Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Q4 2022 Earnings Presentation
24 slides from Smartfinancial's earnings presentation, Jan 24, 2023
Slide 1: Investor Call 4Q 2022
INVESTOR CALL 4Q 2022 January 24, 2023, 10:00am ET Webcast: www.smartbank.com (Investor Relations) Audio Only: 1-844-200-6205 Access Code: 179408 Miller Welborn Chairman of the Board Billy Carroll President & CEO Ron Gorczynski CFO 1
Slide 2: Disclosures
DISCLOSURES Forward-Looking Statements Non-GAAP Financial Measures This presentation may contain statements that are based on management’s current estimates Statements included in this presentation include Non-GAAP financial measures and should be or expectations of future events or future results,
Slide 3: SmartBank 2022: A Year in Review
SMARTBANK 2022: A YEAR IN REVIEW $ in Millions, except per share data FINANCIAL HIGHLIGHTS: '20 -'22 BALANCE SHEET / NON-GAAP REVENUE METRICS: 2020Y 2021Y 2022Y CAGR3 Total Loans and Leases $ 2,382.2 $ 2,693.4 $ 3,229.0 16% BALANCE SHEET PERFORMANCE DRIVEN BY Annual Net Balance Loan Growth (Excl. PP
Slide 4: Quarterly Highlights: Fourth Quarter 2022
QUARTERLY HIGHLIGHTS: FOURTH QUARTER 2022 $0.76 $4.6 DILUTED EARNINGS PER SHARE BOOK VALUE PER SHARE DILUTED OPERATING BILLION IN TOTAL EPS1 ASSETS $0.77 $0.76 $25.56 $25.59 $24.56 $0.68 $0.69 $21.18 $20.43 $19.26 $19.09 $18.02 15% 17% $0.40 $0.52 $18.02 $19.09 QOQ2 ANNUALIZED QOQ ANNUALIZED TANG. B
Slide 5: SmartFinancial: Expanding Southeast Franchise
SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE $4.6 NASHVILLE KNOXVILLE BILLION IN TOTAL ASSETS CHATTANOOGA HUNTSVILLE $3.2 BILLION IN TOTAL BIRMINGHAM LOANS TUSCALOOSA AUBURN $4.1 MONTGOMERY BILLION IN TOTAL DEPOSITS DOTHAN SMARTBANK BRANCH OFFICES MOBILE LOAN PRODUCTION OFFICE 41 PENSACOLA PANAMA C
Slide 6: Market Area: Targeting Industry Rich Growth Markets
MARKET AREA: TARGETING INDUSTRY RICH GROWTH MARKETS $ in Billions LEGACY MARKETS1: STRONG RELATIONSHIPS / DEEP MARKET PENETRATION Forbes CAGR: 8% $2 $2.3 SMBK LOANS $2 $2 $2.1 $2 $2.0 Top 200 $2 Best Places for Business and $2 Careers $2 12/31/20 12/31/21 12/31/22 SMARTBANK BRANCH OFFICES CAGR: 16%
Slide 7: Loan Portfolio: Solid Markets Providing Opportunity
LOAN PORTFOLIO: SOLID MARKETS PROVIDING OPPORTUNITY $ in Millions TOTAL LOANS LOAN COMPOSITION CAGR OF 20% SINCE 2017 SUSTAINED MARKET MOMENTUM DRIVING ORGANIC GROWTH $3, 500 10. 00% $3,229 $3,229 $3,099 $3,099 3% $2,994 $2,994 $2,806 $3, 000 9. 00% $2,806 18% $2,693 $2,693 18% 18% $2, 500 $2,382 8.
Slide 8: Loan Concentration: Well Balanced Exposure
LOAN CONCENTRATION: WELL BALANCED EXPOSURE CRE EXPOSURE BY SEGMENT C&D EXPOSURE BY T YPE1 HIGHLY DIVERSIFIED WITH CLOSELY MONITORED WITH NO SEASONED CLIENT BASE CONCENTRATION CONCERNS Retail Resi/Comm Resi/Comm Space Land Land Dev. 14% 17% Hotel & 13% Hospitality 35% Multifamily Office Space 13% 14%
Slide 9: Asset Quality: Strong Underwriting Pays Dividends
ASSET QUALITY: STRONG UNDERWRITING PAYS DIVIDENDS $ in Thousands NONPERFORMING ASSETS DELINQUENT AND NONACCRUALS / TOTAL LOANS 1.50% $12, 000 1.70% 1.50% 1.30% $6, 000 $8,991 $10, 000 $5,058 $4,981 $5,042 1.30% $4,808 1.10% $4,605 $8, 000 $7,645 1.10% $6,588 0.90% $4, 000 $6,398 $5,738 0.90% 0.70% $
Slide 10: Reserve Reconciliation
RESERVE RECONCILIATION: $ in Thousands $23,334 2.0 0% $22,769 $21,938 $24, 000 $20,078 $22, 000 $20, 000 $19,352 1.5 0% $18, 000 $15,483 $14,913 $16, 000 $14,737 $14,465 $14, 000 $13,128 1.0 0% $12, 000 0.75% $10, 000 0.74% 0.74% 0.74% 0.73% $8, 000 0.5 0% $6, 000 $4, 000 $2, 000 $- 0.0 0% 4Q21 1Q22
Slide 11: Deposit Portfolio: Defending Deposit Market Share
DEPOSIT PORTFOLIO: DEFENDING DEPOSIT MARKET SHARE $ in Millions TOTAL DEPOSITS DEPOSIT COMPOSITION LOANS TO DEPOSITS R ATIO OF 79% HIGHER R ATES DRIVING MIX SHIFT $4,282 $4,280 $4, 500 3. 00% $4,191 $4,022 $4,077 $4,282 $4,280 $4,191 $4,022 $4,077 $4, 000 2. 50% 12% 11% 13% 11% $3, 500 14% $2,805 $3
Slide 12: Liquidity Utilization: Margin Management While Driving Revenue
LIQUIDITY UTILIZATION: MARGIN MANAGEMENT WHILE DRIVING REVENUE $ in Millions $ in Thousands CASH AND SECURITIES MARGIN / OPERATING REVENUE2 $1, 200 EXCESS FUNDING NORMALIZING 50.0% MAINTAINING REVENUE DESPITE $1,045 45.0% CHALLENGING MARGIN ENVIRONMENT $1, 000 40.0% 6.0 0% $44,593 $830 $813 $807 35.
Slide 13: Interest Rate Sensitivity
INTEREST R ATE SENSITIVITY $ in Millions $ in Thousands FIXED VS. VARIABLE R ATE LOANS STATIC SHOCK / R ATE R AMP ANALYSIS1 ▲ $1.9 BILLION FIXED R ATE LOANS INTERST INCOME % CHANGE ▲ $1.3 BILLION VARIABLE R ATE LOANS $375 , 0.3% ▲ $727 MILLION SHORT TERM VARIABLE RATE (1 - 3 MONTH RESET) ▲ $561 MILL
Slide 14: Noninterest Revenue Details: Growing Fee Income
NONINTEREST REVENUE DETAILS: GROWING FEE INCOME $ in Thousands OPERATING NONINTEREST INCOME1 DIFFERENTIATED REVENUE STREAMS FOCUSED ON RECURRING FEE INCOME BUILDING A FAMILY OF DIVERSIFIED REVENUE GENERATORS $7,111 $7,229 $6,981 $6,806 $6,250 4Q21 1Q22 2Q22 3Q22 4Q22 SERVICE CHARGES ON DEPOSIT ACCOU
Slide 15: Operating Expense: Investing With an Eye on Efficiencies
OPERATING EXPENSE: INVESTING WITH AN EYE ON EFFICIENCIES $ in Thousands OPERATING EFFICIENCY R ATIO1 OPERATING NONINTEREST EXPENSE1 EXECUTING ON EXPANSION OPPORTUNITIES DISCIPLINED FOCUS ON EXPENSE CONTAINMENT $27,143 $27,461 $25,845 $25,061 $25,279 68% 68% 64% 63% 61% 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21
Slide 16: Capital: Well Capitalized – Building Book Value
CAPITAL: WELL CAPITALIZED – BUILDING BOOK VALUE TCE / TA1 LEVERAGE R ATIO BUILDING SHAREHOLDER VALUE TANGIBLE BOOK VALUE PER SHARE (TBVPS)1 8.0% 7.5% 7.4% 7.5% 7.4% 7.2% 7.2% $24. 00 6.8% 6.7% 6.5% 5% $22. 00 $21.18 WELL CAPITALIZED $20. 00 $19.26 $19.17 $19.09 $17.92 $17.77 $18. 00 $16.82 $16.80 $1
Slide 17: Why SmartBank: Investment Highlights
WHY SMARTBANK: INVESTMENT HIGHLIGHTS ENGAGED MANAGEMENT TEAM $ LOW-COST DEPOSIT BASE SOLID CREDIT QUALITY AND UNDERWRITING STABLE MARKETS EXPERIENCING POPULATION EXPANSION GROWING BUSINESS LINES WITH REVENUE DIVERSIFICATION FRANCHISE SCARCITY VALUE – BUILDING SOUTHEAST DENSITY HISTORY OF DEFENDING B
Slide 18: Appendix
Wy SmartFinancial APPENDIX
Slide 19: Income Statement: Detailed Fourth Quarter Results
INCOME STATEMENT: DETAILED FOURTH QUARTER RESULTS 4Q22 vs. 3Q22 4Q21 ($ in thousands, except per share data) 4Q22 3Q22 4Q21 % Chg. % Chg. Net Interest Income $ 37,612 $ 36,708 $ 29,855 2% 26% Provision for Loan & Lease losses 788 974 422 Noninterest Income 7,125 6,250 6,806 14% 5% Noninterest Expens
Slide 20: Operating Expense: Technology Initiatives
OPERATING EXPENSE: TECHNOLOGY INITIATIVES EMBRACING TECHNOLOGY TO INCREASE EFFICIENCY AND CREATE STREAMLINED PROCESSES Branch Treasury Teller New Consumer Digital Customer Network Management Modernization Personal Experience Modernization Platform Upgrade Bank-Wide Finance Tools Enhancements Q2 2021
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, except per share data 2022Y 2021Y 2020Y 4Q22 3Q22 2Q22 1Q22 4Q21 Operating Earnings Net Income (GAAP) $ 43,022 $ 34,790 $ 24,332 $ 13,004 $ 11,543 $ 10,215 $ 8,259 $ 6,655 Noninterest Income: Securities (Gains) Losses (144) (45) (6) (144) - - - - Noninterest E
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION $ in Thousands, except per share data 4Q22 3Q22 2Q22 1Q22 4Q21 Tangible Common Equity: 1. Book value per share is computed by dividing total Shareholders' Equity (GAAP) $ 432,452 $ 414,711 $ 420,427 $ 420,042 $ 429,430 stockholders’ equity by common shares Less Goodwill And O
Slide 23: Contact
CONTACT MILLER WELBORN BILLY CARROLL RON GORCZYNSKI CHAIRMAN PRESIDENT & CEO CHIEF FINANCIAL OFFICER 423.385.3067 865.868.0613 865.437.5724 [email protected] [email protected] [email protected] 5401 KINGSTON PIKE, SUITE 600 KNOXVILLE, TN 37919 23
Slide 24: _SmartFinancial : L =
_SmartFinancial : L =