SMBK - Earnings call 3 2023 | SmartFinancial, Inc.

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Operator

Hello everyone and welcome to the SmartFinancial Third Quarter 2023 Earnings Release and Conference Call. My name is Seb and I will be the operator for your call today. [Operator Instructions] I will now hand the floor over to Nate Strall to begin, please go ahead.

Nate Strall

Thanks, Seb. Good morning, everyone. joining SmartFinancial's for earnings quarter you call. thank us third for XXXX And

we commentary. slides Chief Rhett on Officer reference that today's Carroll, Officer; begin will During call, and by, followed the Ron Chairman Welborn within also Billy will Gorczynski, Investor the Financial call; smartbank.com. President are the Credit and Officer; Relations Jordan, website section and Chief our our Miller provide will Executive available release press Chief

questions your at end will be answer We to call. our the available of

website. Our and are forward-looking call, to press not may the non-GAAP because will our to statements. available our materially. results to or comments We results These statements forward-looking include in early which the list obligation statements as uncertainties, could financial release subject otherwise, related and new the are except factors any We actual law.During cause materially risks we any that in of might by and our assume the company's update differ information, performance. filings, be vary SEC to reference measures required developments do on

SEC. it You October release Miller the XXXX now filed and presentation our measures the on of Welborn over turn call. And to the open the the earnings appendices to investor with I'll reconciliation may in see of XX, these Chairman

Wesley Welborn

Thanks, Nate.

opportunities. a We've we do to our operate, for strong to year, are that busy but business The steadfast and secret believe we proud I third industry our quarter the improve company. of and poised of has that has It's been SmartBank. for I'm the our as remained activity of very effort a see another this a this incredibly future. for year been has positive our we how challenges not bright made sincerely team every line quarter challenged objectives of mission

we United remains States, to in where are markets strong, be robust. Our fortunate located economy the very and remain the Southeastern

to accomplish for we were very of proud able the are We what quarter.

turn team to With Our clear and our SMBK it over focused, is determined very of to Billy. goals. entire going I'm that,

William Carroll

Great today. with third morning you and Miller, going and good jump morning, everyone. in Thanks, to to this discuss our quarter right be highlights. I'm

most see discussing All all, our today. non-GAAP quarter operating for in I'll steady a X Page company. deck. these of our You'll primarily on of be metrics

will Ron rate impact a As some September income. did on had We $X.X some net in details our came or numbers. GAAP provide $X.XX shortly at bond on that in operating we EPS million on in

annualized. deposits grow of balance at right We X% both increasing loans continue sides the and to with sheet both

nice points, in continuing prior around was Our healthy, right same is of only a flexibility ratio loan-to-deposit number. negligible ratio giving the Credit XX XX%, strong quarter with staying as basis an us on with growth. NPA charge-offs

sale very XXXX, continued year, below be did trade forward focus back deposits, noninterest-bearing key and we floored, income seeing reposition continue some we on securities. for growth net on $XX.XX, AOCI And look delta up position credit good to to I All do with favorable adding what and metrics sheet. forecast, outstanding and And to in see in grind Ron in the large feel balances This, our has for some the quality and while on then numbers. with even The $XXX to positioning.Our moved our early by trade I serve yield from the me but where income balance believe solid. discuss like in but to related with bond will us interest let in a movement cash Rhett along book will flows and slightly and it very I line puts dive from be some to quarter a it.As resets. We north. in primarily we'll ability stabilized. to over higher asset taken comments company credit timing number loan available new the spot a by cash value the margin hand earned driven interest-bearing. close feel including number that covered Our here transaction feel costs late here. assets. were a Rhett? execute operating deeper stated, now well-timed we we higher funding at clients that excluding and loss I heavier to reallocate the help we've did move in $XX.XX our the all, additional move quarter our I'll tangible to to into million with coming the forward-looking a to continues close trade accelerates the and moment, portfolio to to in the a

Rhett Jordan

In at SmartBank's the bank's segments while strong Billy. portfolio in profile annualized the the the X% growth quarter-over-quarter we you, increase average quarter, portfolio stable yield, which Thank growth evenly maintaining diversified X.XX%. portfolio effectively through of recognizing The pace, spread moderate up composition unchanged basis was across a cycle, organic loan performance. across of the to continued of moved point geographies to this continues third loan while and different portfolio. grow a and saw credit a XX

total same we've very in asset change commercial Again, in to same line with XX% a as down our of saw in new for This loans total swing quarter-over-quarter the and grew the and representing capital, held under nonconstruction year steady nonowner-occupied stage CRE about lower projects period year.Our early portfolio completed little of total but in several quarter. expected seeing metrics in little construction while had right period. delinquency CRE in of ratio for the starts moving outstanding quarter prior at results.Also production steady a steady also total slightly XX% ratios were was performance at the balances metrics part with slight construction overall diversified performance NPAs holding of total than an the was and XX% of and balances, loans, below second construction the the last $XX portfolio XXX% capital, quarter-to-quarter. outstanding decline came Our million those credit with classified XXXX

we risk smaller growth loans since our through a quality have is portfolio loss our year some be balances expected total periods, delinquent Approximately is dollar portfolio and has conjunction classified with and are The we in with business carried Loss and address and future of finance clientele.Credit XX% are upcoming adequately capital assets metrics, to credit to subsidiary our in amount steady. within expect our some continue realized as held and slower X.XX% for solid overall allowance total due end very XXXX. solid those leases has in support stability, X.XX% the than year-to-date equipment navigated positioned total and periods. increase total nonrural outstandings period the being to growth any delinquency overall these slight that continue to in While housing ratio moved of more population to continued markets third conditions manageable thus, loan in quarter. and report were losses stable to in small through.Our trucking results activity growth and our economic

factors portfolio minimal was increase slight this continued certain in components CECL certain from period.Overall, did reflect of in The monetized the key that how of [indiscernible] positions. balance our each but from liquidity demand to adjustments loan be in to allowance to changes Ron? various that and culmination changes continues to charge-offs, due these turn the for to total other the loan resulted deposit a X.XX% composition, the the impacts good, stable, model solid X% increase and Our credit input as net provision growth, I'll the recommended period. loans, in quarterly of realized key rates continues to financial performance.Now unfunded call in recommended maintain The discuss resulted during the portfolio such lower and occurred model, provision in factors over Ron metrics unemployment movement of while was commitments, measures.

Ronald Gorczynski

continue On needs market clients build funding by good deposit growth remain expansion a million, gain in and liquidity position. We and Rhett, see presence quarterly which our loan-to-deposit we and new XX%, exceeded our of Slide morning, further $XX X, quarter overall areas. with the of driven we levels our our ratio stable our to bolstering ended as Thanks, deposit everyone.

pricing clients reacted we as and the mix experience and to rate particularly pressure did shift, some upward competitive during quarter the hike months of However, Fed X the first solicitation.

lagging points September. purposes our peers. has Our month buffer X.XX% us total deposit and increases needed strategy pricing rate increased and competitive pressure, to market were XX for costs only relative to adjusting as the basis of Despite for some X.XX% upward rates afforded of

to idle expect do operating maximize Looking rightsize cash. on cost look returns some ahead, accounts migration additional as we clients and

you'll securities just at of maturities provide flow muted to of weighted more sold September. have much have had Reinvested 'XX we addressed. million had year. price-sensitive this income, $XXX X.XX%. an comprised in current back which total that and million, treasuries, average these see end been years. will proceeds most Slide an of $XXX annual On $X.X of equates was a security maturity the X of which primarily a yield at QX schedule approximately interest yields the at occur The U.S. of almost However, as our sale of updated earn average sale which to XX, the cash remainder of our the principal of million weighted X.X additional cash securities The clients sale believe was we reflect pace over

yield securities to enhanced loan of move methodically $XXX X.XX%. ability year-end securities, this trade.As comprised or a both securities assets liquidity our would treasuries positioned proceeds, XXXX current held-to-maturity Slide whether into in in be the XX, with fixed repositioning over securities it us Combined by provides sale of as rate reinvesting on which with rate QX. preferably patient the on in back have with Aside of higher-yielding we of accelerate yield year-end weighted momentum adjustable on of earnings quarter, funding you'll we have or XXXX. the cash affords our Further, from $XXX redeployment we maturing repricing approximately earn the production, maturing benefits, the be by during the million we and loans, million even see average still the additional primarily

cash and basis are knowing significant the XX, the which margin interest earnings While remains future securities, representing Net contraction at remained quarter. was we Slide XX environment assets. point the profitability, XX% on includes on for position X.XX%, is catalyst of challenging, liquidity horizon.Our unchanged overall the total a optimistic interest on rate

was pressures shift negatively quarter. As discussed increased margin our the pricing deposit experienced impacted during earlier, by and mix

experience a slowdown starting move we and velocity are as money QX. in the into we repricing However, movement deposit to of

to returning identify of before QX XX security repositioning of and Slides million to income in originations projecting our range in was combined present ahead average previous These those guidance few yield remain and stable and $XX loan themselves. XXXX.We primarily they commercial and cost proceeds, at million, the our revenue of expect income $XX QX.Lastly, with addition, capitalize stabilization Operating deposit are income plus $XX half enhanced on X.X% saw to In we factors, QX into driven the of we have in the the looking details XX. opportunities $X.X of in second range. new noninterest on by line ongoing run operating million to new X.XX% expenses weighted million production X% noninterest with as to the on at next rate quarters, focus margin

is million. this, Total to of the operating for continue and lack costs delay continue commissions cut was a all better than range. our anticipate we which be control. to efficiency mid-$X incentives be slight expenses diligent at or new from Despite income escalation insurance benefit and health the program.While The expense Looking above an to to internal recognize was abnormal expense additional related and environment to it's noninterest increases we in ahead, of of $XX.X rather on primarily identifying extremely resulting ratio self-insured our production million pressures were expenses. expenditures that while rate XX%, to primarily salary target, function anticipated the opportunities than we

on project we salary and benefit range we -- noninterest grow position with repositioning. primary well-capitalized quarter Slide $XX.X of $XX continue to the ahead minimal loss million XX, in tangible million remain ratios excuse the to book a million.And $XX execute I'll to XX million $XX.X to our to Looking and had capital Billy. in the expenses change it the We quarter, said, associated that fourth off the me, even importantly, on strong, finishing prior turn from to range expenses the in and securities and defend most our back to over mission with value.With

William Carroll

Ron. Thanks,

our with see can trends, we you are As offense. employing positioned well

revenue and rate focusing the increases. we building outlook execute we continuing bullish front. on on as rate see the on clarity diligently My ability remain our I absorbing are the to nice we are in With these fairly back still more is confident after stabilization that pipelines. discussed number on to forecast, loans

same We be to internally are continue we we living and I mid-single-digit same at well. pace, that growing and pace. the growth With the deposits feel need that fund that, can feel as

are and on I and As internal we should control, focus well discussed, our continuing expense be fairly Ron do efficiency contained. believe expense growth

We company grew in investing EPS opportunity the path look long-term clients are momentum prospects book I on a be past, and there done serve forward. with to looking road what days to on an tangible can bank's and these continues tremendous as coming -- continue with to helped there overall, growth quarter, where credit, additions this for by in steam. quarter markets the outstanding us successfully expense chosen I make is footprint. existing those revenues.Miller meeting we've within do see good of do grew set several eye add these we gain continuing number spent We've to market happening our any and are in felt we our up revenue producers and our throughout some of quarters, a we a growth. The our should markets the industry. and Again, as increased value in feel again as deposits, and I down revenue and and offset loans but roundtables changes

our I'm associates very to and company team to well.I'll XXX-plus settle, in and balances our have stop members that it's going huge to coming rates with ability these our culture and this plus continue questions. we shout our appreciated. is in loan close open As it the cash a company. outsized next to phenomenal grow outstanding build reprice out flows a utilize for year, positioned there These greatly up early

Operator

Inc. [Operator from Stephens first comes today Instructions] question Our of Wendler Thomas

Tom Wendler

about the sale $XXX of thinking securities $XXX XQ securities by Just 'XX. maturing million million and the

increased you growth range? see cash mid-single-digit we likely maybe these see, over are balance guys loan that could to With

William Carroll

Thomas, it's really -- possible. it's

whatever I think find we're can positioned we at to grow them. loans pace

doing had I this to think But find the of lot it's of right just in environment. a a ones we've sort success function an that.

continue of, -- out it. books, dig the credits get and to to find there got and We'll the capacity possible. going the forecast continue for we've So I do good and like, forward. grind just to we're to to environment that kind But going mid-single-digit given to us add but it's still

Tom Wendler

just kind NIM that on through these XQ here. you kind of up about repricings then staying thinking How assets are earning with kind staying all floor coming a NII of of moving And forward? of from 'XX,

William Carroll

Yes. difficult this as At margin Thomas, been point, many others. has our to forecast

projecting XX%. higher experience were We prior the we quarter. betas XX% we did quarter, to Increased This from XX% linked from modeled.

move we but point, just effect. stabilized, of projecting our As getting for repricing we're XXXX We is the compression, our that forward, throughout to we're just At going say while. we half. stable some right a results this NIM some say do we we're will minimize to better QX. going going like do and expect see now, get to NIM But for our be to second as we're

Operator

Piper of Scouten comes Stephen question Sandler. next The from

Stephen Scouten

first I'm in I was just repositioning sounded already stated chunk the guess, one mature repositioning securities quarter. kind It the that question on of like just set maybe dynamic. the on securities the curious to a trade. of

I that was that trade. loss kind longer-dated the Or given of content, of short more to of the duration related guess, So portion some actual drove the what of there?

William Carroll

to ahead. want you -- Ron go

Ronald Gorczynski

earlier. I many ability to wanted assets can as as reprice we the think we

So We to and under the our to that their this just the keep the we our naturally. move and and thought key really facilitated these thought back trade. let get recognize pretty on stabilized. But was NIM it and go ahead earnings mature of given to were a on course modeling loss to good part earn the

William Carroll

when add, right move. Yes. Stephen, -- right we And last -- thing around the the we I this around only as I'll were the timed fed when is guess,

where And stay we to felt of to like kind market going given elevated. the was, continue just so were rates

So was was. it like we hindsight, felt in timing good;

a it. just it like to anyway. the was so Yes, to that bulk time going seemed mature early good going And next year do of into

So it really too wasn't for of us too big big -- a wasn't risk anyway.

Stephen Scouten

fact quarter. obviously, ratio, think, XX it's that driven, it's interest content rate I then And efficiency basis to with, the the this of you kind not spoke sure expense-driven, really but point than I ROA know you're I'm really more

clearest can be the move level back you what's more earnings might -- to kind near- medium-term? start to are you what to So the of you like in with comfortable levers the maybe feel pull a to

William Carroll

revenue comes to growth. Yes. back Again, it

always may expense constantly We've As been to side, the I on opportunities is we're had said, be. we're renegotiate But Ron that whatever salary to able and to try some contracts, growth. the refine always looking ours think there's side. And revenue to doing attrition absorb more that.

when what's think the numbers, the income the heavier little line squeeze net look I dependent back we've I historically. impacted a it's bit. not on net go our the interest interest mean last those ROA. -- in margin over mean had you little that I and at we metrics, on were look and really It's income.

the As Growth great thing got solid. there. growing we've discussed, teams And biggest just line that out we've for just -- that some us been back. I has is think comes sales

cards in us. We continue to think that's be going for to the

back was on just up, back on way the continue growth, where a that, think and quarters few I income plus ago. it yield I we'll resets to see drive think net that our you'll that the get with asset to So number interest

Stephen Scouten

now, about you a front, since years those Coast, depends maybe growth I Gulf as the franchise? just you brought those look continue maybe some teams that of wondering, contribute 'XX. it of right to in along to maybe teams back guys in regions, I'm seeing growth back them particular, guess overall on the of kind X of number maybe are then And you on how And

William Carroll

contributors a I'll a years of you tell the we these that's, at think I again, of you. bit today. They've all And when going the inefficiency of back to of look to bank to teams Really, just ago. been that couple the kind franchise. little added growth think, I great our

a added a big -- too. it, us. for was I bite we -- think piece When that's that you of

And contributors new of X-month period, so the delayed many but able balances those some to with to course ramped all just have higher get couldn't those up, were add teams basically great in incrementally lot of outstanding well balances, our some in folks they've rate. really those that of was of growth legacy to our markets. company little been move as X We And profitable all but now, a a grow to able we've organically of markets markets all markets. a as are as those we -- all been bit

I So comments, where as great some positioned. salespeople. my got We've love said we're in I

We are out grinding to every day and thing. this grow continuing

good. but -- sight. of we it it's that that had The little it's expected, So we've and a been bit got delayed has increase rate profitability in

Operator

is from question Jones at next Our Will KBW.

Will Jones

that hold think through have least lot little $XX grind coming just It the about asset just the up hear million here curious, and higher in maybe revenues to that a few you're looking maybe million talked the feels positive might surprised year. you that of I'm into maybe was $XX next some to and opportunity range staying outlook over going repricing the steadily like would to a that reacted revenue is we really momentum quarters. that XXXX. I have NIM kind gain unchanged, at next So stable

Just muted more you connect help dots what's revenue and curious the forecast. maybe if can me driving that

Ronald Gorczynski

I'll Ron. take This and Rhett this is Yes. chime first, could in.

at. we're be upward. from we're what We've fast our not beta For the But said, looking higher coming to as move X% X is our most on deposit from like we're part, the as what neediness experiencing, to I basis, base. modeled

think truly function I it's escalating. our a deposit of So cost

William Carroll

here and, don't thing Will a quarters couple few I think -- you dealing of had here a, guess don't we think I comment where -- think how Yes. about with kind this quarters. know a And that just your we're I going I can we offset about deposit of little stay we this talked because the we a -- grind more with of a growth. as think to probably reset with bit that pressure about you quarter, some kind asset have yield little

stabilize. will So it

is always be just quarter fewer typically a bit First to with days. softer going little

couple So back from up back up that grind. first I we quarters where pretty of we it the next kind see couple -- nicely is these think of see it pretty there. picking -- picks --

Will Jones

about higher realm. that I if XX% forecast quarter, think to end we of kind here, about we in just range. were the betas know talked last deposit Is that maybe maybe But peaking the we the betas XX% to it? deposit in XX% the talking about way X% right

William Carroll

think probably -- say the I yes, but mute asset betas deposit to been at we've minimize I slightly, past. XXs effects our or it'll but this those low point, looking know But a repricing of in going escalate I forward. maximum mid-XXs, some on would will at wrong we're at probably

well in it's does that that our first is all This Fed projected the QX, growth our what quarter forward. we've going predicated the to income first And for time growth in at deposit interest looking on quarter quarter-over-quarter. That's where the outpace is we're seen expense.

Will Jones

loan or that on Is messaging what as picks level. on maybe clean. mean, The the then remarkably will really credit would provision it year kind And past just has provision reserve at for of be goes still the quarters. been comfortable go-forward you the remains just feel credit, with pretty messaging just Or of guys switching be low I handful the up? the to fairly provision? growth she until steady turns And it over X%

William Carroll

term this say I outlook the at you as point probably Yes, she used think best is kind that's the of goes. --

of that impacted as the that's see [indiscernible]. considerable Billy as season weakness good the from credit that term. we move model I we don't it factors said, can with said near the different growth -- really any single-digit a But And slightly think loan we profile, depiction. pretty in

good a that's outlook. think I So

Will Jones

lastly for be then still right -- bank there and hearing And year we this and in excitement active, are was M&A, of real any deal a of give M&A kind you materialize. downstream upstream perspective both cusp on the the seeing fairly could on bit refresher activity earlier a chatter you But the of just stand just partners. us that from me, on we're might where maybe conversations of on and

Wesley Welborn

Will, the we to a is along the can the X the and we've I downstream. get yes, don't quarters bigger or get MOEs. any a you and couple done couple escalation. of that and deals of clarity. color what real smaller there don't only meetings. maybe X those yes, give upstream and you'll couple continuing you there those clarity way, of I you love But probably last lot relationships I the know know same But bit a out and until deals on in of be of getting Fed conversations Bill rest as announced some that a that and seem see, and enjoy see we're credit the until We team like little and looks of conversations

really all I about So that's --

Nate Strall

I'll ** Yes. add, And Miller.

a are And options strategically and feel to very looking at where do think I the sitting down to your valuations obviously, it more a alluded what in little the industry us of Just their of of to look kind advantageously that I as what with banks they kind about stand-alone, a makes environment go? but good know and But acquisition our at point, Miller it suppressed to, I also, and we're are challenging lot front. opportunities. of kind M&A, going want on

And but so is the explore kind sitting on we and continue of principle kind we'll positioned see it, we're optionality what day. to of our if something in like really where

William Carroll

We and a getting sense [indiscernible]. really think makes and love Yes, the what them focused run shareholder love shareholder the just well these model focusing on are totally that. we to letting on focus. it's And Nate most back I for models. He's

Operator

from Davidson. Kevin Our next question D.A. comes at Fitzsimmons

Kevin Fitzsimmons

to the wanted Just up margin. on follow

I sounds kind had few your but a So going level, stabilizing. of DDA grind is stabilizing be to it And higher in the saying your give at beginning comments, believe, gives of some to words, the that back you slowing? might for like number you alluded what main you're quarter of to you And quarters Ron, to anything can and cost to you And those it's at continue of a -- to use Can and -- out front? a the have confidence it's deposits remix. headwinds said high what going next the the on you so slowing, been like of of are headwinds the September. kind go gave those you us bit coming course going of

Ronald Gorczynski

Yes.

and modeling had repricing our QX, balance And a noninterest-bearing we think I that think September, see less lot of go. going stabilized. wise, we're to beta a has good less slowed much conversationally down said, We -- deposit happen. a we starting seeing pretty we We're escalated as I saw, shift pretty mix we're as on.

there. in think funds excessive had I QX

assisted it. with that So

I can balances. we our think noninterest-bearing forward, maintain we think going

creep and little I what that and would October. of in investments for trade offset see as But beginning a our at as numbers mean, bit. hearing just simple think of this seeing the it's our side this it less we'll we're the really, time. some the again, chatter a deposit of in on I noise point lot of

Kevin Fitzsimmons

over banks and growth. hanging you us really on with clarity in on some of economies limiting economy. only feeling that are customers has is -- at and and definitely customers, don't. or parts you're months? just just be fortress the for whether bullish how until you're you continue for other looking Maybe tailwinds, local the we to your Bill, that, mean incrementally more Southeast a what say if not got growth just looking just focus the know balance And curious can sentiment flavor dealing I better the how last like? X of give just you we loan same the new are the sheet talking get more loan I'm about existing country where on I and customers But

William Carroll

think, feel growth. onboard are added these I I The to about increases of and will talk to -- have ones look Kevin, we and to the headwinds some impacts. of we there. lot of still continue when mean rate I years. couple fairly over a we've newer pretty clients, have as us, bullish go Yes. Obviously, a again, back economy again, both good, I these, still outlook the of of there But team lot out the course said, on a the last lot for a these that new numbers loan where

onboarding clients new that are to we're around for business. been So not years. They've

them have team for instances Our some members decades. banked in

so of tenure yes, that with our confidence think long members and a continue that track I lot go to have, some team in have give these record And we the to add. clients us

-- positioned. we're think of I environment, the The to we're cautiously where good kind that the I Obviously, like that's clients kind terms. but we is. about. of a really add, optimistic continuing It's challenging it feel where

about And the the floor want that we that. It's we to So on doing ability gas feel to half good board, our keep not to but it's our pretty keep way on down. pedal foot extent.

Kevin Fitzsimmons

would guys to get do you this maybe stock capital trading entertain and have not stepping would And But your into before one to want like with outlined securities buybacks? with might priority higher ratios it capital the those loss quarter outlook, where do. know that? levels question. do your I current last you with Or you've you and is, the #X that been

William Carroll

going share it Yes. to We to we're as some expect price. where It's comment, that on to make sheet depending we've ton in powder, got continue the balance to the prior stays definitely markets, we -- those watch in the But Kevin, numbers. sure alluded an capital not don't a you stay. option

with the what's I watch aspects a we if in more if move, that we'll kind the of can gets a economy we'll watching of Obviously, I like we today, right on and to price feel think it. it's the we stock with think do growth conjunction So that's to, But feel that. point need going we balance that. like

Operator

Our Raymond of from Steve next question James. comes Moss

Stephen Moss

costs deposit here. on just Maybe

what it, -- of guys September? but apologize was month missed it I I do you for Just the if have

Ronald Gorczynski

the Yes, in new X.XX% was deposit range. production

New for? is you're deposit what were? looking what production looking you for deposit Are costs that the

Stephen Moss

September. month of for costs Deposit Yes. the

Ronald Gorczynski

total was the the month Our portfolio. X.XX% costs September for for of deposit

Stephen Moss

pipeline terms in on following just the loan then And up on the of here.

Just kind to just to given where absolute mix of also here the portfolio forward, the rates. less construction maybe curious, going and starting is towards the just more wondering given here And are continue go rates? shift move-in we does lower with C&I

William Carroll

I'm Rhett that let couple. -- then a I'll add me to and going And some Stephen, take Yes. first, let anecdotes,

Rhett Jordan

segment, trigger on has has component specific calling about the Stephen C&I times C&I your and case. regard I that having talked That's say But few there of teams, while. would back a back we've with what to pipeline. in is point. borrowers to our little to C&I ahead That's from expansion the projects, occupied would some with we a in indeed certainly what and delayed to, bigger owner to a sneak guess, pool that say beginning client Construction our pull a projects in begin portfolio. here And We're re-lease, have pipeline are the to much base. certainly they're may larger our a seeing the they see on. broader also I mostly begun go newer much correlates become but market I that come

moved lot the So [indiscernible] of moved, and that's focus more that rates what's driving a was before that C&I. even

William Carroll

hit Rhett Stephen. yes, it, But

we'll is, really see a at sponsors feel to good that. positions. seeing about we look continue the that opportunities. that we and guaranteed it think like, CRE few I We'll We're

But we'll C&I definitely bit those. little a based. focus at the is more so yes, look to And continue

Stephen Moss

in the And of XX last in terms in rates the thing just here, move other maybe just the so. especially month or last the bps

up Just kind you even coming are borrower curious, now moved are renewal, stress? debt loans looking a in have of higher? increase how seeing those rates projections Or service as are for that

William Carroll

into Rhett let don't to a you Yes. to I -- we've stress. of I I'm in. want lot think that seen not jump -- going dive one? don't But

Rhett Jordan

point significant originated, repricing. adequate absorb it's the service cash that the causing expected to very from generate have entire down for in with projects rate but perhaps moving to able at that the the and that the rates and and to nothing information good borrowers. of the when increases looking challenges repricings we are certainly, ability it pace borrower to current did at upcoming been some and were time being We've feel the occur. the just at these instances, our really was still And where on flow We coverages year our they maturities projects kind about portfolio's they forward-looking at

the as allowing projects some market We some that's side revenue have that of seen for in well. moves those

the -- So the for pretty feel CRE that. ability about still it to portfolio absorb we is optimistic

Operator

The Scott. Strickland Janney next comes Montgomery question from from Feddie

Feddie Strickland

it there. think change the growth there or hires XX% that from Just we if some of me cause back was of into sort to given XXXX, would Or that guide. fourth Correct rate, wrong the significant to on to of But new offset expense more it XX.X% just said anything wanted I the think being modest is for less, Ron, is level? you quarter. I'm go a cost comments over a steady time? Bill's as

Ronald Gorczynski

going increase in that, for the that's of XXXX. done salaries. a probably But small majority Feddie. cycle. modeling, not in to be initiatives expected. with wage going be looking to We XXXX way. X% to it's X% the It's increase would our have what we're be that The that's Exactly we're but most along Again, part, probably at do for -- normal normal

Feddie Strickland

should you to is that trying still liability of are just a asset and terms general, in was, back upcoming asset borrowings of we I'm maturities do securities. pay growth expect securities? And loans with earning the Or overall all -- terms all put these of on potentially get asset some new what and both and side? then in sense there for my are in growth maturities, these the loans just whether into down other What trajectory continue to question earning of the

William Carroll

to loan expected on growth, again, we production. our depending Feddie, Yes, put it to our loan

have borrowings any down. pay don't we Fortunately, to

go wind in pricing that. prudent invest more go forward. an which more cash to we excessive along deposit the is or we have if either mode, are we be rates some as So options we our We'll securities, do in as in it -- favorable go getting up to would

Operator

[Operator Instructions] further have call. on the We no questions

to back Miller Welborn for turn will I remarks. closing So

Wesley Welborn

to Seb, each Thanks, thanks you and of for again joining us today.

us great As always, you questions. each a additional of please And you reach of any feel to to out have have any week. directly I if hope free

Ronald Gorczynski

Thanks.

Rhett Jordan

Goodbye.

Operator

conference call. joining. for today's you very much concludes Thank This

your disconnect now may You lines.

SmartFinancial (SMBK) 24 Oct 232023 Q3 Earnings call transcript