Exhibit 99.1
Reliant Bancorp, Inc. Reports Record Results for Second Quarter 2019
$0.38 Diluted EPS, up 11.8% YoY (Adjusted 2018 EPS)
3.57% NIM / 0.96% ROAA / 8.0% ROAE / $19.11 BVPS
16.0% Loan Growth (Annualized) / $150MM New Loan Production
10.5% ROATCE / 8.7% Annualized Increase in TBVPS
BRENTWOOD, Tenn.--July 23, 2019--Reliant Bancorp, Inc. (“Reliant Bancorp” or the “Company”) (Nasdaq: RBNC), the parent company for Reliant Bank (“Reliant” or the “Bank”), reported net income of $4.2 million and $0.38 per diluted common share for the second quarter of 2019, compared to $2.1 million and $0.19 per diluted common share for the second quarter of 2018, or $3.9 million and $0.34 per diluted common share when second quarter of 2018 results are adjusted for merger-related expense and accretion (non-GAAP).
“We are very pleased to report record results for our Company in the second quarter. Earnings were primarily driven by strong revenue growth, good expense control, and superior asset quality. Our team produced at a high level, and we achieved growth in all of our key markets. Loan production of $150.0 million was 29% higher than the first quarter, and both new C&I and construction loans were particularly strong, a reflection of the confidence our customers have in the Nashville and Chattanooga economies," stated DeVan Ard, Jr., Chairman, President & CEO of the Company.
"Additionally, we made progress improving our asset mix and accelerated the pace of our share repurchase program,” continued Ard.
Quarterly Highlights
Consistent Double-Digit, Organic Loan Growth Driving Revenue Growth and Improving Asset Mix
Loans Held for Investment increased by $50.5 million, 16.0% annualized, quarter-over-quarter and $170.2 million, or 14.9% year-over-year, to $1.3 billion. New loan production totaled $150.0 million at a 5.54% weighted average rate ("WAR"). Construction and C&I loans accounted for $62.9 million and $36.6 million, respectively, for the second quarter of 2019's loan production. The Company partially funded loan growth through a $25.5 million reduction of the bond portfolio. At June 30, 2019, Loans Held for Investment comprised 73.2% of assets, up from 68.8% at June 30, 2018.
Ard stated, "Our bankers' ability to consistently generate high-quality, organic loan growth has improved our asset mix over the past year increasing Loans Held for Investment to 73.2% of assets at June 30, 2019, up from 68.8% at June 30, 2018. We expect this trend to continue."
Optimizing Funding Mix Remains a Priority
Deposits increased by $39.0 million, 10.3% annualized, quarter-over-quarter and $216.0 million, or 16.2% year-over-year, to $1.6 billion. Our cost of funds increased 8 basis points quarter-over-quarter and represented the largest factor contributing to the overall 6 basis points reduction in net interest margin. Average retail and wholesale deposit costs increased during the second quarter of 2019 reflecting the macro and local rate environment; however, late in the second quarter of 2019, brokered deposit offering rates began to decline. To take advantage of this trend, we reduced the State of Tennessee CD portfolio by $39.5 million at a weighted average cost ("WAC") of 2.35% and the wholesale money market deposit portfolio by $20.1 million at a WAC of 2.67% and replaced those funds with short duration brokered CDs with a 2.26% WAC. We expect the cost of brokered CDs to continue to decline in the short-term. Ard continued, "While our bankers work hard to generate core deposits in a very competitive environment, we strategically use wholesale funding sources to supplement their efforts to meet our liquidity needs as efficiently as possible."
Profitability Driven by Proactive Management of Non-Interest Expense
Non-interest expense ("NIE") for the second quarter of 2019 increased 3.0% from the first quarter of 2019 and 13.6% from the second quarter of 2018 (merger expense not included) to $13.1 million; however, core bank segment NIE, which excludes mortgage subsidiary NIE, decreased 3.0% quarter-over-quarter. The year-over-year increase in operating expense is primarily driven by investments in upgrading business development and leadership personnel and the opening of new branches in Murfreesboro and Chattanooga during the second half of 2018. Core bank segment NIE as a percentage of average assets has remained relatively constant, 2.3% for second quarter of 2019, 2.4% for first quarter of 2019 and 2.3% for second quarter of 2018.
Asset Quality Remains a Hallmark of The Franchise
The Company has steadily improved key asset-quality metrics over the past year. Non-performing assets decreased to $4.9 million, or 0.27% of total assets, at June 30, 2019 from $6.1 million, or 0.35% of total assets, at March 31, 2019 and $6.5 million, or 0.39% of total assets, at June 30, 2018. Moreover, criticized and classified loans decreased to 0.78% of total loans at June 30, 2019, compared to 0.94% at March 31, 2019 and 1.11% at June 30, 2018.
The loan loss reserve was 0.89% of Loans Held for Investment at June 30, 2019 (1.17% when unamortized purchased loan discounts are included), down 1 basis point from March 31, 2019. The Provision for Loan Losses of $0.2 million was realized during the second quarter of 2019 to support portfolio growth. For the second consecutive quarter, we realized net recoveries.
Financial Strength Positions Company for Growth
Stockholders’ equity decreased by $1.2 million quarter-over-quarter to $213.9 million at June 30, 2019, primarily due to the repurchase of $7.6 million of common shares in the second quarter of 2019 ($8.3 million of share repurchases year-to-date). Book value per share increased by $0.41, or 8.8% annualized, to $19.11. Both the Company and the Bank continue to be classified as “Well Capitalized” financial institutions. Ard added, “Being a 'Well Capitalized' financial institution provides us with opportunities to grow both organically and via acquisition. We periodically evaluate acquisition opportunities but have remained disciplined in our M&A approach.”
Creating Shareholder Value
Tangible book value per share ("TBVPS") (non-GAAP) increased by $0.31, or 8.7% annualized, to $14.52 from the first quarter of 2019 and by $1.46, or 11.2%, from the second quarter of 2018. Return on average tangible common equity ("ROATCE") (non-GAAP) was 10.5% for the second quarter of 2019, up significantly from the second quarter of 2018, and 82 basis points from the first quarter of 2019.
“Our financial success permits us to meet regulatory capital requirements and still provide a tangible return to our shareholders. We declared a $0.09 per share dividend, a 12.5% year-over-year increase, payable on July 18, 2019. Additionally, we have returned $8.3 million year-to-date to shareholders via the repurchase of over 365,000 common shares,” Ard concluded.
Non-GAAP Financial Measures
This document contains non-GAAP financial measures. The non-GAAP measures in this release include “adjusted net interest margin,” “adjusted net income attributable to common shareholders and related impact,” "average tangible stockholders' equity," "ROATCE," "adjusted ROATCE," "tangible assets," tangible equity," "TBVPS," "efficiency ratio (subsidiary bank only excluding mortgage segment)," and "adjusted loan loss reserve." We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe certain purchase accounting adjustments, income relating to the recoveries of purchased credit impaired loans, and merger expenses do not necessarily reflect the operational performance of the business in these periods; accordingly, it is useful to consider these line items with and without such adjustments. We believe this presentation also increases comparability of period-to-period results.
Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under generally accepted accounting principles.
Contacts:
DeVan Ard, Jr., Chairman, President and CEO, Reliant Bancorp, Inc. (615.221.2020)
Conference Call Information
The Company will hold a conference call to discuss second quarter 2019 results on Wednesday, July 24, 2019, at 9:00 a.m. CDT, and the earnings conference call will be broadcast live over the Internet at https://www.webcaster4.com/Webcast/Page/1855/30982. A link to these events can be found on the Company’s website at www.reliantbank.com and will be available for 12 months. Related presentation materials will be posted to the “Investor Relations” section of the Company’s web site at www.reliantbank.com prior to the call.
About Reliant Bancorp, Inc. and Reliant Bank
Reliant Bancorp, Inc. is a Brentwood, Tennessee-based bank holding company which, through its wholly owned subsidiary Reliant Bank, operates banking centers in Davidson, Hamilton, Hickman, Maury, Robertson, Rutherford, Sumner, and Williamson counties, Tennessee. Reliant Bank is a full-service commercial bank that offers a variety of deposit, lending, and mortgage products and services to business and consumer customers. As of June 30, 2019, Reliant Bancorp had approximately $1.8 billion in total consolidated assets, approximately $1.3 billion in loans and approximately $1.6 billion in deposits. For additional information, locations and hours of operation, please visit www.reliantbank.com.
Forward Looking Statements
All statements, other than statements of historical fact, included in this release and any oral statements made regarding the subject of this release, including in the conference call referenced herein, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to the ability to generate organic loan growth, brokered CD costs and acquisition opportunities. 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 possibility that our asset quality could decline or that we experience greater loan losses than anticipated, (2) increased levels of other real estate, primarily as a result of foreclosures, (3) the impact of liquidity needs on our results of operations and financial condition, (4) competition from financial institutions and other financial service providers, (5) the effect of interest rate increases on the cost of deposits, (6) unanticipated weakness in loan demand or loan pricing, (7) lack of strategic growth opportunities or our failure to execute on those opportunities, (8) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (9) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, (10) our ability to effectively manage problem credits, (11) our ability to successfully implement efficiency initiatives on time and in amounts projected, (12) our ability to successfully develop and market new products and technology, (13) the impact of negative developments in the financial industry and U.S. and global capital and credit markets, (14) our ability to retain the services of key personnel, (15) our ability to adapt to technological changes, (16) risks associated with litigation, including the applicability of insurance coverage, (17) the vulnerability of the Bank’s network and online banking portals, and the systems of parties with whom the Company and the Bank contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss, and other security breaches, (18) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments, (19) adverse results (including costs, fines, reputational harm, and/or other negative effects) from current or future litigation, regulatory examinations, or other legal and/or regulatory actions, and (20) 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
June 30, 2019, March 31, 2019 and June 30, 2018
(Dollar Amounts in Thousands)
| ASSETS | | June 30, 2019 | | | March 31, 2019 | | | June 30, 2018 | |
| | | Unaudited | | | Unaudited | | | Unaudited | |
| Cash and due from banks | | $ | 35,917 | | | $ | 34,796 | | | $ | 32,321 | |
| Federal funds sold | | | 80 | | | | 409 | | | | 381 | |
| Total cash and cash equivalents | | | 35,997 | | | | 35,205 | | | | 32,702 | |
| Securities available for sale | | | 290,373 | | | | 310,305 | | | | 308,069 | |
| Loans, net of unearned income | | | 1,312,685 | | | | 1,262,160 | | | | 1,142,459 | |
| Allowance for loan losses | | | (11,666 | ) | | | (11,354 | ) | | | (10,169 | ) |
| Loans, net | | | 1,301,019 | | | | 1,250,806 | | | | 1,132,290 | |
| Mortgage loans held for sale, net | | | 11,571 | | | | 9,990 | | | | 31,163 | |
| Accrued interest receivable | | | 7,246 | | | | 8,389 | | | | 7,474 | |
| Premises and equipment, net | | | 21,632 | | | | 21,970 | | | | 19,955 | |
| Restricted equity securities, at cost | | | 11,488 | | | | 11,499 | | | | 11,677 | |
| Other real estate, net | | | 1,848 | | | | 1,000 | | | | 2,060 | |
| Cash surrender value of life insurance contracts | | | 46,068 | | | | 45,791 | | | | 44,927 | |
| Deferred tax assets, net | | | 3,133 | | | | 4,730 | | | | 7,913 | |
| Goodwill | | | 43,642 | | | | 43,642 | | | | 43,627 | |
| Core deposit intangibles | | | 7,745 | | | | 7,982 | | | | 8,693 | |
| Other assets | | | 12,486 | | | | 10,617 | | | | 9,108 | |
| TOTAL ASSETS | | $ | 1,794,248 | | | $ | 1,761,926 | | | $ | 1,659,658 | |
| | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Demand | | $ | 225,380 | | | $ | 220,966 | | | $ | 225,360 | |
| Interest-bearing demand | | | 144,265 | | | | 144,166 | | | | 140,201 | |
| Savings and money market deposit accounts | | | 368,764 | | | | 398,366 | | | | 352,724 | |
| Time | | | 811,871 | | | | 747,823 | | | | 615,990 | |
| Total deposits | | | 1,550,280 | | | | 1,511,321 | | | | 1,334,275 | |
| Accrued interest payable | | | 967 | | | | 990 | | | | 801 | |
| Subordinated debentures | | | 11,644 | | | | 11,624 | | | | 11,562 | |
| Federal Home Loan Bank advances | | | 11,119 | | | | 15,309 | | | | 102,874 | |
| Dividends payable | | | 1,008 | | | | 1,035 | | | | 919 | |
| Other liabilities | | | 5,287 | | | | 6,528 | | | | 6,887 | |
| TOTAL LIABILITIES | | | 1,580,305 | | | | 1,546,807 | | | | 1,457,318 | |
| | | | | | | | | | | | | |
| 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; 11,196,563, 11,502,285, and 11,482,965 shares issued and outstanding at June 30, 2019, March 31, 2019, and June 30, 2018, respectively | | | 11,197 | | | | 11,502 | | | | 11,483 | |
| Additional paid-in capital | | | 166,252 | | | | 172,886 | | | | 172,686 | |
| Retained earnings | | | 33,349 | | | | 30,119 | | | | 21,090 | |
| Accumulated other comprehensive income (loss) | | | 3,145 | | | | 612 | | | | (2,919 | ) |
| TOTAL STOCKHOLDERS’ EQUITY | | | 213,943 | | | | 215,119 | | | | 202,340 | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,794,248 | | | $ | 1,761,926 | | | $ | 1,659,658 | |
RELIANT BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS INDICATED
(Dollar Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
| | | Three Months Ended | |
| | | June 30, 2019 | | | March 31, 2019 | | | June 30, 2018 | |
| INTEREST INCOME | | | | | | | | | |
| Interest and fees on loans | | $ | 16,960 | | | $ | 16,169 | | | $ | 14,066 | |
| Interest and fees on loans held for sale | | | 198 | | | | 153 | | | | 326 | |
| Interest on investment securities, taxable | | | 587 | | | | 503 | | | | 453 | |
| Interest on investment securities, nontaxable | | | 1,650 | | | | 1,718 | | | | 1,708 | |
| Federal funds sold and other | | | 297 | | | | 300 | | | | 277 | |
| | | | | | | | | | | | | |
| TOTAL INTEREST INCOME | | | 19,692 | | | | 18,843 | | | | 16,830 | |
| | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Demand | | | 86 | | | | 111 | | | | 84 | |
| Savings and money market | | | 1,051 | | | | 1,130 | | | | 574 | |
| Time | | | 4,369 | | | | 3,571 | | | | 2,199 | |
| Federal Home Loan Bank advances and other | | | 175 | | | | 377 | | | | 397 | |
| Subordinated debentures | | | 198 | | | | 193 | | | | 172 | |
| TOTAL INTEREST EXPENSE | | | 5,879 | | | | 5,382 | | | | 3,426 | |
| | | | | | | | | | | | | |
| NET INTEREST INCOME | | | 13,813 | | | | 13,461 | | | | 13,404 | |
| | | | | | | | | | | | | |
| PROVISION FOR LOAN LOSSES | | | 200 | | | | — | | | | 300 | |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | | 13,613 | | | | 13,461 | | | | 13,104 | |
| NONINTEREST INCOME | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 936 | | | | 884 | | | | 900 | |
| Gains on mortgage loans sold, net | | | 1,225 | | | | 560 | | | | 957 | |
| Gain on securities transactions, net | | | 175 | | | | 131 | | | | 25 | |
| Gain on sale of other real estate | | | — | | | | — | | | | 20 | |
| Other | | | 362 | | | | 363 | | | | 352 | |
| TOTAL NONINTEREST INCOME | | | 2,698 | | | | 1,938 | | | | 2,254 | |
| NONINTEREST EXPENSE | | | | | | | | | | | | |
| Salaries and employee benefits | | | 7,706 | | | | 7,265 | | | | 6,613 | |
| Occupancy | | | 1,358 | | | | 1,352 | | | | 1,210 | |
| Information technology | | | 1,575 | | | | 1,410 | | | | 1,249 | |
| Advertising and public relations | | | 275 | | | | 254 | | | | 141 | |
| Audit, legal and consulting | | | 690 | | | | 796 | | | | 816 | |
| Federal deposit insurance | | | 249 | | | | 195 | | | | 224 | |
| Merger expenses | | | 1 | | | | 2 | | | | 2,483 | |
| Other operating | | | 1,272 | | | | 1,472 | | | | 1,305 | |
| TOTAL NONINTEREST EXPENSE | | | 13,126 | | | | 12,746 | | | | 14,041 | |
| INCOME BEFORE PROVISION FOR INCOME TAXES | | | 3,185 | | | | 2,653 | | | | 1,317 | |
| INCOME TAX EXPENSE | | | 501 | | | | 372 | | | | 115 | |
| CONSOLIDATED NET INCOME | | | 2,684 | | | | 2,281 | | | | 1,202 | |
| NONCONTROLLING INTEREST IN NET LOSS OF SUBSIDIARY | | | 1,555 | | | | 1,543 | | | | 937 | |
| NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | | $ | 4,239 | | | $ | 3,824 | | | $ | 2,139 | |
| Basic net income attributable to common shareholders, per share | | $ | 0.38 | | | $ | 0.34 | | | $ | 0.19 | |
| Diluted net income attributable to common shareholders, per share | | $ | 0.38 | | | $ | 0.33 | | | $ | 0.19 | |
RELIANT BANCORP, INC.
SEGMENT FINANCIAL INFORMATION
FOR THE PERIODS INDICATED
(Dollar Amounts in Thousands)
(Unaudited)
| Core Bank | | | |
| | | Three Months Ended | |
| | | June 30, 2019 | | | March 31, 2019 | | | June 30, 2018 | |
| Net interest income | | $ | 13,703 | | | $ | 13,373 | | | $ | 13,190 | |
| Provision for loan losses | | | 200 | | | | — | | | | 300 | |
| Noninterest income | | | 1,473 | | | | 1,378 | | | | 1,299 | |
| Noninterest expense (excluding merger expenses) | | | 10,129 | | | | 10,445 | | | | 9,389 | |
| Merger expense | | | 1 | | | | 2 | | | | 2,483 | |
| Income before provision for income taxes | | | 4,846 | | | | 4,304 | | | | 2,317 | |
| Income tax expense | | | 607 | | | | 480 | | | | 178 | |
| Net income attributable to common shareholders | | $ | 4,239 | | | $ | 3,824 | | | $ | 2,139 | |
| Residential Mortgage Company | | | |
| | | Three Months Ended | |
| | | June 30,
2019 | | | March 31,
2019 | | | June 30,
2018 | |
| Net interest income | | $ | 110 | | | $ | 88 | | | $ | 214 | |
| Provision for loan losses | | | — | | | | — | | | | — | |
| Noninterest income | | | 1,225 | | | | 560 | | | | 955 | |
| Noninterest expense | | | 2,996 | | | | 2,299 | | | | 2,169 | |
| Loss before provision for income taxes | | | (1,661 | ) | | | (1,651 | ) | | | (1,000 | ) |
| Income tax benefit | | | (106 | ) | | | (108 | ) | | | (63 | ) |
| Net loss | | | (1,555 | ) | | | (1,543 | ) | | | (937 | ) |
| Noncontrolling interest in net loss of subsidiary | | | 1,555 | | | | 1,543 | | | | 937 | |
| 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 STATED THREE MONTHS ENDED
(Dollar Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
| | | June 30, 2019 | | | March 31, 2019 | | | June 30, 2018 | |
| Per Common Share Data | | | | | | | | | |
| Net income attributable to shareholders, per share | | | | | | | | | |
| Basic | | $ | 0.38 | | | $ | 0.34 | | | $ | 0.19 | |
| Diluted | | $ | 0.38 | | | $ | 0.33 | | | $ | 0.19 | |
| Book value per common share | | $ | 19.11 | | | $ | 18.70 | | | $ | 17.62 | |
| Basic weighted average common shares | | | 11,196,898 | | | | 11,405,438 | | | | 11,396,829 | |
| Diluted weighted average common shares | | | 11,286,627 | | | | 11,487,145 | | | | 11,495,233 | |
| Common shares outstanding at period end | | | 11,196,563 | | | | 11,502,285 | | | | 11,482,965 | |
| | | | | | | | | | | | | |
| Selected Balance Sheet Data | | | | | | | | | | | | |
| Loans held for investment | | $ | 1,276,197 | | | $ | 1,238,341 | | | $ | 1,119,884 | |
Average earning assets (1) | | | 1,633,903 | | | | 1,590,342 | | | | 1,492,007 | |
| Total assets | | | 1,773,026 | | | | 1,731,177 | | | | 1,629,714 | |
| Average stockholders' equity | | | 212,648 | | | | 209,461 | | | | 202,305 | |
| | | | | | | | | | | | | |
| Selected Asset Quality Measures | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 3,045 | | | $ | 4,582 | | | $ | 4,360 | |
| 90+ days past due still accruing | | | 22 | | | | 566 | | | | 51 | |
| Total nonperforming loans | | | 3,067 | | | | 5,148 | | | | 4,411 | |
Total nonperforming assets (2) | | | 4,915 | | | | 6,148 | | | | 6,471 | |
| Net charge offs (recoveries) | | | (112 | ) | | | (462 | ) | | | (139 | ) |
| Nonperforming loans to total loans | | | 0.23 | % | | | 0.41 | % | | | 0.39 | % |
| Nonperforming assets to total assets | | | 0.27 | % | | | 0.35 | % | | | 0.39 | % |
| Nonperforming assets to total loans and other real estate | | | 0.37 | % | | | 0.49 | % | | | 0.57 | % |
| Allowance for loan losses to total loans | | | 0.89 | % | | | 0.90 | % | | | 0.89 | % |
| Allowance for loan losses to nonperforming loans | | | 380.37 | % | | | 220.55 | % | | | 230.54 | % |
Net charge offs (recoveries) to average loans (3) | | | (0.04 | )% | | | (0.15 | )% | | | (0.05 | )% |
| | | | | | | | | | | | | |
Capital Ratios (Bank Subsidiary Only)(4) | | | | | | | | | | | | |
| Tier 1 leverage | | | 9.58 | % | | | 9.99 | % | | | 9.98 | % |
| Common equity tier 1 | | | 11.48 | % | | | 12.07 | % | | | 12.14 | % |
| Total risk-based capital | | | 12.33 | % | | | 12.92 | % | | | 12.96 | % |
| | | | | | | | | | | | | |
Selected Performance Ratios (3) | | | | | | | | | | | | |
| Return on average: | | | | | | | | | | | | |
| Assets | | | 0.96 | % | | | 0.88 | % | | | 0.53 | % |
| Shareholders' equity | | | 7.97 | % | | | 7.30 | % | | | 4.23 | % |
| Net interest margin (tax-equivalent basis) | | | 3.57 | % | | | 3.63 | % | | | 3.74 | % |
(1) Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, investment securities and restricted equity securities.
(2) Nonperforming assets consist of nonperforming loans (excluding troubled debt restructurings) and other real estate.
(3) Data has been annualized.
(4) Current quarter capital ratios are estimated.
RELIANT BANCORP, INC.
YIELD TABLES
FOR THE PERIODS INDICATED
(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 periods indicated below:
| | | Three Months Ended June 30, 2019 | | | Three Months Ended March 31, 2019 | | | Three Months Ended June 30, 2018 | |
| | | Average Balances | | | Rates / Yields (%) | | | Interest Income / Expense | | | Average Balances | | | Rates / Yields (%) | | | Interest Income / Expense | | | Average Balances | | | Rates / Yields (%) | | | Interest Income / Expense | |
| Interest earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 1,276,197 | | | | 5.18 | | | $ | 16,178 | | | $ | 1,238,341 | | | | 5.16 | | | $ | 15,463 | | | $ | 1,119,884 | | | | 4.81 | | | $ | 13,393 | |
| Loan fees | | | — | | | | 0.25 | | | | 782 | | | | — | | | | 0.23 | | | | 706 | | | | — | | | | 0.24 | | | | 673 | |
| Loans with fees | | | 1,276,197 | | | | 5.43 | | | | 16,960 | | | | 1,238,341 | | | | 5.39 | | | | 16,169 | | | | 1,119,884 | | | | 5.05 | | | | 14,066 | |
| Mortgage loans held for sale | | | 14,502 | | | | 5.48 | | | | 198 | | | | 10,747 | | | | 5.77 | | | | 153 | | | | 24,611 | | | | 5.31 | | | | 326 | |
| Deposits with banks | | | 30,342 | | | | 1.53 | | | | 116 | | | | 27,643 | | | | 1.73 | | | | 118 | | | | 36,550 | | | | 1.21 | | | | 110 | |
| Investment securities - taxable | | | 77,405 | | | | 3.04 | | | | 587 | | | | 72,464 | | | | 2.82 | | | | 503 | | | | 67,647 | | | | 2.69 | | | | 453 | |
| Investment securities - tax-exempt | | | 222,149 | | | | 3.77 | | | | 1,650 | | | | 228,497 | | | | 3.86 | | | | 1,718 | | | | 231,874 | | | | 3.75 | | | | 1,708 | |
| Federal funds sold and other | | | 13,308 | | | | 5.46 | | | | 181 | | | | 12,650 | | | | 5.83 | | | | 182 | | | | 11,441 | | | | 5.85 | | | | 167 | |
| Total earning assets | | | 1,633,903 | | | | 5.02 | | | | 19,692 | | | | 1,590,342 | | | | 5.00 | | | | 18,843 | | | | 1,492,007 | | | | 4.66 | | | | 16,830 | |
| Nonearning assets | | | 139,123 | | | | | | | | | | | | 140,835 | | | | | | | | | | | | 137,707 | | | | | | | | | |
| Total assets | | $ | 1,773,026 | | | | | | | | | | | $ | 1,731,177 | | | | | | | | | | | $ | 1,629,714 | | | | | | | | | |
| Interest bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing demand | | $ | 141,997 | | | | 0.24 | | | $ | 86 | | | $ | 148,649 | | | | 0.30 | | | $ | 111 | | | $ | 143,811 | | | | 0.23 | | | $ | 84 | |
| Savings and money market | | | 374,406 | | | | 1.13 | | | | 1,051 | | | | 400,328 | | | | 1.14 | | | | 1,130 | | | | 357,475 | | | | 0.64 | | | | 574 | |
| Time deposits - retail | | | 612,148 | | | | 2.14 | | | | 3,263 | | | | 577,270 | | | | 2.05 | | | | 2,921 | | | | 517,209 | | | | 1.43 | | | | 1,848 | |
| Time deposits - wholesale | | | 169,956 | | | | 2.61 | | | | 1,106 | | | | 106,625 | | | | 2.47 | | | | 650 | | | | 92,197 | | | | 1.53 | | | | 351 | |
| Total interest bearing deposits | | | 1,298,507 | | | | 1.70 | | | | 5,506 | | | | 1,232,872 | | | | 1.58 | | | | 4,812 | | | | 1,110,692 | | | | 1.03 | | | | 2,857 | |
| Federal Home Loan Bank advances | | | 23,668 | | | | 2.97 | | | | 175 | | | | 56,718 | | | | 2.70 | | | | 377 | | | | 79,520 | | | | 2.00 | | | | 397 | |
| Subordinated debt | | | 11,634 | | | | 6.83 | | | | 198 | | | | 11,613 | | | | 6.74 | | | | 193 | | | | 11,556 | | | | 5.97 | | | | 172 | |
| Total borrowed funds | | | 35,302 | | | | 4.24 | | | | 373 | | | | 68,331 | | | | 3.38 | | | | 570 | | | | 91,076 | | | | 2.51 | | | | 569 | |
| Total interest-bearing liabilities | | | 1,333,809 | | | | 1.77 | | | | 5,879 | | | | 1,301,203 | | | | 1.68 | | | | 5,382 | | | | 1,201,768 | | | | 1.14 | | | | 3,426 | |
| Net interest rate spread (%) / Net interest income ($) | | | | | | | 3.25 | | | | 13,813 | | | | | | | | 3.32 | | | | 13,461 | | | | | | | | 3.52 | | | | 13,404 | |
| Non-interest bearing deposits | | | 218,512 | | | | (0.25 | ) | | | | | | | 211,122 | | | | (0.24 | ) | | | | | | | 219,860 | | | | (0.17 | ) | | | | |
| Other non-interest bearing liabilities | | | 8,057 | | | | | | | | | | | | 9,391 | | | | | | | | | | | | 5,781 | | | | | | | | | |
| Stockholder's equity | | | 212,648 | | | | | | | | | | | | 209,461 | | | | | | | | | | | | 202,305 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,773,026 | | | | | | | | | | | $ | 1,731,177 | | | | | | | | | | | $ | 1,629,714 | | | | | | | | | |
| Cost of funds | | | | | | | 1.52 | | | | | | | | | | | | 1.44 | | | | | | | | | | | | 0.97 | | | | | |
| Net interest margin | | | | | | | 3.57 | | | | | | | | | | | | 3.63 | | | | | | | | | | | | 3.74 | | | | | |
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis including a state tax credit included in loan yields of $300, $300, and $25, respectively, for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.
RELIANT BANCORP, INC.
NON-GAAP FINANCIAL MEASURES
FOR THE PERIODS INDICATED
(Dollar Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
| | | Three Months Ended | |
| | | June 30, 2019 | | | March 31, 2019 | | | June 30, 2018 | |
| NON-GAAP FINANCIAL MEASURES | | | | | | | | | |
Adjusted net interest margin (1) | | | | | | | | | |
Tax equivalent net interest income (1)(2) | | $ | 14,555 | | | $ | 14,221 | | | $ | 13,404 | |
| Purchase accounting adjustments | | | (448 | ) | | | (332 | ) | | | (326 | ) |
| Tax credits | | | (300 | ) | | | (300 | ) | | | (25 | ) |
| Adjusted net interest income | | $ | 13,807 | | | $ | 13,589 | | | $ | 13,053 | |
| Adjusted net interest margin | | | 3.39 | % | | | 3.47 | % | | | 3.65 | % |
| | | | | | | | | | | | | |
Adjusted net income attributable to common shareholders and related impact (1) | | | | | | | | | | | | |
| Net income attributable to common shareholders | | $ | 4,239 | | | $ | 3,824 | | | $ | 2,139 | |
| Purchase accounting adjustments | | | (195 | ) | | | (79 | ) | | | (73 | ) |
| Merger expenses | | | 1 | | | | 2 | | | | 2,483 | |
| Pre-tax adjustments to net income | | | (194 | ) | | | (77 | ) | | | 2,410 | |
| Tax effect of adjustments to net income | | | (51 | ) | | | (21 | ) | | | 632 | |
| After tax adjustments to net income | | $ | (143 | ) | | $ | (56 | ) | | $ | 1,778 | |
| Adjusted net income attributable to common shareholders | | $ | 4,096 | | | $ | 3,768 | | | $ | 3,917 | |
| Adjusted return on average assets | | | 0.92 | % | | | 0.87 | % | | | 0.96 | % |
| Adjusted return on average stockholders' equity | | | 7.70 | % | | | 7.20 | % | | | 7.74 | % |
| Adjusted net income attributable to common | | | | | | | | | | | | |
| shareholders, per diluted share | | $ | 0.36 | | | $ | 0.33 | | | $ | 0.34 | |
| | | | | | | | | | | | | |
Average tangible stockholders' equity: (1) | | | | | | | | | | | | |
| Average stockholders' equity | | $ | 212,648 | | | $ | 209,461 | | | $ | 202,305 | |
| Less: average goodwill | | | 43,642 | | | | 43,642 | | | | 43,467 | |
| Less: average core deposit intangibles | | | 7,834 | | | | 8,071 | | | | 8,780 | |
| Net average tangible common equity | | $ | 161,172 | | | $ | 157,748 | | | $ | 150,058 | |
| | | | | | | | | | | | | |
Return on average: (1)(3) | | | | | | | | | | | | |
| Tangible common equity (ROATCE) | | | 10.52 | % | | | 9.70 | % | | | 5.70 | % |
| Adjusted ROATCE | | | 10.17 | % | | | 9.55 | % | | | 10.44 | % |
| | (1) | Not a recognized measure under generally accepted accounting principles (GAAP). |
| | (2) | Amount includes tax equivalent adjustment to quantify the tax equivalent net interest income. |
| | (3) | Data has been annualized. |
RELIANT BANCORP, INC.
NON-GAAP FINANCIAL MEASURES
FOR THE PERIODS INDICATED
(Dollar Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
| | | Three Months Ended | |
| | | June 30, 2019 | | | March 31, 2019 | | | June 30, 2018 | |
Tangible assets: (1) | | | | | | | | | |
| Total assets | | $ | 1,794,248 | | | $ | 1,761,926 | | | $ | 1,659,658 | |
| Less: goodwill | | | 43,642 | | | | 43,642 | | | | 43,627 | |
| Less: core deposit intangibles | | | 7,745 | | | | 7,982 | | | | 8,693 | |
| Net tangible assets | | $ | 1,742,861 | | | $ | 1,710,302 | | | $ | 1,607,338 | |
| | | | | | | | | | | | | |
Tangible equity: (1) | | | | | | | | | | | | |
| Total stockholders' equity | | $ | 213,943 | | | $ | 215,119 | | | $ | 202,340 | |
| Less: goodwill | | | 43,642 | | | | 43,642 | | | | 43,627 | |
| Less: core deposit intangibles | | | 7,745 | | | | 7,982 | | | | 8,693 | |
| Net tangible common equity | | $ | 162,556 | | | $ | 163,495 | | | $ | 150,020 | |
| | | | | | | | | | | | | |
| Ratio of tangible common equity to tangible assets | | | 9.33 | % | | | 9.56 | % | | | 9.33 | % |
| | | | | | | | | | | | | |
Tangible book value per common share (TBVPS): (1) | | | | | | | | | | | | |
| Net tangible equity | | $ | 162,556 | | | $ | 163,495 | | | $ | 150,020 | |
| Common shares outstanding | | | 11,196,563 | | | | 11,502,285 | | | | 11,482,965 | |
| | | | | | | | | | | | | |
| TBVPS | | $ | 14.52 | | | $ | 14.21 | | | $ | 13.06 | |
| | | | | | | | | | | | | |
Efficiency ratio (core bank segment only excluding mortgage segment)(1) | | | | | | | | | | | | |
| Non-interest expense | | $ | 10,129 | | | $ | 10,445 | | | $ | 9,389 | |
| | | | | | | | | | | | | |
| Net interest income | | | 13,703 | | | | 13,373 | | | | 13,190 | |
| Tax equivalent adjustment for tax exempt | | | | | | | | | | | | |
| interest income | | | 742 | | | | 760 | | | | 490 | |
| Non-interest income | | | 1,473 | | | | 1,378 | | | | 1,299 | |
| Less gain on sale of other real estate | | | — | | | | — | | | | (20 | ) |
| Less gain on sale of securities | | | (175 | ) | | | (131 | ) | | | (25 | ) |
| Adjusted operating income | | $ | 15,743 | | | $ | 15,380 | | | $ | 14,934 | |
| | | | | | | | | | | | | |
| Efficiency Ratio | | | 64.34 | % | | | 67.91 | % | | | 62.87 | % |
| | | | | | | | | | | | | |
Adjusted loan loss reserve: (1) | | | | | | | | | | | | |
| Allowance for loan losses | | $ | 11,666 | | | $ | 11,354 | | | $ | 10,169 | |
| Purchase loan discounts | | | 3,688 | | | | 4,117 | | | | 6,127 | |
| Loan loss reserve and purchase loan discounts | | $ | 15,354 | | | $ | 15,471 | | | $ | 16,296 | |
| | | | | | | | | | | | | |
| Allowance for loan losses and purchase loan discounts to total loans | | | 1.17 | % | | | 1.23 | % | | | 1.43 | % |
| | (1) | Not a recognized measure under generally accepted accounting principles (GAAP). |
