Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q1 2022 Earnings Presentation
22 slides from Smartfinancial's earnings presentation, Apr 26, 2022
Slide 1: Investor Call 1Q 2022
INVESTOR CALL 1Q 2022 April 26, 2022, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-844-200-6205 Access Code: 293033 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 2022
QUARTERLY HIGHLIGHTS: FIRST QUARTER 2022 $0.51 $4.7 EARNINGS PER SHARE BOOK VALUE PER SHARE DILUTED OPERATING BILLION IN TOTAL $0.65 $0.65 EPS1 ASSETS $25.56 $24.10 $24.86 $0.52 $0.51 $0.49 $19.26 $18.64 $18.39 -3% 21% $0.40 QOQ2 TANG. BOOK QOQ ANNUALIZED VALUE PER SHARE ORGANIC LOAN3 GROWTH1 GROWTH
Slide 4: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.7 NASHVILLE KNOXVILLE BILLION IN TOTAL ASSETS HUNTSVILLE CHATTANOOGA $2.8 BILLION IN TOTAL BIRMINGHAM LOANS TUSCALOOSA AUBURN $4.2 MONTGOMERY BILLION IN TOTAL DEPOSITS DOTHAN SMARTBANK BRANCH OFFICES MOBILE NEW SMARTBANK BRANCH OFFICES TALLAHASSEE 40
Slide 5: Balance Sheet: Continued Balance Sheet Expansion
BALANCE SHEET: CONTINUED BALANCE SHEET EXPANSION $ in Millions TOTAL LOANS TOTAL DEPOSITS CAGR1 OF 19% SINCE 2017 LOANS TO DEPOSITS R ATIO OF 67% $3 , 0 00 10 . 0 0% $ 4, 50 0 3 . 0 0% $2,806 $4,191 $2,693 $4,022 $ 4, 00 0 9 . 0 0% $2 , 5 00 $2,382 2 . 5 0% $ 3, 50 0 8 . 0 0% $2 , 0 00 $1,897 $ 3, 0
Slide 6: Loan and Deposit Portfolio: Strong Organic Growth
LOAN AND DEPOSIT PORTFOLIO: STRONG ORGANIC GROWTH $ in Millions LOAN COMPOSITION DEPOSIT COMPOSITION POSITIVE MARKET MOMENTUM CORE DEPOSIT GROWTH OUTPACING DRIVING ORGANIC GROWTH TIME DEPOSIT CONTRACTION $4,191 $2,806 $4,022 $2,693 3% $2,653 $3,799 13% $2,487 $2,468 14% 17% 18% 15% 18% 17% 18% $3,13
Slide 7: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands NONPERFORMING ASSETS DELINQUENT AND NONACCRUALS / TOTAL LOANS $ 1 4 ,0 0 0 1 .5 0 % $ 1 8 ,0 0 0 1 .7 0 % $ 1 6 ,0 0 0 1 .5 0 % 1 .3 0 % $ 1 2 ,0 0 0 $10,180 1 .1 0 % $ 1 4 ,0 0 0 1 .3 0 % $ 1 0 ,0 0 0 $ 1 2 ,0 0 0 $11,756 1 .1 0 % 0 .
Slide 8: Reserve Reconciliation
RESERVE RECONCILIATION: $ in Thousands $20,078 $ 2 2 ,0 0 2 .0 0 % $19,295 $19,352 $18,370 $18,310 $ 2 0 ,0 0 $ 1 8 ,0 0 $ 1 6 ,0 0 $15,483 $14,913 1 .5 0 % $ 1 4 ,0 0 $12,951 $12,982 $13,001 $ 1 2 ,0 0 1 .0 0 % $ 1 0 ,0 0 0.91% 0.86% $ 8 ,0 0 0 0.76% 0.74% 0.74% $ 6 ,0 0 0 0 .5 0 % $ 4 ,0 0 0 $ 2 ,
Slide 9: Liquidity Utilization: Margin Management While Driving Revenue
LIQUIDITY UTILIZATION: MARGIN MANAGEMENT WHILE DRIVING REVENUE $ in Millions $ in Thousands CASH AND SECURITIES MARGIN / OPERATING REVENUE2 $ 1 ,2 0 0 DEPLOYING EXCESS FUNDING 5 0 .0 % MAINTAINING REVENUE DESPITE $1,091 $1,045 4 5 .0 % CHALLENGING MARGIN ENVIRONMENT $ 1 ,0 0 0 6 .0 0 % $ 4 0 ,0 0 0
Slide 10: Interest Rate Sensitivity: Well Positioned for Rising Rates
INTEREST R ATE SENSITIVITY: WELL POSITIONED FOR RISING RATES $ in Thousands VARIABLE VS. FIXED R ATE LOANS STATIC SHOCK / R ATE R AMP ANALYSIS1 $16,302 , 12.4% INTERST INCOME % CHANGE $11,018 , 8.4% 40% 60% $5,624 , 4.3% SHOCK +100BPS SHOCK +200BPS SHOCK +300BPS FIXED R ATE LOANS VARIABLE R ATE LOAN
Slide 11: Noninterest Revenue Details: Growing Fee Income
NONINTEREST REVENUE DETAILS: GROWING FEE INCOME $ in Thousands OPERATING NONINTEREST INCOME1 DIFFERENTIATED REVENUE STREAMS CONTINUING TO STRENGTHEN BUILDING A FAMILY OF DIVERSIFIED REVENUE GENERATORS $7,111 $6,806 $6,264 $5,691 $5,143 1Q21 2Q21 3Q21 4Q21 1Q22 SERVICE CHARGES ON DEPOSIT ACCOUNTS MOR
Slide 12: Operating Expense: Investing in Growth
OPERATING EXPENSE: INVESTING IN GROWTH $ in Thousands OPERATING EFFICIENCY R ATIO1 OPERATING NONINTEREST EXPENSE1 EXECUTING ON EXPANSION OPPORTUNITIES DISCIPLINED FOCUS ON EXPENSE CONTAINMENT $25,061 $25,279 $22,845 68% 68% $20,425 $19,361 63% 62% 60% 1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q2
Slide 13: Capital: Well Capitalized – Building Book Value
CAPITAL: WELL CAPITALIZED – BUILDING BOOK VALUE TCE / TA1 LEVERAGE R ATIO BUILDING SHAREHOLDER VALUE $ 2 1 .0 0 TANGIBLE BOOK VALUE PER SHARE1 8.6% 8.4% $ 2 0 .0 0 8.0% 7.9% 8.1% 7.5% 7.5% 7.4% 7.2% 6.8% $19.26 5% $ 1 9 .0 0 WELL $18.64 CAPITALIZED $ 1 8 .0 0 $17.92 $ 1 7 .0 0 $16.82 1Q21 2Q21 3Q21
Slide 14: Operating Expense: Technology Initiatives
OPERATING EXPENSE: TECHNOLOGY INITIATIVES COMMERCIAL LENDING ENHANCEMENT WITH NCINO PLATFORM © EMBRACING TECHNOLOGY TO INCREASE EFFICIENCY AND CREATE STREAMLINED PROCESSES Enhanced work Branch Treasury Teller ATM fleet from home network Management modernization replacement with security upgrade mode
Slide 15: 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 16: Appendix
Wy SmartFinancial APPENDIX
Slide 17: Market Area: Targeting Industry Rich Growth Markets
MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS SMARTBANK IS FOCUSED ON BUILDING MUSCLE IN ITS EXPANDING, FAST GROWING SOUTHEAST MARKET AREAS EXPANDING MARKETS 127% 14% 0.5% LARGER DEPOSIT BASE HIGHER MEDIAN HOUSEHOLD INCOME FASTER PROJECTED POPULATION GROWTH VS. LEGACY MARKETS1 51% 2.4% >20% LA
Slide 18: Income Statement: Detailed First Quarter Results
INCOME STATEMENT: DETAILED FIRST QUARTER RESULTS 1Q22 vs. 4Q21 1Q21 ($ in thousands, except per share data) 1Q22 4Q21 1Q21 % Chg. % Chg. Net Interest Income $ 30,118 $ 29,855 $ 26,260 1% 15% Provision for Loan & Lease losses 1,006 422 67 Noninterest Income 7,111 6,806 5,691 4% 25% Noninterest Expens
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, except per share data 1Q22 4Q21 3Q21 2Q21 1Q21 Operating Earnings 1. Operating return on average assets (Non-GAAP) is Net Income (GAAP) $ 8,259 $ 6,655 $ 9,600 $ 8,778 $ 9,756 the annualized operating earnings (Non-GAAP) Noninterest Income: divided by average
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, except per share data 1Q22 4Q21 3Q21 2Q21 1Q21 Tangible Common Equity: 1. Book value per share is computed by dividing total Shareholders' Equity (GAAP) $ 420,042 $ 429,430 $ 424,720 $ 373,393 $ 364,058 stockholders’ equity by common shares Less Goodwill And O
Slide 21: 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 21
Slide 22: _SmartFinancial : L =
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