SmartFinancial Announces Results for the Fourth Quarter 2024

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.

Highlights for the Fourth Quarter of 2024

• Operating earnings 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%

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.”

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!”

Net Interest Income and Net Interest Margin

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.

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.

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.

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

		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	%

Provision for Credit Losses on Loans and Leases and Credit Quality

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.

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

			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	%		–	%

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.

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			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)	%

Noninterest Income

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.

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			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)

Noninterest Expense

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”).

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			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

Income Tax Expense

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.

Balance Sheet Trends

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.

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.

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 share 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.

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

		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)

Board of Directors Declares Dividend

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

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.

About SmartFinancial, Inc.

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

Source
SmartFinancial, Inc.
Investor Contacts
Billy Carroll	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

Non-GAAP Financial Measures

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

1. Operating earnings
2. Operating noninterest income
3. Operating noninterest expense
4. Operating pre-provision net revenue (“PPNR”) earnings
5. Tangible common equity
6. Average tangible common equity
7. Tangible book value per common share
8. Tangible assets
9. 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.

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

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

Forward-Looking Statements

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

1. risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively;
2. claims and litigation arising from our business activities and from the companies we acquire, which may relate to contractual issues, environmental laws, fiduciary responsibility, and other matters;
3. 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.

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
	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

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands except share and per share data)

	Three Months Ended															Year Ended
	Dec			Sep			Jun			Mar			Dec			Dec			Dec
	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

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

YIELD ANALYSIS

		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	%

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.

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.

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information – (unaudited)

(dollars in thousands)

YIELD ANALYSIS

		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	%

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.

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.

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
		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.

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.

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).

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.