Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q3 2019 Earnings Presentation
21 slides from Smartfinancial's earnings presentation, Oct 21, 2019
Slide 1: Third Quarter 2019 Earnings Release
Third Quarter 2019 Earnings Release October 22, 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: Third Quarter Financial Highlights
Third Quarter Financial Highlights
Slide 6: Solid Earnings Track Record
Solid Earnings Track Record $8,000 Capstone Southern Foothills Acquisition Acquisition Acquisition $6,000 GAAP) - $4,000 $2,000 Net Operating Net (Non Operating Earnings ($000) $0 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Net Operating Earnings, Less Accretion Accretion, Net of Tax ($ in thousand
Slide 7: Performance Trends
Performance Trends . Net Operating Earnings (Non-GAAP) of $6.0 ROAA (%) ROATCE (%) million for the quarter, up 21% from a year 1.56 % 16.78 % earlier 1.17 % 13.09 % 1.07 % 12.00 % 0.98 % 0.98 % 1.01 % 1.02 % 0.96 % 10.84 % 10.79 % 10.31 % 10.52 % 10.61 % 0.85 % 0.84 % 9.45 % 9.26 % . ROAA of 1.01% f
Slide 8: Balance Sheet Trends
Balance Sheet Trends Total Assets ($mm) Net Loans ($mm) $2,500 $2,000 $2,354 $2,391 $2,390 $1,832 $1,828 $1,858 $2,274 $1,769 $2,300 $1,800 $1,578 $2,051 $2,100 $1,600 $1,900 $1,400 $1,700 $1,200 $1,500 $1,000 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Total Deposits ($mm) Book Value Per Shar
Slide 9: Earnings Profile – Third Quarter 2019
Earnings Profile – Third Quarter 2019 . Net Interest Income increased over 12% year-over-year (“YoY”) due to ($ in thousands, expect per share data) 3Q19 2Q19 3Q18 higher average earning asset Total Interest Income $27,344 $27,303 $23,068 balances Total Interest Expense 6,204 6,501 4,208 Net Interes
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 yield on federal funds and other investments . Compared to a year ago, Earning Asset Yields are up 2 basis points; the Average Cost of Interest-bearing Liabilities is u
Slide 11: Noninterest Income
Noninterest Income . Consistent increases in service charges on deposit accounts, and other noninterest income components . All noninterest income components for 2019 are trending upward Noninterest Income $2,400,000 $1,800,000 Gain (Loss) on Securities, Net $1,200,000 Other Noninterest Income Mortg
Slide 12: Noninterest Expense
Noninterest Expense . Efficiency Ratio remained under 70% for the fourth consecutive quarter while Operating Efficiency Ratio (Non-GAAP) was 62.42% . Salary increases are driven by our continued investment in hiring talented revenue producing associates in order to complement our strategic initiativ
Slide 13: Attractive Deposit Mix
Attractive Deposit Mix Deposit Composition (09/30/19) Historical Deposit Composition ($mm) $2,500 Noninterest Demand Time 18% $1,994 $2,012 $1,998 Deposits $2,000 32% $1,922 Interest- $1,707 bearing $635 $673 $647 Demand $649 Money $1,500 18% $569 Market and Savings 32% $1,000 $698 $648 $635 $642 $5
Slide 14: Overview of Loan Portfolio
Overview of Loan Portfolio Loan Composition (09/30/19) Historical Loan Composition ($mm) Other $2,500 <1% Consumer RE 22% CRE, Non $2,000 Owner $1,837 $1,868 Occupied C&I $1,777 $1,841 25% 18% $1,585 $411 $406 $406 $407 $1,500 CRE, $350 Owner C&D Occupied 12% $473 $464 $468 $488 23% $1,000 $402 $416
Slide 15: Asset Quality
Asset Quality . Superior asset quality, with Nonperforming Assets at 0.20% of Total Assets compared to the Nonperforming Assets ($ in thousands) Southeast Peer Median (1) of 0.65% $9,000 1.00% 0.65% . Remaining fair value discounts on acquired $6,000 0.70% $3,000 0.40% loans are 1.7x the current All
Slide 16: Summary of Moving Forward Initiatives
Summary of Moving Forward Initiatives The company is Moving Forward with several major initiatives: Initiatives Completed On-Going . Centralization of operational areas . Centralization of finance group . Bank-wide organizational chart planning to gain efficiencies . Core data processing decis
Slide 17: Appendix
Alb, SmartFinancial, Inc. Appendix
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ in thousands) 3Q19 2Q19 1Q19 4Q18 3Q18 Net interest income - ex purchase acct. adj. Net interest income (GAAP) $ 21,140 $ 20,802 $ 20,997 $ 21,447 $ 18,860 Taxable equivalent adjustment 110 116 115 94 36 Net interest income TEY 21,250 20,918 21,112 21,541 18,896 Purchase
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ in thousands, except per share data) 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18 4Q17 3Q17 Operating Earnings Net income (GAAP) $ 5,963 $ 9,121 $ 4,731 $ 6,444 $ 4,324 $ 3,931 $ 3,415 $ 38 $ 1,685 Securities (gains) losses (1) (33) - (2) - 1 - - (144) Merger termination fee - (6,4
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: Alb,
Alb, SmartFinancial, Inc.