Southern First(SFST) - 2020 Q4 - Annual Report

Financial Performance - Net income available to common shareholders decreased by 34.21% to $18,328 thousand in 2020, down from $27,858 thousand in 2019[247] - Basic earnings per share fell to $2.37 in 2020, a decline of 34.64% from $3.70 in 2019[247] - Comprehensive income for 2020 was $19.65 million, down from $28.48 million in 2019, indicating a decline of 30.9%[409] - Net income for the year ended December 31, 2020, was $18.3 million, a decrease of 34% from $27.9 million in 2019[415] Asset Growth - Total assets increased to $2,482,587 thousand in 2020, up 9.50% from $2,267,195 thousand in 2019[245] - Total assets increased to $2.48 billion in 2020, up from $2.27 billion in 2019, representing a growth of approximately 9.5%[405] - The company's total liabilities increased to $2.25 billion in 2020, compared to $2.06 billion in 2019, marking an increase of approximately 9.4%[405] - Shareholders' equity grew to $228.29 million in 2020, up from $205.86 million in 2019, representing an increase of 10.8%[405] Loan and Deposit Growth - Loans grew by 10.26% to $2,142,867 thousand in 2020, compared to $1,943,525 thousand in 2019[247] - Deposits rose by 14.21% to $2,142,758 thousand in 2020, up from $1,876,124 thousand in 2019[247] - Total deposits increased to $2.143 billion as of December 31, 2020, from $1.876 billion in 2019, representing a growth of approximately 14.2%[529] - Noninterest-bearing deposits rose to $576.610 million in 2020, up from $397.331 million in 2019, marking a significant increase of approximately 45%[529] Noninterest Income - Noninterest income rose to $27,353 thousand in 2020, significantly higher than $14,983 thousand in 2019[245] - Total noninterest income rose to $27.35 million in 2020, up from $14.98 million in 2019, reflecting a growth of 82.5%[407] Loan Loss Provisions - The provision for loan losses significantly increased to $29.6 million in 2020, compared to $2.3 million in 2019, indicating a heightened risk assessment[407] - The allowance for loan losses was $44.15 million as of December 31, 2020, compared to $16.64 million as of December 31, 2019, indicating a significant increase in provisions due to credit risk management[489] - The provision for loan losses significantly increased to $29,600,000 in 2020 from $2,300,000 in 2019, marking a rise of over 1,200%[509] Credit Quality - Nonperforming assets include loans on nonaccrual status and loans past due 90 days or more, indicating potential credit risk in the loan portfolio[441] - Total nonperforming assets increased to $9,238,000 in 2020 from $6,794,000 in 2019, representing a rise of 36.5%[503] - Nonperforming assets as a percentage of total assets rose to 0.37% in 2020 from 0.30% in 2019, while the percentage of gross loans increased to 0.43% from 0.35%[503] Loan Portfolio Composition - Real estate loans represented 84.6% of total loans as of December 31, 2020, up from 82.8% in 2019[423] - The loan portfolio is primarily secured by real estate mortgages, accounting for 84.6% of total loans, with commercial loans comprising 59.5% of total real estate loans[480] - Commercial loans accounted for 64.8% of the total loan portfolio as of December 31, 2020, while consumer loans made up 35.2%, reflecting a slight shift in portfolio composition[489] Cash and Cash Equivalents - Total cash and cash equivalents at the end of 2020 were $100.7 million, down from $127.8 million at the end of 2019[415] - Cash and cash equivalents increased to $12.6 million at December 31, 2020, up from $6.0 million in 2019, reflecting a significant growth of 110%[432] Impact of COVID-19 - The impact of the COVID-19 pandemic has adversely affected the Company's financial condition and results of operations, particularly in interest income and provision for loan losses[424] - The Company granted short-term loan deferrals totaling $3.2 million to six client relationships, which were classified as Troubled Debt Restructurings (TDRs) due to financial difficulties prior to the pandemic[445] - The company granted short-term loan deferrals to 864 clients due to COVID-19, with two clients remaining under deferral as of December 31, 2020[515] Derivative Financial Instruments - The Company utilizes derivative financial instruments primarily to hedge exposure to changes in interest rates, with all derivatives recognized at fair value[543] - The Company’s total derivative financial instruments increased from $46.946 million in 2019 to $183.069 million in 2020[547] Regulatory and Compliance - The Company does not anticipate any material adverse impact from its income tax positions, with federal and state tax returns open for examination from the 2017 tax year onward[459] - The Company does not expect to adopt ASU 2016-13 before the effective period, which begins after December 15, 2022[463]