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Reliant Bancorp, Inc. Reports Third Quarter 2020 Results

Net Income Per Diluted Common Share of $0.69, Up 91.7% Compared to Q3 2019
Net Interest Margin of 4.54%/Assets exceed $3.0 billion

BRENTWOOD, Tenn.–(BUSINESS WIRE)– Reliant Bancorp, Inc. (“Reliant Bancorp” or the “Company”) (Nasdaq: RBNC), parent company of Reliant Bank (“Reliant” or the “Bank”), reported net income attributable to common shareholders of $11.5 million, or $0.69 per diluted common share, for the third quarter of 2020 compared to net income attributable to common shareholders of $4.0 million, or $0.36 per diluted common share, for the third quarter of 2019. Excluding the impact of merger related income and expenses, adjusted net income per diluted common share increased 16.7% from the second quarter of 2020 and 84.2% from the third quarter of 2019.

DeVan Ard Jr., Reliant Bancorp’s Chairman and CEO stated, “I am very proud of the value our team has been able to build for shareholders and the service they have provided to our community despite the many economic and operating challenges presented by the COVID-19 pandemic. Third quarter 2020 net interest income increased 1.9% over the second quarter of 2020 as improvement in our funding costs offset a modest drop in loan yields. Gross loans grew organically at a 1.8% pace for the quarter or 7.0% annualized, a strong pace given the current environment. Our credit quality continues to be a source of strength as well, with no net charge-offs reported for the quarter and a decrease in nonperforming assets of 15.9% compared to the prior quarter. We provided additional reserves for potential COVID-19-related risks, but at a lower level than in the prior two quarters.”

Quarterly Highlights

Net Interest Income Increases on Continued Core Margin Improvement

The net interest margin declined to 4.54% at September 30, 2020, a 4 basis point decrease when compared to the prior quarter. The net interest margin decrease was primarily due to a 25 basis point decrease in our yield on loans held for investment and was partially offset by a 12 basis point decrease in our cost of funds. The decrease in loan yield can partially be attributed to a $1.4 million decline in purchase accounting accretion as compared to the prior quarter. The adjusted net interest margin, which excludes purchase accounting accretion, was 3.98%, an increase of 17 basis points for the same period. Similarly, net interest income for the quarter was $30.5 million, a linked-quarter increase of $0.6 million, or 1.9%. The decrease in cost of funds can primarily be attributed to our continued success in execution of our strategic initiatives around attracting and retaining core deposits and the general market rate decline. At September 30, 2020, customer deposits comprised 85.2% of total deposits compared to 86.1% of total deposits at June 30, 2020, and non-time deposits grew $44.8 million, or 2.8%, in the same period. In addition, $1.0 million of purchase accounting accretion was realized during the third quarter of 2020 for acquired certificates of deposit and Federal Home Loan Bank advances.

Our continued focus on improving the earning-asset mix also contributed to margin expansion, as average loans held for investment increased to 84.3% of average earning assets at September 30, 2020, compared to 78.6% at September 30, 2019.

Continued Growth From Strong Relationship Network

Loans increased $40.6 million from the linked quarter, or 1.75% and 7.00% when annualized. Loan originations during the quarter totaled $260.3 million at a weighted-average coupon rate of 4.38%.

Loans increased $1.0 billion year-over-year and was impacted by the acquired loan portfolios from both First Advantage Bank and Community Bank & Trust, which totaled $612.8 million and $143.4 million, respectively at September 30, 2020.

Deposits increased $35.5 million from the linked quarter and $954.8 million year-over-year. Non-interest-bearing deposits increased $4.5 million from the linked quarter. Ard stated, “Our team has demonstrated a continued ability to attract and retain deposits in a difficult environment, fulfilling one of our strategic goals and helping us to better serve the community’s credit needs.”

Year-over-year deposit growth can be attributed primarily to acquired deposit portfolios from both First Advantage Bank and Community Bank & Trust, which totaled $594.7 million and $211.5 million, respectively, at September 30, 2020. Organic year-over-year deposit growth totaled $148.7 million, or 9.2%.

Asset Quality Remains Stable and Capital Well Positioned

Credit quality remains strong. Nonperforming loans accounted for 0.29% of total loans and nonperforming assets accounted for 0.32% of total assets at September 30, 2020. The allowance for loan loss was 0.84% of loans (1.64% including unaccreted purchased loan discounts) at September 30, 2020. A $1.5 million provision was recognized during the quarter driven primarily by risk factors related to the COVID-19 pandemic. The acquired loan portfolios are reserved for through fair value marks that consider both credit quality and changes in interest rates.

Shareholders’ equity increased $11.5 million from the linked quarter to $307.1 million at September 30, 2020, due to current quarter net income. Both the Company and Bank continue to meet the criteria to be classified as “Well Capitalized” under applicable banking regulations. Tangible book value per share increased from the linked quarter by $0.69, or 4.9%, to $14.65 at September 30, 2020.

Conclusion

Ard concluded, “We are very pleased with the many ways our team has come together as ‘one bank’ to serve our community more effectively and to recognize efficiencies and other benefits from our larger, consolidated company. We continue to see increased demand in the loan pipeline at the end of the third quarter and we expect growth will continue into the fourth quarter. At approximately $3.0 billion in total consolidated assets and with the operating momentum we have, we are optimistic about our position in the market and financial outlook.”

Conference Call Information

The Company will hold a conference call to discuss third quarter 2020 results on Friday, October 23, 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/1855/38108. A link to these events 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 financial holding company which, through its wholly owned subsidiary Reliant Bank, operates banking centers in 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 September 30, 2020, Reliant Bancorp had approximately $3.0 billion in total consolidated assets, approximately $2.4 billion in loans and approximately $2.6 billion in deposits. For additional information, locations and hours of operation, please visit www.reliantbank.com.

Financial Measures

This release contains certain financial measures that are not measures recognized under generally accepted accounting principles (GAAP) and, therefore, are considered non-GAAP financial measures. Members of Company management use these non-GAAP financial measures in their analysis of the Company’s performance, financial condition, and efficiency of operations. Management of the Company believes that these non-GAAP financial measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods, and demonstrate the effects of significant gains and charges in the periods presented. Management of the Company also believes that investors find these non-GAAP financial measures useful as they assist investors in understanding underlying operating performance and the analysis of ongoing operating trends. However, the non-GAAP financial measures discussed herein should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which the non-GAAP financial measures discussed herein are calculated may differ from the manner in which measures with similar names are calculated by other companies. You should understand how other companies calculate their financial measures similar to, or with names similar to, the non-GAAP financial measures we have discussed herein when comparing such 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 shareholders’ equity,” “return on average tangible common equity ROATCE,” “adjusted ROATCE,” “tangible assets,” “tangible equity,” “tangible book value per common share TBVPS,” “core bank efficiency ratio,” and “adjusted loan loss allowance.”

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 statements made during 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 the Company’s credit quality being a source of strength, the Company’s ability to attract and retain deposits, and loan demand in the fourth quarter of 2020. 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 possible recurrence of the coronavirus (COVID-19), (5) changes in political conditions or the legislative or regulatory environment, including governmental initiatives affecting the financial services industry such as, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act (or the CARES) Act, (6) the possibility that our asset quality could decline or that we experience greater loan losses than anticipated, (7) increased levels of other real estate, primarily as a result of foreclosures, (8) the impact of liquidity needs on our results of operations and financial condition, (9) competition from financial institutions and other financial service providers, (10) the effect of interest rate increases on the cost of deposits, (11) unanticipated weakness in loan demand or loan pricing, (12) greater than anticipated adverse conditions in the national economy or local economies in which we operate, including in Middle Tennessee, (13) lack of strategic growth opportunities or our failure to execute on available opportunities, (14) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (15) economic crises and associated credit issues in industries most impacted by the coronavirus (COVID-19) pandemic, including the restaurant, hospitality and retail sectors, (16) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, (17) our ability to effectively manage problem credits, (18) our ability to successfully implement efficiency initiatives on time and with the results projected, (19) our ability to successfully develop and market new products and technology, (20) the impact of negative developments in the financial industry and United States and global capital and credit markets, (21) our ability to retain the services of key personnel, (22) our ability to adapt to technological changes, (23) risks associated with litigation, including reputational and financial risks and the applicability of insurance coverage, (24) the vulnerability of the Bank’s computer and information technology systems and networks, and the systems and networks of third parties with whom the Company or the Bank contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss, and other security breaches and interruptions, (25) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments, (26) adverse impacts (including costs, fines, reputational harm, or other negative effects) from current or future litigation, regulatory examinations, or other legal and/or regulatory actions, (27) the risk that expected cost savings and revenue synergies from (a) the merger of the Company and Tennessee Community Bank Holdings, Inc. (“TCB Holdings”) (the “TCB Holdings Transaction”) or (b) the merger of the Company and First Advantage Bancorp (“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, (28) the effect 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, (29) 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, (30) the amount of costs, fees, expenses, and charges related to the Transactions, including those arising as a result of unexpected factors or events, (31) reputational risk associated with and the reaction of our customers, suppliers, employees, or other business partners to the Transactions, (32) 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 (33) 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

September 30, 2020, June 30, 2020 and September 30, 2019

(Dollar Amounts in Thousands)

ASSETS

September 30, 2020

June 30, 2020

September 30, 2019

Cash and due from banks

$

14,050

$

12,805

$

7,395

Interest-bearing deposits in financial institutions

61,349

81,033

43,852

Federal funds sold

12,273

638

73

Total cash and cash equivalents

87,672

94,476

51,320

Securities available for sale

273,893

249,014

297,310

Loans

2,357,898

2,317,324

1,350,683

Less allowance for loan losses

(19,834

)

(18,237

)

(12,291

)

Loans, net

2,338,064

2,299,087

1,338,392

Mortgage loans held for sale, net

99,587

101,579

16,757

Accrued interest receivable

14,615

13,579

7,488

Premises and equipment, net

33,319

33,524

21,048

Operating leases right of use assets

14,619

15,452

Restricted equity securities, at cost

17,367

17,509

11,279

Other real estate, net

1,326

2,514

1,943

Cash surrender value of life insurance contracts

68,109

67,723

46,351

Deferred tax assets, net

8,523

9,787

456

Goodwill

51,506

51,058

43,642

Core deposit intangibles

11,820

12,293

7,507

Other assets

24,092

22,531

12,322

TOTAL ASSETS

$

3,044,512

$

2,990,126

$

1,855,815

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits

Noninterest-bearing demand

$

538,844

$

534,353

$

237,917

Interest-bearing demand

272,805

273,993

149,442

Savings and money market deposit accounts

813,001

771,505

397,243

Time

940,852

950,163

826,069

Total deposits

2,565,502

2,530,014

1,610,671

Accrued interest payable

3,744

3,100

1,610

Federal funds purchased

5,000

Subordinated debentures

70,389

70,413

11,665

Federal Home Loan Bank advances

40,555

49,121

3,928

Operating leases liabilities

15,756

16,591

Other liabilities

36,480

25,344

8,289

TOTAL LIABILITIES

2,737,426

2,694,583

1,636,163

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; 16,634,572, 16,631,604, and 11,195,062 shares issued and outstanding at September 30, 2020, June 30, 2020, and September 30, 2019, respectively

16,635

16,632

11,195

Additional paid-in capital

232,738

232,436

166,512

Retained earnings

55,206

45,351

36,339

Accumulated other comprehensive income

2,507

1,124

5,606

TOTAL SHAREHOLDERS’ EQUITY

307,086

295,543

219,652

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

3,044,512

$

2,990,126

$

1,855,815

This information is preliminary and based on company data available at the time of presentation.

RELIANT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

Three Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

INTEREST INCOME

Interest and fees on loans

$

32,895

$

33,447

$

17,502

Interest and fees on loans held for sale

1,037

815

263

Interest on investment securities, taxable

399

128

549

Interest on investment securities, nontaxable

1,186

1,317

1,576

Federal funds sold and other

250

208

321

TOTAL INTEREST INCOME

35,767

35,915

20,211

INTEREST EXPENSE

Deposits

Demand

236

218

81

Savings and money market deposit accounts

1,162

1,476

976

Time

2,736

3,135

4,825

Federal Home Loan Bank advances and other borrowings

104

148

66

Subordinated debentures

992

982

199

TOTAL INTEREST EXPENSE

5,230

5,959

6,147

NET INTEREST INCOME

30,537

29,956

14,064

PROVISION FOR LOAN LOSSES

1,500

3,000

606

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

29,037

26,956

13,458

NONINTEREST INCOME

Service charges on deposit accounts

1,583

1,381

976

Gains on mortgage loans sold, net

3,783

2,248

1,385

Gain on securities transactions, net

327

Other noninterest income

635

466

399

TOTAL NONINTEREST INCOME

6,001

4,422

2,760

NONINTEREST EXPENSE

Salaries and employee benefits

12,184

12,464

7,634

Occupancy

2,054

2,026

1,359

Data processing and software

2,240

2,026

1,553

Professional fees

775

680

404

Regulatory Fees

365

537

(17)

Merger expenses

78

2,632

299

Other operating expense

2,637

1,899

1,815

TOTAL NONINTEREST EXPENSE

20,333

22,264

13,047

INCOME BEFORE PROVISION FOR INCOME TAXES

14,705

9,114

3,171

INCOME TAX EXPENSE

2,800

1,634

557

CONSOLIDATED NET INCOME

11,905

7,480

2,614

NONCONTROLLING INTEREST IN NET (INCOME) LOSS OF SUBSIDIARY

(374)

388

1,386

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

11,531

$

7,868

$

4,000

Basic net income attributable to common shareholders, per share

$

0.70

$

0.48

$

0.36

Diluted net income attributable to common shareholders, per share

$

0.69

$

0.48

$

0.36

This information is preliminary and based on company data available at the time of presentation.

RELIANT BANCORP, INC.

SEGMENT FINANCIAL INFORMATION – UNAUDITED

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands)

Core Bank(1)

Three Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

Net interest income

$

29,729

$

29,420

$

13,910

Provision for loan losses

1,500

3,000

606

Noninterest income

2,218

2,174

1,375

Noninterest expense (excluding merger expense)

16,065

16,433

9,726

Merger expense

78

2,632

299

Income before provision for income taxes

14,304

9,529

4,654

Income tax expense

2,773

1,661

654

Net income attributable to common shareholders

$

11,531

$

7,868

$

4,000

Residential Mortgage Company

Three Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

Net interest income

$

808

$

536

$

154

Provision for loan losses

Noninterest income

3,783

2,248

1,385

Noninterest expense

4,190

3,199

3,022

Income (loss) before provision for income taxes

401

(415)

(1,483)

Income tax expense (benefit)

27

(27)

(97)

Net income (loss)

374

(388)

(1,386)

Noncontrolling interest in net (income) loss of subsidiary

(374)

388

1,386

Net income (loss) attributable to common shareholders

$

$

$

(1)

Core Bank includes all entities included in the Consolidated Financial Statements other than the Residential Mortgage Company.

(2)

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

This information is preliminary and based on company data available at the time of presentation.

RELIANT BANCORP, INC.

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

AT OR FOR THE STATED THREE MONTHS ENDED

(Dollar Amounts in Thousands, Except Per Share Amounts)

September 30, 2020

June 30, 2020

September 30, 2019

Per Common Share Data

Net income attributable to common shareholders, per share

Basic

$

0.70

$

0.48

$

0.36

Diluted

$

0.69

$

0.48

$

0.36

Book value per common share

$

18.46

$

17.77

$

19.62

Basic weighted average common shares

16,587,274

16,496,817

11,104,918

Diluted weighted average common shares

16,649,673

16,529,080

11,177,367

Common shares outstanding at period end

16,634,572

16,631,604

11,195,062

Selected Balance Sheet Data

Loans, net of unearned income

$

2,357,898

$

2,317,324

$

1,350,683

Total assets

3,044,512

2,990,126

1,855,815

Customer deposits

2,185,915

2,177,734

1,117,756

Wholesale and other purchased funds

379,587

352,280

492,915

Total deposits

2,565,502

2,530,014

1,610,671

Total liabilities

2,737,426

2,694,583

1,636,163

Total shareholders’ equity

307,086

295,543

219,652

Total liabilities and shareholders’ equity

3,044,512

2,990,126

1,855,815

Selected Balance Sheet Data – Quarterly Averages

Loans held for investment

2,337,958

2,302,154

1,312,153

Earning assets(1)

2,771,917

2,734,898

1,669,482

Total assets

2,981,687

2,948,366

1,806,455

Interest-bearing liabilities

2,108,428

2,159,118

1,354,451

Total liabilities

2,682,252

2,659,405

1,589,368

Total shareholders’ equity

299,435

288,961

217,087

Total liabilities and shareholders’ equity

2,981,687

2,948,366

1,806,455

Preliminary Capital Ratios (Consolidated)(4)

Tier 1 leverage

8.72

%

8.47

%

9.85

%

Common equity tier 1

9.77

%

9.25

%

10.85

%

Tier 1 risk-based capital

10.25

%

9.71

%

11.64

%

Total risk-based capital

13.44

%

12.80

%

12.51

%

Selected Performance Ratios (3)

Return on average assets

1.54

%

1.07

%

0.88

%

Return on shareholders’ equity

15.32

%

10.95

%

7.31

%

Net interest margin (tax-equivalent basis)

4.54

%

4.58

%

3.51

%

Selected Asset Quality Measures

Nonaccrual loans

$

6,738

$

7,541

$

4,380

90+ days past due still accruing

64

8

121

Total nonperforming loans

6,802

7,549

4,501

Total nonperforming assets (2)

9,731

11,571

6,444

Net (recoveries) charge offs

(97

)

(116

)

(19

)

Nonperforming loans to total loans

0.29

%

0.33

%

0.33

%

Nonperforming assets to total assets

0.32

%

0.39

%

0.35

%

Nonperforming assets to total loans and NPAs

0.41

%

0.50

%

0.48

%

Allowance for loan losses to total loans

0.84

%

0.79

%

0.91

%

Allowance for loan losses to nonperforming loans

291.61

%

241.58

%

273.07

%

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

(0.02

)%

(0.02

)%

(0.01

)%

(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, repossessed assets, and other real estate.

(3)

Data has been annualized.

(4)

Current quarter capital ratios are estimated.

This information is preliminary and based on company data available at the time of presentation.

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
September 30, 2020

Three Months Ended
June 30, 2020

Three Months Ended
September 30, 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

$

2,337,958

5.34

$

30,640

$

2,302,154

5.68

$

31,708

$

1,312,153

5.12

$

16,632

Loan fees

0.38

2,255

0.30

1,739

0.26

870

Loans with fees

2,337,958

5.73

32,895

2,302,154

5.98

33,447

1,312,153

5.38

17,502

Mortgage loans held for sale

103,729

3.98

1,037

85,313

3.84

815

18,271

5.71

263

Deposits with banks

57,909

0.47

68

66,031

0.30

50

33,410

1.96

165

Investment securities – taxable

67,569

2.35

399

66,234

0.78

128

73,115

2.98

549

Investment securities – tax-exempt

185,058

3.29

1,186

193,216

3.51

1,317

220,233

3.60

1,576

Federal funds sold and other

19,694

3.68

182

21,950

2.90

158

12,300

5.03

156

Total earning assets

2,771,917

5.29

35,767

2,734,898

5.45

35,915

1,669,482

4.98

20,211

Nonearning assets

209,770

213,468

136,973

Total assets

$

2,981,687

$

2,948,366

$

1,806,455

Interest bearing liabilities

Interest bearing demand

$

272,506

0.34

$

236

$

279,171

0.31

$

218

$

142,702

0.23

$

81

Savings and money market

786,589

0.59

1,162

731,278

0.81

1,476

350,440

1.10

976

Time deposits – retail

715,310

1.01

1,819

749,566

1.19

2,217

540,688

2.17

2,956

Time deposits – wholesale

223,095

1.64

917

201,307

1.83

918

294,750

2.52

1,872

Total interest-bearing deposits

1,997,500

0.82

4,134

1,961,322

0.99

4,829

1,328,580

1.76

5,885

Federal Home Loan Bank advances and other borrowings

40,567

1.02

104

127,399

0.47

148

14,216

1.84

66

Subordinated Debt

70,361

5.61

992

70,397

5.61

982

11,655

6.77

199

Total borrowed funds

110,928

3.93

1,096

197,796

2.30

1,130

25,871

4.06

265

Total interest-bearing liabilities

2,108,428

0.99

5,230

2,159,118

1.11

5,959

1,354,451

1.80

6,150

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

4.30

30,537

4.34

29,956

3.18

14,061

Noninterest bearing deposits

536,353

(0.20

)

468,620

(0.20

)

227,502

(0.26

)

Other noninterest bearing liabilities

37,471

31,667

7,415

Shareholders’ equity

299,435

288,961

217,087

Total liabilities and shareholders’ equity

$

2,981,687

$

2,948,366

$

1,806,455

Cost of funds

0.79

0.91

1.54

Net interest margin

4.54

4.58

3.51

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 $751, $779, and $300, respectively, for the three months ended September 30, 2020, June 30, 2020, and September 30, 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.

This information is preliminary and based on company data available at the time of presentation.

RELIANT BANCORP, INC.

NON-GAAP FINANCIAL MEASURES

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

NON-GAAP FINANCIAL MEASURES

Adjusted net interest margin (1)(4)

Tax equivalent net interest income (1)(2)

$

31,643

$

31,117

$

14,787

Purchase accounting adjustments

(3,868

)

(5,232

)

(383

)

Adjusted net interest income

$

27,775

$

25,885

$

14,404

Adjusted net interest margin

3.98

%

3.81

%

3.42

%

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

Net income attributable to common shareholders

$

11,531

$

7,868

$

4,000

Merger expenses

78

2,632

299

Tax effect of adjustments to net income

(20

)

(565

)

(27

)

After tax adjustments to net income

$

98

$

3,197

$

326

Adjusted net income attributable to common shareholders

$

11,589

$

9,935

$

4,272

Adjusted return on average assets (3)

1.55

%

1.36

%

0.94

%

Adjusted return on average shareholders’ equity (3)

15.40

%

13.83

%

7.81

%

Adjusted net income attributable to common shareholders, per diluted share

$

0.70

$

0.60

$

0.38

Average tangible shareholders’ equity: (1)

Average shareholders’ equity

$

299,435

$

288,961

$

217,087

Less: average goodwill

51,108

51,058

43,642

Less: average core deposit intangibles

12,104

12,529

7,598

Net average tangible common equity

$

236,223

$

225,374

$

165,847

Return on average: (1)(3)

Tangible common equity (ROATCE)

19.42

%

14.04

%

9.57

%

Adjusted ROATCE

19.52

%

17.73

%

10.22

%

(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.

(4)

Prior calculation of this ratio removed tax credits related to certain tax-preference-qualified loans and tax-exempt securities. The Company views these credits as normal course of business and as such removal is unnecessary.

This information is preliminary and based on company data available at the time of presentation.

RELIANT BANCORP, INC.

NON-GAAP FINANCIAL MEASURES

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

Tangible assets: (1)

Total assets

$

3,044,512

$

2,990,126

$

1,855,815

Less: goodwill

51,506

51,058

43,642

Less: core deposit intangibles

11,820

12,293

7,507

Net tangible assets

$

2,981,186

$

2,926,775

$

1,804,666

Tangible equity: (1)

Total shareholders’ equity

$

307,086

$

295,543

$

219,652

Less: goodwill

51,506

51,058

43,642

Less: core deposit intangibles

11,820

12,293

7,507

Net tangible common equity

$

243,760

$

232,192

$

168,503

Ratio of tangible common equity to tangible assets

8.18

%

7.93

%

9.34

%

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

Net tangible equity

$

243,760

$

232,192

$

168,503

Common shares outstanding

16,634,572

16,631,604

11,195,062

TBVPS

$

14.65

$

13.96

$

15.05

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

Non-interest expense

$

16,065

$

16,433

$

9,726

Net interest income

29,729

29,420

13,910

Tax equivalent adjustment for tax exempt interest income

1,106

1,161

726

Non-interest income

2,218

2,174

1,375

Less loss (gain) on sale of other real estate

2

(11

)

Less (gain) on sale of securities

(327

)

Less loss on disposal of premises and equipment

8

Adjusted operating income

$

33,063

$

32,417

$

16,011

Efficiency Ratio

48.59

%

50.69

%

60.75

%

Adjusted loan loss allowance: (1)

Allowance for loan losses

$

19,834

$

18,237

$

12,291

Purchase loan discounts

18,939

21,939

3,326

Loan loss reserve and purchase loan discounts

$

38,773

$

40,176

$

15,617

Allowance for loan losses and purchase loan discounts to total loans

1.64

%

1.73

%

1.16

%

(1)

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

This information is preliminary and based on company data available at the time of presentation.

 

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

 

Source: Reliant Bancorp, Inc.

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