Hello, and good morning, and welcome to Washington Trust Bancorp Inc.'s Conference Call. My name is Chad, and I will be your operator today. [Operator Instructions] Today's call is being recorded. And now, I will turn the call over to Elizabeth B. Eckel, Senior Vice President, Chief Marketing and Corporate Communications Officer. Please, go ahead.

Thank you, Chad. Good morning, and welcome to Washington Trust Bancorp Inc.'s second quarter 2020 conference call. We would like to remind everyone that presentation may contain forward-looking statements, and our actual results could differ materially from what is discussed on today's call. Our complete Safe Harbor statement is contained in Washington Trust's earnings press release and other documents we file with the SEC. We encourage you to visit our Investor Relations website at ir.washtrust.com to review our Safe Harbor statement and other public filings. Washington Trust trades in NASDAQ under the symbol WASH. Today's call will be hosted by Washington Trust executive team, Ned Handy, Chairman and Chief Executive Officer; and Ron Ohsberg, Senior Executive Vice President and Chief Financial Officer and Treasurer, who will review our second quarter performance. At the conclusion of their remarks, Mark Gim, President and Chief Operating Officer and Bill Wray, our Senior Executive Vice President and Chief Risk Officer will join Ned and Ron for question-and-answer session. I'm now pleased to introduce Washington Trust's Chairman and CEO, Ned Handy. Ned?

Good morning and thank you for joining us on today's call. I apologize I was on mute. We hope you and your families are doing well and have managed to remain healthy during this ongoing pandemic. Yesterday, we released our second quarter earnings, and I'm pleased to report that Washington Trust posted very strong results with net income of $21 million, or $1.21 per diluted share. This is a significant increase from $11.9 million in net income or $0.68 per diluted share earned in the first quarter of 2020. With solid business continuity and pandemic plans in place, we were as prepared as we could be for these unprecedented events, but our performance was a testament to our people, and our unwavering care for our customers. On July 6, we reopened our branch lobbies to limited foot traffic and in-person meetings. Our frontline retail bankers have kept the branch operation running without pause, and have been steadfast in their support of each other and our customers. Our non-customer-facing employees who have been working remotely are gradually beginning to transition back to their bank offices. We have done an outstanding job of keeping everyone healthy while maintaining service and production levels. So, we will be cautious with our transition plans. We continue to enforce strict health and safety guidelines to ensure we are maintaining a safe workplace and to help mitigate the risk of any future spread of COVID-19. As we continue to manage through this multifaceted period of health, social, economic, and political unrest, the depth of which none of us have seen, we take comfort in careful planning, deliberate execution, and common focus on being a part of an expedited resolution to the issues we all face. In addition to highlighting the dedication of our people, our second quarter…

Thank you, Ned. Good morning, everyone, and thank you for joining us on the call today. I'll review our second quarter 2020 results in more detail. As Ned mentioned, net income was $21 million or $1.21 per diluted share for the second quarter, as compared to $11.9 million and $0.68 for the first quarter. Net interest income of $30.9 million decreased by $1.7 million, or 5% from the preceding quarter, the margin was 231 compared to 261 in the first quarter, the income from prepayment penalties was modest and totaled $21,000 compared to $125,000 in the first quarter. Net interest income and margin were negatively affected by the decline in LIBOR during the quarter as compared with Q1. The average balance of interest earning assets increased by $357 million on a linked quarter basis. Average loans were up by $261 million, and average cash and short-term investments were up by $74 million. The yield on earning assets decreased by 58 basis points from the first quarter to 3.18%. On the funding side, average in-market deposits rose by $94 million, while the average balance of wholesale funding increased by $115 million. The cost of interest bearing liabilities declined by 33 basis points to 1.08%. Non-interest income comprised 46% of total revenues in the quarter, and amounted to $26.3 million, up by $6.4 million, or 32% from the first quarter. Our mortgage banking revenues totaled $14.9 million, a record high, but linked quarter increase of $8.8 million or 144% included an increase in net realized gains reflecting both a higher sales volume, as well as a higher sales yield on loans sold to the secondary market. Mortgage loans sold totaled an all-time quarterly high $305 million in the second quarter, up by $143 million or 88% from the first quarter. This was…

Thank you, Ron. Washington Trust response to the COVID-19 pandemic and its extended implications has been thorough, and I'm tremendously proud of the commitment, spirit of teamwork and genuine sense of caring that our team has displayed. As we move forward, there's still a great deal of uncertainty regarding the severity and duration of the COVID-19 pandemic and its related economic effects. The impact on consumers and many businesses will likely take time to fully manifest due to the powerful effect of various government stimulus programs. While we're cautiously optimistic about what lies ahead, there are many hurdles challenges and unknowns. We believe Washington Trust is well positioned with a strong capital position and ample sources of liquidity to handle the challenges that lie ahead during these unprecedented times. We thank you for your continued support of Washington Trust and hope you'll stay with us as we ride out this storm together. This concludes our prepared remarks, and now Chad, please open the phone lines to begin our Q&A session.

Thank you, sir. We will now begin the Q&A session. [Operator Instructions] And the first question will come from Mark Fitzgibbon with Piper Sandler. Please go ahead.

Guys, good morning.

Good morning, Mark.

Hey, Mark.

A couple of questions related to modeling; first, Ron, cash balances has been up a lot year-over-year, when do you think you'll see cash balances coming back down, will we see it much impact in 3Q?

Probably not, Mark. The cash balances are largely a function of our swap book. So, with our dealer counterparties, we're kind of out of the money. So, a lot of that is just posted cash collateral.

Okay. And then, secondly, and I heard what you said about the PPP impact of loan forgiveness, but excluding the impact of PPP, does the core margin sort of hang around at the current level, or do we see an improvement in the coming quarter?

Yes. So, LIBOR ratcheted down during the quarter. So, I would say our asset yields bottomed out in the month of June. We're still seeing some investment payoffs and resi payoffs, which as we replenish those, they kind of come back on at a lower yield. So, those two things will drag down asset yields a little bit, but we do think that we have quite a bit, we know we have quite a bit of variable liabilities that will re-price in the second half of the year. So, I would expect kind of the core margin for the third quarter to be comparable to the second quarter, and then we should see some margin expansion in the fourth quarter.

Okay. And then, your mortgage pipelines, could you share with us the size today?

Yes, I mean it's over $400 million right now, Mark, which is higher than it was at the end of March.

Okay. And then, we saw pretty positive signs in the wealth management business there with client inflows, I think it was $130 million. What's driving that? Is it new or existing clients, and do you anticipate we will continue to see good flows in 3Q and beyond?

And Mark, this is Mark Gim, I'll take that question. The net inflows were driven by a combination of high net worth individuals and by one larger institutional account at the end of the quarter, which came in from the private clients group. These are by and large from new clients, although there are always additions from existing clients, and we're optimistic that that momentum will continue into Q3. Although, as you can imagine, business development in the COVID era has been a little bit more challenging. So, pipelines were strong going into the end of the second quarter. We're working to refill those going into the third, but I think we can safely say that the majority of net asset inflows were due to new customers.

Okay. And then, given the strong mortgage banking income that you guys had this quarter, I guess I'm curious why not push some of that into the provision, given the uncertainties around the current environment?

Yes. So, Mark, I mean first and foremost, we follow GAAP, and we're following our allowance methodology that we've installed under CECL. We're using the same kind of unemployment data that everyone is using. I would say, Mark, our provision is a function of the underwriting that we're doing, and the nature of the composition of the portfolio that we have. So, we don't have credit cards, we don't have car loans, we don't have student loans. There's definitely uncertainty with regard to where the economy is going, but Ned and Bill, I'll let you jump in on this two in terms of just what we're doing in terms of customer outreach and understanding our portfolio, but at this point in time, we feel comfortable with the level of reserves that we're at, which are approximately four times the worst loss experience we had at the depths of the financial crisis. So, time will tell what happens when we come out of the deferral process, but for the moment, we feel comfortable with reserves where they are. Ned and Bill, again, you guys can kind of talk about how we are monitoring the portfolios.

Yes, Mark, I'll go first, Bill, but look we get the question, we have a clean portfolio that has performed well in the quarter. We have a lot of loans on deferment. I'd say from a process standpoint, we are all over those, and we are talking to those customers weekly, and we have now set up a system of kind of color coding them to predict whether additional deferments will be requested and staying on top of how -- you know, either in a retail deal, how underlying tenants are doing, or we've got a hospitality portfolio that we're watching weekly for signs of progress, and so, some of those will require additional deferments and will be accommodative, but we are spending all of our credit time watching the deferments, watching managing through the forgiveness process on the PPP program. The pipelines on the commercial side are down, I think at least part because we're focused on internal things and staying on top of the credit book, and we think we have enough capital and earnings generation power to face what whatever comes our way as the facts suggests that we need to do something more. Right now the facts, as we see them, and I'll let Bill to speak in more specifics, the facts as we see them, suggests that the reserve we've gotten places is the right one. Bill, I don't know if you want to add to that.

Sure. Two things, first on the reserve methodology, we have to do our quantitative estimates as we're supposed to following GAAP. They have a bias towards conservatism in them, but then, we have, Mark, as you suggested, overlaying a lot of sort of uncertainty in our qualitative factors to boost those, the results of the quantitative side. So, we believe what we're doing is in accordance with the GAAP and is appropriately conservative and adequate. And on the deferment side, we literally talked to our customers, we drive by our customers. We're sort of the essence of community bank. So, we're staying very, very close to what's going on during this period, so that the deferments aren't masking any underlying concerns, and obviously we will respond to those as they arise.

Okay. And Mark, I would just say this too, most of the deferments that we've been, and Ron has got some details on what has come, what has expired, what deferments have expired, and what's happened, but the large share of them have not expired yet, 7/31 is a big date for us. So, we're all over it, and I expect that we'll be making decisions in 7/31-8/31 timeframe as these things all kind of roll.

And then, one last question if I could on the deferments, you know, the information that you have, it's up-to-date, any sense for what percentage of the $652 million of deferments you have today are likely to go delinquent when, let's say, we get to the end of the year and the deferral periods run out?

So, Ron, we have information on what has happened with deferments that have rolled so far, but I don't believe, Bill or Ron, that we've put together any kind of speculation about what might happen at the end of 90 or 180 days with the entire portfolio.

Yes, Mark, I think that's impossible to know, and I think if you look at any of the other things that are reported, they'll tell you the same thing, I mean, there is certainly a lot of uncertainty out there. So, no, we don't know how many of these are going to be delinquent at the end of the deferral period.

But given all that uncertainty, doesn't that make an argument for having a bigger provision, or bigger reserve I should say?

Well, this is Bill. As I noted, we believe our methodology reflects a large allowance for uncertainty, because we think a lot of uncertainty exists.

Okay, thank you.

Thanks, Mark.

The next question comes from Damon Delmonte with KBW. Please go ahead.

Hey good morning, guys. How's it going today?

Good morning, Damon. Doing well, thanks.

Great. Just to quickly follow-up on the deferral commentary, so of those that have reached 90 days and understanding that you said a lot of these are going to be on 7/31. I'm assuming some have already reached 90 days. So of those how many have requested additional extensions?

Yes, so Damon, so this is all in a little bit of flux, but I'll tell you on the commercial side about 17% as of last week had kind of reached the end of the deferral period and between 60% and 70% have not extended. On the resi side, 50% have reached the end of the kind of the initial three-month deferral, and mid-70s of those have not requested additional deferrals. So, as Ned said, we are very willing to work with our customers to give them the maximum amount of flexibility that they have, can have to kind of restore their businesses to pre-COVID levels, but qualitatively, I mean our conversations with customers have had been very encouraging in terms of their recovery of business operations and Ned, I don't know if you want to add any color to that?

Yes, I mean I would agree with that, although it's very early, businesses are starting to come back and we're seeing a little bit of uptick in reservations in the hospitality book especially the drive to locations in Newport and Rochelle and a little bit of business booking increase but out in the fall. So we're seeing positive signs, and some of the retail projects, as things reopened, some of the smaller inline stores are starting to reopen, but Damon, I tell you, it's early, and I think we would all be well served to wait and have the signs that we're seeing turned effect before we make too many judgments.

Sure, understand it, okay.

Damon, this is Mark. That said, one thing that we might comment on is that the New England states and Rhode Island and Connecticut in particular are in some ways ahead of the COVID curve compared to other parts of the country. We're going into the summer months, which are typically travel and tourism in Rhode Island, and because the state has been able to move to a Phase 3 and maybe a soft Phase 4 of reopening, we may compare a little bit more favorably with business dynamics and perhaps consumer and job dynamics compared to other parts of the country. So, combined with the strong handle we have on customer communication on the commercial and even on the retail side. Although it is early days yet to judge from whether deferral requests will roll or be renewed. The early data were I think cautiously optimistic about and so that may give a little more insight on why we feel about our book compared perhaps to the Southeast or the Mountain West or the West Coast.

Got you, okay. If you're seeing your video from Misquamicut, you can get the sense that things are almost back to normal, there's a lot of people on vacation down there.

I do.

So, I guess regard to the PPP, could you talk a little bit about your expectations for the pattern for forgiveness and kind of how that might play out over the coming months in a couple quarters here? I'm assuming you didn't have much if any forgiveness during the quarter.

Right, right, and Bill Wray is running that operation for us. So, I think Bill why don't you take that one?

Sure. So far because of the uncertainty around the criteria, and because the SBA is not accepting the formal submissions yet, it's a bit of a waiting game right now. We are set up to go, we have bit the ability to accept online submissions. We've done a few pilots with a few customers, but this thing has especially with some of the changes in Congress moving out to the 24 weeks and with some of the consideration for expedited approval below the 150 threshold, this looks like it's going to move more slowly than we all thought when it first came along.

Right, okay. And you said there's a total of 1,741 loans and what was the dollar amount for that?

$220 million.

Okay, great. And then I guess just lastly, quickly on the margins, so you're saying like the core margin is probably going to be stable from here, and then you'll start to see some benefit from liability repricing as you go to the back-half of the year. What exactly was the core margin, if the reported was 231, where would you kind of put that core margin?

That's it. So, we calculated the margin on our PPP loans standalone.

Yes.

Like 230.

Okay, all right, perfect. Okay. That's all I had. Thanks a lot. Appreciate it.

Our next question comes from Erik Zwick with Boenning & Scattergood. Please go ahead.

Good morning, Erik.

Good morning, everyone.

Good morning.

I'm curious maybe I'll just start with a quick question on the deferrals as well, and I realize it's bit early and only had a few as you kind of give the numbers a few that have kind of reached their initial expiration at this point, but some pretty good percentages of those that have not extended at this point. I'm curious if you have a sense of where some of those -- potentially borrowers, either businesses, or individuals that requested maybe the deferral just as a insurance policy and it didn't necessarily need it, and how many of those borrowers were actually made one or more payments even having the deferral, just kind of curious if now and maybe we're getting those that didn't extend or those that are the businesses, or individuals that are more stressed, or trying to get a sense of how you view that population and what we are likely to see to the extend going forward?

It's an interesting question, Erik. I was thinking about that this morning. I mean, obviously, those that have rolled are the ones that got the early deferrals. So, they may have jumped into the mix early, not wanting to miss out, or with less needs than some of the ones that got in later. So, I don't know that we know that for a fact. We would have to look at the individual borrowers, but I would suspect that there are some in there that either didn't need it, or didn't need it as much as others. Whether there were payments made by that universal borrowers during their deferral period, I don't think we have that detail.

Yes, I don't have it here.

Yes. I mean, we can certainly find it, Erik, but I'm not sure about that, but I think your hunch that this universe this early before the bulk of them expire might be different in ways than others is a possibility, but it's a little speculative to say that, but I understand your question.

No, no. That's great color, and I realize it's hard to have a good sense this early in the game. And then, I think you mentioned kind of the loan pipeline down quarter-over-quarter, and I think that maybe you mentioned it's due to the economic uncertainty, which makes a lot of sense. What would you expect in terms of kind of organic growth in the back-half of the year at this point?

Yes, I think I'd stick with the sort of the low mid-single digit growth on the commercial side. It's the pipelines below 100 million right now, which is low for us, but I think that has something to do with demand in the marketplace, but it also has something to do with the fact that our commercial lenders have been focused on PPP loans and deferrals within their existing books, and frankly spending a lot of time on the existing book and portfolio with customers. So, it's hard to say, but I would say just based on where we are today, that's probably at the low end of what we've given for guidance thus far.

And then, last one for me. Looking at the non-interest expense run rate in 2Q, you guys did a nice job, some very good discipline, holding the line on salaries and net occupancy. As I look forward to the back-half of the year, can you continue to hold the line and remain kind of below that $30 million mark, somewhere in that $29 million per quarter run rate. Does that seem reasonable?

It does. I mean, we would expect -- you know, we got some variable costs such as the commissions on the mortgage, so those will probably remain high at least through the third quarter. FDIC expenses is a little higher than what we've been trending just because of the PPP kind of inflated the balance sheet. So, as those pay down, we might see a little bit of relief on that, but there is nothing else in our expense base, that's changing.

Great, thanks for taking my questions today.

Thanks, Erik.

Thanks, Erik.

[Operator instructions] The next question comes from Laurie Hunsicker with Compass Point. Please go ahead.

Yes, hi, thanks. Good morning.

Good morning, Laurie.

Just staying with the expense, I just want to just clarify the expense lines. One of the comments you made very, very small, but on the FDIC insurance costs, you said that would be stripping out the PPP inflated number that would probably be running around 550 a quarter from what was 674 this quarter? Is that correct?

Yes.

Okay. And then, also just to follow-up generally on the expense line, expenses seem to be better than I had expected, especially given the very high mortgage banking revenue, I mean, I guess, how should we be thinking specifically about that, was there any kind of timing lag that expenses in the salary and benefits will be going out next quarter just from the strong mortgage banking revenue?

Yes. Keep in mind that we had $1 million of contra expense go through in Q2, so that's non-recurring.

Got it, okay, so that otherwise would have been…

Otherwise, it's holding pretty steady. I mean, since we're working from home, I think we are seeing some savings in occupancy and things like that, and there can be some timing things with regard to advertising and marketing and those kinds of things, but our run rate is pretty stable.

Okay. And then, same question here on the wealth management revenues, just in terms of timing, obviously, we saw revenues dropped linked quarter despite a very nice uptick from both client inflows and investment appreciation. How should we be thinking about that line item next quarter?

Yes, listen, so much of that depends on what markets do, but we saw a big increase in our end of period spot balances, and that's not really reflected in the second quarter revenues. So, we would expect pretty strong revenue growth momentum coming into the third quarter just on the basis of the averages catching up to the spot balance. So, yes, we would expect to see some revenue pick up in the third quarter.

Okay.

This is Mark. Just to amplify on Ron's comments, we have several different billing conventions; some are based on asset under management spot balance at the end of a given month, some are based on average daily balance, and some are based on billing in arrears. So, wealth management, AUM-related fees tend to lag on the way up in a rising market and tend to lag about a quarter on the way down in a falling market, but I think Ron's comments at the beginning of the call were spot on. If you look at the average monthly balance during the quarter of wealth AUM, the fee declined roughly, follow that.

Okay. I mean, so it's conceivable we could see, obviously always being equal in terms of what's going on in market, but we could see that $8.6 million track up to low nine.

Yes. Again, Laurie, depending on markets, and I also want to point out that the transaction-based fees will really run out at the end of the second quarter, so that won't carryover into Q3. That's the tax prep.

Right, oh, right, right, the tax prep, okay. And just remind me that the tax prep piece of that, how much is that typically?

So, I will say that we had an insurance commission in the second quarter, which is again transaction-based, about $100,000.

Okay.

So, yes, so our total transaction-based fees in the second quarter are a little higher than normal, but again, that's all seasonal, so there'll be nothing in Q3; virtually nothing in Q3.

Okay. Okay, great. And then just to go back over to NIM, and this is sort of a just more general question, as we think about forgiveness rolling through and the PPP impact into NIM, are you all letting that drop to the bottom line, are you all going to take the stand that some of the biggest banks have in terms of, you're not collecting the PPP fees in terms of keeping them, how are you thinking about that?

Well, we are going to run the proportionate amount of deferred revenues associated with the program that will roll through the margin in proportion to the amount of forgiveness that occurs.

Right, okay, so you're keeping it. Okay. That's great.

Yes.

I just wanted to make sure about that piece. And then, really appreciate your detail around your portfolio segmentation. Just wondered if you could run or even tell, just update us on couple of things here regarding your commercial real estate segmentation, you know, just looking at sort of some of the higher categories in terms of deferment. For example, just starting with retail, the $327 million, I guess $124 million is on deferment. Just can you help us think about within the service, service retail components what is that or what does your retail look like? By service piece, I mean is it a grocery drug or liquor store type anchor or as a clothing, can you just help us think overall more broadly about your $327 million and also, if you've got LTVs on any of the retail, the office, hospitality and the healthcare segments, any other color you can give us could be appreciated?

So, Laurie, it's Ned. I'll start and Bill you can fill in on the LTV side as appropriate, but so on the retail book $327 million, about $130 million of that is now as of July 17 in deferment about 42% of that book, 133 loans of which 45 have deferrals in place. So food anchored largely and the food anchors are paying but the inline tenants might not be there might be I can think of one deal with a food anchor that's paying but it's got a movie theater in it that shut down and asked our borrower for deferral, we gave a commensurate deferral to what he gave to the tenants. We've got no large box to speak of, we've got very little, we've got no urban malls. So it's we've got some sort of in line, I'd say not regional shopping centers, but kind of local shopping centers where you might have a Dollar General as a sort of lead tenant, they're paying but the in lines in those centers are not. So, it's mostly and by the way, the news of late is that those in line tenants are starting to come back restaurants are at half capacity but starting to come back. So I think it's neighborhood mostly, it's not regional, it's not large urban, it's not Big Box for the most part, it's largely food anchored, but even the food anchored centers with the inline stores, not able to pay their rent or needed some support. So, obviously, the next couple of months are going to be critical in terms of how those in lines come back and how the deferrals whether they get extended or not, and we'll try and keep you all as informed as we possibly can on progress on that front. Hospitality book…

Quick question, when you say, "Food anchored," is that grocery store, or is that restaurants?

No, grocery store.

Grocery store, okay, great.

Sorry. Thank you for clearing that up. I appreciate that. Yes, no, we don't have a lot of other than again in lines in line space in a neighborhood shopping center. There are likely some restaurants but not we don't have a focus on big sort of Big Box chain restaurants. Hospitality book, $145 million, $117 million of it or 81% in deferral, obviously the hotel book virtually closed down. They're starting to come back we're starting to see bookings. As I said earlier, it's 25 distinct borrowers. The numbers of those are very small motel Bed and Breakfast kind of things in the Rhode Island marketplace, Newport, Rochelle the larger hotels are starting to reopen, starting to see a little bit of a surge, surge is probably the strong word, return to some occupancy, but that that book is going to take a while, I expect that we will be extending, we did 180 days on those. It'll be interesting to see what happens at the end of those 180 day periods whether I know there's a lot of push ABA and others to try and get even more time for the hospitality sector. We'll see how that goes. I think it will need it. Let's see on the healthcare side within the real estate book, which would be assisted living, senior housing, non-government reliant for the most part, $120 million book of which $64 million is in deferral, five of the 16 loans in that space under deferral. So again those are assisted living, senior housing facilities with a memory care unit perhaps that albeit shutdown to new customers during COVID couldn't replace exiting customers. They are starting to -- they were doing virtual tours. Now, they are starting to actually open up for new customers. So, we expect that to -- I mean the demographics for that space is still very supportive. As soon as they can take new residents, they will, and residents are lined up to move in. So, I think that space will be pretty strong in terms of how fast it comes back. That cover -- that's the main -- sure.

And then due to have LTVs on each of those books, or if not, I can follow up with you offline?

Ned, I can answer that if you want to us to go.

Yes, go ahead, Bill, yes.

So, we did an analysis of weighted average LTV. So, we also look at the distribution of LTVs on these. Weighted average for all of the CRE as of 5:31 was 58%, retail 57, lodging was 49, and then healthcare was 56. So, reflects a seasoned portfolio and reflects our underwriting. Our borrowers have a lot of cash in the game that they want to protect. So, we think -- again, we are well positioned going into this. Certainly expect some concerns as we come out the other side of it, but we went into it with a seasoned and lower leveraged portfolio.

Go it. That's really helpful. And do you have LTV on the office?

Yes, it's 56.

Fifty six, okay. And then, just going back to the hotel book, do you know what percentage of sort of more corporate business travel versus what percentage of vacation, hotels or B&B -- I mean B&B is obviously with the vacation. I just wondered if you had any other color there.

I would tell you that we are largely a leisure travel book. And that the business travel that's involved is sort of the free independent traveler. It's not group business. I couldn't give you a breakup in terms of total revenues for the whole book. That is something we could look at.

Yes, we could -- we don't have that many, Laurie. So, we could determine that. There is lot of sort of tourism base. And even the ones that are here in Providence, for example that might have a business orientation, they also have an education orientation. So, one of them is right next to the Brown Medical School, for example, and serves the resi Brown Providence College, downtown URI population as much as it serves the business community.

Right. Okay. And then, just last question on the hotel, do you have any idea what your occupancy is running now at these?

We would know occupancy on each one individually. I don't have that information in front of me, Laurie, but I will be happy to get it to you. It's low. I mean some of them until very recently were zero. In fact, I am surprised that at the one or two, they kind of ran at 20% occupancy. I haven't figured out yet who was going to them, but yes.

Got it. That's all I need there. Okay, yes, that' helpful. Okay, and then just wondered on the C&I category, just looking at the accommodation and food services, the $45 million. I know you said that the $25 million I think it's the gaming loan paid off, but the balance there didn't seem to drop relative to where it was last quarter. Or, maybe I misheard something there. I just wanted to double check that. Is that part of the $45 million that included the $25 million student loan? Or, I can follow up with you offline.

Yes, let's follow up on that. I still do -- show that same accommodation and food service.

Okay… [Multiple speakers]

Yes, Laurie, if you could -- let's follow up on that. I am happy to give you the details on that. I do believe you are right, but that gaming -- we have additional debt with that. There was a line of credit and maybe some term debt, and so, maybe that's the difference, but let me give you detail on that.

Okay, right. Thanks. I will leave it there. I appreciate you taking my questions.

Okay. Thanks very much, Laurie.

Ladies and gentlemen, this concludes our question-and-answer session. Now, I would like to turn the conference back over to Ned Handy for any closing remarks.

Well, thanks very much, Chad, and thank you all. We really appreciate your interest and the time you invest in us, and we look forward to keeping you informed. Obviously, these are difficult challenging times, and we are focused, I think, appropriately on credit and capital as we should be and less so on growth, and while we are happy with the -- certainly happy with the earnings and unapologetic about how strong our team has been through this. We'll stay focused on the right things, and look forward to catching up with you soon. So, thank you all.

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