BJ Losch: Hey, Alex, it’s BJ. I would generally say that we expect them to be in this range. There’s lots of factors that go into it everything from demand from buyers and poolers to trade-offs of what the yields might be on those pools and securitizations for SBA relative to other alternative investments like treasuries or conventional mortgages backed by the government et cetera. So there’s a lot that goes into it. If you go two or three years ago the enhanced premiums we saw were from some of the enhancements coming out of the pandemic as it related to higher guarantees and those types of things which have burned off. So 105 is probably a good place to assume for the next several quarters. USDA we do expect to eventually come back.
But the way that those work is we’re not able to sell the guaranteed portion of those loans until the project is actually operational. So when we book the loan there’s construction that builds up over 12 months to 18 months let’s say. And then once the project is finished we can then sell the guaranteed portion. But if you rewind 12 months to 18 months the rate environment was a lot different. So therefore the rates on the guaranteed portion of what we originated in USDA is just not as attractive for sales right now. But what we’re putting on now as rates have risen will be very attractive going forward when the guarantee is ready to be sold. So that’s why we’re optimistic that at some point hopefully starting next year we’ll start to see more USDA sales volume but it’s been obviously nonexistent over the last four to six quarters.
Alex Lau: Thank you for that. My next question is on checking accounts. Can you give us an update on the operating account initiative in terms of account growth customer usage. When do you think the non-interest-bearing deposit mix will start increasing from the 2% today to say 5%? Will it be measured in quarters or years?
BJ Losch: So I think right now as of today we’re probably around $200 million new operating accounts. We were in pilot most of last year and as of September 1 we are asking requiring that loans that we fund to be funded into a Live Oka checking account. I think that’s going to be incredibly helpful to ramp. But that just was instituted in September 1. So we’re still in the very, very early innings of growing our checking accounts. But if we’re at 2% today Alex I can’t — it’s not going to be measured in quarters, but I think if you measure it in years we’re going to continue to see steady improvement from the 2% range hopefully up into the 10% 15% plus range over the next several years which will deepen customer relationships make those stickier ability to keep lending customers longer in addition to deposit accounts and of course change fundamentally the mix of our funding which will provide a tailwind to.
So it’s going to be a long-term effort but one that’s going to be a gift that keeps on giving for years to come.
Alex Lau: Great. Thanks for taking my questions.
BJ Losch: Sure, Alex
Operator: And there are no further questions at this time. I will turn the call back over to Chip Mahan, Chairman and CEO for final comments.
Chip Mahan: Final comments are thanks for joining today and we shall be talking to you at the end of January.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for joining and you may now disconnect your lines. Thank you.
