SmartFinancial(US:SMBK)2025-11-07 22:01Financial Performance - Net income for Q3 2025 was $13.7 million, or $0.81 per diluted common share, compared to $9.1 million, or $0.54 per diluted common share in Q3 2024, representing a 50% increase in net income [165]. - Year-to-date net income for the first nine months of 2025 totaled $36.6 million, or $2.17 per diluted common share, up from $26.5 million, or $1.57 per diluted common share in the same period of 2024, reflecting a 38% increase [165]. - Net income for Q3 2025 was $13.7 million, or $0.81 per diluted share, up from $9.1 million, or $0.54 per diluted share in Q3 2024, representing a 50% increase in net income [168]. - For the first nine months of 2025, net income totaled $36.6 million, or $2.17 per diluted share, compared to $26.5 million, or $1.57 per diluted share in the same period of 2024, marking a 38% increase [169]. Loan and Deposit Growth - Net organic loans and leases increased by $314.4 million from December 31, 2024, indicating strong loan growth [165]. - Total deposits grew by $364.4 million from December 31, 2024, highlighting an increase in customer deposits [165]. - Average loan and lease balances increased by $536.6 million in Q3 2025 compared to Q3 2024, contributing to the rise in net interest income [171]. - Total net loans and leases outstanding were approximately $4.18 billion as of September 30, 2025, compared to $3.87 billion at December 31, 2024 [186]. - Total loans and leases amount to $4.222 billion as of September 30, 2025, with a credit loss allowance ratio of 0.93% [191]. - Brokered deposits accounted for approximately 3.26% of total deposits as of September 30, 2025 [197]. - Average balance of money market and savings deposits increased to $2.19 billion, representing 44.1% of total average deposits for the three months ended September 30, 2025 [198]. - Time deposits under $250,000 totaled $536.0 million, while those over $250,000 amounted to $435.7 million as of September 30, 2025 [201]. Interest Income and Margin - Interest income for Q3 2025 was $74.5 million, up from $64.0 million in Q3 2024, marking an increase of 16.5% [167]. - Net interest income for Q3 2025 was $42.4 million, compared to $35.0 million in Q3 2024, a rise of 21.1% [167]. - Net interest income for Q3 2025 increased to $42.8 million, up from $35.4 million in Q3 2024, driven by higher loan and lease balances and improved yields [171]. - The tax equivalent net interest margin improved to 3.25% in Q3 2025, compared to 3.11% in Q3 2024, reflecting better asset yields and lower costs of interest-bearing liabilities [171]. - The cost of average interest-bearing deposits decreased from 3.20% in Q3 2024 to 2.98% in Q3 2025, reflecting the impact of Federal Reserve rate changes [171]. - Average interest-earning assets rose from $4.53 billion in Q3 2024 to $5.23 billion in Q3 2025, primarily due to increased loan and lease balances [171]. Credit Quality - The provision for credit losses decreased to $227,000 in Q3 2025 from $2.6 million in Q3 2024, indicating improved credit quality [167]. - The allowance for credit losses was $39.1 million as of September 30, 2025, representing 0.93% of total loans and leases [190]. - Nonperforming loans and leases as a percentage of total gross loans and leases increased to 0.24% as of September 30, 2025, from 0.20% at December 31, 2024 [188]. - The company reported a provision for credit losses of $2.9 million for the nine months ended September 30, 2025, down from $3.1 million in the same period of 2024 [190]. - The allowance for credit losses increased to $39.074 million as of September 30, 2025, from $37.423 million at December 31, 2024, representing a 4.4% increase [191]. - The total provision for credit losses for the three months ended September 30, 2025, was $351,000 [193]. - The ratio of net charge-offs to average loans was (0.03)% for the three months ended September 30, 2025 [193]. Noninterest Income and Expense - Noninterest income for Q3 2025 decreased by $502 thousand to $8.6 million compared to Q3 2024, mainly due to a loss on the sale of securities [178]. - For the first nine months of 2025, noninterest income increased by $1.0 million to $26.1 million compared to the same period in 2024, driven by growth in service charges and mortgage banking [178]. - Noninterest expense to average assets decreased to 2.38% in Q3 2025 from 2.50% in Q3 2024, indicating improved operational efficiency [170]. - Noninterest expense increased by $3.0 million in Q3 2025 compared to Q3 2024, totaling $33.9 million [181]. - For the first nine months of 2025, noninterest expense rose by $10.1 million year-over-year, reaching $98.7 million [181]. Capital and Debt - A $100 million subordinated debt issuance was completed during the quarter to retire existing $40 million subordinated debt and fund additional growth [165]. - Long-term debt increased to $138.6 million as of September 30, 2025, from $39.7 million at December 31, 2024 [204]. - The Company issued new subordinated debt of $98.9 million during the third quarter of 2025 [204]. - The Company had $1.01 billion of pre-approved but unused lines of credit as of September 30, 2025 [206]. - The Company’s capital ratios exceeded regulatory minimum requirements as of September 30, 2025 [205]. Employee Compensation - Salaries and employee benefits increased by $1.1 million in Q3 2025 compared to Q3 2024, attributed to franchise growth [185].