SmartFinancial, Inc. (NASDAQ:SMBK) Q2 2019 Earnings Conference Call - Final Transcript

Jul 25, 2019 • 10:00 am ET

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SmartFinancial, Inc. (NASDAQ:SMBK) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning. And welcome to the SmartFinancial Second Quarter 2019 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Miller Welborn, Chairman of the Board. Please go ahead.

Executive
Wesley Miller Welborn

Thanks, Kerry. Good morning, folks, and thanks for joining us today. And as always, we appreciate your interest and investment in SmartFinancial. Joining me this morning are Billy Carroll, our CEO and President; Ron Gorczynski, our CFO; and Frank Hughes, our Investment Relations Officer.

Before we get started this morning, please refer to page 2 of our slide deck that we filed this morning, and in particular, if you would see our forward-looking and non-GAAP statement disclosures, and our Safe Harbor provisions, comments.

Yesterday afternoon, we released our Q2 '19 earnings. And I have to say, overall, we feel it's a great quarter for SmartFinancial. Obviously, there's a little bit of noise with some anomalies from the quarter with our income spike due to the receipt of our termination fee from a previous deal. But we feel the theme from the Q2 was definitely repositioned with solid results. A couple of highlights. We had record income of $9.1 million. Incredibly strong loan production. We had great pure deposit growth of 10% plus for the quarter, which we'll expand on a little bit later.

This morning, strong quarter for talent acquisition with new market leads, both in our Huntsville, Alabama and our Murfreesboro, Tennessee market, two of our markets where we feel have our top potential strong NIM that we're reporting and also continued strong margin. I'm now going to turn it over to Billy Carroll to give a little bit of color, and I'll complete my remarks by saying that I'm very excited about what the balance of this year holds for all of our stakeholders and clients.

We're on a solid trajectory, and our Board is engaged and supportive of where this management team is headed. Thanks. Billy?

Executive
William Young Carroll

Thanks, Miller. I'll open up with some anecdotal comments and then turn it over to Ron and let him walk through the deck. As Miller said, a really solid repositioning quarter for us. We let you know last quarter, we would be utilizing Q2 to reset several areas of our company to position us better moving forward.

Obviously, we had a strong GAAP earnings quarter of $9.1 million, and a portion of that income was attributed to the deal termination fee. While we consider the termination fee non-core, we utilize that income tailwind to focus on a couple of areas that will position us well moving ahead. First, we restructured our finance team, now led by Ron Gorczynski. The team is better suited to handle the needs of the $2.5 billion company. Ron joined us a year ago after a successful career with Bank of North Carolina. He is now retooled and adds great experience needed for a growing public bank.

We also centralized our deposit operations area and a office space that we added through the Foothills