Exhibit 99.1
3Q 2016
SmartFinancial Reports Third Quarter Results
KNOXVILLE, TN - October 26, 2016 - SmartFinancial, Inc. ("SmartFinancial"; NASDAQ: SMBK), announced today net income of $1.6 million in its third quarter of 2016, compared to $(0.1) million a year ago. In the third quarter 2015, SmartFinancial successfully completed the merger of two holding companies, legacy SmartFinancial, Inc. and Cornerstone Bancshares, Inc., and carried forward the name "SmartFinancial, Inc." In the first quarter of 2016, SmartFinancial completed the merger of Cornerstone Community Bank with and into SmartBank. This quarter completes the fourth full quarter’s results from the combined company and the second full quarter's results of the merged bank.
Billy Carroll, President & CEO, stated: "We are pleased to see the hard work of our associates materialize in the form of improved results for our shareholders with increases in earnings per share, return on equity and return on assets this quarter. Loan growth was over 12 percent annualized, which was the second quarter it grew at a double digit pace. Our non-interest income is improving thanks to the results from our mortgage business and higher deposit service charges driven by balance growth. Our non interest expense reduction was primarily due to merger efficiencies. We are excited to put our merger expenses behind us and concentrate on the successful execution of our 2016 goals.”
SmartFinancial's Chairman, Miller Welborn, concluded: "It is exciting to see the internal achievements we have made as a company translate into improved external results. To be able to grow while maintaining a strong margin, improving asset quality, and increasing efficiencies is a testament to leadership at all levels of our company. Every day we strive to achieve our goals of being a best place to work, a great place to bank and especially rewarding for our shareholders. "
Performance Highlights
| |
| • | Net income available to common shareholders totaled $1.3 million or $0.23 per share during the third quarter of 2016. |
| |
| • | Annualized return on average assets equaled 0.63 percent in the third quarter of 2016, compared to 0.48 percent in the previous quarter. |
| |
| • | Annualized net loan growth was approximately 12.42 percent in the third quarter of 2016, with a healthy mix of construction & development, residential real estate, and commercial real estate loan growth. |
| |
| • | Asset quality was outstanding with nonperforming assets to total assets dropping to just 0.41 percent. |
| |
| • | Non interest income as a percent of average assets increased to 0.47 percent as the sale of mortgage and SBA loans increased over 45 percent. |
Third Quarter 2016 compared to Second Quarter 2016
Net operating earnings available to common shareholders, which excludes purchased loans accounting adjustments, securities gains, merger and conversion costs, and foreclosed assets gains and losses, totaled $1,131 thousand in the third quarter of 2016 compared to $634 thousand in the previous quarter. Net income available to common shareholders totaled $1.3 million in the third quarter of 2016, or $0.22 per diluted share, compared to $0.9 million, or $0.15 per diluted share, in the second quarter of 2016.
Net interest income to average assets of 3.79 percent for the quarter decreased from 3.87 percent in the second quarter of 2016. Net interest income totaled $9.7 million in the third quarter of 2016 compared to $9.6 million in the second quarter of 2016. Net interest income was positively impacted during the quarter by increased loan balances. Net interest margin, taxable equivalent, fell slightly from 4.11 percent in the second quarter of 2016 to 4.03 percent in the third quarter of 2016 primarily as a result of a reduction in purchased loan accounting adjustments and lower balances and yields in the securities portfolio.
Provision for loan losses was $261 thousand in the third quarter of 2016, compared to $218 thousand in the second quarter of 2016 . The increase in provision for loan losses was primarily due to the growth of the loan portfolio during the quarter. Annualized net charge-offs remained the same at 0.01 percent of average loans in the second third quarter of 2016.
The ALLL was $5.0 million, or 0.62 percent of total loans as of September 30, 2016, compared to $4.7 million, or 0.61 percent of total loans, as of June 30, 2016. Adjusted ALLL, which includes the ALLL as well as net acquisition accounting fair value adjustments for acquired loans, was 1.93 percent of total loans as of September 30, 2016, which was down from 2.00 percent as of June 30, 2016. The reduction in adjusted ALLL resulted from continued accretion of fair value discounts.
Nonperforming loans as a percentage of total loans was 0.21 percent as of September 30, 2016, which was down from 0.29 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 0.41 percent as of September 30, 2016, compared to 0.69 percent as of June 30, 2016.
Non-interest income to average assets of 0.47 percent for the quarter increased from 0.39 percent in the second quarter of 2016. Non-interest income totaled $1.2 million in the third quarter of 2016, compared to $961 thousand in the second quarter of 2016. The increase in non-interest income was primarily due to higher service charges and fees, higher gains on the sale of SBA and mortgage loans, and gains on sale of foreclosed assets.
Non-interest expense to average assets of 3.16 percent for the quarter was down from 3.41 percent in the second quarter of 2016. Non-interest expense totaled $8.0 million in the third quarter of 2016, which was down $422 thousand from the second quarter of 2016 primarily due to normalized post merger data processing costs, the completion of repairs at one branch, and a drop in salary and employee benefit expenses. Occupancy expense of $965 thousand was down $172 thousand from the previous quarter due to the completion of a repair project at one branch. Data processing expenses decreased $98 thousand compared to the second quarter in the absence of merger related costs.
Income tax expense was $947 thousand in the third quarter of 2016 compared to $691 thousand in the second quarter of 2016. The company's effective tax rate was 37.02 percent in the third quarter of 2016 compared to 36.71 percent in the second quarter of 2016.
Third Quarter 2016 compared to Third Quarter 2015
Net operating earnings available to common shareholders, which excludes purchased loans accounting adjustments, securities gains, merger and conversion costs, and foreclosed assets gains and losses, totaled $1.1 million in the third quarter of 2016 compared to $154 thousand in the third quarter of 2015. Net income available to common shareholders totaled $1.3 million in the third quarter of 2016, or $0.22 per diluted share, compared to $(107) thousand, or $(0.03) per diluted share, in the third quarter of 2015. The company's operations and financial performance were significantly impacted in nearly every respect by the merger of SmartFinancial, Inc. and Cornerstone Bancshares, Inc. on August 31, 2015. Therefore, financial results in 3Q 2016 are not comparable to results reported for 3Q 2015.
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 twelve branches, two loan production offices, and one mortgage production office located in East Tennessee, the Florida Panhandle, and North Georgia. Recruiting the best people, delivering exceptional client service, strategic branching and a conservative and disciplined approach to lending have all given rise to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartbank.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: 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 Reports 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.
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; (iii) adjusted allowance for loan losses to loans; and (iv) 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, merger and conversion costs, OREO gain and losses, and the income tax effect of adjustments. The operating efficiency ratio excludes securities gains and losses, merger and conversion costs, and adjustment for OREO gains and losses from the efficiency ratio. Adjusted allowance for loan losses adds net acquisition accounting fair value discounts to the allowance for loan losses. 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
SmartFinancial, Inc.
Investor Contacts
Billy Carroll
President & CEO
865.868.0613
Frank Hughes
Executive Vice President
Investor Relations
423.385.3009
Media Contact
Kelley Fowler
First Vice President, Public Relations & Marketing
SmartBank
865.868.0611
kfowler@smartbank.net
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| | | | | | | | | | | | | | | | | | | | |
| SmartFinancial, Inc. and Subsidiaries | | | | |
| Condensed Consolidated Financial Information (unaudited) | | | | |
| (In thousands except per share data) | | | | |
| | | As of and for the three months ending |
| | | September 30, 2016 | | June 30, 2016 | | March 31, 2016 | | December 31, 2015 | | September 30, 2015 |
| Selected Performance Ratios (Annualized) | | | | | | | | | | |
| Return on average assets | | 0.63 | % | | 0.48 | % | | 0.54 | % | | 0.47 | % | | (0.04 | )% |
| Net operating return on average assets (Non-GAAP) | | 0.44 | % | | 0.26 | % | | 0.40 | % | | 0.24 | % | | 0.10 | % |
| Return on average shareholder equity | | 6.19 | % | | 4.64 | % | | 5.29 | % | | 4.75 | % | | (0.44 | )% |
| Net operating return on average shareholder equity (Non-GAAP) | | 4.35 | % | | 2.47 | % | | 3.89 | % | | 2.47 | % | | 1.05 | % |
| Net interest income / average assets | | 3.79 | % | | 3.87 | % | | 3.67 | % | | 3.79 | % | | 3.65 | % |
| Yield on earning assets, TE (Non-GAAP) | | 4.48 | % | | 4.56 | % | | 4.40 | % | | 4.54 | % | | 4.50 | % |
| Cost of interest-bearing liabilities | | 0.57 | % | | 0.56 | % | | 0.53 | % | | 0.52 | % | | 0.53 | % |
| Net interest margin, TE (Non-GAAP) | | 4.03 | % | | 4.11 | % | | 3.96 | % | | 4.10 | % | | 4.04 | % |
| Non-interest income / average assets | | 0.47 | % | | 0.39 | % | | 0.43 | % | | 0.46 | % | | 0.10 | % |
| Non-interest expense / average assets | | 3.16 | % | | 3.41 | % | | 3.19 | % | | 3.20 | % | | 3.69 | % |
| Efficiency ratio | | 74.06 | % | | 80.13 | % | | 77.95 | % | | 75.24 | % | | 98.38 | % |
| Operating efficiency ratio (Non-GAAP) | | 80.31 | % | | 85.49 | % | | 82.09 | % | | 85.73 | % | | 90.96 | % |
| Pre-tax pre-provision income / average assets | | 1.09 | % | | 0.85 | % | | 0.90 | % | | 1.05 | % | | 0.06 | % |
| | | | | | | | | | | |
| Per Common Share | | | | | | | | | | |
| Net income, basic | | $ | 0.23 |
| | $ | 0.16 |
| | $ | 0.20 |
| | $ | 0.20 |
| | $ | (0.03 | ) |
| Net income, diluted | | 0.22 |
| | 0.15 |
| | 0.19 |
| | 0.19 |
| | (0.03 | ) |
| Net operating earnings, basic (Non-GAAP) | | 0.19 |
| | 0.11 |
| | 0.13 |
| | 0.10 |
| | 0.04 |
|
| Net operating earnings, diluted (Non-GAAP) | | 0.19 |
| | 0.10 |
| | 0.13 |
| | 0.10 |
| | 0.04 |
|
| Book value as of | | 15.80 |
| | 15.64 |
| | 15.47 |
| | 15.19 |
| | 15.07 |
|
| Tangible book value (Non-GAAP) as of | | 14.67 |
| | 14.48 |
| | 14.29 |
| | 13.99 |
| | 13.84 |
|
| Common shares outstanding as of | | 5,897 |
| | 5,824 |
| | 5,817 |
| | 5,806 |
| | 5,735 |
|
| | | | | | | | | | | |
| Composition Of Loans | | | | | | | | | | |
| Commercial & financial | | $ | 83,471 |
| | $ | 87,253 |
| | $ | 83,197 |
| | $ | 85,526 |
| | $ | 81,107 |
|
| Real estate construction & Development | | 128,727 |
| | 115,385 |
| | 113,028 |
| | 105,132 |
| | 97,050 |
|
| Real estate commercial | | 394,989 |
| | 389,368 |
| | 370,922 |
| | 369,263 |
| | 365,607 |
|
| owner occupied | | 172,397 |
| | 177,052 |
| | 166,364 |
| | 161,698 |
| | 153,496 |
|
| non-owner occupied | | 222,592 |
| | 212,315 |
| | 204,558 |
| | 207,565 |
| | 212,111 |
|
| Real estate residential | | 182,952 |
| | 174,013 |
| | 166,214 |
| | 161,427 |
| | 162,090 |
|
| Other loans | | 7,263 |
| | 7,377 |
| | 7,578 |
| | 6,368 |
| | 4,585 |
|
| Total loans | | $ | 797,402 |
| | $ | 773,396 |
|
| $ | 740,939 |
| | $ | 727,716 |
| | $ | 710,439 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| SmartFinancial, Inc. and Subsidiaries | | | | |
| Condensed Consolidated Financial Information (unaudited) | | | | |
| (In thousands except per share data) | | | | |
| | | As of and for the three months ending |
| | | September 30, 2016 | | June 30, 2016 | | March 31, 2016 | | December 31, 2015 | | September 30, 2015 |
| Asset Quality Data and Ratios | | | | | | | | | | |
| Nonperforming loans | | $ | 1,688 |
| | $ | 2,226 |
| | $ | 3,171 |
| | $ | 2,754 |
| | $ | 1,715 |
|
| Foreclosed assets | | 2,536 |
| | 4,936 |
| | 5,133 |
| | 5,358 |
| | 9,647 |
|
| Total nonperforming assets | | $ | 4,224 |
| | $ | 7,162 |
| | $ | 8,304 |
| | $ | 8,112 |
| | $ | 11,362 |
|
| Restructured loans not included in nonperforming loans | | $ | 3,388 |
| | $ | 3,639 |
| | $ | 3,677 |
| | $ | 3,693 |
| | $ | 3,731 |
|
| Net charge-offs to average loans (annualized) | | 0.01 | % | | 0.01 | % | | (0.02 | )% | | 0.02 | % | | 0.03 | % |
| Allowance for loan losses to loans | | 0.62 | % | | 0.61 | % | | 0.61 | % | | 0.60 | % | | 0.54 | % |
| Adjusted allowance for loan losses to loans (Non-GAAP) | | 1.93 | % | | 2.00 | % | | 2.11 | % | | 2.18 | % | | 2.26 | % |
| Nonperforming loans to total loans, gross | | 0.21 | % | | 0.29 | % | | 0.43 | % | | 0.38 | % | | 0.24 | % |
| Nonperforming assets to total assets | | 0.41 | % | | 0.69 | % | | 0.82 | % | | 0.79 | % | | 1.13 | % |
| | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | |
| Tangible equity to tangible assets | | 9.53 | % | | 9.37 | % | | 9.43 | % | | 9.17 | % | | 9.14 | % |
| Tangible common equity to tangible assets | | 8.37 | % | | 8.20 | % | | 8.24 | % | | 7.99 | % | | 7.94 | % |
| SmartFinancial Inc.: | | Estimated |
| | | | | | | | |
| Tier 1 leverage | | 9.92 | % | | 9.66 | % | | 9.74 | % | | 9.45 | % | | 9.31 | % |
| Common equity Tier 1 | | 10.36 | % | | 10.53 | % | | 10.61 | % | | 10.3 | % | | 10.25 | % |
| Tier 1 risk-based capital | | 11.83 | % | | 12.04 | % | | 12.14 | % | | 11.78 | % | | 11.77 | % |
| Total risk-based capital | | 12.39 | % | | 12.60 | % | | 12.70 | % | | 12.32 | % | | 12.25 | % |
| SmartBank: | | Estimated |
| | | | | | | | |
| Tier 1 leverage | | 9.85 | % | | 9.70 | % | | 9.49 | % | | 10.05 | % | | 10.13 | % |
| Common equity Tier 1 | | 11.48 | % | | 11.31 | % | | 11.64 | % | | 12.16 | % | | 12.57 | % |
| Tier 1 risk-based capital | | 11.48 | % | | 11.31 | % | | 11.64 | % | | 12.16 | % | | 12.57 | % |
| Total risk-based capital | | 12.05 | % | | 11.87 | % | | 12.20 | % | | 12.97 | % | | 13.43 | % |
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| | | | | | | | | | | | | | | | | | | | |
| SmartFinancial, Inc. and Subsidiaries | | | | |
| Condensed Consolidated Financial Information (unaudited) | | |
| (In thousands) | | | | |
| BALANCE SHEET | | | | | | | | | | |
| | | Ending Balances |
| | | September 30, 2016 | | June 30, 2016 | | March 31, 2016 | | December 31, 2015 | | September 30, 2015 |
| Assets | | |
| | |
| | |
| | |
| | |
|
| Cash & cash equivalents | | $ | 58,587 |
| | $ | 71,737 |
| | $ | 68,933 |
| | $ | 79,965 |
| | $ | 89,936 |
|
| Securities available for sale | | 138,628 |
| | 142,875 |
| | 157,560 |
| | 166,413 |
| | 152,150 |
|
| Other investments | | 4,451 |
| | 4,451 |
| | 4,451 |
| | 4,451 |
| | 4,451 |
|
| Total investment securities | | 143,079 |
| | 147,326 |
| | 162,011 |
| | 170,864 |
| | 156,601 |
|
| Total loans | | 797,403 |
| | 773,396 |
| | 740,939 |
| | 727,716 |
| | 710,439 |
|
| Allowance for loan losses | | (4,964 | ) | | (4,720 | ) | | (4,527 | ) | | (4,355 | ) | | (3,828 | ) |
| Loans net | | 792,439 |
| | 768,676 |
| | 736,412 |
| | 723,361 |
| | 706,611 |
|
| Premises and equipment | | 27,863 |
| | 25,844 |
| | 25,680 |
| | 25,038 |
| | 25,266 |
|
| Foreclosed assets | | 2,536 |
| | 4,936 |
| | 5,133 |
| | 5,358 |
| | 9,647 |
|
| Goodwill and other intangibles | | 6,675 |
| | 6,754 |
| | 6,848 |
| | 6,941 |
| | 7,034 |
|
| Other assets | | 9,371 |
| | 9,524 |
| | 11,207 |
| | 12,436 |
| | 11,962 |
|
| Total assets | | $ | 1,040,550 |
| | $ | 1,034,798 |
| | $ | 1,016,224 |
| | $ | 1,023,963 |
| | $ | 1,007,057 |
|
| | | | | | | | | | | |
| Liabilities | | |
| | |
| | |
| | |
| | |
|
| Non-interest demand | | $ | 145,509 |
| | $ | 145,864 |
| | $ | 132,481 |
| | $ | 131,419 |
| | $ | 123,551 |
|
| Interest-bearing demand | | 152,216 |
| | 153,166 |
| | 161,454 |
| | 149,424 |
| | 144,012 |
|
| Money market and savings | | 271,259 |
| | 258,281 |
| | 241,500 |
| | 236,901 |
| | 231,477 |
|
| Time deposits | | 291,857 |
| | 331,438 |
| | 323,676 |
| | 340,739 |
| | 347,951 |
|
| Total deposits | | 860,842 |
| | 888,749 |
| | 859,111 |
| | 858,483 |
| | 846,992 |
|
| Repurchase agreements | | 24,202 |
| | 26,883 |
| | 20,747 |
| | 28,068 |
| | 18,442 |
|
| FHLB & other borrowings | | 43,048 |
| | 10,091 |
| | 30,125 |
| | 34,187 |
| | 39,278 |
|
| Other liabilities | | 7,287 |
| | 6,011 |
| | 4,253 |
| | 3,048 |
| | 3,908 |
|
| Total liabilities | | 935,379 |
| | 931,734 |
| | 914,236 |
| | 923,786 |
| | 908,621 |
|
| Shareholders' Equity | | | | | | | | | | |
| Preferred stock | | 12 |
| | 12 |
| | 12 |
| | 12 |
| | 12 |
|
| Common stock | | 5,897 |
| | 5,824 |
| | 5,817 |
| | 5,806 |
| | 5,732 |
|
| Additional paid-in capital | | 83,319 |
| | 82,800 |
| | 82,717 |
| | 82,616 |
| | 81,628 |
|
| Retained earnings | | 15,494 |
| | 14,153 |
| | 13,231 |
| | 12,095 |
| | 10,942 |
|
| Accumulated other comprehensive loss | | 449 |
| | 275 |
| | 211 |
| | (352 | ) | | 122 |
|
| Total shareholders' equity | | 105,171 |
| | 103,064 |
| | 101,988 |
| | 100,177 |
| | 98,436 |
|
| Total liabilities & shareholders' equity | | $ | 1,040,550 |
| | $ | 1,034,798 |
| | $ | 1,016,224 |
| | $ | 1,023,963 |
| | $ | 1,007,057 |
|
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| | | | | | | | | | | | | | | | | | | | |
| SmartFinancial, Inc. and Subsidiaries | | | | |
| Condensed Consolidated Financial Information (unaudited) | | |
| (In thousands) | | | | |
| INCOME STATEMENT | | | | | | | | | | |
| | | Three months ending |
| | | September 30, 2016 | | June 30, 2016 | | March 31, 2016 | | December 31, 2015 | | September 30, 2015 |
| Interest Income | | | | | | | | | | |
| Loans, including fees | | $ | 10,111 |
| | $ | 9,954 |
| | $ | 9,374 |
| | $ | 9,875 |
| | $ | 6,660 |
|
| Investment securities | | 602 |
| | 665 |
| | 717 |
| | 630 |
| | 458 |
|
| Other interest income | | 51 |
| | 50 |
| | 63 |
| | 62 |
| | 35 |
|
| Total interest income | | 10,763 |
| | 10,670 |
| | 10,154 |
| | 10,567 |
| | 7,153 |
|
| Interest Expense | | | | | | | | | | |
| Deposits | | 1,065 |
| | 1,013 |
| | 961 |
| | 937 |
| | 688 |
|
| Repurchase agreements | | 17 |
| | 15 |
| | 17 |
| | 17 |
| | 7 |
|
| FHLB and other borrowings | | 17 |
| | 29 |
| | 45 |
| | 66 |
| | 32 |
|
| Total interest expense | | 1,099 |
| | 1,057 |
| | 1,023 |
| | 1,020 |
| | 727 |
|
| Net interest income | | 9,665 |
| | 9,613 |
| | 9,131 |
| | 9,547 |
| | 6,426 |
|
| Provision for loan losses | | 261 |
| | 218 |
| | 138 |
| | 567 |
| | 32 |
|
| Net interest income after provision for loan losses | | 9,404 |
| | 9,394 |
| | 8,993 |
| | 8,980 |
| | 6,394 |
|
| Non-interest income | | | | | | | | | | |
| Service charges on deposit accounts | | 296 |
| | 259 |
| | 296 |
| | 397 |
| | 237 |
|
| Gain on securities | | 18 |
| | 98 |
| | 83 |
| | — |
| | — |
|
| Gain on sale of loans and other assets | | 287 |
| | 197 |
| | 222 |
| | 86 |
| | (294 | ) |
| Gain (loss) on sale of foreclosed assets | | 130 |
| | (4 | ) | | 58 |
| | 332 |
| | (86 | ) |
| Other non-interest income | | 472 |
| | 410 |
| | 412 |
| | 340 |
| | 317 |
|
| Total non-interest income | | 1,204 |
| | 961 |
| | 1,071 |
| | 1,155 |
| | 174 |
|
| | | | | | | | | | | |
| Non-interest expense | | | | | | | | | | |
| Salaries and employee benefits | | 4,312 |
| | 4,486 |
| | 4,495 |
| | 4,208 |
| | 3,187 |
|
| Occupancy expense | | 965 |
| | 1,137 |
| | 1,018 |
| | 910 |
| | 688 |
|
| FDIC premiums | | 153 |
| | 151 |
| | 136 |
| | 148 |
| | 144 |
|
| Foreclosed asset expense | | 79 |
| | 64 |
| | 57 |
| | 110 |
| | 91 |
|
| Marketing | | 179 |
| | 184 |
| | 173 |
| | 100 |
| | 142 |
|
| Data Processing | | 457 |
| | 555 |
| | 341 |
| | 510 |
| | 278 |
|
| Professional expenses | | 558 |
| | 551 |
| | 455 |
| | 760 |
| | 908 |
|
| Amortization of other intangibles | | 80 |
| | 93 |
| | 93 |
| | 93 |
| | 58 |
|
| Service contracts | | 272 |
| | 316 |
| | 286 |
| | 248 |
| | 192 |
|
| Other non-interest expense | | 994 |
| | 936 |
| | 897 |
| | 965 |
| | 805 |
|
| Total non-interest expense | | 8,050 |
| | 8,472 |
| | 7,952 |
| | 8,052 |
| | 6,493 |
|
| Earnings before income taxes | | 2,558 |
| | 1,883 |
| | 2,112 |
| | 2,083 |
| | 75 |
|
| Income tax expense | | 947 |
| | 691 |
| | 764 |
| | 901 |
| | 152 |
|
| Net income (loss) | | 1,611 |
| | 1,192 |
| | 1,348 |
| | 1,182 |
| | (77 | ) |
| Dividends on preferred stock | | 270 |
| | 270 |
| | 212 |
| | 30 |
| | 30 |
|
| Net income available to common shareholders | | $ | 1,341 |
| | $ | 922 |
| | $ | 1,136 |
| | $ | 1,152 |
| | $ | (107 | ) |
| | | | | | | | | | | |
| NET INCOME PER COMMON SHARE | | | | | | | | | | |
| Basic | | $ | 0.23 |
| | $ | 0.16 |
| | $ | 0.20 |
| | $ | 0.20 |
| | $ | (0.03 | ) |
| Diluted | | 0.22 |
| | 0.15 |
| | 0.19 |
| | 0.19 |
| | (0.03 | ) |
| | | | | | | | | | | |
| Weighted average common shares outstanding | | | | | | | | | | |
| Basic | | 5,846 |
| | 5,820 |
| | 5,807 |
| | 5,750 |
| | 3,937 |
|
| Diluted | | 6,108 |
| | 6,132 |
| | 6,108 |
| | 6,037 |
| | 4,244 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SmartFinancial, Inc. and Subsidiaries | | | | | | | | | | |
| Condensed Consolidated Financial Information (unaudited) | | | | | | | | |
| (In thousands) | | | | | | | | | | | | |
| YIELD ANALYSIS | | | | | | | | | | | | |
| | | Three Months Ended September 30, 2016 | | Three months ended June 30, 2016 | | Three Months Ended September 30, 2015 |
| | | Average | | | | Yield/ | | Average | | | | Yield/ | | Average | | | | Yield/ |
| | | Balance | | Interest * | | Cost* | | Balance | | Interest * | | Cost* | | Balance | | Interest * | | Cost* |
| Assets | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Loans | | $ | 788,585 |
| | $ | 10,112 |
| | 5.09 | % | | $ | 751,425 |
| | $ | 9,955 |
| | 5.26 | % | | $ | 489,926 |
| | $ | 6,661 |
| | 5.39 | % |
| Investment securities and interest bearing due froms | | 159,683 |
| | 615 |
| | 1.53 | % | | 171,526 |
| | 678 |
| | 1.57 | % | | 107,061 |
| | 449 |
| | 1.66 | % |
| Federal funds and other | | 5,442 |
| | 51 |
| | 3.72 | % | | 5,719 |
| | 50 |
| | 3.47 | % | | 33,539 |
| | 44 |
| | 0.52 | % |
| Total interest-earning assets | | 953,710 |
| | 10,778 |
| | 4.48 | % | | 928,670 |
| | 10,683 |
| | 4.56 | % | | 630,526 |
| | 7,154 |
| | 4.50 | % |
| Non-interest-earning assets | | 66,735 |
| | |
| | |
| | 65,380 |
| | |
| | |
| | 72,898 |
| | |
| | |
|
| Total assets | | $ | 1,020,445 |
| | |
| | |
| | $ | 994,050 |
| | |
| | |
| | $ | 703,424 |
| | |
| | |
|
| | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders’ Equity | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Interest-bearing demand deposits | | $ | 147,102 |
| | $ | 73 |
| | 0.20 | % | | $ | 153,881 |
| | $ | 69 |
| | 0.18 | % | | $ | 114,727 |
| | $ | 45 |
| | 0.16 | % |
| Money market and savings deposits | | 268,307 |
| | 283 |
| | 0.42 | % | | 248,401 |
| | 299 |
| | 0.48 | % | | 169,916 |
| | 176 |
| | 0.41 | % |
| Time deposits | | 312,889 |
| | 709 |
| | 0.90 | % | | 321,244 |
| | 645 |
| | 0.80 | % | | 234,017 |
| | 468 |
| | 0.79 | % |
| Total interest-bearing deposits | | 728,298 |
| | 1,065 |
| | 0.58 | % | | 723,526 |
| | 1,013 |
| | 0.56 | % | | 518,660 |
| | 689 |
| | 0.53 | % |
| Securities sold under agreement to repurchase | | 22,471 |
| | 17 |
| | 0.30 | % | | 19,742 |
| | 15 |
| | 0.30 | % | | 11,095 |
| | 7 |
| | 0.25 | % |
| Federal Home Loan Bank advances and other borrowings | | 11,187 |
| | 17 |
| | 0.60 | % | | 11,287 |
| | 29 |
| | 1.02 | % | | 13,806 |
| | 31 |
| | 0.89 | % |
| Total interest-bearing liabilities | | 761,956 |
| | 1,099 |
| | 0.57 | % | | 754,555 |
| | 1,057 |
| | 0.56 | % | | 543,561 |
| | 727 |
| | 0.53 | % |
| Noninterest-bearing deposits | | 148,178 |
| | |
| | |
| | 132,765 |
| | |
| | |
| | 88,468 |
| | |
| | |
|
| Other liabilities | | 6,194 |
| | |
| | |
| | 4,111 |
| | |
| | |
| | 2,141 |
| | |
| | |
|
| Total liabilities | | 916,328 |
| | |
| | |
| | 891,431 |
| | |
| | |
| | 634,170 |
| | |
| | |
|
| Shareholders’ equity | | 104,117 |
| | |
| | |
| | 102,619 |
| | |
| | |
| | 69,254 |
| | |
| | |
|
| Total liabilities and stockholders’ equity | | $ | 1,020,445 |
| | |
| | |
| | $ | 994,050 |
| | |
| | |
| | $ | 703,424 |
| | |
| | |
|
| | | | | | | | | | | | | | | | | | | |
| Net interest income, taxable equivalent | | |
| | $ | 9,679 |
| | |
| | |
| | $ | 9,626 |
| | |
| | |
| | $ | 6,427 |
| | |
|
| Interest rate spread | | |
| | |
| | 3.91 | % | | |
| | |
| | 4.00 | % | | |
| | |
| | 3.97 | % |
| Tax equivalent net interest margin | | |
| | |
| | 4.03 | % | | |
| | |
| | 4.11 | % | | |
| | |
| | 4.04 | % |
| | | | | | | | | | | | | | | | | | | |
| Percentage of average interest-earning assets to average interest-bearing liabilities | | |
| | |
| | 125.17 | % | | |
| | |
| | 123.08 | % | | |
| | |
| | 116.0 | % |
| Percentage of average equity to average assets | | |
| | |
| | 10.20 | % | | |
| | |
| | 10.32 | % | | |
| | |
| | 9.85 | % |
| * Taxable equivalent basis | | |
| | |
| | |
| | | | | | | | |
| | |
| | |
|
|
| | | | | | | | | | | | | | | | | | | | |
| SmartFinancial, Inc. and Subsidiaries | | | | |
| Condensed Consolidated Financial Information (unaudited) | | | | |
| (In thousands) | | | | |
| | | Three months ending |
| | | September 30, 2016 | | June 30, 2016 | | March 31, 2016 | | December 31, 2015 | | September 30, 2015 |
| Operating Earnings | | |
| | | | | | | | |
| Net income (loss) (GAAP) | | $ | 1,611 |
| | $ | 1,192 |
| | $ | 1,348 |
| | $ | 1,182 |
| | $ | (77 | ) |
| Purchased loan accounting adjustments* | | (450 | ) | | (597 | ) | | (541 | ) | | (818 | ) | | (412 | ) |
| Securities (gains) losses | | (18 | ) | | (98 | ) | | (83 | ) | | — |
| | — |
|
| Merger and conversion costs | | — |
| | 153 |
| | 105 |
| | 230 |
| | 748 |
|
| Foreclosed assets (gains) losses | | (130 | ) | | 4 |
| | (58 | ) | | (332 | ) | | 86 |
|
| Income tax effect of adjustments | | 388 |
| | 250 |
| | 221 |
| | 352 |
| | (161 | ) |
| Net operating earnings (Non-GAAP) | | 1,401 |
| | 904 |
| | 992 |
| | 614 |
| | 184 |
|
| Dividends on preferred stock | | (270 | ) | | (270 | ) | | (212 | ) | | (30 | ) | | (30 | ) |
| Net operating earnings available to common shareholders (Non-GAAP) | | $ | 1,131 |
| | $ | 634 |
| | $ | 780 |
| | $ | 584 |
| | $ | 154 |
|
| Net operating earnings per common share: | | | | | | | | | | |
| Basic | | $ | 0.19 |
| | $ | 0.11 |
| | $ | 0.13 |
| | $ | 0.10 |
| | $ | 0.04 |
|
| Diluted | | 0.19 |
| | 0.10 |
| | 0.13 |
| | 0.10 |
| | 0.04 |
|
| | | | | | | | | | | |
| Operating Efficiency Ratio | | | | | | | | | | |
| Efficiency ratio (GAAP) | | 74.06 | % | | 80.13 | % | | 77.95 | % | | 75.24 | % | | 98.38 | % |
| Adjustment for amortization of intangibles | | (0.99 | )% | | (1.10 | )% | | (1.17 | )% | | (1.16 | )% | | (0.90 | )% |
| Adjustment for taxable equivalent yields | | (0.18 | )% | | (0.16 | )% | | (0.17 | )% | | (0.26 | )% | | (0.02 | )% |
| Adjustment for purchased loan accounting adjustments* | | 5.59 | % | | 7.05 | % | | 6.81 | % | | 10.16 | % | | 6.34 | % |
| Adjustment for securities (gains) losses | | 0.22 | % | | 1.16 | % | | 1.05 | % | | — | % | | — | % |
| Adjustment for merger and conversion costs | | — | % | | (1.81 | )% | | (1.33 | )% | | (2.85 | )% | | (11.51 | )% |
| Adjustment for OREO (gains) losses | | 1.61 | % | | (0.05 | )% | | 0.73 | % | | 4.13 | % | | (1.32 | )% |
| Operating efficiency ratio (Non-GAAP) | | 80.31 | % | | 85.22 | % | | 83.87 | % | | 85.26 | % | | 90.97 | % |
| | | | | | | | | | | |
| Adjusted Allowance for Loan Losses | | | | | | | | | | |
| Allowance for loan losses (GAAP) | | $ | 4,964 |
| | $ | 4,720 |
| | $ | 4,527 |
| | $ | 4,355 |
| | $ | 3,828 |
|
| Net acquisition accounting fair value discounts to loans | | 10,742 |
| | 11,053 |
| | 11,381 |
| | 11,781 |
| | 12,520 |
|
| Adjusted allowance for loan losses (Non-GAAP) | | 15,706 |
| | 15,773 |
| | 15,908 |
| | 16,136 |
| | 16,348 |
|
| Loans (excluding acquisition accounting fair value discounts) | | 813,109 |
| | 789,169 |
| | 752,321 |
| | 739,497 |
| | 722,959 |
|
| Adjusted allowance for loan losses to loans (Non-GAAP) | | 1.93 | % | | 2.00 | % | | 2.11 | % | | 2.18 | % | | 2.26 | % |
| | | | | | | | | | | |
| Tangible Common Equity | | | | | | | | | | |
| Shareholders' equity (GAAP) | | $ | 105,171 |
| | $ | 103,064 |
| | $ | 101,988 |
| | $ | 100,177 |
| | $ | 98,436 |
|
| Less preferred stock & preferred stock paid in capital | | 12,000 |
| | 12,000 |
| | 12,000 |
| | 12,000 |
| | 12,000 |
|
| Less goodwill and other intangible assets | | 6,675 |
| | 6,754 |
| | 6,848 |
| | 6,941 |
| | 7,034 |
|
| Tangible common equity (Non-GAAP) | | $ | 86,496 |
| | $ | 84,310 |
| | $ | 83,140 |
| | $ | 81,236 |
| | $ | 79,402 |
|
*Consists of ASC 310-30 accretion above (below) contractual loan income and ASC 310-20 accretion
