Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Piper Sandler East Coast Financial Services Conference 2020
27 slides from Smartfinancial's conference presentation, Nov 6, 2020
Slide 1: Piper Sandler East Coast Financial Services Conference
Piper Sandler East Coast Financial Services Conference November 9-10, 2020 Miller Welborn Chairman of the Board Billy Carroll President & CEO
Slide 2: Legal Disclaimer
Legal Disclaimer 2 Forward-Looking Statements This presentation may contain statements that are based on management’s current estimates or expectations of future events or future results, and that may be deemed to constitute forward-looking statements as defined under the Private Securities Litigati
Slide 3: SmartFinancial Markets
Wy /, SmartFinancial Markets: 3 TENNESSEE ALABAMA FLORIDA
Slide 4: SmartBank History
lp, SmartFinancial SmartBank History 4 service. SmartBank opened its frst office in January 2007 in ane fog. emese and has eganded its footprint to total. Tennessee, Alabam: brane fur |___mg m8 m2 the F Parmar
Slide 5: Executive Team
ENECUTIVE ma BA dimaih in a 0O8' a4) ais lea AEGON | ay | mesiocns) P| MIKE HONEYCUTT ROBERT KUHN BARRY WATSON
Slide 6: Culture
Culture 6 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 SmartBa
Slide 7: Third Quarter Financial Highlights
Third Quarter Financial Highlights
Slide 8: Quarterly Highlights
Quarterly Highlights 8 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix ($ in thousands, except per share data) 3Q20 2Q20 Change Net interest income 26,043 $ 25,746 $ 297 $ Provision for loan losses 2,634 2,850 (216) Noninter
Slide 9: Operating PTPP Earnings
Operating PTPP Earnings 9 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $6,770 $8,786 $8,039 $7,772 $8,700 $7,890 $8,692 $11,912 $11,296 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Slide 10: Performance Trends
Performance Trends 10 $2,051 $2,274 $2,354 $2,391 $2,390 $2,449 $2,874 $3,266 $3,388 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Total Assets, Loans, and Deposits ($ in millions) Assets Loans Deposits
Slide 11: Performance Trends: ROAA and ROATCE
Performance Trends 11 (1) Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix 1.02 % 1.08 % 0.67 % 0.93 % 0.79 % 1.47 % 1.31 % 1.37 % 1.53 % 1.35 % —% 0.20 % 0.40 % 0.60 % 0.80 % 1.00 % 1.20 % 1.40 % 1.60 % 1.80 % 3Q19 4Q19 1Q20
Slide 12: Performance Trends: Book Value and Efficiency Ratio
Performance Trends 12 (1) Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $21.93 $22.33 $22.09 $22.57 $22.96 $16.37 $16.82 $16.40 $16.90 $17.27 $15.00 $18.00 $21.00 $24.00 3Q19 4Q19 1Q20 2Q20 3Q20 Book Value per Share Book V
Slide 13: Net Interest Income
Net Interest Income 13 3Q20 2Q20 Change Loans, less accretion & PPP fees 4.10% 4.25% (0.15%) Accretion 0.16% 0.15% 0.01% PPP Fees 0.30% 0.47% (0.17%) Loans including fees 4.71% 4.87% (0.16%) Loans held for sale 5.57% 4.28% 1.29% Taxable securities 1.64% 1.94% (0.30%) Tax-exempt securities (FTE) 2.32
Slide 14: Operating Noninterest Income (Non-GAAP)
Operating Noninterest Income (Non-GAAP) 14 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $2,195 $2,120 $2,818 $3,495 $4,130 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 3Q19 4Q19 1Q20 2Q20 3Q20 Operating
Slide 15: Operating Noninterest Expense (Non-GAAP)
Operating Noninterest Expense (Non-GAAP) 15 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $14,635 $15,334 $16,697 $17,329 $18,877 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 3Q19 4Q19 1Q2
Slide 16: Attractive Deposit Mix
Attractive Deposit Mix 16 Noninterest demand 25% Interest-bearing demand 20% Money market and savings 33% Time deposits 22% Deposit Compostion (9/30/20) 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3Q19 4Q19 1Q20 2Q20 3Q20 Historical Cost of Deposits Cost of Deposits Fed Funds Target Cost of Interest Bearing
Slide 17: Overview of Loan Portfolio
Overview of Loan Portfolio 17 C&I 27% C&D 11% CRE, Owner Occupied 20% CRE, Non Owner Occupied 23% Consumer RE 18% Other 1% Loan Composition (9/30/20) $1,865 $1,897 $2,139 $2,408 $2,404 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 3Q19 4Q19 1Q20 2Q20 3Q20 Historical Loan Composition ($mm) C&I C&D CRE,
Slide 18: Asset Quality
Asset Quality 18 $5,388 $7,156 $15,821 $9,005 $6,089 0.29% 0.38% 0.74% 0.37% 0.25% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% $0 $5,000 $10,000 $15,000 $20,000 3Q19 4Q19 1Q20 2Q20 3Q20 Delinquent and Nonaccruals / Total Loans ($ in thousands) Total Delinquent and Nonaccrual Loans Total De
Slide 19: COVID-19 Modified Loans
COVID-19 Modified Loans 19 Source: Company information Note: As of October 31, 2020 • Outstanding COVID-19 modified loan balance at the end of October totals approximately $57m • Decrease of approximately $176m from prior month • 2nd modification O/S balance within Hospitality industry attributable
Slide 20: Paycheck Protection Program
Paycheck Protection Program 20 Client, 67.8% Non-Client, 32.2% Total PPP Loans: Client vs. Non-Client ($ in thousands) Source: Company information Note: As of September 30, 2020 State Loan Amount Loan Count Client Loan Amount Non-Client Loan Amount Alabama $59,253 557 40,174 $ 19,079 $ Florida 21,72
Slide 21: Reserve Reconciliation
Reserve Reconciliation 21 ($ in thousands) 3Q19 4Q19 1Q20 2Q20 3Q20 Allowance for Loan Losses - Originated 9,674 $ 9,969 $ 12,412 $ 14,590 $ 16,704 $ Allowance for Loan Losses - Acquired 118 274 1,019 1,664 2,113 Acquired Loan Fair Value Discounts 16,784 15,348 17,237 16,187 15,141 Total Reserves 26
Slide 22: Current Capital Position
Current Capital Position 22 Note: Data as of the three months ended each respective quarter Basel III Regulatory Capital Minimum To Be Considered “Well Capitalized” 9.88% 9.93% 8.96% 8.09% 7.97% 0.0% 4.0% 8.0% 12.0% 16.0% 3Q19 4Q19 1Q20 2Q20 3Q20 10.02% 10.34% 10.28% 8.83% 8.78% 0.0% 4.0% 8.0% 12.0%
Slide 23: Appendix
ally, SmartFinancial Appendix
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations 24 1. Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets. 2. Operating PTPP return on average assets (Non-GAAP) is the annualized operating PTPP earnings (Non-GAAP) divided by average assets. 3. Return on a
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations 25 1. Book value per share is computed by dividing total stockholders’ equity by common shares outstanding. Tangible book value per share is computed by dividing total stockholders’ equity, less goodwill and other intangible assets by common shares outstanding ($ in thousand
Slide 26: Investor Contact
Investor Contact 26 Billy Carroll President & CEO 865.868.0613 billy.carroll@smartbank.com Miller Welborn Chairman 423.385.3067 miller.welborn@smartbank.com 5401 Kingston Pike, Suite 600 Knoxville, TN 37919
Slide 27: Slide 27
SmartFinancial — Piper Sandler East Coast Financial Services Conference 2020 on 6ix