Email page Email page PDF view PDF view Print view Print view Email Alert Email Alert

Press Release

SmartFinancial Announces First Quarter 2019 Net Income of $4.7 million, a 39% Year over Year Increase

Net operating earnings (Non-GAAP) of $5.5 million for the quarter

Company Release - 4/24/2019 5:00 PM ET

Performance Highlights

  • Return on average assets of 0.84 percent and net operating return on average assets (non-GAAP) of 0.98 percent.
  • Yield on earning assets, taxable equivalent, of 5.25 percent, an increase of 0.24 percentage points from a year ago.
  • Quarterly loan growth of $63.3 million or 14.5 percent annualized.
  • Noninterest expense to average assets of 2.77 percent, a decrease of 0.32 percentage points from a year ago.

KNOXVILLE, Tenn., April 24, 2019 (GLOBE NEWSWIRE) -- SmartFinancial, Inc. ("SmartFinancial"; NASDAQ: SMBK), today announced net income of $4.7 million for the first quarter of 2019, compared to $3.4 million a year ago. Diluted net income per share was $0.34 for the first quarter of 2019, compared to $0.30 during the first quarter of 2018.

Billy Carroll, President & CEO, stated:  "This quarter we had very strong organic loan growth of over $60 million and had outstanding growth in earnings compared to the same quarter last year. Demand deposits increased significantly, while we were able to keep the costs of those deposits at very reasonable levels. As an organization we continue to improve on our efficiencies as we capture further economies of scale, highlighted by the further reduction in noninterest expense to average assets. Our team also did an outstanding job integrating the Foothills Bank acquisition during the quarter as we continue to build a great core bank."

SmartFinancial's Chairman, Miller Welborn, concluded: "We are looking forward to carrying the momentum from this strong start into the remainder of the year. Strong organic loan growth, supported by core demand deposit funding while maintaining stringent credit quality positions us well for the future. The opportunities we have for this company have never been greater. We are well on our way in creating one of the Southeast’s next great community banking franchises."

First Quarter 2019 compared to Fourth Quarter 2018

Net income was $4.7 million for the first quarter of 2019, a decrease from $6.4 million in the prior quarter primarily due to a change in tax expense. Diluted net income per share was $0.34 for the first quarter of 2019, compared to $0.47 during the fourth quarter of 2018. Net operating earnings (non-GAAP) totaled $5.5 million in the first quarter of 2019 compared to $5.9 million in the previous quarter. SmartFinancial completed the acquisition of Foothills Bancorp, Inc. and its wholly owned subsidiary Foothills Bank & Trust in November of 2018 and this quarter includes three full months of the results of the acquired company.

Net interest income to average assets of 3.73 percent for the quarter decreased from 3.89 percent in the fourth quarter of 2018, primarily due to lower accretion on acquired loans and higher deposit costs. Net interest income totaled $21.0 million in the first quarter of 2019, compared to $21.4 million in the fourth quarter of 2018. Net interest margin, taxable equivalent, decreased from 4.28 percent in the fourth quarter of 2018 to 4.10 percent in the first quarter of 2019 as earning asset yields decreased while the cost of interest-bearing liabilities increased.

Provision for loan losses was $797 thousand in the first quarter of 2019, compared to $1.3 million in the fourth quarter of 2018. The allowance for loan losses was $8.7 million, or 0.47 percent of total loans, as of March 31, 2019, compared to $8.3 million, or 0.46 percent of total loans, as of December 31, 2018.

Nonperforming loans as a percentage of total loans was 0.12 percent as of March 31, 2019, which was a decrease from 0.16 percent in the prior quarter due to a reduction in impaired loan balances.  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 0.18 percent as of March 31, 2019, compared to 0.24 percent as of December 31, 2018.

Noninterest income to average assets of 0.30 percent for the current period decreased slightly from 0.31 percent in the fourth quarter of 2018 due to higher average asset balances. Noninterest income totaled $1.7 million in the first quarter of 2019, compared to $1.7 million in the fourth quarter of 2018.

Noninterest expense to average assets of 2.77 percent for the quarter decreased from 2.85 percent in the fourth quarter of 2018. Noninterest expense totaled $15.6 million in the first quarter of 2019 compared to $15.7 million in the fourth quarter of 2018 and included $923 thousand in merger expenses compared to $1.3 million in the prior period. Income tax expense was $1.6 million in the first quarter of 2019 compared to a benefit of $307 thousand in the fourth quarter of 2018.  The company's effective tax rate was 25.1 percent in the first quarter of 2019 compared to a benefit in the fourth quarter of 2018. The benefit in 2018 resulted from director options previously exercised.

First Quarter 2019 compared to First Quarter 2018

Net income totaled $4.7 million in the first quarter of 2019, or $0.34 per diluted share, compared to $3.4 million, or $0.30 per diluted share, in the first quarter of 2018.  Net operating earnings (non-GAAP) totaled $5.5 million in the first quarter of 2019 compared to $3.8 million in the first quarter of 2018.

Net interest income to average assets of 3.73 percent for the quarter decreased from 3.93 percent in the first quarter of 2018. Net interest income totaled $21.0 million in the first quarter of 2019, compared to $16.8 million in the first quarter of 2018. Net interest income was positively impacted compared to the prior year due to increases in average loan and securities balances and increases in the yields of the loan and securities portfolios. Net interest margin, taxable equivalent, decreased from 4.35 percent in the first quarter of 2018 to 4.10 percent in the first quarter of 2019 as a result of increases in the cost of deposits and the subordinated debt issued in the third quarter of 2018.

Provision for loan losses was $797 thousand in the first quarter of 2019, compared to $689 thousand in the first quarter of 2018. The allowance for loan losses was $8.7 million, or 0.47 percent of total loans, as of March 31, 2019, 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 0.12 percent as of March 31, 2019, a decrease from 0.14 percent in the first quarter of 2018. 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 0.18 percent as of March 31, 2019, compared to 0.26 percent as of March 31, 2018.

Noninterest income to average assets of 0.30 percent for the quarter decreased from 0.34 percent in the first quarter of 2018 due to higher average asset balances. Noninterest income totaled $1.7 million in the first quarter of 2019, compared to $1.5 million in the first quarter of 2018.

Noninterest expense to average assets of 2.77 percent for the quarter decreased from 3.09 percent in the first quarter of 2018. Noninterest expense totaled $15.6 million in the first quarter of 2019, compared to $13.2 million in the first quarter of 2018 and included $923 thousand in merger expenses compared to $498 thousand a year ago.  The increases in noninterest expense over the prior year in salaries and employee benefits and occupancy expense were primarily due to the acquisitions of Tennessee Bancshares, Inc. in the second quarter of 2018 and Foothills Bancorp, Inc. in the fourth quarter of 2018. The company's effective tax rate was 25.1 percent in the first quarter of 2019 compared to 21.6 percent in the first quarter of 2018 where the rate was positively impacted due the benefits from options exercised.

Conference Call Information

SmartFinancial will host a conference call on Thursday, April 25, 2019 at 10:00 a.m. ET to discuss first quarter 2019 results and other matters. To access this interactive teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the confirmation number, 2152022. A replay of the conference call will be available through April 25, 2020, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number, 10130759. Conference call materials (earnings release & conference call presentation will be published on the company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile by 9:00 a.m. ET 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 29 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.

Source
SmartFinancial, Inc.
 
  
Investor Contacts
Billy Carroll
President & CEO
(865) 868-0613  billy.carroll@smartbank.com
Ron Gorczynski
Executive Vice President, Chief Administrative Officer
(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) net operating return on average assets, (iii) net operating return on average shareholder equity, (iv) return on average average tangible common equity, (v) net operating return on average tangible common equity, (vi) operating efficiency ratio; (vii) tangible common equity; and (viii) average 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 related expenses, the effect of the December, 2017 tax law change on deferred tax assets, tax benefit from director options previously exercised, and the income tax effect of adjustments. Net operating return on average equity is the annualized net operating earnings divided by average assets. Net operating return on average equity is the annualized net operating earnings divided by average equity.  Return on average tangible common equity is the annualized net income divided by average tangible common equity.  Net operating return on average tangible common equity is the annualized net operating earnings divided by average tangible common equity (non-GAAP). The operating efficiency ratio includes an adjustment for taxable equivalent yields and excludes securities gains and losses and merger related expenses from the efficiency ratio.  Tangible common equity and average tangible common equity excludes 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.

FORWARD LOOKING STATEMENTS

Certain of the statements made in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” and “estimate,” and similar expressions, are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements pertaining to the intent, belief, or current expectations of SmartFinancial’s management regarding the company’s strategic direction, plans, objectives, prospects, or future results or financial performance. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of SmartFinancial to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others, (1) the risk that the recent announcement of the termination of our agreement and plan of merger with Entegra Financial Corp. (the “Entegra Merger Agreement”) could have adverse effects on the market price of our common stock; (2) the risk that the termination of the Entegra Merger Agreement or the announcement of the same could have an adverse effect on our business generally, including our ability to retain customers, retain or hire key personnel, or maintain relationships with customers or suppliers; (3) reputational risk from the announcement of the termination of the Entegra Merger Agreement.; (4) the fact that we have incurred significant costs and expenses related to the Entegra Merger Agreement and the transactions that were contemplated by the Entegra Merger Agreement; (5) the risk of litigation related to the termination of the Entegra Merger Agreement or the abandonment of the transactions that were contemplated by the Entegra Merger Agreement; (6) potential changes to, or the risk that we may not be able to execute on, our business strategy as a result of the termination of the Entegra Merger Agreement; (7) the risk that cost savings and revenue synergies from recently completed acquisitions may not be realized or may take longer than anticipated to realize, (8) disruption from recently completed acquisitions with customer, supplier, employee, or other business relationships, (9) our ability to successfully integrate the businesses acquired as part of previous acquisitions with the business of SmartBank, (10) changes in management’s plans for the future, (11) prevailing, or changes in, economic or political conditions, particularly in our market areas, (12) credit risk associated with our lending activities, (13) changes in interest rates, loan demand, real estate values, or competition, (14) changes in accounting principles, policies, or guidelines, (15) changes in applicable laws, rules, or regulations, and (16) other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or 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 Securities and Exchange Commission (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 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 
  March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 
Selected Performance Ratios (Annualized) 
Return on average assets  0.84%  1.17%  0.85%  0.81%  0.80%
Net operating return on average assets (Non-GAAP)  0.98%  1.07%  0.98%  1.00%  0.89%
Return on average shareholder equity  6.71%  9.42%  6.86%  6.76%  6.25%
Net operating return on average shareholder equity (Non-GAAP)  7.81%  8.65%  7.88%  8.33%  6.97%
Return on average tangible common equity (Non-GAAP)  9.26%  13.06%  9.45%  8.96%  8.10%
Net operating return on average tangible common  equity (Non-GAAP) 10.79%  12.00%  10.84%  11.04%  9.04%
Net interest income / average assets  3.73%  3.89%  3.70%  4.03%  3.93%
Yield on Earning Assets  5.23%  5.34%  5.02%  5.34%  5.00%
Yield on earning assets, TE  5.25%  5.35%  5.03%  5.34%  5.01%
Cost of interest-bearing liabilities  1.45%  1.34%  1.15%  1.00%  0.82%
Net Interest margin  4.08%  4.27%  4.11%  4.53%  4.35%
Net interest margin, TE  4.10%  4.28%  4.11%  4.54%  4.35%
Noninterest income / average assets  0.30%  0.31%  0.36%  0.33%  0.34%
Noninterest expense / average assets  2.77%  2.85%  2.90%  3.15%  3.09%
Efficiency ratio  68.65%  67.80%  71.33%  72.34%  72.39%
Operating efficiency ratio (Non-GAAP)  64.25%  61.72%  67.17%  66.92%  69.62%
Pre-tax pre-provision income / average assets  1.23%  1.35%  1.16%  1.21%  1.18%
 
Per Common Share 
Net income, basic $0.34  $0.48  $0.34  $0.32  $0.30 
Net income, diluted  0.34   0.47   0.34   0.32   0.30 
Net operating earnings, basic (Non-GAAP)  0.40   0.44   0.39   0.40   0.34 
Net operating earnings, diluted (Non-GAAP)  0.39   0.43   0.39   0.39   0.34 
Book value  20.82   20.31   19.74   19.48   18.6 
Tangible book value (Non-GAAP)  15.18   14.64   14.38   14.09   14.09 
 
Common shares outstanding  13,952   13,934   12,750   12,705   11,234 
 
  As of and for the three months ending 
  March 31, 2019  December 31, 2018  September 30, 2018  June 30, 2018  March 31, 2018  
Composition of Loans 
Real estate commercial 
owner occupied $416,152  $372,030  $364,164  $360,294  $288,666 
non-owner occupied  476,234   487,997   400,275   385,536   375,028 
Total real estate commercial  892,386   860,027   764,439   745,830   663,694 
Commercial & financial  341,015   308,254   289,732   279,341   256,333 
Real estate construction & development  186,427   187,895   166,089   179,361   142,702 
Real estate residential  408,661   407,254   351,948   355,755   299,148 
Other loans  12,080   13,809   12,986   15,148   12,380 
Total loans $1,840,569  $1,777,239  $1,585,194  $1,575,434  $1,374,257 
 
Asset Quality Data and Ratios 
Nonperforming loans $2,158  $2,856  $2,604  $1,730  $1,930 
Foreclosed assets  2,066   2,495   4,230   3,524   2,665 
Total nonperforming assets $4,224  $5,351  $6,834  $5,254  $4,595 
Restructured loans not included in nonperforming loans $32  $116  $369  $660  $40 
Net charge-offs to average loans (annualized)  0.08%  0.04%  0.06%  0.02%  0.02%
Allowance for loan losses to loans  0.47%  0.46%  0.45%  0.45%  0.47%
Nonperforming loans to total loans, gross  0.12%  0.16%  0.16%  0.11%  0.14%
Nonperforming assets to total assets  0.18%  0.24%  0.33%  0.25%  0.26%
Acquisition accounting discounts on loans $19,954  $21,528  $19,500  $20,748  $16,323 
Accretion income on all acquired loans  1,881   2,755   1,208   2,583   1,274 
 
Capital Ratios 
Equity to Assets  12.34%  12.44%  12.27%  12.00%  11.87%
Tangible equity to tangible assets (Non-GAAP)  9.31%  9.29%  9.25%  8.98%  9.26%
Tangible common equity to tangible assets (Non-GAAP)  9.31%  9.29%  9.25%  8.98%  9.26%
SmartFinancial, Inc.: Estimated(1) Estimated(1) Estimated(1)  
Tier 1 leverage  9.29%  9.47%  9.26%  9.82%  9.59%
Common equity Tier 1  10.72%  10.81%  10.88%  10.83%  10.84%
Tier 1 capital  10.72%  10.81%  10.88%  10.83%  10.84%
Total capital  13.14%  13.29%  13.57%  11.25%  11.27%
SmartBank: Estimated(2) 
Tier 1 leverage  10.60%  11.17%  10.55%  10.43%  10.17%
Common equity Tier 1  12.23%  12.31%  11.99%  11.41%  11.12%
Tier 1 risk-based capital  12.23%  12.31%  11.99%  11.41%  11.12%
Total risk-based capital  12.67%  12.75%  12.40%  11.83%  11.56%
 
(1) Effective 9/30/18 the company files the FRY-9SP which does not include capital ratios. 
(2) Ratios will be finalized with the filing of the Quarterly Call Report. 

 

           
SmartFinancial, Inc. and Subsidiary    
Condensed Consolidated Financial Information (unaudited)  
(In thousands)    
BALANCE SHEET          
  Ending Balances
  March 31, 2019  December 31, 2018  September 30, 2018  June 30, 2018  March 31, 2018 
Assets 
Cash & cash equivalents $132,994  $115,822  $130,104  $170,235  $96,710 
Securities available-for-sale  198,273   201,688   173,039   156,577   156,210 
Restricted investments, at cost  12,398   11,499   10,736   8,273   7,808 
Total loans  1,840,569   1,777,239   1,585,194   1,575,434   1,374,257 
Allowance for loan losses  (8,704)  (8,275)  (7,156)  (7,074)  (6,477)
Loans, net  1,831,865   1,768,964   1,578,038   1,568,361   1,367,780 
Bank premises and equipment, net  56,583   56,012   51,138   52,203   44,202 
Foreclosed assets  2,066   2,495   4,230   3,524   2,665 
Goodwill and core deposit intangible, net  78,690   79,034   68,254   68,449   50,660 
Cash surrender value of life insurance  24,539   24,381   22,088   21,944   21,797 
Other assets  16,909   14,514   13,320   12,666   12,593 
Total assets $2,354,317  $2,274,409  $2,050,946  $2,062,232  $1,760,425 
 
Liabilities          
Noninterest-bearing demand deposits $329,095  $319,861  $301,197  $301,318  $276,249 
Interest-bearing demand deposits  331,629   311,482   267,146   246,942   278,965 
Money market and savings deposits  698,431   641,945   570,172   632,518   491,243 
Time deposits  635,175   648,675   568,796   535,879   453,276 
Total deposits  1,994,330   1,921,964   1,707,311   1,716,658   1,499,733 
Securities sold under agreement to repurchase  7,070   11,756   16,786   18,635   15,968 
Federal funds purchased and other borrowings  8,605   11,243   25,324   72,040   30,000 
Subordinated debt  39,198   39,177   39,158       
Accrued expenses and other liabilities  14,633   7,258   10,724   7,413   5,775 
Total liabilities  2,063,836   1,991,398   1,799,304   1,814,745   1,551,476 
Stockholders' equity: 
Common stock  13,952   13,934   12,750   12,705   11,234 
Additional paid-in capital  232,241   231,852   208,999   208,513   174,981 
Retained earnings  44,722   39,991   33,559   29,235   25,303 
Accumulated other comprehensive loss  (434)  (2,765)  (3,666)  (2,966)  (2,569)
Total stockholders' equity  290,481   283,011   251,642   247,487   208,949 
Total liabilities and stockholders' equity $2,354,317  $2,274,409  $2,050,946  $2,062,232  $1,760,425 
 

 

           
SmartFinancial, Inc. and Subsidiary    
Condensed Consolidated Financial Information (unaudited)  
(In thousands, except per share data)    
INCOME STATEMENT          
  Three months ending
  March 31, 2019 December 31, 2018  September 30, 2018 June 30, 2018  March 31, 2018
Interest Income 
Loans, including fees $24,975 $25,017  $21,572 $21,652  $18,228
Securities  1,395  1,248   969  974   908
Federal funds sold and other earning assets  573  506   527  367   242
Total interest income  26,943  26,771   23,068  22,993   19,378
Interest Expense 
Deposits  5,251  4,680   3,969  3,238   2,401
Repurchase agreements  8  9   11  11   13
Subordinated debt  584  584   19     
FHLB and other borrowings  103  62   209  207   153
Total interest expense  5,946  5,335   4,208  3,455   2,567
Net interest income  20,997  21,436   18,860  19,538   16,811
Provision for loan losses  797  1,329   302  617   689
Net interest income after provision for loan losses 20,200  20,105   18,559  18,921   16,122
Noninterest income 
Service charges on deposit accounts  654  657   624  557   578
Gain (loss) on securities    2     (1)  
Gain on sale of loans and other assets  282  288   493  327   325
Interchange and debit card transaction fees  175  162   144  121   146
Other noninterest income  587  606   570  579   406
Total noninterest income  1,698  1,715   1,831  1,583   1,455
Noninterest expense 
Salaries and employee benefits  8,398  7,871   7,934  7,649   7,176
Occupancy expense  1,640  1,610   1,638  1,522   1,533
FDIC premiums  179  209   158  317   102
Foreclosed asset expense  62  262   79  245   189
Marketing  295  245   228  215   185
Data processing  615  372   407  600   526
Professional expenses  797  908   922  918   898
Amortization of other intangibles  344  312   248  229   188
Service contracts  567  577   507  492   479
Merger expense  923  1,322   838  1,123   498
Other noninterest expense  1,760  2,008   1,800  1,968   1,448
Total noninterest expense  15,579  15,696   14,759  15,278   13,222
Earnings before income taxes  6,319  6,124   5,630  5,226   4,355
Income tax expense (benefit)  1,588  (307)  1,305  1,295   940
Net income $4,731 $6,431  $4,325 $3,931  $3,415
 
NET INCOME PER COMMON SHARE 
Basic $0.34 $0.48  $0.34 $0.32  $0.30
Diluted  0.34  0.47   0.34  0.32   0.30
 
Weighted average common shares outstanding 
Basic  13,942  13,535   12,719  12,201   11,211
Diluted  14,018  13,617   12,818  12,320   11,324

 

                   
SmartFinancial, Inc. and Subsidiary          
Condensed Consolidated Financial Information (unaudited)        
(In thousands)            
YIELD ANALYSIS            
  Three Months Ended March 31, 2019 Three Months Ended December 31, 2018 Three Months Ended March 31, 2018
 Average   Yield/ Average   Yield/ Average   Yield/
  Balance Interest(1) Cost(1) Balance Interest(1) Cost(1) Balance Interest(1) Cost(1)
Assets            
Loans $1,802,014 $24,977 5.62% $1,708,450 $25,019 5.81% $1,352,319 $18,230 5.47%
Taxable securities  147,346  971 2.67%  145,950  901 2.45%  151,573  872 2.33%
Tax-exempt securities  53,492  537 4.07%  43,177  439 4.03%  6,366  55 3.50%
Federal funds sold and other earning assets  86,688  573 2.68%  96,356  506 2.08%  58,869  242 1.67%
Total interest-earning assets  2,089,540  27,058 5.25%  1,993,933  26,865 5.35%  1,569,127  19,399 5.01%
Noninterest-earning assets  193,698  183,333  166,035 
Total assets $2,283,238 $2,177,266 $1,735,162 
 
Liabilities and Stockholders’ Equity 
Interest-bearing demand deposits $306,164 $474 0.63% $266,311 $422 0.63% $249,846 $320 0.52%
Money market and savings deposits  665,018  1,978 1.21%  646,750  1,697 1.04%  526,093  870 0.67%
Time deposits  637,767  2,799 1.78%  616,008  2,561 1.65%  454,660  1,211 1.08%
Total interest-bearing deposits  1,608,949  5,251 1.32%  1,529,069  4,680 1.21%  1,230,599  2,401 0.79%
Securities sold under agreement to repurchase 7,971  8 0.41%  10,661  9 0.33%  16,186  12 0.31%
Federal funds purchased and other borrowings 10,217  103 4.09%  4,001  62 6.15%  26,655  153 2.32%
Subordinated debt  39,184  584 6.04%  39,177  584 5.91%      
Total interest-bearing liabilities  1,666,321  5,946 1.45%  1,582,908  5,335 1.34%  1,273,440  2,566 0.82%
Noninterest-bearing deposits  320,134  320,311  231,355 
Other liabilities  10,707  17,900  8,656 
Total liabilities  1,997,162  1,921,119  1,513,451 
Stockholders’ equity  286,076  256,147  221,711 
Total liabilities and stockholders’ equity $2,283,238 $2,177,266 $1,735,162 
 
Net interest income, taxable equivalent $21,112 $21,530 $16,823 
Interest rate spread 3.80% 4.01% 4.19%
Tax equivalent net interest margin 4.10% 4.28% 4.35%
 
Percentage of average interest-earning assets to average interest-bearing liabilities 125.40% 125.97% 123.22%
Percentage of average equity to average assets 12.53% 11.76% 12.78%
            
(1) Taxable equivalent 

 

              
SmartFinancial, Inc. and Subsidiary     
Condensed Consolidated Financial Information (unaudited)     
(In thousands)     
NON-GAAP RECONCILIATIONS Three months ending 
  March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 
Operating Earnings 
Net income (GAAP) $4,731  $6,444  $4,324  $3,931  $3,415  
Securities (gains) losses     (2)     1     
Merger expenses  923   1,322   838   1,123   498  
Tax benefit from director options previously exercised     (1,600)          
Income tax effect of adjustments  (145)  (256)  (196)  (211)  (103) 
Net operating earnings (Non-GAAP) $5,509  $5,908  $4,966  $4,844  $3,810  
Net operating earnings per common share (Non-GAAP): 
Basic $0.40  $0.44  $0.39  $0.40  $0.34  
Diluted  0.39   0.43   0.39   0.39   0.34  
 
Non-GAAP Return Ratios 
Net operating return on average assets (Non-GAAP)(1)  0.98%  1.07%  0.98%  1.00%  0.89% 
Net operating return on average shareholder equity (Non-GAAP)(2)  7.81%  8.65%  7.88%  8.33%  6.97% 
Return on average tangible common equity (Non-GAAP)(3)  9.26%  13.06%  9.45%  8.96%  8.10% 
Net operating return on average tangible common equity (Non-GAAP)(4) 10.79%  12.00%  10.84%  11.04%  9.04% 
 
Operating Efficiency Ratio 
Efficiency ratio (GAAP)  68.65%  67.71%  71.34%  72.31%  72.39% 
Adjustment for taxable equivalent yields  (0.49)%  (0.45)%  (0.18)%  (0.11)%  (0.06)% 
Adjustment for securities gains (losses)  %  0.01%  %  (0.01)%  % 
Adjustment for merger expenses  (3.91)%  (5.55)%  (3.99)%  (5.28)%  (2.71)% 
Operating efficiency ratio (Non-GAAP)  64.25%  61.72%  67.17%  66.92%  69.62% 
 
Tangible Common Equity 
Stockholders' equity (GAAP) $290,481  $283,011  $251,642  $247,487  $208,949  
Less goodwill and other intangible assets  78,690   79,034   68,254   68,449   50,660  
Tangible common equity (Non-GAAP) $211,791  $203,977  $183,388  $179,036  $158,289  
 
Average Tangible Common Equity 
Average stockholders' equity (GAAP) $286,076  $270,884  $250,063  $233,285  $221,711  
Less average goodwill and other intangible assets  78,913   75,547   68,389   57,251   50,780  
Average tangible common equity (Non-GAAP) $207,163  $195,337  $181,674  $176,034  $170,931  
 
 
(1) Net operating return on average assets (non-GAAP) is the annualized net operating earnings (non-GAAP) divided by average assets. 
(2) Net operating return on average equity (non-GAAP) is the annualized net operating earnings (non-GAAP) divided by average equity. 
(3) Return on average tangible common equity (non-GAAP) is the annualized net income divided by average tangible common equity (non-GAAP). 
(4) Net operating return on average tangible common equity (non-GAAP) is the annualized net operating earnings (non-GAAP) divided by  average tangible common equity (non-GAAP).

Clipboard01.jpg

Source: SmartFinancial, Inc.