SmartFinancial's Net Income Jumps 38% on Strong Loan Growth

Ticker: SMBK · Form: 10-Q · Filed: Nov 7, 2025 · CIK: 1038773

Sentiment: bullish

Topics: Regional Banking, Earnings Growth, Loan Growth, Deposit Growth, Net Interest Income, Financial Performance, SEC Filings

Related Tickers: SMBK

TL;DR

**SMBK is crushing it with massive net income and loan growth, making it a solid buy in regional banking.**

AI Summary

SMARTFINANCIAL INC. (SMBK) reported a robust financial performance for the nine months ended September 30, 2025, with net income increasing by 38.3% to $36.644 million, up from $26.500 million in the prior year. This growth was primarily driven by a significant 21.5% increase in net interest income, which reached $121.011 million compared to $99.567 million in 2024. Total assets expanded by 9.6% to $5.785 billion from $5.276 billion at December 31, 2024, largely due to a 8.1% rise in loans and leases, net, to $4.183 billion. The company also saw a substantial increase in total deposits, growing by 7.8% to $5.051 billion. Noninterest income saw a modest increase to $26.133 million, despite a $3.719 million loss on the sale of securities, net, which was offset by a $3.955 million gain on the sale of SBK Insurance. The provision for credit losses increased to $3.618 million from $3.018 million, reflecting loan growth. Diluted earnings per common share rose to $2.17 from $1.57 year-over-year, indicating strong profitability per share.

Why It Matters

This strong performance from SmartFinancial signals a healthy regional banking environment, particularly in the Southeast markets of Tennessee, Alabama, and Florida. For investors, the 38.3% net income growth and 21.5% net interest income increase suggest efficient capital deployment and effective interest rate management, potentially making SMBK an attractive investment in a competitive banking sector. Employees benefit from a growing, profitable company, which can lead to job security and opportunities. Customers could see continued investment in services and competitive offerings as the bank expands its loan and deposit base. The broader market gains confidence from regional banks demonstrating resilience and growth, especially with increased loan activity and deposit inflows.

Risk Assessment

Risk Level: medium — While net income and assets grew significantly, the provision for credit losses increased to $3.618 million for the nine months ended September 30, 2025, up from $3.018 million in the prior year. This indicates a potential rise in credit risk associated with the substantial 8.1% loan growth to $4.183 billion. Additionally, the company recorded a $3.719 million loss on the sale of securities, net, which could signal challenges in managing its investment portfolio in a volatile market.

Analyst Insight

Investors should consider SMBK's strong net income and loan growth as a positive indicator, but closely monitor the rising provision for credit losses and the loss on securities sales. A deeper dive into the quality of the loan portfolio and the bank's interest rate risk management strategies would be prudent before making a significant investment decision.

Financial Highlights

debt To Equity
N/A
revenue
$121,011,000
operating Margin
N/A
total Assets
$5,784,983,000
total Debt
$139,905,000
net Income
$36,644,000
eps
$2.17
gross Margin
N/A
cash Position
$557,127,000
revenue Growth
+21.5%

Revenue Breakdown

SegmentRevenueGrowth
Loans and leases, including fees$183,094,000+17.7%
Taxable Securities$14,499,000-4.0%
Tax-exempt Securities$1,190,000+12.7%
Federal funds sold and other earning assets$11,565,000-12.7%

Key Numbers

Key Players & Entities

FAQ

What were SMARTFINANCIAL INC.'s key financial highlights for the nine months ended September 30, 2025?

SMARTFINANCIAL INC. reported net income of $36.644 million, a 38.3% increase from $26.500 million in the prior year. Net interest income grew by 21.5% to $121.011 million, and total assets expanded by 9.6% to $5.785 billion.

How did SMARTFINANCIAL INC.'s loan portfolio perform in the latest quarter?

Loans and leases, net, increased by 8.1% to $4.183 billion as of September 30, 2025, compared to $3.869 billion at December 31, 2024. This growth contributed significantly to the company's overall asset expansion.

What was the trend in SMARTFINANCIAL INC.'s deposits?

Total deposits for SMARTFINANCIAL INC. increased by 7.8% to $5.051 billion as of September 30, 2025, up from $4.686 billion at December 31, 2024, indicating strong customer acquisition and retention.

Did SMARTFINANCIAL INC. experience any significant noninterest income events?

Yes, SMARTFINANCIAL INC. recorded a $3.955 million gain on the sale of SBK Insurance, which helped offset a $3.719 million loss on the sale of securities, net, for the nine months ended September 30, 2025.

What was SMARTFINANCIAL INC.'s earnings per share for the period?

Diluted earnings per common share for SMARTFINANCIAL INC. increased to $2.17 for the nine months ended September 30, 2025, up from $1.57 in the same period of 2024.

What are the primary risks identified in SMARTFINANCIAL INC.'s 10-Q filing?

The filing indicates an increase in the provision for credit losses to $3.618 million for the nine months ended September 30, 2025, up from $3.018 million in the prior year. This suggests a potential increase in credit risk associated with loan growth.

How has SMARTFINANCIAL INC.'s cash and cash equivalents changed?

Cash and cash equivalents for SMARTFINANCIAL INC. significantly increased to $557.127 million as of September 30, 2025, from $387.570 million at the beginning of the period, reflecting strong cash generation.

What is the impact of the sale of SBK Insurance on SMARTFINANCIAL INC.'s financials?

The sale of SBK Insurance resulted in a $3.955 million gain on sale and a write-off of goodwill amounting to $5.773 million, as disclosed in the noncash investing and financing activities.

What new accounting pronouncements might affect SMARTFINANCIAL INC. in the future?

ASU 2023-09, 'Income Taxes,' effective for fiscal years beginning after December 15, 2024, will require more detailed income tax disclosures. ASU 2024-03, 'Expense Disaggregation Disclosures,' effective for fiscal years beginning after December 15, 2026, will require disaggregated income statement expense disclosures.

What is SMARTFINANCIAL INC.'s strategy for shareholder returns?

SMARTFINANCIAL INC. paid common stock dividends of $0.24 per share for the nine months ended September 30, 2025, totaling $4.088 million, demonstrating a commitment to returning value to shareholders.

Risk Factors

Industry Context

SmartFinancial Inc. operates within the community banking sector, characterized by a focus on local markets and personalized customer service. The industry is highly competitive, with increasing pressure from larger financial institutions and fintech companies. Trends include a growing emphasis on digital banking services, evolving regulatory landscapes, and the ongoing consolidation within the sector.

Regulatory Implications

As a bank holding company, SmartFinancial is subject to stringent regulations from federal and state authorities, including the Federal Reserve and the FDIC. Compliance with capital adequacy ratios, liquidity requirements, and consumer protection laws is paramount. Any changes in these regulations, such as increased capital requirements or new compliance burdens, could impact profitability and operational flexibility.

What Investors Should Do

  1. Monitor loan growth and credit quality trends.
  2. Analyze the impact of interest rate changes on net interest margin.
  3. Evaluate the contribution of noninterest income sources.
  4. Assess the company's capital adequacy and liquidity position.

Key Dates

Glossary

Net Interest Income
The difference between the interest income generated by a bank and the interest it pays out to its depositors and lenders. (A key driver of profitability for banks, showing a significant increase of 21.5% for SMBK.)
Allowance for Credit Losses
An estimate of the amount of uncollectible loans and leases in a company's portfolio. (Indicates the company's assessment of potential loan defaults, which increased to $39.1 million.)
Securities Available-for-Sale (AFS)
Investments in debt or equity securities that are not classified as held-to-maturity or trading securities. Their fair value changes are reported in other comprehensive income. (SMBK holds $511.1 million in AFS securities, with unrealized losses of $17.16 million as of Sept 30, 2025.)
Securities Held-to-Maturity (HTM)
Investments in debt securities that the company has the intent and ability to hold until their maturity date. They are reported at amortized cost. (SMBK holds $123.4 million in HTM securities, with a fair value of $109.8 million as of Sept 30, 2025.)
Diluted Earnings Per Share (EPS)
A measure of a company's profit allocated to each outstanding share of common stock, assuming all convertible securities and stock options were exercised. (Shows a strong increase to $2.17 for SMBK, indicating improved profitability on a per-share basis.)
Noninterest Income
Revenue generated by a bank from sources other than net interest income, such as fees, service charges, and gains on sales of assets. (SMBK's noninterest income saw a modest increase, despite a loss on securities sale, offset by a gain on insurance sale.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, SmartFinancial Inc. (SMBK) demonstrated substantial financial improvement compared to the same period in 2024. Net income surged by 38.3% to $36.644 million, driven by a robust 21.5% increase in net interest income to $121.011 million. Total assets grew by 9.6% to $5.785 billion, with loans and leases, net, up 8.1% and total deposits up 7.8%. Diluted EPS rose significantly from $1.57 to $2.17. The provision for credit losses saw a moderate increase, and while there was a loss on securities sale, a gain on insurance sale helped offset it.

Filing Stats: 4,412 words · 18 min read · ~15 pages · Grade level 16.8 · Accepted 2025-11-07 17:01:23

Key Financial Figures

Filing Documents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) 3 Consolidated Balance Sheets at September 30, 2025, and December 31, 2024 3 Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2025, and 2024 4 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025, and 2024 5 Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2025, and 2024 6 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025, and 2024 7 Condensed 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 43 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 59 Item 4.

Controls and Procedures

Controls and Procedures 59

– OTHER INFORMATION

PART II – OTHER INFORMATION 60 Item 1.

Legal Proceedings

Legal Proceedings 60 Item 1A.

Risk Factors

Risk Factors 60 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 60 Item 3. Defaults Upon Senior Securities 60 Item 4. Mine Safety Disclosures 61 Item 5. Other Information 61 Item 6. Exhibits 61 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) September 30, December 31, 2025 2024* ASSETS: Cash and due from banks $ 60,313 $ 96,508 Interest-bearing deposits with banks 462,766 277,005 Federal funds sold 34,048 14,057 Total cash and cash equivalents 557,127 387,570 Securities available-for-sale, at fair value 511,095 482,328 Securities held-to-maturity (fair value of $ 109.8 million at Sept.30, 2025 and $ 108.1 million at Dec. 31, 2024) 123,364 126,659 Other investments 14,888 14,740 Loans held for sale 9,855 5,996 Loans and leases 4,222,369 3,906,340 Less: Allowance for credit losses ( 39,074 ) ( 37,423 ) Loans and leases, net 4,183,295 3,868,917 Premises and equipment, net 89,250 91,093 Other real estate owned — 179 Goodwill and other intangibles, net 95,807 104,723 Bank owned life insurance 118,610 115,917 Other assets 81,692 77,782 Total assets $ 5,784,983 $ 5,275,904 LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits: Noninterest-bearing demand $ 931,477 $ 965,552 Interest-bearing demand 929,454 836,731 Money market and savings 2,218,313 2,039,560 Time deposits 971,653 844,640 Total deposits 5,050,897 4,686,483 Borrowings 1,301 8,135 Subordinated debt 138,604 39,684 Other liabilities 55,699 50,141 Total liabilities 5,246,501 4,784,443 Commitments and contingent liabilities - see Note 8 — — 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; 17,028,001 and 16,925,672 shares issued and outstanding , respectively 17,028 16,926 Additional paid-in capital 295,742 294,269 Retained earnings 236,380 203,824 Accumulated other comprehensive loss ( 10,

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 follo

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 threshold, among other things. The guidance is effective for us the first annual period beginning after December 15, 2024, with first disclosure additions to be included in the 2025 Annual Report on Form 10K. The Company is assessing ASU 2023-09, and its adoption is not expected to have a significant impact on our Consolidated Financial Statements. In November 2024, FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." , and in January 2025, the FASB issued ASU 2025-01, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date." ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03, as clarified by ASU 2025-01, requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization. Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. ASU 2024-03 is effective for us fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, though early adoption is permitted. The Company is assessing ASU 2024-03, and its adoption is not expected to have a significant impact on our Consolidated Financial Statements. Note 2. Earnings Per Share Basic earnings per common share is computed by dividing net income available to co

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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) : September 30, 2025 Gross Gross Amortized Unrealized Unrealized Fair Available-for-sale: Cost Gains Losses Value U.S. Treasury $ 31,823 $ — $ ( 2,231 ) $ 29,592 U.S. Government-sponsored enterprises (GSEs) 19,446 88 ( 130 ) 19,404 Municipal securities 34,403 316 ( 489 ) 34,230 Other debt securities 25,938 214 ( 1,221 ) 24,931 Mortgage-backed securities (GSEs) 413,054 2,973 ( 13,089 ) 402,938 Total $ 524,664 $ 3,591 $ ( 17,160 ) $ 511,095 September 30, 2025 Gross Gross Amortized Unrealized Unrealized Fair Held-to-maturity: Cost Gains Losses Value U.S. Government-sponsored enterprises (GSEs) $ 47,181 $ — $ ( 5,243 ) $ 41,938 Municipal securities 50,866 — ( 5,575 ) 45,291 Mortgage-backed securities (GSEs) 25,317 — ( 2,795 ) 22,522 Total $ 123,364 $ — $ ( 13,613 ) $ 109,751 December 31, 2024 Gross Gross Amortized Unrealized Unrealized Fair Available-for-sale: Cost Gains Losses Value U.S. Treasury $

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