UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of earliest event reported: April 27, 2016

 

SMARTFINANCIAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Tennessee   333-203449   62-1173944
(State or Other Jurisdiction of Incorporation)   (Commission File Number)   (IRS Employer Identification No.)

 

5401 Kingston Pike, Suite 600    
Knoxville, Tennessee   37919
(Address of Principal Executive Offices)   (Zip Code)

  

(865) 437-5700

(Registrant’s telephone number, including area code )

 

 

(Former Name or Former Address, if Changed Since Last Report) 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

  

Item 2.02 Results of Operations and Financial Condition.

 

On April 27, 2016, SmartFinancial, Inc. issued a press release reporting earnings results for its first quarter ending March 31, 2016. The press release is attached as Exhibit 99.1 to this Form 8-K and is furnished to, but not filed with, the Commission.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

99.1 Press Release issued by SmartFinancial, Inc. dated April 27, 2016.

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SMARTFINANCIAL, INC.
   
Date: April 27, 2016  
  /s/ William Y. Carroll, Jr.
  William Y. Carroll, Jr.
  President & Chief Executive Officer

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
     
99.1   Press Release dated April 27, 2016

 

 

 

Exhibit 99.1

 

 

1Q 2016

 

 

   

SmartFinancial Reports First Quarter Results

 

KNOXVILLE, TN - April 27, 2016 - SmartFinancial, Inc. ("SmartFinancial"; NASDAQ: SMBK), announced today net income of $1.3 million in its first quarter, compared to $1.2 million in the prior quarter. In the third quarter 2015, SmartFinancial successfully completed the merger of two holding companies, legacy SmartFinancial, Inc. and Cornerstone Bancshares, Inc., and carried forward the name "SmartFinancial, Inc.". This quarter completes a second full quarter’s results from the combined company; in addition, SmartBank and Cornerstone Community Bank completed their merger at the end of February.

 

Billy Carroll, President & CEO stated: "We are pleased with these results as our newly combined company continues to build momentum and realize greater efficiencies. It’s powerful to move past internally focused merger work and set the stage for growth. Our organic loan and deposit growth kept good pace during the first quarter, even with a number of our team members involved in the bank integration. We’re on plan and expect continued merger efficiencies in the coming months. We’ll remain focused on fundamentals and strengthening our foundation to support organic growth and increased earnings.”

 

Carroll also noted, “We secured a talented mortgage team in 2015 which has allowed us to expand our mortgage capabilities franchise-wide. We are beginning to close loans with these new products, using this new channel. We have significant opportunity to serve more clients with even better solutions across our entire footprint while driving greater margins in residential lending. To leverage these capabilities, we continue to identify and recruit revenue producers for residential and other areas of the bank in every market we serve.”

 

SmartFinancial's Chairman Miller Welborn concluded: "This board could not be more enthusiastic about the brand, the vision and the talent of this team. We have a strong story to tell and have every confidence that we’ll achieve the ‘sweet spot’ for community banking which will include being a best place to work, a great place to bank and especially rewarding for our shareholders. "

 

Performance Highlights  

 

• Net income available to common shareholders totaled $1.1 million or $0.20 per share during the first quarter of 2016.
• Annualized return on average assets equaled 0.54 percent in the first quarter of 2016, up from 0.47 percent in the fourth quarter of 2015.
• Annualized net loan growth was approximately 6.4 percent in the first quarter of 2016, with the growth coming from increases in owner occupied commercial real estate, residential real estate, and construction and development loans.
• Gain on sale of assets increased to $222 thousand as results from the mortgage unit accelerated even in spite of what is a normally weak quarter due to seasonality.
• Maintained outstanding asset quality with just 0.82 percent of nonperforming assets to total assets.

 

 

 

 

 

 

 

1Q 2016 compared to 4Q 2015

 

Net operating earnings available to common shareholders, which excludes purchased loans accounting adjustments, securities gains, merger and conversion costs, and foreclosed assets gains and losses, totaled $780 thousand in the first quarter of 2016 compared to $584 thousand in the fourth quarter of 2015. Net income available to common shareholders totaled $1.1 million in the first quarter of 2016, or $0.19 per diluted share, compared to $1.2 million, or $0.19 per diluted share, in the fourth quarter of 2015.

 

Net interest income to average assets of 3.67 percent for the quarter was down from 3.79 percent in the fourth quarter of 2015. Net interest income totaled $9.1 million in the first quarter of 2016 compared to $9.5 million in the fourth quarter of 2015. Net interest income was negatively impacted during the quarter primarily by a reduction in purchased loan accounting adjustments. One fewer day and slightly lower yields on loan balances had a marginal impact. Net interest margin, taxable equivalent, decreased from 4.10 percent in the fourth quarter of 2015 to 4.00 percent in the first quarter of 2016 due to lower yields for the reasons mentioned above.

 

Provision for loan losses was $138 thousand in the first quarter of 2016 compared to $567 thousand in the fourth quarter of 2015. The decrease in provision for loan losses was primarily due a reduction in historical loss rates used in the Company's ALLL model due to improvement in charge-off levels. Annualized net charge-offs were (0.02) percent of average loans in the first quarter of 2016 compared to 0.02 percent of average loans in the fourth quarter of 2015.

 

The ALLL was $4.5 million, or 0.61 percent of total loans as of March 31, 2016 compared to $4.4 million, or 0.60 percent of total loans, as of December 31, 2015. Adjusted ALLL, which includes the ALLL as well as net acquisition accounting fair value adjustments for acquired loans, was 2.11 percent of total loans as of March 31, 2016, which was down from 2.18 percent as of December 31, 2015. The reduction in adjusted ALLL resulted from continued accretion of fair value discounts.

 

Nonperforming loans as a percentage of total loans was 0.43 percent as of March 31, 2016, which was up slightly from 0.38 percent as of December 31, 2015. 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 0.82 percent as of March 31, 2016 compared to 0.79 percent as of December 31, 2015.

 

Non-interest income to average assets of 0.43 percent for the quarter was down from 0.46 percent in the fourth quarter of 2015. Non-interest income totaled $1.1 million in the first quarter of 2016, compared to $1.2 million in the fourth quarter of 2015. Merger related reclassification drove a $101 decline in service charges and fees and a $72 thousand increase in other non-interest income. Gain on securities totaled $83 thousand. Gain on sale of loans and other assets which includes both SBA and mortgage loan income was $222 thousand, compared to $86 thousand in the fourth quarter of 2015. Gains on the sale of foreclosed assets were $58 thousand for the quarter.

 

 

 

 

 

 

 

Non-interest expense to average assets of 3.19 percent for the quarter was down slightly from 3.20 percent in the fourth quarter of 2015. Non-interest expense totaled $8.0 million in the first quarter of 2016, which was down $100 thousand from the fourth quarter of 2015. Salaries and employee benefits increased by $287 thousand in the first quarter mainly due to additions to the mortgage staff and annual performance based salary increases. Occupancy expense of $990 thousand was up $80 thousand from the previous quarter. Data processing and professional expenses fell a combined $473 thousand compared to the fourth quarter primarily due to a reduction in merger related costs. Marketing expenses of $173 thousand were up from $100 thousand in the fourth quarter primarily due to rebranding initiatives related to merger integration.

 

Income tax expense was $764 thousand in the first quarter of 2016 compared to $901 thousand in the fourth quarter of 2015. The Company's effective tax rate was 36.2 percent in the first quarter of 2015 compared to 43.2 percent in the fourth quarter of 2015. The fourth quarter 2015 effective tax rate was negatively impacted by merger costs which were non-deductible.

 

1Q 2016 compared to 1Q 2015

 

Net operating earnings available to common shareholders, which excludes purchased loans accounting adjustments, securities gains, merger and conversion costs, and foreclosed assets gains and losses, totaled $780 thousand in the first quarter of 2016 compared to $41 thousand in the first quarter of 2015. Net income available to common shareholders totaled $1.1 million in the first quarter of 2016, or $0.19 per diluted share, compared to $308 thousand, or $0.09 per diluted share, in the first quarter of 2015. The Company's operations and financial performance were significantly impacted in nearly every respect by the merger of SmartFinancial, Inc. and Cornerstone Bancshares, Inc. on August 31, 2015. Therefore, financial results in 1Q 2016 are not comparable to results reported for 1Q 2015.

 

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 twelve branches, two loan production offices, and one mortgage production office located in East Tennessee, the Florida Panhandle, and North Georgia. Recruiting the best people, delivering exceptional client service, strategic branching and a conservative and disciplined approach to lending have all given rise to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartbank.com.

 

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: 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 Reports 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.

 

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 non-GAAP financial measures, including: (i) net operating earnings available to common shareholders; (ii) operating efficiency ratio; (iii) adjusted allowance for loan losses to loans; and (iv) 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, merger and conversion costs, OREO gain and losses, and the income tax effect of adjustments. The operating efficiency ratio excludes securities gains and losses, merger and conversion costs, and adjustment for OREO gains and losses from the efficiency ratio. Adjusted allowance for loan losses adds net acquisition accounting fair value discounts to the allowance for loan losses. 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 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.

 

Source

SmartFinancial, Inc.

 

Investor Contacts

 

Billy Carroll

President & CEO

865.868.0613

 

Frank Hughes

Executive Vice President

Investor Relations

423.385.3009

 

Media Contact

 

Kelley Fowler

First Vice President, Public Relations & Marketing

SmartBank

865.868.0611

kfowler@smartbank.net

 

 

 

 

 

 

SmartFinancial, Inc. and Subsidiaries              
Condensed Consolidated Financial Information (unaudited)              
(In thousands except per share data)              
                               
    As of and for the three months ending  
    March 31, 2016     Dec. 31, 2015     Sept. 30, 2015     June 30, 2015     March 31, 2015  
Selected Performance Ratios (Annualized)                                        
Return on average assets     0.54 %     0.47 %     -0.04 %     0.05 %     0.27 %
Net operating return on average assets (Non-GAAP)     0.40 %     0.24 %     0.10 %     0.17 %     0.06 %
Return on average shareholder equity     5.29 %     4.75 %     -0.44 %     0.47 %     2.42 %
Net operating return on average shareholder equity (Non-GAAP)     3.89 %     2.47 %     1.05 %     1.58 %     0.51 %
Net interest income / average assets     3.67 %     3.79 %     3.65 %     3.53 %     3.46 %
Yield on earning assets, TE     4.45 %     4.54 %     4.45 %     4.27 %     4.25 %
Cost of interest-bearing liabilities     0.54 %     0.52 %     0.53 %     0.49 %     0.51 %
Net interest margin, TE     4.00 %     4.10 %     4.00 %     3.85 %     3.74 %
Non interest income / average assets     0.43 %     0.46 %     0.10 %     0.08 %     0.63 %
Non interest expense / average assets     3.19 %     3.20 %     3.69 %     3.36 %     3.32 %
Efficiency ratio     76.93 %     74.29 %     97.45 %     88.67 %     71.68 %
Operating efficiency ratio (Non-GAAP)     82.09 %     85.73 %     90.96 %     80.41 %     81.75 %
Pre-tax pre-provision income / average assets     0.90 %     1.05 %     0.06 %     0.26 %     0.76 %
                                         
Per Common Share                                        
Net income, basic     0.20       0.20       (0.03 )     0.01       0.10  
Net income, diluted     0.19       0.19       (0.03 )     0.01       0.09  
Net operating earnings, basic (Non-GAAP)     0.13       0.10       0.04       0.06       0.01  
Net operating earnings, diluted (Non-GAAP)     0.13       0.10       0.04       0.06       0.01  
Book value     15.47       15.19       15.07       14.88       15.07  
Tangible book value (Non-GAAP)     14.29       13.99       13.84       14.82       15.00  
Common shares outstanding     5,817,204       5,806,477       5,735,393       2,965,783       2,965,783  
                                         
Composition Of Loans                                        
Commercial & financial     83,197       85,526       81,107       37,507       34,285  
Real estate construction & Development     113,028       105,132       97,050       52,634       64,180  
Real estate commercial     370,922       369,263       365,607       208,937       190,214  
owner occupied     166,364       161,698       153,496       82,860       89,225  
non-owner occupied     204,558       207,565       212,111       126,077       100,989  
Real estate residential     166,214       161,427       162,090       89,876       81,253  
Other loans     7,578       6,368       4,585       1,770       1,478  
Total loans     740,939       727,716     710,439     390,724       371,410  
                                         
Asset Quality Data and Ratios                                        
Nonperforming loans     3,171       2,754       1,715       4,067       4,156  
Foreclosed assets     5,133       5,358       9,647       3,728       4,170  
Total nonperforming assets     8,304       8,112       11,362       7,795       8,326  
Restructured loans not included in nonperforming loans     3,677       3,693       3,731       1,831       1,849  
Net charge-offs to average loans (annualized)     -0.02 %     0.02 %     0.03 %     0.13 %     0.00 %
Allowance for loan losses to loans     0.61 %     0.60 %     0.54 %     0.98 %     1.05 %
Adjusted allowance for loan losses to loans (Non-GAAP)     2.11 %     2.18 %     2.26 %     2.38 %     2.75 %
Nonperforming loans to total loans, gross     0.43 %     0.38 %     0.24 %     1.04 %     1.12 %
Nonperforming assets to total assets     0.82 %     0.79 %     1.13 %     1.43 %     1.57 %
                                         
Capital Ratios                                        
Tangible equity to tangible assets     9.43 %     9.17 %     9.14 %     10.30 %     10.68 %
Tangible common equity to tangible assets     8.24 %     7.99 %     7.94 %     8.09 %     8.41 %
SmartFinancial Inc.:                                        
Tier 1 leverage     9.74 %     9.45 %     9.31 %     *       *  
Common equity Tier 1     10.61 %     10.30 %     10.25 %     *       *  
Tier 1 risk-based capital     12.14 %     11.78 %     11.77 %     *       *  
Total risk-based capital     12.70 %     12.32 %     12.25 %     *       *  

 

* The Company was not required to report quarterly captial ratios prior to 9/30/15

 

 

 

 

SmartFinancial, Inc. and Subsidiaries              
Condensed Consolidated Financial Information (unaudited)        
(In thousands)              
                               
BALANCE SHEET                              
    Ending Balances  
    March 31, 2016     Dec. 31, 2015     Sept. 30, 2015     June 30, 2015     March 31, 2015  
Assets                                        
Cash & cash equivalents     68,933       79,965       89,936       43,810       41,244  
Securities available for sale     157,560       166,413       152,150       83,747       92,295  
Other investments     4,451       4,451       4,451       2,128       2,090  
Total investment securities     162,011       170,864       156,601       85,875       94,385  
Total loans     740,939       727,716       710,439       390,724       371,410  
Allowance for loan losses     (4,527 )     (4,355 )     (3,828 )     (3,834 )     (3,915 )
Loans net     736,412       723,361       706,611       386,890       367,495  
Premises and equipment     25,680       25,038       25,266       16,405       16,383  
Foreclosed assets     5,133       5,358       9,647       3,728       4,170  
Goodwill and other intangibles     6,848       6,941       7,034       177       218  
Other assets     11,207       12,436       11,962       6,478       5,257  
Total assets     1,016,224       1,023,963       1,007,057       543,363       529,152  
                                         
Liabilities                                        
Non-interest demand     132,481       131,419       123,551       69,427       58,006  
Interest-bearing demand     161,454       149,424       144,012       114,165       119,771  
Money market and savings     241,500       236,901       231,477       131,810       120,147  
Time deposits     323,676       340,739       347,951       167,344       168,636  
Total deposits     859,111       858,483       846,992       482,745       466,560  
Repurchase agreements     20,747       28,068       18,442       2,727       4,607  
FHLB & other borrowings     29,675       34,187       39,278       -       -  
Other liabilities     4,703       3,048       3,908       1,772       1,280  
Total liabilities     914,236       923,786       908,621       487,245       472,447  
Shareholders' Equity                                        
Preferred stock     12       12       12       12       12  
Common stock     5,817       5,806       5,732       2,966       2,966  
Additional paid-in capital     82,717       82,616       81,628       42,516       42,512  
Retained earnings     13,231       12,095       10,942       11,049       11,013  
Accumulated other comprehensive loss     211       (352 )     122       (425 )     202  
Total shareholders' equity     101,988       100,177       98,436       56,118       56,705  
Total liabilities & shareholders' equity     1,016,224       1,023,963       1,007,057       543,363       529,152  

 

 

 

 

SmartFinancial, Inc. and Subsidiaries              
Condensed Consolidated Financial Information (unaudited)        
(In thousands)              
                               
INCOME STATEMENT                              
    Three months ending  
    March 31, 2016     Dec. 31, 2015     Sept. 30, 2015     June 30, 2015     March 31, 2015  
Interest Income                                        
Loans, including fees     9,374       9,875       6,660       4,677       4,518  
Investment securities     752       603       446       386       442  
Other interest income     28       89       47       5       4  
Total interest income     10,154       10,567       7,153       5,068       4,964  
Interest Expense                                        
Deposits     961       937       688       498       503  
Repurchase agreements     17       17       7       3       3  
FHLB and other borrowings     45       66       32       3       0  
Total interest expense     1,023       1,020       727       504       506  
Net interest income     9,131       9,547       6,426       4,564       4,458  
Provision for loan losses     138       567       32       40       284  
Net interest income after provision for loan losses     8,993       8,980       6,394       4,524       4,174  
Non-interest income                                        
Service charges on deposit accounts     296       397       237       149       130  
Other non-interest income     412       340       317       237       230  
Gain on securites     83       -       -       52       -  
Gain on sale of loans and other assets     222       86       (294 )     31       65  
Gain (loss) on sale of foreclosed assets     58       332       (86 )     (363 )     383  
Total non-interest income     1,071       1,155       174       106       808  
Non-interest expense                                        
Salaries and employee benefits     4,495       4,208       3,187       2,236       2,301  
Occupancy expense     990       910       688       556       525  
Data Processing     341       510       278       194       210  
Professional expenses     455       760       908       334       352  
Foreclosed asset expense     57       110       91       48       41  
Marketing     173       100       142       111       111  
Amortization of other intangibles     93       93       58       41       41  
FDIC premiums     136       148       144       98       97  
Service contracts     286       248       192       152       159  
Other non-interest expense     926       965       805       570       444  
Total non-interest expense     7,952       8,052       6,493       4,340       4,281  
Earnings before income taxes     2,112       2,083       75       290       701  
Income tax expense     764       901       152       225       363  
Net income (loss)     1,348       1,182       (77 )     65       338  
Dividends on preferred stock     212       30       30       30       30  
Net income available to common shareholders     1,136       1,152       (107 )     35       308  
                                         
NET INCOME PER COMMON SHARE                                        
Basic     0.20       0.20       (0.03 )     0.01       0.10  
Diluted     0.19       0.19       (0.03 )     0.01       0.09  
                                         
Weighted average common shares outstanding                                        
Basic     5,807       5,750       3,937       2,966       2,966  
Diluted     6,108       6,037       4,244       3,293       3,293  

 

 

 

 

SmartFinancial, Inc. and Subsidiaries                                
Condensed Consolidated Financial Information (unaudited)                          
(In thousands)                                      
                                                       
YIELD ANALYSIS                                      
    Three Months Ended     Three Months Ended     Three Months Ended  
    March 31, 2016     Dec. 31, 2015     March 31, 2015  
    Avg. Balance     Tax Equivalent Interest     Yield / Rate     Avg. Balance     Tax Equivalent Interest     Yield / Rate     Avg. Balance     Tax Equivalent Interest     Yield / Rate  
ASSETS                                                                        
Loans     734,941       9,374       5.12 %     719,140       9,875       5.45 %     366,209       4,518       5.00 %
Investment securities     164,337       765       1.87 %     157,243       624       1.57 %     98,540       443       1.82 %
Fed funds sold and other     17,310       28       0.65 %     49,488       89       0.72 %     9,178       4       0.19 %
Total interest earning assets     916,588       10,167       4.45 %     925,871       10,588       4.54 %     473,927       4,965       4.25 %
Non-interest earning assets     79,286                       82,100                       42,137                  
Total assets     995,874                       1,007,971                       516,064                  
                                                                         
LIABLITIES & EQUITY                                                                        
Interest-bearing demand     155,080       66       0.17 %     138,156       53       0.15 %     105,456       36       0.14 %
Money market and savings     241,441       272       0.45 %     234,637       259       0.44 %     120,567       109       0.37 %
Time deposits     330,813       623       0.76 %     344,095       625       0.72 %     174,898       358       0.83 %
Total interest-bearing deposits     727,334       961       0.53 %     716,888       937       0.52 %     400,921       503       0.51 %
Repurchase agreements     18,943       17       0.36 %     22,528       17       0.30 %     4,661       3       0.26 %
FHLB and other borrowings     14,819       45       1.21 %     35,806       66       0.73 %     133       0       1.20 %
Total interest bearing liabilities     761,096       1,023       0.54 %     775,222       1,020       0.52 %     405,715       506       0.51 %
Non-interest bearing deposits     128,120                       130,212                       52,407                  
Other liabilities     4,449                       3,830                       1,223                  
Total liabilities     893,665                       909,264                       459,345                  
Shareholders' equity     102,209                       98,707                       56,719                  
Total liabilities and shareholders equity     995,874                       1,007,971                       516,064                  
                                                                         
Net interest income, taxable equivalent             9,144                       9,568                       4,459          
Interest rate spread                     3.91 %                     4.02 %                     3.74 %
Tax equivalent net interest margin                     4.00 %                     4.10 %                     3.77 %
                                                                         
Percent of average interest-earnings assets to average interest-bearing liabilities                     120.43 %                     119.43 %                     116.81 %

 

 

 

 

SmartFinancial, Inc. and Subsidiaries              
Condensed Consolidated Financial Information (unaudited)              
(In thousands)              
                               
    Three months ending  
    March 31, 2016     Dec. 31, 2015     Sept. 30, 2015     June 30, 2015     March 31, 2015  
Operating Earnings                                        
Net income (loss) (GAAP)     1,348       1,182       (77 )     65       338  
Purchased loan accounting adjustments*     (541 )     (818 )     (412 )     (161 )     (224 )
Securities (gains) losses     (83 )     -       -       (52 )     -  
Merger and conversion costs     105       230       748       104       175  
Foreclosed assets (gains) losses     (58 )     (332 )     86       363       (383 )
Income tax effect of adjustments     221       352       (161 )     (97 )     165  
Net operating earnings (Non-GAAP)     992       614       184       222       71  
Dividends on preferred stock     (212 )     (30 )     (30 )     (30 )     (30 )
Net operating earnings available to common shareholders (Non-GAAP)     780       584       154       192       41  
Net operating earnings per common share:                                        
Basic     0.13       0.10       0.04       0.06       0.01  
Diluted     0.13       0.10       0.04       0.06       0.01  
                                         
Operating Efficiency Ratio                                        
Efficiency ratio (GAAP)     76.93 %     74.29 %     97.45 %     88.67 %     71.68 %
Adjustment for purchased loan accounting adjustments*     6.81 %     10.16 %     6.34 %     3.71 %     5.23 %
Adjustment for securities (gains) losses     -1.05 %     0.00 %     0.00 %     -1.20 %     0.00 %
Adjustment for merger and conversion costs     -1.33 %     -2.85 %     -11.51 %     -2.41 %     -4.10 %
Adjustment for OREO (gains) losses     0.73 %     4.13 %     -1.32 %     -8.36 %     8.94 %
Operating efficiency ratio (Non-GAAP)     82.09 %     85.73 %     90.96 %     80.41 %     81.75 %
                                         
                                         
Adjusted Allowance for Loan Losses                                        
Allowance for loan losses (GAAP)     4,527       4,355       3,828       3,834       3,915  
Net acquisition accounting fair value discounts to loans     11,381       11,781       12,520       5,599       6,467  
Adjusted allowance for loan losses (Non-GAAP)     15,908       16,136       16,348       9,433       10,382  
Loans (excluding acquisition accounting fair value discounts)     752,321       739,497       722,959       396,323       377,877  
Adjusted allowance for loan losses to loans (Non-GAAP)     2.11 %     2.18 %     2.26 %     2.38 %     2.75 %
                                         
Tangible Common Equity                                        
Shareholders' equity (GAAP)     101,988       100,177       98,436       56,118       56,705  
Less preferred stock & preferred stock paid in capital     12,000       12,000       12,000       12,000       12,000  
Less goodwill and other intangible assets     6,848       6,941       7,034       177       218  
Tangible common equity (Non-GAAP)     83,140       81,236       79,402       43,941       44,487  

 

* Consists of ASC 310-30 accretion above (below) contractual loan income and ASC 310-20 accretion