Risk Factors.
−Removed: 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:
+Added: Except as set forth below, as of September 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.
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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.
−Removed: In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing.
+Added: In addition, the pandemic has resulted in closures of many businesses.
As a result, the demand for our products and services may be significantly impacted.
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These programs are new, the terms are subject to political influence and their effects on our business are uncertain.
−Removed: Through June 30, 2020, we approved 8,392 loans totaling approximately $825.1 million, net of unamortized processing fees of $26.2 million.
+Added: Through September 30, 2020, we approved 8,476 loans totaling approximately $831.7 million, net of unamortized processing fees of $22.5 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: 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: In addition, due to the impacts of the COVID-19 pandemic, the Company has approximately $104.5 million in modified loans, most of which are secured by commercial real estate, as of September 30, 2020.
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.
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.
−Removed: 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: Consequently, it is reasonable to expect that when temporary regulatory accounting relief and payment modifications cease, there could be a marked increase in credit impairment and restructured loans.
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.
−Removed: 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: Prior to the COVID-19 pandemic, there was little or no likelihood that the Company would surpass $10 billion in total assets for several years.
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.
−Removed: 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: To the extent the COVID-19 pandemic continues and the government response to it continue in the same or similar manner, the Company has an increasingly heightened possibility of exceeding $10 billion in total assets at December 31, 2020.
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.
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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 half of 2020.
+Added: Additionally, the economic pressures have contributed to an increased provision for credit losses for 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;
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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.