• SmartFinancial Announces Results for the First Quarter 2024

    المصدر: Nasdaq GlobeNewswire / 22 أبريل 2024 16:00:41   America/Chicago

    KNOXVILLE, Tenn., April 22, 2024 (GLOBE NEWSWIRE) -- SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NYSE: SMBK), today announced net income of $9.4 million, or $0.55 per diluted common share, for the first quarter of 2024, compared to net income of $11.5 million, or $0.68 per diluted common share, for the first quarter of 2023, and compared to prior quarter net income of $6.2 million, or $0.37 per diluted common share. Operating earnings1, which excludes non-recurring income related to the gain on sale of a branch location, net of tax adjustments, totaled $8.4 million, or $0.49 per diluted common share, in the first quarter of 2024, compared to $11.5 million, or $0.68 per diluted common share, in the first quarter of 2023, and compared to $6.9 million, or $0.41 per diluted common share, in the fourth quarter of 2023.

    Highlights for the First Quarter of 2024

    • Operating earnings1 of $8.4 million, or $0.49 per diluted common share
    • Net organic loan and lease growth of $34 million - 4% annualized quarter-over-quarter increase
    • Credit quality remains solid with nonperforming assets to total assets of 0.18%
    • Deposit growth of $126.3 million – 12% annualized quarter-over-quarter increase

    ______________________________
    1
    Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP reconciliation


    Billy Carroll, President & CEO, stated: “Our company started 2024 with nice momentum.  The first quarter was highlighted by continued growth in both loans and deposits, each growing 4% and 12%, respectively, along with expense discipline and focus on operating leverage improvement.  The investments we’ve made over the last few years have positioned us well and with a margin inflection point on the horizon, we remain very bullish.”

    SmartFinancial's Chairman, Miller Welborn, concluded: “Our team continued to make substantial forward progress on our key strategic initiatives in the first quarter. Our associates worked diligently to grow revenue and control expenses, setting the stage for operating leverage gains for the remainder of 2024. Continued commitment to EXCELLENT client service and growing shareholder value remains “top of mind” for our team.”

    Net Interest Income and Net Interest Margin

    Net interest income was $31.7 million for the first quarter of 2024, compared to $31.5 million for the prior quarter. Average earning assets totaled $4.50 billion, an increase of $116.4 million from the prior quarter. The increase in average earnings assets was primarily driven by an increase in average interest-earning cash of $64.0 million, average loans and leases of $49.7 million and average securities of $2.7 million. Average interest-bearing liabilities increased by $144.2 million from the prior quarter, attributable to an increase in average deposits of $146.3 million, offset by a decrease in average borrowings of $2.2 million.

    The tax equivalent net interest margin was 2.85% for the first quarter of 2024, compared to 2.86% for the prior quarter. The tax equivalent net interest margin was negatively impacted by the increased cost of interest-bearing liabilities, coupled with a slower rise on yield on interest-earning assets, quarter-over-quarter. The yield on loans and leases, excluding loan fees, was 5.71% for the first quarter, compared to 5.61% for the prior quarter.

    The cost of total deposits for the first quarter of 2024 was 2.52% compared to 2.35% in the prior quarter. The cost of interest-bearing liabilities increased to 3.23% for the first quarter of 2024, compared to 3.07% for the prior quarter. The cost of average interest-bearing deposits was 3.16% for the first quarter of 2024, compared to 3.00% for the prior quarter, an increase of 16 basis points.  

    The following table presents selected interest rates and yields for the periods indicated:

      Three Months Ended   
      Mar Dec Increase 
    Selected Interest Rates and Yields 2024 2023 (Decrease) 
    Yield on loans and leases, excluding loan fees 5.71 %5.61 %0.10 %
    Yield on loans and leases 5.82 %5.68 %0.14 %
    Yield on earning assets, on a fully tax equivalent basis (FTE) 5.36 %5.22 %0.14 %
    Cost of interest-bearing deposits 3.16 %3.00 %0.16 %
    Cost of total deposits 2.52 %2.35 %0.17 %
    Cost of interest-bearing liabilities 3.23 %3.07 %0.16 %
    Net interest margin, FTE 2.85 %2.86 %(0.01)%


    Provision for Credit Losses on Loans and Leases and Credit Quality

    At March 31, 2024, the allowance for credit losses was $34.2 million. The allowance for credit losses to total loans and leases was 0.98% as of March 31, 2024, compared to 1.02% as of December 31, 2023.  

    The following table presents detailed information related to the provision for credit losses for the periods indicated (dollars in thousands):

      Three Months Ended    
      Mar Dec    
    Provision for Credit Losses on Loans and Leases Rollforward  2024   2023  Change 
    Beginning balance $35,066  $33,687  $1,379  
    Charge-offs  (920)  (424)  (496) 
    Recoveries  135   302   (167) 
    Net (charge-offs) recoveries  (785)  (122)  (663) 
    Provision for credit losses (1)  (78)  1,501   (1,579) 
    Ending balance $34,203  $35,066  $(863) 
               
    Allowance for credit losses to total loans and leases, gross  0.98 % 1.02 % (0.04)%


     (1)
    The current quarter-ended and prior quarter-ended excludes unfunded commitments release of $362 thousand and a provision of $69 thousand, respectively. At March 31, 2024, the unfunded commitment liability totaled $2.0 million.
       

    Nonperforming loans and leases as a percentage of total loans and leases was 0.18% as of March 31, 2024, a decrease of 6 basis points from the 0.24% reported in the fourth quarter of 2023. Total nonperforming assets (which include nonaccrual loans and leases, loans and leases past due 90 days or more and still accruing, other real estate owned and other repossessed assets) as a percentage of total assets was 0.18% as of March 31, 2024, and 0.20% on December 31, 2023.

    The following table presents detailed information related to credit quality for the periods indicated (dollars in thousands):

      Three Months Ended    
       Mar   Dec  Increase 
    Credit Quality  2024   2023  (Decrease) 
    Nonaccrual loans and leases $6,171  $7,931  $(1,760) 
    Loans and leases past due 90 days or more and still accruing  95   170   (75) 
    Total nonperforming loans and leases  6,266   8,101   (1,835) 
    Other real estate owned  696   517   179  
    Other repossessed assets  2,033   1,117   916  
    Total nonperforming assets $8,995  $9,735  $(740) 
                 
    Nonperforming loans and leases to total loans and leases, gross  0.18 % 0.24 % (0.06)%
    Nonperforming assets to total assets  0.18 % 0.20 % (0.02)%


    Noninterest Income

    Noninterest income increased $801 thousand to $8.4 million for the first quarter of 2024 compared to $7.6 million for the prior quarter. The current quarter increase was primarily associated with the $1.3 million pre-tax gain on the sale of a former branch building.  

    The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands):

      Three Months Ended   
       Mar   Dec  Increase
    Noninterest Income  2024   2023  (Decrease)
    Service charges on deposit accounts $1,612  $1,673  $(61)
    Mortgage banking income  280   227   53 
    Investment services  1,380   1,339   41 
    Insurance commissions  1,103   1,133   (30)
    Interchange and debit card transaction fees  1,253   1,370   (117)
    Other  2,752   1,837   915 
    Total noninterest income $8,380  $7,579  $801 


    Noninterest Expense

    Noninterest expense decreased $1.1 million to $28.6 million for the first quarter of 2024 compared to $29.7 million for the prior quarter. The current quarter decrease was primarily related to a decrease in other noninterest expenses associated with a Community Reinvestment Act donation of a former branch location and accruals in respect of pending litigation in the prior quarter.

    The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):

      Three Months Ended   
       Mar   Dec  Increase
    Noninterest Expense  2024   2023  (Decrease)
    Salaries and employee benefits $16,639  $16,275  $364 
    Occupancy and equipment  3,396   3,378   18 
    FDIC insurance  915   915   - 
    Other real estate and loan related expenses  584   781   (197)
    Advertising and marketing  302   336   (34)
    Data processing and technology  2,465   2,458   7 
    Professional services  924   1,136   (212)
    Amortization of intangibles  612   643   (31)
    Merger related and restructuring expenses  -   -   - 
    Other  2,716   3,773   (1,057)
    Total noninterest expense $28,553  $29,695  $(1,142)


    Income Tax Expense

    Income tax expense was $2.6 million for the first quarter of 2024, an increase of $990 thousand, compared to $1.6 million for the prior quarter.

    The effective tax rate was 21.94% for the first quarter of 2024 and 20.95% for the prior quarter.

    Balance Sheet Trends

    Total assets at March 31, 2024 were $4.95 billion compared to $4.83 billion at December 31, 2023. The $125.3 million increase is primarily attributable to increases in cash and cash equivalents of $125.7 million and loans and leases of $33.1 Asset increases were offset by a decrease in securities of $35.1 million.

    Total liabilities increased to $4.49 billion at March 31, 2024 from $4.37 billion at December 31, 2023. The increase of $118.4 million was primarily from organic deposit growth of $126.3 million, offset by a decrease in borrowings of $3.2 million and other liabilities of $4.7 million.

    Shareholders' equity at March 31, 2024, totaled $466.8 million, an increase of $6.9 million, from December 31, 2023. The increase in shareholders' equity was primarily driven by net income of $9.4 million for the three months ended March 31, 2024, offset by the negative change of $1.5 million in accumulated other comprehensive income and dividends paid of $1.3 million.   Tangible book value per share1 was $21.12 at March 31, 2024, compared to $20.76 at December 31, 2023. Tangible common equity1 as a percentage of tangible assets1 was 7.43% at March 31, 2024, compared with 7.47% at December 31, 2023.

    ______________________________
    1 Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP reconciliation


    The following table presents selected balance sheet information for the periods indicated (dollars in thousands):

      Mar Dec Increase
    Selected Balance Sheet Information 2024 2023 (Decrease)
    Total assets $4,954,690  $4,829,387  $125,303 
    Total liabilities  4,487,894   4,369,501   118,393 
    Total equity  466,796   459,886   6,910 
    Securities  654,516   689,646   (35,130)
    Loans and leases  3,477,555   3,444,462   33,093 
    Deposits  4,394,121   4,267,854   126,267 
    Borrowings  9,849   13,078   (3,229)


    Conference Call Information

    SmartFinancial issued this earnings release for the first quarter of 2024 on Monday, April 22, 2024, and will host a conference call on Tuesday, April 23, 2024, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and entering the access code, 060240. A replay of the conference call will be available through June 22, 2024, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 672905. Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 a.m. ET prior to the conference call.

    About SmartFinancial, Inc.

    SmartFinancial, Inc., based in Knoxville, Tennessee, is the bank holding company for SmartBank. SmartBank is a full-service commercial bank founded in 2007, with branches across Tennessee, Alabama, and Florida. Recruiting the best people, delivering exceptional client service, strategic branching, and a disciplined approach to lending have contributed to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.

    Source 
    SmartFinancial, Inc. 
      
    Investor Contacts 
    Billy Carroll 
    President & CEO 
    (865) 868-0613   billy.carroll@smartbank.com 
      
    Ron Gorczynski 
    Executive Vice President, Chief Financial Officer 
    (865) 437-5724   ron.gorczynski@smartbank.com 
      
    Media Contact 
    Kelley Fowler 
    Senior Vice President, Public Relations & Marketing 
    (865) 868-0611   kelley.fowler@smartbank.com 
      

    Non-GAAP Financial Measures

    Statements included in this earnings release include measures not recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of Non-GAAP financial measures to GAAP financial measures. SmartFinancial management uses several Non-GAAP financial measures, including: (i) operating earnings, (ii) operating return on average assets, (iii) operating pre-provision net revenue return on average assets, (iv) operating return on average shareholders' equity, (v) return on average tangible common equity, (vi) operating return on average tangible common equity, (vii) operating efficiency ratio, (viii) operating noninterest income, (ix) operating pre-provision net revenue earnings, (x) operating noninterest expense, (xi) tangible common equity, (xii) average tangible common equity, (xiii) tangible book value per common share, (xiv) tangible assets; and ratios derived therefrom, in its analysis of the company's performance. Operating earnings excludes the following from net income: securities gains and losses and merger related and restructuring expenses. Operating return on average assets is the annualized operating earnings (Non-GAAP) divided by average assets. Operating pre-provision net revenue return on average assets is the annualized operating pre-provision net revenue income earnings (Non-GAAP) by average assets. Operating return on average shareholders' equity is the annualized operating earnings (Non-GAAP) divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity (Non-GAAP). Operating return on average tangible common equity is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP). The operating efficiency ratio includes an adjustment for taxable equivalent yields and excludes securities gains and losses and merger related and restructuring expenses from the efficiency ratio. Operating noninterest income excludes the following from noninterest income: securities gains and losses. Operating pre-provision net revenue earnings is net interest income plus operating noninterest income (Non-GAAP) less operating noninterest expense (Non-GAAP). Operating noninterest interest income and operating noninterest expense exclude non-operating related income and expense items. A detailed reconciliation of these items are available in the Non-GAAP reconciliations. Tangible common equity (Non-GAAP) and average tangible common equity (Non-GAAP) excludes goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively. Tangible book value per common share (Non-GAAP) is tangible common equity (Non-GAAP) divided by common shares outstanding. Tangible assets (Non-GAAP) excludes goodwill and other intangibles from total assets. Management believes that Non-GAAP financial measures provide additional useful information that allows investors to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. Management believes these Non-GAAP financial measures also enhance investors' ability to compare period-to-period financial results and allow investors and company management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider SmartFinancial's performance and financial condition as reported under 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 investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.

    Forward-Looking Statements

    This news release may contain statements that are based on management’s current estimates or expectations of future events or future results, and that may be deemed to constitute forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements are not historical in nature and can generally be identified by such words as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “may,” “estimate,” and similar expressions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results of SmartFinancial to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others, (1) risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively; (2) claims and litigation arising from our business activities and from the companies we acquire, which may relate to contractual issues, environmental laws, fiduciary responsibility, and other matters; (3) the risk that cost savings and revenue synergies from recently completed acquisitions may not be realized or may take longer than anticipated to realize; (4) disruption from recently completed acquisitions with customer, supplier, employee, or other business relationships; (5) our ability to successfully integrate the businesses acquired as part of previous acquisitions with the business of SmartBank; (6) changes in management’s plans for the future; (7) prevailing, or changes in, economic or political conditions, particularly in our market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; (8) increased technology and cybersecurity risks, including generative artificial intelligence risks; (9) credit risk associated with our lending activities; (10) changes in loan demand, real estate values, or competition; (11) developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; (12) changes in accounting principles, policies, or guidelines; (13) changes in applicable laws, rules, or regulations; (14) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs related to the COVID-19 pandemic and related variants; (15) potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; (16) significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; (17) the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine or the conflict in Israel and surrounding areas; and (18) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in SmartFinancial’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, in each case filed with or furnished to the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website (www.sec.gov). Undue reliance should not be placed on forward-looking statements. SmartFinancial disclaims any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events, or otherwise.


    SmartFinancial, Inc. and Subsidiary
    Condensed Consolidated Financial Information - (unaudited)
    (dollars in thousands)

     Ending Balances
     Mar    Dec    Sep    Jun    Mar
     2024 2023 2023 2023 2023
    Assets:                  
    Cash and cash equivalents$477,941  $352,271  $400,258  $238,898  $306,934 
    Securities available-for-sale, at fair value 474,347   408,410   385,131   540,308   560,418 
    Securities held-to-maturity, at amortized cost 180,169   281,236   282,313   283,564   284,776 
    Other investments 13,718   13,662   13,805   14,396   14,059 
    Loans held for sale 4,861   4,418   2,734   986   3,324 
    Loans and leases 3,477,555   3,444,462   3,378,999   3,337,790   3,281,787 
    Less: Allowance for credit losses (34,203)  (35,066)  (33,687)  (32,747)  (32,279)
    Loans and leases, net 3,443,352   3,409,396   3,345,312   3,305,043   3,249,508 
    Premises and equipment, net 92,694   92,963   92,020   92,351   92,190 
    Other real estate owned 696   517   1,370   1,708   1,708 
    Goodwill and other intangibles, net 106,537   107,148   107,792   108,439   109,114 
    Bank owned life insurance 83,957   83,434   82,914   82,419   81,938 
    Other assets 76,418   75,932   83,522   77,688   65,836 
    Total assets$4,954,690  $4,829,387  $4,797,171  $4,745,800  $4,769,805 
    Liabilities:                   
    Deposits:                   
    Noninterest-bearing demand$907,254  $898,044  $923,763  $1,003,432  $989,753 
    Interest-bearing demand 996,298   1,006,915   993,717   938,758   989,738 
    Money market and savings 1,952,410   1,812,427   1,766,409   1,720,202   1,761,847 
    Time deposits 538,159   550,468   562,620   537,192   488,208 
    Total deposits 4,394,121   4,267,854   4,246,509   4,199,584   4,229,546 
    Borrowings 9,849   13,078   14,117   15,496   16,546 
    Subordinated debt 42,120   42,099   42,078   42,057   42,036 
    Other liabilities 41,804   46,470   47,815   43,816   38,278 
    Total liabilities 4,487,894   4,369,501   4,350,519   4,300,953   4,326,406 
    Shareholders' Equity:              
    Common stock 17,057   16,989   16,995   17,004   17,004 
    Additional paid-in capital 296,061   295,699   295,542   295,296   294,930 
    Retained earnings 181,103   173,105   168,271   167,564   160,085 
    Accumulated other comprehensive income (loss) (27,425)  (25,907)  (34,156)  (35,017)  (28,620)
    Total shareholders' equity 466,796   459,886   446,652   444,847   443,399 
    Total liabilities & shareholders' equity$4,954,690  $4,829,387  $4,797,171  $4,745,800  $4,769,805 


    SmartFinancial, Inc. and Subsidiary
    Condensed Consolidated Financial Information - (unaudited)
    (dollars in thousands except share and per share data)

     Three Months Ended
     Mar    Dec    Sep    Jun    Mar
     2024 2023 2023 2023 2023
    Interest income:                      
    Loans and leases, including fees$50,020  $48,767  $47,539  $45,446  $44,728 
    Investment securities:                      
    Taxable 4,548   4,344   4,335   4,335   3,651 
    Tax-exempt 352   352   356   357   353 
    Federal funds sold and other earning assets 4,863   4,032   3,045   1,956   4,446 
    Total interest income 59,783   57,495   55,275   52,094   53,178 
    Interest expense:                      
    Deposits 27,035   24,926   23,433   19,554   16,346 
    Borrowings 128   162   210   339   224 
    Subordinated debt 899   890   626   626   626 
    Total interest expense 28,062   25,978   24,269   20,519   17,196 
    Net interest income 31,721   31,517   31,006   31,575   35,982 
    Provision for credit losses (440)  1,571   795   113   550 
    Net interest income after provision for credit losses 32,161   29,946   30,211   31,462   35,432 
    Noninterest income:                      
    Service charges on deposit accounts 1,612   1,673   1,736   1,657   1,445 
    Gain (loss) on sale of securities, net       (6,801)      
    Mortgage banking 280   227   309   332   172 
    Investment services 1,380   1,339   1,461   1,300   1,005 
    Insurance commissions 1,103   1,133   1,153   1,139   1,259 
    Interchange and debit card transaction fees 1,253   1,370   1,357   1,347   1,383 
    Other 2,752   1,837   1,476   1,355   1,661 
    Total noninterest income 8,380   7,579   691   7,130   6,925 
    Noninterest expense:                      
    Salaries and employee benefits 16,639   16,275   16,785   15,947   16,742 
    Occupancy and equipment 3,396   3,378   3,547   3,318   3,208 
    FDIC insurance 915   915   825   875   541 
    Other real estate and loan related expense 584   781   603   441   572 
    Advertising and marketing 302   336   346   305   355 
    Data processing and technology 2,465   2,458   2,378   2,235   2,163 
    Professional services 924   1,136   735   764   807 
    Amortization of intangibles 612   643   647   675   659 
    Merger related and restructuring expenses       110       
    Other 2,716   3,773   2,540   2,850   2,482 
    Total noninterest expense 28,553   29,695   28,516   27,410   27,529 
    Income before income taxes 11,988   7,830   2,386   11,182   14,828 
    Income tax expense 2,630   1,640   319   2,346   3,328 
    Net income$9,358  $6,190  $2,067  $8,836  $11,500 
    Earnings per common share:                      
    Basic$0.56  $0.37  $0.12  $0.53  $0.69 
    Diluted$0.55  $0.37  $0.12  $0.52  $0.68 
    Weighted average common shares outstanding:                      
    Basic 16,849,735   16,814,647   16,807,548   16,806,389   16,791,406 
    Diluted 16,925,408   16,918,234   16,918,635   16,898,091   16,896,494 


    SmartFinancial, Inc. and Subsidiary

    Condensed Consolidated Financial Information - (unaudited)
    (dollars in thousands)
    YIELD ANALYSIS

     Three Months Ended  
     March 31, 2024 December 31, 2023 March 31, 2023 
     Average           Yield/    Average           Yield/    Average            Yield/ 
     Balance Interest Cost Balance Interest Cost Balance Interest Cost 
    Assets:                                          
    Loans and leases, including fees$3,458,109  $50,020  5.82 %  $3,408,430  $48,767  5.68 %  $3,258,452  $44,728  5.57 %
    Taxable securities 620,805   4,548  2.95 %   618,511   4,344  2.79 %   723,540   3,651  2.05 %
    Tax-exempt securities1 64,161   445  2.79 %   63,767   445  2.77 %   65,547   447  2.77 %
    Federal funds sold and other earning assets 353,913   4,863  5.53 %   289,896   4,032  5.52 %   378,253   4,446  4.77 %
    Total interest-earning assets 4,496,988   59,876  5.36 %   4,380,604   57,588  5.22 %   4,425,792   53,272  4.88 %
    Noninterest-earning assets 380,231          386,202            359,996           
    Total assets$4,877,219         $4,766,806           $4,785,788           
                                      
    Liabilities and Shareholders’ Equity:                                          
    Interest-bearing demand deposits$996,147   6,060  2.45 %  $974,637   5,631  2.29 %  $944,132   4,227  1.82 %
    Money market and savings deposits 1,904,855   16,149  3.41 %   1,764,826   14,556  3.27 %   1,820,455   10,381  2.31 %
    Time deposits 541,792   4,826  3.58 %   556,996   4,739  3.38 %   469,361   1,738  1.50 %
    Total interest-bearing deposits 3,442,794   27,035  3.16 %   3,296,459   24,926  3.00 %   3,233,948   16,346  2.05 %
    Borrowings 11,245   128  4.58 %   13,420   162  4.79 %   16,858   224  5.39 %
    Subordinated debt 42,107   899  8.59 %   42,087   890  8.39 %   42,022   626  6.04 %
    Total interest-bearing liabilities 3,496,146   28,062  3.23 %   3,351,966   25,978  3.07 %   3,292,828   17,196  2.12 %
    Noninterest-bearing deposits 872,840          915,259            1,015,670           
    Other liabilities 47,085          50,055            44,908           
    Total liabilities 4,416,071          4,317,280            4,353,406           
    Shareholders' equity 461,148          449,526            432,382           
    Total liabilities and shareholders' equity$4,877,219         $4,766,806           $4,785,788           
                                      
    Net interest income, taxable equivalent    $31,814          $31,610           $36,076      
    Interest rate spread        2.13 %            2.14 %            2.76 %  
    Tax equivalent net interest margin        2.85 %            2.86 %            3.31 %  
                                      
    Percentage of average interest-earning assets to average interest-bearing liabilities        128.63 %            130.69 %            134.41 %  
    Percentage of average equity to average assets        9.46 %            9.43 %            9.03 %  

    1Yields computed on tax-exempt instruments on a tax equivalent basis include $93 thousand, $94 thousand, and $94 thousand of taxable equivalent income for the quarters ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively.


    SmartFinancial, Inc. and Subsidiary

    Condensed Consolidated Financial Information - (unaudited)
    (dollars in thousands)

     As of and for The Three Months Ended  
     Mar    Dec    Sep    Jun    Mar 
     2024 2023 2023 2023 2023 
    Composition of Loans and Leases:                      
    Commercial real estate:                      
    Owner occupied$804,557  $798,416  $776,402  $769,978  $764,166  
    Non-owner occupied 938,648   940,789   890,774   871,779   871,368  
    Commercial real estate, total 1,743,205   1,739,205   1,667,176   1,641,757   1,635,534  
    Commercial & industrial 667,903   645,918   617,115   594,427   571,153  
    Construction & land development 321,860   327,185   373,068   394,742   386,253  
    Consumer real estate 659,209   649,867   638,518   624,828   606,343  
    Leases 71,909   68,752   68,538   66,401   67,701  
    Consumer and other 13,469   13,535   14,584   15,635   14,803  
    Total loans and leases$3,477,555  $3,444,462  $3,378,999  $3,337,790  $3,281,787  
                        
    Asset Quality and Additional Loan Data:                      
    Nonperforming loans and leases$6,266  $8,101  $4,163  $3,722  $3,247  
    Other real estate owned 696   517   1,370   1,708   1,708  
    Other repossessed assets 2,033   1,117   348   282   66  
    Total nonperforming assets$8,995  $9,735  $5,881  $5,712  $5,021  
    Modified loans and leases1 not included in nonperforming loans and leases$4,413  $4,245  $2,376  $657  $97  
    Net charge-offs to average loans and leases (annualized) 0.09 %   0.04 %   0.04 %   (0.01)%   0.03 %
    Allowance for credit losses to loans and leases 0.98 %   1.02 %   1.00 %   0.98 %   0.98 %
    Nonperforming loans and leases to total loans and leases, gross 0.18 %   0.24 %   0.12 %   0.11 %   0.10 %
    Nonperforming assets to total assets 0.18 %   0.20 %   0.12 %   0.12 %   0.11 %
                        
    Capital Ratios:                      
    Equity to Assets 9.42 %   9.52 %   9.31 %   9.37 %   9.30 %
    Tangible common equity to tangible assets (Non-GAAP)2 7.43 %   7.47 %   7.23 %   7.25 %   7.17 %
                        
    SmartFinancial, Inc.3                      
    Tier 1 leverage 8.23 %   8.27 %   8.13 %   8.24 %   7.91 %
    Common equity Tier 1 10.20 %   10.16 %   10.07 %   10.12 %   9.95 %
    Tier 1 capital 10.20 %   10.16 %   10.07 %   10.12 %   9.95 %
    Total capital 11.85 %   11.80 %   11.90 %   11.94 %   11.77 %
                        
    SmartBank Estimated4                   
    Tier 1 leverage 9.07 %   9.18 %   9.00 %   9.18 %   8.87 %
    Common equity Tier 1 11.23 %   11.26 %   11.15 %   11.27 %   11.15 %
    Tier 1 capital 11.23 %   11.26 %   11.15 %   11.27 %   11.15 %
    Total capital 12.00 %   12.02 %   11.87 %   11.97 %   11.85 %

    1Borrowers that have experienced financial difficulty.
    2Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.
    3All periods presented are estimated.
    4Current period capital ratios are estimated as of the date of this earnings release.


    SmartFinancial, Inc. and Subsidiary
    Condensed Consolidated Financial Information - (unaudited)
    (dollars in thousands except share and per share data)

     As of and for The 
     Three Months Ended     
     Mar    Dec    Sep    Jun    Mar    
     2024 2023 2023 2023 2023 
    Selected Performance Ratios (Annualized):                         
    Return on average assets 0.77 % 0.52 % 0.17 % 0.75 % 0.97 %
    Return on average shareholders' equity 8.16 % 5.46 % 1.84 % 7.98 % 10.79 %
    Return on average tangible common equity¹ 10.62 % 7.18 % 2.43 % 10.57 % 14.45 %
    Noninterest income / average assets 0.69 % 0.63 % 0.06 % 0.61 % 0.59 %
    Noninterest expense / average assets 2.35 % 2.47 % 2.37 % 2.34 % 2.33 %
    Efficiency ratio 71.20 % 75.95 % 89.96 % 70.82 % 64.16 %
                         
    Operating Selected Performance Ratios (Annualized):                         
    Operating return on average assets1 0.69 % 0.57 % 0.60 % 0.75 % 0.97 %
    Operating PPNR return on average assets1 0.84 % 0.86 % 0.84 % 0.96 % 1.30 %
    Operating return on average shareholders' equity1 7.29 % 6.07 % 6.41 % 7.98 % 10.79 %
    Operating return on average tangible common equity1 9.49 % 7.98 % 8.46 % 10.57 % 14.45 %
    Operating efficiency ratio1 73.50 % 73.41 % 73.60 % 70.64 % 64.02 %
    Operating noninterest income / average assets1 0.58 % 0.63 % 0.62 % 0.61 % 0.59 %
    Operating noninterest expense / average assets1 2.35 % 2.39 % 2.36 % 2.34 % 2.33 %
                         
    Selected Interest Rates and Yields:                         
    Yield on loans and leases, excluding loan fees 5.71 % 5.61 % 5.52 % 5.39 % 5.20 %
    Yield on loans and leases 5.82 % 5.68 % 5.61 % 5.51 % 5.57 %
    Yield on earning assets, FTE 5.36 % 5.22 % 4.99 % 4.82 % 4.88 %
    Cost of interest-bearing deposits 3.16 % 3.00 % 2.84 % 2.46 % 2.05 %
    Cost of total deposits 2.52 % 2.35 % 2.20 % 1.89 % 1.56 %
    Cost of interest-bearing liabilities 3.23 % 3.07 % 2.89 % 2.53 % 2.12 %
    Net interest margin, FTE 2.85 % 2.86 % 2.81 % 2.93 % 3.31 %
                         
    Per Common Share:                         
    Net income, basic$0.56  $0.37  $0.12  $0.53  $0.69  
    Net income, diluted 0.55   0.37   0.12   0.52   0.68  
    Operating earnings, basic¹ 0.50   0.41   0.43   0.53   0.69  
    Operating earnings, diluted¹ 0.49   0.41   0.43   0.52   0.68  
    Book value 27.37   27.07   26.28   26.16   26.08  
    Tangible book value¹ 21.12   20.76   19.94   19.78   19.66  
    Common shares outstanding 17,056,704   16,988,879   16,994,543   17,004,092   17,004,092  

    1Non-GAAP measure. See reconciliation of Non-GAAP measures.


    SmartFinancial, Inc. and Subsidiary

    Condensed Consolidated Financial Information - (unaudited)
    (dollars in thousands)
    NON-GAAP RECONCILIATIONS

     Three Months Ended  
     Mar    Dec    Sep    Jun    Mar    
     2024 2023 2023 2023 2023 
    Operating Earnings:                    
    Net income (GAAP)$9,358  $6,190  $2,067  $8,836  $11,500  
    Noninterest income:                    
    Securities (gains) losses, net       6,801        
    Gain on sale of former branch building (1,346)             
    Noninterest expenses:               
    Donation of a former branch location    250           
    Accruals for pending litigation    675           
    Merger related and restructuring expenses       110        
    Income taxes:               
    Income tax effect of adjustments 348   (239)  (1,785)       
    Operating earnings (Non-GAAP)$8,360  $6,876  $7,193  $8,836  $11,500  
    Operating earnings per common share (Non-GAAP):                    
    Basic$0.50  $0.41  $0.43  $0.53  $0.69  
    Diluted 0.49   0.41   0.43   0.52   0.68  
                    
    Operating Noninterest Income:                    
    Noninterest income (GAAP)$8,380  $7,579  $691  $7,130  $6,925  
    Securities (gains) losses, net       6,801        
    Gain on sale of former branch building (1,346)             
    Operating noninterest income (Non-GAAP)$7,034  $7,579  $7,492  $7,130  $6,925  
    Operating noninterest income (Non-GAAP)/average assets1 0.58 % 0.63 %   0.62 %   0.61 %   0.59 %
                    
    Operating Noninterest Expense:                    
    Noninterest expense (GAAP)$28,553  $29,695  $28,516  $27,410  $27,529  
    Donation of a former branch location    (250)          
    Accruals for pending litigation    (675)          
    Merger related and restructuring expenses       (110)       
    Operating noninterest expense (Non-GAAP)$28,553  $28,770  $28,406  $27,410  $27,529  
    Operating noninterest expense (Non-GAAP)/average assets2 2.35 % 2.39 %   2.36 %   2.34 %   2.33 %
                    
    Operating Pre-provision Net revenue ("PPNR") Earnings:               
    Net interest income (GAAP)$31,721  $31,517  $31,006  $31,575  $35,982  
    Operating noninterest income (Non-GAAP) 7,034   7,579   7,492   7,130   6,925  
    Operating noninterest expense (Non-GAAP) (28,553)  (28,770)  (28,406)  (27,410)  (27,529) 
    Operating PPNR earnings (Non-GAAP)$10,202  $10,326  $10,092  $11,295  $15,378  
                    
    Non-GAAP Return Ratios:                    
    Operating return on average assets (Non-GAAP)3 0.69 % 0.57 % 0.60 % 0.75 % 0.97 %
    Operating PPNR return on average assets (Non-GAAP)4 0.84 % 0.86 % 0.84 % 0.96 % 1.30 %
    Return on average tangible common equity (Non-GAAP)5 10.62 % 7.18 % 2.43 % 10.57 % 14.45 %
    Operating return on average shareholders' equity (Non-GAAP)6 7.29 % 6.07 % 6.41 % 7.98 % 10.79 %
    Operating return on average tangible common equity (Non-GAAP)7 9.49 % 7.98 % 8.46 % 10.57 % 14.45 %
                    
    Operating Efficiency Ratio:                    
    Efficiency ratio (GAAP) 71.20 % 75.95 % 89.96 % 70.82 % 64.16 %
    Adjustment for taxable equivalent yields (0.17)% (0.18)% (0.27)% (0.18)% (0.14)%
    Adjustment for securities gains (losses)  %  % (15.89)%  %  %
    Adjustment for sale of branch location 2.46 %  %  %  %  %
    Adjustment for donation of a former branch location  % (0.64)%  %  %  %
    Adjustment for accruals for pending litigation  % (1.72)%  %  %  %
    Adjustment for merger related income and costs  %  % (0.20)%  %  %
    Operating efficiency ratio (Non-GAAP) 73.50 % 73.41 % 73.60 % 70.64 % 64.02 %

    1Operating noninterest income (Non-GAAP) is annualized and divided by average assets.
    2Operating noninterest expense (Non-GAAP) is annualized and divided by average assets.
    3Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets.
    4Operating PPNR return on average assets (Non-GAAP) is the annualized operating PPNR earnings (Non-GAAP) divided by average assets.
    5Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP).
    6Operating return on average shareholders’ equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average equity.
    7Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP).


    SmartFinancial, Inc. and Subsidiary

    Condensed Consolidated Financial Information - (unaudited)
    (dollars in thousands)
    NON-GAAP RECONCILIATIONS

     Three Months Ended
     Mar    Dec    Sep    Jun    Mar
     2024 2023 2023 2023 2023
    Tangible Common Equity:                   
    Shareholders' equity (GAAP)$466,796  $459,886  $446,652  $444,847  $443,399 
    Less goodwill and other intangible assets 106,537   107,148   107,792   108,439   109,114 
    Tangible common equity (Non-GAAP)$360,259  $352,738  $338,860  $336,408  $334,285 
                   
    Average Tangible Common Equity:                   
    Average shareholders' equity (GAAP)$461,148  $449,526  $445,432  $444,283  $432,382 
    Less average goodwill and other intangible assets 106,920   107,551   108,194   108,851   109,537 
    Average tangible common equity (Non-GAAP)$354,228  $341,975  $337,238  $335,432  $322,845 
                   
    Tangible Book Value per Common Share:              
    Book value per common share (GAAP)$27.37  $27.07  $26.28  $26.16  $26.08 
    Adjustment due to goodwill and other intangible assets (6.25)  (6.31)  (6.34)  (6.38)  (6.42)
    Tangible book value per common share (Non-GAAP)1$21.12  $20.76  $19.94  $19.78  $19.66 
                   
    Tangible Common Equity to Tangible Assets:              
    Total Assets (GAAP)$4,954,690  $4,829,387  $4,797,171  $4,745,800  $4,769,805 
    Less goodwill and other intangibles 106,537   107,148   107,792   108,439   109,114 
    Tangible Assets (Non-GAAP)$4,848,153  $4,722,239  $4,689,379  $4,637,361  $4,660,691 
    Tangible common equity to tangible assets (Non-GAAP) 7.43%  7.47%  7.23%  7.25%  7.17%

    1Tangible book value per share (Non-GAAP) is computed by dividing total shareholders’ equity, less goodwill and other intangible assets, by common shares outstanding.


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