Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q2 2019 Earnings Presentation
21 slides from Smartfinancial's earnings presentation, Jul 25, 2019
Slide 1: Second Quarter 2019 Earnings Release
Second Quarter 2019 Earnings Release July 24, 2019
Slide 2: Legal Disclaimer
Legal Disclaimer Forward-Looking Statements This news release 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 U.S. federal securities laws. The
Slide 3: Overview of SmartFinancial
Overview of SmartFinancial . SmartFinancial, Inc. (Nasdaq: SMBK) is a $2.4 billion Branch Footprint asset bank holding company headquartered in Knoxville, Tennessee Nashville Knoxville Greensboro Jonesboro . Operates one subsidiary bank, SmartBank, which was founded in 40 January 2007 ARKANSAS TENNE
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. Core Values Act with Integrity Del
Slide 5: Second Quarter Financial Highlights
Second Quarter Financial Highlights
Slide 6: Solid Earnings Track Record
Solid Earnings Track Record $8,000 Capstone Southern Foothills Acquisition Acquisition Acquisition $6,000 $4,000 Net Operating Net Operating Earnings ($000) $2,000 $0 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Net Operating Earnings, Less Accretion Accretion, Net of Tax ($ in thousands) 3Q17 4Q17 1Q18
Slide 7: Performance Trends
Performance Trends . Net Operating Earnings (Non-GAAP) of $5.6 ROAA (%) ROATCE (%) million for the quarter, up 16% from a year 1.56 % 16.78 % earlier 1.17 % 13.06 % 1.07 % 12.00 % 1.00 % 0.98 % 11.04 % 0.98 % 0.96 % 10.84 % 10.79 % 10.31 % 0.85 % 0.84 % 0.82 % 8.96 % 9.45 % 9.26 % . ROAA of 1.56% fo
Slide 8: Balance Sheet Trends
Balance Sheet Trends Total Assets ($mm) Net Loans ($mm) $2,500 $2,000 $2,354 $2,391 $1,832 $1,828 $2,274 $1,769 $2,300 $1,800 $2,062 $2,051 $1,568 $1,578 $2,100 $1,600 $1,900 $1,400 $1,700 $1,200 $1,500 $1,000 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 Total Deposits ($mm) Book Value Per Shar
Slide 9: Earnings Profile – Second Quarter 2019
Earnings Profile – Second Quarter 2019 . Net Interest Income increased over 6% year over year (“YoY”) primarily 2Q19 1Q19 2Q18 due to higher average earning Total Interest Income $27,303 $26,943 $22,993 asset balances Total Interest Expense 6,501 5,946 3,455 Net Interest Income 20,802 20,997 19,538
Slide 10: Net Interest Income
Net Interest Income . Net Interest Margin (FTE) decreased quarter to quarter primarily due to lower accretion on acquired loans and increases in deposit costs . Compared to a year ago, Earning Asset Yields are down 20 basis points; the Average Cost of Interest- bearing Liabilities is up 54 basis poi
Slide 11: Noninterest Income
Noninterest Income . Consistent increases in service charges on deposit accounts, and other noninterest income components . Noninterest Income trending upward, with 2Q19 reporting increased mortgage banking income after decreases in 4Q18 and 1Q19 . Increases in other noninterest income mainly result
Slide 12: Noninterest Expense
Noninterest Expense . Efficiency Ratio remained under 70% for the third consecutive quarter while Operating Efficiency Ratio (Non-GAAP) was 65.56% . Salary increases are primarily due to the addition of associates from two completed acquisitions for periods presented, as well as infrastructure build
Slide 13: Attractive Deposit Mix
Attractive Deposit Mix Deposit Composition (06/30/19) Historical Deposit Composition ($mm) $2,500 Noninterest Demand $1,922 $1,994 $2,012 Time 18% $2,000 Deposits 33% Interest- $1,717 $1,707 bearing $635 $673 Demand $649 17% $1,500 Money $536 $569 Market and Savings 32% $1,000 $698 $648 $642 $633 $5
Slide 14: Overview of Loan Portfolio
Overview of Loan Portfolio Loan Composition (06/30/19) Historical Loan Composition ($mm) $2,500 Other Residential 1% RE 22% CRE, Non $2,000 Owner $1,777 $1,841 $1,837 Occupied C&I 25% 18% $1,585 $1,575 $411 $406 $407 $1,500 CRE, $356 $350 Owner C&D $473 $464 Occupied 11% $488 23% $1,000 $386 $402 $4
Slide 15: Asset Quality
Asset Quality . Superior asset quality, with Nonperforming Assets at 0.17% of Total Assets compared to the Nonperforming Assets Southeast Peer Median (1) of 0.65% $9,000 1.00% . Remaining fair value discounts on acquired $6,000 0.65% 0.70% loans are 2.0x the current Allowance For Loan $3,000 0.17% 0
Slide 16: Summary of Moving Forward Initiatives
Summary of Moving Forward Initiatives The company is Moving Forward with several major initiatives that were planned: Initiatives Completed In-Process . Centralization of operational areas . Centralization of finance group . Bank-wide organizational chart planning to gain efficiencies . Core d
Slide 17: Appendix
SmartFinancial, Inc. Appendix
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q19 1Q19 4Q18 3Q18 2Q18 Net interest income - ex purchase acct. adj. Net interest income (GAAP) $ 20,802 $ 20,997 $ 21,436 $ 18,861 $ 19,538 Taxable equivalent adjustment 116 115 93 16 20 Net interest income TEY 20,918 21,112 21,529 18,877 19,558 Purchase accounting adjustm
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18 4Q17 3Q17 2Q17 Operating Earnings Net income (GAAP) $ 9,121 $ 4,731 $ 6,444 $ 4,324 $ 3,931 $ 3,415 $ 38 $ 1,685 $ 1,648 Securities (gains) losses (33) - (2) - 1 - - (144) - Merger termination fee (6,400) - - - - - - - - Merger costs 1,796 923 1
Slide 20: Investor Contacts
Investor Contacts Billy Carroll Miller Welborn President & CEO Chairman (865) 868-0613 (423) 385-3067 Billy.Carroll@SmartBank.com Miller.Welborn@SmartBank.com SmartFinancial, Inc. 5401 Kingston Pike, Suite 600 Knoxville, TN 37919 20
Slide 21: SmartFinancial, Inc.
SmartFinancial, Inc.