Q1 2020 Earnings Call

Good morning, and welcome to Washington Trust Bank or pinks conference call. My name is Chad. I will be your operator today. If participants need assistance during the call. At any time, please press star then zero participants interested in asking a question at the end of the call should press * then 1 to get into the question queue today's call is being recorded. And now I would like to turn the call over to Elizabeth the Apple Senior Vice President Chief marketing and corporate Communications officer, please go ahead.

Thank you. Chad. Good morning.

You're welcome to the first quarter 2020 conference call for Washington Trust Bank or pink which trades on the NASDAQ under the symbol wash. We'd like to remind everyone that today's presentation may contain forward-looking statements and actual results could differ materially from what is discussed on today's call are complete Safe Harbor statement is contained in Washington Trust earnings, press release and other documents. We file with the SEC. We encourage you to visit our investor relations website at to review our Safe Harbor statement and other public filings today's call will be hosted by Washington Trust executive team net handy chairman and chief executive officer. Ron osberg senior Executive Vice President and Chief Financial Officer and Treasurer who will review our first quarter performance as well as the banks preparedness response in the impact of the covid-19 pandemic at Birth.

Conclusion of their remarks president and chief operating officer will join net and Ron for a question-and-answer session Bill Ray our senior Executive Vice President and chief risk officer will also be available to answer questions about the new Cecil accounting standard which went into effect on January 1st, 2020 for the health and safety of our executive today's call is being held virtually as our executives are participating from remote locations. We appreciate your patience during the call as there may be delays in audio as we transition between speakers and now I'm pleased to introduce watching them chairmen and CEO net handy, Ned.

Thank you very much Beth. Good morning everyone and thank you for joining us on today's call as Beth mentioned today's call is a bit different for us is we've been working remotely since March fortunately, we're all healthy and hope that everyone on today's call is doing well and that your families are all safe and healthy this morning. We released our first quarter earnings. But before I review our performance, I like to spend a few minutes discussing of Washington Trust preparedness for and response to the covid-19. Pandemic Washington Trust is weathered many storms during our 220 plus year history has always been there to help our employees are customers in our communities through difficult times the covid-19 pandemic has caused an unprecedented disruption to our economy and is likely changed our lives forever.

Today, I'm proud to report that Washington Trust team is here. Once again to help those who have been impacted by the covid-19 demek. I couldn't be more proud of the way. Our team has come together to recognize the severity of the crisis establish appropriate measures to manage all aspects of its impact on our community and to take all necessary and prudent steps to protect the well-being of our employees and our customers with approx 90% of our non Branch staff is now working remotely from home offices and kitchen tables. They've adapted to a new life work balance juggling video conferences and online meetings while homeschooling unschooling children and caring for elderly family members, despite all the necessary adjustments. It has been a seamless and successful transition. This didn't happen overnight or by chance Washington Trust was prepared as news of the covid-19 virus spread we quickly put our business continuity in pandemic plans into action first and foremost was the health and safety of our employees and customers

We identified employees working in.

Operational areas and separated them physically, we closed Branch lobbies and promoted alternative delivery channels such as drive up digital and telephone banking services. We offer to appointment only services for those customers who need access to safe deposit boxes closings or other services Bank employees were redeployed to assist areas of the bank that needed additional support to service customers. It has been an honor to recognize our employees who remain on site to assist customers and ensure our bank continues to run as smoothly as possible. We consider them our First Responders and the Frontline Heroes of banking money. We've made significant investments in technology in recent years, and those Investments have paid off.

We've effectively managed excuse we maintained our service levels as our employees communicate engage with co-workers and customers by telephone email and through video-conferencing a Community Bank Washington. Trust plays an important role in the communities. We serve as the health Crisis began to impact our area. We made a financial contribution to the United Way of Rhode Island's covid-19 response fund and provide donations to our local community food pantries to help our neighbors in need. We worked one-on-one with consumer mortgage small business and Commercial borrowers to provide payment deferrals business line increases their needs-based payment relief, as of today, we've documented deferments on 250 loans with $199 million dollars in outstanding balances. Ron will provide more detailed information and we'll be happy to answer any questions you may have on deferments.

In addition when the SBA announced the paycheck Protection Program on March 31st, Washington Trust responded. We pulled together a team of employees from throughout the bank put a process in place and and we're ready to take the application on April 3rd. When the program started in Phase One Washington Trust secured SBA authorizations for 762 borrowers existing and new totaling $160 million wage. As of today. We have a phase two pipeline of $682 totaling $58 million dollars. And again, Ron will provide more detail on PPP in his comments.

Washington Trust response to the covid-19 has been nothing short of extraordinary and I am tremendously proud of the commitment Spirit of teamwork and genuine sense of caring that our team is displayed during a crisis while it's uncertain when this pandemic will be over. We're looking forward to the time when businesses reopen employees return to work and the economy gets back on track as of now, Rhode Island Governor taken an aggressive position and stay-at-home orders have been extended through May 8th. We will continue to work closely with health and government officials and future decisions will be made based in the best interest of our employees customers and communities.

Having highlighted are deferment and PPP activity. I want to make a general comment about credit our commercial portfolios. Our local uncomplicated. Well secured conservatively underwritten back on solid relationships are consumer loan book is local high FICO below 70% LTV and secured by homes.

Ron

Add some more portfolio details in his comments. And again, we'll be glad to ask any answer any questions you have. So let me turn to the first quarter results. Ronald presented detailed financial review. So I'll keep my calm really high level Washington Trust reported net income of 11.9 million or $0.68 per share for the quarter which is down from the previous quarter due to several extraordinary events, including the implementation of Cecil County methodology. The federal reserve's continued interest rate cuts the historic stock market decline and the covid-19 outbreak

Total revenues were up 8% from fourth quarter and we were on track to have another good quarter were it not for the previously mentioned events. Let me take a few moments to to describe some of the highlights from the cork total in Market deposits reached a record 3.3 billion at March 31st, 2020 deposit generation remains an industry challenge. So we're pleased we were able to attract a good mix of core deposit. We also lowered money market and certificate of deposit rates in order to ease Marjan Marjan pressure.

Turning the lending. We reached an all-time high 4.1 billion in total loans at March 31st, 2020 led by growth in the commercial and residential mortgage portfolios commercial break and quarter was split evenly between Greene and see and I with twenty-five million of the combined 140 million in growth due to increased line utilization. The current commercial pipeline is somewhat reduced given an increased level of caution in the market on both the lender and borrower sides.

A Residential Mortgage area had a strong quarter as low interest rates bird origination activity demand remained strong throughout the quarter despite fears surrounding the spread of the covid-19 virus off. This continues to be a good story for us and is a great example of the benefits and importance of our Diversified business model in generating income during difficult economic Cycles turning to wealth management. It's under administration were down from your end primarily due to the decline in the financial markets in March corresponding with the fear of the spread of the covid-19 virus. We're working closely with our clients to age and guide them through these difficult times. But this time I'll ask Ron to join us and provide a financial review of our results Ron and you can good morning everyone. Thank you for joining us on the call today. I'll review our first quarter of 2020 results in more detail is Ned mentioned net income was 11.9 million or $0.68 per diluted share for the first quarter dead.

It's compared to 15.5 million and 89000 cents per share West quarter.

Income of 432.6 million increased by $608,000 or 2% The net interest margin was 261 unchanged from the fourth quarter fee income from be paying a prepayment penalties was modest in total $225,000 compared to $189,000 in the fourth quarter income and margin were affected by the decline in average Libor rates during the quarter as compared with Q4.

The average balance of interest-earning assets increased by $164 million. I don't think two quarter basis average loan balances were up by 137 million all average investment Securities were up by 31,000 the yield on earning assets decreased by ten basis points from the fourth quarter to 3.76% do to lower Market interest rates on the funding side average in Market deposits wage by $49 million while the average balance of wholesale funding increased by $170 million the cost of interest bearing liabilities declined by 12 basis points to 1.41%

Non-interest income comprise 38% of total revenues in the first quarter and amounted to nineteen point nine million up by 3.3 million or 20% from the fourth quarter welcome revenues were 8.7 million down $205,000 or 2% due to a 376000 or 4% decline in asset-based revenues, which was partially offset by seizing a tax-related revenues of $171,000. The decline an asset-based revenues wasn't line with the average balance of assets under Administration which decreased by $239 billion or 4% during the quarter the March 31st end up. Balance of assets under Administration total 5.3 billion down $898 million or 14% from December 31st may result. There's a client in financial markets late in the quarter.

Our mortgage banking revenues total of 6.1 million and the first quarter a record-high the linked quarter increase of two point four million or 66% reflected an increase in the mortgage pipeline in a corresponding increase in the fair value of mortgage loan commitments and Loans held for sale as of March 31st, the increase was partially offset by a lower sales volume in sales yield on loans sold in the secondary Market mortgage loans sold told 162 million in the first quarter of 2020 down by $14 million of mortgage origination pipeline at March 31st was approximately 330 million up by almost 90% since the end of the year.

One related derivative income amounted to two point five million in the first quarter. This was up by one point three million or 120% from Q4.

Now let me turn to nine interest expenses. Total expenses are up by one point seven million or 6% in the fourth quarter. The linked quarter change was impacted by a couple of items in the first quarter wage a contingency reserve of approximately $800,000 largely due to a potential loss associated with counterfeit checks to run on a commercial customer's account this arose at the end of March and remains under investigation in this item was included in other non-interest expenses in the fourth quarter or write down adjustment on an Oreo property of 1 million dollars was recognized classified. In other assets, excuse me, another expenses. Also in the fourth quarter FDIC assessment credits of $235,000 were recognized these credits are all fully utilized 2019.

excluding the impact

Of these items nine interest expenses for the first quarter increased by one point seven million or 6% on a linked quarter basis reflecting increases in salaries and employee benefits expense as well as outsourced service expense salaries and benefits were up by one point 1 million reflecting Merit increases in payroll tax resets associated with the start of the new calendar year Outsource Services expanse was off by $248,000 from the preceding quarter. Mainly reflecting volume related increases in third-party processing costs related to customer derivatives.

Income tax expense total 3.1 million for the quarter and the effective tax rate for the first quarter was 20.9% down from 21.8% for the prior quarter. We could expect our effective tax rate to be above 20.5% for 2020.

Turning to the balance sheet total loans were up by $197 million or 5% compared to December 31st and up by $352 million or 9% from a year ago residential wage increase by $61 million or 4% This included purchases during the quarter of $51 million total commercial loans were up by $140 million or 7% in the first quarter the commercial real estate portfolio increased by seventy million in the cni portfolio also increased increased by seventy million.

Included in CN I was a single significant line advance of $25.

Other than that one commercial Advance line utilization for both commercial and home equity on flat since your rent investment Securities were up by eighteen million or 2% in the first quarter. We purchased a hundred and sixteen million of agency mortgage-backed Securities total Securities represented 16% of total assets had March 31st in Market deposits were up by sixty million or 2% from the back quarter and buy $254 million or 8% from a year ago wholesale brokerage CDs were up by $147 million and fhlb borrowings were up by $57 million dead drink to ask a quality. We chose to proceed with the adoption of Cecil and q1 this resulted in a day one transition adjustment of 6.5 million or 24% off for loans in one point five million for unfunded commitments as compared to December 31st.

These increases to the allowance resulted in a six-point 1 million dollar after tax decrease to retained earnings in the first quarter of provision for credit losses of 7 million was charged earnings approximately 6 million of this was an adjustment attributable to the significant change in the economic forecast due to covid-19.

We use the Baseline unemployment rate forecast for Moody's covid-19 economic scenarios published on March 27th for our Cecil modeling continued uncertainty regarding the severity and duration of life and down making related economic effects remains, and it is unclear to what extent various governmental initiatives will be able to mitigate future credit losses.

I'm performing assets declined by $571,000 from the end of Q4. This included a one point 1 million dollar decrease in oreo as we sold our one large commercial property at essentially break-even thought this was partially offset by $510,000 increase in non-accrual loans not approve loans were 44% of 44 basis points of total loans compared to forty five basis points that year range and Loans past due 30 days or more or 40 basis points of total loans flat compared to your end that charge off of 623000 more recognized in q1 compared to net recoveries of 18,000 in Q4 and the allowance for credit losses on loans total 39.7 million or 97 basis points of total loans and provided npl coverage of 251%

Total shareholders' Equity was $500 million up by five million, since your end Washington's remains. Well capitalized with a total risk-based Capital ratio of 12.42% off Isabel Equity to tangible assets ratio of 7.89% And our first quarter dividend Declaration of $0.51 per share was paid on April 9th.

Finally, I'd like to provide some details concerning our overall loan portfolio where we see some covid-19 exposure and where we stand and our customer assistance efforts.

It's Ned noted. We have a simple local and secured portfolio of loans that year-in and year-out has performed. Well from a credit standpoint this quarter. We added commercial real estate and tire rotation tables to our release and you will note that. We have no exposure to credit cards Auto or student loans loan deferments as a Friday to $199 million or 5% of money outstandings. This includes commercial real estate of 114 million or 7% of Curry outstandings cni of twenty six million or 4%

Mortgage of $57 million or 4% of that portfolio in consumer at 3 million or 1% taking a deeper. Look at segments data. I'll start with commercial real estate office in a family total 770 million and make up almost half of our portfolio between the two property types are our properties tend to be for smaller footprint. Suburban tenants are multifamily properties are solidly located enough top quality in any disruption here is likely to be short-term close deferments total approximately 4% of these two segments retail wage is 311 million. It makes up about 19% of our outstandings. Our retail properties generally have strong tenor anchored strong anchor tenants often National Grocery Store chains wage is deferments within this segment total about 10%

Hospitality and total is 137 million and makes up about 8% of our commercial real estate outstandings. We underwrite this at an LTV of 65% or less and our portfolio wage largely made up of smoke properties with national flags so far. We have closed deferments of 29% of our Hospitality loans. We have two properties under construction that are planned for opening a club here both appear to be on track for completion Healthcare has total outstandings of 115 million or about 7% of total. Carry. This is composed of senior housing nursing homes while there will be short-term disruption and senior housing. We expect that. This sector will continue to be attractive actual deferments at this point are 8%

and then

In construction, there are currently about 50 active construction loans with 337 million and commitments 52% of which had been drawn for the most part. We expect these projects to proceed with no projects have been shut down because of covid-19. We generally get significant upfront cash from our borrowers or any deals that have yet to find will only occur of preceded by Equity. We have never had a loss in our construction portfolio given are careful underwriting and strong Partnerships. Now turning to C. And I our portfolio is very diverse being spread across a dozen or so Industries not have which thankful energy related educational services at $59 million makes up 9% of total outstandings. These schools are well secured but obviously have cash flow will be a short-term concern and the effects on education in general are yet to be determined we have no deferments at this time.

Accommodation and Food Services totals $44 million and makes up 7% of the portfolio with 24% of that being deferred over 50% of this segment is in a single Credit in the gaming sector in that credit is not deferred at this time.

The deferments are related to a variety of restaurant and food establishments educational Recreation totals $30 million. It makes up 5% of the portfolio 4% of these loans are deferred wages. Just sector consists largely of golf courses in marinas in the deferment. So largely the golf course has the largest categories Healthcare which consists of medical and dental practices orthopedic surgeon Imaging et cetera. The deferral rate on this portfolio is less than 1%

As I previously mentioned we had processed residential deferments totaling $57 million and comprising 4% of outstandings. The average size of these loans is $515,000 and they have an estimated current LTV of 63% in terms of other customer assistance, as of Friday. We had underwritten 762 SBA approved loans under the PPP program, totaling $1,000 million at an average size of two hundred nine thousand. We have another fifty eight million in process for phase II net fees related to SBA approve loans are estimated to be about $4,000 in phase two would add about another one and half million. The average fee on these loans is 2.6%

And at this time I will turn the call back Jeanette.

Thank you, Ron. These are extraordinary times for sure, but we believe Washington Trust is well positioned to handle the challenges and repercussions resulting from the covid-19 pandemic. We have a strong Capital position back in business model with Diversified revenue streams discipline credit culture with historically strong asset quality and an experienced leadership and management team dedicated to achieving continued corporate profitability wage growth and shareholder returns. So this concludes our prepared remarks and chat. If you wouldn't mind we can open up the lines for questions. Thank you. We will now begin the question-and-answer session to ask a question. You may press * then one on your telephone keypad, and if you are using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press the start then to at this time. We will pause momentarily to assemble our roster.

And the first question will come from Mark Fitzgibbon with Piper Sandler, please go ahead. Hey everybody. Good morning. Good morning, Mark.

Good morning. Good. I wondered if first offer he'd give us any more color on that $800,000 Reserve you set up for in the quarter related to the the check fraud any any specifics on industry or something happened there? Yeah, run wanted to go ahead and yeah, so Mark, you know, the matter is still under investigation and we're still researching the fact pattern. I can tell you it was isolated to a single a long-standing relationship with the valued commercial customer. You know, it's not systemic. It came up very late in the quarter. So, you know, we set up a reserve that we felt was prudent under the circumstances but we're still we're still working on the details we can we will provide some updates as they become available. Okay. Thank you. And then second run. I wondered if you could help us think about the margin obviously you'll have some you know, drug the margin from the PPP loans and in the second quarter that's sort of knocking down a you know, two fifty-three to fifty-four in that kind of a range and then it comes back as you push those off the balance sheet. Is that wage?

Do you think about it? Yeah, so I I think the thing that we're most concerned about is the hundred and fifty basis point the FED funds cut that happened in March which you know, some of that was anticipated I think in our light bar over the course of the quarter, but but most of its not reflected in the margin yet. So I would say just on that basis of loan we have about 2 billion dollars of prime and libor-based loans that would have reset on April 1st. We will offset that with replacing on a bunch of our wholesale and and uh wholesale funding and promotional offers starting in the second quarter, but we're probably looking in the low 240s voted to Mid 240s, I think for for Q2. This is X Club of anything related to to PPP. We'd expect that to stabilize in the third quarter and and we'd start to get a little margin expansion in the fourth quarter, but that's kind of wage.

Is and so PPP, you know, it doesn't have much of a spread but it does have some fees related to it. Those are being amortized over the edge of the loans, which is initially two years, but we expect most if not all of that to be, you know prepaid so forgiving in the second quarter. So those fees could be running through the margin in a second quarter and then the program could be over. So I I don't we're not seeing any kind of sustained impact on the margin related to p p p

Okay, and then lastly of the $125 million of client outflows in the wealth management business this quarter how much of that was related to the previously disclosed staff that had left.

So set by 73 million.

So, you know, we're thinking that we're we're pretty close to the end of that, you know, the 73 million was kind of earlier in the in the first quarter and the the attrition has really slow. I would say most of the run-rate impact is is baked into the first quarter results. I'd say maybe there's an extra fifty thousand struggling into two based off and what we know right now.

It actually just one more if I'm eggs in terms of your Capital ratios. How are you thinking about those does does it make sense to slow growth a little bit to conserve Capital given, you know the uncertain time.

Yeah, so, you know, we we look at you know, we look at our Capital Management very carefully by the way would say we we have no plans to adjust the dividends. So the dividend is we feel that a sustainable level we did do a modest level of share repurchases in the first quarter about four million dollars worth and and then we suspect that once things started to look a little more uncertain because of covid-19 and well, we'll come back and revisit that at some point in the future if that makes sense. We think that we have ample capital and and expected earnings going forward to support the growth that we have.

Thank you.

Thanks, Mark. And the next question comes from Damon Demonte with KBW, please go ahead.

Hey, good morning. Everyone. Hope everybody's doing well these days first question is kind of more of a housekeeping item around Ron. Could you just repeat the the details on the PPP again? The number alone know the dollar amount and the fees for the first round. Yeah, 762 borrowers 7062 for a hundred and sixty million Damon and and the fees, you know, so the the fees are tiered according to loan size and then you know, there's possible that there are some agent costs associated with that. So, you know, we put a little estimate in for that but on a net basis we're saying, you know, maybe just over four million Acres trench and then you know, we'll see what happens in phase two.

Got it. Okay, that's helpful. Thank you. And then you know, the The Mortgage Banking was was very strong. And I think you guys commented that the pipeline was around 330,000 going into the second quarter. What are your your expectations? Do you think you could replicate what you did in the first quarter here in the second quarter? Yeah. It's a little hard to say faith in Mark. Maybe you can jump in in a second. But you know, so the way our our Revenue recognition works is it's really geared more on the origination side because we've got the hedging program and we we have the cash value of counting that we're doing. So those origination will eventually convert into sales in the second quarter. So I would expect a good sales revenue quarterback. Yeah. I mean, yes, it should be a strong quarter. I don't know if it will be, you know quite as much revenue as we booked in q1, but the activity is very strong.

It's remains.

To be seen how long that will sustain and and that's Mark. I don't know if you have any any sense on that.

Thanks for calling. Yes. This is Mark and Damon. You mentioned the size of the pipeline. It has remained. Very robust roughly 70% of it is referred for refinance versus purchase activity and accordingly about 70% of it is saleable as opposed to Destin to the portfolio and we tend to work through our portfolio about 75% off to saleable would close in thirty days or less in New England in general. And in the Boston Metro Area Housing has been surprisingly robust. There is still strong demand for housing and uh while we expect that social distancing will cause purchase activity to slow down as we had the second half of the year. Um, it does look like the second quarter will remain a strong one as we work through the large amount of refi that is going through the pipeline the second half of the year is really anybody's guess as to how covid-19.

You to affect the residential housing business, but at least for the second quarter, we bill it will remain strong. Got it. Okay, thanks. I appreciate that color. And then how about in terms of the derivative income that you guys are are are seeing you think that is that pipeline remain healthy. Do you think that will kind of pull back a little bit from this level? I suspect that we won't maintain that level I think you know, it's probably more reasonable to think that going forward more similar to what we did last year.

But we certainly had a kind of a knockout first quarter on Swap income.

A lot of it's going to depend on on Commercial loan, you know origination is going forward.

Yeah Damon, it's Ned just to add a little bit that the commercial pipe lines are down a little bit. I think there's caution on all fronts. And and so and we've we've swapped a lot of what was available to to swap. So we're working with a lot of those borrowers and and deferments and and putting putting lines in place to help them with with swap payments to keep the swaps intact, but I think that additional fees will will probably slow down a little bit just based on General volume.

And then did you say that the a good portion of the cni growth? This quarter was was tied to a a single borrower who chewed on on a line of credit.

That yeah, just yeah one one borrower local one of the participation is that were in to down on their line of credit. So all of that was in one borrower and was that in, you know response to their own personal response to to covid-19 or is this related to a project that they were working on? I guess a different package that was anticipated or expected or this kind of just come out of out of the blue, you know, mid March.

I would

Say it was is covid-19 related wanting wanting to have liquidity on hand for what what may come you know that we're very close to the to the bar where they're in. They're in an industry. Thursday is closed. So so they wanted to have cash on hand, but it's it's not related to any specific project. Got it. Okay, that's all that I had for now. Thank you very much.

The next question comes from Eric with owning and Scattered, please go ahead morning. Good morning. Everyone first. Maybe just trying to think about us management Revenue going forward. The first quarter was it was buoyed a little bit by the tax preparation fees. I think it was $171,000 and you know majority of those fees are generated by assets, um sizes and curious are those calculated on an average size or a. End just curious. You know, how how much of the decline was reflected in the in the first quarter number the decline in it in the markets awful. Yeah. So I I would say, you know on a technical basis. It's probably a mix but I think for your purposes I think of it on an average basis. So yes, we did not feel the full brunt of the market correction within our our revenues in the first quarter that being said, you know markets have rebounded thus far in April so, you know a good you know, good bit.

Of that downturn has has reversed. Um, you know, what What markets do between now and the end of the quarter is anyone's guess at this point, but I think it's fair to say that that rep would be lower in Q2 than than q1 just based on what we've seen.

And this is just for some just for some color on the underlying segments of the base for purposes of God, you know broad classes a little less than 50% with the equity based little more than 35% and fixed income about 9% and can pay the remainder and other asset classes. So well, the blue button Equity markets is certainly going to capture most of the reason for decline on a little more than a third is fixed income. And as Ron had noted to the average balance is for the quarter were down about 4% But.. First quarter versus fourth quarter was down by more so long

That's helpful. I appreciate the additional color there with regard to the the PPP program. I appreciate the color on the number of remaining kind of borrowers and application remaining value there just any confidence in your ability to fund all those I've seen some wild pictures this morning in the media with cars lined up around the block that banks with drive-thrus if people trying to get in their applications, I'm sure kind of accruing those applications even after phase one ended but just again kind of curious about your thoughts of funding that remaining fifty eight million. You've gotten your your pipeline that that's a great question or it's Ned. Yeah. So the whole the whole program has been a little bit on the Run hasn't it? And and we have we have people that have been geared up and ready to go. Obviously the the starting bell went off at 10:30 this morning. They were ready to to input as many there's some talk about giving giving some of the larger institutions ability to do things more electronically than they had in the past. So it's really hard to predict birth.

How long this particular?

Your pool is going to be available. And and how the SBA is going to sort through the the just flood of of applications that they're that they're bound to get. We we we're as ready as we can but we've got, you know more than 650 applications lined up ready to go. They're they're generally smaller in size. We're trying to take care of local small businesses as as is our job, but we'll we'll have to see I don't we don't know how many there's a pool that's that's reserved for smaller Banks sixty billion off. So, so maybe that will be enough protection from from the the larger Banks, you know, flooding the flooding the process but but look at the end of the day, this is about getting money to customer or so as long as as long as as many customers as possible get money whether there are customers are others customers that that's the key and we'll do as much as we can to to get our customer.

Access to the program in a sensible way and and we'll see I think we'll probably know the answer to that question and Forty-Eight Hours.

This time around thank you for calling be right. Yeah, it seems like it's going to go that's around. We'll go fast too. Yeah, and then thanks for the additional break out in the press release with the Korean balances. That's helpful. I guess with regards to that the hospitality segment of your portfolio. Do you have a a sensor? Do you have the numbers of what percentage is in in Providence? And I guess the reason I'm asking is you may have seen over the weekend Brown University put out a proposal for for reopening in the fall and mentioned that they would potentially utilize, you know, kind of local area hotels there for you know, certain certain uses wage kind of with the with are reopening plan. That that may benefit. I realized it's still kind of a proposed on a long way out but curious about your exposure there. Yep. So so we have a little bit in in Providence wage of our construction projects is in Providence. We've got some some area Hospitality. I'm looking at the listing up 21% of it in the birth.

In in the greater in the Rhode Island Marketplace, not the Providence Marketplace very little of it in downtown Providence today. But as I said, we've got one in in in process, we've got 5% of the bulb or five or six million dollars is in Warwick Rhode Island near the airport. So we don't have a huge. We don't have a huge exposure. We've got some coverage in Rhode Island and and if Brown open up that that will be helpful though. The one that that is under construction is is right right near the brown medical schools. So we're we're Ground Zero for for anything that goes on up around.

Great. Thanks for taking all my questions. Not at all. Thanks, sir.

Once again as a reminder, if you would like to ask a question, just press star and one next question is from Lori hunsaker with compass point, please go ahead.

Yeah.

Okay. Thanks. Good morning. I wonder just going back to the the cni the $25 dry. I'm looking at this table and it looks like where you have the big increase here was a combination of services is that the category that it came from? Yes. Yes and is is gaming in that category or does gaming fall down and entertainment and Rec?

We have it in that category you have it in. Okay. Was it a gaming loan or can you say or

Yes, okay. Okay fair and then just going back in again. Also, just want to Echo that really appreciate the detail going back up to commercial real estate office. I heard you say that your hospitality or hotels were 65% LTV. Do you have what else TVs were on just a few more categories? You have multi-family retail and Healthcare in an office.

Or if not, I can follow up with you offline. Yeah, we can follow up in our our credit policy is is we can certainly give you and Bill raised on the phone bill. I don't know if you've you've got our our policies. So so we don't we don't update ltvs in the commercial portfolios frequently as we do in the consumer side, but Bill, do you have a comment on?

Under it TVs never exceed 75% for multifamily 70% for other classes other than lodging and $65 for lodging. So the actual TV's today would be under those just because of the way they get under it and with Trends in value, but we can't give you a spot number for right now.

Okay. I'm I'm certainly I can follow up with you. I was looking for Colonel TVs. I guess the same question on residential and a home equity if you happen to have current LTS on your portfolios there and also a average psycho. Yeah, where is the current ltvs on residential's 58 FICO. So I've got you know, three three buckets of categories over 650. We're at 57% 662 750 is 36%

Under that is the 7%

Okay, and then do you have come back with you as well?

I yeah, I don't think I have that separately. Okay. I'll I'll follow up with you up on okay and then on on CNN I do you have any leverage loan very little hlts. We have a handful.

Yes, I think we have three relationships all of which are local and a couple of those are shared National Credit. So very modest exposure I think on the border of six million or so.

Okay, great. Thank you. I'll leave it there. Thanks, Lori.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over the net handy for any closing remarks. Thank you. I appreciate your taking the time this morning, and I certainly hope that all of you are well and stay well, and these are these are unusual times and we appreciate your patience with us in this remote fashion. I'm sure most of them remote as well. So we're all we're all getting used to the new world order, but but thank you for being with us this morning and and yes, you know how to get to us, and if there are other questions would be happy to answer them, but, but again, thank you. Have a great day and we'll talk to you soon.

And thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Thanks Chad.

Dead dead dead.