Atlantic Capital Bancshares, Inc. Reports Fourth Quarter 2021 Results

Rhea-AI Summary

Atlantic Capital Bancshares (NASDAQ: ACBI) reported a net income of $11.7 million, or $0.57 per diluted share, for Q4 2021, up from $10.0 million a year earlier, but down from $13.3 million in Q3 2021. Total assets decreased to $3.8 billion. Loans held for investment grew 22.2% annualized from Q3 2021. Average demand deposit accounts increased 32.7% annualized. The company anticipates strong momentum as it prepares for its merger with SouthState Corporation, expected to close in 2022, pending regulatory approval.

Positive

• Net income increased to $11.7 million from $10.0 million year-over-year.
• Loans held for investment rose by $123.8 million or 22.2% annualized from Q3 2021.
• Average demand deposit accounts grew by $112.3 million or 32.7% annualized compared to Q3 2021.
• Tangible book value per share increased to $17.39 from $16.94 at the end of Q3 2021.
• Approval received from shareholders for the merger with SouthState Corporation.

Negative

• Net income decreased from $13.3 million in Q3 2021.
• Total assets decreased to $3.8 billion from $4.2 billion at the end of Q3 2021.
• Taxable equivalent net interest margin fell to 2.76% from 2.91% year-over-year.
• Noninterest expense rose to $16.0 million, up from $13.2 million in Q4 2020.

ATLANTA, Jan. 24, 2022 (GLOBE NEWSWIRE) -- Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income for the quarter ended December 31, 2021, of $11.7 million, or $0.57 per diluted share, compared to $10.0 million, or $0.48 per diluted share, for the fourth quarter of 2020 and $13.3 million, or $0.65 per diluted share, for the third quarter of 2021.

“Atlantic Capital reported another quarter of solid operating results despite disruptions to economic activity from the Omicron variant and historically low interest rates.   All of our businesses contributed to these solid results and credit quality remained strong.  New business pipelines are robust in all of our businesses and we anticipate carrying strong momentum into our pending merger with SouthState Corporation,” remarked Douglas Williams, President and Chief Executive Officer.

Fourth Quarter Highlights⁽¹⁾

• Total assets were $3.8 billion, compared to $4.2 billion at September 30, 2021 and $3.6 billion at December 31, 2020.
• Return on average assets totaled 1.19% and return on average equity was 12.52% in the fourth quarter of 2021.
• Loans held for investment, excluding Paycheck Protection Program (“PPP”) loans, increased $123.8 million, or 22.2% annualized, from September 30, 2021, and increased $292.4 million, or 14.2%, from December 31, 2020.
• Quarterly average demand deposit accounts increased $112.3 million, or 32.7% annualized, compared to the third quarter of 2021 and increased $510.4 million, or 52.2%, compared to the fourth quarter of 2020.
• Cost of deposits decreased to 0.07% from 0.08% in the third quarter of 2021 and from 0.16% in the fourth quarter of 2020.
• Tangible book value per share increased to $17.39 from $16.94 at September 30, 2021 and from $15.62 at December 31, 2020.
• Annualized net charge-offs to average loans totaled 0.11% for the fourth quarter of 2021 and 0.06% for the full year 2021. Non-performing assets to total assets were 0.11% at December 31, 2021.
• The allowance for credit losses was 1.05% of total loans held for investment at December 31, 2021, compared to 1.16% at September 30, 2021 and 1.55% at December 31, 2020.
• On November 16, 2021, ACBI shareholders approved the announced merger with SouthState Corporation (“SouthState”), which is expected to close in 2022, subject to regulatory approval.
  

Income Statement

Taxable equivalent net interest income totaled $25.7 million for the fourth quarter of 2021, compared to $23.0 million in the fourth quarter of 2020 and $25.1 million in the third quarter of 2021. The fourth quarter of 2021 included $929,000 in PPP loan income, compared to $2.3 million in the fourth quarter of 2020 and $1.9 million in the third quarter of 2021.

Taxable equivalent net interest margin was 2.76% in the fourth quarter of 2021, compared to 2.91% in the fourth quarter of 2020 and 2.69% in the third quarter of 2021. The taxable equivalent net interest margin excluding PPP loans was 2.68% for the fourth quarter of 2021, compared to 2.54% for the third quarter of 2021.

The yield on loans in the fourth quarter of 2021 was 3.86%, a decrease of 3 basis points from the fourth quarter of 2020 and a decrease of 5 basis points from the third quarter of 2021. Excluding PPP loans, the fourth quarter of 2021 loan yield was 3.75%, up 4 basis points from the third quarter of 2021.

The cost of deposits in the fourth quarter of 2021 was 0.07%, a decrease of 9 basis points from the fourth quarter of 2020 and a decrease of 1 basis point from the third quarter of 2021. The cost of interest-bearing deposits decreased 13 basis points to 0.12% from the fourth quarter of 2020 and decreased 3 basis points from the third quarter of 2021.

In the fourth quarter of 2021, we recorded a negative provision for credit losses of $731,000, compared to a provision for credit losses of $481,000 in the fourth quarter of 2020 and a negative provision for credit losses of $2.4 million in the third quarter of 2021.

Noninterest income totaled $4.6 million in the fourth quarter of 2021, compared to $3.0 million in the fourth quarter of 2020 and $4.6 million in the third quarter of 2021.

Noninterest expense totaled $16.0 million in the fourth quarter of 2021, compared to $13.2 million in the fourth quarter of 2020 and $15.0 million in the third quarter of 2021. The fourth quarter of 2021 included $846,000 in merger related expenses compared to $2.9 million in the third quarter of 2021. The third quarter of 2021 also included an expense reduction of $3.0 million as a result of the employee retention payroll tax credit pursuant to the CARES Act.

⁽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.

Balance Sheet

Total loans held for investment were $2.4 billion at December 31, 2021, an increase of $118.2 million from December 31, 2020 and an increase of $93.4 million from September 30, 2021. Loans held for investment, excluding PPP loans, increased $123.8 million, or 22.2% annualized, from September 30, 2021, and increased $292.4 million, or 14.2%, from December 31, 2020.

The allowance for credit losses was 1.05% of total loans held for investment at December 31, 2021, compared to 1.16% at September 30, 2021. The decrease in the allowance was primarily a result of an improvement in our current expected credit losses, or CECL, economic forecast. Excluding the impact of PPP loans, the allowance for credit losses at December 31, 2021 was 1.06%, compared to 1.18% at September 30, 2021.

Total average deposits were $3.4 billion for the fourth quarter of 2021, an increase of $521.4 million, or 18.1%, from the fourth quarter of 2020 and a decrease of $18.1 million, or 2.1% annualized, from the third quarter of 2021. Average noninterest bearing deposits were $1.5 billion for the fourth quarter of 2021, an increase of $510.4 million, or 52.2%, from the fourth quarter of 2020 and an increase of $112.3 million, or 32.7% annualized, from the third quarter of 2021. Noninterest bearing deposits were 43.8% of total average deposits in the fourth quarter of 2021, compared to 34.0% in the fourth quarter of 2020 and 40.3% in the third quarter of 2021.

Merger Update

On July 22, 2021, Atlantic Capital and SouthState entered into an Agreement and Plan of Merger, pursuant to which Atlantic Capital will merge with and into SouthState, with SouthState as the surviving corporation in the merger. The merger remains subject to approval by the Board of Governors of the Federal Reserve System. Approval of the merger has been received from shareholders and the Office of the Comptroller of the Currency.

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) loans held for investment excluding PPP loans (iv) loan yield excluding PPP loans; (v) taxable equivalent net interest margin; (vi) taxable equivalent net interest margin excluding PPP loans; (vii) taxable equivalent income before income taxes; (viii) taxable equivalent income tax expense; (ix) tangible common equity to tangible assets; (x) tangible book value per share, and (xi) allowance for credit losses to loans held for investment excluding PPP loans, in our analysis of the Company's performance. Tangible common equity excludes goodwill 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 the proposed merger with SouthState, 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. Additional information and other factors that could affect future financial results are included in Atlantic Capital’s subsequent filings with the SEC. 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 $3.8 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 payments and other specialized financial services for select clients nationally.

Media Contact:
Ashley Carson
Email:
ashley.carson@atlcapbank.com
Phone: 404-995-6050
(ACB-ER)

Financial Contact:
Patrick Oakes
Email:
patrick.oakes@atlcapbank.com
Phone: 404-995-6050

ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
																				For the year ended
	2021																2020			December 31,
(in thousands, except share and per share data;	Fourth				Third				Second				First				Fourth
taxable equivalent)	Quarter				Quarter				Quarter				Quarter				Quarter			2021				2020
INCOME SUMMARY
Interest income - taxable equivalent (1)	$	27,323			$	27,040			$	27,993			$	25,775			$	25,288		$	108,132			$	100,474
Interest expense		1,658				1,895				1,958				2,065				2,299			7,576				12,023
Net interest income - taxable equivalent		25,665				25,145				26,035				23,710				22,989			100,556				88,451
Provision for credit losses		(731	)			(2,405	)			(933	)			(4,519	)			481			(8,588	)			17,446
Net interest income after provision for credit losses		26,396				27,550				26,968				28,229				22,508			109,144				71,005
Noninterest income		4,555				4,609				3,584				3,562				3,016			16,310				10,285
Noninterest expense		15,963				15,018				15,197				15,149				13,164			61,327				52,659
Income before income taxes		14,988				17,141				15,355				16,642				12,360			64,127				28,631
Income tax expense		3,324				3,837				3,539				3,280				2,410			13,981				6,091
Net income(1)(2)	$	11,664			$	13,304			$	11,816			$	13,362			$	9,950		$	50,146			$	22,540
PER SHARE DATA
Diluted earnings per share	$	0.57			$	0.65			$	0.58			$	0.65			$	0.48		$	2.45			$	1.05
Book value per share		18.37				17.92				17.38				16.72				16.60			18.37				16.60
Tangible book value per common share (3)		17.39				16.94				16.40				15.74				15.62			17.39				15.62
PERFORMANCE MEASURES
Return on average equity		12.52		%		14.69		%		13.60		%		15.99		%		11.68	%		14.16		%		6.67	%
Return on average assets		1.19				1.36				1.26				1.50				1.19			1.32				0.76
Taxable equivalent net interest margin		2.76				2.69				2.91				2.81				2.91			2.79				3.16
Taxable equivalent net interest margin excluding PPP loans		2.68				2.54				2.70				2.70				2.81			2.66				3.18
Efficiency ratio		53.52				51.12				51.97				56.30				51.30			53.16				54.14
Average loans to average deposits		67.79				65.81				67.54				71.93				76.81			68.18				84.11
CAPITAL
Average equity to average assets		9.51		%		9.23		%		9.24		%		9.39		%		10.18	%		9.34		%		11.33	%
Tangible common equity to tangible assets		9.31				8.21				8.86				8.63				8.86			9.31				8.86
Leverage ratio		8.9		(3)		8.5				8.4				8.4				8.9			9.1		(3)		8.9
Total risk based capital ratio		15.3		(3)		15.9				16.0				16.4				16.1			15.3		(3)		16.1
SHARES OUTSTANDING
Number of common shares outstanding - basic		20,334,150				20,305,109				20,319,429				20,354,077				20,394,912			20,334,150				20,394,912
Number of common shares outstanding - diluted		20,573,618				20,590,747				20,595,812				20,617,188				20,492,542			20,573,618				20,492,542
Average number of common shares - basic		20,309,415				20,308,761				20,332,503				20,380,066				20,711,089			20,276,717				21,342,086
Average number of common shares - diluted		20,532,447				20,507,604				20,516,478				20,502,184				20,795,332			20,459,032				21,427,722
ASSET QUALITY
Allowance for credit losses to loans held for investment		1.05		%		1.16		%		1.27		%		1.31		%		1.55	%		1.05		%		1.55	%
Net charge-offs to average loans (4)		0.11				0.00				0.10				0.04				0.05			0.06				0.11
Non-performing assets to total assets		0.11				0.10				0.14				0.06				0.13			0.11				0.13
AVERAGE BALANCES
Total loans	$	2,302,085			$	2,246,529			$	2,233,906			$	2,270,660			$	2,207,956		$	2,263,335			$	2,105,930
Investment securities		759,824				733,452				656,507				579,547				491,134			682,967				456,422
Total assets		3,883,632				3,893,049				3,771,970				3,611,417				3,328,719			3,791,043				2,982,222
Deposits		3,395,762				3,413,882				3,307,601				3,156,906				2,874,402			3,319,454				2,503,703
Shareholders' equity		369,485				359,300				348,416				338,990				338,948			354,144				337,879
AT PERIOD END
Loans and loans held for sale	$	2,369,321			$	2,285,670			$	2,264,899			$	2,302,661			$	2,249,036		$	2,369,321			$	2,249,036
Investment securities		738,929				772,987				714,065				613,236				535,579			738,929				535,579
Total assets		3,819,585				4,210,316				3,780,445				3,732,668				3,615,617			3,819,585				3,615,617
Deposits		3,327,902				3,727,321				3,306,224				3,277,692				3,161,508			3,327,902				3,161,508
Shareholders’ equity		373,523				363,925				353,185				340,328				338,586			373,523				338,586
(1)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.
(2)Excludes effect of acquisition related intangibles.
(3)Amounts are estimates as of December 31, 2021.
(4)Annualized.

ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
		December 31,				September 30,				December 31,
(in thousands, except share data)		2021				2021				2020
ASSETS
Cash and due from banks		$	16,214			$	25,725			$	16,865
Interest-bearing deposits in banks			377,780				811,168				636,537
Other short-term investments			137,181				140,848				—
Cash and cash equivalents			531,175				977,741				653,402
Investment securities available for sale			501,218				535,158				335,423
Investment securities held to maturity, net of allowance for credit losses of $13, $13, and $14, at December 31, 2021, September 30, 2021, and December 31, 2020, respectively			237,711				237,829				200,156
Other investments			23,546				23,877				25,892
Loans held for sale			2,087				11,814				—
Loans held for investment			2,367,234				2,273,856				2,249,036
Less: allowance for loan losses			(22,186	)			(23,924	)			(31,818	)
Loans held for investment, net			2,345,048				2,249,932				2,217,218
Premises and equipment, net			17,540				18,517				21,589
Bank owned life insurance			74,385				74,000				72,856
Goodwill			19,925				19,925				19,925
Other intangibles, net			2,597				2,573				2,731
Other real estate owned			—				—				16
Other assets			64,353				58,950				66,409
Total assets		$	3,819,585			$	4,210,316			$	3,615,617
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand		$	1,471,920			$	1,691,616			$	1,033,765
Interest-bearing checking			648,763				721,525				760,638
Savings			884				800				625
Money market			823,127				930,929				1,030,753
Time			288,698				287,865				241,328
Brokered deposits			94,510				94,586				94,399
Total deposits			3,327,902				3,727,321				3,161,508
Long-term debt			74,089				74,024				73,807
Other liabilities			44,071				45,046				41,716
Total liabilities			3,446,062				3,846,391				3,277,031
SHAREHOLDERS’ EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2021, September 30, 2021 and December 31, 2020			—				—				—
Common stock, no par value; 100,000,000 shares authorized; 20,334,150, 20,305,109, and 20,394,912 shares issued and outstanding as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively			207,514				207,214				209,942
Retained earnings			164,283				152,619				114,137
Accumulated other comprehensive income			1,726				4,092				14,507
Total shareholders’ equity			373,523				363,925				338,586
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	3,819,585			$	4,210,316			$	3,615,617

ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Statements of Income (unaudited)
(in thousands, except share and per share data)		Three months ended																				Year ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
		2021				2021				2021				2021				2020				2021				2020
INTEREST INCOME
Loans, including fees		$	22,375			$	22,151			$	23,352			$	21,769			$	21,609			$	89,647			$	85,580
Investment securities			4,014				3,920				3,900				3,374				3,000				15,208				11,683
Interest and dividends on other interest‑earning assets			541				593				366				267				334				1,767				1,733
Total interest income			26,930				26,664				27,618				25,410				24,943				106,622				98,996
INTEREST EXPENSE
Interest on deposits			562				789				851				971				1,188				3,173				7,820
Interest on Federal Home Loan Bank advances			—				—				—				—				—				—				54
Interest on federal funds purchased and securities sold under agreements to repurchase			—				—				—				—				—				—				41
Interest on long-term debt			1,096				1,106				1,107				1,094				1,111				4,403				4,108
Total interest expense			1,658				1,895				1,958				2,065				2,299				7,576				12,023
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES			25,272				24,769				25,660				23,345				22,644				99,046				86,973
Provision for credit losses			(731	)			(2,405	)			(933	)			(4,519	)			481				(8,588	)			17,446
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES			26,003				27,174				26,593				27,864				22,163				107,634				69,527
NONINTEREST INCOME
Service charges			1,777				1,765				1,727				1,663				1,341				6,932				4,871
Gains (losses) on sale of securities			—				—				—				2				(23	)			2				(23	)
Gains (losses) on sale of other assets			—				38				—				—				(6	)			38				(146	)
Derivatives income (loss)			5				21				(7	)			47				11				66				257
Bank owned life insurance			386				391				388				391				368				1,556				1,460
SBA lending activities			1,451				1,276				1,231				1,225				1,015				5,183				3,104
Other noninterest income			936				1,118				245				234				310				2,533				762
Total noninterest income			4,555				4,609				3,584				3,562				3,016				16,310				10,285
NONINTEREST EXPENSE
Salaries and employee benefits			10,176				10,290				10,362				10,421				8,437				41,249				34,229
Employee retention credit			—				(3,035	)			—				—				—				(3,035	)			—
Occupancy			682				756				778				734				767				2,950				3,183
Equipment and software			688				857				819				774				969				3,138				3,337
Professional services			653				737				723				922				686				3,035				2,745
Communications and data processing			1,011				889				869				792				789				3,561				3,113
Marketing and business development			145				142				138				108				144				533				517
Travel, meals and entertainment			102				91				47				10				14				250				227
FDIC premiums			506				478				421				275				241				1,680				629
Merger and conversion costs			846				2,899				—				—				—				3,745				—
Other noninterest expense			1,154				914				1,040				1,113				1,117				4,221				4,679
Total noninterest expense			15,963				15,018				15,197				15,149				13,164				61,327				52,659
INCOME BEFORE PROVISION FOR INCOME TAXES			14,595				16,765				14,980				16,277				12,015				62,617				27,153
Provision for income taxes			2,931				3,461				3,164				2,915				2,065				12,471				4,613
NET INCOME		$	11,664			$	13,304			$	11,816			$	13,362			$	9,950			$	50,146			$	22,540
Net income per common share - basic		$	0.57			$	0.66			$	0.58			$	0.66			$	0.48			$	2.47			$	1.06
Net income per common share - diluted		$	0.57			$	0.65			$	0.58			$	0.65			$	0.48			$	2.45			$	1.05
Weighted average shares - basic			20,309,415				20,308,761				20,332,503				20,380,066				20,711,089				20,276,717				21,342,086
Weighted average shares - diluted			20,532,447				20,507,604				20,516,478				20,502,184				20,795,332				20,459,032				21,427,722

ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
		Three months ended
		December 31, 2021									September 30, 2021
					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		$	476,945		$	201		0.17	%		$	594,338		$	266		0.18	%
Other short-term investments			139,094			174		0.50				122,477			156		0.51
Investment securities:
Taxable investment securities			533,088			2,453		1.83				503,420			2,411		1.90
Non-taxable investment securities (1)			226,736			1,954		3.42				230,032			1,885		3.25
Total investment securities			759,824			4,407		2.30				733,452			4,296		2.32
Loans			2,302,085			22,375		3.86				2,246,529			22,151		3.91
FHLB and FRB stock			11,972			166		5.50				11,931			171		5.69
Total interest-earning assets			3,689,920			27,323		2.94				3,708,727			27,040		2.89
Non-earning assets			193,712									184,322
Total assets		$	3,883,632								$	3,893,049
Liabilities
Interest bearing deposits:
NOW, money market, and savings			1,526,469			453		0.12				1,665,462			680		0.16
Time deposits			287,617			44		0.06				285,808			50		0.07
Brokered deposits			94,271			65		0.27				87,498			59		0.27
Total interest-bearing deposits			1,908,357			562		0.12				2,038,768			789		0.15
Total borrowings			—			—		—				—			—		—
Total long-term debt			74,046			1,096		5.87				73,978			1,106		5.93
Total interest-bearing liabilities			1,982,403			1,658		0.33				2,112,746			1,895		0.36
Demand deposits			1,487,405									1,375,114
Other liabilities			44,339									45,889
Shareholders’ equity			369,485									359,300
Total liabilities and shareholders’ equity		$	3,883,632								$	3,893,049
Net interest spread								2.61	%								2.53	%
Net interest income and net interest margin (2)					$	25,665		2.76	%					$	25,145		2.69	%
Non-taxable equivalent net interest margin								2.72	%								2.65	%
(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
		Three months ended
		December 31, 2021									December 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		$	476,945		$	201		0.17	%		$	435,939		$	141		0.13	%
Other short-term investments			139,094			174		0.50				—			—		—
Investment securities:
Taxable investment securities			533,088			2,453		1.83				275,872			1,587		2.29
Non-taxable investment securities (1)			226,736			1,954		3.42				215,262			1,758		3.25
Total investment securities			759,824			4,407		2.30				491,134			3,345		2.71
Loans			2,302,085			22,375		3.86				2,207,956			21,609		3.89
FHLB and FRB stock			11,972			166		5.50				12,699			193		6.05
Total interest-earning assets			3,689,920			27,323		2.94				3,147,728			25,288		3.20
Non-earning assets			193,712									180,991
Total assets		$	3,883,632								$	3,328,719
Liabilities
Interest bearing deposits:
NOW, money market, and savings			1,526,469			453		0.12				1,585,928			1,043		0.26
Time deposits			287,617			44		0.06				221,792			72		0.13
Brokered deposits			94,271			65		0.27				89,673			73		0.32
Total interest-bearing deposits			1,908,357			562		0.12				1,897,393			1,188		0.25
Total borrowings			—			—		—				—			—		—
Total long-term debt			74,046			1,096		5.87				73,811			1,111		5.99
Total interest-bearing liabilities			1,982,403			1,658		0.33				1,971,204			2,299		0.46
Demand deposits			1,487,405									977,009
Other liabilities			44,339									41,558
Shareholders’ equity			369,485									338,948
Total liabilities and shareholders’ equity		$	3,883,632								$	3,328,719
Net interest spread								2.61	%								2.73	%
Net interest income and net interest margin (2)					$	25,665		2.76	%					$	22,989		2.91	%
Non-taxable equivalent net interest margin								2.72	%								2.86	%
(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
		Year ended
		December 31, 2021									December 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		$	580,203		$	835		0.14	%		$	220,225		$	897		0.41	%
Other short-term investments			65,930			330		0.50				27			—		—
Investment securities:
Taxable investment securities			455,466			9,145		2.01				253,799			6,316		2.49
Non-taxable investment securities (1)			227,501			7,573		3.33				202,623			6,845		3.38
Total investment securities			682,967			16,718		2.45				456,422			13,161		2.88
Loans			2,263,335			89,647		3.96				2,105,930			85,580		4.06
FHLB and FRB stock			12,129			602		4.96				14,172			836		5.90
Total interest-earning assets			3,604,564			108,132		3.00				2,796,776			100,474		3.59
Non-earning assets			186,479									185,446
Total assets		$	3,791,043								$	2,982,222
Liabilities
Interest bearing deposits:
NOW, money market, and savings			1,622,596			2,692		0.17				1,444,699			6,931		0.48
Time deposits			284,385			236		0.08				135,309			269		0.20
Brokered deposits			87,676			245		0.28				83,274			620		0.74
Total interest-bearing deposits			1,994,657			3,173		0.16				1,663,282			7,820		0.47
Total borrowings			22			—		—				37,473			95		0.25
Total long-term debt			73,940			4,403		5.95				64,162			4,108		6.40
Total interest-bearing liabilities			2,068,619			7,576		0.37				1,764,917			12,023		0.68
Demand deposits			1,324,797									840,421
Other liabilities			43,483									39,005
Shareholders’ equity			354,144									337,879
Total liabilities and shareholders’ equity		$	3,791,043								$	2,982,222
Net interest spread								2.63	%								2.91	%
Net interest income and net interest margin (2)					$	100,556		2.79	%					$	88,451		3.16	%
Non-taxable equivalent net interest margin								2.75	%								3.11	%
(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
		December 31,				September 30,				June 30,				March 31,				December 31,				Quarter				Year
(dollars in thousands)		2021				2021				2021				2021				2020				Change				Change
Loans held for sale
Loans held for sale		$	2,087			$	11,814			$	—			$	1,847			$	—			$	(9,727	)		$	2,087
Total loans held for sale		$	2,087			$	11,814			$	—			$	1,847			$	—			$	(9,727	)		$	2,087
Loans held for investment
Commercial loans:
Commercial and industrial - other		$	863,060			$	790,437			$	767,646			$	735,287			$	760,645			$	72,623			$	102,415
Commercial and industrial - PPP			17,919				48,304				105,684				218,766				192,160				(30,385	)			(174,241	)
Commercial real estate:
Multifamily			73,581				62,906				58,632				80,507				66,262				10,675				7,319
Owner occupied			438,630				413,875				392,108				381,018				373,689				24,755				64,941
Investment			548,143				483,538				506,230				480,566				469,150				64,605				78,993
Construction and land:
1‑4 family residential construction			297				2,338				2,074				1,578				1,171				(2,041	)			(874	)
Other construction, development, and land			153,639				202,810				178,423				141,218				144,424				(49,171	)			9,215
Total commercial loans			2,095,269				2,004,208				2,010,797				2,038,940				2,007,501				91,061				87,768
Residential:
Residential mortgages			45,816				47,076				45,207				31,817				33,783				(1,260	)			12,033
Home equity			27,315				28,943				24,972				26,293				25,443				(1,628	)			1,872
Total residential loans			73,131				76,019				70,179				58,110				59,226				(2,888	)			13,905
Consumer			197,955				192,462				184,203				203,176				176,066				5,493				21,889
Other			4,733				4,921				5,234				7,689				13,897				(188	)			(9,164	)
			2,371,088				2,277,610				2,270,413				2,307,915				2,256,690				93,478				114,398
Less net deferred fees and other unearned income			(3,854	)			(3,754	)			(5,514	)			(7,101	)			(7,654	)			(100	)			3,800
Total loans held for investment		$	2,367,234			$	2,273,856			$	2,264,899			$	2,300,814			$	2,249,036			$	93,378			$	118,198
Total loans		$	2,369,321			$	2,285,670			$	2,264,899			$	2,302,661			$	2,249,036			$	83,651			$	120,285
Total unfunded commitments		$	1,079,769			$	848,642			$	804,784			$	789,869			$	813,757			$	231,127			$	266,012

ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Credit Losses Activity and Credit Quality
		2021																2020
		Fourth				Third				Second				First				Fourth
(dollars in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for loan losses
Balance at beginning of period		$	23,924			$	26,123			$	27,506			$	31,818			$	31,894
Provision for loan losses			(1,108	)			(2,221	)			(814	)			(4,074	)			225
Loans charged-off:
Commercial and industrial			(215	)			(131	)			(386	)			(288	)			(401	)
Commercial real estate			—				—				—				—				—
Construction and land			—				—				—				—				—
Residential mortgages			(501	)			—				(223	)			—				—
Home equity			—				—				—				—				—
Consumer			—				—				—				—				—
Other			—				—				—				—				—
Total loans charged-off			(716	)			(131	)			(609	)			(288	)			(401	)
Recoveries on loans previously charged-off:
Commercial and industrial			81				151				6				50				37
Commercial real estate			—				—				—				—				44
Construction and land			—				—				—				—				18
Residential mortgages			3				—				32				—				—
Home equity			—				—				—				—				—
Consumer			2				2				2				—				1
Other			—				—				—				—				—
Total recoveries			86				153				40				50				100
Net charge-offs		$	(630	)		$	22			$	(569	)		$	(238	)		$	(301	)
Balance at period end		$	22,186			$	23,924			$	26,123			$	27,506			$	31,818
Allowance for unfunded commitments
Balance at beginning of period		$	2,380			$	2,565			$	2,683			$	3,128			$	2,871
Provision for unfunded commitments			377				(185	)			(118	)			(445	)			257
Balance at period end		$	2,757			$	2,380			$	2,565			$	2,683			$	3,128
Total allowance for credit losses - loans and unfunded commitments		$	24,943			$	26,304			$	28,688			$	30,189			$	34,946
Provision for credit losses under CECL
Provision for loan losses			(1,108	)			(2,221	)			(814	)			(4,074	)			225
Provision for securities held to maturity credit losses			-				1				(1	)			-				(1	)
Provision for unfunded commitments			377				(185	)			(118	)			(445	)			257
Total provision for credit losses		$	(731	)		$	(2,405	)		$	(933	)		$	(4,519	)		$	481
Non-performing loans		$	4,153			$	4,077			$	5,194			$	2,056			$	4,862
Foreclosed properties (OREO)			—				—				16				16				16
Total nonperforming assets		$	4,153			$	4,077			$	5,210			$	2,072			$	4,878
Allowance for loan losses to loans held for investment			0.94		%		1.05		%		1.15		%		1.20		%		1.41		%
Allowance for credit losses to loans held for investment			1.05		%		1.16		%		1.27		%		1.31		%		1.55		%
Allowance for credit losses to loans held for investment excluding PPP loans			1.06		%		1.18		%		1.33		%		1.45		%		1.70		%
Net charge-offs to average loans (1)			0.11				0.00				0.10				0.04				0.05
Non-performing loans as a percentage of total loans			0.18		%		0.18		%		0.23		%		0.09		%		0.22		%
Non-performing assets as a percentage of total assets			0.11		%		0.10		%		0.14		%		0.06		%		0.13		%
(1)Annualized.

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits
																	Linked
		December 31,			September 30,			June 30,			March 31,			December 31,			Quarter				Year Over
(dollars in thousands)		2021			2021			2021			2021			2020			Change				Year Change
DDA		$	1,471,920		$	1,691,616		$	1,374,018		$	1,280,524		$	1,033,765		$	(219,696	)		$	438,155
NOW			648,763			721,525			536,677			485,540			760,638			(72,762	)			(111,875	)
Savings			884			800			676			562			625			84				259
Money market			823,127			930,929			1,026,239			1,142,361			1,030,753			(107,802	)			(207,626	)
Time			288,698			287,865			283,656			294,129			241,328			833				47,370
Brokered			94,510			94,586			84,958			74,576			94,399			(76	)			111
Total deposits		$	3,327,902		$	3,727,321		$	3,306,224		$	3,277,692		$	3,161,508		$	(399,419	)		$	166,394
Average Deposits
		2021												2020			Linked
		Fourth			Third			Second			First			Fourth			Quarter				Q4 2021 vs
(dollars in thousands)		Quarter			Quarter			Quarter			Quarter			Quarter			Change				Q4 2020
DDA		$	1,487,405		$	1,375,114		$	1,295,728		$	1,136,531		$	977,009		$	112,291			$	510,396
NOW			650,668			607,485			548,358			618,701			558,967			43,183			$	91,701
Savings			875			731			593			587			614			144			$	261
Money market			874,926			1,057,246			1,088,423			1,042,809			1,026,347			(182,320	)		$	(151,421	)
Time			287,617			285,808			290,331			273,615			221,792			1,809			$	65,825
Brokered			94,271			87,498			84,168			84,663			89,673			6,773			$	4,598
Total deposits		$	3,395,762		$	3,413,882		$	3,307,601		$	3,156,906		$	2,874,402		$	(18,120	)		$	521,360
Noninterest bearing deposits as a percentage of average deposits			43.8	%		40.3	%		39.2	%		36.0	%		34.0	%
Cost of interest-bearing deposits			0.12	%		0.15	%		0.17	%		0.19	%		0.25	%
Cost of deposits			0.07	%		0.08	%		0.10	%		0.12	%		0.16	%

ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
																						For the twelve months
		2021																2020				ended December 31,
		Fourth				Third				Second				First				Fourth
(in thousands, except share and per share data)		Quarter				Quarter				Quarter				Quarter				Quarter				2021				2020
Taxable equivalent interest income reconciliation
Interest income - GAAP		$	26,930			$	26,664			$	27,618			$	25,410			$	24,943			$	106,622			$	98,996
Taxable equivalent adjustment			393				376				375				365				345				1,510				1,478
Interest income - taxable equivalent		$	27,323			$	27,040			$	27,993			$	25,775			$	25,288			$	108,132			$	100,474
Taxable equivalent net interest income reconciliation
Net interest income - GAAP		$	25,272			$	24,769			$	25,660			$	23,345			$	22,644			$	99,046			$	86,973
Taxable equivalent adjustment			393				376				375				365				345				1,510				1,478
Net interest income - taxable equivalent		$	25,665			$	25,145			$	26,035			$	23,710			$	22,989			$	100,556			$	88,451
Loan yield excluding PPP loans reconciliation
Loan yield - GAAP			3.86		%		3.91		%		4.19		%		3.89		%		3.89		%		3.96		%		4.06		%
Impact of PPP loans			(0.11	)			(0.20	)			(0.24	)			(0.06	)			(0.03	)			(0.15	)			0.10
Loan yield excluding PPP loans			3.75		%		3.71		%		3.95		%		3.83		%		3.86		%		3.81		%		4.16		%
Taxable equivalent net interest margin reconciliation
Net interest margin - GAAP			2.72		%		2.65		%		2.87		%		2.76		%		2.86		%		2.75		%		3.11		%
Impact of taxable equivalent adjustment			0.04				0.04				0.04				0.05				0.05				0.04				0.05
Net interest margin - taxable equivalent			2.76		%		2.69		%		2.91		%		2.81		%		2.91		%		2.79		%		3.16		%
Taxable equivalent net interest margin excluding PPP loans reconciliation
Net interest margin - taxable equivalent			2.76		%		2.69		%		2.91		%		2.81		%		2.91		%		2.79		%		3.11		%
Impact of PPP loans			(0.08	)			(0.15	)			(0.21	)			(0.11	)			(0.10	)			(0.13	)			0.07
Net interest margin - taxable equivalent excluding PPP loans			2.68		%		2.54		%		2.70		%		2.70		%		2.81		%		2.66		%		3.18		%
Taxable equivalent income before income taxes reconciliation
Income before income taxes - GAAP		$	14,595			$	16,765			$	14,980			$	16,277			$	12,015			$	62,617			$	27,153
Taxable equivalent adjustment			393				376				375				365				345				1,510				1,478
Income before income taxes		$	14,988			$	17,141			$	15,355			$	16,642			$	12,360			$	64,127			$	28,631
Taxable equivalent income tax expense reconciliation
Income tax expense - GAAP		$	2,931			$	3,461			$	3,164			$	2,915			$	2,065			$	12,471			$	4,613
Taxable equivalent adjustment			393				376				375				365				345				1,510				1,478
Income tax expense		$	3,324			$	3,837			$	3,539			$	3,280			$	2,410			$	13,981			$	6,091
Tangible book value per common share reconciliation
Total shareholders’ equity		$	373,523			$	363,925			$	353,185			$	340,328			$	338,586			$	373,523			$	338,586
Intangible assets			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible common equity		$	353,598			$	344,000			$	333,260			$	320,403			$	318,661			$	353,598			$	318,661
Common shares outstanding			20,334,150				20,305,109				20,319,429				20,354,077				20,394,912				20,334,150				20,394,912
Book value per common share - GAAP		$	18.37			$	17.92			$	17.38			$	16.72			$	16.60			$	18.37			$	16.60
Tangible book value			17.39				16.94				16.40				15.74				15.62				17.39				15.62
Tangible common equity to tangible assets reconciliation
Total shareholders’ equity		$	373,523			$	363,925			$	353,185			$	340,328			$	338,586			$	373,523			$	338,586
Intangible assets			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible common equity		$	353,598			$	344,000			$	333,260			$	320,403			$	318,661			$	353,598			$	318,661
Total assets		$	3,819,585			$	4,210,316			$	3,780,445			$	3,732,668			$	3,615,617			$	3,819,585			$	3,615,617
Intangible assets			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)			(19,925	)
Total tangible assets		$	3,799,660			$	4,190,391			$	3,760,520			$	3,712,743			$	3,595,692			$	3,799,660			$	3,595,692
Tangible common equity to tangible assets			9.31		%		8.21		%		8.86		%		8.63		%		8.86		%		9.31		%		8.86		%
Allowance for credit losses to loans held for investment reconciliation
Total loans held for investment		$	2,367,234			$	2,273,856			$	2,264,899			$	2,300,814			$	2,249,036			$	2,367,234			$	2,249,036
PPP loans			(17,919	)			(48,304	)			(105,684	)			(218,766	)			(192,160	)			(17,919	)			(192,160	)
Total loans held for investment excluding PPP loans		$	2,349,315			$	2,225,552			$	2,159,215			$	2,082,048			$	2,056,876			$	2,349,315			$	2,056,876
Allowance for credit losses to loans held for investment			1.05		%		1.16		%		1.27		%		1.31		%		1.55		%		1.05		%		1.55		%
Allowance for credit losses to loans held for investment excluding PPP loans			1.06		%		1.18		%		1.33		%		1.45		%		1.70		%		1.06		%		1.70		%

FAQ

What were Atlantic Capital's net income figures for the fourth quarter of 2021?

Atlantic Capital reported a net income of $11.7 million, or $0.57 per diluted share, for Q4 2021.

How did loans held for investment perform in Q4 2021 for ACBI?

Loans held for investment increased by $123.8 million, or 22.2% annualized, from Q3 2021.

What is the current status of ACBI's merger with SouthState Corporation?

The merger with SouthState Corporation is expected to close in 2022, pending regulatory approval.

Did ACBI experience any changes in its total assets by the end of Q4 2021?

Yes, total assets decreased to $3.8 billion from $4.2 billion at the end of Q3 2021.

What was the tangible book value per share for ACBI at the end of Q4 2021?

The tangible book value per share increased to $17.39 at the end of Q4 2021.