First munity Bancshares(FCBC) - 2020 Q4 - Annual Report

Financial Performance - Net income for 2020 was $35.93 million, a decrease of 7.4% from $38.80 million in 2019[147]. - Basic earnings per common share decreased to $2.02 in 2020 from $2.47 in 2019, a decline of 18.2%[147]. - Net income for 2020 was $35,926,000, down from $38,802,000 in 2019, representing a decrease of 4.8%[272]. - Basic earnings per share for 2020 was $2.02, compared to $2.47 in 2019, a decline of 18.2%[270]. - Net income for the year ended December 31, 2020, was $35,926,000, a decrease of 7.2% from $38,802,000 in 2019[277]. Asset Growth - As of December 31, 2020, total assets increased to $3.01 billion, up from $2.80 billion in 2019, representing a growth of 7.5%[147]. - Total assets increased to $3,011,136 thousand in 2020, up from $2,798,847 thousand in 2019[268]. - Total deposits increased by $216.34 million, or 9.29%, as of December 31, 2020, compared to the previous year[238]. - Total deposits rose to $2,546,247 thousand in 2020, compared to $2,329,912 thousand in 2019, reflecting a growth of approximately 9.3%[268]. Loan Performance - The allowance for loan losses rose to $26.18 million in 2020, compared to $18.43 million in 2019, reflecting a significant increase due to expectations of future losses related to COVID-19[147][156]. - The total loans held for investment, net of unearned income and allowance, amounted to $2,160,450 thousand in 2020, compared to $2,096,035 thousand in 2019, a growth of 3.1%[215]. - The total non-covered loans held for investment increased to $2,176,952 thousand in 2020, compared to $2,101,599 thousand in 2019, reflecting a growth of 3.6%[215]. - The company modified 3,625 commercial and consumer loans totaling $458.17 million under the CARES Act, with current COVID-19 loan deferrals at $26.54 million for commercial loans and $5.72 million for consumer loans as of December 31, 2020[167]. Interest Income and Expenses - Net interest income for 2020 was $108.57 million, an increase of 21.4% from $89.45 million in 2019[147]. - Total interest income for 2020 was $114,036,000, an increase of 20.1% from $94,968,000 in 2019[270]. - Noninterest income decreased to $29,833,000 in 2020 from $33,677,000 in 2019, a decline of 11.5%[270]. - Total noninterest expense increased to $79,625,000 in 2020, compared to $69,763,000 in 2019, marking a rise of 14.1%[270]. Capital and Liquidity - The Company maintained a Common Equity Tier 1 ratio of 14.28%, consistent with the previous year[147]. - The company has not incurred additional material costs related to its remote working strategy during the COVID-19 pandemic and does not anticipate future material costs[165]. - The company maintains a strong financial position with high levels of capital and liquidity, which management believes will help endure the negative economic impacts of COVID-19[172]. - The company had unencumbered cash totaling $456.56 million as of December 31, 2020[245]. COVID-19 Impact - The company engaged an independent valuation specialist for goodwill impairment testing, resulting in no impairment as of October 31, 2020[178]. - The Company has implemented a board-approved pandemic business continuity plan and appointed a task force to address operational and financial risks posed by COVID-19[334]. - The Company continues to work with COVID-19 affected borrowers to defer loan payments, interest, and fees, in line with regulatory guidance[332]. - The estimated allowance for credit losses (ACL) under the current expected credit loss (CECL) model is approximately $39.29 million, with an estimated decline in stockholders' equity of about $5.87 million[340]. Shareholder Returns - The dividend payout ratio for 2020 was 49.5%, up from 38.82% in 2019[147]. - Cash dividends per common share increased to $1.00 in 2020 from $0.96 in 2019, an increase of 4.2%[270]. - The company repurchased 734,653 shares at an average price of $29.77 per share during 2020[274]. Risk Management - The company employs specific underwriting practices to mitigate credit risk, including analysis of borrowers' credit histories and financial statements[220]. - The allowance for loan losses is reviewed quarterly, with management believing it is adequate to absorb probable loan losses as of December 31, 2020[176]. - The company tracks credit quality indicators, including trends in risk ratings and levels of classified commercial loans[220].