Subsequent Events Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The provisions of the CARES Act created the Paycheck Protection Program ("PPP") through the Small Business Administration ("SBA") in early April, 2020. As of May 4, 2020, the Company has originated $324 million in PPP loans and has an additional $55 million in the PPP loan pipeline.

In order to provide additional liquidity to banks participating in the PPP, the Federal Reserve Bank created the Paycheck Protection Program Lending Facility ("PPPLF") which provides banks with term, nonrecourse borrowings secured by PPP loans. The interest rate of PPPLF borrowings is fixed at 0.35%. The maturity dates for term borrowings incurred by the Company under the PPPLF equal the maturity dates of the PPP loans pledged to secure the extension of credit, which is two years. The maturity date of the PPPLF borrowings will be accelerated if the underlying PPP loan goes into default and the Company sells the PPP loan to the SBA to realize on the SBA guarantee. The maturity date of the PPPLF borrowings will also be accelerated to the extent of any loan forgiveness reimbursement received by the Company from the SBA.

On April 9, 2020, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued an interim final rule to allow banking organizations to neutralize the effect of PPP loans financed under the PPPLF on leverage capital ratios, so origination of PPP loans does not require the Company to carry additional capital.

As of May 4, 2020, the Company has $104 million of PPPLF borrowings. The Company has pledged $104 million in PPP loans as collateral for these borrowings.