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KNOXVILLE, TN – July 22, 2024 – SmartFinancial, Inc. (“SmartFinancial” or the “Company”; NYSE: SMBK), today announced net income of $8.0 million, or $0.48 per diluted common share, for the second quarter of 2024, compared to net income of $8.8 million, or $0.52 per diluted common share, for the second quarter of 2023, and compared to prior quarter net income of $9.4 million, or $0.55 per diluted common share.  Operating earnings1, which excludes non-recurring income, net of tax adjustments, totaled $7.8 million, or $0.46 per diluted common share, in the second quarter of 2024, compared to $8.8 million, or $0.52 per diluted common share, in the second quarter of 2023, and compared to $8.4 million, or $0.49 per diluted common share, in the first quarter of 2024.

Highlights for the Second Quarter of 2024

  • Operating earnings of $7.8 million, or $0.46 per diluted common share
  • Net organic loan and lease growth of $97 million with 11% annualized quarter-over-quarter increase
  • Quarter-over-quarter net tax equivalent interest margin expansion of 12 basis points to 2.97%
  • 10% annualized quarter-over-quarter increase in tangible book value per common share1
  • 136,195 shares repurchased at a weighted average price of $21.57
  • Credit quality remains solid with nonperforming assets to total assets of 0.20%

Billy Carroll, President & CEO, stated: “Our Company continued to gain momentum with a very nice second quarter highlighted by solid growth in operating revenue and a 10% annualized increase in tangible book value per share quarter over quarter.  We also took advantage of our liquidity position, growing loans at an 11% quarterly annualized pace.  Margin inflection accelerated during the quarter, and we look forward to seeing that trend continue.  The sales energy around our Company is very strong and our outlook for the second half of 2024 remains bullish as we gain further operating leverage.”

SmartFinancial’s Chairman, Miller Welborn, concluded: “The Board of Directors was pleased to see operating leverage expansion and strong loan growth during the second quarter. The Company’s markets continue to provide great organic growth opportunities that we look forward to winning. We continue to strategically progress towards our longer-term financial objectives and this quarter’s margin expansion and expense control is a good demonstration of our team’s ability to execute our plan. We are confident in our team and look forward to continued improvement as the year progresses.”

Net Interest Income and Net Interest Margin

Net interest income was $32.8 million for the second quarter of 2024, compared to $31.7 million for the prior quarter.  Average earning assets totaled $4.5 billion for the current and prior quarters.  The categories of average earnings assets changed quarter-over-quarter, primarily from an increase in average loans and leases of $46.2 million, offset by a decrease in average securities of $40.8 million and average interest-earning cash of $7.5 million.  Average interest-bearing liabilities decreased by $19.8 million from the prior quarter, attributable to a decrease in average deposits of $21.3 million, offset by an increase in average borrowings of $1.4 million.

The tax equivalent net interest margin was 2.97% for the second quarter of 2024, compared to 2.85% for the prior quarter. The tax equivalent net interest margin was positively impacted by the increased yield on interest-earning assets, quarter-over-quarter, coupled with a slower rise on the cost of interest-bearing liabilities, quarter-over-quarter. The yield on loans and leases, excluding loan fees, on a fully tax equivalent basis (“FTE”) was 5.80% for the second quarter, compared to 5.71% for the prior quarter.

The cost of total deposits for the second quarter of 2024 was 2.56% compared to 2.52% in the prior quarter. The cost of interest-bearing liabilities increased to 3.29% for the second quarter of 2024, compared to 3.23% for the prior quarter. The cost of average interest-bearing deposits was 3.23% for the second quarter of 2024, compared to 3.16% for the prior quarter, an increase of 7 basis points. 

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

               
   

Three Months Ended

     
   

Jun

 

Mar

 

Increase

 

Selected Interest Rates and Yields

 

2024

 

2024

 

(Decrease)

 

Yield on loans and leases, excluding loan fees, FTE

 

5.80

%

5.71

%

0.09

%

Yield on loans and leases, FTE

 

5.87

%

5.82

%

0.05

%

Yield on earning assets, FTE

 

5.52

%

5.36

%

0.16

%

Cost of interest-bearing deposits

 

3.23

%

3.16

%

0.07

%

Cost of total deposits

 

2.56

%

2.52

%

0.04

%

Cost of interest-bearing liabilities

 

3.29

%

3.23

%

0.06

%

Net interest margin, FTE

 

2.97

%

2.85

%

0.12

%

Provision for Credit Losses on Loans and Leases and Credit Quality

At June 30, 2024, the allowance for credit losses was $34.7 million.  The allowance for credit losses to total loans and leases was 0.97% as of June 30, 2024, compared to 0.98% as of March 31, 2024. 

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

                       
     

Three Months Ended

       
       

Jun

   

Mar

   

Increase

 
 

Provision for Credit Losses on Loans and Leases Rollforward

   

2024

   

2024

   

(Decrease)

 
 

Beginning balance

 

$

34,203

 

$

35,066

 

$

(863)

 
 

Charge-offs

   

(457)

   

(920)

   

463

 
 

Recoveries

   

48

   

135

   

(87)

 
 

Net (charge-offs) recoveries

   

(409)

   

(785)

   

376

 
 

Provision for credit losses (1)

   

896

   

(78)

   

974

 
 

Ending balance

 

$

34,690

 

$

34,203

 

$

487

 
                       
 

Allowance for credit losses to total loans and leases, gross

   

0.97

%

 

0.98

%

 

(0.01)

%

  1. The current quarter-ended and prior quarter-ended excludes unfunded commitments release of $13 thousand and $362 thousand, respectively.  At June 30, 2024, the unfunded commitment liability totaled $2.0 million. 

Nonperforming loans and leases as a percentage of total loans and leases was 0.19% as of June 30, 2024, an increase of 1 basis point from the 0.18% reported in the first quarter of 2024.  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 0.20% as of June 30, 2024, and 0.18% on March 31, 2024.

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

                       
     

Three Months Ended

       
       

Jun

   

Mar

   

Increase

 
 

Credit Quality

   

2024

   

2024

   

(Decrease)

 
 

Nonaccrual loans and leases

 

$

6,432

 

$

6,171

 

$

261

 
 

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

   

210

   

95

   

115

 
 

Total nonperforming loans and leases

   

6,642

   

6,266

   

376

 
 

Other real estate owned

   

688

   

696

   

(8)

 
 

Other repossessed assets

   

2,645

   

2,033

   

612

 
 

Total nonperforming assets

 

$

9,975

 

$

8,995

 

$

980

 
                       
 

Nonperforming loans and leases to total loans and leases, gross

   

0.19

%

 

0.18

%

 

0.01

%

 

Nonperforming assets to total assets

   

0.20

%

 

0.18

%

 

0.02

%

Noninterest Income

Noninterest income decreased $776 thousand to $7.6 million for the second quarter of 2024 compared to $8.4 million for the prior quarter.  The current quarter decrease was primarily associated with the $1.3 million pre-tax gain on the sale of a former branch building in the prior quarter, offset by a $283 thousand pre-tax gain on the sale of a bank property in the current quarter. 

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

                   
   

Three Months Ended

     
     

Jun

   

Mar

   

Increase

Noninterest Income

   

2024

   

2024

   

(Decrease)

Service charges on deposit accounts

 

$

1,692

 

$

1,612

 

$

80

Mortgage banking income

   

348

   

280

   

68

Investment services

   

1,302

   

1,380

   

(78)

Insurance commissions

   

1,284

   

1,103

   

181

Interchange and debit card transaction fees

   

1,343

   

1,253

   

90

Other

   

1,635

   

2,752

   

(1,117)

Total noninterest income

 

$

7,604

 

$

8,380

 

$

(776)

Noninterest Expense

Noninterest expense increased $648 thousand to $29.2 million for the second quarter of 2024 compared to $28.6 million for the prior quarter. The current quarter increase was primarily related to an increase in salaries and employee benefits related to incentive accruals for production performance.

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

                   
   

Three Months Ended

     
     

Jun

   

Mar

   

Increase

Noninterest Expense

   

2024

   

2024

   

(Decrease)

Salaries and employee benefits

 

$

17,261

 

$

16,639

 

$

622

Occupancy and equipment

   

3,324

   

3,396

   

(72)

FDIC insurance

   

825

   

915

   

(90)

Other real estate and loan related expenses

   

538

   

584

   

(46)

Advertising and marketing

   

295

   

302

   

(7)

Data processing and technology

   

2,452

   

2,465

   

(13)

Professional services

   

1,064

   

924

   

140

Amortization of intangibles

   

608

   

612

   

(4)

Other

   

2,834

   

2,716

   

118

Total noninterest expense

 

$

29,201

 

$

28,553

 

$

648

Income Tax Expense

Income tax expense was $2.3 million for the second quarter of 2024, a decrease of $299 thousand, compared to $2.6 million for the prior quarter.

The effective tax rate was 22.56% for the second quarter of 2024 and 21.94% for the prior quarter.

Balance Sheet Trends

Total assets at June 30, 2024 were $4.89 billion compared to $4.83 billion at December 31, 2023.  The $61.6 million increase is primarily attributable to increases loans and leases of $129.7 million, offset by a decrease in securities of $59.8 million and cash and cash equivalents of $9.4 million.

Total liabilities increased to $4.42 billion at June 30, 2024 from $4.37 billion at December 31, 2023.  The increase of $49.0 million was primarily from organic deposit growth of $48.8 million.

Shareholders’ equity at June 30, 2024, totaled $472.5 million, an increase of $12.6 million, from December 31, 2023.  The increase in shareholders’ equity was primarily driven by net income of $17.4 million for the six months ended June 30, 2024, offset by dividends paid of $2.7 million and repurchase of the Company’s stock of $3.0 million.  Tangible book value per share was $21.66 at June 30, 2024, compared to $20.76 at December 31, 2023.  Tangible common equity1 as a percentage of tangible assets1 was 7.66% at June 30, 2024, compared with 7.47% at December 31, 2023.

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

                     
   

Jun

 

Dec

 

Increase

 

Selected Balance Sheet Information

 

2024

 

2023

 

(Decrease)

 

Total assets

 

$

4,891,009

 

$

4,829,387

 

$

61,622

 

Total liabilities

   

4,418,544

   

4,369,501

   

49,043

 

Total equity

   

472,465

   

459,886

   

12,579

 

Securities

   

629,817

   

689,646

   

(59,829)

 

Loans and leases

   

3,574,158

   

3,444,462

   

129,696

 

Deposits

   

4,316,656

   

4,267,854

   

48,802

 

Borrowings

   

12,732

   

13,078

   

(346)

 

Conference Call Information

SmartFinancial issued this earnings release for the second quarter of 2024 on Monday, July 22, 2024, and will host a conference call on Tuesday, July 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, 533803.  A replay of the conference call will be available through August 22, 2024, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 897395.  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 (“Non-GAAP”) 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 and ratios derived therefrom in its analysis of the Company’s performance, including:

  1. Operating earnings
  2. Operating noninterest income
  3. Operating noninterest expense
  4. Operating pre-provision net revenue (“PPNR”) earnings
  5. Tangible common equity
  6. Average tangible common equity
  7. Tangible book value per common share
  8. Tangible assets

Operating earnings, operating noninterest income, operating noninterest expense and operating PPNR exclude non-operating related income and expense items, respectively. Tangible common equity and average tangible common equity excludes goodwill and other intangible assets from shareholders’ equity and average shareholders’ equity, respectively. Tangible book value per common share is tangible common equity divided by common shares outstanding. Tangible assets excludes goodwill and other intangibles from total assets. A detailed reconciliation of these items and ratios derived therefrom is available in the Non-GAAP reconciliations.

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 also believes these Non-GAAP financial measures 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. our ability to anticipate interest rate changes and manage interest rate risk (including the impact of higher interest rates on macroeconomic conditions, competition, and the cost of doing business and the impact of prolonged elevated interest rates on our financial projections, models and guidance);
  9. increased technology and cybersecurity risks, including generative artificial intelligence risks;
  10. credit risk associated with our lending activities;
  11. changes in loan demand, real estate values, or competition;
  12. developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance;
  13. changes in accounting principles, policies, or guidelines;
  14. changes in applicable laws, rules, or regulations;
  15. adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions;
  16. 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;
  17. 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;
  18. 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
  19. 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

   

Jun

Mar

Dec

Sep

Jun

   

2024

 

2024

 

2023

 

2023

 

2023

Assets:

     

 

 

 

 

Cash and cash equivalents

 

$

342,835

 

$

477,941

 

$

352,271

 

$

400,258

 

$

238,898

Securities available-for-sale, at fair value

 

500,821

 

474,347

 

408,410

 

385,131

 

540,308

Securities held-to-maturity, at amortized cost

   

128,996

   

180,169

   

281,236

   

282,313

   

283,564

Other investments

 

13,780

 

13,718

 

13,662

 

13,805

 

14,396

Loans held for sale

 

3,103

 

4,861

 

4,418

 

2,734

 

986

Loans and leases

 

3,574,158

 

3,477,555

 

3,444,462

 

3,378,999

 

3,337,790

Less: Allowance for credit losses

 

(34,690)

 

(34,203)

 

(35,066)

 

(33,687)

 

(32,747)

Loans and leases, net

 

3,539,468

 

3,443,352

 

3,409,396

 

3,345,312

 

3,305,043

Premises and equipment, net

 

91,315

 

92,694

 

92,963

 

92,020

 

92,351

Other real estate owned

 

688

 

696

 

517

 

1,370

 

1,708

Goodwill and other intangibles, net

 

105,929

 

106,537

 

107,148

 

107,792

 

108,439

Bank owned life insurance

 

84,483

 

83,957

 

83,434

 

82,914

 

82,419

Other assets

 

79,591

 

76,418

 

75,932

 

83,522

 

77,688

Total assets

 

$

4,891,009

 

$

4,954,690

 

$

4,829,387

 

$

4,797,171

 

$

4,745,800

Liabilities:

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing demand

 

$

903,300

 

$

907,254

 

$

898,044

 

$

923,763

 

$

1,003,432

Interest-bearing demand

 

988,057

 

996,298

 

1,006,915

 

993,717

 

938,758

Money market and savings

 

1,901,281

 

1,952,410

 

1,812,427

 

1,766,409

 

1,720,202

Time deposits

 

524,018

 

538,159

 

550,468

 

562,620

 

537,192

Total deposits

 

4,316,656

 

4,394,121

 

4,267,854

 

4,246,509

 

4,199,584

Borrowings

 

12,732

 

9,849

 

13,078

 

14,117

 

15,496

Subordinated debt

 

42,142

 

42,120

 

42,099

 

42,078

 

42,057

Other liabilities

 

47,014

 

41,804

 

46,470

 

47,815

 

43,816

Total liabilities

 

4,418,544

 

4,487,894

 

4,369,501

 

4,350,519

 

4,300,953

Shareholders’ Equity:

 

   

   

   

   

 

Common stock

 

16,926

 

17,057

 

16,989

 

16,995

 

17,004

Additional paid-in capital

 

293,586

 

296,061

 

295,699

 

295,542

 

295,296

Retained earnings

 

187,751

 

181,103

 

173,105

 

168,271

 

167,564

Accumulated other comprehensive loss

 

(25,798)

 

(27,425)

 

(25,907)

 

(34,156)

 

(35,017)

Total shareholders’ equity

 

472,465

 

466,796

 

459,886

 

446,652

 

444,847

Total liabilities & shareholders’ equity

 

$

4,891,009

 

$

4,954,690

 

$

4,829,387

 

$

4,797,171

 

$

4,745,800

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands except share and per share data)

                                         
 

Three Months Ended

Six Months Ended

 

Jun

Mar

Dec

Sep

Jun

Jun

Jun

 

2024

 

2024

 

2023

 

2023

 

2023

 

2024

 

2023

Interest income:

 

 

 

 

 

           

Loans and leases, including fees

$

50,853

 

$

50,020

 

$

48,767

 

$

47,539

 

$

45,446

 

$

100,873

 

$

90,173

Investment securities:

 

 

 

 

 

 

Taxable

5,320

 

4,548

 

4,344

 

4,335

 

4,335

 

9,869

 

7,986

Tax-exempt

353

 

352

 

352

 

356

 

357

 

705

 

709

Federal funds sold and other earning assets

4,759

 

4,863

 

4,032

 

3,045

 

1,956

 

9,620

 

6,405

Total interest income

61,285

 

59,783

 

57,495

 

55,275

 

52,094

 

121,067

 

105,273

Interest expense:

 

 

 

 

 

 

Deposits

27,439

 

27,035

 

24,926

 

23,433

 

19,554

 

54,474

 

35,900

Borrowings

148

 

128

 

162

 

210

 

339

 

276

 

564

Subordinated debt

884

 

899

 

890

 

626

 

626

 

1,782

 

1,252

Total interest expense

28,471

 

28,062

 

25,978

 

24,269

 

20,519

 

56,532

 

37,716

Net interest income

32,814

 

31,721

 

31,517

 

31,006

 

31,575

 

64,535

 

67,557

Provision for credit losses

883

 

(440)

 

1,571

 

795

 

113

 

443

 

663

Net interest income after provision for credit losses

31,931

 

32,161

 

29,946

 

30,211

 

31,462

 

64,092

 

66,894

Noninterest income:

 

 

 

 

 

 

Service charges on deposit accounts

1,692

 

1,612

 

1,673

 

1,736

 

1,657

 

3,304

 

3,102

Loss on sale of securities, net

 

 

 

(6,801)

 

 

 

Mortgage banking

348

 

280

 

227

 

309

 

332

 

628

 

504

Investment services

1,302

 

1,380

 

1,339

 

1,461

 

1,300

 

2,682

 

2,305

Insurance commissions

1,284

 

1,103

 

1,133

 

1,153

 

1,139

 

2,387

 

2,398

Interchange and debit card transaction fees

1,343

 

1,253

 

1,370

 

1,357

 

1,347

 

2,596

 

2,730

Other

1,635

 

2,752

 

1,837

 

1,476

 

1,355

 

4,387

 

3,016

Total noninterest income

7,604

 

8,380

 

7,579

 

691

 

7,130

 

15,984

 

14,055

Noninterest expense:

 

 

 

 

 

 

Salaries and employee benefits

17,261

 

16,639

 

16,275

 

16,785

 

15,947

 

33,900

 

32,689

Occupancy and equipment

3,324

 

3,396

 

3,378

 

3,547

 

3,318

 

6,720

 

6,526

FDIC insurance

825

 

915

 

915

 

825

 

875

 

1,740

 

1,416

Other real estate and loan related expense

538

 

584

 

781

 

603

 

441

 

1,123

 

1,013

Advertising and marketing

295

 

302

 

336

 

346

 

305

 

597

 

660

Data processing and technology

2,452

 

2,465

 

2,458

 

2,378

 

2,235

 

4,916

 

4,398

Professional services

1,064

 

924

 

1,136

 

735

 

764

 

1,989

 

1,572

Amortization of intangibles

608

 

612

 

643

 

647

 

675

 

1,220

 

1,334

Merger related and restructuring expenses

 

 

 

110

 

 

 

Other

2,834

 

2,716

 

3,773

 

2,540

 

2,850

 

5,549

 

5,331

Total noninterest expense

29,201

 

28,553

 

29,695

 

28,516

 

27,410

 

57,754

 

54,939

Income before income taxes

10,334

 

11,988

 

7,830

 

2,386

 

11,182

 

22,322

 

26,010

Income tax expense

2,331

 

2,630

 

1,640

 

319

 

2,346

 

4,962

 

5,674

Net income

$

8,003

 

$

9,358

 

$

6,190

 

$

2,067

 

$

8,836

 

$

17,360

 

$

20,336

Earnings per common share:

 

 

 

 

 

 

Basic

$

0.48

 

$

0.56

 

$

0.37

 

$

0.12

 

$

0.53

 

$

1.03

 

$

1.21

Diluted

$

0.48

 

$

0.55

 

$

0.37

 

$

0.12

 

$

0.52

 

$

1.03

 

$

1.20

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

16,770,819

 

16,849,735

 

16,814,647

 

16,807,548

 

16,806,389

 

16,810,277

 

16,798,939

Diluted

16,850,250

 

16,925,408

 

16,918,234

 

16,918,635

 

16,898,091

 

16,887,374

 

16,897,444

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

YIELD ANALYSIS

                                                   
   

Three Months Ended

   

June 30, 2024

 

March 31, 2024

 

June 30, 2023

 

Average

   

Yield/

Average

   

Yield/

Average

 

Yield/

   

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

Assets:

 

 

 

 

 

 

 

Loans and leases, including fees1

 

$

3,504,265

 

$

51,110

5.87

%  

$

3,458,109

 

$

50,020

5.82

%  

$

3,308,595

 

$

45,446

5.51

%

Taxable securities

 

580,517

 

5,320

3.69

%  

620,805

 

4,548

2.95

%  

770,275

 

4,335

2.26

%

Tax-exempt securities2

 

63,690

 

447

2.82

%  

64,161

 

445

2.79

%  

65,265

 

452

2.78

%

Federal funds sold and other earning assets

 

346,459

 

4,759

5.52

%  

353,913

 

4,863

5.53

%  

195,266

 

1,956

4.02

%

Total interest-earning assets

 

4,494,931

 

61,636

5.52

%  

4,496,988

 

59,876

5.36

%  

4,339,401

 

52,189

4.82

%

Noninterest-earning assets

 

383,697

 

 

   

380,231

 

 

355,701

 

 

Total assets

 

$

4,878,628

           

$

4,877,219

 

 

$

4,695,102

 

 
                                                   

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

983,433

 

5,950

 

2.43

%  

$

996,147

 

6,060

2.45

%  

$

950,227

 

4,892

2.06

%

Money market and savings deposits

 

1,909,125

 

16,529

 

3.48

%  

1,904,855

 

16,149

3.41

%  

1,737,303

 

11,785

2.72

%

Time deposits

 

528,985

 

4,960

 

3.77

%  

541,792

 

4,826

3.58

%  

504,350

 

2,877

2.29

%

Total interest-bearing deposits

 

3,421,543

 

27,439

 

3.23

%  

3,442,794

 

27,035

3.16

%  

3,191,880

 

19,554

2.46

%

Borrowings

 

12,684

 

148

 

4.69

%  

11,245

 

128

4.58

%  

24,845

 

339

5.47

%

Subordinated debt

 

42,129

 

884

 

8.44

%  

42,107

 

899

8.59

%  

42,044

 

626

5.97

%

Total interest-bearing liabilities

 

3,476,356

 

28,471

 

3.29

%  

3,496,146

 

28,062

3.23

%  

3,258,769

 

20,519

2.53

%

Noninterest-bearing deposits

 

888,693

 

       

872,840

 

 

951,381

 

 

Other liabilities

 

47,208

 

       

47,085

 

 

40,669

 

 

Total liabilities

 

4,412,257

 

       

4,416,071

 

 

4,250,819

 

 

Shareholders’ equity

 

466,371

 

       

461,148

 

 

444,283

 

 

Total liabilities and shareholders’ equity

 

$

4,878,628

           

$

4,877,219

 

 

$

4,695,102

 

 
                                                   

Net interest income, taxable equivalent

       

$

33,165

     

 

$

31,814

 

 

$

31,670

 

Interest rate spread

 

   

   

2.22

%  

 

2.13

%  

 

2.30

%  

Tax equivalent net interest margin

 

   

   

2.97

%  

 

2.85

%  

 

2.93

%  

                                                   

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

 

   

   

129.30

%  

 

128.63

%  

 

133.16

%  

Percentage of average equity to average assets

 

   

   

9.56

%  

 

9.46

%  

 

9.46

%  

1 Yields computed on tax-exempt loans on a tax equivalent basis include $257 thousand, $0 thousand, and $0 thousand of taxable equivalent income for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively. 

2 Yields computed on tax-exempt instruments on a tax equivalent basis include $94 thousand, $93 thousand, and $95 thousand of taxable equivalent income for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively. 

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

YIELD ANALYSIS

                                     
   

Six Months Ended

   

June 30, 2024

 

June 30, 2023

 
 

Average

   

Yield/

Average

   

Yield/

   

Balance

 

Interest

 

Cost

 

Balance

 

Interest

 

Cost

 

Assets:

 

 

 

 

 

Loans and leases, including fees1

 

$

3,481,187

 

$

101,130

 

5.84

%  

$

3,283,662

 

$

90,173

5.54

%  

Taxable securities

 

600,661

 

9,869

 

3.30

%  

747,037

 

7,986

2.16

%  

Tax-exempt securities2

 

63,925

 

892

 

2.81

%  

65,405

 

897

2.77

%  

Federal funds sold and other earning assets

 

350,186

 

9,620

 

5.52

%  

286,254

 

6,405

4.51

%  

Total interest-earning assets

 

4,495,959

 

121,511

 

5.44

%  

4,382,358

 

105,461

4.85

%  

Noninterest-earning assets

 

381,964

 

 

     

357,837

 

 

Total assets

 

$

4,877,923

             

$

4,740,195

 

 
                                     

Liabilities and Shareholders’ Equity:

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

989,790

 

12,010

 

2.44

%  

$

947,196

 

9,119

1.94

%  

Money market and savings deposits

 

1,906,990

 

32,677

 

3.45

%  

1,778,650

 

22,168

2.51

%  

Time deposits

 

535,389

 

9,787

 

3.68

%  

486,952

 

4,613

1.91

%  

Total interest-bearing deposits

 

3,432,169

 

54,474

 

3.19

%  

3,212,798

 

35,900

2.25

%  

Borrowings

 

11,964

 

276

 

4.64

%  

20,874

 

564

5.45

%  

Subordinated debt

 

42,118

 

1,782

 

8.51

%  

42,033

 

1,252

6.01

%  

Total interest-bearing liabilities

 

3,486,251

 

56,532

 

3.26

%  

3,275,705

 

37,716

2.32

%  

Noninterest-bearing deposits

 

880,767

 

   

   

983,348

 

   

Other liabilities

 

47,146

 

   

   

42,777

 

   

Total liabilities

 

4,414,164

 

   

   

4,301,830

 

   

Shareholders’ equity

 

463,759

 

   

   

438,365

 

   

Total liabilities and shareholders’ equity

 

$

4,877,923

             

$

4,740,195

 

   
                                     

Net interest income, taxable equivalent

       

$

64,979

       

 

$

67,745

   

Interest rate spread

 

   

   

2.17

%  

 

2.53

%  

Tax equivalent net interest margin

 

   

   

2.91

%  

 

3.12

%  

                                     

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

 

   

   

128.96

%  

 

133.78

%  

Percentage of average equity to average assets

 

   

   

9.51

%  

 

9.25

%  

1Yields computed on tax-exempt loans on a tax equivalent basis included $257 thousand and $0 thousand of taxable equivalent income for the six months ended June 30, 2024, and 2023, respectively.

2Yields computed on tax-exempt instruments on a tax equivalent basis included $187 thousand and $188 thousand of taxable equivalent income for the six months ended June 30, 2024, and 2023, respectively.

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

                                 
   

As of and for The Three Months Ended

 

Jun

Mar

Dec

Sep

Jun

   

2024

 

2024

 

2023

 

2023

 

2023

Composition of Loans and Leases:

 

           

 

 

 

Commercial real estate:

 

           

 

 

 

Owner occupied

 

$

829,085

 

$

804,557

 

$

798,416

 

$

776,402

 

$

769,978

 

Non-owner occupied

 

986,278

 

938,648

 

940,789

 

890,774

 

871,779

 

Commercial real estate, total

 

1,815,363

 

1,743,205

 

1,739,205

 

1,667,176

 

1,641,757

 

Commercial & industrial

 

701,460

 

667,903

 

645,918

 

617,115

 

594,427

 

Construction & land development

 

294,575

 

321,860

 

327,185

 

373,068

 

394,742

 

Consumer real estate

 

678,331

 

659,209

 

649,867

 

638,518

 

624,828

 

Leases

   

70,299

   

71,909

   

68,752

   

68,538

   

66,401

 

Consumer and other

 

14,130

 

13,469

 

13,535

 

14,584

 

15,635

 

Total loans and leases

 

$

3,574,158

 

$

3,477,555

 

$

3,444,462

 

$

3,378,999

 

$

3,337,790

 
                                 

Asset Quality and Additional Loan Data:

 

             

 

 

Nonperforming loans and leases

 

$

6,642

 

$

6,266

 

$

8,101

 

$

4,163

 

$

3,722

 

Other real estate owned

 

688

 

696

 

517

 

1,370

 

1,708

 

Other repossessed assets

   

2,645

   

2,033

   

1,117

   

348

   

282

 

Total nonperforming assets

 

$

9,975

 

$

8,995

 

$

9,735

 

$

5,881

 

$

5,712

 

Modified loans and leases1 not included in nonperforming loans and leases

 

$

4,241

 

$

4,413

 

$

4,245

 

$

2,376

 

$

657

 

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

 

0.05

%  

0.09

%  

0.04

%  

0.04

%  

(0.01)

%

Allowance for credit losses to loans and leases

 

0.97

%  

0.98

%  

1.02

%  

1.00

%  

0.98

%

Nonperforming loans and leases to total loans and leases, gross

 

0.19

%  

0.18

%  

0.24

%  

0.12

%  

0.11

%

Nonperforming assets to total assets

 

0.20

%  

0.18

%  

0.20

%  

0.12

%  

0.12

%

                                 

Capital Ratios:

 

             

 

 

Equity to Assets

 

9.66

%  

9.42

%  

9.52

%  

9.31

%  

9.37

%

Tangible common equity to tangible assets (Non-GAAP)2

 

7.66

%  

7.43

%  

7.47

%  

7.23

%  

7.25

%

                                 

SmartFinancial, Inc.3

 

             

 

 

Tier 1 leverage

 

8.32

%  

8.23

%  

8.27

%  

8.13

%  

8.24

%

Common equity Tier 1

 

10.06

%  

10.20

%  

10.14

%  

10.07

%  

10.12

%

Tier 1 capital

 

10.06

%  

10.20

%  

10.14

%  

10.07

%  

10.12

%

Total capital

 

11.68

%  

11.85

%  

11.78

%  

11.90

%  

11.94

%

                                 

SmartBank

 

 

Estimated4

             

 

 

Tier 1 leverage

 

9.11

%  

9.07

%  

9.18

%  

9.00

%  

9.18

%

Common equity Tier 1

 

11.02

%  

11.23

%  

11.26

%  

11.15

%  

11.27

%

Tier 1 capital

 

11.02

%  

11.23

%  

11.26

%  

11.15

%  

11.27

%

Total capital

 

11.79

%  

12.00

%  

12.02

%  

11.87

%  

11.97

%

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.

4 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

Six Months Ended

 
 

Jun

Mar

Dec

Sep

Jun

 

Jun

June

 
 

2024

 

2024

 

2023

 

2023

 

2023

   

2024

 

2023

 

Selected Performance Ratios (Annualized):

 

 

 

 

 

     

   

 

Return on average assets

 

0.66

%

 

0.77

%

 

0.52

%

 

0.17

%

 

0.75

%

   

0.72

%

 

0.87

%

Return on average shareholders’ equity

 

6.90

%

 

8.16

%

 

5.46

%

 

1.84

%

 

7.98

%

   

7.53

%

 

9.36

%

Return on average tangible common equity¹

 

8.94

%

 

10.63

%

 

7.18

%

 

2.43

%

 

10.57

%

   

9.77

%

 

12.46

%

Noninterest income / average assets

 

0.63

%

 

0.69

%

 

0.63

%

 

0.06

%

 

0.61

%

   

0.66

%

 

0.60

%

Noninterest expense / average assets

 

2.41

%

 

2.35

%

 

2.47

%

 

2.37

%

 

2.34

%

   

2.38

%

 

2.34

%

Efficiency ratio

 

72.25

%

 

71.20

%

 

75.95

%

 

89.96

%

 

70.82

%

   

71.73

%

 

67.32

%

                                             

Operating Selected Performance Ratios (Annualized):

 

   

   

   

   

     

   

 

Operating return on average assets1

 

0.64

%

 

0.69

%

 

0.57

%

 

0.60

%

 

0.75

%

   

0.67

%

 

0.87

%

Operating PPNR return on average assets1

 

0.90

%

 

0.84

%

 

0.86

%

 

0.84

%

 

0.96

%

   

0.87

%

 

1.13

%

Operating return on average shareholders’ equity1

 

6.72

%

 

7.29

%

 

6.07

%

 

6.41

%

 

7.98

%

   

7.00

%

 

9.36

%

Operating return on average tangible common equity1

 

8.70

%

 

9.49

%

 

7.98

%

 

8.46

%

 

10.57

%

   

9.09

%

 

12.46

%

Operating efficiency ratio1

 

72.13

%

 

73.50

%

 

73.41

%

 

73.60

%

 

70.64

%

   

72.81

%

 

67.16

%

Operating noninterest income / average assets1

 

0.60

%

 

0.58

%

 

0.63

%

 

0.62

%

 

0.61

%

   

0.59

%

 

0.60

%

Operating noninterest expense / average assets1

 

2.41

%

 

2.35

%

 

2.39

%

 

2.36

%

 

2.34

%

   

2.38

%

 

2.34

%

                                             

Selected Interest Rates and Yields:

 

   

   

   

   

     

   

 

Yield on loans and leases, excluding loan fees, FTE

 

5.80

%

 

5.71

%

 

5.61

%

 

5.52

%

 

5.39

%

   

5.76

%

 

5.30

%

Yield on loans and leases, FTE

 

5.87

%

 

5.82

%

 

5.68

%

 

5.61

%

 

5.51

%

   

5.84

%

 

5.54

%

Yield on earning assets, FTE

 

5.52

%

 

5.36

%

 

5.22

%

 

4.99

%

 

4.82

%

   

5.44

%

 

4.85

%

Cost of interest-bearing deposits

 

3.23

%

 

3.16

%

 

3.00

%

 

2.84

%

 

2.46

%

   

3.19

%

 

2.25

%

Cost of total deposits

 

2.56

%

 

2.52

%

 

2.35

%

 

2.20

%

 

1.89

%

   

2.54

%

 

1.73

%

Cost of interest-bearing liabilities

 

3.29

%

 

3.23

%

 

3.07

%

 

2.89

%

 

2.53

%

   

3.26

%

 

2.32

%

Net interest margin, FTE

 

2.97

%

 

2.85

%

 

2.86

%

 

2.81

%

 

2.93

%

   

2.91

%

 

3.12

%

                                             

Per Common Share:

 

 

 

 

 

     

   

 

Net income, basic

$

0.48

 

$

0.56

 

$

0.37

 

$

0.12

 

$

0.53

   

$

1.03

 

$

1.21

 

Net income, diluted

0.48

 

0.55

 

0.37

 

0.12

 

0.52

   

1.03

 

1.20

 

Operating earnings, basic¹

0.47

 

0.50

 

0.41

 

0.43

 

0.53

   

0.96

 

1.21

 

Operating earnings, diluted¹

0.46

 

0.49

 

0.41

 

0.43

 

0.52

   

0.96

 

1.20

 

Book value

27.91

 

27.37

 

27.07

 

26.28

 

26.16

   

27.91

 

26.16

 

Tangible book value¹

21.66

 

21.12

 

20.76

 

19.94

 

19.78

   

21.66

 

19.78

 

Common shares outstanding

16,925,902

 

17,056,704

 

16,988,879

 

16,994,543

 

17,004,092

   

16,925,902

 

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

 

Six Months Ended

 
 

Jun

Mar

Dec

Sep

Jun

Jun

June

 
   

2024

 

2024

 

2023

 

2023

 

2023

   

2024

 

2023

 

Operating Earnings:

 

 

 

 

 

               

Net income (GAAP)

 

$

8,003

 

$

9,358

 

$

6,190

 

$

2,067

 

$

8,836

   

$

17,360

 

$

20,336

 

Noninterest income:

 

 

 

 

 

   

 

 

Securities (gains) losses, net

 

 

 

 

6,801

 

   

 

 

Gain on sale of former branch building

 

(283)

 

(1,346)

 

 

 

   

(1,629)

 

 

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

 

73

 

348

 

(239)

 

(1,785)

 

   

421

 

 

Operating earnings (Non-GAAP)

 

$

7,793

 

$

8,360

 

$

6,876

 

$

7,193

 

$

8,836

   

$

16,152

 

$

20,336

 

Operating earnings per common share (Non-GAAP):

 

 

 

 

 

   

 

 

Basic

 

$

0.47

 

$

0.50

 

$

0.41

 

$

0.43

 

$

0.53

   

$

0.96

 

$

1.21

 

Diluted

 

0.46

 

0.49

 

0.41

 

0.43

 

0.52

   

0.96

 

1.20

 
                                               

Operating Noninterest Income:

 

 

 

 

 

   

 

 

Noninterest income (GAAP)

 

$

7,604

 

$

8,380

 

$

7,579

 

$

691

 

$

7,130

   

$

15,984

 

$

14,055

 

Securities (gains) losses, net

 

 

 

 

6,801

 

   

 

 

Gain on sale of former branch building

 

(283)

 

(1,346)

 

 

 

   

(1,629)

 

 

Operating noninterest income (Non-GAAP)

 

$

7,321

 

$

7,034

 

$

7,579

 

$

7,492

 

$

7,130

   

$

14,355

 

$

14,055

 

Operating noninterest income (Non-GAAP)/average assets1

 

0.60

%

0.58

%  

0.63

%  

0.62

%  

0.61

%

 

0.59

%

0.60

%

                                               

Operating Noninterest Expense:

 

 

 

 

 

   

 

 

Noninterest expense (GAAP)

 

$

29,201

 

$

28,553

 

$

29,695

 

$

28,516

 

$

27,410

   

$

57,754

 

$

54,939

 

Donation of a former branch location 

 

 

 

(250)

 

 

   

 

 

Accruals for pending litigation

   

 

 

(675)

 

 

   

 

 

Merger related and restructuring expenses

 

 

 

 

(110)

 

   

 

 

Operating noninterest expense (Non-GAAP)

 

$

29,201

 

$

28,553

 

$

28,770

 

$

28,406

 

$

27,410

   

$

57,754

 

$

54,939

 

Operating noninterest expense (Non-GAAP)/average assets2

 

2.41

%

2.35

%  

2.39

%  

2.36

%  

2.34

%

 

2.38

%

2.34

%

                                               

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

                                             

Net interest income (GAAP)

 

$

32,814

 

$

31,721

 

$

31,517

 

$

31,006

 

$

31,575

   

$

64,535

 

$

67,557

 

Operating noninterest income (Non-GAAP)

   

7,321

   

7,034

   

7,579

   

7,492

   

7,130

     

14,355

   

14,055

 

Operating noninterest expense (Non-GAAP)

   

(29,201)

   

(28,553)

   

(28,770)

   

(28,406)

   

(27,410)

     

(57,754)

   

(54,939)

 

Operating PPNR earnings (Non-GAAP)

 

$

10,934

 

$

10,202

 

$

10,326

 

$

10,092

 

$

11,295

   

$

21,136

 

$

26,673

 
                                               

Non-GAAP Return Ratios:

 

 

 

 

 

   

 

 

Operating return on average assets (Non-GAAP)3

 

0.64

%

0.69

%

0.57

%

0.60

%

0.75

%

 

0.67

%

0.87

%

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

   

0.90

%

 

0.84

%

 

0.86

%

 

0.84

%

 

0.96

%

   

0.87

%

 

1.13

%

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

 

8.94

%

10.62

%

7.18

%

2.43

%

10.57

%

 

9.77

%

12.46

%

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

 

6.72

%

7.29

%

6.07

%

6.41

%

7.98

%

 

7.00

%

9.36

%

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

 

8.70

%

9.49

%

7.98

%

8.46

%

10.57

%

 

9.09

%

12.46

%

                                               

Operating Efficiency Ratio:

 

 

 

 

 

   

 

 

Efficiency ratio (GAAP)

 

72.25

%

71.20

%

75.95

%

89.96

%

70.82

%

 

71.73

%

67.32

%

Adjustment for taxable equivalent yields

 

(0.63)

%

(0.17)

%

(0.18)

%

(0.27)

%

(0.18)

%

 

(0.40)

%

(0.16)

%

Adjustment for securities gains (losses)

 

%

%

%

(15.89)

%

%

 

%

%

Adjustment for sale of branch location

   

0.51

%

 

2.46

%

 

%

 

%

 

%

   

1.48

%

 

%

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)

 

72.13

%

73.50

%

73.41

%

73.60

%

70.64

%

 

72.81

%

67.16

%

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

 
 

Jun

Mar

Dec

Sep

Jun

 
   

2024

 

2024

 

2023

 

2023

 

2023

 

Tangible Common Equity:

 

 

 

 

 

 

Shareholders’ equity (GAAP)

 

$

472,465

 

$

466,796

 

$

459,886

 

$

446,652

 

$

444,847

 

Less goodwill and other intangible assets

 

105,929

 

106,537

 

107,148

 

107,792

 

108,439

 

Tangible common equity (Non-GAAP)

 

$

366,536

 

$

360,259

 

$

352,738

 

$

338,860

 

$

336,408

 
                                 

Average Tangible Common Equity:

 

 

 

 

 

 

Average shareholders’ equity (GAAP)

 

$

466,371

 

$

461,148

 

$

449,526

 

$

445,432

 

$

444,283

 

Less average goodwill and other intangible assets

 

106,301

 

106,920

 

107,551

 

108,194

 

108,851

 

Average tangible common equity (Non-GAAP)

 

$

360,070

 

$

354,228

 

$

341,975

 

$

337,238

 

$

335,432

 
                                 

Tangible Book Value per Common Share:

                               

Book value per common share (GAAP)

 

$

27.91

 

$

27.37

 

$

27.07

 

$

26.28

 

$

26.16

 

Adjustment due to goodwill and other intangible assets

   

(6.25)

   

(6.25)

   

(6.31)

   

(6.34)

   

(6.38)

 

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

 

$

21.66

 

$

21.12

 

$

20.76

 

$

19.94

 

$

19.78

 
                                 

Tangible Common Equity to Tangible Assets:

                               

Total Assets (GAAP)

 

$

4,891,009

 

$

4,954,690

 

$

4,829,387

 

$

4,797,171

 

$

4,745,800

 

Less goodwill and other intangibles

   

105,929

   

106,537

   

107,148

   

107,792

   

108,439

 

Tangible Assets (Non-GAAP)

 

$

4,785,080

 

$

4,848,153

 

$

4,722,239

 

$

4,689,379

 

$

4,637,361

 

Tangible common equity to tangible assets (Non-GAAP)

   

7.66%

   

7.43%

   

7.47%

   

7.23%

   

7.25%

 

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