Welcome, everyone, to SmartFinancial, Inc. First Quarter 2026 Earnings Release and Conference Call. We will begin shortly. In the meantime, if you would like to preregister to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. Hello, everyone, and thank you for joining the SmartFinancial, Inc. First Quarter 2026 Earnings Release and Conference Call. My name is Claire, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad. I will now hand over to Nathan Strall, Director of Investor Relations, to begin. Please go ahead.

Thanks, Claire, and good morning, everyone, and thank you for joining us for SmartFinancial, Inc.’s First Quarter 2026 Earnings 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. William Carroll, our President and Chief Executive Officer, will begin our call, followed by Ronald Gorczynski, Chief Financial Officer, who will provide some additional commentary. We will be available to answer your questions at the end of our call. Our comments include forward-looking statements. These statements are subject to risks and uncertainties, and actual results could vary materially. We list the factors that might cause these 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 in the appendices of the earnings release and investor presentation filed on April 20, 2026 with the SEC. I will now turn it over to William 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 SmartFinancial, Inc. As usual, I will open up our call with some commentary and hand it over to Ron to walk through some numbers in greater detail. After our prepared comments, we will open it up with Ron, Nate, Brett Miller, and myself available for Q&A. It was a great start to the year for our company with another very busy quarter as we continue to execute on our strategy of leveraging the great foundation we have built over the last several years. Our team's focus on this execution continues to be outstanding, and 2026 was yet another example of that. So let me jump right into some of our highlights. First, and in my opinion, one of the most important metrics, we continue to increase the tangible book value of our company, which is now up to $27.33 per share, up from $26.86 at year-end. For the quarter, we posted operating earnings of $13.7 million, or $0.81 per diluted share, with total operating revenue coming in at $53.8 million, higher than the $53.3 million in the prior quarter even with two fewer days. We continue to execute on outstanding growth on both sides of the sheet, posting 14% annualized growth in loans and 7% annualized growth in core deposits. Our history of strong credit continues with only 25 basis points in nonperforming assets. I am very pleased with our credit performance and our extremely low level of NPAs. Operating noninterest expenses also came in on target at $32.9 million as we continue to exhibit expense discipline. Looking at the first few pages in the deck, you will see our continuation of some very nice trends. We…

Thanks, Billy, and good morning, everyone. I will start by highlighting some key deposit results. During the quarter, our momentum remained strong, with nonbrokered deposits increasing by $95 million, driven by two factors: new deposit generation at a cost of 2.82%, which was 22 basis points higher than the previous quarter, and seasonal inflows. Given the strength in core funding, we took the opportunity to pay down the remaining $52 million in brokered deposits, which carried an average rate of 4.35%. As we noted on the last call, our year-end totals included some transitory noninterest-bearing deposits. As those deposits rolled off and clients put some excess liquidity to work, noninterest-bearing deposits were over 18% of total deposits at quarter end. Overall, interest-bearing deposits declined by 19 basis points to 2.60% and were 2.58% in March. We continue to maintain a robust liquidity profile demonstrated by our loan-to-deposit ratio of 87%. Net interest income for the quarter was $45.9 million, which was $782,000 higher than the previous quarter, even though this quarter had two fewer days. Our net interest margin also improved by 10 basis points to 3.48%. This increase was mainly driven by an 18 basis point reduction in funding costs, which more than offset a three basis point decline in asset yields. The reduction in funding costs resulted from the full-quarter effects of the prior quarter’s federal rate cuts, the previously mentioned paydowns of higher-cost brokered funding, and new deposit generation and CD renewals at lower rates. The decline in asset yields was caused by a six basis point reduction in loan yields mainly due to the impact of the rate cuts mentioned above and the paydowns and payoffs of higher-rate loans. This reduction was slightly offset by our strategic utilization of balance sheet cash. The rate-average yield on…

Thanks, Ron. As you can tell from Ron's comments, our trends continue to have a nice trajectory. We are successfully executing on the leveraging phase of growth for our company. And on our return metrics, we feel very confident in our ability now to move through the 112% ROA and ROE thresholds as we look into 2026. I mentioned on our last quarter call an internal four-by-four challenge of hitting a $4 EPS run rate by 2026. So, basically, hitting $1 per share in EPS by Q4 of this year. We rolled that initiative out internally during the quarter, and our team embraced it. We have got a little bit of work to do, but we have had a nice start to the year, and we are going to continue to push to hit that EPS target. I like our chances on accomplishing this goal. We believe we are one of the brightest banking stories in the Southeast—outstanding growth markets paired with strong, experienced bankers and a very focused executive team. Our primary effort will be on generating more operating leverage throughout 2026 with our focus on doubling down on our organic strategy and getting deeper in our markets. As I mentioned, pipelines are solid, and I think we can continue growing at this high single-digits-plus pace. Talent acquisition continues to be a high priority for our company. I really like what I have seen during the first part of this year. We have continued to add select revenue producers in several markets and have several more committed to come on board soon. We are constant recruiters, and I like our position as we continue seeing market disruption in the South. Just an anecdotal comment on that: I was at a client event in Alabama last week and had a new SmartFinancial, Inc. client that one of our new bankers had brought over to us come up to me and say how much he enjoyed working with us, saying you guys could do everything the regionals can do, but you are better and more nimble. That sums up our business strategy and our recruiting, and we are having great success with both. So we will continue to look for these organic growth opportunities and remain very focused on recruiting. To summarize, we kicked off a very solid 2026, and we are positioned very well.

We will now open the call for questions.

Hey. Good morning, everyone. Hey, good morning. I wanted to start on the growth outlook from here. Obviously, you guys continue to execute really well on growth, and there have been rumblings of some competitors in Tennessee in particular being very aggressive with rate. I just wanted to see if you were seeing any of that and then the pace of growth in 1Q—if that is sustainable, particularly on loan growth for the rest of the year.

Yeah, Brett, I will start, and Rhett, you chime in from what you are seeing in pipelines as well. We had a really solid first quarter. Our pipeline is still good. As I have said in my comments, I think we can continue at or around that 10% plus/minus. Might be a little more, might be a little bit less, but I like our pace. Competition is—I'll tell you, we were talking about this the other day—we could have had a lot more. We are turning away some deals, some good deals, just because we are seeing some unreasonable rate competition, and that is okay. One of the things that I think you have heard me comment on in past calls is we have really got a nice disciplined approach around our pricing model. Growing both sides of the balance sheet is really important for us. Not that we will not make an exception here or there for the right types of situations, but for the most part, we really hold to making sure that we are hitting our return on risk-adjusted capital targets. We are seeing some competition that is a little bit crazier. We are letting some of those deals go. We are involved in them; sometimes we just think the pricing is too thin. Rhett, you might talk a little bit about pipelines and how you feel about this high single-digits-plus pace.

No, Billy, you kind of stole my thunder because I was going to say the same thing—that, despite the growth we saw a while ago, we actually could have produced more had we not been as disciplined as we were on our return profile. The pipeline itself continues to backfill at a pretty consistent pace. As we have monitored this growth cycle we have had for the past several quarters, we have seen the pipeline just continue to backfill at each quarter-end. We look at what we have got coming for the balance of the next couple or three quarters. All indicators are that the market pace is still good. There is a lot of opportunity out there, and we are certainly getting our pressure. Brett, I would also add it is not just Tennessee. It is all across our footprint. Alabama and the Panhandle have been very strong as well.

That is very clear, guys. Appreciate all that. And then I just wanted to ask on the balance sheet management. Your loan-to-deposit ratio increased last year, and you talked about paying down some brokered CDs this quarter. I just wanted to hear your thoughts on managing the balance sheet and the loan-to-deposit ratio—if there is an upper limit that you might have on that—and then just funding the growth, where you think that comes from in terms of product and how you are going to do that.

Ron, you want to take that?

Sure. We have been hovering around the 86% to 87% loan-to-deposit ratio. We are not afraid to go up to 90%, 90% plus, but at this point we do not see the need. Our deposit generation has been strong throughout our footprint. As you can see for Q1, a lot of it has been money market generated. We are weaning off on the CD side. We feel the relationship building of that money market category has been pretty special for us going forward. Other than that, relationship building, and we have a lot of positive opportunities in our footprint.

Great. Appreciate the color, guys.

Thank you.

Our next question comes from Russell Gunther from Stephens. Please go ahead.

Good morning. I wanted to ask on deposit costs. You did a great job dropping those this quarter. Within the margin update you guys provided, how are you thinking about the ability to lower deposit costs from here if the Fed does remain on pause? Do you have some incremental room, or should we be thinking about potentially some upward pressure on deposit costs going forward?

Ron, do you want to take that? I think from what Russ was saying, with rates being up a little bit, we probably have a little bit more pressure on that, but do you want to discuss thoughts around deposit costs moving forward?

Yeah, I am pretty neutral at this point in time. Our flatness is really due to—we have seen some mix shift in our deposit portfolio. Our team has done a great job of expanding our margin over the last several quarters, but we are coming into a period of seasonality. Second quarter for us is traditionally a heavy cash quarter for clients for tax payments and other uses. Even though we have seen competition through our footprint—as we will probably get a question on that—our team has done a great job of bringing in deposits and keeping the rates down. In essence, I think we will still see a little bit of rate movement upward, but we are only looking at very few basis points quarter over quarter from here on, so pretty neutral at this point.

That is very helpful. And then, you led the witness here a little bit; let me follow up on your deposit cost competition, and it is also a follow-up to Brett's very good question. The Southeast is always a competitive place to operate. Maybe just high level, how would you describe the environment this quarter—has that high level of competition increased? It sounds like on the loan side, but perhaps the deposit side too.

I will grab that one, Russell. It has. I think competition is ramping up. I do not think there is any doubt about that. You have a lot of banks that are out there looking for growth. We have been fortunate. Again, I go back to our process; it has really been good, and I think that is what has allowed us to drive growth and continue to do it at rate levels that we are comfortable at. But it is on both sides. Brett talked about loan pricing; it is the same on deposit pricing. Especially with thoughts around maybe a flatter rate environment in 2026, I think it is fueling a little bit of fire to keep deposit rates higher. We will contend with that. But again, our deposit growth is not always rate sensitive. I know I have talked about it on prior calls: the treasury management team that we have in our company, and they are doing such a great job with their commercial bankers. We are bringing in some really good core operating business outside of just where prevailing money market rates are. I like the way we are growing the deposit side. I think we can continue to do it. Like Ron said, we will probably have a little bit of mix shift this quarter that might give us a little bit of short-term pressure, but all in all, I still think we can continue to do it at the same levels that we have been doing.

Great. Thanks, Billy. And then, last one for me: follow-up in terms of—very helpful to get production yields for the quarter, the 6.40% and the 6.45% in March, and I always go right to that repricing slide on number 14. How are those kinds of yields holding relative to what is coming on in the pipeline? Is that at similar levels, or do you see some pressure there?

I think it is close to the same. Maybe a little bit of additional pressure on those, Russell. But all in all, we are getting some nice yield pickup. We are trying to be strategic and trying to be out in front of these rate resets and maturities well in advance. We are watching it closely. Maybe a little bit of additional pressure, just like new production today, but still to the positive. Ron, anything to add?

Yeah. The renewals and the repricing have been a tailwind for us. We are renewing 88% of the loans that are coming up for repricing or renewal, and they are coming in about 120 basis points higher. They are very similar to rates for today, maybe 10 basis points lighter, but still very strong in that area.

That is great color, guys. Thanks for taking all my questions.

Thanks, Russell.

Our next question comes from Catherine Mealor from KBW. Please go ahead.

Good morning. One follow-up on the margin: In your guidance for the margin to be flat this quarter and then expand slightly in the back half of the year, what are your rate forecasts under that scenario?

We are flat—not assuming up or down at this point in time.

Okay, so no more rate cuts. We are just in a flat rate environment; we are kind of stable to maybe up as we get better loan repricing in the back half of the year.

Correct. Even if deposit costs had a chance to trend up a little bit.

Correct. That is great. Thank you for that clarification. And then on the expense guide, it is helpful to see next quarter's expense guide, which is still kind of shaking out to about that 5% annual growth rate. But just curious if you still feel like that 5% full-year expense growth guide is appropriate. Is there anything with the recruiting you have talked about or anything else that you think we should be aware of to model in the back half of the year?

High level for me, Catherine: The recruiting side—we think we can handle it. We do not go out and do really, really large adds; we are just selectively adding the right producing team members when they come on board. We should be able to absorb that with the increased production. Ron can talk about guidance, but I do not think we have a lot of really heavy expense lift in the forecast going forward. Most of that is already built in. Ron, any color on that?

Yeah, Catherine. We are projecting pretty much for the rest of the year, quarter over quarter, to stay within a tight band between $34.5 million to $35 million—not expecting any creep unless something strategic comes along. We are still looking to get our efficiency ratio to trend down to that target 60% level by year-end. The only other item is the variable comp piece that could change some of this if we do get extended production, and then variable comp will kick in. But no, we look like we can keep within that band.

Okay, great. Very helpful. Great quarter, guys. Thank you.

Thanks, Catherine.

Our next question comes from Stephen Scouten from Piper Sandler. Please go ahead.

Thanks, guys. Going back to NIM for one second, I am kind of curious what you see as the biggest risk to the continued positive trajectory on the NIM in that back half of 2026. What could cause that to be different than expected currently?

Ron, I will let you take a stab at it. Mine is going to be competitive pressure on money market rates and funding rates—probably a big driver in the second half is just not knowing exactly where rates are going to be or what kind of pressures we are going to get. Stephen, I still think, if rates hold steady, we can do a pretty nice job on the loan yield front. I think it is going to be more funding cost pressures potentially. Ron, anything else you would add?

No, exactly. It is all going to be in the funding cost if we do have trending more of our mix shift out of noninterest-bearing. Those are the only other items.

Okay. And then I know you guys noted that more of the growth came from money market and savings. Were there any specials on the money market rates—anything unusual that led to that kind of material pickup there from a mix shift?

I do not think so. I do not think we really did anything. No—we did it with hard work. We prefer selling money markets than CDs. We did not have any rate promos or anything out of the norm, Stephen.

Okay, great. And then just last for me, you noted the director of private banking and some wealth management hires there in Nashville. How do you feel about your Nashville presence today? Is that something we should continue to see you focus on expanding given the current opportunity set? And if so, what could that look like over the next couple of years?

Yeah, it is. As I have said, we are really leaning into all of our zones. We have just got such great ability to grow share in so many of our markets. Obviously, Nashville is a big market. We are really starting to build some nice momentum. I was over there with some clients a couple of weeks ago, and we have got really good energy over there. We have got some nice team members that we have added over the course of the last couple of years, and we have got more that we want to add over there. I think that is a market that is going to be important to us as we go forward. We have a lot of other zones where we are growing share too, but Nashville is going to be one that I think has got a heck of an upside for us.

Great. Appreciate it. Congrats on all the continued progress here.

Thank you.

Our next question comes from Steve Moss from Raymond James. Your line is now open. Please go ahead.

Good morning, guys. A nice quarter here. Most of my questions have been asked and answered. Just kind of curious in terms of the pipeline mix—is it focusing to be more construction, non-owner-occupied CRE, or how are you thinking about dealing with that underlying mix?

I will let Rhett weigh in on the pipeline since he is seeing more of that. We have been able to keep it pretty balanced and pretty agnostic to whatever group. I still think we will be able to hold. Rhett, any additional color on how you see the loan composition looking over the next few quarters?

No, Billy. You nailed it with regard to our focus. I look at the graphic on page nine of the deck that outlines our loan composition. You might have a slight move here or there—one percentage point or two one quarter to the next—but overall, as you can see, it is maintaining a pretty steady pace as it relates to the mix of the portfolio. When you look at our first quarter production, it really ties in almost exactly to those same metrics for the quarter. It is a continued solid, strong mix across the different segments of the book. We are focused on doing that. We have our banker teams set where they have targets and specializations here and there, and each one of them—across the geographies and across our different markets—are carrying their own weight. So far, it has been a very consistent mix.

Appreciate that. And then maybe in terms of expansion—you just talked about the Nashville area. As you hire teams or people selectively, should we think about any de novo expansion around that market? And any thoughts on M&A these days? I know you are seeking to leverage your existing base, but just kind of update the thoughts there.

On your first question on de novo expansion—no, not really. Last quarter, we talked about being excited to get Columbus, Georgia started. I am really excited about what our team is starting to build down there and building really quickly. I have been happy with that. Outside of that, nothing really. We will look to add another Nashville area office sometime here in the foreseeable future—maybe a couple of other small offices to support some of our markets as we look over the next couple of years. Nothing really big on that front, Steve. We will focus on that de novo Columbus zone and really focus on growing Nashville—maybe add a branch there and maybe another one in another market or two over the next couple of years.

Do not feel the firm now, and just the company and the work ethic—it just, yeah. What we are doing now is working.

On M&A—M&A, Miller and I start laughing. We have been successful in M&A over the years, but with the pivot we made a few years ago and the leadership we have put in on the sales side, the organic growth—and I think you see it in the results and what it has done to revenue growth and EPS growth—I said it would take a unicorn to probably get us to move. What we are doing now is working. So we are probably a little light on prioritizing that, Steve, but I love where we are sitting.

Appreciate that, and definitely appreciate all the color here. Thank you very much, guys.

Thank you.

As a reminder, if you would like to ask a question—We currently have no further questions and therefore conclude the Q&A session. I would now like to hand back to Miller Welborn, Chairman of the Board, for any closing remarks.

Thanks, Claire, and I appreciate everybody joining us today. It is great to be with you all. As Billy said, it is an exciting time to be part of this bank. We are constant recruiters, and we have great team members all across the bank footprint and great clients. We just appreciate you all being part of it. Thank you, and have a great day.

This now concludes today's call. You may now disconnect your line.