8-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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Date of earliest event reported: October 19, 2021

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SMARTFINANCIAL, INC.

(Exact name of registrant as specified in its charter)

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Tennessee	001-37661	62-1173944
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

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5401 Kingston Pike , Suite 600
Knoxville , Tennessee	37919
(Address of Principal Executive Offices)	(Zip Code)

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( 865 ) 437-5700 ****
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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Title of each class	​	Trading<br>Symbol(s)	​	Name of Exchange on which Registered
Common Stock, par value $1.00 per share	​	SMBK	​	The Nasdaq Stock Market

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Exchange Act. ☐

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Item 2.02	Results of Operations and Financial Condition.

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On October 19, 2021, SmartFinancial, Inc. (“SmartFinancial”) issued a press release (the “Press Release”) reporting earnings results for its third quarter ending September 30, 2021. A copy of the Press Release is attached hereto as Exhibit 99.1.

In accordance with General Instructions B.2 of Form 8K, the information in Item 2.02 of this report (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01	Regulation FD Disclosure.

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SmartFinancial is filing an investor slide presentation that it intends to review in conjunction with its earnings release conference call on October 20, 2021. The slides are attached hereto as Exhibit 99.2.

In accordance with General Instructions B.2 of Form 8K, the information in Item 7.01 of this report (including Exhibit 99.2) shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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Item 9.01	​	Financial Statements and Exhibits
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Exhibit No.		Description
99.1	​	Press release announcing third quarter 2021 financial results dated October 19, 2021
99.2	​	Third quarter 2021 investor presentation
104	​	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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	SMARTFINANCIAL, INC.
Date: October 19, 2021
	/s/ William Y. Carroll, Jr.
	William Y. Carroll, Jr.
	President & Chief Executive Officer

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Exhibit 99.1

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3Q 2021

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SmartFinancial Announces Results for the Third Quarter 2021

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KNOXVILLE, TN – October 19, 2021 - SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NASDAQ: SMBK), today announced net income of $9.6 million, or $0.61 per diluted common share, for the third quarter of 2021, compared to net income of $6.4 million, or $0.42 per diluted common share, for the third quarter of 2020, and compared to net income of $8.8 million, or $0.58 per diluted common share, for the second quarter of 2021.  Operating earnings (Non-GAAP), which excludes securities gains, merger related and restructuring expenses and non-operating items, totaled $9.9 million, or $0.63 per diluted common share, in the third quarter of 2021, compared to $6.6 million, or $0.44 per diluted common share, in the third quarter of 2020, and compared to $9.1 million, or $0.60 per diluted common share, in the second quarter of 2021.

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Highlights for the Third Quarter of 2021

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●	Net organic loan growth of over $52 million, an 8.6% annualized quarter-over-quarter increase
●	Operating earnings (non-GAAP) of $0.63 per diluted share, a 43.2% increase from the prior-year-quarter
---	---
●	Tangible book value per share (Non-GAAP) of $19.03, a 7.3% annualized quarter-over-quarter increase
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●	Completed the acquisition of Sevier County Bancshares (“SCB”)
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●	Hired seasoned commercial banking team members in Dothan, Montgomery and Birmingham, Alabama and Tallahassee, Florida
---	---

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Billy Carroll, President & CEO, stated: “Our company is continuing to perform at a very high level, and we are extremely pleased with our results and accomplishments this quarter.  In addition to our solid financial performance, we closed our SCB transaction and added several outstanding, seasoned bankers to our staff.  The momentum around our team is strong and I am very excited with the direction of our company.”

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SmartFinancial's Chairman, Miller Welborn, concluded: “The execution of our Strategic Plan is really coming together. All of our operating metrics are on target, and we are excited about our future.”

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Net Interest Income and Net Interest Margin

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Net interest income was $30.4 million for the third quarter of 2021, compared to $26.9 million for the second quarter of 2021. Average earning assets totaled $3.61 billion, an increase of $314.9 million. The growth was primarily driven by an increase in average cash and cash equivalents of $271.6 million and average loans and leases of $24.2 million. Average interest-bearing liabilities increased $212.2 million, related to continued core deposit growth and the acquisition of SCB.

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The tax equivalent net interest margin was 3.35% for the third quarter of 2021, compared to 3.29% for the second quarter of 2021. The tax equivalent net interest margin was impacted by a 2 basis point increase in the average yield on interest-earning assets and offset by a 5 basis point decline in the rate on interest-bearing liabilities over the prior quarter.  The increase in yield on interest-earning assets was primarily driven by an increase of $1.7 million of loan discount accretion and Payroll Protection Program (“PPP”) fee accretion during the third quarter of 2021 when compared to the second quarter of 2021, offset by lower yielding excess liquidity.

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The yield on interest-bearing liabilities decreased to 0.44% for the third quarter of 2021 when compared to 0.49% for the second quarter of 2021. The cost of average interest-bearing deposits was 0.34% for the third quarter of 2021 compared to 0.39% for the second quarter of 2021, a decrease of 5 basis points. The lower cost of average deposits was attributable to the maturing and repricing of time deposits, which decreased 16 basis points during the period. The cost of total deposits for the third quarter of 2021 was 0.25% compared to 0.29% in the second quarter of 2021.

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

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​	​	​	​	​	​	​	​
​	​	Three Months Ended			​	​	​
​	​	Sep	​	Jun	​	Increase	​
Selected Interest Rates and Yields	​	2021	​	2021	​	(Decrease)	​
Yield on loans and leases	​	4.95	%	4.52	%	0.43	%
Yield on earning assets, FTE	​	3.67	%	3.65	%	0.02	%
Cost of interest-bearing deposits	​	0.34	%	0.39	%	(0.05)	%
Cost of total deposits	​	0.25	%	0.29	%	(0.04)	%
Cost of interest-bearing liabilities	​	0.44	%	0.49	%	(0.05)	%
Net interest margin, FTE	​	3.35	%	3.29	%	0.06	%

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Provision for Loan and Lease Losses and Credit Quality

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At September 30, 2021, the allowance for loan and lease losses was $19.3 million.  The allowance for loan and lease losses to total loans and leases was 0.73% as of September 30, 2021, compared to 0.74% as of June 30, 2021.  For the Company’s originated loans and leases, the allowance for loan and lease losses to originated loans and leases, less PPP loans, was 0.76% as of September 30, 2021, compared to 0.86% as of June 30, 2021.  The remaining discounts on the acquired loan and lease portfolio totaled $13.0 million, or 2.48% of acquired loans and leases as of September 30, 2021.

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

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​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	Three Months Ended					​	​	​	​
​	​	​	​	Sep	​	​	Jun	​	​	​	​
​	Provision for Loan and Lease Losses Rollforward	​	​	2021	​	​	2021	​	​	Change	​
​	Beginning balance	​	$	18,310	​	$	18,370	​	$	(60)	​
​	Charge-offs	​	​	(239)	​	​	(153)	​	​	(86)	​
​	Recoveries	​	​	75	​	​	98	​	​	(23)	​
​	Net charge-offs	​	​	(164)	​	​	(55)	​	​	(109)	​
​	Provision	​	​	1,149	​	​	(5)	​	​	(1,154)	​
​	Ending balance	​	$	19,295	​	$	18,310	​	$	985	​
​	​	​	​	​	​	​	​	​	​	​	​
​	Allowance for loan losses to total loans and leases, gross	​	​	0.73	%	​	0.74	%	​	(0.01)	%

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The Company is not required to implement the provisions of the Current Expected Credit Losses (“CECL”) accounting standard until January 1, 2023 and is continuing to account for the allowance for loan and lease losses under the incurred loss model.

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Nonperforming loans and leases as a percentage of total loans and leases was 0.13% as of September 30, 2021, a decrease of 2 basis points from the 0.15% reported in the second quarter of 2021.  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 0.14% as of September 30, 2021, as compared to 0.18% as of June 30, 2021.

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2

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

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​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	Three Months Ended					​	​	​	​
​	​	​	​	Sep	​	​	Jun	​	​	Increase	​
​	Credit Quality	​	​	2021	​	​	2021	​	​	(Decrease)	​
​	Nonaccrual loans and leases	​	$	3,567	​	$	3,694	​	$	(127)	​
​	Loans and leases past due 90 days or more and still accruing	​	​	-	​	​	64	​	​	(64)	​
​	Total nonperforming loans and leases	​	​	3,567	​	​	3,758	​	​	(191)	​
​	Other real estate owned	​	​	2,415	​	​	2,499	​	​	(84)	​
​	Other repossessed assets	​	​	77	​	​	199	​	​	(122)	​
​	Total nonperforming assets	​	$	6,059	​	$	6,456	​	$	(397)	​
​	​	​	​	​	​	​	​	​	​	​	​
​	Nonperforming loans and leases to total loans and leases, gross	​	​	0.13	%	​	0.15	%	​	(0.02)	%
​	Nonperforming assets to total assets	​	​	0.14	%	​	0.18	%	​	(0.04)	%

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Noninterest Income

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Noninterest income increased $1.2 million to $6.3 million for the third quarter of 2021 compared to $5.1 million for the second quarter of 2021.  During the third quarter of 2021, the primary components of the changes in noninterest income were as follows:

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●	Increase in service charges on deposit accounts, related to the SCB acquisition, deposit growth and transaction volume;
●	Increase in insurance commissions due to improved activity;
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●	Increase in interchange and debit card transaction fees, related to increased volume, deposit growth and the SCB acquisition; and
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●	Increase in other, includes $469 thousand in SWAP fee income from newly created capital markets program and $159 thousand in income from the Company’s bank owned life insurance program.
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The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands):

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​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	​	​
​	​	​	Sep	​	​	Jun	​	​	Increase
Noninterest Income	​	​	2021	​	​	2021	​	​	(Decrease)
Service charges on deposit accounts	​	$	1,220	​	$	1,048	​	$	172
Gain (loss) on sale of securities, net	​	​	45	​	​	-	​	​	45
Mortgage banking income	​	​	994	​	​	1,105	​	​	(111)
Investment services	​	​	448	​	​	567	​	​	(119)
Insurance commissions	​	​	745	​	​	557	​	​	188
Interchange and debit card transaction fees	​	​	1,078	​	​	922	​	​	156
Other	​	​	1,779	​	​	944	​	​	835
Total noninterest income	​	$	6,309	​	$	5,143	​	$	1,166

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3

Noninterest Expense

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Noninterest expense increased $2.5 million to $23.3 million for the third quarter of 2021 compared to $20.8 million for the second quarter of 2021. During the third quarter of 2021, the primary components of the changes in noninterest expense were as follows:

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●	Increase in salaries and employee benefits, primarily due to the hiring of additional talent from both the SCB acquisition and the Auburn, Dothan, Montgomery and Birmingham, Alabama and Tallahassee, Florida teams;
●	Increase in occupancy and equipment expense from the SCB acquisition and expansion in Alabama;
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●	Increase in FDIC insurance from continued asset growth; and
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●	Increase in data processing and technology, primarily from continued infrastructure build.
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The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):

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​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	​	​
​	​	​	Sep	​	​	Jun	​	​	Increase
Noninterest Expense	​	​	2021	​	​	2021	​	​	(Decrease)
Salaries and employee benefits	​	$	13,594	​	$	12,203	​	$	1,391
Occupancy and equipment	​	​	2,536	​	​	2,294	​	​	242
FDIC insurance	​	​	525	​	​	371	​	​	154
Other real estate and loan related expenses	​	​	407	​	​	506	​	​	(99)
Advertising and marketing	​	​	235	​	​	230	​	​	5
Data processing and technology	​	​	1,753	​	​	1,509	​	​	244
Professional services	​	​	810	​	​	849	​	​	(39)
Amortization of intangibles	​	​	711	​	​	441	​	​	270
Merger related and restructuring expenses	​	​	464	​	​	372	​	​	92
Other	​	​	2,274	​	​	2,022	​	​	252
Total noninterest expense	​	$	23,309	​	$	20,797	​	$	2,512

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Income Tax Expense

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Income tax expense was $2.6 million for the third quarter of 2021, an increase of $163 thousand, compared to $2.5 million for the second quarter of 2021.

The effective tax rate was 22.0% for the third and second quarters of 2021, respectively.

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Balance Sheet Trends

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Total assets at September 30, 2021 were $4.38 billion compared with $3.30 billion at December 31, 2020.  The increase of $1.08 billion is primarily attributable to increases in cash and cash equivalents of $609.4 million, securities available-for-sale of $123.7 million, loans and leases of $270.4 million, bank owned life insurance of $47.9 million and goodwill and intangibles of $14.5 related to the SCB acquisition.

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Total liabilities increased to $3.96 billion at September 30, 2021 from $2.95 billion at December 31, 2020.  The increase of $1.01 billion million was primarily from organic deposit growth of $561.4 million and deposits of $432.7 million from the SCB acquisition.

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Shareholders' equity at September 30, 2021 totaled $424.7 million, an increase of $67.6 million, from December 31, 2020.  The increase in shareholders' equity was primarily from the issuance of $42.3 million of common stock for the acquisition of SCB and net income of $28.1 million for the nine months ended September 30, 2021, which was offset by repurchase of the Company's common stock of $1.2 million and $2.7 million of dividends paid.  Tangible book value per share (Non-GAAP) was $19.03 at September 30, 2021, compared to $17.92 at December 31, 2020.  Tangible common equity (Non-GAAP) as a percentage of tangible assets (Non-GAAP) was 7.47% at September 30, 2021, compared with 8.41% at December 31, 2020.

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

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​	​	Sep		​	Dec		​	Increase		​
Selected Balance Sheet Information	​	2021		​	2020		​	(Decrease)		​
Total assets	​	$	4,384,031	​	$	3,304,949	​	$	1,079,082	​
Total liabilities	​	​	3,959,311	​	​	2,947,781	​	​	1,011,530	​
Total equity	​	​	424,720	​	​	357,168	​	​	67,552	​
Securities available-for-sale, at fair value	​	​	339,343	​	​	215,634	​	​	123,709	​
Loans and leases	​	​	2,652,663	​	​	2,382,243	​	​	270,420	​
Deposits	​	​	3,799,272	​	​	2,805,215	​	​	994,057	​
Borrowings	​	​	88,748	​	​	81,199	​	​	7,549	​

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Conference Call Information

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SmartFinancial issued this earnings release for the third quarter of 2021 on Tuesday, October 19, 2021, and will host a conference call on Wednesday, October 20, 2021, at 10:00 a.m. ET.  To access this interactive teleconference, dial (844) 200-6205 or (646) 904-5544 and enter the confirmation number, 289025.  A replay of the conference call will be available through December 22, 2021, by dialing (866) 813-9403 or (929) 458-6194 and entering the confirmation number, 781192.  Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 am ET prior to the conference call.

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About SmartFinancial, Inc.

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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 the 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.

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Source	​
SmartFinancial, Inc.	​
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Investor Contacts	​
Billy Carroll	​
President & CEO	​
(865) 868-0613   billy.carroll@smartbank.com	​
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Ron Gorczynski	​
Executive Vice President, Chief Financial Officer	​
(865) 437-5724 ron.gorczynski@smartbank.com	​
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Media Contact	​
Kelley Fowler	​
Senior Vice President, Public Relations & Marketing	​
(865) 868-0611    kelley.fowler@smartbank.com	​
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5

Non-GAAP Financial Measures

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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 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) operating earnings, (ii) operating return on average assets, (iii) operating pre-tax pre-provision return on average assets, (iv) operating return on average shareholders' equity, (v) return on average tangible common equity, (vi) operating return on average tangible common equity, (vii) operating efficiency ratio, (viii) operating noninterest income, (ix) operating pre-tax pre-provision earnings (x) operating noninterest expense, (xi) tangible common equity, (xii) average tangible common equity, (xiii) tangible book value; (xiv) tangible assets; and ratios derived therefrom, in its analysis of the company's performance. Operating earnings excludes the following from net income: securities gains and losses, proceeds related to the termination of an Alabama Department of Economic and Community Affairs (“ADECA”) loan program, merger related and restructuring expenses.  Operating return on average assets is the annualized operating earnings divided by average assets.  Operating pre-tax pre-provision return on average assets is the annualized operating pre-tax pre-provision income earnings by average assets. Operating return on average shareholders' equity is the annualized operating earnings divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity. Operating return on average tangible common equity is the annualized operating earnings divided by average tangible common equity (Non-GAAP). The operating efficiency ratio includes an adjustment for taxable equivalent yields and excludes securities gains and losses and merger related and restructuring expenses from the efficiency ratio. Operating noninterest income excludes the following from noninterest income: securities gains and losses, proceeds related to the termination of the ADECA loan program.  Operating pre-tax pre-provision earnings is net interest income plus operating noninterest income less operating noninterest expense.  Operating noninterest expense excludes the following from noninterest expense: prior year adjustments to salaries, merger related and restructuring expenses and certain franchise tax true-up expenses. Tangible common equity and average tangible common equity excludes goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively.  Tangible book value is tangible common equity divided by common shares outstanding.  Tangible assets excludes goodwill and other intangibles from total assets.  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 believes these non-GAAP financial measures also 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.

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6

Forward-Looking Statements

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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, including statements regarding the effects of the COVID-19 pandemic on the Company’s business and financial results and conditions, 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) the risk that cost savings and revenue synergies from recently completed acquisitions may not be realized or may take longer than anticipated to realize; (4) disruption from recently completed acquisitions with customer, supplier, employee, or other business relationships; (5) our ability to successfully integrate the businesses acquired as part of previous acquisitions with the business of SmartBank; (6) risks related to the acquisition of Sevier County Bancshares, Inc. (“SCB”); (7) the risk that the anticipated benefits from the acquisition of SCB may not be realized in the time frame anticipated; (8) changes in management’s plans for the future; (9) prevailing, or changes in, economic or political conditions, particularly in our market areas; (10) credit risk associated with our lending activities; (11) changes in interest rates, loan demand, real estate values, or competition; (12) changes in accounting principles, policies, or guidelines; (13) changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; (14) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs related to the COVID-19 pandemic; (15) the impact of the COVID-19 pandemic on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (16) potential increases in the provision for loan losses resulting from the COVID-19 pandemic; 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.

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7

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

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​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Ending Balances
​	​	Sep			Jun			Mar			Dec			Sep
​	​	2021		​	2021		​	2021		​	2020		​	2020
Assets:	​	​	​		​			​			​			​
Cash and cash equivalents	​	$	1,091,160	​	$	673,515	​	$	556,701	​	$	481,719	​	$	541,815
Securities available-for-sale, at fair value	​		339,343	​		250,817	​		250,937	​		215,634	​		214,634
Other investments	​		14,972	​		14,584	​		14,728	​		14,794	​		14,829
Loans held for sale	​		3,418	​		4,334	​		7,870	​		11,721	​		11,292
Loans and leases	​		2,652,663	​		2,468,318	​		2,487,129	​		2,382,243	​		2,404,057
Less: Allowance for loan and lease losses	​		(19,295)	​		(18,310)	​		(18,370)	​		(18,346)	​		(18,817)
Loans and leases, net	​		2,633,368	​		2,450,008	​		2,468,759	​		2,363,897	​		2,385,240
Premises and equipment, net	​		85,346	​		72,314	​		72,697	​		72,682	​		73,934
Other real estate owned	​		2,415	​		2,499	​		3,946	​		4,619	​		3,932
Goodwill and other intangibles, net	​		104,930	​		90,966	​		86,350	​		86,471	​		86,710
Bank owned life insurance	​		79,145	​		72,013	​		71,586	​		31,215	​		31,034
Other assets	​		29,934	​		23,306	​		23,629	​		22,197	​		24,168
Total assets	​	$	4,384,031	​	$	3,654,356	​	$	3,557,203	​	$	3,304,949	​	$	3,387,588
Liabilities:	​			​			​			​			​
Deposits:	​			​			​			​			​
Noninterest-bearing demand	​	$	977,180	​	$	807,560	​	$	777,968	​	$	685,957	​	$	669,733
Interest-bearing demand	​		847,007	​		702,470	​		683,887	​		649,129	​		534,128
Money market and savings	​		1,389,393	​		1,140,029	​		1,073,941	​		919,631	​		871,098
Time deposits	​		585,692	​		489,413	​		512,417	​		550,498	​		577,064
Total deposits	​		3,799,272	​		3,139,472	​		3,048,213	​		2,805,215	​		2,652,023
Borrowings	​		88,748	​		78,834	​		82,642	​		81,199	​		319,391
Subordinated debt	​		41,909	​		39,388	​		39,367	​		39,346	​		39,325
Other liabilities	​		29,382	​		23,269	​		22,923	​		22,021	​		27,060
Total liabilities	​		3,959,311	​		3,280,963	​		3,193,145	​		2,947,781	​		3,037,799
Shareholders' Equity:	​			​			​			​			​
Common stock	​		16,801	​		15,110	​		15,105	​		15,107	​		15,233
Additional paid-in capital	​		292,760	​		252,039	​		251,836	​		252,693	​		254,626
Retained earnings	​		112,600	​		103,906	​		96,034	​		87,185	​		78,918
Accumulated other comprehensive income	​		2,559	​		2,338	​		1,083	​		2,183	​		1,012
Total shareholders' equity	​		424,720	​		373,393	​		364,058	​		357,168	​		349,789
Total liabilities & shareholders' equity	​	$	4,384,031	​	$	3,654,356	​	$	3,557,203	​	$	3,304,949	​	$	3,387,588

​

​

​

​

8

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands except share and per share data)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	Three Months Ended															Nine Months Ended
​	Sep			Jun			Mar			Dec			Sep			Sep			Sep
​	2021		​	2021		​	2020		​	2020		​	2020		​	2021		​	2020
Interest income:	​			​			​			​			​		​	​	​	​	​	​
Loans and leases, including fees	$	31,674	​	$	28,323	​	$	28,018	​	$	28,594	​	$	28,621	​	$	88,015	​	$	83,718
Securities available-for-sale:			​			​			​			​			​			​
Taxable		832	​		916	​		724	​		609	​		546	​		2,472	​		1,813
Tax-exempt		331	​		304	​		259	​		306	​		364	​		894	​		1,064
Federal funds sold and other earning assets		474	​		309	​		291	​		303	​		327	​		1,074	​		1,206
Total interest income		33,311	​		29,852	​		29,292	​		29,812	​		29,858	​		92,455	​		87,801
Interest expense:			​			​			​			​			​			​
Deposits		2,153	​		2,248	​		2,331	​		2,580	​		2,897	​		6,733	​		11,016
Borrowings		121	​		123	​		117	​		142	​		334	​		360	​		674
Subordinated debt		655	​		584	​		584	​		584	​		584	​		1,823	​		1,751
Total interest expense		2,929	​		2,955	​		3,032	​		3,306	​		3,815	​		8,916	​		13,441
Net interest income		30,382	​		26,897	​		26,260	​		26,506	​		26,043	​		83,539	​		74,360
Provision for loan and lease losses		1,149	​		(5)	​		67	​		—	​		2,634	​		1,211	​		8,683
Net interest income after provision for loan and lease losses		29,233	​		26,902	​		26,193	​		26,506	​		23,409	​		82,328	​		65,677
Noninterest income:			​			​			​			​			​			​
Service charges on deposit accounts		1,220	​		1,048	​		1,009	​		1,032	​		892	​		3,278	​		2,370
Gain (loss) on sale of securities, net		45	​		—	​		—	​		—	​		(9)	​		45	​		6
Mortgage banking		994	​		1,105	​		1,139	​		1,331	​		1,029	​		3,238	​		2,544
Investment services		448	​		567	​		531	​		407	​		359	​		1,546	​		1,159
Insurance commissions		745	​		557	​		1,466	​		548	​		560	​		2,768	​		1,302
Interchange and debit card transaction fees		1,078	​		922	​		839	​		760	​		868	​		2,839	​		1,652
Other		1,779	​		944	​		707	​		898	​		422	​		3,429	​		1,417
Total noninterest income		6,309	​		5,143	​		5,691	​		4,976	​		4,121	​		17,143	​		10,450
Noninterest expense:			​			​			​			​			​			​
Salaries and employee benefits		13,594	​		12,203	​		10,869	​		11,516	​		11,032	​		36,666	​		31,395
Occupancy and equipment		2,536	​		2,294	​		2,341	​		2,256	​		2,186	​		7,170	​		6,093
FDIC insurance		525	​		371	​		371	​		297	​		534	​		1,266	​		894
Other real estate and loan related expense		407	​		506	​		602	​		516	​		643	​		1,514	​		1,535
Advertising and marketing		235	​		230	​		190	​		181	​		253	​		654	​		653
Data processing and technology		1,753	​		1,509	​		1,379	​		1,182	​		1,131	​		4,642	​		3,293
Professional services		810	​		849	​		641	​		786	​		594	​		2,300	​		2,172
Amortization of intangibles		711	​		441	​		444	​		571	​		402	​		1,597	​		1,169
Merger related and restructuring expenses		464	​		372	​		103	​		702	​		290	​		939	​		3,863
Other		2,274	​		2,022	​		2,524	​		1,946	​		2,102	​		6,822	​		5,699
Total noninterest expense		23,309	​		20,797	​		19,464	​		19,953	​		19,167	​		63,570	​		56,766
Income before income taxes		12,233	​		11,248	​		12,420	​		11,529	​		8,363	​		35,901	​		19,361
Income tax expense		2,633	​		2,470	​		2,664	​		2,499	​		1,968	​		7,767	​		4,059
Net income	$	9,600	​	$	8,778	​	$	9,756	​	$	9,030	​	$	6,395	​	$	28,134	​	$	15,302
Earnings per common share:			​			​			​			​			​			​
Basic	$	0.62	​	$	0.59	​	$	0.65	​	$	0.60	​	$	0.42	​	$	1.85	​	$	1.03
Diluted	$	0.61	​	$	0.58	​	$	0.65	​	$	0.59	​	$	0.42	​	$	1.84	​	$	1.02
Weighted average common shares outstanding:			​			​			​			​			​			​
Basic		15,557,528	​		15,003,657	​		15,011,573	​		15,109,298	​		15,160,579	​		15,192,919	​		14,903,757
Diluted		15,691,126	​		15,126,184	​		15,111,947	​		15,182,796	​		15,210,611	​		15,312,755	​		14,965,455

​

​

​

​

​

​

9

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	September 30, 2021							​	June 30, 2021							​	September 30, 2020
​		Average			​	​		Yield/		Average			​	​		Yield/		Average				​		Yield/
​	​	Balance		​	Interest^1^		​	Cost^1^	​	Balance		​	Interest^1^		​	Cost^1^	​	Balance		​	Interest^1^		​	Cost^1^
Assets:		​			​					​			​					​			​				​
Loans and leases, including fees^2^	​	$	2,532,604	​	$	31,623		4.95	%	$	2,508,388	​	$	28,256		4.52	%	$	2,410,173	​	$	28,508		4.71	%
Loans held for sale	​	​	3,987	​	​	51	​	5.09	%	​	5,315	​	​	67	​	5.03	%	​	8,048	​	​	113	​	5.57	%
Taxable securities	​		187,032	​		832		1.77	%		164,935	​		916		2.23	%		132,642	​		546		1.64	%
Tax-exempt securities	​		87,621	​		477		2.16	%		89,296	​		453		2.04	%		88,129	​		515		2.32	%
Federal funds sold and other earning assets	​		802,712	​		474		0.23	%		531,125	​		309		0.23	%		438,785	​		327		0.30	%
Total interest-earning assets	​		3,613,956	​		33,457		3.67	%		3,299,059	​		30,001		3.65	%		3,077,777	​		30,009		3.88	%
Noninterest-earning assets	​		323,067	​		​		​	​		286,211	​					​		262,764	​					​
Total assets	​	$	3,937,023	​	​	​	​	​	​	$	3,585,270	​					​	$	3,340,541	​					​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities and Stockholders’ Equity:	​			​			​		​			​					​			​					​
Interest-bearing demand deposits	​	$	763,613	​		414	​	0.21	%	$	688,756	​		304		0.18	%	$	509,999	​		199		0.16	%
Money market and savings deposits	​		1,233,533	​		854	​	0.27	%		1,117,290	​		905		0.32	%		833,022	​		704		0.34	%
Time deposits	​		524,327	​		885	​	0.67	%		502,755	​		1,039		0.83	%		615,714	​		1,994		1.29	%
Total interest-bearing deposits	​		2,521,473	​		2,153	​	0.34	%		2,308,801	​		2,248		0.39	%		1,958,735	​		2,897		0.59	%
Borrowings^3^	​		80,188	​		121	​	0.60	%		81,525	​		123		0.61	%		319,265	​		334		0.42	%
Subordinated debt	​		40,211	​		654	​	6.47	%		39,375	​		584		5.95	%		39,311	​		584		5.91	%
Total interest-bearing liabilities	​		2,641,872	​		2,928	​	0.44	%		2,429,701	​		2,955		0.49	%		2,317,311	​		3,815		0.65	%
Noninterest-bearing deposits	​		877,831	​		​	​	​	​		768,399	​					​		649,489	​					​
Other liabilities	​		24,522	​		​	​	​	​		17,845	​					​		25,834	​					​
Total liabilities	​		3,544,225	​		​	​	​	​		3,215,945	​					​		2,992,634	​					​
Shareholders' equity	​		392,798	​		​	​	​	​		369,325	​					​		347,907	​					​
Total liabilities and shareholders' equity	​	$	3,937,023	​	​	​	​	​	​	$	3,585,270	​					​	$	3,340,541	​					​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income, taxable equivalent	​	​	​	​	$	30,529	​	​	​			​	$	27,046			​			​	$	26,194			​
Interest rate spread	​		​	​		​	​	3.23	%			​				3.16	%			​				3.22	%
Tax equivalent net interest margin	​		​	​		​	​	3.35	%			​				3.29	%			​				3.39	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Percentage of average interest-earning assets to average interest-bearing liabilities	​		​	​		​	​	136.80	%			​				135.78	%			​				132.82	%
Percentage of average equity to average assets	​		​	​		​	​	9.98	%			​				10.30	%			​				10.41	%

​

^1^Taxable equivalent

^2^Includes average balance of $128,408, $266,114 and $295,045 in PPP loans for the quarters ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively.

^3^ Includes average balance of $237,780 in Paycheck Protection Program Liquidity Facility (“PPPLF”) funding for the quarter ended September 30, 2020. No PPPLF funding was used for the quarters ended September 30, 2021, and June 30, 2021.

​

​

​

10

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Nine Months Ended
​	​	September 30, 2021								​	September 30, 2020							​
​		Average			​	​		Yield/			Average			​	​		Yield/
​	​	Balance		​	Interest^1^		​	Cost^1^		​	Balance		​	Interest^1^		​	Cost^1^	​
Assets:		​			​			​			​			​
Loans and leases, including fees^2^	​	$	2,489,843	​	$	87,823		​	4.72	%	$	2,252,075	​	$	83,487		4.95	%
Loans held for sale	​	​	5,724	​	​	192	​	​	4.49	%	​	6,409	​	​	231	​	4.81	%
Taxable securities	​		163,005	​		2,472		​	2.03	%		123,895	​		1,813		1.95	%
Tax-exempt securities	​		89,244	​		1,339		​	2.01	%		81,604	​		1,486		2.43	%
Federal funds sold and other earning assets	​		584,970	​		1,074		​	0.25	%		296,449	​		1,206		0.54	%
Total interest-earning assets	​		3,332,786	​		92,900		​	3.73	%		2,760,432	​		88,223		4.27	%
Noninterest-earning assets	​		295,074	​		​		​	​	​		248,293	​					​
Total assets	​	$	3,627,860	​	​	​	​	​	​	​	$	3,008,725	​					​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities and Stockholders’ Equity:	​			​			​			​			​					​
Interest-bearing demand deposits	​	$	698,148	​		974	​		0.19	%	$	451,074	​		782		0.23	%
Money market and savings deposits	​		1,112,342	​		2,580	​		0.31	%		749,316	​		2,707		0.48	%
Time deposits	​		517,566	​		3,179	​		0.82	%		667,303	​		7,527		1.51	%
Total interest-bearing deposits	​		2,328,056	​		6,733	​		0.39	%		1,867,693	​		11,016		0.79	%
Borrowings^3^	​		81,177	​		360	​		0.59	%		203,202	​		674		0.44	%
Subordinated debt	​		39,650	​		1,823	​		6.15	%		39,290	​		1,751		5.95	%
Total interest-bearing liabilities	​		2,448,883	​		8,916	​		0.49	%		2,110,185	​		13,441		0.85	%
Noninterest-bearing deposits	​		782,960	​		​	​		​	​		537,860	​				​	​
Other liabilities	​		21,553	​		​	​		​	​		23,826	​				​	​
Total liabilities	​		3,253,396	​		​	​		​	​		2,671,871	​				​	​
Shareholders' equity	​		374,464	​		​	​		​	​		336,854	​				​	​
Total liabilities and shareholders' equity	​	$	3,627,860	​	​	​	​	​	​	​	$	3,008,725	​				​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income, taxable equivalent	​	​	​	​	$	83,984	​	​	​	​			​	$	74,782		​	​
Interest rate spread	​		​	​		​	​		3.24	%			​				3.42	%
Tax equivalent net interest margin	​		​	​		​	​		3.37	%			​				3.62	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Percentage of average interest-earning assets to average interest-bearing liabilities	​		​	​		​	​		136.09	%			​				130.81	%
Percentage of average equity to average assets	​		​	​		​	​		10.32	%			​				11.20	%

​

^1^Taxable equivalent

^2^Includes average balance of $235,027 and $169,617 in PPP loans for the six months ended September 30, 2021, and 2020, respectively.

^3^ Includes average balance of $115,734 in Paycheck Protection Program Liquidity Facility (“PPPLF”) funding for the nine months ended September 30, 2020. No PPPLF funding was used for the nine months ended September 30, 2021.

​

​

​

11

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	As of and for The Three Months Ended
​		Sep			Jun			Mar			Dec			Sep
​	​	2021		​	2021		​	2021		​	2020		​	2020
Composition of Loans and Leases:		​		​	​	​	​	​	​		​			​		​
Commercial real estate:		​		​	​	​	​	​	​		​			​		​
owner occupied	​	$	560,671	​	$	492,750	​	$	477,293	​	$	463,771	​	$	467,569	​
non-owner occupied	​		752,576	​		669,741	​		593,348	​		549,205	​		563,082	​
Commercial real estate, total	​		1,313,247	​		1,162,491	​		1,070,641	​		1,012,976	​		1,030,651	​
Commercial & industrial	​		469,739	​		496,114	​		686,010	​		634,446	​		644,498	​
Construction & land development	​		326,374	​		300,704	​		285,973	​		278,075	​		275,172	​
Consumer real estate	​		478,161	​		444,640	​		432,486	​		443,930	​		440,310	​
Leases	​	​	53,396	​	​	53,038	​	​	—	​	​	—	​	​	—	​
Consumer and other	​		11,746	​		11,331	​		12,019	​		12,816	​		13,426	​
Total loans and leases	​	$	2,652,663	​	$	2,468,318	​	$	2,487,129	​	$	2,382,243	​	$	2,404,057	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Asset Quality and Additional Loan Data:	​			​	​	​	​	​	​	​			​			​
Nonperforming loans and leases	​	$	3,567	​	$	3,758	​	$	6,234	​	$	5,782	​	$	2,248	​
Other real estate owned	​		2,415	​		2,499	​		3,946	​		4,619	​		3,932	​
Other repossessed assets	​	​	77	​	​	199	​	​	—	​	​	—	​	​	—	​
Total nonperforming assets	​	$	6,059	​	$	6,456	​	$	10,180	​	$	10,401	​	$	6,180	​
Restructured loans and leases not included in nonperforming loans and leases	​	$	212	​	$	219	​	$	250	​	$	257	​	$	8	​
Net charge-offs to average loans and leases (annualized)	​		0.03	%		0.01	%		0.01	%		0.08	%		0.01	%
Allowance for loan and leases losses to loans and leases	​		0.73	%		0.74	%		0.74	%		0.77	%		0.78	%
Nonperforming loans and leases to total loans and leases, gross	​		0.13	%		0.15	%		0.25	%		0.24	%		0.09	%
Nonperforming assets to total assets	​		0.14	%		0.18	%		0.29	%		0.31	%		0.18	%
Acquired loan and lease fair value discount balance	​	$	13,001	​	$	12,982	​	$	12,951	​	$	14,467	​	$	15,141	​
Accretion income on acquired loans and leases	​		1,760	​		761	​		1,636	​		768	​		960	​
PPP net fees deferred balance	​	​	3,783	​	​	6,651	​	​	7,351	​	​	4,190	​	​	6,348	​
PPP net fees recognized	​	​	2,873	​	​	2,132	​	​	2,398	​	​	2,157	​	​	1,812	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Capital Ratios:	​			​	​	​	​	​	​	​			​			​
Equity to Assets	​		9.69	%		10.22	%		10.23	%		10.81	%		10.33	%
Tangible common equity to tangible assets (Non-GAAP)^1^	​		7.47	%		7.93	%		8.00	%		8.41	%		7.97	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
SmartFinancial, Inc.^2^	​			​	​	​	​	​	​	​			​			​
Tier 1 leverage	​		8.36	%		8.10	%		8.55	%		8.69	%		8.78	%
Common equity Tier 1	​		10.85	%		10.63	%		11.29	%		11.61	%		11.33	%
Tier 1 capital	​		10.85	%		10.63	%		11.29	%		11.61	%		11.33	%
Total capital	​		12.92	%		12.80	%		13.62	%		14.07	%		13.81	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
SmartBank	​	****	Estimated^3^	​	​	​	​	​	​	​			​			​
Tier 1 leverage	​		9.20	%		8.75	%		9.33	%		9.58	%		9.74	%
Common equity Tier 1	​		11.95	%		11.50	%		12.31	%		12.79	%		12.57	%
Tier 1 capital	​		11.95	%		11.50	%		12.31	%		12.79	%		12.57	%
Total capital	​		12.60	%		12.19	%		13.05	%		13.57	%		13.37	%

​

^1^Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.

^2^All periods presented are estimated.

^3^ Current period capital ratios are estimated as of the date of this earnings release.

​

​

​

12

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																Nine Months Ended					​
​	Sep			Jun			Mar			Dec			Sep			​	Sep			Sep		​
​	2021		​	2021		​	2021		​	2020		​	2020		​	​	2021		​	2020		​
Selected Performance Ratios (Annualized):	​			​			​			​			​		​	​	​		​	​		​
Return on average assets	​	0.97	%	​	0.98	%	​	1.18	%	​	1.11	%	​	0.76	%	​	​	1.04	%	​	0.68	%
Return on average shareholders' equity	​	9.70	%	​	9.53	%	​	10.96	%	​	10.15	%	​	7.31	%	​	​	10.05	%	​	6.07	%
Return on average tangible common equity¹	​	12.84	%	​	12.54	%	​	14.41	%	​	13.43	%	​	9.72	%	​	​	13.24	%	​	8.10	%
Noninterest income / average assets	​	0.64	%	​	0.58	%	​	0.69	%	​	0.61	%	​	0.49	%	​	​	0.63	%	​	0.46	%
Noninterest expense / average assets	​	2.35	%	​	2.33	%	​	2.35	%	​	2.46	%	​	2.28	%	​	​	2.34	%	​	2.52	%
Efficiency ratio	​	63.53	%	​	64.91	%	​	60.92	%	​	63.38	%	​	63.54	%	​	​	63.14	%	​	66.93	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Selected Performance Ratios (Annualized):	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​
Operating return on average assets^1^	​	1.00	%	​	1.01	%	​	1.19	%	​	1.14	%	​	0.79	%	​	​	1.06	%	​	0.81	%
Operating PTPP return on average assets^1^	​	1.39	%	​	1.30	%	​	1.52	%	​	1.45	%	​	1.35	%	​	​	1.40	%	​	1.42	%
Operating return on average shareholders' equity^1^	​	10.01	%	​	9.83	%	​	11.05	%	​	10.34	%	​	7.57	%	​	​	10.28	%	​	7.20	%
Operating return on average tangible common equity^1^	​	13.26	%	​	12.93	%	​	14.53	%	​	13.69	%	​	10.06	%	​	​	13.56	%	​	9.60	%
Operating efficiency ratio^1^	​	62.09	%	​	63.46	%	​	60.32	%	​	60.86	%	​	62.25	%	​	​	61.96	%	​	62.07	%
Operating noninterest income / average assets^1^	​	0.63	%	​	0.58	%	​	0.69	%	​	0.56	%	​	0.49	%	​	​	0.63	%	​	0.46	%
Operating noninterest expense / average assets^1^	​	2.30	%	​	2.29	%	​	2.34	%	​	2.37	%	​	2.25	%	​	​	2.31	%	​	2.35	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Selected Interest Rates and Yields:	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​
Yield on loans and leases	​	4.95	%	​	4.52	%	​	4.67	%	​	4.72	%	​	4.71	%	​	​	4.72	%	​	4.95	%
Yield on earning assets, FTE	​	3.67	%	​	3.65	%	​	3.88	%	​	4.01	%	​	3.88	%	​	​	3.73	%	​	4.27	%
Cost of interest-bearing deposits	​	0.34	%	​	0.39	%	​	0.44	%	​	0.50	%	​	0.59	%	​	​	0.39	%	​	0.79	%
Cost of total deposits	​	0.25	%	​	0.29	%	​	0.33	%	​	0.38	%	​	0.44	%	​	​	0.29	%	​	0.61	%
Cost of interest-bearing liabilities	​	0.44	%	​	0.49	%	​	0.54	%	​	0.60	%	​	0.65	%	​	​	0.49	%	​	0.85	%
Net interest margin, FTE	​	3.35	%	​	3.29	%	​	3.48	%	​	3.57	%	​	3.39	%	​	​	3.37	%	​	3.62	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Per Common Share:	​			​			​			​			​		​	​	​		​	​		​
Net income, basic	$	0.62	​	$	0.59	​	$	0.65	​	$	0.60	​	$	0.42	​	​	$	1.85	​	$	1.03	​
Net income, diluted		0.61	​		0.58	​		0.65	​		0.59	​		0.42	​	​		1.84	​		1.02	​
Operating earnings, basic¹		0.64	​		0.60	​		0.65	​		0.61	​		0.44	​	​		1.90	​		1.22	​
Operating earnings, diluted¹		0.63	​		0.60	​		0.65	​		0.61	​		0.44	​	​		1.88	​		1.21	​
Book value		25.28	​		24.71	​		24.10	​		23.64	​		22.96	​	​		25.28	​		22.96	​
Tangible book value¹		19.03	​		18.69	​		18.39	​		17.92	​		17.27	​	​		19.03	​		17.27	​
Common shares outstanding		16,801,447	​		15,109,736	​		15,104,536	​		15,107,214	​		15,233,227	​	​		16,801,447	​		15,233,227	​

​

¹See reconciliation of Non-GAAP measures

​

​

​

13

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended															​	Nine Months Ended					​
​		Sep			Jun			Mar			Dec			Sep				Sep			Sep		​
​	​	2021		​	2021		​	2021		​	2020		​	2020		​	​	2021		​	2020		​
Operating Earnings:		​			​			​			​			​		​	​	​	​	​	​	​	​
Net income (GAAP)	​	$	9,600	​	$	8,778	​	$	9,756	​	$	9,030	​	$	6,395	​	​	$	28,134	​	$	15,302	​
Noninterest income:	​			​			​			​			​			​	​			​			​
Securities gains (losses), net	​		(45)	​		—	​		—	​		—	​		9	​	​		(45)	​		(6)	​
ADECA termination proceeds	​		—	​		—	​		—	​		(465)	​		—	​	​		—	​		—	​
Noninterest expenses:	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​	​
Merger related and restructuring expenses	​		464	​		372	​		103	​		702	​		290	​	​		939	​		3,863	​
Income taxes:	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​	​
Income tax effect of adjustments	​		(108)	​		(96)	​		(27)	​		(62)	​		(77)	​	​		(231)	​		(1,009)	​
Operating earnings (Non-GAAP)	​	$	9,911	​	$	9,054	​	$	9,832	​	$	9,205	​	$	6,617	​	​	$	28,797	​	$	18,150	​
Operating earnings per common share (Non-GAAP):	​			​			​			​			​			​	​			​			​
Basic	​	$	0.64	​	$	0.60	​	$	0.65	​	$	0.61	​	$	0.44	​	​	$	1.90	​	$	1.22	​
Diluted	​		0.63	​		0.60	​		0.65	​		0.61	​		0.44	​	​		1.88	​		1.21	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Noninterest Income:	​			​			​			​			​			​	​			​			​
Noninterest income (GAAP)	​	$	6,309	​	$	5,143	​	$	5,691	​	$	4,976	​	$	4,121	​	​	$	17,143	​	$	10,450	​
Securities gains (losses), net	​		(45)	​		—	​		—	​		—	​		9	​	​		(45)	​		(6)	​
ADECA termination proceeds	​		—	​		—	​		—	​		(465)	​		—	​	​		—	​		—	​
Operating noninterest income (Non-GAAP)	​	$	6,264	​	$	5,143	​	$	5,691	​	$	4,511	​	$	4,130	​	​	$	17,098	​	$	10,444	​
Operating noninterest income (Non-GAAP)/average assets^1^	​		0.63	%		0.58	%		0.69	%		0.56	%		0.49	%	​		0.63	%		0.46	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Noninterest Expense:	​			​			​			​			​			​	​			​			​
Noninterest expense (GAAP)	​	$	23,309	​	$	20,797	​	$	19,464	​	$	19,953	​	$	19,167	​	​	$	63,570	​	$	56,766	​
Merger related and restructuring expenses	​		(464)	​		(372)	​		(103)	​		(702)	​		(290)	​	​		(939)	​		(3,863)	​
Operating noninterest expense (Non-GAAP)	​	$	22,845	​	$	20,425	​	$	19,361	​	$	19,251	​	$	18,877	​	​	$	62,631	​	$	52,903	​
Operating noninterest expense (Non-GAAP)/average assets^2^	​		2.30	%		2.29	%		2.34	%		2.37	%		2.25	%	​		2.31	%		2.35	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Pre-tax Pre-provision ("PTPP") Earnings:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income (GAAP)	​	$	30,382	​	$	26,897	​	$	26,260	​	$	26,506	​	$	26,043	​	​	$	83,539	​	$	74,360	​
Operating noninterest income	​	​	6,264	​	​	5,143	​	​	5,691	​	​	4,511	​	​	4,130	​	​	​	17,098	​	​	10,444	​
Operating noninterest expense	​	​	(22,845)	​	​	(20,425)	​	​	(19,361)	​	​	(19,251)	​	​	(18,877)	​	​	​	(62,631)	​	​	(52,903)	​
Operating PTPP earnings (Non-GAAP)	​	$	13,801	​	$	11,615	​	$	12,590	​	$	11,766	​	$	11,296	​	​	$	38,006	​	$	31,901	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-GAAP Return Ratios:	​			​			​			​			​			​	​			​			​
Operating return on average assets (Non-GAAP)^3^	​		1.00	%		1.01	%		1.19	%		1.14	%		0.79	%	​		1.06	%		0.81	%
Operating PTPP return on average assets (Non-GAAP)^4^	​	​	1.39	%	​	1.30	%	​	1.52	%	​	1.45	%	​	1.35	%	​	​	1.40	%	​	1.42	%
Return on average tangible common equity (Non-GAAP)^5^	​		12.84	%		12.54	%		14.41	%		13.43	%		9.72	%	​		13.24	%		8.10	%
Operating return on average shareholders' equity (Non-GAAP)^6^	​		10.01	%		9.83	%		11.05	%		10.34	%		7.57	%	​		10.28	%		7.20	%
Operating return on average tangible common equity (Non-GAAP)^7^	​		13.26	%		12.93	%		14.53	%		13.69	%		10.06	%	​		13.56	%		9.60	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Efficiency Ratio:	​			​			​			​			​			​	​			​			​
Efficiency ratio (GAAP)	​		63.53	%		64.91	%		60.92	%		63.38	%		63.54	%	​		63.14	%		66.93	%
Adjustment for taxable equivalent yields	​		(0.25)	%		(0.30)	%		(0.28)	%		(0.30)	%		(0.32)	%	​		(0.28)	%		(0.33)	%
Adjustment for securities gains (losses)	​		(0.08)	%		—	%		—	%		—	%		0.02	%	​		(0.03)	%		(0.01)	%
Adjustment for merger related income and costs	​		(1.11)	%		(1.15)	%		(0.32)	%		(2.22)	%		(0.99)	%	​		(0.87)	%		(4.52)	%
Operating efficiency ratio (Non-GAAP)	​		62.09	%		63.46	%		60.32	%		60.86	%		62.25	%	​		61.96	%		62.07	%

​

^1^Operating noninterest income (Non-GAAP) is annualized and divided by average assets.

^2^Operating noninterest expense (Non-GAAP) is annualized and divided by average assets.

^3^Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets.

^4^Operating PTPP return on average assets (Non-GAAP) is the annualized operating PTPP earnings (Non-GAAP) divided by average assets.

^5^Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP).

^6^Operating return on average shareholders’ equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average equity.

^7^Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP).

​

​

​

14

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended															Nine Months Ended
​		Sep			Jun			Mar			Dec			Sep			Sep			Sep
​	​	2021		​	2021		​	2021		​	2020		​	2020		​	2021		​	2020
Tangible Common Equity:		​			​			​			​			​		​	​	​	​	​	​
Shareholders' equity (GAAP)	​	$	424,720	​	$	373,393	​	$	364,058	​	$	357,168	​	$	349,789	​	$	424,720	​	$	349,789
Less goodwill and other intangible assets	​		104,930	​		90,966	​		86,350	​		86,471	​		86,710	​		104,930	​		86,710
Tangible common equity (Non-GAAP)	​	$	319,790	​	$	282,427	​	$	277,708	​	$	270,697	​	$	263,079	​	$	319,790	​	$	263,079
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average Tangible Common Equity:	​			​			​			​			​			​			​
Average shareholders' equity (GAAP)	​	$	392,798	​	$	369,325	​	$	360,919	​	$	354,026	​	$	347,907	​	$	374,464	​	$	336,854
Less average goodwill and other intangible assets	​		96,250	​		88,551	​		86,424	​		86,561	​		86,206	​		90,445	​		84,361
Average tangible common equity (Non-GAAP)	​	$	296,548	​	$	280,774	​	$	274,495	​	$	267,465	​	$	261,701	​	$	284,019	​	$	252,493
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tangible Book Value per Common Share:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Book value per common share (GAAP)	​	$	25.28	​	$	24.71	​	$	24.10	​	$	23.64	​	$	22.96	​	$	25.28	​	$	22.96
Adjustment due to goodwill and other intangible assets	​	​	(6.25)	​	​	(6.02)	​	​	(5.71)	​	​	(5.72)	​	​	(5.69)	​	​	(6.25)	​	​	(5.69)
Tangible book value per common share (Non-GAAP)^1^	​	$	19.03	​	$	18.69	​	$	18.39	​	$	17.92	​	$	17.27	​	$	19.03	​	$	17.27
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tangible Common Equity to Tangible Assets:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Assets	​	$	4,384,031	​	$	3,654,356	​	$	3,557,203	​	$	3,304,949	​	$	3,387,588	​	$	4,384,031	​	$	3,387,588
Less goodwill and other intangibles	​	​	104,930	​	​	90,966	​	​	86,350	​	​	86,471	​	​	86,710	​	​	104,930	​	​	86,710
Tangible Assets (Non-GAAP):	​	$	4,279,101	​	$	3,563,390	​	$	3,470,853	​	$	3,218,478	​	$	3,300,878	​	$	4,279,101	​	$	3,300,878
Tangible common equity to tangible assets (Non-GAAP)	​	​	7.47%	​	​	7.93%	​	​	8.00%	​	​	8.41%	​	​	7.97%	​	​	7.47%	​	​	7.97%

​

​

​

^1^Tangible book value per share is computed by dividing total stockholder's equity, less goodwill and other intangible assets by common shares outstanding.

​

​

15

Exhibit 99.2

1<br>INVESTOR CALL<br>3Q 2021<br>October 20, 2021, 10:00am ET<br>Webcast: www.smartbank.com<br>(Investor Relations)<br>Audio Only: 1-844-200-6205<br>Access Code: 289025<br>Miller Welborn<br>Chairman of the Board<br>Billy Carroll<br>President & CEO<br>Ron Gorczynski<br>CFO
DISCLOSURES<br>Forward-Looking Statements<br>This presentation may contain statements that are based on management’s current estimates<br>or expectations of future events or future results, and that may be deemed to constitute<br>forward-looking statements as defined under the Private Securities Litigation Reform Act of<br>1995. These statements, including statements regarding the effects of the COVID-19 pandemic<br>on SmartFinancial’s business and financial results and conditions, are not historical in nature<br>and can generally be identified by such words as “expect,” “anticipate,” “intend,” “plan,”<br>“believe,” “seek,” “may,” “estimate,” and similar expressions. All forward-looking statements<br>are subject to risks, uncertainties, and other factors that may cause the actual results of<br>SmartFinancial to differ materially from future results expressed or implied by such forward-<br>looking statements. Such risks, uncertainties, and other factors include, among others, (1) the<br>risk of litigation and reputational risk associated with historic acquisition activity;(2) the risk that<br>cost savings and revenue synergies from recently completed acquisitions may not be realized<br>or may take longer than anticipated to realize;(3) disruption from recently completed<br>acquisitions with customer, supplier, employee, or other business relationships;(4) our ability to<br>successfully integrate the businesses acquired as part of previous acquisitions with the<br>business of SmartBank;(5) risks related to the acquisition of Sevier County Bancshares<br>(“SCB”);(6) the risk that the anticipated benefits from the acquisition of SCB may not be<br>realized in the time frame anticipated;(7) changes in management’s plans for the future;(8)<br>prevailing, or changes in, economic or political conditions, particularly in our market areas;(9)<br>credit risk associated with our lending activities;(10) changes in interest rates, loan demand,<br>real estate values, or competition;(11) changes in accounting principles, policies, or guidelines;<br>(12) changes in applicable laws, rules, or regulations, including changes to statutes, regulations<br>or regulatory policies or practices as a result of, or in response to, COVID-19;(13) adverse<br>results from current or future litigation, regulatory examinations or other legal and/or regulatory<br>actions, including as a result of the Company’s participation in and execution of government<br>programs related to the COVID-19 pandemic;(14) the impact of the COVID-19 pandemic on<br>the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results<br>of operations;(15) potential increases in the provision for loan losses resulting from the COVID-<br>19 pandemic; and (16) other general competitive, economic, political, and market factors,<br>including those affecting our business, operations, pricing, products, or services. These and<br>other factors that could cause results to differ materially from those described in the forward-<br>looking statements can be found in SmartFinancial’s most recent annual report on Form 10-K,<br>quarterly reports on Form 10-Q, and current reports on Form 8-K, in each case filed with or<br>furnished to the Securities and Exchange Commission (the “SEC”) and available on the SEC’s<br>website (www.sec.gov). Undue reliance should not be placed on forward-looking statements.<br>SmartFinancial disclaims any obligation to update or revise any forward-looking statements<br>contained in this release, which speak only as of the date hereof, whether as a result of new<br>information, future events, or otherwise.<br>Non-GAAP Financial Measures<br>Statements included in this presentation include Non-GAAP financial measures and should be<br>read along with the accompanying tables, which provide a reconciliation of Non-GAAP financial<br>measures to GAAP financial measures. SmartFinancial management uses several Non-GAAP<br>financial measures, including:(i) operating earnings, (ii) operating return on average assets, (iii)<br>operating return on average shareholder equity, (iv) return on average tangible common equity,<br>(v) operating return on average tangible common equity, (vi) operating efficiency ratio;(vii)<br>tangible common equity;(viii) average tangible common equity;(ix) tangible book value;(x)<br>operating pre-tax pre-provision earnings;(xi) operating noninterest income;(xii) operating<br>noninterest expense;(xiii) tangible assets; and ratios derived therefrom, in its analysis of the<br>company's performance. Operating earnings excludes the following from net income: securities<br>gains and losses, proceeds related to the termination of an Alabama Department of Economic<br>and Community Affairs (“ADECA”) loan program, merger related and restructuring expenses,<br>and the income tax effect of adjustments. Operating return on average assets is the annualized<br>operating earnings (Non-GAAP) divided by average assets. Operating return on average<br>shareholder equity is the annualized operating earnings (Non-GAAP) divided by average equity.<br>Return on average tangible common equity is the annualized net income divided by average<br>tangible common equity (Non-GAAP). Operating return on average tangible common equity is<br>the annualized operating earnings (Non-GAAP) divided by average tangible common equity<br>(Non-GAAP). The operating efficiency ratio includes an adjustment for taxable equivalent yields<br>and excludes securities gains and losses and merger related and restructuring expenses from<br>the efficiency ratio. Tangible common equity and average tangible common equity excludes<br>goodwill and other intangible assets from shareholders’ equity and average shareholders’<br>equity. Tangible book value excludes goodwill and other intangible assets less shareholders’<br>equity divided by common shares outstanding. Operating pre-tax pre-provision earnings is net<br>interest income plus operating noninterest income (Non-GAAP) less operating noninterest<br>expense (Non-GAAP). Operating noninterest income excludes the following from noninterest<br>income: securities gains and losses, proceeds related to the termination of the ADECA loan<br>program. Operating noninterest expense excludes the following from noninterest expense: prior<br>year adjustments to salaries, merger related and restructuring expenses and certain franchise<br>tax true-up expenses. Tangible assets excludes goodwill and other intangibles from total assets.<br>Management believes that Non-GAAP financial measures provide additional useful information<br>that allows investors to evaluate the ongoing performance of the company and provide<br>meaningful comparisons to its peers. Management believes these non-GAAP financial measures<br>also enhance investors' ability to compare period-to-period financial results and allow investors<br>and company management to view our operating results excluding the impact of items that are<br>not reflective of the underlying operating performance. Non-GAAP financial measures should<br>not be considered as an alternative to any measure of performance or financial condition as<br>promulgated under GAAP, and investors should consider SmartFinancial's performance and<br>financial condition as reported under GAAP and all other relevant information when assessing<br>the performance or financial condition of the company. Non-GAAP financial measures have<br>limitations as analytical tools, and investors should not consider them in isolation or as a<br>substitute for analysis of the results or financial condition as reported under GAAP.<br>2
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$0.42<br>$0.58<br>$0.61<br>$0.44<br>$0.60<br>$0.63<br>3Q20 2Q21 3Q21<br>GAAP EPS OPERATING EPS<br>$22.96<br>$24.71 $25.28<br>$17.27<br>$18.69 $19.03<br>3Q20 2Q21 3Q21<br>BOOK VALUE TANGIBLE BOOK VALUE<br>0.76%<br>0.98% 0.97%<br>0.79%<br>1.01% 1.00%<br>3Q20 2Q21 3Q21<br>GAAP ROAA OPERATING ROAA<br>9.7%<br>12.5% 12.8%<br>10.1%<br>12.9% 13.3%<br>3Q20 2Q21 3Q21<br>GAAP ROATCE OPERATING ROATCE<br>3<br>Financial data as of or for the three months ended 9/30/21<br>1) For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>2) QoQ: Quarter-over-Quarter<br>3) “Loans” for purposes of this presentation includes all SmartFinancial loans and leases<br>4) Organic loan growth excludes PPP loans and impact from SCB acquisition and Richmond, VA loan sale; organic deposit growth excludes impact of SCB acquisition<br>QUARTERLY HIGHLIGHTS: THIRD QUARTER 2021<br>7%<br>QOQ2 ANNUALIZED<br>TANG. BOOK VALUE<br>PER SHARE GROWTH1<br>$0.63<br>DILUTED OPERATING<br>EPS1<br>1.00%<br>OPERATING RETURN<br>ON AVERAGE ASSETS1<br>13.3%<br>OPERATING RETURN<br>AVERAGE TANG.<br>COMMON EQUITY1<br>62%<br>OPERATING<br>EFFICIENCY RATIO1<br>29%<br>QOQANNUALIZED<br>ORGANIC DEPOSIT<br>GROWTH4<br>9%<br>QOQANNUALIZED<br>ORGANIC LOAN3<br>GROWTH4<br>70%<br>LOAN / DEPOSIT<br>RATIO<br>0.14%<br>NON-PERFORMING<br>ASSETS / ASSETS<br>$4.4<br>BILLION IN TOTAL<br>ASSETS<br>EARNINGS PER SHARE BOOK VALUE PER SHARE<br>RETURN ON AVERAGE ASSETS<br>RETURN ON AVERAGE TANGIBLE<br>COMMON EQUITY
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4<br>SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE<br>$4.4<br>BILLION IN TOTAL<br>ASSETS<br>$2.7<br>BILLION IN TOTAL<br>LOANS<br>We are building a culture<br>where Associates thrive and<br>are empowered to be leaders.<br>The core values that we have<br>established as a company help<br>us operate in unison and have<br>become a critical part of our<br>culture. Our Associates are key<br>to SmartBank’s success.<br>$3.8<br>BILLION IN TOTAL<br>DEPOSITS<br>40<br>TOTAL BRANCHES1<br>KNOXVILLE NASHVILLE<br>HUNTSVILLE<br>TUSCALOOSA<br>MOBILE<br>PENSACOLA<br>BIRMINGHAM<br>AUBURN<br>TALLAHASSEE<br>DOTHAN<br>MONTGOMERY<br>LEGACY SMARTBANK BRANCH OFFICES<br>NEW SMARTBANK BRANCH OFFICES<br>LOAN PRODUCTION OFFICE<br>PLANNED FUTURE EXPANSION<br>CHATTANOOGA<br>Balance sheet and branch count represent 9/30/21 balances; 1) assumes closing of five SCB branches including the SCB Richmond, VA branch, opening of Auburn, Dothan, Mobile and Montgomery, AL locations and consolidation of two Murfreesboro, TN locations
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Core Tennessee3 Central Tennessee / Nashville6<br>Total Deposits in Market $41.3 Billion Total Deposits in Market $89.2 Billion<br>Current Population (2021) 1,549,636 Current Population (2021) 1,980,990<br>Proj. Pop. Growth ('21-'26) 4.0% Proj. Pop. Growth ('21-'26) 5.9%<br>Proj. HH Inc. Growth ('21-'26) 9.7% Proj. HH Inc. Growth ('21-'26) 11.4%<br>East Middle Tennessee4 Alabama Expansion7<br>Total Deposits in Market $9.9 Billion Total Deposits in Market $73.5 Billion<br>Current Population (2021) 429,125 Current Population (2021) 1,784,492<br>Proj. Pop. Growth ('21-'26) 4.2% Proj. Pop. Growth ('21-'26) 1.5%<br>Proj. HH Inc. Growth ('21-'26) 9.3% Proj. HH Inc. Growth ('21-'26) 10.1%<br>Legacy Alabama5 Florida Panhandle8<br>Total Deposits in Market $34.7 Billion Total Deposits in Market $32.7 Billion<br>Current Population (2021) 1,417,711 Current Population (2021) 1,368,618<br>Proj. Pop. Growth ('21-'26) 3.0% Proj. Pop. Growth ('21-'26) 5.0%<br>Proj. HH Inc. Growth ('21-'26) 6.2% Proj. HH Inc. Growth ('21-'26) 10.0%<br>MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS<br>5<br>LEGACY MARKET AREA EXPANDING MARKET AREA<br>1) Percentages based on combined Legacy Market Area vs. Expanding Market Area; 2) Business generating associates in Expanding Market Area as a percent of total SmartBank revenue producing associates adjusted for impact of SCB; 3) Core Tennessee<br>includes Chattanooga, TN, Knoxville, TN and Sevierville, TN MSAs; 4) East Middle Tennessee includes Cleveland, TN, Crossville, TN, Cookeville, TN, Fentress, TN and Tullahoma, TN MSAs; 5) Legacy Alabama includes Clarke, AL, Fairhope, AL, Huntsville,<br>AL, Mobile, AL and Tuscaloosa, AL MSAs; 6) Central Tennessee / Nashville includes the Nashville, TN MSA 7) Alabama Expansion includes Auburn, AL, Birmingham, AL, Dothan, AL and Montgomery, AL MSAs; 8) Florida Panhandle includes Fort<br>Walton/Destin, FL, Panama City, FL, Pensacola, FL and Tallahassee, FL MSAs<br>Source: S&P Market Intelligence; Weighted Averages for each market area based on population<br>127%<br>LARGER DEPOSIT BASE<br>51%<br>LARGER POPULATION BASE<br>14%<br>HIGHER MEDIAN HOUSEHOLD INCOME<br>2.4%<br>FASTER HOUSEHOLD INCOME GROWTH<br>0.5%<br>FASTER PROJECTED POPULATION GROWTH<br>SMARTBANK IS FOCUSED ON BUILDING MUSCLE IN ITS EXPANDING, FAST GROWING SOUTHEAST MARKET AREAS<br>EXPANDING MARKETS<br>VS.<br>LEGACY MARKETS1 19%<br>OFTOTAL REVENUE PRODUCING ASSOCIATES2
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6 1) SmartBank and SCB Bank combined market share in Sevier County, TN; S&P Market Intelligence; 2) SCB loan total net of Richmond, VA loan sale as of closing date; 3) See page 5 for definition of Expanding Market Area; 4) Business generating associates as<br>a percent of total SmartBank revenue producing associates adjusted for impact of SCB; 5) Relationship management stats at previous place of employment immediately prior to joining SmartBank<br>2021 ACHIEVEMENTS: A ROBUST YEAR OF PROGRESS<br>$219 MILLION IN LOANS2<br>$436 MILLION IN DEPOSITS<br>>34% MARKET SHARE IN SEVIER COUNTY, TN1<br>>65% TOTAL NONINTEREST EXPENSE SAVINGS<br>ACQUISITION OF SEVIER COUNTY BANCSHARES:<br>1 NEW LENDING LINE OF BUSINESS<br>$53 MILLION IN LEASES<br>6 BUSINESS DEVELOPMENT TEAM MEMBERS<br>>$1.8 MILLION IN PROJECTED 2022 NET INCOME<br>ACQUISITION OF FOUNTAIN EQUIPMENT FINANCE:<br>EXPANDING MARKET AREA3 LIFT-OUTS:<br>17 SEASONED BANKERS<br>❖ 4 SENIOR BANKING MANAGERS<br>❖ 10 COMMERCIAL RELATIONSHIP MANAGERS<br>200+ YEARS LARGE REGIONAL BANK EXPERIENCE<br>3 NEW BRANCHES IN AUBURN, DOTHAN AND MONTGOMERY, ALABAMA<br>16% OFTOTAL REVENUE PRODUCING ASSOCIATES4<br>FLOOR PLAN LENDING UNIT LIFT-OUT:<br>1 OPERATIONS MANAGER<br>3 SEASONED BUSINESS LINE ANALYSTS<br>61+ YEARS COMBINED FLOOR PLAN LENDING EXPERIENCE<br>131 DEALER RELATIONSHIPS PREVIOUSLY MANAGED5<br>$2.0 BILLION IN COMMITMENTS PREVIOUSLY MANAGED5<br>❖ 2 PRIVATE BANKERS<br>❖ 1 TREASURY MANAGEMENT OFFICER
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$1,319<br>$1,775<br>$1,897<br>$2,382<br>$2,487 $2,468<br>$2,653<br>5.31%<br>5.72%<br>5.49%<br>4.72% 4.67% 4.52%<br>4.95%<br>3. 00%<br>4. 00%<br>5. 00%<br>6. 00%<br>7. 00%<br>8. 00%<br>9. 00%<br>10. 00%<br>$-<br>$500<br>$1, 000<br>$1, 500<br>$2, 000<br>$2, 500<br>$3, 000<br>2017Y 2018Y 2019Y 4Q20 1Q21 2Q21 3Q21<br>$1,439<br>$1,922<br>$2,047<br>$2,805<br>$3,048 $3,139<br>$3,799<br>0.55%<br>0.86%<br>1.14%<br>0.38% 0.33% 0.29% 0.25%<br>0. 00%<br>0. 50%<br>1. 00%<br>1. 50%<br>2. 00%<br>2. 50%<br>$-<br>$500<br>$1, 000<br>$1, 500<br>$2, 000<br>$2, 500<br>$3, 000<br>$3, 500<br>$4, 000<br>2017Y 2018Y 2019Y 4Q20 1Q21 2Q21 3Q21<br>7<br>1) CAGR: Compound Annualized Growth Rate<br>BALANCE SHEET: CONTINUED BALANCE SHEET EXPANSION<br>TOTAL LOANS<br>CAGR1 OF 20% SINCE 2017<br>TOTAL DEPOSITS<br>LOANS TO DEPOSITS RATIO OF 70%<br>$ in Millions<br>AVERAGE LOAN YIELD AVERAGE TOTAL DEPOSIT COST
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19% 19% 19% 20% 21%<br>23% 23% 24%<br>27%<br>28%<br>13% 12%<br>14% 7%<br>3%<br>14% 15%<br>14%<br>13%<br>14%<br>11% 12%<br>11%<br>12%<br>12%<br>18% 19%<br>17%<br>18%<br>18%<br>3%<br>$2,404 $2,382<br>$2,487 $2,468<br>$2,653<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>CRE, OO CRE, NOO SBA PPP LOANS C&I<br>C&D CONSUMER RE LEASES & OTHER<br>14%, $68<br>12%, $83<br>21%, $65<br>9%, $26<br>8%, $34<br>1%, $1<br>12%, $276<br>CRE, OO<br>CRE, NOO<br>C&I<br>C&D<br>CONSUMER RE<br>LEASES & OTHER<br>TOTAL<br>8<br>1) Excludes SBA PPP Loans and includes acquisition of SCB less Richmond, VA loan sale<br>LOAN PORTFOLIO: STRONG ORGANIC LOAN GROWTH<br>$ in Millions<br>LOAN COMPOSITION<br>ORGANIC GROWTH DESPITE<br>MARKET HEADWINDS<br>QUARTERLY LOAN GROWTH<br>12% QOQNET NEW LOAN GROWTH1
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25% 24% 26% 26%<br>26%<br>20% 23%<br>22% 22%<br>22%<br>33%<br>33%<br>35%<br>36%<br>37%<br>22%<br>20%<br>17%<br>16%<br>15%<br>$2,652<br>$2,805<br>$3,048<br>$3,139<br>$3,799<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>NONINTEREST DEMAND INTEREST-BEARING DEMAND<br>MONEY MARKET AND SAVINGS TIME DEPOSITS<br>21%, $170<br>21%, $145<br>22%, $249<br>20%, $96<br>21%, $660<br>NONINTEREST DEMAND<br>INTEREST-BEARING DEMAND<br>MONEY MARKET AND SAVINGS<br>TIME DEPOSITS<br>TOTAL<br>9<br>DEPOSIT PORTFOLIO: CONTINUED CORE DEPOSIT GROWTH<br>$ in Millions<br>DEPOSIT COMPOSITION<br>CORE DEPOSIT GROWTH OUTPACING<br>TIME DEPOSIT CONTRACTION<br>QUARTERLY DEPOSIT GROWTH<br>21% QOQNET NEW DEPOSIT GROWTH1<br>1) Includes acquisition of SCB impact
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$542<br>$482<br>$557<br>$674<br>$1,091<br>$215 $216<br>$251 $251<br>$339<br>6.3% 6.5% 7.1% 6.9% 7.7%<br>0.0%<br>5.0%<br>10.0%<br>15.0%<br>20.0%<br>25.0%<br>30.0%<br>35.0%<br>40.0%<br>45.0%<br>50.0%<br> $-<br> $200<br> $400<br> $600<br> $800<br> $1,000<br> $1,200<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>CASH AND CASH EQUIV.SECURITIES (AFS) SECURITIES (AFS) / TOTAL ASSETS<br>10<br>LIQUIDITY UTILIZATION: MARGIN MANAGEMENT WHILE DRIVING REVENUE<br>$ in Millions<br>CASH AND SECURITIES<br>DEPLOYING EXCESS FUNDING<br>MARGIN / OPERATING REVENUE<br>14% QOQOPERATING REVENUE GROWTH<br>$ in Thousands<br>1) Based on the weighted average of the AFS securities portfolio. Yields related to investment securities exempt from income taxes are stated on a taxable-equivalent basis assuming a federal income tax rate of 21.0%<br>Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>Cash Yield 0.30% 0.35% 0.28% 0.23% 0.23%<br>Sec. Yield (AFS)1 1.91% 2.02% 2.02% 2.16% 1.89%<br>Loans (less Accr./PPP Fees) 4.25% 4.23% 4.00% 4.06% 4.21%<br>Accretion 0.16% 0.13% 0.27% 0.12% 0.28%<br>PPP Fees 0.30% 0.36% 0.40% 0.34% 0.46%<br>Loan Yield (incl. Fees) 4.71% 4.72% 4.67% 4.52% 4.95%<br>IE Asset Yield 3.88% 4.01% 3.88% 3.65% 3.67%<br>NIM (FTE) 3.39% 3.57% 3.48% 3.29% 3.35%<br>$26,043 $26,506 $26,260 $26,897<br>$30,382<br>$4,130 $4,511 $5,691 $5,143<br>$6,264<br>$30,173 $31,017 $31,951 $32,040<br>$36,646<br>3.39%<br>3.57%<br>3.48%<br>3.29%<br>3.35%<br> $-<br> $5,000<br> $10,000<br> $15,000<br> $20,000<br> $25,000<br> $30,000<br> $35,000<br> $40,000<br>2.50%<br>3.00%<br>3.50%<br>4.00%<br>4.50%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>NET INTEREST INCOME OPERATING NONINTEREST INCOME (NON-GAAP)<br>NET INTEREST MARGIN (FTE)
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11<br>NONINTEREST REVENUE DETAILS: GROWING FEE INCOME<br>OPERATING NONINTEREST INCOME1<br>CONTINUING TO STRENGTHEN<br>$ in Thousands<br>1) Non-GAAP operating non-interest income shown<br>Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>DIFFERENTIATED REVENUE STREAMS<br>BUILDING AFAMILY OF DIVERSIFIED REVENUE GENERATORS<br>$4,130<br>$4,511<br>$5,691<br>$5,143<br>$6,264<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>SERVICE CHARGES ON DEPOSIT ACCOUNTS MORTGAGE BANKING INCOME<br>INVESTMENT SERVICES INCOME INSURANCE COMMISSIONS<br>INTERCHANGE FEES OTHER NONINTEREST INCOME
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64% 63%<br>61%<br>65%<br>64%<br>62%<br>61% 60%<br>63%<br>62%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>EFFICIENCY RATIO OPERATING EFFICIENCY RATIO (NON-GAAP)<br>$18,877 $19,251 $19,361<br>$20,425<br>$22,845<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>SALARIES & BENEFITS OCCUPANCY & EQUIPMENT<br>DATA PROCESSING & TECHNOLOGY PROFESSIONAL SERVICES<br>AMORTIZATION OF INTANGIBLES OTHER NONINTEREST EXPENSE<br>12 1) Non-GAAP operating non-interest expense shown<br>Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>OPERATING EXPENSE: INVESTING IN GROWTH<br>EFFICIENCY RATIO<br>EXECUTING ON MARKET EXPANSION OPPORTUNITIES<br>OPERATING NONINTEREST EXPENSE1<br>ELEVATED EXPENSES RELATED TO<br>ACQUISITION AND LIFT-OUTS<br>$ in Thousands
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Enhanced work<br>from home<br>security upgrade<br>Q1 2021<br>Branch network<br>modernization<br>Q2 2021<br>13<br>Digital consumer<br>deposit<br>origination<br>upgrade<br>Q2 2021<br>nCino commercial<br>loan origination<br>platform upgrade<br>Q1 2022<br>Q2 2021<br>Online mortgage<br>origination<br>enhancements<br>Q1 2021<br>Work from home<br>technology<br>upgrade<br>Q2 2021<br>Cloud-based<br>Contact Center<br>Enhanced cyber<br>security<br>technology<br>Q2 2021<br>OPERATING EXPENSE: TECHNOLOGY INVESTMENT<br>INVESTING IN OUR PLATFORM TO MAKE SMARTBANK AN EASIER ORGANIZATION WITH WHICH TO DO BUSINESS<br>Digital<br>Transformation<br>Plan, led by new<br>Chief Information<br>Officer<br>Q3 2020<br>Q2 2021<br>Telecommunications<br>management<br>upgrade<br>Q3 2021<br>Redesigned<br>smartbank.com<br>Core OS platform<br>upgrade<br>Q4 2021<br>ATM fleet<br>replacement with<br>ITM upgrade<br>Q3 2022<br>Teller<br>modernization<br>bank-wide<br>Q2 2022<br>Q3 2022<br>Commercial online<br>account origination<br>Q2 2022<br>Digital marketing<br>platform upgrade<br>Q1 2022<br>Treasury<br>Management<br>platform upgrade<br>Q2 2022<br>Centralized bank<br>application support<br>team<br>Data analytics<br>platform<br>implementation<br>Q2 2022<br>$ PAY
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$6,180<br>$10,401 $10,180<br>$6,456 $6,059<br>0.18%<br>0.31% 0.29%<br>0.18% 0.14%<br>-0. 10%<br>0.10%<br>0.30%<br>0.50%<br>0.70%<br>0.90%<br>1.10%<br>1.30%<br>1.50%<br> $-<br> $2,000<br> $4,000<br> $6,000<br> $8,000<br> $10,000<br> $12,000<br> $14,000<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>NONPERFORMING LOANS OREO & OTHER REPOS NONPERFORMING ASSETS / TOTAL ASSETS<br>$6,089<br>$9,606<br>$11,756<br>$6,699<br>$7,768<br>0.25%<br>0.40%<br>0.47%<br>0.27% 0.29%<br>-0. 10%<br>0.10%<br>0.30%<br>0.50%<br>0.70%<br>0.90%<br>1.10%<br>1.30%<br>1.50%<br> $-<br> $2,000<br> $4,000<br> $6,000<br> $8,000<br> $10,000<br> $12,000<br> $14,000<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>TOTAL DELINQUENT & NONACCRUAL LOANS & LEASES<br>TOTAL DELINQUENT & NONACCRUAL LOANS & LEASES / TOTAL LOANS & LEASES<br>0.29%<br>0.44%<br>0.39%<br>0.29%<br>0.36%<br>0.01%<br>0.08%<br>0.01% 0.01% 0.03%<br>0.00%<br>0.05%<br>0.10%<br>0.15%<br>0.20%<br>0.25%<br>0.30%<br>0.35%<br>0.40%<br>0.45%<br>0.50%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>CLASSIFIED LOANS AND LEASES / TOTAL LOANS & LEASES NET CHARGEOFFS<br>275% 265% 275%<br>299% 295%<br>89% 89% 90% 94% 89%<br>0%<br>50%<br>100%<br>150%<br>200%<br>250%<br>300%<br>350%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>CRE LOANS / CAPITAL C&D LOANS / CAPITAL<br>14<br>CREDIT QUALITY<br>DELINQUENT AND NONACCRUALS / TOTAL LOANS NONPERFORMING ASSETS<br>COMMERCIAL REAL ESTATE CONCENTRATION<br>ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS<br>$ in Thousands
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15<br>PAYCHECK PROTECTION PROGRAM (“PPP”): WINDING DOWN<br>Note: As of 9/30/21<br>Originated Acquired O/S Balance Forgiven<br># of Loans 2,957 25 40 2,942<br>% of Total 1% 99%<br>Total Loan Balance 300,789 $ 2,208 $ 3,894 $ 299,103 $<br>% of Total 1% 99%<br>Total Fees 10,068 $ - $<br>Originated Acquired O/S Balance Forgiven<br># of Loans 1,801 - 1,086 715<br>% of Total 60% 40%<br>Total Loan Balance 138,398 $ - $ 83,215 $ 55,183 $<br>% of Total 60% 40%<br>Total Fees 7,035 $ 3,783 $<br>2020 PPP Vintage<br>2021 PPP Vintage<br>PPP Remaining<br>Balance, 60%<br>PPP Forgiven,<br>40%<br>PPP Remaining<br>Balance, 1%<br>PPP Forgiven,<br>99%
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16<br>RESERVE RECONCILIATION:<br>$ in Thousands<br>$18,817 $18,346 $18,370 $18,310 $19,295<br>$15,141 $14,467<br>$12,951 $12,982 $13,001<br>1.00% 0.96% 0.91% 0.86%<br>0.76%<br>0.00%<br>0.50%<br>1.00%<br>1.50%<br>2.00%<br> $-<br> $2,000<br> $4,000<br> $6,000<br> $8,000<br> $10,000<br> $12,000<br> $14,000<br> $16,000<br> $18,000<br> $20,000<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>ALLOWANCE FOR LOAN LOSSES ACQUIRE LOAN FAIR VALUE DISCOUNTS ALLOWANCE -ORIGINATED / ORIG. L&L, LESS PPP<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>Allowance / Total Loans & Leases ("L&L") 0.78% 0.77% 0.74% 0.74% 0.73%<br>Allowance / Total L&L, less PPP 0.89% 0.88% 0.85% 0.80% 0.75%<br>Allowance - Originated / Orig. L&L, less PPP 1.00% 0.96% 0.91% 0.86% 0.76%<br>Allowance - Acquired / Acquired L&L 0.49% 0.49% 0.57% 0.47% 0.74%<br>Acquired FV Discount / Acquired L&L 3.53% 3.76% 3.74% 3.61% 2.48%<br>Total Reserves / Total L&L 1.41% 1.38% 1.26% 1.27% 1.22%<br>Total Reserves / Total L&L, less PPP 1.61% 1.57% 1.46% 1.37% 1.26%
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8.0%<br>8.4% 8.0% 7.9%<br>7.5%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>11.3% 11.6% 11.3%<br>10.6% 10.9%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>8.8% 8.7% 8.6%<br>8.1% 8.4%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>13.8% 14.1% 13.6%<br>12.8% 12.9%<br>3Q20 4Q20 1Q21 2Q21 3Q21<br>$13.90<br>$14.64<br>$16.82<br>$17.92<br>$18.39 $18.69 $19.03<br> $5.00<br> $7.00<br> $9.00<br> $11.00<br> $13.00<br> $15.00<br> $17.00<br> $19.00<br> $21.00<br>2017Y 2018Y 2019Y 2020Y 1Q21 2Q21 3Q21<br>TANGIBLE BOOK VALUE<br>CAPITAL: WELL CAPITALIZED –BUILDING BOOK VALUE<br>17 1) Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>Note: Capital ratio data as of the most recent period ended 9/30/21<br>TCE / TA1<br>CET1 RATIO TOTAL CAPITAL RATIO<br>LEVERAGE RATIO<br>BASEL III REGULATORY CAPITAL MINIMUM TOBECONSIDERED “WELL CAPITALIZED”<br>9%<br>CAGR ’17 –’21<br>BUILDING SHAREHOLDER VALUE<br>TANGIBLE BOOK VALUE PER SHARE1<br>$0.06<br>QUARTERLY DIVIDEND<br>$5.13<br>TBV PER SHARE1<br>CREATED ’17 –‘ 21<br>5%<br>WELL<br>CAPITALIZED<br>10%<br>WELL<br>CAPITALIZED<br>6.5%<br>WELL<br>CAPITALIZED<br>1
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WHY SMARTBANK: INVESTMENT HIGHLIGHTS<br>18<br>FRANCHISE SCARCITY VALUE –BUILDING SOUTHEAST DENSITY<br>ENGAGED MANAGEMENT TEAM<br>STABLE MARKETS EXPERIENCING POPULATION EXPANSION<br>LOW-COST DEPOSIT BASE<br>GROWING BUSINESS LINES WITH REVENUE DIVERSIFICATION<br>SOLID CREDIT QUALITY AND UNDERWRITING<br>HISTORY OF DEFENDING BOOK VALUE AND DELIVERING SHAREHOLDER VALUE<br>$
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APPENDIX<br>19
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20<br>Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>INCOME STATEMENT: DETAILED THIRD QUARTER RESULTS<br>2Q21 3Q20<br>($ in thousands, except per share data) 3Q21 2Q21 3Q20 % Chg. % Chg.<br>Net Interest Income 30,382 $ 26,897 $ 26,043 $ 13% 17%<br>Provision for Loan & Lease losses 1,149 (5) 2,634<br>Noninterest Income 6,309 5,143 4,121 23% 53%<br>Noninterest Expense 23,309 20,797 19,167 12% 22%<br>Income Tax Expense 2,633 2,470 1,968<br>Net Income (GAAP) 9,600 $ 8,778 $ 6,395 $ 9% 50%<br>Non-GAAP Reconciliations<br>Noninterest Income (45) - 9<br>Noninterest Expense 464 372 290<br>Income Tax Effect Of Adjustments (108) (96) (77)<br>Operating Earnings (Non-GAAP) 9,911 $ 9,054 $ 6,617 $ 9% 50%<br>Operating PTPP Earnings (Non-GAAP) 13,801 $ 11,615 $ 11,296 $ 19% 22%<br>2Q21 3Q20<br>Non-GAAP Performance Metrics 3Q21 2Q21 3Q20 % Chg. % Chg.<br>Diluted Operating Earnings Per Share 0.63 $ 0.60 $ 0.44 $ 6% 42%<br>Tangible Book Value Per Common Share 19.03 $ 18.69 $ 17.27 $ 2% 10%<br>Operating Return on Average Assets 1.00% 1.01% 0.79% (1bps) 21bps<br>Operating PTPP Return on Average Assets 1.39% 1.30% 1.35% 9bps 5bps<br>Operating Return on Average Tang. Common Equity 13.3% 12.9% 10.1% 0% 3%<br>Operating Efficiency Ratio 62.1% 63.5% 62.3% (1%) (0%)<br>3Q21 vs.<br>3Q21 vs.
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NON-GAAP RECONCILIATION<br>21<br>$ in Thousands, except per share data<br>1. Note:“ADECA” represents a loan program<br>administered by the Alabama Department of<br>Economic and Community Affairs<br>2. Operating return on average assets (Non-GAAP) is<br>the annualized operating earnings (Non-GAAP)<br>divided by average assets.<br>3. Operating PTPP return on average assets (Non-<br>GAAP) is the annualized operating PTPP earnings<br>(Non-GAAP) divided by average assets.<br>4. Return on average tangible common equity (Non-<br>GAAP) is the annualized net income divided by<br>average tangible common equity (Non-GAAP).<br>5. Operating return on average shareholders’ equity<br>(Non-GAAP) is the annualized operating earnings<br>(Non-GAAP) divided by average shareholder<br>equity.<br>6. Operating return on average tangible common<br>equity (Non-GAAP) is the annualized operating<br>earnings (Non-GAAP) divided by average tangible<br>common equity (Non-GAAP).<br>3Q21 2Q21 1Q21 4Q20 3Q20<br>Operating Earnings<br>Net Income (GAAP) 9,600 $ 8,778 $ 9,756 $ 9,030 $ 6,395 $<br>Noninterest Income:<br>Securities (Gains) Losses (45) - - - 9<br>ADECA Termination Proceeds(1) - - - (465) -<br>Noninterest Expenses:<br>Merger Related And Restructuring Expenses 464 372 103 702 290<br>Income Taxes:<br>Income Tax Effect Of Adjustments (108) (96) (27) (62) (77)<br>Operating Earnings (Non-GAAP) 9,911 $ 9,054 $ 9,832 $ 9,205 $ 6,617 $<br>Operating Earnings Per Common Share:<br>Basic 0.64 $ 0.60 $ 0.65 $ 0.61 $ 0.44 $<br>Diluted 0.63 0.60 0.65 0.61 0.44<br>Operating Noninterest Income<br>Noninterest Income (GAAP) 6,309 $ 5,143 $ 5,691 $ 4,976 $ 4,121 $<br>Securities (Gain) Losses (45) - - - 9<br>ADECA Termination Proceeds - - - (465) -<br>Operating Noninterest Income (Non-GAAP) 6,264 $ 5,143 $ 5,691 $ 4,511 $ 4,130 $<br>Operating Noninterest Expense<br>Noninterest Expense (GAAP) 23,309 $ 20,797 $ 19,464 $ 19,953 $ 19,167 $<br>Merger Related And Restructuring Expenses (464) (372) (103) (702) (290)<br>Operating Noninterest Expense (Non-GAAP) 22,845 $ 20,425 $ 19,361 $ 19,251 $ 18,877 $<br>Operating Pre-Tax Pre-Provison ("PTPP") Earnings<br>Net Interest Income (GAAP) 30,382 $ 26,897 $ 26,260 $ 26,506 $ 26,043 $<br>Operating Noninterest Income (Non-GAAP) 6,264 5,143 5,691 4,511 4,130<br>Operating Noninterest Expense (Non-GAAP) (22,845) (20,425) (19,361) (19,251) (18,877)<br>Operating PTPP Earnings (Non-GAAP) 13,801 $ 11,615 $ 12,590 $ 11,766 $ 11,296 $<br>Non-GAAP Return Ratios<br>Operating Return On Average Assets (Non-GAAP)(2) 1.00% 1.01% 1.19% 1.14% 0.79%<br>Operating PTPP Return On Average Assets (Non-GAAP)(3) 1.39% 1.30% 1.52% 1.45% 1.35%<br>Return On Average Tangible Common Equity (Non-GAAP)(4) 12.84% 12.54% 14.41% 13.43% 9.72%<br>Operating Return On Average Shareholders' Equity (Non-GAAP)(5) 10.01% 9.83% 11.05% 10.34% 7.57%<br>Operating Return On Average Tangible Common Equity (Non-GAAP)(6) 13.26% 12.93% 14.53% 13.69% 10.06%<br>Operating Efficiency Ratio<br>Efficiency Ratio (GAAP) 63.53% 64.91% 60.92% 63.38% 63.54%<br>Adjustment For Taxable Equivalent Yields (0.25%) (0.30%) (0.28%) (0.30%) (0.32%)<br>Adjustment For Securities Gains (Losses) (0.08%) --- 0.02%<br>Adjustment For Merger Expenses (1.11%) (1.15%) (0.32%) (2.22%) (0.99%)<br>Operating Efficiency Ratio (Non-GAAP) 62.09% 63.46% 60.32% 60.86% 62.25%
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NON-GAAP RECONCILIATION<br>22<br>$ in Thousands, except per share data<br>1. Book value per share is computed by dividing total<br>stockholders’ equity by common shares<br>outstanding. Tangible book value per share is<br>computed by dividing total stockholders’ equity,<br>less goodwill and other intangible assets by<br>common shares outstanding<br>3Q21 2Q21 1Q21 4Q20 3Q20<br>Tangible Common Equity:<br>Shareholders' Equity (GAAP) 424,720 $ 373,393 $ 364,058 $ 357,168 $ 349,789 $<br>Less Goodwill And Other Intangible Assets 104,930 90,966 86,350 86,471 86,710<br>Tangible Common Equity (Non-GAAP) 319,790 $ 282,427 $ 277,708 $ 270,697 $ 263,079 $<br>Average Tangible Common Equity:<br>Average Shareholders' Equity (GAAP) 392,798 $ 369,325 $ 360,919 $ 354,026 $ 347,907 $<br>Less Goodwill And Other Intangible Assets 96,250 88,551 86,424 86,561 86,206<br>Average Tangible Common Equity (Non-GAAP) 296,548 $ 280,774 $ 274,495 $ 267,465 $ 261,701 $<br>Tangible Book Value Per Common Share:<br>Book Value Per Common Share (GAAP) 25.28 $ 24.71 $ 24.10 $ 23.64 $ 22.96 $<br>Adjustment Due To Goodwill And Other Intangible Assets (6.25) (6.02) (5.71) (5.72) (5.69)<br>Tangible Book Value Per Common Share (Non-GAAP)(1) 19.03 $ 18.69 $ 18.39 $ 17.92 $ 17.27 $<br>Tangible Common Equity To Tangible Assets:<br>Total Assets 4,384,031 $ 3,654,356 $ 3,557,203 $ 3,304,949 $ 3,387,588 $<br>Less Goodwill And Other Intangibles 104,930 90,966 86,350 86,471 86,710<br>Tangible Assets (Non-GAAP) 4,279,101 $ 3,563,390 $ 3,470,853 $ 3,218,478 $ 3,300,878 $<br>Tangible Common Equity To Tangible Assets (Non-GAAP): 7.47% 7.93% 8.00% 8.41% 7.97%
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CONTACT<br>23<br>BILLY CARROLL<br>PRESIDENT & CEO<br>865.868.0613<br>BILLY.CARROLL@SMARTBANK.COM<br>MILLER WELBORN<br>CHAIRMAN<br>423.385.3067<br>MILLER.WELBORN@SMARTBANK.COM<br>5401 KINGSTON PIKE, SUITE 600<br>KNOXVILLE, TN 37919<br>RON GORCZYNSKI<br>CHIEF FINANCIAL OFFICER<br>865.437.5724<br>RON.GORCZYNSKI@SMARTBANK.COM
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24
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