First Western(MYFW) - 2020 Q4 - Annual Report

Financial Performance - Net income for 2020 was $24,534 thousand, significantly higher than $8,009 thousand in 2019, marking a growth of 206.7%[323] - The return on average assets improved to 1.48% in 2020, up from 0.68% in 2019[323] - The efficiency ratio decreased to 60.50% in 2020 from 80.57% in 2019, indicating improved operational efficiency[323] - Gross revenue for 2020 was $97,282,000, compared to $64,336,000 in 2019, showcasing robust growth in total income[337] - For the year ended December 31, 2020, net income available to common shareholders was $24.5 million, a 206.3% increase from $8.0 million in 2019[368] - Income before income tax for 2020 was $33.1 million, reflecting a 224.4% increase from $10.2 million in 2019[368] Asset Growth - Total assets increased to $1,973,655 thousand in 2020, up from $1,251,682 thousand in 2019, representing a growth of 57.6%[323] - Total shareholders' equity rose to $154,962 thousand in 2020, compared to $127,678 thousand in 2019, an increase of 21.4%[323] - Total liabilities increased to $1,818,693 thousand in 2020, up from $1,124,004 thousand in 2019, representing a growth of approximately 62%[520] - Total deposits increased by $533.1 million, or 49.1%, to $1.62 billion as of December 31, 2020, compared to $1.09 billion as of December 31, 2019[473] Loan and Interest Income - Net interest income after provision for loan losses rose to $41,420 thousand in 2020, compared to $31,399 thousand in 2019, an increase of 32.2%[323] - Net interest income for 2020 reached $46,102,000, up from $32,061,000 in 2019, indicating a significant growth in interest earnings[329] - The average yield on loans decreased to 3.94% in 2020 from 4.49% in 2019, while the net interest margin improved to 3.09% from 2.99%[371] - The average loans outstanding for 2020 were $1.32 billion, an increase of 40.8% from $936.8 million in 2019[465] Non-Interest Income - Non-interest income increased to $51,180 thousand in 2020, compared to $32,577 thousand in 2019, a growth of 57.1%[323] - Non-interest income for 2020 was $51,180,000, compared to $32,577,000 in 2019, reflecting a strong increase in fee-based revenue[329] - Non-interest income rose by $18.6 million, or 57.1%, to $51.2 million, driven by a $691.4 million increase in mortgage loans funded[385] Loan Losses and Provisions - The allowance for loan losses increased to $12,539 thousand in 2020 from $7,875 thousand in 2019, reflecting a rise of 59.5%[323] - For the year ended December 31, 2020, the Company recorded a provision for loan losses of $4.7 million, primarily due to increased economic uncertainty related to the COVID-19 pandemic[393] - The allowance for loan losses increased to $12.5 million at the end of 2020, compared to $7.9 million at the beginning of the year, reflecting a provision for loan losses of $4.7 million[465] Operational Efficiency - The efficiency ratio improved to 60.50% in 2020 from 80.57% in 2019, demonstrating enhanced operational efficiency[329] - Non-interest expense for 2020 was $59,537,000, an increase from $53,784,000 in 2019, while adjusted non-interest expense was $58,856,000[329] - Non-interest expense increased by 10.7% to $59.5 million for the year ended December 31, 2020, driven by higher salaries and employee benefits, and professional services expenses[396] Capital and Equity - The company’s capital ratios exceeded the well-capitalized regulatory requirements established under Basel III as of December 31, 2020[365] - The Company completed the issuance and sale of subordinated notes totaling $18.0 million during the year ended December 31, 2020[479] - The consolidated company's total capital to risk-weighted assets ratio was 12.80% as of December 31, 2020, compared to 12.87% as of December 31, 2019[496] COVID-19 Impact and Response - The company activated its Business Continuity Plan in March 2020, with most associates working remotely and offices operating on an appointment-only basis[343] - The company modified two loans totaling $2.1 million due to COVID-19, representing 0.13% of total loans, with one loan in the 1-4 Family Residential category and one in Owner Occupied CRE[445] - The company has intensified portfolio management focusing on higher impacted industries due to the COVID-19 pandemic[464] Mortgage and Loan Activities - The Company originated $1.33 billion in mortgage loans during the year ended December 31, 2020, with $875.8 million in refinance loans compared to $292.7 million the prior year[416] - The net gain on mortgage loans increased by $18.7 million, or 176.6%, to $29.3 million, with origination volume rising to $1.33 billion in 2020 from $640.6 million in 2019[388] - Mortgage loans held for sale increased by $113.5 million, or 235.0%, to $161.8 million as of December 31, 2020, reflecting increased mortgage origination volume[419]