SmartFinancial, Inc. (SMBK): Business Model Canvas [Dec-2025 Updated]

You're looking to cut through the noise and see exactly how SmartFinancial, Inc. is building its business across Tennessee, Alabama, and Florida, and honestly, their model is built on high-touch, personalized service meeting solid regional growth. As someone who's spent two decades mapping out bank strategies, I can tell you their focus on dedicated relationship management, supported by $5.78 billion in total assets as of September 30, 2025, is central, especially when they posted $98 million in net loan growth that same quarter. This canvas breaks down their nine building blocks-from their 42-branch footprint and specialized leasing arm to how they generated $42.4 million in Net Interest Income in Q3 2025-giving you the precise operating map you need to understand their current position and near-term opportunities.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Key Partnerships

You're looking at the structure of how SmartFinancial, Inc. (SMBK) builds value through its external relationships as of late 2025. These alliances are critical for capital structure, specialized lending, and distribution channels.

Invested Partner Relationship with SBK Insurance (SBKI) Post-Sale

SmartFinancial, through its subsidiary SmartBank, executed a significant change in its insurance distribution model on September 5, 2025, by selling its entire equity interest in SBK Insurance Inc. to Insuragent Purchaser, LLC. SmartFinancial, Inc. did not exit the relationship entirely; instead, it acquired a minority ownership interest in Insuragent Purchaser, LLC, maintaining a strategic partnership post-sale. This transaction immediately generated a $4.0 million pre-tax gain for SmartFinancial, Inc. in the third quarter of 2025. The operations and staff of SBK Insurance remained unchanged following the transaction, suggesting continuity in service delivery despite the change in ownership structure.

Strategic Alliances for Equipment Leasing via Fountain Equipment Finance

The equipment leasing segment is managed through Fountain Equipment Finance, LLC, which SmartBank acquired in 2021. This entity provides a specialty lending platform focused on construction equipment financing. While the most recent specific portfolio size available is from the acquisition period, showing approximately $56 million in net lease investments as of March 31, 2021, SmartFinancial, Inc. continues to use its low-cost funding and excess liquidity to support Fountain's growth capabilities. This partnership diversifies the business lines beyond traditional banking.

Third-Party Financial Advisors and Mortgage Brokers for Referral Networks

Distribution strength in areas like mortgage banking relies on external networks. While specific 2025 referral volume is not public, SmartFinancial, Inc. is actively expanding its production teams to support organic growth. For instance, the first quarter of 2025 saw the hiring and onboarding of five business production team members across Private Banking and Treasury Management. In the broader industry context, professionals often cite financial advisors and CPAs as contributing to approximately 21% of their high-quality mortgage leads. The bank's mortgage banking revenues contributed to the operating non-interest income in Q1 2025.

Subordinated Debt Investors Providing Capital for Growth and Retirement of Legacy Debt

Capital structure management heavily involves debt investors. In the third quarter of 2025, SmartFinancial, Inc. completed a strategic issuance of $100 million in subordinated debt. This capital raise was explicitly earmarked to retire $40 million of existing subordinated debt and fund additional growth initiatives. This action immediately impacted liabilities, as average subordinated debt increased by $45.4 million quarter-over-quarter in Q3 2025. The cost of total interest-bearing liabilities rose to 3.07% in Q3 2025, partly due to this new issuance.

Here's a quick look at the key financial movements related to these partnerships as of late 2025:

Finance: draft the pro-forma balance sheet impact of the Q3 subordinated debt issuance by Friday.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Key Activities

You're looking at the core actions SmartFinancial, Inc. is taking to drive its business forward as of late 2025. These aren't abstract goals; they are concrete, measurable activities that defined their Q3 2025 performance.

The primary activities center on balance sheet expansion through disciplined sourcing of both assets and liabilities, supported by strategic capital management.

Key Activity Metrics for Q3 2025:

Generating organic loan and lease growth remains a top priority. For the third quarter of 2025, SmartFinancial, Inc. achieved $98 million net growth in loans and leases, translating to a 10% annualized increase quarter-over-quarter. The total loan portfolio stood at $4.2 billion in Q3 2025.

The second core activity is disciplined deposit gathering to fund that loan growth. This effort resulted in a 15% annualized increase in deposits, adding $179 million during the third quarter of 2025. The total deposit base reached $5.1 billion. The cost of total deposits for the quarter was 2.44%.

Strategic capital deployment involves optimizing the balance sheet structure. This included a $100 million subordinated debt issuance, which was used to retire $40 million of existing subordinated debt and provide capital for further growth initiatives. Separately, the company realized a $4.0 million pre-tax gain from the sale of SBK Insurance (SBKI), which offset a $3.9 million pre-tax loss from repositioning $85 million of available-for-sale securities.

The final key activity area involves relationship management and talent investment to support the franchise. This is evidenced by management highlighting the focus on recruiting quality talent and investing in technology to support their growth initiatives.

Here are some supporting operational metrics tied to these activities:

• Achieved over $50 million in quarterly operating revenue in Q3 2025.
• Nonperforming loans and leases were 0.24% of total loans and leases as of Q3 2025.
• The allowance for credit losses to total loans and leases was 0.93% at September 30, 2025.
• The company reported a liquidity position of approximately 21% of assets.

Finance: draft 13-week cash view by Friday.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Key Resources

You're looking at the core assets SmartFinancial, Inc. (SMBK) relies on to execute its business model. These aren't just line items; they are the engine room, so let's look at the hard numbers as of late 2025.

The balance sheet strength is a primary resource. As of September 30, 2025, the firm reported total assets clocking in at $5.78 billion. That scale supports their lending and deposit-gathering operations. Also, the capital base is defintely solid, showing a total consolidated risk-based capital ratio of 13.3%, which is a key indicator of financial resilience.

Physical presence and human capital form the other major pillars. You need to know where they operate and who is driving the revenue.

Here's a quick look at the tangible and human infrastructure:

• Network of 42 branches across Tennessee, Alabama, and Florida.
• Experienced banking professionals, including new revenue-producing hires in 2025.

For a clearer picture of the shareholder value underpinning these resources, check out the per-share metrics:

The tangible book value per common share stood at $26.00 as of the third quarter of 2025. This number tells you what equity remains after removing intangible assets, which is crucial for assessing the true book value backing the operations. The combination of a large asset base, strong capital ratios, and a regional branch footprint across TN, AL, and FL represents the foundational resources for SmartFinancial, Inc. (SMBK).

Finance: draft 13-week cash view by Friday

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Value Propositions

You're looking at what SmartFinancial, Inc. actually offers its clients, the core value it brings to the table as of late 2025. It's built on a foundation of personalized attention backed by solid balance sheet health.

High-touch banking and personalized service for commercial clients is a key differentiator. The firm actively recruits to support this, adding about 10 new revenue-producing team members in the first half of 2025, focusing heavily on commercial banking, private banking, and treasury management. This focus on personnel is a direct investment in client relationships, which is a big deal when you're competing against larger institutions. They even got recertified as a Great Place to Work this year, which management suggests helps attract the best bankers.

The service offering isn't just deposits and loans; it's comprehensive financial services. SmartFinancial, Inc. delivers:

• Banking services through SmartBank.
• Investment services.
• Equipment leasing via Fountain Equipment Finance.
• Wealth management and mortgage origination.

This breadth means they can handle more of a commercial client's financial needs under one roof. Honestly, having the equipment leasing arm is a nice complement to core commercial lending.

Local market expertise is concentrated in high-growth Southeastern US metropolitan areas. SmartBank operates 42 branches across Tennessee, Alabama, and Florida, deliberately positioning itself where population and economic development are strong. This local focus supports their disciplined approach to lending and relationship management.

Diligent credit underwriting is clearly a value proposition, evidenced by the strong asset quality metrics reported through Q3 2025. They maintain this through what they call a disciplined approach to lending. Here's a quick look at the scale and quality as of their Q3 2025 results:

That 0.22% NPA ratio in Q3 2025 shows they're keeping credit risk tightly managed, which is what you want to see from a regional bank focused on commercial relationships. It's a tangible result of that diligent underwriting they talk about.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Customer Relationships

Dedicated relationship management is evident through strategic talent acquisition supporting commercial and private banking segments.

The high-touch approach is supported by internal culture metrics, suggesting a focus on employee satisfaction which translates to client experience.

• SmartFinancial, Inc. was recertified as a Great Place to Work by over 92% of its associates in Q2 2025.
• Tangible book value per share growth reached over 13% annualized quarter-over-quarter in Q2 2025.
• Nonperforming assets to total assets remained solid at 0.19% in Q2 2025 and 0.22% in Q3 2025.

Community focus underpins the strategy, evidenced by the commitment to organic growth and talent development within the local markets.

• The loan portfolio reached $4.2 billion in Q3 2025, driven by organic expansion.
• The company's strategy emphasizes building core client relationships to bolster organic growth.

Digital self-service options are integrated into the overall relationship strategy, aligning with broader consumer trends.

• Over 83% of U.S. adults used digital banking services as of 2025.
• 42% of consumers prefer using a mobile app to manage their finances.
• 34% of consumers use a mobile banking app daily.

Finance: review Q3 2025 digital transaction volume against the 10% annualized deposit growth seen in Q1 2025.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Channels

You're looking at how SmartFinancial, Inc. (SMBK) gets its value proposition to the customer base across its footprint as of late 2025. The channel strategy blends traditional physical presence with modern digital tools and specialized business units.

The physical branch network remains a core component, especially for relationship-driven commercial and private banking services. As of the third quarter of 2025 reporting, SmartBank operates 42 branches across its key markets in Tennessee, Alabama, and Florida. This physical footprint supports the community-banking relationships the company emphasizes.

Digital channels provide the necessary convenience layer atop the physical network. SmartFinancial uses its internet and mobile banking platforms to allow customers to access accounts and complete transactions on demand. While specific digital adoption metrics aren't always broken out granularly in every release, the overall balance sheet growth-with total assets reaching $5.78 billion as of September 30, 2025-is supported by these platforms alongside physical interactions.

The specialized subsidiary, Fountain Equipment Finance, is a distinct channel for equipment leasing, contributing directly to the lending portfolio. Management expressed strong satisfaction with this segment's portfolio growth and positive yield contributions since its acquisition. For the third quarter of 2025, the projected noninterest income from this segment was approximately $9 million.

Direct sales teams, composed of Commercial and Private Banking relationship managers, are crucial for acquiring higher-value commercial and wealth management relationships. The focus on talent acquisition in these areas is clear; for instance, the company added 5 revenue producers in Private Banking/Treasury during the first quarter of 2025 alone, signaling an active push through this relationship-based channel. This direct sales effort contributes to the overall operating revenue, which exceeded $50 million in the third quarter of 2025.

Here's a quick look at the quantifiable aspects of these channels as reported through the nine months of 2025:

You can see the blend of physical reach and specialized/digital service delivery in the operational focus:

• Physical branch network spans Tennessee, Alabama, and Florida.
• Digital channels include internet and mobile banking platforms for on-demand access.
• Specialized subsidiary focuses on equipment leasing portfolio growth.
• Direct sales teams are augmented by hiring relationship managers in key areas.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Customer Segments

You're looking at the core groups SmartFinancial, Inc. (SMBK) serves across its SmartBank and Fountain Equipment Finance subsidiaries. It's a mix of business and personal banking, heavily weighted toward the Southeast US footprint.

The primary geographic focus for SmartFinancial, Inc. is clear from its branch network. As of early 2025 filings, the company operates 42 full-service branches situated across key markets in Tennessee, Alabama, and Florida. This physical presence directly supports the customer segments they target.

The overall scale of the institution, which frames the capacity to serve these segments, shows significant growth. Total assets on the balance sheet reached $5.78 Billion USD as of September 2025, up from $5.41 billion at March 31, 2025.

Here is a breakdown of the distinct customer groups SmartFinancial, Inc. targets:

• Small to medium-sized businesses (SMBs) across the Southeast.
• Commercial Real Estate investors with a portfolio of $1.75 billion (2023 data) [cite: Prompt Outline].
• Individual consumers in Tennessee, Alabama, and Florida markets.
• Wealth management clients with total assets under management of $1.2 billion (2023 data) [cite: Prompt Outline].

The focus on SMBs is supported by specialized lending through subsidiaries. Fountain Equipment Finance, LLC, for example, specifically targets small and medium-sized businesses in the Southeast with loans and leases for heavy equipment, semis, and trailers. Loan growth in 2025 reflects this commercial focus, with net organic loan growth hitting $98 million in Q3 2025 (a 10% annualized rate).

For individual consumers, the bank accepts various deposit types, including checking, savings, money market, and retirement accounts, across its branch network. The consumer segment is supported by the overall deposit base, which saw growth of $179 million (a 15% annualized rate) in Q3 2025.

You can see how the balance sheet supports these segments:

The wealth management and real estate investor segments are served through specialized offerings. The wealth management division provides investment services. The company also originates one to four family residential mortgage loans, generally committing to sell these loans in the secondary market.

The company is actively adding relationship managers to serve these segments, evidenced by hiring five business production team members across Private Banking and Treasury Management in Q1 2025.

Key characteristics of the deposit base serving these customers include:

• Non-brokered deposit growth of $114 million in Q1 2025 (over 10% annualized).
• Weighted average cost of new non-brokered deposit production was 3.39% (Q1 2025).
• Loan-to-Deposit Ratio remained stable at 83% (Q1 2025).

Finance: draft 13-week cash view by Friday.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Cost Structure

The cost structure for SmartFinancial, Inc. (SMBK) is heavily weighted toward funding costs, which is typical for a bank. You're looking at the primary expense drivers that eat into the Net Interest Income they generate.

Primary cost is Interest Expense on deposits and borrowings. This is the direct cost of the money SmartFinancial, Inc. uses to fund its loan book. The cost of total deposits for the third quarter of 2025 was reported at 2.44%. This compares to the cost of total deposits in the second quarter of 2025, which was 2.39%. The cost of interest-bearing liabilities overall rose to 3.07% in Q3 2025 from 2.99% in the prior quarter, driven by an increase in average interest-bearing deposits of $207.4 million and average subordinated debt of $45.4 million in Q3 2025.

Significant Noninterest Expense is closely managed, with guidance for the third quarter of 2025 set in the range of $33.8-$34.0 million. The actual reported noninterest expense for Q3 2025 came in at $33.9 million, which was an increase of $1.3 million compared to the prior quarter.

Salaries and employee benefits represent a major component of that noninterest expense. For Q3 2025, management guided this line item to be between $20.5 million and $21.0 million, reflecting anticipated costs from new hires and variable compensation.

The bank continues to invest in its operational backbone. This includes technology and compliance investments to support the digital platform. Management has noted starting to use bots and looking at AI enhancements to drive efficiency, aiming to support scaling without materially lifting operating expenses.

Credit quality costs are also a key variable. The Provision for credit losses reached $2.4 million in Q2 2025, primarily due to higher loan growth in that period. By the end of Q3 2025, the allowance for credit losses stood at $39.1 million.

Here's a look at some of the key expense and related figures for the recent quarters:

You should track the trajectory of the cost of deposits versus the yield on assets, as the margin compression in Q3 2025 was attributed to liability costs rising faster than asset yields, partly due to a new subordinated debt issuance.

• Cost of average interest-bearing deposits in Q3 2025 was 2.98%.
• The increase in average interest-bearing liabilities in Q3 2025 was $249.4 million.
• The allowance for credit losses to total loans and leases was 0.96% at June 30, 2025, easing to 0.93% at September 30, 2025.
• Noninterest expense for Q1 2025 was $32.3 million.

Finance: draft 13-week cash view by Friday.

SmartFinancial, Inc. (SMBK) - Canvas Business Model: Revenue Streams

The core of SmartFinancial, Inc. (SMBK) revenue generation centers on traditional banking activities, supplemented by fee-based services and specialized financing. You see the primary driver is the spread earned on assets, which is Net Interest Income (NII). For the third quarter of 2025, the Net Interest Income (NII) from loans and securities was reported at $42.4 million. This result came despite some temporary compression in the tax-equivalent Net Interest Margin (NIM), which stood at 3.25% in Q3 2025, due to the timing of new subordinated debt and higher pricing on new deposits.

Beyond the interest margin, fee income provides a crucial, less rate-sensitive component to the top line. Noninterest Income for the third quarter of 2025 was $8.6 million, a slight decrease from the prior quarter, partly due to the repositioning of securities. This stream is built from several areas, including:

• Mortgage banking income.
• Interchange and debit card transactions.
• Insurance commissions, though impacted by a recent sale.
• Investment services income.

The company also generates revenue through specialized lending activities, specifically equipment leasing income via Fountain Equipment Finance. This diversification helps smooth out earnings volatility inherent in pure interest income streams. To be fair, the Q3 performance showed management hitting its overall revenue goal ahead of schedule, which is a good sign for the business momentum.

Here's a quick look at the key revenue figures as of late 2025:

The Total operating revenue for SmartFinancial, Inc. (SMBK) reached $50.8 million in the third quarter of 2025, marking the sixth consecutive quarter of positive operating leverage. Looking at the broader picture, the Trailing Twelve Months (TTM) revenue is approximately $188.20 million USD, representing an 18.22% year-over-year growth rate for that period. Finance: draft 13-week cash view by Friday.