SmartFinancial Announces Results for the Second Quarter 2026, Regular Quarterly Cash Dividend

Key Terms

fte financial

A full-time equivalent (FTE) is a way to count labor by converting part-time and variable hours into the number of full-time workers they equal; for example, two half-time employees equal one FTE. Investors use FTEs to compare staffing levels, payroll exposure, and productivity across periods or companies, similar to comparing vehicle fleet size rather than counting drivers who work varying shifts. It helps standardize workforce cost and capacity measures.

net interest margin financial

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

allowance for credit losses financial

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

nonperforming assets financial

Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.

gaap financial

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

non-gaap financial

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

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KNOXVILLE, Tenn.--(BUSINESS WIRE)-- SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NYSE: SMBK), today 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.

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.

____________________

1Non-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 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 share² 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.

____________________

1Non-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.

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.

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
	Jun				Mar				Dec				Sep				Jun
	2026				2026				2025				2025				2025
Assets:
Cash and cash equivalents	$	379,387			$	346,071			$	464,417			$	557,127			$	365,096
Securities available-for-sale, at fair value		560,065				552,083				539,882				511,095				502,150
Securities held-to-maturity, at amortized cost		119,848				120,968				122,121				123,364				124,520
Other investments		17,529				16,597				16,441				14,888				14,713
Loans held for sale		9,628				7,277				10,865				9,855				5,484
Loans and leases		4,682,935				4,518,391				4,363,582				4,222,369				4,124,062
Less: Allowance for credit losses		(45,252	)			(43,950	)			(40,906	)			(39,074	)			(39,776	)
Loans and leases, net		4,637,683				4,474,441				4,322,676				4,183,295				4,084,286
Premises and equipment, net		93,314				93,360				88,387				89,250				90,204
Other real estate owned		—				—				—				—				144
Goodwill and other intangibles, net		94,417				94,871				95,328				95,807				103,588
Bank owned life insurance		121,353				120,438				119,525				118,610				117,697
Other assets		82,082				81,579				81,168				81,692				82,981
Total assets	$	6,115,306			$	5,907,685			$	5,860,810			$	5,784,983			$	5,490,863
Liabilities:
Deposits:
Noninterest-bearing demand	$	921,876			$	951,366			$	1,062,918			$	931,477			$	906,965
Interest-bearing demand		1,022,074				954,292				945,716				929,454				843,820
Money market and savings		2,454,805				2,455,945				2,273,612				2,218,313				2,124,623
Time deposits		986,795				834,633				870,543				971,653				996,712
Total deposits		5,385,550				5,196,236				5,152,789				5,050,897				4,872,120
Borrowings		603				3,178				3,009				1,301				6,966
Subordinated debt		98,805				98,733				98,662				138,604				39,726
Other liabilities		53,424				47,377				53,858				55,699				52,924
Total liabilities		5,538,382				5,345,524				5,308,318				5,246,501				4,971,736
Shareholders' Equity:
Common stock		17,098				17,098				17,029				17,028				17,018
Additional paid-in capital		296,841				296,284				295,950				295,742				295,209
Retained earnings		275,813				261,032				248,719				236,380				224,061
Accumulated other comprehensive loss		(12,941	)			(12,366	)			(9,319	)			(10,781	)			(17,274	)
Total shareholders' equity attributable to SmartFinancial Inc. and Subsidiary		576,811				562,048				552,379				538,369				519,014
Non-controlling interest - preferred stock of subsidiary		113				113				113				113				113
Total shareholders' equity		576,924				562,161				552,492				538,482				519,127
Total liabilities & shareholders' equity	$	6,115,306			$	5,907,685			$	5,860,810			$	5,784,983			$	5,490,863

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands except share and per share data)
	Three Months Ended																	Six Months Ended
	Jun			Mar			Dec			Sep				Jun				Jun			Jun
	2026			2026			2025			2025				2025				2026			2025
Interest income:
Loans and leases, including fees	$	69,546		$	65,638		$	65,573		$	64,282			$	61,049			$	135,185		$	118,811
Investment securities:
Taxable		5,722			5,492			5,662			4,876				4,848				11,213			9,623
Tax-exempt		565			555			536			441				395				1,121			749
Federal funds sold and other earning assets		2,209			2,585			3,854			4,919				3,161				4,793			6,647
Total interest income		78,042			74,270			75,625			74,518				69,453				152,312			135,830
Interest expense:
Deposits		27,723			26,529			28,646			30,464				28,301				54,252			55,636
Borrowings		371			1			1			14				70				371			140
Subordinated debt		1,884			1,864			1,884			1,610				739				3,748			1,472
Total interest expense		29,978			28,394			30,531			32,088				29,110				58,371			57,248
Net interest income		48,064			45,876			45,094			42,430				40,343				93,941			78,582
Provision for credit losses		1,463			4,139			4,132			227				2,411				5,602			3,391
Net interest income after provision for credit losses		46,601			41,737			40,962			42,203				37,932				88,339			75,191
Noninterest income:
Service charges on deposit accounts		1,881			1,853			1,828			1,831				1,766				3,734			3,502
Gain (loss) on sale of securities, net		54			1			—			(3,715	)			(4	)			55			(4	)
Mortgage banking		916			760			837			709				633				1,676			1,126
Investment services		1,724			1,796			1,683			1,690				1,440				3,520			3,209
Insurance commissions		—			—			—			1,049				1,554				—			2,967
Interchange and debit card transaction fees		1,676			1,418			1,375			1,338				1,342				3,094			2,562
Gain on sale of SBK Insurance ("SBKI")		—			—			—			3,955				—				—			—
Other		1,635			2,113			2,496			1,780				2,167				3,748			4,133
Total noninterest income		7,886			7,941			8,219			8,637				8,898				15,827			17,495
Noninterest expense:
Salaries and employee benefits		21,015			20,414			19,917			19,544				19,602				41,429			38,836
Occupancy and equipment		3,351			3,344			3,388			3,468				3,432				6,696			6,829
FDIC insurance		920			750			1,025			1,025				992				1,670			1,952
Other real estate and loan related expense		806			792			858			969				757				1,597			1,415
Advertising and marketing		408			387			393			454				390				795			772
Data processing and technology		2,683			2,436			2,413			2,594				2,651				5,119			5,309
Professional services		1,366			1,193			1,132			1,123				1,153				2,559			2,521
Amortization of intangibles		454			457			479			536				566				911			1,135
Restructuring expenses		—			—			16			1,310				—				—			—
Other		2,952			3,142			2,850			2,846				3,026				6,095			6,097
Total noninterest expense		33,955			32,915			32,471			33,869				32,569				66,871			64,866
Income before income taxes		20,532			16,763			16,710			16,971				14,261				37,295			27,820
Income tax expense		4,210			3,083			3,007			3,285				2,556				7,293			4,861
Net income	$	16,322		$	13,680		$	13,703		$	13,686			$	11,705			$	30,002		$	22,959
Earnings per common share:
Basic	$	0.97		$	0.81		$	0.82		$	0.82			$	0.70			$	1.78		$	1.37
Diluted	$	0.96		$	0.81		$	0.81		$	0.81			$	0.69			$	1.77		$	1.36
Weighted average common shares outstanding:
Basic		16,824,053			16,821,486			16,788,065			16,781,236				16,778,988				16,822,777			16,773,293
Diluted		16,961,750			16,935,530			16,922,482			16,908,920				16,878,736				16,958,496			16,875,608

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands)
YIELD ANALYSIS
		Three Months Ended
		June 30, 2026								March 31, 2026								June 30, 2025
		Average						Yield/		Average						Yield/		Average						Yield/
		Balance			Interest			Cost		Balance			Interest			Cost		Balance			Interest			Cost
Assets:
Loans and leases, including fees1		$	4,610,444		$	69,740		6.07	%	$	4,434,181		$	65,855		6.02	%	$	4,050,485		$	61,294		6.07	%
Taxable securities			595,018			5,722		3.86	%		584,608			5,492		3.81	%		562,660			4,848		3.46	%
Tax-exempt securities2			79,820			715		3.59	%		80,535			703		3.54	%		66,223			500		3.03	%
Federal funds sold and other earning assets			232,257			2,209		3.81	%		286,539			2,585		3.66	%		275,647			3,161		4.60	%
Total interest-earning assets			5,517,539			78,386		5.70	%		5,385,863			74,635		5.62	%		4,955,015			69,803		5.65	%
Noninterest-earning assets			421,371								397,680								405,804
Total assets		$	5,938,910							$	5,783,543							$	5,360,819
Liabilities and Shareholders’ Equity:
Interest-bearing demand deposits		$	954,455			3,960		1.66	%	$	955,450			3,931		1.67	%	$	835,394			3,785		1.82	%
Money market and savings deposits			2,388,259			15,982		2.68	%		2,337,523			15,236		2.64	%		2,104,236			15,762		3.00	%
Time deposits			907,250			7,781		3.44	%		841,515			7,362		3.55	%		914,658			8,754		3.84	%
Total interest-bearing deposits			4,249,964			27,723		2.62	%		4,134,488			26,529		2.60	%		3,854,288			28,301		2.95	%
Borrowings			41,272			371		3.61	%		3,549			1		0.11	%		7,783			70		3.61	%
Subordinated debt			98,761			1,884		7.65	%		98,692			1,864		7.66	%		39,714			739		7.46	%
Total interest-bearing liabilities			4,389,997			29,978		2.74	%		4,236,729			28,394		2.72	%		3,901,785			29,110		2.99	%
Noninterest-bearing deposits			923,887								931,863								898,428
Other liabilities			53,677								54,603								49,539
Total liabilities			5,367,561								5,223,195								4,849,752
Shareholders' equity			571,349								560,348								511,067
Total liabilities and shareholders' equity		$	5,938,910							$	5,783,543							$	5,360,819
Net interest income, taxable equivalent					$	48,408							$	46,241							$	40,693
Interest rate spread								2.96	%							2.90	%							2.66	%
Tax equivalent net interest margin								3.52	%							3.48	%							3.29	%
Percentage of average interest-earning assets to average interest-bearing liabilities								125.68	%							127.12	%							126.99	%
Percentage of average equity to average assets								9.62	%							9.69	%							9.53	%
1 Yields computed on tax-exempt loans on a tax equivalent basis include $194 thousand, $218 thousand, and $245 thousand of taxable equivalent income for the quarters ended June 30, 2026, March 31, 2026, and June 30, 2025, respectively.
2 Yields computed on tax-exempt instruments on a tax equivalent basis include $150 thousand, $148 thousand, and $105 thousand of taxable equivalent income for the quarters ended June 30, 2026, March 31, 2026, and June 30, 2025, respectively.

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands)
YIELD ANALYSIS
		Six Months Ended
		June 30, 2026									June 30, 2025
		Average						Yield/			Average						Yield/
		Balance			Interest			Cost			Balance			Interest			Cost
Assets:
Loans and leases, including fees1		$	4,522,799		$	135,596			6.05	%	$	3,996,192		$	119,302		6.02	%
Taxable securities			589,843			11,213			3.83	%		559,306			9,623		3.47	%
Tax-exempt securities2			80,176			1,418			3.57	%		64,663			948		2.96	%
Federal funds sold and other earning assets			259,248			4,794			3.73	%		291,219			6,647		4.60	%
Total interest-earning assets			5,452,066			153,021			5.66	%		4,911,380			136,520		5.61	%
Noninterest-earning assets			409,589									405,832
Total assets		$	5,861,655								$	5,317,212
Liabilities and Shareholders’ Equity:
Interest-bearing demand deposits		$	954,950			7,891			1.67	%	$	841,077			7,528		1.80	%
Money market and savings deposits			2,363,031			31,218			2.66	%		2,084,296			30,826		2.98	%
Time deposits			874,564			15,143			3.49	%		897,889			17,282		3.88	%
Total interest-bearing deposits			4,192,545			54,252			2.61	%		3,823,262			55,636		2.93	%
Borrowings			22,515			371			3.32	%		8,000			140		3.53	%
Subordinated debt			98,727			3,748			7.66	%		39,703			1,472		7.48	%
Total interest-bearing liabilities			4,313,787			58,371			2.73	%		3,870,965			57,248		2.98	%
Noninterest-bearing deposits			927,853									891,293
Other liabilities			54,136									50,394
Total liabilities			5,295,776									4,812,652
Shareholders' equity			565,879									504,560
Total liabilities and shareholders' equity		$	5,861,655								$	5,317,212
Net interest income, taxable equivalent					$	94,650								$	79,272
Interest rate spread									2.93	%							2.62	%
Tax equivalent net interest margin									3.50	%							3.25	%
Percentage of average interest-earning assets to average interest-bearing liabilities									126.39	%							126.88	%
Percentage of average equity to average assets									9.65	%							9.49	%
1 Yields computed on tax-exempt loans on a tax equivalent basis include $412 thousand and $491 thousand of taxable equivalent income for the six months ended June 30, 2026, and June 30, 2025, respectively.
2 Yields computed on tax-exempt instruments on a tax equivalent basis include $298 thousand and $199 thousand of taxable equivalent income for the six months ended June 30, 2026, and June 30, 2025, respectively.

SmartFinancial, Inc. and Subsidiary
Condensed Consolidated Financial Information - (unaudited)
(dollars in thousands)
		As of and for The Three Months Ended
		Jun			Mar			Dec			Sep			Jun
		2026			2026			2025			2025			2025
Composition of Loans and Leases:
Commercial real estate:
Non-owner occupied		$	1,288,115		$	1,263,455		$	1,196,758		$	1,136,080		$	1,114,133
Owner occupied			1,080,959			1,033,211			1,022,871			1,012,088			958,989
Commercial real estate, total			2,369,074			2,296,666			2,219,629			2,148,168			2,073,122
Consumer real estate			881,640			851,484			834,626			811,150			803,270
Construction & land development			516,164			478,301			419,176			390,691			391,155
Commercial & industrial			842,849			819,875			817,595			794,751			778,754
Leases			52,411			54,296			55,422			60,301			62,495
Consumer and other			20,797			17,769			17,134			17,308			15,266
Total loans and leases		$	4,682,935		$	4,518,391		$	4,363,582		$	4,222,369		$	4,124,062
Asset Quality and Additional Loan Data:
Nonperforming loans and leases		$	11,474		$	12,257		$	9,442		$	10,099		$	7,921
Other real estate owned			—			—			—			—			144
Other repossessed assets			2,754			2,798			3,248			2,444			2,397
Total nonperforming assets		$	14,228		$	15,055		$	12,690		$	12,543		$	10,462
Modified loans and leases1 not included in nonperforming loans and leases		$	349		$	208		$	219		$	1,783		$	1,660
Net charge-offs to average loans and leases (annualized)			0.05	%		0.02	%		0.18	%		0.10	%		0.01	%
Allowance for credit losses to total loans and leases			0.97	%		0.97	%		0.94	%		0.93	%		0.96	%
Nonperforming loans and leases to total loans and leases			0.25	%		0.27	%		0.22	%		0.24	%		0.19	%
Nonperforming assets to total assets			0.23	%		0.25	%		0.22	%		0.22	%		0.19	%
Capital Ratios:
Equity to Assets			9.43	%		9.52	%		9.43	%		9.31	%		9.45	%
Tangible common equity to tangible assets (Non-GAAP)2			8.01	%		8.04	%		7.93	%		7.78	%		7.71	%
SmartFinancial, Inc.3
Tier 1 leverage			8.47	%		8.41	%		8.30	%		8.21	%		8.25	%
Common equity Tier 1			9.77	%		9.77	%		9.83	%		9.85	%		9.67	%
Tier 1 capital			9.77	%		9.77	%		9.83	%		9.85	%		9.67	%
Total capital			12.64	%		12.72	%		12.71	%		13.31	%		11.04	%
SmartBank3
Tier 1 leverage			9.86	%		9.88	%		9.71	%		9.59	%		8.88	%
Common equity Tier 1			11.38	%		11.47	%		11.51	%		11.56	%		10.41	%
Tier 1 capital			11.38	%		11.47	%		11.51	%		11.56	%		10.41	%
Total capital			12.30	%		12.41	%		12.32	%		12.37	%		11.25	%
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 and going forward.
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																As of and for The
	Three Months Ended																Six Months Ended
	Jun			Mar			Dec			Sep			Jun				Jun			Jun
	2026			2026			2025			2025			2025				2026			2025
Selected Performance Ratios (Annualized):
Return on average assets		1.10	%		0.96	%		0.95	%		0.96	%		0.88	%			1.03	%		0.87	%
Return on average shareholders' equity		11.46	%		9.90	%		9.95	%		10.33	%		9.19	%			10.69	%		9.18	%
Return on average tangible common equity¹		13.74	%		11.93	%		12.06	%		12.79	%		11.53	%			12.85	%		11.56	%
Noninterest income / average assets		0.53	%		0.56	%		0.57	%		0.61	%		0.67	%			0.54	%		0.66	%
Noninterest expense / average assets		2.29	%		2.31	%		2.24	%		2.38	%		2.44	%			2.30	%		2.46	%
Efficiency ratio		60.69	%		61.16	%		60.91	%		66.32	%		66.14	%			60.92	%		67.51	%
Operating Selected Performance Ratios (Annualized):
Operating return on average assets1		1.10	%		0.96	%		0.95	%		1.02	%		0.88	%			1.03	%		0.87	%
Operating PPNR return on average assets1		1.48	%		1.47	%		1.44	%		1.29	%		1.25	%			1.47	%		1.18	%
Operating return on average shareholders' equity1		11.43	%		9.90	%		9.96	%		10.92	%		9.19	%			10.68	%		9.18	%
Operating return on average tangible common equity1		13.70	%		11.93	%		12.07	%		13.53	%		11.53	%			12.83	%		11.57	%
Operating efficiency ratio1		60.38	%		60.75	%		60.45	%		63.61	%		65.66	%			60.56	%		67.02	%
Operating noninterest income / average assets1		0.53	%		0.56	%		0.57	%		0.59	%		0.67	%			0.54	%		0.66	%
Operating noninterest expense / average assets1		2.29	%		2.31	%		2.24	%		2.29	%		2.44	%			2.30	%		2.46	%
Selected Interest Rates and Yields:
Yield on loans and leases, excluding loan fees, FTE		5.95	%		5.93	%		6.00	%		6.05	%		5.99	%			5.94	%		5.94	%
Yield on loans and leases, FTE		6.07	%		6.02	%		6.08	%		6.14	%		6.07	%			6.05	%		6.02	%
Yield on earning assets, FTE		5.70	%		5.62	%		5.65	%		5.68	%		5.65	%			5.66	%		5.61	%
Cost of interest-bearing deposits		2.62	%		2.60	%		2.79	%		2.98	%		2.95	%			2.61	%		2.93	%
Cost of total deposits		2.15	%		2.12	%		2.26	%		2.44	%		2.39	%			2.14	%		2.38	%
Cost of interest-bearing liabilities		2.74	%		2.72	%		2.90	%		3.07	%		2.99	%			2.73	%		2.98	%
Net interest margin, FTE		3.52	%		3.48	%		3.38	%		3.25	%		3.29	%			3.50	%		3.25	%
Per Common Share:
Net income, basic	$	0.97		$	0.81		$	0.82		$	0.82		$	0.70			$	1.78		$	1.37
Net income, diluted		0.96			0.81			0.81			0.81			0.69				1.77			1.36
Operating earnings, basic¹		0.97			0.81			0.82			0.86			0.70				1.78			1.37
Operating earnings, diluted¹		0.96			0.81			0.81			0.86			0.69				1.77			1.36
Book value per common share		33.74			32.88			32.44			31.62			30.51				33.74			30.51
Tangible book value per common share¹		28.22			27.33			26.85			26.00			24.42				28.22			24.42
Common shares outstanding		17,098,473			17,098,473			17,029,317			17,028,001			17,017,547				17,098,473			17,017,547
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																Six Months Ended
	Jun			Mar			Dec			Sep			Jun				Jun			Jun
	2026			2026			2025			2025			2025				2026			2025
Operating Earnings:
Net income (GAAP)	$	16,322		$	13,680		$	13,703		$	13,686		$	11,705			$	30,002		$	22,959
Noninterest income:
Securities (gains) losses, net		(54)			(1)			—			3,715			4				(55)			4
Gain on sale of SBKI		—			—			—			(3,955)			—				—			—
Noninterest expenses:
Restructuring expenses		—			—			16			1,310			—				—			—
Income taxes:
Income tax effect of adjustments		14			—			(4)			(276)			(1)				14			(1)
Operating earnings (Non-GAAP)	$	16,282		$	13,679		$	13,715		$	14,480		$	11,708			$	29,961		$	22,962
Operating earnings per common share (Non-GAAP):
Basic	$	0.97		$	0.81		$	0.82		$	0.86		$	0.70			$	1.78		$	1.37
Diluted		0.96			0.81			0.81			0.86			0.69				1.77			1.36
Operating Noninterest Income:
Noninterest income (GAAP)	$	7,886		$	7,941		$	8,219		$	8,637		$	8,898			$	15,827		$	17,495
Securities (gains) losses, net		(54)			(1)			—			3,715			4				(55)			4
Gain on sale of SBKI		—			—			—			(3,955)			—				—			—
Operating noninterest income (Non-GAAP)	$	7,832		$	7,940		$	8,219		$	8,397		$	8,902			$	15,772		$	17,499
Operating noninterest income (Non-GAAP)/average assets1		0.53	%		0.56	%		0.57	%		0.59	%		0.67	%			0.54	%		0.66	%
Operating Noninterest Expense:
Noninterest expense (GAAP)	$	33,955		$	32,915		$	32,471		$	33,869		$	32,569			$	66,871		$	64,866
Restructuring expenses		—			—			(16)			(1,310)			—				—			—
Operating noninterest expense (Non-GAAP)	$	33,955		$	32,915		$	32,455		$	32,559		$	32,569			$	66,871		$	64,866
Operating noninterest expense (Non-GAAP)/average assets2		2.29	%		2.31	%		2.24	%		2.29	%		2.44	%			2.30	%		2.46	%
Operating Pre-provision Net revenue ("PPNR") Earnings:
Net interest income (GAAP)	$	48,064		$	45,876		$	45,094		$	42,430		$	40,343			$	93,941		$	78,582
Operating noninterest income (Non-GAAP)		7,832			7,940			8,219			8,397			8,902				15,772			17,499
Operating noninterest expense (Non-GAAP)		(33,955)			(32,915)			(32,455)			(32,559)			(32,569)				(66,871)			(64,866)
Operating PPNR earnings (Non-GAAP)	$	21,941		$	20,901		$	20,858		$	18,268		$	16,676			$	42,842		$	31,215
Non-GAAP Return Ratios:
Operating return on average assets (Non-GAAP)3		1.10	%		0.96	%		0.95	%		1.02	%		0.88	%			1.03	%		0.87	%
Operating PPNR return on average assets (Non-GAAP)4		1.48	%		1.47	%		1.44	%		1.29	%		1.25	%			1.47	%		1.18	%
Return on average tangible common equity (Non-GAAP)5		13.74	%		11.93	%		12.06	%		12.79	%		11.53	%			12.85	%		11.56	%
Operating return on average shareholders' equity (Non-GAAP)6		11.43	%		9.90	%		9.96	%		10.92	%		9.19	%			10.68	%		9.18	%
Operating return on average tangible common equity (Non-GAAP)7		13.70	%		11.93	%		12.07	%		13.53	%		11.53	%			12.83	%		11.57	%
Operating Efficiency Ratio:
Efficiency ratio (GAAP)		60.69	%		61.16	%		60.91	%		66.32	%		66.14	%			60.92	%		67.51	%
Adjustment for taxable equivalent yields		(0.38)	%		(0.41)	%		(0.43)	%		(0.47)	%		(0.47)	%			(0.40)	%		(0.49)	%
Adjustment for securities gains (losses)		0.07	%		—	%		—	%		(4.50)	%		(0.01)	%			0.04	%		—	%
Adjustment for sale of SBKI		—	%		—	%		—	%		5.57	%		—	%			—	%		—	%
Adjustment for restructuring cost		—	%		—	%		(0.02)	%		(3.31)	%		—	%			—	%		—	%
Operating efficiency ratio (Non-GAAP)		60.38	%		60.75	%		60.45	%		63.61	%		65.66	%			60.56	%		67.02	%
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
		Jun			Mar			Dec			Sep			Jun
		2026			2026			2025			2025			2025
Tangible Common Equity:
Shareholders' equity (GAAP)		$	576,924		$	562,161		$	552,492		$	538,482		$	519,127
Less goodwill and other intangible assets			94,417			94,871			95,328			95,807			103,588
Tangible common equity (Non-GAAP)		$	482,507		$	467,290		$	457,164		$	442,675		$	415,539
Average Tangible Common Equity:
Average shareholders' equity (GAAP)		$	571,349		$	560,348		$	546,489		$	525,829		$	511,067
Less average goodwill and other intangible assets			94,696			95,145			95,619			101,326			103,936
Average tangible common equity (Non-GAAP)		$	476,653		$	465,203		$	450,870		$	424,503		$	407,131
Tangible Book Value per Common Share:
Book value per common share (GAAP)		$	33.74		$	32.88		$	32.44		$	31.62		$	30.51
Adjustment due to goodwill and other intangible assets			(5.52)			(5.55)			(5.59)			(5.63)			(6.09)
Tangible book value per common share (Non-GAAP)1		$	28.22		$	27.33		$	26.85		$	26.00		$	24.42
Tangible Common Equity to Tangible Assets:
Total Assets (GAAP)		$	6,115,306		$	5,907,685		$	5,860,810		$	5,784,983		$	5,490,863
Less goodwill and other intangibles			94,417			94,871			95,328			95,807			103,588
Tangible Assets (Non-GAAP)		$	6,020,889		$	5,812,814		$	5,765,482		$	5,689,176		$	5,387,275
Tangible common equity to tangible assets (Non-GAAP)			8.01%			8.04%			7.93%			7.78%			7.71%
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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Investor Contacts
Billy Carroll
President & Chief Executive Officer
Email: billy.carroll@smartbank.com
Phone: (865) 868-0613

Nathan Strall
Vice President and Director of Strategy & Corporate Development
Email: nathan.strall@smartbank.com
Phone: (865) 868-2604

Source: SmartFinancial, Inc.