Net operating earnings per common share was $0.35 for the quarter

Performance Highlights

• Record high net income of $3.4 million for the quarter, up 108 percent from a year ago.
• ROAA of 0.80 percent, a new record, for the quarter and net operating ROAA of 0.91 percent.
• Organic loan growth of $51 million, over 15 percent annualized during the quarter. 
• Transaction accounts are over 37 percent of total deposits, a new high point for the company.
• Efficiency ratio decreased to 72.66 percent, a new record and down by more than 3 percentage points from a year ago.
• Net interest margin, taxable equivalent, of 4.38 percent which is up 0.31 percent from a year ago.
• Asset quality was outstanding with nonperforming assets to total assets decreasing to just 0.26 percent.

KNOXVILLE, Tenn., April 24, 2018 (GLOBE NEWSWIRE) -- SmartFinancial, Inc. ("SmartFinancial") (NASDAQ:SMBK), announced today net income of $3.4 million in its first quarter of 2018, compared to $1.6 million a year ago.  Diluted net income per common share was $0.30 for first quarter of 2018, compared to $0.19 during the first quarter of 2017.

Billy Carroll, President & CEO, stated:  "We had a great first quarter with a new record high return on average assets and earnings per share.  We achieved these milestones by growing loans at over a 15 percent pace while simultaneously maintaining a very strong net margin.  Demand deposits increased significantly, and while a large portion was conversion related reclassifications, organic demand deposit growth for the quarter was over $25 million.  As an organization we continue to improve on our efficiencies as we capture further economies of scale, even with over half a million in merger related costs.  Our team has done a great job of integrating Capstone, planning for the Tennessee Bancshares acquisition, and growing the core bank."

SmartFinancial's Chairman, Miller Welborn, concluded:  "We are looking forward to completing the acquisition of Tennessee Bancshares in the second quarter.  Our resulting company will have assets approaching $2.0 billion by quarter end, setting us up for the next stage of growth.  The opportunities before the company and in turn for our shareholders have never been greater.  We are well on our way in creating one of the Southeast’s next great community banking franchises."

First Quarter 2018 compared to Fourth Quarter 2017

Net income available to common shareholders totaled $3.4 million in the first quarter of 2018, or $0.30 per diluted share, compared to $38 thousand, or $0.00 per diluted share, in the fourth quarter of 2017, which was negatively impacted by the revaluation and write down of deferred tax assets due to the Tax Cuts and Jobs Act which resulted in a lower federal tax rate for corporations.  Net operating earnings available to common shareholders (Non-GAAP), which excludes securities gains, foreclosed assets gains and losses, and merger and conversion costs, totaled $3.9 million in the first  quarter of 2018 compared to $3.7 million in the previous quarter.

Net interest income to average assets of 3.93 percent for the quarter was down 4.09 percent from the fourth quarter of 2017. Net interest income totaled $16.8 million in the first quarter of 2018 compared to $15.3 million in the fourth quarter of 2017.  Net interest income was negatively impacted approximately $368 thousand due to the two less days in the current period.  Net interest margin, taxable equivalent, decreased from 4.51 percent in the fourth quarter of 2017 to 4.38 percent in the first quarter of 2018 primarily as a result of less income from purchase accounting adjustments on acquired loans and increases on the cost of interest-bearing liabilities.

Provision for loan losses was $689 thousand in the first quarter of 2018, compared to $442 thousand in the fourth quarter of 2017.  The increase in provision for loan losses was due to higher loan growth during the period.  The allowance for loan losses and leases  ("ALLL") was $6.5 million, or 0.47 percent of total loans as of March 31, 2018, compared to $5.9 million, or 0.44 percent of total loans, as of December 31, 2017.

Nonperforming loans as a percentage of total loans was 0.14 percent as of March 31, 2018, which was up slightly from 0.13 percent in the prior quarter.  Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.26 percent as of March 31, 2018, compared to 0.29 percent as of December 31, 2017.  In addition to the allowance there were $16.3 million additional discounts on $492.9 million of purchased loans as of March 31, 2018 compared to $17.9 million on $513.5 million of purchased loans as of December 31, 2017.

Noninterest income to average assets of 0.38 percent for the period was down from 0.42 percent in the fourth quarter of 2017.  Noninterest income totaled $1.6 million in the first quarter of 2018, compared to $1.6 million in the fourth quarter of 2017.  The slight increase in noninterest income was primarily due to higher service charges on deposit accounts.

Noninterest expense to average assets of 3.13 percent for the quarter was down from 3.35 percent in the fourth quarter of 2017.  Noninterest expense totaled $13.4 million in the first quarter of 2018, which was up $843 thousand from the fourth quarter of 2017, primarily due to three months of salaries and employee benefits for associates in Alabama compared to two months in the prior quarter.  Income tax expense was $940 thousand in the first quarter of 2018 compared to $3.9 million in the fourth quarter of 2017, which was elevated by the revaluation and write down of deferred tax assets due to the Tax Cuts and Jobs Act which resulted in a lower federal tax rate for corporations.  The company's effective tax rate decreased to 21.6 percent in the first quarter of 2018 compared to 99.0 percent in the fourth quarter of 2017. 

First Quarter 2018 compared to First Quarter 2017

Net income available to common shareholders totaled $3.4 million in the first quarter of 2018, or $0.30 per diluted share, compared to $1.4 million, or $0.19 per diluted share, in the first quarter of 2017.  Net operating earnings available to common shareholders (Non-GAAP), which excludes securities gains, foreclosed assets gains and losses, and merger and conversion costs, totaled $3.9 million in the first quarter of 2018 compared to $1.5 million in the first quarter of 2017.

Net interest income to average assets of 3.93 percent for the quarter increased from 3.81 percent in the first quarter of 2017 as the average earning asset balances and yields increased compared to the prior year.  Net interest income totaled $16.8 million in the first quarter of 2018 compared to $9.8 million in the first quarter of 2017.  Net interest income was positively impacted compared to the prior year due to increases in loan and securities balances and increases in the yields of the loan and securities portfolios.  Net interest margin, taxable equivalent, increased from 4.07 percent in the first quarter of 2017 to 4.38 percent in the first quarter of 2018 as a result of increases in the yield on earning assets.

Provision for loan losses was $689 thousand in the first quarter of 2018, compared to $12 thousand in the first quarter of 2017. The increase in provision for loan losses was due to faster loan growth during the period. The ALLL was $6.5 million, or 0.47 percent of total loans as of March 31, 2018, compared to $5.2 million, or 0.64 percent of total loans, as of March 31, 2017.

Nonperforming loans as a percentage of total loans was 0.14 percent as of March 31, 2018, which was down from 0.18 percent in the prior year.  Total nonperforming assets (which include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets) as a percentage of total assets was 0.26 percent as of March 31, 2018, compared to 0.36 percent as of March 31, 2017.

Noninterest income to average assets of 0.38 percent for the quarter was down from 0.36 percent in the first quarter of 2017. Noninterest income totaled $1.6 million in the first quarter of 2018, compared to $0.9 million in the first quarter of 2017.  

Noninterest expense to average assets of 3.13 percent for the quarter was down from 3.16 percent in the first quarter of 2017.  Noninterest expense totaled $13.4 million in the first quarter of 2018, compared to $8.2 million in the first quarter of 2017.  The Company's effective tax rate was 21.6 percent in the first quarter of 2018 compared to 37.0 percent in the first quarter of 2017.

Conference Call Information
SmartFinancial plans to issue its earnings release for the first quarter of 2018 on Tuesday, April 24, 2018, and will host a conference call on Wednesday, April 25, at 10:00 a.m. ET.  To access this interactive teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the confirmation number 6173081.  A replay of the conference call will be available through April 25, 2019, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number 10119695.  Conference call materials (earnings release and conference call presentation) will be published on the company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile at 9:00 am ET prior to the morning of the conference call.

About SmartFinancial, Inc.
SmartFinancial, Inc., based in Knoxville, Tennessee, is the bank holding company for SmartBank. SmartBank is a full-service commercial bank founded in 2007, with 22 branches, four loan production offices, spanning East Tennessee, Tuscaloosa and Southwest Alabama, and Florida Panhandle.  Recruiting the best people, delivering exceptional client service, strategic branching and a disciplined approach to lending have contributed to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.

Source
SmartFinancial, Inc.

Investor Contacts
Billy Carroll		Frank Hughes
President & CEO		Executive Vice President, Investor Relations
(865) 868-0613		(423) 385-3009
Media Contact
Kelley Fowler
Senior Vice President, Public Relations & Marketing
(865) 868-0611  kelley.fowler@smartbank.com

Non-GAAP Financial Matters
Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. SmartFinancial management uses several non-GAAP financial measures, including: (i) net operating earnings available to common shareholders; (ii) operating efficiency ratio; and (iii) tangible common equity, in its analysis of the company's performance. Net operating earnings available to common shareholders excludes the following from net income available to common shareholders: securities gains and losses, OREO gain and losses, merger and conversion expenses, effect of the December, 2017 tax law change on deferred tax assets, and the income tax effect of adjustments. The operating efficiency ratio excludes securities gains and losses, adjustment for OREO gains and losses, and merger and conversion costs  from the efficiency ratio.  Tangible common equity excludes total preferred stock, preferred stock paid in capital, goodwill, and other intangible assets.

Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider SmartFinancial's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.

Forward Looking Statements
This release contains forward-looking statements. SmartFinancial cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: the expected revenue synergies and cost savings from the proposed merger with Tennessee Bancshares, Inc. (the “Tennessee Bancshares merger”) and/or the recently completed merger with Capstone Bancshares, Inc. (the “Capstone merger”) may not be fully realized or may take longer than anticipated to be realized; the disruption from either the Tennessee Bancshares merger or the Capstone merger with customers, suppliers or employees or other business partners’ relationships; the risk of successful integration of our business with that of Tennessee Bancshares or Capstone; the amount of costs, fees, expenses, and charges related to Tennessee Bancshares merger; risks of expansion into new geographic or product markets, like the proposed expansion into the Nashville, TN MSA associated with the proposed Tennessee Bancshares merger; changes in management’s plans for the future, prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services and other factors that may be described in our annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.

The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, SmartFinancial assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands except per share data)
		As of and for the three months ending
		March 31, 2018				December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017
Selected Performance Ratios (Annualized)
Return on average assets		0.80		%		0.01		%		0.59		%		0.61		%		0.64		%
Net operating return on average assets (Non-GAAP)		0.91		%		0.99		%		0.63		%		0.61		%		0.44		%
Return on average shareholder equity		6.25		%		0.08		%		4.91		%		4.95		%		5.18		%
Net operating return on average shareholder equity (Non-GAAP)		7.12		%		7.99		%		5.25		%		4.91		%		3.55		%
Net interest income / average assets		3.93		%		4.09		%		3.81		%		3.81		%		3.81		%
Yield on Earning Assets		5.04		%		5.07		%		4.69		%		4.66		%		4.54		%
Yield on earning assets, TE (Non-GAAP)		5.05		%		5.09		%		4.70		%		4.66		%		4.54		%
Cost of interest-bearing liabilities		0.82		%		0.70		%		0.68		%		0.65		%		0.60		%
Net Interest margin		4.37		%		4.51		%		4.16		%		4.14		%		4.07		%
Net interest margin, TE (Non-GAAP)		4.38		%		4.51		%		4.17		%		4.15		%		4.07		%
Noninterest income / average assets		0.38		%		0.42		%		0.43		%		0.47		%		0.36		%
Noninterest expense / average assets		3.13		%		3.35		%		3.34		%		3.29		%		3.16		%
Efficiency ratio		72.66		%		74.26		%		78.67		%		76.77		%		75.79		%
Operating efficiency ratio (Non-GAAP)		67.62		%		60.73		%		76.46		%		78.98		%		81.34		%
Pre-tax pre-provision income / average assets		1.07		%		1.16		%		0.97		%		0.96		%		1.09		%
Per Common Share
Net income, basic		$	0.30			$	—			$	0.20			$	0.20			$	0.19
Net income, diluted		0.30				—				0.20				0.20				0.19
Net operating earnings, basic (Non-GAAP)		0.35				0.35				0.22				0.20				0.15
Net operating earnings, diluted (Non-GAAP)		0.34				0.35				0.22				0.20				0.15
Book value as of		18.60				18.46				16.57				16.39				16.14
Tangible book value (Non-GAAP) as of		14.09				13.90				15.67				15.48				15.34
Common shares outstanding as of		11,234				11,153				8,243				8,219				8,211
Composition Of Loans
Real estate commercial
owner occupied		$	288,666			$	281,297			$	210,489			$	211,469			$	197,032
non-owner occupied		375,028				361,691				237,131				233,707				210,901
Real Estate Commercial, Total		663,694				642,988				447,620				445,176				407,933
Commercial & industrial		256,333				238,087				119,782				105,129				90,649
Real estate construction & development		142,702				135,409				98,212				101,151				115,675
Real estate residential		299,148				293,457				199,704				206,667				186,344
Other loans		12,380				13,317				6,361				7,298				6,938
Total loans		$	1,374,257			$	1,323,258			$	871,679			$	865,421			$	807,539
SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands except per share data)
		As of and for the three months ending
		March 31, 2018				December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017
Asset Quality Data and Ratios
Nonperforming loans		$	1,931			$	1,764			$	1,264			$	1,147			$	1,445
Foreclosed assets		2,665				3,254				2,888				2,369				2,371
Total nonperforming assets		$	4,596			$	5,018			$	4,152			$	3,516			$	3,816
Restructured loans not included in nonperforming loans		$	40			$	41			$	42			$	—			$	301
Net charge-offs (recoveries) to average loans (annualized)		0.02		%		(0.01		)%		(0.02		)%		(0.04		)%		(0.02		)%
Allowance for loan losses to loans		0.47		%		0.44		%		0.62		%		0.64		%		0.64		%
Nonperforming loans to total loans, gross		0.14		%		0.13		%		0.15		%		0.13		%		0.18		%
Nonperforming assets to total assets		0.26		%		0.29		%		0.37		%		0.31		%		0.36		%
Capital Ratios
Tangible equity to tangible assets (Non-GAAP)		9.26		%		9.28		%		11.45		%		11.18		%		12.06		%
Tangible common equity to tangible assets (Non-GAAP)		9.26		%		9.28		%		11.45		%		11.18		%		12.06		%
SmartFinancial, Inc.:		Estimated1
Tier 1 leverage		9.29		%		10.48		%		11.46		%		11.91		%		12.18		%
Common equity Tier 1		10.57		%		10.59		%		13.37		%		13.43		%		14.46		%
Tier 1 capital		10.57		%		10.59		%		13.37		%		13.43		%		14.46		%
Total capital		10.99		%		10.98		%		13.93		%		14.00		%		15.05		%
SmartBank:		Estimated1
Tier 1 leverage		9.57		%		11.26		%		10.57		%		10.98		%		11.17		%
Common equity Tier 1		10.89		%		10.90		%		12.30		%		12.32		%		13.13		%
Tier 1 risk-based capital		10.89		%		10.90		%		12.30		%		12.32		%		13.13		%
Total risk-based capital		11.32		%		11.30		%		12.86		%		12.89		%		13.71		%

¹ Current period capital ratios are estimated as of the date of this earnings release.

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
BALANCE SHEET
		Ending Balances
		March 31, 2018				December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017
Assets
Cash & cash equivalents		$	96,710			$	113,027			$	84,098			$	82,835			$	55,548
Securities available for sale		156,210				151,945				115,535				132,762				137,133
Other investments		7,808				6,431				6,081				6,080				5,628
Total loans		1,374,257				1,323,258				871,679				865,421				807,539
Allowance for loan losses		(6,477		)		(5,860		)		(5,393		)		(5,498		)		(5,152		)
Loans, net		1,367,780				1,317,398				866,286				859,923				802,387
Premises and equipment		44,202				43,000				33,778				33,765				30,802
Foreclosed assets		2,665				3,254				2,888				2,369				2,371
Goodwill and other intangibles		50,660				50,837				7,414				7,492				6,583
Cash surrender value of life insurance		21,797				21,647				11,484				11,392				1,329
Other assets		12,593				13,232				8,258				8,861				9,305
Total assets		$	1,760,425			$	1,720,771			$	1,135,822			$	1,145,479			$	1,051,086
Liabilities
Noninterest demand		$	276,249			$	220,520			$	185,386			$	183,324			$	160,673
Interest-bearing demand		278,965				231,644				156,953				156,150				167,433
Money market and savings		491,243				543,645				306,358				324,014				274,994
Time deposits		453,276				442,774				311,490				318,147				286,600
Total deposits		1,499,733				1,438,583				960,187				981,635				889,700
Repurchase agreements		15,968				24,055				26,542				22,946				23,153
FHLB & other borrowings		30,000				43,600				6,000				—				60
Other liabilities		5,775				8,681				6,505				6,164				5,622
Total liabilities		1,551,476				1,514,919				999,234				1,010,745				918,535
Shareholders' Equity
Preferred stock		—				—				—				—				—
Common stock		11,234				11,152				8,243				8,219				8,211
Additional paid-in capital		174,981				174,009				107,065				106,794				106,703
Retained earnings		25,303				21,889				21,654				19,969				18,320
Accumulated other comprehensive loss		(2,569		)		(1,198		)		(374		)		(248		)		(683		)
Total shareholders' equity		208,949				205,852				136,588				134,734				132,551
Total liabilities & shareholders' equity		$	1,760,425			$	1,720,771			$	1,135,822			$	1,145,479			$	1,051,086

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
INCOME STATEMENT
		Three months ending
		March 31, 2018				December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017
Interest Income
Loans, including fees		$	18,228			$	16,357			$	11,491			$	10,747			$	10,210
Investment securities and interest bearing due froms		1,049				770				740				692				661
Other interest income		101				117				86				78				73
Total interest income		19,378				17,244				12,317				11,517				10,944
Interest Expense
Deposits		2,401				1,806				1,373				1,241				1,098
Repurchase agreements		13				15				15				16				16
FHLB and other borrowings		153				81				5				12				15
Total interest expense		2,567				1,902				1,393				1,268				1,129
Net interest income		16,811				15,342				10,924				10,249				9,815
Provision for loan losses		689				442				30				298				12
Net interest income after provision for loan losses		16,122				14,898				10,894				9,951				9,803
Noninterest income
Service charges on deposit accounts		578				524				294				291				264
Gain on securities		—				—				144				—				—
Gain on sale of loans and other assets		325				366				224				405				281
Other non-interest income		739				691				585				556				402
Total noninterest income		1,642				1,581				1,247				1,252				947
Noninterest expense
Salaries and employee benefits		7,176				6,272				5,035				4,758				4,679
Occupancy expense		1,533				1,217				1,114				963				978
FDIC premiums		102				150				102				61				153
Foreclosed asset expense		189				59				47				12				14
Marketing		185				167				177				129				164
Data Processing		713				583				483				475				333
Professional expenses		898				602				472				473				538
Amortization of other intangibles		188				155				78				61				53
Service contracts		479				426				363				313				296
Merger Expense		498				1,694				303				420				—
Other noninterest expense		1,448				1,242				1,400				1,164				952
Total noninterest expense		13,409				12,566				9,574				8,829				8,160
Earnings before income taxes		4,355				3,913				2,567				2,374				2,589
Income tax expense		940				3,875				882				726				946
Net income		3,415				38				1,685				1,648				1,644
Dividends on preferred stock		—				—				—				—				195
Net income available to common shareholders		$	3,415			$	38			$	1,685			$	1,648			$	1,449
NET INCOME PER COMMON SHARE
Basic		$	0.30			$	—			$	0.20			$	0.20			$	0.19
Diluted		0.30				—				0.20				0.20				0.19
Weighted average common shares outstanding
Basic		11,211				10,552				8,235				8,217				7,525
Diluted		11,324				10,709				8,333				8,326				7,631

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
YIELD ANALYSIS
		Three Months Ended March 31, 2018											Three Months Ended December 31, 2017											Three Months Ended March 31, 2017
		Average								Yield/			Average								Yield/			Average								Yield/
		Balance				Interest 1				Cost1			Balance				Interest 1				Cost1			Balance				Interest 1				Cost1
Assets
Loans		$	1,346,179			$	18,230			5.49	%		$	1,160,599			$	16,362			5.61	%		$	811,522			$	10,220			5.11	%
Investment securities and interest bearing due froms		203,923				1,059				2.11	%		179,768				781				1.73	%		161,392				677				1.70	%
Federal funds and other		8,414				101				4.87	%		9,947				117				4.68	%		6,621				73				4.47	%
Total interest-earning assets		1,558,516				19,390				5.05	%		1,350,314				17,260				5.09	%		979,535				10,970				4.54	%
Non-interest-earning assets		176,646											137,846											66,208
Total assets		$	1,735,162										$	1,488,160										$	1,045,743
Liabilities and Stockholders’ Equity
Interest-bearing demand deposits		$	249,846			$	320			0.52	%		$	195,783			$	213			0.43	%		$	159,255			$	93			0.24	%
Money market and savings deposits		526,093				870				0.67	%		462,674				488				0.42	%		275,576				328				0.48	%
Time deposits		454,660				1,211				1.08	%		398,142				1,106				1.11	%		302,256				677				0.91	%
Total interest-bearing deposits		1,230,599				2,401				0.79	%		1,056,599				1,807				0.68	%		737,087				1,098				0.60	%
Securities sold under agreement to repurchase		16,186				13				0.33	%		20,226				15				0.30	%		18,682				16				0.35	%
Federal Home Loan Bank advances and other borrowings		26,655				153				2.33	%		8,281				81				3.90	%		7,446				15				0.82	%
Total interest-bearing liabilities		1,273,440				2,567				0.82	%		1,085,106				1,903				0.70	%		763,215				1,129				0.60	%
Noninterest-bearing deposits		231,355											203,457											149,305
Other liabilities		8,656											15,302											4,580
Total liabilities		1,513,451											1,303,865											917,100
Shareholders’ equity		221,711											184,295											128,643
Total liabilities and stockholders’ equity		$	1,735,162										$	1,488,160										$	1,045,743
Net interest income, taxable equivalent						$	16,823										$	15,357										$	9,841
Interest rate spread										4.23	%										4.39	%										3.94	%
Tax equivalent net interest margin										4.38	%										4.51	%										4.07	%
Percentage of average interest-earning assets to average interest-bearing liabilities										122.39	%										124.44	%										128.34	%
Percentage of average equity to average assets										12.78	%										12.38	%										12.30	%

¹ Taxable equivalent

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information (unaudited)
(In thousands)
NON-GAAP RECONCILIATIONS		Three months ending
		March 31, 2018				December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017
Net interest income, Taxable Equivalent
Net interest income (GAAP)		$	16,811			$	15,341			$	10,924			$	10,248			$	9,815
Taxable equivalent adjustment		32				16				22				21				21
Net interest income, Taxable Equivalent (Non-GAAP)		$	16,823			$	15,357			$	10,946			$	10,269			$	9,836
Operating Earnings
Net income (loss) (GAAP)		$	3,415			$	38			$	1,685			$	1,648			$	1,644
Securities (gains) losses		—				—				(144		)		—				—
Foreclosed assets losses		146				5				27				—				15
Merger and conversion costs		498				1,694				303				420				—
Revaluation of deferred tax assets due to change in tax law		—				2,482				—				—				—
Income tax effect of adjustments		(168		)		(508		)		(36		)		(3		)		(6		)
Net operating earnings (Non-GAAP)		3,891				3,711				1,835				2,065				1,653
Dividends on preferred stock		—				—				—				—				(195		)
Net operating earnings available to common shareholders (Non-GAAP)		$	3,891			$	3,711			$	1,835			$	2,065			$	1,458
Net operating earnings per common share (Non-GAAP):
Basic		$	0.35			$	0.35			$	0.22			$	0.25			$	0.19
Diluted		0.34				0.35				0.22				0.25				0.19
Operating Efficiency Ratio
Efficiency ratio (GAAP)		72.66		%		74.25		%		78.62		%		76.77		%		75.79		%
Adjustment for taxable equivalent yields		(0.24		)%		—		%		(0.22		)%		(0.22		)%		(0.25		)%
Adjustment for securities gains (losses)		—		%		—		%		1.51		%		—		%		—		%
Adjustment for OREO gains (losses)		(1.09		)%		(0.04		)%		(0.28		)%		—		%		(0.18		)%
Adjustment for merger & conversion costs		(3.71		)%		(13.49		)%		(3.18		)%		(4.76		)%		—		%
Operating efficiency ratio (Non-GAAP)		67.62		%		60.72		%		76.45		%		71.79		%		75.36		%
Loan Discount Data
Allowance for loan losses (GAAP)		$	6,477			$	5,860			$	5,393			$	5,498			$	5,152
Net acquisition accounting fair value discounts to loans		16,323				17,862				8,167				9,086				9,831
Tangible Common Equity
Shareholders' equity (GAAP)		$	208,949			$	205,852			$	136,588			$	134,734			$	132,551
Less goodwill and other intangible assets		50,660				50,837				7,414				7,492				6,583
Tangible common equity (Non-GAAP)		$	158,289			$	155,015			$	129,174			$	127,242			$	125,968

 

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