EX-99.1 2 smbk-20250121xex99d1.htm EX-99.1

Exhibit 99.1

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4Q 2024

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SmartFinancial Announces Results for the Fourth Quarter 2024

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KNOXVILLE, TN – January 21, 2025 - SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NYSE: SMBK), today announced net income of $9.6 million, or $0.57 per diluted common share, for the fourth quarter of 2024, compared to net income of $6.2 million, or $0.37 per diluted common share, for the fourth quarter of 2023, and compared to prior quarter net income of $9.1 million, or $0.54 per diluted common share. Operating earnings1, which excludes non-recurring income, net of tax adjustments, totaled $9.6 million, or $0.57 per diluted common share, in the fourth quarter of 2024, compared to $6.9 million, or $0.41 per diluted common share, in the fourth quarter of 2023, and compared to $9.1 million, or $0.54 per diluted common share, in the third quarter of 2024.

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Highlights for the Fourth Quarter of 2024

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| ● | Operating earnings1 of $9.6 million, or $0.57 per diluted common share

| ● | Net organic loan and lease growth of $189 million with 20% annualized quarter-over-quarter increase

| ● | Quarter-over-quarter net tax equivalent interest margin expansion of 13 basis points to 3.24%

| ● | Credit quality remains solid with nonperforming assets to total assets of 0.19%

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

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

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Net Interest Income and Net Interest Margin

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

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

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

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

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

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

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Provision for Credit Losses on Loans and Leases and Credit Quality

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

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

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Dec | ​ | ​ | Sep | ​ | ​ | Increase | ​
​ | Provision for Credit Losses on Loans and Leases Rollforward | ​ | ​ | 2024 | ​ | ​ | 2024 | ​ | ​ | (Decrease) | ​
​ | Beginning balance | ​ | $ | 35,609 | ​ | $ | 34,690 | ​ | $ | 919 | ​
​ | Charge-offs | ​ | ​ | (214) | ​ | ​ | (1,426) | ​ | ​ | 1,212 | ​
​ | Recoveries | ​ | ​ | 53 | ​ | ​ | 72 | ​ | ​ | (19) | ​
​ | Net (charge-offs) recoveries | ​ | ​ | (161) | ​ | ​ | (1,354) | ​ | ​ | 1,193 | ​
​ | Provision for credit losses (1) | ​ | ​ | 1,975 | ​ | ​ | 2,273 | ​ | ​ | (298) | ​
​ | Ending balance | ​ | $ | 37,423 | ​ | $ | 35,609 | ​ | $ | 1,814 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Allowance for credit losses to total loans and leases, gross | ​ | ​ | 0.96 | % | ​ | 0.96 | % | ​ | - | %

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

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

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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 | ​ | ​ | 2024 | ​ | ​ | 2024 | ​ | ​ | (Decrease) | ​
​ | Nonaccrual loans and leases | ​ | $ | 7,710 | ​ | $ | 9,319 | ​ | $ | (1,609) | ​
​ | Loans and leases past due 90 days or more and still accruing | ​ | ​ | 162 | ​ | ​ | 172 | ​ | ​ | (10) | ​
​ | Total nonperforming loans and leases | ​ | ​ | 7,872 | ​ | ​ | 9,491 | ​ | ​ | (1,619) | ​
​ | Other real estate owned | ​ | ​ | 179 | ​ | ​ | 179 | ​ | ​ | - | ​
​ | Other repossessed assets | ​ | ​ | 2,037 | ​ | ​ | 2,949 | ​ | ​ | (912) | ​
​ | Total nonperforming assets | ​ | $ | 10,088 | ​ | $ | 12,619 | ​ | $ | (2,531) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Nonperforming loans and leases to total loans and leases, gross | ​ | ​ | 0.20 | % | ​ | 0.26 | % | ​ | (0.06) | %
​ | Nonperforming assets to total assets | ​ | ​ | 0.19 | % | ​ | 0.26 | % | ​ | (0.07) | %

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Noninterest Income

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

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2

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

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Noninterest Expense

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

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

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Income Tax Expense

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

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Balance Sheet Trends

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

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

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3

Shareholders' equity at December 31, 2024, totaled $491.5 million, an increase of $31.6 million, from December 31, 2023. The increase in shareholders' equity was primarily driven by net income of $36.1 million for the twelve months ended December 31, 2024, and a positive change of $2.2 million in accumulated other comprehensive income, offset by dividends paid of $5.4 million. Tangible book value per share1 was $22.85 at December 31, 2024, compared to $20.76 at December 31, 2023. Tangible common equity1 as a percentage of tangible assets1 was 7.48% at December 31, 2024, compared with 7.47% at December 31, 2023.

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

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Board of Directors Declares Dividend

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

Conference Call Information

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

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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 Florida. Recruiting the best people, delivering exceptional client service, strategic branching, and a disciplined approach to lending have contributed to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.

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Source | ​
SmartFinancial, Inc. | ​
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Investor Contacts | ​
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Billy Carroll | Nathan Strall
President & Chief Executive Officer | Vice President and Director of Strategy & Corporate Development
Email: billy.carroll@smartbank.com | Email: nathan.strall@smartbank.com
Phone: (865) 868-0613 | Phone: (865) 868-2604
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1 Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliation

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4

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 (“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:

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| (i) | Operating earnings

| (ii) | Operating noninterest income

| (iii) | Operating noninterest expense

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

| (v) | Tangible common equity

| (vi) | Average tangible common equity

| (vii) | Tangible book value per common share

| (viii) | Tangible assets

| (ix) | Operating efficiency ratio

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

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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.

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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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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 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,

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

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

| (3) | general risks related to our merger and acquisition activity, including risks associated with our pursuit of future acquisitions;

| (4) | changes in management’s plans for the future;

| (5) | prevailing, or changes in, economic or political conditions (including those resulting from the new administration and Congress), particularly in our market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing;

| (6) | our ability to anticipate interest rate changes and manage interest rate risk (including the impact of higher interest rates on macroeconomic conditions, competition, and the cost of doing business and the impact of interest rate fluctuations on our financial projections, models and guidance);

| (7) | increased technology and cybersecurity risks, including generative artificial intelligence risks;

| (8) | credit risk associated with our lending activities;

| (9) | changes in loan demand, real estate values, or competition;

| (10) | developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance;

| (11) | changes in accounting principles, policies, or guidelines;

| (12) | changes in applicable laws, rules, or regulations;

| (13) | adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions;

| (14) | potential impacts of any adverse developments in the banking industry, including the impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto;

| (15) | significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities;

| (16) | the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine or the conflict in Israel and surrounding areas; and

| (17) | other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services.

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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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6

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

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

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7

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands except share and per share data)

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

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8

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended |
​ | ​ | December 31, 2024 | ​ | September 30, 2024 | ​ | December 31, 2023 |
​ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  |  | ​ |  | Yield/ |
​ | ​ | Balance | ​ | Interest | ​ | Cost | ​ | Balance | ​ | Interest | ​ | Cost | ​ | Balance | ​ | Interest | ​ | Cost |
Assets: |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  | ​
Loans and leases, including fees1 | ​ | $ | 3,830,301 | ​ | $ | 58,188 |  | 6.04 | % | $ | 3,634,808 | ​ | $ | 54,993 |  | 6.02 | % | $ | 3,408,430 | ​ | $ | 48,767 |  | 5.68 | %
Taxable securities | ​ |  | 554,152 | ​ |  | 5,050 |  | 3.63 | % |  | 564,978 | ​ |  | 5,233 |  | 3.68 | % |  | 618,511 | ​ |  | 4,344 |  | 2.79 | %
Tax-exempt securities2 | ​ |  | 63,309 | ​ |  | 444 |  | 2.79 | % |  | 63,561 | ​ |  | 443 |  | 2.77 | % |  | 63,767 | ​ |  | 445 |  | 2.77 | %
Federal funds sold and other earning assets | ​ |  | 233,793 | ​ |  | 2,745 |  | 4.67 | % |  | 267,252 | ​ |  | 3,634 |  | 5.41 | % |  | 289,896 | ​ |  | 4,032 |  | 5.52 | %
Total interest-earning assets | ​ |  | 4,681,555 | ​ |  | 66,427 |  | 5.64 | % |  | 4,530,599 | ​ |  | 64,303 |  | 5.65 | % |  | 4,380,604 | ​ |  | 57,588 |  | 5.22 | %
Noninterest-earning assets | ​ |  | 407,695 | ​ |  | ​ |  | ​ | ​ |  | 381,306 | ​ |  |  |  |  | ​ |  | 386,202 | ​ |  |  |  |  | ​
Total assets | ​ | $ | 5,089,250 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,911,905 | ​ |  |  |  |  | ​ | $ | 4,766,806 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Shareholders’ Equity: | ​ |  |  | ​ |  |  | ​ |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  |  |  | ​
Interest-bearing demand deposits | ​ | $ | 826,750 | ​ |  | 3,775 | ​ | 1.82 | % | $ | 925,307 | ​ |  | 5,289 |  | 2.27 | % | $ | 974,637 | ​ |  | 5,631 |  | 2.29 | %
Money market and savings deposits | ​ |  | 1,923,265 | ​ |  | 14,830 | ​ | 3.07 | % |  | 1,917,301 | ​ |  | 16,608 |  | 3.45 | % |  | 1,764,826 | ​ |  | 14,556 |  | 3.27 | %
Time deposits | ​ |  | 861,211 | ​ |  | 8,832 | ​ | 4.08 | % |  | 560,699 | ​ |  | 5,453 |  | 3.87 | % |  | 556,996 | ​ |  | 4,739 |  | 3.38 | %
Total interest-bearing deposits | ​ |  | 3,611,226 | ​ |  | 27,437 | ​ | 3.02 | % |  | 3,403,307 | ​ |  | 27,350 |  | 3.20 | % |  | 3,296,459 | ​ |  | 24,926 |  | 3.00 | %
Borrowings | ​ |  | 9,145 | ​ |  | 89 | ​ | 3.87 | % |  | 53,592 | ​ |  | 709 |  | 5.26 | % |  | 13,420 | ​ |  | 162 |  | 4.79 | %
Subordinated debt | ​ |  | 39,672 | ​ |  | 787 | ​ | 7.89 | % |  | 40,846 | ​ |  | 865 |  | 8.42 | % |  | 42,087 | ​ |  | 890 |  | 8.39 | %
Total interest-bearing liabilities | ​ |  | 3,660,043 | ​ |  | 28,313 | ​ | 3.08 | % |  | 3,497,745 | ​ |  | 28,924 |  | 3.29 | % |  | 3,351,966 | ​ |  | 25,978 |  | 3.07 | %
Noninterest-bearing deposits | ​ |  | 889,151 | ​ |  | ​ | ​ | ​ | ​ |  | 884,938 | ​ |  |  |  |  | ​ |  | 915,259 | ​ |  |  |  |  | ​
Other liabilities | ​ |  | 50,884 | ​ |  | ​ | ​ | ​ | ​ |  | 50,580 | ​ |  |  |  |  | ​ |  | 50,055 | ​ |  |  |  |  | ​
Total liabilities | ​ |  | 4,600,078 | ​ |  | ​ | ​ | ​ | ​ |  | 4,433,263 | ​ |  |  |  |  | ​ |  | 4,317,280 | ​ |  |  |  |  | ​
Shareholders' equity | ​ |  | 489,172 | ​ |  | ​ | ​ | ​ | ​ |  | 478,642 | ​ |  |  |  |  | ​ |  | 449,526 | ​ |  |  |  |  | ​
Total liabilities and shareholders' equity | ​ | $ | 5,089,250 | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,911,905 | ​ |  |  |  |  | ​ | $ | 4,766,806 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income, taxable equivalent | ​ | ​ | ​ | ​ | $ | 38,114 | ​ | ​ | ​ |  |  | ​ | $ | 35,379 |  |  | ​ |  |  | ​ | $ | 31,610 |  |  | ​
Interest rate spread | ​ |  | ​ | ​ |  | ​ | ​ | 2.57 | % |  |  | ​ |  |  |  | 2.36 | % |  |  | ​ |  |  |  | 2.14 | %
Tax equivalent net interest margin | ​ |  | ​ | ​ |  | ​ | ​ | 3.24 | % |  |  | ​ |  |  |  | 3.11 | % |  |  | ​ |  |  |  | 2.86 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Percentage of average interest-earning assets to average interest-bearing liabilities | ​ |  | ​ | ​ |  | ​ | ​ | 127.91 | % |  |  | ​ |  |  |  | 129.53 | % |  |  | ​ |  |  |  | 130.69 | %
Percentage of average equity to average assets | ​ |  | ​ | ​ |  | ​ | ​ | 9.61 | % |  |  | ​ |  |  |  | 9.74 | % |  |  | ​ |  |  |  | 9.43 | %

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

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

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9

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended
​ | ​ | December 31, 2024 | ​ | December 31, 2023 | ​
​ |  | Average |  | ​ | ​ |  | Yield/ |  | Average |  | ​ | ​ |  | Yield/ |
​ | ​ | Balance | ​ | Interest | ​ | Cost | ​ | Balance | ​ | Interest | ​ | Cost | ​
Assets: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |
Loans and leases, including fees1 | ​ | $ | 3,607,558 | ​ | $ | 214,310 |  | ​ | 5.94 | % | $ | 3,334,523 | ​ | $ | 186,479 |  | 5.59 | %
Taxable securities | ​ |  | 580,001 | ​ |  | 20,151 |  | ​ | 3.47 | % |  | 713,637 | ​ |  | 16,665 |  | 2.34 | %
Tax-exempt securities2 | ​ |  | 63,679 | ​ |  | 1,780 |  | ​ | 2.80 | % |  | 64,816 | ​ |  | 1,795 |  | 2.77 | %
Federal funds sold and other earning assets | ​ |  | 300,081 | ​ |  | 16,000 |  | ​ | 5.33 | % |  | 272,864 | ​ |  | 13,481 |  | 4.94 | %
Total interest-earning assets | ​ |  | 4,551,319 | ​ |  | 252,241 |  | ​ | 5.54 | % |  | 4,385,840 | ​ |  | 218,420 |  | 4.98 | %
Noninterest-earning assets | ​ |  | 388,267 | ​ |  | ​ |  | ​ | ​ | ​ |  | 370,436 | ​ |  |  |  |  | ​
Total assets | ​ | $ | 4,939,586 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,756,276 | ​ |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Shareholders’ Equity: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Interest-bearing demand deposits | ​ | $ | 932,598 | ​ |  | 21,074 | ​ |  | 2.26 | % | $ | 959,639 | ​ |  | 20,214 |  | 2.11 | %
Money market and savings deposits | ​ |  | 1,913,673 | ​ |  | 64,116 | ​ |  | 3.35 | % |  | 1,768,869 | ​ |  | 50,468 |  | 2.85 | %
Time deposits | ​ |  | 623,652 | ​ |  | 24,070 | ​ |  | 3.86 | % |  | 520,799 | ​ |  | 13,578 |  | 2.61 | %
Total interest-bearing deposits | ​ |  | 3,469,923 | ​ |  | 109,260 | ​ |  | 3.15 | % |  | 3,249,307 | ​ |  | 84,260 |  | 2.59 | %
Borrowings | ​ |  | 21,719 | ​ |  | 1,075 | ​ |  | 4.95 | % |  | 17,824 | ​ |  | 936 |  | 5.25 | %
Subordinated debt | ​ |  | 41,184 | ​ |  | 3,434 | ​ |  | 8.34 | % |  | 42,055 | ​ |  | 2,767 |  | 6.58 | %
Total interest-bearing liabilities | ​ |  | 3,532,826 | ​ |  | 113,769 | ​ |  | 3.22 | % |  | 3,309,186 | ​ |  | 87,963 |  | 2.66 | %
Noninterest-bearing deposits | ​ |  | 883,923 | ​ |  | ​ | ​ |  | ​ | ​ |  | 958,078 | ​ |  |  |  | ​ | ​
Other liabilities | ​ |  | 48,949 | ​ |  | ​ | ​ |  | ​ | ​ |  | 46,052 | ​ |  |  |  | ​ | ​
Total liabilities | ​ |  | 4,465,698 | ​ |  | ​ | ​ |  | ​ | ​ |  | 4,313,316 | ​ |  |  |  | ​ | ​
Shareholders' equity | ​ |  | 473,888 | ​ |  | ​ | ​ |  | ​ | ​ |  | 442,960 | ​ |  |  |  | ​ | ​
Total liabilities and shareholders' equity | ​ | $ | 4,939,586 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 4,756,276 | ​ |  |  |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income, taxable equivalent | ​ | ​ | ​ | ​ | $ | 138,472 | ​ | ​ | ​ | ​ |  |  | ​ | $ | 130,457 |  | ​ | ​
Interest rate spread | ​ |  | ​ | ​ |  | ​ | ​ |  | 2.32 | % |  |  | ​ |  |  |  | 2.32 | %
Tax equivalent net interest margin | ​ |  | ​ | ​ |  | ​ | ​ |  | 3.04 | % |  |  | ​ |  |  |  | 2.97 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Percentage of average interest-earning assets to average interest-bearing liabilities | ​ |  | ​ | ​ |  | ​ | ​ |  | 128.83 | % |  |  | ​ |  |  |  | 132.54 | %
Percentage of average equity to average assets | ​ |  | ​ | ​ |  | ​ | ​ |  | 9.59 | % |  |  | ​ |  |  |  | 9.31 | %

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

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

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10

​

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of and for The Three Months Ended |
​ |  | Dec |  | Sep |  | Jun |  | Mar |  | Dec |
​ | ​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2023 |
Composition of Loans and Leases: |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​
Commercial real estate: |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ |  |  | ​ |  | ​
Owner occupied | ​ | $ | 867,678 | ​ | $ | 868,077 | ​ | $ | 829,085 | ​ | $ | 804,557 | ​ | $ | 798,416 | ​
Non-owner occupied | ​ |  | 1,080,404 | ​ |  | 1,031,708 | ​ |  | 986,278 | ​ |  | 938,648 | ​ |  | 940,789 | ​
Commercial real estate, total | ​ |  | 1,948,082 | ​ |  | 1,899,785 | ​ |  | 1,815,363 | ​ |  | 1,743,205 | ​ |  | 1,739,205 | ​
Commercial & industrial | ​ |  | 775,620 | ​ |  | 731,600 | ​ |  | 701,460 | ​ |  | 667,903 | ​ |  | 645,918 | ​
Construction & land development | ​ |  | 361,735 | ​ |  | 315,006 | ​ |  | 294,575 | ​ |  | 321,860 | ​ |  | 327,185 | ​
Consumer real estate | ​ |  | 741,836 | ​ |  | 690,504 | ​ |  | 678,331 | ​ |  | 659,209 | ​ |  | 649,867 | ​
Leases | ​ | ​ | 64,878 | ​ | ​ | 67,052 | ​ | ​ | 70,299 | ​ | ​ | 71,909 | ​ | ​ | 68,752 | ​
Consumer and other | ​ |  | 14,189 | ​ |  | 13,531 | ​ |  | 14,130 | ​ |  | 13,469 | ​ |  | 13,535 | ​
Total loans and leases | ​ | $ | 3,906,340 | ​ | $ | 3,717,478 | ​ | $ | 3,574,158 | ​ | $ | 3,477,555 | ​ | $ | 3,444,462 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Asset Quality and Additional Loan Data: | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Nonperforming loans and leases | ​ | $ | 7,872 | ​ | $ | 9,491 | ​ | $ | 6,642 | ​ | $ | 6,266 | ​ | $ | 8,101 | ​
Other real estate owned | ​ |  | 179 | ​ |  | 179 | ​ |  | 688 | ​ |  | 696 | ​ |  | 517 | ​
Other repossessed assets | ​ | ​ | 2,037 | ​ | ​ | 2,949 | ​ | ​ | 2,645 | ​ | ​ | 2,033 | ​ | ​ | 1,117 | ​
Total nonperforming assets | ​ | $ | 10,088 | ​ | $ | 12,619 | ​ | $ | 9,975 | ​ | $ | 8,995 | ​ | $ | 9,735 | ​
Modified loans and leases1 not included in nonperforming loans and leases | ​ | $ | 3,989 | ​ | $ | 4,053 | ​ | $ | 4,241 | ​ | $ | 4,413 | ​ | $ | 4,245 | ​
Net charge-offs to average loans and leases (annualized) | ​ |  | 0.02 | % |  | 0.15 | % |  | 0.05 | % |  | 0.09 | % |  | 0.04 | %
Allowance for credit losses to loans and leases | ​ |  | 0.96 | % |  | 0.96 | % |  | 0.97 | % |  | 0.98 | % |  | 1.02 | %
Nonperforming loans and leases to total loans and leases, gross | ​ |  | 0.20 | % |  | 0.26 | % |  | 0.19 | % |  | 0.18 | % |  | 0.24 | %
Nonperforming assets to total assets | ​ |  | 0.19 | % |  | 0.26 | % |  | 0.20 | % |  | 0.18 | % |  | 0.20 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital Ratios: | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Equity to Assets | ​ |  | 9.32 | % |  | 9.96 | % |  | 9.66 | % |  | 9.42 | % |  | 9.52 | %
Tangible common equity to tangible assets (Non-GAAP)2 | ​ |  | 7.48 | % |  | 7.99 | % |  | 7.66 | % |  | 7.43 | % |  | 7.47 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
SmartFinancial, Inc.3 | ​ |  |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Tier 1 leverage | ​ |  | 8.33 | % |  | 8.44 | % |  | 8.32 | % |  | 8.23 | % |  | 8.27 | %
Common equity Tier 1 | ​ |  | 9.83 | % |  | 10.06 | % |  | 10.06 | % |  | 10.20 | % |  | 10.14 | %
Tier 1 capital | ​ |  | 9.83 | % |  | 10.06 | % |  | 10.06 | % |  | 10.20 | % |  | 10.14 | %
Total capital | ​ |  | 11.17 | % |  | 11.62 | % |  | 11.68 | % |  | 11.85 | % |  | 11.78 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
SmartBank | ​ |  | Estimated4 | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​
Tier 1 leverage | ​ |  | 8.98 | % |  | 9.17 | % |  | 9.11 | % |  | 9.07 | % |  | 9.18 | %
Common equity Tier 1 | ​ |  | 10.58 | % |  | 10.92 | % |  | 11.02 | % |  | 11.23 | % |  | 11.26 | %
Tier 1 capital | ​ |  | 10.58 | % |  | 10.92 | % |  | 11.02 | % |  | 11.23 | % |  | 11.26 | %
Total capital | ​ |  | 11.36 | % |  | 11.69 | % |  | 11.79 | % |  | 12.00 | % |  | 12.02 | %

​

1Borrowers that have experienced financial difficulty.

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

3All periods presented are estimated.

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

​

​

​

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 |  |  | Year Ended | ​
​ | Dec |  | Sep |  | Jun |  | Mar |  | Dec |  | ​ | Dec |  | Dec | ​
​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | ​ | 2024 | ​ | 2023 | ​
Selected Performance Ratios (Annualized): | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Return on average assets | ​ | 0.75 | % | ​ | 0.74 | % | ​ | 0.66 | % | ​ | 0.77 | % | ​ | 0.52 | % | ​ | ​ | 0.73 | % | ​ | 0.60 | %
Return on average shareholders' equity | ​ | 7.84 | % | ​ | 7.60 | % | ​ | 6.90 | % | ​ | 8.16 | % | ​ | 5.46 | % | ​ | ​ | 7.63 | % | ​ | 6.45 | %
Return on average tangible common equity¹ | ​ | 9.99 | % | ​ | 9.75 | % | ​ | 8.94 | % | ​ | 10.63 | % | ​ | 7.18 | % | ​ | ​ | 9.82 | % | ​ | 8.55 | %
Noninterest income / average assets | ​ | 0.71 | % | ​ | 0.74 | % | ​ | 0.63 | % | ​ | 0.69 | % | ​ | 0.63 | % | ​ | ​ | 0.69 | % | ​ | 0.47 | %
Noninterest expense / average assets | ​ | 2.52 | % | ​ | 2.50 | % | ​ | 2.41 | % | ​ | 2.35 | % | ​ | 2.47 | % | ​ | ​ | 2.45 | % | ​ | 2.38 | %
Efficiency ratio | ​ | 68.98 | % | ​ | 69.83 | % | ​ | 72.25 | % | ​ | 71.20 | % | ​ | 75.95 | % | ​ | ​ | 70.49 | % | ​ | 74.24 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Selected Performance Ratios (Annualized): | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Operating return on average assets1 | ​ | 0.75 | % | ​ | 0.74 | % | ​ | 0.64 | % | ​ | 0.69 | % | ​ | 0.57 | % | ​ | ​ | 0.71 | % | ​ | 0.72 | %
Operating PPNR return on average assets1 | ​ | 1.13 | % | ​ | 1.08 | % | ​ | 0.90 | % | ​ | 0.84 | % | ​ | 0.86 | % | ​ | ​ | 0.99 | % | ​ | 0.99 | %
Operating return on average shareholders' equity1 | ​ | 7.80 | % | ​ | 7.60 | % | ​ | 6.72 | % | ​ | 7.29 | % | ​ | 6.07 | % | ​ | ​ | 7.36 | % | ​ | 7.77 | %
Operating return on average tangible common equity1 | ​ | 9.94 | % | ​ | 9.75 | % | ​ | 8.70 | % | ​ | 9.49 | % | ​ | 7.98 | % | ​ | ​ | 9.48 | % | ​ | 10.29 | %
Operating efficiency ratio1 | ​ | 68.58 | % | ​ | 69.28 | % | ​ | 72.13 | % | ​ | 73.50 | % | ​ | 73.41 | % | ​ | ​ | 70.72 | % | ​ | 70.26 | %
Operating noninterest income / average assets1 | ​ | 0.70 | % | ​ | 0.74 | % | ​ | 0.60 | % | ​ | 0.58 | % | ​ | 0.63 | % | ​ | ​ | 0.66 | % | ​ | 0.61 | %
Operating noninterest expense / average assets1 | ​ | 2.52 | % | ​ | 2.50 | % | ​ | 2.41 | % | ​ | 2.35 | % | ​ | 2.39 | % | ​ | ​ | 2.45 | % | ​ | 2.36 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Selected Interest Rates and Yields: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Yield on loans and leases, excluding loan fees, FTE | ​ | 5.95 | % | ​ | 5.95 | % | ​ | 5.80 | % | ​ | 5.71 | % | ​ | 5.61 | % | ​ | ​ | 5.86 | % | ​ | 5.43 | %
Yield on loans and leases, FTE | ​ | 6.04 | % | ​ | 6.02 | % | ​ | 5.87 | % | ​ | 5.82 | % | ​ | 5.68 | % | ​ | ​ | 5.94 | % | ​ | 5.59 | %
Yield on earning assets, FTE | ​ | 5.64 | % | ​ | 5.65 | % | ​ | 5.52 | % | ​ | 5.36 | % | ​ | 5.22 | % | ​ | ​ | 5.54 | % | ​ | 4.98 | %
Cost of interest-bearing deposits | ​ | 3.02 | % | ​ | 3.20 | % | ​ | 3.23 | % | ​ | 3.16 | % | ​ | 3.00 | % | ​ | ​ | 3.15 | % | ​ | 2.59 | %
Cost of total deposits | ​ | 2.43 | % | ​ | 2.54 | % | ​ | 2.56 | % | ​ | 2.52 | % | ​ | 2.35 | % | ​ | ​ | 2.51 | % | ​ | 2.00 | %
Cost of interest-bearing liabilities | ​ | 3.08 | % | ​ | 3.29 | % | ​ | 3.29 | % | ​ | 3.23 | % | ​ | 3.07 | % | ​ | ​ | 3.22 | % | ​ | 2.66 | %
Net interest margin, FTE | ​ | 3.24 | % | ​ | 3.11 | % | ​ | 2.97 | % | ​ | 2.85 | % | ​ | 2.86 | % | ​ | ​ | 3.04 | % | ​ | 2.97 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Per Common Share: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​
Net income, basic | $ | 0.58 | ​ | $ | 0.55 | ​ | $ | 0.48 | ​ | $ | 0.56 | ​ | $ | 0.37 | ​ | ​ | $ | 2.16 | ​ | $ | 1.70 | ​
Net income, diluted |  | 0.57 | ​ |  | 0.54 | ​ |  | 0.48 | ​ |  | 0.55 | ​ |  | 0.37 | ​ | ​ |  | 2.14 | ​ |  | 1.69 | ​
Operating earnings, basic¹ |  | 0.57 | ​ |  | 0.55 | ​ |  | 0.47 | ​ |  | 0.50 | ​ |  | 0.41 | ​ | ​ |  | 2.08 | ​ |  | 2.05 | ​
Operating earnings, diluted¹ |  | 0.57 | ​ |  | 0.54 | ​ |  | 0.46 | ​ |  | 0.49 | ​ |  | 0.41 | ​ | ​ |  | 2.07 | ​ |  | 2.03 | ​
Book value |  | 29.04 | ​ |  | 28.89 | ​ |  | 27.91 | ​ |  | 27.37 | ​ |  | 27.07 | ​ | ​ |  | 29.04 | ​ |  | 27.07 | ​
Tangible book value¹ |  | 22.85 | ​ |  | 22.67 | ​ |  | 21.66 | ​ |  | 21.12 | ​ |  | 20.76 | ​ | ​ |  | 22.85 | ​ |  | 20.76 | ​
Common shares outstanding |  | 16,925,672 | ​ |  | 16,926,374 | ​ |  | 16,925,902 | ​ |  | 17,056,704 | ​ |  | 16,988,879 | ​ | ​ |  | 16,925,672 | ​ |  | 16,988,879 | ​

​

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

​

​

​

12

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Three Months Ended |  | ​ | Year Ended | ​
​ | Dec |  | Sep |  | Jun |  | Mar |  | Dec |  |  | Dec |  | Dec | ​
​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2023 | ​ | ​ | 2024 | ​ | 2023 | ​
Operating Earnings: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (GAAP) | $ | 9,641 | ​ | $ | 9,140 | ​ | $ | 8,003 | ​ | $ | 9,358 | ​ | $ | 6,190 | ​ | ​ | $ | 36,141 | ​ | $ | 28,593 | ​
Noninterest income: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Securities (gains) losses, net |  | (64) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | (64) | ​ |  | 6,801 | ​
Gain on sale of former branch building |  | — | ​ |  | — | ​ |  | (283) | ​ |  | (1,346) | ​ |  | — | ​ | ​ |  | (1,629) | ​ |  | — | ​
Noninterest expenses: |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​
Donation of a former branch location |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 250 | ​ | ​ |  | — | ​ |  | 250 | ​
Accruals for pending litigation |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 675 | ​ | ​ |  | — | ​ |  | 675 | ​
Merger related and restructuring expenses |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | — | ​ |  | 110 | ​
Income taxes: |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​
Income tax effect of adjustments |  | 17 | ​ |  | — | ​ |  | 73 | ​ |  | 348 | ​ |  | (239) | ​ | ​ |  | 437 | ​ |  | (2,024) | ​
Operating earnings (Non-GAAP) | $ | 9,594 | ​ | $ | 9,140 | ​ | $ | 7,793 | ​ | $ | 8,360 | ​ | $ | 6,876 | ​ | ​ | $ | 34,885 | ​ | $ | 34,405 | ​
Operating earnings per common share (Non-GAAP): |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Basic | $ | 0.57 | ​ | $ | 0.55 | ​ | $ | 0.47 | ​ | $ | 0.50 | ​ | $ | 0.41 | ​ | ​ | $ | 2.08 | ​ | $ | 2.05 | ​
Diluted |  | 0.57 | ​ |  | 0.54 | ​ |  | 0.46 | ​ |  | 0.49 | ​ |  | 0.41 | ​ | ​ |  | 2.07 | ​ |  | 2.03 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Noninterest Income: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Noninterest income (GAAP) | $ | 9,030 | ​ | $ | 9,139 | ​ | $ | 7,604 | ​ | $ | 8,380 | ​ | $ | 7,579 | ​ | ​ | $ | 34,152 | ​ | $ | 22,325 | ​
Securities (gains) losses, net |  | (64) | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | (64) | ​ |  | 6,801 | ​
Gain on sale of former branch building |  | — | ​ |  | — | ​ |  | (283) | ​ |  | (1,346) | ​ |  | — | ​ | ​ |  | (1,629) | ​ |  | — | ​
Operating noninterest income (Non-GAAP) | $ | 8,966 | ​ | $ | 9,139 | ​ | $ | 7,321 | ​ | $ | 7,034 | ​ | $ | 7,579 | ​ | ​ | $ | 32,459 | ​ | $ | 29,126 | ​
Operating noninterest income (Non-GAAP)/average assets1 |  | 0.70 | % |  | 0.74 | % |  | 0.60 | % |  | 0.58 | % |  | 0.63 | % | ​ |  | 0.66 | % |  | 0.61 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Noninterest Expense: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Noninterest expense (GAAP) | $ | 32,291 | ​ | $ | 30,846 | ​ | $ | 29,201 | ​ | $ | 28,553 | ​ | $ | 29,695 | ​ | ​ | $ | 120,890 | ​ | $ | 113,150 | ​
Donation of a former branch location |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (250) | ​ | ​ |  | — | ​ |  | (250) | ​
Accruals for pending litigation | ​ | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (675) | ​ | ​ |  | — | ​ |  | (675) | ​
Merger related and restructuring expenses |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ |  | — | ​ |  | (110) | ​
Operating noninterest expense (Non-GAAP) | $ | 32,291 | ​ | $ | 30,846 | ​ | $ | 29,201 | ​ | $ | 28,553 | ​ | $ | 28,770 | ​ | ​ | $ | 120,890 | ​ | $ | 112,115 | ​
Operating noninterest expense (Non-GAAP)/average assets2 |  | 2.52 | % |  | 2.50 | % |  | 2.41 | % |  | 2.35 | % |  | 2.39 | % | ​ |  | 2.45 | % |  | 2.36 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Pre-provision Net revenue ("PPNR") Earnings: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income (GAAP) | $ | 37,783 | ​ | $ | 35,032 | ​ | $ | 32,814 | ​ | $ | 31,721 | ​ | $ | 31,517 | ​ | ​ | $ | 137,350 | ​ | $ | 130,080 | ​
Operating noninterest income (Non-GAAP) | ​ | 8,966 | ​ | ​ | 9,139 | ​ | ​ | 7,321 | ​ | ​ | 7,034 | ​ | ​ | 7,579 | ​ | ​ | ​ | 32,459 | ​ | ​ | 29,126 | ​
Operating noninterest expense (Non-GAAP) | ​ | (32,291) | ​ | ​ | (30,846) | ​ | ​ | (29,201) | ​ | ​ | (28,553) | ​ | ​ | (28,770) | ​ | ​ | ​ | (120,890) | ​ | ​ | (112,115) | ​
Operating PPNR earnings (Non-GAAP) | $ | 14,458 | ​ | $ | 13,325 | ​ | $ | 10,934 | ​ | $ | 10,202 | ​ | $ | 10,326 | ​ | ​ | $ | 48,919 | ​ | $ | 47,091 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-GAAP Return Ratios: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Operating return on average assets (Non-GAAP)3 |  | 0.75 | % |  | 0.74 | % |  | 0.64 | % |  | 0.69 | % |  | 0.57 | % | ​ |  | 0.71 | % |  | 0.72 | %
Operating PPNR return on average assets (Non-GAAP)4 | ​ | 1.13 | % | ​ | 1.08 | % | ​ | 0.90 | % | ​ | 0.84 | % | ​ | 0.86 | % | ​ | ​ | 0.99 | % | ​ | 0.99 | %
Return on average tangible common equity (Non-GAAP)5 |  | 9.99 | % |  | 9.75 | % |  | 8.93 | % |  | 10.63 | % |  | 7.18 | % | ​ |  | 9.82 | % |  | 8.55 | %
Operating return on average shareholders' equity (Non-GAAP)6 |  | 7.80 | % |  | 7.60 | % |  | 6.72 | % |  | 7.29 | % |  | 6.07 | % | ​ |  | 7.36 | % |  | 7.77 | %
Operating return on average tangible common equity (Non-GAAP)7 |  | 9.94 | % |  | 9.75 | % |  | 8.70 | % |  | 9.49 | % |  | 7.98 | % | ​ |  | 9.48 | % |  | 10.29 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Efficiency Ratio: |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ | ​ |  |  | ​ |  |  | ​
Efficiency ratio (GAAP) |  | 68.98 | % |  | 69.83 | % |  | 72.25 | % |  | 71.20 | % |  | 75.95 | % | ​ |  | 70.49 | % |  | 74.24 | %
Adjustment for taxable equivalent yields |  | (0.49) | % |  | (0.55) | % |  | (0.63) | % |  | (0.17) | % |  | (0.18) | % | ​ |  | (0.46) | % |  | (0.18) | %
Adjustment for securities gains (losses) |  | 0.09 | % |  | — | % |  | — | % |  | — | % |  | — | % | ​ |  | 0.03 | % |  | (3.17) | %
Adjustment for sale of branch location | ​ | — | % | ​ | — | % | ​ | 0.51 | % | ​ | 2.46 | % | ​ | — | % | ​ | ​ | 0.66 | % | ​ | — | %
Adjustment for donation of a former branch location | ​ | — | % | ​ | — | % | ​ | — | % | ​ | — | % | ​ | (0.64) | % | ​ | ​ | — | % | ​ | (0.16) | %
Adjustment for accruals for pending litigation | ​ | — | % | ​ | — | % | ​ | — | % | ​ | — | % | ​ | (1.72) | % | ​ | ​ | — | % | ​ | (0.44) | %
Adjustment for merger related income and costs |  | — | % |  | — | % |  | — | % |  | — | % |  | — | % | ​ |  | — | % |  | (0.03) | %
Operating efficiency ratio (Non-GAAP) |  | 68.58 | % |  | 69.28 | % |  | 72.13 | % |  | 73.50 | % |  | 73.41 | % | ​ |  | 70.72 | % |  | 70.26 | %

​

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

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

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

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

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

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

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

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13

​

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​
​ |  | Dec |  | Sep |  | Jun |  | Mar |  | Dec | ​
​ | ​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2024 | ​ | 2023 | ​
Tangible Common Equity: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​
Shareholders' equity (GAAP) | ​ | $ | 491,461 | ​ | $ | 489,023 | ​ | $ | 472,465 | ​ | $ | 466,796 | ​ | $ | 459,886 | ​
Less goodwill and other intangible assets | ​ |  | 104,723 | ​ |  | 105,324 | ​ |  | 105,929 | ​ |  | 106,537 | ​ |  | 107,148 | ​
Tangible common equity (Non-GAAP) | ​ | $ | 386,738 | ​ | $ | 383,699 | ​ | $ | 366,536 | ​ | $ | 360,259 | ​ | $ | 352,738 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Average Tangible Common Equity: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​
Average shareholders' equity (GAAP) | ​ | $ | 489,172 | ​ | $ | 478,642 | ​ | $ | 466,371 | ​ | $ | 461,148 | ​ | $ | 449,526 | ​
Less average goodwill and other intangible assets | ​ |  | 105,093 | ​ |  | 105,701 | ​ |  | 106,301 | ​ |  | 106,920 | ​ |  | 107,551 | ​
Average tangible common equity (Non-GAAP) | ​ | $ | 384,079 | ​ | $ | 372,941 | ​ | $ | 360,070 | ​ | $ | 354,228 | ​ | $ | 341,975 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tangible Book Value per Common Share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Book value per common share (GAAP) | ​ | $ | 29.04 | ​ | $ | 28.89 | ​ | $ | 27.91 | ​ | $ | 27.37 | ​ | $ | 27.07 | ​
Adjustment due to goodwill and other intangible assets | ​ | ​ | (6.19) | ​ | ​ | (6.22) | ​ | ​ | (6.25) | ​ | ​ | (6.25) | ​ | ​ | (6.31) | ​
Tangible book value per common share (Non-GAAP)1 | ​ | $ | 22.85 | ​ | $ | 22.67 | ​ | $ | 21.66 | ​ | $ | 21.12 | ​ | $ | 20.76 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tangible Common Equity to Tangible Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Assets (GAAP) | ​ | $ | 5,275,904 | ​ | $ | 4,908,934 | ​ | $ | 4,891,009 | ​ | $ | 4,954,690 | ​ | $ | 4,829,387 | ​
Less goodwill and other intangibles | ​ | ​ | 104,723 | ​ | ​ | 105,324 | ​ | ​ | 105,929 | ​ | ​ | 106,537 | ​ | ​ | 107,148 | ​
Tangible Assets (Non-GAAP) | ​ | $ | 5,171,181 | ​ | $ | 4,803,610 | ​ | $ | 4,785,080 | ​ | $ | 4,848,153 | ​ | $ | 4,722,239 | ​
Tangible common equity to tangible assets (Non-GAAP) | ​ | ​ | 7.48% | ​ | ​ | 7.99% | ​ | ​ | 7.66% | ​ | ​ | 7.43% | ​ | ​ | 7.47% | ​

​

​

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

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14