Live Oak Bancshares, Inc.

good morning ladies and gentlemen and welcome to the q4 2024 live oak bank shares earnings call at this time all lines are in listen only mode following the presentation we will conduct a question and answer session if at any time during this call you require immediate assistance please press star zero for the operator this call is being recorded on thursday January 23rd, 2025. I would now like to turn the conference over to Claire Parker, Head of Investor Relations. Please go ahead.

Thank you and good morning, everyone. Welcome to Live Oak's fourth quarter 2024 earnings conference call. We are webcasting live over the internet and this call is being recorded. To access the call over the internet and review the presentation materials that we will reference in the call, please visit our website at investor.liveoakbank.com and go to the events and presentations tab for supporting materials. Our fourth quarter earnings release is also available on our website. Before we get started, I would like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from our expectations are detailed in the materials accompanying this call and in our SEC filings. We do not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of today's call. Information about any non-GAAP financial measures referenced, including reconciliation of those measures to GAAP measures, can also be found in our SEC filings and in the presentation materials. I will now turn the call over to Chip Mahan, our chairman and CEO.

Good morning, all. As always, we'll have BJ lead off. On deck will be our CFO, Walt, and then I'll have a comment or two before we head to Q&A. BJ.

Thanks, Chip. Good morning, everybody. Happy New Year. If I haven't talked to you or seen you since then, let's get started on slide four and slide five. Live Oak enters 2025 with some really excellent business momentum. We're seeing small business sentiment and activity on the rise. Our loan pipelines are still near all-time highs, and our key growth initiatives such as Live Oak Express, which is our small dollar SBA 7 loan offering, and acquiring and checking relationships are continuing to ramp. Our ability to grow the company was on full display in 2024. We delivered strong PPNR growth on both a reported and adjusted basis, excellent loan and deposit growth, record loan production, a great start to our quest for full relationships with checking account growth and well-controlled expenses, even while continuing to invest in people and technology. The loan disappointment in 2024 was elevated provision in the second half of the year. More on that in a moment. Stepping back and looking at our performance over the last three years, we see some significant improvement in our ability to control what we can control and deliver top-line growth well in excess of expense growth. Starting with loan production and pipelines on slide six, you see the power of the Live Oak lending engine. Not only did we have record loan production in 2024, but as you can see, pipelines have steadily increased as well, meaning as we have closed business, we've more than replenished the pipeline with new activity, which continues to support our optimistic outlook for balance sheet and revenue growth in 2025. As you see on slide seven, this has driven strong PPNR and top-line revenue growth, particularly over the last year, despite a headwind from NIM compression as rates have decreased and deposit rates have temporarily lagged asset repricing. Turning to credit trends on slide eight and nine, while we had been monitoring rising industry default trends, we had not seen meaningful increases in our default activity until the middle to latter part of the fourth quarter. When we did experience this, we took action to appropriately move those through to either impregnate or charge off. While not ultimately surprising given the rapid rise in rates in 2022 and 2023, we had experienced relative stability in our overall portfolio through most of the year. So to see this kind of increase was disappointing. While our default rates remain well below industry trends, we always strive to be much better and we will continue to do so. A bright spot this quarter was a meaningful reduction in past dues to just $15 million or 20 basis points with zero past dues in our entire commercial banking portfolio. One quarter does not a trend make but we are redoubling our efforts to identify emerging issues early and keep that front door closed as much as possible. Context is always important, and there are two distinct advantages that LIVOC has. While we tend to focus on our unguaranteed loan portfolio, over one-third or 34 percent of our loan portfolio is government guaranteed, which is very unique and provides significant credit quality and capital advantages. And second, while this quarter reminds us that we are obviously not fully immune to credit cycles for small business borrowers, you can see on slide nine that both our current and historical performance relative to the SBA lender universe is unmatched due to our deep knowledge and expertise in small business lending. We will continue to lean on and enhance our extensive servicing and watch list processes to assist borrowers where we can. and work through problem credits efficiently. The overall portfolio across both small business and commercial banking remains well managed, and I remain confident in our people and our credit approval and monitoring processes. To wrap up on slide 10, we know who we are and who we want to be, America's small business bank, and how we will get there. As a growth company, I'm very excited about where we're headed. Small business sentiment is on the rise. There's a lot of gas remaining in the loan pipeline tank. We are extending our leadership in SBA. Our new small dollar SBA lending effort is ramping up quickly and will be a meaningful contributor to our results over time. We went from virtually none to $125 million of small dollar loans closed in 2024 and expect to do much more. Checking balances, which were immaterial a year ago, ended the year at about $215 million and continue to build as do full relationships with our customers. About 18 months ago, the percentage of customers with both a loan and deposit relationship with Live Oak was only around 5%. Today, it has almost tripled that percentage at 14%, with 35% of our new loan relationships last year also having a checking account with us. We continue to add new avenues of revenue growth with our commercial banking efforts being the most visible. Our brand and reputation continues to attract and retain the highest quality talent and customers. And we continue to heavily invest in the future, both in our people and our technology. And as our CIO, Renato Derrick, says, the AI wave is here. We can either learn how to surf or drown. and we are confident we will successfully ride the wave. With a big thank you to all of our LiveOakers and our customers, Walt, how about running through some of the financial highlights?

Thanks, Vijay. Let's get started on slide 13 with an overview of our Q4 performance. Earnings per share of 0.2 cents was resolved with a healthy PPNR offset by an elevated provision. Our core PPNR remained flat to the third quarter and up 15% compared to the fourth quarter of 2023, driven by our strong loan production and revenue growth. A few key highlights within our Q4 PPNR figure include loan balance growth from strong production activity offset expected margin compression following the Fed's late September rate cut, enabling our net interest income to stay flat to Q3 of 2024. We're on this point in a few slides. Our secondary market sales increase in Q4 aided by our small loan production efforts, And our core operating expenses were slightly up quarter-by-quarter, driven primarily by growth-driven variable calls, such as FDIC insurance expense and loan-related expenses. The momentum that BJ just spoke to continued in Q4, with strong loan originations of $1.4 billion, our second-largest quarter of loan production in bank history. This resulted in a late-quarter loan growth of 4% net of loan sales, consistently outstanding growth that sets us apart from industry trends. Our customer deposit engine continues to grow, even through a typically weaker quarter of the annual cycle. We are also excited to see our checking balances increase 46% in link quarter as we continue to penetrate our existing borrower base, while also adding checking accounts from new customers. The major themes influencing our provision expense in the fourth quarter are consistent with the comments BJ just made. We are a growing bank, and as such, our good provision won't increase naturally with our growth. And it's not unexpected that variable rate borrowers from years preceding the rate hike cycle would feel the impact of 500 basis points of rate increases and prolonged elevated levels of inflation. Improving inflation levels, 100 basis points of recent rate cuts will certainly help, but these benefits need time to take effect. In fact, these borrowers have only seen 50 basis points of rate relief in the fourth quarter. The remaining 50 basis points from the November and December Fed cuts took effect on January 1st. Now let's unpack the quarter performance a bit more on the following slides. Slide 14 highlights our loan originations by vertical and business unit. As shown on the right-hand side of the page, our Q4 2024 loan origination totaled approximately $1.4 billion, a 45% increase in loan originations compared to Q4 2023. 54% of Q4's loan production came via our small business banking team, primarily in the form of SBA 7A loans, a 35% increase year-over-year. And 46% of Q4's loan production came via our commercial lending team, a 58% increase compared to the prior year. As BJ mentioned, we had a record year of loan origination in 2024 with a total of $5.2 billion, a 33% increase compared to 2023. And yet over the same time comparison, our loan pipeline has increased 24% to $3.6 billion. You can see the year-over-year momentum across our verticals on the left-hand side of the page, with approximately 70% of our verticals originating more production in 2024 than they did in 2023. Overall, 2024 was an outstanding effort by our lending, funding, and operational teams, and we are excited to see their success continue into 2025. Slide 15 illustrates the quarter-over-quarter loan and deposit balance growth, highlighting strong, consistent growth trends throughout 2024 on both fronts. Loan balances were up 4% in the quarter and 17% compared to the prior year. Tremendous growth over a year that saw muted loan growth across the industry. Our customer deposit balances grew 1% in the quarter, impressive considering the strong competition we are seeing across the deposit market and the fact that Q4 is typically a difficult time of the year to grow deposits. We highlighted slide 16 in our last quarterly call and are extremely excited about the continued momentum that we are seeing in building fuller relationships with both our loan and business deposit customers. We now have approximately 3,000 business checking accounts on our platform, and our business checking balances increased 46% in the quarter to $212 million. That is approximately five times or $173 million above where our business checking balances were just one year ago. The percentage of customers with both a loan and deposit account increased for the fourth consecutive quarter to approximately 14%, more than two times what it was at the end of 2023. And more than one-third of our new loan customers also have opened a checking account in Q4, a trend that has increased throughout 2024. Lastly, the savings and CDE balances related to businesses with a checking account at Live Oak have also increased 44% to $334 million. The result of all this expanding our business relationships relationships with our customers is stickier deposits with an average blending cost of funds in Q4 2024 of 2.47%. Approximately 160 basis points or 40% less than our total bank blending cost of funds. Net interest income and margin trends are highlighted on slide 17. As I mentioned on our last call, we expected our margin to compress in this quarter after the Fed cut 50 basis points late in September and our expectation that the deposit market would be initially slow to react given the competitive arena. That being said, despite the near-term margin compression, we expect to maintain our net interest income given our strong growth outlook. As you can see in the top graph, both expectations held true. Our net interest income remains flat to Q3 2024 and 9% above the prior year, despite the 18 basis points of NIM compression in the fourth quarter. A few other key highlights from this page. As I mentioned, our loan growth momentum and pipeline remains robust, which will continue to drive our net interest income going forward. Our margin has been influenced by timing of rate cuts over the past few quarters, with another 50 basis points of reduction to our variable rate loans taking effect January 1st. Yet our margin continues to be supported by the great pricing discipline of our lending teams. Our loan production yields of approximately 8.5% noted in the second bullet on the top right, are 100 basic points above our current portfolio yield of approximately 7.5%, as shown in the top of the table in the middle of the page. There are two primary factors driving our savings rates. First, our growth. We just had three of the largest quarters of loan origination and balance sheet growth in bank history, and the pipeline is not slowing down. We continue to position our products in the market to remain competitive to support our strong loan origination. Secondly, the funding market remains highly competitive. We are seeing downward repricing amongst competitors, but at a cautious pace, especially in the consumer and business savings markets. Our 20% beta on consumer savings and 30% beta on business savings thus far has been intentionally conservative and less in the market as we support our growth. Fortunately, the CD market repricing has been quick to react to Fed changes. Even with a market competitive position, We expect to continue to see near-term tailwinds from RCDs renewing into rates, approximately 100 basis points below the maturing rates, as highlighted in the middle of the page. And lastly, the individual drivers of net interest income and net interest margin movement are detailed on the bottom right of the page. One item to note here was the impact that the quarter's elevated non-accruals had on both net interest income and margin. Q4 non-accrual doubles caused a drag on the interest income of approximately $3 million. and compressed our margin by 11 basis points. Said another way, absent the not accrual impact, our net interest income would have increased 3% quarter-by-quarter, and our margin compression would have been limited to 7 basis points. Moving on to a view of our guaranteed loan sale trends on slide 18. The demand for government-guaranteed SBA loans on the secondary market remained strong, providing consistent gain-on-sale revenue and recycling liquidity back into the bank. Our loan sales typically scale upwards each quarter throughout the year, and 2024's trajectory has been no different, with $278 million sold in Q4 2024 for an average premium of 7%. Expense trends are detailed on slide 19. Our Q4 2024 expenses of $81 million included $1.1 million of a residual investment tax credit impairment from an investment we made in Q4 2023 which also provided a tax benefit both in 2023 and in Q1 of 2024. The remaining quarter-over-quarter growth and non-personnel costs were largely variable-based costs driven by our balance sheet growth. Our teams have shown great expense discipline over the last year, even while adding 62 FTEs, primarily within growth-oriented sectors focused on revenue generation and funding growth, as well as investing in our risk and technology groups within the bank. We will continue to invest in our people and technology to support our growth aspirations, yet remain focused on maintaining positive operating leverage, as we have shown in 2024. Slide 20 illustrates a five-quarter trend of our provision expense, net charge-offs, and our reserve coverage relative to our unguaranteed loan portfolio. It is important to remember that approximately $3.5 billion, or about 34% of our total loan portfolio, is excluded from this view, as it is fully government-guaranteed. While our reserves to our unguaranteed loan portfolio ratio have remained relatively steady over the past five quarters, we have seen an increase in our second-half provision expense, partly due to the approximately $1 billion of loan balance growth in the last two quarters, as well as the increase in classified assets and non-accrual trends that BJ just spoke of. We strive to be proactive, identifying impairments and reserving for them ahead of charge-offs. In the fourth quarter, we took action to quickly move small business to falls through either impairment or charge-off. This, coupled with charge-offs associated with previous large Q3 impairments, resulted in a high level of Q4 charge-offs. We have been, and will continue to be, proactive with provisioning for growth, changes in portfolio performance, and impairments or charge-offs of specific loans when warranted. Our reserve levels remain very healthy. Lastly, slide 21 highlights our capital profile. We remain well above regulatory capital minimums and will continue to ensure that capital levels remain appropriate for our robust growth trajectory. To wrap up, we are happy with our strong PPNR performance and growth trends. We will continue to enhance our credit quality and processes, and we are excited about our momentum as we head into 2025. I will now turn it over to Chip for his final comments.

Thanks, Walt. Before we move to Q&A, just a word on credit quality. When we started this business 17 years ago, we sought to put capital in the hands of American small business folks using a government program that has been around since the Eisenhower administration. The nuances of that program are complex on one hand and create somewhat of a barrier to entry on the other. BJ's slide shows how we perform compared to all other banks relative to defaults. We stand on that record. That said, we can do better. Over the last 36 months, we have originated over $13 billion in loans. We pride ourselves in treating every customer like the only customer and collecting financial statements every 90 days to determine if there is any stress out there. Helping a small business with challenges is more of an art than a science. Beside us is a borrower-friendly agency And yes, we could have been more creative in helping these folks that have the eye of the tiger, and we will. Claire, let's go to Q&A.

Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift your hands up before pressing any keys. One moment, please, for your first question. Your first question comes from Crispin Love with Piper Sandler. Your line is now open.

Thanks. Good morning, everyone. My first question is just on the provision. Walt, I heard some of your comments related to growth and rates, and Chip, really appreciate that credit quality commentary at the end. Are you able to share how much of the elevated provision is related to growth versus specific relationships that are worth calling out? And then do you have a new normal for the provision run rate to support the growth that you've been putting out? I'm just curious if there's any thoughts that you can put around that, any guardrails. Thank you.

Yeah, so this is Michael Carnes, Chief Credit Officer. So I will say that majority of the provision expense is related to loans within our sba portfolio our commercial portfolio has held up really well outside of those three credits we talked about last quarter and so the uh the sba uh industry is showing some signs of of uh weakness and we have uh seen a little bit of that in our portfolio as well but we're focused on servicing and we'll continue to work with all of our customers, as Chip and BJ both alluded to. And I'll remind everyone, too, that we do have very seasoned lenders and credit officers at this bank that have been through challenges in the past, and we are adding experience and expertise to both our special assets team and our servicing team so that we can be creative and work through challenges with our customers, as Chip alluded to.

Great. I appreciate that. So you would say that the provision driven more broadly rather than specific relationships. Is that fair?

Yeah. And we talked about this a little bit on the last call and we have today as well. Our SBA borrowers, small businesses across the country have had to navigate pretty significant challenges over the last few years, especially related to rape and labor issues.

and other economic challenges and inflation so um we we expect to continue to work with all of our customers on that end great uh thank you and then last question for me just on the net interest margin you had the headwind in the fourth quarter which you detailed from the 50 basis point cut in september um which hurt you timing wise but Well, can you discuss the forward outlook a little bit, views on the margin in the first quarter relative to the fourth from your seat, and then just confidence in hitting or getting close to that 350 margin target that you've talked about in the past in 2025 or towards the end of 2025? Thank you.

Yeah, thanks, Crispin. Yeah, I think from Q1 standpoint, we'll have another 50 bps of cuts on a variable loan portfolio that took effect on January 1st. You know, I think you'll see a similar margin here in the near term, really just giving our time, our funding portfolio time to reprice. You know, fortunately, we have a pretty large CDE maturity event in Q1 every year. You know, and the gap between the maturing and renewing rate is pretty large, so that's going to help out. And we're still seeing the market both on business and consumer savings reprice over time, you know, which will, you know, obviously, and move accordingly. I think as you kind of get through further in the year, I mean, there's a lot to be, you know, essentially determined at this point from, you know, what the Fed decides to do. You know, right now we're largely in line with the forward curve with our expectations. You know, I think that 350 target or that objective for margin that we talked to in the last call being more towards the end of 2025 still in play. You know, could it go into early 2026? Potentially. Potentially. as the positive market reacts.

Thanks, Walt. I appreciate you all taking my questions. Thank you.

Your next question comes from Tim Switzer with KBW. Your line is now open.

Questions.

It might be a little early for this, but with the change in administration occurring yesterday, there's a lot of different puts and takes on the macro outlook and the impact of tariffs and where rates will go, all of which I know impacts small businesses quite a bit. Are you seeing that result in any caution from some of your borrowers at all, or maybe even in the other direction from certain industries where They're a little bit more bullish as that impacts your loan pipeline in any way.

Hey, Tim. Good morning. It's BJ. First, I would say it's way too early to actually know what is going to happen relative to the new administration. What I would tell you, though, is two things. One is we do a quarterly pulse survey. with small businesses, not just our customers, but across the country. We did one of those in mid-October, and the sentiment was significantly higher. So that was pre-election. And then you've seen some of the government small business sentiment results come out, and they have been through the roof as well. And we're seeing that in our pipelines, in our activity, as I've talked about at the beginning, those pipelines are still at all-time or near all-time highs. So we are seeing sentiment getting better. Theories around that include less regulation, inflation coming down, more growth opportunity, more capital investment, et cetera. But it remains to be seen. So we'll We're optimistic that there's going to be a favorable environment for small businesses, and that's what we're seeing from our customers and our pipelines right now.

Okay.

Sorry, go ahead. I would also say that the Trump administration has put someone that we're quite familiar with And the Office of Capital Access that is a real pro and knows the industry and the SBA quite well.

Okay, that's helpful. And, you know, as far as the rate outlook goes, rates have moved up a little bit since the end of the quarter. You know, has that impacted or do you think it'll impact SBA margins or secondary market demand at all? Has that created any issues from some of your typical purchasers?

It didn't swap. No, it hasn't. You know, I think most of the time secular market will price in and assumed, you know, they largely kind of aligned with the forward curve. We have not seen any change in our demand. In fact, I think our demand has been stronger here in the last second half of the year with premiums taking up to that 107 range. You know, pricing on small loans, which, you know, obviously we've been focused on recently, still continues to be strong, too. You know, premiums on that are typically north of 110, and, you know, that's maintained regardless, you know, of the recent changes that you've seen.

And, Walt, haven't you seen more activity, more pool assemblers?

We have seen more pool assemblers. There's another few kind of in the pipeline that are working through. So, you know, that's always going to create more demand because basically more mouths to feed. Yeah, so the secondary market, you know, feels like it's in a really good spot right now.

Great. That's good to hear. Thank you.

Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from David Feaster with Raymond James. Your line is now open.

Hey, good morning, everybody. Chip, I just wanted to follow up on your in your closing commentary. You talked about being more creative to help your borrowers. I'm curious if you could expound on that a bit. And is there any new initiatives you're expecting to put into underwriting to or the way that you approach workout. I was just curious what, what, you know, what, what, what, what opportunities do you see?

Yeah, I rather expected that from you, David. Thank you. Um, you know, I'll give you an example, right? I think that, um, we have a lot of young people, as you know, we have 72, 22 year olds that examined financial statements every quarter on most of our borrowers where we can collect them. So we had a, uh, self-service storage customer. It was having some challenges. And then we kind of looked into that later after the fact and said, well, you know, you haven't had a price increase in 10 years. So a guy named Terry Campbell helped us start that business 10 or 12 years ago, left to do something on his own. So we asked Terry to go visit with that customer to walk them through how to do a price increase after 10 years, and lo and behold, they're back in the game. So it's just things like that. It's like just common sense. And Michael Carnes alluded to that as well. We're going to put some more experienced people with a little wood behind the arrow in that area. That's all I meant by that comment.

Okay. And to that point, I mean, I guess, how do you look at hiring? I mean, you're seeing the pipeline at near all-time highs like you talked about, production set to improve. Where do you think you need people or teams to support this level of growth and sustain that pace of growth? And where are you looking to potentially add talent?

Hey, David. It's BJ. We are always looking to add revenue-generating talent. So we're continuing to hire lenders both in our general lending group and in verticals where we see opportunities. So that's kind of one. Number two is we are beefing up our treasury management groups and our deposit groups as we are growing checking accounts, which is particularly exciting to us. But I think what we're really focused on in terms of scalability from this activity and things we're really excited about is what I alluded to at the end of my comments, the effective AI on what we're going to see throughout, not just our industry, but across the country. Neil Underwood, one of our founders, has been around a long time in technology, and he would say this is kind of the third major wave that he's seen beyond internet, cloud computing, and now AI. And we are working with some really interesting companies and software that are doing really amazing things to allow us to take a lot of manual processes and data entry and document collection and tax return collection and bank statement collection, all those types of things out of the grind of what currently happens between a potential borrower and our lenders and underwriters and closers and people in loan operations to streamline those things very efficiently so that we can actually do what Chip just talked about, which is be thinking about how to help customers succeed as opposed to doing a lot of data entry. So, you know, we are very, very bullish on what we can do with AI, as you well know, We are never afraid to experiment with technology, look at new and innovative things that will help us grow. And so we've got a lot of people across our company looking at different types of ways to be able to do that.

Okay, that's great color. Pretty exciting to see what's on the horizon. Touching on the business checking balances, we've seen kind of an acceleration in growth You know, we're still in the early innings there. First, I guess, how's reception been? And then you talked about, you know, 35% of new relationships now have a deposit relationship too. Is that a realistic target for that book over time? Or do you think you can actually do better than that?

Well, I'll start with the latter, David. I think we can do far better than that. You know, your typical bank would do at least twice that. if not more, with a mature checking account offering. When we launched it really in full at the beginning of this year, we had a very strong offering, but not a completely full offering. I'd say we're at about 95%, 90, 95% of the feature functionality now that we wanted to have. And so, you know, we had to make, it's a new muscle. for a lending organization to then ask for deposits. And so we started slow. We started with education of our people. We then would educate our customers, and we've started to see that ramp. If you look at Walt's five-quarter trend, started at about 20% of customers. Now it's up to 35, and we continue to see that growing every month and every quarter. It's hard to move a checking account. That's why we're most focused, not completely, but most focused on new customers. Because at that moment of transition, at that moment when we are putting capital in their hands to grow business, is the best time for us to be able to ask for the opportunity for a full relationship with them. And we're starting to see really, really good success. So We've talked about before that there's no reason over the next several years we shouldn't have 10% to 15% of our deposit mix, of customer deposit mix in checking accounts. That's our goal. It takes a while to ramp that up, but going from virtually nothing to $215 million in balances is a pretty good start. So we're excited about where we can take it.

And, BJ, I think we have a secret weapon, too. Wilmington, North Carolina. Southeastern North Carolina has 350,000 folks, and last week we hired three experienced bankers to attack small business Wilmington and others. I have been told, I'm not sure if it's true or not, that the big guys like B of A and Wells do not have any small business lending officers in our market area, and we're going to go like hell to see if we can promote ourselves as the only hometown bank where we live. That's great.

If I could squeeze one more in, I wanted to touch on the small-dollar SBA. Obviously, we're still in the early innings here. I'm curious what you're seeing, how it's performed relative to expectations, any tweaks you need to put into the process and the model. I think you did $125 million this year. What do you think we can do in 2025?

So, David, I'll start. We did $125 million of small-dollar loans after doing virtually none last year, and quite candidly, with not a lot of technology. Our technology teams were ramping up as quickly as they could to help assist in our processes, and they put some things in place. But most of that $125 million was sheer grit and grind from our people getting out there, talking to customers, getting web leads, following up on those leads, and trying to create as quick and efficient and safe a process as we possibly could to stand up this business. Now, we've got fantastic technology. from origination all the way through servicing in our Live Oak Express platform that is going to significantly accelerate our capabilities and enable our people that have been doing a lot of everything from the beginning of the process to the end to actually spend a lot more time on prospecting and underwriting services to get more through the pipeline. So all of that to say, if we did 125 this year, I would be disappointed if we didn't do more than double that in 2025. And we'll continue to ramp.

Terrific. Thanks, everybody. Thanks, David.

There are no further questions at this time. I will now turn the call over to Chip Mahan for closing remarks.

Well, we thank everyone for dialing in today, and we look forward to seeing you in April. Good day.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.