Atlantic Capital Bancshares, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - Atlantic Capital Bancshares, Inc.	acb-form8xkearningsrelease.htm

PRESS RELEASE

ATLANTIC CAPITAL BANCSHARES, INC. REPORTS SECOND QUARTER 2018 RESULTS

Atlanta, GA - July 25, 2018 - Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income of $8.2 million, or $0.31 per diluted share, for the second quarter of 2018, compared to $5.0 million, or $0.19 per diluted share, in the first quarter of 2018. Operating net income for the second quarter of 2018, excluding the gain on sale of Southeastern Trust Company, was $6.9 million, or $0.26 per diluted share, compared to $5.0 million, or $0.19 per diluted share, in the first quarter of 2018.

Second Quarter Highlights⁽¹⁾


•	Reported return on average assets of 1.20% and return on average equity of 10.46%.


•	Reported net interest margin of 3.54%, an increase of 3 basis points from the first quarter of 2018.


•	Reported nonperforming assets to total assets of 0.14% and annualized net charge-offs to average loans of 0.03%.


•	Closed on the sale of Southeastern Trust Company in the second quarter of 2018 and recorded a net gain of $1.7 million.


•	Decreased noninterest expense $1.0 million to $17.4 million compared to the first quarter of 2018.


•	Improved efficiency ratio to 67.7% compared to 72.1% in the first quarter of 2018.

“As a result of higher loan yields, excellent credit quality, disciplined expense control, and good growth in our Atlanta market and specialty businesses, Atlantic Capital reported record earnings for the second quarter of 2018,” explained Douglas Williams, President and Chief Executive Officer.

Income Statement

Net interest income increased to $22.1 million in the second quarter of 2018 from $21.6 million in the first quarter of 2018, primarily as a result of higher loan yields from increases in short term interest rates. Net accretion income on acquired loans totaled $331,000 in the second quarter of 2018 compared to $448,000 in the first quarter of 2018.

Net interest margin was 3.54% in the second quarter of 2018, an increase of 3 basis points from the first quarter of 2018. The accretion from the acquired loan discount and amortization of time deposit premium contributed 7 basis points to the net interest margin in the second quarter of 2018 compared to 9 basis points in the first quarter of 2018.

Loan yields in the second quarter of 2018 increased 21 basis points to 4.95% from the first quarter of 2018 as a result of the increases in the federal funds rate and 1 month LIBOR, offset by a decrease in accretion income. Accretion income contributed 7 basis points to the loan yield in the second quarter of 2018 compared to 9 basis points in the first quarter of 2018.

The cost of total deposits in the second quarter of 2018 was 0.69%, an increase of 12 basis points from the first quarter of 2018. The cost of interest bearing deposits increased 16 basis points to 0.97% from the first quarter of 2018, driven by an increase in short term interest rates and increases in our deposit rates.

The provision for loan losses was ($173,000) in the second quarter of 2018 compared to $772,000 in the first quarter of 2018, primarily as a result of a decrease in loan balances, a lower level of net charge-offs, and improved credit quality.

Noninterest income totaled $5.3 million in the second quarter of 2018, an increase of $1.3 million from the first quarter of 2018. The second quarter included a gain of $1.7 million from the sale of Southeastern Trust Company and a loss of $169,000 from the disposal and sale of fixed assets related to the relocation of our Atlanta headquarters.

⁽¹⁾ Commentary is on a fully taxable-equivalent basis unless otherwise noted. Consistent with SEC guidance in Industry Guide 3 that contemplates the calculation of tax-exempt income on a tax equivalent basis, net interest income and net interest margin are provided on a fully taxable-equivalent basis, which generally assumes a 21% marginal tax rate for 2018 and 35% for 2017 and prior. We provide detailed reconciliations in the Non-GAAP Performance and Financial Measures Reconciliation table beginning on page 12.

Service charges increased $116,000 primarily from an increase in account analysis and other fees. SBA income decreased $305,000 from $1.3 million in the first quarter of 2018.

Noninterest expense totaled $17.4 million in the second quarter of 2018 compared to $18.4 million in the first quarter of 2018. Salaries and employee benefits expense decreased by $1.2 million to $10.9 million, primarily from a decrease in severance related expense. This was offset by an increase of $128,000 in professional fees, mainly related to the sale of the trust company. In addition, other noninterest expense in the second quarter of 2018 included a $228,000 impairment on an SBIC investment.

Balance Sheet

Total loans were $1.94 billion at June 30, 2018, a decrease of $24.3 million from March 31, 2018, as commercial and industrial loans decreased $26.2 million during the quarter, primarily due to decreases in the Tennessee commercial market and an accelerated level of syndicated loan payoffs.

At June 30, 2018, the allowance for loan losses was $19.6 million, or 1.01% of loans held for investment, compared to $19.9 million, or 1.01% of loans held for investment as of March 31, 2018. Annualized net charge-offs to average loans totaled 0.03% in the second quarter of 2018 compared to 0.05% in the first quarter of 2018. Nonperforming assets totaled $3.7 million, or 0.14% of total assets, as of June 30, 2018, compared to $3.4 million, or 0.13% of total assets, as of March 31, 2018.

Total average deposits for the second quarter of 2018 were $2.14 billion, a decrease of $18.1 million from the first quarter of 2018. This decrease was the result of seasonal volatility in deposits for our Payments business along with a decrease in brokered deposits. Average transaction deposits, which includes DDA and NOW accounts, increased $29.6 million in the second quarter of 2018, compared to the first quarter.

Earnings Conference Call

The Company will host a conference call at 10:00 a.m. EST on Thursday, July 26, 2018, to discuss the financial results for the quarter ended June 30, 2018. Individuals wishing to participate in the conference call may do so by dialing 844.868.8848 from the United States and entering Conference ID 89772886. The call will also be available live via webcast on the Investor Relations page of the Company's website, www.atlanticcapitalbank.com.

Non-GAAP Financial Measures

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) operating net income; (ii) operating noninterest income; (iii) taxable equivalent interest income; (iv) taxable equivalent net interest income; (v) taxable equivalent net interest margin; (vi) operating income before taxes; (vii) operating income tax expense; (viii) operating return on average assets; (ix) operating return on average equity; (x) tangible common equity; (xi) tangible book value per common share; (xii) efficiency ratio; and (xiii) operating diluted earnings per share, in its analysis of the Company's performance. Operating net income excludes the net gain on the sale of the trust company and the revaluation of net deferred tax assets. Tangible common equity excludes goodwill and other intangible assets from shareholders' equity.

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

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” or words or phases of similar meaning. Forward-looking statements may include, among other things, statements about Atlantic Capital’s confidence in its strategies and its expectations about financial performance, market growth, market and regulatory trends and developments, acquisitions and divestitures, new technologies, services and opportunities and earnings. The forward-looking statements are based largely on Atlantic Capital’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond Atlantic Capital’s control. Atlantic Capital undertakes no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements as a result of, among other factors, the risks and uncertainties described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Atlantic Capital’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Please refer to the SEC’s website at www.sec.gov where you can review those documents.

About Atlantic Capital Bancshares

Atlantic Capital Bancshares, Inc. is a $2.69 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 six months ended June 30,
(in thousands, except share and per share data; taxable equivalent)	Second Quarter				First Quarter			Fourth Quarter				Third Quarter			Second Quarter			2018			2017
INCOME SUMMARY
Interest income ⁽¹⁾	$	27,444			$	26,085		$	25,350			$	24,566		$	24,545		$	53,529		$	47,261
Interest expense	5,332				4,465			4,028				4,060			3,833			9,797			7,041
Net interest income	22,112				21,620			21,322				20,506			20,712			43,732			40,220
Provision for loan losses	(173		)		772			282				322			1,980			599			2,614
Net interest income after provision for loan losses	22,285				20,848			21,040				20,184			18,732			43,133			37,606
Operating noninterest income ⁽²⁾	3,650				3,983			3,568				3,477			5,287			7,633			9,144
Noninterest expense	17,361				18,392			20,594				17,504			17,623			35,753			35,367
Operating income before income taxes ⁽²⁾	8,574				6,439			4,014				6,157			6,396			15,013			11,383
Operating income tax expense ⁽³⁾	1,684				1,401			1,953				2,105			2,067			3,085			3,824
Operating net income ⁽²⁾⁽³⁾	6,890				5,038			2,061				4,052			4,329			11,928			7,559
Net gain on sale of trust company, net of income tax	1,261				—			—				—			—			1,261			—
Revaluation of net deferred tax asset	—				—			17,398				—			—			—			—
Net income (loss) - GAAP	$	8,151			$	5,038		$	(15,337	)		$	4,052		$	4,329		$	13,189		$	7,559

PER SHARE DATA
Diluted earnings (loss) per share - GAAP	$	0.31			$	0.19		$	(0.60	)		$	0.16		$	0.17		$	0.51		$	0.29
Diluted earnings per share - operating ⁽²⁾⁽³⁾	0.26				0.19			0.08				0.16			0.17			0.46			0.29
Book value per share	12.14				11.91			11.99				12.63			12.45			12.14			12.45
Tangible book value per common share ⁽⁴⁾	11.23				10.98			11.05				11.67			11.47			11.23			11.47

PERFORMANCE MEASURES
Return on average equity - GAAP	10.46			%	6.66		%	(18.66		)	%	4.96		%	5.48		%	8.59		%	4.88		%
Return on average equity - operating ⁽²⁾⁽³⁾	8.84				6.66			2.51				4.96			5.48			7.77			4.88
Return on average assets - GAAP	1.20				0.76			(2.24		)		0.60			0.63			0.98			0.56
Return on average assets - operating ⁽²⁾⁽³⁾	1.02				0.76			0.30				0.60			0.63			0.89			0.56
Taxable equivalent net interest margin	3.54				3.51			3.39				3.26			3.26			3.52			3.23
Efficiency ratio	67.65				72.13			83.45				73.65			68.37			69.88			72.35

CAPITAL
Average equity to average assets	11.50			%	11.34		%	11.99			%	11.99		%	11.47		%	11.42		%	11.45		%
Tangible common equity to tangible assets	10.99				10.50			9.91				11.48			10.99			10.99			10.99
Tier 1 capital ratio	11.9			⁽⁶⁾	11.3			11.2				11.3			10.9			11.9		⁽⁶⁾	10.9
Total risk based capital ratio	14.9			⁽⁶⁾	14.3			14.1				14.3			14.0			14.9		⁽⁶⁾	14.0
Number of common shares outstanding - basic	26,102,217				25,772,208			25,712,909				25,716,418			25,654,521			26,102,217			25,654,521
Number of common shares outstanding - diluted	26,336,871				26,000,216			25,891,225				25,967,575			25,931,671			26,336,871			25,931,671

ASSET QUALITY
Allowance for loan losses to loans held for investment	1.01			%	1.01		%	1.00			%	0.99		%	1.11		%	1.01		%	1.11		%
Net charge-offs to average loans ⁽⁵⁾	0.03				0.05			(0.04		)		0.68			0.01			0.04			0.14
Non-performing assets to total assets	0.14				0.13			0.14				0.23			0.52			0.14			0.52

⁽¹⁾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. ⁽²⁾Excludes gain on sale of trust company. ⁽³⁾Excludes revaluation of net deferred tax asset. ⁽⁴⁾Excludes effect of acquisition related intangibles. ⁽⁵⁾Annualized. ⁽⁶⁾Amounts are estimates as of 6/30/18.



ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)

	June 30,			March 31,			December 31,			June 30,
(in thousands, except share data)	2018			2018			2017			2017
ASSETS
Cash and due from banks	$	55,612		$	39,985		$	38,086		$	45,008
Interest-bearing deposits in banks	42,477			62,787			281,247			36,171
Other short-term investments	14,712			9,669			10,681			17,459
Cash and cash equivalents	112,801			112,441			330,014			98,638
Investment securities available-for-sale	453,968			458,730			449,117			450,273
Other investments	36,190			37,949			32,174			26,741
Loans held for sale	1,612			835			1,487			1,744
Loans held for investment	1,934,311			1,959,421			1,933,839			1,962,091
Less: allowance for loan losses	(19,583		)	(19,885		)	(19,344		)	(21,870		)
Loans held for investment, net	1,914,728			1,939,536			1,914,495			1,940,221
Premises and equipment, net	16,878			15,475			12,054			11,997
Bank owned life insurance	64,391			64,014			63,667			62,901
Goodwill and intangible assets, net	27,012			27,485			27,633			28,446
Other real estate owned	1,288			927			1,215			1,819
Other assets	61,806			61,273			59,565			79,795
Total assets	$	2,690,674		$	2,718,665		$	2,891,421		$	2,702,575

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand	$	595,867		$	599,838		$	732,442		$	612,744
Interest-bearing checking	332,481			302,636			306,331			250,254
Savings	27,559			29,407			26,573			30,170
Money market	865,913			911,449			1,117,891			882,824
Time	152,111			140,594			138,612			142,915
Brokered deposits	92,656			112,376			128,816			195,047
Total deposits	2,066,587			2,096,300			2,450,665			2,113,954
Federal funds purchased and securities sold under agreements to repurchase	73,024			47,855			—			15,000
Federal Home Loan Bank borrowings	150,000			185,000			45,000			180,000
Long-term debt	49,620			49,577			49,535			49,451
Other liabilities	34,673			32,874			37,796			24,735
Total liabilities	2,373,904			2,411,606			2,582,996			2,383,140

SHAREHOLDERS' EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2018, March 31, 2018, December 31, 2017, and June 30, 2017	—			—			—			—
Common stock, no par value; 100,000,000 shares authorized; 26,102,217, 25,772,208, 25,712,909, and 25,654,521 shares issued and outstanding as of June 30, 2018, March 31, 2018, December 31, 2017, and June 30, 2017, respectively	304,793			300,893			299,474			297,610
Retained earnings	26,844			18,693			12,810			24,095
Accumulated other comprehensive (loss) income	(14,867		)	(12,527		)	(3,859		)	(2,270		)
Total shareholders’ equity	316,770			307,059			308,425			319,435
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,690,674		$	2,718,665		$	2,891,421		$	2,702,575



ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Statements of Income (unaudited)

(in thousands, except share and per share data)	Three months ended														Six months ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017		June 30, 2018			June 30, 2017
INTEREST INCOME
Loans, including fees	$	23,779		$	22,675		$	22,043		$	21,491		$	21,361	$	46,454		$	41,355
Investment securities available-for-sale	2,687			2,592			2,510			2,298			2,355		5,279			4,373
Interest and dividends on other interest‑earning assets	880			715			584			562			606		1,595			1,055
Total interest income	27,346			25,982			25,137			24,351			24,322		53,328			46,783

INTEREST EXPENSE
Interest on deposits	3,651			3,044			2,856			2,693			2,481		6,695			4,528
Interest on Federal Home Loan Bank advances	766			509			323			459			452		1,275			754
Interest on federal funds purchased and securities sold under agreements to repurchase	92			83			26			84			76		175			112
Interest on long-term debt	823			829			823			824			824		1,652			1,647
Total interest expense	5,332			4,465			4,028			4,060			3,833		9,797			7,041

NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES	22,014			21,517			21,109			20,291			20,489		43,531			39,742
Provision for loan losses	(173		)	772			282			322			1,980		599			2,614
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	22,187			20,745			20,827			19,969			18,509		42,932			37,128

NONINTEREST INCOME
Service charges	1,308			1,192			1,206			1,247			1,274		2,500			2,623
Gains (losses) on sale of securities	(2		)	—			17			(80		)	—		(2		)	—
Gains (losses) on sale of other assets	(166		)	(46		)	(46		)	44			666		(212		)	744
Mortgage income	363			304			290			320			388		667			645
Trust income	507			518			482			437			488		1,025			895
Derivatives income	20			114			94			(3		)	116		134			65
Bank owned life insurance	378			369			384			384			384		747			762
SBA lending activities	997			1,302			843			888			1,171		2,299			2,398
Gains on sale of branches	—			—			—			—			302		—			302
Gain on sale of trust company	1,681			—			—			—			—		1,681			—
Other noninterest income	245			230			298			240			498		475			710
Total noninterest income	5,331			3,983			3,568			3,477			5,287		9,314			9,144

NONINTEREST EXPENSE
Salaries and employee benefits	10,921			12,077			13,298			10,409			10,603		22,998			21,668
Occupancy	1,211			1,355			1,156			1,129			1,074		2,566			2,304
Equipment and software	904			787			872			776			996		1,691			1,801
Professional services	960			832			1,280			1,595			973		1,792			1,877
Postage, printing and supplies	61			58			114			63			78		119			163
Communications and data processing	1,003			1,043			1,111			982			1,069		2,046			2,056
Marketing and business development	191			190			225			272			179		381			449
FDIC premiums	197			147			212			308			132		344			446
Merger and conversion costs	—			—			—			—			304		—			304
Amortization of intangibles	319			343			367			391			425		662			895
Foreclosed property/problem asset expense	2			282			7			7			107		284			110
Other noninterest expense	1,592			1,278			1,952			1,572			1,683		2,870			3,294
Total noninterest expense	17,361			18,392			20,594			17,504			17,623		35,753			35,367

INCOME BEFORE PROVISION FOR INCOME TAXES	10,157			6,336			3,801			5,942			6,173		16,493			10,905
Provision for income taxes	2,006			1,298			19,138			1,890			1,844		3,304			3,346
NET INCOME (LOSS)	$	8,151		$	5,038		$	(15,337	)	$	4,052		$	4,329	$	13,189		$	7,559

Net income (loss) per common share ‑ basic	$	0.31		$	0.20		$	(0.60	)	$	0.16		$	0.17	$	0.51		$	0.30
Net income (loss) per common share ‑ diluted	$	0.31		$	0.19		$	(0.60	)	$	0.16		$	0.17	$	0.51		$	0.29
Weighted average shares - basic	26,010,914			25,750,824			25,723,548			25,699,179			25,621,910		25,881,587			25,472,132
Weighted average shares - diluted	26,200,026			25,945,773			25,888,064			25,890,779			25,831,281		26,073,602			25,753,633



ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information

	Three months ended
	June 30, 2018						March 31, 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	$	97,501	$	562	2.31	%	$	78,207	$	397	2.06	%
Other short-term investments	9,262		64		2.77		10,346		63		2.47
Investment securities:
Taxable investment securities	378,291		2,212		2.35		375,771		2,116		2.28
Non-taxable investment securities⁽¹⁾	76,343		573		3.01		78,146		579		3.00
Total investment securities	454,634		2,785		2.46		453,917		2,695		2.41
Total loans	1,927,063		23,779		4.95		1,938,953		22,675		4.74
FHLB and FRB stock	19,357		254		5.26		17,895		255		5.78
Total interest-earning assets	2,507,817		27,444		4.39		2,499,318		26,085		4.23
Non-earning assets	210,254						205,504
Total assets	$	2,718,071					$	2,704,822
Liabilities
Interest bearing deposits:
NOW, money market, and savings	1,254,153		2,798		0.89		1,257,580		2,251		0.73
Time deposits	148,134		385		1.04		139,788		314		0.91
Brokered deposits	100,425		468		1.87		117,787		479		1.65
Total interest-bearing deposits	1,502,712		3,651		0.97		1,515,155		3,044		0.81
Total borrowings	185,856		858		1.85		156,822		592		1.53
Total long-term debt	49,592		823		6.66		49,550		829		6.79
Total interest-bearing liabilities	1,738,160		5,332		1.23		1,721,527		4,465		1.05
Demand deposits	633,113						638,730
Other liabilities	34,255						37,744
Shareholders' equity	312,543						306,821
Total liabilities and shareholders' equity	$	2,718,071					$	2,704,822
Net interest spread					3.16	%					3.18	%
Net interest income and net interest margin⁽²⁾			$	22,112	3.54	%			$	21,620	3.51	%

Non-taxable equivalent net interest margin					3.52	%					3.49	%

⁽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

	Six months ended
	June 30, 2018						June 30, 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	$	87,907	$	959	2.20	%	$	79,251	$	398	1.01	%
Other short-term investments	9,801		127		2.61		17,402		164		1.90
Investment securities:
Taxable investment securities	377,038		4,328		2.31		356,485		3,386		1.92
Non-taxable investment securities⁽¹⁾	77,239		1,152		3.01		80,826		1,465		3.66
Total investment securities	454,277		5,480		2.43		437,311		4,851		2.24
Total loans	1,932,975		46,454		4.85		1,955,915		41,355		4.26
FHLB and FRB stock	18,630		509		5.51		19,479		493		5.10
Total interest-earning assets	2,503,590		53,529		4.31		2,509,358		47,261		3.80
Non-earning assets	207,893						219,381
Total assets	$	2,711,483					$	2,728,739
Liabilities
Interest bearing deposits:
NOW, money market, and savings	1,255,857		5,049		0.81		1,160,545		2,956		0.51
Time deposits	143,984		699		0.98		156,423		541		0.70
Brokered deposits	109,058		947		1.75		195,150		1,031		1.07
Total interest-bearing deposits	1,508,899		6,695		0.89		1,512,118		4,528		0.60
Total borrowings	171,419		1,450		1.71		204,761		866		0.85
Total long-term debt	49,571		1,652		6.72		49,402		1,647		6.72
Total interest-bearing liabilities	1,729,889		9,797		1.14		1,766,281		7,041		0.80
Demand deposits	635,906						623,344
Other liabilities	35,990						26,547
Shareholders' equity	309,698						312,567
Total liabilities and shareholders' equity	$	2,711,483					$	2,728,739
Net interest spread					3.17	%					3.00	%
Net interest income and net interest margin⁽²⁾			$	43,732	3.52	%			$	40,220	3.23	%

Non-taxable equivalent net interest margin					3.51	%					3.19	%

⁽¹⁾ Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for the six months ended June 30, 2018 and 35% for the six months ended June 30, 2017, reflecting the statutory federal income tax rates.
⁽²⁾ Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.



ATLANTIC CAPITAL BANCSHARES, INC.
Period End Loans


(dollars in thousands)	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			Linked Quarter Change			Year Over Year Change

Loans held for sale
Loans held for sale	$	1,612		$	835		$	1,487		$	3,274		$	1,744		$	777		$	(132	)
Total loans held for sale	$	1,612		$	835		$	1,487		$	3,274		$	1,744		$	777		$	(132	)

Loans held for investment
Commercial loans:
Commercial and industrial	$	610,024		$	636,181		$	615,359		$	562,426		$	578,888		$	(26,157	)	$	31,136
Commercial real estate:
Multifamily	99,140			99,227			99,553			91,219			113,571			(87		)	(14,431		)
Owner occupied	367,441			353,235			346,746			348,447			351,733			14,206			15,708
Investment	455,401			461,638			494,116			505,188			517,571			(6,237		)	(62,170		)
Construction and land:
1-4 family residential construction	6,178			6,571			6,906			9,644			11,711			(393		)	(5,533		)
Other construction, development, and land	140,026			139,333			108,589			122,436			113,347			693			26,679
Mortgage warehouse loans	38,352			44,575			39,981			41,551			47,992			(6,223		)	(9,640		)
Total commercial loans	1,716,562			1,740,760			1,711,250			1,680,911			1,734,813			(24,198		)	(18,251		)

Residential:
Residential mortgages	103,468			105,255			104,484			101,976			101,798			(1,787		)	1,670
Home equity	66,974			70,712			76,244			78,773			79,769			(3,738		)	(12,795		)
Total residential loans	170,442			175,967			180,728			180,749			181,567			(5,525		)	(11,125		)

Consumer	32,231			30,966			29,393			31,750			31,981			1,265			250
Other	17,997			15,181			16,278			16,106			18,013			2,816			(16		)
	1,937,232			1,962,874			1,937,649			1,909,516			1,966,374			(25,642		)	(29,142		)
Less net deferred fees and other unearned income	(2,921		)	(3,453		)	(3,810		)	(4,084		)	(4,283		)	532			1,362
Total loans held for investment	$	1,934,311		$	1,959,421		$	1,933,839		$	1,905,432		$	1,962,091		$	(25,110	)	$	(27,780	)

Total loans	$	1,935,923		$	1,960,256		$	1,935,326		$	1,908,706		$	1,963,835		$	(24,333	)	$	(27,912	)



ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Loan Losses Activity and Credit Quality

	2018								2017
(dollars in thousands)	Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter

Balance at beginning of period	$	19,885			$	19,344			$	18,870			$	21,870			$	19,939
Provision for loan losses	(173		)		811				312				314				2,048
Provision for PCI loan losses	—				(39		)		(30		)		8				(68		)
Loans charged-off:
Commercial and industrial	—				(126		)		—				(3,292		)		—
Commercial real estate	(50		)		—				—				—				—
Construction and land	—				—				—				(16		)		—
Residential mortgages	—				(70		)		—				—				—
Home equity	(102		)		(58		)		—				(31		)		(8		)
Consumer	(10		)		(3		)		(13		)		(7		)		(57		)
Other	—				—				—				—				—
Total loans charged-off	(162		)		(257		)		(13		)		(3,346		)		(65		)
Recoveries on loans previously charged-off:
Commercial and industrial	—				19				192				1				7
Commercial real estate	28				—				—				—				2
Construction and land	—				—				1				15				—
Residential mortgages	—				—				—				—				1
Home equity	—				—				—				—				1
Consumer	5				7				12				8				5
Other	—				—				—				—				—
Total recoveries	33				26				205				24				16
Net charge-offs	$	(129	)		$	(231	)		$	192			$	(3,322	)		$	(49	)
Balance at period end	$	19,583			$	19,885			$	19,344			$	18,870			$	21,870

Loans held for investment
PCI Loans	$	10,620			$	11,837			$	11,754			$	12,090			$	11,510
Non-PCI Loans	1,923,691				1,947,584				1,922,085				1,893,342				1,950,581
	$	1,934,311			$	1,959,421			$	1,933,839			$	1,905,432			$	1,962,091

Non-performing loans - PCI	$	969			$	1,217			$	1,211			$	1,289			$	1,310

Non-performing loans - Non-PCI	$	2,406			$	2,501			$	2,912			$	4,553			$	12,300
Foreclosed properties (OREO)	1,288				927				1,215				1,494				1,819
Total nonperforming assets	$	3,694			$	3,428			$	4,127			$	6,047			$	14,119

Allowance for loan losses to loans held for investment	1.01			%	1.01			%	1.00			%	0.99			%	1.11			%
Net charge-offs to average loans ⁽¹⁾	0.03				0.05				(0.04		)		0.68				0.01
Nonperforming loans as a percentage of total loans ⁽²⁾	0.12				0.13				0.15				0.24				0.63
Nonperforming assets as a percentage of total assets ⁽²⁾	0.14				0.13				0.14				0.23				0.52

⁽¹⁾Annualized. ⁽²⁾Excludes non-performing PCI loans.



ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits

(dollars in thousands)	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			Linked Quarter Change			Year Over Year Change

DDA	$	595,867		$	599,838		$	732,442		$	599,292		$	612,744		$	(3,971	)	$	(16,877	)
NOW	332,481			302,636			306,331			270,740			250,254			29,845			82,227
Savings	27,559			29,407			26,573			30,131			30,170			(1,848		)	(2,611		)
Money Market	865,913			911,449			1,117,891			865,238			882,824			(45,536		)	(16,911		)
Time	152,111			140,594			138,612			144,250			142,915			11,517			9,196
Brokered	92,656			112,376			128,816			193,994			195,047			(19,720		)	(102,391		)
Total Deposits	$	2,066,587		$	2,096,300		$	2,450,665		$	2,103,645		$	2,113,954		$	(29,713	)	$	(47,367	)

Payments Clients	$	251,748		$	311,943		$	405,873		$	239,079		$	250,104		$	(60,195	)	$	1,644

Average Deposits⁽¹⁾

	2018						2017									Linked Quarter Change			Year Over Year Change
(dollars in thousands)	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter			Linked Quarter Change			Year Over Year Change

DDA	$	633,113		$	638,730		$	649,218		$	628,029		$	626,330		$	(5,617	)	$	6,783
NOW	364,362			329,171			338,741			291,810			293,160			35,191			71,202
Savings	28,239			29,609			29,851			30,236			30,468			(1,370		)	(2,229		)
Money Market	861,552			898,800			907,524			870,618			860,116			(37,248		)	1,436
Time	148,134			139,788			140,921			143,862			149,898			8,346			(1,764		)
Brokered	100,425			117,787			128,594			156,708			198,703			(17,362		)	(98,278		)
Total Deposits	$	2,135,825		$	2,153,885		$	2,194,849		$	2,121,263		$	2,158,675		$	(18,060	)	$	(22,850	)

Payments Clients	$	219,016		$	256,794		$	234,558		$	209,851		$	244,157		$	(37,778	)	$	(25,141	)

Noninterest bearing deposits as a percentage of average deposits	29.6		%	29.7		%	29.6		%	29.6		%	29.0		%
Cost of deposits	0.69		%	0.57		%	0.52		%	0.50		%	0.46		%

⁽¹⁾ Includes average balances of deposits to be assumed in branch sale.



ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation


	2018							2017										For the six months ended June 30,
(in thousands, except share and per share data)	Second Quarter				First Quarter			Fourth Quarter				Third Quarter			Second Quarter			2018				2017

Taxable equivalent interest income reconciliation
Interest income - GAAP	$	27,346			$	25,982		$	25,137			$	24,351		$	24,322		$	53,328			$	46,783
Taxable equivalent adjustment	98				103			213				215			223			201				478
Interest income - taxable equivalent	$	27,444			$	26,085		$	25,350			$	24,566		$	24,545		$	53,529			$	47,261

Taxable equivalent net interest income reconciliation
Net interest income - GAAP	$	22,014			$	21,517		$	21,109			$	20,291		$	20,489		$	43,531			$	39,742
Taxable equivalent adjustment	98				103			213				215			223			201				478
Net interest income - taxable equivalent	$	22,112			$	21,620		$	21,322			$	20,506		$	20,712		$	43,732			$	40,220

Taxable equivalent net interest margin reconciliation
Net interest margin - GAAP	3.52			%	3.49		%	3.35			%	3.23		%	3.23		%	3.51			%	3.19		%
Impact of taxable equivalent adjustment	0.02				0.02			0.04				0.03			0.03			0.01				0.04
Net interest margin - taxable equivalent	3.54			%	3.51		%	3.39			%	3.26		%	3.26		%	3.52			%	3.23		%

Operating noninterest income reconciliation
Noninterest income - GAAP	$	5,331			$	3,983		$	3,568			$	3,477		$	5,287		$	9,314			$	9,144
Gain on sale of trust company	(1,681		)		—			—				—			—			(1,681		)		—
Operating noninterest income	$	3,650			$	3,983		$	3,568			$	3,477		$	5,287		$	7,633			$	9,144

Operating income before income taxes reconciliation
Income before income taxes - GAAP	$	10,157			$	6,336		$	3,801			$	5,942		$	6,173		$	16,493			$	10,905
Taxable equivalent adjustment	98				103			213				215			223			201				478
Gain on sale of trust company	(1,681		)		—			—				—			—			(1,681		)		—
Operating income before income taxes	$	8,574			$	6,439		$	4,014			$	6,157		$	6,396		$	15,013			$	11,383

Operating income tax reconciliation
Income tax expense - GAAP	$	2,006			$	1,298		$	19,138			$	1,890		$	1,844		$	3,304			$	3,346
Taxable equivalent adjustment	98				103			213				215			223			201				478
Gain on sale of trust company, tax expense	(420		)		—			—				—			—			(420		)		—
Revaluation of net deferred tax asset	—				—			(17,398		)		—			—			—				—
Operating income tax expense	$	1,684			$	1,401		$	1,953			$	2,105		$	2,067		$	3,085			$	3,824

Operating net income reconciliation
Net income (loss) - GAAP	$	8,151			$	5,038		$	(15,337	)		$	4,052		$	4,329		$	13,189			$	7,559
Gain on sale of trust company, net of income tax	(1,261		)		—			—				—			—			(1,261		)		—
Revaluation of net deferred tax asset	—				—			17,398				—			—			—				—
Operating net income	$	6,890			$	5,038		$	2,061			$	4,052		$	4,329		$	11,928			$	7,559

Operating diluted earnings per share reconciliation
Diluted earnings (loss) per share - GAAP	$	0.31			$	0.19		$	(0.60	)		$	0.16		$	0.17		$	0.51			$	0.29
Net gain on sale of trust company	(0.05		)		—			—				—			—			(0.05		)		—
Revaluation of net deferred tax asset	—				—			0.68				—			—			—				—
Diluted earnings per share - operating	$	0.26			$	0.19		$	0.08			$	0.16		$	0.17		$	0.46			$	0.29



ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation


	2018								2017												For the six months ended June 30,
(in thousands, except share and per share data)	Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter				2018				2017

Tangible book value per common share reconciliation
Total shareholders’ equity	$	316,770			$	307,059			$	308,425			$	324,754			$	319,435			$	316,770			$	319,435
Intangible assets	(23,662		)		(24,050		)		(24,393		)		(24,760		)		(25,151		)		(23,662		)		(25,151		)
Total tangible common equity	$	293,108			$	283,009			$	284,032			$	299,994			$	294,284			$	293,108			$	294,284
Common shares outstanding	26,102,217				25,772,208				25,712,909				25,716,418				25,654,521				26,102,217				25,654,521
Book value per common share - GAAP	$	12.14			$	11.91			$	11.99			$	12.63			$	12.45			$	12.14			$	12.45
Tangible book value	11.23				10.98				11.05				11.67				11.47				11.23				11.47

Return on average equity reconciliation
Net income (loss) - GAAP	$	8,151			$	5,038			$	(15,337	)		$	4,052			$	4,329			$	13,189			$	7,559
Gain on sale of trust company, net of income tax	(1,261		)		—				—				—				—				(1,261		)		—
Revaluation of net deferred tax asset	—				—				17,398				—				—				—				—
Operating net income	$	6,890			$	5,038			$	2,061			$	4,052			$	4,329			$	11,928			$	7,559
Average shareholders' equity	$	312,543			$	306,821			$	326,059			$	323,832			$	316,825			$	309,698			$	312,567
Return on average equity - GAAP	10.46			%	6.66			%	(18.66		)	%	4.96			%	5.48			%	8.59			%	4.88			%
Return on average equity - operating	8.84				6.66				2.51				4.96				5.48				7.77				4.88

Return on average assets reconciliation
Net income (loss) - GAAP	$	8,151			$	5,038			$	(15,337	)		$	4,052			$	4,329			$	13,189			$	7,559
Gain on sale of trust company, net of income tax	(1,261		)		—				—				—				—				(1,261		)		—
Revaluation of net deferred tax asset	—				—				17,398				—				—				—				—
Operating net income	$	6,890			$	5,038			$	2,061			$	4,052			$	4,329			$	11,928			$	7,559
Average assets	$	2,718,071			$	2,704,822			$	2,720,070			$	2,701,387			$	2,762,389			$	2,711,483			$	2,728,739
Return on average assets - GAAP	1.20			%	0.76			%	(2.24		)	%	0.60			%	0.63			%	0.98			%	0.56			%
Return on average assets - operating	1.02				0.76				0.30				0.60				0.63				0.89				0.56

Efficiency ratio reconciliation
Noninterest income - GAAP	$	5,331			$	3,983			$	3,568			$	3,477			$	5,287			$	9,314			$	9,144
Gain on sale of trust company	(1,681		)		—				—				—				—				(1,681		)		—
Operating noninterest income	$	3,650			$	3,983			$	3,568			$	3,477			$	5,287			$	7,633			$	9,144
Noninterest expense - GAAP	$	17,361			$	18,392			$	20,594			$	17,504			$	17,623			$	35,753			$	35,367
Net interest income	$	22,014			$	21,517			$	21,109			$	20,291			$	20,489			$	43,531			$	39,742
Efficiency ratio	67.65			%	72.13			%	83.45			%	73.65			%	68.37			%	69.88			%	72.35			%

Tangible common equity to tangible assets reconciliation
Total shareholders’ equity	$	316,770			$	307,059			$	308,425			$	324,754			$	319,435			$	316,770			$	319,435
Intangible assets	(23,662		)		(24,050		)		(24,393		)		(24,760		)		(25,151		)		(23,662		)		(25,151		)
Total tangible common equity	$	293,108			$	283,009			$	284,032			$	299,994			$	294,284			$	293,108			$	294,284

Total assets	$	2,690,674			$	2,718,665			$	2,891,421			$	2,638,412			$	2,702,575			$	2,690,674			$	2,702,575
Intangible assets	(23,662		)		(24,050		)		(24,393		)		(24,760		)		(25,151		)		(23,662		)		(25,151		)
Total tangible assets	$	2,667,012			$	2,694,615			$	2,867,028			$	2,613,652			$	2,677,424			$	2,667,012			$	2,677,424
Tangible common equity to tangible assets	10.99			%	10.50			%	9.91			%	11.48			%	10.99			%	10.99			%	10.99			%

Atlantic Capital Bancshares, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 25, 2018

Attached files

Atlantic Capital Bancshares, Inc. Reports