Question · Q4 2025
Donald Broughton sought clarification on the meaning and benefit of a 'negative credit loss expense.' He then asked about the nature of risk in Triumph's business, specifically whether it relates to duration matching, assessing creditworthiness, or underlying assets. Finally, he inquired if the ABL (Asset-Based Lending) business was intended to be complementary to Triumph's other offerings, such as factoring freight bills, given their understanding of assets like trucks and trailers.
Answer
Aaron Graft, Founder, Vice Chairman, and CEO, clarified that a negative credit loss expense implies greater recoveries than new provisions or charge-offs, specifically recoveries of prior period expenses. David Vielehr, President of LoadPay, stated that the primary risk is understanding the creditworthiness of underlying borrowers, with duration playing to their advantage due to very short average durations. Aaron Graft added that other lending businesses, like the community bank, require tight credit policies. David Vielehr explained that while the ABL business was expected to have strategic benefits to transportation, it hasn't materialized in practice, leading to non-transportation-related exposure. Todd Ritterbusch, President, TriumphPay, acknowledged that initial business plans don't always play out as expected.
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