Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

During the first quarter of 2020, the global economy began experiencing a downturn related to the impacts of the COVID-19 global pandemic.  On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law. The CARES Act includes provisions for the Paycheck Protection Program (“PPP”) offered through the U.S. Small Business Administration (“SBA”). Loans originated under this program include principal and interest which may be forgiven provided the borrower uses the funds in a manner consistent with PPP guidelines. These loans have a contractual maturity of two years, a contractual rate of interest of 1%, and have an automatic six month payment deferral. In the month of April, 2020, Seacoast processed over 3,700 loans for its customers totaling over $530 million with an average loan size of $143,000. The SBA has outlined a fee structure based on loan size, whereby institutions will be paid 5% for loans of not more than $350,000, 3% for loans of more than $350,000 and less than $2 million, and 1% for loans of at least $2 million. These fees, net of the loan-specific costs, will be deferred and recognized as an adjustment to yield over the expected life of the loans. There is significant uncertainty about how borrowers will seek and qualify for forgiveness. As a result, the expected life of these loans and the impact on loan yields to future periods cannot currently be determined with certainty, and estimates will be periodically updated as more information becomes available.

Seacoast has also provided borrowers affected by the pandemic with short-term loan payment deferrals. In March 2020, regulatory agencies issued an interagency statement on loan modifications, confirming that short-term modifications made on a good faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief, are not to be considered troubled debt restructurings. Through April 30, 2020, Seacoast has processed approximately 2,500 loan deferrals totaling $1.0 billion. None of these payment deferrals have been classified as TDRs.