A bank holding company built around its main subsidiary, SmartBank, which offers checking, savings, lending, and investment services through roughly four dozen branches across Tennessee, Alabama, Florida, and Georgia. A sister arm, Fountain Equipment Finance, provides equipment loans and leases to small and mid-sized businesses across the Southeast. SmartBank was founded in Pigeon Forge, Tennessee, in 2007 by father-and-son bankers Bill and Billy Carroll, who picked the name to signal their goal of a distinctly smart, high-service brand — the holding company structure was adopted in 2013.
Net interest margin widened to 3.52% and Q2 net income rose 39% to $16.3M.
The margin story kept building. rose 13.6% to $56.0 million and climbed 39.1% to $0.96 as the tax-equivalent widened to 3.52% on higher loan balances and lower deposit costs. The bank is growing loans and deposits while funding costs fall, and it still holds a large cash position it has not deployed.
Key takeaways
rose 39.4% to $16.3 million, or $0.96 per diluted share, as grew on higher loan balances and a wider margin.
The tax-equivalent widened to 3.52% from 3.29% a year earlier, driven by higher loan and lease balances, higher earning-asset yields, and lower deposit costs following Federal Reserve rate cuts.
Average loans and leases grew $560.0 million , and total net loans and leases reached $4.64 billion at June 30, 2026, up $319.4 million from year-end 2025.
Section summaries
Management's Discussion and Analysis
Q2 2026 net income rose 39% to $16.3M on higher net interest income and a wider margin, with strong loan and deposit growth.
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was $16.3M, or $0.96 per diluted share, in Q2 2026, up from $11.7M, or $0.69, a year earlier; six-month net income rose to $30.0M from $23.0M.
Total deposits grew $232.8 million from year-end 2025 to $5.39 billion, led by money market, interest-bearing demand, and .
Noninterest income fell $1.0 million , mainly from the absence of insurance commissions after the SBKI sale and lower capital markets fees, partly offset by higher interchange, mortgage banking, and investment services volume.
Noninterest expense rose $1.4 million, primarily from higher salaries and employee benefits tied to franchise growth, and the increased to 20.5% from 17.9%.
What changed
The widened again, to 3.52% from 3.48% in Q1 2026 and 3.29% a year ago, as the cost of interest-bearing deposits continued to fall after Federal Reserve rate cuts.
The , which rose to $4.1 million in Q1 2026 on an enhanced ACL loss model, did not repeat at that level in Q2; the allowance coverage ratio held near 0.97% of total loans.
ticked up to 0.25% of gross loans from 0.24% at year-end 2025, continuing the gradual rise from 0.19% in mid-2025.
The cash position rose to $379.4 million from $346.1 million at the end of Q1 2026, and the company has still not announced an acquisition despite repeated flags that its growth strategy has historically included M&A.
fell to $0.6 million from $3.2 million at the end of Q1 2026, continuing the deleveraging that followed the $100 million subordinated debt issuance in Q3 2025.
What to watch
Whether the can widen further now that deposit costs have fallen to their lowest level since at least early 2023, or whether funding costs stabilize and limit additional expansion.
Whether the $379.4 million cash position is deployed into an acquisition, a move that has defined the company's growth strategy but has now been absent for over two years.
The trajectory of , which rose to 0.25% of gross loans, and whether the commercial real estate portfolio — concentrated at 277% of risk-based capital — shows further credit normalization.
Whether the settles at a new run rate tied to the enhanced ACL model and continued loan growth, or moderates in Q3 2026.
widened to 3.52% in Q2 2026 from 3.29% a year earlier, driven by higher loan and lease balances, higher earning-asset yields, and lower deposit costs following Federal Reserve rate cuts.
Average loans and leases grew $560.0M in Q2, while total net loans and leases reached $4.64B at June 30, 2026, up $319.4M from December 31, 2025.
Noninterest income fell $1.0M in Q2, mainly from the absence of insurance commissions after the SBKI sale and lower capital markets fees, partly offset by higher interchange, mortgage banking, and investment services volume.
Noninterest expense rose $1.4M in Q2, primarily from higher salaries and employee benefits tied to franchise growth; the increased to 20.5% from 17.9%.
Total deposits grew $232.8M from year-end 2025 to $5.39B, led by money market, interest-bearing demand, and ; nonperforming loans remained low at 0.25% of gross loans.
Quantitative and Qualitative Disclosures About Market Risk
The information presented in the Market Risk and Liquidity Risk Management section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report is incorporated herein by reference.
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The information presented in the Market Risk and Liquidity Risk Management section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report is incorporated herein by reference.
SmartFinancial, Inc. and its wholly owned subsidiary, SmartBank, are periodically involved as a plaintiff or a defendant in various legal actions in the ordinary course of business. While the outcome of these matters is not currently determinable, management does not expect the…
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SmartFinancial, Inc. and its wholly owned subsidiary, SmartBank, are periodically involved as a plaintiff or a defendant in various legal actions in the ordinary course of business. While the outcome of these matters is not currently determinable, management does not expect the disposition of any of these matters to have a material adverse impact on the Company’s financial condition, financial statements or results of operations.
In addition to the other information set forth in this report, you should carefully consider the factors discussed under “Part I – Item 1A – Risk Factors” in our Form 10-K for the year ended December 31, 2025. These factors could materially and adversely affect our business, fin…
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In addition to the other information set forth in this report, you should carefully consider the factors discussed under “Part I – Item 1A – Risk Factors” in our Form 10-K for the year ended December 31, 2025. These factors could materially and adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report. Please be aware that these risks may change over time and other risks may prove to be important in the future.
There are no material changes during the period covered by this report to the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2025.