Unidentified Company Representative: I can take that one. So to your question about the modifications, yes, they are primarily around rate. They deal with credits that had variable rates and those variable rates had risen to over 10% in most cases. We’re having to realign the rate to reflect the realities of the cash flow of the underlying borrower. So that means we’re taking the rates down to typically between 6% and 6.5%, which you’ll see in our disclosures. The total amount of the modifications we’ve made so far is around $125 million.
Frank Schiraldi: Great. Okay. Thank you for all the color. I appreciate it.
Aaron Graft: Of course. Thank you.
Operator: Our next question comes from Gary Tenner from D.A. Davidson.
Gary Tenner: Good morning. I mute there.
Aaron Graft: Good morning.
Gary Tenner: Wanted to ask about one of your comments in the investor letter or a shareholder letter regarding the renewal of contracts with factors on the TPay network. Was there a particularly kind of large slug of renewals that came in the fourth quarter based on when folks came onboard and joined the network? And can you talk about kind of in general about changes, if any, of the contracts that are more financially beneficial to TPay now that, that value proposition is a bit more proven out?
Melissa Forman: Okay. I think those renewals are important just to speak to you in terms of the entire year. But as we built out the payments that were for factors, they came on later in 2022 and into 2023. Our pricing structure associated with those contracts contemplates the growth of the payments network and renegotiating the pricing to include the new brokers that have onboarded within the year for the following year. We made a conscious decision given the state of the market right now and the pain that factors are feeling with the compressed margins and rates to not increase their fees going into 2023. And we wanted to be good partners for our factoring clients, but what we did, we’re able to determine is that every one of them wanted to re-up their contract and continue leveraging the network, understanding that the value is there and continuing to grow for them.
Gary Tenner: Good. I mean is your sense then — so you chose not to increase the fee component, is there a sense that you will in a better environment, be able to effectively have pricing power to do so even though you kind of…?
Melissa Forman: Yes, absolutely. And those are the conversations that we had with — I’m sorry, I’m sorry, Gary…
Gary Tenner: No, go ahead.
Melissa Forman: I would say, yes, that’s exactly the conversation that we had with our clients is that we wanted to make sure that as the environment in the market recovers, that we would be going back and having those conversations again in 2024.
Gary Tenner: Great. Appreciate that. And then just a quick follow-up. I don’t think that I saw and I’m sorry if I missed it, but the average float at TriumphPay for the quarter. Can you provide that?
Brad Voss: I think it was roughly $300 million.
Melissa Forman: $300 million, yeah. I think we’re sitting right around $300 million in average float.
Aaron Graft: And Gary, the — how that gets accounted for, I think we’ve laid out in the letter before, one of the great things about where float sits now because you’re generating that float on roughly $24 billion-ish in payments is we are self-funding. So any supply chain finance we are doing, where we are injecting liquidity into transactions in order to make them easier for network participants is being funded out of that float and then the excess float, of course, we just treat as if we sell overnight to the Fed at current Fed funds rates.
Melissa Forman: And just one quick point, if I do. The average was $340 million.
Gary Tenner: Thank you.
Operator: Our next question comes from Michael Perito from KBW.
Michael Perito: Hey. Good morning. Thanks for taking my questions. I just had a couple. I mean, there is — I still see a few hands up, so I don’t want to take away everyone’s ammo here. But just to follow up on Frank’s questions around LoadPay. Two questions. One, I was wondering, if you could kind of just give us a really basic example of how you hope the technology to kind of work in the field and what the value proposition is for the consumers itself? And then secondly, behind that, just I believe this is really the first time you guys are going to be doing a kind of banking as a service type setup. Are there any kind of bank regulatory considerations, capital required? Anything that we should be thinking about, just especially if LoadPay really starts to ramp in ’25, ’26 that should be on our radar?
Aaron Graft: So let me take the first part of that, and then Todd can answer the banking as a service piece. So if you think about the use case, and we’ve seen this in multiple fronts, and Tim has certainly seen this in our factoring business. When you think about the end of the day at a factoring company, when you’re starting to bump up against the ACH deadline, right, in different banks time that a different time, but call it roughly 4:00 p.m. Central. There starts to be desperation to get dollars out the door because those truckers need that money to either fill up or whatever they need to do. And so you get really pressured towards the end of the day and certainly coming on holidays and other seasons. And so the ability to not have that deadline, but to be able to push money 24/7 through just what is essentially a journal entry on the books of TBK Bank.
