Reliant Bancorp, Inc. (RBNC) SEC Filing 8-K Material Event for the period ending Wednesday, October 24, 2018

Exhibit 99.1

Reliant Bancorp, Inc. Reports Record Third Quarter Results

Third Quarter Net Income Up 121.1% to $4.1 Million - EPS Rises 63.6% to $0.36 Per Fully Diluted Share

Loans Increase 59.4% to $1.2 Billion - Deposits Up 66.0% to $1.4 Billion

BRENTWOOD, Tenn.--(BUSINESS WIRE)--October 24, 2018--Reliant Bancorp, Inc. (“Reliant Bancorp” or the “Company”) (Nasdaq: RBNC), the parent company for Reliant Bank (“Reliant”), announced record third quarter results, including growth in earnings, loans, deposits and assets for the quarter and nine months ended September 30, 2018.

Third quarter net income attributable to common shareholders rose 121.1% to $4.1 million, and net income per fully diluted share increased 63.6% to $0.36, compared to $1.8 million, or $0.22 per fully diluted share, for the third quarter of 2017. Third quarter year-to-date net income attributable to common shareholders rose 63.6% to $10.0 million and net income per fully diluted share increased 14.5% to $0.87 per fully diluted share, compared to $6.1 million, or $0.76 per fully diluted share for the same period in 2017. The 2018 results included approximately 2.4 million additional shares outstanding related to the merger with Community First, Inc. that closed on January 1, 2018, and merger-related expenses of approximately $0.1 million for the third quarter and $2.7 million year-to-date.

“Reliant’s loan growth accelerated late in the second quarter of 2018 and continued into the third quarter,” stated DeVan D. Ard, Jr., Chairman, President and Chief Executive Officer. “Our loan production rose 35% to $166.9 million in the third quarter compared with our second quarter 2018 loan production of $123.8 million. Loan growth is attributed to increased demand across our markets and the continued strength of the economy in Middle Tennessee and in Chattanooga. And, while competition for deposits intensified, we grew deposit balances in relationship accounts - specifically - checking, savings and money market account types - by 3.3% during the quarter, or 13.4% annualized. Our new full service branches; one in Murfreesboro that opened in September, and the other in Chattanooga that opens in the fourth quarter, will also give us access to two more growth markets with combined deposits of over $12 billion.

“Third quarter earnings benefited from higher loan volume, increased non-interest income, improved asset quality and the smooth integration of the Community First merger. We completed the conversion of Community First’s systems last quarter and have realized improved operating efficiencies and higher loan and deposit volume from their legacy offices. Based on our current momentum, we anticipate reporting record net income, loans and deposits at year-end 2018,” concluded Ard.

Key Highlights

• Net income increased 90.8% to $4.1 million in the third quarter of 2018 compared with net income of $2.1 million in the second quarter of 2018. Net income per fully diluted share rose 89.5% to $0.36 in the third quarter of 2018 compared with $0.19 in the second quarter of 2018. Third quarter 2018 results included approximately $0.1 million in merger-related expenses compared to $2.5 million in merger-related expenses in the second quarter of 2018. Excluding merger related charges, net income attributable to common shareholders (non-GAAP) rose 98.5% to $4.1 million compared to $2.1 million for the third quarter of 2017 and was up 4.8% from $3.9 million from the second quarter of 2018. Excluding merger related charges, earnings per fully diluted share rose 44.0% to $0.36 per fully diluted share in the third quarter of 2018 compared to the third quarter of 2017. For the first nine months, net income excluding merger related charges attributable to common shareholders rose 86.3% to $11.7 million, and was up 27.5% to $1.02 per fully diluted shares, compared to $6.3 million, or $0.80 per fully diluted share, for the same period in 2017.
• Loans rose 59.4% to $1.2 billion in the third quarter of 2018 compared with the third quarter of 2017 and were up 4.5% (18.1% annualized) compared to the second quarter of 2018. Third quarter new loan production rose 34.8% to $166.9 million compared with $123.8 million in the second quarter of 2018. New loan production, which carried an average weighted yield of 5.27% up from 4.69% in the second quarter, was led by CLD (39%), CRE (24%), consumer construction including 1-4 family (19%) and C&I (15%).
• Total deposits grew 66.0% to $1.4 billion compared with the third quarter of 2017, and were up by 4.6% (18.4% annualized) from the second quarter of 2018. We experienced an increase in core deposits in Murfreesboro with the opening of the new banking center and anticipate continued growth. We anticipate the opening of a new banking center in Chattanooga in the fourth quarter to contribute to growth in core deposits from this market. Deposits generated through our Chattanooga office increased 17% since the second quarter of 2018.
• Noninterest bearing deposits rose 67.5% to $221.3 million at September 30, 2018, compared with the third quarter of 2017, and declined slightly by 1.8% from the second quarter of 2018.
• Net interest margin increased to 3.77% for the third quarter of 2018 compared with 3.74% for the second quarter of 2018 and was down from 4.08% in the third of 2017. The increase in net interest margin from the second quarter of 2018 was due to the yield on our earning assets increasing at a slightly faster pace than our cost of funds. This was mainly driven by the increase in yield on newer loans. The decrease in net interest margin compared to the third quarter of 2017 was due primarily to our cost of funds increasing at a faster pace than our yields on earning assets since last year.
• Noninterest income rose 33.1% to $2.8 million in the third quarter of 2018 compared with $2.1 million in the third quarter of 2017, and rose 23.2% from $2.3 million in the second quarter of 2018. The increase compared to third quarter of 2017 was driven mainly by higher service charges resulting from revised deposit product pricing at conversion, while the increase compared to the second quarter of 2018 was driven mainly by the increase in mortgage revenue. Bank segment noninterest income rose 167.2% compared with the third quarter of 2017 due to growth in service charges and gain on sale of other real estate, and increased 6.2% compared to the second quarter of 2018, due primarily to gain on sale of other real estate.
• Noninterest expense rose 43.1% to $12.2 million compared with $8.5 million in the third quarter of 2017 and declined 13.4% from $14.0 million in the second quarter of 2018. Noninterest expenses included pre-tax merger related expenses of approximately $0.1 million in the third quarter of 2018 compared to $0.6 million in the third quarter of 2017 and $2.5 million in the second quarter of 2018. Excluding merger related expenses, noninterest expenses rose 52.2% and 4.5% compared with the third quarter of 2017 and the second quarter of 2018, respectively. Bank segment noninterest expenses excluding merger related expenses rose 2.4% in the third quarter compared with the second quarter of 2018 due, in part, to higher expenses related to the Murfreesboro branch and the pre-opening expenses associated with the Chattanooga branch.
• Asset quality remained strong at September 30, 2018. Nonperforming assets to total assets improved to 0.31% in the third quarter of 2018, compared with 0.49% and 0.39% for the third quarter of 2017 and second quarter of 2018, respectively. Net recoveries were 0.07% in the third quarter of 2018 compared with net charge-offs of 0.17% in the third quarter of 2017. Other real estate owned declined 51.5% to $1.0 million in the third quarter of 2018 compared with $2.1 million in the second quarter of 2018. The remaining property in other real estate is under contract and the sale is expected to generate a slight gain on closing. We continue to focus on loan quality as a key component of our earnings mix.
• Our provision for loan losses for the third quarter of 2018 was $322,000 compared to $540,000 and $300,000, for the third quarter of 2017 and second quarter of 2018, respectively. The increase compared to the second quarter of 2018 was driven by growth in loans, while the decrease compared to the third quarter of 2017 was driven by improved loan quality metrics for that period.

Capital Position

Reliant’s capital position remained strong at September 30, 2018. The tier 1 leverage ratio was 10.22% compared with 9.98% at June 30, 2018, and 12.20% at September 30, 2017. Total stockholders’ equity rose to $203.8 million and tangible book value per common share was $13.15 at September 30, 2018, compared to $13.06 at June 30, 2018, and $13.88 at September 30, 2017, reflecting the impact of our private placement in the third quarter of 2017 and our merger with Community First in the first quarter of 2018 as well as earnings accretion. Reliant’s capital ratios are expected to be maintained significantly above the ratios of a “well-capitalized” institution.

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 on ROA, ROE, and earnings per diluted share,” and “efficiency ratio.” We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe certain purchase accounting adjustments, income relating to the recoveries of purchased credit impaired loans, and merger expenses do not necessarily reflect the operational performance of the business in these periods; accordingly, it is useful to consider these line items with and without such adjustments. We believe this presentation also increases comparability of period-to-period results.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under generally accepted accounting principles.

About Reliant Bancorp and Reliant Bank

Reliant Bancorp, Inc. is a Brentwood, Tennessee-based bank holding company which operates banking centers in Davidson, Robertson, Rutherford, Sumner, Williamson, Maury and Hickman counties, Tennessee along with a loan and deposit production office in Hamilton County, Tennessee, through its wholly-owned subsidiary Reliant Bank. Reliant Bank is a full-service commercial bank that offers a variety of deposit, lending and mortgage products and services to business and consumer customers. As of September 30, 2018, Reliant Bancorp had approximately $1.7 billion in total assets, approximately $1.2 billion in loans and approximately $1.4 billion in deposits. For additional information, locations and hours of operation, please visit their website at www.reliantbank.com.

Forward Looking Statements

All statements, other than statements of historical fact, included in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “expect,” “may,” “will,” “assume,” “should,” “predict,” “could,” “would,” “intend,” “targets,” “estimates,” “projects,” “plans,” “potential” and other similar words and expressions of the future are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements about Reliant Bancorp’s future financial and operating results and Reliant Bancorp’s plans, objectives and intentions.

All forward-looking statements are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Reliant Bancorp to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: (1) the effect of interest rate increases on the cost of deposits; (2) unanticipated weakness in loan demand or loan pricing; (3) greater than anticipated adverse conditions in the national or local economies in which we operate, including Middle Tennessee; (4) lack of strategic growth opportunities or our failure to execute on those opportunities; (5) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (6) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; (7) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Reliant Bancorp’s results, including as a result of compression to net interest margin; (8) our ability to effectively manage problem credits; (9) our ability to successfully implement efficiency initiatives on time and in amounts projected; (10) our ability to successfully develop and market new products and technology; (11) the vulnerability of Reliant Bank’s network and online banking portals, and the systems of parties with whom we contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss, and other security breaches; and (12) changes in laws or regulations. Additional factors which could affect the forward-looking statements can be found in Reliant Bancorp’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. Reliant Bancorp believes the forward-looking statements contained herein are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. Reliant Bancorp disclaims any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.

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