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: July 24, 2023

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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:

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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 July 24, 2023, SmartFinancial, Inc. (“SmartFinancial”) issued a press release (the “Press Release”) reporting earnings results for its second quarter ending June 30, 2023. 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 July 25, 2023. 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
​	​	​
Exhibit No.		Description
99.1	​	Press release announcing second quarter 2023 financial results dated July 24, 2023
99.2	​	Second quarter 2023 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: July 24, 2023
	/s/ William Y. Carroll, Jr.
	William Y. Carroll, Jr.
	President & Chief Executive Officer

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Exhibit 99.1

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2Q 2023

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SmartFinancial Announces Results for the Second Quarter 2023

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Highlights for the Second Quarter of 2023

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●	Operating earnings^1^ of $8.8 million, or $0.52 per diluted common share
●	Net organic loan and lease growth of $56 million - 7% annualized quarter-over-quarter increase
---	---
●	Credit quality remains solid with nonperforming assets to total assets of 0.12%
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●	Addition of seasoned wealth management team in Dothan, Alabama
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●	Stability in deposit mix with 24% non-interest bearing accounts
---	---

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KNOXVILLE, TN – July 24, 2023 - SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NASDAQ: SMBK), today announced net income of $8.8 million, or $0.52 per diluted common share, for the second quarter of 2023, compared to net income of $10.2 million, or $0.61 per diluted common share, for the second quarter of 2022, and compared to prior quarter net income of $11.5 million, or $0.68 per diluted common share.  Operating earnings^1^, which excludes securities gains and merger related and restructuring expenses, net of tax adjustments, totaled $8.8 million, or $0.52 per diluted common share, in the second quarter of 2023, compared to $10.3 million, or $0.61 per diluted common share, in the second quarter of 2022, and compared to $11.5 million, or $0.68 per diluted common share, in the first quarter of 2023.

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Billy Carroll, President & CEO, stated: “I am very pleased with our results for the quarter.  While dealing with some headwinds related to deposit pricing, this quarter showed the strength of our Balance Sheet with our ability to fund with our core base.  We’ve continued to focus on expenses without sacrificing investments for the future, and the quarter also allowed us some outstanding opportunities to gain strong client relationships.  We continue to be bullish as we look forward.”

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SmartFinancial's Chairman, Miller Welborn, concluded: " The second quarter of 2023 shows further evidence of the strength of our company. Our entire team performed very well and executed our Strategic Plan effectively. I am as confident as ever that the economic environment in our southeastern markets remains very strong and our bank will continue to thrive in the months ahead.”

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Net Interest Income and Net Interest Margin

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Net interest income was $31.6 million for the second quarter of 2023, compared to $36.0 million for the prior quarter.  Average earning assets totaled $4.34 billion, a decrease of $86.4 million from the prior quarter.  The decrease in average earnings assets was primarily driven by a decrease in average interest-earning cash of $183.0 million, offset by an increase in average loans and leases of $50.1 million and average securities of $46.5 million.  Average interest-bearing liabilities decreased $34.1 million from the prior quarter, primarily attributable to a decrease in average deposits.

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The tax equivalent net interest margin was 2.93% for the second quarter of 2023, compared to 3.31% for the prior quarter, which included $1.4 million in fees from the payoff of an acquired loan. The tax equivalent net interest margin was negatively impacted by the continued rise in the cost of interest-bearing liabilities from rising rates and increased pricing competition.  The yield on loans and leases, excluding loan fees was 5.39% for the second quarter, compared to 5.20% for the prior quarter.

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The cost of total deposits for the second quarter of 2023 was 1.89% compared to 1.56% in the prior quarter. The cost of interest-bearing liabilities increased to 2.53% for the second quarter of 2023 compared to 2.12% for the prior quarter. The cost of average interest-bearing deposits was 2.46% for the second quarter of 2023 compared to 2.05% for the prior quarter, an increase of 41 basis points.  The increase in the cost of deposits is due to an increase in interest rates, customer migration to higher rate deposit products and increased competition for deposits.

^1^ Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP reconciliation

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

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​	​	​	​	​	​	​	​
​	​	Three Months Ended			​	​	​
​	​	Jun	​	Mar	​	Increase	​
Selected Interest Rates and Yields	​	2023	​	2023	​	(Decrease)	​
Yield on loans and leases, excluding loan fees	​	5.39	%	5.20	%	0.19	%
Yield on loans and leases	​	5.51	%	5.57	%	(0.06)	%
Yield on earning assets, on a fully tax equivalent basis (FTE)	​	4.82	%	4.88	%	(0.06)	%
Cost of interest-bearing deposits	​	2.46	%	2.05	%	0.41	%
Cost of total deposits	​	1.89	%	1.56	%	0.33	%
Cost of interest-bearing liabilities	​	2.53	%	2.12	%	0.41	%
Net interest margin, FTE	​	2.93	%	3.31	%	(0.38)	%

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Provision for Credit Losses on Loans and Leases and Credit Quality

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At June 30, 2023, the allowance for credit losses was $32.7 million.  The allowance for credit losses to total loans and leases was 0.98% as of June 30, 2023, and March 31, 2023, respectively.

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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					​	​	​	​
​	​	​	​	Jun	​	​	Mar	​	​	​	​
​	Provision for Credit Losses on Loans and Leases Rollforward	​	​	2023	​	​	2023	​	​	Change	​
​	Beginning balance	​	$	32,279	​	$	23,334	​	$	8,945	​
​	Adoption of ASU 2016-13	​	​	-	​	​	8,655	​	​	(8,655)	​
​	Adjusted beginning balance	​	​	32,279	​	​	31,989	​	​	290	​
​	Charge-offs	​	​	(207)	​	​	(315)	​	​	108	​
​	Recoveries	​	​	255	​	​	55	​	​	200	​
​	Net (charge-offs) recoveries	​	​	48	​	​	(260)	​	​	308	​
​	Provision for credit losses ^(1)^	​	​	420	​	​	550	​	​	(130)	​
​	Ending balance	​	$	32,747	​	$	32,279	​	$	468	​
​	​	​	​	​	​	​	​	​	​	​	​
​	Allowance for credit losses to total loans and leases, gross	​	​	0.98	%	​	0.98	%	​	-	%

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(1)	The current quarter-ended, excludes unfunded commitments release of $307 thousand.  At June 30, 2023, the unfunded commitment liability totaled $2.8 million.

Nonperforming loans and leases as a percentage of total loans and leases was 0.11% as of June 30, 2023, an increase of 1 basis point from the 0.10% reported in the first quarter of 2023.  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 0.12% as of June 30, 2023, as compared to 0.11% as of March 31, 2023.

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

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​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	Three Months Ended					​	​	​	​
​	​	​	​	Jun	​	​	Mar	​	​	Increase	​
​	Credit Quality	​	​	2023	​	​	2023	​	​	(Decrease)	​
​	Nonaccrual loans and leases	​	$	3,722	​	$	3,247	​	$	475	​
​	Loans and leases past due 90 days or more and still accruing	​	​	-	​	​	-	​	​	-	​
​	Total nonperforming loans and leases	​	​	3,722	​	​	3,247	​	​	475	​
​	Other real estate owned	​	​	1,708	​	​	1,708	​	​	-	​
​	Other repossessed assets	​	​	282	​	​	66	​	​	216	​
​	Total nonperforming assets	​	$	5,712	​	$	5,021	​	$	691	​
​	​	​	​	​	​	​	​	​	​	​	​
​	Nonperforming loans and leases to total loans and leases, gross	​	​	0.11	%	​	0.10	%	​	0.01	%
​	Nonperforming assets to total assets	​	​	0.12	%	​	0.11	%	​	0.01	%

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Noninterest Income

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Noninterest income increased $205 thousand to $7.1 million for the second quarter of 2023 compared to $6.9 million for the prior quarter.  During the second quarter of 2023, the primary components of the changes in noninterest income were as follows:

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●	Increase in investment services, income increase led by the new Dothan, Alabama advisory team;
●	Decrease in insurance commissions, driven by annual contingency payments in the prior quarter; and
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●	Decrease in other, primarily related to decreased fees from capital markets activity and equipment leasing fees.
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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					​	​	​
​	​	​	Jun	​	​	Mar	​	​	Increase
Noninterest Income	​	​	2023	​	​	2023	​	​	(Decrease)
Service charges on deposit accounts	​	$	1,657	​	$	1,445	​	$	212
Mortgage banking income	​	​	332	​	​	172	​	​	160
Investment services	​	​	1,300	​	​	1,005	​	​	295
Insurance commissions	​	​	1,139	​	​	1,259	​	​	(120)
Interchange and debit card transaction fees	​	​	1,347	​	​	1,383	​	​	(36)
Other	​	​	1,355	​	​	1,661	​	​	(306)
Total noninterest income	​	$	7,130	​	$	6,925	​	$	205

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Noninterest Expense

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Noninterest expense decreased $119 thousand to $27.4 million for the second quarter of 2023 compared to $27.5 million for the prior quarter. During the second quarter of 2023, the primary components of the changes in noninterest expense were as follows:

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●	Decrease in salaries and employee benefits, primarily as a result of an adjustment to the bank’s incentive accrual;
●	Increase in FDIC insurance, related to assessment rate increase; and
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●	Increase in other, primarily related to an increase in seasonal expenses and disposal of some IT equipment.
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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					​	​	​
​	​	​	Jun	​	​	Mar	​	​	Increase
Noninterest Expense	​	​	2023	​	​	2023	​	​	(Decrease)
Salaries and employee benefits	​	$	15,947	​	$	16,742	​	$	(795)
Occupancy and equipment	​	​	3,318	​	​	3,208	​	​	110
FDIC insurance	​	​	875	​	​	541	​	​	334
Other real estate and loan related expenses	​	​	441	​	​	572	​	​	(131)
Advertising and marketing	​	​	305	​	​	355	​	​	(50)
Data processing and technology	​	​	2,235	​	​	2,163	​	​	72
Professional services	​	​	764	​	​	807	​	​	(43)
Amortization of intangibles	​	​	675	​	​	659	​	​	16
Merger related and restructuring expenses	​	​	-	​	​	-	​	​	-
Other	​	​	2,850	​	​	2,482	​	​	368
Total noninterest expense	​	$	27,410	​	$	27,529	​	$	(119)

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Income Tax Expense

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Income tax expense was $2.3 million for the second quarter of 2023, a decrease of $982 thousand, compared to $3.3 million for the prior quarter.

The effective tax rate was 20.98% for the second quarter of 2023 and 22.44% for the prior quarter.

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Balance Sheet Trends

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Total assets at June 30, 2023 were $4.75 billion compared to $4.64 billion at December 31, 2022.  The $108.3 million increase is primarily attributable to increases in loans and leases of $84.2 million, securities of $54.0 million and other assets of $9.2 million.  Asset increases were offset by a decrease in cash and cash equivalents of $27.5 million and an increase in the allowance for credit losses of $9.4 million, primarily for the one-time adjustment of $8.7 million related to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit losses on Financial Instruments (“ASU 2016-13”) on January 1, 2023.

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Total liabilities increased to $4.30 billion at June 30, 2023 from $4.21 billion at December 31, 2022.  The increase of $95.9 million was primarily from organic deposit growth of $122.5 million, offset by a decrease in borrowings of $26.4 million.

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Shareholders' equity at June 30, 2023 totaled $444.8 million, an increase of $12.4 million, from December 31, 2022.  The increase in shareholders' equity was primarily driven by net income of $20.3 million for the six months ended June 30, 2023, offset by the impact of the adoption of ASU 2016-13 on January 1, 2023, of $6.6 million (net of taxes), and dividends paid of $2.7 million.  Tangible book value per share^1^ was $19.78 at June 30, 2023, compared to $19.09 at December 31, 2022.  Tangible common equity^1^ as a percentage of tangible assets^1^ was 7.25% at June 30, 2023, compared with 7.13% at December 31, 2022.

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

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​	​	​	​	​	​	​	​	​	​	​
​	​	Jun		​	Dec		​	Increase		​
Selected Balance Sheet Information	​	2023		​	2022		​	(Decrease)		​
Total assets	​	$	4,745,800	​	$	4,637,498	​	$	108,302	​
Total liabilities	​	​	4,300,953	​	​	4,205,046	​	​	95,907	​
Total equity	​	​	444,847	​	​	432,452	​	​	12,395	​
Securities	​	​	823,872	​	​	769,842	​	​	54,030	​
Loans and leases	​	​	3,337,790	​	​	3,253,627	​	​	84,163	​
Deposits	​	​	4,199,584	​	​	4,077,100	​	​	122,484	​
Borrowings	​	​	15,496	​	​	41,860	​	​	(26,364)	​

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^1^ Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP reconciliation

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4

Conference Call Information

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SmartFinancial issued this earnings release for the second quarter of 2023 on Monday, July 24, 2023, and will host a conference call on Tuesday, July 25, 2023, at 10:00 a.m. ET.  To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and entering the access code, 194833.  A replay of the conference call will be available through June 24, 2023, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 504346.  Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 a.m. ET prior to the conference call.

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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 and merger related and restructuring expenses.  Operating return on average assets is the annualized operating earnings (Non-GAAP) divided by average assets.  Operating pre-tax pre-provision return on average assets is the annualized operating pre-tax pre-provision income earnings (Non-GAAP) by average assets. Operating return on average shareholders' equity is the annualized operating earnings (Non-GAAP) divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity (Non-GAAP). Operating return on average tangible common equity is the annualized operating earnings (Non-GAAP) 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.  Operating pre-tax pre-provision earnings is net interest income plus operating noninterest income (Non-GAAP) less operating noninterest expense (Non-GAAP).  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 (Non-GAAP) and average tangible common equity (Non-GAAP) excludes goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively.  Tangible book value (Non-GAAP) is tangible common equity (Non-GAAP) divided by common shares outstanding.  Tangible assets (Non-GAAP) 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 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) changes in management’s plans for the future; (7) prevailing, or changes in, economic or political conditions, particularly in our market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; (8) increased technology and cybersecurity risks, including generative artificial intelligence risks; (9) credit risk associated with our lending activities; (10) changes in loan demand, real estate values, or competition; (11) developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; (12) changes in accounting principles, policies, or guidelines; (13) changes in applicable laws, rules, or regulations; (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 and related variants; (15) potential impacts of the recent adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; (16) significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; (17) the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine; and (18) 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
​	​	Jun			Mar			Dec			Sep			Jun
​	​	2023		​	2023		​	2022		​	2022		​	2022
Assets:	​	​	​		​			​			​			​
Cash and cash equivalents	​	$	238,898	​	$	306,934	​	$	266,424	​	$	543,029	​	$	654,945
Securities available-for-sale, at fair value	​		540,308	​		560,418	​		483,893	​		519,723	​		524,864
Securities held-to-maturity, at amortized cost	​	​	283,564	​	​	284,776	​	​	285,949	​	​	287,104	​	​	288,363
Other investments	​		14,396	​		14,059	​		15,530	​		15,528	​		16,569
Loans held for sale	​		986	​		3,324	​		1,752	​		2,742	​		1,707
Loans and leases	​		3,337,790	​		3,281,787	​		3,253,627	​		3,099,116	​		2,994,074
Less: Allowance for credit losses	​		(32,747)	​		(32,279)	​		(23,334)	​		(22,769)	​		(21,938)
Loans and leases, net	​		3,305,043	​		3,249,508	​		3,230,293	​		3,076,347	​		2,972,136
Premises and equipment, net	​		92,351	​		92,190	​		92,511	​		91,944	​		89,950
Other real estate owned	​		1,708	​		1,708	​		1,436	​		1,226	​		1,612
Goodwill and other intangibles, net	​		108,439	​		109,114	​		109,772	​		110,460	​		104,582
Bank owned life insurance	​		82,419	​		81,938	​		81,470	​		81,001	​		80,537
Other assets	​		77,688	​		65,836	​		68,468	​		67,807	​		52,848
Total assets	​	$	4,745,800	​	$	4,769,805	​	$	4,637,498	​	$	4,796,911	​	$	4,788,113
Liabilities:	​			​			​			​			​
Deposits:	​			​			​			​			​
Noninterest-bearing demand	​	$	1,003,432	​	$	989,753	​	$	1,072,449	​	$	1,186,209	​	$	1,162,843
Interest-bearing demand	​		938,758	​		989,738	​		965,911	​		962,901	​		999,893
Money market and savings	​		1,720,202	​		1,761,847	​		1,583,481	​		1,663,355	​		1,607,714
Time deposits	​		537,192	​		488,208	​		455,259	​		467,944	​		511,182
Total deposits	​		4,199,584	​		4,229,546	​		4,077,100	​		4,280,409	​		4,281,632
Borrowings	​		15,496	​		16,546	​		41,860	​		18,423	​		12,549
Subordinated debt	​		42,057	​		42,036	​		42,015	​		41,994	​		41,973
Other liabilities	​		43,816	​		38,278	​		44,071	​		41,374	​		31,532
Total liabilities	​		4,300,953	​		4,326,406	​		4,205,046	​		4,382,200	​		4,367,686
Shareholders' Equity:	​		​	​		​	​		​	​		​	​		​
Common stock	​		17,004	​		17,004	​		16,901	​		16,888	​		16,898
Additional paid-in capital	​		295,296	​		294,930	​		294,330	​		293,907	​		293,815
Retained earnings	​		167,564	​		160,085	​		156,545	​		144,723	​		134,362
Accumulated other comprehensive income (loss)	​		(35,017)	​		(28,620)	​		(35,324)	​		(40,807)	​		(24,648)
Total shareholders' equity	​		444,847	​		443,399	​		432,452	​		414,711	​		420,427
Total liabilities & shareholders' equity	​	$	4,745,800	​	$	4,769,805	​	$	4,637,498	​	$	4,796,911	​	$	4,788,113

​

​

​

​

8

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands except share and per share data)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	Three Months Ended															Six Months Ended
​	Jun			Mar			Dec			Sep			Jun			Jun			Jun
​	2023		​	2023		​	2022		​	2022		​	2022		​	2023		​	2022
Interest income:	​			​			​			​			​		​	​	​	​	​	​
Loans and leases, including fees	$	45,446	​	$	44,728	​	$	40,082	​	$	35,127	​	$	31,530	​	$	90,173	​	$	61,172
Investment securities:			​			​			​			​			​			​
Taxable		4,335	​		3,651	​		3,337	​		3,135	​		2,908	​		7,986	​		5,327
Tax-exempt		357	​		353	​		797	​		561	​		441	​		709	​		809
Federal funds sold and other earning assets		1,956	​		4,446	​		3,098	​		3,474	​		1,430	​		6,405	​		1,916
Total interest income		52,094	​		53,178	​		47,314	​		42,297	​		36,309	​		105,273	​		69,224
Interest expense:			​			​			​			​			​			​
Deposits		19,554	​		16,346	​		8,844	​		4,866	​		2,504	​		35,900	​		4,518
Borrowings		339	​		224	​		232	​		97	​		117	​		564	​		274
Subordinated debt		626	​		626	​		626	​		626	​		626	​		1,252	​		1,252
Total interest expense		20,519	​		17,196	​		9,702	​		5,589	​		3,247	​		37,716	​		6,044
Net interest income		31,575	​		35,982	​		37,612	​		36,708	​		33,062	​		67,557	​		63,180
Provision for credit losses		113	​		550	​		788	​		974	​		1,250	​		663	​		2,256
Net interest income after provision for credit losses		31,462	​		35,432	​		36,824	​		35,734	​		31,812	​		66,894	​		60,924
Noninterest income:			​			​			​			​			​			​
Service charges on deposit accounts		1,657	​		1,445	​		1,477	​		1,611	​		1,446	​		3,102	​		2,765
Gain (loss) on sale of securities, net		—	​		—	​		144	​		—	​		—	​		—	​		—
Mortgage banking		332	​		172	​		77	​		170	​		471	​		504	​		1,305
Investment services		1,300	​		1,005	​		958	​		1,051	​		1,065	​		2,305	​		2,135
Insurance commissions		1,139	​		1,259	​		1,233	​		864	​		598	​		2,398	​		1,499
Interchange and debit card transaction fees		1,347	​		1,383	​		1,328	​		1,356	​		1,467	​		2,730	​		2,751
Other		1,355	​		1,661	​		1,908	​		1,198	​		2,182	​		3,016	​		3,885
Total noninterest income		7,130	​		6,925	​		7,125	​		6,250	​		7,229	​		14,055	​		14,340
Noninterest expense:			​			​			​			​			​			​
Salaries and employee benefits		15,947	​		16,742	​		16,384	​		16,317	​		15,673	​		32,689	​		30,719
Occupancy and equipment		3,318	​		3,208	​		3,015	​		3,167	​		2,793	​		6,526	​		5,852
FDIC insurance		875	​		541	​		650	​		705	​		676	​		1,416	​		1,317
Other real estate and loan related expense		441	​		572	​		517	​		565	​		636	​		1,013	​		1,365
Advertising and marketing		305	​		355	​		308	​		288	​		327	​		660	​		697
Data processing and technology		2,235	​		2,163	​		2,097	​		1,872	​		1,728	​		4,398	​		3,314
Professional services		764	​		807	​		981	​		822	​		745	​		1,572	​		1,987
Amortization of intangibles		675	​		659	​		688	​		650	​		633	​		1,334	​		1,270
Merger related and restructuring expenses		—	​		—	​		(45)	​		87	​		81	​		—	​		520
Other		2,850	​		2,482	​		2,821	​		2,757	​		2,634	​		5,331	​		4,602
Total noninterest expense		27,410	​		27,529	​		27,416	​		27,230	​		25,926	​		54,939	​		51,643
Income before income taxes		11,182	​		14,828	​		16,533	​		14,754	​		13,115	​		26,010	​		23,621
Income tax expense		2,346	​		3,328	​		3,529	​		3,211	​		2,900	​		5,674	​		5,146
Net income	$	8,836	​	$	11,500	​	$	13,004	​	$	11,543	​	$	10,215	​	$	20,336	​	$	18,475
Earnings per common share:			​			​			​			​			​			​
Basic	$	0.53	​	$	0.69	​	$	0.78	​	$	0.69	​	$	0.61	​	$	1.21	​	$	1.11
Diluted	$	0.52	​	$	0.68	​	$	0.77	​	$	0.68	​	$	0.61	​	$	1.20	​	$	1.10
Weighted average common shares outstanding:			​			​			​			​			​			​
Basic		16,806,389	​		16,791,406	​		16,758,706	​		16,749,255	​		16,734,930	​		16,798,939	​		16,726,696
Diluted		16,897,890	​		16,896,494	​		16,884,253	​		16,872,022	​		16,867,774	​		16,897,187	​		16,863,299

​

​

​

​

​

​

9

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	June 30, 2023							​	March 31, 2023							​	June 30, 2022
​		Average			​	​		Yield/		Average			​	​		Yield/		Average				​		Yield/
​	​	Balance		​	Interest		​	Cost	​	Balance		​	Interest		​	Cost	​	Balance		​	Interest		​	Cost
Assets:		​			​					​			​					​			​				​
Loans and leases, including fees^1^	​	$	3,308,595	​	$	45,446		5.51	%	$	3,258,452	​	$	44,728		5.57	%	$	2,872,748	​	$	31,530		4.40	%
Taxable securities	​		770,275	​		4,335		2.26	%		723,540	​		3,651		2.05	%		717,507	​		2,908		1.63	%
Tax-exempt securities^2^	​		65,265	​		452		2.78	%		65,547	​		447		2.77	%		101,585	​		609		2.40	%
Federal funds sold and other earning assets	​		195,266	​		1,956		4.02	%		378,253	​		4,446		4.77	%		628,677	​		1,430		0.91	%
Total interest-earning assets	​		4,339,401	​		52,189		4.82	%		4,425,792	​		53,272		4.88	%		4,320,517	​		36,477		3.39	%
Noninterest-earning assets	​		355,701	​		​		​	​		359,996	​					​		374,776	​					​
Total assets	​	$	4,695,102	​	​	​	​	​	​	$	4,785,788	​					​	$	4,695,293	​					​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities and Shareholders’ Equity:	​			​			​		​			​					​			​					​
Interest-bearing demand deposits	​	$	950,227	​		4,892	​	2.06	%	$	944,132	​		4,227		1.82	%	$	968,806	​		734		0.30	%
Money market and savings deposits	​		1,737,303	​		11,785	​	2.72	%		1,820,455	​		10,381		2.31	%		1,559,963	​		1,126		0.29	%
Time deposits	​		504,350	​		2,877	​	2.29	%		469,361	​		1,738		1.50	%		531,783	​		644		0.49	%
Total interest-bearing deposits	​		3,191,880	​		19,554	​	2.46	%		3,233,948	​		16,346		2.05	%		3,060,552	​		2,504		0.33	%
Borrowings	​		24,845	​		339	​	5.47	%		16,858	​		224		5.39	%		31,510	​		117		1.49	%
Subordinated debt	​		42,044	​		626	​	5.97	%		42,022	​		626		6.04	%		41,959	​		626		5.98	%
Total interest-bearing liabilities	​		3,258,769	​		20,519	​	2.53	%		3,292,828	​		17,196		2.12	%		3,134,021	​		3,247		0.42	%
Noninterest-bearing deposits	​		951,381	​		​	​	​	​		1,015,670	​					​		1,112,643	​					​
Other liabilities	​		40,669	​		​	​	​	​		44,908	​					​		28,903	​					​
Total liabilities	​		4,250,819	​		​	​	​	​		4,353,406	​					​		4,275,567	​					​
Shareholders' equity	​		444,283	​		​	​	​	​		432,382	​					​		419,726	​					​
Total liabilities and shareholders' equity	​	$	4,695,102	​	​	​	​	​	​	$	4,785,788	​					​	$	4,695,293	​					​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income, taxable equivalent	​	​	​	​	$	31,670	​	​	​			​	$	36,076			​			​	$	33,230			​
Interest rate spread	​		​	​		​	​	2.30	%			​				2.76	%			​				2.97	%
Tax equivalent net interest margin	​		​	​		​	​	2.93	%			​				3.31	%			​				3.08	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Percentage of average interest-earning assets to average interest-bearing liabilities	​		​	​		​	​	133.16	%			​				134.41	%			​				137.86	%
Percentage of average equity to average assets	​		​	​		​	​	9.46	%			​				9.03	%			​				8.94	%

​

^1^Includes average balance of $2.9 million, $3.1 million, and $34.3 million in PPP loans for the quarters ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively.

^2^Yields computed on tax-exempt instruments on a tax equivalent basis include $95 thousand, $94 thousand, and $168 thousand of taxable equivalent income for the quarters ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively.

​

​

​

10

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Six Months Ended
​	​	June 30, 2023								​	June 30, 2022							​
​		Average			​	​		Yield/			Average			​	​		Yield/
​	​	Balance		​	Interest		​	Cost		​	Balance		​	Interest		​	Cost	​
Assets:		​			​			​			​			​
Loans and leases, including fees^1^	​	$	3,283,662	​	$	90,173		​	5.54	%	$	2,800,821	​	$	61,172		4.40	%
Taxable securities	​		747,037	​		7,986		​	2.16	%		665,532	​		5,327		1.61	%
Tax-exempt securities^2^	​		65,405	​		897		​	2.77	%		103,540	​		1,142		2.22	%
Federal funds sold and other earning assets	​		286,254	​		6,405		​	4.51	%		701,850	​		1,916		0.55	%
Total interest-earning assets	​		4,382,358	​		105,461		​	4.85	%		4,271,743	​		69,557		3.28	%
Noninterest-earning assets	​		357,837	​		​		​	​	​		378,271	​					​
Total assets	​	$	4,740,195	​	​	​	​	​	​	​	$	4,650,014	​					​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities and Shareholders’ Equity:	​			​			​			​			​					​
Interest-bearing demand deposits	​	$	947,196	​		9,119	​		1.94	%	$	945,450	​		1,181		0.25	%
Money market and savings deposits	​		1,778,650	​		22,168	​		2.51	%		1,541,678	​		1,985		0.26	%
Time deposits	​		486,952	​		4,613	​		1.91	%		546,413	​		1,352		0.50	%
Total interest-bearing deposits	​		3,212,798	​		35,900	​		2.25	%		3,033,541	​		4,518		0.30	%
Borrowings	​		20,874	​		564	​		5.45	%		50,533	​		274		1.09	%
Subordinated debt	​		42,033	​		1,252	​		6.01	%		41,949	​		1,252		6.02	%
Total interest-bearing liabilities	​		3,275,705	​		37,716	​		2.32	%		3,126,023	​		6,044		0.39	%
Noninterest-bearing deposits	​		983,348	​		​	​		​	​		1,070,703	​				​	​
Other liabilities	​		42,777	​		​	​		​	​		29,475	​				​	​
Total liabilities	​		4,301,830	​		​	​		​	​		4,226,201	​				​	​
Shareholders' equity	​		438,365	​		​	​		​	​		423,813	​				​	​
Total liabilities and shareholders' equity	​	$	4,740,195	​	​	​	​	​	​	​	$	4,650,014	​				​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income, taxable equivalent	​	​	​	​	$	67,745	​	​	​	​			​	$	63,513		​	​
Interest rate spread	​		​	​		​	​		2.53	%			​				2.89	%
Tax equivalent net interest margin	​		​	​		​	​		3.12	%			​				3.00	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Percentage of average interest-earning assets to average interest-bearing liabilities	​		​	​		​	​		133.78	%			​				136.65	%
Percentage of average equity to average assets	​		​	​		​	​		9.25	%			​				9.11	%

​

^1^Includes average balance of $3.0 million and $44.1 million in PPP loans for the six months ended June 30, 2023, and 2022, respectively.

^2^Yields computed on tax-exempt instruments on a tax equivalent basis include $188 thousand and $333 thousand of taxable equivalent income for the six months ended June 20, 2023, and 2022, respectively.

​

​

​

11

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	As of and for The Three Months Ended
​		Jun			Mar			Dec			Sept			Jun
​	​	2023		​	2023		​	2022		​	2022		​	2022
Composition of Loans and Leases:		​		​	​	​	​	​	​		​			​		​
Commercial real estate:		​		​	​	​	​	​	​		​			​		​
owner occupied	​	$	769,978	​	$	764,166	​	$	765,041	​	$	714,734	​	$	684,250	​
non-owner occupied	​		871,779	​		871,368	​		862,720	​		822,317	​		850,338	​
Commercial real estate, total	​		1,641,757	​		1,635,534	​		1,627,761	​		1,537,051	​		1,534,588	​
Commercial & industrial	​		594,427	​		571,153	​		551,867	​		514,280	​		483,588	​
Construction & land development	​		394,742	​		386,253	​		402,501	​		405,007	​		364,368	​
Consumer real estate	​		624,828	​		606,343	​		587,977	​		562,408	​		533,582	​
Leases	​	​	66,401	​	​	67,701	​	​	67,427	​	​	64,798	​	​	63,264	​
Consumer and other	​		15,635	​		14,803	​		16,094	​		15,572	​		14,684	​
Total loans and leases	​	$	3,337,790	​	$	3,281,787	​	$	3,253,627	​	$	3,099,116	​	$	2,994,074	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Asset Quality and Additional Loan Data:	​			​	​	​	​	​	​	​			​			​
Nonperforming loans and leases	​	$	3,722	​	$	3,247	​	$	2,951	​	$	3,379	​	$	3,413	​
Other real estate owned	​		1,708	​		1,708	​		1,436	​		1,226	​		1,612	​
Other repossessed assets	​	​	282	​	​	66	​	​	422	​	​	—	​	​	17	​
Total nonperforming assets	​	$	5,712	​	$	5,021	​	$	4,809	​	$	4,605	​	$	5,042	​
Restructured loans and leases not included in nonperforming loans and leases	​	$	657	​	$	97	​	$	101	​	$	108	​	$	678	​
Net charge-offs to average loans and leases (annualized)	​		(0.01)	%		0.03	%		0.03	%		0.02	%		(0.09)	%
Allowance for loan and leases losses to loans and leases	​		0.98	%		0.98	%		0.72	%		0.73	%		0.73	%
Nonperforming loans and leases to total loans and leases, gross	​		0.11	%		0.10	%		0.09	%		0.11	%		0.11	%
Nonperforming assets to total assets	​		0.12	%		0.11	%		0.10	%		0.10	%		0.11	%
Acquired loan and lease fair value discount balance	​	$	—	​	$	—	​	$	13,128	​	$	14,465	​	$	14,737	​
Accretion income on acquired loans and leases	​		—	​		—	​		1,396	​		148	​		225	​
PPP net fees deferred balance	​	​	104	​	​	114	​	​	122	​	​	140	​	​	301	​
PPP net fees recognized	​	​	10	​	​	8	​	​	17	​	​	163	​	​	669	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Capital Ratios:	​			​	​	​	​	​	​	​			​			​
Equity to Assets	​		9.37	%		9.30	%		9.33	%		8.65	%		8.78	%
Tangible common equity to tangible assets (Non-GAAP)^1^	​		7.25	%		7.17	%		7.13	%		6.49	%		6.74	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
SmartFinancial, Inc.^2^	​			​	​	​	​	​	​	​			​			​
Tier 1 leverage	​		8.24	%		7.91	%		7.95	%		7.40	%		7.48	%
Common equity Tier 1	​		10.12	%		9.95	%		9.65	%		9.65	%		9.95	%
Tier 1 capital	​		10.12	%		9.95	%		9.65	%		9.65	%		9.95	%
Total capital	​		11.94	%		11.77	%		11.40	%		11.44	%		11.80	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
SmartBank	​	****	Estimated^3^	​	​	​	​	​	​	​			​			​
Tier 1 leverage	​		9.18	%		8.87	%		8.90	%		8.27	%		8.33	%
Common equity Tier 1	​		11.27	%		11.15	%		10.82	%		10.78	%		11.08	%
Tier 1 capital	​		11.27	%		11.15	%		10.82	%		10.78	%		11.08	%
Total capital	​		11.97	%		11.85	%		11.44	%		11.41	%		11.72	%

​

^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																Six Months Ended					​
​	Jun			Mar			Dec			Sept			Jun			​	Jun			Jun		​
​	2023		​	2023		​	2022		​	2022		​	2022		​	​	2023		​	2022		​
Selected Performance Ratios (Annualized):	​			​			​			​			​		​	​	​		​	​		​
Return on average assets	​	0.75	%	​	0.97	%	​	1.11	%	​	0.95	%	​	0.87	%	​	​	0.87	%	​	0.80	%
Return on average shareholders' equity	​	7.98	%	​	10.79	%	​	12.28	%	​	10.77	%	​	9.76	%	​	​	9.36	%	​	8.79	%
Return on average tangible common equity¹	​	10.57	%	​	14.45	%	​	16.65	%	​	14.36	%	​	13.02	%	​	​	12.46	%	​	11.70	%
Noninterest income / average assets	​	0.61	%	​	0.59	%	​	0.61	%	​	0.52	%	​	0.62	%	​	​	0.60	%	​	0.62	%
Noninterest expense / average assets	​	2.34	%	​	2.33	%	​	2.34	%	​	2.25	%	​	2.21	%	​	​	2.34	%	​	2.24	%
Efficiency ratio	​	70.82	%	​	64.16	%	​	61.28	%	​	63.39	%	​	64.35	%	​	​	67.32	%	​	66.62	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Selected Performance Ratios (Annualized):	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​
Operating return on average assets^1^	​	0.75	%	​	0.97	%	​	1.10	%	​	0.96	%	​	0.88	%	​	​	0.87	%	​	0.82	%
Operating PTPP return on average assets^1^	​	0.96	%	​	1.30	%	​	1.46	%	​	1.30	%	​	1.23	%	​	​	1.13	%	​	1.14	%
Operating return on average shareholders' equity^1^	​	7.98	%	​	10.79	%	​	12.15	%	​	10.83	%	​	9.82	%	​	​	9.36	%	​	8.97	%
Operating return on average tangible common equity^1^	​	10.57	%	​	14.45	%	​	16.47	%	​	14.44	%	​	13.09	%	​	​	12.46	%	​	11.94	%
Operating efficiency ratio^1^	​	70.64	%	​	64.02	%	​	61.36	%	​	62.93	%	​	63.88	%	​	​	67.16	%	​	65.67	%
Operating noninterest income / average assets^1^	​	0.61	%	​	0.59	%	​	0.60	%	​	0.52	%	​	0.62	%	​	​	0.60	%	​	0.62	%
Operating noninterest expense / average assets^1^	​	2.34	%	​	2.33	%	​	2.35	%	​	2.24	%	​	2.21	%	​	​	2.34	%	​	2.22	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Selected Interest Rates and Yields:	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​
Yield on loans and leases, excluding loan fees	​	5.39	%	​	5.20	%	​	4.81	%	​	4.48	%	​	4.18	%	​	​	5.30	%	​	4.15	%
Yield on loans and leases	​	5.51	%	​	5.57	%	​	5.05	%	​	4.59	%	​	4.40	%	​	​	5.54	%	​	4.40	%
Yield on earning assets, FTE	​	4.82	%	​	4.88	%	​	4.41	%	​	3.79	%	​	3.39	%	​	​	4.85	%	​	3.28	%
Cost of interest-bearing deposits	​	2.46	%	​	2.05	%	​	1.18	%	​	0.62	%	​	0.33	%	​	​	2.25	%	​	0.30	%
Cost of total deposits	​	1.89	%	​	1.56	%	​	0.85	%	​	0.45	%	​	0.24	%	​	​	1.73	%	​	0.22	%
Cost of interest-bearing liabilities	​	2.53	%	​	2.12	%	​	1.27	%	​	0.70	%	​	0.42	%	​	​	2.32	%	​	0.39	%
Net interest margin, FTE	​	2.93	%	​	3.31	%	​	3.51	%	​	3.29	%	​	3.08	%	​	​	3.12	%	​	3.00	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Per Common Share:	​			​			​			​			​		​	​	​		​	​		​
Net income, basic	$	0.53	​	$	0.69	​	$	0.78	​	$	0.69	​	$	0.61	​	​	$	1.21	​	$	1.11	​
Net income, diluted		0.52	​		0.68	​		0.77	​		0.68	​		0.61	​	​		1.20	​		1.10	​
Operating earnings, basic¹		0.53	​		0.69	​		0.77	​		0.69	​		0.61	​	​		1.21	​		1.13	​
Operating earnings, diluted¹		0.52	​		0.68	​		0.76	​		0.69	​		0.61	​	​		1.20	​		1.12	​
Book value		26.16	​		26.08	​		25.59	​		24.56	​		24.88	​	​		26.16	​		24.88	​
Tangible book value¹		19.78	​		19.66	​		19.09	​		18.02	​		18.69	​	​		19.78	​		18.69	​
Common shares outstanding		17,004,092	​		17,004,092	​		16,900,805	​		16,887,555	​		16,898,405	​	​		17,004,092	​		16,898,405	​

​

¹Non-GAAP measure. See reconciliation of Non-GAAP measures.

​

​

​

13

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended															​	Six Months Ended					​
​		Jun			Mar			Dec			Sep			Jun				Jun			Jun		​
​	​	2023		​	2023		​	2022		​	2022		​	2022		​	​	2023		​	2022		​
Operating Earnings:		​			​			​			​			​		​	​	​	​	​	​	​	​
Net income (GAAP)	​	$	8,836	​	$	11,500	​	$	13,004	​	$	11,543	​	$	10,215	​	​	$	20,336	​	$	18,475	​
Noninterest income:	​			​			​			​			​			​	​			​			​
Securities gains (losses), net	​		—	​		—	​		(144)	​		—	​		—	​	​		—	​		—	​
Noninterest expenses:	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​	​
Merger related and restructuring expenses	​		—	​		—	​		(45)	​		87	​		81	​	​		—	​		520	​
Income taxes:	​		​	​		​	​		​	​		​	​		​	​	​		​	​		​	​
Income tax effect of adjustments	​		—	​		—	​		49	​		(22)	​		(21)	​	​		—	​		(134)	​
Operating earnings (Non-GAAP)	​	$	8,836	​	$	11,500	​	$	12,864	​	$	11,608	​	$	10,275	​	​	$	20,336	​	$	18,861	​
Operating earnings per common share (Non-GAAP):	​			​			​			​			​			​	​			​			​
Basic	​	$	0.53	​	$	0.69	​	$	0.77	​	$	0.69	​	$	0.61	​	​	$	1.21	​	$	1.13	​
Diluted	​		0.52	​		0.68	​		0.76	​		0.69	​		0.61	​	​		1.20	​		1.12	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Noninterest Income:	​			​			​			​			​			​	​			​			​
Noninterest income (GAAP)	​	$	7,130	​	$	6,925	​	$	7,125	​	$	6,250	​	$	7,229	​	​	$	14,055	​	$	14,340	​
Securities gains (losses), net	​		—	​		—	​		(144)	​		—	​		—	​	​		—	​		—	​
Operating noninterest income (Non-GAAP)	​	$	7,130	​	$	6,925	​	$	6,981	​	$	6,250	​	$	7,229	​	​	$	14,055	​	$	14,340	​
Operating noninterest income (Non-GAAP)/average assets^1^	​		0.61	%		0.59	%		0.60	%		0.52	%		0.62	%	​		0.60	%		0.62	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Noninterest Expense:	​			​			​			​			​			​	​			​			​
Noninterest expense (GAAP)	​	$	27,410	​	$	27,529	​	$	27,416	​	$	27,230	​	$	25,926	​	​	$	54,939	​	$	51,643	​
Merger related and restructuring expenses	​		—	​		—	​		45	​		(87)	​		(81)	​	​		—	​		(520)	​
Operating noninterest expense (Non-GAAP)	​	$	27,410	​	$	27,529	​	$	27,461	​	$	27,143	​	$	25,845	​	​	$	54,939	​	$	51,123	​
Operating noninterest expense (Non-GAAP)/average assets^2^	​		2.34	%		2.33	%		2.35	%		2.24	%		2.21	%	​		2.34	%		2.22	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Pre-tax Pre-provision ("PTPP") Earnings:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest income (GAAP)	​	$	31,575	​	$	35,982	​	$	37,612	​	$	36,708	​	$	33,062	​	​	$	67,557	​	$	63,180	​
Operating noninterest income (Non-GAAP)	​	​	7,130	​	​	6,925	​	​	6,981	​	​	6,250	​	​	7,229	​	​	​	14,055	​	​	14,340	​
Operating noninterest expense (Non-GAAP)	​	​	(27,410)	​	​	(27,529)	​	​	(27,461)	​	​	(27,143)	​	​	(25,845)	​	​	​	(54,939)	​	​	(51,123)	​
Operating PTPP earnings (Non-GAAP)	​	$	11,295	​	$	15,378	​	$	17,132	​	$	15,815	​	$	14,446	​	​	$	26,673	​	$	26,397	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-GAAP Return Ratios:	​			​			​			​			​			​	​			​			​
Operating return on average assets (Non-GAAP)^3^	​		0.75	%		0.97	%		1.10	%		0.96	%		0.88	%	​		0.87	%		0.82	%
Operating PTPP return on average assets (Non-GAAP)^4^	​	​	0.96	%	​	1.30	%	​	1.46	%	​	1.30	%	​	1.23	%	​	​	1.13	%	​	1.14	%
Return on average tangible common equity (Non-GAAP)^5^	​		10.57	%		14.45	%		16.65	%		14.36	%		13.02	%	​		12.46	%		11.70	%
Operating return on average shareholders' equity (Non-GAAP)^6^	​		7.98	%		10.79	%		12.15	%		10.83	%		9.82	%	​		9.36	%		8.97	%
Operating return on average tangible common equity (Non-GAAP)^7^	​		10.57	%		14.45	%		16.47	%		14.44	%		13.09	%	​		12.46	%		11.94	%
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating Efficiency Ratio:	​			​			​			​			​			​	​			​			​
Efficiency ratio (GAAP)	​		70.82	%		64.16	%		61.28	%		63.39	%		64.35	%	​		67.32	%		66.62	%
Adjustment for taxable equivalent yields	​		(0.18)	%		(0.14)	%		(0.22)	%		(0.25)	%		(0.27)	%	​		(0.16)	%		(0.29)	%
Adjustment for securities gains (losses)	​		—	%		—	%		(0.20)	%		—	%		—	%	​		—	%		—	%
Adjustment for merger related income and costs	​		—	%		—	%		0.50	%		(0.21)	%		(0.20)	%	​		—	%		(0.66)	%
Operating efficiency ratio (Non-GAAP)	​		70.64	%		64.02	%		61.36	%		62.93	%		63.88	%	​		67.16	%		65.67	%

​

^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														​		Six Months Ended
​		Jun			Mar			Dec			Sep			Jun		​		Jun			Jun
​	​	2023		​	2023		​	2022		​	2022		​	2022		​	​	2023		​	2022
Tangible Common Equity:		​			​			​			​			​		​	​	​	​	​	​	​
Shareholders' equity (GAAP)	​	$	444,847	​	$	443,399	​	$	432,452	​	$	414,711	​	$	420,427	​	​	$	444,847	​	$	420,427
Less goodwill and other intangible assets	​		108,439	​		109,114	​		109,772	​		110,460	​		104,582	​	​		108,439	​		104,582
Tangible common equity (Non-GAAP)	​	$	336,408	​	$	334,285	​	$	322,680	​	$	304,251	​	$	315,845	​	​	$	336,408	​	$	315,845
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average Tangible Common Equity:	​			​			​			​			​			​	​			​
Average shareholders' equity (GAAP)	​	$	444,283	​	$	432,382	​	$	420,037	​	$	425,365	​	$	419,726	​	​	$	438,365	​	$	423,813
Less average goodwill and other intangible assets	​		108,851	​		109,537	​		110,206	​		106,483	​		104,986	​	​		109,193	​		105,300
Average tangible common equity (Non-GAAP)	​	$	335,432	​	$	322,845	​	$	309,831	​	$	318,882	​	$	314,740	​	​	$	329,172	​	$	318,513
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tangible Book Value per Common Share:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Book value per common share (GAAP)	​	$	26.16	​	$	26.08	​	$	25.59	​	$	24.56	​	$	24.88	​	​	$	26.16	​	$	24.88
Adjustment due to goodwill and other intangible assets	​	​	(6.38)	​	​	(6.42)	​	​	(6.50)	​	​	(6.54)	​	​	(6.19)	​	​	​	(6.38)	​	​	(6.19)
Tangible book value per common share (Non-GAAP)^1^	​	$	19.78	​	$	19.66	​	$	19.09	​	$	18.02	​	$	18.69	​	​	$	19.78	​	$	18.69
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tangible Common Equity to Tangible Assets:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Assets (GAAP)	​	$	4,745,800	​	$	4,769,805	​	$	4,637,498	​	$	4,796,911	​	$	4,788,113	​	​	$	4,745,800	​	$	4,788,113
Less goodwill and other intangibles	​	​	108,439	​	​	109,114	​	​	109,772	​	​	110,460	​	​	104,582	​	​	​	108,439	​	​	104,582
Tangible Assets (Non-GAAP)	​	$	4,637,361	​	$	4,660,691	​	$	4,527,726	​	$	4,686,451	​	$	4,683,531	​	​	$	4,637,361	​	$	4,683,531
Tangible common equity to tangible assets (Non-GAAP)	​	​	7.25%	​	​	7.17%	​	​	7.13%	​	​	6.49%	​	​	6.74%	​	​	​	7.25%	​	​	6.74%

​

​

^1^Tangible book value per share (Non-GAAP) 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>2Q 2023<br>July 25, 2023, 10:00am ET<br>Webcast: www.smartbank.com<br>(Investor Relations)<br>Audio Only: 1<br>-833<br>-470<br>-1428<br>Access Code: 194833<br>Miller Welborn<br>Chairman of the Board<br>Billy Carroll<br>President & CEO<br>Ron Gorczynski<br>CFO
DISCLOSURES<br>2<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 on SmartFinancial Inc.’s (“SmartFinancial”) business and financial<br>results and conditions, are not historical in nature and can generally be identified by such<br>words as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “may,” “estimate,” and<br>similar expressions. All forward-looking statements are subject to risks, uncertainties, and other<br>factors that may cause the actual results of SmartFinancial to differ materially from future<br>results expressed or implied by such forward-looking statements. Such risks, uncertainties, and<br>other factors include, among others, (1) the risk of litigation and reputational risk associated<br>with historic acquisition activity; (2) the risk that cost savings and revenue synergies from<br>recently completed acquisitions may not be realized or may take longer than anticipated to<br>realize; (3) disruption from recently completed acquisitions with customer, supplier, employee,<br>or other business relationships; (4) our ability to successfully integrate the businesses acquired<br>as part of previous acquisitions with the business of SmartBank; (5) changes in management’s<br>plans for the future; (6) prevailing, or changes in, economic or political conditions, particularly in<br>our market areas, including the effects of declines in the real estate market, inflationary<br>pressures, elevated interest rates and slowdowns in economic growth, as well as the financial<br>stress on borrowers as a result of the foregoing; (7) increased technology and cybersecurity<br>risks, including generative artificial intelligence risks; (8) credit risk associated with our lending<br>activities; (9) changes in loan demand, real estate values, or competition; (10) developments in<br>our mortgage banking business, including loan modifications, general demand, and the effects<br>of judicial or regulatory requirements or guidance; (11) changes in accounting principles,<br>policies, or guidelines; (12) changes in applicable laws, rules, or regulations; (13) adverse<br>results from current or future litigation, regulatory examinations or other legal and/or regulatory<br>actions, including as a result of SmartFinancial’s participation in and execution of government<br>programs related to the COVID-19 pandemic and related variants; (14) potential impacts of the<br>recent adverse developments in the banking industry highlighted by high-profile bank failures,<br>including impacts on customer confidence, deposit outflows, liquidity and the regulatory<br>response thereto; (15) significant turbulence or a disruption in the capital or financial markets<br>and the effect of a fall in stock market prices on our investment securities; (16) the effects of<br>war or other conflicts including the impacts related to or resulting from Russia’s military action<br>in Ukraine; and (17) 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-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 revenue, (ii) operating earnings, (iii) operating return<br>on average assets, (iv) operating return on average shareholders’ equity, (v) return on average<br>tangible common equity, (vi) operating return on average tangible common equity, (vii)<br>operating efficiency ratio; (viii) tangible common equity; (ix) average tangible common equity; (x)<br>tangible book value; (xi) operating pre-tax pre-provision earnings; (xii) operating noninterest<br>income; (xiii) operating noninterest expense; (xiv) tangible assets; and ratios derived therefrom,<br>in its analysis of the company's performance. Operating revenue includes the earnings from net<br>interest income and operating noninterest income (Non-GAAP). Operating earnings excludes<br>the following from net income: securities gains and losses, merger related and restructuring<br>expenses, and the income tax effect of adjustments. Operating return on average assets is the<br>annualized operating earnings (Non-GAAP) divided by average assets. Operating return on<br>average shareholders’ equity is the annualized operating earnings (Non-GAAP) divided by<br>average equity. Return on average tangible common equity is the annualized net income divided<br>by average tangible common equity (Non-GAAP). Operating return on average tangible<br>common equity is the annualized operating earnings (Non-GAAP) divided by average tangible<br>common equity (Non-GAAP). The operating efficiency ratio includes an adjustment for taxable<br>equivalent yields and excludes securities gains and losses and merger related and restructuring<br>expenses from the efficiency ratio. Tangible common equity and average tangible common<br>equity exclude goodwill and other intangible assets from shareholders’ equity and average<br>shareholders’ equity. Tangible book value excludes goodwill and other intangible assets less<br>shareholders’ equity divided by common shares outstanding. Operating pre-tax pre-provision<br>earnings is net interest income plus operating noninterest income (Non-GAAP) less operating<br>noninterest expense (Non-GAAP). Operating noninterest income excludes the following from<br>noninterest income: securities gains and losses. Operating noninterest expense excludes the<br>following from noninterest expense: prior year adjustments to salaries, merger related and<br>restructuring expenses and certain franchise tax true-up expenses. Tangible assets excludes<br>goodwill and other intangibles from total assets. Management believes that Non-GAAP financial<br>measures provide additional useful information that allows investors to evaluate the ongoing<br>performance of the company and provide meaningful comparisons to its peers. Management<br>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<br>results excluding the impact of items that are not reflective of the underlying operating<br>performance. Non-GAAP financial measures should not be considered as an alternative to any<br>measure of performance or financial condition as promulgated under GAAP, and investors<br>should consider SmartFinancial's performance and financial condition as reported under GAAP<br>and all other relevant information when assessing the performance or financial condition of the<br>company. Non-GAAP financial measures have limitations as analytical tools, and investors<br>should not consider them in isolation or as a substitute for analysis of the results or financial<br>condition as reported under GAAP.
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$0.61<br>$0.68<br>$0.52<br>$0.61<br>$0.68<br>$0.52<br>2Q22 1Q23 2Q23<br>GAAP EPS Diluted Operating EPS<br>$24.88 $26.08 $26.16<br>$18.69 $19.66 $19.78<br>2Q22 1Q23 2Q23<br>BV Per Share TBV Per Share<br>0.87%<br>0.97%<br>0.75%<br>0.88%<br>0.97%<br>0.75%<br>2Q22 1Q23 2Q23<br>GAAP ROAA Operating ROAA<br>13.0%<br>14.4%<br>10.6%<br>13.1%<br>14.4%<br>10.6%<br>2Q22 1Q23 2Q23<br>GAAP ROATCE Operating ROATCE<br>AOCI Impact<br>3<br>Unless otherwise indicated, financial data as of or for the three months ended 6/30/23<br>1) Non-GAAP financial measure - 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) AOCI: Accumulated Other Comprehensive Income<br>QUARTERLY HIGHLIGHTS: SECOND QUARTER 2023<br>12%<br>QoQ2 Annualized<br>Tang. Book Value<br>Per Share Growth<br>(Excluding AOCI)1,4<br>$0.52<br>Diluted Operating<br>EPS1<br>0.75%<br>Operating Return on<br>Average Assets1<br>10.6%<br>Operating Return<br>Average Tang.<br>Common Equity1<br>71%<br>Operating Efficiency<br>Ratio1<br>(3%)<br>QoQ Annualized<br>Deposit Contraction<br>7%<br>QoQ Annualized<br>Organic Loan3<br>Growth<br>79%<br>Loan / Deposit<br>Ratio<br>0.12%<br>Non-Performing<br>Assets / Assets<br>$4.7<br>Billion in Total<br>Assets<br>Diluted Earnings Per Share Book Value Per Share<br>Return on Average Assets<br>Return on Average Tangible<br>Common Equity<br>1<br>1 1<br>1<br>1,4<br>$21.84<br>$19.78<br>$21.34<br>$19.66
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4<br>SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE<br>$4.7<br>Billion in Total<br>Assets<br>$3.3<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>$4.2<br>Billion in Total<br>Deposits<br>42<br>Total Branches<br>Nashville Knoxville<br>Huntsville<br>Tuscaloosa<br>Mobile<br>Pensacola<br>Birmingham<br>Auburn<br>Tallahassee<br>Dothan<br>Montgomery<br>SmartBank Branch Offices<br>Chattanooga<br>Balance sheet and branch count represent 6/30/23 balances<br>1) Knox News Sentinel Top Workplaces survey<br>Panama City<br>1
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<br>$2.0<br>$2.1<br>$2.4 $2.3<br>$2<br>$2<br>$2<br>$2<br>$2<br>$2<br>$2<br>12/31/20 12/31/21 12/31/22 6/30/23 SMBK Loans<br>$2.5<br>$3.5 $3.4 $3.4<br>$-<br>$1<br>$1<br>$2<br>$2<br>$3<br>$3<br>$4<br>$4<br>$5<br>12/31/20 12/31/21 12/31/22 6/30/23<br>SMBK Deposits<br>$0.4<br>$0.6<br>$0.9<br>$1.0<br>$-<br>$0<br>$0<br>$1<br>$1<br>$1<br>$1<br>12/31/20 12/31/21 12/31/22 6/30/23 SMBK Loans<br>$0.3<br>$0.5<br>$0.7<br>$0.9<br>$-<br>$0<br>$0<br>$0<br>$0<br>$1<br>$1<br>$1<br>$1<br>$1<br>$1<br>12/31/20 12/31/21 12/31/22 6/30/23<br>SMBK Deposits<br>SmartBank Branch Offices<br>Expanding Market Area<br>Legacy Market Area<br>Urban area Density<br>MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS<br>5<br>► Total Population: 2.8 Million<br>► Total Deposits: $72 Billion<br>► Median Income: $63 Thousand<br>Legacy Markets<br>1) Legacy Markets include Chattanooga, TN, Clarke, AL, Cleveland, TN, Crossville, TN, Cookeville, TN, Fentress, TN, Huntsville, AL, Knoxville, TN, Sevierville, TN, Tullahoma, TN and Tuscaloosa, AL MSAs<br>2) Expanding Markets include Auburn, AL, Birmingham, AL, Dothan, AL, Fairhope, AL, Fort Walton/Destin, FL, Montgomery, AL, Mobile, AL, Nashville, TN, Panama City, FL, Pensacola, FL and Tallahassee, FL<br>Source: S&P Market Intelligence; https://www.forbes.com/best-places-for-business<br>Note: Expanding and Legacy market statistics based on the weighted average of the MSAs included in each area based on population; Legacy market area includes settlement and corporate balances<br>Expanding Markets<br>► Total Population: 5.9 Million<br>► Total Deposits: $211 Billion<br>► Median Income: $68 Thousand<br>Legacy Markets1<br>: Strong Relationships / Deep Market Penetration<br>Expanding Markets2<br>: Building Talent / Growing Brand Awareness<br>Forbes<br>Top 200<br>Best Places<br>for Business and<br>Careers<br>Knoxville: #86<br>Huntsville: #93<br>Chattanooga: #116<br>Mobile: #184<br>Forbes<br>Top 200<br>Best Places<br>for Business and<br>Careers<br>Nashville: #15<br>Tallahassee: #103<br>Pensacola: #105<br>Birmingham: #165<br>Montgomery: #191<br>CAGR: 5%<br>$ in Billions, unless otherwise indicated<br>CAGR: 13%<br>CAGR: 45%<br>CAGR: 51%
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6<br>LOAN PORTFOLIO: SOLID MARKETS PROVIDING OPPORTUNITY<br>Total Loans<br>CAGR of 15% Since 2018<br>$ in Millions, unless otherwise indicated<br>Average Loan Yield<br>(excluding accretion & fees)<br>Loan Composition<br>History of Strong Organic Growth<br>$1,775<br>$1,897<br>$2,382<br>$2,693<br>$3,254 $3,282 $3,338<br>5.20%<br>5.39%<br>3. 00%<br>4. 00%<br>5. 00%<br>6. 00%<br>7. 00%<br>8. 00%<br>9. 00%<br>10. 00%<br>$-<br>$500<br>$1, 000<br>$1, 500<br>$2, 000<br>$2, 500<br>$3, 000<br>$3, 500<br>$4, 000<br>2018Y 2019Y 2020Y 2021Y 2022Y 1Q23 2Q23<br>23% 23% 24% 23% 23%<br>28% 27% 27% 27% 26%<br>16% 16%<br>17% 17% 18%<br>12% 13%<br>12% 12% 12%<br>18%<br>18%<br>18% 18% 19%<br>$2,994<br>$3,099<br>$3,254 $3,282 $3,338<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>CRE, OO CRE, NOO C&I<br>C&D Consumer RE Leases & Other
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1-4 Family<br>(NOO)<br>22%<br>Resi/Comm<br>Land Dev.<br>11%<br>Resi/Comm<br>Land<br>15%<br>Multifamily<br>8%<br>CRE (OO)<br>14%<br>CRE (NOO)<br>18%<br>Multifamily<br>19%<br>Hotel &<br>Hospitality<br>33%<br>Retail<br>Space<br>14%<br>Office Space<br>14%<br>Misc.<br>10%<br>7<br>LOAN CONCENTRATION: WELL BALANCED EXPOSURE<br>Non-Owner Occupied CRE<br>Exposure By Segment<br>Highly Diversified with<br>Seasoned Client Base<br>Construction & Development<br>Exposure By Type1<br>Closely Monitored with No<br>Concentration Concerns<br>1) 1-4 Family (OO) includes owner-occupied primary and secondary residence construction loans; 1-4 Family (NOO) includes speculative and investment property residential construction loans; Resi/Comm Land Dev. includes primary, secondary, investment and<br>commercial land development loans; Resi/Comm Land includes residential and commercial improved and unimproved land loans; Multifamily includes 5 or more residential property loans; CRE (OO) includes construction loans for owner-occupied commercial<br>real estate including hotel & hospitality, retail, office, industrial & warehouse, self storage and other commercial real estate; CRE (NOO) includes construction loans for non owner-occupied commercial real estate including hotel & hospitality, retail, office,<br>industrial & warehouse, self storage and other commercial real estate<br>2) Outstanding principal balance shown which excludes amortized costs<br>$883 Million2<br>- 26% of Total Loans $397 Million2<br>- 12% of Total Loans<br>Office Space Portfolio Loan Average: $1.3 Million / 1.75x DCR / 56% LTV
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$5,042<br>$4,605 $4,808 $5,021<br>$5,712<br>0.11% 0.10% 0.10% 0.11% 0.12%<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>2Q22 3Q22 4Q22 1Q23 2Q23<br>Nonperforming Loans OREO & Other Repos Nonperforming Assets / Total Assets<br>303% 301%<br>294%<br>287% 286%<br>90%<br>98% 94%<br>88% 89%<br>0%<br>50%<br>100%<br>150%<br>200%<br>250%<br>150%<br>170%<br>190%<br>210%<br>230%<br>250%<br>270%<br>290%<br>310%<br>330%<br>350%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>CRE Loans / Capital C&D Loans / Capital $6,588 $6,398 $6,744<br>$8,343 $8,438<br>0.22% 0.21% 0.21% 0.25% 0.25%<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>1.70%<br> $-<br> $2, 000<br> $4, 000<br> $6, 000<br> $8, 000<br> $10, 000<br> $12, 000<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Total Delinquent & Nonaccrual Loans & Leases<br>Total Delinquent & Nonaccrual Loans & Leases / Total Loans & Leases<br>0.29%<br>0.22% 0.22%<br>0.26% 0.26%<br>-0.09%<br>0.02% 0.03% 0.03%<br>-0.01%<br>- 0.10%<br>0.00%<br>0.10%<br>0.20%<br>0.30%<br>0.40%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Classified Loans and Leases / Total Loans & Leases Net Chargeoffs<br>$21,938 $22,769 $23,334<br>$32,279 $32,747<br>0.73% 0.73% 0.72%<br>0.98% 0.98%<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> $22, 000<br> $24, 000<br> $26, 000<br> $28, 000<br> $30, 000<br> $32, 000<br> $34, 000<br> $36, 000<br> $38, 000<br> $40, 000<br> $42, 000<br> $44, 000<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Allowance for Credit Losses (ACL) ACL / Loans HFI<br>8<br>Credit Quality<br>Delinquent and Nonaccruals / Total Loans<br>Nonperforming Assets Commercial Real Estate Concentration<br>ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS<br>$ in Thousands, unless otherwise indicated<br>Allowance Reconciliation
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9<br>DEPOSIT PORTFOLIO: DEFENDING DEPOSIT MARKET SHARE<br>Total Deposits<br>Loans to Deposits Ratio of 79%<br>$ in Millions, unless otherwise indicated<br>Average Total Deposit Cost<br>Deposit Composition<br>Stability in Mix Shift<br>27% 28% 26% 23% 24%<br>23% 22%<br>24% 23% 22%<br>38% 39%<br>39% 42% 41%<br>12% 11%<br>11%<br>12% 13%<br>$4,282 $4,280<br>$4,077<br>$4,230 $4,200<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Noninterest Demand Interest-Bearing Demand<br>Money Market and Savings Time Deposits<br>$1,922<br>$2,047<br>$2,805<br>$4,022 $4,077<br>$4,230 $4,200<br>1.56%<br>1.89%<br>0. 00%<br>1. 00%<br>2. 00%<br>3. 00%<br>4. 00%<br>5. 00%<br>$-<br>$500<br>$1, 000<br>$1, 500<br>$2, 000<br>$2, 500<br>$3, 000<br>$3, 500<br>$4, 000<br>$4, 500<br>2018Y 2019Y 2020Y 2021Y 2022Y 1Q23 2Q23
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Commercial<br>35%<br>Consumer<br>35% Brokered<br>10<br>DEPOSIT GRANULARITY: DIVERSIFIED CLIENT BASE<br>1) Uninsured deposits includes all deposit balances greater than $250 thousand excluding public funds secured by pledged collateral, reciprocal deposits and brokered CDs divided by total deposits<br>2) Average account balances exclude reciprocal deposits and brokered CDs; commercial and consumer accounts exclude reciprocal and brokered CD accounts<br>3) $953 million Includes all public funds including those placed in a reciprocal deposit program<br>4) Commercial and consumer portfolios exclude deposits from public funds sources and exclude reciprocal deposits and brokered CDs<br>5) Reciprocal deposits include those utilizing the CDARS and ICS programs. CDARS: Certificate of Deposit Account Registry Service, ICS: IntraFi Cash Service<br>$4.2 Billion<br>27%<br>~18 Thousand<br>Uninsured1<br>:<br>Deposits:<br>Avg. Balance2<br>:<br>Deposit Portfolio Statistics Deposit Portfolio Segmentation<br>Consumer Accts2<br>:<br>Commercial Accts2<br>:<br>Public Funds3<br>:<br>~$39 Thousand<br>$953 Million<br>~68 Thousand
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105%<br>99%<br>Peer Average SMBK<br>88%<br>79%<br>Peer Average SMBK<br>11<br>LIQUIDITY OVERVIEW: PRUDENTLY MANAGING LIQUIDITY<br>1) Peer average based on most recently reported period results for each peer; peers include major exchange traded banks in the Southeast with assets between $2.0 billion and $8.0 billion<br>2) FRB discount window and Bank Term Funding Program borrowing capacity shown as of June 30, 2023<br>Source: S&P Global<br>Loan + Securities / Deposit Ratio<br>(Most Recent Quarter Period End)<br>Loan / Deposit Ratio<br>(Most Recent Quarter Period End)<br>Other Liquidity Sources<br>Ample Access to a Variety of Funding<br>Robust Liquidity on Hand<br>$1.7 Billion in Untapped Liquidity Sources<br>$590 Million in On-Balance Sheet Liquidity<br>1.5x Liquidity to Uninsured Deposit Ratio<br>1 1<br>$ in Millions, unless otherwise indicated<br>Total Amount Net<br>Available Used Availability<br>Current On-Balance Sheet:<br>Cash & Cash Equiv. $239 $0 $239<br>Unpledged Securities 351 0 351<br>Available Sources of Liquidity:<br>Fed Funds 98 0 98<br>FHLB 597 4 593<br>FRB2 378 0 378<br>HC LoC 35 11 24<br>Total Liquidity $1,698 $15 $1,683
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$434<br>$169<br>$3 $25 $20 $43 $45 $64<br>$33<br> $-<br> $100<br> $200<br> $300<br> $400<br> $500<br> $600<br> $700 UST/Agency MBS Fixed ARM CMO Fixed CMO Float Agen CMBS Small Bus Municipal Corporate $10 $9 $218 $59 $18 $10 $10 $9 $10 $30<br>29%<br>36%<br>39%<br>42%<br>46%<br> $-<br> $50<br> $100<br> $150<br> $200<br> $250<br> $300<br> $350<br>0%<br>10%<br>20%<br>30%<br>40%<br>50%<br>60%<br>70%<br>80%<br>Q3 '23 Q1 '24 Q3 '24 Q1 '25 Q3 '25<br>Quarterly Principal Cumulative Principal Returned as % of Total<br>12<br>SECURITIES DETAIL: STRUCTURED FOR LIQUIDITY<br>$ in Millions, unless otherwise indicated<br>Portfolio Summary Principal Cashflow Schedule<br>~$300 Million Maturing by Q2 ‘24<br>Portfolio Mix by Par Value<br>Risk Adverse Portfolio Designed for Liquidity<br>$867 Million Book Value<br>2.37% Book Yield<br>($67) Million Unrealized Loss<br>• ($44) Million in Available-for-Sale Securities (AFS)<br>• ($23) Million in Held-to-Maturity (HTM)<br>4.4 Year Average Life<br>3.0 Year Effective Duration<br>68% / 32% (AFS / HTM)
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$655<br>$543<br>$266<br>$307<br>$239<br>$813 $807<br>$770<br>$845 $824<br>17.0% 16.8% 16.6%<br>17.7% 17.4%<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>2Q22 3Q22 4Q22 1Q23 2Q23<br>Cash and Cash Equiv. Securities (AFS/HTM) Securities (AFS/HTM) / Total Assets<br>$33,062<br>$36,708<br>$37,612<br>$35,982<br>$31,575<br>$7,229<br>$6,250<br>$6,981<br>$6,925<br>$7,130<br>$40,291<br>$42,958<br>$44,593<br>$42,907<br>$38,705<br>3.08%<br>3.29%<br>3.51%<br>3.31%<br>2.93%<br> $18, 000<br> $23, 000<br> $28, 000<br> $33, 000<br> $38, 000<br> $43, 000<br>2.00%<br>2.50%<br>3.00%<br>3.50%<br>4.00%<br>4.50%<br>5.00%<br>5.50%<br>6.00%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Net Interest Income Operating Noninterest Income Net Interest Margin (FTE)<br>13<br>LIQUIDITY MANAGEMENT: NAVIGATING MARGIN PRESSURE<br>Cash and Securities Margin / Operating Revenue2<br>1) Based on the weighted average of the AFS/HTM securities portfolio. Yields related to investment securities exempt from income taxes are stated on a taxable-equivalent basis assuming a federal income tax rate of 21.0%<br>2) Non-GAAP financial measure - for a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>2<br>$ in Millions, unless otherwise indicated $ in Thousands, unless otherwise indicated<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Cash Yield 0.91% 2.34% 3.81% 4.77% 4.02%<br>Sec. Yield (AFS/HTM)1 1.73% 1.87% 2.15% 2.11% 2.30%<br>Loans (less Accr. & Fees) 4.18% 4.48% 4.81% 5.20% 5.39%<br>Loan Accr. & Fees 0.22% 0.11% 0.24% 0.37% 0.12%<br>Loan Yield (incl. Accr. & Fees) 4.40% 4.59% 5.05% 5.57% 5.51%<br>IE Asset Yield 3.39% 3.79% 4.41% 4.88% 4.82%<br>NIM (FTE) 3.08% 3.29% 3.51% 3.31% 2.93%
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$1,965<br>58%<br>$595<br>18%<br>$800<br>24%<br>Fixed Rate LT Variable ST Variable<br>$6,162 , 4.7%<br>$3,705 , 2.8%<br>$(3,531), -2.7% Interest Income % Change<br>Shock -200bps Shock -100bps Shock +100bps<br>$3,821 , 2.9%<br>$2,091 , 1.6%<br>$(1,910), -1.5% Interest Income % Change<br>Ramp -200bps Ramp -100bps Ramp +100bps<br>14<br>INTEREST RATE SENSITIVITY<br>Fixed vs. Variable Rate Loans Static Shock / Rate Ramp Analysis1<br>1) Based on 12-month static rate shock and ramp analysis as of 6/30/23. These estimates of changes in SmartFinancial’s net interest income require us to make certain assumptions including loan and mortgage-related investment prepayment speeds,<br>reinvestment rate, deposit maturities and decay rates. These assumptions are inherently uncertain and, as a result, we cannot precisely predict the impact of changes in interest rates on net interest income. Although our analysis provides an indication of<br>our interest rate risk exposure at a particular point in time, such estimates are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates and will differ from actual results<br>$2.0 Billion Fixed Rate Loans<br>$1.4 Billion Variable Rate Loans<br>• $800 Million Short-Term Variable Rate (1 - 3 Month Reset)<br>• $595 Million Long-Term Variable Rate (> 3 Month Reset)<br>$ in Millions, unless otherwise indicated $ in Thousands, unless otherwise indicated
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$7,229<br>$6,250<br>$6,981 $6,925 $7,130<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Service Charges on Deposit Accounts Mortgage Banking Income<br>Investment Services Income Insurance Commissions<br>Interchange Fees Other Noninterest Income<br>15<br>NONINTEREST REVENUE DETAILS: GROWING FEE INCOME<br>Operating Noninterest Income1<br>Focused on Recurring Fee Income<br>1) Non-GAAP financial measure - for a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>Differentiated Revenue Streams<br>Building a Family of Diversified Revenue Generators<br>$ in Thousands, unless otherwise indicated
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64% 63%<br>61%<br>64%<br>71%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Operating Efficiency Ratio<br>$25,845<br>$27,143 $27,461 $27,529 $27,410<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>Salaries & Benefits Occupancy & Equipment<br>Data Processing & Technology Professional Services<br>Amortization of Intangibles Other Noninterest Expense<br>16<br>1) Non-GAAP financial measure - for a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix<br>OPERATING EXPENSE: FOCUS ON EXPENSE CONTAINMENT<br>Operating Efficiency Ratio1 Operating Noninterest Expense1<br>1<br>$ in Thousands, unless otherwise indicated
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6.7% 6.5%<br>7.1% 7.2% 7.3%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>10.0% 9.7% 9.7% 10.0% 10.1%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>7.5% 7.4%<br>8.0% 7.9%<br>8.2%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>11.8% 11.4% 11.4% 11.8% 11.9%<br>2Q22 3Q22 4Q22 1Q23 2Q23<br>$14.64<br>$16.82<br>$17.92<br>$19.26 $19.09<br>$19.78<br>$14.84<br>$16.80<br>$17.77<br>$19.17<br>$21.18<br>$21.84<br> $8. 00<br> $10. 00<br> $12. 00<br> $14. 00<br> $16. 00<br> $18. 00<br> $20. 00<br> $22. 00<br> $24. 00<br>2018Y 2019Y 2020Y 2021Y 2022Y 2Q23<br>TBV Per Share Adj. TBV Per Share (Ex. AOCI)<br>CAPITAL: WELL CAPITALIZED – BUILDING BOOK VALUE<br>1) Non-GAAP financial measure - for a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix 17<br>Note: Capital ratio data as of the most recent period ended 6/30/23<br>TCE / TA1<br>CET1 Ratio Total Capital Ratio<br>Leverage Ratio<br>Basel III Regulatory Capital Minimum To Be Considered “Well Capitalized”<br>Building Shareholder Value<br>Tangible Book Value Per Share (TBVPS)1<br>$7.01 TBVPS1 Created 2018 – 2023<br> (Excluding Accumulated Other Comprehensive Income)<br>$0.08 2023 Per Share Quarterly Dividend<br>5%<br>Well<br>Capitalized<br>10%<br>Well<br>Capitalized<br>6.5%<br>Well<br>Capitalized<br>1 1
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WHY SMARTBANK: INVESTMENT HIGHLIGHTS<br>18<br>Franchise Scarcity Value – Building Southeast Density<br>Engaged Management Team<br>Stable Markets Experiencing Population Expansion<br>Valuable Deposit Base<br>Growing Business Lines with Revenue Diversification<br>Solid Credit Quality and Underwriting<br>History of Defending Book Value and Delivering Shareholder Value<br>$
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APPENDIX<br>19
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1Q23 2Q22<br>($ in thousands, except per share data) 2Q23 1Q23 2Q22 % Chg. % Chg.<br>Net Interest Income $ 31,575 $ 35,982 $ 33,062 (12%) (4%)<br>Provision for Loan & Lease losses 113 550 1,250<br>Noninterest Income 7,130 6,925 7,229 3% (1%)<br>Noninterest Expense 27,410 27,529 25,926 (0%) 6%<br>Income Tax Expense 2,346 3,328 2,900<br>Net Income (GAAP) $ 8,836 $ 11,500 $ 10,215 (23%) (13%)<br>Non-GAAP Reconciliations<br>Noninterest Income - - -<br>Noninterest Expense - - 81<br>Income Tax Effect Of Adjustments - - (21)<br>Operating Earnings (Non-GAAP) $ 8,836 $ 11,500 $ 10,275 (23%) (14%)<br>Operating PTPP Earnings (Non-GAAP) $ 11,295 $ 15,378 $ 14,446 (27%) (22%)<br>1Q23 2Q22<br>Non-GAAP Performance Metrics 2Q23 1Q23 2Q22 % Chg. % Chg.<br>Diluted Operating Earnings Per Share $ 0.52 $ 0.68 $ 0.61 (23%) (14%)<br>Tangible Book Value Per Common Share $ 19.78 $ 19.66 $ 18.69 1% 6%<br>Operating Return on Average Assets 0.75% 0.97% 0.88%<br>Operating PTPP Return on Average Assets 0.96% 1.30% 1.23%<br>Operating Return on Average Tang. Common Equity 10.6% 14.4% 13.1%<br>Operating Efficiency Ratio 70.6% 64.0% 63.9%<br>2Q23 vs.<br>2Q23 vs.<br>20<br>Note: For a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix; percentage change may differ due to rounding<br>INCOME STATEMENT: DETAILED SECOND QUARTER RESULTS
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NON-GAAP RECONCILIATION<br>21<br>1. Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets.<br>2. Operating PTPP return on average assets (Non-GAAP) is the annualized operating PTPP earnings (Non-GAAP) divided by average assets.<br>3. Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP).<br>4. Operating return on average shareholders’ equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average shareholder equity.<br>5. Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP).<br>$ in Thousands, unless otherwise indicated<br>2Q23 1Q23 4Q22 3Q22 2Q22<br>Operating Earnings<br>Net Income (GAAP) $ 8,836 $ 11,500 $ 13,004 $ 11,543 $ 10,215<br>Noninterest Income:<br>Securities (Gains) Losses - - (144) - -<br>Noninterest Expenses:<br>Merger Related And Restructuring Expenses - - (45) 87 81<br>Income Taxes:<br>Income Tax Effect Of Adjustments - - 49 (22) (21)<br>Operating Earnings (Non-GAAP) $ 8,836 $ 11,500 $ 12,864 $ 11,608 $ 10,275<br>Operating Earnings Per Common Share (Non-GAAP):<br>Basic $ 0.53 $ 0.69 $ 0.77 $ 0.69 $ 0.61<br>Diluted 0.52 0.68 0.76 0.69 0.61<br>Operating Noninterest Income<br>Noninterest Income (GAAP) $ 7,130 $ 6,925 $ 7,125 $ 6,250 $ 7,229<br>Securities (Gain) Losses - - (144) - -<br>Operating Noninterest Income (Non-GAAP) $ 7,130 $ 6,925 $ 6,981 $ 6,250 $ 7,229<br>Operating Noninterest Expense<br>Noninterest Expense (GAAP) $ 27,410 $ 27,529 $ 27,416 $ 27,230 $ 25,926<br>Merger Related And Restructuring Expenses - - 45 (87) (81)<br>Operating Noninterest Expense (Non-GAAP) $ 27,410 $ 27,529 $ 27,461 $ 27,143 $ 25,845<br>Operating Revenue<br>Net Interest Income (GAAP) $ 31,575 $ 35,982 $ 37,612 $ 36,708 $ 33,062<br>Operating Noninterest Income (Non-GAAP) 7,130 6,925 6,981 6,250 7,229<br>Operating Revenue (Non-GAAP) 38,705 42,907 44,593 42,958 40,291<br>Operating Pre-Tax Pre-Provison ("PTPP") Earnings<br>Operating Revenue (Non-GAAP) $ 38,705 $ 42,907 $ 44,593 $ 42,958 $ 40,291<br>Operating Noninterest Expense (Non-GAAP) (27,410) (27,529) (27,461) (27,143) (25,845)<br>Operating PTPP Earnings (Non-GAAP) $ 11,295 $ 15,378 $ 17,132 $ 15,815 $ 14,446<br>Non-GAAP Return Ratios<br>Operating Return On Average Assets (Non-GAAP)(1) 0.75% 0.97% 1.10% 0.96% 0.88%<br>Operating PTPP Return On Average Assets (Non-GAAP)(2) 0.96% 1.30% 1.46% 1.30% 1.23%<br>Return On Average Tangible Common Equity (Non-GAAP)(3) 10.57% 14.45% 16.65% 14.36% 13.02%<br>Operating Return On Average Shareholders' Equity (Non-GAAP)(4) 7.98% 10.79% 12.15% 10.83% 9.82%<br>Operating Return On Average Tangible Common Equity (Non-GAAP)(5) 10.57% 14.45% 16.47% 14.44% 13.09%<br>Operating Efficiency Ratio<br>Efficiency Ratio (GAAP) 70.82% 64.16% 61.28% 63.39% 64.35%<br>Adjustment For Taxable Equivalent Yields (0.18%) (0.14%) (0.22%) (0.25%) (0.27%)<br>Adjustment For Securities Gains (Losses) - - (0.20%) - -<br>Adjustment For Merger Expenses - - 0.50% (0.21%) (0.20%)<br>Operating Efficiency Ratio (Non-GAAP) 70.64% 64.02% 61.36% 62.93% 63.88%
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NON-GAAP RECONCILIATION<br>22<br>1. Tangible book value per share (Non-GAAP) is computed by dividing total stockholder’s equity, less goodwill and other intangible assets, by common shares outstanding.<br>2. Totals may not add due to rounding<br>$ in Thousands, unless otherwise indicated<br>2Q23 1Q23 4Q22 3Q22 2Q22<br>Tangible Common Equity:<br>Shareholders' Equity (GAAP) $ 444,847 $ 443,399 $ 432,452 $ 414,711 $ 420,427<br>Less Goodwill And Other Intangible Assets 108,439 109,114 109,772 110,460 104,582<br>Tangible Common Equity (Non-GAAP) $ 336,408 $ 334,285 $ 322,680 $ 304,251 $ 315,845<br>Average Tangible Common Equity:<br>Average Shareholders' Equity (GAAP) $ 444,283 $ 432,382 $ 420,037 $ 425,365 $ 419,726<br>Less Goodwill And Other Intangible Assets 108,851 109,537 110,206 106,483 104,986<br>Average Tangible Common Equity (Non-GAAP) $ 335,432 $ 322,845 $ 309,831 $ 318,882 $ 314,740<br>Tangible Book Value Per Common Share:<br>Book Value Per Common Share (GAAP) $ 26.16 $ 26.08 $ 25.59 $ 24.56 $ 24.88<br>Adjustment Due To Goodwill And Other Intangible Assets (6.38) (6.42) (6.50) (6.54) (6.19)<br>Tangible Book Value Per Common Share (Non-GAAP)(1) $ 19.78 $ 19.66 $ 19.09 $ 18.02 $ 18.69<br>Tangible Common Equity To Tangible Assets:<br>Total Assets $ 4,745,800 $ 4,769,805 $ 4,637,498 $ 4,796,911 $ 4,788,113<br>Less Goodwill And Other Intangibles 108,439 109,114 109,772 110,460 104,582<br>Tangible Assets (Non-GAAP) $ 4,637,361 $ 4,660,691 $ 4,527,726 $ 4,686,451 $ 4,683,531<br>Tangible Common Equity To Tangible Assets (Non-GAAP): 7.25% 7.17% 7.13% 6.49% 6.74%<br>2Q23 1Q23 4Q22 3Q22 2Q22<br>Tangible Common Equity (Excluding AOCI):<br>Shareholders' Equity (GAAP) $ 444,847 $ 443,399 $ 432,452 $ 414,711 $ 420,427<br>Less Goodwill And Other Intangible Assets 108,439 109,114 109,772 110,460 104,582<br>Tangible Common Equity (Non-GAAP) $ 336,408 $ 334,285 $ 322,680 $ 304,251 $ 315,845<br>Less Adjustment Due to AOCI (Loss) (35,017) (28,620) (35,324) (40,807) (24,648)<br>Tangible Common Equity (Excl. AOCI) (Non-GAAP) $ 371,425 $ 362,905 $ 358,004 $ 345,058 $ 340,493<br>Tangible Book Value Per Common Share (Excluding AOCI):<br>Book Value Per Common Share (GAAP) $ 26.16 $ 26.08 $ 25.59 $ 24.56 $ 24.88<br>Adjustment Due To Goodwill And Other Intangible Assets (6.38) (6.42) (6.50) (6.54) (6.19)<br>Tangible Book Value Per Common Share (Non-GAAP)(1) $ 19.78 $ 19.66 $ 19.09 $ 18.02 $ 18.69<br>Less Adjustment Due to AOCI (Loss) (2.06) (1.68) (2.09) (2.42) (1.46)<br>Tangible Book Value Per Common Share (Excl. AOCI) (Non-GAAP)(1)(2) $ 21.84 $ 21.34 $ 21.18 $ 20.43 $ 20.15
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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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