SmartFinancial : Fourth Quarter 2022 Earnings Call Presentation

INVESTOR CALL

4Q 2022

January 24, 2023, 10:00am ET

Webcast: www.smartbank.com (Investor Relations)

Audio Only: 1-844-200-6205

Access Code: 179408

Miller Welborn

Chairman of the Board

Billy Carroll

President & CEO

Ron Gorczynski

CFO

DISCLOSURES

Forward-Looking Statements

This presentation 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, including statements regarding the effects of the COVID-19 pandemic on SmartFinancial Inc.'s ("SmartFinancial") business and financial results and conditions, 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) the risk of litigation and reputational risk associated with historic acquisition activity;

1. the risk that cost savings and revenue synergies from recently completed acquisitions may not be realized or may take longer than anticipated to realize; (3) disruption from recently completed acquisitions with customer, supplier, employee, or other business relationships; (4) our ability to successfully integrate the businesses acquired as part of previous acquisitions with the business of SmartBank; (5) changes in management's plans for the future; (6) prevailing, or changes in, economic or political conditions, 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; (7) a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, or uncertainties surrounding the debt ceiling and the federal budget; (8) credit risk associated with our lending activities; (9) changes in loan demand, real estate values, or competition; (10) developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; (11) changes in accounting principles, policies, or guidelines; (12) changes in applicable laws, rules, or regulations; (13) adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic and related variants; (14) the continued impact of the COVID-19 pandemic and related variants on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (15) 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;

1. the effects of war or other conflicts including the impacts related to or resulting from Russia's military action in Ukraine; and (17) 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.

Non-GAAP Financial Measures

Statements included in this presentation include Non-GAAP financial measures 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, including: (i) operating revenue, (ii) operating earnings, (iii) operating return on average assets, (iv) operating return on average shareholders' equity, (v) return on average tangible common equity, (vi) operating return on average tangible common equity, (vii) operating efficiency ratio; (viii) tangible common equity; (ix) average tangible common equity; (x) tangible book value; (xi) operating pre-taxpre-provision earnings; (xii) operating noninterest income; (xiii) operating noninterest expense; (xiv) tangible assets; and ratios derived therefrom, in its analysis of the company's performance. Operating revenue includes the earnings from net interest income and operating noninterest income (Non-GAAP). Operating earnings excludes the following from net income: securities gains and losses, merger related and restructuring expenses, and the income tax effect of adjustments. Operating return on average assets is the annualized operating earnings (Non-GAAP) divided by average assets. Operating return on average shareholders' equity is the annualized operating earnings (Non-GAAP) divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity (Non-GAAP). Operating return on average tangible common equity is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP). The operating efficiency ratio includes an adjustment for taxable equivalent yields and excludes securities gains and losses and merger related and restructuring expenses from the efficiency ratio. Tangible common equity and average tangible common equity exclude goodwill and other intangible assets from shareholders' equity and average shareholders' equity. Tangible book value excludes goodwill and other intangible assets less shareholders' equity divided by common shares outstanding. Operating pre-taxpre-provision earnings is net interest income plus operating noninterest income (Non-GAAP) less operating noninterest expense (Non-GAAP). Operating noninterest income excludes the following from noninterest income: securities gains and losses. Operating noninterest expense excludes the following from noninterest expense: prior year adjustments to salaries, merger related and restructuring expenses and certain franchise tax true-up expenses. Tangible assets excludes goodwill and other intangibles from total assets. 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 believes these non-GAAP financial measures also 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.

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SMARTBANK 2022: A YEAR IN REVIEW

$ in Millions, except per share data

FINANCIAL HIGHLIGHTS:

BALANCE SHEET / NON-GAAPREVENUE METRICS:							'20 -'22
	2020Y		2021Y		2022Y		CAGR3
BALANCE SHEET		Total Loans and Leases		$ 2,382.2	$	2,693.4	$	3,229.0	16%
	Annual Net Balance Loan Growth (Excl. PPP)	190.1		547.8		587.9	76%
PERFORMANCE DRIVEN BY
TALENTED COMMERCIAL		Total Deposits		2,805.2		4,021.9		4,077.1	21%
RELATIONSHIP MANAGERS		Loan / Deposit Ratio		85%		67%		79%
RECORD OPERATING		Operating Revenue1		115.8		137.3		165.1	19%
REVENUE		Operating PTPP Earnings1		43.7		49.6		59.3	17%
NON-CYCLICALNONINTEREST		Operating Noninterest Income	1	15.0		23.9		27.6	36%
INCOME GROWTH		Operating Noninterest Income (Excl. Mtg. Bking)1	11.1		19.9		26.0	53%

NON-GAAPPERFORMANCE METRICS:

POSITIVE OPERATING

LEVERAGE IMPROVING

PROFITABILITY

RECORD OPERATING EPS

CREATING SHAREHOLDER VALUE

Operating Return on Average Assets1		0.89%		0.98%		0.92%
Operating Return on Average Tang. Common Equity1		10.7%		12.8%		13.7%
Operating Efficiency Ratio1		61.7%		63.6%		63.8%
Diluted Operating Earnings Per Share1	$	1.82	$	2.39	$	2.57	19%
Tangible Book Value Per Share (Excl. AOCI)1,2	$	17.77	$	19.17	$	21.18	9%

OPERATIONAL ACHIEVEMENTS:

	 NCINO© COMMERCIAL LOAN ORIGINATION SYSTEM IMPLEMENTED	 ESTABLISHED PERMANENT DOTHAN, AL AND TALLAHASSEE, FL LOCATIONS
	 OPENED BRANCHES IN NASHVILLE / FRANKLIN, TN AND BIRMINGHAM, AL	 SUBSTANTIAL MODERNIZATION OF ATM AND CASH RECYCLER FLEETS
	 CONSOLIDATED CROSSVILLE AND SEVIERVILLE, TN OPERATIONS	 ENHANCED INSURANCE PLATFORM WITH SUNBELT INSURANCE ACQUISITION
1)	Non-GAAP financial measure - for a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix	3
2)	AOCI: Accumulated Other Comprehensive Income
3)	CAGR: Compound Annualized Growth Rate

QUARTERLY HIGHLIGHTS: FOURTH QUARTER 2022

$0.76

DILUTED OPERATING

EPS1

$4.6

BILLION IN TOTAL

ASSETS

DILUTED EARNINGS PER SHARE

$0.77 $0.76

$0.68 $0.69

BOOK VALUE PER SHARE

$25.56	$24.56	$25.59

$20.43

$21.18

$0.52

$19.26

$18.02

$0.40

$18.02

$19.09

15%

QOQ2 ANNUALIZED

TANG. BOOK VALUE

PER SHARE GROWTH

(EXCLUDING AOCI)1

1.10%

OPERATING RETURN

ON AVERAGE ASSETS1

16.5%

OPERATING RETURN

AVERAGE TANG.

COMMON EQUITY1

61%

OPERATING

EFFICIENCY RATIO1

17%

QOQ ANNUALIZED

ORGANIC LOAN3

GROWTH4

(5%)

QOQ DEPOSIT CONTRACTION

79%

LOAN / DEPOSIT

RATIO

0.10%

NON-PERFORMING ASSETS / ASSETS

4Q21		3Q22	4Q22
		GAAP EPS			DILUTED OPERATING EPS1

RETURN ON AVERAGE ASSETS

1.11% 1.10%

0.95% 0.96%

0.77%

0.59%

4Q21		3Q22		4Q22
		GAAP ROAA		OPERATING ROAA 1

4Q21		3Q22		4Q22
			1
		BV PER SHARE		TBV PER SHARE
			1,5
				AOCI IMPACT

RETURN ON AVERAGE TANGIBLE

COMMON EQUITY

16.7% 16.5%

14.4% 14.4%

10.7%

8.2%

4Q21	3Q22		4Q22
		GAAP ROATCE			OPERATING ROATCE 1

Financial data as of or for the three months ended 12/31/22

1. Non-GAAPfinancial measure - for a reconciliation of Non-GAAP financial measures to their most directly comparable GAAP measures, see the Appendix
2. QoQ: Quarter-over-Quarter
3. "Loans" for purposes of this presentation includes all SmartFinancial loans and leases
4. Organic loan growth excludes PPP loans
5. AOCI: Accumulated Other Comprehensive Income

4

SMARTFINANCIAL: EXPANDING SOUTHEAST FRANCHISE

$4.6

BILLION IN TOTAL

ASSETS

$3.2

BILLION IN TOTAL

LOANS

$4.1

BILLION IN TOTAL

NASHVILLE

KNOXVILLE

CHATTANOOGA

HUNTSVILLE

BIRMINGHAM

TUSCALOOSA

AUBURN

MONTGOMERY

DEPOSITS

41

TOTAL BRANCHES

MOBILE

PENSACOLA

DOTHAN

TALLAHASSEE

PANAMA CITY

SMARTBANK BRANCH OFFICES

LOAN PRODUCTION OFFICE

We are building a culture where Associates thrive and are empowered to be leaders. The core values that we have established as a company help us operate in unison and have become a critical part of our culture. Our Associates are key to SmartBank's success.

Balance sheet and branch count represent 12/31/22 balances 1) Knox News Sentinel Top Workplaces survey

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