HBNC - Earnings call transcript Q3 2021

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Operator

Good morning everyone and welcome to Horizon Bancorp conference call to discuss financial results for the three months ended September 30, 2021. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions].

over statements please nature. that call call that the contain may are turning to remember management, today's Before forward-looking in statements to risks, could to noted in discussed, are other presentation. factors These that slide factors including uncertainties those cause materially differ and results the from those actual subject

that cause results current filings. to and information XX-K materially is Additional later could about differ factors Horizon's actual contained in

Craig it Chief non-GAAP will statements Reconciliations copy Executive financial for the investors Representing www.Horizonbank.com. Neff, are Executive and by In President, these President Vice Chairman Executive measures If They Secor. Dwight Mark are Kuhn, any Craig Jim Vice and addition, of call. anyone to Officer, management company's in presentation and President help business. during may intended release company be Horizon a Officer, ahead. obligation question-and-answer contained like call Senior Officer, understand press session access to Chief Chief to and the have the supplemental are today and already President yesterday, certain at and Horizon's The assumes Banking, forward-looking the Horizon for refer measures to joined made presentation. to that Noe issued for Dennis the go no Najera. I At website, does turn this by not Banking Commercial over Chairman Horizon's would Dwight. Customer Please this CEO, time, can Vice you update Financial

Craig Dwight

you Thank earnings in call. Horizon you participating Bancorp's for quarter thank conference and morning third Emily. Good

earnings we represents can with our momentum. XXXX consolidated organic cost the our XXX-year the approximately XX returns trustee Horizon's October momentum Presentation adding and core Investor welcomed only the busiest includes deposits. households, our This quarter and acquired during proving move acquisition Our we We ESOP results acquired franchise our to capital to that be our new third and sold new from third has on follow and we achieve drive represents and value to where associates quarter perhaps that quarter. branch comments loan in The customers better mass commercial the and on to more and will quarter already opportunities. history. focus offices growth and taking logical during and September Michigan quarter, extension on due Horizon's as us accounts low that exemplifies company three the and yesterday, the XXXX scale record the XX. we to branches Michigan part is our allocate successful XX branches and efforts into XX. profitable growth recent lenders company's XX,XXX in the published we work Horizon's proven XX shareholder resources to contributes stable of today are

quarter, XX the of down third addition, ongoing non-interest on efficiency was in results which from assets In our in in focus the franchise. to retail the average just we expense branches effort consistently ratio second. low continuation closed our August the This X.XX% of XX X.XX% maximize in our to

efficiency of much sales even and positions designed customer to the employees savings continue technology fill to to enhance as expect branches We open redeploy experience. improve closed the reinvest to into from we and

well record the Horizon pending highlights. capacity Driving added quarterly XXXX the additional Starting by Michigan offers of approximately or earnings and as have we on on continued program net $XX and footprint. as lending into quarter upon future consumer portfolio results organic into and four, seize slide number per interest assets earning growth completed focus share. Horizon auto XX% income, million at $X.XX As efficiency. shift to new returns were increased with higher loan record is we investment commercial since far opportunities in third loans. company for our in-market indirect from our lenders and commercial positioned reporting future, we the the building the increase December yielding quarterly

Given Midwestern to of talented balance Horizon and believe efficient the within workforce, highly our growth significant operations and on is well capitalize sheet, we opportunities strategic our size organic positioned markets. attractive

why in thesis Our So invest investment Horizon? is simple.

of by culture. past high goals, accomplish play value tangible XX.XX% is for evidenced by trading return markets. The a the XX best the rising a in average operate represented X.XX% This fact equity We And growth markets. continue to of on consolidating price multiples a has book are on value to to X.XX% by attractive company the Midwest is focus return efficiency times X.X average things branches XX quarter-end six we for on as earnings trailing represented compelling years. price We done. in performing Horizon over in get disciplined assets a We of quarter. the months. and operating par as a at

we are the side Chicago. say, to like in we As right of

our in cycles. performs our economic risk mix lower Midwest as well varying and consistently is Finally, than most loan model profile banks operating

rate are will over net assets last growth income and you for years. slides the demonstrating for on seven As XX see XX.X% Compounded rate annual total clearly and eight, XX.X%. we compounded annual growth consistent growth

assets majority banks. of compounded the seats. has Indiana an you than rate Michigan. domestic and more county was product community gross remind times change occurred XXXX, a years, company. areas five growth other for X.X primarily the Therefore, and that state On growth which of rate Horizon the stable nine we has a average and in growth XXXX XX% is towns our to is base growth is rate X.X university traditionally footprint economic Horizon's past expansion our the and or slide for college and For the of annual through that government in times

one, from market advantage remains of either well outbound or expands Our towns. XX Horizon Horizon into of show number two acquired and cost living. to rates Illinois, our total increase increase taxes, exit improving in to in an continue in Indiana by economies work and located, to acquisition spaces, which of businesses migration increasing take high low evidenced And as be the deposit the and dense force. the Both counties recent college as are and positioned eight branch high presence consumers continues three where branches living rates will unemployment share. crime Michigan

are a highlights market. As business wage where XX, in we some you primary labor On markets tight of Horizon. new exciting will starting opportunities of result economic slide to see events we are creating some see inflation. engaged our for

channels. digital digital transactions monthly transformation. We average have to from and shift onto virtual begun continue away Horizon's the branches moving toward

quarterly last branch January stayed place is our The consideration twice through was this embraced annual compared relatively X.X% in at and that yield channels quarter Horizon the all the our our consolidation manages the to activity took branch increase a for second increased branches constant. of branch in XX% in Horizon's focus years our million XX% aggregate networks' accelerated $XX shift increase of pandemic well, as year-to-date As increased before and by transactions on trend. our a an the our quarter-end. our It has digital Year-to-date, course million. re for of per backs in month, our evidenced XXXX. $XX XX online buy in key capital retail to from which XXXX, efficiency deploys over the since stock has of XX% its acquisition, network's and of the opening Horizon dividend helped average four quarterly review has last has of good we news dividend. recent deposits dividend August.

Mark? to privilege my Chief update, financial Bank's Vice introduce the for Executive and President Now Mark you Officer, Secor. Horizon Financial

Mark Secor

Horizon its record pre-provision of Craig. records second quarter interest for you income. net and pre-tax net income with had new consecutive Thank income net

the linked credit accounts another grow million the release release income loss net quarter Non-interest These from mortgage last million. We transaction, in third The with core company's were quarter. compared loans Starting credit for sale one Without trends one the to trustee a improving of sale the allowance key interest these the acquired one-time the accounts acquisition $X.X branch the objectives. ESOP quarter. losses primarily due events, accounts. and quarter impacted day demonstrated a Horizon's from losses. low charge-offs $X the very by are gain third the continued We and million trustee for of XX. had credit million an small charged with and We of costs also the trustee pleased in ESOP transaction gain $X.X one-time a net the still recorded interest two earning loan. results to Those allocated credit to credit $X.X the loss the recovery $X.X a acquired margin. maintaining offset would and there transaction positive and costs the the results The with econometrics. million increase expense is slide level for credit revenue. acquired an investment income million performance, interest move cash recorded by along We have acquisition. for lower was to see of a partially of higher strong for off continuing ESOP are income been interest the Continuing allowance expense assets portfolio loans. steady record over was $X.X transaction the a due on branch with the direct costs sale $XXX,XXX of losses net net include for to and of of a to to partially reflected from The

quarter. PPP points the believe basis cash yielding was of of only forgiveness. yield was average XX. recognized during during point net assets the CECL loan continue reserved, the Slide quarter Earning to from lower basis decreased point mix quarter and of points economy loan are quarter, margin seven funding and due from loan recognized helped compared yield XX by portfolio, loan and X.XX% to income modeling. loan to Without in loans. the a during balance the basis quarter. our income of for assets in billion points income. XX, adjusted yield reduction our during loan the yielding would have and impact PPP without income we the $X interest loan to the earning second impact balances of decrease increase PPP in PPP appropriately by loan from quarter five in The but the margin the state yield Starting one reached investments The of The manage the increase an XX basis held We the third for fees additional net and lower income assets. points recovering current the are as may the third billion quarter with $X is billion put loan $X the XXXX. compression quarter on during This increased at offset of basis an increase given Slide basis majority the pressure assets deferred as in also to the margin, the of impacted and recognized expected fourth of were positively the PPP the yielding related XX. declined our XX lower increase the the averaged in to contribute high consecutive mortgage cost earning impact

the The and our PPP portfolio to at remaining billion our lower additional the loan to is of and branch product of was low directly September million onboarded liquidity loan $X.X continue reprice, is is into loans end pressure fourth the since forgiveness, acquisitions. has $X.X billion XX. Slide going originated a related are quarter-end new this fees on in As with XXXX. quarter downward and investment XXXX. growth recognized cost increased the loan yield expected $XXX at the rates,

to in by to which $XXX XX. matured expected million continue continue and also acquisition sheet of cash of growing we valuable quarter. points purchases at the contributed income. was point million interest funds. deposits core Horizon's XX pricing as of organically. and Slide deposits the during franchise. an higher our total With are of costs growth term portfolio bearing the continued $X.X quarter. in with mature and on deposits $XXX investments increasing in $XXX XX reflect During compression lower end The funding $XXX basis quarter, CD's deposit which reduced costs CDs from basis cost The the of grew of million in focus of the cost included non-interest during tempered decrease our additional cost improvement funding average as net the on billion, reduce million quarter third third will XXXX balance the Margin X% branch costs funding

acquisition branch cost deposit will the In addition, is average the acquired from than reduce deposits costs their to lower ours. help as

higher commitment This offset recovery this related servicing the As XXXX sale in rights to high of non-interest to and non-interest are from transactional opportunities purchase also long-standing expect line into to XX. markets income continue strong national by mortgage-related total million Mortgage on and income grow, against and gains sale income last XX% Indiana the XX. stand our and deposits $X.X sources. activity customer was production our business from to partially to for year's instant deposits strategically in potential the mortgage course Based are strong a we than local manage XXXX of quarter balanced continue we contributors quarter. mortgage in by Slide percentage but mortgage gain lower on and period continued pricing of Slide Michigan. contributions XXXX. the our income refinancing relationships primary transient to far of is inflows was mortgage and this of liquidity, high at was activity, new so level from revenue continue on from gain Year-to-date level third rights year. in in growth impairment support than servicing as XXXX. The mortgage same coming our

average During we accruals costs benefits saw be non-interest and as had the talent targets. reflecting transaction to our assets anticipate of leveraged in our be we the the quarter, continue we in and assets as costs XXXX. non-interest from of transaction total decline expenses X.XX% with quarter asset expense X% as bonus increased quarter branch and expense to leverage ability the in or increase the third team to higher an when the to into or X.XX% costs. related incentive continues salary average operating We expense Core on $XXX,XXX achieve expenses fourth acquisition will growth investments to that first to under operating excluding

additional Now it Craig. portfolio, some loan to back comments over for on I our will turn

Craig Dwight

XX% cost XXXX. In of to Thank deposits XX, loan recent Horizon's December deposit branch previous as to years, XX, XX XX.X%. of lowered our Horizon's ratio average you from XX% increased as low XXXX The loan deposit to Mark. acquisition our and ratio September was

manage So we growth. to how know do for loan

this loans. of loans will pricing the As competitive next acquisitions, and with focus result be Horizon's years the a loans, advantage new for two branch more

Looking in chart on portfolio loans on within our and Slide the XX% itself billion are commercial diversified XX. residential total in XX% diversified. granularity $X.X The and the the table mortgage consumer. loan is which Horizon's well provide commercial at in with right well

housing quarter. net of at rates. for evidenced loans loans, to and year-to-date including segment by the $XX.X over strong have continues largest portfolios sector occupied Our acquired flow or four this continues quarter, delinquency industries. total X.X% consumer the cash low prior million well. quarter-end All and non-owner portfolio low loans perform excluding XX hotel, loans. as leisure increased X% single reflect the loan Consumer pandemic-related is strong delinquency points. underwriting results basis operating points standards charge-offs by also at And basis at the Horizon's for business estate multi-family to at restaurant, hospitality residential distress real sectors and the improvements seen exhibit year's Horizon's considerable

as areas in new Looking new evidenced we well reflect in to as the line through loan stimulus portfolio charge-offs in year underwriting and in reflected in volume, Horizon's to year-to-date we credit Michigan at utilization indirect lenders consumers an growth Western low in XX growth commercial first increase Northwest spend The as line addition third for in the this their for footprint and strong year the loan ahead, results. continued and during expanded loan a utilizations time net continues positioned quarter-end standards Indiana equity as our experienced a home points point. consumer delinquency show two of and Eastern basis slowdown dealerships for money. Michigan new added Commercial quarter growth payoffs. of markets basis result of the at is annualized rate X% beginning loans one increase by

expect quarters to team ahead. have we Here, our significant the impact in lending

occupancy been a pipeline with in in commercial This first loans million average quarter that not closings compared level report of to closed. up total represent daily pleased the loans third of also XXXX. the the has highest are pick significant rates Hotels yet room XXXX for is the robust through We with segment this $XXX and Horizon's approved X.X% is in pending and quarter.

was in by frequented with smaller in Horizon's August portfolio Horizon's As increase and of along It which are travel XX% hotel or locations, travelers. over of reflects XX% increase rate August resort gains primarily travel. consumer is interstate total the for located a accuracy loan XX%. XXXX, borrowers the attributed XXXX to dollars primary rates along consumer occupancy business outstanding. an occupancy increase our highways hotel Hotel of is leisure

new not into large entertainment or highlights, are Horizon metropolitan areas. going franchise capital. in in in pickup well our consumer earnings are result as XXXX branches, for of recent acquisition located XX of Bancorp's network excess a leveraging our growth such as an convention dealer and positioned summarize, commercial loan and XXXX a and officers of closures, expansion key We loan venues loan XX we demand, increase To branch

a a team history banking growth average growth are far who of management and rates. industry's delivering north has economic managing of through exceeding seasoned cycles We multiple the

compound and position Investor gives dividends our increase which have for year XX%. optionality. by Horizon December on Day today excess shares our holding us $XXX the considerable rate date paid asking you second conclude on past aggregate of and at X. for a Virtual common uninterrupted of that robust XX We save dividend time has remarks XX% years. the in of the company for of year-to-date prepared cash the this cash raised years-plus Horizon's an Thursday, future a annual the We maintained has million over earnings excess solid capital historical And growth company the XX

be leaders credit, perspectives retail growth branch showing on their operations, and and bank's will sharing off plans, consumer of senior commercial our recent and the experience. integration forecast Horizon's our XXXX acquisition Our

details will please We that, on With the and you Day. will to to open be Thank how able Investor join to event I our access to for virtual for will you. lines operator publish the us that ask hope the we questions.

Operator

Instructions]. [Operator

comes Please from Piper The Sandler. first Nathan question ahead. go from Race

Nathan Race

Good everyone. Hi morning. Yes.

Craig Dwight

Nate. morning Good

Nathan Race

side appreciate Maybe put mortgage have personnel of loan commercial in the or for the thinking on XX and the place about we into exclude fourth lending outlook the pieces banker the the how over off terms in forward on growth in months additions additional start you so outlook run-off loan items and the going PPP the the fourth quarter we should jus as quarter. If last growth, commercial those ex hires taking for XXXX of questions. I ongoing so. be guys and expectations for Thanks for just in warehouse a and mortgage lot to well?

Craig Dwight

mortgage warehousing about Nathan, for Neff outlook the Jim Dennis the the PPP will thank and you have outlook commercial for Kuhn well as as Jim? I loan question. answer the talk program.

Jim Neff

you Good morning Thank Craig. everyone.

mortgage the level, normalized the XXXX. tracking track forecast. $XXX refinance where down And is are expect normalize MBA with feel our warehouse have On be will as million we to quarter-by-quarter, our balances and seen into going XXX somewhere it between you side, that million we will

Dennis Kuhn

Again, With and basis. entering we building, a as regard This morning. $XXX the can to That million. Dennis I had say, position is is in on over strongest at PPP. Craig pipeline mentioned, weekly are our Good quarter Kuhn. commercial

will lending are good I our staff. that of days. those newer we last to note XX three the activity the seeing So additions joined in really including

markets. have they in in, experienced these again, get are highly connected lenders all their So and acclimated get

will forgiveness. balance through expect those the certainly standpoint, up see continue to pipelines process From XXXX. year in we PPP a in to continued and So we ramp the of

fourth of that be So will in the we most hopeful that completed are quarter.

down. XXXX, into going again will that So quiet noise

Nathan Race

Okay. Thank you. Yes.

the to just more is of as for do run-off range forward? just outlook about feel side excluding low going of to digit the a commercial guys ex-PPP clarify, perhaps digit a kind loan commercial mid you a single mid So like and think single on reasonable expectation PPP the in to or

Craig Dwight

we annualized, that hit think up Well, expect Troy momentum Holland range, again, Lake third good we to and X% see that County. Grand over continue again, maybe I I range performance in in the Rapids, growth South Bend that X% good in feel including real right to seeing about and to quarter in then our at So and markets based some are on Indiana, really in particular XX%,

have good there growth. presence continued we built to and markets strong and our expect see So

Nathan Race

Got great and outlook. hear. locations it. just think you one more on with Obviously in also to were ask coming expense That's to the then the moving some there's TCF. just the about legacy completed have could that I consolidations operating branch pieces quarter If from onboard the

term that fourth on XX.X%, the kind how So Mark, well? operating a of maybe just into saw rate as and from perhaps run expense about that quarter near XXXX in early any trajects we and into third thought knowing quarter the

Mark Secor

Yes, Nate.

need to absorb over operating we transaction initial to anticipate way the from going And branches. because savings we to in we to have we the modeled the of going pool to come from are are XX are going to because the an there we still of some time costs the the the still two nine stated place to getting help in locations over and those the increase get But buildings, see to we successful next then We that past. the until one branches, What just some as of costs. it's there that closed, think you people are the seeing from time for but the because employee here months. know those that we branches in with over as actual have comes of expenses branches rid kept I rid been XX we

and Like will type just for be XXXX average saves be we see would will then for our is do the we savings expenses. to expense manage we would of are informational what will normalize just get the normal we said, cost will the going the through it the branches sub-X% it him increase help anticipate So main and and assets help from on see those hopefully the cost absorbed branches. we bring XX and increase levels expenses

Nathan Race

will and now. for step back the I all you Great. taking the guys Okay. questions I color. appreciate

Craig Dwight

you Nate. Thank

Operator

Our next comes KBW. go ahead. Damon question from Please from DelMonte

Damon DelMonte

Hi. is Good doing well everybody Hope morning today. guys.

Craig Dwight

Damon. morning Good

Damon DelMonte

question I yields and the margin portfolio? think new liquidity in kind kind current loan margin. are some still production regarding close first commentary closing the below Mark, the given you the How The on for pointed headwinds of production that your to of to gap and new additional portfolio.

Mark Secor

take think some. going I it's to

the portfolios But prices Some that, proposal closer least to quicker the getting quicker. are will adjust in portfolio. take new don't at they adjust Consumer just of timing are It's the because their anticipate I year, closing But next duration less. quarter. is going quarter through know Damon margin as to with of to we going would somewhere reprice. had loans average of for have an million around maybe cash million $XXX the Ending cash, the the as $XXX is pressure. over I mature, the

margin this to that going having quarter. in here is the impact just So mix

Damon DelMonte

and of quickly think million how then And kind pick up get you Okay. you that some that into there? do yield to reinvest take could $XXX securities

Mark Secor

Yes.

some We reinvest We of able are going flows coming to it. to not all anticipate be out. cash

to portion But side we anticipate some so some some of the, We cash hold get are municipal the reinvest it. trying of are the of core, a of especially going what that. we and will to the we determine

What year. we we with strong growth that just We will want organically. had get next I this know here is, into don't done deposit starting quarter still what over and

the are we not seen So run-off.

get deposit that's see fighting just to continue we down. to growth, cash if balance that So to going be

Damon DelMonte

Right.

for a just And question. you second Credit Okay. is obviously guys. very as strong

levels reserve Your still three times are pre-CECL.

Because So the been forward? release. have it CECL, quarter going how would do level provision about think absent we this a

quarter? expect a we can fourth in the So here release

Craig Dwight

releases level, Damon, in come next probably sure. will through year. The fourth of quarter are the not the we

in good still We losses reserve the and and are is aside ongoing pandemic our being a cautious the distressed therefore set portion for of is sectors. exists because general

sectors now is cash, those I work restaurants, example think by serve this bus to tables cetera. build having time a people to right summertime and but et getting to The their during be in clean industries winter the tell. challenge the to tables industry going and and up to

this least being cautious So aggressively, are at reserves still through year. releasing and not

part continue is to econometrics and other loss approve. continue The to fall our our rates overall historical

factors forward. play into going those discussion release So two the

Damon DelMonte

I Okay. the color. appreciate very Thank you much.

Craig Dwight

Damon. Thank you

Operator

[Operator Instructions].

question next Stephens. ahead. McEvoy comes from Terry Our from go Please

Daniel Thomas

see question This Terry is that saves online coming in you August potential redeployed branch wondering I was back be if the into everyone. in the to Daniel expand gains little that we guys My is, Morning and could from investments on technology investments. tech maybe those? are you. Thomas, mentioned both operating press terms a first release you for guys going bit McEvoy. cost of if can the some efficiency closures from in Thank

Craig Dwight

vendors, insight et a deployed year, system we with mortgage process which This works grave Yes. new Encompass software customers, that customers' cetera. the into to the called is cradle for the

mobile added looking new improved commercial us as data From information added well We customer year. that's with without we that at before consumer They origination to mortgage have capacity year, technology online go best-in-class. to reporting. In this increasing has enhancement banking. They a last warehouse new platforms the similar. more their more chat teams as well. for platform. we team financial we loan financial XXXX, our are are that that added We streamlines can our year reporting are staff. improve bots both own year our So perspective, And well. gives platform mortgage efficient last reporting the A added an loan as a package

enquiries answering over of through all today. are the XX% bots We

surveys getting We of do both efforts, continue direct our to back. customer outreach digital channels, satisfaction channel our and

percentile in and XX both in-person. digital scoring the satisfaction our We of range customer are for

working. are So things

Things would branch direct internet et our service And invest. next accounts, the platforms continue our to platform we customer same with to It's our be as are transfer banking, We year. that strategy like whole our would into They is add as platform which be digital improvements using open have see. cetera. not we aligned will to efficient platforms. added in are

fintech to But yes, and year. best-in-class, other other aligning our very big Annually, is retail banks platforms the to the to well we have compare compare our a of we typically similar and/or the size. the banks conduct gap platform. all next We just community then which compare and community best We ourselves technology. both we ourselves into So rate in continues. of treasury management been analysis platforms banks,

So the question. you for thank

Daniel Thomas

to on great. you guys buy question. capital. second we I then a That's to detail targeted backs are Thank should that expect level to Do the trying moving just get you. the you have one capital to? continue? appreciate Thank And you that. And

Craig Dwight

publish We a targeted capital don't ratio.

We continue Stock we buy hold performers an If depends of our Those some bold to and we strong to market. it buy being the think back. want going to accumulation there, tangible if buy focus with will are cash on cushion value. then? price capitalized perspective. again. to well on Mark, will in And would backs, to you our from backs come we I assume earnings not, continued add to would it. back

Mark Secor

to this we and leveraged little a over transaction. bit capital with I was years going the leveraged obviously just we comment that here

market, we tangible but given at. the because less capital we in that having the right liquidity when regularly, talk when on now a look we risky look are you about design the that basis, which However, billion isn't we it's lot levels risk normal risk have we have $X.X and at what obviously of are of profile a you investments this a and think

we of balance all kind So that. of

Daniel Thomas

it. That's I Thanks really appreciate it. helpful. Got guys.

Craig Dwight

Yes. you. Thank

Operator

Janney question Please Brian from ahead. Montgomery. go from comes Martin next Our

Brian Martin

Good morning Hi. everyone.

Craig Dwight

Good morning Brian.

Brian Martin

the put mean to about just have you a guess of maybe a you comes just about interest thought on can strip the of just to out and this thinking about Hi, three margin the kind to are on work? of are PPP, dollars on Mark. sequentially cash like just NII just color the dollars on, NII, but we mean thinking amount next cash clean I you that the of of dollars the guys down margin,, appreciate basis give if the of maybe be little understand think going you it to today here? continuing that, to think I you seems to and just up four you next into the frame increase taking how guess to all what kind the quarter should quarters given I kind income I just I efforts focus create net can of

Mark Secor

I mean in events, pick that's up $XXX with quarter million loans over transaction. the with right think did of we two direction. I third the the

we that's had So and and securities. were some for market plus in of the some generate securities net income still we going interest continued to settlement

of thing to commercial see inflow of that to track outflow going we Again, want continue coming So steady we that's shift I cash. net or a the going we earning think on cash the deposits we know Also impact you don't also be is to interest some are And again, of that margin. more of see is going want that assets is on. to how income the the to what's and to to are what see and income. going growth the

Brian Martin

Okay.

now, deposit guess, I at And quarter, into there. seeing into slowing So steady are quarter they all? Are the the flows stabilizing? fourth increase you

Mark Secor

bit. for then down season seasonal will it's to trajectory we been because tax municipalities. of back also of it will see the a the we continued all And It commercial be consumer a seems see growth. stabilized But the come and it through come up. But quarter and little from has side,

We this at outflows. seeing may point start So may it we quarter. But more change what not are seeing. that's this

Brian Martin

a brought M&A follow maybe next know side? less you given on, or as Maybe the potential, about think capital, far Okay. strong mortgage, Or year, the in maybe, here me opportunities up maybe sounds near of a priority, is buy the give have deployment the Craig, as that how we just on a was And organically, on Dennis about the maybe the But talked sale and it, the is if type Mark, term? are level? similar discussions little of back. still at all on just just someone least that? And then just maybe the gain for how for twofold. carries into can for thought outlook, you of an about it's It like line the point

Craig Dwight

have be into initially M&A XXXX. year, momentum a focus next have Brian, the less going Yes. primary we

can franchise. mind. are the growth we at of for another are However primary looking looking would that growth that sectors would become said, franchise, a loan Obviously, top be acquire we opportunities two If we deposit leasing increasing and/or loan we at. don't need

Brian Martin

Okay.

Sorry, Dennis. Go ahead.

Dennis Kuhn

that I make on because of On The gain impairment impairment I from and mortgages more comment saw year last sale month periods common. that we a will the mortgage two nine side, made hit. servicing about the revenue million have we and $X

So seen months. an through we increase nine actually have

year it's you strong know will I think Now, that on here. fairly really volume? last quarter the But fourth if comment catch was I of steady> to don't up want Jim, been so

Jim Neff

Yes. The steady. been will volume's play. into very come Seasonality

up rates will year. be year strong And the it's we refinance are for to if with some creep still going think see production a down. next But I to decrease. overall going I see do think next we level very activity,

Brian Martin

Okay. Thanks I guys. appreciate feedback. the

Jim Neff

Brian. Thanks

Craig Dwight

Thank you Brian.

Operator

over the question-and-answer Craig concludes I to conference our Please session. like go closing This remarks. turn would back for to ahead. Dwight

Craig Dwight

call for our earnings you and again we you forward X Thank participating in on look for Day. with to December Investor today's Yes. speaking

sign please Thank December see Have and up on X. day. good a So you you.

Operator

This for you Thank today's conference attending concluded. now presentation. has

You may disconnect. now

Horizon Bancorp (HBNC) 1 Nov 212021 Q3 Earnings call transcript