Atlantic Capital Bancshares, Inc. Reports Fourth Quarter 2020 Results

Thursday, 21. January 2021 22:10

ATLANTA, Jan. 21, 2021 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income for the quarter ended December 31, 2020 of $10.0 million, or $0.48 per diluted share, compared to $7.1 million, or $0.32 per diluted share, for the fourth quarter of 2019 and $8.6 million, or $0.40 per diluted share, for the third quarter of 2020.

“Atlantic Capital recorded another quarter of strong operating performance during the pandemic with double-digit percentage growth in loans, deposits, net interest income, and service charge income. While the course of economic recovery is uncertain, Atlantic Capital is well positioned with a fortress balance sheet and strong business development momentum for solid growth and strong performance in 2021,” remarked Douglas Williams, President and Chief Executive Officer.

Fourth Quarter Highlights(1)

  • Loans held for investment excluding Paycheck Protection Program (“PPP”) loans increased $100.7 million, or 21% annualized, compared to the third quarter of 2020 and increased $183.4 million, or 10%, compared to the fourth quarter of 2019.
  • Average deposits increased $402.2 million, or 65% annualized, compared to the third quarter of 2020 and increased $727.8 million, or 34%, compared to the fourth quarter of 2019.
  • Cost of deposits decreased to 0.16% from 0.19% in the third quarter of 2020 and 0.90% in the fourth quarter of 2019.
  • Tangible book value per share increased to $15.62 from $15.11 at September 30, 2020 and from $14.09 at December 31, 2019.
  • Annualized net charge-offs to average loans totaled 0.05% for the fourth quarter of 2020 and 0.11% for the full year 2020.
  • Non-performing assets to total assets were 0.13% at December 31, 2020 compared to 0.20% at September 30, 2020.
  • 823,000 shares repurchased in the fourth quarter of 2020 totaling $11.5 million at an average price of $13.98. As of December 31, 2020, approximately $7.3 million remained from the $25 million share repurchase program.

Income Statement

Taxable equivalent net interest income totaled $23.0 million for the fourth quarter of 2020, an increase of $2.3 million, or 11%, from the fourth quarter of 2019, and an increase of $926,000, or 17% annualized, from the third quarter of 2020. The fourth quarter of 2020 included $2.3 million in PPP loan income compared to $1.6 million in the third quarter of 2020.

Taxable equivalent net interest margin was 2.91% in the fourth quarter of 2020, compared to 3.38% in the fourth quarter of 2019 and 3.14% in the third quarter of 2020. The linked quarter decrease was primarily the result of the increase in deposits and corresponding increase in cash balances. The taxable equivalent net interest margin, excluding PPP loans, in the fourth quarter of 2020 was 2.81% compared to 3.18% in the third quarter of 2020.

The yield on loans in the fourth quarter of 2020 was 3.89%, a decrease of 106 basis points from the fourth quarter of 2019 and an increase of 7 basis points from the third quarter of 2020. Excluding the PPP loans, the fourth quarter of 2020 loan yield was 3.86% compared to 3.95% in the third quarter of 2020.

The cost of deposits in the fourth quarter of 2020 was 0.16%, a decrease of 74 basis points from the fourth quarter of 2019 and a decrease of 3 basis points from the third quarter of 2020. The cost of interest bearing deposits decreased 111 basis points to 0.25% from the fourth quarter of 2019, and decreased 3 basis points from the third quarter of 2020.

The provision for credit losses was $481,000 in the fourth quarter of 2020 compared to $787,000 in the fourth quarter of 2019 and $28,000 in the third quarter of 2020. The fourth quarter of 2020 provision for credit losses included a $225,000 provision for loan losses and a $257,000 provision for unfunded commitments. The higher provision for unfunded commitments in the fourth quarter of 2020 was driven by an increase in the level of unfunded commitments.

Noninterest income totaled $3.0 million in the fourth quarter of 2020 compared to $2.7 million in the fourth quarter of 2019 and $2.5 million in the third quarter of 2020. Service charge income in the fourth quarter of 2020 totaled $1.3 million, an increase of $343,000 compared to the fourth quarter of 2019, and an increase of $124,000 from the third quarter of 2020. The increase in service charge income was primarily due to growth in our payments and fintech businesses along with solid growth in our core treasury management business. SBA income totaled $1.0 million, an increase from $893,000 in the third quarter of 2020, primarily from higher SBA origination volume.

Noninterest expense totaled $13.2 million in the fourth quarter of 2020, compared to $13.4 million in the fourth quarter of 2019 and $13.7 million in the third quarter of 2020. The $413,000 linked quarter decrease in salaries and benefits was primarily driven by an increase in loan production salary cost deferrals due to higher loan originations during the fourth quarter and a decrease in incentive compensation. In addition, other noninterest expense decreased in the fourth quarter of 2020 primarily from the recovery of $290,000 of the $470,000 in losses on customer accounts incurred during the third quarter of 2020.

The 2020 effective tax rate from continuing operations was 17.0% compared to 21.3% for the full year of 2019, and was impacted by lower pretax earnings as well as increased non-taxable securities income from municipal bonds.

(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 13.

Balance Sheet

Total loans held for investment were $2.25 billion at December 31, 2020, an increase of $375.5 million, or 20.0%, from December 31, 2019 and an increase of $61.0 million, or 11% annualized, from September 30, 2020. PPP loans totaled $192.2 million at December 31, 2020, a decrease of $40.0 million compared to September 30, 2020, due to the forgiveness of PPP loans during the fourth quarter. In addition to the strong funded loan growth across most of our lines of business, total unfunded commitments increased $50.0 million, on a linked quarter basis, primarily due to strong growth in our commercial real estate business.

The allowance for credit losses was 1.55% of total loans held for investment at December 31, 2020, compared to 1.59% at September 30, 2020. Excluding the impact of PPP loans, the allowance for credit losses at December 31, 2020 was 1.70% compared to 1.78% at September 30, 2020. Annualized net charge-offs were 0.05% for the fourth quarter of 2020 and 0.11% for the full year 2020. Non-performing assets totaled $4.9 million, or 0.13% of total assets, as of December 31, 2020, compared to $6.0 million, or 0.20% of total assets, as of September 30, 2020.

Total average deposits were $2.87 billion for the fourth quarter of 2020, an increase of $727.8 million, or 33.9%, from the fourth quarter of 2019 and an increase of $402.2 million, or 65.1% annualized, from the third quarter of 2020. In addition to typical seasonal increases in fourth quarter deposits, we continued to see strong growth in core deposits across most of our lines of business. Noninterest bearing deposits were 34.0% of total average deposits in the fourth quarter of 2020, compared to 33.5% in the fourth quarter of 2019 and 34.6% in the third quarter of 2020.

Tangible common equity to tangible assets decreased to 8.9% at December 31, 2020, compared to 11.0% at September 30, 2020, due to the impact from the fourth quarter growth in deposits and its corresponding increase on the size of the year-end balance. Cash and cash equivalents were $653.4 million and total assets were $3.62 billion at December 31, 2020 compared to cash and cash equivalents of $114.0 million and total assets of $2.92 billion at September 30, 2020.

Earnings Conference Call

Atlantic Capital will host a conference call at 1:00 p.m. EST on Friday, January 22, 2021, to discuss the financial results for the quarter ended December 31, 2020. 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 assets; (ix) tangible common equity; (x) tangible book value per common share, and (xi) 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, as supplemented by our Current Report on Form 8-K filed on April 23, 2020, 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 $3.6 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
                       
             For the year ended  
  2020 2019 December 31,  
(in thousands, except share and per share data; Fourth Third Second First Fourth       
taxable equivalent) Quarter Quarter Quarter Quarter Quarter 2020 2019 
INCOME SUMMARY (1)                      
Interest income - taxable equivalent (2) $25,288 $24,578 $24,151 $26,246 $26,699 $100,474 $106,306 
Interest expense  2,299  2,515  2,166  5,043  5,965  12,023  24,983 
Net interest income - taxable equivalent  22,989  22,063  21,985  21,203  20,734  88,451  81,323 
Provision for credit losses  481  28  8,863  8,074  787  17,446  2,712 
Net interest income after provision for credit losses  22,508  22,035  13,122  13,129  19,947  71,005  78,611 
Noninterest income  3,016  2,504  2,343  2,422  2,679  10,285  10,725 
Noninterest expense  13,164  13,713  12,904  12,877  13,382  52,659  53,108 
Income from continuing operations before income taxes  12,360  10,826  2,561  2,674  9,244  28,631  36,228 
Income tax expense  2,410  2,208  712  550  2,104  6,091  8,070 
Net income from continuing operations(2)(3)  9,950  8,618  1,849  2,124  7,140  22,540  28,158 
Income from discontinued operations, net of tax              21,697 
Net income $9,950 $8,618 $1,849 $2,124 $7,140 $22,540 $49,855 
                       
PER SHARE DATA                      
Diluted earnings per share - continuing operations $0.48 $0.40 $0.09 $0.10 $0.32 $1.05 $1.20 
Diluted earnings per share - discontinued operations              0.92 
Diluted earnings per share  0.48  0.40  0.09  0.10  0.32  1.05  2.12 
Book value per share  16.60  16.05  15.64  15.47  15.01  16.60  15.01 
Tangible book value per common share (3)  15.62  15.11  14.72  14.54  14.09  15.62  14.09 
                       
PERFORMANCE MEASURES                      
Return on average equity  11.68% 10.05% 2.20% 2.56% 8.65% 6.67% 15.10%
Return on average assets  1.19  1.15  0.25  0.32  1.08  0.76  1.93 
Taxable equivalent net interest margin - continuing operations  2.91  3.14  3.23  3.41  3.38  3.16  3.58 
Taxable equivalent net interest margin excluding PPP loans 2.81  3.18  3.35  3.41  3.38  3.18  3.58 
Efficiency ratio - continuing operations  51.30  56.61  53.82  55.03  57.57  54.14  57.99 
Average loans to average deposits  76.81  88.65  88.46  83.84  86.54  84.11  98.02 
CAPITAL                      
Average equity to average assets  10.18% 11.45% 11.53% 12.41% 12.47% 11.33% 12.77%
Tangible common equity to tangible assets  8.86  11.03  11.01  11.57  10.61  8.86  10.61 
Leverage ratio  8.9(4) 9.9  9.9  10.7  11.0  8.9(4) 11.0 
Total risk based capital ratio  16.1(4) 16.9  14.8  14.9  15.0  16.1(4) 15.0 
                       
SHARES OUTSTANDING                      
Number of common shares outstanding - basic  20,394,912  21,202,783  21,477,631  21,479,986  21,751,026  20,394,912  21,751,026 
Number of common shares outstanding - diluted  20,492,542  21,298,098  21,569,050  21,675,934  21,974,959  20,492,542  21,974,959 
Average number of common shares - basic  20,711,089  21,500,735  21,472,462  21,689,038  21,876,487  21,342,086  23,315,562 
Average number of common shares - diluted  20,795,332  21,543,805  21,535,040  21,842,175  22,053,907  21,427,722  23,478,001 
                       
ASSET QUALITY                      
Allowance for credit losses to loans held for investment  1.55% 1.59% 1.61% 1.43% 1.04% 1.55% 0.99%
Net charge-offs to average loans (5)  0.05  0.06  0.29  0.04  0.07  0.11  0.11 
Non-performing assets to total assets  0.13  0.20  0.24  0.27  0.26  0.13  0.26 
                       
AVERAGE BALANCES                      
Total loans - continuing operations $2,207,956 $2,191,669 $2,131,847 $1,890,184 $1,857,736 $2,105,930 $1,769,613 
Investment securities  491,134  453,382  462,850  417,971  389,667  456,422  372,556 
Total assets  3,328,719  2,977,444  2,932,716  2,686,266  2,626,388  2,982,222  2,586,428 
Deposits - continuing operations  2,874,402  2,472,218  2,409,958  2,254,505  2,146,626  2,503,703  1,805,300 
Shareholders' equity  338,948  341,017  338,027  333,480  327,543  337,879  330,216 
                       
AT PERIOD END                      
Loans and loans held for sale $2,249,036 $2,188,894 $2,185,847 $1,932,909 $1,873,524 $2,249,036 $1,873,894 
Investment securities  535,579  446,706  457,749  466,405  399,433  535,579  399,433 
Total assets  3,615,617  2,923,977  2,890,622  2,719,658  2,910,379  3,615,617  2,910,379 
Deposits  3,161,508  2,468,722  2,407,631  2,225,119  2,499,046  3,161,508  2,499,046 
Shareholders’ equity  338,586  340,309  335,980  332,300  326,495  338,586  326,495 
                       
(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.
(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 December 31, 2020. 
(5)Annualized. 


          
ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
          
  December 31,  September 30,  December 31, 
(in thousands, except share data) 2020 2020 2019
ASSETS         
Cash and due from banks $16,865  $22,715  $45,249 
Interest-bearing deposits in banks  636,537   91,243   421,079 
Cash and cash equivalents  653,402   113,958   466,328 
Investment securities available for sale  335,423   260,884   282,461 
Investment securities held to maturity, net of allowance for credit losses of $14 and $15 at December 31, 2020 and September 30, 2020, respectively  200,156   185,822   116,972 
Other investments  25,892   26,315   27,556 
Loans held for sale     859   370 
Loans held for investment  2,249,036   2,188,035   1,873,524 
Less: allowance for loan losses  (31,818)  (31,894)  (18,535)
Loans held for investment, net  2,217,218   2,156,141   1,854,989 
Premises and equipment, net  21,589   22,558   22,536 
Bank owned life insurance  72,856   67,489   66,421 
Goodwill  19,925   19,925   19,925 
Other intangibles, net  2,731   2,685   3,027 
Other real estate owned  16   563   278 
Other assets  66,409   66,778   49,516 
Total assets $3,615,617  $2,923,977  $2,910,379 
          
LIABILITIES AND SHAREHOLDERS’ EQUITY         
Deposits:         
Noninterest-bearing demand $1,033,765  $843,656  $824,646 
Interest-bearing checking  760,638   387,858   373,727 
Savings  625   568   1,219 
Money market  1,030,753   945,834   1,173,218 
Time  241,328   196,343   44,389 
Brokered deposits  94,399   94,463   81,847 
Total deposits  3,161,508   2,468,722   2,499,046 
Long-term debt  73,807   73,814   49,873 
Other liabilities  41,716   41,132   34,965 
Total liabilities  3,277,031   2,583,668   2,583,884 
          
SHAREHOLDERS’ EQUITY         
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2020, September 30, 2020 and December 31, 2019         
Common stock, no par value; 100,000,000 shares authorized; 20,394,912, 21,202,783, and 21,751,026 shares issued and outstanding as of December 31, 2020, September 30, 2020 and December 31, 2019, respectively  209,942   220,643   230,265 
Retained earnings  114,137   104,188   91,669 
Accumulated other comprehensive income  14,507   15,478   4,561 
Total shareholders’ equity  338,586   340,309   326,495 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $3,615,617  $2,923,977  $2,910,379 
 


ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Statements of Income (unaudited)
                      
(in thousands, except share and per share data) Three months ended  Year ended
  December 31,  September 30,  June 30,  March 31,  December 31,  December 31,  December 31, 
  2020
 2020
 2020  2020 2019 2020
 2019
INTEREST INCOME                     
Loans, including fees $21,609  $21,049  $20,496  $22,426 $23,175 $85,580  $93,022 
Investment securities  3,000   2,910   3,041   2,732  2,413  11,683   9,559 
Interest and dividends on other interest‑earning assets  334   274   260   865  944  1,733   3,266 
Total interest income  24,943   24,233   23,797   26,023  26,532  98,996   105,847 
INTEREST EXPENSE                     
Interest on deposits  1,188   1,151   1,299   4,182  4,890  7,820   20,392 
Interest on Federal Home Loan Bank advances     16   38     157  54   817 
Interest on federal funds purchased and securities sold under agreements to repurchase     3   6   32  94  41   479 
Interest on long-term debt  1,111   1,345   823   829  824  4,108   3,295 
Total interest expense  2,299   2,515   2,166   5,043  5,965  12,023   24,983 
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES  22,644   21,718   21,631   20,980  20,567  86,973   80,864 
Provision for credit losses  481   28   8,863   8,074  787  17,446   2,712 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  22,163   21,690   12,768   12,906  19,780  69,527   78,152 
NONINTEREST INCOME                     
Service charges  1,341   1,217   1,081   1,232  998  4,871   3,587 
(Losses) gains on sale of securities  (23)            (23)  907 
(Losses) gains on sale of other assets  (6)  (145)     5    (146)  127 
Derivatives income (loss)  11   10   (10)  246  315  257   (322)
Bank owned life insurance  368   363   367   362  375  1,460   1,546 
SBA lending activities  1,015   893   782   414  846  3,104   4,178 
Other noninterest income  310   166   123   163  145  762   702 
Total noninterest income  3,016   2,504   2,343   2,422  2,679  10,285   10,725 
NONINTEREST EXPENSE                     
Salaries and employee benefits  8,437   8,850   8,466   8,476  8,500  34,229   34,537 
Occupancy  767   739   883   794  838  3,183   2,888 
Equipment and software  969   826   763   779  769  3,337   3,103 
Professional services  686   562   792   705  577  2,745   2,908 
Communications and data processing  789   757   670   897  1,066  3,113   3,199 
Marketing and business development  144   141   79   153  143  517   845 
Travel, meals and entertainment  14   39   34   140  175  227   679 
FDIC premiums  241   213   175       629   217 
Other noninterest expense  1,117   1,586   1,042   933  1,314  4,679   4,732 
Total noninterest expense  13,164   13,713   12,904   12,877  13,382  52,659   53,108 
                      
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES  12,015   10,481   2,207   2,451  9,077  27,153   35,769 
Provision for income taxes  2,065   1,863   358   327  1,937  4,613   7,611 
NET INCOME FROM CONTINUING OPERATIONS  9,950   8,618   1,849   2,124  7,140  22,540   28,158 
DISCONTINUED OPERATIONS                     
Income from discontinued operations $  $  $  $ $ $  $28,690 
Provision for income taxes                  6,993 
Net income from discontinued operations                  21,697 
NET INCOME $9,950  $8,618  $1,849  $2,124 $7,140 $22,540  $49,855 
                      
Net Income per Common Share - Basic                     
Net income per common share - continuing operations $0.48  $0.40  $0.09  $0.10 $0.33 $1.06  $1.21 
Net income per common share - discontinued operations                  0.93 
Net Income per Common Share - Basic  0.48   0.40   0.09   0.10  0.33  1.06   2.14 
Net Income per Common Share - Diluted                     
Net income per common share - continuing operations $0.48  $0.40  $0.09  $0.10 $0.32 $1.05  $1.20 
Net income per common share - discontinued operations                  0.92 
Net Income per Common Share - Diluted  0.48   0.40   0.09   0.10  0.32  1.05   2.12 
                      
Weighted average shares - basic  20,711,089   21,500,735   21,472,462   21,689,038  21,876,487  21,342,086   23,315,562 
Weighted average shares - diluted  20,795,332   21,543,805   21,535,040   21,842,175  22,053,907  21,427,722   23,478,001 



 
ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
    
  Three months ended  
  December 31, 2020  September 30, 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 $435,939 $141 0.13%$136,459 $65 0.19%
Investment securities:                  
Taxable investment securities  275,872  1,587 2.29   237,655  1,467 2.46 
Non-taxable investment securities (1)  215,262  1,758 3.25   215,727  1,788 3.30 
Total investment securities  491,134  3,345 2.71   453,382  3,255 2.86 
Loans  2,207,956  21,609 3.89   2,191,669  21,049 3.82 
FHLB and FRB stock  12,699  193 6.05   14,484  209 5.74 
Total interest-earning assets  3,147,728  25,288 3.20   2,795,994  24,578 3.50 
Non-earning assets  180,991        181,450      
Total assets $3,328,719       $2,977,444      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,585,928  1,043 0.26   1,383,382  1,006 0.29 
Time deposits  221,792  72 0.13   166,019  86 0.21 
Brokered deposits  89,673  73 0.32   68,102  59 0.34 
Total interest-bearing deposits  1,897,393  1,188 0.25   1,617,503  1,151 0.28 
Total borrowings        40,793  19 0.19 
Total long-term debt  73,811  1,111 5.99   82,708  1,345 6.47 
Total interest-bearing liabilities  1,971,204  2,299 0.46   1,741,004  2,515 0.57 
Demand deposits  977,009        854,715      
Other liabilities  41,558        40,708      
Shareholders’ equity  338,948        341,017      
Total liabilities and shareholders’ equity $3,328,719       $2,977,444      
Net interest spread       2.73%      2.92%
Net interest income and net interest margin (2)    $22,989 2.91%   $22,063 3.14%
                   
Non-taxable equivalent net interest margin       2.86%      3.09%
                   
 
(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  
  December 31, 2020  December 31, 2019 
    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 $435,939 $141 0.13%$174,589 $733 1.67%
Investment securities:                  
Taxable investment securities  275,872  1,587 2.29   242,175  1,570 2.57 
Non-taxable investment securities (1)  215,262  1,758 3.25   147,492  1,010 2.72 
Total investment securities  491,134  3,345 2.71   389,667  2,580 2.63 
Loans  2,207,956  21,609 3.89   1,857,736  23,175 4.95 
FHLB and FRB stock  12,699  193 6.05   14,106  211 5.93 
Total interest-earning assets  3,147,728  25,288 3.20   2,436,098  26,699 4.35 
Non-earning assets  180,991        190,290      
Total assets $3,328,719       $2,626,388      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,585,928  1,043 0.26   1,328,184  4,525 1.35 
Time deposits  221,792  72 0.13   37,388  52 0.55 
Brokered deposits  89,673  73 0.32   62,757  313 1.98 
Total interest-bearing deposits  1,897,393  1,188 0.25   1,428,329  4,890 1.36 
Total borrowings        54,706  252 1.83 
Total long-term debt  73,811  1,111 5.99   49,845  823 6.55 
Total interest-bearing liabilities  1,971,204  2,299 0.46   1,532,880  5,965 1.54 
Demand deposits  977,009        718,297      
Other liabilities  41,558        47,668      
Shareholders’ equity  338,948        327,543      
Total liabilities and shareholders’ equity $3,328,719       $2,626,388      
Net interest spread       2.73%      2.80%
Net interest income and net interest margin (2)    $22,989 2.91%   $20,734 3.38%
                   
Non-taxable equivalent net interest margin       2.86%      3.35%
                   
 
(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 
    
  Year ended  
  December 31, 2020  December 31, 2019 
    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 $220,225 $897 0.41%$110,543 $2,209 2.00%
Other short-term investments  27      3,875  118 3.05 
Investment securities:                  
Taxable investment securities  253,799  6,316 2.49   274,189  7,188 2.62 
Non-taxable investment securities (1)  202,623  6,845 3.38   98,367  2,830 2.88 
Total investment securities  456,422  13,161 2.88   372,556  10,018 2.69 
Loans - continuing operations  2,105,930  85,580 4.06   1,769,613  93,022 5.26 
FHLB and FRB stock  14,172  836 5.90   14,156  939 6.63 
Total interest-earning assets - continuing operations  2,796,776  100,474 3.59   2,270,743  106,306 4.68 
Loans held for sale - discontinued operations        116,725  4,588 3.93 
Total interest-earning assets  2,796,776  100,474 3.59   2,387,468  110,894 4.64 
Non-earning assets  185,446        198,960      
Total assets $2,982,222       $2,586,428      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,444,699  6,931 0.48   1,107,765  18,155 1.64 
Time deposits  135,309  269 0.20   23,072  191 0.83 
Brokered deposits  83,274  620 0.74   84,601  2,046 2.42 
Total interest-bearing deposits  1,663,282  7,820 0.47   1,215,438  20,392 1.68 
Total borrowings  37,473  95 0.25   54,931  1,297 2.36 
Total long-term debt  64,162  4,108 6.40   49,782  3,294 6.62 
Total interest-bearing liabilities - continuing operations  1,764,917  12,023 0.68   1,320,151  24,983 1.89 
Interest-bearing liabilities - discontinued operations        144,064  1,502 1.04 
Total interest-bearing liabilities  1,764,917  12,023 0.68   1,464,215  26,485 1.81 
Demand deposits  840,421        589,862      
Demand deposits - discontinued operations          39,253      
Other liabilities  39,005        162,882      
Shareholders’ equity  337,879        330,216      
Total liabilities and shareholders’ equity $2,982,222       $2,586,428      
Net interest spread - continuing operations       2.91%      2.79%
Net interest income and net interest margin - continuing operations (2)   $88,451 3.16%   $81,323 3.58%
Net interest income and net interest margin (2)    $88,451 3.16%   $84,409 3.54%
                   
Non-taxable equivalent net interest margin       3.11%      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.      
Period End Loans      
                           
                      Linked Year Over
  December 31,  September 30,  June 30,  March 31,  December 31,  Quarter Year
(dollars in thousands) 2020 2020 2020 2020 2019 Change Change
Loans held for sale                     
Loans held for sale $  $859  $1,153  $  $370  $(859) $(370)
Total loans held for sale $  $859  $1,153  $  $370  $(859) $(370)
                      
Loans held for investment                     
Commercial loans:                     
Commercial and industrial - other $760,645  $712,567  $739,769  $760,062  $705,115  $48,078  $55,530 
Commercial and industrial - PPP  192,160   231,834   234,049         (39,674)  192,160 
Commercial real estate:                     
Multifamily  66,262   58,336   58,909   73,654   98,378   7,926   (32,116)
Owner occupied  373,689   364,170   366,847   359,026   357,912   9,519   15,777 
Investment  469,150   458,279   474,565   477,451   460,038   10,871   9,112 
Construction and land:                     
1‑4 family residential construction  1,171      11   2,706   4,009   1,171   (2,838)
Other construction, development, and land  144,424   139,836   128,980   124,116   123,531   4,588   20,893 
Mortgage warehouse loans              13,941      (13,941)
Total commercial loans  2,007,501   1,965,022   2,003,130   1,797,015   1,762,924   42,479   244,577 
                      
Residential:                     
Residential mortgages  33,783   29,460   32,327   31,761   31,315   4,323   2,468 
Home equity  25,443   24,528   23,689   23,479   25,002   915   441 
Total residential loans  59,226   53,988   56,016   55,240   56,317   5,238   2,909 
                      
Consumer  176,066   154,916   113,149   58,164   37,765   21,150   138,301 
Other  13,897   22,777   22,160   25,488   19,552   (8,880)  (5,655)
   2,256,690   2,196,703   2,194,455   1,935,907   1,876,558   59,987   380,132 
Less net deferred fees and other unearned income  (7,654)  (8,668)  (9,761)  (2,998)  (3,034)  1,014   (4,620)
Total loans held for investment $2,249,036  $2,188,035  $2,184,694  $1,932,909  $1,873,524  $61,001  $375,512 
                      
Total loans $2,249,036  $2,188,894  $2,185,847  $1,932,909  $1,873,894  $60,142  $375,142 
                      
Total unfunded commitments $813,757  $764,247  $749,321  $689,620  $743,958  $49,510  $69,799 
      


ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Credit Losses Activity and Credit Quality
                
  2020 2019
  Fourth Third Second First Fourth
(dollars in thousands) Quarter Quarter Quarter Quarter Quarter
Allowance for loan losses               
Balance at beginning of period $31,894  $31,605  $24,896  $18,535  $18,080 
Adoption of ASU 2016-13           (854)   
Provision for loan losses  225   636   8,222   7,409   787 
Loans charged-off:               
Commercial and industrial  (401)  (404)  (1,479)  (18)  (344)
Commercial real estate           (78)   
Construction and land               
Residential mortgages        (36)      
Home equity           (125)   
Consumer               
Other               
Total loans charged-off  (401)  (404)  (1,515)  (221)  (344)
Recoveries on loans previously charged-off:               
Commercial and industrial  37   56   1      5 
Commercial real estate  44         18    
Construction and land  18             
Residential mortgages           1   7 
Home equity               
Consumer  1   1   1   8    
Other               
Total recoveries  100   57   2   27   12 
Net charge-offs $(301) $(347) $(1,513) $(194) $(332)
Balance at period end $31,818  $31,894  $31,605  $24,896  $18,535 
                
Allowance for unfunded commitments               
Balance at beginning of period $2,871  $3,480  $2,838  $892  $836 
Adoption of ASU 2016-13           1,275    
Provision for unfunded commitments  257   (609)  642   671   56 
Balance at period end $3,128  $2,871  $3,480  $2,838  $892 
                
Total allowance for credit losses - loans and unfunded commitments $34,946  $34,765  $35,085  $27,734  $19,427 
                
Provision for credit losses under CECL               
Provision for loan losses  225   636   8,222   7,409   787 
Provision for securities held to maturity credit losses  (1)  1   (1)  (6)   
Provision for unfunded commitments(1)  257   (609)  642   671    
Total provision for credit losses $481  $28  $8,863  $8,074  $787 
                
Non-performing loans $4,862  $5,421  $6,265  $6,515  $7,293 
Foreclosed properties (OREO)  16   563   779   779   278 
Total nonperforming assets $4,878  $5,984  $7,044  $7,294  $7,571 
                
Allowance for loan losses to loans held for investment  1.41%  1.46%  1.45%  1.29%  0.99%
Allowance for credit losses to loans held for investment  1.55%  1.59%  1.61%  1.43%  1.04%
Allowance for credit losses to loans held for investment excluding PPP loans  1.70% 1.78% 1.80% 1.43% 1.04%
Net charge-offs to average loans (2)  0.05   0.06   0.29   0.04   0.07 
Non-performing loans as a percentage of total loans  0.22%  0.25%  0.29%  0.34%  0.39%
Non-performing assets as a percentage of total assets  0.13%  0.20%  0.24%  0.27%  0.26%
                
(1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $56 for the fourth quarter of 2019.
(2)Annualized.               
                


ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits  
                       
                 Linked    
  December 31,  September 30,  June 30,  March 31,  December 31,  Quarter Year Over
(dollars in thousands) 2020 2020 2020 2020 2019 Change Year Change
DDA $1,033,765 $843,656 $883,662 $712,919 $824,646 $190,109  $209,119 
NOW  760,638  387,858  449,737  368,463  373,727  372,780   386,911 
Savings  625  568  583  567  1,219  57   (594)
Money market  1,030,753  945,834  879,863  982,109  1,173,218  84,919   (142,465)
Time  241,328  196,343  131,353  66,793  44,389  44,985   196,939 
Brokered  94,399  94,463  62,433  94,268  81,847  (64)  12,552 
Total deposits $3,161,508 $2,468,722 $2,407,631 $2,225,119 $2,499,046 $692,786  $662,462 
                      
                      
Average Deposits                     
                      
  2020 2019 Linked  
  Fourth Third Second First Fourth Quarter Q4 2020 vs
(dollars in thousands) Quarter Quarter Quarter Quarter Quarter Change Q4 2019
DDA $977,009 $854,715 $815,299 $713,001 $718,298 $122,294  $258,711 
NOW  558,967  440,734  462,051  382,178  320,637  118,233   238,330 
Savings  614  586  574  650  1,098  28   (484)
Money market  1,026,347  942,062  952,444  1,010,713  1,006,449  84,285   19,898 
Time  221,792  166,019  96,362  55,775  37,388  55,773   184,404 
Brokered  89,673  68,102  83,228  92,188  62,757  21,571   26,916 
Total deposits $2,874,402 $2,472,218 $2,409,958 $2,254,505 $2,146,627 $402,184  $727,775 
                      
Noninterest bearing deposits as a percentage of average deposits  34.0% 34.6% 33.8% 31.6% 33.5%     
Cost of interest-bearing deposits  0.25%0.28%0.33%1.09%1.36%    
Cost of deposits  0.16% 0.19% 0.22% 0.75% 0.90%     
                      


ATLANTIC CAPITAL BANCSHARES, INC.                  
Non-GAAP Performance and Financial Measures Reconciliation               
                      
                 For the year
  2020 2019 ended December 31, 
  Fourth Third Second First Fourth      
(in thousands, except share and per share data) Quarter Quarter Quarter Quarter Quarter 20202019 
                          
Taxable equivalent interest income reconciliation                         
Interest income - GAAP $24,943  $24,233  $23,797  $26,023  $26,532  $98,996  $105,847 
Taxable equivalent adjustment  345   345   354   223   167   1,478   459 
Interest income - taxable equivalent $25,288  $24,578  $24,151  $26,246  $26,699  $100,474  $106,306 
                          
Taxable equivalent net interest income reconciliation - continuing operations                         
Net interest income - GAAP $22,644  $21,718  $21,631  $20,980  $20,567  $86,973  $80,864 
Taxable equivalent adjustment  345   345   354   223   167   1,478   459 
Net interest income - taxable equivalent - continuing operations $22,989  $22,063  $21,985  $21,203  $20,734  $88,451  $81,323 
                          
Loan yield excluding PPP loans reconciliation                         
Loan yield - GAAP  3.89%  3.82%  3.87%  4.77%  4.95%  4.06%  5.26%
Impact of PPP loans  (0.03)  0.13   0.22         0.10    
Loan yield excluding PPP loans  3.86   3.95%  4.09%  4.77%  4.95%  4.16%  5.26%
                          
Taxable equivalent net interest margin reconciliation - continuing operations                         
Net interest margin - GAAP - continuing operations  2.86%  3.09%  3.17%  3.38%  3.35%  3.11%  3.52%
Impact of taxable equivalent adjustment  0.05   0.05   0.06   0.03   0.03   0.05   0.06 
Net interest margin - taxable equivalent - continuing operations  2.91%  3.14%  3.23%  3.41%  3.38%  3.16%  3.58%
                          
Taxable equivalent net interest margin reconciliation                         
Net interest margin - GAAP  2.86%  3.09%  3.17%  3.38%  3.35%  3.11%  3.52%
Impact of taxable equivalent adjustment  0.05   0.05   0.06   0.03   0.03   0.05   0.02 
Net interest margin - taxable equivalent  2.91%  3.14%  3.23%  3.41%  3.38%  3.16%  3.54%
                          
Taxable equivalent net interest margin excluding PPP loans reconciliation                         
Net interest margin - GAAP  2.86%  3.09%  3.17%  3.38%  3.35%  3.11%  3.52%
Impact of PPP loans  (0.05)  0.09   0.18         0.07    
Net interest margin - taxable equivalent excluding PPP loans  2.81%  3.18%  3.35%  3.38%  3.35%  3.18%  3.52%
                          
Taxable equivalent income before income taxes reconciliation                         
Income before income taxes - GAAP $12,015  $10,481  $2,207  $2,451  $9,077  $27,153  $35,769 
Taxable equivalent adjustment  345   345   354   223   167   1,478   459 
Income before income taxes $12,360  $10,826  $2,561  $2,674  $9,244  $28,631  $36,228 
                          
Taxable equivalent income tax expense reconciliation                         
Income tax expense - GAAP $2,065  $1,863  $358  $327  $1,937  $4,613  $7,611 
Taxable equivalent adjustment  345   345   354   223   167   1,478   459 
Income tax expense $2,410  $2,208  $712  $550  $2,104  $6,091  $8,070 
                          
Tangible book value per common share reconciliation                         
Total shareholders’ equity $338,586  $340,309  $335,980  $332,300  $326,495  $338,586  $326,495 
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)
Total tangible common equity $318,661  $320,384  $316,055  $312,375  $306,570  $318,661  $306,570 
Common shares outstanding  20,394,912   21,202,783   21,477,631   21,479,986   21,751,026   20,394,912   21,751,026 
Book value per common share - GAAP $16.60  $16.05  $15.64  $15.47  $15.01  $16.60  $15.01 
Tangible book value  15.62   15.11   14.72   14.54   14.09   15.62   14.09 
                          
Tangible common equity to tangible assets reconciliation                         
Total shareholders’ equity $338,586  $340,309  $335,980  $332,300  $326,495  $338,586  $326,495 
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)
Total tangible common equity $318,661  $320,384  $316,055  $312,375  $306,570  $318,661  $306,570 
                          
Total assets $3,615,617  $2,923,977  $2,890,622  $2,719,658  $2,910,379  $3,615,617  $2,910,379 
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)
Total tangible assets $3,595,692  $2,904,052  $2,870,697  $2,699,733  $2,890,454  $3,595,692  $2,890,454 
Tangible common equity to tangible assets  8.86%  11.03%  11.01%  11.57%  10.61%  8.86%  10.61%
                          
Allowance for credit losses to loans held for investment reconciliation                         
Total loans held for investment $2,249,036  $2,188,035  $2,184,694  $1,932,909  $1,873,524  $2,249,036  $1,873,524 
PPP loans  (192,160)  (231,834)  (234,049)        (192,160)   
Total loans held for investment excluding PPP loans $2,056,876  $1,956,201  $1,950,645  $1,932,909  $1,873,524  $2,056,876  $1,873,524 
                          
Allowance for credit losses to loans held for investment  1.55%  1.59%  1.61%  1.43%  1.04%  1.55%  1.04%
Allowance for credit losses to loans held for investment excluding PPP loans  1.70%  1.78%  1.80%