SmartFinancial, Inc. ((", SmartFinancial", or the ", Company", , NYSE:SMBK), today announced net income of $11.7 million, or $0.69 per diluted common share, for the second quarter of 2025, compared to net income of $8.0 million, or $0.48 per diluted common share, for the second quarter of 2024, and compared to prior quarter net income of $11.3 million, or $0.67 per diluted common share. Operating earnings¹, which excludes non-recurring income, net of tax adjustments, totaled $11.7 million, or $0.69 per diluted common share, in the second quarter of 2025, compared to $7.8 million, or $0.46 per diluted common share, in the second quarter of 2024, and compared to $11.3 million, or $0.67 per diluted common share, in the first quarter of 2025.

Highlights for the Second Quarter of 2025

Operating earnings¹ of $11.7 million, or $0.69 per diluted common share
Net organic loan and lease growth of $132 million with 13% annualized quarter-over-quarter increase
Five consecutive quarters of positive operating leverage
Credit quality remains solid with nonperforming assets to total assets of 0.19%
Quarter over quarter tangible book value per share growth of 13.7%
Recertified as a Great Place to Work by over 92% of SmartBank associates
Three business production team members added to Commercial and Private Banking teams

Billy Carroll, President & CEO, stated: "Once again, our Company delivered sustained growth and increasing returns, resulting in five consecutive quarters of positive operating leverage. Despite continued market volatility, our SmartBank team members generated quarterly loan growth of 13% annualized, a testament to our team's commitment and unmatched professionalism. Our capital base continues to strengthen, and our asset quality remains solid (non-performing assets at 0.19% of total assets). As we reach the midpoint of 2025, it has become increasingly clear that leveraging our platform organically and recruiting top talent is an effective and successful strategy. Thank you to all SmartBank associates for your hard work in making us a leading Southeast banking franchise!"

SmartFinancial's Chairman, Miller Welborn, concluded: "The Board could not be more pleased with the positive momentum of our Company. Operating leverage, margin, tangible book value and earnings per share all continue to trend positively and, equally important, our Company continues to maintain its steadfast commitment to culture. Once again, this quarter saw SmartBank recertified as a Great Place to Work by over 92% of its associate base, a tremendous honor that we look forward to continuing for years to come."

Net Interest Income and Net Interest Margin

Net interest income was $40.3 million for the second quarter of 2025, compared to $38.2 million for the prior quarter. Average earning assets totaled $4.96 billion, an increase of $87.8 million from the prior quarter. The balances of average earnings assets changed quarter-over-quarter, primarily from an increase in average loans and leases of $109.2 million and securities of $9.9 million, offset by a decrease in average interest-earning cash of $31.3 million. Average interest-bearing liabilities increased by $62.0 million from the prior quarter, primarily attributable to an increase in average deposits of $62.4 million, offset by a decrease in borrowings of $437 thousand.

The tax equivalent net interest margin was 3.29% for the second quarter of 2025, compared to 3.21% for the prior quarter. The tax equivalent net interest margin was positively impacted primarily by the increased yield on interest-earning assets and offset by an increase in the cost of interest-bearing liabilities, quarter-over-quarter. The yield on loans and leases, excluding loan fees, on a fully tax equivalent basis ("FTE") was 5.99% for the second quarter, compared to 5.88% for the prior quarter.

The cost of total deposits for the second quarter of 2025 was 2.39%, compared to 2.37% in the prior quarter. The cost of interest-bearing liabilities was 2.99% for the second quarter, compared to 2.97% in the prior quarter. The cost of average interest-bearing deposits was 2.95% for the second quarter of 2025, compared to 2.92% for the prior quarter, an increase of three basis points.

________________________________________________

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

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


	Three Months Ended
	Jun		Mar		Increase
Selected Interest Rates and Yields	2025		2025		(Decrease)
Yield on loans and leases, excluding loan fees, FTE	5.99	%	5.88	%	0.11	%
Yield on loans and leases, FTE	6.07	%	5.97	%	0.10	%
Yield on earning assets, FTE	5.65	%	5.56	%	0.09	%
Cost of interest-bearing deposits	2.95	%	2.92	%	0.03	%
Cost of total deposits	2.39	%	2.37	%	0.02	%
Cost of interest-bearing liabilities	2.99	%	2.97	%	0.02	%
Net interest margin, FTE	3.29	%	3.21	%	0.08	%

Provision for Credit Losses on Loans and Leases and Credit Quality

At June 30, 2025, the allowance for credit losses was $39.8 million. The allowance for credit losses to total loans and leases was 0.96% as of June 30, 2025, and March 31, 2025.

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
Provision for Credit Losses on Loans and Leases Rollforward	2025			2025			(Decrease)
Beginning balance	$	38,175		$	37,423		$	752
Charge-offs		(269	)		(332	)		63
Recoveries		123			241			(118	)
Net charge-offs		(146	)		(91	)		(55	)
Provision for credit losses ⁽¹⁾		1,747			843			904
Ending balance	$	39,776		$	38,175		$	1,601

Allowance for credit losses to total loans and leases, gross		0.96	%		0.96	%		-	%

⁽¹⁾ The current quarter-ended and prior quarter-ended excludes unfunded commitments provision of $664 thousand and $136 thousand, respectively. At June 30, 2025, the unfunded commitment liability totaled $3.3 million.

Nonperforming loans and leases as a percentage of total loans and leases was 0.19% as of June 30, 2025, and 0.20% as of March 31, 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 0.19% as of June 30, 2025, and March 31, 2025.

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	2025			2025			(Decrease)
Nonaccrual loans and leases	$	7,889		$	7,624		$	265
Loans and leases past due 90 days or more and still accruing		32			183			(151	)
Total nonperforming loans and leases		7,921			7,807			114
Other real estate owned		144			144			-
Other repossessed assets		2,397			2,414			(17	)
Total nonperforming assets	$	10,462		$	10,365		$	97

Nonperforming loans and leases to total loans and leases, gross		0.19	%		0.20	%		(0.01	)%
Nonperforming assets to total assets		0.19	%		0.19	%		-	%

Noninterest Income

Noninterest income increased $301 thousand to $8.9 million for the second quarter of 2025, compared to $8.6 million for the prior quarter. The current quarter increase was primarily attributable to increases in mortgage banking income, insurance commissions, interchange and debit card transactions and other, offset by a decrease in investment services.

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	2025			2025		(Decrease)
Service charges on deposit accounts	$	1,766		$	1,736	$	30
Loss on sale of securities		(4	)		-		(4	)
Mortgage banking income		633			493		140
Investment services		1,440			1,769		(329	)
Insurance commissions		1,554			1,412		142
Interchange and debit card transaction fees		1,342			1,220		122
Other		2,167			1,967		200
Total noninterest income	$	8,898		$	8,597	$	301

Noninterest Expense

Noninterest expense increased $273 thousand to $32.6 million for the second quarter of 2025, compared to $32.3 million for the prior quarter. The current quarter's increase was primarily attributable to an increase in salaries and employee benefits from additional incentive accruals, offset by a decrease in professional services. The changes in the other categories of noninterest expense were minimal.

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	2025		2025		(Decrease)
Salaries and employee benefits	$	19,602	$	19,234	$	368
Occupancy and equipment		3,432		3,397		35
FDIC insurance		992		960		32
Other real estate and loan related expenses		757		658		99
Advertising and marketing		390		382		8
Data processing and technology		2,651		2,657		(6	)
Professional services		1,153		1,368		(215	)
Amortization of intangibles		566		569		(3	)
Other		3,026		3,071		(45	)
Total noninterest expense	$	32,569	$	32,296	$	273

Income Tax Expense

Income tax expense was $2.6 million for the second quarter of 2025, an increase of $250 thousand, compared to $2.3 million for the prior quarter.

Balance Sheet Trends

Total assets at June 30, 2025, were $5.49 billion compared to $5.28 billion at December 31, 2024. The $215.0 million increase is primarily attributable to increases in loans and leases of $217.7 million and securities of $17.7 million, offset by a decrease in cash and cash equivalents of $22.5 million.

Total liabilities were $4.97 billion at June 30, 2025, compared to $4.78 billion at December 31, 2024, an increase of $187.3 million. Total deposits increased $185.6 million, which was driven primarily by increases in other time deposits of $95.2 million, money market deposits of $85.1 million and, interest-bearing demand deposits of $7.1 million and the issuance of brokered deposits of $56.9 million, offset by a decline in noninterest demand deposits of $58.6 million.

Shareholders' equity at June 30, 2025, totaled $519.1 million, an increase of $27.7 million, from December 31, 2024. The increase in shareholders' equity was primarily driven by net income of $23.0 million for the six months ending June 30, 2025, and a positive change of $6.4 million in accumulated other comprehensive loss, offset by dividends paid of $2.7 million. Tangible book value per share² was $24.42 at June 30, 2025, compared to $22.85 at December 31, 2024. Tangible common equity¹ as a percentage of tangible assets¹ was 7.71% at June 30, 2025, compared with 7.48% at December 31, 2024.

The following table presents selected balance sheet information for the periods indicated (dollars in thousands):


	Jun		Dec		Increase
Selected Balance Sheet Information	2025		2024		(Decrease)
Total assets	$	5,490,863	$	5,275,904	$	214,959
Total liabilities		4,971,736		4,784,443		187,293
Total equity		519,127		491,461		27,666
Securities		626,670		608,987		17,683
Loans and leases		4,124,062		3,906,340		217,722
Deposits		4,872,120		4,686,483		185,637
Borrowings		6,966		8,135		(1,169	)

Conference Call Information

SmartFinancial issued this earnings release for the second quarter of 2025 on Monday, July 21, 2025, and will host a conference call on Tuesday, July 22, 2025, at 10:00 a.m. ET. To access this interactive teleconference, dial (833) 470-1428 or (404) 975-4839 and enter the access code, 342904. A replay of the conference call will be available through September 20, 2025, by dialing (866) 813-9403 or (929) 458-6194 and enter the access code, 216208. 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.

_______________________________________________

¹ Non-GAAP measure. See "Non-GAAP Financial Measures" for more information and see the Non-GAAP Reconciliation

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 noninterest income
Operating noninterest expense
Operating pre-provision net revenue ("PPNR") earnings
Tangible common equity
Average tangible common equity
Tangible book value per common share
Tangible assets
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,

(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 merger and acquisition activity, including risks associated with our pursuit of future acquisitions;

(4) changes in management's plans for the future;

(5) prevailing, or changes in, economic or political conditions (including those resulting from the new 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; and

(20) 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
	2025			2025			2024			2024			2024
Assets:
Cash and cash equivalents	$	365,096		$	422,984		$	387,570		$	192,914		$	342,835
Securities available-for-sale, at fair value		502,150			499,445			482,328			501,336			500,821
Securities held-to-maturity, at amortized cost		124,520			125,576			126,659			127,779			128,996
Other investments		14,713			14,371			14,740			20,352			13,780
Loans held for sale		5,484			3,843			5,996			5,804			3,103
Loans and leases		4,124,062			3,992,207			3,906,340			3,717,478			3,574,158
Less: Allowance for credit losses		(39,776	)		(38,175	)		(37,423	)		(35,609	)		(34,690	)
Loans and leases, net		4,084,286			3,954,032			3,868,917			3,681,869			3,539,468
Premises and equipment, net		90,204			90,708			91,093			91,055			91,315
Other real estate owned		144			144			179			179			688
Goodwill and other intangibles, net		103,588			104,154			104,723			105,324			105,929
Bank owned life insurance		117,697			116,805			115,917			105,025			84,483
Other assets		82,981			79,155			77,782			77,297			79,591
Total assets	$	5,490,863		$	5,411,217		$	5,275,904		$	4,908,934		$	4,891,009
Liabilities:
Deposits:
Noninterest-bearing demand	$	906,965		$	884,294		$	965,552		$	863,949		$	903,300
Interest-bearing demand		843,820			885,063			836,731			834,207			988,057
Money market and savings		2,124,623			2,131,828			2,039,560			1,854,777			1,901,281
Time deposits		996,712			907,474			844,640			769,558			524,018
Total deposits		4,872,120			4,808,659			4,686,483			4,322,491			4,316,656
Borrowings		6,966			7,610			8,135			8,997			12,732
Subordinated debt		39,726			39,705			39,684			39,663			42,142
Other liabilities		52,924			49,302			50,141			48,760			47,014
Total liabilities		4,971,736			4,905,276			4,784,443			4,419,911			4,418,544
Shareholders' Equity:
Common stock		17,018			17,018			16,926			16,926			16,926
Additional paid-in capital		295,209			294,736			294,269			293,909			293,586
Retained earnings		224,061			213,721			203,824			195,537			187,751
Accumulated other comprehensive loss		(17,274	)		(19,647	)		(23,671	)		(17,349	)		(25,798	)
Total shareholders' equity attributable to SmartFinancial Inc. and Subsidiary		519,014			505,828			491,348			489,023			472,465
Non-controlling interest - preferred stock of subsidiary		113			113			113			—			—
Total shareholders' equity		519,127			505,941			491,461			489,023			472,465
Total liabilities & shareholders' equity	$	5,490,863		$	5,411,217		$	5,275,904		$	4,908,934		$	4,891,009

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
	2025			2025		2024		2024		2024		2025			2024
Interest income:
Loans and leases, including fees	$	61,049		$	57,762	$	57,951	$	54,738	$	50,853	$	118,811		$	100,873
Investment securities:
Taxable		4,848			4,775		5,050		5,233		5,320		9,623			9,869
Tax-exempt		395			354		351		350		353		749			705
Federal funds sold and other earning assets		3,161			3,485		2,744		3,635		4,759		6,647			9,620
Total interest income		69,453			66,376		66,096		63,956		61,285		135,830			121,067
Interest expense:
Deposits		28,301			27,335		27,437		27,350		27,439		55,636			54,474
Borrowings		70			70		89		709		148		140			276
Subordinated debt		739			733		787		865		884		1,472			1,782
Total interest expense		29,110			28,138		28,313		28,924		28,471		57,248			56,532
Net interest income		40,343			38,238		37,783		35,032		32,814		78,582			64,535
Provision for credit losses		2,411			979		2,135		2,575		883		3,391			443
Net interest income after provision for credit losses		37,932			37,259		35,648		32,457		31,931		75,191			64,092
Noninterest income:
Service charges on deposit accounts		1,766			1,736		1,778		1,780		1,692		3,502			3,304
Gain (loss) on sale of securities, net		(4	)		—		64		—		—		(4	)		—
Mortgage banking		633			493		541		410		348		1,126			628
Investment services		1,440			1,769		1,382		1,881		1,302		3,209			2,682
Insurance commissions		1,554			1,412		1,832		1,477		1,284		2,967			2,387
Interchange and debit card transaction fees		1,342			1,220		1,332		1,349		1,343		2,562			2,596
Other		2,167			1,967		2,101		2,242		1,635		4,133			4,387
Total noninterest income		8,898			8,597		9,030		9,139		7,604		17,495			15,984
Noninterest expense:
Salaries and employee benefits		19,602			19,234		19,752		18,448		17,261		38,836			33,900
Occupancy and equipment		3,432			3,397		3,473		3,423		3,324		6,829			6,720
FDIC insurance		992			960		825		825		825		1,952			1,740
Other real estate and loan related expense		757			658		1,241		460		538		1,415			1,123
Advertising and marketing		390			382		397		327		295		772			597
Data processing and technology		2,651			2,657		2,495		2,519		2,452		5,309			4,916
Professional services		1,153			1,368		1,017		1,201		1,064		2,521			1,989
Amortization of intangibles		566			569		601		604		608		1,135			1,220
Other		3,026			3,071		2,490		3,039		2,834		6,097			5,549
Total noninterest expense		32,569			32,296		32,291		30,846		29,201		64,866			57,754
Income before income taxes		14,261			13,560		12,387		10,750		10,334		27,820			22,322
Income tax expense		2,556			2,306		2,747		1,610		2,331		4,861			4,962
Net income	$	11,705		$	11,254	$	9,640	$	9,140	$	8,003	$	22,959		$	17,360
Earnings per common share:
Basic	$	0.70		$	0.67	$	0.58	$	0.55	$	0.48	$	1.37		$	1.03
Diluted	$	0.69		$	0.67	$	0.57	$	0.54	$	0.48	$	1.36		$	1.03
Weighted average common shares outstanding:
Basic		16,778,988			16,767,535		16,729,509		16,726,658		16,770,819		16,773,293			16,810,277
Diluted		16,878,736			16,872,097		16,863,780		16,839,998		16,850,250		16,875,608			16,887,374

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

Three Months Ended

June 30, 2025

March 31, 2025

June 30, 2024

Average

Yield/

Average

Yield/

Average

Yield/

Balance

Interest

Cost

Balance

SmartFinancial Announces Results for the Second Quarter 2025