Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q3 2023 Earnings Presentation
24 slides from Smartfinancial's earnings presentation, Oct 24, 2023
Slide 1: Investor Call 3Q 2023
INVESTOR CALL 3Q 2023 October 24, 2023, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-833-470-1428 Access Code: 071225 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: Third Quarter 2023
QUARTERLY HIGHLIGHTS: THIRD QUARTER 2023 $0.43 $160 Diluted Earnings Per Share Book Value Per Share Diluted Operating Million Securities EPS1 Repositioned $26.16 $26.28 $0.68 $0.69 $24.56 $21.84 $21.95 $0.52 $0.52 $20.43 $19.78 $19.94 $18.02 3.1% 5.0% $0.43 $18.02 $19.78 $19.94 QoQ2 Annualized QoQ A
Slide 4: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.8 Nashville Knoxville Billion in Total Assets Chattanooga Huntsville $3.4 Billion in Total Birmingham Loans Tuscaloosa Auburn $4.2 Montgomery Billion in Total Deposits Dothan SmartBank Branch Offices Mobile 42 Pensacola Tallahassee Panama City Total B
Slide 5: Market Area: Targeting Industry Rich Growth Markets
MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS $ in Billions, unless otherwise indicated Legacy Markets1: Strong Relationships / Deep Market Penetration Forbes CAGR: 6% $2 $2.4 $2.3 SMBK Loans $2 $2 $2.1 Top 200 $2 $2 $2.0 $2 Best Places $2 for Business and 12/31/20 12/31/21 12/31/22 9/30/23 Ca
Slide 6: 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 2018 History of Strong Organic Growth $4, 000 10. 00% $3,338 $3,379 $3,254 $3,282 $3,099 $3,338 $3,379 $3, 500 $3,254 $3,282 9. 00% 19% 19% 18% 18% 18% $3, 000
Slide 7: 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 Retail Land Resi/Comm Space 15% Land Dev. Hotel & 14% 11% Multifa
Slide 8: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands, unless otherwise indicated $8, 000 1.50% 350% 250% Nonperforming Assets 1.30% 330% Commercial Real Estate Concentration $6, 000 $5,712 $5,881 1.10% $4,808 $5,021 301% 310% 200% $4,605 0.90% 299% $4, 000 0.70% 290% 287% 285% 285% 0.50%
Slide 9: 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 80% Overall Stability Despite Some Mix Shift $4, 500 $4,230 $4,200 $4,247 $4,022 $4,077 $4,280 $4,230 $4,247 5. 00% $4,200 $4,077 $4, 000 11% 12%
Slide 10: Securities Detail: Acceleration of Principal Return in Q3
60% $200 SECURITIES DETAIL: ACCELERATION OF PRINCIPAL RETURN IN Q3 $ in Millions, unless otherwise indicated $180 Portfolio Summary 50% Principal Cashflow Schedule ~$184 Million Maturing by Q2 ‘24 $160 $709 Million Book Value 4.9 Year Average Life 2.68% Book Yield 3.3 Year Effective Duration $140 40
Slide 11: Repricing Schedule: Yield Enhancement on Horizon
REPRICING SCHEDULE: YIELD ENHANCEMENT ON HORIZON Next Five Quarters FYE 2026 & ($ in millions) 4Q23 1Q24 2Q24 3Q24 4Q24 2025 Beyond Loan Repricing Schedule: Fixed Rate Loans $ 30 $ 29 $ 20 $ 30 $ 26 $ 179 $ 1,667 Weighted Average Yield 5.39% 5.66% 5.48% 5.33% 6.27% 4.46% 4.78% Adjustable Rate Loans
Slide 12: 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 $1.6 Billion in Untapped Liquidity Sources Available Current On-Balance Sheet: Used Availability Cash & Ca
Slide 13: 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% $44,593 $845 $807 $824 $42,958 $42,907 35.0% $800 $770 $43, 000 5.5 0% $667 $
Slide 14: 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 $7,414 , 5.5% $2.0 Billion Fixed Rate Loans Interest Income % Change $1.4 Billion Variable Rate Loans $4,307 , 3.2% • $786
Slide 15: 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 $7,130 $6,981 $6,925 $6,250 3Q22 4Q22 1Q23 2Q23 3Q23 Serv
Slide 16: 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 $27,143 $27,461 $27,529 $27,410 74% 71% 64% 63% 61% 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 1 Operating Efficiency Ratio Salaries &
Slide 17: 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% 8.0% 7.9% 7.3% 7.2% 7.4% 7.1% 7.2% $24. 00 6.5% $21.95 5% $22. 00 $21.18 Well Capitalized $19.94 $20. 00 $19.26 $19.17 $19.09 $17.92 $17.77 $18. 00 $16
Slide 18: 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 19: Appendix
Wy SmartFinancial APPENDIX
Slide 20: Income Statement: Detailed Third Quarter Results
INCOME STATEMENT: DETAILED THIRD QUARTER RESULTS 3Q23 vs. 2Q23 3Q22 ($ in thousands, except per share data) 3Q23 2Q23 3Q22 % Chg. % Chg. Net Interest Income $ 31,006 $ 31,575 $ 36,708 (2%) (16%) Provision for Loan & Lease losses 795 113 974 Noninterest Income 691 7,130 6,250 (90%) (89%) Noninterest
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 3Q23 2Q23 1Q23 4Q22 3Q22 Operating Earnings Net Income (GAAP) $ 2,067 $ 8,836 $ 11,500 $ 13,004 $ 11,543 Noninterest Income: Securities (Gains) Losses 6,801 - - (144) - Noninterest Expenses: Merger Related And Restructuring Expenses
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 3Q23 2Q23 1Q23 4Q22 3Q22 Tangible Common Equity: Shareholders' Equity (GAAP) $ 446,652 $ 444,847 $ 443,399 $ 432,452 $ 414,711 Less Goodwill And Other Intangible Assets 107,792 108,439 109,114 109,772 110,460 Tangible Common Equity (
Slide 23: 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 23
Slide 24: SmartFinancial
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