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Atlantic Capital Bancshares, Inc. Reports First Quarter 2021 Results

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ATLANTA, April 22, 2021 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) announced net income for the quarter ended March 31, 2021 of $13.4 million, or $0.65 per diluted share, compared to $2.2 million, or $0.10 per diluted share, for the first quarter of 2020 and $10.0 million, or $0.48 per diluted share, for the fourth quarter of 2020.

"Atlantic Capital reported another quarter of strong revenue growth despite lower interest rates and soft loan demand. As the economic recovery has gained strength, our borrowers' performance has improved which has resulted in a reduction in the allowance for credit losses. We anticipate these trends in revenue growth and credit quality improvement to continue over the balance of the year," remarked Douglas Williams, President and Chief Executive Officer.

First Quarter Highlights(1)

  • Total assets of $3.7 billion, compared to $3.6 billion at December 31, 2020 and $2.7 billion at March 31, 2020.
  • Loans held for investment increased $51.2 million, or 9% annualized, from December 31, 2020 and increased $367.9 million, or 19%, from March 31, 2020.
  • Quarterly average deposits increased $282.5 million, or 39% annualized, compared to the fourth quarter of 2020 and increased $902.4 million, or 40%, compared to the first quarter of 2020.
  • Cost of deposits decreased to 0.12% from 0.16% in the fourth quarter of 2020 and from 0.75% in the first quarter of 2020.
  • Tangible book value per share increased to $15.74 from $15.62 at December 31, 2020 and from $14.54 at March 31, 2020.
  • Annualized net charge-offs to average loans totaled 0.04% for the first quarter of 2021 and non-performing assets to total assets were 0.06% at March 31, 2021.
  • The allowance for credit losses was 1.31% of total loans held for investment at March 31, 2021, compared to 1.55% at December 31, 2020.
  • Repurchased 222,000 shares in the first quarter of 2021 totaling $4.2 million at an average price of $18.87. As of March 31, 2021, approximately $3.1 million remained from our $25 million share repurchase program.

Income Statement

Taxable equivalent net interest income totaled $23.7 million for the first quarter of 2021, an increase of $2.5 million, or 12%, from the first quarter of 2020, and an increase of $721,000, or 13% annualized, from the fourth quarter of 2020. The first quarter of 2021 included $2.2 million in Paycheck Protection Program ("PPP") loan income compared to $2.3 million in the fourth quarter of 2020.

Taxable equivalent net interest margin was 2.81% in the first quarter of 2021, compared to 3.41% in the first quarter of 2020 and 2.91% in the fourth quarter of 2020. The linked quarter decrease in net interest margin was primarily due to the impact of the increase in deposits and corresponding increase in cash balances.

The yield on loans in the first quarter of 2021 was 3.89%, a decrease of 88 basis points from the first quarter of 2020 and unchanged from the fourth quarter of 2020. Excluding the PPP loans, the first quarter of 2021 loan yield was 3.83%, a decrease of 3 basis points compared to the fourth quarter of 2020.

The cost of deposits in the first quarter of 2021 was 0.12%, a decrease of 63 basis points from the first quarter of 2020 and a decrease of 4 basis points from the fourth quarter of 2020. The cost of interest bearing deposits decreased 90 basis points to 0.19% from the first quarter of 2020, and decreased 6 basis points from the fourth quarter of 2020.

In the first quarter of 2021, we recorded a negative provision for credit losses of $4.5 million compared to a provision for credit losses of $8.1 million in the first quarter of 2020 and $481,000 in the fourth quarter of 2020. The first quarter of 2021 provision for credit losses included a negative provision for loan losses of $4.1 million and a negative provision for unfunded commitments of $445,000.

Noninterest income totaled $3.6 million in the first quarter of 2021 compared to $2.4 million in the first quarter of 2020 and $3.0 million in the fourth quarter of 2020. Service charge income in the first quarter of 2021 totaled $1.7 million, an increase of $431,000 compared to the first quarter of 2020, and an increase of $322,000 from the fourth quarter of 2020. The increase in service charge income was primarily due to growth in our payments, fintech and private capital solution businesses. SBA income in the first quarter of 2021 totaled $1.2 million, compared to $414,000 in the first quarter of 2020 and $1.0 million in the fourth quarter of 2020. The increase was primarily from higher SBA origination volume and higher SBA premiums in the secondary market.

Noninterest expense totaled $15.1 million in the first quarter of 2021, compared to $12.9 million in the first quarter of 2020 and $13.2 million in the fourth quarter of 2020. Salaries and employee benefits expense totaled $10.4 million in the first quarter of 2021, an increase of $2.0 million compared to the fourth quarter of 2020. Salaries and employee benefits expense in the first quarter of 2021 included approximately a $700,000 seasonal increase in benefit costs and $255,000 in contract labor expense for PPP round two loan processing. In addition, the first quarter of 2021 included an increase in short-term and long-term incentive costs, along with the partial impact of eight net new hires and merit increases during the quarter. Professional services expense in the first quarter totaled $922,000 and included approximately $200,000 in consulting expense for PPP round two loan processing and PPP round one loan forgiveness.

(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 12.

Balance Sheet

Total loans held for investment were $2.3 billion at March 31, 2021, an increase of $367.9 million, or 19%, from March 31, 2020 and an increase of $51.8 million, or 9% annualized, from December 31, 2020. PPP loans totaled $218.8 million at March 31, 2021, an increase of $26.6 million compared to December 31, 2020, and included $72.8 million in new round two PPP loans offset by $46.2 million in forgiven round one PPP loans.

The allowance for credit losses was 1.31% of total loans held for investment at March 31, 2021, compared to 1.55% at December 31, 2020. The decrease in the allowance was a result of an improvement in the new Current Expected Credit Losses, or CECL economic forecast along with credit rating upgrades for criticized and classified loans. Excluding the impact of PPP loans, the allowance for credit losses at March 31, 2021 was 1.45%, compared to 1.70% at December 31, 2020.

Total average deposits were $3.2 billion for the first quarter of 2021, an increase of $902.4 million, or 40%, from the first quarter of 2020 and an increase of $282.5 million, or 39% annualized, from the fourth quarter of 2020. Average noninterest bearing deposits were $1.1 billion for the first quarter of 2021, an increase of $423.5 million, or 59%, from the first quarter of 2020 and an increase of $159.5 million, or 66% annualized, from the fourth quarter of 2020. Noninterest bearing deposits were 36.0% of total average deposits in the first quarter of 2021, compared to 31.6% in the first quarter of 2020 and 34.0% in the fourth quarter of 2020.

Tangible common equity to tangible assets decreased to 8.6% at March 31, 2021 compared to 8.9% at December 31, 2020, due to the impact from the first quarter growth in deposits and its corresponding increase on the level of total tangible assets. Cash and cash equivalents were $645.8 million and total assets were $3.7 billion at March 31, 2021 compared to cash and cash equivalents of $142.4 million and total assets of $2.7 billion at March 31, 2020.

Earnings Conference Call

Atlantic Capital will host a conference call at 1:00 p.m. ET on Friday, April 23, 2021, to discuss the financial results for the quarter ended March 31, 2021. Individuals wishing to participate in the conference call may do so by dialing 833-685-0902 from the United States. The call will also be available live via webcast on the Investor Relations page of our website, www.atlanticcapitalbank.com. A presentation will be used during the earnings conference call and is available at https://atlanticcapitalbank.q4ir.com/news-market-data/presentations/default.aspx.

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) loan yield excluding PPP loans; (iv) taxable equivalent net interest margin; (v) taxable equivalent net interest margin excluding PPP loans; (vi) taxable equivalent income before income taxes; (vii) taxable equivalent income tax expense; (viii) tangible common equity to tangible assets; (ix) tangible book value per common share, and (x) 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 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. 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 $3.7 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                                    
                                     
                                     
  2021   2020   First Quarter
2021
 
(in thousands, except share and per share data; First      Fourth      Third      Second      First       
taxable equivalent) Quarter   Quarter   Quarter   Quarter   Quarter   to 2020  
INCOME SUMMARY                                          
Interest income - taxable equivalent (1) $ 25,775     $ 25,288   $ 24,578   $ 24,151   $ 26,246     (2 ) %  
Interest expense   2,065       2,299     2,515     2,166     5,043     (59 )  
Net interest income - taxable equivalent   23,710       22,989     22,063     21,985     21,203     12    
Provision for credit losses   (4,519 )     481     28     8,863     8,074     (156 )  
Net interest income after provision for credit losses   28,229       22,508     22,035     13,122     13,129     115    
Noninterest income   3,562       3,016     2,504     2,343     2,422     47    
Noninterest expense   15,149       13,164     13,713     12,904     12,877     18    
Income before income taxes   16,642       12,360     10,826     2,561     2,674     522    
Income tax expense   3,280       2,410     2,208     712     550     496    
Net income(1)(2) $ 13,362     $ 9,950   $ 8,618   $ 1,849   $ 2,124     529   %  
                                     
PER SHARE DATA                                          
Diluted earnings per share $ 0.65     $ 0.48   $ 0.40   $ 0.09   $ 0.10        
Book value per share   16.72       16.60     16.05     15.64     15.47        
Tangible book value per common share (2)   15.74       15.62     15.11     14.72     14.54        
                                     
PERFORMANCE MEASURES                                         
Return on average equity   15.99   %     11.68 %     10.05 %     2.20 %     2.56 %    
Return on average assets   1.50       1.19     1.15     0.25     0.32        
Taxable equivalent net interest margin   2.81       2.91     3.14     3.23     3.41        
Taxable equivalent net interest margin excluding PPP loans   2.70       2.81     3.18     3.35     3.41        
Efficiency ratio   56.30       51.30     56.61     53.82     55.03        
Average loans to average deposits   71.93       76.81     88.65     88.46     83.84        
CAPITAL                                         
Average equity to average assets   9.39   %     10.18 %     11.45 %     11.53 %     12.41 %    
Tangible common equity to tangible assets   8.63       8.86     11.03     11.01     11.57        
Leverage ratio   8.4   (3)   8.9     9.9     9.9     10.7        
Total risk based capital ratio   16.4   (3)   16.1     16.9     14.8     14.9        
                                     
SHARES OUTSTANDING                                    
Number of common shares outstanding - basic   20,354,077       20,394,912     21,202,783     21,477,631     21,479,986        
Number of common shares outstanding - diluted   20,617,188       20,492,542     21,298,098     21,569,050     21,675,934        
Average number of common shares - basic   20,380,066       20,711,089     21,500,735     21,472,462     21,689,038        
Average number of common shares - diluted   20,502,184       20,795,332     21,543,805     21,535,040     21,842,175        
                                     
ASSET QUALITY                                         
Allowance for credit losses to loans held for investment   1.31   %     1.55 %     1.59 %     1.61 %     1.43 %    
Net charge-offs to average loans (4)   0.04       0.05     0.06     0.29     0.04        
Non-performing assets to total assets   0.06       0.13     0.20     0.24     0.27        
                                     
AVERAGE BALANCES                                    
Total loans $ 2,270,660     $ 2,207,956   $ 2,191,669   $ 2,131,847   $ 1,890,184        
Investment securities   579,547       491,134     453,382     462,850     417,971        
Total assets   3,611,417       3,328,719     2,977,444     2,932,716     2,686,266        
Deposits   3,156,906       2,874,402     2,472,218     2,409,958     2,254,505        
Shareholders' equity   338,990       338,948     341,017     338,027     333,480        
                                     
AT PERIOD END                                    
  Loans and loans held for sale $ 2,302,661     $ 2,249,036   $ 2,188,894   $ 2,185,847   $ 1,932,909        
  Investment securities   613,236       535,579     446,706     457,749     466,405        
  Total assets   3,732,668       3,615,617     2,923,977     2,890,622     2,719,658        
  Deposits   3,277,692       3,161,508     2,468,722     2,407,631     2,225,119        
  Shareholders' equity   340,328       338,586     340,309     335,980     332,300        
                                     
(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 March 31, 2021.                                    
(4)Annualized.                                    



ATLANTIC CAPITAL BANCSHARES, INC.                  
Consolidated Balance Sheets (unaudited)                  
                   
       March 31,       December 31,       March 31, 
(in thousands, except share data)   2021   2020   2020
ASSETS                     
Cash and due from banks   $ 32,850     $ 16,865     $ 27,536  
Interest-bearing deposits in banks     612,966       636,537       114,829  
Cash and cash equivalents     645,816       653,402       142,365  
Investment securities available for sale     390,701       335,423       280,390  
Investment securities held to maturity, net of allowance for credit losses of
$14 at March 31, 2021, December 31, 2020 and March 31, 2020,
respectively
    222,535       200,156       186,015  
Other investments     24,709       25,892       27,140  
Loans held for sale     1,847              
Loans held for investment     2,300,814       2,249,036       1,932,909  
Less: allowance for loan losses     (27,506 )     (31,818 )     (24,896 )
Loans held for investment, net     2,273,308       2,217,218       1,908,013  
Premises and equipment, net     20,633       21,589       22,533  
Bank owned life insurance     73,223       72,856       66,761  
Goodwill     19,925       19,925       19,925  
Other intangibles, net     2,688       2,731       2,785  
Other real estate owned     16       16       779  
Other assets     57,267       66,409       62,952  
Total assets   $ 3,732,668     $ 3,615,617     $ 2,719,658  
                   
LIABILITIES AND SHAREHOLDERS' EQUITY                     
Deposits:                     
Noninterest-bearing demand   $ 1,280,524     $ 1,033,765     $ 712,919  
Interest-bearing checking     485,540       760,638       368,463  
Savings     562       625       567  
Money market     1,142,361       1,030,753       982,109  
Time     294,129       241,328       66,793  
Brokered deposits     74,576       94,399       94,268  
Total deposits     3,277,692       3,161,508       2,225,119  
Federal funds purchased                 75,000  
Long-term debt     73,878       73,807       49,916  
Other liabilities     40,770       41,716       37,323  
Total liabilities     3,392,340       3,277,031       2,387,358  
                   
SHAREHOLDERS' EQUITY                     
Preferred stock, no par value; 10,000,000 shares authorized; no shares
issued and outstanding as of March 31, 2021, December 31, 2020 and March 31, 2020
                 
Common stock, no par value; 100,000,000 shares authorized; 20,354,077,
20,394,912, and 21,479,986 shares issued and outstanding as of
March 31, 2021, December 31, 2020 and March 31, 2020, respectively
    207,047       209,942       224,233  
Retained earnings     127,499       114,137       93,721  
Accumulated other comprehensive income     5,782       14,507       14,346  
Total shareholders' equity     340,328       338,586       332,300  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 3,732,668     $ 3,615,617     $ 2,719,658  
 



ATLANTIC CAPITAL BANCSHARES, INC.                        
Consolidated Statements of Income (unaudited)                        
                               
(in thousands, except share and per share data)   Three months ended
       March 31,       December 31,       September 30,       June 30,    March 31, 
    2021   2020   2020   2020   2020
INTEREST INCOME                                   
Loans, including fees   $ 21,769     $ 21,609     $ 21,049     $ 20,496     $ 22,426
Investment securities     3,374       3,000       2,910       3,041       2,732
Interest and dividends on other interest‑earning assets   267       334       274       260       865
Total interest income     25,410       24,943       24,233       23,797       26,023
INTEREST EXPENSE                                   
Interest on deposits     971       1,188       1,151       1,299       4,182
Interest on Federal Home Loan Bank advances                 16       38      
Interest on federal funds purchased and securities sold
under agreements to repurchase
                3       6       32
Interest on long-term debt     1,094       1,111       1,345       823       829
Total interest expense     2,065       2,299       2,515       2,166       5,043
NET INTEREST INCOME BEFORE PROVISION
FOR CREDIT LOSSES
    23,345       22,644       21,718       21,631       20,980
Provision for credit losses     (4,519 )     481       28       8,863       8,074
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES
    27,864       22,163       21,690       12,768       12,906
NONINTEREST INCOME                              
Service charges     1,663       1,341       1,217       1,081       1,232
Gains (losses) on sale of securities     2       (23 )                
(Losses) gains on sale of other assets           (6 )     (145 )           5
Derivatives income (loss)     47       11       10       (10 )     246
Bank owned life insurance     391       368       363       367       362
SBA lending activities     1,225       1,015       893       782       414
Other noninterest income     234       310       166       123       163
Total noninterest income     3,562       3,016       2,504       2,343       2,422
NONINTEREST EXPENSE                                   
Salaries and employee benefits     10,421       8,437       8,850       8,466       8,476
Occupancy     734       767       739       883       794
Equipment and software     774       969       826       763       779
Professional services     922       686       562       792       705
Communications and data processing     792       789       757       670       897
Marketing and business development     108       144       141       79       153
Travel, meals and entertainment     10       14       39       34       140
FDIC premiums     275       241       213       175      
Other noninterest expense     1,113       1,117       1,586       1,042       933
Total noninterest expense     15,149       13,164       13,713       12,904       12,877
                               
INCOME BEFORE PROVISION FOR INCOME
TAXES
    16,277       12,015       10,481       2,207       2,451
Provision for income taxes     2,915       2,065       1,863       358       327
NET INCOME   $ 13,362     $ 9,950     $ 8,618     $ 1,849     $ 2,124
                               
Net income per common share - basic   $ 0.66     $ 0.48     $ 0.40     $ 0.09     $ 0.10
Net income per common share - diluted   $ 0.65     $ 0.48     $ 0.40     $ 0.09     $ 0.10
                               
Weighted average shares - basic     20,380,066       20,711,089       21,500,735       21,472,462       21,689,038
Weighted average shares - diluted     20,502,184       20,795,332       21,543,805       21,535,040       21,842,175
                               



ATLANTIC CAPITAL BANCSHARES, INC.                                      
Average Balance Sheets and Net Interest Margin Analysis                                    
Selected Financial Information                                      
    Three months ended    
    March 31, 2021     December 31, 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   $ 561,809   $ 168   0.12 % $ 435,939   $ 141   0.13 %
Investment securities:                                      
Taxable investment securities     356,250     1,898   2.16       275,872     1,587   2.29    
Non-taxable investment securities (1)     223,297     1,841   3.34       215,262     1,758   3.25    
Total investment securities     579,547     3,739   2.62       491,134     3,345   2.71    
Loans     2,270,660     21,769   3.89       2,207,956     21,609   3.89    
FHLB and FRB stock     12,701     99   3.17       12,699     193   6.05    
Total interest-earning assets     3,424,717     25,775   3.05       3,147,728     25,288   3.20    
Non-earning assets     186,700                 180,991              
Total assets   $ 3,611,417               $ 3,328,719              
Liabilities                                      
Interest bearing deposits:                                      
NOW, money market, and savings     1,662,097     834   0.20       1,585,928     1,043   0.26    
Time deposits     273,615     74   0.11       221,792     72   0.13    
Brokered deposits     84,663     63   0.30       89,673     73   0.32    
Total interest-bearing deposits     2,020,375     971   0.19       1,897,393     1,188   0.25    
Total long-term debt     73,830     1,094   6.01       73,811     1,111   5.99    
Total interest-bearing liabilities     2,094,205     2,065   0.40       1,971,204     2,299   0.46    
Demand deposits     1,136,531                 977,009              
Other liabilities     41,691                 41,558              
Shareholders' equity     338,990                 338,948              
Total liabilities and shareholders' equity   $ 3,611,417               $ 3,328,719              
Net interest spread                2.65 %              2.73 %
Net interest income and net interest margin (2)          $ 23,710   2.81 %        $ 22,989   2.91 %
                                       
Non-taxable equivalent net interest margin                 2.76 %               2.86 %
                                       
(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.  
                                       
                                       
    Three months ended    
    March 31, 2021     March 31, 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   $ 561,809   $ 168   0.12 %   $ 177,063   $ 668   1.52 %
Other short-term investments                 110          
Investment securities:                                        
Taxable investment securities     356,250     1,898   2.16       253,937     1,680   2.66    
Non-taxable investment securities (1)     223,297     1,841   3.34       164,034     1,275   3.13    
Total investment securities     579,547     3,739   2.62       417,971     2,955   2.84    
Loans     2,270,660     21,769   3.89       1,890,184     22,426   4.77    
FHLB and FRB stock     12,701     99   3.17       12,678     197   6.25    
Total interest-earning assets     3,424,717     25,775   3.05       2,498,006     26,246   4.23    
Non-earning assets     186,700                   188,260                
Total assets   $ 3,611,417                 $ 2,686,266                
Liabilities                                            
Interest bearing deposits:                                            
NOW, money market, and savings     1,662,097     834   0.20       1,393,541     3,767   1.09    
Time deposits     273,615     74   0.11       55,775     52   0.37    
Brokered deposits     84,663     63   0.30       92,188     363   1.58    
Total interest-bearing deposits     2,020,375     971   0.19       1,541,504     4,182   1.09    
Total borrowings                 11,703     32   1.10    
Total long-term debt     73,830     1,094   6.01       49,888     829   6.68    
Total interest-bearing liabilities     2,094,205     2,065   0.40       1,603,095     5,043   1.27    
Demand deposits     1,136,531                   713,001                
Other liabilities     41,691                   36,690                
Shareholders' equity     338,990                   333,480                
Total liabilities and shareholders' equity   $ 3,611,417                 $ 2,686,266                
Net interest spread                 2.65 %                 2.96 %
Net interest income and net interest margin (2)          $ 23,710   2.81 %          $ 21,203   3.41 %
                                       
Non-taxable equivalent net interest margin                 2.76 %                 3.38 %
                                       
(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
    March 31,       December 31,       September 30,       June 30,       March 31,    Quarter   Year
(dollars in thousands)   2021   2020   2020   2020   2020   Change   Change
Loans held for sale                                                 
Loans held for sale   $ 1,847     $     $ 859     $ 1,153     $     $ 1,847     $ 1,847  
Total loans held for sale   $ 1,847     $     $ 859     $ 1,153     $     $ 1,847     $ 1,847  
                                           
Loans held for investment                                                 
Commercial loans:                                                 
Commercial and industrial - other   $ 735,287     $ 760,645     $ 712,567     $ 739,769     $ 760,062     $ (25,358 )   $ (24,775 )
Commercial and industrial - PPP     218,766       192,160       231,834       234,049             26,606       218,766  
Commercial real estate:                                            
Multifamily     80,507       66,262       58,336       58,909       73,654       14,245       6,853  
Owner occupied     381,018       373,689       364,170       366,847       359,026       7,329       21,992  
Investment     480,566       469,150       458,279       474,565       477,451       11,416       3,115  
Construction and land:                                            
1‑4 family residential construction     1,578       1,171             11       2,706       407       (1,128 )
Other construction, development, and land     141,218       144,424       139,836       128,980       124,116       (3,206 )     17,102  
Total commercial loans     2,038,940       2,007,501       1,965,022       2,003,130       1,797,015       31,439       241,925  
                                           
Residential:                                                 
Residential mortgages     31,817       33,783       29,460       32,327       31,761       (1,966 )     56  
Home equity     26,293       25,443       24,528       23,689       23,479       850       2,814  
Total residential loans     58,110       59,226       53,988       56,016       55,240       (1,116 )     2,870  
                                           
Consumer     203,176       176,066       154,916       113,149       58,164       27,110       145,012  
Other     7,689       13,897       22,777       22,160       25,488       (6,208 )     (17,799 )
      2,307,915       2,256,690       2,196,703       2,194,455       1,935,907       51,225       372,008  
Less net deferred fees and other unearned income     (7,101 )     (7,654 )     (8,668 )     (9,761 )     (2,998 )     553       (4,103 )
Total loans held for investment   $ 2,300,814     $ 2,249,036     $ 2,188,035     $ 2,184,694     $ 1,932,909     $ 51,778     $ 367,905  
                                           
Total loans   $ 2,302,661     $ 2,249,036     $ 2,188,894     $ 2,185,847     $ 1,932,909     $ 53,625     $ 369,752  
                                           
Total unfunded commitments   $ 789,869     $ 813,757     $ 764,247     $ 749,321     $ 689,620     $ (23,888 )   $ 100,249  
           



ATLANTIC CAPITAL BANCSHARES, INC.                                
Allowance for Credit Losses Activity and Credit Quality                              
                                 
    2021   2020
       First      Fourth      Third      Second      First
(dollars in thousands)   Quarter   Quarter   Quarter   Quarter   Quarter
Allowance for loan losses                                
Balance at beginning of period   $ 31,818     $ 31,894     $ 31,605     $ 24,896     $ 18,535    
Adoption of ASU 2016-13                             (854 )  
Provision for loan losses     (4,074 )     225       636       8,222       7,409    
Loans charged-off:                                     
Commercial and industrial     (288 )     (401 )     (404 )     (1,479 )     (18 )  
Commercial real estate                             (78 )  
Construction and land                                
Residential mortgages                       (36 )        
Home equity                             (125 )  
Consumer                                
Other                                
Total loans charged-off     (288 )     (401 )     (404 )     (1,515 )     (221 )  
Recoveries on loans previously charged-off:                                     
Commercial and industrial     50       37       56       1          
Commercial real estate           44                   18    
Construction and land           18                      
Residential mortgages                             1    
Home equity                                
Consumer           1       1       1       8    
Other                                
Total recoveries     50       100       57       2       27    
Net charge-offs   $ (238 )   $ (301 )   $ (347 )   $ (1,513 )   $ (194 )  
Balance at period end   $ 27,506     $ 31,818     $ 31,894     $ 31,605     $ 24,896    
                                 
Allowance for unfunded commitments                                     
Balance at beginning of period   $ 3,128     $ 2,871     $ 3,480     $ 2,838     $ 892    
Adoption of ASU 2016-13                             1,275    
Provision for unfunded commitments     (445 )     257       (609 )     642       671    
Balance at period end   $ 2,683     $ 3,128     $ 2,871     $ 3,480     $ 2,838    
                                 
Total allowance for credit losses - loans and unfunded commitments   $ 30,189     $ 34,946     $ 34,765     $ 35,085     $ 27,734    
                                 
Provision for credit losses under CECL                                
Provision for loan losses     (4,074 )     225       636       8,222       7,409    
Provision for securities held to maturity credit losses     -       (1 )     1       (1 )     (6 )  
Provision for unfunded commitments     (445 )     257       (609 )     642       671    
Total provision for credit losses   $ (4,519 )   $ 481     $ 28     $ 8,863     $ 8,074    
                                 
Non-performing loans   $ 2,056     $ 4,862     $ 5,421     $ 6,265     $ 6,515    
Foreclosed properties (OREO)     16       16       563       779       779    
Total nonperforming assets   $ 2,072     $ 4,878     $ 5,984     $ 7,044     $ 7,294    
                                 
Allowance for loan losses to loans held for investment     1.20   %     1.41   %     1.46   %     1.45   %     1.29   %  
Allowance for credit losses to loans held for investment     1.31   %     1.55   %     1.59   %     1.61   %     1.43   %  
Allowance for credit losses to loans held for investment excluding PPP loans     1.45   %   1.70   %   1.78   %   1.80   %   1.43   %  
Net charge-offs to average loans (1)     0.04       0.05       0.06       0.29       0.04    
Non-performing loans as a percentage of total loans     0.09   %     0.22   %     0.25   %     0.29   %     0.34   %  
Non-performing assets as a percentage of total assets     0.06   %     0.13   %     0.20   %     0.24   %     0.27   %  
                                 
(1)Annualized.                                
                                 



ATLANTIC CAPITAL BANCSHARES, INC.                              
Period End Deposits                                          
                                           
                                          Linked       
    March 31,    December 31,    September 30,    June 30,    March 31,    Quarter   Year Over
(dollars in thousands)   2021   2020   2020   2020   2020   Change   Year Change
DDA   $ 1,280,524   $ 1,033,765   $ 843,656   $ 883,662   $ 712,919   $ 246,759     $ 567,605  
NOW     485,540     760,638     387,858     449,737     368,463     (275,098 )     117,077  
Savings     562     625     568     583     567     (63 )     (5 )
Money market     1,142,361     1,030,753     945,834     879,863     982,109     111,608       160,252  
Time     294,129     241,328     196,343     131,353     66,793     52,801       227,336  
Brokered     74,576     94,399     94,463     62,433     94,268     (19,823 )     (19,692 )
Total deposits   $ 3,277,692   $ 3,161,508   $ 2,468,722   $ 2,407,631   $ 2,225,119   $ 116,184     $ 1,052,573  
                                           
                                           
Average Deposits                                          
                                           
       2021   2020      Linked       
    First   Fourth   Third   Second   First   Quarter   Q1 2021 vs
(dollars in thousands)   Quarter   Quarter   Quarter   Quarter   Quarter   Change   Q1 2020
DDA   $ 1,136,531   $ 977,009   $ 854,715   $ 815,299   $ 713,001   $ 159,522     $ 423,530  
NOW     618,701     558,967     440,734     462,051     382,178     59,734       236,523  
Savings     587     614     586     574     650     (27 )     (63 )
Money market     1,042,809     1,026,347     942,062     952,444     1,010,713     16,462       32,096  
Time     273,615     221,792     166,019     96,362     55,775     51,823       217,840  
Brokered     84,663     89,673     68,102     83,228     92,188     (5,010 )     (7,525 )
Total deposits   $ 3,156,906   $ 2,874,402   $ 2,472,218   $ 2,409,958   $ 2,254,505   $ 282,504     $ 902,401  
                                           
Noninterest bearing deposits as a percentage of average deposits     36.0 %     34.0 %     34.6 %     33.8 %     31.6 %              
Cost of interest-bearing deposits     0.19 %   0.25 %   0.28 %   0.33 %   1.09 %          
Cost of deposits     0.12 %     0.16 %     0.19 %     0.22 %     0.75 %              
                                           



ATLANTIC CAPITAL BANCSHARES, INC.                                
Non-GAAP Performance and Financial Measures Reconciliation                                
                                 
    2021   2020
       First      Fourth   Third   Second      First     
(in thousands, except share and per share data)   Quarter   Quarter   Quarter   Quarter   Quarter  
                                 
Taxable equivalent interest income reconciliation                                    
Interest income - GAAP   $ 25,410     $ 24,943     $ 24,233     $ 23,797     $ 26,023    
Taxable equivalent adjustment     365       345       345       354       223    
Interest income - taxable equivalent   $ 25,775     $ 25,288     $ 24,578     $ 24,151     $ 26,246    
                                 
Taxable equivalent net interest income reconciliation                                     
Net interest income - GAAP   $ 23,345     $ 22,644     $ 21,718     $ 21,631     $ 20,980    
Taxable equivalent adjustment     365       345       345       354       223    
Net interest income - taxable equivalent   $ 23,710     $ 22,989     $ 22,063     $ 21,985     $ 21,203    
                                 
Loan yield excluding PPP loans reconciliation                                    
Loan yield - GAAP     3.89   %   3.89   %   3.82   %   3.87   %   4.77   %  
Impact of PPP loans     (0.06 )     (0.03 )     0.13       0.22          
Loan yield excluding PPP loans     3.83   %   3.86   %   3.95   %   4.09   %   4.77   %  
                                 
Taxable equivalent net interest margin reconciliation                                     
Net interest margin - GAAP     2.76   %     2.86   %     3.09   %     3.17   %     3.38   %  
Impact of taxable equivalent adjustment     0.05       0.05       0.05       0.06       0.03    
Net interest margin - taxable equivalent     2.81   %     2.91   %     3.14   %     3.23   %     3.41   %  
                                 
Taxable equivalent net interest margin excluding PPP loans reconciliation                                     
Net interest margin - taxable equivalent     2.81   %     2.91   %     3.14   %     3.23   %     3.41   %  
Impact of PPP loans     (0.11 )     (0.10 )     0.04       0.12          
Net interest margin - taxable equivalent excluding PPP loans     2.70   %     2.81   %     3.18   %     3.35   %     3.41   %  
                                 
Taxable equivalent income before income taxes reconciliation                                     
Income before income taxes - GAAP   $ 16,277     $ 12,015     $ 10,481     $ 2,207     $ 2,451    
Taxable equivalent adjustment     365       345       345       354       223    
Income before income taxes   $ 16,642     $ 12,360     $ 10,826     $ 2,561     $ 2,674    
                                 
Taxable equivalent income tax expense reconciliation                                     
Income tax expense - GAAP   $ 2,915     $ 2,065     $ 1,863     $ 358     $ 327    
Taxable equivalent adjustment     365       345       345       354       223    
Income tax expense   $ 3,280     $ 2,410     $ 2,208     $ 712     $ 550    
                                 
Tangible book value per common share reconciliation                                     
Total shareholders' equity   $ 340,328     $ 338,586     $ 340,309     $ 335,980     $ 332,300    
Intangible assets     (19,925 )     (19,925 )     (19,925 )     (19,925 )     (19,925 )  
Total tangible common equity   $ 320,403     $ 318,661     $ 320,384     $ 316,055     $ 312,375    
Common shares outstanding     20,354,077       20,394,912       21,202,783       21,477,631       21,479,986    
Book value per common share - GAAP   $ 16.72     $ 16.60     $ 16.05     $ 15.64     $ 15.47    
Tangible book value     15.74       15.62       15.11       14.72       14.54    
                                 
Tangible common equity to tangible assets reconciliation                                     
Total shareholders' equity   $ 340,328     $ 338,586     $ 340,309     $ 335,980     $ 332,300    
Intangible assets     (19,925 )     (19,925 )     (19,925 )     (19,925 )     (19,925 )  
Total tangible common equity   $ 320,403     $ 318,661     $ 320,384     $ 316,055     $ 312,375    
                                 
Total assets   $ 3,732,668     $ 3,615,617     $ 2,923,977     $ 2,890,622     $ 2,719,658    
Intangible assets     (19,925 )     (19,925 )     (19,925 )     (19,925 )     (19,925 )  
Total tangible assets   $ 3,712,743     $ 3,595,692     $ 2,904,052     $ 2,870,697     $ 2,699,733    
Tangible common equity to tangible assets     8.63   %     8.86   %     11.03   %     11.01   %     11.57   %  
                                 
Allowance for credit losses to loans held for investment reconciliation                                
Total loans held for investment   $ 2,300,814     $ 2,249,036     $ 2,188,035     $ 2,184,694     $ 1,932,909    
PPP loans     (218,766 )     (192,160 )     (231,834 )     (234,049 )        
Total loans held for investment excluding PPP loans   $ 2,082,048     $ 2,056,876     $ 1,956,201     $ 1,950,645     $ 1,932,909    
                                 
Allowance for credit losses to loans held for investment     1.31   %   1.55   %   1.59   %   1.61   %   1.43   %  
Allowance for credit losses to loans held for investment excluding PPP loans     1.45   %   1.70   %   1.78   %   1.80   %   1.43   %  
                                 

 


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