Good morning, and welcome to the Triumph Bancorp First Quarter 2021 Earnings Call. All participants will be in a listen-only mode. Please note this event is being recorded. I would now like to turn the call over to Mr. Luke Wyse, Investor Relations Officer. Please go ahead.

Good morning. Welcome to the Triumph Bancorp Conference Call to discuss our first quarter 2021 financial results. Before we get started, I’d like to remind you that this presentation may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to publicly revise any forward-looking statements.

Thank you, Luke. Good morning everyone. For the first quarter, we earned net income to common stockholders of $33.1 million or $1.32 per diluted share. There are so many good things to talk about this quarter. It's hard to note where to start. Therefore, I will start by providing an update on the only negative item of note I have to report on today. And that being the continuing developments associated with our acquisition of TFS. Then we will move on to addressing the many great things impacting this quarter and the future of our business. We acquired the transportation factoring assets of Transport Financial Solutions or TFS from Covenant Logistics Group in the third quarter of 2020. Upon discovering several issues related to TFS post-closing, Covenant agreed to indemnify us for up to $45 million of losses incurred on the $60 million of over-advanced receivables acquired in the original transaction. By the end of last year we had fully reserved for the entire $41.3 million relationship to the largest customer in this portfolio. In the first quarter given new adverse developments with that customer, we charged off the entire $41.3 million relationship, which had no impact on earnings given that it had been fully reserved in prior periods. Covenant has reimbursed us $35.6 million of this charge-off in accordance with the indemnification agreement which they funded by drawing on their secured credit facility with us. At quarter end, our entire remaining over-formula advanced position is down from $62.1 million at year-end to $10.6 million. In the first quarter we increased our related reserve by $2.9 million to fully reserve for the remaining $10.6 million balance. This had the effect of increasing our credit loss expense in ACL by $2.9 million. We summarized the TFS impact in our earnings release. However, to state it simply here the net impact on first quarter results of the additional $2.9 million reserve and the upward revaluation of the remaining indemnification asset led to a pre-tax gain of $1.8 million.

Thanks Aaron. I would like to start by providing an update on our PPP lending and forgiveness efforts. In 2021, we have originated just over $83 million in new first and second draw loans with an additional $10 million that we expect to close soon. With the expiration of the latest round of funding insight, we recently shifted resources from originating new PPP loans to forgiving existing loans. We've completed the forgiveness process on $74 million or roughly one-third of the loans made in 2020. We also recognized $1.1 million in PPP fee incumbents first quarter 2021 with an estimated $6.6 million more to be recognized as we complete the forgiveness process.

Thank you Todd. In the second quarter of 2019, we announced a pivot in our business model. We narrowed our focus towards our transportation businesses specifically leaning into TriumphPay and Triumph Business Capital. This quarter we announced a major step consistent with that pivot. With the agreement to acquire HubTran, we are creating an open loop payments network for the trucking industry. By open loop I mean that multiple capital providers can join the network. It's not just for Triumph. The network will provide tools and services to create frictionless presentment, settlement and payment of invoices. In other words, TriumphPay is now becoming more than a B2B payments technology platform. With HubTran, we use data integrations with parties on both sides of the transaction to materially change the way the industry operates.

First question comes from Brad Milsaps, Piper Sandler. Please go ahead.

Good morning.

Morning Brad.

Aaron thanks for all the great color. Maybe just to start bigger picture, what do you think is the kind of best measure going forward, is it still we should be tracking the number of invoices, the number of distinct carriers that you guys continue to add to the platform is that sort of the best way to kind of manage your progress? Just trying to get a sense of how the handoff is going to be from traditional type, Triumph Business Capital or even TriumphPay type revenue to kind of what you've now developed with the acquisition of HubTran?

Yes. It's a great question and one that we owe you some metrics next quarter, but let's just stepping back, if you think about volume and freight broker adoption of course that matters. What also matters now that didn't matter so much prior to converting to open loop is how many factoring companies have chosen to engage on the other side of the network? So that's something you should look for; are we able to grow the number of participants? If there is 400 factoring companies and HubTran is engaged with 50 of them existing, how many more will come on because they see the efficiency gain that will come from this. So I would point you to that. Secondly is to start to understand fee income. Right now if you combine TriumphPay and HubTran on a run rate basis, the revenues are around $18.5 million. Of course, for us if we achieve what we're after we expect that to grow materially, but it's important that that grows in fee based revenue. HubTran prices things on a per load basis, per invoice basis. TriumphPay historically used its balance sheet and generated quick pay revenue which is as you know, spread revenue that will be de-emphasized going forward. So I think those are the things to look for, but clearly a leading indicator if we're being successful is the continued growth of volume going through the network. That includes tier-1 brokers all the way through tier-4 brokers but there is 25 tier-1 freight brokers who have more than $500 million in revenue and as we told you, we’re now integrated on a combined basis with 14 of those. You should watch and see how many more of those come and of course that will materially drive volume. Does that give some amount of clarity of what we'll be pointing you to in the future?

Yes. Just need some numbers right to back it up, but yes, I think I get the roadmap. Do you still think there is still shelf space for plus or minus $2 billion of kind of traditional factor receivables? Can that number grow? Just kind of any color around that average invoice prices there saw another tick up this quarter as well not as dramatic as last quarter but obviously still running very high relative to history?

Yes. So let me start off then I'm going to ask Geoff to finish. Look, we want to make clear TriumphPay is a tool that is built for the entire industry. So that means that factoring, it's built for other factoring companies, Triumph Business Capital will be treated with equal parity to them in that tool. And so, going forward you're going to see more growth on a just volume basis in TriumphPay because it addresses the entire market. But as the Triumph Business Capital which as you know, for a long time has delivered very high profitability around here, we're still very proud of that business and think it will grow organically. Geoff, you want to talk about some of the things you think that might affect the next few quarters?

Yes, I think going back and just thinking about the factoring industry itself it remains highly fragmented. You do have a few large players that occupy a third of the market and then it drops off relatively swiftly to hundreds of other smaller players. I think there will be some consolidation in that. I think honestly, those that come into the network will enjoy benefits along with Triumph Business Capital. I think those that don't come into the network can become vulnerable to losing market share. So I think there's a lot of growth for Triumph Business Capital organically. Our plan has always been to go into the market and take market share. We will do it a little differently in the open loop model, but we're still going to do it.

Great and just final question for me. Aaron, I know you mentioned the intangible amortization, but or maybe for Bryce can you give us any sense of kind of maybe where to start with operating expenses from a run rate perspective as HubTran comes on board?

This is Bryce. I mean, the run rate expenses of HubTran itself not that material. I mean really overall, I mean their run rate revenue was kind of building up to $18 million annualized range over the last few months. They're running it around probably a net breakeven after before the amortization impact overall. It's kind of what's being plugged in and then of course, we will be spending on technology and integration cost over the next few quarters to plug all that in.

Thank you.

Thank you. The next question is from Michael Rose of Raymond James. Please go ahead.

Good morning guys. How are you?

Good morning. We're great.

I think part of building this open loop network involves buying obviously from not only the freight brokers, but also from your competitors on the factoring side. Just wanted to see, I know it's still early days. But where those efforts stand and obviously part of the HubTran acquisition comes with 50 factoring clients, which I think was a big part of the rationale for the deal. Can you just give us an update on kind of where the open loop network build stands and maybe how long you think this will take to kind of get up and running at this point? Thanks.

Sure. So the first thing is, we have to actually close on HubTran, which we would expect to happen in the second quarter. We have to get regulatory approval to do that which we don't expect to be a problem. On the topic of how is the factoring industry responding to this, well I think they respond like you might think so. They know us to be a formidable competitor through Triumph Business Capital and all of them wanted clarity on what does this mean; does this mean that a HubTran and TriumphPay combined enterprise is going to either takeaway features and tools that factors currently use with HubTran, is Triumph going to take that away, is Triumph going to weaponize the data against us, and a lot of legitimate questions. And so, we've been out on the road meeting face-to-face with the factoring industry and explaining, number one, we would never spend the kind of money we did on HubTran to buy something on a technology multiple to turn around and destroy its client base just as a lead generator. I mean that would make no economic sense. Secondly that we don't think we should be nor do we think the industry would allow a single capital provider to meet all of its needs. That doesn't make sense and that our goal is to actually see interchange fee, fee based revenue growth and if that grows faster than our factoring business then great. And so, I think those conversations are in various stages. I think we do have relational capital with the industry that we've always done what we said we would do. And so, I think what the factoring industry is waiting on and deserves to see is the written terms of service of how this network will operate and what sort of data security will be provided and it's not just them, I think if there's a major catalyst for why TriumphPay will achieve its long-term goals is both sides of the network; freight brokers, factors, carriers as well. They want to protect their data and their data historically has not been protected in the way that the market operates and so, we view ourselves as a bank with all of the obligations and regulations around our responsibility there. Our responsibility as a fiduciary, as the appropriate place to give people an area to interact with each other while protecting their data. So that's a lot in that but I would say Michael we are meeting and have met with most of the factoring companies that we know well, we will continue the outreach to others and it's our job to demonstrate the value proposition for them so that they're excited about this and can see how they can grow and especially make their business more efficient and mitigate fraud risk by choosing to integrate with the network.

That's very helpful. Maybe just going to Tpay for a sec, I noticed that the average invoice size was down a little bit more than I was expecting. Any sort of color there? I know fourth quarter was a little bit more elevated than kind of the second and third quarters of last year. Just any thoughts on expectations of where that number could check out? Thanks.

Just to clarify, are you talking about the average invoice size for TriumphPay?

Correct. For TriumphPay.

There's nothing. We don't see a trend in any of that. Some of that's going to be seasonality. If more refrigerated trucks are moving vis-a-vis the rest of the industry that'll pull prices up. If more flatbeds are moving that'll pull prices up. I think what you're seeing in there is just small cyclical businesses inside a greater, very cyclical industry. I think our view right now is, the spot market will probably not strengthen materially from here. I think it's more likely that it will, it might weaken some because it's been a little, it's been distorted by the difference in where contractual lanes were being priced versus spot rates based upon a whole year of unknowns and uncertainties. So, it seems to us right now and the firm wide view for both TriumphPay and Triumph Business Capital is that average invoice sizes won't appreciate upward or won't go up materially from here, but we don't think they'll go down materially either and we think utilization rates will stay very high. There is just some really strong secular things going on that appear to be setting up for a very good year for freight.

Very helpful. And then, just one last one for me just going back to Brad's question. I guess we're all trying to get what the amortization could be maybe if you could just help us out, are you going to use like a 10 year sum of the year's digits or straight line just to give us some sense of what the amortization could be on a quarterly basis? Thanks.

I don't have the number, yes well the evaluation work is still being completed, but it'll be an accelerated amortization method probably sum of your digits probably in the range of an eight year life, but I'm guessing of to some degree here. But until that works completed, but it's probably in that range.

Very helpful. Thanks for taking my questions guys.

You got it.

Thank you. Next question is from Steve Moss of B. Riley FBR. Please go ahead.

Good morning guys.

Good morning.

Just want to follow up on the -- you guys mentioned with TriumphPay $10.7 billion run rate in March, adding an additional tier-1 broker in the coming weeks. Just kind of curious where did that tier-1 broker take you and is that additive to the $25 billion you have combined with HubTran?

It would be, yes, additive to that. I think you'll see, it would not surprise me if by the end of the second quarter, we were getting closer to 17 of the top 25 being integrated. The one that is in process that we thought would integrate this quarter, but slid a few weeks to next quarter probably brings around $500 million to $600 million of volume to the network. But we continued the dialogue with the remaining tier-1 brokers and of course the mid-size brokers as well. But you are correct the run rate as of March is $10.7 billion and of course the reason that's higher than for the entire quarter is because we on-boarded a few brokers during the quarter and so what we're capturing in March was the best indication of what the fully loaded run rate would be that we're starting off with for Q2.

And so, it sounds like with the pipeline continuing to be strong in terms of additional integrations, we've been thinking about this, HubTran acquisition was $25 billion run rate, but it sounds like the growth to that number will continue throughout the year is kind of a fair assumption?

Yes. There is, my own view here Steve is, it is very, very likely that the freight brokerage community will continue to come because they see very easily for them the value proposition of cost savings, the data protection; all of the things we're offering. The thing that you need to watch for that's important and I think we will have success at it, but it requires us getting out on the road and sitting down face-to-face with the factoring industry and helping them understand the equal value proposition for them. And so that's a KPI, we owe you going forward because you need both sides of the network for a network to exist and that's what our focus is.

Right. No, that's definitely helpful there and then just in terms of, just one balance sheet item. You guys talked about picking up pipeline for equipment finance in ABL. I was kind of thinking, wondering just how to think about where are the yields for those portfolios and just how we think about growth portfolio there?

Good morning. This is Todd. I'll answer that question. So yields in equipment finance have remained very steady over the last few months. You can think about that yield being in the 575 range and new originations coming on at that range sometimes a little higher, sometimes a little lower. Asset-based lending is a lumpier business so it's more deal by deal. It's hard to use averages, but where we have carved out our niche in asset-based lending we feel that we're still going to be able to get pricing in the say L plus 350, L plus 400 range.

Great. Well thank you very much for everything.

Thank you. The next question is from Gary Tenner of D.A. Davidson. Please go ahead.

Good morning everybody. I guess I'm going to ask a few more questions about the TriumphPay and HubTran integration. From a technology perspective, I know you've been working with them. What's the kind of timeframe assuming a second quarter close to kind of the integration of the HubTran product with TriumphPay to be able to actually offer to get it ready to offer the product to the industry? How long does that process take?

Yes Gary, so the first thing is there is no one specific finish line. What we would say is there will be things we offer almost immediately. There is some things we can do in TriumphPay and HubTran together that help for instance the factoring industry with cash application and some integrations we can turn on for them. What you're asking about I think is the ultimate end state which you saw on slide 11. Slide 11 would be effectively lights out processing taken to its further, as far as we can see and what that means is that a load shows up for the factoring company or the carrier itself if they're not factored, but generally we're talking about a factoring company can see the load and you have structured data that exists before the load ever got picked up by the truck. And then for the whole life cycle of the load that data stays structured and there is only one human intervention in that entire process and that would be what you could call lights out processing which is an efficiency that's never been seen before in our industry. I think it's more likely that that is a first second quarter of next year before that is fully completed. It will come on piece by piece with as freight brokers fully integrate with the system and the factoring companies fully integrate. But to get to where a material amount of all transactions are done on a lights out basis I think that's probably 12 months. Along the way we will be releasing enhancements and different feature sets to both freight brokers and factoring companies that will continue to improve their experience all along that journey to the end game which I think is like I said first second quarter of next year.

Thanks for that. And then just to go back to TFS for a quick second here. The remaining $10.5 million obviously the that $41 million relationship accelerated in terms of resolution via charge-off. The remaining amount is anything going on that would accelerate that too? I know the numbers now become quite a bit smaller but is this still kind of a just a longer term expectation for the workout?

Well that customer or the customers underlying that portion of the over advanced portfolio are in a different financial position than the one that we charged-off and so of course they're always out looking for their growth capital for themselves and so it's possible that could resolve in a favorable manner in short order. If we had, had any inkling that we thought we needed to charge it-off we would have charged it off this quarter, but like I said the underlying client situations different with respect to that piece of the portfolio versus what we charged-off.

Great. Thanks for the questions.

Thank you. The next question is from Brady Gailey, KBW. Please go ahead.

Good morning guys.

Good morning Brady.

So Aaron with HubTran you're at 25 billion of annualized payments. How big do you think annualized payments can get overtime?

Well that's a great question. So brokered freight is somewhere between in our opinion $100 billion to $150 billion. I think it's skewing to the higher end of that right now just given market conditions and invoice sizes are higher. So I think it's skewing to the higher end. We know that the top 25 freight brokers’ control 40% of the market and the top 1,000 freight brokers control 90% of the market and then the remaining 10% is divided up among 7,000 plus or minus very small freight brokers some of whom are subsidiaries of carriers. So our goal is to go after as much of the 90% of the market as we can tier-1, 2, and 3 freight brokers. We also will serve tier-4 the smallest ones but if we're, if it's a volume game and trying to get to a network scale that's who we have to go after. There is no doubt that we won't get them all for reasons I can't even anticipate, but we think that this, the value proposition Brady is this. Right now to pay a $1,500 invoice, which is historically what the average would be? We think there is $60 of liquidity and friction cost. Of course, we don't fix the liquidity cost, I mean somebody needs to get paid their cost-to-capital to provide instant liquidity to the carrier who needs it. But setting that part aside, there is $30 plus or minus that's just friction cost to get this done. My vision, our team's vision is TriumphPay materially changes that that $30 number gets way smaller because data stays structured, fraud risk is mitigated, we use integrations versus emails, integrations versus phone calls and everything speeds up. And so, if that's true, if that's the value proposition we bring to the market, I would think a lot of the market would want that. No one wants unnecessary friction. They want to provide capital and liquidity and carriers want capital and liquidity and freight brokers want to provide quick pay, and all that should and will happen. But if we can eliminate what is roughly our estimate of $30 of just expense per invoice that's not doing anything for anyone, we think that a large part of the market is going to want that. So I can't give you a ultimate target number. I can tell you, we're going after the top 1,000 freight brokers. We've got several 100 of them already. And, we obviously want all factoring companies who want to join the network to join the network. And hopefully they see the cost savings available to them and get excited about that.

To me it doesn't feel like a 100 billion of annualized payments is unrealistic. Maybe it's a stretch goal. But you guys will basically have the market. So there's 100 billion at some point in the future, an unrealistic stretch goal?

I don't, I wouldn't, I mean, yes, that stretch, but I wouldn't call it unrealistic if we're delivering a value proposition. And remember this Brady, beyond brokered freight, which is clearly our focus now. We think the same product should work in as modified format, but should work for the shipper market, which is a $250 billion market because I know as of right now at Triumph Business Capital, for example, 70% of the invoices we purchase from truckers are brokered freight, but 30% are shippers. And so obviously, that means we have trucking customers who haul both in the brokered market, but they also haul directly for shippers. So our view is if this works and with further feature sets and enhancements is, well where else are truckers hauling, where else does this issue present itself and that would be with the larger shipper market. So that's a certainly two to three years down the road plan. We've got a lot of work in front of us just to attack what is right in front of us. And so, in light of that additional market opportunity Brady, I don't think 100 billion is out of reach.

And then, Aaron can you just talk a little bit about kind of the strategic shift away from quick pay and towards interchange income with your new network? I mean, is it, well you all still focus on quick pay, but more the focus will be on interchange and then I know it's tough, but is there any way to guesstimate what that interchange fee could be once the network is mature and a few years out?

:

Next question is from Jared Shaw with Wells Fargo Securities. Please go ahead.

Hi guys can you hear me. I think I can't hear anything on your end. I still don't hear anything coming from Triumph. So I'll wait to see if that gets fixed.

One moments while the Triumph management team reconnects their lines. Thank you. Please continue to hold. Pardon me everyone again this is the operator. We're experiencing technical difficulties with the speakers’ lines. We are trying to get them to reconnect at this time. Please hold and we thank you for your patience. Pardon me everyone. This is the operator. We've reconnected the speakers. Mr. Jared Shaw is here at the podium, with your question. Please go ahead at this time.

Thanks.

Hi Jared.

Just I guess shifting back to the Triumph Business Capital discussion and your thought that there is going to be more consolidation among some of the smaller factors just given the strong ROEs in the system you put in place on that side of the business, what's the appetite for being part of consolidation being an active consolidator of maybe some of the less efficient capital providers out there?

Yes. Great question Jared. I think our appetite given this conversion to the open loop is probably lower than it has ever been in the past. What we want to see is Triumph Business Capital win on an organic basis. And I think they're doing that some of the stuff that we're doing with the user experience and ancillary services and products that are being offered to truckers that Geoff and team and frankly working with Todd Ritterbusch and our lending team, we're really excited about, frankly engaging these factoring clients as bank customers. So we want that business to grow. It is growing at a very large clip. I think frankly where we sit right now at this very day, it is more important to us to demonstrate to the rest of the factoring industry that we have their best interest in mind than it is to go out and try to buy a bunch of competitors. And I mean the whole point of what we're doing here is to try to grow fee income and be valued more like a fintech payments company, which is what I think we've created for a market that's 8 % of GDP then we are the largest factoring company in the history of transportation. That's less of our goal. So obviously, the profitability I mean you see it, Triumph Business Capital is operating at a 6% plus pre-tax ROA. So that pays the bills around here and more and so we like that. But I don't think you'll see us aggressively be out consolidating factoring companies. I think there are other players who would like to do that and we think we'll probably allow them to do that. But that doesn't mean just last point on that, that doesn't mean we won't look at compelling opportunities especially on the larger factoring companies. If someone approaches us and wants to merge with us of course we will look at that. But it's not our stated goal right now to go out and try to gobble up as many factoring companies as we can. And one last thing on that I think TriumphPay also brings with it the ability of smaller entrants to now have a little bit of parity with the larger players to the extent they use the network to do their back office processing and so I think you'll see smaller factoring companies who are really focused on sales and really efficient and using the network to do what historically you'd have a large staff to do. I think that they've got a shot to build a nice business within this industry. So it all remains to be seen, but those are our thoughts.

And then, just circling back on Brady's question I think, you may have got cut off at the end there. But when we look at HubTran, can you just walk us through or remind us what are they charging now in terms of interchange and then once you have this ramped up and approach that total addressable market whatever it is where do you think that interchange goes to as they work to eliminate part of that $60 of friction?

Yes. So right now and you got to understand HubTran as it exist is not a network and so there are things that TriumphPay plus HubTran as a network is going to do that are not part of the world for HubTran that now exist. But HubTran right now charges between $0.50 and $1 a load to the freight broker community for the services it provides and it charges between $0.50 and a $1 load to the factoring community for the service it provides. Now it was never able to provide full integration and ultimately fraud mitigation and all the things that come with having a direct pipe between the factoring company and the freight broker. So this is Brady's question and I'm sorry we got cut off, but I'm going to project Jared that long term and we will continue to add feature sets as we go. But I think once you get to lights out processing where the network owns the risk of fraud in certain aspects because of the way it's structured. Our goal would be an interchange fee that is somewhere between 25 to 50 basis points is we think will still allow adequate profitability to be remitted back to freight brokers and to factoring companies and so that all three of us win and we can create the scale and volume that I think our payments investors would like to see.

Great. Thanks.

Next is a follow-up question from Brady Gailey of KBW. Please go ahead.

Yes, I don't know what happened there guys. My other question was just, Aaron I know longer term you've talked about getting the company up to 2% to 2.5% ROA or potentially higher. I was just wondering do you have any updated thoughts on that just with HubTran now in the mix and you're now looking at the profitability a little different with interchange fees coming up is there any update on what the ROA of this company could be longer term?

Well the first thing, so if you strip everything down right now and take the noise out of the quarter and it is my sincere hope this is the last quarter we have to spend four paragraphs talking about TFS. But if you strip everything down and the ACL releases out on a core run rate we're running between 1.65% and 1.7% ROA and we are doing that Brady with TriumphPay being a couple of a million dollar drag a quarter. And so, if we were running this business as a mature stable business, we would be at a 2% ROA right now no question in my mind. But we've chosen over the long run to invest in an ambitious project that is going to transform how payments are done in an industry that's 8% of GDP and so to do that you've got to invest. And so, we're going to walk the tightrope of trying to be a top quartile earner relative to our banking peers all the while continuing to invest and experiencing the amortization expense that comes from all these intangibles with HubTran and so I can't give you in this new world a prediction on a steady state 2% ROA run rate. I think the gating question to getting there is at what point TriumphPay becomes accretive to earnings versus a drag on earnings. And as we said we've invested 120 million with HubTran included at least to build this we think the opportunity set is frankly the TriumphPay could be worth well over a billion dollars, once we get to where we're going and even beyond that depending upon how you want to look at what the interchange fees will be and whether you think we can take this to the shipper market and all of those things. And so, for us it's acceptable to back off of what I previously told you about trying to get to this 2% run rate to try to incubate this fintech and give it every advantage it needs to win the race to become a ubiquitous payments network for this entire segment of the industry and that involves hiring good people. So if and when that 2% ROA comes is beyond 2022, maybe it's 2023 I really can't project Brady. What I have to do now is we have to make sure we do everything in our power that getting this far in the process we set TriumphPay up to complete the race that it started.

Yes. I would think the ultimate value of TPay could be a lot higher than a billion. If you run the math 100 billion of payments, you're earning say the lower end of your interchange ratio 25 days of 22. That's $250 million of revenue you put a high teens multiple on revenue which I think is how the market values that. I mean that's yes, that's a lot higher than a billion dollars?

I mean, so first thing just remember that only one out of every two invoices or 50% of the brokered freight market is currently factored and I'm not saying there won't be a way for us to deliver value on the non-factored portion, but I would start with running that off a 50% financing rate to that market. But yes, I mean look, it took a great deal of courage for our board and our team to take this step of creating an open loop and giving to the industry specifically many of our factoring competitors, the same advantages that Triumph Business Capital would have had and level the playing field there was a lot of discussion. I mean it's a scary thing to disrupt your most profitable line of business. But our ultimate conclusion was this is what the market really wants and needs and somebody's going to do this and based upon the knowledge we built from being in this industry for 15 years, we were the best equipped to do it if we would just have the courage to go after it. So I own for you the fact that 2% ROA was the target. I was not thinking open loop at the time. We see open loop now as the future and so that's going to delay that but I think for investors they ought to see that if we pull this off, the valuation especially if you can take this beyond the brokered freight market, in the shipper market you have got the chance to create some things that's worth many times of our current market cap. And so that's what we are running for.

Yes that makes subtle sense. Thanks for all the color.

You got it.

This ends our question-and-answer session. Now I would like to turn the conference back over to Mr. Aaron Graft for closing remarks. Please go ahead.

Thank you all for your time today. We apologize for the technical glitch. But we look forward to seeing you soon and for our investors hopefully in person soon. Everyone have a great day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.