Financial Data and Key Metrics Changes - The company reported net income of $11.3 million, or 67 cents per diluted share, for the first quarter of 2025 [10] - Tangible book value increased to $23.61 per share, representing over 9% annualized growth quarter over quarter [10] - Total revenue reached $46.8 million, with net interest income expanding as anticipated [12] Business Line Data and Key Metrics Changes - Loan growth was at a 9% annualized pace for Q1, meeting expectations, while deposit growth was at 10% quarter over quarter annualized [11] - Noninterest income for the quarter totaled $8.6 million, exceeding guidance, driven by strong insurance and mortgage banking revenues [20] - Operating expenses remained stable at just over $32 million, consistent with the previous quarter [20] Market Data and Key Metrics Changes - The average portfolio yield, including fees, was 5.97%, slightly down from the previous quarter [15] - The loan to deposit ratio held steady at 83%, providing flexibility for future growth [15][17] - The company anticipates a net interest margin of around 3.25% for Q2 2025, with expectations of margin expansion of 2 to 3 basis points quarterly throughout the year [19] Company Strategy and Development Direction - The company is focused on leveraging its growth phase, aiming for continued EPS growth and achieving near-term revenue targets [24] - There is an emphasis on recruiting talented team members to enhance revenue-generating capabilities, particularly in private banking and treasury management [26] - The company remains committed to organic growth while being open to potential M&A opportunities if they align with strategic goals [125][126] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth prospects despite market volatility, citing strong client relationships and business performance [34][35] - The company is closely monitoring the impact of tariffs on clients but has received positive feedback regarding order volumes and pricing stability [37][38] - Management believes that credit quality remains strong, with nonperforming assets at 0.19% of total assets [20] Other Important Information - The effective corporate tax rate for the quarter was approximately 17%, with expectations of stabilization between 18% to 19% going forward [21] - The company's consolidated TCE ratio increased to 7.6%, and total risk-based capital ratio remained well above regulatory standards at 11.2% [21] Q&A Session Summary Question: Customer sentiment and loan growth outlook - Management noted strong market conditions and positive client feedback, indicating confidence in maintaining loan growth [34][35] Question: Balance sheet leverage and loan to deposit ratio - The company has room to increase its loan to deposit ratio while ensuring prudent growth and maintaining appropriate credit structures [42][43] Question: Share repurchase plans - The company has approximately $1.5 million left for share repurchases and will consider buying back shares as valuations improve [49][50] Question: Margin expectations with potential Fed rate cuts - Management indicated that they are well-positioned to benefit from Fed rate cuts, with potential upside to margin expansion if cuts occur earlier than expected [58][60] Question: Fee income outlook and performance of investment services - The company expects fee income in the low to mid $8 million range for Q2, with strong performance in insurance and mortgage banking contributing to growth [96][100] Question: Equipment financing and leasing business line - Management expressed satisfaction with the growth of the equipment financing segment, indicating plans for continued expansion in this area [131][132]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $11.3 million or 67 cents per diluted share, reflecting strong performance [10] - Tangible book value increased to $23.61 per share, representing over 9% annualized growth quarter over quarter [11] - Total revenue reached $46.8 million, with net interest income expanding as anticipated [15] Business Line Data and Key Metrics Changes - Loan growth was at a 9% annualized pace for Q1, meeting expectations, while deposit growth was 10% quarter over quarter annualized [13] - Non-interest income for the quarter totaled $8.6 million, exceeding guidance due to strong insurance and mortgage banking revenues [28] - Operating expenses remained flat at just over $32 million, indicating effective cost management [29] Market Data and Key Metrics Changes - The loan to deposit ratio held steady at 83%, providing flexibility for future growth [20] - The weighted average cost of non-broker deposits was 3.39%, with total interest-bearing costs decreasing by 10 basis points to 0.92% [22] - Net interest margin was 3.21%, slightly down from the previous quarter but in line with guidance [24] Company Strategy and Development Direction - The company is focused on organic growth, with plans to leverage its strong market position and experienced team [33][39] - Talent acquisition remains a priority, with recent hires aimed at enhancing private banking and treasury management [36] - The company is optimistic about maintaining growth in EPS and achieving near-term revenue targets [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of their markets and customer sentiment, despite economic uncertainties [45][46] - The company anticipates continued loan growth and margin expansion, driven by new loan production and favorable market conditions [26][39] - Management remains cautious about potential impacts from tariffs but reports positive feedback from clients regarding order volumes [49][50] Other Important Information - The effective corporate tax rate for the quarter was approximately 17%, with expectations to stabilize between 18% to 19% going forward [30] - The company's consolidated TCE ratio increased to 6%, and total risk-based capital ratio remained well above regulatory standards at 11.2% [31] - The company welcomed a new board member, Kelly Showmaker, enhancing its governance and regional perspective [40] Q&A Session Summary Question: Customer sentiment and loan growth outlook - Management noted strong customer sentiment and confidence in maintaining loan growth despite market volatility [45][46] Question: Balance sheet leverage and deposit ratios - Management indicated room for prudent growth in the balance sheet while maintaining a strong loan to deposit ratio [53][58] Question: Share repurchases and capital actions - The company has $1.5 million left for share repurchases and is considering actions based on stock valuation [60][63] Question: Margin expectations and Fed rate cuts - Management expects two to three basis points of margin expansion quarterly, benefiting slightly from Fed rate cuts [68][70] Question: Fee income trends and investment services - Management anticipates low to mid $8 million range for non-interest income in Q2, with strong performance in insurance and mortgage banking [28][113] Question: Equipment financing and leasing business line - Management expressed satisfaction with the growth and performance of the equipment financing segment, indicating plans for further development [146][148]

Core Viewpoint - SmarFinancial (SMBK) reported quarterly earnings of $0.67 per share, exceeding the Zacks Consensus Estimate of $0.55 per share, and showing an increase from $0.49 per share a year ago, indicating a strong performance in the recent quarter [1][2] Financial Performance - The company achieved revenues of $46.84 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.84% and up from $40.1 million year-over-year [2] - Over the last four quarters, SmarFinancial has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - SmarFinancial shares have declined approximately 6.8% since the beginning of the year, while the S&P 500 has seen a decline of 10.2%, indicating relative outperformance [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.59, with expected revenues of $47.7 million, and for the current fiscal year, the EPS estimate is $2.45 on revenues of $193.93 million [7] - The trend of estimate revisions for SmarFinancial is mixed, which could change following the recent earnings report [6] Industry Context - The Banks - Northeast industry, to which SmarFinancial belongs, is currently ranked in the top 23% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact SmarFinancial's stock performance [5]

Financial Performance - SmartFinancial reported net income of $11.3 million, or $0.67 per diluted common share, for Q1 2025, up from $9.4 million, or $0.55 per diluted common share, in Q1 2024[2]. - Net income for Q1 2025 reached $11,254,000, an increase of 16.5% compared to $9,640,000 in Q4 2024[46]. - Basic earnings per share for Q1 2025 was $0.67, up from $0.58 in Q4 2024, marking a 15.5% increase[38]. - Operating earnings per common share (Non-GAAP) increased to $0.67 in Q1 2025 from $0.57 in Q4 2024, reflecting a growth of 17.6%[46]. - Return on average assets improved to 0.87% in Q1 2025, compared to 0.75% in Q4 2024[44]. - Return on average shareholders' equity increased to 9.17% in Q1 2025, up from 7.84% in Q4 2024[44]. Asset and Deposit Growth - Total assets increased to $5.41 billion as of March 31, 2025, compared to $5.28 billion at December 31, 2024, driven by an increase in loans and leases of $85.9 million[18]. - Total deposits rose by $122.2 million, primarily due to increases in money market deposits of $92.3 million and other time deposits of $54.9 million[19]. - Total assets increased to $5,411,217 thousand as of March 2025, up from $5,275,904 thousand in December 2024, representing a growth of 2.4%[37]. - Total deposits rose to $4,808,659 thousand, compared to $4,686,483 thousand in December 2024, marking an increase of 2.6%[37]. Loan and Lease Performance - The company achieved a net organic loan and lease growth of $86 million, reflecting a 9% annualized increase quarter-over-quarter[6]. - Loans and leases net amount reached $3,954,032 thousand, an increase from $3,868,917 thousand in December 2024, reflecting a growth of 2.2%[37]. - Total loans and leases increased to $3,992,207 thousand as of March 2025, up 2.2% from $3,906,340 thousand in December 2024[42]. - Nonperforming loans and leases decreased to $7,807 thousand, down from $7,872 thousand in the previous quarter, indicating improved asset quality[42]. Income and Expense Analysis - Total interest income for Q1 2025 was $66,376,000, an increase of 1% from $66,096,000 in Q4 2024 and up 4% from $63,956,000 in Q3 2024[38]. - Net interest income after provision for credit losses for Q1 2025 was $37,259,000, compared to $35,648,000 in Q4 2024, reflecting a 4.5% increase[38]. - Total noninterest expense for Q1 2025 was $32,296,000, slightly up from $32,291,000 in Q4 2024[38]. - Noninterest income decreased by $433 thousand to $8.6 million for Q1 2025, primarily due to declines in insurance commissions and transaction fees[13]. Capital and Equity - Shareholders' equity increased to $505.9 million, up $14.5 million from December 31, 2024, driven by net income and a positive change in accumulated other comprehensive loss[22]. - The total shareholders' equity attributable to SmartFinancial Inc. increased to $505,828 thousand from $491,348 thousand in December 2024, a rise of 2.8%[37]. - Book value per share increased to $29.73 in Q1 2025, up from $29.04 in Q4 2024, reflecting growth in shareholder equity[44]. - Tangible common equity (Non-GAAP) rose to $401,787,000 in Q1 2025, up from $386,738,000 in Q4 2024, reflecting an increase of 3.0%[50]. Operational Efficiency - The efficiency ratio continued to improve, reflecting the company's focus on enhancing profitability and shareholder value[3]. - The efficiency ratio improved to 68.96% in Q1 2025, compared to 68.98% in Q4 2024, indicating better operational efficiency[44]. - The provision for credit losses decreased to $979,000 in Q1 2025 from $2,135,000 in Q4 2024, indicating improved credit quality[38]. Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.08 per share, payable on May 19, 2025[24].

Group 1 - Analysts expect SmarFinancial (SMBK) to report quarterly earnings of $0.55 per share, reflecting a year-over-year increase of 12.2% [1] - Revenue projections for SmarFinancial are set at $45.99 million, which indicates a 14.7% increase from the same quarter last year [1] - There has been no revision in the consensus EPS estimate over the past 30 days, indicating stability in analysts' projections [1] Group 2 - The 'Efficiency Ratio' is estimated to be 70.3%, an improvement from the previous year's figure of 71.2% [4] - Analysts predict the 'Average Balance - Total interest earning assets' will reach $4.81 billion, up from $4.50 billion reported in the same quarter last year [4] - 'Total noninterest income' is forecasted to be $7.90 million, down from $8.38 million in the same quarter last year [5] Group 3 - 'Net interest income (FTE)' is projected to be $38.21 million, compared to $31.81 million from the previous year [5] - The consensus for 'Net interest income' stands at $37.89 million, an increase from $31.72 million reported in the same quarter last year [6] - SmarFinancial shares have decreased by 11.3% over the past month, contrasting with a 3.9% decline in the Zacks S&P 500 composite [6]

Asset Quality and Credit Losses - SmartFinancial's asset quality may decline, leading to greater loan losses than anticipated, influenced by economic conditions in local markets, particularly Tennessee[9]. - The allowance for credit losses is calculated using a qualitative framework and adjustments based on risk factors not included in quantitative modeling[341]. - The allowance for credit losses (ACL) for unfunded commitments was recorded at $2.5 million as of December 31, 2024, compared to $2.4 million in 2023, reflecting a slight increase of 4.2%[392]. - The company employs a credit risk management process with defined policies and routine reporting to manage credit risk in the loan and lease portfolio segments[470]. - The total provision charged to expense for credit losses in 2024 was $5.066 million, compared to $3.755 million in 2023[469]. - The company adopted ASU 2016-13 on January 1, 2023, impacting the allowance for credit losses across various segments[467]. - The total amount of consumer and other loans reached $14,189 million in 2024, up from $13,535 million in 2023, reflecting a growth of approximately 4.8%[485]. - The total past due loans as of December 31, 2024, amounted to $13,650,000, with a total loan portfolio of $3,906,340,000[487]. - The total impaired loans and leases amounted to $4,302,000, with interest income recognized on a cash basis of $201,000 for the year ended December 31, 2022[489]. Financial Performance - Net income for 2024 was $36,141 thousand, a 26.4% increase from $28,593 thousand in 2023[355]. - Comprehensive income for 2024 was $38,377 thousand, slightly up from $38,010 thousand in 2023, indicating a marginal increase of about 1.0%[357]. - Net income for the year ended December 31, 2023, was $36,141,000, compared to $28,593,000 in 2022, representing an increase of about 26.8%[360]. - Basic earnings per share for 2024 increased to $2.16 from $1.70 in 2023, while diluted earnings per share rose to $2.14 from $1.69[441]. - Net income available to common shareholders for 2024 was $36.141 million, compared to $28.593 million in 2023, reflecting a year-over-year increase of approximately 26.5%[441]. Revenue and Income Sources - Noninterest income increased to $34,152 thousand in 2024, compared to $22,325 thousand in 2023, showing a significant rise of about 53.0%[355]. - Revenue from service charges on deposit accounts is recognized at the end of the statement period when the performance obligation has been satisfied[407]. - Revenue from investment services is recognized over the period in which services are performed, based on a percentage of the value of the assets under management[408]. - Insurance commissions are recognized when the commission payment is remitted, typically upon the issuance of the insurance policy[409]. Assets and Liabilities - Total assets increased to $5,275,904 thousand in 2024, up from $4,829,387 thousand in 2023, representing an increase of approximately 9.3%[353]. - Total deposits rose to $4,686,483 thousand in 2024, compared to $4,267,854 thousand in 2023, marking an increase of about 9.8%[353]. - The company reported a total of $3,906,340 thousand in loans and leases for 2024, an increase from $3,444,462 thousand in 2023, which is an increase of approximately 13.4%[353]. - The total fair value of available-for-sale securities as of December 31, 2024, was $482.328 million, down from $408.410 million in 2023[445]. - The total amount of related party deposits decreased to $70.6 million in 2024 from $85.0 million in 2023[502]. Internal Controls and Compliance - The company maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control – Integrated Framework (2013)[344]. - The independent auditor expressed an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2024[331]. - The audit included evaluating the design and operating effectiveness of internal controls related to the allowance for credit losses[343]. - The company is subject to inherent limitations in its internal control over financial reporting, which may not prevent or detect misstatements[350]. Market and Economic Conditions - The company is exposed to market risk from interest rate fluctuations, which can significantly impact net interest income[314]. - Inflation may influence interest rates, affecting operating expenses, particularly personnel costs and supplies[323]. - The impact of recent bank failures in 2023 has raised concerns about customer confidence and liquidity in the banking industry[9]. - The company is focused on managing the balance between interest rate-sensitive assets and liabilities to maintain profitability[319]. Acquisitions and Goodwill - The acquisition of Sunbelt Group, LLC resulted in the establishment of goodwill amounting to $4.6 million, reflecting the intangible value of Sunbelt's business and reputation[436]. - The total consideration paid for the acquisition was $6.5 million, with $5.2 million paid in cash at closing and the remainder to be paid in equal installments in 2023 and 2024[436]. - The company recognized an intangible asset related to customer relationships valued at $1.9 million, amortized over 14 years[437]. Stock and Shareholder Information - The company declared a common stock dividend of $0.32 per share for 2023, totaling $5,427,000, up from $0.28 per share in 2022[360]. - The total number of common shares outstanding as of December 31, 2023, was 16,988,879, a slight increase from 16,900,805 shares at the end of 2022[360]. - The company repurchased common stock totaling $2,967,000 during the year ended December 31, 2023[360].

Financial Data and Key Metrics Changes - The company reported its fourth quarter 2024 earnings, with specific financial metrics discussed during the call [2][3] Business Line Data and Key Metrics Changes - Detailed performance across various business lines was expected to be covered in the presentation, but specific data was not provided in the excerpts [2] Market Data and Key Metrics Changes - The call indicated that market conditions and performance metrics would be addressed, but no specific market data was included in the provided content [2] Company Strategy and Development Direction and Industry Competition - The company’s strategic direction and competitive landscape were likely to be discussed, particularly by the CEO and CFO, but specific strategies were not detailed in the excerpts [2] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the presence of forward-looking statements, indicating that actual results could differ due to various risks and uncertainties, but specific comments on the operating environment were not included [3] Other Important Information - The company referenced non-GAAP financial measures related to its performance, with reconciliations available in the earnings release and investor presentation [3] Q&A Session All Questions and Answers Question: Inquiry about financial performance metrics - The management team indicated that they would address questions regarding financial performance metrics at the end of the call, but specific questions and answers were not provided in the excerpts [2]

Group 1 - SmarFinancial reported revenue of $46.81 million for the quarter ended December 2024, representing a 19.7% increase year-over-year [1] - The company's EPS for the quarter was $0.57, up from $0.41 in the same period last year, exceeding the consensus estimate of $0.54 by 5.56% [1] - The reported revenue surpassed the Zacks Consensus Estimate of $45.04 million, resulting in a surprise of +3.93% [1] Group 2 - Key metrics for SmarFinancial include an efficiency ratio of 69%, matching analyst estimates, and a net interest margin of 3.2%, slightly above the 3.1% estimate [4] - Total noninterest income was reported at $9.03 million, exceeding the average estimate of $8.27 million [4] - Net interest income (FTE) was $38.11 million, compared to the average estimate of $37.11 million [4] Group 3 - Over the past month, SmarFinancial shares returned +0.9%, underperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Core Viewpoint - SmarFinancial (SMBK) reported quarterly earnings of $0.57 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, and showing an increase from $0.41 per share a year ago, indicating a positive earnings surprise of 5.56% [1][2] Financial Performance - The company achieved revenues of $46.81 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.93% and up from $39.1 million year-over-year [2] - Over the last four quarters, SmarFinancial has consistently exceeded consensus EPS estimates and revenue estimates [2] Stock Performance and Outlook - SmarFinancial shares have increased approximately 1.9% since the beginning of the year, compared to a 2% gain in the S&P 500 [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.55 for the upcoming quarter and $2.40 for the current fiscal year [4][7] Industry Context - The Banks - Northeast industry, to which SmarFinancial belongs, is currently ranked in the top 25% of over 250 Zacks industries, suggesting a favorable environment for performance [8] - The performance of SmarFinancial's stock may also be influenced by the overall industry outlook and trends in earnings estimate revisions [5][8]

Financial Performance - SmartFinancial reported net income of $9.6 million, or $0.57 per diluted common share, for Q4 2024, a 55% increase from $6.2 million, or $0.37 per diluted common share, in Q4 2023[3]. - Net income for the three months ended December 31, 2024, was $9,640 thousand, representing an increase of 5.5% from $9,140 thousand in the previous quarter[38]. - Net income (GAAP) for the year ended December 2024 was $36,141, compared to $28,593 for the previous year, representing a year-over-year increase of 26.5%[49]. - Operating earnings for Q4 2024 reached $9,641, up from $9,140 in Q3 2024, reflecting a growth of 5.5%[49]. Asset Growth - Total assets increased by $446.5 million to $5.28 billion as of December 31, 2024, primarily due to a $461.9 million increase in loans and leases[19][23]. - Total assets increased to $5,275,904 thousand as of December 2024, up from $4,829,387 thousand in December 2023, representing a growth of 9.2%[37]. - The company's total assets increased to $4,939,586 thousand as of December 31, 2024, compared to $4,756,276 thousand as of December 31, 2023[42]. - Tangible assets (Non-GAAP) increased to $5,171,181 thousand in December 2024, compared to $4,722,239 thousand in December 2023, reflecting a growth of 9.5% year-over-year[52]. Loan and Lease Growth - The company achieved 13% year-over-year loan and lease growth, with average earning assets increasing to $4.7 billion, up $151 million from the prior quarter[4][5]. - Loans and leases reached $3,906,340 thousand in December 2024, an increase of 13.4% compared to $3,444,462 thousand in December 2023[37]. - Total loans and leases reached $3,906,340 thousand as of December 31, 2024, a significant increase from $3,444,462 thousand as of December 31, 2023[45]. Deposit Growth - Total deposits rose by $418.6 million to $4.69 billion, with significant contributions from money market deposits and brokered deposits[20][23]. - Total deposits rose to $4,686,483 thousand in December 2024, up 9.8% from $4,267,854 thousand in December 2023[37]. - Noninterest-bearing demand deposits increased to $965,552 thousand, a rise of 7.5% from $898,044 thousand in December 2023[37]. Income and Expense Management - Noninterest income decreased by $109 thousand to $9.03 million, primarily due to a $499 thousand decline in investment services[14][15]. - Noninterest expense increased by $1.4 million to $32.3 million, mainly due to higher salaries and employee benefits[16][17]. - Operating noninterest expense (Non-GAAP) for Q4 2024 was $32,291, compared to $30,846 in Q3 2024, indicating a rise of 4.7%[49]. Credit Quality - The allowance for credit losses was $37.4 million, representing 0.96% of total loans and leases, indicating stable credit quality[11][12]. - Nonperforming loans and leases decreased to $7,872 thousand as of December 31, 2024, down from $8,101 thousand a year earlier, indicating improved asset quality[45]. - The allowance for credit losses to loans and leases remained stable at 0.96% as of December 31, 2024, consistent with the previous quarter[45]. Efficiency and Profitability - The operating efficiency ratio improved, indicating better management of noninterest expenses relative to income[30]. - The efficiency ratio improved to 68.98% for the quarter, down from 69.83% in the previous quarter, reflecting better cost management[47]. - The operating return on average tangible common equity was 9.94%, up from 9.75% in the previous quarter, indicating improved returns for shareholders[47]. Capital Position - Shareholders' equity increased by $31.6 million to $491.5 million, driven by net income of $36.1 million for the year[22][23]. - The Tier 1 capital ratio stood at 9.83% as of December 31, 2024, slightly down from 10.06% in the previous year, reflecting a stable capital position[45]. - The company reported a total capital ratio of 11.17% as of December 31, 2024, compared to 11.62% a year earlier, indicating a slight decrease in capital adequacy[45]. Future Outlook - SmartFinancial plans to continue its growth strategy, focusing on strategic branching and disciplined lending practices[36]. - The company is actively managing interest rate risks amid changing economic conditions, including elevated interest rates[36]. - SmartFinancial is committed to enhancing its technology and cybersecurity measures to mitigate associated risks[36]. - The company anticipates potential impacts from economic and political factors, including inflation and market conditions, on its future performance[36].