Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q4 2021 Earnings Presentation
24 slides from Smartfinancial's earnings presentation, Jan 25, 2022
Slide 1: Investor Call 4Q 2021
INVESTOR CALL 4Q 2021 January 25, 2022, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-844-200-6205 Access Code: 574606 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: 2021 Achievements: A Robust Year of Progress
2021 ACHIEVEMENTS: A ROBUST YEAR OF PROGRESS SIGNIFICANT YEAR OF STRATEGIC INVESTMENT: BY THE NUMBERS: 2021 VS. 2020 $ in Millions, except per share data $4,612 $2,641 ACQUISITION: $3,305 40% 26% SIGNIFICANTLY ENHANCED SEVIER COUNTY MARKET DENSITY $2,093 BETTER THAN PROJECTED OPERATIONAL EFFICIE
Slide 4: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.6 NASHVILLE KNOXVILLE BILLION IN TOTAL ASSETS HUNTSVILLE CHATTANOOGA $2.7 BILLION IN TOTAL BIRMINGHAM LOANS TUSCALOOSA AUBURN $4.0 MONTGOMERY BILLION IN TOTAL DEPOSITS DOTHAN LEGACY SMARTBANK BRANCH OFFICES MOBILE TALLAHASSEE NEW SMARTBANK BRANCH OFFI
Slide 5: Market Area: Targeting Industry Rich Growth Markets
MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS SMARTBANK IS FOCUSED ON BUILDING MUSCLE IN ITS EXPANDING, FAST GROWING SOUTHEAST MARKET AREAS EXPANDING MARKETS 127% 14% 0.5% LARGER DEPOSIT BASE HIGHER MEDIAN HOUSEHOLD INCOME FASTER PROJECTED POPULATION GROWTH VS. LEGACY MARKETS1 51% 2.4% >20% LA
Slide 6: Quarterly Highlights: Fourth Quarter 2021
QUARTERLY HIGHLIGHTS: FOURTH QUARTER 2021 $0.52 $4.6 EARNINGS PER SHARE BOOK VALUE PER SHARE DILUTED OPERATING BILLION IN TOTAL EPS1 ASSETS $0.59 $0.61 $0.61 $0.63 $25.56 $25.28 $23.64 $0.52 $19.03 $19.26 $17.92 5% 12% $0.40 QOQ2 ANNUALIZED QOQ ANNUALIZED TANG. BOOK VALUE ORGANIC LOAN3 PER SHARE GRO
Slide 7: Balance Sheet: Continued Balance Sheet Expansion
BALANCE SHEET: CONTINUED BALANCE SHEET EXPANSION $ in Millions TOTAL LOANS TOTAL DEPOSITS CAGR1 OF 20% SINCE 2017 LOANS TO DEPOSITS R ATIO OF 67% $3 , 0 00 10 . 0 0% $ 4, 50 0 3 . 0 0% $2,653 $2,693 $4,022 $3,799 $ 4, 00 0 $2,487 $2,468 9 . 0 0% $2 , 5 00 $2,382 2 . 5 0% $ 3, 50 0 $3,139 8 . 0 0% $3
Slide 8: Loan Portfolio: Strong Organic Loan Growth
LOAN PORTFOLIO: STRONG ORGANIC LOAN GROWTH $ in Millions LOAN COMPOSITION QUARTERLY LOAN GROWTH ORGANIC GROWTH DESPITE 3% QOQ NET NEW LOAN GROWTH1 MARKET HEADWINDS $2,693 TOTAL 3%, $76 $2,653 3% $2,487 $2,468 $2,382 18% 18% LEASES & OTHER 1%, $0 17% 18% 19% 10% 12% 11% 12% CONSUMER RE (0%), $(1) 12%
Slide 9: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands NONPERFORMING ASSETS DELINQUENT AND NONACCRUALS / TOTAL LOANS $ 1 4 ,0 0 0 1 .5 0 % $ 1 4 ,0 0 0 1 .5 0 % $ 1 2 ,0 0 0 1 .3 0 % $ 1 2 ,0 0 0 $11,756 1 .3 0 % $10,401 $10,180 $9,606 1 .1 0 % 1 .1 0 % $8,991 $ 1 0 ,0 0 0 $ 1 0 ,0 0 0 $7,
Slide 10: Paycheck Protection Program (PPP): Final Update
PAYCHECK PROTECTION PROGRAM (“PPP”): FINAL UPDATE 2020 PPP Vintage PPP Remaining Balance, 0% Originated Acquired O/S Balance Forgiven # of Loans 2,957 25 10 2,972 % of Total 0% 100% Total Loan Balance $ 300,789 $ 2,207 $ 1,339 $ 301,658 % of Total 0% 100% PPP Forgiven, Total Fees $ 10,068 $ - 100% 2
Slide 11: Reserve Reconciliation
RESERVE RECONCILIATION: $ in Thousands $19,295 $19,352 $18,346 $18,370 $18,310 $ 2 0 ,0 0 2 .0 0 % $ 1 8 ,0 0 $15,483 $14,467 $ 1 6 ,0 0 1 .5 0 % $ 1 4 ,0 0 $12,951 $12,982 $13,001 $ 1 2 ,0 0 0.96% $ 1 0 ,0 0 1 .0 0 % 0.91% 0.86% 0.76% $ 8 ,0 0 0 0.74% $ 6 ,0 0 0 0 .5 0 % $ 4 ,0 0 0 $ 2 ,0 0 0 $ - 0
Slide 12: Deposit Portfolio: Continued Core Deposit Growth
DEPOSIT PORTFOLIO: CONTINUED CORE DEPOSIT GROWTH $ in Millions DEPOSIT COMPOSITION QUARTERLY DEPOSIT GROWTH CORE DEPOSIT GROWTH OUTPACING 6% QOQ NET NEW DEPOSIT GROWTH TIME DEPOSIT CONTRACTION $4,022 $3,799 TOTAL 6%, $223 14% 15% $3,139 $3,048 $2,805 16% TIME DEPOSITS (2%), $(11) 17% 37% 20% 37% 36%
Slide 13: Liquidity Utilization: Margin Management While Driving Revenue
LIQUIDITY UTILIZATION: MARGIN MANAGEMENT WHILE DRIVING REVENUE $ in Millions $ in Thousands CASH AND SECURITIES MARGIN / OPERATING REVENUE $ 1 ,2 0 0 DEPLOYING EXCESS FUNDING 5 0 .0 % MAINTAINING REVENUE DESPITE $1,091 $1,045 4 5 .0 % CHALLENGING MARGIN ENVIRONMENT $ 1 ,0 0 0 5 .0 0 % $ 4 0 ,0 0 0 4
Slide 14: Noninterest Revenue Details: Growing Fee Income
NONINTEREST REVENUE DETAILS: GROWING FEE INCOME $ in Thousands OPERATING NONINTEREST INCOME1 DIFFERENTIATED REVENUE STREAMS CONTINUING TO STRENGTHEN BUILDING A FAMILY OF DIVERSIFIED REVENUE GENERATORS $6,806 $6,264 $5,691 $5,143 $4,511 4Q20 1Q21 2Q21 3Q21 4Q21 SERVICE CHARGES ON DEPOSIT ACCOUNTS MOR
Slide 15: Operating Expense: Investing in Growth
OPERATING EXPENSE: INVESTING IN GROWTH $ in Thousands OPERATING EFFICIENCY R ATIO OPERATING NONINTEREST EXPENSE1 EXECUTING ON MARKET EXPANSION OPPORTUNITIES ELEVATED EXPENSES RELATED TO ACQUISITION AND LIFT-OUTS $25,061 $22,845 68% $20,425 $19,251 $19,361 63% 62% 61% 60% 4Q20 1Q21 2Q21 3Q21 4Q21 4Q2
Slide 16: Operating Expense: Technology Initiatives
OPERATING EXPENSE: TECHNOLOGY INITIATIVES PLATFORM ENHANCEMENTS TO EMBRACE A CHANGING REMOTE WORKFORCE ENVIRONMENT MASSIVE EXPANSION OF HIRING POOL FOR MOST OPERATIONAL AREAS: LOAN PROCESSING, FINANCE, HR, DEPOSIT OPERATIONS & IT Enhanced work Branch Treasury Teller ATM fleet from home network Manag
Slide 17: Capital: Well Capitalized – Building Book Value
CAPITAL: WELL CAPITALIZED – BUILDING BOOK VALUE TCE / TA1 LEVERAGE R ATIO BUILDING SHAREHOLDER VALUE TANGIBLE BOOK VALUE PER SHARE1 $ 2 1 .0 0 8.7% 8.6% 8.4% 8.4% 8.0% 7.9% 8.1% $19.03 $19.26 7.5% 7.5% $18.69 7.2% $18.39 $ 1 9 .0 0 $17.92 5% $ 1 7 .0 0 $16.82 WELL CAPITALIZED $ 1 5 .0 0 $14.64 $13.9
Slide 18: Why SmartBank: Investment Highlights
WHY SMARTBANK: INVESTMENT HIGHLIGHTS ENGAGED MANAGEMENT TEAM $ LOW-COST 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 Fourth Quarter Results
INCOME STATEMENT: DETAILED THIRD QUARTER RESULTS 4Q21 vs. 3Q21 4Q20 ($ in thousands, except per share data) 4Q21 3Q21 4Q20 % Chg. % Chg. Net Interest Income $ 29,855 $ 30,382 $ 26,506 (2%) 13% Provision for Loan & Lease losses 422 1,149 - Noninterest Income 6,806 6,309 4,976 8% 37% Noninterest Expen
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, except per share data 4Q21 3Q21 2Q21 1Q21 4Q20 Operating Earnings 1. Note: “ADECA” represents a loan program Net Income (GAAP) $ 6,655 $ 9,600 $ 8,778 $ 9,756 $ 9,030 administered by the Alabama Department of Noninterest Income: Economic and Community Affairs
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, except per share data 4Q21 3Q21 2Q21 1Q21 4Q20 Tangible Common Equity: 1. Book value per share is computed by dividing total Shareholders' Equity (GAAP) $ 429,430 $ 424,720 $ 373,393 $ 364,058 $ 357,168 stockholders’ equity by common shares Less Goodwill And O
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 : L =
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