10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

FORM 10-Q

_______________________________________________

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from              to             

COMMISSION FILE NO. 001-37615

_________________________________________________

ATLANTIC CAPITAL BANCSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

_________________________________________________

Georgia	20-5728270
(State of Incorporation)	(I.R.S. Employer Identification No.)
3280 Peachtree Road NE, Suite 1600 Atlanta, Georgia	30305
(Address of principal executive offices)	(Zip Code)

(404) 995-6050

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨		Accelerated filer	ý
Non-accelerated filer	¨	(Do not check if a smaller reporting company)
			Smaller reporting company	¨
			Emerging growth company	ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Stock, no par value: 25,578,798 shares outstanding as of May 1, 2017

Atlantic Capital Bancshares, Inc. and Subsidiary

Form 10-Q

INDEX

		Page No.
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets - March 31, 2017 and December 31, 2016	1
	Consolidated Statements of Income - Three Months ended March 31, 2017 and 2016	2
	Consolidated Statements of Comprehensive Income - Three Months ended March 31, 2017 and 2016	3
	Consolidated Statements of Shareholders’ Equity - Three Months ended March 31, 2017 and 2016	4
	Consolidated Statements of Cash Flows - Three Months ended March 31, 2017 and 2016	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	52
Item 4.	Controls and Procedures	52
PART II.	OTHER INFORMATION	53
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	53
Item 4.	Mine Safety Disclosures	53
Item 5.	Other Information	53
Item 6.	Exhibits	53
SIGNATURES		54
EXHIBIT INDEX		55

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Atlantic Capital Bancshares, Inc. and Subsidiary

Consolidated Balance Sheets

	March 31, 2017			December 31, 2016
(in thousands, except share data)	(unaudited)
ASSETS
Cash and due from banks	$	34,626		$	36,790
Interest-bearing deposits in banks	158,920			118,039
Other short-term investments	20,870			10,896
Cash and cash equivalents	214,416			165,725
Securities available-for-sale	456,942			347,705
Other investments	28,331			23,806
Loans held for sale	29,241			35,219
Loans held for investment	1,901,724			1,981,330
Less: allowance for loan losses	(19,939		)	(20,595		)
Loans held for investment, net	1,881,785			1,960,735
Branch premises held for sale	2,897			2,995
Premises and equipment, net	12,308			11,958
Bank owned life insurance	62,516			62,160
Goodwill and intangible assets, net	29,186			29,567
Other real estate owned	1,869			1,872
Other assets	82,587			85,801
Total assets	$	2,802,078		$	2,727,543

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	606,386		$	643,471
Interest-bearing checking	259,760			264,062
Savings	30,756			27,932
Money market	916,390			912,493
Time	150,867			157,810
Brokered deposits	209,385			200,223
Total deposits	2,173,544			2,205,991
Deposits to be assumed in branch sale	29,495			31,589
Federal Home Loan Bank borrowings	217,000			110,000
Long-term debt	49,408			49,366
Other liabilities	21,664			26,939
Total liabilities	2,491,111			2,423,885
SHAREHOLDERS’ EQUITY
Preferred Stock, no par value – 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2017 and December 31, 2016	—			—
Common stock, no par value – 100,000,000 shares authorized; 25,535,013 and 25,093,135 shares issued and outstanding as of March 31, 2017, and December 31, 2016, respectively	296,608			292,747
Retained earnings	19,766			16,536
Accumulated other comprehensive (loss) income	(5,407		)	(5,625		)
Total shareholders’ equity	310,967			303,658
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,802,078		$	2,727,543

See Accompanying Notes to Consolidated Financial Statements

1

Atlantic Capital Bancshares, Inc. and Subsidiary

Consolidated Statements of Income

(Unaudited)

	Three Months Ended
	March 31,
(in thousands, except per share data)	2017			2016
INTEREST INCOME
Loans, including fees	$	19,994		$	19,625
Investment securities – available-for-sale	2,018			1,601
Interest and dividends on other interest-earning assets	449			273
Total interest income	22,461			21,499
INTEREST EXPENSE
Interest on deposits	2,047			1,673
Interest on Federal Home Loan Bank advances	302			44
Interest on federal funds purchased and securities sold under agreements to repurchase	36			67
Interest on long-term debt	823			810
Other	—			38
Total interest expense	3,208			2,632
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES	19,253			18,867
Provision for loan losses	634			368
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	18,619			18,499
NONINTEREST INCOME
Service charges	1,349			1,498
Gain on sales of securities available-for-sale	—			33
Gain on sales of other assets	78			48
Mortgage income	257			339
Trust income	407			314
Derivatives income	(51		)	65
Bank owned life insurance	378			393
SBA lending activities	1,227			880
TriNet lending activities	20			383
Other noninterest income	192			467
Total noninterest income	3,857			4,420
NONINTEREST EXPENSE
Salaries and employee benefits	11,065			10,555
Occupancy	1,230			1,100
Equipment and software	805			686
Professional services	904			748
Postage, printing and supplies	85			169
Communications and data processing	987			916
Marketing and business development	270			267
FDIC premiums	314			398
Merger and conversion costs	—			749
Amortization of intangibles	470			762
Foreclosed property/problem asset expense	3			104
Other noninterest expense	1,611			1,812
Total noninterest expense	17,744			18,266
INCOME BEFORE PROVISION FOR INCOME TAXES	4,732			4,653
Provision for income taxes	1,502			1,722
NET INCOME	$	3,230		$	2,931
NET INCOME PER SHARE:
Net income per share – basic	$	0.13		$	0.12
Net income per share – diluted	$	0.13		$	0.12

See Accompanying Notes to Consolidated Financial Statements

2

Atlantic Capital Bancshares, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended
	March 31,
(in thousands)	2017			2016
Net income	$	3,230		$	2,931
Other comprehensive income
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains arising during the period, net of tax of $227 and $1,640, respectively	364			2,635
Reclassification adjustment for gains included in net income net of tax of $0 and ($13), respectively	—			(20		)
Unrealized gains on available-for-sale securities, net of tax	364			2,615
Cash flow hedges:
Net unrealized derivative (losses) gains on cash flow hedges, net of tax of ($91) and $364, respectively	(146		)	573
Changes from cash flow hedges	(146		)	573
Other comprehensive income, net of tax	218			3,188
Comprehensive income	$	3,448		$	6,119

See Accompanying Notes to Consolidated Financial Statements

3

Atlantic Capital Bancshares, Inc. and Subsidiary

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Common Stock					Accumulated Other Comprehensive Income (Loss)
(in thousands, except share data)	Shares	Amount		Retained Earnings					Total
Balance - December 31, 2015	24,425,546	$	286,367	$	3,141	$	(1,516	)	$	287,992
Comprehensive income:
Net Income	—	—		2,931		—			2,931
Change in unrealized gains on investment securities available-for-sale, net	—	—		—		2,615			2,615
Change in unrealized gains on cash flow hedges	—	—		—		573			573
Total comprehensive income									6,119
Issuance of restricted stock	9,500	—		—		—			—
Issuance of common stock for option exercises	68,628	534		—		—			534
Issuance of common stock for long-term incentive plan	66,149	884		—		—			884
Restricted stock activity	—	239		—		—			239
Stock-based compensation	—	247		—		—			247
Balance - March 31, 2016	24,569,823	$	288,271	$	6,072	$	1,672		$	296,015
Balance - December 31, 2016	25,093,135	$	292,747	$	16,536	$	(5,625	)	$	303,658
Comprehensive income:
Net Income	—	—		3,230		—			3,230
Change in unrealized gains on investment securities available-for-sale, net	—	—		—		364			364
Change in unrealized gains (losses) on cash flow hedges	—	—		—		(146		)	(146		)
Total comprehensive income									3,448
Issuance of common stock for option exercises	380,079	2,281		—		—			2,281
Issuance of common stock for long-term incentive plan	61,799	1,209		—		—			1,209
Restricted stock activity	—	229		—		—			229
Stock-based compensation	—	142		—		—			142
Balance - March 31, 2017	25,535,013	$	296,608	$	19,766	$	(5,407	)	$	310,967

See Accompanying Notes to Consolidated Financial Statements

4

Atlantic Capital Bancshares, Inc. and Subsidiary

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended
	March 31,
(in thousands)	2017			2016
OPERATING ACTIVITIES
Net income	$	3,230		$	2,931
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses	634			368
Depreciation, amortization, and accretion	1,428			1,352
Amortization of restricted stock compensation	229			239
Stock option compensation	142			247
Gain on sales of available-for-sale securities	—			(33		)
Net gains on sales of other real estate owned	(78		)	(48		)
Net increase in cash value of bank owned life insurance	(356		)	(373		)
Origination of servicing rights	(267		)	(429		)
Proceeds from sales of SBA loans	11,698			10,318
Net gains on sale of SBA loans	(762		)	(777		)
Proceeds from sales of TriNet loans	—			29,811
Net gains on sale of TriNet loans	—			(383		)
Changes in operating assets and liabilities -
Net change in loans held for sale	5,978			(12,946		)
Net (increase) decrease in other assets	3,774			(7,214		)
Net increase (decrease) in accrued expenses and other liabilities	(4,202		)	(1,345		)
Net cash provided by operating activities	21,448			21,718
INVESTING ACTIVITIES
Activity in securities available-for-sale:
Prepayments	10,804			9,242
Maturities and calls	1,000			5,102
Sales	—			4,953
Purchases	(121,427		)	(36,231		)
Net decrease (increase) in loans held for investment	67,244			(123,659		)
(Purchases) proceeds of Federal Home Loan Bank stock, net	(4,631		)	(3,894		)
Proceeds from sales of other real estate	216			321
Purchases of premises and equipment, net	(703		)	(198		)
Net cash used in investing activities	(47,497		)	(144,364		)
FINANCING ACTIVITIES
Net change in deposits	(34,541		)	20,244
Proceeds from Federal Home Loan Bank advances	474,000			155,000
Repayments of Federal Home Loan Bank advances	(367,000		)	(95,000		)
Proceeds from exercise of stock options	2,281			571
Net cash provided by financing activities	74,740			80,815
NET CHANGE IN CASH AND CASH EQUIVALENTS	48,691			(41,831		)
CASH AND CASH EQUIVALENTS – beginning of period	165,725			202,885
CASH AND CASH EQUIVALENTS – end of period	$	214,416		$	161,054
	Three Months Ended
	March 31,
	2017			2016
SUPPLEMENTAL SCHEDULE OF CASH FLOWS
Interest paid	$	4,028		$	3,393
Income taxes paid	$	110		$	93

See Accompanying Notes to Consolidated Financial Statements

5

ATLANTIC CAPITAL BANCSHARES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Basis of Presentation

The accounting and financial reporting policies of Atlantic Capital Bancshares, Inc. (“Atlantic Capital”) and its subsidiary conform to accounting principles generally accepted in the United States of America (“GAAP”) and general banking industry practices. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated.

In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Atlantic Capital’s filing on Form 10-K. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods. Certain prior period amounts have been reclassified to conform to the current year presentation.

NOTE 2 – ACCOUNTING STANDARDS UPDATES AND RECENTLY ADOPTED STANDARDS

In March 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-08 “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This guidance shortens the premium amortization period for certain callable debt securities by requiring amortization to the earliest call date. The standard is effective for public companies for annual and interim periods beginning after December 15, 2020. The adoption of this update is not expected to have a material impact on Atlantic Capital’s consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which intends to simplify goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. The update instead requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. ASU 2017-04 must be applied prospectively and is effective for the Company on January 1, 2020. Early adoption is permitted. Atlantic Capital does not expect the new guidance to have a material impact on its financial condition or results of operation.

In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments provide guidance on the following eight specific cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. The amendments are effective for public companies for fiscal years beginning after December 31, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. As this guidance only affects the classification within the statement of cash flows, this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU 2016-13 is effective for public companies for annual periods beginning after December 13, 2019, including interim periods within those fiscal years. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Atlantic Capital is in the process of evaluating the impact of the adoption of ASU 2016-13 on the Company’s consolidated financial statements and disclosures.

6

In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 simplify several aspects of accounting for employee share-based payments including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some areas of the simplification apply only to nonpublic entities. The new guidance will require all income tax effects of awards to be recognized as income tax expense or benefit in the income statement when the awards vest or are settled and additional paid in capital pools will be eliminated. The guidance requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. Companies will be required to account for forfeitures of share-based payments by recognizing forfeitures of awards as they occur or estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as currently required, through an accounting policy election. The guidance will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s income tax withholding obligation. The guidance requires an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on the statement of cash flows. ASU 2016-09 became effective for the Company on January 1, 2017 and did not have a material effect on its financial position or results of operations.

In February 2016, the FASB issued Accounting Standards Update 2016-2, Leases. Under the new guidance, leases classified as operating leases under previous GAAP must be recorded on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Atlantic Capital is evaluating the significance and other effects of adoption on the consolidated financial statements and related disclosures.

In January 2016, the FASB issued ASU 2016-1, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities. The guidance in this update requires that equity investments (except those accounting for under the equity method of accounting) be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The guidance also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. In addition, the guidance addresses various disclosure and presentation issues related to financial instruments. For public entities, this update is effective for fiscal years beginning after December 15, 2017 with early application permitted. The adoption of this update is not expected to have a material impact on Atlantic Capital’s consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers. This update is a joint project with the International Accounting Standards Board initiated to clarify the principles for recognizing revenue and to develop a common revenue standard that is meant to remove inconsistencies and weaknesses in revenue requirements, provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices, provide more useful information to users of financial statements and simplify the preparation of financial statements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public companies, this guidance is effective for annual and interim periods beginning after December 15, 2017. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, Atlantic Capital does not expect this ASU to have a material impact on net interest income and securities gains. Atlantic Capital is evaluating the impact to other revenue streams such as service charges and trust income.

7

NOTE 3 – ACQUISITIONS AND DIVESTITURES

On October 31, 2015, Atlantic Capital completed the acquisition of First Security Group, Inc. (“First Security”). First Security operated twenty-five branches in Georgia and Tennessee. In connection with the acquisition, Atlantic Capital acquired approximately $801.1 million of loans and assumed approximately $970.0 million of deposits.

Acquisition-related costs totaled $0 and $749,000 for the three months ended March 31, 2017 and 2016, respectively, and were included in noninterest expense in the consolidated income statement. Acquisition related costs primarily include severance costs, professional services, data processing fees related to systems conversion and other noninterest expenses.

Divestiture of Branches

On December 17, 2015, the Bank entered into two separate definitive agreements to sell seven branches in the Bank’s Tennessee market. The agreement with First Freedom Bank included the sale of three branches located in Algood, Cookeville and Gainesboro, Tennessee for a premium of 2.25% of deposits. The agreement with Athens Federal Community Bank, N.A. included the sale of four branches in Athens, Lenoir City, Madisonville and Sweetwater, Tennessee for a premium of 3.50% of deposits. Both transactions closed in the second quarter of 2016 and resulted in a combined gain of $3.9 million as well as a reduction of approximately $191.0 million in deposits, approximately $34.7 million in loans and approximately $8.6 million in other assets. The gain was somewhat reduced by an impairment of $2.0 million in core deposit intangibles, which was offset by a $344,000 reversal in time deposit premium. There were also $305,000 of expenses associated with the divestitures included in noninterest expense in the second quarter of 2016.

On December 9, 2016, Atlantic Capital entered into a definitive agreement to sell one branch in Cleveland, Tennessee, to SmartBank. This branch divestiture includes the sale of approximately $29 million in deposits and approximately $31 million in loans and other assets. Subject to customary closing conditions, including the receipt of all necessary regulatory approvals, the branch sale is expected to be completed during the second quarter of 2017.

8

NOTE 4 – BALANCE SHEET OFFSETTING

Atlantic Capital enters into reverse repurchase agreements in order to invest short-term funds. The Company enters into repurchase agreements for short-term financing needs.

The following table presents a summary of amounts outstanding under reverse repurchase agreements, repurchase agreements, and derivative financial instruments including those entered into in connection with the same counterparty under master netting agreements as of March 31, 2017 and December 31, 2016. While these agreements are typically over-collateralized, U.S. GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related recognized asset or liability for each counterparty.

(in thousands)							Gross Amounts not Offset in the Balance Sheet
March 31, 2017	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	20,870	$	—	$	20,870	$	(20,870	)	$	—		$	—
Derivatives	3,561		—		3,561		—			—			3,561
Total	$	24,431	$	—	$	24,431	$	(20,870	)	$	—		$	3,561
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	3,642		—		3,642		(2,329		)	(1,313		)	—
Total	$	3,642	$	—	$	3,642	$	(2,329	)	$	(1,313	)	$	—
							Gross Amounts not Offset in the Balance Sheet
December 31, 2016	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	10,896	$	—	$	10,896	$	(10,896	)	$	—		$	—
Derivatives	4,310		—		4,310		—			—			4,310
Total	$	15,206	$	—	$	15,206	$	(10,896	)	$	—		$	4,310
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	4,131		—		4,131		(1,818		)	(2,313		)	—
Total	$	4,131	$	—	$	4,131	$	(1,818	)	$	(2,313	)	$	—

9

NOTE 5 – SECURITIES

The following table presents the amortized cost, unrealized gains and losses, and fair value of securities available-for-sale at March 31, 2017 and December 31, 2016.

Available-For-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
March 31, 2017
Debt securities—
U.S. Government agencies	$	35,623	$	43	$	(423	)	$	35,243
U.S. states and political divisions	98,317		163		(6,235		)	92,245
Trust preferred securities	4,734		—		(209		)	4,525
Corporate debt securities	19,857		63		(734		)	19,186
Residential mortgage-backed securities	307,460		2,686		(4,403		)	305,743
Total	$	465,991	$	2,955	$	(12,004	)	$	456,942
December 31, 2016
Debt securities—
U.S. Government agencies	$	21,485	$	24	$	(357	)	$	21,152
U.S. states and political divisions	96,908		141		(6,877		)	90,172
Trust preferred securities	4,727		—		(202		)	4,525
Corporate debt securities	19,928		72		(769		)	19,231
Residential mortgage-backed securities	214,297		2,689		(4,361		)	212,625
Total	$	357,345	$	2,926	$	(12,566	)	$	347,705

The following table presents the amortized cost and fair value of debt securities by contractual maturity at March 31, 2017. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-For-Sale
	Amortized Cost		Fair Value
	(in thousands)
Within 1 year	$	4,210	$	4,220
Over 1 year through 5 years	18,313		18,013
5 years to 10 years	58,903		57,731
Over 10 years	77,105		71,235
	158,531		151,199
Residential mortgage-backed securities	307,460		305,743
Total	$	465,991	$	456,942

10

The following table summarizes available-for-sale securities in an unrealized loss position as of March 31, 2017 and December 31, 2016.

	Less than 12 months					12 months or greater					Totals
Available-For-Sale	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
March 31, 2017
U.S. Government agencies	$	24,698	$	(336	)	2,738		$	(87	)	$	27,436	$	(423	)
U.S. states and political divisions	85,079		(6,213		)	1,420		(22		)	86,499		(6,235		)
Trust preferred securities	—		—			4,525		(209		)	4,525		(209		)
Corporate debt securities	2,524		(18		)	5,861		(716		)	8,385		(734		)
Residential mortgage-backed securities	185,914		(2,449		)	68,168		(1,954		)	254,082		(4,403		)
Totals	$	298,215	$	(9,016	)	$	82,712	$	(2,988	)	$	380,927	$	(12,004	)
December 31, 2016
U.S. Government agencies	$	12,250	$	(263	)	$	2,881	$	(94	)	$	15,131	$	(357	)
U.S. states and political divisions	87,511		(6,877		)	—		—			87,511		(6,877		)
Trust preferred securities	—		—			4,525		(202		)	4,525		(202		)
Corporate debt securities	7,886		(769		)	—		—			7,886		(769		)
Residential mortgage-backed securities	151,406		(3,231		)	32,550		(1,130		)	183,956		(4,361		)
Totals	$	259,053	$	(11,140	)	$	39,956	$	(1,426	)	$	299,009	$	(12,566	)

At March 31, 2017, there were 289 available-for-sale securities that were in an unrealized loss position. Atlantic Capital does not intend to sell and does not believe it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. Unrealized losses at March 31, 2017 and December 31, 2016 were attributable to changes in interest rates.

Management evaluates securities for other-than-temporary impairment on a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. No impairment charges were recognized during the three months endedMarch 31, 2017 or 2016.

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes securities sales activity for the three months endedMarch 31, 2017 and 2016.

	Three Months Ended March 31,
	2017		2016
	(in thousands)
Proceeds from sales	$	—	$	4,953
Gross realized gains	—		33
Gross realized losses	—		—
Net gains on sales of securities	$	—	$	33

Investment securities with a carrying value of $101.2 million and $104.9 million were pledged to secure public funds and other borrowings at March 31, 2017 and December 31, 2016, respectively.

11

NOTE 6 – LOANS AND ALLOWANCE FOR LOAN LOSSES

The composition of the loan portfolio as of March 31, 2017 and December 31, 2016, is summarized below.

	March 31, 2017			December 31, 2016
	(in thousands)
Loans held for sale
Branch loans held for sale	$	27,944		$	30,917
Other loans held for sale	1,297			4,302
Total loans held for sale	$	29,241		$	35,219
Loans held for investment
Commercial loans:
Commercial and industrial	$	544,911		$	531,061
Commercial real estate	935,588			858,778
Construction and land	135,637			219,352
Mortgage warehouse loans	58,357			147,519
Total commercial loans	1,674,493			1,756,710
Residential:
Residential mortgages	99,665			101,921
Home equity	81,438			77,358
Total residential loans	181,103			179,279
Consumer	32,525			27,338
Other	17,611			21,565
Total loans	1,905,732			1,984,892
Less net deferred fees and other unearned income	(4,008		)	(3,562		)
Less allowance for loan losses	(19,939		)	(20,595		)
Loans held for investment, net	$	1,881,785		$	1,960,735

At March 31, 2017 and December 31, 2016, loans with a carrying value of $498.3 million and $474.8 million, respectively, were pledged as collateral to secure FHLB advances and the Federal Reserve discount window.

At March 31, 2017, the carrying value and outstanding balance of Purchased Credit Impaired (“PCI”) loans accounted for under ASC 310-30 was $11.8 million and $15.0 million, respectively. At December 31, 2016, the carrying value and outstanding balance of Purchased Credit Impaired (“PCI”) loans accounted for under ASC 310-30 was $15.3 million and $18.7 million, respectively. The following table presents changes in the value of the accretable yield for acquired loans accounted for under ASC 310-30.

	Three Months Ended			Three Months Ended
	March 31, 2017			March 31, 2016
	(in thousands)
Balance at beginning of period	$	3,467		$	2,369
Additions due to acquisitions	—			—
Accretion	(444		)	(281		)
Reclassification of nonaccretable discount due to improvement in expected cash flows	251			—
Other changes, net	95			—
Balance at end of period	$	3,369		$	2,088

In addition to the accretable yield on PCI loans, the fair value adjustments on purchased loans outside the scope of ASC 310-30 are also accreted to interest income over the life of the loans. At March 31, 2017, the remaining accretable fair value discount on loans acquired through a business combination and not accounted for under ASC 310-30 was $3.6 million.

12

The allowance for loan losses represents management’s estimate of probable incurred losses in the loan portfolio as of the end of the period. It is comprised of specific reserves for impaired loans and a general allowance for pools of loans with similar characteristics not individually evaluated. The allowance is regularly evaluated for loan losses to maintain an adequate level to absorb probable current inherent losses in the loan portfolio. Factors contributing to the determination of the allowance include the credit worthiness of the borrower, changes in the value of pledged collateral, and general economic conditions. Most loan commitments rated substandard or worse are specifically reviewed for loss potential. For loans deemed to be impaired, a specific allocation is assigned based on the losses expected to be realized from those loans.

The following table presents the balance and activity in the allowance for credit losses by portfolio segment for the three months endedMarch 31, 2017 and 2016.

	2017												2016
Three Months Ended March 31,	Commercial			Residential			Consumer			Total			Commercial			Residential			Consumer			Total
	(in thousands)
Allowance for loan losses:
Beginning balance	$	18,717		$	1,418		$	460		$	20,595		$	16,537		$	1,981		$	387		$	18,905
Provision for loan losses	297			34			303			634			664			(479		)	183			368
Loans charged-off	(913		)	(46		)	(332		)	(1,291		)	(1,605		)	—			(146		)	(1,751		)
Recoveries	—			—			1			1			17			—			69			86
Total ending allowance balance	$	18,101		$	1,406		$	432		$	19,939		$	15,613		$	1,502		$	493		$	17,608

The general component of the allowance for loan losses is based on the incurred losses inherent in the portfolio. The loss factors are determined through the generation of probabilities of default (“PDs”) and losses given default (“LGDs”) for groups of similar loans with similar credit grades where Loss Rate = PD x LGD. The PDs and LGDs for the loan portfolio are calculated based on Atlantic Capital’s loss history as well as available market-based data. The loss factor for each pool of loans is adjusted based on Qualitative and Environmental factors to account for conditions in the current environment which management believes are likely to cause a difference between the calculated loss based on historical performance and the incurred loss in the existing portfolio. These factors include: changes in policies and procedures, changes in the economy, changes in nature or volume of the portfolio and in the terms of loans, changes in lending management, changes in past dues and credit migration, changes in the loan review system, changes in the value of collateral and concentration risk and changes in external factors, such as competition, legal and regulatory. On a quarterly basis, management evaluates these factors in order to determine an adjustment unique to Atlantic Capital and its market.

Charge-offs are recognized when the amount of the loss is quantifiable and timing is known. Collateral based loan charge-offs are measured based on the difference between the loan’s carrying value, including deferred fees, and the estimated net realizable value of the loan. When assessing property value for the purpose of determining a charge-off, a third-party appraisal or an independently derived internal evaluation is generally employed.

A loan is considered to be impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered TDRs and classified as impaired. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. A specific allowance is established for individually evaluated impaired loans as needed. Reserves on impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the observable market price, or the fair value of the underlying collateral of the loan if the loan is collateral dependent.

Nonaccrual loans include both homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans. Atlantic Capital’s policy is to place loans on nonaccrual status, when, in the opinion of management, the principal and interest on a loan is not likely to be repaid in accordance with the loan terms or when the loan becomes 90 days past due and is not both well secured and in the process of collection. When a loan is classified on nonaccrual status, interest previously accrued but not collected is reversed against current interest revenue. Principal and interest payments received on a nonaccrual loan are applied to reduce outstanding principal.

PCI loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans accounted for under ASC 310-30 were not classified as nonaccrual at March 31, 2017 or December 31, 2016, as the carrying value of the respective loan or pool of loans’ cash flows were considered estimable and collection was probable. Therefore, interest revenue, through accretion of the difference between the carrying value of the loans and the expected cash flows (accretable yield), is being recognized on all acquired loans being accounted for under ASC 310-30.

13

The balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method is presented in the following table as of March 31, 2017 and December 31, 2016.

March 31, 2017	Commercial		Residential		Consumer		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	2,236	$	4	$	—	$	2,240
Collectively evaluated for impairment	15,792		1,334		430		17,556
PCI	73		68		2		143
Total ending allowance balance	$	18,101	$	1,406	$	432	$	19,939
Loans:
Loans individually evaluated for impairment	$	12,361	$	894	$	—	$	13,255
Loans collectively evaluated for impairment	1,654,457		176,053		50,126		1,880,636
PCI	7,675		4,156		10		11,841
Total ending loans balance	$	1,674,493	$	181,103	$	50,136	$	1,905,732
December 31, 2016	Commercial		Residential		Consumer		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	2,626	$	58	$	—	$	2,684
Collectively evaluated for impairment	16,018		1,360		459		17,837
PCI	73		—		1		74
Total ending allowance balance	$	18,717	$	1,418	$	460	$	20,595
Loans:
Loans individually evaluated for impairment	$	13,687	$	398	$	—	$	14,085
Loans collectively evaluated for impairment	1,732,324		174,338		48,892		1,955,554
PCI	10,699		4,543		11		15,253
Total ending loans balance	$	1,756,710	$	179,279	$	48,903	$	1,984,892

14

The following tables present information on Atlantic Capital’s impaired loans for the three months endedMarch 31, 2017 and 2016:

	For the Three Months Ended March 31,
	2017										2016
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Balance of Recorded Investment While Impaired		Interest Income Recognized During Impairment		Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Balance of Recorded Investment While Impaired		Interest Income Recognized During Impairment
	(in thousands)
Impaired loans with no related allowance recorded:
Commercial and industrial	$	1,132	$	1,069	$	—	$	1,550	$	17	$	2,779	$	2,779	$	—	$	2,743	$	36
Commercial real estate	2,388		2,226		—		2,303		—		2,209		2,068		—		2,068		14
Construction and land	—		—		—		—		—		—		—		—		—		—
Residential mortgages	244		198		—		225		—		—		—		—		—		—
Home equity	549		549		—		549		—		—		—		—		—		—
Mortgage warehouse	—		—		—		—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—		—		—		—
Total	$	4,313	$	4,042	$	—	$	4,627	$	17	$	4,988	$	4,847	$	—	$	4,811	$	50
Impaired loans with an allowance recorded:
Commercial and industrial	$	8,316	$	8,316	$	2,077	$	8,357	$	108	$	—	$	—	$	—	$	—	$	—
Commercial real estate	750		750		159		753		7		—		—		—		—		—
Construction and land	—		—		—		—		—		—		—		—		—		—
Residential mortgages	147		147		4		147		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—		—		—		—
Mortgage warehouse	—		—		—		—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—		—		—		—
Total	$	9,213	$	9,213	$	2,240	$	9,257	$	115	$	—	$	—	$	—	$	—	$	—
Total impaired loans	$	13,526	$	13,255	$	2,240	$	13,884	$	132	$	4,988	$	4,847	$	—	$	4,811	$	50

Atlantic Capital evaluates loans in accordance with ASC 310-40, Troubled Debt Restructurings by Creditors. Troubled debt restructurings (“TDR”) are loans in which Atlantic Capital has modified the terms or granted an economic concession to a borrower who is experiencing financial difficulties. These modifications may include interest rate reductions, term extensions and other concessions intended to minimize losses.

As of March 31, 2017 and December 31, 2016, the Company had a recorded investment in TDRs of $5.5 million and $6.6 million, respectively. The Company had commitments to lend additional funds of $781,000 and $387,000 on loans modified as TDRs, as of March 31, 2017 and December 31, 2016, respectively. The Company did not modify any new loans as a TDR during the three months endedMarch 31, 2017 or 2016 and there were no subsequent defaults on prior TDRs.

15

Atlantic Capital individually rates loans based on internal credit risk ratings using numerous factors, including thorough analysis of historical and expected cash flows, consumer credit risk scores (FICO scores), rating agency information, LTV ratios, collateral, collection experience, and other internal metrics. Atlantic Capital uses a dual rating system. The likelihood of default of a credit transaction is graded in the Obligor Rating. The risk of loss given default is graded in the Facility Rating. The Obligor Rating is determined through credit analysis. Facility Ratings are used to describe the value to the Bank that the collateral represents. Facility Ratings are based on the collateral package or market expectations regarding the value or liquidity of the collateral. Ratings are generally reviewed at least annually or more frequently if there is a material change in creditworthiness. Exceptions to this policy may include well collateralized term loans and loans to individuals with limited exposure or complexity.

Atlantic Capital uses the following definitions for risk ratings:

Pass: Loans that are analyzed individually as part of the above described process and that do not meet the criteria of special mention, substandard or doubtful.

Special Mention: Loans classified as special mention have a potential weakness that requires management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

16

As of March 31, 2017 and December 31, 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows.

	Pass		Special Mention		Substandard Accruing		Substandard Nonaccruing		Doubtful		Total
	(in thousands)
March 31, 2017
Commercial and industrial	$	514,887	$	6,066	$	20,455	$	25	$	—	$	541,433
Commercial real estate	919,769		7,160		2,884		2,031		—		931,844
Construction and land	130,373		4,728		63		20		—		135,184
Residential mortgages	94,589		1,505		648		485		—		97,227
Home equity	78,682		43		344		651		—		79,720
Mortgage warehouse	58,357		—		—		—		—		58,357
Consumer/Other	50,027		99		—		—		—		50,126
Total loans, excluding PCI loans	$	1,846,684	$	19,601	$	24,394	$	3,212	$	—	$	1,893,891
Commercial and industrial	$	2,313	$	315	$	218	$	—	$	632	$	3,478
Commercial real estate	3,200		216		328		—		—		3,744
Construction and land	408		8		37		—		—		453
Residential mortgages	99		1,122		1,217		—		—		2,438
Home equity	353		824		541		—		—		1,718
Mortgage warehouse	—		—		—		—		—		—
Consumer/Other	—		1		8		—		1		10
Total PCI loans	$	6,373	$	2,486	$	2,349	$	—	$	633	$	11,841

	Pass		Special Mention		Substandard Accruing		Substandard Nonaccruing		Doubtful		Total
	(in thousands)
December 31, 2016
Commercial and industrial	$	494,617	$	3,160	$	26,399	$	3	$	471	$	524,650
Commercial real estate	843,924		5,513		5,571		—		—		855,008
Construction and land	213,981		4,789		64		—		—		218,834
Residential mortgages	97,660		586		747		147		—		99,140
Home equity	75,031		168		397		—		—		75,596
Mortgage warehouse	147,519		—		—		—		—		147,519
Consumer/Other	48,680		190		22		—		—		48,892
Total loans, excluding PCI loans	$	1,921,412	$	14,406	$	33,200	$	150	$	471	$	1,969,639
Commercial and industrial	$	4,650	$	299	$	614	$	—	$	848	$	6,411
Commercial real estate	477		240		2,716		—		337		3,770
Construction and land	229		8		281		—		—		518
Residential mortgages	59		1,232		1,016		—		474		2,781
Home equity	364		834		564		—		—		1,762
Mortgage warehouse	—		—		—		—		—		—
Consumer/Other	1		—		10		—		—		11
Total PCI loans	$	5,780	$	2,613	$	5,201	$	—	$	1,659	$	15,253

17

Atlantic Capital monitors loans by past due status. The following table presents the aging of the recorded investment in past due loans as of March 31, 2017 and December 31, 2016 by class of loans.

	As of March 31, 2017
	Accruing Current		Accruing 30-89 Days Past Due		Accruing 90+ Days Past Due		Nonaccruing		PCI Loans		Total
	(in thousands)
Loans by Classification
Commercial and industrial	$	541,286	$	122	$	—	$	25	$	3,478	$	544,911
Commercial real estate	927,957		1,199		657		2,031		3,744		935,588
Construction and land	135,164		—		—		20		453		135,637
Residential mortgages	96,423		205		114		485		2,438		99,665
Home equity	78,715		354		—		651		1,718		81,438
Mortgage warehouse	58,357		—		—		—		—		58,357
Consumer	49,779		347		—		—		10		50,136
Total Loans	$	1,887,681	$	2,227	$	771	$	3,212	$	11,841	$	1,905,732

	As of December 31, 2016
	Accruing Current		Accruing 30-89 Days Past Due		Accruing 90+ Days Past Due		Nonaccruing		PCI Loans		Total
	(in thousands)
Loans by Classification
Commercial and industrial	$	520,908	$	3,079	$	189	$	474	$	6,411	$	531,061
Commercial real estate	852,626		2,382		—		—		3,770		858,778
Construction and land	218,290		544		—		—		518		219,352
Residential mortgages	97,901		664		428		147		2,781		101,921
Home equity	74,420		884		292		—		1,762		77,358
Mortgage warehouse	147,519		—		—		—		—		147,519
Consumer	48,558		249		85		—		11		48,903
Total Loans	$	1,960,222	$	7,802	$	994	$	621	$	15,253	$	1,984,892

18

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill and other intangible assets as of March 31, 2017 and December 31, 2016 is summarized below:

	March 31,			December 31,
	2017			2016
	(in thousands)
Core deposit intangible	$	9,544		$	9,544
Less: accumulated amortization	(3,441		)	(2,971		)
Less: impairment related to divested branches	(1,949		)	(1,949		)
Core deposit intangible, net	4,154			4,624
Servicing assets, net	3,273			3,184
Total other intangibles, net	7,427			7,808
Goodwill	21,759			21,759
Total goodwill and other intangible assets, net	$	29,186		$	29,567

During the three months ended March 31, 2017 and 2016, Atlantic Capital recorded measurement period adjustments that decreased goodwill by $0 and $906,000, respectively. The adjustments reduced the TriNet Servicing Asset, increased the book value of securities available-for-sale, and increased the Deferred Tax Asset.

There were no goodwill impairment charges recorded in the three months ended March 31, 2017 and 2016, respectively. The following table presents activity for goodwill and other intangible assets:

	Goodwill			Core Deposit Intangible			Total
	(in thousands)
Balance at December 31, 2015	$	23,352		$	9,018		$	32,370
Amortization	—			(762		)	(762		)
Measurement period adjustments	(906		)	—			(906		)
Balance at March 31, 2016	$	22,446		$	8,256		$	30,702
Balance at December 31, 2016	$	21,759		$	4,624		$	26,383
Amortization	—			(470		)	(470		)
Balance at March 31, 2017	$	21,759		$	4,154		$	25,913

NOTE 8 – SERVICING RIGHTS

SBA Servicing Rights

SBA servicing rights are initially recorded at fair value. Subsequently, Atlantic Capital accounts for SBA servicing rights using the amortization method and they are included in other assets. As of March 31, 2017 and December 31, 2016, the balance of SBA loans sold and serviced by Atlantic Capital totaled $117.8 million and $107.0 million, respectively.

Changes in the balance of servicing assets for the three months endedMarch 31, 2017 and 2016 are presented in the following table.

	Three months ended March 31,
SBA Loan Servicing Rights	2017			2016
	(in thousands)
Beginning carrying value, net	$	2,359		$	1,687
Additions	267			202
Amortization	(131		)	(29		)
Impairment	—			—
Ending carrying value	$	2,495		$	1,860

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At March 31, 2017, the sensitivity of the fair value of the SBA loan servicing rights to immediate changes in key economic assumptions are presented in the table below.

Sensitivity of the SBA Servicing Asset	March 31, 2017
	(dollars in thousands)
Fair value of retained servicing assets	$	2,694
Weighted average life	6.55 years
Prepayment speed:	7.68			%
Decline in fair value due to a 10% adverse change	$	(89	)
Decline in fair value due to a 20% adverse change	$	(155	)
Weighted average discount rate	12.23			%
Decline in fair value due to a 100 bps adverse change	$	(99	)
Decline in fair value due to a 200 bps adverse change	$	(172	)

The above sensitivities are hypothetical and should be used with caution. As the amounts indicate, changes in fair value based on valuation assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

TriNet Servicing Rights

Changes in the balance of TriNet servicing assets for the three months endedMarch 31, 2017 and 2016 are presented in the following table.

	Three months ended March 31,
TriNet Servicing Rights	2017			2016
	(in thousands)
Beginning carrying value, net	$	825		$	1,175
Additions	—			227
Amortization	(47		)	(50		)
Impairment	—			—
Ending carrying value	$	778		$	1,352

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At March 31, 2017, the sensitivity of the fair value of the TriNet servicing rights to immediate changes in key economic assumptions are presented in the table below.

Sensitivity of the TriNet Servicing Rights	March 31, 2017
	(dollars in thousands)
Fair value of retained servicing assets	$	809
Weighted average life	8.70 years
Prepayment speed:	5.00			%
Decline in fair value due to a 10% adverse change	$	(9	)
Decline in fair value due to a 20% adverse change	$	(21	)
Weighted average discount rate	8.00			%
Decline in fair value due to a 100 bps adverse change	$	(21	)
Decline in fair value due to a 200 bps adverse change	$	(43	)

The above sensitivities are hypothetical and should be used with caution. As the amounts indicate, changes in fair value based on valuation assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

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NOTE 9 – OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) for Atlantic Capital consists of changes in net unrealized gains and losses on investment securities available-for-sale and derivatives.  The following tables present a summary of the changes in accumulated other comprehensive income (loss) balances for the applicable periods.

	For the Three Months Ended
	March 31, 2017
	Pre-Tax Amount			Income Tax (Expense) Benefit			After-Tax Amount
	(in thousands)
Accumulated other comprehensive income (loss) beginning of period	$	(9,144	)	$	3,519		$	(5,625	)
Unrealized net gains (losses) on investment securities available-for-sale	591			(227		)	364
Reclassification adjustment for net realized gains (losses) on investment securities available-for-sale	—			—			—
Unrealized net gains (losses) on derivatives	(237		)	91			(146		)
Accumulated other comprehensive income (loss) end of period	$	(8,790	)	$	3,383		$	(5,407	)

	For the Three Months Ended
	March 31, 2016
	Pre-Tax Amount			Income Tax (Expense) Benefit			After-Tax Amount
	(in thousands)
Accumulated other comprehensive income (loss) beginning of period	$	(2,455	)	$	939		$	(1,516	)
Unrealized net gains (losses) on investment securities available-for-sale	4,275			(1,640		)	2,635
Reclassification adjustment for net realized gains on investment securities available-for-sale	(33		)	13			(20		)
Unrealized net gains (losses) on derivatives	937			(364		)	573
Accumulated other comprehensive income (loss) end of period	$	2,724		$	(1,052	)	$	1,672

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NOTE 10 – EARNINGS PER COMMON SHARE

Basic earnings per share amounts are computed by dividing net income by the weighted average number of shares of common stock outstanding.

Diluted earnings per share amounts are computed by dividing net income by the weighted average number of shares of common stock outstanding and the dilutive effects of the shares awarded under the stock option plan, based on the treasury stock method using an average fair market value of the stock during the respective periods.

The following table represents the earnings per share calculations for the three months endedMarch 31, 2017 and 2016.

	Three Months Ended
	March 31,
	2017		2016
(in thousands, except share and per share amounts)
Net income available to common shareholders	$	3,230	$	2,931
Weighted average shares outstanding
Basic (1)	25,320,690		24,485,900
Effect of dilutive securities:
Stock options and warrants	351,596		507,697
Diluted	25,672,286		24,993,597
Income per common share:
Basic	$	0.13	$	0.12
Diluted	$	0.13	$	0.12
(1) Unvested restricted shares are participating securities and included in basic share calculations.

Stock options and warrants outstanding of 747 at March 31, 2017 and 260,266 at March 31, 2016 have not been included in diluted earnings per share because to do so would have been anti-dilutive for the periods presented. These awards were considered anti-dilutive because the exercise price of the award was higher than the market value of the shares.

The Amended and Restated Articles of Incorporation of Atlantic Capital, which were approved by the Board of Directors on March 24, 2015 and by Atlantic Capital’s shareholders on May 21, 2015, authorize Atlantic Capital to issue 110,000,000 shares of capital stock, of which 10,000,000 shares are designated as preferred stock, no par value per share, and 100,000,000 shares are designated as common stock, no par value per share.

At March 31, 2017, 25,535,013 shares of common stock were issued and outstanding. At December 31, 2016, 25,093,135 shares of common stock were issued and outstanding.

The primary source of funds available to Atlantic Capital is payments of dividends from the Bank. The Bank has not paid any dividends to Atlantic Capital in 2017 or 2016. Banking laws and other regulations limit the amount of dividends a bank subsidiary may pay without prior regulatory approval. Additionally, Atlantic Capital’s ability to pay dividends to its shareholders will depend on the ability of the Bank to pay dividends to Atlantic Capital. The Bank is subject to regulatory restrictions on the payment of cash dividends, which generally may be paid only from current earnings.

NOTE 11 – DERIVATIVES AND HEDGING

Risk Management

Atlantic Capital’s objectives in using interest rate derivatives are to add stability to net interest revenue and to manage its exposure to interest rate movements. To accomplish this objective, Atlantic Capital primarily uses interest rate swaps as part of its interest rate risk management strategy.

Cash Flow Hedges

At March 31, 2017, Atlantic Capital’s interest rate swaps designated as cash flow hedges involve the payment of floating-rate amounts to a counterparty in exchange for receiving fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. At March 31, 2017 and December 31, 2016, Atlantic Capital had interest rate swaps designated as cash flow hedges with an aggregate notional amount of $50.0 million.

No hedge ineffectiveness gains or losses were recognized on active cash flow hedges for the three months ended March 31, 2017 or 2016. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded

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in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Atlantic Capital expects that approximately $198,000 will be reclassified as an increase to loan interest income over the next twelve months related to these cash flow hedges.

Customer Swaps

Atlantic Capital also enters into derivative contracts, which consist of interest rate swaps, to facilitate the needs of clients desiring to manage interest rate risk. These swaps are not designated as accounting hedges under ASC 815, Derivatives and Hedging. In order to economically hedge the interest rate risk associated with offering this product, Atlantic Capital simultaneously enters into derivative contracts with third parties to offset the customer contracts, such that Atlantic Capital minimizes its net risk exposure resulting from such transactions. The derivative contracts are structured such that the notional amounts reduce over time to generally match the expected amortization of the underlying loans. These derivatives are not speculative and arise from a service provided to clients.

Atlantic Capital’s derivative instruments are recorded at fair value in other assets and accrued interest receivable and other liabilities and accrued interest payable in the Consolidated Balance Sheets. The changes in the fair value of the derivative instruments are recognized in other noninterest income in the Consolidated Statements of Income. At March 31, 2017 and December 31, 2016, Atlantic Capital had interest rate swaps related to this program with an aggregate notional amount of $138.9 million and $140.7 million, respectively.

Atlantic Capital acquired a loan level hedging program, which First Security utilized to accommodate clients preferring a fixed rate loan. The loan documents include an addendum with a zero premium collar. The zero premium collar is a cap and a floor at the same interest rate, resulting in a fixed rate to the borrower. To hedge this embedded option the Bank entered into a dealer facing trade exactly mirroring the terms in the loan addendum.

Counterparty Credit Risk

As a result of its derivative contracts, Atlantic Capital is exposed to credit risk. Specifically approved counterparties and exposure limits are defined. On a quarterly basis, the customer derivative contracts and related counterparties are evaluated for credit risk and an adjustment is made to the contract’s fair value. This adjustment is recognized in the Consolidated Statements of Income.

Most derivative contracts with clients are secured by collateral. Additionally, in accordance with the interest rate agreements with derivatives dealers, Atlantic Capital may be required to post margin to these counterparties. At March 31, 2017 and December 31, 2016, Atlantic Capital had minimum collateral posting thresholds with certain of its derivative counterparties and posted collateral of $7.1 million and $16.3 million, respectively, against its obligations under these agreements. Cash collateral related to derivative contracts is recorded in other assets in the Consolidated Balance Sheets.

Atlantic Capital has master netting agreements with the derivatives dealers with which it does business, but reflects gross assets and liabilities on the Consolidated Balance Sheets.

In conjunction with the FASB’s fair value measurement guidance, management made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting arrangements on a net basis.

To accommodate clients, Atlantic Capital occasionally enters into credit risk participation agreements with counterparty banks to accept a portion of the credit risk related to interest rate swaps. This allows clients to execute an interest rate swap with one bank while allowing for distribution of the credit risk among participating members. Credit risk participation agreements arise when Atlantic Capital contracts with other financial institutions, as a guarantor, to share credit risk associated with certain interest rate swaps. These agreements provide for reimbursement of losses resulting from a third party default on the underlying swap. At March 31, 2017 and December 31, 2016, Atlantic Capital had credit risk participation agreements with a notional amount of $4.2 million and $4.5 million, respectively.

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The following table reflects the estimated fair value positions of derivative contracts and credit risk participation agreements as of March 31, 2017 and December 31, 2016:

Derivatives designated as hedging instruments under ASC 815
(in thousands)		March 31, 2017				December 31, 2016
Interest Rate Products	Balance Sheet Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Cash flow hedge of LIBOR based loans	Other assets	$	25,000	$	14	$	50,000	$	186
Cash flow hedge of LIBOR based loans	Other liabilities	$	25,000	$	37	$	—	$	—
Derivatives not designated as hedging instruments under ASC 815
(in thousands)		March 31, 2017				December 31, 2016
Interest Rate Products	Balance Sheet Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Customer swap positions	Other assets	$	69,427	$	1,174	$	70,352	$	1,364
Zero premium collar	Other assets	97,098		2,373		98,697		2,760
		$	166,525	$	3,547	$	169,049	$	4,124
Dealer offsets to customer swap positions	Other liabilities	$	69,427	$	1,186	$	70,352	$	1,371
Credit risk participation	Other liabilities	4,240		—		4,460		—
Dealer offset to zero premium collar	Other liabilities	97,098		2,419		98,697		2,760
		$	170,765	$	3,605	$	173,509	$	4,131

The following table reflects the impact to the Consolidated Statements of Income related to derivative contracts for the three months endedMarch 31, 2017 and 2016:

Derivatives in Cash Flow Hedging Relationships
	Three months ended March 31,
(in thousands)	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)					Gain or (Loss) Reclassified from Accumulated OCI in Income (Effective Portion)
	2017			2016		Location	2017		2016
Interest rate swaps	$	(100	)	$	573	Interest income	$	137	$	186

NOTE 12 – SUBORDINATED DEBT

On September 28, 2015, Atlantic Capital issued subordinated notes (the “Notes”) totaling $50.0 million in aggregate principal amount. The Notes are due September 30, 2025 and bear a fixed rate of interest of 6.25% per year until September 29, 2020. From September 30, 2020 to the maturity date, the interest rate will be a floating rate equal to the three-month LIBOR plus 468 basis points. The Notes were priced at 100% of their par value. The Notes qualify as Tier 2 regulatory capital.

Subordinated debt is summarized as follows.

	March 31, 2017		December 31, 2016
	(in thousands
Floating rate 10 year capital securities, with interest paid semi-annually at an annual fixed rate of 6.25% until September 30, 2020	$	50,000	$	50,000
Principal amount of subordinated debt	$	50,000	$	50,000
Less debt issuance costs		592		634
Subordinated debt, net	$	49,408	$	49,366

All subordinated debt outstanding at March 31, 2017 matures after more than five years.

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NOTE 13 – SHARE-BASED COMPENSATION

Atlantic Capital sponsors a stock incentive plan for the benefit of directors and employees. Under the 2015 Stock Incentive Plan, there were approximately 4,525,000 shares reserved for issuance to directors and employees. The Compensation Committee has the authority to grant the following: an incentive or nonqualified option; a restricted stock award (including a restricted stock award or a restricted unit award); a performance award (including a performance share award or a performance unit award); a phantom stock award; a dividend equivalent award; or any other award granted under the plan.

As of March 31, 2017, approximately 3,909,000 additional awards were available to be granted under the plan. Stock options are granted at a price which is no less than the fair market value of a share of Atlantic Capital common stock on the grant date. Stock options generally vest over three years and expire after ten years.

As of March 31, 2017 and December 31, 2016, warrants for 500 and 363,000 shares, respectively, were outstanding for the purchase of common stock at a price of $10.00 per warrant. The warrants were issued as of May 14, 2007, the date of issuance of common stock sold in the initial private placement, and are exercisable for a period of ten years following the issuance.

The Company estimates the fair value of its options and warrants awards using the Black-Scholes option pricing model. The risk-free rate for periods within the contractual life of the option and warrant is based on the U.S. Treasury yield curve in effect at the time of grant. There were no options or warrants granted during the three months endedMarch 31, 2017 and 2016.

The following table represents stock option and warrant activity for the three months endedMarch 31, 2017:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, December 31, 2016	1,485,704		$	11.69
Exercised	(633,922	)	10.53
Forfeited	(314	)	10.31
Expired	—		—
Outstanding, March 31, 2017	851,468		$	12.55	5.86	$	5,767
Exercisable, March 31, 2017	575,024		$	11.73	4.73	$	4,440

Atlantic Capital recognized compensation expense relating to stock options of $142,000 and $242,000 for the three months endedMarch 31, 2017 and 2016, respectively. Using the Black-Scholes pricing model, the amount of compensation expense was determined based on the fair value of the options at the time of grant, multiplied by the number of options granted that were expected to vest, which was then amortized over the vesting period.

The following table represents restricted stock activity for the three months endedMarch 31, 2017:

	Shares		Weighted Average Grant-Date Fair Value
Outstanding, December 31, 2016	259,165		$	13.70
Granted	—		—
Vested	(3,662	)	12.39
Forfeited	(13,172	)	14.06
Outstanding, March 31, 2017	242,331		$	13.70

Compensation expense for restricted stock is based on the fair value of restricted stock awards at the time of grant, which is equal to the value of Atlantic Capital’s common stock on the date of grant. The value of restricted stock grants that are expected to vest is amortized into expense over the vesting period. For the three months ended March 31, 2017 and 2016, compensation expense of $229,000 and $250,000, respectively, was recognized related to restricted stock awards.

As of March 31, 2017, there was $1.9 million of unrecognized compensation cost related to restricted stock awards granted under the plan. That cost is expected to be recognized over a weighted-average period of 3.10 years.

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NOTE 14 – FAIR VALUE MEASUREMENTS

Atlantic Capital follows the guidance pursuant to ASC 820-10, Fair Value Measurements and Disclosures. This guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This issuance applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. Atlantic Capital measures its investment securities and interest rate derivative assets and liabilities at fair value on a recurring basis. Fair value is used on a nonrecurring basis either when assets are evaluated for impairment or for disclosure purposes. Atlantic Capital measures its servicing assets, goodwill, intangible assets, loans held for sale, impaired loans and other real estate owned at fair value on a nonrecurring basis if necessary.

The guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement and defines fair value as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, this guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Atlantic Capital applied the following fair value hierarchy:

Level 1 – Assets or liabilities for which the identical item is traded on an active exchange, such as publicly-traded instruments or futures contracts.

Level 2 – Assets or liabilities valued based on observable market data for similar instruments.

Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market, instruments valued based on the best available data, some of which is internally-developed, and risk premiums that a market participant would require.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement. There were no transfers between Level 1 and Level 2 or Level 2 and Level 3 during the three months ended March 31, 2017. There was one transfer between Level 2 and Level 3 and no transfers between Level 1 and Level 2 during the three months ended March 31, 2016.

Atlantic Capital records investment securities available-for-sale at fair value on a recurring basis. Investment securities classified as available-for-sale are reported at fair value utilizing Level 2 inputs. For these securities, Atlantic Capital obtains fair value measurements from an independent pricing service. In estimating the fair values for investment securities, Atlantic Capital believes that independent third-party market prices are the best evidence of an exit price. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the Treasury Department yield curve, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things.

Derivative instruments are primarily transacted as over-the-counter trades and priced with observable market assumptions. Ongoing measurements include observable market assumptions with appropriate valuation adjustments for liquidity and for credit risk of counterparties and Atlantic Capital’s own credit. For these instruments, Atlantic Capital obtains fair value measurements from an independent pricing service. The fair value measurements consider factors such as the likelihood of default by Atlantic Capital and its counterparties, total exposure and remaining maturities in determining the appropriate fair value adjustments to record. Generally, the expected loss of each client counterparty is estimated using Atlantic Capital’s internal risk rating system. For financial institution counterparties that are rated by national rating agencies, those ratings are used in determining the credit risk. This approach used to estimate exposures to counterparties is also used by Atlantic Capital to estimate its own credit risk on derivative liability positions.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets that were measured at fair value on a recurring basis by level within the fair value hierarchy as reported in the Consolidated Balance Sheets at March 31, 2017 and December 31, 2016.

	Fair Value Measurements at
	March 31, 2017 Using:
	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Securities available-for-sale—
U.S. government agencies	$	—	$	35,243	$	—	$	35,243
U.S. states and political subdivisions	—		92,245		—		92,245
Trust preferred securities	—		4,525		—		4,525
Corporate debt securities	—		19,186		—		19,186
Mortgage-backed securities	—		305,743		—		305,743
Total securities available-for-sale	$	—	$	456,942	$	—	$	456,942
Interest rate derivative assets	$	—	$	3,561	$	—	$	3,561
Interest rate derivative liabilities	$	—	$	3,642	$	—	$	3,642

	Fair Value Measurements at
	December 31, 2016 Using:
	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Securities available-for-sale—
U.S. government agencies	$	—	$	21,152	$	—	$	21,152
U.S. states and political subdivisions	—		90,172		—		90,172
Trust preferred securities	—		4,525		—		4,525
Corporate debt securities	—		19,231		—		19,231
Mortgage-backed securities	—		212,625		—		212,625
Total securities available-for-sale	$	—	$	347,705	$	—	$	347,705
Interest rate derivative assets	$	—	$	4,310	$	—	$	4,310
Interest rate derivative liabilities	$	—	$	4,131	$	—	$	4,131

For the three months endedMarch 31, 2017 and 2016, there was not a change in the methods and significant assumptions used to estimate fair value.

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Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The following table presents the assets that were measured at fair value on a nonrecurring basis by level within the fair value hierarchy as reported in the Consolidated Balance Sheets at March 31, 2017 and December 31, 2016.

March 31, 2017		Level 1 Fair Value Measurement		Level 2 Fair Value Measurement		Level 3 Fair Value Measurement		Total
	(in thousands)
Impaired Loans		$	—	$	—	$	6,998	$	6,998

December 31, 2016		Level 1 Fair Value Measurement		Level 2 Fair Value Measurement		Level 3 Fair Value Measurement		Total
	(in thousands)
Impaired Loans		$	—	$	—	$	7,248	$	7,248

Level 3 loans consist of impaired loans which have been partially charged-off or have specific valuation allowances. The fair value of Level 3 assets is estimated based on the underlying collateral value. For loans which the cash proceeds from the sale of the underlying collateral is the expected source of repayment, the fair value of these loans was derived from internal estimates of the underlying collateral incorporating market data, including third party appraisals or evaluations, when available. Appraised values may be discounted based on management’s assessment of the level of inactivity in the real estate market and other markets for the underlying collateral, changes in market conditions from the time of the valuation, and other information that in management’s judgment may affect the value. Impaired loans are evaluated on at least a quarterly basis and adjusted accordingly.

Assets and Liabilities Not Measured at Fair Value

For financial instruments that have quoted market prices, those quotes are used to determine fair value. Financial instruments that have no defined maturity, have a remaining maturity of 180 days or less, or reprice frequently to a market rate, are assumed to have a fair value that approximates the reported book value, after taking into consideration any applicable credit risk. If no market quotes are available, financial instruments are valued by discounting the expected cash flows using an estimated current market interest rate for the financial instrument. For off-balance sheet derivative instruments, fair value is estimated as the amount that Atlantic Capital would receive or pay to terminate the contracts at the reporting date, taking into account the current unrealized gains or losses on open contracts.

The short maturity of Atlantic Capital’s assets and liabilities results in having a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and due from banks, interest-bearing deposits in other banks, other short-term investments, and FHLB stock. The fair value of securities available-for-sale equals the balance sheet value. Due to the short-term settlement of accrued interest receivable and payable, the carrying amount closely approximates fair value.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect the premium or discount on any particular financial instrument that could result from the sale of Atlantic Capital’s entire holdings. Because no ready market exists for a significant portion of Atlantic Capital’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Off-balance sheet financial instruments (commitments to extend credit and standby letters of credit) are generally short-term and at variable rates. Therefore, both the carrying amount and the estimated fair value associated with these instruments are immaterial.

29

The following table presents the estimated fair values of Atlantic Capital’s financial instruments at March 31, 2017 and December 31, 2016.

	Fair Value Measurements at
	March 31, 2017 Using:
	Carrying Value		Quoted Prices in Active markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial assets
Cash and due from banks	$	34,626	$	34,626	$	—	$	—
Interest bearing deposits in banks	158,920		158,920		—		—
Other short-term investments	20,870		20,870		—		—
Total securities available-for-sale	456,942		—		456,942		—
FHLB stock	11,698		—		—		11,698
Federal Reserve Bank stock	9,690		—		—		9,690
Loans held for investment, net	1,881,785		—		—		2,097,961
Loans held for sale	29,241		—		29,241		—
Derivative assets	3,561		—		3,561		—
Financial liabilities
Deposits	$	2,173,544	$	—	$	2,119,445	$	—
Deposits to be assumed in branch sale	29,495		—		29,495		—
Subordinated debt	49,408		—		49,477		—
FHLB advances	217,000		—		217,000		—
Derivative financial instruments	3,642		—		3,642		—

	Fair Value Measurements at
	December 31, 2016 Using:
	Carrying Value		Quoted Prices in Active markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial assets
Cash and due from banks	$	36,790	$	36,790	$	—	$	—
Interest-bearing deposits in other banks	118,039		118,039		—		—
Other short-term investments	10,896		10,896		—		—
Total securities available-for-sale	347,705		—		347,705		—
FHLB stock	7,067		—		—		7,067
Federal Reserve Bank stock	9,690		—		—		9,690
Loans held for investment, net	1,960,735		—		—		1,939,895
Loans held for sale	35,219		—		35,219		—
Derivative assets	4,310		—		4,310		—
Financial liabilities
Deposits	$	2,205,991	$	—	$	2,144,196	$	—
Deposits to be assumed in branch sale	31,589		—		31,589		—
Subordinated debt	49,366		—		48,971		—
FHLB advances	110,000		—		109,946		—
Derivative financial instruments	4,131		—		4,131		—

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NOTE 15 – COMMITMENTS AND CONTINGENCIES

Atlantic Capital is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit, most of which are standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the Consolidated Balance Sheets. The contract amounts of these instruments reflect the extent of involvement Atlantic Capital has in particular classes of financial instruments.

Standby letters of credit are written conditional commitments issued by Atlantic Capital to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. Most letters of credit expire in less than one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

Atlantic Capital’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. Atlantic Capital uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Atlantic Capital’s maximum exposure to credit risk for unfunded loan commitments and standby letters of credit at March 31, 2017 and December 31, 2016 was as follows:

	March 31, 2017		December 31, 2016
	(in thousands)
Financial Instruments whose contract amount represents credit risk:
Commitments to extend credit	$	689,474	$	617,432
Standby letters of credit	16,171		16,625
	$	705,645	$	634,057

Atlantic Capital, in the normal course of business, is subject to various pending and threatened lawsuits in which claims for monetary damages are asserted. Although it is not possible to predict the outcome of these lawsuits, or the range of any possible loss, management, after consultation with legal counsel, does not anticipate that the ultimate aggregate liability, if any, arising from these lawsuits will have a material adverse effect on Atlantic Capital’s financial position or results of operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Atlantic Capital Bancshares, Inc. (the “Company” or “Atlantic Capital”) contains forward-looking statements within the meaning of section 27A of the Securities Act 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,” “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 expected growth opportunities and cost savings from the acquisition of First Security Group, Inc. (“First Security”) may not be fully realized or may take longer to realize than expected;

• loss of income from our TriNet division following our exit of this business;

• 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, including those associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), could adversely affect the operating results of the company;

• the interest rate environment may compress margins and adversely affect net interest income;

• 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;

• our ability to anticipate 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;

• 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;

• adequacy of our risk management program;

• increased costs associated with operating as a public company;

• increased competitive pressure due to consolidation in the financial services industry; or

• other risks and factors identified in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 14, 2017 (the “Annual Report”) in Part I, Item 1A under the heading “Risk Factors.”

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CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of Atlantic Capital are in accordance with GAAP and conform to general practices within the banking industry. Atlantic Capital’s financial position and results of operations are affected by management’s application of accounting policies, including judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues, expenses and related disclosures. Different assumptions in the application of these policies could result in material changes in Atlantic Capital’s consolidated financial position and/or consolidated results of operations. The more critical accounting and reporting policies include Atlantic Capital’s accounting for the allowance for loan losses, fair value measurements, and income tax related items. Significant accounting policies are discussed in the Notes to Consolidated Financial Statements within Atlantic Capital’s Annual Report on Form 10-K.

Non-GAAP Financial Measures.

This Form 10-Q contains non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Atlantic Capital management uses non-GAAP financial measures, including: (i) taxable equivalent interest income; (ii) taxable equivalent net interest income; (iii) taxable equivalent net interest margin; (iv) income before income taxes-taxable equivalent; and (v) income tax expense-taxable equivalent. Management uses these non-GAAP financial measures because it believes they provide a greater understanding of ongoing performance and operations, enhance comparability with prior periods, and provide users of our financial information with a meaningful measure for assessing our financial results and credit trends. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as an alternative to any measure of performance or financial condition as determined in accordance with GAAP. In addition, non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures presented by other companies. 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. A reconciliation of these non-GAAP financial measures to GAAP financial measures is included in Table 1.

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EXECUTIVE OVERVIEW AND EARNINGS SUMMARY

Atlantic Capital reported net income of $3.2 million for the first quarter of 2017. This compared to net income of $2.9 million for the first quarter of 2016. Diluted income per common share was $.13 for the first quarter of 2017 compared to diluted income per common share of $.12 for the first quarter of 2016.

The increase in net income for the three months ended March 31, 2017, compared to the same period in 2016, was primarily the result of a $386,000, or 2%, increase in net interest income related to a higher Fed Funds rate and a $522,000, or 3%, reduction in noninterest expense. These improvements were offset by a $266,000 higher loan loss provision and a $563,000, or 13%, reduction in noninterest income.

Taxable equivalent net interest income was $19.5 million for the first quarter of 2017, compared to $18.9 million for the first quarter of 2016. Taxable equivalent net interest margin decreased to 3.20% for the three months ended March 31, 2017 from 3.26% for the three months ended March 31, 2016. The margin decrease for the three months ended March 31, 2017 compared to the prior year was primarily due to increased rates paid on deposits, increased shorter-term borrowing costs related to a higher level of borrowings to help replace deposits sold in branch divestitures, and a lower yield on loans.

Provision for loan losses for the quarter ended March 31, 2017 totaled $634,000, an increase of $266,000 from the quarter ended March 31, 2016. The higher provision for the three months ended March 31, 2017 was primarily due to net charge-offs for the quarter.

Noninterest income decreased $563,000, or 13%, to $3.9 million from the first quarter of 2016. The decrease was primarily due to a $363,000 decrease in TriNet lending activities as the Company exited this line of business in the third quarter of 2016 and a $149,000, or 10%, decrease in service charges, offset by a $347,000, or 39%, increase in SBA lending activities.

For the first quarter of 2017, noninterest expense decreased $522,000, or 3%, compared to the first quarter of 2016. The most significant component of the decrease was a $749,000, or 100%, reduction in merger and conversion costs due to the substantial completion of the integration of FSGBank, N.A. (“FSGBank”) into Atlantic Capital Bank in 2016. The Company anticipates additional rebranding activities to take place in the second quarter of 2017.

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Table 1 - Quarterly Selected Financial Data
(in thousands, except share and per share data; taxable equivalent)
	2017			2016
	First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter
INCOME SUMMARY
Interest income	$	22,716		$	22,530		$	22,428		$	22,190		$	21,553
Interest expense	3,208			3,029			2,941			2,907			2,632
Net interest income	19,508			19,501			19,487			19,283			18,921
Provision for loan losses	634			2,208			463			777			368
Net interest income after provision for loan losses	18,874			17,293			19,024			18,506			18,553
Noninterest income	3,857			4,430			4,002			8,880			4,420
Noninterest expense	17,744			18,775			17,296			18,943			18,266
Income before income taxes	4,987			2,948			5,730			8,443			4,707
Income tax expense	1,757			1,339			2,022			3,296			1,776
Net income	$	3,230		$	1,609		$	3,708		$	5,147		$	2,931
PER SHARE DATA
Basic earnings per share	$	0.13		$	0.06		$	0.15		$	0.21		$	0.12
Diluted earnings per share	0.13			0.06			0.15			0.20			0.12
PERFORMANCE MEASURES
Return on average equity	4.19		%	2.09		%	4.84		%	6.88		%	4.02		%
Return on average assets	0.48			0.24			0.55			0.76			0.45
Taxable equivalent net interest margin	3.20			3.11			3.12			3.12			3.26
Efficiency ratio	76.78			79.19			74.05			67.44			78.44
Equity to assets	11.10			11.13			11.17			10.83			10.81
ASSET QUALITY
Allowance for loan losses to loans	1.05		%	1.04		%	0.92		%	0.95		%	0.93		%
Net charge-offs	$	1,290		$	147		$	306		$	8		$	1,665
Net charge-offs to average loans(1)	0.26		%	0.03		%	0.06		%	—		%	0.35		%
NPAs to total assets	0.21			0.13			0.09			0.07			0.08
AVERAGE BALANCES
Total loans	$	1,949,385		$	2,036,995		$	2,003,180		$	2,000,685		$	1,881,749
Investment securities	419,335			349,762			335,880			358,439			357,728
Total assets	2,694,715			2,722,444			2,717,996			2,718,110			2,620,750
Deposits	2,111,992			2,094,885			2,163,569			2,135,292			2,155,683
Shareholders’ equity	308,261			308,588			306,642			299,170			291,806
Number of common shares - basic	25,320,690			25,027,304			24,891,822			24,644,755			24,485,900
Number of common shares - diluted	25,672,286			25,407,728			25,260,280			25,158,694			24,993,597
(1) Annualized.

35

Table 1 - Quarterly Selected Financial Data (continued)
(in thousands, except share and per share data)
	2017		2016
	First Quarter		Fourth Quarter		Third Quarter		Second Quarter		First Quarter
AT PERIOD END
Total loans	$	1,930,965	$	2,016,549	$	2,054,702	$	1,971,198	$	1,982,054
Investment securities	456,942		347,705		348,484		328,370		366,641
Total assets	2,802,078		2,727,543		2,761,244		2,807,822		2,726,888
Deposits	2,203,039		2,237,580		2,188,856		2,158,305		2,282,462
Shareholders’ equity	310,967		303,658		308,463		304,066		296,015
Number of common shares outstanding	25,535,013		25,093,135		24,950,099		24,750,163		24,569,823
Non-GAAP Performance Measures Reconciliation
(in thousands)
	2017		2016
	First Quarter		Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Interest income reconciliation
Interest income - GAAP	$	22,461	$	22,307	$	22,295	$	22,116	$	21,499
Taxable equivalent adjustment	255		223		133		74		54
Interest income - taxable equivalent	$	22,716	$	22,530	$	22,428	$	22,190	$	21,553
Net interest income reconciliation
Net interest income - GAAP	$	19,253	$	19,278	$	19,354	$	19,209	$	18,867
Taxable equivalent adjustment	255		223		133		74		54
Net interest income - taxable equivalent	$	19,508	$	19,501	$	19,487	$	19,283	$	18,921
Net interest income after provision for loan losses reconciliation
Net interest income after provision for loan losses - GAAP	$	18,619	$	17,070	$	18,891	$	18,432	$	18,499
Taxable equivalent adjustment	255		223		133		74		54
Net interest income after provision for loan losses - taxable equivalent	$	18,874	$	17,293	$	19,024	$	18,506	$	18,553
Income before income taxes reconciliation
Income (loss) before income taxes - GAAP	$	4,732	$	2,725	$	5,597	$	8,369	$	4,653
Taxable equivalent adjustment	255		223		133		74		54
Income before income taxes - taxable equivalent	$	4,987	$	2,948	$	5,730	$	8,443	$	4,707
Income tax expense reconciliation
Income tax expense - GAAP	$	1,502	$	1,116	$	1,889	$	3,222	$	1,722
Taxable equivalent adjustment	255		223		133		74		54
Income tax expense - taxable equivalent	$	1,757	$	1,339	$	2,022	$	3,296	$	1,776

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RESULTS OF OPERATIONS

Net Interest Income and Net Interest Margin

Taxable equivalent net interest income for the first quarter of 2017 totaled $19.5 million, a $587,000, or 3%, increase compared to the first quarter of 2016. This increase was primarily driven by a $1.2 million, or 5%, increase in interest income. The change in net interest income primarily resulted from the following:

• a $618,000, or 37%, increase to $2.3 million in tax equivalent interest income on investment securities, resulting from a $61.6 million, or 17%, increase in average balance, due primarily to the increased investment in non-taxable investment securities; offset by

• a $184,000, or 21%, decrease in net accretion income on acquired loans to $702,000, from $886,000 in the first quarter of 2016.

Interest expense for the three months ended March 31, 2017 totaled $3.2 million, a $576,000, or 22%, increase from the same period of 2016. The rate paid on interest bearing liabilities increased 14 basis points from the first quarter of 2016 to the first quarter of 2017, driven by an increase in interest rates on deposits and other borrowings. Average interest-bearing deposits were lower mainly due to the branch sales in the second quarter of 2016. These deposits were replaced in part by higher cost short term borrowings. In addition, premium amortization of acquired time deposits reduced interest expense during the first quarter of 2017 in the amount of $119,000, compared to $142,000 in the first quarter of 2016. Interest expense on other borrowings increased $189,000, primarily due to a $95.1 million increase in the average balance. The rate paid on other borrowings also increased 10 basis points compared to the first quarter of 2016.

Taxable equivalent net interest margin decreased to 3.20% from 3.26% for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. The primary reason for the decrease in taxable equivalent net interest margin was the increase in rates paid for interest on deposits and an increased volume of other borrowings. Net accretion income on the acquired loans discount totaled $702,000 and $886,000 for the three months ended March 31, 2017 and 2016, respectively, and also contributed to the decrease in taxable equivalent net interest margin.

The following table presents information regarding average balances for assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. The yields and costs for the periods indicated are derived by dividing the income or expense by the average balances for assets or liabilities, respectively, for the periods presented. Loan fees are included in interest income on loans.

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Table 2 - Average Balance Sheets and Net Interest Analysis
(dollars in thousands; taxable equivalent)
	Three months ended March 31,
	2017						2016
	Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets
Interest bearing deposits in other banks	$	72,494	$	165	0.92	%	$	63,976	$	173	1.09	%
Other short-term investments	11,052		47		1.72	%	29,768		99		1.34	%
Investment securities:
Taxable investment securities	339,614		1,523		1.82	%	338,880		1,498		1.78	%
Non-taxable investment securities(1)	79,721		750		3.82	%	18,848		157		3.35	%
Total investment securities	419,335		2,273		2.20	%	357,728		1,655		1.86	%
Total loans	1,949,385		19,994		4.16	%	1,881,749		19,625		4.19	%
FHLB and FRB stock	19,608		237		4.90	%	9,048		1		0.04	%
Total interest-earning assets	2,471,874		22,716		3.73	%	2,342,269		21,553		3.71	%
Non-earning assets	222,841						278,481
Total assets	$	2,694,715					$	2,620,750
Liabilities
Interest bearing deposits:
NOW, money market, and savings	1,137,088		1,315		0.47	%	1,117,316		1,050		0.38	%
Time deposits	163,021		272		0.68	%	267,330		224		0.34	%
Brokered deposits	191,558		460		0.97	%	216,490		399		0.74	%
Total interest-bearing deposits	1,491,667		2,047		0.56	%	1,601,136		1,673		0.42	%
Other borrowings	194,478		338		0.70	%	99,357		149		0.60	%
Long-term debt	49,381		823		6.76	%	49,213		810		6.62	%
Total interest-bearing liabilities	1,735,526		3,208		0.75	%	1,749,706		2,632		0.61	%
Demand deposits	620,325						554,547
Other liabilities	30,603						24,691
Shareholders’ equity	308,261						291,806
Total liabilities and shareholders’ equity	$	2,694,715					$	2,620,750
Net interest spread					2.98	%					3.10	%
Net interest income and net interest margin(2)			$	19,508	3.20	%			$	18,921	3.26	%
(1) Interest revenue on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 35%, reflecting the statutory federal income tax rate.
(2) Taxable equivalent net interest income divided by total interest-earning assets using the appropriate day count convention based on the type of interest-earning asset.

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The following table shows the relative effect on taxable equivalent net interest income for changes in the average outstanding amounts (volume) of interest-earning assets and interest-bearing liabilities and the rates earned and paid on such assets and liabilities (rate). Variances resulting from a combination of changes in rate and volume are allocated in proportion to the absolute dollar amounts of the change in each category.

Table 3 - Changes in Taxable Equivalent Net Interest Income
(dollars in thousands)
	Three Months Ended March 31, 2017 Compared to 2016 Increase (decrease) Due to Changes in:
	Volume			Yield/Rate			Total Change
Interest earning assets
Interest bearing deposits in other banks	$	19		$	(27	)	$	(8	)
Other short-term investments	(80		)	28			(52		)
Investment securities:
Taxable investment securities	2			23			25
Non-taxable investment securities	571			22			593
Total investment securities	573			45			618
Total loans	482			(113		)	369
FHLB and FRB stock	128			108			236
Total interest-earning assets	1,122			41			1,163
Interest bearing liabilities
Interest bearing deposits:
NOW, money market, and savings	22			243			265
Time deposits	(174		)	222			48
Brokered deposits	(57		)	118			61
Total interest-bearing deposits	(209		)	583			374
Total borrowings	164			25			189
Total long-term debt	2			11			13
Total interest-bearing liabilities	(43		)	619			576
Change in net interest income	$	1,165		$	(578	)	$	587

Provision for Loan Losses

Management considers a number of factors in determining the required level of the allowance for loan losses and the provision required to achieve what is believed to be appropriate reserve level, including historical loss experience, loan growth, credit risk rating trends, nonperforming loan levels, delinquencies, loan portfolio concentrations and economic and market trends. The provision for loan losses represents management’s determination of the amount necessary to be charged against the current period’s earnings to maintain the allowance for loan losses at a level that it considered adequate in relation to the estimated losses inherent in the loan portfolio.

For the three months ended March 31, 2017, the provision for loan losses was $634,000, an increase of $266,000, or 72%, compared to the three months ended March 31, 2016. The higher provision for the three months ended March 31, 2017 was primarily due to net charge-offs for the quarter. At March 31, 2017, nonperforming loans totaled $4.0 million compared to $566,000 at March 31, 2016. Net loan charge-offs were 0.26% of average loans (annualized) for the three months ended March 31, 2017 compared to 0.35% for the three months ended March 31, 2016. The allowance for loan losses to total loans at March 31, 2017 was 1.05%, compared to 0.93% at March 31, 2016.

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Noninterest Income

Noninterest income for the three months ended March 31, 2017 was $3.9 million, a decrease of $563,000, or 13%, compared to the first quarter of 2016. The following table presents the components of noninterest income.

Table 4 - Noninterest Income
(dollars in thousands)
	Three months ended March 31,					Change
	2017			2016		$			%
Service charges	$	1,349		$	1,498	$	(149	)	(10	)	%
Securities gains, net	—			33		(33		)	(100	)
Gain on sales of other assets	78			48		30			63
Mortgage income	257			339		(82		)	(24	)
Trust income	407			314		93			30
Derivatives income (loss)	(51		)	65		(116		)	(178	)
Bank owned life insurance	378			393		(15		)	(4	)
SBA lending activities	1,227			880		347			39
TriNet lending activities	20			383		(363		)	(95	)
Other noninterest income	192			467		(275		)	(59	)
Total noninterest income	$	3,857		$	4,420	$	(563	)	(13	)	%

Service charges for the first quarter of 2017 decreased $149,000, or 10%, from the same period in 2016. The decrease was primarily due to the loss of retail customer activity from the sale of seven legacy FSGBank branches in the second quarter of 2016. Derivative income for the first quarter of 2017 decreased $116,000, or 178%, from the same period in 2016 due to a lower level of customer swap activity and the quarterly credit valuation adjustment.

SBA lending activities for the first quarter of 2017 increased $347,000, or 39%, from the same period in 2016, due to a higher level of loan sales. During the three months ended March 31, 2017 and 2016, guaranteed portions of 11 and 10 SBA loans with principal balances of $18.1 million and $10.4 million, respectively, were sold in the secondary market. During the three months ended March 31, 2016, the TriNet lending division contributed $383,000 in noninterest income from the sale of loans. During the third quarter of 2016, Atlantic Capital made the decision to close the TriNet Lending division.

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Noninterest Expense

The following table presents the components of noninterest expense.

Table 5 - Noninterest Expense
(dollars in thousands)
	Three months ended March 31,				Change
	2017		2016		$			%
Salaries and employee benefits	$	11,065	$	10,555	$	510		5		%
Occupancy	1,230		1,100		130			12
Equipment and software	805		686		119			17
Professional services	904		748		156			21
Postage, printing and supplies	85		169		(84		)	(50	)
Communications and data processing	987		916		71			8
Marketing and business development	270		267		3			1
FDIC premiums	314		398		(84		)	(21	)
Merger and conversion costs	—		749		(749		)	(100	)
Amortization of intangibles	470		762		(292		)	(38	)
Foreclosed property/problem asset expense	3		104		(101		)	(97	)
Other noninterest expense	1,611		1,812		(201		)	(11	)
Total noninterest expense	$	17,744	$	18,266	$	(522	)	(3	)	%

Noninterest expense for the first quarter of 2017 was $17.7 million, a decrease of $522,000, or 3%, from the first quarter of 2016. The decrease from the prior year mostly reflects lower merger and conversion costs related to the acquisition of First Security.

Salaries and employee benefits expense for the three months ended March 31, 2017 totaled $11.1 million, an increase of $510,000, or 5%, from the same period in 2016. The increase was primarily attributable to a higher long-term incentive accrual due to an increase in stock price. Full time equivalent headcount totaled 331 at March 31, 2017, compared to 353 at March 31, 2016, a decrease of 22 positions, mainly from branch closures and divestitures.

Merger and conversion costs were $0 for the first quarter of 2017, a decrease of $749,000, or 100%, compared to the first quarter of 2016. Merger expenses include professional fees, severance and data conversion costs.

Professional services costs were $904,000 for the first quarter of 2017, an increase of $156,000, or 21%, compared to the first quarter of 2016. The increase was due to higher audit and consulting fees.

Amortization of intangibles includes the amortization of core deposit intangible related to the acquisition of First Security and totaled $470,000 and $762,000 for the three months ended March 31, 2017 and 2016, respectively. The decrease in 2017 was mainly due to the write-off of core deposit intangible related to the seven branches divested during the second quarter of 2016.

Income Taxes

Atlantic Capital monitors and evaluates the potential impact of current events on the estimates used to establish income tax expenses and income tax liabilities. On a periodic basis, Atlantic Capital evaluates its income tax positions based on current tax law and positions taken by various tax auditors within the jurisdictions where Atlantic Capital is required to file income tax returns.

The income tax provision for the first quarter of 2017 was $1.5 million as compared with $1.7 million for the same period in 2016. The effective tax rate (as a percentage of pre-tax earnings) was 31.7% and 37.0% for the three months ended March 31, 2017 and 2016, respectively. The decrease in the effective tax rate in the first quarter of 2017 was driven mainly by the reduction of non-deductible merger expenses in 2016 and the increase in non-taxable income on municipal securities purchased throughout the latter half of 2016 and beginning of 2017.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and their respective tax basis including operating losses and tax credit carryforwards. Net deferred tax assets (deferred tax assets net of deferred tax liabilities and valuation allowance) are reported in the consolidated balance sheet as a component of total assets.

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Accounting Standards Codification Topic 740, Income Taxes, requires that companies assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. The determination of whether a valuation allowance for deferred tax assets is appropriate is subject to considerable judgment and requires an evaluation of all positive and negative evidence with more weight given to evidence that can be objectively verified. Each quarter, management considers both positive and negative evidence and analyzes changes in near-term market conditions as well as other factors which may impact future operating results.

Based on all evidence considered, as of March 31, 2017 and 2016, management concluded that it was more likely than not that the net deferred tax asset would be realized, except as outlined in the following discussion. At March 31, 2017 and 2016, Atlantic Capital had a deferred tax asset valuation allowance totaling $9.2 million and $9.5 million, respectively, on certain net operating loss carryforwards due to the fact that certain tax attributes are subject to an annual limitation as a result of the acquisition of First Security, which constituted a change of ownership as defined under Internal Revenue Code Section 382. Management expects to generate higher levels of future taxable income and believes this will allow for full utilization of Atlantic Capital’s remaining net operating loss carryforwards within the statutory carryforward periods.

FINANCIAL CONDITION

Total assets at March 31, 2017 and December 31, 2016 were $2.80 billion and $2.73 billion, respectively. Average total assets for the first quarter of 2017 were $2.69 billion, compared to $2.72 billion in the fourth quarter of 2016.

Loans

At March 31, 2017, total loans decreased $85.6 million, or 4%, to $1.93 billion compared to $2.02 billion at December 31, 2016, primarily due to a decrease of $89.2 million in mortgage warehouse loans resulting from an increase in interest rates in the first quarter of 2017. Details of loans are provided in Table 6.

42

Table 6 - Loans
(dollars in thousands)
	March 31, 2017			% of Total Loans		December 31, 2016			% of Total Loans
Loans held for sale
TriNet loans held for sale	$	—				$	—
Branch loans held for sale	27,944					30,917
Other loans held for sale	1,297					4,302
Total loans held for sale	$	29,241				$	35,219
Loans held for investment
Commercial loans:
Commercial and industrial	$	544,911		29	%	$	531,061		27	%
Commercial real estate:
Owner occupied	348,888			18		352,523			18
Non-owner occupied	586,700			31		506,255			26
Construction and land	135,637			7		219,352			11
Mortgage warehouse loans	58,357			3		147,519			7
Total commercial loans	1,674,493			88		1,756,710			89
Residential:
Residential mortgages	99,665			5		101,921			5
Home equity	81,438			4		77,358			4
Total residential loans	181,103			9		179,279			9
Consumer	32,525			2		27,338			1
Other	17,611			1		21,565			1
	1,905,732					1,984,892
Less net deferred fees and other unearned income	(4,008		)			(3,562		)
Total loans held for investment	1,901,724					1,981,330
Total loans	$	1,930,965				$	2,016,549

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Nonperforming Assets

Nonperforming assets include nonaccrual loans, accruing loans past due 90 days or more, and other real estate owned. Loans are considered to be past due when payment is not received from the borrower by the contractually specified due date. Interest accruals on loans are discontinued when interest or principal has been in default 90 days or more, unless the loan is both secured by collateral that is sufficient to repay the debt in full and the loan is in the process of collection. When a loan is placed on nonaccrual status, interest accrued and not paid in the current accounting period is reversed against current period income. Interest accrued and not paid in prior periods, if significant, is reversed against the allowance for loan losses.

Income on such loans is subsequently recognized on a cash basis as long as the future collection of principal is deemed probable or after all principal payments are received. Commercial loans are placed back on accrual status after sustained performance of timely and current principal and interest payments and it is probable that all remaining amounts due, both principal and interest, are fully collectible according to the terms of the loan agreement. Residential loans and consumer loans are generally placed back on accrual status when they are no longer past due.

Purchased Credit Impaired (“PCI”) loans accounted for under ASC 310-30 are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. However, these loans are considered as performing, even though they may be contractually past due, as any non-payment of contractual principal or interest is considered in the periodic re-estimation of expected cash flows and is included in the resulting recognition of current period covered loan loss provision or future period yield adjustments. PCI loans were not classified as nonaccrual at March 31, 2017 as the carrying value of the respective loan or pool of loans cash flows were considered estimable and collection was probable. Therefore, interest revenue, through accretion of the difference between the carrying value of the loans and the expected cash flows, is being recognized on all PCI loans.

At March 31, 2017, Atlantic Capital’s nonperforming assets totaled $5.9 million, or 0.21% of assets, compared to $3.5 million, or 0.13% of assets, at December 31, 2016. The increase was primarily due to the Bank placing two loan relationships totaling $2.6 million on nonaccrual status.

Nonaccrual loans totaled $3.2 million and $621,000 as of March 31, 2017 and December 31, 2016, respectively. The increase was primarily due to the Bank placing two loan relationships totaling $2.6 million on nonaccrual status. Loans past due 90 days and still accruing totaled $772,000 at March 31, 2017 compared to $994,000 at December 31, 2016. Table 7 provides details on nonperforming assets and other risk elements.

Table 7 - Nonperforming assets
(dollars in thousands)
	March 31, 2017			December 31, 2016			September 30, 2016		June 30, 2016			March 31, 2016
Nonaccrual loans	$	3,212		$	621		$	28	$	657		$	409
Loans past due 90 days and still accruing	772			994			762		265			157
Total nonperforming loans* (NPLs)	3,984			1,615			790		922			566
Other real estate owned	1,869			1,872			1,727		951			1,760
Total nonperforming assets (NPAs)	$	5,853		$	3,487		$	2,517	$	1,873		$	2,326
NPLs as a percentage of total loans	0.21		%	0.08		%	0.04		0.05		%	0.02		%
NPAs as a percentage of total assets	0.21			0.13			0.09		0.07			0.08

*Nonperforming loans exclude those loans which are purchased credit-impaired loans

Troubled Debt Restructurings

TDRs are selectively made to provide relief to customers experiencing liquidity challenges or other circumstances that could affect their ability to meet their debt obligations. Typical modifications include short-term deferral of interest or modification of payment terms. Nonperforming TDRs are not accruing interest and are included as nonperforming assets within nonaccrual loans. TDRs which are accruing interest based on the restructured terms are considered performing. Table 8 summarizes TDRs.

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Table 8 - Troubled Debt Restructurings
(dollars in thousands)
	March 31, 2017		December 31, 2016
Accruing TDRs	$	5,544	$	6,602
Nonaccruing TDRs	—		—
Total TDRs	$	5,544	$	6,602

Potential Problem Loans

Management identifies and maintains a list of potential problem loans. These are loans that are internally risk graded special mention or below but which are not included in nonaccrual status and are not past due 90 days or more. A loan is added to the potential problem list when management becomes aware of information about possible credit problems of the borrower which raises serious doubts as to the ability of such borrower to comply with the current loan repayment terms. Potential problem loans totaled $44.0 million and $47.6 million, respectively, as of March 31, 2017 and December 31, 2016. As a number of potential problem loans are real estate secured, management closely tracks the current values of real estate collateral when assessing the collectability of these loans.

Allowance for Loan Losses

At March 31, 2017, the allowance for loan losses totaled $19.9 million, or 1.05% of loans, compared to $20.6 million, or 1.04% of loans, at December 31, 2016. The decrease in the allowance was due to charge-offs and a reduction in reserves for specifically evaluated impaired credits.

Net charge-offs during the first quarter of 2017 and 2016 were $1.3 million and $1.7 million, respectively. Table 9 provides details concerning the allowance for loan losses during the past five quarters.

Table 9 - Allowance for Loan Losses (ALL)
(dollars in thousands)
	2017				2016
	First				Fourth				Third				Second				First
	Quarter				Quarter				Quarter				Quarter				Quarter
Balance at beginning of period	$	20,595			$	18,534			$	18,377			$	17,608			$	18,905
Provision for loan losses	565				2,134				463				777				368
Provision for PCI loan losses	69				74				—				—				—
Loans charged-off:
Commercial and industrial	(781		)		—				(61		)		(5		)		(1,465		)
Commercial real estate	(132		)		24				(226		)		—				(140		)
Residential mortgages	(46		)		—				—				(2		)		—
Home equity	—				—				(9		)		(23		)		—
Consumer	(332		)		(158		)		(60		)		(38		)		(146		)
Other	—				—				(5		)		—				—
Total loans charged-off	(1,291		)		(134		)		(361		)		(68		)		(1,751		)
Recoveries on loans previously charged‑off:
Commercial and industrial	—				—				2				—				2
Commercial real estate	—				(15		)		20				—				—
Construction and land	—				—				12				—				15
Residential mortgages	—				—				5				—				—
Home equity	—				—				2				—				—
Consumer	1				2				12				60				69
Other	—				—				2				—				—
Total recoveries	1				(13		)		55				60				86
Net charge-offs	$	(1,290	)		$	(147	)		$	(306	)		$	(8	)		$	(1,665	)
Balance at period end	$	19,939			$	20,595			$	18,534			$	18,377			$	17,608
Net charge-offs (annualized) to average loans	0.26			%	0.03			%	0.06			%	—			%	0.35			%
Allowance for loan losses to total loans	1.05				1.04				0.92				0.95				0.93

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Investment Securities

Investment securities available-for-sale totaled $456.9 million at March 31, 2017, compared to $347.7 million at December 31, 2016. Atlantic Capital purchased $121.4 million in available-for-sale securities during the first quarter of 2017, as a response to the decrease in mortgage warehouse loans. Available-for-sale securities are reported at their aggregate fair value, and unrealized gains and losses are included as a component of other comprehensive income, net of deferred taxes. As of March 31, 2017, investment securities available-for-sale had a net unrealized loss of $9.0 million, compared to a net unrealized loss of $9.6 million as of December 31, 2016. Market changes in interest rates and credit spreads result in temporary unrealized losses as the market price of securities fluctuate. After evaluating the securities with unrealized losses, management concluded that no other than temporary impairment existed as of March 31, 2017.

Changes in the amount of Atlantic Capital’s investment securities portfolio result primarily from balance sheet trends including loans, deposit balances and short-term borrowings. When inflows arising from deposits and short-term borrowings exceed loan demand, Atlantic Capital invests excess funds in the securities portfolio or in short-term investments. Conversely, when loan demand exceeds growth in deposits and short-term borrowings, Atlantic Capital allows interest-bearing balances with other banks to decline and uses proceeds from maturing or sold securities to fund loan demand. Details of investment securities at March 31, 2017 and December 31, 2016 are provided in Table 10.

Table 10 - Investment Securities
(dollars in thousands)
	March 31, 2017				December 31, 2016
Available for Sale Securities	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Government agencies	$	35,623	$	35,243	$	21,485	$	21,152
U.S. states and political divisions	98,317		92,245		96,908		90,172
Trust preferred securities	4,734		4,525		4,727		4,525
Corporate debt securities	19,857		19,186		19,928		19,231
Residential mortgage-backed securities	307,460		305,743		214,297		212,625
Total	$	465,991	$	456,942	$	357,345	$	347,705

The effective duration of Atlantic Capital’s investment securities at March 31, 2017 was 4.76 years.

Goodwill and Other Intangible Assets

Atlantic Capital’s core deposit intangible representing the value of the acquired deposit base, is an amortizing intangible asset that is required to be tested for impairment only when events or circumstances indicate that impairment may exist. There were no events or circumstances that led management to believe that any impairment existed at March 31, 2017 in Atlantic Capital’s other intangible assets.

Goodwill represents the premium paid for acquired companies above the fair value of the assets acquired and liabilities assumed, including separately identifiable intangible assets. Atlantic Capital evaluates its goodwill annually, or more frequently if necessary, to determine if any impairment exists.

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LIQUIDITY AND CAPITAL RESOURCES

Deposits

At March 31, 2017, total deposits were $2.20 billion, a decrease of $34.5 million, or 2%, since December 31, 2016. Noninterest-bearing demand deposits decreased $37.1 million, or 6%, and brokered deposits increased $9.2 million, or 5%, from December 31, 2016 to March 31, 2017.

Total average deposits for the quarter ended March 31, 2017 were $2.11 billion, a decrease of $43.7 million, or 2%, since the same period in 2016. Average noninterest-bearing demand deposits increased $65.8 million, or 12%, and average money market deposits increased $46.6 million, or 6%, from the quarter ended March 31, 2016 to the same period in 2017. However, average time deposits decreased $104.3 million, or 39%, from the quarter ended March 31, 2016 to the same period in 2017.

Table 11 - Deposits
(dollars in thousands)
Period End Deposits
	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			Linked Quarter Change			Year Over Year Change
DDA	$	606,386		$	643,471		$	557,783		$	592,043		$	560,363		$	(37,085	)	$	46,023
NOW	259,760			264,062			260,531			231,091			215,176			(4,302		)	44,584
Savings	30,756			27,932			29,658			30,839			29,788			2,824			968
Money Market	916,390			912,493			974,072			913,094			862,120			3,897			54,270
Time	150,867			157,810			172,348			178,615			187,750			(6,943		)	(36,883		)
Brokered	209,385			200,223			194,464			212,623			229,408			9,162			(20,023		)
Deposits to be assumed in branch sale	29,495			31,589			—			—			197,857			(2,094		)	(168,362		)
Total Deposits	$	2,203,039		$	2,237,580		$	2,188,856		$	2,158,305		$	2,282,462		$	(34,541	)	$	(79,423	)
Payments Clients	$	321,899		$	347,833		$	212,049		$	295,440		$	300,348		$	(25,934	)	$	21,551
Average Deposits(1)
	2017			2016												Linked Quarter Change			Year Over Year Change
	First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter
DDA	$	620,325		$	591,166		$	555,008		$	538,422		$	554,547		$	29,159		$	65,778
NOW	290,862			253,187			282,701			272,556			302,376			37,675			(11,514		)
Savings	30,306			29,741			30,692			35,090			45,571			565			(15,265		)
Money Market	815,920			853,281			923,435			865,447			769,369			(37,361		)	46,551
Time	163,021			169,677			175,135			203,679			267,330			(6,656		)	(104,309		)
Brokered	191,558			197,833			196,598			220,098			216,490			(6,275		)	(24,932		)
Total Deposits	$	2,111,992		$	2,094,885		$	2,163,569		$	2,135,292		$	2,155,683		$	17,107		$	(43,691	)
Payments Clients	$	273,630		$	211,000		$	184,895		$	176,474		$	155,860		$	62,630		$	117,770
Noninterest bearing deposits as a percentage of average deposits	29.4		%	28.2		%	25.7		%	25.2		%	25.7		%
Cost of deposits	0.39		%	0.37		%	0.36		%	0.35		%	0.31		%
(1) Includes average balances of deposits to be assumed in branch sale.

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Short-Term Borrowings

There were no securities sold under repurchase agreements with commercial checking customers or balances of federal funds purchased as of March 31, 2017 or December 31, 2016.

As a member of the Federal Home Loan Bank of Atlanta (“FHLB”), Atlantic Capital has the ability to acquire short and long-term advances through a blanket agreement secured by our unencumbered qualifying 1-4 family first mortgage loans and by pledging investment securities or individual, qualified loans, subject to approval of the FHLB. At March 31, 2017 and December 31, 2016, Atlantic Capital had FHLB advances of $217.0 million and $110.0 million, respectively. The balance of FHLB borrowings increased due to an increase in short-term funding needs.

Long-Term Debt

During the third quarter of 2015, Atlantic Capital issued $50.0 million in fixed-to-floating rate subordinated notes due in 2025, all of which was outstanding at March 31, 2017.

Liquidity risk management

Liquidity risk is the risk that an institution will be unable to generate or obtain sufficient funding, at a reasonable cost, to meet operational cash needs and to take advantage of revenue producing opportunities as they arise. Other forms of liquidity risk include market constraints on the ability to convert assets into cash at expected levels, an inability to access funding sources at sufficient levels at a reasonable cost, and changes in economic conditions or exposure to credit, market, operational, legal and reputation risks that can affect an institution’s liquidity risk profile. Liquidity management involves maintaining Atlantic Capital’s ability to meet the daily cash flow requirements of Atlantic Capital’s customers, both depositors and borrowers.

Atlantic Capital utilizes various measures to monitor and control liquidity risk across three different types of liquidity:

• tactical liquidity measures the risk of a negative cash flow position whereby cash outflows exceed cash inflows over a short-term horizon;

• structural liquidity measures the amount by which illiquid assets are supported by long-term funding; and

• contingent liquidity utilizes cash flow stress testing across three crisis scenarios to determine the adequacy of Atlantic Capital’s liquidity.

Atlantic Capital aims to maintain a diverse mix of existing and potential liquidity sources to support the liquidity management function. At its core is a reliance on the customer deposit book, due to the low cost it offers. Other sources of liquidity include asset-based liquidity in the form of cash and unencumbered securities, as well as access to wholesale funding from external counterparties, primarily advances from the FHLB of Atlanta, Federal Funds lines and other borrowing facilities. Atlantic Capital aims to avoid funding concentrations by diversifying external secured and unsecured funding with respect to maturities, counterparties and nature. At March 31, 2017, Atlantic Capital expected to maintain sufficient on-balance sheet liquidity to meet its funding needs.

At March 31, 2017, Atlantic Capital had access to $375.0 million in unsecured borrowings and $534.7 million in secured borrowings through various sources. Atlantic Capital also has the ability to attract more retail deposits by offering aggressively priced rates.

Shareholders’ Equity and Capital Adequacy

Shareholders’ equity at March 31, 2017 was $311.0 million, an increase of $7.3 million, or 2%, from December 31, 2016. Accumulated other comprehensive income, which includes unrealized gains and losses on securities available-for-sale and unrealized gains and losses on derivatives qualifying as cash flow hedges, is excluded in the calculation of regulatory capital ratios.

Atlantic Capital and the Bank are required to meet minimum capital requirements imposed by regulatory authorities. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on Atlantic Capital’s consolidated financial statements.

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Table 12 - Capital Ratios
(dollars in thousands)	Consolidated						Bank						Regulatory Guidelines
													Minimum				Well capitalized
	March 31, 2017			December 31, 2016			March 31, 2017			December 31, 2016			Prior to January 1, 2015		Beginning January 1, 2015		Prior to January 1, 2015		Beginning January 1, 2015
Risk based ratios:
Common equity tier 1 capital	10.7		%	10.3		%	12.2		%	11.8		%	N/A	%	4.5	%	N/A	%	6.5	%
Tier 1 Capital	10.7			10.3			12.2			11.8			4.0		6.0		6.0		8.0
Total capital	13.8			13.3			13.1			12.7			8.0		8.0		10.0		10.0
Leverage ratio	9.5			9.1			10.8			10.4			4.0		4.0		5.0		5.0
Common equity tier 1 capital	$	248,214		$	241,313		$	282,892		$	276,778
Tier 1 capital	248,214			241,313			282,892			276,778
Total capital	318,317			311,954			303,587			298,053
Risk weighted assets	2,312,322			2,343,622			2,312,946			2,344,387
Quarterly average total assets for leverage ratio	2,626,554			2,654,473			2,628,083			2,654,473

Atlantic Capital continues to exceed minimum capital standards and the Bank remains “well-capitalized” under regulatory guidelines.

In July 2013, bank regulatory agencies approved the Basel III capital guidelines, which are aimed at strengthening existing capital requirements for bank holding companies through a combination of higher minimum capital requirements, new capital conservation buffers and more conservative definitions of capital and balance sheet exposure. Atlantic Capital and the Bank became subject to the requirements of Basel III effective January 1, 2015, subject to a transition period for several aspects of the rule.

Under the revised rules, Atlantic Capital’s common equity tier 1 ratio was 10.7% at March 31, 2017, exceeding the fully phased-in minimum of 7.0%, which includes the 2.5% minimum capital conservation buffer. Management continues to monitor Basel III developments and remains committed to managing Atlantic Capital’s capital levels in a prudent manner.

Table 13 - Tier 1 Common Equity
(dollars in thousands)
	March 31, 2017
Tier 1 capital	$	248,214
Less: restricted core capital	—
Tier 1 common equity	$	248,214
Risk-adjusted assets	$	2,312,322
Tier 1 common equity ratio	10.7		%

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Table 14 discloses the minimum and well-capitalized requirements for the transitional period beginning during 2016 and the fully phased-in requirements that becomes effective during 2019.

Table 14 - Capital Requirements
	Basel III minimum requirement 2017		Basel III well capitalized 2017		Minimum Capital plus capital conservation buffer 2019
Common equity tier I to risk weighted assets	4.5	%	6.5	%	7.0	%
Tier 1 capital to risk weighted assets	6.0		8.0		8.5
Total capital ratio to risk weighted assets	8.0		10.0		10.5
Leverage ratio	4.0		5.0		N/A

Off-Balance Sheet Arrangements

Atlantic Capital makes contractual commitments to extend credit and issues standby letters of credit in the ordinary course of its business activities. These commitments are legally binding agreements to lend money to customers at predetermined interest rates for a specified period of time. In addition to commitments to extend credit, Atlantic Capital also issues standby letters of credit which are assurances to a third party that it will not suffer a loss if the customer fails to meet a contractual obligation to the third party. At March 31, 2017, Atlantic Capital had issued commitments to extend credit of approximately $689.5 million and standby letters of credit of approximately $16.2 million through various types of commercial lending arrangements.

Based on historical experience, many of the commitments and letters of credit will expire unfunded. Through its various sources of liquidity, Atlantic Capital believes it will be able to fund these obligations as they arise. Atlantic Capital evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on Atlantic Capital’s credit evaluation of the borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, and commercial and residential real estate.

Contractual Obligations

There have been no significant changes in Atlantic Capital’s contractual obligations at March 31, 2017 compared to December 31, 2016.

RISK MANAGEMENT

Effective risk management is critical to Atlantic Capital’s success. The Dodd-Frank Act requires that bank holding companies with total assets in excess of $10 billion establish an enterprise-wide risk committee consisting of members of its board of directors. Although Atlantic Capital does not have total assets in excess of $10 billion, the Bank’s board of directors has an Audit and Risk Committee that, among other responsibilities, provides oversight of enterprise-wide risk management activities. The Audit and Risk Committee reviews the Bank’s activities in identifying, measuring and mitigating existing and emerging risks (including credit, liquidity, interest-rate, compliance, operational, strategic and reputational risks). The committee monitors management’s execution of risk management practices in accordance with the risk appetite of the Bank, reviews supervisory examination reports together with management’s response to such examinations and discusses legal matters that may have a material impact on the financial statements or Atlantic Capital’s compliance policies. With guidance from and oversight by the Audit and Risk Committee, management continually refines and enhances its risk management policies and procedures to maintain effective risk management programs and processes.

Credit risk management

Credit risk is the risk of not collecting payments pursuant to the contractual terms of loans, leases and investment securities. Atlantic Capital’s independent credit review function conducts risk reviews and analyses of loans to help assure compliance with credit policies and to monitor asset quality trends.The risk reviews include portfolio analysis by geographic location, industry, collateral type and product. Atlantic Capital strives to identify potential problem loans as early as possible, to record charge-offs or write-downs as appropriate and to maintain adequate allowances for loan losses that are inherent in the loan portfolio.

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Market Risk

Market risk reflects the risk of economic loss resulting from adverse changes in market price and interest rates. This risk of loss can be reflected in diminished current market values and/or reduced potential net interest income in future periods. Atlantic Capital’s market risk arises primarily from interest rate risk inherent in Atlantic Capital’s lending and deposit-taking activities. The structure of Atlantic Capital’s loan and deposit portfolios is such that a significant decline in interest rates may adversely impact net market values and net interest income. Atlantic Capital does not maintain a trading account nor is Atlantic Capital subject to currency exchange risk or commodity price risk.

Interest Rate Risk Management

Interest rate risk results principally from assets and liabilities maturing or repricing at different points in time, from assets and liabilities repricing at the same point in time but in different amounts and from short-term and long-term interest rates changing in different magnitudes. Market interest rates also have an impact on the interest rate and repricing characteristics of loans that are originated as well as the rate characteristics of interest-bearing liabilities.

Atlantic Capital assesses interest rate risk by forecasting net interest income under various interest rate scenarios and comparing those results to forecasted net interest income assuming stable rates. Atlantic Capital’s rate shock simulation, as of March 31, 2017, indicates that, over a 12-month period, net interest income is estimated to increase by 14.81% with rates rising 200-basis points. The increase in net interest income is primarily due to the short-term repricing characteristics of the loan portfolio, combined with a favorable funding mix. Atlantic Capital’s loan portfolio consists mainly of floating rate loans. Atlantic Capital’s core client deposits are likely to allow Atlantic Capital to lag short term interbank rate indices when pricing deposits. Transaction accounts comprise a significant amount of Atlantic Capital’s total deposits.

Table 15 provides the impact on net interest income resulting from various interest rate scenarios as of March 31, 2017 and December 31, 2016.

Table 15 - Net Interest Income Sensitivity Simulation Analysis
	Estimated change in net interest income
Change in interest rate (basis point)	March 31, 2017			December 31, 2016
-100	(9.84	)	%	(8.59	)	%
+100	7.36			8.20
+200	14.81			16.39
+300	22.07			20.34

Atlantic Capital also utilizes the market value of equity (MVE) as a tool in measuring and managing interest rate risk. Long-term interest rate risk exposure is measured using the MVE sensitivity analysis to study the impact of long-term cash flows on capital. As of March 31, 2017, the MVE calculated with a 200-basis point shock up in rates increased by 8.02% from the base case MVE value. Table 16 presents the MVE profile as of March 31, 2017 and December 31, 2016.

Table 16 - Market Value of Equity Modeling Analysis
	Estimated % change in MVE
Change in interest rate (basis point)	March 31, 2017			December 31, 2016
-100	(4.16	)	%	0.90		%
+100	4.33			(2.39	)
+200	8.02			(4.52	)
+300	11.45			(5.94	)

Atlantic Capital may utilize interest rate swaps, floors, collars or other derivative financial instruments in an attempt to manage Atlantic Capital’s overall sensitivity to changes in interest rates.

51

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is included in Part I, Item 2 of this report under “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Risk Management.”

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures as required under Rule 13a-15 promulgated under the Exchange Act, that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of March 31, 2017, the Company’s management carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2017.

No changes were made to the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act) during the quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

52

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of operations, Atlantic Capital and the Bank are defendants in various legal proceedings. Additionally, in the ordinary course of business, Atlantic Capital and the Bank are subject to regulatory examinations and investigations. Based on our current knowledge and advice of counsel, in the opinion of management there is no such pending or threatened legal matter which would result in a material adverse change, either individually or in the aggregate, in the consolidated financial condition or results of operations of Atlantic Capital.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the Company’s Annual Report on Form 10-K for the period ended December 31, 2016, under Part I, Item 1A “Risk Factors,” because these risk factors may affect the operations and financial results of the Company. Our evaluation of our risk factors has not changed materially since those discussed in the Annual Report. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits listed in the accompanying Exhibit Index are filed as part of this report.

53

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

ATLANTIC CAPITAL BANCSHARES, INC.

/s/ Douglas L. Williams

Douglas L. Williams

Chief Executive Officer (Principal Executive Officer)

/s/ Patrick T. Oakes

Patrick T. Oakes

Executive Vice President and

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: May 9, 2017

54

EXHIBIT INDEX

3.1	Amended and Restated Articles of Incorporation of Atlantic Capital Bancshares, Inc., which is incorporated by reference to Exhibit 3.1 to our Registration Statement on Form S-4 (file no. 333-204855), initially filed with the Securities and Exchange Commission on June 10, 2015
3.2	Amended and Restated Bylaws of Atlantic Capital Bancshares, Inc., which is incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K (file no. 001-37615), filed with the Securities and Exchange Commission on January 19, 2017
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) under the Exchange Act, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) under the Exchange Act, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016; (ii) the Consolidated Statements of Income for the three months ended March 31, 2017 and 2016; (iii) the Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016; (iv) the Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2017 and 2016; (v) the Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016; and (vi) the Notes to the Unaudited Consolidated Financial Statements

55

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE EXCHANGE ACT,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Douglas L. Williams, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Atlantic Capital Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2017

/s/ Douglas L. Williams

Douglas L. Williams

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE EXCHANGE ACT,

AS ADOPTEDPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Patrick T. Oakes, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Atlantic Capital Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2017

/s/ Patrick T. Oakes

Patrick T. Oakes

Executive Vice President, Chief Financial Officer, and Secretary

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Douglas L. Williams, Chief Executive Officer of Atlantic Capital Bancshares, Inc. (the “Company”), certify pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 2017 (the “Report”), as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company on the dates and for the periods presented therein.

May 9, 2017	/s/ Douglas L. Williams
	Douglas L. Williams
	Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Patrick T. Oakes, Chief Financial Officer of Atlantic Capital Bancshares, Inc. (the “Company”), certify pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 2017 (the “Report”), as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company on the dates and for the periods presented therein.

May 9, 2017	/s/ Patrick T. Oakes
	Patrick T. Oakes
	Executive Vice President, Chief Financial Officer, and Secretary

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 01, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	ATLANTIC CAPITAL BANCSHARES, INC.
Entity Central Index Key	0001461755
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		25,578,798

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Cash and due from banks	$ 34,626	$ 36,790
Interest-bearing deposits in banks	158,920	118,039
Other short-term investments	20,870	10,896
Cash and cash equivalents	214,416	165,725
Securities available-for-sale	456,942	347,705
Other investments	28,331	23,806
Loans held for sale	29,241	35,219
Loans held for investment	1,901,724	1,981,330
Less: allowance for loan losses	(19,939)	(20,595)
Loans held for investment, net	1,881,785	1,960,735
Branch premises held for sale	2,897	2,995
Premises and equipment, net	12,308	11,958
Bank owned life insurance	62,516	62,160
Goodwill and intangible assets, net	29,186	29,567
Other real estate owned	1,869	1,872
Other assets	82,587	85,801
Total assets	2,802,078	2,727,543
Deposits:
Noninterest-bearing demand	606,386	643,471
Interest-bearing checking	259,760	264,062
Savings	30,756	27,932
Money market	916,390	912,493
Time	150,867	157,810
Brokered deposits	209,385	200,223
Total deposits	2,173,544	2,205,991
Deposits to be assumed in branch sale	29,495	31,589
Federal Home Loan Bank borrowings	217,000	110,000
Long-term debt	49,408	49,366
Other liabilities	21,664	26,939
Total liabilities	2,491,111	2,423,885
SHAREHOLDERS’ EQUITY
Preferred Stock, no par value – 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2017 and December 31, 2016	0	0
Common stock, no par value – 100,000,000 shares authorized; 25,535,013 and 25,093,135 shares issued and outstanding as of March 31, 2017, and December 31, 2016, respectively	296,608	292,747
Retained earnings	19,766	16,536
Accumulated other comprehensive (loss) income	(5,407)	(5,625)
Total shareholders’ equity	310,967	303,658
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 2,802,078	$ 2,727,543

XML

Consolidated Balance Sheets (Parenthetical) - shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock authorized (in shares)	10,000,000	10,000,000
Preferred stock issued (in shares)	0	0
Preferred stock outstanding (in shares)	0	0
Common stock authorized (in shares)	100,000,000	100,000,000
Common stock issued (in shares)	25,535,013	25,093,135
Common stock outstanding (in shares)	25,535,013	25,093,135

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
INTEREST INCOME
Loans, including fees	$ 19,994	$ 19,625
Investment securities – available-for-sale	2,018	1,601
Interest and dividends on other interest-earning assets	449	273
Total interest income	22,461	21,499
INTEREST EXPENSE
Interest on deposits	2,047	1,673
Interest on Federal Home Loan Bank advances	302	44
Interest on federal funds purchased and securities sold under agreements to repurchase	36	67
Interest on long-term debt	823	810
Other	0	38
Total interest expense	3,208	2,632
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES	19,253	18,867
Provision for loan losses	634	368
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	18,619	18,499
NONINTEREST INCOME
Service charges	1,349	1,498
Gain on sales of securities available-for-sale	0	33
Gain on sales of other assets	78	48
Mortgage income	257	339
Trust income	407	314
Derivatives income	(51)	65
Bank owned life insurance	378	393
SBA lending activities	1,227	880
TriNet lending activities	20	383
Other noninterest income	192	467
Total noninterest income	3,857	4,420
NONINTEREST EXPENSE
Salaries and employee benefits	11,065	10,555
Occupancy	1,230	1,100
Equipment and software	805	686
Professional services	904	748
Postage, printing and supplies	85	169
Communications and data processing	987	916
Marketing and business development	270	267
FDIC premiums	314	398
Merger and conversion costs	0	749
Amortization of intangibles	470	762
Foreclosed property/problem asset expense	3	104
Other noninterest expense	1,611	1,812
Total noninterest expense	17,744	18,266
INCOME BEFORE PROVISION FOR INCOME TAXES	4,732	4,653
Provision for income taxes	1,502	1,722
NET INCOME	$ 3,230	$ 2,931
NET INCOME PER SHARE:
Net income per share – basic (in dollars per share)	$ 0.13	$ 0.12
Net income per share – diluted (in dollars per share)	$ 0.13	$ 0.12

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 3,230	$ 2,931
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains arising during the period, net of tax of $227 and $1,640, respectively	364	2,635
Reclassification adjustment for gains included in net income net of tax of $0 and ($13), respectively	0	(20)
Unrealized gains on available-for-sale securities, net of tax	364	2,615
Cash flow hedges:
Net unrealized derivative (losses) gains on cash flow hedges, net of tax of ($91) and $364, respectively	(146)	573
Changes from cash flow hedges	(146)	573
Other comprehensive income, net of tax	218	3,188
Comprehensive income	$ 3,448	$ 6,119

XML

Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Unrealized holding gains arising during the period, net of tax	$ 227	$ 1,640
Reclassification adjustment for gains included in net income net of tax	0	(13)
Net unrealized derivative (losses) gains on cash flow hedges, net of tax	$ (91)	$ 364

XML

Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2015		24,425,546,000
Beginning balance, accumulated other comprehensive income (loss) at Dec. 31, 2015	$ 287,992	$ 286,367	$ 3,141	$ (1,516)
Comprehensive income:
Net income	2,931		2,931
Change in unrealized gains on investment securities available-for-sale, net	2,615			2,615
Change in unrealized gains (losses) on cash flow hedges	573			573
Comprehensive income	6,119
Issuance of restricted stock (in shares)		9,500,000
Issuance of common stock for option exercises (in shares)		68,628,000
Issuance of common stock for option exercises	534	$ 534
Issuance of common stock for long-term incentive plan (in shares)		66,149,000
Issuance of common stock for long-term incentive plan	884	$ 884
Restricted stock activity	239	239
Stock-based compensation	247	$ 247
Ending balance (in shares) at Mar. 31, 2016		24,569,823,000
Ending balance, accumulated other comprehensive income (loss) end of period at Mar. 31, 2016	$ 296,015	$ 288,271	6,072	1,672
Beginning balance (in shares) at Dec. 31, 2016	25,093,135	25,093,135,000
Beginning balance, accumulated other comprehensive income (loss) at Dec. 31, 2016	$ 303,658	$ 292,747	16,536	(5,625)
Comprehensive income:
Net income	3,230		3,230
Change in unrealized gains on investment securities available-for-sale, net	364			364
Change in unrealized gains (losses) on cash flow hedges	(146)			(146)
Comprehensive income	$ 3,448
Issuance of common stock for option exercises (in shares)	633,922	380,079,000
Issuance of common stock for option exercises	$ 2,281	$ 2,281
Issuance of common stock for long-term incentive plan (in shares)		61,799,000
Issuance of common stock for long-term incentive plan	1,209	$ 1,209
Restricted stock activity	229	229
Stock-based compensation	$ 142	$ 142
Ending balance (in shares) at Mar. 31, 2017	25,535,013	25,535,013,000
Ending balance, accumulated other comprehensive income (loss) end of period at Mar. 31, 2017	$ 310,967	$ 296,608	$ 19,766	$ (5,407)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
OPERATING ACTIVITIES
Net income	$ 3,230	$ 2,931
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses	634	368
Depreciation, amortization, and accretion	1,428	1,352
Amortization of restricted stock compensation	229	239
Stock option compensation	142	247
Gain on sales of available-for-sale securities	0	(33)
Net gains on sales of other real estate owned	(78)	(48)
Net increase in cash value of bank owned life insurance	(356)	(373)
Origination of servicing rights	(267)	(429)
Proceeds from sales of SBA loans	11,698	10,318
Net gains on sale of SBA loans	(762)	(777)
Proceeds from sales of TriNet loans	0	29,811
Net gains on sale of TriNet loans	0	(383)
Changes in operating assets and liabilities -
Net change in loans held for sale	5,978	(12,946)
Net (increase) decrease in other assets	3,774	(7,214)
Net increase (decrease) in accrued expenses and other liabilities	(4,202)	(1,345)
Net cash provided by operating activities	21,448	21,718
Activity in securities available-for-sale:
Prepayments	10,804	9,242
Maturities and calls	1,000	5,102
Sales	0	4,953
Purchases	(121,427)	(36,231)
Net decrease (increase) in loans held for investment	67,244	(123,659)
(Purchases) proceeds of Federal Home Loan Bank stock, net	(4,631)	(3,894)
Proceeds from sales of other real estate	216	321
Purchases of premises and equipment, net	(703)	(198)
Net cash used in investing activities	(47,497)	(144,364)
FINANCING ACTIVITIES
Net change in deposits	(34,541)	20,244
Proceeds from Federal Home Loan Bank advances	474,000	155,000
Repayments of Federal Home Loan Bank advances	(367,000)	(95,000)
Proceeds from exercise of stock options	2,281	571
Net cash provided by financing activities	74,740	80,815
NET CHANGE IN CASH AND CASH EQUIVALENTS	48,691	(41,831)
CASH AND CASH EQUIVALENTS – beginning of period	165,725	202,885
CASH AND CASH EQUIVALENTS – end of period	214,416	161,054
SUPPLEMENTAL SCHEDULE OF CASH FLOWS
Interest paid	4,028	3,393
Income taxes paid	$ 110	$ 93

XML

Accounting Policies and Basis of Presentation

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Accounting Policies and Basis of Presentation

ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Basis of Presentation

The accounting and financial reporting policies of Atlantic Capital Bancshares, Inc. (“Atlantic Capital”) and its subsidiary conform to accounting principles generally accepted in the United States of America (“GAAP”) and general banking industry practices. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated.

In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Atlantic Capital’s filing on Form 10-K. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods. Certain prior period amounts have been reclassified to conform to the current year presentation.

XML

Accounting Standards Updates and Recently Adopted Standards

3 Months Ended

Mar. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Updates and Recently Adopted Standards

ACCOUNTING STANDARDS UPDATES AND RECENTLY ADOPTED STANDARDS

In March 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-08 “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This guidance shortens the premium amortization period for certain callable debt securities by requiring amortization to the earliest call date. The standard is effective for public companies for annual and interim periods beginning after December 15, 2020. The adoption of this update is not expected to have a material impact on Atlantic Capital’s consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which intends to simplify goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. The update instead requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. ASU 2017-04 must be applied prospectively and is effective for the Company on January 1, 2020. Early adoption is permitted. Atlantic Capital does not expect the new guidance to have a material impact on its financial condition or results of operation.

In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments provide guidance on the following eight specific cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. The amendments are effective for public companies for fiscal years beginning after December 31, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. As this guidance only affects the classification within the statement of cash flows, this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU 2016-13 is effective for public companies for annual periods beginning after December 13, 2019, including interim periods within those fiscal years. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Atlantic Capital is in the process of evaluating the impact of the adoption of ASU 2016-13 on the Company’s consolidated financial statements and disclosures.

In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 simplify several aspects of accounting for employee share-based payments including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some areas of the simplification apply only to nonpublic entities. The new guidance will require all income tax effects of awards to be recognized as income tax expense or benefit in the income statement when the awards vest or are settled and additional paid in capital pools will be eliminated. The guidance requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. Companies will be required to account for forfeitures of share-based payments by recognizing forfeitures of awards as they occur or estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as currently required, through an accounting policy election. The guidance will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s income tax withholding obligation. The guidance requires an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on the statement of cash flows. ASU 2016-09 became effective for the Company on January 1, 2017 and did not have a material effect on its financial position or results of operations.

In February 2016, the FASB issued Accounting Standards Update 2016-2, Leases. Under the new guidance, leases classified as operating leases under previous GAAP must be recorded on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Atlantic Capital is evaluating the significance and other effects of adoption on the consolidated financial statements and related disclosures.

In January 2016, the FASB issued ASU 2016-1, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities. The guidance in this update requires that equity investments (except those accounting for under the equity method of accounting) be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The guidance also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. In addition, the guidance addresses various disclosure and presentation issues related to financial instruments. For public entities, this update is effective for fiscal years beginning after December 15, 2017 with early application permitted. The adoption of this update is not expected to have a material impact on Atlantic Capital’s consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers. This update is a joint project with the International Accounting Standards Board initiated to clarify the principles for recognizing revenue and to develop a common revenue standard that is meant to remove inconsistencies and weaknesses in revenue requirements, provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices, provide more useful information to users of financial statements and simplify the preparation of financial statements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public companies, this guidance is effective for annual and interim periods beginning after December 15, 2017. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, Atlantic Capital does not expect this ASU to have a material impact on net interest income and securities gains. Atlantic Capital is evaluating the impact to other revenue streams such as service charges and trust income.

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Acquisitions and Divestitures

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Acquisitions and Divestitures

ACQUISITIONS AND DIVESTITURES

On October 31, 2015, Atlantic Capital completed the acquisition of First Security Group, Inc. (“First Security”). First Security operated twenty-five branches in Georgia and Tennessee. In connection with the acquisition, Atlantic Capital acquired approximately $801.1 million of loans and assumed approximately $970.0 million of deposits.

Acquisition-related costs totaled $0 and $749,000 for the three months ended March 31, 2017 and 2016, respectively, and were included in noninterest expense in the consolidated income statement. Acquisition related costs primarily include severance costs, professional services, data processing fees related to systems conversion and other noninterest expenses.

Divestiture of Branches

On December 17, 2015, the Bank entered into two separate definitive agreements to sell seven branches in the Bank’s Tennessee market. The agreement with First Freedom Bank included the sale of three branches located in Algood, Cookeville and Gainesboro, Tennessee for a premium of 2.25% of deposits. The agreement with Athens Federal Community Bank, N.A. included the sale of four branches in Athens, Lenoir City, Madisonville and Sweetwater, Tennessee for a premium of 3.50% of deposits. Both transactions closed in the second quarter of 2016 and resulted in a combined gain of $3.9 million as well as a reduction of approximately $191.0 million in deposits, approximately $34.7 million in loans and approximately $8.6 million in other assets. The gain was somewhat reduced by an impairment of $2.0 million in core deposit intangibles, which was offset by a $344,000 reversal in time deposit premium. There were also $305,000 of expenses associated with the divestitures included in noninterest expense in the second quarter of 2016.

On December 9, 2016, Atlantic Capital entered into a definitive agreement to sell one branch in Cleveland, Tennessee, to SmartBank. This branch divestiture includes the sale of approximately $29 million in deposits and approximately $31 million in loans and other assets. Subject to customary closing conditions, including the receipt of all necessary regulatory approvals, the branch sale is expected to be completed during the second quarter of 2017.

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Balance Sheet Offsetting

3 Months Ended

Mar. 31, 2017

Offsetting [Abstract]

Balance Sheet Offsetting

BALANCE SHEET OFFSETTING

Atlantic Capital enters into reverse repurchase agreements in order to invest short-term funds. The Company enters into repurchase agreements for short-term financing needs.

The following table presents a summary of amounts outstanding under reverse repurchase agreements, repurchase agreements, and derivative financial instruments including those entered into in connection with the same counterparty under master netting agreements as of March 31, 2017 and December 31, 2016. While these agreements are typically over-collateralized, U.S. GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related recognized asset or liability for each counterparty.

(in thousands)							Gross Amounts not Offset in the Balance Sheet
March 31, 2017	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	20,870	$	—	$	20,870	$	(20,870	)	$	—		$	—
Derivatives	3,561		—		3,561		—			—			3,561
Total	$	24,431	$	—	$	24,431	$	(20,870	)	$	—		$	3,561
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	3,642		—		3,642		(2,329		)	(1,313		)	—
Total	$	3,642	$	—	$	3,642	$	(2,329	)	$	(1,313	)	$	—
							Gross Amounts not Offset in the Balance Sheet
December 31, 2016	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	10,896	$	—	$	10,896	$	(10,896	)	$	—		$	—
Derivatives	4,310		—		4,310		—			—			4,310
Total	$	15,206	$	—	$	15,206	$	(10,896	)	$	—		$	4,310
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	4,131		—		4,131		(1,818		)	(2,313		)	—
Total	$	4,131	$	—	$	4,131	$	(1,818	)	$	(2,313	)	$	—

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Securities

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Securities

SECURITIES

The following table presents the amortized cost, unrealized gains and losses, and fair value of securities available-for-sale at March 31, 2017 and December 31, 2016.

Available-For-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
March 31, 2017
Debt securities—
U.S. Government agencies	$	35,623	$	43	$	(423	)	$	35,243
U.S. states and political divisions	98,317		163		(6,235		)	92,245
Trust preferred securities	4,734		—		(209		)	4,525
Corporate debt securities	19,857		63		(734		)	19,186
Residential mortgage-backed securities	307,460		2,686		(4,403		)	305,743
Total	$	465,991	$	2,955	$	(12,004	)	$	456,942
December 31, 2016
Debt securities—
U.S. Government agencies	$	21,485	$	24	$	(357	)	$	21,152
U.S. states and political divisions	96,908		141		(6,877		)	90,172
Trust preferred securities	4,727		—		(202		)	4,525
Corporate debt securities	19,928		72		(769		)	19,231
Residential mortgage-backed securities	214,297		2,689		(4,361		)	212,625
Total	$	357,345	$	2,926	$	(12,566	)	$	347,705

The following table presents the amortized cost and fair value of debt securities by contractual maturity at March 31, 2017. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-For-Sale
	Amortized Cost		Fair Value
	(in thousands)
Within 1 year	$	4,210	$	4,220
Over 1 year through 5 years	18,313		18,013
5 years to 10 years	58,903		57,731
Over 10 years	77,105		71,235
	158,531		151,199
Residential mortgage-backed securities	307,460		305,743
Total	$	465,991	$	456,942

The following table summarizes available-for-sale securities in an unrealized loss position as of March 31, 2017 and December 31, 2016.

	Less than 12 months					12 months or greater					Totals
Available-For-Sale	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
March 31, 2017
U.S. Government agencies	$	24,698	$	(336	)	2,738		$	(87	)	$	27,436	$	(423	)
U.S. states and political divisions	85,079		(6,213		)	1,420		(22		)	86,499		(6,235		)
Trust preferred securities	—		—			4,525		(209		)	4,525		(209		)
Corporate debt securities	2,524		(18		)	5,861		(716		)	8,385		(734		)
Residential mortgage-backed securities	185,914		(2,449		)	68,168		(1,954		)	254,082		(4,403		)
Totals	$	298,215	$	(9,016	)	$	82,712	$	(2,988	)	$	380,927	$	(12,004	)
December 31, 2016
U.S. Government agencies	$	12,250	$	(263	)	$	2,881	$	(94	)	$	15,131	$	(357	)
U.S. states and political divisions	87,511		(6,877		)	—		—			87,511		(6,877		)
Trust preferred securities	—		—			4,525		(202		)	4,525		(202		)
Corporate debt securities	7,886		(769		)	—		—			7,886		(769		)
Residential mortgage-backed securities	151,406		(3,231		)	32,550		(1,130		)	183,956		(4,361		)
Totals	$	259,053	$	(11,140	)	$	39,956	$	(1,426	)	$	299,009	$	(12,566	)

At March 31, 2017, there were 289 available-for-sale securities that were in an unrealized loss position. Atlantic Capital does not intend to sell and does not believe it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. Unrealized losses at March 31, 2017 and December 31, 2016 were attributable to changes in interest rates.

Management evaluates securities for other-than-temporary impairment on a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. No impairment charges were recognized during the three months endedMarch 31, 2017 or 2016.

Realized gains and losses are derived using the specific identification method for determining the cost of securities sold. The following table summarizes securities sales activity for the three months endedMarch 31, 2017 and 2016.

	Three Months Ended March 31,
	2017		2016
	(in thousands)
Proceeds from sales	$	—	$	4,953
Gross realized gains	—		33
Gross realized losses	—		—
Net gains on sales of securities	$	—	$	33

Investment securities with a carrying value of $101.2 million and $104.9 million were pledged to secure public funds and other borrowings at March 31, 2017 and December 31, 2016, respectively.

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Loans and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2017

Loans and Leases Receivable Disclosure [Abstract]

Loans and Allowance for Loan Losses

LOANS AND ALLOWANCE FOR LOAN LOSSES

The composition of the loan portfolio as of March 31, 2017 and December 31, 2016, is summarized below.

	March 31, 2017			December 31, 2016
	(in thousands)
Loans held for sale
Branch loans held for sale	$	27,944		$	30,917
Other loans held for sale	1,297			4,302
Total loans held for sale	$	29,241		$	35,219
Loans held for investment
Commercial loans:
Commercial and industrial	$	544,911		$	531,061
Commercial real estate	935,588			858,778
Construction and land	135,637			219,352
Mortgage warehouse loans	58,357			147,519
Total commercial loans	1,674,493			1,756,710
Residential:
Residential mortgages	99,665			101,921
Home equity	81,438			77,358
Total residential loans	181,103			179,279
Consumer	32,525			27,338
Other	17,611			21,565
Total loans	1,905,732			1,984,892
Less net deferred fees and other unearned income	(4,008		)	(3,562		)
Less allowance for loan losses	(19,939		)	(20,595		)
Loans held for investment, net	$	1,881,785		$	1,960,735

At March 31, 2017 and December 31, 2016, loans with a carrying value of $498.3 million and $474.8 million, respectively, were pledged as collateral to secure FHLB advances and the Federal Reserve discount window.

At March 31, 2017, the carrying value and outstanding balance of Purchased Credit Impaired (“PCI”) loans accounted for under ASC 310-30 was $11.8 million and $15.0 million, respectively. At December 31, 2016, the carrying value and outstanding balance of Purchased Credit Impaired (“PCI”) loans accounted for under ASC 310-30 was $15.3 million and $18.7 million, respectively. The following table presents changes in the value of the accretable yield for acquired loans accounted for under ASC 310-30.

	Three Months Ended			Three Months Ended
	March 31, 2017			March 31, 2016
	(in thousands)
Balance at beginning of period	$	3,467		$	2,369
Additions due to acquisitions	—			—
Accretion	(444		)	(281		)
Reclassification of nonaccretable discount due to improvement in expected cash flows	251			—
Other changes, net	95			—
Balance at end of period	$	3,369		$	2,088

In addition to the accretable yield on PCI loans, the fair value adjustments on purchased loans outside the scope of ASC 310-30 are also accreted to interest income over the life of the loans. At March 31, 2017, the remaining accretable fair value discount on loans acquired through a business combination and not accounted for under ASC 310-30 was $3.6 million.

The allowance for loan losses represents management’s estimate of probable incurred losses in the loan portfolio as of the end of the period. It is comprised of specific reserves for impaired loans and a general allowance for pools of loans with similar characteristics not individually evaluated. The allowance is regularly evaluated for loan losses to maintain an adequate level to absorb probable current inherent losses in the loan portfolio. Factors contributing to the determination of the allowance include the credit worthiness of the borrower, changes in the value of pledged collateral, and general economic conditions. Most loan commitments rated substandard or worse are specifically reviewed for loss potential. For loans deemed to be impaired, a specific allocation is assigned based on the losses expected to be realized from those loans.

The following table presents the balance and activity in the allowance for credit losses by portfolio segment for the three months endedMarch 31, 2017 and 2016.

	2017												2016
Three Months Ended March 31,	Commercial			Residential			Consumer			Total			Commercial			Residential			Consumer			Total
	(in thousands)
Allowance for loan losses:
Beginning balance	$	18,717		$	1,418		$	460		$	20,595		$	16,537		$	1,981		$	387		$	18,905
Provision for loan losses	297			34			303			634			664			(479		)	183			368
Loans charged-off	(913		)	(46		)	(332		)	(1,291		)	(1,605		)	—			(146		)	(1,751		)
Recoveries	—			—			1			1			17			—			69			86
Total ending allowance balance	$	18,101		$	1,406		$	432		$	19,939		$	15,613		$	1,502		$	493		$	17,608

The general component of the allowance for loan losses is based on the incurred losses inherent in the portfolio. The loss factors are determined through the generation of probabilities of default (“PDs”) and losses given default (“LGDs”) for groups of similar loans with similar credit grades where Loss Rate = PD x LGD. The PDs and LGDs for the loan portfolio are calculated based on Atlantic Capital’s loss history as well as available market-based data. The loss factor for each pool of loans is adjusted based on Qualitative and Environmental factors to account for conditions in the current environment which management believes are likely to cause a difference between the calculated loss based on historical performance and the incurred loss in the existing portfolio. These factors include: changes in policies and procedures, changes in the economy, changes in nature or volume of the portfolio and in the terms of loans, changes in lending management, changes in past dues and credit migration, changes in the loan review system, changes in the value of collateral and concentration risk and changes in external factors, such as competition, legal and regulatory. On a quarterly basis, management evaluates these factors in order to determine an adjustment unique to Atlantic Capital and its market.

Charge-offs are recognized when the amount of the loss is quantifiable and timing is known. Collateral based loan charge-offs are measured based on the difference between the loan’s carrying value, including deferred fees, and the estimated net realizable value of the loan. When assessing property value for the purpose of determining a charge-off, a third-party appraisal or an independently derived internal evaluation is generally employed.

A loan is considered to be impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered TDRs and classified as impaired. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. A specific allowance is established for individually evaluated impaired loans as needed. Reserves on impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the observable market price, or the fair value of the underlying collateral of the loan if the loan is collateral dependent.

Nonaccrual loans include both homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans. Atlantic Capital’s policy is to place loans on nonaccrual status, when, in the opinion of management, the principal and interest on a loan is not likely to be repaid in accordance with the loan terms or when the loan becomes 90 days past due and is not both well secured and in the process of collection. When a loan is classified on nonaccrual status, interest previously accrued but not collected is reversed against current interest revenue. Principal and interest payments received on a nonaccrual loan are applied to reduce outstanding principal.

PCI loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. Loans accounted for under ASC 310-30 were not classified as nonaccrual at March 31, 2017 or December 31, 2016, as the carrying value of the respective loan or pool of loans’ cash flows were considered estimable and collection was probable. Therefore, interest revenue, through accretion of the difference between the carrying value of the loans and the expected cash flows (accretable yield), is being recognized on all acquired loans being accounted for under ASC 310-30.

The balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method is presented in the following table as of March 31, 2017 and December 31, 2016.

March 31, 2017	Commercial		Residential		Consumer		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	2,236	$	4	$	—	$	2,240
Collectively evaluated for impairment	15,792		1,334		430		17,556
PCI	73		68		2		143
Total ending allowance balance	$	18,101	$	1,406	$	432	$	19,939
Loans:
Loans individually evaluated for impairment	$	12,361	$	894	$	—	$	13,255
Loans collectively evaluated for impairment	1,654,457		176,053		50,126		1,880,636
PCI	7,675		4,156		10		11,841
Total ending loans balance	$	1,674,493	$	181,103	$	50,136	$	1,905,732
December 31, 2016	Commercial		Residential		Consumer		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	2,626	$	58	$	—	$	2,684
Collectively evaluated for impairment	16,018		1,360		459		17,837
PCI	73		—		1		74
Total ending allowance balance	$	18,717	$	1,418	$	460	$	20,595
Loans:
Loans individually evaluated for impairment	$	13,687	$	398	$	—	$	14,085
Loans collectively evaluated for impairment	1,732,324		174,338		48,892		1,955,554
PCI	10,699		4,543		11		15,253
Total ending loans balance	$	1,756,710	$	179,279	$	48,903	$	1,984,892

The following tables present information on Atlantic Capital’s impaired loans for the three months endedMarch 31, 2017 and 2016:

	For the Three Months Ended March 31,
	2017										2016
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Balance of Recorded Investment While Impaired		Interest Income Recognized During Impairment		Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Balance of Recorded Investment While Impaired		Interest Income Recognized During Impairment
	(in thousands)
Impaired loans with no related allowance recorded:
Commercial and industrial	$	1,132	$	1,069	$	—	$	1,550	$	17	$	2,779	$	2,779	$	—	$	2,743	$	36
Commercial real estate	2,388		2,226		—		2,303		—		2,209		2,068		—		2,068		14
Construction and land	—		—		—		—		—		—		—		—		—		—
Residential mortgages	244		198		—		225		—		—		—		—		—		—
Home equity	549		549		—		549		—		—		—		—		—		—
Mortgage warehouse	—		—		—		—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—		—		—		—
Total	$	4,313	$	4,042	$	—	$	4,627	$	17	$	4,988	$	4,847	$	—	$	4,811	$	50
Impaired loans with an allowance recorded:
Commercial and industrial	$	8,316	$	8,316	$	2,077	$	8,357	$	108	$	—	$	—	$	—	$	—	$	—
Commercial real estate	750		750		159		753		7		—		—		—		—		—
Construction and land	—		—		—		—		—		—		—		—		—		—
Residential mortgages	147		147		4		147		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—		—		—		—
Mortgage warehouse	—		—		—		—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—		—		—		—
Total	$	9,213	$	9,213	$	2,240	$	9,257	$	115	$	—	$	—	$	—	$	—	$	—
Total impaired loans	$	13,526	$	13,255	$	2,240	$	13,884	$	132	$	4,988	$	4,847	$	—	$	4,811	$	50

Atlantic Capital evaluates loans in accordance with ASC 310-40, Troubled Debt Restructurings by Creditors. Troubled debt restructurings (“TDR”) are loans in which Atlantic Capital has modified the terms or granted an economic concession to a borrower who is experiencing financial difficulties. These modifications may include interest rate reductions, term extensions and other concessions intended to minimize losses.

As of March 31, 2017 and December 31, 2016, the Company had a recorded investment in TDRs of $5.5 million and $6.6 million, respectively. The Company had commitments to lend additional funds of $781,000 and $387,000 on loans modified as TDRs, as of March 31, 2017 and December 31, 2016, respectively. The Company did not modify any new loans as a TDR during the three months endedMarch 31, 2017 or 2016 and there were no subsequent defaults on prior TDRs.

Atlantic Capital individually rates loans based on internal credit risk ratings using numerous factors, including thorough analysis of historical and expected cash flows, consumer credit risk scores (FICO scores), rating agency information, LTV ratios, collateral, collection experience, and other internal metrics. Atlantic Capital uses a dual rating system. The likelihood of default of a credit transaction is graded in the Obligor Rating. The risk of loss given default is graded in the Facility Rating. The Obligor Rating is determined through credit analysis. Facility Ratings are used to describe the value to the Bank that the collateral represents. Facility Ratings are based on the collateral package or market expectations regarding the value or liquidity of the collateral. Ratings are generally reviewed at least annually or more frequently if there is a material change in creditworthiness. Exceptions to this policy may include well collateralized term loans and loans to individuals with limited exposure or complexity.

Atlantic Capital uses the following definitions for risk ratings:

Pass: Loans that are analyzed individually as part of the above described process and that do not meet the criteria of special mention, substandard or doubtful.

Special Mention: Loans classified as special mention have a potential weakness that requires management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

As of March 31, 2017 and December 31, 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows.

	Pass		Special Mention		Substandard Accruing		Substandard Nonaccruing		Doubtful		Total
	(in thousands)
March 31, 2017
Commercial and industrial	$	514,887	$	6,066	$	20,455	$	25	$	—	$	541,433
Commercial real estate	919,769		7,160		2,884		2,031		—		931,844
Construction and land	130,373		4,728		63		20		—		135,184
Residential mortgages	94,589		1,505		648		485		—		97,227
Home equity	78,682		43		344		651		—		79,720
Mortgage warehouse	58,357		—		—		—		—		58,357
Consumer/Other	50,027		99		—		—		—		50,126
Total loans, excluding PCI loans	$	1,846,684	$	19,601	$	24,394	$	3,212	$	—	$	1,893,891
Commercial and industrial	$	2,313	$	315	$	218	$	—	$	632	$	3,478
Commercial real estate	3,200		216		328		—		—		3,744
Construction and land	408		8		37		—		—		453
Residential mortgages	99		1,122		1,217		—		—		2,438
Home equity	353		824		541		—		—		1,718
Mortgage warehouse	—		—		—		—		—		—
Consumer/Other	—		1		8		—		1		10
Total PCI loans	$	6,373	$	2,486	$	2,349	$	—	$	633	$	11,841

	Pass		Special Mention		Substandard Accruing		Substandard Nonaccruing		Doubtful		Total
	(in thousands)
December 31, 2016
Commercial and industrial	$	494,617	$	3,160	$	26,399	$	3	$	471	$	524,650
Commercial real estate	843,924		5,513		5,571		—		—		855,008
Construction and land	213,981		4,789		64		—		—		218,834
Residential mortgages	97,660		586		747		147		—		99,140
Home equity	75,031		168		397		—		—		75,596
Mortgage warehouse	147,519		—		—		—		—		147,519
Consumer/Other	48,680		190		22		—		—		48,892
Total loans, excluding PCI loans	$	1,921,412	$	14,406	$	33,200	$	150	$	471	$	1,969,639
Commercial and industrial	$	4,650	$	299	$	614	$	—	$	848	$	6,411
Commercial real estate	477		240		2,716		—		337		3,770
Construction and land	229		8		281		—		—		518
Residential mortgages	59		1,232		1,016		—		474		2,781
Home equity	364		834		564		—		—		1,762
Mortgage warehouse	—		—		—		—		—		—
Consumer/Other	1		—		10		—		—		11
Total PCI loans	$	5,780	$	2,613	$	5,201	$	—	$	1,659	$	15,253

Atlantic Capital monitors loans by past due status. The following table presents the aging of the recorded investment in past due loans as of March 31, 2017 and December 31, 2016 by class of loans.

	As of March 31, 2017
	Accruing Current		Accruing 30-89 Days Past Due		Accruing 90+ Days Past Due		Nonaccruing		PCI Loans		Total
	(in thousands)
Loans by Classification
Commercial and industrial	$	541,286	$	122	$	—	$	25	$	3,478	$	544,911
Commercial real estate	927,957		1,199		657		2,031		3,744		935,588
Construction and land	135,164		—		—		20		453		135,637
Residential mortgages	96,423		205		114		485		2,438		99,665
Home equity	78,715		354		—		651		1,718		81,438
Mortgage warehouse	58,357		—		—		—		—		58,357
Consumer	49,779		347		—		—		10		50,136
Total Loans	$	1,887,681	$	2,227	$	771	$	3,212	$	11,841	$	1,905,732

	As of December 31, 2016
	Accruing Current		Accruing 30-89 Days Past Due		Accruing 90+ Days Past Due		Nonaccruing		PCI Loans		Total
	(in thousands)
Loans by Classification
Commercial and industrial	$	520,908	$	3,079	$	189	$	474	$	6,411	$	531,061
Commercial real estate	852,626		2,382		—		—		3,770		858,778
Construction and land	218,290		544		—		—		518		219,352
Residential mortgages	97,901		664		428		147		2,781		101,921
Home equity	74,420		884		292		—		1,762		77,358
Mortgage warehouse	147,519		—		—		—		—		147,519
Consumer	48,558		249		85		—		11		48,903
Total Loans	$	1,960,222	$	7,802	$	994	$	621	$	15,253	$	1,984,892

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill and other intangible assets as of March 31, 2017 and December 31, 2016 is summarized below:

	March 31,			December 31,
	2017			2016
	(in thousands)
Core deposit intangible	$	9,544		$	9,544
Less: accumulated amortization	(3,441		)	(2,971		)
Less: impairment related to divested branches	(1,949		)	(1,949		)
Core deposit intangible, net	4,154			4,624
Servicing assets, net	3,273			3,184
Total other intangibles, net	7,427			7,808
Goodwill	21,759			21,759
Total goodwill and other intangible assets, net	$	29,186		$	29,567

During the three months ended March 31, 2017 and 2016, Atlantic Capital recorded measurement period adjustments that decreased goodwill by $0 and $906,000, respectively. The adjustments reduced the TriNet Servicing Asset, increased the book value of securities available-for-sale, and increased the Deferred Tax Asset.

There were no goodwill impairment charges recorded in the three months ended March 31, 2017 and 2016, respectively. The following table presents activity for goodwill and other intangible assets:

	Goodwill			Core Deposit Intangible			Total
	(in thousands)
Balance at December 31, 2015	$	23,352		$	9,018		$	32,370
Amortization	—			(762		)	(762		)
Measurement period adjustments	(906		)	—			(906		)
Balance at March 31, 2016	$	22,446		$	8,256		$	30,702
Balance at December 31, 2016	$	21,759		$	4,624		$	26,383
Amortization	—			(470		)	(470		)
Balance at March 31, 2017	$	21,759		$	4,154		$	25,913

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Servicing Rights

3 Months Ended

Mar. 31, 2017

Transfers and Servicing [Abstract]

Servicing Rights

SERVICING RIGHTS

SBA Servicing Rights

SBA servicing rights are initially recorded at fair value. Subsequently, Atlantic Capital accounts for SBA servicing rights using the amortization method and they are included in other assets. As of March 31, 2017 and December 31, 2016, the balance of SBA loans sold and serviced by Atlantic Capital totaled $117.8 million and $107.0 million, respectively.

Changes in the balance of servicing assets for the three months endedMarch 31, 2017 and 2016 are presented in the following table.

	Three months ended March 31,
SBA Loan Servicing Rights	2017			2016
	(in thousands)
Beginning carrying value, net	$	2,359		$	1,687
Additions	267			202
Amortization	(131		)	(29		)
Impairment	—			—
Ending carrying value	$	2,495		$	1,860

At March 31, 2017, the sensitivity of the fair value of the SBA loan servicing rights to immediate changes in key economic assumptions are presented in the table below.

Sensitivity of the SBA Servicing Asset	March 31, 2017
	(dollars in thousands)
Fair value of retained servicing assets	$	2,694
Weighted average life	6.55 years
Prepayment speed:	7.68			%
Decline in fair value due to a 10% adverse change	$	(89	)
Decline in fair value due to a 20% adverse change	$	(155	)
Weighted average discount rate	12.23			%
Decline in fair value due to a 100 bps adverse change	$	(99	)
Decline in fair value due to a 200 bps adverse change	$	(172	)

The above sensitivities are hypothetical and should be used with caution. As the amounts indicate, changes in fair value based on valuation assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

TriNet Servicing Rights

Changes in the balance of TriNet servicing assets for the three months endedMarch 31, 2017 and 2016 are presented in the following table.

	Three months ended March 31,
TriNet Servicing Rights	2017			2016
	(in thousands)
Beginning carrying value, net	$	825		$	1,175
Additions	—			227
Amortization	(47		)	(50		)
Impairment	—			—
Ending carrying value	$	778		$	1,352

At March 31, 2017, the sensitivity of the fair value of the TriNet servicing rights to immediate changes in key economic assumptions are presented in the table below.

Sensitivity of the TriNet Servicing Rights	March 31, 2017
	(dollars in thousands)
Fair value of retained servicing assets	$	809
Weighted average life	8.70 years
Prepayment speed:	5.00			%
Decline in fair value due to a 10% adverse change	$	(9	)
Decline in fair value due to a 20% adverse change	$	(21	)
Weighted average discount rate	8.00			%
Decline in fair value due to a 100 bps adverse change	$	(21	)
Decline in fair value due to a 200 bps adverse change	$	(43	)

The above sensitivities are hypothetical and should be used with caution. As the amounts indicate, changes in fair value based on valuation assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the retained interest is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

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Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Other Comprehensive Income (Loss)

OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) for Atlantic Capital consists of changes in net unrealized gains and losses on investment securities available-for-sale and derivatives.  The following tables present a summary of the changes in accumulated other comprehensive income (loss) balances for the applicable periods.

	For the Three Months Ended
	March 31, 2017
	Pre-Tax Amount			Income Tax (Expense) Benefit			After-Tax Amount
	(in thousands)
Accumulated other comprehensive income (loss) beginning of period	$	(9,144	)	$	3,519		$	(5,625	)
Unrealized net gains (losses) on investment securities available-for-sale	591			(227		)	364
Reclassification adjustment for net realized gains (losses) on investment securities available-for-sale	—			—			—
Unrealized net gains (losses) on derivatives	(237		)	91			(146		)
Accumulated other comprehensive income (loss) end of period	$	(8,790	)	$	3,383		$	(5,407	)

	For the Three Months Ended
	March 31, 2016
	Pre-Tax Amount			Income Tax (Expense) Benefit			After-Tax Amount
	(in thousands)
Accumulated other comprehensive income (loss) beginning of period	$	(2,455	)	$	939		$	(1,516	)
Unrealized net gains (losses) on investment securities available-for-sale	4,275			(1,640		)	2,635
Reclassification adjustment for net realized gains on investment securities available-for-sale	(33		)	13			(20		)
Unrealized net gains (losses) on derivatives	937			(364		)	573
Accumulated other comprehensive income (loss) end of period	$	2,724		$	(1,052	)	$	1,672

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Common Share

EARNINGS PER COMMON SHARE

Basic earnings per share amounts are computed by dividing net income by the weighted average number of shares of common stock outstanding.

Diluted earnings per share amounts are computed by dividing net income by the weighted average number of shares of common stock outstanding and the dilutive effects of the shares awarded under the stock option plan, based on the treasury stock method using an average fair market value of the stock during the respective periods.

The following table represents the earnings per share calculations for the three months endedMarch 31, 2017 and 2016.

	Three Months Ended
	March 31,
	2017		2016
(in thousands, except share and per share amounts)
Net income available to common shareholders	$	3,230	$	2,931
Weighted average shares outstanding
Basic (1)	25,320,690		24,485,900
Effect of dilutive securities:
Stock options and warrants	351,596		507,697
Diluted	25,672,286		24,993,597
Income per common share:
Basic	$	0.13	$	0.12
Diluted	$	0.13	$	0.12
(1) Unvested restricted shares are participating securities and included in basic share calculations.

Stock options and warrants outstanding of 747 at March 31, 2017 and 260,266 at March 31, 2016 have not been included in diluted earnings per share because to do so would have been anti-dilutive for the periods presented. These awards were considered anti-dilutive because the exercise price of the award was higher than the market value of the shares.

The Amended and Restated Articles of Incorporation of Atlantic Capital, which were approved by the Board of Directors on March 24, 2015 and by Atlantic Capital’s shareholders on May 21, 2015, authorize Atlantic Capital to issue 110,000,000 shares of capital stock, of which 10,000,000 shares are designated as preferred stock, no par value per share, and 100,000,000 shares are designated as common stock, no par value per share.

At March 31, 2017, 25,535,013 shares of common stock were issued and outstanding. At December 31, 2016, 25,093,135 shares of common stock were issued and outstanding.

The primary source of funds available to Atlantic Capital is payments of dividends from the Bank. The Bank has not paid any dividends to Atlantic Capital in 2017 or 2016. Banking laws and other regulations limit the amount of dividends a bank subsidiary may pay without prior regulatory approval. Additionally, Atlantic Capital’s ability to pay dividends to its shareholders will depend on the ability of the Bank to pay dividends to Atlantic Capital. The Bank is subject to regulatory restrictions on the payment of cash dividends, which generally may be paid only from current earnings.

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Derivatives and Hedging

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

DERIVATIVES AND HEDGING

Risk Management

Atlantic Capital’s objectives in using interest rate derivatives are to add stability to net interest revenue and to manage its exposure to interest rate movements. To accomplish this objective, Atlantic Capital primarily uses interest rate swaps as part of its interest rate risk management strategy.

Cash Flow Hedges

At March 31, 2017, Atlantic Capital’s interest rate swaps designated as cash flow hedges involve the payment of floating-rate amounts to a counterparty in exchange for receiving fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. At March 31, 2017 and December 31, 2016, Atlantic Capital had interest rate swaps designated as cash flow hedges with an aggregate notional amount of $50.0 million.

No hedge ineffectiveness gains or losses were recognized on active cash flow hedges for the three months ended March 31, 2017 or 2016. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Atlantic Capital expects that approximately $198,000 will be reclassified as an increase to loan interest income over the next twelve months related to these cash flow hedges.

Customer Swaps

Atlantic Capital also enters into derivative contracts, which consist of interest rate swaps, to facilitate the needs of clients desiring to manage interest rate risk. These swaps are not designated as accounting hedges under ASC 815, Derivatives and Hedging. In order to economically hedge the interest rate risk associated with offering this product, Atlantic Capital simultaneously enters into derivative contracts with third parties to offset the customer contracts, such that Atlantic Capital minimizes its net risk exposure resulting from such transactions. The derivative contracts are structured such that the notional amounts reduce over time to generally match the expected amortization of the underlying loans. These derivatives are not speculative and arise from a service provided to clients.

Atlantic Capital’s derivative instruments are recorded at fair value in other assets and accrued interest receivable and other liabilities and accrued interest payable in the Consolidated Balance Sheets. The changes in the fair value of the derivative instruments are recognized in other noninterest income in the Consolidated Statements of Income. At March 31, 2017 and December 31, 2016, Atlantic Capital had interest rate swaps related to this program with an aggregate notional amount of $138.9 million and $140.7 million, respectively.

Atlantic Capital acquired a loan level hedging program, which First Security utilized to accommodate clients preferring a fixed rate loan. The loan documents include an addendum with a zero premium collar. The zero premium collar is a cap and a floor at the same interest rate, resulting in a fixed rate to the borrower. To hedge this embedded option the Bank entered into a dealer facing trade exactly mirroring the terms in the loan addendum.

Counterparty Credit Risk

As a result of its derivative contracts, Atlantic Capital is exposed to credit risk. Specifically approved counterparties and exposure limits are defined. On a quarterly basis, the customer derivative contracts and related counterparties are evaluated for credit risk and an adjustment is made to the contract’s fair value. This adjustment is recognized in the Consolidated Statements of Income.

Most derivative contracts with clients are secured by collateral. Additionally, in accordance with the interest rate agreements with derivatives dealers, Atlantic Capital may be required to post margin to these counterparties. At March 31, 2017 and December 31, 2016, Atlantic Capital had minimum collateral posting thresholds with certain of its derivative counterparties and posted collateral of $7.1 million and $16.3 million, respectively, against its obligations under these agreements. Cash collateral related to derivative contracts is recorded in other assets in the Consolidated Balance Sheets.

Atlantic Capital has master netting agreements with the derivatives dealers with which it does business, but reflects gross assets and liabilities on the Consolidated Balance Sheets.

In conjunction with the FASB’s fair value measurement guidance, management made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting arrangements on a net basis.

To accommodate clients, Atlantic Capital occasionally enters into credit risk participation agreements with counterparty banks to accept a portion of the credit risk related to interest rate swaps. This allows clients to execute an interest rate swap with one bank while allowing for distribution of the credit risk among participating members. Credit risk participation agreements arise when Atlantic Capital contracts with other financial institutions, as a guarantor, to share credit risk associated with certain interest rate swaps. These agreements provide for reimbursement of losses resulting from a third party default on the underlying swap. At March 31, 2017 and December 31, 2016, Atlantic Capital had credit risk participation agreements with a notional amount of $4.2 million and $4.5 million, respectively.

The following table reflects the estimated fair value positions of derivative contracts and credit risk participation agreements as of March 31, 2017 and December 31, 2016:

Derivatives designated as hedging instruments under ASC 815
(in thousands)		March 31, 2017				December 31, 2016
Interest Rate Products	Balance Sheet Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Cash flow hedge of LIBOR based loans	Other assets	$	25,000	$	14	$	50,000	$	186
Cash flow hedge of LIBOR based loans	Other liabilities	$	25,000	$	37	$	—	$	—
Derivatives not designated as hedging instruments under ASC 815
(in thousands)		March 31, 2017				December 31, 2016
Interest Rate Products	Balance Sheet Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Customer swap positions	Other assets	$	69,427	$	1,174	$	70,352	$	1,364
Zero premium collar	Other assets	97,098		2,373		98,697		2,760
		$	166,525	$	3,547	$	169,049	$	4,124
Dealer offsets to customer swap positions	Other liabilities	$	69,427	$	1,186	$	70,352	$	1,371
Credit risk participation	Other liabilities	4,240		—		4,460		—
Dealer offset to zero premium collar	Other liabilities	97,098		2,419		98,697		2,760
		$	170,765	$	3,605	$	173,509	$	4,131

The following table reflects the impact to the Consolidated Statements of Income related to derivative contracts for the three months endedMarch 31, 2017 and 2016:

Derivatives in Cash Flow Hedging Relationships
	Three months ended March 31,
(in thousands)	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)					Gain or (Loss) Reclassified from Accumulated OCI in Income (Effective Portion)
	2017			2016		Location	2017		2016
Interest rate swaps	$	(100	)	$	573	Interest income	$	137	$	186

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Subordinated Debt

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Subordinated Debt

SUBORDINATED DEBT

On September 28, 2015, Atlantic Capital issued subordinated notes (the “Notes”) totaling $50.0 million in aggregate principal amount. The Notes are due September 30, 2025 and bear a fixed rate of interest of 6.25% per year until September 29, 2020. From September 30, 2020 to the maturity date, the interest rate will be a floating rate equal to the three-month LIBOR plus 468 basis points. The Notes were priced at 100% of their par value. The Notes qualify as Tier 2 regulatory capital.

Subordinated debt is summarized as follows.

	March 31, 2017		December 31, 2016
	(in thousands
Floating rate 10 year capital securities, with interest paid semi-annually at an annual fixed rate of 6.25% until September 30, 2020	$	50,000	$	50,000
Principal amount of subordinated debt	$	50,000	$	50,000
Less debt issuance costs		592		634
Subordinated debt, net	$	49,408	$	49,366

All subordinated debt outstanding at March 31, 2017 matures after more than five years.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

Atlantic Capital sponsors a stock incentive plan for the benefit of directors and employees. Under the 2015 Stock Incentive Plan, there were approximately 4,525,000 shares reserved for issuance to directors and employees. The Compensation Committee has the authority to grant the following: an incentive or nonqualified option; a restricted stock award (including a restricted stock award or a restricted unit award); a performance award (including a performance share award or a performance unit award); a phantom stock award; a dividend equivalent award; or any other award granted under the plan.

As of March 31, 2017, approximately 3,909,000 additional awards were available to be granted under the plan. Stock options are granted at a price which is no less than the fair market value of a share of Atlantic Capital common stock on the grant date. Stock options generally vest over three years and expire after ten years.

As of March 31, 2017 and December 31, 2016, warrants for 500 and 363,000 shares, respectively, were outstanding for the purchase of common stock at a price of $10.00 per warrant. The warrants were issued as of May 14, 2007, the date of issuance of common stock sold in the initial private placement, and are exercisable for a period of ten years following the issuance.

The Company estimates the fair value of its options and warrants awards using the Black-Scholes option pricing model. The risk-free rate for periods within the contractual life of the option and warrant is based on the U.S. Treasury yield curve in effect at the time of grant. There were no options or warrants granted during the three months endedMarch 31, 2017 and 2016.

The following table represents stock option and warrant activity for the three months endedMarch 31, 2017:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, December 31, 2016	1,485,704		$	11.69
Exercised	(633,922	)	10.53
Forfeited	(314	)	10.31
Expired	—		—
Outstanding, March 31, 2017	851,468		$	12.55	5.86	$	5,767
Exercisable, March 31, 2017	575,024		$	11.73	4.73	$	4,440

Atlantic Capital recognized compensation expense relating to stock options of $142,000 and $242,000 for the three months endedMarch 31, 2017 and 2016, respectively. Using the Black-Scholes pricing model, the amount of compensation expense was determined based on the fair value of the options at the time of grant, multiplied by the number of options granted that were expected to vest, which was then amortized over the vesting period.

The following table represents restricted stock activity for the three months endedMarch 31, 2017:

	Shares		Weighted Average Grant-Date Fair Value
Outstanding, December 31, 2016	259,165		$	13.70
Granted	—		—
Vested	(3,662	)	12.39
Forfeited	(13,172	)	14.06
Outstanding, March 31, 2017	242,331		$	13.70

Compensation expense for restricted stock is based on the fair value of restricted stock awards at the time of grant, which is equal to the value of Atlantic Capital’s common stock on the date of grant. The value of restricted stock grants that are expected to vest is amortized into expense over the vesting period. For the three months ended March 31, 2017 and 2016, compensation expense of $229,000 and $250,000, respectively, was recognized related to restricted stock awards.

As of March 31, 2017, there was $1.9 million of unrecognized compensation cost related to restricted stock awards granted under the plan. That cost is expected to be recognized over a weighted-average period of 3.10 years.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Atlantic Capital follows the guidance pursuant to ASC 820-10, Fair Value Measurements and Disclosures. This guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This issuance applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. Atlantic Capital measures its investment securities and interest rate derivative assets and liabilities at fair value on a recurring basis. Fair value is used on a nonrecurring basis either when assets are evaluated for impairment or for disclosure purposes. Atlantic Capital measures its servicing assets, goodwill, intangible assets, loans held for sale, impaired loans and other real estate owned at fair value on a nonrecurring basis if necessary.

The guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement and defines fair value as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, this guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Atlantic Capital applied the following fair value hierarchy:

Level 1 – Assets or liabilities for which the identical item is traded on an active exchange, such as publicly-traded instruments or futures contracts.

Level 2 – Assets or liabilities valued based on observable market data for similar instruments.

Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market, instruments valued based on the best available data, some of which is internally-developed, and risk premiums that a market participant would require.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement. There were no transfers between Level 1 and Level 2 or Level 2 and Level 3 during the three months ended March 31, 2017. There was one transfer between Level 2 and Level 3 and no transfers between Level 1 and Level 2 during the three months ended March 31, 2016.

Atlantic Capital records investment securities available-for-sale at fair value on a recurring basis. Investment securities classified as available-for-sale are reported at fair value utilizing Level 2 inputs. For these securities, Atlantic Capital obtains fair value measurements from an independent pricing service. In estimating the fair values for investment securities, Atlantic Capital believes that independent third-party market prices are the best evidence of an exit price. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the Treasury Department yield curve, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things.

Derivative instruments are primarily transacted as over-the-counter trades and priced with observable market assumptions. Ongoing measurements include observable market assumptions with appropriate valuation adjustments for liquidity and for credit risk of counterparties and Atlantic Capital’s own credit. For these instruments, Atlantic Capital obtains fair value measurements from an independent pricing service. The fair value measurements consider factors such as the likelihood of default by Atlantic Capital and its counterparties, total exposure and remaining maturities in determining the appropriate fair value adjustments to record. Generally, the expected loss of each client counterparty is estimated using Atlantic Capital’s internal risk rating system. For financial institution counterparties that are rated by national rating agencies, those ratings are used in determining the credit risk. This approach used to estimate exposures to counterparties is also used by Atlantic Capital to estimate its own credit risk on derivative liability positions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets that were measured at fair value on a recurring basis by level within the fair value hierarchy as reported in the Consolidated Balance Sheets at March 31, 2017 and December 31, 2016.

	Fair Value Measurements at
	March 31, 2017 Using:
	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Securities available-for-sale—
U.S. government agencies	$	—	$	35,243	$	—	$	35,243
U.S. states and political subdivisions	—		92,245		—		92,245
Trust preferred securities	—		4,525		—		4,525
Corporate debt securities	—		19,186		—		19,186
Mortgage-backed securities	—		305,743		—		305,743
Total securities available-for-sale	$	—	$	456,942	$	—	$	456,942
Interest rate derivative assets	$	—	$	3,561	$	—	$	3,561
Interest rate derivative liabilities	$	—	$	3,642	$	—	$	3,642

	Fair Value Measurements at
	December 31, 2016 Using:
	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Securities available-for-sale—
U.S. government agencies	$	—	$	21,152	$	—	$	21,152
U.S. states and political subdivisions	—		90,172		—		90,172
Trust preferred securities	—		4,525		—		4,525
Corporate debt securities	—		19,231		—		19,231
Mortgage-backed securities	—		212,625		—		212,625
Total securities available-for-sale	$	—	$	347,705	$	—	$	347,705
Interest rate derivative assets	$	—	$	4,310	$	—	$	4,310
Interest rate derivative liabilities	$	—	$	4,131	$	—	$	4,131

For the three months endedMarch 31, 2017 and 2016, there was not a change in the methods and significant assumptions used to estimate fair value.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The following table presents the assets that were measured at fair value on a nonrecurring basis by level within the fair value hierarchy as reported in the Consolidated Balance Sheets at March 31, 2017 and December 31, 2016.

March 31, 2017		Level 1 Fair Value Measurement		Level 2 Fair Value Measurement		Level 3 Fair Value Measurement		Total
	(in thousands)
Impaired Loans		$	—	$	—	$	6,998	$	6,998

December 31, 2016		Level 1 Fair Value Measurement		Level 2 Fair Value Measurement		Level 3 Fair Value Measurement		Total
	(in thousands)
Impaired Loans		$	—	$	—	$	7,248	$	7,248

Level 3 loans consist of impaired loans which have been partially charged-off or have specific valuation allowances. The fair value of Level 3 assets is estimated based on the underlying collateral value. For loans which the cash proceeds from the sale of the underlying collateral is the expected source of repayment, the fair value of these loans was derived from internal estimates of the underlying collateral incorporating market data, including third party appraisals or evaluations, when available. Appraised values may be discounted based on management’s assessment of the level of inactivity in the real estate market and other markets for the underlying collateral, changes in market conditions from the time of the valuation, and other information that in management’s judgment may affect the value. Impaired loans are evaluated on at least a quarterly basis and adjusted accordingly.

Assets and Liabilities Not Measured at Fair Value

For financial instruments that have quoted market prices, those quotes are used to determine fair value. Financial instruments that have no defined maturity, have a remaining maturity of 180 days or less, or reprice frequently to a market rate, are assumed to have a fair value that approximates the reported book value, after taking into consideration any applicable credit risk. If no market quotes are available, financial instruments are valued by discounting the expected cash flows using an estimated current market interest rate for the financial instrument. For off-balance sheet derivative instruments, fair value is estimated as the amount that Atlantic Capital would receive or pay to terminate the contracts at the reporting date, taking into account the current unrealized gains or losses on open contracts.

The short maturity of Atlantic Capital’s assets and liabilities results in having a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and due from banks, interest-bearing deposits in other banks, other short-term investments, and FHLB stock. The fair value of securities available-for-sale equals the balance sheet value. Due to the short-term settlement of accrued interest receivable and payable, the carrying amount closely approximates fair value.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect the premium or discount on any particular financial instrument that could result from the sale of Atlantic Capital’s entire holdings. Because no ready market exists for a significant portion of Atlantic Capital’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Off-balance sheet financial instruments (commitments to extend credit and standby letters of credit) are generally short-term and at variable rates. Therefore, both the carrying amount and the estimated fair value associated with these instruments are immaterial.

The following table presents the estimated fair values of Atlantic Capital’s financial instruments at March 31, 2017 and December 31, 2016.

	Fair Value Measurements at
	March 31, 2017 Using:
	Carrying Value		Quoted Prices in Active markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial assets
Cash and due from banks	$	34,626	$	34,626	$	—	$	—
Interest bearing deposits in banks	158,920		158,920		—		—
Other short-term investments	20,870		20,870		—		—
Total securities available-for-sale	456,942		—		456,942		—
FHLB stock	11,698		—		—		11,698
Federal Reserve Bank stock	9,690		—		—		9,690
Loans held for investment, net	1,881,785		—		—		2,097,961
Loans held for sale	29,241		—		29,241		—
Derivative assets	3,561		—		3,561		—
Financial liabilities
Deposits	$	2,173,544	$	—	$	2,119,445	$	—
Deposits to be assumed in branch sale	29,495		—		29,495		—
Subordinated debt	49,408		—		49,477		—
FHLB advances	217,000		—		217,000		—
Derivative financial instruments	3,642		—		3,642		—

	Fair Value Measurements at
	December 31, 2016 Using:
	Carrying Value		Quoted Prices in Active markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial assets
Cash and due from banks	$	36,790	$	36,790	$	—	$	—
Interest-bearing deposits in other banks	118,039		118,039		—		—
Other short-term investments	10,896		10,896		—		—
Total securities available-for-sale	347,705		—		347,705		—
FHLB stock	7,067		—		—		7,067
Federal Reserve Bank stock	9,690		—		—		9,690
Loans held for investment, net	1,960,735		—		—		1,939,895
Loans held for sale	35,219		—		35,219		—
Derivative assets	4,310		—		4,310		—
Financial liabilities
Deposits	$	2,205,991	$	—	$	2,144,196	$	—
Deposits to be assumed in branch sale	31,589		—		31,589		—
Subordinated debt	49,366		—		48,971		—
FHLB advances	110,000		—		109,946		—
Derivative financial instruments	4,131		—		4,131		—

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Atlantic Capital is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit, most of which are standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the Consolidated Balance Sheets. The contract amounts of these instruments reflect the extent of involvement Atlantic Capital has in particular classes of financial instruments.

Standby letters of credit are written conditional commitments issued by Atlantic Capital to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. Most letters of credit expire in less than one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

Atlantic Capital’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. Atlantic Capital uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Atlantic Capital’s maximum exposure to credit risk for unfunded loan commitments and standby letters of credit at March 31, 2017 and December 31, 2016 was as follows:

	March 31, 2017		December 31, 2016
	(in thousands)
Financial Instruments whose contract amount represents credit risk:
Commitments to extend credit	$	689,474	$	617,432
Standby letters of credit	16,171		16,625
	$	705,645	$	634,057

Atlantic Capital, in the normal course of business, is subject to various pending and threatened lawsuits in which claims for monetary damages are asserted. Although it is not possible to predict the outcome of these lawsuits, or the range of any possible loss, management, after consultation with legal counsel, does not anticipate that the ultimate aggregate liability, if any, arising from these lawsuits will have a material adverse effect on Atlantic Capital’s financial position or results of operations.

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Accounting Policies and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accounting and financial reporting policies of Atlantic Capital Bancshares, Inc. (“Atlantic Capital”) and its subsidiary conform to accounting principles generally accepted in the United States of America (“GAAP”) and general banking industry practices. The accompanying interim consolidated financial statements have not been audited. All material intercompany balances and transactions have been eliminated.

In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Atlantic Capital’s filing on Form 10-K. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods. Certain prior period amounts have been reclassified to conform to the current year presentation.

New Accounting Standards Updates and Recently Adopted Standards

In March 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-08 “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This guidance shortens the premium amortization period for certain callable debt securities by requiring amortization to the earliest call date. The standard is effective for public companies for annual and interim periods beginning after December 15, 2020. The adoption of this update is not expected to have a material impact on Atlantic Capital’s consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which intends to simplify goodwill impairment testing by eliminating the second step of the analysis under which the implied fair value of goodwill is determined as if the reporting unit were being acquired in a business combination. The update instead requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. ASU 2017-04 must be applied prospectively and is effective for the Company on January 1, 2020. Early adoption is permitted. Atlantic Capital does not expect the new guidance to have a material impact on its financial condition or results of operation.

In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments provide guidance on the following eight specific cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. The amendments are effective for public companies for fiscal years beginning after December 31, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. As this guidance only affects the classification within the statement of cash flows, this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU 2016-13 is effective for public companies for annual periods beginning after December 13, 2019, including interim periods within those fiscal years. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Atlantic Capital is in the process of evaluating the impact of the adoption of ASU 2016-13 on the Company’s consolidated financial statements and disclosures.

In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 simplify several aspects of accounting for employee share-based payments including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some areas of the simplification apply only to nonpublic entities. The new guidance will require all income tax effects of awards to be recognized as income tax expense or benefit in the income statement when the awards vest or are settled and additional paid in capital pools will be eliminated. The guidance requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. Companies will be required to account for forfeitures of share-based payments by recognizing forfeitures of awards as they occur or estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as currently required, through an accounting policy election. The guidance will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s income tax withholding obligation. The guidance requires an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on the statement of cash flows. ASU 2016-09 became effective for the Company on January 1, 2017 and did not have a material effect on its financial position or results of operations.

In February 2016, the FASB issued Accounting Standards Update 2016-2, Leases. Under the new guidance, leases classified as operating leases under previous GAAP must be recorded on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Atlantic Capital is evaluating the significance and other effects of adoption on the consolidated financial statements and related disclosures.

In January 2016, the FASB issued ASU 2016-1, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities. The guidance in this update requires that equity investments (except those accounting for under the equity method of accounting) be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The guidance also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. In addition, the guidance addresses various disclosure and presentation issues related to financial instruments. For public entities, this update is effective for fiscal years beginning after December 15, 2017 with early application permitted. The adoption of this update is not expected to have a material impact on Atlantic Capital’s consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers. This update is a joint project with the International Accounting Standards Board initiated to clarify the principles for recognizing revenue and to develop a common revenue standard that is meant to remove inconsistencies and weaknesses in revenue requirements, provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices, provide more useful information to users of financial statements and simplify the preparation of financial statements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public companies, this guidance is effective for annual and interim periods beginning after December 15, 2017. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, Atlantic Capital does not expect this ASU to have a material impact on net interest income and securities gains. Atlantic Capital is evaluating the impact to other revenue streams such as service charges and trust income.

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Balance Sheet Offsetting (Tables)

3 Months Ended

Mar. 31, 2017

Offsetting [Abstract]

Offsetting Assets

The following table presents a summary of amounts outstanding under reverse repurchase agreements, repurchase agreements, and derivative financial instruments including those entered into in connection with the same counterparty under master netting agreements as of March 31, 2017 and December 31, 2016. While these agreements are typically over-collateralized, U.S. GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related recognized asset or liability for each counterparty.

(in thousands)							Gross Amounts not Offset in the Balance Sheet
March 31, 2017	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	20,870	$	—	$	20,870	$	(20,870	)	$	—		$	—
Derivatives	3,561		—		3,561		—			—			3,561
Total	$	24,431	$	—	$	24,431	$	(20,870	)	$	—		$	3,561
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	3,642		—		3,642		(2,329		)	(1,313		)	—
Total	$	3,642	$	—	$	3,642	$	(2,329	)	$	(1,313	)	$	—
							Gross Amounts not Offset in the Balance Sheet
December 31, 2016	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	10,896	$	—	$	10,896	$	(10,896	)	$	—		$	—
Derivatives	4,310		—		4,310		—			—			4,310
Total	$	15,206	$	—	$	15,206	$	(10,896	)	$	—		$	4,310
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	4,131		—		4,131		(1,818		)	(2,313		)	—
Total	$	4,131	$	—	$	4,131	$	(1,818	)	$	(2,313	)	$	—

Offsetting Liabilities

The following table presents a summary of amounts outstanding under reverse repurchase agreements, repurchase agreements, and derivative financial instruments including those entered into in connection with the same counterparty under master netting agreements as of March 31, 2017 and December 31, 2016. While these agreements are typically over-collateralized, U.S. GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related recognized asset or liability for each counterparty.

(in thousands)							Gross Amounts not Offset in the Balance Sheet
March 31, 2017	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	20,870	$	—	$	20,870	$	(20,870	)	$	—		$	—
Derivatives	3,561		—		3,561		—			—			3,561
Total	$	24,431	$	—	$	24,431	$	(20,870	)	$	—		$	3,561
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	3,642		—		3,642		(2,329		)	(1,313		)	—
Total	$	3,642	$	—	$	3,642	$	(2,329	)	$	(1,313	)	$	—
							Gross Amounts not Offset in the Balance Sheet
December 31, 2016	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Asset Balance		Financial Instruments			Cash Collateral Received			Net Amount
Reverse repurchase agreements	$	10,896	$	—	$	10,896	$	(10,896	)	$	—		$	—
Derivatives	4,310		—		4,310		—			—			4,310
Total	$	15,206	$	—	$	15,206	$	(10,896	)	$	—		$	4,310
							Gross Amounts not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Liability Balance		Financial Instruments			Cash Collateral Pledged			Net Amount
Repurchase agreements	$	—	$	—	$	—	$	—		$	—		$	—
Derivatives	4,131		—		4,131		(1,818		)	(2,313		)	—
Total	$	4,131	$	—	$	4,131	$	(1,818	)	$	(2,313	)	$	—

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Securities (Tables)

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation

The following table presents the amortized cost, unrealized gains and losses, and fair value of securities available-for-sale at March 31, 2017 and December 31, 2016.

Available-For-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
March 31, 2017
Debt securities—
U.S. Government agencies	$	35,623	$	43	$	(423	)	$	35,243
U.S. states and political divisions	98,317		163		(6,235		)	92,245
Trust preferred securities	4,734		—		(209		)	4,525
Corporate debt securities	19,857		63		(734		)	19,186
Residential mortgage-backed securities	307,460		2,686		(4,403		)	305,743
Total	$	465,991	$	2,955	$	(12,004	)	$	456,942
December 31, 2016
Debt securities—
U.S. Government agencies	$	21,485	$	24	$	(357	)	$	21,152
U.S. states and political divisions	96,908		141		(6,877		)	90,172
Trust preferred securities	4,727		—		(202		)	4,525
Corporate debt securities	19,928		72		(769		)	19,231
Residential mortgage-backed securities	214,297		2,689		(4,361		)	212,625
Total	$	357,345	$	2,926	$	(12,566	)	$	347,705

Investments Classified by Contractual Maturity Date

The following table presents the amortized cost and fair value of debt securities by contractual maturity at March 31, 2017. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-For-Sale
	Amortized Cost		Fair Value
	(in thousands)
Within 1 year	$	4,210	$	4,220
Over 1 year through 5 years	18,313		18,013
5 years to 10 years	58,903		57,731
Over 10 years	77,105		71,235
	158,531		151,199
Residential mortgage-backed securities	307,460		305,743
Total	$	465,991	$	456,942

Continuous Unrealized Loss Position, Fair Value

The following table summarizes available-for-sale securities in an unrealized loss position as of March 31, 2017 and December 31, 2016.

	Less than 12 months					12 months or greater					Totals
Available-For-Sale	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
March 31, 2017
U.S. Government agencies	$	24,698	$	(336	)	2,738		$	(87	)	$	27,436	$	(423	)
U.S. states and political divisions	85,079		(6,213		)	1,420		(22		)	86,499		(6,235		)
Trust preferred securities	—		—			4,525		(209		)	4,525		(209		)
Corporate debt securities	2,524		(18		)	5,861		(716		)	8,385		(734		)
Residential mortgage-backed securities	185,914		(2,449		)	68,168		(1,954		)	254,082		(4,403		)
Totals	$	298,215	$	(9,016	)	$	82,712	$	(2,988	)	$	380,927	$	(12,004	)
December 31, 2016
U.S. Government agencies	$	12,250	$	(263	)	$	2,881	$	(94	)	$	15,131	$	(357	)
U.S. states and political divisions	87,511		(6,877		)	—		—			87,511		(6,877		)
Trust preferred securities	—		—			4,525		(202		)	4,525		(202		)
Corporate debt securities	7,886		(769		)	—		—			7,886		(769		)
Residential mortgage-backed securities	151,406		(3,231		)	32,550		(1,130		)	183,956		(4,361		)
Totals	$	259,053	$	(11,140	)	$	39,956	$	(1,426	)	$	299,009	$	(12,566	)

Schedule of Realized Gain (Loss)

The following table summarizes securities sales activity for the three months endedMarch 31, 2017 and 2016.

	Three Months Ended March 31,
	2017		2016
	(in thousands)
Proceeds from sales	$	—	$	4,953
Gross realized gains	—		33
Gross realized losses	—		—
Net gains on sales of securities	$	—	$	33

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Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2017

Loans and Leases Receivable Disclosure [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

The composition of the loan portfolio as of March 31, 2017 and December 31, 2016, is summarized below.

	March 31, 2017			December 31, 2016
	(in thousands)
Loans held for sale
Branch loans held for sale	$	27,944		$	30,917
Other loans held for sale	1,297			4,302
Total loans held for sale	$	29,241		$	35,219
Loans held for investment
Commercial loans:
Commercial and industrial	$	544,911		$	531,061
Commercial real estate	935,588			858,778
Construction and land	135,637			219,352
Mortgage warehouse loans	58,357			147,519
Total commercial loans	1,674,493			1,756,710
Residential:
Residential mortgages	99,665			101,921
Home equity	81,438			77,358
Total residential loans	181,103			179,279
Consumer	32,525			27,338
Other	17,611			21,565
Total loans	1,905,732			1,984,892
Less net deferred fees and other unearned income	(4,008		)	(3,562		)
Less allowance for loan losses	(19,939		)	(20,595		)
Loans held for investment, net	$	1,881,785		$	1,960,735

Schedule of Accretable Yield

The following table presents changes in the value of the accretable yield for acquired loans accounted for under ASC 310-30.

	Three Months Ended			Three Months Ended
	March 31, 2017			March 31, 2016
	(in thousands)
Balance at beginning of period	$	3,467		$	2,369
Additions due to acquisitions	—			—
Accretion	(444		)	(281		)
Reclassification of nonaccretable discount due to improvement in expected cash flows	251			—
Other changes, net	95			—
Balance at end of period	$	3,369		$	2,088

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent

The following table presents the balance and activity in the allowance for credit losses by portfolio segment for the three months endedMarch 31, 2017 and 2016.

	2017												2016
Three Months Ended March 31,	Commercial			Residential			Consumer			Total			Commercial			Residential			Consumer			Total
	(in thousands)
Allowance for loan losses:
Beginning balance	$	18,717		$	1,418		$	460		$	20,595		$	16,537		$	1,981		$	387		$	18,905
Provision for loan losses	297			34			303			634			664			(479		)	183			368
Loans charged-off	(913		)	(46		)	(332		)	(1,291		)	(1,605		)	—			(146		)	(1,751		)
Recoveries	—			—			1			1			17			—			69			86
Total ending allowance balance	$	18,101		$	1,406		$	432		$	19,939		$	15,613		$	1,502		$	493		$	17,608

Allowance for Credit Losses on Financing Receivables

The balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method is presented in the following table as of March 31, 2017 and December 31, 2016.

March 31, 2017	Commercial		Residential		Consumer		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	2,236	$	4	$	—	$	2,240
Collectively evaluated for impairment	15,792		1,334		430		17,556
PCI	73		68		2		143
Total ending allowance balance	$	18,101	$	1,406	$	432	$	19,939
Loans:
Loans individually evaluated for impairment	$	12,361	$	894	$	—	$	13,255
Loans collectively evaluated for impairment	1,654,457		176,053		50,126		1,880,636
PCI	7,675		4,156		10		11,841
Total ending loans balance	$	1,674,493	$	181,103	$	50,136	$	1,905,732
December 31, 2016	Commercial		Residential		Consumer		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	2,626	$	58	$	—	$	2,684
Collectively evaluated for impairment	16,018		1,360		459		17,837
PCI	73		—		1		74
Total ending allowance balance	$	18,717	$	1,418	$	460	$	20,595
Loans:
Loans individually evaluated for impairment	$	13,687	$	398	$	—	$	14,085
Loans collectively evaluated for impairment	1,732,324		174,338		48,892		1,955,554
PCI	10,699		4,543		11		15,253
Total ending loans balance	$	1,756,710	$	179,279	$	48,903	$	1,984,892

The following table presents the balance and activity in the allowance for credit losses by portfolio segment for the three months endedMarch 31, 2017 and 2016.

	2017												2016
Three Months Ended March 31,	Commercial			Residential			Consumer			Total			Commercial			Residential			Consumer			Total
	(in thousands)
Allowance for loan losses:
Beginning balance	$	18,717		$	1,418		$	460		$	20,595		$	16,537		$	1,981		$	387		$	18,905
Provision for loan losses	297			34			303			634			664			(479		)	183			368
Loans charged-off	(913		)	(46		)	(332		)	(1,291		)	(1,605		)	—			(146		)	(1,751		)
Recoveries	—			—			1			1			17			—			69			86
Total ending allowance balance	$	18,101		$	1,406		$	432		$	19,939		$	15,613		$	1,502		$	493		$	17,608

Impaired Financing Receivables

The following tables present information on Atlantic Capital’s impaired loans for the three months endedMarch 31, 2017 and 2016:

	For the Three Months Ended March 31,
	2017										2016
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Balance of Recorded Investment While Impaired		Interest Income Recognized During Impairment		Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Balance of Recorded Investment While Impaired		Interest Income Recognized During Impairment
	(in thousands)
Impaired loans with no related allowance recorded:
Commercial and industrial	$	1,132	$	1,069	$	—	$	1,550	$	17	$	2,779	$	2,779	$	—	$	2,743	$	36
Commercial real estate	2,388		2,226		—		2,303		—		2,209		2,068		—		2,068		14
Construction and land	—		—		—		—		—		—		—		—		—		—
Residential mortgages	244		198		—		225		—		—		—		—		—		—
Home equity	549		549		—		549		—		—		—		—		—		—
Mortgage warehouse	—		—		—		—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—		—		—		—
Total	$	4,313	$	4,042	$	—	$	4,627	$	17	$	4,988	$	4,847	$	—	$	4,811	$	50
Impaired loans with an allowance recorded:
Commercial and industrial	$	8,316	$	8,316	$	2,077	$	8,357	$	108	$	—	$	—	$	—	$	—	$	—
Commercial real estate	750		750		159		753		7		—		—		—		—		—
Construction and land	—		—		—		—		—		—		—		—		—		—
Residential mortgages	147		147		4		147		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—		—		—		—
Mortgage warehouse	—		—		—		—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—		—		—		—
Total	$	9,213	$	9,213	$	2,240	$	9,257	$	115	$	—	$	—	$	—	$	—	$	—
Total impaired loans	$	13,526	$	13,255	$	2,240	$	13,884	$	132	$	4,988	$	4,847	$	—	$	4,811	$	50

Troubled Debt Restructurings on Financing Receivables

As of March 31, 2017 and December 31, 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows.

	Pass		Special Mention		Substandard Accruing		Substandard Nonaccruing		Doubtful		Total
	(in thousands)
March 31, 2017
Commercial and industrial	$	514,887	$	6,066	$	20,455	$	25	$	—	$	541,433
Commercial real estate	919,769		7,160		2,884		2,031		—		931,844
Construction and land	130,373		4,728		63		20		—		135,184
Residential mortgages	94,589		1,505		648		485		—		97,227
Home equity	78,682		43		344		651		—		79,720
Mortgage warehouse	58,357		—		—		—		—		58,357
Consumer/Other	50,027		99		—		—		—		50,126
Total loans, excluding PCI loans	$	1,846,684	$	19,601	$	24,394	$	3,212	$	—	$	1,893,891
Commercial and industrial	$	2,313	$	315	$	218	$	—	$	632	$	3,478
Commercial real estate	3,200		216		328		—		—		3,744
Construction and land	408		8		37		—		—		453
Residential mortgages	99		1,122		1,217		—		—		2,438
Home equity	353		824		541		—		—		1,718
Mortgage warehouse	—		—		—		—		—		—
Consumer/Other	—		1		8		—		1		10
Total PCI loans	$	6,373	$	2,486	$	2,349	$	—	$	633	$	11,841

	Pass		Special Mention		Substandard Accruing		Substandard Nonaccruing		Doubtful		Total
	(in thousands)
December 31, 2016
Commercial and industrial	$	494,617	$	3,160	$	26,399	$	3	$	471	$	524,650
Commercial real estate	843,924		5,513		5,571		—		—		855,008
Construction and land	213,981		4,789		64		—		—		218,834
Residential mortgages	97,660		586		747		147		—		99,140
Home equity	75,031		168		397		—		—		75,596
Mortgage warehouse	147,519		—		—		—		—		147,519
Consumer/Other	48,680		190		22		—		—		48,892
Total loans, excluding PCI loans	$	1,921,412	$	14,406	$	33,200	$	150	$	471	$	1,969,639
Commercial and industrial	$	4,650	$	299	$	614	$	—	$	848	$	6,411
Commercial real estate	477		240		2,716		—		337		3,770
Construction and land	229		8		281		—		—		518
Residential mortgages	59		1,232		1,016		—		474		2,781
Home equity	364		834		564		—		—		1,762
Mortgage warehouse	—		—		—		—		—		—
Consumer/Other	1		—		10		—		—		11
Total PCI loans	$	5,780	$	2,613	$	5,201	$	—	$	1,659	$	15,253

Past Due Financing Receivables

The following table presents the aging of the recorded investment in past due loans as of March 31, 2017 and December 31, 2016 by class of loans.

	As of March 31, 2017
	Accruing Current		Accruing 30-89 Days Past Due		Accruing 90+ Days Past Due		Nonaccruing		PCI Loans		Total
	(in thousands)
Loans by Classification
Commercial and industrial	$	541,286	$	122	$	—	$	25	$	3,478	$	544,911
Commercial real estate	927,957		1,199		657		2,031		3,744		935,588
Construction and land	135,164		—		—		20		453		135,637
Residential mortgages	96,423		205		114		485		2,438		99,665
Home equity	78,715		354		—		651		1,718		81,438
Mortgage warehouse	58,357		—		—		—		—		58,357
Consumer	49,779		347		—		—		10		50,136
Total Loans	$	1,887,681	$	2,227	$	771	$	3,212	$	11,841	$	1,905,732

	As of December 31, 2016
	Accruing Current		Accruing 30-89 Days Past Due		Accruing 90+ Days Past Due		Nonaccruing		PCI Loans		Total
	(in thousands)
Loans by Classification
Commercial and industrial	$	520,908	$	3,079	$	189	$	474	$	6,411	$	531,061
Commercial real estate	852,626		2,382		—		—		3,770		858,778
Construction and land	218,290		544		—		—		518		219,352
Residential mortgages	97,901		664		428		147		2,781		101,921
Home equity	74,420		884		292		—		1,762		77,358
Mortgage warehouse	147,519		—		—		—		—		147,519
Consumer	48,558		249		85		—		11		48,903
Total Loans	$	1,960,222	$	7,802	$	994	$	621	$	15,253	$	1,984,892

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

The following table presents activity for goodwill and other intangible assets:

	Goodwill			Core Deposit Intangible			Total
	(in thousands)
Balance at December 31, 2015	$	23,352		$	9,018		$	32,370
Amortization	—			(762		)	(762		)
Measurement period adjustments	(906		)	—			(906		)
Balance at March 31, 2016	$	22,446		$	8,256		$	30,702
Balance at December 31, 2016	$	21,759		$	4,624		$	26,383
Amortization	—			(470		)	(470		)
Balance at March 31, 2017	$	21,759		$	4,154		$	25,913

The carrying amount of goodwill and other intangible assets as of March 31, 2017 and December 31, 2016 is summarized below:

	March 31,			December 31,
	2017			2016
	(in thousands)
Core deposit intangible	$	9,544		$	9,544
Less: accumulated amortization	(3,441		)	(2,971		)
Less: impairment related to divested branches	(1,949		)	(1,949		)
Core deposit intangible, net	4,154			4,624
Servicing assets, net	3,273			3,184
Total other intangibles, net	7,427			7,808
Goodwill	21,759			21,759
Total goodwill and other intangible assets, net	$	29,186		$	29,567

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Servicing Rights (Tables)

3 Months Ended

Mar. 31, 2017

Transfers and Servicing [Abstract]

Changes in the Balance of Servicing Assets

Changes in the balance of TriNet servicing assets for the three months endedMarch 31, 2017 and 2016 are presented in the following table.

	Three months ended March 31,
TriNet Servicing Rights	2017			2016
	(in thousands)
Beginning carrying value, net	$	825		$	1,175
Additions	—			227
Amortization	(47		)	(50		)
Impairment	—			—
Ending carrying value	$	778		$	1,352

Changes in the balance of servicing assets for the three months endedMarch 31, 2017 and 2016 are presented in the following table.

	Three months ended March 31,
SBA Loan Servicing Rights	2017			2016
	(in thousands)
Beginning carrying value, net	$	2,359		$	1,687
Additions	267			202
Amortization	(131		)	(29		)
Impairment	—			—
Ending carrying value	$	2,495		$	1,860

Schedule of Sensitivity to Immediate Changes in Key Economic Assumptions

At March 31, 2017, the sensitivity of the fair value of the SBA loan servicing rights to immediate changes in key economic assumptions are presented in the table below.

Sensitivity of the SBA Servicing Asset	March 31, 2017
	(dollars in thousands)
Fair value of retained servicing assets	$	2,694
Weighted average life	6.55 years
Prepayment speed:	7.68			%
Decline in fair value due to a 10% adverse change	$	(89	)
Decline in fair value due to a 20% adverse change	$	(155	)
Weighted average discount rate	12.23			%
Decline in fair value due to a 100 bps adverse change	$	(99	)
Decline in fair value due to a 200 bps adverse change	$	(172	)

At March 31, 2017, the sensitivity of the fair value of the TriNet servicing rights to immediate changes in key economic assumptions are presented in the table below.

Sensitivity of the TriNet Servicing Rights	March 31, 2017
	(dollars in thousands)
Fair value of retained servicing assets	$	809
Weighted average life	8.70 years
Prepayment speed:	5.00			%
Decline in fair value due to a 10% adverse change	$	(9	)
Decline in fair value due to a 20% adverse change	$	(21	)
Weighted average discount rate	8.00			%
Decline in fair value due to a 100 bps adverse change	$	(21	)
Decline in fair value due to a 200 bps adverse change	$	(43	)

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Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following tables present a summary of the changes in accumulated other comprehensive income (loss) balances for the applicable periods.

	For the Three Months Ended
	March 31, 2017
	Pre-Tax Amount			Income Tax (Expense) Benefit			After-Tax Amount
	(in thousands)
Accumulated other comprehensive income (loss) beginning of period	$	(9,144	)	$	3,519		$	(5,625	)
Unrealized net gains (losses) on investment securities available-for-sale	591			(227		)	364
Reclassification adjustment for net realized gains (losses) on investment securities available-for-sale	—			—			—
Unrealized net gains (losses) on derivatives	(237		)	91			(146		)
Accumulated other comprehensive income (loss) end of period	$	(8,790	)	$	3,383		$	(5,407	)

	For the Three Months Ended
	March 31, 2016
	Pre-Tax Amount			Income Tax (Expense) Benefit			After-Tax Amount
	(in thousands)
Accumulated other comprehensive income (loss) beginning of period	$	(2,455	)	$	939		$	(1,516	)
Unrealized net gains (losses) on investment securities available-for-sale	4,275			(1,640		)	2,635
Reclassification adjustment for net realized gains on investment securities available-for-sale	(33		)	13			(20		)
Unrealized net gains (losses) on derivatives	937			(364		)	573
Accumulated other comprehensive income (loss) end of period	$	2,724		$	(1,052	)	$	1,672

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The following table represents the earnings per share calculations for the three months endedMarch 31, 2017 and 2016.

	Three Months Ended
	March 31,
	2017		2016
(in thousands, except share and per share amounts)
Net income available to common shareholders	$	3,230	$	2,931
Weighted average shares outstanding
Basic (1)	25,320,690		24,485,900
Effect of dilutive securities:
Stock options and warrants	351,596		507,697
Diluted	25,672,286		24,993,597
Income per common share:
Basic	$	0.13	$	0.12
Diluted	$	0.13	$	0.12
(1) Unvested restricted shares are participating securities and included in basic share calculations.

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Derivatives and Hedging (Tables)

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table reflects the estimated fair value positions of derivative contracts and credit risk participation agreements as of March 31, 2017 and December 31, 2016:

Derivatives designated as hedging instruments under ASC 815
(in thousands)		March 31, 2017				December 31, 2016
Interest Rate Products	Balance Sheet Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Cash flow hedge of LIBOR based loans	Other assets	$	25,000	$	14	$	50,000	$	186
Cash flow hedge of LIBOR based loans	Other liabilities	$	25,000	$	37	$	—	$	—
Derivatives not designated as hedging instruments under ASC 815
(in thousands)		March 31, 2017				December 31, 2016
Interest Rate Products	Balance Sheet Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Customer swap positions	Other assets	$	69,427	$	1,174	$	70,352	$	1,364
Zero premium collar	Other assets	97,098		2,373		98,697		2,760
		$	166,525	$	3,547	$	169,049	$	4,124
Dealer offsets to customer swap positions	Other liabilities	$	69,427	$	1,186	$	70,352	$	1,371
Credit risk participation	Other liabilities	4,240		—		4,460		—
Dealer offset to zero premium collar	Other liabilities	97,098		2,419		98,697		2,760
		$	170,765	$	3,605	$	173,509	$	4,131

The following table reflects the impact to the Consolidated Statements of Income related to derivative contracts for the three months endedMarch 31, 2017 and 2016:

Derivatives in Cash Flow Hedging Relationships
	Three months ended March 31,
(in thousands)	Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)					Gain or (Loss) Reclassified from Accumulated OCI in Income (Effective Portion)
	2017			2016		Location	2017		2016
Interest rate swaps	$	(100	)	$	573	Interest income	$	137	$	186

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Subordinated Debt (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Subordinated debt is summarized as follows.

	March 31, 2017		December 31, 2016
	(in thousands
Floating rate 10 year capital securities, with interest paid semi-annually at an annual fixed rate of 6.25% until September 30, 2020	$	50,000	$	50,000
Principal amount of subordinated debt	$	50,000	$	50,000
Less debt issuance costs		592		634
Subordinated debt, net	$	49,408	$	49,366

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

The following table represents stock option and warrant activity for the three months endedMarch 31, 2017:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, December 31, 2016	1,485,704		$	11.69
Exercised	(633,922	)	10.53
Forfeited	(314	)	10.31
Expired	—		—
Outstanding, March 31, 2017	851,468		$	12.55	5.86	$	5,767
Exercisable, March 31, 2017	575,024		$	11.73	4.73	$	4,440

Schedule of Share-based Compensation, Restricted Stock Award Activity

The following table represents restricted stock activity for the three months endedMarch 31, 2017:

	Shares		Weighted Average Grant-Date Fair Value
Outstanding, December 31, 2016	259,165		$	13.70
Granted	—		—
Vested	(3,662	)	12.39
Forfeited	(13,172	)	14.06
Outstanding, March 31, 2017	242,331		$	13.70

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities, Measured on Recurring Basis

The following table presents the assets that were measured at fair value on a recurring basis by level within the fair value hierarchy as reported in the Consolidated Balance Sheets at March 31, 2017 and December 31, 2016.

	Fair Value Measurements at
	March 31, 2017 Using:
	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Securities available-for-sale—
U.S. government agencies	$	—	$	35,243	$	—	$	35,243
U.S. states and political subdivisions	—		92,245		—		92,245
Trust preferred securities	—		4,525		—		4,525
Corporate debt securities	—		19,186		—		19,186
Mortgage-backed securities	—		305,743		—		305,743
Total securities available-for-sale	$	—	$	456,942	$	—	$	456,942
Interest rate derivative assets	$	—	$	3,561	$	—	$	3,561
Interest rate derivative liabilities	$	—	$	3,642	$	—	$	3,642

	Fair Value Measurements at
	December 31, 2016 Using:
	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Securities available-for-sale—
U.S. government agencies	$	—	$	21,152	$	—	$	21,152
U.S. states and political subdivisions	—		90,172		—		90,172
Trust preferred securities	—		4,525		—		4,525
Corporate debt securities	—		19,231		—		19,231
Mortgage-backed securities	—		212,625		—		212,625
Total securities available-for-sale	$	—	$	347,705	$	—	$	347,705
Interest rate derivative assets	$	—	$	4,310	$	—	$	4,310
Interest rate derivative liabilities	$	—	$	4,131	$	—	$	4,131

Fair Value Measurements, Nonrecurring

The following table presents the assets that were measured at fair value on a nonrecurring basis by level within the fair value hierarchy as reported in the Consolidated Balance Sheets at March 31, 2017 and December 31, 2016.

March 31, 2017		Level 1 Fair Value Measurement		Level 2 Fair Value Measurement		Level 3 Fair Value Measurement		Total
	(in thousands)
Impaired Loans		$	—	$	—	$	6,998	$	6,998

December 31, 2016		Level 1 Fair Value Measurement		Level 2 Fair Value Measurement		Level 3 Fair Value Measurement		Total
	(in thousands)
Impaired Loans		$	—	$	—	$	7,248	$	7,248

Fair Value Measurements, Recurring and Nonrecurring

The following table presents the estimated fair values of Atlantic Capital’s financial instruments at March 31, 2017 and December 31, 2016.

	Fair Value Measurements at
	March 31, 2017 Using:
	Carrying Value		Quoted Prices in Active markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial assets
Cash and due from banks	$	34,626	$	34,626	$	—	$	—
Interest bearing deposits in banks	158,920		158,920		—		—
Other short-term investments	20,870		20,870		—		—
Total securities available-for-sale	456,942		—		456,942		—
FHLB stock	11,698		—		—		11,698
Federal Reserve Bank stock	9,690		—		—		9,690
Loans held for investment, net	1,881,785		—		—		2,097,961
Loans held for sale	29,241		—		29,241		—
Derivative assets	3,561		—		3,561		—
Financial liabilities
Deposits	$	2,173,544	$	—	$	2,119,445	$	—
Deposits to be assumed in branch sale	29,495		—		29,495		—
Subordinated debt	49,408		—		49,477		—
FHLB advances	217,000		—		217,000		—
Derivative financial instruments	3,642		—		3,642		—

	Fair Value Measurements at
	December 31, 2016 Using:
	Carrying Value		Quoted Prices in Active markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial assets
Cash and due from banks	$	36,790	$	36,790	$	—	$	—
Interest-bearing deposits in other banks	118,039		118,039		—		—
Other short-term investments	10,896		10,896		—		—
Total securities available-for-sale	347,705		—		347,705		—
FHLB stock	7,067		—		—		7,067
Federal Reserve Bank stock	9,690		—		—		9,690
Loans held for investment, net	1,960,735		—		—		1,939,895
Loans held for sale	35,219		—		35,219		—
Derivative assets	4,310		—		4,310		—
Financial liabilities
Deposits	$	2,205,991	$	—	$	2,144,196	$	—
Deposits to be assumed in branch sale	31,589		—		31,589		—
Subordinated debt	49,366		—		48,971		—
FHLB advances	110,000		—		109,946		—
Derivative financial instruments	4,131		—		4,131		—

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Exposure to Credit Risk By Commitment

Atlantic Capital’s maximum exposure to credit risk for unfunded loan commitments and standby letters of credit at March 31, 2017 and December 31, 2016 was as follows:

	March 31, 2017		December 31, 2016
	(in thousands)
Financial Instruments whose contract amount represents credit risk:
Commitments to extend credit	$	689,474	$	617,432
Standby letters of credit	16,171		16,625
	$	705,645	$	634,057

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Acquisitions and Divestitures (Details) $ in Thousands			3 Months Ended
	Dec. 09, 2016 USD ($) branch	Dec. 17, 2015 branch agreement	Mar. 31, 2017 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Oct. 31, 2015 USD ($) branch
Business Acquisition [Line Items]
Number of agreements to sell branch assets | agreement		2
Number of branches held for sale | branch		7
Gain on disposition of business				$ 3,900
Decrease in deposits	$ (29,000)		$ (34,541)	(191,000)	$ 20,244
Decrease in loans				(34,700)
Decrease in other assets				(8,600)
Write-off for intangibles				2,000
Decrease in deposit premium				344
Dispositions expense				$ 305
Change in finance receivables and other noncurrent assets	$ (31,000)
Cleveland, Tennessee
Business Acquisition [Line Items]
Number of branches held for sale | branch	1
First Freedom
Business Acquisition [Line Items]
Number of branches held for sale | branch		3
Sale premium for branches held for sale, rate		2.25%
Athens Federal
Business Acquisition [Line Items]
Number of branches held for sale | branch		4
Sale premium for branches held for sale, rate		3.50%
First Security Group, Inc
Business Acquisition [Line Items]
Business combination, loans acquired						$ 801,100
Business combinations, deposits assumed						$ 970,000
Merger-related costs			$ 0		$ 749
First Security Group, Inc | Georgia and Tennessee
Business Acquisition [Line Items]
Number of branches | branch						25

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Balance Sheet Offsetting (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Offsetting Securities Purchased under Agreements to Resell [Abstract]
Reverse repurchase agreements, gross amounts of recognized assets	$ 20,870	$ 10,896
Reverse repurchase agreements, gross amounts offset on the Balance Sheet	0	0
Reversed repurchase agreements, net asset balance	20,870	10,896
Reverse repurchase agreements, financial instruments	(20,870)	(10,896)
Reverse repurchase agreements, cash collateral received	0	0
Reverse repurchase agreements, net amount	0	0
Offsetting Derivative Assets [Abstract]
Derivative, gross amounts of recognized assets	3,561	4,310
Derivatives, gross amounts offset on the Balance Sheet	0	0
Derivative, net asset balance	3,561	4,310
Derivatives, financial instruments	0	0
Derivatives, cash collateral received	0	0
Derivatives, net amount	3,561	4,310
Offsetting Derivative Asset, Securities Purchased under Agreements to Resell, Securities Borrowed [Abstract]
Total, Gross Amounts of Recognized Assets	24,431	15,206
Total, Gross Amounts Offset on the Balance Sheet	0	0
Total, Net Liability Balance	24,431	15,206
Total, Financial Instruments	(20,870)	(10,896)
Total, Cash Collateral Received	0	0
Total, Net Amount	3,561	4,310
Offsetting Securities Sold under Agreements to Repurchase [Abstract]
Repurchase agreements, gross amounts of recognized liability	0	0
Repurchase agreements, gross amounts offset on the Balance Sheet	0	0
Repurchase agreements, net liability balance	0	0
Repurchase agreements, financial instruments	0	0
Repurchase agreements, cash collateral pledged	0	0
Repurchase agreements, net amount	0	0
Offsetting Derivative Liabilities [Abstract]
Derivative, gross amounts of recognized liability	3,642	4,131
Derivatives, gross amounts offset on the Balance Sheet	0	0
Derivative, net liability balance	3,642	4,131
Derivatives, financial instruments	(2,329)	(1,818)
Derivatives, cash collateral pledged	(1,313)	(2,313)
Derivatives, net amount	0	0
Offsetting Derivative Liability, Securities Sold under Agreements to Repurchase, Securities Loaned [Abstract]
Total, Gross Amounts of Recognized Liabilities	3,642	4,131
Total, Gross Amounts Offset on the Balance Sheet	0	0
Total, net liability balance	3,642	4,131
Total, Financial Instruments	(2,329)	(1,818)
Total, Cash Collateral Pledged	(1,313)	(2,313)
Total, Net Amount	$ 0	$ 0

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Securities (Narrative) (Details)	3 Months Ended
	Mar. 31, 2017 USD ($) security	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)
Investments, Debt and Equity Securities [Abstract]
Available-for-sale securities in unrealized loss positions (security) | security	289
Impairment charges	$ 0	$ 0
Investment securities pledged to secure borrowings	$ 101,200,000		$ 104,900,000

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Securities (Securities Available-For-Sale) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 465,991	$ 357,345
Gross Unrealized Gains	2,955	2,926
Gross Unrealized Losses	(12,004)	(12,566)
Fair Value	456,942	347,705
U.S. Government agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	35,623	21,485
Gross Unrealized Gains	43	24
Gross Unrealized Losses	(423)	(357)
Fair Value	35,243	21,152
U.S. states and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	98,317	96,908
Gross Unrealized Gains	163	141
Gross Unrealized Losses	(6,235)	(6,877)
Fair Value	92,245	90,172
Trust preferred securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	4,734	4,727
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(209)	(202)
Fair Value	4,525	4,525
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	19,857	19,928
Gross Unrealized Gains	63	72
Gross Unrealized Losses	(734)	(769)
Fair Value	19,186	19,231
Residential mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	307,460	214,297
Gross Unrealized Gains	2,686	2,689
Gross Unrealized Losses	(4,403)	(4,361)
Fair Value	$ 305,743	$ 212,625

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Securities (Maturities) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Amortized Cost
Within 1 year	$ 4,210
Over 1 year through 5 years	18,313
5 years to 10 years	58,903
Over 10 years	77,105
Total with Single Maturity Date	158,531
Residential mortgage-backed securities	307,460
Total	465,991
Fair Value
Within 1 year	4,220
Over 1 year through 5 years	18,013
5 years to 10 years	57,731
Over 10 years	71,235
Total with Single Maturity Date	151,199
Residential mortgage-backed securities	305,743
Total	$ 456,942	$ 347,705

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Securities (Unrealized Losses - Available-For-Sale) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	$ 298,215	$ 259,053
12 months or greater, fair value	82,712	39,956
Total fair value	380,927	299,009
Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months, unrealized losses	(9,016)	(11,140)
12 months or greater, unrealized losses	(2,988)	(1,426)
Total unrealized losses	(12,004)	(12,566)
U.S. Government agencies
Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	24,698	12,250
12 months or greater, fair value	2,738	2,881
Total fair value	27,436	15,131
Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months, unrealized losses	(336)	(263)
12 months or greater, unrealized losses	(87)	(94)
Total unrealized losses	(423)	(357)
U.S. states and political divisions
Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	85,079	87,511
12 months or greater, fair value	1,420	0
Total fair value	86,499	87,511
Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months, unrealized losses	(6,213)	(6,877)
12 months or greater, unrealized losses	(22)	0
Total unrealized losses	(6,235)	(6,877)
Trust preferred securities
Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	0	0
12 months or greater, fair value	4,525	4,525
Total fair value	4,525	4,525
Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months, unrealized losses	0	0
12 months or greater, unrealized losses	(209)	(202)
Total unrealized losses	(209)	(202)
Corporate debt securities
Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	2,524	7,886
12 months or greater, fair value	5,861	0
Total fair value	8,385	7,886
Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months, unrealized losses	(18)	(769)
12 months or greater, unrealized losses	(716)	0
Total unrealized losses	(734)	(769)
Residential mortgage-backed securities
Continuous Unrealized Loss Position, Fair Value [Abstract]
Less than 12 months, fair value	185,914	151,406
12 months or greater, fair value	68,168	32,550
Total fair value	254,082	183,956
Continuous Unrealized Loss Position, Unrealized Losses [Abstract]
Less than 12 months, unrealized losses	(2,449)	(3,231)
12 months or greater, unrealized losses	(1,954)	(1,130)
Total unrealized losses	$ (4,403)	$ (4,361)

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Securities (Sales) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 0	$ 4,953
Gross realized gains	0	33
Gross realized losses	0	0
Net gains on sales of securities	$ 0	$ 33

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Loans and Allowance for Loan Losses (Summary of Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Branch loans held for sale	$ 27,944	$ 30,917
Other loans held for sale	1,297	4,302
Total loans held for sale	29,241	35,219
Loans	1,905,732	1,984,892
Less net deferred fees and other unearned income	(4,008)	(3,562)
Less allowance for loan losses	(19,939)	(20,595)	$ (17,608)	$ (18,905)
Loans held for investment, net	1,881,785	1,960,735
Residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	99,665	101,921
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	81,438	77,358
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	17,611	21,565
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,674,493	1,756,710
Less allowance for loan losses	(18,101)	(18,717)	(15,613)	(16,537)
Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	544,911	531,061
Commercial | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	935,588	858,778
Commercial | Construction and land
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	135,637	219,352
Commercial | Mortgage warehouse loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	58,357	147,519
Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	181,103	179,279
Less allowance for loan losses	(1,406)	(1,418)	(1,502)	(1,981)
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	32,525	27,338
Less allowance for loan losses	$ (432)	$ (460)	$ (493)	$ (387)

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Loans and Allowance for Loan Losses (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans pledged as collateral	$ 498,300	$ 474,800
Carrying value of loans	1,905,732	1,984,892
Accretable yield	3,600
Troubled debt restructurings	5,500	6,600
PCI Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying value of loans	11,841	15,253
Loans receivable	15,000	18,700
Commercial real estate | PCI Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying value of loans	3,744	3,770
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying value of loans	1,674,493	1,756,710
Commercial | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying value of loans	935,588	858,778
Additional loan amounts	$ 781	$ 387

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Loans and Allowance for Loan Losses (Accretable Yield Movement) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	$ 3,467	$ 2,369
Additions due to acquisitions	0	0
Accretion	(444)	(281)
Reclassification of nonaccretable discount due to improvement in expected cash flows	251	0
Other changes, net	95	0
Balance at end of period	$ 3,369	$ 2,088

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Loans and Allowance for Loan Losses (Allowance Rollforward) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 20,595	$ 18,905
Provision for loan losses	634	368
Loans charged-off	(1,291)	(1,751)
Recoveries	1	86
Total ending allowance balance	19,939	17,608
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	18,717	16,537
Provision for loan losses	297	664
Loans charged-off	(913)	(1,605)
Recoveries	0	17
Total ending allowance balance	18,101	15,613
Residential
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,418	1,981
Provision for loan losses	34	(479)
Loans charged-off	(46)	0
Recoveries	0	0
Total ending allowance balance	1,406	1,502
Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	460	387
Provision for loan losses	303	183
Loans charged-off	(332)	(146)
Recoveries	1	69
Total ending allowance balance	$ 432	$ 493

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Loans and Allowance for Loan Losses (Allowance Additional Information) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Associated Allowance, Individually evaluated	$ 2,240	$ 2,684
Associated Allowance, Collectively evaluated	17,556	17,837
Associated Allowance, PCI	143	74
Associated Allowance, Total evaluated	19,939	20,595
Carrying Value, Individually evaluated	13,255	14,085
Carrying Value, Collectively evaluated	1,880,636	1,955,554
Carrying Value, PCI	11,841	15,253
Loans	1,905,732	1,984,892
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Associated Allowance, Individually evaluated	2,236	2,626
Associated Allowance, Collectively evaluated	15,792	16,018
Associated Allowance, PCI	73	73
Associated Allowance, Total evaluated	18,101	18,717
Carrying Value, Individually evaluated	12,361	13,687
Carrying Value, Collectively evaluated	1,654,457	1,732,324
Carrying Value, PCI	7,675	10,699
Loans	1,674,493	1,756,710
Residential
Financing Receivable, Allowance for Credit Losses [Line Items]
Associated Allowance, Individually evaluated	4	58
Associated Allowance, Collectively evaluated	1,334	1,360
Associated Allowance, PCI	68	0
Associated Allowance, Total evaluated	1,406	1,418
Carrying Value, Individually evaluated	894	398
Carrying Value, Collectively evaluated	176,053	174,338
Carrying Value, PCI	4,156	4,543
Loans	181,103	179,279
Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Associated Allowance, Individually evaluated	0	0
Associated Allowance, Collectively evaluated	430	459
Associated Allowance, PCI	2	1
Associated Allowance, Total evaluated	432	460
Carrying Value, Individually evaluated	0	0
Carrying Value, Collectively evaluated	50,126	48,892
Carrying Value, PCI	10	11
Loans	$ 50,136	$ 48,903

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Loans and Allowance for Loan Losses (Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	$ 4,313	$ 4,988
Impaired loans with an allowance recorded, Unpaid Principal Balance	9,213	0
Impaired loans, Unpaid Principal Balance	13,526	4,988
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	4,042	4,847
Impaired loans with an allowance recorded, Recorded Investment	9,213	0
Impaired loans, Recorded Investment	13,255	4,847
Impaired loans, Related Allowance	2,240	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	4,627	4,811
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	9,257	0
Impaired loans, Average Balance of Recorded Investment	13,884	4,811
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	17	50
Impaired loans with an allowance recorded, Interest Income Recognized	115	0
Impaired loans, Income Recognized	132	50
Commercial | Commercial and industrial
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	1,132	2,779
Impaired loans with an allowance recorded, Unpaid Principal Balance	8,316	0
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	1,069	2,779
Impaired loans with an allowance recorded, Recorded Investment	8,316	0
Impaired loans, Related Allowance	2,077	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	1,550	2,743
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	8,357	0
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	17	36
Impaired loans with an allowance recorded, Interest Income Recognized	108	0
Commercial | Commercial real estate
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	2,388	2,209
Impaired loans with an allowance recorded, Unpaid Principal Balance	750	0
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	2,226	2,068
Impaired loans with an allowance recorded, Recorded Investment	750	0
Impaired loans, Related Allowance	159	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	2,303	2,068
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	753	0
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	0	14
Impaired loans with an allowance recorded, Interest Income Recognized	7	0
Commercial | Construction and land
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	0	0
Impaired loans with an allowance recorded, Unpaid Principal Balance	0	0
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	0	0
Impaired loans with an allowance recorded, Recorded Investment	0	0
Impaired loans, Related Allowance	0	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	0	0
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	0	0
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	0	0
Impaired loans with an allowance recorded, Interest Income Recognized	0	0
Commercial | Mortgage warehouse loans
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	0	0
Impaired loans with an allowance recorded, Unpaid Principal Balance	0	0
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	0	0
Impaired loans with an allowance recorded, Recorded Investment	0	0
Impaired loans, Related Allowance	0	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	0	0
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	0	0
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	0	0
Impaired loans with an allowance recorded, Interest Income Recognized	0	0
Residential | Residential mortgages
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	244	0
Impaired loans with an allowance recorded, Unpaid Principal Balance	147	0
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	198	0
Impaired loans with an allowance recorded, Recorded Investment	147	0
Impaired loans, Related Allowance	4	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	225	0
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	147	0
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	0	0
Impaired loans with an allowance recorded, Interest Income Recognized	0	0
Residential | Home equity
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	549	0
Impaired loans with an allowance recorded, Unpaid Principal Balance	0	0
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	549	0
Impaired loans with an allowance recorded, Recorded Investment	0	0
Impaired loans, Related Allowance	0	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	549	0
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	0	0
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	0	0
Impaired loans with an allowance recorded, Interest Income Recognized	0	0
Consumer
Impaired Financing Receivable, Unpaid Principal Balance [Abstract]
Impaired loans with no related allowance recorded, Unpaid Principal Balance	0	0
Impaired loans with an allowance recorded, Unpaid Principal Balance	0	0
Impaired Financing Receivable, Recorded Investment [Abstract]
Impaired loans with no related allowance, Recorded Investment	0	0
Impaired loans with an allowance recorded, Recorded Investment	0	0
Impaired loans, Related Allowance	0	0
Impaired Financing Receivable, Average Recorded Investment [Abstract]
Impaired loans with no related allowance recorded, Average Balance of Recorded Investment	0	0
Impaired loans with an allowance recorded, Average Balance of Recorded Investment	0	0
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract]
Impaired loans with no related allowance recorded, Interest Income Recognized	0	0
Impaired loans with an allowance recorded, Interest Income Recognized	$ 0	$ 0

XML

Loans and Allowance for Loan Losses (Risk Category of Loan by Class of Loan) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	$ 1,905,732	$ 1,984,892
Non-PCI Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1,893,891	1,969,639
Non-PCI Loans | Pass
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1,846,684	1,921,412
Non-PCI Loans | Special Mention
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	19,601	14,406
Non-PCI Loans | Substandard | Accruing Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	24,394	33,200
Non-PCI Loans | Substandard | Nonaccruing Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	3,212	150
Non-PCI Loans | Doubtful | Nonaccruing Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	471
PCI Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	11,841	15,253
PCI Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	3,478	6,411
PCI Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	3,744	3,770
PCI Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	453	518
PCI Loans | Pass
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	6,373	5,780
PCI Loans | Pass | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	2,313	4,650
PCI Loans | Pass | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	3,200	477
PCI Loans | Pass | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	408	229
PCI Loans | Special Mention
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	2,486	2,613
PCI Loans | Special Mention | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	315	299
PCI Loans | Special Mention | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	216	240
PCI Loans | Special Mention | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	8	8
PCI Loans | Substandard | Accruing Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	2,349	5,201
PCI Loans | Substandard | Accruing Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	218	614
PCI Loans | Substandard | Accruing Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	328	2,716
PCI Loans | Substandard | Accruing Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	37	281
PCI Loans | Substandard | Nonaccruing Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
PCI Loans | Substandard | Nonaccruing Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
PCI Loans | Substandard | Nonaccruing Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
PCI Loans | Substandard | Nonaccruing Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
PCI Loans | Doubtful | Nonaccruing Loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	633	1,659
PCI Loans | Doubtful | Nonaccruing Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	632	848
PCI Loans | Doubtful | Nonaccruing Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	337
PCI Loans | Doubtful | Nonaccruing Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1,674,493	1,756,710
Commercial | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	544,911	531,061
Commercial | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	935,588	858,778
Commercial | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	135,637	219,352
Commercial | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	58,357	147,519
Commercial | Non-PCI Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	541,433	524,650
Commercial | Non-PCI Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	931,844	855,008
Commercial | Non-PCI Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	135,184	218,834
Commercial | Non-PCI Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	58,357	147,519
Commercial | Non-PCI Loans | Pass | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	514,887	494,617
Commercial | Non-PCI Loans | Pass | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	919,769	843,924
Commercial | Non-PCI Loans | Pass | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	130,373	213,981
Commercial | Non-PCI Loans | Pass | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	58,357	147,519
Commercial | Non-PCI Loans | Special Mention | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	6,066	3,160
Commercial | Non-PCI Loans | Special Mention | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	7,160	5,513
Commercial | Non-PCI Loans | Special Mention | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	4,728	4,789
Commercial | Non-PCI Loans | Special Mention | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | Non-PCI Loans | Substandard | Accruing Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	20,455	26,399
Commercial | Non-PCI Loans | Substandard | Accruing Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	2,884	5,571
Commercial | Non-PCI Loans | Substandard | Accruing Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	63	64
Commercial | Non-PCI Loans | Substandard | Accruing Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | Non-PCI Loans | Substandard | Nonaccruing Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	25	3
Commercial | Non-PCI Loans | Substandard | Nonaccruing Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	2,031	0
Commercial | Non-PCI Loans | Substandard | Nonaccruing Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	20	0
Commercial | Non-PCI Loans | Substandard | Nonaccruing Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | Non-PCI Loans | Doubtful | Nonaccruing Loans | Commercial and industrial
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	471
Commercial | Non-PCI Loans | Doubtful | Nonaccruing Loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | Non-PCI Loans | Doubtful | Nonaccruing Loans | Construction and land
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | Non-PCI Loans | Doubtful | Nonaccruing Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | PCI Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | PCI Loans | Pass | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | PCI Loans | Special Mention | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | PCI Loans | Substandard | Accruing Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | PCI Loans | Substandard | Nonaccruing Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Commercial | PCI Loans | Doubtful | Nonaccruing Loans | Mortgage warehouse loans
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Residential
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	181,103	179,279
Residential | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	99,665	101,921
Residential | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	81,438	77,358
Residential | Non-PCI Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	97,227	99,140
Residential | Non-PCI Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	79,720	75,596
Residential | Non-PCI Loans | Pass | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	94,589	97,660
Residential | Non-PCI Loans | Pass | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	78,682	75,031
Residential | Non-PCI Loans | Special Mention | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1,505	586
Residential | Non-PCI Loans | Special Mention | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	43	168
Residential | Non-PCI Loans | Substandard | Accruing Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	648	747
Residential | Non-PCI Loans | Substandard | Accruing Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	344	397
Residential | Non-PCI Loans | Substandard | Nonaccruing Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	485	147
Residential | Non-PCI Loans | Substandard | Nonaccruing Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	651	0
Residential | Non-PCI Loans | Doubtful | Nonaccruing Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Residential | Non-PCI Loans | Doubtful | Nonaccruing Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Residential | PCI Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	2,438	2,781
Residential | PCI Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1,718	1,762
Residential | PCI Loans | Pass | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	99	59
Residential | PCI Loans | Pass | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	353	364
Residential | PCI Loans | Special Mention | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1,122	1,232
Residential | PCI Loans | Special Mention | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	824	834
Residential | PCI Loans | Substandard | Accruing Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1,217	1,016
Residential | PCI Loans | Substandard | Accruing Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	541	564
Residential | PCI Loans | Substandard | Nonaccruing Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Residential | PCI Loans | Substandard | Nonaccruing Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Residential | PCI Loans | Doubtful | Nonaccruing Loans | Residential mortgages
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	474
Residential | PCI Loans | Doubtful | Nonaccruing Loans | Home equity
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Consumer
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	50,136	48,903
Consumer | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	50,136	48,903
Consumer | Non-PCI Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	50,126	48,892
Consumer | Non-PCI Loans | Pass | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	50,027	48,680
Consumer | Non-PCI Loans | Special Mention | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	99	190
Consumer | Non-PCI Loans | Substandard | Accruing Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	22
Consumer | Non-PCI Loans | Substandard | Nonaccruing Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Consumer | Non-PCI Loans | Doubtful | Nonaccruing Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Consumer | PCI Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	10	11
Consumer | PCI Loans | Pass | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	1
Consumer | PCI Loans | Special Mention | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	1	0
Consumer | PCI Loans | Substandard | Accruing Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	8	10
Consumer | PCI Loans | Substandard | Nonaccruing Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	0	0
Consumer | PCI Loans | Doubtful | Nonaccruing Loans | Other
Financing Receivable, Impaired [Line Items]
Financing receivable, gross	$ 1	$ 0

XML

Loans and Allowance for Loan Losses (Financing Receivables Past Due) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 1,887,681	$ 1,960,222
Nonaccruing	3,212	621
Loans	1,905,732	1,984,892
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	1,674,493	1,756,710
Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	541,286	520,908
Nonaccruing	25	474
Loans	544,911	531,061
Commercial | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	927,957	852,626
Nonaccruing	2,031	0
Loans	935,588	858,778
Commercial | Construction and land
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	135,164	218,290
Nonaccruing	20	0
Loans	135,637	219,352
Commercial | Mortgage warehouse loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	58,357	147,519
Nonaccruing	0	0
Loans	58,357	147,519
Residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	181,103	179,279
Residential | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	96,423	97,901
Nonaccruing	485	147
Loans	99,665	101,921
Residential | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	78,715	74,420
Nonaccruing	651	0
Loans	81,438	77,358
Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	50,136	48,903
Consumer | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	49,779	48,558
Nonaccruing	0	0
Loans	50,136	48,903
Accruing 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,227	7,802
Accruing 30-89 Days Past Due | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	122	3,079
Accruing 30-89 Days Past Due | Commercial | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,199	2,382
Accruing 30-89 Days Past Due | Commercial | Construction and land
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	544
Accruing 30-89 Days Past Due | Commercial | Mortgage warehouse loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Accruing 30-89 Days Past Due | Residential | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	205	664
Accruing 30-89 Days Past Due | Residential | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	354	884
Accruing 30-89 Days Past Due | Consumer | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	347	249
Accruing 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	771	994
Accruing 90 Days Past Due | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	189
Accruing 90 Days Past Due | Commercial | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	657	0
Accruing 90 Days Past Due | Commercial | Construction and land
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Accruing 90 Days Past Due | Commercial | Mortgage warehouse loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Accruing 90 Days Past Due | Residential | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	114	428
Accruing 90 Days Past Due | Residential | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	292
Accruing 90 Days Past Due | Consumer | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	85
PCI Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	11,841	15,253
Loans	11,841	15,253
PCI Loans | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	3,478	6,411
PCI Loans | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	3,744	3,770
PCI Loans | Construction and land
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	453	518
PCI Loans | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,478	6,411
PCI Loans | Commercial | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,744	3,770
PCI Loans | Commercial | Construction and land
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	453	518
PCI Loans | Commercial | Mortgage warehouse loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	0	0
Loans	0	0
PCI Loans | Residential | Residential mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,438	2,781
Loans	2,438	2,781
PCI Loans | Residential | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,718	1,762
Loans	1,718	1,762
PCI Loans | Consumer | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	10	11
Loans	$ 10	$ 11

XML

Goodwill and Intangible Assets (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Total other intangibles, net	$ 7,427,000		$ 7,808,000
Goodwill	21,759,000	$ 22,446,000	21,759,000	$ 23,352,000
Total goodwill and other intangible assets, net	29,186,000		29,567,000
Goodwill purchase accounting adjustments	0	(906,000)
Goodwill impairment		0	0
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Core deposit intangible	9,544,000		9,544,000
Less: accumulated amortization	(3,441,000)		(2,971,000)
Less: impairment related to divested branches	(1,949,000)		(1,949,000)
Core deposit intangible, net	4,154,000	$ 8,256,000	4,624,000	$ 9,018,000
Servicing assets, net	9,544,000		9,544,000
Servicing Assets
Finite-Lived Intangible Assets [Line Items]
Core deposit intangible	3,273,000		3,184,000
Servicing assets, net	$ 3,273,000		$ 3,184,000

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Goodwill and Intangible Assets (Goodwill and Other Intangible Assets Activity) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Goodwill [Roll Forward]
Goodwill balance beginning of period	$ 21,759,000	$ 23,352,000
Measurement period, goodwill adjustments	0	(906,000)
Goodwill balance end of period	21,759,000	22,446,000
Finite-lived Intangible Assets [Roll Forward]
Core deposit intangibles amortization	(470,000)	(762,000)
Intangible Assets, Net (Including Goodwill) [Abstract]
Intangible assets, net (including goodwill) end of period	25,913,000	30,702,000
Core deposit intangibles amortization	(470,000)	(762,000)
Measurement period, goodwill adjustments	0	(906,000)
Intangible assets, net (including goodwill) beginning of period	26,383,000	32,370,000
Core Deposits
Finite-lived Intangible Assets [Roll Forward]
Core deposit intangibles beginning of period	4,624,000	9,018,000
Core deposit intangibles amortization	(470,000)	(762,000)
Core deposit intangibles end of period	4,154,000	8,256,000
Intangible Assets, Net (Including Goodwill) [Abstract]
Core deposit intangibles amortization	$ (470,000)	$ (762,000)

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Servicing Rights (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Transfers and Servicing [Abstract]
Loans sold and serviced	$ 117.8	$ 107.0

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Servicing Rights (SBA) (Details) - SBA Loan Servicing Rights - Commercial Loan - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
SBA Loan Servicing Rights
Beginning carrying value, net	$ 2,359	$ 1,687
Additions	267	202
Amortization	(131)	(29)
Impairment	0	0
Ending carrying value	$ 2,495	$ 1,860

XML

Servicing Rights (Sensitivity of the Fair Value to Immediate Changes in Key Economic Assumptions) (Details) - Commercial $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)
SBA Loan Servicing Rights
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value of retained servicing assets	$ 2,694
Weighted average life	6 years 6 months 17 days
Prepayment speed:	7.68%
Decline in fair value due to a 10% adverse change	$ (89)
Decline in fair value due to a 20% adverse change	$ (155)
Weighted average discount rate	12.23%
Decline in fair value due to a 100 bps adverse change	$ (99)
Decline in fair value due to a 200 bps adverse change	(172)
TriNet Servicing Rights
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair value of retained servicing assets	$ 809
Weighted average life	8 years 8 months 11 days
Prepayment speed:	5.00%
Decline in fair value due to a 10% adverse change	$ (9)
Decline in fair value due to a 20% adverse change	$ (21)
Weighted average discount rate	8.00%
Decline in fair value due to a 100 bps adverse change	$ (21)
Decline in fair value due to a 200 bps adverse change	$ (43)

XML

Servicing Rights (TriNet) (Details) - TriNet Servicing Rights - Commercial Loan - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Servicing Rights
Beginning carrying value, net	$ 825	$ 1,175
Additions	0	227
Amortization	(47)	(50)
Impairment	0	0
Ending carrying value	$ 778	$ 1,352

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Other Comprehensive Income (Loss) (Summary of Changes) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
After-Tax Amount
Beginning balance, accumulated other comprehensive income (loss)	$ 303,658	$ 287,992
Other comprehensive income, net of tax	218	3,188
Ending balance, accumulated other comprehensive income (loss) end of period	310,967	296,015
Reclassification adjustment for net realized gains (losses) on investment securities available-for-sale
Pre-Tax Amount
Unrealized net gains (losses) on investment securities available-for-sale	591	4,275
Reclassification adjustment for net realized gains (losses) on investment securities available-for-sale	0	(33)
Income Tax (Expense) Benefit
Unrealized net gains (losses) on investment securities available-for-sale	(227)	(1,640)
Reclassification adjustment for net realized gains (losses) on investment securities available-for-sale	0	13
After-Tax Amount
Unrealized net gains (losses) on investment securities available-for-sale	364	2,635
Reclassification adjustment for net realized gains on investment securities available-for-sale	0	(20)
Unrealized net gains (losses) on derivatives
Pre-Tax Amount
Unrealized net gains (losses) on derivatives	(237)	937
Income Tax (Expense) Benefit
Unrealized net gains (losses) on derivatives	91	(364)
After-Tax Amount
Other comprehensive income, net of tax	(146)	573
Accumulated Other Comprehensive Income (Loss)
Pre-Tax Amount
Accumulated other comprehensive income (loss) beginning of period	(9,144)	(2,455)
Accumulated other comprehensive income (loss) end of period	(8,790)	2,724
Income Tax (Expense) Benefit
Accumulated other comprehensive income (loss) beginning of period	3,519	939
Accumulated other comprehensive income (loss) end of period	3,383	(1,052)
After-Tax Amount
Beginning balance, accumulated other comprehensive income (loss)	(5,625)	(1,516)
Ending balance, accumulated other comprehensive income (loss) end of period	$ (5,407)	$ 1,672

XML

Earnings Per Common Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net income available to common shareholders	$ 3,230	$ 2,931
Weighted average shares outstanding
Basic (in shares)	25,320,690	24,485,900
Effect of dilutive securities:
Stock options and warrants (in shares)	351,596	507,697
Diluted (in shares)	25,672,286	24,993,597
Income per common share:
Basic (in dollars per share)	$ 0.13	$ 0.12
Diluted (in dollars per share)	$ 0.13	$ 0.12

XML

Earnings Per Common Share (Narrative) (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Mar. 24, 2015
Earnings Per Share [Abstract]
Antidilutive securities excluded (in shares)	747	260,266
Capital shares, authorized (in shares)				110,000,000
Preferred stock authorized (in shares)	10,000,000		10,000,000	10,000,000
Common stock authorized (in shares)	100,000,000		100,000,000	100,000,000
Common stock issued (in shares)	25,535,013		25,093,135

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Derivatives and Hedging (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Derivative [Line Items]
Notional Amount	$ 4,200,000		$ 4,500,000
Expected reclassification from AOCI in the next twelve months	198,000
Collateral posted	7,100,000		16,300,000
Not designated as hedging instrument | Other assets
Derivative [Line Items]
Notional Amount	166,525,000		169,049,000
Swap | Not designated as hedging instrument
Derivative [Line Items]
Notional Amount	138,900,000		140,700,000
Swap | Not designated as hedging instrument | Other assets
Derivative [Line Items]
Notional Amount	69,427,000		70,352,000
Cash Flow Hedging
Derivative [Line Items]
Hedge ineffectiveness gain (loss) recognized	0	$ 0
Cash Flow Hedging | Designated as hedging instrument | LIBOR
Derivative [Line Items]
Notional Amount	50,000,000		50,000,000
Cash Flow Hedging | Designated as hedging instrument | Other assets | LIBOR
Derivative [Line Items]
Notional Amount	$ 25,000,000		$ 50,000,000

XML

Derivatives and Hedging (Derivative Contracts and Credit Risk Participation Agreements) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Derivative [Line Items]
Notional Amount	$ 4,200	$ 4,500
Designated as hedging instrument | Cash Flow Hedging | LIBOR
Derivative [Line Items]
Notional Amount	50,000	50,000
Not designated as hedging instrument | Swap
Derivative [Line Items]
Notional Amount	138,900	140,700
Other assets | Designated as hedging instrument | Cash Flow Hedging | LIBOR
Derivative [Line Items]
Notional Amount	25,000	50,000
Fair Value	14	186
Other assets | Not designated as hedging instrument
Derivative [Line Items]
Notional Amount	166,525	169,049
Fair Value	3,547	4,124
Other assets | Not designated as hedging instrument | Swap
Derivative [Line Items]
Notional Amount	69,427	70,352
Fair Value	1,174	1,364
Other assets | Not designated as hedging instrument | Zero premium collar
Derivative [Line Items]
Notional Amount	97,098	98,697
Fair Value	2,373	2,760
Other liabilities | Designated as hedging instrument | Cash Flow Hedging | LIBOR
Derivative [Line Items]
Notional Amount	25,000	0
Fair Value	37	0
Other liabilities | Not designated as hedging instrument
Derivative [Line Items]
Notional Amount	170,765	173,509
Fair Value	3,605	4,131
Other liabilities | Not designated as hedging instrument | Swap
Derivative [Line Items]
Notional Amount	69,427	70,352
Fair Value	1,186	1,371
Other liabilities | Not designated as hedging instrument | Credit risk participation
Derivative [Line Items]
Notional Amount	4,240	4,460
Fair Value	0	0
Other liabilities | Not designated as hedging instrument | Dealer offset to zero premium collar
Derivative [Line Items]
Notional Amount	97,098	98,697
Fair Value	$ 2,419	$ 2,760

XML

Derivatives and Hedging (Impact to Consolidated Statements of Income Related to Derivative Contracts) (Details) - Cash Flow Hedging - Interest rate swaps - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)	$ (100)	$ 573
Gain or (Loss) Reclassified from Accumulated OCI in Income (Effective Portion)	$ 137	$ 186

XML

Subordinated Debt (Narrative) (Details) - Subordinated Debt - USD ($)		3 Months Ended
	Sep. 28, 2015	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Aggregate principal amount		$ 50,000,000	$ 50,000,000
Maturity, more than		5 years
6.25% Subordinated Note, Due September 2020
Debt Instrument [Line Items]
Aggregate principal amount	$ 50,000,000.0	$ 50,000,000	$ 50,000,000
Stated interest rate	6.25%	6.25%
Debt instrument redemption price	100.00%
Maturity, more than		10 years
Subordinated Note After September 30, 2020 Due September 2025
Debt Instrument [Line Items]
Basis spread on variable rate		4.68%

XML

Subordinated Debt (Schedule of Subordinated Debt) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Sep. 28, 2015
Debt Instrument [Line Items]
Long-term debt	$ 49,408,000	$ 49,366,000
Subordinated Debt
Debt Instrument [Line Items]
Aggregate principal amount	50,000,000	50,000,000
Less debt issuance costs	592,000	634,000
Long-term debt	$ 49,408,000	49,366,000
Debt instrument term	5 years
Subordinated Debt | 6.25% Subordinated Note, Due September 2020
Debt Instrument [Line Items]
Aggregate principal amount	$ 50,000,000	$ 50,000,000	$ 50,000,000.0
Debt instrument term	10 years
Stated interest rate	6.25%		6.25%

XML

Share-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	May 14, 2007	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted in period (shares)		0	0
Share based compensation expense		$ 142	$ 242
Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants outstanding (shares)		500		363,000
Share price (usd per share)		$ 10.00		$ 10.00
Exercisable period from date from which warrants were issued (years)	10 years
Warrants granted in period (shares)		0	0
2006 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (shares)		4,525,000
Number of additional shares authorized (shares)		3,909,000
Award vesting period		3 years
Term of award		10 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expense		$ 229	$ 250
Compensation cost not yet recognized		$ 1,900
Compensation cost not yet recognized, period for recognition		3 years 1 month 6 days

XML

Share-Based Compensation (Stock Option Activity) (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding, beginning of period (in shares) | shares	1,485,704
Exercised (in shares) | shares	(633,922)
Forfeited (in shares) | shares	(314)
Expired (in shares) | shares	0
Outstanding, end of period (in shares) | shares	851,468
Exercisable, end of period (in shares) | shares	575,024
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding, weighted average exercise price, beginning of period (dollars per share) | $ / shares	$ 11.69
Exercised, weighted average exercise price (dollars per share) | $ / shares	10.53
Forfeited, weighted average exercise price (dollars per share) | $ / shares	10.31
Expired, weighted average exercise price (dollars per share) | $ / shares	0.00
Outstanding, weighted average exercise price, end of period (dollars per share) | $ / shares	12.55
Exercisable, weighted average exercise price, end of period (dollars per share) | $ / shares	$ 11.73
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, weighted average remaining contractual term, end of period (in years)	5 years 10 months 9 days
Exercisable, weighted average remaining contractual term, end of period (in years)	4 years 8 months 22 days
Outstanding, aggregate intrinsic value, end of period | $	$ 5,767
Exercisable, aggregate intrinsic value, end of period | $	$ 4,440

XML

Share-Based Compensation (Restricted Stock Activity) (Details) - Restricted Stock	3 Months Ended
	Mar. 31, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning of period (in shares) | shares	259,165
Granted (in shares) | shares	0
Vested (in shares) | shares	(3,662)
Forfeited (in shares) | shares	(13,172)
End of period (in shares) | shares	242,331
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted average grant date fair value, nonvested, beginning of period (dollars per share) | $ / shares	$ 13.70
Weighted average grant date fair value, granted (dollars per share) | $ / shares	0.00
Weighted average grant date fair value, vested (dollars per share) | $ / shares	12.39
Weighted average grant date fair value, forfeited (dollars per share) | $ / shares	14.06
Weighted average grant date fair value, nonvested, end of period (dollars per share) | $ / shares	$ 13.70

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Fair Value Measurements (Fair Value Measurements Recurring) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	$ 456,942	$ 347,705
Interest rate derivative assets	3,561	4,310
Interest rate derivative liabilities	3,642	4,131
Fair Value | Fair value, measurements, recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	456,942	347,705
Interest rate derivative assets	3,561	4,310
Interest rate derivative liabilities	3,642	4,131
Fair Value | Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Interest rate derivative assets	0	0
Interest rate derivative liabilities	0	0
Fair Value | Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	456,942	347,705
Interest rate derivative assets	3,561	4,310
Interest rate derivative liabilities	3,642	4,131
Fair Value | Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Interest rate derivative assets	0	0
Interest rate derivative liabilities	0	0
Fair Value | U.S. government agencies | Fair value, measurements, recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	35,243	21,152
Fair Value | U.S. government agencies | Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | U.S. government agencies | Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	35,243	21,152
Fair Value | U.S. government agencies | Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | U.S. states and political subdivisions | Fair value, measurements, recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	92,245	90,172
Fair Value | U.S. states and political subdivisions | Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | U.S. states and political subdivisions | Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	92,245	90,172
Fair Value | U.S. states and political subdivisions | Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | Trust preferred securities | Fair value, measurements, recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	4,525	4,525
Fair Value | Trust preferred securities | Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | Trust preferred securities | Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	4,525	4,525
Fair Value | Trust preferred securities | Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | Corporate debt securities | Fair value, measurements, recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	19,186	19,231
Fair Value | Corporate debt securities | Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | Corporate debt securities | Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	19,186	19,231
Fair Value | Corporate debt securities | Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | Mortgage-backed securities | Fair value, measurements, recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	305,743	212,625
Fair Value | Mortgage-backed securities | Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	0	0
Fair Value | Mortgage-backed securities | Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	305,743	$ 212,625
Fair Value | Mortgage-backed securities | Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	$ 0

XML

Fair Value Measurements (Fair Value Measurements Nonrecurring) (Details) - Impaired Loans - Fair Value - Fair value, measurements, nonrecurring - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 6,998	$ 7,248
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 6,998	$ 7,248

XML

Fair Value Measurements (Estimated Fair Value and Carrying Value Summary) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and due from banks	$ 34,626	$ 36,790
Interest-bearing deposits in banks	158,920	118,039
Other short-term investments	20,870	10,896
Total securities available-for-sale	456,942	347,705
Loans held for investment, net	1,881,785	1,960,735
Derivative assets	3,561	4,310
Subordinated debt	49,408	49,366
FHLB advances	217,000	110,000
Derivative financial instruments	3,642	4,131
Fair value, measurements, recurring | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and due from banks	34,626	36,790
Interest-bearing deposits in banks	158,920	118,039
Other short-term investments	20,870	10,896
Total securities available-for-sale	456,942	347,705
FHLB stock	11,698	7,067
Federal Reserve Bank stock	9,690	9,690
Loans held for investment, net	1,881,785	1,960,735
Loans held for sale	29,241	35,219
Derivative assets	3,561	4,310
Deposits	2,173,544	2,205,991
Deposits to be assumed in branch sale	29,495	31,589
Subordinated debt	49,408	49,366
FHLB advances	217,000	110,000
Derivative financial instruments	3,642	4,131
Fair value, measurements, recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total securities available-for-sale	456,942	347,705
Derivative assets	3,561	4,310
Derivative financial instruments	3,642	4,131
Fair value, measurements, recurring | Fair Value | Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and due from banks	34,626	36,790
Interest-bearing deposits in banks	158,920	118,039
Other short-term investments	20,870	10,896
Total securities available-for-sale	0	0
FHLB stock	0	0
Federal Reserve Bank stock	0	0
Loans held for investment, net	0	0
Loans held for sale	0	0
Derivative assets	0	0
Deposits	0	0
Deposits to be assumed in branch sale	0	0
Subordinated debt	0	0
FHLB advances	0	0
Derivative financial instruments	0	0
Fair value, measurements, recurring | Fair Value | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and due from banks	0	0
Interest-bearing deposits in banks	0	0
Other short-term investments	0	0
Total securities available-for-sale	456,942	347,705
FHLB stock	0	0
Federal Reserve Bank stock	0	0
Loans held for investment, net	0	0
Loans held for sale	29,241	35,219
Derivative assets	3,561	4,310
Deposits	2,119,445	2,144,196
Deposits to be assumed in branch sale	29,495	31,589
Subordinated debt	49,477	48,971
FHLB advances	217,000	109,946
Derivative financial instruments	3,642	4,131
Fair value, measurements, recurring | Fair Value | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and due from banks	0	0
Interest-bearing deposits in banks	0	0
Other short-term investments	0	0
Total securities available-for-sale	0	0
FHLB stock	11,698	7,067
Federal Reserve Bank stock	9,690	9,690
Loans held for investment, net	2,097,961	1,939,895
Loans held for sale	0	0
Derivative assets	0	0
Deposits	0	0
Deposits to be assumed in branch sale	0	0
Subordinated debt	0	0
FHLB advances	0	0
Derivative financial instruments	$ 0	$ 0

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Commitments and Contingencies (Exposure to Credit Risk) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Loss Contingencies [Line Items]
Maximum credit risk exposure	$ 705,645	$ 634,057
Commitments to extend credit
Loss Contingencies [Line Items]
Maximum credit risk exposure	689,474	617,432
Standby letters of credit
Loss Contingencies [Line Items]
Maximum credit risk exposure	$ 16,171	$ 16,625