SmartFinancial Announces Results for the Fourth Quarter 2025

KNOXVILLE, Tenn.--( BUSINESS WIRE)--SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NYSE: SMBK), today announced net income of $13.7 million, or $0.81 per diluted common share, for the fourth quarter of 2025, compared to net income of $9.6 million, or $0.57 per diluted common share, for the fourth quarter of 2024, and compared to prior quarter net income of $13.7 million, or $0.81 per diluted common share. Operating earnings 1, which excludes non-recurring income and expenses, net of tax adjustments, totaled $13.7 million, or $0.81 per diluted common share, in the fourth quarter of 2025, compared to $9.6 million, or $0.57 per diluted common share, in the fourth quarter of 2024, and compared to $14.5 million, or $0.86 per diluted common share, in the third quarter of 2025.

Highlights for the Fourth Quarter of 2025

Billy Carroll, President & CEO, stated: "2025 marked a year of tremendous momentum build and overall improvement for our company. We generated approximately 11% positive operating leverage in 2025 capped off by our seventh consecutive quarter of positive operating leverage in Q4. The year was highlighted by approximately 12% organic loan growth, 14% organic deposit growth excluding brokered deposits and tangible book value per common share 1 rose 17%. Overall, a fantastic year for our company paving the way for an even brighter 2026. I want to thank all of our Associates whose tireless work and dedication make SmartBank a great place to work and do business. They are the driving force behind our success.”

SmartFinancial's Chairman, Miller Welborn, concluded: “2025 was an exceptional year marked by growth, profitability, and continued improvement. The Board is extremely pleased with the Company’s ongoing financial progress, which is particularly impressive considering the range of strategic initiatives completed during the year. Operational excellence and a solid foundation remain essential for sustained success, and our Associates consistently demonstrate commitment in every area. We appreciate your contributions in making SmartBank an outstanding organization and valued partner for our stakeholders.”

Net Interest Income and Net Interest Margin

Net interest income was $45.1 million for the fourth quarter of 2025, compared to $42.4 million for the prior quarter. Average earning assets totaled $5.34 billion, an increase of $112.3 million from the prior quarter. The balances of average earnings assets increased quarter-over-quarter, primarily from an increase in average loans and leases of $124.0 million and average securities of $32.7 million, offset by a decrease in average interest-earning cash of $44.3 million. Average interest-bearing liabilities increased by $18.6 million from the prior quarter, primarily attributable to an increase in average interest-bearing deposits of $6.0 million and average subordinated debt of $13.9 million, offset by a decrease in borrowings of $1.3 million.

The tax equivalent net interest margin was 3.38% for the fourth quarter of 2025, up from 3.25% for the prior quarter. This increase is primarily related to declines in deposit costs, outpacing a modest decrease in asset yields. The yield on loans and leases, excluding loan fees, FTE was 6.00% for the fourth quarter of 2025, compared to 6.05% for the prior quarter.

1 Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliations.

The cost of total deposits for the fourth quarter of 2025 was 2.26%, compared to 2.44% in the prior quarter. The cost of interest-bearing liabilities was 2.90% for the fourth quarter of 2025, compared to 3.07% in the prior quarter. The cost of average interest-bearing deposits was 2.79% for the fourth quarter of 2025, compared to 2.98% for the prior quarter, a decrease of 19 basis points.

The following table presents selected interest rates and yields for the periods indicated:

Three Months Ended

Dec

Sep

Increase

Selected Interest Rates and Yields

2025

(Decrease)

Yield on loans and leases, excluding loan fees, FTE

6.00

6.05

(0.05

)

Yield on loans and leases, FTE

6.08

6.14

(0.06

)

Yield on earning assets, FTE

5.65

5.68

(0.03

)

Cost of interest-bearing deposits

2.79

2.98

(0.19

)

Cost of total deposits

2.26

2.44

(0.18

)

Cost of interest-bearing liabilities

2.90

3.07

(0.17

)

Net interest margin, FTE

3.38

3.25

0.13

Provision for Credit Losses on Loans and Leases and Credit Quality

At December 31, 2025, the allowance for credit losses was $40.9 million. The allowance for credit losses to total loans and leases was 0.94% as of December 31, 2025, and 0.93% as of September 30, 2025.

The following table presents detailed information related to the provision for credit losses for the periods indicated (dollars in thousands):

Three Months Ended

Dec

Sep

Increase

Provision for Credit Losses on Loans and Leases Rollforward

2025

(Decrease)

Beginning balance

39,074

39,776

(702

)

Charge-offs

(1,993

)

(1,145

)

(848

)

Recoveries

101

Net charge-offs

(1,892

)

(1,053

)

(839

)

Provision for credit losses (1)

3,724

351

3,373

Ending balance

40,906

39,074

1,832

Allowance for credit losses to total loans and leases, gross

0.94

0.93

0.01

(1)

The current quarter-ended and prior quarter-ended excludes an unfunded commitments provision of $408 thousand and a release of $124 thousand, respectively. At December 31, 2025, and September 30, 2025, the unfunded commitment liability totaled $3.6 million and $3.2 million, respectively.

Nonperforming loans and leases as a percentage of total loans and leases was 0.22% as of December 31, 2025, and 0.24% as of September 30, 2025. 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 0.22% as of December 31, 2025, and September 30, 2025.

The following table presents detailed information related to credit quality for the periods indicated (dollars in thousands):

Three Months Ended

Dec

Sep

Increase

Credit Quality

2025

(Decrease)

Nonaccrual loans and leases

9,442

9,970

(528

)

Loans and leases past due 90 days or more and still accruing

129

(129

)

Total nonperforming loans and leases

9,442

10,099

(657

)

Other real estate owned

Other repossessed assets

3,248

2,444

804

Total nonperforming assets

12,690

12,543

147

Nonperforming loans and leases to total loans and leases, gross

0.22

0.24

(0.02

)

Nonperforming assets to total assets

0.22

Noninterest Income

Noninterest income decreased $418 thousand to $8.2 million for the fourth quarter of 2025, compared to $8.6 million for the prior quarter. The fourth quarter decrease was attributable to the reduction of insurance commissions and the gain on sale of SBK Insurance (“SBKI”) in the prior quarter. Additionally, in the prior quarter, there was a pre-tax loss of $3.9 million on the sale of $85 million of available-for-sale securities. These changes were offset by higher capital markets’ income included in other noninterest income.

The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands):

Three Months Ended

Dec

Sep

Increase

Noninterest Income

2025

(Decrease)

Service charges on deposit accounts

1,828

1,831

)

Loss on sale of securities, net

(3,715

)

3,715

Mortgage banking income

837

709

128

Investment services

1,683

1,690

)

Insurance commissions

1,049

(1,049

)

Interchange and debit card transaction fees

1,375

1,338

Gain on sale of SBKI

3,955

(3,955

)

Other

2,496

1,780

716

Total noninterest income

8,219

8,637

(418

)

Noninterest Expense

Noninterest expense decreased $1.4 million to $32.5 million for the fourth quarter of 2025, compared to $33.9 million for the prior quarter. The fourth quarter’s decrease was primarily attributable to a decrease in restructuring expenses associated with the sale of SBKI.

The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):

Three Months Ended

Dec

Sep

Increase

Noninterest Expense

2025

(Decrease)

Salaries and employee benefits

19,917

19,544

373

Occupancy and equipment

3,388

3,468

(80

)

FDIC insurance

1,025

Other real estate and loan related expenses

858

969

(111

)

Advertising and marketing

393

454

(61

)

Data processing and technology

2,413

2,594

(181

)

Professional services

1,132

1,123

Amortization of intangibles

479

536

(57

)

Restructuring expenses

1,310

(1,294

)

Other

2,850

2,846

Total noninterest expense

32,471

33,869

(1,398

)

Income Tax Expense

Income tax expense was $3.0 million for the fourth quarter of 2025, a decrease of $278 thousand, compared to $3.3 million for the prior quarter.

Balance Sheet Trends

Total assets at December 31, 2025, were $5.86 billion compared to $5.28 billion at December 31, 2024. The $584.9 million increase is primarily attributable to increases in loans and leases of $457.2 million, cash and cash equivalents of $76.8 million, securities of $53.0 million, loans held for sale of $4.9 million, bank owned life insurance of $3.6 million and other investments of $1.7 million, offset by a decrease in goodwill and other intangibles of $9.4 million, primarily associated with the sale of SBKI, and a decrease in premises and equipment of $2.7 million.

Total liabilities were $5.31 billion at December 31, 2025, compared to $4.78 billion at December 31, 2024, an increase of $523.9 million. Total deposits increased $466.3 million, which was driven primarily by increases in money market deposits of $234.1 million, other time deposits of $185.9 million, interest-bearing demand deposits of $109.0 million and noninterest demand deposits of $97.4 million, offset by a decline in brokered deposits of $160.0 million. In addition, subordinated debt increased $59.0 million as a result of issuing $100.0 million in new subordinated debt and retiring the existing $40.0 million of subordinated debt.

Shareholders' equity at December 31, 2025, totaled $552.5 million, an increase of $61.0 million, from December 31, 2024. The increase in shareholders' equity was primarily driven by net income of $50.3 million for the twelve months ending December 31, 2025, and a reduction of $14.4 million in accumulated other comprehensive loss, offset by dividends paid of $5.4 million. Tangible book value per common share 2 was $26.85 at December 31, 2025, compared to $22.85 at December 31, 2024. Tangible common equity 1 as a percentage of tangible assets 1 was 7.93% at December 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):

Dec

Increase

Selected Balance Sheet Information

2025

2024

(Decrease)

Total assets

5,860,810

5,275,904

584,906

Total liabilities

5,308,318

4,784,443

523,875

Total equity

552,492

491,461

61,031

Securities

662,003

608,987

53,016

Loans and leases

4,363,582

3,906,340

457,242

Deposits

5,152,789

4,686,483

466,306

Borrowings

3,009

8,135

(5,126

)

Conference Call Information

SmartFinancial issued this earnings release for the fourth quarter of 2025 on Tuesday, January 20, 2026, and will host a conference call on Wednesday, January 21, 2026, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 470-1428 or (646) 844-6383 and enter the access code, 680807. A replay of the conference call will be available through March 21, 2026, by dialing (866) 813-9403 or (929) 458-6194 and enter the access code, 497919. 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.

Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliations.

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.

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 PPNR earnings, operating noninterest income and operating noninterest expense 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. Operating efficiency ratio is the quotient of operating noninterest expense divided by the sum of net interest income adjusted for taxable equivalent yields plus operating noninterest income. 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,

(1)

risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively;

(2)

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;

(3)

general risks related to our disposition, merger and acquisition activity, including risks associated with our pursuit of future acquisitions or sales;

(4)

changes in management’s plans for the future;

(5)

prevailing, or changes in, economic or political conditions (including those resulting from the current administration and Congress), 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;

(6)

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);

(7)

tariffs or trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services);

(8)

uncertain duration of trade conflicts and the magnitude of the impact that proposed tariffs may have on our customers’ businesses;

(9)

increased technology and cybersecurity risks, including generative artificial intelligence risks;

(10)

the impact of a failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting us and our customers;

(11)

credit risk associated with our lending activities;

(12)

changes in loan demand, real estate values, or competition;

(13)

developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance;

(14)

changes in accounting principles, policies, or guidelines;

(15)

changes in applicable laws, rules, or regulations;

(16)

adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions;

(17)

potential impacts of any adverse developments in the banking industry, including the impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto;

(18)

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;

(19)

the effects of war or other conflicts;

(20)

the impact of government actions or inactions, including a prolonged shutdown of the federal government; and

(21)

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

Dec

Sep

Jun

Mar

Dec

2025

2024

Assets:

Cash and cash equivalents

464,417

557,127

365,096

422,984

387,570

Securities available-for-sale, at fair value

539,882

511,095

502,150

499,445

482,328

Securities held-to-maturity, at amortized cost

122,121

123,364

124,520

125,576

126,659

Other investments

16,441

14,888

14,713

14,371

14,740

Loans held for sale

10,865

9,855

5,484

3,843

5,996

Loans and leases

4,363,582

4,222,369

4,124,062

3,992,207

3,906,340

Less: Allowance for credit losses

(40,906

)

(39,074

)

(39,776

)

(38,175

)

(37,423

)

Loans and leases, net

4,322,676

4,183,295

4,084,286

3,954,032

3,868,917

Premises and equipment, net

88,387

89,250

90,204

90,708

91,093

Other real estate owned

—

144

179

Goodwill and other intangibles, net

95,328

95,807

103,588

104,154

104,723

Bank owned life insurance

119,525

118,610

117,697

116,805

115,917

Other assets

81,168

81,692

82,981

79,155

77,782

Total assets

5,860,810

5,784,983

5,490,863

5,411,217

5,275,904

Liabilities:

Deposits:

Noninterest-bearing demand

1,062,918

931,477

906,965

884,294

965,552

Interest-bearing demand

945,716

929,454

843,820

885,063

836,731

Money market and savings

2,273,612

2,218,313

2,124,623

2,131,828

2,039,560

Time deposits

870,543

971,653

996,712

907,474

844,640

Total deposits

5,152,789

5,050,897

4,872,120

4,808,659

4,686,483

Borrowings

3,009

1,301

6,966

7,610

8,135

Subordinated debt

98,662

138,604

39,726

39,705

39,684

Other liabilities

53,858

55,699

52,924

49,302

50,141

Total liabilities

5,308,318

5,246,501

4,971,736

4,905,276

4,784,443

Shareholders' Equity:

Common stock

17,029

17,028

17,018

16,926

Additional paid-in capital

295,950

295,742

295,209

294,736

294,269

Retained earnings

248,719

236,380

224,061

213,721

203,824

Accumulated other comprehensive loss

(9,319

)

(10,781

)

(17,274

)

(19,647

)

(23,671

)

Total shareholders' equity attributable to SmartFinancial Inc. and Subsidiary

552,379

538,369

519,014

505,828

491,348

Non-controlling interest - preferred stock of subsidiary

113

Total shareholders' equity

552,492

538,482

519,127

505,941

491,461

Total liabilities & shareholders' equity

5,860,810

5,784,983

5,490,863

5,411,217

5,275,904

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands except share and per share data)

Three Months Ended

Year Ended

Dec

Sep

June

Mar

Dec

2025

2024

2025

2024

Interest income:

Loans and leases, including fees

65,573

64,282

61,049

57,762

57,951

248,666

213,562

Investment securities:

Taxable

5,662

4,876

4,848

4,775

5,050

20,161

20,151

Tax-exempt

536

441

395

354

351

1,726

1,406

Federal funds sold and other earning assets

3,854

4,919

3,161

3,485

2,744

15,419

16,000

Total interest income

75,625

74,518

69,453

66,376

66,096

285,972

251,119

Interest expense:

Deposits

28,646

30,464

28,301

27,335

27,437

114,747

109,260

Borrowings

155

1,075

Subordinated debt

1,884

1,610

739

733

787

4,966

3,434

Total interest expense

30,531

32,088

29,110

28,138

28,313

119,868

113,769

Net interest income

45,094

42,430

40,343

38,238

37,783

166,104

137,350

Provision for credit losses

4,132

227

2,411

979

2,135

7,750

5,153

Net interest income after provision for credit losses

40,962

42,203

37,932

37,259

35,648

158,354

132,197

Noninterest income:

Service charges on deposit accounts

1,828

1,831

1,766

1,736

1,778

7,161

6,862

(Loss) gain on sale of securities, net

—

(3,715

)

—

(3,719

)

Mortgage banking

837

709

633

493

541

2,673

1,579

Investment services

1,683

1,690

1,440

1,769

1,382

6,582

5,945

Insurance commissions

—

1,049

1,554

1,412

1,832

4,016

5,696

Interchange and debit card transaction fees

1,375

1,338

1,342

1,220

1,332

5,275

5,277

Gain on sale of SBKI

—

3,955

—

3,955

—

Other

2,496

1,780

2,167

1,967

2,101

8,409

8,729

Total noninterest income

8,219

8,637

8,898

8,597

9,030

34,352

34,152

Noninterest expense:

Salaries and employee benefits

19,917

19,544

19,602

19,234

19,752

78,297

72,100

Occupancy and equipment

3,388

3,468

3,432

3,397

3,473

13,686

13,617

FDIC insurance

1,025

992

960

825

4,002

3,390

Other real estate and loan related expense

858

969

757

658

1,241

3,242

2,823

Advertising and marketing

393

454

390

382

397

1,619

1,321

Data processing and technology

2,413

2,594

2,651

2,657

2,495

10,316

9,930

Professional services

1,132

1,123

1,153

1,368

1,017

4,775

4,207

Amortization of intangibles

479

536

566

569

601

2,150

2,425

Restructuring expenses

1,310

—

1,326

—

Other

2,850

2,846

3,026

3,071

2,490

11,792

11,077

Total noninterest expense

32,471

33,869

32,569

32,296

32,291

131,205

120,890

Income before income taxes

16,710

16,971

14,261

13,560

12,387

61,501

45,459

Income tax expense

3,007

3,285

2,556

2,306

2,747

11,154

9,318

Net income

13,703

13,686

11,705

11,254

9,640

50,347

36,141

Earnings per common share:

Basic

0.82

0.70

0.67

0.58

3.00

2.16

Diluted

0.81

0.69

0.67

0.57

2.98

2.14

Weighted average common shares outstanding:

Basic

16,788,065

16,781,236

16,778,988

16,767,535

16,729,509

16,779,019

16,768,956

Diluted

16,922,482

16,908,920

16,878,736

16,872,097

16,863,780

16,896,519

16,878,456

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

Three Months Ended

December 31, 2025

September 30, 2025

December 31, 2024

Average

Yield/

Average

Yield/

Average

Yield/

Balance

Interest

Cost

Balance

Interest

Cost

Balance

Interest

Cost

Assets:

Loans and leases, including fees 1

4,295,446

65,807

6.08

4,171,444

64,526

6.14

3,830,301

58,188

6.04

Taxable securities

580,256

5,662

3.87

556,894

4,876

3.47

554,152

5,050

3.63

Tax-exempt securities 2

79,149

678

3.40

69,843

558

3.17

63,309

444

2.79

Federal funds sold and other earning assets

383,882

3,854

3.98

428,209

4,919

4.56

233,793

2,745

4.67

Total interest-earning assets

5,338,733

76,001

5.65

5,226,390

74,879

5.68

4,681,555

66,427

5.64

Noninterest-earning assets

400,618

408,560

407,695

Total assets

5,739,351

5,634,950

5,089,250

Liabilities and Shareholders’ Equity:

Interest-bearing demand deposits

902,505

3,817

1.68

869,690

4,048

1.85

826,750

3,775

1.82

Money market and savings deposits

2,254,175

16,017

2.82

2,186,245

16,693

3.03

1,923,265

14,830

3.07

Time deposits

911,044

8,812

3.84

1,005,800

9,723

3.84

861,211

8,832

4.08

Total interest-bearing deposits

4,067,724

28,646

2.79

4,061,735

30,464

2.98

3,611,226

27,437

3.02

Borrowings

3,024

0.13

4,351

1.28

9,145

3.87

Subordinated debt

99,062

1,884

7.55

85,113

1,610

7.50

39,672

787

7.89

Total interest-bearing liabilities

4,169,810

30,531

2.90

4,151,199

32,088

3.07

3,660,043

28,313

3.08

Noninterest-bearing deposits

964,612

900,079

889,151

Other liabilities

58,440

57,843

50,884

Total liabilities

5,192,862

5,109,121

4,600,078

Shareholders' equity

546,489

525,829

489,172

Total liabilities and shareholders' equity

5,739,351

5,634,950

5,089,250

Net interest income, taxable equivalent

45,470

42,791

38,114

Interest rate spread

2.74

2.62

2.57

Tax equivalent net interest margin

3.38

3.25

3.24

Percentage of average interest-earning assets to average interest-bearing liabilities

128.03

125.90

127.91

Percentage of average equity to average assets

9.52

9.33

9.61

1 Yields computed on tax-exempt loans on a tax equivalent basis include $235 thousand, $244 thousand, and $237 thousand of taxable equivalent income for the quarters ended December 31, 2025, September 30, 2025, and December 31, 2024, respectively.

2 Yields computed on tax-exempt instruments on a tax equivalent basis include $142 thousand, $117 thousand, and $93 thousand of taxable equivalent income for the quarters ended December 31, 2025, September 30, 2025, and December 31, 2024, respectively.

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

Year Ended

December 31, 2025

December 31, 2024

Average

Yield/

Average

Yield/

Balance

Interest

Cost

Balance

Interest

Cost

Assets:

Loans and leases, including fees 1

4,115,793

249,636

6.07

3,607,558

214,310

5.94

Taxable securities

563,978

20,161

3.57

580,001

20,151

3.47

Tax-exempt securities 2

69,620

2,185

3.14

63,679

1,780

2.80

Federal funds sold and other earning assets

349,105

15,419

4.42

300,081

16,000

5.33

Total interest-earning assets

5,098,496

287,401

5.64

4,551,319

252,241

5.54

Noninterest-earning assets

405,205

388,267

Total assets

5,503,701

4,939,586

Liabilities and Shareholders’ Equity:

Interest-bearing demand deposits

863,772

15,394

1.78

932,598

21,074

2.26

Money market and savings deposits

2,152,812

63,535

2.95

1,913,673

64,116

3.35

Time deposits

928,404

35,818

3.86

623,652

24,070

3.86

Total interest-bearing deposits

3,944,988

114,747

2.91

3,469,923

109,260

3.15

Borrowings

5,826

155

2.66

21,719

1,075

4.95

Subordinated debt

66,110

4,966

7.51

41,184

3,434

8.34

Total interest-bearing liabilities

4,016,924

119,868

2.98

3,532,826

113,769

3.22

Noninterest-bearing deposits

911,988

883,923

Other liabilities

54,300

48,949

Total liabilities

4,983,212

4,465,698

Shareholders' equity

520,489

473,888

Total liabilities and shareholders' equity

5,503,701

4,939,586

Net interest income, taxable equivalent

167,533

138,472

Interest rate spread

2.65

2.32

Tax equivalent net interest margin

3.29

3.04

Percentage of average interest-earning assets to average interest-bearing liabilities

126.93

128.83

Percentage of average equity to average assets

9.46

9.59

1 Yields computed on tax-exempt loans on a tax equivalent basis include $970 thousand and $748 thousand of taxable equivalent income for the year ended December 31, 2025, and 2024, respectively.

2 Yields computed on tax-exempt instruments on a tax equivalent basis include $459 thousand and $374 thousand of taxable equivalent income for the year ended December 31, 2025, and 2024, respectively.

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

As of and for The Three Months Ended

Dec

Sep

Jun

Mar

Dec

2025

2024

Composition of Loans and Leases:

Commercial real estate:

Non-owner occupied

1,196,758

1,136,080

1,114,133

1,117,392

1,080,404

Owner occupied

1,022,871

1,012,088

958,989

885,396

867,678

Commercial real estate, total

2,219,629

2,148,168

2,073,122

2,002,788

1,948,082

Consumer real estate

834,626

811,150

803,270

784,602

741,836

Construction & land development

419,176

390,691

391,155

357,393

361,735

Commercial & industrial

817,595

794,751

778,754

768,454

775,620

Leases

55,422

60,301

62,495

64,208

64,878

Consumer and other

17,134

17,308

15,266

14,762

14,189

Total loans and leases

4,363,582

4,222,369

4,124,062

3,992,207

3,906,340

Asset Quality and Additional Loan Data:

Nonperforming loans and leases

9,442

10,099

7,921

7,807

7,872

Other real estate owned

—

144

179

Other repossessed assets

3,248

2,444

2,397

2,414

2,037

Total nonperforming assets

12,690

12,543

10,462

10,365

10,088

Modified loans and leases 1 not included in nonperforming loans and leases

219

1,783

1,660

1,978

3,989

Net charge-offs to average loans and leases (annualized)

0.18

0.10

0.01

0.02

Allowance for credit losses to loans and leases

0.94

0.93

0.96

Nonperforming loans and leases to total loans and leases, gross

0.22

0.24

0.19

0.20

Nonperforming assets to total assets

0.22

0.19

Capital Ratios:

Equity to Assets

9.43

9.31

9.45

9.35

9.32

Tangible common equity to tangible assets (Non-GAAP) 2

7.93

7.78

7.71

7.57

7.48

SmartFinancial, Inc. 3

Tier 1 leverage

8.30

8.21

8.25

8.16

8.29

Common equity Tier 1

9.80

9.85

9.67

9.79

9.76

Tier 1 capital

9.80

9.85

9.67

9.79

9.76

Total capital

12.67

13.31

11.04

11.18

11.10

SmartBank 3

Tier 1 leverage

9.71

9.59

8.88

8.76

8.94

Common equity Tier 1

11.51

11.56

10.41

10.51

Tier 1 capital

11.51

11.56

10.41

10.51

Total capital

12.32

12.37

11.25

11.35

11.30

1Borrowers that have experienced financial difficulty. Effective as of December 31, 2025, the Call Report instructions were changed for institutions to report loan modifications to borrowers experiencing financial difficulty for a 12-month period after the modification. This change is reflected in the December 31, 2025, information.

2Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.

3 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

Three Months Ended

Year Ended

Dec

Sep

Jun

Mar

Dec

2025

2024

2025

2024

Selected Performance Ratios (Annualized):

Return on average assets

0.95

0.96

0.88

0.87

0.75

0.91

0.73

Return on average shareholders' equity

9.95

10.33

9.19

9.17

7.84

9.67

7.63

Return on average tangible common equity¹

12.06

12.79

11.53

11.60

9.99

12.01

9.82

Noninterest income / average assets

0.57

0.61

0.67

0.66

0.71

0.62

0.69

Noninterest expense / average assets

2.24

2.38

2.44

2.48

2.52

2.38

2.45

Efficiency ratio

60.91

66.32

66.14

68.96

68.98

65.45

70.49

Operating Selected Performance Ratios (Annualized):

Operating return on average assets 1

0.95

1.02

0.88

0.87

0.75

0.93

0.71

Operating PPNR return on average assets 1

1.44

1.29

1.25

1.12

1.13

1.28

0.99

Operating return on average shareholders' equity 1

9.96

10.92

9.19

9.17

7.80

9.83

7.36

Operating return on average tangible common equity 1

12.07

13.53

11.53

11.60

9.94

12.20

9.48

Operating efficiency ratio 1

60.45

63.61

65.66

68.46

68.58

64.41

70.72

Operating noninterest income / average assets 1

0.57

0.59

0.67

0.66

0.70

0.62

0.66

Operating noninterest expense / average assets 1

2.24

2.29

2.44

2.48

2.52

2.36

2.45

Selected Interest Rates and Yields:

Yield on loans and leases, excluding loan fees, FTE

6.00

6.05

5.99

5.88

5.95

5.98

5.86

Yield on loans and leases, FTE

6.08

6.14

6.07

5.97

6.04

6.07

5.94

Yield on earning assets, FTE

5.65

5.68

5.65

5.56

5.64

5.54

Cost of interest-bearing deposits

2.79

2.98

2.95

2.92

3.02

2.91

3.15

Cost of total deposits

2.26

2.44

2.39

2.37

2.43

2.36

2.51

Cost of interest-bearing liabilities

2.90

3.07

2.99

2.97

3.08

2.98

3.22

Net interest margin, FTE

3.38

3.25

3.29

3.21

3.24

3.29

3.04

Per Common Share:

Net income, basic

0.82

0.70

0.67

0.58

3.00

2.16

Net income, diluted

0.81

0.69

0.67

0.57

2.98

2.14

Operating earnings, basic¹

0.82

0.86

0.70

0.67

0.57

3.05

2.08

Operating earnings, diluted¹

0.81

0.86

0.69

0.67

0.57

3.03

2.07

Book value per common share

32.44

31.62

30.51

29.73

29.04

32.44

29.04

Tangible book value per common share¹

26.85

26.00

24.42

23.61

22.85

26.85

22.85

Common shares outstanding

17,029,317

17,028,001

17,017,547

16,925,672

17,029,317

16,925,672

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

Year Ended

Dec

Sep

Jun

Mar

Dec

2025

2024

2025

2024

Operating Earnings:

Net income (GAAP)

13,703

13,686

11,705

11,254

9,640

50,347

36,141

Noninterest income:

Securities losses (gains), net

—

3,715

—

(64

)

3,719

(64

)

Gain on sale of former branch building

—

(1,629

)

Gain on sale of SBKI

—

(3,955

)

—

(3,955

)

—

Noninterest expenses:

Restructuring expenses

1,310

—

1,326

—

Income taxes:

Income tax effect of adjustments

)

(276

)

—

(282

)

437

Operating earnings (Non-GAAP)

13,715

14,480

11,708

11,254

9,593

51,155

34,885

Operating earnings per common share (Non-GAAP):

Basic

0.82

0.86

0.70

0.67

0.57

3.05

2.08

Diluted

0.81

0.86

0.69

0.67

0.57

3.03

2.07

Operating Noninterest Income:

Noninterest income (GAAP)

8,219

8,637

8,898

8,597

9,030

34,352

34,152

Securities losses (gains), net

—

3,715

—

(64

)

3,719

(64

)

Gain on sale of former branch building

—

(1,629

)

Gain on sale of SBKI

—

(3,955

)

—

(3,955

)

—

Operating noninterest income (Non-GAAP)

8,219

8,397

8,902

8,597

8,966

34,116

32,459

Operating noninterest income (Non-GAAP)/average assets 1

0.57

0.59

0.67

0.66

0.70

0.62

0.66

Operating Noninterest Expense:

Noninterest expense (GAAP)

32,471

33,869

32,569

32,296

32,291

131,205

120,890

Restructuring expenses

(16

)

(1,310

)

—

(1,326

)

—

Operating noninterest expense (Non-GAAP)

32,455

32,559

32,569

32,296

32,291

129,879

120,890

Operating noninterest expense (Non-GAAP)/average assets 2

2.24

2.29

2.44

2.48

2.52

2.36

2.45

Operating Pre-provision Net revenue ("PPNR") Earnings:

Net interest income (GAAP)

45,094

42,430

40,343

38,238

37,783

166,104

137,350

Operating noninterest income (Non-GAAP)

8,219

8,397

8,902

8,597

8,966

34,116

32,459

Operating noninterest expense (Non-GAAP)

(32,455

)

(32,559

)

(32,569

)

(32,296

)

(32,291

)

(129,879

)

(120,890

)

Operating PPNR earnings (Non-GAAP)

20,858

18,268

16,676

14,539

14,458

70,341

48,919

Non-GAAP Return Ratios:

Operating return on average assets (Non-GAAP) 3

0.95

1.02

0.88

0.87

0.75

0.93

0.71

Operating PPNR return on average assets (Non-GAAP) 4

1.44

1.29

1.25

1.12

1.13

1.28

0.99

Return on average tangible common equity (Non-GAAP) 5

12.06

12.79

11.53

11.60

9.99

12.01

9.82

Operating return on average shareholders' equity (Non-GAAP) 6

9.96

10.92

9.19

9.17

7.80

9.83

7.36

Operating return on average tangible common equity (Non-GAAP) 7

12.07

13.53

11.53

11.60

9.94

12.20

9.48

Operating Efficiency Ratio:

Efficiency ratio (GAAP)

60.91

66.32

66.14

68.96

68.98

65.45

70.49

Adjustment for taxable equivalent yields

(0.43

)

(0.47

)

(0.47

)

(0.50

)

(0.49

)

(0.47

)

(0.46

)

Adjustment for securities gains (losses)

—

(4.50

)

(0.01

)

—

0.09

(1.19

)

0.03

Adjustment for sale of branch location

—

0.66

Adjustment for sale of SBKI

—

5.57

—

1.32

—

Adjustment for restructuring cost

(0.02

)

(3.31

)

—

(0.70

)

—

Operating efficiency ratio (Non-GAAP)

60.45

63.61

65.66

68.46

68.58

64.41

70.72

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

Dec

Sep

Jun

Mar

Dec

2025

2024

Tangible Common Equity:

Shareholders' equity (GAAP)

552,492

538,482

519,127

505,941

491,461

Less goodwill and other intangible assets

95,328

95,807

103,588

104,154

104,723

Tangible common equity (Non-GAAP)

457,164

442,675

415,539

401,787

386,738

Average Tangible Common Equity:

Average shareholders' equity (GAAP)

546,489

525,829

511,067

497,980

489,172

Less average goodwill and other intangible assets

95,619

101,326

103,936

104,504

105,093

Average tangible common equity (Non-GAAP)

450,870

424,503

407,131

393,476

384,079

Tangible Book Value per Common Share:

Book value per common share (GAAP)

32.44

31.62

30.51

29.73

29.04

Adjustment due to goodwill and other intangible assets

(5.59

)

(5.63

)

(6.09

)

(6.12

)

(6.19

)

Tangible book value per common share (Non-GAAP) 1

26.85

26.00

24.42

23.61

22.85

Tangible Common Equity to Tangible Assets:

Total Assets (GAAP)

5,860,810

5,784,983

5,490,863

5,411,217

5,275,904

Less goodwill and other intangibles

95,328

95,807

103,588

104,154

104,723

Tangible Assets (Non-GAAP)

5,765,482

5,689,176

5,387,275

5,307,063

5,171,181

Tangible common equity to tangible assets (Non-GAAP)

7.93

7.78

7.71

7.57

7.48

1Tangible book value per share (Non-GAAP) is computed by dividing total shareholders’ equity, less goodwill and other intangible assets, by common shares outstanding.