Highlights for the Fourth Quarter of 2022
- Operating earnings1 of $12.9 million, or $0.76 per diluted common share
- Operating earnings1 increase of 11% compared to the previous quarter and 48% compared to the same prior year quarter
- Net organic loan and lease growth of over $130.2 million - 17% annualized quarter-over-quarter increase
- Net interest income growth of $904 thousand or 10% annualized quarter-over-quarter increase
- Credit quality remains solid with nonperforming assets to total assets of 0.10%
KNOXVILLE, Tenn., Jan. 23, 2023 (GLOBE NEWSWIRE) -- SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NASDAQ: SMBK), today announced net income of $13.0 million, or $0.77 per diluted common share, for the fourth quarter of 2022, compared to net income of $6.7 million, or $0.40 per diluted common share, for the fourth quarter of 2021, and compared to prior quarter net income of $11.5 million, or $0.68 per diluted common share. Operating earnings1, which excludes securities gains and merger related and restructuring expenses, net of tax adjustments, totaled $12.9 million, or $0.76 per diluted common share, in the fourth quarter of 2022, compared to $8.7 million, or $0.52 per diluted common share, in the fourth quarter of 2021, and compared to $11.6 million, or $0.69 per diluted common share, in the third quarter of 2022.
Billy Carroll, President & CEO, stated: "I am extremely pleased with our company's results for the quarter and for the year. We wrapped-up 2022 with another record revenue quarter while continuing to gain operating leverage and build on the great work being done to diversify revenue, build out our ancillary lines of business, and maintain outstanding credit metrics. The core momentum our team is building is outstanding and will position us well as we enter 2023."
SmartFinancial's Chairman, Miller Welborn, concluded: "We are very proud of our strong quarter and how we finished 2022. The team did a phenomenal job in all areas. The bank continues to show excellent credit, solid growth and strong profits. We couldn't be more excited about how we are positioned to enter 2023."
Net Interest Income and Net Interest Margin
Net interest income was $37.6 million for the fourth quarter of 2022, compared to $36.7 million for the prior quarter. Average earning assets totaled $4.27 billion, a decrease of $177.5 million. The decrease in average earnings assets was primarily driven by a decrease in average interest-earning cash of $264.8 million and average securities of $26.2 million. Partially offsetting the decrease in average earning assets was an increase in average loans and leases of $113.4 million. Average interest-bearing liabilities decreased $123.7 million attributable to a decrease in deposits of $128.9 million, offset by increased borrowings of $5.2 million.
The tax equivalent net interest margin was 3.51% for the fourth quarter of 2022, compared to 3.29% for the prior quarter. The tax equivalent net interest margin was positively impacted by the continued deployment of excess cash and cash equivalents into loans and leases and higher yields on cash deposits held in Federal Reserve System (the "Federal Reserve"). Additionally, the yield on interest-earning assets was positively impacted due to an increase quarter-over-quarter in loan discount accretion of $1.2 million.
The cost of interest-bearing liabilities increased to 1.27% for the fourth quarter of 2022 compared to 0.70% for the prior quarter. The cost of average interest-bearing deposits was 1.18% for the fourth quarter of 2022 compared to 0.62% for the prior quarter, an increase of 56 basis points, primarily attributable to both the impact of rising Federal Reserve rates and increased pricing competition. The cost of total deposits for the fourth quarter of 2022 was 0.85% compared to 0.45% in the prior quarter.
1 Non-GAAP measure. See "Non-GAAP Financial Measures" for more information and see the Non-GAAP reconciliation
The following table presents selected interest rates and yields for the periods indicated:
| Three Months Ended | |||||||
| Dec | Sep | Increase | |||||
| Selected Interest Rates and Yields | 2022 | 2022 | (Decrease) | ||||
| Yield on loans and leases | 5.05 | % | 4.59 | % | 0.46 | % | |
| Yield on earning assets, FTE | 4.41 | % | 3.79 | % | 0.62 | % | |
| Cost of interest-bearing deposits | 1.18 | % | 0.62 | % | 0.56 | % | |
| Cost of total deposits | 0.85 | % | 0.45 | % | 0.40 | % | |
| Cost of interest-bearing liabilities | 1.27 | % | 0.70 | % | 0.57 | % | |
| Net interest margin, FTE | 3.51 | % | 3.29 | % | 0.22 | % | |
Provision for Loan and Lease Losses and Credit Quality
At December 31, 2022, the allowance for loan and lease losses was $23.3 million. The allowance for loan and lease losses to total loans and leases was 0.72% as of December 31, 2022, compared to 0.73% as of September 30, 2022. For the Company's originated loans and leases, the allowance for loan and lease losses to originated loans and leases, less PPP loans, was 0.73% as of December 31, 2022, and 0.75% at September 30, 2022. The remaining discounts on the acquired loan and lease portfolio totaled $13.1 million, or 4.41% of acquired loans and leases as of December 31, 2022.
The following table presents detailed information related to the provision for loan and lease losses for the periods indicated (dollars in thousands):
| Three Months Ended | ||||||||||||||
| Dec | Sep | |||||||||||||
| Provision for Loan and Lease Losses Rollforward | 2022 | 2022 | Change | |||||||||||
| Beginning balance | $ | 22,769 | $ | 21,938 | $ | 831 | ||||||||
| Charge-offs | (331 | ) | (231 | ) | (100 | ) | ||||||||
| Recoveries | 108 | 88 | 20 | |||||||||||
| Net charge-offs | (223 | ) | (143 | ) | (80 | ) | ||||||||
| Provision | 788 | 974 | (186 | ) | ||||||||||
| Ending balance | $ | 23,334 | $ | 22,769 | $ | 565 | ||||||||
| Allowance for loan losses to total loans and leases, gross | 0.72 | % | 0.73 | % | (0.01 | ) | % | |||||||
Nonperforming loans and leases as a percentage of total loans and leases was 0.09% as of December 31, 2022, a decrease of 2 basis points from the 0.11% reported in the third quarter of 2022. 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 0.10% as of December 31, 2022, and September 30, 2022, respectively
The following table presents detailed information related to credit quality for the periods indicated (dollars in thousands):
| Three Months Ended | ||||||||||||
| Dec | Sep | Increase | ||||||||||
| Credit Quality | 2022 | 2022 | (Decrease) | |||||||||
| Nonaccrual loans and leases | $ | 2,808 | $ | 3,379 | $ | (571 | ) | |||||
| Loans and leases past due 90 days or more and still accruing | 142 | - | 142 | |||||||||
| Total nonperforming loans and leases | 2,950 | 3,379 | (429 | ) | ||||||||
| Other real estate owned | 1,436 | 1,226 | 210 | |||||||||
| Other repossessed assets | 422 | - | 422 | |||||||||
| Total nonperforming assets | $ | 4,808 | $ | 4,605 | $ | 203 | ||||||
| Nonperforming loans and leases to total loans and leases, gross | 0.09 | % | 0.11 | % | (0.02 | ) | % | |||||
| Nonperforming assets to total assets | 0.10 | % | 0.10 | % | - | % | ||||||
Noninterest Income
Noninterest income increased $875 thousand to $7.1 million for the fourth quarter of 2022 compared to $6.3 million for the prior quarter. During the fourth quarter of 2022, the primary components of the changes in noninterest income were as follows:
- Decrease in service charges on deposit accounts, related to lower volume of transaction fees;
- Net gain on sale of securities and dissolution of associated derivative instrument;
- Increase in insurance commissions, driven by the addition of Sunbelt Group, LLC ("Sunbelt") and organic growth; and
- Increase in other, primarily related to increased fees from capital markets activity.
The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands):
| Three Months Ended | ||||||||||
| Dec | Sep | Increase | ||||||||
| Noninterest Income | 2022 | 2022 | (Decrease) | |||||||
| Service charges on deposit accounts | $ | 1,477 | $ | 1,611 | $ | (134 | ) | |||
| Gain (loss) on sale of securities, net | 144 | - | 144 | |||||||
| Mortgage banking income | 77 | 170 | (93 | ) | ||||||
| Investment services | 958 | 1,051 | (93 | ) | ||||||
| Insurance commissions | 1,233 | 864 | 369 | |||||||
| Interchange and debit card transaction fees | 1,328 | 1,356 | (28 | ) | ||||||
| Other | 1,908 | 1,198 | 710 | |||||||
| Total noninterest income | $ | 7,125 | $ | 6,250 | $ | 875 | ||||
Noninterest Expense
Noninterest expense increased $186 thousand to $27.4 million for the fourth quarter of 2022 compared to $27.2 million for the prior quarter. During the fourth quarter of 2022, the primary components of the changes in noninterest expense were as follows:
- Decrease in occupancy and equipment as a result of lower utility expenses (seasonality);
- Increase in data processing and technology as a result of enhancements to core systems; and
- Increase in professional services, related to higher audit expenses.
The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):
| Three Months Ended | |||||||||||
| Dec | Sep | Increase | |||||||||
| Noninterest Expense | 2022 | 2022 | (Decrease) | ||||||||
| Salaries and employee benefits | $ | 16,384 | $ | 16,317 | $ | 67 | |||||
| Occupancy and equipment | 3,015 | 3,167 | (152 | ) | |||||||
| FDIC insurance | 650 | 705 | (55 | ) | |||||||
| Other real estate and loan related expenses | 517 | 565 | (48 | ) | |||||||
| Advertising and marketing | 308 | 288 | 20 | ||||||||
| Data processing and technology | 2,097 | 1,872 | 225 | ||||||||
| Professional services | 981 | 822 | 159 | ||||||||
| Amortization of intangibles | 688 | 650 | 38 | ||||||||
| Merger related and restructuring expenses | (45 | ) | 87 | (132 | ) | ||||||
| Other | 2,821 | 2,757 | 64 | ||||||||
| Total noninterest expense | $ | 27,416 | $ | 27,230 | $ | 186 | |||||
Income Tax Expense
Income tax expense was $3.5 million for the fourth quarter of 2022, an increase of $318 thousand, compared to $3.2 million for the prior quarter.
The effective tax rate was 21.35% for the fourth quarter of 2022 and 21.76% for the prior quarter.
Balance Sheet Trends
Total assets were $4.61 billion at December 31, 2022 and 2021, respectively. Total assets remained unchanged period-over-period; however, the bank experienced a shift in its asset mix during the fourth quarter 2022. The Company had increases primarily in the following categories: loans and leases, net of $531.7 million, securities of $210.4 million, premises and equipment of $6.6 million, goodwill and other intangibles, net of $3.9 million, attributable to Sunbelt purchase and other assets of $30.2 million. These increases were offset by a decrease in cash and cash equivalents of $778.7 million, primarily from the funding of loans and leases and purchase of securities.
Total liabilities were $4.18 billion for the periods ended December 31, 2022 and 2021, respectively. Total liabilities remained unchanged period-over-period; however, the bank experienced organic deposit growth of $55.2 million and a decrease in borrowings of $70.3 million.
Shareholders' equity at December 31, 2022 totaled $432.5 million, an increase of $3.0 million, from December 31, 2021. The increase in shareholders' equity was primarily driven by net income of $43.0 million for the year ended December 31, 2022, offset by the negative impact on accumulated other comprehensive income (loss) of $36.8 million and dividends paid of $4.7 million. Tangible book value per share2 was $19.09 at December 31, 2022, compared to $19.26 at December 31, 2021. Tangible common equity1 as a percentage of tangible assets1 was 7.17% at December 31, 2022, compared with 7.18% at December 31, 2021.
1 Non-GAAP measure. See "Non-GAAP Financial Measures" for more information and see the Non-GAAP reconciliation
The following table presents selected balance sheet information for the periods indicated (dollars in thousands):
| Dec | Dec | Increase | |||||||||
| Selected Balance Sheet Information | 2022 | 2021 | (Decrease) | ||||||||
| Total assets | $ | 4,612,913 | $ | 4,611,579 | $ | 1,334 | |||||
| Total liabilities | 4,180,461 | 4,182,149 | (1,688 | ) | |||||||
| Total equity | 432,452 | 429,430 | 3,022 | ||||||||
| Securities | 769,842 | 559,422 | 210,420 | ||||||||
| Loans and leases | 3,229,042 | 2,693,397 | 535,645 | ||||||||
| Deposits | 4,077,100 | 4,021,938 | 55,162 | ||||||||
| Borrowings | 17,275 | 87,585 | (70,310 | ) | |||||||
Conference Call Information
SmartFinancial issued this earnings release for the fourth quarter of 2022 on Monday, January 23, 2023, and will host a conference call on Tuesday, January 24, 2023, at 10:00 a.m. ET. To access this interactive teleconference, dial (844) 200-6205 or (646) 904-5544 and entering the access code, 179408. A replay of the conference call will be available through March 25, 2023, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 675735. 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 the Florida Panhandle. Recruiting the best people, delivering exceptional client service, strategic branching, and a disciplined approach to lending have contributed to SmartBank's success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.
| 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 |
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 and should be read along with the accompanying tables, which provide a reconciliation of Non-GAAP financial measures to GAAP financial measures. SmartFinancial management uses several Non-GAAP financial measures, including: (i) operating earnings, (ii) operating return on average assets, (iii) operating pre-tax pre-provision return on average assets, (iv) operating return on average shareholders' equity, (v) return on average tangible common equity, (vi) operating return on average tangible common equity, (vii) operating efficiency ratio, (viii) operating noninterest income, (ix) operating pre-tax pre-provision earnings (x) operating noninterest expense, (xi) tangible common equity, (xii) average tangible common equity, (xiii) tangible book value; (xiv) tangible assets; and ratios derived therefrom, in its analysis of the company's performance. Operating earnings excludes the following from net income: securities gains and losses and merger related and restructuring expenses. Operating return on average assets is the annualized operating earnings (Non-GAAP) divided by average assets. Operating pre-tax pre-provision return on average assets is the annualized operating pre-tax pre-provision income earnings (Non-GAAP) by average assets. Operating return on average shareholders' equity is the annualized operating earnings (Non-GAAP) divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity (Non-GAAP). Operating return on average tangible common equity is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP). The operating efficiency ratio includes an adjustment for taxable equivalent yields and excludes securities gains and losses and merger related and restructuring expenses from the efficiency ratio. Operating noninterest income excludes the following from noninterest income: securities gains and losses. Operating pre-tax pre-provision earnings is net interest income plus operating noninterest income (Non-GAAP) less operating noninterest expense (Non-GAAP). Operating noninterest expense excludes the following from noninterest expense: prior year adjustments to salaries, merger related and restructuring expenses and certain franchise tax true-up expenses. Tangible common equity (Non-GAAP) and average tangible common equity (Non-GAAP) excludes goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively. Tangible book value (Non-GAAP) is tangible common equity (Non-GAAP) divided by common shares outstanding. Tangible assets (Non-GAAP) excludes goodwill and other intangibles from total assets. Management believes that Non-GAAP financial measures provide additional useful information that allows investors to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. Management believes these Non-GAAP financial measures also enhance investors' ability to compare period-to-period financial results and allow investors and company management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider SmartFinancial's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
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, including statements regarding the effects of the COVID-19 pandemic and related variants on the Company's business and financial results and conditions, are not historical in nature and can generally be identified by such words as "expect," "anticipate," "intend," "plan," "believe," "seek," "may," "estimate," and similar expressions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results of SmartFinancial to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others, (1) risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively; (2) claims and litigation arising from our business activities and from the companies we acquire, which may relate to contractual issues, environmental laws, fiduciary responsibility, and other matters; (3) the risk that cost savings and revenue synergies from recently completed acquisitions may not be realized or may take longer than anticipated to realize; (4) disruption from recently completed acquisitions with customer, supplier, employee, or other business relationships; (5) our ability to successfully integrate the businesses acquired as part of previous acquisitions with the business of SmartBank; (6) 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) a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; (9) credit risk associated with our lending activities; (10) changes in loan demand, real estate values, or competition; (11) developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; (12) changes in accounting principles, policies, or guidelines; (13) changes in applicable laws, rules, or regulations; (14) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic and related variants; (15) the impact of the COVID-19 pandemic and related variants on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (16) 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; (17) the effects of war or other conflicts including the impacts related to or resulting from Russia's military action in Ukraine; and (18) 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.
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands)
| Ending Balances | ||||||||||||||||||||
| Dec | Sep | Jun | Mar | Dec | ||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||||||||
| Assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 266,424 | $ | 543,029 | $ | 654,945 | $ | 763,968 | $ | 1,045,077 | ||||||||||
| Securities available-for-sale, at fair value | 483,893 | 519,723 | 524,864 | 540,483 | 482,453 | |||||||||||||||
| Securities held-to-maturity, at amortized cost | 285,949 | 287,104 | 288,363 | 289,532 | 76,969 | |||||||||||||||
| Other investments | 15,530 | 15,528 | 16,569 | 16,499 | 16,494 | |||||||||||||||
| Loans held for sale | 1,752 | 2,742 | 1,707 | 5,894 | 5,103 | |||||||||||||||
| Loans and leases | 3,229,042 | 3,099,116 | 2,994,074 | 2,806,026 | 2,693,397 | |||||||||||||||
| Less: Allowance for loan and lease losses | (23,334 | ) | (22,769 | ) | (21,938 | ) | (20,078 | ) | (19,352 | ) | ||||||||||
| Loans and leases, net | 3,205,708 | 3,076,347 | 2,972,136 | 2,785,948 | 2,674,045 | |||||||||||||||
| Premises and equipment, net | 92,511 | 91,944 | 89,950 | 84,793 | 85,958 | |||||||||||||||
| Other real estate owned | 1,436 | 1,226 | 1,612 | 1,612 | 1,780 | |||||||||||||||
| Goodwill and other intangibles, net | 109,772 | 110,460 | 104,582 | 105,215 | 105,852 | |||||||||||||||
| Bank owned life insurance | 81,470 | 81,001 | 80,537 | 80,074 | 79,619 | |||||||||||||||
| Other assets | 68,468 | 67,807 | 52,848 | 44,561 | 38,229 | |||||||||||||||
| Total assets | $ | 4,612,913 | $ | 4,796,911 | $ | 4,788,113 | $ | 4,718,579 | $ | 4,611,579 | ||||||||||
| Liabilities: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 1,072,449 | $ | 1,186,209 | $ | 1,162,843 | $ | 1,093,933 | $ | 1,055,125 | ||||||||||
| Interest-bearing demand | 965,911 | 962,901 | 999,893 | 975,272 | 899,158 | |||||||||||||||
| Money market and savings | 1,583,481 | 1,663,355 | 1,607,714 | 1,573,101 | 1,493,007 | |||||||||||||||
| Time deposits | 455,259 | 467,944 | 511,182 | 549,047 | 574,648 | |||||||||||||||
| Total deposits | 4,077,100 | 4,280,409 | 4,281,632 | 4,191,353 | 4,021,938 | |||||||||||||||
| Borrowings | 17,275 | 18,423 | 12,549 | 36,713 | 87,585 | |||||||||||||||
| Subordinated debt | 42,015 | 41,994 | 41,973 | 41,952 | 41,930 | |||||||||||||||
| Other liabilities | 44,071 | 41,374 | 31,532 | 28,519 | 30,696 | |||||||||||||||
| Total liabilities | 4,180,461 | 4,382,200 | 4,367,686 | 4,298,537 | 4,182,149 | |||||||||||||||
| Shareholders' Equity: | ||||||||||||||||||||
| Common stock | 16,901 | 16,888 | 16,898 | 16,893 | 16,803 | |||||||||||||||
| Additional paid-in capital | 294,330 | 293,907 | 293,815 | 293,376 | 292,937 | |||||||||||||||
| Retained earnings | 156,545 | 144,723 | 134,362 | 125,329 | 118,247 | |||||||||||||||
| Accumulated other comprehensive income (loss) | (35,324 | ) | (40,807 | ) | (24,648 | ) | (15,556 | ) | 1,443 | |||||||||||
| Total shareholders' equity | 432,452 | 414,711 | 420,427 | 420,042 | 429,430 | |||||||||||||||
| Total liabilities & shareholders' equity | $ | 4,612,913 | $ | 4,796,911 | $ | 4,788,113 | $ | 4,718,579 | $ | 4,611,579 | ||||||||||
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands except share and per share data)
| Three Months Ended | Year Ended | ||||||||||||||||||||
| Dec | Sep | June | Mar | Dec | Dec | Dec | |||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Interest income: | |||||||||||||||||||||
| Loans and leases, including fees | $ | 40,082 | $ | 35,127 | $ | 31,530 | $ | 29,643 | $ | 30,567 | $ | 136,381 | $ | 118,582 | |||||||
| Investment securities: | |||||||||||||||||||||
| Taxable | 3,337 | 3,135 | 2,908 | 2,418 | 1,341 | 11,799 | 3,813 | ||||||||||||||
| Tax-exempt | 797 | 561 | 441 | 368 | 322 | 2,166 | 1,215 | ||||||||||||||
| Federal funds sold and other earning assets | 3,098 | 3,474 | 1,430 | 486 | 547 | 8,488 | 1,622 | ||||||||||||||
| Total interest income | 47,314 | 42,297 | 36,309 | 32,915 | 32,777 | 158,834 | 125,232 | ||||||||||||||
| Interest expense: | |||||||||||||||||||||
| Deposits | 8,844 | 4,866 | 2,504 | 2,014 | 2,116 | 18,228 | 8,849 | ||||||||||||||
| Borrowings | 232 | 97 | 117 | 157 | 180 | 602 | 540 | ||||||||||||||
| Subordinated debt | 626 | 626 | 626 | 626 | 626 | 2,503 | 2,449 | ||||||||||||||
| Total interest expense | 9,702 | 5,589 | 3,247 | 2,797 | 2,922 | 21,333 | 11,838 | ||||||||||||||
| Net interest income | 37,612 | 36,708 | 33,062 | 30,118 | 29,855 | 137,501 | 113,394 | ||||||||||||||
| Provision for loan and lease losses | 788 | 974 | 1,250 | 1,006 | 422 | 4,018 | 1,633 | ||||||||||||||
| Net interest income after provision for loan and lease losses | 36,824 | 35,734 | 31,812 | 29,112 | 29,433 | 133,483 | 111,761 | ||||||||||||||
| Noninterest income: | |||||||||||||||||||||
| Service charges on deposit accounts | 1,477 | 1,611 | 1,446 | 1,319 | 1,372 | 5,853 | 4,650 | ||||||||||||||
| Gain (loss) on sale of securities, net | 144 | - | - | - | - | 144 | 45 | ||||||||||||||
| Mortgage banking | 77 | 170 | 471 | 834 | 803 | 1,552 | 4,040 | ||||||||||||||
| Investment services | 958 | 1,051 | 1,065 | 1,070 | 621 | 4,144 | 2,167 | ||||||||||||||
| Insurance commissions | 1,233 | 864 | 598 | 901 | 517 | 3,595 | 3,285 | ||||||||||||||
| Interchange and debit card transaction fees | 1,328 | 1,356 | 1,467 | 1,284 | 1,445 | 5,435 | 4,284 | ||||||||||||||
| Other | 1,908 | 1,198 | 2,182 | 1,703 | 2,048 | 6,992 | 5,478 | ||||||||||||||
| Total noninterest income | 7,125 | 6,250 | 7,229 | 7,111 | 6,806 | 27,715 | 23,949 | ||||||||||||||
| Noninterest expense: | |||||||||||||||||||||
| Salaries and employee benefits | 16,384 | 16,317 | 15,673 | 15,046 | 14,990 | 63,420 | 51,656 | ||||||||||||||
| Occupancy and equipment | 3,015 | 3,167 | 2,793 | 3,059 | 3,026 | 12,034 | 10,196 | ||||||||||||||
| FDIC insurance | 650 | 705 | 676 | 641 | 567 | 2,672 | 1,833 | ||||||||||||||
| Other real estate and loan related expense | 517 | 565 | 636 | 729 | 583 | 2,446 | 2,098 | ||||||||||||||
| Advertising and marketing | 308 | 288 | 327 | 369 | 176 | 1,293 | 830 | ||||||||||||||
| Data processing and technology | 2,097 | 1,872 | 1,728 | 1,586 | 1,722 | 7,283 | 6,364 | ||||||||||||||
| Professional services | 981 | 822 | 745 | 1,242 | 847 | 3,790 | 3,147 | ||||||||||||||
| Amortization of intangibles | 688 | 650 | 633 | 637 | 660 | 2,607 | 2,256 | ||||||||||||||
| Merger related and restructuring expenses | (45 | ) | 87 | 81 | 439 | 2,762 | 562 | 3,701 | |||||||||||||
| Other | 2,821 | 2,757 | 2,634 | 1,970 | 2,490 | 10,183 | 9,310 | ||||||||||||||
| Total noninterest expense | 27,416 | 27,230 | 25,926 | 25,718 | 27,823 | 106,290 | 91,391 | ||||||||||||||
| Income before income taxes | 16,533 | 14,754 | 13,115 | 10,505 | 8,416 | 54,908 | 44,319 | ||||||||||||||
| Income tax expense | 3,529 | 3,211 | 2,900 | 2,246 | 1,761 | 11,886 | 9,529 | ||||||||||||||
| Net income | $ | 13,004 | $ | 11,543 | $ | 10,215 | $ | 8,259 | $ | 6,655 | $ | 43,022 | $ | 34,790 | |||||||
| Earnings per common share: | |||||||||||||||||||||
| Basic | $ | 0.78 | $ | 0.69 | $ | 0.61 | $ | 0.49 | $ | 0.40 | $ | 2.57 | $ | 2.23 | |||||||
| Diluted | $ | 0.77 | $ | 0.68 | $ | 0.61 | $ | 0.49 | $ | 0.40 | $ | 2.55 | $ | 2.22 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||
| Basic | 16,758,706 | 16,749,255 | 16,734,930 | 16,718,371 | 16,699,010 | 16,740,450 | 15,572,537 | ||||||||||||||
| Diluted | 16,884,253 | 16,872,022 | 16,867,774 | 16,858,288 | 16,846,315 | 16,871,369 | 15,699,215 | ||||||||||||||
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands)
YIELD ANALYSIS
| Three Months Ended | |||||||||||||||||||||||||
| December 31, 2022 | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||||||
| Balance | Interest | Cost | Balance | Interest | Cost | Balance | Interest | Cost | |||||||||||||||||
| Assets: | |||||||||||||||||||||||||
| Loans and leases, including fees1 | $ | 3,150,493 | $ | 40,082 | 5.05 | % | $ | 3,037,092 | $ | 35,127 | 4.59 | % | $ | 2,675,059 | $ | 30,567 | 4.53 | % | |||||||
| Taxable securities | 701,787 | 3,337 | 1.89 | % | 720,114 | 3,135 | 1.73 | % | 339,371 | 1,341 | 1.57 | % | |||||||||||||
| Tax-exempt securities2 | 93,721 | 958 | 4.06 | % | 101,559 | 732 | 2.86 | % | 102,989 | 479 | 1.85 | % | |||||||||||||
| Federal funds sold and other earning assets | 322,970 | 3,098 | 3.81 | % | 587,755 | 3,474 | 2.34 | % | 965,899 | 547 | 0.22 | % | |||||||||||||
| Total interest-earning assets | 4,268,971 | 47,475 | 4.41 | % | 4,446,520 | 42,468 | 3.79 | % | 4,083,318 | 32,934 | 3.20 | % | |||||||||||||
| Noninterest-earning assets | 372,864 | 362,869 | 383,783 | ||||||||||||||||||||||
| Total assets | $ | 4,641,835 | $ | 4,809,389 | $ | 4,467,101 | |||||||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 924,320 | 3,141 | 1.35 | % | $ | 966,437 | 1,956 | 0.80 | % | $ | 853,763 | 403 | 0.19 | % | ||||||||||
| Money market and savings deposits | 1,587,688 | 4,855 | 1.21 | % | 1,632,510 | 2,298 | 0.56 | % | 1,428,472 | 920 | 0.26 | % | |||||||||||||
| Time deposits | 459,996 | 848 | 0.73 | % | 501,919 | 612 | 0.48 | % | 583,165 | 793 | 0.54 | % | |||||||||||||
| Total interest-bearing deposits | 2,972,004 | 8,844 | 1.18 | % | 3,100,866 | 4,866 | 0.62 | % | 2,865,400 | 2,116 | 0.29 | % | |||||||||||||
| Borrowings | 18,309 | 232 | 5.03 | % | 13,141 | 97 | 2.93 | % | 88,828 | 180 | 0.80 | % | |||||||||||||
| Subordinated debt | 42,002 | 626 | 5.91 | % | 41,980 | 626 | 5.91 | % | 41,917 | 626 | 5.92 | % | |||||||||||||
| Total interest-bearing liabilities | 3,032,315 | 9,702 | 1.27 | % | 3,155,987 | 5,589 | 0.70 | % | 2,996,145 | 2,922 | 0.39 | % | |||||||||||||
| Noninterest-bearing deposits | 1,146,374 | 1,192,813 | 1,016,438 | ||||||||||||||||||||||
| Other liabilities | 43,109 | 35,224 | 27,710 | ||||||||||||||||||||||
| Total liabilities | 4,221,798 | 4,384,024 | 4,040,293 | ||||||||||||||||||||||
| Shareholders' equity | 420,037 | 425,365 | 426,808 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,641,835 | $ | 4,809,389 | $ | 4,467,101 | |||||||||||||||||||
| Net interest income, taxable equivalent | $ | 37,773 | $ | 36,879 | $ | 30,012 | |||||||||||||||||||
| Interest rate spread | 3.14 | % | 3.09 | % | 2.81 | % | |||||||||||||||||||
| Tax equivalent net interest margin | 3.51 | % | 3.29 | % | 2.92 | % | |||||||||||||||||||
| Percentage of average interest-earning assets to average interest-bearing liabilities | 140.78 | % | 140.89 | % | 136.29 | % | |||||||||||||||||||
| Percentage of average equity to average assets | 9.05 | % | 8.84 | % | 9.55 | % | |||||||||||||||||||
1 Includes average balance of $3.3 million, $4.8 million, and $80.5 million in PPP loans for the quarters ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively.
2 Yields computed on tax-exempt instruments on a tax equivalent basis include $161 thousand, $171 thousand and $156 thousand of taxable equivalent income for the quarters ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands)
YIELD ANALYSIS
| Year Ended | ||||||||||||||||||
| December 31, 2022 | December 31, 2021 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||
| Balance | Interest | Cost | Balance | Interest | Cost | |||||||||||||
| Assets: | ||||||||||||||||||
| Loans and leases, including fees1 | $ | 2,948,511 | $ | 136,381 | 4.63 | % | $ | 2,540,577 | $ | 118,582 | 4.67 | % | ||||||
| Taxable securities | 688,428 | 11,799 | 1.71 | % | 207,459 | 3,813 | 1.84 | % | ||||||||||
| Tax-exempt securities2 | 100,566 | 2,831 | 2.82 | % | 92,708 | 1,817 | 1.96 | % | ||||||||||
| Federal funds sold and other earning assets | 577,593 | 8,488 | 1.47 | % | 680,909 | 1,622 | 0.24 | % | ||||||||||
| Total interest-earning assets | 4,315,098 | 159,499 | 3.70 | % | 3,521,653 | 125,834 | 3.57 | % | ||||||||||
| Noninterest-earning assets | 373,026 | 317,457 | ||||||||||||||||
| Total assets | $ | 4,688,124 | $ | 3,839,110 | ||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||
| Interest-bearing demand deposits | $ | 945,414 | 6,278 | 0.66 | % | $ | 737,251 | 1,378 | 0.19 | % | ||||||||
| Money market and savings deposits | 1,576,170 | 9,137 | 0.58 | % | 1,191,916 | 3,501 | 0.29 | % | ||||||||||
| Time deposits | 513,416 | 2,813 | 0.55 | % | 533,994 | 3,970 | 0.74 | % | ||||||||||
| Total interest-bearing deposits | 3,035,000 | 18,228 | 0.60 | % | 2,463,161 | 8,849 | 0.36 | % | ||||||||||
| Borrowings | 32,986 | 602 | 1.83 | % | 83,105 | 540 | 0.65 | % | ||||||||||
| Subordinated debt | 41,970 | 2,503 | 5.96 | % | 40,221 | 2,449 | 6.09 | % | ||||||||||
| Total interest-bearing liabilities | 3,109,956 | 21,333 | 0.69 | % | 2,586,487 | 11,838 | 0.46 | % | ||||||||||
| Noninterest-bearing deposits | 1,120,555 | 841,746 | ||||||||||||||||
| Other liabilities | 34,361 | 23,189 | ||||||||||||||||
| Total liabilities | 4,264,872 | 3,451,422 | ||||||||||||||||
| Shareholders' equity | 423,252 | 387,688 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,688,124 | $ | 3,839,110 | ||||||||||||||
| Net interest income, taxable equivalent | $ | 138,166 | $ | 113,996 | ||||||||||||||
| Interest rate spread | 3.01 | % | 3.12 | % | ||||||||||||||
| Tax equivalent net interest margin | 3.20 | % | 3.24 | % | ||||||||||||||
| Percentage of average interest-earning assets to average interest-bearing liabilities | 138.75 | % | 136.16 | % | ||||||||||||||
| Percentage of average equity to average assets | 9.03 | % | 10.10 | % | ||||||||||||||
1 Includes average balance of $14.1 million and $196.1 million in PPP loans for the year ended December 31, 2022, and 2021, respectively.
2 Yields computed on tax-exempt instruments on a tax equivalent basis include $665 thousand and $602 thousand of taxable equivalent income for the year ended December 31, 2022, and 2021, respectively.
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands)
| As of and for The Three Months Ended | |||||||||||||||||
| Dec | Sep | Jun | Mar | Dec | |||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||
| Composition of Loans and Leases: | |||||||||||||||||
| Commercial real estate: | |||||||||||||||||
| owner occupied | $ | 759,456 | $ | 714,734 | $ | 684,250 | $ | 612,675 | $ | 590,064 | |||||||
| non-owner occupied | 843,720 | 822,317 | 850,338 | 863,181 | 794,092 | ||||||||||||
| Commercial real estate, total | 1,603,176 | 1,537,051 | 1,534,588 | 1,475,856 | 1,384,156 | ||||||||||||
| Commercial & industrial | 551,867 | 514,280 | 483,588 | 461,153 | 488,024 | ||||||||||||
| Construction & land development | 402,501 | 405,007 | 364,368 | 314,654 | 278,386 | ||||||||||||
| Consumer real estate | 587,977 | 562,408 | 533,582 | 483,229 | 477,272 | ||||||||||||
| Leases | 67,427 | 64,798 | 63,264 | 59,892 | 53,708 | ||||||||||||
| Consumer and other | 16,094 | 15,572 | 14,684 | 11,242 | 11,851 | ||||||||||||
| Total loans and leases | $ | 3,229,042 | $ | 3,099,116 | $ | 2,994,074 | $ | 2,806,026 | $ | 2,693,397 | |||||||
| Asset Quality and Additional Loan Data: | |||||||||||||||||
| Nonperforming loans and leases | $ | 2,950 | $ | 3,379 | $ | 3,413 | $ | 3,342 | $ | 3,188 | |||||||
| Other real estate owned | 1,436 | 1,226 | 1,612 | 1,612 | 1,780 | ||||||||||||
| Other repossessed assets | 422 | - | 17 | 27 | 90 | ||||||||||||
| Total nonperforming assets | $ | 4,808 | $ | 4,605 | $ | 5,042 | $ | 4,981 | $ | 5,058 | |||||||
| Restructured loans and leases not included in nonperforming loans and leases | $ | 101 | $ | 108 | $ | 678 | $ | 625 | $ | 206 | |||||||
| Net charge-offs to average loans and leases (annualized) | 0.03 | % | 0.02 | % | (0.09 | ) | % | 0.04 | % | 0.05 | % | ||||||
| Allowance for loan and leases losses to loans and leases | 0.72 | % | 0.73 | % | 0.73 | % | 0.72 | % | 0.72 | % | |||||||
| Nonperforming loans and leases to total loans and leases, gross | 0.09 | % | 0.11 | % | 0.11 | % | 0.12 | % | 0.12 | % | |||||||
| Nonperforming assets to total assets | 0.10 | % | 0.10 | % | 0.11 | % | 0.11 | % | 0.11 | % | |||||||
| Acquired loan and lease fair value discount balance | $ | 13,128 | $ | 14,465 | $ | 14,737 | $ | 14,913 | $ | 15,483 | |||||||
| Accretion income on acquired loans and leases | 1,396 | 148 | 225 | 389 | 457 | ||||||||||||
| PPP net fees deferred balance | 122 | 140 | 301 | 972 | 2,038 | ||||||||||||
| PPP net fees recognized | 17 | 163 | 669 | 1,066 | 1,725 | ||||||||||||
| Capital Ratios: | |||||||||||||||||
| Equity to Assets | 9.37 | % | 8.65 | % | 8.78 | % | 8.90 | % | 9.31 | % | |||||||
| Tangible common equity to tangible assets (Non-GAAP)1 | 7.17 | % | 6.49 | % | 6.74 | % | 6.82 | % | 7.18 | % | |||||||
| SmartFinancial, Inc.2 | |||||||||||||||||
| Tier 1 leverage | 7.95 | % | 7.40 | % | 7.48 | % | 7.41 | % | 7.45 | % | |||||||
| Common equity Tier 1 | 9.73 | % | 9.65 | % | 9.95 | % | 10.30 | % | 10.56 | % | |||||||
| Tier 1 capital | 9.73 | % | 9.65 | % | 9.95 | % | 10.30 | % | 10.56 | % | |||||||
| Total capital | 11.49 | % | 11.44 | % | 11.80 | % | 12.22 | % | 12.55 | % | |||||||
| SmartBank | Estimated3 | ||||||||||||||||
| Tier 1 leverage | 8.90 | % | 8.27 | % | 8.33 | % | 8.24 | % | 8.23 | % | |||||||
| Common equity Tier 1 | 10.90 | % | 10.78 | % | 11.08 | % | 11.46 | % | 11.66 | % | |||||||
| Tier 1 capital | 10.90 | % | 10.78 | % | 11.08 | % | 11.46 | % | 11.66 | % | |||||||
| Total capital | 11.53 | % | 11.41 | % | 11.72 | % | 12.08 | % | 12.29 | % | |||||||
1Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.
2All periods presented are estimated.
3 Current period capital ratios are estimated as of the date of this earnings release.
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 | ||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Selected Performance Ratios (Annualized): | ||||||||||||||||||||||
| Return on average assets | 1.11 | % | 0.95 | % | 0.87 | % | 0.73 | % | 0.59 | % | 0.92 | % | 0.91 | % | ||||||||
| Return on average shareholders' equity | 12.28 | % | 10.77 | % | 9.76 | % | 7.83 | % | 6.19 | % | 10.16 | % | 8.97 | % | ||||||||
| Return on average tangible common equity¹ | 16.65 | % | 14.36 | % | 13.02 | % | 10.39 | % | 8.18 | % | 13.60 | % | 11.84 | % | ||||||||
| Noninterest income / average assets | 0.61 | % | 0.52 | % | 0.62 | % | 0.63 | % | 0.60 | % | 0.59 | % | 0.62 | % | ||||||||
| Noninterest expense / average assets | 2.34 | % | 2.25 | % | 2.21 | % | 2.27 | % | 2.47 | % | 2.27 | % | 2.38 | % | ||||||||
| Efficiency ratio | 61.28 | % | 63.39 | % | 64.35 | % | 69.08 | % | 75.89 | % | 64.33 | % | 66.54 | % | ||||||||
| Operating Selected Performance Ratios (Annualized): | ||||||||||||||||||||||
| Operating return on average assets1 | 1.10 | % | 0.96 | % | 0.88 | % | 0.76 | % | 0.77 | % | 0.92 | % | 0.98 | % | ||||||||
| Operating PTPP return on average assets1 | 1.46 | % | 1.30 | % | 1.23 | % | 1.05 | % | 1.03 | % | 1.27 | % | 1.29 | % | ||||||||
| Operating return on average shareholders' equity1 | 12.15 | % | 10.83 | % | 9.82 | % | 8.14 | % | 8.09 | % | 10.24 | % | 9.67 | % | ||||||||
| Operating return on average tangible common equity1 | 16.47 | % | 14.44 | % | 13.09 | % | 10.80 | % | 10.70 | % | 13.69 | % | 12.77 | % | ||||||||
| Operating efficiency ratio1 | 61.36 | % | 62.93 | % | 63.88 | % | 67.60 | % | 68.07 | % | 63.79 | % | 63.59 | % | ||||||||
| Operating noninterest income / average assets1 | 0.60 | % | 0.52 | % | 0.62 | % | 0.63 | % | 0.60 | % | 0.59 | % | 0.62 | % | ||||||||
| Operating noninterest expense / average assets1 | 2.35 | % | 2.24 | % | 2.21 | % | 2.23 | % | 2.23 | % | 2.26 | % | 2.28 | % | ||||||||
| Selected Interest Rates and Yields: | ||||||||||||||||||||||
| Yield on loans and leases | 5.05 | % | 4.59 | % | 4.40 | % | 4.41 | % | 4.53 | % | 4.63 | % | 4.67 | % | ||||||||
| Yield on earning assets, FTE | 4.41 | % | 3.79 | % | 3.39 | % | 3.18 | % | 3.20 | % | 3.70 | % | 3.57 | % | ||||||||
| Cost of interest-bearing deposits | 1.18 | % | 0.62 | % | 0.33 | % | 0.27 | % | 0.29 | % | 0.60 | % | 0.36 | % | ||||||||
| Cost of total deposits | 0.85 | % | 0.45 | % | 0.24 | % | 0.20 | % | 0.22 | % | 0.44 | % | 0.27 | % | ||||||||
| Cost of interest-bearing liabilities | 1.27 | % | 0.70 | % | 0.42 | % | 0.36 | % | 0.39 | % | 0.69 | % | 0.46 | % | ||||||||
| Net interest margin, FTE | 3.51 | % | 3.29 | % | 3.08 | % | 2.91 | % | 2.92 | % | 3.20 | % | 3.24 | % | ||||||||
| Per Common Share: | ||||||||||||||||||||||
| Net income, basic | $ | 0.78 | $ | 0.69 | $ | 0.61 | $ | 0.49 | $ | 0.40 | $ | 2.57 | $ | 2.23 | ||||||||
| Net income, diluted | 0.77 | 0.68 | 0.61 | 0.49 | 0.40 | 2.55 | 2.22 | |||||||||||||||
| Operating earnings, basic¹ | 0.77 | 0.69 | 0.61 | 0.51 | 0.52 | 2.59 | 2.41 | |||||||||||||||
| Operating earnings, diluted¹ | 0.76 | 0.69 | 0.61 | 0.51 | 0.52 | 2.57 | 2.39 | |||||||||||||||
| Book value | 25.59 | 24.56 | 24.88 | 24.86 | 25.56 | 25.59 | 25.56 | |||||||||||||||
| Tangible book value¹ | 19.09 | 18.02 | 18.69 | 18.64 | 19.26 | 19.09 | 19.26 | |||||||||||||||
| Common shares outstanding | 16,900,805 | 16,887,555 | 16,898,405 | 16,893,282 | 16,802,990 | 16,900,805 | 16,802,990 | |||||||||||||||
¹Non-GAAP measure. See reconciliation of Non-GAAP measures.
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 | ||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||
| Operating Earnings: | ||||||||||||||||||||||||||||||
| Net income (GAAP) | $ | 13,004 | $ | 11,543 | $ | 10,215 | $ | 8,259 | $ | 6,655 | $ | 43,022 | $ | 34,790 | ||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||||||
| Securities gains (losses), net | (144 | ) | - | - | - | - | (144 | ) | (45 | ) | ||||||||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||||||||||||
| Merger related and restructuring expenses | (45 | ) | 87 | 81 | 439 | 2,762 | 562 | 3,701 | ||||||||||||||||||||||
| Income taxes: | ||||||||||||||||||||||||||||||
| Income tax effect of adjustments | 49 | (22 | ) | (21 | ) | (113 | ) | (713 | ) | (108 | ) | (944 | ) | |||||||||||||||||
| Operating earnings (Non-GAAP) | $ | 12,864 | $ | 11,608 | $ | 10,275 | $ | 8,585 | $ | 8,704 | $ | 43,332 | $ | 37,502 | ||||||||||||||||
| Operating earnings per common share (Non-GAAP): | ||||||||||||||||||||||||||||||
| Basic | $ | 0.77 | $ | 0.69 | $ | 0.61 | $ | 0.51 | $ | 0.52 | $ | 2.59 | $ | 2.41 | ||||||||||||||||
| Diluted | 0.76 | 0.69 | 0.61 | 0.51 | 0.52 | 2.57 | 2.39 | |||||||||||||||||||||||
| Operating Noninterest Income: | ||||||||||||||||||||||||||||||
| Noninterest income (GAAP) | $ | 7,125 | $ | 6,250 | $ | 7,229 | $ | 7,111 | $ | 6,806 | $ | 27,715 | $ | 23,949 | ||||||||||||||||
| Securities gains (losses), net | (144 | ) | - | - | - | - | (144 | ) | (45 | ) | ||||||||||||||||||||
| Operating noninterest income (Non-GAAP) | $ | 6,981 | $ | 6,250 | $ | 7,229 | $ | 7,111 | $ | 6,806 | $ | 27,571 | $ | 23,904 | ||||||||||||||||
| Operating noninterest income (Non-GAAP)/average assets1 | 0.60 | % | 0.52 | % | 0.62 | % | 0.63 | % | 0.60 | % | 0.59 | % | 0.62 | % | ||||||||||||||||
| Operating Noninterest Expense: | ||||||||||||||||||||||||||||||
| Noninterest expense (GAAP) | $ | 27,416 | $ | 27,230 | $ | 25,926 | $ | 25,718 | $ | 27,823 | $ | 106,290 | $ | 91,391 | ||||||||||||||||
| Merger related and restructuring expenses | 45 | (87 | ) | (81 | ) | (439 | ) | (2,762 | ) | (562 | ) | (3,701 | ) | |||||||||||||||||
| Operating noninterest expense (Non-GAAP) | $ | 27,461 | $ | 27,143 | $ | 25,845 | $ | 25,279 | $ | 25,061 | $ | 105,728 | $ | 87,690 | ||||||||||||||||
| Operating noninterest expense (Non-GAAP)/average assets2 | 2.35 | % | 2.24 | % | 2.21 | % | 2.23 | % | 2.23 | % | 2.26 | % | 2.28 | % | ||||||||||||||||
| Operating Pre-tax Pre-provision ("PTPP") Earnings: | ||||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 37,612 | $ | 36,708 | $ | 33,062 | $ | 30,118 | $ | 29,855 | $ | 137,501 | $ | 113,394 | ||||||||||||||||
| Operating noninterest income (Non-GAAP) | 6,981 | 6,250 | 7,229 | 7,111 | 6,806 | 27,571 | 23,904 | |||||||||||||||||||||||
| Operating noninterest expense (Non-GAAP) | (27,461 | ) | (27,143 | ) | (25,845 | ) | (25,279 | ) | (25,061 | ) | (105,728 | ) | (87,690 | ) | ||||||||||||||||
| Operating PTPP earnings (Non-GAAP) | $ | 17,132 | $ | 15,815 | $ | 14,446 | $ | 11,950 | $ | 11,600 | $ | 59,344 | $ | 49,608 | ||||||||||||||||
| Non-GAAP Return Ratios: | ||||||||||||||||||||||||||||||
| Operating return on average assets (Non-GAAP)3 | 1.10 | % | 0.96 | % | 0.88 | % | 0.76 | % | 0.77 | % | 0.92 | % | 0.98 | % | ||||||||||||||||
| Operating PTPP return on average assets (Non-GAAP)4 | 1.46 | % | 1.30 | % | 1.23 | % | 1.05 | % | 1.03 | % | 1.27 | % | 1.29 | % | ||||||||||||||||
| Return on average tangible common equity (Non-GAAP)5 | 16.65 | % | 14.36 | % | 13.02 | % | 10.39 | % | 8.18 | % | 13.60 | % | 11.84 | % | ||||||||||||||||
| Operating return on average shareholders' equity (Non-GAAP)6 | 12.15 | % | 10.83 | % | 9.82 | % | 8.14 | % | 8.09 | % | 10.24 | % | 9.67 | % | ||||||||||||||||
| Operating return on average tangible common equity (Non-GAAP)7 | 16.47 | % | 14.44 | % | 13.09 | % | 10.80 | % | 10.70 | % | 13.69 | % | 12.77 | % | ||||||||||||||||
| Operating Efficiency Ratio: | ||||||||||||||||||||||||||||||
| Efficiency ratio (GAAP) | 61.28 | % | 63.39 | % | 64.35 | % | 69.08 | % | 75.89 | % | 64.33 | % | 66.54 | % | ||||||||||||||||
| Adjustment for taxable equivalent yields | (0.22 | ) | % | (0.25 | ) | % | (0.27 | ) | % | (0.31 | ) | % | (0.32 | ) | % | (0.26 | ) | % | (0.29 | ) | % | |||||||||
| Adjustment for securities gains (losses) | (0.20 | ) | % | - | % | - | % | - | % | - | % | (0.06 | ) | % | (0.02 | ) | % | |||||||||||||
| Adjustment for merger related income and costs | 0.50 | % | (0.21 | ) | % | (0.20 | ) | % | (1.17 | ) | % | (7.50 | ) | % | (0.22 | ) | % | (2.64 | ) | % | ||||||||||
| Operating efficiency ratio (Non-GAAP) | 61.36 | % | 62.93 | % | 63.88 | % | 67.60 | % | 68.07 | % | 63.79 | % | 63.59 | % | ||||||||||||||||
1Operating noninterest income (Non-GAAP) is annualized and divided by average assets.
2Operating noninterest expense (Non-GAAP) is annualized and divided by average assets.
3Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets.
4Operating PTPP return on average assets (Non-GAAP) is the annualized operating PTPP earnings (Non-GAAP) divided by average assets.
5Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP).
6Operating return on average shareholders' equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average equity.
7Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP).
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 | |||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Tangible Common Equity: | |||||||||||||||||||||||||||||
| Shareholders' equity (GAAP) | $ | 432,452 | $ | 414,711 | $ | 420,427 | $ | 420,042 | $ | 429,430 | $ | 432,452 | $ | 429,430 | |||||||||||||||
| Less goodwill and other intangible assets | 109,772 | 110,460 | 104,582 | 105,215 | 105,852 | 109,772 | 105,852 | ||||||||||||||||||||||
| Tangible common equity (Non-GAAP) | $ | 322,680 | $ | 304,251 | $ | 315,845 | $ | 314,827 | $ | 323,578 | $ | 322,680 | $ | 323,578 | |||||||||||||||
| Average Tangible Common Equity: | |||||||||||||||||||||||||||||
| Average shareholders' equity (GAAP) | $ | 420,037 | $ | 425,365 | $ | 419,726 | $ | 427,945 | $ | 426,808 | $ | 423,252 | $ | 387,688 | |||||||||||||||
| Less average goodwill and other intangible assets | 110,206 | 106,483 | 104,986 | 105,617 | 104,193 | 106,834 | 93,910 | ||||||||||||||||||||||
| Average tangible common equity (Non-GAAP) | $ | 309,831 | $ | 318,882 | $ | 314,740 | $ | 322,328 | $ | 322,615 | $ | 316,418 | $ | 293,778 | |||||||||||||||
| Tangible Book Value per Common Share: | |||||||||||||||||||||||||||||
| Book value per common share (GAAP) | $ | 25.59 | $ | 24.56 | $ | 24.88 | $ | 24.86 | $ | 25.56 | $ | 25.59 | $ | 25.56 | |||||||||||||||
| Adjustment due to goodwill and other intangible assets | (6.50 | ) | (6.54 | ) | (6.19 | ) | (6.23 | ) | (6.30 | ) | (6.50 | ) | (6.30 | ) | |||||||||||||||
| Tangible book value per common share (Non-GAAP)1 | $ | 19.09 | $ | 18.02 | $ | 18.69 | $ | 18.64 | $ | 19.26 | $ | 19.09 | $ | 19.26 | |||||||||||||||
| Tangible Common Equity to Tangible Assets: | |||||||||||||||||||||||||||||
| Total Assets | $ | 4,612,913 | $ | 4,796,911 | $ | 4,788,113 | $ | 4,718,579 | $ | 4,611,579 | $ | 4,612,913 | $ | 4,611,579 | |||||||||||||||
| Less goodwill and other intangibles | 109,772 | 110,460 | 104,582 | 105,215 | 105,852 | 109,772 | 105,852 | ||||||||||||||||||||||
| Tangible Assets (Non-GAAP): | $ | 4,503,141 | $ | 4,686,451 | $ | 4,683,531 | $ | 4,613,364 | $ | 4,505,727 | $ | 4,503,141 | $ | 4,505,727 | |||||||||||||||
| Tangible common equity to tangible assets (Non-GAAP) | 7.17 | % | 6.49 | % | 6.74 | % | 6.82 | % | 7.18 | % | 7.17 | % | 7.18 | % | |||||||||||||||
1Tangible book value per share (Non-GAAP) is computed by dividing total stockholder's equity, less goodwill and other intangible assets by common shares outstanding.
