ATLANTA, Oct. 27, 2017 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) announced results of the quarter ended September 30, 2017.

Third Quarter Highlights

• Reported net income of $4.1 million, or $0.16 per diluted share, compared to $4.3 million, or $0.17 per diluted share, in the second quarter of 2017.
• Reported return on average assets of 0.60% and tangible book value per share of $11.67. 
• Excluding the impact of purchase accounting, reported taxable equivalent net interest margin of 3.20%, up 5 basis points from the second quarter of 2017.
• Lowered noninterest expense to $17.5 million from $17.6 million in the second quarter of 2017.
• Decreased nonperforming assets to 0.23% of total assets from 0.52% in the second quarter of 2017.

“Atlantic Capital’s earnings this quarter fell short of our expectations for a variety of reasons, including exceptionally large, unanticipated loan repayments and one time expenses related to the secondary offering in August. Our board and new leadership team are working together to develop and implement new revenue and cost savings initiatives designed to accelerate performance improvement in 2018 and beyond,” explained Douglas Williams, Chief Executive Officer.

Results of Operations

For the third quarter of 2017, Atlantic Capital recorded net income of $4.1 million, or $0.16 per diluted share, compared to net income of $4.3 million, or $0.17 per diluted share, in the second quarter of 2017.

Taxable equivalent net interest income decreased to $20.5 million in the third quarter of 2017 from $20.7 million in the second quarter of 2017. This decrease was driven by lower loan accretion income and an increase in the cost of interest bearing deposits. Net accretion income on acquired loans totaled $343,000 in the third quarter of 2017 compared to $629,000 in the second quarter of 2017.

Taxable equivalent net interest margin was 3.26% in the third quarter of 2017, unchanged from the second quarter of 2017. Excluding the impact of purchase accounting, the margin in the third quarter of 2017 increased 5 basis points to 3.20%, benefiting from the increase in the Fed Funds rate in June 2017. Loan yields, excluding loan accretion income, increased 10 basis points and the cost of deposits increased 4 basis points in the third quarter. The accretion of the acquired loan discount and amortization of time deposit premium contributed 6 basis points to the net interest margin in the third quarter of 2017 compared to 11 basis points in the second quarter of 2017.

The provision for loan losses was $322,000 in the third quarter of 2017 compared to $2.0 million in the second quarter of 2017. The second quarter of 2017 included the downgrade of a $7.7 million loan relationship to nonperforming and an additional $1.0 million specific reserve related to this downgrade. The third quarter included a $3.3 million charge-off of this loan relationship which had a $2.75 million total specific reserve as of June 30, 2017.

Noninterest income totaled $3.5 million in the third quarter of 2017, a decrease of $1.8 million from the second quarter of 2017. The second quarter of 2017 included a $302,000 gain on the sale of the Cleveland branch, a $240,000 gain on sale of other real estate, and a $426,000 gain on the sale of a tax credit investment. In addition, SBA lending activities decreased $283,000 from the second quarter of 2017, to $888,000.

Noninterest expense totaled $17.5 million in the third quarter of 2017 compared to $17.6 million in the second quarter of 2017. The second quarter of 2017 included $304,000 in merger expenses related to rebranding of the legacy First Security branches. The third quarter of 2017 included $395,000 in expenses related to the public offering of common stock by a selling stockholder completed during the quarter. Salaries and employee benefits decreased in the third quarter of 2017 by $194,000 to $10.4 million mainly from a lower incentive accrual.

Total loans were $1.91 billion at September 30, 2017, a decrease of $55.1 million from June 30, 2017. Loans held for investment were $1.91 billion at September 30, 2017, a decrease of $56.7 million from June 30, 2017 mainly as a result of higher loan payoffs and decreases in the balances of existing lines of credit. Mortgage warehouse participations decreased $6.4 million in the third quarter to $41.6 million at September 30, 2017.

At September 30, 2017, the allowance for loan losses was $18.9 million, or 0.99% of loans held for investment, compared to $21.9 million, or 1.11% of loans held for investment as of June 30, 2017. The decrease in the allowance was the result of the $3.3 million charge-off of the $7.7 million loan relationship which had a $2.75 million specific impairment as of June 30, 2017.

Annualized net charge-offs to average loans totaled 0.68% in the third quarter of 2017 and totaled 0.32% the first nine months of 2017. Nonperforming assets totaled $6.0 million, or 0.23% of total assets, as of September 30, 2017, compared to $14.1 million, or 0.52% of total assets, as of June 30, 2017, primarily as a result of the $3.3 million charge-off of the $7.7 million loan relationship.

Total average deposits for the third quarter of 2017 were $2.12 billion, a decrease of $37.4 million from the second quarter of 2017. Average noninterest bearing deposits increased $1.7 million to $628 million in the third quarter of 2017 and accounted for 29.6% of average total deposits. Average deposits associated with our payments business were $210 million in the third quarter of 2017, a decrease of $34.3 million from the second quarter of 2017.

Earnings Conference Call

The Company will host a conference call at 10:00 a.m. EST on Friday, October 27, 2017, to discuss the financial results for the quarter ended September 30, 2017. 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 non-interest expense; (iii) operating non-interest income; (iv) taxable equivalent interest income; (v) taxable equivalent net interest margin; (vi) efficiency ratio; (vii) operating return on average assets; (viii) operating return on average equity; and (ix) tangible common equity, in its analysis of the Company's performance. Operating net income excludes the following from net income available to common shareholders: merger and conversion costs, net gains on branch sales, and the income tax effect of adjustments. Operating non-interest expense excludes merger and conversion costs from non-interest expense as well as costs related to the sale of branches. The efficiency ratio excludes merger and conversion costs. 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 “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 $2.6 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers banking, treasury management, capital markets, trust, and mortgage services to privately held companies and individuals in Atlanta, eastern Tennessee, northwest Georgia and Charlotte, North Carolina. Atlantic Capital also provides specialized financial services to select clients nationally.

ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
		2017													2016								For the nine months ended September 30,
(in thousands, except share and per share data; taxable equivalent)		Third Quarter					Second Quarter				First Quarter				Fourth Quarter				Third Quarter				2017					2016
INCOME SUMMARY
Interest income (1)		$	24,566				$	24,545			$	22,716			$	22,530			$	22,428			$	71,827				$	66,171
Interest expense		4,060					3,833				3,208				3,029				2,941				11,101					8,480
Net interest income		20,506					20,712				19,508				19,501				19,487				60,726					57,691
Provision for loan losses		322					1,980				634				2,208				463				2,936					1,608
Net interest income after provision for loan losses		20,184					18,732				18,874				17,293				19,024				57,790					56,083
Operating noninterest income (2)		3,477					5,287				3,857				4,430				4,002				12,621					13,417
Operating noninterest expense (3)		17,504					17,623				17,744				18,571				16,717				52,871					51,662
Operating income before income taxes		6,157					6,396				4,987				3,152				6,309				17,540					17,838
Operating income tax expense		2,105					2,067				1,757				1,417				2,245				5,929					6,691
Operating net income (2)(3)		4,052					4,329				3,230				1,735				4,064				11,611					11,147
Merger related expenses, net of income tax		—					—				—				126				356				—					1,559
Net gain on sale of branches, net of income tax		—					—				—				—				—				—					2,198
Net income - GAAP		$	4,052				$	4,329			$	3,230			$	1,609			$	3,708			$	11,611				$	11,786
PER SHARE DATA
Diluted earnings per share - GAAP		$	0.16				$	0.17			$	0.13			$	0.06			$	0.15			$	0.45				$	0.47
Diluted earnings per share - operating (2)(3)		0.16					0.17				0.13				0.07				0.16				0.45					0.44
Book value per share		12.63					12.45				12.18				12.10				12.36				12.63					12.36
Tangible book value per share (4)		11.67					11.47				11.16				11.05				11.29				11.67					11.29
PERFORMANCE MEASURES
Return on average equity - GAAP		4.96			%		5.48			%	4.19			%	2.09			%	4.84			%	4.91			%		5.25			%
Return on average equity - operating (2)(3)		4.96					5.48				4.19				2.25				5.30				4.91					4.97
Return on average assets - GAAP		0.60					0.63				0.48				0.24				0.55				0.57					0.58
Return on average assets - operating (2)(3)		0.60					0.63				0.48				0.25				0.60				0.57					0.55
Taxable equivalent net interest margin		3.26					3.26				3.20				3.11				3.12				3.24					3.11
Efficiency ratio		73.65					68.37				76.78				78.33				71.57				72.77					72.92
CAPITAL
Average equity to average assets		11.99			%		11.47			%	11.44			%	11.33			%	11.28			%	11.63			%		11.06			%
Tangible common equity to tangible assets		11.48					10.99				10.27				10.27				10.30				11.48					10.30
Tier 1 capital ratio		11.2			(6	)	10.9				10.7				10.3				9.7				11.2			(6	)	9.7
Total risk based capital ratio		14.2			(6	)	14.0				13.8				13.3				12.5				14.2			(6	)	12.5
Number of common shares outstanding - basic		25,716,418					25,654,521				25,535,013				25,093,135				24,950,099				25,716,418					24,950,099
Number of common shares outstanding - diluted		25,967,575					25,931,671				25,836,809				25,673,841				25,342,883				25,967,575					25,342,883
ASSET QUALITY
Allowance for loan losses to loans held for investment		0.99			%		1.11			%	1.05			%	1.04			%	0.92			%	0.99			%		0.92			%
Net charge-offs to average loans (5)		0.68					0.01				0.26				0.03				0.06				0.32					0.13
NPAs to total assets		0.23					0.52				0.21				0.13				0.09				0.23					0.09
(1)Interest income on tax-exempt securities 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. (4)Excludes effect of acquisition related intangibles. (5)Annualized. (6)Amounts are estimates as of 9/30/17.

ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
		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
Investment 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 Statements of Income (unaudited)
(in thousands, except share and per share data)		Three months ended																				Nine months ended
		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

ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
		Three months ended
		September 30, 2017												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		$	69,839			$	216			1.23		%		$	85,935			$	233			1.09		%
Other short-term investments		13,830				67				1.92				23,683				117				1.98
Investment securities:
Taxable investment securities		373,087				1,812				1.93				373,170				1,862				2.00
Non-taxable investment securities(1)		82,781				701				3.36				81,920				716				3.51
Total investment securities		455,868				2,513				2.19				455,090				2,578				2.27
Total loans		1,934,505				21,491				4.41				1,962,374				21,361				4.37
FHLB and FRB stock		18,494				279				5.99				19,352				256				5.31
Total interest-earning assets		2,492,536				24,566				3.91				2,546,434				24,545				3.87
Non-earning assets		208,851												215,955
Total assets		$	2,701,387											$	2,762,389
Liabilities
Interest bearing deposits:
NOW, money market, and savings		1,192,664				1,886				0.63				1,183,744				1,641				0.56
Time deposits		143,862				292				0.81				149,898				270				0.72
Brokered deposits		156,708				515				1.30				198,703				570				1.15
Total interest-bearing deposits		1,493,234				2,693				0.72				1,532,345				2,481				0.65
Total borrowings		179,808				543				1.20				214,931				528				0.99
Total long-term debt		49,465				824				6.61				49,423				824				6.69
Total interest-bearing liabilities		1,722,507				4,060				0.94				1,796,699				3,833				0.86
Demand deposits		628,029												626,330
Other liabilities		27,019												22,535
Shareholders' equity		323,832												316,825
Total liabilities and shareholders' equity		$	2,701,387											$	2,762,389
Net interest spread										2.97		%										3.01		%
Net interest income and net interest margin(2)						$	20,506			3.26		%						$	20,712			3.26		%
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 35%, reflecting the statutory federal income tax rate.
(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.

		Three months ended
		September 30, 2017							June 30, 2017
(dollars in thousands; taxable equivalent)		Amount				Yield			Amount				Yield
Reported interest income on loans		$	21,491			4.41	%		$	21,361			4.37	%
Less:  accretion of loan acquisition discounts		(343		)					(629		)
Core interest income on loans		$	21,148			4.34	%		$	20,732			4.24	%
		Amount				Net Interest  Margin			Amount				Net Interest  Margin
Net interest income / net interest margin		$	20,506			3.26	%		$	20,712			3.26	%
Less:
Accretion of loan acquisition discounts		(343		)					(629		)
Accretion of time deposit premium		(75		)					(86		)
Net interest income / net interest margin excluding purchase accounting		$	20,088			3.20	%		$	19,997			3.15	%

ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
		Nine months ended
		September 30, 2017												September 30, 2016
(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		$	76,079			$	614			1.08		%		$	100,279			$	481			0.64		%
Other short-term investments		16,198				231				1.91				24,120				244				1.35
Investment securities:
Taxable investment securities		362,080				5,197				1.92				337,263				3,714				1.47
Non-taxable investment securities(1)		81,485				2,167				3.56				34,945				768				2.94
Total investment securities		443,565				7,364				2.22				372,208				4,482				1.61
Total loans		1,948,700				62,846				4.31				1,965,092				60,418				4.11
FHLB and FRB stock		19,147				772				5.39				13,825				546				5.28
Total interest-earning assets		2,503,689				71,827				3.84				2,475,524				66,171				3.57
Non-earning assets		215,830												229,146
Total assets		$	2,719,519											$	2,704,670
Liabilities
Interest bearing deposits:
NOW, money market, and savings		1,171,369				4,842				0.55				1,182,520				3,646				0.41
Time deposits		152,190				833				0.73				221,937				654				0.39
Brokered deposits		182,195				1,546				1.13				210,803				1,170				0.74
Total interest-bearing deposits		1,505,754				7,221				0.64				1,615,260				5,470				0.45
Total borrowings		196,352				1,409				0.96				156,148				553				0.47
Total long-term debt		49,423				2,471				6.68				49,254				2,457				6.66
Total interest-bearing liabilities		1,751,529				11,101				0.85				1,820,662				8,480				0.62
Demand deposits		624,923												549,217
Other liabilities		26,706												35,743
Shareholders' equity		316,361												299,048
Total liabilities and shareholders' equity		$	2,719,519											$	2,704,670
Net interest spread										2.99		%										2.95		%
Net interest income and net interest margin(2)						$	60,726			3.24		%						$	57,691			3.11		%
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 35%, reflecting the statutory federal income tax rate.
(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.

		Nine months ended
		September 30, 2017							September 30, 2016
(dollars in thousands; taxable equivalent)		Amount				Yield			Amount				Yield
Reported interest income on loans		$	62,846			4.31	%		$	60,418			4.11	%
Less:  accretion of loan acquisition discounts		(1,729		)					(1,987		)
Core interest income on loans		$	61,117			4.19	%		$	58,431			3.97	%
		Amount				Net Interest  Margin			Amount				Net Interest  Margin
Net interest income / net interest margin		$	60,726			3.24	%		$	57,691			3.11	%
Less:
Accretion of loan acquisition discounts		(1,729		)					(1,987		)
Accretion of time deposit premium		(280		)					(712		)
Net interest income / net interest margin excluding purchase accounting		$	58,717			3.14	%		$	54,992			2.97	%

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Loans
(dollars in thousands)		September 30,  2017				June 30,  2017				March 31, 2017				December 31,  2016				September 30,  2016				Linked Quarter   Change				Year Over Year Change
Loans held for sale
Loans held for sale		$	3,274			$	1,744			$	1,297			$	4,302			$	46,600			$	1,530			$	(43,326	)
Branch loans held for sale		—				—				27,944				30,917				—				—				—
Total loans held for sale		$	3,274			$	1,744			$	29,241			$	35,219			$	46,600			$	1,530			$	(43,326	)
Loans held for investment
Commercial loans:
Commercial and industrial		$	562,426			$	578,888			$	544,911			$	531,061			$	533,632			$	(16,462	)		$	28,794
Commercial real estate:
Multifamily		91,219				113,571				108,215				68,223				74,881				(22,352		)		16,338
Owner occupied		348,447				351,733				348,888				352,523				337,277				(3,286		)		11,170
Investment		505,188				517,571				478,485				438,032				451,125				(12,383		)		54,063
Construction and land:
1-4 family residential construction		9,644				11,711				11,799				10,335				11,273				(2,067		)		(1,629		)
Other construction, development, and land		122,436				113,347				123,838				209,017				202,063				9,089				(79,627		)
Mortgage warehouse loans		41,551				47,992				58,357				147,519				171,251				(6,441		)		(129,700		)
Total commercial loans		1,680,911				1,734,813				1,674,493				1,756,710				1,781,502				(53,902		)		(100,591		)
Residential:
Residential mortgages		101,976				101,798				99,665				101,921				100,046				178				1,930
Home equity		78,773				79,769				81,438				77,358				78,952				(996		)		(179		)
Total residential loans		180,749				181,567				181,103				179,279				178,998				(818		)		1,751
Consumer		31,750				31,981				32,525				27,338				30,453				(231		)		1,297
Other		16,106				18,013				17,611				21,565				20,736				(1,907		)		(4,630		)
		1,909,516				1,966,374				1,905,732				1,984,892				2,011,689				(56,858		)		(102,173		)
Less net deferred fees and other unearned income		(4,084		)		(4,283		)		(4,008		)		(3,562		)		(3,587		)		199				(497		)
Total loans held for investment		$	1,905,432			$	1,962,091			$	1,901,724			$	1,981,330			$	2,008,102			$	(56,659	)		$	(102,670	)
Total loans		$	1,908,706			$	1,963,835			$	1,930,965			$	2,016,549			$	2,054,702			$	(55,129	)		$	(145,996	)

ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Loan Losses Activity and Credit Quality
		2017												2016
(dollars in thousands)		Third Quarter				Second Quarter				First Quarter				Fourth Quarter				Third Quarter
Balance at beginning of period		$	21,870			$	19,939			$	20,595			$	18,534			$	18,377
Provision for loan losses		314				2,048				565				2,134				463
Provision for PCI loan losses		8				(68		)		69				74				—
Loans charged-off:
Commercial and industrial		(3,292		)		—				(781		)		—				(61		)
Commercial real estate		—				—				(132		)		24				(226		)
Construction and land		(16		)		—				—				—				—
Residential mortgages		—				—				(46		)		—				—
Home equity		(31		)		(8		)		—				—				(9		)
Consumer		(7		)		(57		)		(332		)		(158		)		(60		)
Other		—				—				—				—				(5		)
Total loans charged-off		(3,346		)		(65		)		(1,291		)		(134		)		(361		)
Recoveries on loans previously charged‑off:
Construction and land		15				—				—				—				12
Commercial and industrial		1				7				—				—				2
Commercial real estate		—				2				—				(15		)		20
Residential mortgages		—				1				—				—				5
Home equity		—				1				—				—				2
Consumer		8				5				1				2				12
Other		—				—				—				—				2
Total recoveries		24				16				1				(13		)		55
Net charge-offs		(3,322		)		(49		)		(1,290		)		(147		)		(306		)
Balance at period end		$	18,870			$	21,870			$	19,939			$	20,595			$	18,534
Loans held for investment
PCI Loans		$	12,090			$	11,510			$	11,841			$	15,253			$	17,237
Non-PCI Loans		1,893,342				1,950,581				1,889,883				1,966,077				1,990,865
		$	1,905,432			$	1,962,091			$	1,901,724			$	1,981,330			$	2,008,102
Non-performing loans - PCI		$	1,289			$	1,310			$	1,684			$	2,446			$	2,348
Non-performing loans - Non-PCI		$	4,553			$	12,300			$	3,983			$	1,615			$	790
Foreclosed properties (OREO)		1,494				1,819				1,869				1,872				1,727
Total nonperforming assets		$	6,047			$	14,119			$	5,852			$	3,487			$	2,517
Allowance for loan losses to loans held for investment		0.99			%	1.11			%	1.05			%	1.04			%	0.92			%
Net charge-offs to average loans (1)		0.68				0.01				0.26				0.03				0.06
Nonperforming loans as a percentage of total loans (2)		0.24				0.63				0.21				0.08				0.04
Nonperforming assets as a percentage of total assets (2)		0.23				0.52				0.21				0.13				0.09
(1)Annualized.  (2)Excludes non-performing PCI loans.

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits
(dollars in thousands)		September 30,  2017				June 30, 2017				March 31, 2017				December 31,  2016				September 30,  2016				Linked Quarter Change				Year Over Year Change
DDA		$	599,292			$	612,744			$	606,386			$	643,471			$	557,783			$	(13,452	)		$	41,509
NOW		270,740				250,254				259,760				264,062				260,531				20,486				10,209
Savings		30,131				30,170				30,756				27,932				29,658				(39		)		473
Money Market		865,238				882,824				916,390				912,493				974,072				(17,586		)		(108,834		)
Time		144,250				142,915				150,867				157,810				172,348				1,335				(28,098		)
Brokered		193,994				195,047				209,385				200,223				194,464				(1,053		)		(470		)
Deposits to be assumed in branch sale		—				—				29,495				31,589				—				—				—
Total Deposits		$	2,103,645			$	2,113,954			$	2,203,039			$	2,237,580			$	2,188,856			$	(10,309	)		$	(85,211	)
Payments Clients		$	239,079			$	250,104			$	321,899			$	347,833			$	212,049			$	(11,025	)		$	27,030
Average Deposits(1)
		2017												2016								Linked Quarter Change				Year Over   Year Change
(dollars in thousands)		Third Quarter				Second Quarter				First Quarter				Fourth Quarter				Third Quarter
DDA		$	628,029			$	626,330			$	620,325			$	591,166			$	555,008			$	1,699			$	73,021
NOW		291,810				293,160				290,862				253,187				282,701				(1,350		)		9,109
Savings		30,236				30,468				30,306				29,741				30,692				(232		)		(456		)
Money Market		870,618				860,116				815,920				853,281				923,435				10,502				(52,817		)
Time		143,862				149,898				163,021				169,677				175,135				(6,036		)		(31,273		)
Brokered		156,708				198,703				191,558				197,833				196,598				(41,995		)		(39,890		)
Total Deposits		$	2,121,263			$	2,158,675			$	2,111,992			$	2,094,885			$	2,163,569			$	(37,412	)		$	(42,306	)
Payments Clients		$	209,851			$	244,157			$	273,630			$	211,000			$	184,895			$	(34,306	)		$	24,956
Noninterest bearing deposits as a percentage of average deposits		29.6		%		29.0		%		29.4		%		28.2		%		25.7		%
Cost of deposits		0.50		%		0.46		%		0.39		%		0.37		%		0.36		%
(1) Includes average balances of deposits to be assumed in branch sale.

ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
(in thousands, except share and per share data)		2017												2016								For the nine months ended September 30,
		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
Taxable equivalent net interest margin excluding purchase accounting
Taxable equivalent net interest margin		3.26			%	3.26			%	3.20			%	3.11			%	3.12			%	3.24			%	3.11			%
Impact of purchase accounting		(0.06		)		(0.11		)		(0.13		)		(0.12		)		(0.12		)		(0.10		)		(0.14		)
Taxable equivalent net interest margin excluding purchase accounting		3.20			%	3.15			%	3.07			%	2.99			%	3.00			%	3.14			%	2.97			%
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
Tangible book value per common share 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
Common shares outstanding		25,716,418				25,654,521				25,535,013				25,093,135				24,950,099				25,716,418				24,950,099
Book value per common share - GAAP		$	12.63			$	12.45			$	12.18			$	12.10			$	12.36			$	12.63			$	12.36
Tangible book value		11.67				11.47				11.16				11.05				11.29				11.67				11.29
Return on average equity 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
Average shareholders' equity		$	323,832			$	316,825			$	308,261			$	308,588			$	306,642			$	316,361			$	299,048
Return on average equity - GAAP		4.96			%	5.48			%	4.19			%	2.09			%	4.84			%	4.91			%	5.25			%
Return on average equity - operating		4.96				5.48				4.19				2.25				5.30				4.91				4.97
Return on average assets 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
Average assets		$	2,701,387			$	2,762,389			$	2,694,715			$	2,722,444			$	2,717,996			$	2,719,519			$	2,704,670
Return on average assets - GAAP		0.60			%	0.63			%	0.48			%	0.24			%	0.55			%	0.57			%	0.58			%
Return on average assets - operating		0.60				0.63				0.48				0.25				0.60				0.57				0.55
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			%

Contact:

Douglas L. Williams
Chief Executive Officer
404-995-6051
doug.williams@atlcapbank.com

Patrick T. Oakes
Executive Vice President and CFO
404-995-6079
patrick.oakes@atlcapbank.com

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