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SmartFinancial Announces Results for the Third Quarter 2024

1. Net income increased to $9.1 million in Q3 2024. 2. Loan and lease growth surged by 16% quarter-over-quarter. 3. Net interest margin expanded to 3.11%, up 14 basis points. 4. Nonperforming assets to total assets ratio is stable at 0.26%. 5. Tangible book value per share rose 19% annually.

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KNOXVILLE, Tenn.--(BUSINESS WIRE)--SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NYSE: SMBK), today announced net income of $9.1 million, or $0.54 per diluted common share, for the third quarter of 2024, compared to net income of $2.1 million, or $0.12 per diluted common share, for the third quarter of 2023, and compared to prior quarter net income of $8.0 million, or $0.48 per diluted common share. Operating earnings1, which excludes non-recurring income, net of tax adjustments, totaled $9.1 million, or $0.54 per diluted common share, in the third quarter of 2024, compared to $7.2 million, or $0.43 per diluted common share, in the third quarter of 2023, and compared to $7.8 million, or $0.46 per diluted common share, in the second quarter of 2024. Highlights for the Third Quarter of 2024 Operating earnings1 of $9.1 million, or $0.54 per diluted common share Net organic loan and lease growth of $144 million with 16% annualized quarter-over-quarter increase Quarter-over-quarter net tax equivalent interest margin expansion of 14 basis points to 3.11% 19% annualized quarter-over-quarter increase in tangible book value per common share1 Credit quality remains solid with nonperforming assets to total assets of 0.26% Established a Real Estate Investment Trust (“REIT”) subsidiary as a tax saving strategy Billy Carroll, President & CEO, stated: “As we talked about last quarter, the sales energy throughout our Company remains very positive as demonstrated by our 16% quarterly annualized loan and lease growth. Margin continues to inflect, up another 14 basis points to 3.11% for the quarter, and we continue to position our balance sheet for optimized returns. Credit quality remained strong, and I am pleased with our diligence around expense control. As we look ahead, we are confident in our ability to further enhance profitability and deliver strong tangible book value per share growth.” SmartFinancial's Chairman, Miller Welborn, concluded: “This quarter was a further demonstration of our team’s ability to execute our plan. The Board was especially pleased with the Company’s operating leverage expansion and quarterly tangible book value per share growth of nearly 9% annualized. And while financial results are important, we don’t take for granted SmartBank’s incredible culture. SmartBank’s certification as a Great Place to Work by over 94% of its employee base is a tremendous honor and we look forward to continuing our tradition of being a premier employment destination.” Net Interest Income and Net Interest Margin Net interest income was $35.0 million for the third quarter of 2024, compared to $32.8 million for the prior quarter. Average earning assets totaled $4.5 billion for the current and prior quarters. The categories of average earnings assets changed quarter-over-quarter, primarily from an increase in average loans and leases of $130.5 million, offset by a decrease in average securities of $15.7 million and average interest-earning cash of $79.2 million. Average interest-bearing liabilities increased by $21.4 million from the prior quarter, primarily attributable to an increase in average borrowings of $40.9 million, offset by a decrease in average deposits of $18.2 million. The tax equivalent net interest margin was 3.11% for the third quarter of 2024, compared to 2.97% for the prior quarter. The tax equivalent net interest margin was positively impacted by the increased yield on interest-earning assets, quarter-over-quarter, coupled with no change in the cost of interest-bearing liabilities, quarter-over-quarter. The yield on loans and leases, excluding loan fees, on a fully tax equivalent basis (“FTE”) was 5.95% for the third quarter, compared to 5.80% for the prior quarter. The cost of total deposits for the third quarter of 2024 was 2.54% compared to 2.56% in the prior quarter. The cost of interest-bearing liabilities was 3.29% for the third quarter of 2024 and the prior quarter. The cost of average interest-bearing deposits was 3.20% for the third quarter of 2024, compared to 3.23% for the prior quarter, a decrease of 3 basis points.   1 Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliations The following table presents selected interest rates and yields for the periods indicated: Three Months Ended Sep Jun Increase Selected Interest Rates and Yields 2024 2024 (Decrease) Yield on loans and leases, excluding loan fees, FTE 5.95 % 5.80 % 0.15 % Yield on loans and leases, FTE 6.02 % 5.87 % 0.15 % Yield on earning assets, FTE 5.65 % 5.52 % 0.13 % Cost of interest-bearing deposits 3.20 % 3.23 % (0.03 )% Cost of total deposits 2.54 % 2.56 % (0.02 )% Cost of interest-bearing liabilities 3.29 % 3.29 % - % Net interest margin, FTE 3.11 % 2.97 % 0.14 %   Provision for Credit Losses on Loans and Leases and Credit Quality At September 30, 2024, the allowance for credit losses was $35.6 million. The allowance for credit losses to total loans and leases was 0.96% as of September 30, 2024, compared to 0.97% as of June 30, 2024. The following table presents detailed information related to the provision for credit losses for the periods indicated (dollars in thousands): Three Months Ended Sep Jun Increase Provision for Credit Losses on Loans and Leases Rollforward 2024 2024 (Decrease) Beginning balance $ 34,690 $ 34,203 $ 487 Charge-offs (1,426 ) (457 ) (969 ) Recoveries 72 48 24 Net (charge-offs) recoveries (1,354 ) (409 ) (945 ) Provision for credit losses (1) 2,273 896 1,377 Ending balance $ 35,609 $ 34,690 $ 919 Allowance for credit losses to total loans and leases, gross 0.96 % 0.97 % (0.01 )%   (1) The current quarter-ended and prior quarter-ended excludes unfunded commitments provision of $302 thousand and a release of $13 thousand, respectively. At September 30, 2024, the unfunded commitment liability totaled $2.3 million. Nonperforming loans and leases as a percentage of total loans and leases was 0.26% as of September 30, 2024, an increase of 7 basis points from the 0.19% reported in the second quarter of 2024. Total nonperforming assets (which include nonaccrual loans and leases, loans and leases past due 90 days or more and still accruing, other real estate owned and other repossessed assets) as a percentage of total assets was 0.26% as of September 30, 2024, and 0.20% as of June 30, 2024. The following table presents detailed information related to credit quality for the periods indicated (dollars in thousands): Three Months Ended Sep Jun Increase Credit Quality 2024 2024 (Decrease) Nonaccrual loans and leases $ 9,319 $ 6,432 $ 2,887 Loans and leases past due 90 days or more and still accruing 172 210 (38 ) Total nonperforming loans and leases 9,491 6,642 2,849 Other real estate owned 179 688 (509 ) Other repossessed assets 2,949 2,645 304 Total nonperforming assets $ 12,619 $ 9,975 $ 2,644 Nonperforming loans and leases to total loans and leases, gross 0.26 % 0.19 % 0.07 % Nonperforming assets to total assets 0.26 % 0.20 % 0.06 %   Noninterest Income Noninterest income increased $1.5 million to $9.1 million for the third quarter of 2024 compared to $7.6 million for the prior quarter. The current quarter increase was primarily associated with a $579 thousand increase in investment services from a higher volume of investment activity, a $193 thousand increase in insurance commissions from new policies and renewals and a $607 thousand increase in other from fees related to capital markets activity. The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands): Three Months Ended Sep Jun Increase Noninterest Income 2024 2024 (Decrease) Service charges on deposit accounts $ 1,780 $ 1,692 $ 88 Mortgage banking income 410 348 62 Investment services 1,881 1,302 579 Insurance commissions 1,477 1,284 193 Interchange and debit card transaction fees 1,349 1,343 6 Other 2,242 1,635 607 Total noninterest income $ 9,139 $ 7,604 $ 1,535   Noninterest Expense Noninterest expense increased $1.6 million to $30.8 million for the third quarter of 2024 compared to $29.2 million for the prior quarter. The current quarter increase was primarily related to an increase in salaries and employee benefits related to incentive accruals for production performance. The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands): Three Months Ended Sep Jun Increase Noninterest Expense 2024 2024 (Decrease) Salaries and employee benefits $ 18,448 $ 17,261 $ 1,187 Occupancy and equipment 3,423 3,324 99 FDIC insurance 825 825 - Other real estate and loan related expenses 460 538 (78 ) Advertising and marketing 327 295 32 Data processing and technology 2,519 2,452 67 Professional services 1,201 1,064 137 Amortization of intangibles 604 608 (4 ) Other 3,039 2,834 205 Total noninterest expense $ 30,846 $ 29,201 $ 1,645   Income Tax Expense Income tax expense was $1.6 million for the third quarter of 2024, a decrease of $721 thousand, compared to $2.3 million for the prior quarter. The decrease was due to a reduction in the Bank’s annual state income tax expense as a result of the establishment of the Bank’s newly formed REIT. The REIT will create a more tax-effective structure that will result in a lower effective tax rate during future periods by lowering the Bank’s state income tax expense. Balance Sheet Trends Total assets at September 30, 2024 were $4.91 billion compared to $4.83 billion at December 31, 2023. The $79.5 million increase is primarily attributable to increases loans and leases of $273.0 million and bank owned life insurance of $21.6 million, offset by a decrease in securities of $60.5 million and cash and cash equivalents of $159.4 million. Total liabilities were $4.42 billion at September 30, 2024, compared to $4.37 billion at December 31, 2023, an increase of $50.4 million. Total deposits increased $54.6 million, which was driven primarily by the issuance of brokered deposits of $174.8 million, increase in other time deposits of $44.3 million and savings deposits of $42.4 million, offset by a decline in interest-bearing demand deposits of $172.7 million and noninterest bearing deposits of $34 million. Other liabilities increased $2.3 million, which was offset by a decrease in borrowings of $4.1 million and subordinated debt of $2.4 million. During the quarter, the Bank elected not to pursue a higher cost public funds depository relationship and utilized Federal Home Loan Advances temporarily, which was replaced with brokered deposits. Shareholders' equity at September 30, 2024, totaled $489.0 million, an increase of $29.1 million, from December 31, 2023. The increase in shareholders' equity was primarily driven by net income of $26.5 million for the nine months ended September 30, 2024, and a positive change of $8.6 million in accumulated other comprehensive income, offset by dividends paid of $4.1 million. Tangible book value per share2 was $22.67 at September 30, 2024, compared to $20.76 at December 31, 2023. Tangible common equity1 as a percentage of tangible assets1 was 7.99% at September 30, 2024, compared with 7.47% at December 31, 2023. The following table presents selected balance sheet information for the periods indicated (dollars in thousands): Sep Dec Increase Selected Balance Sheet Information 2024 2023 (Decrease) Total assets $ 4,908,934 $ 4,829,387 $ 79,547 Total liabilities 4,419,911 4,369,501 50,410 Total equity 489,023 459,886 29,137 Securities 629,115 689,646 (60,531 ) Loans and leases 3,717,478 3,444,462 273,016 Deposits 4,322,491 4,267,854 54,637 Borrowings 8,997 13,078 (4,081 )   Conference Call Information SmartFinancial issued this earnings release for the third quarter of 2024 on Monday, October 21, 2024, and will host a conference call on Tuesday, October 22, 2024, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and entering the access code, 599429. A replay of the conference call will be available through December 21, 2024, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code, 195203. Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 a.m. ET prior to 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 branches across Tennessee, Alabama, and Florida. 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.   1 Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliation Non-GAAP Financial Measures Statements included in this earnings release include measures not recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered Non-GAAP financial measures (“Non-GAAP”) 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 and ratios derived therefrom in its analysis of the Company's performance, including: Operating earnings Operating noninterest income Operating noninterest expense Operating pre-provision net revenue (“PPNR”) earnings Tangible common equity Average tangible common equity Tangible book value per common share Tangible assets Operating earnings, operating noninterest income, operating noninterest expense and operating PPNR earnings exclude non-operating related income and expense items from net income, noninterest income and noninterest expense, respectively. Tangible common equity and average tangible common equity exclude goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively. Tangible book value per common share is tangible common equity divided by common shares outstanding. Tangible assets excludes goodwill and other intangibles from total assets. A detailed reconciliation of these items and the ratios derived therefrom is available in the Non-GAAP reconciliations. Management believes that Non-GAAP financial measures provide additional useful information that allows investors to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. Management also believes these Non-GAAP financial measures enhance investors' ability to compare period-to-period financial results and allow investors and company management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance. 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 news release may contain statements that are based on management’s current estimates or expectations of future events or future results, and that may be deemed to constitute forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements are not historical in nature and can generally be identified by such words as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “may,” “estimate,” and similar expressions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results of SmartFinancial to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties, and other factors include, among others, risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively; claims and litigation arising from our business activities and from the companies we acquire, which may relate to contractual issues, environmental laws, fiduciary responsibility, and other matters; general risks related to our merger and acquisition activity, including risks associated with our pursuit of future acquisitions; changes in management’s plans for the future; prevailing, or changes in, economic or political conditions, particularly in our market areas, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; our ability to anticipate interest rate changes and manage interest rate risk (including the impact of higher interest rates on macroeconomic conditions, competition, and the cost of doing business and the impact of interest rate fluctuations on our financial projections, models and guidance); increased technology and cybersecurity risks, including generative artificial intelligence risks; credit risk associated with our lending activities; changes in loan demand, real estate values, or competition; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; changes in accounting principles, policies, or guidelines; changes in applicable laws, rules, or regulations; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions; potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine or the conflict in Israel and surrounding areas; and other general competitive, economic, political, and market factors, including those affecting our business, operations, pricing, products, or services. These and other factors that could cause results to differ materially from those described in the forward-looking statements can be found in SmartFinancial’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, in each case filed with or furnished to the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website (www.sec.gov). Undue reliance should not be placed on forward-looking statements. SmartFinancial disclaims any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events, or otherwise.   SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) Ending Balances Sep Jun Mar Dec Sep 2024 2024 2024 2023 2023 Assets: Cash and cash equivalents $ 192,914 $ 342,835 $ 477,941 $ 352,271 $ 400,258 Securities available-for-sale, at fair value 501,336 500,821 474,347 408,410 385,131 Securities held-to-maturity, at amortized cost 127,779 128,996 180,169 281,236 282,313 Other investments 20,352 13,780 13,718 13,662 13,805 Loans held for sale 5,804 3,103 4,861 4,418 2,734 Loans and leases 3,717,478 3,574,158 3,477,555 3,444,462 3,378,999 Less: Allowance for credit losses (35,609 ) (34,690 ) (34,203 ) (35,066 ) (33,687 ) Loans and leases, net 3,681,869 3,539,468 3,443,352 3,409,396 3,345,312 Premises and equipment, net 91,055 91,315 92,694 92,963 92,020 Other real estate owned 179 688 696 517 1,370 Goodwill and other intangibles, net 105,324 105,929 106,537 107,148 107,792 Bank owned life insurance 105,025 84,483 83,957 83,434 82,914 Other assets 77,297 79,591 76,418 75,932 83,522 Total assets $ 4,908,934 $ 4,891,009 $ 4,954,690 $ 4,829,387 $ 4,797,171 Liabilities: Deposits: Noninterest-bearing demand $ 863,949 $ 903,300 $ 907,254 $ 898,044 $ 923,763 Interest-bearing demand 834,207 988,057 996,298 1,006,915 993,717 Money market and savings 1,854,777 1,901,281 1,952,410 1,812,427 1,766,409 Time deposits 769,558 524,018 538,159 550,468 562,620 Total deposits 4,322,491 4,316,656 4,394,121 4,267,854 4,246,509 Borrowings 8,997 12,732 9,849 13,078 14,117 Subordinated debt 39,663 42,142 42,120 42,099 42,078 Other liabilities 48,760 47,014 41,804 46,470 47,815 Total liabilities 4,419,911 4,418,544 4,487,894 4,369,501 4,350,519 Shareholders' Equity: Common stock 16,926 16,926 17,057 16,989 16,995 Additional paid-in capital 293,909 293,586 296,061 295,699 295,542 Retained earnings 195,537 187,751 181,103 173,105 168,271 Accumulated other comprehensive loss (17,349 ) (25,798 ) (27,425 ) (25,907 ) (34,156 ) Total shareholders' equity 489,023 472,465 466,796 459,886 446,652 Total liabilities & shareholders' equity $ 4,908,934 $ 4,891,009 $ 4,954,690 $ 4,829,387 $ 4,797,171   SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands except share and per share data) Three Months Ended Nine Months Ended Sep Jun Mar Dec Sep Sep Sep 2024 2024 2024 2023 2023 2024 2023 Interest income: Loans and leases, including fees $ 54,738 $ 50,853 $ 50,020 $ 48,767 $ 47,539 $ 155,611 $ 137,712 Investment securities: Taxable 5,233 5,320 4,548 4,344 4,335 15,101 12,322 Tax-exempt 350 353 352 352 356 1,056 1,066 Federal funds sold and other earning assets 3,635 4,759 4,863 4,032 3,045 13,255 9,448 Total interest income 63,956 61,285 59,783 57,495 55,275 185,023 160,548 Interest expense: Deposits 27,350 27,439 27,035 24,926 23,433 81,824 59,333 Borrowings 709 148 128 162 210 985 775 Subordinated debt 865 884 899 890 626 2,647 1,877 Total interest expense 28,924 28,471 28,062 25,978 24,269 85,456 61,985 Net interest income 35,032 32,814 31,721 31,517 31,006 99,567 98,563 Provision for credit losses 2,575 883 (440 ) 1,571 795 3,018 1,458 Net interest income after provision for credit losses 32,457 31,931 32,161 29,946 30,211 96,549 97,105 Noninterest income: Service charges on deposit accounts 1,780 1,692 1,612 1,673 1,736 5,084 4,838 Loss on sale of securities, net — — — — (6,801 ) — (6,801 ) Mortgage banking 410 348 280 227 309 1,038 813 Investment services 1,881 1,302 1,380 1,339 1,461 4,563 3,766 Insurance commissions 1,477 1,284 1,103 1,133 1,153 3,865 3,551 Interchange and debit card transaction fees 1,349 1,343 1,253 1,370 1,357 3,945 4,087 Other 2,242 1,635 2,752 1,837 1,476 6,627 4,492 Total noninterest income 9,139 7,604 8,380 7,579 691 25,122 14,746 Noninterest expense: Salaries and employee benefits 18,448 17,261 16,639 16,275 16,785 52,348 49,474 Occupancy and equipment 3,423 3,324 3,396 3,378 3,547 10,144 10,073 FDIC insurance 825 825 915 915 825 2,565 2,241 Other real estate and loan related expense 460 538 584 781 603 1,582 1,616 Advertising and marketing 327 295 302 336 346 924 1,006 Data processing and technology 2,519 2,452 2,465 2,458 2,378 7,435 6,777 Professional services 1,201 1,064 924 1,136 735 3,190 2,307 Amortization of intangibles 604 608 612 643 647 1,824 1,981 Merger related and restructuring expenses — — — — 110 — 110 Other 3,039 2,834 2,716 3,773 2,540 8,587 7,870 Total noninterest expense 30,846 29,201 28,553 29,695 28,516 88,599 83,455 Income before income taxes 10,750 10,334 11,988 7,830 2,386 33,072 28,396 Income tax expense 1,610 2,331 2,630 1,640 319 6,572 5,993 Net income $ 9,140 $ 8,003 $ 9,358 $ 6,190 $ 2,067 $ 26,500 $ 22,403 Earnings per common share: Basic $ 0.55 $ 0.48 $ 0.56 $ 0.37 $ 0.12 $ 1.58 $ 1.33 Diluted $ 0.54 $ 0.48 $ 0.55 $ 0.37 $ 0.12 $ 1.57 $ 1.33 Weighted average common shares outstanding: Basic 16,726,658 16,770,819 16,849,735 16,814,647 16,807,548 16,782,200 16,801,840 Diluted 16,839,998 16,850,250 16,925,408 16,918,234 16,918,635 16,874,316 16,907,325   SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) YIELD ANALYSIS Three Months Ended September 30, 2024 June 30, 2024 September 30, 2023 Average Yield/ Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Balance Interest Cost Assets: Loans and leases, including fees1 $ 3,634,808 $ 54,993 6.02 % $ 3,504,265 $ 51,110 5.87 % $ 3,360,678 $ 47,539 5.61 % Taxable securities 564,978 5,233 3.68 % 580,517 5,320 3.69 % 743,054 4,335 2.31 % Tax-exempt securities2 63,561 443 2.77 % 63,690 447 2.82 % 64,707 451 2.77 % Federal funds sold and other earning assets 267,252 3,634 5.41 % 346,459 4,759 5.52 % 229,487 3,045 5.26 % Total interest-earning assets 4,530,599 64,303 5.65 % 4,494,931 61,636 5.52 % 4,397,926 55,370 4.99 % Noninterest-earning assets 381,306 383,697 379,456 Total assets $ 4,911,905 $ 4,878,628 $ 4,777,382 Liabilities and Shareholders’ Equity: Interest-bearing demand deposits $ 925,307 5,289 2.27 % $ 983,433 5,950 2.43 % $ 969,122 5,463 2.24 % Money market and savings deposits 1,917,301 16,608 3.45 % 1,909,125 16,529 3.48 % 1,753,671 13,744 3.11 % Time deposits 560,699 5,453 3.87 % 528,985 4,960 3.77 % 551,191 4,226 3.04 % Total interest-bearing deposits 3,403,307 27,350 3.20 % 3,421,543 27,439 3.23 % 3,273,984 23,433 2.84 % Borrowings 53,592 709 5.26 % 12,684 148 4.69 % 16,228 210 5.13 % Subordinated debt 40,846 865 8.42 % 42,129 884 8.44 % 42,065 626 5.90 % Total interest-bearing liabilities 3,497,745 28,924 3.29 % 3,476,356 28,471 3.29 % 3,332,277 24,269 2.89 % Noninterest-bearing deposits 884,938 888,693 951,179 Other liabilities 50,580 47,208 48,494 Total liabilities 4,433,263 4,412,257 4,331,950 Shareholders' equity 478,642 466,371 445,432 Total liabilities and shareholders' equity $ 4,911,905 $ 4,878,628 $ 4,777,382 Net interest income, taxable equivalent $ 35,379 $ 33,165 $ 31,101 Interest rate spread 2.36 % 2.22 % 2.11 % Tax equivalent net interest margin 3.11 % 2.97 % 2.81 % Percentage of average interest-earning assets to average interest-bearing liabilities 129.53 % 129.30 % 131.98 % Percentage of average equity to average assets 9.74 % 9.56 % 9.32 %   1 Yields computed on tax-exempt loans on a tax equivalent basis include $255 thousand, $257 thousand, and $0 thousand of taxable equivalent income for the quarters ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively. 2 Yields computed on tax-exempt instruments on a tax equivalent basis include $93 thousand, $94 thousand, and $95 thousand of taxable equivalent income for the quarters ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.   SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) YIELD ANALYSIS Nine Months Ended September 30, 2024 September 30, 2023 Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Assets: Loans and leases, including fees1 $ 3,532,768 $ 156,123 5.90 % $ 3,309,616 $ 137,712 5.56 % Taxable securities 588,679 15,101 3.43 % 745,694 12,322 2.21 % Tax-exempt securities2 63,804 1,336 2.80 % 65,170 1,349 2.77 % Federal funds sold and other earning assets 322,339 13,255 5.49 % 267,124 9,448 4.73 % Total interest-earning assets 4,507,590 185,815 5.51 % 4,387,604 160,831 4.90 % Noninterest-earning assets 381,743 365,123 Total assets $ 4,889,333 $ 4,752,727 Liabilities and Shareholders’ Equity: Interest-bearing demand deposits $ 968,139 17,299 2.39 % $ 954,585 14,583 2.04 % Money market and savings deposits 1,910,452 49,285 3.45 % 1,770,232 35,912 2.71 % Time deposits 543,887 15,240 3.74 % 508,600 8,838 2.32 % Total interest-bearing deposits 3,422,478 81,824 3.19 % 3,233,417 59,333 2.45 % Borrowings 25,941 985 5.07 % 19,309 775 5.37 % Subordinated debt 41,691 2,647 8.48 % 42,044 1,877 5.97 % Total interest-bearing liabilities 3,490,110 85,456 3.27 % 3,294,770 61,985 2.52 % Noninterest-bearing deposits 882,168 972,507 Other liabilities 48,299 44,703 Total liabilities 4,420,577 4,311,980 Shareholders' equity 468,756 440,747 Total liabilities and shareholders' equity $ 4,889,333 $ 4,752,727 Net interest income, taxable equivalent $ 100,359 $ 98,846 Interest rate spread 2.24 % 2.39 % Tax equivalent net interest margin 2.97 % 3.01 % Percentage of average interest-earning assets to average interest-bearing liabilities 129.15 % 133.17 % Percentage of average equity to average assets 9.59 % 9.27 %   1Yields computed on tax-exempt loans on a tax equivalent basis included $512 thousand and $0 thousand of taxable equivalent income for the nine months ended September 30, 2024, and 2023, respectively. 2Yields computed on tax-exempt instruments on a tax equivalent basis included $280 thousand and $283 thousand of taxable equivalent income for the nine months ended September 30, 2024, and 2023, respectively.   SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) As of and for The Three Months Ended Sep Jun Mar Dec Sep 2024 2024 2024 2023 2023 Composition of Loans and Leases: Commercial real estate: Owner occupied $ 868,077 $ 829,085 $ 804,557 $ 798,416 $ 776,402 Non-owner occupied 1,031,708 986,278 938,648 940,789 890,774 Commercial real estate, total 1,899,785 1,815,363 1,743,205 1,739,205 1,667,176 Commercial & industrial 731,600 701,460 667,903 645,918 617,115 Construction & land development 315,006 294,575 321,860 327,185 373,068 Consumer real estate 690,504 678,331 659,209 649,867 638,518 Leases 67,052 70,299 71,909 68,752 68,538 Consumer and other 13,531 14,130 13,469 13,535 14,584 Total loans and leases $ 3,717,478 $ 3,574,158 $ 3,477,555 $ 3,444,462 $ 3,378,999 Asset Quality and Additional Loan Data: Nonperforming loans and leases $ 9,491 $ 6,642 $ 6,266 $ 8,101 $ 4,163 Other real estate owned 179 688 696 517 1,370 Other repossessed assets 2,949 2,645 2,033 1,117 348 Total nonperforming assets $ 12,619 $ 9,975 $ 8,995 $ 9,735 $ 5,881 Modified loans and leases1 not included in nonperforming loans and leases $ 4,053 $ 4,241 $ 4,413 $ 4,245 $ 2,376 Net charge-offs to average loans and leases (annualized) 0.15 % 0.05 % 0.09 % 0.04 % 0.04 % Allowance for credit losses to loans and leases 0.96 % 0.97 % 0.98 % 1.02 % 1.00 % Nonperforming loans and leases to total loans and leases, gross 0.26 % 0.19 % 0.18 % 0.24 % 0.12 % Nonperforming assets to total assets 0.26 % 0.20 % 0.18 % 0.20 % 0.12 % Capital Ratios: Equity to Assets 9.96 % 9.66 % 9.42 % 9.52 % 9.31 % Tangible common equity to tangible assets (Non-GAAP)2 7.99 % 7.66 % 7.43 % 7.47 % 7.23 % SmartFinancial, Inc.3 Tier 1 leverage 8.44 % 8.32 % 8.23 % 8.27 % 8.13 % Common equity Tier 1 10.06 % 10.06 % 10.20 % 10.14 % 10.07 % Tier 1 capital 10.06 % 10.06 % 10.20 % 10.14 % 10.07 % Total capital 11.63 % 11.68 % 11.85 % 11.78 % 11.90 % SmartBank Estimated4 Tier 1 leverage 9.18 % 9.11 % 9.07 % 9.18 % 9.00 % Common equity Tier 1 10.92 % 11.02 % 11.23 % 11.26 % 11.15 % Tier 1 capital 10.92 % 11.02 % 11.23 % 11.26 % 11.15 % Total capital 11.70 % 11.79 % 12.00 % 12.02 % 11.87 %   1Borrowers that have experienced financial difficulty. 2Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures. 3All periods presented are estimated. 4 Current period capital ratios are estimated as of the date of this earnings release. SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands except share and per share data) As of and for The As of and for The Three Months Ended Nine Months Ended Sep Jun Mar Dec Sep Sep Sep 2024 2024 2024 2023 2023 2024 2023 Selected Performance Ratios (Annualized): Return on average assets 0.74 % 0.66 % 0.77 % 0.52 % 0.17 % 0.72 % 0.63 % Return on average shareholders' equity 7.60 % 6.90 % 8.16 % 5.46 % 1.84 % 7.55 % 6.80 % Return on average tangible common equity¹ 9.75 % 8.94 % 10.63 % 7.18 % 2.43 % 9.77 % 9.02 % Noninterest income / average assets 0.74 % 0.63 % 0.69 % 0.63 % 0.06 % 0.69 % 0.41 % Noninterest expense / average assets 2.50 % 2.41 % 2.35 % 2.47 % 2.37 % 2.42 % 2.35 % Efficiency ratio 69.83 % 72.25 % 71.20 % 75.95 % 89.96 % 71.06 % 73.65 % Operating Selected Performance Ratios (Annualized): Operating return on average assets1 0.74 % 0.64 % 0.69 % 0.57 % 0.60 % 0.69 % 0.77 % Operating PPNR return on average assets1 1.08 % 0.90 % 0.84 % 0.86 % 0.84 % 0.94 % 1.03 % Operating return on average shareholders' equity1 7.60 % 6.72 % 7.29 % 6.07 % 6.41 % 7.21 % 8.35 % Operating return on average tangible common equity1 9.75 % 8.70 % 9.49 % 7.98 % 8.46 % 9.32 % 11.09 % Operating efficiency ratio1 69.28 % 72.13 % 73.50 % 73.41 % 73.60 % 71.55 % 69.23 % Operating noninterest income / average assets1 0.74 % 0.60 % 0.58 % 0.63 % 0.62 % 0.64 % 0.61 % Operating noninterest expense / average assets1 2.50 % 2.41 % 2.35 % 2.39 % 2.36 % 2.42 % 2.34 % Selected Interest Rates and Yields: Yield on loans and leases, excluding loan fees, FTE 5.95 % 5.80 % 5.71 % 5.61 % 5.52 % 5.82 % 5.37 % Yield on loans and leases, FTE 6.02 % 5.87 % 5.82 % 5.68 % 5.61 % 5.90 % 5.56 % Yield on earning assets, FTE 5.65 % 5.52 % 5.36 % 5.22 % 4.99 % 5.51 % 4.90 % Cost of interest-bearing deposits 3.20 % 3.23 % 3.16 % 3.00 % 2.84 % 3.19 % 2.45 % Cost of total deposits 2.54 % 2.56 % 2.52 % 2.35 % 2.20 % 2.54 % 1.89 % Cost of interest-bearing liabilities 3.29 % 3.29 % 3.23 % 3.07 % 2.89 % 3.27 % 2.52 % Net interest margin, FTE 3.11 % 2.97 % 2.85 % 2.86 % 2.81 % 2.97 % 3.01 % Per Common Share: Net income, basic $ 0.55 $ 0.48 $ 0.56 $ 0.37 $ 0.12 $ 1.58 $ 1.33 Net income, diluted 0.54 0.48 0.55 0.37 0.12 1.57 1.33 Operating earnings, basic¹ 0.55 0.47 0.50 0.41 0.43 1.51 1.64 Operating earnings, diluted¹ 0.54 0.46 0.49 0.41 0.43 1.50 1.63 Book value 28.89 27.91 27.37 27.07 26.28 28.89 26.28 Tangible book value¹ 22.67 21.66 21.12 20.76 19.94 22.67 19.94 Common shares outstanding 16,926,374 16,925,902 17,056,704 16,988,879 16,994,543 16,926,374 16,994,543   1Non-GAAP measure. See reconciliation of Non-GAAP measures.   SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) NON-GAAP RECONCILIATIONS Three Months Ended Nine Months Ended Sep Jun Mar Dec Sep Sep Sep 2024 2024 2024 2023 2023 2024 2023 Operating Earnings: Net income (GAAP) $ 9,140 $ 8,003 $ 9,358 $ 6,190 $ 2,067 $ 26,500 $ 22,403 Noninterest income: Securities (gains) losses, net — — — — 6,801 — 6,801 Gain on sale of former branch building — (283 ) (1,346 ) — — (1,629 ) — Noninterest expenses: Donation of a former branch location — — — 250 — — — Accruals for pending litigation — — — 675 — — — Merger related and restructuring expenses — — — — 110 — 110 Income taxes: Income tax effect of adjustments — 73 348 (239 ) (1,785 ) 421 (1,785 ) Operating earnings (Non-GAAP) $ 9,140 $ 7,793 $ 8,360 $ 6,876 $ 7,193 $ 25,292 $ 27,529 Operating earnings per common share (Non-GAAP): Basic $ 0.55 $ 0.47 $ 0.50 $ 0.41 $ 0.43 $ 1.51 $ 1.64 Diluted 0.54 0.46 0.49 0.41 0.43 1.50 1.63 Operating Noninterest Income: Noninterest income (GAAP) $ 9,139 $ 7,604 $ 8,380 $ 7,579 $ 691 $ 25,122 $ 14,746 Securities (gains) losses, net — — — — 6,801 — 6,801 Gain on sale of former branch building — (283 ) (1,346 ) — — (1,629 ) — Operating noninterest income (Non-GAAP) $ 9,139 $ 7,321 $ 7,034 $ 7,579 $ 7,492 $ 23,493 $ 21,547 Operating noninterest income (Non-GAAP)/average assets1 0.74 % 0.60 % 0.58 % 0.63 % 0.62 % 0.64 % 0.61 % Operating Noninterest Expense: Noninterest expense (GAAP) $ 30,846 $ 29,201 $ 28,553 $ 29,695 $ 28,516 $ 88,599 $ 83,455 Donation of a former branch location — — — (250 ) — — — Accruals for pending litigation — — — (675 ) — — — Merger related and restructuring expenses — — — — (110 ) — (110 ) Operating noninterest expense (Non-GAAP) $ 30,846 $ 29,201 $ 28,553 $ 28,770 $ 28,406 $ 88,599 $ 83,345 Operating noninterest expense (Non-GAAP)/average assets2 2.50 % 2.41 % 2.35 % 2.39 % 2.36 % 2.42 % 2.34 % Operating Pre-provision Net revenue ("PPNR") Earnings: Net interest income (GAAP) $ 35,032 $ 32,814 $ 31,721 $ 31,517 $ 31,006 $ 99,567 $ 98,563 Operating noninterest income (Non-GAAP) 9,139 7,321 7,034 7,579 7,492 23,493 21,547 Operating noninterest expense (Non-GAAP) (30,846 ) (29,201 ) (28,553 ) (28,770 ) (28,406 ) (88,599 ) (83,345 ) Operating PPNR earnings (Non-GAAP) $ 13,325 $ 10,934 $ 10,202 $ 10,326 $ 10,092 $ 34,461 $ 36,765 Non-GAAP Return Ratios: Operating return on average assets (Non-GAAP)3 0.74 % 0.64 % 0.69 % 0.57 % 0.60 % 0.69 % 0.77 % Operating PPNR return on average assets (Non-GAAP)4 1.08 % 0.90 % 0.84 % 0.86 % 0.84 % 0.94 % 1.03 % Return on average tangible common equity (Non-GAAP)5 9.75 % 8.93 % 10.63 % 7.18 % 2.43 % 9.77 % 9.02 % Operating return on average shareholders' equity (Non-GAAP)6 7.60 % 6.72 % 7.29 % 6.07 % 6.41 % 7.21 % 8.35 % Operating return on average tangible common equity (Non-GAAP)7 9.75 % 8.70 % 9.49 % 7.98 % 8.46 % 9.32 % 11.09 % Operating Efficiency Ratio: Efficiency ratio (GAAP) 69.83 % 72.25 % 71.20 % 75.95 % 89.96 % 71.06 % 73.65 % Adjustment for taxable equivalent yields (0.55 ) % (0.63 ) % (0.17 ) % (0.18 ) % (0.27 ) % (0.45 ) % (0.18 ) % Adjustment for securities gains (losses) — % — % — % — % (15.89 ) % — % (4.17 ) % Adjustment for sale of branch location — % 0.51 % 2.46 % — % — % 0.94 % — % Adjustment for donation of a former branch location — % — % — % (0.64 ) % — % — % — % Adjustment for accruals for pending litigation — % — % — % (1.72 ) % — % — % — % Adjustment for merger related income and costs — % — % — % — % (0.20 ) % — % (0.07 ) % Operating efficiency ratio (Non-GAAP) 69.28 % 72.13 % 73.50 % 73.41 % 73.60 % 71.55 % 69.23 %   1Operating noninterest income (Non-GAAP) is annualized and divided by average assets. 2Operating noninterest expense (Non-GAAP) is annualized and divided by average assets. 3Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets. 4Operating PPNR return on average assets (Non-GAAP) is the annualized operating PPNR earnings (Non-GAAP) divided by average assets. 5Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP). 6Operating return on average shareholders’ equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average equity. 7Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP). SmartFinancial, Inc. and Subsidiary Condensed Consolidated Financial Information - (unaudited) (dollars in thousands) NON-GAAP RECONCILIATIONS Three Months Ended Sep Jun Mar Dec Sep 2024 2024 2024 2023 2023 Tangible Common Equity: Shareholders' equity (GAAP) $ 489,023 $ 472,465 $ 466,796 $ 459,886 $ 446,652 Less goodwill and other intangible assets 105,324 105,929 106,537 107,148 107,792 Tangible common equity (Non-GAAP) $ 383,699 $ 366,536 $ 360,259 $ 352,738 $ 338,860 Average Tangible Common Equity: Average shareholders' equity (GAAP) $ 478,642 $ 466,371 $ 461,148 $ 449,526 $ 445,432 Less average goodwill and other intangible assets 105,701 106,301 106,920 107,551 108,194 Average tangible common equity (Non-GAAP) $ 372,941 $ 360,070 $ 354,228 $ 341,975 $ 337,238 Tangible Book Value per Common Share: Book value per common share (GAAP) $ 28.89 $ 27.91 $ 27.37 $ 27.07 $ 26.28 Adjustment due to goodwill and other intangible assets (6.22) (6.25) (6.25) (6.31) (6.34) Tangible book value per common share (Non-GAAP)1 $ 22.67 $ 21.66 $ 21.12 $ 20.76 $ 19.94 Tangible Common Equity to Tangible Assets: Total Assets (GAAP) $ 4,908,934 $ 4,891,009 $ 4,954,690 $ 4,829,387 $ 4,797,171 Less goodwill and other intangibles 105,324 105,929 106,537 107,148 107,792 Tangible Assets (Non-GAAP) $ 4,803,610 $ 4,785,080 $ 4,848,153 $ 4,722,239 $ 4,689,379 Tangible common equity to tangible assets (Non-GAAP) 7.99% 7.66% 7.43% 7.47% 7.23%   1Tangible book value per share (Non-GAAP) is computed by dividing total shareholders’ equity, less goodwill and other intangible assets, by common shares outstanding.

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