SmartFinancial Inc. (NYSE:SMBK) Caps Strong 2025 with Earnings Beat and Margin Expansion

SmartFinancial Inc. Caps Strong Year with Earnings Beat, Margins Expand

SMARTFINANCIAL INC (NYSE:SMBK) reported its fourth-quarter and full-year 2025 results, delivering a performance that exceeded analyst expectations on the bottom line and showcasing significant year-over-year profit growth. The bank holding company, parent to SmartBank, concluded what its CEO termed a "year of tremendous momentum build," characterized by robust loan growth, expanding net interest margins, and consistent operational efficiency.

Earnings and Revenue Performance Versus Estimates

For the quarter ending December 31, 2025, SmartFinancial reported net income of $13.7 million, or $0.81 per diluted share. This represents a substantial 43% increase in earnings per share compared to the $0.57 reported in the fourth quarter of 2024. Sequentially, earnings were flat compared to the third quarter of 2025, which also saw $0.81 per share.

The company's results surpassed Wall Street forecasts:

• Reported EPS (Non-GAAP): $0.81
• Analyst Estimate (Non-GAAP EPS): $0.7983
• Reported Revenue: $53.31 million
• Analyst Estimated Revenue: $52.41 million

This dual beat on both earnings per share and revenue highlights the company's ability to grow its top line while maintaining profitability. For the full year 2025, management highlighted a 17% increase in tangible book value per share and the seventh consecutive quarter of positive operating leverage.

Market Reaction and Price Action

The initial market reaction to the earnings release appears measured. In after-hours trading following the announcement, the stock showed no significant movement. However, a broader view of recent performance reveals positive momentum leading into the report:

• Last Week Performance: +2.93%
• Last Two Weeks Performance: +5.38%
• Last Month Performance: -1.52%

This suggests that some optimism may have been priced into the stock ahead of the earnings release, with investors anticipating solid results. The lack of a dramatic after-hours move could indicate the report was largely in line with or slightly better than elevated expectations.

Key Highlights from the Fourth Quarter

The earnings press release detailed several pillars of strength for the quarter:

• Net Interest Margin Expansion: The tax-equivalent net interest margin improved to 3.38%, up from 3.25% in the prior quarter. This expansion was primarily driven by a faster decline in funding costs, particularly deposit costs, which outpaced a modest decrease in asset yields.
• Strong Balance Sheet Growth: The company reported significant organic growth:
  • Net organic loan and lease growth of $141 million, a 13% annualized quarter-over-quarter increase.
  • Deposit growth of $102 million, or 8% annualized.
• Credit Quality Remains Stable: The allowance for credit losses stood at 0.94% of total loans, virtually unchanged from the previous quarter. Nonperforming loans declined slightly to 0.22% of total loans.
• Strategic Initiatives Completed: The quarter marked the completion of a multi-year core contract renegotiation process and the expansion of the commercial team in Columbus, Georgia.

Outlook and Forward Estimates

While the press release did not provide specific quantitative financial guidance for 2026, leadership expressed a positive tone. CEO Billy Carroll stated the year's performance was "paving the way for an even brighter 2026."

Analysts have already begun modeling for the coming year. Current consensus estimates project:

• Q1 2026 EPS: $0.76
• Q1 2026 Revenue: $52.72 million
• Full-Year 2026 EPS: $3.43
• Full-Year 2026 Revenue: $222.58 million

The company's demonstrated ability to grow loans, manage margins, and control expenses will be key factors in meeting or exceeding these forward-looking estimates.

Conclusion

SmartFinancial's fourth-quarter results solidify a strong finish to 2025, demonstrating the bank's successful execution in a dynamic interest rate environment. By beating earnings estimates, expanding its core net interest margin, and posting solid organic growth, the company has built a foundation for the upcoming year. The market's steady reaction suggests the results were anticipated, but the underlying fundamentals—particularly the sustained positive operating leverage and improved profitability—support a constructive view of the bank's trajectory.

For a detailed look at SmartFinancial's historical earnings, future estimates, and analyst projections, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.