SMBK - Earnings call transcript Q4 2024

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Operator

Hello, everyone, and welcome to the SmartFinancial Fourth Quarter 2024 Earnings Release and Conference Call. My name is Ezra, and I will be your coordinator today. [Operator Instructions] I will now hand you over to Nate Strall, Director of Investor Relations, to begin. Please go ahead.

Nathan Strall

Good morning, everyone, and thank you for joining us for SmartFinancial's Fourth Quarter 2024 Earnings Conference Call.

will in slides on our smartbank.com. we that press our call, available are Investor today's reference and the release website, During Relations section Carroll, Officer, who will provide some Executive by Billy Gorczynski, will and commentary. call Ronald Financial our followed Officer, Chief our additional President our begin Chief

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

vary Our and the uncertainties, to risks comments and include forward-looking results statements. materially. could These statements are subject actual

press release We website. differ except our new list otherwise, any as or these materially which any filings, of cause that We update early statements forward-looking law. assume our in to results and may are factors might not obligation on be SEC to developments by information, because our in available do required

reference to we measures financial call, the performance. the related During will company's non-GAAP

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

William Carroll

to After and Rhett, open to some over Ron greater Thanks, be myself you available detail. and through Miller hand with up commentary in in today everyone. with some I'll and our today open you, it Great your SMBK. for with to Nate, numbers joining us thank our we'll for comments, Nate, and prepared call walk it Ron, morning, and for good interest Q&A.

So let's jump right in.

or few anticipated. is us as the gain operating X I'm to first income highlights, referring pages a and proud $X.XX excited wrapping quarter I nice been execute we've the us really as million the up and We in what our really to very messaging. Pages be share. $X.X performing, diluted for operating through into be deck, the way nice X. GAAP for I'll quarter team to leverage continue of net A we've on per our Jumping year of the posted we watch

the share, $XX.XX X% of of and excluding increase value the the quarter-over-quarter, continue movement. opinion, most to to important book metrics, my over our the $XX.XX impact. in per one impacts tangible including That's annualized up and First, of moving that we excluding AOCI AOCI company,

you'll increase right continue Looking at on to X, deliver graph we the the shares. value on for lower Page see our the

growth Our balance sheet of in last was the outstanding year. quarter the

and On new we year-over-year outstanding the our a loan are side, a at teams annualized grew XX.X% QX for XX% pace market at to grew continuing as add relationships.

temporary On quarter-over-quarter at number sheet, still the That impressive side the the approximately funding out, that that year. equally came late in was XX%. includes growth. balance short-term growth some of annualized on were deposit core even deposit growth we noninterest-bearing at with annualized XX% taking But near in

will provide more that in Ron a detail moment. on

XX always to with Our see numbers in is anticipated. net basis Credit focus just we dropping strong and at NPAs. continue of for credit low to interest a expand exceptionally metric history million as in Total proud $XX.X revenue our to these levels. as came at company, income the continued had continues points I'm

quarter. $XX in Noninterest increased to quarter just over at compensation income good of just expenses -- million. to incentive nice slightly also We robust related over prior year. second relates were that noninterest of had another the from portion growth the half up delta A to the

we as expense hold can our we growth very look into feel XXXX. to I reasonable levels

to continue thoughtful by in As driven we focus and expense operating end. revenue expansion quarters, leverage on growth on previous the discussed investment solid

year. Throughout momentum the accelerate expansion, and operating X, we continued PPNR trend coming and highlight see you'll trend margin the growth we on our driven the to to would continue saw like move Page X to XXXX, expect lines direction. upward One charts in a chart. right Looking at throughout I by this is

it's additional gross of the me. book year, pleased loan couple grew On growth, for side, approximately with again, our regard In We've about our while balanced our all a done the XX.X% high-level across year-over-year. to very cuts. and we company throughout are loan loan this year good regions. just we the comments of seeing sales momentum our for The increasing $XXX results. the extremely in So million, portfolio is yields rate despite

X.XX% the total Our end we of fees. X.XX% at continue to and the yield without was year including at hold fees,

impressive. little just of some ago, this a the year, outstanding. moment bit trading in has rate We I true growth very core higher public mentioned a shown deposit we've been but has As growth been out remixed funds,

ratio year is which to loan-to-deposit for is at flexibility gives us. continued leverage us our a the XX% has base. little deposit throughout position a nice spot year-end, now strong and Our increased at This

Our pipelines in holding XXXX. continue solid. on to over we our that guidance we next single of to past look to business development still mid- I'm as at though few quarters, loan feel even bettered digits growth high the

to pace that there over to Ron I'm growth expect also dive can him it some fund we stop into organically. hand details. that let I going to and deposit to

from it here, take Ron, So please.

Ronald Gorczynski

morning, I'll results. highlighting and good by Billy, start everyone. Thanks, deposit some key

we As strong funded quarter, loan through Billy a growth fully production. our very mentioned, deposit had

annualized which interest-bearing of portfolio During points quarter, deposit the loan portfolio loan-to-deposit will to X.XX%, decreased includes deposits average Total attributable XX ratio around was weighted to experienced The the expansion Net margin relatively expanded factors, nonbrokered percentage consistent transitory totals, weighted we slight interest XX%. for deposit $XXX for this a portfolio resulting our a new of of X in [ year-end costs cost million, production deposits. to basis, increase deposits deposit noninterest-bearing The basis quarter-over-quarter basis . With with XX% noninterest-bearing X.XX%. average month growth favorable on efforts, stabilize X.XX%. nearly X.XX% that to of resulting XX basis XX% ] repositioning increasing forward. and fees. a yield and and in nonbrokered in prior composition to the XX% This moving anticipate of X.XX% several total including of in points an quarter's total points some we our yield is remained increasing on originations, X.XX% a December. loan deposit were increase

grew income of by or in assets. XX% growth interest $XXX interest-earning $X.X annualized million Net million supported

Looking although rate factors throughout margin this continue to rate amortization maturities production at and costs a deposit new the progress of ahead, associated fixed loans. anticipate reduction the further deposit higher expanding due of to driving a cuts Federal lower-yielding primary the at in we decreased and observed costs to our XXXX, rate loan with few anticipate pace slower new Reserve We adjustable slower of The our production. probability in than and the margin past quarters. expansion,

range. As we and the first quarter anticipate of XXXX current factors a result these in to market X.XX% margin X.X% conditions, a

increased and contributed at allowance loans. noninterest for and basis. $XXX,XXX basis by insurance asset expectations. basis and on Our basis strong respectively. totaled quarterly the nonperforming steady points Overall, driven income $X.X million, growth. bank's an exceeding mortgage amounted credit primarily with performance total average of higher provision to to the loan losses points from for Net credit annualized at charge-offs Operating points XX This expense banking quality was from for losses remaining which quarter commissions were revenue $X.X X $XXX,XXX, loans loans to remains XX loans total the million,

million, in services guidance the during this incentive decreased above $XX.X to investment revenue, volume quarter. strong QX primarily However, experienced expenses due partially commissions our to performance. accruals higher was of decrease were third offset Operating performance-based and due $XXX,XXX slightly by a quarter from

in repossessed loan-related the equipment liquidation increased writing Additionally, our equipment of down increase other expenses, some real expedite the to estate from finance division and process.

on forecasting with are million expenses range income first Looking the in will and expense in and we benefit range performance. our $X fluctuate $XX ahead $XX to million $XX.X range to of the to high of the million salary compensation incentive-based $XX.X in accruals million, for mid- noninterest as quarter, to the noninterest million based

management continue on controlling focus centered on cost expenses. We to efforts

Additionally, at rate, with the a loans that tax manage anticipated our and certain tax final create corporate investment establishment real our is I'll estate conclude performance stabilize the some XX% rate monitor were variable of elevated structure. real the slightly we to capital. to tax subsidiary more range. previously but estate trust effective and adjustments reported to There that of

quarter, while $X.X lending opportunities, capital in the decreased XX to Overall, which consolidated remained XX.X%. company's basis Total ratios. to equity. fourth decrease a maximizing risk-based believe we ratio high-return comprehensive remain the in leveraged growth TCE slightly million our well optimally capital Coupled X.X%. levels capital with standards well-capitalized During turn continue allocated significant points on income, returns support our above we to accumulated at capital balanced other to our regulatory

to that said, Billy. I'll back it over turn With

William Carroll

been We've recently. your XXXX, investors accomplished drawing value Ron. on with to lot I of Page we've a X to again, road and stakeholders company, And made our Thanks, reminding the the of we've deck. what proposition want attention back investments the our and in reiterate, our

have the put seeing the targets. on in together profitability a us team line markets our return and some sight are most in We're to a a is direction. country of arguably franchise great We the in building that and moving great inflection of attractive clear

themes the in company our offices now on are new opinion, in market of years and opened years. flagship and time growing XXXX in and sync share a needed Southeast's of going the one focus rolling be markets XXXX have brightest We've been changes profitability we've And our it's Key markets generating tremendous. leverage teams Auburn targets. little us for to stories. in But operating similar The we the said to added those Birmingham, my formed a with recent over last with up to hitting are couple quickly. and Montgomery

of and investments be in platform. should during talent-related measured this company The expense banking year in majority methodical growth our coming the primarily

who and adding the look talent outstanding team, XX our believe align bankers. region's regional team pipeline be to of new currently. and companies for I several our continue sales some continuously revenue-producing we added have culture. We're We to will we associates to members choice bankers company one XXXX, hire in of great In with our

to standpoint, to this associate year. were Work an honored certified become Great a Place From we

you top being This we've workplace for deck addition X As a in this see, in to as our can regional recognized consecutive quarter. noted it years. is

So I we're love where sitting. summarize, to

rate executing, growing rate significant our see are tailwinds set operating occur fixed portfolio. We we gaining our in expanding, can and with and leverage. further coming Margin resets revenue to loan line is

proud appreciate team build here the the SMBK. I at seeing very and our we're energy have sales to client to our continue great company be franchise. is great a a and SmartBank Credit SmartFinancial, great solid, year growth profitable efforts I'm as of on of work work going very had the attractive and that a associates. a with outstanding. quarter new XXX of we Also that and we continues for

stop So questions. up there. going for it I'm to We'll open

Operator

first question Our Will Jones Instructions] with [Operator from comes KBW.

William Jones

on you loan see stable a fairly of start to what assume you're able that factor that in contributing maybe help yields that could of wanted us was as loan quarter fixed feat -- yields. I able achieve So have. just you as some to recently to kind [ the some handful just that mean light I further of Ron, we've hoping you're of got. repricing growth rate stability tailwinds well maybe this it's quarter-over-quarter. I'm the a I impressive hold reconcile ] cuts of quarter-over-quarter, how

early in Just XXXX. maybe us through that how together to the trend piece of where see loan expect we that the help could quarter? transpired yield And maybe half

Ronald Gorczynski

a that's great question. Yes,

still yields, loan X% for production originations. north of Our our is

we opportunities. the During quarter, see did also

points kind which at of of still of a lending line of a We credits accounted both for good unfunded prepayments, our have the higher not loan basis only margin. on seen rate. X lot draws Also, but opportunities, received from traction loan we've excess

and we a to two. So at for the this point, but trending lower we it move down quarter block forward XXXX, consistent, bit at or will these first to as tackle into keep see we managed least little

William Jones

but can new me Right. was you where of quarter? production fourth it, remind I in know just you loan said the

Ronald Gorczynski

X.XX%.

William Jones

mid- you, high to pace. And Perfect. on maybe, that single-digit there's Bill, great Okay. maintaining hear to for a it's low-growth at still optimism

[ dynamics concentrations year? years build a expect you And industry whole. you have ] coming about up as also growth you how possibly whether touch maybe could the dynamics maybe then competitive change of be the if CRE competitive guys maybe fairly that in factor on on the could to for how view changed limiting curious or Just your some a and next maybe feels how talk the as you

William Carroll

always been -- kind have that Well, a guided question. been said, from and high good mid- we Yes. we've single yes, for I we've We've to standpoint, Yes, we that of of And well. some again, their last half that. to where quarters. digits, it growth the of frankly, which build of like we some didn't as few able a to is I the beat lot just in the And year. projections get is paydown think second assumptions in quite

pay if at think right. along you I pay some normal I look off think production, So we're still down happenings with about and

is competitive The still side it there, is.

I really good we at where the I economic good economic got really climates, you've operate, you've think regions look when you got mean, environments.

there is we're the nationally regions operating good stayed well. least in bullish little we're doing know about and But elevated think probably think to at where we business, is. ability a I as rates it Rates while -- feel compete. have our still a ceiling bit, I I where

-- grow balance feel of very be companies it that. yes, is like to -- other we're they know continue their year. like to going think a I feel But about interesting sheet. a It's an we us lot optimistic I can

I've nice, are we your to very kind of may little really some will as starting over a and core CRE good CRE on give some cylinders to We let that color of on last question, to quarter and to teams, the a To be as we're a nice limiter. little think it him sales the really opportunities a had a position bit over hit Rett mentioned, on had opportunities really we bit I all don't pick as relationship bullish Our well, of this company. most are throw that emphasis. big up just

that maybe just charts from... majority the shown. balanced little the bit probably what let dive is But and coming a of talk we're a and you and just seeing where about a maybe I'd But of production have little still we're fairly Rhett, little bit CRE production I deeper bit that's about think the into piece our to growth as kind just on side, love mix that the the seeing

Rhett Jordan

real really of quarter, just of CRE start owner-occupied at degree quote can swing in about ] with composition significance I look call percent X-to-X [ you any you this mix in -- estate, that look imbalances, of the if came mean see this Again, Yes, on C&I mix, XX% production particular did at chart a you quarter's XX-plus category. long category. in XX of not you family. look to Page a at it any was

but consistent. across Billy's and So It's good geographically. point, a spectrum the we diversification has we're CRE very of opportunities entire seeing standpoint. production continue to good been in see types that space, consistent to It's consistent opportunities with the loan from been been the portfolio

opportunities is So is in we that a And at see while continuing going it's to our of -- we it are we continue think pipeline. piece as the CRE a to look production. our just segment, trend normalized

Wesley Welborn

] was like as just really within spread markets fact to limiting And emphasize I'd our geographically all the out well. it how Again, factor [ .

Operator

Our Stephens next Bank. Gunther from question with comes Russell

Unknown Analyst

filling just I'm Lawrence. for Nick is in Russel. This

What you target? guys for specific revenue confidence million XQ 'XX. in So achieving million off, talk want are target factors the to about start $XX $XXX your that I to revenue giving

William Carroll

you there QX of million to the When growth you a you just bit I'll from the end of maybe what look little really lines, trend. thought maybe continue kind right when we've get over at QX. I do a from then the just deposit the there, on just last it's And at loan growth macro we expense a continuation get to about few you a on how towards that revenue of that at had math those kind and kind of more talk kind quarters, of Yes. more right and there. mean look to of a plan $XX hold when a get standpoint, Ron looking let that -- the Really, little we're hot,

and to get we confident these hit ROE to the revenue we've hit and So quarterly very, But equate ROA, the rate good we then that -- be. and XX% assess ability when year near-term goal, still the our to of end run these half out meetings, we'll $XX feel on respectively. And that's the a ability at that. return very second on by can very said feel goal targets. should sit to we're our next we kind needs ROE our line, million what near-term and towards that calls of If on X%, that down about the

So Ron, got if we any on I don't know how plan this... you've to additional achieve color

Ronald Gorczynski

growth. You handled most of loan the it's high organic by points. deposit growth funded Really,

fast, pretty our repricing, remarks, do not opening a in period margin our mentioned I is have time. we and repricing in larger as expansion will this XXXX. We throughout powerful expect of prepared loan my balance Those sheet, really as are but through together

Unknown Analyst

And exposure sale and XXXX. including specifically in any question. million more And Could in Plaza great. going Nashville, just color maybe, the you guys that of expectations into it's general how discount holding on X office That's your provided? in $XX and then the you Okay. maybe loan discuss recent up Phillips XX% and

William Carroll

deal, [ go I'll don't a Yes, and a -- high We color maybe really be the to do some pretty let But ], we honest. Rhett, don't do give lot details office. of little bit. good I'll into

our about there. we that an feel feel core We nice with which obviously, opportunity took had we the to that haven't opportunity we grow zone client that good client information the exposure. we with office to that, obviously, from really and do traditionally, in filings, relationship took, about But really very, national that very public excited good a

I don't got issues. that that, I And think don't personally has think really, when at indication you Nashville look Nashville, an that's

those some type different that going but buildings to bit -- a want of concern. think of as on of give structure see been comps look it's see But little you're deeper, reset -- that, borrowers but a details term some a a few space a our types those in bit at on There's I reset some little in you of personally. real pre-COVID. buildings. it some you like of view to dive of of don't a It But may of I might transactions, a those more still with office kind -- just were lower maybe back like I our one-offs, peer much obviously, you when and bit done little of kind think deals those and

Brett Rabatin

I little whole, been of portfolio. as has I -- Yes. declined the has was in year is from it the as in bit of very steady, a office gone I mean just the and think, perspective it's a actually a exposure actually, mean, in granular. what fairly it The amortization transaction

I think to us me mean, our The point, loan liquidate sort price transaction if Billy's I the a and at purchase have that. There needed mentioned attractive purchase of million, $X.X I of of was the for that and I mean I did a valuation, memory, -- the there about saw our lack for fact -- for the you Nashville, were believe borrower to some just it extremely low. I the when with that smaller but of mean, filing, price you they deal. this as is purchase buyer the I correctly. that little correct. that the in that's to define office we picked extremely better portion right discount, average of was financed previous a segment that was the mean an in I remember that of there extremely up size in would front I certainly components asset south it price reason unique compared obviously, seller that don't a unicorn. bit statistic of word, associated

to keep some then in for amount -- component dollar there you mentioned So additional and that tenants. filing draw the is mind, that

closing. amount the not that we at is that So funded dollar

our And [indiscernible] in borrowers that property recourse So is position we good. extremely have exposure local with

Operator

next from Steve Raymond with Moss Our question is James.

Stephen Moss

a just for expense of Nice Billy, a expenses, growth -- pace reasonable quarter here. you XXXX. maybe pace And maybe just mentioned starting -- with kind

to thinking are maybe of -- mid- given you you just kind upper Just the trends thinking of mid-single about having? are some digits, guys

William Carroll

some level Ron expense high just I'll maybe or guidance. let and I'll go Ron -- percentage -- And give Yes. you

have done we've For you we the -- most at -- job. our when part, look a nice really

office. team of some -- by even a on seen in keep though we happen. quarter-over-quarter we You've markets little members you X in kind had expense do bringing you're growth But there's mind, But the with these offices new there. flagship had that growth time bit needed, of that, as we 'XX temporary

that's a So when look of going our QX pretty kind at run good proxy you feel our rate, forward. we

in. But stable. a we can Ron dive with based half hold the second are can compensation we whole, really, think particulars, incentive on Now on some little there relatively mean, production. I continue to that heavier

just don't growth some you, into But maybe you give can you if why percentage thoughts Moving would, XXXX. Ron, us on guidelines.

Ronald Gorczynski

it, and looking XXXX taking at X% Steve, Yes, to in annualizing a rate growth fourth quarter we're expenses. X.X%

As franchise and or indicated, a of IT-related the in processing majority increases the Bill it's growth considerably. extent, upgrades. not of to benefits year-over-year and a has grown salary our lesser had be Most because will category it data

stable. pretty So

to go think in forward forecast. XXXX's go measuring stick it's good a by as I you

Stephen Moss

Appreciate And really and maybe some back on production? a little here, see a of Okay. the of quarter. But in just given from terms there of going And curious, you just was seasonally I forward good a then could Great. first pull just forward it loan curious, kind of a hear any guys obviously, bit that to we quarter? color. drawdowns pull And was commitments. softer unfunded I'm tempering maybe growth of all

William Carroll

Yes.

here, starting we're still as pipeline is pipeline Our pretty the year our good.

that that ability kind or guidance, close So that had couple deals bullish we the some would Rhett, got the have year. we on had We anticipated, still your be of did that deals end 'XX QX to I minus. accelerated of to point, we're believe. had deals anticipated to Yes, plus we our a at hit of

the little So of second bit a in that on tailwind there right we growth half of a got December.

of So that a was piece it.

project don't annualized this quarter. doing us I yes, XX% So again

from reasonable there. more bit little I number down but a we'll have think a

Operator

with Sandler. comes Scouten next Piper question Our Stephen from

Stephen Scouten

XX.X% maybe of tremendous there of following a XX% were sustainable, people not last was growth. any when in year up a comment but just being lot deliver the to on necessarily year for maybe your struggling

what guess would earlier. a or versus similar I'm current XX% lead any put up on And to there, helpful. trends, pipelines to anecdotal, even would that single wondering the I number high to if be is you you or So color able XX% what a spoke be like it's maybe

William Carroll

Rhett, Yes. is and ask to in, pipeline The chime you good, I'll too.

credit we pipelines like seen. take our that to underwriting calling really of sales some with good robustness you've markets. solid their it I look the is I had big it's impact at As that's prospecting efforts good and the time I in got what I've quarters our several mean a -- foundational accountability -- of lot at teams growth C&I do kind what's pretty the really just look a process. and And our on of really solid. think we've do of and a a spent and is lot really huge right now, mean alluded last it's I over business.

Our are on our the just and of sales great now. our really such leadership balance a growth the division, sheet both loan president guiding groups job, doing deposit or side are regional

guidance right could the at. little on think obviously, the bit. going we continue we're mean, we're So to now, to need feel up looking getting that making I return deals But to we we're movers targets to sure continue focus we a that -- that boost make that. on right that additional some hires can continue opportunities be could -- I needle do have I

of And so that's for profitable not strong coming with sake just growth, growth but the good relationships. growth

some kind time But don't And any want antidotal know commentary you And so feel that. about on to add got other Rhett, of I if we're to pipeline it. you've that pretty going spend any again, bullish --

Rhett Jordan

we prospects, Billy, for the year, on respective as diversified very geographically. new in across think pursuing year, we No, XXX with basic part at their the the in has key A But been, look very banking you I his would hires mean, it [ the as footprints. just had the and production touched pointed producers clients. course talked new about, to portfolio we opportunities over and I is tackling of and also existing brought and out you lot that ] of several the me, of commentary, say, of in I Billy strong blocking have it.

And we new did those from see relationship good production hires. some really

So original to what we a the that of well guidance. value-add our as produce has year did been over a in little this bit ability

Wesley Welborn

And bank, it I not the entire culture speaks but the think the bank. production entire of side, to just the

I think against in will outclose, of outhustle them put our anywhere team and outwork, associates our bank whole and market. any up I'll

Stephen Scouten

pipeline. think a about there. kind bit question follow-up the out you kind around Billy, that few balance color the the think you to a do good run like year, you a around you there profitability be guess, of leads to I And of more How do course. push/pull profitability that up. through? I If opportunism 'XX How said the dynamic? in versus I Great there's hired XX producers, you've there? said look their this kind talent know, But like pull letting hired that 'XX, to continue of investments to made you where continue move that

William Carroll

That's said it's you a the talk we it's And great word, about internally. lot something question. a -- we I and balanced. mean

we to targets. do I to profitability think and we're hit we're really focused will it. said going the that. do We're going to We want hit we near-term

to doing going anything way not that. we're a stand So let of us

we're the that's right in sales so get want the that to make appropriately, investing we're we here. I talent adding that A ]. time, platform one [ But the sure they same think when at And

hit I going that is we're to to these sure after making these think the getting So up do a offices it with. we're online. that said under balance, trying we truly we work Stephen, and it's we it umbrella of profitability something metrics all But

metrics. down both, it's road, comes So do it. But be selective. make balance I key can continued hit the folks that's keeping think it this find evaluate be from something when a we'll growth to the way the obviously, them our think year, standpoint, can few I if that unique, we sure to we and we that hiring going did we'll And new just we

Wesley Welborn

too. lot We add bank. gosh, I'll you're asked an oh, get a about, acquisitive Stephen,

have a to this What's lot not watch best the deals and next? not ought these M&A I'm are. You just advantage with just perform to wait through and years. grown disruption. through so some of to continuing year about next? acquisitions take come And We be that might fruition executing market our other back What's of on talk sit where we sure some and and strategy

Stephen Scouten

on opportunities just think, Good Delivery I sure. year. higher NIM execution spending expectations. Curious yes, you thing the sure. throughout for of me. kind point. Yes, last gives I the for And the on a issues said covers and then you Ron, know lot of maybe for

that that Just of wondering that at I rate about X if don't versus, or on from potential or the all how if trend line kind expectations cuts cuts based X behind know, we changes about no environment. rate perspective, get you a think

Ronald Gorczynski

repricing and a XX as previous Yes. to deck. amortizations reinvestment from question, for as large cash a A well our pieces our been that. loan refer -- of mentioning we've lot the and lot flows we good Page as portfolio of on principal back portfolio driver, our to is investment -- of of calls pieces A of

have of going going see backside our a basis We full pieces repositioning. we're off. to cost run Additionally, our production side, to QX, loan a positive our our [indiscernible] a still XXX forward we approach at we They're deposits spread. still will the did this lot are of We're I a benefit a production to existing moving exceeding keeping some cuts, from there. scenario some be position, starting brokered. benefit -- yields, And the I benefit And portfolio yields rate think realized Our XXX, for on deposit new savings is -- could flat and this quarter again, there Again, on year. what that think neutral puzzle here. to for a rate of point

Stephen Scouten

quarter Yes, a congrats sure. color. That's helpful and a guys for great on And great XXXX.

Operator

comes with question [Operator Scott. Instructions] Montgomery Marinac Christopher Our next from Janney

Christopher Marinac

earnings you I think Is as I about of from kind well seen. wanted as that that to on liquidity. from . We've shapes up. quarters how another this loan as opportunity been deposits continue back year the to scare. circle the moving progress we've curious that just several to

William Carroll

to strong and pay I Ron move. with nice. if our sitting and today, Yes. let Yes. I'll at think of to -- coverage where metrics, has that ratio stay overall we look got has some and nice When -- you we look it's start relatively I still able room kind out still I and liquidity mean, need ratio -- yes, I our -- mean which our been XX% position is then Chris, we still been in. think we're we at chime ability to. loan-to-deposit to

those And so it's of growing areas, the that's deposit -- day. something key talk side, the core know the every balance focus. one our of of the deposit is lot I that our about something DDAs that's probably is in side sheet a we

And so there. positioned I like where we're

liquidity continue on you position add else organically. the I to Ron, kind mean, going? see kind to and anything of growth. to where But can you think want fund that we grow of But I

Ronald Gorczynski

managed XX% really last our liquidity and for got quarter, utilized We've up XX%. to securities. around position Yes. XX%, -- full cash. We're we now cash down approaching We

$XXX plus comfortable think could We We cash. access very to liquidity I do have we're So liquidity far strong. million and I very at. think But as goes, is as we're of lever our cash. with where

We with both sheet of funding balance access to to have our sides cash. our and grow ability

Christopher Marinac

Great. had now. And just related follow-up many, quarters question to many then credit We've a quality.

X these been and/or curious, I of for know X balance. a just return where losses delicate through. more I'm to get points had I just charge-offs. revenue more tolerance a that's basis below if years think it's slightly sort there's we've

you through of that. think just how kind curious So

William Carroll

focus we've credit. short answer not. The a probably such on is It's -- had

for bank, line when executed couple component. think That's you I we our look as got We equipment Fountain business that's a our think really piece. nice I like of of at a kind Chris, well us, you really, finance years ago. know, of really it since bought that we've

the credit. it we're that that's But grow kind level that really book, we probably risk, to more our with good a with continue of We sector. general comfortable into the looking to -- really to book, a and little little to book we business able we with a at look ability continue . We've grow solid where feel overall really got team return. get loan take to in more it's bit you when think like there, our want that I bit of 'XX. really,

risk take not in to the bank probably portfolio risk just tolerance our So in on too much today

Operator

Thank back you Miller more questions. very for I any will over much. closing to There now are no remarks. hand

Wesley Welborn

support much. Have Thanks today. all good exciting an you of look and for very your forward XXXX. us a Appreciate joining SmartBank, we day. all to Thank you

Operator

call. that much, very everyone speakers us. conference joined you you joined have has all today appreciate who Miller, the Thank We thank to the and

You may now disconnect your lines.

SmartFinancial (SMBK) 22 Jan 252024 Q4 Earnings call transcript