Atlantic Capital Bancshares, Inc. Reports First Quarter

ATLANTA, April 22, 2021 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income for the quarter ended March 31, 2021 of $13.4 million, or $0.65 per diluted share, compared to $2.2 million, or $0.10 per diluted share, for the first quarter of 2020 and $10.0 million, or $0.48 per diluted share, for the fourth quarter of 2020.

“Atlantic Capital reported another quarter of strong revenue growth despite lower interest rates and soft loan demand. As the economic recovery has gained strength, our borrowers’ performance has improved which has resulted in a reduction in the allowance for credit losses. We anticipate these trends in revenue growth and credit quality improvement to continue over the balance of the year,” remarked Douglas Williams, President and Chief Executive Officer.

First Quarter Highlights(1)

Total assets of $3.7 billion, compared to $3.6 billion at December 31, 2020 and $2.7 billion at March 31, 2020.
Loans held for investment increased $51.2 million, or 9% annualized, from December 31, 2020 and increased $367.9 million, or 19%, from March 31, 2020.
Quarterly average deposits increased $282.5 million, or 39% annualized, compared to the fourth quarter of 2020 and increased $902.4 million, or 40%, compared to the first quarter of 2020.
Cost of deposits decreased to 0.12% from 0.16% in the fourth quarter of 2020 and from 0.75% in the first quarter of 2020.
Tangible book value per share increased to $15.74 from $15.62 at December 31, 2020 and from $14.54 at March 31, 2020.
Annualized net charge-offs to average loans totaled 0.04% for the first quarter of 2021 and non-performing assets to total assets were 0.06% at March 31, 2021.
The allowance for credit losses was 1.31% of total loans held for investment at March 31, 2021, compared to 1.55% at December 31, 2020.
Repurchased 222,000 shares in the first quarter of 2021 totaling $4.2 million at an average price of $18.87. As of March 31, 2021, approximately $3.1 million remained from our $25 million share repurchase program.

Income Statement

Taxable equivalent net interest income totaled $23.7 million for the first quarter of 2021, an increase of $2.5 million, or 12%, from the first quarter of 2020, and an increase of $721,000, or 13% annualized, from the fourth quarter of 2020. The first quarter of 2021 included $2.2 million in Paycheck Protection Program (“PPP”) loan income compared to $2.3 million in the fourth quarter of 2020.

Taxable equivalent net interest margin was 2.81% in the first quarter of 2021, compared to 3.41% in the first quarter of 2020 and 2.91% in the fourth quarter of 2020. The linked quarter decrease in net interest margin was primarily due to the impact of the increase in deposits and corresponding increase in cash balances.

The yield on loans in the first quarter of 2021 was 3.89%, a decrease of 88 basis points from the first quarter of 2020 and unchanged from the fourth quarter of 2020. Excluding the PPP loans, the first quarter of 2021 loan yield was 3.83%, a decrease of 3 basis points compared to the fourth quarter of 2020.

The cost of deposits in the first quarter of 2021 was 0.12%, a decrease of 63 basis points from the first quarter of 2020 and a decrease of 4 basis points from the fourth quarter of 2020. The cost of interest bearing deposits decreased 90 basis points to 0.19% from the first quarter of 2020, and decreased 6 basis points from the fourth quarter of 2020.

In the first quarter of 2021, we recorded a negative provision for credit losses of $4.5 million compared to a provision for credit losses of $8.1 million in the first quarter of 2020 and $481,000 in the fourth quarter of 2020. The first quarter of 2021 provision for credit losses included a negative provision for loan losses of $4.1 million and a negative provision for unfunded commitments of $445,000.

Noninterest income totaled $3.6 million in the first quarter of 2021 compared to $2.4 million in the first quarter of 2020 and $3.0 million in the fourth quarter of 2020. Service charge income in the first quarter of 2021 totaled $1.7 million, an increase of $431,000 compared to the first quarter of 2020, and an increase of $322,000 from the fourth quarter of 2020. The increase in service charge income was primarily due to growth in our payments, fintech and private capital solution businesses. SBA income in the first quarter of 2021 totaled $1.2 million, compared to $414,000 in the first quarter of 2020 and $1.0 million in the fourth quarter of 2020. The increase was primarily from higher SBA origination volume and higher SBA premiums in the secondary market.

Noninterest expense totaled $15.1 million in the first quarter of 2021, compared to $12.9 million in the first quarter of 2020 and $13.2 million in the fourth quarter of 2020. Salaries and employee benefits expense totaled $10.4 million in the first quarter of 2021, an increase of $2.0 million compared to the fourth quarter of 2020. Salaries and employee benefits expense in the first quarter of 2021 included approximately a $700,000 seasonal increase in benefit costs and $255,000 in contract labor expense for PPP round two loan processing. In addition, the first quarter of 2021 included an increase in short-term and long-term incentive costs, along with the partial impact of eight net new hires and merit increases during the quarter. Professional services expense in the first quarter totaled $922,000 and included approximately $200,000 in consulting expense for PPP round two loan processing and PPP round one loan forgiveness.

(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 12.

Balance Sheet

Total loans held for investment were $2.3 billion at March 31, 2021, an increase of $367.9 million, or 19%, from March 31, 2020 and an increase of $51.8 million, or 9% annualized, from December 31, 2020. PPP loans totaled $218.8 million at March 31, 2021, an increase of $26.6 million compared to December 31, 2020, and included $72.8 million in new round two PPP loans offset by $46.2 million in forgiven round one PPP loans.

The allowance for credit losses was 1.31% of total loans held for investment at March 31, 2021, compared to 1.55% at December 31, 2020. The decrease in the allowance was a result of an improvement in the new Current Expected Credit Losses, or CECL economic forecast along with credit rating upgrades for criticized and classified loans. Excluding the impact of PPP loans, the allowance for credit losses at March 31, 2021 was 1.45%, compared to 1.70% at December 31, 2020.

Total average deposits were $3.2 billion for the first quarter of 2021, an increase of $902.4 million, or 40%, from the first quarter of 2020 and an increase of $282.5 million, or 39% annualized, from the fourth quarter of 2020. Average noninterest bearing deposits were $1.1 billion for the first quarter of 2021, an increase of $423.5 million, or 59%, from the first quarter of 2020 and an increase of $159.5 million, or 66% annualized, from the fourth quarter of 2020. Noninterest bearing deposits were 36.0% of total average deposits in the first quarter of 2021, compared to 31.6% in the first quarter of 2020 and 34.0% in the fourth quarter of 2020.

Tangible common equity to tangible assets decreased to 8.6% at March 31, 2021 compared to 8.9% at December 31, 2020, due to the impact from the first quarter growth in deposits and its corresponding increase on the level of total tangible assets. Cash and cash equivalents were $645.8 million and total assets were $3.7 billion at March 31, 2021 compared to cash and cash equivalents of $142.4 million and total assets of $2.7 billion at March 31, 2020.

Earnings Conference Call

Atlantic Capital will host a conference call at 1:00 p.m. ET on Friday, April 23, 2021, to discuss the financial results for the quarter ended March 31, 2021. Individuals wishing to participate in the conference call may do so by dialing 833-685-0902 from the United States. The call will also be available live via webcast on the Investor Relations page of our website, www.atlanticcapitalbank.com. A presentation will be used during the earnings conference call and is available at https://atlanticcapitalbank.q4ir.com/news-market-data/presentations/default.aspx.

Non-GAAP Financial Measures

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) taxable equivalent interest income; (ii) taxable equivalent net interest income; (iii) loan yield excluding PPP loans; (iv) taxable equivalent net interest margin; (v) taxable equivalent net interest margin excluding PPP loans; (vi) taxable equivalent income before income taxes; (vii) taxable equivalent income tax expense; (viii) tangible common equity to tangible assets; (ix) tangible book value per common share, and (x) 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. Please refer to the SEC’s website at www.sec.gov where you can review those documents.

About Atlantic Capital Bancshares

Atlantic Capital Bancshares, Inc. is a $3.7 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 payments and other specialized financial services for select clients nationally.

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

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

ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information


	2021				2020												First Quarter 2021
(in thousands, except share and per share data;	First				Fourth			Third			Second			First
taxable equivalent)	Quarter				Quarter			Quarter			Quarter			Quarter			First Quarter 2021	to 2020
INCOME SUMMARY
Interest income - taxable equivalent ⁽¹⁾	$	25,775			$	25,288		$	24,578		$	24,151		$	26,246			(2	)	%
Interest expense		2,065				2,299			2,515			2,166			5,043			(59	)
Net interest income - taxable equivalent		23,710				22,989			22,063			21,985			21,203			12
Provision for credit losses		(4,519	)			481			28			8,863			8,074			(156	)
Net interest income after provision for credit losses		28,229				22,508			22,035			13,122			13,129			115
Noninterest income		3,562				3,016			2,504			2,343			2,422			47
Noninterest expense		15,149				13,164			13,713			12,904			12,877			18
Income before income taxes		16,642				12,360			10,826			2,561			2,674			522
Income tax expense		3,280				2,410			2,208			712			550			496
Net income⁽¹⁾⁽²⁾	$	13,362			$	9,950		$	8,618		$	1,849		$	2,124			529		%

PER SHARE DATA
Diluted earnings per share	$	0.65			$	0.48		$	0.40		$	0.09		$	0.10
Book value per share		16.72				16.60			16.05			15.64			15.47
Tangible book value per common share ⁽²⁾		15.74				15.62			15.11			14.72			14.54

PERFORMANCE MEASURES
Return on average equity		15.99		%		11.68	%		10.05	%		2.20	%		2.56	%
Return on average assets		1.50				1.19			1.15			0.25			0.32
Taxable equivalent net interest margin		2.81				2.91			3.14			3.23			3.41
Taxable equivalent net interest margin excluding PPP loans		2.70				2.81			3.18			3.35			3.41
Efficiency ratio		56.30				51.30			56.61			53.82			55.03
Average loans to average deposits		71.93				76.81			88.65			88.46			83.84
CAPITAL
Average equity to average assets		9.39		%		10.18	%		11.45	%		11.53	%		12.41	%
Tangible common equity to tangible assets		8.63				8.86			11.03			11.01			11.57
Leverage ratio		8.4		⁽³⁾		8.9			9.9			9.9			10.7
Total risk based capital ratio		16.4		⁽³⁾		16.1			16.9			14.8			14.9

SHARES OUTSTANDING
Number of common shares outstanding - basic		20,354,077				20,394,912			21,202,783			21,477,631			21,479,986
Number of common shares outstanding - diluted		20,617,188				20,492,542			21,298,098			21,569,050			21,675,934
Average number of common shares - basic		20,380,066				20,711,089			21,500,735			21,472,462			21,689,038
Average number of common shares - diluted		20,502,184				20,795,332			21,543,805			21,535,040			21,842,175

ASSET QUALITY
Allowance for credit losses to loans held for investment		1.31		%		1.55	%		1.59	%		1.61	%		1.43	%
Net charge-offs to average loans ⁽⁴⁾		0.04				0.05			0.06			0.29			0.04
Non-performing assets to total assets		0.06				0.13			0.20			0.24			0.27

AVERAGE BALANCES
Total loans	$	2,270,660			$	2,207,956		$	2,191,669		$	2,131,847		$	1,890,184
Investment securities		579,547				491,134			453,382			462,850			417,971
Total assets		3,611,417				3,328,719			2,977,444			2,932,716			2,686,266
Deposits		3,156,906				2,874,402			2,472,218			2,409,958			2,254,505
Shareholders' equity		338,990				338,948			341,017			338,027			333,480

AT PERIOD END
Loans and loans held for sale	$	2,302,661			$	2,249,036		$	2,188,894		$	2,185,847		$	1,932,909
Investment securities		613,236				535,579			446,706			457,749			466,405
Total assets		3,732,668				3,615,617			2,923,977			2,890,622			2,719,658
Deposits		3,277,692				3,161,508			2,468,722			2,407,631			2,225,119
Shareholders’ equity		340,328				338,586			340,309			335,980			332,300

⁽¹⁾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.
⁽²⁾Excludes effect of acquisition related intangibles.
⁽³⁾Amounts are estimates as of March 31, 2021.
⁽⁴⁾Annualized.

ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)

	March 31,			December 31,			March 31,
(in thousands, except share data)	2021			2020			2020
ASSETS
Cash and due from banks	$	32,850		$	16,865		$	27,536
Interest-bearing deposits in banks		612,966			636,537			114,829
Cash and cash equivalents		645,816			653,402			142,365
Investment securities available for sale		390,701			335,423			280,390
Investment securities held to maturity, net of allowance for credit losses of $14 at March 31, 2021, December 31, 2020 and March 31, 2020, respectively		222,535			200,156			186,015
Other investments		24,709			25,892			27,140
Loans held for sale		1,847			—			—
Loans held for investment		2,300,814			2,249,036			1,932,909
Less: allowance for loan losses		(27,506	)		(31,818	)		(24,896	)
Loans held for investment, net		2,273,308			2,217,218			1,908,013
Premises and equipment, net		20,633			21,589			22,533
Bank owned life insurance		73,223			72,856			66,761
Goodwill		19,925			19,925			19,925
Other intangibles, net		2,688			2,731			2,785
Other real estate owned		16			16			779
Other assets		57,267			66,409			62,952
Total assets	$	3,732,668		$	3,615,617		$	2,719,658

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	1,280,524		$	1,033,765		$	712,919
Interest-bearing checking		485,540			760,638			368,463
Savings		562			625			567
Money market		1,142,361			1,030,753			982,109
Time		294,129			241,328			66,793
Brokered deposits		74,576			94,399			94,268
Total deposits		3,277,692			3,161,508			2,225,119
Federal funds purchased		—			—			75,000
Long-term debt		73,878			73,807			49,916
Other liabilities		40,770			41,716			37,323
Total liabilities		3,392,340			3,277,031			2,387,358

SHAREHOLDERS’ EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2021, December 31, 2020 and March 31, 2020		—			—			—
Common stock, no par value; 100,000,000 shares authorized; 20,354,077, 20,394,912, and 21,479,986 shares issued and outstanding as of March 31, 2021, December 31, 2020 and March 31, 2020, respectively		207,047			209,942			224,233
Retained earnings		127,499			114,137			93,721
Accumulated other comprehensive income		5,782			14,507			14,346
Total shareholders’ equity		340,328			338,586			332,300
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,732,668		$	3,615,617		$	2,719,658

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,
	2021			2020			2020			2020			2020
INTEREST INCOME
Loans, including fees	$	21,769		$	21,609		$	21,049		$	20,496		$	22,426
Investment securities		3,374			3,000			2,910			3,041			2,732
Interest and dividends on other interest‑earning assets		267			334			274			260			865
Total interest income		25,410			24,943			24,233			23,797			26,023
INTEREST EXPENSE
Interest on deposits		971			1,188			1,151			1,299			4,182
Interest on Federal Home Loan Bank advances		—			—			16			38			—
Interest on federal funds purchased and securities sold under agreements to repurchase		—			—			3			6			32
Interest on long-term debt		1,094			1,111			1,345			823			829
Total interest expense		2,065			2,299			2,515			2,166			5,043
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES		23,345			22,644			21,718			21,631			20,980
Provision for credit losses		(4,519	)		481			28			8,863			8,074
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		27,864			22,163			21,690			12,768			12,906
NONINTEREST INCOME
Service charges		1,663			1,341			1,217			1,081			1,232
Gains (losses) on sale of securities		2			(23	)		—			—			—
(Losses) gains on sale of other assets		—			(6	)		(145	)		—			5
Derivatives income (loss)		47			11			10			(10	)		246
Bank owned life insurance		391			368			363			367			362
SBA lending activities		1,225			1,015			893			782			414
Other noninterest income		234			310			166			123			163
Total noninterest income		3,562			3,016			2,504			2,343			2,422
NONINTEREST EXPENSE
Salaries and employee benefits		10,421			8,437			8,850			8,466			8,476
Occupancy		734			767			739			883			794
Equipment and software		774			969			826			763			779
Professional services		922			686			562			792			705
Communications and data processing		792			789			757			670			897
Marketing and business development		108			144			141			79			153
Travel, meals and entertainment		10			14			39			34			140
FDIC premiums		275			241			213			175			—
Other noninterest expense		1,113			1,117			1,586			1,042			933
Total noninterest expense		15,149			13,164			13,713			12,904			12,877

INCOME BEFORE PROVISION FOR INCOME TAXES		16,277			12,015			10,481			2,207			2,451
Provision for income taxes		2,915			2,065			1,863			358			327
NET INCOME	$	13,362		$	9,950		$	8,618		$	1,849		$	2,124

Net income per common share - basic	$	0.66		$	0.48		$	0.40		$	0.09		$	0.10
Net income per common share - diluted	$	0.65		$	0.48		$	0.40		$	0.09		$	0.10

Weighted average shares - basic		20,380,066			20,711,089			21,500,735			21,472,462			21,689,038
Weighted average shares - diluted		20,502,184			20,795,332			21,543,805			21,535,040			21,842,175

ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
	Three months ended
	March 31, 2021						December 31, 2020
			Interest		Tax				Interest		Tax
	Average		Income/		Equivalent		Average		Income/		Equivalent
(dollars in thousands; taxable equivalent)	Balance		Expense		Yield/Rate		Balance		Expense		Yield/Rate
Assets
Interest bearing deposits in other banks	$	561,809	$	168	0.12	%	$	435,939	$	141	0.13	%
Investment securities:
Taxable investment securities		356,250		1,898	2.16			275,872		1,587	2.29
Non-taxable investment securities ⁽¹⁾		223,297		1,841	3.34			215,262		1,758	3.25
Total investment securities		579,547		3,739	2.62			491,134		3,345	2.71
Loans		2,270,660		21,769	3.89			2,207,956		21,609	3.89
FHLB and FRB stock		12,701		99	3.17			12,699		193	6.05
Total interest-earning assets		3,424,717		25,775	3.05			3,147,728		25,288	3.20
Non-earning assets		186,700						180,991
Total assets	$	3,611,417					$	3,328,719
Liabilities
Interest bearing deposits:
NOW, money market, and savings		1,662,097		834	0.20			1,585,928		1,043	0.26
Time deposits		273,615		74	0.11			221,792		72	0.13
Brokered deposits		84,663		63	0.30			89,673		73	0.32
Total interest-bearing deposits		2,020,375		971	0.19			1,897,393		1,188	0.25
Total long-term debt		73,830		1,094	6.01			73,811		1,111	5.99
Total interest-bearing liabilities		2,094,205		2,065	0.40			1,971,204		2,299	0.46
Demand deposits		1,136,531						977,009
Other liabilities		41,691						41,558
Shareholders’ equity		338,990						338,948
Total liabilities and shareholders’ equity	$	3,611,417					$	3,328,719
Net interest spread					2.65	%					2.73	%
Net interest income and net interest margin ⁽²⁾			$	23,710	2.81	%			$	22,989	2.91	%

Non-taxable equivalent net interest margin					2.76	%					2.86	%

⁽¹⁾ Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.
⁽²⁾ Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.


	Three months ended
	March 31, 2021						March 31, 2020
			Interest		Tax				Interest		Tax
	Average		Income/		Equivalent		Average		Income/		Equivalent
(dollars in thousands; taxable equivalent)	Balance		Expense		Yield/Rate		Balance		Expense		Yield/Rate
Assets
Interest bearing deposits in other banks	$	561,809	$	168	0.12	%	$	177,063	$	668	1.52	%
Other short-term investments		—		—	—			110		—	—
Investment securities:
Taxable investment securities		356,250		1,898	2.16			253,937		1,680	2.66
Non-taxable investment securities ⁽¹⁾		223,297		1,841	3.34			164,034		1,275	3.13
Total investment securities		579,547		3,739	2.62			417,971		2,955	2.84
Loans		2,270,660		21,769	3.89			1,890,184		22,426	4.77
FHLB and FRB stock		12,701		99	3.17			12,678		197	6.25
Total interest-earning assets		3,424,717		25,775	3.05			2,498,006		26,246	4.23
Non-earning assets		186,700						188,260
Total assets	$	3,611,417					$	2,686,266
Liabilities
Interest bearing deposits:
NOW, money market, and savings		1,662,097		834	0.20			1,393,541		3,767	1.09
Time deposits		273,615		74	0.11			55,775		52	0.37
Brokered deposits		84,663		63	0.30			92,188		363	1.58
Total interest-bearing deposits		2,020,375		971	0.19			1,541,504		4,182	1.09
Total borrowings		—		—	—			11,703		32	1.10
Total long-term debt		73,830		1,094	6.01			49,888		829	6.68
Total interest-bearing liabilities		2,094,205		2,065	0.40			1,603,095		5,043	1.27
Demand deposits		1,136,531						713,001
Other liabilities		41,691						36,690
Shareholders’ equity		338,990						333,480
Total liabilities and shareholders’ equity	$	3,611,417					$	2,686,266
Net interest spread					2.65	%					2.96	%
Net interest income and net interest margin ⁽²⁾			$	23,710	2.81	%			$	21,203	3.41	%

Non-taxable equivalent net interest margin					2.76	%					3.38	%

⁽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)	2021			2020			2020			2020			2020			Change			Change
Loans held for sale
Loans held for sale	$	1,847		$	—		$	859		$	1,153		$	—		$	1,847		$	1,847
Total loans held for sale	$	1,847		$	—		$	859		$	1,153		$	—		$	1,847		$	1,847

Loans held for investment
Commercial loans:
Commercial and industrial - other	$	735,287		$	760,645		$	712,567		$	739,769		$	760,062		$	(25,358	)	$	(24,775	)
Commercial and industrial - PPP		218,766			192,160			231,834			234,049			—			26,606			218,766
Commercial real estate:
Multifamily		80,507			66,262			58,336			58,909			73,654			14,245			6,853
Owner occupied		381,018			373,689			364,170			366,847			359,026			7,329			21,992
Investment		480,566			469,150			458,279			474,565			477,451			11,416			3,115
Construction and land:
1‑4 family residential construction		1,578			1,171			—			11			2,706			407			(1,128	)
Other construction, development, and land		141,218			144,424			139,836			128,980			124,116			(3,206	)		17,102
Total commercial loans		2,038,940			2,007,501			1,965,022			2,003,130			1,797,015			31,439			241,925

Residential:
Residential mortgages		31,817			33,783			29,460			32,327			31,761			(1,966	)		56
Home equity		26,293			25,443			24,528			23,689			23,479			850			2,814
Total residential loans		58,110			59,226			53,988			56,016			55,240			(1,116	)		2,870

Consumer		203,176			176,066			154,916			113,149			58,164			27,110			145,012
Other		7,689			13,897			22,777			22,160			25,488			(6,208	)		(17,799	)
		2,307,915			2,256,690			2,196,703			2,194,455			1,935,907			51,225			372,008
Less net deferred fees and other unearned income		(7,101	)		(7,654	)		(8,668	)		(9,761	)		(2,998	)		553			(4,103	)
Total loans held for investment	$	2,300,814		$	2,249,036		$	2,188,035		$	2,184,694		$	1,932,909		$	51,778		$	367,905

Total loans	$	2,302,661		$	2,249,036		$	2,188,894		$	2,185,847		$	1,932,909		$	53,625		$	369,752

Total unfunded commitments	$	789,869		$	813,757		$	764,247		$	749,321		$	689,620		$	(23,888	)	$	100,249

ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Credit Losses Activity and Credit Quality

	2021				2020
	First				Fourth				Third				Second				First
(dollars in thousands)	Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for loan losses
Balance at beginning of period	$	31,818			$	31,894			$	31,605			$	24,896			$	18,535
Adoption of ASU 2016-13		—				—				—				—				(854	)
Provision for loan losses		(4,074	)			225				636				8,222				7,409
Loans charged-off:
Commercial and industrial		(288	)			(401	)			(404	)			(1,479	)			(18	)
Commercial real estate		—				—				—				—				(78	)
Construction and land		—				—				—				—				—
Residential mortgages		—				—				—				(36	)			—
Home equity		—				—				—				—				(125	)
Consumer		—				—				—				—				—
Other		—				—				—				—				—
Total loans charged-off		(288	)			(401	)			(404	)			(1,515	)			(221	)
Recoveries on loans previously charged-off:
Commercial and industrial		50				37				56				1				—
Commercial real estate		—				44				—				—				18
Construction and land		—				18				—				—				—
Residential mortgages		—				—				—				—				1
Home equity		—				—				—				—				—
Consumer		—				1				1				1				8
Other		—				—				—				—				—
Total recoveries		50				100				57				2				27
Net charge-offs	$	(238	)		$	(301	)		$	(347	)		$	(1,513	)		$	(194	)
Balance at period end	$	27,506			$	31,818			$	31,894			$	31,605			$	24,896

Allowance for unfunded commitments
Balance at beginning of period	$	3,128			$	2,871			$	3,480			$	2,838			$	892
Adoption of ASU 2016-13		—				—				—				—				1,275
Provision for unfunded commitments		(445	)			257				(609	)			642				671
Balance at period end	$	2,683			$	3,128			$	2,871			$	3,480			$	2,838

Total allowance for credit losses - loans and unfunded commitments	$	30,189			$	34,946			$	34,765			$	35,085			$	27,734

Provision for credit losses under CECL
Provision for loan losses		(4,074	)			225				636				8,222				7,409
Provision for securities held to maturity credit losses		-				(1	)			1				(1	)			(6	)
Provision for unfunded commitments		(445	)			257				(609	)			642				671
Total provision for credit losses	$	(4,519	)		$	481			$	28			$	8,863			$	8,074

Non-performing loans	$	2,056			$	4,862			$	5,421			$	6,265			$	6,515
Foreclosed properties (OREO)		16				16				563				779				779
Total nonperforming assets	$	2,072			$	4,878			$	5,984			$	7,044			$	7,294

Allowance for loan losses to loans held for investment		1.20		%		1.41		%		1.46		%		1.45		%		1.29		%
Allowance for credit losses to loans held for investment		1.31		%		1.55		%		1.59		%		1.61		%		1.43		%
Allowance for credit losses to loans held for investment excluding PPP loans		1.45		%		1.70		%		1.78		%		1.80		%		1.43		%
Net charge-offs to average loans ⁽¹⁾		0.04				0.05				0.06				0.29				0.04
Non-performing loans as a percentage of total loans		0.09		%		0.22		%		0.25		%		0.29		%		0.34		%
Non-performing assets as a percentage of total assets		0.06		%		0.13		%		0.20		%		0.24		%		0.27		%

⁽¹⁾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)	2021			2020			2020			2020			2020			Change			Year Change
DDA	$	1,280,524		$	1,033,765		$	843,656		$	883,662		$	712,919		$	246,759		$	567,605
NOW		485,540			760,638			387,858			449,737			368,463			(275,098	)		117,077
Savings		562			625			568			583			567			(63	)		(5	)
Money market		1,142,361			1,030,753			945,834			879,863			982,109			111,608			160,252
Time		294,129			241,328			196,343			131,353			66,793			52,801			227,336
Brokered		74,576			94,399			94,463			62,433			94,268			(19,823	)		(19,692	)
Total deposits	$	3,277,692		$	3,161,508		$	2,468,722		$	2,407,631		$	2,225,119		$	116,184		$	1,052,573


Average Deposits

	2021			2020												Linked
	First			Fourth			Third			Second			First			Quarter			Q1 2021 vs
(dollars in thousands)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			Q1 2020
DDA	$	1,136,531		$	977,009		$	854,715		$	815,299		$	713,001		$	159,522		$	423,530
NOW		618,701			558,967			440,734			462,051			382,178			59,734			236,523
Savings		587			614			586			574			650			(27	)		(63	)
Money market		1,042,809			1,026,347			942,062			952,444			1,010,713			16,462			32,096
Time		273,615			221,792			166,019			96,362			55,775			51,823			217,840
Brokered		84,663			89,673			68,102			83,228			92,188			(5,010	)		(7,525	)
Total deposits	$	3,156,906		$	2,874,402		$	2,472,218		$	2,409,958		$	2,254,505		$	282,504		$	902,401

Noninterest bearing deposits as a percentage of average deposits		36.0	%		34.0	%		34.6	%		33.8	%		31.6	%
Cost of interest-bearing deposits		0.19	%		0.25	%		0.28	%		0.33	%		1.09	%
Cost of deposits		0.12	%		0.16	%		0.19	%		0.22	%		0.75	%

ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation

	2021				2020
	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	$	25,410			$	24,943			$	24,233			$	23,797			$	26,023
Taxable equivalent adjustment		365				345				345				354				223
Interest income - taxable equivalent	$	25,775			$	25,288			$	24,578			$	24,151			$	26,246

Taxable equivalent net interest income reconciliation
Net interest income - GAAP	$	23,345			$	22,644			$	21,718			$	21,631			$	20,980
Taxable equivalent adjustment		365				345				345				354				223
Net interest income - taxable equivalent	$	23,710			$	22,989			$	22,063			$	21,985			$	21,203

Loan yield excluding PPP loans reconciliation
Loan yield - GAAP		3.89		%		3.89		%		3.82		%		3.87		%		4.77		%
Impact of PPP loans		(0.06	)			(0.03	)			0.13				0.22				—
Loan yield excluding PPP loans		3.83		%		3.86		%		3.95		%		4.09		%		4.77		%

Taxable equivalent net interest margin reconciliation
Net interest margin - GAAP		2.76		%		2.86		%		3.09		%		3.17		%		3.38		%
Impact of taxable equivalent adjustment		0.05				0.05				0.05				0.06				0.03
Net interest margin - taxable equivalent		2.81		%		2.91		%		3.14		%		3.23		%		3.41		%

Taxable equivalent net interest margin excluding PPP loans reconciliation
Net interest margin - taxable equivalent		2.81		%		2.91		%		3.14		%		3.23		%		3.41		%
Impact of PPP loans		(0.11	)			(0.10	)			0.04				0.12				—
Net interest margin - taxable equivalent excluding PPP loans		2.70		%		2.81		%		3.18		%		3.35		%		3.41		%

Taxable equivalent income before income taxes reconciliation
Income before income taxes - GAAP	$	16,277			$	12,015			$	10,481			$	2,207			$	2,451
Taxable equivalent adjustment		365				345				345				354				223
Income before income taxes	$	16,642			$	12,360			$	10,826			$	2,561			$	2,674

Taxable equivalent income tax expense reconciliation
Income tax expense - GAAP	$	2,915			$	2,065			$	1,863			$	358			$	327
Taxable equivalent adjustment		365				345				345				354				223
Income tax expense	$	3,280			$	2,410			$	2,208			$	712			$	550

Tangible book value per common share reconciliation
Total shareholders’ equity	$	340,328			$	338,586			$	340,309			$	335,980			$	332,300
Intangible assets		(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible common equity	$	320,403			$	318,661			$	320,384			$	316,055			$	312,375
Common shares outstanding		20,354,077				20,394,912				21,202,783				21,477,631				21,479,986
Book value per common share - GAAP	$	16.72			$	16.60			$	16.05			$	15.64			$	15.47
Tangible book value		15.74				15.62				15.11				14.72				14.54

Tangible common equity to tangible assets reconciliation
Total shareholders’ equity	$	340,328			$	338,586			$	340,309			$	335,980			$	332,300
Intangible assets		(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible common equity	$	320,403			$	318,661			$	320,384			$	316,055			$	312,375

Total assets	$	3,732,668			$	3,615,617			$	2,923,977			$	2,890,622			$	2,719,658
Intangible assets		(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible assets	$	3,712,743			$	3,595,692			$	2,904,052			$	2,870,697			$	2,699,733
Tangible common equity to tangible assets		8.63		%		8.86		%		11.03		%		11.01		%		11.57		%

Allowance for credit losses to loans held for investment reconciliation
Total loans held for investment	$	2,300,814			$	2,249,036			$	2,188,035			$	2,184,694			$	1,932,909
PPP loans		(218,766	)			(192,160	)			(231,834	)			(234,049	)			—
Total loans held for investment excluding PPP loans	$	2,082,048			$	2,056,876			$	1,956,201			$	1,950,645			$	1,932,909

Allowance for credit losses to loans held for investment		1.31		%		1.55		%		1.59		%		1.61		%		1.43		%
Allowance for credit losses to loans held for investment excluding PPP loans		1.45		%		1.70		%		1.78		%		1.80		%		1.43		%

Atlantic Capital Bancshares, Inc. Reports First Quarter 2021 Results