Risk Factors.
−Removed: Except as set forth below, as of March 31, 2020, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019:
+Added: Except as set forth below, as of June 30, 2020, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019:
The COVID-19 pandemic has impacted our business, and the ultimate impact on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.
−Removed: We are unable to predict how the COVID-19 pandemic will affect our business.
−Removed: The effects of the COVID-19 pandemic are outside of our control.
−Removed: A slowdown in general economic activity, particularly in Oklahoma, would negatively impact our business.
−Removed: The COVID-19 pandemic could affect our ability to generate new loans or receive repayments of existing loans, and our ability to attract new deposits or to retain existing deposits, adversely affecting our financial condition.
+Added: With the lack of precedent, we are unable to predict with a high level of confidence how the COVID-19 pandemic will affect our business.
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, and increased unemployment levels.
1 unchanged sentence
As a result, the demand for our products and services may be significantly impacted.
−Removed: Furthermore, the pandemic has influenced and could further influence the recognition of credit losses in our loan portfolios and has increased and could further increase our allowance for credit losses, particularly if businesses remain closed and if more customers draw on their lines of credit or seek additional loans to help finance their businesses.
−Removed: In addition, we are a lender for the Small Business Administration's Paycheck Protection Program ("PPP") and other SBA, Federal Reserve or United States Treasury programs that have been or may be created in the future in response to the pandemic.
−Removed: These programs are new, the terms are somewhat in flux and their effects on our business are uncertain.
−Removed: During the month of March and into April as the impact of the COVID-19 pandemic on the overall economy became more evident, the Company acted on several fronts.
−Removed: Importantly, we created a task force that has worked 24/7 to facilitate the PPP through the SBA.
−Removed: Through April 30, 2020, we approved 6,572 loans totaling approximately $919 million.
+Added: Furthermore, the pandemic has influenced and could further influence the recognition of credit losses in our loan portfolios and has increased and could further increase our allowance for credit losses, particularly if businesses remain closed or otherwise adversely affected for an extended period of time, or even permanently.
+Added: In addition, we are a lender for the Paycheck Protection Program ("PPP") of the Small Business Administration (SBA) and other SBA, Federal Reserve or United States Treasury programs that have been or may be created in the future in response to the pandemic.
+Added: These programs are new, the terms are subject to political influence and their effects on our business are uncertain.
+Added: Through June 30, 2020, we approved 8,392 loans totaling approximately $825.1 million, net of unamortized processing fees of $26.2 million.
The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted.
−Removed: In response to the COVID-19 pandemic, we have also implemented a short-term loan modification program to provide temporary payment relief to certain of our borrowers who meet the program's qualifications.
−Removed: This program allows for a deferral of payments for 90 days, which we may extend for an additional 90 days.
−Removed: The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date of the existing loan.
−Removed: It would be reasonable to expect that the number of these deferrals would go up if the COVID-19 pandemic continues.
−Removed: Through May 5, 2020, we have modified terms on 6,828 loans totaling approximately $904 million.
+Added: Due to the impacts of the COVID-19 pandemic, the Company has modified approximately $939.8 million in loans, most of which are secured by commercial real estate.
+Added: These modifications were undertaken in response to Section 4013 of the CARES Act and the regulatory intent outlined in the Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus and to provide businesses financial flexibility until the economy has time to recover to a more normal level of activity.
+Added: However, these modifications, which typically involve payment modifications and forbearance, also have the effect of delaying recognition of loans that may ultimately be permanently impaired.
+Added: Consequently, it is reasonable to expect that when temporary regulatory accounting relief and payment modifications cease, there will be a marked increase in credit impairment and restructured loans.
+Added: The timing and extent of such consequences are impossible to ascertain at this time and are dependent on the duration of the COVID-19 pandemic, the level and success of the government’s economic stimulus, and further regulatory guidance.
+Added: Prior to the COVID-19 pandemic, there was only a remote likelihood that the Company would surpass $10 billion in total assets for several years.
+Added: However, with the CARES Act, including PPP loans, stimulus payments to households, and artificially high household savings rates, our deposits and assets have grown dramatically beyond any reasonably foreseeable levels.
+Added: To the extent the COVID-19 pandemic continues and the government response to it continue in the same or similar manner, the Company has a much heightened possibility of exceeding $10 billion in total assets at December 31, 2020.
+Added: Pursuant to the Durbin amendment of the Dodd-Frank Act, this would trigger an approximate loss of income from debit card interchange fees between $16 and $18 million in subsequent years.
+Added: The Company is developing strategies to avoid exceeding $10 billion in assets and the loss of interchange income, but the success of these strategies is uncertain.
Significant uncertainties as to future economic conditions exist, and we have taken deliberate actions in response.
−Removed: Additionally, the economic pressures have contributed to an increased provision for credit losses for the first quarter of 2020.
+Added: Additionally, the economic pressures have contributed to an increased provision for credit losses for the first half of 2020.
We continue to monitor the impact of the COVID-19 pandemic closely, as well as any effects that may result from the CARES Act;
however, the extent to which the COVID-19 pandemic will impact our operations and financial results during the remainder of 2020 is highly uncertain.
+Added: Unregistered Sales of Equity Securities and Use of Proceeds.
+Added: Defaults Upon Senior Securities.
+Added: Mine Safety Disclosures.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.