SmartFinancial : Annual Report - 2023

2023 Annual Report

SmartBank,known for its progressive and innovative style of banking, opened the doors of its first branch in 2007 with the vision of building a foundation of strong leadership, forward thinking and a sincere desire to provide incomparable client service. Seventeen years later, that very foundation is stronger than ever and SmartBank is continuing to Build Exceptional Value for Shareholders, Associates, Clients and the Communities we serve.

Miller Welborn (standing), Bill Carroll (left) and Billy Carroll (right)

Letter to our Shareholders

We are pleased to present our 2023 annual report. Our industry, once again, proved resilient in the face of headwinds. The country's economic backdrop is in an unusual place, with higher interest rates than we've seen in many years. Adapting to this unprecedented rise in interest rates coupled with industry uncertainty created by liquidity issues at a handful of "niche" banks made for a challenging 2023. Additionally, persistent inflation gave rise to increased market volatility despite the economy performing well in most areas, particularly in the Southeast markets where we operate.

In the banking business, we focus on key balance sheet metrics which correlate to long-term value creation - credit performance, core deposit growth, and loan growth. We were pleased to see our company advance in all of these areas despite the extraordinary operating conditions throughout the year. As we reflect on our 2023 achievements, we can't help but be energized by the foundation that was laid and primed to execute on what we believe will be a bullish 2024.

Below are several highlights as we wrap our 17th year of operations:

Financial Performance: In 2023, we achieved significant financial results, and a record high $4.8 billion in total assets. We achieved +5% year-over-yeartangible book value per share growth and $2.03 diluted operating earnings per share, bolstered by a 6% year- over-yearincrease in operating noninterest income. As one of the key shareholder return metrics we focus on, growth tangible book value was commendable, especially given the precipitous rise in interest rates and the resulting negative impact on asset valuations. Finally, in keeping with our core principle of diligent credit underwriting, we had another outstanding year of credit quality with 0.20% nonperforming assets to total assets.

Operational Highlights: Operationally we made significant strides in further building out the infrastructure to support our $5 billion in assets company. While basic in principle, our dedication to the SmartBank culture philosophy combined with an incomparable team-orientedatmosphere continues to be an extremely effective recruiting tool. Coupling the sophistication we've added in human talent with our continued investment in systems, we see outstanding catalysts for profitable growth going into 2024. Some other key operating highlights and accolades include:

• SmartBank Investment Services wealth management expanded into Dothan, AL
• Implementation of the nCino Customer Pricing and Profitability platform
• Stock listing moved to the New York Stock Exchange

Corporate Social Responsibility: Being a great community bank also means being a big part of the communities we serve. We recognize the importance of corporate social responsibility and its impact on our communities and stakeholders. In 2023, we continued our efforts to give back and make a positive difference through a number of initiatives. We note several of these outstanding partnerships we're building in this report. A special "thank you" to each of these outstanding organizations and we look forward to continuing our involvement in 2024!

Outlook: As you may have deduced by the tone of this letter, we couldn't be more optimistic about the future of our organization. Our platform's foundation fused with our superior associates has created one of the best banks in the Southeast, covering some of the most desirable growth markets in the region. SmartBank Investment

Services has scaled to having over $1 billion in assets under management, we have

a growing equipment finance business, and our insurance agency has become an outstanding asset with tremendous potential. Our strategy now becomes leveraging this incredible platform and all the past hard work into growing the value of this company for our shareholders.

Acknowledgments: We would like to express our sincere gratitude and appreciation for our 500+ associates at SmartFinancial. These team members are building something special, and I would put the culture we're building here up against any other. We also want to thank our shareholders for your continued support and trust in SmartFinancial. Building value for those who support us is not something we take lightly, and we continue to promise to work day in and day out to build value for you.

In closing, we are excited about the opportunities that lie ahead for SmartFinancial, and look forward to sharing our continued progress with you in the coming years. Thank you once again for your unwavering support.

Warm Regards,

• Ranked 36th in Top 50 Large Community Banksby S&P Global Market Intelligence
• Voted a regional Top Workplace for the 7th consecutive year
• Opened the full service SmartBank Tallahassee branch

BILLY CARROLL	MILLER WELBORN	BILL CARROLL
President & CEO	Chairman of the Board	Vice Chairman of the Board
SmartFinancial, Inc.	SmartFinancial, Inc.	SmartFinancial, Inc.

SmartFinancial, Inc. 2023 ANNUAL REPORT 3

Board of	Directors
(pictured left to right)	BILLY CARROLL		DR. KEITH WHALEY
CATHY ACKERMANN
SmartFinancial, Inc. & SmartBank	Founder of Whaley Family Eyecare
Chief Executive Officer of	President & CEO
Ackermann Marketing & PR		GEOFF WOLPERT
		MILLER WELBORN
JOHN PRESLEY	Owner of The Park Grill
SmartFinancial, Inc. & SmartBank	and The Peddler Steakhouse
Principal, Presley Consulting	Chairman
			TED MILLER
VIC BARRETT	BILL CARROLL
	Business Manager & Partner
Co-founder and Partner of
SmartFinancial, Inc. & SmartBank	of Dolly Parton Productions
The Track Recreation Center
Vice-Chairman

DAVID OGLE	STEVE TUCKER
President and
Principal in TriCo Resources
Co-founder of Five Oaks
and BTI Real Estate
Development Group

4 2023 ANNUAL REPORT SmartFinancial, Inc

BILLY CARROLL

President

Chief Executive Officer

Senior Leadership

BECCA BOYD		CYNTHIA CAIN		KELLEY FOWLER		RON GORCZYNSKI
Executive Vice President	Executive Vice President	Senior Vice President		Executive Vice President
Chief People Officer	Chief Accounting Officer	Director of Marketing		Chief Financial Officer
				& Public Relations

MONTY HATCHER		RHETT JORDAN		TRAVIS LYTLE		GARY PETTY
CFP®, AAMS®	Executive Vice President	Senior Vice President		Executive Vice President
Executive Vice President,	Chief Credit Officer	Director of Community		Chief Risk Officer
Director of SmartBank			Development
Investment Services

BRAD PLACE		MARTIN SCHRODT		NATHAN STRALL		ROBBIE WASHINGTON
Senior Vice President	Executive Vice President	Vice President		Senior Vice President
Chief Technology Officer	Chief Banking Officer	Director of Strategy		CRA Officer & Director of
				& Corporate Development		CRA/HMDA Reporting

Great leaders inspire others to believe in themselves.

SmartFinancial, Inc. 2023 ANNUAL REPORT 5

2023 Highlights

SmartBank voted

Top Workplace

for the seventh

consecutive

year

New Chief

Banking Officer

position

added in fourth quarter

of 2023

Opened

Tallahassee

full service branch

May 2023

Ranked 36th in

Top 50 Large Community Banks by S&P Global Market Intelligence

New deposit,

loan, and mortgage operations enhancements

added throughout 2023

SBIS
SmartBank
Investment
Services				SmartFinancial (SMBK)
expansion with the addition
			stock listing moved to the
of the Dothan, AL Wealth
			New York
Management team
			Stock
					Exchange
	SmartBank President and CEO elected		Implementation
		of the nCino
	to Federal Reserve
		Customer Pricing
	Bank of Atlanta's
		and Profitability
	Board of Directors
		systemto support
				commercial pricing and
				sales efforts

6 2023 ANNUAL REPORT SmartFinancial, Inc.

The 2023 Bill Carroll

Legacy Banker

Award

Cathy Reed, Senior Vice President and Relationship Manager, was presented with the 2023 Bill Carroll Legacy Banker Award. This award was established in honor of Mr. Carroll and is given to those that exhibit his integrity, dedication, entrepreneurial spirit, and business acuity. Cathy has been an integral part of SmartBank's team since it was in organization in 2006.

"Cathy is an inspiration to our associates and colleagues in our industry," said President & CEO Billy Carroll. "Her contributions have not only propelled this company to new heights but have also left an enduring legacy of her hard work, loyalty and innovation within the banking community. Her expertise and devotion make her most deserving of this award."

SmartFinancial, Inc 2023 ANNUAL REPORT 7

SmartBank Culture

Core Purpose

CREATE WOWEXPERIENCES

Core Values

ACT WITH INTEGRITY

BE ENTHUSIASTIC

CREATE POSITIVITY

DEMONSTRATE ACCOUNTABILITY

EMBRACE CHANGE

7

In 2023, SmartBank was voted a Top Workplace by associates for the seventh year in a row.

Congratulations Daria!

Each month a "WOW" Award Winner is chosen based on submissions from peers. At the end of each year, associates vote amongst the monthly winners to select the overall "WOW" Award winner for the year.

2023 "WOW" AWARD WINNER DARIA BOOTH

Assistant Vice President | e-Banking Manager

Sevierville, TN

8 2023 ANNUAL REPORT SmartFinancial, Inc.

Career Development & Growth Opportunities

SMARTJOURNEY CAREER PATH

Featured: Meia's SmartJourney, from Retail to Technology

Financial Services Representative

Senior Financial Services

Representative

Assistant Branch Manager

IT Analyst

Systems Administrator

MEIA HUNT

Vice President

Technical Support Services Manager

"I can't say enough positive things about the Mentorship program. This year was a MENTORSHIP PROGRAM year of growth/development and I could not have asked for better mentor."

- Cathy Amos, Marketing Manager

SMARTLEADERSHIP

LEVEL UP

This introductory leadership course is a 1-day,in-person class

that equips new and rising supervisors with leadership principles pertaining to SmartBank's culture, people, and processes.

"Level Up was amazing! This program is an environment where everyone feels valued, safe and challenged to grow as leaders."

- Sarah Hurst, Client Services Manager

BRAG-WORTHY INTERNS	Our interns aren't just interns; they're trailblazers in the making, bringing fresh perspectives and impactful
	contributions to our team. With their passion, drive, and innovative spirit, they elevate our workplace
	culture and inspire excellence.

Joshua Bean	Savannah Beaty	Gabriella Buechley	Andrew Dutton	Matthew Jenisch	Sydney Mayfield	Hannah Mckay
Information Technology	Legal	Information Technology	Branch Administration	Deposit Operations	Finance	Marketing

Joseph Moore	Christian Moss	Francisco Palacios, Jr.	Ash Perry, Jr.	Joshua Stubblefield	Jonathan Vargas-Quijano	Jason Wasilewski
Finance	Branch Administration	Risk Management	Risk Management	Finance	Risk Management	Human Resources

SmartFinancial, Inc. 2023 ANNUAL REPORT 9

Corporate Social Responsibility

SmartBank's commitment to Corporate Social Responsibility is fundamental to our business philosophy. Through various initiatives and partnerships, SmartBank actively engages in community development, environmental sustainability and financial literacy outreach programs. By prioritizing responsible and conscientious business practices, we will foster a more sustainable and equitable future for all stakeholders making a positive impact beyond financial gains.

$182M

Reported 825 small business and small farm loans totaling $182 million.

$93M

Approximately $93 million in community development loans qualifying for CRA credit.

Maintained an investment portfolio of $78 million in	$	78M
municipal, mortgage-backed and agency securities that
provide financing for affordable housing and support
economic development. Includes approximately $40
million in SBA pool securities purchased in 2023.

$152KDonations totaling over $152,000 to community organizations and causes that benefit low-moderate income individuals and geographies in the Bank's assessment areas.

Donation of former branch building valued at $192,000 to the	$192K
City of Jackson to repurpose as an ambulance service and police
precinct that will serve the residents of an underserved area.
10 2023 ANNUAL REPORT SmartFinancial, Inc.