SmartFinancial Announces Results for the Fourth Quarter 2025

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 earnings¹, 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

• Operating earnings¹ of $13.7 million, or $0.81 per diluted common share
• Net organic loan and lease growth of $141 million with 13% annualized quarter-over-quarter increase
• Deposit growth of $102 million or 8% annualized quarter-over-quarter
• Net interest margin, fully tax equivalent basis ("FTE") expanded to 3.38%, reflecting lower deposit and funding costs
• Quarter over quarter tangible book value per common share¹ growth of 13%
• Seventh consecutive quarter of positive operating leverage
• Columbus, GA expansion with two additional commercial bankers
• Multi-year core contract renegotiation process completed

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 share¹ 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.

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:

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):

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):

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):

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):

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 share² was $26.85 at December 31, 2025, compared to $22.85 at December 31, 2024. Tangible common equity¹ as a percentage of tangible assets¹ 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):

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.

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:

1. Operating earnings
2. Operating noninterest income
3. Operating noninterest expense
4. Operating pre-provision net revenue ("PPNR") earnings
5. Tangible common equity
6. Average tangible common equity
7. Tangible book value per common share
8. Tangible assets
9. Operating efficiency ratio

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,

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.