EX-99.1 2 smbk-20220124xex99d1.htm EX-99.1

Exhibit 99.1

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4Q 2021

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SmartFinancial Announces Results for the Fourth Quarter 2021

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Highlights for the Fourth Quarter of 2021

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| ● | Operating earnings1 of $0.52 and $2.39 per diluted common share for the 2021 fourth quarter and year end, respectively

| ● | 31% increase in year-over-year operating earnings1 per diluted common share

| ● | Net organic loan growth of over $75 million, a 12% annualized quarter-over-quarter increase

| ● | Tangible book value per share1 of $19.26, a 4.8% annualized quarter-over-quarter increase

| ● | Strategic Nashville, TN MSA2 enhancement with several senior relationship manager hires

| ● | Gulf Coast Wealth Management team lift-out previously responsible for managing ~$350 million in AUM2

| ● | Completion of Sevier County Bancshares, Inc. (“SCB”) integration; five branch closures with near full realization of operational efficiencies

| ● | Opening of Mobile, AL branch office and application approval of Auburn, Dothan and Montgomery branch offices

| ● | Opening of Birmingham, AL loan production office

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KNOXVILLE, TN – January 24, 2022 - SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NASDAQ: SMBK), today announced net income of $6.7 million, or $0.40 per diluted common share, for the fourth quarter of 2021, compared to net income of $9.0 million, or $0.59 per diluted common share, for the fourth quarter of 2020, and compared to prior quarter net income of $9.6 million, or $0.61 per diluted common share. Operating earnings (Non-GAAP), which excludes securities gains, merger related and restructuring expenses and non-operating items, totaled $8.7 million, or $0.52 per diluted common share, in the fourth quarter of 2021, compared to $9.2 million, or $0.61 per diluted common share, in the fourth quarter of 2020, and compared to $9.9 million, or $0.63 per diluted common share, in the third quarter of 2021.

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Billy Carroll, President & CEO, stated: “SmartFinancial reported another solid quarter as we wrapped up an outstanding year for our company. Loans and deposits continued to organically grow at a strong pace. We also expanded our sales team again this quarter with experienced and seasoned industry professionals. The investments we made in 2021 are positioning us very well as we look into 2022 and beyond.”

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SmartFinancial's Chairman, Miller Welborn, concluded: “We couldn’t be more excited about where we are as a company. Our 2021 was a fantastic year on many fronts and it’s nice to finish with strong numbers and incredible momentum. Our team is poised and ready for 2022”.

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Net Interest Income and Net Interest Margin

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Net interest income was $29.9 million for the fourth quarter of 2021, compared to $30.4 million for the prior quarter. Average earning assets totaled $4.08 billion, an increase of $469.4 million. The growth in average earnings assets was primarily driven by an increase in average securities of $167.7 million, average interest-earning cash of $163.2 million and average loans and leases of $137.3 million. Average interest-bearing liabilities increased $354.3 million, related to continued core deposit growth.

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The tax equivalent net interest margin was 2.92% for the fourth quarter of 2021, compared to 3.35% for the prior quarter. The tax equivalent net interest margin was impacted by a 47 basis point decrease in the average yield on interest-earning assets and offset by a 5 basis point decline in the rate on interest-bearing liabilities over the prior quarter. The decrease in yield on interest-earning assets was due to the combined impact of a quarter-over-quarter loan discount accretion and Payroll Protection Program (“PPP”) fee accretion decrease of $2.5 million and increased interest-earning cash position.

1 Non-GAAP

2 Metropolitan Statistical Area (“MSA”); Assets Under Management (“AUM”)

The yield on interest-bearing liabilities decreased to 0.39% for the fourth quarter of 2021 compared to 0.44% for the prior quarter. The cost of average interest-bearing deposits was 0.29% for the fourth quarter of 2021 compared to 0.34% for the prior quarter, a decrease of 5 basis points. The lower cost of average deposits was attributable to the maturing and repricing of time deposits, which decreased 13 basis points during the period. The cost of total deposits for the fourth quarter of 2021 was 0.22% compared to 0.25% in the prior quarter.

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

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | ​
​ | ​ | Dec | ​ | Sep | ​ | Increase | ​
Selected Interest Rates and Yields | ​ | 2021 | ​ | 2021 | ​ | (Decrease) | ​
Yield on loans and leases | ​ | 4.53 | % | 4.95 | % | (0.42) | %
Yield on earning assets, FTE | ​ | 3.20 | % | 3.67 | % | (0.47) | %
Cost of interest-bearing deposits | ​ | 0.29 | % | 0.34 | % | (0.05) | %
Cost of total deposits | ​ | 0.22 | % | 0.25 | % | (0.03) | %
Cost of interest-bearing liabilities | ​ | 0.39 | % | 0.44 | % | (0.05) | %
Net interest margin, FTE | ​ | 2.92 | % | 3.35 | % | (0.43) | %

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Provision for Loan and Lease Losses and Credit Quality

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At December 31, 2021, the allowance for loan and lease losses was $19.4 million. The allowance for loan and lease losses to total loans and leases was 0.72% as of December 31, 2021, compared to 0.73% as of September 30, 2021. For the Company’s originated loans and leases, the allowance for loan and lease losses to originated loans and leases, less PPP loans, was 0.74% as of December 31, 2021, compared to 0.76% as of September 30, 2021. The remaining discounts on the acquired loan and lease portfolio totaled $15.5 million, or 3.42% of acquired loans and leases as of December 31, 2021.

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

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Dec | ​ | ​ | Sep | ​ | ​ | ​ | ​
​ | Provision for Loan and Lease Losses Rollforward | ​ | ​ | 2021 | ​ | ​ | 2021 | ​ | ​ | Change | ​
​ | Beginning balance | ​ | $ | 19,295 | ​ | $ | 18,310 | ​ | $ | 985 | ​
​ | Charge-offs | ​ | ​ | (499) | ​ | ​ | (239) | ​ | ​ | (260) | ​
​ | Recoveries | ​ | ​ | 134 | ​ | ​ | 75 | ​ | ​ | 59 | ​
​ | Net charge-offs | ​ | ​ | (365) | ​ | ​ | (164) | ​ | ​ | (201) | ​
​ | Provision | ​ | ​ | 422 | ​ | ​ | 1,149 | ​ | ​ | 727 | ​
​ | Ending balance | ​ | $ | 19,352 | ​ | $ | 19,295 | ​ | $ | 57 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Allowance for loan losses to total loans and leases, gross | ​ | ​ | 0.72 | % | ​ | 0.73 | % | ​ | (0.01) | %

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The Company is not required to implement the provisions of the Current Expected Credit Losses (“CECL”) accounting standard until January 1, 2023 and is continuing to account for the allowance for loan and lease losses under the incurred loss model.

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Nonperforming loans and leases as a percentage of total loans and leases was 0.12% as of December 31, 2021, a decrease of 1 basis point from the 0.13% reported in the third quarter of 2021. 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 0.11% as of December 31, 2021, as compared to 0.14% as of September 30, 2021.

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2

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

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Dec | ​ | ​ | Sep | ​ | ​ | Increase | ​
​ | Credit Quality | ​ | ​ | 2021 | ​ | ​ | 2021 | ​ | ​ | (Decrease) | ​
​ | Nonaccrual loans and leases | ​ | $ | 3,124 | ​ | $ | 3,567 | ​ | $ | (443) | ​
​ | Loans and leases past due 90 days or more and still accruing | ​ | ​ | 64 | ​ | ​ | - | ​ | ​ | 64 | ​
​ | Total nonperforming loans and leases | ​ | ​ | 3,188 | ​ | ​ | 3,567 | ​ | ​ | (379) | ​
​ | Other real estate owned | ​ | ​ | 1,780 | ​ | ​ | 2,415 | ​ | ​ | (635) | ​
​ | Other repossessed assets | ​ | ​ | 90 | ​ | ​ | 77 | ​ | ​ | 13 | ​
​ | Total nonperforming assets | ​ | $ | 5,058 | ​ | $ | 6,059 | ​ | $ | (1,001) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Nonperforming loans and leases to total loans and leases, gross | ​ | ​ | 0.12 | % | ​ | 0.13 | % | ​ | (0.01) | %
​ | Nonperforming assets to total assets | ​ | ​ | 0.11 | % | ​ | 0.14 | % | ​ | (0.03) | %

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Noninterest Income

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Noninterest income increased $497 thousand to $6.8 million for the fourth quarter of 2021 compared to $6.3 million for the prior quarter. During the fourth quarter of 2021, the primary components of the changes in noninterest income were as follows:

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| ● | Increase in service charges on deposit accounts, related to the SCB acquisition, account growth and transaction volume;

| ● | Increase in investment income, related to increased volume;

| ● | Decrease in insurance commissions, due to lower transaction volume, primarily driven by seasonality;

| ● | Increased interchange and debit card transaction fees, related to higher volume, account growth and the SCB acquisition; and

| ● | Increase in other, primarily from the gain on sale of credit card portfolio.

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

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | ​
​ | ​ | ​ | Dec | ​ | ​ | Sep | ​ | ​ | Increase
Noninterest Income | ​ | ​ | 2021 | ​ | ​ | 2021 | ​ | ​ | (Decrease)
Service charges on deposit accounts | ​ | $ | 1,372 | ​ | $ | 1,220 | ​ | $ | 152
Gain (loss) on sale of securities, net | ​ | ​ | - | ​ | ​ | 45 | ​ | ​ | (45)
Mortgage banking income | ​ | ​ | 803 | ​ | ​ | 994 | ​ | ​ | (191)
Investment services | ​ | ​ | 621 | ​ | ​ | 448 | ​ | ​ | 173
Insurance commissions | ​ | ​ | 517 | ​ | ​ | 745 | ​ | ​ | (228)
Interchange and debit card transaction fees | ​ | ​ | 1,445 | ​ | ​ | 1,078 | ​ | ​ | 367
Other | ​ | ​ | 2,048 | ​ | ​ | 1,779 | ​ | ​ | 269
Total noninterest income | ​ | $ | 6,806 | ​ | $ | 6,309 | ​ | $ | 497

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3

Noninterest Expense

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Noninterest expense increased $4.5 million to $27.8 million for the fourth quarter of 2021 compared to $23.3 million for the prior quarter. During the fourth quarter of 2021, the primary components of the changes in noninterest expense were as follows:

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| ● | Increase in salaries and employee benefits, primarily due to:

| o | Additional personnel related to the SCB acquisition;

| o | Banking team hires in Auburn, Dothan, Montgomery and Birmingham, AL, Tallahassee, FL and Nashville, TN;

| o | The Gulf Coast Wealth Management team lift-out;

| ● | Increase in occupancy and equipment expense from the SCB acquisition and expansion in Alabama; and

| ● | Increase in other expense, primarily related to overall franchise growth.

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

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | ​
​ | ​ | ​ | Dec | ​ | ​ | Sep | ​ | ​ | Increase
Noninterest Expense | ​ | ​ | 2021 | ​ | ​ | 2021 | ​ | ​ | (Decrease)
Salaries and employee benefits | ​ | $ | 14,990 | ​ | $ | 13,594 | ​ | $ | 1,396
Occupancy and equipment | ​ | ​ | 3,026 | ​ | ​ | 2,536 | ​ | ​ | 490
FDIC insurance | ​ | ​ | 567 | ​ | ​ | 525 | ​ | ​ | 42
Other real estate and loan related expenses | ​ | ​ | 583 | ​ | ​ | 407 | ​ | ​ | 176
Advertising and marketing | ​ | ​ | 176 | ​ | ​ | 235 | ​ | ​ | (59)
Data processing and technology | ​ | ​ | 1,722 | ​ | ​ | 1,753 | ​ | ​ | (31)
Professional services | ​ | ​ | 847 | ​ | ​ | 810 | ​ | ​ | 37
Amortization of intangibles | ​ | ​ | 660 | ​ | ​ | 711 | ​ | ​ | (51)
Merger related and restructuring expenses | ​ | ​ | 2,762 | ​ | ​ | 464 | ​ | ​ | 2,298
Other | ​ | ​ | 2,490 | ​ | ​ | 2,274 | ​ | ​ | 216
Total noninterest expense | ​ | $ | 27,823 | ​ | $ | 23,309 | ​ | $ | 4,514

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Income Tax Expense

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Income tax expense was $1.8 million for the fourth quarter of 2021, a decrease of $872 thousand, compared to $2.6 million for the prior quarter.

The effective tax rate was 20.9% for the fourth quarter of 2021 and 21.5% for the prior quarter.

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Balance Sheet Trends

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Total assets at December 31, 2021 were $4.61 billion compared with $3.30 billion at December 31, 2020. The increase of $1.31 billion is primarily attributable to increases in cash and cash equivalents of $563.4 million, securities of $343.8 million, loans and leases of $311.2 million, bank owned life insurance of $48.4 million and goodwill and intangibles of $19.4 million related to the SCB acquisition and the acquisition of Fountain Equipment Finance, LLC.

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Total liabilities increased to $4.18 billion at December 31, 2021 from $2.95 billion at December 31, 2020. The increase of $1.23 billion was primarily from organic deposit growth of $809.8 million and deposits of $407.0 million from the SCB acquisition.

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Shareholders' equity at December 31, 2021 totaled $429.4 million, an increase of $72.3 million, from December 31, 2020. The increase in shareholders' equity was primarily from the issuance of $42.3 million of common stock for the acquisition of SCB and net income of $34.8 million for the twelve months ended December 31, 2021, which was offset by repurchase of the Company's common stock of $1.2 million and $3.7 million of dividends paid. Tangible book value per share (Non-GAAP) was $19.26 at December 31, 2021, compared to $17.92 at December 31, 2020. Tangible common equity (Non-GAAP) as a percentage of tangible assets (Non-GAAP) was 7.18% at December 31, 2021, compared with 8.41% at December 31, 2020.

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4

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

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Dec | ​ | Dec | ​ | Increase | ​
Selected Balance Sheet Information | ​ | 2021 | ​ | 2020 | ​ | (Decrease) | ​
Total assets | ​ | $ | 4,611,579 | ​ | $ | 3,304,949 | ​ | $ | 1,306,630 | ​
Total liabilities | ​ | ​ | 4,182,149 | ​ | ​ | 2,947,781 | ​ | ​ | 1,234,368 | ​
Total equity | ​ | ​ | 429,430 | ​ | ​ | 357,168 | ​ | ​ | 72,262 | ​
Securities | ​ | ​ | 559,422 | ​ | ​ | 215,634 | ​ | ​ | 343,788 | ​
Loans and leases | ​ | ​ | 2,693,397 | ​ | ​ | 2,382,243 | ​ | ​ | 311,154 | ​
Deposits | ​ | ​ | 4,021,938 | ​ | ​ | 2,805,215 | ​ | ​ | 1,216,723 | ​
Borrowings | ​ | ​ | 87,585 | ​ | ​ | 81,199 | ​ | ​ | 6,386 | ​

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Conference Call Information

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SmartFinancial issued this earnings release for the fourth quarter of 2021 on Monday, January 24, 2022, and will host a conference call on Tuesday, January 25, 2022, at 10:00 a.m. ET. To access this interactive teleconference, dial (844) 200-6205 for United States or +1 (929) 526-1599 for other locations and enter the access code, 574606. A replay of the conference call will be available through March 26, 2022, by dialing (866) 813-9403 for United States or +44 (204) 525-0658 and entering the access code, 247688. Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 am ET prior to the conference call.

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About SmartFinancial, Inc.

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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 the Florida Panhandle. 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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Source | ​
SmartFinancial, Inc. | ​
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Investor Contacts | ​
Billy Carroll | ​
President & CEO | ​
(865) 868-0613 billy.carroll@smartbank.com | ​
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Ron Gorczynski | ​
Executive Vice President, Chief Financial Officer | ​
(865) 437-5724 ron.gorczynski@smartbank.com | ​
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Media Contact | ​
Kelley Fowler | ​
Senior Vice President, Public Relations & Marketing | ​
(865) 868-0611 kelley.fowler@smartbank.com | ​
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5

Non-GAAP Financial Measures

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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 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, including: (i) operating earnings, (ii) operating return on average assets, (iii) operating pre-tax pre-provision return on average assets, (iv) operating return on average shareholders' equity, (v) return on average tangible common equity, (vi) operating return on average tangible common equity, (vii) operating efficiency ratio, (viii) operating noninterest income, (ix) operating pre-tax pre-provision earnings (x) operating noninterest expense, (xi) tangible common equity, (xii) average tangible common equity, (xiii) tangible book value; (xiv) tangible assets; and ratios derived therefrom, in its analysis of the company's performance. Operating earnings excludes the following from net income: securities gains and losses, proceeds related to the termination of an Alabama Department of Economic and Community Affairs (“ADECA”) loan program, merger related and restructuring expenses. Operating return on average assets is the annualized operating earnings (Non-GAAP) divided by average assets. Operating pre-tax pre-provision return on average assets is the annualized operating pre-tax pre-provision income earnings (Non-GAAP) by average assets. Operating return on average shareholders' equity is the annualized operating earnings (Non-GAAP) divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity (Non-GAAP). Operating return on average tangible common equity is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP). The operating efficiency ratio includes an adjustment for taxable equivalent yields and excludes securities gains and losses and merger related and restructuring expenses from the efficiency ratio. Operating noninterest income excludes the following from noninterest income: securities gains and losses, proceeds related to the termination of the ADECA loan program. Operating pre-tax pre-provision earnings is net interest income plus operating noninterest income (Non-GAAP) less operating noninterest expense (Non-GAAP). Operating noninterest expense excludes the following from noninterest expense: prior year adjustments to salaries, merger related and restructuring expenses and certain franchise tax true-up expenses. Tangible common equity and average tangible common equity excludes goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively. Tangible book value is tangible common equity (Non-GAAP) divided by common shares outstanding. Tangible assets excludes goodwill and other intangibles from total assets. 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 believes these non-GAAP financial measures also 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.

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6

Forward-Looking Statements

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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, including statements regarding the effects of the COVID-19 pandemic and related variants on the Company’s business and financial results and conditions, 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) the risk that cost savings and revenue synergies from recently completed acquisitions may not be realized or may take longer than anticipated to realize; (4) disruption from recently completed acquisitions with customer, supplier, employee, or other business relationships; (5) our ability to successfully integrate the businesses acquired as part of previous acquisitions with the business of SmartBank; (6) risks related to the acquisition of Sevier County Bancshares, Inc. (“SCB”); (7) the risk that the anticipated benefits from the acquisition of SCB may not be realized in the time frame anticipated; (8) changes in management’s plans for the future; (9) prevailing, or changes in, economic or political conditions, particularly in our market areas; (10) credit risk associated with our lending activities; (11) changes in interest rates, loan demand, real estate values, or competition; (12) changes in accounting principles, policies, or guidelines; (13) changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19 and related variants; (14) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs related to the COVID-19 pandemic and related variants; (15) the impact of the COVID-19 pandemic and related variants on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (16) potential increases in the provision for loan losses resulting from the COVID-19 pandemic and related variants; 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.

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7

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ending Balances
​ | ​ | Dec |  | Sep |  | Jun |  | Mar |  | Dec
​ | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2020
Assets: | ​ | ​ | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Cash and cash equivalents | ​ | $ | 1,045,077 | ​ | $ | 1,091,160 | ​ | $ | 673,515 | ​ | $ | 556,701 | ​ | $ | 481,719
Securities available-for-sale, at fair value | ​ |  | 482,453 | ​ |  | 339,343 | ​ |  | 250,817 | ​ |  | 250,937 | ​ |  | 215,634
Securities held-to-maturity, at amortized cost | ​ | ​ | 76,969 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Other investments | ​ |  | 16,494 | ​ |  | 14,972 | ​ |  | 14,584 | ​ |  | 14,728 | ​ |  | 14,794
Loans held for sale | ​ |  | 5,103 | ​ |  | 3,418 | ​ |  | 4,334 | ​ |  | 7,870 | ​ |  | 11,721
Loans and leases | ​ |  | 2,693,397 | ​ |  | 2,652,663 | ​ |  | 2,468,318 | ​ |  | 2,487,129 | ​ |  | 2,382,243
Less: Allowance for loan and lease losses | ​ |  | (19,352) | ​ |  | (19,295) | ​ |  | (18,310) | ​ |  | (18,370) | ​ |  | (18,346)
Loans and leases, net | ​ |  | 2,674,045 | ​ |  | 2,633,368 | ​ |  | 2,450,008 | ​ |  | 2,468,759 | ​ |  | 2,363,897
Premises and equipment, net | ​ |  | 85,958 | ​ |  | 85,346 | ​ |  | 72,314 | ​ |  | 72,697 | ​ |  | 72,682
Other real estate owned | ​ |  | 1,780 | ​ |  | 2,415 | ​ |  | 2,499 | ​ |  | 3,946 | ​ |  | 4,619
Goodwill and other intangibles, net | ​ |  | 105,852 | ​ |  | 104,930 | ​ |  | 90,966 | ​ |  | 86,350 | ​ |  | 86,471
Bank owned life insurance | ​ |  | 79,619 | ​ |  | 79,145 | ​ |  | 72,013 | ​ |  | 71,586 | ​ |  | 31,215
Other assets | ​ |  | 38,229 | ​ |  | 29,934 | ​ |  | 23,306 | ​ |  | 23,629 | ​ |  | 22,197
Total assets | ​ | $ | 4,611,579 | ​ | $ | 4,384,031 | ​ | $ | 3,654,356 | ​ | $ | 3,557,203 | ​ | $ | 3,304,949
Liabilities: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Noninterest-bearing demand | ​ | $ | 1,055,125 | ​ | $ | 977,180 | ​ | $ | 807,560 | ​ | $ | 777,968 | ​ | $ | 685,957
Interest-bearing demand | ​ |  | 899,158 | ​ |  | 847,007 | ​ |  | 702,470 | ​ |  | 683,887 | ​ |  | 649,129
Money market and savings | ​ |  | 1,493,007 | ​ |  | 1,389,393 | ​ |  | 1,140,029 | ​ |  | 1,073,941 | ​ |  | 919,631
Time deposits | ​ |  | 574,648 | ​ |  | 585,692 | ​ |  | 489,413 | ​ |  | 512,417 | ​ |  | 550,498
Total deposits | ​ |  | 4,021,938 | ​ |  | 3,799,272 | ​ |  | 3,139,472 | ​ |  | 3,048,213 | ​ |  | 2,805,215
Borrowings | ​ |  | 87,585 | ​ |  | 88,748 | ​ |  | 78,834 | ​ |  | 82,642 | ​ |  | 81,199
Subordinated debt | ​ |  | 41,930 | ​ |  | 41,909 | ​ |  | 39,388 | ​ |  | 39,367 | ​ |  | 39,346
Other liabilities | ​ |  | 30,696 | ​ |  | 29,382 | ​ |  | 23,269 | ​ |  | 22,923 | ​ |  | 22,021
Total liabilities | ​ |  | 4,182,149 | ​ |  | 3,959,311 | ​ |  | 3,280,963 | ​ |  | 3,193,145 | ​ |  | 2,947,781
Shareholders' Equity: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Common stock | ​ |  | 16,803 | ​ |  | 16,801 | ​ |  | 15,110 | ​ |  | 15,105 | ​ |  | 15,107
Additional paid-in capital | ​ |  | 292,937 | ​ |  | 292,760 | ​ |  | 252,039 | ​ |  | 251,836 | ​ |  | 252,693
Retained earnings | ​ |  | 118,247 | ​ |  | 112,600 | ​ |  | 103,906 | ​ |  | 96,034 | ​ |  | 87,185
Accumulated other comprehensive income | ​ |  | 1,443 | ​ |  | 2,559 | ​ |  | 2,338 | ​ |  | 1,083 | ​ |  | 2,183
Total shareholders' equity | ​ |  | 429,430 | ​ |  | 424,720 | ​ |  | 373,393 | ​ |  | 364,058 | ​ |  | 357,168
Total liabilities & shareholders' equity | ​ | $ | 4,611,579 | ​ | $ | 4,384,031 | ​ | $ | 3,654,356 | ​ | $ | 3,557,203 | ​ | $ | 3,304,949

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8

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
​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2020 | ​ | 2021 | ​ | 2020
Interest income: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​
Loans and leases, including fees | $ | 30,567 | ​ | $ | 31,674 | ​ | $ | 28,323 | ​ | $ | 28,018 | ​ | $ | 28,594 | ​ | $ | 118,582 | ​ | $ | 112,312
Investment securities: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Taxable |  | 1,341 | ​ |  | 832 | ​ |  | 916 | ​ |  | 724 | ​ |  | 609 | ​ |  | 3,813 | ​ |  | 2,423
Tax-exempt |  | 322 | ​ |  | 331 | ​ |  | 304 | ​ |  | 259 | ​ |  | 306 | ​ |  | 1,215 | ​ |  | 1,369
Federal funds sold and other earning assets |  | 547 | ​ |  | 474 | ​ |  | 309 | ​ |  | 291 | ​ |  | 303 | ​ |  | 1,622 | ​ |  | 1,509
Total interest income |  | 32,777 | ​ |  | 33,311 | ​ |  | 29,852 | ​ |  | 29,292 | ​ |  | 29,812 | ​ |  | 125,232 | ​ |  | 117,613
Interest expense: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits |  | 2,116 | ​ |  | 2,153 | ​ |  | 2,248 | ​ |  | 2,331 | ​ |  | 2,580 | ​ |  | 8,849 | ​ |  | 13,597
Borrowings |  | 180 | ​ |  | 121 | ​ |  | 123 | ​ |  | 117 | ​ |  | 142 | ​ |  | 540 | ​ |  | 816
Subordinated debt |  | 626 | ​ |  | 655 | ​ |  | 584 | ​ |  | 584 | ​ |  | 584 | ​ |  | 2,449 | ​ |  | 2,334
Total interest expense |  | 2,922 | ​ |  | 2,929 | ​ |  | 2,955 | ​ |  | 3,032 | ​ |  | 3,306 | ​ |  | 11,838 | ​ |  | 16,747
Net interest income |  | 29,855 | ​ |  | 30,382 | ​ |  | 26,897 | ​ |  | 26,260 | ​ |  | 26,506 | ​ |  | 113,394 | ​ |  | 100,866
Provision for loan and lease losses |  | 422 | ​ |  | 1,149 | ​ |  | (5) | ​ |  | 67 | ​ |  | — | ​ |  | 1,633 | ​ |  | 8,683
Net interest income after provision for loan and lease losses |  | 29,433 | ​ |  | 29,233 | ​ |  | 26,902 | ​ |  | 26,193 | ​ |  | 26,506 | ​ |  | 111,761 | ​ |  | 92,183
Noninterest income: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Service charges on deposit accounts |  | 1,372 | ​ |  | 1,220 | ​ |  | 1,048 | ​ |  | 1,009 | ​ |  | 1,032 | ​ |  | 4,650 | ​ |  | 3,403
Gain (loss) on sale of securities, net |  | — | ​ |  | 45 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 45 | ​ |  | 6
Mortgage banking |  | 803 | ​ |  | 994 | ​ |  | 1,105 | ​ |  | 1,139 | ​ |  | 1,331 | ​ |  | 4,040 | ​ |  | 3,875
Investment services |  | 621 | ​ |  | 448 | ​ |  | 567 | ​ |  | 531 | ​ |  | 407 | ​ |  | 2,167 | ​ |  | 1,566
Insurance commissions |  | 517 | ​ |  | 745 | ​ |  | 557 | ​ |  | 1,466 | ​ |  | 548 | ​ |  | 3,285 | ​ |  | 1,850
Interchange and debit card transaction fees |  | 1,445 | ​ |  | 1,078 | ​ |  | 922 | ​ |  | 839 | ​ |  | 760 | ​ |  | 4,284 | ​ |  | 2,413
Other |  | 2,048 | ​ |  | 1,779 | ​ |  | 944 | ​ |  | 707 | ​ |  | 898 | ​ |  | 5,478 | ​ |  | 2,313
Total noninterest income |  | 6,806 | ​ |  | 6,309 | ​ |  | 5,143 | ​ |  | 5,691 | ​ |  | 4,976 | ​ |  | 23,949 | ​ |  | 15,426
Noninterest expense: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Salaries and employee benefits |  | 14,990 | ​ |  | 13,594 | ​ |  | 12,203 | ​ |  | 10,869 | ​ |  | 11,516 | ​ |  | 51,656 | ​ |  | 42,911
Occupancy and equipment |  | 3,026 | ​ |  | 2,536 | ​ |  | 2,294 | ​ |  | 2,341 | ​ |  | 2,256 | ​ |  | 10,196 | ​ |  | 8,348
FDIC insurance |  | 567 | ​ |  | 525 | ​ |  | 371 | ​ |  | 371 | ​ |  | 297 | ​ |  | 1,833 | ​ |  | 1,190
Other real estate and loan related expense |  | 583 | ​ |  | 407 | ​ |  | 506 | ​ |  | 602 | ​ |  | 516 | ​ |  | 2,098 | ​ |  | 2,050
Advertising and marketing |  | 176 | ​ |  | 235 | ​ |  | 230 | ​ |  | 190 | ​ |  | 181 | ​ |  | 830 | ​ |  | 834
Data processing and technology |  | 1,722 | ​ |  | 1,753 | ​ |  | 1,509 | ​ |  | 1,379 | ​ |  | 1,182 | ​ |  | 6,364 | ​ |  | 4,476
Professional services |  | 847 | ​ |  | 810 | ​ |  | 849 | ​ |  | 641 | ​ |  | 786 | ​ |  | 3,147 | ​ |  | 2,958
Amortization of intangibles |  | 660 | ​ |  | 711 | ​ |  | 441 | ​ |  | 444 | ​ |  | 571 | ​ |  | 2,256 | ​ |  | 1,740
Merger related and restructuring expenses |  | 2,762 | ​ |  | 464 | ​ |  | 372 | ​ |  | 103 | ​ |  | 702 | ​ |  | 3,701 | ​ |  | 4,565
Other |  | 2,490 | ​ |  | 2,274 | ​ |  | 2,022 | ​ |  | 2,524 | ​ |  | 1,946 | ​ |  | 9,310 | ​ |  | 7,647
Total noninterest expense |  | 27,823 | ​ |  | 23,309 | ​ |  | 20,797 | ​ |  | 19,464 | ​ |  | 19,953 | ​ |  | 91,391 | ​ |  | 76,719
Income before income taxes |  | 8,416 | ​ |  | 12,233 | ​ |  | 11,248 | ​ |  | 12,420 | ​ |  | 11,529 | ​ |  | 44,319 | ​ |  | 30,890
Income tax expense |  | 1,761 | ​ |  | 2,633 | ​ |  | 2,470 | ​ |  | 2,664 | ​ |  | 2,499 | ​ |  | 9,529 | ​ |  | 6,558
Net income | $ | 6,655 | ​ | $ | 9,600 | ​ | $ | 8,778 | ​ | $ | 9,756 | ​ | $ | 9,030 | ​ | $ | 34,790 | ​ | $ | 24,332
Earnings per common share: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic | $ | 0.40 | ​ | $ | 0.62 | ​ | $ | 0.59 | ​ | $ | 0.65 | ​ | $ | 0.60 | ​ | $ | 2.23 | ​ | $ | 1.63
Diluted | $ | 0.40 | ​ | $ | 0.61 | ​ | $ | 0.58 | ​ | $ | 0.65 | ​ | $ | 0.59 | ​ | $ | 2.22 | ​ | $ | 1.62
Weighted average common shares outstanding: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic |  | 16,699,010 | ​ |  | 15,557,528 | ​ |  | 15,003,657 | ​ |  | 15,011,573 | ​ |  | 15,109,298 | ​ |  | 15,572,537 | ​ |  | 14,955,423
Diluted |  | 16,846,315 | ​ |  | 15,691,126 | ​ |  | 15,126,184 | ​ |  | 15,111,947 | ​ |  | 15,182,796 | ​ |  | 15,699,215 | ​ |  | 15,019,175

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​

​

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9

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended |
​ | ​ | December 31, 2021 | ​ | September 30, 2021 | ​ | December 31, 2020 |
​ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  |  | ​ |  | Yield/ |
​ | ​ | Balance | ​ | Interest1 | ​ | Cost1 | ​ | Balance | ​ | Interest1 | ​ | Cost1 | ​ | Balance | ​ | Interest1 | ​ | Cost1 |
Assets: |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  | ​
Loans and leases, including fees2 | ​ | $ | 2,669,943 | ​ | $ | 30,510 |  | 4.53 | % | $ | 2,532,604 | ​ | $ | 31,623 |  | 4.95 | % | $ | 2,401,406 | ​ | $ | 28,506 |  | 4.72 | %
Loans held for sale | ​ | ​ | 5,116 | ​ | ​ | 57 | ​ | 4.45 | % | ​ | 3,987 | ​ | ​ | 51 | ​ | 5.09 | % | ​ | 10,191 | ​ | ​ | 88 | ​ | 3.45 | %
Taxable securities | ​ |  | 339,371 | ​ |  | 1,341 |  | 1.57 | % |  | 187,032 | ​ |  | 832 |  | 1.77 | % |  | 119,936 | ​ |  | 609 |  | 2.02 | %
Tax-exempt securities | ​ |  | 102,989 | ​ |  | 479 |  | 1.85 | % |  | 87,621 | ​ |  | 477 |  | 2.16 | % |  | 90,200 | ​ |  | 456 |  | 2.01 | %
Federal funds sold and other earning assets | ​ |  | 965,899 | ​ |  | 547 |  | 0.22 | % |  | 802,712 | ​ |  | 474 |  | 0.23 | % |  | 349,167 | ​ |  | 303 |  | 0.35 | %
Total interest-earning assets | ​ |  | 4,083,318 | ​ |  | 32,934 |  | 3.20 | % |  | 3,613,956 | ​ |  | 33,457 |  | 3.67 | % |  | 2,970,900 | ​ |  | 29,962 |  | 4.01 | %
Noninterest-earning assets | ​ |  | 383,783 | ​ |  | ​ |  | ​ | ​ |  | 323,067 | ​ |  |  |  |  | ​ |  | 255,477 | ​ |  |  |  |  | ​
Total assets | ​ | $ | 4,467,101 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 3,937,023 | ​ |  |  |  |  | ​ | $ | 3,226,377 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Stockholders’ Equity: | ​ |  |  | ​ |  |  | ​ |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  |  | ​
Interest-bearing demand deposits | ​ | $ | 853,763 | ​ |  | 403 | ​ | 0.19 | % | $ | 763,613 | ​ |  | 414 |  | 0.21 | % | $ | 570,326 | ​ |  | 230 |  | 0.16 | %
Money market and savings deposits | ​ |  | 1,428,472 | ​ |  | 920 | ​ | 0.26 | % |  | 1,233,533 | ​ |  | 854 |  | 0.27 | % |  | 903,235 | ​ |  | 774 |  | 0.34 | %
Time deposits | ​ |  | 583,165 | ​ |  | 793 | ​ | 0.54 | % |  | 524,327 | ​ |  | 885 |  | 0.67 | % |  | 565,237 | ​ |  | 1,576 |  | 1.11 | %
Total interest-bearing deposits | ​ |  | 2,865,400 | ​ |  | 2,116 | ​ | 0.29 | % |  | 2,521,473 | ​ |  | 2,153 |  | 0.34 | % |  | 2,038,798 | ​ |  | 2,580 |  | 0.50 | %
Borrowings3 | ​ |  | 88,828 | ​ |  | 180 | ​ | 0.80 | % |  | 80,188 | ​ |  | 121 |  | 0.60 | % |  | 99,777 | ​ |  | 142 |  | 0.57 | %
Subordinated debt | ​ |  | 41,917 | ​ |  | 626 | ​ | 5.92 | % |  | 40,211 | ​ |  | 654 |  | 6.46 | % |  | 39,332 | ​ |  | 584 |  | 5.90 | %
Total interest-bearing liabilities | ​ |  | 2,996,145 | ​ |  | 2,922 | ​ | 0.39 | % |  | 2,641,872 | ​ |  | 2,928 |  | 0.44 | % |  | 2,177,907 | ​ |  | 3,306 |  | 0.60 | %
Noninterest-bearing deposits | ​ |  | 1,016,438 | ​ |  | ​ | ​ | ​ | ​ |  | 877,831 | ​ |  |  |  |  | ​ |  | 670,820 | ​ |  |  |  |  | ​
Other liabilities | ​ |  | 27,710 | ​ |  | ​ | ​ | ​ | ​ |  | 24,522 | ​ |  |  |  |  | ​ |  | 23,624 | ​ |  |  |  |  | ​
Total liabilities | ​ |  | 4,040,293 | ​ |  | ​ | ​ | ​ | ​ |  | 3,544,225 | ​ |  |  |  |  | ​ |  | 2,872,351 | ​ |  |  |  |  | ​
Shareholders' equity | ​ |  | 426,808 | ​ |  | ​ | ​ | ​ | ​ |  | 392,798 | ​ |  |  |  |  | ​ |  | 354,026 | ​ |  |  |  |  | ​
Total liabilities and shareholders' equity | ​ | $ | 4,467,101 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 3,937,023 | ​ |  |  |  |  | ​ | $ | 3,226,377 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income, taxable equivalent | ​ | ​ | ​ | ​ | $ | 30,012 | ​ | ​ | ​ |  |  | ​ | $ | 30,529 |  |  | ​ |  |  | ​ | $ | 26,656 |  |  | ​
Interest rate spread | ​ |  | ​ | ​ |  | ​ | ​ | 2.81 | % |  |  | ​ |  |  |  | 3.23 | % |  |  | ​ |  |  |  | 3.41 | %
Tax equivalent net interest margin | ​ |  | ​ | ​ |  | ​ | ​ | 2.92 | % |  |  | ​ |  |  |  | 3.35 | % |  |  | ​ |  |  |  | 3.57 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Percentage of average interest-earning assets to average interest-bearing liabilities | ​ |  | ​ | ​ |  | ​ | ​ | 136.29 | % |  |  | ​ |  |  |  | 136.80 | % |  |  | ​ |  |  |  | 136.41 | %
Percentage of average equity to average assets | ​ |  | ​ | ​ |  | ​ | ​ | 9.55 | % |  |  | ​ |  |  |  | 9.98 | % |  |  | ​ |  |  |  | 10.97 | %

​

1 Taxable equivalent

2 Includes average balance of $80,501, $128,408 and $296,337 in PPP loans for the quarters ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

3 Includes average balance of $18,092 in Paycheck Protection Program Liquidity Facility (“PPPLF”) funding for the quarter ended December 31, 2020. No PPPLF funding was used for the quarters ended December 31, 2021, and September 30, 2021.

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10

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended
​ | ​ | December 31, 2021 | ​ | December 31, 2020 | ​
​ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  | ​ | ​ |  | Yield/ |
​ | ​ | Balance | ​ | Interest1 | ​ | Cost1 | ​ | Balance | ​ | Interest1 | ​ | Cost1 | ​
Assets: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |
Loans and leases, including fees2 | ​ | $ | 2,535,006 | ​ | $ | 118,332 |  | ​ | 4.67 | % | $ | 2,289,612 | ​ | $ | 111,992 |  | 4.89 | %
Loans held for sale | ​ | ​ | 5,571 | ​ | ​ | 250 | ​ | ​ | 4.48 | % | ​ | 7,360 | ​ | ​ | 320 | ​ | 4.34 | %
Taxable securities | ​ |  | 207,459 | ​ |  | 3,813 |  | ​ | 1.84 | % |  | 122,900 | ​ |  | 2,423 |  | 1.97 | %
Tax-exempt securities | ​ |  | 92,708 | ​ |  | 1,817 |  | ​ | 1.96 | % |  | 83,765 | ​ |  | 1,941 |  | 2.32 | %
Federal funds sold and other earning assets | ​ |  | 680,909 | ​ |  | 1,622 |  | ​ | 0.24 | % |  | 308,843 | ​ |  | 1,509 |  | 0.49 | %
Total interest-earning assets | ​ |  | 3,521,653 | ​ |  | 125,834 |  | ​ | 3.57 | % |  | 2,812,480 | ​ |  | 118,185 |  | 4.20 | %
Noninterest-earning assets | ​ |  | 317,457 | ​ |  | ​ |  | ​ | ​ | ​ |  | 250,955 | ​ |  |  |  |  | ​
Total assets | ​ | $ | 3,839,110 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 3,063,435 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Stockholders’ Equity: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Interest-bearing demand deposits | ​ | $ | 737,251 | ​ |  | 1,378 | ​ |  | 0.19 | % | $ | 481,050 | ​ |  | 1,013 |  | 0.21 | %
Money market and savings deposits | ​ |  | 1,191,916 | ​ |  | 3,501 | ​ |  | 0.29 | % |  | 788,006 | ​ |  | 3,482 |  | 0.44 | %
Time deposits | ​ |  | 533,994 | ​ |  | 3,970 | ​ |  | 0.74 | % |  | 641,647 | ​ |  | 9,102 |  | 1.42 | %
Total interest-bearing deposits | ​ |  | 2,463,161 | ​ |  | 8,849 | ​ |  | 0.36 | % |  | 1,910,703 | ​ |  | 13,597 |  | 0.71 | %
Borrowings3 | ​ |  | 83,105 | ​ |  | 540 | ​ |  | 0.65 | % |  | 177,204 | ​ |  | 816 |  | 0.46 | %
Subordinated debt | ​ |  | 40,221 | ​ |  | 2,449 | ​ |  | 6.09 | % |  | 39,301 | ​ |  | 2,334 |  | 5.94 | %
Total interest-bearing liabilities | ​ |  | 2,586,487 | ​ |  | 11,838 | ​ |  | 0.46 | % |  | 2,127,208 | ​ |  | 16,747 |  | 0.79 | %
Noninterest-bearing deposits | ​ |  | 841,746 | ​ |  | ​ | ​ |  | ​ | ​ |  | 571,282 | ​ |  |  |  | ​ | ​
Other liabilities | ​ |  | 23,189 | ​ |  | ​ | ​ |  | ​ | ​ |  | 23,775 | ​ |  |  |  | ​ | ​
Total liabilities | ​ |  | 3,451,422 | ​ |  | ​ | ​ |  | ​ | ​ |  | 2,722,265 | ​ |  |  |  | ​ | ​
Shareholders' equity | ​ |  | 387,688 | ​ |  | ​ | ​ |  | ​ | ​ |  | 341,170 | ​ |  |  |  | ​ | ​
Total liabilities and shareholders' equity | ​ | $ | 3,839,110 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 3,063,435 | ​ |  |  |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income, taxable equivalent | ​ | ​ | ​ | ​ | $ | 113,996 | ​ | ​ | ​ | ​ |  |  | ​ | $ | 101,438 |  | ​ | ​
Interest rate spread | ​ |  | ​ | ​ |  | ​ | ​ |  | 3.12 | % |  |  | ​ |  |  |  | 3.41 | %
Tax equivalent net interest margin | ​ |  | ​ | ​ |  | ​ | ​ |  | 3.24 | % |  |  | ​ |  |  |  | 3.61 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Percentage of average interest-earning assets to average interest-bearing liabilities | ​ |  | ​ | ​ |  | ​ | ​ |  | 136.16 | % |  |  | ​ |  |  |  | 132.21 | %
Percentage of average equity to average assets | ​ |  | ​ | ​ |  | ​ | ​ |  | 10.10 | % |  |  | ​ |  |  |  | 11.14 | %

​

1 Taxable equivalent

2 Includes average balance of $196,078 and $201,470 in PPP loans for the twelve months ended December 31, 2021, and 2020, respectively.

3 Includes average balance of $91,190 in PPPLF funding for the twelve months ended December 31, 2020. No PPPLF funding was used for the twelve months ended December 31, 2021.

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11

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 |
​ | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2020 |
Composition of Loans and Leases: |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​
Commercial real estate: |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​
owner occupied | ​ | $ | 590,064 | ​ | $ | 560,671 | ​ | $ | 492,750 | ​ | $ | 477,293 | ​ | $ | 463,771 | ​
non-owner occupied | ​ |  | 794,092 | ​ |  | 752,576 | ​ |  | 669,741 | ​ |  | 593,348 | ​ |  | 549,205 | ​
Commercial real estate, total | ​ |  | 1,384,156 | ​ |  | 1,313,247 | ​ |  | 1,162,491 | ​ |  | 1,070,641 | ​ |  | 1,012,976 | ​
Commercial & industrial | ​ |  | 488,024 | ​ |  | 469,739 | ​ |  | 496,114 | ​ |  | 686,010 | ​ |  | 634,446 | ​
Construction & land development | ​ |  | 278,386 | ​ |  | 326,374 | ​ |  | 300,704 | ​ |  | 285,973 | ​ |  | 278,075 | ​
Consumer real estate | ​ |  | 477,272 | ​ |  | 478,161 | ​ |  | 444,640 | ​ |  | 432,486 | ​ |  | 443,930 | ​
Leases | ​ | ​ | 53,708 | ​ | ​ | 53,396 | ​ | ​ | 53,038 | ​ | ​ | — | ​ | ​ | — | ​
Consumer and other | ​ |  | 11,851 | ​ |  | 11,746 | ​ |  | 11,331 | ​ |  | 12,019 | ​ |  | 12,816 | ​
Total loans and leases | ​ | $ | 2,693,397 | ​ | $ | 2,652,663 | ​ | $ | 2,468,318 | ​ | $ | 2,487,129 | ​ | $ | 2,382,243 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asset Quality and Additional Loan Data: | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Nonperforming loans and leases | ​ | $ | 3,188 | ​ | $ | 3,567 | ​ | $ | 3,758 | ​ | $ | 6,234 | ​ | $ | 5,782 | ​
Other real estate owned | ​ |  | 1,780 | ​ |  | 2,415 | ​ |  | 2,499 | ​ |  | 3,946 | ​ |  | 4,619 | ​
Other repossessed assets | ​ | ​ | 90 | ​ | ​ | 77 | ​ | ​ | 199 | ​ | ​ | — | ​ | ​ | — | ​
Total nonperforming assets | ​ | $ | 5,058 | ​ | $ | 6,059 | ​ | $ | 6,456 | ​ | $ | 10,180 | ​ | $ | 10,401 | ​
Restructured loans and leases not included in nonperforming loans and leases | ​ | $ | 224 | ​ | $ | 212 | ​ | $ | 219 | ​ | $ | 250 | ​ | $ | 257 | ​
Net charge-offs to average loans and leases (annualized) | ​ |  | 0.05 | % |  | 0.03 | % |  | 0.01 | % |  | 0.01 | % |  | 0.08 | %
Allowance for loan and leases losses to loans and leases | ​ |  | 0.72 | % |  | 0.73 | % |  | 0.74 | % |  | 0.74 | % |  | 0.77 | %
Nonperforming loans and leases to total loans and leases, gross | ​ |  | 0.12 | % |  | 0.13 | % |  | 0.15 | % |  | 0.25 | % |  | 0.24 | %
Nonperforming assets to total assets | ​ |  | 0.11 | % |  | 0.14 | % |  | 0.18 | % |  | 0.29 | % |  | 0.31 | %
Acquired loan and lease fair value discount balance | ​ | $ | 15,483 | ​ | $ | 13,001 | ​ | $ | 12,982 | ​ | $ | 12,951 | ​ | $ | 14,467 | ​
Accretion income on acquired loans and leases | ​ |  | 457 | ​ |  | 1,760 | ​ |  | 761 | ​ |  | 1,636 | ​ |  | 768 | ​
PPP net fees deferred balance | ​ | ​ | 2,038 | ​ | ​ | 3,783 | ​ | ​ | 6,651 | ​ | ​ | 7,351 | ​ | ​ | 4,190 | ​
PPP net fees recognized | ​ | ​ | 1,725 | ​ | ​ | 2,873 | ​ | ​ | 2,132 | ​ | ​ | 2,398 | ​ | ​ | 2,157 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital Ratios: | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Equity to Assets | ​ |  | 9.31 | % |  | 9.69 | % |  | 10.22 | % |  | 10.23 | % |  | 10.81 | %
Tangible common equity to tangible assets (Non-GAAP)1 | ​ |  | 7.18 | % |  | 7.47 | % |  | 7.93 | % |  | 8.00 | % |  | 8.41 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
SmartFinancial, Inc.2 | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Tier 1 leverage | ​ |  | 7.45 | % |  | 8.36 | % |  | 8.10 | % |  | 8.55 | % |  | 8.69 | %
Common equity Tier 1 | ​ |  | 10.23 | % |  | 10.85 | % |  | 10.63 | % |  | 11.29 | % |  | 11.61 | %
Tier 1 capital | ​ |  | 10.23 | % |  | 10.85 | % |  | 10.63 | % |  | 11.29 | % |  | 11.61 | %
Total capital | ​ |  | 12.16 | % |  | 12.92 | % |  | 12.80 | % |  | 13.62 | % |  | 14.07 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
SmartBank | ​ |  | Estimated3 | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Tier 1 leverage | ​ |  | 8.23 | % |  | 9.20 | % |  | 8.75 | % |  | 9.33 | % |  | 9.58 | %
Common equity Tier 1 | ​ |  | 11.58 | % |  | 11.94 | % |  | 11.50 | % |  | 12.31 | % |  | 12.79 | %
Tier 1 capital | ​ |  | 11.58 | % |  | 11.94 | % |  | 11.50 | % |  | 12.31 | % |  | 12.79 | %
Total capital | ​ |  | 12.21 | % |  | 12.59 | % |  | 12.19 | % |  | 13.05 | % |  | 13.57 | %

​

1Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.

2All periods presented are estimated.

3 Current period capital ratios are estimated as of the date of this earnings release.

​

​

​

12

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 | ​
​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2020 | ​ | ​ | 2021 | ​ | 2020 | ​
Selected Performance Ratios (Annualized): | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Return on average assets | ​ | 0.59 | % | ​ | 0.97 | % | ​ | 0.98 | % | ​ | 1.18 | % | ​ | 1.11 | % | ​ | ​ | 0.91 | % | ​ | 0.79 | %
Return on average shareholders' equity | ​ | 6.19 | % | ​ | 9.70 | % | ​ | 9.53 | % | ​ | 10.96 | % | ​ | 10.15 | % | ​ | ​ | 8.97 | % | ​ | 7.13 | %
Return on average tangible common equity¹ | ​ | 8.18 | % | ​ | 12.84 | % | ​ | 12.54 | % | ​ | 14.41 | % | ​ | 13.43 | % | ​ | ​ | 11.84 | % | ​ | 9.50 | %
Noninterest income / average assets | ​ | 0.60 | % | ​ | 0.64 | % | ​ | 0.58 | % | ​ | 0.69 | % | ​ | 0.61 | % | ​ | ​ | 0.62 | % | ​ | 0.50 | %
Noninterest expense / average assets | ​ | 2.47 | % | ​ | 2.35 | % | ​ | 2.33 | % | ​ | 2.35 | % | ​ | 2.46 | % | ​ | ​ | 2.38 | % | ​ | 2.50 | %
Efficiency ratio | ​ | 75.89 | % | ​ | 63.53 | % | ​ | 64.91 | % | ​ | 60.92 | % | ​ | 63.38 | % | ​ | ​ | 66.54 | % | ​ | 65.97 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Selected Performance Ratios (Annualized): | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Operating return on average assets1 | ​ | 0.77 | % | ​ | 1.00 | % | ​ | 1.01 | % | ​ | 1.19 | % | ​ | 1.14 | % | ​ | ​ | 0.98 | % | ​ | 0.89 | %
Operating PTPP return on average assets1 | ​ | 1.03 | % | ​ | 1.39 | % | ​ | 1.30 | % | ​ | 1.52 | % | ​ | 1.45 | % | ​ | ​ | 1.29 | % | ​ | 1.43 | %
Operating return on average shareholders' equity1 | ​ | 8.09 | % | ​ | 10.01 | % | ​ | 9.83 | % | ​ | 11.05 | % | ​ | 10.34 | % | ​ | ​ | 9.67 | % | ​ | 8.02 | %
Operating return on average tangible common equity1 | ​ | 10.70 | % | ​ | 13.26 | % | ​ | 12.93 | % | ​ | 14.53 | % | ​ | 13.69 | % | ​ | ​ | 12.77 | % | ​ | 10.67 | %
Operating efficiency ratio1 | ​ | 68.07 | % | ​ | 62.09 | % | ​ | 63.46 | % | ​ | 60.32 | % | ​ | 60.86 | % | ​ | ​ | 63.59 | % | ​ | 61.75 | %
Operating noninterest income / average assets1 | ​ | 0.60 | % | ​ | 0.63 | % | ​ | 0.58 | % | ​ | 0.69 | % | ​ | 0.56 | % | ​ | ​ | 0.62 | % | ​ | 0.49 | %
Operating noninterest expense / average assets1 | ​ | 2.23 | % | ​ | 2.30 | % | ​ | 2.29 | % | ​ | 2.34 | % | ​ | 2.37 | % | ​ | ​ | 2.28 | % | ​ | 2.36 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Selected Interest Rates and Yields: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Yield on loans and leases | ​ | 4.53 | % | ​ | 4.95 | % | ​ | 4.52 | % | ​ | 4.67 | % | ​ | 4.72 | % | ​ | ​ | 4.67 | % | ​ | 4.89 | %
Yield on earning assets, FTE | ​ | 3.20 | % | ​ | 3.67 | % | ​ | 3.65 | % | ​ | 3.88 | % | ​ | 4.01 | % | ​ | ​ | 3.57 | % | ​ | 4.20 | %
Cost of interest-bearing deposits | ​ | 0.29 | % | ​ | 0.34 | % | ​ | 0.39 | % | ​ | 0.44 | % | ​ | 0.50 | % | ​ | ​ | 0.36 | % | ​ | 0.71 | %
Cost of total deposits | ​ | 0.22 | % | ​ | 0.25 | % | ​ | 0.29 | % | ​ | 0.33 | % | ​ | 0.38 | % | ​ | ​ | 0.27 | % | ​ | 0.55 | %
Cost of interest-bearing liabilities | ​ | 0.39 | % | ​ | 0.44 | % | ​ | 0.49 | % | ​ | 0.54 | % | ​ | 0.60 | % | ​ | ​ | 0.46 | % | ​ | 0.79 | %
Net interest margin, FTE | ​ | 2.92 | % | ​ | 3.35 | % | ​ | 3.29 | % | ​ | 3.48 | % | ​ | 3.57 | % | ​ | ​ | 3.24 | % | ​ | 3.61 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Per Common Share: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Net income, basic | $ | 0.40 | ​ | $ | 0.62 | ​ | $ | 0.59 | ​ | $ | 0.65 | ​ | $ | 0.60 | ​ | ​ | $ | 2.23 | ​ | $ | 1.63 | ​
Net income, diluted |  | 0.40 | ​ |  | 0.61 | ​ |  | 0.58 | ​ |  | 0.65 | ​ |  | 0.59 | ​ | ​ |  | 2.22 | ​ |  | 1.62 | ​
Operating earnings, basic¹ |  | 0.52 | ​ |  | 0.64 | ​ |  | 0.60 | ​ |  | 0.65 | ​ |  | 0.61 | ​ | ​ |  | 2.41 | ​ |  | 1.83 | ​
Operating earnings, diluted¹ |  | 0.52 | ​ |  | 0.63 | ​ |  | 0.60 | ​ |  | 0.65 | ​ |  | 0.61 | ​ | ​ |  | 2.39 | ​ |  | 1.82 | ​
Book value |  | 25.56 | ​ |  | 25.28 | ​ |  | 24.71 | ​ |  | 24.10 | ​ |  | 23.64 | ​ | ​ |  | 25.56 | ​ |  | 23.64 | ​
Tangible book value¹ |  | 19.26 | ​ |  | 19.03 | ​ |  | 18.69 | ​ |  | 18.39 | ​ |  | 17.92 | ​ | ​ |  | 19.26 | ​ |  | 17.92 | ​
Common shares outstanding |  | 16,802,990 | ​ |  | 16,801,447 | ​ |  | 15,109,736 | ​ |  | 15,104,536 | ​ |  | 15,107,214 | ​ | ​ |  | 16,802,990 | ​ |  | 15,107,214 | ​

​

¹See reconciliation of Non-GAAP measures

​

​

​

13

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 | ​
​ | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2020 | ​ | 2020 | ​ | ​ | 2021 | ​ | 2020 | ​
Operating Earnings: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (GAAP) | ​ | $ | 6,655 | ​ | $ | 9,600 | ​ | $ | 8,778 | ​ | $ | 9,756 | ​ | $ | 9,030 | ​ | ​ | $ | 34,790 | ​ | $ | 24,332 | ​
Noninterest income: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Securities gains (losses), net | ​ |  | — | ​ |  | (45) | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | (45) | ​ |  | (6) | ​
ADECA termination proceeds | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (465) | ​ | ​ |  | — | ​ |  | (465) | ​
Noninterest expenses: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​
Merger related and restructuring expenses | ​ |  | 2,762 | ​ |  | 464 | ​ |  | 372 | ​ |  | 103 | ​ |  | 702 | ​ | ​ |  | 3,701 | ​ |  | 4,565 | ​
Income taxes: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​
Income tax effect of adjustments | ​ |  | (713) | ​ |  | (108) | ​ |  | (96) | ​ |  | (27) | ​ |  | (62) | ​ | ​ |  | (944) | ​ |  | (1,071) | ​
Operating earnings (Non-GAAP) | ​ | $ | 8,704 | ​ | $ | 9,911 | ​ | $ | 9,054 | ​ | $ | 9,832 | ​ | $ | 9,205 | ​ | ​ | $ | 37,502 | ​ | $ | 27,355 | ​
Operating earnings per common share (Non-GAAP): | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Basic | ​ | $ | 0.52 | ​ | $ | 0.64 | ​ | $ | 0.60 | ​ | $ | 0.65 | ​ | $ | 0.61 | ​ | ​ | $ | 2.41 | ​ | $ | 1.83 | ​
Diluted | ​ |  | 0.52 | ​ |  | 0.63 | ​ |  | 0.60 | ​ |  | 0.65 | ​ |  | 0.61 | ​ | ​ |  | 2.39 | ​ |  | 1.82 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Noninterest Income: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Noninterest income (GAAP) | ​ | $ | 6,806 | ​ | $ | 6,309 | ​ | $ | 5,143 | ​ | $ | 5,691 | ​ | $ | 4,976 | ​ | ​ | $ | 23,949 | ​ | $ | 15,426 | ​
Securities gains (losses), net | ​ |  | — | ​ |  | (45) | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | (45) | ​ |  | (6) | ​
ADECA termination proceeds | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (465) | ​ | ​ |  | — | ​ |  | (465) | ​
Operating noninterest income (Non-GAAP) | ​ | $ | 6,806 | ​ | $ | 6,264 | ​ | $ | 5,143 | ​ | $ | 5,691 | ​ | $ | 4,511 | ​ | ​ | $ | 23,904 | ​ | $ | 14,955 | ​
Operating noninterest income (Non-GAAP)/average assets1 | ​ |  | 0.60 | % |  | 0.63 | % |  | 0.58 | % |  | 0.69 | % |  | 0.56 | % | ​ |  | 0.62 | % |  | 0.49 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Noninterest Expense: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Noninterest expense (GAAP) | ​ | $ | 27,823 | ​ | $ | 23,309 | ​ | $ | 20,797 | ​ | $ | 19,464 | ​ | $ | 19,953 | ​ | ​ | $ | 91,391 | ​ | $ | 76,719 | ​
Merger related and restructuring expenses | ​ |  | (2,762) | ​ |  | (464) | ​ |  | (372) | ​ |  | (103) | ​ |  | (702) | ​ | ​ |  | (3,701) | ​ |  | (4,565) | ​
Operating noninterest expense (Non-GAAP) | ​ | $ | 25,061 | ​ | $ | 22,845 | ​ | $ | 20,425 | ​ | $ | 19,361 | ​ | $ | 19,251 | ​ | ​ | $ | 87,690 | ​ | $ | 72,154 | ​
Operating noninterest expense (Non-GAAP)/average assets2 | ​ |  | 2.23 | % |  | 2.30 | % |  | 2.29 | % |  | 2.34 | % |  | 2.37 | % | ​ |  | 2.28 | % |  | 2.36 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Pre-tax Pre-provision ("PTPP") Earnings: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income (GAAP) | ​ | $ | 29,855 | ​ | $ | 30,382 | ​ | $ | 26,897 | ​ | $ | 26,260 | ​ | $ | 26,506 | ​ | ​ | $ | 113,394 | ​ | $ | 100,866 | ​
Operating noninterest income | ​ | ​ | 6,806 | ​ | ​ | 6,264 | ​ | ​ | 5,143 | ​ | ​ | 5,691 | ​ | ​ | 4,511 | ​ | ​ | ​ | 23,904 | ​ | ​ | 14,955 | ​
Operating noninterest expense | ​ | ​ | (25,061) | ​ | ​ | (22,845) | ​ | ​ | (20,425) | ​ | ​ | (19,361) | ​ | ​ | (19,251) | ​ | ​ | ​ | (87,690) | ​ | ​ | (72,154) | ​
Operating PTPP earnings (Non-GAAP) | ​ | $ | 11,600 | ​ | $ | 13,801 | ​ | $ | 11,615 | ​ | $ | 12,590 | ​ | $ | 11,766 | ​ | ​ | $ | 49,608 | ​ | $ | 43,667 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-GAAP Return Ratios: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Operating return on average assets (Non-GAAP)3 | ​ |  | 0.77 | % |  | 1.00 | % |  | 1.01 | % |  | 1.19 | % |  | 1.14 | % | ​ |  | 0.98 | % |  | 0.89 | %
Operating PTPP return on average assets (Non-GAAP)4 | ​ | ​ | 1.03 | % | ​ | 1.39 | % | ​ | 1.30 | % | ​ | 1.52 | % | ​ | 1.45 | % | ​ | ​ | 1.29 | % | ​ | 1.43 | %
Return on average tangible common equity (Non-GAAP)5 | ​ |  | 8.18 | % |  | 12.84 | % |  | 12.54 | % |  | 14.41 | % |  | 13.43 | % | ​ |  | 11.84 | % |  | 9.50 | %
Operating return on average shareholders' equity (Non-GAAP)6 | ​ |  | 8.09 | % |  | 10.01 | % |  | 9.83 | % |  | 11.05 | % |  | 10.34 | % | ​ |  | 9.67 | % |  | 8.02 | %
Operating return on average tangible common equity (Non-GAAP)7 | ​ |  | 10.70 | % |  | 13.26 | % |  | 12.93 | % |  | 14.53 | % |  | 13.69 | % | ​ |  | 12.77 | % |  | 10.67 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Efficiency Ratio: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Efficiency ratio (GAAP) | ​ |  | 75.89 | % |  | 63.53 | % |  | 64.91 | % |  | 60.92 | % |  | 63.38 | % | ​ |  | 66.54 | % |  | 65.97 | %
Adjustment for taxable equivalent yields | ​ |  | (0.32) | % |  | (0.25) | % |  | (0.30) | % |  | (0.28) | % |  | (0.30) | % | ​ |  | (0.29) | % |  | (0.33) | %
Adjustment for securities gains (losses) | ​ |  | — | % |  | (0.08) | % |  | — | % |  | — | % |  | — | % | ​ |  | (0.02) | % |  | (0.01) | %
Adjustment for merger related income and costs | ​ |  | (7.50) | % |  | (1.11) | % |  | (1.15) | % |  | (0.32) | % |  | (2.22) | % | ​ |  | (2.64) | % |  | (3.88) | %
Operating efficiency ratio (Non-GAAP) | ​ |  | 68.07 | % |  | 62.09 | % |  | 63.46 | % |  | 60.32 | % |  | 60.86 | % | ​ |  | 63.59 | % |  | 61.75 | %

​

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 PTPP return on average assets (Non-GAAP) is the annualized operating PTPP 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).

​

​

​

14

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
​ | ​ | 2021 | ​ | 2021 | ​ | 2021 | ​ | 2020 | ​ | 2020 | ​ | 2021 | ​ | 2020
Tangible Common Equity: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​
Shareholders' equity (GAAP) | ​ | $ | 429,430 | ​ | $ | 424,720 | ​ | $ | 373,393 | ​ | $ | 364,058 | ​ | $ | 357,168 | ​ | $ | 429,430 | ​ | $ | 357,168
Less goodwill and other intangible assets | ​ |  | 105,852 | ​ |  | 104,930 | ​ |  | 90,966 | ​ |  | 86,350 | ​ |  | 86,471 | ​ |  | 105,852 | ​ |  | 86,471
Tangible common equity (Non-GAAP) | ​ | $ | 323,578 | ​ | $ | 319,790 | ​ | $ | 282,427 | ​ | $ | 277,708 | ​ | $ | 270,697 | ​ | $ | 323,578 | ​ | $ | 270,697
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Average Tangible Common Equity: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Average shareholders' equity (GAAP) | ​ | $ | 426,808 | ​ | $ | 392,798 | ​ | $ | 369,325 | ​ | $ | 360,919 | ​ | $ | 354,026 | ​ | $ | 387,688 | ​ | $ | 341,170
Less average goodwill and other intangible assets | ​ |  | 104,193 | ​ |  | 96,250 | ​ |  | 88,551 | ​ |  | 86,424 | ​ |  | 86,561 | ​ |  | 93,910 | ​ |  | 84,913
Average tangible common equity (Non-GAAP) | ​ | $ | 322,615 | ​ | $ | 296,548 | ​ | $ | 280,774 | ​ | $ | 274,495 | ​ | $ | 267,465 | ​ | $ | 293,778 | ​ | $ | 256,257
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tangible Book Value per Common Share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Book value per common share (GAAP) | ​ | $ | 25.56 | ​ | $ | 25.28 | ​ | $ | 24.71 | ​ | $ | 24.10 | ​ | $ | 23.64 | ​ | $ | 25.56 | ​ | $ | 23.64
Adjustment due to goodwill and other intangible assets | ​ | ​ | (6.30) | ​ | ​ | (6.25) | ​ | ​ | (6.02) | ​ | ​ | (5.71) | ​ | ​ | (5.72) | ​ | ​ | (6.30) | ​ | ​ | (5.72)
Tangible book value per common share (Non-GAAP)1 | ​ | $ | 19.26 | ​ | $ | 19.03 | ​ | $ | 18.69 | ​ | $ | 18.39 | ​ | $ | 17.92 | ​ | $ | 19.26 | ​ | $ | 17.92
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tangible Common Equity to Tangible Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Assets | ​ | $ | 4,611,579 | ​ | $ | 4,384,031 | ​ | $ | 3,654,356 | ​ | $ | 3,557,203 | ​ | $ | 3,304,949 | ​ | $ | 4,611,579 | ​ | $ | 3,304,949
Less goodwill and other intangibles | ​ | ​ | 105,852 | ​ | ​ | 104,930 | ​ | ​ | 90,966 | ​ | ​ | 86,350 | ​ | ​ | 86,471 | ​ | ​ | 105,852 | ​ | ​ | 86,471
Tangible Assets (Non-GAAP): | ​ | $ | 4,505,727 | ​ | $ | 4,279,101 | ​ | $ | 3,563,390 | ​ | $ | 3,470,853 | ​ | $ | 3,218,478 | ​ | $ | 4,505,727 | ​ | $ | 3,218,478
Tangible common equity to tangible assets (Non-GAAP) | ​ | ​ | 7.18% | ​ | ​ | 7.47% | ​ | ​ | 7.93% | ​ | ​ | 8.00% | ​ | ​ | 8.41% | ​ | ​ | 7.18% | ​ | ​ | 8.41%

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1Tangible book value per share is computed by dividing total stockholder's equity, less goodwill and other intangible assets by common shares outstanding.

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