SmartFinancial, Inc.

Hello, everyone, and welcome to the Smart Financial second quarter 2025 earnings release and conference call. My name is Ezra, and I will be your coordinator today. If you would like to ask a question, please press star followed by one on your telephone keypad. And if you change your mind, please press star followed by two. We will be taking questions after the prepared remarks. I will now hand you over to the host, Nate Stroll, Director of Investor Relations, to begin. Please go ahead.

Thanks, Ezra. Good morning, everyone, and thank you for joining us for Smart Financial's second quarter 2025 earnings conference call. During today's call, we will reference the slides and press release that are available in the investor relations section on our website, smartbank.com. Billy Carroll, our president and chief executive officer, will begin our call, followed by Ron Gorzinski, our chief financial officer, 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, and the actual results could vary materially. We list these factors that might cause the 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 relief and investor presentations filed on July 21st, 2025 with the FDC. 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 for your interest in SMBK. I'll open our call today with some commentary and hand it over to Ron to walk through the numbers in some greater detail. After our prepared comments, we'll open it up with Ron, Nate, Rhett, Miller, and myself available for Q&A. So let's jump in. Another very nice quarter for us as we execute on what we've been messaging. You've heard us talk about execution over the last several quarters, and that's what we're doing. Our team has a keen focus on hitting the targets we've set out for our company this year in regard to revenue, returns, and prudent expense growth. As you'll hear on this call, our company is performing very well and we're remaining bullish on where we're headed. For the quarter, we posted net income gap and operating of $11.7 million or 69 cents per diluted share. I continue to be proud of our performance and I'm excited to watch us gain operating leverage. This is five consecutive quarters of positive leverage. Jumping into the highlights, I'll be referring to the first few pages in our deck First, and in my opinion, one of the most important metrics, we continue to increase the tangible book value of our company, moving up to $24.42 per share, including the impacts of AOCI, and $25.43, including that impact. That's growth of over 13% annualized quarter over quarter. Our balance sheet growth was strong. On the loan side, we grew at a 13% annualized pace for Q2, a little ahead of our expectations as our market teams are continuing to add outstanding new relationships. On the deposit side, growth was sound at 5% quarter over quarter annualized. I continue to be very pleased with the deposit side of our balance sheet as we add outstanding new relationships there as well. We also continue to hold our non-interest bearing percentage. The second quarter is usually a little softer with some seasonality, but we held up well, and Ron will provide more details on that in a moment. Our history of strong credit continues with the metric at just 19 basis points in NPAs. Credit is always a focus for our company and I'm pleased to see these numbers continue at exceptionally low levels. Total revenue came in at $49.2 million as net interest income continued to expand as we had anticipated. We also had another very nice non-interest income quarter. Non-interest expenses also came in on target again at $32.6 million. Looking at the charts on pages four and five, you'll see nice trends. We're building on our return metrics, and most importantly, growing total revenue, EPS, and as I mentioned earlier, tangible book value. All of those charts are great graphics to illustrate our execution, and I'm looking forward to and expecting these trends to continue. So a couple of additional high level comments for me on growth. Our growth was a direct result of the focus of our sales teams. We've hired well over the last several years, and we've also built an outstanding foundational process that includes aggressively going after new client relationships, growing existing ones, along with a diligent prospecting process. As I stated, we grew our loan book at 13% annualized for the quarter. as sales momentum stayed strong and balanced across all of our regions. Our average portfolio yield, including fees and accretion, was up to 6.07%, and our new loan production continues to come onto the books accretive to our total portfolio yield levels. In regard to deposits, I mentioned a moment ago that I'm very proud of what we've done on the deposit front. Our loan-to-deposit ratio is 85%, which is still a nice spot for us, This strong position gives us continued flexibility to leverage our strong balance sheet. Our balance sheet pipelines continue to feel good. I'll discuss this a little more in my closing comments, but all in all, a really nice way to wrap up the first half of 2025. I'm going to stop there and hand it over to Ron to let him dive into some details for us. Ron?

Thanks, Billy, and good morning, everyone. I'll start by highlighting some key deposit results. Our deposit growth during the quarter was affected by typical seasonal outflows, including tax payments and the utilization of public funds. As a result, net balance non-broker deposit growth was $14 million. Offsetting these outflows was $116 million of new non-broker production generated at a weighted average cost of 3.24%. Total interest-bearing costs rose by three basis points to 2.95%, 2.96% for the month of June. Our loan-to-deposit ratio ticked up to approximately 85%, with our deposit composition remaining stable and having non-interest-bearing deposits at 90% of total deposits. Importantly, we saw very little account attrition or client loss throughout the quarter. Rather, we saw a continuation of last quarter's trend, whereby clients continue to utilize excess deposit funding for projects and working capital. While deposit balance drawdowns are impactful, we expect to recoup balances as project investments slow and those seasonal outflows return. Our net interest margin increased to 3.29%, representing an improvement of eight basis points over the previous quarter, as higher loan yields more than offset the three basis point increase in deposit costs. The average rate on new loan production was 7.11%, resulting in a quarterly portfolio yield of 6.07%. As a result, net interest income expanded by 2.1 million, totaling 40.3 million for the current quarter. Looking forward, we are maintaining our previous quarter's guidance of two to three base points of margin expansion per quarter for the second half of 2025. Although we anticipate an increase in overall deposit portfolio costs, primarily due to higher costs of new production, Our new loan originations, along with the amortization maturities of lower-yielding loans, are expected to have a positive contribution in our margin expansion. Taking these into account and considering current market conditions, we are forecasting a third quarter margin in the 3.3% to 3.35% range. Our quarterly provision expense for credit losses reached $2.4 million, mainly from higher loan growth. Net charge-offs to average loans stayed at 0.01% annualized. Asset quality remained solid with non-performing assets at 0.19% of total assets, and the allowance for credit losses remained steady at 0.96% of total loans. Operating non-interest income rose by $300,000 to $8.9 million, exceeding our projections. Consistent with the previous quarter, this positive variance was largely attributable to higher than expected insurance and mortgage banking revenues, as well as sustained robust performance from our capital markets group. Moving on to operating expenses, we maintained our focus on expense containment, recording operating expenses of $32.6 million, the low end of our guided range, and a modest increase from the prior quarter. The majority of this increase was attributable to the recognition of the first full quarter of merit increases and additional accruals for incentive-based compensation related to strong associate performance. Overall, we are satisfied that expenses remain at the lower end of our projected guidance range. For the third quarter, non-interest income is projected to be approximately $9 million, and non-interest expense is expected to be in the range of $33.8 and $34 million. Salary benefit expenses are anticipated to range from $20.5 to $21 million, reflecting an increase from the previous quarter due to higher levels of variable compensation and anticipated costs associated with new hires. I'll conclude with capital. The company's consolidated TCE ratio increased to 7.7%, and our total risk-based capital ratio remained well above regulatory well-capitalized standards at 11.1%. Overall, we believe our capital levels remain optimally balanced to continue to support growth while maximizing returns on equity. With that said, I'll turn it back over to Billy.

Thanks, Ron. I want to reiterate again the value proposition with our company, drawing your attention back to page seven of our deck. We are successfully moving into the leveraging phase of growth for our company. We are seeing the inflection and the movement of our numbers, and now as we have clear vision of our return targets. We're building a great franchise. We're in arguably some of the most attractive markets in the country, and have put together a team that is rapidly moving us forward. You've heard me say before, I believe we're one of the Southeast's brightest stories, outstanding markets, strong experienced bankers coupled with just as experienced and strong operational and support teams, along with some great complimentary business lines. We expect the second half of 2025 to have a similar look to the first half as we focused on continued growth in our EPS line and hitting our near-term revenue and return targets that are clearly in sight. As I mentioned, pipelines are solid And I think we can continue growing at that mid to high single digit space. A couple of comments on talent acquisition. One of the areas where we are focusing and one that I continue to be very excited about is our ability to recruit outstanding new team members. The majority of the expense growth looking forward should be primarily talent related, along with some appropriate investment in our platforms. We've either added or are in the process of adding 10 new revenue producing team members during the first half of the year, primarily in commercial banking, private banking, and treasury management. I believe we are included in a very small handful of banks that have built a culture where outstanding regional bankers want to work. We will continue to look for these organic growth opportunities and remain very focused on recruiting. On the culture front, We've been recertified as a great place to work this year, and our associates have created an outstanding positive energy around this company. So to summarize, I love where we are sitting. We are executing, growing our revenue line, EPS, and book value while staying prudent on expense growth. We remain optimistic around our margin as new production stays strong, and as we see the tailwind coming with rate resets in our loan portfolio over the next couple of years. Credit continues to be very sound. And we're seeing great new client acquisitions coupled with a great sales energy. I appreciate the work of our smart financial smart bank team and the efforts of our 600 plus associates. And I'm very proud of what we've got going on here at SMBK. So I'm going to stop there and we'll open it up for questions.

Thank you very much. If you would like to ask a question, please press star followed by one on your telephone keypad now. And please ensure your device is unmuted locally. If you change your mind or your question has already been answered, please press star followed by two. Our first question comes from Stefan Skouten with Piper Sandler. Stefan, your line is now open. Please go ahead.

Thanks. Good morning. Great quarter, guys. So, Billy, talking about the loan growth and sounds like, you know, pipelines are still solid. kind of talking about mid single digits. What do you think keeps you at a level like in this kind of low double digit range we've been seemingly operating at lately? Do you think that, you know, upside potential is still there, especially if these new hires come to fruition?

Hey, Steven. Yeah, I do. You know, we have, you know, the last few quarters we've been able to kind of bring it in at that lower double digit level. I still think that is very feasible. I hedge a little bit Just because we've seen a lot of payoffs and paydowns around our space. We've been pretty fortunate that we have not been hit with kind of some of those unanticipated payoffs or paydowns. So, you know, I hedge a little bit just in the anticipation that if you get a little bit more of that than we anticipate, that could drop us down into the high singles. But I still think we're at that kind of that high singles, possibly low doubles if we get it. You mentioned the new production team members we're continuing to add. So I like our ability to grow. I think we've got the ability to continue to grow both sides of this balance sheet. at a nice level. But I still lean a little bit more toward high singles. But yeah, we could potentially do low doubles as well.

Got it. And with the new hires, is there any sort of geographic bent towards where those folks are coming from or any verticals that you're targeting more so than others or just give us a feel for where those people are coming, where they're going to be producing?

spread out really throughout our whole platform. We're just seeing some great opportunities with some bankers that we've recruited for a while. Some opportunities have just kind of popped up. But it's really not in any one specific region. We've added really throughout Tennessee, Alabama, and our Gulf Coast region. over the course of the last few months. As I mentioned in my commentary, we're in the process of adding some other really nice team members as well. So things have been good, and we've been able to continue to attract the opportunity to add some great talent to the team. But it's pretty well spread out throughout the whole company.

Got it. From a Ford financial perspective, I mean, you guys are basically hit the guidance and kind of the, the, the bogey of operating revenue that you had laid out, you know, a number of quarters back, which is truly impressive. And not to, not to like, you know, say you hit it and move right past it, but in a way, like what, what's the next bogey for you guys, what's the next target and how do you get there? Is it, is it more just like, Hey, We're in great markets. We got really good people. Let's just deepen ourselves in the markets we're in. Or do you start thinking about, you know, de novo expansion through team list outs? Or what's kind of the path to the next leg up from here after reaching this important milestone?

Great, great question. And yeah, it has been. We've knocked on the door of the targets that we have set out to hit in 25. So as I mentioned, you know, those targets are clearly in our sight, and we feel like we can hit and get those surpassed here in the near term. I think the next thing for us, and you said it, and I've said this on calls in the past, I think for us, you know, when you look at the way we built this company, and we built it from Tennessee through Alabama through this Gulf Coast region, we've got a phenomenal footprint. We just need to get deeper, you know, and by design, we built the company kind of As y'all heard me say, kind of mile wide, inch deep, because we wanted to get into these regions. We had these opportunities that we wanted to take advantage of. Well, now we just need to get deeper. Not that we wouldn't look at a market expansion, but that would be secondary. And if it would be, it would be something that would make some sense to us. I think we just need to double down, get deeper on what we're doing. To your point, we're already starting our 2026 planning phase. We're doing that now with our team and kind of looking at where we want to position that next set of goals for us. And so we'll be coming out with those over the next couple of quarters as we finalize our 26 forecast. But as I said, I love what we're setting. We can really move, again, the revenue, the EPS, the tangible book, those pieces, those those that's what's driving the stock price. And that's what we want our investors to understand. That's where our focus is. And I think everything you'll see us do is going to be focused around those metrics moving forward.

Yeah, I think, you know, we're a branch like model. And I would say these single office locations that we have, In most of our markets, we have made a lot of progress, but we've got the opportunity to double or triple the size of most all of those markets in the coming near future.

Got it. That's a good reminder. Great. Congrats on all the success. Keep up the good work. Appreciate it.

Thanks, David.

Our next question comes from Catherine Miller with KBW. Catherine, your line is now open. Please go ahead.

Thanks. Good morning, everyone.

Good morning, Catherine.

I wanted to just dig into the margin a little bit. And I know you mentioned that deposit costs will probably come up a little bit moving forward just as growth picks up. Can you talk a little bit about where, new deposit costs are coming on an average. And then on the other side, where new loan yields are coming and just kind of where that incremental margin is coming on right now.

Ron, you want to jump in and dive into those details?

Sure. For the second quarter, our total deposits cost came in at 239. That includes non-interest bearing. Overall, our new production for June was a little bit escalated. It came in at 362, but we did have a larger relationship that we paid a little bit higher interest rates to. So, I think new production overall should be in that 350, 360 range. As far as the loans, for the quarter, we're at 7.11%, and for June, just slightly north of 7, 7.02%. So we're still maintaining the higher level above seven for our loan side.

Okay, great. And then in your guidance, where you still think we'll have two to three bips of NIM expansion every quarter, what are you assuming for rate cuts within that? And I assume if we get rate cuts, that's going to make that number better.

Yes, correct. We're, at this point, we're assuming a 25 basis point in September and then one in December, which really doesn't affect the guidance. It's so late in the year. And yes, being liability sensitive, we do expect to get, probably around this point, one to two basis points of additional lift from the rate cuts. So we're in a really good spot with our margin at this point going forward. We're going to, our margin will expand naturally with or without the rate cuts.

Great. Okay. Very helpful. Thank you. And then you may have mentioned it earlier, but I might have missed it. Can you remind us your expectations for expense growth in the back half of the year?

Yes. We are looking to increase it to, sorry about that, we're increasing it to about the 33.8 to 34 million band. That's for Q3 and pretty much the same guidance for Q4. Again, the heavier lift was in the salary range going forward, but still keeping it tight for Q3 and Q4.

Okay, great. And maybe one more just on that. You talked, Billy, about how you had five quarters of positive operating leverage. Is that still a focus as we go into 26? As we look at 26, is it fair to continue to look at revenue growth being faster than your expense growth?

Yes. Yeah, absolutely. You know, as we said a little bit in the call, you know, when you look at the way this balance sheet's positioned, you know, our ability, our continued ability to grow organically in these markets, Miller alluded to getting deeper. We're in so many just great markets where we've got relatively small share. We've got some really nice share in several markets. We've got some expansion markets where we've got phenomenal share growth opportunities. And so, you know, our whole focus is gonna be getting deeper. So I think, you know, that in itself is gonna generate, I think, you know, outsized growth. Layer in on top of that, Catherine, what Ron has alluded to with kind of the repricing of the loan book So, you know, for us, we think we can hold these expense levels very reasonable. As we said, a lot of it's just going to be talent related from a hiring standpoint, and then just continue to see that operating leverage continue over the next few quarters.

Great. Okay. Awesome. Thank you so much. Great quarter.

Thank you. Thanks, Catherine.

Our next question comes from Russell Gunther with Steffens, Inc., Russell, your line is now open. Please go ahead.

Hey, good morning, guys. Just to quickly circle back to the loan growth discussion, you really do have to go back to the first quarter of 24 to see a mid-single-digit result out of you guys. So here you are, loud and clear on that kind of high single-digit, maybe low double. And to that end, could you just give us a sense for where commercial pipelines stand today versus the linked quarter, and what, if any, sentiment shift you're getting from your commercial borrowers?

Yeah, I'll make a couple comments and I'll ask Brett to jump in and talk a little bit about kind of what he's seen kind of coming through the pipeline. But, you know, pipelines continue to be pretty solid. I would say they are probably at or as good as the levels that we've seen over the last couple of quarters. And again, it goes back, I alluded to it in my comments, the focus that we have on the sales side of the house I think it's as good as it's ever been in our company. Team members get it. Our division president leadership structure that we moved to this year has really worked well. We've got great team members, but there's also just a real intensive focus on bringing in new clients. That said, our pipelines are as good, and then Rhett, maybe you have some color, kind of what you're seeing, what those pipelines are looking like a little bit, maybe any other color that you've got on that side.

Yeah, I mean, to Millie's point, I mean, our pipeline today really is positioned as strong as it has been pretty much throughout the course of the year. So it's, you know, here at the middle part of the year, we've still got, you know, basically a similar amount and opportunity. sitting in our pipeline that we started the year off with. You've seen the result in the group we've seen thus far. As far as the format of that pipeline, the best way I know to put it is we look at the mix of what's in the pipeline, both geographically with product type, et cetera, and it is tracking extremely near the way our portfolio mix sets today. So the type of deals in the pipeline, the location of the deals in the pipeline, There's nothing in there that would give any indication that it would change any degree of concentration within our portfolio at all. So we are continuing to see a very broad mix across every market and every product type we generate business in.

Great. Thank you, guys. And then you spoke about continuing to leverage the current platform organically. as well as continuing to recruit top talent. So could we get a sense for sort of where the recruitment pipeline stands today? And then as you work to get, you know, deeper versus that mile wide, inch deep, are there any particular markets where you're more focused than others?

Yeah, yeah, yeah. I think we're focused everywhere. We said it a second ago, you know, when you look at our company, we've got a number of markets where, you know, where we've either grown from a legacy standpoint where we've acquired really good banks with larger legacy footprints, then we've had a lot of these expansion markets that we've seen. So the expansion markets are where our market share numbers have really tremendous upside. So we're going to probably focus a little more of the recruitment in those markets. And you take a look at whether it's Nashville MSA, Birmingham MSA, For example, you look down in our coastal region with markets like Mobile, Alabama, great growth opportunities that we see. There are others as well, but just those in itself, I mean, those markets, we've just got tremendous opportunity to bring in. We've already added some great bankers to look to bring in some additional bankers to our team in those markets. So when you look at just markets like those that I mentioned, my gosh, the market share upside and just those by themselves could fuel a lot of growth for us. So, yeah, I think that's probably where our focus is going to be, but we'll look to figure out where we'll add talent wherever it fits.

Yeah, this is Miller, and I would add that we are, ABR, always be recruiting, and we are consistently on it. The executive team spends a ton of time In the markets, recruiting bankers, our division presidents are all over at recruiting. That's as big a focus as new clients and new relationships. Great bankers we want on our team.

Excellent. All right. Thank you both. And then last one for me would just be back to the revenue target. I appreciate kind of waiting a quarter or two to get the 26 outlook, but you did get where you needed to go. perhaps a quarter earlier than you otherwise might have. We're still shy of the 1% ROA target, so it would be helpful to get your sense as to whether that's something you still think you will be able to achieve in the back half of this year.

Yeah, I think we'll be close, Russell. I think we'll be real close on the one. I think when you take a look at the numbers, again, a little more of the expense side, if you take a look at the PPNR numbers, You know, a little more in reserve that we put in just because of growth this year. So I think as you normalize the growth a little bit, I think that you should see that number kind of just move up into the mid-90s pretty easily over the next quarter. or so, and then we'll be knocking on the door of that one. We've kind of targeted, as you've heard us talk about, kind of the one in 12 on the ROA and the ROE. We're pretty much there on the ROE. The ROAs, maybe a couple of basis points behind that. But, you know, as we continue to execute, I think that one, we'll move through that pretty quickly over the next several quarters.

All right. Very good, guys. I appreciate you taking my question. Thank you.

Thanks, Russell.

Our next question comes from Steve Moss with Raymond James. Steve, your line is open. Please go ahead.

Hey, good morning, guys. This is Thomas for Steve. Thanks for taking my call. You know, most of my questions have been asked and answered at this point, but, I mean, maybe just on credit, you know, credit metrics remain, you know, really strong here. Are you seeing, you know, any signs of weakness whatsoever? It looks like you have some, maybe some lower yielding fixed rate loans maturing in the fourth quarter this year at looks like 440 based on the slide deck. Have you stress tested those for the rate shock? And, you know, what do you, just broadly speaking, credit front, what are you thinking?

Yeah. And I was all, Rhett's like the Maytag repairman over here. So I will give him an opportunity to talk a little bit. But now credit's good, but I'll let him talk a little bit about it. What he's seeing on on that side any potential weakness, I don't think we're seeing much there, but and then maybe also just talk about I know I know our team has done a lot of stress testing on on the loans as these renewals are coming up with with different rates comment on that.

We have first question as far as the book itself, we really have not seen any. signs of weakness in any particular sectors as we're getting information in from our clients, both prior to year end and year to date. Still seeing consistent performance throughout our existing book in pretty much every area. So we are not forecasting or looking at anything specific right now that we have identified as, I would say, a primary area of concern. As it relates to those low yielding assets that are going to be maturing. We started a project to do some forward looking stress testing, performance stress testing on that book, really about 18 months, almost two years ago. And we have consistently done that sort of looking out in the six to 12 month window of those maturities. And, you know, thus far with what we're looking at, you know, obviously in a few cases, you may have a few that will show some tighter coverage numbers than they were at origination, but nothing that is any indication of inability to service a modified transaction. And so we're very optimistic about that and still feel like the book is positioned well to absorb those rate increases for the borrower, which also benefits the bank.

Okay, great. That's great to hear. That's all from me. Congrats on another great quarter, knocking the cover off the ball again, guys. Appreciate it. Thanks, Thomas.

Just as a reminder, if you would like to ask a question, please press star, followed by 1 on your telephone keypad now. Our next question comes from Christopher Marynack with Janie Montgomery Scott. Your line is now open. Please go ahead.

James Meeker- hey thanks good morning wanted to ask about recruiting across state lines and pushing the geography, whether it's in the Carolinas or. James Meeker- Other states, I know you got a lot to do in your existing footprint as as you've talked about a few times today just curious on recruiting people or dislocations you've seen other markets that could be an opportunity as time passes.

James Meeker- yeah obviously you know, as as you see. James Meeker- See a little bit of. change going on. Obviously, M&A comes into play in some of that. I think we've demonstrated our ability to really execute on some nice lift outs when we've seen a little bit of market disruption. So Chris, I think for us, a lot of it is just kind of waiting and watching. I think we're all, and Miller alluded to this, I think the thing is we've really shifted to a stronger organic model over the last few years. Recruiting is really ramped up as far as kind of importance in our company. So Miller said he, myself, our division presidents, we're all out just continuing to drip on talent that we think would be good culture fits for our company. And so I think that is first and foremost in the markets where we are. I really don't see us looking to do any what I would call major market moves from that standpoint, like we did several years back when we had the opportunity with all those Alabama MSAs. That was such a unique opportunity that gave us the chance to really just fill in the density piece that was missing in our footprint. And so that was a big lift for us as we've talked about. It was a Huge lift for us to all those de novo markets in a real, real short period of time. But for us, I think a lot of it, and again, I said it earlier, is just getting deeper. I think we need to be focused on getting deeper in these great zones where we are. We're always going to take a look at opportunities, but we've got plenty on our plate, I think, in front of us now. So the recruiting, I think you will see, is probably just really close to the zones where we are today.

Yeah, if you think about it, Chris, the markets we're in, these college towns, schools fixing to start back third quarter. There's football season starting back. The businesses in these zones we're in are all very optimistic about the third and fourth quarters that they have ahead. People are excited about being in business, and I just think they want to be in a market. If we get some bankers that want to move here, we're glad to have them. We love where we are, and we love doubling and tripling down on where we are.

Sounds good. Thank you both for that. And just one curiosity, do you see the average loan size in the portfolio kind of pushing higher as the next several quarters develop? It's not just a near-term question. I'm kind of curious kind of where that's going to go over time.

Yeah, and I'll ask Rhett. I don't have the stat in front of me on loan size. I think just as we've gotten bigger, our loan size has moved up some, but I don't think it's really moved up materially. Rhett, just anecdotally, would you comment on that?

Yeah, I would say not from an average perspective. I mean, we certainly do, as we continue to get larger, it has provided us the opportunity to look at the engaged in some larger transactions. But I would say from an average perspective, I don't really see that number moving considerably.

We still focus, Chris. You know, I think we still do a lot of really nice work focusing on singles and doubles. I think when you look at a lot of these really nice, solid Tier 2 MSAs that we're in, we're growing a lot in some of our larger ones. But, you know, we're in a lot of these great tertiary MSAs. where we're still kind of just hitting singles and doubles. And it's nice. And I like building the company that way. I think it's more sustainable. It's less impact to swings and whipsaw effects. But to Rhett's point, we're doing some larger credit, so it might move up a little bit, but I don't think the average is moving up a ton.

Payoffs and paydowns don't sting as much either. That's true. That's true.

Good stuff. Thanks, everybody. I appreciate you taking this morning.

Yeah, thank you, Cruz. Thanks, Cruz.

Thank you very much. We currently have no further questions, so I'll hand back over to Miller for any closing remarks.

Thank you, Ezra, and thank you all for being on the call today and for supporting SmartBank as we work hard every day to grow this bank for our shareholders. Have a great day.

Thank you very much, Miller, and thank you to all our speakers on today's call. We appreciate everyone for joining. That concludes our call. You may now disconnect your lines.