Triumph Financial (TFIN)

Financial services company Triumph Financial (NASDAQ:TFIN) announced better-than-expected revenue in Q4 CY2025, with sales up 16% year on year to $120.1 million. Its GAAP profit of $0.77 per share was significantly above analysts’ consensus estimates.

Company Overview

Originally focused on traditional banking before pivoting to serve the transportation sector, Triumph Financial (NASDAQ:TFIN) provides specialized financial services to the trucking industry, including payments processing, factoring, banking, and data intelligence solutions.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

Triumph Financial competes with traditional banks offering transportation financing like Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC), specialized factoring companies such as Crestmark (a division of MetaBank), and payment technology providers like AscendTMS and Truckstop.com in the freight technology space.

Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Regrettably, Triumph Financial’s revenue grew at a tepid 6.5% compounded annual growth rate over the last five years. This fell short of our benchmark for the banking sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Triumph Financial’s recent performance shows its demand has slowed as its annualized revenue growth of 2.2% over the last two years was below its five-year trend. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Triumph Financial reported year-on-year revenue growth of 16%, and its $120.1 million of revenue exceeded Wall Street’s estimates by 8.8%.

Net interest income made up 86% of the company’s total revenue during the last five years, meaning Triumph Financial barely relies on non-interest income to drive its overall growth.

Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Triumph Financial, its EPS declined by 18.1% annually over the last five years while its revenue grew by 6.5%. This tells us the company became less profitable on a per-share basis as it expanded due to factors such as interest expenses and taxes.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Triumph Financial’s two-year annual EPS declines of 23.8% were bad and lower than its 2.2% two-year revenue growth.

We can take a deeper look into Triumph Financial’s earnings to better understand the drivers of its performance. A two-year view shows Triumph Financial has diluted its shareholders, growing its share count by 1.8%. This has led to lower per share earnings. Taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Triumph Financial reported EPS of $0.77, up from $0.13 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Triumph Financial’s full-year EPS of $0.93 to grow 87.5%.

Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.

When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.

Triumph Financial’s TBVPS was flat over the last five years. A turnaround doesn’t seem to be in sight as its TBVPS also dropped by 5.6% annually over the last two years ($23.28 to $20.77 per share).

Over the next 12 months, Consensus estimates call for Triumph Financial’s TBVPS to grow by 8.1% to $22.46, paltry growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, Triumph Financial has averaged a Tier 1 capital ratio of 10.5%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, Triumph Financial has averaged an ROE of 7.1%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.

It was good to see Triumph Financial beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock remained flat at $70.55 immediately after reporting.

Updated: January 26, 2026 at 4:31 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

Triumph Financial doesn’t pass our quality test. To kick things off, its revenue growth was uninspiring over the last five years, and analysts don’t see anything changing over the next 12 months. And while its admirable net interest margin a wonderful starting point for the overall profitability of the business, the downside is its declining EPS over the last five years makes it a less attractive asset to the public markets. On top of that, its declining net interest margin shows its loan book is becoming less profitable.

Triumph Financial’s P/B ratio based on the next 12 months is 1.8x. This valuation tells us a lot of optimism is priced in - we think there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $66 on the company (compared to the current share price of $70.55), implying they don’t see much short-term potential in Triumph Financial.