A smooth patch is a condition in which the rough outer layer of bark is decomposed or sloughs off in response to colonization by a fungus. Trees with smooth patch have areas of smooth, light-colored bark that are sunken in compared to surrounding bark.
Patches may form clear oval to circular depressions in the bark or may grow together resulting in larger irregular areas of smooth bark along the trunk and branches. In Minnesota, a smooth patch is commonly found on white oak trees, but maple, ash, willow, linden, and other trees may be affected as well. The fungi Aleurodiscus spp. and Dendrothele spp. cause smooth patch. These fungi do not invade the living portion of the tree and therefore are not harmful to the health of the tree.
Information source: https://extension.umn.edu