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| 8-K - 8-K - Atlantic Capital Bancshares, Inc. | acb-form8xkinvestorpresent.htm |
Atlantic Capital Bancshares, Inc. (ACBI)
August 1, 2017
Forward-Looking Statements
This presentation 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 reflect our current views with respect to, among
other things, future events and our financial performance. These statements are often, but not always, made through the use of words or
phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,”
“estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable of a future or
forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and
projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are
inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future
performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations
reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the
results expressed or implied by the forward-looking statements.
The following risks, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in
the forward-looking statements: (1) the expected growth opportunities and cost savings from the transaction with First Security Group, Inc.
(“First Security”) may not be fully realized or may take longer to realize than expected; (2) loss of income from our TriNet division following our
exit of this business; (3) changes in asset quality and credit risk; (4) the cost and availability of capital; (5) customer acceptance of our products
and services; (6) customer borrowing, repayment, investment and deposit practices; (7) the introduction, withdrawal, success and timing of
business initiatives; (8) the impact, extent, and timing of technological changes; (9) severe catastrophic events in our geographic area; (10) a
weakening of the economies in which we conduct operations may adversely affect our operating results; (11) the U.S. legal and regulatory
framework, including those associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act could adversely affect the
operating results of the combined company; (12) the interest rate environment may compress margins and adversely affect net interest income;
(13) changes in trade, monetary and fiscal policies of various governmental bodies and central banks could affect the economic environment in
which we operate; (14) our ability to determine accurate values of certain assets and liabilities; (15) adverse developments in securities, public
debt, and capital markets, including changes in market liquidity and volatility; (16) our ability to anticipate interest rate changes correctly and
manage interest rate risk presented through unanticipated changes in our interest rate risk position and/or short- and long-term interest rates;
(17) unanticipated changes in our liquidity position, including but not limited to our ability to enter the financial markets to manage and respond
to any changes to our liquidity position; (18) adequacy of our risk management program; (19) increased costs associated with operating as a
public company; (20) increased competitive pressure due to consolidation in the financial industry or competition from other financial services
companies in our markets could adversely affect operations; and (21) other factors described in Atlantic Capital’s reports filed with the Securities
and Exchange Commission and available on the SEC’s website (www.sec.gov).
2
Non-GAAP Financial Information
Statements included in this presentation include non-GAAP financial measures and should be read long 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 income and operating net income; (ii) operating non-interest expense; (iii) taxable equivalent net interest
income; (iv) efficiency ratio; (v) operating return on average assets; (vi) operating return on average equity; (vii) tangible common equity; (viii)
tangible book value per share; (ix) deposits excluding deposits assumed in branch sales; and (x) loans held for investment excluding mortgage
warehouse loans, in its analysis of the Company's performance.
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.
3
• Established in May 2007 with $125 million in equity capital, which was the largest de novo bank capital raise in
US history
• Publicly traded on NASDAQ since November 2nd, 2015 under the symbol “ACBI”
• Exceptional record of soundness and growth through financial crisis, recession and recent recovery
• Differentiated by providing superior expertise, competitive capabilities, and customized service delivery
4
Atlantic Capital Bank: Our Story
Atlantic Capital Bank: Highlights
Target Markets:
• Small to mid-sized enterprises with revenues up to $250 million
• Highly-select group of institutional caliber commercial real estate developers and investors
• Principals of our commercial clients, professionals, and their practices
• Has grown to $2.7 billion in assets
• Initiatives in place expected to maintain robust top line growth
• Operating model expected to produce enhanced efficiencies
• Consistently maintaining high asset quality
• Focused on Atlanta, Charlotte, Chattanooga, and Knoxville metropolitan markets
• Strong leadership continuity in key markets
• Broad management experience in all business lines
5
6
Key Investment Considerations
Attractive Growth Markets
Strong Deposit Growth
Asset Sensitivity
Loan Growth with Superior Credit Quality
Building a profitable
and sound future
Proprietary & Confidential
Atlantic Capital Strategy
Become a premier
southeastern business and
private banking company
7
Accelerate Organic Growth
• Investing in people and capabilities to accelerate organic growth and build profitability
• Well positioned in attractive growth markets
• Attractive interest rate risk position
Strategic Expansion
• Completed acquisition of First Security on October 31, 2015
• Ongoing evaluation of new market expansion through
acquisitions and loan production offices
• Patient and disciplined approach with focus on shareholder value
Atlantic Capital Bank Locations
8
Branch Location
Loan Production Office
Main Office Location
Legend
9
Financial Highlights
Financial
Performance
Balance Sheet
Capital
Asset Quality
Diluted EPS $ 0.17 $ 0.13
Efficiency ratio (1) 68.37 % 76.78 %
Return on average assets 0.63 0.48
Net interest margin (tax equivalent) (1) 3.26 3.20
Total assets(2) $ 2,703 $ 2,802
Commercial loans held for investment (2)(4) 1,687 1,616
Average deposits (2) 2,159 2,112
Tier 1 capital ratio 10.7 % 10.7 %
Total risk-based capital ratio 13.6 13.8
Tangible common equity to tangible assets 10.99 10.27
Net charge offs to average loans (3) 0.01 % 0.26 %
NPAs to total assets 0.52 0.21
Allowance for loan and lease losses to loans held for
investment
1.11 1.05
(1) This is a non-GAAP financial measure. Please see “Non-GAAP Reconciliation” on slides 25 and 26 for more details. (2) Dollars in millions
(3) Annualized (4) Excluding mortgage warehouse loans
METRICS Q2 ‘17 Q1 ‘17
$0
$500
$1,000
$1,500
$2,000
$2,500
FY 2013 FY 2014 FY 2015 FY 2016 YTD 2017
10
Financial Highlights: Average Deposits
Dollars in millions
DDA
NOW /
Savings /
Money
Market
Time
Brokered
21% 26%
27%
26%
29%
69% 62%
57%
55% 55%
2%
8%
1%
11%
11%
5%
9%
10%
7%
9%
$935 $984
$1,297
$2,147 $2,135
Sold 7 branches
– $191 million –
in Q2
Sold 1 branch
– $29 million –
in Q2
FSG acquisition
closed
in Q4
Financial Highlights:
11
Dollars in millions
Commercial loans include commercial and industrial, commercial real estate, construction and land.
Other loans include residential, consumer, other loans, net deferred fees and other unearned income.
Loans Held For Investment
$0
$500
$1,000
$1,500
$2,000
Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Jun. 30, 2017
$785
$887
$1,480
$1,609
$1,687
$24
$36
$227
$225
$227
$8
$117
$84
$147 $48
Commercial
Other
Mortgage
Warehouse
FSG acquisition
closed
in Q4
Financial Highlights: Credit Quality
12
Net Charge Offs/Total Average Loans* Allowance for Loan Losses/Total Loans
*Annualized
Source: SNL
Allowance for Loan Losses/
Non-Performing Assets
ACB Commercial banks $1-3 billion
Non-Performing Assets excluding
Restructured Loans/Total Assets
0.36%
0.12%
0.40%
0.13%
0.21%
0.52%
1.33%
0.97%
0.77%
0.69% 0.67%
2013 2014 2015 2016 Q1 2017 Q2 2017
241%
746%
180%
591%
341%
155%
111% 132% 137% 144% 156%
2013 2014 2015 2016 Q1 2017 Q2 2017
0.02%
(0.01%)
0.05%
0.11%
0.14%
0.33%
0.21%
0.16%
0.20%
0.18%
2013 2014 2015 2016 YTD 2017
1.32%
1.10% 1.06% 1.04% 1.05% 1.11%
1.63%
1.43%
1.33% 1.28% 1.27%
2013 2014 2015 2016 Q1 2017 Q2 2017
13
Financial Highlights:
$28,922
$33,093
$44,107
$77,192
$19,508
$20,712
2.75%
2.85%
2.99%
3.12%
3.20%
3.26%
2.91%
2.98%
3.07%
3.15%
2.70%
2.80%
2.90%
3.00%
3.10%
3.20%
3.30%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
FY 2013 FY 2014 FY 2015 FY 2016 Q1 2017 Q2 2017
Net interest income* Net interest margin* Net interest margin (excl purchase accounting)*
Dollars in thousands
*Net interest income and net interest margin are taxable equivalent and are non-GAAP financial measures. Net interest income is used in calculating
net interest margin. Please see “Non-GAAP Reconciliation” on slides 25 and 26 for more details.
Net Interest Margin*
Financial Highlights: Asset Sensitivity
Change in Net Interest Income
14
0%
5%
10%
15%
20%
25%
Up 100 bps Up 200 bps Up 300 bps
7.2%
13.9%
20.4%
1 Year
As of June 30, 2017:
65% of loans are variable rate
29% of deposits are noninterest bearing
APPENDIX
Management Biographies
16
Douglas Williams
Chief Executive Officer
• CEO of Atlantic Capital since its inception
• Former Managing Director and Head of Wachovia Corporation’s International Corporate Finance Group
• Held numerous roles within Wachovia, including EVP and Head of the Global Corporate Banking Division; CRO for all corporate, institutional, and wholesale
banking activities; EVP and Co-Head of Wachovia’s Capital Markets Division and EVP and Head of Wachovia’s US Corporate Banking Division
• Chairman of the Community Depository Institutions Advisory Council (CDIAC) of the Federal Reserve Bank of Atlanta and its representative to the CDIAC of the
Federal Reserve Board of Governors
• Serves on the Boards of the Metro Atlanta Chamber of Commerce, the Georgia Chamber of Commerce, and the YMCA of Metropolitan Atlanta and the High
Museum of Art and is a Member of the Buckhead Coalition
Michael Kramer
President, Chief Operating Officer
• CEO and President of First Security and CEO of FSGBank from 2011 to 2015
• Former Managing Director of Ridley Capital Group
• Former Director, CEO and President of Ohio Legacy Corporation
• Former COO and CTO of Integra Bank Corporation
• Serves on the Boards of Chattanooga Chamber of Commerce, Chattanooga United Way, The Tennessee Bankers Association and the Chattanooga Young Life
Committee
Patrick Oakes
Executive Vice President,
Chief Financial Officer
• Former CFO of Square 1 Financial, Inc.
• Former EVP and CFO of Encore Bancshares, Inc.
• Former SVP and Treasurer for Sterling Bancshares, Inc.
• Chartered Financial Analyst
Rich Oglesby
Executive Vice President,
Chief Risk Officer
• CRO of Atlantic Capital since its inception
• Former Chief Credit Officer for Wachovia’s Capital Finance business
• Former Head of Risk Management for all of Wachovia’s Capital Markets business
• Serves on the Board of Trustees at Children’s Literature for Children
A leading middle market commercial bank operating throughout the southeast
Attractive Market Demographics
1 in thousands
Source: US MSA Census Information + market data from Data.com (Salesforce). 17
City
MSA
Population1
Projected
population growth
for the
next 3 years
# Target
Companies
(>$10MM REV)
# Total
businesses
(>$5MM REV)
# Total
businesses
Median
Household
Income
Atlanta 5,614 6.2% 4,271 8,600 1,261,291 $51,948
Chattanooga 544 3.0% 351 695 88,967 $37,411
Charlotte 2,380 7.4% 1,583 3,028 314,130 $46,119
Knoxville 857 2.4% 535 1,023 112,095 $36,874
Diversified Loan Mix
Dollars in thousands
Loans Held For Investment
at June 30, 2017
18
Loan Growth by Type
June 30,
2017
March 31,
2017 Change
Loans held for investment
Commercial loans:
Commercial and industrial 578,888$ 544,911$ 33,977$
Commercial real estate:
Multifamily 113,571 108,215 5,356
Owner occupied 351,733 348,888 2,845
Investment 517,571 478,485 39,086
Construction and land:
1-4 family residential
construction 11,711 11,799 (88)
Other construction,
development and land 113,347 123,838 (10,491)
Mortgage warehouse loans 47,992 58,357 (10,365)
Total commercial loans 1,734,813 1,674,493 60,320
Residential:
Residential mortgages 101,798 99,665 2,133
Home equity 79,769 81,438 (1,669)
Total residential loans 181,567 181,103 464
Consumer 31,981 32,525 (544)
Other 18,013 17,611 402
1,966,374 1,905,732 60,642
(4,283) (4,008) (275)
Total loans held for investment 1,962,091$ 1,901,724$ 60,367$
Less net deferred fees and other
unearned income
C&I Owner Occupied
CRE Construction and land
Mortgage Warehouse Residential mortgages
Home equity Consumer & Other
32%
18%
6%
3%
5%
4%
30%
2%
19
Financial Highlights: Regulatory Capital at 6/30/17
0%
2%
4%
6%
8%
10%
12%
14%
10.7%
12.4% 12.4%
13.4%
9.6%
10.7% 10.7%
13.6%
Bank BankHolding
Company
Bank BankHolding
Company
Holding
Company
Holding
Company
Tier 1 leverage ratio Common equity tier 1 capital ratio Tier 1 capital ratio Total capital ratio
20
Financial Highlights: Noninterest Income
Dollars in thousands
Service
charges
Other
noninterest
income
Mortgage
income
SBA lending
activities
Trust income
$0
$2,000
$4,000
$6,000
$8,000
$10,000
Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
$1,392 $1,270 $1,327 $1,349 $1,274
$1,204
$959 $599
$1,227 $1,171
$386
$361
$350
$407 $488
$447
$632
$499
$257 $388
$5,451
$780 $1,655 $617
$1,966
$4,995
$3,857$4,002
$8,880
$4,430
$5,287
$3,885 gain on
sale of branches
$302 gain on
sale of branch
21
$0
$5,000
$10,000
$15,000
$20,000
Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
$10,420 $10,059
$11,269 $11,065 $10,603
$1,274
$1,235
$995 $1,230
$1,074
$760
$442
$968 $904
$973
$694
$617
$1,064 $987
$1,069
$4,280
$4,364
$4,275
$3,558 $3,904
$17,623
Financial Highlights: Operating Noninterest Expense*
$17,428
$16,717
$18,571
Dollars in thousands.
*This is a non-GAAP financial measure. Please see “Non-GAAP Reconciliation” on slides 25 and 26 for more details.
Salaries and
employee
benefits
Occupancy
Professional
services
Data processing
Other
noninterest
expense
$17,744
22
ACBI Historical Balance Sheets
June 30, March 31, December 31, June 30,
(in thousands, except share data) 2017 2017 2016 2016
ASSETS
Cash and due from banks $ 45,008 $ 34,626 $ 36,790 $ 40,309
Interest-bearing deposits in banks 36,171 158,920 118,039 239,387
Other short-term investments 17,459 20,870 10,896 20,548
Cash and cash equivalents 98,638 214,416 165,725 300,244
Securities available-for-sale 450,273 456,942 347,705 328,370
Other investments 26,741 28,331 23,806 22,575
Loans held for sale 1,744 29,241 35,219 29,061
Loans held for investment 1,962,091 1,901,724 1,981,330 1,942,137
Less: allowance for loan losses (21,870) (19,939) (20,595) (18,377)
Loans held for investment, net 1,940,221 1,881,785 1,960,735 1,923,760
Branch premises held for sale – 2,897 2,995 –
Premises and equipment, net 11,997 12,308 11,958 21,770
Bank owned life insurance 62,901 62,516 62,160 61,378
Goodwill and intangible assets, net 28,446 29,186 29,567 31,674
Other real estate owned 1,819 1,869 1,872 951
Other assets 79,795 82,587 85,801 88,039
Total assets $ 2,702,575 $ 2,802,078 $ 2,727,543 $ 2,807,822
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 612,744 $ 606,386 $ 643,471 $ 592,043
Interest-bearing checking 250,254 259,760 264,062 231,091
Savings 30,170 30,756 27,932 30,839
Money market 882,824 916,390 912,493 913,094
Time 142,915 150,867 157,810 178,615
Brokered deposits 195,047 209,385 200,223 212,623
Deposits to be assumed in branch sale – 29,495 31,589 –
Total deposits 2,113,954 2,203,039 2,237,580 2,158,305
Federal funds purchased and securities sold under agreements to repurchase 15,000 – – 14,047
Federal Home Loan Bank borrowings 180,000 217,000 110,000 240,000
Long-term debt 49,451 49,408 49,366 49,281
Other liabilities 24,735 21,664 26,939 42,123
Total liabilities 2,383,140 2,491,111 2,423,885 2,503,756
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding
as of June 30, 2017, March 31, 2017, December 31, 2016, and June 30, 2016 – – – –
Common stock, no par value; 100,000,000 shares authorized;
25,654,521, 25,535,013, 25,093,135, and 24,750,163 shares issued and outstanding as of
June 30, 2017, March 31, 2017, December 31, 2016, and June 30, 2016, respectively 297,610 296,608 292,747 289,353
Retained earnings 24,095 19,766 16,536 11,219
Accumulated other comprehensive income (loss) (2,270) (5,407) (5,625) 3,494
Total shareholders’ equity 319,435 310,967 303,658 304,066
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,702,575 $ 2,802,078 $ 2,727,543 $ 2,807,822
Atlantic Capital Bancshares, Inc.
Consolidated Balance Sheets (unaudited)
23
ACBI Historical Income Statements
Atlantic Capital Bancshares, Inc.
Consolidated Statements of Income (unaudited)
(in thousands except share and per share data)
June 30,
2017
March 31,
2017
December
31, 2016
September
30, 2016
June 30,
2016
June 30,
2017
June 30,
2016
INTEREST INCOME
Loans, including fees $ 21,361 $ 19,994 $ 20,363 $ 20,511 $ 20,282 $ 41,355 $ 39,907
Investment securities - available-for-sale 2,355 2,018 1,477 1,293 1,327 4,373 2,928
Interest and dividends on other interest‑earning assets 606 449 467 491 507 1,055 780
Total interest income 24,322 22,461 22,307 22,295 22,116 46,783 43,615
INTEREST EXPENSE
Interest on deposits 2,481 2,047 1,929 1,956 1,841 4,528 3,514
Interest on Federal Home Loan Bank advances 452 302 234 133 147 754 191
Interest on federal funds purchased and securities sold under
agreements to repurchase 76 36 38 37 87 112 154
Interest on long-term debt 824 823 828 815 832 1,647 1,642
Other – – – – – – 38
Total interest expense 3,833 3,208 3,029 2,941 2,907 7,041 5,539
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 20,489 19,253 19,278 19,354 19,209 39,742 38,076
Provision for loan losses 1,980 634 2,208 463 777 2,614 1,145
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 18,509 18,619 17,070 18,891 18,432 37,128 36,931
NONINTEREST INCOME
Service charges 1,274 1,349 1,327 1,270 1,392 2,623 2,890
Gains on sale of securities available-for-sale – – – – 11 – 44
Gains on sale of other assets 666 78 238 71 31 744 79
Mortgage income 388 257 499 632 447 645 786
Trust income 488 407 350 361 386 895 700
Derivatives income 116 (51) 346 69 98 65 163
Bank owned life insurance 384 378 395 424 398 762 791
SBA lending activities 1,171 1,227 599 959 1,204 2,398 2,084
TriNet lending activities 20 20 357 – 761 40 1,144
Gains on sale of branches 302 – – – 3,885 302 3,885
Other noninterest income 478 192 319 216 267 670 734
Total noninterest income 5,287 3,857 4,430 4,002 8,880 9,144 13,300
NONINTEREST EXPENSE
Salaries and employee benefits 10,603 11,065 11,269 10,059 10,420 21,668 20,975
Occupancy 1,074 1,230 995 1,235 1,274 2,304 2,374
Equipment and software 996 805 694 862 724 1,801 1,410
Professional services 973 904 968 442 760 1,877 1,508
Postage, printing and supplies 78 85 73 61 159 163 328
Communications and data processing 1,069 987 1,064 617 694 2,056 1,610
Marketing and business development 179 270 247 269 317 449 584
FDIC premiums 132 314 262 415 493 446 891
Merger and conversion costs 304 – 204 579 1,210 304 1,959
Amortization of intangibles 425 470 495 520 668 895 1,430
Foreclosed property/problem asset expense 107 3 666 39 55 110 159
Other noninterest expense 1,683 1,611 1,838 2,198 2,169 3,294 3,981
Total noninterest expense 17,623 17,744 18,775 17,296 18,943 35,367 37,209
INCOME BEFORE PROVISION FOR INCOME TAXES 6,173 4,732 2,725 5,597 8,369 10,905 13,022
Provision for income taxes 1,844 1,502 1,116 1,889 3,222 3,346 4,944
NET INCOME $ 4,329 $ 3,230 $ 1,609 $ 3,708 $ 5,147 $ 7,559 $ 8,078
Net income per common share ‑ basic $ 0.17 $ 0.13 $ 0.06 $ 0.15 $ 0.21 $ 0.30 $ 0.33
Net income per common share ‑ diluted $ 0.17 $ 0.13 $ 0.06 $ 0.15 $ 0.20 $ 0.29 $ 0.32
Weighted average shares - basic 25,621,910 25,320,690 25,027,304 24,891,822 24,644,755 25,472,132 24,565,328
Weighted average shares - diluted 25,831,281 25,672,286 25,407,728 25,260,280 25,158,694 25,753,633 25,082,968
Six months endedThree months ended
24
ACBI Operating Income
(1) Interest income has been increased to reflect comparable interest on taxable securities. The rate used was 35%, reflecting the statutory
federal income tax rate. (2) Excludes gain on sale of branches. (3) Excludes merger related and divestiture expenses. These are non-GAAP
financial measures. Please see “Non-GAAP Reconciliation” on slides 25 and 26 for more details.
ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
(in thousands, except share and per share
data; taxable equivalent)
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
INCOME SUMMARY
Interest income (1) 24,545$ 22,716$ 22,530$ 22,428$ 22,190$
Interest expense 3,833 3,208 3,029 2,941 2,907
Net interest income 20,712 19,508 19,501 19,487 19,283
Provision for loan losses 1,980 634 2,208 463 777
Net interest income after provision for loan losses 18,732 18,874 17,293 19,024 18,506
Operating noninterest income (2) 5,287 3,857 4,430 4,002 4,995
Operating noninterest expense (3) 17,623 17,744 18,571 16,717 17,428
Operating income before income taxes 6,396 4,987 3,152 6,309 6,073
Operating income tax expense 2,067 1,757 1,417 2,245 2,381
Operating net income (2)(3) 4,329 3,230 1,735 4,064 3,692
Merger related expenses, net of income tax - - 126 356 743
Net gain on sale of branches, net of income tax - - - - 2,198
Net income - GAAP 4,329$ 3,230$ 1,609$ 3,708$ 5,147$
20162017
Non-GAAP Reconciliation
25
ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
(in thousands, except share and per share data)
Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2017 2016
Taxable equivalent interest income reconciliation
Interest income - GAAP $ 24,322 $ 22,461 $ 22,307 $ 22,295 $ 22,116 $ 46,783 $ 43,615
Taxable equivalent adjustment 223 255 223 133 74 478 128
Interest income - taxable equivalent $ 24,545 $ 22,716 $ 22,530 $ 22,428 $ 22,190 $ 47,261 $ 43,743
Taxable equivalent net interest income reconciliation
Net interest income - GAAP $ 20,489 $ 19,253 $ 19,278 $ 19,354 $ 19,209 $ 39,742 $ 38,076
Taxable equivalent adjustment 223 255 223 133 74 478 128
Net interest income - taxable equivalent $ 20,712 $ 19,508 $ 19,501 $ 19,487 $ 19,283 $ 40,220 $ 38,204
Operating noninterest income reconciliation
Noninterest income - GAAP $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 8,880 $ 9,144 $ 13,300
Gain on sale of branches - - - - (3,885) - (3,885)
Operating noninterest income $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 4,995 $ 9,144 $ 9,415
Operating noninterest expense reconciliation
Noninterest expense - GAAP $ 17,623 $ 17,744 $ 18,775 $ 17,296 $ 18,943 $ 35,367 $ 37,209
Merger-related expenses - - (204) (579) (1,210) - (1,959)
Divestiture expenses - - - - (305) - (305)
Operating noninterest expense $ 17,623 $ 17,744 $ 18,571 $ 16,717 $ 17,428 $ 35,367 $ 34,945
Operating income before income taxes reconciliation
Income before income taxes - GAAP $ 6,173 $ 4,732 $ 2,725 $ 5,597 $ 8,369 $ 10,905 $ 13,022
Taxable equivalent adjustment 223 255 223 133 74 478 128
Merger-related expenses - - 204 579 1,210 - 1,959
Divestiture expenses - - - - 305 - 305
Gain on sale of branches - - - - (3,885) - (3,885)
Operating income before income taxes $ 6,396 $ 4,987 $ 3,152 $ 6,309 $ 6,073 $ 11,383 $ 11,529
Operating income tax reconciliation
Income tax expense - GAAP $ 1,844 $ 1,502 $ 1,116 $ 1,889 $ 3,222 $ 3,346 $ 4,944
Taxable equivalent adjustment 223 255 223 133 74 478 128
Merger related expenses, tax benefit - - 78 223 467 - 756
Divestiture expenses, tax benefit - - - - 118 - 118
Gain on sale of branches, tax expense - - - - (1,500) - (1,500)
Operating income tax expense $ 2,067 $ 1,757 $ 1,417 $ 2,245 $ 2,381 $ 3,824 $ 4,446
Operating net income reconciliation
Net income - GAAP $ 4,329 $ 3,230 $ 1,609 $ 3,708 $ 5,147 $ 7,559 $ 8,078
Merger related expenses, net of income tax - - 126 356 743 - 1,203
Divestiture expenses, net of income tax - - - - 187 - 187
Gain on sale of branches, net of income tax - - - - (2,385) - (2,385)
Operating net income $ 4,329 $ 3,230 $ 1,735 $ 4,064 $ 3,692 $ 7,559 $ 7,083
Operating diluted earnings per share reconciliation
Diluted earnings per share - GAAP $ 0.17 $ 0.13 $ 0.06 $ 0.15 $ 0.20 $ 0.29 $ 0.32
Merger related expenses - - 0.01 0.01 0.03 - 0.06
Net gain on sale of branches - - - - (0.08) - (0.10)
Diluted earnings per share - operating $ 0.17 $ 0.13 $ 0.07 $ 0.16 $ 0.15 $ 0.29 $ 0.28
Tangible book value per common share reconciliation
Total shareholders’ equity $ 319,435 $ 310,967 $ 303,658 $ 308,463 $ 304,066 $ 319,435 304,066$
Intangible assets (25,151) (25,913) (26,383) (26,878) (28,085) (25,151) (28,085)
Total tangible common equity $ 294,284 $ 285,054 $ 277,275 $ 281,585 $ 275,981 $ 294,284 $ 275,981
Common shares outstanding 25,654,521 25,535,013 25,093,135 24,950,099 24,750,163 25,654,521 24,750,163
Book value per common share - GAAP $ 12.45 $ 12.18 $ 12.10 $ 12.36 $ 12.29 12.45 12.29
Tangible book value 11.47 11.16 11.05 11.29 11.15 11.47 11.15
For the six months ended
June 30,
20162017
Non-GAAP Reconciliation (continued)
26
ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
(in thousands, except share and per share data)
Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2017 2016
Operating return on average equity reconciliation
Net income - GAAP $ 4,329 $ 3,230 $ 1,609 $ 3,708 $ 5,147 $ 7,559 $ 8,078
Merger related expenses, net of income tax - - 126 356 743 - 1,203
Divestiture expenses, net of income tax - - - - 187 - 187
Gain on sale of branches, net of income tax - - - - (2,385) - (2,385)
Operating net income $ 4,329 $ 3,230 $ 1,735 $ 4,064 $ 3,692 $ 7,559 $ 7,083
Average shareholders' equity 316,825 308,261 308,588 306,642 299,170 312,567 295,488
Return on average equity - GAAP 5.48% 4.19% 2.09% 4.84% 6.88% 4.88% 5.47%
Return on average equity - operating 5.48% 4.19% 2.25% 5.30% 4.94% 4.88% 4.79%
Operating return on average assets reconciliation
Net income - GAAP $ 4,329 $ 3,230 $ 1,609 $ 3,708 $ 5,147 $ 7,559 $ 8,078
Merger related expenses, net of income tax - - 126 356 743 - 1,203
Divestiture expenses, net of income tax - - - - 187 - 187
Gain on sale of branches, net of income tax - - - - (2,385) - (2,385)
Operating net income $ 4,329 $ 3,230 $ 1,735 $ 4,064 $ 3,692 $ 7,559 $ 7,083
Average assets 2,762,389 2,694,715 2,722,444 2,717,996 2,718,110 2,728,739 2,669,430
Return on average assets - GAAP 0.63% 0.48% 0.24% 0.55% 0.76% 0.56% 0.61%
Return on average assets - operating 0.63% 0.48% 0.25% 0.60% 0.54% 0.56% 0.53%
Efficiency ratio reconciliation
Noninterest income - GAAP $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 8,880 $ 9,144 $ 13,300
Gain on sale of branches - - - - (3,885) - (3,885)
Operating noninterest income $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 4,995 $ 9,144 $ 9,415
Noninterest expense - GAAP $ 17,623 $ 17,744 $ 18,775 $ 17,296 $ 18,943 $ 35,367 $ 37,209
Merger-related expenses - - (204) (579) (1,210) - (1,959)
Divestiture expenses - - - - (305) - (305)
Operating noninterest expense $ 17,623 $ 17,744 $ 18,571 $ 16,717 $ 17,428 $ 35,367 $ 34,945
Net interest income 20,489 19,253 19,278 19,354 19,209 39,742 38,075
Efficiency ratio 68.37% 76.78% 78.33% 71.57% 72.00% 72.35% 73.58%
Tangible common equity to tangible assets reconciliation
Total shareholders’ equity $ 319,435 $ 310,967 $ 303,658 $ 308,463 $ 304,066 $ 319,435 $ 304,066
Intangible assets (25,151) (25,913) (26,383) (26,878) (28,085) (25,151) (28,085)
Total tangible common equity $ 294,284 $ 285,054 $ 277,275 $ 281,585 $ 275,981 $ 294,284 $ 275,981
Total assets $ 2,702,575 $ 2,802,078 $ 2,727,543 $ 2,761,244 $ 2,807,822 $ 2,702,575 $ 2,807,822
Intangible assets (25,151) (25,913) (26,383) (26,878) (28,085) (25,151) (28,085)
Total tangible assets $ 2,677,424 $ 2,776,165 $ 2,701,160 $ 2,734,366 $ 2,779,737 $ 2,677,424 $ 2,779,737
Tangible common equity to tangible assets 10.99% 10.27% 10.27% 10.30% 9.93% 10.99% 9.93%
Deposits excluding deposits to be assumed in branch sales
Total deposits $ 2,113,954 $ 2,203,039 $ 2,237,580 $ 2,188,856 $ 2,158,305 $ 2,113,954 $ 2,158,305
Deposits to be assumed in branch sales - (29,495) (31,589) - - - -
Deposits excluding deposits to be assumed in branch sales $ 2,113,954 $ 2,173,544 $ 2,205,991 $ 2,188,856 $ 2,158,305 $ 2,113,954 $ 2,158,305
Loans held for investment excluding mortgage warehouse loans
Total loans held for investment $ 1,962,091 $ 1,901,724 $ 1,981,330 $ 2,008,102 $ 1,942,137 $ 1,962,091 $ 1,942,137
Mortgage warehouse loans (47,992) (58,357) (147,519) (171,251) (126,108) (47,992) (126,108)
Loans held for investment excluding mortgage warehouse loans $ 1,914,099 $ 1,843,367 $ 1,833,811 $ 1,836,851 $ 1,816,029 $ 1,914,099 $ 1,816,029
For the six months ended
June 30,
20162017
