Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Raymond James U.S. Bank Conference 2020
30 slides from Smartfinancial's conference presentation, Sep 8, 2020
Slide 1: Raymond James U.S. Bank Conference, September 9-10, 2020
Raymond James U.S. Bank Conference September 9-10, 2020 Miller Welborn Chairman of the Board Billy Carroll President & CEO
Slide 2: Legal Disclaimer
Legal Disclaimer 2 Forward-Looking Statements This presentation 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 Litigati
Slide 3: Markets
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Slide 4: SmartBank History
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Slide 5: Executive Team and Regional Presidents
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Slide 6: Culture
Culture 6 We are building a culture where Associates thrive and are empowered to be leaders. The core values that we have established as a company help us operate in unison and have become a critical part of our culture. Our Associates are key to SmartBank’s success. POSITIONING STATEMENT At SmartBa
Slide 7: Second Quarter Financial Highlights
Second Quarter Financial Highlights
Slide 8: Quarterly Highlights
Quarterly Highlights 8 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix ($ in thousands, except per share data) 2Q20 1Q20 Change Assets 3,265,985 $ 2,873,715 $ 392,270 $ Gross Loans 2,408,284 2,139,247 269,037 Deposits 2,539,
Slide 9: Operating PTPP Earnings
Operating PTPP Earnings 9 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $6,967 $6,770 $8,786 $8,039 $7,772 $8,700 $7,890 $8,692 $11,912 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4
Slide 10: Performance Trends: Total Assets, Loans and Deposits
Performance Trends 10 $2,062 $2,051 $2,274 $2,354 $2,391 $2,390 $2,449 $2,874 $3,266 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Total Assets, Loans and Deposits ($ in millions) Assets Loans Deposits
Slide 11: Performance Trends: ROAA and ROATCE
Performance Trends 11 1.56 % 1.01 % 1.12 % 0.43 % 0.79 % 0.67 % 0.93 % 1.47 % 1.31 % 1.37 % 1.53 % —% 0.20 % 0.40 % 0.60 % 0.80 % 1.00 % 1.20 % 1.40 % 1.60 % 1.80 % 2Q19 3Q19 4Q19 1Q20 2Q20 ROAA (%): Reported, Operating, Operating PTPP ROAA ROAA Operating ROAA ⁽¹⁾ Operating PTPP ROAA ⁽¹⁾ 16.8 % 10.5
Slide 12: Performance Trends: Efficiency Ratio and Book Value
Performance Trends 12 57.5 % 63.0 % 67.0 % 74.0 % 64.3 % 45.0 % 50.0 % 55.0 % 60.0 % 65.0 % 70.0 % 75.0 % 80.0 % 2Q19 3Q19 4Q19 1Q20 2Q20 Efficiency Ratio (%) Efficiency Ratio Operating Efficiency Ratio ⁽¹⁾ $21.47 $21.93 $22.33 $22.09 $22.57 $15.86 $16.37 $16.82 $16.40 $16.90 $15.00 $18.00 $21.00 $2
Slide 13: Net Interest Income
Net Interest Income 13 3.94% 3.91% 3.84% 3.90% 3.63% 5.53% 5.48% 5.36% 5.35% 4.87% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2Q19 3Q19 4Q19 1Q20 2Q20 Net Interest Margin Net Interest Margin (FTE) Loan Yield Cost of Funds Interest Bearing Liabilities ($mm) 2Q20 1Q20 Change Cash and cash equivalents $
Slide 14: Operating Noninterest Income (Non-GAAP)
Operating Noninterest Income (Non-GAAP) 14 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $1,983 $2,195 $2,120 $2,818 $3,495 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2Q19 3Q19 4Q19 1Q20 2Q20 Operating Nonint
Slide 15: Operating Noninterest Expense (Non-GAAP)
Operating Noninterest Expense (Non-GAAP) 15 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $15,013 $14,635 $15,334 $16,697 $17,329 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 2Q19 3Q19 4Q1
Slide 16: Attractive Deposit Mix
Attractive Deposit Mix 16 Noninterest demand 25% Interest-bearing demand 19% Money market and savings 30% Time deposits 26% Deposit Compostion (6/30/20) $2,012 $1,998 $2,047 $2,342 $2,540 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2Q19 3Q19 4Q19 1Q20 2Q20 Historical Deposit Compostion ($mm) Noninter
Slide 17: Overview of Loan Portfolio
Overview of Loan Portfolio 17 C&I 26% C&D 12% CRE, Owner Occupied 19% CRE, Non Owner Occupied 23% Consumer RE 19% Other <1% Loan Composition (6/30/20) 273.0% 91.7% 0% 100% 200% 300% 400% 2Q19 3Q19 4Q19 1Q20 2Q20 CRE Ratios CRE C&D $1,833 $1,865 $1,897 $2,139 $2,408 $0 $500 $1,000 $1,500 $2,000 $2,50
Slide 18: Asset Quality
Asset Quality 18 • NPAs increased due to the acquisition of ORE assets from PFG in Q1 2020 • Delinquencies remain at low levels • Asset quality remains strong with nonperforming assets to total assets of 0.28% • Credit quality remains strong with classified loans / total loans of 0.27% • Disciplined
Slide 19: COVID-19 Update: Modified Loans
COVID-19 Update Modified Loans 19 • Modified loans decreased from $615.7 million at June 30, 2020 to $359.4 million at August 31, 2020 • Represents 14.9% of the loan portfolio, a decrease from 25.6% at June 30, 2020 • 5 Loans ($4.9 million) are on a 2nd modification • Senior Management reviewed all
Slide 20: COVID-19 Update: Modified Loans Maturities
COVID-19 Update Modified Loans 20 Source: Company information Note: As of August 31, 2020 30.5% 54.7% 14.1% 0.7% 9.7% 1.6% 0.03% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% September October November December Remaining COVID Modification Maturities % Number of R
Slide 21: COVID-19 Update: Modified Hospitality Loans
COVID-19 Update Modified Hospitality Loans 21 Source: Company information Note: As of August 31, 2020 ($ in thousands) Region O/S Balance % Exposure by Region Average LTV Alabama 25,648 $ 24.7% 35.0% FL Panhandle 1,558 1.4% 42.5% Northeast TN 50,318 48.6% 47.8% Middle TN 15,226 14.7% 51.7% Southeast
Slide 22: COVID-19 Update: Modified Restaurant Loans
COVID-19 Update Modified Restaurant Loans 22 Source: Company information Note: As of August 31, 2020 ($ in thousands) Region O/S Balance % Exposure by Region Alabama 2,183 $ 3.6% FL Panhandle 18,765 30.8% Northeast TN 23,646 38.8% Middle TN 4,794 7.9% Southeast TN 11,494 19.0% Total Modifications 60
Slide 23: Paycheck Protection Program
Paycheck Protection Program 23 Client, 67.8% Non-Client, 32.2% Total PPP Loans: Client vs. Non-Client ($ in thousands) Industry Loan Amount Professional Services 42,479 $ Restaurants 39,318 Manufacturing 23,048 Medical 20,974 Construction 17,017 All Other Industries 150,860 Total 293,696 $ Total PPP
Slide 24: Reserve Reconciliation
Reserve Reconciliation 24 0.00% 0.30% 0.60% 0.90% $0 $5 $10 $15 $20 2Q19 3Q19 4Q19 1Q20 2Q20 Total Reserves ($mm) Allowance for Loan Losses Acquired Loan Fair Value Discounts Allowance for Loan Losses / Total Loans ($ in thousands) 2Q19 3Q19 4Q19 1Q20 2Q20 Allowance for Loan Losses - Originated 8,97
Slide 25: Current Capital Position
Current Capital Position 25 Note: Data as of the three months ended each respective quarter Basel III Regulatory Capital Minimum To Be Considered “Well Capitalized” 9.57% 9.88% 9.93% 8.96% 8.09% 0.0% 4.0% 8.0% 12.0% 16.0% 2Q19 3Q19 4Q19 1Q20 2Q20 TCE / TA (%) 9.92% 10.02% 10.34% 10.28% 8.83% 0.0% 4.
Slide 26: Appendix
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Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations 27 1. Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets. 2. Operating PTPP return on average assets (Non-GAAP) is the annualized operating PTPP earnings (Non-GAAP) divided by average assets. 3. Return on a
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations 28 ($ in thousands) 2Q20 1Q20 4Q19 3Q19 2Q19 Tangible Common Equity Shareholders' equity (GAAP) $ 343,488 336,200 $ 312,747 $ 306,040 $ 299,611 $ Less goodwill and other intangible assets 86,327 86,503 77,193 77,534 78,348 Tangible Common Equity (Non-GAAP) $ 257,161 249,697
Slide 29: Investor Contact
Investor Contact 29 Billy Carroll President & CEO 865.868.0613 billy.carroll@smartbank.com Miller Welborn Chairman 423.385.3067 miller.welborn@smartbank.com 5401 Kingston Pike, Suite 600 Knoxville, TN 37919
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SmartFinancial — Raymond James U.S. Bank Conference 2020 on 6ix