SmartFinancial(US:SMBK)2025-04-22 14:00Financial 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]