SmartFinancial, Inc. (“SmartFinancial” or the “Company”; NYSE: SMBK), on July 20th announced net income of $16.3 million, or $0.96 per diluted common share, for the second quarter of 2026, compared to net income of $11.7 million, or $0.69 per diluted common share, for the second quarter of 2025, and compared to prior quarter net income of $13.7 million, or $0.81 per diluted common share.
Highlights for the Second Quarter of 2026
• Operating earnings1 of $16.3 million, or $0.96 per diluted common share
• Net organic loan and lease growth of $165 million representing 15% annualized quarter-over-quarter increase • Surpassed $6 billion in total assets during the quarter
• Core deposit2 growth of $83 million representing 6% annualized quarter-over-quarter increase
• Quarter-over-quarter tangible book value per common share1 growth of 13% annualized
• Recertified as a Great Place to Work by over 97% of SmartBank Associates
Billy Carroll, President & CEO, stated: “Our second quarter results reflect steady progress in the execution of our strategy. During the quarter, we generated approximately 15% annualized loan growth and expanded our net interest margin to 3.52%, while maintaining excellent asset quality. Diluted earnings per share increased to $0.96, an improvement of $0.15 from the first quarter, and tangible book value per common share grew quarter over quarter by 13% annualized. We also generated positive operating leverage as revenue growth outpaced expense growth during the quarter. Pipelines across the Company remain healthy, and we believe the disruption created by ongoing consolidation and operational challenges at certain competitors continues to create meaningful opportunities to deepen relationships and gain market share. While we recognize there is still work to do, our strong momentum gives us confidence in the long term trajectory of the Company and our ability to continue creating value for shareholders. I want to thank our associates for their hard work and commitment to our clients, which continue to drive our performance and position the Company for future growth.”
SmartFinancial’s Chairman, Miller Welborn, concluded: “The momentum we continue to build across SmartBank, reflects the strength of our franchise and the commitment of our associates. Being recertified as a Great Place to Work by more than 97% of our associates is particularly meaningful because it speaks to the culture that has been foundational to our success. The results achieved this quarter reflect the disciplined execution of our associates across the Company and the benefits of the investments we have made in our markets, people, and operating platform. I want to thank our associates for the exceptional work they do every day to serve our clients and create long-term value for our shareholders. As we look ahead, we remain excited about the opportunities and confident in our ability to capitalize on them.”
Net Interest Income and Net Interest Margin
Net interest income was $48.1 million for the second quarter of 2026, compared to $45.9 million for the prior quarter. Average earning assets totaled $5.52 billion, an increase of $131.7 million from the prior quarter. The balances of average earning assets increased quarter-over-quarter, primarily from an increase in average loans and leases of $176.3 million and average securities of $9.7 million, offset by a decrease in average federal funds sold and other earning assets of $54.3 million. Average interest-bearing liabilities increased by $153.3 million from the prior quarter, primarily attributable to an increase in average interest-bearing deposits of $115.5 million and borrowings of $37.7 million.
1 Non-GAAP measure. See “Non-GAAP Financial Measures” for more information and see the Non-GAAP Reconciliations. 2 Core deposits include all deposits less brokered and one-way buy Certificate of Deposit Account Registry Service (“CDARS”) deposits.
The tax equivalent net interest margin was 3.52% for the second quarter of 2026, up from 3.48% for the prior quarter. This increase is primarily related to the increase in asset yields, outpacing the increase in liability costs. The yield on loans and leases, excluding loan fees, fully taxable equivalent (“FTE”) was 5.95% for the second quarter of 2026, compared to 5.93% for the prior quarter.
The cost of total deposits for the second quarter of 2026 was 2.15%, compared to 2.12% in the prior quarter. The cost of interest-bearing liabilities was 2.74% for the second quarter of 2026, compared to 2.72% in the prior quarter. The cost of average interest-bearing deposits was 2.62% for the second quarter of 2026, compared to 2.60% for the prior quarter, an increase of 2 basis points.
The following table presents selected interest rates and yields for the periods indicated:
Three Months Ended
Jun Mar Increase
Selected Interest Rates and Yields 2026 2026 (Decrease) Yield on loans and leases, excluding loan fees, FTE 5.95 % 5.93 % 0.02 % Yield on loans and leases, FTE 6.07 % 6.02 % 0.05 % Yield on earning assets, FTE 5.70 % 5.62 % 0.08 % Cost of interest-bearing deposits 2.62 % 2.60 % 0.02 % Cost of total deposits 2.15 % 2.12 % 0.03 % Cost of interest-bearing liabilities 2.74 % 2.72 % 0.02 % Net interest margin, FTE 3.52 % 3.48 % 0.04 %
Allowance for Credit Losses on Loans and Leases and Credit Quality
At June 30, 2026, the allowance for credit losses was $45.3 million. The allowance for credit losses to total loans and leases was 0.97% as of June 30, 2026, and March 31, 2026. During the first quarter of 2026, SmartBank updated its ACL loss model by adopting a discounted cash flow methodology, refining key assumptions and qualitative factors, and enhancing its use of macroeconomic drivers. These changes contributed to a higher provision for credit losses during the first quarter.
The following table presents detailed information related to the provision for credit losses for the periods indicated (dollars in thousands):
Three Months Ended
Jun Mar Increase
Allowance for Credit Losses on Loans and Leases Rollforward 2026 2026 (Decrease) Beginning balance $ 43,950 $ 40,906 $ 3,044 Charge-offs (658) (229) (429) Recoveries 105 60 45 Net charge-offs (553) (169) (384) Provision for credit losses (1) 1,855 3,213 (1,358) Ending balance $ 45,252 $ 43,950 $ 1,302
Allowance for credit losses to total loans and leases 0.97 % 0.97 % – %
(1) The current quarter-ended and prior quarter-ended provision excludes an unfunded commitments release of $392 thousand and a provision of $926 thousand, respectively. At June 30, 2026, and March 31, 2026, the unfunded commitment liability totaled $4.1 million and $4.5 million, respectively.
Nonperforming loans and leases as a percentage of total loans and leases was 0.25% as of June 30, 2026, and 0.27% as of March 31, 2026. 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 0.23% as of June 30, 2026, and 0.25% as of March 31, 2026.
The following table presents detailed information related to credit quality for the periods indicated (dollars in thousands):
Three Months Ended
Jun Mar Increase
Credit Quality 2026 2026 (Decrease) Nonaccrual loans and leases $ 11,474 $ 12,257 $ (783) Loans and leases past due 90 days or more and still accruing – – –
Total nonperforming loans and leases 11,474 12,257 (783) Other real estate owned – – – Other repossessed assets 2,754 2,798 (44) Total nonperforming assets $ 14,228 $ 15,055 $ (827)
Nonperforming loans and leases to total loans and leases 0.25 % 0.27 % (0.02)% Nonperforming assets to total assets 0.23 % 0.25 % (0.02)%
Noninterest Income
Noninterest income decreased slightly, by $55 thousand to $7.9 million for the second quarter of 2026, compared to $7.9 million for the prior quarter. The second quarter decrease was primarily attributable to lower capital markets’ income included in other noninterest income, offset by increases in interchange and debit card transaction fees and mortgage banking income.
The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands):
Three Months Ended
Jun Mar Increase
Noninterest Income 2026 2026 (Decrease) Service charges on deposit accounts $ 1,881 $ 1,853 $ 28 Gain on sale of securities, net 54 1 53 Mortgage banking income 916 760 156 Investment services 1,724 1,796 (72) Interchange and debit card transaction fees 1,676 1,418 258 Other 1,635 2,113 (478) Total noninterest income $ 7,886 $ 7,941 $ (55)
Noninterest Expense
Noninterest expense increased $1.0 million to $34.0 million for the second quarter of 2026, compared to $32.9 million for the prior quarter. The second quarter increase was primarily attributable to increases in salaries and employee benefits, FDIC insurance, data processing and technology and professional services, offset by a decrease in other expense.
The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):
Three Months Ended
Jun Mar Increase
Noninterest Expense 2026 2026 (Decrease) Salaries and employee benefits $ 21,015 $ 20,414 $ 601 Occupancy and equipment 3,351 3,344 7 FDIC insurance 920 750 170 Other real estate and loan related expenses 806 792 14 Advertising and marketing 408 387 21 Data processing and technology 2,683 2,436 247 Professional services 1,366 1,193 173 Amortization of intangibles 454 457 (3) Other 2,952 3,142 (190) Total noninterest expense $ 33,955 $ 32,915 $ 1,040
Income Tax Expense
Income tax expense was $4.2 million for the second quarter of 2026, compared with $3.1 million for the prior quarter. The $1.1 million increase was primarily driven by a higher projected annual effective tax rate resulting from increased forecasted taxable income relative to non-taxable income.
Balance Sheet Trends
Total assets at June 30, 2026, were $6.12 billion compared to $5.86 billion at December 31, 2025. The $254.5 million increase was primarily attributable to increases in loans and leases of $319.4 million, securities of $17.9 million, premises and equipment of $4.9 million, and bank owned life insurance of $1.8 million, offset by decreases in cash and cash equivalents of $85.0 million and loans held for sale of $1.2 million, as well as an increase in the allowance for credit losses of $4.3 million.
Total liabilities were $5.54 billion at June 30, 2026, compared to $5.31 billion at December 31, 2025, an increase of $230.1 million. Total deposits increased $232.8 million, which was driven primarily by increases in money market and savings deposits of $181.2 million, interest-bearing demand deposits of $76.4 million, and time deposits of $116.3 million, offset by a decline in noninterest-bearing demand deposits of $141.0 million. In addition, borrowings decreased by $2.4 million and other liabilities decreased by $434 thousand.
Shareholders’ equity at June 30, 2026, totaled $576.9 million, an increase of $24.4 million, from December 31, 2025. The increase in shareholders’ equity was primarily driven by net income of $30.0 million for the six months ending June 30, 2026, offset by an increase of $3.6 million in accumulated other comprehensive loss and dividends paid of $2.9 million. Tangible book value per common share1 was $28.22 at June 30, 2026, compared to $26.85 at December 31, 2025. Tangible common equity1 as a percentage of tangible assets1 was 8.01% at June 30, 2026, compared with 7.93% at December 31, 2025.
The following table presents selected balance sheet information for the periods indicated (dollars in thousands):
Jun Dec Increase
Selected Balance Sheet Information 2026 2025 (Decrease) Total assets $ 6,115,306 $ 5,860,810 $ 254,496 Total liabilities 5,538,382 5,308,318 230,064 Total equity 576,924 552,492 24,432 Securities 679,913 662,003 17,910 Loans and leases 4,682,935 4,363,582 319,353 Deposits 5,385,550 5,152,789 232,761
Board of Directors Declares Dividend
On July 16, 2026, the board of directors of SmartFinancial declared a quarterly cash dividend of $0.09 per share of SmartFinancial common stock payable on August 17, 2026, to shareholders of record as of the close of business on July 31, 2026.
Conference Call Information
SmartFinancial issued this earnings release for the second quarter of 2026 on Monday, July 20, 2026, and will host a conference call on Tuesday, July 21, 2026, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 461-5787 and enter the Meeting ID: 208 155 555. A link to a replay of the conference call will be available on the Company’s webpage through July 21, 2027. 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.
1 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 and loan production offices in Tennessee and Georgia. 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.
Source
SmartFinancial, Inc.
Investor Contacts
Billy Carroll Nathan Strall
President & Chief Executive Officer Vice President and Director of Strategy & Corporate Development Email: [email protected] Email: [email protected] Phone: (865) 868-0613 Phone: (865) 868-2604
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:
(1) Operating earnings (11) Operating return on average assets (2) Operating revenue (12) Operating PPNR return on average assets (3) Operating noninterest income (13) Operating return on average shareholders’ equity (4) Operating noninterest expense (14) Return on average tangible common equity
(5) Operating pre-provision net revenue (“PPNR”) earnings
(15) Operating return on average tangible common equity
(6) Tangible common equity (16) Operating noninterest income/average assets (7) Average tangible common equity (17) Operating noninterest expense/average assets (8) Tangible book value per common share (18) Tangible common equity to tangible assets (9) Tangible assets (19) Operating earnings per common share (10) Operating efficiency ratio
A detailed reconciliation and definition 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.
