Frank Schiraldi: Just wondering on the targets you give in the near-term. Now obviously you got the EBITDA positive ahead of schedule. You talked about getting the target of processing more than 50% of all transactions in that segment of the market. What does that imply or what are your thoughts on timing there? What does that imply maybe for any sort of guide you can give on near-term profitability on TriumphPay. And finally, on that front, any targets, you saw really nice growth in network transactions. Any sort of targets you can share or thoughts you can share on continuing to ramp that up?
Melissa Forman: I think overall, we look at, as Aaron said, in the opening at five year time spans. And so when you think about the milestones that we laid out for TriumphPay of, number one, we just want to maintain EBITDA profitability throughout the year and beyond. But the second of having — touching 50% of all brokered freight transactions, we still have a ways to go. We’re at one of three transactions there, 33%. And so we’ll continue to move forward on those. How quickly that happens is certainly going to depend on the market and our organic growth that we’ve been able to demonstrate, we’re continuously doing and we have very strong pipelines. The last one that is important, and again, would be further out into that five year plan is to be able to hit that 50% EBITDA margin on our core business. And so there at what date we plan on doing that. We won’t be able to give you that kind of direction right now, but within the next five year term.
Aaron Graft: And I have one more to add. And I just want to also pause at this moment and say what the TriumphPay team did, and it’s always the entire team. The TriumphPay team doesn’t operate in isolation from the rest of the enterprise during this past year was exceptional, absolutely exceptional. But the overall enterprise, what everyone did to pull together in the face of a very difficult environment was exceptional. But there’s one other thing I want to add to Melissa’s, what she said. And at the stage we are in with TriumphPay, we think this is still a revenue growth story, not just an EBITDA margin story. So if you look at revenue growth in 2023 in the face of a falling market, pretty impressive. I also think about achieving that goal we laid out several years ago of $100 million in total revenue.
We’re at about 50% of that goal. We originally thought we would need to get to $100 million of revenue on $75 billion of transactions in order to breakeven. What we have learned in this journey is there’s other ways to deliver value with the network that we’ve been able to monetize that we didn’t foresee and that is a most welcome sign. So we think about full year EBITDA margin profitability for 2024. There will be volatility quarter-to-quarter with these investments we’re making with the freight markets we can’t make any predictions related to that. Number two, we were after 50% of all brokered freight as Melissa alluded to, and we’re within a couple of large names of achieving that goal. And that’s a great — it’d be a tremendous thing to touch one out of every two transactions.
Number three, getting to $100 million in revenue, roughly doubling the revenue from where it is currently. And then long-term, we believe, just like other card networks that this business should operate at a 50% EBITDA margin or better. And all of that, as Melissa said, in the next five years is the vision to go and deliver. And that’s about as specific on timing as we can be at this point.
Frank Schiraldi: Okay. All right. I appreciate that. And just on LoadPay, I just want to make sure I understand, generally, when a traditional bank is getting into — and you guys sort of lay out the different partners and what they generally do in these relations or in these build-outs. But so are you — generally, I think about a more traditional bank partnering with the FinTech to build out the more customer facing side of things. In this case, is it Triumph that’s sort of doing the whole performing the entire from customer facing side of things down to the more traditional banking as a service piece? Is that fair? And then generally, I’ve seen expenses upfront and revenue sort of 12 months to 18 months out. Is that a reasonable kind of timeframe for LoadPay?
Aaron Graft: Yeah, indeed. So we certainly use vendors, but we are doing to develop. And that’s a great question, Frank, and something I want to point out. We will, in the year 2024, spend or I think of it as invest over $110 million in technology. Now that includes our people, and that includes just tech spend away from people. That is over 25%, almost 30% of all of our noninterest expenses. I don’t think that there is another bank that I’m aware of that invest that much in technology. We’re not just here using other people to build the tech and then marketing it under our name. Like this is built from the ground up by us for truckers because we know that there is no other bank who cares about truckers the way we care about truckers.
So it is being built by us. We certainly use vendors as any technology provider would. To the second point, as we think that in the year 2024, you’re going to see roughly $5 million of investment in the LoadPay initiative. Some of that will be capitalized, some of that will be expensed. It would be reasonable to expect revenue to start showing up in 2025. There may be some that shows up in 2024, but we’re not counting on it. We think of this as a 2025 and beyond opportunity.
Frank Schiraldi: Okay. I appreciate that. Sorry, go ahead.
Unidentified Company Representative: I’m just going to confirm that yes, we are serving as the bank sponsor behind LoadPay as well. which is important from an economic perspective because it allows us to capture the float benefit, the fees, leverage our existing systems without as much incremental cost as we might, otherwise, we had rely on another bank sponsor.
Frank Schiraldi: Okay. And if I could sneak in just one more on the — you mentioned in the letter on loan modifications and just wanted to get a sense, I assume, generally, those are — continue to be on the rate side, primarily. If you can share what those modifications generally look like from a rate standpoint in terms of reduction in rate? And then do those — and then if you can just share total modifications end of period or growth in the quarter in the various segments. Thank you.
