Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q1 2019 Earnings Presentation
20 slides from Smartfinancial's earnings presentation, Apr 25, 2019
Slide 1: First Quarter 2019 Earnings Release
First Quarter 2019 Earnings Release April 25, 2019
Slide 2: Legal Disclaimer: Forward-Looking Statements
Legal Disclaimer Forward-Looking Statements Certain of the statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Ex
Slide 3: Overview of SmartFinancial
Overview of SmartFinancial ▪ SmartFinancial, Inc. (Nasdaq: SMBK) is a $2.4 billion Branch Footprint asset bank holding company headquartered in Knoxville, Tennessee Nashville Knoxville Greensboro ▪ Jonesboro Operates one subsidiary bank, SmartBank, which was founded 40 in January 2007 ARKANSAS ▪ TEN
Slide 4: Culture
Culture 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 of our culture. Our Associates are key to SmartBank’s success. Core Values Act with Integrity Del
Slide 5: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy ▪ SmartFinancial has adhered to a disciplined set of merger criteria including: ▪ 3 years (+/-) of initial TBV-per-share dilution ▪ Meaningful EPS accretion in the first full year of operations ▪ Conservative loan marks ▪ Franchise additive ▪ SmartFinancial is commit
Slide 6: First Quarter Financial Highlights
First Quarter Financial Highlights
Slide 7: Performance Trends
Performance Trends ▪ Net Operating Earnings (Non-GAAP) of $5.5 ROAA (%) ROATCE (%) million for the quarter, up 45% from a year 1.17 % 13.08 % 1.07 % 1.00 % 0.98 % 0.98 % 12.00 % 11.04 % earlier 0.89 % 10.84 % 10.79 % 0.85 % 0.84 % 0.80 % 0.81 % 9.45 % 9.26 % 9.04 % 8.96 % 8.10 % ▪ ROAA of 0.84% for
Slide 8: Balance Sheet Trends
Balance Sheet Trends Total Assets ($mm) Net Loans ($mm) 2,500 2,354 2,000 1,832 2,274 1,769 2,051 2,062 1,568 1,578 2,000 1,600 1,721 1,760 1,317 1,368 1,500 1,200 1,000 800 500 400 0 0 YE 2017 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 YE 2017 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Total Deposits ($mm) Book Value Per Sh
Slide 9: Earnings Profile – First Quarter 2019
Earnings Profile – First Quarter 2019 ▪ Net Operating Diluted EPS (Non- GAAP) increased 15% year over 1Q19 4Q18 1Q18 year (“YoY”) Total Interest Income $26,943 $26,771 $19,378 Total Interest Expense 5,946 5,335 2,567 ▪ Earnings Before Income Taxes increased 45% YoY Net Interest Income 20,997 21,436
Slide 10: Net Interest Income
Net Interest Income ▪ Net Interest Margin (FTE) decreased quarter to quarter primarily due to lower accretion on acquired loans ▪ Compared to a year ago, Earning Asset Yields are up 24 basis points; the Average Cost of Interest-bearing Liabilities is up 63 basis points ▪ Excluding the effect of purc
Slide 11: Noninterest Income
Noninterest Income ▪ Consistent increases in service charges on deposit accounts, and other noninterest income components ▪ Noninterest Income trending upward, though 4Q18 and 1Q19 reported decreased gain on sale of loans and other assets Noninterest Income $2,000,000 $1,500,000 (Loss) Gain on Secur
Slide 12: Noninterest Expense
Noninterest Expense ▪ Efficiency Ratio remained under 70% for the second consecutive quarter while Operating Efficiency Ratio (Non-GAAP) was 64.3% ▪ Salary increases are primarily due to the addition of associates from two completed acquisitions for periods presented, as well as infrastructure build
Slide 13: Attractive Deposit Mix
Attractive Deposit Mix Deposit Composition (03/31/19) Historical Deposit Composition ($mm) $2,500 Noninterest Demand Time 16% Deposits $1,994 $1,922 32% Interest- $2,000 bearing $1,717 $1,707 Demand $635 17% $1,500 $649 Money $1,500 $536 Market and $569 Savings $454 35% $1,000 $698 $642 $633 $570 $4
Slide 14: Overview of Loan Portfolio
Overview of Loan Portfolio Loan Composition (03/31/19) Historical Loan Composition ($mm) Other $2,500 1% Residential RE 22% CRE, Non $2,000 Owner $1,841 Occupied C&I $1,777 18% 26% $1,585 $1,575 $409 $408 $1,500 CRE, $1,374 Owner C&D $356 $352 Occupied 10% $299 $476 23% $488 $1,000 $386 $400 $375 $4
Slide 15: Asset Quality
Asset Quality ▪ Superior asset quality, with Nonperforming Assets at 0.18% of Total Assets compared to the Nonperforming Assets Southeast Peer Median (1) of 0.91% $7,000 0.91% 1.00% ▪ 0.70% Remaining fair value discounts on acquired $3,500 0.18% 0.40% loans are 2.3x the current Allowance For Loan $0
Slide 16: Appendix
Alb, SmartFinancial, Inc. Appendix
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q19 4Q18 3Q18 2Q18 1Q18 Net interest income - ex purchase acct. adj. Net interest income (GAAP) $ 20,997 $ 21,436 $ 18,861 $ 19,538 $ 16,811 Taxable equivalent adjustment 115 93 16 22 12 Net interest income TEY 21,112 21,529 18,877 19,560 16,823 Purchase accounting adjustme
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q19 4Q18 3Q18 2Q18 1Q18 Operating Earnings Net income (GAAP) $ 4,731 $ 6,444 $ 4,324 $ 3,931 $ 3,415 Securities (gains) losses - (2) - 1 - Merger costs 923 1,322 838 1,123 498 Tax charge related to change in tax law and tax benefit - (1,600) - - - Income tax effect of adjus
Slide 19: Investor Contacts
Investor Contacts Billy Carroll Miller Welborn President & CEO Chairman (865) 868-0613 (423) 385-3067 Billy.Carroll@SmartBank.com Miller.Welborn@SmartBank.com SmartFinancial, Inc. 5401 Kingston Pike, Suite 600 Knoxville, TN 37919 19
Slide 20: Alb,
Alb, SmartFinancial, Inc.