SmartFinancial Q2 profit rises as loan growth lifts net interest income

Overview

• US commercial bank's Q2 net income and EPS rose yr/yr and sequentially

• Net interest income increased to $48.1 mln from $45.9 mln in prior quarter

• Company reported 15% annualized loan growth and 6% annualized core deposit growth qtr/qtr

Outlook

• Company says ongoing industry consolidation is creating opportunities to gain market share

• SmartFinancial expects to benefit from strong momentum and healthy business pipelines

• Company remains confident in its ability to capitalize on future opportunities

Result Drivers

• LOAN GROWTH - Net organic loan and lease growth of $165 mln, representing 15% annualized qtr/qtr increase, contributed to higher net interest income

• NET INTEREST MARGIN - Net interest margin expanded to 3.52% from 3.48% qtr/qtr, primarily due to asset yields rising faster than liability costs

• CORE DEPOSIT GROWTH - Core deposits grew $83 mln, or 6% annualized qtr/qtr, supporting loan growth and funding needs

Company press release: ID:nBw828DDFa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for SmartFinancial Inc is $46.63, about 2.2% below its July 20 closing price of $47.67

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• July 20 - ServisFirst Bancshares Q2 EPS rises 40% on loan growth, higher net interest margin

• July 20 - Home Bancorp Q2 net income, margin rise

• July 20 - Investar Q2 adjusted EPS beats estimates, net interest margin improves

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)