Exhibit 99.1
(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. Exhibit 99.1 PRESS RELEASE ATLANTIC CAPITAL BANCSHARES, INC. REPORTS THIRD QUARTER 2020 RESULTS Atlanta, GA – October 22, 2020 – Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income from continuing operations for the quarter ended September 30, 2020 of $8.6 million, or $0.40 per diluted share, compared to $8.2 million, or $0.33 per diluted share, for the third quarter of 2019 and $1.8 million, or $0.09 per diluted share, for the second quarter of 2020. “We reported another quarter of solid operating results and strong year over year growth in pre-provision, pre-tax net revenue, while continuing to strengthen our fortress balance sheet with the issuance of $75 million in subordinated debt. With confidence in our credit quality, capital strength and earnings outlook, we also resumed our share repurchase program,” remarked Douglas Williams, President and Chief Executive Officer. Third Quarter Highlights(1) Capital ratios remained strong, with a tangible common equity to tangible assets ratio of 11.0% and a total risk-based capital ratio of 16.9%. Tangible book value per share increased to $15.11 from $14.72 at June 30, 2020 and from $14.09 at December 31, 2019. Average deposits from continuing operations increased $62.3 million, or 10.3% annualized, compared to the second quarter of 2020 and increased $522.6 million, or 26.8%, compared to the third quarter of 2019. Cost of deposits decreased to 0.19% from 0.22% in the second quarter of 2020. Annualized net charge-offs to average loans totaled 0.06% for the third quarter of 2020 and 0.13% for the full year 2020. Non-performing assets to total assets were 0.20% at September 30, 2020 compared to 0.24% at June 30, 2020. We repurchased 401,000 shares in the third quarter of 2020 totaling $4.6 million. We issued $75 million in subordinated notes in the third quarter of 2020, and called the existing $50 million of subordinated notes on September 30, 2020. Income Statement Taxable equivalent net interest income from continuing operations totaled $22.1 million for the third quarter of 2020, an increase of $2.0 million, or 9.8%, from the third quarter of 2019, and an increase of $78,000, or 1.4% annualized, from the second quarter of 2020. The third quarter of 2020 included $1.6 million in Paycheck Protection Program (“PPP”) loan income compared to $696,000 in the second quarter of 2020. The third quarter of 2020 also included a $521,000 increase in interest expense due to the $75 million subordinated debt issuance. Taxable equivalent net interest margin from continuing operations was 3.14% in the third quarter of 2020, compared to 3.52% in the third quarter of 2019 and 3.23% in the second quarter of 2020. The linked quarter decrease was primarily the result of the additional interest expense due to the subordinated debt issuance along with a decrease in loan yields, partially offset by a decrease in the cost of interest bearing deposits. The taxable equivalent net interest margin, excluding PPP loans, in the third quarter of 2020 was 3.18% compared to 3.35% in the second quarter of 2020. The yield on loans from continuing operations in the third quarter of 2020 was 3.82%, a decrease of 136 basis points from the third quarter of 2019 and a decrease of 5 basis points from the second quarter of 2020. Excluding the PPP loans, the third quarter of 2020 loan yield was 3.95% compared to 4.09% in the second quarter of 2020. The cost of deposits from continuing operations in the third quarter of 2020 was 0.19%, a decrease of 87 basis points from the third quarter of 2019 and a decrease of 3 basis points from the second quarter of 2020. The cost of interest bearing |
deposits from continuing operations decreased 130 basis points to 0.28% from the third quarter of 2019, and decreased 5 basis points from the second quarter of 2020. The provision for credit losses for continuing operations was $28,000 in the third quarter of 2020 compared to $413,000 in the third quarter of 2019 and $8.9 million in the second quarter of 2020. The third quarter of 2020 provision for credit losses included a $636,000 provision for loan losses offset by a $609,000 decrease in the reserve for unfunded commitments. Noninterest income from continuing operations totaled $2.5 million in the third quarter of 2020 compared to $2.8 million in the third quarter of 2019 and $2.3 million in the second quarter of 2020. Service charge income in the third quarter of 2020 totaled $1.2 million, an increase of $292,000 compared to the third quarter of 2019, and an increase of $136,000 from the second quarter of 2020. The increase in service charge income was primarily due to an increase in ACH volumes in our payments business. The third quarter of 2020 also included a loss of $145,000 on the sale of other assets, primarily due to the sale of an OREO property. Noninterest expense from continuing operations totaled $13.7 million in the third quarter of 2020, compared to $12.7 million in the third quarter of 2019 and $12.9 million in the second quarter of 2020. The linked quarter increase in expenses was primarily driven by an increase in our accruals for incentive compensation and a decrease in loan production salary cost deferrals. In addition, other noninterest expense increased primarily due to $470,000 in losses on customer accounts. The year-to-date 2020 effective tax rate from continuing operations was 16.8% 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. Balance Sheet Total loans held for investment were $2.19 billion at September 30, 2020, an increase of $352.4 million, or 19.2%, from September 30, 2019 and an increase of $3.3 million from June 30, 2020. PPP loans totaled $231.8 million at September 30, 2020, a decrease of $2.2 million compared to June 30, 2020, due to early payoffs during the third quarter. Consumer loans increased $41.8 million from June 30, 2020 to $154.9 million at September 30, 2020, due to the growth in a partnership with a fintech firm that offers CD-secured loans to its customers. The allowance for credit losses was 1.59% of total loans held for investment at September 30, 2020, compared to 1.61% at June 30, 2020. Excluding the impact of PPP loans, the allowance for credit losses at June 30, 2020 was 1.78%. Annualized net charge-offs were 0.06% for the third quarter of 2020 and 0.13% for the first nine months of 2020. Non- performing assets totaled $6.0 million, or 0.20% of total assets, as of September 30, 2020, compared to $7.0 million, or 0.24% of total assets, as of June 30, 2020. Total average deposits from continuing operations were $2.47 billion for the third quarter of 2020, an increase of $522.6 million, or 26.8%, from the third quarter of 2019 and an increase of $62.3 million, or 10.3% annualized, from the second quarter of 2020. Noninterest bearing deposits were 34.6% of total average deposits in the third quarter of 2020, compared to 32.7% in the third quarter of 2019 and 33.8% in the second quarter of 2020. Tangible common equity to tangible assets was 11.0% at September 30, 2020, unchanged from June 30, 2020. The estimated total risk based capital ratio increased to 16.9% at September 30, 2020 from 14.8% at June 30, 2020 due to the issuance of $75 million in subordinated debt. Earnings Conference Call Atlantic Capital will host a conference call at 10:00 a.m. EST on Friday, October 23, 2020, to discuss the financial results for the quarter ended September 30, 2020. Individuals wishing to participate in the conference call may do so by dialing 877-270-2148 from the United States. The call will also be available live via webcast on the Investor Relations page of the 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. 2 |
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 $2.9 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. 3 |
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 4 |
ATLANTIC CAPITAL BANCSHARES, INC. Selected Financial Information (in thousands, except share and per share data; taxable equivalent) INCOME SUMMARY (1) Interest income - taxable equivalent (2) $ 24,578 $ 24,151 $ 26,246 $ 26,699 $ 26,624 $ 74,976 $ 79,607 Interest expense 2,515 2,166 5,043 5,965 6,536 9,724 19,018 Net interest income - taxable equivalent 22,063 21,985 21,203 20,734 20,088 65,252 60,589 Provision for credit losses 28 8,863 8,074 787 413 16,965 1,925 Net interest income after provision for credit losses 22,035 13,122 13,129 19,947 19,675 48,287 58,664 Noninterest income 2,504 2,343 2,422 2,679 2,769 7,269 8,046 Noninterest expense 13,713 12,904 12,877 13,382 12,677 39,494 39,726 Income from continuing operations before income taxes 10,826 2,561 2,674 9,244 9,767 16,062 26,984 Income tax expense 2,208 712 550 2,104 2,198 3,471 5,966 Net income from continuing operations(2)(3) 8,618 1,849 2,124 7,140 7,569 12,591 21,018 Income (loss) from discontinued operations, net of tax — — — — 617 — 21,697 Net income $ 8,618 $ 1,849 $ 2,124 $ 7,140 $ 8,186 $ 12,591 $ 42,715 PER SHARE DATA Diluted earnings per share - continuing operations $ 0.40 $ 0.09 $ 0.10 $ 0.32 $ 0.33 $ 0.58 $ 0.88 Diluted earnings (loss) per share - discontinued operations — — — — 0.03 — 0.91 Diluted earnings per share 0.40 0.09 0.10 0.32 0.36 0.58 1.78 Book value per share 16.05 15.64 15.47 15.01 14.81 16.05 14.81 Tangible book value per common share (3) 15.11 14.72 14.54 14.09 13.91 15.11 13.91 PERFORMANCE MEASURES Return on average equity 10.05 % 2.20 % 2.56 % 8.65 % 9.77 % 4.98 % 17.25 % Return on average assets 1.15 0.25 0.32 1.08 1.32 0.59 2.22 Taxable equivalent net interest margin - continuing operations 3.14 3.23 3.41 3.38 3.52 3.25 3.66 Taxable equivalent net interest margin excluding PPP loans 3.18 3.35 3.41 3.38 3.52 3.31 3.66 Efficiency ratio - continuing operations 56.61 53.82 55.03 57.57 55.72 55.16 58.13 Average loans to average deposits 88.65 88.46 83.84 86.54 92.41 87.07 93.96 CAPITAL Average equity to average assets 11.45 % 11.53 % 12.41 % 12.47 % 13.54 % 11.78 % 12.87 % Tangible common equity to tangible assets 11.03 11.01 11.57 10.61 12.92 11.03 12.92 Leverage ratio 9.9 (4) 9.9 10.7 11.0 11.8 9.9 (4) 11.8 Total risk based capital ratio 16.9 (4) 14.8 14.9 15.0 15.5 16.9 (4) 15.5 SHARES OUTSTANDING Number of common shares outstanding - basic 21,202,783 21,477,631 21,479,986 21,751,026 22,193,761 21,202,783 22,193,761 Number of common shares outstanding - diluted 21,298,098 21,569,050 21,675,934 21,974,959 22,405,141 21,298,098 22,405,141 Average number of common shares - basic 21,500,735 21,472,462 21,689,038 21,876,487 22,681,904 21,553,953 23,800,525 Average number of common shares - diluted 21,543,805 21,535,040 21,842,175 22,053,907 22,837,531 21,640,057 23,957,915 ASSET QUALITY Allowance for credit losses to loans held for investment (5) 1.59 % 1.61 % 1.43 % 1.04 % 1.03 % 1.59 % 1.03 % Net charge-offs to average loans (6) 0.06 0.29 0.04 0.07 0.11 0.13 0.12 Non-performing assets to total assets 0.20 0.24 0.27 0.26 0.29 0.20 0.29 AVERAGE BALANCES Total loans - continuing operations $ 2,191,669 $ 2,131,847 $ 1,890,184 $ 1,857,736 $ 1,801,629 $ 2,071,673 $ 1,739,917 Investment securities 453,382 462,850 417,971 389,667 340,872 444,766 366,790 Total assets 2,977,444 2,932,716 2,686,266 2,626,388 2,453,438 2,865,884 2,572,961 Deposits - continuing operations 2,472,218 2,409,958 2,254,505 2,146,626 1,949,657 2,379,235 1,851,674 Shareholders' equity 341,017 338,027 333,480 327,543 332,291 337,521 331,116 AT PERIOD END Loans and loans held for sale $ 2,188,894 $ 2,185,847 $ 1,932,909 $ 1,873,524 $ 1,836,589 $ 2,188,894 $ 1,836,589 Investment securities 446,706 457,749 466,405 399,433 329,648 446,706 329,648 Total assets 2,923,977 2,890,622 2,719,658 2,910,379 2,410,198 2,923,977 2,410,198 Deposits 2,468,722 2,407,631 2,225,119 2,499,046 1,854,272 2,468,722 1,854,272 Shareholders’ equity 340,309 335,980 332,300 326,495 328,711 340,309 328,711 (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 September 30, 2020. (5)The ratios for the third quarter of 2019 are calculated on a continuing operations basis. (6)Annualized. Quarter Quarter Quarter First Quarter 2019 2020 Third 2020 2019 Quarter September 30, Third Second Fourth For the nine months ended 5 |
ATLANTIC CAPITAL BANCSHARES, INC. Consolidated Balance Sheets (unaudited) (in thousands, except share data) ASSETS Cash and due from banks $ 22,715 $ 33,759 $ 45,249 $ 42,577 Interest-bearing deposits in banks 91,243 33,038 421,079 27,167 Cash and cash equivalents 113,958 66,797 466,328 69,744 Investment securities available for sale 260,884 271,829 282,461 286,785 Investment securities held to maturity, net of allowance for credit losses of $15 and $13 at September 30, 2020 and June 30, 2020, respectively 185,822 185,920 116,972 42,863 Other investments 26,315 28,811 27,556 31,360 Loans held for sale 859 1,153 370 916 Loans held for investment 2,188,035 2,184,694 1,873,524 1,835,673 Less: allowance for loan losses (31,894) (31,605) (18,535) (18,080) Loans held for investment, net 2,156,141 2,153,089 1,854,989 1,817,593 Premises and equipment, net 22,558 22,494 22,536 19,688 Bank owned life insurance 67,489 67,127 66,421 66,047 Goodwill 19,925 19,925 19,925 19,925 Other intangibles, net 2,685 2,731 3,027 3,112 Other real estate owned 563 779 278 278 Other assets 66,778 69,967 49,516 51,887 Total assets $ 2,923,977 $ 2,890,622 $ 2,910,379 $ 2,410,198 LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits: Noninterest-bearing demand $ 843,656 $ 883,662 $ 824,646 $ 599,657 Interest-bearing checking 387,858 449,737 373,727 240,427 Savings 568 583 1,219 1,081 Money market 945,834 879,863 1,173,218 921,133 Time 196,343 131,353 44,389 30,782 Brokered deposits 94,463 62,433 81,847 61,192 Total deposits 2,468,722 2,407,631 2,499,046 1,854,272 Federal funds purchased — 6,000 — 57,000 Federal Home Loan Bank borrowings — 50,000 — 76,000 Long-term debt 73,814 49,958 49,873 49,831 Other liabilities 41,132 41,053 34,965 44,384 Total liabilities 2,583,668 2,554,642 2,583,884 2,081,487 SHAREHOLDERS’ EQUITY Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2020, June 30, 2020, December 31, 2019, and September 30, 2019 — — — — Common stock, no par value; 100,000,000 shares authorized; 21,202,783, 21,477,631, 21,751,026, and 22,193,761 shares issued and outstanding as of September 30, 2020, June 30, 2020, December 31, 2019, and September 30, 2019, respectively 220,643 224,520 230,265 237,687 Retained earnings 104,188 95,570 91,669 84,529 Accumulated other comprehensive income 15,478 15,890 4,561 6,495 Total shareholders’ equity 340,309 335,980 326,495 328,711 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,923,977 $ 2,890,622 $ 2,910,379 $ 2,410,198 September 30, 2020 September 30, 2019 December 31, 2019 June 30, 2020 6 |
ATLANTIC CAPITAL BANCSHARES, INC. Consolidated Statements of Income (unaudited) (in thousands, except share and per share data) INTEREST INCOME Loans, including fees $ 21,049 $ 20,496 $ 22,426 $ 23,175 $ 23,541 $ 63,971 $ 69,847 Investment securities 2,910 3,041 2,732 2,413 2,176 8,683 7,146 Interest and dividends on other interest‑earning assets 274 260 865 944 803 1,399 2,322 Total interest income 24,233 23,797 26,023 26,532 26,520 74,053 79,315 INTEREST EXPENSE Interest on deposits 1,151 1,299 4,182 4,890 5,223 6,632 15,502 Interest on Federal Home Loan Bank advances 16 38 — 157 390 54 660 Interest on federal funds purchased and securities sold under agreements to repurchase 3 6 32 94 99 41 385 Interest on long-term debt 1,345 823 829 824 824 2,997 2,471 Total interest expense 2,515 2,166 5,043 5,965 6,536 9,724 19,018 NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES 21,718 21,631 20,980 20,567 19,984 64,329 60,297 Provision for credit losses 28 8,863 8,074 787 413 16,965 1,925 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 21,690 12,768 12,906 19,780 19,571 47,364 58,372 NONINTEREST INCOME Service charges 1,217 1,081 1,232 998 925 3,530 2,589 Gains on sale of securities — — — — 253 — 907 Gains (losses) on sale of other assets (145) — 5 — 140 (140) 127 Derivatives income (loss) 10 (10) 246 315 (293) 246 (637) Bank owned life insurance 363 367 362 375 422 1,092 1,171 SBA lending activities 893 782 414 846 1,150 2,089 3,332 Other noninterest income 166 123 163 145 172 452 557 Total noninterest income 2,504 2,343 2,422 2,679 2,769 7,269 8,046 NONINTEREST EXPENSE Salaries and employee benefits 8,850 8,466 8,476 8,500 8,295 25,792 26,037 Occupancy 739 883 794 838 722 2,416 2,050 Equipment and software 826 763 779 769 842 2,368 2,334 Professional services 562 792 705 577 764 2,059 2,331 Communications and data processing 757 670 897 1,066 796 2,324 2,133 Marketing and business development 141 79 153 143 243 373 702 Travel, meals and entertainment 39 34 140 175 152 213 504 FDIC premiums 213 175 — — (193) 388 217 Other noninterest expense 1,586 1,042 933 1,314 1,056 3,561 3,418 Total noninterest expense 13,713 12,904 12,877 13,382 12,677 39,494 39,726 INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES 10,481 2,207 2,451 9,077 9,663 15,139 26,692 Provision for income taxes 1,863 358 327 1,937 2,094 2,548 5,674 NET INCOME FROM CONTINUING OPERATIONS 8,618 1,849 2,124 7,140 7,569 12,591 21,018 DISCONTINUED OPERATIONS Income from discontinued operations $ — $ — $ — $ — $ — $ — $ 28,690 Provision (benefit) for income taxes — — — — (617) — 6,993 Net income from discontinued operations — — — — 617 — 21,697 NET INCOME $ 8,618 $ 1,849 $ 2,124 $ 7,140 $ 8,186 $ 12,591 $ 42,715 Net Income per Common Share - Basic Net income per common share - continuing operations $ 0.40 $ 0.09 $ 0.10 $ 0.33 $ 0.33 $ 0.58 $ 0.88 Net income per common share - discontinued operations — — — — 0.03 — 0.91 Net Income per Common Share - Basic 0.40 0.09 0.10 0.33 0.36 0.58 1.79 Net Income per Common Share - Diluted Net income per common share - continuing operations $ 0.40 $ 0.09 $ 0.10 $ 0.32 $ 0.33 $ 0.58 $ 0.88 Net income per common share - discontinued operations — — — — 0.03 — 0.91 Net Income per Common Share - Diluted 0.40 0.09 0.10 0.32 0.36 0.58 1.78 Weighted average shares - basic 21,500,735 21,472,462 21,689,038 21,876,487 22,681,904 21,553,953 23,800,525 Weighted average shares - diluted 21,543,805 21,535,040 21,842,175 22,053,907 22,837,531 21,640,057 23,957,915 Nine months ended September 30, Three months ended 2019 September 30, 2020 September 30, 2020 March 31, 2020 December 31, 2019 June 30, 2020 September 30, 2019 7 |
ATLANTIC CAPITAL BANCSHARES, INC. Average Balance Sheets and Net Interest Margin Analysis Selected Financial Information Tax Tax Equivalent Equivalent (dollars in thousands; taxable equivalent) Yield/Rate Yield/Rate Assets Interest bearing deposits in other banks $ 136,459 $ 65 0.19 % $ 129,989 $ 23 0.07 % Other short-term investments — — — — — — Investment securities Taxable investment securities 237,655 1,467 2.46 247,668 1,581 2.57 Non-taxable investment securities (1) 215,727 1,788 3.30 215,182 1,814 3.39 Total investment securities 453,382 3,255 2.86 462,850 3,395 2.95 Loans 2,191,669 21,049 3.82 2,131,847 20,496 3.87 FHLB and FRB stock 14,484 209 5.74 16,842 237 5.66 Total interest-earning assets 2,795,994 24,578 3.50 2,741,528 24,151 3.54 Non-earning assets 181,450 191,188 Total assets $ 2,977,444 $ 2,932,716 Liabilities Interest bearing deposits: NOW, money market, and savings 1,383,382 1,006 0.29 1,415,069 1,115 0.32 Time deposits 166,019 86 0.21 96,362 58 0.24 Brokered deposits 68,102 59 0.34 83,228 126 0.61 Total interest-bearing deposits 1,617,503 1,151 0.28 1,594,659 1,299 0.33 Total borrowings 40,793 19 0.19 97,769 44 0.18 Total long-term debt 82,708 1,345 6.47 49,930 823 6.63 Total interest-bearing liabilities 1,741,004 2,515 0.57 1,742,358 2,166 0.50 Demand deposits 854,715 815,299 Other liabilities 40,708 37,032 Shareholders’ equity 341,017 338,027 Total liabilities and shareholders’ equity $ 2,977,444 $ 2,932,716 Net interest spread 2.92 % 3.04 % Net interest income and net interest margin (2) $22,063 3.14 % $ 21,985 3.23 % Non-taxable equivalent net interest margin 3.09 % 3.17 % Tax Tax Equivalent Equivalent (dollars in thousands; taxable equivalent) Yield/Rate Yield/Rate Assets Interest bearing deposits in other banks $ 136,459 $ 65 0.19 % $ 103,954 $ 564 2.15 % Other short-term investments — — — — — — Investment securities Taxable investment securities 237,655 1,467 2.46 257,005 1,657 2.56 Non-taxable investment securities (1) 215,727 1,788 3.30 83,867 623 2.95 Total investment securities 453,382 3,255 2.86 340,872 2,280 2.65 Loans 2,191,669 21,049 3.82 1,801,629 23,541 5.18 FHLB and FRB stock 14,484 209 5.74 15,524 239 6.11 Total interest-earning assets 2,795,994 24,578 3.50 2,261,979 26,624 4.67 Non-earning assets 181,450 191,459 Total assets $ 2,977,444 $ 2,453,438 Liabilities Interest bearing deposits: NOW, money market, and saving 1,383,382 1,006 0.29 1,191,293 4,642 1.55 Time deposits 166,019 86 0.21 32,409 51 0.62 Brokered deposits 68,102 59 0.34 88,146 530 2.39 Total interest-bearing deposits 1,617,503 1,151 0.28 1,311,848 5,223 1.58 Total borrowings 40,793 19 0.19 85,478 489 2.27 Total long-term debt 82,708 1,345 6.47 49,803 824 6.56 Total interest-bearing liabilities 1,741,004 2,515 0.57 1,447,129 6,536 1.79 Demand deposits 854,715 637,809 Other liabilities 40,708 36,209 Shareholders’ equity 341,017 332,291 Total liabilities and shareholders’ equity $ 2,977,444 $ 2,453,438 Net interest spread 2.92 % 2.88 % Net interest income and net interest margin (2) $22,063 3.14 % $ 20,088 3.52 % Non-taxable equivalent net interest margin 3.09 % 3.51 % Interest Income/ Expense Three months ended September 30, 2020 September 30, 2019 Interest Income/ Expense Average Balance Average Balance Three months ended June 30, 2020 Interest Income/ Expense Interest Income/ Expense September 30, 2020 Average Balance Average Balance (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. (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. 8 |
ATLANTIC CAPITAL BANCSHARES, INC. Average Balance Sheets and Net Interest Margin Analysis Selected Financial Information Tax Tax Equivalent Equivalent (dollars in thousands; taxable equivalent) Yield/Rate Yield/Rate Assets Interest bearing deposits in other banks $ 147,795 $ 756 0.68 % $ 88,960 $ 1,477 2.22 % Other short-term investments 36 — — 5,181 118 3.05 Investment securities: Taxable investment securities 246,388 4,729 2.56 284,978 5,619 2.64 Non-taxable investment securities (1) 198,378 4,877 3.28 81,812 1,819 2.97 Total investment securities 444,766 9,606 2.88 366,790 7,438 2.71 Loans - continuing operations 2,071,673 63,971 4.12 1,739,917 69,847 5.37 FHLB and FRB stock 14,667 643 5.86 14,173 727 6.86 Total interest-earning assets - continuing operations 2,678,937 74,976 3.74 2,215,021 79,607 4.81 Loans held for sale - discontinued operations — — — 156,060 4,588 3.93 Total interest-earning assets 2,678,937 74,976 3.74 2,371,081 84,195 4.75 Non-earning assets 186,947 201,880 Total assets $ 2,865,884 $ 2,572,961 Liabilities Interest bearing deposits: NOW, money market, and savings 1,397,280 5,889 0.56 1,147,508 13,630 1.59 Time deposits 106,271 196 0.25 18,246 139 1.02 Brokered deposits 81,125 547 0.90 91,963 1,733 2.52 Total interest-bearing deposits 1,584,676 6,632 0.56 1,257,717 15,502 1.65 Total borrowings 50,055 95 0.25 57,844 1,045 2.42 Total long-term debt 60,922 2,997 6.57 49,761 2,471 6.64 Total interest-bearing liabilities - continuing operations 1,695,653 9,724 0.77 1,365,322 19,018 1.86 Interest-bearing liabilities - discontinued operations — — — 192,613 1,502 1.04 Total interest-bearing liabilities 1,695,653 9,724 0.77 1,557,935 20,520 1.76 Demand deposits 794,559 593,957 Demand deposits - discontinued operations — 52,481 Other liabilities 38,151 37,472 Shareholders’ equity 337,521 331,116 Total liabilities and shareholders’ equity $ 2,865,884 $ 2,572,961 Net interest spread - continuing operations 2.97 % 2.95 % Net interest income and net interest margin - continuing operations (2) $65,252 3.25 % $ 60,589 3.66 % Net interest income and net interest margin (2) $65,252 3.25 % $ 63,675 3.59 % Non-taxable equivalent net interest margin 3.21 % 3.57 % Interest (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. Expense (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. Nine months ended September 30, 2019 Interest Income/ Expense September 30, 2020 Average Balance Average Balance Income/ 9 |
ATLANTIC CAPITAL BANCSHARES, INC. Period End Loans (dollars in thousands) Loans held for sale Loans held for sale $ 859 $ 1,153 $ — $ 370 $ 916 $ (294) $ (57) Total loans held for sale $ 859 $ 1,153 $ — $ 370 $ 916 $ (294) $ (57) Loans held for investment Commercial loans: Commercial and industrial - other $ 712,567 $ 739,769 $ 760,062 $ 705,115 $ 697,412 $ (27,202) $ 15,155 Commercial and industrial - PPP 231,834 234,049 — — — (2,215) 231,834 Commercial real estate: Multifamily 58,336 58,909 73,654 98,378 60,398 (573) (2,062) Owner occupied 364,170 366,847 359,026 357,912 352,842 (2,677) 11,328 Investment 458,279 474,565 477,451 460,038 452,285 (16,286) 5,994 Construction and land: 1‑4 family residential construction — 11 2,706 4,009 5,186 (11) (5,186) Other construction, development, and land 139,836 128,980 124,116 123,531 139,991 10,856 (155) Mortgage warehouse loans — — — 13,941 23,256 — (23,256) Total commercial loans 1,965,022 2,003,130 1,797,015 1,762,924 1,731,370 (38,108) 233,652 Residential: Residential mortgages 29,460 32,327 31,761 31,315 31,903 (2,867) (2,443) Home equity 24,528 23,689 23,479 25,002 25,638 839 (1,110) Total residential loans 53,988 56,016 55,240 56,317 57,541 (2,028) (3,553) Consumer 154,916 113,149 58,164 37,765 27,168 41,767 127,748 Other 22,777 22,160 25,488 19,552 22,533 617 244 2,196,703 2,194,455 1,935,907 1,876,558 1,838,612 2,248 358,091 Less net deferred fees and other unearned income (8,668) (9,761) (2,998) (3,034) (2,939) 1,093 (5,729) Total loans held for investment $ 2,188,035 $ 2,184,694 $ 1,932,909 $ 1,873,524 $ 1,835,673 $ 3,341 $ 352,362 Total loans $ 2,188,894 $ 2,185,847 $ 1,932,909 $ 1,873,894 $ 1,836,589 $ 3,047 $ 352,305 Total unfunded commitments $ 764,247 $ 749,321 $ 689,620 $ 743,958 $ 687,295 $ 14,926 $ 76,952 Year Over Year Change 2019 Linked Quarter Change September 30, September 30, 2020 March 31, 2020 December 31, 2019 June 30, 2020 10 |
ATLANTIC CAPITAL BANCSHARES, INC. Allowance for Credit Losses Activity and Credit Quality (dollars in thousands) Allowance for loan losses Balance at beginning of period $ 31,605 $ 24,896 $18,535 $18,080 $18,186 Adoption of ASU 2016-13 — — (854) — — Provision for loan losses 636 8,222 7,409 787 413 Loans charged-off: Commercial and industrial (404) (1,479) (18) (344) (541) Commercial real estate — — (78) — — Construction and land — — — — — Residential mortgages — (36) — — — Home equity — — (125) — — Consumer — — — — (2) Other — — — — — Total loans charged-off (404) (1,515) (221) (344) (543) Recoveries on loans previously charged-off: Commercial and industrial 56 1 — 5 17 Commercial real estate — — 18 — — Construction and land — — — — 1 Residential mortgages — — 1 7 — Home equity — — — — — Consumer 1 1 8 — 6 Other — — — — — Total recoveries 57 2 27 12 24 Net charge-offs $ (347) $ (1,513) $ (194) $ (332) $ (519) Balance at period end $ 31,894 $ 31,605 $24,896 $18,535 $18,080 Allowance for unfunded commitments Balance at beginning of period $ 3,480 $ 2,838 $ 892 $ 836 $ 785 Adoption of ASU 2016-13 — — 1,275 — — Provision for unfunded commitments (609) 642 671 56 51 Balance at period end $ 2,871 $ 3,480 $ 2,838 $ 892 $ 836 Total allowance for credit losses - loans and unfunded commitments $ 34,765 $ 35,085 $27,734 $19,427 $18,916 Provision for credit losses under CECL Provision for loan losses 636 8,222 7,409 787 413 Provision for securities held to maturity credit losses 1 (1) (6) - - Provision for unfunded commitments(1) (609) 642 671 - - Total provision for credit losses $28 $ 8,863 $ 8,074 $ 787 $ 413 Non-performing loans $ 5,421 $ 6,265 $ 6,515 $ 7,293 $ 6,770 Foreclosed properties (OREO) 563 779 779 278 278 Total nonperforming assets $ 5,984 $ 7,044 $ 7,294 $ 7,571 $ 7,048 Allowance for loan losses to loans held for investment (2) 1.46 % 1.45 % 1.29 % 0.99 % 0.98 % Allowance for credit losses to loans held for investment (2) 1.59 % 1.61 % 1.43 % 1.04 % 1.03 % Allowance for credit losses to loans held for investment excluding PPP loans (2) 1.78 % 1.80 % 1.43 % 1.04 % 1.03 % Net charge-offs to average loans (3) 0.06 0.29 0.04 0.07 0.11 Non-performing loans as a percentage of total loans 0.25 % 0.29 % 0.34 % 0.39 % 0.37 % Non-performing assets as a percentage of total assets 0.20 % 0.24 % 0.27 % 0.26 % 0.29 % (1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $56 and $51 for the fourth and third quarters of 2019, respectively. (2)The third quarter of 2019 ratios are calculated on a continuing operations basis. (3)Annualized. 2019 2020 Third Quarter Second Quarter First Quarter Fourth Quarter Quarter Third 11 |
ATLANTIC CAPITAL BANCSHARES, INC. Period End Deposits (dollars in thousands) DDA $ 843,656 $ 883,662 $ 712,919 $ 824,646 $ 599,657 $ (40,006) $ 243,999 NOW 387,858 449,737 368,463 373,727 240,427 (61,879) 147,431 Savings 568 583 567 1,219 1,081 (15) (513) Money market 945,834 879,863 982,109 1,173,218 921,133 65,971 24,701 Time 196,343 131,353 66,793 44,389 30,782 64,990 165,561 Brokered 94,463 62,433 94,268 81,847 61,192 32,030 33,271 Total deposits $ 2,468,722 $ 2,407,631 $ 2,225,119 $ 2,499,046 $ 1,854,272 $ 61,091 $ 614,450 Average Deposits (dollars in thousands) DDA $ 854,715 $ 815,299 $ 713,001 $ 718,298 $ 637,809 $ 39,416 $ 216,906 NOW 440,734 462,051 382,178 320,637 295,106 (21,317) 145,628 Savings 586 574 650 1,098 1,085 12 (499) Money market 942,062 952,444 1,010,713 1,006,449 895,102 (10,382) 46,960 Time 166,019 96,362 55,775 37,388 32,409 69,657 133,610 Brokered 68,102 83,228 92,188 62,757 88,146 (15,126) (20,044) Total deposits $ 2,472,218 $ 2,409,958 $ 2,254,505 $ 2,146,627 $ 1,949,657 $ 62,260 $ 522,561 Noninterest bearing deposits as a percentage of average deposits 34.6 % 33.8 % 31.6 % 33.5 % 32.7 % Cost of interest-bearing deposits 0.28 % 0.33 % 1.09 % 1.36 % 1.58 % Cost of deposits 0.19 % 0.22 % 0.75 % 0.90 % 1.06 % Change Q3 2019 Quarter Quarter Quarter Quarter Quarter Quarter Q3 2020 vs Third Second First Fourth Third Linked 2019 2020 September 30, 2020 Year Over Year Change 2020 June 30, December 31, 2019 2019 September 30, March 31, 2020 Linked Quarter Change 12 |
ATLANTIC CAPITAL BANCSHARES, INC. Non-GAAP Performance and Financial Measures Reconciliation (in thousands, except share and per share data) Taxable equivalent interest income reconciliation Interest income - GAAP $ 24,233 $ 23,797 $ 26,023 $ 26,532 $ 26,520 $ 74,053 $ 79,315 Taxable equivalent adjustment 345 354 223 167 104 923 292 Interest income - taxable equivalent $ 24,578 $ 24,151 $ 26,246 $ 26,699 $ 26,624 $ 74,976 $ 79,607 Taxable equivalent net interest income reconciliation - continuing operations Net interest income - GAAP $ 21,718 $ 21,631 $ 20,980 $ 20,567 $ 19,984 $ 64,329 $ 60,297 Taxable equivalent adjustment 345 354 223 167 104 923 292 Net interest income - taxable equivalent - continuing operations $ 22,063 $ 21,985 $ 21,203 $ 20,734 $ 20,088 $ 65,252 $ 60,589 Loan yield excluding PPP loans Loan yield - GAAP 3.82 % 3.87 % 4.77 % 4.95 % 5.18 % 4.12 % 5.37 % Impact of PPP loans 0.13 0.22 — — — 0.14 — Loan yield excluding PPP loans 3.95 % 4.09 % 4.77 % 4.95 % 5.18 % 4.26 % 5.37 % Taxable equivalent net interest margin reconciliation - continuing operations Net interest margin - GAAP - continuing operations 3.09 % 3.17 % 3.38 % 3.35 % 3.51 % 3.21 % 3.64 % Impact of taxable equivalent adjustment 0.05 0.06 0.03 0.03 0.01 0.04 0.02 Net interest margin - taxable equivalent - continuing operations 3.14 % 3.23 % 3.41 % 3.38 % 3.52 % 3.25 % 3.66 % Taxable equivalent net interest margin reconciliation Net interest margin - GAAP 3.09 % 3.17 % 3.38 % 3.35 % 3.51 % 3.21 % 3.57 % Impact of taxable equivalent adjustment 0.05 0.06 0.03 0.03 0.01 0.04 0.02 Net interest margin - taxable equivalent 3.14 % 3.23 % 3.41 % 3.38 % 3.52 % 3.25 % 3.59 % Taxable equivalent net interest margin excluding PPP loans reconciliation Net interest margin - GAAP 3.09 % 3.17 % 3.38 % 3.35 % 3.51 % 3.21 % 3.57 % Impact of PPP loans 0.09 0.18 — — — 0.10 — Net interest margin - taxable equivalent excluding PPP loans 3.18 % 3.35 % 3.38 % 3.35 % 3.51 % 3.31 % 3.57 % Taxable equivalent income before income taxes reconciliation Income before income taxes - GAAP $ 10,481 $ 2,207 $ 2,451 $ 9,077 $ 9,663 $ 15,139 $ 26,692 Taxable equivalent adjustment 345 354 223 167 104 923 292 Income before income taxes $ 10,826 $ 2,561 $ 2,674 $ 9,244 $ 9,767 $ 16,062 $ 26,984 Taxable equivalent income tax expense reconciliation Income tax expense - GAAP $ 1,863 $ 358 $ 327 $ 1,937 $ 2,094 $ 2,548 $ 5,674 Taxable equivalent adjustment 345 354 223 167 104 923 292 Income tax expense $ 2,208 $ 712 $ 550 $ 2,104 $ 2,198 $ 3,471 $ 5,966 Tangible book value per common share reconciliation Total shareholders’ equity $ 340,309 $ 335,980 $ 332,300 $ 326,495 $ 328,711 $ 340,309 $ 328,711 Intangible assets (19,925) (19,925) (19,925) (19,925) (19,925) (19,925) (19,925) Total tangible common equity $ 320,384 $ 316,055 $ 312,375 $ 306,570 $ 308,786 $ 320,384 $ 308,786 Common shares outstanding 21,202,783 21,477,631 21,479,986 21,751,026 22,193,761 21,202,783 22,193,761 Book value per common share - GAAP $ 16.05 $ 15.64 $ 15.47 $ 15.01 $ 14.81 $ 16.05 $ 14.81 Tangible book value 15.11 14.72 14.54 14.09 13.91 15.11 13.91 Tangible common equity to tangible assets reconciliation Total shareholders’ equity $ 340,309 $ 335,980 $ 332,300 $ 326,495 $ 328,711 $ 340,309 $ 328,711 Intangible assets (19,925) (19,925) (19,925) (19,925) (19,925) (19,925) (19,925) Total tangible common equity $ 320,384 $ 316,055 $ 312,375 $ 306,570 $ 308,786 $ 320,384 $ 308,786 Total assets $ 2,923,977 $ 2,890,622 $ 2,719,658 $ 2,910,379 $ 2,410,198 $ 2,923,977 $ 2,410,198 Intangible assets (19,925) (19,925) (19,925) (19,925) (19,925) (19,925) (19,925) Total tangible assets $ 2,904,052 $ 2,870,697 $ 2,699,733 $ 2,890,454 $ 2,390,273 $ 2,904,052 $ 2,390,273 Tangible common equity to tangible assets 11.03 % 11.01 % 11.57 % 10.61 % 12.92 % 11.03 % 12.92 % Allowance for credit losses to loans held for investment reconciliation Total loans held for investment $ 2,188,035 $ 2,184,694 $ 1,932,909 $ 1,873,524 $ 1,835,673 $ 2,188,035 $ 1,835,673 PPP loans (231,834) (234,049) — — — (231,834) — Total loans held for investment excluding PPP loans $ 1,956,201 $ 1,950,645 $ 1,932,909 $ 1,873,524 $ 1,835,673 $ 1,956,201 $ 1,835,673 Allowance for credit losses to loans held for investment 1.59 % 1.61 % 1.43 % 1.04 % 1.03 % 1.59 % 1.03 % Allowance for credit losses to loans held for investment excluding PPP loans 1.78 % 1.80 % 1.43 % 1.04 % 1.03 % 1.78 % 1.03 % Quarter For the nine months ended September 30, Third Quarter 2020 2019 First Quarter Fourth Quarter Third Quarter 2019 2020 Second 13 |
ATLANTIC CAPITAL BANCSHARES, INC. Financial Information from Discontinued Operations Components of Net Income from Discontinued Operations (in thousands) 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 (Benefit) provision for income taxes — — — — (617) — 6,993 Net income from discontinued operations $— $ $ — $ — $ — $617 $ — 21,697 Third Quarter For the nine months ended September 30, First Quarter Second Quarter Fourth Quarter 2019 2020 Third Quarter 2019 2020 14 |