Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Stephens Inc. Investor Presentation (June 2018)
21 slides from Smartfinancial's conference presentation, Jun 5, 2018
Slide 1: Stephens Inc. Investor Presentation, June 5, 2018
Stephens Inc. Investor PresentationJune 5, 2018
Slide 2: Important Information: Forward Looking Statements
2 Important Information Forward Looking StatementsThis presentation contains forward-looking statements. SmartFinancial cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors incl
Slide 3: Strategic Profile
Investor PresentationSTRATEGIC PROFILE
Slide 4: The SmartFinancial Story
The SmartFinancial Story SmartBank was founded in 2007 as a de novo bank in East Tennessee and has grown to an approximate $2.0 billion-asset franchise through prudent organic growth and a thoughtful series of mergers (pro forma for the May 1, 2018 acquisition of Tennessee Bancshares and its subsidi
Slide 5: An Emerging Southeast Acquirer
An Emerging Southeast Acquirer SmartFinancial is transforming into an experienced and preferred Southeast acquirer, having completed five transactions that added low-cost core deposits in three statesApproximately half of the current core deposit franchise represents the SmartBank/ Cornerstone rever
Slide 6: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy SmartFinancial has communicated a disciplined set of merger criteria as it has pursued opportunities, including:No more than 3 years of initial TBV-per-share dilutionMeaningful EPS accretion in the first full year of operations (dependent on relative size of the targ
Slide 7: Our Business Strategy
Our Business Strategy Create a valuable southeastern banking franchise through organic growth in strong markets, coupled with an acquisition model positioning our company as a partner of choice for banks in our regionContinually improve earnings and efficiency metrics as we build out our model with
Slide 8: Attractive Returns For Investors
Attractive Returns For Investors SmartFinancial began trading on September 1, 2015 following the reverse MOE with Cornerstone and has outperformed the broader market since that timeSMBK price change through June 1, 2018 = 58.4%S&P 500 Index price change over the same period = 42.9%Three analysts cov
Slide 9: Valuation Metrics
Valuation Metrics 9 The mean EPS Estimate for analysts that cover our stock projects that SmartFinancial will achieve a 1%+ ROAA run rate in 2018The table below shows our trading multiples as of the most recent close, as well as the implied multiples based on our mean Price Target
Slide 10: 1Q18 Financial Highlights
Investor Presentation1Q18 FINANCIAL HIGHLIGHTS
Slide 11: First Quarter 2018 Highlights
First Quarter 2018 Highlights Record high Net Income of $3.4 million for the quarter, up 108% from a year earlierROAA of 80 basis points for the quarter (a new record) and Net Operating ROAA of 91 basis pointsOrganic loan growth of $51 million since year-end 2017, representing a more than 15% annual
Slide 12: ROAA, Net Interest Income and Expense to Average Assets
mROAA Net Operating ROAA Net Interest Income/ Average Assets 1.00% = ua for 4.00% sox, ; 3.90% 1 : 380% ye — 02% HB ff 8 8 HB 370% IT]. |— aoo% S ff BB BB gc 0% | A A “A A > “\ <\ ‘\ ‘\ > S S S s S S S S \ Ss eS FF LS PK Ey ae Noninterest Income/ Average Assets Noninterest Expense/ Average Assets 0.
Slide 13: Summary Income Statement
Summary Income Statement EPS up more than 55% year over yearEarnings Before Income Taxes up more than 68% year over yearNet Interest Income up more than 71% primarily due to higher average earning asset balances and higher earning asset yieldsIncreases in Noninterest Expense primarily driven by the
Slide 14: Net Interest Income and Net Interest Margin
Net Interest Margin (fully taxable equivalent) decreased quarter to quarter primarily due to lower purchase accounting adjustments on acquired loansCompared to a year ago, Earning Asset Yields are up 51 basis points; the Average Cost of Interest-bearing Liabilities are up 22 basis pointsExcluding th
Slide 15: Noninterest Income
Noninterest Income 1Q18 Noninterest Income increased primarily due to higher service charges on deposit accountsQuarterly recurring Noninterest Income has trended higher over the last four quarters from approximately $0.95 million in 1Q17 to $1.64 million in 1Q18
Slide 16: Noninterest Expense
Noninterest Expense Efficiency Ratio dropped to 72.7%, the lowest of any quarter since the Cornerstone merger in 2015Salary increases are primarily due to three months of Alabama associates vs. two in the fourth quarter of 2017Data processing slightly elevated due to operating two core systems for h
Slide 17: Balance Sheet
Balance Sheet Assets increased primarily due to organic loan growthCash & Cash Equivalents drawn down to fund loansSecurities held fairly flat to allocate funds to loansDeposit composition shifted to DDAs as a result of conversion reclassifications and organic growthFHLB & Other Borrowings includes
Slide 18: Loan & Deposit Composition 1Q18
Loan & Deposit Composition 1Q18
Slide 19: CRE Ratios
C&D levels (100 Ratio) are still well below regulatory guidance levelsTotal CRE levels (300 Ratio) are up slightly as a result of taking advantage of attractive growth opportunitiesManaging these ratios are part of our overall organic growth, merger opportunity and capital management strategies CRE
Slide 20: Asset Quality
Asset Quality Excellent asset quality, with Nonperforming Assets at just 0.26% of Total AssetsPurchase accounting discounts on acquired loans are more than 2.5x the current Allowance For Loan LossesAcquisitions are marked conservatively for potential losses
Slide 21: Investor Contacts
Billy Carroll President & CEO865.868.0613Billy.Carroll@SmartBank.com Miller Welborn SmartFinancial, Inc.5401 Kingston Pike, Suite 600Knoxville, TN 37919 Chairman423.385.3067Miller.Welborn@SmartBank.com Investor Contacts
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