Exhibit 99.1

2Q 2021

SmartFinancial Announces Results for the Second Quarter 2021

KNOXVILLE, TN – July 20, 2021 - SmartFinancial, Inc. ("SmartFinancial" or the "Company"; NASDAQ: SMBK), today announced net income of $8.8 million, or $0.58 per diluted common share, for the second quarter of 2021, compared to net income of $6.2 million, or $0.41 per diluted common share, for the second quarter of 2020, and compared to net income of $9.8 million, or $0.65 per diluted common share, for the first quarter of 2021.  Operating earnings (Non-GAAP), which excludes securities gains, merger related and restructuring expenses and non-operating items, totaled $9.1 million, or $0.60 per diluted common share, in the second quarter of 2021, compared to $7.3 million, or $0.48 per diluted common share, in the second quarter of 2020, and compared to $9.8 million, or $0.65 per diluted common share, in the first quarter of 2021.

Highlights for the Second Quarter of 2021

● Net organic loan growth of over $87 million, a 16.3% annualized quarter-over-quarter increase

● Operating earnings (non-GAAP) of $9.1 million, or $0.60 per diluted share

● Tangible book value per share (Non-GAAP) of $18.69, a 6.5% annualized quarter-over-quarter increase

● Announced the $38.1 million proposed acquisition of Sevier County Bancshares

● Announced and completed the acquisition of Fountain Equipment Finance (“Fountain”)

● Hired three seasoned commercial banking team members in Auburn, Alabama

Billy Carroll, President & CEO, stated: “Our team continues to execute at a very high level, as evidenced by another nice quarter.  Growth has continued to be very strong, and our sales team are capitalizing on our outstanding markets.  We are also extremely excited to open SmartBank Auburn and continue to organically build out our Alabama footprint.”

SmartFinancial's Chairman, Miller Welborn, concluded: “Another incredibly solid quarter by our team. Our Board could not be more excited about the trajectory of our company. We continue to execute our growth strategy for loans, deposits and earnings and remain extremely bullish on our Company’s future.”

Net Interest Income and Net Interest Margin

Net interest income was $26.9 million for the second quarter of 2021, compared to $26.3 million for the first quarter of 2021. Average earning assets totaled $3.3 billion, an increase of $218.2 million. The growth was primarily driven by an increase in average cash and cash equivalents of $114.0 million, average securities of $26.9 million and average loans and leases of $79.9 million of which $35.7 million of the increase is related to the acquisition of Fountain during the second quarter.  Average interest-bearing liabilities increased $157.3 million, directly related to continued core deposit growth.

The tax equivalent net interest margin was 3.29% for the second quarter of 2021, compared to 3.48% for the first quarter of 2021. The tax equivalent net interest margin was impacted by a 23 basis point decrease in the average yield on interest-earning assets and offset by a 5 basis point decline in the rate on interest-bearing liabilities over the prior quarter.  The decrease in yield on interest-earning assets was primarily driven by a decreased level of loan discount accretion and Payroll Protection Program (“PPP”) fee accretion and additional excess liquidity from the significant deposit growth experienced during the first six months of 2021.  We recognized $1.1 million less of loan discount accretion and PPP fee accretion during the second quarter of 2021 when compared to the first quarter of 2021. However, the interest-earning yield compression was partially offset by the acquisition of Fountain, resulting in a positive margin impact of 13 basis points.

The lower yields on interest-earning assets continue to be mitigated, in part, by a lower cost of funds.  The yield on interest-bearing liabilities decreased to 0.49% for the second quarter of 2021 when compared to 0.54% for the first quarter of 2021. The cost of average interest-bearing deposits was 0.39% for the second quarter of 2021 compared to 0.44% for the first quarter of 2021, a decrease of 5 basis points. The lower cost of average deposits was attributable to the maturing and repricing of time deposits, which decreased 14 basis

points during the period.  The cost of total deposits for the second quarter of 2021 was 0.29% compared to 0.33% in the first quarter of 2021.

The following table presents selected interest rates and yields for the periods indicated:

	Three Months Ended
	Jun		Mar		Increase
Selected Interest Rates and Yields	2021		2021		(Decrease)
Yield on loans and leases	4.52	%	4.67	%	(0.15)	%
Yield on earning assets, FTE	3.65	%	3.88	%	(0.23)	%
Cost of interest-bearing deposits	0.39	%	0.44	%	(0.05)	%
Cost of total deposits	0.29	%	0.33	%	(0.04)	%
Cost of interest-bearing liabilities	0.49	%	0.54	%	(0.05)	%
Net interest margin, FTE	3.29	%	3.48	%	(0.19)	%

Provision for Loan and Lease Losses and Credit Quality

At June 30, 2021, the allowance for loan and lease losses was $18.3 million.  The allowance for loan and lease losses to total loans and leases was 0.74% as of June 30, 2021 and March 31, 2021, respectively.  For the Company’s originated loans and leases, the allowance for loan and lease losses to originated loans and leases, less PPP loans, was 0.86% as of June 30, 2021, compared to 0.93% as of March 31, 2021.  The remaining discounts on the acquired loan and lease portfolio totaled $13.0 million, or 3.61% of acquired loans and leases as of June 30, 2021.  

The following table presents detailed information related to the provision for loan and lease losses for the periods indicated (dollars in thousands):

	Three Months Ended
		Jun			Mar
Provision for Loan and Lease Losses Rollforward		2021			2021			Change
Beginning balance	$	18,370		$	18,346		$	24
Charge-offs		(153)			(120)			(33)
Recoveries		98			77			21
Net charge-offs		(55)			(43)			(12)
Provision		(5)			67			72
Ending balance	$	18,310		$	18,370		$	(60)
Allowance for loan losses to total loans and leases, gross		0.74	%		0.74	%		-	%

The Company is not required to implement the provisions of the Current Expected Credit Losses (“CECL”) accounting standard until January 1, 2023 and is continuing to account for the allowance for loan and lease losses under the incurred loss model.

Nonperforming loans and leases as a percentage of total loans and leases was 0.15% as of June 30, 2021, a decrease of 10 basis points from the 0.25% reported in the first quarter of 2021.  Total nonperforming assets (which include nonaccrual loans and leases, loans and leases past due 90 days or more and still accruing, other real estate owned and other repossessed assets) as a percentage of total assets was 0.18% as of June 30, 2021, as compared to 0.29% as of March 31, 2021. 

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The following table presents detailed information related to credit quality for the periods indicated (dollars in thousands):

	Three Months Ended
		Jun			Mar			Increase
Credit Quality		2021			2021			(Decrease)
Nonaccrual loans and leases	$	3,694		$	4,739		$	(1,045)
Loans and leases past due 90 days or more and still accruing		64			1,495			(1,431)
Total nonperforming loans and leases		3,758			6,234			(2,476)
Other real estate owned		2,499			3,946			(1,447)
Other repossessed assets		199			-			199
Total nonperforming assets	$	6,456		$	10,180		$	(3,724)
Nonperforming loans and leases to total loans and leases, gross		0.15	%		0.25	%		(0.10)	%
Nonperforming assets to total assets		0.18	%		0.29	%		(0.11)	%

Noninterest Income

Noninterest income decreased $548 thousand to $5.1 million for the second quarter of 2021 compared to $5.7 million for the first quarter of 2021.  During the second quarter of 2021, the primary components of the changes in noninterest income were as follows:

● Decrease in insurance commissions of $909 thousand, primarily due from larger commissions recognized in the prior quarter from the placement of life insurance policies;

● Increase in other of $237 thousand, is primarily attributable to $155 thousand of new fee income from the acquisition of Fountain and an increase in the cash surrender value of bank owned life insurance (“BOLI”) income of $57 thousand.

The following table presents detailed information related to noninterest income for the periods indicated (dollars in thousands):

	Three Months Ended
		Jun		Mar		Increase
Noninterest Income		2021		2021		(Decrease)
Service charges on deposit accounts	$	1,048	$	1,009	$	39
Mortgage banking income		1,105		1,139		(34)
Investment services		567		531		36
Insurance commissions		557		1,466		(909)
Interchange and debit card transaction fees		922		839		83
Other		944		707		237
Total noninterest income	$	5,143	$	5,691	$	(548)

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Noninterest Expense

Noninterest expense increased $1.3 million to $20.8 million for the second quarter of 2021 compared to $19.5 million for the first quarter of 2021. During the second quarter of 2021, the primary components of the changes in noninterest expense were as follows:

● Salaries and employee benefits increased $1.3 million, primarily due to the additional headcount from both the Fountain acquisition and hiring of the Gulf Coast Team, and from a reduction in deferred salary cost that was recognized in the prior quarter relating to the PPP loan originations;  

● Data processing and technology increased $130 thousand, primarily from continued infrastructure build;

● Professional services increased $208 thousand, primarily from additional services performed during the quarter;

● Merger related and restructuring expense increased $269 thousand: and

●Other decreased $502 thousand, primarily from an investment in a start-up fintech company recognized in the prior quarter.

The following table presents detailed information related to noninterest expense for the periods indicated (dollars in thousands):

	Three Months Ended
		Jun		Mar		Increase
Noninterest Expense		2021		2021		(Decrease)
Salaries and employee benefits	$	12,203	$	10,869	$	1,334
Occupancy and equipment		2,294		2,341		(47)
FDIC insurance		371		371		-
Other real estate and loan related expenses		506		602		(96)
Advertising and marketing		230		190		40
Data processing and technology		1,509		1,379		130
Professional services		849		641		208
Amortization of intangibles		441		444		(3)
Merger related and restructuring expenses		372		103		269
Other		2,022		2,524		(502)
Total noninterest expense	$	20,797	$	19,464	$	1,333

Income Tax Expense

Income tax expense was $2.5 million for the second quarter of 2021, a decrease of $194 thousand, compared to $2.7 million for the first quarter of 2021.

For the second quarter of 2021, the effective tax rate was 22.0% compared to 21.5% for the first quarter of 2021.

Balance Sheet Trends

Total assets at June 30, 2021 were $3.65 billion compared with $3.30 billion at December 31, 2020.  The increase of $349.4 million is primarily attributable to increases in cash and cash equivalents of $191.8 million, securities available-for-sale of $35.2 million, loans and leases of $86.1 million and bank owned life insurance of $40.8 million. The increase in loans and leases consisted of organic loan growth of $143.1 million and leases acquired from Fountain of $53.7 million, offset by $110.0 million in net PPP loan activity of $138.4 in originations and $248.4 million in forgiveness.

Total liabilities increased to $3.28 billion at June 30, 2021 from $2.95 billion at December 31, 2020.  The increase of $333.1 million was primarily from organic deposit growth of $334.3 million.

Shareholders' equity at June 30, 2021 totaled $373.4 million, an increase of $16.2 million, from December 31, 2020.  The increase in shareholders' equity was primarily from net income of $18.5 million for the six months ended June 30, 2021 and a net change in accumulated other comprehensive income of $155 thousand, which was offset by repurchase of the Company's common stock of $1.2 million and $1.8 million of dividends paid. Tangible book value per share (Non-GAAP) was $18.69 at June 30, 2021, an increase from $18.39 at March 31, 2021.  Tangible common equity (Non-GAAP) as a percentage of tangible assets (Non-GAAP) was 7.93% at June 30, 2021, compared with 8.41% at December 31, 2020.

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The following table presents selected balance sheet information for the periods indicated (dollars in thousands):

	Jun		Dec		Increase
Selected Balance Sheet Information	2021		2020		(Decrease)
Total assets	$	3,654,356	$	3,304,949	$	349,407
Total liabilities		3,280,963		2,947,781		333,182
Total equity		373,393		357,168		16,225
Securities available-for-sale, at fair value		250,817		215,634		35,183
Loans and leases		2,468,318		2,382,243		86,075
Deposits		3,139,472		2,805,215		334,257
Borrowings		78,834		81,199		(2,365)

Conference Call Information

SmartFinancial issued this earnings release for the second quarter of 2021 on Tuesday, July 20, 2021, and will host a conference call on Wednesday, July 21, 2021, at 10:00 a.m. ET.  To access this interactive teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the confirmation number, 5194560.  A replay of the conference call will be available through July 21, 2022, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number, 10158581.  Conference call materials will be published on the Company’s webpage located at http://www.smartfinancialinc.com/CorporateProfile, at 9:00 am ET prior to the conference call.

About SmartFinancial, Inc.

SmartFinancial, Inc., based in Knoxville, Tennessee, is the bank holding company for SmartBank. SmartBank is a full-service commercial bank founded in 2007, with 35 branches across East and Middle Tennessee, Alabama, and the Florida Panhandle.  Recruiting the best people, delivering exceptional client service, strategic branching, and a disciplined approach to lending have contributed to SmartBank’s success. More information about SmartFinancial can be found on its website: www.smartfinancialinc.com.

Source

SmartFinancial, Inc.

Investor Contacts

Billy Carroll

President & CEO

(865) 868-0613   billy.carroll@smartbank.com

Ron Gorczynski

Executive Vice President, Chief Financial Officer

(865) 437-5724 ron.gorczynski@smartbank.com

Media Contact

Kelley Fowler

Senior Vice President, Public Relations & Marketing

(865) 868-0611    kelley.fowler@smartbank.com

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Non-GAAP Financial Measures

Statements included in this earnings release include measures not recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered 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 earnings, (ii) operating return on average assets, (iii) operating pre-tax pre-provision return on average assets, (iv) operating return on average shareholder' equity, (v) return on average tangible common equity, (vi) operating return on average tangible common equity, (vii) operating efficiency ratio, (viii) operating noninterest income, (ix) operating pre-tax pre-provision earnings (x) operating noninterest expense, (xi) tangible common equity, (xii) average tangible common equity, (xiii) tangible book value; (xiv) tangible assets; and ratios derived therefrom, in its analysis of the company's performance. Operating earnings excludes the following from net income: securities gains and losses, proceeds related to the termination of an Alabama Department of Economic and Community Affairs (“ADECA”) loan program, merger related and restructuring expenses.  Operating return on average assets is the annualized operating earnings divided by average assets.  Operating pre-tax pre-provision return on average assets is the annualized operating pre-tax pre-provision income earnings by average assets. Operating return on average shareholders' equity is the annualized operating earnings divided by average equity. Return on average tangible common equity is the annualized net income divided by average tangible common equity. Operating return on average tangible common equity is the annualized operating earnings 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. Operating noninterest income excludes the following from noninterest income: securities gains and losses, proceeds related to the termination of the ADECA loan program.  Operating pre-tax pre-provision earnings is net interest income plus operating noninterest income less operating noninterest expense.  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 common equity and average tangible common equity excludes goodwill and other intangible assets from shareholders' equity and average shareholders' equity, respectively.  Tangible book value is tangible common equity divided by common shares outstanding.  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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Forward-Looking Statements

This news release 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 the Company’s 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) risks associated with our growth strategy, including a failure to implement our growth plans or an inability to manage our growth effectively; (2) claims and litigation arising from our business activities and from the companies we acquire, which may relate to contractual issues, environmental laws, fiduciary responsibility, and other matters; (3) the risk that cost savings and revenue synergies from recently completed acquisitions may not be realized or may take longer than anticipated to realize; (4) disruption from recently completed acquisitions with customer, supplier, employee, or other business relationships; (5) our ability to successfully integrate the businesses acquired as part of previous acquisitions with the business of SmartBank; (6) risks related to the proposed acquisition of Sevier County Bancshares, Inc. (“SCB”); (7) the risk that the anticipated benefits from the proposed acquisition of SCB may not be realized in the time frame anticipated; (8) changes in management’s plans for the future; (9) prevailing, or changes in, economic or political conditions, particularly in our market areas; (10) credit risk associated with our lending activities; (11) changes in interest rates, loan demand, real estate values, or competition; (12) changes in accounting principles, policies, or guidelines; (13) changes in applicable laws, rules, or regulations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; (14) 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; (15) the impact of the COVID-19 pandemic on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; (16) potential increases in the provision for loan losses resulting from the COVID-19 pandemic; 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.

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SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

	Ending Balances
	Jun		Mar		Dec		Sep		Jun
	2021		2021		2020		2020		2020
Assets:
Cash and cash equivalents	$	673,515	$	556,701	$	481,719	$	541,815	$	399,467
Securities available-for-sale, at fair value		250,817		250,937		215,634		214,634		219,631
Other investments		14,584		14,728		14,794		14,829		14,829
Loans held for sale		4,334		7,870		11,721		11,292		6,330
Loans and leases		2,468,318		2,487,129		2,382,243		2,404,057		2,408,284
Less: Allowance for loan losses		(18,310)		(18,370)		(18,346)		(18,817)		(16,254)
Loans and leases, net		2,450,008		2,468,759		2,363,897		2,385,240		2,392,030
Premises and equipment, net		72,314		72,697		72,682		73,934		73,868
Other real estate owned		2,499		3,946		4,619		3,932		5,524
Goodwill and core deposit intangibles, net		90,966		86,350		86,471		86,710		86,327
Bank owned life insurance		72,013		71,586		31,215		31,034		30,853
Other assets		23,306		23,629		22,197		24,168		37,126
Total assets	$	3,654,356	$	3,557,203	$	3,304,949	$	3,387,588	$	3,265,985
Liabilities:
Deposits:
Noninterest-bearing demand	$	807,560	$	777,968	$	685,957	$	669,733	$	645,650
Interest-bearing demand		702,470		683,887		649,129		534,128		479,212
Money market and savings		1,140,029		1,073,941		919,631		871,098		762,246
Time deposits		489,413		512,417		550,498		577,064		652,581
Total deposits		3,139,472		3,048,213		2,805,215		2,652,023		2,539,689
Borrowings		78,834		82,642		81,199		319,391		318,855
Subordinated debt		39,388		39,367		39,346		39,325		39,304
Other liabilities		23,269		22,923		22,021		27,060		24,649
Total liabilities		3,280,963		3,193,145		2,947,781		3,037,799		2,922,497
Shareholders' Equity:
Common stock		15,110		15,105		15,107		15,233		15,217
Additional paid-in capital		252,039		251,836		252,693		254,626		254,396
Retained earnings		103,906		96,034		87,185		78,918		73,283
Accumulated other comprehensive income		2,338		1,083		2,183		1,012		592
Total shareholders' equity		373,393		364,058		357,168		349,789		343,488
Total liabilities & shareholders' equity	$	3,654,356	$	3,557,203	$	3,304,949	$	3,387,588	$	3,265,985

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SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands except share and per share data)

	Three Months Ended										Six Months Ended
	Jun		Mar		Dec		Sep		Jun		Jun		Jun
	2021		2021		2020		2020		2020		2021		2020
Interest income:
Loans and leases, including fees	$	28,323	$	28,018	$	28,594	$	28,621	$	28,663	$	56,341	$	55,097
Securities available-for-sale:
Taxable		916		724		609		546		589		1,640		1,268
Tax-exempt		304		259		306		364		416		563		699
Federal funds sold and other earning assets		309		291		303		327		277		600		879
Total interest income		29,852		29,292		29,812		29,858		29,945		59,144		57,943
Interest expense:
Deposits		2,248		2,331		2,580		2,897		3,366		4,579		8,120
Borrowings		123		117		142		334		249		241		339
Subordinated debt		584		584		584		584		584		1,167		1,167
Total interest expense		2,955		3,032		3,306		3,815		4,199		5,987		9,626
Net interest income		26,897		26,260		26,506		26,043		25,746		53,157		48,317
Provision for loan and lease losses		(5)		67		—		2,634		2,850		62		6,049
Net interest income after provision for loan and lease losses		26,902		26,193		26,506		23,409		22,896		53,095		42,268
Noninterest income:
Service charges on deposit accounts		1,048		1,009		1,032		892		709		2,057		1,479
Gain (loss) on sale of securities, net		—		—		—		(9)		16		—		16
Mortgage banking		1,105		1,139		1,331		1,029		931		2,244		1,515
Investment services		567		531		407		359		363		1,098		801
Insurance commissions		557		1,466		548		560		473		2,023		742
Interchange and debit card transaction fees		922		839		760		868		508		1,761		784
Other		944		707		898		422		511		1,652		993
Total noninterest income		5,143		5,691		4,976		4,121		3,511		10,835		6,330
Noninterest expense:
Salaries and employee benefits		12,203		10,869		11,516		11,032		10,357		23,072		20,363
Occupancy and equipment		2,294		2,341		2,256		2,186		1,996		4,635		3,906
FDIC insurance		371		371		297		534		180		741		360
Other real estate and loan related expense		506		602		516		643		346		1,108		892
Advertising and marketing		230		190		181		253		202		419		400
Data processing and technology		1,509		1,379		1,182		1,131		1,155		2,889		2,163
Professional services		849		641		786		594		868		1,490		1,578
Amortization of intangibles		441		444		571		402		405		886		767
Merger related and restructuring expenses		372		103		702		290		1,477		475		3,573
Other		2,022		2,524		1,946		2,102		1,820		4,547		3,598
Total noninterest expense		20,797		19,464		19,953		19,167		18,806		40,262		37,600
Income before income taxes		11,248		12,420		11,529		8,363		7,601		23,668		10,998
Income tax expense		2,470		2,664		2,499		1,968		1,427		5,134		2,091
Net income	$	8,778	$	9,756	$	9,030	$	6,395	$	6,174	$	18,534	$	8,907
Earnings per common share:
Basic	$	0.59	$	0.65	$	0.60	$	0.42	$	0.41	$	1.24	$	0.60
Diluted	$	0.58	$	0.65	$	0.59	$	0.42	$	0.41	$	1.23	$	0.60
Weighted average common shares outstanding:
Basic		15,003,657		15,011,573		15,109,298		15,160,579		15,152,768		15,007,593		14,773,935
Diluted		15,126,184		15,111,947		15,182,796		15,210,611		15,202,335		15,118,924		14,842,486

9

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

	Three Months Ended
	June 30, 2021						March 31, 2021						June 30, 2020
	Average				Yield/		Average				Yield/		Average				Yield/
	Balance		Interest1		Cost1		Balance		Interest1		Cost1		Balance		Interest1		Cost1
Assets:
Loans and leases, including fees2	$	2,508,388	$	28,256	4.52	%	$	2,428,499	$	27,943	4.67	%	$	2,359,101	$	28,590	4.87	%
Loans held for sale		5,315		67	5.03	%		7,913		75	3.82	%		6,868		73	4.28	%
Taxable securities		164,935		916	2.23	%		136,492		724	2.15	%		122,135		589	1.94	%
Tax-exempt securities		89,296		453	2.04	%		90,849		409	1.82	%		86,227		570	2.66	%
Federal funds sold and other earning assets		531,125		309	0.23	%		417,144		291	0.28	%		297,696		277	0.37	%
Total interest-earning assets		3,299,059		30,001	3.65	%		3,080,897		29,442	3.88	%		2,872,027		30,099	4.22	%
Noninterest-earning assets		286,211						275,272						260,089
Total assets	$	3,585,270					$	3,356,169					$	3,132,116
Liabilities and Stockholders’ Equity:
Interest-bearing demand deposits	$	688,756		304	0.18	%	$	641,214		256	0.16	%	$	453,795		148	0.13	%
Money market and savings deposits		1,117,290		905	0.32	%		983,893		821	0.34	%		748,673		614	0.33	%
Time deposits		502,755		1,039	0.83	%		526,062		1,254	0.97	%		701,390		2,604	1.49	%
Total interest-bearing deposits		2,308,801		2,248	0.39	%		2,151,169		2,331	0.44	%		1,903,858		3,366	0.71	%
Borrowings3		81,525		123	0.61	%		81,837		117	0.58	%		237,143		249	0.42	%
Subordinated debt		39,375		584	5.95	%		39,354		584	6.01	%		39,290		584	5.98	%
Total interest-bearing liabilities		2,429,701		2,955	0.49	%		2,272,360		3,032	0.54	%		2,180,291		4,199	0.77	%
Noninterest-bearing deposits		768,399						700,962						587,322
Other liabilities		17,845						21,928						24,642
Total liabilities		3,215,945						2,995,250						2,792,255
Shareholders' equity		369,325						360,919						339,861
Total liabilities and shareholders' equity	$	3,585,270					$	3,356,169					$	3,132,116
Net interest income, taxable equivalent			$	27,046					$	26,410					$	25,900
Interest rate spread					3.16	%					3.33	%					3.44	%
Tax equivalent net interest margin					3.29	%					3.48	%					3.63	%
Percentage of average interest-earning assets to average interest-bearing liabilities					135.78	%					135.58	%					131.73	%
Percentage of average equity to average assets					10.30	%					10.75	%					10.85	%

¹ Taxable equivalent

² Includes average balance of $266,114, $312,582 and $208,814 in PPP loans for the quarters ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively.

³ Includes average balance of $108,082 in Paycheck Protection Program Liquidity Facility (“PPPLF”) funding for the quarter ended June 30, 2020. No PPPLF funding was used for the quarters ended June 30, 2021 and March 31, 2021.

10

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

YIELD ANALYSIS

	Six Months Ended
	June 30, 2021							June 30, 2020
	Average				Yield/			Average				Yield/
	Balance		Interest1		Cost1			Balance		Interest1		Cost1
Assets:
Loans and leases, including fees2	$	2,468,665	$	56,200		4.59	%	$	2,172,158	$	54,979	5.09	%
Loans held for sale		6,607		141		4.31	%		5,581		118	4.26	%
Taxable securities		150,792		1,640		2.19	%		119,474		1,268	2.13	%
Tax-exempt securities		90,068		862		1.93	%		78,306		970	2.49	%
Federal funds sold and other earning assets		474,449		600		0.26	%		226,726		879	0.78	%
Total interest-earning assets		3,190,581		59,443		3.76	%		2,602,245		58,214	4.50	%
Noninterest-earning assets		280,772							238,749
Total assets	$	3,471,353						$	2,840,994
Liabilities and Stockholders’ Equity:
Interest-bearing demand deposits	$	665,116		560		0.17	%	$	421,288		583	0.28	%
Money market and savings deposits		1,050,961		1,726		0.33	%		707,003		2,003	0.57	%
Time deposits		514,344		2,293		0.90	%		693,382		5,534	1.61	%
Total interest-bearing deposits		2,230,421		4,579		0.41	%		1,821,673		8,120	0.90	%
Borrowings3		81,680		241		0.59	%		144,532		339	0.47	%
Subordinated debt		39,364		1,167		5.98	%		39,279		1,167	5.97	%
Total interest-bearing liabilities		2,351,465		5,987		0.51	%		2,005,484		9,626	0.97	%
Noninterest-bearing deposits		734,867							481,432
Other liabilities		19,876							22,812
Total liabilities		3,106,208							2,509,728
Shareholders' equity		365,145							331,266
Total liabilities and shareholders' equity	$	3,471,353						$	2,840,994
Net interest income, taxable equivalent			$	53,456						$	48,588
Interest rate spread						3.25	%					3.53	%
Tax equivalent net interest margin						3.38	%					3.75	%
Percentage of average interest-earning assets to average interest-bearing liabilities						135.68	%					129.76	%
Percentage of average equity to average assets						10.52	%					11.66	%

¹ Taxable equivalent

² Includes average balance of $289,220 and $106,213 in PPP loans for the six months ended June 30, 2021 and 2020, respectively.

³ Includes average balance of $54,041 in Paycheck Protection Program Liquidity Facility (“PPPLF”) funding for the six months ended June 30, 2020. No PPPLF funding was used for the six months ended June 30, 2021.

11

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

	As of and for The Three Months Ended
	Jun			Mar			Dec			Sep			Jun
	2021			2021			2020			2020			2020
Composition of Loans and Leases:
Commercial real estate:
owner occupied	$	492,750		$	477,293		$	463,771		$	467,569		$	464,073
non-owner occupied		669,741			593,348			549,205			563,082			552,958
Commercial real estate, total		1,162,491			1,070,641			1,012,976			1,030,651			1,017,031
Commercial & industrial		496,114			686,010			634,446			644,498			637,450
Construction & land development		300,704			285,973			278,075			275,172			279,216
Consumer real estate		444,640			432,486			443,930			440,310			459,861
Leases		53,038			—			—			—			—
Consumer and other		11,331			12,019			12,816			13,426			14,726
Total loans and leases	$	2,468,318		$	2,487,129		$	2,382,243		$	2,404,057		$	2,408,284
Asset Quality and Additional Loan Data:
Nonperforming loans and leases	$	3,758		$	6,234		$	5,782		$	2,248		$	3,776
Other real estate owned		2,499			3,946			4,619			3,932			5,524
Other repossessed assets		199			—			—			—			—
Total nonperforming assets	$	6,456		$	10,180		$	10,401		$	6,180		$	9,300
Restructured loans and leases not included in nonperforming loans and leases	$	219		$	250		$	257		$	8		$	9
Net charge-offs to average loans and leases (annualized)		0.01	%		0.01	%		0.08	%		0.01	%		—	%
Allowance for loan and leases losses to loans and leases		0.74	%		0.74	%		0.77	%		0.78	%		0.67	%
Nonperforming loans and leases to total loans and leases, gross		0.15	%		0.25	%		0.24	%		0.09	%		0.16	%
Nonperforming assets to total assets		0.18	%		0.29	%		0.31	%		0.18	%		0.28	%
Acquired loan and lease fair value discount balance	$	12,982		$	12,951		$	14,467		$	15,141		$	16,187
Accretion income on acquired loans and leases		761			1,636			768			960			888
PPP net fees deferred balance		6,651			7,351			4,190			6,348			8,582
PPP net fees recognized		2,132			2,398			2,157			1,812			1,909
Capital Ratios:
Equity to Assets		10.22	%		10.23	%		10.81	%		10.33	%		10.52	%
Tangible common equity to tangible assets (Non-GAAP)1		7.93	%		8.00	%		8.41	%		7.97	%		8.09	%
SmartFinancial, Inc.2
Tier 1 leverage		8.10	%		8.55	%		8.69	%		8.78	%		8.83	%
Common equity Tier 1		10.66	%		11.29	%		11.61	%		11.33	%		10.92	%
Tier 1 capital		10.66	%		11.29	%		11.61	%		11.33	%		10.92	%
Total capital		12.83	%		13.62	%		14.07	%		13.81	%		13.25	%
SmartBank		Estimated3
Tier 1 leverage		8.76	%		9.33	%		9.58	%		9.74	%		9.82	%
Common equity Tier 1		11.53	%		12.31	%		12.79	%		12.57	%		12.14	%
Tier 1 capital		11.53	%		12.31	%		12.79	%		12.57	%		12.14	%
Total capital		12.22	%		13.05	%		13.57	%		13.37	%		12.82	%

¹Total common equity less intangibles divided by total assets less intangibles. See reconciliation of Non-GAAP measures.

²All periods presented are estimated.

³ Current period capital ratios are estimated as of the date of this earnings release.

12

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands except share and per share data)

	As of and for The															As of and for The
	Three Months Ended															Six Months Ended
	Jun			Mar			Dec			Sep			Jun			Jun			Jun
	2021			2021			2020			2020			2020			2021			2020
Selected Performance Ratios (Annualized):
Return on average assets		0.98	%		1.18	%		1.11	%		0.76	%		0.79	%		1.08	%		0.63	%
Return on average shareholders' equity		9.53	%		10.96	%		10.15	%		7.31	%		7.31	%		10.24	%		5.41	%
Return on average tangible common equity¹		12.54	%		14.41	%		13.43	%		9.72	%		9.80	%		13.46	%		7.23	%
Noninterest income / average assets		0.58	%		0.69	%		0.61	%		0.49	%		0.45	%		0.63	%		0.45	%
Noninterest expense / average assets		2.33	%		2.35	%		2.46	%		2.28	%		2.41	%		2.34	%		2.66	%
Efficiency ratio		64.91	%		60.92	%		63.38	%		63.54	%		64.28	%		62.92	%		68.81	%
Operating Selected Performance Ratios (Annualized):
Operating return on average assets1		1.01	%		1.19	%		1.14	%		0.79	%		0.93	%		1.10	%		0.82	%
Operating PTPP return on average assets1		1.30	%		1.52	%		1.45	%		1.35	%		1.53	%		1.41	%		1.46	%
Operating return on average shareholders' equity1		9.83	%		11.05	%		10.34	%		7.57	%		8.58	%		10.43	%		7.00	%
Operating return on average tangible common equity1		12.93	%		14.53	%		13.69	%		10.06	%		11.51	%		13.72	%		9.36	%
Operating efficiency ratio1		63.46	%		60.32	%		60.86	%		62.25	%		58.95	%		61.89	%		61.98	%
Operating noninterest income / average assets1		0.58	%		0.69	%		0.56	%		0.49	%		0.45	%		0.63	%		0.45	%
Operating noninterest expense / average assets1		2.29	%		2.34	%		2.37	%		2.25	%		2.23	%		2.31	%		2.41	%
Selected Interest Rates and Yields:
Yield on loans and leases		4.52	%		4.67	%		4.72	%		4.71	%		4.87	%		4.59	%		5.09	%
Yield on earning assets, FTE		3.65	%		3.88	%		4.01	%		3.88	%		4.22	%		3.76	%		4.50	%
Cost of interest-bearing deposits		0.39	%		0.44	%		0.50	%		0.59	%		0.71	%		0.41	%		0.90	%
Cost of total deposits		0.29	%		0.33	%		0.38	%		0.44	%		0.54	%		0.31	%		0.71	%
Cost of interest-bearing liabilities		0.49	%		0.54	%		0.60	%		0.65	%		0.77	%		0.51	%		0.97	%
Net interest margin, FTE		3.29	%		3.48	%		3.57	%		3.39	%		3.63	%		3.38	%		3.75	%
Per Common Share:
Net income, basic	$	0.59		$	0.65		$	0.60		$	0.42		$	0.41		$	1.24		$	0.60
Net income, diluted		0.58			0.65			0.59			0.42			0.41			1.23			0.60
Operating earnings, basic¹		0.60			0.65			0.61			0.44			0.48			1.25			0.78
Operating earnings, diluted¹		0.60			0.65			0.61			0.44			0.48			1.25			0.78
Book value		24.71			24.10			23.64			22.96			22.57			24.71			22.57
Tangible book value¹		18.69			18.39			17.92			17.27			16.90			18.69			16.90
Common shares outstanding		15,109,736			15,104,536			15,107,214			15,233,227			15,216,932			15,109,736			15,216,932

¹See reconciliation of Non-GAAP measures

13

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

	Three Months Ended															Six Months Ended
	Jun			Mar			Dec			Sep			Jun			Jun			Jun
	2021			2021			2020			2020			2020			2021			2020
Operating Earnings:
Net income (GAAP)	$	8,778		$	9,756		$	9,030		$	6,395		$	6,174		$	18,534		$	8,907
Noninterest income:
Securities gains (losses), net		—			—			—			9			(16)			—			(16)
ADECA termination proceeds		—			—			(465)			—			—			—			—
Noninterest expenses:
Merger related and restructuring expenses		372			103			702			290			1,477			475			3,573
Income taxes:
Income tax effect of adjustments		(96)			(27)			(62)			(77)			(382)			(123)			(931)
Operating earnings (Non-GAAP)	$	9,054		$	9,832		$	9,205		$	6,617		$	7,253		$	18,886		$	11,533
Operating earnings per common share (Non-GAAP):
Basic	$	0.60		$	0.65		$	0.61		$	0.44		$	0.48		$	1.25		$	0.78
Diluted		0.60			0.65			0.61			0.44			0.48			1.25			0.78
Operating Noninterest Income:
Noninterest income (GAAP)	$	5,143		$	5,691		$	4,976		$	4,121		$	3,511		$	10,835		$	6,330
Securities gains (losses), net		—			—			—			9			(16)			—			(16)
ADECA termination proceeds		—			—			(465)			—			—			—			—
Operating noninterest income (Non-GAAP)	$	5,143		$	5,691		$	4,511		$	4,130		$	3,495		$	10,835		$	6,314
Operating noninterest income (Non-GAAP)/average assets1		0.58	%		0.69	%		0.56	%		0.49	%		0.45	%		0.63	%		0.45	%
Operating Noninterest Expense:
Noninterest expense (GAAP)	$	20,797		$	19,464		$	19,953		$	19,167		$	18,806		$	40,262		$	37,600
Merger related and restructuring expenses		(372)			(103)			(702)			(290)			(1,477)			(475)			(3,573)
Operating noninterest expense (Non-GAAP)	$	20,425		$	19,361		$	19,251		$	18,877		$	17,329		$	39,787		$	34,027
Operating noninterest expense (Non-GAAP)/average assets2		2.29	%		2.34	%		2.37	%		2.25	%		2.23	%		2.31	%		2.41	%
Operating Pre-tax Pre-provision ("PTPP") Earnings:
Net interest income (GAAP)	$	26,897		$	26,260		$	26,506		$	26,043		$	25,746		$	53,157		$	48,317
Operating noninterest income		5,143			5,691			4,511			4,130			3,495			10,835			6,314
Operating noninterest expense		(20,425)			(19,361)			(19,251)			(18,877)			(17,329)			(39,787)			(34,027)
Operating PTPP earnings (Non-GAAP)	$	11,615		$	12,590		$	11,766		$	11,296		$	11,912		$	24,205		$	20,604
Non-GAAP Return Ratios:
Operating return on average assets (Non-GAAP)3		1.01	%		1.19	%		1.14	%		0.79	%		0.93	%		1.10	%		0.82	%
Operating PTPP return on average assets (Non-GAAP)4		1.30	%		1.52	%		1.45	%		1.35	%		1.53	%		1.41	%		1.46	%
Return on average tangible common equity (Non-GAAP)5		12.54	%		14.41	%		13.43	%		9.72	%		9.80	%		13.46	%		7.23	%
Operating return on average shareholders' equity (Non-GAAP)6		9.83	%		11.05	%		10.34	%		7.57	%		8.58	%		10.43	%		7.00	%
Operating return on average tangible common equity (Non-GAAP)7		12.93	%		14.53	%		13.69	%		10.06	%		11.51	%		13.72	%		9.36	%
Operating Efficiency Ratio:
Efficiency ratio (GAAP)		64.91	%		60.92	%		63.38	%		63.54	%		64.28	%		62.92	%		68.81	%
Adjustment for taxable equivalent yields		(0.30)	%		(0.28)	%		(0.30)	%		(0.32)	%		(0.34)	%		(0.31)	%		(0.34)	%
Adjustment for securities gains (losses)		—	%		—	%		—	%		0.02	%		(0.04)	%		—	%		(0.02)	%
Adjustment for merger related income and costs		(1.15)	%		(0.32)	%		(2.22)	%		(0.99)	%		(4.95)	%		(0.72)	%		(6.46)	%
Operating efficiency ratio (Non-GAAP)		63.46	%		60.32	%		60.86	%		62.25	%		58.95	%		61.89	%		61.98	%

¹Operating noninterest income (Non-GAAP) is annualized and divided by average assets.

²Operating noninterest expense (Non-GAAP) is annualized and divided by average assets.

³Operating return on average assets (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average assets.

⁴Operating PTPP return on average assets (Non-GAAP) is the annualized operating PTPP earnings (Non-GAAP) divided by average assets.

⁵Return on average tangible common equity (Non-GAAP) is the annualized net income divided by average tangible common equity (Non-GAAP).

⁶Operating return on average shareholders’ equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average equity.

⁷Operating return on average tangible common equity (Non-GAAP) is the annualized operating earnings (Non-GAAP) divided by average tangible common equity (Non-GAAP).

14

SmartFinancial, Inc. and Subsidiary

Condensed Consolidated Financial Information - (unaudited)

(dollars in thousands)

NON-GAAP RECONCILIATIONS

	Three Months Ended										Six Months Ended
	Jun		Mar		Dec		Sep		Jun		Jun		Jun
	2021		2021		2020		2020		2020		2021		2020
Tangible Common Equity:
Shareholders' equity (GAAP)	$	373,393	$	364,058	$	357,168	$	349,789	$	343,488	$	373,393	$	343,488
Less goodwill and other intangible assets		90,966		86,350		86,471		86,710		86,327		90,966		86,327
Tangible common equity (Non-GAAP)	$	282,427	$	277,708	$	270,697	$	263,079	$	257,161	$	282,427	$	257,161
Average Tangible Common Equity:
Average shareholders' equity (GAAP)	$	369,325	$	360,919	$	354,026	$	347,907	$	339,861	$	365,145	$	331,266
Less average goodwill and other intangible assets		88,551		86,424		86,561		86,206		86,484		87,494		83,427
Average tangible common equity (Non-GAAP)	$	280,774	$	274,495	$	267,465	$	261,701	$	253,377	$	277,651	$	247,839
Tangible Book Value per Common Share:
Book value per common share (GAAP)	$	24.71	$	24.10	$	23.64	$	22.96	$	22.57	$	24.71	$	22.57
Adjustment due to goodwill and other intangible assets		(6.02)		(5.71)		(5.72)		(5.69)		(5.67)		(6.02)		(5.67)
Tangible book value per common share (Non-GAAP)1	$	18.69	$	18.39	$	17.92	$	17.27	$	16.90	$	18.69	$	16.90
Tangible Common Equity to Tangible Assets:
Total Assets	$	3,654,356	$	3,557,203	$	3,304,949	$	3,387,588	$	3,265,985	$	3,654,356	$	3,265,985
Less goodwill and other intangibles		90,966		86,350		86,471		86,710		86,327		90,966		86,327
Tangible Assets (Non-GAAP):	$	3,563,390	$	3,470,853	$	3,218,478	$	3,300,878	$	3,179,658	$	3,563,390	$	3,179,658
Tangible common equity to tangible assets (Non-GAAP)		7.93%		8.00%		8.41%		7.97%		8.09%		7.93%		8.09%

¹Tangible book value per share is computed by dividing total stockholder's equity, less goodwill and other intangible assets by common shares outstanding.

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