Atlantic Capital Bancshares, Inc. Reports First Quarter 2021 Results

Atlantic Capital Bancshares, Inc.
·23 min read

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

%