Atlantic Capital Bancshares, Inc. Reports Third Quarter 2021 Results

10/27, 10:05 PM (Source: GlobeNewswire)

ATLANTA, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income for the quarter ended September 30, 2021, of $13.3 million, or $0.65 per diluted share, compared to $8.6 million, or $0.40 per diluted share, for the third quarter of 2020 and $11.8 million, or $0.58 per diluted share, for the second quarter of 2021.

“With strong growth in loans, deposits, and revenue, Atlantic Capital recorded another quarter of solid operating results. Our clients are performing well, and Atlantic Capital is fueling their prosperity with reliable service and innovative solutions. New business pipelines are robust, and we expect continued strong momentum in the fourth quarter of this year and into 2022,” remarked Douglas Williams, President and Chief Executive Officer.

Third Quarter Highlights(1)

  • Total assets were $4.2 billion, compared to $3.8 billion at June 30, 2021 and $2.9 billion at September 30, 2020.
  • Return on average assets totaled 1.36% and return on average equity was 14.69% in the third quarter of 2021.
  • Loans held for investment, excluding Paycheck Protection Program (“PPP”) loans, increased $66.3 million, or 12.3% annualized, from June 30, 2021, and increased $269.4 million, or 13.8%, from September 30, 2020.
  • Quarterly average deposits increased $106.3 million, or 12.9% annualized, compared to the second quarter of 2021 and increased $941.7 million, or 38.1%, compared to the third quarter of 2020.
  • Cost of deposits decreased to 0.08% from 0.10% in the second quarter of 2021 and from 0.19% in the third quarter of 2020.
  • Tangible book value per share increased to $16.94 from $16.40 at June 30, 2021 and from $15.11 at September 30, 2020.
  • Annualized net charge-offs to average loans totaled 0.00% for the third quarter of 2021 and 0.05% for the full year 2021. Non-performing assets to total assets were 0.10% at September 30, 2021.
  • The allowance for credit losses was 1.16% of total loans held for investment at September 30, 2021, compared to 1.27% at June 30, 2021 and 1.59% at September 30, 2020.

Income Statement

Taxable equivalent net interest income totaled $25.1 million for the third quarter of 2021, compared to $22.1 million in the third quarter of 2020 and $26.0 million in the second quarter of 2021. The third quarter of 2021 included $1.9 million in PPP loan income, compared to $3.0 million in the second quarter of 2021. The second quarter of 2021 also included $671,000 in interest income related to the receipt of an investment prepayment penalty and the accelerated accretion of a loan discount upon payoff.

Taxable equivalent net interest margin was 2.69% in the third quarter of 2021, compared to 3.14% in the third quarter of 2020 and 2.91% in the second quarter of 2021. The taxable equivalent net interest margin excluding PPP loans was 2.54% for the third quarter of 2021, compared to 2.70% for the second quarter of 2021.

The yield on loans in the third quarter of 2021 was 3.91%, an increase of 9 basis points from the third quarter of 2020 and a decrease of 28 basis points from the second quarter of 2021. Excluding PPP loans, the third quarter of 2021 loan yield was 3.71%, a decrease of 24 basis points compared to the second quarter of 2021. In addition, loan interest income for the second quarter of 2021 included $405,000 in previously mentioned accelerated discount accretion.

The cost of deposits in the third quarter of 2021 was 0.08%, a decrease of 11 basis points from the third quarter of 2020 and a decrease of 2 basis points from the second quarter of 2021. The cost of interest-bearing deposits decreased 13 basis points to 0.15% from the third quarter of 2020 and decreased 2 basis points from the second quarter of 2021.

In the third quarter of 2021, we recorded a negative provision for credit losses of $2.4 million, compared to a provision for credit losses of $28,000 in the third quarter of 2020 and a negative provision for credit losses of $933,000 in the second quarter of 2021.

Noninterest income totaled $4.6 million in the third quarter of 2021, compared to $2.5 million in the third quarter of 2020 and $3.6 million in the second quarter of 2021. Other noninterest income in the third quarter of 2021 totaled $1.1 million and included $930,000 in income from Small Business Investment Company (“SBIC”) funds.

Noninterest expense totaled $15.0 million in the third quarter of 2021, compared to $13.7 million in the third quarter of 2020 and $15.2 million in the second quarter of 2021. The third quarter of 2021 included an expense reduction of $3.0 million as a result of the employee retention payroll tax credit pursuant to the CARES Act. Additionally, there were $2.9 million in merger related expenses.

(1) Commentary is on a fully taxable-equivalent basis unless otherwise noted. Consistent with SEC guidance in Industry Guide 3 that contemplates the calculation of tax-exempt income on a tax equivalent basis, net interest income and net interest margin are provided on a fully taxable-equivalent basis, which generally assumes a 21% marginal tax rate. We provide detailed reconciliations in the Non-GAAP Performance and Financial Measures Reconciliation table on page 13.

Balance Sheet

Total loans held for investment were $2.3 billion at September 30, 2021, an increase of $85.8 million from September 30, 2020 and an increase of $9.0 million from June 30, 2021. Loans held for investment, excluding PPP loans, increased $66.3 million, or 12.3% annualized, from June 30, 2021, and increased $269.4 million, or 13.8%, from September 30, 2020.

The allowance for credit losses was 1.16% of total loans held for investment at September 30, 2021, compared to 1.27% at June 30, 2021. The decrease in the allowance was a result of an improvement in our current expected credit losses, or CECL, economic forecast along with credit rating upgrades for certain criticized and classified loans. Excluding the impact of PPP loans, the allowance for credit losses at September 30, 2021 was 1.18%, compared to 1.33% at June 30, 2021.

Total average deposits were $3.4 billion for the third quarter of 2021, an increase of $941.7 million, or 38.1%, from the third quarter of 2020 and an increase of $106.3 million, or 12.9% annualized, from the second quarter of 2021. Average noninterest bearing deposits were $1.4 billion for the third quarter of 2021, an increase of $520.4 million, or 61%, from the third quarter of 2020 and an increase of $79.4 million, or 24.5% annualized, from the second quarter of 2021. Noninterest bearing deposits were 40.3% of total average deposits in the third quarter of 2021, compared to 34.6% in the third quarter of 2020 and 39.2% in the second quarter of 2021.

Merger Update

On July 22, 2021, Atlantic Capital and SouthState Corporation (“SouthState”) entered into an Agreement and Plan of Merger, pursuant to which Atlantic Capital will merge with and into SouthState, with SouthState as the surviving corporation in the merger. The merger remains subject to approval by our shareholders at the Special Meeting scheduled for November 16, 2021, as well as approval by the Board of Governors of the Federal Reserve System. Approval of the merger from the Office of the Comptroller of the Currency has been received.

Non-GAAP Financial Measures

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) taxable equivalent interest income; (ii) taxable equivalent net interest income; (iii) loans held for investment excluding PPP loans; (iv) loan yield excluding PPP loans; (v) taxable equivalent net interest margin; (vi) taxable equivalent net interest margin excluding PPP loans; (vii) taxable equivalent income before income taxes; (viii) taxable equivalent income tax expense; (ix) tangible common equity to tangible assets; (x) tangible book value per share, and (xi) allowance for credit losses to loans held for investment excluding PPP loans, in our analysis of the Company's performance. Tangible common equity excludes goodwill from shareholders' equity.

Management believes that non-GAAP financial measures provide a greater understanding of ongoing performance and operations and enhance comparability with prior periods. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as determined in accordance with GAAP, and investors should consider Atlantic Capital’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Non-GAAP financial measures may not be comparable to non-GAAP financial measures presented by other companies.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” “strive,” or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about the proposed merger with SouthState, Atlantic Capital’s confidence in its strategies and its expectations about financial performance, the impact of COVID-19 on operations, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings. The forward-looking statements are based largely on Atlantic Capital’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond Atlantic Capital’s control. Atlantic Capital undertakes no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements as a result of, among other factors, the risks and uncertainties described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Atlantic Capital’s Annual Report on Form 10-K. Additional information and other factors that could affect future financial results are included in Atlantic Capital’s subsequent filings with the SEC. Please refer to the SEC’s website at www.sec.gov where you can review those documents.

Important Additional Information

SouthState filed a registration statement on Form S-4 with the SEC on September 15, 2021, to register the shares of SouthState common stock that will be issued to Atlantic Capital’s shareholders in connection with the merger. The registration statement, which became effective on October 15, 2021, includes a proxy statement/prospectus and other relevant materials in connection with the transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC on its website at http://www.sec.gov. Investors and security holders may also obtain free copies of the documents filed with the SEC by Atlantic Capital on our website at www.atlanticcapitalbank.com and by SouthState on its website at www.southstatebank.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Before making any voting or investment decision, investors and security holders of Atlantic Capital and SouthState are urged to read carefully the entire registration statement and proxy statement/prospectus, including any amendments thereto, because they contain important information about the merger. Free copies of these documents may be obtained as described above.

Participants in the Merger

Atlantic Capital and SouthState, and certain of their respective directors, executive officers and other members of management and employees, may be deemed to be participants in the solicitation of proxies from Atlantic Capital’s shareholders in respect of the merger. Information regarding such persons who may be deemed participants in the solicitation of proxies from Atlantic Capital’s shareholders is included in the proxy statement/prospectus for Atlantic Capital’s meeting of shareholders, which was filed by SouthState on Form S-4 on September 15, 2021 and declared effective on October 15, 2021. Information about Atlantic Capital’s directors and executive officers and their ownership of Atlantic Capital common stock can also be found in definitive proxy statement filed in connection with its 2021 annual meeting of shareholders on May 20, 2021, and other documents subsequently filed by Atlantic Capital with the SEC. Information about SouthState’s directors and executive officers and their ownership of SouthState common stock can also be found in SouthState’s definitive proxy statement filed in connection with its 2021 annual meeting of shareholders on April 28, 2021, and other documents subsequently filed by SouthState with the SEC. Information regarding the interests of such participants is included in the proxy statement/prospectus and other relevant documents regarding the merger filed with the SEC.

About Atlantic Capital Bancshares

Atlantic Capital Bancshares, Inc. is a $4.2 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers commercial and not-for-profit banking services, specialty corporate financial services, private banking services and commercial real estate finance solutions to privately held companies and individuals in the Atlanta area, as well as payments and other specialized financial services for select clients nationally.

Media Contact:
Ashley Carson
Email: ashley.carson@atlcapbank.com
Phone: 404-995-6050
(ACB-ER)

Financial Contact:
Patrick Oakes
Email: patrick.oakes@atlcapbank.com
Phone: 404-995-6050

                        
ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
                         
                  For the nine months ended  
 2021
 2020 September 30,  
(in thousands, except share and per share data;Third Second First Fourth Third         
taxable equivalent)Quarter Quarter Quarter Quarter Quarter 2021
 2020 
INCOME SUMMARY                        
Interest income - taxable equivalent (1)$27,040  $27,993  $25,775  $25,288  $24,578  $80,808  $74,976  
Interest expense 1,895   1,958   2,065   2,299   2,515   5,918   9,724  
Net interest income - taxable equivalent 25,145   26,035   23,710   22,989   22,063   74,890   65,252  
Provision for credit losses (2,405)  (933)  (4,519)  481   28   (7,857)  16,965  
Net interest income after provision for credit losses 27,550   26,968   28,229   22,508   22,035   82,747   48,287  
Noninterest income 4,609   3,584   3,562   3,016   2,504   11,755   7,269  
Noninterest expense 15,018   15,197   15,149   13,164   13,713   45,364   39,494  
Income before income taxes 17,141   15,355   16,642   12,360   10,826   49,138   16,062  
Income tax expense 3,837   3,539   3,280   2,410   2,208   10,656   3,471  
Net income(1)(2)$13,304  $11,816  $13,362  $9,950  $8,618  $38,482  $12,591  
                         
PER SHARE DATA                        
Diluted earnings per share$0.65  $0.58  $0.65  $0.48  $0.40  $1.88  $0.58  
Book value per share 17.92   17.38   16.72   16.60   16.05   17.92   16.05  
Tangible book value per common share (3) 16.94   16.40   15.74   15.62   15.11   16.94   15.11  
                         
PERFORMANCE MEASURES                        
Return on average equity 14.69 % 13.60 % 15.99 % 11.68 % 10.05 % 14.74 % 4.98 %
Return on average assets 1.36   1.26   1.50   1.19   1.15   1.37   0.59  
Taxable equivalent net interest margin 2.69   2.91   2.81   2.91   3.14   2.80   3.25  
Taxable equivalent net interest margin excluding PPP loans 2.54   2.70   2.70   2.81   3.18   2.65   3.31  
Efficiency ratio 51.12   51.97   56.30   51.30   56.61   53.04   55.16  
Average loans to average deposits 65.81   67.54   71.93   76.81   88.65   68.32   87.07  
CAPITAL                        
Average equity to average assets 9.23 % 9.24 % 9.39 % 10.18 % 11.45 % 9.28 % 11.78 %
Tangible common equity to tangible assets 8.21   8.86   8.63   8.86   11.03   8.21   11.03  
Leverage ratio 8.50 (3) 8.4   8.4   8.9   9.9   8.73 (3) 9.9  
Total risk based capital ratio 15.91 (3) 16.0   16.4   16.1   16.9   15.91 (3) 16.9  
                         
SHARES OUTSTANDING                        
Number of common shares outstanding - basic 20,305,109   20,319,429   20,354,077   20,394,912   21,202,783   20,305,109   21,202,783  
Number of common shares outstanding - diluted 20,590,747   20,595,812   20,617,188   20,492,542   21,298,098   20,590,747   21,298,098  
Average number of common shares - basic 20,308,761   20,332,503   20,380,066   20,711,089   21,500,735   20,340,182   21,553,953  
Average number of common shares - diluted 20,507,604   20,516,478   20,502,184   20,795,332   21,543,805   20,508,775   21,640,057  
                         
ASSET QUALITY                        
Allowance for credit losses to loans held for investment 1.16 % 1.27 % 1.31 % 1.55 % 1.59 % 1.16 % 1.59 %
Net charge-offs to average loans (4) 0.00   0.10   0.04   0.05   0.06   0.05   0.13  
Non-performing assets to total assets 0.10   0.14   0.06   0.13   0.20   0.10   0.20  
                         
AVERAGE BALANCES                        
Total loans$2,246,529  $2,233,906  $2,270,660  $2,207,956  $2,191,669  $2,250,277  $2,071,673  
Investment securities 733,452   656,507   579,547   491,134   453,382   657,066   444,766  
Total assets 3,893,049   3,771,970   3,611,417   3,328,719   2,977,444   3,759,841   2,865,884  
Deposits 3,413,882   3,307,601   3,156,906   2,874,402   2,472,218   3,293,738   2,379,235  
Shareholders' equity 359,300   348,416   338,990   338,948   341,017   348,974   337,521  
                         
AT PERIOD END                        
Loans and loans held for sale$2,285,670  $2,264,899  $2,302,661  $2,249,036  $2,188,894  $2,285,670  $2,188,894  
Investment securities 772,987   714,065   613,236   535,579   446,706   772,987   446,706  
Total assets 4,210,316   3,780,445   3,732,668   3,615,617   2,923,977   4,210,316   2,923,977  
Deposits 3,727,321   3,306,224   3,277,692   3,161,508   2,468,722   3,727,321   2,468,722  
Shareholders’ equity 363,925   353,185   340,328   338,586   340,309   363,925   340,309  
                         
(1)Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.
(2)Excludes effect of acquisition related intangibles.
(3)Amounts are estimates as of September 30, 2021.
(4)Annualized.
 


             
ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
             
     September 30,     June 30,     December 31,     September 30, 
(in thousands, except share data) 2021
 2021
 2020
 2020
ASSETS            
Cash and due from banks $25,725  $35,530  $16,865  $22,715 
Interest-bearing deposits in banks  811,168   593,195   636,537   91,243 
Other short-term investments  140,848          
Cash and cash equivalents  977,741   628,725   653,402   113,958 
Investment securities available for sale  535,158   480,518   335,423   260,884 
Investment securities held to maturity, net of allowance for credit losses of $13, $13, $14, and $15 at September 30,2021, June 30, 2021, December 31, 2020 and September 30, 2020, respectively  237,829   233,547   200,156   185,822 
Other investments  23,877   24,293   25,892   26,315 
Loans held for sale  11,814         859 
Loans held for investment  2,273,856   2,264,899   2,249,036   2,188,035 
Less: allowance for loan losses  (23,924)  (26,123)  (31,818)  (31,894)
Loans held for investment, net  2,249,932   2,238,776   2,217,218   2,156,141 
Premises and equipment, net  18,517   19,643   21,589   22,558 
Bank owned life insurance  74,000   73,610   72,856   67,489 
Goodwill  19,925   19,925   19,925   19,925 
Other intangibles, net  2,573   2,637   2,731   2,685 
Other real estate owned     16   16   563 
Other assets  58,950   58,755   66,409   66,778 
Total assets $4,210,316  $3,780,445  $3,615,617  $2,923,977 
             
LIABILITIES AND SHAREHOLDERS’ EQUITY            
Deposits:            
Noninterest-bearing demand $1,691,616  $1,374,018  $1,033,765  $843,656 
Interest-bearing checking  721,525   536,677   760,638   387,858 
Savings  800   676   625   568 
Money market  930,929   1,026,239   1,030,753   945,834 
Time  287,865   283,656   241,328   196,343 
Brokered deposits  94,586   84,958   94,399   94,463 
Total deposits  3,727,321   3,306,224   3,161,508   2,468,722 
Long-term debt  74,024   73,953   73,807   73,814 
Other liabilities  45,046   47,083   41,716   41,132 
Total liabilities  3,846,391   3,427,260   3,277,031   2,583,668 
             
SHAREHOLDERS’ EQUITY            
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020            
Common stock, no par value; 100,000,000 shares authorized; 20,305,109, 20,319,429, 20,394,912, and 21,202,783 shares issued and outstanding as of September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020, respectively  207,214   206,619   209,942   220,643 
Retained earnings  152,619   139,315   114,137   104,188 
Accumulated other comprehensive income  4,092   7,251   14,507   15,478 
Total shareholders’ equity  363,925   353,185   338,586   340,309 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $4,210,316  $3,780,445  $3,615,617  $2,923,977 
                 


                   
ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Statements of Income (unaudited)
                      
(in thousands, except share and per share data) Three months ended  Nine months ended
     September 30,     June 30,     March 31,     December 31,  September 30,     September 30,     September 30, 
  2021
 2021
 2021
 2020
 2020
 2021
 2020
INTEREST INCOME                     
Loans, including fees $22,151  $23,352  $21,769  $21,609  $21,049  $67,272  $63,971 
Investment securities  3,920   3,900   3,374   3,000   2,910   11,194   8,683 
Interest and dividends on other interest‑earning assets 593   366   267   334   274   1,226   1,399 
Total interest income  26,664   27,618   25,410   24,943   24,233   79,692   74,053 
INTEREST EXPENSE                     
Interest on deposits  789   851   971   1,188   1,151   2,611   6,632 
Interest on Federal Home Loan Bank advances              16      54 
Interest on federal funds purchased and securities sold under agreements to repurchase              3      41 
Interest on long-term debt  1,106   1,107   1,094   1,111   1,345   3,307   2,997 
Total interest expense  1,895   1,958   2,065   2,299   2,515   5,918   9,724 
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES  24,769   25,660   23,345   22,644   21,718   73,774   64,329 
Provision for credit losses  (2,405)  (933)  (4,519)  481   28   (7,857)  16,965 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  27,174   26,593   27,864   22,163   21,690   81,631   47,364 
NONINTEREST INCOME                     
Service charges  1,765   1,727   1,663   1,341   1,217   5,155   3,530 
Gains (losses) on sale of securities        2   (23)     2    
Gains (losses) on sale of other assets  38         (6)  (145)  38   (140)
Derivatives income (loss)  21   (7)  47   11   10   61   246 
Bank owned life insurance  391   388   391   368   363   1,170   1,092 
SBA lending activities  1,276   1,231   1,225   1,015   893   3,732   2,089 
Other noninterest income  1,118   245   234   310   166   1,597   452 
Total noninterest income  4,609   3,584   3,562   3,016   2,504   11,755   7,269 
NONINTEREST EXPENSE                     
Salaries and employee benefits  10,290   10,362   10,421   8,437   8,850   31,073   25,792 
Employee retention credit  (3,035)              (3,035)   
Occupancy  756   778   734   767   739   2,268   2,416 
Equipment and software  857   819   774   969   826   2,450   2,368 
Professional services  737   723   922   686   562   2,382   2,059 
Communications and data processing  889   869   792   789   757   2,550   2,324 
Marketing and business development  142   138   108   144   141   388   373 
Travel, meals and entertainment  91   47   10   14   39   148   213 
FDIC premiums  478   421   275   241   213   1,174   388 
Merger and conversion costs  2,899               2,899    
Other noninterest expense  914   1,040   1,113   1,117   1,586   3,067   3,561 
Total noninterest expense  15,018   15,197   15,149   13,164   13,713   45,364   39,494 
                      
INCOME BEFORE PROVISION FOR INCOME TAXES  16,765   14,980   16,277   12,015   10,481   48,022   15,139 
Provision for income taxes  3,461   3,164   2,915   2,065   1,863   9,540   2,548 
NET INCOME $13,304  $11,816  $13,362  $9,950  $8,618  $38,482  $12,591 
                      
Net income per common share - basic $0.66  $0.58  $0.66  $0.48  $0.40  $1.89  $0.58 
Net income per common share - diluted $0.65  $0.58  $0.65  $0.48  $0.40  $1.88  $0.58 
                      
Weighted average shares - basic  20,308,761   20,332,503   20,380,066   20,711,089   21,500,735   20,340,182   21,553,953 
Weighted average shares - diluted  20,507,604   20,516,478   20,502,184   20,795,332   21,543,805   20,508,775   21,640,057 
                      


                   
ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information                  
  Three months ended  
  September 30, 2021  June 30, 2021 
     Interest Tax     Interest Tax 
  Average Income/ Equivalent  Average Income/ Equivalent 
(dollars in thousands; taxable equivalent) Balance Expense Yield/Rate  Balance Expense Yield/Rate 
Assets                  
Interest bearing deposits in other banks $594,338 $266 0.18% $687,795 $201 0.12%
Other short-term investments  122,477  156 0.51       
Investment securities:                  
Taxable investment securities  503,420  2,411 1.90   426,634  2,382 2.24 
Non-taxable investment securities (1)  230,032  1,885 3.25   229,873  1,893 3.30 
Total investment securities  733,452  4,296 2.32   656,507  4,275 2.61 
Loans  2,246,529  22,151 3.91   2,233,906  23,352 4.19 
FHLB and FRB stock  11,931  171 5.69   11,931  165 5.55 
Total interest-earning assets  3,708,727  27,040 2.89   3,590,139  27,993 3.13 
Non-earning assets  184,322        181,831      
Total assets $3,893,049       $3,771,970      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,665,462  680 0.16   1,637,374  725 0.18 
Time deposits  285,808  50 0.07   290,331  68 0.09 
Brokered deposits  87,498  59 0.27   84,168  58 0.28 
Total interest-bearing deposits  2,038,768  789 0.15   2,011,873  851 0.17 
Total borrowings        89    
Total long-term debt  73,978  1,106 5.93   73,904  1,107 6.01 
Total interest-bearing liabilities  2,112,746  1,895 0.36   2,085,866  1,958 0.38 
Demand deposits  1,375,114        1,295,728      
Other liabilities  45,889        41,960      
Shareholders’ equity  359,300        348,416      
Total liabilities and shareholders’ equity $3,893,049       $3,771,970      
Net interest spread       2.53%       2.75%
Net interest income and net interest margin (2)    $25,145 2.69%    $26,035 2.91%
                   
Non-taxable equivalent net interest margin       2.65%       2.87%
                   
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.
(2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.
                   
ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information                  
  Three months ended  
  September 30, 2021  September 30, 2020 
     Interest Tax     Interest Tax 
  Average Income/ Equivalent  Average Income/ Equivalent 
(dollars in thousands; taxable equivalent) Balance Expense Yield/Rate  Balance Expense Yield/Rate 
Assets                  
Interest bearing deposits in other banks $594,338 $266 0.18% $136,459 $65 0.19%
Other short-term investments  122,477  156 0.51       
Investment securities:                  
Taxable investment securities  503,420  2,411 1.90   237,655  1,467 2.46 
Non-taxable investment securities (1)  230,032  1,885 3.25   215,727  1,788 3.30 
Total investment securities  733,452  4,296 2.32   453,382  3,255 2.86 
Loans  2,246,529  22,151 3.91   2,191,669  21,049 3.82 
FHLB and FRB stock  11,931  171 5.69   14,484  209 5.74 
Total interest-earning assets  3,708,727  27,040 2.89   2,795,994  24,578 3.50 
Non-earning assets  184,322        181,450      
Total assets $3,893,049       $2,977,444      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,665,462  680 0.16   1,383,382  1,006 0.29 
Time deposits  285,808  50 0.07   166,019  86 0.21 
Brokered deposits  87,498  59 0.27   68,102  59 0.34 
Total interest-bearing deposits  2,038,768  789 0.15   1,617,503  1,151 0.28 
Total borrowings        40,793  19 0.19 
Total long-term debt  73,978  1,106 5.93   82,708  1,345 6.47 
Total interest-bearing liabilities  2,112,746  1,895 0.36   1,741,004  2,515 0.57 
Demand deposits  1,375,114        854,715      
Other liabilities  45,889        40,708      
Shareholders’ equity  359,300        341,017      
Total liabilities and shareholders’ equity $3,893,049       $2,977,444      
Net interest spread       2.53%       2.92%
Net interest income and net interest margin (2)    $25,145 2.69%    $22,063 3.14%
                   
Non-taxable equivalent net interest margin       2.65%       3.09%
                   
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.
(2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.
                   


                   
ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information                  
  Nine months ended  
  September 30, 2021  September 30, 2020 
     Interest Tax     Interest Tax 
  Average Income/ Equivalent  Average Income/ Equivalent 
(dollars in thousands; taxable equivalent) Balance Expense Yield/Rate  Balance Expense Yield/Rate 
Assets                  
Interest bearing deposits in other banks $615,001 $634 0.14% $147,795 $756 0.68%
Other short-term investments  41,274  156 0.51   36    
Investment securities:                  
Taxable investment securities  429,307  6,691 2.08   246,388  4,729 2.56 
Non-taxable investment securities (1)  227,759  5,619 3.30   198,378  4,877 3.28 
Total investment securities  657,066  12,310 2.50   444,766  9,606 2.88 
Loans  2,250,277  67,272 4.00   2,071,673  63,971 4.12 
FHLB and FRB stock  12,183  436 4.78   14,667  643 5.86 
Total interest-earning assets  3,575,801  80,808 3.02   2,678,937  74,976 3.74 
Non-earning assets  184,040        186,947      
Total assets $3,759,841       $2,865,884      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,654,990  2,240 0.18   1,397,280  5,889 0.56 
Time deposits  283,296  191 0.09   106,271  196 0.25 
Brokered deposits  85,454  180 0.28   81,125  547 0.90 
Total interest-bearing deposits  2,023,740  2,611 0.17   1,584,676  6,632 0.56 
Total borrowings  30      50,055  95 0.25 
Total long-term debt  73,905  3,307 5.98   60,922  2,997 6.57 
Total interest-bearing liabilities  2,097,675  5,918 0.38   1,695,653  9,724 0.77 
Demand deposits  1,269,998        794,559      
Other liabilities  43,194        38,151      
Shareholders’ equity  348,974        337,521      
Total liabilities and shareholders’ equity $3,759,841       $2,865,884      
Net interest spread       2.64%       2.97%
Net interest income and net interest margin (2)    $74,890 2.80%    $65,252 3.25%
                   
Non-taxable equivalent net interest margin       2.76%       3.21%
                   
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.
(2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.
                   


                     
ATLANTIC CAPITAL BANCSHARES, INC.
Period End Loans
                      
                              Linked    Year Over
  September 30,     June 30,     March 31,     December 31,     September 30,  Quarter Year
(dollars in thousands) 2021
 2021
 2021
 2020
 2020
 Change Change
Loans held for sale                     
Loans held for sale $11,814  $  $1,847  $  $859  $11,814  $10,955 
Total loans held for sale $11,814  $  $1,847  $  $859  $11,814  $10,955 
                      
Loans held for investment                     
Commercial loans:                     
Commercial and industrial - other $790,437  $767,646  $735,287  $760,645  $712,567  $22,791  $77,870 
Commercial and industrial - PPP  48,304   105,684   218,766   192,160   231,834   (57,380)  (183,530)
Commercial real estate:                     
Multifamily  62,906   58,632   80,507   66,262   58,336   4,274   4,570 
Owner occupied  413,875   392,108   381,018   373,689   364,170   21,767   49,705 
Investment  483,538   506,230   480,566   469,150   458,279   (22,692)  25,259 
Construction and land:                     
1‑4 family residential construction  2,338   2,074   1,578   1,171      264   2,338 
Other construction, development, and land  202,810   178,423   141,218   144,424   139,836   24,387   62,974 
Total commercial loans  2,004,208   2,010,797   2,038,940   2,007,501   1,965,022   (6,589)  39,186 
                      
Residential:                     
Residential mortgages  47,076   45,207   31,817   33,783   29,460   1,869   17,616 
Home equity  28,943   24,972   26,293   25,443   24,528   3,971   4,415 
Total residential loans  76,019   70,179   58,110   59,226   53,988   5,840   22,031 
                      
Consumer  192,462   184,203   203,176   176,066   154,916   8,259   37,546 
Other  4,921   5,234   7,689   13,897   22,777   (313)  (17,856)
   2,277,610   2,270,413   2,307,915   2,256,690   2,196,703   7,197   80,907 
Less net deferred fees and other unearned income  (3,754)  (5,514)  (7,101)  (7,654)  (8,668)  1,760   4,914 
Total loans held for investment $2,273,856  $2,264,899  $2,300,814  $2,249,036  $2,188,035  $8,957  $85,821 
                      
Total loans $2,285,670  $2,264,899  $2,302,661  $2,249,036  $2,188,894  $20,771  $96,776 
                      
Total unfunded commitments $848,642  $804,784  $789,869  $813,757  $764,247  $43,858  $84,395 
      



 
ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Credit Losses Activity and Credit Quality
                 
  2021
 2020
  Third Second First Fourth Third
(dollars in thousands) Quarter Quarter Quarter Quarter Quarter
Allowance for loan losses                
Balance at beginning of period $26,123  $27,506  $31,818  $31,894  $31,605  
Provision for loan losses  (2,221)  (814)  (4,074)  225   636  
Loans charged-off:                
Commercial and industrial  (131)  (386)  (288)  (401)  (404) 
Commercial real estate                
Construction and land                
Residential mortgages     (223)          
Home equity                
Consumer                
Other                
Total loans charged-off  (131)  (609)  (288)  (401)  (404) 
Recoveries on loans previously charged-off:                
Commercial and industrial  151   6   50   37   56  
Commercial real estate           44     
Construction and land           18     
Residential mortgages     32           
Home equity                
Consumer  2   2      1   1  
Other                
Total recoveries  153   40   50   100   57  
Net charge-offs $22  $(569) $(238) $(301) $(347) 
Balance at period end $23,924  $26,123  $27,506  $31,818  $31,894  
                 
Allowance for unfunded commitments                
Balance at beginning of period $2,565  $2,683  $3,128  $2,871  $3,480  
Provision for unfunded commitments  (185)  (118)  (445)  257   (609) 
Balance at period end $2,380  $2,565  $2,683  $3,128  $2,871  
                 
Total allowance for credit losses - loans and unfunded commitments $26,304  $28,688  $30,189  $34,946  $34,765  
                 
Provision for credit losses under CECL                
Provision for loan losses  (2,221)  (814)  (4,074)  225   636  
Provision for securities held to maturity credit losses  1   (1)  -   (1)  1  
Provision for unfunded commitments  (185)  (118)  (445)  257   (609) 
Total provision for credit losses $(2,405) $(933) $(4,519) $481  $28  
                 
Non-performing loans $4,077  $5,194  $2,056  $4,862  $5,421  
Foreclosed properties (OREO)     16   16   16   563  
Total nonperforming assets $4,077  $5,210  $2,072  $4,878  $5,984  
                 
Allowance for loan losses to loans held for investment  1.05 % 1.15 % 1.20 % 1.41 % 1.46 %
Allowance for credit losses to loans held for investment  1.16 % 1.27 % 1.31 % 1.55 % 1.59 %
Allowance for credit losses to loans held for investment excluding PPP loans  1.18 % 1.33 % 1.45 % 1.70 %1.78 %
Net charge-offs to average loans (1)  0.00   0.10   0.04   0.05   0.06  
Non-performing loans as a percentage of total loans  0.18 % 0.23 % 0.09 % 0.22 % 0.25 %
Non-performing assets as a percentage of total assets  0.10 % 0.14 % 0.06 % 0.13 % 0.20 %
                 
(1)Annualized.
                 


 
ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits
                      
            Linked  
  September 30,  June 30,  March 31,  December 31,  September 30,  Quarter Year Over
(dollars in thousands) 2021 2021 2021 2020 2020 Change Year Change
DDA $1,691,616 $1,374,018 $1,280,524 $1,033,765 $843,656 $317,598  $847,960 
NOW  721,525  536,677  485,540  760,638  387,858  184,848   333,667 
Savings  800  676  562  625  568  124   232 
Money market  930,929  1,026,239  1,142,361  1,030,753  945,834  (95,310)  (14,905)
Time  287,865  283,656  294,129  241,328  196,343  4,209   91,522 
Brokered  94,586  84,958  74,576  94,399  94,463  9,628   123 
Total deposits $3,727,321 $3,306,224 $3,277,692 $3,161,508 $2,468,722 $421,097  $1,258,599 
                      
                      
Average Deposits                     
                      
  2021 2020 Linked  
  Third Second First Fourth Third Quarter Q3 2021 vs
(dollars in thousands) Quarter Quarter Quarter Quarter Quarter Change Q3 2020
DDA $1,375,114 $1,295,728 $1,136,531 $977,009 $854,715 $79,386  $520,399 
NOW  607,485  548,358  618,701  558,967  440,734  59,127  $166,751 
Savings  731  593  587  614  586  138  $145 
Money market  1,057,246  1,088,423  1,042,809  1,026,347  942,062  (31,177) $115,184 
Time  285,808  290,331  273,615  221,792  166,019  (4,523) $119,789 
Brokered  87,498  84,168  84,663  89,673  68,102  3,330  $19,396 
Total deposits $3,413,882 $3,307,601 $3,156,906 $2,874,402 $2,472,218 $106,281  $941,664 
                      
Noninterest bearing deposits as a percentage of average deposits  40.3% 39.2% 36.0% 34.0% 34.6%     
Cost of interest-bearing deposits  0.15% 0.17% 0.19% 0.25% 0.28%     
Cost of deposits  0.08% 0.10% 0.12% 0.16% 0.19%     
                      


 
ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
       
                 For the nine months 
  2021
 2020
 ended September 30,  
  Third Second First Fourth Third       
(in thousands, except share and per share data) Quarter Quarter Quarter Quarter Quarter 2021
 2020
 
                       
Taxable equivalent interest income reconciliation                      
Interest income - GAAP $26,664  $27,618  $25,410  $24,943  $24,233  $79,692  $74,053  
Taxable equivalent adjustment  376   375   365   345   345   1,116   923  
Interest income - taxable equivalent $27,040  $27,993  $25,775  $25,288  $24,578  $80,808  $74,976  
                       
Taxable equivalent net interest income reconciliation                      
Net interest income - GAAP $24,769  $25,660  $23,345  $22,644  $21,718  $73,774  $64,329  
Taxable equivalent adjustment  376   375   365   345   345   1,116   923  
Net interest income - taxable equivalent $25,145  $26,035  $23,710  $22,989  $22,063  $74,890  $65,252  
                       
Loan yield excluding PPP loans reconciliation                      
Loan yield - GAAP  3.91 % 4.19 % 3.89 % 3.89 % 3.82 % 4.00 % 4.12 %
Impact of PPP loans  (0.20)  (0.24)  (0.06)  (0.03)  0.13   (0.17)  0.14  
Loan yield excluding PPP loans  3.71 % 3.95 % 3.83 % 3.86 % 3.95 % 3.83 % 4.26 %
                       
Taxable equivalent net interest margin reconciliation                      
Net interest margin - GAAP  2.65 % 2.87 % 2.76 % 2.86 % 3.09 % 2.76 % 3.21 %
Impact of taxable equivalent adjustment  0.04   0.04   0.05   0.05   0.05   0.04   0.04  
Net interest margin - taxable equivalent  2.69 % 2.91 % 2.81 % 2.91 % 3.14 % 2.80 % 3.25 %
                       
Taxable equivalent net interest margin excluding PPP loans reconciliation                      
Net interest margin - taxable equivalent  2.69 % 2.91 % 2.81 % 2.91 % 3.14 % 2.80 % 3.21 %
Impact of PPP loans  (0.15)  (0.21)  (0.11)  (0.10)  0.04   (0.15)  0.10  
Net interest margin - taxable equivalent excluding PPP loans 2.54 % 2.70 % 2.70 % 2.81 % 3.18 % 2.65 % 3.31 %
                       
Taxable equivalent income before income taxes reconciliation                      
Income before income taxes - GAAP $16,765  $14,980  $16,277  $12,015  $10,481  $48,022  $15,139  
Taxable equivalent adjustment  376   375   365   345   345   1,116   923  
Income before income taxes $17,141  $15,355  $16,642  $12,360  $10,826  $49,138  $16,062  
                       
Taxable equivalent income tax expense reconciliation                      
Income tax expense - GAAP $3,461  $3,164  $2,915  $2,065  $1,863  $9,540  $2,548  
Taxable equivalent adjustment  376   375   365   345   345   1,116   923  
Income tax expense $3,837  $3,539  $3,280  $2,410  $2,208  $10,656  $3,471  
                       
Tangible book value per common share reconciliation                      
Total shareholders’ equity $363,925  $353,185  $340,328  $338,586  $340,309  $363,925  $340,309  
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925) 
Total tangible common equity $344,000  $333,260  $320,403  $318,661  $320,384  $344,000  $320,384  
Common shares outstanding  20,305,109   20,319,429   20,354,077   20,394,912   21,202,783   20,305,109   21,202,783  
Book value per common share - GAAP $17.92  $17.38  $16.72  $16.60  $16.05  $17.92  $16.05  
Tangible book value  16.94   16.40   15.74   15.62   15.11   16.94   15.11  
                       
Tangible common equity to tangible assets reconciliation                      
Total shareholders’ equity $363,925  $353,185  $340,328  $338,586  $340,309  $363,925  $340,309  
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925) 
Total tangible common equity $344,000  $333,260  $320,403  $318,661  $320,384  $344,000  $320,384