Atlantic Capital Bancshares, Inc. Reports Fourth Quarter 2020 Results

Atlantic Capital Bancshares, Inc.
·20-min read

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