ATLANTA, April 23, 2020 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income from continuing operations for the quarter ended March 31, 2020 of $2.1 million, or $0.10 per diluted share, compared to $6.4 million, or $0.26 per diluted share, for the first quarter of 2019 and $7.1 million, or $0.32 per diluted share, for the fourth quarter of 2019. The decrease in net income was predominantly driven by increases in credit reserves in anticipation of the expected impact from the economic slowdown from COVID-19.
“Atlantic Capital entered the COVID-19 crisis in a position of strength with solid first quarter operating results, a fortress balance sheet, and sound business continuity plans. With that strength, our company will provide needed assistance to businesses in our community, add new client relationships, and strive to continue to build meaningful shareholder value through the crisis,” remarked Douglas Williams, President and Chief Executive Officer.
Response to COVID-19
As the COVID-19 pandemic affected all areas of economic and social life, Atlantic Capital responded with measures to protect the health of its community, customers and associates. The Company implemented work-from-home initiatives for employees when possible, ceased non-essential business related travel, and began regular meetings of its executive leadership and incident response teams to direct the Company’s response to the ever-changing environment. Each week, Doug Williams and his executive leadership team host an internal company-wide conference call to communicate the latest developments, answer teammate questions, and gather information from teammates based on the challenges their relationship customers are facing.
In addition, Atlantic Capital has taken the following steps to assist borrowers during these challenging times, consistent with sound banking practice:
- facilitating approximately $223 million in loan applications for business borrowers through the Paycheck Protection Program;
- evaluating business segments in our market areas to evaluate areas of need and focus our assessment and management of portfolio risk;
- offering payment deferrals to existing customers with a streamlined loan modification process when appropriate;
- communicating with customers in order to assess developing credit situations and needs; and
- engaging in liquidity planning, including pausing stock repurchases in March.
Our goal is to continue to support our community of customers and prospective customers while maintaining our historically cautious approach to new loan underwriting. With reliable core deposit funding, solid balance sheet liquidity, a strong capital position, and access to significant wholesale funding, Atlantic Capital anticipates adequate funding capacity for future lending needs.
First Quarter Highlights(1)
- Capital ratios remained strong, with a tangible common equity to tangible assets ratio of 11.6%.
- Tangible book value per share increased 19.5% from March 31, 2019 to $14.54, and increased 12.8% annualized from December 31, 2019.
- Net interest margin from continuing operations of 3.41%, compared to 3.74% in the first quarter of 2019 and 3.38% in the fourth quarter of 2019.
- Average deposits from continuing operations increased $460.7 million, or 25.7%, compared to the first quarter of 2019 and $107.9 million, or 20.1% annualized, compared to the fourth quarter of 2019.
- Total loans held for investment increased $198.4 million, or 11.4% from March 31, 2019 and $59.4 million, or 12.7% annualized, from December 31, 2019.
- Annualized net charge-offs to average loans totaled 0.04%, compared 0.11% in the first quarter of 2019 and 0.07% for the fourth quarter of 2019.
Income Statement
Taxable equivalent net interest income from continuing operations totaled $21.2 million for the first quarter of 2020, an increase of $679,000, or 3.3%, from the first quarter of 2019, and an increase of $469,000, or 9.0% annualized, from the fourth quarter of 2019. The linked quarter increase in net interest income was primarily driven by a decrease in the cost of interest bearing liabilities offset by a decrease in loan yields.
Taxable equivalent net interest margin from continuing operations was 3.41% in the first quarter of 2020, a decrease of 33 basis points from the first quarter of 2019 and an increase of 3 basis points from the fourth quarter of 2019. The linked quarter increase was primarily the result of a drop in the cost of interest bearing deposits and an increase in the yield on investment securities. This was partially offset by a decrease in loan yields.
The yield on loans from continuing operations in the first quarter of 2020 was 4.77%, a decrease of 63 basis points from the first quarter of 2019 and a decrease of 18 basis points from the fourth quarter of 2019. The decrease in loan yields was due primarily to the repricing of variable rate loans as a result of declines in short term interest rates during 2019 and 2020.
The taxable equivalent yield on investment securities in the first quarter of 2020 was 2.84%, an increase of 7 basis points from the first quarter of 2019 and an increase of 21 basis points from the fourth quarter of 2019. The increase in taxable equivalent investment portfolio yields was primarily the result of municipal bond purchases in 2019 and 2020, many of which were non-taxable.
The cost of deposits from continuing operations in the first quarter of 2020 was 0.75%, a decrease of 34 basis points from the first quarter of 2019 and a decrease of 15 basis points from the fourth quarter of 2019. The cost of interest bearing deposits from continuing operations decreased 52 basis points to 1.09% from the first quarter of 2019, and decreased 27 basis points from the fourth quarter of 2019.
The provision for credit losses for continuing operations was $8.1 million in the first quarter of 2020 compared to $814,000 in the first quarter of 2019 and $787,000 in the fourth quarter of 2019. The provision for credit losses in the first quarter of 2020 included a $7.4 million provision for loan losses and a $671,000 provision for unfunded commitments. The provision increased primarily as a response to the expected impact from the economic slowdown from COVID-19.
Noninterest income from continuing operations totaled $2.4 million in the first quarter of 2020 compared to $2.3 million in the first quarter of 2019 and $2.7 million in the fourth quarter of 2019. Service charge income in the first quarter of 2020 totaled $1.2 million, an increase of $438,000 or 55.2%, compared to the first quarter of 2019 and an increase of $234,000, or 93.8% annualized, from the fourth quarter of 2019. Continued strong growth in core deposits, particularly in our payments processing businesses, drove the increases in service charge income. SBA income totaled $414,000, a decrease from $1.1 million in the first quarter of 2019 and $846,000 in the fourth quarter of 2019, primarily from lower SBA origination volume and a decrease in loan premiums during the quarter.
Noninterest expense from continuing operations totaled $12.9 million in the first quarter of 2020, a decrease of $918,000 compared to the first quarter of 2019 and $505,000 compared to the fourth quarter of 2019. Salaries and employee benefits totaled $8.5 million in the first quarter of 2020, unchanged from the previous quarter as the higher first quarter benefits costs were offset by lower incentive accruals.
The effective tax rate from continuing operations for the first quarter of 2020 was 13.3% 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 14.
Balance Sheet
Total loans held for investment were $1.93 billion at March 31, 2020, an increase of $198.4 million, or 11.4%, from March 31, 2019 and an increase of $59.4 million, or 12.7% annualized, from December 31, 2019. Commercial and industrial loans were $760.0 million at March 31, 2020, an increase of 11.9% from March 31, 2019 and 31.2% annualized from December 31, 2019. The increase from December 31, 2019 was primarily due to organic growth across different areas of the Company. Mortgage warehouse loan participations decreased to zero as we exited the business during the first quarter of 2020. Consumer loans increased $20.4 million from December 31, 2019 to $58.2 million at March 31, 2020, due to the growth in a partnership with a fintech firm that offers CD-secured loans to its customers.
On January 1, 2020, the Company adopted the CECL accounting standard, which resulted in a day one reduction of $854,000 to the allowance for loan losses offset by an increase of $1.3 million to the allowance for unfunded commitments. The allowance for loan losses totaled $18.5 million as of December 31, 2019, was reduced by $854,000 due to CECL adoption, was increased by $7.4 million related to the first quarter 2020 provision, and ended the quarter at $24.9 million. The allowance for unfunded commitments totaled $892,000 at December 31, 2019, was increased by $1.3 million due to CECL adoption, was increased by $671,000 related to the first quarter 2020 provision, and ended the quarter at $2.8 million. At March 31, 2020, the combined allowance for credit losses for loans and unfunded commitments was $27.7 million, compared to $19.4 million at December 31, 2019.
The allowance for loan losses was 1.29% of total loans held for investment at March 31, 2020, compared to 0.99% at December 31, 2019. The increase reflects the impact of COVID-19 on the economic forecast used in the estimation of expected credit losses. Non-performing assets from continuing operations totaled $7.3 million, or 0.27% of total assets, as of March 31, 2020, compared to 0.34% of total assets as of March 31, 2019 and 0.26% of total assets as of December 31, 2019.
Tangible common equity to tangible assets was 11.6% at March 31, 2020, an increase from 10.6% at December 31, 2019 due to the elevated levels of cash related to year-end deposits at December 31, 2019. The estimated total risk based capital ratio was 14.9% at March 31, 2020 compared to 13.7% at March 31, 2019 and 15.0% at December 31, 2019.
Earnings Conference Call
The Company will host a conference call at 9:30 a.m. EDT on Friday, April 24, 2020, to discuss the financial results for the quarter ended March 31, 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 Company's website, www.atlanticcapitalbank.com. A presentation will be used during the earnings conference call and is available at http://www.snl.com/IRW/CorporateProfile/4155740.
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) taxable equivalent net interest margin; (iv) taxable equivalent income before income taxes; (v) taxable equivalent income tax expense; (vi) tangible assets; (vii) tangible common equity; and (viii) tangible book value per common share, in its analysis of the Company's performance. 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.
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 $2.7 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 specialized financial services for 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
ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
| 2020 | 2019 | |||||||||||||||||||
| (in thousands, except share and per share data; | First | Fourth | Third | Second | First | First Quarter 2020 | ||||||||||||||
| taxable equivalent) | Quarter | Quarter | Quarter | Quarter | Quarter | to 2019 Change | ||||||||||||||
| INCOME SUMMARY (1) | ||||||||||||||||||||
| Interest income (2) | $ | 26,246 | $ | 26,699 | $ | 26,624 | $ | 26,686 | $ | 26,297 | (0 | )% | ||||||||
| Interest expense | 5,043 | 5,965 | 6,536 | 6,709 | 5,773 | (13 | ) | |||||||||||||
| Net interest income | 21,203 | 20,734 | 20,088 | 19,977 | 20,524 | 3 | ||||||||||||||
| Provision for credit losses | 8,074 | 787 | 413 | 698 | 814 | 892 | ||||||||||||||
| Net interest income after provision for credit losses | 13,129 | 19,947 | 19,675 | 19,279 | 19,710 | (33 | ) | |||||||||||||
| Noninterest income | 2,422 | 2,679 | 2,769 | 2,941 | 2,336 | 4 | ||||||||||||||
| Noninterest expense | 12,877 | 13,382 | 12,677 | 13,254 | 13,795 | (7 | ) | |||||||||||||
| Income from continuing operations before income taxes | 2,674 | 9,244 | 9,767 | 8,966 | 8,251 | (68 | ) | |||||||||||||
| Income tax expense | 550 | 2,104 | 2,198 | 1,957 | 1,811 | (70 | ) | |||||||||||||
| Net income from continuing operations(2)(3) | 2,124 | 7,140 | 7,569 | 7,009 | 6,440 | (67 | ) | |||||||||||||
| Income (loss) from discontinued operations, net of tax | — | — | 617 | 22,143 | (1,063 | ) | (100 | ) | ||||||||||||
| Net income | $ | 2,124 | $ | 7,140 | $ | 8,186 | $ | 29,152 | $ | 5,377 | (60 | )% | ||||||||
| PER SHARE DATA | ||||||||||||||||||||
| Diluted earnings per share - continuing operations | $ | 0.10 | $ | 0.32 | $ | 0.33 | $ | 0.29 | $ | 0.26 | ||||||||||
| Diluted earnings (loss) per share - discontinued operations | — | — | 0.03 | 0.92 | (0.04 | ) | ||||||||||||||
| Diluted earnings per share | 0.10 | 0.32 | 0.36 | 1.21 | 0.21 | |||||||||||||||
| Book value per share | 15.47 | 15.01 | 14.81 | 14.46 | 13.10 | |||||||||||||||
| Tangible book value per common share (3) | 14.54 | 14.09 | 13.91 | 13.60 | 12.17 | |||||||||||||||
| PERFORMANCE MEASURES | ||||||||||||||||||||
| Return on average equity | 2.56 | % | 8.65 | % | 9.77 | % | 34.38 | % | 6.80 | % | ||||||||||
| Return on average assets | 0.32 | 1.08 | 1.32 | 4.79 | 0.77 | |||||||||||||||
| Taxable equivalent net interest margin - continuing operations | 3.41 | 3.38 | 3.52 | 3.61 | 3.74 | |||||||||||||||
| Efficiency ratio - continuing operations | 55.03 | 57.57 | 55.72 | 58.06 | 60.61 | |||||||||||||||
| Average loans to average deposits | 83.84 | 86.54 | 92.41 | 93.05 | 95.20 | |||||||||||||||
| CAPITAL | ||||||||||||||||||||
| Average equity to average assets | 12.41 | % | 12.47 | % | 13.54 | % | 13.94 | % | 11.34 | % | ||||||||||
| Tangible common equity to tangible assets | 11.57 | 10.61 | 12.92 | 13.37 | 10.51 | |||||||||||||||
| Tier 1 capital ratio | 11.7 | (4) | 12.0 | 12.5 | 13.4 | 11.0 | ||||||||||||||
| Total risk based capital ratio | 14.9 | (4) | 15.0 | 15.5 | 16.5 | 13.7 | ||||||||||||||
| SHARES OUTSTANDING | ||||||||||||||||||||
| Number of common shares outstanding - basic | 21,479,986 | 21,751,026 | 22,193,761 | 23,293,465 | 24,466,964 | |||||||||||||||
| Number of common shares outstanding - diluted | 21,675,934 | 21,974,959 | 22,405,141 | 23,508,442 | 24,719,273 | |||||||||||||||
| Average number of common shares - basic | 21,689,038 | 21,876,487 | 22,681,904 | 23,888,381 | 24,855,171 | |||||||||||||||
| Average number of common shares - diluted | 21,842,175 | 22,053,907 | 22,837,531 | 24,040,806 | 25,019,384 | |||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||
| Allowance for loan losses to loans held for investment (5) | 1.29 | % | 0.99 | % | 0.98 | % | 1.02 | % | 1.04 | % | ||||||||||
| Net charge-offs to average loans (6) | 0.04 | 0.07 | 0.11 | 0.14 | 0.11 | |||||||||||||||
| Non-performing assets to total assets | 0.27 | 0.26 | 0.29 | 0.31 | 0.40 | |||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||
| Total loans - continuing operations | $ | 1,890,184 | $ | 1,857,736 | $ | 1,801,629 | $ | 1,769,803 | $ | 1,707,682 | ||||||||||
| Investment securities | 417,971 | 389,667 | 340,872 | 360,047 | 400,101 | |||||||||||||||
| Total assets | 2,686,266 | 2,626,388 | 2,453,438 | 2,440,502 | 2,829,072 | |||||||||||||||
| Deposits - continuing operations | 2,254,505 | 2,146,626 | 1,949,657 | 1,902,076 | 1,793,791 | |||||||||||||||
| Shareholders' equity | 333,480 | 327,543 | 332,291 | 340,119 | 320,812 | |||||||||||||||
| AT PERIOD END | ||||||||||||||||||||
| Loans and loans held for sale | $ | 1,932,909 | $ | 1,873,524 | $ | 1,836,589 | $ | 1,789,740 | $ | 2,120,866 | ||||||||||
| Investment securities | 466,405 | 399,433 | 329,648 | 348,723 | 402,640 | |||||||||||||||
| Total assets | 2,719,658 | 2,910,379 | 2,410,198 | 2,389,680 | 2,855,887 | |||||||||||||||
| Deposits | 2,225,119 | 2,499,046 | 1,854,272 | 1,851,531 | 2,440,448 | |||||||||||||||
| Shareholders’ equity | 332,300 | 326,495 | 328,711 | 336,715 | 320,627 | |||||||||||||||
(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 March 31, 2020.
(5) The ratios for the first, second, and third quarters of 2019 are calculated on a continuing operations basis.
(6) Annualized.
ATLANTIC CAPITAL BANCSHARES, INC.
Financial Information from Discontinued Operations
Assets and Liabilities from Discontinued Operations
| (in thousands) | March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||
| Cash | $ | — | $ | — | $ | 4,168 | ||||
| Loans held for sale - discontinued operations | — | — | 384,779 | |||||||
| Premises held for sale - discontinued operations | — | — | 7,736 | |||||||
| Goodwill - discontinued operations | — | — | 4,555 | |||||||
| Other assets | — | — | 1,158 | |||||||
| Total assets | $ | — | $ | — | $ | 402,396 | ||||
| Deposits to be assumed - discontinued operations | $ | — | $ | — | $ | 593,264 | ||||
| Securities sold under agreements to repurchase - discontinued operations | — | — | 9,821 | |||||||
| Total liabilities | $ | — | $ | — | $ | 603,085 | ||||
| Net liabilities | $ | — | $ | — | $ | (200,689 | ) | |||
Components of Net Income (Loss) from Discontinued Operations
| 2020 | 2019 | |||||||||||||||||
| First | Fourth | Third | Second | First | ||||||||||||||
| (in thousands) | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||
| Net interest income | $ | — | $ | — | $ | — | $ | (39 | ) | $ | 3,125 | |||||||
| Provision for credit losses | — | — | — | — | — | |||||||||||||
| Net interest income after provision | — | — | — | (39 | ) | 3,125 | ||||||||||||
| Service charges | — | — | — | 46 | 481 | |||||||||||||
| Mortgage income | — | — | — | — | 288 | |||||||||||||
| Gain on sale of branches | — | — | — | 34,475 | — | |||||||||||||
| Other income | — | — | — | (22 | ) | 21 | ||||||||||||
| Total noninterest income | — | — | — | 34,499 | 790 | |||||||||||||
| Salaries and employee benefits | — | — | — | 330 | 2,427 | |||||||||||||
| Occupancy | — | — | — | 71 | 339 | |||||||||||||
| Equipment and software | — | — | — | 8 | 123 | |||||||||||||
| Amortization of intangibles | — | — | — | — | 247 | |||||||||||||
| Communications and data processing | — | — | — | 197 | 389 | |||||||||||||
| Divestiture expense | — | — | — | 3,646 | 1,449 | |||||||||||||
| Other noninterest expense | — | — | — | 101 | 358 | |||||||||||||
| Total noninterest expense | — | — | — | 4,353 | 5,332 | |||||||||||||
| Net income (loss) before provision for income taxes | — | — | — | 30,107 | (1,417 | ) | ||||||||||||
| Provision (benefit) for income taxes | — | — | (617 | ) | 7,964 | (354 | ) | |||||||||||
| Net income (loss) from discontinued operations | $ | — | $ | — | $ | 617 | $ | 22,143 | $ | (1,063 | ) | |||||||
ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
| March 31, | December 31, | March 31, | ||||||||||
| (in thousands, except share data) | 2020 | 2019 | 2019 | |||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 27,536 | $ | 45,249 | $ | 36,992 | ||||||
| Interest-bearing deposits in banks | 114,829 | 421,079 | 76,720 | |||||||||
| Other short-term investments | — | — | 29,457 | |||||||||
| Cash and cash equivalents | 142,365 | 466,328 | 143,169 | |||||||||
| Securities available for sale | 280,390 | 282,461 | 402,640 | |||||||||
| Securities held to maturity, net of allowance for credit losses of $14, $0 and $0 at March 31, 2020, December 31, 2019 and March 31, 2019, respectively (fair value of $189,940, $115,291 and $0 at March 31, 2020, December 31, 2019 and March 31, 2019, respectively) | 186,015 | 116,972 | — | |||||||||
| Other investments | 27,140 | 27,556 | 28,844 | |||||||||
| Loans held for sale | — | 370 | 1,530 | |||||||||
| Loans held for sale - discontinued operations(1) | — | — | 384,779 | |||||||||
| Loans held for investment(1) | 1,932,909 | 1,873,524 | 1,734,557 | |||||||||
| Less: allowance for loan losses | (24,896 | ) | (18,535 | ) | (18,107 | ) | ||||||
| Loans held for investment, net | 1,908,013 | 1,854,989 | 1,716,450 | |||||||||
| Premises held for sale - discontinued operations(1) | — | — | 7,736 | |||||||||
| Premises and equipment, net(1) | 22,533 | 22,536 | 23,311 | |||||||||
| Bank owned life insurance | 66,761 | 66,421 | 65,486 | |||||||||
| Goodwill - discontinued operations(1) | — | — | 4,555 | |||||||||
| Goodwill - continuing operations(1) | 19,925 | 19,925 | 17,135 | |||||||||
| Other intangibles, net | 2,785 | 3,027 | 4,241 | |||||||||
| Other real estate owned | 779 | 278 | 971 | |||||||||
| Other assets | 62,952 | 49,516 | 55,040 | |||||||||
| Total assets | $ | 2,719,658 | $ | 2,910,379 | $ | 2,855,887 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Noninterest-bearing demand(1) | $ | 712,919 | $ | 824,646 | $ | 561,829 | ||||||
| Interest-bearing checking(1) | 368,463 | 373,727 | 233,838 | |||||||||
| Savings(1) | 567 | 1,219 | 896 | |||||||||
| Money market(1) | 982,109 | 1,173,218 | 962,741 | |||||||||
| Time(1) | 66,793 | 44,389 | 22,069 | |||||||||
| Brokered deposits | 94,268 | 81,847 | 65,811 | |||||||||
| Deposits to be assumed - discontinued operations(1) | — | — | 593,264 | |||||||||
| Total deposits | 2,225,119 | 2,499,046 | 2,440,448 | |||||||||
| Federal funds purchased | 75,000 | — | — | |||||||||
| Securities sold under agreements to repurchase - discontinued operations(1) | — | — | 9,821 | |||||||||
| Long-term debt | 49,916 | 49,873 | 49,746 | |||||||||
| Other liabilities | 37,323 | 34,965 | 35,245 | |||||||||
| Total liabilities | 2,387,358 | 2,583,884 | 2,535,260 | |||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2020, December 31, 2019, and March 31, 2019 | — | — | — | |||||||||
| Common stock, no par value; 100,000,000 shares authorized; 21,479,986, 21,751,026, and 24,466,964 shares issued and outstanding as of March 31, 2020, December 31, 2019, and March 31, 2019; respectively | 224,233 | 230,265 | 276,346 | |||||||||
| Retained earnings | 93,721 | 91,669 | 47,191 | |||||||||
| Accumulated other comprehensive income (loss) | 14,346 | 4,561 | (2,910 | ) | ||||||||
| Total shareholders’ equity | 332,300 | 326,495 | 320,627 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,719,658 | $ | 2,910,379 | $ | 2,855,887 | ||||||
1) Assets and liabilities related to the sale of Tennessee and northwest Georgia banking operations were classified as held for sale as of March 31, 2019.
ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Statements of Income (unaudited)
| (in thousands, except share and per share data) | Three months ended | |||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||
| INTEREST INCOME | ||||||||||||||||||
| Loans, including fees | $ | 22,426 | $ | 23,175 | $ | 23,541 | $ | 23,554 | $ | 22,752 | ||||||||
| Investment securities | 2,732 | 2,413 | 2,176 | 2,339 | 2,631 | |||||||||||||
| Interest and dividends on other interest‑earning assets | 865 | 944 | 803 | 705 | 814 | |||||||||||||
| Total interest income | 26,023 | 26,532 | 26,520 | 26,598 | 26,197 | |||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||
| Interest on deposits | 4,182 | 4,890 | 5,223 | 5,448 | 4,831 | |||||||||||||
| Interest on Federal Home Loan Bank advances | — | 157 | 390 | 270 | — | |||||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase | 32 | 94 | 99 | 168 | 118 | |||||||||||||
| Interest on long-term debt | 829 | 824 | 824 | 823 | 824 | |||||||||||||
| Total interest expense | 5,043 | 5,965 | 6,536 | 6,709 | 5,773 | |||||||||||||
| NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES | 20,980 | 20,567 | 19,984 | 19,889 | 20,424 | |||||||||||||
| Provision for credit losses | 8,074 | 787 | 413 | 698 | 814 | |||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 12,906 | 19,780 | 19,571 | 19,191 | 19,610 | |||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||
| Service charges | 1,232 | 998 | 925 | 870 | 794 | |||||||||||||
| Gains (losses) on sale of securities | — | — | 253 | 654 | — | |||||||||||||
| Gains (losses) on sale of other assets | 5 | — | 140 | (10 | ) | (3 | ) | |||||||||||
| Derivatives income | 246 | 315 | (293 | ) | (233 | ) | (111 | ) | ||||||||||
| Bank owned life insurance | 362 | 375 | 422 | 389 | 360 | |||||||||||||
| SBA lending activities | 414 | 846 | 1,150 | 1,096 | 1,086 | |||||||||||||
| Other noninterest income | 163 | 145 | 172 | 175 | 210 | |||||||||||||
| Total noninterest income | 2,422 | 2,679 | 2,769 | 2,941 | 2,336 | |||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||
| Salaries and employee benefits | 8,476 | 8,500 | 8,295 | 8,529 | 9,213 | |||||||||||||
| Occupancy | 794 | 838 | 722 | 689 | 639 | |||||||||||||
| Equipment and software | 779 | 769 | 842 | 753 | 739 | |||||||||||||
| Professional services | 705 | 577 | 764 | 792 | 775 | |||||||||||||
| Communications and data processing | 897 | 1,066 | 796 | 662 | 675 | |||||||||||||
| Marketing and business development | 153 | 143 | 243 | 233 | 226 | |||||||||||||
| Travel, meals and entertainment | 140 | 175 | 152 | 186 | 166 | |||||||||||||
| FDIC premiums | — | — | (193 | ) | 175 | 235 | ||||||||||||
| Other noninterest expense | 933 | 1,314 | 1,056 | 1,235 | 1,127 | |||||||||||||
| Total noninterest expense | 12,877 | 13,382 | 12,677 | 13,254 | 13,795 | |||||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | 2,451 | 9,077 | 9,663 | 8,878 | 8,151 | |||||||||||||
| Provision for income taxes | 327 | 1,937 | 2,094 | 1,869 | 1,711 | |||||||||||||
| NET INCOME FROM CONTINUING OPERATIONS | 2,124 | 7,140 | 7,569 | 7,009 | 6,440 | |||||||||||||
| DISCONTINUED OPERATIONS | ||||||||||||||||||
| Income (loss) from discontinued operations | $ | — | $ | — | $ | — | $ | 30,107 | $ | (1,417 | ) | |||||||
| Provision (benefit) for income taxes | — | — | (617 | ) | 7,964 | (354 | ) | |||||||||||
| Net income (loss) from discontinued operations | — | — | 617 | 22,143 | (1,063 | ) | ||||||||||||
| NET INCOME | $ | 2,124 | $ | 7,140 | $ | 8,186 | $ | 29,152 | $ | 5,377 | ||||||||
| Net Income (Loss) per Common Share - Basic | ||||||||||||||||||
| Net income per common share - continuing operations | $ | 0.10 | $ | 0.33 | $ | 0.33 | $ | 0.29 | $ | 0.26 | ||||||||
| Net income (loss) per common share - discontinued operations | — | — | 0.03 | 0.93 | (0.04 | ) | ||||||||||||
| Net Income per Common Share - Basic | 0.10 | 0.33 | 0.36 | 1.22 | 0.22 | |||||||||||||
| Net Income (Loss) per Common Share - Diluted | ||||||||||||||||||
| Net income per common share - continuing operations | $ | 0.10 | $ | 0.32 | $ | 0.33 | $ | 0.29 | $ | 0.26 | ||||||||
| Net income (loss) per common share - discontinued operations | — | — | 0.03 | 0.92 | (0.04 | ) | ||||||||||||
| Net Income per Common Share - Diluted | 0.10 | 0.32 | 0.36 | 1.21 | 0.21 | |||||||||||||
| Weighted average shares - basic | 21,689,038 | 21,876,487 | 22,681,904 | 23,888,381 | 24,855,171 | |||||||||||||
| Weighted average shares - diluted | 21,842,175 | 22,053,907 | 22,837,531 | 24,040,806 | 25,019,384 | |||||||||||||
ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
| Three months ended | ||||||||||||||||||
| March 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 | $ | 177,063 | $ | 668 | 1.52 | % | $ | 174,589 | $ | 733 | 1.67 | % | ||||||
| Other short-term investments | 110 | — | — | — | — | — | ||||||||||||
| Investment securities: | ||||||||||||||||||
| Taxable investment securities | 253,937 | 1,680 | 2.66 | 242,175 | 1,570 | 2.57 | ||||||||||||
| Non-taxable investment securities(1) | 164,034 | 1,275 | 3.13 | 147,492 | 1,010 | 2.72 | ||||||||||||
| Total investment securities | 417,971 | 2,955 | 2.84 | 389,667 | 2,580 | 2.63 | ||||||||||||
| Loans | 1,890,184 | 22,426 | 4.77 | 1,857,736 | 23,175 | 4.95 | ||||||||||||
| FHLB and FRB stock | 12,678 | 197 | 6.25 | 14,106 | 211 | 5.93 | ||||||||||||
| Total interest-earning assets | 2,498,006 | 26,246 | 4.23 | 2,436,098 | 26,699 | 4.35 | ||||||||||||
| Non-earning assets | 188,260 | 190,290 | ||||||||||||||||
| Total assets | $ | 2,686,266 | $ | 2,626,388 | ||||||||||||||
| Liabilities | ||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||
| NOW, money market, and savings | 1,393,541 | 3,767 | 1.09 | 1,328,184 | 4,525 | 1.35 | ||||||||||||
| Time deposits | 55,775 | 52 | 0.37 | 37,388 | 52 | 0.55 | ||||||||||||
| Brokered deposits | 92,188 | 363 | 1.58 | 62,757 | 313 | 1.98 | ||||||||||||
| Total interest-bearing deposits | 1,541,504 | 4,182 | 1.09 | 1,428,329 | 4,890 | 1.36 | ||||||||||||
| Total borrowings | 11,703 | 32 | 1.10 | 54,706 | 252 | 1.83 | ||||||||||||
| Total long-term debt | 49,888 | 829 | 6.68 | 49,845 | 823 | 6.55 | ||||||||||||
| Total interest-bearing liabilities | 1,603,095 | 5,043 | 1.27 | 1,532,880 | 5,965 | 1.54 | ||||||||||||
| Demand deposits | 713,001 | 718,297 | ||||||||||||||||
| Other liabilities | 36,690 | 47,668 | ||||||||||||||||
| Shareholders’ equity | 333,480 | 327,543 | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,686,266 | $ | 2,626,388 | ||||||||||||||
| Net interest spread | 2.96 | % | 2.80 | % | ||||||||||||||
| Net interest income and net interest margin(2) | $ | 21,203 | 3.41 | % | $ | 20,734 | 3.38 | % | ||||||||||
| Non-taxable equivalent net interest margin | 3.38 | % | 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
| Three months ended | ||||||||||||||||||
| March 31, 2020 | March 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 | $ | 177,063 | $ | 668 | 1.52 | % | $ | 92,168 | $ | 463 | 2.04 | % | ||||||
| Other short-term investments | 110 | — | — | 11,680 | 86 | 2.99 | ||||||||||||
| Investment securities: | ||||||||||||||||||
| Taxable investment securities | 253,937 | 1,680 | 2.66 | 320,089 | 2,113 | 2.68 | ||||||||||||
| Non-taxable investment securities(1) | 164,034 | 1,275 | 3.13 | 80,012 | 618 | 3.13 | ||||||||||||
| Total investment securities | 417,971 | 2,955 | 2.84 | 400,101 | 2,731 | 2.77 | ||||||||||||
| Loans - continuing operations | 1,890,184 | 22,426 | 4.77 | 1,707,682 | 22,752 | 5.40 | ||||||||||||
| FHLB and FRB stock | 12,678 | 197 | 6.25 | 12,528 | 265 | 8.58 | ||||||||||||
| Total interest-earning assets - continuing operations | 2,498,006 | 26,246 | 4.23 | 2,224,159 | 26,297 | 4.80 | ||||||||||||
| Loans held for sale - discontinued operations | — | — | — | 381,783 | 4,541 | 4.82 | ||||||||||||
| Total interest-earning assets | 2,498,006 | 26,246 | 4.23 | 2,605,942 | 30,838 | 4.80 | ||||||||||||
| Non-earning assets | 188,260 | 223,130 | ||||||||||||||||
| Total assets | $ | 2,686,266 | $ | 2,829,072 | ||||||||||||||
| Liabilities | ||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||
| NOW, money market, and savings | 1,393,541 | 3,767 | 1.09 | 1,124,350 | 4,255 | 1.53 | ||||||||||||
| Time deposits | 55,775 | 52 | 0.37 | 12,847 | 38 | 1.20 | ||||||||||||
| Brokered deposits | 92,188 | 363 | 1.58 | 81,141 | 538 | 2.69 | ||||||||||||
| Total interest-bearing deposits | 1,541,504 | 4,182 | 1.09 | 1,218,338 | 4,831 | 1.61 | ||||||||||||
| Total borrowings | 11,703 | 32 | 1.10 | 18,056 | 118 | 2.65 | ||||||||||||
| Total long-term debt | 49,888 | 829 | 6.68 | 49,719 | 824 | 6.72 | ||||||||||||
| Total interest-bearing liabilities - continuing operations | 1,603,095 | 5,043 | 1.27 | 1,286,113 | 5,773 | 1.82 | ||||||||||||
| Interest-bearing liabilities - discontinued operations | — | — | — | 473,090 | 1,416 | 1.21 | ||||||||||||
| Total interest-bearing liabilities | 1,603,095 | 5,043 | 1.27 | 1,759,203 | 7,189 | 1.66 | ||||||||||||
| Demand deposits | 713,001 | 575,453 | ||||||||||||||||
| Demand deposits - discontinued operations | — | 128,977 | ||||||||||||||||
| Other liabilities | 36,690 | 44,627 | ||||||||||||||||
| Shareholders’ equity | 333,480 | 320,812 | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,686,266 | $ | 2,829,072 | ||||||||||||||
| Net interest spread - continuing operations | 2.96 | % | 2.98 | % | ||||||||||||||
| Net interest income and net interest margin - continuing operations(2) | $ | 21,203 | 3.41 | % | $ | 20,524 | 3.74 | % | ||||||||||
| Net interest income and net interest margin(2) | $ | 21,203 | 3.41 | % | $ | 23,649 | 3.68 | % | ||||||||||
| Non-taxable equivalent net interest margin | 3.38 | % | 3.66 | % | ||||||||||||||
(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 | |||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | Quarter | Year | ||||||||||||||||||||||
| (dollars in thousands) | 2020 | 2019 | 2019 | 2019 | 2019 | Change | Change | |||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||||
| Loans held for sale | $ | — | $ | 370 | $ | 916 | $ | — | $ | 1,530 | $ | (370 | ) | $ | (1,530 | ) | ||||||||||||
| Loans held for sale - discontinued operations | — | — | — | — | 384,779 | — | (384,779 | ) | ||||||||||||||||||||
| Total loans held for sale | $ | — | $ | 370 | $ | 916 | $ | — | $ | 386,309 | $ | (370 | ) | $ | (386,309 | ) | ||||||||||||
| Loans held for investment | ||||||||||||||||||||||||||||
| Commercial loans: | ||||||||||||||||||||||||||||
| Commercial and industrial | $ | 760,062 | $ | 705,115 | $ | 697,412 | $ | 701,566 | $ | 679,489 | $ | 54,947 | $ | 80,573 | ||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||
| Multifamily | 73,654 | 98,378 | 60,398 | 43,907 | 43,929 | (24,724 | ) | 29,725 | ||||||||||||||||||||
| Owner occupied | 359,026 | 357,912 | 352,842 | 313,310 | 304,945 | 1,114 | 54,081 | |||||||||||||||||||||
| Investment | 477,451 | 460,038 | 452,285 | 409,629 | 394,087 | 17,413 | 83,364 | |||||||||||||||||||||
| Construction and land: | ||||||||||||||||||||||||||||
| 1‑4 family residential construction | 2,706 | 4,009 | 5,186 | 3,696 | 2,067 | (1,303 | ) | 639 | ||||||||||||||||||||
| Other construction, development, and land | 124,116 | 123,531 | 139,991 | 195,260 | 171,818 | 585 | (47,702 | ) | ||||||||||||||||||||
| Mortgage warehouse loans | — | 13,941 | 23,256 | 10,665 | 22,267 | (13,941 | ) | (22,267 | ) | |||||||||||||||||||
| Total commercial loans | 1,797,015 | 1,762,924 | 1,731,370 | 1,678,033 | 1,618,602 | 34,091 | 178,413 | |||||||||||||||||||||
| Residential: | ||||||||||||||||||||||||||||
| Residential mortgages | 31,761 | 31,315 | 31,903 | 31,338 | 32,915 | 446 | (1,154 | ) | ||||||||||||||||||||
| Home equity | 23,479 | 25,002 | 25,638 | 24,303 | 23,171 | (1,523 | ) | 308 | ||||||||||||||||||||
| Total residential loans | 55,240 | 56,317 | 57,541 | 55,641 | 56,086 | (1,077 | ) | (846 | ) | |||||||||||||||||||
| Consumer | 58,164 | 37,765 | 27,168 | 34,618 | 35,203 | 20,399 | 22,961 | |||||||||||||||||||||
| Other | 25,488 | 19,552 | 22,533 | 24,126 | 26,663 | 5,936 | (1,175 | ) | ||||||||||||||||||||
| 1,935,907 | 1,876,558 | 1,838,612 | 1,792,418 | 1,736,554 | 59,349 | 199,353 | ||||||||||||||||||||||
| Less net deferred fees and other unearned income | (2,998 | ) | (3,034 | ) | (2,939 | ) | (2,678 | ) | (1,997 | ) | 36 | (1,001 | ) | |||||||||||||||
| Total loans held for investment | $ | 1,932,909 | $ | 1,873,524 | $ | 1,835,673 | $ | 1,789,740 | $ | 1,734,557 | $ | 59,385 | $ | 198,352 | ||||||||||||||
| Total loans | $ | 1,932,909 | $ | 1,873,894 | $ | 1,836,589 | $ | 1,789,740 | $ | 2,120,866 | $ | 59,015 | $ | (187,957 | ) | |||||||||||||
ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Credit Losses Activity and Credit Quality
| 2020 | 2019 | ||||||||||||||||||||
| First | Fourth | Third | Second | First | |||||||||||||||||
| (dollars in thousands) | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||
| Balance at beginning of period | $ | 18,535 | $ | 18,080 | $ | 18,186 | $ | 18,107 | $ | 17,851 | |||||||||||
| Adoption of ASU 2016-13 | (854 | ) | — | — | — | — | |||||||||||||||
| Provision for loan losses | 7,409 | 787 | 413 | 698 | 814 | ||||||||||||||||
| Loans charged-off: | |||||||||||||||||||||
| Commercial and industrial | (18 | ) | (344 | ) | (541 | ) | (588 | ) | (549 | ) | |||||||||||
| Commercial real estate | (78 | ) | — | — | (47 | ) | — | ||||||||||||||
| Construction and land | — | — | — | — | — | ||||||||||||||||
| Residential mortgages | — | — | — | — | (9 | ) | |||||||||||||||
| Home equity | (125 | ) | — | — | — | — | |||||||||||||||
| Consumer | — | — | (2 | ) | — | (37 | ) | ||||||||||||||
| Other | — | — | — | — | — | ||||||||||||||||
| Total loans charged-off | (221 | ) | (344 | ) | (543 | ) | (635 | ) | (595 | ) | |||||||||||
| Recoveries on loans previously charged-off: | |||||||||||||||||||||
| Commercial and industrial | — | 5 | 17 | — | 14 | ||||||||||||||||
| Commercial real estate | 18 | — | — | — | — | ||||||||||||||||
| Construction and land | — | — | 1 | — | 3 | ||||||||||||||||
| Residential mortgages | 1 | 7 | — | — | 7 | ||||||||||||||||
| Home equity | — | — | — | — | 1 | ||||||||||||||||
| Consumer | 8 | — | 6 | 16 | 12 | ||||||||||||||||
| Other | — | — | — | — | — | ||||||||||||||||
| Total recoveries | 27 | 12 | 24 | 16 | 37 | ||||||||||||||||
| Net charge-offs | $ | (194 | ) | $ | (332 | ) | $ | (519 | ) | $ | (619 | ) | $ | (558 | ) | ||||||
| Balance at period end | $ | 24,896 | $ | 18,535 | $ | 18,080 | $ | 18,186 | $ | 18,107 | |||||||||||
| Allowance for unfunded commitments | |||||||||||||||||||||
| Balance at beginning of period | $ | 892 | $ | 836 | $ | 785 | $ | 631 | $ | 653 | |||||||||||
| Adoption of ASU 2016-13 | 1,275 | — | — | — | — | ||||||||||||||||
| Provision for unfunded commitments | 671 | 56 | 51 | 154 | (22 | ) | |||||||||||||||
| Balance at period end | $ | 2,838 | $ | 892 | $ | 836 | $ | 785 | $ | 631 | |||||||||||
| Total allowance for credit losses - loans and unfunded commitments | $ | 27,734 | $ | 19,427 | $ | 18,916 | $ | 18,971 | $ | 18,738 | |||||||||||
| Provision for credit losses under CECL | |||||||||||||||||||||
| Provision for loan losses | 7,409 | 787 | 413 | 698 | 814 | ||||||||||||||||
| Provision for securities held to maturity credit losses | (6 | ) | - | - | - | - | |||||||||||||||
| Provision for unfunded commitments(1) | 671 | - | - | - | - | ||||||||||||||||
| Total provision for credit losses | $ | 8,074 | $ | 787 | $ | 413 | $ | 698 | $ | 814 | |||||||||||
| Non-performing loans - continuing operations | $ | 6,515 | $ | 7,293 | $ | 6,770 | $ | 6,352 | $ | 8,830 | |||||||||||
| Non-performing loans - discontinued operations | — | — | — | — | 1,506 | ||||||||||||||||
| Total nonperforming loans | 6,515 | 7,293 | 6,770 | 6,352 | 10,336 | ||||||||||||||||
| Foreclosed properties (OREO) | 779 | 278 | 278 | 971 | 971 | ||||||||||||||||
| Total nonperforming assets | $ | 7,294 | $ | 7,571 | $ | 7,048 | $ | 7,323 | $ | 11,307 | |||||||||||
| Allowance for loan losses to loans held for investment (2) | 1.29 | % | 0.99 | % | 0.98 | % | 1.02 | % | 1.04 | % | |||||||||||
| Net charge-offs to average loans (3) | 0.04 | 0.07 | 0.11 | 0.14 | 0.11 | ||||||||||||||||
| Non-performing loans as a percentage of total loans | |||||||||||||||||||||
| Continuing operations | 0.34 | % | 0.39 | % | 0.37 | % | 0.35 | % | 0.51 | % | |||||||||||
| Discontinued operations | — | — | — | — | 0.39 | ||||||||||||||||
| Total | 0.34 | 0.39 | 0.37 | 0.35 | 0.49 | ||||||||||||||||
| Non-performing assets as a percentage of total assets | |||||||||||||||||||||
| Continuing operations | 0.27 | % | 0.26 | % | 0.29 | % | 0.31 | % | 0.34 | % | |||||||||||
| Discontinued operations | — | — | — | — | 0.05 | ||||||||||||||||
| Total | 0.27 | 0.26 | 0.29 | 0.31 | 0.40 | ||||||||||||||||
(1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $56, $51, $154 and ($22) for the fourth, third, second, and first quarters of 2019, respectively.
(2) The third, second, and first quarters of 2019 ratios are calculated on a continuing operations basis.
(3) Annualized.
ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits
| Linked | |||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | Quarter | Year Over | |||||||||||||||||
| (dollars in thousands) | 2020 | 2019 | 2019 | 2019 | 2019 | Change | Year Change | ||||||||||||||||
| DDA | $ | 712,919 | $ | 824,646 | $ | 599,657 | $ | 569,693 | $ | 561,829 | $ | (111,727 | ) | $ | 151,090 | ||||||||
| NOW | 368,463 | 373,727 | 240,427 | 309,709 | 233,838 | (5,264 | ) | 134,625 | |||||||||||||||
| Savings | 567 | 1,219 | 1,081 | 1,090 | 896 | (652 | ) | (329 | ) | ||||||||||||||
| Money market | 982,109 | 1,173,218 | 921,133 | 802,973 | 962,741 | (191,109 | ) | 19,368 | |||||||||||||||
| Time | 66,793 | 44,389 | 30,782 | 33,902 | 22,069 | 22,404 | 44,724 | ||||||||||||||||
| Brokered | 94,268 | 81,847 | 61,192 | 134,164 | 65,811 | 12,421 | 28,457 | ||||||||||||||||
| Total deposits - continuing operations | 2,225,119 | 2,499,046 | 1,854,272 | 1,851,531 | 1,847,184 | (273,927 | ) | 377,935 | |||||||||||||||
| Deposits to be assumed - discontinued operations | — | — | — | — | 593,264 | — | (593,264 | ) | |||||||||||||||
| Total deposits | $ | 2,225,119 | $ | 2,499,046 | $ | 1,854,272 | $ | 1,851,531 | $ | 2,440,448 | $ | (273,927 | ) | $ | (215,329 | ) | |||||||
| Payments clients | $ | 483,585 | $ | 567,597 | $ | 286,373 | $ | 301,413 | $ | 361,192 | $ | (84,012 | ) | $ | 122,393 | ||||||||
Average Deposits
| 2020 | 2019 | Linked | |||||||||||||||||||||
| First | Fourth | Third | Second | First | Quarter | Q1 2020 vs | |||||||||||||||||
| (dollars in thousands) | Quarter | Quarter | Quarter | Quarter | Quarter | Change | Q1 2019 | ||||||||||||||||
| DDA | $ | 713,001 | $ | 718,298 | $ | 637,809 | $ | 587,957 | $ | 575,453 | $ | (5,297 | ) | $ | 137,548 | ||||||||
| NOW | 382,178 | 320,637 | 295,106 | 314,601 | 276,212 | 61,541 | 105,966 | ||||||||||||||||
| Savings | 650 | 1,098 | 1,085 | 956 | 884 | (448 | ) | (234 | ) | ||||||||||||||
| Money market | 1,010,713 | 1,006,449 | 895,102 | 859,680 | 847,254 | 4,264 | 163,459 | ||||||||||||||||
| Time | 55,775 | 37,388 | 32,409 | 32,358 | 12,847 | 18,387 | 42,928 | ||||||||||||||||
| Brokered | 92,188 | 62,757 | 88,146 | 106,524 | 81,141 | 29,431 | 11,047 | ||||||||||||||||
| Total deposits - continuing operations | 2,254,505 | 2,146,627 | 1,949,657 | 1,902,076 | 1,793,791 | 107,878 | 460,714 | ||||||||||||||||
| Deposits to be assumed - discontinued operations | — | — | — | 45,350 | 593,313 | — | (593,313 | ) | |||||||||||||||
| Total deposits | $ | 2,254,505 | $ | 2,146,627 | $ | 1,949,657 | $ | 1,947,426 | $ | 2,387,104 | $ | 107,878 | $ | (132,599 | ) | ||||||||
| Payments clients | $ | 419,630 | $ | 362,327 | $ | 289,526 | $ | 285,949 | $ | 295,059 | $ | 57,303 | $ | 124,571 | |||||||||
| Noninterest bearing deposits as a percentage of average deposits - continuing operations | 31.6 | % | 33.5 | % | 32.7 | % | 30.9 | % | 32.1 | % | |||||||||||||
| Cost of interest-bearing deposits - continuing operations | 1.09 | % | 1.36 | % | 1.58 | % | 1.66 | % | 1.61 | % | |||||||||||||
| Cost of deposits - continuing operations | 0.75 | % | 0.90 | % | 1.06 | % | 1.15 | % | 1.09 | % | |||||||||||||
ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
| 2020 | 2019 | ||||||||||||||||||||
| First | Fourth | Third | Second | First | |||||||||||||||||
| (in thousands, except share and per share data) | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||
| Taxable equivalent interest income reconciliation | |||||||||||||||||||||
| Interest income - GAAP | $ | 26,023 | $ | 26,532 | $ | 26,520 | $ | 26,598 | $ | 26,197 | |||||||||||
| Taxable equivalent adjustment | 223 | 167 | 104 | 88 | 100 | ||||||||||||||||
| Interest income - taxable equivalent | $ | 26,246 | $ | 26,699 | $ | 26,624 | $ | 26,686 | $ | 26,297 | |||||||||||
| Taxable equivalent net interest income reconciliation - continuing operations | |||||||||||||||||||||
| Net interest income - GAAP | $ | 20,980 | $ | 20,567 | $ | 19,984 | $ | 19,889 | $ | 20,424 | |||||||||||
| Taxable equivalent adjustment | 223 | 167 | 104 | 88 | 100 | ||||||||||||||||
| Net interest income - taxable equivalent - continuing operations | $ | 21,203 | $ | 20,734 | $ | 20,088 | $ | 19,977 | $ | 20,524 | |||||||||||
| Taxable equivalent net interest margin reconciliation - continuing operations | |||||||||||||||||||||
| Net interest margin - GAAP - continuing operations | 3.38 | % | 3.35 | % | 3.51 | % | 3.60 | % | 3.72 | % | |||||||||||
| Impact of taxable equivalent adjustment | 0.03 | 0.03 | 0.01 | 0.01 | 0.02 | ||||||||||||||||
| Net interest margin - taxable equivalent - continuing operations | 3.41 | % | 3.38 | % | 3.52 | % | 3.61 | % | 3.74 | % | |||||||||||
| Taxable equivalent net interest margin reconciliation | |||||||||||||||||||||
| Net interest margin - GAAP | 3.38 | % | 3.35 | % | 3.51 | % | 3.54 | % | 3.66 | % | |||||||||||
| Impact of taxable equivalent adjustment | 0.03 | 0.03 | 0.01 | 0.02 | 0.02 | ||||||||||||||||
| Net interest margin - taxable equivalent | 3.41 | % | 3.38 | % | 3.52 | % | 3.56 | % | 3.68 | % | |||||||||||
| Income before income taxes reconciliation | |||||||||||||||||||||
| Income before income taxes - GAAP | $ | 2,451 | $ | 9,077 | $ | 9,663 | $ | 8,878 | $ | 8,151 | |||||||||||
| Taxable equivalent adjustment | 223 | 167 | 104 | 88 | 100 | ||||||||||||||||
| Income before income taxes | $ | 2,674 | $ | 9,244 | $ | 9,767 | $ | 8,966 | $ | 8,251 | |||||||||||
| Income tax reconciliation | |||||||||||||||||||||
| Income tax expense - GAAP | $ | 327 | $ | 1,937 | $ | 2,094 | $ | 1,869 | $ | 1,711 | |||||||||||
| Taxable equivalent adjustment | 223 | 167 | 104 | 88 | 100 | ||||||||||||||||
| Income tax expense | $ | 550 | $ | 2,104 | $ | 2,198 | $ | 1,957 | $ | 1,811 | |||||||||||
| Tangible book value per common share reconciliation | |||||||||||||||||||||
| Total shareholders’ equity | $ | 332,300 | $ | 326,495 | $ | 328,711 | $ | 336,715 | $ | 320,627 | |||||||||||
| Intangible assets | (19,925 | ) | (19,925 | ) | (19,925 | ) | (19,925 | ) | (22,848 | ) | |||||||||||
| Total tangible common equity | $ | 312,375 | $ | 306,570 | $ | 308,786 | $ | 316,790 | $ | 297,779 | |||||||||||
| Common shares outstanding | 21,479,986 | 21,751,026 | 22,193,761 | 23,293,465 | 24,466,964 | ||||||||||||||||
| Book value per common share - GAAP | $ | 15.47 | $ | 15.01 | $ | 14.81 | $ | 14.46 | $ | 13.10 | |||||||||||
| Tangible book value | 14.54 | 14.09 | 13.91 | 13.60 | 12.17 | ||||||||||||||||
| Tangible common equity to tangible assets reconciliation | |||||||||||||||||||||
| Total shareholders’ equity | $ | 332,300 | $ | 326,495 | $ | 328,711 | $ | 336,715 | $ | 320,627 | |||||||||||
| Intangible assets | (19,925 | ) | (19,925 | ) | (19,925 | ) | (19,925 | ) | (22,848 | ) | |||||||||||
| Total tangible common equity | $ | 312,375 | $ | 306,570 | $ | 308,786 | $ | 316,790 | $ | 297,779 | |||||||||||
| Total assets | $ | 2,719,658 | $ | 2,910,379 | $ | 2,410,198 | $ | 2,389,680 | $ | 2,855,887 | |||||||||||
| Intangible assets | (19,925 | ) | (19,925 | ) | (19,925 | ) | (19,925 | ) | (22,848 | ) | |||||||||||
| Total tangible assets | $ | 2,699,733 | $ | 2,890,454 | $ | 2,390,273 | $ | 2,369,755 | $ | 2,833,039 | |||||||||||
| Tangible common equity to tangible assets | 11.57 | % | 10.61 | % | 12.92 | % | 13.37 | % | 10.51 | % | |||||||||||