Brett Pharr: I can talk about that in general terms. There’s almost nobody new coming into this right now. They’re all scared to death. So this is somebody that might be three to five years in the industry and they were connecting with a different bank partner. They’ve got a workable business model that has enough scale to meet our minimums and they’re coming. The days of FinTechs coming with venture capital and knocking on the door and saying, “Hey, I want to start and do this new cool idea.” We’re not seeing any of that. That’s pretty much gone. And it’s really the bigger ones that have already have some scale and volume that are trying to find a place to put it.
Tim Switzer: Very interesting. Have you found that this has helped with your pricing within your contracts as well?
Brett Pharr: Yes. It’s all hand-to-hand combat, right? Because what you’re sitting here doing is you’re saying, okay, here are additional risk and appliance requirements you have to do. So that has a cost with a partner. We’re in an advantaged position of, you got safety here and there’s fewer people that will take on this business. So yes, we can ask for margin. So it’s not just a price gouging kind of environment we’re in, is still in negotiation, but there’s business now that has margin in it. That’s reasonable for the risk and compliance processes we have to carry out. And there had been times in the past when that was not the case and we walked away.
Operator: Thank you. [Operator Instructions] The next question is from David Feaster with Raymond James. Your line is now open.
David Feaster: I just wanted to touch on a few of the newer products that we’ve talked about, like early wage access and faster payments, for instance, more embedded finance. I’m curious maybe where we are in the product development and roll out of those and kind of where we are in, and when would you expect to see some more tangible benefits from those initiatives?
Brett Pharr: Yes. I mean, those are all for the most part, startup things, particularly early wage access. And those programs have to grow and the partners have to connect with the payroll companies, et cetera. So they’re not at a scale that would reach any level of materiality yet. But they seem to have a lot of promise. They are growing and we’re confident in it. Faster payments and better finance, I mean, those are very broad terms for a whole bunch of little ideas and niches and each of them. The beauty of that is, it’s non-interest income fee income that we’re talking about, which is something that we want to emphasize. But they’re coming, but there’s nothing in there that I would say is going to show up with a significant scale individually, in the next year or two, but collectively, I think you’re going to continue to drive us more towards a non-interest income, which is what we need.
David Feaster: Yes. And maybe to that point, one other thing that we’ve talked about in the past is maybe some more managed services, especially just given the regulatory compliance headwinds in the industry, like we just talked about, right. It could be a huge opportunity. I’m curious is investment in human capital, like you guys alluded to, to support that or just your own back office. And so again, what is the investment in the human capital that you guys are doing? What is that for? And then at what point does maybe some managed services, become more interesting to you?
Brett Pharr: Yes. I mean, I think part of this is, is you need to have a mix of two things. You’ve got to have a mix of the right human capital that understands all the risk and compliance elements, which I would argue we have, and we have the best in the industry. The other side of that is having a technology that’s coupled with that. So you can carry out these managed services and we’re investing a lot. A lot of the people investments we’re talking about are from a technology perspective, et cetera. And we’re going to continue to do that and get it to where it’s, as automated and scalable as we can be. And then we will definitely be looking at what you’re talking about because there are some target opportunities on different topics where we could do managed services. So it’s not immediately on the horizon, but it is definitely something we’re thinking about.
David Feaster: Okay. And then, maybe last one for me, just touching on credit, you guys have done a great job managing credit. Non accruals have come down, past dues did increase though a little bit. I just wanted to get your sense on credit more broadly expectations for — you can credit going forward and the health of your clients from your perspective. You did touch on being a bit more selective in equipment finance and structured finance. And maybe those are two segments where you’re slowing down a bit, but I’m just curious your thoughts on credit more broadly.
Brett Pharr: Yes. I mean, the structured finance and equipment finance are — for the most part of our cashflow lending. Now they’re all secured, but the cashflow lending, so you want to watch those and our larger equipment finance things tend to be with the top fortune 100, 200 kind of companies. And so we’ll do those where the yield makes sense in a particular niche that we’re interested in and it’s mission critical collateral, et cetera. And so where I’m really excited is working capital because it’s coming in and the transactions are happening now. Now, keep in mind there that’s not about the health of the client. That’s about the health of the collateral. And we only get involved in those and stay involved in those, if there’s the health of the collateral.
