Pictured above – SmartBank officials Billy Carroll and Miller Welborn.
Regular Quarterly Cash Dividend
SmartFinancial, Inc. (“SmartFinancial” or the “Company”; NYSE: SMBK), today announced net income of $11.3 million, or $0.67 per diluted common share, for the first quarter of 2025, compared to net income of $9.4 million, or $0.55 per diluted common share, for the first quarter of 2024, and compared to prior quarter net income of $9.6 million, or $0.57 per diluted common share.
Operating earnings1, which excludes non-recurring income, net of tax adjustments, totaled $11.3 million, or $0.67 per diluted common share, in the first quarter of 2025, compared to $8.4 million, or $0.49 per diluted common share, in the first quarter of 2024, and compared to $9.6 million, or $0.57 per diluted common share, in the fourth quarter of 2024.
Highlights for the First Quarter of 2025:
- Operating earnings of $11.3 million, or $0.67 per diluted common share
- Net organic loan and lease growth of $86 million with 9% annualized quarter-over-quarter increase
- Deposit growth of $122 million or 10% annualized quarter-over-quarter
- Credit quality remains solid with nonperforming assets to total assets of 0.19%
- Five business production team members across Private Banking and Treasury Management hired and onboarded
“Our company delivered positive first quarter results with earnings and growth trends continuing their upward trajectory. Despite the recent volatility and turbulent geopolitical headlines, our markets remain resilient, and we continue to see ample opportunity as demonstrated by our 9% quarterly annualized loan growth. 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%. As we head into 2025, we look forward to serving our clients through all economic environments while enhancing profitability and value for our shareholders,” said Billy Carroll, Smart Bank President & CEO.
SmartFinancial’s Chairman, Miller Welborn says the board is pleased.
“The Board is pleased with the strong start to 2025 both financially and culturally. Tangible book value per share grew 9% annualized and our efficiency ratio continued to improve. Equally exciting are the positive impacts we are seeing from another year of investment in SmartBank’s numerous employee engagement programs. Level Up Leadership, SmartBank Mentorship, the Capstone Project, and other initiatives continue to elevate our associates and company to new levels of success. We look forward to seeing the advancement and growth of all our associates throughout the year to come,” concluded Welborn.
Net interest income and net interest margin
Net interest income was $38.2 million for the first quarter of 2025, compared to $37.8 million for the prior quarter. Average earning assets totaled $4.9 billion, an increase of $185.7 million from the prior quarter. The balances of average earnings assets changed quarter-over-quarter, primarily from an increase in average loans and leases of $111.0 million, average interest-earning cash of $73.2 million and securities of $1.5 million. Average interest-bearing liabilities increased by $179.8 million from the prior quarter, primarily attributable to an increase in average deposits of $180.7 million, offset by a decrease in borrowings of $925 thousand.
The tax equivalent net interest margin was 3.21% for the first quarter of 2025, compared to 3.24% for the prior quarter. The tax equivalent net interest margin was negatively impacted primarily by the decreased yield on interest-earning assets and offset by a decrease 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 5.88% for the first quarter, compared to 5.95% for the prior quarter.
The cost of total deposits for the first quarter of 2025 was 2.37%, compared to 2.43% in the prior quarter. The cost of interest-bearing liabilities was 2.97% for the first quarter, compared to 3.08% in the prior quarter. The cost of average interest-bearing deposits was 2.92% for the first quarter of 2025, compared to 3.02% for the prior quarter, a decrease of 10 basis points.
The following table presents selected interest rates and yields for the periods indicated:
Noninterest Expense
Noninterest expense remained at $32.3 million for the first quarter of 2025 and the prior quarter. The quarter-over-quarter increase was minimal but there were changes within the categories of noninterest expense. The primary increases were in professional services related to additional auditing fees and other non-interest expenses related to higher operational cost, offset by lower salaries and employee benefits incentive accruals and other real estate and loan related expenses from write downs on repossessed assets at the Company’s equipment leasing subsidiary taken in the prior quarter.
The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):
Income Tax Expense
Income tax expense was $2.3 million for the first quarter of 2025, a decrease of $441 thousand, compared to $2.7 million for the prior quarter. The decrease is due to a lower effective tax rate related to SmartBank’s Real Estate Investment Trust.
Balance Sheet Trends
Total assets at March 31, 2025, were $5.41 billion compared to $5.28 billion at December 31, 2024. The $135.3 million increase is primarily attributable to increases in loans and leases of $85.9 million, cash and cash equivalents of $35.4 million and securities of $16.0 million.
Total liabilities were $4.91 billion at March 31, 2025, compared to $4.78 billion at December 31, 2024, an increase of $120.8 million. Total deposits increased $122.2 million, which was driven primarily by increases in money market deposits of $92.3 million, other time deposits of $54.9 million, interest-bearing demand deposits of $48.3 million and the issuance of brokered deposits of $7.9 million, offset by a decline in noninterest demand deposits of $81.3 million.
Shareholders’ equity at March 31, 2025, totaled $505.9 million, an increase of $14.5 million, from December 31, 2024. The increase in shareholders’ equity was primarily driven by net income of $11.3 million for the three months ended March 31, 2025, and a positive change of $4.0 million in accumulated other comprehensive loss, offset by dividends paid of $1.4 million. Tangible book value per share[1] was $23.61 at March 31, 2025, compared to $22.85 at December 31, 2024. Tangible common equity1 as a percentage of tangible assets1 was 7.57% at March 31, 2025, compared with 7.48% at December 31, 2024.
The following table presents selected balance sheet information for the periods indicated (dollars in thousands):
Board of Directors Declares Dividend
On April 17, 2025, the board of directors of SmartFinancial declared a quarterly cash dividend of $0.08 per share of SmartFinancial common stock payable on May 19, 2025, to shareholders of record as of the close of business on May 2, 2025.
Conference Call Information
SmartFinancial issued this earnings release for the first quarter of 2025 on Monday, April 21, 2025, and will host a conference call on Tuesday, April 22, 2025, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and entering the access code, 348422.
A replay of the conference call will be available through June 21, 2025, by dialing (866) 813-9403 or (929) 458-6194 and entering the access code 167602.
Conference call materials will be published on the Company’s webpage at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 a.m. ET before the conference call.
Photo courtesy of Smart Bank.
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