KNOXVILLE, Tenn., Oct. 19, 2023 (GLOBE NEWSWIRE) — SmartFinancial, Inc. (“SmartFinancial” or the “Company”; NASDAQ: SMBK), today announced net income of $9.6 million, or $0.61 per diluted common share, for the third quarter of 2023, compared to net income of $6.4 million, or $0.42 per diluted common share, for the third quarter of 2020, and compared to net income of $8.8 million, or $0.58 per diluted common share, for the second quarter of 2023. Operating earnings (Non-GAAP), which excludes securities gains, merger related and restructuring expenses and non-operating items, totaled $9.9 million, or $0.63 per diluted common share, in the third quarter of 2023, compared to $6.6 million, or $0.44 per diluted common share, in the third quarter of 2020, and compared to $9.1 million, or $0.60 per diluted common share, in the second quarter of 2023.
Highlights for the Third Quarter of 2023
- Net organic loan growth of over $52 million, an 8.6% annualized quarter-over-quarter increase
- Operating earnings (non-GAAP) of $0.63 per diluted share, a 43.2% increase from the prior-year-quarter
- Tangible book value per share (Non-GAAP) of $19.03, a 7.3% annualized quarter-over-quarter increase
- Completed the acquisition of Sevier County Bancshares (“SCB”)
- Hired seasoned commercial banking team members in Dothan, Montgomery and Birmingham, Alabama and Tallahassee, Florida
Billy Carroll, President & CEO, stated: “Our company is continuing to perform at a very high level, and we are extremely pleased with our results and accomplishments this quarter. In addition to our solid financial performance, we closed our SCB transaction and added several outstanding, seasoned bankers to our staff. The momentum around our team is strong and I am very excited with the direction of our company.”
SmartFinancial’s Chairman, Miller Welborn, concluded: “The execution of our Strategic Plan is really coming together. All of our operating metrics are on target, and we are excited about our future.”
Net Interest Income and Net Interest Margin
Net interest income was $30.4 million for the third quarter of 2023, compared to $26.9 million for the second quarter of 2023. Average earning assets totaled $3.61 billion, an increase of $314.9 million. The growth was primarily driven by an increase in average cash and cash equivalents of $271.6 million and average loans and leases of $24.2 million. Average interest-bearing liabilities increased $212.2 million, related to continued core deposit growth and the acquisition of SCB.
The tax equivalent net interest margin was 3.35% for the third quarter of 2023, compared to 3.29% for the second quarter of 2023. The tax equivalent net interest margin was impacted by a 2 basis point increase in the average yield on interest-earning assets and offset by a 5 basis point decline in the rate on interest-bearing liabilities over the prior quarter. The increase in yield on interest-earning assets was primarily driven by an increase of $1.7 million of loan discount accretion and Payroll Protection Program (“PPP”) fee accretion during the third quarter of 2023 when compared to the second quarter of 2023, offset by lower yielding excess liquidity.
The yield on interest-bearing liabilities decreased to 0.44% for the third quarter of 2023 when compared to 0.49% for the second quarter of 2023. The cost of average interest-bearing deposits was 0.34% for the third quarter of 2023 compared to 0.39% for the second quarter of 2023, a decrease of 5 basis points. The lower cost of average deposits was attributable to the maturing and repricing of time deposits, which decreased 16 basis points during the period. The cost of total deposits for the third quarter of 2023 was 0.25% compared to 0.29% in the second quarter of 2023.
The following table presents selected interest rates and yields for the periods indicated:
| Three Months Ended | ||||||||
| Sep | Jun | Increase | ||||||
| Selected Interest Rates and Yields | 2021 | 2021 | (Decrease) | |||||
| Yield on loans and leases | 4.95 | % | 4.52 | % | 0.43 | % | ||
| Yield on earning assets, FTE | 3.67 | % | 3.65 | % | 0.02 | % | ||
| Cost of interest-bearing deposits | 0.34 | % | 0.39 | % | (0.05 | ) | % | |
| Cost of total deposits | 0.25 | % | 0.29 | % | (0.04 | ) | % | |
| Cost of interest-bearing liabilities | 0.44 | % | 0.49 | % | (0.05 | ) | % | |
| Net interest margin, FTE | 3.35 | % | 3.29 | % | 0.06 | % | ||
Provision for Loan and Lease Losses and Credit Quality
At September 30, 2023, the allowance for loan and lease losses was $19.3 million. The allowance for loan and lease losses to total loans and leases was 0.73% as of September 30, 2023, compared to 0.74% as of June 30, 2023. For the Company’s originated loans and leases, the allowance for loan and lease losses to originated loans and leases, less PPP loans, was 0.76% as of September 30, 2023, compared to 0.86% as of June 30, 2023. The remaining discounts on the acquired loan and lease portfolio totaled $13.0 million, or 2.48% of acquired loans and leases as of September 30, 2023.
The following table presents detailed information related to the provision for loan and lease losses for the periods indicated (dollars in thousands):
| Three Months Ended | ||||||||||||||
| Sep | Jun | |||||||||||||
| Provision for Loan and Lease Losses Rollforward | 2021 | 2021 | Change | |||||||||||
| Beginning balance | $ | 18,310 | $ | 18,370 | $ | (60 | ) | |||||||
| Charge-offs | (239 | ) | (153 | ) | (86 | ) | ||||||||
| Recoveries | 75 | 98 | (23 | ) | ||||||||||
| Net charge-offs | (164 | ) | (55 | ) | (109 | ) | ||||||||
| Provision | 1,149 | (5 | ) | (1,154 | ) | |||||||||
| Ending balance | $ | 19,295 | $ | 18,310 | $ | 985 | ||||||||
| Allowance for loan losses to total loans and leases, gross | 0.73 | % | 0.74 | % | (0.01 | ) | % | |||||||
The Company is not required to implement the provisions of the Current Expected Credit Losses (“CECL”) accounting standard until January 1, 2023 and is continuing to account for the allowance for loan and lease losses under the incurred loss model.
Nonperforming loans and leases as a percentage of total loans and leases was 0.13% as of September 30, 2023, a decrease of 2 basis points from the 0.15% 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 0.14% as of September 30, 2023, as compared to 0.18% as of 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 | 2021 | 2021 | (Decrease) | |||||||||
| Nonaccrual loans and leases | $ | 3,567 | $ | 3,694 | $ | (127 | ) | |||||
| Loans and leases past due 90 days or more and still accruing | – | 64 | (64 | ) | ||||||||
| Total nonperforming loans and leases | 3,567 | 3,758 | (191 | ) | ||||||||
| Other real estate owned | 2,415 | 2,499 | (84 | ) | ||||||||
| Other repossessed assets | 77 | 199 | (122 | ) | ||||||||
| Total nonperforming assets | $ | 6,059 | $ | 6,456 | $ | (397 | ) | |||||
| Nonperforming loans and leases to total loans and leases, gross | 0.13 | % | 0.15 | % | (0.02 | ) | % | |||||
| Nonperforming assets to total assets | 0.14 | % | 0.18 | % | (0.04 | ) | % | |||||
Noninterest Income
Noninterest income increased $1.2 million to $6.3 million for the third quarter of 2023 compared to $5.1 million for the second quarter of 2023. During the third quarter of 2023, the primary components of the changes in noninterest income were as follows:
- Increase in service charges on deposit accounts, related to the SCB acquisition, deposit growth and transaction volume;
- Increase in insurance commissions due to improved activity;
- Increase in interchange and debit card transaction fees, related to increased volume, deposit growth and the SCB acquisition; and
- Increase in other, includes $469 thousand in SWAP fee income from newly created capital markets program and $159 thousand in income from the Company’s bank owned life insurance program.
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 | 2021 | 2021 | (Decrease) | |||||||
| Service charges on deposit accounts | $ | 1,220 | $ | 1,048 | $ | 172 | ||||
| Gain (loss) on sale of securities, net | 45 | – | 45 | |||||||
| Mortgage banking income | 994 | 1,105 | (111 | ) | ||||||
| Investment services | 448 | 567 | (119 | ) | ||||||
| Insurance commissions | 745 | 557 | 188 | |||||||
| Interchange and debit card transaction fees | 1,078 | 922 | 156 | |||||||
| Other | 1,779 | 944 | 835 | |||||||
| Total noninterest income | $ | 6,309 | $ | 5,143 | $ | 1,166 | ||||
Noninterest Expense
Noninterest expense increased $2.5 million to $23.3 million for the third quarter of 2023 compared to $20.8 million for the second quarter of 2023. During the third quarter of 2023, the primary components of the changes in noninterest expense were as follows:
- Increase in salaries and employee benefits, primarily due to the hiring of additional talent from both the SCB acquisition and the Auburn, Dothan, Montgomery and Birmingham, Alabama and Tallahassee, Florida teams;
- Increase in occupancy and equipment expense from the SCB acquisition and expansion in Alabama;
- Increase in FDIC insurance from continued asset growth; and
- Increase in data processing and technology, primarily from continued infrastructure build.
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 | 2021 | 2021 | (Decrease) | |||||||
| Salaries and employee benefits | $ | 13,594 | $ | 12,203 | $ | 1,391 | ||||
| Occupancy and equipment | 2,536 | 2,294 | 242 | |||||||
| FDIC insurance | 525 | 371 | 154 | |||||||
| Other real estate and loan related expenses | 407 | 506 | (99 | ) | ||||||
| Advertising and marketing | 235 | 230 | 5 | |||||||
| Data processing and technology | 1,753 | 1,509 | 244 | |||||||
| Professional services | 810 | 849 | (39 | ) | ||||||
| Amortization of intangibles | 711 | 441 | 270 | |||||||
| Merger related and restructuring expenses | 464 | 372 | 92 | |||||||
| Other | 2,274 | 2,022 | 252 | |||||||
| Total noninterest expense | $ | 23,309 | $ | 20,797 | $ | 2,512 | ||||
Income Tax Expense
Income tax expense was $2.6 million for the third quarter of 2023, an increase of $163 thousand, compared to $2.5 million for the second quarter of 2023.
The effective tax rate was 22.0% for the third and second quarters of 2023, respectively.
Balance Sheet Trends
Total assets at September 30, 2023 were $4.38 billion compared with $3.30 billion at December 31, 2020. The increase of $1.08 billion is primarily attributable to increases in cash and cash equivalents of $609.4 million, securities available-for-sale of $123.7 million, loans and leases of $270.4 million, bank owned life insurance of $47.9 million and goodwill and intangibles of $14.5 related to the SCB acquisition.
Total liabilities increased to $3.96 billion at September 30, 2023 from $2.95 billion at December 31, 2020. The increase of $1.01 billion million was primarily from organic deposit growth of $561.4 million and deposits of $432.7 million from the SCB acquisition.
Shareholders’ equity at September 30, 2023 totaled $424.7 million, an increase of $67.6 million, from December 31, 2020. The increase in shareholders’ equity was primarily from the issuance of $42.3 million of common stock for the acquisition of SCB and net income of $28.1 million for the nine months ended September 30, 2023, which was offset by repurchase of the Company’s common stock of $1.2 million and $2.7 million of dividends paid. Tangible book value per share (Non-GAAP) was $19.03 at September 30, 2023, compared to $17.92 at December 31, 2020. Tangible common equity (Non-GAAP) as a percentage of tangible assets (Non-GAAP) was 7.47% at September 30, 2023, compared with 8.41% at December 31, 2020.
The following table presents selected balance sheet information for the periods indicated (dollars in thousands):
| Sep | Dec | Increase | ||||||||
| Selected Balance Sheet Information | 2021 | 2020 | (Decrease) | |||||||
| Total assets | $ | 4,384,031 | $ | 3,304,949 | $ | 1,079,082 | ||||
| Total liabilities | 3,959,311 | 2,947,781 | 1,011,530 | |||||||
| Total equity | 424,720 | 357,168 | 67,552 | |||||||
| Securities available-for-sale, at fair value | 339,343 | 215,634 | 123,709 | |||||||
| Loans and leases | 2,652,663 | 2,382,243 | 270,420 | |||||||
| Deposits | 3,799,272 | 2,805,215 | 994,057 | |||||||
| Borrowings | 88,748 | 81,199 | 7,549 | |||||||
Conference Call Information
SmartFinancial issued this earnings release for the third quarter of 2023 on Tuesday, October 19, 2023, and will host a conference call on Wednesday, October 20, 2023, at 10:00 a.m. ET. To access this interactive teleconference, dial (844) 200-6205 or (646) 904-5544 and enter the confirmation number, 289025. A replay of the conference call will be available through December 22, 2023, by dialing (866) 813-9403 or (929) 458-6194 and entering the confirmation number, 781192. Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 am 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 the Florida Panhandle. 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 [email protected] | |
| Ron Gorczynski | |
| Executive Vice President, Chief Financial Officer | |
| (865) 437-5724 [email protected] | |
| Media Contact | |
| Kelley Fowler | |
| Senior Vice President, Public Relations & Marketing | |
| (865) 868-0611 [email protected] |
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-tax pre-provision 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-tax pre-provision 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, proceeds related to the termination of an Alabama Department of Economic and Community Affairs (“ADECA”) loan program, merger related and restructuring expenses. Operating return on average assets is the annualized operating earnings divided by average assets. Operating pre-tax pre-provision return on average assets is the annualized operating pre-tax pre-provision income earnings by average assets. Operating return on average shareholders’ equity is the annualized operating earnings divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity. Operating return on average tangible common equity is the annualized operating earnings 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, proceeds related to the termination of the ADECA loan program. Operating pre-tax pre-provision earnings is net interest income plus operating noninterest income less operating noninterest expense. 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 and average tangible common equity excludes goodwill and other intangible assets from shareholders’ equity and average shareholders’ equity, respectively. Tangible book value is tangible common equity divided by common shares outstanding. Tangible assets 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, including statements regarding the effects of the COVID-19 pandemic on the Company’s business and financial results and conditions, 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) risks related to the acquisition of Sevier County Bancshares, Inc. (“SCB”); (7) the risk that the anticipated benefits from the acquisition of SCB may not be realized in the time frame anticipated; (8) changes in management’s plans for the future; (9) prevailing, or changes in, economic or political conditions, particularly in our market areas; (10) credit risk associated with our lending activities; (11) changes in interest rates, loan demand, real estate values, or competition; (12) changes in accounting principles, policies, or guidelines; (13) changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; (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; (15) the impact of the COVID-19 pandemic on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (16) potential increases in the provision for loan losses resulting from the COVID-19 pandemic; and (17) 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 | ||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||
| Assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 1,091,160 | $ | 673,515 | $ | 556,701 | $ | 481,719 | $ | 541,815 | ||||||||||
| Securities available-for-sale, at fair value | 339,343 | 250,817 | 250,937 | 215,634 | 214,634 | |||||||||||||||
| Other investments | 14,972 | 14,584 | 14,728 | 14,794 | 14,829 | |||||||||||||||
| Loans held for sale | 3,418 | 4,334 | 7,870 | 11,721 | 11,292 | |||||||||||||||
| Loans and leases | 2,652,663 | 2,468,318 | 2,487,129 | 2,382,243 | 2,404,057 | |||||||||||||||
| Less: Allowance for loan and lease losses | (19,295 | ) | (18,310 | ) | (18,370 | ) | (18,346 | ) | (18,817 | ) | ||||||||||
| Loans and leases, net | 2,633,368 | 2,450,008 | 2,468,759 | 2,363,897 | 2,385,240 | |||||||||||||||
| Premises and equipment, net | 85,346 | 72,314 | 72,697 | 72,682 | 73,934 | |||||||||||||||
| Other real estate owned | 2,415 | 2,499 | 3,946 | 4,619 | 3,932 | |||||||||||||||
| Goodwill and other intangibles, net | 104,930 | 90,966 | 86,350 | 86,471 | 86,710 | |||||||||||||||
| Bank owned life insurance | 79,145 | 72,013 | 71,586 | 31,215 | 31,034 | |||||||||||||||
| Other assets | 29,934 | 23,306 | 23,629 | 22,197 | 24,168 | |||||||||||||||
| Total assets | $ | 4,384,031 | $ | 3,654,356 | $ | 3,557,203 | $ | 3,304,949 | $ | 3,387,588 | ||||||||||
| Liabilities: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 977,180 | $ | 807,560 | $ | 777,968 | $ | 685,957 | $ | 669,733 | ||||||||||
| Interest-bearing demand | 847,007 | 702,470 | 683,887 | 649,129 | 534,128 | |||||||||||||||
| Money market and savings | 1,389,393 | 1,140,029 | 1,073,941 | 919,631 | 871,098 | |||||||||||||||
| Time deposits | 585,692 | 489,413 | 512,417 | 550,498 | 577,064 | |||||||||||||||
| Total deposits | 3,799,272 | 3,139,472 | 3,048,213 | 2,805,215 | 2,652,023 | |||||||||||||||
| Borrowings | 88,748 | 78,834 | 82,642 | 81,199 | 319,391 | |||||||||||||||
| Subordinated debt | 41,909 | 39,388 | 39,367 | 39,346 | 39,325 | |||||||||||||||
| Other liabilities | 29,382 | 23,269 | 22,923 | 22,021 | 27,060 | |||||||||||||||
| Total liabilities | 3,959,311 | 3,280,963 | 3,193,145 | 2,947,781 | 3,037,799 | |||||||||||||||
| Shareholders’ Equity: | ||||||||||||||||||||
| Common stock | 16,801 | 15,110 | 15,105 | 15,107 | 15,233 | |||||||||||||||
| Additional paid-in capital | 292,760 | 252,039 | 251,836 | 252,693 | 254,626 | |||||||||||||||
| Retained earnings | 112,600 | 103,906 | 96,034 | 87,185 | 78,918 | |||||||||||||||
| Accumulated other comprehensive income | 2,559 | 2,338 | 1,083 | 2,183 | 1,012 | |||||||||||||||
| Total shareholders’ equity | 424,720 | 373,393 | 364,058 | 357,168 | 349,789 | |||||||||||||||
| Total liabilities & shareholders’ equity | $ | 4,384,031 | $ | 3,654,356 | $ | 3,557,203 | $ | 3,304,949 | $ | 3,387,588 | ||||||||||
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 | ||||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | ||||||||||||||||
| Interest income: | ||||||||||||||||||||||
| Loans and leases, including fees | $ | 31,674 | $ | 28,323 | $ | 28,018 | $ | 28,594 | $ | 28,621 | $ | 88,015 | $ | 83,718 | ||||||||
| Securities available-for-sale: | ||||||||||||||||||||||
| Taxable | 832 | 916 | 724 | 609 | 546 | 2,472 | 1,813 | |||||||||||||||
| Tax-exempt | 331 | 304 | 259 | 306 | 364 | 894 | 1,064 | |||||||||||||||
| Federal funds sold and other earning assets | 474 | 309 | 291 | 303 | 327 | 1,074 | 1,206 | |||||||||||||||
| Total interest income | 33,311 | 29,852 | 29,292 | 29,812 | 29,858 | 92,455 | 87,801 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||||
| Deposits | 2,153 | 2,248 | 2,331 | 2,580 | 2,897 | 6,733 | 11,016 | |||||||||||||||
| Borrowings | 121 | 123 | 117 | 142 | 334 | 360 | 674 | |||||||||||||||
| Subordinated debt | 655 | 584 | 584 | 584 | 584 | 1,823 | 1,751 | |||||||||||||||
| Total interest expense | 2,929 | 2,955 | 3,032 | 3,306 | 3,815 | 8,916 | 13,441 | |||||||||||||||
| Net interest income | 30,382 | 26,897 | 26,260 | 26,506 | 26,043 | 83,539 | 74,360 | |||||||||||||||
| Provision for loan and lease losses | 1,149 | (5 | ) | 67 | — | 2,634 | 1,211 | 8,683 | ||||||||||||||
| Net interest income after provision for loan and lease losses | 29,233 | 26,902 | 26,193 | 26,506 | 23,409 | 82,328 | 65,677 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||||
| Service charges on deposit accounts | 1,220 | 1,048 | 1,009 | 1,032 | 892 | 3,278 | 2,370 | |||||||||||||||
| Gain (loss) on sale of securities, net | 45 | — | — | — | (9 | ) | 45 | 6 | ||||||||||||||
| Mortgage banking | 994 | 1,105 | 1,139 | 1,331 | 1,029 | 3,238 | 2,544 | |||||||||||||||
| Investment services | 448 | 567 | 531 | 407 | 359 | 1,546 | 1,159 | |||||||||||||||
| Insurance commissions | 745 | 557 | 1,466 | 548 | 560 | 2,768 | 1,302 | |||||||||||||||
| Interchange and debit card transaction fees | 1,078 | 922 | 839 | 760 | 868 | 2,839 | 1,652 | |||||||||||||||
| Other | 1,779 | 944 | 707 | 898 | 422 | 3,429 | 1,417 | |||||||||||||||
| Total noninterest income | 6,309 | 5,143 | 5,691 | 4,976 | 4,121 | 17,143 | 10,450 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||
| Salaries and employee benefits | 13,594 | 12,203 | 10,869 | 11,516 | 11,032 | 36,666 | 31,395 | |||||||||||||||
| Occupancy and equipment | 2,536 | 2,294 | 2,341 | 2,256 | 2,186 | 7,170 | 6,093 | |||||||||||||||
| FDIC insurance | 525 | 371 | 371 | 297 | 534 | 1,266 | 894 | |||||||||||||||
| Other real estate and loan related expense | 407 | 506 | 602 | 516 | 643 | 1,514 | 1,535 | |||||||||||||||
| Advertising and marketing | 235 | 230 | 190 | 181 | 253 | 654 | 653 | |||||||||||||||
| Data processing and technology | 1,753 | 1,509 | 1,379 | 1,182 | 1,131 | 4,642 | 3,293 | |||||||||||||||
| Professional services | 810 | 849 | 641 | 786 | 594 | 2,300 | 2,172 | |||||||||||||||
| Amortization of intangibles | 711 | 441 | 444 | 571 | 402 | 1,597 | 1,169 | |||||||||||||||
| Merger related and restructuring expenses | 464 | 372 | 103 | 702 | 290 | 939 | 3,863 | |||||||||||||||
| Other | 2,274 | 2,022 | 2,524 | 1,946 | 2,102 | 6,822 | 5,699 | |||||||||||||||
| Total noninterest expense | 23,309 | 20,797 | 19,464 | 19,953 | 19,167 | 63,570 | 56,766 | |||||||||||||||
| Income before income taxes | 12,233 | 11,248 | 12,420 | 11,529 | 8,363 | 35,901 | 19,361 | |||||||||||||||
| Income tax expense | 2,633 | 2,470 | 2,664 | 2,499 | 1,968 | 7,767 | 4,059 | |||||||||||||||
| Net income | $ | 9,600 | $ | 8,778 | $ | 9,756 | $ | 9,030 | $ | 6,395 | $ | 28,134 | $ | 15,302 | ||||||||
| Earnings per common share: | ||||||||||||||||||||||
| Basic | $ | 0.62 | $ | 0.59 | $ | 0.65 | $ | 0.60 | $ | 0.42 | $ | 1.85 | $ | 1.03 | ||||||||
| Diluted | $ | 0.61 | $ | 0.58 | $ | 0.65 | $ | 0.59 | $ | 0.42 | $ | 1.84 | $ | 1.02 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||
| Basic | 15,557,528 | 15,003,657 | 15,011,573 | 15,109,298 | 15,160,579 | 15,192,919 | 14,903,757 | |||||||||||||||
| Diluted | 15,691,126 | 15,126,184 | 15,111,947 | 15,182,796 | 15,210,611 | 15,312,755 | 14,965,455 | |||||||||||||||
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, 2020 | |||||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||||||
| Balance | Interest1 | Cost1 | Balance | Interest1 | Cost1 | Balance | Interest1 | Cost1 | |||||||||||||||||
| Assets: | |||||||||||||||||||||||||
| Loans and leases, including fees2 | $ | 2,532,604 | $ | 31,623 | 4.95 | % | $ | 2,508,388 | $ | 28,256 | 4.52 | % | $ | 2,410,173 | $ | 28,508 | 4.71 | % | |||||||
| Loans held for sale | 3,987 | 51 | 5.09 | % | 5,315 | 67 | 5.03 | % | 8,048 | 113 | 5.57 | % | |||||||||||||
| Taxable securities | 187,032 | 832 | 1.77 | % | 164,935 | 916 | 2.23 | % | 132,642 | 546 | 1.64 | % | |||||||||||||
| Tax-exempt securities | 87,621 | 477 | 2.16 | % | 89,296 | 453 | 2.04 | % | 88,129 | 515 | 2.32 | % | |||||||||||||
| Federal funds sold and other earning assets | 802,712 | 474 | 0.23 | % | 531,125 | 309 | 0.23 | % | 438,785 | 327 | 0.30 | % | |||||||||||||
| Total interest-earning assets | 3,613,956 | 33,457 | 3.67 | % | 3,299,059 | 30,001 | 3.65 | % | 3,077,777 | 30,009 | 3.88 | % | |||||||||||||
| Noninterest-earning assets | 323,067 | 286,211 | 262,764 | ||||||||||||||||||||||
| Total assets | $ | 3,937,023 | $ | 3,585,270 | $ | 3,340,541 | |||||||||||||||||||
| Liabilities and Stockholders’ Equity: | |||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 763,613 | 414 | 0.21 | % | $ | 688,756 | 304 | 0.18 | % | $ | 509,999 | 199 | 0.16 | % | ||||||||||
| Money market and savings deposits | 1,233,533 | 854 | 0.27 | % | 1,117,290 | 905 | 0.32 | % | 833,022 | 704 | 0.34 | % | |||||||||||||
| Time deposits | 524,327 | 885 | 0.67 | % | 502,755 | 1,039 | 0.83 | % | 615,714 | 1,994 | 1.29 | % | |||||||||||||
| Total interest-bearing deposits | 2,521,473 | 2,153 | 0.34 | % | 2,308,801 | 2,248 | 0.39 | % | 1,958,735 | 2,897 | 0.59 | % | |||||||||||||
| Borrowings3 | 80,188 | 121 | 0.60 | % | 81,525 | 123 | 0.61 | % | 319,265 | 334 | 0.42 | % | |||||||||||||
| Subordinated debt | 40,211 | 654 | 6.47 | % | 39,375 | 584 | 5.95 | % | 39,311 | 584 | 5.91 | % | |||||||||||||
| Total interest-bearing liabilities | 2,641,872 | 2,928 | 0.44 | % | 2,429,701 | 2,955 | 0.49 | % | 2,317,311 | 3,815 | 0.65 | % | |||||||||||||
| Noninterest-bearing deposits | 877,831 | 768,399 | 649,489 | ||||||||||||||||||||||
| Other liabilities | 24,522 | 17,845 | 25,834 | ||||||||||||||||||||||
| Total liabilities | 3,544,225 | 3,215,945 | 2,992,634 | ||||||||||||||||||||||
| Shareholders’ equity | 392,798 | 369,325 | 347,907 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,937,023 | $ | 3,585,270 | $ | 3,340,541 | |||||||||||||||||||
| Net interest income, taxable equivalent | $ | 30,529 | $ | 27,046 | $ | 26,194 | |||||||||||||||||||
| Interest rate spread | 3.23 | % | 3.16 | % | 3.22 | % | |||||||||||||||||||
| Tax equivalent net interest margin | 3.35 | % | 3.29 | % | 3.39 | % | |||||||||||||||||||
| Percentage of average interest-earning assets to average interest-bearing liabilities | 136.80 | % | 135.78 | % | 132.82 | % | |||||||||||||||||||
| Percentage of average equity to average assets | 9.98 | % | 10.30 | % | 10.41 | % | |||||||||||||||||||
1 Taxable equivalent
2 Includes average balance of $128,408, $266,114 and $295,045 in PPP loans for the quarters ended September 30, 2023, June 30, 2023, and September 30, 2020, respectively.
3 Includes average balance of $237,780 in Paycheck Protection Program Liquidity Facility (“PPPLF”) funding for the quarter ended September 30, 2020. No PPPLF funding was used for the quarters ended September 30, 2023, and June 30, 2023.
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information – (unaudited)
(dollars in thousands)
YIELD ANALYSIS
| Nine Months Ended | ||||||||||||||||||
| September 30, 2023 | September 30, 2020 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||
| Balance | Interest1 | Cost1 | Balance | Interest1 | Cost1 | |||||||||||||
| Assets: | ||||||||||||||||||
| Loans and leases, including fees2 | $ | 2,489,843 | $ | 87,823 | 4.72 | % | $ | 2,252,075 | $ | 83,487 | 4.95 | % | ||||||
| Loans held for sale | 5,724 | 192 | 4.49 | % | 6,409 | 231 | 4.81 | % | ||||||||||
| Taxable securities | 163,005 | 2,472 | 2.03 | % | 123,895 | 1,813 | 1.95 | % | ||||||||||
| Tax-exempt securities | 89,244 | 1,339 | 2.01 | % | 81,604 | 1,486 | 2.43 | % | ||||||||||
| Federal funds sold and other earning assets | 584,970 | 1,074 | 0.25 | % | 296,449 | 1,206 | 0.54 | % | ||||||||||
| Total interest-earning assets | 3,332,786 | 92,900 | 3.73 | % | 2,760,432 | 88,223 | 4.27 | % | ||||||||||
| Noninterest-earning assets | 295,074 | 248,293 | ||||||||||||||||
| Total assets | $ | 3,627,860 | $ | 3,008,725 | ||||||||||||||
| Liabilities and Stockholders’ Equity: | ||||||||||||||||||
| Interest-bearing demand deposits | $ | 698,148 | 974 | 0.19 | % | $ | 451,074 | 782 | 0.23 | % | ||||||||
| Money market and savings deposits | 1,112,342 | 2,580 | 0.31 | % | 749,316 | 2,707 | 0.48 | % | ||||||||||
| Time deposits | 517,566 | 3,179 | 0.82 | % | 667,303 | 7,527 | 1.51 | % | ||||||||||
| Total interest-bearing deposits | 2,328,056 | 6,733 | 0.39 | % | 1,867,693 | 11,016 | 0.79 | % | ||||||||||
| Borrowings3 | 81,177 | 360 | 0.59 | % | 203,202 | 674 | 0.44 | % | ||||||||||
| Subordinated debt | 39,650 | 1,823 | 6.15 | % | 39,290 | 1,751 | 5.95 | % | ||||||||||
| Total interest-bearing liabilities | 2,448,883 | 8,916 | 0.49 | % | 2,110,185 | 13,441 | 0.85 | % | ||||||||||
| Noninterest-bearing deposits | 782,960 | 537,860 | ||||||||||||||||
| Other liabilities | 21,553 | 23,826 | ||||||||||||||||
| Total liabilities | 3,253,396 | 2,671,871 | ||||||||||||||||
| Shareholders’ equity | 374,464 | 336,854 | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,627,860 | $ | 3,008,725 | ||||||||||||||
| Net interest income, taxable equivalent | $ | 83,984 | $ | 74,782 | ||||||||||||||
| Interest rate spread | 3.24 | % | 3.42 | % | ||||||||||||||
| Tax equivalent net interest margin | 3.37 | % | 3.62 | % | ||||||||||||||
| Percentage of average interest-earning assets to average interest-bearing liabilities | 136.09 | % | 130.81 | % | ||||||||||||||
| Percentage of average equity to average assets | 10.32 | % | 11.20 | % | ||||||||||||||
1 Taxable equivalent
2 Includes average balance of $235,027 and $169,617 in PPP loans for the six months ended September 30, 2023, and 2020, respectively.
3 Includes average balance of $115,734 in Paycheck Protection Program Liquidity Facility (“PPPLF”) funding for the nine months ended September 30, 2020. No PPPLF funding was used for the nine months ended September 30, 2023.
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information – (unaudited)
(dollars in thousands)
YIELD ANALYSIS
| Year Ended | ||||||||||||||||||
| December 31, 2020 | December 31, 2019 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||
| Balance | Interest1 | Cost1 | Balance | Interest1 | Cost1 | |||||||||||||
| Assets: | ||||||||||||||||||
| Loans, including fees2 | $ | 2,289,612 | $ | 111,992 | 4.89 | % | $ | 1,836,963 | $ | 100,831 | 5.49 | % | ||||||
| Loans held for sale | 7,360 | 320 | 4.34 | % | 3,858 | 171 | 4.43 | % | ||||||||||
| Taxable securities | 122,900 | 2,423 | 1.97 | % | 129,705 | 3,289 | 2.54 | % | ||||||||||
| Tax-exempt securities | 83,765 | 1,941 | 2.32 | % | 56,458 | 1,972 | 3.49 | % | ||||||||||
| Federal funds sold and other earning assets | 308,843 | 1,509 | 0.49 | % | 110,380 | 2,646 | 2.40 | % | ||||||||||
| Total interest-earning assets | 2,812,480 | 118,185 | 4.20 | % | 2,137,364 | 108,909 | 5.10 | % | ||||||||||
| Noninterest-earning assets | 250,955 | 201,976 | ||||||||||||||||
| Total assets | $ | 3,063,435 | $ | 2,339,340 | ||||||||||||||
| Liabilities and Stockholders’ Equity: | ||||||||||||||||||
| Interest-bearing demand deposits | $ | 481,050 | 1,013 | 0.21 | % | $ | 333,100 | 1,883 | 0.57 | % | ||||||||
| Money market and savings deposits | 788,006 | 3,482 | 0.44 | % | 651,855 | 7,827 | 1.20 | % | ||||||||||
| Time deposits | 641,647 | 9,102 | 1.42 | % | 635,451 | 12,205 | 1.92 | % | ||||||||||
| Total interest-bearing deposits | 1,910,703 | 13,597 | 0.71 | % | 1,620,406 | 21,915 | 1.35 | % | ||||||||||
| Borrowings3 | 177,204 | 816 | 0.46 | % | 21,526 | 319 | 1.48 | % | ||||||||||
| Subordinated debt | 39,301 | 2,334 | 5.94 | % | 39,216 | 2,341 | 5.97 | % | ||||||||||
| Total interest-bearing liabilities | 2,127,208 | 16,747 | 0.79 | % | 1,681,148 | 24,575 | 1.46 | % | ||||||||||
| Noninterest-bearing deposits | 571,282 | 343,611 | ||||||||||||||||
| Other liabilities | 23,775 | 15,852 | ||||||||||||||||
| Total liabilities | 2,722,265 | 2,040,611 | ||||||||||||||||
| Shareholders’ equity | 341,170 | 298,729 | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,063,435 | $ | 2,339,340 | ||||||||||||||
| Net interest income, taxable equivalent | $ | 101,438 | $ | 84,334 | ||||||||||||||
| Interest rate spread | 3.41 | % | 3.64 | % | ||||||||||||||
| Tax equivalent net interest margin | 3.61 | % | 3.95 | % | ||||||||||||||
| Percentage of average interest-earning assets to average interest-bearing liabilities | 132.21 | % | 127.14 | % | ||||||||||||||
| Percentage of average equity to average assets | 11.14 | % | 12.77 | % | ||||||||||||||
1 Taxable equivalent
2 Includes average balance of $201,470 in PPP loans for the twelve months ended December 31, 2020.
3 Includes average balance of $91,190 in PPPLF funding for twelve months ended December 31, 2020.
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 | ||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||
| Composition of Loans and Leases: | ||||||||||||||||
| Commercial real estate: | ||||||||||||||||
| owner occupied | $ | 560,671 | $ | 492,750 | $ | 477,293 | $ | 463,771 | $ | 467,569 | ||||||
| non-owner occupied | 752,576 | 669,741 | 593,348 | 549,205 | 563,082 | |||||||||||
| Commercial real estate, total | 1,313,247 | 1,162,491 | 1,070,641 | 1,012,976 | 1,030,651 | |||||||||||
| Commercial & industrial | 469,739 | 496,114 | 686,010 | 634,446 | 644,498 | |||||||||||
| Construction & land development | 326,374 | 300,704 | 285,973 | 278,075 | 275,172 | |||||||||||
| Consumer real estate | 478,161 | 444,640 | 432,486 | 443,930 | 440,310 | |||||||||||
| Leases | 53,396 | 53,038 | — | — | — | |||||||||||
| Consumer and other | 11,746 | 11,331 | 12,019 | 12,816 | 13,426 | |||||||||||
| Total loans and leases | $ | 2,652,663 | $ | 2,468,318 | $ | 2,487,129 | $ | 2,382,243 | $ | 2,404,057 | ||||||
| Asset Quality and Additional Loan Data: | ||||||||||||||||
| Nonperforming loans and leases | $ | 3,567 | $ | 3,758 | $ | 6,234 | $ | 5,782 | $ | 2,248 | ||||||
| Other real estate owned | 2,415 | 2,499 | 3,946 | 4,619 | 3,932 | |||||||||||
| Other repossessed assets | 77 | 199 | — | — | — | |||||||||||
| Total nonperforming assets | $ | 6,059 | $ | 6,456 | $ | 10,180 | $ | 10,401 | $ | 6,180 | ||||||
| Restructured loans and leases not included in nonperforming loans and leases | $ | 212 | $ | 219 | $ | 250 | $ | 257 | $ | 8 | ||||||
| Net charge-offs to average loans and leases (annualized) | 0.03 | % | 0.01 | % | 0.01 | % | 0.08 | % | 0.01 | % | ||||||
| Allowance for loan and leases losses to loans and leases | 0.73 | % | 0.74 | % | 0.74 | % | 0.77 | % | 0.78 | % | ||||||
| Nonperforming loans and leases to total loans and leases, gross | 0.13 | % | 0.15 | % | 0.25 | % | 0.24 | % | 0.09 | % | ||||||
| Nonperforming assets to total assets | 0.14 | % | 0.18 | % | 0.29 | % | 0.31 | % | 0.18 | % | ||||||
| Acquired loan and lease fair value discount balance | $ | 13,001 | $ | 12,982 | $ | 12,951 | $ | 14,467 | $ | 15,141 | ||||||
| Accretion income on acquired loans and leases | 1,760 | 761 | 1,636 | 768 | 960 | |||||||||||
| PPP net fees deferred balance | 3,783 | 6,651 | 7,351 | 4,190 | 6,348 | |||||||||||
| PPP net fees recognized | 2,873 | 2,132 | 2,398 | 2,157 | 1,812 | |||||||||||
| Capital Ratios: | ||||||||||||||||
| Equity to Assets | 9.69 | % | 10.22 | % | 10.23 | % | 10.81 | % | 10.33 | % | ||||||
| Tangible common equity to tangible assets (Non-GAAP)1 | 7.47 | % | 7.93 | % | 8.00 | % | 8.41 | % | 7.97 | % | ||||||
| SmartFinancial, Inc.2 | ||||||||||||||||
| Tier 1 leverage | 8.36 | % | 8.10 | % | 8.55 | % | 8.69 | % | 8.78 | % | ||||||
| Common equity Tier 1 | 10.85 | % | 10.63 | % | 11.29 | % | 11.61 | % | 11.33 | % | ||||||
| Tier 1 capital | 10.85 | % | 10.63 | % | 11.29 | % | 11.61 | % | 11.33 | % | ||||||
| Total capital | 12.92 | % | 12.80 | % | 13.62 | % | 14.07 | % | 13.81 | % | ||||||
| SmartBank | Estimated3 | |||||||||||||||
| Tier 1 leverage | 9.20 | % | 8.75 | % | 9.33 | % | 9.58 | % | 9.74 | % | ||||||
| Common equity Tier 1 | 11.95 | % | 11.50 | % | 12.31 | % | 12.79 | % | 12.57 | % | ||||||
| Tier 1 capital | 11.95 | % | 11.50 | % | 12.31 | % | 12.79 | % | 12.57 | % | ||||||
| Total capital | 12.60 | % | 12.19 | % | 13.05 | % | 13.57 | % | 13.37 | % | ||||||
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 | ||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||||||
| Selected Performance Ratios (Annualized): | ||||||||||||||||||||||
| Return on average assets | 0.97 | % | 0.98 | % | 1.18 | % | 1.11 | % | 0.76 | % | 1.04 | % | 0.68 | % | ||||||||
| Return on average shareholders’ equity | 9.70 | % | 9.53 | % | 10.96 | % | 10.15 | % | 7.31 | % | 10.05 | % | 6.07 | % | ||||||||
| Return on average tangible common equity¹ | 12.84 | % | 12.54 | % | 14.41 | % | 13.43 | % | 9.72 | % | 13.24 | % | 8.10 | % | ||||||||
| Noninterest income / average assets | 0.64 | % | 0.58 | % | 0.69 | % | 0.61 | % | 0.49 | % | 0.63 | % | 0.46 | % | ||||||||
| Noninterest expense / average assets | 2.35 | % | 2.33 | % | 2.35 | % | 2.46 | % | 2.28 | % | 2.34 | % | 2.52 | % | ||||||||
| Efficiency ratio | 63.53 | % | 64.91 | % | 60.92 | % | 63.38 | % | 63.54 | % | 63.14 | % | 66.93 | % | ||||||||
| Operating Selected Performance Ratios (Annualized): | ||||||||||||||||||||||
| Operating return on average assets1 | 1.00 | % | 1.01 | % | 1.19 | % | 1.14 | % | 0.79 | % | 1.06 | % | 0.81 | % | ||||||||
| Operating PTPP return on average assets1 | 1.39 | % | 1.30 | % | 1.52 | % | 1.45 | % | 1.35 | % | 1.40 | % | 1.42 | % | ||||||||
| Operating return on average shareholders’ equity1 | 10.01 | % | 9.83 | % | 11.05 | % | 10.34 | % | 7.57 | % | 10.28 | % | 7.20 | % | ||||||||
| Operating return on average tangible common equity1 | 13.26 | % | 12.93 | % | 14.53 | % | 13.69 | % | 10.06 | % | 13.56 | % | 9.60 | % | ||||||||
| Operating efficiency ratio1 | 62.09 | % | 63.46 | % | 60.32 | % | 60.86 | % | 62.25 | % | 61.96 | % | 62.07 | % | ||||||||
| Operating noninterest income / average assets1 | 0.63 | % | 0.58 | % | 0.69 | % | 0.56 | % | 0.49 | % | 0.63 | % | 0.46 | % | ||||||||
| Operating noninterest expense / average assets1 | 2.30 | % | 2.29 | % | 2.34 | % | 2.37 | % | 2.25 | % | 2.31 | % | 2.35 | % | ||||||||
| Selected Interest Rates and Yields: | ||||||||||||||||||||||
| Yield on loans and leases | 4.95 | % | 4.52 | % | 4.67 | % | 4.72 | % | 4.71 | % | 4.72 | % | 4.95 | % | ||||||||
| Yield on earning assets, FTE | 3.67 | % | 3.65 | % | 3.88 | % | 4.01 | % | 3.88 | % | 3.73 | % | 4.27 | % | ||||||||
| Cost of interest-bearing deposits | 0.34 | % | 0.39 | % | 0.44 | % | 0.50 | % | 0.59 | % | 0.39 | % | 0.79 | % | ||||||||
| Cost of total deposits | 0.25 | % | 0.29 | % | 0.33 | % | 0.38 | % | 0.44 | % | 0.29 | % | 0.61 | % | ||||||||
| Cost of interest-bearing liabilities | 0.44 | % | 0.49 | % | 0.54 | % | 0.60 | % | 0.65 | % | 0.49 | % | 0.85 | % | ||||||||
| Net interest margin, FTE | 3.35 | % | 3.29 | % | 3.48 | % | 3.57 | % | 3.39 | % | 3.37 | % | 3.62 | % | ||||||||
| Per Common Share: | ||||||||||||||||||||||
| Net income, basic | $ | 0.62 | $ | 0.59 | $ | 0.65 | $ | 0.60 | $ | 0.42 | $ | 1.85 | $ | 1.03 | ||||||||
| Net income, diluted | 0.61 | 0.58 | 0.65 | 0.59 | 0.42 | 1.84 | 1.02 | |||||||||||||||
| Operating earnings, basic¹ | 0.64 | 0.60 | 0.65 | 0.61 | 0.44 | 1.90 | 1.22 | |||||||||||||||
| Operating earnings, diluted¹ | 0.63 | 0.60 | 0.65 | 0.61 | 0.44 | 1.88 | 1.21 | |||||||||||||||
| Book value | 25.28 | 24.71 | 24.10 | 23.64 | 22.96 | 25.28 | 22.96 | |||||||||||||||
| Tangible book value¹ | 19.03 | 18.69 | 18.39 | 17.92 | 17.27 | 19.03 | 17.27 | |||||||||||||||
| Common shares outstanding | 16,801,447 | 15,109,736 | 15,104,536 | 15,107,214 | 15,233,227 | 16,801,447 | 15,233,227 | |||||||||||||||
¹See 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 | ||||||||||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||
| Operating Earnings: | ||||||||||||||||||||||||||||||
| Net income (GAAP) | $ | 9,600 | $ | 8,778 | $ | 9,756 | $ | 9,030 | $ | 6,395 | $ | 28,134 | $ | 15,302 | ||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||||||
| Securities gains (losses), net | (45 | ) | — | — | — | 9 | (45 | ) | (6 | ) | ||||||||||||||||||||
| ADECA termination proceeds | — | — | — | (465 | ) | — | — | — | ||||||||||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||||||||||||
| Merger related and restructuring expenses | 464 | 372 | 103 | 702 | 290 | 939 | 3,863 | |||||||||||||||||||||||
| Income taxes: | ||||||||||||||||||||||||||||||
| Income tax effect of adjustments | (108 | ) | (96 | ) | (27 | ) | (62 | ) | (77 | ) | (231 | ) | (1,009 | ) | ||||||||||||||||
| Operating earnings (Non-GAAP) | $ | 9,911 | $ | 9,054 | $ | 9,832 | $ | 9,205 | $ | 6,617 | $ | 28,797 | $ | 18,150 | ||||||||||||||||
| Operating earnings per common share (Non-GAAP): | ||||||||||||||||||||||||||||||
| Basic | $ | 0.64 | $ | 0.60 | $ | 0.65 | $ | 0.61 | $ | 0.44 | $ | 1.90 | $ | 1.22 | ||||||||||||||||
| Diluted | 0.63 | 0.60 | 0.65 | 0.61 | 0.44 | 1.88 | 1.21 | |||||||||||||||||||||||
| Operating Noninterest Income: | ||||||||||||||||||||||||||||||
| Noninterest income (GAAP) | $ | 6,309 | $ | 5,143 | $ | 5,691 | $ | 4,976 | $ | 4,121 | $ | 17,143 | $ | 10,450 | ||||||||||||||||
| Securities gains (losses), net | (45 | ) | — | — | — | 9 | (45 | ) | (6 | ) | ||||||||||||||||||||
| ADECA termination proceeds | — | — | — | (465 | ) | — | — | — | ||||||||||||||||||||||
| Operating noninterest income (Non-GAAP) | $ | 6,264 | $ | 5,143 | $ | 5,691 | $ | 4,511 | $ | 4,130 | $ | 17,098 | $ | 10,444 | ||||||||||||||||
| Operating noninterest income (Non-GAAP)/average assets1 | 0.63 | % | 0.58 | % | 0.69 | % | 0.56 | % | 0.49 | % | 0.63 | % | 0.46 | % | ||||||||||||||||
| Operating Noninterest Expense: | ||||||||||||||||||||||||||||||
| Noninterest expense (GAAP) | $ | 23,309 | $ | 20,797 | $ | 19,464 | $ | 19,953 | $ | 19,167 | $ | 63,570 | $ | 56,766 | ||||||||||||||||
| Merger related and restructuring expenses | (464 | ) | (372 | ) | (103 | ) | (702 | ) | (290 | ) | (939 | ) | (3,863 | ) | ||||||||||||||||
| Operating noninterest expense (Non-GAAP) | $ | 22,845 | $ | 20,425 | $ | 19,361 | $ | 19,251 | $ | 18,877 | $ | 62,631 | $ | 52,903 | ||||||||||||||||
| Operating noninterest expense (Non-GAAP)/average assets2 | 2.30 | % | 2.29 | % | 2.34 | % | 2.37 | % | 2.25 | % | 2.31 | % | 2.35 | % | ||||||||||||||||
| Operating Pre-tax Pre-provision (“PTPP”) Earnings: | ||||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 30,382 | $ | 26,897 | $ | 26,260 | $ | 26,506 | $ | 26,043 | $ | 83,539 | $ | 74,360 | ||||||||||||||||
| Operating noninterest income | 6,264 | 5,143 | 5,691 | 4,511 | 4,130 | 17,098 | 10,444 | |||||||||||||||||||||||
| Operating noninterest expense | (22,845 | ) | (20,425 | ) | (19,361 | ) | (19,251 | ) | (18,877 | ) | (62,631 | ) | (52,903 | ) | ||||||||||||||||
| Operating PTPP earnings (Non-GAAP) | $ | 13,801 | $ | 11,615 | $ | 12,590 | $ | 11,766 | $ | 11,296 | $ | 38,006 | $ | 31,901 | ||||||||||||||||
| Non-GAAP Return Ratios: | ||||||||||||||||||||||||||||||
| Operating return on average assets (Non-GAAP)3 | 1.00 | % | 1.01 | % | 1.19 | % | 1.14 | % | 0.79 | % | 1.06 | % | 0.81 | % | ||||||||||||||||
| Operating PTPP return on average assets (Non-GAAP)4 | 1.39 | % | 1.30 | % | 1.52 | % | 1.45 | % | 1.35 | % | 1.40 | % | 1.42 | % | ||||||||||||||||
| Return on average tangible common equity (Non-GAAP)5 | 12.84 | % | 12.54 | % | 14.41 | % | 13.43 | % | 9.72 | % | 13.24 | % | 8.10 | % | ||||||||||||||||
| Operating return on average shareholders’ equity (Non-GAAP)6 | 10.01 | % | 9.83 | % | 11.05 | % | 10.34 | % | 7.57 | % | 10.28 | % | 7.20 | % | ||||||||||||||||
| Operating return on average tangible common equity (Non-GAAP)7 | 13.26 | % | 12.93 | % | 14.53 | % | 13.69 | % | 10.06 | % | 13.56 | % | 9.60 | % | ||||||||||||||||
| Operating Efficiency Ratio: | ||||||||||||||||||||||||||||||
| Efficiency ratio (GAAP) | 63.53 | % | 64.91 | % | 60.92 | % | 63.38 | % | 63.54 | % | 63.14 | % | 66.93 | % | ||||||||||||||||
| Adjustment for taxable equivalent yields | (0.25 | ) | % | (0.30 | ) | % | (0.28 | ) | % | (0.30 | ) | % | (0.32 | ) | % | (0.28 | ) | % | (0.33 | ) | % | |||||||||
| Adjustment for securities gains (losses) | (0.08 | ) | % | — | % | — | % | — | % | 0.02 | % | (0.03 | ) | % | (0.01 | ) | % | |||||||||||||
| Adjustment for merger related income and costs | (1.11 | ) | % | (1.15 | ) | % | (0.32 | ) | % | (2.22 | ) | % | (0.99 | ) | % | (0.87 | ) | % | (4.52 | ) | % | |||||||||
| Operating efficiency ratio (Non-GAAP) | 62.09 | % | 63.46 | % | 60.32 | % | 60.86 | % | 62.25 | % | 61.96 | % | 62.07 | % | ||||||||||||||||
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 PTPP return on average assets (Non-GAAP) is the annualized operating PTPP 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 | ||||||||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
| Tangible Common Equity: | ||||||||||||||||||||||||||||
| Shareholders’ equity (GAAP) | $ | 424,720 | $ | 373,393 | $ | 364,058 | $ | 357,168 | $ | 349,789 | $ | 424,720 | $ | 349,789 | ||||||||||||||
| Less goodwill and other intangible assets | 104,930 | 90,966 | 86,350 | 86,471 | 86,710 | 104,930 | 86,710 | |||||||||||||||||||||
| Tangible common equity (Non-GAAP) | $ | 319,790 | $ | 282,427 | $ | 277,708 | $ | 270,697 | $ | 263,079 | $ | 319,790 | $ | 263,079 | ||||||||||||||
| Average Tangible Common Equity: | ||||||||||||||||||||||||||||
| Average shareholders’ equity (GAAP) | $ | 392,798 | $ | 369,325 | $ | 360,919 | $ | 354,026 | $ | 347,907 | $ | 374,464 | $ | 336,854 | ||||||||||||||
| Less average goodwill and other intangible assets | 96,250 | 88,551 | 86,424 | 86,561 | 86,206 | 90,445 | 84,361 | |||||||||||||||||||||
| Average tangible common equity (Non-GAAP) | $ | 296,548 | $ | 280,774 | $ | 274,495 | $ | 267,465 | $ | 261,701 | $ | 284,019 | $ | 252,493 | ||||||||||||||
| Tangible Book Value per Common Share: | ||||||||||||||||||||||||||||
| Book value per common share (GAAP) | $ | 25.28 | $ | 24.71 | $ | 24.10 | $ | 23.64 | $ | 22.96 | $ | 25.28 | $ | 22.96 | ||||||||||||||
| Adjustment due to goodwill and other intangible assets | (6.25 | ) | (6.02 | ) | (5.71 | ) | (5.72 | ) | (5.69 | ) | (6.25 | ) | (5.69 | ) | ||||||||||||||
| Tangible book value per common share (Non-GAAP)1 | $ | 19.03 | $ | 18.69 | $ | 18.39 | $ | 17.92 | $ | 17.27 | $ | 19.03 | $ | 17.27 | ||||||||||||||
| Tangible Common Equity to Tangible Assets: | ||||||||||||||||||||||||||||
| Total Assets | $ | 4,384,031 | $ | 3,654,356 | $ | 3,557,203 | $ | 3,304,949 | $ | 3,387,588 | $ | 4,384,031 | $ | 3,387,588 | ||||||||||||||
| Less goodwill and other intangibles | 104,930 | 90,966 | 86,350 | 86,471 | 86,710 | 104,930 | 86,710 | |||||||||||||||||||||
| Tangible Assets (Non-GAAP): | $ | 4,279,101 | $ | 3,563,390 | $ | 3,470,853 | $ | 3,218,478 | $ | 3,300,878 | $ | 4,279,101 | $ | 3,300,878 | ||||||||||||||
| Tangible common equity to tangible assets (Non-GAAP) | 7.47 | % | 7.93 | % | 8.00 | % | 8.41 | % | 7.97 | % | 7.47 | % | 7.97 | % | ||||||||||||||
1Tangible book value per share is computed by dividing total stockholder’s equity, less goodwill and other intangible assets by common shares outstanding.
