Highlights

  • SmartFinancial shows 33.95% one-year basic EPS growth, P/E of 13.44 and PEG of 0.00.
  • Third quarter net income was $18.6 million, or $1.10 per diluted common share.
  • Net organic loan and lease growth was $174 million; core deposits grew $163 million.
  • Tangible book value per common share, a non-GAAP measure, was $28.50 at September 30, 2026.

SmartFinancial (NYSE:SMBK) reported third quarter 2026 net income of $18.6 million, or $1.10 per diluted common share, and the undervalued growth stock figures read 33.95% one-year growth in basic earnings per share, a trailing twelve-month P/E of 13.44 and an expected-basis PEG of 0.00, with shares trading at USD 48.50 on October 28, 2026, down 0.64%. Alongside those figures, the bank holding company opened a full-service financial center in Columbus, Georgia, recognized a $2.6 million tax benefit from purchasing transferable energy tax credits, and issued its results on October 19.

Based in Knoxville, Tennessee, and incorporated in Tennessee, SmartFinancial is the bank holding company for SmartBank, a full-service commercial bank founded in 2007. SmartBank operates branches across Tennessee, Alabama, Florida and Georgia and a loan production office in Tennessee. Total assets were $6.32 billion at September 30, 2026, against $5.86 billion at December 31, 2025.

Growth: Third Quarter Earnings, Loans and Deposits

Net income was $18.6 million, or $1.10 per diluted common share, in the third quarter against $13.7 million, or $0.81, a year earlier, and $16.3 million, or $0.96, in the prior quarter. Basic earnings per share were $1.11 against $0.82 a year earlier. For the nine months, net income was $48,629 thousand against $36,644 thousand, with basic earnings per share of $2.89 against $2.18 and diluted earnings per share of $2.86 against $2.17.

Net interest income was $49.4 million against $48.1 million in the prior quarter, on average earning assets of $5.71 billion. Loans and leases grew $174 million on a net organic basis, a 15% annualized quarter-over-quarter increase, and core deposits grew $163 million, a 12% annualized increase.

Valuation: P/E of 13.44, PEG of 0.00 and Book Value Measures

The P/E ratio of 13.44 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 is on an expected basis. Tangible book value per common share, a non-GAAP measure, was $28.50 against $26.85 at December 31, 2025. Return on average assets was 1.20% against 1.10% in the prior quarter, return on average shareholders' equity was 12.64% against 11.46%, and return on average tangible common equity, a non-GAAP measure, was 15.07% against 13.74%.

Chairman Miller Welborn said tangible book value per share grew 4% annualized during the quarter including accumulated other comprehensive income and 15% annualized excluding those effects. President and Chief Executive Officer Billy Carroll said on the October 20 call that tangible book value is one of the most important metrics to him.

Capital Position, Dividends and Funding

Shareholders' equity was $581.3 million, up $28.8 million from December 31, 2025, reflecting net income of $48.6 million for the nine months, partly offset by a $16.9 million increase in accumulated other comprehensive loss and dividends paid of $4.5 million. Tangible common equity as a percentage of tangible assets, a non-GAAP measure, was 7.83% against 7.93%.

Estimated regulatory ratios for SmartFinancial were a Tier 1 leverage ratio of 8.49%, a common equity Tier 1 ratio of 9.80% and a total capital ratio of 12.62%. Total deposits rose $423.4 million since year-end, while noninterest-bearing demand deposits fell $142.8 million.

Disclosed Risks and Fourth Quarter Outlook

The tax equivalent net interest margin was 3.45% against 3.52% in the prior quarter, which the company attributed primarily to higher funding costs; the cost of total deposits was 2.26% against 2.15%. The allowance for credit losses was $45.6 million, or 0.94% of loans and leases against 0.97%. Nonaccrual loans and leases were $13,602 thousand against $11,474 thousand, nonperforming assets were 0.25% of total assets against 0.23%.

Noninterest expense was $36.4 million against $34.0 million, mainly on a $1.0 million increase in other real estate and loan related expenses and a $601 thousand increase in salaries and employee benefits. The efficiency ratio was 63.19% against 60.69%. Management said on the call that delinquencies rose slightly at its equipment finance subsidiary as higher diesel prices strained some transportation borrowers, and that a higher rate forecast adds challenges. Income tax expense was $1.9 million against $4.2 million, reflecting the $2.6 million tax benefit.

For the fourth quarter of 2026, management guided to a net interest margin around 3.45%, operating noninterest income of approximately $7.5 million, operating noninterest expense of $35 million to $35.5 million, and salaries and benefits of $21 million to $21.5 million. It expects an effective tax rate of 19.5% to 20.5% and said it is maintaining its high single digits plus growth guidance.