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Reliant Bancorp, Inc. Reports Results for Fourth Quarter 2019

Reported Diluted EPS of $0.37 / Adjusted Diluted EPS of $0.47

Loan Growth at 17.6% (annualized) / Core Deposit Growth at 7.5% (annualized)

Announced Definitive Agreement to Acquire First Advantage Bank

Closed on $60 Million Subordinated Debt Offering

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 available to common shareholders of $4.1 million, or $0.37 per diluted common share for the fourth quarter of 2019 and net income available to common shareholders of $16.2 million, or $1.44 per common diluted share, for the year ended December 31, 2019, compared to $4.1 million, or $0.36 per diluted common share, for the fourth quarter of 2018 and net income available to common shareholders of $14.1 million, or $1.23 per common diluted share, for the year ended December 31, 2018. Excluding merger-related expense, the Company reported net income available to common shareholders of $5.3 million, or $0.47 per diluted common share, for the fourth quarter of 2019 compared to $4.1 million, or $0.36 per diluted common share, for the fourth quarter of 2018 (“non-GAAP”).

DeVan Ard, Jr., Reliant Bancorp’s Chairman, President and CEO stated, “This was a transformational quarter for our company. We announced a definitive agreement to acquire First Advantage Bancorp headquartered in Clarksville, Tennessee, successfully closed on a $60 million subordinated debt offering, and completed the previously announced acquisition of Community Bank & Trust.”

Ard continued, “Our team delivered another outstanding quarter. Loan production exceeded $216 million, providing good momentum as we start 2020, and customer deposits increased by $77 million, a 28% annualized growth rate. These results reflect the quality of our bankers, the attractiveness of our franchise and the continued strength of our Middle Tennessee and Chattanooga markets.”

Quarterly Highlights

Consistent, Sustainable Growth Driven by Strong, In-Market Relationships and Strategic Acquisitions

Loans-held-for-investment increased $59.3 million, or 17.6%, annualized, linked quarter, and by $178.9 million, or 14.5% year-over-year. Fourth quarter 2019 loan production totaled a franchise record of $216.7 million at a weighted average rate of 4.7%.

Total deposits decreased $26.8 million, or 6.7%, annualized, linked quarter, but increased $145.9 million, or 10.1%, year-over-year. The linked quarter decrease primarily was due to a $101.6 million reduction in wholesale funding. Core deposits increased $17.6 million, or 7.5%, linked quarter and $72.5 million, or 8.2%, year-over-year and customer deposits (excludes all wholesale funding) increased by $76.7 million, or 27.5% annualized, linked quarter, and $123.3 million, or 11.5% year-over-year. Ard continued, “The success we’ve experienced sourcing low cost, core deposits provides significant value to our franchise and will continue to be a strategic focus for our bankers in 2020, allowing us to continue reducing wholesale funding levels and our cost of funds.”

On October 23, 2019, the Company announced a definitive agreement to acquire First Advantage Bancorp (“FABK”), the parent of First Advantage Bank, headquartered in Clarksville, Tennessee. As of December 31, 2019, FABK reported approximately $738.0 million of total assets, approximately $646.4 million of loans-held-for-investment and approximately $610.9 million of deposits. The FABK acquisition is expected to close in the second quarter of 2020.

On January 2, 2020, the Company announced the completion of the acquisition of Tennessee Community Bank Holdings, Inc., (“TCB”) the parent of Community Bank & Trust (“CBT”), headquartered in Ashland City, Tennessee. At December 31, 2019, CBT reported approximately $252.9 million of total assets, approximately $174.0 million of loans-held-for-investment and approximately $210.1 million of deposits.

On a pro forma basis, the combined companies would have reported total assets of approximately $2.9 billion, loans-held-for-investment of approximately $2.2 billion and deposits of approximately $2.4 billion as of December 31, 2019.

Focus on Stabilizing Net Interest Margin Through Asset Mix Optimization and Pricing Discipline

Net interest margin declined 5 basis points from the linked quarter to 3.46%. The $60 million subordinated debt offering, which closed on December 13, 2019, accounted for 4 basis points of fourth quarter margin contraction and increased fourth quarter cost of funds by 4 basis points. Our yield on earning assets declined by 16 basis point linked quarter, as 45.8% of loans and 21.2% of bonds carry variable interest rates. Loans-held-for-investment were down 11 basis points and securities were down 17 basis points, due partly to our bond rotation strategy and some accelerated premium amortization experienced during the quarter. Our cost of funds decreased 11 basis points, linked quarter, as competition supported higher interest rates on customer deposits even as the cost of wholesale funding decreased by 25 basis points.

Ard stated, “We continued our strategy of optimizing earning asset mix by reducing the securities portfolio by another $37 million and using the proceeds to fund loan growth, picking up between 110 and 120 basis points of yield on the rotation. Securities accounted for 16.5% of average earning assets at the end of the fourth quarter, down from 18.9% in December 2018. We expect that securities will continue to decline as a percentage of earning assets and are targeting 10% to 12% in 2020.”

Asset Quality Remains a Hallmark of the Franchise

Credit quality remained strong, as nonperforming loans accounted for 0.29% of total loans-held-for-investment and nonperforming assets accounted for 0.26% of total assets at December 31, 2019. Loans past due 89 days or less accounted for 0.06% of total loans-held-for-investment. Additionally, the Company disposed of two of the three remaining other real estate properties realizing a $166,000 gain and disposed of the remaining property in January 2020. The loan loss reserve was 0.89% of loans-held-for-investment at December 31, 2019 (1.10% when unamortized purchased loan discounts are included), down 2 basis points from September 30, 2019. Provision for loan losses of $405,000 was realized during the fourth quarter of 2019. Net charge-offs for the quarter accounted for 0.03% of total loans-held-for-investment. For the year, the Company recorded net recoveries of $475,000, or 0.03% of total loans-held-for-investment.

Financial Strength Positions Company for Growth and Creates Shareholder Value

Stockholders’ equity increased by $4.1 million linked quarter, or 7.4% percent annualized, to $223.8 million at December 31, 2019. Both the Company and Bank continue to meet the criteria to be classified as “Well Capitalized” financial institutions under applicable banking regulations. The Company closed on a $60 million subordinated debt offering on December 13, 2019. The debt carries a fixed coupon of 5.125% for the first five years with a floating coupon rate for the final five years. The Company declared a dividend of $0.10 per share on January 22, 2020, payable on February 14, 2020, a 11.1% increase over the dividend paid for the fourth quarter of 2018, marking the nineteenth consecutive quarter in which a dividend has been declared.

Book value per share increased by $0.35, or 7.1% annualized, to $19.97 linked quarter and by $1.90 or 10.5% year-over-year. Tangible book value per share (“TBVPS”) (non-GAAP) increased by $0.37, or 9.8% annualized, to $15.42 linked quarter and by $1.84, or 13.5%, year-over-year.

Conclusion

Ard concluded, “I am proud of what our team accomplished during the fourth quarter and throughout 2019. We are transforming our balance sheet and market footprint through two strategic acquisitions, continuing to deliver balanced and profitable growth and staying focused on building the core franchise to support a profitable future. I want to thank our team for their dedication and hard work in 2019, and I am very optimistic about the future of our Company as we enter into a new year.”

Conference Call Information

The Company will hold a conference call to discuss fourth quarter 2019 results on Friday, January 24, 2020, at 9:00 a.m. CST, and the earnings conference call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1855/32672. 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 Cheatham, Davidson, Hamilton, Hickman, Maury, Montgomery, 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 December 31, 2019, Reliant Bancorp had approximately $1.9 billion in total consolidated assets, approximately $1.4 billion in loans and approximately $1.6 billion in deposits. For additional information, locations and hours of operation, please visit www.reliantbank.com.

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.

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 benefits of a strategic acquisition, the bond portfolio and non-core funding, future balance sheet growth 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, (20) the risk that expected cost savings and revenue synergies from (i) the merger of the Company and TCB (the “TCB Holdings Transaction”) or (ii) the proposed merger between the Company and FABK (the “First Advantage Transaction” and, together with the TCB Holdings Transaction, collectively, the “Transactions”), may not be realized or may take longer than anticipated to be realized, (21) the ability to meet expectations regarding the timing and completion of the First Advantage Transaction and the accounting and tax treatment of the Transactions, (22) the effect of the announcement, pendency, or completion of the Transactions on customer, supplier, or employee relationships and operating results (including without limitation difficulties in maintaining relationships with employees and customers), as well as on the market price of the Company’s common stock, (23) the risk that the businesses and operations of TCB and its subsidiaries and of FABK and its subsidiaries cannot be successfully integrated with the business and operations of the Company and its subsidiaries or that integration will be more costly or difficult than expected, (24) the occurrence of any event, change, or other circumstances that could give rise to the termination of the definitive merger agreement for the First Advantage Transaction, (25) the amount of costs, fees, expenses, and charges related to the Transactions, including those arising as a result of unexpected factors or events, (26) the ability to obtain the shareholder and governmental approvals required for the First Advantage Transaction, (27) reputational risk associated with and the reaction of the parties’ customers, suppliers, employees, or other business partners to the Transactions, (28) the failure of any of the conditions to the closing of the First Advantage Transaction to be satisfied, or any unexpected delay in closing the First Advantage Transaction, (29) the dilution caused by the Company’s issuance of additional shares of its common stock in the Transactions, (30) the Company’s ability to simultaneously execute on two separate business combination transactions, (31) the risk associated with Company management’s attention being diverted away from the day-to-day business and operations of the Company to the completion of the Transactions, and (32) 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

DECEMBER 31, 2019, SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

(Dollar Amounts in Thousands)

ASSETS

December 31,
2019

September 30,
2019

December 31,
2018

Unaudited

Unaudited

Audited

Cash and due from banks

$

50,990

$

51,247

$

34,807

Federal funds sold

52

73

371

Total cash and cash equivalents

51,042

51,320

35,178

Securities available for sale

260,293

297,310

296,323

Loans, net of unearned income

1,409,952

1,350,683

1,231,076

Allowance for loan losses

(12,578

)

(12,291

)

(10,892

)

Loans, net

1,397,374

1,338,392

1,220,184

Mortgage loans held for sale, net

37,476

16,757

15,823

Accrued interest receivable

7,111

7,488

8,214

Premises and equipment, net

21,376

21,390

22,033

Restricted equity securities, at cost

11,279

11,279

11,690

Other real estate, net

750

1,943

1,000

Cash surrender value of life insurance contracts

46,632

46,351

45,513

Deferred tax assets, net

3,933

456

7,428

Goodwill

43,642

43,642

43,642

Core deposit intangibles

7,270

7,507

8,219

Other assets

10,289

8,652

9,091

TOTAL ASSETS

$

1,898,467

$

1,852,487

$

1,724,338

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Deposits

Demand

$

260,073

$

237,917

$

216,937

Interest-bearing demand

152,718

149,442

154,218

Savings and money market deposit accounts

408,724

397,243

401,308

Time

762,274

826,031

665,440

Total deposits

1,583,789

1,610,633

1,437,903

Accrued interest payable

2,022

1,610

1,063

Subordinated debentures

70,883

11,665

11,603

Federal Home Loan Bank advances

10,737

3,928

57,498

Dividends payable

76

1,012

1,036

Other liabilities

7,207

3,987

6,821

TOTAL LIABILITIES

1,674,714

1,632,835

1,515,924

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; 11,206,254, 11,195,062 and 11,530,810 shares issued and outstanding at December 31, 2019, September 30, 2019, and December 31, 2018, respectively

11,206

11,195

11,531

Additional paid-in capital

167,006

166,512

173,238

Retained earnings

40,472

36,339

27,329

Accumulated other comprehensive loss

5,069

5,606

(3,684

)

TOTAL STOCKHOLDERS’ EQUITY

223,753

219,652

208,414

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

1,898,467

1,852,487

1,724,338

RELIANT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended

YTD

December 31,
2019

September 30,
2019

December 31,
2018

December 31,
2019

December 31,
2018

INTEREST INCOME

Interest and fees on loans

$

17,790

$

17,502

$

15,854

$

68,421

$

58,351

Interest and fees on loans held for sale

347

263

177

961

1,278

Interest on investment securities, taxable

460

549

462

2,099

1,836

Interest on investment securities, nontaxable

1,508

1,576

1,684

6,452

6,605

Federal funds sold and other

334

321

286

1,252

1,155

TOTAL INTEREST INCOME

20,439

20,211

18,463

79,185

69,225

INTEREST EXPENSE

Deposits

Demand

106

81

103

384

366

Savings and money market

1,000

973

880

4,154

2,589

Time

4,509

4,828

3,125

17,361

9,862

Federal Home Loan Bank advances and other

9

66

580

543

1,855

Subordinated debentures

348

199

198

938

724

TOTAL INTEREST EXPENSE

5,972

6,147

4,886

23,380

15,396

NET INTEREST INCOME

14,467

14,064

13,577

55,805

53,829

PROVISION FOR LOAN LOSSES

405

606

276

1,211

1,035

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

14,062

13,458

13,301

54,594

52,794

NONINTEREST INCOME

Service charges on deposit accounts

950

976

915

3,746

3,419

Gains on mortgage loans sold, net

1,735

1,385

357

4,905

4,418

Gain on securities transactions, net

1,145

1,451

43

Gain on sale of other real estate

166

166

259

Gain (loss) on disposal of premises and equipment

(3

)

13

Other

572

399

355

1,696

1,494

TOTAL NONINTEREST INCOME

4,568

2,760

1,624

11,964

9,646

NONINTEREST EXPENSE

Salaries and employee benefits

7,909

7,634

7,030

30,514

27,510

Occupancy

1,354

1,359

1,276

5,423

4,949

Information technology

1,675

1,553

1,420

6,213

5,333

Advertising and public relations

377

387

187

1,293

600

Audit, legal and consulting

466

350

949

2,302

2,976

Federal deposit insurance

257

(96

)

163

605

793

Provision for losses on other real estate

98

98

Merger expenses

1,301

299

32

1,603

2,774

Other operating

1,536

1,561

1,139

5,841

5,626

TOTAL NONINTEREST EXPENSE

14,973

13,047

12,196

53,892

50,561

INCOME BEFORE PROVISION FOR INCOME TAXES

3,657

3,171

2,729

12,666

11,879

INCOME TAX EXPENSE

699

557

(59

)

2,129

1,372

CONSOLIDATED NET INCOME

2,958

2,614

2,788

10,537

10,507

NONCONTROLLING INTEREST IN NET LOSS OF SUBSIDIARY

1,175

1,386

1,335

5,659

3,578

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

4,133

$

4,000

$

4,123

$

16,196

$

14,085

Basic net income attributable to common shareholders, per share

$

0.37

$

0.36

$

0.36

$

1.44

$

1.24

Diluted net income attributable to common shareholders, per share

$

0.37

$

0.36

$

0.36

$

1.44

$

1.23

RELIANT BANCORP, INC.

SEGMENT FINANCIAL INFORMATION

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands)

(Unaudited)

Retail Banking

Three Months Ended

Year Ended

December 31,
2019

September 30,
2019

December 31,
2018

December 31,
2019

December 31,
2018

Net interest income

$

14,266

$

13,910

$

13,479

$

55,252

$

53,008

Provision for loan losses

405

606

276

1,211

1,035

Noninterest income

2,833

1,375

1,266

7,059

5,232

Noninterest expense (excluding merger expenses)

10,479

9,726

10,284

40,779

38,738

Merger expenses

1,301

299

32

1,603

2,774

Income before provision for income taxes

4,914

4,654

4,153

18,718

15,693

Income tax expense

781

654

30

2,522

1,608

Net income attributable to common shareholders

$

4,133

$

4,000

$

4,123

$

16,196

$

14,085

Residential Mortgage Banking

Three Months Ended

Year Ended

December 31,
2019

September 30,
2019

December 31,
2018

December 31,
2019

December 31,
2018

Net interest income

$

201

$

154

$

98

$

553

$

821

Provision for loan losses

Noninterest income

1,735

1,385

358

4,905

4,414

Noninterest expense

3,193

3,022

1,880

11,510

9,049

Loss before provision for income taxes

(1,257

)

(1,483

)

(1,424

)

(6,052

)

(3,814

)

Income tax benefit

(82

)

(97

)

(89

)

(393

)

(236

)

Net loss

(1,175

)

(1,386

)

(1,335

)

(5,659

)

(3,578

)

Noncontrolling interest in net loss of subsidiary

1,175

1,386

1,335

5,659

3,578

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 THREE MONTHS ENDED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

December 31,
2019

September 30,
2019

December 31,
2018

Per Common Share Data

Net income attributable to shareholders, per share

Basic

$

0.37

$

0.36

$

0.36

Diluted

$

0.37

$

0.36

$

0.36

Book value per common share

$

19.97

$

19.62

$

18.07

Basic weighted average common shares

11,105,912

11,104,918

11,420,432

Diluted weighted average common shares

11,189,302

11,177,367

11,501,758

Common shares outstanding at period end

11,206,254

11,195,062

11,530,810

Selected Balance Sheet Data

Loans, net of unearned income

$

1,409,952

$

1,350,683

$

1,231,076

Total assets

1,898,467

1,852,487

1,724,338

Customer deposits

1,192,500

1,117,718

1,069,203

Wholesale and other purchased funds

391,289

492,915

368,700

Total deposits

1,583,789

1,610,633

1,437,903

Total liabilities

1,674,714

1,632,835

1,515,924

Total stockholders’ equity

223,753

219,652

208,414

Total liabilities and stockholders’ equity

1,898,467

1,852,487

1,724,338

Selected Balance Sheet Data – Quarterly Average

Loans held for investment

1,368,338

1,312,153

1,201,866

Earnings assets(1)

1,746,678

1,669,482

1,548,083

Total assets

1,883,723

1,806,455

1,689,668

Interest-bearing liabilities

1,406,116

1,354,451

1,258,235

Total liabilities

1,663,156

1,589,368

1,484,039

Total stockholder’s equity

220,567

217,087

205,629

Total liabilities and stockholder’s equity

1,883,723

1,806,455

1,689,668

Selected Asset Quality Measures

Nonaccrual loans

$

4,071

$

4,380

$

4,194

90+ days past due still accruing

64

121

6

Total nonperforming loans

4,135

4,501

4,200

Total nonperforming assets (2)

4,885

6,444

5,200

Net charge offs (recoveries)

118

(19

)

82

Nonperforming loans to total loans

0.29

%

0.33

%

0.34

%

Nonperforming assets to total assets

0.26

%

0.35

%

0.30

%

Nonperforming assets to total loans and other real estate

0.35

%

0.48

%

0.42

%

Unamortized purchase credit discounts

2,909

3,326

4,525

Allowance for loan losses to total loans

0.89

%

0.91

%

0.88

%

Allowance for loan losses to nonperforming loans

304.18

%

273.07

%

259.33

%

Allowance for loan losses and purchase loan discounts to total loans

1.10

%

1.16

%

1.25

%

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

0.03

%

(0.01

)%

0.03

%

Capital Ratios (Bank Subsidiary Only)(5)

Tier 1 leverage

10.29

%

9.55

%

10.17

%

Common equity tier 1

12.80

%

11.29

%

12.19

%

Total risk-based capital

13.69

%

12.15

%

13.02

%

Selected Performance Ratios (3) (4)

Return on average assets (ROA)

0.88

%

0.89

%

0.98

%

Return on average stockholders’ equity (ROE)

7.50

%

7.37

%

8.02

%

Net interest margin (tax-equivalent basis)

3.46

%

3.51

%

3.82

%

(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
December 31, 2019

Three Months Ended
September 30, 2019

Three Months Ended
December 31, 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

$

1,368,338

5.01

$

17,263

$

1,312,153

5.12

$

16,934

$

1,201,866

5.28

$

16,007

Loan fees

0.26

895

0.26

870

0.24

718

Loans with fees

1,368,338

5.27

18,158

1,312,153

5.38

17,804

1,201,866

5.52

16,725

Mortgage loans held for sale

29,127

4.73

347

18,271

5.71

263

13,744

5.11

177

Deposits with banks

47,816

1.54

186

33,410

1.96

165

27,581

1.44

100

Investment securities – taxable

73,891

2.47

460

73,115

2.98

549

69,855

2.62

462

Investment securities – tax-exempt

214,283

3.55

1,918

220,233

3.60

1,999

222,598

3.81

2,135

Federal funds sold and other

13,223

4.44

148

12,300

5.03

156

12,439

5.93

186

Total earning assets

1,746,678

4.82

21,217

1,669,482

4.98

20,937

1,548,083

5.07

19,785

Nonearning assets

137,045

136,973

141,585

Total assets

$

1,883,723

$

1,806,455

$

1,689,668

Interest bearing liabilities

Interest bearing demand

$

152,723

0.28

$

106

$

142,702

0.23

$

81

$

145,810

0.28

$

103

Savings and money market

383,013

1.04

1,000

350,440

1.10

973

358,300

0.97

880

Time deposits – retail

508,473

2.03

2,599

540,688

2.17

2,956

564,610

1.84

2,624

Time deposits – wholesale

333,471

2.27

1,910

294,750

2.52

1,872

87,671

2.27

501

Total interest bearing deposits

1,377,680

1.62

5,615

1,328,580

1.76

5,882

1,156,391

1.41

4,108

Federal Home Loan Bank advances

4,530

0.79

9

14,216

1.84

66

90,247

2.55

580

Subordinated debt

23,906

5.78

348

11,655

6.77

199

11597

6.77

198

Total borrowed funds

28,436

4.98

357

25,871

4.06

265

101,844

3.03

778

Total interest-bearing liabilities

1,406,116

1.69

5,972

1,354,451

1.80

6,147

1,258,235

1.54

4,886

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

3.13

15,245

3.18

14,790

3.53

14,899

Non-interest bearing deposits

250,217

(0.26

)

227,502

(0.26

)

221,564

(0.23

)

Other non-interest bearing liabilities

6,823

7,415

4,240

Stockholder’s equity

220,567

217,087

205,629

Total liabilities and stockholders’ equity

$

1,883,723

$

1,806,455

$

1,689,668

Cost of funds

1.43

1.54

1.31

Net interest margin

3.46

3.51

3.82

Yield Table Assumptions – Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. 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

December 31,
2019

September 30,
2019

December 31,
2018

NON-GAAP FINANCIAL MEASURES

Adjusted net interest margin (1)

Tax equivalent net interest income (1)(2)

$

15,245

$

14,790

$

14,899

Purchase accounting adjustments

(622

)

(383

)

(456

)

Tax credits

(366

)

(300

)

(868

)

Adjusted net interest income

$

14,257

$

14,107

$

13,575

Adjusted net interest margin

3.23

%

3.35

%

3.48

%

Adjusted net income attributable to common shareholders and Related Impact (1)

Net income attributable to common shareholders

$

4,133

$

4,000

$

4,123

Merger expenses

1,301

299

32

Pre-tax adjustments to net income

1,301

299

32

Tax effect of adjustments to net income

173

27

6

After tax adjustments to net income

$

1,128

$

272

$

26

Adjusted net income attributable to common shareholders

$

5,261

$

4,272

$

4,149

Adjusted return on average assets (3)

1.12

%

0.95

%

0.98

%

Adjusted return on average stockholders’ equity (3)

9.54

%

7.87

%

8.07

%

Adjusted net income attributable to common

shareholders, per diluted share

$

0.47

$

0.38

$

0.36

Average tangible stockholders’ equity: (1)

Average stockholders’ equity

$

220,567

$

217,087

$

205,629

Less: average goodwill

43,642

43,642

43,632

Less: average core deposit intangibles

7,364

7,598

8,306

Net average tangible common equity

169,561

165,847

153,691

Return on average tangible common equity (ROATCE)

9.75

%

9.65

%

10.73

%

Adjusted ROATCE

12.41

%

10.30

%

10.80

%

(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

December 31,
2019

September 30,
2019

December 31,
2018

Tangible assets: (1)

Total assets

$

1,898,467

$

1,852,487

$

1,724,338

Less: goodwill

43,642

43,642

43,642

Less: core deposit intangibles

7,270

7,507

8,219

Net tangible assets

$

1,847,555

$

1,801,338

$

1,672,477

Tangible equity: (1)

Total stockholders’ equity

$

223,753

$

219,652

$

208,414

Less: goodwill

43,642

43,642

43,642

Less: core deposit intangibles

7,270

7,507

8,219

Net tangible common equity

$

172,841

$

168,503

$

156,553

Ratio of tangible common equity to tangible assets

9.36

%

9.35

%

9.36

%

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

Net tangible equity

$

172,841

$

168,503

$

156,553

Common shares outstanding

11,206,254

11,195,062

11,530,810

TBVPS

15.42

15.05

13.58

Core bank efficiency ratio (excludes mortgage segment and merger expense)(1)

Non-interest expense

$

10,479

$

9,726

$

10,284

Net interest income

14,266

13,910

13,479

Tax equivalent adjustment for tax exempt interest income

778

726

1,322

Non-interest income

2,833

1,375

1,266

Less gain on sale of other real estate

(166

)

Less gain on sale of securities

(1,145

)

Add loss (less gain) on disposal of premises and equipment

3

Adjusted operating income

$

16,566

$

16,011

$

16,070

Efficiency Ratio

63.26

%

60.75

%

63.99

%

Adjusted loan loss reserve: (1)

Allowance for loan losses

$

12,578

$

12,291

$

10,892

Purchase loan discounts

2,909

3,326

4,525

Loan loss reserve and purchase loan discounts

$

15,487

$

15,617

$

15,417

Allowance for loan losses and purchase loan discounts to total loans

1.10

%

1.16

%

1.25

%

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

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

Source: Reliant Bancorp, Inc.

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