Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q4 2020 Earnings Presentation
28 slides from Smartfinancial's earnings presentation, Jan 19, 2021
Slide 1: Investor Call 4Q 2020
INVESTOR CALL 4Q 2020 January 20, 2021, 10:00am Webcast: www.smartbank.com (Investor Relations) Audio Only: 888-317-6003 Confirmation #: 0205038 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: Overview of SmartFinancial
Overview of SmartFinancial 3 ▪ SmartFinancial, Inc. (Nasdaq: SMBK) is a $3.3 billion asset bank holding company headquartered in Knoxville, Tennessee ▪ Operates one subsidiary bank, SmartBank, which was founded in January 2007 ▪ Located primarily in attractive, high-growth markets throughout East/Mi
Slide 4: Culture
Culture 4 We are building a culture where Associates thrive and are empowered to be leaders. The core values that we have established as a company help us operate in unison and have become a critical part of our culture. Our Associates are key to SmartBank’s success. POSITIONING STATEMENT At SmartBa
Slide 5: COVID-19 Update
COVID-19 Update 5 COVID-19 Actions • Pandemic Response Team meets regularly to share latest COVID updates or impacts that we are seeing in all regions across our footprint. • Continue to evaluate markets on a case by case basis as to bank operations or any changes that need to be made to protect ass
Slide 6: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights
Slide 7: Quarterly Highlights
Quarterly Highlights 7 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix ($ in thousands, except per share data) 4Q20 3Q20 Change Net interest income 26,506 $ 26,043 $ 463 $ Provision for loan losses - 2,634 (2,634) Noninteres
Slide 8: Investing in Technology
Investing in Technology 8 Launched: ▪ Launched Zelle payment app – Q2 2020 ▪ Hired EVP | Chief Information Officer – Q2 2020 ▪ Upgrades to BillPay – Q2 2020 ▪ Modernized cloud security, device security, and authentication capabilities – Q3 2020 ▪ New advanced threat protection and information securi
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 $8,786 $8,039 $7,772 $8,700 $7,890 $8,692 $11,912 $11,296 $11,766 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
Slide 10: Performance Trends
Performance Trends 10 $2,274 $2,354 $2,391 $2,390 $2,449 $2,874 $3,266 $3,388 $3,305 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Total Assets, Loans, and Deposits ($ in millions) Assets Loans Deposits
Slide 11: Performance Trends
Performance Trends 11 (1) Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix 1.08 % 0.67 % 0.93 % 0.79 % 1.14 % 1.31 % 1.37 % 1.53 % 1.35 % 1.45 % —% 0.20 % 0.40 % 0.60 % 0.80 % 1.00 % 1.20 % 1.40 % 1.60 % 1.80 % 4Q19 1Q20 2Q20
Slide 12: Performance Trends
Performance Trends 12 (1) Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $22.33 $22.09 $22.57 $22.96 $23.64 $16.82 $16.40 $16.90 $17.27 $17.92 $15.00 $17.00 $19.00 $21.00 $23.00 $25.00 4Q19 1Q20 2Q20 3Q20 4Q20 Book Value pe
Slide 13: Net Interest Income
Net Interest Income 13 3.84% 3.90% 3.63% 3.39% 3.57% 5.36% 5.35% 4.87% 4.71% 4.72% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 4Q19 1Q20 2Q20 3Q20 4Q20 Net Interest Margin Net Interest Margin (FTE) Loan Yield Cost of Funds Interest Bearing Liabilities 4Q20 3Q20 Change Loans, less accretion & PPP fees
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 $2,120 $2,818 $3,495 $4,130 $4,511 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 4Q19 1Q20 2Q20 3Q20
Slide 15: 2021 Noninterest Income Strategic Goals
2021 Noninterest Income Strategic Goals 15 2021 Strategic Goals: • Enhanced CRM and synergy initiatives for increased revenues • Increased efficiency across all units • Digital innovation to enhance customer experience
Slide 16: Operating Noninterest Expense (Non-GAAP)
Operating Noninterest Expense (Non-GAAP) 16 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $15,334 $16,697 $17,329 $18,877 $19,251 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 4Q19 1Q20 2Q2
Slide 17: Attractive Deposit Mix
Attractive Deposit Mix 17 Noninterest demand 24% Interest-bearing demand 23% Money market and savings 33% Time deposits 20% Deposit Composition (12/31/20) 0.00% 0.50% 1.00% 1.50% 2.00% 4Q19 1Q20 2Q20 3Q20 4Q20 Historical Cost of Deposits Cost of Deposits Fed Funds Target Cost of Interest Bearing Lia
Slide 18: Overview of Loan Portfolio
Overview of Loan Portfolio 18 $1,897 $2,139 $2,408 $2,404 $2,382 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 4Q19 1Q20 2Q20 3Q20 4Q20 Historical Loan Composition ($ in millions) C&I C&D CRE, Owner Occupied CRE, Non Owner Occupied Consumer RE C&I 27% C&D 12% CRE, Owner Occupied 19% CRE, Non Owner Occu
Slide 19: Asset Quality
Asset Quality 19 ▪ NPAs increased due to one credit moving to nonaccrual status and transfer of closed branch to ORE ▪ Delinquencies remain at low levels ▪ Asset quality remains strong with nonperforming assets to total assets of 0.31% ▪ Credit quality remains strong with classified loans / total lo
Slide 20: COVID-19 Modified Loans
COVID-19 Modified Loans 20 Source: Company information Note: As of December 31, 2020 Industries with Modifications O/S Balance % of Total Loan Portfolio % of Total Modified Loans Hospitality 10,469 $ 0.4% 60.9% Restaurants 2,983 0.1% 17.3% Overnight Rentals 1,484 0.1% 8.7% Transportation 618 0.0% 3.
Slide 21: Paycheck Protection Program
Paycheck Protection Program 21 ($ in thousands) Source: Company information Note: As of December 31, 2020 PPP Forgiven , 4% PPP Remaining Balances, 96% PPP Forgiveness PPP forgiveness underway; SmartBank SBA team primed for second round funding ▪ Streamlined digital platform for application submissi
Slide 22: Reserve Reconciliation
Reserve Reconciliation 22 0.00% 0.30% 0.60% 0.90% $0 $5 $10 $15 $20 4Q19 1Q20 2Q20 3Q20 4Q20 Total Reserves ($mm) Allowance for Loan Losses Acquired Loan Fair Value Discounts Allowance for Loan Losses / Total Loans ($ in thousands) 4Q19 1Q20 2Q20 3Q20 4Q20 Allowance for Loan Losses - Originated 9,96
Slide 23: Current Capital Position
Current Capital Position 23 Note: Data as of the three months ended each respective quarter Basel III Regulatory Capital Minimum To Be Considered “Well Capitalized” 9.93% 8.96% 8.09% 7.97% 8.41% 0.0% 4.0% 8.0% 12.0% 16.0% 4Q19 1Q20 2Q20 3Q20 4Q20 TCE / TA (%) 10.34% 10.28% 8.83% 8.78% 8.69% 0.0% 4.0
Slide 24: Appendix
ally, SmartFinancial Appendix
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations 25 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 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations 26 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 27: Investor Contact
Investor Contact 27 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
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