SMARTFINANCIAL INC. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>SMARTFINANCIAL INC. has filed its Q1 2024 10-Q report.</b>

AI Summary

SMARTFINANCIAL INC. (SMBK) filed a Quarterly Report (10-Q) with the SEC on May 9, 2024. SMARTFINANCIAL INC. filed its quarterly report (10-Q) for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's fiscal year ends on December 31st. SMARTFINANCIAL INC. is incorporated in Tennessee (TN). The company's primary SIC code is 6021 (National Commercial Banks).

Why It Matters

For investors and stakeholders tracking SMARTFINANCIAL INC., this filing contains several important signals. This 10-Q filing provides investors with the latest financial performance and operational details for SMARTFINANCIAL INC. for the first quarter of 2024. Understanding the details within this report is crucial for assessing the company's current financial health, strategic direction, and potential risks moving forward.

Risk Assessment

Risk Level: low — SMARTFINANCIAL INC. shows low risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report and does not contain immediate, significant negative news.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand SMARTFINANCIAL INC.'s Q1 2024 performance and outlook.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed Period of Report)
• 2024-05-09 — Filing Date (Filed as of date)
• 2023-01-01 — Q1 2023 Start Date (Reference for comparative period)
• 2023-03-31 — Q1 2023 End Date (Reference for comparative period)

Key Players & Entities

• SMARTFINANCIAL INC. (company) — Filer name
• 2024-03-31 (date) — Conformed period of report
• 2024-05-09 (date) — Filed as of date
• 0001038773 (company) — Central Index Key
• 6021 (industry) — Standard Industrial Classification (National Commercial Banks)
• TN (location) — State of incorporation
• 1231 (date) — Fiscal year end
• CORNERSTONE BANCSHARES INC (company) — Former company name

FAQ

Industry Context

SMARTFINANCIAL INC. operates within the National Commercial Banks industry, a sector characterized by interest rate sensitivity and regulatory oversight.

Regulatory Implications

As a commercial bank, SMARTFINANCIAL INC. is subject to regulations from various financial authorities, including those related to capital requirements, lending practices, and consumer protection.

What Investors Should Do

1. Analyze the balance sheet and income statement for Q1 2024.
2. Review any disclosures regarding changes in accounting standards or policies.
3. Examine management's discussion and analysis for insights into business trends and outlook.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-09: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the first quarterly report for SMARTFINANCIAL INC. in fiscal year 2024, providing updated financial data compared to previous periods.

Key Financial Figures

• $1.00 — ch Registered Common Stock, par value $1.00 SMBK The New York Stock Exchange

Filing Documents

• smbk-20240331x10q.htm (10-Q) — 4927KB
• smbk-20240331xex31d1.htm (EX-31.1) — 8KB
• smbk-20240331xex31d2.htm (EX-31.2) — 8KB
• smbk-20240331xex32d1.htm (EX-32.1) — 4KB
• smbk-20240331xex32d2.htm (EX-32.2) — 4KB
• smbk-20240331x10q001.jpg (GRAPHIC) — 8KB
• 0001558370-24-007644.txt (&nbsp;) — 21903KB
• smbk-20240331.xsd (EX-101.SCH) — 64KB
• smbk-20240331_cal.xml (EX-101.CAL) — 115KB
• smbk-20240331_def.xml (EX-101.DEF) — 400KB
• smbk-20240331_lab.xml (EX-101.LAB) — 731KB
• smbk-20240331_pre.xml (EX-101.PRE) — 644KB
• smbk-20240331x10q_htm.xml (XML) — 6144KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) 3 Consolidated Balance Sheets at March 31, 2024 and December 31, 2023 3 Consolidated Statements of Income for the Three Months Ended March 31, 2024 and 2023 4 Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2024 and 2023 5 Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2024 and 2023 6 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 50 Item 4.

Controls and Procedures

Controls and Procedures 50

– OTHER INFORMATION

PART II – OTHER INFORMATION 51 Item 1.

Legal Proceedings

Legal Proceedings 51 Item 1A.

Risk Factors

Risk Factors 51 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 51 Item 3. Defaults Upon Senior Securities 51 Item 4. Mine Safety Disclosures 52 Item 5. Other Information 52 Item 6. Exhibits 53 2 Table of Contents

–FINANCIAL INFORMATION

PART I –FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS SMARTFINANCIAL, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except for share data) (Unaudited) March 31, December 31, 2024 2023* ASSETS: Cash and due from banks $ 48,329 $ 61,586 Interest-bearing deposits with banks 343,778 233,237 Federal funds sold 85,834 57,448 Total cash and cash equivalents 477,941 352,271 Securities available-for-sale, at fair value 474,347 408,410 Securities held-to-maturity, at amortized cost 180,169 281,236 Other investments 13,718 13,662 Loans held for sale 4,861 4,418 Loans and leases 3,477,555 3,444,462 Less: Allowance for credit losses ( 34,203 ) ( 35,066 ) Loans and leases, net 3,443,352 3,409,396 Premises and equipment, net 92,694 92,963 Other real estate owned 696 517 Goodwill and other intangibles, net 106,537 107,148 Bank owned life insurance 83,957 83,434 Other assets 76,418 75,932 Total assets $ 4,954,690 $ 4,829,387 LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits: Noninterest-bearing demand $ 907,254 $ 898,044 Interest-bearing demand 996,298 1,006,915 Money market and savings 1,952,410 1,812,427 Time deposits 538,159 550,468 Total deposits 4,394,121 4,267,854 Borrowings 9,849 13,078 Subordinated debt 42,120 42,099 Other liabilities 41,804 46,470 Total liabilities 4,487,894 4,369,501 Shareholders' equity: Preferred stock, $ 1 par value; 2,000,000 shares authorized; No shares issued and outstanding — — Common stock, $ 1 par value; 40,000,000 shares authorized; 17,056,704 and 16,988,879 shares issued and outstanding, respectively 17,057 16,989 Additional paid-in capital 296,061 295,699 Retained earnings 181,103 173,105 Accumulated other comprehensive income (loss) ( 27,425 ) ( 25,907 ) Total shareholders' equity 466,796 459,886 Total liabilities and shareholders' equity $ 4,954,6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Presentation of Financial Information Nature of Business: SmartFinancial, Inc. (the "Company," "SmartFinancial," "we," "our" or "us") is a bank holding company whose principal activity is the ownership and management of its wholly owned subsidiary, SmartBank (the "Bank"). The Company provides a variety of financial services to individuals and corporate customers through its offices in East and Middle Tennessee, Alabama, and Florida. The Bank's primary deposit products are noninterest-bearing and interest-bearing demand deposits, savings and money market deposits, and time deposits. Its primary lending products are commercial, residential, and consumer loans. Basis of Presentation and Accounting Estimates: The accounting and financial reporting policies of the Company and its wholly owned subsidiary conform to U.S. generally accepted accounting principles ("GAAP") and reporting guidelines of banking regulatory authorities and regulators. The accompanying interim consolidated financial statements for the Company and its wholly owned subsidiary have not been audited. All material intercompany balances and transactions have been eliminated. In management's opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the valuation of foreclosed assets and deferred taxes, the fair value of financial instruments, goodwill, and the fair value of assets acquired, and liabilities assumed in acquisitions. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods. The accom

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Recently Issued Not Yet Effective Accounting Pronouncements: During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements for the year ended December 31, 2023, as filed in its Annual Report on Form 10-K with the Securities and Exchange Commission ("SEC"). The following is a summary of recent authoritative pronouncements issued but not yet effective that could impact the accounting, reporting, and/or disclosure of financial information by the Company. In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU 2023-07 expands segment disclosure requirements for public entities to require disclosure of significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is accessing ASU 2023-07, and its adoption is not expected to have a significant impact on our Consolidated Financial Statements. In December 2023, FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU 2023-09 requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative thres

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 3. Securities Available-for-Sale Securities ("AFS"), which include any security for which the Company has no immediate plan to sell, but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in other income. Unrealized gains and losses are recorded, net of related income tax effects, in accumulated other comprehensive income (loss). Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the estimated life of the security. Prepayments are anticipated for mortgage-backed and Small Business Administration ("SBA") securities. Premiums on callable securities are amortized to their earliest call date. Held-to-Maturity Securities ("HTM"), which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the security's estimated life. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date. The amortized cost, gross unrealized gains and losses and fair value of securities AFS and HTM are summarized as follows (in thousands) : March 31, 2024 Gross Gross Amortized Unrealized Unrealized Fair Available-for-sale: Cost Gains Losses Value U.S. Treasury $ 84,065 $ — $ ( 8,790 ) $ 75,275 U.S. Government-sponsored enterprises (GSEs) 48,393 725 ( 169 ) 48,949 Municipal securities 18,407 98 ( 487 ) 18,018 Other debt securities 39,321 164 ( 3,546 ) 35,939 Mortgage-backed securities (GSEs) 319,389 699 ( 23,922

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) December 31, 2023 Gross Gross Amortized Unrealized Unrealized Fair Held-to-maturity: Cost Gains Losses Value U.S. Treasury $ 150,066 $ — $ ( 1,482 ) $ 148,584 U.S. Government-sponsored enterprises (GSEs) 49,336 — ( 7,143 ) 42,193 Municipal securities 52,680 — ( 6,178 ) 46,502 Mortgage-backed securities (GSEs) 29,154 — ( 3,895 ) 25,259 Total $ 281,236 $ — $ ( 18,698 ) $ 262,538 At March 31, 2024 and December 31, 2023, securities with a carrying value totaling approximately $ 444.6 million and $ 358.3 million, respectively, were pledged to secure public funds and securities sold under agreements to repurchase. For the three months ended March 31, 2024, and 2023 there were no gross gains or gross losses related to the sale of investment securities. The amortized cost and estimated fair value of securities at March 31, 2024, by contractual maturity for non-mortgage backed securities are shown below (in thousands) . Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2024 Amortized Fair Available-for-sale: Cost Value Due in one year or less $ 1,280 $ 1,274 Due from one year to five years 88,430 79,446 Due from five years to ten years 87,487 84,734 Due after ten years 12,989 12,727 190,186 178,181 Mortgage-backed securities 319,389 296,166 Total $ 509,575 $ 474,347 Held-to-maturity: Due in one year or less $ 50,030 $ 49,802 Due from one year to five years 745 701 Due from five years to ten years 47,201 40,121 Due after ten years 53,509 46,155 151,485 136,779 Mortgage-backed securities 28,684 24,434 Total $ 180,169 $ 161,213 11 Table of Contents SMARTFINANCIAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities AFS and HTM have been in a continuous unrealized loss position (in thousands) : March 31, 2024 Less than 12 Months 12 Months or Greater Total Gross Number Gross Number Gross Number Fair Unrealized of Fair Unrealized of Fair Unrealized of Available-for-sale: Value Losses Securities Value Losses Securities Value Losses Securities U.S. Treasury $ — $ — — $ 75,276 $ ( 8,790 ) 9 $ 75,276 $ ( 8,790 ) 9 U.S. Government-sponsored enterprises (GSEs) 9,906 ( 141 ) 3 6,532 ( 28 ) 5 16,438 ( 169 ) 8 Municipal securities 2,156 ( 11 ) 5 12,565 ( 476 ) 19 14,721 ( 487 ) 24 Other debt securities 2,408 ( 41 ) 2 29,415 ( 3,505 ) 26 31,823 ( 3,546 ) 28 Mortgage-backed securities (GSEs) 63,256 ( 831 ) 21 177,765 ( 23,091 ) 87 241,021 ( 23,922 ) 108 Total $ 77,726 $ ( 1,024 ) 31 $ 301,553 $ ( 35,890 ) 146 $ 379,279 $ ( 36,914 ) 177 March 31, 2024 Less than 12 Months 12 Months or Greater Total Gross Number Gross Number Gross Number Fair Unrealized of Fair Unrealized of Fair Unrealized of Held-to-maturity: Value Losses Securities Value Losses Securities Value Losses Securities U.S. Treasury $ — $ — — $ 49,802 $ ( 227 ) 2 $ 49,802 $ ( 227 ) 2 U.S. Government-sponsored enterprises (GSEs) — — — 41,135 ( 7,897 ) 13 41,135 ( 7,897 ) 13 Municipal securities — — — 45,840 ( 6,582 ) 35 45,840 ( 6,582 ) 35 Mortgage-backed securities (GSEs) — — — 24,434 ( 4,250 ) 5 24,434 ( 4,250 ) 5 Total $ — $ — — $ 161,211 $ ( 18,956 ) 55 $ 161,211 $ ( 18,956 ) 55 December 31, 2023 Less than 12 Months 12

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