PRESS RELEASE
ATLANTIC CAPITAL BANCSHARES, INC. REPORTS THIRD QUARTER 2018 RESULTS
Atlanta, GA - October 25, 2018 - Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income of $6.5 million, or $0.25 per diluted share, for the third quarter of 2018, compared to $8.2 million, or $0.31 per diluted share, in the second quarter of 2018. Operating net income for the third quarter of 2018 was $6.5 million, compared to $6.9 million in the second quarter of 2018.
Net income for the first nine months of 2018 was $19.7 million, or $0.75 per diluted share, compared to $11.6 million, or $0.45 per diluted share, for the first nine months of 2017. Operating net income for the first nine months of 2018 was $18.4 million, or $0.71 per diluted share, compared to $11.6 million, or $0.45 per diluted share, for the first nine months of 2017.
Third Quarter Highlights(1) 
Grew loans held for investment $104 million, or 21.5% annualized, compared to the second quarter of 2018.
Grew average deposits $118 million, or 22.1% annualized, compared to the second quarter of 2018.
Decreased noninterest expense $766,000 to $16.6 million compared to the second quarter of 2018.
Improved efficiency ratio to 64.8% compared to 67.7% in the second quarter of 2018.
Reported nonperforming assets to total assets of 0.13%.
“With record loan and deposit growth in the third quarter, Atlantic Capital is well positioned for above average growth in strong markets, further improvement in profitability, and superior through-the-cycle credit quality,” remarked Douglas Williams, President and Chief Executive Officer.
Income Statement
Net interest income increased to $22.7 million in the third quarter of 2018 from $22.1 million in the second quarter of 2018, primarily as a result of higher loan balances in the third quarter. Net accretion income on acquired loans totaled $336,000 in the third quarter of 2018 compared to $331,000 in the second quarter of 2018.
Net interest margin was 3.47% in the third quarter of 2018, a decrease of 7 basis points from the second quarter of 2018, as a result of an increase in cash balances from higher deposit balances and a higher cost of deposits. The accretion from the acquired loan discount and amortization of time deposit premium contributed 6 basis points to the net interest margin in the third quarter of 2018 compared to 7 basis points in the second quarter of 2018.
Loan yields in the third quarter of 2018 increased 2 basis points to 4.97% from the second quarter of 2018. The benefit to loan yields from higher rates was reduced in the third quarter mainly due to the limited increases in 1 month LIBOR during most of the third quarter.
The cost of total deposits in the third quarter of 2018 was 0.77%, an increase of 8 basis points from the second quarter of 2018. The cost of interest bearing deposits increased 15 basis points to 1.12% from the second quarter of 2018, driven by an increase in short term interest rates and competitive pressure.
The provision for loan losses was $845,000 in the third quarter of 2018, an increase compared to ($173,000) in the second quarter of 2018, primarily as a result of an increase in loan balances partially offset by improved credit quality.
Noninterest income totaled $3.1 million in the third quarter of 2018 compared to $5.3 million in the second quarter of 2018. The second quarter included a gain of $1.7 million from the sale of Southeastern Trust Company and $507,000 in trust income earned prior to the sale.

(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 for 2018 and 35% for 2017 and prior. We provide detailed reconciliations in the Non-GAAP Performance and Financial Measures Reconciliation table beginning on page 12.

1


SBA income totaled $882,000, a decrease of $115,000 from the second quarter of 2018 due to a decrease in premiums on the sale of SBA loans and the resulting decision to hold the guaranteed portion of some loans.
Noninterest expense totaled $16.6 million in the third quarter of 2018, a decrease of $766,000 compared to $17.4 million in the second quarter of 2018. Salaries and employee benefits expense decreased by $769,000 to $10.2 million, primarily from the savings associated with the sale of the trust company, lower incentive expense and lower payroll taxes.
Balance Sheet
Total loans held for investment were $2.04 billion at September 30, 2018, an increase of $104.4 million from June 30, 2018. This included growth of $59.6 million in commercial and industrial and owner occupied commercial real estate loans from June 30, 2018.
At September 30, 2018, the allowance for loan losses was $20.4 million, or 1.00% of loans held for investment, compared to $19.6 million, or 1.01% of loans held for investment as of June 30, 2018. Annualized net charge-offs to average loans were 0.00% in the third quarter of 2018 compared to 0.03% in the second quarter of 2018. Nonperforming assets totaled $3.7 million, or 0.13% of total assets, as of September 30, 2018, compared to $3.7 million, or 0.14% of total assets, as of June 30, 2018.
Total average deposits for the third quarter of 2018 were $2.25 billion, an increase of $118.2 million from the second quarter of 2018. This increase included some increases in large, temporary deposits that we anticipate to decrease in late 2018 and early 2019. Average transaction deposits, which includes DDA and NOW accounts, increased $90.1 million in the third quarter of 2018, compared to the second quarter.
Earnings Conference Call
The Company will host a conference call at 9:30 a.m. EST on Friday, October 26, 2018, to discuss the financial results for the quarter ended September 30, 2018. Individuals wishing to participate in the conference call may do so by dialing 844.868.8848 from the United States and entering Conference ID 89772886. The call will also be available live via webcast on the Investor Relations page of the Company's website, www.atlanticcapitalbank.com.
Non-GAAP Financial Measures
Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) operating net income; (ii) operating noninterest income; (iii) taxable equivalent interest income; (iv) taxable equivalent net interest income; (v) taxable equivalent net interest margin; (vi) operating income before taxes; (vii) operating income tax expense; (viii) operating return on average assets; (ix) operating return on average equity; (x) tangible common equity; (xi) tangible book value per common share; (xii) efficiency ratio; and (xiii) operating diluted earnings per share, in its analysis of the Company's performance. Operating net income excludes the net gain on the sale of the trust company and the revaluation of net deferred tax assets. Tangible common equity excludes goodwill and other intangible assets from shareholders' equity.
Management believes that non-GAAP financial measures provide a greater understanding of ongoing performance and operations, and enhance comparability with prior periods. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as determined in accordance with GAAP, and investors should consider Atlantic Capital’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Non-GAAP financial measures may not be comparable to non-GAAP financial measures presented by other companies.



2


Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about Atlantic Capital’s confidence in its strategies and its expectations about financial performance, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings. The forward-looking statements are based largely on Atlantic Capital’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond Atlantic Capital’s control. Atlantic Capital undertakes no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements as a result of, among other factors, the risks and uncertainties described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Atlantic Capital’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Please refer to the SEC’s website at www.sec.gov where you can review those documents.
About Atlantic Capital Bancshares
Atlantic Capital Bancshares, Inc. is a $2.88 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers banking, treasury management, capital markets and mortgage services to privately held companies and individuals in Atlanta, eastern Tennessee, and northwest Georgia. Atlantic Capital also provides specialized financial services to select clients nationally.

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

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

3


ATLANTIC CAPITAL BANCSHARES, INC.
 
 
 
 
 
 
 
 
 
Selected Financial Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
 For the nine months ended September 30,
 
(in thousands, except share and per share data; taxable equivalent)
 
Third Quarter
 
Second Quarter
 
First Quarter
 
Fourth Quarter
 
Third Quarter
 
2018
 
2017
 
INCOME SUMMARY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income (1)
 
$
28,616

 
$
27,444

 
$
26,085

 
$
25,350

 
$
24,566

 
$
82,145

 
$
71,827

 
Interest expense
 
5,956

 
5,332

 
4,465

 
4,028

 
4,060

 
15,753

 
11,101

 
Net interest income
 
22,660

 
22,112

 
21,620

 
21,322

 
20,506

 
66,392

 
60,726

 
Provision for loan losses
 
845

 
(173
)
 
772

 
282

 
322

 
1,444

 
2,936

 
Net interest income after provision for loan losses
 
21,815

 
22,285

 
20,848

 
21,040

 
20,184

 
64,948

 
57,790

 
Operating noninterest income (2)
 
3,066

 
3,650

 
3,983

 
3,568

 
3,477

 
10,699

 
12,621

 
Noninterest expense
 
16,595

 
17,361

 
18,392

 
20,594

 
17,504

 
52,348

 
52,871

 
Operating income before income taxes (2)
 
8,286

 
8,574

 
6,439

 
4,014

 
6,157

 
23,299

 
17,540

 
Operating income tax expense (3)
 
1,773

 
1,684

 
1,401

 
1,953

 
2,105

 
4,858

 
5,929

 
Operating net income (2)(3)
 
6,513

 
6,890

 
5,038

 
2,061

 
4,052

 
18,441

 
11,611

 
Net gain on sale of trust company, net of income tax
 

 
1,261

 

 

 

 
1,261

 

 
Revaluation of net deferred tax asset
 

 

 

 
17,398

 

 

 

 
Net income (loss) - GAAP
 
$
6,513

 
$
8,151

 
$
5,038

 
$
(15,337
)
 
$
4,052

 
$
19,702

 
$
11,611

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PER SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share - GAAP
 
$
0.25

 
$
0.31

 
$
0.19

 
$
(0.60
)
 
$
0.16

 
$
0.75

 
$
0.45

 
Diluted earnings per share - operating (2)(3)
 
0.25

 
0.26

 
0.19

 
0.08

 
0.16

 
0.71

 
0.45

 
Book value per share
 
12.27

 
12.14

 
11.91

 
11.99

 
12.63

 
12.27

 
12.63

 
Tangible book value per common share (4)
 
11.37

 
11.23

 
10.98

 
11.05

 
11.67

 
11.37

 
11.67

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PERFORMANCE MEASURES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average equity - GAAP
 
8.07

%
10.46

%
6.66

%
(18.66
)
%
4.96

%
8.41

%
4.91

%
Return on average equity - operating (2)(3)
 
8.07

 
8.84

 
6.66

 
2.51

 
4.96

 
7.87

 
4.91

 
Return on average assets - GAAP
 
0.92

 
1.20

 
0.76

 
(2.24
)
 
0.60

 
0.96

 
0.57

 
Return on average assets - operating (2)(3)
 
0.92

 
1.02

 
0.76

 
0.30

 
0.60

 
0.90

 
0.57

 
Taxable equivalent net interest margin
 
3.47

 
3.54

 
3.51

 
3.39

 
3.26

 
3.50

 
3.24

 
Efficiency ratio
 
64.75

 
67.65

 
72.13

 
83.45

 
73.65

 
68.17

 
72.77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average equity to average assets
 
11.41

%
11.50

%
11.34

%
11.99

%
11.99

%
11.42

%
11.63

%
Tangible common equity to tangible assets
 
10.38

 
10.99

 
10.50

 
9.91

 
11.48

 
10.38

 
11.48

 
Tier 1 capital ratio
 
11.8

(6) 
12.0

 
11.3

 
11.2

 
11.3

 
11.8

(6) 
11.3

 
Total risk based capital ratio
 
14.7

(6) 
15.0

 
14.3

 
14.1

 
14.3

 
14.7

(6) 
14.3

 
Number of common shares outstanding - basic
 
26,103,666

 
26,102,217

 
25,772,208

 
25,712,909

 
25,716,418

 
26,103,666

 
25,716,418

 
Number of common shares outstanding - diluted
 
26,281,849

 
26,336,871

 
26,000,216

 
25,891,225

 
25,967,575

 
26,281,849

 
25,967,575

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASSET QUALITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to loans held for investment
 
1.00

%
1.01

%
1.01

%
1.00

%
0.99

%
1.00

%
0.99

%
Net charge-offs to average loans (5)
 

 
0.03

 
0.05

 
(0.04
)
 
0.68

 
0.02

 
0.32

 
Non-performing assets to total assets
 
0.13

 
0.14

 
0.13

 
0.14

 
0.23

 
0.13

 
0.23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for all periods ending in 2018 and 35% for all periods ending in 2017, reflecting the statutory federal income tax rates. (2)Excludes gain on sale of trust company. (3)Excludes revaluation of net deferred tax asset. (4)Excludes effect of acquisition related intangibles. (5)Annualized. (6)Amounts are estimates as of 9/30/18.

4


ATLANTIC CAPITAL BANCSHARES, INC.
 
 
 
 
 
 
 
 
Consolidated Balance Sheets (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
 
June 30,
 
December 31,
 
September 30,
(in thousands, except share data)
 
2018
 
2018
 
2017
 
2017
ASSETS
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
28,007

 
$
55,612

 
$
38,086

 
$
35,504

Interest-bearing deposits in banks
 
140,682

 
42,477

 
281,247

 
40,558

Other short-term investments
 
20,898

 
14,712

 
10,681

 
5,189

Cash and cash equivalents
 
189,587

 
112,801

 
330,014

 
81,251

Investment securities available-for-sale
 
465,756

 
453,968

 
449,117

 
447,005

Other investments
 
33,021

 
36,190

 
32,174

 
35,818

Loans held for sale
 
1,886

 
1,612

 
1,487

 
3,274

Loans held for investment
 
2,038,434

 
1,934,311

 
1,933,839

 
1,905,432

Less: allowance for loan losses
 
(20,443
)
 
(19,583
)
 
(19,344
)
 
(18,870
)
   Loans held for investment, net
 
2,017,991

 
1,914,728

 
1,914,495

 
1,886,562

Premises and equipment, net
 
17,371

 
16,878

 
12,054

 
11,747

Bank owned life insurance
 
64,769

 
64,391

 
63,667

 
63,284

Goodwill and intangible assets, net
 
26,557

 
27,012

 
27,633

 
27,945

Other real estate owned
 
968

 
1,288

 
1,215

 
1,494

Other assets
 
64,815

 
61,806

 
59,565

 
80,032

Total assets
 
$
2,882,721

 
$
2,690,674

 
$
2,891,421

 
$
2,638,412

 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
Noninterest-bearing demand
 
$
653,816

 
$
595,867

 
$
732,442

 
$
599,292

Interest-bearing checking
 
486,456

 
332,481

 
306,331

 
270,740

Savings
 
27,192

 
27,559

 
26,573

 
30,131

Money market
 
977,552

 
865,913

 
1,117,891

 
865,238

Time
 
155,689

 
152,111

 
138,612

 
144,250

Brokered deposits
 
79,119

 
92,656

 
128,816

 
193,994

Total deposits
 
2,379,824

 
2,066,587

 
2,450,665

 
2,103,645

Federal funds purchased and securities sold under agreements to repurchase
 
8,904

 
73,024

 

 

Federal Home Loan Bank borrowings
 
83,000

 
150,000

 
45,000

 
125,000

Long-term debt
 
49,662

 
49,620

 
49,535

 
49,493

Other liabilities
 
41,094

 
34,673

 
37,796

 
35,520

Total liabilities
 
2,562,484

 
2,373,904

 
2,582,996

 
2,313,658

 
 
 
 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2018, June 30, 2018, December 31, 2017, and September 30, 2017
 

 

 

 

Common stock, no par value; 100,000,000 shares authorized; 26,103,666, 26,102,217, 25,712,909, and 25,716,418 shares issued and outstanding as of September 30, 2018, June 30, 2018, December 31, 2017, and September 30, 2017
 
305,300

 
304,793

 
299,474

 
298,469

Retained earnings
 
33,357

 
26,844

 
12,810

 
28,147

Accumulated other comprehensive (loss) income
 
(18,420
)
 
(14,867
)
 
(3,859
)
 
(1,862
)
Total shareholders’ equity
 
320,237

 
316,770

 
308,425

 
324,754

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
2,882,721

 
$
2,690,674

 
$
2,891,421

 
$
2,638,412


5


ATLANTIC CAPITAL BANCSHARES, INC.
 
 
 
 
 
 
 
 
Consolidated Statements of Income (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except share and per share data)
 
Three months ended
 
Nine months ended
 
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, including fees
 
$
24,619

 
$
23,779

 
$
22,675

 
$
22,043

 
$
21,491

 
$
71,073

 
$
62,846

Investment securities available-for-sale
 
2,789

 
2,687

 
2,592

 
2,510

 
2,298

 
8,068

 
6,671

Interest and dividends on other interest‑earning assets
 
1,111

 
880

 
715

 
584

 
562

 
2,706

 
1,617

Total interest income
 
28,519

 
27,346

 
25,982

 
25,137

 
24,351

 
81,847

 
71,134

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
4,403

 
3,651

 
3,044

 
2,856

 
2,693

 
11,098

 
7,221

Interest on Federal Home Loan Bank advances
 
637

 
766

 
509

 
323

 
459

 
1,912

 
1,213

Interest on federal funds purchased and securities sold under agreements to repurchase
 
92

 
92

 
83

 
26

 
84

 
267

 
196

Interest on long-term debt
 
824

 
823

 
829

 
823

 
824

 
2,476

 
2,471

Total interest expense
 
5,956

 
5,332

 
4,465

 
4,028

 
4,060

 
15,753

 
11,101

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
 
22,563

 
22,014

 
21,517

 
21,109

 
20,291

 
66,094

 
60,033

Provision for loan losses
 
845

 
(173
)
 
772

 
282

 
322

 
1,444

 
2,936

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
 
21,718

 
22,187

 
20,745

 
20,827

 
19,969

 
64,650

 
57,097

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges
 
1,278

 
1,308

 
1,192

 
1,206

 
1,247

 
3,778

 
3,870

Gains (losses) on sale of securities
 

 
(2
)
 

 
17

 
(80
)
 
(2
)
 
(80
)
Gains (losses) on sale of other assets
 
58

 
(166
)
 
(46
)
 
(46
)
 
44

 
(154
)
 
788

Mortgage income
 
315

 
363

 
304

 
290

 
320

 
982

 
965

Trust income
 

 
507

 
518

 
482

 
437

 
1,025

 
1,332

Derivatives income
 
20

 
20

 
114

 
94

 
(3
)
 
154

 
62

Bank owned life insurance
 
379

 
378

 
369

 
384

 
384

 
1,126

 
1,146

SBA lending activities
 
882

 
997

 
1,302

 
843

 
888

 
3,181

 
3,286

Gains on sale of branches
 

 

 

 

 

 

 
302

Gain on sale of trust company
 

 
1,681

 

 

 

 
1,681

 

Other noninterest income
 
134

 
245

 
230

 
298

 
240

 
609

 
950

Total noninterest income
 
3,066

 
5,331

 
3,983

 
3,568

 
3,477

 
12,380

 
12,621

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
10,152

 
10,921

 
12,077

 
13,298

 
10,409

 
33,150

 
32,077

Occupancy
 
1,288

 
1,211

 
1,355

 
1,156

 
1,129

 
3,854

 
3,433

Equipment and software
 
964

 
904

 
787

 
872

 
776

 
2,655

 
2,577

Professional services
 
803

 
960

 
832

 
1,280

 
1,595

 
2,595

 
3,472

Postage, printing and supplies
 
75

 
61

 
58

 
114

 
63

 
194

 
226

Communications and data processing
 
947

 
1,003

 
1,043

 
1,111

 
982

 
2,993

 
3,038

Marketing and business development
 
281

 
191

 
190

 
225

 
272

 
662

 
721

FDIC premiums
 
208

 
197

 
147

 
212

 
308

 
552

 
754

Merger and conversion costs
 

 

 

 

 

 

 
304

Amortization of intangibles
 
296

 
319

 
343

 
367

 
391

 
958

 
1,286

Foreclosed property/problem asset expense
 
12

 
2

 
282

 
7

 
7

 
296

 
117

Other noninterest expense
 
1,569

 
1,592

 
1,278

 
1,952

 
1,572

 
4,439

 
4,866

Total noninterest expense
 
16,595

 
17,361

 
18,392

 
20,594

 
17,504

 
52,348

 
52,871

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME BEFORE PROVISION FOR INCOME TAXES
 
8,189

 
10,157

 
6,336

 
3,801

 
5,942

 
24,682

 
16,847

Provision for income taxes
 
1,676

 
2,006

 
1,298

 
19,138

 
1,890

 
4,980

 
5,236

NET INCOME (LOSS)
 
$
6,513

 
$
8,151

 
$
5,038

 
$
(15,337
)
 
$
4,052

 
$
19,702

 
$
11,611

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per common share ‑ basic
 
$
0.25

 
$
0.31

 
$
0.20

 
$
(0.60
)
 
$
0.16

 
$
0.76

 
$
0.45

Net income (loss) per common share ‑ diluted
 
$
0.25

 
$
0.31

 
$
0.19

 
$
(0.60
)
 
$
0.16

 
$
0.75

 
$
0.45

Weighted average shares - basic
 
26,103,397

 
26,010,914

 
25,750,824

 
25,723,548

 
25,699,179

 
25,956,336

 
25,548,646

Weighted average shares - diluted
 
26,254,772

 
26,200,026

 
25,945,773

 
25,888,064

 
25,890,779

 
26,134,655

 
25,799,851


6


ATLANTIC CAPITAL BANCSHARES, INC.
 
 
 
 
 
Average Balance Sheets and Net Interest Margin Analysis
 
 
 
 
 
Selected Financial Information
 
 
 
 
 
 
 
 
 
 
 
 Three months ended
 
 
 
September 30, 2018
 
 
June 30, 2018
 
(dollars in thousands; taxable equivalent)
 
Average Balance
 
Interest Income/ Expense
 
Tax Equivalent Yield/Rate
 
 
Average Balance
 
Interest Income/ Expense
 
Tax Equivalent Yield/Rate
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits in other banks
 
$
128,248

 
$
647

 
2.00
%
 
$
97,501

 
$
562

 
2.31
%
Other short-term investments
 
21,985

 
157

 
2.83
 
 
9,262

 
64

 
2.77
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Taxable investment securities
 
385,834

 
2,315

 
2.38
 
 
378,291

 
2,212

 
2.35
 
    Non-taxable investment securities(1)
 
75,514

 
571

 
3.00
 
 
76,343

 
573

 
3.01
 
Total investment securities
 
461,348

 
2,886

 
2.48
 
 
454,634

 
2,785

 
2.46
 
Total loans
 
1,963,817

 
24,619

 
4.97
 
 
1,927,063

 
23,779

 
4.95
 
FHLB and FRB stock
 
17,624

 
307

 
6.91
 
 
19,357

 
254

 
5.26
 
     Total interest-earning assets
 
2,593,022

 
28,616

 
4.38
 
 
2,507,817

 
27,444

 
4.39
 
Non-earning assets
 
212,718

 
 
 
 
 
 
210,254

 
 
 
 
 
     Total assets
 
$
2,805,740

 
 
 
 
 
 
$
2,718,071

 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOW, money market, and savings
 
1,333,701

 
3,491

 
1.04
 
 
1,254,153

 
2,798

 
0.89
 
Time deposits
 
154,507

 
551

 
1.41
 
 
148,134

 
385

 
1.04
 
Brokered deposits
 
67,937

 
361

 
2.11
 
 
100,425

 
468

 
1.87
 
Total interest-bearing deposits
 
1,556,145

 
4,403

 
1.12
 
 
1,502,712

 
3,651

 
0.97
 
Total borrowings
 
143,148

 
729

 
2.02
 
 
185,856

 
858

 
1.85
 
Total long-term debt
 
49,634

 
824

 
6.59
 
 
49,592

 
823

 
6.66
 
     Total interest-bearing liabilities
 
1,748,927

 
5,956

 
1.35
 
 
1,738,160

 
5,332

 
1.23
 
Demand deposits
 
697,927

 
 
 
 
 
 
633,113

 
 
 
 
 
Other liabilities
 
38,796

 
 
 
 
 
 
34,255

 
 
 
 
 
Shareholders' equity
 
320,090

 
 
 
 
 
 
312,543

 
 
 
 
 
     Total liabilities and shareholders' equity
 
$
2,805,740

 
 
 
 
 
 
$
2,718,071

 
 
 
 
 
Net interest spread
 
 
 
 
 
3.03
%
 
 
 
 
 
3.16
%
Net interest income and net interest margin(2)
 
 
 
$
22,660

 
3.47
%
 
 
 
$
22,112

 
3.54
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-taxable equivalent net interest margin
 
 
 
 
 
3.45
%
 
 
 
 
 
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 rates.
 
(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.
 







7


ATLANTIC CAPITAL BANCSHARES, INC.
 
 
 
 
 
Average Balance Sheets and Net Interest Margin Analysis
 
 
 
 
 
Selected Financial Information
 
 
 
 
 
 
 
 
 
 
 
Nine months ended
 
 
 
September 30, 2018
 
 
September 30, 2017
 
(dollars in thousands; taxable equivalent)
 
Average Balance
 
Interest Income/ Expense
 
Tax Equivalent Yield/Rate
 
 
Average Balance
 
Interest Income/ Expense
 
Tax Equivalent Yield/Rate
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits in other banks
 
$
101,502

 
$
1,606

 
2.12
%
 
$
76,079

 
$
614

 
1.08
%
Other short-term investments
 
13,907

 
284

 
2.73
 
 
16,198

 
231

 
1.91
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Taxable investment securities
 
380,002

 
6,643

 
2.34
 
 
362,080

 
5,197

 
1.92
 
    Non-taxable investment securities(1)
 
76,658

 
1,723

 
3.01
 
 
81,485

 
2,167

 
3.56
 
Total investment securities
 
456,660

 
8,366

 
2.45
 
 
443,565

 
7,364

 
2.22
 
Total loans
 
1,943,369

 
71,073

 
4.89
 
 
1,948,700

 
62,846

 
4.31
 
FHLB and FRB stock
 
18,291

 
816

 
5.96
 
 
19,147

 
772

 
5.39
 
     Total interest-earning assets
 
2,533,729

 
82,145

 
4.33
 
 
2,503,689

 
71,827

 
3.84
 
Non-earning assets
 
209,518

 
 
 
 
 
 
215,830

 
 
 
 
 
     Total assets
 
$
2,743,247

 
 
 
 
 
 
$
2,719,519

 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOW, money market, and savings
 
1,296,370

 
8,637

 
0.89
 
 
1,171,369

 
4,842

 
0.55
 
Time deposits
 
147,531

 
1,249

 
1.13
 
 
152,190

 
833

 
0.73
 
Brokered deposits
 
80,920

 
1,212

 
2.00
 
 
182,195

 
1,546

 
1.13
 
Total interest-bearing deposits
 
1,524,821

 
11,098

 
0.97
 
 
1,505,754

 
7,221

 
0.64
 
Total borrowings
 
161,892

 
2,179

 
1.80
 
 
196,352

 
1,409

 
0.96
 
Total long-term debt
 
49,592

 
2,476

 
6.68
 
 
49,423

 
2,471

 
6.68
 
     Total interest-bearing liabilities
 
1,736,305

 
15,753

 
1.21
 
 
1,751,529

 
11,101

 
0.85
 
Demand deposits
 
656,807

 
 
 
 
 
 
624,923

 
 
 
 
 
Other liabilities
 
36,935

 
 
 
 
 
 
26,706

 
 
 
 
 
Shareholders' equity
 
313,200

 
 
 
 
 
 
316,361

 
 
 
 
 
     Total liabilities and shareholders' equity
 
$
2,743,247

 
 
 
 
 
 
$
2,719,519

 
 
 
 
 
Net interest spread
 
 
 
 
 
3.12
%
 
 
 
 
 
2.99
%
Net interest income and net interest margin(2)
 
 
 
$
66,392

 
3.50
%
 
 
 
$
60,726

 
3.24
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-taxable equivalent net interest margin
 
 
 
 
 
3.49
%
 
 
 
 
 
3.21
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for the nine months ended September 30, 2018 and 35% for the nine months ended September 30, 2017, reflecting the statutory federal income tax rates.
 
(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.
 
 
 
 
 
 
 
 
Period End Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
Linked Quarter Change
 
Year Over Year Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
$
1,886

 
$
1,612

 
$
835

 
$
1,487

 
$
3,274

 
$
274

 
$
(1,388
)
Total loans held for sale
 
$
1,886

 
$
1,612

 
$
835

 
$
1,487

 
$
3,274

 
$
274

 
$
(1,388
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for investment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
648,349

 
$
610,024

 
$
636,181

 
$
615,359

 
$
562,426

 
$
38,325

 
$
85,923

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
115,254

 
99,140

 
99,227

 
99,553

 
91,219

 
16,114

 
24,035

Owner occupied
 
390,563

 
367,441

 
353,235

 
346,746

 
348,447

 
23,122

 
42,116

Investment
 
468,237

 
455,401

 
461,638

 
494,116

 
505,188

 
12,836

 
(36,951
)
Construction and land:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 family residential construction
 
4,381

 
6,178

 
6,571

 
6,906

 
9,644

 
(1,797
)
 
(5,263
)
Other construction, development, and land
 
155,400

 
140,026

 
139,333

 
108,589

 
122,436

 
15,374

 
32,964

Mortgage warehouse loans
 
27,838

 
38,352

 
44,575

 
39,981

 
41,551

 
(10,514
)
 
(13,713
)
Total commercial loans
 
1,810,022

 
1,716,562

 
1,740,760

 
1,711,250

 
1,680,911

 
93,460