Overview
SmartFinancial, Inc. is a bank holding company headquartered in Knoxville, Tennessee, operating SmartBank — a full-service commercial bank founded in 2007. The bank has a regional footprint across Tennessee, Alabama, and Florida, with a strategic focus on disciplined lending, organic growth, and relationship-based commercial banking.
Financial Performance Summary (Q4 2025)
Net income was $13.7 million ($0.81 per diluted share), up from $9.6 million ($0.57) in Q4 2024. Operating earnings was $13.7 million, flat quarter-over-quarter but down from $14.5 million in Q3 2025. Had seven consecutive quarters of positive operating leverage.
Growth Highlights
Loan and lease growth was $141 million (13% annualized QoQ), deposit growth was $102 million (8% annualized QoQ), tangible book value per share growth was 13% QoQ and 17% year-over-year, and added commercial bankers in Columbus, Georgia.
Net Interest Income and Margin
Net interest income was $45.1 million, up from $42.4 million in Q3 2025, net interest margin (FTE) expanded to 3.38% from 3.25%, and margin expansion was driven primarily by lower deposit and funding costs, despite slightly declining asset yields.
Balance Sheet Strength
Total assets of $5.86 billion (up $584.9 million YoY), and growth was driven mainly by loans and leases (+$457.2 million).
Total deposits increased by $466.3 million. Reduction in brokered deposits improved funding quality. The issuance of $100 million in subordinated debt strengthened the capital.
Shareholders’ equity was $552.5 million (up $61.0 million YoY), and tangible common equity ratio improved to 7.93%.
Illustrative Stock Chart
Why an Investor Might Pass on SmartFinancial, Inc.?
Despite strong operational performance, some investors may hesitate for the following reasons:
1. Regional Concentration Risk
SmartFinancial operates primarily in the Southeast U.S. Economic slowdowns, real estate corrections, or regional credit stress could disproportionately affect earnings.
2. Limited Scale Compared to Larger Banks
With under $6 billion in assets, SmartFinancial lacks the diversification, pricing power, and technological leverage of larger national banks, making it more vulnerable during economic downturns.
3. Earnings Growth Appears Near-Term Peaked
Operating earnings were flat quarter-over-quarter and declined slightly from Q3 2025, suggesting momentum may be stabilizing rather than accelerating.
4. Interest Rate Sensitivity
Future margin expansion depends heavily on favorable interest rate dynamics. A rising-rate environment or increased competition for deposits could pressure margins.
5. Valuation vs. Growth Trade-Off
With strong tangible book value growth already reflected, upside potential may be limited unless loan growth and margin expansion meaningfully exceed expectations.
Conclusion
SmartFinancial, Inc. delivered a strong and disciplined performance in 2025, marked by solid growth, improving margins, and balance-sheet expansion.