That will 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 have tended to do larger dollar credits. We’re very happy to provide access to capital for small business owners, and this very much aligns with what the FDA and the current administration are looking for from us and the industry. So we are excited about that. And it just adds to our ability to serve more and more small business customers. So more to come on this, but we expect it to really start to ramp towards the back half of the year.
David Feaster: And is the plan still to sell all of that production? And where are gain on sale of smaller dollar relative to what you typically sell?
Walt Phifer: Hi Dave, this is Walt. Yes, the plan is 100% sales model related to small loan SBA. Premiums, their range typically anywhere from 110 to 113 depending on your spreads. But historically, those have held true. The secondary market views those loans as kind of the [credit loan] (ph) because you can essentially create larger pools with more diversification. So high demand, good premiums, historically, and we expect those — or expect that to continue to go forward.
David Feaster: 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? We’ve seen obviously nice growth. But are we still crawling from your perspective? And maybe when do you think that we shift to walking or even start running?
Walt Phifer: I’ll start. Yes. Dave, this is Walt. So, on our business price — or business deposit pricing, our savings is at 4%. Our CDs are the same, as our personal CD rate offerings. And then obviously you have a non-interest bearing checking. As far as the kind of where we are in the crawl-walk-run, I’d say we’re very much in the crawl stage. I think we are working as aggressively as we can to sell those to our existing customers as well to new customers. I think it will take time to ramp on the checking side, just where we are in the market right now where essentially depositors can get very nice rates on the interest-bearing side.
BJ Losch: Yes, I think just to clarify. We are on a crawl as it relates to checking. And there is a long runway there. We are absolutely sprinting on business deposits. 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.
James S. Mahan: Yes. I would just add that — David, this is Chip. So I would just add this 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 are 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 in early days, and I would still put that piece in the crawl area. We can get better there — and we will get better there.
David Feaster: That makes sense. And honestly, that might play into — as you do more conventional lending, play into more of that growth. And so maybe touching on the conventional lending side. Looking at one of your charts, it looks like you’ve seen a decent amount of growth on that front. There is 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 do you just think about growth of conventional production and shifting underwriting standards in credit quality there?
BJ Losch: 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 health care. So we are trying to be very niche oriented in how we grow that. And over the last five years, we have grown our specialty finance business ten-fold 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 could be more difficult to underwrite and approve. So we are pretty bullish on what we can do to grow that responsibly. And in addition to that, talking 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 are 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.
