SmartFinancial(SMBK) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for Q1 2025 was $11.3 million, or $0.67 per diluted common share, compared to $9.4 million, or $0.55 per diluted common share in Q1 2024, representing an increase of 20.2%[151] - Net interest income rose to $38.6 million in Q1 2025, up from $31.8 million in Q1 2024, driven by higher loan and lease balances[154] - Noninterest income was $8.6 million in Q1 2025, a slight increase from $8.4 million in Q1 2024[152] - Noninterest expense increased to $32.3 million in Q1 2025 from $28.6 million in Q1 2024, reflecting higher operational costs[152] - The effective tax rate decreased to approximately 17.01% in Q1 2025 from 21.94% in Q1 2024, with income tax expense totaling $2.3 million compared to $2.6 million[162] Asset and Loan Growth - Net loans and leases increased by $85.1 million from December 31, 2024, reflecting strong organic growth[151] - Total net loans and leases outstanding reached approximately $3.95 billion as of March 31, 2025, up from $3.87 billion at December 31, 2024[163] - The composition of the loan portfolio included 27.9% in non-owner occupied commercial real estate and 22.2% in owner-occupied commercial real estate as of March 31, 2025[163] - Total accruing loans past due (30-89 days) amounted to $7,667 thousand, representing 0.19% of total loans as of March 31, 2025, while total loans past due for 90 days or more were $183 thousand[166] Deposit Growth - Total deposits grew by $122.2 million from December 31, 2024, indicating robust customer confidence[151] - Total deposits as of March 31, 2025, were $4.81 billion, an increase of $122.2 million from December 31, 2024[179] - The average balance of noninterest-bearing demand deposits was $884.1 million, accounting for 18.9% of total deposits[176] - Money market and savings accounts had an average balance of $2.06 billion, representing 44.1% of total deposits with an average interest rate of 2.96%[176] Interest Income and Margin - The tax equivalent net interest margin increased to 3.21% in Q1 2025, compared to 2.85% in Q1 2024[153] - Total interest-earning assets increased to $4,867,260 thousand in Q1 2025, compared to $4,496,988 thousand in Q1 2024, reflecting a yield increase from 5.36% to 5.56%[155] - The interest rate spread improved to 2.59% in Q1 2025 from 2.13% in Q1 2024, indicating better net interest margin performance[155] Credit Quality - The provision for credit losses was $979 thousand in Q1 2025, compared to a reversal of $440 thousand in Q1 2024, indicating a shift in credit quality outlook[152] - Nonperforming loans and leases remained stable at 0.20% of total gross loans and leases as of March 31, 2025, consistent with December 31, 2024[165] - The allowance for credit losses was $38.2 million as of March 31, 2025, compared to $37.4 million as of December 31, 2024, maintaining a ratio of 0.96% of total loans and leases[167] Securities and Borrowings - The securities portfolio increased from $609.0 million at December 31, 2024, to $625.0 million at March 31, 2025, primarily due to purchases of available-for-sale securities[172] - Short-term borrowings totaled $4.0 million, and long-term debt was $39.7 million as of March 31, 2025[182] - The Company had $844.5 million of pre-approved but unused lines of credit and $23.6 million of standby letters of credit as of March 31, 2025[184] Liquidity and Risk Management - The Company anticipates adequate liquidity to meet expected customer obligations[192] - The Market Risk and Liquidity Risk Management information is referenced in the Management's Discussion and Analysis section[194]