Atlantic Capital Bancshares, Inc. Reports Fourth Quarter 2020 Results

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			2020			2019

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	%		1.43	%		1.04	%		1.70	%		1.04	%

ATLANTIC CAPITAL BANCSHARES, INC.
Financial Information from Discontinued Operations

Components of Net Income from Discontinued Operations

											For the year ended
	2020								2019		December 31,
	Fourth		Third		Second		First		Fourth
(in thousands)	Quarter		Quarter		Quarter		Quarter		Quarter		2020		2019
Net interest income	$	—	$	—	$	—	$	—	$	—	$	—	$	3,086
Provision for credit losses		—		—		—		—		—		—		—
Net interest income after provision		—		—		—		—		—		—		3,086
Service charges		—		—		—		—		—		—		527
Mortgage income		—		—		—		—		—		—		288
Gain on sale of branches		—		—		—		—		—		—		34,475
Other income		—		—		—		—		—		—		(1	)
Total noninterest income		—		—		—		—		—		—		35,289
Salaries and employee benefits		—		—		—		—		—		—		2,757
Occupancy		—		—		—		—		—		—		410
Equipment and software		—		—		—		—		—		—		131
Amortization of intangibles		—		—		—		—		—		—		247
Communications and data processing		—		—		—		—		—		—		586
Divestiture expense		—		—		—		—		—		—		5,095
Other noninterest expense		—		—		—		—		—		—		459
Total noninterest expense		—		—		—		—		—		—		9,685
Net income before provision for income taxes		—		—		—		—		—		—		28,690
Provision for income taxes		—		—		—		—		—		—		6,993
Net income from discontinued operations	$	—	$	—	$	—	$	—	$	—	$	—	$	21,697