Atlantic Capital Bancshares : 2021 Q4 Investor Presentation

INVESTOR PRESENTATION | Q4 2021

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NASDAQ TICKER: ACBI

Forward-Looking Statements Disclaimer and Non-GAAP Financial Information

This presentation contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases

such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "strive," "projection," "would," and "outlook," or the

negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, and projections about our industry, management's beliefs, and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

The following risks, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: The pending merger with SouthState Corporation; the impact of the COVID-19 pandemic and the responses of governmental authorities on our operations, including declines in credit quality, strains on capital and liquidity, fluctuations in our fintech and payments processing business, and declines in deposits; our participation in the Paycheck Protection Program administered by the Small Business Administration ("SBA"); our strategic decision to focus on the greater Atlanta market may not positively impact our financial condition in the expected timeframe, or at all; costs associated with our growth and hiring initiatives in the Atlanta market area; risks associated with geographic concentration, borrower concentration and concentration in commercial real estate and commercial and industrial loans; our strategic decision to increase our focus on SBA and franchise lending may expose us to additional risks associated with these types of lending, including industry concentration risks, our ability to sell the guaranteed portion of SBA loans, the impact of negative economic conditions on small businesses' ability to repay the non-guaranteed portions of SBA loans, and changes to applicable federal regulations; risks associated with our ability to manage the planned growth of our fintech and payments processing business, including evolving regulations, security risks, and unforeseen increases in transaction volume resulting from changes in our customers' businesses and changes in the competitive landscape for fintech and payments processing; changes in asset quality and credit risk; the cost and availability of capital; customer acceptance of our products and services; customer borrowing, repayment, investment and deposit practices; the introduction, withdrawal, success and timing of business initiatives; the impact, extent, and timing of technological changes; severe catastrophic events in our geographic area; a weakening of the economies in which we conduct operations may adversely affect our operating results; the U.S. legal and regulatory framework could adversely affect the operating results of the Company; the interest rate environment may compress margins and adversely affect net interest income; our ability to anticipate or respond to interest rate changes correctly and manage interest rate risk presented through unanticipated changes in our interest rate risk position and/or short- and long-term interest rates; changes in trade, monetary and fiscal policies of various governmental bodies and central banks could affect the economic environment in which we operate; our ability to determine accurate values of certain assets and liabilities; adverse developments in securities, public debt, and capital markets, including changes in market liquidity and volatility; unanticipated changes in our liquidity position, including but not limited to our ability to enter the financial markets to manage and respond to any changes to our liquidity position; the impact of the transition from LIBOR and our ability to adequately manage such transition; adequacy of our risk management program; increased competitive pressure due to consolidation in the financial services industry; risks related to security breaches, cybersecurity attacks, and other significant disruptions in our information technology systems; and other risks and factors identified in our most recent annual report on Form 10-K and our other reports filed with or furnished to the Securities and Exchange Commission ("SEC") from time to time.

Statements included in this presentation include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures common to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) taxable equivalent net interest income, (ii) taxable equivalent net interest margin, (iii) tangible book value per common share, (iv) tangible common equity to tangible assets; (v) pre-provision net revenue, (vi) allowance for credit losses to loans held for investment excluding Paycheck Protection Program ("PPP"), and (vii) allowance for loan losses to loans held for investment excluding PPP. 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.

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Q4 2021 Highlights

Performance

Highlights

Credit Update

Merger Update

• Reported net income was $11.7 million or $0.57 per diluted share, this included $846,000 or $0.02 in merger related expenses.
• Loans held for investment (excluding PPP loans) increased 22% annualized from Sept 30, 2021 and 14% from Dec 31, 2021.
• Demand deposits (quarterly average) increased 33% annualized from third quarter of 2021 and 52% from the fourth quarter of 2020.
• Cost of deposits decreased to 0.07% compared to 0.08% in the third quarter of 2021 and 0.16% in the fourth quarter of 2020.
• The provision for credit losses was negative $731,000 reflecting an improved economic outlook and partially offset by loan growth.
• 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-performingassets to total assets were 0.11% at December 31, 2021.
• Classified and criticized loans decreased to below pre-pandemic levels as a percentage of total loans.
• On July 22, 2021, Atlantic Capital and SouthState Corporation ("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 our shareholders and the Office of the Comptroller of the Currency.

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Financial Highlights

										Change vs
		METRICS		Q4 2021		Q3 2021		Q4 2020	Q3 2021(5)	Q4 2020
		Diluted EPS	$	0.57	$	0.65	$	0.48	$ (0.08)	(49%)	$ 0.09	19%
Income
	Pre-provision net revenue (PPNR) (1)		14.3		14.7		12.8	(0.4)	(12%)	1.5	12%

Balance Sheet(2)

Total loans held for investment (period-end)	$	2,367	$ 2,274	$ 2,249	$	93	16%	$	118	5%
Total loans excluding PPP loans		2,349	2,226	2,057		123	22%		292	14%
Total deposits (quarterly average)		3,396	3,414	2,874		(18)	(2%)		522	18%
Non-interest bearing deposits (quarterly average)		1,487	1,375	977		112	33%		510	52%

Performance

Measures

Tangible book value per common share	$	17.39	$	16.94	$	15.62	$	0.45	$	1.77
Net interest margin (3)		2.76	%	2.69	%	2.91	%	7 bps		(15 bps)
Return on average equity		12.52		14.69		11.68		(217 bps)		84 bps
Efficiency ratio		53.52		51.12		51.30		240 bps		123 bps

	Tangible common equity to tangible assets	9.31	%	8.21	%	8.86	%	110 bps	45 bps
Capital Ratios	Leverage ratio (4)	8.9		8.5		8.9		40 bps	0 bps
	Total risk based capital (4)	15.3		15.9		16.1		(60 bps)	(80 bps)

1. Pre-provisionnet revenue (PPNR) is calculated as the sum of taxable equivalent net interest income and noninterest income less noninterest expense (except provision for credit losses). Dollars in millions. For a reconciliation of this non-GAAP financial measure, see slides 25-26.(2) Dollars in millions. (3)Taxable equivalent. (4) Amounts are estimates as of December 31, 2021. Please see reconciliation on slides 25-26 for more details. (5) Percentage changes are annualized.

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Commercial Lending Focus

Loans from Continuing Operations	Highlights

				$2,249	$2,367	PPP
				$74
				Other(3)
				$192	$198	Consumer
			$1,874	$65
			$176
		$1,728	$73
				CRE(2)
	$1,519	$80			$775
Mortgage	$62		$686	$681
Warehouse
	$653
	$605
				$1,134	$1,302	Commercial(1)
		$944	$1,063
	$790
	12/31/2017	12/31/2018	12/31/2019	12/31/2020	12/31/2021
Loan yield	4.27%	5.01%	5.26%	3.89%	3.86%
Loan yield excluding PPP loans			3.86%	3.75%

Dollars in millions. Prior periods have been retrospectively adjusted for the impact of discontinued operations.

1. Commercial loans include commercial and industrial and owner occupied CRE loans. (2) CRE loans include non-owner occupied and construction and land. (3) Other loans include residential mortgages, home equity, and other loans.

• Loans held for investment, excluding PPP loans, increased $123.8 million, or 22% annualized from the third quarter and 14% year-over-year

Floating

46%Fixed

53%

Owner-occupied	Residential 3%	PPP 1%
Consumer and other 8%
CRE 19%

Multifamily 3%

Construction & Land 7%

	Commercial
C&I 36%	Real Estate 23%

PPP 1%

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