Good morning, ladies and gentlemen, and welcome to the Q1 2024 Live Oak Bancshares Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, April 25th, 2024. I would now like to turn the conference over to Greg Seward, General Counsel and Chief Risk Officer. Please go ahead. Thank you, and good morning, everyone. Welcome to Live Oak's first quarter 2024 earnings conference call. We are webcasting live over the internet, and this call is being recorded. To access the call over the internet and review the presentation materials that we will reference on the call, please visit our website at investor.liveoakbank.com and go to the Events and Presentations tab for supporting materials. Our first quarter earnings release is also available on our website. Before we get started, I would like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from our expectations are detailed in the materials accompanying this call and in our SEC filings. We do not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of today's call. Information about any non-GAAP financial measures referenced, including reconciliation of those measures to GAAP measures, can also be found in our SEC filings and in the presentation materials. I will now turn the call over to Chip Mahan, our Chairman and Chief Executive Officer. Thanks, Greg. Good morning, fellow shareholders, and welcome to our Q1 call. I'm gonna kick things off this morning and discuss several areas noted on slide four. We will touch on first quarter loan originations and our pipeline of future loans to be generated. As always, we will present a credit quality update along with a view of increased operating leverage based on investments we have made. Then we will discuss growth drivers by way of adding new lending officers and a new way of underwriting small loans. Then we will wrap up with a few thoughts from our annual report as we look back these last ten years. Moving to slide five. Before we dig in on asset quality, a word on originations in Q1. Originations this quarter were $805 million, a $176 million decrease from Q4 of last year, and $226 million less than Q1 of 2023. That said, a number of larger loans slipped at the last minute. As of today, many of those have closed. We expect to catch up to our original budget by the end of this quarter. We expect a nice increase in originations over last year. Our overall pipeline is at an all-time high, up 23% over last year. Back to this slide. Again, steady as she goes as it relates to the top portion of this slide. The bottom half requires further explanation. Steve and his credit team have quarterly watchlist meetings with all 75 bankers. As you recall, these folks are recent college graduates responsible for gathering financial statements on all 6,000 customers every 90 days. This deep dive includes a healthy portion of all of our employees who touch the customer. He leaves no stone unturned. As we examine our charge-offs as it relates to our provisioning on the next slide, Steve has a proven track record of conservatism. The real answer to credit quality exists on slide six. Let's dig in on actuals these last 13 quarters. Our unguaranteed ACL reserves are almost 2.5% of unguaranteed loans and leases, or twice industry norms. As the nation's number one SBA lender, we have also evolved as one of the nation's preeminent cash flow lenders. With interest rates rising over 500 basis points in a very short period of time, our approach seems prudent. We have added $101 million to our reserves these last 7 quarters while charging off just $27 million. This includes $7 million in a fraudulent national participation in Q3 of last year. One needs to let this marinate a bit. Steve will be happy to answer any questions in our upcoming Q&A session. We'll, we'll walk you through the non-operating adjustments as we move to slide 7. Needless to say, we're quite pleased to see a 26% increase in operating leverage from the first quarter of last year to Q1 of this year. This $8 million increase YoY should accelerate in the future. Our investments in NextGen technology allows us to better answer the question we constantly hear from our customers: Am I approved, and when do I get the money? Our goal of never touching data twice is around the corner. Treating each customer like our only customer is how we are built. We are in constant search of ways to raise our NPS score, and we look forward to this year's results. As discussed on our last call, we are incredibly excited about changes made at the SBA that affect loans under $1 million, and particularly loans under $500,000. Our tech teams are working 24/7 to automate this process in a way never before contemplated. Those loans will be sold on the secondary market. As we scale, those gain on sale dollars will have a positive effect on this ratio. Moving to slide 8. In this year's annual report, we thought it would be informative to look back over the last 10 years. In 2013, we were a $400 million bank with $50 million in capital. Just after receiving our charter in May of 2008, the FDIC restricted our growth to no more than 25% per year until 2015. We took the company public two months later. In 10 years, we have grown to an $11 billion bank with almost $1 billion of capital. Assets have grown 39% YoY, while capital has grown a compounded 34% in those 10 years. Tangible book value has grown from $2.36 per share to $20.32 per share, a 10x increase over the period. While we're not suggesting that the past is a proxy for the future, steady, organic, non-dilutive growth has been our mantra from inception. The rest of this slide shows how we got there. About $500 million of organic earnings growth since the last time we had to access the capital markets back in 2017, driven by our core business earnings, along with $207 million in gains from fintech activities related to Finxact, Greenlight, and Payrailz. Lastly, on slide 9, our increase in tangible book value compared to others in the KBW coverage universe is in a class by itself. We are up over 700%, while the KBW coverage median has grown a tenth of that. And with that, I'll turn things over to Walt. Thank you, Chip, and good morning, everyone. I'll start today with a high-level review of Q1 on slide 11. Our core financial objectives remain consistent with what we have discussed over recent calls. Protect our credit vault, utilize pricing discipline to expand our net interest income and net interest margin, moderate expense growth, yet remain opportunistic to add good costs and grow the business. Top-line figures show EPS of $0.36, a healthy net interest margin of 3.33%, a 42% QoQ growth in reported PPNR, a 2% QoQ loan growth, and a 7% increase QoQ in our business deposits portfolio. From a soundness perspective, our small business borrowers continue to be resilient and maintain the eye of the tiger mindset, despite a challenging higher for longer rate environment that has put pressure on some of the loans originated back in the lower rate years of 2020 and 2021. Our credit performance continues to remain within our expectations, and we remain confident in our portfolio strength and proactive monitoring. More on credit shortly. Our liquidity profile remains robust, with low uninsured deposits compared to the rest of the industry, and 3-1 available liquidity capacity to those uninsured deposits. Our capital levels remain strong and have seen three consecutive quarters of capital ratio accretion. From a profitability perspective, our core business continues to perform well, as Chip mentioned, with a 26% YoY increase in core operating earnings. This growth reflects our focus initiatives to grow revenues at a faster pace than our expenses as we scale into the strategic hiring investments made over the past few years. Our 1% QoQ increase in net interest income and 1 basis point QoQ increase in net interest margin was in line with our expectations. We will speak more on them in the upcoming slides. From a growth perspective, on the lending front, we remain the nation's largest SBA lender in terms of balance volume thus far in the SBA fiscal year. Loan originations have a seasonal component, with Q1 typically resulting in the lowest quarter of originations each year, and as Chip mentioned, a good portion of the loans that push to the right have already closed thus far in Q2. Our $3.2 billion pipeline remains at all-time highs as our lenders continue to do a fantastic job at sourcing new opportunities in a very competitive environment. Our ability to calibrate deposit growth to support our loan growth remains a strength. Customer deposits grew 4% QoQ, primarily in our business deposit sector. This allowed us to reduce our more expensive brokered funding by 7% QoQ. A couple of quick notes on slides 12 and 13. Slide 12 highlights that roughly two-thirds of our $805 million of loan origination in Q1 2024 was in our Small Business Banking space. As you can see on the top right, the bulk of the difference versus Q1 2023 was in the Specialty and Energy and Infrastructure business units. We ultimately view this as a timing difference, as these deals tend to be larger and more fluid in their estimated closing dates, and as such, can easily push from one quarter to another quarter. We are also in the early days of our focus on small SBA 7(a) loans. Thus far, we have generated $13 million of small loan SBA 7(a) production year to date and continue to see that pipeline increase. As Chip mentioned, as we work to automate the application, documentation, and decisioning process of our SBA origination platform, we are excited as to what possibilities that provides for small loan 7(a) originations and the subsequent gain on sale income. Slide 13 highlights the QoQ loan growth by component. It's important to note that prior to our typical sales and participations activity, our loan portfolio growth was 5% QoQ, as new fully funding originations and construction loans continue to drive balance growth. Our pipeline and portfolio activity suggests that a low double-digit full-year growth rate remains a reasonable loan growth expectation. Our deposit trends are highlighted on slide 14. I've long viewed our funding model as a strength. Our branchless funding platform is extremely efficient, with a ratio of approximately 5,000 deposit accounts to one customer success representative, and the cost of funds that typically ranges from 10-20 basis points. Oh, and by the way, our customer calls are typically answered within a minute by a live customer service team that has a 93%+ first call resolution average. All while our competitive rate position ensures our customers are receiving market pricing regardless of the interest rate environment. As evidence of this strength, our total deposits increased to roughly $10.5 billion in Q1 2024, a $1 billion or 10% increase YoY. Customer deposit growth has been predominantly driven by our business deposits, both in savings and CDs. Our overall customer deposits funding mix of 63% savings, 34% CDs, and 3% non-interest bearing has held constant over the past year, as we have not yet seen the migration to term deposits that many in the industry have begun to experience. Given the uncertainty of the Fed outlook, we continue to like our funding portfolio's short-term positioning. Our Business Checking product launched in Q4 2023, and while we are in the early days of rolling this product out, we have seen positive momentum thus far. Our expectation was that this was going to be a crawl, walk, run sort of pace, and we are optimistic with regards to this product's trajectory and its potential impact on our profitability as it scales to a larger portion of our funding mix over time. Slide 15 highlights our net interest income, NIM, and yield trends. As mentioned earlier, our Q1 2024 net interest income was slightly up, linked quarter, and our net interest margin improved by 1 basis point to 3.33%. As mentioned in our last call, pressure on net interest income growth in Q1 was expected, as we had a large CD maturity event with an average renewal rate increase of 61 basis points. On the pricing front, our lenders continued to hold the line on spreads in a tougher, higher for longer rate environment, while many of our competitors are pricing well below prime. Our average yield on new production in Q1 was 9.12%, or just above prime + 60 basis points. Our average portfolio loan yield increased to 7.77% in Q1, up 16 basis points from Q4. As for deposits pricing, the average cost of funds increase over the last two quarters has largely been a result of our CD portfolio maturities and repricing. These maturity events have provided net interest income and net interest margin headwinds in Q4 2023 and Q1 2024, but they could ultimately provide future tailwinds if the Fed cuts later in 2024 or 2025. We have not raised our business savings rate since March of 2023, and have not raised our personal savings rate since November of 2023. At the same time, we actually have been fortunate to begin lowering our CD rate offerings recently, as the market has begun to reprice its CD rates downward as they try to shorten their funding portfolio, discourage funding migration to term deposits, and push customers to their more variable nature deposit offerings. Make no mistake that the market remains highly competitive, but it continues to show signs of rational pricing, which is encouraging. So what happens to our funding costs if or when the Fed cuts rates? Many banks throughout the industry still expect rising funding costs, even if the Fed cuts rates, as their current offerings are still well below market competitive. This is evidenced by the national average savings rate still remaining just shy of 50 basis points, while most digital banks have offerings north of 400 basis points. We will assess the drivers of the Fed cuts, the competitive market, and our funding needs, yet ultimately expect the digital deposit market to react fairly quickly in its downward repricing, and we'll do the same. Lastly, given the recent inflation and Fed outlook news, let's quickly revisit our net interest income and margin expectations communicated by BJ and myself over the past few calls. We've communicated that our net interest income and margin are expected to migrate up into the right over 2024, albeit not in a linear fashion, with more improvement in the back half of 2024. This expectation included returning to a NIM range of 3.50%-3.75% by the end of the year, and a high single-digit to low double-digit growth in 2024 net interest income relative to full year 2023, barring any unforeseen liquidity stress events. That guidance was based on three Fed cuts in the second half of 2024, and while we are optimistic that we will continue on the up and to the right journey with our margin over time, the slope of that up and to the right trajectory for both net interest income and NIM may flatten with less or no rate cuts, driving us towards the lower end of the expected range by the end of the year. Time will tell. QoQ fee income is outlined on slide 16. We continue to be encouraged by improvement in the SBA secondary market in Q1. There was a good amount of liquidity in the market and stabilization in the Fed rate aided the improvement on our average premium from 5 points to 7 points on loans sold. As you can see in the bottom table, our Q1 sales volume is typically lower than the rest of the year, followed by a slight stair step up in Q2 through Q4. We expect 2024 to be no different. Gain on sale providing for roughly 8%-12% of quarterly total revenues continues to feel like the right range at this point in time. As I mentioned in our last call, we were able to sell our first few USDA loans for the first time in over 7 quarters as asset-sensitive banks begin to consider downward rate protection. We are excited about this development, but one quarter is not a trend, and as the timing of our USDA originations can be choppy, so will our USDA sales activity. Turning to expenses on slide 17, our Q1 2024 expenses of $79 million were up 7% QoQ, but were essentially flat to Q1 2023. QoQ growth was driven by incremental personnel costs, such as 2024 hires, our annual salary merit adjustments, 2023 restricted stock unit awards, and accruals related to our 2024 employee bonus expectations. FTE growth were good costs, with the addition of 2 senior loan officers, closing staff focused on small SBA 7(a) loans and servicing internal audit and risk personnel to support our growth and complexity. We continue to operate as a growth organization and will remain focused on adding revenue generators and other good costs as needed. Yet there are still opportunities to find efficiencies and scale in technology and support areas through automation and process improvements that will help manage expense growth going forward, thus continuing to provide improvement in our operating leverage. Additional credit trends are included on slide 18. Our $16 million provision was primarily attributed to portfolio macroeconomic changes, specifically the impact on customer cash flows from a higher for longer rate environment. Past dues are not materially outlined with prior quarters, and although non-accruals are up, as expected in the current environment, we still feel that these levels are manageable. As Steve can expand on in the Q&A, we continue to actively monitor the existing portfolio, have yet to see any notable surprises outside of our expectations, and do not currently see any significant weak spots. Our trademark proactive, direct servicing approach has and will continue to serve us well. In Q1 2024 alone, we spent approximately 40 hours or 7 business days reviewing almost 500 presentations from 100 of our relationship managers on more than 700 of our credits to understand their specific situations and status. I continue to be impressed by our credit and servicing team's commitment to excellence and discipline in their respective areas. Our credit vault is in good hands. With 37% of our loan book government guaranteed, a strong capital and liquidity profile, a reserve to unguaranteed loans and leases ratio that is two times the industry median, a predominantly owner-occupied CRE portfolio that's 45% government guaranteed, and our historical charge-off rate being a fraction of our of our current allowance, we remain confident in our reserve and portfolio's credit strength. Lastly, slide 19 highlights our overall capital strength, which remains robust both in terms of regulatory ratios as well as from the unguaranteed loan perspective, what we affectionately call the Mahan ratio. As you may have noticed in the earnings release, we did originate a $100 million term loan in Q1 2024, with the purpose of downstreaming the funds to our bank subsidiary to position our bank level capital ratios for the anticipated growth to come. Our earnings over the last three quarters provides us with confidence in our ability to continue to support our growth through organic earnings as we have over the last six-plus years, while positioning ourselves to be able to weather whatever storms lie ahead. Thank you for joining us this morning, and with that, we're happy to take questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from Steven Alexopoulos from J.P. Morgan. Please go ahead. Hi, good morning. This is Alex Lau on for Steve. Good morning, Alex. Morning, Alex. My first question is on credit. Can you share some color on the loans that you built specific reserves for in the quarter? And what is your outlook for the health of these credits in the related industries? Yeah, this is Steve Smits. I'll take that one. So these are predominantly Main Street SBA borrowers that are struggling with the higher rate environment and the impact to their overall debt obligations. So we've put impairments on these loans as we navigate. But as Walt had mentioned, we continue to stay very focused and close to them in our servicing, and we will continue to work through them. But you know, with the uncertainties in the economic outlook going forward, how long rates will remain high, prudent steps to put the reserves today, and continue to work with them to rehabilitate and work through these challenges. What gives me some comfort is that these really were not surprises. So these were borrowers that we were aware were experiencing challenges and struggles. So that bodes well to our servicing and being on top of understanding the challenges our borrowers are working through. So no huge surprises, but we'll continue to work through them. Thank you. I wanted to ask about expenses. What is your expense outlook range for 2024, considering a baseline growth rate? If there are opportunities to add more revenue producers, where would that revenue expense range be? Thank you. Yeah, good question, Alex. This is Walt. You know, so from expectation for 2024, baseline, you know, we think a high single digits is reasonable, you know, given that, you know, we still remain that growth organization. You know, to the extent that if we can hire revenue generators, what does that become? Does it move to low single digits, perhaps? Right. I think there are still some efficiencies that we can look at. So, and that obviously depends on how many revenue generators we can add. So to the extent that that goes into, you know, low single digits, mid-teens, I personally don't see that as a problem if it's all revenue generators, because it's going to generate revenue and, you know, help with on the operating leverage side. You want to give them- Thank you for answering my question. You're welcome. Thank you. Next question comes from Brandon King from Truist. Please go ahead. Hey, good morning. Hey, Brandon. So could you square away the commentary around the pipeline being, you know, stronger than ever, but we hear more and more how these higher rates are impacting just smaller business demand? So could you talk about, you know, what you're seeing within your customer base? What's driving these strong pipelines just relative to these higher rates potentially impacting demand and obviously credit as well? Yeah. Hey, Brandon, it's BJ. So I think what we're seeing is an expectation, level setting or, or a kind of a realization, if you will, of buyers and sellers, particularly in the SBA space, kind of getting on common ground on what valuation should be given the rapid increase in rates. ... that happened over the last 18 months or so. So last year was kind of an interesting one in terms of, you know, sellers having expectations of valuations, you know, pre-increase in rates, and buyers looking at their borrower base and what they could actually afford to pay. And so there were some disconnects there. There would continue to be high activity, but a lot of what we saw coming through our pipelines actually fell out of closing because buyers and sellers couldn't come to terms. We're seeing that true up a little bit more now. So rates are generally steady. Borrowers understand what their cash flow coverage is gonna be and can forecast that a little bit better. And so we're seeing much better pull-through activity as we look at the pipeline. Now, what Walt said is true, is in that first quarter, you'll see that our originations were largely flat quarter over quarter, excuse me, year over year in SBA. They were down meaningfully in specialty finance and E&I, which we've already seen come back here in the second quarter. We do expect stronger SBA small business volume in the second quarter, in addition to that specialty in E&I. So we're, we're pretty, pretty excited about what we're seeing going forward. And, you know, we, we expect to continue to see more, more growth with the existing business that we've got. As Walt talked about, we are always, always, always in the market for high-quality revenue producers. We're a growing company. We'd love to see, more lenders come to-- come onto our platform, and we're actively looking for those. So you'll continue to see us invest there. Just one other thing on that, Brandon. I have always felt in our business, the banking business, that banks are sold and not bought. Bank boards have a certain expectation, I'm gonna sell my bank for 2.5x book, and market in there, then they're not gonna sell the bank. And I think that's what has happened, particularly in the M&A business and our space, that the silver tsunami is expecting a certain price. Numbers don't pencil. Silver tsunami's running out of runway, speaking as one of those silver tsunami guys, and it could come to realization that I'm not gonna get 2.5x book. I'm gonna get 2x book, and I better take it now. I think our guys were saying, "And the phones are ringing, the phones are ringing," and that's the reason that the pipe is up 26% or 23, or whatever it was. Okay. That, that makes sense. And then, as far as the NIM commentary, it sounds like if we are in kind of this at least stable rate environment, you're gonna reach the low end of that 350-370 range by Q4. But what is implied in your outlook for deposit costs within that guidance? Are you expecting deposit costs to be potentially stable from here, or what sort of creep are you expecting on the deposit cost front? Hey, Brandon. It's Walt. So, from a savings perspective, we expect it, you know, essentially to stabilize both on the personal and the business side. You know, in that guidance, that gets us back towards that 350-375 range towards Q4. You know, we still have two expected Fed cuts, which obviously, you know, our savings will respond accordingly. Those cuts, I believe, are September and November, in, you know, in our current models. You know, and then this from a CD front, like I mentioned in the call, we've been able to reduce our CD rates thus far. You know, I don't-- you know, I, I, think it largely will depend on how the market moves. Digital markets, typically on CD pricing, will reprice ahead of Fed expectations. and then the gap between our renewal or our maturing CD rates and our renewal rates is much less as we get further, you know, through the year, just given, you know, we were pricing our 12-month, which is our, our largest CD offering in Q3 and Q4 last year, at the 5.25, 5.30 mark. Okay, so it sounds like interest-bearing checking and savings and money market are kinda at least stable from here until federal rate cuts, and then CDs are marching towards that 5.20, would be the best way to frame it? Yeah, I think, I would frame it more as that they're, yeah, they're marching towards our current rate offerings today. Okay. Okay, got it. Thanks again for answering my question. So I'll So I'll hop back in the queue. Thank you. Thank you. Next question comes from Tim Switzer at KBW. Please go ahead. Hey, good morning. Thank you for taking my questions. I had a quick follow-up on your commentary on the NIM and deposits. What's kind of the deposit beta you guys are assuming on, you know, the initial rate cut? Say, we get one or two cuts in the back half of 2024, what's your initial expectation there? And then how could the beta, you know, possibly accelerate as we move through the cycle if we get a series of cuts? Yeah, great question. You know, from a beta perspective, you know, the bank here has been about 15 years old, so we haven't seen a lot of robust, downward cycles. The last time the, you know, rates came down. Our Our deposit pricing digital market acted pretty rational. You know, from a, you know, beta perspective, early on, you know, probably be somewhere in the, you know, 50%-70% range. It could be a potential lag, you know, whether it's 1 month or so. On the CD side, that's typically 80% beta or so, and that will, you know, we're pretty confident that'll hold, given the way CD market typically is, you know, very reactive. You know, as you kind of move forward, you know, as you, as you saw, kind of when, you know, rates came down, or I'm sorry, when rates were rising, the cumulative betas rose. You know, we think our cumulative betas will also increase on the savings side as well. But largely, you know, will depend on, you know, how essentially the, the overall market reacts. Okay, got it. And then I, I also wanted to ask about your, your expectations around SBA margins and secondary market demand. Kind of, you know, a good lift in the premiums this quarter, but now with, you know, rate cuts being pushed a little bit further out, interest rates moving higher, has that kind of moderated demand or the premiums for you? And, you know, what are your expectations once you get either a stabilization or cut in rates? Yeah, the secondary market, you know, tends to look at the forward curve. So the 105 to the 107 improvement, that we saw here in Q1, I think will stay in that range, you know, especially now, given with potentially later Fed cuts. So think of, you know, last 6 quarters or so and say, "Hey, that's probably a reasonable expectation for right now." You know, as far as demand, demand is strong, the liquidity is strong in the market, so we're not having issues, you know, as, as far as selling, and executing those sales. I think as the rates come down, you know, we typically will see an improvement. Hard to say right now, that improvement, you know, is drastic, but I think, from a reasonable expectation, you know, sticking that 105-107 range, at least through the next few quarters feels right. Okay, great. That's all for me. Thank you. Thank you. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. Next question comes from David Feaster at Raymond James. Please go ahead. Hey, good morning, everybody. Morning, David. Morning, David. Maybe just, I'd like to touch on the small loan automation. You guys touched a bit about it in your prepared remarks. I'm just curious, where are we in that build-out? What's left there? And then, I mean, are there any other investments or back office, you know, build-out that we need? And when do you maybe expect that we could start beta testing that or rolling it out more broadly? Hey, David. Good morning, it's BJ. So we have already started originating small dollar SBA loans. Right now, it's manually through a small team that we put together. So I think, you know, we've got $12 million-$13 million booked, another, you know, pipeline about that size. So, you know, good start. We had not opened it up to all of our lenders yet. We're getting ready to do that, but we've got two major technology/credit enhancements that we are looking at before we really open up the floodgates. One is a digital application, which we're expecting to have later in the second quarter, early third quarter. So that'll be a big deal because that'll automate the front edge, make it very easy for our borrowers, our referral sources, or our lenders to put small dollar loans through our pipeline. That'll be very helpful. The second is automated credit scoring. We will not go 100% automated credit scoring, but we are looking at streamlining the process for these small dollar loans to be able to get more through our system. So we're really excited about this. This has always been something that was available that other SBA lenders do, but we intended to, you know, do larger dollar credits. We were very happy to provide access to capital for smaller small business owners, and this very much aligns with what the SBA and the current administration are looking for from us in the industry. So we're excited about that, and it just adds to our ability to serve more and more small business customers. More to come on this, but we expect it to really start to ramp towards the back half of the year. The plan is still to sell all of that production. And where are gains on sale of, you know, smaller dollar relative to what you typically sell? Yeah. Hey, David, this is Walt. Yes, the plan is 100% sale, model related to small loan SBA. Premiums there range, typically anywhere from 110 to 113, depending on your spreads. You know, but historically, those have held true. You know, the secondary market views, you know, those loans as kind of the crème of the crème because you can, you know, essentially create larger pools with more diversification. So high demand, good premiums, you know, historically, and we expect those, you know, or expect that to continue going forward. Got it. And then, maybe switching gears back to the business deposit growth. I mean, first off, I guess, could you remind us where pricing is on those products? And then where would you characterize we are at this point? You know, we've seen obviously nice growth, but are we still crawling from your perspective? And maybe when do you think that we ship, excuse me, shift to walking or even start running? I'll start. Yeah, Dave, this is Walt. So in our business pricing or business deposits pricing, our savings is at 4%. Our CDs are the same as our personal CD rate offerings. And then obviously, you have a, you know, non-interest bearing checking. As far as the kind of where we are on the crawl, walk, run, I'd say we're, you know, very much in the crawl stage. I think we're, you know, working, you know, as aggressively as we can to sell those to our existing customers as well to, you know, to new customers. I think it will take time to ramp, you know, on the checking side, just where we are in the market right now, where, you know, essentially, depositors can get, you know, very nice rates, you know, on the interest bearing side. Yeah, I think just, just to clarify, we're on the crawl as it relates to checking. Yes. Right. There's a long runway there. We are absolutely sprinting on business deposits. You know, we've got a very strong offering there. We've got a great brand reputation. The growth in business deposits is incredibly strong, so we expect that to continue. Yeah, I would just add that, David, this is Chip. So I would just add this, all right, that we have been primarily a lending company for 15 years, and a lot of our SBA, particularly the generalists, have been SBA-commissioned loan producers. And now that we have a checking account product that is second to none in the industry, it's been a bit of an educational process, particularly, for instance, if we're funding an acquisition and the money goes to the seller. We need to convince our customer, who is the buyer, to bank with us, that we are a bank this time. We're not just a lending company. And there is a—that piece in that education is in the educational area and early days in the... I would still put that piece in the crawl area. We can get better there, and we will get better there. That makes sense. And you know, honestly, that might play into, as you do more conventional lending, play into more of that growth. So maybe touching on the conventional lending side, you know, looking at one of your charts, it looks like you've seen a decent amount of growth on that front. You know, there's obviously a hyper focus on the CRE front. I'm just curious, what are you targeting on the conventional side at this point? How is that going? And then how did you just think about, you know, growth of conventional production and shifting underwriting standards and credit quality there? We're really excited about what we're doing on the conventional lending side. We've transported our theory of verticality from the SBA side over to the specialty side, which we think is incredibly important to be very expert in the verticals that we go after so that we can add value as an $11 billion bank on larger credits, relative to just being a bank that's a generalist-type calling effort. And I think we've been incredibly successful there so far. We've got an excellent sponsor finance business. We have a venture banking vertical, which makes sense with our organization, seniors housing, commercial real estate, specialty healthcare. So, you know, we're trying to be very niche oriented in how we grow that. And over the last five years, we have grown our specialty finance business tenfold in terms of outstandings. And what that's also allowed us to do is have credit be comfortable with the credits that we're doing in those verticals, because we're by and large seeing the same types of deals as opposed to, again, having a generalist calling effort on the conventional side, which can be more difficult to underwrite and approve. So, you know, we're pretty bullish on what we can do to grow that responsibly. And in addition to that, going back to the deposit side and the checking side, it is very common to do a conventional loan deal and ask for the deposits. And so from that perspective, we're having great success starting to build out our deposit, our checking platform on the specialty conventional side, because our borrowers are used to being asked for the deposit. So you know, we're gonna build our book there probably quicker, frankly, than we're gonna build it on the small business side, and we're starting to see the fruits of that labor. Just one addition to that, David, this is Chip. It has been really, really fun for my cofounders, David Love, Billy Williams, and I. We kind of view this from our perspective as regression to the norm. We came up with this idea to create a bank that's the fourth leader of the banking business in the SBA area. All of a sudden, we get to use our 50 years experience of being actually C&I lenders ourselves. So this is a bit, again, regression to the norm for us. Yeah, getting back to your roots. That's it. That's great. Appreciate all the color. Thanks, everybody. Thank you. Thank you. We have no further questions. I will turn the call back over to Chip Mahan for final comments. As always, we appreciate your attention today, and look forward to seeing you again in 90 days. Thanks for coming. Ladies and gentlemen, this concludes your conference for today. We thank you for participating, and we ask that you please disconnect your lines.