Exhibit 99.1
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1Q 2018
  
SmartFinancial Reports Record $0.30 Earnings per Common Share for the First Quarter 2018
Net operating earnings per common share was $0.35 for the quarter
 
Performance Highlights 
 
Record high net income of $3.4 million for the quarter, up 108 percent from a year ago.
ROAA of 0.80 percent, a new record, for the quarter and net operating ROAA of 0.91 percent.
Organic loan growth of $51 million, over 15 percent annualized during the quarter.
Transaction accounts are over 37 percent of total deposits, a new high point for the company.
Efficiency ratio decreased to 72.66 percent, a new record and down by more than 3 percentage points from a year ago.
Net interest margin, taxable equivalent, of 4.38 percent which is up 0.31 percent from a year ago.
Asset quality was outstanding with nonperforming assets to total assets decreasing to just 0.26 percent.

KNOXVILLE, TN - April 24, 2018 - SmartFinancial, Inc. ("SmartFinancial"; NASDAQ: SMBK), announced today net income of $3.4 million in its first quarter of 2018, compared to $1.6 million a year ago. Diluted net income per common share was$0.30 for first quarter of 2018, compared to $0.19 during the first quarter of 2017.

Billy Carroll, President & CEO, stated: "We had a great first quarter with a new record high return on average assets and earnings per share. We achieved these milestones by growing loans at over a 15 percent pace while simultaneously maintaining a very strong net margin. Demand deposits increased significantly, and while a large portion was conversion related reclassifications, organic demand deposit growth for the quarter was over $25 million. As an organization we continue to improve on our efficiencies as we capture further economies of scale, even with over half a million in merger related costs. Our team has done a great job of integrating Capstone, planning for the Tennessee Bancshares acquisition, and growing the core bank."
 
SmartFinancial's Chairman, Miller Welborn, concluded: "We are looking forward to completing the acquisition of Tennessee Bancshares in the second quarter. Our resulting company will have assets approaching $2.0 billion by quarter end, setting us up for the next stage of growth. The opportunities before the company and in turn for our shareholders have never been greater. We are well on our way in creating one of the Southeast’s next great community banking franchises."
 
First Quarter 2018 compared to Fourth Quarter 2017

Net income available to common shareholders totaled $3.4 million in the first quarter of 2018, or $0.30 per diluted share, compared to $38 thousand, or $0.00 per diluted share, in the fourth quarter of 2017, which was negatively impacted by the revaluation and write down of deferred tax assets due to the Tax Cuts and Jobs Act which resulted in a lower federal tax rate for corporations. Net operating earnings available to common shareholders (Non-GAAP), which excludes securities gains, foreclosed assets gains and losses, and merger and conversion costs, totaled $3.9 million in the first quarter of 2018 compared to $3.7 million in the previous quarter.
 
Net interest income to average assets of 3.93 percent for the quarter was down 4.09 percent from the fourth quarter of 2017. Net interest income totaled $16.8 million in the first quarter of 2018 compared to $15.3 million in the fourth quarter of 2017. Net interest income was negatively impacted approximately $368 thousand due to the two less days in the current period. Net interest margin, taxable equivalent, decreased from 4.51 percent in the fourth quarter of 2017 to 4.38 percent in the first quarter of 2018 primarily as a result of less income from purchase accounting adjustments on acquired loans and increases on the cost of interest-bearing liabilities.
 
Provision for loan losses was $689 thousand in the first quarter of 2018, compared to $442 thousand in the fourth quarter of 2017. The increase in provision for loan losses was due to higher loan growth during the period. The allowance for loan losses and leases

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("ALLL") was $6.5 million, or 0.47 percent of total loans as of March 31, 2018, compared to $5.9 million, or 0.44 percent of total loans, as of December 31, 2017.
 
Nonperforming loans as a percentage of total loans was 0.14 percent as of March 31, 2018, which was up slightly from 0.13 percent in the prior quarter. Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.26 percent as of March 31, 2018, compared to 0.29 percent as of December 31, 2017. In addition to the allowance there were $16.3 million additional discounts on $492.9 million of purchased loans as of March 31, 2018 compared to $17.9 million on $513.5 million of purchased loans as of December 31, 2017.
 
Noninterest income to average assets of 0.38 percent for the period was down from 0.42 percent in the fourth quarter of 2017. Noninterest income totaled $1.6 million in the first quarter of 2018, compared to $1.6 million in the fourth quarter of 2017. The slight increase in noninterest income was primarily due to higher service charges on deposit accounts.

Noninterest expense to average assets of 3.13 percent for the quarter was down from 3.35 percent in the fourth quarter of 2017. Noninterest expense totaled $13.4 million in the first quarter of 2018, which was up $843 thousand from the fourth quarter of 2017, primarily due to three months of salaries and employee benefits for associates in Alabama compared to two months in the prior quarter. Income tax expense was $940 thousand in the first quarter of 2018 compared to $3.9 million in the fourth quarter of 2017, which was elevated by the revaluation and write down of deferred tax assets due to the Tax Cuts and Jobs Act which resulted in a lower federal tax rate for corporations. The company's effective tax rate decreased to 21.6 percent in the first quarter of 2018 compared to 99.0 percent in the fourth quarter of 2017.

First Quarter 2018 compared to First Quarter 2017

Net income available to common shareholders totaled $3.4 million in the first quarter of 2018, or $0.30 per diluted share, compared to $1.4 million, or $0.19 per diluted share, in the first quarter of 2017. Net operating earnings available to common shareholders (Non-GAAP), which excludes securities gains, foreclosed assets gains and losses, and merger and conversion costs, totaled $3.9 million in the first quarter of 2018 compared to $1.5 million in the first quarter of 2017.

Net interest income to average assets of 3.93 percent for the quarter increased from 3.81 percent in the first quarter of 2017 as the average earning asset balances and yields increased compared to the prior year. Net interest income totaled $16.8 million in the first quarter of 2018 compared to $9.8 million in the first quarter of 2017. Net interest income was positively impacted compared to the prior year due to increases in loan and securities balances and increases in the yields of the loan and securities portfolios. Net interest margin, taxable equivalent, increased from 4.07 percent in the first quarter of 2017 to 4.38 percent in the first quarter of 2018 as a result of increases in the yield on earning assets.

Provision for loan losses was $689 thousand in the first quarter of 2018, compared to $12 thousand in the first quarter of 2017. The increase in provision for loan losses was due to faster loan growth during the period. The ALLL was $6.5 million, or 0.47 percent of total loans as of March 31, 2018, compared to $5.2 million, or 0.64 percent of total loans, as of March 31, 2017.
 
Nonperforming loans as a percentage of total loans was 0.14 percent as of March 31, 2018, which was down from 0.18 percent in the prior year. Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.26 percent as of March 31, 2018, compared to 0.36 percent as of March 31, 2017.
 
Noninterest income to average assets of 0.38 percent for the quarter was down from 0.36 percent in the first quarter of 2017. Noninterest income totaled $1.6 million in the first quarter of 2018, compared to $0.9 million in the first quarter of 2017.

Noninterest expense to average assets of 3.13 percent for the quarter was down from 3.16 percent in the first quarter of 2017. Noninterest expense totaled $13.4 million in the first quarter of 2018, compared to $8.2 million in the first quarter of 2017. The Company's effective tax rate was 21.6 percent in the first quarter of 2018 compared to 37.0 percent in the first quarter of 2017.



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Conference Call Information
SmartFinancial plans to issue its earnings release for the first quarter of 2018 on Tuesday, April 24, 2018, and will host a conference call on Wednesday, April 25, at 10:00 a.m. ET. To access this interactive teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the confirmation number 6173081. A replay of the conference call will be available through April 25, 2019, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number 10119695. Conference call materials (earnings release and conference call presentation) will be published on the company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile at 9:00 am EST prior to the morning of 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 22 branches, four loan production offices, spanning East Tennessee, Tuscaloosa and Southwest Alabama, and 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                        Frank Hughes
President & CEO                        Executive Vice President, Investor Relations
(865) 868-0613                        (423) 385-3009
 
Media Contact
Kelley Fowler
Senior Vice President, Public Relations & Marketing
(865) 868-0611    kelley.fowler@smartbank.com
 
Non-GAAP Financial Matters
Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. SmartFinancial management uses several non-GAAP financial measures, including: (i) net operating earnings available to common shareholders; (ii) operating efficiency ratio; and (iii) tangible common equity, in its analysis of the company's performance. Net operating earnings available to common shareholders excludes the following from net income available to common shareholders: securities gains and losses, OREO gain and losses, merger and conversion expenses, effect of the December, 2017 tax law change on deferred tax assets, and the income tax effect of adjustments. The operating efficiency ratio excludes securities gains and losses, adjustment for OREO gains and losses, and merger and conversion costs from the efficiency ratio. Tangible common equity excludes total preferred stock, preferred stock paid in capital, goodwill, and other intangible assets.
 
Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider SmartFinancial's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
 
Forward Looking Statements
This release contains forward-looking statements. SmartFinancial cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: the expected revenue synergies and cost savings from the proposed merger with Tennessee Bancshares, Inc. (the “Tennessee Bancshares merger”) and/or the recently completed merger with Capstone Bancshares, Inc. (the “Capstone merger”) may not be fully realized or may take longer than anticipated to be realized; the disruption from either the Tennessee Bancshares merger or the Capstone merger with customers, suppliers or employees or other business partners’ relationships; the risk of successful integration of our business with that of Tennessee Bancshares or Capstone; the amount of costs, fees, expenses, and charges related to Tennessee Bancshares merger; risks of expansion into new geographic or product markets, like the proposed expansion into the Nashville, TN MSA associated with the proposed Tennessee Bancshares merger; changes in management’s plans for the future, prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services and other factors that may be described in our annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.
 
The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, SmartFinancial assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.


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SmartFinancial, Inc. and Subsidiary
 
 
 
 
Condensed Consolidated Financial Information (unaudited)
 
 
 
 
(In thousands except per share data)
 
 
 
 
 
 
As of and for the three months ending
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
March 31, 2017
Selected Performance Ratios (Annualized)
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
0.80
%
 
0.01
 %
 
0.59
 %
 
0.61
 %
 
0.64
 %
Net operating return on average assets (Non-GAAP)
 
0.91
%
 
0.99
 %
 
0.63
 %
 
0.61
 %
 
0.44
 %
Return on average shareholder equity
 
6.25
%
 
0.08
 %
 
4.91
 %
 
4.95
 %
 
5.18
 %
Net operating return on average shareholder equity (Non-GAAP)
 
7.12
%
 
7.99
 %
 
5.25
 %
 
4.91
 %
 
3.55
 %
Net interest income / average assets
 
3.93
%
 
4.09
 %
 
3.81
 %
 
3.81
 %
 
3.81
 %
Yield on Earning Assets
 
5.04
%
 
5.07
 %
 
4.69
 %
 
4.66
 %
 
4.54
 %
Yield on earning assets, TE (Non-GAAP)
 
5.05
%
 
5.09
 %
 
4.70
 %
 
4.66
 %
 
4.54
 %
Cost of interest-bearing liabilities
 
0.82
%
 
0.70
 %
 
0.68
 %
 
0.65
 %
 
0.60
 %
Net Interest margin
 
4.37
%
 
4.51
 %
 
4.16
 %
 
4.14
 %
 
4.07
 %
Net interest margin, TE (Non-GAAP)
 
4.38
%
 
4.51
 %
 
4.17
 %
 
4.15
 %
 
4.07
 %
Noninterest income / average assets
 
0.38
%
 
0.42
 %
 
0.43
 %
 
0.47
 %
 
0.36
 %
Noninterest expense / average assets
 
3.13
%
 
3.35
 %
 
3.34
 %
 
3.29
 %
 
3.16
 %
Efficiency ratio
 
72.66
%
 
74.26
 %
 
78.67
 %
 
76.77
 %
 
75.79
 %
Operating efficiency ratio (Non-GAAP)
 
67.62
%
 
60.73
 %
 
76.46
 %
 
78.98
 %
 
81.34
 %
Pre-tax pre-provision income / average assets
 
1.07
%
 
1.16
 %
 
0.97
 %
 
0.96
 %
 
1.09
 %
 
 
 
 
 
 
 
 
 
 
 
Per Common Share
 
 
 
 
 
 
 
 
 
 
Net income, basic
 
$
0.30

 
$

 
$
0.20

 
$
0.20

 
$
0.19

Net income, diluted
 
0.30

 

 
0.20

 
0.20

 
0.19

Net operating earnings, basic (Non-GAAP)
 
0.35

 
0.35

 
0.22

 
0.20

 
0.15

Net operating earnings, diluted (Non-GAAP)
 
0.34

 
0.35

 
0.22

 
0.20

 
0.15

Book value as of
 
18.60

 
18.46

 
16.57

 
16.39

 
16.14

Tangible book value (Non-GAAP) as of
 
14.09

 
13.90

 
15.67

 
15.48

 
15.34

 
 
 
 
 
 
 
 
 
 
 
Common shares outstanding as of
 
11,234

 
11,153

 
8,243

 
8,219

 
8,211

 
 
 
 
 
 
 
 
 
 
 
Composition Of Loans
 
 
 
 
 
 
 
 
 
 
Real estate commercial
 
 
 
 
 
 
 
 
 
 
owner occupied
 
$
288,666

 
$
281,297

 
$
210,489

 
$
211,469

 
$
197,032

non-owner occupied
 
375,028

 
361,691

 
237,131

 
233,707

 
210,901

Real Estate Commercial, Total
 
663,694

 
642,988

 
447,620

 
445,176

 
407,933

Commercial & industrial
 
256,333

 
238,087

 
119,782

 
105,129

 
90,649

Real estate construction & development
 
142,702

 
135,409

 
98,212

 
101,151

 
115,675

Real estate residential
 
299,148

 
293,457

 
199,704

 
206,667

 
186,344

Other loans
 
12,380

 
13,317

 
6,361

 
7,298

 
6,938

Total loans
 
$
1,374,257

 
$
1,323,258

 
$
871,679

 
$
865,421

 
$
807,539

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SmartFinancial, Inc. and Subsidiary
 
 
 
 
Condensed Consolidated Financial Information (unaudited)
 
 
 
 
(In thousands except per share data)
 
 
 
 
 
 
As of and for the three months ending
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
March 31, 2017
Asset Quality Data and Ratios
 
 
 
 
 
 
 
 
 
 
Nonperforming loans
 
$
1,931

 
$
1,764

 
$
1,264

 
$
1,147

 
$
1,445

Foreclosed assets
 
2,665

 
3,254

 
2,888

 
2,369

 
2,371

Total nonperforming assets
 
$
4,596

 
$
5,018

 
$
4,152

 
$
3,516

 
$
3,816

Restructured loans not included in nonperforming loans
 
$
40

 
$
41

 
$
42

 
$

 
$
301

Net charge-offs (recoveries) to average loans (annualized)
 
0.02
%
 
(0.01
)%
 
(0.02
)%
 
(0.04
)%
 
(0.02
)%
Allowance for loan losses to loans
 
0.47
%
 
0.44
 %
 
0.62
 %
 
0.64
 %
 
0.64
 %
Nonperforming loans to total loans, gross
 
0.14
%
 
0.13
 %
 
0.15
 %
 
0.13
 %
 
0.18
 %
Nonperforming assets to total assets
 
0.26
%
 
0.29
 %
 
0.37
 %
 
0.31
 %
 
0.36
 %
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios
 
 
 
 
 
 
 
 
 
 
Tangible equity to tangible assets (Non-GAAP)
 
9.26
%
 
9.28
 %
 
11.45
 %
 
11.18
 %
 
12.06
 %
Tangible common equity to tangible assets (Non-GAAP)
 
9.26
%
 
9.28
 %
 
11.45
 %
 
11.18
 %
 
12.06
 %
SmartFinancial, Inc.:
 
Estimated1

 
 
 
 
 
 
 
 
Tier 1 leverage
 
9.29
%
 
10.48
 %
 
11.46
 %
 
11.91
 %
 
12.18
 %
Common equity Tier 1
 
10.57
%
 
10.59
 %
 
13.37
 %
 
13.43
 %
 
14.46
 %
Tier 1 capital
 
10.57
%
 
10.59
 %
 
13.37
 %
 
13.43
 %
 
14.46
 %
Total capital
 
10.99
%
 
10.98
 %
 
13.93
 %
 
14.00
 %
 
15.05
 %
SmartBank:
 
Estimated1

 
 
 
 
 
 
 
 
Tier 1 leverage
 
9.57
%
 
11.26
 %
 
10.57
 %
 
10.98
 %
 
11.17
 %
Common equity Tier 1
 
10.89
%
 
10.90
 %
 
12.30
 %
 
12.32
 %
 
13.13
 %
Tier 1 risk-based capital
 
10.89
%
 
10.90
 %
 
12.30
 %
 
12.32
 %
 
13.13
 %
Total risk-based capital
 
11.32
%
 
11.30
 %
 
12.86
 %
 
12.89
 %
 
13.71
 %

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





SmartFinancial, Inc. and Subsidiary
 
 
 
 
Condensed Consolidated Financial Information (unaudited)
 
 
(In thousands)
 
 
 
 
BALANCE SHEET
 
 
 
 
 
 
 
 
 
 
 
 
Ending Balances
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
March 31, 2017
Assets
 
 

 
 

 
 

 
 

 
 

Cash & cash equivalents
 
$
96,710

 
$
113,027

 
$
84,098

 
$
82,835

 
$
55,548

Securities available for sale
 
156,210

 
151,945

 
115,535

 
132,762

 
137,133

Other investments
 
7,808

 
6,431

 
6,081

 
6,080

 
5,628

Total loans
 
1,374,257

 
1,323,258

 
871,679

 
865,421

 
807,539

Allowance for loan losses
 
(6,477
)
 
(5,860
)
 
(5,393
)
 
(5,498
)
 
(5,152
)
Loans, net
 
1,367,780

 
1,317,398

 
866,286

 
859,923

 
802,387

Premises and equipment
 
44,202

 
43,000

 
33,778

 
33,765

 
30,802

Foreclosed assets
 
2,665

 
3,254

 
2,888

 
2,369

 
2,371

Goodwill and other intangibles
 
50,660

 
50,837

 
7,414

 
7,492

 
6,583

Cash surrender value of life insurance
 
21,797

 
21,647

 
11,484

 
11,392

 
1,329

Other assets
 
12,593

 
13,232

 
8,258

 
8,861

 
9,305

Total assets
 
$
1,760,425

 
$
1,720,771

 
$
1,135,822

 
$
1,145,479

 
$
1,051,086

 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

 
 

Noninterest demand
 
$
276,249

 
$
220,520

 
$
185,386

 
$
183,324

 
$
160,673

Interest-bearing demand
 
278,965

 
231,644

 
156,953

 
156,150

 
167,433

Money market and savings
 
491,243

 
543,645

 
306,358

 
324,014

 
274,994

Time deposits
 
453,276

 
442,774

 
311,490

 
318,147

 
286,600

Total deposits
 
1,499,733

 
1,438,583

 
960,187

 
981,635

 
889,700

Repurchase agreements
 
15,968

 
24,055

 
26,542

 
22,946

 
23,153

FHLB & other borrowings
 
30,000

 
43,600

 
6,000

 

 
60

Other liabilities
 
5,775

 
8,681

 
6,505

 
6,164

 
5,622

Total liabilities
 
1,551,476

 
1,514,919

 
999,234

 
1,010,745

 
918,535

Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
Preferred stock
 

 

 

 

 

Common stock
 
11,234

 
11,152

 
8,243

 
8,219

 
8,211

Additional paid-in capital
 
174,981

 
174,009

 
107,065

 
106,794

 
106,703

Retained earnings
 
25,303

 
21,889

 
21,654

 
19,969

 
18,320

Accumulated other comprehensive loss
 
(2,569
)
 
(1,198
)
 
(374
)
 
(248
)
 
(683
)
Total shareholders' equity
 
208,949

 
205,852

 
136,588

 
134,734

 
132,551

Total liabilities & shareholders' equity
 
$
1,760,425

 
$
1,720,771

 
$
1,135,822

 
$
1,145,479

 
$
1,051,086





SmartFinancial, Inc. and Subsidiary
 
 
 
 
Condensed Consolidated Financial Information (unaudited)
 
 
(In thousands)
 
 
 
 
INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
Three months ending
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
March 31, 2017
Interest Income
 
 
 
 
 
 
 
 
 
 
Loans, including fees
 
$
18,228

 
$
16,357

 
$
11,491

 
$
10,747

 
$
10,210

Investment securities and interest bearing due froms

 
1,049

 
770

 
740

 
692

 
661

Other interest income
 
101

 
117

 
86

 
78

 
73

Total interest income
 
19,378

 
17,244

 
12,317

 
11,517

 
10,944

Interest Expense
 
 
 
 
 
 
 
 
 
 
Deposits
 
2,401

 
1,806

 
1,373

 
1,241

 
1,098

Repurchase agreements
 
13

 
15

 
15

 
16

 
16

FHLB and other borrowings
 
153

 
81

 
5

 
12

 
15

Total interest expense
 
2,567

 
1,902

 
1,393

 
1,268

 
1,129

Net interest income
 
16,811

 
15,342

 
10,924

 
10,249

 
9,815

Provision for loan losses
 
689

 
442

 
30

 
298

 
12

Net interest income after provision for loan losses
 
16,122

 
14,898

 
10,894

 
9,951

 
9,803

Noninterest income
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
 
578

 
524

 
294

 
291

 
264

Gain on securities
 

 

 
144

 

 

Gain on sale of loans and other assets
 
325

 
366

 
224

 
405

 
281

Other non-interest income
 
739

 
691

 
585

 
556

 
402

Total noninterest income
 
1,642

 
1,581

 
1,247

 
1,252

 
947

Noninterest expense
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
7,176

 
6,272

 
5,035

 
4,758

 
4,679

Occupancy expense
 
1,533

 
1,217

 
1,114

 
963

 
978

FDIC premiums
 
102

 
150

 
102

 
61

 
153

Foreclosed asset expense
 
189

 
59

 
47

 
12

 
14

Marketing
 
185

 
167

 
177

 
129

 
164

Data Processing
 
713

 
583

 
483

 
475

 
333

Professional expenses
 
898

 
602

 
472

 
473

 
538

Amortization of other intangibles
 
188

 
155

 
78

 
61

 
53

Service contracts
 
479

 
426

 
363

 
313

 
296

Merger Expense
 
498

 
1,694

 
303

 
420

 

Other noninterest expense
 
1,448

 
1,242

 
1,400

 
1,164

 
952

Total noninterest expense
 
13,409

 
12,566

 
9,574

 
8,829

 
8,160

Earnings before income taxes
 
4,355

 
3,913

 
2,567

 
2,374

 
2,589

Income tax expense
 
940

 
3,875

 
882

 
726

 
946

Net income
 
3,415

 
38

 
1,685

 
1,648

 
1,644

Dividends on preferred stock
 

 

 

 

 
195

Net income available to common shareholders
 
$
3,415

 
$
38

 
$
1,685

 
$
1,648

 
$
1,449

 
 
 
 
 
 
 
 
 
 
 
NET INCOME PER COMMON SHARE
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.30

 
$

 
$
0.20

 
$
0.20

 
$
0.19

Diluted
 
0.30

 

 
0.20

 
0.20

 
0.19

 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
 
 
 
 
 
 
 
 
 
Basic
 
11,211

 
10,552

 
8,235

 
8,217

 
7,525

Diluted
 
11,324

 
10,709

 
8,333

 
8,326

 
7,631





SmartFinancial, Inc. and Subsidiary
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Financial Information (unaudited)
 
 
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
YIELD ANALYSIS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2018
 
Three Months Ended December 31, 2017
 
Three Months Ended March 31, 2017
 
 
Average
 
 
 
Yield/
 
Average
 
 
 
Yield/
 
Average
 
 
 
Yield/
 
 
Balance
 
Interest 1
 
Cost1
 
Balance
 
Interest 1
 
Cost1
 
Balance
 
Interest 1
 
Cost1
Assets
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans
 
$
1,346,179

 
$
18,230

 
5.49
%
 
$
1,160,599

 
$
16,362

 
5.61
%
 
$
811,522

 
$
10,220

 
5.11
%
Investment securities and interest bearing due froms
 
203,923

 
1,059

 
2.11
%
 
179,768

 
781

 
1.73
%
 
161,392

 
677

 
1.70
%
Federal funds and other
 
8,414

 
101

 
4.87
%
 
9,947

 
117

 
4.68
%
 
6,621

 
73

 
4.47
%
Total interest-earning assets
 
1,558,516

 
19,390

 
5.05
%
 
1,350,314

 
17,260

 
5.09
%
 
979,535

 
10,970

 
4.54
%
Non-interest-earning assets
 
176,646

 
 

 
 

 
137,846

 
 

 
 

 
66,208

 
 

 
 

Total assets
 
$
1,735,162

 
 

 
 

 
$
1,488,160

 
 

 
 

 
$
1,045,743

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Interest-bearing demand deposits
 
$
249,846

 
$
320

 
0.52
%
 
$
195,783

 
$
213

 
0.43
%
 
$
159,255

 
$
93

 
0.24
%
Money market and savings deposits
 
526,093

 
870

 
0.67
%
 
462,674

 
488

 
0.42
%
 
275,576

 
328

 
0.48
%
Time deposits
 
454,660

 
1,211

 
1.08
%
 
398,142

 
1,106

 
1.11
%
 
302,256

 
677

 
0.91
%
Total interest-bearing deposits
 
1,230,599

 
2,401

 
0.79
%
 
1,056,599

 
1,807

 
0.68
%
 
737,087

 
1,098

 
0.60
%
Securities sold under agreement to repurchase
 
16,186

 
13

 
0.33
%
 
20,226

 
15

 
0.30
%
 
18,682

 
16

 
0.35
%
Federal Home Loan Bank advances and other borrowings
 
26,655

 
153

 
2.33
%
 
8,281

 
81

 
3.90
%
 
7,446

 
15

 
0.82
%
Total interest-bearing liabilities
 
1,273,440

 
2,567

 
0.82
%
 
1,085,106

 
1,903

 
0.70
%
 
763,215

 
1,129

 
0.60
%
Noninterest-bearing deposits
 
231,355

 
 

 
 

 
203,457

 
 

 
 

 
149,305

 
 

 
 

Other liabilities
 
8,656

 
 

 
 

 
15,302

 
 

 
 

 
4,580

 
 

 
 

Total liabilities
 
1,513,451

 
 

 
 

 
1,303,865

 
 

 
 

 
917,100

 
 

 
 

Shareholders’ equity
 
221,711

 
 

 
 

 
184,295

 
 

 
 

 
128,643

 
 

 
 

Total liabilities and stockholders’ equity
 
$
1,735,162

 
 

 
 

 
$
1,488,160

 
 

 
 

 
$
1,045,743

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income, taxable equivalent
 
 

 
$
16,823

 
 

 
 

 
$
15,357

 
 

 
 

 
$
9,841

 
 

Interest rate spread
 
 

 
 

 
4.23
%
 
 

 
 

 
4.39
%
 
 

 
 

 
3.94
%
Tax equivalent net interest margin
 
 

 
 

 
4.38
%
 
 

 
 

 
4.51
%
 
 

 
 

 
4.07
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of average interest-earning assets to average interest-bearing liabilities
 
 

 
 

 
122.39
%
 
 

 
 

 
124.44
%
 
 

 
 

 
128.34
%
Percentage of  average equity to average assets
 
 

 
 

 
12.78
%
 
 

 
 

 
12.38
%
 
 

 
 

 
12.30
%

 
 

 
 

 
 

 
 
 
 
 
 
 
 

 
 

 
 

1 Taxable equivalent




SmartFinancial, Inc. and Subsidiary
 
 
 
 
Condensed Consolidated Financial Information (unaudited)
 
 
 
 
(In thousands)
 
 
 
 
NON-GAAP RECONCILIATIONS
 
Three months ending
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
March 31, 2017
Net interest income, Taxable Equivalent
 
 
 
 
 
 
 
 
 
 
Net interest income (GAAP)
 
$
16,811

 
$
15,341

 
$
10,924

 
$
10,248

 
$
9,815

Taxable equivalent adjustment
 
32

 
16

 
22

 
21

 
21

Net interest income, Taxable Equivalent (Non-GAAP)
 
$
16,823

 
$
15,357

 
$
10,946

 
$
10,269

 
$
9,836

 
 
 
 
 
 
 
 
 
 
 
Operating Earnings
 
 
 
 
 
 
 
 
 
 
Net income (loss) (GAAP)
 
$
3,415

 
$
38

 
$
1,685

 
$
1,648

 
$
1,644

Securities (gains) losses
 

 

 
(144
)
 

 

Foreclosed assets losses
 
146

 
5

 
27

 

 
15

Merger and conversion costs
 
498

 
1,694

 
303

 
420

 

Revaluation of deferred tax assets due to change in tax law
 

 
2,482

 

 

 

Income tax effect of adjustments
 
(168
)
 
(508
)
 
(36
)
 
(3
)
 
(6
)
Net operating earnings (Non-GAAP)
 
3,891

 
3,711

 
1,835

 
2,065

 
1,653

Dividends on preferred stock
 

 

 

 

 
(195
)
Net operating earnings available to common shareholders (Non-GAAP)
 
$
3,891

 
$
3,711

 
$
1,835

 
$
2,065

 
$
1,458

Net operating earnings per common share (Non-GAAP):
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.35

 
$
0.35

 
$
0.22

 
$
0.25

 
$
0.19

Diluted
 
0.34

 
0.35

 
0.22

 
0.25

 
0.19

 
 
 
 
 
 
 
 
 
 
 
Operating Efficiency Ratio
 
 
 
 
 
 
 
 
 
 
Efficiency ratio (GAAP)
 
72.66
 %
 
74.25
 %
 
78.62
 %
 
76.77
 %
 
75.79
 %
Adjustment for taxable equivalent yields
 
(0.24
)%
 
 %
 
(0.22
)%
 
(0.22
)%
 
(0.25
)%
Adjustment for securities gains (losses)
 
 %
 
 %
 
1.51
 %
 
 %
 
 %
Adjustment for OREO gains (losses)
 
(1.09
)%
 
(0.04
)%
 
(0.28
)%
 
 %
 
(0.18
)%
Adjustment for merger & conversion costs
 
(3.71
)%
 
(13.49
)%
 
(3.18
)%
 
(4.76
)%
 
 %
Operating efficiency ratio (Non-GAAP)
 
67.62
 %
 
60.72
 %
 
76.45
 %
 
71.79
 %
 
75.36
 %
 
 
 
 
 
 
 
 
 
 
 
Loan Discount Data
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses (GAAP)
 
$
6,477

 
$
5,860

 
$
5,393

 
$
5,498

 
$
5,152

Net acquisition accounting fair value discounts to loans
 
16,323

 
17,862

 
8,167

 
9,086

 
9,831

 
 
 
 
 
 
 
 
 
 
 
Tangible Common Equity
 
 
 
 
 
 
 
 
 
 
Shareholders' equity (GAAP)
 
$
208,949

 
$
205,852

 
$
136,588

 
$
134,734

 
$
132,551

Less goodwill and other intangible assets
 
50,660

 
50,837

 
7,414

 
7,492

 
6,583

Tangible common equity (Non-GAAP)
 
$
158,289

 
$
155,015

 
$
129,174

 
$
127,242

 
$
125,968




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