Triumph Financial TFIN Payments — Deferred set-up costs

Capitalized contract costs consist of (i) deferred sales commissions that are incremental costs of obtaining customer contracts and (ii) deferred set-up costs, primarily direct payroll costs, for implementation services provided to customers prior to the launching of the Company’s products for general availability (go-live) to customers. Deferred sales commissions are amortized ratably over two years, taking into consideration the initial contract term, expected renewal periods, and sales commissions paid on such renewal periods. Deferred set-up costs are amortized ratably over four years which estimates the benefit period of the capitalized costs starting on the go-live date of the service. Deferred sales commissions and deferred set-up costs were included in other assets in the accompanying consolidated balance sheets and were $138,000 and $2,068,000, respectively, at June 30, 2026 and $220,000 and $1,840,000, respectively, at December 31, 2025. The table below shows the amortization of deferred sales commissions and deferred set-up costs, which is included in salaries and employee benefits in the consolidated statements of income: