SmartFinancial, Inc. (NASDAQ:SMBK) Q2 2018 Earnings Conference Call - Final Transcript
Jul 25, 2018 • 10:00 am ET
(Operator Instructions) Tyler Stafford, Stephens Inc.
This is actually Gordon McGuire on for Tyler this morning. So I just wanted to start on the accretion. I think, Billy, in the prepared remarks, you mentioned some nonrecurring accretion in 2Q. And I'm not sure if I caught if that was quantified during the prepared remarks. How much of that $2.6 million was more accelerated versus what you would have expected on a scheduled basis?
Yes. We have, I think we've got it laid out, and Bryan I'll let you speak to the numbers. I think what we've also got, Gordon, in that again, we've got kind of a new -- kind of a reset on our accretion run rate going forward with Southern. And so we've kind of got, I think at what I -- what we term our core accretion has moved up as well as having a little bit of a pop with one. But Bryan do you want to speak to the specifics on the numbers and kind of what you think going forward?
Sure. I'd say, if you exclude the impact from Southern, we're probably talking about an additional $800,000 for the quarter. A couple of years ago, in terms of what it means for margin, I would have said, all right, we were at 20 basis points. Then we clicked up, and now we're at 30. And now with the addition of Southern and then depending on Foothills, later this year, I think, we're probably looking at closer to 40 basis points to NIM on just a standard month-over-month, quarter-over-quarter base accretion level.
So I guess -- and -- I guess to answer it, Gordon probably net about $800,000 for the quarter.
And that 40 basis point included Foothills so that'll be kind of a 4Q number?
That's a looking forward, I guess you'd say, I mean, we do say forward-looking guidance. Now that is best case now, and of course, when everything closes, we'll do the whole evaluation, the whole nine yards. But initially, that's what we're looking at.
Just on the deposit cost, how much of that was pro forma, just adjustments for Southern versus the competitive pricing pressure that all the banks are seeing this quarter? And where would you expect those betas to go or trend from here?
Sure. I'll tackle the first part. Southern -- of what we saw, the uptick was 1, maybe 2 basis points of it, the majority of it being our legacy side. And speaking about deposit betas, if we look back, fourth quarter, we didn't see any uptick/we were able to lag rates. Saw a little bit of uptick in first, now in the second quarter, we are seeing a little bit more -- it has been, I'll call it selective. We have great CD rates. We are running like a lot of folks being -- running CD specials on occasion in selective markets, and we're seeing a little bit of uptick, of course, on the money