Hello, and welcome to today's SmartFinancial Fourth Quarter 2021 Earnings Call. My name is Bailey. I'll be your moderator for today's call. All lines will be muted during the moderation for today's call. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Miller Welborn. Miller, please go ahead. Thanks, Bailey. Good morning and thanks for joining us this morning for our Q4 2021 earnings call. We always enjoy visiting with this group each quarter to talk about our progress and our company. Joining me on the call today are Billy Carroll, our President and CEO, Ron Gorczynski, our CFO, Rhett Jordan, our Chief Credit Officer, and Nate Strall, our Director of Corporate Strategy. Before we get started, I'd like to ask each of you to please refer to page two of our deck that we filed this morning for the normal and customary disclaimers and forward-looking statements comments. Please take a moment to review these. What a fantastic quarter by our team here at SmartBank and a great end to a really strong year for our company. We demonstrated again our ability to outwork the competition and execute our strategic plan. Our organic rates of growth have been impressive, and we see nothing slowing that down in the months ahead. In very, very strong markets and the addition of several new sales team members that Billy will talk about shortly, we feel we're well-positioned to continue our current pace. As we jump into 2022, we're excited about what lies ahead for us this year. With that, I'm gonna hand it off to Billy. Thanks, Miller and good morning, everyone. As Miller said, this has been one heck of a year for SmartFinancial. We wrapped up another solid quarter to close out 2021, and I believe this last year was probably as transformative as any we've had. The evolution our company has made in the last 12 months has been incredible, and our position for the future is very exciting. First, let me touch on some slides shown in our deck. I'll reference page three. First, we wrapped up our Sevier County Bank acquisition, achieving our targeted cost saves of over 63%. We've also done a nice job there retaining assets and the necessary sales team pieces while picking up a great long-term core deposit base. This was a great transaction for us. Our Fountain Equipment Finance group that was acquired midyear has had a solid production quarter. We remain very bullish on this line of business in 2022 as we now look to leverage the bank's footprint and sales network. Organically, our investment in several new sales teams in the second half of 2021 is progressing well. We've added over 25 bankers during this expansion, adding several great new markets to our franchise. During Q4, our new dealer floor planning team has put the needed operational pieces in place and we're excited to see this group go to market in 2022. We also made an exciting addition to our wealth management team by bringing on an experienced group in our Gulf Coast region that had previously managed over $350 million in AUM. This team is now fully integrated and having some great early success. Let me touch on our organic growth expansion now since that has been a major pivot for us. Page four provides a nice map. Those familiar with our story know we took advantage of some great opportunities during 2021 to add talent and deepen our presence in our existing footprint. This has been a large investment for us and one that will, and quite frankly already has, dramatically changed our company in a great way. To update where we are on what we have added, just in the last couple of quarters, new branch offices are now open in Montgomery, Dothan, Mobile, and Auburn, Alabama. We've opened our Birmingham, Alabama, LPO and added our market leadership there. We've expanded our sales team in Tallahassee, Florida and we've expanded our national presence with the addition of several outstanding bankers in one of the country's most dynamic markets. As we've communicated, these investments will take a few quarters to start moving the EPS line but I'm extremely confident that we will create strong revenue growth as we move into the latter part of 2022. Page five details these new markets, and as you can see, we are rounding out our footprint to include some of the best growth markets in the country. Before I turn it over to Rhett and Ron to dive into the details, allow me to touch on a few numbers referenced on page six of the deck. For the quarter, $8.7 million in operating net income, or $0.52 per share, 12% annualized organic loan growth in Q4, right on top of where we thought we would be, 23% annualized deposit growth for the quarter, as we continue to build liquidity. Our deposit mix transition over the last year does not need to go unnoticed. We're building a really strong core funding base, 11 basis points on non-performing assets as credit quality remains very strong. Double-digit return on tangible common equity and putting us now at $4.6 billion in assets, rounding out a really, really nice quarter for us. Let me hand it over to Rhett to dive into the balance sheet and the credit metrics a little bit. Rhett? Thank you, Billy. Looking at slide seven in the deck, our loan portfolio has continued to see steady growth throughout the past four years, ending 2021 just short of $2.7 billion in outstanding loan balances. That equates to a compound annualized growth rate of 20% over the same time period. Our average loan portfolio yield for the year 2021 was 4.67% and was relatively stable throughout the year. We wrapped up the most recent quarter at 4.53%, down from an unusually strong Q3 but in line with prior quarters this year. We're extremely pleased with 2021 performance, especially given the challenging headwinds generated by excess liquidity across all financing sources in the marketplace, continuing to put pressure on loan yields. Likewise, our deposit portfolio has seen continued strong growth over that same time frame with exceptionally strong performance in 2020 and 2021. During the current quarter, our core deposits increased over $220 million or 23% annualized. Between this growth and our focus on controlling funding costs, we've lowered our total cost of deposits to 22 basis points, a 3 basis point decline from the previous quarter and end of the year with a loan to deposit ratio of 67%. Ron will provide more information on deposit composition in a few slides. As you can see on page eight, our loan growth for the year finished strong with Q4 net organic loan growth of over $75 million. Year to date portfolio balance growth of $311 million represents an annualized growth rate of 12.4%. Considering these levels were net of $35 million in PPP loan forgiveness activity in Q4 and over $375 million in PPP loans forgiven since year-end 2020. This capped a very strong production year for 2021. Portfolio mix, excluding PPP impact and geographic diversification in portfolio remained consistent throughout 2021. We're very proud of what proved to be an outstanding organic loan growth year for our bank. Moving into 2022, while we recognize our loan to deposit ratio is below historic levels, we're thrilled to have excess liquidity to fund what we believe will be a significant year of production from our new lending team members and our legacy core markets. Slide nine shows our overall asset quality metrics continuing the same strong trends we saw all year. Q4 saw our NPA ratio fall 3 basis points to 0.11%, the lowest level since 2009. Net charge-offs of 5 basis points, an over 30 day past due ratio of 34.33%, and classified loans of 0.35% were all consistent with Q3 levels. Despite the aforementioned loan growth, our CRE exposure actually saw a slight reduction at year-end, primarily in our construction and development segment, as a number of construction projects, including several owner-occupied transactions, were completed late in the year and moved into permanent financing positions. As a result, we ended the year at 75% and 290% of capital for our regulatory C&D and total CRE guidance ratios, both down from second and third quarter ends. Overall, our asset quality continues to demonstrate superior metrics resulting from a combination of strong economic conditions in our market area and unwavering commitment to strict credit underwriting standards. As for our PPP loan book, as you can see on slide 10, we have nearly completed our 2020 loan pool forgiveness, and our 2021 pool has seen 63% of originations successfully forgiven to date. We will be working through the remaining $50 million in balances over the next couple of quarters as borrowers submit final applications for forgiveness, and don't foresee any issues in concluding our participation in the program. We could not have been more pleased with our team's initial commitment to nimble responsiveness, and dedication throughout the PPP loan program process. Now I'll turn it back over to Ron to walk you through our allowance provisioning and some additional detail on our margin. Ron? Thanks, Rhett. Now let's move forward to slide 11, our loan loss reserve. As Rhett indicated, our strong credit quality has led to minimal provision for the quarter. At quarter end, our allowance to originated loans and leases was at 0.74%, and our total reserves to total loans and leases was at 1.31%. Given our positive credit outlook going into 2022, we expect to continue minimal provision going forward, mainly to support new growth and conservative safeguard against unforeseen events. On slide 12, our deposit composition has little changed for the quarter. Our non-interest bearing deposits grew 32% annualized, and our non-interest bearing to total deposit ratio held at 26%. Looking ahead, we are cognizant of a potentially volatile rate environment and its impact on deposit pricing. However, given the bank's current liquidity position, we don't expect significant near-term changes in deposit costs or composition. We do, however, anticipate some minimal round of repricing of some higher-cost Sevier County Bank time deposits in the coming months. Moving on to slide 13, liquidity utilization. During the quarter, we continued to experience liquidity growth and in line with our previously discussed securities purchasing program, began strategically putting excess money to work. Our bond purchase strategy has been built around two central themes. Discipline and patience. Our directive has been to take advantage of uptrend periods and taper purchases during periods of market weaknesses, as we saw near year-end. As we move into 2022, we will continue to evaluate our liquidity utilization for support in not only our loan growth, but our continued purchase of securities. Even with purchasing over 250 million securities this quarter, our cash position remained virtually unchanged when compared to the prior quarter, with total cash just above $1 billion. Our net interest margin for the current quarter was 2.92%, a decrease of 33 basis points from the prior quarter. During the quarter, our margin was negatively impacted by $1.3 million less of discount loan accretion and $1.2 million less of PPP fee accretion. However, with over 17% of our total assets and non-yielding interest on cash, our excess liquidity position continues to be the largest factor suppressing margin today. During the quarter, we did experience a decline in our securities portfolio yields due to the recent purchases of short duration, lower yielding bonds. However, these purchases provided us with over $500,000 more revenue and will result even higher income next quarter as we realize a full three months of interest income. Also on a positive note, after removing all accretion, loan growth remained in line with yields experienced in the prior quarter. Additionally, we also benefited from a 5 basis point decrease in interest bearing deposits. We are forecasting the first quarter margin in the range of 2.9%-2.95%, slightly lower than we anticipated due to the additional inflows of deposits. The margin also includes estimated loan accretion of 6 basis points or $416,000 and estimated PPP loan fee accretion of 20 basis points, approximately $1.4 million. Given the asset-sensitive nature of our balance sheet, we feel confident that we are appropriately positioned to benefit from what is shaping up to be a rising rate environment. Our most recent rate shock shows a 6% increase in net interest income and up 100 basis points in ROA. We have $430 million variable rate loans without floors and another $600 million that are in a floor position. Of these floored loans, we have over $67 million that will go back to floating after the first 50 basis points of rate hikes. We also have at year-end, $900 million of interest-earning cash that we price in the event of a rate move. Despite some modest deposit cost increases in the up 100 scenario, we believe our heightened liquidity position and better deposit composition will allow us to insulate ourselves from the full effect of any market rate increases. Before we leave this slide, let's touch base on operating revenue. Operating revenue growth continues to be a primary focal point for the company, especially since our other traditional operating metrics continue to be skewed as a result of the excess liquidity in the current operating environment. Our operating revenue remained strong, nearing that of the prior quarter, despite a $2.5 million reduction in loan discount and PPP fee accretion. We were also pleased to have another strong quarter of non-interest income, which contributed $6.8 million or 18.5% of total operating revenue. As Billy mentioned, we will continue our revenue expansion, both from new opportunities and existing platform optimization, which is a primary focus for the company as we move into 2022. Diving deeper into non-interest income, let's move on to slide 14. Non-interest income continues to experience strong tailwinds as our operational focus on growing non-spread base revenue streams are continuing to play out. Non-interest income increased $500,000 from the prior quarter to $6.8 million, which includes service charges and interchange income increasing over $500,000 from increased activity and transaction volume and the inclusion of Sevier County Bank. Investment services revenue increasing over $170,000 primarily from the addition of our new wealth team and increased volumes from existing wealth advisors. Offsetting some of these gains was reduced income from our mortgage and insurance units, mostly due to seasonality. We also recognized a $331,000 one-time gain in other income related to the sale of our credit card portfolio. In comparison with the prior quarter, our non-interest income increased almost 8% and more impressively, having increases over 36% from prior year quarter. We remain very optimistic regarding strong opportunities for fee generation within our family of fee generators. Our forecast for the first quarter is to have a non-interest income of $6.9 million. Moving on to slide 15, operating expenses. For the fourth quarter, our operating expenses increased $1.8 million to $25.1 million and our salary and benefit expense increased $1.4 million to $15 million, both in line with our prior quarter guidance. A significant portion of the increase was due to the additional operational expenses related to Sevier County Bank as well as expenses related to our Lift Out initiatives. As Billy highlighted earlier, we have completed the integration of Sevier County Bank. Looking back, we are extremely pleased with the results of the integration as well as surpassed our original cost-saving estimates. As expected, our operating efficiency ratio was elevated this quarter at 68%. Looking forward into 2022, we anticipate this ratio decreasing into the mid-60s range as the new and higher Lift Out teams gain steam as well as having our other internal platform optimization strategies unfold. For the first quarter of 2022, we expect an expense run rate of $25.5 million range, with salary benefit expense of approximately $15.5 million. Slide 16 summarizes some of our current technology initiatives. As mentioned on previous calls, we continue to advance our technology platforms in all areas of the bank. Our primary focus has always been to enhance and improve our customers' bank experience and make SmartBank an easier organization to do business with. In fulfilling this mission, part of our strategy has been to invest heavily in remote working technologies and allowing employees the flexibility to work remotely as needed. While we currently don't envision the majority of our workforce working remotely full-time, we do anticipate certain teams embracing a hybrid or even a fully remote working model. Having this capability has increased employee productivity and perhaps more importantly, given us flexibility to recruit new team members which previously would have been geographically unavailable. As we move into 2022, we are extremely excited about the technological improvements to come and benefit of providing recruiting the best and brightest talent across all operational areas. To finish off on slide 17, capital. Our capital ratios continue to be some of management's most monitored metrics. Management routinely evaluates the bank's capital position as it relates to projected forecasts, lending opportunities, as well as potential strategic initiatives. At quarter end, the company and bank both exceeded well-capitalized regulatory standards and we believe is well-positioned to execute on our 2022 strategic plan. As in previous quarters, the company continued to build its tangible book value per share. At quarter end, our tangible book value was $19.26, representing a quarter-over-quarter annualized growth of 5% and a growth of 7.5% for the year. We continue to be focused on building long-term shareholder value. With that said, I'll turn it back over to Billy. Thanks, Ron. To close, our markets are all performing extremely well. The Southeast is poised for great continued growth, and it's one of the reasons you're seeing this pivot to a strategy of using these commercial banking lift-out opportunities. We're becoming recognized in our region as a great place to work, and I believe there are a small group of banks in that peer set where high caliber bankers want to go when looking to make a move. We are becoming one of those places. The lending side of the house continues to be robust. Production has been strong, but we're still battling some of the excess liquidity in the system that's leading to continued lower line utilization and some pay downs. That said, our new teams are starting to build nice pipelines, and as these loans move onto the balance sheet, we believe that loan growth will continue in the low to mid-teens on an annualized basis for the next few quarters. As Ron alluded to, we've got several moving parts as the new teams ramp up, as PPP income rolls off, w ith 20% of their assets in cash, just a little rate movement upward should provide some nice wind at our back. We feel very good about our ability to produce solid metrics this year even with the investments we've made, and as we move into becoming a strong organic revenue growth company. The momentum that is being built as we execute our plan this year will be transformative to our financials. It's a very exciting time to be part of this company as a client, as an associate, and as an investor, and we're well positioned moving forward. I'll stop there and we will open it up for questions. Okay, we do have our first question, and that question comes from Graham Dick of Piper Sandler. Graham, please go ahead. Hey, good morning, guys. Hey, Graham. Hey, Graham. You know, obviously 2021 was, you know, a huge year for you guys on the strategic front with, you know, M&A, new hires, lift outs, and market expansion. I'm just trying to understand, are you guys thinking about maybe slowing down this year and just focusing on, you know, operating the franchise as it is currently? Are you still just seeing, you know, so many great opportunities, you know, out there that, you know, it might simply be too good to pass up, maybe in the form of more lift outs or new market entries? Yeah, it's a great question, Graham. You know, you've been familiar with our story. You know, I think we're always opportunistic. But at the same time, I really think our plan for this year is really more of just a blocking and tackling year. This is a year where we really are focusing on, you know, the integrations, in particular, these new team members, making sure that we have success in all these new zones, really focusing on expense controls, getting that efficiency ratio. We've made some huge investments last year and we're really excited about those. We need to make sure that those come to fruition like we want. I would say we're gonna lean to a little bit more of what I would call a blocking and tackling year. Could there be some additional hires that come in their existing markets? Yes, possibly. We're gonna be opportunistic on the hiring front, but probably not looking to replicate anything near what we did in 2021. Okay, great. That makes sense. Definitely, you know, a really busy year for you all. I guess as that translates to expenses, I heard that $25.5 million dollar guidance for at least 1 Q. Are you thinking that might be sustainable for the next few quarters or maybe just a little bit higher, given you don't, you know, have anything planned to, or I guess, any plans for any big strategic initiatives to start the year? Are you seeing, expecting to see maybe a little bit of wage inflation or general cost inflation or, you know, additional tax spend that might lift that higher, maybe over $26 million, as a run rate for the full year? Yeah, Ron, I'll let you take that. Obviously, you're getting, I mean, wage inflation, I think we're all experiencing some of that. We know that there's probably a little bit of build into that. Ron, you wanna give some color on your thoughts around kind of forward guidance? Yes. The Q1, you know, $25.5 million, I think we'll max out around $26 million in the latter, you know, Q3, Q4. I think we've already embedded some wage inflation in our numbers. I'm pretty confident that we probably won't go over that $26 million mark for later quarters. Around $25.5 million, $25.7 million for the first two quarters. Okay, awesome. That's very helpful. I guess just the final thing for me, last one. It's just those numbers on the asset sensitivity or more specifically your variable rate book. Do you mind just going back and repeating those? I've got this $440 million number maybe in variable rate loans that are not before. Is it? I might have misheard it. Just, if you could just repeat that'd be helpful. Sure. We have $440 million that are out of floors that will reprice immediately or within three months of a rate hike. We have $600 million that are in floors. After 50 basis points of rates up, we should see probably around about $67 million-$70 million of those turn to full 15 variable. Okay, perfect. All right, that's it for me, guys. Thanks for taking my questions, and congrats on another really good quarter. Thanks, Graham. Thank you, Graham. The next question comes from Brett Rabatin from Hovde Group. Brett, please go ahead. Hey, guys. Good morning. Hey, Brett. Hey, Brett. I wanted to first go to the margin. I think if I heard you correctly, you gave guidance for 2.90%-2.95% for the first quarter. I wanted to make sure I understood the linked quarter increase in the securities portfolio. One, that 2.90%-2.95%, I assume that includes the $460,000 and the $1.4 million for discount accretion and the PPP fees. Then I wanted to make sure I understood the commentary around the securities portfolio correctly. It sounds like you added about $500,000 in income from the securities. Was just curious how much you added or what you bought during the quarter and how much the yield was on the acquired securities? Yeah. I'll take that, Brett. For the 2.92%, it's fully loaded with the accretion that was booked in the guidance we gave. A little bit less accretion for Q1 b ut for the securities we purchased during the quarter $250 million worth of securities. We're probably looking around 1.42%-1.43% interest rate yield on those with duration probably around 5% at this point. A little less than 5%. Going forward, we did purchase a little bit in 2022 $50 million so far, and we pushed our duration down into the three to three and half year mark. That's probably around 1.50%, s o that's a--d oes that answer your question or you need more information on that? That's helpful. As I just think about the 6% for 100 basis points upside and I think about the first quarter, you know, and the possibility of a March rate hike, you know, it seemed like between the liquidity that you have on the balance sheet that reprices and the loans that reprice, you know, it seemed like your margin should be over 3%, you know, depending on rate hikes later this year. You know, I guess, am I thinking about it correctly? Is there anything that would be maybe an impediment to that? Yeah. We've, you know, other than the rate shock, we have done a scenario where, you know, March is rates up for the first quarter is probably de minimis, just it's gonna be so late in the quarter. We projected 25 basis point increases for March, June, and December. We're looking at a additional $5.2 million of net income, net interest income on that. I'm sorry, excuse me, net income on that. We are, our margin will go up with that. Especially if we have the loan growth we're expecting to get some yield off that, probably $600 million of, you know, cash that we're sitting on. I think up rate will be our friend going forward. Okay, t hat's great color. Lastly, you just mentioned loan growth. I'm curious, you know, the dealer floor plan in particular, you know, how does that ramp up pretty quickly here, and how much does that contribute to the low- to mid-teens loan growth this year? Yeah. Brett, I'll let you speak a little more specifically the thoughts around that. Probably not much right out of the gate. Brett, as you know, as we look to bring these folks on, we think this first quarter is gonna be a lot of transition opportunities for us. You know, especially as dealer inventories are a little bit lower right now, their line utilizations are lower, which we actually think is a great time to probably get into this business, as some of those opportunities present. Rhett, do you want to give a little color on our dealer group and thoughts around that? Yeah. Billy, I was gonna basically kind of say pretty much the same you did. I think we'll see more impact there in the latter part of the year than the early part of the year. I think as you mentioned earlier, you know, we've spent most of the fourth quarter going into the early part of this quarter in just preparing that division. That's a new line of business for us. Getting software capabilities in place, getting everybody set up and ready to go has been a key focus. Utilization rates are still low in that space. I would anticipate it to be a little more impactful on the second half of the year than the front end of the year. Okay, t hat's great color. Appreciate it. Thanks, Brett. Thank you, Brett. Our next question comes from Matt Olney from Stephens. Matt, please go ahead. Hey, thanks. Good morning, guys. Good morning, Matt. Morning, Matt. I want to ask more about the excess liquidity that you have right now. You've hired a number of new loan producers, so I'm sure much of the liquidity is earmarked for loan growth this year, but it still seems like you've got room to deploy a lot more liquidity in the securities portfolio. What are the updated thoughts about how much you're willing to deploy into securities throughout the course of the year? Yeah. Ron, yeah, I'll just high level. Ron, I'll let you kind of give some maybe a little bit deeper color. You know, for us, Matt, it's just been, you know, we've just not been real excited, you know, we felt like we needed to put some to work in Q4, which we did. Ron and the team were very, I think, deliberate in the way they invested it and kind of watched the market to do that. Obviously, with projected rate increases in there, we're watching that closely. I think our thought, we like if we do go, we like staying shorter, given what's going on. I think at the end of the day, you know, we really like this position of additional liquidity strength right now. Ron, I'll let you kind of deal with that. While it does drag, it's a nice tool to have in the tool belt. Yeah, thanks. That's a good question. We originally wanted to purchase around $400 million of securities. We are about $100 million short w e are in pause mode. We're kind of letting the rates stabilize a little bit to see where this is going. We do anticipate to probably purchase another $100 million in the near future, and then kind of see where our loan growth is going, and more importantly, see where our deposit growth is going. Again, we can look forward to see what's best b ut we've been patient a long time. It makes no sense to rush out today and go ahead and tie up in investment securities. It may not be the best answer, but that's what we're doing at this point in time. No, I appreciate that. It's a moving target with lots of, you know, difficult moving pieces there, so appreciate the color. Also wanna make sure I appreciate the guidance around efficiency. I think I heard you say a mid-60% range. Just wanna clarify, is that the average for the full year? And if so, should we be assuming a little bit on the higher end in the front part of the year and a little bit lower in the back half of the year? Yeah. No, I'm sorry. This guidance is for the Q1, so it's not for the full year. We are higher for Q1 and we will drift down and ending probably around the mid-60 range by year end. Yes, to what you said, it will get better as we go forward. Okay. Thanks for the clarification. Thank you, Matt. The next question comes from Feddie Strickland at Janney Montgomery Scott. Feddie, please go ahead. Hey, good morning, guys. Morning, Feddie. Morning, Feddie. Just wondering, do you think the continued in-migration of people into areas like Tennessee and the Panhandle can offset some of the pressures of higher rates on the mortgage side? Yeah, you're from a mortgage revenue standpoint, Feddie? The demand side. Is that- Correct. Yeah, just from a mortgage revenue standpoint. We do. You know, we've never been a huge refi shop anyway, you know, with the, you know, our focus has been more on purchase transactions. Yes, to answer your question is, we believe, I think we, you know, we believe that our mortgage line can stay, can continue to be a good contributor for us, just with the inflow, and growth that we're seeing, population growth we're seeing in our zones. You know, inventory is probably one of the biggest headwinds. When we talk to our teams out in the field, you know, it's just lack of inventory is probably the biggest headwind. If that would stay reasonable, we still feel really good that mortgage could be a nice contributor going forward. Gotcha. Are you hearing anything incrementally different from customers on their business outlook? Or are they seeing any kind of easing up of supply chain issues? Or has that been an issue for your customers? You know, it depends. You know, I'll let Rhett you know kind of chime in on what he's hearing from our market teams b ut I think it's dependent on the industry. For the most part, I think most of our businesses that we're dealing with have been pretty positive. Miller, you may have some comment on this as you talk to some of our clients. The ones I've talked to feel pretty good about where we are. I think there are some supply chain challenges, but overall most of our customers feel pretty good. I don't know, Miller, you or Rhett have probably-- I think without a doubt, it's touched everybody a little bit. Hopefully, it has bottomed and people don't see it getting much worse. Hopefully, it'll gradually get a little bit better. Yeah, I think it's, supply chain's probably touched everybody in some sense. Rhett, anything from you? I was gonna say the same, Billy. I mean, I think the supply chain clearly you probably see it more so in certain asset areas as far as equipment just delays in being able to complete a purchase if somebody needs to add a new piece of equipment or expand the fleet or something to that effect. Just finding available assets to purchase is still a challenge at times. But for the most part, just general business activity, most clients were very pleased with 2021. Numbers are looking very good and the outlook that we're hearing most of them are bullish on 2022 at this point. Okay. No, that's great color. Thanks. One last question. I'm just curious, do you see opportunities to improve the margin even without the Fed hike? It sounds like you guys have some from the prepared comments, that's some favorable deposit repricing coming up. Ron, do you want to touch base on deposit? The positive pricing, we will have some, but it's probably very similar to what we saw last quarter, you know, 2 or 3 basis point compression movement. If there were no Fed increases coming out, we would be able to improve the margin by, you know, taking our excess security that would gain 14, 15 basis points and putting investment security. We would be able to improve the margin. You know, on the back of the napkin, we're looking, you know, our excess security today is probably holding a margin around 30 basis points. It's, you know, we can probably move the needle one way or the other and get the margin elevated over time, even, you know, with or without the Fed increases. Got it. Thanks for answering all my questions and, congrats on a great quarter, guys. Thanks. Thanks, Feddie. Thank you. Thank you, Feddie. The next question comes from Kevin Fitzsimmons from D.A. Davidson. Kevin, please go ahead. Hey, good morning, guys. How are you? Hey, Kevin. Hey, Kevin. Most questions have been asked and answered. I was just more kind of piggybacking on Feddie's last question there. You know, because when we think about the tailwind of favorable mix shift of earning assets of taking that excess security, putting the work in the securities book, theoretically helping the margin, it seems like it would only become more evident if you know, the flow into the bucket of excess liquidity starts to slow down a little. In other words, deposit growth. I know I think you guys in your prepared remarks said you expect excess liquidity and deposits to remain high or elevated. I'm not sure what word it was. Should we be thinking more about a scenario where, you know, we've had this really outsized deposit growth, but should we be looking out a number of quarters and starting to think about a much more limited deposit growth and maybe even having a quarter where deposits go down? Maybe I'm just curious how you would think of that, because maybe we're looking out at a pivot point where NII has been driven by balance sheet growth while the margin has been getting hit. Could we be setting ourselves up for the opposite, where if deposit growth really moderates you even without, you know, and then on top of it, rate hikes, you can really, you know, I don't see why you wouldn't see healthy margin expansion. If that excess liquidity is draining, which is a good thing for the margin, it maybe keeps a limit on average earning asset growth. I'm just-- I know that's a lot, but I just wanted to throw that kind of scenario out there and see what you thought about deposit growth. Yeah, Kevin, I think you're right. I think a lot of it's gonna be asset mix movement. I mean, it really is at the end of the day. The wild card there is what the continued deposit growth number are gonna be. I don't think there's any doubt we were surprised with the amount of deposit growth we saw in 2021. You know, the good thing about it, you know, we've picked up a lot of these new teams, and these are great relationship bankers. You know, we're moving the other accounts in. Yes, I do believe that you'll see deposit growth slow a little bit. As we change that mix, you know, kind of going back to Feddie's comment, that should help margin on its own, absent any real large rate increases from the Feds. I think your comments are spot on, and I don't want anything from you. No, I totally agree. We've been, you know, modeling that one way or the other. You know, we were a different bank coming in the pandemic, and now we're a different bank coming out. The one thing we were getting our hands around was the lift outs. We did hire good deposit gatherers. We're trying to balance what is the probable answer. That's a very good question, by the way. A great time to have. Great time to have. Yeah, we'll just have to You know. See how this one plays out. Kevin, it's funny. Ron and I were talking this morning. You know, when this pandemic started, we said, "You know what? You know, through something like this, there's probably some opportunity. We need to make sure that we're positioned as we come out of this thing to come out swinging." I think we believe we have, and I love where we're sitting today. Like I said, even though yes, you know, the additional liquidity is dragging margin a little bit, man, I'll tell you, it's a great position of strength for us to be sitting in today. I like having this asset sensitivity on the balance sheet gives us a lot of flexibility with, you know, with changing mix, putting some of it to work in investments if the yields get where we like them. It's a good spot to be in. Yeah, no, I totally understand why it's difficult to make any kind of forecast or prediction about deposit growth. It seems that, you know, and partly it's because we have a backdrop of rising rates now that the tone about excess liquidity seems like in the past quarter or so, it has shifted from being the biggest drag on earnings to being the biggest opportunity looking forward. Yes. I think that deposit growth aspect is key. Yeah, agreed. One additional thing, Ron. I was trying my best to keep up with you in the rate shock scenario. Would you mind giving those numbers again? Sure. With our 100 basis point shock, we'll see a 6% increase in net interest income. Currently, we have $430 million variable rate loans without floors, another $600 million with. At 50 basis points, of that $600 million, $67 million will go back to floating. We have a little bit of a ways to go to get more of these loans out of the floor position. Got it. Great. Our deposit betas for this is a little about 40%. In all actuality based on where we're at today, I think we can go lower than that, p robably 30%-35% range. We, you know, I think there's still some opportunities off this. Again, our base is very indicative that we're in a pretty good position going forward. Got it. Thanks, Ron. Thanks, Kevin. Thanks, Kevin. Thank you, Kevin. Our next question comes from Stuart Rhodes of KBW. Stuart, please go ahead. Hey, guys. Good morning. Hope everyone's doing well. Just two more questions from me. Most of my stuff has been answered already. Ron, if we could go back to your fee guidance for next quarter. I think you mentioned you expect fees of about $6.9 million in the first quarter. You know, which is a little up from this quarter, but if I understood you correctly, there was about $340,000 from a one-time gain on this portfolio. So just curious what you see as driving the higher fee guidance next quarter? Yeah. We really have two items that are driving it. You know, our mortgage line, the seasonality of the fourth quarter, always seeing a decrease. We're seeing that ramp back up more towards our Q3 production level. It's about a $160,000-$170,000 increase. The other items are wealth, y ou know, we brought on this new wealth division that came on mid to late fourth quarter, y ou know, that's. We're looking to get about $400,000 of increased revenue from that one item. Those two alone will get us there. Insurance again, less of an impact. Increasing probably more to Q3 levels. Those three items are gonna drive us back to that $6.9 million run rate. Okay. Great. How are you thinking about a growth rate for the full year on top of that? I mean, do you think, you know, total fee income of, you know, $28 million is reasonable just given, you know, the hiring momentum and expectation for, you know, kind of improved contribution from some of your new teams there? Yeah. We're not really getting into full year guidance. I think Okay. You know, $28 million is attainable, and then some. We'll take that quarter by quarter as we move forward through the year. Got it. Just one more for me. Turning to capital. You know, I think you know your TCE ratio and kind of Tier 1 risk-based capital are a little bit I guess artificially low right now just given all the excess liquidity. But given your expectation for you know pretty substantial loan growth this year, you know, is there any appetite to I guess tap you know tap capital markets given you know do you see your rates are gonna start moving higher? Maybe you know any appetite for you know common equity or you know additional sub-debt? Just kind of any comments there? Thanks. Yeah. I'll jump in there, Stuart. Yeah, for us, I think we're always watching what's going on in the market and we're, you know, we'll continue to look to be opportunistic. We do feel that the ratios have stabilized. They got a little pinched with the acquisitions, which we knew. You know, as we look to go ahead and project out into 2022, we feel pretty comfortable with the position. We've always been comfortable leveraging appropriately. We think that's the right thing to do from a shareholder standpoint. You know, prudently leveraging it is something that we're comfortable with. We know where the markets are and could look for opportunities to take advantage of that potentially as we look ahead into the year. Okay. Great. Thanks for taking my questions, guys. Thank you. Thank you. Thank you, Stuart. Just before we ask the last question, it is just a quick reminder. It is star one to ask a question. Okay, our final question comes from William Wallace of Raymond James. William, please go ahead. Thanks. Good morning, guys. Hey, good morning to you. I'm good, thank you. Couple housekeeping questions. On the NIM gap for the first quarter, what is the PPP fees you all are anticipating? I believe that the PPP $1.4 million. I'm sorry, could you repeat that? $1.4 million. $1.4 million. Okay. Yeah. Just on the loan guide, I'm curious, and I apologize if I missed this. I got on a little bit late, but I'm curious what pipelines look like coming into the first quarter versus coming into the fourth quarter.? Just from a loan pipeline standpoint, I'd say their pipeline looks stronger going into Q1 than they did going into Q4. Q4 was good. I think Q1's a little bit better. As you know, pipelines, you got the get them. It just takes a while to get them through the process, through the system, get them on the books b ut pipelines are good, are really good. We feel these new teams are coming online well with some nice momentum and feel pretty bullish on our pipeline. Maybe just briefly, William? Yeah. Yeah. To that last comment, what do the pipelines look like or what does production look like out of the you know existing producers, not the new teams? Are they also growing? Yeah. Good. I think when you look at the existing markets, I think that you know we tend to probably battle the payoff, paydown issues more in the existing markets where we've you know where we've got a stronger base, got a larger footprint. Yeah, I think that's what it is. When you look at net growth out of those markets, those markets are not. You know, production's good, but their contribution to the net balance growth number is a little bit smaller. We think the new group can, the newer groups can kind of help bolster that low to mid-teens guidance on the loans. Okay, great. Yeah, that's very helpful. I appreciate all the color today, guys. Thank you. Bye. Thanks. Thank you, William. There are currently no further questions registered, so I'll pass the conference back over to the management team. Thank you. Appreciate it. Thanks so very much for your support of our company, if you're interested in where we're headed. I hope you each have a great week. Take care. That concludes the SmartFinancial fourth quarter 2021 earnings call. You may now disconnect your line.