SmartFinancial, Inc.

What they do

SmartFinancial owns and operates SmartBank, a Tennessee-chartered commercial bank founded in 2007 and headquartered in Pigeon Forge, Tennessee. The bank gathers deposits from the public and invests those funds primarily in commercial loans, commercial and residential real estate loans, leases, consumer loans and construction loans. A wholly owned subsidiary, Fountain Equipment Finance, LLC, provides loans and leases for heavy equipment, semi-trucks and trailers to small and medium-sized businesses across the Southeast. Funds not lent are invested mainly in U.S. Government and agency obligations and state and municipal securities.

Revenue drivers

• Net interest income — The dominant earnings source: $166.1 million in 2025 versus $137.4 million in 2024 and $130.1 million in 2023, driven by interest and fees on the loan and lease portfolio.
• Loan and lease portfolio — Net loans and leases totaled approximately $4.36 billion at December 31, 2025, about 74% of total assets, spanning commercial, real estate, construction, agriculture, lease and consumer credits.
• Noninterest income — Fees on deposit accounts, secondary-market mortgage sales and other sources generated $34.4 million in 2025, roughly flat versus $34.2 million in 2024 and up from $22.3 million in 2023.
• Equipment finance — Fountain Equipment Finance originates heavy equipment, semi-truck and trailer loans and leases through offices in Knoxville, Atlanta, Memphis, Nashville and Birmingham.

Recent performance

For the second quarter of 2026, SmartFinancial reported net income of $16.3 million, or $0.96 per diluted share, compared with $11.7 million, or $0.69 per diluted share, in the second quarter of 2025 and $13.7 million, or $0.81 per diluted share, in the prior quarter. Net interest income was $48.1 million, up from $45.9 million in the linked quarter, and the tax equivalent net interest margin expanded to 3.52% from 3.48%. Total assets surpassed $6 billion during the quarter, with net organic loan and lease growth of $165 million, a 15% annualized increase, and core deposit growth of $83 million, or 6% annualized. Full-year 2025 net income was $50.3 million, or $2.98 per diluted share, on net interest income of $166.1 million and a 65.45% efficiency ratio.

Strategy

Management describes a plan to grow a high-performing community bank through organic loan, lease and deposit growth supplemented by disciplined merger and acquisition activity. The bank evaluates business combination and purchase opportunities and may conduct due diligence, with transactions potentially involving cash, debt or equity. Recent results emphasize commercial real estate and other secured and unsecured lending to small and medium-sized businesses, funded principally by deposits. Management attributes part of its opportunity set to disruption from ongoing industry consolidation and operational challenges at certain competitors. It also points to continued investment in markets, people and the operating platform.

Risks

• Interest rate sensitivity — The 10-K states that mismatches between the repricing or maturity characteristics of assets and liabilities mean rate changes can materially affect net interest margin and results.
• Asset quality deterioration — The 10-K lists the possibility that asset quality declines or that loan and lease losses exceed expectations, with the allowance at 0.94% of total loans and leases at year-end 2025.
• Liquidity and funding pressure — The company cites the impact of liquidity needs on operations and financial condition and the risk of changes in deposit levels and costs, with total deposits of $5.15 billion at December 31, 2025.
• Growth execution — The 10-K identifies risks associated with the growth strategy, including failure to implement growth plans or inability to manage growth effectively.

Outlook

CEO Billy Carroll said pipelines across the company remain healthy and that disruption from industry consolidation and competitor challenges continues to create opportunities to deepen relationships and gain market share. He said strong momentum gives management confidence in the company's long-term trajectory, while acknowledging there is still work to do. Chairman Miller Welborn said the company remains confident in its ability to capitalize on opportunities ahead. The board also declared a regular quarterly cash dividend alongside the second-quarter 2026 release.