EX-99.2 4 ex99_2.htm EXHIBIT 99.2

Exhibit 99.2
Announces the Acquisition of Foothills Bancorp, Inc.June 27, 2018

2 Compliance Disclosure Important Information for ShareholdersThis presentation shall not constitute an offer to sell, the solicitation of an offer to sell, or the solicitation of an offer to buy any securities or the solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed transaction, SmartFinancial, Inc. (“SmartFinancial”) will file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”), which will contain the proxy statement of Foothills Bancorp, Inc. (“Foothills Bancorp”) and a prospectus of SmartFinancial. Shareholders of Foothills Bancorp are encouraged to read the registration statement, including the proxy statement/prospectus that will be part of the registration statement, because it will contain important information about the proposed transaction, Foothills Bancorp, and SmartFinancial. After the registration statement is filed with the SEC, the proxy statement/prospectus and other relevant documents will be mailed to Foothills Bancorp shareholders and will be available for free on the SEC’s website (www.sec.gov). The proxy statement/prospectus will also be made available for free by contacting Ron Gorczynski, SmartFinancial’s Chief Administrative Officer, at (865) 437-5724 or Mark Loudermilk, the President and Chief Executive Officer of Foothills Bancorp, at (865) 738-2230. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”).Participants in the SolicitationSmartFinancial, Foothills Bancorp and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Foothills Bancorp shareholders in connection with the proposed transaction under the rules of the SEC. Information about the directors and executive officers of SmartFinancial may be found in the definitive proxy statement of SmartFinancial filed with the SEC by SmartFinancial on April 2, 2018. This definitive proxy statement can be obtained free of charge from the sources indicated above. Information about the directors and executive officers of Foothills Bancorp will be included in the proxy statement/prospectus when filed with the SEC. Additional information regarding the interests of these participants will also be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available.

3 Legal Disclaimer Forward-Looking StatementsCertain of the statements made in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements, including statements regarding the intent, belief, or current expectations of SmartFinancial’s management regarding the company’s strategic direction, prospects, or future results or the benefits of the proposed transaction, are subject to numerous risks and uncertainties. Such risks and uncertainties include, among others, (1) expected revenue synergies and cost savings from the proposed transaction or the recently completed mergers with Tennessee Bancshares, Inc. (the “Tennessee Bancshares merger”) and Capstone Bancshares, Inc. (the “Capstone merger”) may not be fully realized or may take longer than anticipated to be realized, (2) disruption from the proposed transaction, the Tennessee Bancshares merger, or the Capstone merger with customers, suppliers, or employee or other business relationships, (3) the occurrence of any event, change, or other circumstances that could give rise to the termination of the agreement and plan of merger, (4) the risk of successful integration of the two organizations’ businesses, (5) the failure of Foothills Bancorp’s shareholders to approve the agreement and plan of merger, (6) the amount of costs, fees, expenses, and charges related to the proposed transaction; (7) risks of expansion into new geographic or product markets, like the proposed expansion into the Nashville, TN MSA associated with the Tennessee Bancshares merger, (8) the ability to obtain required governmental and regulatory approvals for the proposed transaction, (9) reputational risk and the reaction of the parties’ customers to the proposed transaction, (10) the failure of the conditions to closing of the proposed transaction to be satisfied, (11) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (12) the dilution caused by SmartFinancial’s issuance of additional shares of its common stock in the proposed transaction, (13) changes in management’s plans for the future, (14) prevailing economic and political conditions, particularly in our market areas, (15) credit risk associated with our lending activities, (16) changes in interest rates, loan demand, real estate values, and competition, (17) changes in accounting principles, policies, or guidelines, (18) changes in applicable laws, rules, or regulations, and (19) other competitive, economic, political, and market factors affecting our business, operations, pricing, products, and services. Certain additional factors which could affect the forward-looking statements can be found in SmartFinancial’s 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 SEC and available on the SEC’s website (www.sec.gov). SmartFinancial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, which speak only as of the date hereof, whether as a result of new information, future events, or otherwise.Non-GAAP Financial Measures Statements included in this presentation 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. The non-GAAP financial measures used in this presentation include: (i) tangible common equity, (ii) tangible book value per share, (iii) net interest margin, taxable equivalent, and (iv) efficiency ratio. Tangible common equity excludes total preferred stock, preferred stock paid in capital, goodwill, and other intangible assets, and tangible book value per share reflects the per share value of tangible common equity. Net interest margin, taxable equivalent and the efficiency ratio include the tax equivalent adjustments on tax-exempt income. 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.

The SmartFinancial Story SmartBank was founded in 2007 as a de novo bank in East Tennessee and has grown to an approximate $2.2 billion-asset franchise through prudent organic growth and a thoughtful series of mergers (pro forma for pending and recently completed transactions)The core franchise in East Tennessee has been expanded into additional attractive markets in Alabama, Florida, and the Nashville MSAThe corporate headquarters for holding company SmartFinancial, Inc. is based in Knoxville, TNThe company’s stock is traded on the Nasdaq Capital Market under the symbol “SMBK” and is included in several indexes, including the Russell 2000 SmartBank (legacy)GulfSouth Private BankCornerstone Community BankCleveland, TN BranchCapstone BankSouthern Community BankFoothills Bank & Trust(Today’s Announcement) Map Sources: S&P Global Market Intelligence, ESRI Panama City

An Emerging Southeast Acquirer SmartFinancial is transforming into an experienced and preferred Southeast acquirer, having completed five transactions that added low-cost core deposits in attractive markets across three statesNearly three-fourths of the total franchise’s assets and core deposits, including the pro forma impact of this announced transaction, have been assembled through a careful series of acquisitions since 2012SmartFinancial continues to have ongoing discussions with potential targets in existing and contiguous markets Source: S&P Global Market Intelligence

Disciplined Acquisition Strategy SmartFinancial has adhered to a disciplined set of merger criteria including:No more than 3 years of initial TBV-per-share dilutionMeaningful EPS accretion in the first full year of operationsConservative loan marksFranchise additiveSmartFinancial is committed to balancing organic growth with thoughtful acquisitions and will not make acquisitions simply for the sake of growthThe table below shows the initial projected impacts of the three whole bank acquisitions announced within the last 5 quarters 6

Transaction Overview

Foothills Overview Foothills Company Details Founded in 2007Strong asset quality and profitabilityThree branches in Knox and Blount countiesTop 4 deposit market share among locally based banks in the Knoxville MSA Knox – Blount – Sevier: Deposit Market Share Source: S&P Global Market IntelligenceNote: Deposits for market share analysis are as of 06/30/17 FDIC deposit survey, adjusted for acquisitions

Transaction Rationale Financially Attractive Low Risk Strategic Markets & Growth Conservative credit culture and credit marksIn-market transactionStraightforward integration Attractive financial transaction with strong geographic fitGood mix of synergistic opportunities and core market growthMeaningfully additive to SmartFinancial’s 1%+ core ROAA run rate target 6.5% and 8.0% projected EPS accretion in 2019(1) and 2020(2), respectivelyLess than 3 years to earn back initial TBVPS dilution (crossover method)Cash IRR > 20% Strengthens Tennessee footprintImproves market share position in the greater Knoxville regionAdds scale in attractive home market (1) Based off mean consensus estimate from S&P Global Market Intelligence as of 06/27/18(2) First full year of cost savesSources: Definitive Agreement, Company Documents

Transaction Terms (1) Based on SMBK’s 20-day average closing price of $25.44 as of 06/27/18(2) Based on Foothills Bancorp, Inc. unaudited financials as of 03/31/18Sources: Definitive Agreement, Company Documents Consideration Form 90% Stock / 10% Cash (each shareholder receives stock and cash) Per Share Consideration 0.666 SMBK share and $1.75 in cash per Foothills share Implied Announced Price per Share1 Implied Common Price per Share1 $18.69 Aggregate Announced Transaction Value1 Announced Transaction Value1 $36.2 million Management Retention Management Retention Key production personnel retained Termination Fee Termination Fee [Consistent with termination fees for other transaction of this type] $1.45 million Required Approvals Foothills shareholder and customary regulatory approvals Expected Closing 4th Quarter 2018 Estimated Transaction Multiples2 Price/LTM EPS: 21.7xPrice/ 1Q18 EPS (Annualized): 14.9xPrice/ TBVPS: 167.8%TBVPS Dilution Earn Back: ~2.7 Years (crossover method)

Key Transaction Assumptions Sources: Definitive Agreement, Company Documents Expected Cost Savings Merger & Integration Costs Treatment of Options Purchase Accounting & Other Adjustments Cost savings target = 34% of seller’s annual non-interest expense base75% realized in 2019100% realized thereafter Approximately $3.3 million in combined pre-tax merger expenses Total loan fair value mark of $3.95 millionEquals 2.5% on total loansCore Deposit Intangible = 1.6% of non-time deposits, S/L over 15 years 394,500 options cashed out for approximately $2.96 millionStrike price of $10.00 per share and $17.50 cash value

Knoxville, TN CSA Total Population: (2018 Estimate) 1,128,800 Projected 5-Year Population Growth:(2023 Projection) 3.64% Median HH Income:(2018 Estimate) $50,718 Projected %-year HHI Growth:(2023 Projection) $55,874 Total Market Deposits:(2017 FDIC deposit survey) $20.8B Selected Data: Knoxville, TN CSA Major Employers Knoxville has a strong business community, a diverse industrial base, and the steadying influence of a major university The University of Tennessee Drives Culture And InnovationOne of the meccas of college football, drawing hundreds of thousands of fans to Neyland Stadium on fall weekendsA student population of 28,000 and an annual $1.6B economic impactLarge medical campus is one of four in the state system that produces many of Tennessee’s doctors, dentists and nursesTennessee is the #2 state for medical equipment and supplies exports ($3.4B in 2017) Sources: Knox County Chamber of Commerce, UT Medical, Claritas, S&P Global Market Intelligence #5 “Best Place for Business and Careers” according to Forbes#9 “Hottest American City for Business Relocation and Expansion” according to Expansion ManagementTop 10 “America’s Best Cities For Global Trade” according to Global Trade20+ foreign countries have divisions or subsidiaries in the market Knoxville is a Desired Location for Business Market is officially called the Knoxville-Morristown-Sevierville Combined Statistical Area (CSA)

Foothills Bank & Trust Financial Highlights

Balance Sheet Metrics Total Assets ($000) Total Loans and Leases ($000) Total Deposits ($000) NPAs / Assets Source: S&P Global Market IntelligenceNote: Data is bank level for Foothills Bank & Trust

Performance Ratios Return on Average Assets Return on Average Equity Net Interest Margin Efficiency Ratio Source: S&P Global Market IntelligenceNote: Data is bank level for Foothills Bank & Trust

Pro Forma Company

Pro Forma Footprint and Highlights Combined TN Counties of Operation: Deposit Market Share TENNESSEE FLORIDA ALABAMA Birmingham Tallahassee Knoxville Nashville Montgomery Tuscaloosa SmartFinancial, Inc. Foothills Bancorp, Inc. Pro Forma Highlights Source: S&P Global Market IntelligenceNote: Deposits for market share analysis are as of 06/30/17 FDIC deposit survey, adjusted for acquisitions Huntsville Panama City Pensacola Mobile Chattanooga Murfreesboro

Pro Forma Loan Composition (1) Pro forma for 05/01/18 acquisition of Tennessee Bancshares, Inc. Source: S&P Global Market Intelligence

Pro Forma Deposit Composition (1) Pro forma for 05/01/18 acquisition of Tennessee Bancshares, Inc. Source: S&P Global Market Intelligence

Billy Carroll President & CEO(865) 868-0613Billy.Carroll@SmartBank.com Miller Welborn SmartFinancial, Inc.5401 Kingston Pike, Suite 600Knoxville, TN 37919 Chairman(423) 385-3067Miller.Welborn@SmartBank.com Investor Contacts