Atlantic Capital Bancshares, Inc. Reports First Quarter 2017 Results

Atlantic Capital Bancshares, Inc. ACBI announced results of the quarter ended March 31, 2017.

First Quarter Highlights

• Reported net income of $3.2 million, or $0.13 per diluted share, compared to $1.6 million, or $0.06 per diluted share, in the fourth quarter of 2016.
• Increased taxable equivalent net interest margin to 3.20% compared to 3.11% in the fourth quarter of 2016.
• Increased SBA income to $1.2 million from $600,000 in the fourth quarter of 2016.
• Reduced noninterest expense to $17.7 million from $18.8 million in the fourth quarter of 2016.
• Reported nonperforming assets to total assets of 0.21% as of March 31, 2017.
• Increased average noninterest bearing deposits $29 million, or 18.7% annualized, to $620 million. Average noninterest bearing deposits equaled 29.4% of total deposits.

"Atlantic Capital reported improved results for the first quarter of 2017, with strong growth in demand deposits and an expanded net interest margin, despite weaker than expected loan growth. We've strengthened our banking teams to provide the capacity for resumed loan growth consistent with our plan," explained Douglas Williams, Chief Executive Officer.

Results of Operations

For the first quarter of 2017, Atlantic Capital recorded net income of $3.2 million, or $0.13 per diluted share, compared to net income of $1.6 million, or $0.06 per diluted share, in the fourth quarter of 2016. Operating net income totaled $3.2 million, or $0.13 per diluted share, for the first quarter of 2017, compared to $1.7 million, or $0.07 per diluted share, in the fourth quarter of 2016. Operating net income excludes merger related expenses, divestiture expenses, and net gain on sale of branches.

Taxable equivalent net interest income was unchanged at $19.5 million in the first quarter of 2017 compared to the fourth quarter of 2016. The first quarter net interest income was impacted by two fewer days compared to the fourth quarter. Net accretion income on acquired loans totaled $702,000 and premium amortization on acquired time deposits totaled $119,000 in the first quarter of 2017 compared to $571,000 and $142,000 respectively, in the fourth quarter of 2016.

Taxable equivalent net interest margin was 3.20% in the first quarter of 2017 compared to 3.11% in the fourth quarter of 2016. The margin benefited from the increase in the Fed Funds rate in December 2016. Loan yields increased 18 basis points to 4.16%, while cost of deposits increased 2 basis points to 0.39%. This increase was offset by a change in asset mix, as mortgage warehouse loans decreased and the investment portfolio increased. The accretion of the acquired loan discount and amortization of time deposit premium contributed 13 basis points to the net interest margin in the first quarter of 2017 compared to 12 basis points in the fourth quarter of 2016.

The provision for loan losses was $600,000 in the first quarter of 2017 compared to $2.2 million in the fourth quarter of 2016.

Noninterest income totaled $3.9 million in the first quarter of 2017, a decrease of $573,000 compared to the fourth quarter of 2016. The SBA division contributed $1.2 million in income in the first quarter of 2017, an increase of $628,000 compared to $599,000 in the fourth quarter of 2016. This increase was offset by decreases in derivative income, mortgage income and the elimination of gains from the sale of TriNet loans.

Noninterest expense totaled $17.7 million in the first quarter of 2017, a decrease of $1 million compared to $18.8 million in the fourth quarter of 2016. Operating noninterest expense, which excludes merger related expenses, decreased by $827,000 to $17.7 million. Salaries and benefits decreased $204,000 due to a lower incentive accrual offset by seasonally higher payroll taxes. The fourth quarter of 2016 included an expense of $600,000 from an impairment on other real estate owned of two closed bank branches.

On December 9, 2016, Atlantic Capital announced the sale of the branch located in Cleveland, Tennessee. This transaction includes the sale of approximately $29 million in deposits, $28 million in loans and $3 million in other assets. Subject to customary closing conditions, including the receipt of all necessary regulatory approvals, the transaction is expected to close during the second quarter of 2017.

Total loans were $1.93 billion at March 31, 2017, a decrease of $86 million from December 31, 2016. Loans held for investment were $1.90 billion at March 31, 2017, a decrease of $80 million from December 31, 2016. Mortgage warehouse loans decreased $89 million in the first quarter to $58 million at March 31, 2017, primarily as a result of lower mortgage activity due to higher interest rates. Excluding the decrease in mortgage warehouse loans, loans held for investment increased $10 million in the first quarter of 2017.

Available for sale securities increased $109 million in the first quarter of 2017, as Atlantic Capital responded to the decrease in mortgage warehouse loans.

At March 31, 2017, the allowance for loan losses was $19.9 million, or 1.05% of loans held for investment, compared to $20.6 million, or 1.04% of loans held for investment as of December 31, 2016. Annualized net charge-offs to average loans in the first quarter of 2017 totaled 0.26% compared to 0.03% in the fourth quarter of 2016. Nonperforming assets totaled $5.9 million, or 0.21% of total assets, as of March 31, 2017, compared to $3.5 million, or 0.13% of total assets, as of December 31, 2016.

Total average deposits for the first quarter of 2017 were $2.11 billion, an increase of $17 million from the fourth quarter of 2016. Average noninterest bearing deposits increased $29 million to $620 million in the first quarter of 2017 and accounted for 29.4% of average total deposits. Average deposits associated with our payments business were $274 million in the first quarter of 2017, an increase of $63 million from the fourth quarter of 2016.

Earnings Conference Call

The Company will host a conference call at 10:00 a.m. ET on Friday, April 28, 2017, to discuss the financial results for the quarter ended March 31, 2017. Individuals wishing to participate in the conference call may do so by dialing 844.868.8848 from the United States and entering Conference ID 89772886. The call will also be available live via webcast on the Investor Relations page of the Company's website, www.atlanticcapitalbank.com.

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) operating net income; (ii) operating non-interest expense; (iii) operating non-interest income; (iv) taxable equivalent interest income; (v) taxable equivalent net interest margin; (vi) efficiency ratio; (vii) operating return on average assets; (viii) operating return on average equity; (ix) tangible common equity (x) deposits excluding deposits to be assumed in branch sales; and (xi) loans held for investment excluding mortgage warehouse loans, in its analysis of the Company's performance. Operating net income excludes the following from net income available to common shareholders: merger and conversion costs, net gains on branch sales, and the income tax effect of adjustments. Operating non-interest expense excludes merger and conversion costs from non-interest expense as well as costs related to the sale of branches. The efficiency ratio excludes merger and conversion costs. Tangible common equity excludes goodwill and other intangible assets 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," or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about Atlantic Capital's confidence in its strategies and its expectations about financial performance, 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 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Atlantic Capital's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Please refer to the SEC's website at www.sec.gov where you can review those documents.

About Atlantic Capital Bancshares

Atlantic Capital Bancshares, Inc. is a $2.8 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers banking, treasury management, capital markets, trust, and mortgage services to privately held companies and individuals in Atlanta, eastern Tennessee, northwest Georgia and Charlotte, North Carolina. Atlantic Capital also provides specialized financial services to select clients nationally.

ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
		2017					2016																First Quarter 2017 to 2016 Change
(in thousands, except share and per share data; taxable equivalent)		First Quarter					Fourth Quarter				Third Quarter				Second Quarter				First Quarter
INCOME SUMMARY
Interest income (1)		$	22,716				$	22,530			$	22,428			$	22,190			$	21,553			5	%
Interest expense		3,208					3,029				2,941				2,907				2,632				22
Net interest income		19,508					19,501				19,487				19,283				18,921				3
Provision for loan losses		634					2,208				463				777				368				72
Net interest income after provision for loan losses		18,874					17,293				19,024				18,506				18,553				2
Operating noninterest income		3,857					4,430				4,002				4,995				4,420				(13	)
Operating noninterest expense (2)		17,744					18,571				16,717				17,428				17,517				1
Operating income before income taxes		4,987					3,152				6,309				6,073				5,456				(9	)
Operating income tax expense		1,757					1,417				2,245				2,381				2,065				(15	)
Operating net income (2)		3,230					1,735				4,064				3,692				3,391				(5	)
Merger related expenses, net of income tax		—					126				356				743				460				(100	)
Net gain on sale of branches, net of income tax		—					—				—				2,198				—				—
Net income - GAAP		$	3,230				$	1,609			$	3,708			$	5,147			$	2,931			10	%
PER SHARE DATA
Diluted earnings per share - GAAP		$	0.13				$	0.06			$	0.15			$	0.20			$	0.12
Diluted earnings per share - operating (2)		0.13					0.07				0.16				0.15				0.14
Book value per share		12.18					12.10				12.36				12.29				11.99
Tangible book value per share (3)		11.04					10.92				11.16				11.01				10.61
PERFORMANCE MEASURES
Return on average equity - GAAP		4.19		%			2.09		%		4.84		%		6.88		%		4.02		%
Return on average equity - operating (2)		4.19					2.25				5.30				4.94				4.65
Return on average assets - GAAP		0.48					0.24				0.55				0.76				0.45
Return on average assets - operating (2)		0.48					0.25				0.60				0.54				0.52
Taxable equivalent net interest margin		3.20					3.11				3.12				3.12				3.26
Efficiency ratio		76.78					78.33				71.57				72.00				75.22
CAPITAL
Average equity to average assets		11.44		%			11.33		%		11.28		%		11.01		%		11.13		%
Tangible common equity to tangible assets		10.16					10.16				10.19				9.81				9.69
Tier 1 capital ratio		10.5		((5	))		10.3				9.7				9.9				9.5
Total risk based capital ratio		13.5		((5	))		13.3				12.5				12.8				12.4
Number of common shares outstanding - basic		25,535,013					25,093,135				24,950,099				24,750,163				24,569,823
Number of common shares outstanding - diluted		25,836,809					25,673,841				25,342,883				25,267,803				25,077,520
ASSET QUALITY
Allowance for loan losses to loans held for investment		1.05		%			1.04		%		0.92		%		0.95		%		0.93		%
Net charge-offs to average loans (4)		0.26					0.03				0.06				—				0.35
NPAs to total assets		0.21					0.13				0.09				0.07				0.08
(1)Interest income has been increased to reflect comparable interest on taxable securities. The rate used was 35%, reflecting the statutory federal income tax rate. (2)Excludes merger related expenses. (3)Excludes effect of servicing asset and acquisition related intangibles. (4)Annualized. (5)Amounts are estimates as of 3/31/17.

ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
		March 31,				December 31,				March 31,
(in thousands, except share data)		2017				2016				2016
ASSETS
Cash and due from banks		$	34,626			$	36,790			$	36,585
Interest-bearing deposits in banks		158,920				118,039				91,608
Other short-term investments		20,870				10,896				32,861
Cash and cash equivalents		214,416				165,725				161,054
Investment securities available-for-sale		456,942				347,705				366,641
Other investments		28,331				23,806				11,899
Loans held for sale		29,241				35,219				95,291
Loans held for investment		1,901,724				1,981,330				1,886,763
Less: allowance for loan losses		(19,939		)		(20,595		)		(17,608		)
Loans held for investment, net		1,881,785				1,960,735				1,869,155
Branch premises held for sale		2,897				2,995				7,200
Premises and equipment, net		12,308				11,958				22,780
Bank owned life insurance		62,516				62,160				60,981
Goodwill and intangible assets, net		29,186				29,567				33,914
Other real estate owned		1,869				1,872				1,760
Other assets		82,587				85,801				96,213
Total assets		$	2,802,078			$	2,727,543			$	2,726,888
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand		$	606,386			$	643,471			$	560,363
Interest-bearing checking		259,760				264,062				215,176
Savings		30,756				27,932				29,788
Money market		916,390				912,493				862,120
Time		150,867				157,810				187,750
Brokered deposits		209,385				200,223				229,408
Deposits to be assumed in branch sale		29,495				31,589				197,857
Total deposits		2,203,039				2,237,580				2,282,462
Federal funds purchased and securities sold under agreements to repurchase		—				—				11,824
Federal Home Loan Bank borrowings		217,000				110,000				60,000
Long-term debt		49,408				49,366				49,239
Other liabilities		21,664				26,939				27,348
Total liabilities		2,491,111				2,423,885				2,430,873
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2017, December 31, 2016, and March 31, 2016		—				—				—
Common stock, no par value; 100,000,000 shares authorized; 25,535,013, 25,093,135, and 24,569,823 shares issued and outstanding as of March 31, 2017, December 31, 2016, and March 31, 2016, respectively		296,608				292,747				288,271
Retained earnings		19,766				16,536				6,072
Accumulated other comprehensive income (loss)		(5,407		)		(5,625		)		1,672
Total shareholders' equity		310,967				303,658				296,015
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	2,802,078			$	2,727,543			$	2,726,888

ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Statements of Income (unaudited)
(in thousands, except share and per share data)		Three months ended
		March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016				March 31, 2016
INTEREST INCOME
Loans, including fees		$	19,994			$	20,363			$	20,511			$	20,282			$	19,625
Investment securities available-for-sale		2,018				1,477				1,293				1,327				1,601
Interest and dividends on other interest-earning assets		449				467				491				507				273
Total interest income		22,461				22,307				22,295				22,116				21,499
INTEREST EXPENSE
Interest on deposits		2,047				1,929				1,956				1,841				1,673
Interest on Federal Home Loan Bank advances		302				234				133				147				44
Interest on federal funds purchased and securities sold under agreements to repurchase		36				38				37				87				67
Interest on long-term debt		823				828				815				832				810
Other		—				—				—				—				38
Total interest expense		3,208				3,029				2,941				2,907				2,632
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		19,253				19,278				19,354				19,209				18,867
Provision for loan losses		634				2,208				463				777				368
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		18,619				17,070				18,891				18,432				18,499
NONINTEREST INCOME
Service charges		1,349				1,327				1,270				1,392				1,498
Gains on sale of securities available-for-sale		—				—				—				11				33
Gains on sale of other assets		78				238				71				31				48
Mortgage income		257				499				632				447				339
Trust income		407				350				361				386				314
Derivatives income		(51		)		346				69				98				65
Bank owned life insurance		378				395				424				398				393
SBA lending activities		1,227				599				959				1,204				880
TriNet lending activities		20				357				—				761				383
Gains on sale of branches		—				—				—				3,885				—
Other noninterest income		192				319				216				267				467
Total noninterest income		3,857				4,430				4,002				8,880				4,420
NONINTEREST EXPENSE
Salaries and employee benefits		11,065				11,269				10,059				10,420				10,555
Occupancy		1,230				995				1,235				1,274				1,100
Equipment and software		805				694				862				724				686
Professional services		904				968				442				760				748
Postage, printing and supplies		85				73				61				159				169
Communications and data processing		987				1,064				617				694				916
Marketing and business development		270				247				269				317				267
FDIC premiums		314				262				415				493				398
Merger and conversion costs		—				204				579				1,210				749
Amortization of intangibles		470				495				520				668				762
Foreclosed property/problem asset expense		3				666				39				55				104
Other noninterest expense		1,611				1,838				2,198				2,169				1,812
Total noninterest expense		17,744				18,775				17,296				18,943				18,266
INCOME BEFORE PROVISION FOR INCOME TAXES		4,732				2,725				5,597				8,369				4,653
Provision for income taxes		1,502				1,116				1,889				3,222				1,722
NET INCOME		$	3,230			$	1,609			$	3,708			$	5,147			$	2,931
Net income per common share - basic		$	0.13			$	0.06			$	0.15			$	0.21			$	0.12
Net income per common share - diluted		$	0.13			$	0.06			$	0.15			$	0.20			$	0.12
Weighted average shares - basic		25,320,690				25,027,304				24,891,822				24,644,755				24,485,900
Weighted average shares - diluted		25,672,286				25,407,728				25,260,280				25,158,694				24,993,597

ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
		Three months ended
		March 31, 2017													December 31, 2016
(dollars in thousands; taxable equivalent)		Average Balance				Interest Income/Expense					Tax Equivalent Yield/Rate				Average Balance					Interest Income/Expense					Tax Equivalent Yield/Rate
Assets
Interest bearing deposits in other banks		$	72,494			$	165				0.92	%			$	70,304				$	102				0.58	%
Other short-term investments		11,052				47					1.72				20,198					74					1.46
Investment securities:
Taxable investment securities		339,614				1,523					1.82				269,928					1,041					1.53
Non-taxable investment securities(1)		79,721				750					3.82				79,834					659					3.28
Total investment securities		419,335				2,273					2.20				349,762					1,700					1.93
Total loans		1,949,385				19,994					4.16				2,036,995					20,363					3.98
FHLB and FRB stock		19,608				237					4.90				20,954					291					5.52
Total interest-earning assets		2,471,874				22,716					3.73				2,498,213					22,530					3.59
Non-earning assets		222,841													224,231
Total assets		$	2,694,715												$	2,722,444
Liabilities
Interest bearing deposits:
NOW, money market, and savings		1,137,088				1,315					0.47				1,136,209					1,243					0.44
Time deposits		163,021				272					0.68				169,677					282					0.66
Brokered deposits		191,558				460					0.97				197,833					404					0.81
Total interest-bearing deposits		1,491,667				2,047					0.56				1,503,719					1,929					0.51
Total borrowings		194,478				338					0.70				235,608					272					0.46
Long-term debt		49,381				823					6.76				49,338					828					6.68
Total interest-bearing liabilities		1,735,526				3,208					0.75				1,788,665					3,029					0.67
Demand deposits		620,325													591,166
Other liabilities		30,603													34,025
Shareholders' equity		308,261													308,588
Total liabilities and shareholders' equity		$	2,694,715												$	2,722,444
Net interest spread											2.98	%													2.92	%
Net interest income and net interest margin(2)						$	19,508				3.20	%								$	19,501				3.11	%
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 35%, 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.

		Three months ended
		March 31, 2017									December 31, 2016
(dollars in thousands; taxable equivalent)		Amount					Yield				Amount					Yield
Reported interest income on loans		$	19,994				4.16	%			$	20,363				3.98	%
Less: accretion of loan acquisition discounts		(702		)							(571		)
Core interest income on loans		$	19,292				4.01	%			$	19,792				3.87	%
		Amount					Net Interest Margin				Amount					Net Interest Margin
Net interest income / net interest margin		$	19,508				3.2	%			$	19,501				3.11	%
Less:
Accretion of loan acquisition discounts		(702		)							(571		)
Accretion of time deposit premium		(119		)							(142		)
Net interest income / net interest margin excluding purchase accounting		$	18,687				3.07	%			$	18,788				2.99	%

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Loans
(dollars in thousands)			March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016				March 31, 2016				Linked Quarter Change				Year Over Year Change
Loans held for sale
Loans held for sale			$	1,297			$	4,302			$	46,600			$	29,061			$	61,003			$	(3,005	)		$	(59,706	)
Branch loans held for sale			27,944				30,917				—				—				34,288				(2,973		)		(6,344		)
Total loans held for sale			$	29,241			$	35,219			$	46,600			$	29,061			$	95,291			$	(5,978	)		$	(66,050	)
Loans held for investment
Commercial loans:
Commercial and industrial			$	544,911			$	531,061			$	533,632			$	508,516			$	499,634			$	13,850			$	45,277
Commercial real estate:
Multifamily			108,215				68,223				74,881				79,144				81,331				39,992				26,884
Owner occupied			348,888				352,523				337,277				351,419				333,172				(3,635		)		15,716
Investment			478,485				438,032				451,125				431,633				429,094				40,453				49,391
Construction and land:
1-4 family residential construction			11,799				10,335				11,273				9,611				8,540				1,464				3,259
Other construction, development, and land			123,838				209,017				202,063				199,536				174,899				(85,179		)		(51,061		)
Mortgage warehouse loans			58,357				147,519				171,251				126,108				123,875				(89,162		)		(65,518		)
Total commercial loans			1,674,493				1,756,710				1,781,502				1,705,967				1,650,545				(82,217		)		23,948
Residential:
Residential mortgages			99,665				101,921				100,046				103,313				106,433				(2,256		)		(6,768		)
Home equity			81,438				77,358				78,952				80,321				83,094				4,080				(1,656		)
Total residential loans			181,103				179,279				178,998				183,634				189,527				1,824				(8,424		)
Consumer			32,525				27,338				30,453				29,788				30,905				5,187				1,620
Other			17,611				21,565				20,736				28,168				20,925				(3,954		)		(3,314		)
			1,905,732				1,984,892				2,011,689				1,947,557				1,891,902				(79,160		)		13,830
Less net deferred fees and other unearned income			(4,008		)		(3,562		)		(3,587		)		(5,420		)		(5,139		)		(446		)		1,131
Total loans held for investment			$	1,901,724			$	1,981,330			$	2,008,102			$	1,942,137			$	1,886,763			$	(79,606	)		$	14,961
Total loans			$	1,930,965			$	2,016,549			$	2,054,702			$	1,971,198			$	1,982,054			$	(85,584	)		$	(51,089	)

ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Loan Losses Activity and Credit Quality
		2017				2016
(dollars in thousands)		First Quarter				Fourth Quarter				Third Quarter				Second Quarter				First Quarter
Balance at beginning of period		$	20,595			$	18,534			$	18,377			$	17,608			$	18,905
Provision for loan losses		565				2,134				463				777				368
Provision for PCI loan losses		69				74				—				—				—
Loans charged-off:
Commercial and industrial		(781		)		—				(61		)		(5		)		(1,465		)
Commercial real estate		(132		)		24				(226		)		—				(140		)
Residential mortgages		(46		)		—				—				(2		)		—
Home equity		—				—				(9		)		(23		)		—
Consumer		(332		)		(158		)		(60		)		(38		)		(146		)
Other		—				—				(5		)		—				—
Total loans charged-off		(1,291		)		(134		)		(361		)		(68		)		(1,751		)
Recoveries on loans previously charged-off:
Construction and land		—				—				12				—				15
Commercial and industrial		—				—				2				—				2
Commercial real estate		—				(15		)		20				—				—
Residential mortgages		—				—				5				—				—
Home equity		—				—				2				—				—
Consumer		1				2				12				60				69
Other		—				—				2				—				—
Total recoveries		1				(13		)		55				60				86
Net charge-offs		(1,290		)		(147		)		(306		)		(8		)		(1,665		)
Balance at period end		$	19,939			$	20,595			$	18,534			$	18,377			$	17,608
Loans held for investment
PCI Loans		$	11,841			$	15,253			$	17,237			$	19,733			$	22,893
Non-PCI Loans		1,889,883				1,966,077				1,990,865				1,922,404				1,863,870
		$	1,901,724			$	1,981,330			$	2,008,102			$	1,942,137			$	1,886,763
Non-performing loans - PCI		$	1,684			$	2,446			$	2,348			$	1,082			$	911
Non-performing loans - Non-PCI		$	3,983			$	1,615			$	790			$	922			$	566
Foreclosed properties (OREO)		1,869				1,872				1,727				951				1,760
Total nonperforming assets		$	5,852			$	3,487			$	2,517			$	1,873			$	2,326
Allowance for loan losses to loans held for investment		1.05		%		1.04		%		0.92		%		0.95		%		0.93		%
Net charge-offs to average loans (1)		0.26				0.03				0.06				—				0.35
Nonperforming loans as a percentage of total loans(2)		0.21				0.08				0.04				0.05				0.02
Nonperforming assets as a percentage of total assets(2)		0.21				0.13				0.09				0.07				0.08
(1)Annualized. (2)Excludes non-performing PCI loans.

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits
(dollars in thousands)		March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016				March 31, 2016				Linked Quarter Change				Year Over Year Change
DDA		$	606,386			$	643,471			$	557,783			$	592,043			$	560,363			$	(37,085	)		$	46,023
NOW		259,760				264,062				260,531				231,091				215,176				(4,302		)		44,584
Savings		30,756				27,932				29,658				30,839				29,788				2,824				968
Money Market		916,390				912,493				974,072				913,094				862,120				3,897				54,270
Time		150,867				157,810				172,348				178,615				187,750				(6,943		)		(36,883		)
Brokered		209,385				200,223				194,464				212,623				229,408				9,162				(20,023		)
Deposits to be assumed in branch sale		29,495				31,589				—				—				197,857				(2,094		)		(168,362		)
Total Deposits		$	2,203,039			$	2,237,580			$	2,188,856			$	2,158,305			$	2,282,462			$	(34,541	)		$	(79,423	)
Payments Clients		$	321,899			$	347,833			$	212,049			$	295,440			$	300,348			$	(25,934	)		$	21,551
Average Deposits(1)
		2017				2016																Linked Quarter Change				Year Over Year Change
(dollars in thousands)		First Quarter				Fourth Quarter				Third Quarter				Second Quarter				First Quarter
DDA		$	620,325			$	591,166			$	555,008			$	538,422			$	554,547			$	29,159			$	65,778
NOW		290,862				253,187				282,701				272,556				302,376				37,675				(11,514		)
Savings		30,306				29,741				30,692				35,090				45,571				565				(15,265		)
Money Market		815,920				853,281				923,435				865,447				769,369				(37,361		)		46,551
Time		163,021				169,677				175,135				203,679				267,330				(6,656		)		(104,309		)
Brokered		191,558				197,833				196,598				220,098				216,490				(6,275		)		(24,932		)
Total Deposits		$	2,111,992			$	2,094,885			$	2,163,569			$	2,135,292			$	2,155,683			$	17,107			$	(43,691	)
Payments Clients		$	273,630			$	211,000			$	184,895			$	176,474			$	155,860			$	62,630			$	117,770
Noninterest bearing deposits as a percentage of average deposits		29.4		%		28.2		%		25.7		%		25.2		%		25.7		%
Cost of deposits		0.39		%		0.37		%		0.36		%		0.35		%		0.31		%
(1) Includes average balances of deposits to be assumed in branch sale.

ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance Measures Reconciliation
(in thousands, except share and per share data)		2017				2016
		First Quarter				Fourth Quarter				Third Quarter				Second Quarter				First Quarter
Interest income reconciliation
Interest income - GAAP		$	22,461			$	22,307			$	22,295			$	22,116			$	21,499
Taxable equivalent adjustment		255				223				133				74				54
Interest income - taxable equivalent		$	22,716			$	22,530			$	22,428			$	22,190			$	21,553
Net interest income reconciliation
Net interest income - GAAP		$	19,253			$	19,278			$	19,354			$	19,209			$	18,867
Taxable equivalent adjustment		255				223				133				74				54
Net interest income - taxable equivalent		$	19,508			$	19,501			$	19,487			$	19,283			$	18,921
Operating noninterest income reconciliation
Noninterest income - GAAP		$	3,857			$	4,430			$	4,002			$	8,880			$	4,420
Gain on sale of branches		—				—				—				(3,885		)		—
Operating noninterest income		$	3,857			$	4,430			$	4,002			$	4,995			$	4,420
Operating noninterest expense reconciliation
Noninterest expense - GAAP		$	17,744			$	18,775			$	17,296			$	18,943			$	18,266
Merger-related expenses		—				(204		)		(579		)		(1,210		)		(749		)
Divestiture expenses		—				—				—				(305		)		—
Operating noninterest expense		$	17,744			$	18,571			$	16,717			$	17,428			$	17,517
Operating income before income taxes reconciliation
Income (loss) before income taxes - GAAP		$	4,732			$	2,725			$	5,597			$	8,369			$	4,653
Taxable equivalent adjustment		255				223				133				74				54
Merger-related expenses		—				204				579				1,210				749
Divestiture expenses		—				—				—				305				—
Gain on sale of branches		—				—				—				(3,885		)		—
Operating income before income taxes		$	4,987			$	3,152			$	6,309			$	6,073			$	5,456
Income tax reconciliation
Income tax expense - GAAP		$	1,502			$	1,116			$	1,889			$	3,222			$	1,722
Taxable equivalent adjustment		255				223				133				74				54
Merger related expenses, tax benefit		—				78				223				467				289
Divestiture expenses, tax benefit		—				—				—				118				—
Gain on sale of branches, tax expense		—				—				—				(1,500		)		—
Operating income tax expense		$	1,757			$	1,417			$	2,245			$	2,381			$	2,065
Net income reconciliation
Net income - GAAP		$	3,230			$	1,609			$	3,708			$	5,147			$	2,931
Merger related expenses, net of income tax		—				126				356				743				460
Divestiture expenses, net of income tax		—				—				—				187				—
Gain on sale of branches, net of income tax		—				—				—				(2,385		)		—
Operating net income		$	3,230			$	1,735			$	4,064			$	3,692			$	3,391
Diluted earnings per share reconciliation
Diluted earnings per share - GAAP		$	0.13			$	0.06			$	0.15			$	0.20			$	0.12
Merger related expenses		—				0.01				0.01				0.03				0.02
Net gain on sale of branches		—				—				—				(0.08		)		—
Diluted earnings per share - operating		$	0.13			$	0.07			$	0.16			$	0.15			$	0.14

ATLANTIC CAPITAL BANCSHARES, INC. Non-GAAP Performance Measures Reconciliation
(in thousands, except share and per share data)			2017				2016
			First Quarter				Fourth Quarter				Third Quarter				Second Quarter				First Quarter
Book value per common share reconciliation
Total shareholders' equity			$	310,967			$	303,658			$	308,463			$	304,066			$	294,652
Intangible assets			(29,186		)		(29,567		)		(30,071		)		(31,674		)		(33,914		)
Total tangible common equity			$	281,781			$	274,091			$	278,392			$	272,392			$	260,738
Common shares outstanding			25,535,013				25,093,135				24,950,099				24,750,163				24,569,823
Book value per common share - GAAP			$	12.18			$	12.10			$	12.36			$	12.29			$	11.99
Tangible book value			11.04				10.92				11.16				11.01				10.61
Return on average equity reconciliation
Net income - GAAP			$	3,230			$	1,609			$	3,708			$	5,147			$	2,931
Merger related expenses, net of income tax			—				126				356				743				460
Divestiture expenses, net of income tax			—				—				—				187				—
Gain on sale of branches, net of income tax			—				—				—				(2,385		)		—
Operating net income			$	3,230			$	1,735			$	4,064			$	3,692			$	3,391
Average shareholders' equity			308,261				308,588				306,642				299,170				291,806
Return on average equity - GAAP			4.19		%		2.09		%		4.84		%		6.88		%		4.02		%
Return on average equity - operating			4.19				2.25				5.30				4.94				4.65
Return on average assets reconciliation
Net income - GAAP			$	3,230			$	1,609			$	3,708			$	5,147			$	2,931
Merger related expenses, net of income tax			—				126				356				743				460
Divestiture expenses, net of income tax			—				—				—				187				—
Gain on sale of branches, net of income tax			—				—				—				(2,385		)		—
Operating net income			$	3,230			$	1,735			$	4,064			$	3,692			$	3,391
Average assets			2,694,715				2,722,444				2,717,996				2,718,110				2,620,750
Return on average assets - GAAP			0.48		%		0.24		%		0.55		%		0.76		%		0.45		%
Return on average assets - operating			0.48				0.25				0.60				0.54				0.52
Efficiency ratio reconciliation
Noninterest income - GAAP			$	3,857			$	4,430			$	4,002			$	8,880			$	4,420
Gain on sale of branches			—				—				—				(3,885		)		—
Operating noninterest income			$	3,857			$	4,430			$	4,002			$	4,995			$	4,420
Noninterest expense - GAAP			$	17,744			$	18,775			$	17,296			$	18,943			$	18,266
Merger-related expenses			—				(204		)		(579		)		(1,210		)		(749		)
Divestiture expenses			—				—				—				(305		)		—
Operating noninterest expense			$	17,744			$	18,571			$	16,717			$	17,428			$	17,517
Net interest income			19,253				19,278				19,354				19,209				18,867
Efficiency ratio			76.78		%		78.33		%		71.57		%		72.00		%		75.22		%
Tangible equity to tangible assets reconciliation
Total shareholders' equity			$	310,967			$	303,658			$	308,463			$	304,066			$	294,652
Intangible assets			(29,186		)		(29,567		)		(30,071		)		(31,674		)		(33,914		)
Total tangible common equity			$	281,781			$	274,091			$	278,392			$	272,392			$	260,738
Total assets			$	2,802,078			$	2,727,543			$	2,761,244			$	2,807,822			$	2,724,669
Intangible assets			(29,186		)		(29,567		)		(30,071		)		(31,674		)		(33,914		)
Total tangible assets			$	2,772,892			$	2,697,976			$	2,731,173			$	2,776,148			$	2,690,755
Tangible common equity to tangible assets			10.16		%		10.16		%		10.19		%		9.81		%		9.69		%

ATLANTIC CAPITAL BANCSHARES, INC. Non-GAAP Performance Measures Reconciliation
(in thousands, except share and per share data)		2017				2016
		First Quarter				Fourth Quarter				Third Quarter				Second Quarter				First Quarter
Deposits excluding deposits to be assumed in branch sales
Total deposits		$	2,203,039			$	2,237,580			$	2,188,856			$	2,158,305			$	2,282,462
Deposits to be assumed in branch sales		(29,495		)		(31,589		)		—				—				(197,857		)
Deposits excluding deposits to be assumed in branch sales		$	2,173,544			$	2,205,991			$	2,188,856			$	2,158,305			$	2,084,605
Loans held for investment excluding mortgage warehouse loans
Total loans held for investment		$	1,901,724			$	1,981,330			$	2,008,102			$	1,942,137			$	1,886,763
Mortgage warehouse loans		(58,357		)		(147,519		)		(171,251		)		(126,108		)		(123,875		)
Loans held for investment excluding mortgage warehouse loans		$	1,843,367			$	1,833,811			$	1,836,851			$	1,816,029			$	1,762,888

View source version on businesswire.com: http://www.businesswire.com/news/home/20170428005125/en/