When the COVID-19 pandemic started, Neffs National Bank wasn’t an active Small Business Administration lender.
But, after a short learning curve that quickly changed and now the bank has been honored for its work in helping people obtain SBA Payroll Protection Program (PPP) loans by the Pennsylvania Association of Community Bankers.
The bank received the organization’s Inspire Award for coming to the aid of the small businesses it serves in the community.
Marianne Eisenhauer, vice president of commercial lending & credit administration for Neffs, said the bank is proud of the way it was able to help so many small businesses, and gain customers in the process.
“Our phones were ringing off the hook with current customers asking us to help them with the PPP,” she said.
The problem was that bank’s staff wasn’t familiar with the SBA lending process used for the forgivable loans. “It was challenging because we had to learn the process,” she said. “We had to find a way to get up and running and provide those loans to our customers.”
Once they were able to figure the process out, the bank’s lenders worked directly with small-business owners to help them to obtain the loans and make it an easier process.
She said many of the bigger banks weren’t offering such hands on service, so some of their current customers recommended Neffs to other business owners to get the help they needed. Because the bank was working directly with the SBA and not a third party vendor, they were able to get the money to their customers quickly.
“It was a lot of work, but in the end we got a lot of new customers because of it,” Eisenhauer said.
In all, Neffs helped obtain 370 loans for community businesses to help them maintain payroll and stay in business during the shutdown. One of those companies was a community pharmacy that used its PPP loan to keep its employees on payroll and a few months later were providing COVID vaccines in community.
Neffs National Bank said it has hired some local banking veterans to run the new branch it is opening this spring in Walnutport. It’s the first branch the bank will have outside of Neffs.
The branch will be in the former National Penn Bank building, at 211 Best Ave., (Route 145).
Pearl A. Sheckler has been hired as branch manager and Michelle Fillman as assistant branch manager. Sheckler brings more than 25 years of experience in community banking, many of them as a branch manager. Sheckler is a current member of the Jim Thorpe Area School District School Board. She resides in Jim Thorpe.
Fillman brings more than 30 years of experience in banking. Her experience includes branch operations, management, lending and customer service. She currently resides in Walnutport.
The new Walnutport branch is about 2,100 square feet. The bank will employ between five and seven people.
Formed in 1923, The Neffs National Bank has about $370 million in assets.
State lawmakers are pushing to expand a program giving tax breaks to companies that donate to nonprofit educational and scholarship organizations, including private schools.
But the governor is pushing back. This month he vetoed a bill that would have expanded the popular program, known as the Educational Improvement Tax Credit program, arguing that the state couldn’t afford the loss of revenue when it was struggling to fund the basics for public school education.
The bill would have expanded the amount of credits per year from $110 million to $210 million, and usher in future increases. Gov. Tom Wolf estimated that the bill would have cost the state $650 million over the next five years.
Loss for a ‘win-win’
Many Pennsylvania companies tap into the tax-credit program, often known by the acronym EITC. It was enacted under former Gov. Tom Ridge.
Under the program, companies donate to nonprofit programs that provide scholarships or to educational improvement organizations, which include private and parochial schools.
Businesses apply for credits, which reduce their state taxes, and the applications are approved as they come in until the limit is reached. That means not all applications are approved.
A business can donate up to $750,000 per year under the program – but only if there are enough credits available.
Still, supporters call the program a “win-win” for corporate donors and the recipients of their donations, and say they hope elected officials can reach a compromise so the program can grow.
Kevin Schmidt, president and CEO of Neffs National Bank in North Whitehall Township, said donations made through the EITC program can help pick up where public education falls short.
“A lot of things just aren’t getting funded by the state budget,” he said. “There are educational foundations out there that are looking for additional funding.”
While there are nuances to how the tax-credit program works, the most common application is for a two-year commitment to donate to a program.
At that level a company get a 90 percent tax credit on the value its donation.
New Tripoli Bank, for example, has made two-year commitments to make $100,000 annual contributions to the Northwestern Lehigh Educational Foundation for the past 10 years.
“The foundation comes to us with ideas and projects outside the normal district programing,” said David Hunsicker, CEO of New Tripoli Bank in New Tripoli.
One recent projects involved buying computers and establishing an IT lab for the school district.
The bank, in turn, earns a $90,000 tax credit on its state tax bill.
So there is an advantage to a business, but at the same time Hunsicker noted, the $100,000 donation represents money the school district didn’t have to find in its own budget.
“I think any dollar you spend on education is well spent,” he said.
The role of the tax credit in spurring donations is unclear.
Anthony Deutsch, a CPA and shareholder at Concannon Miller in Bethlehem, said he was unsure how many businesses would forgo education-related donations in the absence of the tax credit.
Some might still give, while others may give to different charities or to charities in states with more generous incentives.
Regardless, he said, it also boosts the efforts of companies that already are giving.
“It does give us a bigger bang for our buck when we’re donating to these organizations,” Deutsch said.
Nonetheless, he said, the bang is not quite as big as it used to be as a result of the 2017 Tax Cuts and Jobs Act. The law changed the way companies can claim donations.
Under previous law, Deutsch said, a company making a $10,000 donation would get a $9,000 credit on its Pennsylvania taxes, but it could claim the entire $10,000 as a charitable donation deduction on its federal return.
Now on its federal return, a company can only claim the $1,000 it didn’t get as a Pennsylvania deduction.
Still, even without the added federal benefit, Deutsch said most of his clients who had been participating in the EITC program have continued to do so.
But, he said the program benefits businesses and an expansion would allow more businesses to participate.
Deutsch believes there are enough companies and educational organizations interested in the program to justify an increase.
Hunsicker said New Tripoli Bank is looking at expanding its participation in the EITC program. It has opened a branch in the East Penn School District and would like to make donations there like it has done in Northwestern Lehigh.
The fate of the proposed expansion could be decided during negotiations over a budget for the next fiscal year, which starts July 1. The legislature does not have a two-thirds majority to override Wolf’s veto so it would have to work with the governor to get a bill signed.
Two of Wolf’s main sticking points – besides the cost of the program – were the income limits on scholarship recipients and the program’s accountability.
The bill would have raised the household income limit for scholarship recipients from $85,000 to $95,000. Wolf said that would further distance the program from the low-income children for whom it was designed.
He said he also wants more information provided to the state on where the money is going and the outcomes.
“The EITC lacks proper accountability and oversight, and little is known about the educational outcomes of students participating in the program due to a reporting loophole in the current law,” Wolf said in a statement accompanying his veto. “Even less is known about the scholarship organizations that retain up to 20 percent of each dollar that is supposed to pass through them.”
The housing market, which started the year slowly, is picking back up, according to bank and mortgage lenders.
Spring has brought with it a flurry of activity, with homes popping into the market quickly and being sold in the blink of an eye.
But executives say there are still challenges, such as a drop in mortgage loans, limited inventory, stiff competition among homebuyers and a dip in sales on higher-priced homes.
“The local housing market remains a mixed bag. In some local markets, there is very high demand and limited supply causing a seller’s market,” said Kevin Schmidt, president and CEO of The Neffs National Bank in North Whitehall Township.
“In other areas, sellers are holding out for higher prices, causing a slowing market,” Schmidt said “The Neffs National Bank has seen a decrease in mortgage loans versus this time last year.”
But he is optimistic about the future.
“We believe an increase in inventory, reduced prices and continued low rates could spur (home) purchase demand. Mortgage rates remain low,” Schmidt said.
At the end of May, the average interest rate on a 30-year fixed mortgage was 4.23 percent, according to the Mortgage Bankers Association, a national grade group.
One of the biggest drags on real estate has been a lack of homes for sale.
Jeff Scheuren, president and COO of Lancaster-based Fulton Mortgage Co., estimated that housing inventory in the Lehigh Valley is down 10 percent from last year at this time, with buyers competing against each other aggressively for houses. There are fewer homes up for grabs in the mid-range market, which he defines as homes in the $275,000 to $400,000 price range.
Scheuren noted that Realtors are competing more aggressively at a time when inventory is down in Pennsylvania – especially in Berks County.
“First-time homeowners are getting pre-qualified for home loans, and they are having a hard time finding what they are looking for,” he said.
Mortgage lenders have had to accommodate contracts designed for shorter time frames.
“Why not close on a home after 30 days instead of 60 days?” Scheuren said, adding that two popular financing options are government-sponsored mortgage guarantors Fannie Mae and Freddie Mac.
Fulton Mortgage Co. is under the same umbrella as Fulton Bank and Lafayette Ambassador Bank, which have offices throughout eastern Pennsylvania.
Still, Realtors and brokers are optimistic.
“Maybe the housing market is not as euphoric as it once was, but I definitely do not see any indicators of a slowdown,” said Larry Ginsburg, president and owner of Berkshire Hathaway Home Services Regency Real Estate in Allentown.
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