Triumph Financial, Inc. (TFIN)

Overview

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

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

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

Our payments business is a payments network for the over-the-road trucking industry. This platform was originally designed to manage Carrier payments for third party logistics companies, or 3PLs ("Brokers") and the manufacturers and other businesses that contract directly for the shipment of goods (“Shippers”), with a focus on increasing on-balance sheet factored receivable transactions through the offering of quick pay transactions for Carriers receiving such payments through the network. During 2021, we acquired HubTran, Inc., a software platform that offers workflow solutions for the processing and approval of Carrier Invoices for approval by Brokers or purchase by the factoring businesses providing working capital to Carriers ("Factors"). Following such acquisition, our strategy shifted from a capital-intensive on-balance sheet product with a greater focus on interest income to a network for the trucking industry with an additional focus on fee revenue. Our network connects Brokers, Shippers, Factors and Carriers through forward-thinking solutions that help each party successfully manage the life cycle of invoice presentment for services provided by Carrier through the processing and audit of such invoice to its ultimate payment to the Carrier or the Factor providing working capital to such Carrier.

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

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

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

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

Second Quarter 2026 Overview

Net income available to common stockholders for the three months ended June 30, 2026 was $10.6 million, or $0.44 per diluted share, compared to a net income to common stockholders for the three months ended June 30, 2025 of $3.6 million, or $0.15 per diluted share. For the three months ended June 30, 2026, our return on average common equity was 4.59% and our return on average assets was 0.63%.

Net income available to common stockholders for the six months ended June 30, 2026 was $16.1 million, or $0.67 per diluted share, compared to net income available to common stockholders for the six months ended June 30, 2025 of $2.8 million, or $0.12 per diluted share. For the six months ended June 30, 2026, our return on average common equity was 3.55% and our return on average assets was 0.52%.

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

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

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

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

Our Payments segment processed 9.1 million invoices paying Carriers a total of $13.492 billion during the three months ended June 30, 2026. This compares to processed volume of 8.5 million invoices for a total of $10.081 billion during the same period a year ago.

Items of Note

Triumph Financial Headquarters Update

On December 17, 2025, we sold the building in Dallas, Texas originally purchased in March 2024 for the purpose of constructing a future headquarters for Triumph Financial and will not occupy the building in any capacity. The building was sold for $64.0 million in cash, resulting in a gain on sale of $8.7 million. The gain on sale was allocated to the Corporate and Other category for segment reporting.

Restructuring Activities

In August 2025, we announced a reduction in force involving approximately 5% of our 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 our initiatives to re-balance our cost structure in light of technology investments that have delivered significant

[Excerpt truncated for page length; source filing is linked above.]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable of a future or forward-looking nature. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

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

•our ability to mitigate our risk exposures;

•our ability to maintain our historical earnings trends;

•changes in management personnel;

•interest rate risk;

•concentration of our products and services in the transportation industry;

•credit risk associated with our loan portfolio;

•lack of seasoning in our loan portfolio;

•deteriorating asset quality and higher loan charge-offs;

•time and effort necessary to resolve nonperforming assets;

•inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates;

•risks related to the integration of acquired businesses and any future acquisitions;

•our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance;

•lack of liquidity;

•fluctuations in the fair value and liquidity of the securities we hold for sale;

•impairment of investment securities, goodwill, other intangible assets or deferred tax assets;

•our risk management strategies;

•environmental liability associated with our lending activities;

•increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms;

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•the accuracy of our financial statements and related disclosures;

•material weaknesses in our internal control over financial reporting;

•system failures or failures to prevent breaches of our network security;

•the institution and outcome of litigation and other legal proceedings against us or to which we become subject;

•changes in carry-forwards of net operating losses;

•changes in federal tax law or policy;

•the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Act and their application by our regulators as well as privacy, cybersecurity, and artificial intelligence regulation and oversight;

•governmental monetary and fiscal policies;

•changes in the scope and cost of FDIC, insurance and other coverages;

•failure to receive regulatory approval for future acquisitions; and

•increases in our capital requirements.

The foregoing factors should not be construed as exhaustive. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section presents management’s perspective on our financial condition and results of operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. See the “Cautionary Note Regarding Forward-Looking Statements” section above.

Overview

We are a financial holding company headquartered in Dallas, Texas and registered under the Bank Holding Company Act, that offers a diversified line of banking, factoring, payments, and intelligence services. Our principal subsidiary is TBK Bank, SSB, a Texas state savings bank and the entity through which we offer substantially all of our products and services. As of December 31, 2025, we had consolidated total assets of $6.381 billion, total loans held for investment of $4.991 billion, total deposits of $4.950 billion and total stockholders’ equity of $941.8 million.

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

In addition to our traditional banking operations, we also operate a factoring business focused primarily on serving the over-the-road trucking industry. This business involves the provision of working capital to the trucking industry through the purchase of invoices generated by small to medium sized trucking fleets ("Carriers") at a discount to provide immediate working capital to such Carriers.

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In 2024, our factoring business also launched its Factoring as a Service ("FaaS") product. As part of our FaaS product, we offer certain back-office factoring services to the over-the-road transportation industry, enabling our FaaS customers to either supplement their own factoring operations or to offer factoring services to their customers wholly supported by our platform. Our factoring business operates in a highly specialized niche with unique processes and earns substantially higher yields on its factored accounts receivable portfolio than our other lending products described above.

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

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

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

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

2025 Overview

Net income available to common stockholders for the year ended December 31, 2025 was $22.2 million, or $0.93 per diluted share, compared to net income available to common stockholders for the year ended December 31, 2024 of $12.9 million, or $0.54 per diluted share. For the year ended December 31, 2025, our return on average common equity was 2.54% and our return on average assets was 0.40%.

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At December 31, 2025, we had total assets of $6.381 billion, including gross loans of $4.991 billion, compared to $5.949 billion of total assets and $4.547 billion of gross loans at December 31, 2024. Total loans increased $444.3 million during the year ended December 31, 2025. Our Banking loans, which constitute 71% of our total loan portfolio at December 31, 2025, increased from $3.340 billion in aggregate as of December 31, 2024 to $3.525 billion as of December 31, 2025, an increase of 5.5%. Our Factoring factored receivables, which constitute 24% of our total loan portfolio at December 31, 2025, increased from $1.033 billion in aggregate as of December 31, 2024 to $1.221 billion as of December 31, 2025, an increase of 18.2%. Our Payments factored receivables, which constitute 5% of our total loan portfolio at December 31, 2025, increased from $171.7 million in aggregate as of December 31, 2024 to $242.1 million as of December 31, 2025, an increase of 41.0%.

At December 31, 2025, we had total liabilities of $5.439 billion, including total deposits of $4.950 billion, compared to $5.058 billion of total liabilities and $4.821 billion of total deposits at December 31, 2024. Deposits increased $129.4 million during the year ended December 31, 2025.

At December 31, 2025, we had total stockholders' equity of $941.8 million. During the year ended December 31, 2025, total stockholders’ equity increased $50.9 million. Tier 1 capital and total capital to risk weighted assets ratios were 10.74% and 12.71%, respectively, at December 31, 2025.

The total dollar value of invoices purchased by our Factoring segment during the year ended December 31, 2025 was $11.699 billion with an average invoice size of $1,752. The transportation average invoice size for the year was $1,717. This compares to invoice purchase volume of $10.370 billion with an average invoice size of $1,786 and average transportation invoice size of $1,750 for the year ended December 31, 2024.

Our Payments segment processed 33.6 million invoices paying Carriers a total of $40.517 billion during the year ended December 31, 2025. This compares to processed volume of 24.8 million invoices for a total of $27.784 billion during the year ended December 31, 2024.

2025 Items of Note

Triumph Financial Headquarters Update

On December 17, 2025, we sold the building in Dallas, Texas originally purchased in March 2024 for the purpose of constructing a future headquarters for Triumph Financial and will not occupy the building in any capacity. The building was sold for $64.0 million in cash, resulting in a gain on sale of $8.7 million. The gain on sale was allocated to the Corporate and Other category for segment reporting.

Restructuring Activities

In August 2025, we announced a reduction in force involving approximately 5% of our 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 our initiatives to re-balance our 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 our transportation verticals. We believe these actions will strengthen our competitive position, enhance operational agility, and support sustainable long-term growth.

During the year ended December 31, 2025, we recognized $3.2 million 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, $0.5 million of the expense was recognized by the Banking segment, $1.1 million was recognized by the Factoring segment, $0.5 million was recognized by the Payments segment, $0.2 million was recognized by the Intelligence segment, and $0.8 million was allocated to the corporate and other category. The Company also recognized $1.3 million of expense during the year ended December 31, 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.

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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 an $11.5 million positive impact on pretax net income for the year ended December 31, 2025 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.

Greenscreens.ai

On May 8, 2025, we, through our 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, for $139.0 million in cash and $12.7 million of our common stock.

For further information on the above transactions see Note 2 – Business Combinations and Divestitures in the accompanying notes to the consolidated financial statements included elsewhere in this report.

2024 Items of Note

Isometric Technologies Inc

On December 1, 2024, we acquired Isometric Technologies Inc. ("ISO"), a freight technology company, for $10.0 million in cash. Isometric Technologies provides service and performance scoring and benchmarking capabilities to the over-the-road trucking industry.

For further information on the above transactions see Note 2 – Business Combinations and Divestitures in the accompanying notes to the consolidated financial statements included elsewhere in this report.

Macroeconomic Considerations

As a business operating in the bank and non-bank financial services industries, our business and operations are sensitive to general business and economic conditions in the United States. If the U.S. economy weakens, our growth and profitability from our operations, including lending and deposit services, could be constrained.

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

The Company did experience the direct impact of inflation and rising costs in the form of higher salaries, general and administrative costs due to wage inflation and price increases throughout the past three years. While such impact was softer during 2025 and the Company has not yet experienced any material adverse effects, the prolonged impact of a higher interest rate environment and resumed inflation could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2025.

We define liquidity as our ability to generate sufficient cash to fund current loan demand, deposit withdrawals, or other cash demands and disbursement needs, and otherwise to operate on an ongoing basis. During the early part of 2023, the financial services industry faced a liquidity challenge that resulted in the failure of a handful of financial institutions. We manage liquidity at the holding company level as well as that of our bank subsidiary. The management of liquidity at both levels is important, because the holding company and our bank subsidiary have different funding needs and sources, and each is subject to regulatory guidelines and requirements which require minimum levels of liquidity. We believe that our liquidity ratios meet or exceed those guidelines and our present position is adequate to meet our current and future liquidity needs. See "Liquidity and Capital Resources" below for discussion of our capital resources and liquidity management.

Given the nature of the Company's operations, supply chain disruptions, whether caused by tariffs, natural disasters, or otherwise, do not have a direct impact on the Company; however, such disruptions could make it more difficult for our borrowers to repay their loans, potentially leading to increased delinquencies, increased volume of loan modifications, and financial losses for the Company. We did not experience such adverse effects during the year ended December 31, 2025. Supply chain disruptions most prominently impact our trucking transportation and factoring operations discussed in terms of trucking volume in the following section. While the Company has not yet experienced any material adverse effects, the prolonged impact or increased intensity of supply chain disruptions could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2025.

While economic conditions in foreign countries, including impacts related to the war in Ukraine, conflict in the Middle East and South America, and tensions in U.S.-China relations, could affect the stability of global financial markets, which could hinder U.S. economic growth, we did not experience a financial impact due to such conditions during the year ended December 31, 2025. While the Company has not yet experienced any material adverse effects, the prolonged impact of such conflicts, or other global economic events, could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2025.

Trucking Transportation and Factoring

Over the last few years, including most of 2025, the largest driver of changes in revenue at our Factoring segment, and to a lesser extent, our Payments segment, is fluctuation in the freight markets, particularly in brokered freight, which is priced largely off the spot market (a reflection of real-time balance of carrier supply and shipper demand in the market) and subject to variability in diesel prices. The softness in freight since 2023 has been the result of a combination of falling volumes and excess capacity. In recent quarters, average rates per mile have decreased and returned spot rates to levels last seen in 2019. For the spot rate market, the drop was a little higher than the drop in diesel prices over the same period. Spot rates had fallen below the cost per mile to operate for many carriers. As a result, we have observed a number of small and medium-sized trucking companies either leave the market by signing on with larger carriers or electing to sell their fleets or companies and move on to other endeavors, though the pace of these exits has slowed recently. The confluence of these circumstances has resulted in persistently low invoice prices and decreased prices of new and used equipment. Such invoice prices and prices of new and used equipment remain consistently below the years leading up to 2023. This has put pressure on the revenue of our Factoring segment as well as our equipment finance borrowers, resulting in increased equipment finance delinquencies and loan modifications. Equipment finance losses have been manageable, but continued softness in

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the freight markets could cause the Company to experience adverse effects on its business, financial condition, results of operations and cash flows that are not possible to predict at December 31, 2025.

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

Climate Change

Refer to Item 1. Business for background as it relates to the Company and climate change.

There have been significant completed and pending developments in federal and state legislation and regulation regarding climate change in recent years. Given our size and the nature of our business, the incurred direct impact and expected future direct impact of climate-related regulation is not material, nor expected to be material, to our business, financial condition, or results of operations. Further, we have not experienced any physical effects of climate change on our operations and results.

We recognize that, while not material to our operations to-date, indirect consequences of climate-related regulation could exist that might be associated with our lending to certain types of customers who engage in activity that some could deem potentially harmful to the environment. The Company notes that the climate change landscape is constantly evolving and at this time, it is not possible for us to know or predict the full universe or extent that these indirect effects will have on the Company's future operations.

While programs and initiatives focused on sustainability and resource conservation have been put in place by the Company, there have been no material past capital expenditures for climate-related projects. We do not plan to have material future capital expenditures for climate-related projects at this time. Additionally, we have not incurred any material compliance costs related to climate change.

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Financial Highlights

The following table shows selected financial data for each of the years in the three year period ended December 31, 2025:

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(1)The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. The non-GAAP measures used by the Company include the following:

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

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

•“Total tangible assets” is defined as total assets less goodwill and other intangible assets.

•“Tangible book value per share” is defined as tangible common stockholders’ equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.

•“Tangible common stockholders’ equity ratio” is defined as the ratio of tangible common stockholders’ equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.

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•“Return on average tangible common equity” is defined as net income available to common stockholders divided by average tangible common stockholders’ equity.

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

GAAP Reconciliation of Non-GAAP Financial Measures

We believe the non-GAAP financial measures included above provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures:

Results of Operations

For discussion of the results of operations for the year ended December 31, 2024 compared with the year ended December 31, 2023, see Triumph Financial’s 2024 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 11, 2025.

Fiscal year ended December 31, 2025 compared with year ended December 31, 2024

Net Income

We earned net income of $25.4 million for the year ended December 31, 2025 compared to $16.1 million for the year ended December 31, 2024, an increase of $9.3 million.

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Details of the changes in the various components of net income are further discussed below.

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Net Interest Income

Our operating results depend primarily on our net interest income, which is the difference between interest income on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds. Interest rate fluctuations, as well as changes in the amount and type of interest-earning assets and interest-bearing liabilities, combine to affect net interest income. Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a “volume change.” It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as a “rate change.”

The following table presents the distribution of average assets, liabilities and equity, as well as interest income and fees earned on average interest-earning assets and interest expense paid on average interest-bearing liabilities:

1.Balance totals include respective nonaccrual assets.

2.Net interest spread is the yield on average interest-earning assets less the rate on interest-bearing liabilities.

3.Net interest margin is the ratio of net interest income to average interest-earning assets.

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The following table presents loan yields earned on our loan portfolios:

We earned net interest income of $350.6 million for the year ended December 31, 2025 compared to $350.5 million for the year ended December 31, 2024, an increase of $0.1 million, or 0.03%, primarily driven by the following factors.

Interest income increased $8.0 million, or 1.9%, due to an increase in total average interest earning assets of $439.9 million, or 8.7%, including an increase in average total loans of $540.2 million, or 12.8%. The average balance of our higher yielding Factoring factored receivables increased $145.2 million, or 14.5%, and we also experienced an increase in average Payments factored receivables. Average Banking loans increased $364.2 million, or 12.0%, due to increases in the average balances of construction and development, 1-4 family residential, commercial, consumer, and mortgage warehouse loans, partially offset by decreases in commercial real estate and farmland loans. Interest income from our Banking loans is impacted by our lower yielding mortgage warehouse lending product. The average mortgage warehouse lending balance was $1.087 billion for the year ended December 31, 2025 compared to $739.4 million for the year ended December 31, 2024.

Interest expense increased $7.8 million, or 10.9%, primarily driven by higher average interest-bearing liabilities which increased in total period over period, including average total interest bearing deposits which increased $261.2, or 10.1%. The increase in interest expense was partially offset by decreased rates on our interest bearing liabilities. Average noninterest bearing deposits grew $239.2 million

Net interest margin decreased to 6.39% for the year ended December 31, 2025 from 6.95% for the year ended December 31, 2024, a decrease of 56 basis points, or 8.1%.

Our net interest margin was impacted by a decrease in yield on our interest earning assets of 53 basis points to 7.85% for the year ended December 31, 2025. This decrease was primarily driven by lower yields on loans which decreased 60 basis points to 8.27% for the year. Yield on our Banking loans decreased 57 basis points period over period driving much of the decrease in the yield on our overall loan portfolio. Our yield on Factoring and Payments factored receivables also decreased period over period. That said, our higher yielding Factoring factored receivables as a percentage of the total loan portfolio increased period over period which had an upward impact on our overall loan yield. Non-loan yields were generally lower period over period.

Rates paid on our interest bearing liabilities did not meaningfully impact our net interest margin as our total average cost of interest bearing liabilities was relatively flat year over year.

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

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Changes in net interest income due to changes in rates and volume. The following table shows the effects changes in average balances (volume) and average interest rates (rate) had on the interest earned in our interest-earning assets and the interest incurred on our interest-bearing liabilities for the periods indicated. For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated to volume.

Credit Loss Expense

Credit loss expense is the amount of expense that, based on our judgment, is required to maintain the allowances for credit losses (“ACL”) at an appropriate level under the current expected credit loss model. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity. Refer to Note 1 of the notes to the financial statements for detailed discussion regarding ACL methodologies for available for sale debt securities, held to maturity securities and loans held for investment.

The following table presents the major categories of credit loss expense (benefit):

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Regarding available for sale debt securities in an unrealized loss position, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via credit loss expense. At December 31, 2025 and 2024, the Company determined that all impaired available for sale securities experienced a decline in fair value below the amortized cost basis due to noncredit-related factors. Therefore, the Company carried no ACL at those respective dates and there was no credit loss expense recognized by the Company during the years ended December 31, 2025 and 2024.

The ACL on held to maturity securities is estimated at each measurement date on a collective basis by major security type. At December 31, 2025 and 2024, the Company’s held to maturity ("HTM") securities consisted of investments in the subordinated notes of collateralized loan obligation (“CLO”) funds. Expected credit losses for these securities are estimated using a discounted cash flow methodology which considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. At December 31, 2025 and 2024, the Company carried $3.2 million and $5.4 million of these HTM securities at amortized cost, respectively. The ACL on these balances was $1.6 million at December 31, 2025 and $3.5 million at December 31, 2024 and we recognized credit loss expense of $0.3 million and $0.3 million during the years ended December 31, 2025 and 2024, respectively. None of the overcollateralization triggers tied to the CLO securities were tripped as of December 31, 2025. Ultimately, the realized cash flows on CLO securities such as these will be driven by a variety of factors, including credit performance of the underlying loan portfolio, adjustments to the portfolio by the asset manager, and the timing of a potential call.

Our ACL on loans was $36.5 million as of December 31, 2025, compared to $40.7 million as of December 31, 2024, representing an ACL to total loans ratio of 0.73% and 0.90% respectively.

Our credit loss expense on loans decreased $15.4 million, or 82.6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

During the year ended December 31, 2025, the Company acquired a $23.4 million nonperforming loan for $3.3 million. The loan was purchased credit deteriorated ("PCD") and therefore, a $10.8 million ACL was established on Day 1 resulting in a discount of $9.3 million. In the first half of the year, the Company determined that the $10.8 million ACL was uncollectible and charged off the entire amount. Such charge-off had no impact on credit loss expense as the initial reserve was recorded through purchase accounting. During the fourth quarter of the year, the Company was able to repossess, and in some instances liquidate, a substantial amount of the loan's collateral leading to a recovery and benefit to credit loss expense of $9.5 million. The net charge-off amount related to the acquired PCD loan was $1.3 million for the year ended December 31, 2025.

The decrease in credit loss expense was also driven by a decrease in required specific reserves. Such specific reserves decreased $8.5 million during the year ended December 31, 2025 compared to an increase in specific reserves of $2.4 million during the prior year. Additionally, changes to projected loss drivers and prepayment speeds that the Company forecasted over the reasonable and supportable forecast periods to calculate expected losses resulted in $0.7 million of credit loss expense during the year ended December 31, 2025 compared to $3.2 million of credit loss expense during the prior year.

The decrease in credit loss expense was also impacted by net charge-off activity. We had net charge-offs that impacted credit loss expense of $7.4 million during the year ended December 31, 2025 compared to net charge-offs that impacted credit loss expense of $13.1 million during the prior year. Such net charge-offs for the year ended December 31, 2025 include the aforementioned $3.8 million recovery resulting from the USPS Settlement as well as the $1.3 million net charge off related to the aforementioned acquired PCD loan.

Further, changes in volume and mix of the loan portfolio resulted in credit loss expense of $3.6 million during the year ended December 31, 2025 compared to a benefit to credit loss expense of $0.1 million during the prior year.

Credit loss expense for off balance sheet credit exposures decreased $0.2 million, primarily due to the changes in the assumptions used to project the loss rates previously discussed as well as changes in the underlying exposures.

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Noninterest Income

The following table presents the major categories of noninterest income:

Noninterest income increased $23.0 million, or 35.2%. Changes in selected components of noninterest income in the above table are discussed below.

•Net gains (losses) on disposal of premises and equipment. Net gains (losses) on disposal of premises and equipment increased $14.9 million, primarily due to the aforementioned $8.7 million gain on sale of the building purchased in 2024 for the purpose of constructing a future headquarters for Triumph as well as a $5.6 million gain on sale of an airplane.

•Fee income. Fee income increased $14.3 million, or 40.4% primarily due to a $7.3 million increase in fee income earned by our Payments segment and a $6.2 million increase in fee income from our Intelligence segment, mostly driven by the acquisition of Greenscreens during the year ended December 31, 2025. There were no other significant changes within the components of fee income.

•Insurance commissions. Insurance commissions decreased $2.4 million, or 40.2%, due to lower volumes of processed policies and deferred revenue on certain brokered insurance products.

•Other. Other noninterest income decreased $3.3 million, primarily due to a $1.2 million impairment charge on an equity investment obtained through a debt restructuring and a $1.9 million decrease in rental income generated by the property that was sold during the year. These decreases were partially offset by a $1.5 million increase in bank owned life insurance income. Additionally, the Company experienced an unrealized loss on the market value of its revenue share asset of $9 thousand during the year ended December 31, 2025 compared to a $1.3 million gain during the same period a year ago.

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Noninterest Expense

The following table presents the major categories of noninterest expense:

Noninterest expense increased $26.2 million, or 7.0%. Details of the more significant changes in the various components of noninterest expense are further discussed below.

•Salaries and Employee Benefits. Salaries and employee benefits expenses increased $14.3 million, or 6.5%. Employee salaries and payroll tax expense increased $11.4 million and $0.3 million, respectively. Included in employee salaries for the year ended December 31, 2025 was $3.2 million of severance expense resulting from our aforementioned restructuring activities. Our average full-time equivalent employees were 1,521.7 and 1,542.1 for the years ended December 31, 2025 and 2024, respectively. Employee benefits expense such as 401(k) matching, employee insurance, and stock based compensation paid to employees increased $1.8 million and commission expense increased $1.5 million. Bonus expense decreased $0.3 million and temporary labor expense decreased $0.3 million period over period.

•Occupancy, Furniture and Equipment. Occupancy, furniture and equipment expenses decreased $1.1 million, or 3.5%, primarily due to a $0.6 million decrease in depreciation expense and a $0.4 million decrease in maintenance and service fees period over period.

•FDIC Insurance and Other Regulatory Assessments. FDIC insurance and other regulatory assessments increased $1.7 million, or 62.9%, primarily due to increased assessments period over period.

•Professional Fees. Professional fees, which are primarily comprised of external audit, tax, consulting, and legal fees, decreased $2.6 million, or 14.5%, primarily due to the recovery of $6.5 million of previously expensed legal fees through the USPS Settlement during the year ended December 31, 2025. This decrease was partially offset by $4.0 million of professional fees incurred during the year ended December 31, 2025 as a result of the Greenscreens acquisition.

•Advertising and promotion. Advertising and promotion expenses increased $1.0 million, or 16.4%, primarily due to increased advertising efforts.

•Communications and Technology. Communications and technology expenses decreased $1.2 million, or 2.3%, primarily due to decreased IT professional services fees.

•Software amortization. Software amortization expense increased $5.0 million, or 84.8%, primarily due to additional software assets coming on line during late 2024 and early 2025.

•Other. Other noninterest expense includes loan-related expenses, training and recruiting, postage, insurance, and subscription services. Other noninterest expense increased $9.7 million or 41.8%, primarily due to $3.5 million of litigation settlement expense (unrelated to the USPS Settlement) during the year ended December 31, 2025, $2.4 million of current period lease termination payments related to the building we acquired during March 2024, and an increase of $2.1 million in loan-related expenses period over period.

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Income Taxes

The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income, changes in the statutory rate and the effect of changes in valuation allowances maintained against deferred tax benefits.

Income tax expense increased $3.3 million, or 74.3%, from $4.4 million for the year ended December 31, 2024 to $7.6 million for the year ended December 31, 2025. The increase in income tax expense period over period was commensurate with an increase in our pretax net income and also driven by an increase in our effective tax rate. The effective tax rate was 23% and 21% for the years ended December 31, 2025 and 2024, respectively. The effective tax rate for the year ended December 31, 2025 was impacted by research and development tax credits and a shortfall from restricted stock vesting and stock option exercises resulting in lower benefits realized during the year. The effective tax rate for the year ended December 31, 2024 was impacted by an adjustment to our disallowance related to highly compensated individuals as well as a research and development tax credit recognized during the period.

Operating Segment Results

Our reportable segments are Banking, Factoring, Payments, and Intelligence, which have been determined based upon their business processes and economic characteristics. This determination also gave consideration to the structure and management of various product lines. The Banking segment includes the operations of TBK Bank. Our 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 from factoring services. The Payments segment includes the operations of TBK Bank's presentment, audit, and payment solution to Shipper, Broker, and Factor clients in the trucking industry. The Payments segment derives its revenue from transaction fees and interest income on factored receivables related to invoice payments. These factored receivables consist of both 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 and from offering 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 Brokers. Our data intelligence segment was launched at the beginning of the fourth quarter of 2024 to turn the over-the-road trucking data collected through our services into actionable insights for our customers. This launch coincided with our acquisition of Isometric Technologies Inc. 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. The revenue for Intelligence offerings is derived through access and subscription fees, as well as seat licenses where applicable. Prior to the fourth quarter of 2024, there were no individuals allocated specifically to our data intelligence segment and an explicit data intelligence segment did not exist. Therefore, revision of prior period segment operating results is not applicable.

Prior to September 30, 2024, the Company disclosed Corporate as a reportable segment. The Company has determined that what was previously deemed the Corporate reportable segment consists of other business activities that do not represent a reportable segment, but rather, such activities belong in a Corporate and Other category as reported in the tabular disclosure below. It should be noted that such restructuring of the tabular disclosure did not result in any changes to the Company's revenue and expense allocation methodology described below. The Company restructured prior period tabular disclosures to achieve appropriate comparability.

Expenses that are directly attributable to the Company's Banking, Factoring, Payments, and Intelligence segments such as, but not limited to, occupancy, salaries and benefits to employees that are fully dedicated to the segment, and certain technology costs that can be attributed to specific users or functional areas within the segment are allocated as such. The Company continues to make considerable investments in shared services that benefit the entire organization and these expenses are allocated to the Corporate and Other category. The Company allocates such expenses to the Corporate and Other category in order for the Company's chief operating decision maker and investors to have clear visibility into the operating performance of each reportable segment.

We allocate intersegment interest expense to the Factoring and Payments segments based on one-month term SOFR for their funding needs. When the Payments segment is self-funded, with customer deposit funding in excess of its factored receivables, intersegment interest income is allocated based on the Federal Funds effective rate. Management believes that such intersegment interest allocations appropriately reflect the current interest rate environment and the relatively quick turn of the underlying receivables.

Reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. Changes in management structure or allocation methodologies and procedures may result in future changes to previously reported segment financial data. The accounting policies of the segments are substantially the same as those described in Note 1 – Summary of Significant Accounting Policies in the accompanying notes to the consolidated financial statements included elsewhere in this report.

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Transactions between segments consist primarily of borrowed funds, payment network fees, and servicing fees. Intersegment interest expense is allocated to the Factoring and Payments segments as described above. Payment network fees are paid by the Factoring segment to the Payments segment for use of the payments network. Servicing fees are paid by the Payments segment to the Factoring segment for servicing factoring transactions with freight broker clients transferred from the Factoring segment to the Payments segment to align with the supply chain finance product offerings for this business. Servicing fees are paid by the Payments segment to the Factoring segment for servicing such product. Beginning prospectively on January 1, 2024, the Factoring and Payments segments began paying fees to the Banking segment for the Banking segment's execution of various banking services that benefit those segments. Credit loss expense is allocated based on the segment’s ACL determination. Noninterest income and expense directly attributable to a segment are assigned to the related segment. Various shared service costs such as human resources, accounting, finance, risk management and information technology expense are assigned to the Corporate and Other category if they are not directly attributable to a segment. Other segment expense consists of various loan and card related expenses and other insignificant miscellaneous costs not specifically reviewed by the Company's chief operating decision maker. Taxes are paid on a consolidated basis and are not allocated for segment purposes.

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The following tables present our primary operating results for our operating segments:

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(1) Includes revenue and expense from the Company’s holding company, which does not meet the definition of an operating segment. Also includes corporate shared service costs such as the majority of salaries and benefits expense for the Company's executive leadership team, as well as other selling, general, and administrative shared services costs including human resources, accounting, finance, risk management and a significant amount of information technology expense.

(2) Net intersegment noninterest income (expense) includes:

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