Performance Highlights
SmartFinancial, Inc. ("SmartFinancial") (NASDAQ:SMBK), announced
today net income per common share of $38 thousand in its fourth
quarter of 2017 or $0.00 per share, compared to $1.4 million or
$0.23 per share a year ago. On November 1, 2017,
SmartFinancial completed the acquisition of Capstone Bancshares and
Capstone Community Bank and this quarter includes two months of the
results of the acquired companies. This quarter also included
$1.7 million in pre-tax merger related charges and a $2.5 million
after-tax charge to reduce the value of the firm's deferred tax
assets as a result of the tax law signed in December.
Billy Carroll stated “We are extremely proud of
our achievements in the fourth quarter and for the year. 2017
was a transformative year for SmartFinancial. We completed a
branch acquisition in Cleveland, TN in the second quarter,
announced and closed our Tuscaloosa, AL-based Capstone Bancshares
deal and in the fourth quarter announced the Tennessee Bancshares
acquisition to expand our footprint in Middle Tennessee and
Huntsville, AL. Our pre-tax financial results were very
solid, even while closing Capstone during the quarter. Net
Operating Earnings per common share were $0.35 compared to $0.23 a
year ago.
"The passage of the tax reform legislation will
have a very positive impact on our earnings stream as we move into
2018, but it required us to revalue our deferred tax asset in the
fourth quarter, resulting in a $2.5 million non-cash charge to tax
expense. Despite the one-time charge, the tax reform will be very
good for our company, our industry, and our shareholders.
"The company’s organic growth continued to be
strong, even while working on various acquisition
initiatives. Including a particularly robust $83 million for
the fourth quarter. This growth has been accomplished with
maintaining outstanding credit quality with a 0.29 percent
non-performing assets-to-assets ratio. All of our markets
continue to trend well and our credit metrics show no
deterioration. Also important to note, our core margin
remains strong, even with a slight increase in funds costs.
Our efficiency ratio was down quarter to quarter, even with the
merger-related expenses. This remains a key emphasis for our
management team and will continue to be a focus as we integrate our
upcoming acquisitions."
SmartFinancial's Chairman, Miller Welborn,
concluded: "I’ve been extremely pleased with our team’s
effort during the quarter and the year and we’ve now positioned the
company to capitalize on the foundation we’ve built over the last
two years. Our fourth quarter core operating metrics give a
glimpse of what our company’s future holds. Our management has been
working to make sure we have a successful integration of Capstone
and of Southern Community Bank in 2018."
Fourth Quarter 2017 compared to Third
Quarter 2017
Net income available to common shareholders
totaled $38 thousand in the fourth quarter of 2017, or $0.00 per
diluted share, compared to $1.7 million, or $0.20 per diluted
share, in the third quarter of 2017. Net operating earnings
available to common shareholders, which excludes securities gains,
merger and conversion costs, foreclosed assets gains and losses,
and the effect of the deferred tax asset revaluation, totaled $3.7
million in the fourth quarter of 2017 compared to $1.8 million in
the previous quarter.
Net interest income to average assets of 4.09
percent for the quarter increased from 3.81 percent in the third
quarter of 2017. Net interest income totaled $15.3 million in the
fourth quarter of 2017 compared to $10.9 million in the third
quarter of 2017. Net interest income was positively impacted during
the quarter by increases in earning asset balances and higher
earning asset yields. Net interest margin, taxable
equivalent, increased from 4.17 percent in the third quarter of
2017 to 4.64 percent in the fourth quarter of 2017 primarily due to
higher average loan balances, higher loan yields (including
purchased loan accounting adjustments), and higher security
yields.
Provision for loan losses was $442 thousand in
the fourth quarter of 2017, compared to $30 thousand in the third
quarter of 2017. The increase in provision for loan losses was
primarily due to increases in originated loan balances.
Annualized net charge-offs in the fourth quarter of 2017 remained
at a very low level, just (0.01) percent of average loans compared
to (0.02) percent the third quarter of 2017.
The allowance for loan losses, or the ALLL, was
$5.9 million, or 0.44 percent of total loans as of
December 31, 2017, compared to $5.4 million, or 0.62 percent
of total loans, as of September 30, 2017. In addition to
the allowance for loan losses there were $17.9 million additional
net purchase discounts on $523.6 million of acquired loans as of
December 31, 2017, compared to $8.2 million net purchase
discounts on $166.5 million of acquired loans, as of
September 30, 2017.
Nonperforming loans as a percentage of total
loans was 0.13 percent as of December 31, 2017, which was down
from 0.15 percent in the prior quarter. Total nonperforming assets
(which include nonaccrual loans, loans past due 90 days or more and
still accruing, and foreclosed assets) as a percentage of total
assets was 0.29 percent as of December 31, 2017, compared to
0.37 percent as of September 30, 2017.
Non-interest income to average assets of 0.42
percent for the quarter was down slightly from 0.43 percent in the
third quarter of 2017. Non-interest income totaled $1.6
million in the fourth quarter of 2017, compared to $1.2 million in
the third quarter of 2017. The increase in non-interest
income was primarily due to higher charges on deposit accounts and
higher gains on the sale of loans and other assets.
Non-interest expense to average assets of 3.35
percent for the quarter was up slightly from 3.33 percent in the
third quarter of 2017 primarily due to higher merger expenses.
Non-interest expense totaled $12.6 million in the fourth quarter of
2017, which included $1.7 million in merger related charges,
compared to $9.5 million in third quarter of 2017, which had
$303 thousand in merger charges.
Income tax expense was $3.9 million in the
fourth quarter of 2017, which included the $2.5 million reduction
in the firm's deferred tax assets. Income tax expense in the third
quarter of 2017 was to $882 thousand. Excluding the deferred
tax charge the company's effective tax rate was 35.6 percent in the
fourth quarter of 2017 compared to 34.4 percent in the third
quarter of 2017. The company expects an effective tax
rate of approximately 26 percent in 2018.
Fourth Quarter 2017 compared to Fourth
Quarter 2016
Net income available to common shareholders
totaled $38 thousand in the fourth quarter of 2017, or $0.00 per
diluted share, compared to $1.4 million, or $0.22 per diluted
share, in the fourth quarter of 2016. Net operating earnings
available to common shareholder, which excludes securities gains,
merger and conversion costs, foreclosed assets gains and losses,
and the effect of the deferred tax asset revaluation, totaled $3.7
million in the fourth quarter of 2017 compared to $1.4 million in
the fourth quarter of 2016.
Net interest income to average assets of 4.09
percent for the quarter increased from 3.80 percent in the fourth
quarter of 2016. Net interest income totaled $15.3 million in the
fourth quarter of 2017 compared to $9.9 million in the fourth
quarter of 2016. Net interest income was positively impacted during
the quarter by increases in earning asset balances and higher
earning asset yields. Net interest margin, taxable
equivalent, increased from 4.06 percent in the fourth quarter of
2016 to 4.64 percent in the fourth quarter of 2017 primarily due to
higher average loan balances, higher loan yields (including
purchased loan accounting adjustments), and higher securities
balances.
Provision for loan losses was $442 thousand in
the fourth quarter of 2017, compared to $171 thousand in the fourth
quarter of 2016. The increase in provision was primarily due to
increases in originated loan balances. Annualized net
charge-offs in the fourth quarter of 2017 remained at a very low
level, just (0.01) percent of average loans compared to 0.02
percent the fourth quarter of 2016.
Nonperforming loans as a percentage of total
loans was 0.13 percent as of December 31, 2017, which was down
significantly from 0.26 percent in the prior year. Total
nonperforming assets (which include nonaccrual loans, loans past
due 90 days or more and still accruing, and foreclosed assets) as a
percentage of total assets was 0.29 percent as of December 31,
2017, compared to 0.43 percent as of December 31, 2016.
Non-interest income to average assets of 0.42
percent for the quarter increased from 0.37 percent in the fourth
quarter of 2016. Non-interest income totaled $1.6 million in
the fourth quarter of 2017, compared to $948 thousand in the fourth
quarter of 2016. The increase in non-interest income was
primarily due to was primarily due to higher charges on deposit
accounts, higher gains on the sale of loans and other assets, and
higher income from bank owned life insurance.
Non-interest expense to average assets of 3.35
percent for the quarter was up from 3.09 percent in the fourth
quarter of 2016. Non-interest expense totaled $12.6 million
in the fourth quarter of 2017, which included $1.7 million in
merger related charges,compared to $8.0 million in fourth quarter
of 2016, which did not have any merger charges.
Income tax expense was $3.9 million in the
fourth quarter of 2017, which included the $2.5 million reduction
of the firm's deferred tax assets. Income tax expense in the fourth
quarter of 2016 was $960 thousand. Excluding the deferred tax
charge the company's effective tax rate was 35.6 percent in the
fourth quarter of 2017 compared to 34.4 percent in the fourth
quarter of 2016.
Conference Call
InformationSmartFinancial will host a conference call on
Thursday, February 1, at 10:00 a.m. ET. To access this
interactive teleconference, dial (888) 317-6003 or (412) 317-6061
and enter the confirmation number: 6556809. A replay of the
conference call will be available through February xx, 2018,
by dialing (877) 344-7529 or (412) 317-0088 and entering the
confirmation number: 10113897. Conference call materials
(earnings release & conference call presentation) will be
published on the company’s webpage located at
http://www.smartfinancialinc.com/CorporateProfile at 9:00 am EST
prior to the morning of the conference call.
About SmartFinancial,
Inc.SmartFinancial, Inc., based in Knoxville, Tennessee,
is the bank holding company for SmartBank. SmartBank is a
full-service commercial bank founded in 2007, with 22 branches, one
loan production office, and one mortgage production office located
in East Tennessee, the Florida Panhandle, Central and Southern
Alabama, and North Georgia. Recruiting the best people, delivering
exceptional client service, strategic branching and a conservative
and disciplined approach to lending have contributed to SmartBank’s
success. More information about SmartFinancial can be found
on its website: www.smartfinancialinc.com.
This release contains forward-looking
statements. SmartFinancial cautions you that a number of important
factors could cause actual results to differ materially from those
currently anticipated in any forward-looking statement. Such
factors include, but are not limited to: the expected revenue
synergies and cost savings from the proposed merger with Tennessee
Bancshares, Inc. (the “Tennessee Bancshares merger”) and/or the
recently completed merger with Capstone Bancshares, Inc. (the
“Capstone merger”) may not be fully realized or may take longer
than anticipated to be realized; the disruption from either the
Tennessee Bancshares merger or the Capstone merger with customers,
suppliers or employees or other business partners’ relationships;
the risk of successful integration of our business with that of
Tennessee Bancshares or Capstone; the amount of costs, fees,
expenses, and charges related to Tennessee Bancshares merger; the
risk that the shareholders of Tennessee Bancshares may not approve
the Tennessee Bancshares merger; risks of expansion into new
geographic or product markets, like the proposed expansion into the
Nashville, TN MSA associated with the proposed Tennessee Bancshares
merger; changes in management’s plans for the future, prevailing
economic and political conditions, particularly in our market area;
credit risk associated with our lending activities; changes in
interest rates, loan demand, real estate values and competition;
changes in accounting principles, policies, and guidelines; changes
in any applicable law, rule, regulation or practice with respect to
tax or legal issues; and other economic, competitive, governmental,
regulatory and technological factors affecting our operations,
pricing, products and services and other factors that may be
described in our annual report on Form 10-K and quarterly reports
on Form 10-Q as filed with the Securities and Exchange Commission
from time to time.
The forward-looking statements are made as of
the date of this release, and, except as may be required by
applicable law or regulation, SmartFinancial assumes no obligation
to update the forward-looking statements or to update the reasons
why actual results could differ from those projected in the
forward-looking statements.
Important Information for Investors and
Shareholders
In connection with the Tennessee Bancshares
merger, SmartFinancial intends to file a registration statement on
Form S-4 with the Securities and Exchange Commission (the “SEC”) to
register the shares of SmartFinancial common stock that will be
issued to Tennessee Bancshares’ shareholders in connection with the
transaction. The registration statement will include a proxy
statement/prospectus (that will be delivered to Tennessee
Bancshares’ shareholders in connection with their required approval
of the proposed merger) and other relevant materials in connection
with the proposed Tennessee Bancshares merger.
INVESTORS AND SHAREHOLDERS ARE ENCOURAGED TO
READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED TRANSACTION BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT SMARTFINANCIAL, SMARTBANK, TENNESSEE BANCSHARES,
SOUTHERN COMMUNITY BANK, AND THE PROPOSED Tennessee Bancshares
merger.
Investors and shareholders may obtain free
copies of these documents once they are available through the
website maintained by the SEC at http://www.sec.gov. Free copies of
the proxy statement/prospectus also may be obtained by contacting
SmartFinancial’s Investor Relations Department at
(423) 385-3009.
This communication shall not constitute an offer
to sell or the solicitation of an offer to buy securities, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such
jurisdiction.
SmartFinancial, Tennessee Bancshares, their
directors and executive officers, and other members of management
and employees may be considered participants in the solicitation of
proxies in connection with the proposed transaction. Information
about the directors and executive officers of SmartFinancial is set
forth in SmartFinancial’s proxy statement for its 2017 annual
shareholders meeting. Other information regarding the participants
in the proxy solicitations and a description of their direct and
indirect interests, by security holdings or otherwise, are
contained in the proxy statement/prospectus and other relevant
materials filed with the SEC.
Statements included in this press release
include non-GAAP financial measures and should be read along with
the accompanying tables, which provide a reconciliation of non-GAAP
financial measures to GAAP financial measures. SmartFinancial
management uses non-GAAP financial measures, including: (i) net
operating earnings available to common shareholders; (ii) operating
efficiency ratio; and (iii) tangible common equity, in its analysis
of the company's performance. Net operating earnings available to
common shareholders excludes the following from net income
available to common shareholders: securities gains and losses, OREO
gain and losses, merger and conversion expenses, effect of the
December, 2017 tax law change on deferred tax assets, and the
income tax effect of adjustments. The operating efficiency ratio
excludes securities gains and losses , adjustment for OREO gains
and losses, and merger and conversion costs from the
efficiency ratio. Tangible common equity excludes total
preferred stock, preferred stock paid in capital, goodwill, and
other intangible assets.
Management believes that non-GAAP financial
measures provide additional useful information that allows readers
to evaluate the ongoing performance of the company and provide
meaningful comparisons to its peers. Non-GAAP financial
measures should not be considered as an alternative to any measure
of performance or financial condition as promulgated under GAAP,
and investors should consider SmartFinancial's performance and
financial condition as reported under GAAP and all other relevant
information when assessing the performance or financial condition
of the company. Non-GAAP financial measures have limitations
as analytical tools, and investors should not consider them in
isolation or as a substitute for analysis of the results or
financial condition as reported under GAAP.
Source |
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SmartFinancial, Inc. |
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Investor Contacts |
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Billy
CarrollPresident & CEO(865) 868-0613 |
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Frank
HughesExecutive Vice President, Investor Relations(423)
385-3009 |
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Media ContactKelley FowlerFirst Vice President,
Public Relations & Marketing(865) 868-0611
kelley.fowler@smartbank.com |
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SmartFinancial, Inc. and Subsidiaries |
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Condensed
Consolidated Financial Information (unaudited) |
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(In
thousands, except per share data) |
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|
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|
|
As of and for the three months ended |
|
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
Selected
Performance Ratios (Annualized) |
|
|
|
|
|
|
|
|
|
|
Return on
average assets |
|
0.01 |
% |
|
0.59 |
% |
|
0.61 |
% |
|
0.64 |
% |
|
0.64 |
% |
Net
operating return on average assets (Non-GAAP) |
|
0.99 |
% |
|
0.63 |
% |
|
0.61 |
% |
|
0.44 |
% |
|
0.54 |
% |
Return on
average shareholder equity |
|
0.08 |
% |
|
4.91 |
% |
|
4.95 |
% |
|
5.18 |
% |
|
6.24 |
% |
Net
operating return on average shareholder equity (Non-GAAP) |
|
7.99 |
% |
|
5.25 |
% |
|
4.91 |
% |
|
3.55 |
% |
|
5.32 |
% |
Net
interest income / average assets |
|
4.09 |
% |
|
3.81 |
% |
|
3.81 |
% |
|
3.81 |
% |
|
3.80 |
% |
Yield on
Earning Assets |
|
4.70 |
% |
|
4.70 |
% |
|
4.66 |
% |
|
4.54 |
% |
|
4.51 |
% |
Yield on
earning assets, TE (Non-GAAP) |
|
5.21 |
% |
|
4.70 |
% |
|
4.66 |
% |
|
4.54 |
% |
|
4.51 |
% |
Cost of
interest-bearing liabilities |
|
0.70 |
% |
|
0.68 |
% |
|
0.65 |
% |
|
0.60 |
% |
|
0.58 |
% |
Net
Interest margin |
|
4.63 |
% |
|
4.16 |
% |
|
4.14 |
% |
|
4.07 |
% |
|
4.05 |
% |
Net
interest margin, TE (Non-GAAP) |
|
4.64 |
% |
|
4.17 |
% |
|
4.15 |
% |
|
4.07 |
% |
|
4.06 |
% |
Non-interest income / average assets |
|
0.42 |
% |
|
0.43 |
% |
|
0.47 |
% |
|
0.36 |
% |
|
0.37 |
% |
Non-interest expense / average assets |
|
3.35 |
% |
|
3.33 |
% |
|
3.29 |
% |
|
3.16 |
% |
|
3.09 |
% |
Efficiency ratio |
|
74.25 |
% |
|
78.62 |
% |
|
76.77 |
% |
|
75.79 |
% |
|
74.29 |
% |
Operating
efficiency ratio (Non-GAAP) |
|
60.73 |
% |
|
76.46 |
% |
|
78.98 |
% |
|
81.34 |
% |
|
78.98 |
% |
Pre-tax
pre-provision income / average assets |
|
1.16 |
% |
|
0.97 |
% |
|
0.96 |
% |
|
1.09 |
% |
|
1.08 |
% |
|
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|
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Per Common
Share |
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|
|
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|
Net
income, basic |
|
$ |
0.00 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.19 |
|
|
$ |
0.23 |
|
Net
income, diluted |
|
0.00 |
|
|
0.20 |
|
|
0.20 |
|
|
0.19 |
|
|
0.22 |
|
Net
operating earnings, basic (Non-GAAP) |
|
0.35 |
|
|
0.22 |
|
|
0.20 |
|
|
0.15 |
|
|
0.24 |
|
Net
operating earnings, diluted (Non-GAAP) |
|
0.35 |
|
|
0.22 |
|
|
0.20 |
|
|
0.15 |
|
|
0.23 |
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Book
value |
|
18.46 |
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|
16.57 |
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|
16.39 |
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|
16.14 |
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|
15.81 |
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Tangible
book value (Non-GAAP) |
|
13.90 |
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|
15.67 |
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|
15.48 |
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|
15.34 |
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|
14.69 |
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Common
shares outstanding |
|
11,153 |
|
|
8,243 |
|
|
8,219 |
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|
8,211 |
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|
5,896 |
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Composition Of
Loans |
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|
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Real
estate commercial |
|
|
|
|
|
|
|
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owner
occupied |
|
$ |
281,297 |
|
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$ |
210,489 |
|
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$ |
211,469 |
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$ |
197,032 |
|
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$ |
199,645 |
|
non-owner
occupied |
|
361,399 |
|
|
237,131 |
|
|
233,707 |
|
|
210,901 |
|
|
215,215 |
|
Real
Estate Commercial, Total |
|
642,833 |
|
|
447,620 |
|
|
445,176 |
|
|
407,933 |
|
|
414,860 |
|
Commercial & financial |
|
238,690 |
|
|
119,782 |
|
|
105,129 |
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|
90,649 |
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|
85,696 |
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Real
estate construction & development |
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135,409 |
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|
98,212 |
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|
101,151 |
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|
115,675 |
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|
117,748 |
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Real
estate residential |
|
292,795 |
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|
199,704 |
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|
206,667 |
|
|
186,344 |
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|
187,557 |
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Other
loans |
|
13,555 |
|
|
6,361 |
|
|
7,298 |
|
|
6,938 |
|
|
7,515 |
|
Total
loans |
|
$ |
1,323,283 |
|
|
$ |
871,679 |
|
|
$ |
865,421 |
|
|
$ |
807,539 |
|
|
$ |
813,376 |
|
|
|
|
|
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|
|
|
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|
|
SmartFinancial, Inc. and Subsidiaries |
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Condensed
Consolidated Financial Information (unaudited) |
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(In
thousands, except per share data) |
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As of and for the three months ended |
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December 31, 2017 |
|
September 30, 2017 |
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June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
Asset Quality
Data and Ratios |
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Nonperforming loans |
|
$ |
1,766 |
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$ |
1,264 |
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$ |
1,147 |
|
|
$ |
1,445 |
|
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$ |
2,142 |
|
Foreclosed assets |
|
3,254 |
|
|
2,888 |
|
|
2,369 |
|
|
2,371 |
|
|
2,386 |
|
Total
nonperforming assets |
|
$ |
5,021 |
|
|
$ |
4,152 |
|
|
$ |
3,516 |
|
|
$ |
3,816 |
|
|
$ |
4,528 |
|
Restructured loans not included in nonperforming loans |
|
$ |
41 |
|
|
$ |
42 |
|
|
$ |
— |
|
|
$ |
301 |
|
|
$ |
608 |
|
Net
charge-offs to average loans (annualized) |
|
(0.01 |
)% |
|
(0.02 |
)% |
|
(0.04 |
)% |
|
(0.02 |
)% |
|
0.02 |
% |
Allowance
for loan losses to loans |
|
0.44 |
% |
|
0.62 |
% |
|
0.64 |
% |
|
0.64 |
% |
|
0.63 |
% |
Nonperforming loans to total loans, gross |
|
0.13 |
% |
|
0.15 |
% |
|
0.13 |
% |
|
0.18 |
% |
|
0.26 |
% |
Nonperforming assets to total assets |
|
0.29 |
% |
|
0.37 |
% |
|
0.31 |
% |
|
0.36 |
% |
|
0.43 |
% |
|
|
|
|
|
|
|
|
|
|
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Capital
Ratios |
|
|
|
|
|
|
|
|
|
|
Tangible
equity to tangible assets |
|
9.28 |
% |
|
11.45 |
% |
|
11.18 |
% |
|
12.06 |
% |
|
9.34 |
% |
Tangible
common equity to tangible assets |
|
9.28 |
% |
|
11.45 |
% |
|
11.18 |
% |
|
12.06 |
% |
|
8.20 |
% |
SmartFinancial Inc.: |
|
Estimated |
|
|
|
|
|
|
|
|
Tier 1
leverage |
|
12.21 |
% |
|
11.46 |
% |
|
11.91 |
% |
|
12.18 |
% |
|
9.81 |
% |
Common
equity Tier 1 |
|
11.85 |
% |
|
13.37 |
% |
|
13.43 |
% |
|
14.46 |
% |
|
10.05 |
% |
Tier 1
capital |
|
11.85 |
% |
|
13.37 |
% |
|
13.43 |
% |
|
14.46 |
% |
|
11.42 |
% |
Total
capital |
|
12.24 |
% |
|
13.93 |
% |
|
14.00 |
% |
|
15.05 |
% |
|
11.99 |
% |
SmartBank: |
|
Estimated |
|
|
|
|
|
|
|
|
Tier 1
leverage |
|
11.26 |
% |
|
10.57 |
% |
|
10.98 |
% |
|
11.17 |
% |
|
9.71 |
% |
Common
equity Tier 1 |
|
10.90 |
% |
|
12.30 |
% |
|
12.32 |
% |
|
13.13 |
% |
|
11.30 |
% |
Tier 1
capital |
|
10.90 |
% |
|
12.30 |
% |
|
12.32 |
% |
|
13.13 |
% |
|
11.30 |
% |
Total
capital |
|
11.30 |
% |
|
12.86 |
% |
|
12.89 |
% |
|
13.71 |
% |
|
11.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SmartFinancial, Inc. and Subsidiaries |
|
|
|
|
Condensed
Consolidated Financial Information (unaudited) |
|
|
(In
thousands) |
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balances |
|
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash
& cash equivalents |
|
$ |
113,027 |
|
|
$ |
84,098 |
|
|
$ |
82,835 |
|
|
$ |
55,548 |
|
|
$ |
68,748 |
|
Securities available for sale |
|
151,945 |
|
|
115,535 |
|
|
132,762 |
|
|
137,133 |
|
|
129,422 |
|
Other
investments |
|
6,081 |
|
|
6,081 |
|
|
6,080 |
|
|
5,628 |
|
|
5,628 |
|
Total
investment securities |
|
158,025 |
|
|
121,616 |
|
|
138,842 |
|
|
142,761 |
|
|
135,050 |
|
Total
loans |
|
1,323,283 |
|
|
871,679 |
|
|
865,421 |
|
|
807,539 |
|
|
813,376 |
|
Allowance
for loan losses |
|
(5,860 |
) |
|
(5,393 |
) |
|
(5,498 |
) |
|
(5,152 |
) |
|
(5,105 |
) |
Loans
net |
|
1,317,423 |
|
|
866,286 |
|
|
859,923 |
|
|
802,387 |
|
|
808,271 |
|
Premises
and equipment |
|
43,000 |
|
|
33,778 |
|
|
33,765 |
|
|
30,802 |
|
|
30,535 |
|
Foreclosed assets |
|
3,254 |
|
|
2,888 |
|
|
2,369 |
|
|
2,371 |
|
|
2,386 |
|
Goodwill
and other intangibles |
|
50,837 |
|
|
7,414 |
|
|
7,492 |
|
|
6,583 |
|
|
6,636 |
|
Cash
surrender value of life insurance |
|
21,647 |
|
|
11,484 |
|
|
11,392 |
|
|
1,329 |
|
|
1,321 |
|
Other
assets |
|
13,582 |
|
|
8,258 |
|
|
8,861 |
|
|
9,305 |
|
|
9,509 |
|
Total
assets |
|
$ |
1,720,795 |
|
|
$ |
1,135,822 |
|
|
$ |
1,145,479 |
|
|
$ |
1,051,086 |
|
|
$ |
1,062,456 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Non-interest demand |
|
$ |
220,520 |
|
|
$ |
185,386 |
|
|
$ |
183,324 |
|
|
$ |
160,673 |
|
|
$ |
153,483 |
|
Interest-bearing demand |
|
231,643 |
|
|
156,953 |
|
|
156,150 |
|
|
167,433 |
|
|
162,702 |
|
Money
market and savings |
|
543,645 |
|
|
306,358 |
|
|
324,014 |
|
|
274,994 |
|
|
274,605 |
|
Time
deposits |
|
442,774 |
|
|
311,490 |
|
|
318,147 |
|
|
286,600 |
|
|
316,275 |
|
Total
deposits |
|
1,438,582 |
|
|
960,187 |
|
|
981,635 |
|
|
889,700 |
|
|
907,065 |
|
Repurchase agreements |
|
24,055 |
|
|
26,542 |
|
|
22,946 |
|
|
23,153 |
|
|
26,622 |
|
FHLB
& other borrowings |
|
43,600 |
|
|
6,000 |
|
|
— |
|
|
60 |
|
|
18,505 |
|
Other
liabilities |
|
8,706 |
|
|
6,505 |
|
|
6,164 |
|
|
5,622 |
|
|
5,024 |
|
Total
liabilities |
|
1,514,943 |
|
|
999,234 |
|
|
1,010,745 |
|
|
918,535 |
|
|
957,216 |
|
Shareholders'
Equity |
|
|
|
|
|
|
|
|
|
|
Preferred
stock |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12 |
|
Common
stock |
|
11,152 |
|
|
8,243 |
|
|
8,219 |
|
|
8,211 |
|
|
5,896 |
|
Additional paid-in capital |
|
174,009 |
|
|
107,065 |
|
|
106,794 |
|
|
106,703 |
|
|
83,463 |
|
Retained
earnings |
|
21,889 |
|
|
21,654 |
|
|
19,969 |
|
|
18,320 |
|
|
16,871 |
|
Accumulated other comprehensive loss |
|
(1,198 |
) |
|
(374 |
) |
|
(248 |
) |
|
(683 |
) |
|
(1,002 |
) |
Total
shareholders' equity |
|
205,852 |
|
|
136,588 |
|
|
134,734 |
|
|
132,551 |
|
|
105,240 |
|
Total
liabilities & shareholders' equity |
|
$ |
1,720,795 |
|
|
$ |
1,135,822 |
|
|
$ |
1,145,479 |
|
|
$ |
1,051,086 |
|
|
$ |
1,062,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SmartFinancial, Inc. and Subsidiaries |
|
|
|
|
Condensed
Consolidated Financial Information (unaudited) |
|
|
(In
thousands, except per share data) |
|
|
|
|
INCOME STATEMENT |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
Interest
Income |
|
|
|
|
|
|
|
|
|
|
Loans,
including fees |
|
$ |
16,357 |
|
|
$ |
11,491 |
|
|
$ |
10,747 |
|
|
$ |
10,210 |
|
|
$ |
10,324 |
|
Investment securities |
|
770 |
|
|
740 |
|
|
692 |
|
|
661 |
|
|
570 |
|
Other
interest income |
|
117 |
|
|
86 |
|
|
78 |
|
|
73 |
|
|
83 |
|
Total
interest income |
|
17,244 |
|
|
12,317 |
|
|
11,517 |
|
|
10,944 |
|
|
10,977 |
|
Interest
Expense |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
1,807 |
|
|
1,373 |
|
|
1,241 |
|
|
1,098 |
|
|
1,066 |
|
Repurchase agreements |
|
15 |
|
|
15 |
|
|
16 |
|
|
16 |
|
|
17 |
|
FHLB and
other borrowings |
|
81 |
|
|
5 |
|
|
12 |
|
|
15 |
|
|
37 |
|
Total
interest expense |
|
1,903 |
|
|
1,393 |
|
|
1,269 |
|
|
1,129 |
|
|
1,121 |
|
Net interest
income |
|
15,341 |
|
|
10,924 |
|
|
10,249 |
|
|
9,815 |
|
|
9,856 |
|
Provision for loan
losses |
|
442 |
|
|
30 |
|
|
298 |
|
|
12 |
|
|
171 |
|
Net interest income
after provision for loan losses |
|
14,898 |
|
|
10,894 |
|
|
9,951 |
|
|
9,803 |
|
|
9,685 |
|
Non-interest
income |
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
|
524 |
|
|
294 |
|
|
291 |
|
|
265 |
|
|
277 |
|
Gain on
securities |
|
— |
|
|
144 |
|
|
— |
|
|
— |
|
|
— |
|
Gain on
sale of loans and other assets |
|
366 |
|
|
224 |
|
|
405 |
|
|
280 |
|
|
242 |
|
Gain
(loss) on sale of foreclosed assets |
|
(5 |
) |
|
(27 |
) |
|
1 |
|
|
(16 |
) |
|
6 |
|
Other
non-interest income |
|
691 |
|
|
585 |
|
|
556 |
|
|
402 |
|
|
422 |
|
Total
non-interest income |
|
1,576 |
|
|
1,220 |
|
|
1,253 |
|
|
932 |
|
|
948 |
|
Non-interest
expense |
|
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits |
|
6,272 |
|
|
5,035 |
|
|
4,758 |
|
|
4,679 |
|
|
4,422 |
|
Occupancy
expense |
|
1,217 |
|
|
1,114 |
|
|
963 |
|
|
978 |
|
|
875 |
|
FDIC
premiums |
|
150 |
|
|
102 |
|
|
61 |
|
|
153 |
|
|
166 |
|
Foreclosed asset expense |
|
53 |
|
|
20 |
|
|
12 |
|
|
(1 |
) |
|
37 |
|
Marketing |
|
167 |
|
|
177 |
|
|
129 |
|
|
164 |
|
|
79 |
|
Data
Processing |
|
583 |
|
|
483 |
|
|
475 |
|
|
333 |
|
|
541 |
|
Professional expenses |
|
602 |
|
|
472 |
|
|
473 |
|
|
538 |
|
|
558 |
|
Amortization of other intangibles |
|
155 |
|
|
78 |
|
|
61 |
|
|
53 |
|
|
39 |
|
Service
contracts |
|
426 |
|
|
363 |
|
|
313 |
|
|
296 |
|
|
281 |
|
Merger
expense |
|
1,694 |
|
|
303 |
|
|
420 |
|
|
— |
|
|
— |
|
Other
non-interest expense |
|
1,242 |
|
|
1,400 |
|
|
1,164 |
|
|
952 |
|
|
1,028 |
|
Total
non-interest expense |
|
12,561 |
|
|
9,547 |
|
|
8,829 |
|
|
8,145 |
|
|
8,026 |
|
Earnings before income
taxes |
|
3,913 |
|
|
2,567 |
|
|
2,374 |
|
|
2,590 |
|
|
2,607 |
|
Income tax expense |
|
3,875 |
|
|
882 |
|
|
726 |
|
|
946 |
|
|
960 |
|
Net income |
|
38 |
|
|
1,685 |
|
|
1,648 |
|
|
1,644 |
|
|
1,647 |
|
Dividends on preferred
stock |
|
— |
|
|
— |
|
|
— |
|
|
195 |
|
|
270 |
|
Net income available to
common shareholders |
|
$ |
38 |
|
|
$ |
1,685 |
|
|
$ |
1,648 |
|
|
$ |
1,449 |
|
|
$ |
1,377 |
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
SHARE |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.00 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.19 |
|
|
$ |
0.23 |
|
Diluted |
|
0.00 |
|
|
0.20 |
|
|
0.20 |
|
|
0.19 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding |
|
|
|
|
|
|
|
|
|
|
Basic |
|
10,552 |
|
|
8,235 |
|
|
8,217 |
|
|
7,525 |
|
|
5,891 |
|
Diluted |
|
10,709 |
|
|
8,333 |
|
|
8,326 |
|
|
7,631 |
|
|
6,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SmartFinancial, Inc. and Subsidiaries |
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Financial Information (unaudited) |
|
|
|
|
|
|
|
|
(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
YIELD
ANALYSIS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2017 |
|
Three Months Ended September 30, 2017 |
|
Three Months Ended December 31, 2016 |
|
|
Average |
|
|
|
Yield/ |
|
Average |
|
|
|
Yield/ |
|
Average |
|
|
|
Yield/ |
|
|
Balance |
|
Interest* |
|
Cost* |
|
Balance |
|
Interest * |
|
Cost* |
|
Balance |
|
Interest* |
|
Cost* |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
1,160,599 |
|
|
$ |
16,362 |
|
|
5.61 |
% |
|
$ |
868,352 |
|
|
$ |
11,496 |
|
|
5.25 |
% |
|
$ |
799,397 |
|
|
$ |
10,329 |
|
|
5.14 |
% |
Investment securities and interest bearing due froms |
|
131,215 |
|
|
781 |
|
|
2.37 |
% |
|
142,089 |
|
|
757 |
|
|
2.11 |
% |
|
155,426 |
|
|
586 |
|
|
1.50 |
% |
Federal
funds and other |
|
25,905 |
|
|
117 |
|
|
1.80 |
% |
|
31,864 |
|
|
86 |
|
|
1.07 |
% |
|
14,266 |
|
|
83 |
|
|
2.31 |
% |
Total interest-earning
assets |
|
1,317,719 |
|
|
17,260 |
|
|
5.21 |
% |
|
1,042,305 |
|
|
12,339 |
|
|
4.70 |
% |
|
969,089 |
|
|
10,998 |
|
|
4.51 |
% |
Non-interest-earning assets |
|
170,441 |
|
|
|
|
|
|
96,147 |
|
|
|
|
|
|
53,721 |
|
|
|
|
|
Total assets |
|
$ |
1,488,160 |
|
|
|
|
|
|
$ |
1,138,452 |
|
|
|
|
|
|
$ |
1,031,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits |
|
$ |
195,783 |
|
|
$ |
213 |
|
|
0.43 |
% |
|
$ |
153,838 |
|
|
$ |
118 |
|
|
0.30 |
% |
|
$ |
151,108 |
|
|
$ |
78 |
|
|
0.21 |
% |
Money
market and savings deposits |
|
462,674 |
|
|
488 |
|
|
0.42 |
% |
|
329,933 |
|
|
519 |
|
|
0.62 |
% |
|
273,257 |
|
|
318 |
|
|
0.46 |
% |
Time
deposits |
|
398,142 |
|
|
1,106 |
|
|
1.11 |
% |
|
311,668 |
|
|
736 |
|
|
0.94 |
% |
|
295,529 |
|
|
670 |
|
|
0.90 |
% |
Total interest-bearing
deposits |
|
1,056,599 |
|
|
1,807 |
|
|
0.68 |
% |
|
795,439 |
|
|
1,373 |
|
|
0.68 |
% |
|
719,894 |
|
|
1,066 |
|
|
0.59 |
% |
Securities sold under agreement to repurchase |
|
20,226 |
|
|
15 |
|
|
0.30 |
% |
|
20,589 |
|
|
15 |
|
|
0.29 |
% |
|
21,848 |
|
|
17 |
|
|
0.31 |
% |
Federal
Home Loan Bank advances and other borrowings |
|
8,281 |
|
|
81 |
|
|
3.89 |
% |
|
381 |
|
|
5 |
|
|
5.21 |
% |
|
23,823 |
|
|
37 |
|
|
0.62 |
% |
Total interest-bearing
liabilities |
|
1,085,106 |
|
|
1,903 |
|
|
0.70 |
% |
|
816,409 |
|
|
1,393 |
|
|
0.68 |
% |
|
765,565 |
|
|
1,120 |
|
|
0.58 |
% |
Noninterest-bearing deposits |
|
203,457 |
|
|
|
|
|
|
179,968 |
|
|
|
|
|
|
154,171 |
|
|
|
|
|
Other
liabilities |
|
15,302 |
|
|
|
|
|
|
5,978 |
|
|
|
|
|
|
6,514 |
|
|
|
|
|
Total liabilities |
|
1,303,865 |
|
|
|
|
|
|
1,002,355 |
|
|
|
|
|
|
926,244 |
|
|
|
|
|
Shareholders’
equity |
|
184,295 |
|
|
|
|
|
|
136,097 |
|
|
|
|
|
|
105,643 |
|
|
|
|
|
Total liabilities and
stockholders’ equity |
|
$ |
1,488,160 |
|
|
|
|
|
|
$ |
1,138,452 |
|
|
|
|
|
|
$ |
1,031,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
taxable equivalent |
|
|
|
$ |
15,357 |
|
|
|
|
|
|
$ |
10,946 |
|
|
|
|
|
|
$ |
9,878 |
|
|
|
Interest rate
spread |
|
|
|
|
|
4.51 |
% |
|
|
|
|
|
4.02 |
% |
|
|
|
|
|
3.93 |
% |
Tax equivalent net
interest margin |
|
|
|
|
|
4.64 |
% |
|
|
|
|
|
4.17 |
% |
|
|
|
|
|
4.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of average
interest-earning assets to average interest-bearing
liabilities |
|
|
|
|
|
121.44 |
% |
|
|
|
|
|
127.67 |
% |
|
|
|
|
|
126.6 |
% |
Percentage
of average equity to average assets |
|
|
|
|
|
12.38 |
% |
|
|
|
|
|
11.95 |
% |
|
|
|
|
|
10.24 |
% |
*Taxable
equivalent basis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SmartFinancial, Inc. and Subsidiaries |
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
|
|
Condensed
Consolidated Financial Information (unaudited) |
|
|
|
|
(In
thousands, except for per share data) |
|
|
|
|
|
|
Three months ended |
|
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
Net interest
income, Taxable Equivalent |
|
|
|
|
|
|
|
|
|
|
Net
interest income (GAAP) |
|
$ |
15,341 |
|
|
$ |
10,924 |
|
|
$ |
10,248 |
|
|
$ |
9,815 |
|
|
$ |
9,856 |
|
Taxable
equivalent adjustment |
|
16 |
|
|
22 |
|
|
21 |
|
|
21 |
|
|
22 |
|
Net
interest income, Taxable Equivalent (Non-GAAP) |
|
$ |
15,357 |
|
|
$ |
10,946 |
|
|
$ |
10,269 |
|
|
$ |
9,836 |
|
|
$ |
9,878 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Earnings |
|
|
|
|
|
|
|
|
|
|
Net
income (GAAP) |
|
$ |
38 |
|
|
$ |
1,685 |
|
|
$ |
1,648 |
|
|
$ |
1,644 |
|
|
$ |
1,647 |
|
Securities (gains) losses |
|
— |
|
|
(144 |
) |
|
— |
|
|
— |
|
|
— |
|
Foreclosed assets (gains) losses |
|
5 |
|
|
27 |
|
|
— |
|
|
15 |
|
|
(6 |
) |
Merger
and conversion costs |
|
1,694 |
|
|
303 |
|
|
420 |
|
|
— |
|
|
— |
|
Revaluation of deferred tax assets due to change in tax law |
|
2,482 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Income
tax effect of adjustments |
|
(508 |
) |
|
(36 |
) |
|
(3 |
) |
|
(6 |
) |
|
2 |
|
Net
operating earnings (Non-GAAP) |
|
3,710 |
|
|
1,836 |
|
|
2,065 |
|
|
1,653 |
|
|
1,643 |
|
Dividends
on preferred stock |
|
— |
|
|
— |
|
|
— |
|
|
(195 |
) |
|
(270 |
) |
Net
operating earnings available to common shareholders (Non-GAAP) |
|
$ |
3,710 |
|
|
$ |
1,836 |
|
|
$ |
2,065 |
|
|
$ |
1,458 |
|
|
$ |
1,373 |
|
Net
operating earnings per common share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.35 |
|
|
$ |
0.22 |
|
|
$ |
0.25 |
|
|
$ |
0.19 |
|
|
$ |
0.23 |
|
Diluted |
|
0.35 |
|
|
0.22 |
|
|
0.25 |
|
|
0.19 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (GAAP) |
|
74.25 |
% |
|
78.62 |
% |
|
76.77 |
% |
|
75.79 |
% |
|
74.29 |
% |
Adjustment for taxable equivalent yields |
|
— |
% |
|
(0.22 |
)% |
|
(0.22 |
)% |
|
(0.25 |
)% |
|
(0.26 |
)% |
Adjustment for securities gains (losses) |
|
— |
% |
|
1.50 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
Adjustment for OREO gains (losses) |
|
(0.04 |
)% |
|
(0.28 |
)% |
|
— |
% |
|
(0.18 |
)% |
|
0.08 |
% |
Adjustment for merger & conversion costs |
|
(13.48 |
)% |
|
(3.18 |
)% |
|
(4.76 |
)% |
|
— |
% |
|
— |
% |
Operating
efficiency ratio (Non-GAAP) |
|
60.73 |
% |
|
76.44 |
% |
|
71.79 |
% |
|
75.36 |
% |
|
74.11 |
% |
|
|
|
|
|
|
|
|
|
|
|
Loan Discount
Data |
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses (GAAP) |
|
$ |
5,860 |
|
|
$ |
5,393 |
|
|
$ |
5,498 |
|
|
$ |
5,152 |
|
|
$ |
5,105 |
|
Net
acquisition accounting fair value discounts to loans |
|
$ |
17,862 |
|
|
$ |
8,167 |
|
|
$ |
9,086 |
|
|
$ |
9,831 |
|
|
$ |
10,271 |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common
Equity |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity (GAAP) |
|
$ |
205,852 |
|
|
$ |
136,588 |
|
|
$ |
134,734 |
|
|
$ |
132,551 |
|
|
$ |
105,240 |
|
Less
preferred stock & preferred stock paid in capital |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12,000 |
|
Less
goodwill and other intangible assets |
|
50,837 |
|
|
7,414 |
|
|
7,492 |
|
|
6,583 |
|
|
6,636 |
|
Tangible
common equity (Non-GAAP) |
|
$ |
155,015 |
|
|
$ |
129,174 |
|
|
$ |
127,242 |
|
|
$ |
125,968 |
|
|
$ |
86,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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