SmartFinancial (SMBK) investor relations material

Executive summary

• Net income for Q1 2026 was $13.7 million, or $0.81 per diluted share, flat sequentially but up 21–22% year-over-year, with operating revenue of $53.8 million and strong organic loan and deposit growth.

• Tangible book value per share increased to $27.33, up from $26.86 at year-end and 16% higher year-over-year, reflecting continued balance sheet strength.

• Maintained disciplined growth with 14% annualized loan growth and 7% annualized core deposit growth, emphasizing organic expansion.

• Credit quality remained robust, with non-performing assets at 0.25% of total assets and net charge-offs at two basis points.

• Continued investment in infrastructure, technology, and talent, including new hires in private banking and wealth management.

Financial highlights

• Net interest income rose to $45.9 million, up 2% sequentially and 20% year-over-year, with net interest margin improving by 10 basis points to 3.48%.

• Operating non-interest income was $7.9 million, slightly down from last quarter but above expectations, with recurring fee income from wealth, treasury, mortgage, and equipment finance.

• Operating non-interest expenses were $32.9 million, modestly below guidance, with higher salary and benefit expenses due to variable compensation and merit increases.

• Allowance for credit losses increased to $44 million (0.97% of loans), reflecting a model update and quarterly activities.

• Operating efficiency ratio improved to around 60–61%.

Outlook and guidance

• Net interest margin expected to remain flat in Q2 and increase slightly in the second half of 2026, assuming a flat rate environment.

• Non-interest income projected at $7.8 million and non-interest expense at $34–$34.5 million for Q2; salary and benefits expected at $20.5–$21 million.

• Efficiency ratio targeted to trend down to 60% by year-end.

• Loan growth expected to continue at high single-digit to low double-digit annualized pace, with disciplined pricing amid competitive pressures.

• Strategic focus on leveraging infrastructure and business pipeline growth, with M&A deprioritized except for exceptional opportunities.