United Community Bank describes PPP effort

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A large majority of the state’s banks spent huge amounts of time over the last two weeks working with about 39,500 N.C. businesses that landed a combined $8 billion through the Paycheck Protection program as of last Thursday. While the bulk flowed through the state’s largest institutions, many community banks also played a big role in getting money to businesses of less than 500 employees that have pledged to retain workers through the current economic crisis. 

An example is United Community Bank, a Blairsville, Ga.-based institution that has 31 branch offices in North Carolina. It approved more than $125 million in loans for about 1,100 businesses, representing an average loan of $150,000, says Jim Rose, the bank’s Raleigh-based N.C. president. With the money expected to be mostly spent on personnel costs, the average borrower for UCB has a monthly payroll of about $62,500, he estimates. “The majority of our loans were truly to what everyone would think of as a small business.”  

Virtually all of UCB’s offices are in small towns, and Rose says small-business clients in those markets received most of its PPP loans. “Rural markets tend to be hit the hardest during troubling economic times, so our ability to help so many businesses outside of Raleigh and other large cities is amazing,” he says. Most of the loans went to existing UCB customers, though the bank did accept applications from any business and wound up with some new relationships.

UCB put most of its 250 N.C. employees to work on the program because of strong demand and the desire to enroll customers before the $349 billion federal program was tapped out. “It became our top priority,” Rose says.  

Nationally, about 1.6 million small business owners claimed the $349 billion with an average loan size of $240,000. That represents about 6% of U.S. small businesses.

Another N.C. community bank active in the program was Mount Olive-based Southern Bank, which processed about 2,000 loans totaling about $200 million, The Wilson Times reported.  Among the Wilson-area companies to receive loans were Wilson Eye Associates, with five doctors and about 25 support staff, and Nash Pigg hog farms and Custom Quality Packers slaughterhouse, with a combined 36 workers, the newspaper said. 

Southern Bank has $3 billion in assets and more than 60 locations in eastern North Carolina and Virginia. UCB is a $12.9 billion bank with 149 offices that expanded in North Carolina by buying Four Oaks Fincorp for $124 million in 2017. 

Under the PPP program, the government did not require banks to check representations made by borrowers as is typical in lending, Rose notes. “That helped the banks process these loans so quickly, because normally they would go through a long, intensive underwriting process,” he says. While the government wanted to get the money distributed quickly, borrowers will need to prove that the funds are spent on required purposes. “You can’t to go Las Vegas with the money, else the government will you you pay it back,” Rose says.

Charlotte-based Bank America and Pittsburgh-based PNC Financial Services were among the largest PPP lenders. 

Congress is considering adding $250 billion to the PPP program with a deal nearing agreement, some media outlets reported Sunday.  

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