ATLANTA, July 23, 2020 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income from continuing operations for the quarter ended June 30, 2020 of $1.8 million, or $0.09 per diluted share, compared to $7.0 million, or $0.29 per diluted share, for the second quarter of 2019 and $2.1 million, or $0.10 per diluted share, for the first quarter of 2020.

“With solid growth in loans and deposits, a significant decline in deposit costs, and disciplined expense management, Atlantic Capital grew earnings before taxes and provision for potential credit losses at a strong pace from the first quarter of 2020 and from the second quarter of 2019. These solid operating results, along with another substantial addition to the allowance for credit losses, further buttress Atlantic Capital’s fortress balance sheet for the uncertain economic environment ahead. As the second quarter progressed, our borrowers generally reported improved business results and are cautiously optimistic about the remainder of 2020,” remarked Douglas Williams, President and Chief Executive Officer.

Second Quarter Highlights⁽¹⁾

• Capital ratios remained strong, with a tangible common equity to tangible assets ratio of 11.0% and total risk-based capital ratio of 14.8%.
• Tangible book value per share increased to $14.72 from $14.54 at March 31, 2020.
• Total loans held for investment increased $251.8 million, or 52.1% annualized, from March 31, 2020. Included in the increase are $234 million in SBA Paycheck Protection Program (“PPP”) loans.
• Average deposits from continuing operations increased $155.4 million, or 27.6% annualized, compared to the first quarter of 2020.
• Cost of deposits from continuing operations decreased to 0.22% from 0.75% in the first quarter of 2020.
• Efficiency ratio improved to 53.8% compared to 55.0% in the first quarter of 2020.
• Allowance for credit losses increased to 1.61% of loans held for investment compared to 1.43% at March 31, 2020. Excluding the impact of PPP loans, the allowance for credit losses at June 30, 2020 was 1.80% of total loans held for investment.

Income Statement

Taxable equivalent net interest income from continuing operations totaled $22.0 million for the second quarter of 2020, an increase of $2.0 million, or 10.1%, from the second quarter of 2019, and an increase of $782,000, or 14.8% annualized, from the first quarter of 2020. The linked quarter increase in net interest income was primarily driven by the addition of the PPP loans during the second quarter.

Taxable equivalent net interest margin from continuing operations was 3.23% in the second quarter of 2020, a decrease of 38 basis points from the second quarter of 2019 and a decrease of 18 basis points from the first quarter of 2020. The linked quarter decrease was primarily the result of a decrease in loan yields and the addition of the lower yielding PPP loans, partially offset by a decrease in the cost of interest bearing deposits. The PPP loans had an adverse impact of approximately 14 basis points on the net interest margin for the second quarter of 2020.

The yield on loans from continuing operations in the second quarter of 2020 was 3.87%, a decrease of 147 basis points from the second quarter of 2019 and a decrease of 90 basis points from the first quarter of 2020. The decrease in loan yields was due primarily to the repricing of variable rate loans from declines in short term interest rates and the addition of lower yielding PPP loans. The PPP loans had an adverse impact of approximately 22 basis points on loan yields for the second quarter of 2020.

The cost of deposits from continuing operations in the second quarter of 2020 was 0.22%, a decrease of 93 basis points from the second quarter of 2019 and a decrease of 53 basis points from the first quarter of 2020. The cost of interest bearing deposits from continuing operations decreased 133 basis points to 0.33% from the second quarter of 2019, and decreased 76 basis points from the first quarter of 2020.

⁽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. We provide detailed reconciliations in the Non-GAAP Performance and Financial Measures Reconciliation table on page 13.

The provision for credit losses for continuing operations was $8.9 million in the second quarter of 2020 compared to $698,000 in the second quarter of 2019 and $8.1 million in the first quarter of 2020. The provision for credit losses in the second quarter of 2020 included an $8.2 million provision for loan losses and a $642,000 provision for unfunded commitments. Annualized net charge-offs were 0.29% of average loans in the second quarter of 2020 and 0.17% for the first six months of 2020.

Noninterest income from continuing operations totaled $2.3 million in the second quarter of 2020 compared to $2.9 million in the second quarter of 2019 and $2.4 million in the first quarter of 2020. Service charge income in the second quarter of 2020 totaled $1.1 million, an increase of $211,000 compared to the second quarter of 2019 and a decrease of $151,000 from the first quarter of 2020. The linked-quarter decrease in service charge income was primarily due to the COVID-19 related impact on ACH volumes in our payments business. SBA income totaled $768,000, a decrease from $1.10 million in the second quarter of 2019 and an increase from $414,000 in the first quarter of 2020, primarily from an increase in loans sold during the second quarter of 2020.

Noninterest expense from continuing operations totaled $12.9 million in the second quarter of 2020, a decrease of $350,000 compared to the second quarter of 2019 and unchanged compared to the first quarter of 2020. Salaries and employee benefits totaled $8.5 million in the second quarter of 2020, unchanged from the previous quarter as the seasonal decrease in first quarter benefits costs were offset by higher salaries and an increase in incentive accruals. Approximately $293,000 in incentive expense was incurred in the second quarter of 2020 related to COVID-19 pay for employees.

The year-to-date 2020 effective tax rate from continuing operations was 14.7% compared to 21.3% for the full year of 2019, and was impacted by lower pretax earnings as well as increased non-taxable securities income from municipal bonds.

Balance Sheet

Total loans held for investment were $2.18 billion at June 30, 2020, an increase of $395.0 million, or 22.0%, from June 30, 2019 and an increase of $251.8 million, or 52.1% annualized, from March 31, 2020. Excluding the $234.0 million in PPP loans funded during the second quarter of 2020, loans held for investment increased $17.7 million, or 3.7% annualized. Consumer loans increased $55.0 million from March 31, 2020 to $113.1 million at June 30, 2020, due to the growth in a partnership with a fintech firm that offers CD-secured loans to its customers.

The allowance for credit losses was 1.61% of total loans held for investment at June 30, 2020, compared to 1.43% at March 31, 2020. Excluding the impact of PPP loans, the allowance for credit losses at June 30, 2020 was 1.80% of total loans held for investment. Non-performing assets totaled $7.2 million, or 0.25% of total assets, as of June 30, 2020, compared to $7.3 million, or 0.27% of total assets, as of March 31, 2020.

Total average deposits from continuing operations were $2.41 billion for the second quarter of 2020, an increase of $507.9 million, or 26.7%, from the second quarter of 2019 and an increase of $155.5 million, or 27.6% annualized, from the first quarter of 2020. Noninterest bearing deposits were 33.8% of total average deposits from continuing operations in the second quarter of 2020, compared to 30.9% in the second quarter of 2019 and 31.6% in the first quarter of 2020.

Tangible common equity to tangible assets was 11.0% at June 30, 2020, a decrease from 11.6% at March 31, 2020 due to the increase in PPP loans in the second quarter. The estimated total risk based capital ratio was 14.8% at June 30, 2020 compared to 16.5% at June 30, 2019 and 14.9% at March 31, 2020.

Earnings Conference Call

The Company will host a conference call at 9:00 a.m. EST on Friday, July 24, 2020, to discuss the financial results for the quarter ended June 30, 2020. Individuals wishing to participate in the conference call may do so by dialing 877-270-2148 from the United States. The call will also be available live via webcast on the Investor Relations page of the Company's website, www.atlanticcapitalbank.com. A presentation will be used during the earnings conference call and is available at http://www.snl.com/IRW/CorporateProfile/4155740.

Non-GAAP Financial Measures

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) taxable equivalent interest income; (ii) taxable equivalent net

interest income; (iii) taxable equivalent net interest margin; (iv) taxable equivalent income before income taxes; (v) taxable equivalent income tax expense; (vi) tangible assets; (vii) tangible common equity; (viii) tangible book value per common share; and (ix) allowance for loan losses to loans held for investment excluding PPP loans, in its analysis of the Company's performance. Tangible common equity excludes goodwill and other intangible assets from shareholders' equity.

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

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” “strive,” 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, the impact of COVID-19 on operations, 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, as supplemented by our Current Report on Form 8- K filed on April 23, 2020, 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 $2.9 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers commercial and not-for-profit banking services, specialty corporate financial services, private banking services and commercial real estate finance solutions to privately held companies and individuals in the Atlanta area, as well as specialized financial services for 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
																	For the six months ended
		2020						2019									June 30,
(in thousands, except share and per share data;		Second			First			Fourth			Third			Second
taxable equivalent)		Quarter			Quarter			Quarter			Quarter			Quarter			2020			2019
INCOME SUMMARY (1)
Interest income (2)		$	24,151		$	26,246		$	26,699		$	26,624		$	26,686		$	50,397		$	52,983
Interest expense			2,166			5,043			5,965			6,536			6,709			7,209			12,482
Net interest income			21,985			21,203			20,734			20,088			19,977			43,188			40,501
Provision for credit losses			8,863			8,074			787			413			698			16,937			1,512
Net interest income after provision for credit losses			13,122			13,129			19,947			19,675			19,279			26,251			38,989
Noninterest income			2,343			2,422			2,679			2,769			2,941			4,765			5,277
Noninterest expense			12,904			12,877			13,382			12,677			13,254			25,781			27,049
Income from continuing operations before income taxes			2,561			2,674			9,244			9,767			8,966			5,235			17,217
Income tax expense			712			550			2,104			2,198			1,957			1,262			3,768
Net income from continuing operations(2)(3)			1,849			2,124			7,140			7,569			7,009			3,973			13,449
Income (loss) from discontinued operations, net of tax			—			—			—			617			22,143			—			21,080
Net income		$	1,849		$	2,124		$	7,140		$	8,186		$	29,152		$	3,973		$	34,529
PER SHARE DATA
Diluted earnings per share - continuing operations		$	0.09		$	0.10		$	0.32		$	0.33		$	0.29		$	0.18		$	0.55
Diluted earnings (loss) per share - discontinued operations			—			—			—			0.03			0.92			—			0.86
Diluted earnings per share			0.09			0.10			0.32			0.36			1.21			0.18			1.41
Book value per share			15.64			15.47			15.01			14.81			14.46			15.64			14.46
Tangible book value per common share (3)			14.72			14.54			14.09			13.91			13.60			14.72			13.60
PERFORMANCE MEASURES
Return on average equity			2.20	%		2.56	%		8.65	%		9.77	%		34.38	%		2.38	%		21.07	%
Return on average assets			0.25			0.32			1.08			1.32			4.79			0.28			2.64
Taxable equivalent net interest margin - continuing operations			3.23			3.41			3.38			3.52			3.61			3.32			3.73
Efficiency ratio - continuing operations			53.82			55.03			57.57			55.72			58.06			54.42			59.33
Average loans to average deposits			88.46			83.84			86.54			92.41			93.05			86.23			94.82
CAPITAL
Average equity to average assets			11.53	%		12.41	%		12.47	%		13.54	%		13.94	%		11.95	%		12.55	%
Tangible common equity to tangible assets			11.01			11.57			10.61			12.92			13.37			11.01			13.37
Tier 1 capital ratio			11.6	(4)		11.7			12.0			12.5			13.4			11.6	(4)		13.4
Total risk based capital ratio			14.8	(4)		14.9			15.0			15.5			16.5			14.8	(4)		16.5
SHARES OUTSTANDING
Number of common shares outstanding - basic			21,477,631			21,479,986			21,751,026			22,193,761			23,293,465			21,477,631			23,293,465
Number of common shares outstanding - diluted			21,569,050			21,675,934			21,974,959			22,405,141			23,508,442			21,569,050			23,508,442
Average number of common shares - basic			21,472,462			21,689,038			21,876,487			22,681,904			23,888,381			21,580,855			24,369,106
Average number of common shares - diluted			21,535,040			21,842,175			22,053,907			22,837,531			24,040,806			21,688,712			24,527,392
ASSET QUALITY
Allowance for credit losses to loans held for investment (5)			1.61	%		1.43	%		1.04	%		1.03	%		1.06	%		1.61	%		1.06	%
Net charge-offs to average loans (6)			0.29			0.04			0.07			0.11			0.14			0.17			0.12
Non-performing assets to total assets			0.24			0.27			0.26			0.29			0.31			0.24			0.31
AVERAGE BALANCES
Total loans - continuing operations		$	2,131,847		$	1,890,184		$	1,857,736		$	1,801,629		$	1,769,803		$	2,011,016		$	1,708,549
Investment securities			462,850			417,971			389,667			340,872			360,047			440,410			379,964
Total assets			2,932,716			2,686,266			2,626,388			2,453,438			2,440,502			2,809,491			2,633,713
Deposits - continuing operations			2,409,958			2,254,505			2,146,626			1,949,657			1,902,076			2,332,231			1,801,874
Shareholders' equity			338,027			333,480			327,543			332,291			340,119			335,754			330,519
AT PERIOD END
Loans and loans held for sale		$	2,185,847		$	1,932,909		$	1,873,524		$	1,836,589		$	1,789,740		$	2,185,847		$	1,789,740
Investment securities			457,749			466,405			399,433			329,648			348,723			457,749			348,723
Total assets			2,890,622			2,719,658			2,910,379			2,410,198			2,389,680			2,890,622			2,389,680
Deposits			2,407,631			2,225,119			2,499,046			1,854,272			1,851,531			2,407,631			1,851,531
Shareholders’ equity			335,980			332,300			326,495			328,711			336,715			335,980			336,715
(1)On April 5, 2019, Atlantic Capital completed the sale to FirstBank of its Tennessee and northwest Georgia banking operations, including 14 branches and the mortgage business. The mortgage business and branches sold
to FirstBank are reported as discontinued operations.
(2)Interest income 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 rate.
(3)Excludes effect of acquisition related intangibles.
(4)Amounts are estimates as of June 30, 2020.
(5)The ratios for the second and third quarters of 2019 are calculated on a continuing operations basis.
(6)Annualized.

ATLANTIC CAPITAL BANCSHARES, INC.
Financial Information from Discontinued Operations
Components of Net Income from Discontinued Operations
																			For the six months ended
		2020						2019											June 30,
		Second			First			Fourth			Third				Second
(in thousands)		Quarter			Quarter			Quarter			Quarter				Quarter				2020			2019
Net interest (loss) income		$	—		$	—		$	—		$	—			$	(39	)		$	—		$	3,086
Provision for credit losses			—			—			—			—				—				—			—
Net interest (loss) income after provision			—			—			—			—				(39	)			—			3,086
Service charges			—			—			—			—				46				—			527
Mortgage income			—			—			—			—				—				—			288
Gain on sale of branches			—			—			—			—				34,475				—			34,475
Other income			—			—			—			—				(22	)			—			(1	)
Total noninterest income			—			—			—			—				34,499				—			35,289
Salaries and employee benefits			—			—			—			—				330				—			2,757
Occupancy			—			—			—			—				71				—			410
Equipment and software			—			—			—			—				8				—			131
Amortization of intangibles			—			—			—			—				—				—			247
Communications and data processing			—			—			—			—				197				—			586
Divestiture expense			—			—			—			—				3,646				—			5,095
Other noninterest expense			—			—			—			—				101				—			459
Total noninterest expense			—			—			—			—				4,353				—			9,685
Net income before provision for income taxes			—			—			—			—				30,107				—			28,690
(Benefit) provision for income taxes			—			—			—			(617	)			7,964				—			7,610
Net income from discontinued operations		$	—		$	—		$	—		$	617			$	22,143			$	—		$	21,080

ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
		June 30,				March 31,				December 31,				June 30,
(in thousands, except share data)		2020				2020				2019				2019
ASSETS
Cash and due from banks		$	33,759			$	27,536			$	45,249			$	24,206
Interest-bearing deposits in banks			33,038				114,829				421,079				52,932
Cash and cash equivalents			66,797				142,365				466,328				77,138
Investment securities available for sale			271,829				280,390				282,461				348,723
Investment securities held to maturity, net of allowance for credit losses of $13 and $14 at June 30, 2020 and March 31, 2020, respectively			185,920				186,015				116,972				—
Other investments			28,811				27,140				27,556				31,912
Loans held for sale			1,153				—				370				—
Loans held for investment			2,184,694				1,932,909				1,873,524				1,789,740
Less: allowance for loan losses			(31,605	)			(24,896	)			(18,535	)			(18,186	)
Loans held for investment, net			2,153,089				1,908,013				1,854,989				1,771,554
Premises and equipment, net			22,494				22,533				22,536				20,037
Bank owned life insurance			67,127				66,761				66,421				65,874
Goodwill - continuing operations			19,925				19,925				19,925				19,925
Other intangibles, net			2,731				2,785				3,027				3,095
Other real estate owned			779				779				278				971
Other assets			69,967				62,952				49,516				50,451
Total assets		$	2,890,622			$	2,719,658			$	2,910,379			$	2,389,680
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand		$	883,662			$	712,919			$	824,646			$	569,693
Interest-bearing checking			449,737				368,463				373,727				309,709
Savings			583				567				1,219				1,090
Money market			879,863				982,109				1,173,218				802,973
Time			131,353				66,793				44,389				33,902
Brokered deposits			62,433				94,268				81,847				134,164
Total deposits			2,407,631				2,225,119				2,499,046				1,851,531
Federal funds purchased			6,000				75,000				—				35,000
Federal Home Loan Bank borrowings			50,000				—				—				82,000
Long-term debt			49,958				49,916				49,873				49,789
Other liabilities			41,053				37,323				34,965				34,645
Total liabilities			2,554,642				2,387,358				2,583,884				2,052,965
SHAREHOLDERS’ EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2020, March 31, 2020, December 31, 2019, and June 30, 2019			—				—				—				—
Common stock, no par value; 100,000,000 shares authorized; 21,477,631, 21,479,986, 21,751,026, and 23,293,465 shares issued and outstanding as of June 30, 2020, March 31, 2020, December 31, 2019, and June 30, 2019, respectively			224,520				224,233				230,265				256,791
Retained earnings			95,570				93,721				91,669				76,343
Accumulated other comprehensive income (loss)			15,890				14,346				4,561				3,581
Total shareholders’ equity			335,980				332,300				326,495				336,715
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	2,890,622			$	2,719,658			$	2,910,379			$	2,389,680

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,				March 31,			December 31,			September 30,				June 30,				June 30,			June 30,
		2020				2020			2019			2019				2019				2020			2019
INTEREST INCOME
Loans, including fees		$	20,496			$	22,426		$	23,175		$	23,541			$	23,554			$	42,922		$	46,306
Investment securities			3,041				2,732			2,413			2,176				2,339				5,773			4,970
Interest and dividends on other interest‑earning assets			260				865			944			803				705				1,125			1,519
Total interest income			23,797				26,023			26,532			26,520				26,598				49,820			52,795
INTEREST EXPENSE
Interest on deposits			1,299				4,182			4,890			5,223				5,448				5,481			10,279
Interest on Federal Home Loan Bank advances			38				—			157			390				270				38			270
Interest on federal funds purchased and securities sold under agreements to repurchase			6				32			94			99				168				38			286
Interest on long-term debt			823				829			824			824				823				1,652			1,647
Total interest expense			2,166				5,043			5,965			6,536				6,709				7,209			12,482
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES			21,631				20,980			20,567			19,984				19,889				42,611			40,313
Provision for credit losses			8,863				8,074			787			413				698				16,937			1,512
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES			12,768				12,906			19,780			19,571				19,191				25,674			38,801
NONINTEREST INCOME
Service charges			1,081				1,232			998			925				870				2,313			1,664
Gains (losses) on sale of securities			—				—			—			253				654				—			654
Gains (losses) on sale of other assets			—				5			—			140				(10	)			5			(13	)
Derivatives income			(10	)			246			315			(293	)			(233	)			236			(344	)
Bank owned life insurance			367				362			375			422				389				729			749
SBA lending activities			782				414			846			1,150				1,096				1,196			2,182
Other noninterest income			123				163			145			172				175				286			385
Total noninterest income			2,343				2,422			2,679			2,769				2,941				4,765			5,277
NONINTEREST EXPENSE
Salaries and employee benefits			8,466				8,476			8,500			8,295				8,529				16,942			17,742
Occupancy			883				794			838			722				689				1,677			1,328
Equipment and software			763				779			769			842				753				1,542			1,492
Professional services			792				705			577			764				792				1,497			1,567
Communications and data processing			670				897			1,066			796				662				1,567			1,337
Marketing and business development			79				153			143			243				233				232			459
Travel, meals and entertainment			34				140			175			152				186				174			352
FDIC premiums			175				—			—			(193	)			175				175			410
Other noninterest expense			1,042				933			1,314			1,056				1,235				1,975			2,362
Total noninterest expense			12,904				12,877			13,382			12,677				13,254				25,781			27,049
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES			2,207				2,451			9,077			9,663				8,878				4,658			17,029
Provision for income taxes			358				327			1,937			2,094				1,869				685			3,580
NET INCOME FROM CONTINUING OPERATIONS			1,849				2,124			7,140			7,569				7,009				3,973			13,449
DISCONTINUED OPERATIONS
Income (loss) from discontinued operations		$	—			$	—		$	—		$	—			$	30,107			$	—		$	28,690
Provision (benefit) for income taxes			—				—			—			(617	)			7,964				—			7,610
Net income (loss) from discontinued operations			—				—			—			617				22,143				—			21,080
NET INCOME		$	1,849			$	2,124		$	7,140		$	8,186			$	29,152			$	3,973		$	34,529
Net Income (Loss) per Common Share - Basic
Net income per common share - continuing operations		$	0.09			$	0.10		$	0.33		$	0.33			$	0.29			$	0.18		$	0.55
Net income (loss) per common share - discontinued operations			—				—			—			0.03				0.93				—			0.87
Net Income per Common Share - Basic			0.09				0.10			0.33			0.36				1.22				0.18			1.42
Net Income (Loss) per Common Share - Diluted
Net income per common share - continuing operations		$	0.09			$	0.10		$	0.32		$	0.33			$	0.29			$	0.18		$	0.55
Net income (loss) per common share - discontinued operations			—				—			—			0.03				0.92				—			0.86
Net Income per Common Share - Diluted			0.09				0.10			0.32			0.36				1.21				0.18			1.41
Weighted average shares - basic			21,472,462				21,689,038			21,876,487			22,681,904				23,888,381				21,580,855			24,369,106
Weighted average shares - diluted			21,535,040				21,842,175			22,053,907			22,837,531				24,040,806				21,688,712			24,527,392

Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
		Three months ended
		June 30, 2020									March 31, 2020
					Interest			Tax						Interest			Tax
		Average			Income/			Equivalent			Average			Income/			Equivalent
(dollars in thousands; taxable equivalent)		Balance			Expense			Yield/Rate			Balance			Expense			Yield/Rate
Assets
Interest bearing deposits in other banks		$	129,989		$	23		0.07	%		$	177,063		$	668		1.52	%
Other short-term investments			—			—		—				110			—		—
Investment securities:
Taxable investment securities			247,668			1,581		2.57				253,937			1,680		2.66
Non-taxable investment securities(1)			215,182			1,814		3.39				164,034			1,275		3.13
Total investment securities			462,850			3,395		2.95				417,971			2,955		2.84
Loans			2,131,847			20,496		3.87				1,890,184			22,426		4.77
FHLB and FRB stock			16,842			237		5.66				12,678			197		6.25
Total interest-earning assets			2,741,528			24,151		3.54				2,498,006			26,246		4.23
Non-earning assets			191,188									188,260
Total assets		$	2,932,716								$	2,686,266
Liabilities
Interest bearing deposits:
NOW, money market, and savings			1,415,069			1,115		0.32				1,393,541			3,767		1.09
Time deposits			96,362			58		0.24				55,775			52		0.37
Brokered deposits			83,228			126		0.61				92,188			363		1.58
Total interest-bearing deposits			1,594,659			1,299		0.33				1,541,504			4,182		1.09
Total borrowings			97,769			44		0.18				11,703			32		1.10
Total long-term debt			49,930			823		6.63				49,888			829		6.68
Total interest-bearing liabilities			1,742,358			2,166		0.50				1,603,095			5,043		1.27
Demand deposits			815,299									713,001
Other liabilities			37,032									36,690
Shareholders’ equity			338,027									333,480
Total liabilities and shareholders’ equity		$	2,932,716								$	2,686,266
Net interest spread								3.04	%								2.96	%
Net interest income and net interest margin(2)					$	21,985		3.23	%					$	21,203		3.41	%
Non-taxable equivalent net interest margin								3.17	%								3.38	%
(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 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
		June 30, 2020									June 30, 2019
					Interest			Tax						Interest			Tax
		Average			Income/			Equivalent			Average			Income/			Equivalent
(dollars in thousands; taxable equivalent)		Balance			Expense			Yield/Rate			Balance			Expense			Yield/Rate
Assets
Interest bearing deposits in other banks		$	129,989		$	23		0.07	%		$	70,628		$	450		2.56	%
Other short-term investments			—			—		—				3,993			32		3.21
Investment securities:
Taxable investment securities			247,668			1,581		2.57				280,639			1,848		2.64
Non-taxable investment securities(1)			215,182			1,814		3.39				79,408			579		2.92
Total investment securities			462,850			3,395		2.95				360,047			2,427		2.70
Loans - continuing operations			2,131,847			20,496		3.87				1,769,803			23,554		5.34
FHLB and FRB stock			16,842			237		5.66				14,435			223		6.20
Total interest-earning assets - continuing operations			2,741,528			24,151		3.54				2,218,906			26,686		4.82
Loans held for sale - discontinued operations			—			—		—				30,198			47		0.62
Total interest-earning assets			2,741,528			24,151		3.54				2,249,104			26,733		4.77
Non-earning assets			191,188									191,398
Total assets		$	2,932,716								$	2,440,502
Liabilities
Interest bearing deposits:
NOW, money market, and savings			1,415,069			1,115		0.32				1,175,237			4,733		1.62
Time deposits			96,362			58		0.24				32,358			50		0.62
Brokered deposits			83,228			126		0.61				106,524			665		2.50
Total interest-bearing deposits			1,594,659			1,299		0.33				1,314,119			5,448		1.66
Total borrowings			97,769			44		0.18				70,770			438		2.48
Total long-term debt			49,930			823		6.63				49,761			823		6.63
Total interest-bearing liabilities - continuing operations			1,742,358			2,166		0.50				1,434,650			6,709		1.88
Interest-bearing liabilities - discontinued operations			—			—		—				36,255			86		0.95
Total interest-bearing liabilities			1,742,358			2,166		0.50				1,470,905			6,795		1.85
Demand deposits			815,299									587,957
Demand deposits - discontinued operations			—									9,851
Other liabilities			37,032									31,670
Shareholders’ equity			338,027									340,119
Total liabilities and shareholders’ equity		$	2,932,716								$	2,440,502
Net interest spread - continuing operations								3.04	%								2.94	%
Net interest income and net interest margin - continuing operations(2)					$	21,985		3.23	%					$	19,977		3.61	%
Net interest income and net interest margin(2)					$	21,985		3.23	%					$	19,938		3.56	%
Non-taxable equivalent net interest margin								3.17	%								3.54	%
(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 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.

ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
		Six months ended
		June 30, 2020								June 30, 2019
					Interest			Tax						Interest			Tax
		Average			Income/			Equivalent			Average			Income/			Equivalent
(dollars in thousands; taxable equivalent)		Balance			Expense			Yield/Rate			Balance			Expense			Yield/Rate
Assets
Interest bearing deposits in other banks		$	153,526		$	691		0.91	%		$	81,339		$	913		2.26	%
Other short-term investments			55			—		—				7,815			118		3.04
Investment securities:
Taxable investment securities			250,802			3,261		2.61				300,255			3,962		2.66
Non-taxable investment securities (1)			189,608			3,089		3.28				79,709			1,196		3.03
Total investment securities			440,410			6,350		2.90				379,964			5,158		2.74
Loans - continuing operations			2,011,016			42,922		4.29				1,708,549			46,306		5.47
FHLB and FRB stock			14,760			434		5.91				13,487			488		7.30
Total interest-earning assets - continuing operations			2,619,767			50,397		3.87				2,191,154			52,983		4.88
Loans held for sale - discontinued operations			—			—		-				235,384			4,588		3.93
Total interest-earning assets			2,619,767			50,397		3.87				2,426,538			57,571		4.78
Non-earning assets			189,724									207,175
Total assets		$	2,809,491								$	2,633,713
Liabilities
Interest bearing deposits:
NOW, money market, and savings			1,404,305			4,882		0.70				1,125,253			8,988		1.61
Time deposits			76,068			111		0.29				11,049			88		1.61
Brokered deposits			87,708			488		1.12				93,903			1,203		2.58
Total interest-bearing deposits			1,568,081			5,481		0.70				1,230,205			10,279		1.68
Total borrowings			54,736			76		0.28				43,798			556		2.56
Total long-term debt			49,909			1,652		6.66				49,740			1,647		6.68
Total interest-bearing liabilities - continuing operations			1,672,726			7,209		0.87				1,323,743			12,482		1.90
Interest-bearing liabilities - discontinued operations			—			—		-				290,515			1,502		1.04
Total interest-bearing liabilities			1,672,726			7,209		0.87				1,614,258			13,984		1.75
Demand deposits			764,150									571,669
Demand deposits - discontinued operations			-									79,156
Other liabilities			36,861									38,111
Shareholders’ equity			335,754									330,519
Total liabilities and shareholders’ equity		$	2,809,491								$	2,633,713
Net interest spread - continuing operations								3.00	%								2.98	%
Net interest income and net interest margin - continuing operations (2)					$	43,188		3.32	%					$	40,501		3.73	%
Net interest income and net interest margin (2)					$	43,188		3.32	%					$	43,587		3.62	%
Non-taxable equivalent net interest margin								3.27	%								3.61	%
(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 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.

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Loans
																						Linked				Year Over
		June 30,				March 31,				December 31,				September 30,				June 30,				Quarter				Year
(dollars in thousands)		2020				2020				2019				2019				2019				Change				Change
Loans held for sale
Loans held for sale		$	1,153			$	—			$	370			$	916			$	—			$	1,153			$	1,153
Total loans held for sale		$	1,153			$	—			$	370			$	916			$	—			$	1,153			$	1,153
Loans held for investment
Commercial loans:
Commercial and industrial		$	973,818			$	760,062			$	705,115			$	697,412			$	701,566			$	213,756			$	272,252
Commercial real estate:
Multifamily			58,909				73,654				98,378				60,398				43,907				(14,745	)			15,002
Owner occupied			366,847				359,026				357,912				352,842				313,310				7,821				53,537
Investment			474,565				477,451				460,038				452,285				409,629				(2,886	)			64,936
Construction and land:
1‑4 family residential construction			11				2,706				4,009				5,186				3,696				(2,695	)			(3,685	)
Other construction, development, and land			128,980				124,116				123,531				139,991				195,260				4,864				(66,280	)
Mortgage warehouse loans			—				—				13,941				23,256				10,665				—				(10,665	)
Total commercial loans			2,003,130				1,797,015				1,762,924				1,731,370				1,678,033				206,115				325,097
Residential:
Residential mortgages			32,327				31,761				31,315				31,903				31,338				566				989
Home equity			23,689				23,479				25,002				25,638				24,303				210				(614	)
Total residential loans			56,016				55,240				56,317				57,541				55,641				776				375
Consumer			113,149				58,164				37,765				27,168				34,618				54,985				78,531
Other			22,160				25,488				19,552				22,533				24,126				(3,328	)			(1,966	)
			2,194,455				1,935,907				1,876,558				1,838,612				1,792,418				258,548				402,037
Less net deferred fees and other unearned income			(9,761	)			(2,998	)			(3,034	)			(2,939	)			(2,678	)			(6,763	)			(7,083	)
Total loans held for investment		$	2,184,694			$	1,932,909			$	1,873,524			$	1,835,673			$	1,789,740			$	251,785			$	394,954
Total loans		$	2,185,847			$	1,932,909			$	1,873,894			$	1,836,589			$	1,789,740			$	252,938			$	396,107
PPP loans (1)		$	234,049			$	—			$	—			$	—			$	—			$	234,049			$	234,049
Total unfunded commitments		$	749,321			$	689,620			$	743,958			$	687,295			$	637,559			$	59,701			$	111,762
(1) PPP loans are included in total loans held for investment.

ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Credit Losses Activity and Credit Quality
		2020								2019
		Second				First				Fourth				Third				Second
(dollars in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for loan losses
Balance at beginning of period		$	24,896			$	18,535			$	18,080			$	18,186			$	18,107
Adoption of ASU 2016-13			—				(854	)			—				—				—
Provision for loan losses			8,222				7,409				787				413				698
Loans charged-off:
Commercial and industrial			(1,479	)			(18	)			(344	)			(541	)			(588	)
Commercial real estate			—				(78	)			—				—				(47	)
Construction and land			—				—				—				—				—
Residential mortgages			(36	)			—				—				—				—
Home equity			—				(125	)			—				—				—
Consumer			—				—				—				(2	)			—
Other			—				—				—				—				—
Total loans charged-off			(1,515	)			(221	)			(344	)			(543	)			(635	)
Recoveries on loans previously charged-off:
Commercial and industrial			1				—				5				17				—
Commercial real estate			—				18				—				—				—
Construction and land			—				—				—				1				—
Residential mortgages			—				1				7				—				—
Home equity			—				—				—				—				—
Consumer			1				8				—				6				16
Other			—				—				—				—				—
Total recoveries			2				27				12				24				16
Net charge-offs		$	(1,513	)		$	(194	)		$	(332	)		$	(519	)		$	(619	)
Balance at period end		$	31,605			$	24,896			$	18,535			$	18,080			$	18,186
Allowance for unfunded commitments
Balance at beginning of period		$	2,838			$	892			$	836			$	785			$	631
Adoption of ASU 2016-13			—				1,275				—				—				—
Provision for unfunded commitments			642				671				56				51				154
Balance at period end		$	3,480			$	2,838			$	892			$	836			$	785
Total allowance for credit losses - loans and unfunded commitments		$	35,085			$	27,734			$	19,427			$	18,916			$	18,971
Provision for credit losses under CECL
Provision for loan losses			8,222				7,409				787				413				698
Provision for securities held to maturity credit losses			(1	)			(6	)			-				-				-
Provision for unfunded commitments(1)			642				671				-				-				-
Total provision for credit losses		$	8,863			$	8,074			$	787			$	413			$	698
Non-performing loans		$	6,265			$	6,515			$	7,293			$	6,770			$	6,352
Foreclosed properties (OREO)			779				779				278				278				971
Total nonperforming assets		$	7,044			$	7,294			$	7,571			$	7,048			$	7,323
Allowance for loan losses to loans held for investment (2)			1.45		%		1.29		%		0.99		%		0.98		%		1.02		%
Allowance for credit losses to loans held for investment (2)			1.61		%		1.43		%		1.04		%		1.03		%		1.06		%
Net charge-offs to average loans (3)			0.29				0.04				0.07				0.11				0.14
Non-performing loans as a percentage of total loans			0.29		%		0.34		%		0.39		%		0.37		%		0.35		%
Non-performing assets as a percentage of total assets			0.24		%		0.27		%		0.26		%		0.29		%		0.31		%
(1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $56, $51 and $154 for the fourth, third, and second quarters of 2019, respectively.
(2)The third and second quarters of 2019 ratios are calculated on a continuing operations basis.
(3)Annualized.

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits
																	Linked
		June 30,			March 31,			December 31,			September 30,			June 30,			Quarter				Year Over
(dollars in thousands)		2020			2020			2019			2019			2019			Change				Year Change
DDA		$	883,662		$	712,919		$	824,646		$	599,657		$	569,693		$	170,743			$	313,969
NOW			449,737			368,463			373,727			240,427			309,709			81,274				140,028
Savings			583			567			1,219			1,081			1,090			16				(507	)
Money market			879,863			982,109			1,173,218			921,133			802,973			(102,246	)			76,890
Time			131,353			66,793			44,389			30,782			33,902			64,560				97,451
Brokered			62,433			94,268			81,847			61,192			134,164			(31,835	)			(71,731	)
Total deposits		$	2,407,631		$	2,225,119		$	2,499,046		$	1,854,272		$	1,851,531		$	182,512			$	556,100
Payments clients		$	344,608		$	483,585		$	567,597		$	286,373		$	301,413		$	(138,977	)		$	43,195
Average Deposits
		2020						2019									Linked
		Second			First			Fourth			Third			Second			Quarter				Q2 2020 vs
(dollars in thousands)		Quarter			Quarter			Quarter			Quarter			Quarter			Change				Q2 2019
DDA		$	815,299		$	713,001		$	718,298		$	637,809		$	587,957		$	102,298			$	227,342
NOW			462,051			382,178			320,637			295,106			314,601			79,873				147,450
Savings			574			650			1,098			1,085			956			(76	)			(382	)
Money market			952,444			1,010,713			1,006,449			895,102			859,680			(58,269	)			92,764
Time			96,362			55,775			37,388			32,409			32,358			40,587				64,004
Brokered			83,228			92,188			62,757			88,146			106,524			(8,960	)			(23,296	)
Total deposits - continuing operations			2,409,958			2,254,505			2,146,627			1,949,657			1,902,076			155,453				507,882
Deposits to be assumed - discontinued operations			—			—			—			—			45,350			—				(45,350	)
Total deposits		$	2,409,958		$	2,254,505		$	2,146,627		$	1,949,657		$	1,947,426		$	155,453			$	462,532
Payments clients		$	377,923		$	419,630		$	362,327		$	289,526		$	285,949		$	(41,707	)		$	91,974
Noninterest bearing deposits as a percentage of average deposits - continuing operations			33.8	%		31.6	%		33.5	%		32.7	%		30.9	%
Cost of interest-bearing deposits - continuing operations			0.33	%		1.09	%		1.36	%		1.58	%		1.66	%
Cost of deposits - continuing operations			0.22	%		0.75	%		0.90	%		1.06	%		1.15	%

ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
																						For the six months
		2020								2019												ended June 30,
		Second				First				Fourth				Third				Second
(in thousands, except share and per share data)		Quarter				Quarter				Quarter				Quarter				Quarter				2020				2019
Taxable equivalent interest income reconciliation
Interest income - GAAP		$	23,797			$	26,023			$	26,532			$	26,520			$	26,598			$	49,820			$	52,795
Taxable equivalent adjustment			354				223				167				104				88				577				188
Interest income - taxable equivalent		$	24,151			$	26,246			$	26,699			$	26,624			$	26,686			$	50,397			$	52,983
Taxable equivalent net interest income reconciliation - continuing operations
Net interest income - GAAP		$	21,631			$	20,980			$	20,567			$	19,984			$	19,889			$	42,611			$	40,313
Taxable equivalent adjustment			354				223				167				104				88				577				188
Net interest income - taxable equivalent - continuing operations		$	21,985			$	21,203			$	20,734			$	20,088			$	19,977			$	43,188			$	40,501
Taxable equivalent net interest margin reconciliation - continuing operations
Net interest margin - GAAP - continuing operations			3.17		%		3.38		%		3.35		%		3.51		%		3.60		%		3.27		%		3.71		%
Impact of taxable equivalent adjustment			0.06				0.03				0.03				0.01				0.01				0.05				0.02
Net interest margin - taxable equivalent - continuing operations			3.23		%		3.41		%		3.38		%		3.52		%		3.61		%		3.32		%		3.73		%
Taxable equivalent net interest margin reconciliation
Net interest margin - GAAP			3.17		%		3.38		%		3.35		%		3.51		%		3.54		%		3.27		%		3.61		%
Impact of taxable equivalent adjustment			0.06				0.03				0.03				0.01				0.02				0.05				0.01
Net interest margin - taxable equivalent			3.23		%		3.41		%		3.38		%		3.52		%		3.56		%		3.32		%		3.62		%
Income before income taxes reconciliation
Income before income taxes - GAAP		$	2,207			$	2,451			$	9,077			$	9,663			$	8,878			$	4,658			$	17,029
Taxable equivalent adjustment			354				223				167				104				88				577				188
Income before income taxes		$	2,561			$	2,674			$	9,244			$	9,767			$	8,966			$	5,235			$	17,217
Income tax reconciliation
Income tax expense - GAAP		$	358			$	327			$	1,937			$	2,094			$	1,869			$	685			$	3,580
Taxable equivalent adjustment			354				223				167				104				88				577				188
Income tax expense		$	712			$	550			$	2,104			$	2,198			$	1,957			$	1,262			$	3,768
Tangible book value per common share reconciliation
Total shareholders’ equity		$	335,980			$	332,300			$	326,495			$	328,711			$	336,715			$	335,980			$	336,715
Intangible assets			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible common equity		$	316,055			$	312,375			$	306,570			$	308,786			$	316,790			$	316,055			$	316,790
Common shares outstanding			21,477,631				21,479,986				21,751,026				22,193,761				23,293,465				21,477,631				23,293,465
Book value per common share - GAAP		$	15.64			$	15.47			$	15.01			$	14.81			$	14.46			$	15.64			$	14.46
Tangible book value			14.72				14.54				14.09				13.91				13.60				14.72				13.60
Tangible common equity to tangible assets reconciliation
Total shareholders’ equity		$	335,980			$	332,300			$	326,495			$	328,711			$	336,715			$	335,980			$	336,715
Intangible assets			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible common equity		$	316,055			$	312,375			$	306,570			$	308,786			$	316,790			$	316,055			$	316,790
Total assets		$	2,890,622			$	2,719,658			$	2,910,379			$	2,410,198			$	2,389,680			$	2,890,622			$	2,389,680
Intangible assets			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible assets		$	2,870,697			$	2,699,733			$	2,890,454			$	2,390,273			$	2,369,755			$	2,870,697			$	2,369,755
Tangible common equity to tangible assets			11.01		%		11.57		%		10.61		%		12.92		%		13.37		%		11.01		%		13.37		%
Allowance for loan losses to loans held for investment reconciliation
Total loans held for investment		$	2,184,694			$	1,932,909			$	1,873,524			$	1,835,673			$	1,789,740			$	2,184,694			$	1,789,740
PPP loans			(234,049	)			—				—				—				—				(234,049	)			—
Total loans held for investment excluding PPP loans		$	1,950,645			$	1,932,909			$	1,873,524			$	1,835,673			$	1,789,740			$	1,950,645			$	1,789,740
Allowance for credit losses to loans held for investment			1.61		%		1.43		%		1.04		%		1.03		%		1.06		%		1.61		%		1.06		%
Allowance for credit losses to loans held for investment excluding PPP loans			1.80		%		1.43		%		1.04		%		1.03		%		1.06		%		1.80		%		1.06		%