Jan. 25, 2017

Reliant Bancorp, Inc. Reports Record Loans, Deposits and Assets for 2017

Company Release - 1/25/2018 8:30 AM ET

Community First Merger to Accelerate 2018 Growth

BRENTWOOD, Tenn.--(BUSINESS WIRE)-- Reliant Bancorp, Inc., formerly Commerce Union Bancshares, Inc. (“Reliant Bancorp” or “the Company”) (Nasdaq: RBNC), the parent company for Reliant Bank (“Reliant”), announced today record loans, deposits and assets for the fourth quarter and year ended December 31, 2017.

Fourth quarter net income attributable to common shareholders was $1.2 million, or $0.13 per fully diluted share, compared with $2.0 million, or $0.25 per fully diluted share, recorded in the fourth quarter of 2016. Net income attributable to common shareholders for the full year 2017 was $7.2 million, or $0.88 per fully diluted share, compared with $8.9 million, or $1.16 per fully diluted share in 2016.

There were several items impacting the Company’s most recent quarterly and annual results for December 31, 2017:

  • Merger expenses, net of taxes of $620,000 and $1.08 million for the three months and year ended December 31, 2017. There were no comparable expenses in 2016.
  • Revaluation of the Company’s deferred tax asset offset by the deferred tax liability for a net charge of $620,000 for the three months and year ended December 31, 2017. There was no comparable revaluation in 2016.
  • Purchase accounting adjustments positively impacting results, net of taxes of $19,000 and $71,000 for the three months and year ended December 31, 2017, and $55,000 and $694,000 for the three months and year ended December 31, 2016.
  • Interest income recognized on payoff of purchased credit impaired loans totaling $218,000 and $382,000 for the years ended December 31, 2017 and 2016. There was no comparable interest income due to the payoff of purchased credit impaired loans for the fourth quarters of 2017 and 2016.
  • Net gains from securities transactions, sale of other real estate, or disposal of premises and equipment, net of taxes of $0 and $22,000 for the three months and year ended December 31, 2017. Net losses, net of taxes of $197,000 for the three month ended December 31, 2016 and net gains, net of taxes of $208,000 for the year ended December 31, 2016.

The above items negatively impacted net income attributable to common shareholders, per diluted share by $0.13 and $0.17 for the three months and year ended December 31, 2017, and by $0.02 for the three months ended December 31, 2016, while positively impacting net income attributable to common shareholders by $0.17 per diluted share for the year ended December 31, 2016. In August of 2017, the Company raised $23.2 million, net of expenses, issuing 1.1 million shares of common stock in a private offering that increased average shares outstanding compared with the fourth quarter and full year 2016.

“We are excited to report record assets, loans and deposits for 2017,” stated DeVan D. Ard, Jr., Chairman, President and Chief Executive Officer. “Our results were due to organic growth across our markets, including growth in C&I, commercial real estate, and consumer loans. I am honored to welcome the shareholders and employees of Community First to Reliant Bancorp. We closed our merger on January 1, 2018, on time and immediately following the corporate name change to Reliant Bancorp. Both the completion of the merger and the name change move us further towards our strategic growth initiatives and provide a unique opportunity to build a progressive brand in our growing Middle Tennessee footprint.

“The Nashville area maintained its strength in job and wage growth in the fourth quarter of 2017, and unemployment rates in our key markets continued to decline, according to a recent report by MetroStudy. Additionally, business and consumer optimism continues to drive loan demand. In the fourth quarter, loan production exceeded $84 million, a 20% increase over the same period last year, and the loan pipeline entering the new year is healthy and diverse. The focus for the coming year will be the successful integration of Community First and leveraging our increased market presence in the greater middle Tennessee area,” continued Ard.

The Company continued its forward momentum with assets increasing 23.4% in 2017 to $1.13 billion. Strong loan production drove loans to a record level of $772.2 million – an increase of 15.8% since 2016. Core deposits rose 4% in the fourth quarter, and total deposits rose to $883.5 million at year end 2017, an increase of 15.7% from year end 2016. Reliant enters 2018 with more scale, an expanded footprint, stronger branding, and increased retail presence. All elements will play important roles in accelerating growth.

Balance Sheet Growth

($ in thousands)

 

   

Q4 2017

   

Q3 2017

   

% Change

     

Q4 2016

   

% Change

Total assets     $ 1,125,034     $ 1,041,180     8.1 %     $ 911,984     23.4 %
Earning assets       1,062,993       984,277     8.0         851,136     24.9  
Securities available for sale       220,201       192,277     14.5         146,813     50.0  
Loans held for investment       772,219       749,361     3.1         666,783     15.8  
Total deposits       883,519       840,448     5.1         763,834     15.7  
Demand deposits       131,996       132,058     (0.1 )       134,792     (2.1 )
Total stockholders' equity       140,137       137,944     1.6         106,919     31.1  
                                         
  • Total assets increased $83.9 million, or 8.1%, to a record $1.13 billion at December 31, 2017, rising from $1.04 billion at September 30, 2017, and up $213.1 million, or 23.4% from December 31, 2016. The increase in assets was due primarily to growth in loans, investments, mortgage loans held for sale and bank-owned life insurance.
  • Earning assets grew $78.7 million, or 8.0% in the fourth quarter, including $22.9 million in loans and $27.9 million in investment securities. Earning assets grew 24.9% from December 31, 2016, including an increase of $105.4 million in loans and $73.4 million in investment securities.
  • Loans increased $22.9 million, or 3.1%, or 12.2% on an annualized basis, from September 30, 2017, to December 31, 2017, and were up 15.8% over December 31, 2016. Loan growth benefited from increased demand from commercial customers and home builders.
  • Asset quality remained sound and improved from the prior quarters. Nonperforming assets to total assets improved to 0.46% at December 31, 2017, compared to 0.49% at September 30, 2017, and 0.62% at December 31, 2016. The Company had no other real estate owned at December 31, 2017, September 30, 2017, or December 31, 2016.
  • Deferred tax assets totaled $1.3 million at December 31, 2017. Deferred tax assets were reduced by approximately $620,000 at year end 2017 due to the newly enacted Tax Cuts and Jobs Act that reduced the federal corporate tax rate from 35% to 21%.
  • Total deposits rose to a record $883.5 million at December 31, 2017, an increase of 5.1%, or 20.5% annualized from September 30, 2017, and were up 15.7% over December 31, 2016. Deposit growth from the prior year generally benefited from increases in time deposits. Demand deposits remained flat during the quarter and were down 2.1% since December 31, 2016. The Company continues to enhance its efforts to seek these low-cost deposits in the market.
  • Total stockholders’ equity grew by 1.6% during the quarter to $140.1 million and grew 31.1% since December 31, 2016. The growth benefited from our August 2017, $23.2 million capital raise, net of expenses, as well as our earnings accretion, an improvement in the Accumulated Other Comprehensive Income and capital raised through the exercises of employee stock options. These items were partially offset by the quarterly cash dividends declared throughout 2017.

 

Revenue Growth and Profitability

($ in thousands except per share amounts)

 

   

Q4 2017

   

Q3 2017

   

% Change

   

Q4 2016

   

% Change

Net income attributable to common shareholders     $ 1,155       $ 1,846       (37.4 )%     $ 1,971      

(41.4

)%
Merger expenses, net of taxes       620         460       34.8         -       100.0  
Fully diluted EPS       0.13        

0.22

      (40.9 )       0.25       (48.0 )
Net interest income       8,917         9,096       (2.0 )       8,043       10.9  
Net interest margin       3.80 %       4.08 %    

(28BP

)

      4.03 %    

(23BP

)

Provision for loan losses       121        

540

      (77.6 )       208       (41.8 )
Non-interest income       1,553         2,087       (25.6 )       869       78.7  
Non-interest expense       8,442         8,497       (0.6 )       6,827       23.7  
                                               
  • Net income attributable to common shareholders was $1.2 million in the fourth quarter of 2017, compared to $1.8 million in the third quarter of 2017, and $2.0 million in the fourth quarter of 2016. The decrease in earnings from the prior quarters was due primarily to a $620,000 charge related to the fourth quarter write-down of deferred tax assets. In addition, the Company reported $620,000 of net merger expenses in the fourth quarter of 2017 associated with our merger with Community First compared to $460,000 in the third quarter of 2017 and no comparable expense in the fourth quarter of 2016.
  • Return on average assets for the quarter ended December 31, 2017, was 0.43% compared to 0.73% for the third quarter of 2017, and 0.87% for the fourth quarter of 2016. Our return on average assets was strongly influenced by the items impacting our net income attributable to common shareholders discussed above.
  • Return on average equity for the quarter ended December 31, 2017, was 3.41%, compared to 6.18% in the third quarter of 2017, and 7.33% in the fourth quarter of 2016. Our return on average equity was affected by the changes in net income attributable to common shareholders discussed above as well as the capital raise completed in August 2017.
  • Total interest income increased to $10.9 million in the fourth quarter of 2017, up 2.1%, compared to the third quarter of 2017, and up 21.3%, compared to the fourth quarter of 2016. The increases were driven by growth in earning assets, including loans and investment securities offset by a reduction of discount accretion relating to purchase accounting when compared to the fourth quarter of the prior year. Net interest income was $8.9 million in the fourth quarter of 2017, down 2.0% from the third quarter of 2017 due mainly to a higher cost of funds.
  • Net interest margin for the quarter ended December 31, 2017, was 3.80%, compared with 4.08% in the third quarter of 2017, and 4.03% for the fourth quarter of 2016. The decrease in net interest margin from the prior quarter and year was due to the factors affecting interest income mentioned in the above bullet and the higher cost of funds.
  • The Company continued to add volume and better yields to its investment portfolio. Securities available for sale grew to $220.2 million as of December 31, 2017, an increase of 14.5% from September 30, 2017, and 50.0% from December 31, 2016. The average tax-equivalent yield increased to 3.78% in the fourth quarter of 2017, compared to 3.18% in the same quarter of 2016.
  • Provision for loan losses was $121,000 for the fourth quarter of 2017, compared to $540,000 in the third quarter of 2017, and $208,000 in the fourth quarter of 2016. The provision for loan losses declined due to improved credit metrics compared with the third quarter of 2017 and fourth quarter of 2016. The Company had net charge-offs of $12,000 in the fourth quarter of 2017, compared to net charge-offs of $302,000 in the third quarter of 2017 and net recoveries of $74,000 in the fourth quarter of 2016.
  • Noninterest income was $1.6 million in the fourth quarter of 2017, compared to $2.1 million in the third quarter of 2017, and $869,000 in the fourth quarter of 2016. Revenue from mortgage loans sold declined by $647,000 from the third quarter of 2017 and increased $282,000 from the fourth quarter of 2016. Based on its joint-venture agreement, the Company does not absorb any losses incurred by its mortgage venture, and until previous losses born by the venture’s non-controlling member are offset, will not recognize profit. For the fourth quarter of 2017, the mortgage subsidiary incurred a net loss of $185,000 that was allocated 100% to the non-controlling member of the venture compared with a loss of $6,000 in the third quarter of 2017 and a loss of $532,000 in the fourth quarter of 2016.
  • Noninterest expenses were $8.4 million in the fourth quarter of 2017, compared to $8.5 million in the third quarter of 2017, and $6.8 million in the fourth quarter of 2016. The increase from the fourth quarter of 2016 was due to the merger expenses incurred in the fourth quarter of 2017 previously discussed, and additional commission expense relating to mortgage loan sales compared with the fourth quarter of 2016.
  • The subsidiary Bank’s efficiency ratio, excluding the mortgage subsidiary, for the quarter ended December 31, 2017, was 58.2%, compared to 57.2% in the third quarter of 2017, and 58.0% for the fourth quarter of 2016.
  • Income tax expense totaled $937,000 in the fourth quarter of 2017, compared to $306,000 in the third quarter of 2017, and $438,000 in the fourth quarter of 2016. The fourth quarter 2017 tax expense included a $620,000 charge arising from the Company’s deferred tax asset offset by a deferred tax liability arising from the newly enacted Tax Cuts and Jobs Act. The Company’s consolidated effective tax rate is impacted by the consolidation of pre-tax profits and losses from our mortgage venture with the federal portion of the income tax expense or benefit being solely attributable to the non-controlling member. For this reason, our consolidated income tax rate can vary significantly depending on the amount of mortgage venture income or losses being consolidated. Our effective tax rate that is attributable to our retail banking segment is the rate applicable to our common shareholders. This rate was 15.6% for the fourth quarter of 2017, after excluding the effect of the tax law change in December 2017, compared to 14.2% in the third quarter of 2017, and 19.4% in the fourth quarter of 2016. The Company expects to benefit from lower federal income taxes in 2018 due to the newly enacted Tax Cuts and Jobs Act.

 

Strong Capital Position

Reliant’s capital position remained strong at December 31, 2017. Reliant maintained a December 31, 2017, Tier 1 leverage ratio of 11.68%, compared to a 12.20% ratio at September 30, 2017, and 10.75% at December 31, 2016. Total stockholders’ equity rose to $140.1 million and tangible book value per common share grew to $14.11 at December 31, 2017, from $13.88 at September 30, 2017, and $12.08 at December 31, 2016, reflecting the impact of our private placement in the third quarter of 2017 as well as earnings accretion. Reliant’s capital ratios are expected to be maintained significantly above the ratios of a “well-capitalized” institution.

“We expect 2018 to be another solid year of growth for Reliant Bank and Reliant Bancorp. The Community First merger provides Reliant with a solid platform to build on during the year as we consolidate their operations and expand our services into their legacy markets. Although we expect expenses related to the merger to continue through the first half of 2018 as we integrate our banks, we also expect the lower federal tax rate to largely offset these costs. Our entire team remains focused on providing our customers with great service as we continue to seek opportunities that will build future profitability,” concluded Ard.

Non-GAAP Financial Measures

This document contains non-GAAP financial measures. The non-GAAP measures in this release below include “adjusted net interest margin,” “adjusted net income attributable to common shareholders and related impact on ROA, ROE, and earnings per diluted share,” and “efficiency ratio.” 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, gains or losses on securities transactions, gains or losses on the sale of assets, gains or losses on disposal of premises and equipment, 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.

About Reliant Bancorp and Reliant Bank

Reliant Bancorp, Inc. is a Brentwood, Tennessee-based bank holding company which operates banking centers in Davidson, Robertson, Sumner, Williamson, Maury and Hickman counties, Tennessee along with loan and deposit production offices in Rutherford and Hamilton counties, Tennessee, through its wholly-owned subsidiary Reliant Bank. 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, 2017, Reliant Bancorp had approximately $1.13 billion in total assets, approximately $772 million in loans and approximately $884 million in deposits. For additional information, locations and hours of operation, please visit their website at www.reliantbank.com.

Forward Looking Statements

All statements, other than statements of historical fact, included in this release 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. The words “believe,” “anticipate,” “expect,” “may,” “will,” “assume,” “should,” “predict,” “could,” “would,” “intend,” “targets,” “estimates,” “projects,” “plans,” “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 benefits to Reliant Bancorp of the Community First merger, Reliant Bancorp’s future financial and operating results (including the anticipated impact of the transaction on the combined company’s earnings per share and tangible book value) and Reliant Bancorp’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 Reliant Bancorp to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, (1) the risk that the cost savings and any revenue synergies from the Community First merger may not be realized or take longer than anticipated to be realized, (2) the ability of Reliant Bancorp to meet expectations regarding the accounting and tax treatment of the transaction, (3) the effect of the announcement or completion of the transaction on employee and customer relationships and operating results (including, without limitation, difficulties in maintaining relationships with employees and customers), (4) the risk that integration of Community First’s operations with those of Reliant Bancorp will be materially delayed or will be more costly or difficult than expected, (5) the amount of costs, fees, expenses, and charges related to the transaction, (6) reputational risk and the reaction of the parties’ customers, suppliers, employees or other business partners to the transaction, (7) the dilution caused by Reliant Bancorp’s issuance of additional shares of its common stock in the transaction, and (8) general competitive, economic, political and market conditions. Additional factors which could affect the forward-looking statements can be found in Reliant Bancorp’s (formerly Commerce Union Bancshares, Inc.) 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. Reliant Bancorp believes the forward-looking statements contained herein are reasonable; however, 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. Reliant Bancorp disclaims any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.

       

RELIANT BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2017, SEPTEMBER 30, 2017 AND DECEMBER 30, 2016

(Dollar Amounts in Thousands)

(Unaudited)

       

ASSETS

      December 31,     September 30,     December 31,
      2017     2017     2016
Cash and due from banks     $ 20,497       $ 18,277       $ 23,413  
Federal funds sold       171         669         830  
Total cash and cash equivalents       20,668         18,946         24,243  
Securities available for sale       220,201         192,277         146,813  
Loans, net of unearned income       772,219         749,361         666,783  
Allowance for loan losses       (9,731 )       (9,623 )       (9,082 )
Loans, net       762,488         739,738         657,701  
Mortgage loans held for sale, net       45,322         19,475         11,831  
Accrued interest receivable       5,744         4,999         3,786  
Premises and equipment, net       9,790         9,558         9,093  
Restricted equity securities, at cost       7,774         7,163         7,133  
Cash surrender value of life insurance contracts       33,663         29,422         24,827  
Deferred tax assets, net       1,250         2,776         3,437  
Goodwill       11,404         11,404         11,404  
Core deposit intangibles       1,280         1,336         1,582  
Other assets       5,450         4,086         10,134  
                   
TOTAL ASSETS     $ 1,125,034       $ 1,041,180       $ 911,984  
                   

LIABILITIES AND STOCKHOLDERS’ EQUITY

                   
LIABILITIES                  
Deposits                  
Demand     $ 131,996       $ 132,058       $ 134,792  
Interest-bearing demand       88,230         79,439         85,478  
Savings and money market deposit accounts       205,230         197,521         183,788  
Time       458,063         431,430         359,776  
Total deposits       883,519         840,448         763,834  
Accrued interest payable       305         220         107  
Federal funds purchased       -         -         3,671  
Federal Home Loan Bank advances       96,747         56,720         32,287  
Dividends payable       542         541         1,711  
Other liabilities       3,784         5,307         3,455  
                   
TOTAL LIABILITIES       984,897         903,236         805,065  
                   
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; 9,034,439, 9,022,098 and 7,778,309 shares issued and outstanding at December 31, 2017, September 30, 2017 and December 31, 2016, respectively

      9,034         9,022         7,778  
Additional paid-in capital       112,437         112,202         89,045  
Retained earnings       17,192         16,821         12,212  
Accumulated other comprehensive income (loss)       1,474         (101 )       (2,116 )
                   
TOTAL STOCKHOLDERS’ EQUITY       140,137         137,944         106,919  
                   
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY     $ 1,125,034       $ 1,041,180       $ 911,984  
                   

 

             

RELIANT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

             
      Three Months Ended     Year Ended
      December 31,     September 30,     December 31,     December 31,     December 31,
      2017     2017     2016     2017     2016
INTEREST INCOME                              
Interest and fees on loans     $ 8,983       $ 9,078       $ 7,894       $ 34,176       $ 31,905
Interest and fees on loans held for sale       448         211         110         868       $ 773
Interest on investment securities, taxable       177         179         135         691         724
Interest on investment securities, nontaxable       1,108         1,022         705         3,904         2,211
Federal funds sold and other       138         137         104         519         402
                               
TOTAL INTEREST INCOME       10,854         10,627         8,948         40,158         36,015
                               
INTEREST EXPENSE                              
Deposits                              
Demand       42         42         45         173         182
Savings and money market deposit accounts       191         207         152         748         632
Time       1,432         1,117         575         4,095         1,835
Federal Home Loan Bank advances and other       272         165         133         655         714
                               
TOTAL INTEREST EXPENSE       1,937         1,531         905         5,671         3,363
                               
NET INTEREST INCOME       8,917         9,096         8,043         34,487         32,652
                               
PROVISION FOR LOAN LOSSES       121         540         208         1,316         968
                               
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES       8,796         8,556         7,835         33,171         31,684
                               
NONINTEREST INCOME                              
Service charges on deposit accounts       315         309         313         1,251         1,239
Gains on mortgage loans sold, net       924         1,571         642         3,675         6,317
Gain on securities transactions, net       -         -         (320 )       59         36
Gain on sale of other real estate       1         1         -         27         301
Loss on disposal of premises and equipment       (2 )       (50 )       -         (52 )       -
Other       315         256         234         1,050         907
                               
TOTAL NONINTEREST INCOME       1,553         2,087         869         6,010         8,800
                               
NONINTEREST EXPENSE                              
Salaries and employee benefits       4,798         4,880         3,962         18,432         18,256
Occupancy       871         850         768         3,353         3,174
Information technology       791         732         637         2,715         2,486
Advertising and public relations       60         81         160         264         702
Audit, legal and consulting       1,218         1,046         294         2,865         1,287
Federal deposit insurance       79         100         89         399         438
Provision for losses on other real estate       -         -         -         -         70
Other operating       625         808         917         3,048         3,961
                               
TOTAL NONINTEREST EXPENSE       8,442         8,497         6,827         31,076         30,374
                               
INCOME BEFORE PROVISION FOR INCOME TAXES       1,907         2,146         1,877         8,105         10,110
                               
INCOME TAX EXPENSE       937         306         438         1,942         2,213
                               
CONSOLIDATED NET INCOME       970         1,840         1,439         6,163         7,897
                               

NONCONTROLLING INTEREST IN NET LOSS OF SUBSIDIARY

      185         6         532         1,083         1,039
                               
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS     $ 1,155       $ 1,846       $ 1,971       $ 7,246       $ 8,936
                               
Basic net income attributable to common shareholders, per share     $ 0.13       $ 0.23       $ 0.26       $ 0.89       $ 1.18
Diluted net income attributable to common shareholders, per share     $ 0.13       $ 0.22       $ 0.25       $ 0.88       $ 1.16
                               

 

                               

RELIANT, INC.

SEGMENT FINANCIAL INFORMATION

FOR THE PERIODS INDICATED

(Dollar Amounts in Thousands)

(Unaudited)

                               

Retail Banking

    Three Months Ended     Year Ended
      December 31,     September 30,     December 31,     December 31,     December 31,
      2017     2017     2016     2017     2016
Net interest income     $ 8,537       $ 8,924       $ 7,953       $ 33,761       $ 32,035  
Provision for loan losses       121         540         208         1,316         968  
Noninterest income       629         516         228         2,333         2,481  
Noninterest expense       6,943         6,748         5,527         25,524         22,327  
Income before provision for income taxes       2,102         2,152         2,446  

 

    9,254         11,221  
Income tax expense       947         306         475         2,008         2,285  
Net income attributable to common shareholders     $ 1,155       $ 1,846       $ 1,971  

 

  $ 7,246       $ 8,936  
                               
                               

Residential Mortgage Banking

    Three Months Ended     Year Ended
      December 31,     September 30,     December 31,     December 31,     December 31,
      2017     2017     2016     2017     2016
Net interest income     $ 380       $ 172       $ 90       $ 726       $ 617  
Provision for loan losses       -         -         -         -         -  
Noninterest income       924         1,571         641         3,677         6,319  
Noninterest expense       1,499         1,749         1,300         5,552         8,047  
Loss before provision for income taxes       (195 )       (6 )       (569 )       (1,149 )       (1,111 )
Income tax benefit       (10 )       -         (37 )       (66 )       (72 )
Net loss       (185 )       (6 )       (532 )       (1,083 )       (1,039 )
Noncontrolling interest in net loss of subsidiary       185         6         532         1,083         1,039  
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,     September 30,     June 30,     March 31,     December 31,
        2017     2017     2017     2017     2016
  Selected Income Statement Data                              
  Total interest income     $ 10,854     $ 10,627     $ 9,704     $ 8,973     $ 8,948
  Total interest expense       1,937       1,531       1,201       1,002       905
  Net interest income       8,917       9,096       8,503       7,971       8,043
  Provision for loan losses       121       540       245       410       208
 

Net interest income after provision for loan losses

      8,796       8,556       8,258       7,561       7,835
  Noninterest income       1,553       2,087       1,231       1,139       869
  Noninterest expense       8,442       8,497       7,268       6,869       6,827
  Income tax expense       937       306       427       272       438
  Consolidated net income       970       1,840       1,794       1,559       1,439
 

Noncontrolling interest in net (income) loss of subsidiary

      185       6       393       499       532
  Net income attributable to common shareholders       1,155       1,846       2,187       2,058       1,971
                                 
  Per Common Share Data                              
 

Net income attributable to common shareholders, per share

                             
  Basic     $ 0.13     $ 0.23     $ 0.28     $ 0.27     $ 0.26
  Diluted     $ 0.13     $ 0.22     $ 0.28     $ 0.26     $ 0.25
  Book value per common share     $ 15.51     $ 15.29     $ 14.36     $ 14.00     $ 13.75
  Tangible book value per common share     $ 14.11     $ 13.88     $ 12.73     $ 12.36     $ 12.08
  Basic weighted average common shares       8,942,656       8,174,973       7,775,179       7,741,305       7,719,126
  Diluted weighted average common shares       9,039,050       8,280,858       7,873,126       7,876,978       7,853,581
  Common shares outstanding at period end       9,034,439       9,022,098       7,839,562       7,826,450       7,778,309
                                 
  Selected Balance Sheet Data                              
  Total assets     $ 1,125,034     $ 1,041,180     $ 1,003,950     $ 962,465     $ 911,984
  Securities available for sale       220,201       192,277       184,789       179,266       146,813
  Loans, net of unearned income       772,219       749,361       719,834       697,632       666,783
  Allowance for loan losses       9,731       9,623       9,385       9,090       9,082
  Mortgage loans held for sale       45,322       19,475       12,031       9,798       11,831
  Other real estate       -       -       -       -       -
  Goodwill       11,404       11,404       11,404       11,404       11,404
  Core deposit intangibles       1,280       1,336       1,404       1,493       1,582
  Non-interest bearing deposits       131,996       132,058       136,467       135,939       134,792
  Total deposits       883,519       840,448       840,014       826,183       763,834
  Federal Home Loan Bank advances       96,747       56,720       44,910       24,099       32,287
  Total stockholders' equity       140,137       137,944       112,589       109,595       106,919
  Average loans       755,844       727,453       703,596       673,036       657,203
  Average earning assets (1)       1,012,932       955,724       919,463       870,386       851,652
  Average total assets       1,072,812       1,010,536       972,112       926,282       902,547
  Average stockholders' equity       135,332       119,427       109,637       106,726       107,529
                                 

(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.

                                 

 

                                 

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,     September 30,     June 30,     March 31,     December 31,
        2017     2017     2017     2017     2016
  Selected Asset Quality Measures                              
  Nonaccrual loans     $ 5,161       $ 4,950       $ 5,856       $ 5,497       $ 5,634  
  90+ days past due still accruing       -         200         251         -         -  
  Total nonperforming loans       5,161         5,150         6,107         5,497         5,634  
  Total nonperforming assets (1)       5,161         5,150         6,107         5,497         5,634  
  Net charge offs (recoveries)       12         302         (49 )       401         (74 )
  Nonperforming loans to total loans       0.67 %       0.69 %       0.85 %       0.79 %       0.84 %
  Nonperforming assets to total assets       0.46 %       0.49 %       0.61 %       0.57 %       0.62 %
  Nonperforming assets to total loans and other real estate       0.67 %       0.69 %       0.85 %       0.79 %       0.84 %
  Allowance for loan losses to total loans       1.26 %       1.28 %       1.30 %       1.30 %       1.36 %
  Allowance for loan losses to nonperforming loans       188.55 %       186.85 %       153.68 %       165.36 %       161.20 %
  Net charge offs (recoveries) to average loans (2)       0.01 %       0.17 %       (0.03 %)       0.24 %       (0.05 %)
                                 
                                 
  Capital Ratios (Bank Subsidiary Only)                              
  Tier 1 leverage      

11.68

%       12.20 %       10.29 %       10.69 %       10.75 %
  Common equity tier 1      

13.67

%       14.20 %       12.08 %       12.50 %       12.89 %
  Tier 1 risk-based capital      

13.67

%       14.20 %       12.08 %       12.50 %       12.89 %
  Total risk-based capital      

14.74

%       15.33 %       13.23 %       13.67 %       14.11 %
                                 
  Selected Performance Ratios (2) (3)                              
  Return on average assets (ROA)       0.43 %       0.73 %       0.90 %       0.89 %       0.87 %
  Return on average stockholders' equity (ROE)       3.41 %       6.18 %       7.98 %       7.71 %       7.33 %
  Net interest margin       3.80 %       4.08 %       4.01 %       4.01 %       4.03 %
                                 

(1)

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

(2)

Data has been annualized

(3)

Return on average assets is defined as net income attributable to common shareholders divided by average total assets; return on average stockholders’ equity is defined as net income attributable to common shareholders divided by average stockholders’ equity; net interest margin is defined as net interest income calculated on a tax-equivalent basis divided by average earning assets

                                 

 

               

RELIANT BANCORP, INC.

YIELD TABLES

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016

(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 three months ended December 31, 2017 and 2016:

               
     

Three Months Ended
December 31, 2017

 

Three Months Ended
December 31, 2016

  Change
     

Average
Balances

 

Rates /
Yields
(%)

 

Interest
Income /
Expense

 

Average
Balances

 

Rates /
Yields
(%)

 

Interest
Income/
Expense

 

Due to
Volume

 

Due to
Rate

  Total
Interest earning assets                                      
Loans     $ 755,844   4.56     $ 8,512   $ 657,203   4.55     $ 7,348   $ 1,147     $ 17     $ 1,164  
Loan fees       -   0.25       471     -   0.33       546     (75 )     -       (75 )
Loans with fees       755,844   4.81       8,983     657,203   4.88       7,894     1,072       17       1,089  
Mortgage loans held for sale       36,134   4.92       448     11,205   3.91       110     303       35       338  
Deposits with banks       14,530   0.74       27     19,021   0.33       16     (23 )     34       11  
Investment securities - taxable       29,179   2.41       177     30,332   1.77       135     (32 )     74       42  
Investment securities - tax-exempt       169,549   4.01       1,108     126,465   3.52       705     286       117       403  
Fed funds sold and other       7,696   5.72       111     7,426   4.71       88     3       20       23  
Total earning assets       1,012,932   4.55       10,854     851,652   4.45       8,948     1,609       297       1,906  
Nonearning assets       59,880             50,895                    
Total Assets     $ 1,072,812           $ 902,547                    
Interest bearing liabilities                                      
Interest bearing demand       83,763   0.21      

42

    86,288   0.21       45     -       -       -  
Savings and money market       186,846   0.41       191     180,731   0.33       152     5       34       39  
Time deposits - retail       351,093   1.28      

1,132

    209,600   0.7       369     342       420       762  
Time deposits - wholesale       91,143   1.31       300     94,939   0.86       206     (55 )     149       94  
Total interest bearing deposits       712,845   0.93      

1,665

    571,558   0.54       772     292       603       895  
Federal Home Loan Bank advances       79,527   1.36       272     79,165   0.67       133     1       138       139  
Total interest-bearing liabilities       792,372   0.97       1,939     650,723   0.55       905     293       741       1,034  
Net interest rate spread (%) / Net Interest Income ($)         3.58     $

8,917

      3.90     $ 8,043   $ 1,316     $ (444 )   $ 872  
Non-interest bearing deposits       133,108   (0.13 )         139,896   (0.09 )                
Other non-interest bearing liabilities       12,000             4,399                    
Stockholder's equity       135,332             107,529                    
Total liabilities and stockholders' equity     $ 1,072,812           $ 902,547                    
Cost of funds         0.84             0.46                  
Net interest margin         3.80             4.03                  
                                       

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.

YIELD TABLES

FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(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 years ended December 31, 2017 and 2016:

               
     

Year Ended
December 31, 2017

 

Year Ended
December 31, 2016

  Change
     

Average
Balances

 

Rates /
Yields
(%)

 

Interest
Income /
Expense

 

Average
Balances

 

Rates /
Yields
(%)

 

Interest
Income /
Expense

 

Due to
Volume

 

Due to
Rate

  Total
Interest earning assets                                      
Loans     $ 714,982   4.59     $ 32,164   $ 640,592   4.78     $ 29,950   $ 3,463     $ (1,249 )   $ 2,214  
Loan fees       -   0.28       2,012     -   0.31       1,955     57       -       57  
Loans with fees       714,982   4.87       34,176     640,592   5.09       31,905     3,520       (1,249 )     2,271  
Mortgage loans held for sale       19,016   4.56       868     21,064   3.67       773     (80 )     175       95  
Deposits with banks       15,177   0.71       107     20,240   0.35       70     (22 )     59       37  
Investment securities - taxable       31,557   2.19       691     40,463   1.79       724     (177 )     144       (33 )
Investment securities - tax-exempt       151,446   4.02       3,904     105,536   3.39       2,211     1,186       507       1,693  
Fed funds sold and other       7,769   5.30       412     7,442   4.46       332     15       65       80  
Total earning assets       939,947   4.58       40,158     835,337   4.56       36,015     4,442       (299 )     4,143  
Nonearning assets       55,489             49,737                    
Total Assets     $ 995,436           $ 885,074                    
Interest bearing liabilities                                      
Interest bearing demand       84,171   0.21       173     88,775   0.21       182     (9 )     -       (9 )
Savings and money market       196,939   0.38       748     186,473   0.34       632     38       78       116  
Time deposits - retail       319,456   0.98       3,126     159,351   0.70       1,116     1,438       572       2,010  
Time deposits - wholesale       88,114  

1.10

      969     102,626   0.7       719     (114 )     364       250  
Total interest bearing deposits       688,680   0.73       5,016     537,225   0.49       2,649     1,353       1,014       2,367  
Federal Home Loan Bank advances and other       50,730   1.29       655     111,290   0.64       714     (526 )     467       (59 )
Total interest-bearing liabilities       739,410   0.77       5,671     648,515   0.52       3,363     827       1,481       2,308  
Net interest rate spread (%) / Net Interest Income ($)         3.81     $ 34,487       4.04     $ 32,652   $ 3,615     $ (1,780 )   $ 1,835  
Non-interest bearing deposits       134,408   (0.12 )         127,619   (0.09 )                
Other non-interest bearing liabilities       3,838             4,724                    
Stockholder's equity       117,780             104,216                    
Total liabilities and stockholders' equity     $ 995,436           $ 885,074                    
Cost of funds         0.65             0.43                  
Net interest margin         3.97             4.15                  
                                       

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.

SELECTED QUARTERLY FINANCIAL DATA

AT OR FOR THE THREE MONTHS ENDED

NON-GAAP FINANCIAL MEASURES

(Dollar Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

             
      Three Months Ended     Year Ended
      December 31,     September 30,     December 31,     December 31,     December 31,
      2017     2017     2016     2017     2016
NON-GAAP FINANCIAL MEASURES                              
Adjusted net interest margin (1)                              
Net interest income     $ 8,917       $ 9,096       $ 8,043       $ 34,487       $ 32,652  
Purchase accounting adjustments       (141 )       (121 )       (162 )       (505 )       (1,414 )

Interest income recognized on payoff of purchased credit impaired loan

      -         (354 )       -         (354 )       (619 )
Adjusted net interest income     $ 8,776       $ 8,621       $ 7,881       $ 33,628       $ 30,619  
Adjusted net interest margin       3.74 %       3.88 %       3.95 %       3.88 %       3.91 %
                               

Adjusted Net Income Attributable to Common Shareholders and Related Impact on ROA, ROE, and Earnings per Diluted Share (1)

                             

Net income attributable to common shareholders

    $ 1,155       $ 1,846       $ 1,971       $ 7,246       $ 8,936  

Interest income recognized on payoff of purchased credit impaired loan, net of taxes

      -         (218 )       -         (218 )       (382 )
Purchase accounting adjustments, net of taxes       (19 )       (19 )       (55 )       (71 )       (694 )
Gain on securities transactions, net of taxes       -         -         197         (36 )       (22 )
Gain on sale of other real estate, net of taxes       (1 )       (1 )       -         (18 )       (186 )
Loss on disposal of premises and equipment, net of taxes       1         31         -         32         -  
Merger expenses, net of taxes       620         460         -         1,080         -  
Deferred tax asset revaluation       620         -         -         620         -  

Adjusted net income attributable to common shareholders, per diluted share

    $ 2,376       $ 2,099       $ 2,113       $ 8,635       $ 7,652  
Adjusted return on average assets       0.89 %       0.83 %       0.94 %       0.87 %       0.86 %
Adjusted return on average stockholders' equity       7.02 %       7.03 %       7.86 %       7.33 %       7.34 %

Adjusted net income attributable to common shareholders, per diluted share

    $ 0.26       $ 0.25       $ 0.27       $ 1.05       $ 0.99  
                               

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

   

 

                       
Non-interest expense     $ 5,691       $ 5,747       $ 5,169       $ 22,605       $ 21,001  
                               
Net interest income       8,537         8,924         7,953         33,762         32,036  

Tax equivalent adjustment for tax exempt interest income

      613         566         414         2,183         1,362  
Non-interest income       629         516         228         2,333         2,482  
Less gain on sale of other real estate and other assets       (1 )       (1 )       -         (27 )       (295 )
Less (gain) loss on sale of securities       -         -         320         (59 )       (36 )
Add loss on disposal of premises and equipment       2         50         -         52         -  
Adjusted operating income     $ 9,780       $ 10,055       $ 8,915       $ 38,244       $ 35,549  
                               
Efficiency Ratio       58.19 %       57.16 %       57.98 %       59.11 %       59.08 %
                               

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

                               

 

Reliant Bancorp, Inc.
DeVan Ard, 615-221-2020
Chairman, President and Chief Executive Officer

Source: Reliant Bancorp, Inc.