Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q1 2021 Earnings Presentation
27 slides from Smartfinancial's earnings presentation, Apr 20, 2021
Slide 1: Investor Call 1Q 2021
INVESTOR CALL 1Q 2021 April 21, 2021, 10:00am Webcast: www.smartbank.com (Investor Relations) Audio Only: 888-317-6003 Confirmation #: 6293687 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 Litigat
Slide 3: Overview of SmartFinancial
Overview of SmartFinancial 3 Financial data as of or for the three months ended 3/31/21 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix SmartFinancial, Inc. (Nasdaq: SMBK) is a $3.6 billion asset bank holding company headqua
Slide 4: Culture
Culture We are building a culture where Associates thrive and are empowered to be leaders. The core values that we have established as a company help us operate in unison and have become a critical part of our culture. Our Associates are key to SmartBank’s success. POSITIONING STATEMENT At SmartBank
Slide 5: Sevier County Bank: A Multi-Generational Legacy
Sevier County Bank: A Multi-Generational Legacy 5 CRE 55% Cons. RE 20% C&D 5% C&I/Ag 9% Cons./ Other 11% NIB 13% IB Non- Time 51% Time 36% ▲ Founded in 1909, Sevier County Bank is a historic community bank with a legacy of long-term client relationships ▲ 2019 recapitalization accompanied by complim
Slide 6: Key Transaction Terms
Key Transaction Terms 6 ▲ SVRH to merge into SMBK, followed by the merger of Sevier County Bank into SmartBank ▲ 100% stock consideration; cash election for shareholders with <20,000 shares (~10% of shares)1 ▲ Tax-free reorganization at the corporate level ▲ Fixed exchange ratio ▲ SVRH shareholders
Slide 7: New Regional President and Commercial Banking Lift-Out Adds Top-Tier Talent to the Gulf Coast
7 New Regional President and Commercial Banking Lift-Out Adds Top-Tier Talent to the Gulf Coast Attractive Gulf Coast Market Area Robust Talent Expansion - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Destin Mobile Pensacola Fairhope SMBK* 2021 - 2026 Av erage HHI Growth (%) Metropolitan Statistical Area - 1
Slide 8: First Quarter Financial Highlights
First Quarter Financial Highlights
Slide 9: Quarterly Highlights
Quarterly Highlights 9 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix ($ in thousands, except per share data) 1Q21 4Q20 Change Net interest income 26,260 $ 26,506 $ (246) $ Provision for loan losses 67 - 67 Noninterest inco
Slide 10: Performance Trends: Total Assets, Loans, and Deposits
Performance Trends 10 $2,391 $2,390 $2,449 $2,874 $3,266 $3,388 $3,305 $3,557 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 Assets Loans Deposits Total Assets, Loans, and Deposits ($ in millions)
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 0.67% 0.93% 0.79% 1.14% 1.19% 1.37% 1.53% 1.35% 1.45% 1.52% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 1Q20 2Q20 3Q20 4Q20 1Q21 ROAA
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 $22.09 $22.57 $22.96 $23.64 $24.10 $16.40 $16.90 $17.27 $17.92 $18.39 $15.00 $17.00 $19.00 $21.00 $23.00 $25.00 1Q20 2Q20 3Q20 4Q20 1Q21 Book Value Ta
Slide 13: Net Interest Income
Net Interest Income 13 3.90% 3.63% 3.39% 3.57% 3.48% 5.35% 4.87% 4.71% 4.72% 4.67% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 1Q20 2Q20 3Q20 4Q20 1Q21 Net Interest Margin (FTE) Loan Yield Cost of Funds Interest Bearing Liabilities Average Yields and Rates Net Interest Margin Liquidity Funding Sources
Slide 14: Noninterest Income
Noninterest Income 14 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix $2,818 $3,495 $4,130 $4,511 $5,691 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 1Q20 2Q20 3Q20 4Q20 1Q21 Service c
Slide 15: Noninterest Income Strategic Goals
Noninterest Income Strategic Goals 15 Enhanced CRM and synergy initiatives for increased revenues Increased efficiency across all units Digital innovation to enhance customer experience
Slide 16: Noninterest Expense
Noninterest Expense 16 Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix Operating Noninterest Expense (Non-GAAP) ($ in millions) $16,697 $17,329 $18,877 $19,251 $19,361 $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $
Slide 17: Attractive Deposit Mix
Attractive Deposit Mix 17 Noninterest Demand 26% Interest-Bearing Demand 22% Money Market and Savings 35% Time Deposits 17% Deposit Composition (3/31/21) $2,342 $2,540 $2,652 $2,805 $3,048 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 1Q20 2Q20 3Q20 4Q20 1Q21 Noninterest Demand Interest-Bearing
Slide 18: Overview of Loan Portfolio
Overview of Loan Portfolio 18 Loan Composition (3/31/21) Historical Loan Composition ($ in millions) CRE Ratios C&I 28% C&D 12% CRE, Owner Occupied 19% CRE, Non Owner Occupied 24% Consumer RE 17% $2,139 $2,408 $2,404 $2,382 $2,487 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 1Q20 2Q20 3Q20 4Q20 1Q21 C
Slide 19: Asset Quality
Asset Quality 19 Credit Quality ▪ COVID-19 modified loans declined to 0.07% of the total loan portfolio ▪ COVID-19 modified loans in the hospitality and restaurant segments declined to 0.00% of the total loan portfolio ▪ Asset quality remains strong with nonperforming assets to total assets of 0.29%
Slide 20: Paycheck Protection Program
Paycheck Protection Program 20 2020 PPP Vintage ($ in thousands) 2021 PPP Vintage ($ in thousands) Source: Company information Note: As of March 31, 2021 PPP Forgiven, 27% PPP Remaining Balance, 73% Originated O/S Balance Forgiven # of Loans 2,957 2,479 478 Total Loan Balance 300,789 $ 218,767 $ 82,
Slide 21: Reserve Reconciliation
Reserve Reconciliation 21 0.00% 0.30% 0.60% 0.90% $- $5 $10 $15 $20 1Q20 2Q20 3Q20 4Q20 1Q21 Allowance for Loan Losses Acquired Loan Fair Value Discounts Allowance for Loan Losses / Total Loans Total Reserves ($ in millions) ($ in thousands) 1Q20 2Q20 3Q20 4Q20 1Q21 Allowance for Loan Losses - Origi
Slide 22: Current Capital Position
Current Capital Position 22 CET1 Ratio (%) Basel III Regulatory Capital Minimum To Be Considered “Well Capitalized” Note: Data as of the three months ended each respective quarter 8.96% 8.09% 7.97% 8.41% 8.00% 0.0% 4.0% 8.0% 12.0% 16.0% 1Q20 2Q20 3Q20 4Q20 1Q21 TCE / TA (%) 10.28% 8.83% 8.78% 8.69%
Slide 23: Appendix
ally, SmartFinancial Appendix
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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 av
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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 thousands
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
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