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Reliant Bancorp, Inc. Reports Record Second Quarter 2021 Results

Reliant Bancorp, Inc. (“Reliant Bancorp” or the “Company”) (Nasdaq: RBNC), parent company of Reliant Bank (the “Bank”), reported net income attributable to common shareholders of $13.0 million, or $0.78 per diluted common share, for the second quarter of 2021 compared to net income attributable to common shareholders of $12.1 million, or $0.73 per diluted common share, for the first quarter of 2021, and $7.9 million, or $0.48 per diluted common share, for the second quarter of 2020.

DeVan Ard, Jr., Reliant Bancorp's Chairman and CEO stated, “I am very pleased to continue 2021 with solid second quarter results as evidenced by our record earnings, sound asset quality, and increasing loan production. Loan growth has continued to accelerate with a 1.9% increase from the prior quarter. When PPP loans are excluded, loan growth increases to 3.2%, or 12.8% when annualized.”

Ard continued, “Our team delivered another outstanding quarter of deposit growth. Balances in non-time deposits - checking, savings, and money market deposits - grew 6.3%, or 25.1% annualized, during the second quarter, which can be largely attributed to the effort by our team to build lasting relationships with our customers. We also continued to build shareholder value as our book value and tangible book value per share increased 4.3% and 5.5%, respectively, from the prior quarter, or 17.1% and 22.1%, respectively, when annualized. Additionally, shareholders’ equity to total assets and tangible common equity to tangible assets have increased to 11.18% and 9.28%, respectively, which positions us for further growth opportunities and allows us to continue to deliver exceptional shareholder returns.”

Second Quarter Highlights
Dollar Amounts in Thousands, Except Per Share Amounts

2021

2020

Second Quarter

First Quarter

Second Quarter

Results of Operations Highlights

Net income attributable to common shareholders

$

13,045

$

12,149

$

7,868

Net income per diluted common share

$

0.78

$

0.73

$

0.48

Net interest margin (NIM) (1)

4.14

%

4.51

%

4.58

%

Adjusted NIM (2)

4.28

%

4.24

%

3.81

%

Adjusted pre-tax pre-provision income (2)

$

16,387

$

15,699

$

12,114

Efficiency ratio (tax equivalent basis)

54.1

%

56.4

%

62.7

%

Bank segment adjusted efficiency ratio (2)

49.1

%

50.8

%

50.7

%

Balance Sheet Highlights

Loans

$

2,321,070

$

2,277,714

$

2,317,324

Allowance for loan losses

(20,894

)

(20,785

)

(18,237

)

Total assets

3,098,464

3,057,066

2,990,126

Total deposits

2,629,840

2,612,910

2,530,014

Book value per share

$

20.77

$

19.92

$

17.77

Tangible book value per share (2)

$

16.88

$

16.00

$

13.96

Return on average: (3)

Assets ("ROAA")

1.69

%

1.64

%

1.07

%

Equity ("ROAE")

15.41

%

15.07

%

10.95

%

Tangible common equity ("ROATCE") (2)

19.07

%

18.84

%

14.04

%

(1)

Net interest margin is the result of annualized net interest income calculated on a tax-equivalent basis divided by average interest-earning assets for the period.

(2)

Certain measures are considered non-GAAP financial measures. See “Reconciliation of Non-GAAP Financial Measures.”

(3)

Data has been annualized.

Profitability Remains Strong Through Asset Mix Optimization

Net interest margin decreased to 4.14% at June 30, 2021, a decrease of 37 basis points from the previous quarter and a decrease of 44 basis points from the second quarter of 2020. The linked quarter decrease was primarily due to a 30 basis point increase in our cost of funds due to a $2,859 swap termination fee incurred during the quarter. The adjusted net interest margin, which excludes this fee impact as well as the benefits from purchase accounting accretion, showed continued improvement as it increased 4 basis points from the linked quarter to 4.28%. Net income and earnings per share during the quarter were not affected by this termination fee as securities were sold for a gain of $2,966 to offset the transaction.

Loan yields remain strong at 5.58% with a decrease of 5 basis points from the linked quarter. The 40 basis point decrease from the same period in the prior year can largely be attributed to the decrease in purchase accounting accretion. As of June 30, 2021, $13.0 million of purchase accounting accretion and $184 thousand in PPP deferred fees remain to be realized.

While the cost of funds increased to 0.97% during the quarter due to the impact of the swap termination, the cost of interest-bearing retail deposits decreased 40 basis points from the linked quarter and 89 basis points from the same quarter in the prior year driven by a continued focus on improving the funding mix and attracting and retaining core deposits. Deposits increased $16.9 million from the linked quarter and $99.8 million year-over-year with non-time deposits making up $120.7 million and $467.3 million of the increases, respectively. Noninterest-bearing deposits increased $23.8 million from the linked quarter while time deposits decreased $103.7 million.

Ard stated, “Our team continues to attract and retain low cost deposits in a competitive environment, fulfilling one of our strategic goals and helping us to better serve the community's credit needs.”

Continued Loan Growth and Asset Quality Stability

Loans have increased $43.4 million from the linked quarter to $2.3 billion. Loan originations during the quarter totaled $280.2 million at a weighted-average coupon rate of 4.16% with a continued focus on credit quality through sound underwriting. These originations were offset with principal payments, including PPP forgiveness payments of $27.9 million. When PPP loans are excluded, loans increased $71.3 million, or 3.2%, from the linked quarter and $73.0 million, or 3.3%, year-over-year.

Our longstanding focus on credit quality continues to be a source of strength with net recoveries in the first quarter continuing into the second quarter. Nonperforming loans held for investment accounted for 0.23% of total loans held for investment and nonperforming assets accounted for only 0.31% of total assets at June 30, 2021, despite the addition of a retired bank facility to other real estate owned during the quarter. Criticized assets to total loans remains low at 0.87%. The allowance for loan loss was 0.90% of loans (1.46% including unaccreted net purchased loan discounts) at June 30, 2021. There was no provision recognized during the quarter as net charge-offs were in a recovery position for the quarter and year-to-date.

Conclusion

Ard concluded, “I am proud of our team’s ability to serve the community and our shareholders as well as our ability to create meaningful careers and a positive workplace for our employees as evidenced through the Tennesseans recognition as a 2021 Top Workplace. We continue to see increased demand in the loan pipeline as we move into the third quarter, and we are optimistic about our market and financial positions as we continue to build a bright future for Reliant Bank.”

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 June 30, 2021, Reliant Bancorp had approximately $3.1 billion in total consolidated assets, approximately $2.3 billion in loans held for investment 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 identifying and analyzing 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 (NIM),” “adjusted net income,” “adjusted diluted earnings per share (EPS),” “adjusted annualized return on average assets (ROAA),” “adjusted annualized return on average equity (ROAE),” “adjusted annualized return on average tangible common equity (ROATCE),” “adjusted pre-tax pre-provision income,” “tangible common equity to tangible assets (TCE/TA),” “tangible book value per share,” “allowance for loan losses plus unaccreted purchased loan discounts to total loans,” “bank segment adjusted net income,” “bank segment adjusted noninterest expense,” “bank segment adjusted efficiency ratio,” “adjusted cost of funds,” “adjusted cost of interest-bearing liabilities,” and “adjusted cost of deposits.”

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 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 increased demand in the loan pipeline and management’s optimism about the Company’s market and financial positions. 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 effects of the coronavirus (COVID-19) pandemic, including (i) the magnitude and duration of the pandemic and its impact on general economic and financial market conditions and on our business, results of operations, and financial condition and that of our customers, (ii) actions taken by governments, businesses and individuals in response to the coronavirus (COVID-19) pandemic, (iii) the pace of recovery when the coronavirus (COVID-19) pandemic subsides, and (iv) the speed with which coronavirus (COVID-19) vaccines can be widely distributed, those vaccines’ efficacy against the virus and public acceptance of the vaccines, (2) the possibility that our asset quality could decline or that we experience greater loan losses than anticipated, (3) increased levels of other real estate, primarily as a result of foreclosures, (4) the impact of liquidity needs on our results of operations and financial condition, (5) competition from financial institutions and other financial service providers, (6) the effect of interest rate increases on the cost of deposits, (7) unanticipated weakness in loan demand or loan pricing, (8) greater than anticipated adverse conditions in the national economy or local economies in which we operate, including in Middle Tennessee, (9) lack of strategic growth opportunities or our failure to execute on available opportunities, (10) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (11) economic crises and associated credit issues in industries most impacted by the coronavirus (COVID-19) pandemic, including the hotel and retail sectors, (12) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, (13) our ability to effectively manage problem credits, (14) our ability to successfully implement efficiency initiatives on time and with the results projected, (15) our ability to successfully develop and market new products and technology, (16) the impact of negative developments in the financial industry and United States and global capital and credit markets, (17) our ability to retain the services of key personnel, (18) our ability to adapt to technological changes, (19) risks associated with litigation, including reputational and financial risks and the applicability of insurance coverage, (20) 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, (21) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments, (22) 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, (23) the risk of successful integration of the businesses the Company has recently acquired, (24) the ability to meet expectations regarding the timing and completion and accounting and tax treatment of the pending transaction with United Community Banks, Inc. (the “Transaction”), (25) the effect of the announcement and pendency of the Transaction on customer, supplier, or employee relationships and operating results (including without limitation difficulties in maintaining relationships with employees and customers), as well as on the market price of the Company's common stock, (26) the occurrence of any event, change, or other circumstances that could give rise to the termination of the definitive merger agreement for the Transaction, (27) the amount of costs, fees, expenses and charges related to the Transaction, including those arising as a result of unexpected factors or events, (28) the ability to obtain the shareholder and governmental approvals required for the Transaction, (29) reputational risk associated with and the reaction of the parties' customers, suppliers, employees, or other business partners to the Transaction, (30) the failure of any of the conditions to the closing of the Transaction to be satisfied, or any unexpected delay in closing the Transaction, (31) the risk associated with Company management's attention being diverted away from the day-to-day business and operations of the Company to the completion of the Transaction, and (32) general competitive, economic, political, and market conditions, including economic conditions in the local markets where we operate. Additional factors which could affect the forward-looking statements can be found in the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website at http://www.sec.gov. The Company believes the forward-looking statements contained herein are reasonable; however, many of such risks, uncertainties, and other factors are beyond the Company’s ability to control or predict and undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. Therefore, the Company can give no assurance that its future results will be as estimated. The Company does not intend to, and disclaims any obligation to, update or revise any forward-looking statement.

RELIANT BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share amounts)

 

June 30, 2021

March 31, 2021

June 30, 2020

ASSETS

(Unaudited)

(Unaudited)

(Unaudited)

Cash and due from banks

$

11,763

$

13,105

$

12,805

Interest-bearing deposits in financial institutions

43,676

104,620

81,033

Federal funds sold

656

186

638

Total cash and cash equivalents

56,095

117,911

94,476

Securities available for sale

266,695

267,191

249,014

Loans

2,321,070

2,277,714

2,317,324

Less: allowance for loan losses

(20,894)

(20,785)

(18,237)

Loans, net

2,300,176

2,256,929

2,299,087

Mortgage loans held for sale, net

229,418

166,599

101,579

Accrued interest receivable

14,492

14,568

13,579

Premises and equipment, net

29,183

30,879

33,524

Operating leases right of use assets

12,744

13,372

15,452

Restricted equity securities, at cost

15,770

16,146

17,509

Other real estate, net

2,233

1,198

2,514

Cash surrender value of life insurance contracts

78,979

78,423

67,723

Deferred tax assets, net

5,978

7,453

9,787

Goodwill

54,396

54,396

51,058

Core deposit intangibles

10,434

10,891

12,293

Other assets

21,871

21,110

22,531

TOTAL ASSETS

$

3,098,464

$

3,057,066

$

2,990,126

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits

Noninterest-bearing demand

$

602,555

$

578,764

$

534,353

Interest-bearing demand

441,161

397,047

273,993

Savings and money market deposit accounts

1,003,402

950,630

771,505

Time

582,722

686,469

950,163

Total deposits

2,629,840

2,612,910

2,530,014

Accrued interest payable

1,967

3,087

3,100

Subordinated debentures

70,770

70,719

70,413

Federal Home Loan Bank advances

16,000

49,121

Operating leases liabilities

13,932

14,552

16,591

Other liabilities

19,666

24,099

25,344

TOTAL LIABILITIES

2,752,175

2,725,367

2,694,583

Preferred stock, $1 par value per share; 10,000,000 shares authorized; no shares issued to date

Common stock, $1 par value per share; 30,000,000 shares authorized; 16,672,511, 16,654,415, and 16,631,604 shares issued and outstanding at June 30, 2021, March 31, 2021, and June 30, 2020, respectively

16,673

16,654

16,632

Additional paid-in capital

234,390

233,667

232,436

Retained earnings

86,917

75,891

45,351

Accumulated other comprehensive income

8,309

5,487

1,124

TOTAL SHAREHOLDERS’ EQUITY

346,289

331,699

295,543

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

3,098,464

$

3,057,066

$

2,990,126

 

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

RELIANT BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(Dollar amounts in thousands, except per share amounts)

Three Months Ended

June 30,
2021

March 31,

2021

June 30,

2020

INTEREST INCOME

Interest and fees on loans

$

31,183

$

30,989

$

33,447

Interest and fees on loans held for sale

1,807

1,331

815

Interest on investment securities, taxable

663

610

128

Interest on investment securities, nontaxable

1,216

1,225

1,317

Restricted equity securities and other

226

227

208

TOTAL INTEREST INCOME

35,095

34,382

35,915

INTEREST EXPENSE

Deposits

Demand

216

272

218

Savings and money market deposit accounts

647

839

1,476

Time

4,678

2,288

3,135

Federal Home Loan Bank advances and other borrowings

13

4

148

Subordinated debentures

980

953

982

TOTAL INTEREST EXPENSE

6,534

4,356

5,959

NET INTEREST INCOME

28,561

30,026

29,956

PROVISION FOR LOAN LOSSES

3,000

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

28,561

30,026

26,956

NONINTEREST INCOME

Service charges on deposit accounts

1,656

1,561

1,381

Gains on mortgage loans sold, net

2,978

4,928

2,248

Gain (loss) on securities transactions, net

2,966

129

327

Other noninterest income

710

719

466

TOTAL NONINTEREST INCOME

8,310

7,337

4,422

NONINTEREST EXPENSE

Salaries and employee benefits

12,793

13,352

12,464

Occupancy

1,999

2,008

2,026

Data processing and software

2,262

2,229

2,026

Professional fees

358

1,243

680

Regulatory fees

343

361

537

Merger expenses

2,632

Other operating expense

2,729

2,471

1,899

TOTAL NONINTEREST EXPENSE

20,484

21,664

22,264

INCOME BEFORE PROVISION FOR INCOME TAXES

16,387

15,699

9,114

INCOME TAX EXPENSE

3,202

2,980

1,634

CONSOLIDATED NET INCOME

13,185

12,719

7,480

NONCONTROLLING INTEREST IN NET (INCOME) LOSS OF SUBSIDIARY

(140

)

(570

)

388

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

13,045

$

12,149

$

7,868

Basic net income attributable to common shareholders, per share

$

0.79

$

0.73

$

0.48

Diluted net income attributable to common shareholders, per share

$

0.78

$

0.73

$

0.48

 

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

RELIANT BANCORP, INC.

SEGMENT FINANCIAL INFORMATION - UNAUDITED

(Dollar Amounts in Thousands)

 

Three Months Ended

June 30, 2021

Commercial
Banking

Residential
Mortgage
Banking

Elimination
Entries

Consolidated

Net interest income

$

27,440

$

1,121

$

$

28,561

Provision for loan losses

Noninterest income

5,335

3,251

(276

)

8,310

Noninterest expense (excluding merger expense)

16,570

3,914

20,484

Merger expense

Income tax expense

3,160

42

3,202

Net income

13,045

416

(276

)

13,185

Noncontrolling interest in net income of subsidiary

(416

)

276

(140

)

Net income attributable to common shareholders

$

13,045

$

$

$

13,045

 

Three Months Ended

March 31, 2021

Commercial
Banking

Residential
Mortgage
Banking

Elimination
Entries

Consolidated

Net interest income

$

29,133

$

893

$

$

30,026

Provision for loan losses

Noninterest income

2,409

5,033

(105

)

7,337

Noninterest expense (excluding merger expense)

16,460

5,204

21,664

Merger expense

Income tax expense

2,933

47

2,980

Net income

12,149

675

(105

)

12,719

Noncontrolling interest in net income of subsidiary

(675

)

105

(570

)

Net income attributable to common shareholders

$

12,149

$

$

$

12,149

 

Three Months Ended

June 30, 2020

Commercial
Banking

Residential
Mortgage
Banking

Elimination
Entries

Consolidated

Net interest income

$

29,420

$

536

$

$

29,956

Provision for loan losses

3,000

3,000

Noninterest income

2,174

2,240

8

4,422

Noninterest expense (excluding merger expense)

16,433

3,199

19,632

Merger expense

2,632

2,632

Income tax (benefit) expense

1,661

(27

)

1,634

Net (loss) income

7,868

(396

)

8

7,480

Noncontrolling interest in net loss of subsidiary

396

(8

)

388

Net income attributable to common shareholders

$

7,868

$

$

$

7,868

 

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

RELIANT BANCORP, INC.

SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED

 

(Dollar amounts in thousands, except per share amounts)

Three months ended,

June 30, 2021

March 31, 2021

June 30, 2020

Per Common Share

Basic net income

$

0.79

$

0.73

$

0.48

Diluted net income

$

0.78

$

0.73

$

0.48

Adjusted diluted income(1)

$

0.78

$

0.73

$

0.60

Book value

$

20.77

$

19.92

$

17.77

Tangible book value(1)

$

16.88

$

16.00

$

13.96

Shares Outstanding

Basic weighted average common shares

16,616,888

16,615,169

16,496,817

Diluted weighted average common shares

16,784,744

16,740,303

16,529,080

Common shares outstanding at period end

16,672,511

16,654,415

16,631,604

Selected Balance Sheet Data

Loans, net of unearned income

$

2,321,070

$

2,277,714

$

2,317,324

Total assets

3,098,464

3,057,066

2,990,126

Customer deposits

2,320,054

2,350,168

2,177,734

Wholesale and institutional deposits

309,786

262,742

352,280

Total deposits

2,629,840

2,612,910

2,530,014

Total liabilities

2,752,175

2,725,367

2,694,583

Total shareholders' equity

346,289

331,699

295,543

Selected Balance Sheet Data - Quarterly Averages

Loans held for investment

$

2,288,841

$

2,280,379

$

2,302,639

Total assets

3,088,329

3,013,114

2,956,942

Interest-bearing liabilities

2,113,993

2,079,238

2,158,990

Total liabilities

2,748,825

2,686,085

2,667,981

Total shareholders' equity

339,504

327,029

288,961

Selected Performance Ratios

Return on average assets (2)

1.69

%

1.64

%

1.07

%

Return on shareholders' equity (2)

15.41

%

15.07

%

10.95

%

Return on average tangible common equity(1) (2)

19.07

%

18.84

%

14.04

%

Average shareholders' equity to average assets

10.99

%

10.85

%

9.77

%

Net interest margin (tax-equivalent basis) (2)

4.14

%

4.51

%

4.58

%

Efficiency Ratio (tax-equivalent basis)

54.1

%

56.4

%

62.7

%

Bank Segment efficiency ratio (1)

49.1

%

50.8

%

50.7

%

Loans held for investment to deposits ratio

88.3

%

87.2

%

91.6

%

Interest Rates and Yields (2)

Yield on interest-earning assets

5.05

%

5.14

%

5.45

%

Yield on loans held for investment

5.58

%

5.63

%

5.98

%

Cost of interest-bearing liabilities

1.24

%

0.85

%

1.11

%

Adjust cost of interest-bearing liabilities (1)

0.70

%

0.85

%

1.11

%

Cost of funds

0.97

%

0.67

%

0.91

%

Adjusted cost of funds (1)

0.54

%

0.67

%

0.91

%

Cost of total deposits

0.83

%

0.51

%

0.79

%

Adjusted cost of total deposits (1)

0.41

%

0.51

%

0.79

%

Preliminary Consolidated Capital Ratios (3)

Tier 1 leverage

9.47

%

9.33

%

8.47

%

Common equity tier 1

10.18

%

10.41

%

9.25

%

Tier 1 risk-based capital

10.62

%

10.88

%

9.71

%

Total risk-based capital

13.62

%

14.09

%

12.80

%

Selected Asset Quality Measures

Allowance for loan losses to total loans

0.90

%

0.91

%

0.79

%

Allowance for loan losses and purchase loan discounts to total loans

1.46

%

1.56

%

1.73

%

Net (recoveries) charge offs

$

(109

)

$

(149

)

$

(116

)

Net (recoveries) charge offs to average loans (2)

(0.02

)%

(0.03

)%

(0.02

)%

Total nonperforming loans held for investment (HFI)

$

5,355

$

6,110

$

7,549

Total nonperforming assets (4)

$

9,726

$

9,661

$

11,571

Nonperforming loans HFI to total loans HFI

0.23

%

0.27

%

0.33

%

Nonperforming assets to total assets

0.31

%

0.32

%

0.39

%

Nonperforming assets to total loans HFI and NPAs

0.42

%

0.42

%

0.50

%

(1)

Certain measures are considered non-GAAP financial measures. See “Reconciliation of Non-GAAP Financial Measures”.

(2)

Data has been annualized.

(3)

Current quarter capital ratios are estimated

(4)

Nonperforming assets consist of nonperforming loans held for investment, nonperforming loans held for sale, repossessed assets, and other real estate.

 

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

June 30, 2021

Three Months Ended

March 31, 2021

Three Months Ended

June 30, 2020

Average
Balances (1)

Rates /
Yields
(%)

Interest
Income /
Expense

Average
Balances (1)

Rates /
Yields
(%)

Interest
Income /
Expense

Average
Balances (1)

Rates /
Yields
(%)

Interest
Income /
Expense

Interest earning assets

Loans (2) (3)

$

2,288,841

5.12

$

28,539

$

2,280,379

5.15

$

28,288

$

2,302,639

5.68

$

31,708

Loan fees

0.46

2,644

0.48

2,701

0.30

1,739

Loans with fees

2,288,841

5.58

31,183

2,280,379

5.63

30,989

2,302,639

5.98

33,447

Mortgage loans held for sale

232,850

3.11

1,807

169,747

3.18

1,331

85,313

3.84

815

Deposits with banks

58,619

0.36

52

61,939

0.34

52

66,052

0.30

50

Investment securities - taxable

73,368

3.62

663

65,499

3.78

610

66,234

0.78

128

Investment securities - tax-exempt (4)

197,309

3.19

1,216

198,034

3.24

1,225

193,216

3.51

1,317

Restricted equity securities and other

17,816

3.92

174

17,321

4.10

175

21,950

2.90

158

Total earning assets

2,868,803

5.05

35,095

2,792,919

5.14

34,382

2,735,404

5.45

35,915

Nonearning assets

219,526

220,195

221,538

Total assets

$

3,088,329

$

3,013,114

$

2,956,942

Interest bearing liabilities

Interest bearing demand

$

412,117

0.21

$

216

$

377,714

0.29

$

272

$

279,092

0.31

$

218

Savings and money market

972,082

0.27

647

901,444

0.38

839

731,278

0.81

1,476

Time deposits - retail

443,512

0.94

1,042

494,508

1.15

1,404

749,566

1.19

2,217

Time deposits - wholesale

192,954

7.56

3,636

227,513

1.58

884

201,307

1.83

918

Total interest-bearing deposits

2,020,665

1.10

5,541

2,001,179

0.69

3,399

1,961,243

0.99

4,829

Federal Home Loan Bank advances and other borrowings

22,582

0.23

13

7,467

0.22

4

127,350

0.47

148

Subordinated debt

70,746

5.56

980

70,592

5.48

953

70,397

5.61

982

Total borrowed funds

93,328

4.27

993

78,059

4.97

957

197,747

2.30

1,130

Total interest-bearing liabilities

2,113,993

1.24

6,534

2,079,238

0.85

4,356

2,158,990

1.11

5,959

Net interest spread (5)

3.81

28,561

4.29

30,026

4.34

29,956

Noninterest bearing deposits

597,188

(0.27

)

565,770

(0.18

)

468,575

(0.20

)

Other noninterest bearing liabilities

37,644

41,077

40,416

Shareholders' equity

339,504

327,029

288,961

Total liabilities and shareholders' equity

$

3,088,329

$

3,013,114

$

2,956,942

Cost of funds

0.97

0.67

0.91

Net interest margin (6)

4.14

4.51

4.58

(1)

Calculated using daily averages.

(2)

Average loan balances include nonaccrual loans.

(3)

Yields on loans reflects tax-exempt interest and state tax credits received on low or zero percent interest loans made to construct low income housing of $667, $661, and $790, for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively.

(4)

Yields on tax-exempt securities are shown on a tax-equivalent basis.

(5)

Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities.

(6)

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.
 

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

RELIANT BANCORP, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES-UNAUDITED

(Dollar Amounts in Thousands, Except Per Share Amounts)

 

Three Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

Adjusted net interest margin (1):

Net interest income

$

28,561

$

30,026

$

29,956

Add: tax equivalent interest income

1,021

1,019

1,161

Add: swap termination fees

2,859

Less: purchase accounting adjustments

(1,839

)

(1,844

)

(5,232

)

Adjusted net interest income

30,602

29,201

25,885

Average Earning Assets

$

2,868,803

$

2,792,919

$

2,735,404

Net interest margin-tax equivalent

4.14

%

4.51

%

4.58

%

Adjusted net interest margin

4.28

%

4.24

%

3.81

%

Adjusted net income (2):

Net income (loss) attributable to common shareholders

$

13,045

$

12,149

$

7,868

Add: merger related expenses

2,632

Less: income tax impact of merger related expenses

(565

)

Adjusted net income

$

13,045

$

12,149

$

9,935

Adjusted diluted earnings per share:

Adjusted net income

$

13,045

$

12,149

$

9,935

Weighted average shares - diluted

16,784,744

16,740,303

16,529,080

Diluted earnings (loss) per share

$

0.78

$

0.73

$

0.48

Adjusted diluted earnings per share

$

0.78

$

0.73

$

0.60

Adjusted annualized return on average assets:

Adjusted net income

$

13,045

$

12,149

$

9,935

Average assets

3,088,329

3,013,114

2,956,942

Annualized return on average assets

1.69

%

1.64

%

1.07

%

Adjusted annualized return on average assets

1.69

%

1.64

%

1.35

%

Adjusted annualized return on average equity:

Adjusted net income

$

13,045

$

12,149

$

9,935

Average total shareholders' equity

339,504

327,029

288,961

Annualized return on average equity

15.41

%

15.07

%

10.95

%

Adjusted annualized return on average equity

15.41

%

15.07

%

13.83

%

Adjusted annualized return on average tangible common equity:

Average total shareholders' equity

$

339,504

$

327,029

$

288,961

Less: average intangible assets

(65,088

)

(65,531

)

(63,594

)

Average tangible common equity

$

274,416

$

261,498

$

225,367

Adjusted net income

13,045

12,149

9,935

Annualized return on average tangible common equity

19.07

%

18.84

%

14.04

%

Adjusted annualized return on average tangible common equity

19.07

%

18.84

%

17.73

%

Adjusted pre-tax pre-provision income:

Income (loss) before provision for income taxes

$

16,387

$

15,699

$

9,114

Add: merger related expenses

2,632

Add: provision for loan losses

3,000

Adjusted pre-tax pre-provision income

$

16,387

$

15,699

$

14,746

Tangible common equity to tangible assets:

Tangible common equity:

Total shareholders' equity

$

346,289

$

331,699

$

295,543

Less: intangible assets

(64,830

)

(65,287

)

(63,351

)

Tangible common equity

$

281,459

$

266,412

$

232,192

Tangible assets:

Total assets

$

3,098,464

$

3,057,066

$

2,990,126

Less: intangible assets

(64,830

)

(65,287

)

(63,351

)

Tangible assets

$

3,033,634

$

2,991,779

$

2,926,775

Total shareholders' equity to total assets

11.18

%

10.85

%

9.88

%

Tangible common equity to tangible assets

9.28

%

8.90

%

7.93

%

Tangible book value per share:

Tangible common equity

$

281,459

$

266,412

$

232,192

Total shares of common stock outstanding

16,672,511

16,654,415

16,631,604

Book value per common share

$

20.77

$

19.92

$

17.77

Tangible book value per share

$

16.88

$

16.00

$

13.96

Allowance for loan losses plus unaccreted loan purchase discounts:

Allowance for loan losses

$

20,894

$

20,785

$

18,237

Unaccreted loan purchase discounts

12,980

14,833

21,939

Allowance for loan losses plus unaccreted loan purchase discounts:

$

33,874

$

35,618

$

40,176

Total loans

2,321,070

2,277,714

2,317,324

Allowance for loan losses plus unaccreted purchased loan discounts to total loans

1.46

%

1.56

%

1.73

%

Allowance for loan losses to total loans

0.90

%

0.91

%

0.79

%

Bank segment adjusted net income:

Bank segment net income (loss)

$

13,045

$

12,149

$

7,868

Add: merger related expenses

2,632

Less: income tax impact of merger related expenses

(565

)

Bank segment adjusted net income

$

13,045

$

12,149

$

9,935

Bank segment adjusted noninterest expense:

Bank segment noninterest expense

$

16,570

$

16,460

$

19,065

Add: merger related expenses

(2,632

)

Bank segment adjusted noninterest expense

$

16,570

$

16,460

$

16,433

Bank segment adjusted efficiency ratio:

Bank segment adjusted total revenues:

Bank segment net interest income

$

27,440

$

29,133

$

29,420

Add: Tax equivalent interest income

1,021

1,019

1,161

Add: Bank segment noninterest income

5,335

2,409

2,174

Less: Gains on sale of securities, OREO, premises and equipment (3)

(2,922

)

(146

)

(338

)

Add: Swap termination fee (3)

2,859

Bank segment adjusted total revenues

$

33,733

$

32,415

$

32,417

Bank segment efficiency ratio

50.6

%

52.2

%

60.3

%

Bank segment adjusted efficiency ratio

49.1

%

50.8

%

50.7

%

Adjusted cost of funds:

Adjusted interest expense:

Interest Expense

$

6,534

$

4,356

$

5,959

Less: Swap termination fees

(2,859

)

Adjusted interest expense

$

3,675

$

4,356

$

5,959

Average funds

2,711,181

2,645,008

2,627,565

Cost of funds

0.97

%

0.67

%

0.91

%

Adjusted cost of funds

0.54

%

0.67

%

0.91

%

Adjusted cost of interest-bearing liabilities:

Adjusted interest expense

$

3,675

$

4,356

$

5,959

Average interest-bearing liabilities

2,113,993

2,079,238

2,158,990

Cost of interest-bearing liabilities

1.24

%

0.85

%

1.11

%

Adjusted cost of interest-bearing liabilities

0.70

%

0.85

%

1.11

%

Adjusted cost of deposits:

Adjusted deposit expense:

Deposit expense

$

5,541

$

3,399

$

4,829

Less: Swap termination fees

(2,859

)

Adjusted deposit expense

$

2,682

$

3,399

$

4,829

Average deposits

2,617,853

2,566,949

2,429,818

Cost of deposits

0.83

%

0.51

%

0.79

%

Adjusted cost of deposits

0.41

%

0.51

%

0.79

%

(1)

Prior calculation of this measure 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.

(2)

The swap termination fees included in the adjusted net interest income calculation in the second quarter of 2021 were done so in conjunction with securities sales thereby nullifying the effects on net income. Therefore, we have not adjusted for these transactions as adjusted net income.

(3)

Securities sold in the second quarter of 2021 were done in conjunction with the swap termination fees. Therefore, we have adjusted for both sides of this transaction.

 

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

Contacts:

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

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