ATLANTA, April 26, 2018 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) announced net income of $5.0 million, or $0.19 per diluted share, compared to a loss of $15.3 million, or ($0.60) per diluted share, in the fourth quarter of 2017.
First Quarter Highlights(1)
“These improved results reflect solid growth in our core corporate and business banking activities, higher loan yields, and the benefit of our cost reduction initiatives undertaken in prior quarters. We anticipate continued improvement in operating results throughout 2018 and into next year,” explained Douglas Williams, President and Chief Executive Officer.
Income Statement(1)
Net interest income increased to $21.6 million in the first quarter of 2018 from $21.3 million in the fourth quarter of 2017, primarily as a result of higher loan yields and higher loan balances. Net accretion income on acquired loans totaled $448,000 in the first quarter of 2018 compared to $686,000 in the fourth quarter of 2017.
Net interest margin was 3.51% in the first quarter of 2018, an increase of 12 basis points from the fourth quarter of 2017. The accretion from the acquired loan discount and amortization of time deposit premium contributed 9 basis points to the net interest margin in the first quarter of 2018 compared to 12 basis points in the fourth quarter of 2017.
Loan yields in the first quarter of 2018 increased 13 basis points to 4.74% from the fourth quarter of 2017 as a result of the increases in the federal funds rate and 1 month LIBOR, offset by a decrease in accretion income. Accretion income contributed 9 basis points to the loan yield in the first quarter of 2018 compared to 15 basis points in the fourth quarter of 2017.
The cost of total deposits in the first quarter of 2018 was 0.57%, an increase of 5 basis points from the fourth quarter of 2017. The cost of interest bearing deposits increased 8 basis points to 0.81% from the fourth quarter of 2017, driven by increased competition for deposits.
The provision for loan losses was $772,000 in the first quarter of 2018 compared to $282,000 in the fourth quarter of 2017. The first quarter included net charge offs of $231,000 compared to a net recovery of $192,000 in the fourth quarter of 2017.
Noninterest income totaled $4.0 million in the first quarter of 2018, an increase of $415,000 from the fourth quarter of 2017. SBA income increased $459,000 in the first quarter of 2018 from the fourth quarter of 2017 due to a higher volume of SBA loan sales.
(1) Commentary is on a fully taxable-equivalent basis unless otherwise noted. Consistent with SEC guidance in Industry Guide 3 that contemplates the calculation of tax-exempt income on a tax equivalent basis, net interest income and net interest margin are provided on a fully taxable-equivalent basis, which generally assumes a 21% marginal tax rate for 2018 and 35% for 2017 and prior. We provide detailed reconciliations in the Non-GAAP Performance and Financial Measures Reconciliation table beginning on page 11. See Non-GAAP Financial Measures below for additional information.
The closing on the sale of the Southeastern Trust Company is expected to occur in the second quarter of 2018 and result in a gain of approximately $1.7 million. Quarterly expense savings are expected to be approximately $450,000 to $500,000 but will be offset by an expected decrease in quarterly trust income of approximately $518,000, based on first quarter 2018 results.
Noninterest expense totaled $18.4 million in the first quarter of 2018 compared to $20.6 million in the fourth quarter of 2017. Salaries and employee benefits expense decreased by $1.2 million in the first quarter of 2018 to $12.1 million and included $1.1 million in severance expense and seasonally higher payroll taxes. Professional fees decreased $448,000 from lower legal and consulting fees. The first quarter of 2018 included a write down on other real estate owned of $227,000 on a previously closed branch.
Balance Sheet
Total loans were $1.96 billion at March 31, 2018, an increase of $24.9 million from December 31, 2017. Loans held for investment were $1.96 billion at March 31, 2018, an increase of $25.6 million from December 31, 2017, as commercial and industrial loans grew $20.8 million during the quarter from an increase in new loan originations and increased balances on existing loans.
At March 31, 2018, the allowance for loan losses was $19.9 million, or 1.01% of loans held for investment, compared to $19.3 million, or 1.00% of loans held for investment as of December 31, 2017. Annualized net charge-offs to average loans totaled 0.05% in the first quarter of 2018. Nonperforming assets totaled $3.4 million, or 0.13% of total assets, as of March 31, 2018, compared to $4.1 million, or 0.14% of total assets, as of December 31, 2017.
Total average deposits for the first quarter of 2018 were $2.15 billion, a decrease of $41.0 million from the fourth quarter of 2017. This decrease was the result of seasonal volatility and a large increase in temporary deposits during the fourth quarter of 2017. Average noninterest bearing deposits accounted for 29.7% of average total deposits compared to 29.6% in the fourth quarter of 2017.
Earnings Conference Call
The Company will host a conference call at 9:00 a.m. EDT on Friday, April 27, 2018, to discuss the financial results for the quarter ended March 31, 2018. Individuals wishing to participate in the conference call may do so by dialing 844.868.8848 from the United States and entering Conference ID 89772886. The call will also be available live via webcast on the Investor Relations page of the Company's website, www.atlanticcapitalbank.com.
Non-GAAP Financial Measures
Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) operating net income; (ii) taxable equivalent interest income; (iii) taxable equivalent net interest income; (iv) taxable equivalent net interest margin; (v) operating income before taxes; (vi) operating income tax expense; (vii) operating return on average assets; (viii) operating return on average equity; (ix) tangible common equity; (x) operating diluted earnings per share; and (xi) tangible book value per common share, in its analysis of the Company's performance. Operating net income excludes the revaluation of net deferred tax assets. Tangible common equity excludes goodwill and other intangible assets from shareholders' equity.
Management believes that non-GAAP financial measures provide a greater understanding of ongoing performance and operations, and enhance comparability with prior periods. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as determined in accordance with GAAP, and investors should consider Atlantic Capital’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Non-GAAP financial measures may not be comparable to non-GAAP financial measures presented by other companies.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about Atlantic Capital’s confidence in its strategies and its expectations about financial performance, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings. The forward-looking statements are based largely on Atlantic Capital’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond Atlantic Capital’s control. Atlantic Capital undertakes no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements as a result of, among other factors, the risks and uncertainties described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Atlantic Capital’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Please refer to the SEC’s website at www.sec.gov where you can review those documents.
About Atlantic Capital Bancshares
Atlantic Capital Bancshares, Inc. is a $2.7 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers banking, treasury management, capital markets, trust, and mortgage services to privately held companies and individuals in Atlanta, eastern Tennessee, and northwest Georgia. Atlantic Capital also provides specialized financial services to select clients nationally.
Media Contact:
Ashley Carson
Corporate and Community Affairs Executive
Email: ashley.carson@atlcapbank.com
Phone: 404-995-6050
Financial Contact:
Patrick Oakes
Executive Vice President and Chief Financial Officer
Email: patrick.oakes@atlcapbank.com
Phone: 404-995-6050
| ATLANTIC CAPITAL BANCSHARES, INC. | |||||||||||||||||||||||||
| Selected Financial Information | |||||||||||||||||||||||||
| 2018 | 2017 | First Quarter 2018 to 2017 Change | |||||||||||||||||||||||
| (in thousands, except share and per share data; taxable equivalent) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||||||
| INCOME SUMMARY | |||||||||||||||||||||||||
| Interest income (1) | $ | 26,085 | $ | 25,350 | $ | 24,566 | $ | 24,545 | $ | 22,716 | 15 | % | |||||||||||||
| Interest expense | 4,465 | 4,028 | 4,060 | 3,833 | 3,208 | 39 | |||||||||||||||||||
| Net interest income | 21,620 | 21,322 | 20,506 | 20,712 | 19,508 | 11 | |||||||||||||||||||
| Provision for loan losses | 772 | 282 | 322 | 1,980 | 634 | 22 | |||||||||||||||||||
| Net interest income after provision for loan losses | 20,848 | 21,040 | 20,184 | 18,732 | 18,874 | 10 | |||||||||||||||||||
| Noninterest income | 3,983 | 3,568 | 3,477 | 5,287 | 3,857 | 3 | |||||||||||||||||||
| Noninterest expense | 18,392 | 20,594 | 17,504 | 17,623 | 17,744 | 4 | |||||||||||||||||||
| Income before income taxes | 6,439 | 4,014 | 6,157 | 6,396 | 4,987 | 29 | |||||||||||||||||||
| Operating income tax expense (2) | 1,401 | 1,953 | 2,105 | 2,067 | 1,757 | (20 | ) | ||||||||||||||||||
| Operating net income (2) | 5,038 | 2,061 | 4,052 | 4,329 | 3,230 | 56 | |||||||||||||||||||
| Revaluation of net deferred tax asset | — | 17,398 | — | — | — | — | |||||||||||||||||||
| Net income (loss) - GAAP | $ | 5,038 | $ | (15,337 | ) | $ | 4,052 | $ | 4,329 | $ | 3,230 | 56 | % | ||||||||||||
| PER SHARE DATA | |||||||||||||||||||||||||
| Diluted earnings (loss) per share - GAAP | $ | 0.19 | $ | (0.60 | ) | $ | 0.16 | $ | 0.17 | $ | 0.13 | ||||||||||||||
| Diluted earnings per share - operating (2) | 0.19 | 0.08 | 0.16 | 0.17 | 0.13 | ||||||||||||||||||||
| Book value per share | 11.91 | 11.99 | 12.63 | 12.45 | 12.18 | ||||||||||||||||||||
| Tangible book value per common share (3) | 10.98 | 11.05 | 11.67 | 11.47 | 11.16 | ||||||||||||||||||||
| PERFORMANCE MEASURES | |||||||||||||||||||||||||
| Return on average equity - GAAP | 6.66 | % | (18.66 | ) | % | 4.96 | % | 5.48 | % | 4.19 | % | ||||||||||||||
| Return on average equity - operating (2) | 6.66 | 2.51 | 4.96 | 5.48 | 4.19 | ||||||||||||||||||||
| Return on average assets - GAAP | 0.76 | (2.24 | ) | 0.60 | 0.63 | 0.48 | |||||||||||||||||||
| Return on average assets - operating (2) | 0.76 | 0.30 | 0.60 | 0.63 | 0.48 | ||||||||||||||||||||
| Taxable equivalent net interest margin | 3.51 | 3.39 | 3.26 | 3.26 | 3.20 | ||||||||||||||||||||
| Efficiency ratio | 72.13 | 83.45 | 73.65 | 68.37 | 76.78 | ||||||||||||||||||||
| CAPITAL | |||||||||||||||||||||||||
| Average equity to average assets | 11.34 | % | 11.99 | % | 11.99 | % | 11.47 | % | 11.44 | % | |||||||||||||||
| Tangible common equity to tangible assets | 10.50 | 9.91 | 11.48 | 10.99 | 10.27 | ||||||||||||||||||||
| Tier 1 capital ratio | 11.2 | (5 | ) | 11.2 | 11.3 | 10.9 | 10.7 | ||||||||||||||||||
| Total risk based capital ratio | 14.2 | (5 | ) | 14.1 | 14.3 | 14.0 | 13.8 | ||||||||||||||||||
| Number of common shares outstanding - basic | 25,772,208 | 25,712,909 | 25,716,418 | 25,654,521 | 25,535,013 | ||||||||||||||||||||
| Number of common shares outstanding - diluted | 26,000,216 | 25,891,225 | 25,967,575 | 25,931,671 | 25,836,809 | ||||||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||||||||
| Allowance for loan losses to loans held for investment | 1.01 | % | 1.00 | % | 0.99 | % | 1.11 | % | 1.05 | % | |||||||||||||||
| Net charge-offs to average loans (4) | 0.05 | (0.04 | ) | 0.68 | 0.01 | 0.26 | |||||||||||||||||||
| Non-performing assets to total assets | 0.13 | 0.14 | 0.23 | 0.52 | 0.21 | ||||||||||||||||||||
| (1)Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for the quarter ended March 31, 2018 and 35% for all four quarters of 2017, reflecting the statutory federal income tax rates. (2)Excludes revaluation of net deferred tax asset. (3)Excludes effect of acquisition related intangibles. (4)Annualized. (5)Amounts are estimates as of 3/31/18. | |||||||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||
| Consolidated Balance Sheets (unaudited) | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| (in thousands, except share data) | 2018 | 2017 | 2017 | |||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 39,985 | $ | 38,086 | $ | 34,626 | ||||||
| Interest-bearing deposits in banks | 62,787 | 281,247 | 158,920 | |||||||||
| Other short-term investments | 9,669 | 10,681 | 20,870 | |||||||||
| Cash and cash equivalents | 112,441 | 330,014 | 214,416 | |||||||||
| Investment securities available-for-sale | 458,730 | 449,117 | 456,942 | |||||||||
| Other investments | 37,949 | 32,174 | 28,331 | |||||||||
| Loans held for sale | 835 | 1,487 | 29,241 | |||||||||
| Loans held for investment | 1,959,421 | 1,933,839 | 1,901,724 | |||||||||
| Less: allowance for loan losses | (19,885 | ) | (19,344 | ) | (19,939 | ) | ||||||
| Loans held for investment, net | 1,939,536 | 1,914,495 | 1,881,785 | |||||||||
| Branch premises held for sale | — | — | 2,897 | |||||||||
| Premises and equipment, net | 15,475 | 12,054 | 12,308 | |||||||||
| Bank owned life insurance | 64,014 | 63,667 | 62,516 | |||||||||
| Goodwill and intangible assets, net | 27,485 | 27,633 | 29,186 | |||||||||
| Other real estate owned | 927 | 1,215 | 1,869 | |||||||||
| Other assets | 61,273 | 59,565 | 82,587 | |||||||||
| Total assets | $ | 2,718,665 | $ | 2,891,421 | $ | 2,802,078 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Noninterest-bearing demand | $ | 599,838 | $ | 732,442 | $ | 606,386 | ||||||
| Interest-bearing checking | 302,636 | 306,331 | 259,760 | |||||||||
| Savings | 29,407 | 26,573 | 30,756 | |||||||||
| Money market | 911,449 | 1,117,891 | 916,390 | |||||||||
| Time | 140,594 | 138,612 | 150,867 | |||||||||
| Brokered deposits | 112,376 | 128,816 | 209,385 | |||||||||
| Deposits to be assumed in branch sale | — | — | 29,495 | |||||||||
| Total deposits | 2,096,300 | 2,450,665 | 2,203,039 | |||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 47,855 | — | — | |||||||||
| Federal Home Loan Bank borrowings | 185,000 | 45,000 | 217,000 | |||||||||
| Long-term debt | 49,577 | 49,535 | 49,408 | |||||||||
| Other liabilities | 32,874 | 37,796 | 21,664 | |||||||||
| Total liabilities | 2,411,606 | 2,582,996 | 2,491,111 | |||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||
| Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2018, December 31, 2017, and March 31, 2017 | — | — | — | |||||||||
| Common stock, no par value; 100,000,000 shares authorized; 25,772,208, 25,712,909, and 25,535,013 shares issued and outstanding as of March 31, 2018, December 31, 2017, and March 31, 2017, respectively | 300,893 | 299,474 | 296,608 | |||||||||
| Retained earnings | 18,693 | 12,810 | 19,766 | |||||||||
| Accumulated other comprehensive (loss) income | (12,527 | ) | (3,859 | ) | (5,407 | ) | ||||||
| Total shareholders’ equity | 307,059 | 308,425 | 310,967 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,718,665 | $ | 2,891,421 | $ | 2,802,078 | ||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||
| Consolidated Statements of Income (unaudited) | ||||||||||||||||||||
| (in thousands, except share and per share data) | Three months ended | |||||||||||||||||||
| March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||
| Loans, including fees | $ | 22,675 | $ | 22,043 | $ | 21,491 | $ | 21,361 | $ | 19,994 | ||||||||||
| Investment securities available-for-sale | 2,592 | 2,510 | 2,298 | 2,355 | 2,018 | |||||||||||||||
| Interest and dividends on other interest‑earning assets | 715 | 584 | 562 | 606 | 449 | |||||||||||||||
| Total interest income | 25,982 | 25,137 | 24,351 | 24,322 | 22,461 | |||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Interest on deposits | 3,044 | 2,856 | 2,693 | 2,481 | 2,047 | |||||||||||||||
| Interest on Federal Home Loan Bank advances | 509 | 323 | 459 | 452 | 302 | |||||||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase | 83 | 26 | 84 | 76 | 36 | |||||||||||||||
| Interest on long-term debt | 829 | 823 | 824 | 824 | 823 | |||||||||||||||
| Total interest expense | 4,465 | 4,028 | 4,060 | 3,833 | 3,208 | |||||||||||||||
| NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES | 21,517 | 21,109 | 20,291 | 20,489 | 19,253 | |||||||||||||||
| Provision for loan losses | 772 | 282 | 322 | 1,980 | 634 | |||||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 20,745 | 20,827 | 19,969 | 18,509 | 18,619 | |||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||
| Service charges | 1,192 | 1,206 | 1,247 | 1,274 | 1,349 | |||||||||||||||
| Gains (losses) on sale of securities | — | 17 | (80 | ) | — | — | ||||||||||||||
| Gains (losses) on sale of other assets | (46 | ) | (46 | ) | 44 | 666 | 78 | |||||||||||||
| Mortgage income | 304 | 290 | 320 | 388 | 257 | |||||||||||||||
| Trust income | 518 | 482 | 437 | 488 | 407 | |||||||||||||||
| Derivatives income | 114 | 94 | (3 | ) | 116 | (51 | ) | |||||||||||||
| Bank owned life insurance | 369 | 384 | 384 | 384 | 378 | |||||||||||||||
| SBA lending activities | 1,302 | 843 | 888 | 1,171 | 1,227 | |||||||||||||||
| Gains on sale of branches | — | — | — | 302 | — | |||||||||||||||
| Other noninterest income | 230 | 298 | 240 | 498 | 212 | |||||||||||||||
| Total noninterest income | 3,983 | 3,568 | 3,477 | 5,287 | 3,857 | |||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||
| Salaries and employee benefits | 12,077 | 13,298 | 10,409 | 10,603 | 11,065 | |||||||||||||||
| Occupancy | 1,355 | 1,156 | 1,129 | 1,074 | 1,230 | |||||||||||||||
| Equipment and software | 787 | 872 | 776 | 996 | 805 | |||||||||||||||
| Professional services | 832 | 1,280 | 1,595 | 973 | 904 | |||||||||||||||
| Postage, printing and supplies | 58 | 114 | 63 | 78 | 85 | |||||||||||||||
| Communications and data processing | 1,043 | 1,111 | 982 | 1,069 | 987 | |||||||||||||||
| Marketing and business development | 190 | 225 | 272 | 179 | 270 | |||||||||||||||
| FDIC premiums | 147 | 212 | 308 | 132 | 314 | |||||||||||||||
| Merger and conversion costs | — | — | — | 304 | — | |||||||||||||||
| Amortization of intangibles | 343 | 367 | 391 | 425 | 470 | |||||||||||||||
| Foreclosed property/problem asset expense | 282 | 7 | 7 | 107 | 3 | |||||||||||||||
| Other noninterest expense | 1,278 | 1,952 | 1,572 | 1,683 | 1,611 | |||||||||||||||
| Total noninterest expense | 18,392 | 20,594 | 17,504 | 17,623 | 17,744 | |||||||||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 6,336 | 3,801 | 5,942 | 6,173 | 4,732 | |||||||||||||||
| Provision for income taxes | 1,298 | 19,138 | 1,890 | 1,844 | 1,502 | |||||||||||||||
| NET INCOME (LOSS) | $ | 5,038 | $ | (15,337 | ) | $ | 4,052 | $ | 4,329 | $ | 3,230 | |||||||||
| Net income (loss) per common share ‑ basic | $ | 0.20 | $ | (0.60 | ) | $ | 0.16 | $ | 0.17 | $ | 0.13 | |||||||||
| Net income (loss) per common share ‑ diluted | $ | 0.19 | $ | (0.60 | ) | $ | 0.16 | $ | 0.17 | $ | 0.13 | |||||||||
| Weighted average shares - basic | 25,750,824 | 25,723,548 | 25,699,179 | 25,621,910 | 25,320,690 | |||||||||||||||
| Weighted average shares - diluted | 25,945,773 | 25,888,064 | 25,890,779 | 25,831,281 | 25,672,286 | |||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||
| Average Balance Sheets and Net Interest Margin Analysis | ||||||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||
| March 31, 2018 | December 31, 2017 | |||||||||||||||||||||||
| (dollars in thousands; taxable equivalent) | Average Balance | Interest Income/ Expense | Tax Equivalent Yield/Rate | Average Balance | Interest Income/ Expense | Tax Equivalent Yield/Rate | ||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Interest bearing deposits in other banks | $ | 78,207 | $ | 397 | 2.06 | % | $ | 113,553 | $ | 302 | 1.06 | % | ||||||||||||
| Other short-term investments | 10,346 | 63 | 2.47 | 8,532 | 40 | 1.86 | ||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||
| Taxable investment securities | 375,771 | 2,116 | 2.28 | 378,859 | 2,024 | 2.12 | ||||||||||||||||||
| Non-taxable investment securities(1) | 78,146 | 579 | 3.00 | 81,410 | 699 | 3.41 | ||||||||||||||||||
| Total investment securities | 453,917 | 2,695 | 2.41 | 460,269 | 2,723 | 2.35 | ||||||||||||||||||
| Total loans | 1,938,953 | 22,675 | 4.74 | 1,898,745 | 22,043 | 4.61 | ||||||||||||||||||
| FHLB and FRB stock | 17,895 | 255 | 5.78 | 16,693 | 242 | 5.75 | ||||||||||||||||||
| Total interest-earning assets | 2,499,318 | 26,085 | 4.23 | 2,497,792 | 25,350 | 4.03 | ||||||||||||||||||
| Non-earning assets | 205,504 | 222,278 | ||||||||||||||||||||||
| Total assets | $ | 2,704,822 | $ | 2,720,070 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||||||||
| NOW, money market, and savings | 1,257,580 | 2,251 | 0.73 | 1,276,116 | 2,140 | 0.67 | ||||||||||||||||||
| Time deposits | 139,788 | 314 | 0.91 | 140,921 | 301 | 0.85 | ||||||||||||||||||
| Brokered deposits | 117,787 | 479 | 1.65 | 128,594 | 415 | 1.28 | ||||||||||||||||||
| Total interest-bearing deposits | 1,515,155 | 3,044 | 0.81 | 1,545,631 | 2,856 | 0.73 | ||||||||||||||||||
| Total borrowings | 156,822 | 592 | 1.53 | 111,879 | 349 | 1.24 | ||||||||||||||||||
| Total long-term debt | 49,550 | 829 | 6.79 | 49,507 | 823 | 6.60 | ||||||||||||||||||
| Total interest-bearing liabilities | 1,721,527 | 4,465 | 1.05 | 1,707,017 | 4,028 | 0.94 | ||||||||||||||||||
| Demand deposits | 638,730 | 649,218 | ||||||||||||||||||||||
| Other liabilities | 37,744 | 37,776 | ||||||||||||||||||||||
| Shareholders' equity | 306,821 | 326,059 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 2,704,822 | $ | 2,720,070 | ||||||||||||||||||||
| Net interest spread | 3.18 | % | 3.09 | % | ||||||||||||||||||||
| Net interest income and net interest margin(2) | $ | 21,620 | 3.51 | % | $ | 21,322 | 3.39 | % | ||||||||||||||||
| Non-taxable equivalent net interest margin | 3.49 | % | 3.35 | % | ||||||||||||||||||||
| (1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for the three months ended March 31, 2018 and 35% for the three months ended December 31, 2017, reflecting the statutory federal income tax rates. | ||||||||||||||||||||||||
| (2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset. | ||||||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||
| Period End Loans | ||||||||||||||||||||||||||||
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | Linked Quarter Change | Year Over Year Change | |||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||||
| Loans held for sale | $ | 835 | $ | 1,487 | $ | 3,274 | $ | 1,744 | $ | 1,297 | $ | (652 | ) | $ | (462 | ) | ||||||||||||
| Branch loans held for sale | — | — | — | — | 27,944 | — | (27,944 | ) | ||||||||||||||||||||
| Total loans held for sale | $ | 835 | $ | 1,487 | $ | 3,274 | $ | 1,744 | $ | 29,241 | $ | (652 | ) | $ | (28,406 | ) | ||||||||||||
| Loans held for investment | ||||||||||||||||||||||||||||
| Commercial loans: | ||||||||||||||||||||||||||||
| Commercial and industrial | $ | 636,181 | $ | 615,359 | $ | 562,426 | $ | 578,888 | $ | 544,911 | $ | 20,822 | $ | 91,270 | ||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||
| Multifamily | 99,227 | 99,553 | 91,219 | 113,571 | 108,215 | (326 | ) | (8,988 | ) | |||||||||||||||||||
| Owner occupied | 353,235 | 346,746 | 348,447 | 351,733 | 348,888 | 6,489 | 4,347 | |||||||||||||||||||||
| Investment | 461,638 | 494,116 | 505,188 | 517,571 | 478,485 | (32,478 | ) | (16,847 | ) | |||||||||||||||||||
| Construction and land: | ||||||||||||||||||||||||||||
| 1-4 family residential construction | 6,571 | 6,906 | 9,644 | 11,711 | 11,799 | (335 | ) | (5,228 | ) | |||||||||||||||||||
| Other construction, development, and land | 139,333 | 108,589 | 122,436 | 113,347 | 123,838 | 30,744 | 15,495 | |||||||||||||||||||||
| Mortgage warehouse loans | 44,575 | 39,981 | 41,551 | 47,992 | 58,357 | 4,594 | (13,782 | ) | ||||||||||||||||||||
| Total commercial loans | 1,740,760 | 1,711,250 | 1,680,911 | 1,734,813 | 1,674,493 | 29,510 | 66,267 | |||||||||||||||||||||
| Residential: | ||||||||||||||||||||||||||||
| Residential mortgages | 105,255 | 104,484 | 101,976 | 101,798 | 99,665 | 771 | 5,590 | |||||||||||||||||||||
| Home equity | 70,712 | 76,244 | 78,773 | 79,769 | 81,438 | (5,532 | ) | (10,726 | ) | |||||||||||||||||||
| Total residential loans | 175,967 | 180,728 | 180,749 | 181,567 | 181,103 | (4,761 | ) | (5,136 | ) | |||||||||||||||||||
| Consumer | 30,966 | 29,393 | 31,750 | 31,981 | 32,525 | 1,573 | (1,559 | ) | ||||||||||||||||||||
| Other | 15,181 | 16,278 | 16,106 | 18,013 | 17,611 | (1,097 | ) | (2,430 | ) | |||||||||||||||||||
| 1,962,874 | 1,937,649 | 1,909,516 | 1,966,374 | 1,905,732 | 25,225 | 57,142 | ||||||||||||||||||||||
| Less net deferred fees and other unearned income | (3,453 | ) | (3,810 | ) | (4,084 | ) | (4,283 | ) | (4,008 | ) | 357 | 555 | ||||||||||||||||
| Total loans held for investment | $ | 1,959,421 | $ | 1,933,839 | $ | 1,905,432 | $ | 1,962,091 | $ | 1,901,724 | $ | 25,582 | $ | 57,697 | ||||||||||||||
| Total loans | $ | 1,960,256 | $ | 1,935,326 | $ | 1,908,706 | $ | 1,963,835 | $ | 1,930,965 | $ | 24,930 | $ | 29,291 | ||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | |||||||||||||||||||||
| Allowance for Loan Losses Activity and Credit Quality | |||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||
| (dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||
| Balance at beginning of period | $ | 19,344 | $ | 18,870 | $ | 21,870 | $ | 19,939 | $ | 20,595 | |||||||||||
| Provision for loan losses | 811 | 312 | 314 | 2,048 | 565 | ||||||||||||||||
| Provision for PCI loan losses | (39 | ) | (30 | ) | 8 | (68 | ) | 69 | |||||||||||||
| Loans charged-off: | |||||||||||||||||||||
| Commercial and industrial | (126 | ) | — | (3,292 | ) | — | (781 | ) | |||||||||||||
| Commercial real estate | — | — | — | — | (132 | ) | |||||||||||||||
| Construction and land | — | — | (16 | ) | — | — | |||||||||||||||
| Residential mortgages | (70 | ) | — | — | — | (46 | ) | ||||||||||||||
| Home equity | (58 | ) | — | (31 | ) | (8 | ) | — | |||||||||||||
| Consumer | (3 | ) | (13 | ) | (7 | ) | (57 | ) | (332 | ) | |||||||||||
| Other | — | — | — | — | — | ||||||||||||||||
| Total loans charged-off | (257 | ) | (13 | ) | (3,346 | ) | (65 | ) | (1,291 | ) | |||||||||||
| Recoveries on loans previously charged-off: | |||||||||||||||||||||
| Commercial and industrial | 19 | 192 | 1 | 7 | — | ||||||||||||||||
| Commercial real estate | — | — | — | 2 | — | ||||||||||||||||
| Construction and land | — | 1 | 15 | — | — | ||||||||||||||||
| Residential mortgages | — | — | — | 1 | — | ||||||||||||||||
| Home equity | — | — | — | 1 | — | ||||||||||||||||
| Consumer | 7 | 12 | 8 | 5 | 1 | ||||||||||||||||
| Other | — | — | — | — | — | ||||||||||||||||
| Total recoveries | 26 | 205 | 24 | 16 | 1 | ||||||||||||||||
| Net charge-offs | $ | (231 | ) | $ | 192 | $ | (3,322 | ) | $ | (49 | ) | $ | (1,290 | ) | |||||||
| Balance at period end | $ | 19,885 | $ | 19,344 | $ | 18,870 | $ | 21,870 | $ | 19,939 | |||||||||||
| Loans held for investment | |||||||||||||||||||||
| PCI Loans | $ | 11,837 | $ | 11,754 | $ | 12,090 | $ | 11,510 | $ | 11,841 | |||||||||||
| Non-PCI Loans | 1,947,584 | 1,922,085 | 1,893,342 | 1,950,581 | 1,889,883 | ||||||||||||||||
| $ | 1,959,421 | $ | 1,933,839 | $ | 1,905,432 | $ | 1,962,091 | $ | 1,901,724 | ||||||||||||
| Non-performing loans - PCI | $ | 1,217 | $ | 1,211 | $ | 1,289 | $ | 1,310 | $ | 1,684 | |||||||||||
| Non-performing loans - Non-PCI | $ | 2,501 | $ | 2,912 | $ | 4,553 | $ | 12,300 | $ | 3,983 | |||||||||||
| Foreclosed properties (OREO) | 927 | 1,215 | 1,494 | 1,819 | 1,869 | ||||||||||||||||
| Total nonperforming assets | $ | 3,428 | $ | 4,127 | $ | 6,047 | $ | 14,119 | $ | 5,852 | |||||||||||
| Allowance for loan losses to loans held for investment | 1.01 | % | 1.00 | % | 0.99 | % | 1.11 | % | 1.05 | % | |||||||||||
| Net charge-offs to average loans (1) | 0.05 | (0.04 | ) | 0.68 | 0.01 | 0.26 | |||||||||||||||
| Nonperforming loans as a percentage of total loans (2) | 0.13 | 0.15 | 0.24 | 0.63 | 0.21 | ||||||||||||||||
| Nonperforming assets as a percentage of total assets (2) | 0.13 | 0.14 | 0.23 | 0.52 | 0.21 | ||||||||||||||||
| (1)Annualized. (2)Excludes non-performing PCI loans. | |||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||
| Period End Deposits | ||||||||||||||||||||||||||||
| (dollars in thousands) | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | Linked Quarter Change | Year Over Year Change | |||||||||||||||||||||
| DDA | $ | 599,838 | $ | 732,442 | $ | 599,292 | $ | 612,744 | $ | 606,386 | $ | (132,604 | ) | $ | (6,548 | ) | ||||||||||||
| NOW | 302,636 | 306,331 | 270,740 | 250,254 | 259,760 | (3,695 | ) | 42,876 | ||||||||||||||||||||
| Savings | 29,407 | 26,573 | 30,131 | 30,170 | 30,756 | 2,834 | (1,349 | ) | ||||||||||||||||||||
| Money Market | 911,449 | 1,117,891 | 865,238 | 882,824 | 916,390 | (206,442 | ) | (4,941 | ) | |||||||||||||||||||
| Time | 140,594 | 138,612 | 144,250 | 142,915 | 150,867 | 1,982 | (10,273 | ) | ||||||||||||||||||||
| Brokered | 112,376 | 128,816 | 193,994 | 195,047 | 209,385 | (16,440 | ) | (97,009 | ) | |||||||||||||||||||
| Deposits to be assumed in branch sale | — | — | — | — | 29,495 | — | (29,495 | ) | ||||||||||||||||||||
| Total Deposits | $ | 2,096,300 | $ | 2,450,665 | $ | 2,103,645 | $ | 2,113,954 | $ | 2,203,039 | $ | (354,365 | ) | $ | (106,739 | ) | ||||||||||||
| Payments Clients | $ | 311,943 | $ | 405,873 | $ | 239,079 | $ | 250,104 | $ | 321,899 | $ | (93,930 | ) | $ | (9,956 | ) | ||||||||||||
| Average Deposits(1) | ||||||||||||||||||||||||||||
| 2018 | 2017 | Linked Quarter Change | Year Over Year Change | |||||||||||||||||||||||||
| (dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||||||||||
| DDA | $ | 638,730 | $ | 649,218 | $ | 628,029 | $ | 626,330 | $ | 620,325 | $ | (10,488 | ) | $ | 18,405 | |||||||||||||
| NOW | 329,171 | 338,741 | 291,810 | 293,160 | 290,862 | (9,570 | ) | 38,309 | ||||||||||||||||||||
| Savings | 29,609 | 29,851 | 30,236 | 30,468 | 30,306 | (242 | ) | (697 | ) | |||||||||||||||||||
| Money Market | 898,800 | 907,524 | 870,618 | 860,116 | 815,920 | (8,724 | ) | 82,880 | ||||||||||||||||||||
| Time | 139,788 | 140,921 | 143,862 | 149,898 | 163,021 | (1,133 | ) | (23,233 | ) | |||||||||||||||||||
| Brokered | 117,787 | 128,594 | 156,708 | 198,703 | 191,558 | (10,807 | ) | (73,771 | ) | |||||||||||||||||||
| Total Deposits | $ | 2,153,885 | $ | 2,194,849 | $ | 2,121,263 | $ | 2,158,675 | $ | 2,111,992 | $ | (40,964 | ) | $ | 41,893 | |||||||||||||
| Payments Clients | $ | 256,794 | $ | 234,558 | $ | 209,851 | $ | 244,157 | $ | 273,630 | $ | 22,236 | $ | (16,836 | ) | |||||||||||||
| Noninterest bearing deposits as a percentage of average deposits | 29.7 | % | 29.6 | % | 29.6 | % | 29.0 | % | 29.4 | % | ||||||||||||||||||
| Cost of deposits | 0.57 | % | 0.52 | % | 0.50 | % | 0.46 | % | 0.39 | % | ||||||||||||||||||
| (1) Includes average balances of deposits to be assumed in branch sale. | ||||||||||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | |||||||||||||||||||||
| Non-GAAP Performance and Financial Measures Reconciliation | |||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||
| (in thousands, except share and per share data) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||||||
| Taxable equivalent interest income reconciliation | |||||||||||||||||||||
| Interest income - GAAP | $ | 25,982 | $ | 25,137 | $ | 24,351 | $ | 24,322 | $ | 22,461 | |||||||||||
| Taxable equivalent adjustment | 103 | 213 | 215 | 223 | 255 | ||||||||||||||||
| Interest income - taxable equivalent | $ | 26,085 | $ | 25,350 | $ | 24,566 | $ | 24,545 | $ | 22,716 | |||||||||||
| Taxable equivalent net interest income reconciliation | |||||||||||||||||||||
| Net interest income - GAAP | $ | 21,517 | $ | 21,109 | $ | 20,291 | $ | 20,489 | $ | 19,253 | |||||||||||
| Taxable equivalent adjustment | 103 | 213 | 215 | 223 | 255 | ||||||||||||||||
| Net interest income - taxable equivalent | $ | 21,620 | $ | 21,322 | $ | 20,506 | $ | 20,712 | $ | 19,508 | |||||||||||
| Taxable equivalent net interest margin reconciliation | |||||||||||||||||||||
| Net interest margin - GAAP | 3.49 | % | 3.35 | % | 3.23 | % | 3.23 | % | 3.16 | % | |||||||||||
| Impact of taxable equivalent adjustment | 0.02 | 0.04 | 0.03 | 0.03 | 0.04 | ||||||||||||||||
| Net interest margin - taxable equivalent | 3.51 | % | 3.39 | % | 3.26 | % | 3.26 | % | 3.20 | % | |||||||||||
| Operating income before income taxes reconciliation | |||||||||||||||||||||
| Income before income taxes - GAAP | $ | 6,336 | $ | 3,801 | $ | 5,942 | $ | 6,173 | $ | 4,732 | |||||||||||
| Taxable equivalent adjustment | 103 | 213 | 215 | 223 | 255 | ||||||||||||||||
| Operating income before income taxes | $ | 6,439 | $ | 4,014 | $ | 6,157 | $ | 6,396 | $ | 4,987 | |||||||||||
| Operating income tax reconciliation | |||||||||||||||||||||
| Income tax expense - GAAP | $ | 1,298 | $ | 19,138 | $ | 1,890 | $ | 1,844 | $ | 1,502 | |||||||||||
| Taxable equivalent adjustment | 103 | 213 | 215 | 223 | 255 | ||||||||||||||||
| Revaluation of net deferred tax asset | — | (17,398 | ) | — | — | — | |||||||||||||||
| Operating income tax expense | $ | 1,401 | $ | 1,953 | $ | 2,105 | $ | 2,067 | $ | 1,757 | |||||||||||
| Operating net income reconciliation | |||||||||||||||||||||
| Net income (loss) - GAAP | $ | 5,038 | $ | (15,337 | ) | $ | 4,052 | $ | 4,329 | $ | 3,230 | ||||||||||
| Revaluation of net deferred tax asset | — | 17,398 | — | — | — | ||||||||||||||||
| Operating net income | $ | 5,038 | $ | 2,061 | $ | 4,052 | $ | 4,329 | $ | 3,230 | |||||||||||
| Operating diluted earnings per share reconciliation | |||||||||||||||||||||
| Diluted earnings (loss) per share - GAAP | $ | 0.19 | $ | (0.60 | ) | $ | 0.16 | $ | 0.17 | $ | 0.13 | ||||||||||
| Revaluation of net deferred tax asset | — | 0.68 | — | — | — | ||||||||||||||||
| Diluted earnings per share - operating | $ | 0.19 | $ | 0.08 | $ | 0.16 | $ | 0.17 | $ | 0.13 | |||||||||||
| Tangible book value per common share reconciliation | |||||||||||||||||||||
| Total shareholders’ equity | $ | 307,059 | $ | 308,425 | $ | 324,754 | $ | 319,435 | $ | 310,967 | |||||||||||
| Intangible assets | (24,050 | ) | (24,393 | ) | (24,760 | ) | (25,151 | ) | (25,913 | ) | |||||||||||
| Total tangible common equity | $ | 283,009 | $ | 284,032 | $ | 299,994 | $ | 294,284 | $ | 285,054 | |||||||||||
| Common shares outstanding | 25,772,208 | 25,712,909 | 25,716,418 | 25,654,521 | 25,535,013 | ||||||||||||||||
| Book value per common share - GAAP | $ | 11.91 | $ | 11.99 | $ | 12.63 | $ | 12.45 | $ | 12.18 | |||||||||||
| Tangible book value | 10.98 | 11.05 | 11.67 | 11.47 | 11.16 | ||||||||||||||||
| Return on average equity reconciliation | |||||||||||||||||||||
| Net income (loss) - GAAP | $ | 5,038 | $ | (15,337 | ) | $ | 4,052 | $ | 4,329 | $ | 3,230 | ||||||||||
| Revaluation of net deferred tax asset | — | 17,398 | — | — | — | ||||||||||||||||
| Operating net income | $ | 5,038 | $ | 2,061 | $ | 4,052 | $ | 4,329 | $ | 3,230 | |||||||||||
| Average shareholders' equity | $ | 306,821 | $ | 326,059 | $ | 323,832 | $ | 316,825 | $ | 308,261 | |||||||||||
| Return on average equity - GAAP | 6.66 | % | (18.66 | ) | % | 4.96 | % | 5.48 | % | 4.19 | % | ||||||||||
| Return on average equity - operating | 6.66 | 2.51 | 4.96 | 5.48 | 4.19 | ||||||||||||||||
| Return on average assets reconciliation | |||||||||||||||||||||
| Net income (loss) - GAAP | $ | 5,038 | $ | (15,337 | ) | $ | 4,052 | $ | 4,329 | $ | 3,230 | ||||||||||
| Revaluation of net deferred tax asset | — | 17,398 | — | — | — | ||||||||||||||||
| Operating net income | $ | 5,038 | $ | 2,061 | $ | 4,052 | $ | 4,329 | $ | 3,230 | |||||||||||
| Average assets | $ | 2,704,822 | $ | 2,720,070 | $ | 2,701,387 | $ | 2,762,389 | $ | 2,694,715 | |||||||||||
| Return on average assets - GAAP | 0.76 | % | (2.24 | ) | % | 0.60 | % | 0.63 | % | 0.48 | % | ||||||||||
| Return on average assets - operating | 0.76 | 0.30 | 0.60 | 0.63 | 0.48 | ||||||||||||||||
| Tangible common equity to tangible assets reconciliation | |||||||||||||||||||||
| Total shareholders’ equity | $ | 307,059 | $ | 308,425 | $ | 324,754 | $ | 319,435 | $ | 310,967 | |||||||||||
| Intangible assets | (24,050 | ) | (24,393 | ) | (24,760 | ) | (25,151 | ) | (25,913 | ) | |||||||||||
| Total tangible common equity | $ | 283,009 | $ | 284,032 | $ | 299,994 | $ | 294,284 | $ | 285,054 | |||||||||||
| Total assets | $ | 2,718,665 | $ | 2,891,421 | $ | 2,638,412 | $ | 2,702,575 | $ | 2,802,078 | |||||||||||
| Intangible assets | (24,050 | ) | (24,393 | ) | (24,760 | ) | (25,151 | ) | (25,913 | ) | |||||||||||
| Total tangible assets | $ | 2,694,615 | $ | 2,867,028 | $ | 2,613,652 | $ | 2,677,424 | $ | 2,776,165 | |||||||||||
| Tangible common equity to tangible assets | 10.50 | % | 9.91 | % | 11.48 | % | 10.99 | % | 10.27 | % | |||||||||||