Atlantic Capital Bancshares (ACBI) 8-K Atlantic Capital Bancshares, Inc. Reports Third Quarter 2018 Results

PRESS RELEASE

ATLANTIC CAPITAL BANCSHARES, INC. REPORTS THIRD QUARTER 2018 RESULTS

Atlanta, GA - October 25, 2018 - Atlantic Capital Bancshares, Inc. (NASDAQ: ACBI) announced net income of $6.5 million, or $0.25 per diluted share, for the third quarter of 2018, compared to $8.2 million, or $0.31 per diluted share, in the second quarter of 2018. Operating net income for the third quarter of 2018 was $6.5 million, compared to $6.9 million in the second quarter of 2018.

Net income for the first nine months of 2018 was $19.7 million, or $0.75 per diluted share, compared to $11.6 million, or $0.45 per diluted share, for the first nine months of 2017. Operating net income for the first nine months of 2018 was $18.4 million, or $0.71 per diluted share, compared to $11.6 million, or $0.45 per diluted share, for the first nine months of 2017.

Third Quarter Highlights⁽¹⁾ 

• Grew loans held for investment $104 million, or 21.5% annualized, compared to the second quarter of 2018.

• Grew average deposits $118 million, or 22.1% annualized, compared to the second quarter of 2018.

• Decreased noninterest expense $766,000 to $16.6 million compared to the second quarter of 2018.

• Improved efficiency ratio to 64.8% compared to 67.7% in the second quarter of 2018.

• Reported nonperforming assets to total assets of 0.13%.

“With record loan and deposit growth in the third quarter, Atlantic Capital is well positioned for above average growth in strong markets, further improvement in profitability, and superior through-the-cycle credit quality,” remarked Douglas Williams, President and Chief Executive Officer.

Income Statement

Net interest income increased to $22.7 million in the third quarter of 2018 from $22.1 million in the second quarter of 2018, primarily as a result of higher loan balances in the third quarter. Net accretion income on acquired loans totaled $336,000 in the third quarter of 2018 compared to $331,000 in the second quarter of 2018.

Net interest margin was 3.47% in the third quarter of 2018, a decrease of 7 basis points from the second quarter of 2018, as a result of an increase in cash balances from higher deposit balances and a higher cost of deposits. The accretion from the acquired loan discount and amortization of time deposit premium contributed 6 basis points to the net interest margin in the third quarter of 2018 compared to 7 basis points in the second quarter of 2018.

Loan yields in the third quarter of 2018 increased 2 basis points to 4.97% from the second quarter of 2018. The benefit to loan yields from higher rates was reduced in the third quarter mainly due to the limited increases in 1 month LIBOR during most of the third quarter.

The cost of total deposits in the third quarter of 2018 was 0.77%, an increase of 8 basis points from the second quarter of 2018. The cost of interest bearing deposits increased 15 basis points to 1.12% from the second quarter of 2018, driven by an increase in short term interest rates and competitive pressure.

The provision for loan losses was $845,000 in the third quarter of 2018, an increase compared to ($173,000) in the second quarter of 2018, primarily as a result of an increase in loan balances partially offset by improved credit quality.

Noninterest income totaled $3.1 million in the third quarter of 2018 compared to $5.3 million in the second quarter of 2018. The second quarter included a gain of $1.7 million from the sale of Southeastern Trust Company and $507,000 in trust income earned prior to the sale.

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

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SBA income totaled $882,000, a decrease of $115,000 from the second quarter of 2018 due to a decrease in premiums on the sale of SBA loans and the resulting decision to hold the guaranteed portion of some loans.

Noninterest expense totaled $16.6 million in the third quarter of 2018, a decrease of $766,000 compared to $17.4 million in the second quarter of 2018. Salaries and employee benefits expense decreased by $769,000 to $10.2 million, primarily from the savings associated with the sale of the trust company, lower incentive expense and lower payroll taxes.

Balance Sheet

Total loans held for investment were $2.04 billion at September 30, 2018, an increase of $104.4 million from June 30, 2018. This included growth of $59.6 million in commercial and industrial and owner occupied commercial real estate loans from June 30, 2018.

At September 30, 2018, the allowance for loan losses was $20.4 million, or 1.00% of loans held for investment, compared to $19.6 million, or 1.01% of loans held for investment as of June 30, 2018. Annualized net charge-offs to average loans were 0.00% in the third quarter of 2018 compared to 0.03% in the second quarter of 2018. Nonperforming assets totaled $3.7 million, or 0.13% of total assets, as of September 30, 2018, compared to $3.7 million, or 0.14% of total assets, as of June 30, 2018.

Total average deposits for the third quarter of 2018 were $2.25 billion, an increase of $118.2 million from the second quarter of 2018. This increase included some increases in large, temporary deposits that we anticipate to decrease in late 2018 and early 2019. Average transaction deposits, which includes DDA and NOW accounts, increased $90.1 million in the third quarter of 2018, compared to the second quarter.

Earnings Conference Call

The Company will host a conference call at 9:30 a.m. EST on Friday, October 26, 2018, to discuss the financial results for the quarter ended September 30, 2018. Individuals wishing to participate in the conference call may do so by dialing 844.868.8848 from the United States and entering Conference ID 89772886. The call will also be available live via webcast on the Investor Relations page of the Company's website, www.atlanticcapitalbank.com.

Non-GAAP Financial Measures

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

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

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Forward-Looking Statements

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

About Atlantic Capital Bancshares

Atlantic Capital Bancshares, Inc. is a $2.88 billion publicly traded bank holding company headquartered in Atlanta, Georgia. Atlantic Capital offers banking, treasury management, capital markets and mortgage services to privately held companies and individuals in Atlanta, eastern Tennessee, and northwest Georgia. Atlantic Capital also provides specialized financial services to select clients nationally.

Media Contact:

Ashley Carson

Email: ashley.carson@atlcapbank.com

Phone: 404-995-6050

Financial Contact:

Patrick Oakes

Email: patrick.oakes@atlcapbank.com

Phone: 404-995-6050

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ATLANTIC CAPITAL BANCSHARES, INC.
Selected Financial Information
	2018										2017							For the nine months ended September 30,
(in thousands, except share and per share data; taxable equivalent)	Third Quarter			Second Quarter				First Quarter			Fourth Quarter				Third Quarter			2018			2017
INCOME SUMMARY
Interest income (1)	$	28,616		$	27,444			$	26,085		$	25,350			$	24,566		$	82,145		$	71,827
Interest expense	5,956			5,332				4,465			4,028				4,060			15,753			11,101
Net interest income	22,660			22,112				21,620			21,322				20,506			66,392			60,726
Provision for loan losses	845			(173		)		772			282				322			1,444			2,936
Net interest income after provision for loan losses	21,815			22,285				20,848			21,040				20,184			64,948			57,790
Operating noninterest income (2)	3,066			3,650				3,983			3,568				3,477			10,699			12,621
Noninterest expense	16,595			17,361				18,392			20,594				17,504			52,348			52,871
Operating income before income taxes (2)	8,286			8,574				6,439			4,014				6,157			23,299			17,540
Operating income tax expense (3)	1,773			1,684				1,401			1,953				2,105			4,858			5,929
Operating net income (2)(3)	6,513			6,890				5,038			2,061				4,052			18,441			11,611
Net gain on sale of trust company, net of income tax	—			1,261				—			—				—			1,261			—
Revaluation of net deferred tax asset	—			—				—			17,398				—			—			—
Net income (loss) - GAAP	$	6,513		$	8,151			$	5,038		$	(15,337	)		$	4,052		$	19,702		$	11,611
PER SHARE DATA
Diluted earnings (loss) per share - GAAP	$	0.25		$	0.31			$	0.19		$	(0.60	)		$	0.16		$	0.75		$	0.45
Diluted earnings per share - operating (2)(3)	0.25			0.26				0.19			0.08				0.16			0.71			0.45
Book value per share	12.27			12.14				11.91			11.99				12.63			12.27			12.63
Tangible book value per common share (4)	11.37			11.23				10.98			11.05				11.67			11.37			11.67
PERFORMANCE MEASURES
Return on average equity - GAAP	8.07		%	10.46			%	6.66		%	(18.66		)	%	4.96		%	8.41		%	4.91		%
Return on average equity - operating (2)(3)	8.07			8.84				6.66			2.51				4.96			7.87			4.91
Return on average assets - GAAP	0.92			1.20				0.76			(2.24		)		0.60			0.96			0.57
Return on average assets - operating (2)(3)	0.92			1.02				0.76			0.30				0.60			0.90			0.57
Taxable equivalent net interest margin	3.47			3.54				3.51			3.39				3.26			3.50			3.24
Efficiency ratio	64.75			67.65				72.13			83.45				73.65			68.17			72.77
CAPITAL
Average equity to average assets	11.41		%	11.50			%	11.34		%	11.99			%	11.99		%	11.42		%	11.63		%
Tangible common equity to tangible assets	10.38			10.99				10.50			9.91				11.48			10.38			11.48
Tier 1 capital ratio	11.8		(6)	12.0				11.3			11.2				11.3			11.8		(6)	11.3
Total risk based capital ratio	14.7		(6)	15.0				14.3			14.1				14.3			14.7		(6)	14.3
Number of common shares outstanding - basic	26,103,666			26,102,217				25,772,208			25,712,909				25,716,418			26,103,666			25,716,418
Number of common shares outstanding - diluted	26,281,849			26,336,871				26,000,216			25,891,225				25,967,575			26,281,849			25,967,575
ASSET QUALITY
Allowance for loan losses to loans held for investment	1.00		%	1.01			%	1.01		%	1.00			%	0.99		%	1.00		%	0.99		%
Net charge-offs to average loans (5)	—			0.03				0.05			(0.04		)		0.68			0.02			0.32
Non-performing assets to total assets	0.13			0.14				0.13			0.14				0.23			0.13			0.23
(1)Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for all periods ending in 2018 and 35% for all periods ending in 2017, reflecting the statutory federal income tax rates. (2)Excludes gain on sale of trust company. (3)Excludes revaluation of net deferred tax asset. (4)Excludes effect of acquisition related intangibles. (5)Annualized. (6)Amounts are estimates as of 9/30/18.

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ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Balance Sheets (unaudited)
	September 30,			June 30,			December 31,			September 30,
(in thousands, except share data)	2018			2018			2017			2017
ASSETS
Cash and due from banks	$	28,007		$	55,612		$	38,086		$	35,504
Interest-bearing deposits in banks	140,682			42,477			281,247			40,558
Other short-term investments	20,898			14,712			10,681			5,189
Cash and cash equivalents	189,587			112,801			330,014			81,251
Investment securities available-for-sale	465,756			453,968			449,117			447,005
Other investments	33,021			36,190			32,174			35,818
Loans held for sale	1,886			1,612			1,487			3,274
Loans held for investment	2,038,434			1,934,311			1,933,839			1,905,432
Less: allowance for loan losses	(20,443		)	(19,583		)	(19,344		)	(18,870		)
Loans held for investment, net	2,017,991			1,914,728			1,914,495			1,886,562
Premises and equipment, net	17,371			16,878			12,054			11,747
Bank owned life insurance	64,769			64,391			63,667			63,284
Goodwill and intangible assets, net	26,557			27,012			27,633			27,945
Other real estate owned	968			1,288			1,215			1,494
Other assets	64,815			61,806			59,565			80,032
Total assets	$	2,882,721		$	2,690,674		$	2,891,421		$	2,638,412
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand	$	653,816		$	595,867		$	732,442		$	599,292
Interest-bearing checking	486,456			332,481			306,331			270,740
Savings	27,192			27,559			26,573			30,131
Money market	977,552			865,913			1,117,891			865,238
Time	155,689			152,111			138,612			144,250
Brokered deposits	79,119			92,656			128,816			193,994
Total deposits	2,379,824			2,066,587			2,450,665			2,103,645
Federal funds purchased and securities sold under agreements to repurchase	8,904			73,024			—			—
Federal Home Loan Bank borrowings	83,000			150,000			45,000			125,000
Long-term debt	49,662			49,620			49,535			49,493
Other liabilities	41,094			34,673			37,796			35,520
Total liabilities	2,562,484			2,373,904			2,582,996			2,313,658
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2018, June 30, 2018, December 31, 2017, and September 30, 2017	—			—			—			—
Common stock, no par value; 100,000,000 shares authorized; 26,103,666, 26,102,217, 25,712,909, and 25,716,418 shares issued and outstanding as of September 30, 2018, June 30, 2018, December 31, 2017, and September 30, 2017	305,300			304,793			299,474			298,469
Retained earnings	33,357			26,844			12,810			28,147
Accumulated other comprehensive (loss) income	(18,420		)	(14,867		)	(3,859		)	(1,862		)
Total shareholders’ equity	320,237			316,770			308,425			324,754
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,882,721		$	2,690,674		$	2,891,421		$	2,638,412

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ATLANTIC CAPITAL BANCSHARES, INC.
Consolidated Statements of Income (unaudited)
(in thousands, except share and per share data)	Three months ended														Nine months ended
	September 30, 2018		June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			September 30, 2018			September 30, 2017
INTEREST INCOME
Loans, including fees	$	24,619	$	23,779		$	22,675		$	22,043		$	21,491		$	71,073		$	62,846
Investment securities available-for-sale	2,789		2,687			2,592			2,510			2,298			8,068			6,671
Interest and dividends on other interest‑earning assets	1,111		880			715			584			562			2,706			1,617
Total interest income	28,519		27,346			25,982			25,137			24,351			81,847			71,134
INTEREST EXPENSE
Interest on deposits	4,403		3,651			3,044			2,856			2,693			11,098			7,221
Interest on Federal Home Loan Bank advances	637		766			509			323			459			1,912			1,213
Interest on federal funds purchased and securities sold under agreements to repurchase	92		92			83			26			84			267			196
Interest on long-term debt	824		823			829			823			824			2,476			2,471
Total interest expense	5,956		5,332			4,465			4,028			4,060			15,753			11,101
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES	22,563		22,014			21,517			21,109			20,291			66,094			60,033
Provision for loan losses	845		(173		)	772			282			322			1,444			2,936
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	21,718		22,187			20,745			20,827			19,969			64,650			57,097
NONINTEREST INCOME
Service charges	1,278		1,308			1,192			1,206			1,247			3,778			3,870
Gains (losses) on sale of securities	—		(2		)	—			17			(80		)	(2		)	(80		)
Gains (losses) on sale of other assets	58		(166		)	(46		)	(46		)	44			(154		)	788
Mortgage income	315		363			304			290			320			982			965
Trust income	—		507			518			482			437			1,025			1,332
Derivatives income	20		20			114			94			(3		)	154			62
Bank owned life insurance	379		378			369			384			384			1,126			1,146
SBA lending activities	882		997			1,302			843			888			3,181			3,286
Gains on sale of branches	—		—			—			—			—			—			302
Gain on sale of trust company	—		1,681			—			—			—			1,681			—
Other noninterest income	134		245			230			298			240			609			950
Total noninterest income	3,066		5,331			3,983			3,568			3,477			12,380			12,621
NONINTEREST EXPENSE
Salaries and employee benefits	10,152		10,921			12,077			13,298			10,409			33,150			32,077
Occupancy	1,288		1,211			1,355			1,156			1,129			3,854			3,433
Equipment and software	964		904			787			872			776			2,655			2,577
Professional services	803		960			832			1,280			1,595			2,595			3,472
Postage, printing and supplies	75		61			58			114			63			194			226
Communications and data processing	947		1,003			1,043			1,111			982			2,993			3,038
Marketing and business development	281		191			190			225			272			662			721
FDIC premiums	208		197			147			212			308			552			754
Merger and conversion costs	—		—			—			—			—			—			304
Amortization of intangibles	296		319			343			367			391			958			1,286
Foreclosed property/problem asset expense	12		2			282			7			7			296			117
Other noninterest expense	1,569		1,592			1,278			1,952			1,572			4,439			4,866
Total noninterest expense	16,595		17,361			18,392			20,594			17,504			52,348			52,871
INCOME BEFORE PROVISION FOR INCOME TAXES	8,189		10,157			6,336			3,801			5,942			24,682			16,847
Provision for income taxes	1,676		2,006			1,298			19,138			1,890			4,980			5,236
NET INCOME (LOSS)	$	6,513	$	8,151		$	5,038		$	(15,337	)	$	4,052		$	19,702		$	11,611
Net income (loss) per common share ‑ basic	$	0.25	$	0.31		$	0.20		$	(0.60	)	$	0.16		$	0.76		$	0.45
Net income (loss) per common share ‑ diluted	$	0.25	$	0.31		$	0.19		$	(0.60	)	$	0.16		$	0.75		$	0.45
Weighted average shares - basic	26,103,397		26,010,914			25,750,824			25,723,548			25,699,179			25,956,336			25,548,646
Weighted average shares - diluted	26,254,772		26,200,026			25,945,773			25,888,064			25,890,779			26,134,655			25,799,851

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ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
	Three months ended
	September 30, 2018						June 30, 2018
(dollars in thousands; taxable equivalent)	Average Balance		Interest Income/ Expense		Tax Equivalent Yield/Rate		Average Balance		Interest Income/ Expense		Tax Equivalent Yield/Rate
Assets
Interest bearing deposits in other banks	$	128,248	$	647	2.00	%	$	97,501	$	562	2.31	%
Other short-term investments	21,985		157		2.83		9,262		64		2.77
Investment securities:
Taxable investment securities	385,834		2,315		2.38		378,291		2,212		2.35
Non-taxable investment securities(1)	75,514		571		3.00		76,343		573		3.01
Total investment securities	461,348		2,886		2.48		454,634		2,785		2.46
Total loans	1,963,817		24,619		4.97		1,927,063		23,779		4.95
FHLB and FRB stock	17,624		307		6.91		19,357		254		5.26
Total interest-earning assets	2,593,022		28,616		4.38		2,507,817		27,444		4.39
Non-earning assets	212,718						210,254
Total assets	$	2,805,740					$	2,718,071
Liabilities
Interest bearing deposits:
NOW, money market, and savings	1,333,701		3,491		1.04		1,254,153		2,798		0.89
Time deposits	154,507		551		1.41		148,134		385		1.04
Brokered deposits	67,937		361		2.11		100,425		468		1.87
Total interest-bearing deposits	1,556,145		4,403		1.12		1,502,712		3,651		0.97
Total borrowings	143,148		729		2.02		185,856		858		1.85
Total long-term debt	49,634		824		6.59		49,592		823		6.66
Total interest-bearing liabilities	1,748,927		5,956		1.35		1,738,160		5,332		1.23
Demand deposits	697,927						633,113
Other liabilities	38,796						34,255
Shareholders' equity	320,090						312,543
Total liabilities and shareholders' equity	$	2,805,740					$	2,718,071
Net interest spread					3.03	%					3.16	%
Net interest income and net interest margin(2)			$	22,660	3.47	%			$	22,112	3.54	%
Non-taxable equivalent net interest margin					3.45	%					3.52	%
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rates.
(2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.

7

ATLANTIC CAPITAL BANCSHARES, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
	Nine months ended
	September 30, 2018						September 30, 2017
(dollars in thousands; taxable equivalent)	Average Balance		Interest Income/ Expense		Tax Equivalent Yield/Rate		Average Balance		Interest Income/ Expense		Tax Equivalent Yield/Rate
Assets
Interest bearing deposits in other banks	$	101,502	$	1,606	2.12	%	$	76,079	$	614	1.08	%
Other short-term investments	13,907		284		2.73		16,198		231		1.91
Investment securities:
Taxable investment securities	380,002		6,643		2.34		362,080		5,197		1.92
Non-taxable investment securities(1)	76,658		1,723		3.01		81,485		2,167		3.56
Total investment securities	456,660		8,366		2.45		443,565		7,364		2.22
Total loans	1,943,369		71,073		4.89		1,948,700		62,846		4.31
FHLB and FRB stock	18,291		816		5.96		19,147		772		5.39
Total interest-earning assets	2,533,729		82,145		4.33		2,503,689		71,827		3.84
Non-earning assets	209,518						215,830
Total assets	$	2,743,247					$	2,719,519
Liabilities
Interest bearing deposits:
NOW, money market, and savings	1,296,370		8,637		0.89		1,171,369		4,842		0.55
Time deposits	147,531		1,249		1.13		152,190		833		0.73
Brokered deposits	80,920		1,212		2.00		182,195		1,546		1.13
Total interest-bearing deposits	1,524,821		11,098		0.97		1,505,754		7,221		0.64
Total borrowings	161,892		2,179		1.80		196,352		1,409		0.96
Total long-term debt	49,592		2,476		6.68		49,423		2,471		6.68
Total interest-bearing liabilities	1,736,305		15,753		1.21		1,751,529		11,101		0.85
Demand deposits	656,807						624,923
Other liabilities	36,935						26,706
Shareholders' equity	313,200						316,361
Total liabilities and shareholders' equity	$	2,743,247					$	2,719,519
Net interest spread					3.12	%					2.99	%
Net interest income and net interest margin(2)			$	66,392	3.50	%			$	60,726	3.24	%
Non-taxable equivalent net interest margin					3.49	%					3.21	%
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21% for the nine months ended September 30, 2018 and 35% for the nine months ended September 30, 2017, reflecting the statutory federal income tax rates.
(2) Tax equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.

8

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Loans
(dollars in thousands)	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			Linked Quarter Change			Year Over Year Change
Loans held for sale
Loans held for sale	$	1,886		$	1,612		$	835		$	1,487		$	3,274		$	274		$	(1,388	)
Total loans held for sale	$	1,886		$	1,612		$	835		$	1,487		$	3,274		$	274		$	(1,388	)
Loans held for investment
Commercial loans:
Commercial and industrial	$	648,349		$	610,024		$	636,181		$	615,359		$	562,426		$	38,325		$	85,923
Commercial real estate:
Multifamily	115,254			99,140			99,227			99,553			91,219			16,114			24,035
Owner occupied	390,563			367,441			353,235			346,746			348,447			23,122			42,116
Investment	468,237			455,401			461,638			494,116			505,188			12,836			(36,951		)
Construction and land:
1-4 family residential construction	4,381			6,178			6,571			6,906			9,644			(1,797		)	(5,263		)
Other construction, development, and land	155,400			140,026			139,333			108,589			122,436			15,374			32,964
Mortgage warehouse loans	27,838			38,352			44,575			39,981			41,551			(10,514		)	(13,713		)
Total commercial loans	1,810,022			1,716,562			1,740,760			1,711,250			1,680,911			93,460			129,111
Residential:
Residential mortgages	109,522			103,468			105,255			104,484			101,976			6,054			7,546
Home equity	66,847			66,974			70,712			76,244			78,773			(127		)	(11,926		)
Total residential loans	176,369			170,442			175,967			180,728			180,749			5,927			(4,380		)
Consumer	33,540			32,231			30,966			29,393			31,750			1,309			1,790
Other	21,399			17,997			15,181			16,278			16,106			3,402			5,293
	2,041,330			1,937,232			1,962,874			1,937,649			1,909,516			104,098			131,814
Less net deferred fees and other unearned income	(2,896		)	(2,921		)	(3,453		)	(3,810		)	(4,084		)	25			1,188
Total loans held for investment	$	2,038,434		$	1,934,311		$	1,959,421		$	1,933,839		$	1,905,432		$	104,123		$	133,002
Total loans	$	2,040,320		$	1,935,923		$	1,960,256		$	1,935,326		$	1,908,706		$	104,397		$	131,614

9

ATLANTIC CAPITAL BANCSHARES, INC.
Allowance for Loan Losses Activity and Credit Quality
	2018											2017
(dollars in thousands)	Third Quarter			Second Quarter				First Quarter				Fourth Quarter				Third Quarter
Balance at beginning of period	$	19,583		$	19,885			$	19,344			$	18,870			$	21,870
Provision for loan losses	758			(173		)		811				312				314
Provision for PCI loan losses	87			—				(39		)		(30		)		8
Loans charged-off:
Commercial and industrial	—			—				(126		)		—				(3,292		)
Commercial real estate	—			(50		)		—				—				—
Construction and land	—			—				—				—				(16		)
Residential mortgages	—			—				(70		)		—				—
Home equity	—			(102		)		(58		)		—				(31		)
Consumer	—			(10		)		(3		)		(13		)		(7		)
Other	—			—				—				—				—
Total loans charged-off	—			(162		)		(257		)		(13		)		(3,346		)
Recoveries on loans previously charged-off:
Commercial and industrial	—			—				19				192				1
Commercial real estate	—			28				—				—				—
Construction and land	—			—				—				1				15
Residential mortgages	—			—				—				—				—
Home equity	—			—				—				—				—
Consumer	15			5				7				12				8
Other	—			—				—				—				—
Total recoveries	15			33				26				205				24
Net charge-offs	$	15		$	(129	)		$	(231	)		$	192			$	(3,322	)
Balance at period end	$	20,443		$	19,583			$	19,885			$	19,344			$	18,870
Loans held for investment
PCI Loans	$	6,307		$	10,620			$	11,837			$	11,754			$	12,090
Non-PCI Loans	2,032,127			1,923,691				1,947,584				1,922,085				1,893,342
	$	2,038,434		$	1,934,311			$	1,959,421			$	1,933,839			$	1,905,432
Non-performing loans - PCI	$	750		$	969			$	1,217			$	1,211			$	1,289
Non-performing loans - Non-PCI	$	2,716		$	2,406			$	2,501			$	2,912			$	4,553
Foreclosed properties (OREO)	968			1,288				927				1,215				1,494
Total nonperforming assets	$	3,684		$	3,694			$	3,428			$	4,127			$	6,047
Allowance for loan losses to loans held for investment	1.00		%	1.01			%	1.01			%	1.00			%	0.99			%
Net charge-offs to average loans (1)	—			0.03				0.05				(0.04		)		0.68
Nonperforming loans as a percentage of total loans (2)	0.13			0.12				0.13				0.15				0.24
Nonperforming assets as a percentage of total assets (2)	0.13			0.14				0.13				0.14				0.23
(1)Annualized. (2)Excludes non-performing PCI loans.

10

ATLANTIC CAPITAL BANCSHARES, INC.
Period End Deposits
(dollars in thousands)	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			Linked Quarter Change			Year Over Year Change
DDA	$	653,816		$	595,867		$	599,838		$	732,442		$	599,292		$	57,949		$	54,524
NOW	486,456			332,481			302,636			306,331			270,740			153,975			215,716
Savings	27,192			27,559			29,407			26,573			30,131			(367		)	(2,939		)
Money Market	977,552			865,913			911,449			1,117,891			865,238			111,639			112,314
Time	155,689			152,111			140,594			138,612			144,250			3,578			11,439
Brokered	79,119			92,656			112,376			128,816			193,994			(13,537		)	(114,875		)
Total Deposits	$	2,379,824		$	2,066,587		$	2,096,300		$	2,450,665		$	2,103,645		$	313,237		$	276,179
Payments Clients	$	258,320		$	251,748		$	311,943		$	405,873		$	239,079		$	6,572		$	19,241
Average Deposits
	2018									2017						Linked Quarter Change			Year Over Year Change
(dollars in thousands)	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
DDA	$	697,927		$	633,113		$	638,730		$	649,218		$	628,029		$	64,814		$	69,898
NOW	389,649			364,362			329,171			338,741			291,810			25,287			97,839
Savings	27,257			28,239			29,609			29,851			30,236			(982		)	(2,979		)
Money Market	916,795			861,552			898,800			907,524			870,618			55,243			46,177
Time	154,507			148,134			139,788			140,921			143,862			6,373			10,645
Brokered	67,937			100,425			117,787			128,594			156,708			(32,488		)	(88,771		)
Total Deposits	$	2,254,072		$	2,135,825		$	2,153,885		$	2,194,849		$	2,121,263		$	118,247		$	132,809
Payments Clients	$	227,029		$	219,016		$	256,794		$	234,558		$	209,851		$	8,013		$	17,178
Noninterest bearing deposits as a percentage of average deposits	31.0		%	29.6		%	29.7		%	29.6		%	29.6		%
Cost of deposits	0.77		%	0.69		%	0.57		%	0.52		%	0.50		%

11

ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
	2018										2017							For the nine months ended September 30,
(in thousands, except share and per share data)	Third Quarter			Second Quarter				First Quarter			Fourth Quarter				Third Quarter			2018				2017
Taxable equivalent interest income reconciliation
Interest income - GAAP	$	28,519		$	27,346			$	25,982		$	25,137			$	24,351		$	81,847			$	71,134
Taxable equivalent adjustment	97			98				103			213				215			298				693
Interest income - taxable equivalent	$	28,616		$	27,444			$	26,085		$	25,350			$	24,566		$	82,145			$	71,827
Taxable equivalent net interest income reconciliation
Net interest income - GAAP	$	22,563		$	22,014			$	21,517		$	21,109			$	20,291		$	66,094			$	60,033
Taxable equivalent adjustment	97			98				103			213				215			298				693
Net interest income - taxable equivalent	$	22,660		$	22,112			$	21,620		$	21,322			$	20,506		$	66,392			$	60,726
Taxable equivalent net interest margin reconciliation
Net interest margin - GAAP	3.45		%	3.52			%	3.49		%	3.35			%	3.23		%	3.49			%	3.21		%
Impact of taxable equivalent adjustment	0.02			0.02				0.02			0.04				0.03			0.01				0.03
Net interest margin - taxable equivalent	3.47		%	3.54			%	3.51		%	3.39			%	3.26		%	3.50			%	3.24		%
Operating noninterest income reconciliation
Noninterest income - GAAP	$	3,066		$	5,331			$	3,983		$	3,568			$	3,477		$	12,380			$	12,621
Gain on sale of trust company	—			(1,681		)		—			—				—			(1,681		)		—
Operating noninterest income	$	3,066		$	3,650			$	3,983		$	3,568			$	3,477		$	10,699			$	12,621
Operating income before income taxes reconciliation
Income before income taxes - GAAP	$	8,189		$	10,157			$	6,336		$	3,801			$	5,942		$	24,682			$	16,847
Taxable equivalent adjustment	97			98				103			213				215			298				693
Gain on sale of trust company	—			(1,681		)		—			—				—			(1,681		)		—
Operating income before income taxes	$	8,286		$	8,574			$	6,439		$	4,014			$	6,157		$	23,299			$	17,540
Operating income tax reconciliation
Income tax expense - GAAP	$	1,676		$	2,006			$	1,298		$	19,138			$	1,890		$	4,980			$	5,236
Taxable equivalent adjustment	97			98				103			213				215			298				693
Gain on sale of trust company, tax expense	—			(420		)		—			—				—			(420		)		—
Revaluation of net deferred tax asset	—			—				—			(17,398		)		—			—				—
Operating income tax expense	$	1,773		$	1,684			$	1,401		$	1,953			$	2,105		$	4,858			$	5,929
Operating net income reconciliation
Net income (loss) - GAAP	$	6,513		$	8,151			$	5,038		$	(15,337	)		$	4,052		$	19,702			$	11,611
Gain on sale of trust company, net of income tax	—			(1,261		)		—			—				—			(1,261		)		—
Revaluation of net deferred tax asset	—			—				—			17,398				—			—				—
Operating net income	$	6,513		$	6,890			$	5,038		$	2,061			$	4,052		$	18,441			$	11,611
Operating diluted earnings per share reconciliation
Diluted earnings (loss) per share - GAAP	$	0.25		$	0.31			$	0.19		$	(0.60	)		$	0.16		$	0.75			$	0.45
Net gain on sale of trust company	—			(0.05		)		—			—				—			(0.04		)		—
Revaluation of net deferred tax asset	—			—				—			0.68				—			—				—
Diluted earnings per share - operating	$	0.25		$	0.26			$	0.19		$	0.08			$	0.16		$	0.71			$	0.45

12

ATLANTIC CAPITAL BANCSHARES, INC.
Non-GAAP Performance and Financial Measures Reconciliation
	2018												2017								For the nine months ended September 30,
(in thousands, except share and per share data)	Third Quarter				Second Quarter				First Quarter				Fourth Quarter				Third Quarter				2018				2017
Tangible book value per common share reconciliation
Total shareholders’ equity	$	320,237			$	316,770			$	307,059			$	308,425			$	324,754			$	320,237			$	324,754
Intangible assets	(23,367		)		(23,662		)		(24,050		)		(24,393		)		(24,760		)		(23,367		)		(24,760		)
Total tangible common equity	$	296,870			$	293,108			$	283,009			$	284,032			$	299,994			$	296,870			$	299,994
Common shares outstanding	26,103,666				26,102,217				25,772,208				25,712,909				25,716,418				26,103,666				25,716,418
Book value per common share - GAAP	$	12.27			$	12.14			$	11.91			$	11.99			$	12.63			$	12.27			$	12.63
Tangible book value	11.37				11.23				10.98				11.05				11.67				11.37				11.67
Return on average equity reconciliation
Net income (loss) - GAAP	$	6,513			$	8,151			$	5,038			$	(15,337	)		$	4,052			$	19,702			$	11,611
Gain on sale of trust company, net of income tax	—				(1,261		)		—				—				—				(1,261		)		—
Revaluation of net deferred tax asset	—				—				—				17,398				—				—				—
Operating net income	$	6,513			$	6,890			$	5,038			$	2,061			$	4,052			$	18,441			$	11,611
Average shareholders' equity	$	320,090			$	312,543			$	306,821			$	326,059			$	323,832			$	313,200			$	316,361
Return on average equity - GAAP	8.07			%	10.46			%	6.66			%	(18.66		)	%	4.96			%	8.41			%	4.91			%
Return on average equity - operating	8.07				8.84				6.66				2.51				4.96				7.87				4.91
Return on average assets reconciliation
Net income (loss) - GAAP	$	6,513			$	8,151			$	5,038			$	(15,337	)		$	4,052			$	19,702			$	11,611
Gain on sale of trust company, net of income tax	—				(1,261		)		—				—				—				(1,261		)		—
Revaluation of net deferred tax asset	—				—				—				17,398				—				—				—
Operating net income	$	6,513			$	6,890			$	5,038			$	2,061			$	4,052			$	18,441			$	11,611
Average assets	$	2,805,740			$	2,718,071			$	2,704,822			$	2,720,070			$	2,701,387			$	2,743,247			$	2,719,519
Return on average assets - GAAP	0.92			%	1.20			%	0.76			%	(2.24		)	%	0.60			%	0.96			%	0.57			%
Return on average assets - operating	0.92				1.02				0.76				0.30				0.60				0.90				0.57
Efficiency ratio reconciliation
Noninterest income - GAAP	$	3,066			$	5,331			$	3,983			$	3,568			$	3,477			$	12,380			$	12,621
Gain on sale of trust company	—				(1,681		)		—				—				—				(1,681		)		—
Operating noninterest income	$	3,066			$	3,650			$	3,983			$	3,568			$	3,477			$	10,699			$	12,621
Noninterest expense - GAAP	$	16,595			$	17,361			$	18,392			$	20,594			$	17,504			$	52,348			$	52,871
Net interest income	$	22,563			$	22,014			$	21,517			$	21,109			$	20,291			$	66,094			$	60,033
Efficiency ratio	64.75			%	67.65			%	72.13			%	83.45			%	73.65			%	68.17			%	72.77			%
Tangible common equity to tangible assets reconciliation
Total shareholders’ equity	$	320,237			$	316,770			$	307,059			$	308,425			$	324,754			$	320,237			$	324,754
Intangible assets	(23,367		)		(23,662		)		(24,050		)		(24,393		)		(24,760		)		(23,367		)		(24,760		)
Total tangible common equity	$	296,870			$	293,108			$	283,009			$	284,032			$	299,994			$	296,870			$	299,994
Total assets	$	2,882,721			$	2,690,674			$	2,718,665			$	2,891,421			$	2,638,412			$	2,882,721			$	2,638,412
Intangible assets	(23,367		)		(23,662		)		(24,050		)		(24,393		)		(24,760		)		(23,367		)		(24,760		)
Total tangible assets	$	2,859,354			$	2,667,012			$	2,694,615			$	2,867,028			$	2,613,652			$	2,859,354			$	2,613,652
Tangible common equity to tangible assets	10.38			%	10.99			%	10.50			%	9.91			%	11.48			%	10.38			%	11.48			%

13