On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic and on March 13, 2020 the United States government declared COVID-19 as a national emergency. The continuing effects of the outbreak of COVID-19 could adversely impact a broad range of industries in which the Company’s customers operate and impair their ability to fulfill their financial obligations to the Company. The economic effects of the COVID-19 outbreak may adversely affect the Company’s financial condition and results of operations, though such potential impact is unknown at this time.

For the six-months ended June 30, 2020, the Company provided certain borrowers affected in a variety of ways by the COVID-19 outbreak with payment accommodations that facilitate their ability to work through the immediate impact of the virus. Payment accommodations were in the form of short-term (six months or less) principal and/or interest deferrals. These payment accommodations were made in accordance with Section 4013 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and the Company. Section 4013 of 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. Interest income is continuing to be recognized during the accommodation period. The following table presents COVID-19 payment accommodations based on loan type and amount at June 30, 2020:


	Number of Loans	Loan Amount
		(In Thousands)
Commercial real estate	149	$	148,165
Commercial	52		9,283
Residential real estate	81		16,821
Consumer	2		33
Total	284	$	174,302

Included in the totals above are 19 loans totaling $22.9 million that were provided a second short-term payment accommodation and 26 loans totaling $7.7 million in which the payment accommodations period has ended and the loan payments have resumed under their original contractual terms.

Subsequent to June 30, 2020 at July 29, 2020, the Company had 282 Section 4013 loans totaling $174.1 million. Included in these totals are 37 loans totaling $45.1 million that were provided a second short-term payment accommodation and 137 loans totaling $75.2 million in which the payment accommodations period has ended and the loan payments have resumed under their original contractual terms. Between June 30, 2020 and July 29, 2020, there were three Section 4013 loans of $167 thousand that were repaid in full and one new Section 4013 loan added of $183 thousand.

As part of the CARES Act, the Company was approved to be a Paycheck Protection Program (“PPP”) lender. The Company had not previously been an approved Small Business Administration (“SBA”) 7(a) lender. The Company began accepting applications from qualified borrowers on April 3, 2020. As of June 30, 2020, the Company had booked a total of 520 PPP loans with a receivable balance of $65.1 million, net of $1.8 million of unearned origination fees and costs.

These PPP loans are 100% guaranteed by the SBA, have up to a two year or five year maturity and an interest rate of 1% throughout the term of the loan, with payments deferred over the first six months following the date of disbursement of the loan. The SBA may forgive the PPP loans if certain conditions are met by the borrower, including using at least 60% of the proceeds for payroll costs. The SBA also provides the Company with a processing fee for each loan, with the amount of such fee pre-determined by the SBA dependent upon the size of each loan. At June 30, 2020, the Company has recorded deferred PPP loan fees of $2.4 million which will be recognized through interest income over the life of the related PPP loans. Because of the 100% SBA guarantee, the Company has determined that no allowance for loan losses is required on the PPP loans. All PPP loans have a pass rating and none are past due under their contractual terms.

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In April 2020, the Company applied and was approved by the Federal Reserve Board for both the ability to borrow under its Paycheck Protection Program Liquidity Facility (“PPPLF”), as well as its Discount Window. The PPPLF provides term funding to depository institutions that originate loans to small businesses under the PPP. PPP loans that are pledged to secure PPPLF extensions of credit are excluded from leverage ratio calculations. The components of long-term borrowings with the PPPLF at June 30, 2020 were as follows:


	June 30, 2020
	(Dollars in Thousands)
Maturity Date	Interest Rate		Outstanding
April 2022	0.35%	$	38,701
May 2022	0.35%		23,338
Total PPPLF Outstanding Borrowings		$	62,039

The Company’s allowance for loan losses increased $995 thousand to $9.0 million at June 30, 2020 compared to $8.0 million at December 31, 2019. At June 30, 2020 and December 31, 2019, the allowance for loan losses represented 0.87% and 0.79%, respectively, of loans receivable (not including PPP loans which are 100% guaranteed by the SBA). In the first and second quarters of 2020, the Company adjusted the allowance for loan losses’ economic risk factor and loan modifications risk factor methodologies to incorporate the current economic implications, rising unemployment rate and number of loan modifications from the COVID-19 pandemic, leading to the increase in the allowance for loan losses as a percentage of total loans. In determining its allowance for loan loss level at June 30, 2020, the Company considered the health and composition of its loan portfolio going into and through the COVID-19 pandemic. The Company’s nonperforming loans to total loans receivable, excluding PPP loans receivable, was 0.27% at June 30, 2020, up from 0.26% at December 31, 2019. The Company had no charge-offs for the three and six months ended June 30, 2020 and for the year ended December 31, 2019. At June 30, 2020, approximately 94% of the Company’s loan portfolio is collateralized by real estate. Less than 6% of the Company’s loan portfolio is to borrowers in the more particularly hard-hit industries (including the travel and hotel industry, the full-service and limited-service restaurant industries, and the assisted living facilities industry) and the Company has no international exposure. The Company was not required to adopt the Current Expected Credit Losses (“CECL”) Financial Accounting Standards Board (“FASB “) accounting standard in 2020, as this guidance will not be effective for the Company until 2023.