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Reliant Bancorp, Inc. Reports Results for First Quarter 2020

Reported Diluted EPS ($0.02) / Adjusted Diluted EPS of $0.25

3.61% Net Interest Margin / 15 Basis Points of Expansion

Strong Capital and Liquidity Positions to Weather Adverse Operating Environments

Completed Acquisition of Community Bank & Trust

Closed Acquisition of First Advantage Bancorp on April 1, 2020

BRENTWOOD, Tenn.–(BUSINESS WIRE)– For the table titled SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED, first column for the line item labeled Tier 1 leverage should be 10.58% (instead of 10.98%).

The corrected release reads:

RELIANT BANCORP, INC. REPORTS RESULTS FOR FIRST QUARTER 2020

Reported Diluted EPS ($0.02) / Adjusted Diluted EPS of $0.25

3.61% Net Interest Margin / 15 Basis Points of Expansion

Strong Capital and Liquidity Positions to Weather Adverse Operating Environments

Completed Acquisition of Community Bank & Trust

Closed Acquisition of First Advantage Bancorp on April 1, 2020

Reliant Bancorp, Inc. (“Reliant Bancorp” or the “Company”) (Nasdaq: RBNC), the parent company for Reliant Bank (“Reliant” or the “Bank”), reported a net loss attributable to common shareholders of $215 thousand, or ($0.02) per diluted common share for the first quarter of 2020 compared to net income available to common shareholders of $3.8 million, or $0.33 per diluted common share, for the first quarter of 2019. First quarter 2020 results included $4.2 million in merger related expenses and an increase in the provision for loan losses to $2.9 million, with $2.0 million of the increase related to risk factors related to the COVID-19 pandemic. Excluding merger related expense, the Company reported net income available to common shareholders of $2.9 million, or $0.25 per diluted common share, for the first quarter of 2020 (“non-GAAP”).

DeVan Ard, Jr., Reliant Bancorp’s Chairman, President and CEO stated, “During these challenging times, our board of directors and leadership team are committed to taking all necessary steps to protect our employees and customers and to help meet the needs of the communities we serve. We believe we have implemented appropriate safety measures for our team to continue to serve our community, and we are actively participating in programs established to provide financial relief to our valued customers. I am proud that our Company’s financial strength allows us to serve and extend credit during this unprecedented time of need. We will continue to make loans to highly qualified borrowers and our credit team will continue to monitor our loan portfolio and market conditions so that we can make the best possible credit decisions.”

Ard continued, “Financially, this was a very successful quarter for Reliant. We grew net interest income by 18% to a record $17.1 million and our net interest margin expanded by 15 basis points to 3.61%. Loan production was robust in the first quarter, a reflection of the strong economies in Nashville and Chattanooga. Our team of seasoned bankers generated $150 million in new loans, a 29% increase over the first quarter of 2019, and we saw growth in all of our markets. We grew core deposits organically and through our successful acquisition of Community Bank & Trust (CBT), which allowed us to reduce wholesale deposits and lower our cost of funds. We increased our reserve for loan losses during the first quarter with a $2.9 million provision, of which $2.0 million is directly attributable to COVID-19 related risk factors, bringing our ratio of reserve and purchase loan discounts to total loans to 1.22%. We enter the second quarter with the tailwinds from two successful mergers and a strong balance sheet position. The COVID-19 pandemic has caused tremendous damage to the global economy and global citizens, but our Reliant franchise remains strong.”

Quarterly Highlights

Maintaining A Track Record of Superior Credit Quality

Credit quality remains strong. Nonperforming loans accounted for 0.25% of total loans-held-for-investment and nonperforming assets accounted for 0.19% of total assets at March 31, 2020, a decline in both metrics from December 31, 2019. The loan loss reserve was 0.93% of loans held for investment at March 31, 2020 (1.22% including unamortized purchased loan discounts), up 4 basis points from December 31, 2019. Provision for loan losses of $2.9 million was realized during the first quarter of 2020. Approximately $2.0 million of the increase is related to risk factors created by the COVID-19 pandemic, such as the weakening in both national and local economies, as we moved into the second quarter. Please note, our Company is not required to adopt current expected credit loss requirements until 2023 and remains on the incurred loss model for calculating allowance for loan loss. On an annualized basis, net charge-offs for the quarter accounted for 0.09% of total loans-held-for-investment.

Ard stated, “We believe our disciplined approach to lending and our emphasis on credit quality should position us well to weather a challenging environment.”

Financial Strength Positions Company for Future

Stockholders’ equity increased by $10.9 million linked quarter to $235.7 million at March 31, 2020. The linked-quarter increase is primarily due to the acquisition of Tennessee Community Bank Holdings, Inc., which increased capital by $18.0 million. First quarter capital was impacted by a $6.1 million decrease in other comprehensive income that resulted from an increase in the unrealized loss on the deposit hedge portfolio and a decrease in the unrealized gain in the investment portfolio. Both the Company and Bank continue to meet the criteria to be classified as “Well Capitalized” financial institutions under applicable banking regulations.

Ard continued, “Reliant entered the COVID-19 economy with a strong capital base. To preserve our financial strength during this challenging economic environment, we have suspended our stock repurchase program.”

Continuing to Deliver Growth Through Strong, In Market Relationships and Strategic Acquisitions

Loans-held-for-investment increased $209.8 million linked quarter, and by $357.5 million, or 28.3% year-over-year. Loans acquired from CBT totaled $173.1 million at March 31, 2020, and organic loan growth also stayed strong in the first quarter, increasing almost 10% on a linked-quarter-annualized basis. Though momentum was good through the middle of March and our pipeline is healthy, we anticipate a weakening in loan demand in the second quarter on signs of a sharp slowdown in the economy.

Total deposits increased by $138.7 million, linked quarter, and $211.1 million, or 14.0%, year-over-year, primarily driven by deposits acquired from CBT, which totaled $212.1 million at March 31, 2020. The Company improved its deposit mix during the quarter by reducing wholesale deposits by $45.8 million from the fourth quarter, and increasing relationship accounts – checking, savings and money market accounts – by $164.1 million.

On April 1, 2020, the Company announced the completion of the acquisition of First Advantage Bancorp (“FABK”) and its subsidiary First Advantage Bank (“FAB”), headquartered in Clarksville, Tennessee. As of March 31, 2020, FABK reported $738.0 million of total assets including $646.4 million of loans-held-for-investment and $610.9 million of deposits. Ard continued “We are actively engaged in merging FABK’s operations with Reliant and are excited about the addition of the First Advantage team. The expansion of our markets into Montgomery County (Clarksville) will augment our franchise growth for the foreseeable future.”

Driving Net Interest Margin Expansion Through Asset Mix Optimization and Pricing Discipline

Margin expansion, loan growth, and earning asset mix optimization combined to generate $17.1 million of net interest income, up $2.7 million, or 18.3% linked quarter, and $3.7 million, or 27.2% year-over-year. Net interest margin expanded to 3.61%, up 15 basis points from the linked quarter. Margin expansion was driven by a stabilization of yield on earning assets while cost of interest-bearing deposits declined by 25 basis points. Opportunities to lower deposit costs remain, and the Company plans to maintain short durations for wholesale funding sources. The Company continued to optimize its earning asset mix as loans-held-for-investment increased to 81.3% of average earning assets at March 31, 2020, up from 78.3% at December 31, 2019 and 77.9% at March 31, 2019.

Conclusion

Ard concluded, “While I am proud of our first quarter results, I am even more proud of how our team has stepped up during these difficult times and continued to serve each other, our customers and our community. While our working environment and routine may have changed, we remain focused on doing the right things. I believe we have the right team, the right approach, and the financial strength necessary to navigate the challenges ahead of us.”

Conference Call Information

The Company will hold a conference call to discuss first quarter 2020 results on Tuesday, April 28, 2020, 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/1855/33916. A link to these events and related presentation materials can be found on the Company’s website (https://www.reliantbank.com) under the tab titled “Investor Relations.”

Following the live broadcast, the webcast replay will be available on the Company’s website (https://www.reliantbank.com) under the tab titled “Investor Relations” followed by the tab titled “News & Market Information” followed by the tab titled “Event Calendar” followed by the tab titled “Past Events” and will be available for 12 months.

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 March 31, 2020, Reliant Bancorp had approximately $2.2 billion in total consolidated assets, approximately $1.6 billion in loans and approximately $1.7 billion in deposits. For additional information, locations and hours of operation, please visit www.reliantbank.com.

Financial Measures

This document contains non-GAAP (Generally Accepted Accounting Principles) 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,” “core bank efficiency ratio (excludes mortgage segment and merger expense),” 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 GAAP.

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 implementation of appropriate safety measures for our team to continue serving our communities, the Company’s capital and liquidity needs to weather adverse operating environments, our disciplined lending practices, the Company’s stock repurchase program, future dividend payments, weakened loan demand in the second quarter of 2020, market growth in Montgomery County, Tennessee, and the maintenance of short durations for wholesale funding sources. 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 global health and economic crisis precipitated by the coronavirus (COVID-19) pandemic, (2) actions taken by governments, businesses and individuals in response to the coronavirus (COVID-19) pandemic, (3) the pace of recovery when the coronavirus (COVID-19) pandemic subsides, (4) the possibility that our asset quality could decline or that we experience greater loan losses than anticipated, (5) increased levels of other real estate, primarily as a result of foreclosures, (6) the impact of liquidity needs on our results of operations and financial condition, (7) competition from financial institutions and other financial service providers, (8) the effect of interest rate increases on the cost of deposits, (9) unanticipated weakness in loan demand or loan pricing, (10) lack of strategic growth opportunities or our failure to execute on available opportunities, (11) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (12) economic crises and associated credit issues in industries most impacted by the coronavirus (COVID-19) pandemic, including the restaurant, hospitality and retail sectors, (13) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, (14) our ability to effectively manage problem credits, (15) our ability to successfully implement efficiency initiatives on time and with the results projected, (16) our ability to successfully develop and market new products and technology, (17) the impact of negative developments in the financial industry and United States and global capital and credit markets, (18) our ability to retain the services of key personnel, (19) our ability to adapt to technological changes, (20) risks associated with litigation, including the applicability of insurance coverage, (21) 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, (22) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments, (23) 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, (24) the risk that expected cost savings and revenue synergies from (a) the merger of the Company and TCB Holdings (the “TCB Holdings Transaction”) or (b) the merger of the Company and FABK (the “FABK Transaction” and, together with the TCB Holdings Transaction, collectively, the “Transactions”), may not be realized or may take longer than anticipated to be realized, (25) the effect of the completion of the Transactions on our 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, (26) the risk that the businesses and operations of TCB Holdings 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, (27) the amount of costs, fees, expenses, and charges related to the Transactions, including those arising as a result of unexpected factors or events, (28) reputational risk associated with and the reaction of our customers, suppliers, employees, or other business partners to the Transactions, (29) the risk associated with Company management’s attention being diverted away from the day-to-day business and operations of the Company to the integration of the Transactions, and (30) 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 – UNAUDITED

March 31, 2020, December 31, 2019 and March 31, 2019

(Dollar Amounts in Thousands)

ASSETS

March 31, 2020

December 31,
2019

March 31, 2019

Cash and due from banks

$46,318

$50,990

$34,796

Federal funds sold

1,714

52

409

Total cash and cash equivalents

48,032

51,042

35,205

Securities available for sale

256,928

260,293

310,305

Loans held for investment, net of unearned income

1,619,703

1,409,952

1,262,160

Allowance for loan losses

(15,121)

(12,578)

(11,354)

Loans, net

1,604,582

1,397,374

1,250,806

Mortgage loans held for sale, net

70,352

37,476

9,990

Accrued interest receivable

7,289

7,111

8,389

Premises and equipment, net

27,609

21,376

21,970

Operating leases right of use assets

11,473

Restricted equity securities, at cost

14,405

11,279

11,499

Other real estate, net

750

1,000

Cash surrender value of life insurance contracts

52,556

46,632

45,791

Deferred tax assets, net

5,426

3,933

4,730

Goodwill

50,723

43,642

43,642

Core deposit intangibles

10,486

7,270

7,982

Other assets

17,927

10,289

10,617

TOTAL ASSETS

$2,177,788

$1,898,467

$1,761,926

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits

Demand

$320,553

$260,073

$220,966

Interest-bearing demand

170,304

152,718

144,166

Savings and money market deposit accounts

494,750

408,724

398,366

Time

736,841

762,274

747,823

Total deposits

1,722,448

1,583,789

1,511,321

Accrued interest payable

3,995

2,022

990

Subordinated debentures

70,391

70,883

11,624

Federal Home Loan Bank advances

127,628

10,737

15,309

Dividends payable

9

76

1,035

Other liabilities

18,645

7,207

6,528

TOTAL LIABILITIES

1,943,116

1,674,714

1,546,807

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;
12,014,095, 11,206,254, and 11,502,285 shares issued and
outstanding at March 31, 2020, Dec. 31, 2019, and March 31,
2019, respectively

12,014

11,206

11,502

Additional paid-in capital

184,523

167,006

172,886

Retained earnings

39,150

40,472

30,119

Accumulated other comprehensive income (loss)

(1,015)

5,069

612

TOTAL STOCKHOLDERS’ EQUITY

234,672

223,753

215,119

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$2,177,788

$1,898,467

$1,761,926

RELIANT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

Three Months Ended

March 31,
2020

December 31,
2019

March 31,
2019

INTEREST INCOME

Interest and fees on loans

$20,645

$17,790

$16,169

Interest and fees on loans held for sale

560

347

153

Interest on investment securities, taxable

451

460

503

Interest on investment securities, nontaxable

1,371

1,508

1,718

Federal funds sold and other

279

334

300

TOTAL INTEREST INCOME

23,306

20,439

18,843

INTEREST EXPENSE

Deposits

Demand

100

106

111

Savings and money market

975

1,000

1,130

Time

3,762

4,509

3,571

Federal Home Loan Bank advances and other

361

9

377

Subordinated debentures

993

348

193

TOTAL INTEREST EXPENSE

6,191

5,972

5,382

NET INTEREST INCOME

17,115

14,467

13,461

PROVISION FOR LOAN LOSSES

2,900

405

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

14,215

14,062

13,461

NONINTEREST INCOME

Service charges on deposit accounts

1,208

950

884

Gains on mortgage loans sold, net

1,573

1,735

560

Gain on securities transactions, net

1,145

131

Gain on sale of other real estate

14

166

Gain on disposal of premises and equipment

9

Other

478

572

363

TOTAL NONINTEREST INCOME

3,282

4,568

1,938

NONINTEREST EXPENSE

Salaries and employee benefits

9,237

7,909

7,265

Occupancy

1,486

1,354

1,352

Information technology

1,819

1,675

1,410

Advertising and public relations

353

377

254

Audit, legal and consulting

478

466

796

Federal deposit insurance

336

257

195

Provision for losses on other real estate

98

Merger expenses

4,186

1,301

2

Other operating

1,703

1,536

1,472

TOTAL NONINTEREST EXPENSE

19,598

14,973

12,746

INCOME BEFORE PROVISION FOR INCOME TAXES

(2,101)

3,657

2,653

INCOME TAX EXPENSE (BENEFIT)

(910)

699

372

CONSOLIDATED NET INCOME (LOSS)

(1,191)

2,958

2,281

NONCONTROLLING INTEREST IN NET LOSS OF SUBSIDIARY

976

1,175

1,543

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

($215)

$4,133

$3,824

Basic net income attributable to common shareholders, per share

($0.02)

$0.37

$0.34

Diluted net income attributable to common shareholders, per share

($0.02)

$0.37

$0.33

RELIANT BANCORP, INC.

SEGMENT FINANCIAL INFORMATION – UNAUDITED

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands)

Core Bank

Three Months Ended

March 31,
2020

December 31,
2019

March 31,
2019

Net interest income

$

16,782

$

14,266

$

13,373

Provision for loan losses

2,900

405

Noninterest income

1,709

2,833

1,378

Noninterest expense (excluding merger expenses)

12,461

10,479

10,445

Merger expense

4,186

1,301

2

Income before provision for income taxes

(1,056)

4,914

4,304

Income tax expense (benefit)

(841)

781

480

Net income (loss) attributable to common shareholders

$

(215)

$

4,133

$

3,824

Residential Mortgage Company

Three Months Ended

March 31,
2020

December 31,
2019

March 31,
2019

Net interest income

$

333

$

201

$

88

Provision for loan losses

Noninterest income

1,573

1,735

560

Noninterest expense

2,951

3,193

2,299

Loss before provision for income taxes

(1,045)

(1,257)

(1,651)

Income tax benefit

(69)

(82)

(108)

Net loss

(976)

(1,175)

(1,543)

Noncontrolling interest in net loss of subsidiary

976

1,175

1,543

Net income attributable (loss) to common shareholders

$

$

$

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

RELIANT BANCORP, INC.

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

AT OR FOR THE STATED THREE MONTHS ENDED

(Dollar Amounts in Thousands, Except Per Share Amounts)

March 31, 2020

December 31,
2019

March 31, 2019

Per Common Share Data

Net income attributable to shareholders, per share

Basic

$

(0.02)

$

0.37

$

0.34

Diluted

$

(0.02)

$

0.37

$

0.33

Book value per common share

$

19.53

$

19.97

$

18.70

Basic weighted average common shares

11,892,723

11,105,912

11,405,438

Diluted weighted average common shares

11,895,020

11,189,302

11,487,145

Common shares outstanding at period end

12,014,495

11,206,254

11,502,285

Selected Balance Sheet Data

Loans, net of unearned income

$

1,619,703

$

1,409,952

$

1,262,160

Total assets

2,177,788

1,898,467

1,761,926

Customer deposits

1,376,998

1,192,500

1,078,561

Wholesale and other purchased funds

345,450

391,289

432,760

Total deposits

1,722,448

1,583,789

1,511,321

Total liabilities

1,943,116

1,674,714

1,546,807

Total stockholders’ equity

234,672

223,753

215,119

Total liabilities and stockholders’ equity

2,177,788

1,898,467

1,761,926

Selected Balance Sheet Data – Quarterly Averages

Loans held for investment

1,613,033

1,368,338

1,238,341

Earnings assets(1)

1,985,032

1,746,678

1,590,342

Total assets

2,178,418

1,883,723

1,731,177

Interest-bearing liabilities

1,597,313

1,406,116

1,301,203

Total liabilities

1,936,519

1,663,156

1,521,716

Total stockholder’s equity

241,899

220,567

209,461

Total liabilities and stockholder’s equity

2,178,418

1,883,723

1,731,117

Selected Asset Quality Measures

Nonaccrual loans

$

3,949

$

4,071

$

4,582

90+ days past due still accruing

94

64

566

Total nonperforming loans

4,043

4,135

5,148

Total nonperforming assets (2)

4,043

4,885

6,148

Net charge offs (recoveries)

357

118

(462)

Nonperforming loans to total loans

0.25

%

0.29

%

0.41 %

Nonperforming assets to total assets

0.19

%

0.26

%

0.35

%

Nonperforming assets to total loans and other real estate

0.25

%

0.35

%

0.49 %

Allowance for loan losses to total loans

0.93

%

0.89

%

0.90 %

Allowance for loan losses to nonperforming loans

374.00

%

304.18

%

220.55 %

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

0.09

%

0.03

%

(0.15)

%

Capital Ratios (Bank Subsidiary Only)(4)

Tier 1 leverage

10.58

%

10.30

%

9.99 %

Common equity tier 1

12.12

%

11.95

%

12.07 %

Total risk-based capital

13.0

%

12.79

%

12.92 %

Selected Performance Ratios (3)

Return on average assets

(0.04)

%

0.88

%

0.88

%

Return on shareholders’ equity

(0.36)

%

7.50

%

7.30

%

Net interest margin (tax-equivalent basis)

3.61

%

3.46

%

3.63

%

(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 – UNAUDITED

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands)

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
March 31, 2020

Three Months Ended
December 31, 2019

Three Months Ended
March 31, 2019

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

$

1,613,033

5.01

$

20,077

$

1,368,338

5.01

$

17,263

$

1,238,341

5.16

$

15,766

Loan fees

0.22

890

0.26

895

0.23

706

Loans with fees

1,613,033

5.23

20,967

1,368,338

5.27

18,158

1,238,341

5.39

16,472

Mortgage loans held for sale

47,685

4.72

560

29,127

4.73

347

10,747

5.77

153

Deposits with banks

36,062

1.38

124

47,816

1.54

186

27,643

1.73

118

Investment securities – taxable

74,688

2.43

451

73,891

2.47

460

72,464

2.82

503

Investment securities – tax-exempt

197,241

3.56

1,748

214,283

3.55

1,918

228,497

3.86

2,175

Federal funds sold and other

16,323

3.82

155

13,223

4.44

148

12,650

5.83

182

Total earning assets

1,985,032

4.86

24,005

1,746,678

4.82

21,217

1,590,342

5.00

19,603

Nonearning assets

193,386

137,045

140,835

Total assets

$

2,178,418

$

1,883,723

$

1,731,177

Interest bearing liabilities

Interest bearing demand

$

186,236

0.22

$

100

$

152,723

0.28

$

106

$

148,649

0.30

$

111

Savings and money market

459,756

0.85

975

383,013

1.04

1,000

400,328

1.14

1,130

Time deposits – retail

541,545

1.85

2,496

508,473

2.03

2,599

577,270

2.05

2,921

Time deposits – wholesale

229,820

2.22

1,266

333,471

2.27

1,910

106,625

2.47

650

Total interest bearing deposits

1,417,357

1.37

4,837

1,377,680

1.62

5,615

1,232,872

1.58

4,812

Federal Home Loan Bank advances

109,349

1.33

361

4,530

0.79

9

56,718

2.70

377

Subordinated debt

70,607

5.66

993

23,906

5.78

348

11,613

6.74

193

Total borrowed funds

179,956

3.03

1,354

28,436

4.98

357

68,331

3.38

570

Total interest-bearing liabilities

1,597,313

1.56

6,191

1,406,116

1.69

5,972

1,301,203

1.68

5,382

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

3.30

17,814

3.13

15,245

3.32

14,221

Noninterest bearing deposits

312,137

(0.26)

250,217

(0.26)

211,122

(0.24)

Other noninterest bearing liabilities

27,069

6,823

9,391

Stockholder’s equity

241,899

220,567

209,461

Total liabilities and stockholders’ equity

$

2,178,418

$

1,883,723

$

1,731,177

Cost of funds

1.30

1.43

1.44

Net interest margin

3.61

3.46

3.63

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 $304, $366, and $300, respectively, for the three months ended March 31, 2020, December 31, 2019, and March 31, 2019. 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

March 31, 2020

December 31,
2019

March 31, 2019

NON-GAAP FINANCIAL MEASURES

Adjusted net interest margin (1)

Tax equivalent net interest income (1)(2)

$

17,814

$

15,245

$

14,221

Purchase accounting adjustments

(527)

(622)

(332)

Tax credits

(304)

(366)

(300)

Adjusted net interest income

$

16,983

$

14,257

$

13,589

Adjusted net interest margin

3.44

%

3.23

%

3.47

%

Adjusted net income (loss) attributable to common shareholders
and related impact (1)(3)

Net income (loss) attributable to common shareholders

$

(215)

$

4,133

$

3,824

Merger expenses

4,186

1,301

2

Pre-tax adjustments to net income

4,186

1,301

2

Tax effect of adjustments to net income

1,032

173

After tax adjustments to net income

$

3,154

$

1,128

$

2

Adjusted net income attributable to common shareholders

$

2,939

$

5,261

$

3,826

Adjusted return on average assets (4)

0.54

%

1.12

%

0.88

%

Adjusted return on average stockholders’ equity (4)

4.86

%

9.54

%

7.31

%

Adjusted net income attributable to common shareholders, per diluted share

$

0.25

$

0.47

$

0.33

Average tangible stockholders’ equity: (1)

Average stockholders’ equity

$

241,899

$

220,567

$

209,461

Less: average goodwill

50,723

43,642

43,642

Less: average core deposit intangibles

10,750

7,364

8,071

Net average tangible common equity

$

180,426

$

169,561

$

157,748

Return on average: (1)(4)

Tangible common equity (ROATCE)

(0.48)

%

9.75

%

9.70

%

Adjusted ROATCE

6.52

%

12.41

%

9.70

%

(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) Beginning the quarter ended September 30, 2019, purchase accounting adjustments will no longer be included in the adjusted net income calculation as these have been determined to be ordinary course of business. All historical periods above have been adjusted to reflect this change.

(4) 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

March 31,
2020

December
31, 2019

March 31,
2019

Tangible assets: (1)

Total assets

$

2,177,788

$

1,898,467

$

1,761,926

Less: goodwill

50,723

43,642

43,642

Less: core deposit intangibles

10,486

7,270

7,982

Net tangible assets

$

2,116,579

$

1,847,555

$

1,710,302

Tangible equity: (1)

Total stockholders’ equity

$

234,672

$

223,753

$

215,119

Less: goodwill

50,723

43,642

43,642

Less: core deposit intangibles

10,486

7,270

7,982

Net tangible common equity

$

173,463

$

172,841

$

163,495

Ratio of tangible common equity to tangible assets

8.20

%

9.36

%

9.56

%

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

Net tangible equity

$

173,463

$

172,841

$

163,495

Common shares outstanding

12,014,495

11,206,254

11,502,285

TBVPS

$

14.44

$

15.42

$

14.21

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

Non-interest expense

$

12,461

$

10,479

$

10,445

Net interest income

16,782

14,266

13,373

Tax equivalent adjustment for tax exempt interest income

699

778

760

Non-interest income

1,709

2,833

1,378

Less gain on sale of other real estate

(14)

(166)

Less gain on sale of securities

(1,145)

(131)

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

(9)

Adjusted operating income

$

19,167

$

16,566

$

15,380

Efficiency Ratio

65.01

%

63.26

%

67.91

%

Adjusted loan loss reserve: (1)

Allowance for loan losses

$

15,121

$

12,578

$

11,354

Purchase loan discounts

4,586

2,909

4,117

Loan loss reserve and purchase loan discounts

$

19,707

$

15,487

$

15,471

Allowance for loan losses and purchase loan discounts to total loans

1.22

%

1.10

%

1.23

%

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

DeVan Ard, Jr.
Chairman, President and CEO
Reliant Bancorp, Inc.
(615.221.2087)

Source: Reliant Bancorp, Inc.

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