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Significant Event | 9 Months Ended
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Sep. 30, 2020
Significant Event [Abstract] |
Significant Event | Note 2 – Significant Event On March 11, 2020, the World Health Organization declared a pandemic as a result of the global spread of the coronavirus, commonly referred to as COVID-19. The spread of the disease quickly accelerated in the United States and to date, all 50 states have reported cases. The U.S. and state governments reacted to the pandemic by issuing shelter at home orders and requiring that non-essential businesses be closed to prevent spread of the virus. The health crisis quickly turned into a financial crisis resulting in guidance and mandates regarding foreclosures and repossessions and accounting and regulatory changes designed to encourage banks to work with customers suffering detrimental financial impact. As a result of the pandemic effecting the states and local markets in which it operates, the Corporation successfully implemented its Business Continuity Plan with the goal of protecting the health, safety and financial well-being of its associates and customers. As part of its plan to protect the financial well-being of its customers, the Corporation chose to participate and educate its customers on the government sponsored plans established to provide financial assistance to businesses. The U.S. Government’s Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) established the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) which provides small businesses with resources to maintain payroll, hire back employees who may have been laid off, and to cover applicable overhead expenses. We continued to provide access to the PPP and process applications until the window closed on August 8, 2020. These loans are 100% guaranteed by the SBA, have up to a two year or five year maturity, provide for a nine month deferral period, and have an interest rate of 1%. These loans may be forgiven, in whole or in part, by the SBA if the borrower meets certain conditions, including by using at least 60% of the loan proceeds for payroll costs. The SBA also established processing fees from 1% to 5%, depending on the loan amount. We anticipate receiving approximately $3.5 million in deferred loan fees. In April 2020, the Bank established eligibility to participate in the Paycheck Protection Program Liquidity Facility (“PPPLF”) which was established by Congress and administered by the Federal Reserve Bank. This facility uses the SBA guaranteed PPP loans as collateral, offering 100% collateral coverage with no recourse to the Bank. The majority of the PPP loan disbursements have been to internal, non-interest-bearing accounts awaiting use by borrowers. During the second quarter of 2020, we did not access this facility. We will continue to monitor our liquidity position and determine appropriate timing to utilize these funds. During the second quarter of 2020, the Bank was approved to participate in the Main Street Lending Program established by the Federal Reserve. This program supports lending to small and medium-sized businesses and non-profit organizations that were in sound financial condition before the onset of the COVID-19 pandemic. The CARES Act, enacted on March 27, 2020, provides that, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act terminates, the Company may elect to suspend GAAP for loan modifications related to the pandemic that would otherwise be categorized as troubled debt restructurings and suspend any determination of a loan modified as a result of the effects of the pandemic as being a troubled debt restructuring, including impairment for accounting purposes. In response to the COVID-19 pandemic, the Company developed a set of guidelines to provide relief to qualified commercial, mortgage and consumer loans customers. These guidelines, as permitted by Section 4013 of the CARES Act, provide for deferment of certain loan payments of up to 180 days to provide relief to qualified commercial, mortgage and consumer loan customers. Initial deferrals of 90 days were granted to qualified customers with the option to request a second deferral for an additional 90 days. L oans in active modification status declined significantly during the third quarter as businesses started to open back up and begin to return to a more normal operating environment. We continue to have communication with our borrowers as there is still some uncertainty as to how long the pandemic will last. In accordance with Section 4013 of the CARES Act, we have not accounted for such loans as TDRs, nor have we designated them as past due or nonaccrual. The following table includes data on our consumer, residential mortgage and commercial loan portfolios, including a breakdown by industry, and the percentage of the portfolio that has been modified through October 30, 2020 as a result of COVID-19. For comparative purposes, modifications reported through July 31, 2020 are included.
| Total Loans at 9/30/20 (*) |  | Active COVID Modifications at 10/30/20 |  | Active COVID Modifications through 7/31/20
Industry Category | # of Loans (**) |  | Balance (000s) | Balance as % of Total Portfolio |  | # of Loans |  | Balance (000s) | Balance as % of Total Portfolio |  | # of Loans |  | Balance (000s) | Balance as % of Category
RE/Rental/Leasing - Non-Owner Occupied | 90 | $ | 124,370 | 11.9% |  | — | $ | — | 0.0% |  | 25 | $ | 53,664 | 44.4%
RE/Rental/Leasing - All Other | 320 |  | 100,358 | 9.6% |  | 2 |  | 141 | 0.1% |  | 43 |  | 23,562 | 25.2%
Construction - Developers | 20 |  | 57,977 | 5.6% |  | — |  | — | 0.0% |  | 1 |  | 2,975 | 5.2%
Accommodations | 33 |  | 47,857 | 4.6% |  | 6 |  | 13,519 | 28.2% |  | 12 |  | 33,246 | 70.0%
Services | 207 |  | 45,926 | 4.4% |  | — |  | — | 0.0% |  | 26 |  | 15,539 | 34.9%
Health Care/Social Assistance | 60 |  | 34,048 | 3.3% |  | — |  | — | 0.0% |  | 16 |  | 8,564 | 25.9%
RE/Rental/Leasing - Multifamily | 107 |  | 32,204 | 3.1% |  | — |  | — | 0.0% |  | 24 |  | 11,447 | 36.9%
RE/Rental/Leasing - Developers | 39 |  | 25,840 | 2.5% |  | — |  | — | 0.0% |  | 3 |  | 6,773 | 23.3%
Manufacturing | 50 |  | 25,519 | 2.4% |  | — |  | — | 0.0% |  | 7 |  | 10,710 | 41.6%
Construction - All Other | 268 |  | 24,199 | 2.3% |  | 5 |  | 396 | 1.6% |  | 19 |  | 3,142 | 12.2%
Prof/Scientific/Technical | 108 |  | 19,820 | 1.9% |  | — |  | — | 0.0% |  | 25 |  | 7,521 | 34.1%
Trade | 109 |  | 16,890 | 1.6% |  | — |  | — | 0.0% |  | 5 |  | 1,405 | 9.1%
Transportation/Warehousing | 226 |  | 15,979 | 1.5% |  | — |  | — | 0.0% |  | 5 |  | 235 | 1.6%
Food Service | 32 |  | 11,110 | 1.1% |  | — |  | — | 0.0% |  | — |  | — | 0.0%
Public Administration | 46 |  | 10,536 | 1.0% |  | — |  | — | 1.9% |  | 11 |  | 3,003 | 31.6%
Entertainment/Recreation | 24 |  | 8,341 | 0.8% |  | 1 |  | 284 | 3.4% |  | 6 |  | 2,626 | 36.3%
Agriculture | 52 |  | 4,595 | 0.4% |  | — |  | — | 0.0% |  | 2 |  | 508 | 11.0%
Energy | 12 |  | 1,645 | 0.2% |  | — |  | — | 0.0% |  | — |  | — | 0.0%
Total Commercial | 1,803 | $ | 607,214 | 58.2% |  | 14 | $ | 14,340 | 2.4% |  | 230 | $ | 184,920 | 31.1%
Total Residential Mortgage | 2,157 |  | 334,185 | 32.0% |  | 16 |  | 4,508 | 1.2% |  | 93 |  | 26,089 | 7.6%
Total Consumer | 6,508 |  | 102,091 | 9.8% |  | 12 |  | 403 | 0.5% |  | 60 |  | 3,444 | 3.3%
Total Loans at September 30, 2020 | 10,468 | $ | 1,043,490 | 100.0% |  | 42 | $ | 19,251 | 1.8% |  | 383 | $ | 214,453 | 20.6%
(*) Excluding 1,174 PPP loans totaling $148.9 million, 1.6% including PPP loans |  |  |  |  |
(**) Including active loans/lines with no outstanding balance |  |  |  |  |  |  |  |

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