Slide 1: Investor Call 1Q 2023
INVESTOR CALL 1Q 2023 April 25, 2023, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-833-470-1428 Access Code: 320998 Miller Welborn Chairman of the Board Billy Carroll President & CEO Ron Gorczynski CFO 1
Slide 2: Disclosures
DISCLOSURES Forward-Looking Statements Non-GAAP Financial Measures This presentation may contain statements that are based on management’s current estimates Statements included in this presentation include Non-GAAP financial measures and should be or expectations of future events or future results,
Slide 3: Quarterly Highlights: First Quarter 2023
QUARTERLY HIGHLIGHTS: FIRST QUARTER 2023 $0.68 $4.8 Diluted Earnings Per Share Book Value Per Share Diluted Operating Billion in Total EPS1 Assets $26.08 $0.77 $0.76 $24.86 $25.59 $0.68 $0.68 $21.18 $21.34 $19.09 $19.66 $18.64 3% 7% $0.49 $0.51 $19.09 $19.66 QoQ2 Annualized QoQ Annualized Tang. Book
Slide 4: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.8 Nashville Knoxville Billion in Total Assets Chattanooga Huntsville $3.3 Billion in Total Birmingham Loans Tuscaloosa Auburn $4.2 Montgomery Billion in Total Deposits Dothan SmartBank Branch Offices Mobile 42 Pensacola Tallahassee Panama City Total B
Slide 5: Market Area: Targeting Industry Rich Growth Markets
MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS $ in Billions, unless otherwise indicated Legacy Markets1: Strong Relationships / Deep Market Penetration Forbes CAGR: 7% $2 $2.4 $2.3 SMBK Loans $2 $2 $2.1 $2.0 Top 200 $2 Best Places $2 $2 $2 for Business and 12/31/20 12/31/21 12/31/22 3/31/23 Ca
Slide 6: Loan Portfolio: Solid Markets Providing Opportunity
LOAN PORTFOLIO: SOLID MARKETS PROVIDING OPPORTUNITY $ in Millions, unless otherwise indicated Total Loans Loan Composition CAGR of 16% Since 2018 History of Driving Strong Organic Growth $3, 500 10. 00% $3,254 $3,282 $3,254 $3,282 $3,099 $2,994 $2,806 $3, 000 9. 00% 18% 18% $2,693 18% 18% $2, 500 $2
Slide 7: Loan Concentration: Well Balanced Exposure
LOAN CONCENTRATION: WELL BALANCED EXPOSURE Non-Owner Occupied CRE Construction &Development Exposure By Segment Exposure By Type1 Highly Diversified with Closely Monitored with No Seasoned Client Base Concentration Concerns Retail Resi/Comm Resi/Comm Space Land Land Dev. Hotel & 14% 16% 12% Hospital
Slide 8: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands, unless otherwise indicated Nonperforming Assets Delinquent and Nonaccruals / Total Loans 1.50% $12, 000 1.70% 1.50% 1.30% $6, 000 $10, 000 $4,981 $5,042 $5,021 $8,343 1.30% $4,808 1.10% $4,605 $8, 000 1.10% $6,588 $6,744 0.90% $4, 000
Slide 9: Allowance for Credit Losses: Q1 '23 CECL Adoption
ALLOWANCE FOR CREDIT LOSSES: Q1 ’23 CECL ADOPTION $ in Thousands, unless otherwise indicated Current Expected Credit Loss (CECL) Allowance Reconciliation Assumptions and Impact Allowance % of Loans 12/31/22 Balance $23,334 0.72% FNMA / FOMC1 3-Year Forecast / 2-Year Unemployment + Day 1 CECL Impact
Slide 10: Deposit Portfolio: Defending Deposit Market Share
DEPOSIT PORTFOLIO: DEFENDING DEPOSIT MARKET SHARE $ in Millions, unless otherwise indicated Total Deposits Deposit Composition Loans to Deposits Ratio of 78% Higher Rates Driving Mix Shift $4, 500 $4,230 $4,022 $4,077 $4,282 $4,280 5. 00% $4,191 $4,230 $4,077 $4, 000 12% 11% 12% 13% 11% $3, 500 4. 0
Slide 11: Deposit Granularity: Diversified Client Base
DEPOSIT GRANULARITY: DIVERSIFIED CLIENT BASE Deposit Portfolio Statistics Deposit Portfolio Segmentation Deposits: $4.2 Billion Uninsured1: 26% Consumer 37% Avg. Balance2: $39 Thousand Public Funds3: $964 Million Consumer Accts: ~69 Thousand Commercial 34% Commercial Accts: ~18 Thousand 1) Uninsured
Slide 12: Liquidity Overview: Prudently Managing Liquidity
LIQUIDITY OVERVIEW: PRUDENTLY MANAGING LIQUIDITY $ in Millions, unless otherwise indicated Robust Liquidity on Hand Other Liquidity Sources Methodical Cash Deployment Now Proving Sensible Ample Access to a Variety of Funding Total Amount Net Available Used Availability $1.6 Billion in Untapped Liqui
Slide 13: Securities Detail: Structured for Liquidity
80% SECURITIES DETAIL: STRUCTURED FOR LIQUIDITY $300 $ in Millions, unless otherwise indicated 70% Portfolio Summary Principal Cashflow Schedule $307 Million Maturing by Q2 ‘24 $880 Million Book Value $250 4.6 Year Average Life 60% $209 2.34% Book Yield 3.1 Year Effective Duration ($59) Million Unre
Slide 14: Liquidity Management: Managing Margin Pressure
LIQUIDITY MANAGEMENT: MANAGING MARGIN PRESSURE $ in Millions, unless otherwise indicated $ in Thousands Cash and Securities Margin / Operating Revenue2 $1, 200 Strong Cash & Liquid Securities Position 50.0% Maintaining Revenue Despite 45.0% Challenging Margin Environment $1, 000 40.0% 6.0 0% $44,593
Slide 15: Interest Rate Sensitivity
INTEREST R ATE SENSITIVITY $ in Millions, unless otherwise indicated $ in Thousands Fixed vs. Variable Rate Loans Static Shock / Rate Ramp Analysis1 $2,587 , 1.9% $1.8 Billion Fixed Rate Loans Interest Income % Change $1.4 Billion Variable Rate Loans • $799 Million Short-Term Variable Rate (1 - 3 Mo
Slide 16: Noninterest Revenue Details: Growing Fee Income
NONINTEREST REVENUE DETAILS: GROWING FEE INCOME $ in Thousands, unless otherwise indicated Operating Noninterest Income1 Differentiated Revenue Streams Focused on Recurring Fee Income Building a Family of Diversified Revenue Generators $7,111 $7,229 $6,981 $6,925 $6,250 1Q22 2Q22 3Q22 4Q22 1Q23 Serv
Slide 17: Operating Expense: Investing With an Eye on Efficiencies
OPERATING EXPENSE: INVESTING WITH AN EYE ON EFFICIENCIES $ in Thousands, unless otherwise indicated Operating Efficiency Ratio1 Operating Noninterest Expense1 Executing on Expansion Opportunities Disciplined Focus on Expense Containment $27,143 $27,461 $27,529 $25,845 $25,279 68% 64% 64% 63% 61% 1Q2
Slide 18: Capital: Well Capitalized – Building Book Value
CAPITAL: WELL CAPITALIZED – BUILDING BOOK VALUE TCE / TA1 Leverage Ratio Building Shareholder Value Tangible Book Value Per Share (TBVPS)1 8.0% 7.9% 7.4% 7.5% 7.4% 7.1% 7.2% $24. 00 6.8% 6.7% 6.5% 5% $22. 00 $21.18 $21.34 Well Capitalized $20. 00 $19.66 $19.26 $19.17 $19.09 $17.92 $17.77 $18. 00 $16
Slide 19: Why SmartBank: Investment Highlights
WHY SMARTBANK: INVESTMENT HIGHLIGHTS Engaged Management Team $ Low-Cost Deposit Base Solid Credit Quality and Underwriting Stable Markets Experiencing Population Expansion Growing Business Lines with Revenue Diversification Franchise Scarcity Value – Building Southeast Density History of Defending B
Slide 20: Appendix
Wy SmartFinancial APPENDIX
Slide 21: Income Statement: Detailed First Quarter Results
INCOME STATEMENT: DETAILED FIRST QUARTER RESULTS 1Q23 vs. 4Q22 1Q22 ($ in thousands, except per share data) 1Q23 4Q22 1Q22 % Chg. % Chg. Net Interest Income $ 35,982 $ 37,612 $ 30,118 (4%) 19% Provision for Loan & Lease losses 550 788 1,006 Noninterest Income 6,925 7,125 7,111 (3%) (3%) Noninterest
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 1Q23 4Q22 3Q22 2Q22 1Q22 Operating Earnings Net Income (GAAP) $ 11,500 $ 13,004 $ 11,543 $ 10,215 $ 8,259 Noninterest Income: Securities (Gains) Losses - (144) - - - Noninterest Expenses: Merger Related And Restructuring Expenses - (
Slide 23: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 1Q23 4Q22 3Q22 2Q22 1Q22 Tangible Common Equity: Shareholders' Equity (GAAP) $ 443,399 $ 432,452 $ 414,711 $ 420,427 $ 420,042 Less Goodwill And Other Intangible Assets 109,114 109,772 110,460 104,582 105,215 Tangible Common Equity (
Slide 24: Contact
CONTACT Miller Welborn Billy Carroll Ron Gorczynski Chairman President & CEO Chief Financial Officer 423.385.3067 865.868.0613 865.437.5724 Miller.Welborn@smartbank.com Billy.Carroll@smartbank.com Ron.Gorczynski@smartbank.com 5401 Kingston Pike, Suite 600 Knoxville, TN 37919 24
Slide 25: _SmartFinancial : L =
_SmartFinancial : L =