SmartFinancial (SMBK) investor relations material

Executive summary

• Q3’26 net income was $18.6M, up 36% YoY; diluted operating EPS was $1.10, and operating revenue reached a quarterly record $57.5M.

• Organic loans and leases grew $174M and core deposits grew $163M, equivalent to 15% and 12% annualized QoQ growth.

• Management reaffirmed high-single-digits-plus growth guidance and said it remains on track toward a $1 EPS run rate.

Financial highlights

• Net interest income was $49.4M, up $1.3M QoQ; net interest margin, FTE, declined 7 bps to 3.45%.

• Operating noninterest income was $8.1M, up $245K QoQ; operating noninterest expense was $36.4M, up $2.4M QoQ.

• Operating expense included ~$1M in Fountain equipment sale losses and valuation write-downs, plus ~$300K in tax-credit costs; excluding these items, expenses were in line with guidance.

• Provision for credit losses was $687K, versus $1.5M in Q2; income tax expense was $1.9M versus $4.2M, including a $2.6M purchased-tax-credit benefit.

• Nine-month net income was $48.6M versus $36.6M YoY; diluted EPS was $2.86 versus $2.17.

Outlook and guidance

• Q4 NIM is expected near 3.45%; modest expansion is anticipated as asset yields improve, partly offset by near-term deposit-cost pressure; outlook assumes a December rate hike.

• Q4 operating noninterest income is projected at $7.5M and operating noninterest expense at $35M-$35.5M, including salary and benefits of $21M-$21.5M; forward effective tax rate is 19.5%-20.5%.

• Q4 loan growth is expected to be similar to or slightly above Q3, with NII growth near 3% QoQ; management cited 5%-6% expense growth from the Q4 run rate in planning discussions.

• Priorities include leveraging infrastructure, commercial sales, relationship generation, client profitability, product enhancement, disciplined pricing and expense management.

• $453M of fixed-rate loans yielding 4.98% mature by year-end 2027; $131M of adjustable-rate loans yielding 5.11% mature or reprice by then, supporting potential yield enhancement.