SmartFinancial, Inc.

Your first quarter 2024 earnings release and conference call will begin shortly. If you would like to register a question at any time, please press star 1 on your telephone keypad. Thank you. Hello and welcome to the Smart Financial First Quarter 2024 Earnings Release and Conference Call. My name is Elliot and I'll be your coordinator today. If you would like to register a question during today's event, please press star followed by one on your telephone keypad. And I'd like to hand over to Nate Straw, Director of Strategy and Investor Relations. The floor is yours. Please go ahead.

Good morning, everyone, and thank you for joining us for Smart Financial's first quarter of 2024 earnings call. During today's call, we will reference the slides and press release that are available within the investor relations section of our website, smartbank.com. Billy Carroll, our president and chief executive officer, will begin our call, followed by Ron Grosinski, our CFO, who will provide some additional commentary. We will be available to answer your questions at the end of the call. Our comments include forward-looking statements these statements are subject to risks and uncertainties, then the actual results could vary materially. We list the factors that might cause results to differ materially in our press release and in our SEC filings, which are available on our website. We do not assume any obligation to update any forward-looking statements because of new information, early developments, or otherwise, except as may be required by law. During the call, we will reference non-GAAP financial measures related to the company's performance. You may see the reconciliation of these measures and the appendices of the earnings release and investor presentation filed on April 22nd, 2024 with the SEC. And now, I'll turn it over to Billy Carroll to open our call.

Thanks, Nate. And good morning, everyone. Great to be with you, and thank you for joining us today. And thanks for your interest in SMBK. We're changing the format a little this quarter, moving to just prepared comments from Ron and myself to streamline the first part of the call. We also have Miller, Rhett, and Nate here, and they'll be available for the Q&A portion. Nate's also done a great job of adding some new slides to our deck. As you can see from the release, we had a nice start to the year. We had net income of $9.4 million for the quarter, or 55 cents per diluted share. On an operating basis, we came in at $8.4 million, or 49 cents per diluted share. The delta was primarily a gain on the sale of a former branch facility in Destin, Florida that we sold once we had completed our move to a new office in a better location. We also had a little tailwind from some provision release. Jumping into the highlights, I'll be referring to the first few pages in our deck, pages three, four, and five. First, we continue to increase the tangible book value for our company. moving up to $21.12 per share, including the impacts of AOCI, and $22.73, excluding that impact. We had growth in loans and deposits at approximately 4% and 12%, respectively. Our history of strong credit continues, with the metric ticking down from a low base last quarter even more to only 18 basis points in NPAs. Total revenue was back over $40 million, and net interest income continued to expand with the inflection point we saw at the end of last quarter. Non-interest expenses were steady at $28.6 million for the quarter. We maintained our strong liquidity position covering our uninsured deposits at 1.4 times, and our return metrics started their inflection as well. as we had projected with operating ROA and ROE at 0.69% and 9.5% respectively on our path back to 1% and 14% plus as we leveraged the market investments we made in 2022. Ron will dive into the numbers a little deeper, but a couple of high-level comments from me. On growth, we were pleased with the results. The deposit side grew faster than we had anticipated this quarter at $126 million. This drove our cost of deposits up a little, 17 basis points, with those net new dollars coming on at reasonable rates, just higher than our overall current cost. I was pleased with maintaining the 21% non-interest bearing component, as we all know that's getting tougher. On loans, we were up $34 million, a little below our forecast, primarily due to a couple of unanticipated payoffs where clients sold assets, but production was healthy. Yields on the loan side continue to grow, up 10 basis points for the quarter. Our loan mix was almost identical year-end with our CRE concentration ratios edging down again this quarter, giving us some dry powder there for the right opportunities. I think it's important to note that our balance sheet pipelines look solid as well as we forecast out a couple of months. We are seeing clients continue to sell assets and businesses, which isn't a bad thing, But it could have some impacts on timing of overall loan growth this year as we saw this quarter. That said, I still think we can hold to our mid to high single digits on growth for the year on both sides of the balance sheet. I do want to draw your attention to a couple of slides that Nate added this quarter that depict why we believe our story is one of the best values in the region. Slide seven. I think it's important to remind our stakeholders of what we've accomplished over the last few years with the best yet to come. There's some great information here on our company's journey from when Miller and I combined their banks into the $1 billion platform in 2015. From pulling those companies together and validating our model to then scaling the company with several years of successful acquisitions and organic growth to where we are now with focus on generating operating leverage. As we've discussed on prior calls, Recent rate increases have delayed returns popping back quickly after our seven de novo market expansions we made leading into 2022. But the foundation is set, and we are poised for continued performance enhancements. Another new slide, slide eight, shows why we're so bullish on our future. Taking a look graphically at our footprint, you'll see we are operating in arguably some of the country's best regions. And the South population growth numbers are strong and will benefit from that moving forward as well. All said, a nice start to 2024. So let me go ahead and turn it over to Ron for his commentary, and then we'll open it up for some questions. Ron?