Slide 1: Investor Call 3Q 2021
1 INVESTOR CALL 3Q 2021 October 20, 2021, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-844-200-6205 Access Code: 289025 Miller Welborn Chairman of the Board Billy Carroll President & CEO Ron Gorczynski CFO
Slide 2: Disclosures: Forward-Looking Statements
DISCLOSURES 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 Litigation Refo
Slide 3: Quarterly Highlights: Third Quarter 2021
$0.42 $0.58 $0.61 $0.44 $0.60 $0.63 3Q20 2Q21 3Q21 GAAP EPS OPERATING EPS $22.96 $24.71 $25.28 $17.27 $18.69 $19.03 3Q20 2Q21 3Q21 BOOK VALUE TANGIBLE BOOK VALUE 0.76% 0.98% 0.97% 0.79% 1.01% 1.00% 3Q20 2Q21 3Q21 GAAP ROAA OPERATING ROAA 9.7% 12.5% 12.8% 10.1% 12.9% 13.3% 3Q20 2Q21 3Q21 GAAP ROATCE
Slide 4: SmartFinancial: Expanding Southeast Franchise
4 SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.4 BILLION IN TOTAL ASSETS $2.7 BILLION IN TOTAL LOANS 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
Slide 5: Market demographics by region
Core Tennessee3 Central Tennessee / Nashville6 Total Deposits in Market $41.3 Billion Total Deposits in Market $89.2 Billion Current Population (2021) 1,549,636 Current Population (2021) 1,980,990 Proj. Pop. Growth ('21-'26) 4.0% Proj. Pop. Growth ('21-'26) 5.9% Proj. HH Inc. Growth ('21-'26) 9.7% P
Slide 6: 2021 Achievements: A Robust Year of Progress
6 1) SmartBank and SCB Bank combined market share in Sevier County, TN; S&P Market Intelligence; 2) SCB loan total net of Richmond, VA loan sale as of closing date; 3) See page 5 for definition of Expanding Market Area; 4) Business generating associates as a percent of total SmartBank revenue produc
Slide 7: Balance Sheet: Continued Balance Sheet Expansion
$1,319 $1,775 $1,897 $2,382 $2,487 $2,468 $2,653 5.31% 5.72% 5.49% 4.72% 4.67% 4.52% 4.95% 3. 00% 4. 00% 5. 00% 6. 00% 7. 00% 8. 00% 9. 00% 10. 00% $- $500 $1, 000 $1, 500 $2, 000 $2, 500 $3, 000 2017Y 2018Y 2019Y 4Q20 1Q21 2Q21 3Q21 $1,439 $1,922 $2,047 $2,805 $3,048 $3,139 $3,799 0.55% 0.86% 1.14%
Slide 8: Loan Portfolio: Strong Organic Loan Growth
19% 19% 19% 20% 21% 23% 23% 24% 27% 28% 13% 12% 14% 7% 3% 14% 15% 14% 13% 14% 11% 12% 11% 12% 12% 18% 19% 17% 18% 18% 3% $2,404 $2,382 $2,487 $2,468 $2,653 3Q20 4Q20 1Q21 2Q21 3Q21 CRE, OO CRE, NOO SBA PPP LOANS C&I C&D CONSUMER RE LEASES & OTHER 14%, $68 12%, $83 21%, $65 9%, $26 8%, $34 1%, $1 12%
Slide 9: Deposit Portfolio: Continued Core Deposit Growth
25% 24% 26% 26% 26% 20% 23% 22% 22% 22% 33% 33% 35% 36% 37% 22% 20% 17% 16% 15% $2,652 $2,805 $3,048 $3,139 $3,799 3Q20 4Q20 1Q21 2Q21 3Q21 NONINTEREST DEMAND INTEREST-BEARING DEMAND MONEY MARKET AND SAVINGS TIME DEPOSITS 21%, $170 21%, $145 22%, $249 20%, $96 21%, $660 NONINTEREST DEMAND INTEREST-B
Slide 10: Liquidity Utilization: Margin Management While Driving Revenue
$542 $482 $557 $674 $1,091 $215 $216 $251 $251 $339 6.3% 6.5% 7.1% 6.9% 7.7% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% $- $200 $400 $600 $800 $1,000 $1,200 3Q20 4Q20 1Q21 2Q21 3Q21 CASH AND CASH EQUIV.SECURITIES (AFS) SECURITIES (AFS) / TOTAL ASSETS 10 LIQUIDITY UTILIZATION: MA
Slide 11: Noninterest Revenue Details: Growing Fee Income
11 NONINTEREST REVENUE DETAILS: GROWING FEE INCOME OPERATING NONINTEREST INCOME1 CONTINUING TO STRENGTHEN $ in Thousands 1) Non-GAAP operating non-interest income shown Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix DIFFERE
Slide 12: Operating Expense: Investing in Growth
64% 63% 61% 65% 64% 62% 61% 60% 63% 62% 3Q20 4Q20 1Q21 2Q21 3Q21 EFFICIENCY RATIO OPERATING EFFICIENCY RATIO (NON-GAAP) $18,877 $19,251 $19,361 $20,425 $22,845 3Q20 4Q20 1Q21 2Q21 3Q21 SALARIES & BENEFITS OCCUPANCY & EQUIPMENT DATA PROCESSING & TECHNOLOGY PROFESSIONAL SERVICES AMORTIZATION OF INTANG
Slide 13: Operating Expense: Technology Investment
Enhanced work from home security upgrade Q1 2021 Branch network modernization Q2 2021 13 Digital consumer deposit origination upgrade Q2 2021 nCino commercial loan origination platform upgrade Q1 2022 Q2 2021 Online mortgage origination enhancements Q1 2021 Work from home technology upgrade Q2 2021
Slide 14: Credit quality metrics
$6,180 $10,401 $10,180 $6,456 $6,059 0.18% 0.31% 0.29% 0.18% 0.14% -0. 10% 0.10% 0.30% 0.50% 0.70% 0.90% 1.10% 1.30% 1.50% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 3Q20 4Q20 1Q21 2Q21 3Q21 NONPERFORMING LOANS OREO & OTHER REPOS NONPERFORMING ASSETS / TOTAL ASSETS $6,089 $9,606 $11,756
Slide 15: Paycheck Protection Program (PPP): Winding Down
15 PAYCHECK PROTECTION PROGRAM (“PPP”): WINDING DOWN Note: As of 9/30/21 Originated Acquired O/S Balance Forgiven # of Loans 2,957 25 40 2,942 % of Total 1% 99% Total Loan Balance 300,789 $ 2,208 $ 3,894 $ 299,103 $ % of Total 1% 99% Total Fees 10,068 $ - $ Originated Acquired O/S Balance Forgiven #
Slide 16: Reserve Reconciliation
16 RESERVE RECONCILIATION: $ in Thousands $18,817 $18,346 $18,370 $18,310 $19,295 $15,141 $14,467 $12,951 $12,982 $13,001 1.00% 0.96% 0.91% 0.86% 0.76% 0.00% 0.50% 1.00% 1.50% 2.00% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 3Q20 4Q20 1Q21 2Q21 3Q21 ALLOWANCE FOR
Slide 17: Capital: Well Capitalized – Building Book Value
8.0% 8.4% 8.0% 7.9% 7.5% 3Q20 4Q20 1Q21 2Q21 3Q21 11.3% 11.6% 11.3% 10.6% 10.9% 3Q20 4Q20 1Q21 2Q21 3Q21 8.8% 8.7% 8.6% 8.1% 8.4% 3Q20 4Q20 1Q21 2Q21 3Q21 13.8% 14.1% 13.6% 12.8% 12.9% 3Q20 4Q20 1Q21 2Q21 3Q21 $13.90 $14.64 $16.82 $17.92 $18.39 $18.69 $19.03 $5.00 $7.00 $9.00 $11.00 $13.00 $15.00 $1
Slide 18: Why SmartBank: Investment Highlights
WHY SMARTBANK: INVESTMENT HIGHLIGHTS 18 FRANCHISE SCARCITY VALUE –BUILDING SOUTHEAST DENSITY ENGAGED MANAGEMENT TEAM STABLE MARKETS EXPERIENCING POPULATION EXPANSION LOW-COST DEPOSIT BASE GROWING BUSINESS LINES WITH REVENUE DIVERSIFICATION SOLID CREDIT QUALITY AND UNDERWRITING HISTORY OF DEFENDING B
Slide 19: Appendix
ally, SmartFinancial APPENDIX
Slide 20: Income Statement: Detailed Third Quarter Results
20 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix INCOME STATEMENT: DETAILED THIRD QUARTER RESULTS 2Q21 3Q20 ($ in thousands, except per share data) 3Q21 2Q21 3Q20 % Chg. % Chg. Net Interest Income 30,382 $ 26,897 $ 26,043
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION 21 $ in Thousands, except per share data 1. Note:“ADECA” represents a loan program administered by the Alabama Department of Economic and Community Affairs 2. Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average asse
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION 22 $ in Thousands, except per share data 1. Book value per share is computed by dividing total stockholders’ equity by common shares outstanding. Tangible book value per share is computed by dividing total stockholders’ equity, less goodwill and other intangible assets by com
Slide 23: Contact
CONTACT 23 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 RON GORCZYNSKI CHIEF FINANCIAL OFFICER 865.437.5724 RON.GORCZYNSKI@SMARTBANK.COM
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