Fourth Quarter Shareholder Letter

January 29, 2014


Dear Shareholder:

Our unaudited financial highlights for 2013 are presented on the back of this letter. Net income of $3.2 million ($0.83/share) was a record for Reliant Bank. The 47.5% increase in earnings over 2012 was driven by a 4% gain in net interest income and a 65% decline in credit-related expenses.  In fact, asset quality was the story of the year. Problem loans dropped to pre-recession levels, and recoveries of loans previously charged-off exceeded $1.3 million, resulting in a very strong reserve at year end. Loan demand also increased in 2013 as the local and regional economies gained strength on higher levels of construction activity and lower unemployment. We originated over $106 million in new loans in 2013, a 14% increase over 2012. Growth in loans outstanding, however, was muted as consumers and businesses took advantage of low rates to refinance existing loans. We expect that trend to diminish in 2014.  


Strong earnings and capital gave us the opportunity to pay our first dividend, $0.20 per share to shareholders of record on December 15, 2013. The board of directors considered several factors when evaluating the dividend, including short term earnings and growth forecasts, and the need to preserve capital for strategic initiatives. We felt it was appropriate to begin to provide a tangible return to our shareholders.


Earlier in this letter I commented on the local and regional economies. Though we remain optimistic about the long term growth prospects for Middle Tennessee, the prolonged period of low interest rates that we are in poses unique challenges to our industry. Loan yields have declined for over two years, and our main revenue source is our loan portfolio. Our goal is to make quality loans, even at lower rates, and build long term relationships with our customers that will generate good earnings through the economic cycle. You can certainly play a role in that and I’d like to encourage you to call on us with your credit needs, both personal and business.


In closing, we want to thank all of you for your support and your banking business. Please think of us first for your banking needs, whether that means a savings account for a child or grandchild, a construction loan, a mortgage for your home, or a business loan to support growing business. We also enhanced our mobile banking service in the fourth quarter by allowing customers to make check deposits through their smart phones. We hope you will stop by any of our four offices in Williamson and Davidson Counties and let our team show you what “Clearly Better” banking is all about.



DeVan D. Ard, Jr.                         Farzin Ferdowsi
President and CEO                      Chairman of the Board


Fourth Quarter 2013 Selected Financial Data