Q1 2024 Open Lending Corp Earnings Call
[music].
[music].
Yeah.
Speaker Change: Good afternoon, and welcome to open Lendings first quarter 2024 earnings Conference call. As a reminder, today's conference call is being recorded on the call today are Chuck Yale Chief Financial Officer, and interim Chief Executive Officer, Sylvia Kim Cambria.
Chief Accounting officer earlier today, the company posted its first quarter 2024 earnings release and supplemental slides to its investors relations web site in the release you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures.
Speaker Change: As discussed on this call before we begin I would like to remind you that this call may contain estimated or other forward looking statements that represent the company's view as of today may seven 2024 open lending disclaims any obligation to update these statements to reflect.
Speaker Change: Future events or circumstances. Please.
Speaker Change: Please refer to today's earnings release, and our filings with the SEC for more information concerning factors that could cause actual results to differ much.
Speaker Change: Materially from those expressed or implied with such statements and now I'll pass the call over to Mr. Chuck Yale. Please go ahead.
Charles D. Jehl: Thank you operator, and good afternoon, everyone. Thank you for joining us today for open Lendings first quarter 2024 earnings conference call.
Charles D. Jehl: Before I discuss our quarterly highlights I want to take a moment to thank our board of directors and our team members that open lending for their confidence and trust in me.
Charles D. Jehl: We have an experienced executive leadership team across functions and joining me today on the call is Cecilia Kimbriel, our chief Accounting Officer, who will discuss the Q1 financial results in more detail with that let's review the first quarter financial highlights I'm pleased to report than the first quarter of 2024, we exceeded the high end of our guidance.
Cecilia Kimbriel: Range for both certified loans and revenue and exceeded the midpoint for adjusted EBITDA. Despite the continued impact of elevated interest rates automotive industry specific challenges and credit union lending capacity constraints.
Cecilia Kimbriel: We certified 28189 loans during the quarter, which was a 7% sequential increase compared to fourth quarter of 2023.
Charles D. Jehl: We generated total revenue of $30 7 million and adjusted EBITDA was $12 5 million.
Speaker Change: Looking forward, we are encouraged by the trends that we're beginning to see in the auto industry and the signs that our credit union customers linear capacity challenges are improving slightly.
Speaker Change: First let's turn to the automotive industry.
Speaker Change: Cox automotive recently increased their 2024 sales forecast for new and used autos the latest forecast anticipates, a one 6% and three 2% your growth in new and used retail Saar, respectively compared to flat for both metrics and the original forecast for 2024.
Speaker Change: Affordability has also improved as inventory levels continue to build with new auto has seen a 47% increase in used auto inventories, realizing an 8% increase year over year.
Speaker Change: As a result vehicle prices moderated with new auto transaction prices decreasing by two 7% and used auto prices decreasing by two 5% year over year.
Speaker Change: To put this in perspective, the Cox Moody's affordability index, a measure of weeks income needed to purchase a new light vehicle declined to $36 nine weeks in March down from its peak of almost 42 weeks in fourth quarter of 2022.
Speaker Change: While this is the third consecutive months of decline, we still remain above the pre COVID-19 average of 33 to 34 weeks.
Speaker Change: For used vehicles Cox revised its forecast for the Manheim used vehicle value index, which is now expected to decline a modest <unk>, 7% by the end of 2024 compared to <unk>, 5% increase previously.
Speaker Change: This should lead to continued moderation in used vehicle prices, which should further improve consumer affordability.
Speaker Change: We are encouraged by the improvement of these key metrics, but recognize the auto market conditions are still transitioning towards a return to normalcy inventory.
Speaker Change: Inventory levels are improving but remain more than 20% lower than pre COVID-19 averages while transaction prices in the manheim remain over 30% higher.
Speaker Change: Additionally, interest rates remained elevated at 23 year highs and are likely to be higher for longer based on the latest outlook from the federal reserve.
Speaker Change: This translates to a lower saar than pre Covid averages with 2024 total use Saar forecasted to be $36 6 million units in 2024 total new Saar forecasted to be $15 7 million units.
Speaker Change: While growing relative to 2023, those were approximately 10% lower than pre COVID-19 levels, let's turn to our credit Union customers.
Speaker Change: Preliminary first quarter 2024 results from Callahan, a leading third party data provider within the credit Union industry reflected a 78 basis point gain or almost 40% increase in share or deposit growth from 199% in the fourth quarter of 2023% to 277% at the end of the first quarter of 2020.
Speaker Change: Four.
Speaker Change: We are encouraged by the fact that we have observed two consecutive quarters of improvement in share growth across the credit Union industry.
Speaker Change: That said loan to share ratios remain at approximately 85% pre COVID-19 highs. This indicates that credit unions continue to experience lending capacity challenges.
Speaker Change: We closely monitor these two key metrics that serve as leading indicators of credit Union loan activity.
Speaker Change: Specifically, we are looking for sustained improvement in share or deposit growth, which would subsequent lead to a decline in loan to share ratios.
Speaker Change: As seen in prior cycles. When this occurs there was a corresponding increase to credit union lending capacity.
Speaker Change: Now I'll provide an update on our 2024 strategic priorities.
Speaker Change: We remain focused on optimizing our core credit Union and OEM businesses, while expanding our penetration into bank and finance companies burst on optimizing our credit Union and OEM businesses, where our expectation is to excel as trusted partners for both our customers and insurance carriers, while controlling our cost and optimizing profit margins.
Speaker Change: Yeah.
Speaker Change: We have and continue to enhance the capabilities of our account management and sales efforts to deliver superior service to our existing customers in order to expand our wallet share and to more efficiently acquire and onboard new customers.
Speaker Change: During the first quarter of 2024, we added 11, new accounts compared to eight in the first quarter of 2023.
Speaker Change: <unk>, 40% increase year over year.
Speaker Change: Important to note of these 11 accounts approximately a third where larger accounts with combined total assets of over eight 5 billion.
Speaker Change: In addition, I am pleased to report the 30% of these 11, new accounts have already produced their first certified loan.
Speaker Change: Which is a testament to the efforts of our sales and account management teams execution of our strategy of getting a new account to revenue generation faster by focusing on institutions with loan origination systems for which we already have integrations.
Speaker Change: An example is one AG credit Union, which is headquartered in Phoenix, Arizona with over $3 4 billion in total assets and has a healthy loan to share ratio.
Speaker Change: Through our partnership one a Z will utilize our lenders protection platform in their market under their recently launched credit Flex Auto program, which will help them expand access to auto loans for the underserved populations of Arizona, while also protecting the assets of its members from the downside risk of default so on auto loans.
Speaker Change: Additionally, we recently hosted a client advisory Council meeting with several of our top credit union customers to discuss industry trends their experience and gather feedback on new tools and capabilities to ensure open lending is positioned to deliver continuous innovation and superior support to our customers turning now to our product.
Speaker Change: We continue to be encouraged by the results of our new enhanced lenders protection proprietary scorecard launched in the fourth quarter of 2023.
Speaker Change: The new scorecard his decision to over $1 2 million applications and is performing in line with our expectation.
Speaker Change: As you May recall, the new scorecard incorporates three new alternative data sources, providing us access to $350 million detailed transactions.
Speaker Change: Over $170 million consumer checking accounts and expanded suite of credit report attributes developed and maintained by Trans Union.
Speaker Change: Our AI and machine learning based model can identify the most predictive credit risk attributes for borrowers.
Speaker Change: With the early data from a full quarter of operating under our new scorecard, we are even more confident in our ability to lower default frequency by better predicting and pricing risk, which we expect will further improve the performance of open lending portfolio.
Speaker Change: To speak a bit more about performance, while the macroeconomic pressures over the last 18 to 24 months have been challenging our portfolio has performed in line or slightly better than the average delinquencies for the S&P consumer finance sector in the non prime credit spectrum.
Speaker Change: Based on the age of our back book, where the worst vintages are near the end of their peak default period, we expect to see our delinquency rates continue to flatten and moderately improve in 2024.
Speaker Change: Additionally for the most recent 2023 vintages, we're seeing signs of improved outlook based on early delinquency metrics. This is a testament to the pricing and the credit tightening actions that we took over the last two years, including a nearly 20% increase in insurance premiums across our portfolio since first quarter of 2022.
Speaker Change: As well as early validation of our new scorecards ability to better predict defaults and lower lowering frequency.
Speaker Change: Furthermore, we continue to modify our program to yield better results for our lenders our insurance carrier partners and ultimately open lending.
Speaker Change: In the first quarter of 2024, we tightened our credit and underwriting guidelines by adjusting our score cutoff to eliminate the worst performing credit beds. In this period of challenging macroeconomic conditions, we are committed to protecting the profitability of all stakeholders in our ecosystem by saying no to loans that unnecessary risk on open lending.
Speaker Change: Our carrier partners and our lenders.
Speaker Change: In addition to credit tightening we commenced targeted price optimization that is calibrated to our new scorecard. This is an ongoing process, but the first change led to an premium decrease in our direct channel, which is our best performing channel from an ultimate loss ratio perspective.
Speaker Change: This is important as all stakeholders can benefit with increased certified loan volume from our lower risk channel.
Speaker Change: In addition, we implemented a premium increase on lower performing portions of our book within the indirect channel to more appropriately priced for the risk.
Speaker Change: With the launch of the new scorecard, we can be more targeted when pricing for risk.
Speaker Change: Turning to our insurance carriers, we recently hosted our partners in Austin, It was a great opportunity to discuss our underwriting strategies and our priorities and gather feedback to ensure full alignment.
Speaker Change: We are encouraged that they share our optimism for the future and support the actions that we are jointly taking in our underwriting and pricing.
Speaker Change: Now, let's turn to our second strategic priority for 2024 further expanding our penetration into bank and finance company market.
Speaker Change: We're open lending has historically been underpenetrated relative to the credit Union and markets.
Speaker Change: Based on our conversations to date, we believe these lenders have the capacity and the appetite to lend in this environment.
Speaker Change: We recently hired an experienced team who will bring existing relationships and can sell our unique value proposition into this market.
Speaker Change: The team has built a robust pipeline of opportunities, including ongoing conversations with large national banks community and regional banks and finance companies.
Speaker Change: While we are encouraged by the progress we're making we understand these banks and finance companies have longer sales cycles and more complex integrations, but based on our analysis. The average participant represents a meaningfully larger sort opportunity than we traditionally see from credit unions.
Speaker Change: Before I turn the call over to Cecilia to go over our first quarter 2024 result, I wanted to personally thank the entire team at open lending for your continued support and dedication to our company.
Cecilia Kimbriel: I am proud of what we've accomplished and your execution to deliver these positive results. Despite the current market backdrop IRA.
Speaker Change: I remain confident in the long term opportunities ahead of us and I'm encouraged by the early signs of improvement in market conditions, the underserved near and non prime consumers need us and our lender partners now more than ever with that I'd like to turn the call over to Cecilia.
Cecilia Kimbriel: Thank you Chuck during the first quarter of 'twenty 'twenty four we facilitated 28189 certified loan compared to 32408 certified loan in the first quarter of 2023 total revenue for the first quarter of 2024 was $30 7 million, which includes <unk>.
Cecilia Kimbriel: 606 negative change in estimate of $1 1 million associated with our profit share compared to $38 4 million in revenue in the first quarter of 2023, which included a positive change in estimate of $7 million as Chuck mentioned Q1 certified learned and revenue both exceeded the high end of our <unk>.
Cecilia Kimbriel: Guidance range.
Cecilia Kimbriel: To breakdown total revenues in the first quarter 2024.
Cecilia Kimbriel: Program revenues were $14 3 million profit share revenues were $13 9 million net of the previously mentioned negative change in estimate and claims administration fees and other revenue were $2 5 million.
Cecilia Kimbriel: As a reminder, profit share revenue is comprised of the expected earned premiums less be expected claims to be paid over the life of the contract and less expenses attributable to the program.
Cecilia Kimbriel: Net profit share to us is 72% and then monthly receipts from our insurance carriers reduced our contract asset.
Cecilia Kimbriel: <unk> share revenue in the first quarter of 2024 associated with new originations was $15 million or 533 per certified loan as compared to $17 9 million or 552 per certified loan in the first quarter of 2023.
Cecilia Kimbriel: The first quarter 2024, 1.1 million negative change in estimate is associated with cumulative total profit share revenue recognized approximately $395 million for periods dating back to January 2019, which was the ASC 606 implementation date and represents over.
Cecilia Kimbriel: 400000 insurance enforced loans in the portfolio importantly to put this in perspective, the cumulative profit share change in estimate since 2019 is a positive $4 4 million.
Cecilia Kimbriel: Operating expenses were $17 7 million in the first quarter of 2024 compared to $15 8 million in the first quarter of 2023.
Cecilia Kimbriel: Operating income was $7 3 million in the first quarter of 2024 compared to operating income of $17 1 million in the first quarter of 2023.
Cecilia Kimbriel: Net income for the first quarter of 2024 was $5 1 million compared to a net income of $12 5 million in the first quarter of 2023.
Cecilia Kimbriel: Basic and diluted net income per share was four cents in the first quarter of 2024 as compared to 10 in the first quarter of 2023.
Cecilia Kimbriel: Adjusted EBITDA for the first quarter of 2024 was $12 5 million as compared to $21 2 million in the first quarter of 2023.
Cecilia Kimbriel: Excluding profit share revenue change in estimate we generated $13 6 million in adjusted EBITDA in the first quarter of 2024, and there is a reconciliation of GAAP to non-GAAP financial measures can be found at the back of our earnings press release.
Cecilia Kimbriel: We exited the quarter with $380 6 million and total assets of which 247 million with an unrestricted cash $31 9 million in contract assets and $68 million and net deferred tax assets.
Cecilia Kimbriel: We had $169 1 million and total liabilities of which $143 2 million was outstanding debt.
Cecilia Kimbriel: I would like to turn the call back over to Chuck to discuss our guidance for the second quarter check.
Charles D. Jehl: Thanks, Cecilia now moving to our second quarter 2020 for guidance.
Charles D. Jehl: While we were encouraged that market conditions appear to be improving the following factors were considered in our second quarter 2020 for guidance.
Charles D. Jehl: Continued high interest rate environment, and the possibility of being higher for longer.
Charles D. Jehl: Lower than pre COVID-19 inventory levels and higher than historical vehicle prices continue to present affordability challenges for consumers.
Charles D. Jehl: Used in new Saar that remains lower than pre COVID-19 levels, despite year over year growth.
Charles D. Jehl: Near historic high loan to share ratio combined with historically low share growth that continue to limit credit unions lending capacity.
Cecilia Kimbriel: And senior lending officers continue to wait their portfolios toward prime and Super Prime as they manage their risk appetite and balance sheets.
Cecilia Kimbriel: Accordingly, our guidance for the second quarter of 2024 is as follows total.
Cecilia Kimbriel: Total certified loans to be between 27030 thousand.
Cecilia Kimbriel: Total revenue to be between $29 million and $33 million.
Cecilia Kimbriel: And adjusted EBITDA to be between $10 million and $14 million.
Cecilia Kimbriel: We have a strong balance sheet with no near term debt maturities and generate positive cash flow, which provides us with the financial flexibility to make targeted investments to accelerate revenue growth.
Cecilia Kimbriel: Which positions us well to capture pent up demand as market conditions continue to improve.
Cecilia Kimbriel: We will focus on optimizing our profitability by both accelerating revenue and controlling cost.
Speaker Change: We'd like to thank everyone for joining us today, and we will now take your questions.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.
Cecilia Kimbriel: First question comes from Joseph Baffie with Canaccord. Please go ahead.
Joseph Anthony Vafi: Oh, Hey, guys, good afternoon, and nice to see the steady results here in the quarter just.
Joseph Anthony Vafi: I wanted to drill down into the sequentially up starts a little bit if.
Joseph Anthony Vafi: If we could kind of maybe discuss seasonality if tax season really had anything to do you think with Q1 or do you think it's just the number of partners growing and maybe some other incremental improvements to the to the to the backdrop and then I'll have a follow up.
Speaker Change: Yeah, Hey, Josh Chuck Yeah.
Charles D. Jehl: Yeah, I think I think Q1, obviously art yeah, I would say Q1 seasonally is our best quarter I'd say March is usually one of our best months of the year and that is driven by the tax season, and the uptick there and tax refunds, but we're.
Josh: We're encouraged by the volume and what we're seeing into the second quarter as well and so you know that March was a good month, though for us do about due to the tax season.
Speaker Change: Okay, that's great and then maybe on.
Speaker Change: Some of these larger strategic partners and in discussions and integrations and the like.
Josh: Do you think it's do you think it's feasible to see some of these bank partners.
Josh: Kind of go lives this year at this point or.
Cecilia Kimbriel: Or do you think that you know.
Cecilia Kimbriel: Or are there some other factors that we should consider here relative.
Cecilia Kimbriel: To the pace of uptake with them. Thanks a lot.
Speaker Change: You bet, Yeah, and as you think about the bank initiative, we've hired the team they're on board they bring strong relationships to US you know they're in the process of getting fully licensed and all that and up to speed on our products. So there will be some obviously some ramp time once those actually go live in.
Speaker Change: More complex integrations with their L. O S is as we've stated but yeah. We think we think we can get.
Speaker Change: Some of those wins to maybe begins a sort of high end loans later this year.
Speaker Change: Great. Thanks, a lot thanks, Chuck Australia Yep.
Speaker Change: Thanks, Joe.
Speaker Change: And the next question comes from Kyle Peterson with Needham. Please go ahead.
Kyle David Peterson: Great. Good afternoon, guys. Thanks for taking the questions.
Kyle David Peterson: Wanted to.
Kyle David Peterson: Touch a little bit on I know you guys mentioned some of the credit tightening initiatives that you guys took I guess could you clarify I guess one in the quarter you guys took those actions in any estimate on kind of what percentage of the book or like loans here.
Kyle David Peterson: Volume that that.
Kyle David Peterson: That applied to.
Speaker Change: Yeah, well, we'll call yeah. This I'll start we implemented the new scorecard in October our LP 2.0, So we had a full quarter in Q1 under the new cards enhanced scorecard.
Speaker Change: And do you know the critic tightening that we took in the quarter was more around our orange score the score cutoffs raising it from 475 to about a 575 cutoff. So were just taking less risk on those more risky credit bins and its about you know about a 5% reduction in our.
Kyle David Peterson: And our volume, but as we said in the in the in the prepared remarks.
Kyle David Peterson: In this environment you know what we want to do is as you know with the enhanced scorecard.
Kyle David Peterson: <unk> predict default.
Kyle David Peterson: More ability of our predictability there and then take less risk. So that's what the card is doing and we're pleased with the $1 2 million apps to date that we've processed underwritten and the ability to do that and execute so so that's really the main tightening and as you know over the last couple of years.
Kyle David Peterson: We've increased insurance premiums as well.
Kyle David Peterson: Two 5% last Q2 of last year and about 13% in Q2 of 'twenty two.
Kyle David Peterson: And that those are also.
Kyle David Peterson: Benefiting from those and actually cutting off a higher risk premiums for that and actually you know pricing some of those loans out there more risky.
Kyle David Peterson: And better capture rate.
Kyle David Peterson: We're seeing under the new cards are for the better credits as well. So that's another good result, and that that's a positive flow into our our profit share as well as really you will see that overtime.
Kyle David Peterson: Yeah.
Speaker Change: That's helpful. And then maybe just a follow up on the outlook kind of looks like it implies about flattish trends in.
Speaker Change: And revenue and Saar, It's I guess just kind of thinking.
Kyle David Peterson: About fundamentals should should we expect you know whether it's you know a long start volume's or revenue is is this a good run rate given them if macro kind of stays in this kind of uncertain.
Kyle David Peterson: Malaise with where rates are and such are or just how should we think about you know the fundamentals. If if we kind of remain in this environment.
Speaker Change: Yeah, I mean, if you think about you know I'll come back maybe to the outlook, but if you think about the improving conditions that we're seeing in the in the auto market inventories are improving for new and used slightly you know affordability is getting a little better for the consumer you know consumer sentiment has been it's been it's been a.
Speaker Change: Spot.
Speaker Change: You think about the used and new retail Saar is forecast for improving so all those are positive signs, but you know the the rate environment is still high like you said in the vehicle prices are still 30% above.
Speaker Change: Pre pandemic. So it's it's not there are signs of improvement but still.
Speaker Change: Turning to normalcy over time. So if you think about you know the bottoming process of any you know market.
Speaker Change: We're encouraged to see you know even with our credit unions.
Speaker Change: Loan to share ratios now for a couple of quarters have remained at 85% and not gone up loan to share and share growth as we said in the report are improving now for a couple of quarters, which is their deposit growth, which which as that improves as we've seen in past cycles that will.
Speaker Change: Ultimately.
Speaker Change: Go to more lending activity with the credit unions, and it's just kind of a process, but but we believe that maybe we're close to that bottom and making them, making a recovery, but it does take time.
Speaker Change: Okay. That's helpful. Thank you.
Speaker Change: You bet. Thank you Carl.
Speaker Change: And the next question comes from Zachary Auster with citizens JMP. Please go ahead.
Zachary Auster: Hi, everyone. Thank you for asking my question.
Zachary Auster: We're working through the Q2 guidance on kind of all just wanted to get them to understand.
Zachary Auster: Plus a profit share might look like for dynamics in the next quarter and up over the next few quarters. Thank you.
Zachary Auster: Yeah. If you think about you know there's a profit share you know we book we put the current vintage.
Speaker Change: Vintage you know the Q1 on it about five little over $5 30, our unit economics for certified 33 to be exact.
Speaker Change: That's again under the new scorecard.
Speaker Change: With our Decisioning as well as stress that we've put on the portfolio. We've talked about it on prior calls that are you know in this environment. You know we've we've actually stressed there are three components to a profit share as you know are they go into the revenue model. It's a severity of lawsuits, it's the default frequency as well as prepaid.
Zachary Auster: And as we think about that we put those on the books at about a 62% loss ratio in the first quarter. So we feel like that's a you know adequately stress based on these conditions and feel like you know that in that range of call. It 500 to 550 is a good range for you to think about for profit share.
Speaker Change: Got it thank you.
Speaker Change: And the next question comes from John Davis with Raymond James. Please go ahead.
Speaker Change: Hi, This is Taylor on for J D.
Taylor: Just to start on the 11th side lenders for the quarter.
Taylor: I'm just curious if youre, mostly you're having success in signing new lenders on the bank or credit Union side, and then just any additional commentary on how OEM conversations are progressing as you.
Speaker Change: Called out multiple large prospects in the pipeline recently.
Speaker Change: Yeah, Yeah, you bet.
Speaker Change: So in the quarter. They love the 11 accounts that we signed 10 of those were credit unions in the quarter and one was a bank or finance company that we're targeting under our 24 priorities and initiatives.
Speaker Change: We've got as we talked about we've got a robust pipeline and a new team there pursuing those bank customers. So we can it's underpenetrated and we want to do more in that space and it was <unk>.
Speaker Change: During Joe's question earlier about the bank.
Speaker Change: It is a it is a more complex integration and a cycle.
Speaker Change: So you know we're hopeful we'll have search later this year, but we also you know it is those things take time so.
Speaker Change: Banks are more active as Oems increase their market share with incentives today. So that's another opportunity for us under the bank channel.
Speaker Change: So yes, I mean credit unions were 10 of the 11, but I think what we're most proud of and our team's work is.
Speaker Change: As you know 11, new accounts or customers.
Speaker Change: About a third of those actually got integrated online and had their first start in the quarter, which is pretty phenomenal from by the team and the work there. So so we're really focused there on getting to first revenue faster.
Speaker Change: Gotcha, good to hear and then maybe just as a follow up just any update on your expectations for Refis certs throughout the year.
Speaker Change: It looks like they declined about 6% year over year and declined sequentially.
Speaker Change: Obviously I understand its rate dependent but just curious to hear what you expect given the higher for longer commentary.
Speaker Change: Yeah, Yeah, and real quick I'll, probably go to re file I enter your OEM question I don't think I did a good job there on that last part, but you know the Oems opportunity is still is out there. It is the pipeline is as strong as ever in the conversations.
Speaker Change: We continue to sell into that channel as well and very excited about that so so.
Speaker Change: As we've done in the past is.
Speaker Change: We were talking about Oems in past tense as we sign them up and not speculating, but still a great opportunity for us.
Speaker Change: And then the follow up question. There was on can you repeat the back end of that.
Speaker Change: Yeah, it's all in refund refi.
Speaker Change: Yeah, Yeah, you know refi as you know we've talked about it we need rates to stabilize which they have we've not seen in action I think since July or August of last year, and our refund partners you know its like a six you know call. It four to six months stabilization, which we've now seen.
Speaker Change: And our volume was you know call it a little less than 4% in Q1 down from call. It eight last year in Q1.
Speaker Change: So we've seen the stabilization, but the bigger issue is what I was on the previous question is really through our credit unions are the lending capacity of some of our larger customers that are still having constraints and challenges when that works through we will have an opportunity again in the refi business and it's it's not if it's when and that will get worked through but.
Speaker Change: But those challenges need to kind of work out first even in a declining rate environment.
Speaker Change: Great. Thanks for taking the questions.
Speaker Change: You bet. Thank you.
Speaker Change: Again, if you have a question. Please press star and then one.
Speaker Change: At this time there are no further questions I would now like to turn the conference back over to Chuck Yale for any closing remarks.
Charles D. Jehl: Okay again, thank you for joining us today and thank you to the open lending team for delivering these positive results in the first quarter of 2024, I hope everybody has a great evening. Thank you.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.