SmartFinancial, Inc. Q4 FY2025 earnings call

• Tangible book value per share increased to $26.85, with 13% annualized quarter-over-quarter growth and 17% for the year.
• Operating earnings for Q4 were $13.7 million or $0.81 per diluted share, seventh consecutive quarter of positive operating leverage.
• Loans grew 13% annualized and deposits grew 8% annualized. Nonperforming assets were 22 basis points.
• Pre-provision net revenue jumped 44% YoY to $20.9 million in Q4 2025.
• Operating noninterest expenses were $32.5 million, flat to Q3.
• Ron Gorczynski discussed deposit growth: non-broker deposits grew $214 million, interest-bearing deposit costs declined 19 basis points to 2.79%, and $112 million in broker deposits were paid down.
• Net interest margin increased 13 basis points to 3.38% in Q4, driven by reduced funding costs outweighing slight decrease in interest-earning asset yields.
• Planned expansion into Columbus, Georgia market, with plans to ramp up in 2026.

For the fourth quarter, SmartFinancial posted operating earnings of $13.7 million or $0.81 per diluted share, its seventh consecutive quarter of positive operating leverage. Total operating revenue was $53.3 million. Pre-provision net revenue (PPNR) grew from $14.5 million in Q4 2024 to a record $20.9 million in Q4 2025, a 44% year-over-year increase. Loans grew 13% annualized and deposits grew 8% annualized. Tangible book value per share is $26.85, up over 13% quarter-over-quarter and 17% for the year. Operating noninterest expenses were $32.5 million, flat to Q3.

• Projected first quarter 2026 net interest margin in the 3.4% to 3.45% range.
• Anticipates expense range of $34.5 million to $35 million for the year, targeting ~5% overall expense growth YoY.
• Set internal goal to hit a $4 EPS run rate by the end of 2026, aiming for $1 in EPS by Q4 2026.
• Expect first quarter 2026 noninterest income to be ~$7.6 million and noninterest expense in the range of $33.5 million to $34 million.

• Forward-looking statements are subject to risks and uncertainties as actual results could vary materially, as outlined in press releases and SEC filings.
• Credit risk in the small isolated segment of the loan portfolio, though nonperforming assets remained very low at 0.22% of total assets.

Q: Russell Gunther asked about loan growth sustainability in 2026 and recruitment pipelines.

A: Billy Carroll said they target high-single-digit plus growth, and are agnostic to specific markets, looking for bankers fitting the culture. Ron Gorczynski mentioned expecting expense growth within $34.5 million to $35 million range.

Q: Catherine Mealor inquired about NIM expansion and balance sheet size.

A: Ron Gorczynski said Q1 2026 NIM projected 3.4% to 3.45%, and bond book expected to stay around 11%-12% of total assets.

Q: Stephen Moss asked about margin and Columbus hiring.

A: Ron Gorczynski said funding costs expected to decrease ~17-18 basis points in Q1, and Billy Carroll noted Columbus expansion hiring would be balanced with production to avoid material expense impact.

Q: Stephen Scouten asked about other potential markets and EPS goal.

A: Billy Carroll mentioned leaning into markets like Nashville and Birmingham, and said hitting the $4 EPS run rate by end of 2026 is via continuing current execution, staying disciplined on expenses, and organic growth.