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Press Release

SmartFinancial Announces Earnings with Second Quarter 2018 Net Income of $3.9 million

Company Release - 7/24/2018 7:07 PM ET

Net operating earnings (Non-GAAP) of $4.8 million for the quarter

Performance Highlights

  • Return on average assets of 0.81 percent and net operating return on average assets (Non-GAAP) of 1.00 percent.
  • Net interest margin, taxable equivalent, of 4.57 percent, an increase of 0.42 percent from a year ago.
  • Asset quality improved with nonperforming assets to total assets decreasing to 0.25 percent.
  • Completed second acquisition in seven months, increasing assets to over $2.0 billion.

KNOXVILLE, Tenn., July 24, 2018 (GLOBE NEWSWIRE) -- SmartFinancial, Inc. ("SmartFinancial") (NASDAQ:SMBK), today announced net income of $3.9 million for the second quarter of 2018, compared to $1.6 million a year ago. Diluted net income per share was $0.32 for the second quarter of 2018, compared to $0.20 during the second quarter of 2017. Net operating earnings (Non-GAAP), which excludes securities gains and merger expenses, totaled $4.8 million in the second quarter of 2018 compared to $2.1 million in the second quarter of 2017.

Billy Carroll, President & CEO, stated:  "I am pleased to report another solid quarter for our company.  We crossed over $2.0 billion in assets, continued our upward momentum in earnings per share and return on assets, and maintained an extremely healthy net interest margin, even with an uptick in deposit costs. Our team has done a great job this year with the integration of Alabama-based Capstone in the first quarter, closing the acquisition of Tennessee Bancshares and begin planning of its integration in the second quarter, and announcing our planned Foothills Bancorp acquisition. All of these accomplishments while organically growing and improving the core bank."

SmartFinancial's Chairman, Miller Welborn, concluded: “I am excited about the continued progress that we have shown this past quarter. Our momentum is very positive in all areas of the bank. I am proud of the way we are executing on the recent acquisitions and our new markets are proving to be healthy.”

Second Quarter 2018 compared to First Quarter 2018

Net income of $3.9 million for the second quarter of 2018, compared to $3.4 million in the prior quarter. Diluted net income per share was $0.32 for the second quarter of 2018, compared to $0.30 during the first quarter of 2018. Net operating earnings (Non-GAAP), which excludes securities gains and merger expenses, totaled $4.8 million in the second quarter of 2018 compared to $3.8 million in the previous quarter.

Net interest income to average assets of 4.03 percent for the quarter increased from 3.93 percent in the first quarter of 2018. Net interest income totaled $19.5 million in the second quarter of 2018 compared to $16.8 million in the first quarter of 2018. Net interest margin, taxable equivalent, increased from 4.38 percent in the first quarter of 2018 to 4.57 percent in the second quarter of 2018 as a result of increases on the yields of the core loan portfolio, yields of the securities portfolio, and higher accretion income on acquired loans.

Provision for loan losses was $617 thousand in the second quarter of 2018, compared to $689 thousand in the first quarter of 2018. The decrease in provision for loan losses was due to slightly slower growth of the organic loan portfolio during the period.  The allowance for loan losses and leases ("ALLL") was $7.1 million, or 0.45 percent of total loans as of June 30, 2018, compared to
$6.5 million, or 0.47 percent of total loans, as of March 31, 2018.

Nonperforming loans as a percentage of total loans was 0.11 percent as of June 30, 2018, which was a decrease from 0.14 percent in the prior quarter. Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.25 percent as of June 30, 2018, compared to 0.26 percent as of March 31, 2018.  There were $20.7 million in discounts on $622.4 million of purchased loans as of June 30, 2018 compared to $16.3 million of discounts on $492.9 million of purchased loans as of March 31, 2018.

Noninterest income to average assets of 0.33 percent for the period decreased slightly from 0.34 percent in the first quarter of 2018. Noninterest income totaled $1.6 million in the second quarter of 2018, compared to $1.5 million in the first quarter of 2018.

Noninterest expense to average assets of 3.15 percent for the quarter increased from 3.09 percent in the first quarter of 2018. Noninterest expense totaled $15.3 million in the second quarter of 2018, an increase of $2.1 million from the first quarter of 2018, primarily due higher merger expenses and two months of salaries and employee benefits for associates added by the Tennessee Bancshares acquisition. Income tax expense was $1.3 million in the second quarter of 2018 compared to $0.9 million in the first quarter of 2018. The company's effective tax rate increased to 24.8 percent in the second quarter of 2018 compared to 21.6 percent in the first quarter of 2018, due to higher nondeductible merger expenses and a decrease in exercised options with associated tax benefits.

Second Quarter 2018 compared to Second Quarter 2017

Net income totaled $3.9 million in the second quarter of 2018, or $0.32 per diluted share, compared to $1.6 million, or $0.20 per diluted share, in the second quarter of 2017.  Net operating earnings (Non-GAAP), which excludes securities gains and merger expenses, totaled $4.8 million in the second quarter of 2018 compared to $2.1 million in the second quarter of 2017.

Net interest income to average assets of 4.03 percent for the quarter increased from 3.81 percent in the second quarter of 2017 as the average earning asset balances and yields increased compared to the prior year.  Net interest income totaled $19.5 million in the second quarter of 2018 compared to $10.2 million in the second quarter of 2017. Net interest income was positively impacted compared to the prior year due to increases in loan and securities balances and increases in the yields of the loan and securities portfolios.  Net interest margin, taxable equivalent, increased from 4.15 percent in the second quarter of 2017 to 4.57 percent in the second quarter of 2018 as a result of increases on the yields of the core loan portfolio, yields on the securities portfolio, and higher accretion income on acquired loans.

Provision for loan losses was $617 thousand in the second quarter of 2018, compared to $298 thousand in the second quarter of 2017. The increase in provision for loan losses was due to faster growth of the organic loan portfolio during the period. The ALLL was $7.1 million, or 0.45 percent of total loans as of June 30, 2018, compared to $5.5 million, or 0.64 percent of total loans, as of June 30, 2017.

Nonperforming loans as a percentage of total loans was 0.11 percent as of June 30, 2018, a decrease from 0.13 percent in the prior year. Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.25 percent as of June 30, 2018, compared to 0.30 percent as of June 30, 2017.

Noninterest income to average assets of 0.33 percent for the quarter decreased from 0.47 percent in the second quarter of 2017. Noninterest income totaled $1.6 million in the second quarter of 2018, compared to $1.3 million in the second quarter of 2017.

Noninterest expense to average assets of 3.15 percent for the quarter decreased from 3.29 percent in the second quarter of 2017. Noninterest expense totaled $15.3 million in the second quarter of 2018, compared to $8.8 million in the second quarter of 2017. The increases in noninterest expense over the prior year were primarily due to the acquisitions of Capstone in the fourth quarter of 2017 and Tennessee Bancshares in the second quarter of 2018. The Company's effective tax rate was 24.8 percent in the second quarter of 2018 compared to 30.6 percent in the second quarter of 2017, primarily due to the decrease in the federal tax rate for
2018.

Conference Call Information

SmartFinancial plans to issue its earnings release for the second quarter of 2018 on Tuesday, July 24, 2018, and will host a conference call on Wednesday, July 25, at 10:00 a.m. ET. To access this interactive teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the confirmation number, 5078284. A replay of the conference call will be available through July 25, 2019, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number, 10122430. Conference call materials (earnings release and conference call presentation) will be published on the company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile at 9:00 am ET prior to the morning of the conference call.

About SmartFinancial, Inc.

SmartFinancial, Inc., based in Knoxville, Tennessee, is the bank holding company for SmartBank. SmartBank is a full-service commercial bank founded in 2007, with 26 branches across Tennessee, Alabama, and 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.

Source
SmartFinancial, Inc.

Investor Contacts 
Billy CarrollRon Gorczynski
President & CEOExecutive Vice President, Chief Administrative Officer
(865) 868-0613   billy.carroll@smartbank.com(865) 437-5724   ron.gorczynski@smartbank.com
  
Media Contact 
Kelley Fowler 
Senior Vice President, Public Relations & Marketing 
(865) 868-0611   kelley.fowler@smartbank.com 
  

Non-GAAP Financial Matters  
Statements included in this press release include 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) net operating earnings available to common shareholders; (ii) operating efficiency ratio; and (iii) tangible common equity, in its analysis of the company's performance. Net operating earnings available to common shareholders excludes the following from net income available to common shareholders: securities gains and losses, merger conversion expenses, and the effect of the December, 2017 tax law change on deferred tax assets, and the income tax effect of adjustments. The operating efficiency ratio excludes securities gains and losses and merger expenses from the efficiency ratio. Tangible common equity excludes total preferred stock, preferred stock paid in capital, goodwill, and other intangible assets. Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. 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.

Important Information for Shareholders
This press release shall not constitute an offer to sell, the solicitation of an offer to sell, or the solicitation of an offer to buy any securities or the solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed merger with Foothills Bancorp, Inc. (“Foothills Bancorp”), SmartFinancial will file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”), which will contain the proxy statement of Foothills Bancorp and a prospectus of SmartFinancial. Shareholders of Foothills Bancorp are encouraged to read the registration statement, including the proxy statement/prospectus that will be part of the registration statement, because it will contain important information about the proposed merger, Foothills Bancorp, and SmartFinancial. After the registration statement is filed with the SEC, the proxy statement/prospectus and other relevant documents will be mailed to Foothills Bancorp shareholders and will be available for free on the SEC’s website (www.sec.gov). The proxy statement/prospectus will also be made available for free by contacting Ron Gorczynski, SmartFinancial’s Chief Administrative Officer, at 865.437.5724 or Mark Loudermilk, the President and Chief Executive Officer of Foothills Bancorp, at 865.738.2230. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Forward-Looking Statements
Certain of the statements made in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements, including statements regarding the intent, belief, or current expectations of SmartFinancial’s management regarding the company’s strategic direction, prospects, or future results or the benefits of the proposed merger with Foothills Bancorp (the “Foothills merger”), are subject to numerous risks and uncertainties. Such risks and uncertainties include, among others, (1) the risk that the cost savings and revenue synergies anticipated in connection with the Foothills merger may not be realized or may take longer than anticipated to be realized, (2) disruption from the Foothills merger with customers, suppliers, or employee or other business relationships, (3) the occurrence of any event, change, or other circumstances that could give rise to the termination of the merger agreement with Foothills Bancorp, (4) the risk of successful integration of our business with that of Foothills Bancorp, (5) the failure of Foothills Bancorp’s shareholders to approve the merger agreement, (6) the amount of costs, fees, expenses, and charges related to the Foothills merger, (7) our ability to successfully integrate the businesses acquired as part of previous mergers with that of SmartBank, (8) reputational risk and the reaction of our customers and Foothills Bancorp’s customers to the Foothills merger, (9) the failure of the conditions to closing of the Foothills merger to be satisfied, (10) the risk that the integration of our merger partners’ businesses into our operations will be materially delayed or will be more costly or difficult than expected, (11) the possibility that the Foothills merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (12) the dilution caused by SmartFinancial’s issuance of additional shares of its common stock in the Foothills merger, (13) changes in management’s plans for the future, (14) prevailing economic and political conditions, particularly in our market areas, (15) credit risk associated with our lending activities, (16) changes in interest rates, loan demand, real estate values, and competition, (17) changes in accounting principles, policies, or guidelines, (18) changes in applicable laws, rules, or regulations, and (19) other competitive, economic, political, and market factors affecting our business, operations, pricing, products, and services. Certain additional factors which could affect the forward-looking statements can be found in SmartFinancial’s 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 SEC and available on the SEC’s website (www.sec.gov). SmartFinancial disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events, or otherwise.

 
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited) 
(In thousands except per share data)
 
 As of and for the three months ending
  June 30,  March 31,  December 31,  September 30,  June 30, 
Selected Performance Ratios (Annualized) 2018  2018  2017  2017  2017 
Return on average assets 0.81% 0.80% 0.01% 0.59% 0.61%
Net operating return on average assets (Non-GAAP) 1.00% 0.89% 0.99% 0.63% 0.61%
Return on average shareholder equity 6.76% 6.25% 0.08% 4.91% 4.95%
Net operating return on average shareholder equity (Non-GAAP) 8.33%  6.97% 7.98%  5.30% 4.91%
Net interest income / average assets 4.03% 3.93% 4.09% 3.81% 3.81%
Yield on Earning Assets 5.37% 5.04% 5.07% 4.69% 4.66%
Yield on earning assets, TE 5.38% 5.05% 5.09% 4.70% 4.66%
Cost of interest-bearing liabilities 1.00% 0.82% 0.70% 0.68% 0.65%
Net interest margin 4.56% 4.37% 4.51% 4.16% 4.14%
Net interest margin, TE 4.57% 4.38% 4.51% 4.17% 4.15%
Noninterest income / average assets 0.33% 0.34% 0.42% 0.43% 0.47%
Noninterest expense / average assets 3.15% 3.09% 3.35% 3.34% 3.29%
Efficiency ratio 72.33% 72.38% 74.26% 78.67% 76.77%
Operating efficiency ratio (Non-GAAP) 64.82% 69.12% 60.64% 76.12% 71.79%
Pre-tax pre-provision income / average assets 1.21% 1.18% 1.16% 0.90% 0.96%
      
 Per Common Share     
Net income, basic$   0.32 $   0.30 $   — $   0.20 $   0.20 
Net income, diluted 0.32  0.30    0.20  0.20 
Net operating earnings, basic (Non-GAAP) 0.40  0.35  0.35  0.22  0.25 
Net operating earnings, diluted (Non-GAAP) 0.39  0.35  0.35  0.22  0.25 
Book value as of 19.48  18.60  18.46  16.57  16.39 
Tangible book value (Non-GAAP) as of 14.09  14.09  13.90  15.67  15.48 
                
Common shares outstanding as of  12,705  11,234  11,153  8,243  8,219 
                
Composition Of Loans               
Real estate commercial               
owner occupied$360,294 $ 288,666 $281,297 $ 210,489 $211,469 
non-owner occupied 385,536  375,028  361,691  237,131  233,707 
Real Estate Commercial, Total 745,830  663,694  642,988  447,620  445,176 
Commercial & industrial 279,341  256,333  238,087  119,782  105,129 
Real estate construction & development 179,361  142,702  135,409  98,212  101,151 
Real estate residential 355,755  299,148  293,457  199,704  206,667 
Other loans 15,148  12,380  13,317  6,361  7,298 
Total loans$1,575,435 $1,374,257 $ 1,323,258 $ 871,679 $865,421 
                

 


 
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited) 
(In thousands except per share data)
  
 As of and for the three months ending
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
Asset Quality Data and Ratios
Nonperforming loans$   1,730  $   1,931  $   1,764  $   1,264  $   1,147 
Foreclosed assets 3,524   2,665   3,254   2,888   2,369 
Total nonperforming assets$   5,254  $   4,596  $   5,018  $   4,152  $   3,516 
Restructured loans not included in nonperforming loans$   660  $   40  $   41  $   42  $   — 
Net charge-offs (recoveries) to average loans (annualized)                                                    0.02%  0.02%  (0.01)%  (0.02)%  (0.04)%
Allowance for loan losses to loans 0.45%  0.47%  0.44%  0.62%  0.64%
Nonperforming loans to total loans, gross 0.11%  0.14%  0.13%  0.15%  0.13%
Nonperforming assets to total assets 0.25%  0.26%  0.29%  0.37%  0.30%


Capital Ratios          
Tangible equity to tangible assets (Non- GAAP)8.98%9.26%9.28%11.45%11.18%
Tangible common equity to tangible assets(Non-GAAP) 8.98%9.26%9.28%11.45%11.18%
SmartFinancial, Inc.:Estimated1     
Tier 1 leverage9.37%9.59%10.48%11.46%11.91%
Common equity Tier 110.36%10.84%10.59%13.37%13.43%
Tier 1 capital10.36%10.84%10.59%13.37%13.43%
Total capital10.76%11.27%10.98%13.93%14.00%
SmartBank:Estimated1     
Tier 1 leverage9.85%10.17%11.26%10.57%10.98%
Common equity Tier 110.89%11.12%10.90%12.30%12.32%
Tier 1 risk-based capital10.89%11.12%10.90%12.30%12.32%
Total risk-based capital11.30%11.56%11.30%12.86%12.89%
 
1 Current period capital ratios are estimated as of the date of this earnings release.


 
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited) 
(In thousands except per share data)
BALANCE SHEET 
 Ending Balances 
 June 30,
2018
March 31,
2018
December 31,
2017
September 30,
2017
June 30,
2017
Assets     
Cash & cash equivalents$   170,235 $   96,710 $   113,027 $   84,098 $   82,835 
Securities available for sale 156,577  156,210  151,945  115,535  132,762 
Other investments 8,273  7,808  6,431  6,081  6,080 
Total loans 1,575,435  1,374,257  1,323,258  871,679  865,421 
Allowance for loan losses (7,074) (6,477) (5,860) (5,393) (5,498)
Loans, net 1,568,361  1,367,780  1,317,398  866,286  859,923 
Premises and equipment 52,203  44,202  43,000  33,778  33,765 
Foreclosed assets 3,524  2,665  3,254  2,888  2,369 
Goodwill and other intangibles 68,449  50,660  50,837  7,414  7,492 
Cash surrender value of life insurance 21,944  21,797  21,647  11,484  11,392 
Other assets 12,666  12,593  13,232  8,258  8,861 
Total assets$   2,062,232 $   1,760,425 $   1,720,771 $   1,135,822 $   1,145,479 


Liabilities               
Noninterest demand$   301,318 $   276,249 $   220,520 $   185,386 $   183,324 
Interest-bearing demand 246,943  278,965  231,644  156,953  156,150 
Money market and savings 632,518  491,243  543,645  306,358  324,014 
Time deposits 535,879  453,276  442,774  311,490  318,147 
Total deposits 1,716,658  1,499,733  1,438,583  960,187  981,635 
Repurchase agreements 18,635  15,968  24,055  26,542  22,946 
FHLB & other borrowings 72,040  30,000  43,600  6,000   
Other liabilities 7,412  5,775  8,681  6,505  6,164 
Total liabilities 1,814,745  1,551,476  1,514,919  999,234  1,010,745 
Shareholders' Equity     
Preferred stock          
Common stock 12,705  11,234  11,152  8,243  8,219 
Additional paid-in capital 208,513  174,981  174,009  107,065  106,794 
Retained earnings 29,235  25,303  21,889  21,654  19,969 
Accumulated other comprehensive loss (2,966) (2,569) (1,198) (374) (248)
Total shareholders' equity 247,487  208,949  205,852  136,588  134,734 
Total liabilities & shareholders' equity$   2,062,232 $   1,760,425 $   1,720,771 $   1,135,822 $   1,145,479 

 

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited) 
(In thousands except per share data)
INCOME STATEMENT
 
 Three months ending
  June 30,  March 31, December 31, September 30, June 30,
Interest Income 2018  2018 2017 2017 2017
Loans, including fees$   21,652 $   18,228$   16,357$   11,491$   10,747
Investment securities and interest bearing due froms 1,197  1,049 770 740 692
Other interest income 144  101 117 86 78
Total interest income 22,993  19,378 17,244 12,317 11,517
Interest Expense     
Deposits 3,238  2,401 1,806 1,373 1,241
Repurchase agreements 11  13 15 15 16
FHLB and other borrowings 206  153 81 5 11
Total interest expense 3,455  2,567 1,902 1,393 1,268
Net interest income 19,538  16,811 15,342 10,924 10,249
Provision for loan losses 617  689 442 30 298
Net interest income after provision for loan losses 18,921  16,122 14,900 10,894 9,951
Noninterest income     
Service charges on deposit accounts 557  578 524 294 291
(Loss) gain on securities (1)   144 
Gain on sale of loans and other assets 322  325 366 224 405
Interchange and debit card transaction fees 121  146 304 233 223
Other noninterest income 579  406 386 352 333
Total noninterest income 1,578  1,455 1,580 1,247 1,252
Noninterest expense     
Salaries and employee benefits 7,648  7,176 6,272 5,035 4,758
Occupancy expense 1,522  1,533 1,217 1,114 963
FDIC premiums 317  102 150 102 61
Foreclosed asset expense 240  189 59 47 12
Marketing 215  185 167 177 129
Data Processing 600  526 583 483 475
Professional expenses 918  898 602 472 473
Amortization of other intangibles 229  188 155 78 61
Service contracts 492  479 426 363 313
Merger Expense 1,123  498 1,694 303 420
Other noninterest expense 1,968  1,448 1,242 1,400 1,164
Total noninterest expense 15,272  13,222 12,567 9,574 8,829
Earnings before income taxes 5,227  4,355 3,913 2,567 2,374
Income tax expense 1,295  940 3,875 882 726
Net income    3,932  3,415 38 1,685 1,648
            
NET INCOME PER COMMON SHARE           
Basic 0.32 $0.300.200.20
Diluted 0.32  0.30  0.20 0.20
            
Weighted average common shares outstanding           
Basic 12,201  11,211 10,552 8,235 8,217
Diluted 12,320  11,324 10,709 8,333 8,326

   

 
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited) 
(In thousands except per share data)
YIELD ANALYSIS   
 Three Months Ended June 30, 2018Three Months Ended March 31, 2018Three Months Ended June 30, 2017
 Average
Balance
 
Interest1
Yield/
Cost1
Average
Balance
 
Interest1
Yield/
Cost1
Average
Balance
 
Interest1
Yield/
Cost1
Assets         
Loans$1,501,008$21,6545.79%$   1,346,179$ 18,2305.49%$ 834,665$   10,7525.17%
Investment securities and interest bearing due froms 207,524 1,2182.35% 203,923 1,0592.11% 151,840 7071.87%
Federal funds and other 8,992 1446.42% 8,414 1014.87% 5,628 785.56%
Total interest-earning assets 1,717,524 23,0165.38% 1,558,516 19,3905.05% 992,133 11,5374.66%
Non-interest-earning assets 226,820   176,646   85,553 
Total assets$1,944,344  $   1,735,162  $1,077,686


Liabilities and Stockholders’ Equity 
Interest-bearing demand deposits$   254,496$   2650.42%$   249,846$   3200.52%$ 156,387$   1150.29%
Money market and savings deposits 586,981 1,4180.97% 526,093 8700.67% 300,448 4240.57%
Time deposits 510,447 1,5551.22% 454,660 1,2111.08% 305,171 7020.92%
Total interest-bearing deposits 1,351,924 3,2380.96% 1,230,599 2,4010.79% 762,006 1,2410.65%
Securities sold under agreement to         
repurchase 15,643 110.28% 16,186 130.33% 19,903 160.32%
Federal Home Loan Bank advances         
and other borrowings 22,780 2063.64% 26,655 1532.33% 3,482 111.27%
Total interest-bearing liabilities 1,390,347 3,4551.00% 1,273,440 2,5670.82% 785,391 1,2680.65%
Noninterest-bearing deposits 283,494   231,355   157,965    
Other liabilities 37,218   8,656   659    
Total liabilities 1,711,059   1,513,451   944,015    
Shareholders’ equity 233,285   221,711   133,671    
Total liabilities and stockholders’           
equity$1,944,344  $   1,735,162  $1,077,686    
Net interest income, taxable equivalent           $19,561    $16,823     $10,269  
Interest rate spread   4.38%    4.23%    4.01
Tax equivalent net interest margin   4.57%    4.38%    4.15%
Percentage of average interest-
earning assets to average interest-
bearing liabilities
   123.53%    122.39%    126.32
Percentage of  average equity to
average assets 
   12.00%    12.78%    12.40
                
1 Taxable equivalent              


SmartFinancial, Inc. and Subsidiary               
Condensed Consolidated Financial Information (unaudited)                
(In thousands)               
NON-GAAP RECONCILIATIONSThree months ended
 June 30,March 31,December 31,September 30,June 30,
 20182018201720172017
Operating Earnings
               
Net income (GAAP)$   3,932 $   3,415 $   38 $   1,685 $   1,648 
Securities (gains) losses 1      (144)  
Merger expenses 1,123  498  1,694  303  420 
Revaluation of deferred tax assets due to change in tax law     2,482     
Income tax effect of adjustments (211) (103) (506) (25) (3)
Net operating earnings (Non-GAAP) 4,845  3,810  3,707  1,819  2,065 
Net operating earnings per common share (Non-GAAP):     
Basic$   0.40 $   0.34 $   0.35 $   0.22 $   0.25 
Diluted 0.39  0.34  0.35  0.22  0.25 
 
Operating Efficiency Ratio               
Efficiency ratio (GAAP) 72.33% 72.97% 74.25% 78.62% 76.77%
Adjustment for taxable equivalent yields (0.15)% (0.09)% (0.13)% (0.22)% (0.22)%
Adjustment for securities gains (losses) (0.01)% % % 1.50% %
Adjustment for merger & conversion costs        (7.35)% (3.76)% (13.48)% (3.18)% (4.76)%
Operating efficiency ratio (Non-GAAP) 64.82% 69.12% 60.64% 76.72% 71.79%
                
Loan Discount Data
Allowance for loan losses (GAAP)$ 7,074 $6,477 $5,860 $ 5,393 $ 5,498 
Net acquisition accounting fair value discounts to loans 20,748  16,323  17,862  8,167  9,086 
                
Tangible Common Equity               
Shareholders' equity (GAAP)$247,487 $208,949 $205,852 $136,588 $134,734 
Less goodwill and other intangible assets 68,449  50,660  50,837  7,414  7,492 
Tangible common equity (Non-GAAP)$179,038 $158,289 $155,015 $ 129,174 $ 127,242 
                


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Source: SmartFinancial, Inc.