Andrew Terrell: So really, the incremental balance sheet growth we should expect should still be more SBA driven?
Jim Noone: Yes.
Andrew Terrell: And Javvis, if I could ask a couple just on the expense base. One, it sounds like there was a core system conversion in the fourth quarter. I’m just curious, it looks like the other expense line was up a decent amount sequentially. Anything onetime from the core system convert or anything else either in the other operating expense or even in the salary and employee benefits in the fourth quarter we should appreciate. And then it looks like expense growth from an operating standpoint was about 10% in 2023. Is that the right level of operating expense growth you would expect moving forward? Just understanding that there’s continued kind of reinvestment in the business?
Javvis Jacobson: Andrew, I think we’ve been talking for the last several quarters now about making additional investments to improve our business infrastructure. And what you’re seeing in the noninterest expense now investments in personnel, systems, processes and the new core you mentioned. Those expenses aren’t going to go away and we’re not quite there yet. We’re excited about the progress we’ve made so far and about our plans to help position the company for long term growth. I wouldn’t really call out anything in the fourth quarter as onetime.
Andrew Terrell: And then thoughts on just the overall level of expense growth going forward?
Javvis Jacobson: Again, when we’re thinking about the right run rate for expenses, we continue to build and we’re not there yet. So ’23 has been a build year for us, we expect that to continue in ’24. So I don’t think it’s unreasonable to think about increasing expenses in ’24.
Operator: Our next question comes from the line of Andrew Liesch with Piper Sandler.
Andrew Liesch: Just want to talk about the BIN sponsorship and kind of how that’s going to ramp up. I mean signing up partners can take some time and it sounds like it will be operational late this year. But when do you think we can start seeing revenue hit the bottom line? And I guess if you provide it at a high level, what sorts of partners are you targeting for that business?
Kent Landvatter: Jim, do you want to take that one?
Jim Noone: So right now, Andrew, we’re looking to be operational later in the year. We don’t have a time line to kind of point to as far as identifying when to really be looking at meaningful revenue contribution. A lot of the work that’s been done so far is really on the infrastructure and staffing side and that will continue over the course of this year. We do expect to have our first handful of customers later this year but it’s really probably in 2025 that, that becomes a more meaningful revenue item for us.
Andrew Liesch: And then just on the originations. I know it’s hard to say that this is — the environment’s improved, but you still continue to put up decent numbers and the strategic program fee is still running pretty solidly. I mean — I guess I’m just trying to figure out like where do you think the low for that fee income item could be? Like what we saw in the first quarter of this year, it just seems like there’s a lot of — there’s more tailwinds out there that you guys might be expecting.
Jim Noone: I can touch on the originations. I’ll give — Javvis maybe want to touch on kind of the [C] side of that. So it’s like the delta that you’ve seen between Q1 and the subsequent three quarters of ’23, Andrew, really came from a rebound with one specific program in our fintech lending line. That rebound was sustained throughout the course of the year and that was certainly something that was good for us, but it wasn’t something that we were expecting throughout the course of the year. And I think right now, while rate expectations have improved and some of the other like macro clouds have been lifting, we still don’t see broad enough strength across all of our platforms and kind of the industry in general to change our outlook.
And so this is why we’ve continued to build our pipeline and launch new partners. And I would point you to Earnest and Navient in Q4 as really one of the goals that we really were trying to hit before the end of the year. So again, as far as origination levels over the course of the next couple of quarters, pointing you to Q1 as a good barometer is still something that we would do near term.
Javvis Jacobson: And Andrew, as far as the fee income goes, I’d just point you to the high correlation between the strategic program fees and the line item or the originations, we’re pretty close to last year fourth quarter and those fees are pretty similar. And the trend is there a little higher this quarter than last quarter and that trend exists as well on the strategic program fees line item in other income.
Operator: We have a follow-up question from Andrew Terrell with Stephens.
Andrew Terrell: I just had one around the capital position. It looks like over the past year or so, I mean, you’ve obviously had really impressive balance sheet growth. It looks like the leverage ratio is down about 450 basis points or so just throughout the year. I think if I recall, around the high teens, low 20s levels where you like to operate from a leverage perspective. Can you just talk about, one, comfortability with the current capital position today and then maybe tie it into a discussion of where you see inorganic capital as a solution or as a slowdown in the cadence of near term balance sheet growth more likely outcome?
