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KNOXVILLE, TN – October 23, 2023 – SmartFinancial, Inc. (“SmartFinancial” or the “Company”; NASDAQ: SMBK), today announced net income of $2.1 million, or $0.12 per diluted common share, for the third quarter of 2023, compared to net income of $11.5 million, or $0.68 per diluted common share, for the third quarter of 2022, and compared to prior quarter net income of $8.8 million, or $0.52 per diluted common share.  Operating earnings1, which excludes securities gains (losses) and merger related and restructuring expenses, net of tax adjustments, totaled $7.2 million, or $0.43 per diluted common share, in the third quarter of 2023, compared to $11.6 million, or $0.69 per diluted common share, in the third quarter of 2022, and compared to $8.8 million, or $0.52 per diluted common share, in the second quarter of 2023.

Highlights for the Third Quarter of 2023

  • Operating earnings of $7.2 million, or $0.43 per diluted common share
  • Repositioned $159.6 million of available-for-sale securities, moving into higher yielding assets
  • Net organic loan and lease growth of $42 million – 5% annualized quarter-over-quarter increase
  • Credit quality remains solid with nonperforming assets to total assets of 0.12%
  • Deposit growth of $46.9 million – 4.5% annualized quarter-over-quarter increase

Billy Carroll, President & CEO, stated: “Our Company and employees continue to operate at a high level, providing excellent client service while tactfully navigating a difficult operating landscape.  During September, we strategically took advantage of a balance sheet optimization opportunity, reallocating $160 million from low-yielding investments into higher yielding assets.  We felt it prudent to capitalize on the current rate environment and better position our balance sheet as we look toward 2024.  Our team continues to grow new loan and deposit relationships despite the higher rate headwinds, a testament to their professionalism and reputations within their respective markets.  As our Bank absorbs and moves through the impacts of the recent Fed rate increases, we look forward to continued revenue expansion and remain bullish on our Company outlook.”

SmartFinancial’s Chairman, Miller Welborn, concluded: “The entire SmartBank team worked diligently over the past quarter and, quite frankly, over the entire year to exceed client expectations and drive consistent growth.  However, this quarter I was especially pleased that SmartBank was once again honored with the “Top Workplace” designation as voted on by employees for the seventh year in a row!  I’m so proud of where we are as a company and extremely optimistic about the future.”

Net Interest Income and Net Interest Margin

Net interest income was $31.0 million for the third quarter of 2023, compared to $31.6 million for the prior quarter.  Average earning assets totaled $4.40 billion, an increase of $58.5 million from the prior quarter.  The increase in average earnings assets was primarily driven by an increase in average loans and leases of $52.1 million and average interest-earning cash of $34.2 million, offset by a decrease in average securities of $27.8 million.  Average interest-bearing liabilities increased by $73.5 million from the prior quarter, attributable to an increase in average deposits of $82.1 million, offset by a decrease in average borrowings of $8.6 million.

The tax equivalent net interest margin was 2.81% for the third quarter of 2023, compared to 2.93% for the prior quarter. The tax equivalent net interest margin was negatively impacted by the continued rise in the cost of interest-bearing liabilities and increased pricing competition.  The yield on loans and leases, excluding loan fees was 5.52% for the third quarter, compared to 5.39% for the prior quarter.

The cost of total deposits for the third quarter of 2023 was 2.20% compared to 1.89% in the prior quarter. The cost of interest-bearing liabilities increased to 2.89% for the third quarter of 2023 compared to 2.53% for the prior quarter. The cost of average interest-bearing deposits was 2.84% for the third quarter of 2023 compared to 2.46% for the prior quarter, an increase of 38 basis points.  The increase in the cost of deposits is due to an increase in interest rates, customer migration to higher rate deposit products and increased competition for deposits.

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

               
   

Three Months Ended

     
   

Sep

 

Jun

 

Increase

 

Selected Interest Rates and Yields

 

2023

 

2023

 

(Decrease)

 

Yield on loans and leases, excluding loan fees

 

5.52

%

5.39

%

0.13

%

Yield on loans and leases

 

5.61

%

5.51

%

0.10

%

Yield on earning assets, on a fully tax equivalent basis (FTE)

 

4.99

%

4.82

%

0.17

%

Cost of interest-bearing deposits

 

2.84

%

2.46

%

0.38

%

Cost of total deposits

 

2.20

%

1.89

%

0.31

%

Cost of interest-bearing liabilities

 

2.89

%

2.53

%

0.36

%

Net interest margin, FTE

 

2.81

%

2.93

%

(0.12)

%

Provision for Credit Losses on Loans and Leases and Credit Quality

At September 30, 2023, the allowance for credit losses was $33.7 million.  The allowance for credit losses to total loans and leases was 1.00% as of September 30, 2023, compared to 0.98% as of June 30, 2023. 

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

                       
     

Three Months Ended

       
       

Sep

   

Jun

       
 

Provision for Credit Losses on Loans and Leases Rollforward

   

2023

   

2023

   

Change

 
 

Beginning balance

 

$

32,747

 

$

32,279

 

$

468

 
 

Charge-offs

   

(417)

   

(207)

   

(210)

 
 

Recoveries

   

73

   

255

   

(182)

 
 

Net (charge-offs) recoveries

   

(344)

   

48

   

(392)

 
 

Provision for credit losses (1)

   

1,284

   

420

   

864

 
 

Ending balance

 

$

33,687

 

$

32,747

 

$

940

 
                       
 

Allowance for credit losses to total loans and leases, gross

   

1.00

%

 

0.98

%

 

0.02

%

  1. The current quarter-ended and prior quarter-ended, excludes unfunded commitments release of $489 thousand and $307 thousand, respectively.  At September 30, 2023, the unfunded commitment liability totaled $2.3 million. 

Nonperforming loans and leases as a percentage of total loans and leases was 0.12% as of September 30, 2023, an increase of 1 basis point from the 0.11% reported in the second 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 0.12% as of September 30, 2023, and June 30, 2023.

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

                       
     

Three Months Ended

       
       

Sep

   

Jun

   

Increase

 
 

Credit Quality

   

2023

   

2023

   

(Decrease)

 
 

Nonaccrual loans and leases

 

$

3,934

 

$

3,722

 

$

212

 
 

Loans and leases past due 90 days or more and still accruing

   

229

   

   

229

 
 

Total nonperforming loans and leases

   

4,163

   

3,722

   

441

 
 

Other real estate owned

   

1,370

   

1,708

   

(338)

 
 

Other repossessed assets

   

348

   

282

   

66

 
 

Total nonperforming assets

 

$

5,881

 

$

5,712

 

$

169

 
                       
 

Nonperforming loans and leases to total loans and leases, gross

   

0.12

%

 

0.11

%

 

0.01

%

 

Nonperforming assets to total assets

   

0.12

%

 

0.12

%

 

%

Noninterest Income

Noninterest income decreased $6.4 million to $691 thousand for the third quarter of 2023 compared to $7.1 million for the prior quarter.  The current quarter decrease was associated with a $6.8 million pre-tax loss on the sale of $159.6 million of available for sale securities, moving into higher yielding assets.  Excluding the loss on securities, noninterest income increased $362 thousand.

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

                   
   

Three Months Ended

     
     

Sep

   

Jun

   

Increase

Noninterest Income

   

2023

   

2023

   

(Decrease)

Service charges on deposit accounts

 

$

1,736

 

$

1,657

 

$

79

Gain (loss) on sale of securities, net

   

(6,801)

   

   

(6,801)

Mortgage banking income

   

309

   

332

   

(23)

Investment services

   

1,461

   

1,300

   

161

Insurance commissions

   

1,153

   

1,139

   

14

Interchange and debit card transaction fees

   

1,357

   

1,347

   

10

Other

   

1,476

   

1,355

   

121

Total noninterest income

 

$

691

 

$

7,130

 

$

(6,439)

Noninterest Expense

Noninterest expense increased $1.1 million to $28.5 million for the third quarter of 2023 compared to $27.4 million for the prior quarter. The current quarter increase was primarily related to increases in health insurance claims, incentives and additional commission expense associated with higher production from our leasing company, wealth and capital markets teams.

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

                   
   

Three Months Ended

     
     

Sep

   

Jun

   

Increase

Noninterest Expense

   

2023

   

2023

   

(Decrease)

Salaries and employee benefits

 

$

16,785

 

$

15,947

 

$

838

Occupancy and equipment

   

3,547

   

3,318

   

229

FDIC insurance

   

825

   

875

   

(50)

Other real estate and loan related expenses

   

603

   

441

   

162

Advertising and marketing

   

346

   

305

   

41

Data processing and technology

   

2,378

   

2,235

   

143

Professional services

   

735

   

764

   

(29)

Amortization of intangibles

   

647

   

675

   

(28)

Merger related and restructuring expenses

   

110

   

   

110

Other

   

2,540

   

2,850

   

(310)

Total noninterest expense

 

$

28,516

 

$

27,410

 

$

1,106

Income Tax Expense

Income tax expense was $319 thousand for the third quarter of 2023, a decrease of $2.0 million, compared to $2.3 million for the prior quarter.

The effective tax rate was 13.37% for the third quarter of 2023 and 20.98% for the prior quarter. The primary reason for the 7.61% decline in the effective tax rate was due to lower earnings, largely from the $6.8 million pre-tax loss on sale of available-for-sale securities during the quarter.

Balance Sheet Trends

Total assets at September 30, 2023 were $4.80 billion compared to $4.64 billion at December 31, 2022.  The $159.7 million increase is primarily attributable to increases in loans and leases of $125.4 million, cash and cash equivalents of $133.8 million and other assets of $15.1 million.  Asset increases were offset by a decrease in securities of $102.4 million and an increase in the allowance for credit losses of $10.4 million, primarily for the one-time adjustment of $8.7 million related to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit losses on Financial Instruments (“ASU 2016-13”) on January 1, 2023.

Total liabilities increased to $4.35 billion at September 30, 2023 from $4.21 billion at December 31, 2022.  The increase of $145.5 million was primarily from organic deposit growth of $169.4 million, offset by a decrease in borrowings of $27.7 million.

Shareholders’ equity at September 30, 2023 totaled $446.7 million, an increase of $14.2 million, from December 31, 2022.  The increase in shareholders’ equity was primarily driven by net income of $22.4 million for the nine months ended September 30, 2023, offset by the impact of the adoption of ASU 2016-13 on January 1, 2023, of $6.6 million (net of taxes), and dividends paid of $4.1 million.  Tangible book value per share was $19.94 at September 30, 2023, compared to $19.09 at December 31, 2022.  Tangible common equity1 as a percentage of tangible assets1 was 7.23% at September 30, 2023, compared with 7.13% at December 31, 2022.

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

                     
   

Sep

 

Dec

 

Increase

 

Selected Balance Sheet Information

 

2023

 

2022

 

(Decrease)

 

Total assets

 

$

4,797,171

 

$

4,637,498

 

$

159,673

 

Total liabilities

   

4,350,519

   

4,205,046

   

145,473

 

Total equity

   

446,652

   

432,452

   

14,200

 

Securities

   

667,444

   

769,842

   

(102,398)

 

Loans and leases

   

3,378,999

   

3,253,627

   

125,372

 

Deposits

   

4,246,509

   

4,077,100

   

169,409

 

Borrowings

   

14,117

   

41,860

   

(27,743)

 

Conference Call Information

SmartFinancial issued this earnings release for the third quarter of 2023 on Monday, October 23, 2023, and will host a conference call on Tuesday, October 24, 2023, at 10:00 a.m. ET.  To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and entering the access code, 071225.  A replay of the conference call will be available through December 23, 2023, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 816201.  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, (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 expense excludes the following from noninterest expense: prior year adjustments to salaries, merger related and restructuring expenses and certain franchise tax true-up expenses. 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 (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

   

Sep

Jun

Mar

Dec

Sep

   

2023

 

2023

 

2023

 

2022

 

2022

Assets:

     

 

 

 

 

Cash and cash equivalents

 

$

400,258

 

$

238,898

 

$

306,934

 

$

266,424

 

$

543,029

Securities available-for-sale, at fair value

 

385,131

 

540,308

 

560,418

 

483,893

 

519,723

Securities held-to-maturity, at amortized cost

   

282,313

   

283,564

   

284,776

   

285,949

   

287,104

Other investments

 

13,805

 

14,396

 

14,059

 

15,530

 

15,528

Loans held for sale

 

2,734

 

986

 

3,324

 

1,752

 

2,742

Loans and leases

 

3,378,999

 

3,337,790

 

3,281,787

 

3,253,627

 

3,099,116

Less: Allowance for credit losses

 

(33,687)

 

(32,747)

 

(32,279)

 

(23,334)

 

(22,769)

Loans and leases, net

 

3,345,312

 

3,305,043

 

3,249,508

 

3,230,293

 

3,076,347

Premises and equipment, net

 

92,020

 

92,351

 

92,190

 

92,511

 

91,944

Other real estate owned

 

1,370

 

1,708

 

1,708

 

1,436

 

1,226

Goodwill and other intangibles, net

 

107,792

 

108,439

 

109,114

 

109,772

 

110,460

Bank owned life insurance

 

82,914

 

82,419

 

81,938

 

81,470

 

81,001

Other assets

 

83,522

 

77,688

 

65,836

 

68,468

 

67,807

Total assets

 

$

4,797,171

 

$

4,745,800

 

$

4,769,805

 

$

4,637,498

 

$

4,796,911

Liabilities:

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing demand

 

$

923,763

 

$

1,003,432

 

$

989,753

 

$

1,072,449

 

$

1,186,209

Interest-bearing demand

 

993,717

 

938,758

 

989,738

 

965,911

 

962,901

Money market and savings

 

1,766,409

 

1,720,202

 

1,761,847

 

1,583,481

 

1,663,355

Time deposits

 

562,620

 

537,192

 

488,208

 

455,259

 

467,944

Total deposits

 

4,246,509

 

4,199,584

 

4,229,546

 

4,077,100

 

4,280,409

Borrowings

 

14,117

 

15,496

 

16,546

 

41,860

 

18,423

Subordinated debt

 

42,078

 

42,057

 

42,036

 

42,015

 

41,994

Other liabilities

 

47,815

 

43,816

 

38,278

 

44,071

 

41,374

Total liabilities

 

4,350,519

 

4,300,953

 

4,326,406

 

4,205,046

 

4,382,200

Shareholders’ Equity:

 

   

   

   

   

 

Common stock

 

16,995

 

17,004

 

17,004

 

16,901

 

16,888

Additional paid-in capital

 

295,542

 

295,296

 

294,930

 

294,330

 

293,907

Retained earnings

 

168,271

 

167,564

 

160,085

 

156,545

 

144,723

Accumulated other comprehensive income (loss)

 

(34,156)

 

(35,017)

 

(28,620)

 

(35,324)

 

(40,807)

Total shareholders’ equity

 

446,652

 

444,847

 

443,399

 

432,452

 

414,711

Total liabilities & shareholders’ equity

 

$

4,797,171

 

$

4,745,800

 

$

4,769,805

 

$

4,637,498

 

$

4,796,911

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands except share and per share data)

                                         
 

Three Months Ended

Nine Months Ended

 

Sep

Jun

Mar

Dec

Sep

Sep

Sep

 

2023

 

2023

 

2023

 

2022

 

2022

 

2023

 

2022

Interest income:

 

 

 

 

 

           

Loans and leases, including fees

$

47,539

 

$

45,446

 

$

44,728

 

$

40,082

 

$

35,127

 

$

137,712

 

$

96,300

Investment securities:

 

 

 

 

 

 

Taxable

4,335

 

4,335

 

3,651

 

3,337

 

3,135

 

12,322

 

8,463

Tax-exempt

356

 

357

 

353

 

797

 

561

 

1,066

 

1,369

Federal funds sold and other earning assets

3,045

 

1,956

 

4,446

 

3,098

 

3,474

 

9,448

 

5,389

Total interest income

55,275

 

52,094

 

53,178

 

47,314

 

42,297

 

160,548

 

111,521

Interest expense:

 

 

 

 

 

 

Deposits

23,433

 

19,554

 

16,346

 

8,844

 

4,866

 

59,333

 

9,384

Borrowings

210

 

339

 

224

 

232

 

97

 

775

 

371

Subordinated debt

626

 

626

 

626

 

626

 

626

 

1,877

 

1,877

Total interest expense

24,269

 

20,519

 

17,196

 

9,702

 

5,589

 

61,985

 

11,632

Net interest income

31,006

 

31,575

 

35,982

 

37,612

 

36,708

 

98,563

 

99,889

Provision for credit losses

795

 

113

 

550

 

788

 

974

 

1,458

 

3,230

Net interest income after provision for credit losses

30,211

 

31,462

 

35,432

 

36,824

 

35,734

 

97,105

 

96,659

Noninterest income:

 

 

 

 

 

 

Service charges on deposit accounts

1,736

 

1,657

 

1,445

 

1,477

 

1,611

 

4,838

 

4,376

Gain (loss) on sale of securities, net

(6,801)

 

 

 

144

 

 

(6,801)

 

Mortgage banking

309

 

332

 

172

 

77

 

170

 

813

 

1,475

Investment services

1,461

 

1,300

 

1,005

 

958

 

1,051

 

3,766

 

3,186

Insurance commissions

1,153

 

1,139

 

1,259

 

1,233

 

864

 

3,551

 

2,363

Interchange and debit card transaction fees

1,357

 

1,347

 

1,383

 

1,328

 

1,356

 

4,087

 

4,107

Other

1,476

 

1,355

 

1,661

 

1,908

 

1,198

 

4,492

 

5,083

Total noninterest income

691

 

7,130

 

6,925

 

7,125

 

6,250

 

14,746

 

20,590

Noninterest expense:

 

 

 

 

 

 

Salaries and employee benefits

16,785

 

15,947

 

16,742

 

16,384

 

16,317

 

49,474

 

47,036

Occupancy and equipment

3,547

 

3,318

 

3,208

 

3,015

 

3,167

 

10,073

 

9,020

FDIC insurance

825

 

875

 

541

 

650

 

705

 

2,241

 

2,022

Other real estate and loan related expense

603

 

441

 

572

 

517

 

565

 

1,616

 

1,930

Advertising and marketing

346

 

305

 

355

 

308

 

288

 

1,006

 

985

Data processing and technology

2,378

 

2,235

 

2,163

 

2,097

 

1,872

 

6,777

 

5,185

Professional services

735

 

764

 

807

 

981

 

822

 

2,307

 

2,809

Amortization of intangibles

647

 

675

 

659

 

688

 

650

 

1,981

 

1,919

Merger related and restructuring expenses

110

 

 

 

(45)

 

87

 

110

 

607

Other

2,540

 

2,850

 

2,482

 

2,821

 

2,757

 

7,870

 

7,361

Total noninterest expense

28,516

 

27,410

 

27,529

 

27,416

 

27,230

 

83,455

 

78,874

Income before income taxes

2,386

 

11,182

 

14,828

 

16,533

 

14,754

 

28,396

 

38,375

Income tax expense

319

 

2,346

 

3,328

 

3,529

 

3,211

 

5,993

 

8,357

Net income

$

2,067

 

$

8,836

 

$

11,500

 

$

13,004

 

$

11,543

 

$

22,403

 

$

30,018

Earnings per common share:

 

 

 

 

 

 

Basic

$

0.12

 

$

0.53

 

$

0.69

 

$

0.78

 

$

0.69

 

$

1.33

 

$

1.79

Diluted

$

0.12

 

$

0.52

 

$

0.68

 

$

0.77

 

$

0.68

 

$

1.33

 

$

1.78

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

16,807,548

 

16,806,389

 

16,791,406

 

16,758,706

 

16,749,255

 

16,801,840

 

16,734,298

Diluted

16,918,635

 

16,898,091

 

16,896,494

 

16,884,253

 

16,872,022

 

16,907,325

 

16,867,970

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

YIELD ANALYSIS

                                                   
   

Three Months Ended

   

September 30, 2023

 

June 30, 2023

 

September 30, 2022

 

Average

   

Yield/

Average

   

Yield/

Average

 

Yield/

   

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

Assets:

 

 

 

 

 

 

 

Loans and leases, including fees1

 

$

3,360,678

 

$

47,539

5.61

%  

$

3,308,595

 

$

45,446

5.51

%  

$

3,037,092

 

$

35,127

4.59

%

Taxable securities

 

743,054

 

4,335

2.31

%  

770,275

 

4,335

2.26

%  

720,114

 

3,135

1.73

%

Tax-exempt securities2

 

64,707

 

451

2.77

%  

65,265

 

452

2.78

%  

101,559

 

732

2.86

%

Federal funds sold and other earning assets

 

229,487

 

3,045

5.26

%  

195,266

 

1,956

4.02

%  

587,755

 

3,474

2.34

%

Total interest-earning assets

 

4,397,926

 

55,370

4.99

%  

4,339,401

 

52,189

4.82

%  

4,446,520

 

42,468

3.79

%

Noninterest-earning assets

 

379,456

 

 

   

355,701

 

 

362,869

 

 

Total assets

 

$

4,777,382

           

$

4,695,102

 

 

$

4,809,389

 

 
                                                   

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

969,122

 

5,463

 

2.24

%  

$

950,227

 

4,892

2.06

%  

$

966,437

 

1,956

0.80

%

Money market and savings deposits

 

1,753,671

 

13,744

 

3.11

%  

1,737,303

 

11,785

2.72

%  

1,632,510

 

2,298

0.56

%

Time deposits

 

551,191

 

4,226

 

3.04

%  

504,350

 

2,877

2.29

%  

501,919

 

612

0.48

%

Total interest-bearing deposits

 

3,273,984

 

23,433

 

2.84

%  

3,191,880

 

19,554

2.46

%  

3,100,866

 

4,866

0.62

%

Borrowings

 

16,228

 

210

 

5.13

%  

24,845

 

339

5.47

%  

13,141

 

97

2.93

%

Subordinated debt

 

42,065

 

626

 

5.90

%  

42,044

 

626

5.97

%  

41,980

 

626

5.91

%

Total interest-bearing liabilities

 

3,332,277

 

24,269

 

2.89

%  

3,258,769

 

20,519

2.53

%  

3,155,987

 

5,589

0.70

%

Noninterest-bearing deposits

 

951,179

 

       

951,381

 

 

1,192,813

 

 

Other liabilities

 

48,494

 

       

40,669

 

 

35,224

 

 

Total liabilities

 

4,331,950

 

       

4,250,819

 

 

4,384,024

 

 

Shareholders’ equity

 

445,432

 

       

444,283

 

 

425,365

 

 

Total liabilities and shareholders’ equity

 

$

4,777,382

           

$

4,695,102

 

 

$

4,809,389

 

 
                                                   

Net interest income, taxable equivalent

       

$

31,101

     

 

$

31,670

 

 

$

36,879

 

Interest rate spread

 

   

   

2.11

%  

 

2.30

%  

 

3.09

%  

Tax equivalent net interest margin

 

   

   

2.81

%  

 

2.93

%  

 

3.29

%  

                                                   

Percentage of average interest-earning assets to average interest-bearing liabilities

 

   

   

131.98

%  

 

133.16

%  

 

140.89

%  

Percentage of average equity to average assets

 

   

   

9.32

%  

 

9.46

%  

 

8.84

%  

1 Includes average balance of $2.7 million, $2.9 million, and $22.0 million in PPP loans for the quarters ended September 30, 2023, June 30, 2023, and September 30, 2022, respectively. 

2 Yields computed on tax-exempt instruments on a tax equivalent basis include $95 thousand, $95 thousand, and $171 thousand of taxable equivalent income for the quarters ended September 30, 2023, June 30, 2023, and September 30, 2022, respectively. 

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

YIELD ANALYSIS

                                     
   

Nine Months Ended

   

September 30, 2023

 

September 30, 2022

 
 

Average

   

Yield/

Average

   

Yield/

   

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

Assets:

 

 

 

 

 

Loans and leases, including fees1

 

$

3,309,616

 

$

137,712

 

5.56

%  

$

2,880,444

 

$

96,300

4.47

%  

Taxable securities

 

745,694

 

12,322

 

2.21

%  

683,926

 

8,463

1.65

%  

Tax-exempt securities2

 

65,170

 

1,349

 

2.77

%  

102,872

 

1,873

2.43

%  

Federal funds sold and other earning assets

 

267,124

 

9,448

 

4.73

%  

663,400

 

5,389

1.09

%  

Total interest-earning assets

 

4,387,604

 

160,831

 

4.90

%  

4,330,642

 

112,025

3.46

%  

Noninterest-earning assets

 

365,123

 

 

     

373,081

 

 

Total assets

 

$

4,752,727

             

$

4,703,723

 

 
                                     

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

954,585

 

14,583

 

2.04

%  

$

952,523

 

3,137

0.44

%  

Money market and savings deposits

 

1,770,232

 

35,912

 

2.71

%  

1,572,287

 

4,282

0.36

%  

Time deposits

 

508,600

 

8,838

 

2.32

%  

531,419

 

1,965

0.49

%  

Total interest-bearing deposits

 

3,233,417

 

59,333

 

2.45

%  

3,056,229

 

9,384

0.41

%  

Borrowings

 

19,309

 

775

 

5.37

%  

37,933

 

371

1.31

%  

Subordinated debt

 

42,044

 

1,877

 

5.97

%  

41,959

 

1,877

5.98

%  

Total interest-bearing liabilities

 

3,294,770

 

61,985

 

2.52

%  

3,136,121

 

11,632

0.50

%  

Noninterest-bearing deposits

 

972,507

 

   

   

1,111,854

 

   

Other liabilities

 

44,703

 

   

   

31,412

 

   

Total liabilities

 

4,311,980

 

   

   

4,279,387

 

   

Shareholders’ equity

 

440,747

 

   

   

424,336

 

   

Total liabilities and shareholders’ equity

 

$

4,752,727

             

$

4,703,723

 

   
                                     

Net interest income, taxable equivalent

       

$

98,846

       

 

$

100,393

   

Interest rate spread

 

   

   

2.39

%  

 

2.96

%  

Tax equivalent net interest margin

 

   

   

3.01

%  

 

3.10

%  

                                     

Percentage of average interest-earning assets to average interest-bearing liabilities

 

   

   

133.17

%  

 

138.09

%  

Percentage of average equity to average assets

 

   

   

9.27

%  

 

9.02

%  

1 Includes average balance of $2.9 million and $36.6 million in PPP loans for the nine months ended September 30, 2023, and 2022, respectively. 

2 Yields computed on tax-exempt instruments on a tax equivalent basis include $283 thousand and $504 thousand of taxable equivalent income for the nine months ended September 30, 2023, and 2022, respectively. 

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

                                 
   

As of and for The Three Months Ended

 

Sep

Jun

Mar

Dec

Sep

   

2023

 

2023

 

2023

 

2022

 

2022

Composition of Loans and Leases:

 

           

 

 

 

Commercial real estate:

 

           

 

 

 

Owner occupied

 

$

776,402

 

$

769,978

 

$

764,166

 

$

765,041

 

$

714,734

 

Non-owner occupied

 

890,774

 

871,779

 

871,368

 

862,720

 

822,317

 

Commercial real estate, total

 

1,667,176

 

1,641,757

 

1,635,534

 

1,627,761

 

1,537,051

 

Commercial & industrial

 

617,115

 

594,427

 

571,153

 

551,867

 

514,280

 

Construction & land development

 

373,068

 

394,742

 

386,253

 

402,501

 

405,007

 

Consumer real estate

 

638,518

 

624,828

 

606,343

 

587,977

 

562,408

 

Leases

   

68,538

   

66,401

   

67,701

   

67,427

   

64,798

 

Consumer and other

 

14,584

 

15,635

 

14,803

 

16,094

 

15,572

 

Total loans and leases

 

$

3,378,999

 

$

3,337,790

 

$

3,281,787

 

$

3,253,627

 

$

3,099,116

 
                                 

Asset Quality and Additional Loan Data:

 

             

 

 

Nonperforming loans and leases

 

$

4,163

 

$

3,722

 

$

3,247

 

$

2,951

 

$

3,379

 

Other real estate owned

 

1,370

 

1,708

 

1,708

 

1,436

 

1,226

 

Other repossessed assets

   

348

   

282

   

66

   

422

   

 

Total nonperforming assets

 

$

5,881

 

$

5,712

 

$

5,021

 

$

4,809

 

$

4,605

 

Restructured loans and leases not included in nonperforming loans and leases

 

$

2,376

 

$

657

 

$

97

 

$

101

 

$

108

 

Net charge-offs to average loans and leases (annualized)

 

0.04

%  

(0.01)

%  

0.03

%  

0.03

%  

0.02

%

Allowance for credit losses to loans and leases

 

1.00

%  

0.98

%  

0.98

%  

0.72

%  

0.73

%

Nonperforming loans and leases to total loans and leases, gross

 

0.12

%  

0.11

%  

0.10

%  

0.09

%  

0.11

%

Nonperforming assets to total assets

 

0.12

%  

0.12

%  

0.11

%  

0.10

%  

0.10

%

Acquired loan and lease fair value discount balance

 

$

 

$

 

$

 

$

13,128

 

$

14,465

 

Accretion income on acquired loans and leases

 

 

 

 

1,396

 

148

 

PPP net fees deferred balance

   

94

   

104

   

114

   

122

   

140

 

PPP net fees recognized

   

10

   

10

   

8

   

17

   

163

 
                                 

Capital Ratios:

 

             

 

 

Equity to Assets

 

9.31

%  

9.37

%  

9.30

%  

9.33

%  

8.65

%

Tangible common equity to tangible assets (Non-GAAP)1

 

7.23

%  

7.25

%  

7.17

%  

7.13

%  

6.49

%

                                 

SmartFinancial, Inc.2

 

             

 

 

Tier 1 leverage

 

8.13

%  

8.24

%  

7.91

%  

7.95

%  

7.40

%

Common equity Tier 1

 

10.01

%  

10.12

%  

9.95

%  

9.65

%  

9.65

%

Tier 1 capital

 

10.01

%  

10.12

%  

9.95

%  

9.65

%  

9.65

%

Total capital

 

11.83

%  

11.94

%  

11.77

%  

11.40

%  

11.44

%

                                 

SmartBank

 

 

Estimated3

             

 

 

Tier 1 leverage

 

9.00

%  

9.18

%  

8.87

%  

8.90

%  

8.27

%

Common equity Tier 1

 

11.13

%  

11.27

%  

11.15

%  

10.82

%  

10.78

%

Tier 1 capital

 

11.13

%  

11.27

%  

11.15

%  

10.82

%  

10.78

%

Total capital

 

11.85

%  

11.97

%  

11.85

%  

11.44

%  

11.41

%

1Total common equity less intangibles divided by total assets less intangibles.  See reconciliation of Non-GAAP measures.

2All periods presented are estimated.

3 Current 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

   

As of and for The

 
 

Three Months Ended

Nine Months Ended

 
 

Sep

Jun

Mar

Dec

Sep

 

Sep

Sep

 
 

2023

 

2023

 

2023

 

2022

 

2022

   

2023

 

2022

 

Selected Performance Ratios (Annualized):

 

 

 

 

 

     

   

 

Return on average assets

 

0.17

%

 

0.75

%

 

0.97

%

 

1.11

%

 

0.95

%

   

0.63

%

 

0.85

%

Return on average shareholders’ equity

 

1.84

%

 

7.98

%

 

10.79

%

 

12.28

%

 

10.77

%

   

6.80

%

 

9.46

%

Return on average tangible common equity¹

 

2.43

%

 

10.57

%

 

14.45

%

 

16.65

%

 

14.36

%

   

9.02

%

 

12.60

%

Noninterest income / average assets

 

0.06

%

 

0.61

%

 

0.59

%

 

0.61

%

 

0.52

%

   

0.41

%

 

0.59

%

Noninterest expense / average assets

 

2.37

%

 

2.34

%

 

2.33

%

 

2.34

%

 

2.25

%

   

2.35

%

 

2.24

%

Efficiency ratio

 

89.96

%

 

70.82

%

 

64.16

%

 

61.28

%

 

63.39

%

   

73.65

%

 

65.47

%

                                             

Operating Selected Performance Ratios (Annualized):

 

   

   

   

   

     

   

 

Operating return on average assets1

 

0.60

%

 

0.75

%

 

0.97

%

 

1.10

%

 

0.96

%

   

0.77

%

 

0.87

%

Operating PPNR return on average assets1

 

0.84

%

 

0.96

%

 

1.30

%

 

1.46

%

 

1.30

%

   

1.03

%

 

1.20

%

Operating return on average shareholders’ equity1

 

6.41

%

 

7.98

%

 

10.79

%

 

12.15

%

 

10.83

%

   

8.35

%

 

9.60

%

Operating return on average tangible common equity1

 

8.46

%

 

10.57

%

 

14.45

%

 

16.47

%

 

14.44

%

   

11.09

%

 

12.78

%

Operating efficiency ratio1

 

73.60

%

 

70.64

%

 

64.02

%

 

61.36

%

 

62.93

%

   

69.23

%

 

64.69

%

Operating noninterest income / average assets1

 

0.62

%

 

0.61

%

 

0.59

%

 

0.60

%

 

0.52

%

   

0.61

%

 

0.59

%

Operating noninterest expense / average assets1

 

2.36

%

 

2.34

%

 

2.33

%

 

2.35

%

 

2.24

%

   

2.34

%

 

2.22

%

                                             

Selected Interest Rates and Yields:

 

   

   

   

   

     

   

 

Yield on loans and leases, excluding loan fees

 

5.52

%

 

5.39

%

 

5.20

%

 

4.99

%

 

4.50

%

   

5.37

%

 

4.31

%

Yield on loans and leases

 

5.61

%

 

5.51

%

 

5.57

%

 

5.05

%

 

4.59

%

   

5.56

%

 

4.47

%

Yield on earning assets, FTE

 

4.99

%

 

4.82

%

 

4.88

%

 

4.41

%

 

3.79

%

   

4.90

%

 

3.46

%

Cost of interest-bearing deposits

 

2.84

%

 

2.46

%

 

2.05

%

 

1.18

%

 

0.62

%

   

2.45

%

 

0.41

%

Cost of total deposits

 

2.20

%

 

1.89

%

 

1.56

%

 

0.85

%

 

0.45

%

   

1.89

%

 

0.30

%

Cost of interest-bearing liabilities

 

2.89

%

 

2.53

%

 

2.12

%

 

1.27

%

 

0.70

%

   

2.52

%

 

0.50

%

Net interest margin, FTE

 

2.81

%

 

2.93

%

 

3.31

%

 

3.51

%

 

3.29

%

   

3.01

%

 

3.10

%

                                             

Per Common Share:

 

 

 

 

 

     

   

 

Net income, basic

$

0.12

 

$

0.53

 

$

0.69

 

$

0.78

 

$

0.69

   

$

1.33

 

$

1.79

 

Net income, diluted

0.12

 

0.52

 

0.68

 

0.77

 

0.68

   

1.33

 

1.78

 

Operating earnings, basic¹

0.43

 

0.53

 

0.69

 

0.77

 

0.69

   

1.64

 

1.82

 

Operating earnings, diluted¹

0.43

 

0.52

 

0.68

 

0.76

 

0.69

   

1.63

 

1.81

 

Book value

26.28

 

26.16

 

26.08

 

25.59

 

24.56

   

26.28

 

24.56

 

Tangible book value¹

19.94

 

19.78

 

19.66

 

19.09

 

18.02

   

19.94

 

18.02

 

Common shares outstanding

16,994,543

 

17,004,092

 

17,004,092

 

16,900,805

 

16,887,555

   

16,994,543

 

16,887,555

 

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

 

Nine Months Ended

 
 

Sep

Jun

Mar

Dec

Sep

Sep

Sep

 
   

2023

 

2023

 

2023

 

2022

 

2022

   

2023

 

2022

 

Operating Earnings:

 

 

 

 

 

               

Net income (GAAP)

 

$

2,067

 

$

8,836

 

$

11,500

 

$

13,004

 

$

11,543

   

$

22,403

 

$

30,018

 

Noninterest income:

 

 

 

 

 

   

 

 

Securities (gains) losses, net

 

6,801

 

 

 

(144)

 

   

6,801

 

 

Noninterest expenses:

 

   

   

   

   

     

   

   

Merger related and restructuring expenses

 

110

 

 

 

(45)

 

87

   

110

 

607

 

Income taxes:

 

   

   

   

   

     

   

   

Income tax effect of adjustments

 

(1,785)

 

 

 

49

 

(22)

   

(1,785)

 

(157)

 

Operating earnings (Non-GAAP)

 

$

7,193

 

$

8,836

 

$

11,500

 

$

12,864

 

$

11,608

   

$

27,529

 

$

30,468

 

Operating earnings per common share (Non-GAAP):

 

 

 

 

 

   

 

 

Basic

 

$

0.43

 

$

0.53

 

$

0.69

 

$

0.77

 

$

0.69

   

$

1.64

 

$

1.82

 

Diluted

 

0.43

 

0.52

 

0.68

 

0.76

 

0.69

   

1.63

 

1.81

 
                                               

Operating Noninterest Income:

 

 

 

 

 

   

 

 

Noninterest income (GAAP)

 

$

691

 

$

7,130

 

$

6,925

 

$

7,125

 

$

6,250

   

$

14,746

 

$

20,590

 

Securities (gains) losses, net

 

6,801

 

 

 

(144)

 

   

6,801

 

 

Operating noninterest income (Non-GAAP)

 

$

7,492

 

$

7,130

 

$

6,925

 

$

6,981

 

$

6,250

   

$

21,547

 

$

20,590

 

Operating noninterest income (Non-GAAP)/average assets1

 

0.62

%

0.61

%  

0.59

%  

0.60

%  

0.52

%

 

0.61

%

0.59

%

                                               

Operating Noninterest Expense:

 

 

 

 

 

   

 

 

Noninterest expense (GAAP)

 

$

28,516

 

$

27,410

 

$

27,529

 

$

27,416

 

$

27,230

   

$

83,455

 

$

78,874

 

Merger related and restructuring expenses

 

(110)

 

 

 

45

 

(87)

   

(110)

 

(607)

 

Operating noninterest expense (Non-GAAP)

 

$

28,406

 

$

27,410

 

$

27,529

 

$

27,461

 

$

27,143

   

$

83,345

 

$

78,267

 

Operating noninterest expense (Non-GAAP)/average assets2

 

2.36

%

2.34

%  

2.33

%  

2.35

%  

2.24

%

 

2.34

%

2.22

%

                                               

Operating Pre-provision Net revenue (“PPNR”) Earnings:

                                             

Net interest income (GAAP)

 

$

31,006

 

$

31,575

 

$

35,982

 

$

37,612

 

$

36,708

   

$

98,563

 

$

99,889

 

Operating noninterest income (Non-GAAP)

   

7,492

   

7,130

   

6,925

   

6,981

   

6,250

     

21,547

   

20,590

 

Operating noninterest expense (Non-GAAP)

   

(28,406)

   

(27,410)

   

(27,529)

   

(27,461)

   

(27,143)

     

(83,345)

   

(78,267)

 

Operating PPNR earnings (Non-GAAP)

 

$

10,092

 

$

11,295

 

$

15,378

 

$

17,132

 

$

15,815

   

$

36,765

 

$

42,212

 
                                               

Non-GAAP Return Ratios:

 

 

 

 

 

   

 

 

Operating return on average assets (Non-GAAP)3

 

0.60

%

0.75

%

0.97

%

1.10

%

0.96

%

 

0.77

%

0.87

%

Operating PPNR return on average assets (Non-GAAP)4

   

0.84

%

 

0.96

%

 

1.30

%

 

1.46

%

 

1.30

%

   

1.03

%

 

1.20

%

Return on average tangible common equity (Non-GAAP)5

 

2.43

%

10.57

%

14.45

%

16.65

%

14.36

%

 

9.02

%

12.60

%

Operating return on average shareholders’ equity (Non-GAAP)6

 

6.41

%

7.98

%

10.79

%

12.15

%

10.83

%

 

8.35

%

9.60

%

Operating return on average tangible common equity (Non-GAAP)7

 

8.46

%

10.57

%

14.45

%

16.47

%

14.44

%

 

11.09

%

12.78

%

                                               

Operating Efficiency Ratio:

 

 

 

 

 

   

 

 

Efficiency ratio (GAAP)

 

89.96

%

70.82

%

64.16

%

61.28

%

63.39

%

 

73.65

%

65.47

%

Adjustment for taxable equivalent yields

 

(0.27)

%

(0.18)

%

(0.14)

%

(0.22)

%

(0.25)

%

 

(0.18)

%

(0.28)

%

Adjustment for securities (gains) losses

 

15.89

%

%

%

(0.20)

%

%

 

4.17

%

%

Adjustment for merger related income and costs

 

(31.98)

%

%

%

0.50

%

(0.21)

%

 

(8.41)

%

(0.50)

%

Operating efficiency ratio (Non-GAAP)

 

73.60

%

70.64

%

64.02

%

61.36

%

62.93

%

 

69.23

%

64.69

%

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

 

Nine Months Ended

 

Sep

Jun

Mar

Dec

Sep

 

Sep

Sep

   

2023

 

2023

 

2023

 

2022

 

2022

   

2023

 

2022

Tangible Common Equity:

 

 

 

 

 

             

Shareholders’ equity (GAAP)

 

$

446,652

 

$

444,847

 

$

443,399

 

$

432,452

 

$

414,711

   

$

446,652

 

$

414,711

Less goodwill and other intangible assets

 

107,792

 

108,439

 

109,114

 

109,772

 

110,460

   

107,792

 

110,460

Tangible common equity (Non-GAAP)

 

$

338,860

 

$

336,408

 

$

334,285

 

$

322,680

 

$

304,251

   

$

338,860

 

$

304,251

                                             

Average Tangible Common Equity:

 

 

 

 

 

   

 

Average shareholders’ equity (GAAP)

 

$

445,432

 

$

444,283

 

$

432,382

 

$

420,037

 

$

425,365

   

$

440,747

 

$

424,336

Less average goodwill and other intangible assets

 

108,194

 

108,851

 

109,537

 

110,206

 

106,483

   

108,856

 

105,698

Average tangible common equity (Non-GAAP)

 

$

337,238

 

$

335,432

 

$

322,845

 

$

309,831

 

$

318,882

   

$

331,891

 

$

318,638

                                             

Tangible Book Value per Common Share:

                                           

Book value per common share (GAAP)

 

$

26.28

 

$

26.16

 

$

26.08

 

$

25.59

 

$

24.56

   

$

26.28

 

$

24.56

Adjustment due to goodwill and other intangible assets

   

(6.34)

   

(6.38)

   

(6.42)

   

(6.50)

   

(6.54)

     

(6.34)

   

(6.54)

Tangible book value per common share (Non-GAAP)1

 

$

19.94

 

$

19.78

 

$

19.66

 

$

19.09

 

$

18.02

   

$

19.94

 

$

18.02

                                             

Tangible Common Equity to Tangible Assets:

                                           

Total Assets (GAAP)

 

$

4,797,171

 

$

4,745,800

 

$

4,769,805

 

$

4,637,498

 

$

4,796,911

   

$

4,797,171

 

$

4,796,911

Less goodwill and other intangibles

   

107,792

   

108,439

   

109,114

   

109,772

   

110,460

     

107,792

   

110,460

Tangible Assets (Non-GAAP)

 

$

4,689,379

 

$

4,637,361

 

$

4,660,691

 

$

4,527,726

 

$

4,686,451

   

$

4,689,379

 

$

4,686,451

Tangible common equity to tangible assets (Non-GAAP)

   

7.23%

   

7.25%

   

7.17%

   

7.13%

   

6.49%

     

7.23%

   

6.49%

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