Exhibit

Exhibit 99.1

3Q 2017

SmartFinancial Increases Net Income Available to Common Shareholders 26 percent compared to prior year

KNOXVILLE, TN - October 30, 2017 - SmartFinancial, Inc. ("SmartFinancial"; NASDAQ: SMBK), announced today net income of $1.7 million in its third quarter of 2017, compared to $1.6 million a year ago. Net income available to common shareholders totaled $1.7 million for third quarter of 2017 compared to $1.3 million during the third quarter of 2016.

Billy Carroll, President & CEO, stated: "In the third quarter net income was up five percent from a year ago. Compared to last year we grew net interest income over one million dollars by growing gross loans nine percent year over year and by increasing asset yields and our net interest margin. During the last quarter we added revenue producers in several markets and operations personnel to support them and the pending acquisition of Capstone Bancshares in Alabama. Those additions resulted in an increase in salaries and benefits that, along with over three hundred thousand dollars in merger and conversion costs during the current quarter, temporarily elevated our efficiency ratio. We anticipate additional merger related costs for the next two quarters with the integration of Capstone Bancshares after which time efficiencies will improve. Our team has done a great job of balancing the merger planning while growing the core bank.”

SmartFinancial's Chairman, Miller Welborn, concluded: "We are looking forward to completing the acquisition of Capstone Bancshares. Our resulting company will have assets of approximately $1.6 billion. The company's larger scale will lead to increased efficiencies and should result in a higher return on assets by the second quarter of 2018. Just as exciting as completing this acquisition are the future opportunities available for the company. We believe by expanding our geographic footprint we are positioning the company as a 'partner of choice' among other community banks in the Southeast. "

Performance Highlights


•	Net income available to common shareholders of $1.7 million for the quarter, up from $1.3 million a year ago.


•	Net interest margin, taxable equivalent, increased to 4.17 percent, the highest in the past five quarters.


•	Increased average interest-earning assets to average interest-bearing liabilities to 128 percent.

Third Quarter 2017 compared to Third Quarter 2016

Net income available to common shareholders totaled $1.7 million in the third quarter of 2017, or $0.20 per diluted share, compared to $1.3 million, or $0.22 per diluted share, in the third quarter of 2016. Net operating earnings available to common shareholders, which excludes securities gains, foreclosed assets gains and losses, and merger and conversion costs, totaled $1.8 million in the third quarter of 2017 compared to $1.3 million in the third quarter of 2016.

Net interest income to average assets of 3.81 percent for the quarter increased from 3.77 percent in the third quarter of 2016 as the average earning asset balances and yields increased compared to the prior year. Net interest income totaled $10.9 million in the third quarter of 2017 compared to $9.7 million in the third quarter of 2016. Net interest income was positively impacted compared to the prior year due to increases in loan balances and increases in the yields of the loan and securities portfolios. Net interest margin, taxable equivalent, increased from 4.03 percent in the third quarter of 2016 to 4.17 percent in the third quarter of 2017 as a result a higher percentage of average interest-earning assets to average interest-bearing liabilities and increases in the yield on earning assets.

Provision for loan losses was $30 thousand in the third quarter of 2017, compared to $261 thousand in the third quarter of 2016. The decrease in provision for loan losses was due to improvements in the credit profile of the loan portfolio as well as slower loan growth during the period. Annualized net charge-offs (recoveries) was (0.02) percent of average loans in the third quarter of 2017. The ALLL was $5.4 million, or 0.62 percent of total loans as of September 30, 2017, compared to $5.0 million, or 0.62 percent

of total loans, as of September 30, 2016. In addition to the allowance there were $8.2 million additional discounts on $166.5 million of purchased loans.

Nonperforming loans as a percentage of total loans was 0.15 percent as of September 30, 2017, which was down from 0.17 percent in the prior year. Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.37 percent as of September 30, 2017, compared to 0.38 percent as of September 30, 2016.

Noninterest income to average assets of 0.43 percent for the quarter was down from 0.47 percent in the third quarter of 2016. Noninterest income totaled $1.2 million in the third quarter of 2017, compared to $1.2 million in the third quarter of 2016. Year over year the largest changes in noninterest income were a $157 thousand decrease in gains on the sale of foreclosed assets, a $125 thousand increase in securities gains, and a $113 thousand increase in other income.

Noninterest expense to average assets of 3.33 percent for the quarter was up from 3.13 percent in the third quarter of 2016. Noninterest expense totaled $9.5 million in the third quarter of 2017, which was up from $8.0 million in the third quarter of 2016. The increase in noninterest expense compared to the prior year was primarily due to $723 thousand higher salaries and employee benefits and $303 thousand merger and conversion costs. Income tax expense was $882 thousand in the third quarter of 2017 compared to $947 thousand in the third quarter of 2016. The company's effective tax rate dropped to 34.4 percent in the third quarter of 2017 compared to 37.0 percent in the third quarter of 2016.

Third Quarter 2017 compared to Second Quarter 2017

Net income available to common shareholders totaled $1.7 million in the third quarter of 2017, or $0.20 per diluted share, compared to $1.6 million, or $0.20 per diluted share, in the second quarter of 2017. Net operating earnings available to common shareholders, which excludes securities gains, foreclosed assets gains and losses, and merger and conversion costs, totaled $1.8 million in the third quarter of 2017 compared to $1.9 million in the previous quarter.

Net interest income to average assets of 3.81 percent for the quarter was unchanged from the second quarter of 2017. Net interest income totaled $10.9 million in the third quarter of 2017 compared to $10.2 million in the second quarter of 2017. Net interest income was positively impacted by approximately $123 thousand due to the one extra day in the current period. Net interest margin, taxable equivalent, increased from 4.15 percent in the second quarter of 2017 to 4.17 percent in the third quarter of 2017 as a result a higher percentage of average interest-earning assets to average interest-bearing liabilities and increases of the yield on earning assets.

Provision for loan losses was $30 thousand in the third quarter of 2017, compared to $298 thousand in the second quarter of 2017. The decrease in provision for loan losses was due to slower loan growth during the period. The ALLL was $5.4 million, or 0.62 percent of total loans as of September 30, 2017, compared to $5.5 million, or 0.64 percent of total loans, as of June 30, 2017.

Nonperforming loans as a percentage of total loans was 0.15 percent as of September 30, 2017, which was up slightly from 0.13 percent in the prior quarter. Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.37 percent as of September 30, 2017, compared to 0.31 percent as of June 30, 2017.

Noninterest income to average assets of 0.43 percent for the period was down from 0.47 percent in the second quarter of 2017. Noninterest income totaled $1.2 million in the third quarter of 2017, compared to $1.3 million in the second quarter of 2017. The decrease in non-interest income was primarily due to smaller gains from lower sales volumes of SBA and mortgage loans.

Noninterest expense to average assets of 3.33 percent for the quarter was up from 3.29 percent in the second quarter of 2017. Noninterest expense totaled $9.5 million in the third quarter of 2017, which was up $718 thousand from the second quarter of 2017, primarily due to higher salaries and employee benefits. Income tax expense was $882 thousand in the third quarter of 2017 compared to $726 thousand in the second quarter of 2017. The company's effective tax rate increased to 34.4 percent in the third quarter of 2017 compared to 30.6 percent in the second quarter of 2017.

Conference Call Information

SmartFinancial will host a conference call on Tuesday, October 31, at 10:00 a.m. ET. To access this interactive teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the confirmation number: 6556809. A replay of the conference call will be available through November 7, 2017, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number: 10113897. Conference call materials (earnings release & conference call presentation) will be published on the company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile at 9:00 am EST prior to the morning of 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 fourteen branches, one loan production office, and one mortgage production office located in East Tennessee, the Florida Panhandle, and North Georgia. Recruiting the best people, delivering exceptional client service, strategic branching and a conservative and disciplined approach to lending have contributed to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.

This release contains forward-looking statements. SmartFinancial cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: the expected revenue synergies and cost savings from the merger with Capstone may not be fully realized or may take longer than anticipated to be realized; the disruption from the Capstone merger with customers, suppliers or employees or other business partners’ relationships; the risk of successful integration of our business with that of Capstone after consummation of the merger; the amount of costs, fees, expenses, and charges related to the merger; changes in management’s plans for the future, prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services and other factors that may be described in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.

The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, SmartFinancial assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

Statements included in this press release include non-GAAP financial measures 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 non-GAAP financial measures, including: (i) net operating earnings available to common shareholders; (ii) operating efficiency ratio; and (iii) tangible common equity, in its analysis of the company's performance. Net operating earnings available to common shareholders excludes the following from net income available to common shareholders: securities gains and losses, OREO gain and losses, merger and conversion expenses, and the income tax effect of adjustments. The operating efficiency ratio excludes securities gains and losses , adjustment for OREO gains and losses, and merger and conversion costs from the efficiency ratio. Tangible common equity excludes total preferred stock, preferred stock paid in capital, goodwill, and other intangible assets.

Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. 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.

Source

SmartFinancial, Inc.

Investor Contacts

Billy Carroll Frank Hughes

President & CEO Executive Vice President, Investor Relations

(865) 868-0613 (423) 385-3009

Media Contact

Kelley Fowler

First Vice President, Public Relations & Marketing

SmartBank

(865) 868-0611

kelley.fowler@smartbank.com



SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands except per share data)
	As of and for the three months ending
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Selected Performance Ratios (Annualized)
Return on average assets	0.59		%	0.61		%	0.64		%	0.64		%	0.63		%
Net operating return on average assets (Non-GAAP)	0.63		%	0.61		%	0.44		%	0.54		%	0.44		%
Return on average shareholder equity	4.91		%	4.95		%	5.18		%	6.24		%	6.19		%
Net operating return on average shareholder equity (Non-GAAP)	5.25		%	4.91		%	3.55		%	5.32		%	4.35		%
Net interest income / average assets	3.81		%	3.81		%	3.81		%	3.80		%	3.77		%
Yield on earning assets, TE (Non-GAAP)	4.70		%	4.66		%	4.54		%	4.51		%	4.48		%
Cost of interest-bearing liabilities	0.68		%	0.65		%	0.60		%	0.58		%	0.57		%
Net interest margin, TE (Non-GAAP)	4.17		%	4.15		%	4.07		%	4.06		%	4.03		%
Noninterest income / average assets	0.43		%	0.47		%	0.36		%	0.37		%	0.47		%
Noninterest expense / average assets	3.33		%	3.29		%	3.16		%	3.09		%	3.13		%
Efficiency ratio	78.62		%	76.77		%	75.79		%	74.29		%	74.06		%
Operating efficiency ratio (Non-GAAP)	76.46		%	78.98		%	81.34		%	78.98		%	80.31		%
Pre-tax pre-provision income / average assets	0.97		%	0.96		%	1.09		%	1.08		%	1.09		%

Per Common Share
Net income, basic	$	0.20		$	0.20		$	0.19		$	0.23		$	0.23
Net income, diluted	0.20			0.20			0.19			0.22			0.22
Net operating earnings, basic (Non-GAAP)	0.22			0.20			0.15			0.24			0.19
Net operating earnings, diluted (Non-GAAP)	0.22			0.20			0.15			0.23			0.19
Book value as of	16.57			16.39			16.14			15.81			15.83
Tangible book value (Non-GAAP) as of	15.67			15.48			15.34			14.69			14.70

Common shares outstanding as of	8,243			8,219			8,211			5,896			5,885

Composition Of Loans
Commercial & financial	$	119,782		$	105,129		$	90,649		$	85,696		$	83,534
Real estate construction & Development	98,212			101,151			115,675			117,748			128,733
Real estate commercial	447,620			445,176			407,933			414,860			394,346
owner occupied	210,489			211,469			197,032			199,645			191,697
non-owner occupied	237,131			233,707			210,901			215,215			202,649
Real estate residential	199,704			206,667			186,344			187,557			183,528
Other loans	6,361			7,298			6,938			7,515			7,001
Total loans	$	871,679		$	865,421		$	807,539		$	813,376		$	797,142





SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands except per share data)
	As of and for the three months ending
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Asset Quality Data and Ratios
Nonperforming loans	$	1,264		$	1,147		$	1,445		$	2,142		$	1,370
Foreclosed assets	2,888			2,369			2,371			2,386			2,536
Total nonperforming assets	$	4,152		$	3,516		$	3,816		$	4,528		$	3,906
Restructured loans not included in nonperforming loans	$	42		$	—		$	301		$	608		$	3,388
Net charge-offs to average loans (annualized)	(0.02		)%	(0.04		)%	(0.02		)%	0.02		%	0.01		%
Allowance for loan losses to loans	0.62		%	0.64		%	0.64		%	0.63		%	0.62		%
Nonperforming loans to total loans, gross	0.15		%	0.13		%	0.18		%	0.26		%	0.17		%
Nonperforming assets to total assets	0.37		%	0.31		%	0.36		%	0.43		%	0.38		%

Capital Ratios
Tangible equity to tangible assets	11.45		%	11.18		%	12.06		%	9.34		%	9.53		%
Tangible common equity to tangible assets	11.45		%	11.18		%	12.06		%	8.20		%	8.36		%
SmartFinancial, Inc.:	Estimated
Tier 1 leverage	12.18		%	11.54		%	12.37		%	9.71		%	9.77		%
Common equity Tier 1	13.74		%	13.43		%	14.40		%	9.98		%	10.04		%
Tier 1 capital	13.74		%	13.43		%	14.40		%	11.35		%	11.42		%
Total capital	14.32		%	14.10		%	15.12		%	11.93		%	12.00		%
SmartBank:	Estimated
Tier 1 leverage	11.23		%	10.98		%	11.17		%	9.71		%	9.63		%
Common equity Tier 1	12.60		%	12.32		%	13.13		%	11.30		%	11.26		%
Tier 1 capital	12.60		%	12.32		%	13.13		%	11.30		%	11.26		%
Total capital	13.19		%	12.89		%	13.71		%	11.88		%	11.83		%



SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
BALANCE SHEET
	Ending Balances
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Assets
Cash & cash equivalents	$	84,098		$	82,835		$	55,548		$	68,748		$	58,587
Securities available for sale	115,535			132,762			137,133			129,422			138,628
Other investments	6,081			6,081			5,628			5,628			4,451
Total loans	871,679			865,421			807,539			813,376			797,143
Allowance for loan losses	(5,393		)	(5,498		)	(5,152		)	(5,105		)	(4,964		)
Loans, net	866,286			859,923			802,387			808,271			792,178
Premises and equipment	33,778			33,765			30,802			30,536			27,863
Foreclosed assets	2,888			2,369			2,371			2,386			2,536
Goodwill and other intangibles	7,414			7,492			6,583			6,636			6,675
Other assets	19,742			20,253			10,634			10,830			9,808
Total assets	$	1,135,822		$	1,145,479		$	1,051,086		$	1,062,456		$	1,040,726

Liabilities
Noninterest demand	$	185,386		$	183,324		$	160,673		$	153,483		$	145,509
Interest-bearing demand	156,953			156,150			167,433			162,702			152,216
Money market and savings	306,357			324,014			274,993			274,605			271,259
Time deposits	311,490			318,147			286,600			316,275			291,858
Total deposits	960,187			981,635			889,699			907,065			860,842
Repurchase agreements	26,542			22,946			23,153			26,622			24,202
FHLB & other borrowings	6,000			—			60			18,505			43,048
Other liabilities	6,505			6,164			5,622			5,024			7,463
Total liabilities	999,234			1,010,745			918,535			957,216			935,556
Shareholders' Equity
Preferred stock	—			—			—			12			12
Common stock	8,243			8,219			8,211			5,896			5,885
Additional paid-in capital	107,065			106,794			106,703			83,463			83,330
Retained earnings	21,654			19,968			18,320			16,871			15,494
Accumulated other comprehensive loss	(374		)	(248		)	(683		)	(1,002		)	449
Total shareholders' equity	136,588			134,734			132,551			105,240			105,170
Total liabilities & shareholders' equity	$	1,135,822		$	1,145,479		$	1,051,086		$	1,062,456		$	1,040,726



SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
INCOME STATEMENT
	Three months ending
	September 30, 2017			June 30, 2017		March 31, 2017			December 31, 2016		September 30, 2016
Interest Income
Loans, including fees	$	11,491		$	10,747	$	10,216		$	10,324	$	10,111
Investment securities and interest bearing due froms	740			692		661			570		602
Other interest income	86			78		73			83		51
Total interest income	12,317			11,517		10,949			10,977		10,763
Interest Expense
Deposits	1,373			1,241		1,098			1,066		1,065
Repurchase agreements	15			16		16			17		17
FHLB and other borrowings	5			12		15			37		17
Total interest expense	1,393			1,268		1,129			1,121		1,099
Net interest income	10,924			10,249		9,820			9,856		9,665
Provision for loan losses	30			298		12			171		261
Net interest income after provision for loan losses	10,894			9,951		9,808			9,685		9,404
Noninterest income
Service charges on deposit accounts	294			291		265			277		296
Gain on securities	144			—		—			—		18
Gain on sale of loans and other assets	224			405		275			242		287
Gain (loss) on sale of foreclosed assets	(27		)	1		(16		)	6		130
Other non-interest income	585			556		402			422		472
Total noninterest income	1,220			1,253		927			948		1,204
Noninterest expense
Salaries and employee benefits	5,035			4,758		4,647			4,422		4,312
Occupancy expense	1,114			963		978			875		965
FDIC premiums	102			61		153			166		153
Foreclosed asset expense	20			12		—			37		79
Marketing	177			129		164			79		179
Data Processing	483			475		340			541		457
Professional expenses	472			473		570			558		558
Amortization of other intangibles	78			61		53			39		80
Service contracts	363			313		296			281		272
Other noninterest expense	1,703			1,584		944			1,028		994
Total noninterest expense	9,547			8,829		8,145			8,026		8,050
Earnings before income taxes	2,567			2,375		2,590			2,607		2,558
Income tax expense	882			726		946			960		947
Net income (loss)	1,685			1,649		1,644			1,647		1,611
Dividends on preferred stock	—			—		195			270		270
Net income available to common shareholders	$	1,685		$	1,649	$	1,449		$	1,377	$	1,341

NET INCOME PER COMMON SHARE
Basic	$	0.20		$	0.20	$	0.19		$	0.23	$	0.23
Diluted	0.20			0.20		0.19			0.22		0.22

Weighted average common shares outstanding
Basic	8,235			8,217		7,525			5,891		5,835
Diluted	8,333			8,326		7,631			6,206		6,096



SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
YIELD ANALYSIS
	Three Months Ended September 30, 2017						Three Months Ended June 30, 2017						Three Months Ended September 30, 2016
	Average				Yield/		Average				Yield/		Average				Yield/
	Balance		Interest *		Cost*		Balance		Interest *		Cost*		Balance		Interest *		Cost*
Assets
Loans	$	868,352	$	11,496	5.25	%	$	834,665	$	10,752	5.17	%	$	788,585	$	10,112	5.09	%
Investment securities and interest bearing due froms	142,089		757		2.11	%	138,965		707		2.04	%	159,683		615		1.53	%
Federal funds and other	31,864		86		1.07	%	18,503		78		1.69	%	5,442		51		3.72	%
Total interest-earning assets	1,042,305		12,339		4.70	%	992,133		11,537		4.66	%	953,710		10,778		4.48	%
Non-interest-earning assets	96,147						85,553						66,735
Total assets	$	1,138,452					$	1,077,686					$	1,020,445

Liabilities and Stockholders’ Equity
Interest-bearing demand deposits	$	153,838	$	118	0.30	%	$	156,387	$	115	0.29	%	$	147,102	$	73	0.20	%
Money market and savings deposits	329,933		519		0.62	%	300,448		424		0.57	%	268,307		283		0.42	%
Time deposits	311,668		736		0.94	%	305,171		702		0.92	%	312,889		709		0.90	%
Total interest-bearing deposits	795,439		1,373		0.68	%	762,006		1,241		0.65	%	728,298		1,065		0.58	%
Securities sold under agreement to repurchase	20,589		15		0.29	%	19,903		16		0.32	%	22,471		17		0.30	%
Federal Home Loan Bank advances and other borrowings	381		5		5.21	%	3,482		11		1.27	%	11,187		17		0.60	%
Total interest-bearing liabilities	816,409		1,393		0.68	%	785,391		1,268		0.65	%	761,956		1,099		0.57	%
Noninterest-bearing deposits	179,968						157,965						148,178
Other liabilities	5,978						659						6,194
Total liabilities	1,002,355						944,015						916,328
Shareholders’ equity	136,097						133,671						104,117
Total liabilities and stockholders’ equity	$	1,138,452					$	1,077,686					$	1,020,445

Net interest income, taxable equivalent			$	10,946					$	10,269					$	9,679
Interest rate spread					4.02	%					4.01	%					3.91	%
Tax equivalent net interest margin					4.17	%					4.15	%					4.03	%

Percentage of average interest-earning assets to average interest-bearing liabilities					127.67	%					126.32	%					125.17	%
Percentage of average equity to average assets					11.95	%					12.40	%					10.20	%
* Taxable equivalent basis



SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
NON-GAAP RECONCILIATIONS	Three months ending
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Net interest income, Taxable Equivalent
Net interest income (GAAP)	$	10,924		$	10,248		$	9,820		$	9,856		$	9,665
Taxable equivalent adjustment	22			21			21			22			14
Net interest income, Taxable Equivalent (Non-GAAP)	$	10,946		$	10,269		$	9,841		$	9,878		$	9,679

Operating Earnings¹
Net income (loss) (GAAP)	$	1,685		$	1,648		$	1,644		$	1,647		$	1,611
Securities (gains) losses	(144		)	—			—			—			(18		)
Foreclosed assets (gains) losses	27			—			15			(6		)	(130		)
Merger and conversion costs	303			420			—			—			—
Income tax effect of adjustments²	(71		)	(161		)	(6		)	2			57
Net operating earnings (Non-GAAP)	1,800			1,907			1,653			1,643			1,520
Dividends on preferred stock	—			—			(195		)	(270		)	(270		)
Net operating earnings available to common shareholders (Non-GAAP)	$	1,800		$	1,907		$	1,458		$	1,373		$	1,250
Net operating earnings per common share:
Basic	$	0.22		$	0.23		$	0.19		$	0.23		$	0.21
Diluted	0.22			0.23			0.19			0.22			0.21

Operating Efficiency Ratio
Efficiency ratio (GAAP)	78.62		%	76.77		%	75.79		%	74.29		%	74.06		%
Adjustment for taxable equivalent yields	(0.22		)%	(0.22		)%	(0.25		)%	(0.26		)%	(0.18		)%
Adjustment for securities gains (losses)	1.51		%	—		%	—		%	—		%	0.23		%
Adjustment for OREO gains (losses)	(0.28		)%	—		%	(0.18		)%	0.08		%	1.62		%
Adjustment for merger & conversion costs	(3.17		)%	(4.76		)%	—		%	—		%	—		%
Operating efficiency ratio (Non-GAAP)	76.46		%	71.79		%	75.36		%	74.11		%	75.73		%

Loan Discount Data
Allowance for loan losses (GAAP)	$	5,393		$	5,498		$	5,152		$	5,105		$	4,964
Net acquisition accounting fair value discounts to loans³	$	8,167		$	9,086		$	9,831		$	10,271		$	10,742

Tangible Common Equity
Shareholders' equity (GAAP)	$	136,588		$	134,734		$	132,551		$	105,240		$	105,170
Less preferred stock & preferred stock paid in capital	—			—			—			12,000			12,000
Less goodwill and other intangible assets	7,414			7,492			6,583			6,636			6,675
Tangible common equity (Non-GAAP)	$	129,174		$	127,242		$	125,968		$	86,604		$	86,495

¹ Operating earnings includes the following income and expenses related to past mergers and acquisitions:



	September 30, 2017	June 30, 2017	March 31, 2017	December 31, 2016	September 30, 2016
Accretion above contractual loan income (ASC 310-20 & 310-30)	888	696	540	430	450
Amortization of other intangibles	78	61	53	39	80

² Assumes 38.29% effective rate, except for those expenses which are not deductible for tax purposes

³ Includes ASC 310-20 and ASC 310-30 discounts