SMARTFINANCIAL INC. (SMBK)·Q1 2025 Earnings Summary

Executive Summary

• SmartFinancial delivered a stronger Q1 2025: diluted EPS $0.67 (+18% QoQ, +22% YoY) on total revenue of $46.8M; NIM dipped 3 bps to 3.21% as liquidity rose with 10% annualized deposit growth .
• EPS materially beat Wall Street consensus from S&P Global by ~$0.12; revenue was essentially in line/slight miss versus consensus, reflecting definitional differences and modest NIM compression; management guided to sequential NIM expansion and tighter expense control through 2025 [values from S&P Global]* .
• Balance sheet growth was healthy: net organic loan growth $86M (9% annualized) and deposits +$122M (10% annualized), with loan-to-deposit ratio at 83% and asset quality solid (NPAs/Assets 0.19%, net charge-offs 0.01% annualized) .
• Guidance raised on noninterest income and lowered effective tax rate; margin outlook improved to ~3.25% in Q2, reinforcing the path to a ~$50M quarterly revenue run-rate by Q4 2025, a catalyst for re-rating if delivered .
• Near-term stock narrative catalysts: sustained NIM expansion, continued organic deposit gathering at attractive costs, stable credit (including equipment finance), and potential buybacks with ~$1.5M remaining under authorization (opportunistic) .

What Went Well and What Went Wrong

What Went Well

• Earnings leverage: EPS $0.67 with operating revenue $46.8M and flat noninterest expenses at $32.3M, demonstrating operating discipline amid growth .
• Core growth with attractive pricing: 9% annualized loan growth; new originations at 7.29% yield while deposit costs declined (total deposit cost 2.37%, interest-bearing deposits 2.92%) .
• Management confidence and strategic execution: “We are successfully moving into the leveraging phase of growth… focus on continued EPS growth and return targets,” and talent additions (5 revenue producers in Private Banking/Treasury) .

What Went Wrong

• NIM compression: tax-equivalent NIM fell 3 bps QoQ to 3.21% due to lower earning asset yields and elevated liquidity; loan portfolio yield slipped 7 bps to 5.97% FTE .
• Fee headwinds: noninterest income down $433K QoQ to $8.6M, driven by lower insurance commissions, interchange, and “other,” partially offset by investment services .
• Mix shift in deposits: decline in noninterest-bearing deposits ($81.3M) partly offset by increases in money market, time deposits, and brokered, which can pressure funding costs if not managed .

Financial Results

Headline P&L and Margins (Oldest → Newest)

vs. Wall Street Consensus (S&P Global) – Quarterly

Values retrieved from S&P Global.*

Segment Breakdown – Loans and Leases ($USD Millions)

KPIs and Credit

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are successfully moving into the leveraging phase of growth… we expect the rest of 2025 to have a similar look as we focus on continued growth in our EPS line and hitting our near-term revenue and return targets.” — CEO Billy Carroll .
• “Looking ahead, we anticipate 2 to 3 basis points of margin expansion quarterly throughout 2025… forecasting a second quarter 2025 margin in the 3.25% range.” — CFO Ron Gorczynski .
• “Our markets remain resilient… our capital base and balance sheet are well positioned and our asset quality remains solid with non-performing assets to total assets at only 0.19%.” — CEO Billy Carroll (press release) .
• “Operating expenses were $32.3 million, unchanged from the previous quarter… Noninterest income growth and expense containment continue to be primary objectives.” — CFO Ron Gorczynski .

Q&A Highlights

• Macro and tariffs: Client outreach indicates stable orders and manageable pricing pass-throughs; minimal expected impact near term .
• Balance sheet leverage: Comfortable raising loan-to-deposit above 83% prudently; ~$150M cash can be deployed; maintain structure/return discipline .
• Loan/deposit pricing: New loans ~7%; CDs/money market ~3.50%–3.60%; net new still accretive to NIM .
• Buybacks: ~$1.5M remaining under authorization; historically prefer closer to book before repurchasing .
• Growth cadence and expenses: Maintain mid-to-high single-digit loan growth; expense growth targeted ~2.5–3% annualized, with talent investments prioritized .

Estimates Context

• Q1 2025: EPS $0.67 beat vs S&P consensus ~$0.55; revenue ~$46.84M near/in-line vs S&P consensus ~$46.23M, with slight definitional variance versus “operating revenue” [values from S&P Global]*.
• Q2 2025 and Q3 2025: S&P consensus implies continued revenue growth (~$48.48M and $51.06M) and EPS accretion ($0.64 and ~$0.72), aligned with management’s NIM expansion outlook [values from S&P Global]*.
• Target price and recommendation context: S&P consensus target ~$39.96; recommendation text not available in pulled dataset [values from S&P Global].
  Values retrieved from S&P Global.

Key Takeaways for Investors

• Earnings momentum supported by disciplined growth and expense containment; sequential NIM expansion guidance is a near-term positive catalyst .
• Funding remains a strength: strong organic deposits (10% annualized) and declining funding costs underpin margin resilience even with elevated liquidity .
• Credit quality is a differentiator (NPAs/Assets 0.19%, net charge-offs 0.01%), with equipment finance portfolio performance improving and heightened selectivity in trucking exposures .
• Q2 setup: modest NIM expansion, noninterest income raised to low–mid $8M, expense range $32.5–$33M, tax rate lowered to 18–19%; supports EPS growth trajectory .
• 2025 narrative: On track for ~$50M quarterly revenue run-rate by Q4 2025; beats/misses versus consensus likely driven by NIM execution and fee durability, particularly insurance/mortgage/capital markets .
• Capital deployment optionality: TBVPS compounding continues; buybacks remain an option with ~$1.5M authorization but management is valuation-sensitive .
• Trading implications: Watch quarterly NIM prints and deposit mix; strong execution on guidance should drive estimate revisions upward and support multiple expansion given improving ROATCE .

Notes: 
- All document-based figures include precise citations per cell.
- S&P Global consensus figures are marked with * and may reflect different revenue definitions than company “operating revenue”.