--- title: "SmartFinancial, Inc. Edges Closer To $1 EPS Goal" type: "News" locale: "en" url: "https://longbridge.com/en/news/293400882.md" description: "SmartFinancial, Inc. (SMBK) reported Q2 operating earnings of $16.3 million ($0.96 diluted EPS), nearing its $1.00 quarterly goal. Revenue reached $55.9 million with strong loan growth of 15% annualized and a tangible book value increase to $28.22 per share. While management highlighted robust credit quality and capital levels, they noted rising deposit costs and short-term funding pressures, projecting a Q3 net interest margin around 3.45%." datetime: "2026-07-22T00:12:59.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293400882.md) - [en](https://longbridge.com/en/news/293400882.md) - [zh-HK](https://longbridge.com/zh-HK/news/293400882.md) --- # SmartFinancial, Inc. Edges Closer To $1 EPS Goal SmartFinancial, Inc. ((SMBK)) has held its Q2 earnings call. Read on for the main highlights of the call. ### Claim 55% Off TipRanks - Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions - Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks SmartFinancial, Inc. delivered an upbeat earnings call that balanced strong growth with manageable funding headwinds. Management highlighted accelerating earnings, solid credit performance, and tangible book value gains, while acknowledging rising deposit costs and short‑term brokered funding needs. Overall sentiment was confident, with the team emphasizing progress toward its $1.00 quarterly EPS goal. ## Strong Operating Earnings and EPS SmartFinancial reported operating earnings of $16.3 million, translating to $0.96 per diluted share for the quarter. This result puts the bank within reach of its $1.00 Q4 EPS objective under the “4×4” initiative, signaling improving profitability and a clearer path to a $4 annualized earnings run rate. ## Revenue and Net Interest Income Growth Total revenue reached $55.9 million, driven largely by higher net interest income of $48.1 million. NII increased $2.2 million sequentially, showing that earning assets are growing and repricing favorably despite a competitive deposit landscape and modest pressure on funding costs. ## Balance Sheet Expansion and Loan Growth The company posted robust loan growth of 15% annualized, with Q2 loan balances expanding by $165 million. Management noted continued diversification across markets and segments, while maintaining a disciplined loan‑to‑deposit ratio of 87%, which supports growth without stretching liquidity. ## Core Deposit Growth and Liquidity Core, nonbroker deposits grew by $83 million, translating to approximately 6% annualized growth in core funding. Liquidity remained strong even as the bank tapped short‑term brokered funding, underscoring a stable balance sheet foundation behind the loan expansion. ## Improving Margin and Loan Production Yields Net interest margin expanded to 3.52% from 3.48% on a sequential basis, or 3.48% on a normalized basis excluding one‑time accretion. New loan production carried a weighted average yield of 6.40% during the quarter, indicating that fresh originations are contributing positively to overall earning asset yields. ## Capital, Credit and Asset Quality Metrics Capital levels remained comfortably in well‑capitalized territory, with a consolidated TCE ratio of 8% and total risk‑based capital of 12.7%. Asset quality stayed solid, as nonperforming assets were just 0.23%, net charge‑offs only 5 basis points, and allowance‑to‑loans around 97 basis points with a lower provision of $1.9 million. ## Tangible Book Value and Milestones Tangible book value per share rose to $28.22 from $26.86 at year‑end, representing a 13% annualized TBV growth rate for the quarter. Management also highlighted crossing the $6 billion asset threshold, marking a notable scale milestone for the institution in its growth journey. ## Operational Execution and Talent Wins Operating noninterest income held steady at $7.9 million, supported by stronger mortgage banking and interchange revenues. The bank underscored execution gains and culture wins, including recertification as a “Great Place to Work” and recruitment of key bankers in Nashville, Huntsville, Tallahassee, and Columbus. ## Deposit Cost Pressure and Funding Actions New deposit production cost in Q2 was 2.90%, up about 8 basis points, while interest‑bearing deposit cost edged higher to 2.62%. To fund brisk loan growth, SmartFinancial used $106 million of short‑term brokered deposits, signaling near‑term funding pressure as competition for deposits remains elevated. ## Near-Term Margin Headwinds Management cautioned that ongoing deposit cost pressure could trim third‑quarter margin by a few basis points. They expect Q3 net interest margin to settle around the mid‑3.40% range, roughly 3.45%, before resuming a more gradual upward trajectory over time as asset yields continue to improve. ## Expense Base and Efficiency Operating noninterest expense rose to just under $34 million, landing at the low end of prior guidance while efficiency stayed in the low‑60% range. For Q3, the bank guided noninterest expense to $34.5–$35.0 million, with salary and benefits expected between $21.0 million and $21.5 million. ## Seasonal and Mix Effects on Deposits Seasonal factors weighed on noninterest‑bearing deposits, which slipped to 17% of total deposits during Q2. The bank also saw clients reshuffle balances between interest‑bearing and noninterest accounts, reflecting ongoing rate sensitivity and optimization of cash in a higher‑rate environment. ## Limited Near-Term Reserve Flexibility Despite low net charge‑offs and strong credit performance, management is maintaining a conservative stance on reserves. The allowance‑to‑loans ratio remains near 97 basis points, and the team does not expect meaningful reserve releases in the near term, preferring to preserve CECL strength. ## Competitive Funding Environment Executives emphasized that deposit competition remains intense across markets, supporting higher funding costs. This environment could constrain further margin expansion and periodically necessitate the use of higher‑cost funding sources, adding a layer of caution to the otherwise bullish growth narrative. ## Forward-Looking Guidance and Outlook Looking ahead, SmartFinancial expects Q3 NIM of about 3.45%, with portfolio yields grinding higher by roughly 3–4 basis points per quarter and new loan yields around 6.40%. Guidance calls for deposit costs to rise modestly, noninterest income near $8 million, expenses of $34.5–$35.0 million, a tax rate around 19.5%, stable reserves near 97–98 basis points, and continued progress toward a $1.00 Q4 EPS, ROA above 1%, and ROE around 13%. SmartFinancial’s latest earnings call painted a picture of a bank growing efficiently while guarding against funding and credit risks. Investors heard a story of advancing earnings, strong capital and asset quality, and expanding TBV, tempered by realistic commentary on deposit competition and margin pressure. The company’s confidence in its path to higher profitability remains a central takeaway. ### Related Stocks - [SMBK.US](https://longbridge.com/en/quote/SMBK.US.md) ## Related News & Research - [SmartFinancial GAAP EPS of $0.96, revenue of $55.95M](https://longbridge.com/en/news/293293880.md) - [SmartBank names Patricia J. Griffin senior vice president, private banker in Tallahassee](https://longbridge.com/en/news/293957461.md) - [Short-term offers yield 4%+, expert says](https://longbridge.com/en/news/294566678.md) - [Landmark Bancorp Q2 revenue hits record level on higher net interest income, loan sales](https://longbridge.com/en/news/294258957.md) - [REG - LendInvest SI. II LendInvest - LIV4 - Portfolio Analysis of Loan LIV4](https://longbridge.com/en/news/294476074.md)