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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 10-Q
_______________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______

Commission File Number: 001-37391
_______________________________
Reliant Bancorp, Inc.
(Exact name of registrant as specified in its charter)
_______________________________
Tennessee37-1641316
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1736 Carothers Parkway,
Suite 100,
Brentwood,
Tennessee37027
(Address of principal executive offices)(Zip Code)
615-221-2020
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par value per shareRBNCNASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files): Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer¨Accelerated Filer
Non-Accelerated Filer¨Smaller Reporting Company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The number of shares outstanding of the registrant’s common stock, par value $1.00 per share, as of August 4, 2020
was 16,248,617, excluding 383,110 unexchanged shares in connection with acquisitions.

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS3
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Risk Factors
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.





CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Various statements contained in or incorporated by reference into this Quarterly Report on Form 10-Q (this “Quarterly Report”) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of Reliant Bancorp, Inc. (“Reliant Bancorp”) 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 global health and economic crisis precipitated by the coronavirus (COVID-19) pandemic;
(2) actions taken by governments, businesses and individuals in response to the coronavirus (COVID-19) pandemic;
(3) the pace of recovery when the coronavirus (COVID-19) pandemic subsides;
(4) the possible recurrence of the coronavirus (COVID-19);
(5) changes in political conditions or the legislative or regulatory environment, including governmental initiatives affecting the financial services industry such as, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act (or the CARES Act);
(6) the possibility that our asset quality could decline or that we experience greater loan losses than anticipated;
(7) increased levels of other real estate, primarily as a result of foreclosures;
(8) the impact of liquidity needs on our results of operations and financial condition;
(9) competition from financial institutions and other financial service providers;
(10) the effect of interest rate increases on the cost of deposits;
(11) unanticipated weakness in loan demand or loan pricing;
(12) greater than anticipated adverse conditions in the national economy or local economies in which we operate, including Middle Tennessee;
(13) lack of strategic growth opportunities or our failure to execute on available opportunities;
(14) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses;
(15) economic crises and associated credit issues in industries most impacted by the coronavirus (COVID-19) pandemic, including the restaurant, hospitality and retail sectors;
(16) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits;
(17) our ability to effectively manage problem credits;
(18) our ability to successfully implement efficiency initiatives on time and with the results projected;
(19) our ability to successfully develop and market new products and technology;
(20) the impact of negative developments in the financial industry and United States and global capital and credit markets;
(21) our ability to retain the services of key personnel;
(22) our ability to adapt to technological changes;
(23) risks associated with litigation, including the applicability of insurance coverage;
(24) the vulnerability of the computer and information technology systems and networks of Reliant Bank (the “Bank”), and the systems and networks of third parties with whom Reliant Bancorp 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;
(25) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments;
(26) adverse results (including costs, fines, reputational harm, and/or other negative effects) from current or future litigation, regulatory examinations, or other legal or regulatory actions;
(27) the risk that expected cost savings and revenue synergies from (a) the merger of Reliant Bancorp and Tennessee Community Bank Holdings, Inc. (“TCB Holdings”) (the “TCB Holdings Transaction”) or (b) the merger of Reliant Bancorp and First Advantage Bancorp (“FABK”) (the “FABK Transaction” and, together with the TCB Holdings Transaction, collectively, the “Transactions”), may not be realized or may take longer than anticipated to be realized;
(28) the effect of the Transactions on our 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 Reliant Bancorp’s common stock;
(29) the risk that the businesses and operations of TCB Holdings and its subsidiaries and of FABK and its subsidiaries cannot be successfully integrated with the business and operations of Reliant Bancorp and its subsidiaries or that integration will be more costly or difficult than expected;
2


(30) the amount of costs, fees, expenses, and charges related to the Transactions, including those arising as a result of unexpected factors or events;
(31) reputational risk associated with and the reaction of our customers, suppliers, employees, or other business partners to the Transactions;
(32) the risk associated with Reliant Bancorp management’s attention being diverted away from the day-to-day business and operations of Reliant Bancorp to the integration of the Transactions; and
(33) general competitive, economic, political, and market conditions, including economic conditions in the local markets where we operate.

Further, statements about the potential effects of the coronavirus (COVID-19) pandemic on our business, financial condition, liquidity, or results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable, and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, other third parties, and us.

You should also consider carefully the risk factors discussed in Part I, Item 1A. "Risk Factors" of our most recent Annual Report on Form 10-K and in Part II, Item 1A. "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which address additional factors that could cause our actual results to differ from those set forth in forward-looking statements and could materially and adversely affect our business, operating results, and financial condition. The risks discussed in this Quarterly Report are factors that, individually or in the aggregate, management believes could cause our actual results to differ materially from expected and historical results. You should understand that it is not possible to predict or identify all such factors, many of which are beyond our ability to control or predict. Consequently, you should not consider such disclosures to be a complete discussion of all potential risks or uncertainties. Factors not here or otherwise listed may develop or, if currently extant, we may not have yet recognized them.

Forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
3

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)

RELIANT BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2020 (UNAUDITED) AND DECEMBER 31, 2019 (AUDITED)
(Dollar amounts in thousands)
June 30, 2020December 31, 2019
ASSETS
Cash and due from banks$93,838  $50,990  
Federal funds sold638  52  
Total cash and cash equivalents94,476  51,042  
Securities available for sale249,014  260,293  
Loans, net2,299,087  1,397,374  
Mortgage loans held for sale, net101,579  37,476  
Accrued interest receivable13,901  7,111  
Premises and equipment, net34,194  21,064  
Operating leases right of use assets15,452  —  
Restricted equity securities, at cost17,509  11,279  
Other real estate, net2,514  750  
Cash surrender value of life insurance contracts67,723  46,632  
Deferred tax assets, net9,787  3,933  
Goodwill51,058  43,642  
Core deposit intangibles12,293  7,270  
Other assets23,025  10,601  
TOTAL ASSETS$2,991,612  $1,898,467  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Noninterest-bearing demand$519,684  $260,073  
Interest-bearing demand288,710  152,718  
Savings and money market deposit accounts771,505  408,724  
Time950,163  762,274  
Total deposits2,530,062  1,583,789  
Accrued interest payable2,918  2,022  
Subordinated debentures70,413  70,883  
Federal Home Loan Bank advances49,121  10,737  
Operating lease liabilities16,591  —  
Other liabilities26,964  7,283  
TOTAL LIABILITIES2,696,069  1,674,714  
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; 16,631,604 and 11,206,254 shares issued and outstanding at June 30, 2020, and December 31, 2019, respectively
16,632  11,206  
Additional paid-in capital232,436  167,006  
Retained earnings45,351  40,472  
Accumulated other comprehensive income 1,124  5,069  
TOTAL STOCKHOLDERS’ EQUITY295,543  223,753  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$2,991,612  $1,898,467  
See accompanying notes to consolidated financial statements.
4


RELIANT BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Dollar amounts in thousands except per share amounts)
Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
INTEREST INCOME
Interest and fees on loans$33,447  $16,960  $54,092  $33,129  
Interest and fees on loans held for sale815  198  1,375  351  
Interest on investment securities, taxable128  587  579  1,090  
Interest on investment securities, nontaxable1,317  1,650  2,688  3,368  
Federal funds sold and other208  297  487  597  
TOTAL INTEREST INCOME35,915  19,692  59,221  38,535  
INTEREST EXPENSE
Deposits
Demand218  86  318  197  
Savings and money market deposit accounts1,531  1,051  2,506  2,181  
Time3,080  4,369  6,842  7,940  
Federal Home Loan Bank advances and other148  175  509  552  
Subordinated debentures982  198  1,975  391  
TOTAL INTEREST EXPENSE5,959  5,879  12,150  11,261  
NET INTEREST INCOME29,956  13,813  47,071  27,274  
PROVISION FOR LOAN LOSSES3,000  200  5,900  200  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES26,956  13,613  41,171  27,074  
NONINTEREST INCOME
Service charges on deposit accounts1,381  936  2,589  1,820  
Gains on mortgage loans sold, net2,248  1,225  3,821  1,785  
Gain on securities transactions, net327  175  327  306  
Gain on sale of other real estate11    25    
Gain on disposal of premises and equipment    9    
Other455  362  933  725  
TOTAL NONINTEREST INCOME4,422  2,698  7,704  4,636  
NONINTEREST EXPENSE
Salaries and employee benefits12,464  7,706  21,701  14,971  
Occupancy2,026  1,358  3,512  2,710  
Information technology2,027  1,575  3,846  2,985  
Advertising and public relations228  275  581  529  
Audit, legal and consulting680  690  1,158  1,486  
Federal deposit insurance441  249  777  444  
Merger expenses2,632  1  6,818  3  
Other operating1,766  1,272  3,469  2,744  
TOTAL NONINTEREST EXPENSE22,264  13,126  41,862  25,872  
INCOME BEFORE PROVISION FOR INCOME TAXES9,114  3,185  7,013  5,838  
INCOME TAX EXPENSE1,634  501  724  873  
CONSOLIDATED NET INCOME7,480  2,684  6,289  4,965  
NONCONTROLLING INTEREST IN NET LOSS OF SUBSIDIARY388  1,555  1,364  3,098  
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS$7,868  $4,239  $7,653  $8,063  
Basic net income attributable to common shareholders, per share$0.48  $0.38  $0.54  $0.71  
Diluted net income attributable to common shareholders, per share$0.48  $0.38  $0.54  $0.71  
See accompanying notes to consolidated financial statements.
5


RELIANT BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Dollar amounts in thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Consolidated net income$7,480  $2,684  $6,289  $4,965  
Other comprehensive income (loss)
Net unrealized gains on available-for-sale securities, net of tax of $1,127 and $1,241 for the three months ended June 30, 2020 and 2019, respectively, and $508 and $2,962 for the six months ended June 30, 2020 and 2019, respectively
3,182  3,523  1,433  8,386  
Net unrealized losses on interest rate swap derivatives net of tax of $284 and $304 or the three months ended June 30, 2020 and 2019, respectively, and $1,819 and $471for the six months ended June 30, 2020 and 2019, respectively
(802) (861) (5,137) (1,331) 
Reclassification adjustment for gains included in net income, net of tax of $86 and $46 for the three months ended June 30, 2020 and 2019, respectively, and $86 and $80 for the six months ended June 30, 2020 and 2019, respectively
(241) (129) (241) (226) 
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)2,139  2,533  (3,945) 6,829  
TOTAL COMPREHENSIVE INCOME$9,619  $5,217  $2,344  $11,794  

See accompanying notes to consolidated financial statements.
6


RELIANT BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - UNAUDITED
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Dollar amounts in thousands)

COMMON STOCKADDITIONAL
PAID-IN
CAPITAL
RETAINED
EARNINGS
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME (LOSS)
NONCONTROLLING
INTEREST
TOTAL
SHARESAMOUNT
BALANCE - JANUARY 1, 202011,206,254  $11,206  $167,006  $40,472  $5,069  $  $223,753  
Stock based compensation expense —  —  349  —  —  —  349  
Exercise of stock options 868  1  7  —  —  —  8  
Restricted stock and dividend forfeiture (3,837) (4) (69) —  —  —  (73) 
Conversion shares issued to shareholders of Tennessee Community Bank Holdings, Inc.811,210  811  17,230  —  —  —  18,041  
Noncontrolling interest contributions —  —  —  —  —  976  976  
Cash dividend declared to common shareholders ($0.10 per share)
—  —  —  (1,207) —  —  (1,207) 
Cumulative effect of lease standard adoption—  —  —  100  —  —  100  
Net loss—  —  —  (215) —  (976) (1,191) 
Other comprehensive loss—  —  —  —  (6,084) —  (6,084) 
BALANCE - MARCH 31, 202012,014,495  $12,014  $184,523  $39,150  $(1,015) $  $234,672  
Stock based compensation expense—  —  485  —  —  —  485  
Exercise of stock options1,021  1  14  —  —  —  15  
Employee Stock Purchase Plan stock issuance8,344  8  108  —  —  —  116  
Restricted stock awards3,022  3  (3) —  —  —    
Restricted stock and dividend forfeiture(1,697) (1) 1  —  —  —    
Conversion shares issued to shareholders of First Advantage Bancorp4,606,419  4,607  47,308  —  —  —  51,915  
Noncontrolling interest contributions—  —  —  —  —  388  388  
Cash dividend declared to common shareholders ($0.10 per share)
—  —  —  (1,667) —  —  (1,667) 
Net income (loss)—  —  —  7,868  —  (388) 7,480  
Other comprehensive income—  —  —  —  2,139  —  2,139  
BALANCE - JUNE 30, 202016,631,604  $16,632  $232,436  $45,351  $1,124  $  $295,543  

COMMON STOCKADDITIONAL
PAID-IN
CAPITAL
RETAINED
EARNINGS
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME (LOSS)
NONCONTROLLING
INTEREST
TOTAL
SHARESAMOUNT
BALANCE - JANUARY 1, 201911,530,810  $11,531  $173,238  $27,329  $(3,684) $  $208,414  
Stock based compensation expense —  —  250  —  —  —  250  
Exercise of stock options 2,183  2  26  —  —  —  28  
Restricted stock awards3,000  3  (3) —  —  —    
Restricted stock forfeiture(3,750) (4) 4  1  —  —  1  
Common stock shares redeemed(29,958) (30) (629) —  —  —  (659) 
Noncontrolling interest contributions —  —  —  —  —  1,543  1,543  
Cash dividends declared to common shareholders ($0.09 per share)
—  —  —  (1,035) —  —  (1,035) 
Net income (loss) —  —  —  3,824  —  (1,543) 2,281  
Other comprehensive income—  —  —  —  4,296  —  4,296  
BALANCE - MARCH 31, 201911,502,285  $11,502  $172,886  $30,119  $612  $  $215,119  
Stock based compensation expense—  —  280  —  —  —  280  
Exercise of stock options24,523  25  298  —  —  —  323  
Employee Stock Purchase Plan stock issuance4,728  5  85  —  —  —  90  
Restricted stock awards5,000  5  (5) —  —  —    
Restricted stock and dividend forfeiture(4,000) (4) 4  —  —  —    
Common stock shares redeemed(335,973) (336) (7,296) —  —  —  (7,632) 
Noncontrolling interest contributions—  —  —  —  —  1,555  1,555  
Cash dividends declared to common shareholders ($0.09 per share)
—  —  —  (1,009) —  —  (1,009) 
Net income (loss)—  —  —  4,239  —  (1,555) 2,684  
Other comprehensive income—  —  —  —  2,533  —  2,533  
BALANCE - JUNE 30, 201911,196,563  $11,197  $166,252  $33,349  $3,145  $  $213,943  

See accompanying notes to consolidated financial statements.
7


RELIANT BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Dollar amounts in thousands)
Six Months Ended
June 30,
OPERATING ACTIVITIES20202019
Consolidated net income$6,289  $4,965  
Adjustments to reconcile consolidated net income to net cash provided (used) by operating activities
Provision for loan losses5,900  200  
Deferred income taxes1,997  1,880  
Gain on disposal of premises and equipment(9)   
Depreciation and amortization of premises and equipment1,327  991  
Net amortization of securities1,354  1,586  
Net realized gains on sales of securities(327) (306) 
Gains on mortgage loans sold, net(3,821) (1,785) 
Stock-based compensation expense834  530  
Gain on other real estate(25)   
Increase in cash surrender value of life insurance contracts(687) (555) 
Mortgage loans originated for resale(184,146) (57,816) 
Proceeds from sale of mortgage loans129,742  63,853  
Other accretion, net of other amortization(4,184) (380) 
Change in
Accrued interest receivable(3,457) 968  
Other assets(10,478) (3,202) 
Accrued interest payable(1,352) (96) 
Other liabilities2,323  (4,389) 
TOTAL ADJUSTMENTS(65,009) 1,479  
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES(58,720) 6,444  
INVESTING ACTIVITIES
Cash used to convert shares, and redeem stock options and fractional shares, net of cash received(8,500)   
Activities in available for sale securities
Purchases(6,000) (41,083) 
Sales103,668  52,434  
Maturities, prepayments and calls9,635  5,418  
(Redemptions) purchases of restricted equity securities(2,009) 202  
Net increase in loans(108,983) (81,026) 
Purchase of buildings, leasehold improvements, and equipment(2,566) (590) 
Proceeds from sale of premises and equipment90    
Proceeds from sale of other real estate889    
NET CASH (USED IN) INVESTING ACTIVITIES(13,776) (64,645) 
FINANCING ACTIVITIES
Net change in deposits128,110  112,388  
Net change in other borrowings acquired from merger(58)   
Net change in advances from Federal Home Loan Bank(10,617) (46,352) 
Issuance of common stock, net of repurchase of restricted shares  351  
Issuance of common stock related to exercise of stock options and ESPP139  90  
Redemption of common stock to settle tax liability on restricted stock(73) (8,291) 
Noncontrolling interest contributions received1,364  2,905  
Cash dividends paid on common stock(2,935) (2,071) 
NET CASH PROVIDED BY FINANCING ACTIVITIES115,930  59,020  
NET CHANGE IN CASH AND CASH EQUIVALENTS43,434  819  
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD51,042  35,178  
CASH AND CASH EQUIVALENTS - END OF PERIOD$94,476  $35,997  
See accompanying notes to consolidated financial statements.

RELIANT BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Dollar amounts in thousands)
Six Months Ended
June 30,
20202019
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
Interest$12,382  $11,357  
Taxes$31  $536  
Non-cash investing and financing activities
Unrealized gain on securities available-for-sale$2,745  $12,099  
Unrealized gain (loss) on derivatives$8,087  $(2,859) 
Change in due to/from noncontrolling interest$1,364  $3,098  
Acquired bank facilities no longer in use transferred to other real estate owned and foreclosed assets from premises and equipment$2,420  $  
Loans foreclosed and transferred to other real estate owned and foreclosed assets$  $848  

See accompanying notes to consolidated financial statements.
8

Table of Contents
RELIANT BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of Reliant Bancorp, Inc. conform to accounting principles generally accepted in the United States of America ("U.S. GAAP") and to general practices within the banking industry. The following is a brief summary of the significant policies.

Nature of Operations

Reliant Bancorp, Inc. is a Tennessee corporation and the holding company for and the sole shareholder of Reliant Bank. Reliant Bancorp is registered as a financial holding company under the Bank Holding Company Act of 1956, as amended ("Bank Holding Company Act"). Reliant Bank is a commercial bank chartered under Tennessee law and a member of the Federal Reserve System (the "Federal Reserve"). Reliant Bank, Reliant Bancorp's wholly-owned bank subsidiary, provides a full range of traditional banking products and services to business and consumer clients throughout Middle Tennessee and the Nashville-Davidson-Murfreesboro-Franklin, TN Metropolitan Statistical Area (the “Nashville MSA”) and Chattanooga, Tennessee. Reliant Bank operates banking centers in Cheatham, Davidson, Hamilton, Hickman, Maury, Montgomery, Robertson, Rutherford, Sumner, and Williamson counties, Tennessee. Additionally, Reliant Bank operates mortgage offices in Brentwood, Chattanooga, Hendersonville, and Memphis, Tennessee, as well as two in Little Rock and one in Crossett, Arkansas. On January 1, 2020, TCB Holdings, a community banking organization headquartered in Ashland City, Tennessee, was merged with and into Reliant Bancorp. On April 1, 2020, First Advantage Bancorp, a community banking organization headquartered in Clarksville, Tennessee, was merged with and into Reliant Bancorp (See Note 12).

Reliant Risk Management, Inc., a newly-formed, wholly-owned insurance captive subsidiary of Reliant Bancorp, Inc. that began operations on June 1, 2020, is a Tennessee-based captive insurance company which insures Reliant Bancorp and the Bank against certain risks unique to their operations and for which insurance may not be currently available or economically feasible in today's insurance marketplace. Reliant Risk Management, Inc. pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. Reliant Risk Management, Inc. is subject to regulations of the State of Tennessee and undergoes periodic examinations by the Tennessee Department of Commerce and Insurance.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Quarterly Report on Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with U.S. GAAP.  All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by the report have been included.  The accompanying unaudited consolidated financial statements should be read in conjunction with Reliant Bancorp, Inc.’s consolidated financial statements and related notes appearing in Reliant Bancorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019.

The consolidated financial statements as of and for the periods presented include the accounts of Reliant Bancorp, Inc., Reliant Bank (the "Bank"), Community First Trups Holding Company ("TRUPS"), which is wholly owned by Reliant Bancorp, Inc., Reliant Risk Management, Inc. ("Risk"), which is wholly owned by Reliant Bancorp Inc., Reliant Investment Holdings, LLC ("Holdings"), which is wholly owned by the Bank, and Reliant Mortgage Ventures, LLC ("RMV"), of which the Bank controls 51% of the governance rights. Reliant Bancorp Inc., the Bank, TRUPS, Risk, Holdings, and RMV are collectively referred to herein as the “Company”. All significant inter-company balances and transactions have been eliminated in consolidation. As described in Note 12 to these unaudited consolidated financial statements, Reliant Bancorp, Inc. and TCB Holdings merged effective on January 1, 2020, and Reliant Bancorp, Inc. and FABK merged effective April 1, 2020. The accounting and reporting policies of the Company conform to U.S. GAAP and general practices in the banking industry.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

estimates that are particularly susceptible to significant change in the near term relate to determination of the allowance for loan losses, the valuation of other real estate, the valuation of debt and equity securities, the valuation of deferred tax assets and fair values of financial instruments.

The consolidated financial statements as of June 30, 2020, and for the three and six months ended June 30, 2020 and 2019, included herein have not been audited. The accounting and reporting policies of the Company conform to U.S. GAAP and Article 8 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures made are adequate to make the information not misleading.

The accompanying consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the interim periods presented. Such adjustments are of a normal recurring nature. The Company evaluates subsequent events through the date of filing. Certain prior period amounts have been reclassified to conform to the current period presentation. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.


Recently Adopted Accounting Pronouncements

Information about certain issued accounting standards updates is presented below. Also refer to Note 1 - Summary of Significant Accounting Policies, “Recent Authoritative Accounting Guidance” in the Annual Report on Form 10-K for the year ended December 31, 2019 for additional information related to previously issued accounting standards updates.

ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 went into effect for the Company on January 1, 2020 and the Company elected the prospective application approach provided by ASU 2018-11 and did not adjust prior periods for ASC 842. The Company also elected certain practical expedients within the standard and consistent with such elections did not reassess whether any expired or existing contracts are or contain leases, did not reassess the lease classification for any expired or existing leases, and did not reassess any initial direct costs for existing leases. The effect of implementing this pronouncement resulted in right to use assets of $11,973 and a similar corresponding liability, as of January 1, 2020.

ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." In March 2020, the FASB issued Topic 848 amendments to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Company has evaluated the effect of the pronouncement on the consolidated financial statements, noting no significant impact.


Newly Issued not yet Effective Accounting Standards

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is expected to be effective on January 1, 2023. We are currently evaluating the potential impact of ASU 2016-13 on the Company's financial statements. We are currently developing an implementation plan to include assessment of processes, portfolio segmentation, model development, system requirements and the identification of data and resource needs, among other things. The adoption of ASU 2016-13 could result in an increase in the allowance for loan losses as a result of changing from an “incurred loss” model, which encompasses
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

allowances for current known and inherent losses within the portfolio, to an “expected loss” model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore, ASU 2016-13 will necessitate that we establish an allowance for expected credit losses for certain debt securities and other financial assets. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Financial Instruments - Credit Losses (ASC 326), Derivatives and Hedging (ASC 815), and Financial Instruments (ASC 825). The amendments in this ASU improve the codification by eliminating inconsistencies and providing clarifications. The amended guidance in this ASU related to credit losses will be effective for the Company for fiscal years and interim periods beginning after December 15, 2022. The Company is currently evaluating the impact of these ASUs on the Company’s consolidated financial statements. While we are currently unable to reasonably estimate the impact of adopting these ASUs, we expect that the impact of adoption will be significantly influenced by the composition, characteristics and quality of the Company's loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date.

ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for the Company on January 1, 2021, with earlier adoption permitted and is not currently expected to have a significant impact on the Company's consolidated financial statements as it simplifies the test of impairment of goodwill.


NOTE 2 - SECURITIES

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income at June 30, 2020 and December 31, 2019 were as follows:
June 30, 2020
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
U. S. Treasury and other U. S. government agencies$54  $1  $  $55  
State and municipal171,979  13,865  (118) 185,726  
Corporate bonds11,250  99  (83) 11,266  
Mortgage-backed securities 37,624  350  (1,531) 36,443  
Asset-backed securities15,791    (267) 15,524
Total$236,698  $14,315  $(1,999) $249,014  

December 31, 2019
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
U. S. Treasury and other U. S. government agencies$59  $  $  $59  
State and municipal186,283  10,413  (36) 196,660  
Corporate bonds7,880  97  (132) 7,845  
Mortgage-backed securities 38,126  296  (661) 37,761  
Asset-backed securities18,374    (406) 17,968  
Total$250,722  $10,806  $(1,235) $260,293  

Securities pledged at June 30, 2020 and December 31, 2019 had a carrying amount of $43,972 and $46,918, respectively, and were pledged to collateralize Federal Home Loan Bank ("FHLB") advances, Federal Reserve Bank ("FRB") advances and municipal deposits.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)


The fair values of available for sale debt securities at June 30, 2020 by contractual maturity are provided below. Actual maturities may differ from contractual maturities for mortgage- and asset-backed securities since the underlying asset may be called or prepaid with or without penalty. Securities not due at a single maturity date are shown separately.
Amortized
Cost
Estimated
Fair Value
Due within one year$500  $498  
Due in one to five years2,179  2,180  
Due in five to ten years14,693  15,379  
Due after ten years165,911  178,990  
Mortgage-backed securities37,624  36,443  
Asset-backed securities15,791  15,524  
Total$236,698  $249,014  

The following table shows available for sale securities with unrealized losses and their estimated fair value aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019, respectively:
Less than 12 months12 months or moreTotal
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
June 30, 2020
State and municipal$1,879  $118  $  $  $1,879  $118  
Corporate bonds4,669  81  499  2  5,168  83  
Mortgage-backed securities 15,045  822  12,250  709  27,295  1,531  
Asset-backed securities821  1  14,633  266  15,454  267  
Total temporarily impaired$22,414  $1,022  $27,382  $977  $49,796  $1,999  

December 31, 2019
State and municipal$1,960  $36  $  $  $1,960  $36  
Corporate bonds    2,499  132  2,499  132  
Mortgage-backed securities 16,104  286  9,081  375  25,185  661  
Asset-backed securities    17,682  406  17,682  406  
Total temporarily impaired$18,064  $322  $29,262  $913  $47,326  $1,235  

Management has the intent and ability to hold all securities in an unrealized loss position for the foreseeable future, and the decline in fair value is largely due to changes in interest rates. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. There were 37 and 47 securities in an unrealized loss position as of June 30, 2020 and December 31, 2019, respectively.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans at June 30, 2020 and December 31, 2019 were comprised as follows:
June 30,
2020
December 31, 2019
Commercial, Industrial and Agricultural$452,628  $245,515  
Real Estate
    1-4 Family Residential360,908  227,529  
    1-4 Family HELOC85,050  96,228  
    Multi-family and Commercial883,751  536,845  
    Construction, Land Development and Farmland337,459  273,872  
Consumer195,510  16,855  
Other7,203  13,180  
Total2,322,509  1,410,024  
Less
    Deferred loan fees 5,185  72  
    Allowance for loan losses18,237  12,578  
Loans, net$2,299,087  $1,397,374  

Activity in the allowance for loan losses by portfolio segment was as follows for the six months ended June 30, 2020 and June 30, 2019, respectively:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Beginning balance at December 31, 2019$2,529  $5,285  $2,649  $1,280  $624  $177  $34  $12,578  
Charge-offs(539)   (114) (60) (98) (295)   (1,106) 
Recoveries70  11  4  747  3  30    865  
Provision2,615  3,111  (413) (513) 446  672  (18) 5,900  
Ending balance at
June 30, 2020
$4,675  $8,407  $2,126  $1,454  $975  $584  $16  $18,237  

Beginning balance at December 31, 2018$1,751  $4,429  $2,500  $1,333  $656  $184  $39  $10,892  
Charge-offs(168)     (17)   (21) (13) (219) 
Recoveries294  59  201  216  11  12    793  
Provision4  225  6  (77) 19  13  10  200  
Ending balance at
June 30, 2019
$1,881  $4,713  $2,707  $1,455  $686  $188  $36  $11,666  


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

The allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2020 were as follows:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Allowance for loan losses
Individually evaluated for impairment$818  $  $  $  $  $  $  $818  
Acquired with credit impairment                
Collectively evaluated for impairment 3,857  8,407  2,126  1,454  975  58416  17,419  
Total$4,675  $8,407  $2,126  $1,454  $975  $584  $16  $18,237  
Loans
Individually evaluated for impairment$1,218  $2,667  $1,817  $1,474  $318  $  $  $7,494  
Acquired with credit impairment441  1,341  796  1,005  14  1,326    4,923  
Collectively evaluated for impairment 450,969  879,743  334,846  358,429  84,718  194,1847,203  2,310,092  
Total$452,628  $883,751  $337,459  $360,908  $85,050  $195,510  $7,203  $2,322,509  
 
The allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2019 were as follows:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Allowance for loan losses
Individually evaluated for impairment$755  $  $17  $  $  $  $  $772  
Acquired with credit impairment                
Collectively evaluated for impairment 1,774  5,285  2,632  1,280  624  177  34  11,806  
Total$2,529  $5,285  $2,649  $1,280  $624  $177  $34  $12,578  
Loans
Individually evaluated for impairment$1,154  $2,396  $1,218  $1,120  $374  $  $  $6,262  
Acquired with credit impairment  215  813  195        1,223  
Collectively evaluated for impairment 244,361  534,234  271,841  226,214  95,854  16,855  13,180  1,402,539  
Total$245,515  $536,845  $273,872  $227,529  $96,228  $16,855  $13,180  $1,410,024  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)


Risk characteristics relevant to each portfolio segment are as follows:

Commercial, industrial and agricultural: The commercial, industrial and agricultural loan portfolio segment includes loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other expansion projects. Collection risk in this portfolio is driven by the creditworthiness of underlying borrowers, particularly cash flow from customers’ business operations. Commercial, industrial and agricultural loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial and industrial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis.

Multi-family and commercial real estate: Multi-family and commercial real estate loans are subject to underwriting standards and processes similar to commercial, industrial and agricultural loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.

Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties comprising the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting the market areas it serves. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. Non-owner occupied commercial real estate loans are loans secured by multifamily and commercial properties where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property.

These loans are made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail properties. Owner-occupied commercial real estate loans are loans where the primary source of repayment is the cash flow from the ongoing operations and business activities conducted by the party, or an affiliate of the party, who owns the property.

Construction and land development: Loans for non-owner-occupied real estate construction or land development are generally repaid through cash flow related to the operation, sale or refinance of the property. The Company also finances construction loans for owner-occupied properties. A portion of the Company’s construction and land development portfolio segment is comprised of loans secured by residential product types (residential land and single-family construction). With respect to construction loans to developers and builders that are secured by non-owner occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates, market sales activity, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

        
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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)


1-4 family residential real estate: Residential real estate loans, which include related manufactured homes with real estate, represent loans to consumers or investors to finance a residence. These loans are typically financed on 15- to 30-year amortization terms, but generally with shorter maturities of 5 to 15 years. Many of these loans are extended to borrowers to finance their primary or secondary residence. Loans to an investor secured by a 1-4 family residence will be repaid from either the rental income from the property or from the sale of the property. This loan segment also includes closed-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home. Loans in this portfolio segment are underwritten and approved based on a number of credit quality criteria including limits on maximum Loan-to-Value ("LTV"), minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these market values impact the depth of potential losses in this portfolio segment.

1-4 family HELOC: This loan segment includes open-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home utilizing a revolving line of credit. These loans are underwritten and approved based on a number of credit quality criteria including limits on maximum LTV, minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these market values impact the depth of potential losses in this portfolio segment. Because of the revolving nature of these loans as well as the fact that many represent second mortgages, this portfolio segment can contain more risk than the amortizing 1-4 family residential real estate loans.

Consumer: The consumer loan portfolio segment includes non-real estate secured direct loans to consumers for household, family, and other personal expenditures as well as manufactured homes without real estate. Consumer loans may be secured or unsecured and are usually structured with short or medium term maturities. These loans are underwritten and approved based on a number of consumer credit quality criteria including limits on maximum LTV on secured consumer loans, minimum credit scores, and maximum debt to income. Many traditional forms of consumer installment credit have standard monthly payments and fixed repayment schedules of one to five years. These loans are made with either fixed or variable interest rates that are based on specific indices. Loans to finance manufactured homes that are not secured by real estate are classified as consumer loans and have standard monthly payments and fixed repayment schedules of 15 to 23 years. Installment loans fill a variety of needs, such as financing the purchase of an automobile, a boat, a recreational vehicle, or other large personal items, or for consolidating debt. These loans may be unsecured or secured by an assignment of title, as in an automobile loan, or by money in a bank account. In addition to consumer installment loans, this portfolio segment also includes secured and unsecured personal lines of credit as well as overdraft protection lines. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.

Non-accrual loans by class of loan were as follows at June 30, 2020 and December 31, 2019:
June 30, 2020December 31, 2019
Commercial, Industrial and Agricultural$928  $572  
Multi-family and Commercial Real Estate2,711  1,276  
Construction, Land Development and Farmland412  555  
1-4 Family Residential Real Estate1,468  1,344  
1-4 Family HELOC241  296  
Consumer1,781  28  
Total$7,541  $4,071  

Performing non-accrual loans totaled $2,392 and $1,332 at June 30, 2020 and December 31, 2019, respectively.







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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

Individually impaired loans by class of loans were as follows at June 30, 2020:
Unpaid
Principal
Balance
Recorded
Investment
with no
Allowance for Loan Losses
Recorded
Recorded
Investment
with
Allowance for Loan Losses
Recorded
Total
Recorded
Investment
Related
Allowance for Loan Losses
Commercial, Industrial and Agricultural$2,845  $670  $989  $1,659  $818  
Multi-family and Commercial Real Estate5,691  4,008    4,008    
Construction, Land Development and Farmland3,081  2,613    2,613    
1-4 Family Residential Real Estate3,121  2,479    2,479    
1-4 Family HELOC438  332    332    
Consumer3,132  1,326    1,326    
Total $18,308  $11,428  $989  $12,417  $818  

Individually impaired loans by class of loans were as follows at December 31, 2019:
Unpaid
Principal
Balance
Recorded
Investment
with no
Allowance for Loan Losses
Recorded
Recorded
Investment
with
Allowance for Loan Losses
Recorded
Total
Recorded
Investment
Related
Allowance for Loan Losses
Commercial, Industrial and Agricultural$1,154  $  $1,154  $1,154  $755  
Multi-family and Commercial Real Estate2,624  2,611    2,611    
Construction, Land Development and Farmland2,348  1,860  171  2,031  17  
1-4 Family Residential Real Estate1,419  1,315    1,315    
1-4 Family HELOC376  374    374    
Total $7,921  $6,160  $1,325  $7,485  $772  

The average balances of impaired loans for the six months ended June 30, 2020 and 2019 were as follows:
20202019
Commercial, Industrial and Agricultural$1,200  $791  
Multi-family and Commercial Real Estate3,076  2,548  
Construction, Land Development and Farmland2,017  2,747  
1-4 Family Residential Real Estate1,915  1,639  
1-4 Family HELOC380  99  
Consumer448  11  
Total $9,036  $7,835  










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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

The Company utilizes a risk grading system to monitor the credit quality of the Company’s commercial loan portfolio which consists of commercial, industrial and agricultural, commercial real estate and construction loans. Loans are graded on a scale of 1 to 9. Grades 1 to 5 are pass credits, grade 6 is special mention, grade 7 is substandard, grade 8 is doubtful and grade 9 is loss. A description of the risk grades are as follows:

        Grade 1 - Minimal Risk (Pass)
This grade includes loans to borrowers with a strong financial position and history of profits and cash flows sufficient to service the debt. These borrowers have well defined sources of primary/secondary repayment, conservatively leveraged balance sheets and the ability to access a wide range of financing alternatives. Collateral securing these loans is negotiable, of sufficient value and in possession of the Company. Risk of loss is unlikely.

        Grade 2 - High Quality (Pass)
This grade includes loans to borrowers with a strong financial condition reflecting dependable net profits and cash flows. The borrower has verifiable liquid net worth providing above average asset protection. An identifiable market exists for the collateral. Risk of loss is unlikely.

        Grade 3 - Above Average (Pass)
This grade includes loans to borrowers with a balance sheet that reflects a comfortable degree of leverage and liquidity. Borrowers are profitable and have a sustained record of servicing debt. An identifiable market exists for the collateral, but liquidation could take up to one year. Risk of loss is unlikely.

        Grade 4 - Average (Pass)
This grade includes loans to borrowers with a financial condition that is satisfactory and comparable to industry standards. The borrower has verifiable net worth, providing over time average asset protection. The borrower's cash flows are sufficient to satisfy debt service requirements. Risk of loss is below average.

        Grade 5 - Acceptable (Management Attention) (Pass)
This grade includes loans to borrowers whose loans are performing, but sources of repayment are not documented by the current credit analysis. There are some declining trends in margins, ratios and/or cash flow. Guarantor(s) have strong net worth(s), but assets may be concentrated in real estate or other illiquid investments. Risk of loss is average.

        Grade 6 - Special Mention
Special mention assets have potential weaknesses that may, if not checked or corrected, weaken the asset or inadequately protect the Company’s position at some future date. These assets pose elevated risk, but their weakness does not yet justify a substandard classification. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Nonfinancial reasons for rating a credit exposure special mention include management problems, pending litigation, an ineffective loan agreement or other material structural weakness, and any other significant deviation from prudent lending practices. The special mention rating is designed to identify a specific level of risk and concern about asset quality. Although a special mention asset has a higher probability of default than a pass asset, its default is not imminent.

        Grade 7 - Substandard
A ‘‘substandard’’ extension of credit is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Extensions of credit so classified should have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard credits, does not have to exist in individual extensions of credit classified substandard. Substandard assets have a high probability of payment default, or they have other well-defined weaknesses. They require more intensive supervision by Company management. Substandard assets are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigation.

        
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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

Grade 8 - Doubtful
An extension of credit classified ‘‘doubtful’’ has all the weaknesses inherent in one classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage of and strengthen the credit, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceedings, capital injection, perfecting liens on additional collateral, or refinancing plans. Generally, the doubtful classification should not extend for a long period of time because in most cases the pending factors or events that warranted the doubtful classification should be resolved either positively or negatively in a reasonable period of time.

        Grade 9 - Loss
Extensions of credit classified ‘‘loss’’ are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Amounts classified loss should be promptly charged off. The Company will not attempt long term recoveries while the credit remains on the Company’s books. Losses should be taken in the period in which they surface as uncollectible. With loss assets, the underlying borrowers are often in bankruptcy, have formally suspended debt repayments, or have otherwise ceased normal business operations. Once an asset is classified loss, there is little prospect of collecting either its principal or interest.

Non-commercial purpose loans are initially assigned a default loan grade of 99 (Pass) and are risk graded (Grade 6, 7, or 8) according to delinquency status when applicable.

Credit quality indicators by class of loan were as follows at June 30, 2020:
PassSpecial
Mention
SubstandardTotal
Commercial, Industrial and Agricultural$448,744  $1,551  $2,333  $452,628  
1-4 Family Residential Real Estate357,377  115  3,416  360,908  
1-4 Family HELOC84,718    332  85,050  
Multi-family and Commercial Real Estate877,359  705  5,687  883,751  
Construction, Land Development and Farmland335,771    1,688  337,459  
Consumer 192,837  9  2,664  195,510  
Other5,683  1,520    7,203  
Total $2,302,489  $3,900  $16,120  $2,322,509  

Credit quality indicators by class of loan were as follows at December 31, 2019:
PassSpecial
Mention
SubstandardTotal
Commercial, Industrial and Agricultural$241,089  $2,382  $2,044  $245,515  
1-4 Family Residential Real Estate225,809    1,720  227,529  
1-4 Family HELOC95,678    550  96,228  
Multi-family and Commercial Real Estate531,055  1,519  4,271  536,845  
Construction, Land Development and Farmland272,440    1,432  273,872  
Consumer 16,634    221  16,855  
Other13,180      13,180  
Total $1,395,885  $3,901  $10,238  $1,410,024  


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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

Past due status by class of loan was as follows at June 30, 2020:
30-59 Days
Past Due
60-89 Days
Past Due
90+ Days
Past Due
Total
Past Due
CurrentTotal Loans
Commercial, Industrial and Agricultural$600  $5  $490  $1,095  $451,533  $452,628  
1-4 Family Residential Real Estate790  760  483  2,033  358,875  360,908  
1-4 Family HELOC    198  198  84,852  85,050  
Multi-family and Commercial Real Estate    2,166  2,166  881,585  883,751  
Construction, Land Development and Farmland411  569  225  1,205  336,254  337,459  
Consumer 407  326  913  1,646  193,864  195,510  
Other        7,203  7,203  
Total$2,208  $1,660  $4,475  $8,343  $2,314,166  $2,322,509  

Past due status by class of loan was as follows at December 31, 2019:
30-59 Days
Past Due
60-89 Days
Past Due
90+ Days
Past Due
Total
Past Due
CurrentTotal Loans
Commercial, Industrial and Agricultural$79  $4  $572  $655  $244,860  $245,515  
1-4 Family Residential Real Estate501  236  229  966  226,563  227,529  
1-4 Family HELOC    296  296  95,932  96,228  
Multi-family and Commercial Real Estate485    558  1,043  535,802  536,845  
Construction, Land Development and Farmland255    339  594  273,278  273,872  
Consumer 38  26  64  128  16,727  16,855  
Other        13,180  13,180  
Total$1,358  $266  $2,058  $3,682  $1,406,342  $1,410,024  

There were no loans past due 90 days or more and still accruing interest at June 30, 2020. However, credit card balances totaling $8 were past due 90 days or more and still accruing interest. At December 31, 2019, there was one loan totaling $64 past due 90 days or more and still accruing interest.

Mortgage loans held for sale of $101,579 are excluded from the loans and allowance tables herein. While the majority of this balance is current, loans past due 30-59 days are $3,270 and $184 as of June 30, 2020 and December 31, 2019, respectively. No mortgage loans held for sale were past due 60 days or more as of June 30, 2020 or December 31, 2019, respectively.

The following table presents loans by class modified as troubled debt restructurings ("TDRs") during the first six months of 2020. There were no loans that were modified as TDRs during the six months ended June 30, 2019.
Number of ContractsPre-Modification Outstanding Recorded InvestmentsPost-Modification Outstanding Recorded Investments
June 30, 2020
Commercial, Industrial and Agricultural1  $150  $150  
Multi-family and Commercial Real Estate1  721  721  
1-4 Family Residential1  394  394  
Total3  $1,265  $1,265  

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, and subsequent regulatory guidance provide that financial institutions may elect to account for certain loan modifications due to COVID-19 as not TDRs. The Company had applied this guidance to approve initial modifications in April and May 2020 for
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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)

loans with principal balances of $530.7 million. The majority of these modifications were for a period of up to three months and contained either interest-only periods or full payment deferrals. Through August 5, 2020, further modifications were approved for $39.0 million of the loans previously modified. Additional modifications of these loans are likely to be executed in the third quarter of 2020.

The CARES Act provides over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to administer new loan programs including, but not limited to, the guarantee of loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). Upon completion of the FABK Transaction as disclosed in Note 12, we assumed their qualified SBA lender status. The Company originated $83.3 million of PPP loans in the second quarter of 2020 which are included in the commercial, industrial, and agricultural segment.

The Company has acquired loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding balance and carrying amount of the purchased credit impaired loans were as follows at June 30, 2020 and December 31, 2019:

June 30, 2020December 31, 2019
Commercial, Industrial and Agricultural$1,192  $  
Multi-family and Commercial Real Estate2,372  217  
Construction, Land Development and Farmland1,012  1,021  
1-4 Family Residential Real Estate1,314  231  
1-4 Family HELOC18    
Consumer2,416    
Total outstanding balance8,324  1,469  
Less remaining purchase discount3,401  246  
Allowance for loan losses    
Carrying amount, net of allowance for loan losses and remaining purchase discounts$4,923  $1,223  

Activity related to the accretable portion of the purchase discount on loans acquired with deteriorated credit quality is as follows for the six months ended June 30, 2020 and 2019:
20202019
Balance at January 1,$98  $110  
New loans purchased870    
Year-to-date settlements(80) (7) 
Balance at June 30,$888  $103  



NOTE 4 - OTHER REAL ESTATE

At June 30, 2020, and December 31, 2019, the Company held other real estate recorded at a value of $2,514 and $750, respectively, which represents fair value less costs to sell. The June 30, 2020 balance included retired bank facilities of $2,420 and two manufactured housing properties valued at $94. These residential properties were part of the four properties valued at $208 added through the acquisition of First Advantage Bank in the second quarter of 2020. During the three months ended June 30, 2020, the Company sold two of these properties resulting in a gain on sale of $11. Additionally, at June 30, 2020, there were three real estate loans with related balances totaling $320 in the process of foreclosure. Of the two retired bank facilities no longer in use, one sold as of July 31, 2020. Expenses related to other real estate totaled $4 for the three and six months ended June 30, 2020, respectively.

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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)





NOTE 5 - FAIR VALUES OF ASSETS AND LIABILITIES
 
Financial accounting standards relating to fair value measurements establish a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2 Inputs to the valuation methodology include:

Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability; and
Inputs that are derived principally from or corroborated by the observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 Inputs to the valuation methodology are unobservable and reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis:

Securities available for sale: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The Company obtains fair value measurements for securities available for sale from an independent pricing service. The fair value measurements consider observable data that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, cash flows and reference data, including market research publications, among other things.

        Interest rate swaps: The fair values of interest rate swaps are determined based on discounted future cash flows.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Assets and liabilities measured at fair value on a nonrecurring basis include the following:

Impaired Loans: The fair value of an impaired loan with specific allocations of the allowance for loan losses is generally based on the present value of expected payments using the loan’s effective rate as the discount rate or recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




Other Real Estate: The fair value of other real estate is generally based on recent real estate appraisals less estimated disposition cost. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in Level 3 classification of the inputs for determining fair value.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company’s valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

The following table sets forth the Company’s major categories of assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy, as of June 30, 2020 and December 31, 2019:

Fair ValueQuoted
Prices in
Active
Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
June 30, 2020
Assets
U. S. Treasury and other U. S. government agencies $55  $  $55  $  
State and municipal185,726    185,726    
Corporate bonds11,266    11,266    
Mortgage backed securities 36,443    36,443    
Asset backed securities15,524    15,524    
Liabilities
Derivative liabilities$10,795  $  $10,795  $  
December 31, 2019
Assets
U. S. Treasury and other U. S. government agencies $59  $  $59  $  
State and municipal196,660    196,660    
Corporate bonds7,845    7,845    
Mortgage backed securities 37,761    37,761    
Asset backed securities17,968    17,968    
Derivative assets688    688    
Liabilities
Derivative liabilities$3,396  $  $3,396  $  

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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




The following table sets forth the Company’s major categories of assets and liabilities measured at fair value on a nonrecurring basis, by level within the fair value hierarchy, as of June 30, 2020 and December 31, 2019:

Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
June 30, 2020    
Assets    
Impaired loans$171  $  $  $171  
Other real estate2,514      2,514  
Other repossessions1,508      1,508  
December 31, 2019    
Assets    
Impaired loans$553  $  $  $553  
Other real estate750    750  
Other repossessions      


The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at June 30, 2020 and December 31, 2019:
Valuation
Techniques (1)
Significant
Unobservable Inputs
Range
(Weighted Average)
Impaired loansAppraisalEstimated costs to sell10%
Other real estateAppraisalEstimated costs to sell10%
Other repossessionsThird-party guidelinesEstimated costs to sell10%
(1)The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent. Estimated cash flows change and appraised values of the assets or collateral underlying the loans will be sensitive to changes.


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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




Carrying amounts and estimated fair values of financial instruments not reported at fair value at June 30, 2020 and December 31, 2019 were as follows:
June 30, 2020Carrying
Amount
Estimated
Fair
Value
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Financial assets
Cash and due from banks$93,838  $93,838  $93,838  $  $  
Federal funds sold638  638    638    
Loans, net2,299,087  2,297,086      2,297,086  
Mortgage loans held for sale101,579  102,531    102,531    
Accrued interest receivable13,901  13,901    13,901    
Restricted equity securities17,509  17,509    17,509    
Financial liabilities
Deposits$2,530,062  $2,537,890  $  $  $2,537,890  
Accrued interest payable2,918  2,918    2,918    
Subordinate debentures70,413  67,543      67,543  
Federal Home Loan Bank advances49,121  49,552      49,552  

December 31, 2019
Financial assets
Cash and due from banks$50,990  $50,990  $50,990  $  $  
Federal funds sold52  52    52    
Loans, net1,397,374  1,383,719      1,383,719  
Mortgage loans held for sale37,476  38,379    38,379    
Accrued interest receivable7,111  7,111    7,111    
Restricted equity securities11,279  11,279    11,279    
Financial liabilities
Deposits$1,583,789  $1,582,117  $  $  $1,582,117  
Accrued interest payable2,022  2,022    2,022    
Subordinate debentures70,883  71,454      71,454  
Federal Home Loan Bank advances10,737  10,755      10,755  

The methods and assumptions used to estimate fair value are described as follows:

Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable,  restricted equity securities, federal funds sold or purchased, demand deposits, and variable rate loans or deposits that re-price frequently and fully. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent re-pricing or re-pricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of debt is based on discounted cash flows using current rates for similar financing.




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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




NOTE 6 - STOCK-BASED COMPENSATION

In 2006, the Board of Directors and shareholders of the Bank (then known as "Commerce Union Bank") approved the Commerce Union Bank Stock Option Plan (the “Plan”). The Plan provided for the granting of stock options for up to 625,000 shares of Bank common stock to employees and organizers and authorized the issuance of Bank common stock upon the exercise of such options. As part of the Bank's reorganization into a holding company corporate structure in 2012, all Bank options were replaced with Commerce Union Bancshares, Inc. (now known as "Reliant Bancorp, Inc.") options with no change in terms.

On March 10, 2015, the shareholders of Reliant Bancorp (then known as "Commerce Union Bancshares, Inc.") approved the Commerce Union Bancshares, Inc. Amended and Restated Stock Option Plan (the “A&R Plan”), which permits the grant of awards with respect to up to 1,250,000 shares of Reliant Bancorp common stock in the form of stock options. As part of the merger of Commerce Union Bank and Reliant Bank in 2015, all outstanding stock options of Reliant Bank were converted to stock options of Reliant Bancorp (then known as "Commerce Union Bancshares, Inc.") under the A&R Plan. Under the A&R Plan, stock option awards may be granted in the form of incentive stock options or non-statutory stock options, and are generally exercisable for up to 10 years following the date such option awards are granted. Exercise prices of incentive stock options must be equal to or greater than the fair market value of Reliant Bancorp's common stock on the grant date.
        
On June 18, 2015, the shareholders of Reliant Bancorp (then known as "Commerce Union Bancshares, Inc.") approved the Commerce Union Bancshares, Inc. 2015 Equity Incentive Plan, which reserves up to 900,000 shares of Reliant Bancorp common stock to be subject to awards under the plan, including awards in the form of stock options, restricted stock grants, performance-based awards, and other awards denominated or payable by reference to or based on or related to Reliant Bancorp common stock.

Common Stock Options
        
A summary of stock option activity for the six months ended June 30, 2020 is as follows:
SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at January 1, 2020149,293$18.81  6.68 years$553  
Granted  $  
Exercised(1,889)$11.47  
Forfeited or expired(12,700)$21.82  
Outstanding at June 30, 2020134,704$18.68  6.13 years$191  
Exercisable at June 30, 202074,004$15.63  4.82 years$163  


SharesWeighted Average
Grant-Date Fair Value
Non-vested options at January 1, 202074,600  $6.08
Granted  $
Vested(3,200) $5.91
Forfeited(10,700) $5.86
Non-vested options at June 30, 202060,700  $6.13
        
As of June 30, 2020, there was $267 of unrecognized future compensation expense to be recognized related to stock options.



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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)






Restricted Stock and Restricted Stock Unit Awards

The following table shows the activity related to non-vested restricted stock and restricted stock unit awards for the six months ended June 30, 2020:
Restricted Stock UnitsRestricted Stock
Underlying SharesWeighted Average Grant-Date
Fair Value
SharesWeighted Average Grant-Date
Fair Value
Non-vested units/shares at January 1, 202047,750  $23.30  90,960  $25.31  
Granted10,000  12.63      
Vested(3,022) 23.30  (16,466) 23.41  
Forfeited(978) 23.30  (5,534) 23.35  
Non-vested units/shares at June 30, 202053,750  $21.31  68,960  $25.92  

As of June 30, 2020, there was $981 of unrecognized compensation cost related to non-vested restricted stock and restricted stock unit awards.

NOTE 7 - REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to regulatory capital requirements administered by the federal and state banking agencies. As of June 30, 2020, Reliant Bancorp fell under the Federal Reserve's Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (the “Small Bank Holding Company Policy Statement”), which is generally applicable to bank holding companies with consolidated assets of less than $3 billion, and was, therefore, not subject to consolidated capital requirements. However, we have chosen to provide our consolidated capital ratios below. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes as of June 30, 2020, the Bank meets all capital adequacy requirements to which it is subject.

Prompt corrective action regulations provide five bank capital classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2020 and December 31, 2019, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

In July 2013, the Federal Deposit Insurance Corporation (FDIC) approved final rules that substantially amended the regulatory risk-based capital rules applicable to Reliant Bancorp and the Bank. The final rules implement the regulatory capital reforms of the Basel Committee on Banking Supervision reflected in “Basel III: A Global Framework for More Resilient Banks and Banking Systems” ("Basel III") and changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.







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JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




Under these rules, the leverage and risk-based capital ratios of bank holding companies (other than bank holding companies that
fall under the Small Bank Holding Company Policy Statement and are not subject to consolidated capital requirements) may not be lower than the leverage and risk-based capital ratios for insured depository institutions. The final rules implementing Basel III became effective on January 1, 2015, and include new minimum risk-based capital and leverage ratios and a new common equity tier 1 ratio. In addition, these rules refine the definition of what constitutes capital for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital.

Basel III established a “capital conservation buffer” of 2.5%. An institution is subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if capital levels fall below minimum levels plus the buffer.

Capital amounts and ratios for Reliant Bancorp and the Bank (required) are presented below as of June 30, 2020 and December 31, 2019.
Actual
Regulatory
Capital
Minimum Required
Capital Including
Capital Conservation
Buffer
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
AmountRatioAmountRatioAmountRatio
June 30, 2020
Reliant Bancorp
Tier I leverage$243,428  8.47 %$114,960  4.00 %$143,700  5.00 %
Common equity tier I231,701  9.25 %175,341  7.00 %162,817  6.50 %
Tier I risk-based capital243,428  9.71 %213,094  8.50 %200,559  8.00 %
Total risk-based capital320,776  12.80 %263,150  10.50 %250,619  10.00 %
Bank
Tier I leverage$293,602  10.23 %$114,791  4.00 %$143,489  5.00 %
Common equity tier I293,602  11.74 %175,028  7.00 %162,526  6.50 %
Tier I risk-based capital293,602  11.74 %212,534  8.50 %200,032  8.00 %
Total risk-based capital312,264  12.49 %262,541  10.50 %250,039  10.00 %
December 31, 2019
Reliant Bancorp
Tier I leverage$176,748  9.74 %$72,586  4.00 %$90,733  5.00 %
Common equity tier I165,063  10.55 %109,520  7.00 %101,698  6.50 %
Tier I risk-based capital176,748  11.30 %132,952  8.50 %125,131  8.00 %
Total risk-based capital249,751  15.97 %164,207  10.50 %156,388  10.00 %
Bank
Tier I leverage$186,734  10.30 %$72,518  4.00 %$90,648  5.00 %
Common equity tier I186,734  11.95 %109,384  7.00 %101,571  6.50 %
Tier I risk-based capital186,734  11.95 %132,823  8.50 %125,010  8.00 %
Total risk-based capital199,737  12.79 %163,975  10.50 %156,167  10.00 %


NOTE 8 - EARNINGS PER SHARE

The following is a summary of the components comprising basic and diluted earnings per common share of stock ("EPS"):

Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Basic EPS Computation
Net income attributable to common shareholders$7,868  $4,239  $7,653  $8,063  
Weighted average common shares outstanding16,496,817  11,196,898  14,196,254  11,300,095  
Basic earnings per common share$0.48  $0.38  $0.54  $0.71  
Diluted EPS Computation
Net income attributable to common shareholders$7,868  $4,239  $7,653  $8,063  
Weighted average common shares outstanding16,496,817  11,196,898  14,196,254  11,300,095  
Dilutive effect of stock options, restricted stock shares and units, and employee stock purchase plan32,263  89,729  44,911  78,300  
Adjusted weighted average common shares outstanding16,529,080  11,286,627  14,241,165  11,378,395  
Diluted earnings per common share$0.48  $0.38  $0.54  $0.71  

NOTE 9 - SEGMENT REPORTING

The Company has two reportable business segments: retail banking and residential mortgage banking. Segment information is derived from the internal reporting system utilized by management. Revenues and expenses for segments reflect those which can be specifically identified and have been assigned based on internally developed allocation methods. Financial results have been presented, to the extent practicable, as if each segment operated on a stand-alone basis.

Retail Banking provides deposit and lending services to consumer and business customers within our primary geographic markets. Our customers are serviced through branch locations, ATMs, online banking, and mobile banking.

Residential Mortgage Banking originates traditional first lien residential mortgage loans and first lien home equity lines of credit throughout the United States. The traditional first lien residential mortgage loans are typically underwritten to government agency standards and sold to third-party secondary market mortgage investors. The home equity lines of credit are typically sold to participating banks or other investor groups and are underwritten to their standards.

During the second quarter of 2019, RMV began acquiring loans from approved correspondent lenders and reselling them in the secondary market. These loans are not government agency-qualified loans and are of higher risk, such as jumbo loans or senior position home equity lines of credit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




The following presents summarized results of operations for the Company’s business segments for the periods indicated:
Three Months Ended
June 30, 2020
Retail BankingResidential
Mortgage
Banking
Elimination
Entries
Consolidated
Net interest income$29,420  $536  $  $29,956  
Provision for loan losses3,000      3,000  
Noninterest income2,174  2,240  8  4,422  
Noninterest expense (excluding merger expense)16,433  3,199    19,632  
Merger expense2,632      2,632  
Income tax expense (benefit)1,661  (27)   1,634  
Net income (loss)7,868  (396) 8  7,480  
Noncontrolling interest in net loss of subsidiary  396  (8) 388  
Net income attributable to common shareholders$7,868  $  $  $7,868  

 Three Months Ended
June 30, 2019
 Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$13,703  $110  $  $13,813  
Provision for loan losses200      200  
Noninterest income1,473  1,235  (10) 2,698  
Noninterest expense (excluding merger expense)10,129  2,996    13,125  
Merger expense1      1  
Income tax expense (benefit)607  (106)   501  
Net income (loss)4,239  (1,545) (10) 2,684  
Noncontrolling interest in net loss of subsidiary  1,545  10  1,555  
Net income attributable to common shareholders$4,239  $  $  $4,239  

Six Months Ended June 30, 2020
Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$46,202  $869  $  $47,071  
Provision for loan losses5,900      5,900  
Noninterest income3,883  3,804  17  7,704  
Noninterest expense (excluding merger expense)28,894  6,150    35,044  
Merger expense6,818      6,818  
Income tax expense (benefit)820  (96)   724  
Net income (loss)7,653  (1,381) 17  6,289  
Noncontrolling interest in net loss of subsidiary  1,381  (17) 1,364  
Net income attributable to common shareholders$7,653  $  $  $7,653  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




Six Months Ended June 30, 2019
Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$27,076  $198  $  $27,274  
Provision for loan losses200      200  
Noninterest income2,851  1,810  (25) 4,636  
Noninterest expense (excluding merger expense)20,574  5,295    25,869  
Merger expense3      3  
Income tax expense (benefit)1,087  (214)   873  
Net income (loss)8,063  (3,073) (25) 4,965  
Noncontrolling interest in net loss of subsidiary  3,073  25  3,098  
Net income attributable to common shareholders$8,063  $  $  $8,063  


NOTE 10 - DERIVATIVES

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and other terms of the individual interest rate swap agreements.

Interest Rate Swaps Designated as Cash Flow Hedges

Interest rate swaps with notional amounts totaling $160,000 as of June 30, 2020 were designated as cash flow hedges of certain short-term interest-bearing liabilities and subordinated debentures, which are fully effective. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining terms of the swap agreements.


Summary information related to the interest rate swaps designated as cash flow hedges as of June 30, 2020, is as follows:
Notional amounts$160,000  
Weighted average pay rates2.050 %
Weighted average receive rates1.679 %
Weighted average maturity 3.60 years
Unrealized losses$9,034  

Cash Flow Hedges
        
The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the three months ended June 30, 2020:

Amount of Gain (Loss) Recognized in OCI
(Effective Portion)
Amount of Gain (Loss) Reclassified from OCI to Interest IncomeAmount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion)
June 30, 2020
Interest rate contracts$(5,137) $  $  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




The following table reflects the cash flow hedges included in the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively:
June 30, 2020December 31, 2019
Notional AmountFair ValueNotional AmountFair Value
Included in other liabilities:
Interest rate swaps related to:
Subordinate debentures$10,000  $819  $10,000  $439  
Short-term interest bearing liabilities150,000  8,215  100,000  1,639  
Total included in other liabilities$160,000  $9,034  $110,000  $2,078  



Fair Value Hedges

The following table reflects the fair value hedges included in the Consolidated Statements of Income for the six months ended June 30, 2020 and 2019, respectively:
Interest rate contractsLocationJune 30, 2020June 30, 2019
Change in fair value on interest rate swaps hedging investmentsInterest income$(1,131) $(1,057) 

The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively:
June 30, 2020December 31, 2019
Notional AmountFair ValueNotional AmountFair Value
Included in other assets:
Interest rate swaps related to investments$  $  $  $  
Total included in other assets$  $  $  $  
Included in other liabilities:
Interest rate swaps related to investments19,605  1,761  19,605  630  
Total included in other liabilities$19,605  $1,761  $19,605  $630  


NOTE 11 – INCOME TAXES

Income tax expense for the three and six months ended June 30, 2020 totaled $1,634 and $724, respectively, compared to $501 and $873, respectively, for the three and six months ended June 30, 2019. The effective tax rate for the three and six months ended June 30, 2020 was 17.9% and 10.3%, respectively, compared to 15.7% and 15.0%, respectively, for the three and six months ended June 30, 2019. During the three and six months ended June 30, 2020, merger expenses and the provision expense had the impact of reducing taxable income and increasing the proportion of tax-exempt income to total income.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




NOTE 12 - BUSINESS COMBINATIONS

Tennessee Community Bank Holdings, Inc.

Effective January 1, 2020, Reliant Bancorp completed the acquisition of TCB Holdings pursuant to the Agreement and Plan of Merger, dated September 16, 2019 (the “TCB Holdings Agreement”), by and among Reliant Bancorp, TCB Holdings, and Community Bank & Trust, a Tennessee-chartered commercial bank and wholly owned subsidiary of TCB Holdings (“CBT”). On the terms and subject to the conditions set forth in the TCB Holdings Agreement, TCB Holdings merged with and into the Reliant Bancorp (the “TCB Holdings Transaction”), with Reliant Bancorp as the surviving corporation. Immediately following the TCB Holdings Transaction, CBT merged with and into the Bank, with the Bank continuing as the surviving banking corporation. Pursuant to the TCB Holdings Agreement, at the effective time of the TCB Holdings Transaction, each outstanding share of TCB Holdings common stock, par value $1.00 per share (other than certain excluded shares), was converted into and canceled in exchange for the right to receive (i) $17.13 in cash, without interest, and (ii) 0.769 shares of the Reliant Bancorp’s common stock, par value $1.00 per share (“Reliant Bancorp Common Stock”). The aggregate consideration payable by Reliant Bancorp in respect of shares of TCB Holdings common stock as consideration for the TCB Holdings Transaction was 811,210 shares of Reliant Bancorp Common Stock and approximately $18,073 in cash. Reliant Bancorp did not issue fractional shares of Reliant Bancorp Common Stock in connection with the TCB Holdings Transaction, but paid cash in lieu of fractional shares based on the volume weighted average closing price per share of the Reliant Bancorp Common Stock on The Nasdaq Capital Market for the 10 consecutive trading days ending on and including December 30, 2019 (calculated as $22.36). At the effective time of the TCB Holdings Transaction, each outstanding option to purchase TCB Holdings common stock was canceled in exchange for a cash payment in an amount equal to the product of (i) $34.25 minus the per share exercise price of the option multiplied by (ii) the number of shares of TCB Holdings common stock subject to the option (to the extent not previously exercised). Reliant Bancorp paid aggregate consideration to holders of unexercised options of approximately $430. All shares of Reliant Bancorp’s common stock outstanding immediately prior to the TCB Holdings Transaction were unaffected by the TCB Holdings Transaction.

The following table details the financial impact of the TCB Holdings Transaction, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:
Calculation of Purchase Price
Shares of Tennessee Community Bank Holdings, Inc. common stock outstanding as of January 1, 20201,055,041  
Exchange ratio for Reliant Bancorp, Inc. common stock0.769  
Reliant Bancorp, Inc. common stock shares issued811,210  
Reliant Bancorp, Inc. share price at January 1, 2020$22.24  
Estimated value of Reliant Bancorp, Inc. shares issued18,041
Cash settlement for Tennessee Community Bank Holdings, Inc. common stock ($17.13 per share)
18,073  
Cash settlement for Tennessee Community Bank Holdings, Inc.'s 26,450 outstanding stock options ($34.25 settlement price less weighted average exercise price of $18.00)
430  
Cash settlement for Reliant Bancorp, Inc. fractional shares ($22.36 per pro rata fractional share)
3  
Estimated fair value of Tennessee Community Bank Holdings, Inc.$36,547  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




Tennessee Community Bank Holdings, Inc., continued
Allocation of Purchase Price
Total consideration above$36,547  
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents11,026  
Investment securities available for sale56,336  
Loans, net of unearned income171,445  
Accrued interest receivable948  
Premises and equipment6,427  
Cash surrender value of life insurance contracts5,629  
Restricted equity securities909  
Core deposit intangible3,617  
Other assets833  
Deposits(210,538) 
Deferred tax liability(337) 
Borrowings(58) 
FHLB advances(13,102) 
Other liabilities(3,682) 
Total fair value of net assets acquired29,453  
Goodwill$7,094  

CBT was a Tennessee-based full-service community bank with operations in Ashland City, Kingston Springs, Pegram, Pleasant View, and Springfield, Tennessee. These communities lie on the northwest perimeter of Nashville, Tennessee.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




First Advantage Bancorp

Effective April 1, 2020, Reliant Bancorp completed the acquisition of FABK pursuant to the Agreement and Plan of Merger, dated October 22, 2019 (the “FABK Agreement”), by and among Reliant Bancorp, FABK, and First Advantage Bank, a Tennessee-chartered commercial bank and wholly owned subsidiary of FABK (“FAB”). On the terms and subject to the conditions set forth in the FABK Agreement, FABK merged with and into Reliant Bancorp (the “FABK Transaction”), with Reliant Bancorp as the surviving corporation. Immediately following the FABK Transaction, FAB merged with and into the Bank, with the Bank continuing as the surviving banking corporation. Pursuant to the FABK Agreement, at the effective time of the FABK Transaction, each outstanding share of FABK common stock, par value $0.01 per share (the “FABK Common Stock”), other than certain excluded shares, was converted into the right to receive (i) 1.17 shares of Reliant Bancorp Common Stock and (ii) $3.00 in cash, without interest. In lieu of the issuance of fractional shares of Reliant Bancorp Common Stock, Reliant Bancorp agreed to pay cash in lieu of fractional shares based on the volume-weighted average closing price per share of Reliant Bancorp Common Stock on The Nasdaq Capital Market for the 10 consecutive trading days ending on and including March 30, 2020 (calculated as $11.74). Based on the April 1, 2020 opening price for Reliant Bancorp Common Stock of $11.27 per share and 3,935,165 shares of FABK Common Stock outstanding on April 1, 2020, the consideration for the FABK Transaction was approximately $64,094, in the aggregate, or $16.28 per share of FABK Common Stock.

The following table details the financial impact of the FABK Transaction, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:

Calculation of Purchase Price
Shares of First Advantage Bancorp common stock outstanding as of April 1, 20203,935,165  
Conversion of restricted stock units to shares of common stock of First Advantage Bancorp as of April 1, 20202,000  
Total First Advantage Bancorp common stock outstanding as of April 1, 20203,937,165  
Exchange ratio for Reliant Bancorp, Inc. common stock1.17
Reliant Bancorp, Inc. common stock shares issued4,606,483  
Remove fractional shares(64) 
Reliant Bancorp, Inc. common stock shares issued4,606,419
Reliant Bancorp, Inc. share price at April 1, 2020$11.27  
Estimated value of Reliant Bancorp, Inc. shares issued51,914  
Cash settlement for Reliant Bancorp, Inc. fractional shares ($11.74 per pro rata fractional share)
1
Cash settlement for First Advantage Bancorp common stock ($3.00 per share)
11,805
Cash settlement for First Advantage Bancorp restricted stock units ($3.00 per share)
6
Cash settlement for First Advantage Bancorp's 34,800 outstanding stock options ($30.00 settlement price less weighted average exercise price of $19.44)
368
Estimated fair value of First Advantage Bancorp$64,094  


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




First Advantage Bancorp, continued

Allocation of Purchase Price
Total consideration above$64,094  
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents11,159  
Investment securities available for sale35,970  
Loans, net of unearned income622,423  
Mortgage loans held for sale, net5,878  
Premises and equipment7,965  
Deferred tax asset6,791  
Cash surrender value of life insurance contracts14,776  
Other real estate and repossessed assets1,259  
Core deposit intangible2,280  
Operating lease right-of-use assets6,536  
Other assets10,529  
Deposits(608,690) 
Borrowings(35,962) 
Operating lease liabilities(6,536) 
Other liabilities(10,606) 
Total fair value of net assets acquired63,772  
Goodwill$322  

FAB was a Tennessee-based full-service community bank headquartered in Clarksville, Tennessee. FAB operated branch offices in Montgomery, Davidson and Williamson counties, Tennessee and operated a loan production office in Knoxville, Tennessee primarily originating manufactured housing loans.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




Supplemental Pro Forma Combined Condensed Statements of Income

Pro forma data for the three and six months ended June 30, 2020 and 2019 in the table below presents information as if the TCB Holdings Transaction and FABK Transaction occurred on January 1, 2019. These results combine the historical results of TCB Holdings and FABK into the Company's consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair value adjustments, they are not indicative of what would have occurred had the acquisitions taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of TCB Holdings' or FABK's provision for credit losses for the first three and six months of 2019 that may not have been necessary had the acquired loans been recorded at fair value as of the beginning of 2019. Additionally, these financials were not adjusted for non-recurring expenses, such as merger-related charges incurred by either the Company, TCB Holdings or FABK. The Company expects to achieve operating cost savings and other business synergies as a result of the acquisitions which are also not reflected in the pro forma amounts.


Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Revenue(1)
$33,340  $28,791  $63,564  $56,739  
Net interest income$28,918  $24,648  $54,629  $49,603  
Net income attributable to common shareholders$7,073  $8,014  $5,176  $15,585  
(1) Net interest income plus noninterest income



NOTE 13 - LEASES

On January 1, 2020, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. The Company elected the prospective application approach provided by ASU 2018-11 and did not adjust prior periods for ASC 842. Leases with initial terms of less than one year are not recorded on the balance sheet.

The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The implementation of the new standard resulted in recognition of a right-of-use asset of $12.0 million and a lease liability of $11.9 million at the date of adoption, which is related to the Company’s lease of premises used in operations. The Company used a discount rate of 4.5% in determining the right-of-use asset and lease liability as of January 1, 2020.

Information related to the Company's operating leases is presented below:
June 30, 2020
Operating leases right of use assets$15,452  
Operating lease liabilities$16,591  
Weighted average remaining lease term (in years)6.62
Weighted average discount rate4.33 %



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020 AND 2019 (UNAUDITED) AND DECEMBER 31, 2019
(Dollar amounts in thousands except per share amounts)




The components of lease expense included in occupancy expenses for the three and six months ended June 30, 2020, were as follows:

Three months ended June 30, 2020Six months ended June 30, 2020
Operating lease cost $854  $1,482  
Short-term lease cost    
Variable lease cost98178  
Total lease cost$952  $1,660  

The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

Lease expense for the three and six months ended June 30, 2019, prior to the adoption of ASU 2016-02, was $678 and $1,371, respectively.

A maturity analysis of operating lease liabilities and a reconciliation of undiscounted cash flows to the total operating lease liability is as follows:

Lease payments due on or beforeJune 30, 2020
June 30, 2021$3,923  
June 30, 20222,903  
June 30, 20232,681  
June 30, 20242,648  
June 30, 20252,504  
Thereafter5,101  
Total undiscounted cash flows19,760  
Discount on cash flows(3,169) 
Total lease liability$16,591  


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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Executive Summary
The following is a summary of the Company’s financial highlights and significant events for the six months ended June 30, 2020:

Net income attributable to common shareholders totaled $7.7 million, or $0.54 per diluted common share, for the six months ended June 30, 2020 compared to $8.1 million, or $0.71 per diluted common share, during the same period in 2019.
Merger expenses for the six months ended June 30, 2020 totaled $6.8 million.
Loans increased $912.5 million for the six months ended June 30, 2020.
Deposits increased $946.3 million for the six months ended June 30, 2020.
Asset quality remained strong with nonperforming assets to total assets of 0.50 percent.
Successfully closed the TCB Holdings and FABK transactions as well as conversions with Community Bank & Trust and First Advantage Bank.
The following discussion and analysis is intended to assist in the understanding and assessment of significant changes and trends related to our financial position and operating results. This discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes included elsewhere herein along with Reliant Bancorp's Annual Report on Form 10-K for the year ended December 31, 2019. Amounts in the narrative are shown in thousands, except for economic and demographic information, numbers of shares, per share amounts and as otherwise noted.
Acquisition of parent company of CBT
Effective January 1, 2020, Reliant Bancorp completed the acquisition of TCB Holdings. On the terms and subject to the conditions set forth in the TCB Holdings Agreement, TCB Holdings merged with and into Reliant Bancorp, with Reliant Bancorp as the surviving corporation. Immediately following the TCB Holdings Transaction, CBT merged with and into Reliant Bank, with Reliant Bank continuing as the surviving banking corporation. Pursuant to the TCB Holdings Agreement, at the effective time of the TCB Holdings Transaction, each outstanding share of TCB Holdings common stock, par value $1.00 per share (other than certain excluded shares), was converted into and canceled in exchange for the right to receive (i) $17.13 in cash, without interest, and (ii) 0.769 shares of Reliant Bancorp's common stock. The aggregate consideration payable by Reliant Bancorp in respect of shares of TCB Holdings common stock as consideration for the TCB Holdings Transaction was 811,210 shares of Reliant Bancorp Common Stock and approximately $18,073 in cash. Reliant Bancorp did not issue fractional shares of Reliant Bancorp Common Stock in connection with the TCB Holdings Transaction, but instead paid cash in lieu of fractional shares based on the volume weighted average closing price per share of the Reliant Bancorp Common Stock on The Nasdaq Capital Market for the 10 consecutive trading days ending on and including December 30, 2019 (calculated as $22.36). At the effective time of the TCB Holdings Transaction, each outstanding option to purchase TCB Holdings common stock was canceled in exchange for a cash payment in an amount equal to the product of (i) $34.25 minus the per share exercise price of the option multiplied by (ii) the number of shares of TCB Holdings common stock subject to the option (to the extent not previously exercised). Reliant Bancorp paid aggregate consideration to holders of unexercised options of approximately $430.
Acquisition of parent company of FAB
On October 22, 2019, Reliant Bancorp, PG Merger Sub, Inc. ("Merger Sub"), a wholly owned subsidiary of Reliant Bancorp, and FABK entered into a definitive agreement providing for Reliant Bancorp to acquire FABK and FAB. Reliant Bancorp completed its acquisition of FABK and FAB effective April 1, 2020.

In accordance with the terms of the FABK Agreement, on April 1, 2020, (i) Merger Sub merged with and into FABK, with FABK being the surviving corporation and becoming a wholly-owned subsidiary of Reliant Bancorp, and (ii) immediately following the merger of FABK and Merger Sub, FABK merged with and into Reliant Bancorp, with Reliant Bancorp being the surviving corporation. Additionally, immediately following the merger of Reliant Bancorp and FABK, FAB merged with and into Reliant Bank, with Reliant Bank being the surviving bank.





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As consideration for the FABK Transaction, each outstanding share of FABK Common Stock, other than certain excluded shares, at the effective time of the FABK Transaction converted into the right to receive (i) 1.17 shares of Reliant Bancorp Common Stock and (ii) $3.00 in cash, without interest. In lieu of the issuance of fractional shares of Reliant Bancorp Common Stock, Reliant Bancorp agreed to pay cash in lieu of fractional shares based on the volume-weighted average closing price per share of Reliant Bancorp Common Stock on The Nasdaq Capital Market for the 10 consecutive trading days ending on and including March 30, 2020 (calculated as $11.74). Based on the March 31, 2020 closing price for Reliant Bancorp Common Stock of $11.27 per share and 3,937,165 shares of FABK Common Stock outstanding on March 31, 2020, the consideration for the FABK Transaction was approximately $64,094, in the aggregate, or $16.28 per share of FABK Common Stock.

Formation of Reliant Risk Management, Inc.

Reliant Risk Management, Inc. a newly-formed, wholly-owned insurance captive subsidiary of Reliant Bancorp, Inc. that began operations on June 1, 2020, is a Tennessee-based captive insurance company which insures Reliant Bancorp and the Bank against certain risks unique to their operations and for which insurance may not be currently available or economically feasible in today's insurance marketplace. It pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. Reliant Risk Management, Inc. is subject to regulations of the State of Tennessee and undergoes periodic examinations by the Tennessee Department of Commerce and Insurance.

Critical Accounting Policies

The accounting principles we follow and our methods of applying these principles conform to U.S. GAAP and with general practices within the banking industry. There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2019. The following is a brief summary of the more significant policies.

Principles of Consolidation

The Company's consolidated financial statements as of and for the periods presented include the accounts of Reliant Bancorp, the Bank, TRUPS, Holdings, Risk, and RMV. All significant intercompany balances and transactions have been eliminated in consolidation. As described in Note 12 to our consolidated financial statements, effective January 1, 2020, Reliant Bancorp and TCB Holdings merged and effective April 1, 2020, Reliant Bancorp and First Advantage Bancorp merged.

During 2011, the Bank and another entity organized RMV. Under the RMV operating agreement, the non-controlling member receives 70% of the cash flow distributions of RMV, and the Bank receives 30% of the cash flow distributions, once the non-controlling member recovers its capital contributions to RMV. The non-controlling member is required to fund RMV’s losses in arrears via additional capital contributions to RMV. As of June 30, 2020, RMV's cumulative losses to date totaled $15,803. RMV will have to generate net income of at least this amount before the Bank will participate in future cash flow distributions.

Purchased Loans

The Company maintains an allowance for loan losses on purchased loans based on credit deterioration subsequent to the acquisition date. In accordance with the accounting guidance for business combinations, because we recorded all loans acquired from TCB Holdings and FABK at fair value as of the dates of the TCB Holdings Transaction and the FABK Transaction, respectively, we did not establish an allowance for loan losses on any of the loans we purchased as of the acquisition date as any credit deterioration evident in the loans was included in the determination of the acquisition date fair values. For purchased credit-impaired loans accounted for under ASC 310-30, management is required to establish an allowance for loan losses subsequent to the dates of acquisition by re-estimating expected cash flows on these loans on a quarterly basis, with any decline in expected cash flows due to a credit triggering impairment recorded as provision for loan losses. The allowance for loan losses established is the excess of the loan’s carrying value over the present value of projected future cash flows, discounted at the current accounting yield of the loan or the fair value of collateral (less estimated costs to sell) for collateral dependent loans. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change. While the determination of specific cash flows involves estimates, each estimate is unique to the individual loan, and none is individually significant. For non-purchased credit-impaired loans acquired in the TCB Holdings Transaction and the FABK Transaction that are accounted for under ASC 310-20, the historical loss estimates are based on the historical losses experienced by the Bank for loans with similar characteristics as those acquired other than purchased credit-impaired loans. The Bank records an allowance for loan losses only when the calculated amount exceeds the remaining credit mark established at acquisition.


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Allowance for Loan Losses

The allowance for loan losses ("allowance") is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using historical loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, current economic conditions (national and local), and other factors such as changes in interest rates, portfolio concentrations, changes in the experience, ability, and depth of the lending function, levels of and trends in charged-off loans, recoveries, past-due loans and volume and severity of classified loans. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The entire allowance is available for any loan that, in management’s judgment, should be charged off as uncollectible.

A loan is impaired when full payment under the loan terms is not expected. All classified loans and loans on nonaccrual status are individually evaluated for impairment. Factors considered in determining if a loan is impaired include the borrower’s ability to repay amounts owed, collateral deficiencies, the risk rating of the loan and economic conditions affecting the borrower’s industry, among other things. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value (less estimated costs to sell) of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless the principal amount is deemed fully collectible, in which case interest is recognized on a cash basis. When recognition of interest income on a cash basis is appropriate, the amount of income recognized is limited to what would have been accrued on the remaining principal balance at the contractual rate. Cash payments received over this limit, and not applied to reduce the loan's remaining principal balance, are recorded as recoveries of prior charge-offs until these charge-offs have been fully recovered.

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note to our consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Coronavirus (COVID-19) Impact

The following is a description of the impact the novel coronavirus (COVID-19) pandemic is having on our financial condition and results of operations and certain risks to our business that the pandemic creates or exacerbates.

Operational Impact

As part of our pandemic response, we have encouraged a significant portion of our employees to work from home. We have also extended virtual medical coverage to all employees as well as provided pay to employees who may have been exposed as they quarantine at home. We are encouraging virtual meetings and conference calls in place of in-person meetings, including our earnings call and investor meetings which were held virtually this quarter. We are promoting social distancing, frequent hand washing, thorough disinfection of all surfaces, and the use of masks or nose and mouth coverings have been mandated in all of our locations. We have selected branches in each market open for limited hours, with the other branches closed except for advance appointments for essential services. Banking center drive-ups, ATMs and online/mobile banking services continue to operate. It remains undetermined how long our banking centers will operate at these service levels. Infection rates in the communities we serve vary by region and we will make prudent decisions for the safety of our colleagues and our clients.

Loan Modifications

Section 4013 of the CARES Act, which was signed into law on March 27, 2020, provides that financial institutions may elect to account for loan modifications occurring between March 1, 2020, and the earlier of December 31, 2020 and the 60th day after the end of the COVID-19 national emergency declared by President Trump, which are due to COVID-19 and where the borrower was current on contractual payments as of December 31, 2019, as not TDRs. Additionally, on April 7, 2020, federal banking regulators issued an Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus (Revised), which replaced a prior interagency statement predating the CARES Act. The revised interagency statement encourages financial institutions to work prudently with borrowers that may be unable to meet their contractual payment obligations because of the effects of COVID-19. It also addresses loan modifications not meeting the
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criteria set forth in Section 4013 of the CARES Act or for which financial institutions elect not to apply Section 4013. With respect to these loan modifications, the revised interagency statement provides that short-term (e.g. six month) modifications made on a good faith basis in response to COVID-19 to borrowers who were current on their contractual payments at the time of implementation of a modification program are not TDRs.

Through July 29, 2020, the Company had applied this guidance to approve initial modifications In April and May for loans with principal balances of $530.7 million. The majority of these modifications involved extensions of up to three months of either interest-only periods or full payment deferrals. Through August 5, 2020, further modifications were approved for $39.0 million of the loans previously modified. Additional modifications are likely to be executed in the third quarter of 2020.

Initial Modification Requests through May 31, 2020Subsequent Modification Requests through July 29, 2020
Commercial RE$291,232  $1,485  
Hospitality96,047  30,012  
Restaurant54,067  —  
C&I34,851  6,095  
Multifamily14,757  1,422  
Manufactured Housing14,887  —  
Church/Consumer/Medical24,809  34  
Total Modification Requests$530,650  $39,048

Paycheck Protection Program (PPP) and Liquidity

The CARES Act provided for over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the SBA to administer new loan programs, including, but not limited to, the guarantee of loans under a new 7(a) loan program called the "Paycheck Protection Program".

An eligible business can apply for a PPP loan in an amount up to the lesser of: (1) 2.5 times its average monthly “payroll costs” or (2) $10.0 million. PPP loans have: (a) an interest rate of 1.0%; (b) a two-year loan term to maturity for loans made prior to June 5, 2020, or a five-year loan term to maturity for loans made on or after June 5, 2020; and (c) principal and interest payments deferred for six months from the date of disbursement. The SBA will guarantee 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and 60% of the loan proceeds are used for payroll expenses, with the remaining 40% of the loan proceeds used for other qualifying expenses.

Through June 30, 2020, we had received SBA authorizations for PPP loans totaling $83,291 and related fees of $3,301. Participation in the PPP will likely have an impact on the Company's asset mix and net interest margin for the remainder of 2020. At June 30, 2020, we had $98,000 in federal funds lines available and $293,800 of available borrowing capacity from correspondent banks. In addition, the Federal Reserve has implemented a liquidity facility available to financial institutions participating in the PPP. As such, the Company believes it has sufficient liquidity sources to continue to provide this important service to local businesses if and as additional funds are appropriated for the PPP.

As of June 30, 2020, the Bank's capital ratios were in excess of all regulatory requirements. While we believe that we have sufficient capital to withstand an extended economic recession brought about by the COVID-19 pandemic, our reported and regulatory capital ratios could be adversely impacted by future credit losses.

Asset Impairment

At June 30, 2020, our level of non-performing assets was not materially impacted by the economic pressures of COVID-19. We are closely monitoring credit risk and our exposure to increased loan losses resulting from the impact of COVID-19 on our commercial and other clients.

At this time, we do not believe there exists any impairment to our intangible assets, long-lived assets, right of use assets, or available-for-sale investment securities due to the COVID-19 pandemic. It is uncertain whether prolonged effects of the COVID-19 pandemic will result in future impairment charges related to any of the aforementioned assets.


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Risks

See Part II , Item 1A. "Risk Factors" for more information.

Allowance for Loan Loss

We are in regular communication with our customers to gain a better understanding of our highest risk exposures and probable defaults. In the second quarter of 2020 we recorded a provision expense of $3.0 million, all of which can be attributed to increased risk factors related to the COVID-19 pandemic. Our losses year-to-date remain low but we continue to build reserves as we anticipate future downgrades and defaults may eventually result in losses.

See Note 3 to the Company's financial statements included in Part I, Item 1. "Consolidated Financial Statements (Unaudited)" and Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations -Comparison of Balance Sheets at June 30, 2020 and December 31, 2019 - Allowance for Loan Losses” for more information.


COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

Effect of Mergers
Effective January 1, 2020, Reliant Bancorp completed the acquisition of TCB Holdings.
As a result of the TCB Holdings Transaction, on January 1, 2020, the Company:

increased consolidated total assets from $1,898.5 million to $2,157.1 million;
increased total loans from $1,410.0 million to $1,581.5 million;
increased total deposits from $1,583.8 million to $1,794.3 million; and
expanded its employee base from 300 to 321 full time equivalent employees.

Effective April 1, 2020, Reliant Bancorp completed the acquisition of FABK.

As a result of the FABK Transaction, on April 1, 2020, the Company:

increased consolidated total assets from $2,177.8 million to $2,883.6 million;
increased total loans from $1,619.7 million to $2,242.1 million;
increased total deposits from $1,722.4 million to $2,331.1 million; and
expanded its employee base from 323 to 442 full time equivalent employees.

Earnings

Net income attributable to common shareholders amounted to $7,868, or $0.48 per basic share, and $7,653, or $0.54 per basic share, for the three and six months ended June 30, 2020, respectively, compared to $4,239, or $0.38 per basic share, and $8,063, or $0.71 per basic share, for the same periods in 2019, respectively. Diluted net income attributable to common shareholders was $0.48 and $0.54 per share for the three and six months ended June 30, 2020, respectively, compared to $0.38 and $0.71 per share for the three and six months ended June 30, 2019, respectively. The major components contributing to the change when compared to the prior year periods are an increase of 116.9% and 72.6% in net interest income for the three and six months ended June 30, 2020, respectively, and an increase of 63.9% and 66.2% in noninterest income for the three and six months ended June 30, 2020, respectively, and partially offset by an increase of 69.6% and 61.8% in noninterest expense (mainly driven by merger expenses) for the three and six months ended June 30, 2020, and an increase of $2,800 and $5,700 in provision for loan losses for the three and six months ended June 30, 2020, compared to the same periods in 2019. These and other components of earnings are discussed further below.







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Non-GAAP Financial Measures

This Form 10-Q contains certain financial measures that are considered "non-GAAP financial measures" and should be read along with the accompanying tables. Generally, a non-GAAP financial measure is a numerical measure of a company's financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presente din accordance with U.S. GAAP. Management believes that non-GAAP financial measures provide a greater understanding of ongoing performance and operations and enhance comparability accross periods. Non-GAAP financial measures should not, however, be considered as an alternative to any measure of performance or financial condition as determined in accordance with U.S. GAAP, and readers should consider the Company’s performance and financial condition as reported under U.S. GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and readers should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under U.S. GAAP. Non-GAAP financial measures presented by the Company may not be comparable to non-GAAP financial measures (even those with the same or similar names) presented by other companies.

Company management uses, and believes that investors benefit from referring to, the following non-GAAP financial measures, among others, to assess the Company's operating results and trends: (i) tax-equivalent net interest income; (ii) adjusted net interest income; (iii) adjusted net interest margin; (iv) adjusted net income attributable to common shareholders; (v) adjusted net income attributable to common shareholders, per diluted share; (vi) adjusted return on average assets; (vii) adjusted return on average stockholders' equity; (viii) average tangible common equity; and, (ix) return on average tangible common equity (ROATCE); and (x) adjusted return on average tangible common equity. In the following table, the Company has provided a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures.

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Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
NON-GAAP FINANCIAL MEASURES
Adjusted net interest margin (1)
Net interest income$29,956  $13,813  $47,071  $27,274  
Fully tax-equivalent adjustments:
Loans$790  $303  $1,106  $606  
Tax-exempt investment securities$371  $441  $748  $896  
Tax-equivalent net interest income (1)(2)
$31,117  $14,555  $48,925  $28,776  
Purchase accounting adjustments(5,232) (448) (1,267) (780) 
Tax credits(779) (300) 1,083  600  
Adjusted net interest income (1)
$25,106  $13,807  $48,747  $28,596  
Net interest margin4.58 %3.57 %4.16 %3.60 %
Adjusted net interest margin3.70 %3.39 %4.15 %3.59 %
Adjusted net income attributable to common shareholders and related impact (1)(3)
Net income attributable to common shareholders$7,868  $4,239  $7,653  $8,063  
Merger expenses2,632   6,818   
Pre-tax adjustments to net income2,632   6,818   
Tax effect of adjustments to net income565  —  682  567  
After tax adjustments to net income2,067   6,136  (564) 
Adjusted net income attributable to common shareholders9,935  4,240  13,789  7,499  
Net income attributable to common shareholders, per diluted share$0.48  $0.38  $0.54  $0.71  
Adjusted net income attributable to common shareholders, per diluted share$0.60  $0.38  $0.97  $0.65  
Return on average:
Return on average assets(4)
1.07 %0.96 %0.60 %0.92 %
Adjusted return on average assets (1)(4)
1.35 %0.96 %1.08 %0.86 %
Return on average stockholders' equity(4)
10.89 %7.97 %2.88 %3.82 %
Adjusted return on average stockholders' equity (1)(4)
13.75 %7.98 %10.39 %7.11 %
Average tangible stockholders' equity: (1)
Average stockholders' equity288,961  212,648  265,427  211,064  
Less: average goodwill51,058  43,642  52,814  43,642  
Less: average core deposit intangibles12,529  7,834  11,648  7,952  
Average tangible common equity225,374  161,172  213,833  159,470  
Return on average tangible common equity (ROATCE) (1)(4)
13.96 %10.52 %7.16 %10.11 %
Adjusted ROATCE (1) (4)
17.63 %10.52 %12.90 %9.40 %
(1) Not a recognized measure under U.S. GAAP.
(2) Amount includes tax equivalent adjustment to quantify the tax equivalent net interest income.
(3) Beginning the quarter ended September 30, 2019, purchase accounting adjustments will no longer be included in the adjusted net income calculation as these have been determined to be ordinary course of business. All historical periods have been adjusted to reflect this change.
(4) Data has been annualized.







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Net Interest Income

Net interest income represents the amount by which interest earned on various earning assets exceeds interest accrued on deposits and other interest-bearing liabilities and is the most significant component of our revenues. 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 rate spread and net interest margin for the three and six months ended June 30, 2020, and 2019 (dollars in thousands):

Three Months Ended
June 30, 2020
Three Months Ended
June 30, 2019
Change
Average BalancesRates / Yields (%)Interest Income / ExpenseAverage BalancesRates / Yields (%)Interest Income / ExpenseDue to VolumeDue to RateTotal
Interest earning assets
Loans$2,302,154  5.68  $32,498  $1,276,197  5.18  $16,481  $14,300  $1,717  $16,017  
Loan fees—  0.30  1,739  —  0.25  782  957  —  957  
Loans with fees2,302,154  5.98  34,237  1,276,197  5.43  17,263  15,257  1,717  16,974  
Mortgage loans held for sale85,313  3.84  815  14,502  5.48  198  1,030  (413) 617  
Deposits with banks66,031  0.30  50  30,342  1.53  116  404  (470) (66) 
Investment securities - taxable66,234  0.78  128  77,405  3.04  587  (75) (384) (459) 
Investment securities - tax-exempt193,216  3.51  1,688  222,149  3.77  2,090  (263) (139) (402) 
Federal funds sold and other21,950  2.90  158  13,308  5.46  181  382  (405) (23) 
Total earning assets2,734,898  5.45  37,076  1,633,903  5.02  20,435  16,735  (95) 16,641  
Nonearning assets213,468  139,123  
Total assets$2,948,366  $1,773,026  
Interest bearing liabilities
Interest bearing demand279,171  0.31  218  141,997  0.24  86  101  31  132  
Savings and money market731,278  0.84  1,531  374,406  1.13  1,051  2,089  (1,609) 480  
Time deposits - retail749,566  1.15  2,152  612,148  2.14  3,263  3,597  (4,708) (1,111) 
Time deposits - wholesale201,307  1.85  928  169,956  2.72  1,151  1,000  (1,223) (223) 
Total interest-bearing deposits1,961,322  0.99  4,829  1,298,507  1.71  5,551  6,788  (7,510) (722) 
Federal Home Loan Bank advances127,399  0.47  148  23,668  2.20  130  710  (692) 18  
Subordinated debt70,397  5.61  982  11,634  6.83  198  1,031  (247) 784  
Total borrowed funds197,796  2.30  1,130  35,302  3.73  328  1,741  (939) 802  
Total interest-bearing liabilities2,159,118  1.11  5,959  1,333,809  1.77  5,879  8,529  (8,449) 80  
Net interest rate spread (%) / Net interest income ($)4.34  $31,117  3.25  $14,556  $8,207  $8,354  $16,561  
Noninterest bearing deposits468,620  (0.20) 218,512  (0.25) 
Other noninterest bearing liabilities31,667  8,057  
Stockholders' equity288,961  212,648  
Total liabilities and stockholders' equity$2,948,366  $1,773,026  
Cost of funds0.91  1.52  
Net interest margin4.58  3.57  


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Six Months Ended June 30, 2020Six Months Ended June 30, 2019Change
Average BalancesRates / Yields (%)Interest Income / ExpenseAverage BalancesRates / Yields (%)Interest Income / ExpenseDue to VolumeDue to RateTotal
Interest earning assets
Loans$1,957,592  5.40  $52,569  $1,257,373  5.17  $32,247  $18,819  $1,503  $20,322  
Loan fees—  0.27  2,629  —  0.24  1,488  1,141  —  1,141  
Loans with fees1,957,592  5.67  55,198  1,257,373  5.41  33,735  19,960  1,503  21,463  
Mortgage loans held for sale66,499  4.16  1,375  12,635  5.60  351  1,309  (285) 1,024  
Deposits with banks54,807  0.64  174  29,000  1.63  234  306  (366) (60) 
Investment securities - taxable70,461  1.65  579  74,948  2.93  1,090  (61) (450) (511) 
Investment securities - tax-exempt195,228  3.54  3,436  225,305  3.82  4,264  (535) (294) (829) 
Federal funds sold and other19,136  3.29  313  12,981  5.64  363  298  (348) (50) 
Total earning assets2,363,723  5.20  61,075  1,612,242  5.01  40,037  21,278  (240) 21,038  
Nonearning assets199,657  139,964  
Total assets$2,563,380  $1,752,206  
Interest bearing liabilities
Interest bearing demand232,703  0.27  318  145,304  0.27  197  121  —  121  
Savings and money market595,517  0.85  2,506  387,296  1.14  2,181  1,745  (1,420) 325  
Time deposits - retail645,769  1.46  4,702  594,805  2.10  6,184  1,345  (2,827) (1,482) 
Time deposits - wholesale215,589  2.00  2,140  138,466  2.56  1,756  1,389  (1,005) 384  
Total interest-bearing deposits1,689,578  1.15  9,666  1,265,871  1.64  10,318  4,600  (5,252) (652) 
Federal Home Loan Bank advances and other118,374  0.86  509  40,101  2.78  552  1,106  (1,149) (43) 
Subordinated debt70,502  5.63  1,975  11,634  6.78  391  1,792  (208) 1,584  
Total borrowed funds188,876  2.64  2,484  51,735  3.68  943  02,898  (1,357) 1,541  
Total interest-bearing liabilities1,878,454  1.30  12,150  1,317,606  1.72  11,261  7,498  (6,609) 889  
Net interest rate spread (%) / Net interest income ($)3.90  $48,925  3.29  $28,776  $13,780  $6,369  $20,149  
Noninterest bearing deposits390,394  (0.22) 214,838  (0.24) 
Other noninterest bearing liabilities29,105  8,698  
Stockholders' equity265,427  211,064  
Total liabilities and stockholders' equity$2,563,380  $1,752,206  
Cost of funds1.08  1.48  
Net interest margin4.16  3.60  

Table AssumptionsAverage loan balances are inclusive of nonperforming loans. Interest income and yields computed on tax-exempt instruments are on a tax-equivalent basis including a state tax credit included in loan yields of $779 and $1,083 for the three and six months ended June 30, 2020 and $300 and $600 for the same periods in 2019. 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 have been allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.

AnalysisFor the three and six months ended June 30, 2020, we recorded net interest income on a tax-equivalent basis of approximately $31,117 and $48,925, respectively, which resulted in a net interest margin (net interest income divided by the average balance of interest-earning assets) of 4.58% and 4.16%, respectively. For the three and six months ended June 30, 2019, we recorded net interest income on a tax-equivalent basis of approximately $14,556 and $28,776, respectively, which resulted in a net interest margin of 3.57% and 3.60%, respectively.

Our year-over-year average loan volume increased by approximately 55.7% for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 and was mainly driven by the TCB Holdings Transaction and FABK Transaction. Our combined loan and loan fee yield increased from 5.43% to 5.98% for the three months ended June 30, 2020 compared to the
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same period in 2019 and increased from 5.41% to 5.67% for the six months ended June 30, 2020 compared to the same period in 2019. The increased yield for the three and six months ended June 30, 2020 is primarily attributable to the increased purchase accounting accretion from the two mergers as well as the increased fees from the PPP loans.

Our tax-equivalent yield on tax-exempt investments was 3.51% and 3.54% for the three and six months ended June 30, 2020 compared to 3.77% and 3.82% for the same periods in 2019. Our year-over-year average tax-exempt investment volume decreased by 13.3% for the six months ended June 30, 2020 compared to the same period in 2019 due to investment sales in the fourth quarter of 2019. Our year-over-year average taxable securities volume increased by 6.0% for the six months ended June 30, 2020 compared to the same period in 2019.

Our cost of funds decreased to 0.91% and 1.08% from 1.52% and 1.48%, respectively, for the three and six months ended June 30, 2020 compared to the same periods in 2019. The decrease in our cost of funds was primarily driven by an across the board decrease in the cost of our interest-bearing deposits and other interest-bearing liabilities due to the recent decrease in rates by the Federal Reserve. We experienced an 81.7% increase in our average noninterest-bearing deposits for the six months ended June 30, 2020 when compared to the same period in 2019, which is mainly attributable to the TCB Holdings Transaction and FABK Transaction.

The Bank strives to maintain a strong net interest margin that is insulated from changes in market interest rates. Our net interest margin, while generally considered fairly neutral, is currently subject to slightly expand in a rising rate environment and slightly contract in a falling rate environment. The Company has interest rate floors on certain loans and those floors will mitigate further declines in interest rates.

Provision for Loan Losses

We recorded a provision of $3,000 and $5,900 for loan losses for the three and six months ended June 30, 2020, respectively, compared to $200 for the three and six months ended June 30, 2019. The increase in provision expense for the three and six months ended June 30, 2020 can be primarily attributed to the recent downturn in the economy due to COVID-19 while a portion is due to the growing loan portfolio. See “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Balance Sheets at June 30, 2020 and December 31, 2019 - Allowance for Loan Losses” included herein for further analysis of the provision for loan losses.

Noninterest Income

Our noninterest income is composed of several components, some of which vary significantly between periods. The following is a summary of our noninterest income for the three and six months ended June 30, 2020, and 2019 (dollars in thousands):
Three Months Ended June 30,Percent
Increase
Six Months Ended June 30,Percent
Increase
20202019(Decrease)20202019(Decrease)
Noninterest Income
Service charges and fees on deposits$1,381  $936  47.5 %$2,589  $1,820  42.3 %
Gains on mortgage loans sold, net2,248  1,225  83.5 %3,821  1,785  114.1 %
Securities gains, net327  175  86.9 %327  306  6.9 %
Gain on sale of other real estate11  —  100.0 %25  —  100.0 %
Gain on disposal of premises and equipment—  —  — % —  100.0 %
Other noninterest income:
   Bank-owned life insurance392  277  41.5 %687  555  23.8 %
   Brokerage revenue45   400.0 %77  20  285.0 %
   Miscellaneous noninterest income18  76  (76.3)%169  150  12.7 %
Total other noninterest income455  362  25.7 %933  725  28.7 %
Total noninterest income$4,422  $2,698  63.9 %$7,704  $4,636  66.2 %

The most significant reasons for the changes in total noninterest income during the three and six months ended June 30, 2020 compared to the same periods in 2019 are the fluctuation in gains on mortgage loans sold, net and the increase in service charges mainly attributable to the two mergers. These and other factors impacting noninterest income are discussed further below.

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Service charges and fees on deposit accounts have increased due to the TCB Holdings Transaction, the FABK Transaction, and the concentrated effort in attracting noninterest-bearing deposits, with the majority of the 47.5% and 42.3% increases for the three and six months ended June 30, 2020, respectively, deriving from the increases in our debit card fees.

Securities gains and losses often fluctuate from period to period and can sometimes be attributable to various balance sheet risk strategies. During the six months ended June 30, 2020, the Company sold securities totaling $103,668 with a gain of $327. During the six months ended June 30, 2019, the Company sold securities classified as available for sale totaling $52,434 with a gain of $306.

Generally, mortgage-related revenue increases in lower interest rate environments and more robust housing markets and decreases in rising interest rate environments and more challenging housing markets. Mortgage-related revenue will fluctuate from quarter to quarter as the rate environment changes and as changes occur with our mortgage operations including but not limited to the number of loan originators employed and the channels available for loan sales of RMV’s products in the secondary markets. Gains on mortgage loans sold, net, amounted to $2,248 and $3,821 for the three and six months ended June 30, 2020, respectively, compared to $1,225 and $1,785 for the same periods in the prior year. The increase in gains for the three and six months ended June 30, 2020 when compared to the same periods in 2019 is primarily driven by the increase in volume in the traditional mortgage market. As discussed further in the notes to our consolidated financial statements, gains on mortgage loans sold are generally recognized at the time of a loan sale corresponding to the transfer of risk. The secondary market for the sale of non-qualified mortgage loans experienced a disruption related to the COVID-19 pandemic starting in 2020. As a result, the Company's held-for-sale portfolio increased by $64.1 million from December 31, 2019 to June 30, 2020. Management expects this market to recover but has elected to halt sales until bids have returned to acceptable levels.

During the three and six months ended June 30, 2020, there were gains of $11 and $25, respectively, due to the sale of other real estate compared to no gains in the same periods in 2019.

Noninterest income also includes appreciation in the cash surrender value of bank-owned life insurance, which was $392 and $687 for the three and six months ended June 30, 2020, respectively, compared to $277 and $555 for the same periods in 2019. The increases for both periods are attributable to the recent mergers. The assets that support these policies are administered by the life insurance carriers and the income we receive (i.e., increases or decreases in the cash surrender value of the policies) is dependent upon the returns the insurance carriers are able to earn on the underlying investments that support the policies. Earnings on these policies generally are not expected to be taxable.

Noninterest Expense

The following is a summary of our noninterest expense for the three and six months ended June 30, 2020 and 2019 (dollars in thousands):
Three Months Ended June 30,Percent
Increase
Six Months Ended
June 30,
Percent
Increase
20202019(Decrease)20202019(Decrease)
Noninterest Expense
Salaries and employee benefits$12,464  $7,706  61.7 %$21,701  $14,971  45.0 %
Occupancy2,026  1,358  49.2 %3,512  2,710  29.6 %
Information technology2,027  1,575  28.7 %3,846  2,985  28.8 %
Advertising and public relations228  275  (17.1)%581  529  9.8 %
Audit, legal and consulting680  690  (1.4)%1,158  1,486  (22.1)%
Federal deposit insurance441  249  77.1 %777  444  75.0 %
Merger expenses2,632   263,100.0 %6,818   227,166.7 %
Other operating1,766  1,272  38.8 %3,469  2,744  26.4 %
Total noninterest expense$22,264  $13,126  69.6 %$41,862  $25,872  61.8 %

Noninterest expense increased by $9,138 and $15,990, or 69.6% and 61.8%, for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019 driven by an increase in merger expenses and salaries and employee benefits. The three and six-months period ended June 30, 2020 have been impacted by the TCB Holdings Transaction and the FABK Transaction which have resulted in additions to staff, additional vendor relationships and investments in technology. These and other factors impacting noninterest expense are discussed further below.

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Salaries and employee benefits increased by $4,758 and $6,730 or 61.7% and 45.0% for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019. This increase is primarily attributable to the TCB Holdings Transaction in the first quarter of 2020 and FABK Transaction in the second quarter of 2020 increasing full-time employee equivalents by 21 and 119, respectively, as well as our year over year growth and severance for two executives. We believe the staffing level normalized by the end of the second quarter.

Occupancy costs increased $668 or 49.2% and $802 or 29.6% during the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019 mainly due to the TCB Holdings Transaction and FABK Transaction, as well as the additional leases for mortgage production offices in Memphis and Chattanooga, Tennessee and two offices in Little Rock, Arkansas, and one in Crossett, Arkansas which opened during August 2019.

Information technology costs increased by $452 or 28.7% and $861 or 28.8% when comparing the three and six months ended June 30, 2020, respectively, to the comparable periods in 2019. This increase is mainly attributable to increased costs due to increasing volume of accounts and transactions as well as our continued investment in information security and other technology, and our increase in locations mentioned in the previous paragraph. Both the volume and location increases are primarily due to the TCB Holdings Transaction, FABK Transaction, and the expansion of RMV.

Advertising and public relations costs decreased by $47 or 17.1% for the three-month period ended June 30, 2020 and increased by $52 or 9.8% for the six months ended June 30, 2020 when comparing to the same periods in 2019. These costs fluctuate based on the timing of campaigns and promotions of the Company and the current changes were primarily attributable to the fluctuation of promotional expenses and advertising for RMV.

Audit, legal and consulting costs decreased by $10 or 1.4%, and $328 or 22.1%, respectively, when comparing the three and six months ended June 30, 2020, to the same periods in 2019. This fluctuation is mainly attributable to the decrease of legal and consulting fees incurred by RMV and partially offset by increased fees related to special projects by the Company.

Our FDIC deposit insurance expense is based on our outstanding liabilities for the period multiplied by a factor determined by the FDIC, mainly driven by our most recent regulatory rating and certain financial performance factors. Our FDIC expense increased by $192 and $333 for the three and six months ended June 30, 2020, compared to the same periods in 2019. This increase is primarily the result of our increase in deposits due to the TCB Holdings Transaction and the FABK Transaction.

Merger-related expenses increased by $2,631 and $6,815 for the three and six months ended June 30, 2020 when compared to the same periods in 2019. These costs are considered one-time expenses which for 2020 are associated with the TCB Holdings Transaction and the FABK Transaction. We anticipate no further significant merger expenses to be incurred in relation to these two transactions.

Other operating expenses increased by $494 or 38.8% and $725 or 26.4% for the three and six months ended June 30, 2020 compared to the same period in 2019, mainly due to an increase in amortization of core deposit intangibles and franchise taxes due to the TCB Holdings Transaction and FABK Transaction.

Income Taxes

During the three and six months ended June 30, 2020, we recorded consolidated income tax expense of $1,634 and $724, respectively, compared to $501 and $873, respectively, for the three and six months ended June 30, 2019. The Company files separate federal tax returns for RMV and the bank segment. The taxable income or losses of the mortgage banking operations are included in the respective franchise and excise returns of the Bank and non-controlling member for federal purposes.

Our income tax expense attributable to shareholders for the three and six months ended June 30, 2020, reflects an effective income tax rate of 17.4% and 9.7%, respectively, (exclusive of a tax benefit from our mortgage banking operations of $27 and $96 for the three and six months ended June 30, 2020, respectively, on pre-tax losses of $415 and $1,460 for the three and six months ended June 30, 2020, respectively), compared to 12.5% and 11.9% for the same periods in 2019 (exclusive of a tax benefit of $106 and $214 on pre-tax losses of $1,661 and $3,312, respectively, from our mortgage banking operations for the comparable periods in 2019). Additionally, our effective tax rate for the three months ended June 30, 2020 is higher than the same period in 2019 primarily due to the decrease in our tax-exempt income and the proportion of tax-exempt income to income before taxes. Our effective tax rate for the six months ended June 30, 2020 decreased from the same period in 2019 due to the amount of merger expenses in 2020 and an increase in the proportion of tax-exempt income to taxable income. The Company's tax-exempt income from securities, loans and earnings from bank-owned life insurance contracts as well as state tax credits related to loans to encourage economic development impact the effective tax rate.

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Non-controlling Interest in Net Loss of Subsidiary

Our non-controlling interest in net loss of subsidiary is solely attributable to the RMV minority interest. The Bank has a 51% voting interest in this venture, but under the terms of the related operating agreement, the non-controlling member receives 70% of the cash flow distributions of RMV and the Bank receives 30% of any cash flow distributions, after the non-controlling member recovers its aggregate capital contributions. The non-controlling member is required to fund RMV's losses, in arrears, via additional capital contributions. RMV had a net loss of $388 and $1,364 for the three and six months ended June 30, 2020, respectively, compared to a net loss of $1,555 and $3,098 for the same periods in 2019. The decreased loss for the three and six months ended June 30, 2020 when compared to the same period in 2019 is mainly attributable to the decrease in expense relating to the start-up of the correspondent line of business in 2019. Also, see Note 9 to our consolidated financial statements for segment reporting.

COMPARISON OF BALANCE SHEETS AT JUNE 30, 2020 AND DECEMBER 31, 2019

Overview

The Company’s total assets were $2,991,612 at June 30, 2020 and $1,898,467 at December 31, 2019. Assets increased by 57.6% from December 31, 2019 to June 30, 2020, primarily due to acquisition activity which increased total loans by $793,289 making up 73% of the total increase in assets. Total liabilities were $2,696,069 at June 30, 2020 and $1,674,714 at December 31, 2019, an increase of 61.0%. The increase in liabilities from December 31, 2019 to June 30, 2020, was substantially attributable to the increase in deposits of $946,273, or 59.7%, and an increase in FHLB advances of $38,384 during the period. These changes were materially impacted by the TCB Holdings Transaction as well as the FABK Transaction. These and other components of our consolidated balance sheets are discussed further below.

Loans

Lending-related income is the largest component of our net interest income and is a major contributor to profitability. The loan portfolio is the largest component of earning assets, and it, therefore, generates the largest portion of revenues. The absolute volume of loans and the volume of loans as a percentage of earning assets is an important determinant of net interest margin as loans are expected to produce higher yields than securities and other earning assets. As previously described, the competition for quality loans in our markets has remained strong. Our goal is to steadily grow our loan portfolio, focusing on quality. This is not always possible for various reasons, including but not limited to scheduled maturities or early payoffs exceeding new loan volume, as well as economic conditions. Early payoffs typically increase in falling rate environments as customers identify advantageous opportunities for refinancing. We have been adding experienced lending officers to our staff to help with loan growth. We have expanded our Middle Tennessee footprint into Cheatham County with the TCB Holdings Transaction. The FABK Transaction expanded our footprint into Montgomery County as well as enhanced our presence in Davidson County. Additionally, the FABK Transaction diversified our loan portfolio with the addition of loans related to manufactured housing. Total loans, net, at June 30, 2020, and December 31, 2019, were $2,299,087 and $1,397,374, respectively. This represented an increase of 64.5% from December 31, 2019 to June 30, 2020. As part of the increase in loans, $171,445 were acquired in connection with the first quarter TCB Holdings Transaction and $622,423 were acquired in connection with the second quarter FABK Transaction.

















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The table below provides a summary of the loan portfolio composition for the dates noted (including purchased credit-impaired ("PCI") loans).
June 30, 2020December 31, 2019
AmountPercentAmountPercent
Commercial, Industrial and Agricultural$452,628  19.5 %$245,515  17.5 %
Real estate:
1-4 Family Residential360,908  15.5 %227,529  16.1 %
1-4 Family HELOC85,050  3.7 %96,228  6.8 %
Multifamily and Commercial883,751  38.1 %536,845  38.1 %
Construction, Land Development and Farmland337,459  14.5 %273,872  19.4 %
Consumer195,510  8.4 %16,855  1.2 %
Other7,203  0.3 %13,180  0.9 %
2,322,509  100.0 %1,410,024  100.0 %
Less:
Deferred loan fees5,185  72  
Allowance for loan losses18,237  12,578  
Loans, net$2,299,087  $1,397,374  

The table below provides a summary of PCI loans as of June 30, 2020:
June 30, 2020
Commercial, Industrial and Agricultural$1,192  
Real estate:
1-4 Family Residential1,314  
1-4 Family HELOC18  
Multifamily and Commercial2,372  
Construction, Land Development and Farmland1,012  
Consumer2,416  
Other—  
Total gross PCI loans8,324  
Less:
Remaining purchase discount3,401  
Allowance for loan losses—  
Loans, net$4,923  



Commercial, industrial and agricultural loans above consist solely of loans made to U.S.-domiciled customers. These include loans for use in normal business operations to finance working capital needs, equipment purchases, or other expansionary projects. Commercial, industrial, and agricultural loans of $452,628 at June 30, 2020, increased by 84.4% compared to $245,515 at December 31, 2019 primarily driven by the TCB Holdings Transaction and FABK Transaction.

Real estate loans comprised 71.8% of the loan portfolio at June 30, 2020. Residential loans included in this category consist mainly of closed-end loans secured by first and second liens that are not held for sale and revolving, open-end loans secured by 1-4 family residential properties extended under home equity lines of credit. The Company increased the residential portfolio 37.7% from December 31, 2019 to June 30, 2020 primarily driven by the TCB Holdings Transaction and FABK Transaction. Multi-family and commercial loans included in the real estate category above include (in typical order of prominence) loans secured by non-owner-occupied nonfarm nonresidential properties, and loans secured by multi-family residential properties. Multi-family and commercial real estate loans of $883,751 at June 30, 2020, increased 64.6% compared to the $536,845 held as of December 31, 2019 primarily driven by the TCB Holdings Transaction and FABK Transaction. Real estate construction loans consist of 1-4 family residential construction loans, other construction loans, land loans, and loans secured by farmland. Construction lending has continued to increase based on a strong local market demand.
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Consumer loans mainly consist of loans to individuals for household, family, and other personal expenditures under revolving credit plans, credit cards, and automobile and other consumer loans. Our consumer loans experienced an increase from December 31, 2019, to June 30, 2020, of 1,060.0% primarily due to $177,016 in loans to finance manufactured homes that are not secured by real estate acquired in the FABK Transaction.

Other loans consist mainly of loans to states and political subdivisions and loans to other depository institutions and experienced a decrease of 45.3% from December 31, 2019 to June 30, 2020 due to loan payments.

The repayment of loans is a source of additional liquidity for us. The following table sets forth the loans repricing or maturing within specific intervals at June 30, 2020, excluding unearned net fees and costs.
One Year or
Less
One to Five
Years
Over Five
Years
Total
Gross loans$609,148  $1,087,892  $625,469  $2,322,509  
Fixed interest rate$1,376,801  
Variable interest rate945,708  
Total$2,322,509  

The information presented in the above table is based upon the contractual maturities or next repricing date of the individual loans, including loans which may be subject to renewal at their contractual maturity. Renewal of such loans is subject to review and credit approval, as well as modification of terms upon their maturity. Consequently, we believe this treatment presents fairly the maturity and repricing structure of the loan portfolio.

Allowance for Loan Losses

At June 30, 2020, the allowance for loan losses was $18,237 compared to $12,578 at December 31, 2019. The allowance for loan losses as a percentage of total loans was 0.79% at June 30, 2020 compared to 0.89% at December 31, 2019.






























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The following table sets forth the activity in the allowance for loan losses for the periods presented.

Analysis of Changes in Allowance for Loan Losses
June 30, 2020June 30, 2019
Beginning Balance, January 1, 2020 and 2019, respectively$12,578  $10,892  
Loans charged off:
Commercial, Industrial and Agricultural(539) (168) 
Real estate:
1-4 Family Residential(60) (17) 
1-4 Family HELOC(98) —  
Multifamily and Commercial—  —  
Construction, Land Development and Farmland(114) —  
Consumer(295) (21) 
Other—  (13) 
Total loans charged off(1,106) (219) 
Recoveries on loans previously charged off:
Commercial, Industrial and Agricultural70  294  
Real estate:
1-4 Family Residential747  216  
1-4 Family HELOC 11  
Multifamily and Commercial11  59  
Construction, Land Development and Farmland 201  
Consumer30  12  
Other—  —  
Total loan recoveries865  793  
Net (charge-offs) recoveries (241) 574  
Provision for loan losses5,900  200  
Total allowance for loan losses at end of period$18,237  $11,666  
Gross loans at end of period (1)
$2,322,509  $1,312,590  
Average gross loans (1)
$1,957,592  $1,257,373  
Allowance for loan losses to total loans0.79 %0.89 %
Net (charge-offs) recoveries to average loans (annualized)(0.02)%0.09 %
(1)Loan balances exclude loans held for sale.

While no portion of the allowance for loan losses is in any way restricted to any individual loan or group of loans, and the entire allowance for loan losses is available to absorb losses from any and all loans, the following table summarizes our allocation of allowance for loan losses by loan category and loans in each category as a percentage of total loans, for the periods presented.
June 30, 2020June 30, 2019
Amount% of Allowance to Allowance% of Loan Type to Total LoansAmount% of Allowance to Allowance% of Loan Type to Total Loans
Commercial, Industrial and Agricultural$4,675  25.6 %19.5 %$1,881  16.1 %17.8 %
Real estate:
1-4 Family Residential1,454  8.0 %15.5 %1,455  12.5 %17.8 %
1-4 Family HELOC975  5.3 %3.7 %686  5.9 %7.2 %
Multifamily and Commercial8,407  46.1 %38.1 %4,713  40.4 %36.7 %
Construction, Land Development and Farmland2,126  11.7 %14.5 %2,707  23.2 %18.1 %
Consumer584  3.2 %8.4 %188  1.6 %1.4 %
Other16  0.1 %0.3 %36  0.3 %1.0 %
$18,237  100.0 %100.0 %$11,666  100.0 %100.0 %
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Nonperforming Assets

Nonperforming assets consists of nonperforming loans plus real estate acquired through foreclosure or deed in lieu of foreclosure and other repossessed collateral. Nonperforming loans by definition consists of nonaccrual loans and loans past due 90 days or more and still accruing interest. When we place a loan on nonaccrual status, interest accruals cease and uncollected interest is reversed and charged against current income. The interest on these loans is accounted for on the cash-basis, or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured, which generally includes a minimum performance of six months.

The following table provides information with respect to the Company’s nonperforming assets.
June 30, 2020December 31, 2019
Nonaccrual loans$7,541  $4,071  
Past due loans 90 days or more and still accruing interest 64  
Restructured loans3,475  1,799  
Total nonperforming loans11,024  5,934  
Foreclosed real estate ("OREO")2,514  750  
Repossessed collateral1,508  —  
Total nonperforming assets$15,046  $6,684  
Total nonperforming loans as a percentage of total loans0.47 %0.42 %
Total nonperforming assets as a percentage of total assets0.50 %0.35 %
Allowance for loan losses as a percentage of nonperforming loans165.43 %211.96 %

Investment Securities and Other Earning Assets

The investment securities portfolio is intended to provide the Bank with adequate liquidity, flexible asset/liability management and a source of stable income. The portfolio is structured with investment grade holdings and consists of securities classified as available-for-sale. All available-for-sale securities are carried at fair value and may be used for liquidity purposes should management deem it to be in our best interest. Unrealized gains and losses on this portfolio are excluded from earnings, but are reported as other comprehensive income in a separate component of stockholders’ equity, net of income taxes. Premium amortization and discount accretion are recognized as adjustments to interest income using the interest method. Realized gains or losses on sales are based on the net proceeds and the adjusted carrying value amount of the securities sold using the specific identification method.

Securities totaled $249,014 at June 30, 2020, in comparison to the $260,293 in securities balances at December 31, 2019. This decrease can largely be attributed to the Company's use of these funds to promote loan growth and reduce wholesale funding during the period. Activity during the six months ended June 30, 2020 includes the sale of $103,668 of securities, most of which were acquired as part of the TCB Holdings Transaction and FABK Transaction, as well as $9,635 of principal paydowns, calls, and maturities. In connection with the TCB Holdings Transaction and FABK Transaction, management determined that it would be beneficial to liquidate those portfolios and utilize those funds for loan demand and other uses.

Restricted equity securities totaled $17,509 and $11,279 at June 30, 2020, and December 31, 2019, respectively, and consist of FRB and FHLB stock.











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The following table shows the Company’s investments’ amortized cost and fair value, aggregated by investment category, for the periods presented:
June 30, 2020December 31, 2019
Amortized
Cost
Fair Value% of TotalAmortized
Cost
Fair Value% of Total
U.S. Treasury and other U.S. government agencies$54  55  0.02 %$59  59  0.02 %
State and municipal bonds171,979  185,726  74.60 %186,283  196,660  75.56 %
Corporate bonds11,250  11,266  4.52 %7,880  7,845  3.01 %
Mortgage-backed securities37,624  36,443  14.63 %38,126  37,761  14.51 %
Asset-backed securities15,791  15,524  6.23 %18,374  17,968  6.90 %
Total$236,698  249,014  100.00 %$250,722  260,293  100.00 %

The table below summarizes the contractual maturities of securities at June 30, 2020:
Amortized
Cost
Estimated
Fair Value
Due within one year$500  $498  
Due in one to five years2,179  2,180  
Due in five to ten years14,693  15,379  
Due after ten years165,911  178,990  
Mortgage-backed securities37,624  36,443  
Asset-backed securities15,791  15,524  
Total$236,698  $249,014  

Premises and Equipment

Premises and equipment, net, totaled $34,194 at June 30, 2020 compared to $21,064 at December 31, 2019, a net increase of $13,130, or 62.3%. Premises and equipment purchases amounted to approximately $2,566 during the six months ended June 30, 2020 and were mainly incurred for additional leasehold improvements for our branches and new mortgage locations while depreciation expense amounted to $1,327. As part of the TCB Holdings Transaction, $6,427 of premises and equipment were acquired effective January 1, 2020. Effective April 1, 2020, premises and equipment of $7,965 were acquired in the FABK Transaction. At June 30, 2020, we operated from 27 retail banking locations, one standalone loan production office, as well as five standalone mortgage loan production offices. At June 30, 2020, our branches were located in Cheatham, Davidson, Hamilton, Hickman, Maury, Montgomery, Robertson, Rutherford, Sumner and Williamson counties in Tennessee. As of June 30, 2020, our mortgage loan production offices were located in Brentwood, Chattanooga, Hendersonville, and Memphis, Tennessee as well as two in Little Rock, Arkansas and one in Crosset, Arkansas. Our loan production office acquired through the FABK Transaction is located in Knox County, Tennessee.

Deposits

Deposits represent the Company’s largest source of funds. The Company competes with other bank and non-bank institutions for deposits, as well as with a growing number of non-deposit investment alternatives available to depositors such as money market funds and other brokerage investment products. Challenges to deposit growth include interest rate changes on deposit products given movements in the interest rate environment and other competitive pricing pressures, and customer preferences regarding higher-costing deposit products or non-deposit investment alternatives.

At June 30, 2020, total deposits were $2,530,062, an increase of $946,273, or 59.7%, compared to $1,583,789 at December 31, 2019. During the six months ended June 30, 2020, noninterest bearing demand deposits increased by $259,611, interest-bearing demand deposits increased by $135,992, savings and money market deposits increased by $362,781, and time deposits increased by $187,889. The primary driver of the increase in deposits is attributable to the deposits acquired in the TCB Holdings Transaction which totaled $210,538 coupled with those acquired in the FABK Transaction which totaled $608,690. During the six months ending June 30, 2020, management shifted from using brokered time deposits to transactional deposits and to using FHLB advances.


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The following table shows maturity or repricing of time deposits of $250 or more by category based on time remaining until maturity at June 30, 2020.

June 30, 2020
Twelve months or less$306,236  
Over twelve months through three years27,456  
Over three years4,935  
Total$338,627  

Market and Liquidity Risk Management

Our objective is to manage assets and liabilities to provide a satisfactory, consistent level of profitability within the framework of established liquidity, loan, investment, borrowing, and capital policies. Our Asset Liability Management Committee ("ALCO") is charged with the responsibility of monitoring these policies, which are designed to ensure acceptable composition of asset/liability mix. Two critical areas of focus for ALCO are interest rate sensitivity and liquidity risk management.

Interest Rate Sensitivity—Interest rate sensitivity refers to the responsiveness of interest-earning assets and interest-bearing liabilities to changes in market interest rates. In the normal course of business, we are exposed to market risk arising from fluctuations in interest rates. ALCO measures and evaluates the interest rate risk so that we can meet customer demands for various types of loans and deposits. ALCO determines the most appropriate amounts of off-balance sheet items to maximize long-term earnings and mitigate interest rate risk. Measurements we use to help us manage interest rate sensitivity include a gap analysis, an earnings simulation model and an economic value of equity model. These measurements are used in conjunction with competitive pricing analysis and are further described below.

Interest Rate Sensitivity Gap Analysis—The rate sensitive position, or gap, is the difference in the volume of rate-sensitive assets and liabilities, at a given time interval, including both floating rate instruments and instruments which are approaching maturity. The measurement of our interest rate sensitivity, or gap, is one of the three principal techniques we use in our asset/liability management effort.

Our policy is to have 12 and 24-month cumulative repricing gaps that do not exceed 25% of assets. We slightly exceeded our policy as of June 30, 2020 for the 12-month cumulative repricing gap. Although we do monitor our gap on a periodic basis, we recognize the potential shortcomings of such a model. The static nature of the gap schedule makes it difficult to incorporate changes in behavior that are caused by changes in interest rates. Also, although the periods of estimated and contractual repricing are identified in the analysis, the extent of repricing is not modeled in the gap schedule (i.e. whether repricing is expected to move on a one-to-one or other basis in relationship to the market changes simulated). For these reasons and as a result of other model shortcomings, we rely more heavily on the earnings simulation model and the economic value of equity model discussed further below.

Earnings Simulation Model—We believe interest rate risk is effectively measured by our earnings simulation modeling. Earning assets, interest-bearing liabilities and off-balance sheet financial instruments are combined with simulated forecasts of interest rates for the next 12 months and 24 months. To limit interest rate risk, we have guidelines for our earnings at risk which seek to limit the negative variances of net interest income in instantaneous changes to interest rates. We also periodically monitor simulations based on various rate scenarios such as non-parallel shifts in market interest rates over time. For changes up or down in rates from a flat interest rate forecast over the next 12 and 24 months, our estimated change in net interest income as well as our policy limits are as follows:

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Instantaneous, Parallel Change in Prevailing Interest Rates Equal toEstimated Change in Net Interest Income and Policy of Maximum
Percentage Decline in Net Interest Income
Next 12Next 24
MonthsMonths
EstimatePolicyEstimatePolicy
-200 bp(0.5)%(15)%(1.4)%(15)%
-100 bp(0.3)%(10)%(1.1)%(10)%
+100 bp0.4%(10)%2.6%(10)%
+200 bp1.6%(15)%5.5%(15)%
+300 bp3.5%(20)%8.8%(20)%
+400 bp5.6%(25)%12.3%(25)%

We were in compliance with our earnings simulation model policies as of June 30, 2020, indicating what we believe to be a fairly neutral interest-rate risk profile.

Economic Value of Equity ModelOur economic value of equity model measures the extent that estimated economic values of our assets, liabilities and off-balance sheet items will change as a result of interest rate changes. Economic values are determined by discounting expected cash flows from assets, liabilities and off-balance sheet items, which establishes a base case economic value of equity.

To help monitor our related risk, we have established the following policy limits regarding simulated changes in our economic value of equity:
Instantaneous, Parallel Change in Prevailing
Interest Rates Equal to
Maximum Percentage Decline in Economic Value of
Equity from the Economic Value of Equity at
Currently Prevailing Interest Rates
±100bp15%
±200 bp25%
±300 bp30%
±400 bp35%
Non-parallel shifts35%

At June 30, 2020, our model results indicated that we were within these policy limits.

Each of the above analyses may not, on its own, be an accurate indicator of how our net interest income will be affected by changes in interest rates. Income associated with interest-earning assets and costs associated with interest-bearing liabilities may not be affected uniformly by changes in interest rates. In addition, the magnitude and duration of changes in interest rates may have a significant impact on net interest income. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market rates, while interest rates on other types may lag behind changes in general market rates. In addition, certain assets, such as adjustable rate loans, have features (generally referred to as interest rate caps and floors) which limit changes in interest rates. Prepayment and early withdrawal levels also could deviate significantly from those assumed in calculating the maturity of certain instruments. The ability of many borrowers to service their debts also may decrease during periods of rising interest rates. Our ALCO reviews each of the above interest rate sensitivity analyses along with several different interest rate scenarios as part of its responsibility to provide a satisfactory, consistent level of profitability within the framework of established liquidity, loan, investment, borrowing, and capital policies.

Liquidity Risk Management The purpose of liquidity risk management is to ensure that there are sufficient cash flows to satisfy loan demand, deposit withdrawals, and our other needs. Traditional sources of liquidity for a bank include asset maturities and growth in core deposits. A bank may achieve its desired liquidity objectives from the management of its assets and liabilities and by internally generated funding through its operations. Funds invested in marketable instruments that can be readily sold and the continuous maturing of other earning assets are sources of liquidity from an asset perspective. The liability base provides sources of liquidity through attraction of increased deposits and borrowing funds from various other institutions and sources.

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Changes in interest rates also affect our liquidity position. We currently price deposits in response to market rates and our management intends to continue this policy. If deposits are not priced in response to market rates, a loss of deposits could occur which would negatively affect our liquidity position.

Scheduled loan payments are a relatively stable source of funds, but loan payoffs and deposit flows fluctuate significantly, being influenced by interest rates, general economic conditions, competition, and the actions of our customers. Additionally, debt security investments are subject to prepayment and call provisions that could accelerate their payoff prior to stated maturity. We attempt to price our deposit products to meet our asset/liability objectives consistent with local market conditions. Our ALCO is responsible for monitoring our ongoing liquidity needs. Our regulators also monitor our liquidity and capital resources on a periodic basis.

The Company has established a line of credit with the FHLB, which is secured by a blanket pledge of 1-4 family residential mortgages, multi-family residential, commercial real estate, and home equity loans, and available-for-sale securities. At June 30, 2020, FHLB advances totaled $49,121 compared to $10,737 as of December 31, 2019. This increase in FHLB advances generally correlates with a decrease in more expensive brokered deposits, contributing to an improved net interest margin.


At June 30, 2020, the scheduled maturities of our FHLB advances and interest rates were as follows (scheduled maturities will differ from scheduled repayments):
Scheduled MaturitiesAmountWeighted
Average
Rates
2020$31,100  0.40%
202112,905  2.36%
2022454  1.22%
20234,105  2.37%
2024557  2.51%
$49,121  1.11%

The Company has outstanding $23,000 of subordinated debentures associated with trust preferred securities issued by trusts that are affiliates of Reliant Bancorp, $10,000 of which is owned by a wholly-owned subsidiary of Reliant Bancorp. Reliant Bancorp has timely made its scheduled interest payments on these subordinated debentures since assumed in the first quarter of 2018.  As of June 30, 2020, Reliant Bancorp was current on all interest payments due related to its subordinated debentures. Reliant Bancorp has the right to defer the payment of interest on the subordinated debentures at any time, for a period not to exceed 20 consecutive quarters. During the period in which it is deferring the payment of interest on its subordinated debentures, the indentures governing the subordinated debentures provide that Reliant Bancorp cannot pay any dividends on its common stock or preferred stock. 

On December 13, 2019, Reliant Bancorp issued and sold $60.0 million in aggregate principal amount of its 5.125% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Subordinated Notes”). The Subordinated Notes will bear interest at an initial rate of 5.125%, payable semi-annually until December 15, 2024, at which time the Subordinated Notes will bear interest at a floating rate equal to the three-month Secured Overnight Financing Rate (“SOFR”) (provided, that in the event the three-month SOFR is less than zero, the three-month SOFR will be deemed to be zero), plus a spread of 376.5 basis points. If the three-month SOFR rises during the floating interest period, the cost of the Subordinated Notes will increase, thereby negatively affecting our net income.

Capital

Stockholders’ equity was $295,543 at June 30, 2020, an increase of $71,790, or 32.1%, from $223,753 at December 31, 2019. During the six months ended June 30, 2020, the Company completed the TCB Holdings Transaction which increased stockholders' equity $18,041 and the FABK Transaction which increased stockholders' equity $51,915. Net income also contributed to the increase by $7,653. This increase was primarily offset by dividends declared of $2,874, and other comprehensive loss of $3,945. Contributions from the noncontrolling interest of $1,364 were recognized in the six months ended June 30, 2020. The increase in stockholders' equity mitigated by the growth in the Bank's assets led to a decrease in the Bank’s June 30, 2020 Tier 1 leverage ratio to 10.23% compared with 10.30% at December 31, 2019. See other ratios discussed further below. Additionally, the subordinated debentures qualify as Tier 1 and Total risk-based capital for the Company. Common stock dividends of $2,935 were paid during the six months ended June 30, 2020.
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On July 14, 2017, the Company filed a Registration Statement on Form S-3 to offer, issue and sell from time to time in one or more offerings any combination of (i) common stock, (ii) preferred stock, (iii) debt securities, (iv) depository shares, (v) warrants, and (vi) units, up to a maximum aggregate offering price of $75,000,000. The net proceeds from any offering will be used for general corporate purposes including acquisitions, capital expenditures, investments, and the repayment, redemption, or refinancing of indebtedness or other securities. Until allocated to such purposes it is expected that we will invest any proceeds in short-term, interest-bearing instruments or other investment-grade securities. The Securities and Exchange Commission declared the Registration Statement on Form S-3 effective on August 17, 2017, and the Registration Statement on Form S-3 will expire on August 17, 2020.

Banks as regulated institutions are required to maintain certain levels of capital. The Federal Reserve Board of Governors, the primary federal regulator for the Bank, has adopted minimum capital regulations or guidelines that categorize capital components and the level of risk associated with various types of assets. Financial institutions are expected to maintain a level of capital commensurate with the risk profile assigned to their assets in accordance with applicable regulations and guidelines. We regularly review our capital adequacy to ensure compliance with these regulations and guidelines and to help ensure that sufficient capital is available for current and future needs. It is management’s intent to maintain an optimal capital and leverage mix for growth and for shareholder returns.

Prompt corrective action regulations provide five bank capital classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2020, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since these notifications that management believes have changed the institution’s category. Actual and required capital amounts and ratios are presented below as of June 30, 2020 and December 31, 2019 for Reliant Bancorp and the Bank.

Actual Regulatory CapitalMinimum Required Capital
Including Capital
Conservation Buffer
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
AmountRatioAmountRatioAmountRatio
June 30, 2020
Reliant Bancorp
Tier I leverage$243,428  8.47 %$114,960  4.00 %$143,700  5.00 %
Common equity Tier 1231,701  9.25 %175,341  7.00 %162,817  6.50 %
Tier I risk-based capital243,428  9.71 %213,094  8.50 %200,559  8.00 %
Total risk-based capital320,776  12.80 %263,150  10.50 %250,619  10.00 %
Bank
Tier I leverage$293,602  10.23 %$114,791  4.00 %$143,489  5.00 %
Common equity Tier 1293,602  11.74 %175,028  7.00 %162,526  6.50 %
Tier I risk-based capital293,602  11.74 %212,534  8.50 %200,032  8.00 %
Total risk-based capital312,264  12.49 %262,541  10.50 %250,039  10.00 %
December 31, 2019
Reliant Bancorp
Tier I leverage$176,748  9.74 %$72,586  4.00 %$90,733  5.00 %
Common equity Tier 1165,063  10.55 %109,520  7.00 %101,698  6.50 %
Tier I risk-based capital176,748  11.30 %132,952  8.50 %125,131  8.00 %
Total risk-based capital249,751  15.97 %164,207  10.50 %156,388  10.00 %
Bank
Tier I leverage$186,734  10.30 %$72,518  4.00 %$90,648  5.00 %
Common equity Tier 1186,734  11.95 %109,384  7.00 %101,571  6.50 %
Tier I risk-based capital186,734  11.95 %132,823  8.50 %125,010  8.00 %
Total risk-based capital199,737  12.79 %163,975  10.50 %156,167  10.00 %
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Effects of Inflation and Changing Prices

The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires the measurement of financial positions and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time due to inflation. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates generally have a more significant impact on the performance of a financial institution than the effects of general levels of inflation. Although interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services, increases in inflation generally have resulted in increased interest rates. In addition, inflation affects financial institutions’ cost of goods and services purchased, the cost of salaries and benefits, occupancy expense, and similar items. Inflation and related increases in interest rates generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings, and stockholders’ equity. Commercial and other loan originations and refinancing tend to slow as interest rates increase, and can reduce our earnings from such activities.

Off-Balance Sheet Lending Arrangements

Off-balance sheet arrangements generally consist of unused lines of credit and standby letters of credit. Such commitments of the Company were as follows at June 30, 2020:
June 30, 2020
Unused lines of credit$506,038  
Standby letters of credit18,176  
Total commitments$524,214  

Other Off-Balance Sheet Arrangements

The Company utilizes interest rate swaps to mitigate interest rate risk. The total notional amount of swap agreements was $179,605 and $129,605, respectively, at June 30, 2020 and December 31, 2019. At June 30, 2020 and December 31, 2019, the contracts had negative fair values totaling $10,795 and $2,708, respectively.

Emerging Growth Company Status

Reliant Bancorp is presently an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if Reliant Bancorp chooses to comply with the reporting requirements of public companies that are not emerging growth companies, Reliant Bancorp may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as Reliant Bancorp is an emerging growth company. Reliant Bancorp will remain an emerging growth company through the fiscal year ended December 31, 2020. Management cannot predict if investors will find Reliant Bancorp’s common stock less attractive because it will rely on these exemptions. If some investors find Reliant Bancorp’s common stock less attractive as a result, there may be a less active trading market for its common stock and Reliant Bancorp’s stock price may be more volatile.

Further, the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. Reliant Bancorp has elected to take advantage of the extended transition period that allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies, which means that the financial statements included in this filing, as well as the financial statements we will file in the future, will be subject to all new or revised accounting standards generally applicable to private companies. As a result, we will comply with new or revised accounting standards to the same extent that compliance is required for non-public companies.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

This item is not applicable to smaller reporting companies.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported as and when required and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended June 30, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION



Item 1.  Legal Proceedings.

Reliant Bancorp and its wholly-owned bank subsidiary, the Bank, are periodically involved as a plaintiff or defendant in various legal actions in the ordinary course of business. Neither Reliant Bancorp nor the Bank is involved in any litigation that is expected to have a material impact on our financial position or results of operations. Management believes that any claims pending against Reliant Bancorp or its subsidiaries are without merit or that the ultimate liability, if any, resulting from them will not materially affect the Bank’s financial condition or Reliant Bancorp’s consolidated financial position.

Item 1A. Risk Factors.

There are no material changes from the risk factors set forth under Part I, Item 1A. "Risk Factors" in Reliant Bancorp's Annual Report on Form 10-K for the year ended December 31, 2019 and under Part II, Item 1A. "Risk Factors" in Reliant Bancorp's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, except as described below.

The COVID-19 pandemic has had and is likely to continue to have an adverse effect, which could be material, on our business, results of operations, and financial condition.
The COVID-19 pandemic has resulted in widespread economic and financial disruptions that have adversely affected, and are likely to continue to adversely affect, our customers and other businesses in our market area. The extent of the effect on our customers and market area, and the resulting impact on our business, financial condition, liquidity and results of operations, are unknown at this time, and will depend on a number of factors beyond our control, including without limitation:

the duration and ultimate severity of the COVID-19 pandemic, and the timing of development and widespread availability of effective medical treatments or vaccines;

the continued response of governmental authorities, which previously have significantly curtailed business and individual activities;

the success of monetary, fiscal, and other economic policies and programs adopted or implemented by governmental authorities, such as the Paycheck Protection Program, and designed to provide economic assistance to individuals and small businesses and otherwise mitigate the financial impact of the COVID-19 pandemic on businesses and individuals;

compliance, operational or reputational risks related to our participation in governmental programs, including increased costs and the risk of litigation or regulatory action;

continuing negative trends in unemployment and consumer confidence; and

customer demand for our products and services.

Many of the risks described under Part I, Item 1A. "Risk Factors" in Reliant Bancorp's Annual Report on Form 10-K for the year ended December 31, 2019, will likely be exacerbated, and the impact of such risks will likely be magnified, as a result of the COVID-19 pandemic. The following discussion highlights some areas where the negative impacts of the COVID-19 pandemic on our business, financial condition, liquidity and results of operations are expected to be most severe.

Loan Credit Quality. Approximately 18% of our loan portfolio is comprised of non-owner-occupied loans to borrowers in the hotel, restaurant and retail industries. These industries have been more severely impacted by the COVID-19 pandemic and governmental responses, such as stay-at-home orders and social distancing requirements, than other industries, and may have a longer recovery period than other industries. Aside from the industries mentioned above, we have other borrowers whose ability to make loan payments is dependent on rental income from their tenants, some of whom are engaged in businesses significantly impacted by the COVID-19 pandemic. Deteriorating economic conditions are likely to result in an increase in tenants failing to make rental payments, and economic relief programs adopted in response to the COVID-19 pandemic may permit tenants to defer or reduce rent payments. As a result of actual or expected credit losses, we may downgrade loans, increase our allowance for credit losses as a result of increases in non-performing assets,
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and write-down or charge-off credit relationships, any of which will negatively impact our results of operations. We have also offered payment deferrals to many of our customers, and may need to offer further concessions or modifications, which could negatively impact our credit quality. In addition, market upheavals are likely to affect the value of real estate and commercial assets. In the event of foreclosure, we may be unable to sell the foreclosed assets at a price that will allow us to recoup all or a significant portion of the delinquent loan.

Increased Demands on Capital and Liquidity. We have begun to experience an increased volume of loan originations, particularly SBA loans pursuant to the Paycheck Protection Program created by recent legislation. Certain of these SBA loans have mandated interest rates that are lower than our usual rates and may not be purchased by the SBA or other third parties within expected timeframes. In addition, during times of economic distress, borrowers may draw on existing lines of credit or seek additional loans to finance their businesses. These factors may result in reduced levels of capital and liquidity being available to originate more profitable loans, which could negatively impact our ability to serve our existing customers and our ability to attract new customers.

Deposits. As a result of the COVID-19 pandemic, deposit customers are expected to retain higher levels of cash. While increased low-interest deposits could have a positive impact in the short-term, we would not expect these funds to be replenished as customers use deposit funds for liquidity for their business and individual needs. If deposit levels decline, our available liquidity would decline, and we could be forced to obtain liquidity from other sources on terms less favorable than current deposit terms, which would in turn compress margins and negatively impact our results of operations.

Changes to Operations. We have implemented a number of operational changes in response to the COVID-19 pandemic, including work-from-home arrangements, which may result in a loss of employee engagement and productivity which could impact financial results and the operations of the Bank as well as increase risks related to cyber security

Growth Strategy. The COVID-19 pandemic has impacted, and may for some time continue to impact, our ability to execute on our growth strategy. The continuation or worsening of the COVID-19 pandemic may limit our ability to grow organically and/or via mergers or acquisitions. Since the COVID-19 pandemic began in the United States, the level of financial institution merger and acquisition activity has significantly declined, and we cannot predict when or if such activity will rebound.

Even following medical resolution of the COVID-19 pandemic and the loosening of restrictions on business and individual activities, the U.S. and local economies may not recover quickly and may experience a prolonged recession. Our business and operations would be adversely affected, possibly materially, by a slow economic recovery or a prolonged recession.

We are subject to regulatory risks as a result of the Company’s participation in the Paycheck Protection Program.

Because of the short timeframe between the passing of the CARES Act and implementation of the PPP, some of the rules and other guidance relating to the PPP were issued after lenders began processing PPP loan applications. Also, there has been and there continues to be uncertainty in the laws, rules, and other guidance relating to the PPP. The PPP has attracted, and may continue to attract, interest from federal and state governmental and regulatory authorities and public interest groups. Although we believe our participation in the PPP has been in accordance with applicable laws, rules, and other guidance, we may in the future be subject to scrutiny and adverse actions by federal or state governmental or regulatory authorities (or other third parties) as relates to our participation in the PPP. Federal and state regulators can impose, or request that we consent to, substantial sanctions, restrictions, or other requirements if they determine there have been violations of laws, rules, or regulations or weaknesses or failures with respect to general standards of safety and soundness, any of which could adversely affect our business, reputation, results of operations, and financial condition.

The spread of COVID-19, or governmental responses to the same, may disrupt banking and other financial activity in the areas in which we operate and could potentially create business continuity issues for us.

The outbreak and spread of COVID-19 and federal, state, and local governmental responses to the same may result in disruption in the services we provide. We rely on our third-party vendors to conduct business and to process, record, and monitor transactions. If any of these vendors are unable to continue to provide us with needed services or experience interruptions in their ability to provide us with needed services, it could negatively impact our ability to serve our customers. Further, the COVID-19 pandemic could negatively impact the ability of our employees and customers to engage in banking and
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other financial transactions in the geographic areas in which we operate and could create widespread issues for us. We also could be adversely affected if key personnel or a significant number of employees were to become unavailable due to infection, quarantine, or other effects of or restrictions relating to COVID-19 outbreaks in our market areas. Although we have business continuity plans and other safeguards in place, there is no assurance that such plans and safeguards will be effective.

Unpredictable future developments related to or resulting from the COVID-19 pandemic could materially and adversely affect our business and results of operations.

Because there have been no comparable recent global pandemics that resulted in similar global impact, we do not yet know the full extent of the COVID-19 pandemic’s effects on our business or operations or the global economy as a whole. Any future developments will be highly uncertain and cannot be predicted, including the scope and duration of the pandemic, the effectiveness of our work-from-home arrangements, third party providers’ ability to support our operations, and any actions taken by governmental authorities and other third parties in response to the pandemic. We are continuing to monitor the COVID-19 pandemic and related risks, although the rapid development and fluidity of the situation precludes any specific prediction as to its ultimate impact on us. However, if the COVID-19 outbreak continues to spread or otherwise results in a continuation or worsening of the current economic and commercial environments, our business, financial condition, and results of operations, as well as our regulatory capital and liquidity ratios, could be materially and adversely affected.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

The following table contains information regarding shares of our common stock repurchased by Reliant Bancorp during the three months ended June 30, 2020.
Period
Total Number of Shares Purchased (1)
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs (2) (in thousands)
April 1, 2020 to April 30, 2020235$11.27$15,000
May 1, 2020 to May 31, 2020$15,000
June 1, 2020 to June 30, 20201,462$14.61$15,000
Total1,697$14.14$15,000
(1)During the quarter ended June 30, 2020, 15,000 shares of restricted stock previously awarded to certain of the participants in our stock plans vested. We withheld 1,697 shares to satisfy tax withholding requirements associated with the vesting of these shares of restricted stock.

(2)On March 10, 2020, Reliant Bancorp's board of directors authorized a stock repurchase plan allowing Reliant Bancorp to repurchase up to $15 million of outstanding Reliant Bancorp common stock (the "Repurchase Plan"). As of June 30, 2020, Reliant Bancorp had not repurchased any shares of Reliant Bancorp common stock under the Repurchase Plan. The Repurchase Plan does not obligate Reliant Bancorp to repurchase any dollar amount or number of shares. The Repurchase Plan may be extended, modified, amended, suspended, or discontinued at any time. On April 27, 2020, we announced that our board of directors suspended the Repurchase Plan to preserve our financial strength during this challenging economic environment.

Item 3.   Defaults Upon Senior Securities.

Not applicable.


Item 4.   Mine Safety Disclosures.

Not applicable.

Item 5.   Other Information.

None.
64

Table of Contents
Item 6.   Exhibits.
EXHIBIT INDEX 
Exhibit
No.
Description
 
101.INS*Inline XBRL Instance Document.
101.SCH*Inline XBRL Schema Documents.
  
101.CAL*Inline XBRL Calculation Linkbase Document.
101.LAB*Inline XBRL Label Linkbase Document.
101.PRE*Inline XBRL Presentation Linkbase Document.
101.DEF*Inline XBRL Definition Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.
** Furnished herewith.
65

Table of Contents
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RELIANT BANCORP, INC.
August 7, 2020/s/ DeVan D. Ard, Jr.
DeVan D. Ard, Jr.
Chairman and Chief Executive Officer
(Principal Executive Officer)
August 7, 2020/s/ Jerry Cooksey
Jerry Cooksey
Chief Financial Officer
(Principal Financial Officer)

66
Document

Exhibit 3.2
Explanatory Note: This exhibit is being filed pursuant to Item 601(b)(3)(ii) of Regulation S-K which requires a conformed version of our bylaws reflecting all amendments in one document. Therefore, the document below reflects the Third Amended and Restated Bylaws of Reliant Bancorp, Inc. (the “Company”) revised for an amendment effective as of June 16, 2020, which removes the requirement that the President of the Company be a member of the board of directors of the Company.






CONFORMED VERSION OF
THIRD AMENDED AND RESTATED BYLAWS

OF

RELIANT BANCORP, INC.
AS AMENDED BY AMENDMENT
FILED ON JUNE 16, 2020




TABLE OF CONTENTS

Page
Article I. Name and Offices of Company
Article II. Capital Stock
Section 2.1. Share Certificates
Section 2.2. Rights of Company with Respect to Record Owners
Section 2.3. Transfers of Shares
Section 2.4. Lost, Stolen, Destroyed, or Mutilated Certificates
Article III. Meetings of Shareholders
Section 3.1. Annual Meetings of Shareholders
Section 3.2. Special Meetings of Shareholders
Section 3.3. Notice of Meetings of Shareholders
Section 3.4. Quorum and Voting Requirements
Section 3.5. Administration of the Meeting
Section 3.6. Voting Power and Record Date
Section 3.7. Proxies
Section 3.8. Notice of Shareholder Proposals
5
Section 3.9. Advance Notice of Director Nominations
Article IV. Board of Directors
Section 4.1. Board Powers and Composition
Section 4.2. Board Vacancies
Section 4.3. Meetings of the Board
Section 4.4. Removal of Directors
8
Section 4.5. Resignation of Directors
Section 4.6. Presiding Officer
Section 4.7. Quorum and Voting
Section 4.8. Removal of Officers and Employees
Section 4.9. Officer Vacancies
Section 4.10. Committees of the Board
Article V. Officers
Section 5.1. Officer Positions
Section 5.2. Election and Term
Section 5.3. Compensation
10
Section 5.4. Chairman of the Board
10
Section 5.5. President
10
Section 5.6. Chief Executive Officer
10
Section 5.7. Secretary
Section 5.8. Treasurer



Section 5.9. Assistant Secretaries
Article VI. Indemnification
11
Section 6.1. Parties to Proceedings
11
Section 6.2. Claims
Section 6.3. Non-Exclusivity of Rights
12
Section 6.4. Other Indemnification
12
Section 6.5. Insurance
12
Article VII. Fiscal Year
Article VIII. Dividends
Article IX. Corporate Actions
Section 9.1. Execution of Instruments
Section 9.2. Receipts, Checks, Drafts, Etc
13
Section 9.3. Loans
Section 9.4. Corporate Seal
13
Article X. Amendment of Bylaws
Article XI. Violation of Law or Regulation
Article XII. Voting Securities Held by Company
Article XIII. Notice by Electronic Transmission
14
Section 13.1. Notice by Electronic Transmission
14
Section 13.2. Definition of Electronic Transmission










THIRD AMENDED AND RESTATED BYLAWS
OF
RELIANT BANCORP, INC.


ARTICLE I
NAME AND OFFICES OF COMPANY

The name of the company is Reliant Bancorp, Inc. (the “Company”), and the Company’s principal office address shall be at such location as may be determined by the board of directors of the Company (the “Board”). The Company may establish and maintain offices at such other locations as may be determined from time to time by the Board.

ARTICLE II
CAPITAL STOCK

Section 2.1. Share Certificates. Shares of capital stock of the Company may be either certificated or uncertificated as determined by the Board. If shares are certificated, certificates for such shares shall be numbered consecutively, shall be entered in the books or records of the Company as issued, and shall be signed, either manually or in facsimile, by either the President or the Chief Executive Officer and either the Secretary or the Treasurer, or any such other officers as may from time to time be designated by the Board, the signature of two such officers being required. Each certificate shall state on its face the name of the Company, that the Company is organized under the laws of the State of Tennessee, the name of the person to whom it is issued, the date of the certificate’s issuance, the number and class of shares, and the designation of the series, if any, the certificate represents, the par value of each share represented by the certificate, or that the shares are without par value, and such other information as the Board may from time to time require. The designation and relative rights, preferences, and limitations applicable to each class or series of capital stock of the Company and the variations in rights, preferences, and limitations determined for each series (and the authority of the Board to determine variations for future series) shall be summarized on the front or back of each certificate, or, alternatively, each certificate may conspicuously state that such information will be furnished by the Company to the shareholder free of charge upon written request. All shares of capital stock of the Company not registered pursuant to the provisions of the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities act, or exempt from registration under the Securities Act or any applicable state securities act, shall not be sold, pledged, hypothecated, donated, or otherwise transferred or disposed of absent such registration or exemption, and the following legend shall be placed in the Company’s stock transfer records and conspicuously noted on each certificate representing such shares:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED OR DISPOSED OF ABSENT SUCH REGISTRATION, UNLESS, IN THE OPINION OF LEGAL COUNSEL TO THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.

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THE COMPANY IS AUTHORIZED TO ISSUE DIFFERENT CLASSES OF SHARES OR DIFFERENT SERIES WITHIN A CLASS. THE COMPANY WILL FURNISH IN WRITING AND WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS A STATEMENT OF THE DESIGNATION, RELATIVE RIGHTS, PREFERENCES, AND LIMITATIONS APPLICABLE TO EACH CLASS, AND SERIES WITHIN A CLASS, OF CAPITAL STOCK OF THE COMPANY AND THE VARIATIONS IN RIGHTS, PREFERENCES, AND LIMITATIONS APPLICABLE TO EACH SERIES (AND THE AUTHORITY OF THE COMPANY’S BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES).

Section 2.2. Rights of Company with Respect to Record Owners. The Company shall be entitled to treat the holder of record of any shares of capital stock of the Company as the holder in fact thereof and the person exclusively entitled to vote the shares, to receive any share dividend or distribution with respect to the shares, and for all other purposes, and the Company shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not the Company has express or other notice thereof, except as otherwise provided by applicable law.

Section 2.3. Transfers of Shares. Transfers of shares of capital stock of the Company shall be made upon the books of the Company by the record holder thereof, or by an attorney lawfully constituted in writing, upon the surrender of the certificate(s), if any, therefor. The Board may from time to time appoint suitable agents to facilitate transfers by shareholders of shares of capital stock of the Company.

Section 2.4. Lost, Stolen, Destroyed, or Mutilated Certificates. Any person claiming a certificate for shares of capital stock of the Company to be lost, stolen, destroyed, or mutilated shall make an affidavit or affirmation of such fact in the manner required by the Board and, if the Board, President or Chief Executive Officer, Secretary, or Treasurer requires, shall give the Company a bond of indemnity in such form and amount as the Board may require, and with one or more sureties satisfactory to the Board, whereupon an appropriate new certificate may be issued in lieu of the certificate alleged to have been lost, stolen, destroyed, or mutilated.

ARTICLE III
MEETINGS OF SHAREHOLDERS

Section 3.1. Annual Meetings of Shareholders. Annual meetings of the shareholders of the Company for the election of Company directors and the transaction of such other business as may properly come before the meetings shall be held at such place as may be determined by the Board, on such dates and at such times as determined by resolution of the Board.
        
Section 3.2. Special Meetings of Shareholders.

(a) Special meetings of the shareholders of the Company shall be held at such place as may be determined by the Board. Special meetings of the shareholders of the Company may be called by (i) the Chairman of the Board, (ii) the President or Chief Executive Officer, (iii) a majority of the Board, or (iv) the holders of 20% or more of the outstanding shares of voting stock of the Company.

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(b)  If any person(s) other than the Board call a special meeting, the request for the meeting shall: (i) be in writing, (ii) specify the general nature of the business proposed to be transacted, and (iii) be delivered to the Secretary of the Company. Upon receipt of such a request, the Board shall determine the date, time, and place of such special meeting, which must be scheduled to be held on a date that is within 90 days of receipt by the Secretary of the request therefor, unless a later date is required in order to allow the Company to file any information required under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Secretary of the Company shall prepare a notice of a special meeting properly requested hereunder. No business may be transacted at such special meeting other than the business specified in the notice to shareholders of such meeting.
        
(c) In the case of a special meeting requested pursuant to Section 3.2(b), the Chairman shall have the power and duty (i) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in Section 3.2 and Section 3.9, and (ii) if any proposed nomination or business was not made or proposed in compliance with these bylaws or the stated business to be brought before the special meeting is not a proper subject for shareholder action under applicable law, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted.
        
(d) A special meeting requested pursuant to Section 3.2(b) shall not be held if (i) the Board calls for an annual meeting of shareholders to be held within 90 days of receipt by the Secretary of the request for the special meeting and the Board determines in good faith that the business of such annual meeting includes (among any other matters properly brought before the annual meeting) the business specified in such special meeting request; (ii) an annual or special meeting was held within 90 days before receipt by the Secretary of the request for the special meeting and the Board determines in good faith that the business of such prior annual or special meeting included (among any other matters properly brought before such prior annual or special meeting) the business specified in such special meeting request; or (iii) the Board determines in good faith that all of the stated business to be brought before such special meeting is not a proper subject for shareholder action under applicable law.
         
Section 3.3. Notice of Meetings of Shareholders.

(a)Written notice of the date, time, and place of each annual or special meeting of the shareholders of the Company shall be given to all shareholders entitled to notice of the meeting, at the addresses shown on the stock records of the Company for such persons, no fewer than 10 days nor more than 60 days prior to the date of the meeting. Notice of any special meeting of the shareholders of the Company shall state the purpose or purposes of the meeting.
        
(b)Notice of any meeting of shareholders shall be conclusively deemed given: (i) if mailed, when deposited in the United States mail, postage prepaid, directed to the shareholder at the shareholder’s address as it appears on the Company’s records, (ii) if electronically transmitted, as provided in Section 13.1 of these bylaws, or (iii) if otherwise given, when delivered.
        
(c)An affidavit of the Secretary of the Company or of the transfer agent or any other agent of the Company that notice of any annual or special meeting of shareholders has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
Section 3.4. Quorum and Voting Requirements. The holders of a majority of the shares entitled to vote on a matter to be considered at an annual or special meeting of the shareholders, present in person or by proxy, shall constitute a quorum at any meeting of the shareholders of the Company with respect to
3


that matter. However, if such a majority shall not be present, in person or by proxy, at any meeting of Company shareholders, the shareholders present, in person or by proxy, may adjourn the meeting, without notice other than the announcement at the meeting of the date, time, and place to which the meeting is adjourned. At any such adjourned meeting, any business may be transacted which might have been transacted at the meeting as originally notified. Once a share is represented for any purpose at a meeting, it shall be deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof unless a new record date is or must be set for the adjourned meeting. If a quorum exists, action on a matter, including the election of directors, by a voting group is approved if the votes cast within the voting group in favor of the action exceed the votes cast in opposition of the action, unless a greater number of affirmative votes is required by the charter of the Company, these bylaws, or the Tennessee Business Corporation Act.

Section 3.5. Administration of the Meeting.

(a)  The Chairman of the Board shall preside at all meetings of the shareholders of the Company. In the event of the Chairman’s absence, incapacity, or refusal to serve, any authorized Company officer or director appointed by the Board prior to the meeting shall so preside.

(b) The Board shall be entitled to make such rules or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate, or convenient. Subject to such rules and regulations, if any, the Chairman shall have the right and authority to prescribe such rules, regulations, and procedures and to do all acts as, in the judgment of such Chairman, are necessary, appropriate, or convenient for the proper conduct of any meeting, including without limitation establishing an agenda of business of the meeting, rules or regulations to maintain order, restrictions on entry to the meeting after the time fixed for commencement thereof, and the date and time of the opening and closing of the polls for each matter upon which the shareholders will vote at the meeting (and shall announce such at the meeting).

Section 3.6. Voting Power and Record Date. Each shareholder shall be entitled to that number of votes for each share of capital stock of the Company held by such shareholder as set forth in the charter of the Company or provided by law. For purposes of determining shareholders entitled to notice of or to vote at any meeting of Company shareholders, or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board shall fix in advance a date (the “Record Date”) as the record date for any such determination of shareholders, which Record Date shall be not more than 60 days, and with respect to any meeting of Company shareholders not fewer than 10 days, prior to the date on which the particular meeting or other action requiring such determination of shareholders is to be held or taken. Except as otherwise provided in the Tennessee Business Corporation Act, when a determination of shareholders entitled to notice of or to vote at any meeting of Company shareholders has been made, such determination shall be effective for any adjournment of such meeting.

Section 3.7. Proxies. Each shareholder eligible to vote at a meeting of shareholders shall be entitled to vote by proxy, and proxies shall be provided with the notice of any meeting of shareholders. Proxies must be signed by the owner(s) of the shares to be voted on the proxies provided and shall be valid for only one meeting, to be specified on the proxy form, and any adjournment(s) of such meeting. An appointment of a proxy is effective when received by the Secretary of the Company or any other officer or agent authorized to tabulate votes. All proxies shall be dated and filed with the records of the meeting of Company shareholders to which they relate.

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        Section 3.8. Notice of Shareholder Proposals.

(a)At any special or annual meeting of shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board; (ii) otherwise properly brought before the meeting by or at the direction of the Board; or (iii) otherwise properly brought before the meeting by a shareholder.
(b)In order for business to be properly brought before an annual meeting by a shareholder, the shareholder must, in addition to any other applicable requirement, have given timely notice in proper form to the Secretary of the Company. To be timely, a shareholder’s notice must be delivered to or mailed and received at the principal office of the Company (i) not later than the close of business on the 90th day nor earlier than the close of business on the 120th calendar day in advance of the anniversary of the previous year’s annual meeting if such meeting is to be held on a date that is not more than 30 days in advance of the anniversary of the previous year’s annual meeting or not later than 70 days after the anniversary of the previous year’s annual meeting, and (ii) with respect to any other annual meeting, the close of business on the 10th day following the date of public disclosure of the date of such meeting. In no event shall the public disclosure of an adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period). To be in proper form, a shareholder’s notice to the Secretary shall be in writing and set forth (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address, as they appear on the Company’s books, of the shareholder proposing such business; (iii) the class and number of shares of capital stock of the Company beneficially owned by the shareholder; (iv) any material interest of the shareholder in such business; and (v) any other information that is required to be provided by the shareholder pursuant to Rule 14A under the Exchange Act in the shareholder’s capacity as a proponent of a shareholder proposal. Notwithstanding the foregoing, in order to include information with respect to a shareholder proposal in the proxy statement and form of proxy for a meeting of shareholders, shareholders must provide notice as required by the regulations promulgated under the Exchange Act and meet the eligibility and other requirements set out in Rule 14. Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this section and the Exchange Act and the rules promulgated thereunder. In the event of a discrepancy between these bylaws and the rules promulgated under the Exchange Act, the rules shall govern.
(c)The Chairman of the meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting in accordance with this section, and if the Chairman should so determine, the Chairman shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted.
(d)In order for business to be properly brought by a shareholder before a requested special meeting, a shareholder must comply with the procedures set forth in Section 3.2 of these bylaws.

        Section 3.9. Advance Notice of Director Nominations.

(a) Only persons who are nominated in accordance with the procedures set forth in this section shall be eligible for election as directors of the Company. To be properly brought before an annual meeting of shareholders, or any special meeting of shareholders called for the purpose of electing directors, nominations for the election of directors must be (i) specified in the notice of meeting (or any supplement thereto), (ii) made by or at the direction of the Board (or any duly authorized committee
5


thereof), or (iii) made by a shareholder of the Company (A) who is a shareholder of record on the date of the giving of the notice provided for in this Section 3.9 and on the record date for the determination of shareholders entitled to vote at such meeting and (B) who complies with the notice procedures set forth in this Section 3.9.

(b) In addition to any other applicable requirements, for a nomination to be made by a shareholder, such shareholder must have given timely notice thereof in proper written form to the Secretary of the Company. To be timely, a shareholder’s notice to the Secretary must be received at the principal executive offices of the Company, in the case of an annual meeting, in accordance with the provisions set forth in Section 3.8, or, in the case of a special meeting of shareholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.

(c)  To be in proper written form, a shareholder’s notice to the Secretary must set forth:

(i)  as to each person whom the shareholder proposes to nominate for election as a director, (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Company owned beneficially or of record by the person, (D) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the shareholder, and (E) any other information relating to such person that is required to be disclosed in solicitations of proxies for elections of directors, or is otherwise required, in each case pursuant to Rule 14A under the Exchange Act (including without limitation such person’s written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected); and

(ii)  as to such shareholder giving notice, the information required to be provided pursuant to Section 3.8.

(d) No person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 3.9. If the Chairman properly determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

ARTICLE IV
BOARD OF DIRECTORS

Section 4.1. Board Powers and Composition.

(a) The business and affairs of the Company shall be managed under the direction of the Board, which shall meet not less than annually. In addition to the powers and authority conferred upon the Board by these bylaws, the Board may exercise all such powers and do such acts and things as it may be authorized or required to do by statute, by rule or regulation of applicable regulatory authorities, or by the charter or the shareholders of the Company.

(b) The Board shall consist of at least five but no more than 25 individuals. The number of members of the Board may from time to time be fixed or changed, within the range set forth above, by resolution of the Board. Directors shall be elected annually at the annual meeting of the shareholders of
6


the Company. Prior to the 2019 annual meeting of Company shareholders, directors shall be elected by a plurality of the votes cast by those shares entitled to vote for the election of directors, assuming the presence of a quorum at the meeting. Commencing at the 2019 annual meeting of Company shareholders, and thereafter, directors shall be elected by a majority of the votes cast by those shares entitled to vote for the election of directors, assuming the presence of a quorum at the meeting, unless the number of nominees for director exceeds the number of directors to be elected, in which case directors shall instead be elected by a plurality of the votes cast by those shares entitled to vote in the election assuming the presence of a quorum at the meeting.

(c) The classification of the Board into three classes (Class I, Class II, and Class III) shall be phased out in accordance with the terms of the charter of the Company. Commencing at the 2019 annual meeting of Company shareholders, and thereafter, directors shall be elected for terms expiring at the annual meeting of Company shareholders next following their election, provided that the term of each such director shall continue until the election and qualification of his or her successor and shall be subject to the director’s earlier death, retirement, resignation, or removal from office.

Section 4.2. Board Vacancies. In the event of a vacancy on the Board, including a vacancy resulting from an increase in the number of directors or a vacancy resulting from the removal of a director for any reason or a director’s resignation, (a) the shareholders may fill the vacancy, (b) the Board may fill the vacancy, or (c) if the directors remaining in office constitute fewer than a quorum of the Board, the directors remaining in office may fill the vacancy by the affirmative vote of a majority of such directors.

Section 4.3. Meetings of the Board.

(a)Regular meetings of the Board shall be held at the principal office of the Company, or at such other location as may be determined from time to time by the Board, at such times as the Board may from time to time determine. Special meetings of the Board may be called by the Chairman of the Board, the President or Chief Executive Officer, or one-third of the directors.

(b)No notice of regular meetings of the Board need be given to the directors. Notice of the date, time, and place of each special meeting of the Board shall be given to each director at least two days prior to the meeting. Notice of any special meeting of the Board may be waived by a director in writing (which writing shall be signed by the director and filed with the minutes of the subject meeting) at any time before, during, or after the meeting, and a director’s attendance at or participation in a special meeting of the Board shall constitute a waiver of any required notice thereof unless the director, at the beginning of the meeting or promptly upon the director’s arrival, objects to the holding of the meeting or the transaction of business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

(c)A director who is present at a meeting of the Board when corporate action is taken shall be deemed to have assented to the action taken unless (i) the director objects at the beginning of the meeting, or promptly upon the director’s arrival, to the holding of the meeting or the transaction of business at the meeting; (ii) the director’s dissent or abstention from the action taken is entered in the minutes of the meeting; or (iii) the director delivers written notice of the director’s dissent or abstention from the action taken to the presiding officer of the meeting before its adjournment or to the Company immediately after adjournment of the meeting; provided that the right of dissent or abstention shall not be available to a director who votes in favor of the action taken.

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(d)Directors may participate in any meeting of the Board by, and any meeting of the Board may be conducted through the use of, any means of communication by which all directors participating may simultaneously hear one another, including teleconference or video conference.

(e)Any action required or permitted to be taken at a meeting of the Board may be taken without a meeting. If all of the directors consent to the taking of such action without a meeting, the affirmative vote of the number of directors that would be necessary to authorize or take such action at a meeting of the Board shall be the act of the Board. The action must be evidenced by one or more written consents describing the action taken, signed by each director in one or more counterparts, and indicating each signing director’s vote or abstention on the action, and such written consent(s) shall be included in the corporate minutes or filed with the corporate records reflecting the action taken.
Section 4.4. Removal of Directors. The shareholders of the Company may remove one or more directors with cause at a meeting called for such purpose. The shareholders of the Company may not remove a director without cause. Any or all of the directors may be removed for cause by the vote of a majority of the Board at a meeting called for such purpose. The notice of any such meeting, whether of the shareholders of the Company or the directors, must state that the purpose, or one of the purposes, of the meeting is the removal of one or more directors.

Section 4.5. Resignation of Directors. A director may resign at any time by delivering written notice of resignation to the Board, the Chairman of the Board, the President, or the Company. Any such resignation shall be effective when the notice of resignation is delivered, unless the notice of resignation specifies a later effective date.

Section 4.6. Presiding Officer. The Chairman of the Board shall preside at all meetings of the Board. In the event of the Chairman’s absence, incapacity, or refusal to serve, the directors present shall select one of their number to so preside.

Section 4.7. Quorum and Voting. A majority of the members of the Board shall constitute a quorum for the transaction of business, and all matters put to the Board shall be decided by a majority vote of the directors present, assuming a quorum, unless a greater vote is required by the charter of the Company, these bylaws, or applicable law.

Section 4.8. Removal of Officers and Employees. Any or all officers and other employees of the Company may be removed by the Board at any regular or special meeting of the Board, and any officer or other employee of the Company may be suspended by the Chairman until the next meeting of the Board; provided, however, that any such removal or suspension shall be effectuated, where appropriate, after consultation with the Company’s legal counsel or other advisors to assure compliance with applicable labor and employment laws, rules, and regulations.

Section 4.9. Officer Vacancies. Any vacancy occurring among the officers of the Company shall be filled as soon as practicable by the Board at a regular or special meeting thereof, or otherwise in a manner consistent with these bylaws.

Section 4.10. Committees of the Board. The Board may, by resolution(s) adopted by a majority of its members, designate and establish from among its members an Executive Committee and one or more other committees, with each such committee to consist of two or more directors, all of whom shall serve at the pleasure of the Board, and to have such authority as set forth in the resolution(s) establishing the committee; provided that no such committee shall have the authority to (a) authorize distributions,
8


except according to a formula or method prescribed by the Board; (b) fill vacancies occurring on the Board or any committee of the Board; (c) amend or repeal these bylaws or adopt new bylaws; (d) authorize or approve the reacquisition of shares of capital stock of the Company, except according to a formula or method prescribed by the Board; (e) authorize or approve the issuance or sale or contract for sale of shares of capital stock of the Company, or determine the designation and relative rights, preferences, and limitations of any class or series of shares of capital stock of the Company, except with the authorization of and within limits specifically prescribed by the Board, or (f) authorize, approve, or adopt an amendment to the charter of the Company, a plan of merger, share exchange, or consolidation, or the sale, lease, exchange, or other disposition of all or substantially all of the property or assets of the Company. Except as otherwise provided in this Section 4.10, the other provisions of this Article IV, relative to the Board and its deliberations shall be applicable to any committee of the Board. Meetings of any committee of the Board may be called at any time by the Chairman of the Board, the chairman of the committee, or the President or Chief Executive Officer. Meetings of any committee of the Board may be held at such location(s), either within or outside the State of Tennessee, as such committee shall determine. Each committee of the Board may fix its own rules of procedure, including rules of procedure relative to notice of its meetings. Each committee of the Board shall keep a record of its proceedings and shall report such proceedings to the Board on a periodic basis or when otherwise requested by the Board. All action taken by a committee of the Board shall be subject to review and rejection, revision, or alteration by the Board; provided that the rejection, revision, or alteration by the Board of any action properly taken by a committee of the Board shall not affect the rights of persons who have in good faith relied upon such action. The Board shall have the power to at any time remove any member of any committee of the Board with or without cause and to fill vacancies occurring in and to dissolve any committee of the Board.

        Section 4.11. Employee Directors. A director who, at the time of his or her election or re-election to the Board, is employed by the Company or any subsidiary or affiliate of the Company, upon the termination of his or her employment by the Company or any subsidiary or affiliate of the Company, shall immediately tender his or her resignation as a member of the Board. Nothing herein shall require the Board to accept such resignation if, in the judgment of the remaining directors, the director tendering his or her resignation remains a valuable member of the Board.

ARTICLE V
OFFICERS

Section 5.1. Officer Positions. The officers of the Company shall consist of a Chairman of the Board, a President, a Chief Executive Officer, a Secretary, and such other officers as may be elected or appointed from time to time by the Board or otherwise in accordance with this Article V. Any two or more offices may be held by the same person.

Section 5.2. Election and Term. The officers of the Company shall be elected or appointed by the Board annually at the first meeting of the Board after the annual meeting of the shareholders of the Company, or otherwise appointed as provided in this Article V. All Company officers shall hold office until the meeting of the Board immediately following the annual meeting of Company shareholders next following their election or appointment and until their successors shall have been elected or appointed and shall have qualified. Any officer of the Company may be removed by the Board with or without cause. The Board may require any officer, employee, or agent of the Company to give security for the faithful performance of his or her duties.

9


Section 5.3. Compensation. The compensation of the officers of the Company shall be fixed from time to time by the Board, or a duly appointed committee thereof; provided that the Board may delegate to any officer the power to fix the compensation of any other officer(s) under his or her control.

Section 5.4. Chairman of the Board. The Chairman of the Board shall have those powers and duties usually appertaining to his or her office, as well as such other powers and duties as may be prescribed by the Board or these bylaws. The Chairman of the Board shall preside at all meetings of the Board and all meetings of the shareholders of the Company.

Section 5.5. President. The President shall have those powers and duties usually appertaining to his or her office, as well as such other powers and duties as may be prescribed by the Board or these bylaws.

Section 5.6. Chief Executive Officer. The Chief Executive Officer, who shall also be a member of the Board, shall have those powers and duties usually appertaining to his or her office, as well as such other powers and duties as may be prescribed by the Board or these bylaws. Subject to the control of the Board, the Chief Executive Officer shall have general charge of the business and affairs of the Company and its internal operations and shall keep the Board fully advised of the same. The Chief Executive Officer shall see that all orders and resolutions of the Board are carried into effect. The Chief Executive Officer shall employ and discharge the employees and agents of the Company, except such as shall be elected by the Board; provided that the Chief Executive Officer may from time to time delegate these powers.

Section 5.7. Secretary. The Secretary of the Company shall have charge of the minutes of all proceedings of the Board and the shareholders of the Company and shall keep minutes of all meetings of the Board and the shareholders of the Company. Except as otherwise provided by these bylaws, the Secretary shall give all notices required by these bylaws or applicable law to be given to the directors and/or shareholders of the Company. The Secretary shall have charge of the seal of the Company, if any, and may affix the same to any documents or instruments lawfully executed. The Secretary shall have charge of the record of shareholders of the Company and such other books, records, and papers as the Board may direct. Subject to the control of the Board, the Secretary shall have all such other powers and duties as generally are incident to the position of secretary or as may be assigned to the Secretary from time to time by the Board or the President or Chief Executive Officer.

Section 5.8. Treasurer. The Treasurer shall have charge of all funds and securities of the Company, shall endorse the same for deposit or collection when necessary, and deposit the same to the credit of the Company in such banks or depositaries as the Board may authorize. The Treasurer may endorse all commercial documents requiring endorsements for or on behalf of the Company, may sign all receipts and all commercial documents requiring endorsements for or on behalf of the Company, and may sign all receipts and vouchers for payments made to the Company. The Treasurer shall have all such other powers and duties as generally are incident to the position of treasurer or as may be assigned to the Treasurer from time to time by the Board or the President or Chief Executive Officer.

Section 5.9. Assistant Secretaries. Assistant Secretaries may be elected or appointed by the Board or appointed by the President or Chief Executive Officer. In the event of the absence or inability to act of the Secretary, any Assistant Secretary may perform all of the duties and exercise all of the powers of the Secretary, and the performance of any such duty by any such Assistant Secretary shall be conclusive evidence of the Assistant Secretary’s power to act. An Assistant Secretary shall also perform such other duties as the Secretary or the Board may from time to time assign to him or her.
10



ARTICLE VI
INDEMNIFICATION

Section 6.1. Parties to Proceedings. Each person who was or is made a party to, or is threatened to be made a party to or is otherwise involved in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter a “Proceeding”), by reason of the fact that he or she is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, or employee of another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans (hereinafter an “Indemnitee”), provided that the basis of such Proceeding is alleged action in an official capacity as a director, officer, or employee within the scope of such Indemnitee’s duties and authority, shall be indemnified and held harmless by the Company to the fullest extent authorized by the Tennessee Business Corporation Act, as the same now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company prior to such amendment), and applicable federal laws and regulations (including without limitation applicable Federal Deposit Insurance Corporation regulations regarding indemnification payments by a depository institution holding company, as the same may be amended from time to time), against all expense, liability, and loss (including without limitation attorneys’ fees, judgments, fines, excise taxes, penalties, and amounts paid into settlement) reasonably incurred or suffered by such Indemnitee in connection therewith, and such indemnification shall continue as to an Indemnitee who has ceased to be a director, officer, or employee and shall inure to the benefit of the Indemnitee’s heirs, executors, and administrators; provided, however, that, except as provided in Section 6.2 of these bylaws with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify only if such Proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this Article VI shall be a contract right and shall include the right to be paid by the Company the expenses incurred in defending any such Proceeding in advance of its final disposition (hereinafter an “Advancement of Expenses”); provided, however, that an Advancement of Expenses for expenses incurred by an Indemnitee in his or her capacity as a director, officer, or employee (and not in any other capacity in which service was or is rendered by such Indemnitee, including without limitation service to any employee benefit plan) shall be made only upon delivery to the Company of an undertaking by and on behalf of such Indemnitee to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Indemnitee is not entitled to be indemnified for such expenses under this Article VI or otherwise (hereinafter an “Undertaking”).

Section 6.2. Claims. If a claim under Section 6.1 of these bylaws is not paid in full by the Company within 30 days after receipt by the Company of written notice of such claim, except in the case of a claim for an Advancement of Expenses in which case the applicable period shall be 10 days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, the Indemnitee also shall be entitled to be paid the expenses of prosecuting or defending such suit. In (a) any suit brought by an Indemnitee to enforce a right of indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an Advancement of Expenses) and (b) any suit brought by the Company to recover an Advancement of Expenses upon a final adjudication, it shall be a defense that the Indemnitee has not met the applicable standard of conduct set forth in the Tennessee Business Corporation Act or applicable federal laws or regulations. Neither the failure of the Company (including the Board, independent legal counsel, or the Company’s shareholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances or that the Indemnitee has met the applicable standard of conduct set forth in the Tennessee Business Corporation Act or applicable federal
11


laws or regulations nor an actual determination by the Company (including the Board, independent legal counsel, or the Company’s shareholders) that the Indemnitee has not met such applicable standard of conduct shall create a presumption that the Indemnitee has not met such applicable standard of conduct or, in the case of any such suit brought by the Indemnitee, be a defense to such suit. In any suit brought by an Indemnitee to enforce a right hereunder or by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses under this Article VI or otherwise shall be on the Company.

Section 6.3. Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article VI shall not be exclusive of any other right which any person may have or hereafter acquire under or by these bylaws or any statute, agreement, or vote of shareholders or disinterested directors, or otherwise.

Section 6.4. Other Indemnification. The Company may, to the extent authorized from time to time by the Board, grant all or any of the rights to indemnification and/or to the advancement of expenses afforded directors, officers, and employees of the Company in this Article VI to any agent of the Company.

Section 6.5. Insurance. The Company may, but shall not be obligated to, maintain insurance, at its own expense, to protect itself and any person who is or was a director, officer, employee, or agent of the Company, or who while a director, officer, employee, or agent of the Company is or was serving at the request of the Board as a director, officer, partner, trustee, employee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against any expense, liability, or loss, whether or not the Company would have the power to indemnify such person against such expense, liability, or loss under this Article VI, the Tennessee Business Corporation Act, or applicable federal laws and regulations.

ARTICLE VII
FISCAL YEAR

The fiscal year of the Company shall be as determined by the Board. In the absence of such a determination, the fiscal year of the Company shall be the calendar year.

ARTICLE VIII
DIVIDENDS

To the extent consistent with applicable laws, rules, and regulations, including without limitation the Tennessee Business Corporation Act, the Board may declare, and the Company may pay, such dividends upon the capital stock of the Company as the Board in its discretion may deem proper and consistent with the affairs and the safe and sound operation of the Company.

ARTICLE IX
CORPORATE ACTIONS

Section 9.1. Execution of Instruments. The Chairman of the Board, the President, and the Chief Executive Officer shall have the authority, to the extent otherwise consistent with these bylaws and applicable law, to do and perform any and all corporate and official acts in carrying on the Company’s business as they in their discretion deem necessary or advisable, including without limitation the authority
12


to make, execute, acknowledge, and deliver deeds, mortgages, deeds of trust, releases, bills of sale, assignments, transfers, leases, powers of attorney or of substitution, proxies to vote stock, and all other written instruments that may be necessary in the purchase, sale, lease, assignment, transfer, management, or handling in any way of property of any kind held or controlled by the Company in any capacity. The enumeration in this Section 9.1 of particular powers or authority shall not restrict in any way the general powers and authority of the Chairman of the Board, the President, and the Chief Executive Officer. The Board may authorize any other officer(s) or agent(s) of the Company to enter into any contract or execute and deliver any other document or instrument in the name of and on behalf of the Company, and such authority may be general or confined to specific instances.

Section 9.2. Receipts, Checks, Drafts, Etc. All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Company shall be signed by such officer(s) or agent(s) of the Company as shall from time to time be determined by resolution of the Board. The President, the Chief Executive Officer, and any other officer or employee of the Company designated by the Board shall be authorized and empowered to, on behalf of the Company and in its name, endorse checks and warrants, to draw drafts, and to give receipts for money due and payable to the Company.

Section 9.3. Loans. No loan shall be contracted on behalf or in the name of the Company, and no negotiable paper shall be issued in its name, unless the same shall have been authorized by the Board, which authority may be general or limited to specific instances.

Section 9.4. Corporate Seal. The Company may have a corporate seal, which shall be in such form as determined by the Board from time to time.


ARTICLE X
AMENDMENT OF BYLAWS

These bylaws may be amended or repealed by the shareholders of the Company only by the affirmative vote of a majority of all votes entitled to be cast on the amendment or repeal, unless a greater vote is required by the charter of the Company or the Tennessee Business Corporation Act. These bylaws may be amended or repealed by the Board to the fullest extent permitted by the Tennessee Business Corporation Act. Any amendment or repeal of these bylaws by the Board must be approved by the affirmative vote of a majority of the members of the Board, unless a greater vote is required by the Tennessee Business Corporation Act or the charter of the Company.

ARTICLE XI
VIOLATION OF LAW OR REGULATION

If any provision of these bylaws is found to be in violation of any state or federal law or regulation, including, without limitation, the Tennessee Business Corporation Act, the provisions of such state or federal law or regulation shall govern the conduct of the business and affairs and governance of the Company.

ARTICLE XII
VOTING SECURITIES HELD BY COMPANY

13


Unless otherwise determined by the Board, each of the President, and the Chief Executive Officer shall have full power and authority, on behalf of the Company, to attend any meeting of security holders of, and to take any action on written consent as a security holder of, other corporations, limited liability companies, and other entities in which the Company may hold securities. In connection therewith, the President and Chief Executive Officer shall possess and may exercise any and all rights and powers incident to the ownership of such securities which the Company may possess. The Board may from time to time confer like powers and authority upon any other person(s).

ARTICLE XIII
NOTICE BY ELECTRONIC TRANSMISSION

Section 13.1. Notice by Electronic Transmission.

(a)  Without limiting the manner by which notice otherwise may be given effectively to shareholders pursuant to the Tennessee Business Corporation Act, the charter of the Company, or these bylaws, any notice to shareholders given by the Company shall be effective if given by a form of electronic transmission consented to by the shareholder to whom the notice is given. Any such consent shall be revocable by the shareholder by written notice to the Company. Any such consent shall be deemed revoked if (i) the Company is unable to deliver by electronic transmission two consecutive notices given by the Company in accordance with such consent; and (ii) such inability becomes known to the Secretary of the Company or to the transfer agent, or other person responsible for the giving of notice; provided, however, that the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

(b) Any notice given pursuant to Section 13.1(a) shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the shareholder has consented to receive notice; (ii) if by electronic mail, when directed to an electronic mail address at which the shareholder has consented to receive notice; (iii) if by a posting on an electronic network together with separate notice to the shareholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (iv) if by any other form of electronic transmission, when directed to the shareholder. An affidavit of the Secretary or of the transfer agent or other agent of the Company that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

Section 13.2. Definition of Electronic Transmission . For purposes of these bylaws, the term “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.




14
Document
Exhibit 10.3
Execution Version
FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is adopted, executed, and agreed to as of this 22nd day of June, 2020 (the “Effective Date”), by and among Reliant Bancorp, Inc., a Tennessee corporation (“Company”), Reliant Bank, a banking corporation organized under the laws of the State of Tennessee (“Bank”), and DeVan D. Ard, Jr., a resident of the State of Tennessee (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”

RECITALS
 
WHEREAS, the Parties previously entered into that certain Employment Agreement by and among Executive, Company, and Bank, dated April 15, 2018 (the “Employment Agreement”);

WHEREAS, on June 16, 2020, the Boards of Directors of Company and Bank appointed John R. Wilson, who previously served as Chief Loan Officer of Bank, as President of Company and Bank;

WHEREAS, as a result of Mr. Wilson’s appoint as President of Company and Bank, Executive’s position with Company and Bank changed, and the Parties desire to amend the Employment Agreement to reflect such change in Executive’s position with Company and Bank;

WHEREAS, pursuant to Section 17(a) of the Employment Agreement, the Employment Agreement may be amended by an instrument in writing signed by or on behalf of each of the Parties; and

WHEREAS, the Parties desire and deem it to be in their respective best interests to amend the Employment Agreement as set forth in this Amendment.

NOW, THEREFORE, in consideration of the foregoing and the respective agreements and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

1. Defined Terms. Capitalized terms used but not defined in this Amendment shall have the respective meanings ascribed to such terms in the Employment Agreement.
 
2. Employment Agreement Amendment. The Parties acknowledge and agree that Section 2(a) of the Employment Agreement is amended to read in its entirety as follows:
 
(a) Position; Reporting. Executive shall be employed as Chief Executive Officer of Company and Bank and shall perform and discharge faithfully the duties and responsibilities which may be assigned to Executive from time to time in connection with the conduct of the business of Employer. The duties and responsibilities of Executive shall be commensurate with those of individuals holding similar positions at other banks and bank and financial holding companies similarly organized and of comparable size and complexity. Executive shall report directly to the Boards of Directors.
 
3. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original but all of which together shall be deemed to be one and the same agreement. A signed copy of this Amendment delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original manually signed copy of this Amendment.
 



4. Applicable Law. This Amendment shall be governed by and construed and enforced under and in accordance with the laws of the State of Tennessee, without regard to or the application of principles of conflicts of laws.
 
5. Captions. Any captions, titles, or headings preceding the text of any section or subsection of this Amendment are solely for convenience of reference and shall not constitute part of this Amendment or affect its meaning, construction, or effect.
 
6. Ratification. Except as expressly amended by this Amendment, the Employment Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms.


(Signature Page Follows)





IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment effective as of the Effective Date.


COMPANY:RELIANT BANCORP, INC.
By: /s/ John R. Wilson
       John R.Wilson
       President
BANK:RELIANT BANK
By: /s/ John R. Wilson
       John R.Wilson
       President
EXECUTIVE:
/s/ DeVan D. Ard, Jr.
DeVan D. Ard, Jr.
 






















(Signature Page to First Amendment to Employment Agreement)
Document

EXHIBIT 31.1


CERTIFICATIONS

I, DeVan D. Ard, Jr., certify that:
1.I have reviewed this report on Form 10-Q of Reliant Bancorp, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



EXHIBIT 31.1

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
August 7, 2020/ s/ DeVan D. Ard, Jr.
DeVan D. Ard, Jr.
Chief Executive Officer
(Principal Executive Officer)



Document

EXHIBIT 31.2


CERTIFICATIONS

I, Jerry Cooksey, certify that:
1.I have reviewed this report on Form 10-Q of Reliant Bancorp, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



EXHIBIT 31.2

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
August 7, 2020/ s/ Jerry Cooksey
Jerry Cooksey
Chief Financial Officer
(Principal Financial Officer)




Document

EXHIBIT 32.1


CERTIFICATIONS OF CEO AND CFO PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Reliant Bancorp, Inc., a Tennessee corporation (the “Company”), on Form 10-Q for the quarter ended June 30, 2020, as filed with the Securities and Exchange Commission (the “Report”), each of DeVan D. Ard, Jr., Chief Executive Officer of the Company, and Jerry Cooksey, Chief Financial Officer of the Company, do hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
August 7, 2020/ s/ DeVan D. Ard, Jr.
DeVan D. Ard, Jr.
Chief Executive Officer
(Principal Executive Officer)
August 7, 2020
/ s/ Jerry Cooksey
Jerry Cooksey
Chief Financial Officer
(Principal Financial Officer)



v3.20.2
Cover Page - shares
6 Months Ended
Jun. 30, 2020
Aug. 04, 2020
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Document Transition Report false  
Entity File Number 001-37391  
Entity Registrant Name Reliant Bancorp, Inc.  
Entity Incorporation, State or Country Code TN  
Entity Tax Identification Number 37-1641316  
Entity Address, Address Line One 1736 Carothers Parkway,  
Entity Address, Address Line Two Suite 100,  
Entity Address, City or Town Brentwood,  
Entity Address, State or Province TN  
Entity Address, Postal Zip Code 37027  
City Area Code 615  
Local Phone Number 221-2020  
Title of 12(b) Security Common Stock, $1.00 par value per share  
Trading Symbol RBNC  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   16,248,617
Entity Central Index Key 0001606440  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.20.2
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
ASSETS    
Cash and due from banks $ 93,838 $ 50,990
Federal funds sold 638 52
Total cash and cash equivalents 94,476 51,042
Securities available for sale 249,014 260,293
Loans and leases receivable, net amount 2,299,087 1,397,374
Mortgage loans held for sale, net   37,476
Accrued interest receivable 13,901 7,111
Premises and equipment, net 34,194 21,064
Operating leases right of use assets 15,452  
Restricted equity securities, at cost 17,509 11,279
Other real estate, net 2,514 750
Cash surrender value of life insurance contracts 67,723 46,632
Deferred tax assets, net 9,787 3,933
Goodwill 51,058 43,642
Core deposit intangibles 12,293 7,270
Other assets 23,025 10,601
TOTAL ASSETS 2,991,612 1,898,467
Deposits    
Noninterest-bearing demand 519,684 260,073
Interest-bearing demand 288,710 152,718
Savings and money market deposit accounts 771,505 408,724
Time 950,163 762,274
Total deposits 2,530,062 1,583,789
Accrued interest payable 2,918 2,022
Subordinated debentures 70,413 70,883
Federal Home Loan Bank advances 49,121 10,737
Operating lease liabilities 16,591  
Other liabilities 26,964 7,283
TOTAL LIABILITIES 2,696,069 1,674,714
Preferred stock, $1 par value; 10,000,000 shares authorized, no shares issued to date 0 0
Common stock, $1 par value; 30,000,000 shares authorized; 16,631,604 and 11,206,254 shares issued and outstanding at June 30, 2020, and December 31, 2019, respectively 16,632 11,206
Additional paid-in capital 232,436 167,006
Retained earnings 45,351 40,472
Accumulated other comprehensive income 1,124 5,069
TOTAL STOCKHOLDERS’ EQUITY 295,543 223,753
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 2,991,612 $ 1,898,467
v3.20.2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Preferred stock, par value (in dollars per share) $ 1 $ 1
Preferred stock, shares authorized (in shares) 10,000,000 10,000,000
Preferred stock, shares issued (in shares) 0 0
Common stock, par value (in dollars per share) $ 1 $ 1
Common stock, shares authorized (in shares) 30,000,000 30,000,000
Common stock, shares issued (in shares) 16,631,604 11,206,254
Common stock, shares outstanding (in shares) 16,631,604 11,206,254
v3.20.2
CONSOLIDATED STATEMENTS OF INCOME - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
INTEREST INCOME        
Interest and fees on loans $ 33,447 $ 16,960 $ 54,092 $ 33,129
Interest and fees on loans held for sale 815 198 1,375 351
Interest on investment securities, taxable 128 587 579 1,090
Interest on investment securities, nontaxable 1,317 1,650 2,688 3,368
Federal funds sold and other 208 297 487 597
TOTAL INTEREST INCOME 35,915 19,692 59,221 38,535
Deposits        
Demand 218 86 318 197
Savings and money market deposit accounts 1,531 1,051 2,506 2,181
Time 3,080 4,369 6,842 7,940
Federal Home Loan Bank advances and other 148 175 509 552
Subordinated debentures 982 198 1,975 391
TOTAL INTEREST EXPENSE 5,959 5,879 12,150 11,261
NET INTEREST INCOME 29,956 13,813 47,071 27,274
PROVISION FOR LOAN LOSSES 3,000 200 5,900 200
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 26,956 13,613 41,171 27,074
NONINTEREST INCOME        
Service charges on deposit accounts 1,381 936 2,589 1,820
Gains on mortgage loans sold, net 2,248 1,225 3,821 1,785
Gain on securities transactions, net 327 175 327 306
Gain on sale of other real estate 11 0 25 0
Gain on disposal of premises and equipment 0 0 9 0
Other 455 362 933 725
TOTAL NONINTEREST INCOME 4,422 2,698 7,704 4,636
NONINTEREST EXPENSE        
Salaries and employee benefits 12,464 7,706 21,701 14,971
Occupancy 2,026 1,358 3,512 2,710
Information technology 2,027 1,575 3,846 2,985
Advertising and public relations 228 275 581 529
Audit, legal and consulting 680 690 1,158 1,486
Federal deposit insurance 441 249 777 444
Merger expenses 2,632 1 6,818 3
Other operating 1,766 1,272 3,469 2,744
TOTAL NONINTEREST EXPENSE 22,264 13,126 41,862 25,872
INCOME BEFORE PROVISION FOR INCOME TAXES 9,114 3,185 7,013 5,838
INCOME TAX EXPENSE 1,634 501 724 873
CONSOLIDATED NET INCOME 7,480 2,684 6,289 4,965
NONCONTROLLING INTEREST IN NET LOSS OF SUBSIDIARY 388 1,555 1,364 3,098
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 7,868 $ 4,239 $ 7,653 $ 8,063
Basic net income attributable to common shareholders, per share (in dollars per share) $ 0.48 $ 0.38 $ 0.54 $ 0.71
Diluted net income attributable to common shareholders, per share (in dollars per share) $ 0.48 $ 0.38 $ 0.54 $ 0.71
v3.20.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Consolidated net income $ 7,480 $ 2,684 $ 6,289 $ 4,965
Other comprehensive income (loss)        
Net unrealized gains on available-for-sale securities, net of tax of $1,127 and $1,241 for the three months ended June 30, 2020 and 2019, respectively, and $508 and $2,962 for the six months ended June 30, 2020 and 2019, respectively 3,182 3,523 1,433 8,386
Net unrealized losses on interest rate swap derivatives net of tax of $284 and $304 or the three months ended June 30, 2020 and 2019, respectively, and $1,819 and $471for the six months ended June 30, 2020 and 2019, respectively (802)   (5,137)  
Net unrealized losses on interest rate swap derivatives net of tax of $284 and $304 or the three months ended June 30, 2020 and 2019, respectively, and $1,819 and $471for the six months ended June 30, 2020 and 2019, respectively   (861)   (1,331)
Reclassification adjustment for gains included in net income, net of tax of $86 and $46 for the three months ended June 30, 2020 and 2019, respectively, and $86 and $80 for the six months ended June 30, 2020 and 2019, respectively (241) (129) (241) (226)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) 2,139 2,533 (3,945) 6,829
TOTAL COMPREHENSIVE INCOME $ 9,619 $ 5,217 $ 2,344 $ 11,794
v3.20.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net unrealized gains (losses) on available-for-sale securities, tax $ (1,127) $ (1,241) $ (508) $ (2,962)
Net unrealized loss on interest rate swap derivatives, tax 284 304 1,819 471
Reclassification adjustment for gains included in net income, tax $ 86 $ 46 $ 86 $ 80
v3.20.2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($)
$ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
COMMON STOCK
ADDITIONAL PAID-IN CAPITAL
RETAINED EARNINGS
RETAINED EARNINGS
Cumulative Effect, Period of Adoption, Adjustment
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
NONCONTROLLING INTEREST
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Cumulative effect of lease standard adoption $ 208,414   $ 11,531 $ 173,238 $ 27,329   $ (3,684) $ 0
Balance (in shares) at Dec. 31, 2018     11,530,810          
Balance at Dec. 31, 2018 208,414   $ 11,531 173,238 27,329   (3,684) 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Stock based compensation expense 250     250        
Exercise of stock options (in shares)     2,183          
Exercise of stock options 28   $ 2 26        
Restricted stock awards (in shares)     3,000          
Restricted stock awards 0   $ 3 (3)        
Restricted stock forfeiture (in shares)     (3,750)          
Restricted stock forfeiture 1   $ (4) 4 1      
Common stock shares redeemed (in shares)     (29,958)          
Common stock shares redeemed (659)   $ (30) (629)        
Noncontrolling interest contributions 1,543             1,543
Cash dividend declared to common shareholders (1,035)       (1,035)      
Cumulative effect of lease standard adoption 215,119   $ 11,502 172,886 30,119   612 0
Net income (loss) 2,281       3,824     (1,543)
Other comprehensive income (loss) 4,296           4,296  
Balance (in shares) at Mar. 31, 2019     11,502,285          
Balance at Mar. 31, 2019 215,119   $ 11,502 172,886 30,119   612 0
Balance (in shares) at Dec. 31, 2018     11,530,810          
Balance at Dec. 31, 2018 208,414   $ 11,531 173,238 27,329   (3,684) 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Cumulative effect of lease standard adoption 213,943   $ 11,197 166,252 33,349   3,145 0
Net income (loss) 4,965              
Other comprehensive income (loss) 6,829              
Balance (in shares) at Jun. 30, 2019     11,196,563          
Balance at Jun. 30, 2019 213,943   $ 11,197 166,252 33,349   3,145 0
Balance (in shares) at Dec. 31, 2018     11,530,810          
Balance at Dec. 31, 2018 208,414   $ 11,531 173,238 27,329   (3,684) 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Cumulative effect of lease standard adoption $ 208,414 $ 100 $ 11,531 173,238 27,329 $ 100 (3,684) 0
Balance (in shares) at Dec. 31, 2019 11,206,254   11,206,254          
Balance at Dec. 31, 2019 $ 223,753 100 $ 11,206 167,006 40,472 100 5,069 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member              
Cumulative effect of lease standard adoption $ 215,119   $ 11,502 172,886 30,119   612 0
Balance (in shares) at Mar. 31, 2019     11,502,285          
Balance at Mar. 31, 2019 215,119   $ 11,502 172,886 30,119   612 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Stock based compensation expense 280     280        
Exercise of stock options (in shares)     24,523          
Exercise of stock options 323   $ 25 298        
Employee stock purchase plan stock issuance (in shares)     4,728          
Employee Stock Purchase Plan stock issuance 90   $ 5 85        
Restricted stock awards (in shares)     5,000          
Restricted stock awards 0   $ 5 (5)        
Restricted stock and dividend forfeiture (in shares)     (4,000)          
Restricted stock and dividend forfeiture 0   $ (4) 4        
Common stock shares redeemed (in shares)     (335,973)          
Common stock shares redeemed (7,632)   $ (336) (7,296)        
Noncontrolling interest contributions 1,555             1,555
Cash dividend declared to common shareholders (1,009)       (1,009)      
Cumulative effect of lease standard adoption 213,943   $ 11,197 166,252 33,349   3,145 0
Net income (loss) 2,684       4,239     (1,555)
Other comprehensive income (loss) 2,533           2,533  
Balance (in shares) at Jun. 30, 2019     11,196,563          
Balance at Jun. 30, 2019 213,943   $ 11,197 166,252 33,349   3,145 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Cumulative effect of lease standard adoption 213,943   11,197 166,252 33,349   3,145 0
Cumulative effect of lease standard adoption $ 223,753 100 $ 11,206 167,006 40,472 100 5,069 0
Balance (in shares) at Dec. 31, 2019 11,206,254   11,206,254          
Balance at Dec. 31, 2019 $ 223,753 100 $ 11,206 167,006 40,472 100 5,069 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Stock based compensation expense 349     349        
Exercise of stock options (in shares)     868          
Exercise of stock options 8   $ 1 7        
Restricted stock and dividend forfeiture (in shares)     (3,837)          
Restricted stock and dividend forfeiture (73)   $ (4) (69)        
Conversion shares issued to shareholders (in shares)     811,210          
Conversion shares issued to shareholders 18,041   $ 811 17,230        
Noncontrolling interest contributions 976             976
Cash dividend declared to common shareholders (1,207)       (1,207)      
Cumulative effect of lease standard adoption 234,672 100 $ 12,014 184,523 39,150 100 (1,015) 0
Net income (loss) (1,191)       (215)     (976)
Other comprehensive income (loss) (6,084)           (6,084)  
Balance (in shares) at Mar. 31, 2020     12,014,495          
Balance at Mar. 31, 2020 $ 234,672   $ 12,014 184,523 39,150   (1,015) 0
Balance (in shares) at Dec. 31, 2019 11,206,254   11,206,254          
Balance at Dec. 31, 2019 $ 223,753 100 $ 11,206 167,006 40,472 100 5,069 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Exercise of stock options (in shares) 1,889              
Cumulative effect of lease standard adoption $ 295,543 $ 100 $ 16,632 232,436 45,351 $ 100 1,124 0
Net income (loss) 6,289              
Other comprehensive income (loss) $ (3,945)              
Balance (in shares) at Jun. 30, 2020 16,631,604   16,631,604          
Balance at Jun. 30, 2020 $ 295,543   $ 16,632 232,436 45,351   1,124 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Cumulative effect of lease standard adoption 234,672   $ 12,014 184,523 39,150   (1,015) 0
Balance (in shares) at Mar. 31, 2020     12,014,495          
Balance at Mar. 31, 2020 234,672   $ 12,014 184,523 39,150   (1,015) 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Stock based compensation expense 485     485        
Exercise of stock options (in shares)     1,021          
Exercise of stock options 15   $ 1 14        
Employee stock purchase plan stock issuance (in shares)     8,344          
Employee Stock Purchase Plan stock issuance 116   $ 8 108        
Restricted stock awards (in shares)     3,022          
Restricted stock awards 0   $ 3 (3)        
Restricted stock and dividend forfeiture (in shares)     (1,697)          
Restricted stock and dividend forfeiture 0   $ (1) 1        
Conversion shares issued to shareholders (in shares)     4,606,419          
Conversion shares issued to shareholders 51,915   $ 4,607 47,308        
Noncontrolling interest contributions 388             388
Cash dividend declared to common shareholders (1,667)       (1,667)      
Cumulative effect of lease standard adoption 295,543   $ 16,632 232,436 45,351   1,124 0
Net income (loss) 7,480       7,868     (388)
Other comprehensive income (loss) $ 2,139           2,139  
Balance (in shares) at Jun. 30, 2020 16,631,604   16,631,604          
Balance at Jun. 30, 2020 $ 295,543   $ 16,632 232,436 45,351   1,124 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Cumulative effect of lease standard adoption $ 295,543   $ 16,632 $ 232,436 $ 45,351   $ 1,124 $ 0
v3.20.2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares
3 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]        
Cash dividends declared to common shareholders (in dollars per share) $ 0.10 $ 0.10 $ 0.09 $ 0.09
v3.20.2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
OPERATING ACTIVITIES    
Consolidated net income $ 6,289 $ 4,965
Adjustments to reconcile consolidated net income to net cash provided (used) by operating activities    
Provision for loan losses 5,900 200
Deferred income taxes 1,997 1,880
Gain on disposal of premises and equipment (9) 0
Depreciation and amortization of premises and equipment 1,327 991
Net amortization of securities 1,354 1,586
Net realized gains on sales of securities (327) (306)
Gains on mortgage loans sold, net (3,821) (1,785)
Stock-based compensation expense 834 530
Gain on other real estate (25) 0
Increase in cash surrender value of life insurance contracts (687) (555)
Mortgage loans originated for resale (184,146) (57,816)
Proceeds from sale of mortgage loans 129,742 63,853
Other accretion, net of other amortization (4,184) (380)
Accrued interest receivable (3,457) 968
Other assets (10,478) (3,202)
Accrued interest payable (1,352) (96)
Other liabilities 2,323 (4,389)
TOTAL ADJUSTMENTS (65,009) 1,479
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (58,720) 6,444
INVESTING ACTIVITIES    
Cash used to convert shares, and redeem stock options and fractional shares, net of cash received (8,500) 0
Activities in available for sale securities    
Purchases (6,000) (41,083)
Sales 103,668 52,434
Maturities, prepayments and calls 9,635 5,418
(Redemptions) purchases of restricted equity securities (2,009) 202
Net increase in loans (108,983) (81,026)
Purchase of buildings, leasehold improvements, and equipment (2,566) (590)
Proceeds from sale of premises and equipment 90 0
Proceeds from sale of other real estate 889 0
NET CASH (USED IN) INVESTING ACTIVITIES (13,776) (64,645)
FINANCING ACTIVITIES    
Net change in deposits 128,110 112,388
Net change in other borrowings acquired from merger (58) 0
Net change in advances from Federal Home Loan Bank (10,617) (46,352)
Issuance of common stock, net of repurchase of restricted shares 0 351
Issuance of common stock related to exercise of stock options and ESPP 139 90
Redemption of common stock to settle tax liability on restricted stock (73) (8,291)
Noncontrolling interest contributions received 1,364 2,905
Cash dividends paid on common stock (2,935) (2,071)
NET CASH PROVIDED BY FINANCING ACTIVITIES 115,930 59,020
NET CHANGE IN CASH AND CASH EQUIVALENTS 43,434 819
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 51,042 35,178
CASH AND CASH EQUIVALENTS - END OF PERIOD 94,476 35,997
Cash paid during the period for    
Interest 12,382 11,357
Taxes 31 536
Non-cash investing and financing activities    
Unrealized gain on securities available-for-sale 2,745 12,099
Unrealized gain (loss) on derivatives 8,087 (2,859)
Change in due to/from noncontrolling interest 1,364 3,098
Acquired bank facilities no longer in use transferred to other real estate owned and foreclosed assets from premises and equipment 2,420 0
Loans foreclosed and transferred to other real estate owned and foreclosed assets $ 0 $ 848
v3.20.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Reliant Bancorp, Inc. conform to accounting principles generally accepted in the United States of America ("U.S. GAAP") and to general practices within the banking industry. The following is a brief summary of the significant policies.

Nature of Operations

Reliant Bancorp, Inc. is a Tennessee corporation and the holding company for and the sole shareholder of Reliant Bank. Reliant Bancorp is registered as a financial holding company under the Bank Holding Company Act of 1956, as amended ("Bank Holding Company Act"). Reliant Bank is a commercial bank chartered under Tennessee law and a member of the Federal Reserve System (the "Federal Reserve"). Reliant Bank, Reliant Bancorp's wholly-owned bank subsidiary, provides a full range of traditional banking products and services to business and consumer clients throughout Middle Tennessee and the Nashville-Davidson-Murfreesboro-Franklin, TN Metropolitan Statistical Area (the “Nashville MSA”) and Chattanooga, Tennessee. Reliant Bank operates banking centers in Cheatham, Davidson, Hamilton, Hickman, Maury, Montgomery, Robertson, Rutherford, Sumner, and Williamson counties, Tennessee. Additionally, Reliant Bank operates mortgage offices in Brentwood, Chattanooga, Hendersonville, and Memphis, Tennessee, as well as two in Little Rock and one in Crossett, Arkansas. On January 1, 2020, TCB Holdings, a community banking organization headquartered in Ashland City, Tennessee, was merged with and into Reliant Bancorp. On April 1, 2020, First Advantage Bancorp, a community banking organization headquartered in Clarksville, Tennessee, was merged with and into Reliant Bancorp (See Note 12).

Reliant Risk Management, Inc., a newly-formed, wholly-owned insurance captive subsidiary of Reliant Bancorp, Inc. that began operations on June 1, 2020, is a Tennessee-based captive insurance company which insures Reliant Bancorp and the Bank against certain risks unique to their operations and for which insurance may not be currently available or economically feasible in today's insurance marketplace. Reliant Risk Management, Inc. pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. Reliant Risk Management, Inc. is subject to regulations of the State of Tennessee and undergoes periodic examinations by the Tennessee Department of Commerce and Insurance.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Quarterly Report on Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with U.S. GAAP.  All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by the report have been included.  The accompanying unaudited consolidated financial statements should be read in conjunction with Reliant Bancorp, Inc.’s consolidated financial statements and related notes appearing in Reliant Bancorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019.

The consolidated financial statements as of and for the periods presented include the accounts of Reliant Bancorp, Inc., Reliant Bank (the "Bank"), Community First Trups Holding Company ("TRUPS"), which is wholly owned by Reliant Bancorp, Inc., Reliant Risk Management, Inc. ("Risk"), which is wholly owned by Reliant Bancorp Inc., Reliant Investment Holdings, LLC ("Holdings"), which is wholly owned by the Bank, and Reliant Mortgage Ventures, LLC ("RMV"), of which the Bank controls 51% of the governance rights. Reliant Bancorp Inc., the Bank, TRUPS, Risk, Holdings, and RMV are collectively referred to herein as the “Company”. All significant inter-company balances and transactions have been eliminated in consolidation. As described in Note 12 to these unaudited consolidated financial statements, Reliant Bancorp, Inc. and TCB Holdings merged effective on January 1, 2020, and Reliant Bancorp, Inc. and FABK merged effective April 1, 2020. The accounting and reporting policies of the Company conform to U.S. GAAP and general practices in the banking industry.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to significant change in the near term relate to determination of the allowance for loan losses, the valuation of other real estate, the valuation of debt and equity securities, the valuation of deferred tax assets and fair values of financial instruments.

The consolidated financial statements as of June 30, 2020, and for the three and six months ended June 30, 2020 and 2019, included herein have not been audited. The accounting and reporting policies of the Company conform to U.S. GAAP and Article 8 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures made are adequate to make the information not misleading.

The accompanying consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the interim periods presented. Such adjustments are of a normal recurring nature. The Company evaluates subsequent events through the date of filing. Certain prior period amounts have been reclassified to conform to the current period presentation. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.


Recently Adopted Accounting Pronouncements

Information about certain issued accounting standards updates is presented below. Also refer to Note 1 - Summary of Significant Accounting Policies, “Recent Authoritative Accounting Guidance” in the Annual Report on Form 10-K for the year ended December 31, 2019 for additional information related to previously issued accounting standards updates.

ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 went into effect for the Company on January 1, 2020 and the Company elected the prospective application approach provided by ASU 2018-11 and did not adjust prior periods for ASC 842. The Company also elected certain practical expedients within the standard and consistent with such elections did not reassess whether any expired or existing contracts are or contain leases, did not reassess the lease classification for any expired or existing leases, and did not reassess any initial direct costs for existing leases. The effect of implementing this pronouncement resulted in right to use assets of $11,973 and a similar corresponding liability, as of January 1, 2020.

ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." In March 2020, the FASB issued Topic 848 amendments to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Company has evaluated the effect of the pronouncement on the consolidated financial statements, noting no significant impact.


Newly Issued not yet Effective Accounting Standards

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is expected to be effective on January 1, 2023. We are currently evaluating the potential impact of ASU 2016-13 on the Company's financial statements. We are currently developing an implementation plan to include assessment of processes, portfolio segmentation, model development, system requirements and the identification of data and resource needs, among other things. The adoption of ASU 2016-13 could result in an increase in the allowance for loan losses as a result of changing from an “incurred loss” model, which encompasses
allowances for current known and inherent losses within the portfolio, to an “expected loss” model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore, ASU 2016-13 will necessitate that we establish an allowance for expected credit losses for certain debt securities and other financial assets. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Financial Instruments - Credit Losses (ASC 326), Derivatives and Hedging (ASC 815), and Financial Instruments (ASC 825). The amendments in this ASU improve the codification by eliminating inconsistencies and providing clarifications. The amended guidance in this ASU related to credit losses will be effective for the Company for fiscal years and interim periods beginning after December 15, 2022. The Company is currently evaluating the impact of these ASUs on the Company’s consolidated financial statements. While we are currently unable to reasonably estimate the impact of adopting these ASUs, we expect that the impact of adoption will be significantly influenced by the composition, characteristics and quality of the Company's loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date.

ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for the Company on January 1, 2021, with earlier adoption permitted and is not currently expected to have a significant impact on the Company's consolidated financial statements as it simplifies the test of impairment of goodwill.
v3.20.2
Securities
6 Months Ended
Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
SECURITIES SECURITIES
The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income at June 30, 2020 and December 31, 2019 were as follows:
June 30, 2020
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
U. S. Treasury and other U. S. government agencies$54  $ $—  $55  
State and municipal171,979  13,865  (118) 185,726  
Corporate bonds11,250  99  (83) 11,266  
Mortgage-backed securities 37,624  350  (1,531) 36,443  
Asset-backed securities15,791  —  (267) 15,524
Total$236,698  $14,315  $(1,999) $249,014  

December 31, 2019
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
U. S. Treasury and other U. S. government agencies$59  $—  $—  $59  
State and municipal186,283  10,413  (36) 196,660  
Corporate bonds7,880  97  (132) 7,845  
Mortgage-backed securities 38,126  296  (661) 37,761  
Asset-backed securities18,374  —  (406) 17,968  
Total$250,722  $10,806  $(1,235) $260,293  

Securities pledged at June 30, 2020 and December 31, 2019 had a carrying amount of $43,972 and $46,918, respectively, and were pledged to collateralize Federal Home Loan Bank ("FHLB") advances, Federal Reserve Bank ("FRB") advances and municipal deposits.
The fair values of available for sale debt securities at June 30, 2020 by contractual maturity are provided below. Actual maturities may differ from contractual maturities for mortgage- and asset-backed securities since the underlying asset may be called or prepaid with or without penalty. Securities not due at a single maturity date are shown separately.
Amortized
Cost
Estimated
Fair Value
Due within one year$500  $498  
Due in one to five years2,179  2,180  
Due in five to ten years14,693  15,379  
Due after ten years165,911  178,990  
Mortgage-backed securities37,624  36,443  
Asset-backed securities15,791  15,524  
Total$236,698  $249,014  

The following table shows available for sale securities with unrealized losses and their estimated fair value aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019, respectively:
Less than 12 months12 months or moreTotal
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
June 30, 2020
State and municipal$1,879  $118  $—  $—  $1,879  $118  
Corporate bonds4,669  81  499   5,168  83  
Mortgage-backed securities 15,045  822  12,250  709  27,295  1,531  
Asset-backed securities821   14,633  266  15,454  267  
Total temporarily impaired$22,414  $1,022  $27,382  $977  $49,796  $1,999  

December 31, 2019
State and municipal$1,960  $36  $—  $—  $1,960  $36  
Corporate bonds—  —  2,499  132  2,499  132  
Mortgage-backed securities 16,104  286  9,081  375  25,185  661  
Asset-backed securities—  —  17,682  406  17,682  406  
Total temporarily impaired$18,064  $322  $29,262  $913  $47,326  $1,235  

Management has the intent and ability to hold all securities in an unrealized loss position for the foreseeable future, and the decline in fair value is largely due to changes in interest rates. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. There were 37 and 47 securities in an unrealized loss position as of June 30, 2020 and December 31, 2019, respectively.
v3.20.2
Loans and Allowance for Loan Losses
1 Months Ended
Jul. 29, 2020
Receivables [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES LOANS AND ALLOWANCE FOR LOAN LOSSES
Loans at June 30, 2020 and December 31, 2019 were comprised as follows:
June 30,
2020
December 31, 2019
Commercial, Industrial and Agricultural$452,628  $245,515  
Real Estate
    1-4 Family Residential360,908  227,529  
    1-4 Family HELOC85,050  96,228  
    Multi-family and Commercial883,751  536,845  
    Construction, Land Development and Farmland337,459  273,872  
Consumer195,510  16,855  
Other7,203  13,180  
Total2,322,509  1,410,024  
Less
    Deferred loan fees 5,185  72  
    Allowance for loan losses18,237  12,578  
Loans, net$2,299,087  $1,397,374  

Activity in the allowance for loan losses by portfolio segment was as follows for the six months ended June 30, 2020 and June 30, 2019, respectively:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Beginning balance at December 31, 2019$2,529  $5,285  $2,649  $1,280  $624  $177  $34  $12,578  
Charge-offs(539) —  (114) (60) (98) (295) —  (1,106) 
Recoveries70  11   747   30  —  865  
Provision2,615  3,111  (413) (513) 446  672  (18) 5,900  
Ending balance at
June 30, 2020
$4,675  $8,407  $2,126  $1,454  $975  $584  $16  $18,237  

Beginning balance at December 31, 2018$1,751  $4,429  $2,500  $1,333  $656  $184  $39  $10,892  
Charge-offs(168) —  —  (17) —  (21) (13) (219) 
Recoveries294  59  201  216  11  12  —  793  
Provision 225   (77) 19  13  10  200  
Ending balance at
June 30, 2019
$1,881  $4,713  $2,707  $1,455  $686  $188  $36  $11,666  
The allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2020 were as follows:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Allowance for loan losses
Individually evaluated for impairment$818  $—  $—  $—  $—  $—  $—  $818  
Acquired with credit impairment—  —  —  —  —  —  —  —  
Collectively evaluated for impairment 3,857  8,407  2,126  1,454  975  58416  17,419  
Total$4,675  $8,407  $2,126  $1,454  $975  $584  $16  $18,237  
Loans
Individually evaluated for impairment$1,218  $2,667  $1,817  $1,474  $318  $—  $—  $7,494  
Acquired with credit impairment441  1,341  796  1,005  14  1,326  —  4,923  
Collectively evaluated for impairment 450,969  879,743  334,846  358,429  84,718  194,1847,203  2,310,092  
Total$452,628  $883,751  $337,459  $360,908  $85,050  $195,510  $7,203  $2,322,509  
 
The allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2019 were as follows:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Allowance for loan losses
Individually evaluated for impairment$755  $—  $17  $—  $—  $—  $—  $772  
Acquired with credit impairment—  —  —  —  —  —  —  —  
Collectively evaluated for impairment 1,774  5,285  2,632  1,280  624  177  34  11,806  
Total$2,529  $5,285  $2,649  $1,280  $624  $177  $34  $12,578  
Loans
Individually evaluated for impairment$1,154  $2,396  $1,218  $1,120  $374  $—  $—  $6,262  
Acquired with credit impairment—  215  813  195  —  —  —  1,223  
Collectively evaluated for impairment 244,361  534,234  271,841  226,214  95,854  16,855  13,180  1,402,539  
Total$245,515  $536,845  $273,872  $227,529  $96,228  $16,855  $13,180  $1,410,024  
Risk characteristics relevant to each portfolio segment are as follows:

Commercial, industrial and agricultural: The commercial, industrial and agricultural loan portfolio segment includes loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other expansion projects. Collection risk in this portfolio is driven by the creditworthiness of underlying borrowers, particularly cash flow from customers’ business operations. Commercial, industrial and agricultural loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial and industrial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis.

Multi-family and commercial real estate: Multi-family and commercial real estate loans are subject to underwriting standards and processes similar to commercial, industrial and agricultural loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.

Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties comprising the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting the market areas it serves. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. Non-owner occupied commercial real estate loans are loans secured by multifamily and commercial properties where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property.

These loans are made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail properties. Owner-occupied commercial real estate loans are loans where the primary source of repayment is the cash flow from the ongoing operations and business activities conducted by the party, or an affiliate of the party, who owns the property.

Construction and land development: Loans for non-owner-occupied real estate construction or land development are generally repaid through cash flow related to the operation, sale or refinance of the property. The Company also finances construction loans for owner-occupied properties. A portion of the Company’s construction and land development portfolio segment is comprised of loans secured by residential product types (residential land and single-family construction). With respect to construction loans to developers and builders that are secured by non-owner occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates, market sales activity, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

        
1-4 family residential real estate: Residential real estate loans, which include related manufactured homes with real estate, represent loans to consumers or investors to finance a residence. These loans are typically financed on 15- to 30-year amortization terms, but generally with shorter maturities of 5 to 15 years. Many of these loans are extended to borrowers to finance their primary or secondary residence. Loans to an investor secured by a 1-4 family residence will be repaid from either the rental income from the property or from the sale of the property. This loan segment also includes closed-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home. Loans in this portfolio segment are underwritten and approved based on a number of credit quality criteria including limits on maximum Loan-to-Value ("LTV"), minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these market values impact the depth of potential losses in this portfolio segment.

1-4 family HELOC: This loan segment includes open-end home equity loans that are secured by a first or second mortgage on the borrower’s residence. This allows customers to borrow against the equity in their home utilizing a revolving line of credit. These loans are underwritten and approved based on a number of credit quality criteria including limits on maximum LTV, minimum credit scores, and maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these market values impact the depth of potential losses in this portfolio segment. Because of the revolving nature of these loans as well as the fact that many represent second mortgages, this portfolio segment can contain more risk than the amortizing 1-4 family residential real estate loans.

Consumer: The consumer loan portfolio segment includes non-real estate secured direct loans to consumers for household, family, and other personal expenditures as well as manufactured homes without real estate. Consumer loans may be secured or unsecured and are usually structured with short or medium term maturities. These loans are underwritten and approved based on a number of consumer credit quality criteria including limits on maximum LTV on secured consumer loans, minimum credit scores, and maximum debt to income. Many traditional forms of consumer installment credit have standard monthly payments and fixed repayment schedules of one to five years. These loans are made with either fixed or variable interest rates that are based on specific indices. Loans to finance manufactured homes that are not secured by real estate are classified as consumer loans and have standard monthly payments and fixed repayment schedules of 15 to 23 years. Installment loans fill a variety of needs, such as financing the purchase of an automobile, a boat, a recreational vehicle, or other large personal items, or for consolidating debt. These loans may be unsecured or secured by an assignment of title, as in an automobile loan, or by money in a bank account. In addition to consumer installment loans, this portfolio segment also includes secured and unsecured personal lines of credit as well as overdraft protection lines. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.

Non-accrual loans by class of loan were as follows at June 30, 2020 and December 31, 2019:
June 30, 2020December 31, 2019
Commercial, Industrial and Agricultural$928  $572  
Multi-family and Commercial Real Estate2,711  1,276  
Construction, Land Development and Farmland412  555  
1-4 Family Residential Real Estate1,468  1,344  
1-4 Family HELOC241  296  
Consumer1,781  28  
Total$7,541  $4,071  

Performing non-accrual loans totaled $2,392 and $1,332 at June 30, 2020 and December 31, 2019, respectively.
Individually impaired loans by class of loans were as follows at June 30, 2020:
Unpaid
Principal
Balance
Recorded
Investment
with no
Allowance for Loan Losses
Recorded
Recorded
Investment
with
Allowance for Loan Losses
Recorded
Total
Recorded
Investment
Related
Allowance for Loan Losses
Commercial, Industrial and Agricultural$2,845  $670  $989  $1,659  $818  
Multi-family and Commercial Real Estate5,691  4,008  —  4,008  —  
Construction, Land Development and Farmland3,081  2,613  —  2,613  —  
1-4 Family Residential Real Estate3,121  2,479  —  2,479  —  
1-4 Family HELOC438  332  —  332  —  
Consumer3,132  1,326  —  1,326  —  
Total $18,308  $11,428  $989  $12,417  $818  

Individually impaired loans by class of loans were as follows at December 31, 2019:
Unpaid
Principal
Balance
Recorded
Investment
with no
Allowance for Loan Losses
Recorded
Recorded
Investment
with
Allowance for Loan Losses
Recorded
Total
Recorded
Investment
Related
Allowance for Loan Losses
Commercial, Industrial and Agricultural$1,154  $—  $1,154  $1,154  $755  
Multi-family and Commercial Real Estate2,624  2,611  —  2,611  —  
Construction, Land Development and Farmland2,348  1,860  171  2,031  17  
1-4 Family Residential Real Estate1,419  1,315  —  1,315  —  
1-4 Family HELOC376  374  —  374  —  
Total $7,921  $6,160  $1,325  $7,485  $772  

The average balances of impaired loans for the six months ended June 30, 2020 and 2019 were as follows:
20202019
Commercial, Industrial and Agricultural$1,200  $791  
Multi-family and Commercial Real Estate3,076  2,548  
Construction, Land Development and Farmland2,017  2,747  
1-4 Family Residential Real Estate1,915  1,639  
1-4 Family HELOC380  99  
Consumer448  11  
Total $9,036  $7,835  
The Company utilizes a risk grading system to monitor the credit quality of the Company’s commercial loan portfolio which consists of commercial, industrial and agricultural, commercial real estate and construction loans. Loans are graded on a scale of 1 to 9. Grades 1 to 5 are pass credits, grade 6 is special mention, grade 7 is substandard, grade 8 is doubtful and grade 9 is loss. A description of the risk grades are as follows:

        Grade 1 - Minimal Risk (Pass)
This grade includes loans to borrowers with a strong financial position and history of profits and cash flows sufficient to service the debt. These borrowers have well defined sources of primary/secondary repayment, conservatively leveraged balance sheets and the ability to access a wide range of financing alternatives. Collateral securing these loans is negotiable, of sufficient value and in possession of the Company. Risk of loss is unlikely.

        Grade 2 - High Quality (Pass)
This grade includes loans to borrowers with a strong financial condition reflecting dependable net profits and cash flows. The borrower has verifiable liquid net worth providing above average asset protection. An identifiable market exists for the collateral. Risk of loss is unlikely.

        Grade 3 - Above Average (Pass)
This grade includes loans to borrowers with a balance sheet that reflects a comfortable degree of leverage and liquidity. Borrowers are profitable and have a sustained record of servicing debt. An identifiable market exists for the collateral, but liquidation could take up to one year. Risk of loss is unlikely.

        Grade 4 - Average (Pass)
This grade includes loans to borrowers with a financial condition that is satisfactory and comparable to industry standards. The borrower has verifiable net worth, providing over time average asset protection. The borrower's cash flows are sufficient to satisfy debt service requirements. Risk of loss is below average.

        Grade 5 - Acceptable (Management Attention) (Pass)
This grade includes loans to borrowers whose loans are performing, but sources of repayment are not documented by the current credit analysis. There are some declining trends in margins, ratios and/or cash flow. Guarantor(s) have strong net worth(s), but assets may be concentrated in real estate or other illiquid investments. Risk of loss is average.

        Grade 6 - Special Mention
Special mention assets have potential weaknesses that may, if not checked or corrected, weaken the asset or inadequately protect the Company’s position at some future date. These assets pose elevated risk, but their weakness does not yet justify a substandard classification. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Nonfinancial reasons for rating a credit exposure special mention include management problems, pending litigation, an ineffective loan agreement or other material structural weakness, and any other significant deviation from prudent lending practices. The special mention rating is designed to identify a specific level of risk and concern about asset quality. Although a special mention asset has a higher probability of default than a pass asset, its default is not imminent.

        Grade 7 - Substandard
A ‘‘substandard’’ extension of credit is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Extensions of credit so classified should have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard credits, does not have to exist in individual extensions of credit classified substandard. Substandard assets have a high probability of payment default, or they have other well-defined weaknesses. They require more intensive supervision by Company management. Substandard assets are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigation.

        
Grade 8 - Doubtful
An extension of credit classified ‘‘doubtful’’ has all the weaknesses inherent in one classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage of and strengthen the credit, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceedings, capital injection, perfecting liens on additional collateral, or refinancing plans. Generally, the doubtful classification should not extend for a long period of time because in most cases the pending factors or events that warranted the doubtful classification should be resolved either positively or negatively in a reasonable period of time.

        Grade 9 - Loss
Extensions of credit classified ‘‘loss’’ are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Amounts classified loss should be promptly charged off. The Company will not attempt long term recoveries while the credit remains on the Company’s books. Losses should be taken in the period in which they surface as uncollectible. With loss assets, the underlying borrowers are often in bankruptcy, have formally suspended debt repayments, or have otherwise ceased normal business operations. Once an asset is classified loss, there is little prospect of collecting either its principal or interest.

Non-commercial purpose loans are initially assigned a default loan grade of 99 (Pass) and are risk graded (Grade 6, 7, or 8) according to delinquency status when applicable.

Credit quality indicators by class of loan were as follows at June 30, 2020:
PassSpecial
Mention
SubstandardTotal
Commercial, Industrial and Agricultural$448,744  $1,551  $2,333  $452,628  
1-4 Family Residential Real Estate357,377  115  3,416  360,908  
1-4 Family HELOC84,718  —  332  85,050  
Multi-family and Commercial Real Estate877,359  705  5,687  883,751  
Construction, Land Development and Farmland335,771  —  1,688  337,459  
Consumer 192,837   2,664  195,510  
Other5,683  1,520  —  7,203  
Total $2,302,489  $3,900  $16,120  $2,322,509  

Credit quality indicators by class of loan were as follows at December 31, 2019:
PassSpecial
Mention
SubstandardTotal
Commercial, Industrial and Agricultural$241,089  $2,382  $2,044  $245,515  
1-4 Family Residential Real Estate225,809  —  1,720  227,529  
1-4 Family HELOC95,678  —  550  96,228  
Multi-family and Commercial Real Estate531,055  1,519  4,271  536,845  
Construction, Land Development and Farmland272,440  —  1,432  273,872  
Consumer 16,634  —  221  16,855  
Other13,180  —  —  13,180  
Total $1,395,885  $3,901  $10,238  $1,410,024  
Past due status by class of loan was as follows at June 30, 2020:
30-59 Days
Past Due
60-89 Days
Past Due
90+ Days
Past Due
Total
Past Due
CurrentTotal Loans
Commercial, Industrial and Agricultural$600  $ $490  $1,095  $451,533  $452,628  
1-4 Family Residential Real Estate790  760  483  2,033  358,875  360,908  
1-4 Family HELOC—  —  198  198  84,852  85,050  
Multi-family and Commercial Real Estate—  —  2,166  2,166  881,585  883,751  
Construction, Land Development and Farmland411  569  225  1,205  336,254  337,459  
Consumer 407  326  913  1,646  193,864  195,510  
Other—  —  —  —  7,203  7,203  
Total$2,208  $1,660  $4,475  $8,343  $2,314,166  $2,322,509  

Past due status by class of loan was as follows at December 31, 2019:
30-59 Days
Past Due
60-89 Days
Past Due
90+ Days
Past Due
Total
Past Due
CurrentTotal Loans
Commercial, Industrial and Agricultural$79  $ $572  $655  $244,860  $245,515  
1-4 Family Residential Real Estate501  236  229  966  226,563  227,529  
1-4 Family HELOC—  —  296  296  95,932  96,228  
Multi-family and Commercial Real Estate485  —  558  1,043  535,802  536,845  
Construction, Land Development and Farmland255  —  339  594  273,278  273,872  
Consumer 38  26  64  128  16,727  16,855  
Other—  —  —  —  13,180  13,180  
Total$1,358  $266  $2,058  $3,682  $1,406,342  $1,410,024  

There were no loans past due 90 days or more and still accruing interest at June 30, 2020. However, credit card balances totaling $8 were past due 90 days or more and still accruing interest. At December 31, 2019, there was one loan totaling $64 past due 90 days or more and still accruing interest.

Mortgage loans held for sale of $101,579 are excluded from the loans and allowance tables herein. While the majority of this balance is current, loans past due 30-59 days are $3,270 and $184 as of June 30, 2020 and December 31, 2019, respectively. No mortgage loans held for sale were past due 60 days or more as of June 30, 2020 or December 31, 2019, respectively.

The following table presents loans by class modified as troubled debt restructurings ("TDRs") during the first six months of 2020. There were no loans that were modified as TDRs during the six months ended June 30, 2019.
Number of ContractsPre-Modification Outstanding Recorded InvestmentsPost-Modification Outstanding Recorded Investments
June 30, 2020
Commercial, Industrial and Agricultural $150  $150  
Multi-family and Commercial Real Estate 721  721  
1-4 Family Residential 394  394  
Total $1,265  $1,265  

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, and subsequent regulatory guidance provide that financial institutions may elect to account for certain loan modifications due to COVID-19 as not TDRs. The Company had applied this guidance to approve initial modifications in April and May 2020 for
loans with principal balances of $530.7 million. The majority of these modifications were for a period of up to three months and contained either interest-only periods or full payment deferrals. Through August 5, 2020, further modifications were approved for $39.0 million of the loans previously modified. Additional modifications of these loans are likely to be executed in the third quarter of 2020.

The CARES Act provides over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to administer new loan programs including, but not limited to, the guarantee of loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). Upon completion of the FABK Transaction as disclosed in Note 12, we assumed their qualified SBA lender status. The Company originated $83.3 million of PPP loans in the second quarter of 2020 which are included in the commercial, industrial, and agricultural segment.

The Company has acquired loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding balance and carrying amount of the purchased credit impaired loans were as follows at June 30, 2020 and December 31, 2019:

June 30, 2020December 31, 2019
Commercial, Industrial and Agricultural$1,192  $—  
Multi-family and Commercial Real Estate2,372  217  
Construction, Land Development and Farmland1,012  1,021  
1-4 Family Residential Real Estate1,314  231  
1-4 Family HELOC18  —  
Consumer2,416  —  
Total outstanding balance8,324  1,469  
Less remaining purchase discount3,401  246  
Allowance for loan losses—  —  
Carrying amount, net of allowance for loan losses and remaining purchase discounts$4,923  $1,223  

Activity related to the accretable portion of the purchase discount on loans acquired with deteriorated credit quality is as follows for the six months ended June 30, 2020 and 2019:
20202019
Balance at January 1,$98  $110  
New loans purchased870  —  
Year-to-date settlements(80) (7) 
Balance at June 30,$888  $103  
v3.20.2
Other Real Estate
6 Months Ended
Jun. 30, 2020
Other Real Estate [Abstract]  
OTHER REAL ESTATE OTHER REAL ESTATEAt June 30, 2020, and December 31, 2019, the Company held other real estate recorded at a value of $2,514 and $750, respectively, which represents fair value less costs to sell. The June 30, 2020 balance included retired bank facilities of $2,420 and two manufactured housing properties valued at $94. These residential properties were part of the four properties valued at $208 added through the acquisition of First Advantage Bank in the second quarter of 2020. During the three months ended June 30, 2020, the Company sold two of these properties resulting in a gain on sale of $11. Additionally, at June 30, 2020, there were three real estate loans with related balances totaling $320 in the process of foreclosure. Of the two retired bank facilities no longer in use, one sold as of July 31, 2020. Expenses related to other real estate totaled $4 for the three and six months ended June 30, 2020, respectively.
v3.20.2
Fair Values of Assets and Liabilities
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
FAIR VALUES OF ASSETS AND LIABILITIES FAIR VALUES OF ASSETS AND LIABILITIES
 
Financial accounting standards relating to fair value measurements establish a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2 Inputs to the valuation methodology include:

Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability; and
Inputs that are derived principally from or corroborated by the observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 Inputs to the valuation methodology are unobservable and reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis:

Securities available for sale: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The Company obtains fair value measurements for securities available for sale from an independent pricing service. The fair value measurements consider observable data that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, cash flows and reference data, including market research publications, among other things.

        Interest rate swaps: The fair values of interest rate swaps are determined based on discounted future cash flows.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Assets and liabilities measured at fair value on a nonrecurring basis include the following:

Impaired Loans: The fair value of an impaired loan with specific allocations of the allowance for loan losses is generally based on the present value of expected payments using the loan’s effective rate as the discount rate or recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.
Other Real Estate: The fair value of other real estate is generally based on recent real estate appraisals less estimated disposition cost. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in Level 3 classification of the inputs for determining fair value.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company’s valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

The following table sets forth the Company’s major categories of assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy, as of June 30, 2020 and December 31, 2019:

Fair ValueQuoted
Prices in
Active
Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
June 30, 2020
Assets
U. S. Treasury and other U. S. government agencies $55  $—  $55  $—  
State and municipal185,726  —  185,726  —  
Corporate bonds11,266  —  11,266  —  
Mortgage backed securities 36,443  —  36,443  —  
Asset backed securities15,524  —  15,524  —  
Liabilities
Derivative liabilities$10,795  $—  $10,795  $—  
December 31, 2019
Assets
U. S. Treasury and other U. S. government agencies $59  $—  $59  $—  
State and municipal196,660  —  196,660  —  
Corporate bonds7,845  —  7,845  —  
Mortgage backed securities 37,761  —  37,761  —  
Asset backed securities17,968  —  17,968  —  
Derivative assets688  —  688  —  
Liabilities
Derivative liabilities$3,396  $—  $3,396  $—  
The following table sets forth the Company’s major categories of assets and liabilities measured at fair value on a nonrecurring basis, by level within the fair value hierarchy, as of June 30, 2020 and December 31, 2019:

Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
June 30, 2020    
Assets    
Impaired loans$171  $—  $—  $171  
Other real estate2,514  —  —  2,514  
Other repossessions1,508  —  —  1,508  
December 31, 2019    
Assets    
Impaired loans$553  $—  $—  $553  
Other real estate750—  —  750  
Other repossessions—  —  —  


The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at June 30, 2020 and December 31, 2019:
Valuation
Techniques (1)
Significant
Unobservable Inputs
Range
(Weighted Average)
Impaired loansAppraisalEstimated costs to sell10%
Other real estateAppraisalEstimated costs to sell10%
Other repossessionsThird-party guidelinesEstimated costs to sell10%
(1)The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent. Estimated cash flows change and appraised values of the assets or collateral underlying the loans will be sensitive to changes.
Carrying amounts and estimated fair values of financial instruments not reported at fair value at June 30, 2020 and December 31, 2019 were as follows:
June 30, 2020Carrying
Amount
Estimated
Fair
Value
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Financial assets
Cash and due from banks$93,838  $93,838  $93,838  $—  $—  
Federal funds sold638  638  —  638  —  
Loans, net2,299,087  2,297,086  —  —  2,297,086  
Mortgage loans held for sale101,579  102,531  —  102,531  —  
Accrued interest receivable13,901  13,901  —  13,901  —  
Restricted equity securities17,509  17,509  —  17,509  —  
Financial liabilities
Deposits$2,530,062  $2,537,890  $—  $—  $2,537,890  
Accrued interest payable2,918  2,918  —  2,918  —  
Subordinate debentures70,413  67,543  —  —  67,543  
Federal Home Loan Bank advances49,121  49,552  —  —  49,552  

December 31, 2019
Financial assets
Cash and due from banks$50,990  $50,990  $50,990  $—  $—  
Federal funds sold52  52  —  52  —  
Loans, net1,397,374  1,383,719  —  —  1,383,719  
Mortgage loans held for sale37,476  38,379  —  38,379  —  
Accrued interest receivable7,111  7,111  —  7,111  —  
Restricted equity securities11,279  11,279  —  11,279  —  
Financial liabilities
Deposits$1,583,789  $1,582,117  $—  $—  $1,582,117  
Accrued interest payable2,022  2,022  —  2,022  —  
Subordinate debentures70,883  71,454  —  —  71,454  
Federal Home Loan Bank advances10,737  10,755  —  —  10,755  

The methods and assumptions used to estimate fair value are described as follows:

Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable,  restricted equity securities, federal funds sold or purchased, demand deposits, and variable rate loans or deposits that re-price frequently and fully. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent re-pricing or re-pricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of debt is based on discounted cash flows using current rates for similar financing.
v3.20.2
Stock-based Compensation
6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
In 2006, the Board of Directors and shareholders of the Bank (then known as "Commerce Union Bank") approved the Commerce Union Bank Stock Option Plan (the “Plan”). The Plan provided for the granting of stock options for up to 625,000 shares of Bank common stock to employees and organizers and authorized the issuance of Bank common stock upon the exercise of such options. As part of the Bank's reorganization into a holding company corporate structure in 2012, all Bank options were replaced with Commerce Union Bancshares, Inc. (now known as "Reliant Bancorp, Inc.") options with no change in terms.

On March 10, 2015, the shareholders of Reliant Bancorp (then known as "Commerce Union Bancshares, Inc.") approved the Commerce Union Bancshares, Inc. Amended and Restated Stock Option Plan (the “A&R Plan”), which permits the grant of awards with respect to up to 1,250,000 shares of Reliant Bancorp common stock in the form of stock options. As part of the merger of Commerce Union Bank and Reliant Bank in 2015, all outstanding stock options of Reliant Bank were converted to stock options of Reliant Bancorp (then known as "Commerce Union Bancshares, Inc.") under the A&R Plan. Under the A&R Plan, stock option awards may be granted in the form of incentive stock options or non-statutory stock options, and are generally exercisable for up to 10 years following the date such option awards are granted. Exercise prices of incentive stock options must be equal to or greater than the fair market value of Reliant Bancorp's common stock on the grant date.
        
On June 18, 2015, the shareholders of Reliant Bancorp (then known as "Commerce Union Bancshares, Inc.") approved the Commerce Union Bancshares, Inc. 2015 Equity Incentive Plan, which reserves up to 900,000 shares of Reliant Bancorp common stock to be subject to awards under the plan, including awards in the form of stock options, restricted stock grants, performance-based awards, and other awards denominated or payable by reference to or based on or related to Reliant Bancorp common stock.

Common Stock Options
        
A summary of stock option activity for the six months ended June 30, 2020 is as follows:
SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at January 1, 2020149,293$18.81  6.68 years$553  
Granted—  $—  
Exercised(1,889)$11.47  
Forfeited or expired(12,700)$21.82  
Outstanding at June 30, 2020134,704$18.68  6.13 years$191  
Exercisable at June 30, 202074,004$15.63  4.82 years$163  


SharesWeighted Average
Grant-Date Fair Value
Non-vested options at January 1, 202074,600  $6.08
Granted—  $—
Vested(3,200) $5.91
Forfeited(10,700) $5.86
Non-vested options at June 30, 202060,700  $6.13
        
As of June 30, 2020, there was $267 of unrecognized future compensation expense to be recognized related to stock options.
Restricted Stock and Restricted Stock Unit Awards

The following table shows the activity related to non-vested restricted stock and restricted stock unit awards for the six months ended June 30, 2020:
Restricted Stock UnitsRestricted Stock
Underlying SharesWeighted Average Grant-Date
Fair Value
SharesWeighted Average Grant-Date
Fair Value
Non-vested units/shares at January 1, 202047,750  $23.30  90,960  $25.31  
Granted10,000  12.63  —  —  
Vested(3,022) 23.30  (16,466) 23.41  
Forfeited(978) 23.30  (5,534) 23.35  
Non-vested units/shares at June 30, 202053,750  $21.31  68,960  $25.92  

As of June 30, 2020, there was $981 of unrecognized compensation cost related to non-vested restricted stock and restricted stock unit awards.
v3.20.2
Regulatory Capital Requirements
6 Months Ended
Jun. 30, 2020
Banking and Thrift, Other Disclosures [Abstract]  
REGULATORY CAPITAL REQUIREMENTS REGULATORY CAPITAL REQUIREMENTS
The Bank is subject to regulatory capital requirements administered by the federal and state banking agencies. As of June 30, 2020, Reliant Bancorp fell under the Federal Reserve's Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (the “Small Bank Holding Company Policy Statement”), which is generally applicable to bank holding companies with consolidated assets of less than $3 billion, and was, therefore, not subject to consolidated capital requirements. However, we have chosen to provide our consolidated capital ratios below. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes as of June 30, 2020, the Bank meets all capital adequacy requirements to which it is subject.

Prompt corrective action regulations provide five bank capital classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2020 and December 31, 2019, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

In July 2013, the Federal Deposit Insurance Corporation (FDIC) approved final rules that substantially amended the regulatory risk-based capital rules applicable to Reliant Bancorp and the Bank. The final rules implement the regulatory capital reforms of the Basel Committee on Banking Supervision reflected in “Basel III: A Global Framework for More Resilient Banks and Banking Systems” ("Basel III") and changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Under these rules, the leverage and risk-based capital ratios of bank holding companies (other than bank holding companies that
fall under the Small Bank Holding Company Policy Statement and are not subject to consolidated capital requirements) may not be lower than the leverage and risk-based capital ratios for insured depository institutions. The final rules implementing Basel III became effective on January 1, 2015, and include new minimum risk-based capital and leverage ratios and a new common equity tier 1 ratio. In addition, these rules refine the definition of what constitutes capital for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital.

Basel III established a “capital conservation buffer” of 2.5%. An institution is subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if capital levels fall below minimum levels plus the buffer.

Capital amounts and ratios for Reliant Bancorp and the Bank (required) are presented below as of June 30, 2020 and December 31, 2019.
Actual
Regulatory
Capital
Minimum Required
Capital Including
Capital Conservation
Buffer
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
AmountRatioAmountRatioAmountRatio
June 30, 2020
Reliant Bancorp
Tier I leverage$243,428  8.47 %$114,960  4.00 %$143,700  5.00 %
Common equity tier I231,701  9.25 %175,341  7.00 %162,817  6.50 %
Tier I risk-based capital243,428  9.71 %213,094  8.50 %200,559  8.00 %
Total risk-based capital320,776  12.80 %263,150  10.50 %250,619  10.00 %
Bank
Tier I leverage$293,602  10.23 %$114,791  4.00 %$143,489  5.00 %
Common equity tier I293,602  11.74 %175,028  7.00 %162,526  6.50 %
Tier I risk-based capital293,602  11.74 %212,534  8.50 %200,032  8.00 %
Total risk-based capital312,264  12.49 %262,541  10.50 %250,039  10.00 %
December 31, 2019
Reliant Bancorp
Tier I leverage$176,748  9.74 %$72,586  4.00 %$90,733  5.00 %
Common equity tier I165,063  10.55 %109,520  7.00 %101,698  6.50 %
Tier I risk-based capital176,748  11.30 %132,952  8.50 %125,131  8.00 %
Total risk-based capital249,751  15.97 %164,207  10.50 %156,388  10.00 %
Bank
Tier I leverage$186,734  10.30 %$72,518  4.00 %$90,648  5.00 %
Common equity tier I186,734  11.95 %109,384  7.00 %101,571  6.50 %
Tier I risk-based capital186,734  11.95 %132,823  8.50 %125,010  8.00 %
Total risk-based capital199,737  12.79 %163,975  10.50 %156,167  10.00 %
v3.20.2
Earnings Per Share
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
EARNINGS PER SHARE EARNINGS PER SHARE
The following is a summary of the components comprising basic and diluted earnings per common share of stock ("EPS"):

Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Basic EPS Computation
Net income attributable to common shareholders$7,868  $4,239  $7,653  $8,063  
Weighted average common shares outstanding16,496,817  11,196,898  14,196,254  11,300,095  
Basic earnings per common share$0.48  $0.38  $0.54  $0.71  
Diluted EPS Computation
Net income attributable to common shareholders$7,868  $4,239  $7,653  $8,063  
Weighted average common shares outstanding16,496,817  11,196,898  14,196,254  11,300,095  
Dilutive effect of stock options, restricted stock shares and units, and employee stock purchase plan32,263  89,729  44,911  78,300  
Adjusted weighted average common shares outstanding16,529,080  11,286,627  14,241,165  11,378,395  
Diluted earnings per common share$0.48  $0.38  $0.54  $0.71  
v3.20.2
Segment Reporting
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
The Company has two reportable business segments: retail banking and residential mortgage banking. Segment information is derived from the internal reporting system utilized by management. Revenues and expenses for segments reflect those which can be specifically identified and have been assigned based on internally developed allocation methods. Financial results have been presented, to the extent practicable, as if each segment operated on a stand-alone basis.

Retail Banking provides deposit and lending services to consumer and business customers within our primary geographic markets. Our customers are serviced through branch locations, ATMs, online banking, and mobile banking.

Residential Mortgage Banking originates traditional first lien residential mortgage loans and first lien home equity lines of credit throughout the United States. The traditional first lien residential mortgage loans are typically underwritten to government agency standards and sold to third-party secondary market mortgage investors. The home equity lines of credit are typically sold to participating banks or other investor groups and are underwritten to their standards.

During the second quarter of 2019, RMV began acquiring loans from approved correspondent lenders and reselling them in the secondary market. These loans are not government agency-qualified loans and are of higher risk, such as jumbo loans or senior position home equity lines of credit.
The following presents summarized results of operations for the Company’s business segments for the periods indicated:
Three Months Ended
June 30, 2020
Retail BankingResidential
Mortgage
Banking
Elimination
Entries
Consolidated
Net interest income$29,420  $536  $—  $29,956  
Provision for loan losses3,000  —  —  3,000  
Noninterest income2,174  2,240   4,422  
Noninterest expense (excluding merger expense)16,433  3,199  —  19,632  
Merger expense2,632  —  —  2,632  
Income tax expense (benefit)1,661  (27) —  1,634  
Net income (loss)7,868  (396)  7,480  
Noncontrolling interest in net loss of subsidiary—  396  (8) 388  
Net income attributable to common shareholders$7,868  $—  $—  $7,868  

 Three Months Ended
June 30, 2019
 Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$13,703  $110  $—  $13,813  
Provision for loan losses200  —  —  200  
Noninterest income1,473  1,235  (10) 2,698  
Noninterest expense (excluding merger expense)10,129  2,996  —  13,125  
Merger expense —  —   
Income tax expense (benefit)607  (106) —  501  
Net income (loss)4,239  (1,545) (10) 2,684  
Noncontrolling interest in net loss of subsidiary—  1,545  10  1,555  
Net income attributable to common shareholders$4,239  $—  $—  $4,239  

Six Months Ended June 30, 2020
Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$46,202  $869  $—  $47,071  
Provision for loan losses5,900  —  —  5,900  
Noninterest income3,883  3,804  17  7,704  
Noninterest expense (excluding merger expense)28,894  6,150  —  35,044  
Merger expense6,818  —  —  6,818  
Income tax expense (benefit)820  (96) —  724  
Net income (loss)7,653  (1,381) 17  6,289  
Noncontrolling interest in net loss of subsidiary—  1,381  (17) 1,364  
Net income attributable to common shareholders$7,653  $—  $—  $7,653  
Six Months Ended June 30, 2019
Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$27,076  $198  $—  $27,274  
Provision for loan losses200  —  —  200  
Noninterest income2,851  1,810  (25) 4,636  
Noninterest expense (excluding merger expense)20,574  5,295  —  25,869  
Merger expense —  —   
Income tax expense (benefit)1,087  (214) —  873  
Net income (loss)8,063  (3,073) (25) 4,965  
Noncontrolling interest in net loss of subsidiary—  3,073  25  3,098  
Net income attributable to common shareholders$8,063  $—  $—  $8,063  
v3.20.2
Derivatives
6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and other terms of the individual interest rate swap agreements.

Interest Rate Swaps Designated as Cash Flow Hedges

Interest rate swaps with notional amounts totaling $160,000 as of June 30, 2020 were designated as cash flow hedges of certain short-term interest-bearing liabilities and subordinated debentures, which are fully effective. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining terms of the swap agreements.


Summary information related to the interest rate swaps designated as cash flow hedges as of June 30, 2020, is as follows:
Notional amounts$160,000  
Weighted average pay rates2.050 %
Weighted average receive rates1.679 %
Weighted average maturity 3.60 years
Unrealized losses$9,034  

Cash Flow Hedges
        
The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the three months ended June 30, 2020:

Amount of Gain (Loss) Recognized in OCI
(Effective Portion)
Amount of Gain (Loss) Reclassified from OCI to Interest IncomeAmount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion)
June 30, 2020
Interest rate contracts$(5,137) $—  $—  
The following table reflects the cash flow hedges included in the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively:
June 30, 2020December 31, 2019
Notional AmountFair ValueNotional AmountFair Value
Included in other liabilities:
Interest rate swaps related to:
Subordinate debentures$10,000  $819  $10,000  $439  
Short-term interest bearing liabilities150,000  8,215  100,000  1,639  
Total included in other liabilities$160,000  $9,034  $110,000  $2,078  



Fair Value Hedges

The following table reflects the fair value hedges included in the Consolidated Statements of Income for the six months ended June 30, 2020 and 2019, respectively:
Interest rate contractsLocationJune 30, 2020June 30, 2019
Change in fair value on interest rate swaps hedging investmentsInterest income$(1,131) $(1,057) 

The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively:
June 30, 2020December 31, 2019
Notional AmountFair ValueNotional AmountFair Value
Included in other assets:
Interest rate swaps related to investments$—  $—  $—  $—  
Total included in other assets$—  $—  $—  $—  
Included in other liabilities:
Interest rate swaps related to investments19,605  1,761  19,605  630  
Total included in other liabilities$19,605  $1,761  $19,605  $630  
v3.20.2
Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXESIncome tax expense for the three and six months ended June 30, 2020 totaled $1,634 and $724, respectively, compared to $501 and $873, respectively, for the three and six months ended June 30, 2019. The effective tax rate for the three and six months ended June 30, 2020 was 17.9% and 10.3%, respectively, compared to 15.7% and 15.0%, respectively, for the three and six months ended June 30, 2019. During the three and six months ended June 30, 2020, merger expenses and the provision expense had the impact of reducing taxable income and increasing the proportion of tax-exempt income to total income.
v3.20.2
Business Combinations
6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
BUSINESS COMBINATIONS BUSINESS COMBINATIONS
Tennessee Community Bank Holdings, Inc.

Effective January 1, 2020, Reliant Bancorp completed the acquisition of TCB Holdings pursuant to the Agreement and Plan of Merger, dated September 16, 2019 (the “TCB Holdings Agreement”), by and among Reliant Bancorp, TCB Holdings, and Community Bank & Trust, a Tennessee-chartered commercial bank and wholly owned subsidiary of TCB Holdings (“CBT”). On the terms and subject to the conditions set forth in the TCB Holdings Agreement, TCB Holdings merged with and into the Reliant Bancorp (the “TCB Holdings Transaction”), with Reliant Bancorp as the surviving corporation. Immediately following the TCB Holdings Transaction, CBT merged with and into the Bank, with the Bank continuing as the surviving banking corporation. Pursuant to the TCB Holdings Agreement, at the effective time of the TCB Holdings Transaction, each outstanding share of TCB Holdings common stock, par value $1.00 per share (other than certain excluded shares), was converted into and canceled in exchange for the right to receive (i) $17.13 in cash, without interest, and (ii) 0.769 shares of the Reliant Bancorp’s common stock, par value $1.00 per share (“Reliant Bancorp Common Stock”). The aggregate consideration payable by Reliant Bancorp in respect of shares of TCB Holdings common stock as consideration for the TCB Holdings Transaction was 811,210 shares of Reliant Bancorp Common Stock and approximately $18,073 in cash. Reliant Bancorp did not issue fractional shares of Reliant Bancorp Common Stock in connection with the TCB Holdings Transaction, but paid cash in lieu of fractional shares based on the volume weighted average closing price per share of the Reliant Bancorp Common Stock on The Nasdaq Capital Market for the 10 consecutive trading days ending on and including December 30, 2019 (calculated as $22.36). At the effective time of the TCB Holdings Transaction, each outstanding option to purchase TCB Holdings common stock was canceled in exchange for a cash payment in an amount equal to the product of (i) $34.25 minus the per share exercise price of the option multiplied by (ii) the number of shares of TCB Holdings common stock subject to the option (to the extent not previously exercised). Reliant Bancorp paid aggregate consideration to holders of unexercised options of approximately $430. All shares of Reliant Bancorp’s common stock outstanding immediately prior to the TCB Holdings Transaction were unaffected by the TCB Holdings Transaction.

The following table details the financial impact of the TCB Holdings Transaction, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:
Calculation of Purchase Price
Shares of Tennessee Community Bank Holdings, Inc. common stock outstanding as of January 1, 20201,055,041  
Exchange ratio for Reliant Bancorp, Inc. common stock0.769  
Reliant Bancorp, Inc. common stock shares issued811,210  
Reliant Bancorp, Inc. share price at January 1, 2020$22.24  
Estimated value of Reliant Bancorp, Inc. shares issued18,041
Cash settlement for Tennessee Community Bank Holdings, Inc. common stock ($17.13 per share)
18,073  
Cash settlement for Tennessee Community Bank Holdings, Inc.'s 26,450 outstanding stock options ($34.25 settlement price less weighted average exercise price of $18.00)
430  
Cash settlement for Reliant Bancorp, Inc. fractional shares ($22.36 per pro rata fractional share)
 
Estimated fair value of Tennessee Community Bank Holdings, Inc.$36,547  
Tennessee Community Bank Holdings, Inc., continued
Allocation of Purchase Price
Total consideration above$36,547  
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents11,026  
Investment securities available for sale56,336  
Loans, net of unearned income171,445  
Accrued interest receivable948  
Premises and equipment6,427  
Cash surrender value of life insurance contracts5,629  
Restricted equity securities909  
Core deposit intangible3,617  
Other assets833  
Deposits(210,538) 
Deferred tax liability(337) 
Borrowings(58) 
FHLB advances(13,102) 
Other liabilities(3,682) 
Total fair value of net assets acquired29,453  
Goodwill$7,094  

CBT was a Tennessee-based full-service community bank with operations in Ashland City, Kingston Springs, Pegram, Pleasant View, and Springfield, Tennessee. These communities lie on the northwest perimeter of Nashville, Tennessee.
First Advantage Bancorp

Effective April 1, 2020, Reliant Bancorp completed the acquisition of FABK pursuant to the Agreement and Plan of Merger, dated October 22, 2019 (the “FABK Agreement”), by and among Reliant Bancorp, FABK, and First Advantage Bank, a Tennessee-chartered commercial bank and wholly owned subsidiary of FABK (“FAB”). On the terms and subject to the conditions set forth in the FABK Agreement, FABK merged with and into Reliant Bancorp (the “FABK Transaction”), with Reliant Bancorp as the surviving corporation. Immediately following the FABK Transaction, FAB merged with and into the Bank, with the Bank continuing as the surviving banking corporation. Pursuant to the FABK Agreement, at the effective time of the FABK Transaction, each outstanding share of FABK common stock, par value $0.01 per share (the “FABK Common Stock”), other than certain excluded shares, was converted into the right to receive (i) 1.17 shares of Reliant Bancorp Common Stock and (ii) $3.00 in cash, without interest. In lieu of the issuance of fractional shares of Reliant Bancorp Common Stock, Reliant Bancorp agreed to pay cash in lieu of fractional shares based on the volume-weighted average closing price per share of Reliant Bancorp Common Stock on The Nasdaq Capital Market for the 10 consecutive trading days ending on and including March 30, 2020 (calculated as $11.74). Based on the April 1, 2020 opening price for Reliant Bancorp Common Stock of $11.27 per share and 3,935,165 shares of FABK Common Stock outstanding on April 1, 2020, the consideration for the FABK Transaction was approximately $64,094, in the aggregate, or $16.28 per share of FABK Common Stock.

The following table details the financial impact of the FABK Transaction, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:

Calculation of Purchase Price
Shares of First Advantage Bancorp common stock outstanding as of April 1, 20203,935,165  
Conversion of restricted stock units to shares of common stock of First Advantage Bancorp as of April 1, 20202,000  
Total First Advantage Bancorp common stock outstanding as of April 1, 20203,937,165  
Exchange ratio for Reliant Bancorp, Inc. common stock1.17
Reliant Bancorp, Inc. common stock shares issued4,606,483  
Remove fractional shares(64) 
Reliant Bancorp, Inc. common stock shares issued4,606,419
Reliant Bancorp, Inc. share price at April 1, 2020$11.27  
Estimated value of Reliant Bancorp, Inc. shares issued51,914  
Cash settlement for Reliant Bancorp, Inc. fractional shares ($11.74 per pro rata fractional share)
1
Cash settlement for First Advantage Bancorp common stock ($3.00 per share)
11,805
Cash settlement for First Advantage Bancorp restricted stock units ($3.00 per share)
6
Cash settlement for First Advantage Bancorp's 34,800 outstanding stock options ($30.00 settlement price less weighted average exercise price of $19.44)
368
Estimated fair value of First Advantage Bancorp$64,094  
First Advantage Bancorp, continued

Allocation of Purchase Price
Total consideration above$64,094  
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents11,159  
Investment securities available for sale35,970  
Loans, net of unearned income622,423  
Mortgage loans held for sale, net5,878  
Premises and equipment7,965  
Deferred tax asset6,791  
Cash surrender value of life insurance contracts14,776  
Other real estate and repossessed assets1,259  
Core deposit intangible2,280  
Operating lease right-of-use assets6,536  
Other assets10,529  
Deposits(608,690) 
Borrowings(35,962) 
Operating lease liabilities(6,536) 
Other liabilities(10,606) 
Total fair value of net assets acquired63,772  
Goodwill$322  

FAB was a Tennessee-based full-service community bank headquartered in Clarksville, Tennessee. FAB operated branch offices in Montgomery, Davidson and Williamson counties, Tennessee and operated a loan production office in Knoxville, Tennessee primarily originating manufactured housing loans.
Supplemental Pro Forma Combined Condensed Statements of Income

Pro forma data for the three and six months ended June 30, 2020 and 2019 in the table below presents information as if the TCB Holdings Transaction and FABK Transaction occurred on January 1, 2019. These results combine the historical results of TCB Holdings and FABK into the Company's consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair value adjustments, they are not indicative of what would have occurred had the acquisitions taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of TCB Holdings' or FABK's provision for credit losses for the first three and six months of 2019 that may not have been necessary had the acquired loans been recorded at fair value as of the beginning of 2019. Additionally, these financials were not adjusted for non-recurring expenses, such as merger-related charges incurred by either the Company, TCB Holdings or FABK. The Company expects to achieve operating cost savings and other business synergies as a result of the acquisitions which are also not reflected in the pro forma amounts.


Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Revenue(1)
$33,340  $28,791  $63,564  $56,739  
Net interest income$28,918  $24,648  $54,629  $49,603  
Net income attributable to common shareholders$7,073  $8,014  $5,176  $15,585  
(1) Net interest income plus noninterest income
v3.20.2
Leases
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Leases LEASES
On January 1, 2020, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. The Company elected the prospective application approach provided by ASU 2018-11 and did not adjust prior periods for ASC 842. Leases with initial terms of less than one year are not recorded on the balance sheet.

The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The implementation of the new standard resulted in recognition of a right-of-use asset of $12.0 million and a lease liability of $11.9 million at the date of adoption, which is related to the Company’s lease of premises used in operations. The Company used a discount rate of 4.5% in determining the right-of-use asset and lease liability as of January 1, 2020.

Information related to the Company's operating leases is presented below:
June 30, 2020
Operating leases right of use assets$15,452  
Operating lease liabilities$16,591  
Weighted average remaining lease term (in years)6.62
Weighted average discount rate4.33 %
The components of lease expense included in occupancy expenses for the three and six months ended June 30, 2020, were as follows:

Three months ended June 30, 2020Six months ended June 30, 2020
Operating lease cost $854  $1,482  
Short-term lease cost—  —  
Variable lease cost98178  
Total lease cost$952  $1,660  

The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

Lease expense for the three and six months ended June 30, 2019, prior to the adoption of ASU 2016-02, was $678 and $1,371, respectively.

A maturity analysis of operating lease liabilities and a reconciliation of undiscounted cash flows to the total operating lease liability is as follows:

Lease payments due on or beforeJune 30, 2020
June 30, 2021$3,923  
June 30, 20222,903  
June 30, 20232,681  
June 30, 20242,648  
June 30, 20252,504  
Thereafter5,101  
Total undiscounted cash flows19,760  
Discount on cash flows(3,169) 
Total lease liability$16,591  
v3.20.2
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Operations
Nature of Operations

Reliant Bancorp, Inc. is a Tennessee corporation and the holding company for and the sole shareholder of Reliant Bank. Reliant Bancorp is registered as a financial holding company under the Bank Holding Company Act of 1956, as amended ("Bank Holding Company Act"). Reliant Bank is a commercial bank chartered under Tennessee law and a member of the Federal Reserve System (the "Federal Reserve"). Reliant Bank, Reliant Bancorp's wholly-owned bank subsidiary, provides a full range of traditional banking products and services to business and consumer clients throughout Middle Tennessee and the Nashville-Davidson-Murfreesboro-Franklin, TN Metropolitan Statistical Area (the “Nashville MSA”) and Chattanooga, Tennessee. Reliant Bank operates banking centers in Cheatham, Davidson, Hamilton, Hickman, Maury, Montgomery, Robertson, Rutherford, Sumner, and Williamson counties, Tennessee. Additionally, Reliant Bank operates mortgage offices in Brentwood, Chattanooga, Hendersonville, and Memphis, Tennessee, as well as two in Little Rock and one in Crossett, Arkansas. On January 1, 2020, TCB Holdings, a community banking organization headquartered in Ashland City, Tennessee, was merged with and into Reliant Bancorp. On April 1, 2020, First Advantage Bancorp, a community banking organization headquartered in Clarksville, Tennessee, was merged with and into Reliant Bancorp (See Note 12).

Reliant Risk Management, Inc., a newly-formed, wholly-owned insurance captive subsidiary of Reliant Bancorp, Inc. that began operations on June 1, 2020, is a Tennessee-based captive insurance company which insures Reliant Bancorp and the Bank against certain risks unique to their operations and for which insurance may not be currently available or economically feasible in today's insurance marketplace. Reliant Risk Management, Inc. pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. Reliant Risk Management, Inc. is subject to regulations of the State of Tennessee and undergoes periodic examinations by the Tennessee Department of Commerce and Insurance.
Basis of Presentation
Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Quarterly Report on Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with U.S. GAAP.  All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by the report have been included.  The accompanying unaudited consolidated financial statements should be read in conjunction with Reliant Bancorp, Inc.’s consolidated financial statements and related notes appearing in Reliant Bancorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019.
The consolidated financial statements as of and for the periods presented include the accounts of Reliant Bancorp, Inc., Reliant Bank (the "Bank"), Community First Trups Holding Company ("TRUPS"), which is wholly owned by Reliant Bancorp, Inc., Reliant Risk Management, Inc. ("Risk"), which is wholly owned by Reliant Bancorp Inc., Reliant Investment Holdings, LLC ("Holdings"), which is wholly owned by the Bank, and Reliant Mortgage Ventures, LLC ("RMV"), of which the Bank controls 51% of the governance rights. Reliant Bancorp Inc., the Bank, TRUPS, Risk, Holdings, and RMV are collectively referred to herein as the “Company”. All significant inter-company balances and transactions have been eliminated in consolidation. As described in Note 12 to these unaudited consolidated financial statements, Reliant Bancorp, Inc. and TCB Holdings merged effective on January 1, 2020, and Reliant Bancorp, Inc. and FABK merged effective April 1, 2020. The accounting and reporting policies of the Company conform to U.S. GAAP and general practices in the banking industry.
Use of Estimates
Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to significant change in the near term relate to determination of the allowance for loan losses, the valuation of other real estate, the valuation of debt and equity securities, the valuation of deferred tax assets and fair values of financial instruments.

The consolidated financial statements as of June 30, 2020, and for the three and six months ended June 30, 2020 and 2019, included herein have not been audited. The accounting and reporting policies of the Company conform to U.S. GAAP and Article 8 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures made are adequate to make the information not misleading.

The accompanying consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the interim periods presented. Such adjustments are of a normal recurring nature. The Company evaluates subsequent events through the date of filing. Certain prior period amounts have been reclassified to conform to the current period presentation. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.
Recently Adopted Accounting Pronouncements and Newly Issued not yet Effective Accounting Standards
Recently Adopted Accounting Pronouncements

Information about certain issued accounting standards updates is presented below. Also refer to Note 1 - Summary of Significant Accounting Policies, “Recent Authoritative Accounting Guidance” in the Annual Report on Form 10-K for the year ended December 31, 2019 for additional information related to previously issued accounting standards updates.

ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 went into effect for the Company on January 1, 2020 and the Company elected the prospective application approach provided by ASU 2018-11 and did not adjust prior periods for ASC 842. The Company also elected certain practical expedients within the standard and consistent with such elections did not reassess whether any expired or existing contracts are or contain leases, did not reassess the lease classification for any expired or existing leases, and did not reassess any initial direct costs for existing leases. The effect of implementing this pronouncement resulted in right to use assets of $11,973 and a similar corresponding liability, as of January 1, 2020.

ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." In March 2020, the FASB issued Topic 848 amendments to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Company has evaluated the effect of the pronouncement on the consolidated financial statements, noting no significant impact.


Newly Issued not yet Effective Accounting Standards

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is expected to be effective on January 1, 2023. We are currently evaluating the potential impact of ASU 2016-13 on the Company's financial statements. We are currently developing an implementation plan to include assessment of processes, portfolio segmentation, model development, system requirements and the identification of data and resource needs, among other things. The adoption of ASU 2016-13 could result in an increase in the allowance for loan losses as a result of changing from an “incurred loss” model, which encompasses
allowances for current known and inherent losses within the portfolio, to an “expected loss” model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore, ASU 2016-13 will necessitate that we establish an allowance for expected credit losses for certain debt securities and other financial assets. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Financial Instruments - Credit Losses (ASC 326), Derivatives and Hedging (ASC 815), and Financial Instruments (ASC 825). The amendments in this ASU improve the codification by eliminating inconsistencies and providing clarifications. The amended guidance in this ASU related to credit losses will be effective for the Company for fiscal years and interim periods beginning after December 15, 2022. The Company is currently evaluating the impact of these ASUs on the Company’s consolidated financial statements. While we are currently unable to reasonably estimate the impact of adopting these ASUs, we expect that the impact of adoption will be significantly influenced by the composition, characteristics and quality of the Company's loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date.

ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for the Company on January 1, 2021, with earlier adoption permitted and is not currently expected to have a significant impact on the Company's consolidated financial statements as it simplifies the test of impairment of goodwill.
v3.20.2
Securities (Tables)
6 Months Ended
Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
Available-for-sale Securities
The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income at June 30, 2020 and December 31, 2019 were as follows:
June 30, 2020
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
U. S. Treasury and other U. S. government agencies$54  $ $—  $55  
State and municipal171,979  13,865  (118) 185,726  
Corporate bonds11,250  99  (83) 11,266  
Mortgage-backed securities 37,624  350  (1,531) 36,443  
Asset-backed securities15,791  —  (267) 15,524
Total$236,698  $14,315  $(1,999) $249,014  

December 31, 2019
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
U. S. Treasury and other U. S. government agencies$59  $—  $—  $59  
State and municipal186,283  10,413  (36) 196,660  
Corporate bonds7,880  97  (132) 7,845  
Mortgage-backed securities 38,126  296  (661) 37,761  
Asset-backed securities18,374  —  (406) 17,968  
Total$250,722  $10,806  $(1,235) $260,293  
Fair Value of Available for Sale Maturities by Contractual Maturity
The fair values of available for sale debt securities at June 30, 2020 by contractual maturity are provided below. Actual maturities may differ from contractual maturities for mortgage- and asset-backed securities since the underlying asset may be called or prepaid with or without penalty. Securities not due at a single maturity date are shown separately.
Amortized
Cost
Estimated
Fair Value
Due within one year$500  $498  
Due in one to five years2,179  2,180  
Due in five to ten years14,693  15,379  
Due after ten years165,911  178,990  
Mortgage-backed securities37,624  36,443  
Asset-backed securities15,791  15,524  
Total$236,698  $249,014  
Securities in Unrealized Loss Position
The following table shows available for sale securities with unrealized losses and their estimated fair value aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019, respectively:
Less than 12 months12 months or moreTotal
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
June 30, 2020
State and municipal$1,879  $118  $—  $—  $1,879  $118  
Corporate bonds4,669  81  499   5,168  83  
Mortgage-backed securities 15,045  822  12,250  709  27,295  1,531  
Asset-backed securities821   14,633  266  15,454  267  
Total temporarily impaired$22,414  $1,022  $27,382  $977  $49,796  $1,999  

December 31, 2019
State and municipal$1,960  $36  $—  $—  $1,960  $36  
Corporate bonds—  —  2,499  132  2,499  132  
Mortgage-backed securities 16,104  286  9,081  375  25,185  661  
Asset-backed securities—  —  17,682  406  17,682  406  
Total temporarily impaired$18,064  $322  $29,262  $913  $47,326  $1,235  
v3.20.2
Loans and Allowance for Loan Losses (Tables)
6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Summary of Loans and Allowance for Loan Losses
Loans at June 30, 2020 and December 31, 2019 were comprised as follows:
June 30,
2020
December 31, 2019
Commercial, Industrial and Agricultural$452,628  $245,515  
Real Estate
    1-4 Family Residential360,908  227,529  
    1-4 Family HELOC85,050  96,228  
    Multi-family and Commercial883,751  536,845  
    Construction, Land Development and Farmland337,459  273,872  
Consumer195,510  16,855  
Other7,203  13,180  
Total2,322,509  1,410,024  
Less
    Deferred loan fees 5,185  72  
    Allowance for loan losses18,237  12,578  
Loans, net$2,299,087  $1,397,374  
Activity in the Allowance for Loan Losses By Portfolio Segment
Activity in the allowance for loan losses by portfolio segment was as follows for the six months ended June 30, 2020 and June 30, 2019, respectively:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Beginning balance at December 31, 2019$2,529  $5,285  $2,649  $1,280  $624  $177  $34  $12,578  
Charge-offs(539) —  (114) (60) (98) (295) —  (1,106) 
Recoveries70  11   747   30  —  865  
Provision2,615  3,111  (413) (513) 446  672  (18) 5,900  
Ending balance at
June 30, 2020
$4,675  $8,407  $2,126  $1,454  $975  $584  $16  $18,237  

Beginning balance at December 31, 2018$1,751  $4,429  $2,500  $1,333  $656  $184  $39  $10,892  
Charge-offs(168) —  —  (17) —  (21) (13) (219) 
Recoveries294  59  201  216  11  12  —  793  
Provision 225   (77) 19  13  10  200  
Ending balance at
June 30, 2019
$1,881  $4,713  $2,707  $1,455  $686  $188  $36  $11,666  
Schedule of Allowance for Credit Losses and Recorded Investments in Loans By Portfolio and By Impairment Method
The allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2020 were as follows:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Allowance for loan losses
Individually evaluated for impairment$818  $—  $—  $—  $—  $—  $—  $818  
Acquired with credit impairment—  —  —  —  —  —  —  —  
Collectively evaluated for impairment 3,857  8,407  2,126  1,454  975  58416  17,419  
Total$4,675  $8,407  $2,126  $1,454  $975  $584  $16  $18,237  
Loans
Individually evaluated for impairment$1,218  $2,667  $1,817  $1,474  $318  $—  $—  $7,494  
Acquired with credit impairment441  1,341  796  1,005  14  1,326  —  4,923  
Collectively evaluated for impairment 450,969  879,743  334,846  358,429  84,718  194,1847,203  2,310,092  
Total$452,628  $883,751  $337,459  $360,908  $85,050  $195,510  $7,203  $2,322,509  
 
The allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2019 were as follows:
Commercial Industrial and AgriculturalMulti-family
and
Commercial
Real Estate
Construction
Land
Development and Farmland
1-4 Family
Residential
Real Estate
1-4 Family HELOCConsumerOtherTotal
Allowance for loan losses
Individually evaluated for impairment$755  $—  $17  $—  $—  $—  $—  $772  
Acquired with credit impairment—  —  —  —  —  —  —  —  
Collectively evaluated for impairment 1,774  5,285  2,632  1,280  624  177  34  11,806  
Total$2,529  $5,285  $2,649  $1,280  $624  $177  $34  $12,578  
Loans
Individually evaluated for impairment$1,154  $2,396  $1,218  $1,120  $374  $—  $—  $6,262  
Acquired with credit impairment—  215  813  195  —  —  —  1,223  
Collectively evaluated for impairment 244,361  534,234  271,841  226,214  95,854  16,855  13,180  1,402,539  
Total$245,515  $536,845  $273,872  $227,529  $96,228  $16,855  $13,180  $1,410,024  
Non-Accrual Loans By Class of Loan
Non-accrual loans by class of loan were as follows at June 30, 2020 and December 31, 2019:
June 30, 2020December 31, 2019
Commercial, Industrial and Agricultural$928  $572  
Multi-family and Commercial Real Estate2,711  1,276  
Construction, Land Development and Farmland412  555  
1-4 Family Residential Real Estate1,468  1,344  
1-4 Family HELOC241  296  
Consumer1,781  28  
Total$7,541  $4,071  
Individually Impaired Loans by Class of Loans
Individually impaired loans by class of loans were as follows at June 30, 2020:
Unpaid
Principal
Balance
Recorded
Investment
with no
Allowance for Loan Losses
Recorded
Recorded
Investment
with
Allowance for Loan Losses
Recorded
Total
Recorded
Investment
Related
Allowance for Loan Losses
Commercial, Industrial and Agricultural$2,845  $670  $989  $1,659  $818  
Multi-family and Commercial Real Estate5,691  4,008  —  4,008  —  
Construction, Land Development and Farmland3,081  2,613  —  2,613  —  
1-4 Family Residential Real Estate3,121  2,479  —  2,479  —  
1-4 Family HELOC438  332  —  332  —  
Consumer3,132  1,326  —  1,326  —  
Total $18,308  $11,428  $989  $12,417  $818  

Individually impaired loans by class of loans were as follows at December 31, 2019:
Unpaid
Principal
Balance
Recorded
Investment
with no
Allowance for Loan Losses
Recorded
Recorded
Investment
with
Allowance for Loan Losses
Recorded
Total
Recorded
Investment
Related
Allowance for Loan Losses
Commercial, Industrial and Agricultural$1,154  $—  $1,154  $1,154  $755  
Multi-family and Commercial Real Estate2,624  2,611  —  2,611  —  
Construction, Land Development and Farmland2,348  1,860  171  2,031  17  
1-4 Family Residential Real Estate1,419  1,315  —  1,315  —  
1-4 Family HELOC376  374  —  374  —  
Total $7,921  $6,160  $1,325  $7,485  $772  
Average Balances of Impaired Loans
The average balances of impaired loans for the six months ended June 30, 2020 and 2019 were as follows:
20202019
Commercial, Industrial and Agricultural$1,200  $791  
Multi-family and Commercial Real Estate3,076  2,548  
Construction, Land Development and Farmland2,017  2,747  
1-4 Family Residential Real Estate1,915  1,639  
1-4 Family HELOC380  99  
Consumer448  11  
Total $9,036  $7,835  
Credit Quality Indicators By Class of Loan
Credit quality indicators by class of loan were as follows at June 30, 2020:
PassSpecial
Mention
SubstandardTotal
Commercial, Industrial and Agricultural$448,744  $1,551  $2,333  $452,628  
1-4 Family Residential Real Estate357,377  115  3,416  360,908  
1-4 Family HELOC84,718  —  332  85,050  
Multi-family and Commercial Real Estate877,359  705  5,687  883,751  
Construction, Land Development and Farmland335,771  —  1,688  337,459  
Consumer 192,837   2,664  195,510  
Other5,683  1,520  —  7,203  
Total $2,302,489  $3,900  $16,120  $2,322,509  

Credit quality indicators by class of loan were as follows at December 31, 2019:
PassSpecial
Mention
SubstandardTotal
Commercial, Industrial and Agricultural$241,089  $2,382  $2,044  $245,515  
1-4 Family Residential Real Estate225,809  —  1,720  227,529  
1-4 Family HELOC95,678  —  550  96,228  
Multi-family and Commercial Real Estate531,055  1,519  4,271  536,845  
Construction, Land Development and Farmland272,440  —  1,432  273,872  
Consumer 16,634  —  221  16,855  
Other13,180  —  —  13,180  
Total $1,395,885  $3,901  $10,238  $1,410,024  
Past Due Status By Class of Loan
Past due status by class of loan was as follows at June 30, 2020:
30-59 Days
Past Due
60-89 Days
Past Due
90+ Days
Past Due
Total
Past Due
CurrentTotal Loans
Commercial, Industrial and Agricultural$600  $ $490  $1,095  $451,533  $452,628  
1-4 Family Residential Real Estate790  760  483  2,033  358,875  360,908  
1-4 Family HELOC—  —  198  198  84,852  85,050  
Multi-family and Commercial Real Estate—  —  2,166  2,166  881,585  883,751  
Construction, Land Development and Farmland411  569  225  1,205  336,254  337,459  
Consumer 407  326  913  1,646  193,864  195,510  
Other—  —  —  —  7,203  7,203  
Total$2,208  $1,660  $4,475  $8,343  $2,314,166  $2,322,509  

Past due status by class of loan was as follows at December 31, 2019:
30-59 Days
Past Due
60-89 Days
Past Due
90+ Days
Past Due
Total
Past Due
CurrentTotal Loans
Commercial, Industrial and Agricultural$79  $ $572  $655  $244,860  $245,515  
1-4 Family Residential Real Estate501  236  229  966  226,563  227,529  
1-4 Family HELOC—  —  296  296  95,932  96,228  
Multi-family and Commercial Real Estate485  —  558  1,043  535,802  536,845  
Construction, Land Development and Farmland255  —  339  594  273,278  273,872  
Consumer 38  26  64  128  16,727  16,855  
Other—  —  —  —  13,180  13,180  
Total$1,358  $266  $2,058  $3,682  $1,406,342  $1,410,024  
Schedule of Troubles Debt Loans by Class of Loans
The following table presents loans by class modified as troubled debt restructurings ("TDRs") during the first six months of 2020. There were no loans that were modified as TDRs during the six months ended June 30, 2019.
Number of ContractsPre-Modification Outstanding Recorded InvestmentsPost-Modification Outstanding Recorded Investments
June 30, 2020
Commercial, Industrial and Agricultural $150  $150  
Multi-family and Commercial Real Estate 721  721  
1-4 Family Residential 394  394  
Total $1,265  $1,265  
Outstanding Balance And Carrying Amount of the Purchased Credit Impaired Loans The outstanding balance and carrying amount of the purchased credit impaired loans were as follows at June 30, 2020 and December 31, 2019:
June 30, 2020December 31, 2019
Commercial, Industrial and Agricultural$1,192  $—  
Multi-family and Commercial Real Estate2,372  217  
Construction, Land Development and Farmland1,012  1,021  
1-4 Family Residential Real Estate1,314  231  
1-4 Family HELOC18  —  
Consumer2,416  —  
Total outstanding balance8,324  1,469  
Less remaining purchase discount3,401  246  
Allowance for loan losses—  —  
Carrying amount, net of allowance for loan losses and remaining purchase discounts$4,923  $1,223  
Activity Related to Accretable Portion of the Purchase Discount on Loans Acquired With Deteriorated Credit Quality
Activity related to the accretable portion of the purchase discount on loans acquired with deteriorated credit quality is as follows for the six months ended June 30, 2020 and 2019:
20202019
Balance at January 1,$98  $110  
New loans purchased870  —  
Year-to-date settlements(80) (7) 
Balance at June 30,$888  $103  
v3.20.2
Fair Values of Assets and Liabilities (Tables)
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis
The following table sets forth the Company’s major categories of assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy, as of June 30, 2020 and December 31, 2019:

Fair ValueQuoted
Prices in
Active
Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
June 30, 2020
Assets
U. S. Treasury and other U. S. government agencies $55  $—  $55  $—  
State and municipal185,726  —  185,726  —  
Corporate bonds11,266  —  11,266  —  
Mortgage backed securities 36,443  —  36,443  —  
Asset backed securities15,524  —  15,524  —  
Liabilities
Derivative liabilities$10,795  $—  $10,795  $—  
December 31, 2019
Assets
U. S. Treasury and other U. S. government agencies $59  $—  $59  $—  
State and municipal196,660  —  196,660  —  
Corporate bonds7,845  —  7,845  —  
Mortgage backed securities 37,761  —  37,761  —  
Asset backed securities17,968  —  17,968  —  
Derivative assets688  —  688  —  
Liabilities
Derivative liabilities$3,396  $—  $3,396  $—  
The following table sets forth the Company’s major categories of assets and liabilities measured at fair value on a nonrecurring basis, by level within the fair value hierarchy, as of June 30, 2020 and December 31, 2019:

Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
June 30, 2020    
Assets    
Impaired loans$171  $—  $—  $171  
Other real estate2,514  —  —  2,514  
Other repossessions1,508  —  —  1,508  
December 31, 2019    
Assets    
Impaired loans$553  $—  $—  $553  
Other real estate750—  —  750  
Other repossessions—  —  —  
Level 3 Input Information for Assets Measured at Fair Value on a Nonrecurring Basis
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at June 30, 2020 and December 31, 2019:
Valuation
Techniques (1)
Significant
Unobservable Inputs
Range
(Weighted Average)
Impaired loansAppraisalEstimated costs to sell10%
Other real estateAppraisalEstimated costs to sell10%
Other repossessionsThird-party guidelinesEstimated costs to sell10%
(1)The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent. Estimated cash flows change and appraised values of the assets or collateral underlying the loans will be sensitive to changes.
Carrying Amounts And Estimated Fair Values of Financial instruments Not Reported at Fair Value
Carrying amounts and estimated fair values of financial instruments not reported at fair value at June 30, 2020 and December 31, 2019 were as follows:
June 30, 2020Carrying
Amount
Estimated
Fair
Value
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Financial assets
Cash and due from banks$93,838  $93,838  $93,838  $—  $—  
Federal funds sold638  638  —  638  —  
Loans, net2,299,087  2,297,086  —  —  2,297,086  
Mortgage loans held for sale101,579  102,531  —  102,531  —  
Accrued interest receivable13,901  13,901  —  13,901  —  
Restricted equity securities17,509  17,509  —  17,509  —  
Financial liabilities
Deposits$2,530,062  $2,537,890  $—  $—  $2,537,890  
Accrued interest payable2,918  2,918  —  2,918  —  
Subordinate debentures70,413  67,543  —  —  67,543  
Federal Home Loan Bank advances49,121  49,552  —  —  49,552  

December 31, 2019
Financial assets
Cash and due from banks$50,990  $50,990  $50,990  $—  $—  
Federal funds sold52  52  —  52  —  
Loans, net1,397,374  1,383,719  —  —  1,383,719  
Mortgage loans held for sale37,476  38,379  —  38,379  —  
Accrued interest receivable7,111  7,111  —  7,111  —  
Restricted equity securities11,279  11,279  —  11,279  —  
Financial liabilities
Deposits$1,583,789  $1,582,117  $—  $—  $1,582,117  
Accrued interest payable2,022  2,022  —  2,022  —  
Subordinate debentures70,883  71,454  —  —  71,454  
Federal Home Loan Bank advances10,737  10,755  —  —  10,755  
v3.20.2
Stock-based Compensation (Tables)
6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
Share-based Compensation, Stock Options, Activity
A summary of stock option activity for the six months ended June 30, 2020 is as follows:
SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at January 1, 2020149,293$18.81  6.68 years$553  
Granted—  $—  
Exercised(1,889)$11.47  
Forfeited or expired(12,700)$21.82  
Outstanding at June 30, 2020134,704$18.68  6.13 years$191  
Exercisable at June 30, 202074,004$15.63  4.82 years$163  
Schedule of Nonvested Share Activity
SharesWeighted Average
Grant-Date Fair Value
Non-vested options at January 1, 202074,600  $6.08
Granted—  $—
Vested(3,200) $5.91
Forfeited(10,700) $5.86
Non-vested options at June 30, 202060,700  $6.13
Activity Related to Non-Vested Restricted Stock
The following table shows the activity related to non-vested restricted stock and restricted stock unit awards for the six months ended June 30, 2020:
Restricted Stock UnitsRestricted Stock
Underlying SharesWeighted Average Grant-Date
Fair Value
SharesWeighted Average Grant-Date
Fair Value
Non-vested units/shares at January 1, 202047,750  $23.30  90,960  $25.31  
Granted10,000  12.63  —  —  
Vested(3,022) 23.30  (16,466) 23.41  
Forfeited(978) 23.30  (5,534) 23.35  
Non-vested units/shares at June 30, 202053,750  $21.31  68,960  $25.92  
v3.20.2
Regulatory Capital Requirements (Tables)
6 Months Ended
Jun. 30, 2020
Banking and Thrift, Other Disclosures [Abstract]  
Actual and Required Capital Amounts and Ratios
Capital amounts and ratios for Reliant Bancorp and the Bank (required) are presented below as of June 30, 2020 and December 31, 2019.
Actual
Regulatory
Capital
Minimum Required
Capital Including
Capital Conservation
Buffer
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
AmountRatioAmountRatioAmountRatio
June 30, 2020
Reliant Bancorp
Tier I leverage$243,428  8.47 %$114,960  4.00 %$143,700  5.00 %
Common equity tier I231,701  9.25 %175,341  7.00 %162,817  6.50 %
Tier I risk-based capital243,428  9.71 %213,094  8.50 %200,559  8.00 %
Total risk-based capital320,776  12.80 %263,150  10.50 %250,619  10.00 %
Bank
Tier I leverage$293,602  10.23 %$114,791  4.00 %$143,489  5.00 %
Common equity tier I293,602  11.74 %175,028  7.00 %162,526  6.50 %
Tier I risk-based capital293,602  11.74 %212,534  8.50 %200,032  8.00 %
Total risk-based capital312,264  12.49 %262,541  10.50 %250,039  10.00 %
December 31, 2019
Reliant Bancorp
Tier I leverage$176,748  9.74 %$72,586  4.00 %$90,733  5.00 %
Common equity tier I165,063  10.55 %109,520  7.00 %101,698  6.50 %
Tier I risk-based capital176,748  11.30 %132,952  8.50 %125,131  8.00 %
Total risk-based capital249,751  15.97 %164,207  10.50 %156,388  10.00 %
Bank
Tier I leverage$186,734  10.30 %$72,518  4.00 %$90,648  5.00 %
Common equity tier I186,734  11.95 %109,384  7.00 %101,571  6.50 %
Tier I risk-based capital186,734  11.95 %132,823  8.50 %125,010  8.00 %
Total risk-based capital199,737  12.79 %163,975  10.50 %156,167  10.00 %
v3.20.2
Earnings Per Share (Tables)
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Summary of the Components Comprising Basic and Diluted Earnings Per Share
The following is a summary of the components comprising basic and diluted earnings per common share of stock ("EPS"):

Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Basic EPS Computation
Net income attributable to common shareholders$7,868  $4,239  $7,653  $8,063  
Weighted average common shares outstanding16,496,817  11,196,898  14,196,254  11,300,095  
Basic earnings per common share$0.48  $0.38  $0.54  $0.71  
Diluted EPS Computation
Net income attributable to common shareholders$7,868  $4,239  $7,653  $8,063  
Weighted average common shares outstanding16,496,817  11,196,898  14,196,254  11,300,095  
Dilutive effect of stock options, restricted stock shares and units, and employee stock purchase plan32,263  89,729  44,911  78,300  
Adjusted weighted average common shares outstanding16,529,080  11,286,627  14,241,165  11,378,395  
Diluted earnings per common share$0.48  $0.38  $0.54  $0.71  
v3.20.2
Segment Reporting (Tables)
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Summarized Results of Operations by Business Segment
The following presents summarized results of operations for the Company’s business segments for the periods indicated:
Three Months Ended
June 30, 2020
Retail BankingResidential
Mortgage
Banking
Elimination
Entries
Consolidated
Net interest income$29,420  $536  $—  $29,956  
Provision for loan losses3,000  —  —  3,000  
Noninterest income2,174  2,240   4,422  
Noninterest expense (excluding merger expense)16,433  3,199  —  19,632  
Merger expense2,632  —  —  2,632  
Income tax expense (benefit)1,661  (27) —  1,634  
Net income (loss)7,868  (396)  7,480  
Noncontrolling interest in net loss of subsidiary—  396  (8) 388  
Net income attributable to common shareholders$7,868  $—  $—  $7,868  

 Three Months Ended
June 30, 2019
 Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$13,703  $110  $—  $13,813  
Provision for loan losses200  —  —  200  
Noninterest income1,473  1,235  (10) 2,698  
Noninterest expense (excluding merger expense)10,129  2,996  —  13,125  
Merger expense —  —   
Income tax expense (benefit)607  (106) —  501  
Net income (loss)4,239  (1,545) (10) 2,684  
Noncontrolling interest in net loss of subsidiary—  1,545  10  1,555  
Net income attributable to common shareholders$4,239  $—  $—  $4,239  

Six Months Ended June 30, 2020
Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$46,202  $869  $—  $47,071  
Provision for loan losses5,900  —  —  5,900  
Noninterest income3,883  3,804  17  7,704  
Noninterest expense (excluding merger expense)28,894  6,150  —  35,044  
Merger expense6,818  —  —  6,818  
Income tax expense (benefit)820  (96) —  724  
Net income (loss)7,653  (1,381) 17  6,289  
Noncontrolling interest in net loss of subsidiary—  1,381  (17) 1,364  
Net income attributable to common shareholders$7,653  $—  $—  $7,653  
Six Months Ended June 30, 2019
Retail BankingResidential Mortgage BankingElimination EntriesConsolidated
Net interest income$27,076  $198  $—  $27,274  
Provision for loan losses200  —  —  200  
Noninterest income2,851  1,810  (25) 4,636  
Noninterest expense (excluding merger expense)20,574  5,295  —  25,869  
Merger expense —  —   
Income tax expense (benefit)1,087  (214) —  873  
Net income (loss)8,063  (3,073) (25) 4,965  
Noncontrolling interest in net loss of subsidiary—  3,073  25  3,098  
Net income attributable to common shareholders$8,063  $—  $—  $8,063  
v3.20.2
Derivatives (Tables)
6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Interest Rate Swaps Designated as Cash Flow Hedges
Summary information related to the interest rate swaps designated as cash flow hedges as of June 30, 2020, is as follows:
Notional amounts$160,000  
Weighted average pay rates2.050 %
Weighted average receive rates1.679 %
Weighted average maturity 3.60 years
Unrealized losses$9,034  
Net Gain (Losses) Related to Derivative Instruments
Cash Flow Hedges
        
The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the three months ended June 30, 2020:

Amount of Gain (Loss) Recognized in OCI
(Effective Portion)
Amount of Gain (Loss) Reclassified from OCI to Interest IncomeAmount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion)
June 30, 2020
Interest rate contracts$(5,137) $—  $—  
Fair Value Hedges

The following table reflects the fair value hedges included in the Consolidated Statements of Income for the six months ended June 30, 2020 and 2019, respectively:
Interest rate contractsLocationJune 30, 2020June 30, 2019
Change in fair value on interest rate swaps hedging investmentsInterest income$(1,131) $(1,057) 
Cash Flow Hedges Included in the Consolidated Balance Sheets
The following table reflects the cash flow hedges included in the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively:
June 30, 2020December 31, 2019
Notional AmountFair ValueNotional AmountFair Value
Included in other liabilities:
Interest rate swaps related to:
Subordinate debentures$10,000  $819  $10,000  $439  
Short-term interest bearing liabilities150,000  8,215  100,000  1,639  
Total included in other liabilities$160,000  $9,034  $110,000  $2,078  
Fair Value Hedging Included in the Consolidated Balance Sheets
The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019, respectively:
June 30, 2020December 31, 2019
Notional AmountFair ValueNotional AmountFair Value
Included in other assets:
Interest rate swaps related to investments$—  $—  $—  $—  
Total included in other assets$—  $—  $—  $—  
Included in other liabilities:
Interest rate swaps related to investments19,605  1,761  19,605  630  
Total included in other liabilities$19,605  $1,761  $19,605  $630  
v3.20.2
Business Combinations (Tables)
6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
Calculation and Allocation of Purchase Price
The following table details the financial impact of the TCB Holdings Transaction, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:
Calculation of Purchase Price
Shares of Tennessee Community Bank Holdings, Inc. common stock outstanding as of January 1, 20201,055,041  
Exchange ratio for Reliant Bancorp, Inc. common stock0.769  
Reliant Bancorp, Inc. common stock shares issued811,210  
Reliant Bancorp, Inc. share price at January 1, 2020$22.24  
Estimated value of Reliant Bancorp, Inc. shares issued18,041
Cash settlement for Tennessee Community Bank Holdings, Inc. common stock ($17.13 per share)
18,073  
Cash settlement for Tennessee Community Bank Holdings, Inc.'s 26,450 outstanding stock options ($34.25 settlement price less weighted average exercise price of $18.00)
430  
Cash settlement for Reliant Bancorp, Inc. fractional shares ($22.36 per pro rata fractional share)
 
Estimated fair value of Tennessee Community Bank Holdings, Inc.$36,547  
Tennessee Community Bank Holdings, Inc., continued
Allocation of Purchase Price
Total consideration above$36,547  
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents11,026  
Investment securities available for sale56,336  
Loans, net of unearned income171,445  
Accrued interest receivable948  
Premises and equipment6,427  
Cash surrender value of life insurance contracts5,629  
Restricted equity securities909  
Core deposit intangible3,617  
Other assets833  
Deposits(210,538) 
Deferred tax liability(337) 
Borrowings(58) 
FHLB advances(13,102) 
Other liabilities(3,682) 
Total fair value of net assets acquired29,453  
Goodwill$7,094  
The following table details the financial impact of the FABK Transaction, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:

Calculation of Purchase Price
Shares of First Advantage Bancorp common stock outstanding as of April 1, 20203,935,165  
Conversion of restricted stock units to shares of common stock of First Advantage Bancorp as of April 1, 20202,000  
Total First Advantage Bancorp common stock outstanding as of April 1, 20203,937,165  
Exchange ratio for Reliant Bancorp, Inc. common stock1.17
Reliant Bancorp, Inc. common stock shares issued4,606,483  
Remove fractional shares(64) 
Reliant Bancorp, Inc. common stock shares issued4,606,419
Reliant Bancorp, Inc. share price at April 1, 2020$11.27  
Estimated value of Reliant Bancorp, Inc. shares issued51,914  
Cash settlement for Reliant Bancorp, Inc. fractional shares ($11.74 per pro rata fractional share)
1
Cash settlement for First Advantage Bancorp common stock ($3.00 per share)
11,805
Cash settlement for First Advantage Bancorp restricted stock units ($3.00 per share)
6
Cash settlement for First Advantage Bancorp's 34,800 outstanding stock options ($30.00 settlement price less weighted average exercise price of $19.44)
368
Estimated fair value of First Advantage Bancorp$64,094  
First Advantage Bancorp, continued

Allocation of Purchase Price
Total consideration above$64,094  
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents11,159  
Investment securities available for sale35,970  
Loans, net of unearned income622,423  
Mortgage loans held for sale, net5,878  
Premises and equipment7,965  
Deferred tax asset6,791  
Cash surrender value of life insurance contracts14,776  
Other real estate and repossessed assets1,259  
Core deposit intangible2,280  
Operating lease right-of-use assets6,536  
Other assets10,529  
Deposits(608,690) 
Borrowings(35,962) 
Operating lease liabilities(6,536) 
Other liabilities(10,606) 
Total fair value of net assets acquired63,772  
Goodwill$322  
Schedule of Operating Cost Savings and Other Business Synergies The Company expects to achieve operating cost savings and other business synergies as a result of the acquisitions which are also not reflected in the pro forma amounts.
Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Revenue(1)
$33,340  $28,791  $63,564  $56,739  
Net interest income$28,918  $24,648  $54,629  $49,603  
Net income attributable to common shareholders$7,073  $8,014  $5,176  $15,585  
(1) Net interest income plus noninterest income
v3.20.2
Leases (Tables)
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Schedule of Operating Lease
Information related to the Company's operating leases is presented below:
June 30, 2020
Operating leases right of use assets$15,452  
Operating lease liabilities$16,591  
Weighted average remaining lease term (in years)6.62
Weighted average discount rate4.33 %
Components of Lease Expense Included in Occupancy Expenses
The components of lease expense included in occupancy expenses for the three and six months ended June 30, 2020, were as follows:

Three months ended June 30, 2020Six months ended June 30, 2020
Operating lease cost $854  $1,482  
Short-term lease cost—  —  
Variable lease cost98178  
Total lease cost$952  $1,660  
Schedule of Maturity Analysis of Operating Lease Liabilities
A maturity analysis of operating lease liabilities and a reconciliation of undiscounted cash flows to the total operating lease liability is as follows:

Lease payments due on or beforeJune 30, 2020
June 30, 2021$3,923  
June 30, 20222,903  
June 30, 20232,681  
June 30, 20242,648  
June 30, 20252,504  
Thereafter5,101  
Total undiscounted cash flows19,760  
Discount on cash flows(3,169) 
Total lease liability$16,591  
v3.20.2
Summary of Significant Accounting Policies (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Jun. 30, 2020
Jan. 01, 2020
Noncontrolling Interest [Line Items]      
Operating lease liabilities   $ 16,591 $ 11,900
Operating leases right of use assets   $ 15,452 $ 11,973
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member    
Reliant Mortgage Ventures, LLC      
Noncontrolling Interest [Line Items]      
Governance rights control by the Bank (in percent)   51.00%  
v3.20.2
Securities - Available-for-sale Securities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]    
Total $ 236,698 $ 250,722
Gross Unrealized Gains 14,315 10,806
Gross Unrealized Losses (1,999) (1,235)
Estimated Fair Value 249,014 260,293
U. S. Treasury and other U. S. government agencies    
Debt Securities, Available-for-sale [Line Items]    
Total 54 59
Gross Unrealized Gains 1 0
Gross Unrealized Losses 0 0
Estimated Fair Value 55 59
State and municipal    
Debt Securities, Available-for-sale [Line Items]    
Total 171,979 186,283
Gross Unrealized Gains 13,865 10,413
Gross Unrealized Losses (118) (36)
Estimated Fair Value 185,726 196,660
Corporate bonds    
Debt Securities, Available-for-sale [Line Items]    
Total 11,250 7,880
Gross Unrealized Gains 99 97
Gross Unrealized Losses (83) (132)
Estimated Fair Value 11,266 7,845
Mortgage-backed securities    
Debt Securities, Available-for-sale [Line Items]    
Total 37,624 38,126
Gross Unrealized Gains 350 296
Gross Unrealized Losses (1,531) (661)
Estimated Fair Value 36,443 37,761
Asset-backed securities    
Debt Securities, Available-for-sale [Line Items]    
Total 15,791 18,374
Gross Unrealized Gains 0 0
Gross Unrealized Losses (267) (406)
Estimated Fair Value $ 15,524 $ 17,968
v3.20.2
Securities - Narrative (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
numberOfSecurities
Dec. 31, 2019
numberOfSecurities
Jun. 30, 2019
USD ($)
Investments, Debt and Equity Securities [Abstract]      
Securities pledged, carrying amount | $ $ 43,972   $ 46,918
Number of securities in unrealized loss position | numberOfSecurities 37 47  
v3.20.2
Securities - Available-for-sale Securities Classified by Contractual Maturity Date (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Amortized Cost    
Due within one year $ 500  
Due in one to five years 2,179  
Due in five to ten years 14,693  
Due after ten years 165,911  
Total 236,698 $ 250,722
Estimated Fair Value    
Due within one year 498  
Due in one to five years 2,180  
Due in five to ten years 15,379  
Due after ten years 178,990  
Total 249,014 260,293
Mortgage-backed securities    
Amortized Cost    
Securities 37,624  
Total 37,624 38,126
Estimated Fair Value    
Securities 36,443  
Total 36,443 37,761
Asset-backed securities    
Amortized Cost    
Securities 15,791  
Total 15,791 18,374
Estimated Fair Value    
Securities 15,524  
Total $ 15,524 $ 17,968
v3.20.2
Securities - Schedule of Temporary Impairment Losses, Investments (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Estimated Fair Value    
Less than 12 months $ 22,414 $ 18,064
12 months or more 27,382 29,262
Total 49,796 47,326
Unrealized Loss    
Less than 12 months 1,022 322
12 months or more 977 913
Total 1,999 1,235
State and municipal    
Estimated Fair Value    
Less than 12 months 1,879 1,960
12 months or more 0 0
Total 1,879 1,960
Unrealized Loss    
Less than 12 months 118 36
12 months or more 0 0
Total 118 36
Corporate bonds    
Estimated Fair Value    
Less than 12 months 4,669 0
12 months or more 499 2,499
Total 5,168 2,499
Unrealized Loss    
Less than 12 months 81 0
12 months or more 2 132
Total 83 132
Mortgage-backed securities    
Estimated Fair Value    
Less than 12 months 15,045 16,104
12 months or more 12,250 9,081
Total 27,295 25,185
Unrealized Loss    
Less than 12 months 822 286
12 months or more 709 375
Total 1,531 661
Asset-backed securities    
Estimated Fair Value    
Less than 12 months 821 0
12 months or more 14,633 17,682
Total 15,454 17,682
Unrealized Loss    
Less than 12 months 1 0
12 months or more 266 406
Total $ 267 $ 406
v3.20.2
Loans and Allowance for Loan Losses - Schedule of Loans and Financial Receivables (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Jun. 30, 2019
Dec. 31, 2018
Loans and Leases Receivable Disclosure [Line Items]        
Loans $ 2,322,509 $ 1,410,024    
Less        
Deferred loan fees 5,185 72    
Allowance for loan losses 18,237 12,578 $ 11,666 $ 10,892
Loans, net 2,299,087 1,397,374    
Commercial, Industrial and Agricultural        
Loans and Leases Receivable Disclosure [Line Items]        
Loans 452,628 245,515    
Less        
Allowance for loan losses 4,675 2,529 1,881 1,751
Real Estate | 1-4 Family Residential        
Loans and Leases Receivable Disclosure [Line Items]        
Loans 360,908 227,529    
Less        
Allowance for loan losses 1,454 1,280 1,455 1,333
Real Estate | 1-4 Family HELOC        
Loans and Leases Receivable Disclosure [Line Items]        
Loans 85,050 96,228    
Less        
Allowance for loan losses 975 624 686 656
Real Estate | Multi-family and Commercial        
Loans and Leases Receivable Disclosure [Line Items]        
Loans 883,751 536,845    
Less        
Allowance for loan losses 8,407 5,285 4,713 4,429
Real Estate | Construction, Land Development and Farmland        
Loans and Leases Receivable Disclosure [Line Items]        
Loans 337,459 273,872    
Less        
Allowance for loan losses 2,126 2,649 2,707 2,500
Consumer        
Loans and Leases Receivable Disclosure [Line Items]        
Loans 195,510 16,855    
Less        
Allowance for loan losses 584 177 188 184
Other        
Loans and Leases Receivable Disclosure [Line Items]        
Loans 7,203 13,180    
Less        
Allowance for loan losses $ 16 $ 34 $ 36 $ 39
v3.20.2
Loans and Allowance for Loan Losses - Schedule of Allowances for Loan Losses by Portfolio Segment (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     $ 12,578 $ 10,892
Charge-offs     (1,106) (219)
Recoveries     865 793
Provision $ 3,000 $ 200 5,900 200
Ending balance 18,237 11,666 18,237 11,666
Commercial, Industrial and Agricultural        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     2,529 1,751
Charge-offs     (539) (168)
Recoveries     70 294
Provision     2,615 4
Ending balance 4,675 1,881 4,675 1,881
Real Estate | Multi-family and Commercial        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     5,285 4,429
Charge-offs     0 0
Recoveries     11 59
Provision     3,111 225
Ending balance 8,407 4,713 8,407 4,713
Real Estate | Construction, Land Development and Farmland        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     2,649 2,500
Charge-offs     (114) 0
Recoveries     4 201
Provision     (413) 6
Ending balance 2,126 2,707 2,126 2,707
Real Estate | 1-4 Family Residential        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     1,280 1,333
Charge-offs     (60) (17)
Recoveries     747 216
Provision     (513) (77)
Ending balance 1,454 1,455 1,454 1,455
Real Estate | 1-4 Family HELOC        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     624 656
Charge-offs     (98) 0
Recoveries     3 11
Provision     446 19
Ending balance 975 686 975 686
Consumer        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     177 184
Charge-offs     (295) (21)
Recoveries     30 12
Provision     672 13
Ending balance 584 188 584 188
Other        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Beginning balance     34 39
Charge-offs     0 (13)
Recoveries     0 0
Provision     (18) 10
Ending balance $ 16 $ 36 $ 16 $ 36
v3.20.2
Loans and Allowance for Loan Losses - Allowance for Loan Losses and Recorded Investment by Portfolio Segment (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Jun. 30, 2019
Dec. 31, 2018
Allowance for loan losses        
Individually evaluated for impairment $ 818 $ 772    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 17,419 11,806    
Total 18,237 12,578 $ 11,666 $ 10,892
Loans        
Individually evaluated for impairment 7,494 6,262    
Acquired with credit impairment 4,923 1,223    
Collectively evaluated for impairment 2,310,092 1,402,539    
Total 2,322,509 1,410,024    
Commercial, Industrial and Agricultural        
Allowance for loan losses        
Individually evaluated for impairment 818 755    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 3,857 1,774    
Total 4,675 2,529 1,881 1,751
Loans        
Individually evaluated for impairment 1,218 1,154    
Acquired with credit impairment 441 0    
Collectively evaluated for impairment 450,969 244,361    
Total 452,628 245,515    
Real Estate | Multi-family and Commercial        
Allowance for loan losses        
Individually evaluated for impairment 0 0    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 8,407 5,285    
Total 8,407 5,285 4,713 4,429
Loans        
Individually evaluated for impairment 2,667 2,396    
Acquired with credit impairment 1,341 215    
Collectively evaluated for impairment 879,743 534,234    
Total 883,751 536,845    
Real Estate | Construction, Land Development and Farmland        
Allowance for loan losses        
Individually evaluated for impairment 0 17    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 2,126 2,632    
Total 2,126 2,649 2,707 2,500
Loans        
Individually evaluated for impairment 1,817 1,218    
Acquired with credit impairment 796 813    
Collectively evaluated for impairment 334,846 271,841    
Total 337,459 273,872    
Real Estate | 1-4 Family Residential        
Allowance for loan losses        
Individually evaluated for impairment 0 0    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 1,454 1,280    
Total 1,454 1,280 1,455 1,333
Loans        
Individually evaluated for impairment 1,474 1,120    
Acquired with credit impairment 1,005 195    
Collectively evaluated for impairment 358,429 226,214    
Total 360,908 227,529    
Real Estate | 1-4 Family HELOC        
Allowance for loan losses        
Individually evaluated for impairment 0 0    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 975 624    
Total 975 624 686 656
Loans        
Individually evaluated for impairment 318 374    
Acquired with credit impairment 14 0    
Collectively evaluated for impairment 84,718 95,854    
Total 85,050 96,228    
Consumer        
Allowance for loan losses        
Individually evaluated for impairment 0 0    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 584 177    
Total 584 177 188 184
Loans        
Individually evaluated for impairment 0 0    
Acquired with credit impairment 1,326 0    
Collectively evaluated for impairment 194,184 16,855    
Total 195,510 16,855    
Other        
Allowance for loan losses        
Individually evaluated for impairment 0 0    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 16 34    
Total 16 34 $ 36 $ 39
Loans        
Individually evaluated for impairment 0 0    
Acquired with credit impairment 0 0    
Collectively evaluated for impairment 7,203 13,180    
Total $ 7,203 $ 13,180    
v3.20.2
Loans and Allowance for Loan Losses - Narrative (Details)
2 Months Ended 3 Months Ended 6 Months Ended
Aug. 05, 2020
USD ($)
May 31, 2020
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
loan
Loans and Leases Receivable Disclosure [Line Items]            
Non-accrual loans     $ 7,541,000 $ 7,541,000   $ 4,071,000
Recorded investment, 90 days past due and still accruing     0 0   $ 64,000
Recorded investment, 90 days past due and still accruing, Number of loans | loan           1
Mortgage loans held for sale     101,579,000 101,579,000    
Modified loan amount         $ 0  
30-59 Days Past Due            
Loans and Leases Receivable Disclosure [Line Items]            
Mortgage loans held for sale     3,270,000 3,270,000   $ 184,000
60-89 Days Past Due            
Loans and Leases Receivable Disclosure [Line Items]            
Mortgage loans held for sale     0 0   0
CARES Act            
Loans and Leases Receivable Disclosure [Line Items]            
Financing receivable modification amount   $ 530,700,000        
CARES Act | Subsequent Event            
Loans and Leases Receivable Disclosure [Line Items]            
Financing receivable modification amount $ 39,000,000.0          
Performing Financial Instruments            
Loans and Leases Receivable Disclosure [Line Items]            
Non-accrual loans     2,392,000 2,392,000   1,332,000
Commercial, Industrial and Agricultural            
Loans and Leases Receivable Disclosure [Line Items]            
Non-accrual loans     928,000 928,000   572,000
SBA authorizations for PPP loans, amount     83,300,000      
Consumer            
Loans and Leases Receivable Disclosure [Line Items]            
Non-accrual loans     1,781,000 1,781,000   28,000
Credit Card Balances            
Loans and Leases Receivable Disclosure [Line Items]            
Recorded investment, 90 days past due and still accruing     8,000 8,000    
Multi-family and Commercial | Real Estate            
Loans and Leases Receivable Disclosure [Line Items]            
Non-accrual loans     2,711,000 2,711,000   1,276,000
1-4 Family Residential | Real Estate            
Loans and Leases Receivable Disclosure [Line Items]            
Non-accrual loans     $ 1,468,000 $ 1,468,000   $ 1,344,000
Minimum | Consumer            
Loans and Leases Receivable Disclosure [Line Items]            
Loans and leases receivable repayment period       1 year    
Minimum | Multi-family and Commercial | Real Estate            
Loans and Leases Receivable Disclosure [Line Items]            
Percentage of loans in repayment     50.00% 50.00%    
Minimum | 1-4 Family Residential | Real Estate            
Loans and Leases Receivable Disclosure [Line Items]            
Loan facility, amortization period       15 years    
Loans commitment, maturity period       5 years    
Minimum | Uncollateralized | Consumer            
Loans and Leases Receivable Disclosure [Line Items]            
Loans and leases receivable repayment period       15 years    
Maximum | Consumer            
Loans and Leases Receivable Disclosure [Line Items]            
Loans and leases receivable repayment period       5 years    
Maximum | 1-4 Family Residential | Real Estate            
Loans and Leases Receivable Disclosure [Line Items]            
Loan facility, amortization period       30 years    
Loans commitment, maturity period       15 years    
Maximum | Uncollateralized | Consumer            
Loans and Leases Receivable Disclosure [Line Items]            
Loans and leases receivable repayment period       23 years    
v3.20.2
Loans and Allowance for Loan Losses - Summary of Non-accrual Loans by Class of Loan (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]    
Non-accrual loans $ 7,541 $ 4,071
Commercial, Industrial and Agricultural    
Loans and Leases Receivable Disclosure [Line Items]    
Non-accrual loans 928 572
Real Estate | Multi-family and Commercial    
Loans and Leases Receivable Disclosure [Line Items]    
Non-accrual loans 2,711 1,276
Real Estate | Construction, Land Development and Farmland    
Loans and Leases Receivable Disclosure [Line Items]    
Non-accrual loans 412 555
Real Estate | 1-4 Family Residential    
Loans and Leases Receivable Disclosure [Line Items]    
Non-accrual loans 1,468 1,344
Real Estate | 1-4 Family HELOC    
Loans and Leases Receivable Disclosure [Line Items]    
Non-accrual loans 241 296
Consumer    
Loans and Leases Receivable Disclosure [Line Items]    
Non-accrual loans $ 1,781 $ 28
v3.20.2
Loans and Allowance for Loan Losses - Summary of Individually Impaired Loans by Class of Loans (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]    
Unpaid Principal Balance $ 18,308 $ 7,921
Recorded Investment with no Allowance for Loan Losses Recorded 11,428 6,160
Recorded Investment with Allowance for Loan Losses Recorded 989 1,325
Total Recorded Investment 12,417 7,485
Related Allowance for Loan Losses 818 772
Commercial, Industrial and Agricultural    
Loans and Leases Receivable Disclosure [Line Items]    
Unpaid Principal Balance 2,845 1,154
Recorded Investment with no Allowance for Loan Losses Recorded 670 0
Recorded Investment with Allowance for Loan Losses Recorded 989 1,154
Total Recorded Investment 1,659 1,154
Related Allowance for Loan Losses 818 755
Real Estate | Multi-family and Commercial    
Loans and Leases Receivable Disclosure [Line Items]    
Unpaid Principal Balance 5,691 2,624
Recorded Investment with no Allowance for Loan Losses Recorded 4,008 2,611
Recorded Investment with Allowance for Loan Losses Recorded 0 0
Total Recorded Investment 4,008 2,611
Related Allowance for Loan Losses 0 0
Real Estate | Construction, Land Development and Farmland    
Loans and Leases Receivable Disclosure [Line Items]    
Unpaid Principal Balance 3,081 2,348
Recorded Investment with no Allowance for Loan Losses Recorded 2,613 1,860
Recorded Investment with Allowance for Loan Losses Recorded 0 171
Total Recorded Investment 2,613 2,031
Related Allowance for Loan Losses 0 17
Real Estate | 1-4 Family Residential    
Loans and Leases Receivable Disclosure [Line Items]    
Unpaid Principal Balance 3,121 1,419
Recorded Investment with no Allowance for Loan Losses Recorded 2,479 1,315
Recorded Investment with Allowance for Loan Losses Recorded 0 0
Total Recorded Investment 2,479 1,315
Related Allowance for Loan Losses 0 0
Real Estate | 1-4 Family HELOC    
Loans and Leases Receivable Disclosure [Line Items]    
Unpaid Principal Balance 438 376
Recorded Investment with no Allowance for Loan Losses Recorded 332 374
Recorded Investment with Allowance for Loan Losses Recorded 0 0
Total Recorded Investment 332 374
Related Allowance for Loan Losses 0 $ 0
Consumer    
Loans and Leases Receivable Disclosure [Line Items]    
Unpaid Principal Balance 3,132  
Recorded Investment with no Allowance for Loan Losses Recorded 1,326  
Recorded Investment with Allowance for Loan Losses Recorded 0  
Total Recorded Investment 1,326  
Related Allowance for Loan Losses $ 0  
v3.20.2
Loans and Allowance for Loan Losses - Summary of Average Recorded Investment in Impaired Loans (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Loans and Leases Receivable Disclosure [Line Items]    
Average balance of impaired loans $ 9,036 $ 7,835
Commercial, Industrial and Agricultural    
Loans and Leases Receivable Disclosure [Line Items]    
Average balance of impaired loans 1,200 791
Real Estate | Multi-family and Commercial    
Loans and Leases Receivable Disclosure [Line Items]    
Average balance of impaired loans 3,076 2,548
Real Estate | Construction, Land Development and Farmland    
Loans and Leases Receivable Disclosure [Line Items]    
Average balance of impaired loans 2,017 2,747
Real Estate | 1-4 Family Residential    
Loans and Leases Receivable Disclosure [Line Items]    
Average balance of impaired loans 1,915 1,639
Real Estate | 1-4 Family HELOC    
Loans and Leases Receivable Disclosure [Line Items]    
Average balance of impaired loans 380 99
Consumer    
Loans and Leases Receivable Disclosure [Line Items]    
Average balance of impaired loans $ 448 $ 11
v3.20.2
Loans and Allowance for Loan Losses - Summary of Credit Quality Indicators by Class of Loan (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]    
Loans $ 2,322,509 $ 1,410,024
Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 2,302,489 1,395,885
Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 3,900 3,901
Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 16,120 10,238
Commercial, Industrial and Agricultural    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 452,628 245,515
Commercial, Industrial and Agricultural | Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 448,744 241,089
Commercial, Industrial and Agricultural | Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 1,551 2,382
Commercial, Industrial and Agricultural | Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 2,333 2,044
Real Estate | 1-4 Family Residential    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 360,908 227,529
Real Estate | 1-4 Family Residential | Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 357,377 225,809
Real Estate | 1-4 Family Residential | Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 115 0
Real Estate | 1-4 Family Residential | Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 3,416 1,720
Real Estate | 1-4 Family HELOC    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 85,050 96,228
Real Estate | 1-4 Family HELOC | Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 84,718 95,678
Real Estate | 1-4 Family HELOC | Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 0 0
Real Estate | 1-4 Family HELOC | Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 332 550
Real Estate | Multi-family and Commercial    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 883,751 536,845
Real Estate | Multi-family and Commercial | Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 877,359 531,055
Real Estate | Multi-family and Commercial | Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 705 1,519
Real Estate | Multi-family and Commercial | Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 5,687 4,271
Real Estate | Construction, Land Development and Farmland    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 337,459 273,872
Real Estate | Construction, Land Development and Farmland | Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 335,771 272,440
Real Estate | Construction, Land Development and Farmland | Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 0 0
Real Estate | Construction, Land Development and Farmland | Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 1,688 1,432
Consumer    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 195,510 16,855
Consumer | Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 192,837 16,634
Consumer | Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 9 0
Consumer | Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 2,664 221
Other    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 7,203 13,180
Other | Pass    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 5,683 13,180
Other | Special Mention    
Loans and Leases Receivable Disclosure [Line Items]    
Loans 1,520 0
Other | Substandard    
Loans and Leases Receivable Disclosure [Line Items]    
Loans $ 0 $ 0
v3.20.2
Loans and Allowance for Loan Losses - Summary of Past Due (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]    
Past due $ 8,343 $ 3,682
Current 2,314,166 1,406,342
Total 2,322,509 1,410,024
30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 2,208 1,358
60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 1,660 266
Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 4,475 2,058
Commercial, Industrial and Agricultural    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 1,095 655
Current 451,533 244,860
Total 452,628 245,515
Commercial, Industrial and Agricultural | 30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 600 79
Commercial, Industrial and Agricultural | 60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 5 4
Commercial, Industrial and Agricultural | Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 490 572
Real Estate | 1-4 Family Residential    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 2,033 966
Current 358,875 226,563
Total 360,908 227,529
Real Estate | 1-4 Family Residential | 30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 790 501
Real Estate | 1-4 Family Residential | 60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 760 236
Real Estate | 1-4 Family Residential | Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 483 229
Real Estate | 1-4 Family HELOC    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 198 296
Current 84,852 95,932
Total 85,050 96,228
Real Estate | 1-4 Family HELOC | 30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 0 0
Real Estate | 1-4 Family HELOC | 60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 0 0
Real Estate | 1-4 Family HELOC | Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 198 296
Real Estate | Multi-family and Commercial    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 2,166 1,043
Current 881,585 535,802
Total 883,751 536,845
Real Estate | Multi-family and Commercial | 30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 0 485
Real Estate | Multi-family and Commercial | 60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 0 0
Real Estate | Multi-family and Commercial | Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 2,166 558
Real Estate | Construction, Land Development and Farmland    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 1,205 594
Current 336,254 273,278
Total 337,459 273,872
Real Estate | Construction, Land Development and Farmland | 30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 411 255
Real Estate | Construction, Land Development and Farmland | 60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 569 0
Real Estate | Construction, Land Development and Farmland | Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 225 339
Consumer    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 1,646 128
Current 193,864 16,727
Total 195,510 16,855
Consumer | 30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 407 38
Consumer | 60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 326 26
Consumer | Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 913 64
Other    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 0 0
Current 7,203 13,180
Total 7,203 13,180
Other | 30-59 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 0 0
Other | 60-89 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due 0 0
Other | Greater Than 90 Days Past Due    
Loans and Leases Receivable Disclosure [Line Items]    
Past due $ 0 $ 0
v3.20.2
Loans and Allowance for Loan Losses - Troubled Debt Restructurings (Details)
$ in Thousands
6 Months Ended
Jun. 30, 2020
USD ($)
numberOfSecurities
Financing Receivable, Troubled Debt Restructuring [Line Items]  
Number of Contracts | numberOfSecurities 3
Pre-Modification Outstanding Recorded Investments $ 1,265
Post-Modification Outstanding Recorded Investments $ 1,265
Commercial, Industrial and Agricultural  
Financing Receivable, Troubled Debt Restructuring [Line Items]  
Number of Contracts | numberOfSecurities 1
Pre-Modification Outstanding Recorded Investments $ 150
Post-Modification Outstanding Recorded Investments $ 150
Real Estate | Multi-family and Commercial  
Financing Receivable, Troubled Debt Restructuring [Line Items]  
Number of Contracts | numberOfSecurities 1
Pre-Modification Outstanding Recorded Investments $ 721
Post-Modification Outstanding Recorded Investments $ 721
Real Estate | 1-4 Family Residential  
Financing Receivable, Troubled Debt Restructuring [Line Items]  
Number of Contracts | numberOfSecurities 1
Pre-Modification Outstanding Recorded Investments $ 394
Post-Modification Outstanding Recorded Investments $ 394
v3.20.2
Loans and Allowance for Loan Losses - Summary of Carrying Amount of Loans (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]    
Certain Loans and Debt Securities Acquired in Transfer, with Related Allowance for Credit Losses Due to Subsequent Impairment $ 8,324 $ 1,469
Less remaining purchase discount 3,401 246
Allowance for loan losses 0 0
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net 4,923 1,223
Commercial, Industrial and Agricultural    
Loans and Leases Receivable Disclosure [Line Items]    
Certain Loans and Debt Securities Acquired in Transfer, with Related Allowance for Credit Losses Due to Subsequent Impairment 1,192 0
Real Estate | Multi-family and Commercial    
Loans and Leases Receivable Disclosure [Line Items]    
Certain Loans and Debt Securities Acquired in Transfer, with Related Allowance for Credit Losses Due to Subsequent Impairment 2,372 217
Real Estate | Construction, Land Development and Farmland    
Loans and Leases Receivable Disclosure [Line Items]    
Certain Loans and Debt Securities Acquired in Transfer, with Related Allowance for Credit Losses Due to Subsequent Impairment 1,012 1,021
Real Estate | 1-4 Family Residential    
Loans and Leases Receivable Disclosure [Line Items]    
Certain Loans and Debt Securities Acquired in Transfer, with Related Allowance for Credit Losses Due to Subsequent Impairment 1,314 231
Real Estate | 1-4 Family HELOC    
Loans and Leases Receivable Disclosure [Line Items]    
Certain Loans and Debt Securities Acquired in Transfer, with Related Allowance for Credit Losses Due to Subsequent Impairment 18 0
Consumer    
Loans and Leases Receivable Disclosure [Line Items]    
Certain Loans and Debt Securities Acquired in Transfer, with Related Allowance for Credit Losses Due to Subsequent Impairment $ 2,416 $ 0
v3.20.2
Loans and Allowance for Loan Losses - Activity Related to Accretable Portion of Loans Acquired (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]    
Beginning balance $ 98 $ 110
New loans purchased 870 0
Year-to-date settlements (80) (7)
Ending balance $ 888 $ 103
v3.20.2
Other Real Estate (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Real Estate Properties [Line Items]          
Other real estate, net $ 2,514   $ 2,514   $ 750
Gain on sale of other real estate 11 $ 0 25 $ 0  
Mortgage loans in process of foreclosure, amount 320   320    
Expenses related to other real estate 4   4    
First Advantage Bancorp          
Real Estate Properties [Line Items]          
Properties acquired 208   208    
Retired Bank Facilities          
Real Estate Properties [Line Items]          
Other real estate, net 2,420   2,420    
Manufactured Housing Properties          
Real Estate Properties [Line Items]          
Other real estate, net $ 94   $ 94    
v3.20.2
Fair Values of Assets and Liabilities - Schedule of Fair Value of Assets and Liabilities Measured on Recurring and Non-recurring Basis (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale $ 249,014 $ 260,293
Other real estate 2,514 750
U. S. Treasury and other U. S. government agencies    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 55 59
State and municipal    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 185,726 196,660
Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 11,266 7,845
Mortgage-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 36,443 37,761
Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 15,524 17,968
Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Asset   688
Liabilities 10,795 3,396
Recurring | U. S. Treasury and other U. S. government agencies    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 55 59
Recurring | State and municipal    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 185,726 196,660
Recurring | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 11,266 7,845
Recurring | Mortgage-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 36,443 37,761
Recurring | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 15,524 17,968
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Asset   0
Liabilities 0 0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U. S. Treasury and other U. S. government agencies    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | State and municipal    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Asset   688
Liabilities 10,795 3,396
Recurring | Significant Other Observable Inputs (Level 2) | U. S. Treasury and other U. S. government agencies    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 55 59
Recurring | Significant Other Observable Inputs (Level 2) | State and municipal    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 185,726 196,660
Recurring | Significant Other Observable Inputs (Level 2) | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 11,266 7,845
Recurring | Significant Other Observable Inputs (Level 2) | Mortgage-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 36,443 37,761
Recurring | Significant Other Observable Inputs (Level 2) | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 15,524 17,968
Recurring | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative Asset   0
Liabilities 0 0
Recurring | Significant Unobservable Inputs (Level 3) | U. S. Treasury and other U. S. government agencies    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Significant Unobservable Inputs (Level 3) | State and municipal    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Significant Unobservable Inputs (Level 3) | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Significant Unobservable Inputs (Level 3) | Mortgage-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Recurring | Significant Unobservable Inputs (Level 3) | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Securities available for sale 0 0
Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired loans 171 553
Other real estate 2,514 750
Other repossessions 1,508 0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired loans 0 0
Other real estate 0 0
Other repossessions 0 0
Nonrecurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired loans 0 0
Other real estate 0 0
Other repossessions 0 0
Nonrecurring | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired loans 171 553
Other real estate 2,514 750
Other repossessions $ 1,508 $ 0
v3.20.2
Fair Values of Assets and Liabilities - Summary of Quantitative Information of Assets Measured at Fair Value on Nonrecurring Basis by Utilized Level 3 Inputs (Details) - Estimated costs to sell - Range (Weighted Average) - Significant Unobservable Inputs (Level 3) - Nonrecurring
Jun. 30, 2020
Dec. 31, 2019
Appraisal    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired loans 0.10 0.10
Other real estate 0.10 0.10
Third-party guidelines    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Other repossessions 0.10 0.10
v3.20.2
Fair Values of Assets and Liabilities - Estimated Fair Value of Financial Instruments (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Carrying Amount    
Financial assets    
Cash and due from banks $ 93,838 $ 50,990
Federal funds sold 638 52
Loans, net 2,299,087 1,397,374
Mortgage loans held for sale 101,579 37,476
Accrued interest receivable 13,901 7,111
Restricted equity securities 17,509 11,279
Financial liabilities    
Deposits 2,530,062 1,583,789
Accrued interest payable 2,918 2,022
Subordinate debentures 70,413 70,883
Federal Home Loan Bank advances 49,121 10,737
Estimated Fair Value    
Financial assets    
Cash and due from banks 93,838 50,990
Federal funds sold 638 52
Loans, net 2,297,086 1,383,719
Mortgage loans held for sale 102,531 38,379
Accrued interest receivable 13,901 7,111
Restricted equity securities 17,509 11,279
Financial liabilities    
Deposits 2,537,890 1,582,117
Accrued interest payable 2,918 2,022
Subordinate debentures 67,543 71,454
Federal Home Loan Bank advances 49,552 10,755
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Financial assets    
Cash and due from banks 93,838 50,990
Federal funds sold 0 0
Loans, net 0 0
Mortgage loans held for sale 0 0
Accrued interest receivable 0 0
Restricted equity securities 0 0
Financial liabilities    
Deposits 0 0
Accrued interest payable 0 0
Subordinate debentures 0 0
Federal Home Loan Bank advances 0 0
Estimated Fair Value | Significant Other Observable Inputs (Level 2)    
Financial assets    
Cash and due from banks 0 0
Federal funds sold 638 52
Loans, net 0 0
Mortgage loans held for sale 102,531 38,379
Accrued interest receivable 13,901 7,111
Restricted equity securities 17,509 11,279
Financial liabilities    
Deposits 0 0
Accrued interest payable 2,918 2,022
Subordinate debentures 0 0
Federal Home Loan Bank advances 0 0
Estimated Fair Value | Significant Unobservable Inputs (Level 3)    
Financial assets    
Cash and due from banks 0 0
Federal funds sold 0 0
Loans, net 2,297,086 1,383,719
Mortgage loans held for sale 0 0
Accrued interest receivable 0 0
Restricted equity securities 0 0
Financial liabilities    
Deposits 2,537,890 1,582,117
Accrued interest payable 0 0
Subordinate debentures 67,543 71,454
Federal Home Loan Bank advances $ 49,552 $ 10,755
v3.20.2
Stock-based Compensation - Narrative (Details) - USD ($)
$ in Thousands
Mar. 10, 2015
Jun. 30, 2020
Jun. 18, 2015
Dec. 31, 2006
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Unrecognized future compensation expense related to stock options   $ 267    
Equity Incentive Plan 2015        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares authorized (in shares)     900,000  
Employee Stock Option        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Exercise period for stock option awards 10 years      
Employee Stock Option | Commerce Union Bank Stock Option Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares authorized (in shares)       625,000
Employee Stock Option | Commerce Union Bancshares, Inc. Amended and Restated Stock Option Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares authorized (in shares) 1,250,000      
Restricted Stock and Restricted Stock Units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Unrecognized compensation cost related to non-vested restricted share awards   $ 981    
v3.20.2
Stock-based Compensation - Stock Option Activity (Details)
$ / shares in Units, $ in Thousands
6 Months Ended 12 Months Ended
Jun. 30, 2020
USD ($)
$ / shares
shares
Dec. 31, 2019
USD ($)
$ / shares
shares
Shares    
Outstanding, Beginning (in shares) | shares 149,293  
Granted (in shares) | shares 0  
Exercised (in shares) | shares (1,889)  
Forfeited or expired (in shares) | shares (12,700)  
Outstanding, Ending (in shares) | shares 134,704 149,293
Exercisable (in shares) | shares 74,004  
Weighted Average Exercise Price    
Outstanding, Beginning (in dollars per share) | $ / shares $ 18.81  
Granted (in dollars per share) | $ / shares 0  
Exercised (in dollars per share) | $ / shares 11.47  
Forfeited or expired (in dollars per share) | $ / shares 21.82  
Outstanding, Ending (in dollars per share) | $ / shares 18.68 $ 18.81
Exercisable (in dollars per share) | $ / shares $ 15.63  
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value    
Outstanding, Weighted Average Remaining Contractual Term 6 years 1 month 17 days 6 years 8 months 4 days
Exercised, Weighted Average Remaining Contractual Term  
Exercisable, Weighted Average Remaining Contractual Term 4 years 9 months 25 days  
Outstanding, Aggregate Intrinsic Value | $ $ 191 $ 553
Exercised, Aggregate Intrinsic Value | $  
Exercisable, Aggregate Intrinsic Value | $ $ 163  
v3.20.2
Stock-based Compensation - Nonvested Stock Option Activity (Details)
6 Months Ended
Jun. 30, 2020
$ / shares
shares
Shares  
Non-vested options, Beginning (in shares) | shares 74,600
Granted (in shares) | shares 0
Vested (in shares) | shares (3,200)
Forfeited (in shares) | shares (10,700)
Non-vested options, Ending (in shares) | shares 60,700
Weighted Average Grant-Date Fair Value  
Non-vested options, beginning (in dollars per share) | $ / shares $ 6.08
Granted (in dollars per share) | $ / shares 0
Vested (in dollars per share) | $ / shares 5.91
Forfeited (in dollars per share) | $ / shares 5.86
Non-vested options, ending (in dollars per share) | $ / shares $ 6.13
v3.20.2
Stock-based Compensation - Nonvested Restricted Stock Activity (Details)
6 Months Ended
Jun. 30, 2020
$ / shares
shares
Restricted Stock Units  
Shares  
Non-vested units/shares, Beginning (in shares) | shares 47,750
Granted (in shares) | shares 10,000
Vested (in shares) | shares (3,022)
Forfeited (in shares) | shares (978)
Non-vested units/shares, Ending (in shares) | shares 53,750
Weighted Average Grant-Date Fair Value  
Non-vested units/shares, Beginning (in dollars per share) | $ / shares $ 23.30
Granted (in dollars per share) | $ / shares 12.63
Vested (in dollars per share) | $ / shares 23.30
Forfeited (in dollars per share) | $ / shares 23.30
Non-vested units/shares, Ending (in dollars per share) | $ / shares $ 21.31
Restricted Stock  
Shares  
Non-vested units/shares, Beginning (in shares) | shares 90,960
Granted (in shares) | shares 0
Vested (in shares) | shares (16,466)
Forfeited (in shares) | shares (5,534)
Non-vested units/shares, Ending (in shares) | shares 68,960
Weighted Average Grant-Date Fair Value  
Non-vested units/shares, Beginning (in dollars per share) | $ / shares $ 25.31
Granted (in dollars per share) | $ / shares 0
Vested (in dollars per share) | $ / shares 23.41
Forfeited (in dollars per share) | $ / shares 23.35
Non-vested units/shares, Ending (in dollars per share) | $ / shares $ 25.92
v3.20.2
Regulatory Capital Requirements (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
Dec. 31, 2019
USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]    
Tier I leverage $ 243,428 $ 176,748
Tier I leverage, ratio 0.0847 0.0974
Tier I leverage, minimum required capital including capital conservation buffer $ 114,960 $ 72,586
Tier I leverage, minimum required capital including capital conservation buffer, ratio 4.00% 4.00%
Tier I leverage, to be well capitalized under prompt corrective action provisions $ 143,700 $ 90,733
Tier I leverage, to be well capitalized under prompt corrective action provisions, ratio 0.0500 0.0500
Common equity tier 1 $ 231,701 $ 165,063
Common equity tier 1, ratio 0.0925 0.1055
Common equity tier 1, minimum required capital including capital conservation buffer $ 175,341 $ 109,520
Common equity tier 1, minimum required capital including capital conservation buffer, ratio 7.00% 7.00%
Common equity tier 1, to be well capitalized under prompt corrective action provisions $ 162,817 $ 101,698
Common equity tier 1, to be well capitalized under prompt corrective action provisions, ratio 6.50% 6.50%
Tier I risk-based capital $ 243,428 $ 176,748
Tier I risk-based capital, ratio 0.0971 0.1130
Tier I risk-based capital, minimum required capital including capital conservation buffer $ 213,094 $ 132,952
Tier I risk-based capital, minimum required capital including capital conservation buffer, ratio 8.50% 8.50%
Tier I risk-based capital, to be well capitalized under prompt corrective action provisions $ 200,559 $ 125,131
Tier I risk-based capital, to be well capitalized under prompt corrective action provisions, ratio 0.0800 0.0800
Total risk-based capital $ 320,776 $ 249,751
Total risk-based capital, ratio 0.1280 0.1597
Total risk-based capital, minimum required capital including capital conservation buffer $ 263,150 $ 164,207
Total risk-based capital, minimum required capital including capital conservation buffer, ratio 10.50% 10.50%
Total risk-based capital, to be well capitalized under prompt corrective action provisions $ 250,619 $ 156,388
Total risk-based capital, to be well capitalized under prompt corrective action provisions, ratio 0.1000 0.1000
Reliant Bank    
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]    
Tier I leverage $ 293,602 $ 186,734
Tier I leverage, ratio 0.1023 0.1030
Tier I leverage, minimum required capital including capital conservation buffer $ 114,791 $ 72,518
Tier I leverage, minimum required capital including capital conservation buffer, ratio 4.00% 4.00%
Tier I leverage, to be well capitalized under prompt corrective action provisions $ 143,489 $ 90,648
Tier I leverage, to be well capitalized under prompt corrective action provisions, ratio 0.0500 0.0500
Common equity tier 1 $ 293,602 $ 186,734
Common equity tier 1, ratio 0.1174 0.1195
Common equity tier 1, minimum required capital including capital conservation buffer $ 175,028 $ 109,384
Common equity tier 1, minimum required capital including capital conservation buffer, ratio 7.00% 7.00%
Common equity tier 1, to be well capitalized under prompt corrective action provisions $ 162,526 $ 101,571
Common equity tier 1, to be well capitalized under prompt corrective action provisions, ratio 6.50% 6.50%
Tier I risk-based capital $ 293,602 $ 186,734
Tier I risk-based capital, ratio 0.1174 0.1195
Tier I risk-based capital, minimum required capital including capital conservation buffer $ 212,534 $ 132,823
Tier I risk-based capital, minimum required capital including capital conservation buffer, ratio 8.50% 8.50%
Tier I risk-based capital, to be well capitalized under prompt corrective action provisions $ 200,032 $ 125,010
Tier I risk-based capital, to be well capitalized under prompt corrective action provisions, ratio 0.0800 0.0800
Total risk-based capital $ 312,264 $ 199,737
Total risk-based capital, ratio 0.1249 0.1279
Total risk-based capital, minimum required capital including capital conservation buffer $ 262,541 $ 163,975
Total risk-based capital, minimum required capital including capital conservation buffer, ratio 10.50% 10.50%
Total risk-based capital, to be well capitalized under prompt corrective action provisions $ 250,039 $ 156,167
Total risk-based capital, to be well capitalized under prompt corrective action provisions, ratio 0.1000 0.1000
v3.20.2
Earnings Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Basic EPS Computation        
Net income attributable to common shareholders $ 7,868 $ 4,239 $ 7,653 $ 8,063
Weighted average common shares outstanding (in shares) 16,496,817 11,196,898 14,196,254 11,300,095
Basic earnings per common share (in dollars per share) $ 0.48 $ 0.38 $ 0.54 $ 0.71
Diluted EPS Computation        
Net income attributable to common shareholders $ 7,868 $ 4,239 $ 7,653 $ 8,063
Dilutive effect of stock options, restricted shares and employee stock purchase plan (in shares) 32,263 89,729 44,911 78,300
Adjusted weighted average common shares outstanding (in shares) 16,529,080 11,286,627 14,241,165 11,378,395
Diluted earnings per common share (in dollars per share) $ 0.48 $ 0.38 $ 0.54 $ 0.71
v3.20.2
Segment Reporting - Narrative (Details)
6 Months Ended
Jun. 30, 2020
segment
Segment Reporting [Abstract]  
Number of reportable segments 2
v3.20.2
Segment Reporting - Summary of Results of Operations for Company's Business Segments (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Segment Reporting Information [Line Items]            
Net interest income $ 29,956   $ 13,813   $ 47,071 $ 27,274
Provision for loan losses 3,000   200   5,900 200
Noninterest income 4,422   2,698   7,704 4,636
Noninterest expense (excluding merger expense) 19,632   13,125   35,044 25,869
Merger expenses 2,632   1   6,818 3
Income tax expense (benefit) 1,634   501   724 873
CONSOLIDATED NET INCOME 7,480 $ (1,191) 2,684 $ 2,281 6,289 4,965
Noncontrolling interest in net loss of subsidiary 388   1,555   1,364 3,098
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 7,868   4,239   7,653 8,063
Operating Segments | Retail Banking            
Segment Reporting Information [Line Items]            
Net interest income 29,420   13,703   46,202 27,076
Provision for loan losses 3,000   200   5,900 200
Noninterest income 2,174   1,473   3,883 2,851
Noninterest expense (excluding merger expense) 16,433   10,129   28,894 20,574
Merger expenses 2,632   1   6,818 3
Income tax expense (benefit) 1,661   607   820 1,087
CONSOLIDATED NET INCOME 7,868   4,239   7,653 8,063
Noncontrolling interest in net loss of subsidiary 0   0   0 0
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 7,868   4,239   7,653 8,063
Operating Segments | Residential Mortgage Banking            
Segment Reporting Information [Line Items]            
Net interest income 536   110   869 198
Provision for loan losses 0   0   0 0
Noninterest income 2,240   1,235   3,804 1,810
Noninterest expense (excluding merger expense) 3,199   2,996   6,150 5,295
Merger expenses 0   0   0 0
Income tax expense (benefit) (27)   (106)   (96) (214)
CONSOLIDATED NET INCOME (396)   (1,545)   (1,381) (3,073)
Noncontrolling interest in net loss of subsidiary 396   1,545   1,381 3,073
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 0   0   0 0
Elimination Entries            
Segment Reporting Information [Line Items]            
Net interest income 0   0   0 0
Provision for loan losses 0   0   0 0
Noninterest income 8   (10)   17 (25)
Noninterest expense (excluding merger expense) 0   0   0 0
Merger expenses 0   0   0 0
Income tax expense (benefit) 0   0   0 0
CONSOLIDATED NET INCOME 8   (10)   17 (25)
Noncontrolling interest in net loss of subsidiary (8)   10   (17) 25
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 0   $ 0   $ 0 $ 0
v3.20.2
Derivatives - Narrative (Details)
Jun. 30, 2020
USD ($)
Cash Flow Hedging | Derivative liabilities  
Derivative [Line Items]  
Notional amounts $ 160,000,000
v3.20.2
Derivatives - Interest Rate Swaps Designated as Cash Flow Hedges (Details) - Cash Flow Hedging - Derivative liabilities
6 Months Ended
Jun. 30, 2020
USD ($)
Derivative [Line Items]  
Notional amounts $ 160,000,000
Weighted average pay rates 2.05%
Weighted average receive rates 1.679%
Weighted average maturity 3 years 7 months 6 days
Unrealized losses $ 9,034,000
v3.20.2
Derivatives - Net Gains (Losses) Relating to Cash Flow Derivative Instruments (Details) - Cash Flow Hedging - Derivative liabilities
$ in Thousands
3 Months Ended
Jun. 30, 2020
USD ($)
Derivative [Line Items]  
Amount of Gain (Loss) Recognized in OCI (Effective Portion) $ (5,137)
Amount of Gain (Loss) Reclassified from OCI to Interest Income 0
Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) $ 0
v3.20.2
Derivatives - Cash Flow Hedges and Fair Value Hedges Included in the Consolidated Balance Sheets (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Cash Flow Hedging | Other Liabilities    
Derivative [Line Items]    
Derivative Liability, Notional Amount $ 160,000 $ 110,000
Derivative Liability, Fair Value 9,034 2,078
Cash Flow Hedging | Subordinate debentures | Derivative liabilities    
Derivative [Line Items]    
Derivative Liability, Notional Amount 10,000 10,000
Derivative Liability, Fair Value 819 439
Cash Flow Hedging | Federal Home Loan Bank borrowings | Derivative liabilities    
Derivative [Line Items]    
Derivative Liability, Notional Amount 150,000 100,000
Derivative Liability, Fair Value 8,215 1,639
Fair Value Hedging | Other Assets    
Derivative [Line Items]    
Derivative Asset, Notional Amount 0 0
Derivative Asset, Fair Value 0 0
Fair Value Hedging | Other Assets | Derivative liabilities    
Derivative [Line Items]    
Derivative Asset, Notional Amount 0 0
Derivative Asset, Fair Value 0 0
Fair Value Hedging | Other Liabilities    
Derivative [Line Items]    
Derivative Liability, Notional Amount 19,605 19,605
Derivative Liability, Fair Value 1,761 630
Fair Value Hedging | Other Liabilities | Derivative liabilities    
Derivative [Line Items]    
Derivative Liability, Notional Amount 19,605 19,605
Derivative Liability, Fair Value $ 1,761 $ 630
v3.20.2
Derivatives - Fair Value Hedges Included in the Consolidated Statements of Income (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Fair Value Hedging | Interest income | Derivative liabilities    
Derivative [Line Items]    
Change in fair value on interest rate swaps hedging investments $ (1,131) $ (1,057)
v3.20.2
Income Taxes (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Tax Disclosure [Abstract]        
Income tax expense (benefit) $ 1,634 $ 501 $ 724 $ 873
Effective income tax rate 17.90% 15.70% 10.30% 15.00%
v3.20.2
Business Combinations - Tennessee Community Bank Holdings TCB (Details) - USD ($)
6 Months Ended
Jan. 01, 2020
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Business Acquisition [Line Items]        
Common stock, par value (in dollars per share)   $ 1   $ 1
Cash settlement for Tennessee Community Bank Holdings, Inc. common stock   $ 8,500,000 $ 0  
COMMON STOCK        
Business Acquisition [Line Items]        
Common stock, par value (in dollars per share) $ 1.00      
Business combination, shares issued per acquiree share (in shares) 0.769      
Tennessee Community Bank Holdings        
Business Acquisition [Line Items]        
Common stock, par value (in dollars per share) $ 1.00      
Reliant Bancorp, Inc. common stock shares issued (in shares) 811,210      
Cash settlement for Tennessee Community Bank Holdings, Inc. common stock $ 18,073,000      
Cash in lieu of fractional shares based on volume weighted average closing consecutive 22.36      
Exercise of stock option 34.25      
Aggregate consideration paid to holders of unexercised options $ 430,000 $ 430,000    
Tennessee Community Bank Holdings | COMMON STOCK        
Business Acquisition [Line Items]        
Business acquisition, share price (in dollars per share) $ 17.13      
v3.20.2
Business Combinations - Financial Impact of Merger TCB (Details)
6 Months Ended
Jan. 01, 2020
USD ($)
$ / shares
shares
Jun. 30, 2020
USD ($)
$ / shares
shares
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Calculation of Purchase Price        
Cash settlement for Tennessee Community Bank Holdings, Inc. common stock   $ 8,500,000 $ 0  
Allocation of Purchase Price        
Goodwill   51,058,000   $ 43,642,000
Tennessee Community Bank Holdings        
Calculation of Purchase Price        
Shares of Tennessee Community Bank Holdings, Inc. common stock outstanding as of January 1, 2020 (in shares) | shares 1,055,041      
Exchange ratio for Reliant Bancorp, Inc. common stock 0.769      
Reliant Bancorp, Inc. common stock shares issued (in shares) | shares 811,210      
Reliant Bancorp, Inc. share price at January 1, 2020 (in dollars per share) | $ / shares $ 22.24      
Estimated value of Reliant Bancorp, Inc. shares issued $ 18,041,000      
Cash settlement for Tennessee Community Bank Holdings, Inc. common stock 18,073,000      
Aggregate consideration paid to holders of unexercised options 430,000 $ 430,000    
Cash settlement for Reliant Bancorp, Inc. fractional shares ($22.36 per pro rata fractional share) 3,000      
Total consideration above 36,547,000      
Number of stock options settled (in shares) | shares   26,450    
Exercise of stock option 34.25      
Stock options weighted average exercise price (in dollars per share) | $ / shares   $ 18.00    
Cash in lieu of fractional shares based on volume weighted average closing consecutive 22.36      
Allocation of Purchase Price        
Total consideration above 36,547,000      
Cash and cash equivalents 11,026,000      
Investment securities available for sale 56,336,000      
Loans, net of unearned income 171,445,000      
Accrued interest receivable 948,000      
Premises and equipment 6,427,000      
Cash surrender value of life insurance contracts 5,629,000      
Restricted equity securities 909,000      
Core deposit intangible 3,617,000      
Other assets 833,000      
Deposits (210,538,000)      
Deferred tax liability (337,000)      
Borrowings (58,000)      
FHLB advances (13,102,000)      
Other liabilities (3,682,000)      
Total fair value of net assets acquired 29,453,000      
Goodwill $ 7,094,000      
COMMON STOCK | Tennessee Community Bank Holdings        
Calculation of Purchase Price        
Business acquisition, share price (in dollars per share) | $ / shares $ 17.13      
v3.20.2
Business Combinations - First Advantage Bancorp FABK (Details) - USD ($)
$ / shares in Units, $ in Thousands
Apr. 01, 2020
Jun. 30, 2020
Dec. 31, 2019
Business Acquisition [Line Items]      
Common stock, par value (in dollars per share)   $ 1 $ 1
Common stock, shares outstanding (in shares)   16,631,604 11,206,254
First Advantage Bancorp      
Business Acquisition [Line Items]      
Common stock, par value (in dollars per share) $ 0.01    
Business combination, shares issued per acquiree share (in shares) 1.17    
Business acquisition, share price (in dollars per share) $ 3.00    
Business combination, cash paid in lieu of fractional shares (in dollars per share) 11.74    
Reliant Bancorp, Inc. share price at January 1, 2020 (in dollars per share) $ 11.27    
Common stock, shares outstanding (in shares) 3,935,165    
Total consideration above $ 64,094    
Consideration transferred as price per share (in dollars per share) $ 16.28    
v3.20.2
Business Combinations - Financial Impact of Merger FABK (Details)
6 Months Ended
Apr. 01, 2020
USD ($)
$ / shares
shares
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Calculation of Purchase Price        
Cash settlement for First Advantage Bancorp common stock ($3.00 per share)   $ 8,500,000 $ 0  
Allocation of Purchase Price        
Goodwill   $ 51,058,000   $ 43,642,000
First Advantage Bancorp        
Calculation of Purchase Price        
Shares of First Advantage Bancorp common stock outstanding as of April 1, 2020 (in shares) | shares 3,935,165      
Conversion of restricted stock units to shares of common stock of First Advantage Bancorp as of April 1, 2020 (in shares) | shares 2,000      
Total First Advantage Bancorp common stock outstanding as of April, 1, 2020 (in shares) | shares 3,937,165      
Exchange ratio for Reliant Bancorp, Inc. common stock 1.17      
Reliant Bancorp, Inc. common stock shares issued (in shares) | shares 4,606,483      
Remove fractional shares (in shares) | shares (64)      
Reliant Bancorp, Inc. common stock shares issued (in shares) | shares 4,606,419      
Reliant Bancorp, Inc. share price at April 1, 2020 (in dollars per share) | $ / shares $ 11.27      
Estimated value of Reliant Bancorp, Inc. shares issued $ 51,914,000      
Cash settlement for Reliant Bancorp, Inc. fractional shares ($11.74 per pro rata fractional share) 1,000      
Cash settlement for First Advantage Bancorp common stock ($3.00 per share) 11,805,000      
Cash settlement for First Advantage Bancorp restricted stock units ($3.00 per share) 6,000      
Cash settlement for First Advantage Bancorp's 34,800 outstanding stock options ($30.00 settlement price less weighted average exercise price of $19.44) 368,000      
Total consideration above $ 64,094,000      
Business combination, cash paid in lieu of fractional shares (in dollars per share) | $ / shares $ 11.74      
Business acquisition, share price (in dollars per share) | $ / shares $ 3.00      
Number of stock options settled (in shares) | shares 34,800      
Exercise of stock option $ 30.00      
Stock options weighted average exercise price (in dollars per share) | $ / shares $ 19.44      
Allocation of Purchase Price        
Total consideration above $ 64,094,000      
Cash and cash equivalents 11,159,000      
Investment securities available for sale 35,970,000      
Loans, net of unearned income 622,423,000      
Mortgage loans held for sale, net 5,878,000      
Premises and equipment 7,965,000      
Deferred tax asset 6,791,000      
Cash surrender value of life insurance contracts 14,776,000      
Other real estate and repossessed assets 1,259,000      
Core deposit intangible 2,280,000      
Operating lease right-of-use assets 6,536,000      
Other assets 10,529,000      
Deposits (608,690,000)      
Borrowings (35,962,000)      
Operating lease liabilities (6,536,000)      
Other liabilities (10,606,000)      
Total fair value of net assets acquired 63,772,000      
Goodwill $ 322,000      
First Advantage Bancorp | COMMON STOCK        
Calculation of Purchase Price        
Business acquisition, share price (in dollars per share) | $ / shares $ 3.00      
First Advantage Bancorp | Restricted Stock and Restricted Stock Units        
Calculation of Purchase Price        
Business acquisition, share price (in dollars per share) | $ / shares $ 3.00      
v3.20.2
Business Combinations - Pro Forma (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Business Combinations [Abstract]        
Revenue $ 33,340 $ 28,791 $ 63,564 $ 56,739
Net interest income 28,918 24,648 54,629 49,603
Net income attributable to common shareholders $ 7,073 $ 8,014 $ 5,176 $ 15,585
v3.20.2
Leases - Narrative (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2019
Jun. 30, 2019
Dec. 31, 2019
Jun. 30, 2020
Jan. 01, 2020
Leases [Abstract]          
Accounting Standards Update [Extensible List]     us-gaap:AccountingStandardsUpdate201602Member    
Operating leases right of use assets       $ 15,452 $ 11,973
Operating lease liabilities       $ 16,591 $ 11,900
Discount rate         4.50%
Lease expense $ 678 $ 1,371      
v3.20.2
Leases - Operating Lease and Liability (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Jan. 01, 2020
Leases [Abstract]    
Operating leases right of use assets $ 15,452 $ 11,973
Operating lease liabilities $ 16,591  
Weighted average remaining lease term (in years) 6 years 7 months 13 days  
Weighted average discount rate 4.33%  
v3.20.2
Leases - Components of Lease Expense Included in Occupancy Expenses (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2020
Leases [Abstract]    
Operating lease cost $ 854 $ 1,482
Short-term lease cost 0 0
Variable lease cost 98 178
Total lease cost $ 952 $ 1,660
v3.20.2
Leases - Maturities of Operating Lease Liability (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Jan. 01, 2020
Lease payments due on or before    
June 30, 2021 $ 3,923  
June 30, 2022 2,903  
June 30, 2023 2,681  
June 30, 2024 2,648  
June 30, 2025 2,504  
Thereafter 5,101  
Total undiscounted cash flows 19,760  
Discount on cash flows (3,169)  
Operating lease liabilities $ 16,591 $ 11,900