Smartfinancial Inc. (NYSE: SMBK)

Sector: Financial Services Industry: Banks - Regional CIK: 0001038773
Market Cap 619.60 Mn
P/B 1.15
P/E 13.39
P/S 3.29
ROIC (Qtr) 7.41
Div Yield % 1.08
Rev 1y % (Qtr) 22.22
Total Debt (Qtr) 139.91 Mn
Debt/Equity (Qtr) 0.26

About

SmartFinancial Inc., often recognized by its stock symbol SMBK, is a bank holding company that operates primarily in the banking and financial services industry. The company, established in 1983 and headquartered in Pigeon Forge, Tennessee, owns and manages SmartBank, a Tennessee-chartered commercial bank. SmartFinancial's primary business activities revolve around the operation of SmartBank, which focuses on attracting deposits from the general public and investing these funds in various loan types. These include commercial loans, residential...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 61.88M provides robust 0.44x coverage of total debt 139.91M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 5.69B provides 40.66x coverage of total debt 139.91M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 61.88M provides strong 29.82x coverage of stock compensation 2.08M, indicating sustainable incentive practices.
  • Robust free cash flow of 58.63M exceeds capital expenditure of 3.25M by 18.07x, indicating strong organic growth funding capability.
  • Cash reserves of 557.13M provide ample 50.16x coverage of acquisition spending 11.11M, enabling strategic growth opportunities.

Bear case

  • Operating cash flow of 61.88M barely covers its investment activities of (511.53M), with a coverage ratio of -0.12, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 61.88M provides thin coverage of dividend payments of (5.44M) with a -11.37 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Retained earnings of 236.38M provide limited buffer against comprehensive income items of (10.78M), which is -21.93x, indicating elevated exposure to market risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 108.58M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Deposit liabilities of 5.05B significantly exceed cash reserves of 557.13M, which is 9.07x, indicating potential liquidity risk in stress scenarios.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.05 0.14
EV to Cash from Ops. EV/CFO 4.87 7.21
EV to Debt EV to Debt 2.15 5.20
EV to EBIT EV/EBIT 5.27 14.98
EV to EBITDA EV/EBITDA 4.44 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 5.14 8.87
EV to Market Cap EV to Market Cap 0.49 1.04
EV to Revenue EV/Rev 1.60 -3.76
Price to Book Value [P/B] P/B 1.15 1.17
Price to Earnings [P/E] P/E 13.39 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 8.51 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 11.60 35.28
Dividend per Basic Share Div per Share (Qtr) 0.32 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 9.16 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -25.82 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 188.80 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 41.59 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 28.51 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 39.80 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 39.80 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 41.33 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 29.88 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.22 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.26 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 36.00 147.97
EBIT Margin % EBIT Margin % (Qtr) 30.38 155.41
EBT Margin % EBT Margin % (Qtr) 30.38 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 24.60 115.63