SmartFinancial Announces Results for the Fourth Quarter 2024

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SmartFinancial delivered impressive Q4 2024 results, showcasing substantial growth and improved profitability metrics. Net income reached $9.6 million ($0.57 per share), marking a 54.8% increase from Q4 2023's $6.2 million.

The bank's performance excelled in three critical areas:

Loan Growth: Achieved 20% annualized quarterly loan growth, adding $189 million in new loans. This aggressive but controlled expansion indicates strong market demand and effective lending strategies.
Margin Improvement: Net interest margin expanded to 3.24%, up 13 basis points quarter-over-quarter. This improvement stems from disciplined deposit cost management, with total deposit costs decreasing to 2.43% from 2.54%.
Asset Quality: Nonperforming assets ratio improved to 0.19%, significantly better than industry averages, reflecting prudent risk management.

What's particularly noteworthy is the bank's successful deposit strategy. Total deposits increased by $418.6 million year-over-year, with strong growth in money market accounts ($227.1 million) and strategic use of brokered deposits ($189.8 million). This diverse funding approach has helped maintain competitive lending capacity while managing interest costs.

The establishment of a Real Estate Investment Trust (REIT) structure signals forward-thinking tax efficiency, which should enhance future earnings through reduced state tax obligations. With tangible book value per share growing to $22.85 from $20.76 year-over-year, shareholders are seeing concrete value appreciation.

Looking ahead, the bank's strong capital position (tangible common equity ratio of 7.48%) provides ample room for continued growth while maintaining regulatory compliance. The declared quarterly dividend of $0.08 per share reflects management's confidence in sustained profitability.

01/21/2025 - 05:00 PM

KNOXVILLE, Tenn.--(BUSINESS WIRE)-- SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NYSE: SMBK), today announced net income of $9.6 million, or $0.57 per diluted common share, for the fourth quarter of 2024, compared to net income of $6.2 million, or $0.37 per diluted common share, for the fourth quarter of 2023, and compared to prior quarter net income of $9.1 million, or $0.54 per diluted common share. Operating earnings¹, which excludes non-recurring income, net of tax adjustments, totaled $9.6 million, or $0.57 per diluted common share, in the fourth quarter of 2024, compared to $6.9 million, or $0.41 per diluted common share, in the fourth quarter of 2023, and compared to $9.1 million, or $0.54 per diluted common share, in the third quarter of 2024.

Highlights for the Fourth Quarter of 2024

Operating earnings¹ of $9.6 million, or $0.57 per diluted common share
Net organic loan and lease growth of $189 million with 20% annualized quarter-over-quarter increase
Quarter-over-quarter net tax equivalent interest margin expansion of 13 basis points to 3.24%
Credit quality remains solid with nonperforming assets to total assets of 0.19%

Billy Carroll, President & CEO, stated: "As we closed 2023, I noted the strong positioning of our Company and expressed my optimism for the year ahead. Now, reflecting on 2024, it’s clear that this optimism was justified. Highlighted by 13% year-over-year loan and lease growth, a fourth quarter net interest margin of 3.24%, 38 basis points higher than the fourth quarter of 2023, continued profitability improvement and numerous operational achievements, 2024 was a notable year. As we look ahead to 2025, we remain committed and confident in our ability to further enhance profitability and drive value for our shareholders.”

SmartFinancial's Chairman, Miller Welborn, concluded: "2024 was a great year of growth and profitability expansion following an extremely challenging 2023. The Board is pleased with the Company’s 10% annual tangible book value growth and steady return metric enhancement. Equally important is SmartBank’s ongoing commitment to its culture and associates. Our associates continue to make SmartBank a great place to work, which is foundational to our present and future success through 2025 and beyond. Thank you!”

Net Interest Income and Net Interest Margin

Net interest income was $37.8 million for the fourth quarter of 2024, compared to $35.0 million for the prior quarter. Average earning assets totaled $4.7 billion, an increase of $151.0 million from the prior quarter. The balances of average earnings assets changed quarter-over-quarter, primarily from an increase in average loans and leases of $195.5 million, offset by a decrease in average interest-earning cash of $33.5 million and securities of $11.1 million. Average interest-bearing liabilities increased by $162.3 million from the prior quarter, primarily attributable to an increase in average deposits of $207.9 million, offset by a decrease in borrowings of $44.4 million.

The tax equivalent net interest margin was 3.24% for the fourth quarter of 2024, compared to 3.11% for the prior quarter. The tax equivalent net interest margin was positively impacted primarily by the decreased cost of interest-bearing deposits, quarter-over-quarter. The yield on loans and leases, excluding loan fees, on a fully tax equivalent basis (“FTE”) held constant at 5.95% quarter-over-quarter.

The cost of total deposits for the fourth quarter of 2024 was 2.43%, compared to 2.54% in the prior quarter. The cost of interest-bearing liabilities was 3.08% for the fourth quarter, compared to 3.29% in the prior quarter. The cost of average interest-bearing deposits was 3.02% for the fourth quarter of 2024, compared to 3.20% for the prior quarter, a decrease of 18 basis points.

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¹ Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliations.

The following table presents selected interest rates and yields for the periods indicated:


	Three Months Ended
	Dec		Sep		Increase
Selected Interest Rates and Yields	2024		2024		(Decrease)
Yield on loans and leases, excluding loan fees, FTE	5.95	%	5.95	%	-	%
Yield on loans and leases, FTE	6.04	%	6.02	%	0.02	%
Yield on earning assets, FTE	5.64	%	5.65	%	(0.01	)%
Cost of interest-bearing deposits	3.02	%	3.20	%	(0.18	)%
Cost of total deposits	2.43	%	2.54	%	(0.11	)%
Cost of interest-bearing liabilities	3.08	%	3.29	%	(0.21	)%
Net interest margin, FTE	3.24	%	3.11	%	0.13	%

Provision for Credit Losses on Loans and Leases and Credit Quality

At December 31, 2024, the allowance for credit losses was $37.4 million. The allowance for credit losses to total loans and leases was 0.96% as of December 31, 2024, and September 30, 2024.

The following table presents detailed information related to the provision for credit losses for the periods indicated (dollars in thousands):


	Three Months Ended
	Dec			Sep			Increase
Provision for Credit Losses on Loans and Leases Rollforward	2024			2024			(Decrease)
Beginning balance	$	35,609		$	34,690		$	919
Charge-offs		(214	)		(1,426	)		1,212
Recoveries		53			72			(19	)
Net (charge-offs) recoveries		(161	)		(1,354	)		1,193
Provision for credit losses ⁽¹⁾		1,975			2,273			(298	)
Ending balance	$	37,423		$	35,609		$	1,814

Allowance for credit losses to total loans and leases, gross		0.96	%		0.96	%		-	%

(1)	The current quarter-ended and prior quarter-ended excludes unfunded commitments provision of $160 thousand and $302 thousand, respectively. At December 31, 2024, the unfunded commitment liability totaled $2.5 million.

Nonperforming loans and leases as a percentage of total loans and leases was 0.20% as of December 31, 2024, a decrease of 6 basis points from the 0.26% reported in the third quarter of 2024. Total nonperforming assets (which include nonaccrual loans and leases, loans and leases past due 90 days or more and still accruing, other real estate owned and other repossessed assets) as a percentage of total assets was 0.19% as of December 31, 2024, and 0.26% as of September 30, 2024.

The following table presents detailed information related to credit quality for the periods indicated (dollars in thousands):


	Three Months Ended
	Dec			Sep			Increase
Credit Quality	2024			2024			(Decrease)
Nonaccrual loans and leases	$	7,710		$	9,319		$	(1,609	)
Loans and leases past due 90 days or more and still accruing		162			172			(10	)
Total nonperforming loans and leases		7,872			9,491			(1,619	)
Other real estate owned		179			179			-
Other repossessed assets		2,037			2,949			(912	)
Total nonperforming assets	$	10,088		$	12,619		$	(2,531	)

Nonperforming loans and leases to total loans and leases, gross		0.20	%		0.26	%		(0.06	)%
Nonperforming assets to total assets		0.19	%		0.26	%		(0.07	)%

Noninterest Income

Noninterest income decreased $109 thousand for the fourth quarter of 2024, compared to $9.1 million for the prior quarter. The current quarter decrease was primarily associated with a $499 thousand decrease in investment services from a lower volume of investment activity and offset by a $355 thousand increase in insurance commissions from new policies.

The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands):


	Three Months Ended
	Dec		Sep		Increase
Noninterest Income	2024		2024		(Decrease)
Service charges on deposit accounts	$	1,778	$	1,780	$	(2	)
Mortgage banking income		541		410		131
Investment services		1,382		1,881		(499	)
Insurance commissions		1,832		1,477		355
Interchange and debit card transaction fees		1,332		1,349		(17	)
Other		2,101		2,242		(141	)
Total noninterest income	$	9,030	$	9,139	$	(109	)

Noninterest Expense

Noninterest expense increased $1.4 million to $32.3 million for the fourth quarter of 2024 compared to $30.8 million for the prior quarter. The current quarter increase was primarily related to an increase in salaries and employee benefits related to incentive accruals for production performance and an increase in other real estate and loan related expenses due to write downs on repossessed assets at the Company’s equipment leasing subsidiary, offset by a decrease in other related to lower operational cost and lower franchise taxes related to the newly established Real Estate Investment Trust (“REIT”).

The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):


	Three Months Ended
	Dec		Sep		Increase
Noninterest Expense	2024		2024		(Decrease)
Salaries and employee benefits	$	19,752	$	18,448	$	1,304
Occupancy and equipment		3,473		3,423		50
FDIC insurance		825		825		-
Other real estate and loan related expenses		1,241		460		781
Advertising and marketing		397		327		70
Data processing and technology		2,495		2,519		(24	)
Professional services		1,017		1,201		(184	)
Amortization of intangibles		601		604		(3	)
Other		2,490		3,039		(549	)
Total noninterest expense	$	32,291	$	30,846	$	1,445

Income Tax Expense

Income tax expense was $2.7 million for the fourth quarter of 2024, an increase of $1.1 million, compared to $1.6 million for the prior quarter. The increase was due to an increase in pre-tax income compared to the prior quarter and final state income tax adjustments during the quarter related to the Bank’s REIT. The REIT will create a more tax-effective structure that will result in a lower effective tax rate during future periods by lowering the Bank’s state income tax expense.

Balance Sheet Trends

Total assets at December 31, 2024 were $5.28 billion compared to $4.83 billion at December 31, 2023. The $446.5 million increase is primarily attributable to increases in loans and leases of $461.9 million, cash and cash equivalents of $35.3 million and bank owned life insurance of $32.5 million, offset by a decrease in securities of $80.7 million.

Total liabilities were $4.78 billion at December 31, 2024, compared to $4.37 billion at December 31, 2023, an increase of $414.9 million. Total deposits increased $418.6 million, which was driven primarily by increases in money market deposits of $227.1 million, the issuance of brokered deposits of $189.8 million, other time deposits of $104.4 million and noninterest demand deposits of $67.5 million, offset by a decline in interest-bearing demand deposits of $170.2 million. Other liabilities increased $3.7 million, which was offset by a decrease in borrowings of $4.9 million and subordinated debt of $2.4 million.

Shareholders' equity at December 31, 2024, totaled $491.5 million, an increase of $31.6 million, from December 31, 2023. The increase in shareholders' equity was primarily driven by net income of $36.1 million for the twelve months ended December 31, 2024, and a positive change of $2.2 million in accumulated other comprehensive income, offset by dividends paid of $5.4 million. Tangible book value per share² was $22.85 at December 31, 2024, compared to $20.76 at December 31, 2023. Tangible common equity¹ as a percentage of tangible assets¹ was 7.48% at December 31, 2024, compared with 7.47% at December 31, 2023.

The following table presents selected balance sheet information for the periods indicated (dollars in thousands):


	Dec		Dec		Increase
Selected Balance Sheet Information	2024		2023		(Decrease)
Total assets	$	5,275,904	$	4,829,387	$	446,517
Total liabilities		4,784,443		4,369,501		414,942
Total equity		491,461		459,886		31,575
Securities		608,987		689,646		(80,659	)
Loans and leases		3,906,340		3,444,462		461,878
Deposits		4,686,483		4,267,854		418,629
Borrowings		8,135		13,078		(4,943	)

Board of Directors Declares Dividend

On January 16, 2025, the board of directors of SmartFinancial declared a quarterly cash dividend of $0.08 per share of SmartFinancial common stock payable on February 18, 2025, to shareholders of record as of the close of business on January 31, 2025.

Conference Call Information

SmartFinancial issued this earnings release for the fourth quarter of 2024 on Tuesday, January 21, 2025, and will host a conference call on Wednesday, January 22, 2025, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and entering the access code, 994691. A replay of the conference call will be available through March 23, 2025, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 147026. Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 a.m. ET prior to the conference call.

About SmartFinancial, Inc.

SmartFinancial, Inc., based in Knoxville, Tennessee, is the bank holding company for SmartBank. SmartBank is a full-service commercial bank founded in 2007, with branches across Tennessee, Alabama, and Florida. Recruiting the best people, delivering exceptional client service, strategic branching, and a disciplined approach to lending have contributed to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.

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¹ Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliation

Non-GAAP Financial Measures

Statements included in this earnings release include measures not recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered Non-GAAP financial measures (“Non-GAAP”) and should be read along with the accompanying tables, which provide a reconciliation of Non-GAAP financial measures to GAAP financial measures. SmartFinancial management uses several Non-GAAP financial measures and ratios derived therefrom in its analysis of the Company's performance, including:

(i)	Operating earnings
(ii)	Operating noninterest income
(iii)	Operating noninterest expense
(iv)	Operating pre-provision net revenue (“PPNR”) earnings
(v)	Tangible common equity
(vi)	Average tangible common equity
(vii)	Tangible book value per common share
(viii)	Tangible assets
(ix)	Operating efficiency ratio

Operating earnings, operating noninterest income, operating noninterest expense and operating PPNR earnings exclude non-operating related income and expense items from net income, noninterest income and noninterest expense, respectively. Tangible common equity and average tangible common equity exclude goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively. Tangible book value per common share is tangible common equity divided by common shares outstanding. Tangible assets excludes goodwill and other intangibles from total assets. Operating efficiency ratio is the quotient of operating noninterest expense divided by the sum of net interest income adjusted for taxable equivalent yields plus operating noninterest income. A detailed reconciliation of these items and the ratios derived therefrom is available in the Non-GAAP reconciliations.

Management believes that Non-GAAP financial measures provide additional useful information that allows investors to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. Management also believes these Non-GAAP financial measures enhance investors' ability to compare period-to-period financial results and allow investors and company management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance.

Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider SmartFinancial's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.

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 the Private Securities Litigation Reform Act of 1995. These statements are not historical in nature and can generally be identified by such words as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “may,” “estimate,” and similar expressions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results of SmartFinancial to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others,

(1)	risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively;
(2)	claims and litigation arising from our business activities and from the companies we acquire, which may relate to contractual issues, environmental laws, fiduciary responsibility, and other matters;
(3)	general risks related to our merger and acquisition activity, including risks associated with our pursuit of future acquisitions;
(4)	changes in management’s plans for the future;
(5)	prevailing, or changes in, economic or political conditions (including those resulting from the new administration and Congress), particularly in our market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing;
(6)	our ability to anticipate interest rate changes and manage interest rate risk (including the impact of higher interest rates on macroeconomic conditions, competition, and the cost of doing business and the impact of interest rate fluctuations on our financial projections, models and guidance);
(7)	increased technology and cybersecurity risks, including generative artificial intelligence risks;
(8)	credit risk associated with our lending activities;
(9)	changes in loan demand, real estate values, or competition;
(10)	developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance;
(11)	changes in accounting principles, policies, or guidelines;
(12)	changes in applicable laws, rules, or regulations;
(13)	adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions;
(14)	potential impacts of any adverse developments in the banking industry, including the impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto;
(15)	significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities;
(16)	the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine or the conflict in Israel and surrounding areas; and
(17)	other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.

These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in SmartFinancial’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, in each case filed with or furnished to the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website (www.sec.gov). Undue reliance should not be placed on forward-looking statements. SmartFinancial disclaims any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events, or otherwise.

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands)

	Ending Balances
	Dec			Sep			Jun			Mar			Dec
	2024			2024			2024			2024			2023
Assets:
Cash and cash equivalents	$	387,570		$	192,914		$	342,835		$	477,941		$	352,271
Securities available-for-sale, at fair value		482,328			501,336			500,821			474,347			408,410
Securities held-to-maturity, at amortized cost		126,659			127,779			128,996			180,169			281,236
Other investments		14,740			20,352			13,780			13,718			13,662
Loans held for sale		5,996			5,804			3,103			4,861			4,418
Loans and leases		3,906,340			3,717,478			3,574,158			3,477,555			3,444,462
Less: Allowance for credit losses		(37,423	)		(35,609	)		(34,690	)		(34,203	)		(35,066	)
Loans and leases, net		3,868,917			3,681,869			3,539,468			3,443,352			3,409,396
Premises and equipment, net		91,093			91,055			91,315			92,694			92,963
Other real estate owned		179			179			688			696			517
Goodwill and other intangibles, net		104,723			105,324			105,929			106,537			107,148
Bank owned life insurance		115,917			105,025			84,483			83,957			83,434
Other assets		77,782			77,297			79,591			76,418			75,932
Total assets	$	5,275,904		$	4,908,934		$	4,891,009		$	4,954,690		$	4,829,387
Liabilities:
Deposits:
Noninterest-bearing demand	$	965,552		$	863,949		$	903,300		$	907,254		$	898,044
Interest-bearing demand		836,731			834,207			988,057			996,298			1,006,915
Money market and savings		2,039,560			1,854,777			1,901,281			1,952,410			1,812,427
Time deposits		844,640			769,558			524,018			538,159			550,468
Total deposits		4,686,483			4,322,491			4,316,656			4,394,121			4,267,854
Borrowings		8,135			8,997			12,732			9,849			13,078
Subordinated debt		39,684			39,663			42,142			42,120			42,099
Other liabilities		50,141			48,760			47,014			41,804			46,470
Total liabilities		4,784,443			4,419,911			4,418,544			4,487,894			4,369,501
Shareholders' Equity:
Common stock		16,926			16,926			16,926			17,057			16,989
Additional paid-in capital		294,269			293,909			293,586			296,061			295,699
Retained earnings		203,824			195,537			187,751			181,103			173,105
Accumulated other comprehensive loss		(23,671	)		(17,349	)		(25,798	)		(27,425	)		(25,907	)
Total shareholders' equity attributable to SmartFinancial Inc. and Subsidiary		491,348			489,023			472,465			466,796			459,886
Non-controlling interest - preferred stock of subsidiary		113			—			—			—			—
Total shareholders' equity		491,461			489,023			472,465			466,796			459,886
Total liabilities & shareholders' equity	$	5,275,904		$	4,908,934		$	4,891,009		$	4,954,690		$	4,829,387

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands except share and per share data)

	Three Months Ended											Year Ended
	Dec		Sep		Jun		Mar			Dec		Dec		Dec
	2024		2024		2024		2024			2023		2024		2023
Interest income:
Loans and leases, including fees	$	57,951	$	54,738	$	50,853	$	50,020		$	48,767	$	213,562	$	186,479
Investment securities:
Taxable		5,050		5,233		5,320		4,548			4,344		20,151		16,665
Tax-exempt		351		350		353		352			352		1,406		1,418
Federal funds sold and other earning assets		2,744		3,635		4,759		4,863			4,032		16,000		13,481
Total interest income		66,096		63,956		61,285		59,783			57,495		251,119		218,043
Interest expense:
Deposits		27,437		27,350		27,439		27,035			24,926		109,260		84,260
Borrowings		89		709		148		128			162		1,075		936
Subordinated debt		787		865		884		899			890		3,434		2,767
Total interest expense		28,313		28,924		28,471		28,062			25,978		113,769		87,963
Net interest income		37,783		35,032		32,814		31,721			31,517		137,350		130,080
Provision for credit losses		2,135		2,575		883		(440	)		1,571		5,153		3,029
Net interest income after provision for credit losses		35,648		32,457		31,931		32,161			29,946		132,197		127,051
Noninterest income:
Service charges on deposit accounts		1,778		1,780		1,692		1,612			1,673		6,862		6,511
Gain (loss) on sale of securities, net		64		—		—		—			—		64		(6,801	)
Mortgage banking		541		410		348		280			227		1,579		1,040
Investment services		1,382		1,881		1,302		1,380			1,339		5,945		5,105
Insurance commissions		1,832		1,477		1,284		1,103			1,133		5,696		4,684
Interchange and debit card transaction fees		1,332		1,349		1,343		1,253			1,370		5,277		5,457
Other		2,101		2,242		1,635		2,752			1,837		8,729		6,329
Total noninterest income		9,030		9,139		7,604		8,380			7,579		34,152		22,325
Noninterest expense:
Salaries and employee benefits		19,752		18,448		17,261		16,639			16,275		72,100		65,749
Occupancy and equipment		3,473		3,423		3,324		3,396			3,378		13,617		13,451
FDIC insurance		825		825		825		915			915		3,390		3,156
Other real estate and loan related expense		1,241		460		538		584			781		2,823		2,397
Advertising and marketing		397		327		295		302			336		1,321		1,342
Data processing and technology		2,495		2,519		2,452		2,465			2,458		9,930		9,235
Professional services		1,017		1,201		1,064		924			1,136		4,207		3,443
Amortization of intangibles		601		604		608		612			643		2,425		2,624
Merger related and restructuring expenses		—		—		—		—			—		—		110
Other		2,490		3,039		2,834		2,716			3,773		11,077		11,643
Total noninterest expense		32,291		30,846		29,201		28,553			29,695		120,890		113,150
Income before income taxes		12,387		10,750		10,334		11,988			7,830		45,459		36,226
Income tax expense		2,747		1,610		2,331		2,630			1,640		9,318		7,633
Net income	$	9,640	$	9,140	$	8,003	$	9,358		$	6,190	$	36,141	$	28,593
Earnings per common share:
Basic	$	0.58	$	0.55	$	0.48	$	0.56		$	0.37	$	2.16	$	1.70
Diluted	$	0.57	$	0.54	$	0.48	$	0.55		$	0.37	$	2.14	$	1.69
Weighted average common shares outstanding:
Basic		16,729,509		16,726,658		16,770,819		16,849,735			16,814,647		16,768,956		16,805,068
Diluted		16,863,780		16,839,998		16,850,250		16,925,408			16,918,234		16,875,456		16,911,185

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) YIELD ANALYSIS

	Three Months Ended
	December 31, 2024						September 30, 2024						December 31, 2023
	Average				Yield/		Average				Yield/		Average				Yield/
	Balance		Interest		Cost		Balance		Interest		Cost		Balance		Interest		Cost
Assets:
Loans and leases, including fees¹	$	3,830,301	$	58,188	6.04	%	$	3,634,808	$	54,993	6.02	%	$	3,408,430	$	48,767	5.68	%
Taxable securities		554,152		5,050	3.63	%		564,978		5,233	3.68	%		618,511		4,344	2.79	%
Tax-exempt securities²		63,309		444	2.79	%		63,561		443	2.77	%		63,767		445	2.77	%
Federal funds sold and other earning assets		233,793		2,745	4.67	%		267,252		3,634	5.41	%		289,896		4,032	5.52	%
Total interest-earning assets		4,681,555		66,427	5.64	%		4,530,599		64,303	5.65	%		4,380,604		57,588	5.22	%
Noninterest-earning assets		407,695						381,306						386,202
Total assets	$	5,089,250					$	4,911,905					$	4,766,806

Liabilities and Shareholders’ Equity:
Interest-bearing demand deposits	$	826,750		3,775	1.82	%	$	925,307		5,289	2.27	%	$	974,637		5,631	2.29	%
Money market and savings deposits		1,923,265		14,830	3.07	%		1,917,301		16,608	3.45	%		1,764,826		14,556	3.27	%
Time deposits		861,211		8,832	4.08	%		560,699		5,453	3.87	%		556,996		4,739	3.38	%
Total interest-bearing deposits		3,611,226		27,437	3.02	%		3,403,307		27,350	3.20	%		3,296,459		24,926	3.00	%
Borrowings		9,145		89	3.87	%		53,592		709	5.26	%		13,420		162	4.79	%
Subordinated debt		39,672		787	7.89	%		40,846		865	8.42	%		42,087		890	8.39	%
Total interest-bearing liabilities		3,660,043		28,313	3.08	%		3,497,745		28,924	3.29	%		3,351,966		25,978	3.07	%
Noninterest-bearing deposits		889,151						884,938						915,259
Other liabilities		50,884						50,580						50,055
Total liabilities		4,600,078						4,433,263						4,317,280
Shareholders' equity		489,172						478,642						449,526
Total liabilities and shareholders' equity	$	5,089,250					$	4,911,905					$	4,766,806

Net interest income, taxable equivalent			$	38,114					$	35,379					$	31,610
Interest rate spread					2.57	%					2.36	%					2.14	%
Tax equivalent net interest margin					3.24	%					3.11	%					2.86	%

Percentage of average interest-earning assets to average interest-bearing liabilities					127.91	%					129.53	%					130.69	%
Percentage of average equity to average assets					9.61	%					9.74	%					9.43	%

¹Yields computed on tax-exempt loans on a tax equivalent basis include $237 thousand, $255 thousand, and $0 thousand of taxable equivalent income for the quarters ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.
²Yields computed on tax-exempt instruments on a tax equivalent basis include $93 thousand, $93 thousand, and $94 thousand of taxable equivalent income for the quarters ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) YIELD ANALYSIS

	Year Ended
	December 31, 2024						December 31, 2023
	Average				Yield/		Average				Yield/
	Balance		Interest		Cost		Balance		Interest		Cost
Assets:
Loans and leases, including fees¹	$	3,607,558	$	214,310	5.94	%	$	3,334,523	$	186,479	5.59	%
Taxable securities		580,001		20,151	3.47	%		713,637		16,665	2.34	%
Tax-exempt securities²		63,679		1,780	2.80	%		64,816		1,795	2.77	%
Federal funds sold and other earning assets		300,081		16,000	5.33	%		272,864		13,481	4.94	%
Total interest-earning assets		4,551,319		252,241	5.54	%		4,385,840		218,420	4.98	%
Noninterest-earning assets		388,267						370,436
Total assets	$	4,939,586					$	4,756,276

Liabilities and Shareholders’ Equity:
Interest-bearing demand deposits	$	932,598		21,074	2.26	%	$	959,639		20,214	2.11	%
Money market and savings deposits		1,913,673		64,116	3.35	%		1,768,869		50,468	2.85	%
Time deposits		623,652		24,070	3.86	%		520,799		13,578	2.61	%
Total interest-bearing deposits		3,469,923		109,260	3.15	%		3,249,307		84,260	2.59	%
Borrowings		21,719		1,075	4.95	%		17,824		936	5.25	%
Subordinated debt		41,184		3,434	8.34	%		42,055		2,767	6.58	%
Total interest-bearing liabilities		3,532,826		113,769	3.22	%		3,309,186		87,963	2.66	%
Noninterest-bearing deposits		883,923						958,078
Other liabilities		48,949						46,052
Total liabilities		4,465,698						4,313,316
Shareholders' equity		473,888						442,960
Total liabilities and shareholders' equity	$	4,939,586					$	4,756,276

Net interest income, taxable equivalent			$	138,472					$	130,457
Interest rate spread					2.32	%					2.32	%
Tax equivalent net interest margin					3.04	%					2.97	%

Percentage of average interest-earning assets to average interest-bearing liabilities					128.83	%					132.54	%
Percentage of average equity to average assets					9.59	%					9.31	%

¹Yields computed on tax-exempt loans on a tax equivalent basis included $749 thousand and $0 thousand of taxable equivalent income for the year ended December 31, 2024, and 2023, respectively.
²Yields computed on tax-exempt instruments on a tax equivalent basis included $374 thousand and $377 thousand of taxable equivalent income for the year ended December 31, 2024, and 2023, respectively.

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands)

	As of and for The Three Months Ended
	Dec			Sep			Jun			Mar			Dec
	2024			2024			2024			2024			2023
Composition of Loans and Leases:
Commercial real estate:
Owner occupied	$	867,678		$	868,077		$	829,085		$	804,557		$	798,416
Non-owner occupied		1,080,404			1,031,708			986,278			938,648			940,789
Commercial real estate, total		1,948,082			1,899,785			1,815,363			1,743,205			1,739,205
Commercial & industrial		775,620			731,600			701,460			667,903			645,918
Construction & land development		361,735			315,006			294,575			321,860			327,185
Consumer real estate		741,836			690,504			678,331			659,209			649,867
Leases		64,878			67,052			70,299			71,909			68,752
Consumer and other		14,189			13,531			14,130			13,469			13,535
Total loans and leases	$	3,906,340		$	3,717,478		$	3,574,158		$	3,477,555		$	3,444,462

Asset Quality and Additional Loan Data:
Nonperforming loans and leases	$	7,872		$	9,491		$	6,642		$	6,266		$	8,101
Other real estate owned		179			179			688			696			517
Other repossessed assets		2,037			2,949			2,645			2,033			1,117
Total nonperforming assets	$	10,088		$	12,619		$	9,975		$	8,995		$	9,735
Modified loans and leases¹ not included in nonperforming loans and leases	$	3,989		$	4,053		$	4,241		$	4,413		$	4,245
Net charge-offs to average loans and leases (annualized)		0.02	%		0.15	%		0.05	%		0.09	%		0.04	%
Allowance for credit losses to loans and leases		0.96	%		0.96	%		0.97	%		0.98	%		1.02	%
Nonperforming loans and leases to total loans and leases, gross		0.20	%		0.26	%		0.19	%		0.18	%		0.24	%
Nonperforming assets to total assets		0.19	%		0.26	%		0.20	%		0.18	%		0.20	%

Capital Ratios:
Equity to Assets		9.32	%		9.96	%		9.66	%		9.42	%		9.52	%
Tangible common equity to tangible assets (Non-GAAP)²		7.48	%		7.99	%		7.66	%		7.43	%		7.47	%

SmartFinancial, Inc.³
Tier 1 leverage		8.33	%		8.44	%		8.32	%		8.23	%		8.27	%
Common equity Tier 1		9.83	%		10.06	%		10.06	%		10.20	%		10.14	%
Tier 1 capital		9.83	%		10.06	%		10.06	%		10.20	%		10.14	%
Total capital		11.17	%		11.62	%		11.68	%		11.85	%		11.78	%

SmartBank	Estimated⁴
Tier 1 leverage		8.98	%		9.17	%		9.11	%		9.07	%		9.18	%
Common equity Tier 1		10.58	%		10.92	%		11.02	%		11.23	%		11.26	%
Tier 1 capital		10.58	%		10.92	%		11.02	%		11.23	%		11.26	%
Total capital		11.36	%		11.69	%		11.79	%		12.00	%		12.02	%

¹Borrowers that have experienced financial difficulty.
²Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.
³All periods presented are estimated.
⁴ Current period capital ratios are estimated as of the date of this earnings release.

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands except share and per share data)

	As of and for The															As of and for The
	Three Months Ended															Year Ended
	Dec			Sep			Jun			Mar			Dec			Dec			Dec
	2024			2024			2024			2024			2023			2024			2023
Selected Performance Ratios (Annualized):
Return on average assets		0.75	%		0.74	%		0.66	%		0.77	%		0.52	%		0.73	%		0.60	%
Return on average shareholders' equity		7.84	%		7.60	%		6.90	%		8.16	%		5.46	%		7.63	%		6.45	%
Return on average tangible common equity¹		9.99	%		9.75	%		8.94	%		10.63	%		7.18	%		9.82	%		8.55	%
Noninterest income / average assets		0.71	%		0.74	%		0.63	%		0.69	%		0.63	%		0.69	%		0.47	%
Noninterest expense / average assets		2.52	%		2.50	%		2.41	%		2.35	%		2.47	%		2.45	%		2.38	%
Efficiency ratio		68.98	%		69.83	%		72.25	%		71.20	%		75.95	%		70.49	%		74.24	%

Operating Selected Performance Ratios (Annualized):
Operating return on average assets¹		0.75	%		0.74	%		0.64	%		0.69	%		0.57	%		0.71	%		0.72	%
Operating PPNR return on average assets¹		1.13	%		1.08	%		0.90	%		0.84	%		0.86	%		0.99	%		0.99	%
Operating return on average shareholders' equity¹		7.80	%		7.60	%		6.72	%		7.29	%		6.07	%		7.36	%		7.77	%
Operating return on average tangible common equity¹		9.94	%		9.75	%		8.70	%		9.49	%		7.98	%		9.48	%		10.29	%
Operating efficiency ratio¹		68.58	%		69.28	%		72.13	%		73.50	%		73.41	%		70.72	%		70.26	%
Operating noninterest income / average assets¹		0.70	%		0.74	%		0.60	%		0.58	%		0.63	%		0.66	%		0.61	%
Operating noninterest expense / average assets¹		2.52	%		2.50	%		2.41	%		2.35	%		2.39	%		2.45	%		2.36	%

Selected Interest Rates and Yields:
Yield on loans and leases, excluding loan fees, FTE		5.95	%		5.95	%		5.80	%		5.71	%		5.61	%		5.86	%		5.43	%
Yield on loans and leases, FTE		6.04	%		6.02	%		5.87	%		5.82	%		5.68	%		5.94	%		5.59	%
Yield on earning assets, FTE		5.64	%		5.65	%		5.52	%		5.36	%		5.22	%		5.54	%		4.98	%
Cost of interest-bearing deposits		3.02	%		3.20	%		3.23	%		3.16	%		3.00	%		3.15	%		2.59	%
Cost of total deposits		2.43	%		2.54	%		2.56	%		2.52	%		2.35	%		2.51	%		2.00	%
Cost of interest-bearing liabilities		3.08	%		3.29	%		3.29	%		3.23	%		3.07	%		3.22	%		2.66	%
Net interest margin, FTE		3.24	%		3.11	%		2.97	%		2.85	%		2.86	%		3.04	%		2.97	%

Per Common Share:
Net income, basic	$	0.58		$	0.55		$	0.48		$	0.56		$	0.37		$	2.16		$	1.70
Net income, diluted		0.57			0.54			0.48			0.55			0.37			2.14			1.69
Operating earnings, basic¹		0.57			0.55			0.47			0.50			0.41			2.08			2.05
Operating earnings, diluted¹		0.57			0.54			0.46			0.49			0.41			2.07			2.03
Book value		29.04			28.89			27.91			27.37			27.07			29.04			27.07
Tangible book value¹		22.85			22.67			21.66			21.12			20.76			22.85			20.76
Common shares outstanding		16,925,672			16,926,374			16,925,902			17,056,704			16,988,879			16,925,672			16,988,879

¹Non-GAAP measure. See reconciliation of Non-GAAP measures.

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) NON-GAAP RECONCILIATIONS

	Three Months Ended															Year Ended
	Dec			Sep			Jun			Mar			Dec			Dec			Dec
	2024			2024			2024			2024			2023			2024			2023
Operating Earnings:
Net income (GAAP)	$	9,641		$	9,140		$	8,003		$	9,358		$	6,190		$	36,141		$	28,593
Noninterest income:
Securities (gains) losses, net		(64	)		—			—			—			—			(64	)		6,801
Gain on sale of former branch building		—			—			(283	)		(1,346	)		—			(1,629	)		—
Noninterest expenses:
Donation of a former branch location		—			—			—			—			250			—			250
Accruals for pending litigation		—			—			—			—			675			—			675
Merger related and restructuring expenses		—			—			—			—			—			—			110
Income taxes:
Income tax effect of adjustments		17			—			73			348			(239	)		437			(2,024	)
Operating earnings (Non-GAAP)	$	9,594		$	9,140		$	7,793		$	8,360		$	6,876		$	34,885		$	34,405
Operating earnings per common share (Non-GAAP):
Basic	$	0.57		$	0.55		$	0.47		$	0.50		$	0.41		$	2.08		$	2.05
Diluted		0.57			0.54			0.46			0.49			0.41			2.07			2.03

Operating Noninterest Income:
Noninterest income (GAAP)	$	9,030		$	9,139		$	7,604		$	8,380		$	7,579		$	34,152		$	22,325
Securities (gains) losses, net		(64	)		—			—			—			—			(64	)		6,801
Gain on sale of former branch building		—			—			(283	)		(1,346	)		—			(1,629	)		—
Operating noninterest income (Non-GAAP)	$	8,966		$	9,139		$	7,321		$	7,034		$	7,579		$	32,459		$	29,126
Operating noninterest income (Non-GAAP)/average assets¹		0.70	%		0.74	%		0.60	%		0.58	%		0.63	%		0.66	%		0.61	%

Operating Noninterest Expense:
Noninterest expense (GAAP)	$	32,291		$	30,846		$	29,201		$	28,553		$	29,695		$	120,890		$	113,150
Donation of a former branch location		—			—			—			—			(250	)		—			(250	)
Accruals for pending litigation		—			—			—			—			(675	)		—			(675	)
Merger related and restructuring expenses		—			—			—			—			—			—			(110	)
Operating noninterest expense (Non-GAAP)	$	32,291		$	30,846		$	29,201		$	28,553		$	28,770		$	120,890		$	112,115
Operating noninterest expense (Non-GAAP)/average assets²		2.52	%		2.50	%		2.41	%		2.35	%		2.39	%		2.45	%		2.36	%

Operating Pre-provision Net revenue ("PPNR") Earnings:
Net interest income (GAAP)	$	37,783		$	35,032		$	32,814		$	31,721		$	31,517		$	137,350		$	130,080
Operating noninterest income (Non-GAAP)		8,966			9,139			7,321			7,034			7,579			32,459			29,126
Operating noninterest expense (Non-GAAP)		(32,291	)		(30,846	)		(29,201	)		(28,553	)		(28,770	)		(120,890	)		(112,115	)
Operating PPNR earnings (Non-GAAP)	$	14,458		$	13,325		$	10,934		$	10,202		$	10,326		$	48,919		$	47,091

Non-GAAP Return Ratios:
Operating return on average assets (Non-GAAP)³		0.75	%		0.74	%		0.64	%		0.69	%		0.57	%		0.71	%		0.72	%
Operating PPNR return on average assets (Non-GAAP)⁴		1.13	%		1.08	%		0.90	%		0.84	%		0.86	%		0.99	%		0.99	%
Return on average tangible common equity (Non-GAAP)⁵		9.99	%		9.75	%		8.93	%		10.63	%		7.18	%		9.82	%		8.55	%
Operating return on average shareholders' equity (Non-GAAP)⁶		7.80	%		7.60	%		6.72	%		7.29	%		6.07	%		7.36	%		7.77	%
Operating return on average tangible common equity (Non-GAAP)⁷		9.94	%		9.75	%		8.70	%		9.49	%		7.98	%		9.48	%		10.29	%

Operating Efficiency Ratio:
Efficiency ratio (GAAP)		68.98	%		69.83	%		72.25	%		71.20	%		75.95	%		70.49	%		74.24	%
Adjustment for taxable equivalent yields		(0.49	)%		(0.55	)%		(0.63	)%		(0.17	)%		(0.18	)%		(0.46	)%		(0.18	)%
Adjustment for securities gains (losses)		0.09	%		—	%		—	%		—	%		—	%		0.03	%		(3.17	)%
Adjustment for sale of branch location		—	%		—	%		0.51	%		2.46	%		—	%		0.66	%		—	%
Adjustment for donation of a former branch location		—	%		—	%		—	%		—	%		(0.64	)%		—	%		(0.16	)%
Adjustment for accruals for pending litigation		—	%		—	%		—	%		—	%		(1.72	)%		—	%		(0.44	)%
Adjustment for merger related income and costs		—	%		—	%		—	%		—	%		—	%		—	%		(0.03	)%
Operating efficiency ratio (Non-GAAP)		68.58	%		69.28	%		72.13	%		73.50	%		73.41	%		70.72	%		70.26	%

¹Operating noninterest income (Non-GAAP) is annualized and divided by average assets. ²Operating noninterest expense (Non-GAAP) is annualized and divided by average assets. ³Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets. ⁴Operating PPNR return on average assets (Non-GAAP) is the annualized operating PPNR earnings (Non-GAAP) divided by average assets. ⁵Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP). ⁶Operating return on average shareholders’ equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average equity. ⁷Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP).

SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) NON-GAAP RECONCILIATIONS

	Three Months Ended
	Dec			Sep			Jun			Mar			Dec
	2024			2024			2024			2024			2023
Tangible Common Equity:
Shareholders' equity (GAAP)	$	491,461		$	489,023		$	472,465		$	466,796		$	459,886
Less goodwill and other intangible assets		104,723			105,324			105,929			106,537			107,148
Tangible common equity (Non-GAAP)	$	386,738		$	383,699		$	366,536		$	360,259		$	352,738

Average Tangible Common Equity:
Average shareholders' equity (GAAP)	$	489,172		$	478,642		$	466,371		$	461,148		$	449,526
Less average goodwill and other intangible assets		105,093			105,701			106,301			106,920			107,551
Average tangible common equity (Non-GAAP)	$	384,079		$	372,941		$	360,070		$	354,228		$	341,975

Tangible Book Value per Common Share:
Book value per common share (GAAP)	$	29.04		$	28.89		$	27.91		$	27.37		$	27.07
Adjustment due to goodwill and other intangible assets		(6.19	)		(6.22	)		(6.25	)		(6.25	)		(6.31	)
Tangible book value per common share (Non-GAAP)¹	$	22.85		$	22.67		$	21.66		$	21.12		$	20.76

Tangible Common Equity to Tangible Assets:
Total Assets (GAAP)	$	5,275,904		$	4,908,934		$	4,891,009		$	4,954,690		$	4,829,387
Less goodwill and other intangibles		104,723			105,324			105,929			106,537			107,148
Tangible Assets (Non-GAAP)	$	5,171,181		$	4,803,610		$	4,785,080		$	4,848,153		$	4,722,239
Tangible common equity to tangible assets (Non-GAAP)		7.48	%		7.99	%		7.66	%		7.43	%		7.47	%

¹Tangible book value per share (Non-GAAP) is computed by dividing total shareholders’ equity, less goodwill and other intangible assets, by common shares outstanding.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250121337466/en/

Investor Contacts

Billy Carroll

President & Chief Executive Officer

Email: billy.carroll@smartbank.com

Phone: (865) 868-0613

Nathan Strall

Vice President and Director of Strategy & Corporate Development

Email: nathan.strall@smartbank.com

Phone: (865) 868-2604

Source: SmartFinancial, Inc.

FAQ

What was SMBK's net income for Q4 2024?

SmartFinancial reported net income of $9.6 million, or $0.57 per diluted share, for Q4 2024.

How much did SMBK's net interest margin improve in Q4 2024?

SMBK's net interest margin expanded by 13 basis points quarter-over-quarter to 3.24%.

What was SMBK's loan growth in Q4 2024?

SMBK achieved net organic loan and lease growth of $189 million, representing a 20% annualized quarter-over-quarter increase.

What dividend did SMBK declare for Q1 2025?

SMBK declared a quarterly cash dividend of $0.08 per share, payable on February 18, 2025.

How did SMBK's credit quality perform in Q4 2024?

Credit quality remained strong with nonperforming assets to total assets at 0.19%, improving from 0.26% in Q3 2024.

SmartFinancial Announces Results for the Fourth Quarter 2024

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SmartFinancial Announces Results for the Fourth Quarter 2024

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