Slide 1: Investor Call 4Q 2023
INVESTOR CALL 4Q 2023 January 23, 2024, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-833-470-1428 Access Code: 197280 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 Statements included in this presentation include Non-GAAP financial measures and should be or expectations of future events or future results,
Slide 3: SmartBank 2023: A Year in Review
SMARTBANK 2023: A YEAR IN REVIEW $ in Millions, except per share data FINANCIAL HIGHLIGHTS: '21 -'23 BALANCE SHEET / NON-GAAP REVENUE METRICS: 2021Y 2022Y 2023Y CAGR3 Total Loans and Leases (Excl. HFS & PPP) $ 2,641.1 $ 3,253.6 $ 3,444.5 14% BALANCE SHEET STRENGTH Annual Net Balance Loan Growth 547.
Slide 4: Quarterly Highlights: Fourth Quarter 2023
QUARTERLY HIGHLIGHTS: FOURTH QUARTER 2023 $0.41 $4.8 Diluted Earnings Per Share Book Value Per Share Diluted Operating Billion in Total EPS1 Assets $26.28 $27.07 $0.77 $0.76 $25.59 $21.95 $22.29 $21.18 $20.76 $19.94 $19.09 6.2% 8.1% $0.43 $0.41 $19.09 $19.94 $20.76 QoQ2 Annualized QoQ Annualized $0.
Slide 5: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.8 Nashville Knoxville Billion in Total Assets Chattanooga Huntsville $3.4 Billion in Total Birmingham Loans Tuscaloosa Auburn $4.3 Montgomery Billion in Total Deposits Dothan SmartBank Branch Offices Mobile 42 Pensacola Tallahassee Panama City Total B
Slide 6: Market Area: Targeting Industry Rich Growth Markets
MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS $ in Billions, unless otherwise indicated Legacy Markets1: Strong Relationships / Deep Market Penetration Forbes CAGR: 6% $2 $2.4 $2.4 SMBK Loans $2 $2 $2.1 Top 200 $2 $2 $2.0 $2 Best Places $2 for Business and 12/31/20 12/31/21 12/31/22 12/31/23 C
Slide 7: Loan Portfolio: Solid Markets Providing Opportunity
LOAN PORTFOLIO: SOLID MARKETS PROVIDING OPPORTUNITY $ in Millions, unless otherwise indicated Total Loans Loan Composition CAGR of 14% Since 2018 History of Consistent Organic Growth $4, 000 10. 00% $3,444 $3,338 $3,379 $3,254 $3,282 $3, 500 $3,338 $3,379 $3,444 $3,254 $3,282 19% 9. 00% 19% 19% 18%
Slide 8: 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 Closely Monitored with No Seasoned Client Base Concentration Concerns Resi/Comm Resi/Comm Retail Land Dev. Land Hotel & Space 11% 15% Hospitality
Slide 9: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands, unless otherwise indicated $14, 000 1.50% 350% 250% $12, 000 Nonperforming Assets 1.30% 330% Commercial Real Estate Concentration $10, 000 $9,735 1.10% 310% 200% 0.90% 299% $8, 000 287% 285% 285% $5,881 280% 290% 0.70% $5,712 $4,808 $
Slide 10: 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 81% Overall Stability Despite Some Mix Shift $4,230 $4,200 $4,247 $4,268 $4, 500 $4,022 $4,077 $4,230 $4,247 $4,268 5. 00% $4,200 $4,077 $4, 000 1
Slide 11: Securities Detail: Significant Cashflow Return 1H '24
60% $200 SECURITIES DETAIL: SIGNIFICANT CASHFLOW RETURN 1H ‘24 $ in Millions, unless otherwise indicated $180 Portfolio Summary 50% Principal Cashflow Schedule ~$170 Million Maturing by Q2 ‘24 $160 $720 Million Book Value 4.7 Year Average Life 2.73% Book Yield 3.2 Year Effective Duration $140 40% $5
Slide 12: Repricing Schedule: Yield Enhancement on Horizon
REPRICING SCHEDULE: YIELD ENHANCEMENT ON HORIZON FYE 2026 & ($ in millions) 1Q24 2Q24 3Q24 4Q24 2025 Beyond Loan Repricing Schedule: Fixed Rate Loans $ 35 $ 18 $ 30 $ 26 $ 181 $ 1,700 Weighted Average Yield 5.97% 5.31% 5.36% 5.13% 4.43% 4.53% Adjustable Rate Loans $ 22 $ 45 $ 21 $ 25 $ 57 $ 477 Weig
Slide 13: Liquidity Overview: Prudently Managing Liquidity
LIQUIDITY OVERVIEW: PRUDENTLY MANAGING LIQUIDITY $ in Millions, unless otherwise indicated Robust Liquidity on Hand Other Liquidity Sources Ample Access to a Variety of Funding Total Amount Net $1.5 Billion in Untapped Liquidity Sources Available Current On-Balance Sheet: Used Availability Cash & Ca
Slide 14: Liquidity Management: Navigating Margin Pressure
LIQUIDITY MANAGEMENT: NAVIGATING MARGIN PRESSURE $ in Millions, unless otherwise indicated $ in Thousands, unless otherwise indicated $1, 200 Cash and Securities 50.0% Margin / Operating Revenue2 45.0% $1, 000 40.0% 6.0 0% $44,593 $845 $824 $42,907 35.0% $800 $770 $43, 000 5.5 0% $690 $667 $6,981 30
Slide 15: 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 $8,047 , 6.3% $2.0 Billion Fixed Rate Loans Interest Income % Change $4,965 , 3.9% $1.4 Billion Variable Rate Loans • $829
Slide 16: 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 $7,492 $7,579 $7,130 $6,981 $6,925 4Q22 1Q23 2Q23 3Q23 4Q23 Serv
Slide 17: Operating Expense: Focus on Expense Containment
OPERATING EXPENSE: FOCUS ON EXPENSE CONTAINMENT $ in Thousands, unless otherwise indicated Operating Efficiency Ratio1 Operating Noninterest Expense1 $28,406 $28,770 $27,461 $27,529 $27,410 74% 73% 71% 64% 61% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 1 Operating Efficiency Ratio Salaries &
Slide 18: 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 8.2% 8.1% 8.3% 8.0% 7.9% 7.5% 7.1% 7.2% 7.3% 7.2% $24. 00 $22.29 5% $22. 00 $21.18 Well $20.76 Capitalized $20. 00 $19.26 $19.17 $19.09 $17.92 $17.77 $18. 00 $16
Slide 19: 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 20: Appendix
Wy SmartFinancial APPENDIX
Slide 21: Income Statement: Detailed Fourth Quarter Results
INCOME STATEMENT: DETAILED FOURTH QUARTER RESULTS 4Q23 vs. 3Q23 4Q22 ($ in thousands, except per share data) 4Q23 3Q23 4Q22 % Chg. % Chg. Net Interest Income $ 31,517 $ 31,006 $ 37,612 2% (16%) Provision for Loan & Lease losses 1,571 795 788 Noninterest Income 7,579 691 7,125 997% 6% Noninterest Exp
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 2023Y 2022Y 2021Y 4Q23 3Q23 2Q23 1Q23 4Q22 Operating Earnings Net Income (GAAP) $ 28,593 $ 43,022 $ 34,790 $ 6,190 $ 2,067 $ 8,836 $ 11,500 $ 13,004 Noninterest Income: Securities (Gains) Losses 6,801 (144) (45) - 6,801 - - (144) Non
Slide 23: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, unless otherwise indicated 4Q23 3Q23 2Q23 1Q23 4Q22 Tangible Common Equity: Shareholders' Equity (GAAP) $ 459,886 $ 446,652 $ 444,847 $ 443,399 $ 432,452 Less Goodwill And Other Intangible Assets 107,148 107,792 108,439 109,114 109,772 Tangible Common Equity (
Slide 24: 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 24
Slide 25: _SmartFinancial : L =
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