In This Article:
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Net Income: $9.6 million for the quarter, or $0.57 per diluted share.
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Tangible Book Value: $22.85 per share including AOCI impacts; $24.25 excluding AOCI impacts.
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Loan Growth: 20% annualized pace for Q4; 13.4% year-over-year.
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Deposit Growth: Approximately 34% annualized growth, with core deposit growth near 30% annualized.
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Total Revenue: $46.8 million.
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Non-Interest Expenses: Over $32 million.
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Net Interest Margin: Expanded by 13 basis points to 3.24%.
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Loan Portfolio Yield: 6.04% including fees; 5.95% without fees.
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Non-Performing Loans: 20 basis points of total loans.
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Allowance for Credit Losses: 96 basis points of total loans.
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Operating Non-Interest Income: $9.0 million.
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Provision Expense for Credit Losses: $2.1 million.
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Capital Ratios: Total risk-based capital at 11.2%; TC ratio decreased to 7.5%.
Release Date: January 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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SmartFinancial Inc (NYSE:SMBK) reported a strong net income of $9.6 million for the fourth quarter, translating to $0.57 per diluted share.
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The company achieved impressive loan growth, with a 20% annualized pace for Q4 and 13.4% year-over-year growth.
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Deposit growth was robust, with a quarter-over-quarter annualized growth rate of approximately 34%, even after excluding temporary noninterest-bearing funding.
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Net interest margin expanded by 13 basis points to 3.24%, driven by favorable loan originations and deposit repositioning efforts.
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The company maintained strong credit quality, with nonperforming loans at 20 basis points and a steady allowance for credit losses at 96 basis points of total loans.
Negative Points
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Non-interest expenses increased slightly to over $32 million, partly due to higher performance-based incentive accruals.
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Investment services revenue decreased by $500,000, primarily due to lower volume during the quarter.
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The company's consolidated TC ratio decreased by 50 basis points to 7.5%, indicating a slight leveraging of capital ratios.
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The weighted average cost of nonbrokered deposit production was relatively high at 3.37%.
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There is an expectation of a slower pace of margin expansion in 2025 compared to the past two quarters.
Q & A Highlights
Q: How did SmartFinancial manage to maintain stable loan yields despite recent rate cuts? A: Ronald Gorczynski, CFO, explained that the stability was achieved through a combination of factors, including loan production yields remaining above 7%, excess loan prepayments, and draws from unfunded lines of credit at higher rates. However, he anticipates a slight decline in loan yields in early 2025.