SUBSEQUENT EVENT

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENT

SUBSEQUENT EVENT

Paycheck Protection Program activity

The CARES Act included an allocation of $349 billion for loans to be issued by financial institutions through the SBA, utilizing the PPP. The Paycheck Protection Program and Health Care Enhancement Act (PPP/HCEA Act) was passed by Congress on April 23, 2020 and signed into law on April 24, 2020. The PPP/HCEA Act authorized an additional $310 billion of funding under the CARES Act for PPP loans.

PPP loans are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the requirements of the PPP. These loans carry a fixed rate of 1.00% and a term of two years, if not forgiven, in whole or in part. Payments are deferred for the first six months of the loan. The loans are 100% guaranteed by the SBA. The SBA pays the originating bank a processing fee ranging from 1% to 5%, based on the size of the loan. This fee is recognized in interest

income over the contractual life of the loan under the effective yield method. In addition, the FRB has implemented the PPPLF that is available to financial institutions participating in the PPP. We continue to explore our options as it relates to utilizing the PPPLF.

As of May 5, 2020, we processed more than 18,000 PPP applications in various stages of funding for approximately $2.6 billion. Based on March 31, 2020, the PPP activity equates to approximately 11% of total loans and leases.