Reliant Bancorp, Inc. Reports Record Third Quarter 2021 Results

October 19, 2021 5:00 PM EDT

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Reported Net Income of $13.3 million, or Diluted EPS of $0.79

Loan Growth Continues With 11.8% Annualized Increase

BRENTWOOD, Tenn.--(BUSINESS WIRE)-- 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 $13.3 million, or $0.79 per diluted common share, for the third quarter of 2021 compared to net income attributable to common shareholders of $13.0 million, or $0.78 per diluted common share, for the second quarter of 2021, and $11.5 million, or $0.69 per diluted common share, for the third quarter of 2020. When merger expenses are excluded, income per diluted common share increased to $0.87 during the third quarter of 2021 compared to $0.78 and $0.70 the second quarter of 2021 and the third quarter of 2020, respectively.

DeVan Ard, Jr., Reliant Bancorp's Chairman and CEO stated, “I am very pleased to continue 2021 with solid third quarter results as evidenced by our strong net interest margin, sound asset quality, and impressive loan production. Loan growth has continued to accelerate with a 3.0% increase from the prior quarter. When PPP loans are excluded, loan growth increased to 3.6%, or 14.2% when annualized.”

Ard continued, “Our team continues to focus on reducing high cost wholesale deposits, as customer deposits increased to make up 89.9% of our deposit portfolio and the cost of deposits decreased to 0.58%, or 0.26% when adjusted for swap termination fees. We also continued to build shareholder value as our book value and tangible book value per share increased 2.8% and 3.7%, respectively, from the prior quarter, or 11.3% and 14.6%, respectively, when annualized. Additionally, shareholders’ equity to total assets and tangible common equity to tangible assets increased to 11.82% and 9.90%, respectively, which allows us to continue to deliver exceptional returns to our shareholders.”

 

Third Quarter Highlights

Dollar Amounts in Thousands, Except Per Share Amounts

   

 

 

2021

 

2020

 

 

Third
Quarter

 

Second
Quarter

 

Third
Quarter

Results of Operations Highlights

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

13,289

 

 

$

13,045

 

 

$

11,533

 

Net income per diluted common share

 

$

0.79

 

 

$

0.78

 

 

$

0.69

 

Net interest margin (NIM) (1)

 

4.22

%

 

4.14

%

 

4.54

%

Adjusted NIM (2)

 

4.40

%

 

4.28

%

 

3.99

%

Pre-tax pre-provision income (2)

 

$

17,487

 

 

$

16,387

 

 

$

16,207

 

Efficiency ratio (tax equivalent basis)

 

54.8

%

 

54.1

%

 

54.0

%

Bank segment adjusted efficiency ratio (2)

 

46.4

%

 

49.1

%

 

48.6

%

 

 

 

 

 

 

 

Balance Sheet Highlights

 

 

 

 

 

 

Loans

 

$

2,389,833

 

 

$

2,321,070

 

 

$

2,357,898

 

Allowance for loan losses

 

(20,897

)

 

(20,894

)

 

(19,834

)

Total assets

 

3,013,559

 

 

3,098,464

 

 

3,044,512

 

Total deposits

 

2,547,705

 

 

2,629,840

 

 

2,565,502

 

Book value per share

 

$

21.36

 

 

$

20.77

 

 

$

18.46

 

Tangible book value per share (2)

 

$

17.50

 

 

$

16.88

 

 

$

14.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average: (3)

 

 

 

 

 

 

Assets ("ROAA")

 

1.74

%

 

1.69

%

 

1.53

%

Equity ("ROAE")

 

15.01

%

 

15.41

%

 

15.32

%

Tangible common equity ("ROATCE") (2)

 

18.40

%

 

19.07

%

 

19.42

%

(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 - Unaudited.”

(3)

Data has been annualized.

 

Net Interest Margin Improves Through Asset Mix Optimization

Net interest margin increased to 4.22% at September 30, 2021, an increase of 8 basis points from the previous quarter and a decrease of 32 basis points from the third quarter of 2020. The linked quarter increase was primarily due to a 23 basis point decrease in our cost of funds due to a decrease in interest-bearing deposits, especially higher cost wholesale time deposits, as well as a $2,290 swap termination fee incurred during the quarter compared to the $2,859 swap termination fee incurred during the previous quarter. The adjusted net interest margin, which excludes this swap termination fee impact as well as the benefits from purchase accounting accretion, showed continued improvement as it increased 12 basis points from the linked quarter to 4.40%. Net income and earnings per share during the quarter were not affected by this termination fee as securities were sold for a gain of $2,419 to offset the transaction.

Loan yields remain strong at 4.96% when excluding fees, representing a decrease of 16 basis points from the linked quarter and a 38 basis point decrease from the same period in the prior year, which can both largely be attributed to the decrease in purchase accounting accretion. As of September 30, 2021, $12.0 million of purchase accounting accretion remains unaccreted.

The cost of deposits continued to improve to 0.58% with a decrease of 25 basis points from the previous quarter and 4 basis points from the third quarter of 2020. When removing the impact of the second and third quarter swap termination fees the cost of deposits improves even further to 0.26%, or a decrease of 15 basis points from the previous quarter and 36 basis points from the third quarter of 2020. This decrease is largely the result of a decrease in average wholesale time deposits of $74.4 million and $104.6 million from the linked quarter and year-over-year, respectively. These decreases were offset by an increase in average noninterest-bearing deposits of $19.7 million and $80.6 million from the linked quarter and year-over-year, respectively.

Continued Loan Growth and Asset Quality Stability

Loans increased $68.8 million from the linked quarter to $2.4 billion. Loan originations during the quarter totaled $272.0 million at a weighted-average coupon rate of 4.15% with a continued focus on credit quality through sound underwriting. These originations were offset with principal payments, including PPP forgiveness payments of $13.7 million. When PPP loans are excluded, loans increased $82.5 million, or 3.6%, from the linked quarter and $114.9 million, or 5.1%, year-over-year.

Our longstanding focus on credit quality continued to be a source of strength with net recoveries continuing into the third quarter. Nonperforming loans held for investment accounted for 0.22% of total loans held for investment and nonperforming assets accounted for only 0.34% of total assets at September 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 0.60%. The allowance for loan loss was 0.87% of loans (1.38% including unaccreted net purchased loan discounts) at September 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 Newsweek’s recognition of the Bank as the Best Small Bank in Tennessee for the second year in a row. We continue to see increased demand in the loan pipeline as we move into the fourth 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 September 30, 2021, Reliant Bancorp had approximately $3.0 billion in total consolidated assets, approximately $2.4 billion in loans held for investment and approximately $2.5 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 financial 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 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 continued delivery of exceptional shareholder returns, 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) unanticipated 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 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”), (24) 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, (25) the occurrence of any event, change, or other circumstances that could give rise to the termination of the definitive merger agreement for the Transaction, (26) the amount of costs, fees, expenses and charges related to the Transaction, including those arising as a result of unexpected factors or events, (27) the ability to obtain the shareholder and governmental approvals required for the Transaction, (28) reputational risk associated with and the reaction of the parties' customers, suppliers, employees, or other business partners to the Transaction, (29) the failure of any of the conditions to the closing of the Transaction to be satisfied, or any unexpected delay in closing the Transaction, (30) 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 (31) general competitive, economic, political, and market conditions, including economic conditions in the local markets where we operate. Additional factors which could affect the forward-looking statements can be found in the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website at http://www.sec.gov. The Company believes the forward-looking statements contained herein are reasonable; however, many of such risks, uncertainties, and other factors are beyond the Company’s ability to control or predict and undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. Therefore, the Company can give no assurance that its future results will be as estimated. The Company does not intend to, and disclaims any obligation to, update or revise any forward-looking statement.

   

RELIANT BANCORP, INC.

CONSOLIDATED BALANCE SHEETS - Unaudited

(Dollar amounts in thousands, except per share amounts)

   

 

 

September 30,
2021

 

June 30,
2021

 

September 30,
2020

ASSETS

 

 

 

 

 

 

Cash and due from banks

 

$

13,270

 

 

$

11,763

 

 

$

14,050

 

Interest-bearing deposits in financial institutions

 

66,155

 

 

43,676

 

 

61,349

 

Federal funds sold

 

1,002

 

 

656

 

 

12,273

 

Total cash and cash equivalents

 

80,427

 

 

56,095

 

 

87,672

 

Securities available for sale

 

254,416

 

 

266,695

 

 

273,893

 

Loans

 

2,389,833

 

 

2,321,070

 

 

2,357,898

 

Less: allowance for loan losses

 

(20,897

)

 

(20,894

)

 

(19,834

)

Loans, net

 

2,368,936

 

 

2,300,176

 

 

2,338,064

 

Mortgage loans held for sale, net

 

62,543

 

 

229,418

 

 

99,587

 

Accrued interest receivable

 

14,374

 

 

14,492

 

 

14,615

 

Premises and equipment, net

 

27,519

 

 

29,183

 

 

33,319

 

Operating leases right of use assets

 

12,427

 

 

12,744

 

 

14,619

 

Restricted equity securities, at cost

 

15,770

 

 

15,770

 

 

17,367

 

Other real estate, net

 

3,088

 

 

2,233

 

 

1,326

 

Cash surrender value of life insurance contracts

 

78,460

 

 

78,979

 

 

68,109

 

Deferred tax assets, net

 

5,788

 

 

5,978

 

 

8,523

 

Goodwill

 

54,396

 

 

54,396

 

 

51,506

 

Core deposit intangibles

 

9,978

 

 

10,434

 

 

11,820

 

Other assets

 

25,437

 

 

21,871

 

 

24,092

 

TOTAL ASSETS

 

$

3,013,559

 

 

$

3,098,464

 

 

$

3,044,512

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Noninterest-bearing demand

 

$

626,598

 

 

$

602,555

 

 

$

538,844

 

Interest-bearing demand

 

410,923

 

 

441,161

 

 

272,805

 

Savings and money market deposit accounts

 

989,677

 

 

1,003,402

 

 

813,001

 

Time

 

520,507

 

 

582,722

 

 

940,852

 

Total deposits

 

2,547,705

 

 

2,629,840

 

 

2,565,502

 

Accrued interest payable

 

2,302

 

 

1,967

 

 

3,744

 

Federal funds purchased

 

 

 

 

 

5,000

 

Subordinated debentures

 

70,821

 

 

70,770

 

 

70,389

 

Federal Home Loan Bank advances

 

 

 

16,000

 

 

40,555

 

Operating leases liabilities

 

13,605

 

 

13,932

 

 

15,756

 

Other liabilities

 

22,811

 

 

19,666

 

 

36,480

 

TOTAL LIABILITIES

 

2,657,244

 

 

2,752,175

 

 

2,737,426

 

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; 16,682,928, 16,672,511, and 16,634,572 shares issued and outstanding at September 30, 2021, June 30, 2021, and September 30, 2020, respectively

 

16,683

 

 

16,673

 

 

16,635

 

Additional paid-in capital

 

234,696

 

 

234,390

 

 

232,738

 

Retained earnings

 

98,182

 

 

86,917

 

 

55,206

 

Accumulated other comprehensive income

 

6,754

 

 

8,309

 

 

2,507

 

TOTAL SHAREHOLDERS’ EQUITY

 

356,315

 

 

346,289

 

 

307,086

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

3,013,559

 

 

$

3,098,464

 

 

$

3,044,512

 

   

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

 

 

September 30,
2021

 

June 30,
2021

 

September 30,
2020

INTEREST INCOME

 

 

 

 

 

 

Interest and fees on loans

 

$

30,817

 

 

$

31,183

 

 

$

32,895

 

Interest and fees on loans held for sale

 

1,184

 

 

1,807

 

 

1,037

 

Interest on investment securities, taxable

 

786

 

 

663

 

 

399

 

Interest on investment securities, nontaxable

 

928

 

 

1,216

 

 

1,186

 

Restricted equity securities and other

 

215

 

 

226

 

 

251

 

TOTAL INTEREST INCOME

 

33,930

 

 

35,095

 

 

35,768

 

INTEREST EXPENSE

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Demand

 

153

 

 

216

 

 

236

 

Savings and money market deposit accounts

 

441

 

 

647

 

 

1,162

 

Time

 

3,348

 

 

4,678

 

 

2,735

 

Federal Home Loan Bank advances and other borrowings

 

9

 

 

13

 

 

104

 

Subordinated debentures

 

980

 

 

980

 

 

992

 

TOTAL INTEREST EXPENSE

 

4,931

 

 

6,534

 

 

5,229

 

NET INTEREST INCOME

 

28,999

 

 

28,561

 

 

30,539

 

PROVISION FOR LOAN LOSSES

 

 

 

 

 

1,500

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

 

28,999

 

 

28,561

 

 

29,039

 

NONINTEREST INCOME

 

 

 

 

 

 

Service charges on deposit accounts

 

1,678

 

 

1,656

 

 

1,583

 

Gains on mortgage loans sold, net

 

4,218

 

 

2,978

 

 

3,784

 

Gain on securities transactions, net

 

2,419

 

 

2,966

 

 

 

Income from bank owned life insurance

 

2,181

 

 

556

 

 

386

 

Other noninterest income

 

373

 

 

154

 

 

249

 

TOTAL NONINTEREST INCOME

 

10,869

 

 

8,310

 

 

6,002

 

NONINTEREST EXPENSE

 

 

 

 

 

 

Salaries and employee benefits

 

12,426

 

 

12,793

 

 

12,184

 

Occupancy

 

2,038

 

 

1,999

 

 

2,054

 

Data processing and software

 

2,265

 

 

2,262

 

 

2,240

 

Professional fees

 

526

 

 

358

 

 

775

 

Regulatory fees

 

328

 

 

343

 

 

365

 

Merger expenses

 

1,453

 

 

 

 

77

 

Other operating expense

 

3,345

 

 

2,729

 

 

2,639

 

TOTAL NONINTEREST EXPENSE

 

22,381

 

 

20,484

 

 

20,334

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

17,487

 

 

16,387

 

 

14,707

 

INCOME TAX EXPENSE

 

3,551

 

 

3,202

 

 

2,800

 

CONSOLIDATED NET INCOME

 

13,936

 

 

13,185

 

 

11,907

 

NONCONTROLLING INTEREST IN NET (INCOME) LOSS OF SUBSIDIARY

 

(647

)

 

(140

)

 

(374

)

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

$

13,289

 

 

$

13,045

 

 

$

11,533

 

Basic net income attributable to common shareholders, per share

 

$

0.80

 

 

$

0.79

 

 

$

0.70

 

Diluted net income attributable to common shareholders, per share

 

$

0.79

 

 

$

0.78

 

 

$

0.69

 

 

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

September 30, 2021

 

 

Commercial
Banking

 

Residential
Mortgage
Banking

 

Elimination
Entries

 

Consolidated

Net interest income

 

$

28,164

 

 

$

835

 

 

$

 

 

$

28,999

 

Provision for loan losses

 

 

 

 

 

 

 

 

Noninterest income

 

6,651

 

 

4,177

 

 

41

 

 

10,869

 

Noninterest expense (excluding merger expense)

 

16,551

 

 

4,377

 

 

 

 

20,928

 

Merger expense

 

1,453

 

 

 

 

 

 

1,453

 

Income tax expense

 

3,522

 

 

29

 

 

 

 

3,551

 

Net income

 

13,289

 

 

606

 

 

41

 

 

13,936

 

Noncontrolling interest in net income of subsidiary

 

 

 

(606

)

 

(41

)

 

(647

)

Net income attributable to common shareholders

 

$

13,289

 

 

$

 

 

$

 

 

$

13,289

 

   

 

 

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

September 30, 2020

 

 

Commercial
Banking

 

Residential
Mortgage
Banking

 

Elimination
Entries

 

Consolidated

Net interest income

 

$

29,731

 

 

$

808

 

 

$

 

 

$

30,539

 

Provision for loan losses

 

1,500

 

 

 

 

 

 

1,500

 

Noninterest income

 

2,219

 

 

3,797

 

 

(14

)

 

6,002

 

Noninterest expense (excluding merger expense)

 

16,067

 

 

4,190

 

 

 

 

20,257

 

Merger expense

 

77

 

 

 

 

 

 

77

 

Income tax expense

 

2,773

 

 

27

 

 

 

 

2,800

 

Net (loss) income

 

11,533

 

 

388

 

 

(14

)

 

11,907

 

Noncontrolling interest in net loss of subsidiary

 

 

 

(388

)

 

14

 

 

(374

)

Net income attributable to common shareholders

 

$

11,533

 

 

$

 

 

$

 

 

$

11,533

 

 

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,

 

 

September 30,
2021

 

June 30,
2021

 

September 30,
2020

Per Common Share

 

 

 

 

 

 

Basic net income

 

$

0.80

 

 

$

0.79

 

 

$

0.70

 

Diluted net income

 

$

0.79

 

 

$

0.78

 

 

$

0.69

 

Adjusted diluted income(1)

 

$

0.87

 

 

$

0.78

 

 

$

0.70

 

Book value

 

$

21.36

 

 

$

20.77

 

 

$

18.46

 

Tangible book value(1)

 

$

17.50

 

 

$

16.88

 

 

$

14.65

 

Shares Outstanding

 

 

 

 

 

 

Basic weighted average common shares

 

16,665,155

 

 

16,616,888

 

 

16,587,274

 

Diluted weighted average common shares

 

16,805,157

 

 

16,784,744

 

 

16,649,673

 

Common shares outstanding at period end

 

16,682,928

 

 

16,672,511

 

 

16,634,572

 

Selected Balance Sheet Data

 

 

 

 

 

 

Loans, net of unearned income

 

$

2,389,833

 

 

$

2,321,070

 

 

$

2,357,898

 

Total assets

 

3,013,559

 

 

3,098,464

 

 

3,044,512

 

Customer deposits

 

2,289,737

 

 

2,320,054

 

 

2,185,915

 

Wholesale and institutional deposits

 

257,968

 

 

309,786

 

 

379,587

 

Total deposits

 

2,547,705

 

 

2,629,840

 

 

2,565,502

 

Total liabilities

 

2,657,244

 

 

2,752,175

 

 

2,737,426

 

Total shareholders' equity

 

356,315

 

 

346,289

 

 

307,086

 

Selected Balance Sheet Data - Quarterly Averages

 

 

 

 

 

 

Loans held for investment

 

$

2,360,073

 

 

$

2,288,841

 

 

$

2,337,958

 

Total assets

 

3,036,777

 

 

3,088,329

 

 

2,991,818

 

Interest-bearing liabilities

 

2,032,296

 

 

2,113,993

 

 

2,108,428

 

Total liabilities

 

2,685,605

 

 

2,748,825

 

 

2,692,383

 

Total shareholders' equity

 

351,172

 

 

339,504

 

 

299,435

 

Selected Performance Ratios

 

 

 

 

 

 

Return on average assets (2)

 

1.74

%

 

1.69

%

 

1.53

%

Return on shareholders' equity (2)

 

15.01

%

 

15.41

%

 

15.32

%

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

 

18.40

%

 

19.07

%

 

19.42

%

Average shareholders' equity to average assets

 

11.56

%

 

10.99

%

 

10.01

%

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

 

4.22

%

 

4.14

%

 

4.54

%

Efficiency Ratio (tax-equivalent basis)

 

54.8

%

 

54.1

%

 

54.0

%

Bank Segment efficiency ratio (1)

 

46.4

%

 

49.1

%

 

48.6

%

Loans held for investment to deposits ratio

 

93.8

%

 

88.3

%

 

91.9

%

Interest Rates and Yields (2)

 

 

 

 

 

 

Yield on interest-earning assets

 

4.91

%

 

5.05

%

 

5.29

%

Yield on loans held for investment

 

5.29

%

 

5.58

%

 

5.73

%

Cost of interest-bearing liabilities

 

0.96

%

 

1.24

%

 

0.99

%

Adjusted cost of interest-bearing liabilities (1)

 

0.52

%

 

0.70

%

 

0.99

%

Cost of funds

 

0.74

%

 

0.97

%

 

0.79

%

Adjusted cost of funds (1)

 

0.40

%

 

0.54

%

 

0.79

%

Cost of total deposits

 

0.58

%

 

0.83

%

 

0.62

%

Adjusted cost of total deposits (1)

 

0.26

%

 

0.41

%

 

0.62

%

Preliminary Consolidated Capital Ratios (3)

 

 

 

 

 

 

Tier 1 leverage

 

10.04

%

 

9.47

%

 

8.72

%

Common equity tier 1

 

10.52

%

 

10.18

%

 

9.77

%

Tier 1 risk-based capital

 

10.95

%

 

10.62

%

 

10.25

%

Total risk-based capital

 

13.92

%

 

13.62

%

 

13.44

%

Selected Asset Quality Measures

 

 

 

 

 

 

Allowance for loan losses to total loans

 

0.87

%

 

0.90

%

 

0.84

%

Allowance for loan losses plus unaccreted purchased loan discounts to total loans (1)

 

1.38

%

 

1.46

%

 

1.64

%

Net (recoveries) charge offs

 

$

(3

 

$

(109

 

$

(97

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

 

%

 

(0.02

)%

 

(0.02

)%

Total nonperforming loans held for investment (HFI)

 

$

5,302

 

 

$

5,355

 

 

$

6,802

 

Total nonperforming assets (4)

 

$

10,232

 

 

$

9,726

 

 

$

9,731

 

Nonperforming loans HFI to total loans HFI

 

0.22

%

 

0.23

%

 

0.29

%

Nonperforming assets to total assets

 

0.34

%

 

0.31

%

 

0.32

%

Nonperforming assets to total loans HFI and NPAs

 

0.43

%

 

0.42

%

 

0.41

%

(1)

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

(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
September 30, 2021

 

Three Months Ended
June 30, 2021

 

Three Months Ended
September 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)

$

2,360,073

4.96

 

$

28,847

 

$

2,288,841

5.12

 

$

28,539

 

$

2,337,958

5.34

 

$

30,640

Loan fees

0.33

 

1,970

 

0.46

 

2,644

 

0.38

 

2,255

Loans with fees

2,360,073

5.29

 

30,817

 

2,288,841

5.58

 

31,183

 

2,337,958

5.73

 

32,895

Mortgage loans held for sale

134,245

3.50

 

1,184

 

232,850

3.11

 

1,807

 

103,729

3.98

 

1,037

Deposits with banks

45,885

0.39

 

45

 

58,619

0.36

 

52

 

57,909

0.47

 

68

Investment securities - taxable

106,433

2.93

 

786

 

73,368

3.62

 

663

 

67,569

2.35

 

399

Investment securities - tax-exempt (4)

154,417

3.10

 

928

 

197,309

3.19

 

1,216

 

185,058

3.30

 

1,186

Restricted equity securities and other

17,111

3.94

 

170

 

17,816

3.92

 

174

 

19,694

3.70

 

183

Total earning assets

2,818,164

4.91

 

33,930

 

2,868,803

5.05

 

35,095

 

2,771,917

5.29

 

35,768

Nonearning assets

218,613

 

 

 

219,526

 

 

 

219,901

 

 

Total assets

$

3,036,777

 

 

 

$

3,088,329

 

 

 

$

2,991,818

 

 

Interest bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

Interest bearing demand

$

411,796

0.15

 

$

153

 

$

412,117

0.21

 

$

216

 

$

272,506

0.34

 

$

236

Savings and money market

980,069

0.18

 

441

 

972,082

0.27

 

647

 

786,589

0.59

 

1,162

Time deposits - retail

440,390

0.74

 

825

 

443,512

0.94

 

1,042

 

715,310

0.97

 

1,744

Time deposits - wholesale

118,520

8.45

 

2,523

 

192,954

7.56

 

3,636

 

223,095

1.77

 

991

Total interest-bearing deposits

1,950,775

0.80

 

3,942

 

2,020,665

1.10

 

5,541

 

1,997,500

0.82

 

4,133

Federal Home Loan Bank advances and other borrowings

10,724

0.33

 

9

 

22,582

0.23

 

13

 

40,567

1.02

 

104

Subordinated debt

70,797

5.49

 

980

 

70,746

5.56

 

980

 

70,361

5.61

 

992

Total borrowed funds

81,521

4.81

 

989

 

93,328

4.27

 

993

 

110,928

3.93

 

1,096

Total interest-bearing liabilities

2,032,296

0.96

 

4,931

 

2,113,993

1.24

 

6,534

 

2,108,428

0.99

 

5,229

Net interest spread (5)

 

3.95

 

28,999

 

 

3.81

 

28,561

 

 

4.30

 

30,539

Noninterest bearing deposits

616,904

(0.22

)

 

 

597,188

(0.27

)

 

 

536,353

(0.20

)

 

Other noninterest bearing liabilities

36,405

 

 

 

37,644

 

 

 

47,602

 

 

Shareholders' equity

351,172

 

 

 

339,504

 

 

 

299,435

 

 

Total liabilities and shareholders' equity

$

3,036,777

 

 

 

$

3,088,329

 

 

 

$

2,991,818

 

 

Cost of funds

 

0.74

 

 

 

 

0.97

 

 

 

 

0.79

 

 

Net interest margin (6)

 

4.22

 

 

 

 

4.14

 

 

 

 

4.54

 

 

(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 $669, $667, and $760, for the three months ended September 30, 2021, June 30, 2021, and September 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

 

 

September 30, 2021

 

June 30, 2021

 

September 30, 2020

Adjusted net interest margin:

 

 

 

 

 

 

Net interest income

 

$

28,999

 

 

$

28,561

 

 

$

30,539

 

Add: tax equivalent interest income

 

947

 

 

1,021

 

 

1,107

 

Add: swap termination fees

 

2,290

 

 

2,859

 

 

 

Less: purchase accounting adjustments

 

(993

)

 

(1,839

)

 

(3,868

)

Adjusted net interest income

 

31,243

 

 

30,602

 

 

27,778

 

Average earning assets

 

$

2,818,164

 

 

$

2,868,803

 

 

$

2,771,917

 

Net interest margin-tax equivalent

 

4.22

%

 

4.14

%

 

4.54

%

Adjusted net interest margin

 

4.40

%

 

4.28

%

 

3.99

%

 

 

 

 

 

 

 

Adjusted net income (1):

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

13,289

 

 

$

13,045

 

 

$

11,533

 

Add: merger related expenses

 

1,453

 

 

 

 

77

 

Less: income tax impact of merger related expenses

 

(48

)

 

 

 

(10

)

Adjusted net income

 

$

14,694

 

 

$

13,045

 

 

$

11,600

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share:

 

 

 

 

 

 

Adjusted net income

 

$

14,694

 

 

$

13,045

 

 

$

11,600

 

Weighted average shares - diluted

 

16,805,157

 

 

16,784,744

 

 

16,649,673

 

Diluted earnings per share

 

$

0.79

 

 

$

0.78

 

 

$

0.69

 

Adjusted diluted earnings per share

 

$

0.87

 

 

$

0.78

 

 

$

0.70

 

 

 

 

 

 

 

 

Adjusted annualized return on average assets:

 

 

 

 

 

 

Adjusted net income

 

$

14,694

 

 

$

13,045

 

 

$

11,600

 

Average assets

 

3,036,777

 

 

3,088,329

 

 

2,991,818

 

Annualized return on average assets

 

1.74

%

 

1.69

%

 

1.53

%

Adjusted annualized return on average assets

 

1.92

%

 

1.69

%

 

1.54

%

 

 

 

 

 

 

 

Adjusted annualized return on average equity:

 

 

 

 

 

 

Adjusted net income

 

$

14,694

 

 

$

13,045

 

 

$

11,600

 

Average total shareholders' equity

 

351,172

 

 

339,504

 

 

299,435

 

Annualized return on average equity

 

15.01

%

 

15.41

%

 

15.32

%

Adjusted annualized return on average equity

 

16.60

%

 

15.41

%

 

15.41

%

 

 

 

 

 

 

 

Adjusted annualized return on average tangible common equity:

 

 

 

 

 

 

Average total shareholders' equity

 

$

351,172

 

 

$

339,504

 

 

$

299,435

 

Less: average intangible assets

 

(64,607

)

 

(65,088

)

 

(63,212

)

Average tangible common equity

 

$

286,565

 

 

$

274,416

 

 

$

236,223

 

Adjusted net income

 

14,694

 

 

13,045

 

 

11,600

 

Annualized return on average tangible common equity

 

18.40

%

 

19.07

%

 

19.42

%

Adjusted annualized return on average tangible common equity

 

20.34

%

 

19.07

%

 

19.54

%

 

 

 

 

 

 

 

Adjusted pre-tax pre-provision income:

 

 

 

 

 

 

Income before provision for income taxes

 

$

17,487

 

 

$

16,387

 

 

$

14,707

 

Add: merger related expenses

 

1,453

 

 

 

 

77

 

Add: provision for loan losses

 

 

 

 

 

1,500

 

Adjusted pre-tax pre-provision income

 

$

18,940

 

 

$

16,387

 

 

$

16,284

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets:

 

 

 

 

 

 

Tangible common equity:

 

 

 

 

 

 

Total shareholders' equity

 

$

356,315

 

 

$

346,289

 

 

$

307,086

 

Less: intangible assets

 

(64,374

)

 

(64,830

)

 

(63,326

)

Tangible common equity

 

$

291,941

 

 

$

281,459

 

 

$

243,760

 

Tangible assets:

 

 

 

 

 

 

Total assets

 

$

3,013,559

 

 

$

3,098,464

 

 

$

3,044,512

 

Less: intangible assets

 

(64,374

)

 

(64,830

)

 

(63,326

)

Tangible assets

 

$

2,949,185

 

 

$

3,033,634

 

 

$

2,981,186

 

Total shareholders' equity to total assets

 

11.82

%

 

11.18

%

 

10.09

%

Tangible common equity to tangible assets

 

9.90

%

 

9.28

%

 

8.18

%

 

 

 

 

 

 

 

Tangible book value per share:

 

 

 

 

 

 

Tangible common equity

 

$

291,941

 

 

$

281,459

 

 

$

243,760

 

Total shares of common stock outstanding

 

16,682,928

 

 

16,672,511

 

 

16,634,572

 

Book value per common share

 

$

21.36

 

 

$

20.77

 

 

$

18.46

 

Tangible book value per share

 

$

17.50

 

 

$

16.88

 

 

$

14.65

 

 

 

 

 

 

 

 

Allowance for loan losses plus unaccreted loan purchase discounts:

 

 

 

 

 

 

Allowance for loan losses

 

$

20,897

 

 

$

20,894

 

 

$

19,834

 

Unaccreted loan purchase discounts

 

11,993

 

 

12,980

 

 

18,939

 

Allowance for loan losses plus unaccreted loan purchase discounts:

 

$

32,890

 

 

$

33,874

 

 

$

38,773

 

Total loans

 

2,389,833

 

 

2,321,070

 

 

2,357,898

 

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

 

1.38

%

 

1.46

%

 

1.64

%

Allowance for loan losses to total loans

 

0.87

%

 

0.90

%

 

0.84

%

 

 

 

 

 

 

 

Bank segment adjusted net income:

 

 

 

 

 

 

Bank segment net income

 

$

13,289

 

 

$

13,045

 

 

$

11,533

 

Add: merger related expenses

 

1,453

 

 

 

 

77

 

Less: income tax impact of merger related expenses

 

(48

)

 

 

 

(10

)

Bank segment adjusted net income

 

$

14,694

 

 

$

13,045

 

 

$

11,600

 

 

 

 

 

 

 

 

Bank segment adjusted noninterest expense:

 

 

 

 

 

 

Bank segment noninterest expense

 

$

18,004

 

 

$

16,570

 

 

$

16,144

 

Add: merger related expenses

 

(1,453

)

 

 

 

(77

)

Bank segment adjusted noninterest expense

 

$

16,551

 

 

$

16,570

 

 

$

16,067

 

 

 

 

 

 

 

 

Bank segment adjusted efficiency ratio:

 

 

 

 

 

 

Bank segment adjusted total revenues:

 

 

 

 

 

 

Bank segment net interest income

 

$

28,164

 

 

$

27,440

 

 

$

29,731

 

Add: Tax equivalent interest income

 

947

 

 

1,021

 

 

1,107

 

Add: Bank segment noninterest income

 

6,651

 

 

5,335

 

 

2,219

 

Less: Gains on sale of securities, OREO, premises and equipment (2)

 

(2,405

)

 

(2,922

)

 

9

 

Add: Swap termination fee (2)

 

2,290

 

 

2,859

 

 

 

Bank segment adjusted total revenues

 

$

35,647

 

 

$

33,733

 

 

$

33,066

 

Bank segment efficiency ratio

 

51.7

%

 

50.6

%

 

50.5

%

Bank segment adjusted efficiency ratio

 

46.4

%

 

49.1

%

 

48.6

%

 

 

 

 

 

 

 

Adjusted cost of funds:

 

 

 

 

 

 

Adjusted interest expense:

 

 

 

 

 

 

Interest expense

 

$

4,931

 

 

$

6,534

 

 

$

5,229

 

Less: Swap termination fees

 

(2,290

)

 

(2,859

)

 

 

Adjusted interest expense

 

$

2,641

 

 

$

3,675

 

 

$

5,229

 

Average funds

 

2,649,200

 

 

2,711,181

 

 

2,644,781

 

Cost of funds

 

0.74

%

 

0.97

%

 

0.79

%

Adjusted cost of funds

 

0.40

%

 

0.54

%

 

0.79

%

 

 

 

 

 

 

 

Adjusted cost of interest-bearing liabilities:

 

 

 

 

 

 

Adjusted interest expense

 

$

2,641

 

 

$

3,675

 

 

$

5,229

 

Average interest-bearing liabilities

 

2,032,296

 

 

2,113,993

 

 

2,108,428

 

Cost of interest-bearing liabilities

 

0.96

%

 

1.24

%

 

0.99

%

Adjusted cost of interest-bearing liabilities

 

0.52

%

 

0.70

%

 

0.99

%

 

 

 

 

 

 

 

Adjusted cost of deposits:

 

 

 

 

 

 

Adjusted deposit expense:

 

 

 

 

 

 

Deposit expense

 

$

3,942

 

 

$

5,541

 

 

$

4,133

 

Less: Swap termination fees

 

(2,290

)

 

(2,859

)

 

 

Adjusted deposit expense

 

$

1,652

 

 

$

2,682

 

 

$

4,133

 

Average deposits

 

2,567,679

 

 

2,617,853

 

 

2,533,853

 

Cost of deposits

 

0.58

%

 

0.83

%

 

0.62

%

Adjusted cost of deposits

 

0.26

%

 

0.41

%

 

0.62

%

(1)

The swap termination fees included in the adjusted net interest income calculation in the second and third quarters 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.

(2)

Securities sold in the second and third quarters 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.

 

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

Source: Reliant Bancorp, Inc.



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