Triumph Financial, Inc.

Good morning. It's seven o'clock sharp. Thank you for being with us. It's time for our fourth quarter earnings call. Since the last time we spoke, we rebranded the company to Triumph Financial and changed our ticker to TFIN. As a result, some of the backgrounds and logos may be a little different today, but it's all part of aligning where we're going with what we're doing. We're joined this morning by Tim Valdez, President of Triumph, Brad Voss, our Chief Financial Officer of Triumph Financial, Aaron Graff, the Chief Executive Officer of Triumph Financial, Melissa Foreman, President of Triumph Pay, and Todd Ritterbush, President of TBK Bank. I'd like to open today by thanking you for the feedback following the call last quarter. It's so helpful to hear from you. Most of your thoughts were overwhelmingly positive. However, this is a new format for us, so we'll continue to tweak things here and there as we go forward. So let's get to the business of the day. Triumph Financial had a solid quarter. And while there are freight headwinds, we are also seeing a lot of opportunity. Last evening, we published our quarterly shareholder letter. That letter and our quarterly results will form the basis of our call today. However, before we get started, I would like to remind you that this conversation may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to publicly revise any forward-looking statement. For details, please refer to the Safe Harbor Statement in our shareholder letter published last evening. All comments made during today's call are subject to that Safe Harbor Statement. With that, I'd like to turn the call over to Aaron for a welcome and to kick off our Q&A session. Aaron? Thank you, Luke.

Good morning, everyone, and thank you for joining us. I have just a few comments and then as has been our practice since we've been publishing this letter, we're gonna turn it over for questions. The first comment is to welcome Tim Valdez to our call. Tim, I've known for several years, he has been part of Triumph for the last year and a half and we're very grateful to have him in the role he's in at Triumph and leading our factoring segment. Another thing I want to just touch on before we turn it over for questions is as a result of reviewing some of the notes that were published last evening, specifically questions about expense growth throughout the year. What I think analysts and investors should understand is that a material amount of our projected expense growth is tied to try and pay. And as we called out in the letter, we expect Triumph Pays margins to improve by 50% during the year. In other words, if that expense growth does show up, you should assume it's going to be accompanied by revenue growth at a higher level than any expenses we include in that segment. And there's, of course, other expenses across the enterprise tied to inflation and reinvestment. But that expense growth will come, if it comes, with corresponding revenue growth. Two other things to point out that were in the letter. Investors and the market should not overlook the fact that conforming transactions, what we used to call conforming transactions that we now call network transactions, which are the promise of the network itself. We went from zero on January 11th, 2022 to over 1 billion on January 10th of this year. That is no easy feat to go from zero to a billion in anything in one year. The other thing that I was especially excited about is that Triumph Pay was self-funding for the quarter. That has long been part of our plan. And in this rate environment, it's a very good thing to see that business continue to generate float to support its own activities, as well as contribute money back to the parent. And so with those opening comments out of the way, we're ready to turn it over to analysts and investors for questions.

We will now go to Q&A. If you have dialed into Zoom and would like to ask a question, please use the raise hand feature at the bottom of your Zoom window. Once called upon, please feel free to unmute and ask your question. Our first question comes from Jared Shaw from Wells Fargo. Jared, please go ahead.