Chronicle Journal: Finance

Atlantic Capital Bancshares, Inc. Reports Second Quarter 2021 Results

ATLANTA, July 23, 2021 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income for the quarter ended June 30, 2021 of $11.8 million, or $0.58 per diluted share, compared to $1.8 million, or $0.09 per diluted share, for the second quarter of 2020 and $13.4 million, or $0.65 per diluted share, for the first quarter of 2021.

“Atlantic Capital recorded another quarter of strong and sustainable growth in loans, deposits, and revenue. Our new business pipelines remain robust, our banking teams are executing at a high level, and we expect solid growth through the balance of 2021 and into 2022,” remarked Douglas Williams, President and Chief Executive Officer.

Second Quarter Highlights(1)

  • Total assets were $3.8 billion, compared to $3.7 billion at March 31, 2021 and $2.9 billion at June 30, 2020.
  • Loans held for investment, excluding Paycheck Protection Program (“PPP”) loans, increased $77.2 million, or 15% annualized, from March 31, 2021 and increased $208.6 million, or 11%, from June 30, 2020.
  • Quarterly average deposits increased $150.7 million, or 19% annualized, compared to the first quarter of 2021 and increased $897.6 million, or 37%, compared to the second quarter of 2020.
  • Cost of deposits decreased to 0.10% from 0.12% in the first quarter of 2021 and from 0.22% in the second quarter of 2020.
  • Tangible book value per common share increased to $16.40 from $15.74 at March 31, 2021 and from $14.72 at June 30, 2020.
  • Annualized net charge-offs to average loans totaled 0.10% for the second quarter of 2021 and 0.07% for the full year 2021. Non-performing assets to total assets were 0.14% at June 30, 2021.
  • The allowance for credit losses was 1.27% of total loans held for investment at June 30, 2021, compared to 1.31% at March 31, 2021 and 1.61% at June 30, 2020.
  • 50,000 shares were repurchased in the second quarter of 2021 totaling $1.3 million at an average price of $25.71. As of June 30, 2021, approximately $1.8 million remained from our $25 million share repurchase program.

Income Statement

Taxable equivalent net interest income totaled $26.0 million for the second quarter of 2021, an increase of $4.1 million, or 18%, from the second quarter of 2020, and an increase of $2.3 million, or 39% annualized, from the first quarter of 2021. The second quarter of 2021 included $3.0 million in PPP loan income compared to $696,000 in the second quarter of 2020 and $2.2 million in the first quarter of 2021. The second quarter of 2021 also included $671,000 in interest income related to the receipt of an investment prepayment penalty and the accelerated accretion of a loan discount upon payoff.

Taxable equivalent net interest margin was 2.91% in the second quarter of 2021, compared to 3.23% in the second quarter of 2020 and 2.81% in the first quarter of 2021. The tax equivalent net interest margin excluding PPP loans was 2.70%, unchanged from the first quarter of 2021.

The yield on loans in the second quarter of 2021 was 4.19%, an increase of 32 basis points from the second quarter of 2020 and an increase of 30 basis points from the first quarter of 2021. Excluding PPP loans, the second quarter of 2021 loan yield was 3.95%, an increase of 12 basis points compared to the first quarter of 2021. In addition, loan interest income for the second quarter of 2021 included $405,000 in previously mentioned accelerated discount accretion.

The cost of deposits in the second quarter of 2021 was 0.10%, a decrease of 12 basis points from the second quarter of 2020 and a decrease of 2 basis points from the first quarter of 2021. The cost of interest bearing deposits decreased 16 basis points to 0.17% from the second quarter of 2020, and decreased 2 basis points from the first quarter of 2021.

In the second quarter of 2021, we recorded a negative provision for credit losses of $933,000 compared to a provision for credit losses of $8.9 million in the second quarter of 2020 and a negative provision for credit losses of $4.5 million in the first quarter of 2021. The second quarter of 2021 provision for credit losses included a negative provision for loan losses of $814,000 and a negative provision for unfunded commitments of $118,000.

Noninterest income totaled $3.6 million in the second quarter of 2021 compared to $2.3 million in the second quarter of 2020 and unchanged from the first quarter of 2021. Service charge income in the second quarter of 2021 totaled $1.7 million, an increase of $646,000 compared to the second quarter of 2020, and an increase of $64,000 from the first quarter of 2021. The increase in service charge income was primarily due to growth in our payments and fintech businesses.

Noninterest expense totaled $15.2 million in the second quarter of 2021, compared to $12.9 million in the second quarter of 2020 and $15.1 million in the first quarter of 2021. Salaries and employee benefits expense totaled $10.4 million in the second quarter of 2021, unchanged compared to the first quarter of 2021.

(1) Commentary is on a fully taxable-equivalent basis unless otherwise noted. Consistent with SEC guidance in Industry Guide 3 that contemplates the calculation of tax-exempt income on a tax equivalent basis, net interest income and net interest margin are provided on a fully taxable-equivalent basis, which generally assumes a 21% marginal tax rate. We provide detailed reconciliations in the Non-GAAP Performance and Financial Measures Reconciliation table on page 13.

Balance Sheet

Total loans held for investment were $2.3 billion at June 30, 2021, an increase of $80.2 million from June 30, 2020 and a decrease of $35.9 million from March 31, 2021. Loans held for investment, excluding PPP loans, increased $77.2 million, or 15% annualized, from March 31, 2021 and increased $208.6 million, or 11%, from June 30, 2020.

The allowance for credit losses was 1.27% of total loans held for investment at June 30, 2021, compared to 1.31% at March 31, 2021. The decrease in the allowance was a result of an improvement in our current expected credit losses, or CECL, economic forecast along with credit rating upgrades for certain criticized and classified loans. Excluding the impact of PPP loans, the allowance for credit losses at June 30, 2021 was 1.33%, compared to 1.45% at March 31, 2021.

Total average deposits were $3.3 billion for the second quarter of 2021, an increase of $897.6 million, or 37%, from the second quarter of 2020 and an increase of $150.7 million, or 19% annualized, from the first quarter of 2021. Average noninterest bearing deposits were $1.3 billion for the second quarter of 2021, an increase of $480.4 million, or 59%, from the second quarter of 2020 and an increase of $159.2 million, or 56% annualized, from the first quarter of 2021. Noninterest bearing deposits were 39.2% of total average deposits in the second quarter of 2021, compared to 33.8% in the second quarter of 2020 and 36.0% in the first quarter of 2021.

Subsequent Event

As announced and further described in a separate press release issued by Atlantic Capital today, Atlantic Capital and South State Corporation, have entered into a merger agreement under which South State will acquire Atlantic Capital in an all stock merger transaction.

Conference Call

In light of the announcement earlier today of our entry into a merger agreement with South State Corporation, Atlantic Capital and South State will host a joint conference call at 8:00 a.m. ET on Friday, July 23, 2021, to discuss the transaction and the financial results for the quarter ended June 30, 2021. Individuals wishing to participate in the conference call may do so by dialing 1-877-506-9272 from the United States. The call will also be available live via webcast at https://services.choruscall.com/links/ssb210723.html.

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) loans held for investment excluding PPP loans; (iv) loan yield excluding PPP loans; (v) taxable equivalent net interest margin; (vi) taxable equivalent net interest margin excluding PPP loans; (vii) taxable equivalent income before income taxes; (viii) taxable equivalent income tax expense; (ix) tangible common equity to tangible assets; (x) tangible book value per common share, and (xi) allowance for credit losses to loans held for investment excluding PPP loans, in our analysis of the Company's performance. Tangible common equity excludes goodwill from shareholders' equity.

Management believes that non-GAAP financial measures provide a greater understanding of ongoing performance and operations and enhance comparability with prior periods. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as determined in accordance with GAAP, and investors should consider Atlantic Capital’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Non-GAAP financial measures may not be comparable to non-GAAP financial measures presented by other companies.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” “strive,” or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about Atlantic Capital’s confidence in its strategies and its expectations about financial performance, the impact of COVID-19 on operations, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings. The forward-looking statements are based largely on Atlantic Capital’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond Atlantic Capital’s control. Atlantic Capital undertakes no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements as a result of, among other factors, the risks and uncertainties described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Atlantic Capital’s Annual Report on Form 10-K. 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 $3.8 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers commercial and not-for-profit banking services, specialty corporate financial services, private banking services and commercial real estate finance solutions to privately held companies and individuals in the Atlanta area, as well as payments and other specialized financial services for select clients nationally.

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

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

 

ATLANTIC CAPITAL BANCSHARES, INC.                        
Selected Financial Information                         
                          
                   For the six months ended 
 2021
 2020 June 30, 
(in thousands, except share and per share data;Second First Fourth Third Second      
taxable equivalent)Quarter Quarter Quarter Quarter Quarter 2021 2020 
INCOME SUMMARY                         
Interest income - taxable equivalent (1)$27,993  $25,775  $25,288  $24,578  $24,151  $53,768  $50,397  
Interest expense 1,958   2,065   2,299   2,515   2,166   4,023   7,209  
Net interest income - taxable equivalent 26,035   23,710   22,989   22,063   21,985   49,745   43,188  
Provision for credit losses (933)  (4,519)  481   28   8,863   (5,452)  16,937  
Net interest income after provision for credit losses 26,968   28,229   22,508   22,035   13,122   55,197   26,251  
Noninterest income 3,584   3,562   3,016   2,504   2,343   7,146   4,765  
Noninterest expense 15,197   15,149   13,164   13,713   12,904   30,346   25,781  
Income before income taxes 15,355   16,642   12,360   10,826   2,561   31,997   5,235  
Income tax expense 3,539   3,280   2,410   2,208   712   6,819   1,262  
Net income(1)(2)$11,816  $13,362  $9,950  $8,618  $1,849  $25,178  $3,973  
                          
PER SHARE DATA                         
Diluted earnings per share$0.58  $0.65  $0.48  $0.40  $0.09  $1.23  $0.18  
Book value per share 17.38   16.72   16.60   16.05   15.64   17.38   15.64  
Tangible book value per common share (2) 16.40   15.74   15.62   15.11   14.72   16.40   14.72  
                          
PERFORMANCE MEASURES                         
Return on average equity 13.60 % 15.99 % 11.68 % 10.05 % 2.20 % 14.77 % 2.38 %
Return on average assets 1.26   1.50   1.19   1.15   0.25   1.38   0.28  
Taxable equivalent net interest margin 2.91   2.81   2.91   3.14   3.23   2.86   3.32  
Taxable equivalent net interest margin excluding PPP loans 2.70   2.70   2.81   3.18   3.35   2.70   3.38  
Efficiency ratio 51.97   56.30   51.30   56.61   53.82   54.04   54.42  
Average loans to average deposits 67.54   71.93   76.81   88.65   88.46   69.67   86.23  
CAPITAL                         
Average equity to average assets 9.24 % 9.39 % 10.18 % 11.45 % 11.53 % 9.31 % 11.95 %
Tangible common equity to tangible assets 8.86   8.63   8.86   11.03   11.01   8.86   11.01  
Leverage ratio 8.4 (3) 8.4   8.9   9.9   9.9   8.5 (4) 10.3  
Total risk based capital ratio 16.0 (3) 16.4   16.1   16.9   14.8   16.0 (4) 14.8  
                          
SHARES OUTSTANDING                         
Number of common shares outstanding - basic 20,319,429   20,354,077   20,394,912   21,202,783   21,477,631   20,319,429   21,477,631  
Number of common shares outstanding - diluted 20,595,812   20,617,188   20,492,542   21,298,098   21,569,050   20,595,812   21,569,050  
Average number of common shares - basic 20,332,503   20,380,066   20,711,089   21,500,735   21,472,462   20,356,153   21,580,855  
Average number of common shares - diluted 20,516,478   20,502,184   20,795,332   21,543,805   21,535,040   20,509,370   21,688,712  
                          
ASSET QUALITY                         
Allowance for credit losses to loans held for investment 1.27 % 1.31 % 1.55 % 1.59 % 1.61 % 1.27 % 1.61 %
Net charge-offs to average loans (4) 0.10   0.04   0.05   0.06   0.29   0.07   0.17  
Non-performing assets to total assets 0.14   0.06   0.13   0.20   0.24   0.14   0.24  
                          
AVERAGE BALANCES                         
Total loans$2,233,906  $2,270,660  $2,207,956  $2,191,669  $2,131,847  $2,252,182  $2,011,016  
Investment securities 656,507   579,547   491,134   453,382   462,850   618,239   440,410  
Total assets 3,771,970   3,611,417   3,328,719   2,977,444   2,932,716   3,692,133   2,809,491  
Deposits 3,307,601   3,156,906   2,874,402   2,472,218   2,409,958   3,232,669   2,332,231  
Shareholders' equity 348,416   338,990   338,948   341,017   338,027   343,725   335,754  
                          
AT PERIOD END                         
Loans and loans held for sale$2,264,899  $2,302,661  $2,249,036  $2,188,894  $2,185,847  $2,264,899  $2,185,847  
Investment securities 714,065   613,236   535,579   446,706   457,749   714,065   457,749  
Total assets 3,780,445   3,732,668   3,615,617   2,923,977   2,890,622   3,780,445   2,890,622  
Deposits 3,306,224   3,277,692   3,161,508   2,468,722   2,407,631   3,306,224   2,407,631  
Shareholders’ equity 353,185   340,328   338,586   340,309   335,980   353,185   335,980  
                          
(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 June 30, 2021.
(4)Annualized.
                          

 

ATLANTIC CAPITAL BANCSHARES, INC.             
Consolidated Balance Sheets (unaudited)             
              
  June 30, March 31, December 31, June 30, 
(in thousands, except share data) 2021 2021 2020 2020 
ASSETS             
Cash and due from banks $35,530  $32,850  $16,865  $33,759  
Interest-bearing deposits in banks  593,195   612,966   636,537   33,038  
Cash and cash equivalents  628,725   645,816   653,402   66,797  
Investment securities available for sale  480,518   390,701   335,423   271,829  
Investment securities held to maturity, net of allowance for credit losses of $13, $14, $14, and $13 at June 30, 2021, March 31, 2021, December 31, 2020 and June 30, 2020, respectively  233,547   222,535   200,156   185,920  
Other investments  24,293   24,709   25,892   28,811  
Loans held for sale     1,847      1,153  
Loans held for investment  2,264,899   2,300,814   2,249,036   2,184,694  
Less: allowance for loan losses  (26,123)  (27,506)  (31,818)  (31,605) 
Loans held for investment, net  2,238,776   2,273,308   2,217,218   2,153,089  
Premises and equipment, net  19,643   20,633   21,589   22,494  
Bank owned life insurance  73,610   73,223   72,856   67,127  
Goodwill  19,925   19,925   19,925   19,925  
Other intangibles, net  2,637   2,688   2,731   2,731  
Other real estate owned  16   16   16   779  
Other assets  58,755   57,267   66,409   69,967  
Total assets $3,780,445  $3,732,668  $3,615,617  $2,890,622  
              
LIABILITIES AND SHAREHOLDERS’ EQUITY             
Deposits:             
Noninterest-bearing demand $1,374,018  $1,280,524  $1,033,765  $883,662  
Interest-bearing checking  536,677   485,540   760,638   449,737  
Savings  676   562   625   583  
Money market  1,026,239   1,142,361   1,030,753   879,863  
Time  283,656   294,129   241,328   131,353  
Brokered deposits  84,958   74,576   94,399   62,433  
Total deposits  3,306,224   3,277,692   3,161,508   2,407,631  
Federal funds purchased           6,000  
Federal Home Loan Bank borrowings           50,000  
Long-term debt  73,953   73,878   73,807   49,958  
Other liabilities  47,083   40,770   41,716   41,053  
Total liabilities  3,427,260   3,392,340   3,277,031   2,554,642  
              
SHAREHOLDERS’ EQUITY             
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2021, March 31, 2021, December 31, 2020 and June 30, 2020             
Common stock, no par value; 100,000,000 shares authorized; 20,319,429, 20,354,077, 20,394,912, and 21,477,631 shares issued and outstanding as of June 30, 2021, March 31, 2021, December 31, 2020 and June 30, 2020, respectively  206,619   207,047   209,942   224,520  
Retained earnings  139,315   127,499   114,137   95,570  
Accumulated other comprehensive income  7,251   5,782   14,507   15,890  
Total shareholders’ equity  353,185   340,328   338,586   335,980  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $3,780,445  $3,732,668  $3,615,617  $2,890,622  
  

 

ATLANTIC CAPITAL BANCSHARES, INC.                    
Consolidated Statements of Income (unaudited)                    
                        
(in thousands, except share and per share data) Three months ended Six months ended 
  June 30, March 31, December 31, September 30, June 30, June 30, June 30, 
  2021 2021 2020 2020 2020 2021 2020 
INTEREST INCOME                       
Loans, including fees $23,352  $21,769  $21,609  $21,049  $20,496  $45,121  $42,922  
Investment securities  3,900   3,374   3,000   2,910   3,041   7,274   5,773  
Interest and dividends on other interest‑earning assets 366   267   334   274   260   633   1,125  
Total interest income  27,618   25,410   24,943   24,233   23,797   53,028   49,820  
INTEREST EXPENSE                       
Interest on deposits  851   971   1,188   1,151   1,299   1,822   5,481  
Interest on Federal Home Loan Bank advances           16   38      38  
Interest on federal funds purchased and securities sold under agreements to repurchase           3   6      38  
Interest on long-term debt  1,107   1,094   1,111   1,345   823   2,201   1,652  
Total interest expense  1,958   2,065   2,299   2,515   2,166   4,023   7,209  
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES  25,660   23,345   22,644   21,718   21,631   49,005   42,611  
Provision for credit losses  (933)  (4,519)  481   28   8,863   (5,452)  16,937  
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  26,593   27,864   22,163   21,690   12,768   54,457   25,674  
NONINTEREST INCOME                       
Service charges  1,727   1,663   1,341   1,217   1,081   3,390   2,313  
Gains (losses) on sale of securities     2   (23)        2     
(Losses) gains on sale of other assets        (6)  (145)        5  
Derivatives (loss) income  (7)  47   11   10   (10)  40   236  
Bank owned life insurance  388   391   368   363   367   779   729  
SBA lending activities  1,231   1,225   1,015   893   782   2,456   1,196  
Other noninterest income  245   234   310   166   123   479   286  
Total noninterest income  3,584   3,562   3,016   2,504   2,343   7,146   4,765  
NONINTEREST EXPENSE                       
Salaries and employee benefits  10,362   10,421   8,437   8,850   8,466   20,783   16,942  
Occupancy  778   734   767   739   883   1,512   1,677  
Equipment and software  819   774   969   826   763   1,593   1,542  
Professional services  723   922   686   562   792   1,645   1,497  
Communications and data processing  869   792   789   757   670   1,661   1,567  
Marketing and business development  138   108   144   141   79   246   232  
Travel, meals and entertainment  47   10   14   39   34   57   174  
FDIC premiums  421   275   241   213   175   696   175  
Other noninterest expense  1,040   1,113   1,117   1,586   1,042   2,153   1,975  
Total noninterest expense  15,197   15,149   13,164   13,713   12,904   30,346   25,781  
                        
INCOME BEFORE PROVISION FOR INCOME TAXES  14,980   16,277   12,015   10,481   2,207   31,257   4,658  
Provision for income taxes  3,164   2,915   2,065   1,863   358   6,079   685  
NET INCOME $11,816  $13,362  $9,950  $8,618  $1,849  $25,178  $3,973  
                        
Net income per common share - basic $0.58  $0.66  $0.48  $0.40  $0.09  $1.24  $0.18  
Net income per common share - diluted $0.58  $0.65  $0.48  $0.40  $0.09  $1.23  $0.18  
                        
Weighted average shares - basic  20,332,503   20,380,066   20,711,089   21,500,735   21,472,462   20,356,153   21,580,855  
Weighted average shares - diluted  20,516,478   20,502,184   20,795,332   21,543,805   21,535,040   20,509,370   21,688,712  
                        

 

ATLANTIC CAPITAL BANCSHARES, INC.                  
Average Balance Sheets and Net Interest Margin Analysis                  
Selected Financial Information                  
  Three months ended 
  June 30, 2021  March 31, 2021 
     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 $687,795 $201 0.12% $561,809 $168 0.12%
Investment securities:                  
Taxable investment securities  426,634  2,382 2.24   356,250  1,898 2.16 
Non-taxable investment securities (1)  229,873  1,893 3.30   223,297  1,841 3.34 
Total investment securities  656,507  4,275 2.61   579,547  3,739 2.62 
Loans  2,233,906  23,352 4.19   2,270,660  21,769 3.89 
FHLB and FRB stock  11,931  165 5.55   12,701  99 3.17 
Total interest-earning assets  3,590,139  27,993 3.13   3,424,717  25,775 3.05 
Non-earning assets  181,831        186,700      
Total assets $3,771,970       $3,611,417      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,637,374  725 0.18   1,662,097  834 0.20 
Time deposits  290,331  68 0.09   273,615  74 0.11 
Brokered deposits  84,168  58 0.28   84,663  63 0.30 
Total interest-bearing deposits  2,011,873  851 0.17   2,020,375  971 0.19 
Total borrowings  89          
Total long-term debt  73,904  1,107 6.01   73,830  1,094 6.01 
Total interest-bearing liabilities  2,085,866  1,958 0.38   2,094,205  2,065 0.40 
Demand deposits  1,295,728        1,136,531      
Other liabilities  41,960        41,691      
Shareholders’ equity  348,416        338,990      
Total liabilities and shareholders’ equity $3,771,970       $3,611,417      
Net interest spread       2.75%       2.65%
Net interest income and net interest margin (2)    $26,035 2.91%    $23,710 2.81%
                   
Non-taxable equivalent net interest margin       2.87%       2.76%
                   
(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 
  June 30, 2021  June 30, 2020 
     Interest Tax     Interest Tax 
  Average Income/ Equivalent  Average Income/ Equivalent 
(dollars in thousands; taxable equivalent) Balance Expense Yield/Rate  Balance Expense Yield/Rate 
Assets                  
Interest bearing deposits in other banks $687,795 $201 0.12% $129,989 $23 0.07%
Investment securities:                  
Taxable investment securities  426,634  2,382 2.24   247,668  1,581 2.57 
Non-taxable investment securities (1)  229,873  1,893 3.30   215,182  1,814 3.39 
Total investment securities  656,507  4,275 2.61   462,850  3,395 2.95 
Loans  2,233,906  23,352 4.19   2,131,847  20,496 3.87 
FHLB and FRB stock  11,931  165 5.55   16,842  237 5.66 
Total interest-earning assets  3,590,139  27,993 3.13   2,741,528  24,151 3.54 
Non-earning assets  181,831        191,188      
Total assets $3,771,970       $2,932,716      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,637,374  725 0.18   1,415,069  1,115 0.32 
Time deposits  290,331  68 0.09   96,362  58 0.24 
Brokered deposits  84,168  58 0.28   83,228  126 0.61 
Total interest-bearing deposits  2,011,873  851 0.17   1,594,659  1,299 0.33 
Total borrowings  89      97,769  44 0.18 
Total long-term debt  73,904  1,107 6.01   49,930  823 6.63 
Total interest-bearing liabilities  2,085,866  1,958 0.38   1,742,358  2,166 0.50 
Demand deposits  1,295,728        815,299      
Other liabilities  41,960        37,032      
Shareholders’ equity  348,416        338,027      
Total liabilities and shareholders’ equity $3,771,970       $2,932,716      
Net interest spread       2.75%       3.04%
Net interest income and net interest margin (2)    $26,035 2.91%    $21,985 3.23%
                   
Non-taxable equivalent net interest margin       2.87%       3.17%
                   
(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                  
  Six months ended 
  June 30, 2021  June 30, 2020 
     Interest Tax     Interest Tax 
  Average Income/ Equivalent  Average Income/ Equivalent 
(dollars in thousands; taxable equivalent) Balance Expense Yield/Rate  Balance Expense Yield/Rate 
Assets                  
Interest bearing deposits in other banks $625,503 $369 0.12% $153,526 $691 0.91%
Other short-term investments        55    
Investment securities:                  
Taxable investment securities  391,636  4,280 2.20   250,802  3,261 2.61 
Non-taxable investment securities (1)  226,603  3,734 3.32   189,608  3,089 3.28 
Total investment securities  618,239  8,014 2.61   440,410  6,350 2.90 
Loans  2,252,182  45,121 4.04   2,011,016  42,922 4.29 
FHLB and FRB stock  12,310  264 4.32   14,760  434 5.91 
Total interest-earning assets  3,508,234  53,768 3.09   2,619,767  50,397 3.87 
Non-earning assets  183,899        189,724      
Total assets $3,692,133       $2,809,491      
Liabilities                  
Interest bearing deposits:                  
NOW, money market, and savings  1,649,667  1,559 0.19   1,404,305  4,882 0.70 
Time deposits  282,019  142 0.10   76,068  111 0.29 
Brokered deposits  84,414  121 0.29   87,708  488 1.12 
Total interest-bearing deposits  2,016,100  1,822 0.18   1,568,081  5,481 0.70 
Total borrowings  45      54,736  76 0.28 
Total long-term debt  73,867  2,201 6.01   49,909  1,652 6.66 
Total interest-bearing liabilities  2,090,012  4,023 0.39   1,672,726  7,209 0.87 
Demand deposits  1,216,569        764,150      
Other liabilities  41,827        36,861      
Shareholders’ equity  343,725        335,754      
Total liabilities and shareholders’ equity $3,692,133       $2,809,491      
Net interest spread       2.70%       3.00%
Net interest income and net interest margin (2)    $49,745 2.86%    $43,188 3.32%
                   
Non-taxable equivalent net interest margin       2.82%       3.27%
                   
(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 
  June 30, March 31, December 31, September 30, June 30, Quarter Year 
(dollars in thousands) 2021 2021 2020 2020 2020 Change Change 
Loans held for sale                      
Loans held for sale $  $1,847  $  $859  $1,153  $(1,847) $(1,153) 
Total loans held for sale $  $1,847  $  $859  $1,153  $(1,847) $(1,153) 
                       
Loans held for investment                      
Commercial loans:                      
Commercial and industrial - other $767,646  $735,287  $760,645  $712,567  $739,769  $32,359  $27,877  
Commercial and industrial - PPP  105,684   218,766   192,160   231,834   234,049   (113,082)  (128,365) 
Commercial real estate:                      
Multifamily  58,632   80,507   66,262   58,336   58,909   (21,875)  (277) 
Owner occupied  392,108   381,018   373,689   364,170   366,847   11,090   25,261  
Investment  506,230   480,566   469,150   458,279   474,565   25,664   31,665  
Construction and land:                      
1‑4 family residential construction  2,074   1,578   1,171      11   496   2,063  
Other construction, development, and land  178,423   141,218   144,424   139,836   128,980   37,205   49,443  
Total commercial loans  2,010,797   2,038,940   2,007,501   1,965,022   2,003,130   (28,143)  7,667  
                       
Residential:                      
Residential mortgages  45,207   31,817   33,783   29,460   32,327   13,390   12,880  
Home equity  24,972   26,293   25,443   24,528   23,689   (1,321)  1,283  
Total residential loans  70,179   58,110   59,226   53,988   56,016   12,069   14,163  
                       
Consumer  184,203   203,176   176,066   154,916   113,149   (18,973)  71,054  
Other  5,234   7,689   13,897   22,777   22,160   (2,455)  (16,926) 
   2,270,413   2,307,915   2,256,690   2,196,703   2,194,455   (37,502)  75,958  
Less net deferred fees and other unearned income  (5,514)  (7,101)  (7,654)  (8,668)  (9,761)  1,587   4,247  
Total loans held for investment $2,264,899  $2,300,814  $2,249,036  $2,188,035  $2,184,694  $(35,915) $80,205  
                       
Total loans $2,264,899  $2,302,661  $2,249,036  $2,188,894  $2,185,847  $(37,762) $79,052  
                       
Total unfunded commitments $804,784  $789,869  $813,757  $764,247  $749,321  $14,915  $55,463  
       

 

ATLANTIC CAPITAL BANCSHARES, INC.                
Allowance for Credit Losses Activity and Credit Quality               
                 
  2021 2020
 
  Second First Fourth Third Second 
(dollars in thousands) Quarter Quarter Quarter Quarter Quarter 
Allowance for loan losses                
Balance at beginning of period $27,506  $31,818  $31,894  $31,605  $24,896  
Provision for loan losses  (814)  (4,074)  225   636   8,222  
Loans charged-off:                
Commercial and industrial  (386)  (288)  (401)  (404)  (1,479) 
Commercial real estate                
Construction and land                
Residential mortgages  (223)           (36) 
Home equity                
Consumer                
Other                
Total loans charged-off  (609)  (288)  (401)  (404)  (1,515) 
Recoveries on loans previously charged-off:                
Commercial and industrial  6   50   37   56   1  
Commercial real estate        44        
Construction and land        18        
Residential mortgages  32              
Home equity                
Consumer  2      1   1   1  
Other                
Total recoveries  40   50   100   57   2  
Net charge-offs $(569) $(238) $(301) $(347) $(1,513) 
Balance at period end $26,123  $27,506  $31,818  $31,894  $31,605  
                 
Allowance for unfunded commitments                
Balance at beginning of period $2,683  $3,128  $2,871  $3,480  $2,838  
Provision for unfunded commitments  (118)  (445)  257   (609)  642  
Balance at period end $2,565  $2,683  $3,128  $2,871  $3,480  
                 
Total allowance for credit losses - loans and unfunded commitments $28,688  $30,189  $34,946  $34,765  $35,085  
                 
Provision for credit losses under CECL                
Provision for loan losses  (814)  (4,074)  225   636   8,222  
Provision for securities held to maturity credit losses  (1)  -   (1)  1   (1) 
Provision for unfunded commitments  (118)  (445)  257   (609)  642  
Total provision for credit losses $(933) $(4,519) $481  $28  $8,863  
                 
Non-performing loans $5,194  $2,056  $4,862  $5,421  $6,265  
Foreclosed properties (OREO)  16   16   16   563   779  
Total nonperforming assets $5,210  $2,072  $4,878  $5,984  $7,044  
                 
Allowance for loan losses to loans held for investment  1.15 % 1.20 % 1.41 % 1.46 % 1.45 %
Allowance for credit losses to loans held for investment  1.27 % 1.31 % 1.55 % 1.59 % 1.61 %
Allowance for credit losses to loans held for investment excluding PPP loans  1.33 %1.45 %1.70 %1.78 %1.80 %
Net charge-offs to average loans (1)  0.10   0.04   0.05   0.06   0.29  
Non-performing loans as a percentage of total loans  0.23 % 0.09 % 0.22 % 0.25 % 0.29 %
Non-performing assets as a percentage of total assets  0.14 % 0.06 % 0.13 % 0.20 % 0.24 %
                 
(1)Annualized.                
                 

 

ATLANTIC CAPITAL BANCSHARES, INC.                
Period End Deposits                      
                       
            Linked   
  June 30, March 31, December 31, September 30, June 30, Quarter Year Over 
(dollars in thousands) 2021 2021 2020 2020 2020 Change Year Change 
DDA $1,374,018 $1,280,524 $1,033,765 $843,656 $883,662 $93,494  $490,356 
NOW  536,677  485,540  760,638  387,858  449,737  51,137   86,940 
Savings  676  562  625  568  583  114   93 
Money market  1,026,239  1,142,361  1,030,753  945,834  879,863  (116,122)  146,376 
Time  283,656  294,129  241,328  196,343  131,353  (10,473)  152,303 
Brokered  84,958  74,576  94,399  94,463  62,433  10,382   22,525 
Total deposits $3,306,224 $3,277,692 $3,161,508 $2,468,722 $2,407,631 $28,532  $898,593 
                       
Average Deposits                      
                       
  2021 2020 Linked   
  Second First Fourth Third Second Quarter Q2 2021 vs 
(dollars in thousands) Quarter Quarter Quarter Quarter Quarter Change Q2 2020 
DDA $1,295,728 $1,136,531 $977,009 $854,715 $815,299 $159,197  $480,429 
NOW  548,358  618,701  558,967  440,734  462,051  (70,343)  86,307 
Savings  593  587  614  586  574  6   19 
Money market  1,088,423  1,042,809  1,026,347  942,062  952,444  45,614   135,979 
Time  290,331  273,615  221,792  166,019  96,362  16,716   193,969 
Brokered  84,168  84,663  89,673  68,102  83,228  (495)  940 
Total deposits $3,307,601 $3,156,906 $2,874,402 $2,472,218 $2,409,958 $150,695  $897,643 
                       
Noninterest bearing deposits as a percentage of average deposits  39.2% 36.0% 34.0% 34.6% 33.8%      
Cost of interest-bearing deposits  0.17%0.19%0.25%0.28%0.33%     
Cost of deposits  0.10% 0.12% 0.16% 0.19% 0.22%      
                       

 

ATLANTIC CAPITAL BANCSHARES, INC.                      
Non-GAAP Performance and Financial Measures Reconciliation                      
                 For the six months 
  2021 2020 ended June 30, 
  Second First Fourth Third Second       
(in thousands, except share and per share data) Quarter Quarter Quarter Quarter Quarter 2021 2020 
                       
Taxable equivalent interest income reconciliation                      
Interest income - GAAP $27,618  $25,410  $24,943  $24,233  $23,797  $53,028  $49,820  
Taxable equivalent adjustment  375   365   345   345   354   740   577  
Interest income - taxable equivalent $27,993  $25,775  $25,288  $24,578  $24,151  $53,768  $50,397  
                       
Taxable equivalent net interest income reconciliation                      
Net interest income - GAAP $25,660  $23,345  $22,644  $21,718  $21,631  $49,005  $42,611  
Taxable equivalent adjustment  375   365   345   345   354   740   577  
Net interest income - taxable equivalent $26,035  $23,710  $22,989  $22,063  $21,985  $49,745  $43,188  
                       
Loan yield excluding PPP loans reconciliation                      
Loan yield - GAAP  4.19 % 3.89 % 3.89 % 3.82 % 3.87 % 4.04 % 4.29 %
Impact of PPP loans  (0.24)  (0.06)  (0.03)  0.13   0.22   (0.15)  0.14  
Loan yield excluding PPP loans  3.95 % 3.83 % 3.86 % 3.95 % 4.09 % 3.89 % 4.43 %
                       
Taxable equivalent net interest margin reconciliation                      
Net interest margin - GAAP  2.87 % 2.76 % 2.86 % 3.09 % 3.17 % 2.82 % 3.27 %
Impact of taxable equivalent adjustment  0.04   0.05   0.05   0.05   0.06   0.04   0.05  
Net interest margin - taxable equivalent  2.91 % 2.81 % 2.91 % 3.14 % 3.23 % 2.86 % 3.32 %
                       
Taxable equivalent net interest margin excluding PPP loans reconciliation                      
Net interest margin - taxable equivalent  2.91 % 2.81 % 2.91 % 3.14 % 3.23 % 2.86 % 3.32 %
Impact of PPP loans  (0.21)  (0.11)  (0.10)  0.04   0.12   (0.16)  0.06  
Net interest margin - taxable equivalent excluding PPP loans  2.70 % 2.70 % 2.81 % 3.18 % 3.35 % 2.70 % 3.38 %
                       
Taxable equivalent income before income taxes reconciliation                      
Income before income taxes - GAAP $14,980  $16,277  $12,015  $10,481  $2,207  $31,257  $4,658  
Taxable equivalent adjustment  375   365   345   345   354   740   577  
Income before income taxes $15,355  $16,642  $12,360  $10,826  $2,561  $31,997  $5,235  
                       
Taxable equivalent income tax expense reconciliation                      
Income tax expense - GAAP $3,164  $2,915  $2,065  $1,863  $358  $6,079  $685  
Taxable equivalent adjustment  375   365   345   345   354   740   577  
Income tax expense $3,539  $3,280  $2,410  $2,208  $712  $6,819  $1,262  
                       
Tangible book value per common share reconciliation                      
Total shareholders’ equity $353,185  $340,328  $338,586  $340,309  $335,980  $353,185  $335,980  
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925) 
Total tangible common equity $333,260  $320,403  $318,661  $320,384  $316,055  $333,260  $316,055  
Common shares outstanding  20,319,429   20,354,077   20,394,912   21,202,783   21,477,631   20,319,429   21,477,631  
Book value per common share - GAAP $17.38  $16.72  $16.60  $16.05  $15.64  $17.38  $15.64  
Tangible book value  16.40   15.74   15.62   15.11   14.72   16.40   14.72  
                       
Tangible common equity to tangible assets reconciliation                      
Total shareholders’ equity $353,185  $340,328  $338,586  $340,309  $335,980  $353,185  $335,980  
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925) 
Total tangible common equity $333,260  $320,403  $318,661  $320,384  $316,055  $333,260  $316,055  
                       
Total assets $3,780,445  $3,732,668  $3,615,617  $2,923,977  $2,890,622  $3,780,445  $2,890,622  
Intangible assets  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925)  (19,925) 
Total tangible assets $3,760,520  $3,712,743  $3,595,692  $2,904,052  $2,870,697  $3,760,520  $2,870,697  
Tangible common equity to tangible assets  8.86 % 8.63 % 8.86 % 11.03 % 11.01 % 8.86 % 11.01 %
                       
Allowance for credit losses to loans held for investment reconciliation                      
Total loans held for investment $2,264,899  $2,300,814  $2,249,036  $2,188,035  $2,184,694  $2,264,899  $2,184,694  
PPP loans  (105,684)  (218,766)  (192,160)  (231,834)  (234,049)  (105,684)  (234,049) 
Total loans held for investment excluding PPP loans $2,159,215  $2,082,048  $2,056,876  $1,956,201  $1,950,645  $2,159,215  $1,950,645  
                       
Allowance for credit losses to loans held for investment  1.27 % 1.31 % 1.55 % 1.59 % 1.61 % 1.27 % 1.61 %
Allowance for credit losses to loans held for investment excluding PPP loans  1.33 % 1.45 % 1.70 % 1.78 % 1.80 % 1.33 % 1.80 %
                       



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