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Loans Receivable, Including Loans Held For Sale
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Loans Receivable, Including Loans Held For Sale LOANS RECEIVABLE, INCLUDING LOANS HELD FOR SALE
Major classifications of Loans receivable, including loans held for sale, held by WebBank as of September 30, 2020 and December 31, 2019 are as follows:
TotalCurrentNon-current
September 30, 2020%December 31, 2019%September 30, 2020December 31, 2019September 30, 2020December 31, 2019
Loans held for sale$80,169 $225,013 $80,169 $225,013 $— $— 
Commercial real estate loans$644 — %$659 — %— — 644 659 
Commercial and industrial2,372,454 93 %251,349 45 %213,334 233,510 2,159,120 17,839 
Consumer loans179,139 7 %302,714 55 %49,068 125,067 130,071 177,647 
Total loans2,552,237 100 %554,722 100 %262,402 358,577 2,289,835 196,145 
Less:
Allowance for loan losses(42,628)(36,682)(42,628)(36,682)— — 
Total loans receivable, net$2,509,609 $518,040 219,774 321,895 2,289,835 196,145 
Loans receivable, including loans held for sale (a)
$299,943 $546,908 $2,289,835 $196,145 
(a)    The carrying value is considered to be representative of fair value because the rates of interest are not significantly different from market interest rates for instruments with similar maturities.

Loans with a carrying value of approximately $6,320 and $15,737 were pledged as collateral for potential borrowings as of September 30, 2020 and December 31, 2019, respectively. WebBank serviced $2,845 and $2,898 in loans for others as of September 30, 2020 and December 31, 2019, respectively.

WebBank sold loans classified as loans held for sale of $7,916,168 and $14,929,832 during the nine months ended September 30, 2020 and 2019, respectively. The sold loans were derecognized from the consolidated balance sheets. Loans classified as loans held for sale primarily consist of consumer and small business loans. Amounts added to loans held for sale during the nine months ended September 30, 2020 and 2019 were $7,773,535 and $14,953,571, respectively. The reduction in loans held for sale as of September 30, 2020 reflects the impact of reduced lending by WebBank's partners due to the economic impact of COVID-19. Such factors include WebBank's partners experiencing reduced sales volume, as well as tightening their
credit policies due to the increase in the U.S. unemployment rates and other factors. This in turn has reduced the volume of loans being initiated by, and then sold by, WebBank.

Allowance for Loan Losses

The ALLL represents an estimate of probable and estimable losses inherent in the loan portfolio as of the balance sheet date. The amount of the ALLL is established by analyzing the portfolio at least quarterly, and a provision for or reduction of loan losses is recorded so that the ALLL is at an appropriate level at the balance sheet date. WebBank's ALLL decreased $16,332, or 28%, during the third quarter of 2020. The decrease in the ALLL during the third quarter of 2020 was driven by lower losses than expected related to COVID-19 and higher paydowns, and as a result, WebBank released a portion of the COVID-19 related qualitative and environmental factors. WebBank continues to monitor the impact of COVID-19 on its loan portfolio and anticipates potential future economic disruption associated with the COVID-19 pandemic. WebBank believes there remains a potential for broad negative impact on the macro-economy that may cause estimated credit losses to materially differ from historical loss experience.

Changes in the ALLL are summarized as follows:
Commercial Real Estate LoansCommercial & IndustrialConsumer LoansTotal
December 31, 2019$24 $10,920 $25,738 $36,682 
Charge-offs— (10,109)(17,075)(27,184)
Recoveries17 559 1,849 2,425 
Provision(20)11,769 18,956 30,705 
September 30, 2020$21 $13,139 $29,468 $42,628 

The ALLL and outstanding loan balances according to the Company's impairment method are summarized as follows:
September 30, 2020Commercial Real Estate LoansCommercial & IndustrialConsumer LoansTotal
Allowance for loan losses:
Individually evaluated for impairment$11 $168 $— $179 
Collectively evaluated for impairment10 12,971 29,468 42,449 
Total$21 $13,139 $29,468 $42,628 
Outstanding loan balances:
Individually evaluated for impairment$11 $1,611 $— $1,622 
Collectively evaluated for impairment633 2,370,843 179,139 2,550,615 
Total$644 $2,372,454 $179,139 $2,552,237 

December 31, 2019Commercial Real Estate LoansCommercial & IndustrialConsumer LoansTotal
Allowance for loan losses:
Individually evaluated for impairment$12 $360 $— $372 
Collectively evaluated for impairment12 10,560 25,738 36,310 
Total$24 $10,920 $25,738 $36,682 
Outstanding loan balances:
Individually evaluated for impairment$12 $2,706 $— $2,718 
Collectively evaluated for impairment647 248,643 302,714 552,004 
Total$659 $251,349 $302,714 $554,722 

Nonaccrual and Past Due Loans

Commercial and industrial loans past due 90 days or more and still accruing interest were $7,466 and $4,962 at September 30, 2020 and December 31, 2019, respectively. Consumer loans past due 90 days or more and still accruing interest were $1,083 and $3,089 at September 30, 2020 and December 31, 2019, respectively. The Company did not have any nonaccrual loans at September 30, 2020 or December 31, 2019.

Past due loans (accruing and nonaccruing) are summarized as follows:
September 30, 2020Current30-89 Days
Past Due		90+ Days
Past Due		Total
Past Due		Total LoansRecorded
Investment
In Accruing
Loans 90+
Days Past Due
Nonaccrual
Loans
That Are
Current (a)
Commercial real estate loans$644 $— $— $— $644 $— $— 
Commercial and industrial2,355,496 9,492 7,466 16,958 2,372,454 7,466 — 
Consumer loans173,923 4,133 1,083 5,216 179,139 1,083 — 
Total loans$2,530,063 $13,625 $8,549 $22,174 $2,552,237 $8,549 $— 

December 31, 2019Current30-89 Days
Past Due		90+ Days
Past Due		Total
Past Due		Total LoansRecorded
Investment
In Accruing
Loans 90+
Days Past Due
Nonaccrual
Loans
That Are
Current (a)
Commercial real estate loans$659 $— $— $— $659 $— $— 
Commercial and industrial238,025 8,362 4,962 13,324 251,349 4,962 — 
Consumer loans292,394 7,231 3,089 10,320 302,714 3,089 — 
Total loans$531,078 $15,593 $8,051 $23,644 $554,722 $8,051 $— 
(a)    Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is still not expected.

Credit Quality Indicators

In addition to the past due and nonaccrual criteria, loans are analyzed using a loan grading system. Generally, internal grades are assigned to commercial loans based on the performance of the loans, financial/statistical models and loan officer judgment. For consumer loans and some commercial and industrial loans, the primary credit quality indicator is payment status. Reviews and grading of loans with unpaid principal balances of $100 or more is performed once per year. Grades follow definitions of Pass, Special Mention, Substandard and Doubtful, which are consistent with published definitions of regulatory risk classifications. The definitions of Pass, Special Mention, Substandard and Doubtful are summarized as follows:

•Pass: An asset in this category is a higher quality asset and does not fit any of the other categories described below. The likelihood of loss is considered remote.
•Special Mention: An asset in this category has a specific weakness or problem but does not currently present a significant risk of loss or default as to any material term of the loan or financing agreement.
•Substandard: An asset in this category has a developing or currently minor weakness or weaknesses that could result in loss or default if deficiencies are not corrected or adverse conditions arise.
•Doubtful: An asset in this category has an existing weakness or weaknesses that have developed into a serious risk of significant loss or default with regard to a material term of the financing agreement.

Outstanding loan balances (accruing and nonaccruing) categorized by these credit quality indicators are summarized as follows:
September 30, 2020Non - GradedPassSpecial
Mention		Sub-
standard		DoubtfulTotal Loans
Commercial real estate loans$— $633 $— $11 $— $644 
Commercial and industrial214,225 2,153,140 3,478 1,611 — 2,372,454 
Consumer loans179,139 — — — — 179,139 
Total loans$393,364 $2,153,773 $3,478 $1,622 $— $2,552,237 

December 31, 2019Non - GradedPassSpecial
Mention		Sub-
standard		DoubtfulTotal Loans
Commercial real estate loans$— $647 $— $12 $— $659 
Commercial and industrial234,560 14,083 — 2,706 — 251,349 
Consumer loans302,714 — — — — 302,714 
Total loans$537,274 $14,730 $— $2,718 $— $554,722 

Impaired Loans

Loans are considered impaired when, based on current information and events, it is probable that WebBank will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. When loans are impaired, an estimate of the amount of the balance that is impaired is made and a specific reserve is assigned to the loan based on the estimated present value of the loan's future cash flows discounted at the loan's effective interest
rate, the observable market price of the loan or the fair value of the loan's underlying collateral less the cost to sell. When the impairment is based on the fair value of the loan's underlying collateral, the portion of the balance that is impaired is charged off, such that these loans do not have a specific reserve in the ALLL. Payments received on impaired loans that are accruing are recognized in interest income, according to the contractual loan agreement. WebBank recognized $58 and $73 on impaired loans for the nine months ended September 30, 2020 and 2019, respectively. Payments received on impaired loans that are on nonaccrual are not recognized in interest income, but are applied as a reduction to the principal outstanding. Payments are recognized when cash is received. Information on impaired loans is summarized as follows:
Recorded Investment
September 30, 2020Unpaid Principal
Balance		With No
Allowance		With
Allowance		Total Recorded
Investment		Related
Allowance		Average Recorded
Investment
Commercial real estate loans$11 $— $11 $11 $11 $11 
Commercial and industrial1,611 — 1,611 1,611 168 2,688 
Total loans$1,622 $— $1,622 $1,622 $179 $2,699 

Recorded Investment
December 31, 2019Unpaid Principal
Balance		With No
Allowance		With
Allowance		Total Recorded
Investment		Related
Allowance		Average Recorded
Investment
Commercial real estate loans$12 $— $12 $12 $12 $14 
Commercial and industrial2,706 — 2,706 2,706 360 2,746 
Total loans$2,718 $— $2,718 $2,718 $372 $2,760 

During the quarter ended September 30, 2020, WebBank continued issuing loans under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP"), primarily with one of its lending partners, authorized under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. The loans were funded by the PPP Liquidity Facility, have terms of between 2 and 5 years, and their repayment is guaranteed by the SBA. Payments by borrowers on the loans begin up to 16 months after the note date, and interest will continue to accrue during the 16-month deferment at 1%. Loans can be forgiven in whole or part (up to full principal and any accrued interest) if certain criteria are met. Loan processing fees paid to WebBank from the SBA are accounted for as loan origination fees. Net deferred fees are recognized over the life of the loan as a yield adjustment on the loans. If a loan is paid off or forgiven by the SBA prior to its maturity date, the remaining unamortized deferred fees will be recognized in interest income at that time. The PPP loans are included in Commercial and industrial loans in the table above. As of September 30, 2020, the total PPP loans and associated liabilities are $2,146,961 and $2,159,721, respectively, and included in Long-term loans receivable, net, and Other borrowings, respectively, in the consolidated balance sheet as of September 30, 2020. Upon borrower forgiveness, the SBA pays WebBank for the principal and accrued interest owed on the loan. The timing of loan forgiveness is uncertain at this time, but borrower forgiveness applications and SBA processing is expected over the next several quarters. As the PPP continues to evolve, changes to the loan terms and exercise of loan forgiveness may materially impact the outstanding loan balances and the effective yield.

The Company is offering loan modifications to assist borrowers during the COVID-19 pandemic. The CARES Act along with the interagency statement issued by the federal banking agencies provides that loan modifications made in response to COVID-19 do not need to be accounted for as a troubled debt restructuring ("TDR"). Accordingly, the Company does not account for such loan modifications as TDRs. The Company's loan modifications allow for payment deferrals, payment reduction, settlements amongst others. At September 30, 2020, the Company had granted loan modifications on $23,532 of loans. The program is ongoing and additional loans continue to be granted modifications. The Company granted approximately $10,213 short–term deferments on loan balances of $23,532, which represent 0.94% of total loan balances as of September 30, 2020. These loan modifications are not classified as TDRs and will not be reported as past due provided that they are performing in accordance with the modified terms.