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Reliant Bancorp, Inc. Reports Record Results for Second Quarter 2019

$0.38 Diluted EPS, up 11.8% YoY (Adjusted 2018 EPS)

3.57% NIM / 0.96% ROAA / 8.0% ROAE / $19.11 BVPS

16.0% Loan Growth (Annualized) / $150MM New Loan Production

10.5% ROATCE / 8.7% Annualized Increase in TBVPS

BRENTWOOD, Tenn.–(BUSINESS WIRE)– Reliant Bancorp, Inc. (“Reliant Bancorp” or the “Company”) (Nasdaq: RBNC), the parent company for Reliant Bank (“Reliant” or the “Bank”), reported net income of $4.2 million and $0.38 per diluted common share for the second quarter of 2019, compared to $2.1 million and $0.19 per diluted common share for the second quarter of 2018, or $3.9 million and $0.34 per diluted common share when second quarter of 2018 results are adjusted for merger-related expense and accretion (non-GAAP).

“We are very pleased to report record results for our Company in the second quarter. Earnings were primarily driven by strong revenue growth, good expense control, and superior asset quality. Our team produced at a high level, and we achieved growth in all of our key markets. Loan production of $150.0 million was 29% higher than the first quarter, and both new C&I and construction loans were particularly strong, a reflection of the confidence our customers have in the Nashville and Chattanooga economies,” stated DeVan Ard, Jr., Chairman, President & CEO of the Company.

“Additionally, we made progress improving our asset mix and accelerated the pace of our share repurchase program,” continued Ard.

Quarterly Highlights

Consistent Double-Digit, Organic Loan Growth Driving Revenue Growth and Improving Asset Mix

Loans Held for Investment increased by $50.5 million, 16.0% annualized, quarter-over-quarter and $170.2 million, or 14.9% year-over-year, to $1.3 billion. New loan production totaled $150.0 million at a 5.54% weighted average rate (“WAR”). Construction and C&I loans accounted for $62.9 million and $36.6 million, respectively, for the second quarter of 2019’s loan production. The Company partially funded loan growth through a $25.5 million reduction of the bond portfolio. At June 30, 2019, Loans Held for Investment comprised 73.2% of assets, up from 68.8% at June 30, 2018.

Ard stated, “Our bankers’ ability to consistently generate high-quality, organic loan growth has improved our asset mix over the past year increasing Loans Held for Investment to 73.2% of assets at June 30, 2019, up from 68.8% at June 30, 2018. We expect this trend to continue.”

Optimizing Funding Mix Remains a Priority

Deposits increased by $39.0 million, 10.3% annualized, quarter-over-quarter and $216.0 million, or 16.2% year-over-year, to $1.6 billion. Our cost of funds increased 8 basis points quarter-over-quarter and represented the largest factor contributing to the overall 6 basis points reduction in net interest margin. Average retail and wholesale deposit costs increased during the second quarter of 2019 reflecting the macro and local rate environment; however, late in the second quarter of 2019, brokered deposit offering rates began to decline. To take advantage of this trend, we reduced the State of Tennessee CD portfolio by $39.5 million at a weighted average cost (“WAC”) of 2.35% and the wholesale money market deposit portfolio by $20.1 million at a WAC of 2.67% and replaced those funds with short duration brokered CDs with a 2.26% WAC. We expect the cost of brokered CDs to continue to decline in the short-term. Ard continued, “While our bankers work hard to generate core deposits in a very competitive environment, we strategically use wholesale funding sources to supplement their efforts to meet our liquidity needs as efficiently as possible.”

Profitability Driven by Proactive Management of Non-Interest Expense

Non-interest expense (“NIE”) for the second quarter of 2019 increased 3.0% from the first quarter of 2019 and 13.6% from the second quarter of 2018 (merger expense not included) to $13.1 million; however, core bank segment NIE, which excludes mortgage subsidiary NIE, decreased 3.0% quarter-over-quarter. The year-over-year increase in operating expense is primarily driven by investments in upgrading business development and leadership personnel and the opening of new branches in Murfreesboro and Chattanooga during the second half of 2018. Core bank segment NIE as a percentage of average assets has remained relatively constant, 2.3% for second quarter of 2019, 2.4% for first quarter of 2019 and 2.3% for second quarter of 2018.

Asset Quality Remains a Hallmark of The Franchise

The Company has steadily improved key asset-quality metrics over the past year. Non-performing assets decreased to $4.9 million, or 0.27% of total assets, at June 30, 2019 from $6.1 million, or 0.35% of total assets, at March 31, 2019 and $6.5 million, or 0.39% of total assets, at June 30, 2018. Moreover, criticized and classified loans decreased to 0.78% of total loans at June 30, 2019, compared to 0.94% at March 31, 2019 and 1.11% at June 30, 2018.

The loan loss reserve was 0.89% of Loans Held for Investment at June 30, 2019 (1.17% when unamortized purchased loan discounts are included), down 1 basis point from March 31, 2019. The Provision for Loan Losses of $0.2 million was realized during the second quarter of 2019 to support portfolio growth. For the second consecutive quarter, we realized net recoveries.

Financial Strength Positions Company for Growth

Stockholders’ equity decreased by $1.2 million quarter-over-quarter to $213.9 million at June 30, 2019, primarily due to the repurchase of $7.6 million of common shares in the second quarter of 2019 ($8.3 million of share repurchases year-to-date). Book value per share increased by $0.41, or 8.8% annualized, to $19.11. Both the Company and the Bank continue to be classified as “Well Capitalized” financial institutions. Ard added, “Being a ‘Well Capitalized’ financial institution provides us with opportunities to grow both organically and via acquisition. We periodically evaluate acquisition opportunities but have remained disciplined in our M&A approach.”

Creating Shareholder Value

Tangible book value per share (“TBVPS”) (non-GAAP) increased by $0.31, or 8.7% annualized, to $14.52 from the first quarter of 2019 and by $1.46, or 11.2%, from the second quarter of 2018. Return on average tangible common equity (“ROATCE”) (non-GAAP) was 10.5% for the second quarter of 2019, up significantly from the second quarter of 2018, and 82 basis points from the first quarter of 2019.

Our financial success permits us to meet regulatory capital requirements and still provide a tangible return to our shareholders. We declared a $0.09 per share dividend, a 12.5% year-over-year increase, payable on July 18, 2019. Additionally, we have returned $8.3 million year-to-date to shareholders via the repurchase of over 365,000 common shares,” Ard concluded.

Non-GAAP Financial Measures

This document contains non-GAAP financial measures. The non-GAAP measures in this release include “adjusted net interest margin,” “adjusted net income attributable to common shareholders and related impact,” “average tangible stockholders’ equity,” “ROATCE,” “adjusted ROATCE,” “tangible assets,” tangible equity,” “TBVPS,” “efficiency ratio (subsidiary bank only excluding mortgage segment),” and “adjusted loan loss reserve.” We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe certain purchase accounting adjustments, income relating to the recoveries of purchased credit impaired loans, and merger expenses do not necessarily reflect the operational performance of the business in these periods; accordingly, it is useful to consider these line items with and without such adjustments. We believe this presentation also increases comparability of period-to-period results.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under generally accepted accounting principles.

Conference Call Information

The Company will hold a conference call to discuss second quarter 2019 results on Wednesday, July 24, 2019, at 9:00 a.m. CDT, and the earnings conference call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1855/30982. A link to these events can be found on the Company’s website at www.reliantbank.com and will be available for 12 months. Related presentation materials will be posted to the “Investor Relations” section of the Company’s web site at www.reliantbank.com prior to the call.

About Reliant Bancorp, Inc. and Reliant Bank

Reliant Bancorp, Inc. is a Brentwood, Tennessee-based bank holding company which, through its wholly owned subsidiary Reliant Bank, operates banking centers in Davidson, Hamilton, Hickman, Maury, Robertson, Rutherford, Sumner, and Williamson counties, Tennessee. Reliant Bank is a full-service commercial bank that offers a variety of deposit, lending, and mortgage products and services to business and consumer customers. As of June 30, 2019, Reliant Bancorp had approximately $1.8 billion in total consolidated assets, approximately $1.3 billion in loans and approximately $1.6 billion in deposits. For additional information, locations and hours of operation, please visit www.reliantbank.com.

Forward Looking Statements

All statements, other than statements of historical fact, included in this release and any oral statements made regarding the subject of this release, including in the conference call referenced herein, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to the ability to generate organic loan growth, brokered CD costs and acquisition opportunities. The words “believe,” “anticipate,” “expect,” “may,” “will,” “assume,” “should,” “predict,” “could,” “would,” “intend,” “targets,” “estimates,” “projects,” “plans,” and “potential,” and other similar words and expressions of the future, are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements about the Company’s future financial and operating results and the Company’s plans, objectives, and intentions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others: (1) the possibility that our asset quality could decline or that we experience greater loan losses than anticipated, (2) increased levels of other real estate, primarily as a result of foreclosures, (3) the impact of liquidity needs on our results of operations and financial condition, (4) competition from financial institutions and other financial service providers, (5) the effect of interest rate increases on the cost of deposits, (6) unanticipated weakness in loan demand or loan pricing, (7) lack of strategic growth opportunities or our failure to execute on those opportunities, (8) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (9) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, (10) our ability to effectively manage problem credits, (11) our ability to successfully implement efficiency initiatives on time and in amounts projected, (12) our ability to successfully develop and market new products and technology, (13) the impact of negative developments in the financial industry and U.S. and global capital and credit markets, (14) our ability to retain the services of key personnel, (15) our ability to adapt to technological changes, (16) risks associated with litigation, including the applicability of insurance coverage, (17) the vulnerability of the Bank’s network and online banking portals, and the systems of parties with whom the Company and the Bank contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss, and other security breaches, (18) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments, (19) adverse results (including costs, fines, reputational harm, and/or other negative effects) from current or future litigation, regulatory examinations, or other legal and/or regulatory actions, and (20) general competitive, economic, political, and market conditions, including economic conditions in the local markets where we operate. Additional factors which could affect the forward-looking statements can be found in the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website at http://www.sec.gov. The Company believes the forward-looking statements contained herein are reasonable; however, many of such risks, uncertainties, and other factors are beyond the Company’s ability to control or predict and undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. Therefore, the Company can give no assurance that its future results will be as estimated. The Company does not intend to, and disclaims any obligation to, update or revise any forward-looking statement.

 

RELIANT BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

June 30, 2019, March 31, 2019 and June 30, 2018

(Dollar Amounts in Thousands)

ASSETS

June 30,
2019

March 31,
2019

June 30,
2018

Unaudited

Unaudited

Unaudited

Cash and due from banks

$35,917

$34,796

$32,321

Federal funds sold

80

409

381

Total cash and cash equivalents

35,997

35,205

32,702

Securities available for sale

290,373

310,305

308,069

Loans, net of unearned income

1,312,685

1,262,160

1,142,459

Allowance for loan losses

(11,666

)

(11,354

)

(10,169

)

Loans, net

1,301,019

1,250,806

1,132,290

Mortgage loans held for sale, net

11,571

9,990

31,163

Accrued interest receivable

7,246

8,389

7,474

Premises and equipment, net

21,632

21,970

19,955

Restricted equity securities, at cost

11,488

11,499

11,677

Other real estate, net

1,848

1,000

2,060

Cash surrender value of life insurance contracts

46,068

45,791

44,927

Deferred tax assets, net

3,133

4,730

7,913

Goodwill

43,642

43,642

43,627

Core deposit intangibles

7,745

7,982

8,693

Other assets

12,486

10,617

9,108

TOTAL ASSETS

$1,794,248

$1,761,926

$1,659,658

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Deposits

Demand

$225,380

$220,966

$225,360

Interest-bearing demand

144,265

144,166

140,201

Savings and money market deposit accounts

368,764

398,366

352,724

Time

811,871

747,823

615,990

Total deposits

1,550,280

1,511,321

1,334,275

Accrued interest payable

967

990

801

Subordinated debentures

11,644

11,624

11,562

Federal Home Loan Bank advances

11,119

15,309

102,874

Dividends payable

1,008

1,035

919

Other liabilities

5,287

6,528

6,887

TOTAL LIABILITIES

1,580,305

1,546,807

1,457,318

STOCKHOLDERS’ EQUITY

Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued to date

Common stock, $1 par value; 30,000,000 shares authorized; 11,196,563, 11,502,285, and 11,482,965 shares issued and outstanding at June 30, 2019, March 31, 2019, and June 30, 2018, respectively

11,197

11,502

11,483

Additional paid-in capital

166,252

172,886

172,686

Retained earnings

33,349

30,119

21,090

Accumulated other comprehensive income (loss)

3,145

612

(2,919

)

TOTAL STOCKHOLDERS’ EQUITY

213,943

215,119

202,340

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$1,794,248

$1,761,926

$1,659,658

RELIANT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended

June 30,

2019

March 31,
2019

June 30,

2018

INTEREST INCOME

Interest and fees on loans

$16,960

$16,169

$14,066

Interest and fees on loans held for sale

198

153

326

Interest on investment securities, taxable

587

503

453

Interest on investment securities, nontaxable

1,650

1,718

1,708

Federal funds sold and other

297

300

277

TOTAL INTEREST INCOME

19,692

18,843

16,830

INTEREST EXPENSE

Deposits

Demand

86

111

84

Savings and money market

1,051

1,130

574

Time

4,369

3,571

2,199

Federal Home Loan Bank advances and other

175

377

397

Subordinated debentures

198

193

172

TOTAL INTEREST EXPENSE

5,879

5,382

3,426

NET INTEREST INCOME

13,813

13,461

13,404

PROVISION FOR LOAN LOSSES

200

300

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

13,613

13,461

13,104

NONINTEREST INCOME

Service charges on deposit accounts

936

884

900

Gains on mortgage loans sold, net

1,225

560

957

Gain on securities transactions, net

175

131

25

Gain on sale of other real estate

20

Other

362

363

352

TOTAL NONINTEREST INCOME

2,698

1,938

2,254

NONINTEREST EXPENSE

Salaries and employee benefits

7,706

7,265

6,613

Occupancy

1,358

1,352

1,210

Information technology

1,575

1,410

1,249

Advertising and public relations

275

254

141

Audit, legal and consulting

690

796

816

Federal deposit insurance

249

195

224

Merger expenses

1

2

2,483

Other operating

1,272

1,472

1,305

TOTAL NONINTEREST EXPENSE

13,126

12,746

14,041

INCOME BEFORE PROVISION FOR INCOME TAXES

3,185

2,653

1,317

INCOME TAX EXPENSE

501

372

115

CONSOLIDATED NET INCOME

2,684

2,281

1,202

NONCONTROLLING INTEREST IN NET LOSS OF SUBSIDIARY

1,555

1,543

937

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

$4,239

$3,824

$2,139

Basic net income attributable to common shareholders, per share

$0.38

$0.34

$0.19

Diluted net income attributable to common shareholders, per share

$0.38

$0.33

$0.19

RELIANT BANCORP, INC.

SEGMENT FINANCIAL INFORMATION

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands)

(Unaudited)

Core Bank

Three Months Ended

June 30,
2019

March 31,
2019

June 30,
2018

Net interest income

$

13,703

$

13,373

$

13,190

Provision for loan losses

200

300

Noninterest income

1,473

1,378

1,299

Noninterest expense (excluding merger expenses)

10,129

10,445

9,389

Merger expense

1

2

2,483

Income before provision for income taxes

4,846

4,304

2,317

Income tax expense

607

480

178

Net income attributable to common shareholders

$

4,239

$

3,824

$

2,139

Residential Mortgage Company

Three Months Ended

June 30,
2019

March 31,
2019

June 30,
2018

Net interest income

$

110

$

88

$

214

Provision for loan losses

Noninterest income

1,225

560

955

Noninterest expense

2,996

2,299

2,169

Loss before provision for income taxes

(1,661

)

(1,651

)

(1,000

)

Income tax benefit

(106

)

(108

)

(63

)

Net loss

(1,555

)

(1,543

)

(937

)

Noncontrolling interest in net loss of subsidiary

1,555

1,543

937

Net income attributable to common shareholders

$

$

$

The above financial information is presented, net of intercompany eliminations.

RELIANT BANCORP, INC.

SELECTED QUARTERLY FINANCIAL DATA

AT OR FOR THE STATED THREE MONTHS ENDED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

June 30,
2019

March 31,
2019

June 30,
2018

Per Common Share Data

Net income attributable to shareholders, per share

Basic

$

0.38

$

0.34

$

0.19

Diluted

$

0.38

$

0.33

$

0.19

Book value per common share

$

19.11

$

18.70

$

17.62

Basic weighted average common shares

11,196,898

11,405,438

11,396,829

Diluted weighted average common shares

11,286,627

11,487,145

11,495,233

Common shares outstanding at period end

11,196,563

11,502,285

11,482,965

Selected Balance Sheet Data

Loans held for investment

$

1,276,197

$

1,238,341

$

1,119,884

Average earning assets (1)

1,633,903

1,590,342

1,492,007

Total assets

1,773,026

1,731,177

1,629,714

Average stockholders’ equity

212,648

209,461

202,305

Selected Asset Quality Measures

Nonaccrual loans

$

3,045

$

4,582

$

4,360

90+ days past due still accruing

22

566

51

Total nonperforming loans

3,067

5,148

4,411

Total nonperforming assets (2)

4,915

6,148

6,471

Net charge offs (recoveries)

(112

)

(462

)

(139

)

Nonperforming loans to total loans

0.23

%

0.41

%

0.39

%

Nonperforming assets to total assets

0.27

%

0.35

%

0.39

%

Nonperforming assets to total loans and other real estate

0.37

%

0.49

%

0.57

%

Allowance for loan losses to total loans

0.89

%

0.90

%

0.89

%

Allowance for loan losses to nonperforming loans

380.37

%

220.55

%

230.54

%

Net charge offs (recoveries) to average loans (3)

(0.04

)%

(0.15

)%

(0.05

)%

Capital Ratios (Bank Subsidiary Only)(4)

Tier 1 leverage

9.58

%

9.99

%

9.98

%

Common equity tier 1

11.48

%

12.07

%

12.14

%

Total risk-based capital

12.33

%

12.92

%

12.96

%

Selected Performance Ratios (3)

Return on average:

Assets

0.96

%

0.88

%

0.53

%

Shareholders’ equity

7.97

%

7.30

%

4.23

%

Net interest margin (tax-equivalent basis)

3.57

%

3.63

%

3.74

%

(1) Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, investment securities and restricted equity securities.

(2) Nonperforming assets consist of nonperforming loans (excluding troubled debt restructurings) and other real estate.

(3) Data has been annualized.

(4) Current quarter capital ratios are estimated.

RELIANT BANCORP, INC.

YIELD TABLES

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands)

(Unaudited)

The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest-earning assets and interest-bearing liabilities and the average interest rate for interest-earning assets and interest-bearing liabilities, net interest spread and net interest margin for the periods indicated below:

Three Months Ended June 30, 2019

Three Months Ended March 31, 2019

Three Months Ended June 30, 2018

Average

Balances

Rates /

Yields

(%)

Interest

Income /

Expense

Average

Balances

Rates /

Yields

(%)

Interest

Income /

Expense

Average

Balances

Rates /

Yields

(%)

Interest

Income /

Expense

Interest earning assets

Loans

$

1,276,197

5.18

$

16,178

$

1,238,341

5.16

$

15,463

$

1,119,884

4.81

$

13,393

Loan fees

0.25

782

0.23

706

0.24

673

Loans with fees

1,276,197

5.43

16,960

1,238,341

5.39

16,169

1,119,884

5.05

14,066

Mortgage loans held for sale

14,502

5.48

198

10,747

5.77

153

24,611

5.31

326

Deposits with banks

30,342

1.53

116

27,643

1.73

118

36,550

1.21

110

Investment securities – taxable

77,405

3.04

587

72,464

2.82

503

67,647

2.69

453

Investment securities – tax-exempt

222,149

3.77

1,650

228,497

3.86

1,718

231,874

3.75

1,708

Federal funds sold and other

13,308

5.46

181

12,650

5.83

182

11,441

5.85

167

Total earning assets

1,633,903

5.02

19,692

1,590,342

5.00

18,843

1,492,007

4.66

16,830

Nonearning assets

139,123

140,835

137,707

Total assets

$

1,773,026

$

1,731,177

$

1,629,714

Interest bearing liabilities

Interest bearing demand

$

141,997

0.24

$

86

$

148,649

0.30

$

111

$

143,811

0.23

$

84

Savings and money market

374,406

1.13

1,051

400,328

1.14

1,130

357,475

0.64

574

Time deposits – retail

612,148

2.14

3,263

577,270

2.05

2,921

517,209

1.43

1,848

Time deposits – wholesale

169,956

2.61

1,106

106,625

2.47

650

92,197

1.53

351

Total interest bearing deposits

1,298,507

1.70

5,506

1,232,872

1.58

4,812

1,110,692

1.03

2,857

Federal Home Loan Bank advances

23,668

2.97

175

56,718

2.70

377

79,520

2.00

397

Subordinated debt

11,634

6.83

198

11,613

6.74

193

11,556

5.97

172

Total borrowed funds

35,302

4.24

373

68,331

3.38

570

91,076

2.51

569

Total interest-bearing liabilities

1,333,809

1.77

5,879

1,301,203

1.68

5,382

1,201,768

1.14

3,426

Net interest rate spread (%) / Net interest income ($)

3.25

13,813

3.32

13,461

3.52

13,404

Non-interest bearing deposits

218,512

(0.25

)

211,122

(0.24

)

219,860

(0.17

)

Other non-interest bearing liabilities

8,057

9,391

5,781

Stockholder’s equity

212,648

209,461

202,305

Total liabilities and stockholders’ equity

$

1,773,026

$

1,731,177

$

1,629,714

Cost of funds

1.52

1.44

0.97

Net interest margin

3.57

3.63

3.74

Yield Table Assumptions – Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis including a state tax credit included in loan yields of $300, $300, and $25, respectively, for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.

RELIANT BANCORP, INC.

NON-GAAP FINANCIAL MEASURES

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended

June 30,

2019

March 31,
2019

June 30,

2018

NON-GAAP FINANCIAL MEASURES

Adjusted net interest margin (1)

Tax equivalent net interest income (1)(2)

$

14,555

$

14,221

$

13,404

Purchase accounting adjustments

(448

)

(332

)

(326

)

Tax credits

(300

)

(300

)

(25

)

Adjusted net interest income

$

13,807

$

13,589

$

13,053

Adjusted net interest margin

3.39

%

3.47

%

3.65

%

Adjusted net income attributable to common shareholders and related impact (1)

Net income attributable to common shareholders

$

4,239

$

3,824

$

2,139

Purchase accounting adjustments

(195

)

(79

)

(73

)

Merger expenses

1

2

2,483

Pre-tax adjustments to net income

(194

)

(77

)

2,410

Tax effect of adjustments to net income

(51

)

(21

)

632

After tax adjustments to net income

$

(143

)

$

(56

)

$

1,778

Adjusted net income attributable to common shareholders

$

4,096

$

3,768

$

3,917

Adjusted return on average assets

0.92

%

0.87

%

0.96

%

Adjusted return on average stockholders’ equity

7.70

%

7.20

%

7.74

%

Adjusted net income attributable to common shareholders, per diluted share

$

0.36

$

0.33

$

0.34

Average tangible stockholders’ equity: (1)

Average stockholders’ equity

$

212,648

$

209,461

$

202,305

Less: average goodwill

43,642

43,642

43,467

Less: average core deposit intangibles

7,834

8,071

8,780

Net average tangible common equity

$

161,172

$

157,748

$

150,058

Return on average: (1)(3)

Tangible common equity (ROATCE)

10.52

%

9.70

%

5.70

%

Adjusted ROATCE

10.17

%

9.55

%

10.44

%

(1) Not a recognized measure under generally accepted accounting principles (GAAP).

(2) Amount includes tax equivalent adjustment to quantify the tax equivalent net interest income.

(3) Data has been annualized.

RELIANT BANCORP, INC.

NON-GAAP FINANCIAL MEASURES

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended

June 30,

2019

March 31,
2019

June 30,

2018

Tangible assets: (1)

Total assets

$

1,794,248

$

1,761,926

$

1,659,658

Less: goodwill

43,642

43,642

43,627

Less: core deposit intangibles

7,745

7,982

8,693

Net tangible assets

$

1,742,861

$

1,710,302

$

1,607,338

Tangible equity: (1)

Total stockholders’ equity

$

213,943

$

215,119

$

202,340

Less: goodwill

43,642

43,642

43,627

Less: core deposit intangibles

7,745

7,982

8,693

Net tangible common equity

$

162,556

$

163,495

$

150,020

Ratio of tangible common equity to tangible assets

9.33

%

9.56

%

9.33

%

Tangible book value per common share (TBVPS): (1)

Net tangible equity

$

162,556

$

163,495

$

150,020

Common shares outstanding

11,196,563

11,502,285

11,482,965

TBVPS

$

14.52

$

14.21

$

13.06

Efficiency ratio (core bank segment only excluding mortgage segment)(1)

Non-interest expense

$

10,129

$

10,445

$

9,389

Net interest income

13,703

13,373

13,190

Tax equivalent adjustment for tax exempt

interest income

742

760

490

Non-interest income

1,473

1,378

1,299

Less gain on sale of other real estate

(20

)

Less gain on sale of securities

(175

)

(131

)

(25

)

Adjusted operating income

$

15,743

$

15,380

$

14,934

Efficiency Ratio

64.34

%

67.91

%

62.87

%

Adjusted loan loss reserve: (1)

Allowance for loan losses

$

11,666

$

11,354

$

10,169

Purchase loan discounts

3,688

4,117

6,127

Loan loss reserve and purchase loan discounts

$

15,354

$

15,471

$

16,296

Allowance for loan losses and purchase loan discounts to total loans

1.17

%

1.23

%

1.43

%

(1) Not a recognized measure under generally accepted accounting principles (GAAP).

 

View source version on businesswire.comhttps://www.businesswire.com/news/home/20190723005840/en/

DeVan Ard, Jr., Chairman, President and CEO, Reliant Bancorp, Inc. (615.221.2020)

Source: Reliant Bancorp, Inc.

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