First munity Bancshares(FCBC) - 2022 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2022, was $9,515 thousand, a decrease of 34.5% from $14,602 thousand in the same period of 2021[15]. - Basic earnings per share for Q1 2022 were $0.57, down from $0.83 in Q1 2021, a decrease of 31.1%[15]. - The company reported a total comprehensive income of $4,549 thousand for the three months ended March 31, 2022, compared to $13,870 thousand in the same period of 2021, a decline of 67.2%[18]. - The company declared common dividends of $0.27 per share in Q1 2022, totaling $4.541 million, compared to $4.428 million in Q1 2021[24]. - The company experienced an other comprehensive loss of $4,966,000 for the three months ended March 31, 2022, compared to a loss of $732,000 in the same period of 2021[111]. Asset and Equity Changes - Total assets increased to $3,244,127 thousand as of March 31, 2022, compared to $3,194,519 thousand as of December 31, 2021, reflecting a growth of 1.6%[11]. - The company’s total stockholders' equity decreased to $424,156 thousand as of March 31, 2022, from $427,775 thousand as of December 31, 2021, a decrease of 0.6%[13]. - Total cash and cash equivalents at the end of Q1 2022 were $457.306 million, down from $628.745 million at the end of Q1 2021, representing a decrease of 27.2%[24]. Loan and Deposit Activity - Total deposits rose to $2,782,944 thousand as of March 31, 2022, up from $2,729,391 thousand as of December 31, 2021, indicating an increase of 2.0%[11]. - Total loans held for investment increased to $2,244,296 thousand as of March 31, 2022, up from $2,165,569 thousand at December 31, 2021, representing a growth of approximately 3.64%[70]. - The company experienced a net decrease in loans of $78.716 million in Q1 2022, contrasting with an increase of $45.985 million in Q1 2021[24]. - The increase in noninterest-bearing deposits was $17.869 million in Q1 2022, compared to $51.781 million in Q1 2021[24]. Income and Expense Analysis - Total interest income decreased to $25,639,000, down 5.7% from $27,151,000 year-over-year[18]. - Net interest income after provision for loan losses decreased to $23,192 thousand for Q1 2022, down from $30,283 thousand in Q1 2021, representing a decline of 23.3%[15]. - Total noninterest expense for Q1 2022 was $19,986 thousand, an increase of 6.2% from $18,820 thousand in Q1 2021[15]. - Noninterest income increased to $9,194 thousand for the three months ended March 31, 2022, compared to $7,569 thousand in the same period of 2021, marking a growth of 21.5%[15]. Credit Losses and Provisions - The allowance for credit losses stood at $28,981 thousand as of March 31, 2022, compared to $27,858 thousand as of December 31, 2021, reflecting a slight increase of 4.0%[11]. - The provision for credit losses in Q1 2022 was $1.961 million, compared to a recovery of $4.001 million in Q1 2021[24]. - The Company recorded an additional allowance for credit losses (ACL) for loans of $13.11 million due to the adoption of ASU 2016-13[53]. Securities and Investments - As of March 31, 2022, the total amortized cost of available-for-sale debt securities was $274,580,000, with a fair value of $268,703,000, reflecting an unrealized loss of $6,049,000[59]. - The company reported no gross realized gains or losses from the sale of available-for-sale debt securities for March 31, 2022[66]. - The total fair value of available-for-sale debt securities as of March 31, 2022, was $268.70 million[59]. Loan Quality and Risk Assessment - The overall loan portfolio reflects a stable credit quality, with a significant portion rated as Pass, indicating acceptable credit quality and risk[72]. - The risk grading matrix indicates that $2,147,392 thousand of loans are rated as Pass, while $29,306 thousand are under Special Mention as of March 31, 2022[73]. - Substandard loans totaled $67,598 thousand, indicating potential weaknesses in repayment[73]. - The Company continues to monitor credit quality closely, with a focus on loans requiring above-average supervision[72]. Future Outlook and Strategic Initiatives - The company is focusing on market expansion and new product development strategies to enhance future growth prospects[78]. - The Company will consider upgrading modified loans back to pass status once the modification period has ended and timely payments resume[86].