Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q4 2024 Earnings Presentation
33 slides from Smartfinancial's earnings presentation, Jan 22, 2025
Slide 1: Investor Call 4Q 2024
INVESTOR CALL 4Q 2024 January 22, 2025, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-833-470-1428 Access Code: 994691 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 or expectations of future events Statements included in this presentation include measures not recognized under U.S. generally accepted account
Slide 3: SmartBank 2024: A Year in Review
SMARTBANK 2024: A YEAR IN REVIEW $ in Millions, except per share data '22 -'24 Balance Sheet / Non-GAAP Revenue Highlights: 2022Y 2023Y 2024Y CAGR3 Total Loans and Leases (Excl. HFS & PPP) $ 3,253.6 $ 3,444.5 $ 3,906.3 10% Robust Loan and Deposit Growth / Funding Annual Net Balance Loan Growth 560.2
Slide 4: Quarterly Highlights: Fourth Quarter 2024
QUARTERLY HIGHLIGHTS: FOURTH QUARTER 2024 $0.57 $5.3 Diluted Earnings Per Share Book Value Per Share Diluted Operating Billion in Total EPS1 Assets $0.57 $0.57 $28.89 $29.04 $0.54 $0.54 $27.07 $23.69 $24.25 $22.29 $22.67 $22.85 9.3% 20% $0.41 $20.76 $22.67 $22.85 $0.37 $20.76 QoQ2 Annualized QoQ Ann
Slide 5: GAAP Key Measure Trends
GAAP KEY MEASURE TRENDS: Net Income: Diluted Earnings Per Share: Total Revenue: $46,813 $ in Thousands $ in Thousands $16, 000 $1 $57, 000 $1 $14, 000 $0.65 $47, 000 $9,756 $0.57 $9,640 $1 $31,951 $12, 000 $1 $37, 000 $10, 000 $1 $8, 000 $27, 000 $0 $6, 000 $0 $17, 000 $4, 000 $0 $2, 000 $7, 000 $0
Slide 6: Non-GAAP Key Measure Trends
NON-GAAP KEY MEASURE TRENDS1: Operating Earnings: Operating Diluted EPS: Operating PPNR Earnings: $14,458 $ in Thousands $ in Thousands $ in Thousands $14, 000 $1 $18, 000 $12,590 $1 $16, 000 $9,832 $0.65 $9,593 $12, 000 $0.57 $1 $14, 000 $10, 000 $1 $12, 000 $8, 000 $1 $10, 000 $0 $8, 000 $6, 000 $
Slide 7: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $5.3 Nashville Knoxville Billion in Total Assets Chattanooga Huntsville $3.9 Billion in Total Birmingham Loans Tuscaloosa Auburn $4.7 Montgomery Billion in Total Deposits Dothan SmartBank Branch Offices Mobile 42 Pensacola Tallahassee Panama City Total B
Slide 8: SmartBank Journey: Looking Ahead
SMARTBANK JOURNEY: LOOKING AHEAD $7 Strategic Focus: Leverage Existing Infrastructure Investments to Drive Profitability and Optimize Efficiency $ in Billions, unless otherwise indicated $6 $5.3 $4.8 $4.6 $4.6 $5 $4 $3.3 $2.4 $3 $2.3 $1.7 $1.1 $2 $1.0 $1 $( 1) 2015 2016 2017 2018 2019 2020 2021 2022
Slide 9: Market Area: Building Density in Attractive Southeast Markets
MARKET AREA: BUILDING DENSITY IN ATTRACTIVE SOUTHEAST MARKETS US Population Migration: Strong Migration into Great Markets Profile by Market Area: Abundant Organic Opportunity 1,2,3 July 1, 2022 to July 1, 2023 $2, 000, 000 1.1% $1, 500, 000 1,423,260 Nashville Knoxville $1, 000, 000 $500, 000 0.2%
Slide 10: Loan Portfolio: Solid Markets Providing Opportunity
LOAN PORTFOLIO: SOLID MARKETS PROVIDING OPPORTUNITY $ in Millions, unless otherwise indicated Total Loans Loan Composition CAGR of 16% Since 2019 History of Consistent Organic Growth $3,906 $4, 500 10. 00% $3,717 $3,906 $3,574 $4, 000 $3,444 $3,478 $3,717 9. 00% 19% $3,574 $3,444 $3,478 19% $3, 500
Slide 11: 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 Concentration Risk Closely Monitored Seasoned Client Base Resi/Comm Retail Land Space 18% Hotel & 10% Resi/Comm Hospitality Land Dev. 32% 14% CRE
Slide 12: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands, unless otherwise indicated 1.50% 350% 250% Nonperforming Assets Commercial Real Estate Concentration $16,000 1.30% 330% $12,619 $14,000 1.10% $12,000 $9,975 $10,088 310% 303% 200% $9,735 0.90% $10,000 $8,995 288% 280% 0.70% 290% 277%
Slide 13: 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 83% Complexion Change as Cost Optimization Occurs $5, 000 $4,686 $4,686 $4,394 $4,317 $4,322 5. 00% $4,394 $4,317 $4,322 $4,268 $4,268 $4, 500 18%
Slide 14: Securities Detail: Stable Cashflow with Increasing Yields
6.00% SECURITIES DETAIL: STABLE CASHFLOW WITH INCREASING YIELDS $ in Millions, unless otherwise indicated Weighted Average Portfolio Yield 5.00% Portfolio Summary $637 Million Book Value 5.3 Year Average Life 3.35% Book Yield 3.3 Year Effective Duration 3.60% 3.59% 3.54% 4.00% $300 ($48) Million Unr
Slide 15: Repricing Schedule: Yield Enhancement on the Horizon
REPRICING SCHEDULE: YIELD ENHANCEMENT ON THE HORIZON Quarterly FYE 2028 & ($ in millions) 1Q25 2Q25 3Q25 4Q25 2026 2027 Beyond Loan Repricing Schedule: Fixed Rate Loans $ 37 $ 32 $ 23 $ 66 $ 313 $ 383 $ 1,107 Weighted Average Yield 5.21% 4.95% 4.84% 4.30% 5.00% 5.17% 5.26% Adjustable Rate Loans $ 12
Slide 16: Liquidity Overview: Prudently Managing Liquidity
LIQUIDITY OVERVIEW: PRUDENTLY MANAGING LIQUIDITY $ in Millions, unless otherwise indicated Robust Liquidity on Hand Other Liquidity Sources Access to a Variety of Funding Total Amount Net $1.4 Billion in Untapped Liquidity Sources Available Current On-Balance Sheet: Used Availability Cash & Cash Equ
Slide 17: Liquidity Management: Margin Inflection Underway
LIQUIDITY MANAGEMENT: MARGIN INFLECTION UNDERWAY $ in Millions, unless otherwise indicated $ in Thousands, unless otherwise indicated $900 Cash and Securities 40.0% Margin / Operating Revenue2 $800 35.0% $690 $46,749 3.8 0% $48, 000 $700 $655 $630 30.0% $629 $609 $600 $44,171 25.0% 3.6 0% $43, 000 $
Slide 18: 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 $2.0 Billion Fixed Rate Loans Interest Income % Change $1.9 Billion Variable Rate Loans • $1.3 Billion Short-Term Variable
Slide 19: 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 $9,139 $8,966 $7,579 $7,321 $7,034 4Q23 1Q24 2Q24 3Q24 4Q24 Serv
Slide 20: Operating Expense: Focus on Expense Containment
OPERATING EXPENSE: FOCUS ON EXPENSE CONTAINMENT $ in Thousands, unless otherwise indicated Operating Efficiency Ratio1 Operating Noninterest Expense1 $32,291 $30,846 73% 73% $28,770 $29,201 72% $28,553 69% 69% 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24 2Q24 3Q24 4Q24 1 Operating Efficiency Ratio Salaries &
Slide 21: 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 8.3% 8.3% 8.4% 8.3% 8.2% 8.0% 7.7% $24.25 7.5% 7.4% 7.5% $24. 00 $22.85 $22.29 5% $22. 00 $21.18 Well $20.76 Capitalized $20. 00 $19.26 $19.17 $19.09 $17.92 $17.
Slide 22: 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 23: Appendix
Wy SmartFinancial APPENDIX
Slide 24: Income Statement: Detailed Fourth Quarter Results
INCOME STATEMENT: DETAILED FOURTH QUARTER RESULTS 4Q24 vs. 3Q24 4Q23 ($ in thousands, except per share data) 4Q24 3Q24 4Q23 % Chg. % Chg. Net Interest Income $ 37,783 $ 35,032 $ 31,517 8% 20% Provision for Credit Losses 2,135 2,575 1,571 Noninterest Income 9,030 9,139 7,579 (1%) 19% Noninterest Expe
Slide 25: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 4Q24 3Q24 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 Operating Earnings Net Income (GAAP) $ 9,641 $ 9,140 $ 8,003 $ 9,358 $ 6,190 $ 2,067 $ 8,836 $ 11,500 Noninterest Income: Securities (Gains) Losses (64) - - - - 6,801 - - Gain on Sale of Branch
Slide 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q21 1Q21 Operating Earnings Net Income (GAAP) $ 13,004 $ 11,543 $ 10,215 $ 8,259 $ 6,655 $ 9,600 $ 8,778 $ 9,756 Noninterest Income: Securities (Gains) Losses (144) - - - - (45) - - Gain on Sale of Bran
Slide 27: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 2024Y 2023Y 2022Y Operating Earnings Net Income (GAAP) $ 36,141 $ 28,593 $ 43,022 Noninterest Income: Securities (Gains) Losses (64) 6,801 (144) Gain on Sale of Branch Building (1,629) - - Noninterest Expenses: Donation of a Former B
Slide 28: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 4Q24 3Q24 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 Tangible Common Equity: Shareholders' Equity (GAAP) $ 491,461 $ 489,023 $ 472,465 $ 466,796 $ 459,886 $ 446,652 $ 444,847 $ 443,399 Less Goodwill And Other Intangible Assets 104,723 105,324 105
Slide 29: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q21 1Q21 Tangible Common Equity: Shareholders' Equity (GAAP) $ 432,452 $ 414,711 $ 420,427 $ 420,042 $ 429,430 $ 424,720 $ 373,393 $ 364,058 Less Goodwill And Other Intangible Assets 109,772 110,460 104
Slide 30: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 2024Y 2023Y 2022Y Tangible Common Equity: Shareholders' Equity (GAAP) $ 491,461 $ 459,886 $ 432,452 Less Goodwill And Other Intangible Assets 104,723 107,148 109,772 Tangible Common Equity (Non-GAAP) $ 386,738 $ 352,738 $ 322,680 Ave
Slide 31: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 4Q24 3Q24 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 Tangible Common Equity (Excluding AOCI): Shareholders' Equity (GAAP) $ 491,461 $ 489,023 $ 472,465 $ 466,796 $ 459,886 $ 446,652 $ 444,847 $ 443,399 Less Goodwill And Other Intangible Assets 10
Slide 32: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 2024Y 2023Y 2022Y 2021Y 2020Y 2019Y Tangible Common Equity (Excluding AOCI): Shareholders' Equity (GAAP) $ 491,461 $ 459,886 $ 432,452 $ 429,430 $ 357,168 $ 312,747 Less Goodwill And Other Intangible Assets 104,723 107,148 109,772 10
Slide 33: 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 33