Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q1 2024 Earnings Presentation
30 slides from Smartfinancial's earnings presentation, Apr 23, 2024
Slide 1: Investor Call 1Q 2024
INVESTOR CALL 1Q 2024 April 23, 2024, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-833-470-1428 Access Code: 060240 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 2024
QUARTERLY HIGHLIGHTS: FIRST QUARTER 2024 $0.49 $5.0 Diluted Earnings Per Share Book Value Per Share Diluted Operating Billion in Total EPS1 Assets $26.08 $27.07 $27.37 $0.68 $0.68 $22.73 $22.29 $21.34 $21.12 $0.55 $20.76 $19.66 $0.49 7.9% 3.8% $0.37 $0.41 $19.66 $20.76 $21.12 QoQ2 Annualized QoQ Ann
Slide 4: GAAP Key Measure Trends
GAAP KEY MEASURE TRENDS: Net Income: Diluted Earnings Per Share: Total Revenue: $ in Thousands $ in Thousands $16, 000 $1 $50, 000 $45, 000 $1 $40,101 $14, 000 $40, 000 $1 $12, 000 $35, 000 $1 $0.55 $10, 000 $9,358 $29,257 $30, 000 $1 $8, 000 $0.41 $25, 000 $6,174 $0 $20, 000 $6, 000 $0 $15, 000 $4,
Slide 5: Non-GAAP Key Measure Trends
NON-GAAP KEY MEASURE TRENDS1: Operating Earnings: Operating Diluted EPS: Operating PPNR: $ in Thousands $ in Thousands $ in Thousands $14, 000 $1 $18, 000 $1 $16, 000 $12, 000 $1 $14, 000 $10, 000 $11,912 $8,360 $1 $12, 000 $0.49 $10,202 $7,253 $8, 000 $0.48 $1 $10, 000 $0 $8, 000 $6, 000 $0 $6, 000
Slide 6: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $5.0 Nashville Knoxville Billion in Total Assets Chattanooga Huntsville $3.5 Billion in Total Birmingham Loans Tuscaloosa Auburn $4.4 Montgomery Billion in Total Deposits Dothan SmartBank Branch Offices Mobile 42 Pensacola Tallahassee Panama City Total B
Slide 7: SmartBank Journey: Looking Ahead
SMARTBANK JOURNEY: LOOKING AHEAD $6 Strategic Focus: Leverage Existing Infrastructure Investments to Drive Profitability and Optimize Efficiency $ in Billions, unless otherwise indicated $4.8 $5.0 $4.6 $4.6 $5 $4 $3.3 $3 $2.4 $2.3 $2 $1.7 $1.0 $1.1 $1 $- 2015 2016 2017 2018 2019 2020 2021 2022 2023
Slide 8: Market Area: Building Density in Attractive Southeast Markets
MARKET AREA: BUILDING DENSITY IN ATTRACTIVE SOUTHEAST MARKETS US Population Migration: Strong Migration into Great Markets Profile by Market Area: Abundant Organic Opportunity 1,2,3 July 1, 2022 to July 1, 2023 $2, 000, 000 1.1% $1, 500, 000 1,423,260 Nashville Knoxville $1, 000, 000 $500, 000 0.2%
Slide 9: 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 2019 History of Consistent Organic Growth $3,444 $3,478 $4, 000 10. 00% $3,338 $3,379 $3,282 $3,444 $3,478 $3, 500 19% 19% $3,254 9. 00% 19% 19% 18% 9% $3, 000
Slide 10: 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 Resi/Comm Retail Land Dev. Land Hotel & Space 12% 16% Hospitality
Slide 11: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands, unless otherwise indicated $14, 000 1.50% 350% 250% $12, 000 Nonperforming Assets 1.30% 330% Commercial Real Estate Concentration $9,735 1.10% $8,995 $10, 000 310% 200% 0.90% $8, 000 287% 285% 285% $5,881 280% 290% 0.70% $5,712 275% $
Slide 12: 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% Overall Stability Despite Some Mix Shift $5, 000 $4,394 $4,394 5. 00% $4,230 $4,200 $4,247 $4,268 $4,268 $4, 500 $4,077 12% $4,022 12% 13% 13%
Slide 13: Securities Detail: Significant Cashflow Return 1H '24
50% $100 SECURITIES DETAIL: SIGNIFICANT CASHFLOW RETURN 1H ‘24 $ in Millions, unless otherwise indicated 45% $90 Portfolio Summary Principal Cashflow Schedule ~$61 Million Maturing in Q2 ‘24 40% $80 $688 Million Book Value 5.4 Year Average Life 3.38% Book Yield 3.3 Year Effective Duration 35% $70 $6
Slide 14: Repricing Schedule: Yield Enhancement on Horizon
REPRICING SCHEDULE: YIELD ENHANCEMENT ON HORIZON FYE 2026 & ($ in millions) 2Q24 3Q24 4Q24 2025 Beyond Loan Repricing Schedule: Fixed Rate Loans $ 32 $ 32 $ 26 $ 177 $ 1,726 Weighted Average Yield 5.78% 5.53% 5.26% 4.44% 4.96% Adjustable Rate Loans $ 46 $ 24 $ 25 $ 69 $ 498 Weighted Average Yield 4.
Slide 15: 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 $1.5 Billion in Untapped Liquidity Sources Available Current On-Balance Sheet: Used Availability Cash & Ca
Slide 16: 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% $845 $824 $42,907 35.0% $800 $43, 000 5.5 0% $690 $667 30.0% $655 $38,705 $39
Slide 17: 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 $2.0 Billion Fixed Rate Loans Interest Income % Change $1.4 Billion Variable Rate Loans $473 , 0.4% • $884 Million Short-Te
Slide 18: 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 $7,492 $7,579 $7,130 $7,034 $6,925 1Q23 2Q23 3Q23 4Q23 1Q24 Serv
Slide 19: Operating Expense: Focus on Expense Containment
OPERATING EXPENSE: FOCUS ON EXPENSE CONTAINMENT $ in Thousands, unless otherwise indicated Operating Efficiency Ratio1 Operating Noninterest Expense1 $28,406 $28,770 $28,553 $27,529 $27,410 74% 73% 73% 71% 64% 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 1 Operating Efficiency Ratio Salaries &
Slide 20: 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% 8.1% 8.3% 8.2% 7.9% 7.5% 7.4% 7.2% 7.3% 7.2% $24. 00 $22.73 $22.29 5% $22. 00 $21.18 $21.12 Well $20.76 Capitalized $20. 00 $19.26 $19.17 $19.09 $17.92 $17.
Slide 21: 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 22: Appendix
Wy SmartFinancial APPENDIX
Slide 23: Income Statement: Detailed First Quarter Results
INCOME STATEMENT: DETAILED FIRST QUARTER RESULTS 1Q24 vs. 4Q23 1Q23 ($ in thousands, except per share data) 1Q24 4Q23 1Q23 % Chg. % Chg. Net Interest Income $ 31,721 $ 31,517 $ 35,982 1% (12%) Provision for Credit Losses (440) 1,571 550 Noninterest Income 8,380 7,579 6,925 11% 21% Noninterest Expens
Slide 24: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 Operating Earnings Net Income (GAAP) $ 9,358 $ 6,190 $ 2,067 $ 8,836 $ 11,500 $ 13,004 $ 11,543 $ 10,215 Noninterest Income: Securities (Gains) Losses - - 6,801 - - (144) - - Gain on Sale of Br
Slide 25: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 1Q22 4Q21 3Q21 2Q21 1Q21 4Q20 3Q20 2Q20 Operating Earnings Net Income (GAAP) $ 8,259 $ 6,655 $ 9,600 $ 8,778 $ 9,756 $ 9,030 $ 6,395 $ 6,174 Noninterest Income: Securities (Gains) Losses - - (45) - - - 9 (16) Gain on Sale of Branch B
Slide 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 Tangible Common Equity: Shareholders' Equity (GAAP) $ 466,796 $ 459,886 $ 446,652 $ 444,847 $ 443,399 $ 432,452 $ 414,711 $ 420,427 Less Goodwill And Other Intangible Assets 106,537 107,148 107
Slide 27: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 1Q22 4Q21 3Q21 2Q21 1Q21 4Q20 3Q20 2Q20 Tangible Common Equity: Shareholders' Equity (GAAP) $ 420,042 $ 429,430 $ 424,720 $ 373,393 $ 364,058 $ 357,168 $ 349,789 $ 343,488 Less Goodwill And Other Intangible Assets 105,215 105,852 104
Slide 28: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 2023Y 2022Y 2021Y 2020Y 2019Y 2018Y Tangible Common Equity (Excluding AOCI): Shareholders' Equity (GAAP) $ 459,886 $ 432,452 $ 429,430 $ 357,168 $ 312,747 $ 283,011 Less Goodwill And Other Intangible Assets 107,148 109,772 105,852 86
Slide 29: 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 29
Slide 30: SmartFinancial
_SmartFinancial : L =