SmartFinancial Signals Strength with Dividend and $10M Share Buyback

KNOXVILLE, TN – January 30, 2026 – SmartFinancial, Inc. (NYSE: SMBK), the parent company of SmartBank, today announced a dual-pronged capital allocation strategy, signaling strong confidence in its financial standing and a firm commitment to delivering shareholder value. The company's board of directors declared a regular quarterly cash dividend and authorized a new, substantial share repurchase program, moves that were met with a positive market reception.

This two-part announcement underscores a strategy that both rewards investors directly through dividends and aims to enhance share value over the long term through buybacks. For investors and market analysts, such actions are often interpreted as a clear statement from management about the company's robust health and positive future outlook.

A Dual Commitment to Shareholder Value

SmartFinancial declared a quarterly cash dividend of $0.08 per share. This dividend will be payable on March 2, 2026, to all shareholders of record as of the close of business on February 13, 2026. This move continues the company's pattern of consistent shareholder returns, marking the sixth consecutive year of dividend payments. The current dividend rate represents a continuation of a gradual upward trend seen over the past several years, where the dividend has methodically increased from $0.05 per share in late 2019 to the current $0.08.

In a concurrent and perhaps more significant move, the Board also authorized a new stock repurchase plan, dubbed the “2026 Repurchase Plan.” This program empowers SmartFinancial to buy back up to an aggregate of $10 million of its own common stock. The plan is set to become effective on March 1, 2026, and will remain in place for one year, expiring on February 28, 2027, unless otherwise extended or terminated by the Board. This new authorization will replace a prior stock repurchase plan, ensuring a seamless continuation of the company's capital management toolkit.

The combination of a steady dividend with a significant buyback authorization provides a balanced approach to capital return. While dividends offer immediate income for shareholders, repurchase programs can reduce the number of outstanding shares, which in turn can increase earnings per share (EPS) and potentially boost the stock's market price.

Under the Hood of Financial Health

The confidence to execute such a capital return strategy is built on a foundation of solid financial performance. SmartFinancial recently reported impressive results for the fourth quarter of 2025, with a net income of $13.7 million, or $0.81 per diluted share, comfortably surpassing analysts' consensus estimate of $0.78 per share. The company's full-year 2025 revenue stood at approximately $192.7 million.

This strong profitability is supported by healthy operational metrics. The bank has now achieved its sixth consecutive quarter of positive operating leverage, a key indicator of its ability to grow revenue faster than expenses. Furthermore, it posted strong growth in its core business, with 10% annualized organic loan growth and an impressive 15% annualized deposit growth reported in the third quarter of 2025. The company's net interest income for the full year 2025 grew to $166.1 million from $137.35 million in the prior year, reflecting a robust loan book that expanded to over $4.36 billion.

Crucially, the bank's capital ratios remain well above regulatory requirements, providing a substantial cushion. As of December 31, 2025, SmartFinancial reported a Tier 1 Leverage Ratio of 8.30%, a Common Equity Tier 1 Ratio of 9.80%, and a Total Capital Ratio of 12.67%. This strong capitalization, combined with a conservative debt-to-equity ratio of just 0.18, demonstrates prudent financial management and provides the flexibility needed to both invest in growth and reward shareholders.

The Buyback Breakdown: What the $10M Plan Means

Share repurchase programs are a powerful tool in a company's financial arsenal. By buying its own shares from the open market, a company reduces the total number of shares available, which can have several positive effects. For one, it often signals that management believes the company's stock is undervalued. With SmartFinancial's price-to-earnings (P/E) ratio at a modest 13.44 and an attractive price/earnings-to-growth (PEG) ratio of 0.34, an argument for undervaluation can certainly be made.

The $10 million plan gives SmartFinancial significant flexibility. Repurchases can be made periodically in the open market, through privately negotiated transactions, or via accelerated share repurchase programs. The company also has the option to implement a trading plan under Rule 10b5-1, which would allow it to repurchase shares during self-imposed blackout periods, ensuring the program can continue without interruption. It is important for investors to note that the program authorizes but does not obligate the company to repurchase any specific amount of stock, giving management discretion based on market conditions and other factors.

A Regional Bank Navigating the Market

Placing SmartFinancial's actions within the broader regional banking sector provides valuable context. The company's current dividend yield is approximately 0.86%, which is below the financial services sector average of 2.72%. However, this figure can be misleading when viewed in isolation. A lower yield can be a byproduct of strong stock price appreciation.

More telling is the company's dividend payout ratio, which stands at a very healthy and sustainable level of around 11%. This low ratio is significantly below the sector average and indicates that the dividend is extremely well-covered by earnings. It also suggests that SmartFinancial is retaining the vast majority of its profits to reinvest in its growing franchise across Tennessee, Alabama, and Florida, while still leaving ample room for future dividend increases.

Analyst sentiment surrounding SmartFinancial is generally positive, reflecting confidence in its strategy and execution. The consensus rating for the stock is a "Moderate Buy," with several analysts recently raising their price targets. For instance, Keefe, Bruyette & Woods lifted its price objective to $40.00, while Hovde Group upgraded the stock from "market perform" to "outperform" with an ambitious $48.00 price target. The market reacted favorably to the news, with the stock trading up on the day of the announcement, reinforcing the view that these capital actions are a welcome development for investors.

Ultimately, SmartFinancial's decision to simultaneously issue a dividend and authorize a share buyback is a multifaceted strategic move. It demonstrates fiscal discipline, reflects a position of financial strength, and confirms a management team focused on building long-term shareholder value while continuing to execute on its growth plans.