SmartFinancial (SMBK) Q4 2024 earnings summary

Executive summary

• Net income for Q4 2024 was $9.6 million ($0.57 per diluted share), up from $6.2 million ($0.37 per share) in Q4 2023, reflecting strong operating leverage and execution on strategic goals.

• Total assets reached $5.3 billion at year-end, with $3.9 billion in total loans and $4.7 billion in total deposits across 42 branches in the Southeast.

• Tangible book value per share increased to $22.85 (including AOCI) and $24.25 (excluding AOCI), up over 9% annualized quarter over quarter, and 10% year-over-year.

• Focused on leveraging infrastructure investments and Southeast market expansion, benefiting from strong population migration and organic growth.

• Achieved Great Place to Work certification and recognized as a regional Top Workplace for eight consecutive years.

Financial highlights

• Total revenue for Q4 was $46.8 million, with net interest income rising to $37.8 million, up 8% sequentially and 20% year-over-year.

• Net interest margin expanded by 13 bps to 3.24% quarter over quarter.

• Operating non-interest income was $9.0 million, driven by higher insurance commissions and mortgage banking revenue.

• Operating expenses were $32.3 million, slightly above guidance due to higher incentive accruals and commissions.

• Operating diluted EPS was $0.57 in Q4 2024, up 5% from Q3 and 40% from Q4 2023.

Outlook and guidance

• Management expects continued profitability recovery, with mid to high single-digit loan growth and organic deposit growth to fund lending.

• Margin expansion anticipated to continue in 2025, though at a slower pace; Q1 2025 margin projected in the 3.2% to 3.25% range.

• Non-interest income forecasted in the mid- to high $7 million range and non-interest expense in the $32–$32.5 million range for Q1 2025.

• Expense growth expected to be 2.5% to 3% annualized, mainly in salaries and benefits.

• Targeting $50 million quarterly revenue run rate by late Q3 or Q4 2025, supporting 1% ROA and 12% ROE.