Atlantic Capital Bancshares Inc
Atlantic Capital Bancshares — Q3 2021 Earnings Presentation
40 slides from Atlantic Capital Bancshares's earnings presentation, Oct 27, 2021
Slide 1: Earnings Call 3Q 2021
Earnings Call 3Q 2021 Thursday, October 28, 2021 Exhibit 99.2
Slide 2: Disclaimer
DISCLAIMER 2 Statements included in this communication, which are not historical in nature are intended to be, and are hereby identified as, forward-looking statements for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
Slide 3: Overview of Franchise
$34 Billion in deposits $24 Billion in loans $41 Billion in assets $5.4 Billion market cap (1) Financial metrics as of September 30, 2021; market cap as of October 26, 2021; pending Atlantic Capital Bancshares, Inc. (“ACBI”) merger excluded SouthState Corporation Overview of Franchise (1) 3 (281) 7
Slide 4: Diversified Lines of Business
DIVERSIFIED LINES OF BUSINESS 4 High-Growth Southeast Markets with National Line of Business Capabilities Regional • Commercial Banking • Retail Banking • Business Banking • Treasury Management • Mortgage • Wealth • SBA • Correspondent Banking & Capital Markets • Payroll & Payments / Fintech (1) • C
Slide 5: Guiding Principles
Local Market Leadership Our business model supports the unique character of the communities we serve and encourages decision making by the banker that is closest to the customer. Long-Term Horizon We think and act like owners and measure success over entire economic cycles. We prioritize soundness b
Slide 6: Investment Thesis
INVESTMENT THESIS 6 • True alternative to the largest banks with capital markets platform and upgraded technology solutions • High growth markets • Low-cost core deposit base • Diversified revenue streams • Strong credit quality and disciplined underwriting • Energetic and experienced management tea
Slide 7: Quarterly Results
Quarterly Results Gr
Slide 8: Highlights | Linked Quarter
HIGHLIGHTS | LINKED QUARTER Dollars in millions, except per share data * The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets. The tangible returns on equity and common equity measures also add back the after- tax amortization of in
Slide 9: Third Quarter Highlights
(1) Adjusted figures above exclude the impact of merger-related expenses; Core net interest income excluding loan accretion and net deferred fees on PPP is also a non-GAAP financial measure - See reconciliation of GAAP to Non-GAAP measures in Appendix (2) Adjusted PPNR and PPNR ROAA are Non-GAAP fin
Slide 10: Tangible Book Value per Share
TANGIBLE BOOK VALUE PER SHARE (1) (1) The tangible measure is a non-GAAP measure and excludes the effect of period end balances of intangible assets - See reconciliation of GAAP to Non-GAAP measures in Appendix $39.83 $41.16 $42.02 $43.07 $43.98 $38.00 $39.00 $40.00 $41.00 $42.00 $43.00 $44.00 $45.0
Slide 11: Net Interest Margin
NET INTEREST MARGIN Dollars in millions * Tax equivalent ** Accretion includes PPP loans deferred fees and loan discount accretion Tax equivalent NIM is Non-GAAP financial measures - See reconciliation of GAAP to Non-GAAP measures in Appendix 11 $239.4 $236.2 $231.2 $232.6 $238.4 $30.9 $29.3 $30.8 $
Slide 12: Loan Production vs Loan Growth
LOAN PRODUCTION VS LOAN GROWTH Dollars in millions (1) Excludes loans held for sale and PPP; loan production indicates committed balance total; loan portfolio growth indicates quarter-over-quarter loan ending balance growth, excluding loans held for sale and PPP * The combined historical information
Slide 13: Mortgage Banking Division
QTD Production ($mm) $1,574 $1,404 $1,332 Refinance 40% 28% 30% Purchase 60% 72% 70% MORTGAGE BANKING DIVISION (1) Includes pipeline, LHFS and MBS forwards 13 Highlights Quarterly Mortgage Production Gain on Sale Margin 3Q20 2Q21 3Q21 Secondary Market Gain on Sale, net $42,527 $20,544 $12,484 Fair V
Slide 14: Correspondent Banking Division
• Provides capital markets hedging (ARC), fixed income sales, international, clearing and other services to over 1,000 financial institutions across the country CORRESPONDENT BANKING DIVISION 1,079 Financial Institution Clients $26.4 $27.8 $28.7 $25.9 $25.2 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $3
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity Gr
Slide 16: Cash & Securities
CASH & SECURITIES Dollars in billions * The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the information included in
Slide 17: Excess Liquidity Provides Significant Tailwind
EXCESS LIQUIDITY PROVIDES SIGNIFICANT TAILWIND (1) Source: S&P Global Market Intelligence; Peers as disclosed in the most recent SSB proxy statement; The 3Q21 averages are based on MRQs available as of 10/26/21 * The combined historical information referred to in this presentation as the “Combined B
Slide 18: Interest Rate Risk Profile
INTEREST RATE RISK PROFILE 30% 43% 15% 21% $- 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% % Change in Normalized Consensus Net Income Year 1 % Change in Normalized Consensus Net Income Year 2 Static Balance Sheet Instantaneous Rate Shock Up 200 Up 100 18 49.4% 49.4% 29.9% 41.4% 20.7% 9.2% 0
Slide 19: Well-Positioned for Higher Rates – Historical Deposit Beta
WELL- POSITIONED FOR HIGHER RATES – HISTORICAL DEPOSIT BETA* * The combined historical information referred to in this presentation as the “Combined Business Basis” presented is based on the reported GAAP results of the Company and CenterState for the applicable periods without adjustments and the i
Slide 20: Balance Sheet Strength
Balance Sheet Strength Gr
Slide 21: Loan and Deposit Trend
LOAN AND DEPOSIT TREND $22.9 $22.7 $22.5 $22.7 $23.3 $2.3 $1.9 $1.9 $1.3 $0.5 $25.2B $24.6B $24.4B $24.0B $23.8B $23.0B $23.5B $24.0B $24.5B $25.0B $25.5B $- $10 $20 $30 3Q20 4Q20 1Q21 2Q21 3Q21 $ in billions Loans(1) Total Loans PPP Dollars in billions (1) Excludes loans held for sale 21 $9.7 $9.7
Slide 22: Total Loan Portfolio
CDL (1) 9% Investor CRE (2) 31% Owner- Occupied CRE 21% C&I 15% Consumer RE 20% Cons / Other 4% TOTAL LOAN PORTFOLIO 22 Data as of September 30, 2021 Loan portfolio balances, average balances or percentage exclude loans held for sale and PPP loans (1) CDL includes residential construction, commercia
Slide 23: Premium Core Deposit Franchise
57% 41% 34% 50% 9% 9% 0% 20% 40% 60% 80% 100% SSB Peer Average (1) Deposit Mix vs. Peers Checking Accounts MM & Savings Time Deposits PREMIUM CORE† DEPOSIT FRANCHISE Noninterest- bearing Checking $11.4 Interest- bearing Checking $7.9 Savings $3.2 Money Market $8.1 Time Deposits $3.0 23 Data as of Se
Slide 24: Asset Quality Metrics
ASSET QUALITY METRICS Dollars in millions, unless otherwise noted (1) Excludes loans held for sale and PPP loans 0.01% 0.01% (0.00)% 0.03% 0.00% -0.01% 0.16% 0.33% 0.50% 3Q20 4Q20 1Q21 2Q21 3Q21 Net Charge-Offs (Recoveries) to Loans 0.50% 0.48% 0.46% 0.38% 0.40% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 3Q20 4Q
Slide 25: Capital Ratios
CAPITAL RATIOS (1) Preliminary * The tangible measures are non-GAAP measures and exclude the effect of period end balance of intangible assets - See reconciliation of GAAP to Non-GAAP measures in Appendix 25 2Q21 3Q21(1) Tangible Common Equity* 7.8 % 7.8 % Tier 1 Leverage 8.1 % 8.1 % Tier 1 Common E
Slide 26: Appendix
Appendix Gr
Slide 27: PPNR – Bridge from 2Q21 to 3Q21
PPNR(1) – BRIDGE FROM 2Q21 TO 3Q21 (1) Adjusted PPNR is a Non-GAAP financial measure that excludes the impact of merger-related expenses and extinguishment of debt cost - See reconciliation of GAAP to Non-GAAP measures in Appendix * Core NIM is also a non-GAAP financial measure that excludes PPP loa
Slide 28: Current & Historical 5-Qtr Performance
CURRENT & HISTORICAL 5- QTR PERFORMANCE Total revenue and noninterest income are adjusted by securities gains or losses; Tax equivalent NIM, efficiency ratio and adjusted efficiency ratio are Non-GAAP financial measures; Adjusted Efficiency Ratio excludes the impact of branch consolidation, merger-r
Slide 29: Loss Absorption Capacity | 3Q 2021
LOSS ABSORPTION CAPACITY | 3Q 2021 Dollars in millions (1) Excludes PPP loans and loan held for sale (2) Includes mark on loans from CSFL and prior SSB acquisitions 29 3Q21 % of Total Loans (1) Allowance for Credit Losses (“ACL”) Non-PCD ACL $ 221.4 PCD ACL 92.7 Total ACL $ 314.1 1.35 % Reserve for
Slide 30: Branch Optimization
BRANCH OPTIMIZATION 85 Branches Average Size $40M 420 Branches Acquired Plus 12 DeNovo Branches 236 Branches Consolidated or Sold 281 Branches Average Size $119M ~198% growth in deposits per branch 85 432 236 281 2009 …..……………..………..……....…………………………….. September 2021 30
Slide 31: PPP Update
PPP UPDATE 31 31 • As of 3Q21, approximately 84%, or $2.7 billion of PPP loans have been forgiven by the SBA (1) • In 3Q21, we recognized PPP deferred fees of $16.4 million • Approximately $9.5 million of PPP fees remaining to recognize • Average loan amount fully forgiven of $111 thousand (1) The t
Slide 32: Non-GAAP Reconciliations – Efficiency Ratios & Net Interest Margin
NON- GAAP RECONCILIATIONS – CURRENT & HISTORICAL: EFFICIENCY RATIOS & NET INTEREST MARGIN(UNAUDITED) Dollars in thousands (1) Non-recurring items include intangible assets’ amortization expenses for the adjusted efficiency ratios 32 3Q20 4Q20 1Q21 2Q21 3Q21 SSB SSB SSB SSB SSB Noninterest expense (G
Slide 33: Non-GAAP Reconciliations – Investments, Fed Funds Sold & Interest Earning Cash
NON- GAAP RECONCILIATIONS – CURRENT & HISTORICAL: INVESTMENTS, FED FUNDS SOLD & INT. EARNING CASH(UNAUDITED) Dollars in thousands (1) Does not include purchase accounting adjustments * The combined historical information referred to in this presentation as the “Combined Business Basis” presented is
Slide 34: Non-GAAP Reconciliations – PPNR & Correspondent Income
NON- GAAP RECONCILIATIONS – PPNR, ADJUSTED & CORRESPONDENT & CAPITAL MARKETS INCOME (UNAUDITED) Dollars in thousands 34 PPNR, Adjusted (Non-GAAP) 2Q21 3Q21 SSB SSB Net interest income (GAAP) 253,130 $ 259,986 $ Plus: Noninterest income 79,020 87,010 Less: Gain on sale of securities 36 64 Total reven
Slide 35: Non-GAAP Reconciliations – Tangible Book Value & TCE Ratio
NON- GAAP RECONCILIATIONS – TANGIBLE BOOK VALUE / SHARE & TANGIBLE COMMON EQUITY RATIO Dollars in thousands, except for per share data 35 Tangible Book Value per Common Share 3Q20 4Q20 1Q21 2Q21 3Q21 Shareholders' common equity (excludes preferred stock) 4,563,413 $ 4,647,880 $ 4,719,820 $ 4,757,623
Slide 36: Non-GAAP Reconciliations – Return on Avg. Tangible Common Equity
Dollars in thousands The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets; the tangible returns on equity and common equity measures also add back the after-tax amortization of intangibles to GAAP basis net income. 36 NON- GAAP RECO
Slide 37: Non-GAAP Reconciliations – Adjusted Net Income & EPS
NON- GAAP RECONCILIATIONS – ADJUSTED NET INCOME & ADJUSTED EARNINGS PER SHARE (“EPS”) Dollars in thousands, except for per share data 37 Adjusted Net Income 2Q21 3Q21 Net income (GAAP) 98,960 $ 122,788 $ Plus: Securities gains, net of tax (28) (51) Merger and branch consolidation related expense, ne
Slide 38: Non-GAAP Reconciliations – Adjusted ROA & ROATCE
NON- GAAP RECONCILIATIONS – ADJUSTED RETURN ON AVG. ASSETS & AVG. TANGIBLE COMMON EQUITY Dollars in thousands The tangible measures are non-GAAP measures and exclude the effect of period end or average balance of intangible assets; the tangible returns on equity and common equity measures also add b
Slide 39: Non-GAAP Reconciliations – Net Interest Margin & Core NII
NON- GAAP RECONCILIATIONS – NET INTEREST MARGIN & CORE NET INTEREST INCOME (EXCLD. FMV & PPP ACCRETION) Dollars in thousands Dollars in thousands, except for per share data 39 Net Interest Margin - Tax Equivalent (Non-GAAP) 3Q20 4Q20 1Q21 2Q21 3Q21 Net interest income (GAAP) 270,348 $ 265,547 $ 261,
Slide 40: SouthState
S SouthState
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