Slide 1: Investor Call 2Q 2023
INVESTOR CALL 2Q 2023 July 25, 2023, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-833-470-1428 Access Code: 194833 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: Second Quarter 2023
QUARTERLY HIGHLIGHTS: SECOND QUARTER 2023 $0.52 $4.7 Diluted Earnings Per Share Book Value Per Share Diluted Operating Billion in Total EPS1 Assets $26.08 $26.16 $0.68 $0.68 $24.88 $21.84 $0.61 $0.61 $21.34 $0.52 $0.52 $19.66 $19.78 $18.69 12% 7% $19.66 $19.78 QoQ2 Annualized QoQ Annualized Tang. Bo
Slide 4: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.7 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: 5% $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 6/30/23 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 15% Since 2018 History of Strong Organic Growth $3,338 $4, 000 10. 00% $3,254 $3,282 $3,099 $2,994 $3,338 $3, 500 $3,254 $3,282 9. 00% 19% 18% 18% 18% $3, 000 18% $2,693
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 Resi/Comm Retail Land Space Resi/Comm 15% 14% Land Dev. Multifamily Hotel &
Slide 8: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands, unless otherwise indicated $8, 000 1.50% 350% 250% Nonperforming Assets 1.30% 330% Commercial Real Estate Concentration $6, 000 $5,712 1.10% $5,042 $5,021 303% $4,808 301% 310% 200% $4,605 0.90% 294% $4, 000 0.70% 290% 287% 286% 0.50%
Slide 9: 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 79% Stability in Mix Shift $4, 500 $4,230 $4,200 $4,022 $4,077 $4,282 $4,280 5. 00% $4,230 $4,200 $4,077 $4, 000 12% 11% 12% 13% $3, 500 11% 4. 00
Slide 10: Deposit Granularity: Diversified Client Base
DEPOSIT GRANULARITY: DIVERSIFIED CLIENT BASE Deposit Portfolio Statistics Deposit Portfolio Segmentation Deposits: $4.2 Billion Uninsured1: 27% Consumer 35% Avg. Balance2: ~$39 Thousand Public Funds3: $953 Million Consumer Accts2: ~68 Thousand Commercial 35% Commercial Accts2: ~18 Thousand 1) Uninsu
Slide 11: Liquidity Overview: Prudently Managing Liquidity
LIQUIDITY OVERVIEW: PRUDENTLY MANAGING LIQUIDITY $ in Millions, unless otherwise indicated Robust Liquidity on Hand Other Liquidity Sources Ample Access to a Variety of Funding Total Amount Net $1.7 Billion in Untapped Liquidity Sources Available Current On-Balance Sheet: Used Availability Cash & Ca
Slide 12: Securities Detail: Structured for Liquidity
80% $350 SECURITIES DETAIL: STRUCTURED FOR LIQUIDITY $ in Millions, unless otherwise indicated 70% $300 Portfolio Summary Principal Cashflow Schedule ~$300 Million Maturing by Q2 ‘24 $867 Million Book Value 4.4 Year Average Life 60% 2.37% Book Yield $250 3.0 Year Effective Duration $218 ($67) Millio
Slide 13: Liquidity Management: Navigating Margin Pressure
LIQUIDITY MANAGEMENT: NAVIGATING MARGIN PRESSURE $ in Millions, unless otherwise indicated $ in Thousands, unless otherwise indicated $1, 200 Cash and Securities 50.0% Margin / Operating Revenue2 45.0% $1, 000 40.0% 6.0 0% $44,593 $845 $813 $807 $824 $42,958 $42,907 35.0% $800 $770 $43, 000 5.5 0% $
Slide 14: Interest Rate Sensitivity
INTEREST R ATE SENSITIVITY $ in Millions, unless otherwise indicated $ in Thousands, unless otherwise indicated Fixed vs. Variable Rate Loans Static Shock / Rate Ramp Analysis1 $6,162 , 4.7% $2.0 Billion Fixed Rate Loans Interest Income % Change $3,705 , 2.8% $1.4 Billion Variable Rate Loans • $800
Slide 15: 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 $7,229 $7,130 $6,981 $6,925 $6,250 2Q22 3Q22 4Q22 1Q23 2Q23 Serv
Slide 16: Operating Expense: Focus on Expense Containment
OPERATING EXPENSE: FOCUS ON EXPENSE CONTAINMENT $ in Thousands, unless otherwise indicated Operating Efficiency Ratio1 Operating Noninterest Expense1 $27,143 $27,461 $27,529 $27,410 $25,845 71% 64% 63% 64% 61% 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 1 Operating Efficiency Ratio Salaries &
Slide 17: 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 8.2% 8.0% 7.9% 7.5% 7.4% 7.1% 7.2% 7.3% $24. 00 6.7% 6.5% $21.84 5% $22. 00 $21.18 Well Capitalized $19.78 $20. 00 $19.26 $19.17 $19.09 $17.92 $17.77 $18. 00 $16
Slide 18: Why SmartBank: Investment Highlights
WHY SMARTBANK: INVESTMENT HIGHLIGHTS Engaged Management Team $ Valuable 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 19: Appendix
Wy SmartFinancial APPENDIX
Slide 20: Income Statement: Detailed Second Quarter Results
INCOME STATEMENT: DETAILED SECOND QUARTER RESULTS 2Q23 vs. 1Q23 2Q22 ($ in thousands, except per share data) 2Q23 1Q23 2Q22 % Chg. % Chg. Net Interest Income $ 31,575 $ 35,982 $ 33,062 (12%) (4%) Provision for Loan & Lease losses 113 550 1,250 Noninterest Income 7,130 6,925 7,229 3% (1%) Noninterest
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 2Q23 1Q23 4Q22 3Q22 2Q22 Operating Earnings Net Income (GAAP) $ 8,836 $ 11,500 $ 13,004 $ 11,543 $ 10,215 Noninterest Income: Securities (Gains) Losses - - (144) - - Noninterest Expenses: Merger Related And Restructuring Expenses - -
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 2Q23 1Q23 4Q22 3Q22 2Q22 Tangible Common Equity: Shareholders' Equity (GAAP) $ 444,847 $ 443,399 $ 432,452 $ 414,711 $ 420,427 Less Goodwill And Other Intangible Assets 108,439 109,114 109,772 110,460 104,582 Tangible Common Equity (
Slide 23: 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 23
Slide 24: SmartFinancial
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