Ken Lovik: Yes, I mean, historically, I mean, to date, we’ve had 300,000 of charge offs. To date, we’ve had pretty good credit quality. I think it’ll probably – over time, there probably will be some charge offs there, but so far, I mean, to date, delinquencies have been very low. Continue to stay on top of it and monitor the portfolio, but I think probably like small business, there may be some pop ups here and there, but I don’t think there’s any – from our perspective, there’s no systemic real issues with the franchise to date.
David Becker: I actually set in on the Credit Committee Meeting this morning, and we had one account that was over 30 days, and we got a check in this morning that took them off the delinquency list. If it clears, we should end the month here with absolutely no delinquency in that portfolio. So, as Ken said, and historically apple pie has been around 10, 12, 13 years. Historically, they haven’t had about a 1.6% loss ratio, but so far we’re doing well.
Nathan Race: Got it. Great to hear. And then just lastly, in terms of the charge-offs this quarter, how much of it was related to the – I think it was a bank alliance loan that we’ve been talking about the last couple of quarters versus just kind of the small number of SBA loans that were called out in the press release.
Ken Lovik: You know what, the bank alliance deal was a couple quarters ago. We did have really the charge offs can be boiled down into two components, one piece of it being a handful of smaller SBA loans. And then we did charge off, we were a participant in a deal and the lead bank put the loan, pooled it as part of a larger pool of loan sales, and we worked with them on that, but we had to take a small charge as the sale price was less than the carrying value.
Nathan Race: Got it. So the C&I loan charge off in the third quarter was separate.
Ken Lovik: Yes, but it was not – to be clear, it had nothing to do with the bank alliance deal from earlier this year.
Nathan Race: Got you. And based on what you’re seeing across portfolio today, imagine, it’s fair to maybe expect some moderation charge off levels going forward.
David Becker: Yes. It’s an intriguing time, the bump up in interest rates, particularly on some of the older SBA loans that when we bought that first Colorado portfolio. Again, we discussed two or three in credit this morning that are getting deferments from the SBA world that will hopefully help them through the crunch. But we had people there that were at 3% from the beginning days of their loan that are now paying 11.5 to 12, and it is just putting a squeeze on them. But nothing systemic, no particular vertical in the lending area. That’s a problem, and I think we’ll continue to see some of these one off things, but stabilization and bumping the rates will help immensely, no question about it. And if at some point in 2024, we start to see them go down, we’ll be in great shape.
The SBA does have a lot of tools to help some of these smaller guys to go to an interest only basis to actually give them total payment deferment for 60, 90 days, up to six months in some cases. So we’re playing by the rules, and as I said, credit committee this morning numbers are still down over what we finished at quarter end, and looking good but who knows what might pop out?
Nathan Race: Got it. Makes sense. I appreciate the color. Thank you, guys. I’ll step back.
David Becker: Thank you.
Ken Lovik: Thanks, Nate.
Operator: Thank you. Your next question comes from Mike Perito from KBW. Please go ahead.
Unidentified Analyst: Hi, this is Mike’s associate Andrew filling in. Thanks for taking my questions.
David Becker: Sure.
Unidentified Analyst: I just wanted to start off here. I was wondering if you could give some more color on the back space. I know you commented on that new partnership you launched. I was just kind of wondering what’s the appetite look like for new partnerships and what kind of maybe revenue expectations can we see from some of the new partners you’ve onboarded in the last few quarters?
David Becker: Well, I was actually at Money20/20 on Tuesday. I heard that’s where Mike’s out there kind of running around as well. We had great meetings out there with all of our partners from increase to treasury prime to – we saw actually probably a half a dozen of the fintech companies that we’re working with. Most importantly, spent a fair amount of time with [indiscernible] So it’s looking good. Everything takes always a little longer than you think it’s going to get things up in line.But as Ken said in his comments, we had a nice boost up in deposits, the payment services side. We’re processing over $1 billion a month in payments and still continuing to grow quite significantly month over month. Jaris [ph] I was hoping to have them live here kind of mid-month in October.
We’ve got a couple T’s to cross and I’s to dot. We should be live by month in early November at the latest. So everything’s positive. We have a number of folks that we’ve been completing due diligence that are live and into pilot programs and are actually opening real accounts with real customer [indiscernible]. So it’s first quarter next year. It should be really, really strong and hopefully we’ll get a couple over the finish line and turn up some volume here in December. Obviously, the credit card world shuts down. I think this year the blackout date is November 10. So we’re pressing real hard to get a couple through final due diligence in order to get their credit card systems moved and repointed our direction before November 10.
So if that doesn’t happen, then it goes into mid-January before they reopen. But not a tremendous amount of impact here in the fourth quarter. But we could – I think first quarter next year, we’ll make as much as we did in the whole calendar year here of 2023.
