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| 8-K - 8-K - Atlantic Capital Bancshares, Inc. | acb-form8xkinvestorpresent.htm |
Third Quarter 2017 Investor Presentation
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 potential impact of any legal,
regulatory and policy changes affecting financial institutions and the economies in which we conduct operations as a result of the new
presidential administration; (12) 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; (13) the interest rate environment may
compress margins and adversely affect net interest income; (14) changes in trade, monetary and fiscal policies of various governmental bodies
and central banks could affect the economic environment in which we operate; (15) our ability to determine accurate values of certain assets and
liabilities; (16) adverse developments in securities, public debt, and capital markets, including changes in market liquidity and volatility; (17) 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; (18) 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; (19) adequacy of our risk management
program; (20) increased costs associated with operating as a public company; (21) cyber-security incidents, including data security breaches or
computer viruses; (22) 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 (23) 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) tangible common equity to tangible assets; (vi) taxable equivalent net interest margin; and (vii) 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 equity
capital raise in US history at the time
• 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 $2.6 billion in assets
• Consistently maintaining high asset quality
• Operating model expected to produce enhanced efficiencies
• Evaluating initiatives to improve profitability
• Focused on Atlanta, Chattanooga, and Knoxville metropolitan markets
5
6
Key Investment Considerations
Attractive Growth Markets
Solid Core Deposit Growth
Asset Sensitivity
Loan Growth with Superior Credit Quality
Proprietary & Confidential
Atlantic Capital Strategy
7
Invest in Organic Growth
• Well positioned in attractive growth markets
• Invest in bankers and capabilities to accelerate organic growth
• Realign leadership team to improve productivity
Focus on Improving Profitability
• Evaluate cost saving opportunities
• Assess strategy priorities
• Reinvigorate Tennessee businesses
• Asset sensitive balance sheet: benefit from any increase
in interest rates
Atlantic Capital Bank Locations
8
Branch Location
Loan Production Office
Main Office Location
Legend
9
Financial Highlights
Financial
Performance
Balance Sheet
Capital
Asset Quality
(1) Dollars in thousands (2) This is a non-GAAP financial measure. Please see “Non-GAAP Reconciliation” on slides 25 and 26 for more details. (3) Dollars in
millions (4) Annualized (5) Excluding mortgage warehouse loans
METRICS Q2 2017 Q1 2017Q3 2017 YTD 2017 YTD 2016
Diluted EPS $ 0.16 $ 0.17 $ 0.13 $ 0.45 $ 0.47
Net income (1) 4,052 4,329 3,230 11,611 11,786
Efficiency ratio (2) 73.65 % 68.37 % 76.78 % 72.77 % 72.92 %
Return on average assets 0.60 0.63 0.48 0.57 0.58
Net interest margin (tax equivalent) (2) 3.26 3.26 3.20 3.24 3.11
Total assets (3) $ 2,638 $ 2,703 $ 2,802 $ 2,638 $ 2,761
Commercial loans held for investment (3)(5) 1,639 1,687 1,616 1,639 1,610
Average deposits (3) 2,121 2,159 2,112 2,131 2,164
Tier 1 capital ratio 11.3 % 10.9 % 10.7 % 11.3 % 9.7 %
Total risk-based capital ratio 14.3 14.0 13.8 14.3 12.5
Tangible common equity to tangible assets (2) 11.5 11.0 10.3 11.5 10.3
Net charge offs to average loans (4) 0.68 % 0.01 % 0.26 % 0.32 % 0.13 %
NPAs to total assets 0.23 0.52 0.21 0.23 0.09
Allowance for loan and lease losses to
loans held for investment
0.99 1.11 1.05 0.99 0.92
$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 $2,131
Sold 7 branches
– $191 million –
in Q2
Sold 1 branch
– $29 million –
in Q2
FSG acquisition
closed
in Q4
0.42% 0.40% 0.38% 0.47% 0.64%Deposit cost
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
Commercial
Other
Mortgage
Warehouse
$0
$500
$1,000
$1,500
$2,000
Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Sep. 30, 2017
$785
$887
$1,480
$1,609 $1,639$24
$36
$227
$225 $225
$8
$117
$84
$147 $41
FSG acquisition
closed
in Q4
3.64% 3.57% 3.74% 4.07% 4.31%Loan yield
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
1.32%
1.10% 1.06% 1.04% 1.05%
1.11%
0.99%
1.63%
1.43%
1.33% 1.28% 1.27% 1.24%
2013 2014 2015 2016 Q1 2017 Q2 2017 Q3 2017
0.36%
0.12%
0.40%
0.13%
0.21%
0.52%
0.23%
1.33%
0.97%
0.77%
0.69% 0.67% 0.65%
2013 2014 2015 2016 Q1 2017 Q2 2017 Q3 2017
0.02%
(0.01%)
0.05%
0.11%
0.32%
0.33%
0.21%
0.16%
0.20%
0.18%
2013 2014 2015 2016 YTD 2017
241%
746%
180%
591%
341%
155%
312%
111% 132% 137% 144%
156% 152%
2013 2014 2015 2016 Q1 2017 Q2 2017 Q3 2017
13
Financial Highlights:
$33,132
$44,107
$77,192
$19,508 $20,712 $20,506
2.86%
2.99%
3.12%
3.20%
3.26% 3.26%
2.91%
2.98%
3.07%
3.15%
3.20%
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 2014 FY 2015 FY 2016 Q1 2017 Q2 2017 Q3 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
Expected Change in Net Interest Income Over 1 Year
14
0%
5%
10%
15%
20%
25%
up 100 bps up 200 bps up 300 bps
6.7%
13.7%
20.5%
change in interest rate
As of September 30, 2017:
64% of loans are variable rate
28% 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
• Former 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 and the Georgia Chamber of Commerce, is a Member of the Buckhead Coalition, and
former member of YMCA of Metropolitan Atlanta and the High Museum of Art boards
Rich Oglesby
Executive Vice President,
General Banking Division Executive
• CRO of Atlantic Capital since its inception through 2017
• 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
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
Kurt Shreiner
Executive Vice President,
Head of Corporate Financial Services
• EVP at Atlantic Capital since inception
• Former Managing Director and Group Head for Wachovia Securities’ Continental European Group
• Member of the Kellogg Innovation Network at Northwestern University, Fiserv’s Commercial Payments Advisory Board and an executive in
residence at Juniata College in Pennsylvania
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 $36,874
Diversified Loan Mix
Dollars in thousands
Loans Held For Investment
at September 30, 2017
18
Loan Growth by Type
Sept. 30,
2017
June 30,
2017 Change
Loans held for investment
Commercial loans:
Commercial and industrial 562,426$ 578,888$ (16,462)$
Commercial real estate:
Multifamily 91,219 113,571 (22,352)
Owner occupied 348,447 351,733 (3,286)
Investment 505,188 517,571 (12,383)
Construction and land:
1-4 family residential
construction 9,644 11,711 (2,067)
Other construction,
development and land 122,436 113,347 9,089
Mortgage warehouse loans 41,551 47,992 (6,441)
Total commercial loans 1,680,911 1,734,813 (53,902)
Residential:
Residential mortgages 101,976 101,798 178
Home equity 78,773 79,769 (996)
Total residential loans 180,749 181,567 (818)
Consumer 31,750 31,981 (231)
Other 16,106 18,013 (1,907)
1,909,516 1,966,374 (56,858)
(4,084) (4,283) 199
Total loans held for investment 1,905,432$ 1,962,091$ (56,659)$
Less net deferred fees and other
unearned income
CRE
C&I
Owner Occupied
Construction and land
Residential mortgages
Home equity
Consumer & Other
Mortgage Warehouse
18%
30%
7%
6%
4%
31%
2%2%
19
Financial Highlights: Regulatory Capital at 9/30/17
0%
2%
4%
6%
8%
10%
12%
14%
16%
11.2%
12.8% 12.8%
13.7%
9.9%
11.3% 11.3%
14.3%
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
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
$1,270 $1,327 $1,349 $1,274 $1,247
$959
$599
$1,227
$1,171
$888
$361
$350
$407 $488
$437
$632
$499
$257 $388
$320
$780 $1,655 $617
$1,966
$585
$3,857
$4,002
$4,430
$5,287
$302
gain on
sale of
branch
$3,477
21
$0
$5,000
$10,000
$15,000
$20,000
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
$10,059
$11,269 $11,065 $10,603 $10,409
$1,235
$995 $1,230
$1,074 $1,129
$442
$968 $904
$973 $1,595$617
$1,064 $987
$1,069
$982
$4,364
$4,275
$3,558 $3,904 $3,389
$17,623
Financial Highlights: Operating Noninterest Expense*
$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 $17,504
22
ACBI Historical Balance Sheets
September 30, June 30, December 31, September 30,
(in thousands, except share data) 2017 2017 2016 2016
ASSETS
Cash and due from banks $ 35,504 $ 45,008 $ 36,790 $ 44,563
Interest-bearing deposits in banks 40,558 36,171 118,039 75,750
Other short-term investments 5,189 17,459 10,896 23,159
Cash and cash equivalents 81,251 98,638 165,725 143,472
Securities available-for-sale 447,005 450,273 347,705 348,484
Other investments 35,818 26,741 23,806 26,370
Loans held for sale 3,274 1,744 35,219 46,600
Loans held for investment 1,905,432 1,962,091 1,981,330 2,008,102
Less: allowance for loan losses (18,870) (21,870) (20,595) (18,534)
Loans held for investment, net 1,886,562 1,940,221 1,960,735 1,989,568
Branch premises held for sale – – 2,995 5,201
Premises and equipment, net 11,747 11,997 11,958 15,213
Bank owned life insurance 63,284 62,901 62,160 61,766
Goodwill and intangible assets, net 27,945 28,446 29,567 30,071
Other real estate owned 1,494 1,819 1,872 1,727
Other assets 80,032 79,795 85,801 92,772
Total assets $ 2,638,412 $ 2,702,575 $ 2,727,543 $ 2,761,244
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 599,292 $ 612,744 $ 643,471 $ 557,783
Interest-bearing checking 270,740 250,254 264,062 260,531
Savings 30,131 30,170 27,932 29,658
Money market 865,238 882,824 912,493 974,072
Time 144,250 142,915 157,810 172,348
Brokered deposits 193,994 195,047 200,223 194,464
Deposits to be assumed in branch sale – – 31,589 –
Total deposits 2,103,645 2,113,954 2,237,580 2,188,856
Federal funds purchased and securities sold under agreements to repurchase – 15,000 – –
Federal Home Loan Bank borrowings 125,000 180,000 110,000 170,000
Long-term debt 49,493 49,451 49,366 49,324
Other liabilities 35,520 24,735 26,939 44,601
Total liabilities 2,313,658 2,383,140 2,423,885 2,452,781
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding
as of September 30, 2017, June 30, 2017, December 31, 2016, and September 30, 2016 – – – –
Common stock, no par value; 100,000,000 shares authorized;
25,716,418, 25,654,521, 25,093,135, and 24,950,099 shares issued and outstanding as of
September 30, 2017, June 30, 2017, December 31, 2016, and September 30, 2016, respectively 298,469 297,610 292,747 290,835
Retained earnings 28,147 24,095 16,536 14,927
Accumulated other comprehensive income (loss) (1,862) (2,270) (5,625) 2,701
Total shareholders’ equity 324,754 319,435 303,658 308,463
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,638,412 $ 2,702,575 $ 2,727,543 $ 2,761,244
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)
September
30, 2017
June 30,
2017
March 31,
2017
December
31, 2016
September
30, 2016
September
30, 2017
September
30, 2016
INTEREST INCOME
Loans, including fees $ 21,491 $ 21,361 $ 19,994 $ 20,363 $ 20,511 $ 62,846 $ 60,418
Investment securities - available-for-sale 2,298 2,355 2,018 1,477 1,293 6,671 4,221
Interest and dividends on other interest‑earning assets 562 606 449 467 491 1,617 1,271
Total interest income 24,351 24,322 22,461 22,307 22,295 71,134 65,910
INTEREST EXPENSE
Interest on deposits 2,693 2,481 2,047 1,929 1,956 7,221 5,470
Interest on Federal Home Loan Bank advances 459 452 302 234 133 1,213 324
Interest on federal funds purchased and securities sold under
agreements to repurchase 84 76 36 38 37 196 191
Interest on long-term debt 824 824 823 828 815 2,471 2,457
Other – – – – – – 38
Total interest expense 4,060 3,833 3,208 3,029 2,941 11,101 8,480
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 20,291 20,489 19,253 19,278 19,354 60,033 57,430
Provision for loan losses 322 1,980 634 2,208 463 2,936 1,608
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 19,969 18,509 18,619 17,070 18,891 57,097 55,822
NONINTEREST INCOME
Service charges 1,247 1,274 1,349 1,327 1,270 3,870 4,160
Gains (losses) on sale of securities available-for-sale (80) – – – – (80) 44
Gains on sale of other assets 44 666 78 238 71 788 150
Mortgage income 320 388 257 499 632 965 1,418
Trust income 437 488 407 350 361 1,332 1,061
Derivatives income (3) 116 (51) 346 69 62 232
Bank owned life insurance 384 384 378 395 424 1,146 1,215
SBA lending activities 888 1,171 1,227 599 959 3,286 3,043
TriNet lending activities 20 20 20 357 – 60 1,144
Gains on sale of branches – 302 – – – 302 3,885
Other noninterest income 220 478 192 319 216 890 950
Total noninterest income 3,477 5,287 3,857 4,430 4,002 12,621 17,302
NONINTEREST EXPENSE
Salaries and employee benefits 10,409 10,603 11,065 11,269 10,059 32,077 31,034
Occupancy 1,129 1,074 1,230 995 1,235 3,433 3,609
Equipment and software 776 996 805 694 862 2,577 2,272
Professional services 1,595 973 904 968 442 3,472 1,950
Postage, printing and supplies 63 78 85 73 61 226 389
Communications and data processing 982 1,069 987 1,064 617 3,038 2,227
Marketing and business development 272 179 270 247 269 721 853
FDIC premiums 308 132 314 262 415 754 1,306
Merger and conversion costs – 304 – 204 579 304 2,538
Amortization of intangibles 391 425 470 495 520 1,286 1,950
Foreclosed property/problem asset expense 7 107 3 666 39 117 198
Other noninterest expense 1,572 1,683 1,611 1,838 2,198 4,866 6,179
Total noninterest expense 17,504 17,623 17,744 18,775 17,296 52,871 54,505
INCOME BEFORE PROVISION FOR INCOME TAXES 5,942 6,173 4,732 2,725 5,597 16,847 18,619
Provision for income taxes 1,890 1,844 1,502 1,116 1,889 5,236 6,833
NET INCOME $ 4,052 $ 4,329 $ 3,230 $ 1,609 $ 3,708 $ 11,611 $ 11,786
Net income per common share ‑ basic $ 0.16 $ 0.17 $ 0.13 $ 0.06 $ 0.15 $ 0.45 $ 0.48
Net income per common share ‑ diluted $ 0.16 $ 0.17 $ 0.13 $ 0.06 $ 0.15 $ 0.45 $ 0.47
Weighted average shares - basic 25,699,179 25,621,910 25,320,690 25,027,304 24,891,822 25,548,646 24,674,953
Weighted average shares - diluted 25,890,779 25,831,281 25,672,286 25,407,728 25,260,280 25,799,851 25,106,250
Nine 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) These are non-GAAP financial measures. Please see “Non-GAAP Reconciliation” on slides 25 and 26 for more details.
(3) Excludes gain on sale of branches. (4) Excludes merger related and divestiture expenses.
ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
Third
Quarter YTD
(in thousands; taxable equivalent)
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
2017 to
2016
Change 2017 2016
2017 to
2016
Change
INCOME SUMMARY
Interest income
(1)(2)
24,566$ 24,545$ 22,716$ 22,530$ 22,428$ 10 % 71,827$ 66,171$ 9 %
Interest expense 4,060 3,833 3,208 3,029 2,941 38 11,101 8,480 31
Net interest income 20,506 20,712 19,508 19,501 19,487 5 60,726 57,691 5
Provision for loan losses 322 1,980 634 2,208 463 (30) 2,936 1,608 83
Net interest income after provision for loan losses 20,184 18,732 18,874 17,293 19,024 6 57,790 56,083 3
Operating noninterest income
(2)(3)
3,477 5,287 3,857 4,430 4,002 (13) 12,621 13,417 (6)
Operating noninterest expense
(2)(4)
17,504 17,623 17,744 18,571 16,717 5 52,871 51,662 2
Operating income before income taxes 6,157 6,396 4,987 3,152 6,309 (2) 17,540 17,838 (2)
Operating income tax expense 2,105 2,067 1,757 1,417 2,245 (6) 5,929 6,691 (11)
Operating net income
(2)(3)(4)
4,052 4,329 3,230 1,735 4,064 (0) 11,611 11,147 4
Merger related expenses, net of income tax - - - 126 356 (100) - 1,559 (100)
Net gain on sale of branches, net of income tax - - - - - - - 2,198 (100)
Net income - GAAP 4,052$ 4,329$ 3,230$ 1,609$ 3,708$ 9 % 11,611$ 11,786$ (1) %
For the nine months ended
September 30, 20162017
Non-GAAP Reconciliation
25
ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
(in thousands, except share and per share data)
Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2017 2016
Taxable equivalent interest income reconciliation
Interest income - GAAP $ 24,351 $ 24,322 $ 22,461 $ 22,307 $ 22,295 $ 71,134 $ 65,910
Taxable equivalent adjustment 215 223 255 223 133 693 261
Interest income - taxable equivalent $ 24,566 $ 24,545 $ 22,716 $ 22,530 $ 22,428 $ 71,827 $ 66,171
Taxable equivalent net interest income reconciliation
Net interest income - GAAP $ 20,291 $ 20,489 $ 19,253 $ 19,278 $ 19,354 $ 60,033 $ 57,430
Taxable equivalent adjustment 215 223 255 223 133 693 261
Net interest income - taxable equivalent $ 20,506 $ 20,712 $ 19,508 $ 19,501 $ 19,487 $ 60,726 $ 57,691
Operating noninterest income reconciliation
Noninterest income - GAAP $ 3,477 $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 12,621 $ 17,302
Gain on sale of branches - - - - - - (3,885)
Operating noninterest income $ 3,477 $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 12,621 $ 13,417
Operating noninterest expense reconciliation
Noninterest expense - GAAP $ 17,504 $ 17,623 $ 17,744 $ 18,775 $ 17,296 $ 52,871 $ 54,505
Merger-related expenses - - - (204) (579) - (2,538)
Divestiture expenses - - - - - - (305)
Operating noninterest expense $ 17,504 $ 17,623 $ 17,744 $ 18,571 $ 16,717 $ 52,871 $ 51,662
Operating income before income taxes reconciliation
Income before income taxes - GAAP $ 5,942 $ 6,173 $ 4,732 $ 2,725 $ 5,597 $ 16,847 $ 18,619
Taxable equivalent adjustment 215 223 255 223 133 693 261
Merger-related expenses - - - 204 579 - 2,538
Divestiture expenses - - - - - - 305
Gain on sale of branches - - - - - - (3,885)
Operating income before income taxes $ 6,157 $ 6,396 $ 4,987 $ 3,152 $ 6,309 $ 17,540 $ 17,838
Operating income tax reconciliation
Income tax expense - GAAP $ 1,890 $ 1,844 $ 1,502 $ 1,116 $ 1,889 $ 5,236 $ 6,833
Taxable equivalent adjustment 215 223 255 223 133 693 261
Merger related expenses, tax benefit - - - 78 223 - 979
Divestiture expenses, tax benefit - - - - - - 118
Gain on sale of branches, tax expense - - - - - - (1,500)
Operating income tax expense $ 2,105 $ 2,067 $ 1,757 $ 1,417 $ 2,245 $ 5,929 $ 6,691
Operating net income reconciliation
Net income - GAAP $ 4,052 $ 4,329 $ 3,230 $ 1,609 $ 3,708 $ 11,611 $ 11,786
Merger related expenses, net of income tax - - - 126 356 - 1,559
Divestiture expenses, net of income tax - - - - - - 187
Gain on sale of branches, net of income tax - - - - - - (2,385)
Operating net income $ 4,052 $ 4,329 $ 3,230 $ 1,735 $ 4,064 $ 11,611 $ 11,147
Operating diluted earnings per share reconciliation
Diluted earnings per share - GAAP $ 0.16 $ 0.17 $ 0.13 $ 0.06 $ 0.15 $ 0.45 $ 0.47
Merger related expenses - - - 0.01 0.01 - 0.07
Net gain on sale of branches - - - - - - (0.10)
Diluted earnings per share - operating $ 0.16 $ 0.17 $ 0.13 $ 0.07 $ 0.16 $ 0.45 $ 0.44
For the nine months ended
September 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)
Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2017 2016
Efficiency ratio reconciliation
Noninterest income - GAAP $ 3,477 $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 12,621 $ 17,302
Gain on sale of branches - - - - - - (3,885)
Operating noninterest income $ 3,477 $ 5,287 $ 3,857 $ 4,430 $ 4,002 $ 12,621 $ 13,417
Noninterest expense - GAAP $ 17,504 $ 17,623 $ 17,744 $ 18,775 $ 17,296 $ 52,871 $ 54,505
Merger-related expenses - - - (204) (579) - (2,538)
Divestiture expenses - - - - - - (305)
Operating noninterest expense $ 17,504 $ 17,623 $ 17,744 $ 18,571 $ 16,717 $ 52,871 $ 51,662
Net interest income 20,291 20,489 19,253 19,278 19,354 60,033 57,430
Efficiency ratio 73.65% 68.37% 76.78% 78.33% 71.57% 72.77% 72.92%
Tangible common equity to tangible assets reconciliation
Total shareholders’ equity $ 324,754 $ 319,435 $ 310,967 $ 303,658 $ 308,463 $ 324,754 $ 308,463
Intangible assets (24,760) (25,151) (25,913) (26,383) (26,878) (24,760) (26,878)
Total tangible common equity $ 299,994 $ 294,284 $ 285,054 $ 277,275 $ 281,585 $ 299,994 $ 281,585
Total assets $ 2,638,412 $ 2,702,575 $ 2,802,078 $ 2,727,543 $ 2,761,244 $ 2,638,412 $ 2,761,244
Intangible assets (24,760) (25,151) (25,913) (26,383) (26,878) (24,760) (26,878)
Total tangible assets $ 2,613,652 $ 2,677,424 $ 2,776,165 $ 2,701,160 $ 2,734,366 $ 2,613,652 $ 2,734,366
Tangible common equity to tangible assets 11.48% 10.99% 10.27% 10.27% 10.30% 11.48% 10.30%
Loans held for investment excluding mortgage warehouse loans
Total loans held for investment $ 1,905,432 $ 1,962,091 $ 1,901,724 $ 1,981,330 $ 2,008,102 $ 1,905,432 $ 2,008,102
Mortgage warehouse loans (41,551) (47,992) (58,357) (147,519) (171,251) (41,551) (171,251)
Loans held for investment excluding mortgage warehouse loans $ 1,863,881 $ 1,914,099 $ 1,843,367 $ 1,833,811 $ 1,836,851 $ 1,863,881 $ 1,836,851
Taxable equivalent net interest margin reconciliation
Net interest margin - GAAP 3.23% 3.23% 3.16% 3.07% 3.10% 3.21% 3.10%
Impact of taxable equivalent adjustment 0.03% 0.03% 0.04% 0.04% 0.02% 0.03% 0.01%
Net interest margin - taxable equivalent 3.26% 3.26% 3.20% 3.11% 3.12% 3.24% 3.11%
For the nine months ended
September 30,
20162017
