SmartFinancial(US:SMBK)2024-04-23 18:25Financial Data and Key Metrics Changes - The company reported a net income of $9.4 million for the quarter, or $0.55 per diluted share, with operating income at $8.4 million or $0.49 per diluted share [46] - Total revenue exceeded $40 million, with net interest income continuing to expand [51] - The tangible book value increased to $21.12 per share, with a consolidated TCE ratio ending at 7.4% [49][59] Business Line Data and Key Metrics Changes - Mortgage revenue is projected to increase by 15%, with a shift towards a secondary market, expecting a 50% mix by mid-2024 [3] - Loan growth was reported at $34 million, slightly below forecasts due to unexpected payoffs, but production pipelines remain healthy [52] - Noninterest income was lower than forecasted at $7 million, primarily due to slower capital markets revenue and reduced interchange fees [58] Market Data and Key Metrics Changes - The company experienced deposit growth of over $126 million, or almost 12% annualized, resulting in a loan to deposit ratio of 79% [54] - Interest-bearing deposit costs increased to 3.16%, with a weighted average cost of new deposit production at 3.79% [54] - The company maintained a strong liquidity position, covering uninsured deposits at 1.4 times [51] Company Strategy and Development Direction - The company is focused on gaining operating leverage and is optimistic about future growth, particularly in the South where population growth is strong [53] - Share repurchase programs are anticipated to resume as the stock is viewed as undervalued [59][62] - The company is strategically moving its interest rate sensitivity to a more neutral position to adapt to economic uncertainties [57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting that loan growth excluding payoffs would have exceeded mid-single digit growth guidance [56] - The company is positioned to handle a higher interest rate environment and is focused on leveraging investments made in previous years [61] - Management highlighted the importance of maintaining credit quality and the potential for margin expansion in the second half of 2024 [57][61] Other Important Information - The company is actively evaluating strategic opportunities for growth, including potential M&A, but is currently focused on share buybacks due to market conditions [10][39] - The company has added new revenue producers in various regions, enhancing its growth potential [61] Q&A Session Summary Question: What are the drivers behind the deposit growth this quarter? - Management attributed the deposit growth to new business relationships and the acquisition of large corporate accounts, as well as growth in existing accounts [70][71] Question: What is the yield on the $61 million of securities maturing this quarter? - The yield on the $61 million of securities maturing is 2.1% [77] Question: Is the company still targeting a 1% ROA and a $50 million revenue run rate in the second half of 2025? - Management confirmed that the target for a 1% ROA and a $50 million revenue run rate remains in place [79]