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KNOXVILLE, TN – February 1, 2016 – SmartFinancial, Inc  SmartFinancial, Inc. (“SmartFinancial”; NASDAQ: SMBK), announced today earnings of $1.2 million or $0.20 per share for its fourth quarter.  This quarter is the first with a full three months’ results from each subsidiary bank, as in the third quarter 2015, SmartFinancial successfully completed the merger of two holding companies, legacy SmartFinancial, Inc. and Cornerstone Bancshares, Inc., and carried forward the name “SmartFinancial, Inc.”.

Billy Carroll, President & CEO stated: “We enjoyed a favorable final quarter, but look forward to completing the combination of our two banks slated for late February, at which time we’ll begin realizing greater efficiencies.  As we unite as SmartBank, spanning East Tennessee and Northwest Florida, 2016 will be our year to focus on fundamentals, reinforce the foundation of an innovative, forward-looking brand and execute on our disciplined growth strategy.”

SmartFinancial’s Chairman Miller Welborn added: “It’s exciting to be on the eve of unveiling SmartBank in Chattanooga, which encompasses a region that has tremendous prospects for growth and will remain a significant market for SmartBank for years to come.  The banking industry is ready for re-envisioning and this company’s energetic, entrepreneurial leadership and talented team of associates poise us perfectly to deliver a new experience in banking which we anticipate will reward clients, associates and shareholders alike.”

Performance Highlights

  • Annualized loan growth of 9.5% in the quarter, as net loans finished the year at $723.4 million compared to $706.6 million for the third quarter.
  • Outstanding asset quality as estimated Nonperforming Assets to Total Assets fell to 0.75% compared to 1.17% at the end of the third quarter.
  • Net income available to common shareholders accelerated to $1.2 million, or $0.19 per diluted share, in Q4 2015 compared to a loss of ($0.1) million or ($0.03) per diluted share in Q3 2015.  The loss in prior quarter was primarily due to one-time merger expenses at the holding company.
  • Net operating earnings available to common shareholders, which excludes certain non-operating items, improved to $1.1 million, or $0.18 per diluted share, in Q4 2015 from $0.10 per diluted share in Q3 2015.

Billy Carroll concluded:  “We’re optimistic about the synergies our banks will generate once combined.  While we’ve been focused on the merger, we have a newly established mortgage unit with experienced personnel which is already driving revenue and will serve the entire franchise beginning in March.  This specialty group will allow us to better serve clients, offer a wider range of products and complement a focus on servicing high-net worth clientele.  We look forward to reporting on the results of this investment in coming quarters.”

About SmartFinancial, Inc.

SmartFinancial, Inc., based in Knoxville, Tennessee, is the bank holding company for SmartBank and Cornerstone Community Bank. SmartBank is a full-service commercial bank founded in 2007, with seven branches and one loan production office spanning East Tennessee and the Florida Panhandle. Recruiting the best people, delivering exceptional client service, strategic branching and a conservative and disciplined approach to lending have all given rise to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartbank.com. Cornerstone Community Bank is a full-service commercial bank founded in 1996, with five branches throughout the Chattanooga MSA and one loan production office in Dalton, Georgia. Cornerstone Community Bank specializes in providing customized financial solutions for businesses and consumers, by offering a comprehensive range of products and services designed to help companies and individuals build strong financial foundations. More information about Cornerstone Community Bank can be found on its website: www.cscbank.com.

This release contains forward-looking statements. SmartFinancial cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: changes in management’s plans for the future, prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services and other factors that may be described in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.

In addition to these risks, acquisitions and business combinations present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may be significantly harder—or take longer—to achieve than expected. As regulated financial institutions, our pursuit of attractive acquisition and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues. Regulatory and/or legal issues related to the pre-acquisition operations of an acquired or combined business may cause reputational harm to SmartFinancial following the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising as a result of those issues.

The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, SmartFinancial assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

Statements included in this press release include 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 non-GAAP financial measures, including: (i) net operating earnings available to common shareholders; (ii) operating efficiency ratio; and (iii) adjusted allowance for loan losses to loans, in its analysis of the Company’s performance. Net operating earnings available to common shareholders excludes the following from net income available to common shareholders: securities gains and losses, merger and conversion costs, OREO gain and losses, and the income tax effect of adjustments. The operating efficiency ratio excludes securities gains and losses, merger and conversion costs, and adjustment for OREO gains and losses from the efficiency ratio. Adjusted allowance for loan losses adds net acquisition accounting fair value discounts to the allowance for loan losses.

Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company and provide meaningful comparisons to its peers. 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 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.