ATLANTA, Jan. 31, 2019 (GLOBE NEWSWIRE) — Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced earnings of $8.8 million, or $0.34 per diluted share, for the fourth quarter of 2018, compared to $6.5 million, or $0.25 per diluted share, in the third quarter of 2018. Net income for 2018 was $28.5 million, or $1.09 per diluted share, compared to a loss of $3.7 million, or ($0.15) per diluted share, for 2017.
On November 14, 2018, Atlantic Capital announced the sale of fourteen branches in Tennessee and northwest Georgia and the mortgage business. This branch divestiture includes the sale of approximately $585 million in deposits and $373 million in loans. The income and expenses related to these branches are included in discontinued operations and prior period financial information has been retrospectively adjusted for the impact of discontinued operations. Subject to customary closing conditions, including the receipt of all necessary regulatory approvals, the transaction is expected to be completed during the second quarter of 2019.
“Atlantic Capital’s results in the fourth quarter of 2018 and for all of 2018 reflect continued strength in our core Atlanta and national commercial businesses. We begin 2019 with solid momentum and good prospects for strong operating performance in our continuing operations,” remarked Douglas Williams, President and Chief Executive Officer.
Fourth Quarter Highlights(1)
- Return on average assets of 1.21% and return on average equity of 10.90%.
- Net income from continuing operations totaled $7.5 million, or $0.29 per diluted share, compared to $7.0 million, or $0.27 per diluted share in the third quarter of 2018.
- Net interest margin from continuing operations was 3.66% compared to 3.48% for the third quarter of 2018.
- Total loans held for investment increased $65.7 million, or 15.8% annualized, compared to September 30, 2018.
- Average deposits from continuing operations increased $127.4 million, or 30.8% annualized, compared to the third quarter of 2018.
- 822,100 shares were repurchased in the fourth quarter totaling $14.2 million.
- Noninterest income includes a $1.9 million loss on the sale of securities that were sold in the fourth quarter to help fund the cash owed to the buyer at the upcoming closing of the branch sale.
- Provision for income taxes includes a $996,000 net benefit as a result of the pending transaction.
2018 Highlights
- Net income from continuing operations totaled $28.1 million, or $1.07 per diluted share, compared to a loss of $4.8 million, or ($0.19) per diluted share in 2017.
- Efficiency ratio – continuing operations improved to 57.9% from 70.4% in 2017.
- Total loans held for investment increased $209.6 million, or 13.8%, compared to December 31, 2017.
- Average deposits from continuing operations in the fourth quarter of 2018 increased $177 million, or 11.0%, compared to the fourth quarter of 2017.
- Net charge-offs to average loans totaled 0.02% compared to 0.23% in 2017.
(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.
Income Statement
Taxable equivalent net interest income from continuing operations increased to $21.2 million in the fourth quarter of 2018 from $19.4 million in the third quarter of 2018, primarily as a result of higher loan balances and an increase in loan yields offset by an increase in the cost of interest bearing deposits. Net interest income from continuing operations does not currently reflect the planned decrease in net interest income necessary to fund the cash amount owed to the buyer at the closing of the branch sale in the second quarter of 2019. The Company anticipates funding the transaction with a combination of brokered deposits and proceeds from sold securities.
Net interest margin from continuing operations was 3.66% in the fourth quarter of 2018, an increase of 18 basis points from the third quarter of 2018, as a result of an increase in loan yields partially offset by higher cost of deposits. Following the close of the branch transaction in the second quarter of 2019, the Company anticipates the net interest margin to range from 3.50% to 3.55%.
The yield on loans from continuing operations in the fourth quarter of 2018 increased 27 basis points to 5.31% from the third quarter of 2018. Loan yields benefited from increases in 1 month LIBOR during the fourth quarter of 2018.
The cost of deposits from continuing operations in the fourth quarter of 2018 was 0.93%, an increase of 17 basis points from the third quarter of 2018. The cost of interest bearing deposits from continuing operations increased 24 basis points to 1.40% from the third quarter of 2018, driven by the increase in rates on money market accounts.
The provision for loan losses for continuing operations was $502,000 in the fourth quarter of 2018, a decrease compared to $845,000 in the third quarter of 2018. The Company recorded negative provision for loan losses totaling $3.1 million included in discontinued operations, primarily due to the classification of $373 million of loans to held for sale.
Noninterest income from continuing operations totaled $164,000 in the fourth quarter of 2018 compared to $2.3 million in the third quarter of 2018. The fourth quarter included a loss of $1.9 million on the sale of $63 million in investment securities to help fund the cash owed to the buyer at the closing of the upcoming branch sale.
SBA income totaled $425,000 in the fourth quarter of 2018, a decrease of $457,000 from the third quarter of 2018, partly as a result of the impact on the sale of SBA loans in December from the shutdown of the Small Business Administration. As of December 31, 2018, loans held for sale included $3.6 million in SBA 7a loans that the Company intends to sell.
Noninterest expense from continuing operations totaled $12.2 million in the fourth quarter of 2018, an increase of $336,000 compared to $11.9 million in the third quarter of 2018. Salaries and employee benefits expense increased by $241,000 from the third quarter of 2018 to $7.6 million in the fourth quarter, primarily from an increase in incentive expense. Compared to the third quarter of 2018, professional fees increased $151,000 in the fourth quarter due to higher consulting fees.
Income tax expense related to continuing operations totaled $1.1 million in the fourth quarter of 2018, compared to $1.9 million in the third quarter of 2018. In the fourth quarter of 2018, the Company recorded a $4.5 million favorable reduction of the valuation allowance on Federal deferred tax assets related to the limitations under Section 382 of the Internal Revenue Code. This reduction was offset by an unfavorable increase of $3.5 million in the valuation allowance related to state net operating losses and carryforwards that are not expected to be utilized.
Balance Sheet
Total loans held for investment were $1.73 billion at December 31, 2018, an increase of $65.7 million, or 15.8% annualized, from September 30, 2018. This included growth of $66.2 million, or 30.2% annualized, in commercial and industrial and owner occupied commercial real estate loans from September 30, 2018.
At December 31, 2018, the allowance for loan losses was $17.9 million, or 1.03% of loans held for investment, a decrease of $2.6 million from the $20.4 million allowance at September 30, 2018. This decrease included a $3.1 million reduction in the allowance for loan losses due to the transfer of the branch sale loans to held for sale.
Annualized net charge-offs to average loans were 0.00% in the fourth quarter of 2018, unchanged from the third quarter of 2018. Nonperforming assets from continuing operations totaled $4.1 million, or 0.14% of total assets, as of December 30, 2018, compared to $3.1 million, or 0.11% of total assets, as of September 30, 2018.
Total average deposits from continuing operations were $1.78 billion for the fourth quarter of 2018, an increase of $127.4 million from the third quarter of 2018. This included increases in large, year-end deposits that the Company anticipates will decrease in the first quarter of 2019.
Earnings Conference Call
The Company will host a conference call at 10:00 a.m. EST on Friday, February 1, 2019, to discuss the financial results for the quarter ended December 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) taxable equivalent interest income; (ii) taxable equivalent net interest income; (iii) taxable equivalent net interest margin; (iv) taxable equivalent income before income taxes; (v) taxable equivalent income tax expense; (vi) tangible assets; (vii) tangible common equity; and (viii) tangible book value per common share, in its analysis of the Company’s performance. Tangible common equity excludes goodwill and other intangible assets from shareholders’ equity.
Management believes that non-GAAP financial measures provide a greater understanding of ongoing performance and operations, and enhance comparability with prior periods. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as determined in accordance with GAAP, and investors should consider Atlantic Capital’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Non-GAAP financial measures may not be comparable to non-GAAP financial measures presented by other companies.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” 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 $2.96 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers banking, treasury management, capital markets and mortgage services to privately held companies and individuals in Atlanta, eastern Tennessee, and northwest Georgia. Atlantic Capital also provides specialized financial services to select clients nationally.
Media Contact:
Ashley Carson
Email: ashley.carson@atlcapbank.com
Phone: 404-995-6050
Financial Contact:
Patrick Oakes
Email: patrick.oakes@atlcapbank.com
Phone: 404-995-6050
| ATLANTIC CAPITAL BANCSHARES, INC. | |||||||||||||||||||||||||||||
| Selected Financial Information | |||||||||||||||||||||||||||||
| 2018 | 2017 | For the year ended December 31, |
|||||||||||||||||||||||||||
| (in thousands, except share and per share data; taxable equivalent) | Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
2018 | 2017 | ||||||||||||||||||||||
| INCOME SUMMARY (1) | |||||||||||||||||||||||||||||
| Interest income (2) | $ | 26,725 | $ | 24,114 | $ | 22,934 | $ | 21,382 | $ | 20,383 | $ | 95,155 | $ | 76,724 | |||||||||||||||
| Interest expense | 5,560 | 4,720 | 4,392 | 3,841 | 3,454 | 18,513 | 12,986 | ||||||||||||||||||||||
| Net interest income | 21,165 | 19,394 | 18,542 | 17,541 | 16,929 | 76,642 | 63,738 | ||||||||||||||||||||||
| Provision for loan losses | 502 | 845 | (173 | ) | 772 | 282 | 1,946 | 3,218 | |||||||||||||||||||||
| Net interest income after provision for loan losses | 20,663 | 18,549 | 18,715 | 16,769 | 16,647 | 74,696 | 60,520 | ||||||||||||||||||||||
| Noninterest income | 164 | 2,255 | 4,466 | 3,162 | 2,748 | 10,047 | 12,179 | ||||||||||||||||||||||
| Noninterest expense | 12,208 | 11,872 | 12,623 | 13,288 | 15,333 | 49,991 | 52,834 | ||||||||||||||||||||||
| Income from continuing operations before income taxes | 8,619 | 8,932 | 10,558 | 6,643 | 4,062 | 34,752 | 19,865 | ||||||||||||||||||||||
| Income tax expense | 1,136 | 1,934 | 2,180 | 1,452 | 19,370 | 6,702 | 24,621 | ||||||||||||||||||||||
| Net income (loss) from continuing operations | 7,483 | 6,998 | 8,378 | 5,191 | (15,308 | ) | 28,050 | (4,756 | ) | ||||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | 1,347 | (485 | ) | (227 | ) | (153 | ) | (29 | ) | 482 | 1,030 | ||||||||||||||||||
| Net income (loss) | $ | 8,830 | $ | 6,513 | $ | 8,151 | $ | 5,038 | $ | (15,337 | ) | $ | 28,532 | $ | (3,726 | ) | |||||||||||||
| PER SHARE DATA | |||||||||||||||||||||||||||||
| Diluted earnings (loss) per share – continuing operations | $ | 0.29 | $ | 0.27 | $ | 0.32 | $ | 0.20 | $ | (0.60 | ) | $ | 1.07 | $ | (0.19 | ) | |||||||||||||
| Diluted earnings (loss) per share – discontinued operations | 0.05 | (0.02 | ) | (0.01 | ) | (0.01 | ) | — | 0.02 | 0.04 | |||||||||||||||||||
| Diluted earnings (loss) per share | 0.34 | 0.25 | 0.31 | 0.19 | (0.60 | ) | 1.09 | (0.15 | ) | ||||||||||||||||||||
| Book value per share | 12.80 | 12.27 | 12.14 | 11.91 | 11.99 | 12.80 | 11.99 | ||||||||||||||||||||||
| Tangible book value per common share (3) | 11.88 | 11.37 | 11.23 | 10.98 | 11.05 | 11.88 | 11.05 | ||||||||||||||||||||||
| PERFORMANCE MEASURES | |||||||||||||||||||||||||||||
| Return on average equity | 10.90 | % | 8.07 | % | 10.46 | % | 6.66 | % | (18.66 | ) | % | 9.05 | % | (1.17 | ) | % | |||||||||||||
| Return on average assets | 1.21 | 0.92 | 1.20 | 0.76 | (2.24 | ) | 1.03 | (0.14 | ) | ||||||||||||||||||||
| Taxable equivalent net interest margin – continuing operations | 3.66 | 3.48 | 3.51 | 3.39 | 3.23 | 3.50 | 3.07 | ||||||||||||||||||||||
| Efficiency ratio – continuing operations | 57.50 | 55.09 | 55.10 | 64.50 | 78.78 | 57.93 | 70.44 | ||||||||||||||||||||||
| CAPITAL | |||||||||||||||||||||||||||||
| Average equity to average assets | 11.11 | % | 11.41 | % | 11.50 | % | 11.34 | % | 11.99 | % | 11.34 | % | 11.72 | % | |||||||||||||||
| Tangible common equity to tangible assets | 10.25 | 10.38 | 10.99 | 10.50 | 9.91 | 10.25 | 9.91 | ||||||||||||||||||||||
| Tier 1 capital ratio | 11.5 | (6) | 11.8 | 12.0 | 11.3 | 11.2 | 11.5 | (6) | 11.2 | ||||||||||||||||||||
| Total risk based capital ratio | 14.2 | (6) | 14.7 | 15.0 | 14.3 | 14.1 | 14.2 | (6) | 14.1 | ||||||||||||||||||||
| Number of common shares outstanding – basic | 25,290,419 | 26,103,666 | 26,102,217 | 25,772,208 | 25,712,909 | 25,290,419 | 25,712,909 | ||||||||||||||||||||||
| Number of common shares outstanding – diluted | 25,480,233 | 26,281,849 | 26,336,871 | 26,000,216 | 25,891,225 | 25,480,233 | 25,891,225 | ||||||||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||||||||||||
| Allowance for loan losses to loans held for investment (4) | 1.03 | % | 1.00 | % | 1.01 | % | 1.01 | % | 1.00 | % | 1.03 | % | 1.00 | % | |||||||||||||||
| Net charge-offs to average loans (5) | — | — | 0.03 | 0.05 | (0.04 | ) | 0.02 | 0.23 | |||||||||||||||||||||
| Non-performing assets to total assets | 0.20 | 0.13 | 0.14 | 0.13 | 0.14 | 0.20 | 0.14 | ||||||||||||||||||||||
| (1)On November 14, 2018, Atlantic Capital entered into an agreement with FirstBank to sell its Tennessee and northwest Georgia banking operations, including 14 branches and the mortgage business. The banking business and branches to be sold to FirstBank are reported as discontinued operations. Discontinued operations have been reported retrospectively for all periods presented. (2)Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for all periods ending in 2018 and 35% for all periods ending in 2017, reflecting the statutory federal income tax rates. (3)Excludes effect of acquisition related intangibles. (4)The fourth quarter 2018 ratio is calculated on a continuing operations basis. Prior period ratios have not been retroactively adjusted for the impact of discontinued operations. (5)Annualized. (6)Amounts are estimates as of 12/31/18. | |||||||||||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||
| Financial Information from Discontinued Operations | ||||
| Assets and Liabilities from Discontinued Operations | ||||
| (in thousands) | December 31, 2018 | |||
| Cash | $ | 4,234 | ||
| Loans held for sale – discontinued operations | 373,030 | |||
| Premises held for sale – discontinued operations | 7,722 | |||
| Goodwill – discontinued operations | 6,290 | |||
| Other assets | 1,405 | |||
| Total assets | $ | 392,681 | ||
| Deposits to be assumed – discontinued operations | $ | 585,429 | ||
| Securities sold under agreements to repurchase – discontinued operations | 6,220 | |||
| Total liabilities | $ | 591,649 | ||
| Net liabilities | $ | (198,968 | ) | |
| Components of Net Income (Loss) from Discontinued Operations | ||||||||||||||||||||||||||||
| 2018 | 2017 | For the year ended December 31, |
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| (in thousands) | Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
2018 | 2017 | |||||||||||||||||||||
| Net interest income | $ | 3,225 | $ | 3,266 | $ | 3,570 | $ | 4,079 | $ | 4,393 | $ | 14,140 | $ | 18,310 | ||||||||||||||
| Provision for loan losses | (3,097 | ) | — | — | — | — | (3,097 | ) | — | |||||||||||||||||||
| Net interest income after provision | 6,322 | 3,266 | 3,570 | 4,079 | 4,393 | 17,237 | 18,310 | |||||||||||||||||||||
| Service charges | 483 | 474 | 480 | 485 | 484 | 1,922 | 2,342 | |||||||||||||||||||||
| Mortgage income | 320 | 315 | 363 | 304 | 290 | 1,302 | 1,255 | |||||||||||||||||||||
| Other income | 47 | 22 | 22 | 32 | 46 | 123 | 413 | |||||||||||||||||||||
| Total noninterest income | 850 | 811 | 865 | 821 | 820 | 3,347 | 4,010 | |||||||||||||||||||||
| Salaries and employee benefits | 2,757 | 2,820 | 3,010 | 3,127 | 3,300 | 11,714 | 12,245 | |||||||||||||||||||||
| Occupancy | 479 | 556 | 511 | 470 | 523 | 2,016 | 2,073 | |||||||||||||||||||||
| Equipment and software | 158 | 217 | 203 | 201 | 193 | 779 | 1,108 | |||||||||||||||||||||
| Amortization of intangibles | 271 | 296 | 319 | 343 | 367 | 1,229 | 1,653 | |||||||||||||||||||||
| Communications and data processing | 440 | 381 | 346 | 362 | 394 | 1,529 | 1,524 | |||||||||||||||||||||
| Divestiture expense | 825 | — | — | — | — | 825 | — | |||||||||||||||||||||
| Other noninterest expense | 446 | 453 | 349 | 601 | 484 | 1,849 | 2,028 | |||||||||||||||||||||
| Total noninterest expense | 5,376 | 4,723 | 4,738 | 5,104 | 5,261 | 19,941 | 20,631 | |||||||||||||||||||||
| Net income (loss) before provision for income taxes | 1,796 | (646 | ) | (303 | ) | (204 | ) | (48 | ) | 643 | 1,689 | |||||||||||||||||
| Provision (benefit) for income taxes | 449 | (161 | ) | (76 | ) | (51 | ) | (19 | ) | 161 | 659 | |||||||||||||||||
| Net income (loss) from discontinued operations | $ | 1,347 | $ | (485 | ) | $ | (227 | ) | $ | (153 | ) | $ | (29 | ) | $ | 482 | $ | 1,030 | ||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||
| Consolidated Balance Sheets (unaudited) | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| (in thousands, except share data) | 2018 | 2018 | 2017 | |||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 42,895 | $ | 28,007 | $ | 38,086 | ||||||
| Interest-bearing deposits in banks | 216,040 | 140,682 | 281,247 | |||||||||
| Other short-term investments | 9,457 | 20,898 | 10,681 | |||||||||
| Cash and cash equivalents | 268,392 | 189,587 | 330,014 | |||||||||
| Investment securities available-for-sale | 402,486 | 465,756 | 449,117 | |||||||||
| Other investments | 29,236 | 33,021 | 32,174 | |||||||||
| Loans held for sale | 5,889 | 1,886 | 1,487 | |||||||||
| Loans held for sale – discontinued operations(1) | 373,030 | 376,081 | 415,335 | |||||||||
| Loans held for investment(1) | 1,728,073 | 1,662,353 | 1,518,504 | |||||||||
| Less: allowance for loan losses(2) | (17,851 | ) | (20,443 | ) | (19,344 | ) | ||||||
| Loans held for investment, net | 1,710,222 | 1,641,910 | 1,499,160 | |||||||||
| Premises held for sale – discontinued operations(1) | 7,722 | 7,158 | 7,958 | |||||||||
| Premises and equipment, net(1) | 9,779 | 10,213 | 4,096 | |||||||||
| Bank owned life insurance | 65,149 | 64,769 | 63,667 | |||||||||
| Goodwill – discontinued operations(1) | 6,290 | 6,290 | 6,310 | |||||||||
| Goodwill and intangible assets, net(1) | 19,788 | 20,267 | 21,323 | |||||||||
| Other real estate owned | 874 | 968 | 1,215 | |||||||||
| Other assets | 56,583 | 64,815 | 59,565 | |||||||||
| Total assets | $ | 2,955,440 | $ | 2,882,721 | $ | 2,891,421 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Noninterest-bearing demand | $ | 602,252 | $ | 518,155 | $ | 596,328 | ||||||
| Interest-bearing checking | 252,490 | 407,214 | 203,113 | |||||||||
| Savings | 725 | 698 | 530 | |||||||||
| Money market | 987,183 | 759,583 | 925,536 | |||||||||
| Time | 10,623 | 10,396 | 10,812 | |||||||||
| Brokered deposits | 99,241 | 79,119 | 128,816 | |||||||||
| Deposits to be assumed – discontinued operations(1) | 585,429 | 604,659 | 585,530 | |||||||||
| Total deposits | 2,537,943 | 2,379,824 | 2,450,665 | |||||||||
| Securities sold under agreements to repurchase – discontinued operations(1) | 6,220 | 8,904 | — | |||||||||
| Federal Home Loan Bank borrowings | — | 83,000 | 45,000 | |||||||||
| Long-term debt | 49,704 | 49,662 | 49,535 | |||||||||
| Other liabilities | 37,920 | 41,094 | 37,796 | |||||||||
| Total liabilities | 2,631,787 | 2,562,484 | 2,582,996 | |||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2018, September 30, 2018, and December 31, 2017 | — | — | — | |||||||||
| Common stock, no par value; 100,000,000 shares authorized; 25,290,419, 26,103,666, and 25,712,909 shares issued and outstanding as of December 31, 2018, September 30, 2018, and December 31, 2017, respectively | 291,771 | 305,300 | 299,474 | |||||||||
| Retained earnings | 42,187 | 33,357 | 12,810 | |||||||||
| Accumulated other comprehensive (loss) income | (10,305 | ) | (18,420 | ) | (3,859 | ) | ||||||
| Total shareholders’ equity | 323,653 | 320,237 | 308,425 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,955,440 | $ | 2,882,721 | $ | 2,891,421 | ||||||
| (1)Assets and liabilities related to the sale of Tennessee and northwest Georgia banking operations were classified as held for sale as of December 31, 2018, and prior periods have been adjusted retrospectively. (2)The allowance for loan losses has not been adjusted retrospectively for discontinued operations in prior periods. | ||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||
| Consolidated Statements of Income (unaudited) (1) | ||||||||||||||||||||||||||||
| (in thousands, except share and per share data) | Three months ended | Year ended | ||||||||||||||||||||||||||
| December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||||||
| Loans, including fees | $ | 22,752 | $ | 20,117 | $ | 19,269 | $ | 17,972 | $ | 17,076 | $ | 80,110 | $ | 64,436 | ||||||||||||||
| Investment securities available-for-sale | 2,844 | 2,789 | 2,687 | 2,592 | 2,510 | 10,912 | 9,181 | |||||||||||||||||||||
| Interest and dividends on other interest‑earning assets | 1,032 | 1,111 | 880 | 715 | 584 | 3,738 | 2,201 | |||||||||||||||||||||
| Total interest income | 26,628 | 24,017 | 22,836 | 21,279 | 20,170 | 94,760 | 75,818 | |||||||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||||||
| Interest on deposits | 4,185 | 3,182 | 2,715 | 2,424 | 2,282 | 12,506 | 7,934 | |||||||||||||||||||||
| Interest on Federal Home Loan Bank advances | 487 | 637 | 766 | 509 | 323 | 2,399 | 1,536 | |||||||||||||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase | 60 | 77 | 88 | 79 | 26 | 304 | 222 | |||||||||||||||||||||
| Interest on long-term debt | 828 | 824 | 823 | 829 | 823 | 3,304 | 3,294 | |||||||||||||||||||||
| Total interest expense | 5,560 | 4,720 | 4,392 | 3,841 | 3,454 | 18,513 | 12,986 | |||||||||||||||||||||
| NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES | 21,068 | 19,297 | 18,444 | 17,438 | 16,716 | 76,247 | 62,832 | |||||||||||||||||||||
| Provision for loan losses | 502 | 845 | (173 | ) | 772 | 282 | 1,946 | 3,218 | ||||||||||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 20,566 | 18,452 | 18,617 | 16,666 | 16,434 | 74,301 | 59,614 | |||||||||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||||||||||
| Service charges | 876 | 804 | 828 | 707 | 722 | 3,215 | 2,734 | |||||||||||||||||||||
| Gains (losses) on sale of securities | (1,853 | ) | — | (2 | ) | — | 17 | (1,855 | ) | (63 | ) | |||||||||||||||||
| Gains (losses) on sale of other assets | — | 58 | (166 | ) | (46 | ) | (46 | ) | (154 | ) | 742 | |||||||||||||||||
| Trust income | — | — | 507 | 518 | 482 | 1,025 | 1,814 | |||||||||||||||||||||
| Derivatives income | 154 | 20 | 20 | 114 | 94 | 308 | 156 | |||||||||||||||||||||
| Bank owned life insurance | 380 | 379 | 378 | 369 | 384 | 1,506 | 1,530 | |||||||||||||||||||||
| SBA lending activities | 425 | 882 | 997 | 1,302 | 843 | 3,606 | 4,129 | |||||||||||||||||||||
| Gain on sale of trust company | — | — | 1,681 | — | — | 1,681 | — | |||||||||||||||||||||
| Other noninterest income | 182 | 112 | 223 | 198 | 252 | 715 | 1,137 | |||||||||||||||||||||
| Total noninterest income | 164 | 2,255 | 4,466 | 3,162 | 2,748 | 10,047 | 12,179 | |||||||||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 7,573 | 7,332 | 7,911 | 8,950 | 9,998 | 31,766 | 33,130 | |||||||||||||||||||||
| Occupancy | 655 | 732 | 700 | 885 | 633 | 2,972 | 2,516 | |||||||||||||||||||||
| Equipment and software | 783 | 747 | 701 | 586 | 679 | 2,817 | 2,341 | |||||||||||||||||||||
| Professional services | 947 | 796 | 943 | 825 | 1,205 | 3,511 | 4,591 | |||||||||||||||||||||
| Postage, printing and supplies | 30 | 55 | 44 | 37 | 84 | 166 | 244 | |||||||||||||||||||||
| Communications and data processing | 772 | 566 | 657 | 681 | 717 | 2,676 | 2,625 | |||||||||||||||||||||
| Marketing and business development | 224 | 211 | 135 | 140 | 150 | 710 | 798 | |||||||||||||||||||||
| FDIC premiums | 157 | 154 | 143 | 108 | 156 | 562 | 697 | |||||||||||||||||||||
| Merger and conversion costs | — | — | — | — | — | — | 304 | |||||||||||||||||||||
| Other noninterest expense | 1,067 | 1,279 | 1,389 | 1,076 | 1,711 | 4,811 | 5,588 | |||||||||||||||||||||
| Total noninterest expense | 12,208 | 11,872 | 12,623 | 13,288 | 15,333 | 49,991 | 52,834 | |||||||||||||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | 8,522 | 8,835 | 10,460 | 6,540 | 3,849 | 34,357 | 18,959 | |||||||||||||||||||||
| Provision for income taxes | 1,039 | 1,837 | 2,082 | 1,349 | 19,157 | 6,307 | 23,715 | |||||||||||||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS | 7,483 | 6,998 | 8,378 | 5,191 | (15,308 | ) | 28,050 | (4,756 | ) | |||||||||||||||||||
| DISCONTINUED OPERATIONS | ||||||||||||||||||||||||||||
| Income (loss) from discontinued operations | $ | 1,796 | $ | (646 | ) | $ | (303 | ) | $ | (204 | ) | $ | (48 | ) | $ | 643 | $ | 1,689 | ||||||||||
| Provision (benefit) for income taxes | 449 | (161 | ) | (76 | ) | (51 | ) | (19 | ) | 161 | 659 | |||||||||||||||||
| Net income (loss) from discontinued operations | 1,347 | (485 | ) | (227 | ) | (153 | ) | (29 | ) | 482 | 1,030 | |||||||||||||||||
| NET INCOME (LOSS) | $ | 8,830 | $ | 6,513 | $ | 8,151 | $ | 5,038 | $ | (15,337 | ) | $ | 28,532 | $ | (3,726 | ) | ||||||||||||
| Net Income (Loss) per Common Share ‑ Basic | ||||||||||||||||||||||||||||
| Net income (loss) per common share – continuing operations | $ | 0.29 | $ | 0.27 | $ | 0.32 | $ | 0.20 | $ | (0.60 | ) | $ | 1.08 | $ | (0.19 | ) | ||||||||||||
| Net income (loss) per common share – discontinued operations | 0.05 | (0.02 | ) | (0.01 | ) | (0.01 | ) | — | 0.02 | 0.04 | ||||||||||||||||||
| Net Income (Loss) per Common Share ‑ Basic | $ | 0.34 | $ | 0.25 | $ | 0.31 | $ | 0.19 | $ | (0.60 | ) | $ | 1.10 | $ | (0.15 | ) | ||||||||||||
| Net Income (Loss) per Common Share ‑ Diluted | ||||||||||||||||||||||||||||
| Net income (loss) per common share – continuing operations | $ | 0.29 | $ | 0.27 | $ | 0.32 | $ | 0.20 | $ | (0.60 | ) | $ | 1.07 | $ | (0.19 | ) | ||||||||||||
| Net income (loss) per common share – discontinued operations | 0.05 | (0.02 | ) | (0.01 | ) | (0.01 | ) | — | 0.02 | 0.04 | ||||||||||||||||||
| Net Income (Loss) per Common Share ‑ Diluted | $ | 0.34 | $ | 0.25 | $ | 0.31 | $ | 0.19 | $ | (0.60 | ) | $ | 1.09 | $ | (0.15 | ) | ||||||||||||
| Weighted average shares – basic | 25,919,445 | 26,103,397 | 26,010,914 | 25,750,824 | 25,723,548 | 25,947,038 | 25,592,731 | |||||||||||||||||||||
| Weighted average shares – diluted | 26,043,799 | 26,254,772 | 26,200,026 | 25,945,773 | 25,888,064 | 26,111,755 | 25,822,085 | |||||||||||||||||||||
| (1)Discontinued operations have been reported retrospectively for all periods presented. | ||||||||||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||
| Average Balance Sheets and Net Interest Margin Analysis | ||||||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||
| December 31, 2018 | September 30, 2018 | |||||||||||||||||||||||
| (dollars in thousands; taxable equivalent) | Average Balance |
Interest Income/ Expense |
Tax Equivalent Yield/Rate |
Average Balance |
Interest Income/ Expense |
Tax Equivalent Yield/Rate |
||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Interest bearing deposits in other banks | $ | 111,988 | $ | 638 | 2.26 | % | $ | 128,248 | $ | 647 | 2.00 | % | ||||||||||||
| Other short-term investments | 19,078 | 142 | 2.95 | 21,985 | 157 | 2.83 | ||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||
| Taxable investment securities | 376,163 | 2,362 | 2.49 | 385,834 | 2,315 | 2.38 | ||||||||||||||||||
| Non-taxable investment securities(1) | 74,302 | 579 | 3.09 | 75,514 | 571 | 3.00 | ||||||||||||||||||
| Total investment securities | 450,465 | 2,941 | 2.59 | 461,348 | 2,886 | 2.48 | ||||||||||||||||||
| Loans – continuing operations | 1,699,801 | 22,752 | 5.31 | 1,583,459 | 20,117 | 5.04 | ||||||||||||||||||
| FHLB and FRB stock | 15,985 | 252 | 6.25 | 17,624 | 307 | 6.91 | ||||||||||||||||||
| Total interest-earning assets – continuing operations | 2,297,317 | 26,725 | 4.62 | 2,212,664 | 24,114 | 4.32 | ||||||||||||||||||
| Loans held for sale – discontinued operations | 377,052 | 4,509 | 4.74 | 380,358 | 4,502 | 4.70 | ||||||||||||||||||
| Total interest-earning assets | 2,674,369 | 31,234 | 4.63 | 2,593,022 | 28,616 | 4.38 | ||||||||||||||||||
| Non-earning assets | 216,958 | 212,718 | ||||||||||||||||||||||
| Total assets | $ | 2,891,327 | $ | 2,805,740 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||||||||
| NOW, money market, and savings | 1,079,178 | 3,601 | 1.32 | 1,012,953 | 2,791 | 1.09 | ||||||||||||||||||
| Time deposits | 10,116 | 33 | 1.29 | 10,406 | 30 | 1.14 | ||||||||||||||||||
| Brokered deposits | 93,558 | 551 | 2.34 | 67,937 | 361 | 2.11 | ||||||||||||||||||
| Total interest-bearing deposits | 1,182,852 | 4,185 | 1.40 | 1,091,296 | 3,182 | 1.16 | ||||||||||||||||||
| Total borrowings | 91,155 | 547 | 2.38 | 134,609 | 714 | 2.10 | ||||||||||||||||||
| Total long-term debt | 49,677 | 828 | 6.61 | 49,634 | 824 | 6.59 | ||||||||||||||||||
| Total interest-bearing liabilities – continuing operations | 1,323,684 | 5,560 | 1.67 | 1,275,539 | 4,720 | 1.47 | ||||||||||||||||||
| Interest-bearing liabilities – discontinued operations | 472,162 | 1,284 | 1.08 | 473,388 | 1,236 | 1.04 | ||||||||||||||||||
| Total interest-bearing liabilities | 1,795,846 | 6,844 | 1.51 | 1,748,927 | 5,956 | 1.35 | ||||||||||||||||||
| Demand deposits | 597,240 | 561,355 | ||||||||||||||||||||||
| Demand deposits – discontinued operations | 135,774 | 136,572 | ||||||||||||||||||||||
| Other liabilities | 41,120 | 38,796 | ||||||||||||||||||||||
| Shareholders’ equity | 321,347 | 320,090 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,891,327 | $ | 2,805,740 | ||||||||||||||||||||
| Net interest spread – continuing operations | 2.95 | % | 2.85 | % | ||||||||||||||||||||
| Net interest income and net interest margin – continuing operations(2) | $ | 21,165 | 3.66 | % | $ | 19,394 | 3.48 | % | ||||||||||||||||
| Net interest income and net interest margin(2) | $ | 24,390 | 3.62 | % | $ | 22,660 | 3.47 | % | ||||||||||||||||
| Non-taxable equivalent net interest margin | 3.60 | % | 3.45 | % | ||||||||||||||||||||
| (1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rates. | ||||||||||||||||||||||||
| (2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset. | ||||||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||
| Average Balance Sheets and Net Interest Margin Analysis | ||||||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||||||
| Year ended | ||||||||||||||||||||||||
| December 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 | $ | 104,145 | $ | 2,244 | 2.15 | % | $ | 85,525 | $ | 916 | 1.07 | % | ||||||||||||
| Other short-term investments | 15,210 | 426 | 2.80 | 14,266 | 270 | 1.89 | ||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||
| Taxable investment securities | 379,035 | 9,005 | 2.38 | 366,309 | 7,221 | 1.97 | ||||||||||||||||||
| Non-taxable investment securities(1) | 76,064 | 2,302 | 3.03 | 81,466 | 2,866 | 3.52 | ||||||||||||||||||
| Total investment securities | 455,099 | 11,307 | 2.48 | 447,775 | 10,087 | 2.25 | ||||||||||||||||||
| Loans – continuing operations | 1,599,916 | 80,110 | 5.01 | 1,506,862 | 64,436 | 4.28 | ||||||||||||||||||
| FHLB and FRB stock | 17,710 | 1,068 | 6.03 | 18,528 | 1,015 | 5.48 | ||||||||||||||||||
| Total interest-earning assets – continuing operations | 2,192,080 | 95,155 | 4.34 | 2,072,956 | 76,724 | 3.70 | ||||||||||||||||||
| Loans held for sale – discontinued operations | 377,098 | 18,224 | 4.83 | 429,247 | 20,453 | 4.76 | ||||||||||||||||||
| Total interest-earning assets | 2,569,178 | 113,379 | 4.41 | 2,502,203 | 97,177 | 3.88 | ||||||||||||||||||
| Non-earning assets | 211,393 | 217,455 | ||||||||||||||||||||||
| Total assets | $ | 2,780,571 | $ | 2,719,658 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||||||||
| NOW, money market, and savings | 1,001,025 | 10,627 | 1.06 | 868,999 | 5,921 | 0.68 | ||||||||||||||||||
| Time deposits | 10,046 | 115 | 1.14 | 11,345 | 53 | 0.47 | ||||||||||||||||||
| Brokered deposits | 84,105 | 1,764 | 2.10 | 168,685 | 1,960 | 1.16 | ||||||||||||||||||
| Total interest-bearing deposits | 1,095,176 | 12,506 | 1.14 | 1,049,029 | 7,934 | 0.76 | ||||||||||||||||||
| Total borrowings | 139,422 | 2,703 | 1.94 | 175,060 | 1,758 | 1.00 | ||||||||||||||||||
| Total long-term debt | 49,613 | 3,304 | 6.66 | 49,444 | 3,294 | 6.66 | ||||||||||||||||||
| Total interest-bearing liabilities – continuing operations | 1,284,211 | 18,513 | 1.44 | 1,273,533 | 12,986 | 1.02 | ||||||||||||||||||
| Interest-bearing liabilities – discontinued operations | 467,101 | 4,084 | 0.87 | 466,777 | 2,143 | 0.46 | ||||||||||||||||||
| Total interest-bearing liabilities | 1,751,312 | 22,597 | 1.29 | 1,740,310 | 15,129 | 0.87 | ||||||||||||||||||
| Demand deposits | 538,110 | 490,495 | ||||||||||||||||||||||
| Demand deposits – discontinued operations | 137,905 | 140,551 | ||||||||||||||||||||||
| Other liabilities | 37,991 | 29,497 | ||||||||||||||||||||||
| Shareholders’ equity | 315,253 | 318,805 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,780,571 | $ | 2,719,658 | ||||||||||||||||||||
| Net interest spread – continuing operations | 2.90 | % | 2.68 | % | ||||||||||||||||||||
| Net interest income and net interest margin – continuing operations(2) | $ | 76,642 | 3.50 | % | $ | 63,738 | 3.07 | % | ||||||||||||||||
| Net interest income and net interest margin(2) | $ | 90,782 | 3.53 | % | $ | 82,048 | 3.28 | % | ||||||||||||||||
| Non-taxable equivalent net interest margin | 3.52 | % | 3.24 | % | ||||||||||||||||||||
| (1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for the year ended December 31, 2018 and 35% for the year 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(1) | ||||||||||||||||||||||||||||
| (dollars in thousands) | December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
Linked Quarter Change |
Year Over Year Change |
|||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||||
| Loans held for sale | $ | 5,889 | $ | 1,886 | $ | 1,612 | $ | 835 | $ | 1,487 | $ | 4,003 | $ | 4,402 | ||||||||||||||
| Loans held for sale – discontinued operations | 373,030 | 376,081 | 382,848 | 397,212 | 415,335 | (3,051 | ) | (42,305 | ) | |||||||||||||||||||
| Total loans held for sale | $ | 378,919 | $ | 377,967 | $ | 384,460 | $ | 398,047 | $ | 416,822 | $ | 952 | $ | (37,903 | ) | |||||||||||||
| Loans held for investment | ||||||||||||||||||||||||||||
| Commercial loans: | ||||||||||||||||||||||||||||
| Commercial and industrial | $ | 645,374 | $ | 581,632 | $ | 546,381 | $ | 558,536 | $ | 538,917 | $ | 63,742 | $ | 106,457 | ||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||
| Multifamily | 88,826 | 108,001 | 92,013 | 92,016 | 91,475 | (19,175 | ) | (2,649 | ) | |||||||||||||||||||
| Owner occupied | 298,291 | 295,801 | 265,576 | 260,270 | 250,588 | 2,490 | 47,703 | |||||||||||||||||||||
| Investment | 407,711 | 409,145 | 386,072 | 389,410 | 411,923 | (1,434 | ) | (4,212 | ) | |||||||||||||||||||
| Construction and land: | ||||||||||||||||||||||||||||
| 1-4 family residential construction | 1,006 | — | 378 | 287 | 335 | 1,006 | 671 | |||||||||||||||||||||
| Other construction, development, and land | 155,226 | 147,114 | 134,764 | 131,466 | 101,466 | 8,112 | 53,760 | |||||||||||||||||||||
| Mortgage warehouse loans | 27,967 | 27,838 | 38,352 | 44,575 | 39,981 | 129 | (12,014 | ) | ||||||||||||||||||||
| Total commercial loans | 1,624,401 | 1,569,531 | 1,463,536 | 1,476,560 | 1,434,685 | 54,870 | 189,716 | |||||||||||||||||||||
| Residential: | ||||||||||||||||||||||||||||
| Residential mortgages | 32,800 | 24,904 | 20,270 | 19,446 | 12,960 | 7,896 | 19,840 | |||||||||||||||||||||
| Home equity | 22,822 | 33,410 | 32,638 | 34,673 | 39,407 | (10,588 | ) | (16,585 | ) | |||||||||||||||||||
| Total residential loans | 55,622 | 58,314 | 52,908 | 54,119 | 52,367 | (2,692 | ) | 3,255 | ||||||||||||||||||||
| Consumer | 25,851 | 26,825 | 25,531 | 23,214 | 21,959 | (974 | ) | 3,892 | ||||||||||||||||||||
| Other | 24,712 | 10,579 | 12,409 | 11,769 | 13,303 | 14,133 | 11,409 | |||||||||||||||||||||
| 1,730,586 | 1,665,249 | 1,554,384 | 1,565,662 | 1,522,314 | 65,337 | 208,272 | ||||||||||||||||||||||
| Less net deferred fees and other unearned income | (2,513 | ) | (2,896 | ) | (2,921 | ) | (3,453 | ) | (3,810 | ) | 383 | 1,297 | ||||||||||||||||
| Total loans held for investment | $ | 1,728,073 | $ | 1,662,353 | $ | 1,551,463 | $ | 1,562,209 | $ | 1,518,504 | $ | 65,720 | $ | 209,569 | ||||||||||||||
| Total loans | $ | 2,106,992 | $ | 2,040,320 | $ | 1,935,923 | $ | 1,960,256 | $ | 1,935,326 | $ | 66,672 | $ | 171,666 | ||||||||||||||
| (1)Loans held for sale-discontinued operations and loans held for investment have been adjusted retrospectively for all periods presented for the impact of discontinued operations. | ||||||||||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | |||||||||||||||||||||
| Allowance for Loan Losses Activity and Credit Quality | |||||||||||||||||||||
| 2018 | 2017 | ||||||||||||||||||||
| (dollars in thousands) | Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
||||||||||||||||
| Balance at beginning of period | $ | 20,443 | $ | 19,583 | $ | 19,885 | $ | 19,344 | $ | 18,870 | |||||||||||
| Provision for loan losses | 595 | 758 | (173 | ) | 811 | 312 | |||||||||||||||
| Provision for loan losses (reversal of provision) – discontinued operations | (3,097 | ) | — | — | — | — | |||||||||||||||
| Provision for PCI loan losses | (93 | ) | 87 | — | (39 | ) | (30 | ) | |||||||||||||
| Loans charged-off: | |||||||||||||||||||||
| Commercial and industrial | — | — | — | (126 | ) | — | |||||||||||||||
| Commercial real estate | — | — | (50 | ) | — | — | |||||||||||||||
| Construction and land | — | — | — | — | — | ||||||||||||||||
| Residential mortgages | (5 | ) | — | — | (70 | ) | — | ||||||||||||||
| Home equity | — | — | (102 | ) | (58 | ) | — | ||||||||||||||
| Consumer | (3 | ) | — | (10 | ) | (3 | ) | (13 | ) | ||||||||||||
| Other | — | — | — | — | — | ||||||||||||||||
| Total loans charged-off | (8 | ) | — | (162 | ) | (257 | ) | (13 | ) | ||||||||||||
| Recoveries on loans previously charged-off: | |||||||||||||||||||||
| Commercial and industrial | — | — | — | 19 | 192 | ||||||||||||||||
| Commercial real estate | — | — | 28 | — | — | ||||||||||||||||
| Construction and land | — | — | — | — | 1 | ||||||||||||||||
| Residential mortgages | 4 | — | — | — | — | ||||||||||||||||
| Home equity | — | — | — | — | — | ||||||||||||||||
| Consumer | 7 | 15 | 5 | 7 | 12 | ||||||||||||||||
| Other | — | — | — | — | — | ||||||||||||||||
| Total recoveries | 11 | 15 | 33 | 26 | 205 | ||||||||||||||||
| Net charge-offs | $ | 3 | $ | 15 | $ | (129 | ) | $ | (231 | ) | $ | 192 | |||||||||
| Balance at period end (1) | $ | 17,851 | $ | 20,443 | $ | 19,583 | $ | 19,885 | $ | 19,344 | |||||||||||
| Loans | |||||||||||||||||||||
| Loans held for sale | $ | 5,889 | $ | 1,886 | $ | 1,612 | $ | 835 | $ | 1,487 | |||||||||||
| Loans held for sale – discontinued operations | 373,030 | 376,081 | 382,848 | 397,212 | 415,335 | ||||||||||||||||
| Loans held for investment – continuing operations | 1,728,073 | 1,662,353 | 1,551,463 | 1,562,209 | 1,518,504 | ||||||||||||||||
| Total loans | $ | 2,106,992 | $ | 2,040,320 | $ | 1,935,923 | $ | 1,960,256 | $ | 1,935,326 | |||||||||||
| Non-performing loans – continuing operations (4) | $ | 3,252 | $ | 2,160 | $ | 1,697 | $ | 1,941 | $ | 1,915 | |||||||||||
| Non-performing loans – discontinued operations | 1,924 | 556 | 709 | 560 | 997 | ||||||||||||||||
| Total non-performing loans | 5,176 | 2,716 | 2,406 | 2,501 | 2,912 | ||||||||||||||||
| Foreclosed properties (OREO) | 874 | 968 | 1,288 | 927 | 1,215 | ||||||||||||||||
| Total nonperforming assets | $ | 6,050 | $ | 3,684 | $ | 3,694 | $ | 3,428 | $ | 4,127 | |||||||||||
| Allowance for loan losses to loans held for investment (2) | 1.03 | % | 1.00 | % | 1.01 | % | 1.01 | % | 1.00 | % | |||||||||||
| Net charge-offs to average loans (3) | — | — | 0.03 | 0.05 | (0.04 | ) | |||||||||||||||
| Non-performing loans as a percentage of total loans – continuing operations (4) | 0.19 | % | 0.13 | % | 0.11 | % | 0.12 | % | 0.13 | % | |||||||||||
| Non-performing loans as a percentage of total loans – discontinued operations (4) | 0.52 | 0.15 | 0.19 | 0.14 | 0.24 | ||||||||||||||||
| Non-performing loans as a percentage of total loans (4) | 0.25 | 0.13 | 0.12 | 0.13 | 0.15 | ||||||||||||||||
| Non-performing assets as a percentage of total assets – continuing operations (4) | 0.14 | % | 0.11 | % | 0.11 | % | 0.11 | % | 0.11 | % | |||||||||||
| Non-performing assets as a percentage of total assets – discontinued operations (4) | 0.07 | 0.02 | 0.03 | 0.02 | 0.03 | ||||||||||||||||
| Non-performing assets as a percentage of total assets (4) | 0.20 | 0.13 | 0.14 | 0.13 | 0.14 | ||||||||||||||||
| (1) The allowance for loan losses has not been adjusted retrospectively for discontinued operations in prior periods. (2) The fourth quarter 2018 ratio is calculated on a continuing operations basis. Prior period ratios have not been retroactively adjusted for the impact of discontinued operations. (3) Annualized. (4) Excludes non-performing PCI loans. | |||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||||||||||
| Period End Deposits | ||||||||||||||||||||||||||||
| (dollars in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 |
March 31, 2018 | December 31, 2017 | Linked Quarter Change |
Year Over Year Change |
|||||||||||||||||||||
| DDA | $ | 602,252 | $ | 518,155 | $ | 464,282 | $ | 472,181 | $ | 596,328 | $ | 84,097 | $ | 5,924 | ||||||||||||||
| NOW | 252,490 | 407,214 | 241,461 | 214,333 | 203,113 | (154,724 | ) | 49,377 | ||||||||||||||||||||
| Savings | 725 | 698 | 951 | 3,593 | 530 | 27 | 195 | |||||||||||||||||||||
| Money market | 987,183 | 759,583 | 647,247 | 699,311 | 925,536 | 227,600 | 61,647 | |||||||||||||||||||||
| Time | 10,623 | 10,396 | 10,359 | 3,074 | 10,812 | 227 | (189 | ) | ||||||||||||||||||||
| Brokered | 99,241 | 79,119 | 92,656 | 112,376 | 128,816 | 20,122 | (29,575 | ) | ||||||||||||||||||||
| Total deposits – continuing operations | 1,952,514 | 1,775,165 | 1,456,956 | 1,504,868 | 1,865,135 | 177,349 | 87,379 | |||||||||||||||||||||
| Deposits to be assumed – discontinued operations | 585,429 | 604,659 | 609,631 | 591,432 | 585,530 | (19,230 | ) | (101 | ) | |||||||||||||||||||
| Total deposits | $ | 2,537,943 | $ | 2,379,824 | $ | 2,066,587 | $ | 2,096,300 | $ | 2,450,665 | $ | 158,119 | $ | 87,278 | ||||||||||||||
| Payments clients | $ | 397,608 | $ | 258,320 | $ | 251,748 | $ | 311,943 | $ | 405,873 | $ | 139,288 | $ | (8,265 | ) | |||||||||||||
| Average Deposits | ||||||||||||||||||||||||||||
| 2018 | 2017 | Linked |
||||||||||||||||||||||||||
| (dollars in thousands) | Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
Quarter Change |
Q4 2018 vs Q4 2017 |
|||||||||||||||||||||
| DDA | $ | 597,239 | $ | 561,355 | $ | 489,722 | $ | 502,829 | $ | 509,301 | $ | 35,884 | $ | 87,938 | ||||||||||||||
| NOW | 280,449 | 314,759 | 287,283 | 236,796 | 240,891 | (34,310 | ) | 39,558 | ||||||||||||||||||||
| Savings | 712 | 616 | 674 | 527 | 436 | 96 | 276 | |||||||||||||||||||||
| Money market | 798,017 | 697,578 | 645,034 | 697,092 | 713,118 | 100,439 | 84,899 | |||||||||||||||||||||
| Time | 10,117 | 10,406 | 9,855 | 9,800 | 10,643 | (289 | ) | (526 | ) | |||||||||||||||||||
| Brokered | 93,558 | 67,937 | 100,425 | 117,787 | 128,594 | 25,621 | (35,036 | ) | ||||||||||||||||||||
| Total deposits – continuing operations | 1,780,092 | 1,652,651 | 1,532,993 | 1,564,831 | 1,602,983 | 127,441 | 177,109 | |||||||||||||||||||||
| Deposits to be assumed – discontinued operations | 600,769 | 601,421 | 602,832 | 589,054 | 591,866 | (652 | ) | 8,903 | ||||||||||||||||||||
| Total deposits | $ | 2,380,861 | $ | 2,254,072 | $ | 2,135,825 | $ | 2,153,885 | $ | 2,194,849 | $ | 126,789 | $ | 186,012 | ||||||||||||||
| Payments clients | $ | 263,800 | $ | 227,029 | $ | 219,016 | $ | 256,794 | $ | 234,558 | $ | 36,771 | $ | 29,242 | ||||||||||||||
| Noninterest bearing deposits as a percentage of average deposits – continuing operations |
33.6 | % | 34.0 | % | 31.9 | % | 32.1 | % | 31.8 | % | ||||||||||||||||||
| Cost of deposits – continuing operations | 0.93 | % | 0.76 | % | 0.71 | % | 0.63 | % | 0.56 | % | ||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | ||||||||||||||||||||
| Discontinued Operations Information | ||||||||||||||||||||
| Q4 2018 | ||||||||||||||||||||
| (in thousands, except per share data) | Actual Results (GAAP) |
Discontinued Operations Adjustments(1) |
Loss on Sale of Securities |
DTA Adjustment(2) |
Adjusted Results (Non-GAAP) |
|||||||||||||||
| Net interest income | $ | 21,068 | $ | — | $ | — | $ | — | $ | 21,068 | ||||||||||
| Provision for loan losses | 502 | — | — | — | 502 | |||||||||||||||
| Net interest income after provision for loan losses | 20,566 | — | — | — | 20,566 | |||||||||||||||
| Noninterest income | 164 | — | 1,853 | — | 2,017 | |||||||||||||||
| Noninterest expense | 12,208 | — | — | — | 12,208 | |||||||||||||||
| Income from continuing operations before income tax | 8,522 | — | 1,853 | — | 10,375 | |||||||||||||||
| Provision for income taxes | 1,039 | — | 463 | 996 | 2,498 | |||||||||||||||
| Net income from continuing operations | 7,483 | — | 1,390 | (996 | ) | 7,877 | ||||||||||||||
| Income (loss) from discontinued operations | 1,347 | (1,704 | ) | — | — | (357 | ) | |||||||||||||
| Net income | $ | 8,830 | $ | (1,704 | ) | $ | 1,390 | $ | (996 | ) | $ | 7,520 | ||||||||
| Diluted earnings per share – continuing operations | $ | 0.29 | $ | 0.30 | ||||||||||||||||
| Diluted earnings per share | 0.34 | 0.29 | ||||||||||||||||||
| (1)Includes negative provision for loan losses and divestiture expenses, net of tax. | ||||||||||||||||||||
| (2)Represents a $4.5 million favorable reduction of the valuation allowance on deferred tax assets related to Section 382 limitation offset by an unfavorable increase of $3.5 million in the valuation allowance related to deferred taxes on state net operating loss utilization. | ||||||||||||||||||||
| ATLANTIC CAPITAL BANCSHARES, INC. | |||||||||||||||||||||||||||||
| Non-GAAP Performance and Financial Measures Reconciliation | |||||||||||||||||||||||||||||
| 2018 | 2017 | For the year ended December 31, |
|||||||||||||||||||||||||||
| (in thousands, except share and per share data) | Fourth Quarter |
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
2018 | 2017 | ||||||||||||||||||||||
| Taxable equivalent interest income reconciliation | |||||||||||||||||||||||||||||
| Interest income – GAAP | $ | 26,628 | $ | 24,017 | $ | 22,836 | $ | 21,279 | $ | 20,170 | $ | 94,760 | $ | 75,818 | |||||||||||||||
| Taxable equivalent adjustment | 97 | 97 | 98 | 103 | 213 | 395 | 906 | ||||||||||||||||||||||
| Interest income – taxable equivalent | $ | 26,725 | $ | 24,114 | $ | 22,934 | $ | 21,382 | $ | 20,383 | $ | 95,155 | $ | 76,724 | |||||||||||||||
| Taxable equivalent net interest income reconciliation | |||||||||||||||||||||||||||||
| Net interest income – GAAP | $ | 21,068 | $ | 19,297 | $ | 18,444 | $ | 17,438 | $ | 16,716 | $ | 76,247 | $ | 62,832 | |||||||||||||||
| Taxable equivalent adjustment | 97 | 97 | 98 | 103 | 213 | 395 | 906 | ||||||||||||||||||||||
| Net interest income – taxable equivalent | $ | 21,165 | $ | 19,394 | $ | 18,542 | $ | 17,541 | $ | 16,929 | $ | 76,642 | $ | 63,738 | |||||||||||||||
| Taxable equivalent net interest margin reconciliation | |||||||||||||||||||||||||||||
| Net interest margin – GAAP | 3.60 | % | 3.45 | % | 3.52 | % | 3.49 | % | 3.35 | % | 3.52 | % | 3.24 | % | |||||||||||||||
| Impact of taxable equivalent adjustment | 0.02 | 0.02 | 0.02 | 0.02 | 0.04 | 0.01 | 0.04 | ||||||||||||||||||||||
| Net interest margin – taxable equivalent | 3.62 | % | 3.47 | % | 3.54 | % | 3.51 | % | 3.39 | % | 3.53 | % | 3.28 | % | |||||||||||||||
| Income before income taxes reconciliation | |||||||||||||||||||||||||||||
| Income before income taxes – GAAP | $ | 8,522 | $ | 8,835 | $ | 10,460 | $ | 6,540 | $ | 3,849 | $ | 34,357 | $ | 18,959 | |||||||||||||||
| Taxable equivalent adjustment | 97 | 97 | 98 | 103 | 213 | 395 | 906 | ||||||||||||||||||||||
| Income before income taxes | $ | 8,619 | $ | 8,932 | $ | 10,558 | $ | 6,643 | $ | 4,062 | $ | 34,752 | $ | 19,865 | |||||||||||||||
| Income tax reconciliation | |||||||||||||||||||||||||||||
| Income tax expense – GAAP | $ | 1,039 | $ | 1,837 | $ | 2,082 | $ | 1,349 | $ | 19,157 | $ | 6,307 | $ | 23,715 | |||||||||||||||
| Taxable equivalent adjustment | 97 | 97 | 98 | 103 | 213 | 395 | 906 | ||||||||||||||||||||||
| Income tax expense | $ | 1,136 | $ | 1,934 | $ | 2,180 | $ | 1,452 | $ | 19,370 | $ | 6,702 | $ | 24,621 | |||||||||||||||
| Tangible book value per common share reconciliation | |||||||||||||||||||||||||||||
| Total shareholders’ equity | $ | 323,653 | $ | 320,237 | $ | 316,770 | $ | 307,059 | $ | 308,425 | $ | 323,653 | $ | 308,425 | |||||||||||||||
| Intangible assets | (23,095 | ) | (23,367 | ) | (23,662 | ) | (24,050 | ) | (24,393 | ) | (23,095 | ) | (24,393 | ) | |||||||||||||||
| Total tangible common equity | $ | 300,558 | $ | 296,870 | $ | 293,108 | $ | 283,009 | $ | 284,032 | $ | 300,558 | $ | 284,032 | |||||||||||||||
| Common shares outstanding | 25,290,419 | 26,103,666 | 26,102,217 | 25,772,208 | 25,712,909 | 25,290,419 | 25,712,909 | ||||||||||||||||||||||
| Book value per common share – GAAP | $ | 12.80 | $ | 12.27 | $ | 12.14 | $ | 11.91 | $ | 11.99 | $ | 12.80 | $ | 11.99 | |||||||||||||||
| Tangible book value | 11.88 | 11.37 | 11.23 | 10.98 | 11.05 | 11.88 | 11.05 | ||||||||||||||||||||||
| Tangible common equity to tangible assets reconciliation | |||||||||||||||||||||||||||||
| Total shareholders’ equity | $ | 323,653 | $ | 320,237 | $ | 316,770 | $ | 307,059 | $ | 308,425 | $ | 323,653 | $ | 308,425 | |||||||||||||||
| Intangible assets | (23,095 | ) | (23,367 | ) | (23,662 | ) | (24,050 | ) | (24,393 | ) | (23,095 | ) | (24,393 | ) | |||||||||||||||
| Total tangible common equity | $ | 300,558 | $ | 296,870 | $ | 293,108 | $ | 283,009 | $ | 284,032 | $ | 300,558 | $ | 284,032 | |||||||||||||||
| Total assets | $ | 2,955,440 | $ | 2,882,721 | $ | 2,690,674 | $ | 2,718,665 | $ | 2,891,421 | $ | 2,955,440 | $ | 2,891,421 | |||||||||||||||
| Intangible assets | (23,095 | ) | (23,367 | ) | (23,662 | ) | (24,050 | ) | (24,393 | ) | (23,095 | ) | (24,393 | ) | |||||||||||||||
| Total tangible assets | $ | 2,932,345 | $ | 2,859,354 | $ | 2,667,012 | $ | 2,694,615 | $ | 2,867,028 | $ | 2,932,345 | $ | 2,867,028 | |||||||||||||||
| Tangible common equity to tangible assets | 10.25 | % | 10.38 | % | 10.99 | % | 10.50 | % | 9.91 | % | 10.25 | % | 9.91 | % | |||||||||||||||