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Atlantic Capital Bancshares, Inc. Reports Second Quarter 2019 Results

ATLANTA, July 25, 2019 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income from continuing operations for the quarter ended June 30, 2019 of $7.0 million, or $0.29 per diluted share, compared to $8.4 million, or $0.32 per diluted share, for the second quarter of 2018 and $6.4 million, or $0.26 per diluted share, for the first quarter of 2019.

On April 5, 2019, Atlantic Capital completed the sale of 14 branches in Tennessee and northwest Georgia, including its mortgage business to FirstBank (the “branch sale”). This branch sale included the sale of approximately $598 million in deposits and repurchase agreements and approximately $385 million in loans.  The income and expenses related to these branches are included in discontinued operations and prior period financial information has been retrospectively adjusted for the impact of discontinued operations.  Net income from discontinued operations in the second quarter of 2019 included a gain on sale of branches of $34.5 million and divestiture expenses of $3.6 million.

“With strong loan, deposit, and non-interest income growth in the second quarter, Atlantic Capital continued to build on its success in Atlanta and its specialty commercial lines of business. We have invested aggressively in new bankers, support professionals, and offices to address new opportunities in our vibrant and growing markets,” remarked Douglas Williams, President and Chief Executive Officer.

Second Quarter Highlights(1)

  • Tangible book value per share increased to $13.60, compared to $11.23 at June 30, 2018 and $12.17 at March 31, 2019. 
  • Taxable equivalent net interest margin from continuing operations was 3.61%, compared to 3.51% in the second quarter of 2018 and 3.74% in the first quarter of 2019.
  • Noninterest expense from continuing operations totaled $13.3 million, compared to $12.6 million in the second quarter of 2018 and $13.8 million in the first quarter of 2019.
  • Commercial and industrial loans held for investment increased $155.1 million, or 28.3% from June 30, 2018 and $22.1 million, or 13.0% annualized, from March 31, 2019. 
  • Average deposits from continuing operations increased $369.1 million, or 24.1%, compared to the second quarter of 2018 and $108.3 million, or 24.1% annualized, compared to the first quarter of 2019.
  • The company repurchased 1.1 million shares in the second quarter totaling $19.5 million, and has repurchased 2.9 million shares totaling $50.8 million since the announcement of the $85.0 million buyback program in November of 2018.

Income Statement             

Taxable equivalent net interest income from continuing operations totaled $20.0 million for the second quarter of 2019, an increase of $1.4 million, or 8%, from the second quarter of 2018, and a decrease of $547,000 from the first quarter of 2019.  The decrease in net interest income from the first quarter of 2019 was primarily the result of a decrease in the average balance of investment securities and an increase in borrowings to help fund the $167 million in cash paid to FirstBank at the closing of the branch sale, along with an increase in the cost of interest bearing deposits.

Net interest margin from continuing operations was 3.61% in the second quarter of 2019, an increase of 10 basis points from the second quarter of 2018 and a decrease of 13 basis points from the first quarter of 2019.  The decrease in the second quarter was primarily the result of a decrease in loan yields, higher cost of interest bearing deposits and an increase in borrowings to help fund the cash paid for the branch sale.

The yield on loans from continuing operations in the second quarter of 2019 was 5.34%, an increase of 32 basis points from the second quarter of 2018 and a decrease of 6 basis points from the first quarter of 2019.  The linked quarter decrease was primarily a result of decreases in 1 month LIBOR during the quarter.

(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 16.

The cost of deposits from continuing operations in the second quarter of 2019 was 1.15%, an increase of 44 basis points from the second quarter of 2018 and an increase of 6 basis points from the first quarter of 2019. The cost of interest bearing deposits from continuing operations increased 62 basis points to 1.66% from the second quarter of 2018, and increased 5 basis points from the first quarter of 2019.

The provision for loan losses for continuing operations was $698,000 in the second quarter of 2019 compared to ($173,000) in the second quarter of 2018 and $814,000 in the first quarter of 2019.  Annualized net charge-offs were 0.14% of average loans in the second quarter of 2019 and 0.12% for the first six months of 2019.

Noninterest income from continuing operations totaled $2.9 million in the second quarter of 2019 compared to $4.5 million in the second quarter of 2018 and $2.3 million in the first quarter of 2019.  The second quarter of 2018 included a $1.7 million gain on the sale of the Southeastern Trust Company and $518,000 in trust income earned prior to the sale.  The second quarter of 2019 included a gain of $654,000 on the sale of investment securities to help fund the cash owed to the buyer at the closing of the branch sale and a loss of $233,000 in derivative income due to the credit valuation adjustment on the customer swap portfolio.

Noninterest expense from continuing operations totaled $13.3 million in the second quarter of 2019, an increase of $631,000 compared to the second quarter of 2018, and a decrease of $541,000 compared to the first quarter of 2019.  Salaries and employee benefits expense totaled $8.5 million in the second quarter of 2019, and accounted for most of the linked quarter decrease in expenses primarily as a result of lower benefits cost.

Balance Sheet

Total loans held for investment were $1.79 billion at June 30, 2019, an increase of $238.2 million, or 15.3%, from June 30, 2018 and an increase of $55.2 million, or 12.7% annualized, from March 31, 2019.  Commercial and industrial loans increased $155.1 million, or 28.4%, from June 30, 2018 and increased $22.1 million, or 13.0% annualized, from March 31, 2019.  Mortgage warehouse loans decreased $27.7 million from June 30, 2018 and $11.6 million from March 31, 2019.

At June 30, 2019, the allowance for loan losses was $18.2 million, or 1.02% of loans held for investment compared to 1.01%, at June 30, 2018 and 1.04%, at March 31, 2019.  Non-performing assets from continuing operations totaled $6.4 million, or 0.31% of total assets, as of June 30, 2019, compared to 0.11% of total assets as of June 30, 2018 and 0.34% of total assets as of March 31, 2019.

Total average deposits from continuing operations were $1.90 billion for the second quarter of 2019, an increase of $369.0 million, or 24.1%, from the second quarter of 2018 and an increase of $108.3 million, or 24.1% annualized, from the first quarter of 2019. Noninterest bearing deposits were 30.9% of total average deposits from continuing operations in the second quarter of 2019, compared to 31.9% in the second quarter of 2018 and 32.1% in the first quarter of 2019.

Earnings Conference Call

The Company will host a conference call at 10:00 a.m. EDT on Friday, July 26, 2019, to discuss the financial results for the quarter ended June 30, 2019. Individuals wishing to participate in the conference call may do so by dialing 866-777-2509 from the United States. 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) taxable equivalent interest income; (ii) taxable equivalent net interest income; (iii) taxable equivalent net interest margin; (iv) taxable equivalent income before income taxes; (v) taxable equivalent income tax expense; (vi) tangible assets; (vii) tangible common equity; and (viii) tangible book value per common share, in its analysis of the Company's performance. 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 “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 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 $2.4 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 specialized financial services for select clients nationally.

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

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

              
              
ATLANTIC CAPITAL BANCSHARES, INC.             
Selected Financial Information               
                
  2019 2018  For the six months ended June 30, 
(in thousands, except share and per share data; taxable equivalent) Second Quarter First
Quarter
 Fourth Quarter Third Quarter Second Quarter 2019 2018 
INCOME SUMMARY (1)               
Interest income (2) $26,686  $26,297  $26,725  $24,114  $22,934  $52,983  $44,316  
Interest expense 6,709  5,773  5,560  4,720  4,392  12,482  8,233  
Net interest income 19,977  20,524  21,165  19,394  18,542  40,501  36,083  
Provision for loan losses 698  814  502  845  (173) 1,512  599  
Net interest income after provision for loan losses 19,279  19,710  20,663  18,549  18,715  38,989  35,484  
Noninterest income 2,941  2,336  164  2,255  4,466  5,277  7,628  
Noninterest expense 13,254  13,795  12,208  11,872  12,623  27,049  25,911  
Income from continuing operations before income taxes 8,966  8,251  8,619  8,932  10,558  17,217  17,201  
Income tax expense 1,957  1,811  1,136  1,934  2,180  3,768  3,632  
Net income from continuing operations 7,009  6,440  7,483  6,998  8,378  13,449  13,569  
Income (loss) from discontinued operations, net of tax 22,143  (1,063) 1,347  (485) (227) 21,080  (380) 
Net income $29,152  $5,377  $8,830  $6,513  $8,151  $34,529  $13,189  
                
PER SHARE DATA               
Diluted earnings per share - continuing operations $0.29  $0.26  $0.29  $0.27  $0.32  $0.55  $0.52  
Diluted earnings (loss) per share - discontinued operations 0.92  (0.04) 0.05  (0.02) (0.01) 0.86  (0.01) 
Diluted earnings per share 1.21  0.21  0.34  0.25  0.31  1.41  0.51  
Book value per share 14.46  13.10  12.80  12.27  12.14  14.46  12.14  
Tangible book value per common share (3) 13.60  12.17  11.88  11.37  11.23  13.60  11.23  
                
PERFORMANCE MEASURES               
Return on average equity 34.38 %6.80 %10.90 %8.07 %10.46 %21.07 %8.59 %
Return on average assets 4.79  0.77  1.21  0.92  1.20  2.64  0.98  
Taxable equivalent net interest margin - continuing operations 3.61  3.74  3.66  3.48  3.51  3.73  3.45  
Efficiency ratio - continuing operations 58.06  60.61  57.50  55.09  55.10  59.33  59.55  
                
CAPITAL               
Average equity to average assets 13.94 %11.34 %11.11 %11.41 %11.50 %12.55 %11.42 %
Tangible common equity to tangible assets 13.37  10.51  10.25  10.38  10.99  13.37  10.99  
Tier 1 capital ratio 13.4 (4)11.0  11.5  11.8  12.0  13.4 (4)12.0  
Total risk based capital ratio 16.5 (4)13.7  14.2  14.7  15.0  16.5 (4)15.0  
Number of common shares outstanding - basic 23,293,465  24,466,964  25,290,419  26,103,666  26,102,217  23,293,465  26,102,217  
Number of common shares outstanding - diluted 23,508,442  24,719,273  25,480,233  26,281,849  26,336,871  23,508,442  26,336,871  
                
ASSET QUALITY               
Allowance for loan losses to loans held for investment (5) 1.02 %1.04 %1.03 %1.00 %1.01 %1.02 %1.01 %
Net charge-offs to average loans (6) 0.14  0.11      0.03  0.12  0.04  
Non-performing assets to total assets 0.31  0.40  0.20  0.13  0.14  0.31  0.14  
                
(1)On April 5, 2019, Atlantic Capital completed the sale to FirstBank of its Tennessee and northwest Georgia banking operations, including 14 branches and the mortgage business. The mortgage business and branches sold to FirstBank are reported as discontinued operations.  Discontinued operations have been reported retrospectively for periods presented prior to December 31, 2018. (2)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.  (3)Excludes effect of acquisition related intangibles. (4)Amounts are estimates as of 6/30/19. (5)The ratios for the first and second quarters of 2019 and fourth quarter of 2018 are calculated on a continuing operations basis.  Prior period ratios have not been retrospectively adjusted for the impact of discontinued operations.  (6)Annualized.


ATLANTIC CAPITAL BANCSHARES, INC.      
Financial Information from Discontinued Operations      
       
Assets and Liabilities from Discontinued Operations      
       
(in thousands) June 30, 2019 March 31, 2019 December 31, 2018
Cash $  $4,168  $4,234 
Loans held for sale - discontinued operations   384,779  373,030 
Premises held for sale - discontinued operations   7,736  7,722 
Goodwill - discontinued operations   4,555  4,555 
Other assets   1,158  1,405 
Total assets $  $402,396  $390,946 
       
Deposits to be assumed - discontinued operations $  $593,264  $585,429 
Securities sold under agreements to repurchase - discontinued operations   9,821  6,220 
Total liabilities $  $603,085  $591,649 
Net liabilities $  $(200,689) $(200,703)
             
             


Components of Net Income (Loss) from Discontinued Operations    
               
  2019 2018  For the six months ended June 30,
(in thousands) Second
Quarter
 First
Quarter
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
 2019 2018
               
Net interest income $(39) $3,125  $3,225  $3,266  $3,570  $3,086  $7,649 
Provision for loan losses     (3,097)        
Net interest income after provision (39) 3,125  6,322  3,266  3,570  3,086  7,649 
Service charges 46  481  483  474  480  527  965 
Mortgage income   288  320  315  363  288  667 
Gain on sale of branches 34,475          34,475   
Other income (22) 21  47  22  22  (1) 54 
Total noninterest income 34,499  790  850  811  865  35,289  1,686 
Salaries and employee benefits 330  2,427  2,757  2,820  3,010  2,757  6,137 
Occupancy 71  339  479  556  511  410  981 
Equipment and software 8  123  158  217  203  131  404 
Amortization of intangibles   247  271  296  319  247  662 
Communications and data processing 197  389  440  381  346  586  708 
Divestiture expense 3,646  1,449  825      5,095   
Other noninterest expense 101  358  446  453  349  459  950 
Total noninterest expense 4,353  5,332  5,376  4,723  4,738  9,685  9,842 
Net income (loss) before provision for income taxes 30,107  (1,417) 1,796  (646) (303) 28,690  (507)
Provision (benefit) for income taxes 7,964  (354) 449  (161) (76) 7,610  (127)
Net income (loss) from discontinued operations $22,143  $(1,063) $1,347  $(485) $(227) $21,080  $(380)
                             
                             


ATLANTIC CAPITAL BANCSHARES, INC.        
Consolidated Balance Sheets (unaudited)        
         
  June 30, March 31, December 31, June 30,
(in thousands, except share data) 2019 2019 2018 2018
ASSETS        
Cash and due from banks $24,206  $36,992  $42,895  $55,612 
Interest-bearing deposits in banks 52,932  76,720  216,040  42,477 
Other short-term investments   29,457  9,457  14,712 
Cash and cash equivalents 77,138  143,169  268,392  112,801 
Investment securities available-for-sale 348,723  402,640  402,486  453,968 
Other investments 31,912  28,844  29,236  36,190 
Loans held for sale   1,530  5,889  1,612 
Loans held for sale - discontinued operations(1)   384,779  373,030  382,732 
Loans held for investment(1) 1,789,740  1,734,557  1,728,073  1,551,579 
Less: allowance for loan losses(2) (18,186) (18,107) (17,851) (19,583)
Loans held for investment, net 1,771,554  1,716,450  1,710,222  1,531,996 
Premises held for sale - discontinued operations(1)   7,736  7,722  7,296 
Premises and equipment, net(1) 20,037  23,311  9,779  9,582 
Bank owned life insurance 65,874  65,486  65,149  64,391 
Goodwill - discontinued operations(1)   4,555  4,555  4,555 
Goodwill - continuing operations(1) 19,925  17,135  17,135  17,135 
Other intangibles, net 3,095  4,241  4,388  5,322 
Other real estate owned 971  971  874  1,288 
Other assets 50,451  55,040  56,583  61,806 
Total assets $2,389,680  $2,855,887  $2,955,440  $2,690,674 
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Deposits:        
Noninterest-bearing demand(1) $569,693  $561,829  $602,252  $464,282 
Interest-bearing checking(1) 309,709  233,838  252,490  241,461 
Savings(1) 1,090  896  725  951 
Money market(1) 802,973  962,741  987,183  647,247 
Time(1) 33,902  22,069  10,623  10,359 
Brokered deposits 134,164  65,811  99,241  92,656 
Deposits to be assumed - discontinued operations(1)   593,264  585,429  609,631 
Total deposits 1,851,531  2,440,448  2,537,943  2,066,587 
Federal funds purchased 35,000      65,000 
Securities sold under agreements to repurchase - discontinued operations(1)   9,821  6,220  8,024 
Federal Home Loan Bank borrowings 82,000      150,000 
Long-term debt 49,789  49,746  49,704  49,620 
Other liabilities 34,645  35,245  37,920  34,673 
Total liabilities 2,052,965  2,535,260  2,631,787  2,373,904 
         
SHAREHOLDERS' EQUITY        
Preferred stock, no par value;  10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2019, March 31, 2019, December 31, 2018, and June 30, 2018        
Common stock, no par value; 100,000,000 shares authorized; 23,293,465, 24,466,964, 25,290,419, and 26,102,217 shares issued and outstanding as of June 30, 2019, March 31, 2019, December 31, 2018, and June 30, 2018, respectively 256,791  276,346  291,771  304,793 
Retained earnings 76,343  47,191  42,187  26,844 
Accumulated other comprehensive (loss) income 3,581  (2,910) (10,305) (14,867)
Total shareholders’ equity 336,715  320,627  323,653  316,770 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,389,680  $2,855,887  $2,955,440  $2,690,674 
         
(1)Assets and liabilities related to the sale of Tennessee and northwest Georgia banking operations were classified as held for sale as of March 31, 2019 and December 31, 2018, and prior periods have been adjusted retrospectively.  (2)The allowance for loan losses has not been adjusted retrospectively for discontinued operations in periods prior to December 31, 2018.
 
 


ATLANTIC CAPITAL BANCSHARES, INC.            
Consolidated Statements of Income (unaudited) (1)            
               
(in thousands, except share and per share data) Three months ended Six months ended
  June 30,
2019
 March 31,
2019
 December
31, 2018
 September
30, 2018
 June 30,
2018
 June 30,
2019
 June 30,
2018
INTEREST INCOME              
Loans, including fees $23,554  $22,752  $22,752  $20,117  $19,269  $46,306  $37,241 
Investment securities available-for-sale 2,339  2,631  2,844  2,789  2,687  4,970  5,279 
Interest and dividends on other interest‑earning assets 705  814  1,032  1,111  880  1,519  1,595 
Total interest income 26,598  26,197  26,628  24,017  22,836  52,795  44,115 
INTEREST EXPENSE              
Interest on deposits 5,448  4,831  4,185  3,182  2,715  10,279  5,139 
Interest on Federal Home Loan Bank advances 270    487  637  766  270  1,275 
Interest on federal funds purchased and securities sold under agreements to repurchase 168  118  60  77  88  286  167 
Interest on long-term debt 823  824  828  824  823  1,647  1,652 
Total interest expense 6,709  5,773  5,560  4,720  4,392  12,482  8,233 
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 19,889  20,424  21,068  19,297  18,444  40,313  35,882 
Provision for loan losses 698  814  502  845  (173) 1,512  599 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 19,191  19,610  20,566  18,452  18,617  38,801  35,283 
NONINTEREST  INCOME              
Service charges 870  794  876  804  828  1,664  1,535 
Gains (losses) on sale of securities 654    (1,853)   (2) 654  (2)
Gains (losses) on sale of other assets (10) (3)   58  (166) (13) (212)
Trust income         507    1,025 
Derivatives income (233) (111) 154  20  20  (344) 134 
Bank owned life insurance 389  360  380  379  378  749  747 
SBA lending activities 1,096  1,086  425  882  997  2,182  2,299 
Gain on sale of trust company         1,681    1,681 
Other noninterest income 175  210  182  112  223  385  421 
Total noninterest income 2,941  2,336  164  2,255  4,466  5,277  7,628 
NONINTEREST EXPENSE              
Salaries and employee benefits 8,529  9,213  7,573  7,332  7,911  17,742  16,861 
Occupancy 689  639  655  732  700  1,328  1,585 
Equipment and software 753  739  783  747  701  1,492  1,287 
Professional services 792  775  947  796  943  1,567  1,768 
Postage, printing and supplies 29  48  30  55  44  77  81 
Communications and data processing 662  675  772  566  657  1,337  1,338 
Marketing and business development 233  226  224  211  135  459  275 
FDIC premiums 175  235  157  154  143  410  251 
Other noninterest expense 1,392  1,245  1,067  1,279  1,389  2,637  2,465 
Total noninterest expense 13,254  13,795  12,208  11,872  12,623  27,049  25,911 
               
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES 8,878  8,151  8,522  8,835  10,460  17,029  17,000 
Provision for income taxes 1,869  1,711  1,039  1,837  2,082  3,580  3,431 
NET INCOME FROM CONTINUING OPERATIONS 7,009  6,440  7,483  6,998  8,378  13,449  13,569 
DISCONTINUED OPERATIONS              
Income (loss) from discontinued operations $30,107  $(1,417) $1,796  $(646) $(303) $28,690  $(507)
Provision (benefit) for income taxes 7,964  (354) 449  (161) (76) 7,610  (127)
Net income (loss) from discontinued operations 22,143  (1,063) 1,347  (485) (227) 21,080  (380)
NET INCOME $29,152  $5,377  $8,830  $6,513  $8,151  $34,529  $13,189 
               
Net Income (Loss) per Common Share Basic              
Net income per common share - continuing operations $0.29  $0.26  $0.29  $0.27  $0.32  $0.55  $0.52 
Net income (loss) per common share - discontinued operations 0.93  (0.04) 0.05  (0.02) (0.01) 0.87  (0.01)
Net Income per Common Share Basic 1.22  0.22  0.34  0.25  0.31  1.42  0.51 
Net Income (Loss) per Common Share Diluted              
Net income per common share - continuing operations $0.29  $0.26  $0.29  $0.27  $0.32  $0.55  $0.52 
Net income (loss) per common share - discontinued operations 0.92  (0.04) 0.05  (0.02) (0.01) 0.86  (0.01)
Net Income per Common Share Diluted 1.21  0.21  0.34  0.25  0.31  1.41  0.51 
               
Weighted average shares - basic 23,888,381  24,855,171  25,919,445  26,103,397  26,010,914  24,369,106  25,881,587 
Weighted average shares - diluted 24,040,806  25,019,384  26,043,799  26,254,772  26,200,026  24,527,392  26,073,602 
               
(1)Discontinued operations have been reported retrospectively for all periods presented.    
     
     


ATLANTIC CAPITAL BANCSHARES, INC.     
Average Balance Sheets and Net Interest Margin Analysis     
Selected Financial Information     
    
  Three months ended 
  June 30, 2019  March 31, 2019 
(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 $70,628  $450  2.56 % $92,168  $463  2.04 %
Other short-term investments 3,993  32  3.21   11,680  86  2.99  
Investment securities:              
Taxable investment securities 280,639  1,848  2.64   320,089  2,113  2.68  
Non-taxable investment securities(1) 79,408  579  2.92   80,012  618  3.13  
Total investment securities 360,047  2,427  2.70   400,101  2,731  2.77  
Loans - continuing operations 1,769,803  23,554  5.34   1,707,682  22,752  5.40  
FHLB and FRB stock 14,435  223  6.20   12,528  265  8.58  
Total interest-earning assets - continuing operations 2,218,906  26,686  4.82   2,224,159  26,297  4.80  
Loans held for sale - discontinued operations 30,198  47  0.62   381,783  4,541  4.82  
Total interest-earning assets 2,249,104  26,733  4.77   2,605,942  30,838  4.80  
Non-earning assets 191,398       223,130      
Total assets $2,440,502       $2,829,072      
Liabilities              
Interest bearing deposits:              
NOW, money market, and savings 1,175,237  4,733  1.62   1,124,350  4,255  1.53  
Time deposits 32,358  50  0.62   12,847  38  1.20  
Brokered deposits 106,524  665  2.50   81,141  538  2.69  
Total interest-bearing deposits 1,314,119  5,448  1.66   1,218,338  4,831  1.61  
Total borrowings 70,770  438  2.48   18,056  118  2.65  
Total long-term debt 49,761  823  6.63   49,719  824  6.72  
Total interest-bearing liabilities - continuing operations 1,434,650  6,709  1.88   1,286,113  5,773  1.82  
Interest-bearing liabilities - discontinued operations 36,255  86  0.95   473,090  1,416  1.21  
Total interest-bearing liabilities 1,470,905  6,795  1.85   1,759,203  7,189  1.66  
Demand deposits 587,957       575,453      
Demand deposits - discontinued operations 9,851       128,977      
Other liabilities 31,670       44,627      
Shareholders' equity 340,119       320,812      
Total liabilities and shareholders' equity $2,440,502       $2,829,072      
Net interest spread - continuing operations     2.94 %     2.98 %
Net interest income and net interest margin - continuing operations(2)   $19,977  3.61 %   $20,524  3.74 %
Net interest income and net interest margin(2)   $19,938  3.56 %   $23,649  3.68 %
               
Non-taxable equivalent net interest margin     3.54 %     3.66 %
               
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate. 
(2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset. 
  
  


ATLANTIC CAPITAL BANCSHARES, INC.     
Average Balance Sheets and Net Interest Margin Analysis     
Selected Financial Information     
    
  Three months ended 
  June 30, 2019  June 30, 2018 
(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 $70,628  $450  2.56 % $97,501  $562  2.31 %
Other short-term investments 3,993  32  3.21   9,262  64  2.77  
Investment securities:              
Taxable investment securities 280,639  1,848  2.64   378,291  2,212  2.35  
Non-taxable investment securities(1) 79,408  579  2.92   76,343  573  3.01  
Total investment securities 360,047  2,427  2.70   454,634  2,785  2.46  
Loans - continuing operations 1,769,803  23,554  5.34   1,540,351  19,269  5.02  
FHLB and FRB stock 14,435  223  6.20   19,357  254  5.26  
Total interest-earning assets - continuing operations 2,218,906  26,686  4.82   2,121,105  22,934  4.34  
Loans held for sale - discontinued operations 30,198  47  0.62   386,712  4,510  4.68  
Total interest-earning assets 2,249,104  26,733  4.77   2,507,817  27,444  4.39  
Non-earning assets 191,398       210,254      
Total assets $2,440,502       $2,718,071      
Liabilities              
Interest bearing deposits:              
NOW, money market, and savings 1,175,237  4,733  1.62   932,991  2,222  0.96  
Time deposits 32,358  50  0.62   9,855  25  1.02  
Brokered deposits 106,524  665  2.50   100,425  468  1.87  
Total interest-bearing deposits 1,314,119  5,448  1.66   1,043,271  2,715  1.04  
Total borrowings 70,770  438  2.48   180,699  853  1.89  
Total long-term debt 49,761  823  6.63   49,592  823  6.66  
Total interest-bearing liabilities - continuing operations 1,434,650  6,709  1.88   1,273,562  4,391  1.38  
Interest-bearing liabilities - discontinued operations 36,255  86  0.95   464,598  941  0.81  
Total interest-bearing liabilities 1,470,905  6,795  1.85   1,738,160  5,332  1.23  
Demand deposits 587,957       489,722      
Demand deposits - discontinued operations 9,851       143,391      
Other liabilities 31,670       34,255      
Shareholders' equity 340,119       312,543      
Total liabilities and shareholders' equity $2,440,502       $2,718,071      
Net interest spread - continuing operations     2.94 %     2.96 %
Net interest income and net interest margin - continuing operations(2)   $19,977  3.61 %   $18,543  3.51 %
Net interest income and net interest margin(2)   $19,938  3.56 %   $22,112  3.54 %
               
Non-taxable equivalent net interest margin     3.54 %     3.52 %
               
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate. 
(2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset. 
  
  


ATLANTIC CAPITAL BANCSHARES, INC.     
Average Balance Sheets and Net Interest Margin Analysis     
Selected Financial Information     
    
  Six months ended 
  June 30, 2019  June 30, 2018 
(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 $81,339  $913  2.26 % $87,907  $959  2.20 %
Other short-term investments 7,815  118  3.04   9,801  127  2.61  
Investment securities:              
Taxable investment securities 300,255  3,962  2.66   377,038  4,328  2.31  
Non-taxable investment securities(1) 79,709  1,196  3.03   77,239  1,152  3.01  
Total investment securities 379,964  5,158  2.74   454,277  5,480  2.43  
Loans - continuing operations 1,708,549  46,306  5.47   1,538,504  37,241  4.88  
FHLB and FRB stock 13,487  488  7.30   18,630  509  5.51  
Total interest-earning assets - continuing operations 2,191,154  52,983  4.88   2,109,119  44,316  4.24  
Loans held for sale - discontinued operations 235,384  4,588  3.93   394,471  9,213  4.71  
Total interest-earning assets 2,426,538  57,571  4.78   2,503,590  53,529  4.31  
Non-earning assets 207,175       207,893      
Total assets $2,633,713       $2,711,483      
Liabilities              
Interest bearing deposits:              
NOW, money market, and savings 1,125,253  8,988  1.61   933,699  4,139  0.89  
Time deposits 11,049  88  1.61   9,828  53  1.09  
Brokered deposits 93,903  1,203  2.58   109,058  947  1.75  
Total interest-bearing deposits 1,230,205  10,279  1.68   1,052,585  5,139  0.98  
Total borrowings 43,798  556  2.56   166,402  1,442  1.75  
Total long-term debt 49,740  1,647  6.68   49,571  1,652  6.72  
Total interest-bearing liabilities - continuing operations 1,323,743  12,482  1.90   1,268,558  8,233  1.31  
Interest-bearing liabilities - discontinued operations 290,515  1,502  1.04   461,331  1,564  0.68  
Total interest-bearing liabilities 1,614,258  13,984  1.75   1,729,889  9,797  1.14  
Demand deposits 571,669       496,239      
Demand deposits - discontinued operations 79,156       139,667      
Other liabilities 38,111       35,990      
Shareholders' equity 330,519       309,698      
Total liabilities and shareholders' equity $2,633,713       $2,711,483      
Net interest spread - continuing operations     2.98 %     2.94 %
Net interest income and net interest margin - continuing operations(2)   $40,501  3.73 %   $36,083  3.45 %
Net interest income and net interest margin(2)   $43,587  3.62 %   $43,732  3.52 %
               
Non-taxable equivalent net interest margin     3.61 %     3.51 %
               
(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(1)              
               
               
(dollars in thousands) June 30,
2019
 March 31,
2019
 December
31, 2018
 September
30, 2018
 June 30,
2018
 Linked
Quarter
Change
 Year Over
Year
Change
               
Loans held for sale              
Loans held for sale $  $1,530  $5,889  $1,886  $1,612  $(1,530) $(1,612)
Loans held for sale - discontinued operations   384,779  373,030  375,976  382,732  (384,779) (382,732)
Total loans held for sale $  $386,309  $378,919  $377,862  $384,344  $(386,309) $(384,344)
               
Loans held for investment              
Commercial loans:              
Commercial and industrial $701,566  $679,489  $645,374  $581,737  $546,497  $22,077  $155,069 
Commercial real estate:              
Multifamily 43,907  43,929  88,826  108,001  92,013  (22) (48,106)
Owner occupied 313,310  304,945  298,291  295,801  265,576  8,365  47,734 
Investment 409,629  394,087  407,711  409,145  386,072  15,542  23,557 
Construction and land:              
1-4 family residential construction 3,696  2,067  1,006    378  1,629  3,318 
Other construction, development, and land 195,260  171,818  155,226  147,114  134,764  23,442  60,496 
Mortgage warehouse loans 10,665  22,267  27,967  27,838  38,352  (11,602) (27,687)
Total commercial loans 1,678,033  1,618,602  1,624,401  1,569,636  1,463,652  59,431  214,381 
               
Residential:              
Residential mortgages 31,338  32,915  32,800  24,904  20,270  (1,577) 11,068 
Home equity 24,303  23,171  22,822  33,410  32,638  1,132  (8,335)
Total residential loans 55,641  56,086  55,622  58,314  52,908  (445) 2,733 
               
Consumer 34,618  35,203  25,851  26,825  25,531  (585) 9,087 
Other 24,126  26,663  24,712  10,579  12,409  (2,537) 11,717 
  1,792,418  1,736,554  1,730,586  1,665,354  1,554,500  55,864  237,918 
Less net deferred fees and other unearned income (2,678) (1,997) (2,513) (2,896) (2,921) (681) 243 
Total loans held for investment $1,789,740  $1,734,557  $1,728,073  $1,662,458  $1,551,579  $55,183  $238,161 
               
Total loans $1,789,740  $2,120,866  $2,106,992  $2,040,320  $1,935,923  $(331,126) $(146,183)
               
(1)Loans held for sale-discontinued operations and loans held for investment have been reported retrospectively for all periods prior to December 31, 2018.


ATLANTIC CAPITAL BANCSHARES, INC.     
Allowance for Loan Losses Activity and Credit Quality     
            
  2019 2018 
(dollars in thousands) Second
Quarter
 First 
Quarter
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
 
            
Balance at beginning of period $18,107  $17,851  $20,443  $19,583  $19,885  
Provision for loan losses 698  814  595  758  (173) 
Provision for loan losses (reversal of provision) - discontinued operations     (3,097)     
Provision for PCI loan losses     (93) 87    
Loans charged-off:           
Commercial and industrial (588) (549)       
Commercial real estate (47)       (50) 
Construction and land           
Residential mortgages   (9) (5)     
Home equity         (102) 
Consumer   (37) (3)   (10) 
Other           
Total loans charged-off (635) (595) (8)   (162) 
Recoveries on loans previously charged-off:           
Commercial and industrial   14        
Commercial real estate         28  
Construction and land   3        
Residential mortgages   7  4      
Home equity   1        
Consumer 16  12  7  15  5  
Other           
Total recoveries 16  37  11  15  33  
Net charge-offs $(619) $(558) $3  $15  $(129) 
Balance at period end (1) $18,186  $18,107  $17,851  $20,443  $19,583  
            
Loans           
Loans held for sale $  $1,530  $5,889  $1,886  $1,612  
Loans held for sale - discontinued operations   384,779  373,030  375,976  382,732  
Loans held for investment - continuing operations 1,789,740  1,734,557  1,728,073  1,662,458  1,551,579  
Total loans $1,789,740  $2,120,866  $2,106,992  $2,040,320  $1,935,923  
            
Non-performing loans - continuing operations (4) $6,352  $8,830  $3,252  $2,160  $1,697  
Non-performing loans - discontinued operations (4)   1,506  1,924  556  709  
Total non-performing loans 6,352  10,336  5,176  2,716  2,406  
Foreclosed properties (OREO) 971  971  874  968  1,288  
Total nonperforming assets $7,323  $11,307  $6,050  $3,684  $3,694  
            
Allowance for loan losses to loans held for investment (2) 1.02 %1.04 %1.03 %1.00 %1.01 %
Net charge-offs to average loans (3) 0.14  0.11      0.03  
            
Non-performing loans as a percentage of total loans - continuing operations (4) 0.35 %0.51 %0.19 %0.13 %0.11 %
Non-performing loans as a percentage of total loans - discontinued operations (4)   0.39  0.52  0.15  0.19  
Non-performing loans as a percentage of total loans (4) 0.35  0.49  0.25  0.13  0.12  
            
Non-performing assets as a percentage of total assets - continuing operations (4) 0.31 %0.34 %0.14 %0.11 %0.11 %
Non-performing assets as a percentage of total assets - discontinued operations (4)   0.05  0.07  0.02  0.03  
Non-performing assets as a percentage of total assets (4) 0.31  0.40  0.20  0.13  0.14  
            
(1)The allowance for loan losses has not been adjusted retrospectively in periods prior to December 31, 2018.  (2)The second quarter 2019, first quarter 2019 and fourth quarter 2018 ratios are calculated on a continuing operations basis.  Prior period ratios have not been retroactively adjusted for the impact of discontinued operations.  (3)Annualized.  (4)Excludes non-performing PCI loans.
 
 


ATLANTIC CAPITAL BANCSHARES, INC.        
Period End Deposits              
               
(dollars in thousands) June 30,
2019
 March 31,
2019
 December
31, 2018
 September
30, 2018
 June 30,
2018
 Linked
Quarter
Change
 Year Over
Year Change
               
DDA $569,693  $561,829  $602,252  $518,155  $464,282  $7,864  $105,411 
NOW 309,709  233,838  252,490  407,214  241,461  75,871  68,248 
Savings 1,090  896  725  698  951  194  139 
Money market 802,973  962,741  987,183  759,583  647,247  (159,768) 155,726 
Time 33,902  22,069  10,623  10,396  10,359  11,833  23,543 
Brokered 134,164  65,811  99,241  79,119  92,656  68,353  41,508 
Total deposits - continuing operations 1,851,531  1,847,184  1,952,514  1,775,165  1,456,956  4,347  394,575 
Deposits to be assumed - discontinued operations   593,264  585,429  604,659  609,631  (593,264) (609,631)
Total deposits $1,851,531  $2,440,448  $2,537,943  $2,379,824  $2,066,587  $(588,917) $(215,056)
               
Payments clients $301,413  $361,192  $397,608  $258,320  $251,748  $(59,779) $49,665 
               
Average Deposits              
               
  2019 2018 Linked
Quarter
Change
 Q2 2019 vs
Q2 2018
(dollars in thousands) Second
Quarter
 First 
Quarter
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
  
               
DDA $587,957  $575,453  $597,239  $561,355  $489,722  $12,504  $98,235 
NOW 314,601  276,212  280,449  314,759  287,283  38,389  27,318 
Savings 956  884  712  616  674  72  282 
Money market 859,680  847,254  798,017  697,578  645,034  12,426  214,646 
Time 32,358  12,847  10,117  10,406  9,855  19,511  22,503 
Brokered 106,524  81,141  93,558  67,937  100,425  25,383  6,099 
Total deposits - continuing operations 1,902,076  1,793,791  1,780,092  1,652,651  1,532,993  108,285  369,083 
Deposits to be assumed - discontinued operations 45,350  593,313  600,769  601,421  602,832  (547,963) (557,482)
Total deposits $1,947,426  $2,387,104  $2,380,861  $2,254,072  $2,135,825  $(439,678) $(188,399)
               
Payments clients $285,949  $295,059  $263,800  $227,029  $219,016  $(9,110) $66,933 
               
Noninterest bearing deposits as a percentage of average deposits - continuing operations 30.9% 32.1% 33.6% 34.0% 31.9%    
Cost of deposits - continuing operations 1.15% 1.09% 0.93% 0.76% 0.71%    
                    
                    


ATLANTIC CAPITAL BANCSHARES, INC.        
Non-GAAP Performance and Financial Measures Reconciliation        
                
                
  2019 2018  For the six months ended
June 30,
 
(in thousands, except share and per share data) Second
Quarter
 First
Quarter
 Fourth
Quarter
 Third
Quarter
 Second
Quarter
 2019 2018 
                
Taxable equivalent interest income reconciliation               
Interest income - GAAP $26,598  $26,197  $26,628  $24,017  $22,836  $52,795  $44,115  
Taxable equivalent adjustment 88  100  97  97  98  188  201  
Interest income - taxable equivalent $26,686  $26,297  $26,725  $24,114  $22,934  $52,983  $44,316  
                
Taxable equivalent net interest income reconciliation               
Net interest income - GAAP $19,889  $20,424  $21,068  $19,297  $18,444  $40,313  $35,882  
Taxable equivalent adjustment 88  100  97  97  98  188  201  
Net interest income - taxable equivalent $19,977  $20,524  $21,165  $19,394  $18,542  $40,501  $36,083  
                
Taxable equivalent net interest margin reconciliation - continuing operations               
Net interest margin - GAAP - continuing operations 3.60 %3.72 %3.64 %3.46 %3.49 %3.71 %3.43 %
Impact of taxable equivalent adjustment 0.01  0.02  0.02  0.02  0.02  0.02  0.02  
Net interest margin - taxable equivalent - continuing operations 3.61 %3.74 %3.66 %3.48 %3.51 %3.73 %3.45 %
                
Taxable equivalent net interest margin reconciliation               
Net interest margin - GAAP 3.54 %3.66 %3.60 %3.45 %3.52 %3.61 %3.51 %
Impact of taxable equivalent adjustment 0.02  0.02  0.02  0.02  0.02  0.01  0.01  
Net interest margin - taxable equivalent 3.56 %3.68 %3.62 %3.47 %3.54 %3.62 %3.52 %
                
Income before income taxes reconciliation               
Income before income taxes - GAAP $8,878  $8,151  $8,522  $8,835  $10,460  $17,029  $17,000  
Taxable equivalent adjustment 88  100  97  97  98  188  201  
Income before income taxes $8,966  $8,251  $8,619  $8,932  $10,558  $17,217  $17,201  
                
Income tax reconciliation               
Income tax expense - GAAP $1,869  $1,711  $1,039  $1,837  $2,082  $3,580  $3,431  
Taxable equivalent adjustment 88  100  97  97  98  188  201  
Income tax expense $1,957  $1,811  $1,136  $1,934  $2,180  $3,768  $3,632  
                
Tangible book value per common share reconciliation               
Total shareholders’ equity $336,715  $320,627  $323,653  $320,237  $316,770  $336,715  $316,770  
Intangible assets (19,925) (22,848) (23,095) (23,367) (23,662) (19,925) (23,662) 
Total tangible common equity $316,790  $297,779  $300,558  $296,870  $293,108  $316,790  $293,108  
Common shares outstanding 23,293,465  24,466,964  25,290,419  26,103,666  26,102,217  23,293,465  26,102,217  
Book value per common share - GAAP $14.46  $13.10  $12.80  $12.27  $12.14  $14.46  $12.14  
Tangible book value 13.60  12.17  11.88  11.37  11.23  13.60  11.23  
                
Tangible common equity to tangible assets reconciliation               
Total shareholders’ equity $336,715  $320,627  $323,653  $320,237  $316,770  $336,715  $316,770  
Intangible assets (19,925) (22,848) (23,095) (23,367) (23,662) (19,925) (23,662) 
Total tangible common equity $316,790  $297,779  $300,558  $296,870  $293,108  $316,790  $293,108  
                
Total assets $2,389,680  $2,855,887  $2,955,440  $2,882,721  $2,690,674  $2,389,680  $2,690,674  
Intangible assets (19,925) (22,848) (23,095) (23,367) (23,662) (19,925) (23,662) 
Total tangible assets $2,369,755  $2,833,039  $2,932,345  $2,859,354  $2,667,012  $2,369,755  $2,667,012  
Tangible common equity to tangible assets 13.37 %10.51 %10.25 %10.38 %10.99 %13.37 %10.99 %

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