Slide 1: Investor Call 2Q 2021
INVESTOR CALL 2Q 2021 July 21, 2021, 10:00 a.m. Webcast: www.smartbank.com (Investor Relations) Audio Only: (888) 317-6003 Confirmation #: 5194560 Miller Welborn Chairman of the Board Billy Carroll President & CEO
Slide 2: Legal Disclaimer
Legal Disclaimer Forward-Looking Statements Non-GAAP Financial Measures This presentation may contain statements that are based on management’s current estimates or Statements included in this presentation include Non-GAAP financial measures and should be read along with expectations of future event
Slide 3: Overview of SmartFinancial
Overview of SmartFinancial SmartFinancial, Inc. (Nasdaq: SMBK) is a $3.7 billion asset bank holding company headquartered in Knoxville, Tennessee Operates one subsidiary bank, SmartBank, founded in January 2007 Located primarily in attractive, high-growth markets throughout East/Mid Tennessee, A
Slide 4: Culture
Culture We are building a culture where Associates thrive and are empowered to be leaders. The core values that we have established as a company help us operate in unison and have become a critical part of our culture. Our Associates are key to SmartBank’s success. POSITIONING STATEMENT At SmartBank
Slide 5: 2021 Expansion Initiatives
2021 Expansion Initiatives New Auburn, AL Lending Team Lift-Out 2021 Announced Growth Initiatives Update ▲ SmartBank has added a new Auburn, Alabama commercial ▲ Sevier County Bank Acquisition Update banking team: • YTD performance in-line with budgeted expectations • Team comprised of tenured, Aubu
Slide 6: Diversified Revenue Stream
Diversified Revenue Stream 6
Slide 7: Second Quarter Financial Highlights
Second Quarter Financial Highlights
Slide 8: Quarterly Highlights
Quarterly Highlights ($ in thousands, except per share data) 2Q21 1Q21 2Q20 Net interest income $ 26,897 $ 26,260 $ 25,746 Provision for loan and lease losses (5) 67 2,850 Noninterest income 5,143 5,691 3,511 Noninterest expense 20,797 19,464 18,806 Income tax expense 2,470 2,664 1,427 Net income 8,
Slide 9: Performance Trends
Performance Trends Total Assets, Loans and Leases, and Deposits ($ in millions) $4,000 $3,654 $3,557 $3,500 $3,388 $3,266 $3,305 $3,000 $2,874 $2,390 $2,449 $2,500 $2,000 $1,500 $1,000 $500 $- 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Assets Loans and Leases Deposits 9
Slide 10: Performance Trends
Performance Trends ROAA (%): Reported, Operating, Operating PTPP ROAA 1.80% 1.60% 1.53% 1.52% 1.45% 1.35% 1.30% 1.40% 1.14% 1.19% 1.20% 1.01% 1.00% 0.93% 0.79% 0.80% 0.60% 0.40% 0.20% 0.00% 2Q20 3Q20 4Q20 1Q21 2Q21 ROAA Operating ROAA ⁽¹⁾ Operating PTPP ROAA ⁽¹⁾ ROATCE (%) 16.0% 14.5% 13.7% 14.0% 12
Slide 11: Performance Trends
Performance Trends Book Value per Share $25.00 $24.71 $24.10 $23.64 $22.96 $23.00 $22.57 $21.00 $18.69 $19.00 $18.39 $17.92 $17.27 $16.90 $17.00 $15.00 2Q20 3Q20 4Q20 1Q21 2Q21 Book Value Tangible Book Value ⁽¹⁾ 70.0% Efficiency Ratio (%) 64.3% 64.9% 65.0% 63.5% 63.4% 60.9% 60.0% 55.0% 50.0% 45.0% 2
Slide 12: Balance Sheet / Margin Complexion
Balance Sheet / Margin Complexion Loan Composition Net Interest Margin ($ in billions) 2Q20 2Q21 6.00% 1% 3% 4.87% 4.71% 4.72% 5.00% 4.67% 4.52% 19% 18% 20% 26% 4.00% 3.63% 3.57% 3.39% 3.48% 3.29% 3.00% $2.4 $2.5 12% 23% 12% 2.00% 27% 20% 1.00% 19% 0.00% 2Q20 3Q20 4Q20 1Q21 2Q21 Net Interest Margin
Slide 13: Noninterest Income
Noninterest Income Operating Noninterest Income (Non-GAAP) ($ in thousands) $6,000 $5,691 $5,500 $5,143 $4,511 $5,000 $4,500 $4,130 $4,000 $3,495 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 2Q20 3Q20 4Q20 1Q21 2Q21 Service charges on deposit accounts Mortgage banking income Insurance commissio
Slide 14: Noninterest Expense
Noninterest Expense Operating Noninterest Expense (Non-GAAP) ($ in thousands) $22,000 $20,425 $20,000 $19,251 $19,361 $18,877 $18,000 $17,329 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- 2Q20 3Q20 4Q20 1Q21 2Q21 Salaries & benefits Occupancy & equipment Data processing & technology
Slide 15: Asset Quality
Asset Quality Nonperforming Assets Delinquent and Nonaccruals / Total Loans and Leases ($ in thousands) ($ in thousands) $20,000 1.50% $20,000 1.80% $18,000 1.30% 1.60% $16,000 $15,000 1.40% 1.10% $14,000 $11,756 1.20% $12,000 0.90% $9,005 $9,606 $10,000 1.00% $10,000 0.70% $6,089 $6,699 0.80% $8,00
Slide 16: Paycheck Protection Program
Paycheck Protection Program 2020 PPP 2020 PPP Vintage Forgiveness Originated O/S Balance Forgiven # of Loans 2,957 214 2,743 Total Loan Balance $ 300,789 $ 40,473 $ 260,316 Total Fees $ 10,068 $ 131 2021 PPP 2021 PPP Vintage Forgiveness Originated O/S Balance Forgiven # of Loans 1,801 1,801 Total Lo
Slide 17: Reserve Reconciliation
Reserve Reconciliation ($ in thousands) 2Q20 3Q20 4Q20 1Q21 2Q21 Allowance for Loan and Lease Losses - Originated $ 14,590 $ 16,704 $ 16,464 $ 16,412 $ 16,619 Allowance for Loan and Lease Losses - Acquired 1,664 2,113 1,882 1,958 1,691 Acquired Fair Value Discounts 16,187 15,141 14,467 12,951 12,982
Slide 18: Current Consolidated Capital Position
Current Consolidated Capital Position TCE / TA (%) (𝟏) Leverage Ratio (%) 16.0% 16.0% 12.0% 12.0% 8.41% 8.83% 8.78% 8.69% 8.55% 8.09% 7.97% 8.00% 7.93% 8.10% 8.0% 8.0% Well Cap. 5% 4.0% 4.0% 0.0% 0.0% 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21 2Q21 CET1 Ratio (%) Total Capital Ratio (%) 16.0%…
Slide 19: Appendix
ally, SmartFinancial Appendix
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands, except per share data) 2Q21 1Q21 4Q20 3Q20 2Q20 Operating Earnings Net income (GAAP) $ 8,778 $ 9,756 $ 9,030 $ 6,395 $ 6,174 Noninterest income: Securities (gains) losses - - - 9 (16) ADECA termination proceeds (1) - - (465) - - Noninterest expenses: Merger r
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands, except per share data) 2Q21 1Q21 4Q20 3Q20 2Q20 Tangible Common Equity: Shareholders' equity (GAAP) $ 373,393 $ 364,058 $ 357,168 $ 349,789 $ 343,488 Less goodwill and other intangible assets 90,966 86,350 86,471 86,710 86,327 Tangible Common Equity (Non-GAAP
Slide 22: Investor Contact
Investor Contact Billy Carroll Miller Welborn President & CEO Chairman 865.868.0613 423.385.3067 billy.carroll@smartbank.com miller.welborn@smartbank.com 5401 Kingston Pike, Suite 600 Knoxville, TN 37919 22
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