortgage warehouse	—		—		—		—		1,023,326		1,023,326		—
Total	$	35,015	$	26,939	$	86,897	$	148,851	$	4,398,109	$	4,546,960	$	24,718

At ~~June 30, 2025 and~~ December 31, 2024, the Misdirected Payments Receivable, net of customer reserves, totaled $19,361,000, all of which was considered past due 90 days or more. Given the nature of factored receivables, these assets are disclosed as past due 90 days or more still accruing; however, the Company is not recognizing income on the assets. Historically, any income recognized on factored receivables that are past due 90 days or more has not been material.

The following table presents the amortized cost basis of loans on nonaccrual status and the amortized cost basis of loans on nonaccrual status for which there was no related allowance for credit losses:

	June 30, 2025				December 31, 2024
	September 30, 2025				December 31, 2024
(Dollars in thousands)	Total Nonaccrual		NonaccrualWith No ACL		Total Nonaccrual		NonaccrualWith No ACL
Commercial real estate	$	8,~~279~~382	$	8,~~279~~382	$	11,254	$	10,481
Construction, land development, land	—		—		2,410		2,410
1-4 family residential	~~808~~1,011		~~808~~1,011		810		763
Farmland	~~452~~732		~~452~~732		1,996		1,996
Commercial	4556,~~054~~454		2548,~~392~~241		73,437		45,405
Factored receivables	—		—		—		—
Consumer	2318		2318		116		116
Mortgage warehouse	—		—		—		—
	$	5466,~~616~~597	$	3458,~~954~~384	$	90,023	$	61,171

The following table presents accrued interest on nonaccrual loans reversed through interest income:

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Commercial real estate	$	62—	$	—	$	76	$	—
Construction, land development, land	—		—		—		2
1-4 family residential	2—		—4		2		15
Farmland	—11		13—		—11		13
Commercial	—14		56		317		~~188~~194
Factored receivables	—		—		—		—
Consumer	—		—		—		—
Mortgage warehouse	—		—		—		—
	$	6425	$	1810	$	81106	$	~~204~~214

There was no interest earned on nonaccrual loans during the three and ~~six~~nine months ended ~~June~~September 30, 2025 and 2024.

2223

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents information regarding nonperforming loans:

(Dollars in thousands)	~~June~~September 30, 2025		December 31, 2024
Nonaccrual loans	$	5466,~~616~~597	$	90,023
Nonperforming factored receivables	21,~~893~~140		23,289
	$	5767,~~509~~737	$	113,312

Credit Quality Information

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including: current collateral and financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk on a regular basis. Large groups of smaller balance homogeneous loans, such as consumer loans, are analyzed primarily based on payment status. The Company uses the following definitions for risk ratings:

Pass – Pass rated loans have low to average risk and are not otherwise classified.

Classified – Classified loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Certain classified loans have the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. As of ~~June~~September 30, 2025 and December 31, 2024, based on the most recent analysis performed, the risk category of loans is as follows:

2324

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

													RevolvingLoans		RevolvingLoansConvertedTo TermLoans		Total
(Dollars in thousands)	Year of Origination
June 30, 2025	2025		2024		2023		2022		2021		Prior
September 30, 2025	2025		2024		2023		2022		2021		Prior
Commercial real estate
Pass	$	93149,~~468~~741	$	~~193~~197,~~643~~152	$	7877,~~868~~733	$	3938,~~695~~585	$	7569,~~492~~638	$	~~106~~102,~~558~~365	$	5620,~~072~~596	$	~~238~~850	$	~~644~~656,~~034~~660
Classified	—		—		84,~~385~~063		~~315~~2,717		1,~~391~~344		23,~~674~~834		~~710~~696		—		~~110~~112,~~475~~654
Total commercial real estate	$	93149,~~468~~741	$	~~193~~197,~~643~~152	$	~~163~~161,~~253~~796	$	4041,~~010~~302	$	7670,~~883~~982	$	~~130~~126,~~232~~199	$	5621,~~782~~292	$	~~238~~850	$	~~754~~769,~~509~~314
YTD gross charge-offs	$	—	$	—	$	116	$	—	$	—	$	541	$	—	$	—	$	~~121~~157
Construction, land development, land
Pass	$	65,~~286~~265	$	~~126~~98,~~546~~230	$	8698,~~564~~743	$	~~808~~854	$	~~822~~787	$	~~393~~368	$	—	$	—	$	~~221~~204,~~419~~247
Classified	—		—		—		—		—		—		—		—		—
Total construction, land development, land	$	65,~~286~~265	$	~~126~~98,~~546~~230	$	8698,~~564~~743	$	~~808~~854	$	~~822~~787	$	~~393~~368	$	—	$	—	$	~~221~~204,~~419~~247
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	250	$	—	$	—	$	250
1-4 family residential
Pass	$	2838,~~939~~798	$	4342,~~858~~878	$	17,~~404~~358	$	1211,~~170~~863	$	14,~~645~~262	$	20,~~948~~124	$	2930,~~245~~437	$	1,~~266~~774	$	~~168~~177,~~475~~494
Classified	—		—		~~1,396~~904		—82		1,~~123~~121		1,~~123~~317		~~195~~52		—		3,~~837~~476
Total 1-4 family residential	$	2838,~~939~~798	$	4342,~~858~~878	$	18,~~800~~262	$	1211,~~170~~945	$	15,~~768~~383	$	2221,~~071~~441	$	2930,~~440~~489	$	1,~~266~~774	$	~~172~~180,~~312~~970
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	46104	$	—	$	—	$	46104
Farmland
Pass	$	34,~~358~~866	$	119,~~609~~889	$	4,~~165~~092	$	4,~~744~~193	$	43,~~214~~809	$	13,~~505~~557	$	1,~~402~~307	$	379	$	4342,~~376~~092
Classified	—		—		—		—		—		~~693~~1,116		—		—		~~693~~1,116
Total farmland	$	34,~~358~~866	$	119,~~609~~889	$	4,~~165~~092	$	4,~~744~~193	$	43,~~214~~809	$	14,~~198~~673	$	1,~~402~~307	$	379	$	4443,~~069~~208
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial
Pass	$	~~173~~266,~~275~~398	$	~~268~~244,~~247~~635	$	~~109~~94,~~632~~180	$	5240,~~116~~682	$	1210,~~991~~495	$	1415,~~531~~399	$	~~453~~413,~~651~~271	$	~~300~~1,381	$	1,~~084~~086,~~743~~441
Classified	32,~~346~~071		75,~~319~~164		2015,~~095~~012		129,~~591~~553		1,~~317~~173		21,~~102~~263		~~756~~24,195		—		4758,~~526~~431
Total commercial	$	~~176~~268,~~621~~469	$	~~275~~249,~~566~~799	$	~~129~~109,~~727~~192	$	6450,~~707~~235	$	1411,~~308~~668	$	16,~~633~~662	$	~~454~~437,~~407~~466	$	~~300~~1,381	$	1,~~132~~144,~~269~~872
YTD gross charge-offs	$	—	$	~~834~~3,865	$	34,~~699~~834	$	611,177	$	~~129~~271	$	10,780	$	—	$	—	$	1520,~~503~~927
Factored receivables
Pass	$	1,~~372~~420,~~207~~195	$	—	$	—	$	—	$	—	$	~~19,936~~160	$	—	$	—	$	1,~~392~~420,~~143~~355
Classified	94,~~234~~276		—		—		—		—		—		—		—		94,~~234~~276
Total factored receivables	$	1,~~381~~424,~~441~~471	$	—	$	—	$	—	$	—	$	~~19,936~~160	$	—	$	—	$	1,~~401~~424,~~377~~631
YTD gross charge-offs	$	~~665~~4,679	$	1,408	$	—	$	—	$	—	$	—	$	—	$	—	$	26,~~073~~087
Consumer
Pass	$	109,~~390~~148	$	1,~~768~~469	$	~~1,156~~962	$	~~369~~288	$	~~231~~218	$	~~606~~481	$	24,~~977~~651	$	—	$	17,~~497~~217
Classified	—		—		—		—		—		2318		—		—		2318
Total consumer	$	109,~~390~~148	$	1,~~768~~469	$	~~1,156~~962	$	~~369~~288	$	~~231~~218	$	~~629~~499	$	24,~~977~~651	$	—	$	17,~~520~~235
YTD gross charge-offs	$	~~218~~356	$	4058	$	7	$	5	$	—	$	—2	$	—	$	—	$	~~270~~428
Mortgage warehouse
Pass	$	1,~~209~~202,~~695~~445	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,~~209~~202,~~695~~445
Classified	—		—		—		—		—		—		—		—		—
Total mortgage warehouse	$	1,~~209~~202,~~695~~445	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,~~209~~202,~~695~~445
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total loans
Pass	$	23,~~897~~096,~~618~~856	$	~~645~~594,~~671~~253	$	~~297~~293,~~789~~068	$	~~109~~96,~~902~~465	$	~~108~~99,~~395~~209	$	~~176~~152,~~477~~454	$	~~543~~470,~~347~~262	$	24,~~183~~384	$	4,~~781~~806,~~382~~951
Classified	126,~~580~~347		75,~~319~~164		~~105~~99,~~876~~979		12,~~906~~352		3,~~831~~638		27,~~615~~548		124,~~661~~943		—		~~171~~179,~~788~~971
Total loans	$	23,~~910~~103,~~198~~203	$	~~652~~599,~~990~~417	$	~~403~~393,~~665~~047	$	~~122~~108,~~808~~817	$	~~112~~102,~~226~~847	$	~~204~~180,~~092~~002	$	~~545~~495,~~008~~205	$	24,~~183~~384	$	4,~~953~~986,~~170~~922
YTD gross charge-offs	$	~~883~~5,035	$	25,~~282~~331	$	34,~~822~~957	$	661,182	$	~~129~~271	$	11,~~081~~177	$	—	$	—	$	1827,~~263~~953

2425

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


													Revolving Loans		Revolving Loans Converted To Term Loans		Total
(Dollars in thousands)	Year of Origination
December 31, 2024	2024		2023		2022		2021		2020		Prior
Commercial real estate
Pass	$	212,265	$	77,836	$	48,149	$	79,860	$	90,460	$	28,579	$	87,634	$	125	$	624,908
Classified	6,283		116,794		—		9,591		659		19,454		—		—		152,781
Total commercial real estate	$	218,548	$	194,630	$	48,149	$	89,451	$	91,119	$	48,033	$	87,634	$	125	$	777,689
YTD gross charge-offs	$	—	$	—	$	352	$	425	$	54	$	—	$	—	$	—	$	831

Construction, land development, land
Pass	$	126,504	$	67,977	$	850	$	950	$	257	$	178	$	4,678	$	—	$	201,394
Classified	—		—		—		—		—		2,410		—		—		2,410
Total construction, land development, land	$	126,504	$	67,977	$	850	$	950	$	257	$	2,588	$	4,678	$	—	$	203,804
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

1-4 family residential
Pass	$	45,087	$	19,836	$	13,458	$	17,192	$	6,326	$	18,287	$	32,144	$	302	$	152,632
Classified	113		626		100		204		—		254		91		—		1,388
Total 1-4 family residential	$	45,200	$	20,462	$	13,558	$	17,396	$	6,326	$	18,541	$	32,235	$	302	$	154,020
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	72	$	—	$	—	$	72

Farmland
Pass	$	14,914	$	6,077	$	8,726	$	4,334	$	6,472	$	12,866	$	898	$	73	$	54,360
Classified	68		53		1,503		—		11		371		—		—		2,006
Total farmland	$	14,982	$	6,130	$	10,229	$	4,334	$	6,483	$	13,237	$	898	$	73	$	56,366
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial
Pass	$	325,712	$	125,419	$	81,599	$	28,177	$	8,249	$	8,686	$	442,362	$	221	$	1,020,425
Classified	6,659		56,378		12,365		6,275		6,680		3		10,460		—		98,820
Total commercial	$	332,371	$	181,797	$	93,964	$	34,452	$	14,929	$	8,689	$	452,822	$	221	$	1,119,245
YTD gross charge-offs	$	934	$	1,540	$	2,209	$	452	$	579	$	153	$	351	$	—	$	6,218

Factored receivables
Pass	$	1,170,308	$	—	$	—	$	—	$	1,429	$	—	$	—	$	—	$	1,171,737
Classified	13,412		—		—		—		19,361		—		—		—		32,773
Total factored receivables	$	1,183,720	$	—	$	—	$	—	$	20,790	$	—	$	—	$	—	$	1,204,510
YTD gross charge-offs	$	5,628	$	1,558	$	—	$	—	$	—	$	—	$	—	$	—	$	7,186

Consumer
Pass	$	4,242	$	1,710	$	587	$	312	$	203	$	720	$	110	$	—	$	7,884
Classified	16		—		3		63		—		34		—		—		116
Total consumer	$	4,258	$	1,710	$	590	$	375	$	203	$	754	$	110	$	—	$	8,000
YTD gross charge-offs	$	—	$	457	$	20	$	5	$	—	$	1	$	—	$	—	$	483

Mortgage warehouse
Pass	$	1,023,326	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,023,326
Classified	—		—		—		—		—		—		—		—		—
Total mortgage warehouse	$	1,023,326	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,023,326
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total loans
Pass	$	2,922,358	$	298,855	$	153,369	$	130,825	$	113,396	$	69,316	$	567,826	$	721	$	4,256,666
Classified	26,551		173,851		13,971		16,133		26,711		22,526		10,551		—		290,294
Total loans	$	2,948,909	$	472,706	$	167,340	$	146,958	$	140,107	$	91,842	$	578,377	$	721	$	4,546,960
YTD gross charge-offs	$	6,562	$	3,555	$	2,581	$	882	$	633	$	226	$	351	$	—	$	14,790

2526

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Loan Modifications to Borrowers Experiencing Financial Difficulty

In an effort to mitigate potential losses on loans, the Company will endeavor to work with borrowers experiencing financial difficulty to modify the terms of such loans to improve the likelihood of principal repayment. Such modifications generally fall into four broad categories; principal forgiveness, interest rate reduction, other-than-insignificant payment delay, or a term extension. Modifications can reflect one or multiple modification categories. For all loan types, including commercial real estate loans, the Company considers the likelihood of repayment by the borrower experiencing financial difficulty under the potential agreed upon modified terms. If such repayment is not deemed likely, the Company will not grant the troubled borrower a modification and will commence ultimate collection proceedings. On an ongoing basis, the Company monitors the performance of modified loans related to their restructured terms.

The following tables present the amortized cost basis of loan modifications to borrowers experiencing financial difficulty made during the reporting period:

	Term Extension
					Financial Effect
(Dollars in thousands)	Amortized Cost		% of Portfolio		Term Extended By
Three Months Ended June 30, 2025
Three Months Ended September 30, 2025
Commercial real estate	$	134,268	17.8	%	0.3 years
Commercial	$	3,550	0.3	%	0.3 years
Commercial	2,087		0.2	%	1.3 years
	$	3,550	0.1	%
	$	136,355	2.8	%
Three Months Ended September 30, 2024
Three Months Ended June 30, 2024
Commercial real estate	$	194	—	%	0.3 years
Commercial real estate	$	194	—	%	0.5 years
Commercial	17		—	%	1.0 years
Consumer	18		0.2	%	6.1 years
	$	211	—	%
	$	212	—	%
Nine Months Ended September 30, 2025
Six Months Ended June 30, 2025
Commercial real estate	$	99,551	12.9	%	0.6 years
Commercial real estate	$	134,268	17.8	%	0.5 years
1-4 family residential	12		—	%	5.4 years
1-4 family residential	15		—	%	5.0 years
Commercial	5,490		0.5	%	0.7 years
Commercial	2,087		0.2	%	1.3 years
	$	105,053	2.1	%
	$	136,370	2.8	%
Nine Months Ended September 30, 2024
Six Months Ended June 30, 2024
Commercial real estate	$	194	—	%	0.8 years
Commercial real estate	$	194	—	%	0.5 years
Commercial	17		—	%	1.0 years
Consumer	18		0.23	%	6.1 years
	$	~~212~~229	—	%

	Term Extension and Payment Delay
					Financial Effect
(Dollars in thousands)	Amortized Cost		% of Portfolio		Term Extended By	Payments Delayed By
Three Months Ended June 30, 2025
Commercial	$	302	—	%	0.5 years	0.5 years
	$	302	—	%
Six Months Ended June 30, 2025
Commercial	$	302	—	%	0.8 years	0.8 years
	$	302	—	%

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Term Extension and Rate Reduction
	Term Extension and Payment Delay
			Year Ended	Year Ended		Financial Effect
						Financial Effect
							Interest Rate Reduced
(Dollars in thousands)	Amortized Cost			% of Portfolio		Term Extended By	Payments Delayed By
(Dollars in thousands)	Amortized Cost			% of Portfolio		Term Extended By	From	To
Three Months Ended September 30, 2025
Three Months Ended June 30, 2024
Commercial real estate	16,091			2.1	%	0.2 years	0.2 years
Commercial real estate	$	143		—	%	1.0 year	12.5%	10.0%
	$	16,091		0.3	%
	$	143		—	%
Three Months Ended September 30, 2024
Six Months Ended June 30, 2024
Commercial	513			—	%	0.7 years	0.7 years
Commercial real estate	$	143		—	%	1.0 year	12.5%	10.0%
	$	513		—	%
	$	143		—	%
Nine Months Ended September 30, 2025
Commercial real estate	$	16,091		2.1	%	0.6 years	0.6 years
	$	16,091		0.3	%
Nine Months Ended September 30, 2024
Commercial	513			—	%	0.7 years	0.7 years
	$	513		—	%

	Term Extension and Principal Forgiveness
	Term Extension and Rate Reduction
					Financial Effect
(Dollars in thousands)	Amortized Cost		% of Portfolio		Term Extended By	Principal Forgiven
						Interest Rate Reduced
Three Months Ended June 30, 2024
(Dollars in thousands)	Amortized Cost		% of Portfolio		Term Extended By	From		To
Commercial	$	4,128	0.4	%	1.8 years	$	507
Nine Months Ended September 30, 2024
	$	4,128	0.1	%
Commercial real estate	$	141	—	%	1.0 years	12.5%		10.0%
Six Months Ended June 30, 2024
	$	141	—	%
Commercial	$	4,128	0.4	%	1.8 years	$	507
	$	4,128	0.1	%

Payment Delay

Term Extension and Principal Forgiveness

Financial Effect

(Dollars in thousands)

Amortized Cost

% of Portfolio

~~Payments~~Term ~~Delayed~~Extended By

Principal Forgiven

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2024

Commercial

~~528~~4,128

—0.4

01.58 years

507

~~528~~4,128

—0.1


	Payment Delay
					Financial Effect
(Dollars in thousands)	Amortized Cost		% of Portfolio		Payments Delayed By






















Nine Months Ended September 30, 2025




Commercial	$	523	—	%	0.5 years



	$	523	—	%

Generally, if a loan to a borrower experiencing financial difficulty is modified, the Company will seek to obtain credit enhancements when possible.

~~The following table presents the payment status of loans that have been modified in the last twelve months:~~28

	June 30, 2025
(Dollars in thousands)	Current		Past Due 30-89 Days		Past Due 90 Days or More		Total
Commercial real estate	$	136,556	$	—	$	—	$	136,556
Construction, land development, land	—		—		—		—
1-4 family residential	15		—		—		15
Farmland	—		—		—		—
Commercial	9,254		171		—		9,425
Factored receivables	—		—		—		—
Consumer	—		—		—		—
Mortgage warehouse	—		—		—		—
	$	145,825	$	171	$	—	$	145,996

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

AtThe ~~June 30,~~following ~~2025,~~table presents the ~~Company~~payment ~~had~~status ~~$221,000~~ of ~~commitments~~loans tothat ~~lend~~have ~~additional~~been ~~funds to borrowers experiencing financial difficulty for which the Company~~ modified ~~the terms of the loans~~ in the ~~form~~last oftwelve ~~principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.~~months:

There were no loans to borrowers experiencing financial difficulty that had a payment default during the three and six months ended June 30, 2025 and 2024 and were modified in the twelve months prior to that default. Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance for credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the allowance for credit losses is adjusted accordingly.


	September 30, 2025
(Dollars in thousands)	Current		Past Due 30-89 Days		Past Due 90 Days or More		Total
Commercial real estate	$	101,829	$	—	$	—	$	101,829
Construction, land development, land	—		—		—		—
1-4 family residential	12		—		—		12
Farmland	—		—		—		—
Commercial	5,490		523		—		6,013
Factored receivables	—		—		—		—
Consumer	—		—		—		—
Mortgage warehouse	—		—		—		—
	$	107,331	$	523	$	—	$	107,854

At September 30, 2025, the Company had $69,000 of commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.

There were no loans to borrowers experiencing financial difficulty that had a payment default during the three and nine months ended September 30, 2025 and were modified in the twelve months prior to that default. There were $1,909,000 of commercial loans to a borrower experiencing financial difficulty that had a payment default during the three and nine months ended September 30, 2024 and were modified in the form of a payment delay in the twelve months prior to that default. Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance for credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the allowance for credit losses is adjusted accordingly.

Residential Real Estate Loans In Process of Foreclosure

At ~~June~~September 30, 2025 and December 31, 2024, the Company had no 1-4 family residential real estate loans for which formal foreclosure proceedings were in process.

Other Real Estate Owned

At ~~June~~September 30, 2025 and December 31, 2024, the Company had $1210,~~995,~~000 and $0 of other real estate owned, net.

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets consist of the following:

(Dollars in thousands)			~~June~~September 30, 2025						December 31, 2024
Goodwill			$	353,~~900~~898					$	241,949

	June 30, 2025						December 31, 2024
	September 30, 2025						December 31, 2024
(Dollars in thousands)	Gross CarryingAmount		AccumulatedAmortization		Net CarryingAmount		Gross CarryingAmount		AccumulatedAmortization		Net CarryingAmount
Core deposit intangibles	$	43,578	$	(41,~~073~~456)	$	2,~~505~~122	$	43,578	$	(40,310)	$	3,268
Customer relationship intangibles	66,394		(2526,~~027~~947)		4139,~~367~~447		30,014		(23,053)		6,961
Software intangible assets	26,952		(17,~~420~~942)		9,~~532~~010		18,612		(15,168)		3,444
Other intangible assets	5,433		(3,~~572~~721)		1,~~861~~712		5,627		(3,041)		2,586
	$	142,357	$	(8790,~~092~~066)	$	5552,~~265~~291	$	97,831	$	(81,572)	$	16,259

~~The changes in goodwill and intangible assets during the three and six months ended June 30, 2025 and 2024 are as follows:~~29

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2025		2024		2025		2024
Beginning balance	$	255,912	$	257,551	$	258,208	$	257,355
Acquired goodwill	111,951		—		111,951		—
Acquired intangible assets	44,721		—		44,844		2,920
Amortization of intangibles	(3,400)		(2,869)		(5,800)		(5,593)
Amortization of intangibles included in lease income	(19)		(30)		(38)		(30)
Ending balance	$	409,165	$	254,652	$	409,165	$	254,652

NOTE 6 — VARIABLE INTEREST ENTITIES

Collateralized Loan Obligation Funds – Closed

The Company holds investments in the subordinated notes of the following closed Collateralized Loan Obligation (“CLO”) funds:

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The changes in goodwill and intangible assets during the three and nine months ended September 30, 2025 and 2024 are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Beginning balance	$	409,163	$	254,652	$	258,208	$	257,355
Acquired goodwill	—		—		111,949		—
Acquired intangible assets	—		—		44,844		2,920





Amortization of intangibles	(2,956)		(3,600)		(8,756)		(9,193)
Amortization of intangibles included in lease income	(18)		(27)		(56)		(57)
Ending balance	$	406,189	$	251,025	$	406,189	$	251,025

NOTE 6 — VARIABLE INTEREST ENTITIES

Collateralized Loan Obligation Funds – Closed

The Company holds investments in the subordinated notes of the following closed Collateralized Loan Obligation (“CLO”) funds:


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

Trinitas CLO VI, LTD (Trinitas VI)	June 20, 2017	$	717,100

The net carrying amounts of the Company’s investments in the subordinated notes of the CLO funds, which represent the Company’s maximum exposure to loss as a result of its involvement with the CLO funds, totaled $1,~~782~~766,000 and $1,876,000 at ~~June~~September 30, 2025 and December 31, 2024, respectively, and are classified as held to maturity securities within the Company’s consolidated balance sheets.

The Company performed a consolidation analysis to confirm whether the Company was required to consolidate the assets, liabilities, equity or operations of the closed CLO funds in its financial statements. The Company concluded that the closed CLO funds were variable interest entities and that the Company holds variable interests in the entities in the form of its investments in the subordinated notes of entities. However, the Company also concluded that the Company does not have the power to direct the activities that most significantly impact the entities’ economic performance. As a result, the Company was not the primary beneficiary and therefore was not required to consolidate the assets, liabilities, equity, or operations of the closed CLO funds in the Company’s financial statements.

NOTE 7 — LEGAL CONTINGENCIES

~~Various~~TBK ~~legal~~Bank, ~~claims~~SSB ~~have~~(the ~~arisen~~“Bank”), ~~from~~the ~~time~~wholly-owned tobank ~~time~~subsidiary inof the ~~normal~~Company, ~~course~~is the agent bank for a $60.5 million floorplan loan facility, of ~~business~~which the Bank holds approximately $22.5 million, for which Tricolor Holdings, LLC (“Tricolor”) is the lead borrower. On September 10, 2025, Tricolor and its affiliates filed for Chapter 7 bankruptcy in the ~~opinion~~United States District Court for the Northern District of ~~management~~Texas. asPublic reports have surfaced alleging that Tricolor was engaged in fraud; however, the details of ~~June~~ this alleged fraud are not yet known. The floorplan loan facility is secured by a first-priority security interest in the vehicle inventory and certain other assets of Tricolor. As of September 30, 2025, ~~will~~the Bank believes its collateral position adequately secures the outstanding balance of the loan facility. As the bankruptcy proceedings progress, however, the Bank may discover additional information regarding the status of Tricolor’s vehicle inventory. Other creditors have noasserted ~~material~~that ~~effect~~they onhave interests in some of the vehicles in which the Bank asserts a first-priority security interest. To the extent necessary, the bankruptcy court may ultimately have to determine the Bank’s and other creditors’ interest in specific vehicles that the Bank believes to be part of Tricolor’s vehicle inventory. The Company may also be subject to additional claims asserted by creditors or the trustee in the bankruptcy proceedings. Should any of such factual determinations or developments in the bankruptcy proceedings negatively impact the Bank’s ~~consolidated~~assessment of its collateral position or otherwise have a negative impact on the Company, the Company might incur losses which could be material to our business, financial ~~statements~~condition and results of operations.

Additionally, other various legal claims have arisen from time to time in the normal course of business which, in the opinion of management as of September 30, 2025, will have no material effect on the Company’s consolidated financial statements.

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 8 — OFF-BALANCE SHEET LOAN COMMITMENTS

From time to time, the Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments.

The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet financial instruments.

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

	June 30, 2025						December 31, 2024
	September 30, 2025						December 31, 2024
(Dollars in thousands)	Fixed Rate		Variable Rate		Total		Fixed Rate		Variable Rate		Total
Unused lines of credit	$	~~105~~91,~~898~~177	$	~~499~~480,~~987~~855	$	~~605~~572,~~885~~032	$	103,784	$	486,414	$	590,198
Standby letters of credit	$	76,~~067~~438	$	4,~~577~~598	$	11,~~644~~036	$	16,630	$	7,320	$	23,950
Commitments to purchase loans	$	—	$	~~290~~287	$	~~290~~287	$	—	$	9,500	$	9,500
Mortgage warehouse commitments	$	—	$	~~599~~625,~~691~~792	$	~~599~~625,~~691~~792	$	—	$	810,913	$	810,913

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by the Company, upon extension of credit, is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, the Company has rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The credit risk to the Company in issuing letters of credit is essentially the same as that involved in extending loan facilities to its customers.

Commitments to purchase loans represent loans purchased by the Company that have not yet settled.

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Mortgage warehouse commitments are unconditionally cancellable and represent the unused capacity on mortgage warehouse facilities the Company has approved. The Company reserves the right to refuse to buy any mortgage loans offered for sale by a customer, for any reason, at the Company’s sole and absolute discretion.

The Company records an allowance for credit losses on off-balance sheet credit exposures through a charge to credit loss expense on the Company’s consolidated statements of income. At ~~June~~September 30, 2025 and December 31, 2024, the allowance for credit losses on off-balance sheet credit exposures totaled $2,~~481~~518,000 and $2,701,000, respectively, and was included in other liabilities on the Company’s consolidated balance sheets. The following table presents credit loss expense for off balance sheet credit exposures:

	Three Months Ended June 30,				Six Months Ended June 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Credit loss expense (benefit)	$	~~(89)~~35	$	60(1,132)	$	(~~218~~183)	$	~~1,102~~(30)

NOTE 9 — FAIR VALUE DISCLOSURES

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

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TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The methods of determining the fair value of assets and liabilities presented in this note are consistent with the methodologies disclosed in Note 16 of the Company’s 2024 Form 10-K.

30Assets and liabilities measured at fair value on a recurring basis are summarized in the table below.


(Dollars in thousands)	Fair Value Measurements Using						Total Fair Value
September 30, 2025	Level 1		Level 2		Level 3
Assets measured at fair value on a recurring basis
Securities available for sale
Mortgage-backed securities, residential	$	—	$	95,416	$	—	$	95,416
Asset-backed securities	—		851		—		851
State and municipal	—		2,819		—		2,819
CLO securities	—		277,643		—		277,643
Corporate bonds	—		261		—		261
SBA pooled securities	—		1,098		—		1,098
	$	—	$	378,088	$	—	$	378,088

Equity securities with readily determinable fair values
Mutual fund	$	4,569	$	—	$	—	$	4,569

Loans held for sale	$	—	$	9,741	$	—	$	9,741

Indemnification asset	$	—	$	—	$	74	$	74

Revenue share asset	$	—	$	—	$	1,772	$	1,772

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Assets and liabilities measured at fair value on a recurring basis are summarized in the table below.

(Dollars in thousands)	Fair Value Measurements Using						TotalFair Value
June 30, 2025	Level 1		Level 2		Level 3
Assets measured at fair value on a recurring basis
Securities available for sale
Mortgage-backed securities, residential	$	—	$	99,909	$	—	$	99,909
Asset-backed securities	—		868		—		868
State and municipal	—		2,793		—		2,793
CLO securities	—		287,287		—		287,287
Corporate bonds	—		257		—		257
SBA pooled securities	—		1,161		—		1,161
	$	—	$	392,275	$	—	$	392,275
Equity securities with readily determinable fair values
Mutual fund	$	4,526	$	—	$	—	$	4,526
Loans held for sale	$	—	$	6,066	$	—	$	6,066
Indemnification asset	$	—	$	—	$	270	$	270
Revenue share asset	$	—	$	—	$	2,344	$	2,344


(Dollars in thousands)	Fair Value Measurements Using						Total Fair Value
December 31, 2024	Level 1		Level 2		Level 3
Assets measured at fair value on a recurring basis
Securities available for sale
Mortgage-backed securities, residential	$	—	$	84,185	$	—	$	84,185
Asset-backed securities	—		905		—		905
State and municipal	—		3,063		—		3,063
CLO Securities	—		291,913		—		291,913
Corporate bonds	—		262		—		262
SBA pooled securities	—		1,233		—		1,233
	$	—	$	381,561	$	—	$	381,561

Equity securities with readily determinable fair values
Mutual fund	$	4,445	$	—	$	—	$	4,445

Loans held for sale	$	—	$	1,172	$	—	$	1,172

Indemnification asset	$	—	$	—	$	679	$	679

Revenue share asset	$	—	$	—	$	2,616	$	2,616

There were no transfers between levels during 2025 or 2024.

31Indemnification Asset

The fair value of the indemnification asset is calculated as the present value of the estimated cash payments expected to be received from Covenant for probable losses on the covered Over-Formula Advance Portfolio acquired during 2020. The cash flows are discounted at a rate to reflect the uncertainty of the timing and receipt of the payments from Covenant. The indemnification asset is reviewed quarterly and changes to the asset are recorded as adjustments to other noninterest income or expense, as appropriate, within the Consolidated Statements of Income. The indemnification asset fair value is considered a Level 3 classification. At September 30, 2025 and December 31, 2024, the estimated cash payments expected to be received from Covenant for probable losses on the covered Over-Formula Advance Portfolio were approximately $78,000 and $715,000, respectively, and a discount rate of 5.0% and 5.0%, respectively, was applied to calculate the present value of the indemnification asset. A reconciliation of the opening balance to the closing balance of the fair value of the indemnification asset is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Beginning balance	$	270	$	1,088	$	679	$	1,497
Indemnification asset recognized in business combination	—		—		—		—
Change in fair value of indemnification asset recognized in earnings	(196)		(205)		(605)		(614)
Indemnification reduction	—		—		—		—
Ending balance	$	74	$	883	$	74	$	883

Table of Contents

TRIUMPH FINANCIAL, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Indemnification Asset

The fair value of the indemnification asset is calculated as the present value of the estimated cash payments expected to be received from Covenant for probable losses on the covered Over-Formula Advance Portfolio acquired during 2020. The cash flows are discounted at a rate to reflect the uncertainty of the timing and receipt of the payments from Covenant. The indemnification asset is reviewed quarterly and changes to the asset are recorded as adjustments to other noninterest income or expense, as appropriate, within the Consolidated Statements of Income. The indemnification asset fair value is considered a Level 3 classification. At June 30, 2025 and December 31, 2024, the estimated cash payments expected to be received from Covenant for probable losses on the covered Over-Formula Advance Portfolio were approximately $284,000 and $715,000, respectively, and a discount rate of 5.0% and 5.0%, respectively, was applied to calculate the present value of the indemnification asset. A reconciliation of the opening balance to the closing balance of the fair value of the indemnification asset is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2025		2024		2025		2024
Beginning balance	$	475	$	1,292	$	679	$	1,497
Indemnification asset recognized in business combination	—		—		—		—
Change in fair value of indemnification asset recognized in earnings	(205)		(204)		(409)		(409)
Indemnification reduction	—		—		—		—
Ending balance	$	270	$	1,088	$	270	$	1,088

Revenue Share Asset

On June 30, 2022 and September 6, 2022, the Company entered into and closed two separate agreements to sell two separate portfolios of factored receivables. The June 30, 2022 agreement contains revenue share provisions that entitles the Company to an amount equal to fifteen percent of the future gross monthly revenue of the clients associated with the sold factored receivable portfolio. The September 6, 2022 agreement contains revenue share provisions that entitles the Company to an amount ranging from fifteen to twenty percent, depending on the client, of the future gross monthly revenue of the clients associated with the sold factored receivable portfolio. The fair value of the revenue share assets is calculated each reporting period, and changes in the fair value of the revenue share assets are recorded in noninterest income in the consolidated statements of income. The revenue share asset fair value is considered a Level 3 classification.

At ~~June~~September 30, 2025 and December 31, 2024, the estimated cash payments expected to be received from the purchaser for the Company's share of future gross monthly revenue as $2,~~967~~441,000 and $3,572,000, respectively, and a discount rate of 10.0% was applied to calculate the present value of the revenue share asset. A reconciliation of the opening balance to the closing balance of the fair value of the revenue share asset is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

2025

2024

Filing Compare · Triumph Financial, Inc.