EX-99.1 2 smbk-20240722xex99d1.htm EX-99.1

Exhibit 99.1

​

​

2Q 2024

​

SmartFinancial Announces Results for the Second Quarter 2024

​

KNOXVILLE, TN – July 22, 2024 - SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NYSE: SMBK), today announced net income of $8.0 million, or $0.48 per diluted common share, for the second quarter of 2024, compared to net income of $8.8 million, or $0.52 per diluted common share, for the second quarter of 2023, and compared to prior quarter net income of $9.4 million, or $0.55 per diluted common share. Operating earnings1, which excludes non-recurring income, net of tax adjustments, totaled $7.8 million, or $0.46 per diluted common share, in the second quarter of 2024, compared to $8.8 million, or $0.52 per diluted common share, in the second quarter of 2023, and compared to $8.4 million, or $0.49 per diluted common share, in the first quarter of 2024.

​

Highlights for the Second Quarter of 2024

​

| ● | Operating earnings1 of $7.8 million, or $0.46 per diluted common share

| ● | Net organic loan and lease growth of $97 million with 11% annualized quarter-over-quarter increase

| ● | Quarter-over-quarter net tax equivalent interest margin expansion of 12 basis points to 2.97%

| ● | 10% annualized quarter-over-quarter increase in tangible book value per common share1

| ● | 136,195 shares repurchased at a weighted average price of $21.57

| ● | Credit quality remains solid with nonperforming assets to total assets of 0.20%

​

Billy Carroll, President & CEO, stated: “Our Company continued to gain momentum with a very nice second quarter highlighted by solid growth in operating revenue and a 10% annualized increase in tangible book value per share quarter over quarter. We also took advantage of our liquidity position, growing loans at an 11% quarterly annualized pace. Margin inflection accelerated during the quarter, and we look forward to seeing that trend continue. The sales energy around our Company is very strong and our outlook for the second half of 2024 remains bullish as we gain further operating leverage.”

​

SmartFinancial's Chairman, Miller Welborn, concluded: “The Board of Directors was pleased to see operating leverage expansion and strong loan growth during the second quarter. The Company’s markets continue to provide great organic growth opportunities that we look forward to winning. We continue to strategically progress towards our longer-term financial objectives and this quarter’s margin expansion and expense control is a good demonstration of our team’s ability to execute our plan. We are confident in our team and look forward to continued improvement as the year progresses.”

​

Net Interest Income and Net Interest Margin

​

Net interest income was $32.8 million for the second quarter of 2024, compared to $31.7 million for the prior quarter. Average earning assets totaled $4.5 billion for the current and prior quarters. The categories of average earnings assets changed quarter-over-quarter, primarily from an increase in average loans and leases of $46.2 million, offset by a decrease in average securities of $40.8 million and average interest-earning cash of $7.5 million. Average interest-bearing liabilities decreased by $19.8 million from the prior quarter, attributable to a decrease in average deposits of $21.3 million, offset by an increase in average borrowings of $1.4 million.

​

The tax equivalent net interest margin was 2.97% for the second quarter of 2024, compared to 2.85% for the prior quarter. The tax equivalent net interest margin was positively impacted by the increased yield on interest-earning assets, quarter-over-quarter, coupled with a slower rise on the cost of interest-bearing liabilities, quarter-over-quarter. The yield on loans and leases, excluding loan fees, on a fully tax equivalent basis (“FTE”) was 5.80% for the second quarter, compared to 5.71% for the prior quarter.

​

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

​

​

The cost of total deposits for the second quarter of 2024 was 2.56% compared to 2.52% in the prior quarter. The cost of interest-bearing liabilities increased to 3.29% for the second quarter of 2024, compared to 3.23% for the prior quarter. The cost of average interest-bearing deposits was 3.23% for the second quarter of 2024, compared to 3.16% for the prior quarter, an increase of 7 basis points.

​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | ​
​ | ​ | Jun | ​ | Mar | ​ | Increase | ​
Selected Interest Rates and Yields | ​ | 2024 | ​ | 2024 | ​ | (Decrease) | ​
Yield on loans and leases, excluding loan fees, FTE | ​ | 5.80 | % | 5.71 | % | 0.09 | %
Yield on loans and leases, FTE | ​ | 5.87 | % | 5.82 | % | 0.05 | %
Yield on earning assets, FTE | ​ | 5.52 | % | 5.36 | % | 0.16 | %
Cost of interest-bearing deposits | ​ | 3.23 | % | 3.16 | % | 0.07 | %
Cost of total deposits | ​ | 2.56 | % | 2.52 | % | 0.04 | %
Cost of interest-bearing liabilities | ​ | 3.29 | % | 3.23 | % | 0.06 | %
Net interest margin, FTE | ​ | 2.97 | % | 2.85 | % | 0.12 | %

​

Provision for Credit Losses on Loans and Leases and Credit Quality

​

At June 30, 2024, the allowance for credit losses was $34.7 million. The allowance for credit losses to total loans and leases was 0.97% as of June 30, 2024, compared to 0.98% as of March 31, 2024.

​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Jun | ​ | ​ | Mar | ​ | ​ | Increase | ​
​ | Provision for Credit Losses on Loans and Leases Rollforward | ​ | ​ | 2024 | ​ | ​ | 2024 | ​ | ​ | (Decrease) | ​
​ | Beginning balance | ​ | $ | 34,203 | ​ | $ | 35,066 | ​ | $ | (863) | ​
​ | Charge-offs | ​ | ​ | (457) | ​ | ​ | (920) | ​ | ​ | 463 | ​
​ | Recoveries | ​ | ​ | 48 | ​ | ​ | 135 | ​ | ​ | (87) | ​
​ | Net (charge-offs) recoveries | ​ | ​ | (409) | ​ | ​ | (785) | ​ | ​ | 376 | ​
​ | Provision for credit losses (1) | ​ | ​ | 896 | ​ | ​ | (78) | ​ | ​ | 974 | ​
​ | Ending balance | ​ | $ | 34,690 | ​ | $ | 34,203 | ​ | $ | 487 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Allowance for credit losses to total loans and leases, gross | ​ | ​ | 0.97 | % | ​ | 0.98 | % | ​ | (0.01) | %

​

| (1) | The current quarter-ended and prior quarter-ended excludes unfunded commitments release of $13 thousand and $362 thousand, respectively. At June 30, 2024, the unfunded commitment liability totaled $2.0 million.

Nonperforming loans and leases as a percentage of total loans and leases was 0.19% as of June 30, 2024, an increase of 1 basis point from the 0.18% reported in the first quarter of 2024. Total nonperforming assets (which include nonaccrual loans and leases, loans and leases past due 90 days or more and still accruing, other real estate owned and other repossessed assets) as a percentage of total assets was 0.20% as of June 30, 2024, and 0.18% on March 31, 2024.

​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Jun | ​ | ​ | Mar | ​ | ​ | Increase | ​
​ | Credit Quality | ​ | ​ | 2024 | ​ | ​ | 2024 | ​ | ​ | (Decrease) | ​
​ | Nonaccrual loans and leases | ​ | $ | 6,432 | ​ | $ | 6,171 | ​ | $ | 261 | ​
​ | Loans and leases past due 90 days or more and still accruing | ​ | ​ | 210 | ​ | ​ | 95 | ​ | ​ | 115 | ​
​ | Total nonperforming loans and leases | ​ | ​ | 6,642 | ​ | ​ | 6,266 | ​ | ​ | 376 | ​
​ | Other real estate owned | ​ | ​ | 688 | ​ | ​ | 696 | ​ | ​ | (8) | ​
​ | Other repossessed assets | ​ | ​ | 2,645 | ​ | ​ | 2,033 | ​ | ​ | 612 | ​
​ | Total nonperforming assets | ​ | $ | 9,975 | ​ | $ | 8,995 | ​ | $ | 980 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Nonperforming loans and leases to total loans and leases, gross | ​ | ​ | 0.19 | % | ​ | 0.18 | % | ​ | 0.01 | %
​ | Nonperforming assets to total assets | ​ | ​ | 0.20 | % | ​ | 0.18 | % | ​ | 0.02 | %

​

​

2

​

Noninterest Income

​

Noninterest income decreased $776 thousand to $7.6 million for the second quarter of 2024 compared to $8.4 million for the prior quarter. The current quarter decrease was primarily associated with the $1.3 million pre-tax gain on the sale of a former branch building in the prior quarter, offset by a $283 thousand pre-tax gain on the sale of a bank property in the current quarter.

​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | ​
​ | ​ | ​ | Jun | ​ | ​ | Mar | ​ | ​ | Increase
Noninterest Income | ​ | ​ | 2024 | ​ | ​ | 2024 | ​ | ​ | (Decrease)
Service charges on deposit accounts | ​ | $ | 1,692 | ​ | $ | 1,612 | ​ | $ | 80
Mortgage banking income | ​ | ​ | 348 | ​ | ​ | 280 | ​ | ​ | 68
Investment services | ​ | ​ | 1,302 | ​ | ​ | 1,380 | ​ | ​ | (78)
Insurance commissions | ​ | ​ | 1,284 | ​ | ​ | 1,103 | ​ | ​ | 181
Interchange and debit card transaction fees | ​ | ​ | 1,343 | ​ | ​ | 1,253 | ​ | ​ | 90
Other | ​ | ​ | 1,635 | ​ | ​ | 2,752 | ​ | ​ | (1,117)
Total noninterest income | ​ | $ | 7,604 | ​ | $ | 8,380 | ​ | $ | (776)

​

Noninterest Expense

​

Noninterest expense increased $648 thousand to $29.2 million for the second quarter of 2024 compared to $28.6 million for the prior quarter. The current quarter increase was primarily related to an increase in salaries and employee benefits related to incentive accruals for production performance.

​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | ​
​ | ​ | ​ | Jun | ​ | ​ | Mar | ​ | ​ | Increase
Noninterest Expense | ​ | ​ | 2024 | ​ | ​ | 2024 | ​ | ​ | (Decrease)
Salaries and employee benefits | ​ | $ | 17,261 | ​ | $ | 16,639 | ​ | $ | 622
Occupancy and equipment | ​ | ​ | 3,324 | ​ | ​ | 3,396 | ​ | ​ | (72)
FDIC insurance | ​ | ​ | 825 | ​ | ​ | 915 | ​ | ​ | (90)
Other real estate and loan related expenses | ​ | ​ | 538 | ​ | ​ | 584 | ​ | ​ | (46)
Advertising and marketing | ​ | ​ | 295 | ​ | ​ | 302 | ​ | ​ | (7)
Data processing and technology | ​ | ​ | 2,452 | ​ | ​ | 2,465 | ​ | ​ | (13)
Professional services | ​ | ​ | 1,064 | ​ | ​ | 924 | ​ | ​ | 140
Amortization of intangibles | ​ | ​ | 608 | ​ | ​ | 612 | ​ | ​ | (4)
Other | ​ | ​ | 2,834 | ​ | ​ | 2,716 | ​ | ​ | 118
Total noninterest expense | ​ | $ | 29,201 | ​ | $ | 28,553 | ​ | $ | 648

​

Income Tax Expense

​

Income tax expense was $2.3 million for the second quarter of 2024, a decrease of $299 thousand, compared to $2.6 million for the prior quarter.

The effective tax rate was 22.56% for the second quarter of 2024 and 21.94% for the prior quarter.

​

Balance Sheet Trends

​

Total assets at June 30, 2024 were $4.89 billion compared to $4.83 billion at December 31, 2023. The $61.6 million increase is primarily attributable to increases loans and leases of $129.7 million, offset by a decrease in securities of $59.8 million and cash and cash equivalents of $9.4 million.

​

Total liabilities increased to $4.42 billion at June 30, 2024 from $4.37 billion at December 31, 2023. The increase of $49.0 million was primarily from organic deposit growth of $48.8 million.

​

​

​

3

Shareholders' equity at June 30, 2024, totaled $472.5 million, an increase of $12.6 million, from December 31, 2023. The increase in shareholders' equity was primarily driven by net income of $17.4 million for the six months ended June 30, 2024, offset by dividends paid of $2.7 million and repurchase of the Company’s stock of $3.0 million. Tangible book value per share1 was $21.66 at June 30, 2024, compared to $20.76 at December 31, 2023. Tangible common equity1 as a percentage of tangible assets1 was 7.66% at June 30, 2024, compared with 7.47% at December 31, 2023.

​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Jun | ​ | Dec | ​ | Increase | ​
Selected Balance Sheet Information | ​ | 2024 | ​ | 2023 | ​ | (Decrease) | ​
Total assets | ​ | $ | 4,891,009 | ​ | $ | 4,829,387 | ​ | $ | 61,622 | ​
Total liabilities | ​ | ​ | 4,418,544 | ​ | ​ | 4,369,501 | ​ | ​ | 49,043 | ​
Total equity | ​ | ​ | 472,465 | ​ | ​ | 459,886 | ​ | ​ | 12,579 | ​
Securities | ​ | ​ | 629,817 | ​ | ​ | 689,646 | ​ | ​ | (59,829) | ​
Loans and leases | ​ | ​ | 3,574,158 | ​ | ​ | 3,444,462 | ​ | ​ | 129,696 | ​
Deposits | ​ | ​ | 4,316,656 | ​ | ​ | 4,267,854 | ​ | ​ | 48,802 | ​
Borrowings | ​ | ​ | 12,732 | ​ | ​ | 13,078 | ​ | ​ | (346) | ​

​

Conference Call Information

​

SmartFinancial issued this earnings release for the second quarter of 2024 on Monday, July 22, 2024, and will host a conference call on Tuesday, July 23, 2024, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and entering the access code, 533803. A replay of the conference call will be available through August 22, 2024, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 897395. Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 a.m. ET prior to the conference call.

​

About SmartFinancial, Inc.

​

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

​

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

​

​

​

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

​

​

4

Non-GAAP Financial Measures

​

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

​

| (i) | Operating earnings

| (ii) | Operating noninterest income

| (iii) | Operating noninterest expense

| (iv) | Operating pre-provision net revenue (“PPNR”) earnings

| (v) | Tangible common equity

| (vi) | Average tangible common equity

| (vii) | Tangible book value per common share

| (viii) | Tangible assets

Operating earnings, operating noninterest income, operating noninterest expense and operating PPNR exclude non-operating related income and expense items, respectively. 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 per common share is tangible common equity divided by common shares outstanding. Tangible assets excludes goodwill and other intangibles from total assets. A detailed reconciliation of these items and ratios derived therefrom is available in the Non-GAAP reconciliations.

​

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

​

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

​

​

​

5

Forward-Looking Statements

​

This news release may contain statements that are based on management’s current estimates or expectations of future events or future results, and that may be deemed to constitute forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements are not historical in nature and can generally be identified by such words as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “may,” “estimate,” and similar expressions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results of SmartFinancial to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others,

​

| (1) | risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively;

| (2) | claims and litigation arising from our business activities and from the companies we acquire, which may relate to contractual issues, environmental laws, fiduciary responsibility, and other matters;

| (3) | 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) | changes in management’s plans for the future;

| (7) | prevailing, or changes in, economic or political conditions, particularly in our market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing;

| (8) | our ability to anticipate interest rate changes and manage interest rate risk (including the impact of higher interest rates on macroeconomic conditions, competition, and the cost of doing business and the impact of prolonged elevated interest rates on our financial projections, models and guidance);

| (9) | increased technology and cybersecurity risks, including generative artificial intelligence risks;

| (10) | credit risk associated with our lending activities;

| (11) | changes in loan demand, real estate values, or competition;

| (12) | developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance;

| (13) | changes in accounting principles, policies, or guidelines;

| (14) | changes in applicable laws, rules, or regulations;

| (15) | adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions;

| (16) | potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto;

| (17) | significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities;

| (18) | the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine or the conflict in Israel and surrounding areas; and

| (19) | 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.

​

​

​

6

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Ending Balances
​ | ​ | Jun |  | Mar |  | Dec |  | Sep |  | Jun
​ | ​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | 2023 | ​ | 2023
Assets: | ​ | ​ | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Cash and cash equivalents | ​ | $ | 342,835 | ​ | $ | 477,941 | ​ | $ | 352,271 | ​ | $ | 400,258 | ​ | $ | 238,898
Securities available-for-sale, at fair value | ​ |  | 500,821 | ​ |  | 474,347 | ​ |  | 408,410 | ​ |  | 385,131 | ​ |  | 540,308
Securities held-to-maturity, at amortized cost | ​ | ​ | 128,996 | ​ | ​ | 180,169 | ​ | ​ | 281,236 | ​ | ​ | 282,313 | ​ | ​ | 283,564
Other investments | ​ |  | 13,780 | ​ |  | 13,718 | ​ |  | 13,662 | ​ |  | 13,805 | ​ |  | 14,396
Loans held for sale | ​ |  | 3,103 | ​ |  | 4,861 | ​ |  | 4,418 | ​ |  | 2,734 | ​ |  | 986
Loans and leases | ​ |  | 3,574,158 | ​ |  | 3,477,555 | ​ |  | 3,444,462 | ​ |  | 3,378,999 | ​ |  | 3,337,790
Less: Allowance for credit losses | ​ |  | (34,690) | ​ |  | (34,203) | ​ |  | (35,066) | ​ |  | (33,687) | ​ |  | (32,747)
Loans and leases, net | ​ |  | 3,539,468 | ​ |  | 3,443,352 | ​ |  | 3,409,396 | ​ |  | 3,345,312 | ​ |  | 3,305,043
Premises and equipment, net | ​ |  | 91,315 | ​ |  | 92,694 | ​ |  | 92,963 | ​ |  | 92,020 | ​ |  | 92,351
Other real estate owned | ​ |  | 688 | ​ |  | 696 | ​ |  | 517 | ​ |  | 1,370 | ​ |  | 1,708
Goodwill and other intangibles, net | ​ |  | 105,929 | ​ |  | 106,537 | ​ |  | 107,148 | ​ |  | 107,792 | ​ |  | 108,439
Bank owned life insurance | ​ |  | 84,483 | ​ |  | 83,957 | ​ |  | 83,434 | ​ |  | 82,914 | ​ |  | 82,419
Other assets | ​ |  | 79,591 | ​ |  | 76,418 | ​ |  | 75,932 | ​ |  | 83,522 | ​ |  | 77,688
Total assets | ​ | $ | 4,891,009 | ​ | $ | 4,954,690 | ​ | $ | 4,829,387 | ​ | $ | 4,797,171 | ​ | $ | 4,745,800
Liabilities: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Noninterest-bearing demand | ​ | $ | 903,300 | ​ | $ | 907,254 | ​ | $ | 898,044 | ​ | $ | 923,763 | ​ | $ | 1,003,432
Interest-bearing demand | ​ |  | 988,057 | ​ |  | 996,298 | ​ |  | 1,006,915 | ​ |  | 993,717 | ​ |  | 938,758
Money market and savings | ​ |  | 1,901,281 | ​ |  | 1,952,410 | ​ |  | 1,812,427 | ​ |  | 1,766,409 | ​ |  | 1,720,202
Time deposits | ​ |  | 524,018 | ​ |  | 538,159 | ​ |  | 550,468 | ​ |  | 562,620 | ​ |  | 537,192
Total deposits | ​ |  | 4,316,656 | ​ |  | 4,394,121 | ​ |  | 4,267,854 | ​ |  | 4,246,509 | ​ |  | 4,199,584
Borrowings | ​ |  | 12,732 | ​ |  | 9,849 | ​ |  | 13,078 | ​ |  | 14,117 | ​ |  | 15,496
Subordinated debt | ​ |  | 42,142 | ​ |  | 42,120 | ​ |  | 42,099 | ​ |  | 42,078 | ​ |  | 42,057
Other liabilities | ​ |  | 47,014 | ​ |  | 41,804 | ​ |  | 46,470 | ​ |  | 47,815 | ​ |  | 43,816
Total liabilities | ​ |  | 4,418,544 | ​ |  | 4,487,894 | ​ |  | 4,369,501 | ​ |  | 4,350,519 | ​ |  | 4,300,953
Shareholders' Equity: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Common stock | ​ |  | 16,926 | ​ |  | 17,057 | ​ |  | 16,989 | ​ |  | 16,995 | ​ |  | 17,004
Additional paid-in capital | ​ |  | 293,586 | ​ |  | 296,061 | ​ |  | 295,699 | ​ |  | 295,542 | ​ |  | 295,296
Retained earnings | ​ |  | 187,751 | ​ |  | 181,103 | ​ |  | 173,105 | ​ |  | 168,271 | ​ |  | 167,564
Accumulated other comprehensive loss | ​ |  | (25,798) | ​ |  | (27,425) | ​ |  | (25,907) | ​ |  | (34,156) | ​ |  | (35,017)
Total shareholders' equity | ​ |  | 472,465 | ​ |  | 466,796 | ​ |  | 459,886 | ​ |  | 446,652 | ​ |  | 444,847
Total liabilities & shareholders' equity | ​ | $ | 4,891,009 | ​ | $ | 4,954,690 | ​ | $ | 4,829,387 | ​ | $ | 4,797,171 | ​ | $ | 4,745,800

​

​

​

​

7

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands except share and per share data)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Three Months Ended |  | Six Months Ended
​ | Jun |  | Mar |  | Dec |  | Sep |  | Jun |  | Jun |  | Jun
​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | 2023 | ​ | 2023 | ​ | 2024 | ​ | 2023
Interest income: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​
Loans and leases, including fees | $ | 50,853 | ​ | $ | 50,020 | ​ | $ | 48,767 | ​ | $ | 47,539 | ​ | $ | 45,446 | ​ | $ | 100,873 | ​ | $ | 90,173
Investment securities: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Taxable |  | 5,320 | ​ |  | 4,548 | ​ |  | 4,344 | ​ |  | 4,335 | ​ |  | 4,335 | ​ |  | 9,869 | ​ |  | 7,986
Tax-exempt |  | 353 | ​ |  | 352 | ​ |  | 352 | ​ |  | 356 | ​ |  | 357 | ​ |  | 705 | ​ |  | 709
Federal funds sold and other earning assets |  | 4,759 | ​ |  | 4,863 | ​ |  | 4,032 | ​ |  | 3,045 | ​ |  | 1,956 | ​ |  | 9,620 | ​ |  | 6,405
Total interest income |  | 61,285 | ​ |  | 59,783 | ​ |  | 57,495 | ​ |  | 55,275 | ​ |  | 52,094 | ​ |  | 121,067 | ​ |  | 105,273
Interest expense: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits |  | 27,439 | ​ |  | 27,035 | ​ |  | 24,926 | ​ |  | 23,433 | ​ |  | 19,554 | ​ |  | 54,474 | ​ |  | 35,900
Borrowings |  | 148 | ​ |  | 128 | ​ |  | 162 | ​ |  | 210 | ​ |  | 339 | ​ |  | 276 | ​ |  | 564
Subordinated debt |  | 884 | ​ |  | 899 | ​ |  | 890 | ​ |  | 626 | ​ |  | 626 | ​ |  | 1,782 | ​ |  | 1,252
Total interest expense |  | 28,471 | ​ |  | 28,062 | ​ |  | 25,978 | ​ |  | 24,269 | ​ |  | 20,519 | ​ |  | 56,532 | ​ |  | 37,716
Net interest income |  | 32,814 | ​ |  | 31,721 | ​ |  | 31,517 | ​ |  | 31,006 | ​ |  | 31,575 | ​ |  | 64,535 | ​ |  | 67,557
Provision for credit losses |  | 883 | ​ |  | (440) | ​ |  | 1,571 | ​ |  | 795 | ​ |  | 113 | ​ |  | 443 | ​ |  | 663
Net interest income after provision for credit losses |  | 31,931 | ​ |  | 32,161 | ​ |  | 29,946 | ​ |  | 30,211 | ​ |  | 31,462 | ​ |  | 64,092 | ​ |  | 66,894
Noninterest income: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Service charges on deposit accounts |  | 1,692 | ​ |  | 1,612 | ​ |  | 1,673 | ​ |  | 1,736 | ​ |  | 1,657 | ​ |  | 3,304 | ​ |  | 3,102
Loss on sale of securities, net |  | — | ​ |  | — | ​ |  | — | ​ |  | (6,801) | ​ |  | — | ​ |  | — | ​ |  | —
Mortgage banking |  | 348 | ​ |  | 280 | ​ |  | 227 | ​ |  | 309 | ​ |  | 332 | ​ |  | 628 | ​ |  | 504
Investment services |  | 1,302 | ​ |  | 1,380 | ​ |  | 1,339 | ​ |  | 1,461 | ​ |  | 1,300 | ​ |  | 2,682 | ​ |  | 2,305
Insurance commissions |  | 1,284 | ​ |  | 1,103 | ​ |  | 1,133 | ​ |  | 1,153 | ​ |  | 1,139 | ​ |  | 2,387 | ​ |  | 2,398
Interchange and debit card transaction fees |  | 1,343 | ​ |  | 1,253 | ​ |  | 1,370 | ​ |  | 1,357 | ​ |  | 1,347 | ​ |  | 2,596 | ​ |  | 2,730
Other |  | 1,635 | ​ |  | 2,752 | ​ |  | 1,837 | ​ |  | 1,476 | ​ |  | 1,355 | ​ |  | 4,387 | ​ |  | 3,016
Total noninterest income |  | 7,604 | ​ |  | 8,380 | ​ |  | 7,579 | ​ |  | 691 | ​ |  | 7,130 | ​ |  | 15,984 | ​ |  | 14,055
Noninterest expense: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Salaries and employee benefits |  | 17,261 | ​ |  | 16,639 | ​ |  | 16,275 | ​ |  | 16,785 | ​ |  | 15,947 | ​ |  | 33,900 | ​ |  | 32,689
Occupancy and equipment |  | 3,324 | ​ |  | 3,396 | ​ |  | 3,378 | ​ |  | 3,547 | ​ |  | 3,318 | ​ |  | 6,720 | ​ |  | 6,526
FDIC insurance |  | 825 | ​ |  | 915 | ​ |  | 915 | ​ |  | 825 | ​ |  | 875 | ​ |  | 1,740 | ​ |  | 1,416
Other real estate and loan related expense |  | 538 | ​ |  | 584 | ​ |  | 781 | ​ |  | 603 | ​ |  | 441 | ​ |  | 1,123 | ​ |  | 1,013
Advertising and marketing |  | 295 | ​ |  | 302 | ​ |  | 336 | ​ |  | 346 | ​ |  | 305 | ​ |  | 597 | ​ |  | 660
Data processing and technology |  | 2,452 | ​ |  | 2,465 | ​ |  | 2,458 | ​ |  | 2,378 | ​ |  | 2,235 | ​ |  | 4,916 | ​ |  | 4,398
Professional services |  | 1,064 | ​ |  | 924 | ​ |  | 1,136 | ​ |  | 735 | ​ |  | 764 | ​ |  | 1,989 | ​ |  | 1,572
Amortization of intangibles |  | 608 | ​ |  | 612 | ​ |  | 643 | ​ |  | 647 | ​ |  | 675 | ​ |  | 1,220 | ​ |  | 1,334
Merger related and restructuring expenses |  | — | ​ |  | — | ​ |  | — | ​ |  | 110 | ​ |  | — | ​ |  | — | ​ |  | —
Other |  | 2,834 | ​ |  | 2,716 | ​ |  | 3,773 | ​ |  | 2,540 | ​ |  | 2,850 | ​ |  | 5,549 | ​ |  | 5,331
Total noninterest expense |  | 29,201 | ​ |  | 28,553 | ​ |  | 29,695 | ​ |  | 28,516 | ​ |  | 27,410 | ​ |  | 57,754 | ​ |  | 54,939
Income before income taxes |  | 10,334 | ​ |  | 11,988 | ​ |  | 7,830 | ​ |  | 2,386 | ​ |  | 11,182 | ​ |  | 22,322 | ​ |  | 26,010
Income tax expense |  | 2,331 | ​ |  | 2,630 | ​ |  | 1,640 | ​ |  | 319 | ​ |  | 2,346 | ​ |  | 4,962 | ​ |  | 5,674
Net income | $ | 8,003 | ​ | $ | 9,358 | ​ | $ | 6,190 | ​ | $ | 2,067 | ​ | $ | 8,836 | ​ | $ | 17,360 | ​ | $ | 20,336
Earnings per common share: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic | $ | 0.48 | ​ | $ | 0.56 | ​ | $ | 0.37 | ​ | $ | 0.12 | ​ | $ | 0.53 | ​ | $ | 1.03 | ​ | $ | 1.21
Diluted | $ | 0.48 | ​ | $ | 0.55 | ​ | $ | 0.37 | ​ | $ | 0.12 | ​ | $ | 0.52 | ​ | $ | 1.03 | ​ | $ | 1.20
Weighted average common shares outstanding: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic |  | 16,770,819 | ​ |  | 16,849,735 | ​ |  | 16,814,647 | ​ |  | 16,807,548 | ​ |  | 16,806,389 | ​ |  | 16,810,277 | ​ |  | 16,798,939
Diluted |  | 16,850,250 | ​ |  | 16,925,408 | ​ |  | 16,918,234 | ​ |  | 16,918,635 | ​ |  | 16,898,091 | ​ |  | 16,887,374 | ​ |  | 16,897,444

​

​

​

​

​

​

8

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended |
​ | ​ | June 30, 2024 | ​ | March 31, 2024 | ​ | June 30, 2023 |
​ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  |  | ​ |  | Yield/ |
​ | ​ | Balance | ​ | Interest | ​ | Cost | ​ | Balance | ​ | Interest | ​ | Cost | ​ | Balance | ​ | Interest | ​ | Cost |
Assets: |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  | ​
Loans and leases, including fees1 | ​ | $ | 3,504,265 | ​ | $ | 51,110 |  | 5.87 | % | $ | 3,458,109 | ​ | $ | 50,020 |  | 5.82 | % | $ | 3,308,595 | ​ | $ | 45,446 |  | 5.51 | %
Taxable securities | ​ |  | 580,517 | ​ |  | 5,320 |  | 3.69 | % |  | 620,805 | ​ |  | 4,548 |  | 2.95 | % |  | 770,275 | ​ |  | 4,335 |  | 2.26 | %
Tax-exempt securities2 | ​ |  | 63,690 | ​ |  | 447 |  | 2.82 | % |  | 64,161 | ​ |  | 445 |  | 2.79 | % |  | 65,265 | ​ |  | 452 |  | 2.78 | %
Federal funds sold and other earning assets | ​ |  | 346,459 | ​ |  | 4,759 |  | 5.52 | % |  | 353,913 | ​ |  | 4,863 |  | 5.53 | % |  | 195,266 | ​ |  | 1,956 |  | 4.02 | %
Total interest-earning assets | ​ |  | 4,494,931 | ​ |  | 61,636 |  | 5.52 | % |  | 4,496,988 | ​ |  | 59,876 |  | 5.36 | % |  | 4,339,401 | ​ |  | 52,189 |  | 4.82 | %
Noninterest-earning assets | ​ |  | 383,697 | ​ |  | ​ |  | ​ | ​ |  | 380,231 | ​ |  |  |  |  | ​ |  | 355,701 | ​ |  |  |  |  | ​
Total assets | ​ | $ | 4,878,628 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,877,219 | ​ |  |  |  |  | ​ | $ | 4,695,102 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Shareholders’ Equity: | ​ |  |  | ​ |  |  | ​ |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  |  | ​
Interest-bearing demand deposits | ​ | $ | 983,433 | ​ |  | 5,950 | ​ | 2.43 | % | $ | 996,147 | ​ |  | 6,060 |  | 2.45 | % | $ | 950,227 | ​ |  | 4,892 |  | 2.06 | %
Money market and savings deposits | ​ |  | 1,909,125 | ​ |  | 16,529 | ​ | 3.48 | % |  | 1,904,855 | ​ |  | 16,149 |  | 3.41 | % |  | 1,737,303 | ​ |  | 11,785 |  | 2.72 | %
Time deposits | ​ |  | 528,985 | ​ |  | 4,960 | ​ | 3.77 | % |  | 541,792 | ​ |  | 4,826 |  | 3.58 | % |  | 504,350 | ​ |  | 2,877 |  | 2.29 | %
Total interest-bearing deposits | ​ |  | 3,421,543 | ​ |  | 27,439 | ​ | 3.23 | % |  | 3,442,794 | ​ |  | 27,035 |  | 3.16 | % |  | 3,191,880 | ​ |  | 19,554 |  | 2.46 | %
Borrowings | ​ |  | 12,684 | ​ |  | 148 | ​ | 4.69 | % |  | 11,245 | ​ |  | 128 |  | 4.58 | % |  | 24,845 | ​ |  | 339 |  | 5.47 | %
Subordinated debt | ​ |  | 42,129 | ​ |  | 884 | ​ | 8.44 | % |  | 42,107 | ​ |  | 899 |  | 8.59 | % |  | 42,044 | ​ |  | 626 |  | 5.97 | %
Total interest-bearing liabilities | ​ |  | 3,476,356 | ​ |  | 28,471 | ​ | 3.29 | % |  | 3,496,146 | ​ |  | 28,062 |  | 3.23 | % |  | 3,258,769 | ​ |  | 20,519 |  | 2.53 | %
Noninterest-bearing deposits | ​ |  | 888,693 | ​ |  | ​ | ​ | ​ | ​ |  | 872,840 | ​ |  |  |  |  | ​ |  | 951,381 | ​ |  |  |  |  | ​
Other liabilities | ​ |  | 47,208 | ​ |  | ​ | ​ | ​ | ​ |  | 47,085 | ​ |  |  |  |  | ​ |  | 40,669 | ​ |  |  |  |  | ​
Total liabilities | ​ |  | 4,412,257 | ​ |  | ​ | ​ | ​ | ​ |  | 4,416,071 | ​ |  |  |  |  | ​ |  | 4,250,819 | ​ |  |  |  |  | ​
Shareholders' equity | ​ |  | 466,371 | ​ |  | ​ | ​ | ​ | ​ |  | 461,148 | ​ |  |  |  |  | ​ |  | 444,283 | ​ |  |  |  |  | ​
Total liabilities and shareholders' equity | ​ | $ | 4,878,628 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,877,219 | ​ |  |  |  |  | ​ | $ | 4,695,102 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income, taxable equivalent | ​ | ​ | ​ | ​ | $ | 33,165 | ​ | ​ | ​ |  |  | ​ | $ | 31,814 |  |  | ​ |  |  | ​ | $ | 31,670 |  |  | ​
Interest rate spread | ​ |  | ​ | ​ |  | ​ | ​ | 2.22 | % |  |  | ​ |  |  |  | 2.13 | % |  |  | ​ |  |  |  | 2.30 | %
Tax equivalent net interest margin | ​ |  | ​ | ​ |  | ​ | ​ | 2.97 | % |  |  | ​ |  |  |  | 2.85 | % |  |  | ​ |  |  |  | 2.93 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Percentage of average interest-earning assets to average interest-bearing liabilities | ​ |  | ​ | ​ |  | ​ | ​ | 129.30 | % |  |  | ​ |  |  |  | 128.63 | % |  |  | ​ |  |  |  | 133.16 | %
Percentage of average equity to average assets | ​ |  | ​ | ​ |  | ​ | ​ | 9.56 | % |  |  | ​ |  |  |  | 9.46 | % |  |  | ​ |  |  |  | 9.46 | %

​

1 Yields computed on tax-exempt loans on a tax equivalent basis include $257 thousand, $0 thousand, and $0 thousand of taxable equivalent income for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively.

​

2 Yields computed on tax-exempt instruments on a tax equivalent basis include $94 thousand, $93 thousand, and $95 thousand of taxable equivalent income for the quarters ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively.

​

​

​

​

9

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months Ended
​ | ​ | June 30, 2024 | ​ | June 30, 2023 | ​
​ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  | ​ | ​ |  | Yield/ |
​ | ​ | Balance | ​ | Interest | ​ | Cost | ​ | Balance | ​ | Interest | ​ | Cost | ​
Assets: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |
Loans and leases, including fees1 | ​ | $ | 3,481,187 | ​ | $ | 101,130 |  | ​ | 5.84 | % | $ | 3,283,662 | ​ | $ | 90,173 |  | 5.54 | %
Taxable securities | ​ |  | 600,661 | ​ |  | 9,869 |  | ​ | 3.30 | % |  | 747,037 | ​ |  | 7,986 |  | 2.16 | %
Tax-exempt securities2 | ​ |  | 63,925 | ​ |  | 892 |  | ​ | 2.81 | % |  | 65,405 | ​ |  | 897 |  | 2.77 | %
Federal funds sold and other earning assets | ​ |  | 350,186 | ​ |  | 9,620 |  | ​ | 5.52 | % |  | 286,254 | ​ |  | 6,405 |  | 4.51 | %
Total interest-earning assets | ​ |  | 4,495,959 | ​ |  | 121,511 |  | ​ | 5.44 | % |  | 4,382,358 | ​ |  | 105,461 |  | 4.85 | %
Noninterest-earning assets | ​ |  | 381,964 | ​ |  | ​ |  | ​ | ​ | ​ |  | 357,837 | ​ |  |  |  |  | ​
Total assets | ​ | $ | 4,877,923 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,740,195 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Shareholders’ Equity: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Interest-bearing demand deposits | ​ | $ | 989,790 | ​ |  | 12,010 | ​ |  | 2.44 | % | $ | 947,196 | ​ |  | 9,119 |  | 1.94 | %
Money market and savings deposits | ​ |  | 1,906,990 | ​ |  | 32,677 | ​ |  | 3.45 | % |  | 1,778,650 | ​ |  | 22,168 |  | 2.51 | %
Time deposits | ​ |  | 535,389 | ​ |  | 9,787 | ​ |  | 3.68 | % |  | 486,952 | ​ |  | 4,613 |  | 1.91 | %
Total interest-bearing deposits | ​ |  | 3,432,169 | ​ |  | 54,474 | ​ |  | 3.19 | % |  | 3,212,798 | ​ |  | 35,900 |  | 2.25 | %
Borrowings | ​ |  | 11,964 | ​ |  | 276 | ​ |  | 4.64 | % |  | 20,874 | ​ |  | 564 |  | 5.45 | %
Subordinated debt | ​ |  | 42,118 | ​ |  | 1,782 | ​ |  | 8.51 | % |  | 42,033 | ​ |  | 1,252 |  | 6.01 | %
Total interest-bearing liabilities | ​ |  | 3,486,251 | ​ |  | 56,532 | ​ |  | 3.26 | % |  | 3,275,705 | ​ |  | 37,716 |  | 2.32 | %
Noninterest-bearing deposits | ​ |  | 880,767 | ​ |  | ​ | ​ |  | ​ | ​ |  | 983,348 | ​ |  |  |  | ​ | ​
Other liabilities | ​ |  | 47,146 | ​ |  | ​ | ​ |  | ​ | ​ |  | 42,777 | ​ |  |  |  | ​ | ​
Total liabilities | ​ |  | 4,414,164 | ​ |  | ​ | ​ |  | ​ | ​ |  | 4,301,830 | ​ |  |  |  | ​ | ​
Shareholders' equity | ​ |  | 463,759 | ​ |  | ​ | ​ |  | ​ | ​ |  | 438,365 | ​ |  |  |  | ​ | ​
Total liabilities and shareholders' equity | ​ | $ | 4,877,923 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,740,195 | ​ |  |  |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income, taxable equivalent | ​ | ​ | ​ | ​ | $ | 64,979 | ​ | ​ | ​ | ​ |  |  | ​ | $ | 67,745 |  | ​ | ​
Interest rate spread | ​ |  | ​ | ​ |  | ​ | ​ |  | 2.17 | % |  |  | ​ |  |  |  | 2.53 | %
Tax equivalent net interest margin | ​ |  | ​ | ​ |  | ​ | ​ |  | 2.91 | % |  |  | ​ |  |  |  | 3.12 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Percentage of average interest-earning assets to average interest-bearing liabilities | ​ |  | ​ | ​ |  | ​ | ​ |  | 128.96 | % |  |  | ​ |  |  |  | 133.78 | %
Percentage of average equity to average assets | ​ |  | ​ | ​ |  | ​ | ​ |  | 9.51 | % |  |  | ​ |  |  |  | 9.25 | %

​

1Yields computed on tax-exempt loans on a tax equivalent basis included $257 thousand and $0 thousand of taxable equivalent income for the six months ended June 30, 2024, and 2023, respectively.

​

2Yields computed on tax-exempt instruments on a tax equivalent basis included $187 thousand and $188 thousand of taxable equivalent income for the six months ended June 30, 2024, and 2023, respectively.

​

​

​

​

​

10

​

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of and for The Three Months Ended |
​ |  | Jun |  | Mar |  | Dec |  | Sep |  | Jun |
​ | ​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | 2023 | ​ | 2023 |
Composition of Loans and Leases: |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​
Commercial real estate: |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​
Owner occupied | ​ | $ | 829,085 | ​ | $ | 804,557 | ​ | $ | 798,416 | ​ | $ | 776,402 | ​ | $ | 769,978 | ​
Non-owner occupied | ​ |  | 986,278 | ​ |  | 938,648 | ​ |  | 940,789 | ​ |  | 890,774 | ​ |  | 871,779 | ​
Commercial real estate, total | ​ |  | 1,815,363 | ​ |  | 1,743,205 | ​ |  | 1,739,205 | ​ |  | 1,667,176 | ​ |  | 1,641,757 | ​
Commercial & industrial | ​ |  | 701,460 | ​ |  | 667,903 | ​ |  | 645,918 | ​ |  | 617,115 | ​ |  | 594,427 | ​
Construction & land development | ​ |  | 294,575 | ​ |  | 321,860 | ​ |  | 327,185 | ​ |  | 373,068 | ​ |  | 394,742 | ​
Consumer real estate | ​ |  | 678,331 | ​ |  | 659,209 | ​ |  | 649,867 | ​ |  | 638,518 | ​ |  | 624,828 | ​
Leases | ​ | ​ | 70,299 | ​ | ​ | 71,909 | ​ | ​ | 68,752 | ​ | ​ | 68,538 | ​ | ​ | 66,401 | ​
Consumer and other | ​ |  | 14,130 | ​ |  | 13,469 | ​ |  | 13,535 | ​ |  | 14,584 | ​ |  | 15,635 | ​
Total loans and leases | ​ | $ | 3,574,158 | ​ | $ | 3,477,555 | ​ | $ | 3,444,462 | ​ | $ | 3,378,999 | ​ | $ | 3,337,790 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asset Quality and Additional Loan Data: | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Nonperforming loans and leases | ​ | $ | 6,642 | ​ | $ | 6,266 | ​ | $ | 8,101 | ​ | $ | 4,163 | ​ | $ | 3,722 | ​
Other real estate owned | ​ |  | 688 | ​ |  | 696 | ​ |  | 517 | ​ |  | 1,370 | ​ |  | 1,708 | ​
Other repossessed assets | ​ | ​ | 2,645 | ​ | ​ | 2,033 | ​ | ​ | 1,117 | ​ | ​ | 348 | ​ | ​ | 282 | ​
Total nonperforming assets | ​ | $ | 9,975 | ​ | $ | 8,995 | ​ | $ | 9,735 | ​ | $ | 5,881 | ​ | $ | 5,712 | ​
Modified loans and leases1 not included in nonperforming loans and leases | ​ | $ | 4,241 | ​ | $ | 4,413 | ​ | $ | 4,245 | ​ | $ | 2,376 | ​ | $ | 657 | ​
Net charge-offs to average loans and leases (annualized) | ​ |  | 0.05 | % |  | 0.09 | % |  | 0.04 | % |  | 0.04 | % |  | (0.01) | %
Allowance for credit losses to loans and leases | ​ |  | 0.97 | % |  | 0.98 | % |  | 1.02 | % |  | 1.00 | % |  | 0.98 | %
Nonperforming loans and leases to total loans and leases, gross | ​ |  | 0.19 | % |  | 0.18 | % |  | 0.24 | % |  | 0.12 | % |  | 0.11 | %
Nonperforming assets to total assets | ​ |  | 0.20 | % |  | 0.18 | % |  | 0.20 | % |  | 0.12 | % |  | 0.12 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital Ratios: | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Equity to Assets | ​ |  | 9.66 | % |  | 9.42 | % |  | 9.52 | % |  | 9.31 | % |  | 9.37 | %
Tangible common equity to tangible assets (Non-GAAP)2 | ​ |  | 7.66 | % |  | 7.43 | % |  | 7.47 | % |  | 7.23 | % |  | 7.25 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
SmartFinancial, Inc.3 | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Tier 1 leverage | ​ |  | 8.32 | % |  | 8.23 | % |  | 8.27 | % |  | 8.13 | % |  | 8.24 | %
Common equity Tier 1 | ​ |  | 10.06 | % |  | 10.20 | % |  | 10.14 | % |  | 10.07 | % |  | 10.12 | %
Tier 1 capital | ​ |  | 10.06 | % |  | 10.20 | % |  | 10.14 | % |  | 10.07 | % |  | 10.12 | %
Total capital | ​ |  | 11.68 | % |  | 11.85 | % |  | 11.78 | % |  | 11.90 | % |  | 11.94 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
SmartBank | ​ |  | Estimated4 | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Tier 1 leverage | ​ |  | 9.11 | % |  | 9.07 | % |  | 9.18 | % |  | 9.00 | % |  | 9.18 | %
Common equity Tier 1 | ​ |  | 11.02 | % |  | 11.23 | % |  | 11.26 | % |  | 11.15 | % |  | 11.27 | %
Tier 1 capital | ​ |  | 11.02 | % |  | 11.23 | % |  | 11.26 | % |  | 11.15 | % |  | 11.27 | %
Total capital | ​ |  | 11.79 | % |  | 12.00 | % |  | 12.02 | % |  | 11.87 | % |  | 11.97 | %

​

1Borrowers that have experienced financial difficulty.

2Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.

3All periods presented are estimated.

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

​

​

​

11

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 |  |  | Six Months Ended | ​
​ | Jun |  | Mar |  | Dec |  | Sep |  | Jun |  | ​ | Jun |  | June | ​
​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | 2023 | ​ | 2023 | ​ | ​ | 2024 | ​ | 2023 | ​
Selected Performance Ratios (Annualized): | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Return on average assets | ​ | 0.66 | % | ​ | 0.77 | % | ​ | 0.52 | % | ​ | 0.17 | % | ​ | 0.75 | % | ​ | ​ | 0.72 | % | ​ | 0.87 | %
Return on average shareholders' equity | ​ | 6.90 | % | ​ | 8.16 | % | ​ | 5.46 | % | ​ | 1.84 | % | ​ | 7.98 | % | ​ | ​ | 7.53 | % | ​ | 9.36 | %
Return on average tangible common equity¹ | ​ | 8.94 | % | ​ | 10.63 | % | ​ | 7.18 | % | ​ | 2.43 | % | ​ | 10.57 | % | ​ | ​ | 9.77 | % | ​ | 12.46 | %
Noninterest income / average assets | ​ | 0.63 | % | ​ | 0.69 | % | ​ | 0.63 | % | ​ | 0.06 | % | ​ | 0.61 | % | ​ | ​ | 0.66 | % | ​ | 0.60 | %
Noninterest expense / average assets | ​ | 2.41 | % | ​ | 2.35 | % | ​ | 2.47 | % | ​ | 2.37 | % | ​ | 2.34 | % | ​ | ​ | 2.38 | % | ​ | 2.34 | %
Efficiency ratio | ​ | 72.25 | % | ​ | 71.20 | % | ​ | 75.95 | % | ​ | 89.96 | % | ​ | 70.82 | % | ​ | ​ | 71.73 | % | ​ | 67.32 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Selected Performance Ratios (Annualized): | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Operating return on average assets1 | ​ | 0.64 | % | ​ | 0.69 | % | ​ | 0.57 | % | ​ | 0.60 | % | ​ | 0.75 | % | ​ | ​ | 0.67 | % | ​ | 0.87 | %
Operating PPNR return on average assets1 | ​ | 0.90 | % | ​ | 0.84 | % | ​ | 0.86 | % | ​ | 0.84 | % | ​ | 0.96 | % | ​ | ​ | 0.87 | % | ​ | 1.13 | %
Operating return on average shareholders' equity1 | ​ | 6.72 | % | ​ | 7.29 | % | ​ | 6.07 | % | ​ | 6.41 | % | ​ | 7.98 | % | ​ | ​ | 7.00 | % | ​ | 9.36 | %
Operating return on average tangible common equity1 | ​ | 8.70 | % | ​ | 9.49 | % | ​ | 7.98 | % | ​ | 8.46 | % | ​ | 10.57 | % | ​ | ​ | 9.09 | % | ​ | 12.46 | %
Operating efficiency ratio1 | ​ | 72.13 | % | ​ | 73.50 | % | ​ | 73.41 | % | ​ | 73.60 | % | ​ | 70.64 | % | ​ | ​ | 72.81 | % | ​ | 67.16 | %
Operating noninterest income / average assets1 | ​ | 0.60 | % | ​ | 0.58 | % | ​ | 0.63 | % | ​ | 0.62 | % | ​ | 0.61 | % | ​ | ​ | 0.59 | % | ​ | 0.60 | %
Operating noninterest expense / average assets1 | ​ | 2.41 | % | ​ | 2.35 | % | ​ | 2.39 | % | ​ | 2.36 | % | ​ | 2.34 | % | ​ | ​ | 2.38 | % | ​ | 2.34 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Selected Interest Rates and Yields: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Yield on loans and leases, excluding loan fees, FTE | ​ | 5.80 | % | ​ | 5.71 | % | ​ | 5.61 | % | ​ | 5.52 | % | ​ | 5.39 | % | ​ | ​ | 5.76 | % | ​ | 5.30 | %
Yield on loans and leases, FTE | ​ | 5.87 | % | ​ | 5.82 | % | ​ | 5.68 | % | ​ | 5.61 | % | ​ | 5.51 | % | ​ | ​ | 5.84 | % | ​ | 5.54 | %
Yield on earning assets, FTE | ​ | 5.52 | % | ​ | 5.36 | % | ​ | 5.22 | % | ​ | 4.99 | % | ​ | 4.82 | % | ​ | ​ | 5.44 | % | ​ | 4.85 | %
Cost of interest-bearing deposits | ​ | 3.23 | % | ​ | 3.16 | % | ​ | 3.00 | % | ​ | 2.84 | % | ​ | 2.46 | % | ​ | ​ | 3.19 | % | ​ | 2.25 | %
Cost of total deposits | ​ | 2.56 | % | ​ | 2.52 | % | ​ | 2.35 | % | ​ | 2.20 | % | ​ | 1.89 | % | ​ | ​ | 2.54 | % | ​ | 1.73 | %
Cost of interest-bearing liabilities | ​ | 3.29 | % | ​ | 3.23 | % | ​ | 3.07 | % | ​ | 2.89 | % | ​ | 2.53 | % | ​ | ​ | 3.26 | % | ​ | 2.32 | %
Net interest margin, FTE | ​ | 2.97 | % | ​ | 2.85 | % | ​ | 2.86 | % | ​ | 2.81 | % | ​ | 2.93 | % | ​ | ​ | 2.91 | % | ​ | 3.12 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Per Common Share: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Net income, basic | $ | 0.48 | ​ | $ | 0.56 | ​ | $ | 0.37 | ​ | $ | 0.12 | ​ | $ | 0.53 | ​ | ​ | $ | 1.03 | ​ | $ | 1.21 | ​
Net income, diluted |  | 0.48 | ​ |  | 0.55 | ​ |  | 0.37 | ​ |  | 0.12 | ​ |  | 0.52 | ​ | ​ |  | 1.03 | ​ |  | 1.20 | ​
Operating earnings, basic¹ |  | 0.47 | ​ |  | 0.50 | ​ |  | 0.41 | ​ |  | 0.43 | ​ |  | 0.53 | ​ | ​ |  | 0.96 | ​ |  | 1.21 | ​
Operating earnings, diluted¹ |  | 0.46 | ​ |  | 0.49 | ​ |  | 0.41 | ​ |  | 0.43 | ​ |  | 0.52 | ​ | ​ |  | 0.96 | ​ |  | 1.20 | ​
Book value |  | 27.91 | ​ |  | 27.37 | ​ |  | 27.07 | ​ |  | 26.28 | ​ |  | 26.16 | ​ | ​ |  | 27.91 | ​ |  | 26.16 | ​
Tangible book value¹ |  | 21.66 | ​ |  | 21.12 | ​ |  | 20.76 | ​ |  | 19.94 | ​ |  | 19.78 | ​ | ​ |  | 21.66 | ​ |  | 19.78 | ​
Common shares outstanding |  | 16,925,902 | ​ |  | 17,056,704 | ​ |  | 16,988,879 | ​ |  | 16,994,543 | ​ |  | 17,004,092 | ​ | ​ |  | 16,925,902 | ​ |  | 17,004,092 | ​

​

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

​

​

​

12

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended |  | ​ | Six Months Ended | ​
​ |  | Jun |  | Mar |  | Dec |  | Sep |  | Jun |  |  | Jun |  | June | ​
​ | ​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | 2023 | ​ | 2023 | ​ | ​ | 2024 | ​ | 2023 | ​
Operating Earnings: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (GAAP) | ​ | $ | 8,003 | ​ | $ | 9,358 | ​ | $ | 6,190 | ​ | $ | 2,067 | ​ | $ | 8,836 | ​ | ​ | $ | 17,360 | ​ | $ | 20,336 | ​
Noninterest income: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Securities (gains) losses, net | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 6,801 | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Gain on sale of former branch building | ​ |  | (283) | ​ |  | (1,346) | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | (1,629) | ​ |  | — | ​
Noninterest expenses: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​
Donation of a former branch location | ​ |  | — | ​ |  | — | ​ |  | 250 | ​ |  | — | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Accruals for pending litigation | ​ |  | — | ​ |  | — | ​ |  | 675 | ​ |  | — | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Merger related and restructuring expenses | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 110 | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Income taxes: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​
Income tax effect of adjustments | ​ |  | 73 | ​ |  | 348 | ​ |  | (239) | ​ |  | (1,785) | ​ |  | — | ​ | ​ |  | 421 | ​ |  | — | ​
Operating earnings (Non-GAAP) | ​ | $ | 7,793 | ​ | $ | 8,360 | ​ | $ | 6,876 | ​ | $ | 7,193 | ​ | $ | 8,836 | ​ | ​ | $ | 16,152 | ​ | $ | 20,336 | ​
Operating earnings per common share (Non-GAAP): | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Basic | ​ | $ | 0.47 | ​ | $ | 0.50 | ​ | $ | 0.41 | ​ | $ | 0.43 | ​ | $ | 0.53 | ​ | ​ | $ | 0.96 | ​ | $ | 1.21 | ​
Diluted | ​ |  | 0.46 | ​ |  | 0.49 | ​ |  | 0.41 | ​ |  | 0.43 | ​ |  | 0.52 | ​ | ​ |  | 0.96 | ​ |  | 1.20 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Noninterest Income: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Noninterest income (GAAP) | ​ | $ | 7,604 | ​ | $ | 8,380 | ​ | $ | 7,579 | ​ | $ | 691 | ​ | $ | 7,130 | ​ | ​ | $ | 15,984 | ​ | $ | 14,055 | ​
Securities (gains) losses, net | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 6,801 | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Gain on sale of former branch building | ​ |  | (283) | ​ |  | (1,346) | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | (1,629) | ​ |  | — | ​
Operating noninterest income (Non-GAAP) | ​ | $ | 7,321 | ​ | $ | 7,034 | ​ | $ | 7,579 | ​ | $ | 7,492 | ​ | $ | 7,130 | ​ | ​ | $ | 14,355 | ​ | $ | 14,055 | ​
Operating noninterest income (Non-GAAP)/average assets1 | ​ |  | 0.60 | % |  | 0.58 | % |  | 0.63 | % |  | 0.62 | % |  | 0.61 | % | ​ |  | 0.59 | % |  | 0.60 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Noninterest Expense: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Noninterest expense (GAAP) | ​ | $ | 29,201 | ​ | $ | 28,553 | ​ | $ | 29,695 | ​ | $ | 28,516 | ​ | $ | 27,410 | ​ | ​ | $ | 57,754 | ​ | $ | 54,939 | ​
Donation of a former branch location | ​ |  | — | ​ |  | — | ​ |  | (250) | ​ |  | — | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Accruals for pending litigation | ​ | ​ | — | ​ |  | — | ​ |  | (675) | ​ |  | — | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Merger related and restructuring expenses | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (110) | ​ |  | — | ​ | ​ |  | — | ​ |  | — | ​
Operating noninterest expense (Non-GAAP) | ​ | $ | 29,201 | ​ | $ | 28,553 | ​ | $ | 28,770 | ​ | $ | 28,406 | ​ | $ | 27,410 | ​ | ​ | $ | 57,754 | ​ | $ | 54,939 | ​
Operating noninterest expense (Non-GAAP)/average assets2 | ​ |  | 2.41 | % |  | 2.35 | % |  | 2.39 | % |  | 2.36 | % |  | 2.34 | % | ​ |  | 2.38 | % |  | 2.34 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Pre-provision Net revenue ("PPNR") Earnings: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income (GAAP) | ​ | $ | 32,814 | ​ | $ | 31,721 | ​ | $ | 31,517 | ​ | $ | 31,006 | ​ | $ | 31,575 | ​ | ​ | $ | 64,535 | ​ | $ | 67,557 | ​
Operating noninterest income (Non-GAAP) | ​ | ​ | 7,321 | ​ | ​ | 7,034 | ​ | ​ | 7,579 | ​ | ​ | 7,492 | ​ | ​ | 7,130 | ​ | ​ | ​ | 14,355 | ​ | ​ | 14,055 | ​
Operating noninterest expense (Non-GAAP) | ​ | ​ | (29,201) | ​ | ​ | (28,553) | ​ | ​ | (28,770) | ​ | ​ | (28,406) | ​ | ​ | (27,410) | ​ | ​ | ​ | (57,754) | ​ | ​ | (54,939) | ​
Operating PPNR earnings (Non-GAAP) | ​ | $ | 10,934 | ​ | $ | 10,202 | ​ | $ | 10,326 | ​ | $ | 10,092 | ​ | $ | 11,295 | ​ | ​ | $ | 21,136 | ​ | $ | 26,673 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-GAAP Return Ratios: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Operating return on average assets (Non-GAAP)3 | ​ |  | 0.64 | % |  | 0.69 | % |  | 0.57 | % |  | 0.60 | % |  | 0.75 | % | ​ |  | 0.67 | % |  | 0.87 | %
Operating PPNR return on average assets (Non-GAAP)4 | ​ | ​ | 0.90 | % | ​ | 0.84 | % | ​ | 0.86 | % | ​ | 0.84 | % | ​ | 0.96 | % | ​ | ​ | 0.87 | % | ​ | 1.13 | %
Return on average tangible common equity (Non-GAAP)5 | ​ |  | 8.94 | % |  | 10.62 | % |  | 7.18 | % |  | 2.43 | % |  | 10.57 | % | ​ |  | 9.77 | % |  | 12.46 | %
Operating return on average shareholders' equity (Non-GAAP)6 | ​ |  | 6.72 | % |  | 7.29 | % |  | 6.07 | % |  | 6.41 | % |  | 7.98 | % | ​ |  | 7.00 | % |  | 9.36 | %
Operating return on average tangible common equity (Non-GAAP)7 | ​ |  | 8.70 | % |  | 9.49 | % |  | 7.98 | % |  | 8.46 | % |  | 10.57 | % | ​ |  | 9.09 | % |  | 12.46 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Efficiency Ratio: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Efficiency ratio (GAAP) | ​ |  | 72.25 | % |  | 71.20 | % |  | 75.95 | % |  | 89.96 | % |  | 70.82 | % | ​ |  | 71.73 | % |  | 67.32 | %
Adjustment for taxable equivalent yields | ​ |  | (0.63) | % |  | (0.17) | % |  | (0.18) | % |  | (0.27) | % |  | (0.18) | % | ​ |  | (0.40) | % |  | (0.16) | %
Adjustment for securities gains (losses) | ​ |  | — | % |  | — | % |  | — | % |  | (15.89) | % |  | — | % | ​ |  | — | % |  | — | %
Adjustment for sale of branch location | ​ | ​ | 0.51 | % | ​ | 2.46 | % | ​ | — | % | ​ | — | % | ​ | — | % | ​ | ​ | 1.48 | % | ​ | — | %
Adjustment for donation of a former branch location | ​ | ​ | — | % | ​ | — | % | ​ | (0.64) | % | ​ | — | % | ​ | — | % | ​ | ​ | — | % | ​ | — | %
Adjustment for accruals for pending litigation | ​ | ​ | — | % | ​ | — | % | ​ | (1.72) | % | ​ | — | % | ​ | — | % | ​ | ​ | — | % | ​ | — | %
Adjustment for merger related income and costs | ​ |  | — | % |  | — | % |  | — | % |  | (0.20) | % |  | — | % | ​ |  | — | % |  | — | %
Operating efficiency ratio (Non-GAAP) | ​ |  | 72.13 | % |  | 73.50 | % |  | 73.41 | % |  | 73.60 | % |  | 70.64 | % | ​ |  | 72.81 | % |  | 67.16 | %

​

1Operating noninterest income (Non-GAAP) is annualized and divided by average assets.

2Operating noninterest expense (Non-GAAP) is annualized and divided by average assets.

3Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets.

4Operating PPNR return on average assets (Non-GAAP) is the annualized operating PPNR earnings (Non-GAAP) divided by average assets.

5Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP).

6Operating return on average shareholders’ equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average equity.

7Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP).

​

​

13

​

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​
​ |  | Jun |  | Mar |  | Dec |  | Sep |  | Jun | ​
​ | ​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | 2023 | ​ | 2023 | ​
Tangible Common Equity: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​
Shareholders' equity (GAAP) | ​ | $ | 472,465 | ​ | $ | 466,796 | ​ | $ | 459,886 | ​ | $ | 446,652 | ​ | $ | 444,847 | ​
Less goodwill and other intangible assets | ​ |  | 105,929 | ​ |  | 106,537 | ​ |  | 107,148 | ​ |  | 107,792 | ​ |  | 108,439 | ​
Tangible common equity (Non-GAAP) | ​ | $ | 366,536 | ​ | $ | 360,259 | ​ | $ | 352,738 | ​ | $ | 338,860 | ​ | $ | 336,408 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Average Tangible Common Equity: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​
Average shareholders' equity (GAAP) | ​ | $ | 466,371 | ​ | $ | 461,148 | ​ | $ | 449,526 | ​ | $ | 445,432 | ​ | $ | 444,283 | ​
Less average goodwill and other intangible assets | ​ |  | 106,301 | ​ |  | 106,920 | ​ |  | 107,551 | ​ |  | 108,194 | ​ |  | 108,851 | ​
Average tangible common equity (Non-GAAP) | ​ | $ | 360,070 | ​ | $ | 354,228 | ​ | $ | 341,975 | ​ | $ | 337,238 | ​ | $ | 335,432 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tangible Book Value per Common Share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Book value per common share (GAAP) | ​ | $ | 27.91 | ​ | $ | 27.37 | ​ | $ | 27.07 | ​ | $ | 26.28 | ​ | $ | 26.16 | ​
Adjustment due to goodwill and other intangible assets | ​ | ​ | (6.25) | ​ | ​ | (6.25) | ​ | ​ | (6.31) | ​ | ​ | (6.34) | ​ | ​ | (6.38) | ​
Tangible book value per common share (Non-GAAP)1 | ​ | $ | 21.66 | ​ | $ | 21.12 | ​ | $ | 20.76 | ​ | $ | 19.94 | ​ | $ | 19.78 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tangible Common Equity to Tangible Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Assets (GAAP) | ​ | $ | 4,891,009 | ​ | $ | 4,954,690 | ​ | $ | 4,829,387 | ​ | $ | 4,797,171 | ​ | $ | 4,745,800 | ​
Less goodwill and other intangibles | ​ | ​ | 105,929 | ​ | ​ | 106,537 | ​ | ​ | 107,148 | ​ | ​ | 107,792 | ​ | ​ | 108,439 | ​
Tangible Assets (Non-GAAP) | ​ | $ | 4,785,080 | ​ | $ | 4,848,153 | ​ | $ | 4,722,239 | ​ | $ | 4,689,379 | ​ | $ | 4,637,361 | ​
Tangible common equity to tangible assets (Non-GAAP) | ​ | ​ | 7.66% | ​ | ​ | 7.43% | ​ | ​ | 7.47% | ​ | ​ | 7.23% | ​ | ​ | 7.25% | ​

​

​

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

​

​

14