SmartFinancial(SMBK) - 2024 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2024 was $9.1 million, or$0.54 per diluted common share, compared to $2.1 million, or$0.12 per diluted common share in Q3 2023[150]. - Net income for the first nine months of 2024 totaled $26.5 million, or$1.57 per diluted common share, up from $22.4 million, or$1.33 per diluted common share in the same period of 2023[150]. - Income before income taxes for Q3 2024 was $10.750 million, compared to$2.386 million in Q3 2023, marking an increase of $8.364 million[152]. - Net income for Q3 2024 was$9.1 million, or $0.54 per diluted common share, compared to$2.1 million, or $0.12 per diluted common share in Q3 2023, reflecting a$7.1 million increase[154]. Income and Revenue - Interest income for Q3 2024 was $63.956 million, an increase of$8.681 million from Q3 2023[152]. - Noninterest income surged to $9.139 million in Q3 2024, compared to$691,000 in Q3 2023, reflecting an increase of $8.448 million[152]. - Noninterest income increased by$10.4 million for the first nine months of 2024, despite a $6.8 million pre-tax loss on the sale of available-for-sale securities[155]. - Noninterest income rose by$8.4 million in Q3 2024 compared to Q3 2023, primarily due to a loss on the sale of securities in the prior year and increased investment services and insurance commissions[163]. Expenses - Noninterest expense rose to $30.846 million in Q3 2024, up by$2.330 million from Q3 2023[152]. - Noninterest expense increased by $2.3 million in Q3 2024 compared to Q3 2023, driven by higher salaries and employee benefits, professional services, and overall franchise growth[165]. - Total noninterest expense for the first nine months of 2024 was$88,599, an increase of $5.1 million from$83,455 in the same period of 2023[166]. Asset and Loan Growth - Net organic loan and lease increased by $272.5 million year-to-date as of September 30, 2024[150]. - Average loan and lease balances increased by$274.1 million in Q3 2024 compared to Q3 2023[157]. - Total net loans and leases outstanding reached approximately $3.68 billion as of September 30, 2024, up from$3.41 billion at December 31, 2023, representing an increase of 7.9%[169]. - The composition of the loan and lease portfolio includes commercial real estate at $1.90 billion (51.0$690.5 million (18.6%), and commercial and industrial loans at $731.6 million (19.7$54.6 million from December 31, 2023[150]. - Total average deposits as of September 30, 2024, were $4.32 billion, an increase of$54.6 million from December 31, 2023, driven by brokered deposits of $174.8 million[186]. - The average balance of noninterest-bearing demand deposits for the three months ended September 30, 2024, was$884.9 million, accounting for 20.6% of total deposits[184]. - Brokered deposits represented approximately 4.55% of total deposits as of September 30, 2024[183]. Credit Quality - The allowance for credit losses was $35.6 million as of September 30, 2024, representing 0.96$4.584 million as of September 30, 2024, with a past due percentage of 0.12%[172]. - The total nonaccrual loans and leases amounted to $9.319 million as of September 30, 2024, with a nonaccrual percentage of 0.25$1.6 million[167]. - Capital ratios exceeded regulatory minimum requirements as of September 30, 2024[190]. Liquidity and Borrowings - The Company anticipates adequate liquidity to meet expected obligations of its customers[200]. - Total borrowings amounted to $9.0 million, consisting of$5.0 million in short-term borrowings and $4.0 million in securities sold under repurchase agreements[189]. - Long-term debt decreased from$42.1 million at December 31, 2023, to $39.7 million at September 30, 2024[189]. Interest Rate Sensitivity - Interest rate sensitivity analysis indicated a 100 basis points increase would decrease net interest income by 1.43%[195]. - Economic value of equity model showed a 200 basis points increase would decrease economic value by 10.00%[196].