KBW Analysts Like Atlantic Capital Bancshares' Value

Keefe, Bruette & Woods said Atlantic Capital Bancshares Inc ACBI has several positive catalysts including increasing organic growth with new commercial banking hires, higher profitability from revenue growth (both spread and fees) and strong cost controls.

"ACBI's profitability will improve dramatically over the next 2 yrs, in our opinion, as the last of FSGI cost saves are harvested, legacy cost cuts continue and ACBI focuses on organic growth," analyst Brady Gailey wrote in a note.

"A 1% ROAA in two years equates $1.20 in EPS, and putting a 14.5x earnings multiple on that is a mid-$17s stock price, soup side clearly is present here, in our opinion," Gailey noted.

Gailey, who maintained an Outperform rating on the stock, also highlighted the company's "unexpected opportunities" in its home market of Atlanta.

"We believe we'll hear something soon from ACBI about possibly a new team of Atlanta bankers. And beyond that, we believe the hiring of talented Atlanta commercial bankers will continue in 2H16 and into 2017," Gailey continued.

Further, the analyst said Atlantic Capital believes it can sustain the low-double digit loan growth through the rest of 2016, which is a little better than KBW's 10 percent forecast for the rest of the year.

Meanwhile, Gailey noted that M&A is not likely near-term due to its weak currency at around 1.35x TBV.

Gailey has a price target of $16 on the stock.