HBNC - Earnings call transcript Q4 2021

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Operator

Good morning, everyone. And welcome to the Horizon Bancorp conference call to discuss financial results for the three months, ended December 31st, 2021.All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. We do ask [Indiscernible] one question and a single follow-up.

queue have the questions. rejoin may if additional you You is Please event recorded. note, today's being

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

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

may addition, Horizon's measures obligation measures no There's In call. Earnings Reconciliations understand certain that presentation. are refer assumes to these management to Horizon's to Non-GAAP update intended are for investors the who financial contained any in to forward-looking help somebody related business. statements

Senior copy Representing can at access Chairman today, Vice President issued and press Commercial S. to President have does Officer and Senior Vice Officer President Kerber. Secor, release Commercial already CFO M. and horizonbank.com. Dwight. presentation it and this you Executive Craig time, As President anyone Mark www. by Horizon Vice not today, website, Jim to of Lending At the like Neff, turn Retail Lynn Horizon Dwight, this Vice our Banking Executive Executive J. Chief Najera, Dennis Credit Noe and I'd Mr. Kuhn for President and CEO company's E. a over the supplemental

sir. ahead, go may You

Craig M. Dwight

Quarter And good Conference Rocco, you, for in Bancorp's morning. and you Earnings Thank participating Horizon Call. thank Fourth

proud of incredible for our fall consumer fourth very XXXX, into continues we pleased to taking loan growth, and gained asset our published what the and -- with consolidation accomplished momentum on from XXth. investor new and recent is XXXX, of this to Our earnings already build continuation acquisition, cost branch comments Michigan customers that to is January households, XX,XXX proven our includes stable their press our yesterday, franchise XXXX strong workout This from adding will new offices, momentum. year, past welcomed XX. the presentation releases shareholder and record solid our successful commercial branches for scale Horizon XXXX three part drive commercial branch quality. and quarter the approximately have in and of contributes We're summer excellent due and of into associates we the only late work the integration acquired follow that mass our XX The Horizon in efficiencies the momentum today acquisition deposits. to they report of September and we lenders, 'XX XX as associates to our has that value, logical continue future. extension and low core and that us

of on closed ongoing excluding and maximize we branches ten effort a is the non-reoccurring addition, retail continuation franchise, efficiency the to In our acquisition-related XXth, August of costs. our

expense was goal asset below fourth-quarter full-year supportive XXXX our of Our XX%. average be XX.X% to to ratio

Horizon senior of Jim discuss Bancorp Horizon. during at which to Neff, integral part years his been decision announced of and was Now, our Jim like our has of promotions of company's an would bank quarter. to first shared yesterday. a with President growth end retirement I Monday, the Horizon on and the officer, retire XX

$X total his contributions and him our we promotions and and consumer As and and in are have we appointments commercial to to because his depth the years. talent banking organization. footings billion. his good from thank success, health retirement we of all assets in our in yesterday, announced our million $XXX for current possible The we of happiness over cultivated Jim, approximately We grew family of wish

Mortgage Najera a Lynn which to Lending to Kerber seamless EVP are our S. familiar from Retail and this Officer and M. standpoint makes maintain promoting and Noe Officer. to Business areas and to expanded momentum. Lynn their cultural Both transition and responsibility, Banking are Chief Noe, Senior We EVP growth

In as on be where quarter. President Market go addition, per acquired results role return organic Southwest in third solid hometown he will In his earnings loans. and or the our Starting additional revenue which Dennis of commercial Michigan. offices, adjusted community, in long of reporting our Kalamazoo, original the earnings, interest the into cost per consumer history, closures. $X.XX and $X.XX his primary the from Slide saves and Dennis established Regional roots to move for for the presentation, grow has Kuhn banking commercial in to role XXXX. favorably per J. a in quarterly office focus X earnings new deep Horizon net is compares the branch to achieving quarterly completed were adjusted share, share share, the loan growth, XX Driving $X.XX fourth-quarter at the income growth, will

well highly is our Horizon to insignificant, operations Midwestern workforce, and talented attractive sheet, invest Well, Why opportunities efficient our size Horizon? we the in thesis is our simple. organic, Given and balance positioned within strategic markets. investment capitalize of believe

in We growth a attractive are high performing Midwest markets. company located

in of Chicago. We side right the are

our company are improve area in as retail network, the evidenced continues opportunities look by a operating enhancements We that to to XXXX. and our for model, to market

history consistent of and strong have ROE. ROA We

us efficiently company's that from XX% through XX% positive ability XXXX bottom was outlook ability Horizon the annual total from a for than grow distinguish rate believe to income. we for growth and a for To net 's to illustrates earnings faster 's to Horizon assets increased total compounded XXXX peers. are line. assets which Horizon we company, provides its opportunity growth favorably further growth earnings another We XXXX, have support the

toward transformation. continue digital away transactions to onto Moving 's virtual monthly shift digital branches from Horizon channels. average

central branch took online this As stayed trends that of online ability technology deposit independent our of good 's support paying last with month, August. XXXX.The Horizon the from offal of our answer consolidation key XX% in news course pandemic, the online is, three constant able investments performance digital has It accelerated chance the locations. to even AI Excellent reopening call to the in year. In a our chat, network off, branches was Horizon to which through in throughout annual XX% channels Horizon in examples are the our transactions And in XXX% opening, and ten all of account through XX% XXXX, in branch online embraced closing pandemic increased excess our before our chats, this place review the activity is our of chats prior of relatively of offices. trend. through bots. compared total over the shift on consideration

check-in XX% we and online increase expect XXXX. during the effort new in accounts in open In addition, Horizon year, substantial of this all

reducing rationalization the part due XXXX. investments As of of we opportunities in our our and annual additional in branches see number to branch technology, and

insurance of on our dividends. Now In inject Horizon for of costs bank cash capital, premium in the into was XX% our and capital buybacks ratios original FDIC talk announced X.X% holding more cover quarterly to bank the on when dividends. a December of our increase of the In fourth yields stock fixed Horizon the cash an XXXX, Bank-Corp, quarter part deploys This cash dividend TCF to company XXst hand XX year, and lower XXXX. strong million $XX reported years than still capital into manages did well, $XXX,XXX. about has acquisition, maintain to $XXX,XXX quarters of has After plan with the uninterrupted in excess Horizon we to acquisition. Inc. bank, year. of this recent six during injection the XXXX and the by evidenced as our quarterly to by capital

to Horizon and Now President for Chief E. [Indiscernible] our Secor. Bank's me Mark. Executive let Officer, financial Mark Financial update, Vice

Mark E. Secor

with net and adjusted fourth Slide We're fourth interest you, trends diluted in impacted very Horizon of quarter with results by core record company's of the new quarter for Thank records continued events. earnings Craig. per XX, income pair the quarter. demonstrated results a with Starting had consecutive one-time the fourth pleased these net were adjusted positive and its income, share.

third to is growth to the labor sold of to a due a business, we for a where gain another dispute record The the they the $X.X assets we lower transaction in million as interest from to higher the all acted the of longer loans run-off as and primarily fall, lending the reported provider ISOPS service million accounts related with no first acquisition, forgiven. in and mediation and ESOP the net consumer move ESOP with as in quarter. the recent costs Horizon level additional and earning yielding portfolio, continuing interest $X.X along commercial branch for in to is The was of are department of income quarter PPP trustee. for the cash $XXX,XXX investment settlement second Horizon the trustee

credit We the one quarter. remains see current loans had continued CECL given recovering XXXX $X.X income $X.X appropriately Slide year. Continued modeling. compared loss a XX. reductions we state reserved portfolio, growth goals performance release million the through linked net of and in for interest our provision in are and improving our million for economy the econometrics, expense strong our and credit non-performing in We dollars the to of believe

index. rate of data’s money increase our balance XX% approximately wanted would sensitive interest consumer range to of of to point funds. As we rate $XX.X rate Shocking the we continue rising approximately million assets, details income our change increase balance with public their environment. expected net generate to XXX deposits asset a for position billion $XXX million. on in interest basis on in rates, and rising income, and would immediately an increase, using deposit $X.X an to X.XX% or sheet. approximately X% which net interest currently net with currently a with income a increasing We sheet on market expectation to the from provide XXXX focus move few an adjustable for are Contributing It's which of

balance XXX Fed quarter the investment sold, balances quarter. expected period. same be which the average This million to held margin in higher our increases increase closed in basis the by XXXX point funds resulted forecast balances was XX starting on earnings to the decrease during that fourth the the XXth, And hikes the average XX as basis high branch the asset-sensitive the with XX, loan third position This rate the from net PPP basis the decline adjusted we forgiveness. in offset our XXX income, scenario, of margin XX expect internal points short-term impacted March. this recognized in by different Slide from rates for during enable Our and fees was income net in for being of higher assumes year. for acquisition cash points to be in from to as result along September to this of basis were quarter, the -- positively during of first quarter, benefit interest million $XXX with points being compared average compression, margin was

However, XX, PPP $X.X growth margin, recognized. amount loan fourth-quarter increased the this income quarter, net drop fee basis in million. the fourth decrease of the in four the to assets the even yield primarily Slide points decreased with in the of income due by in earning interest

fourth-quarter fees, portfolio growth portfolio increased the the point rates to third helping in steady Excluding loans of have current is result yield yielding offset for the in changing loan the the commercial higher The new yield originated and lower PPP rates. being the would basis mix quarter. to a assets, one from loans, consumer

select at cost fourth-quarter deposits recognized, decrease valuable in of the the XX cash approximately XX to portfolio on reduced billion appropriate To The September, basis cost CD's added quarter-end yield going transferred portfolios of reduce costs an during we'll with on held-to-maturity, to group which during to basis increasing in total the growth deposits sheet period term the leveraged cost fourth-quarter, our of on our September, million expense were points rate last in long-standing The of business. Core expenses tangible franchise. to interest as the funding $X the of only acquisition. our pricing, $X.X to CD XX to Horizon's directly acquisition quarter, improvement quarter, mediation our have funding investments higher be from $XXX XX. as into point help opportunities non-interest at reflected As rising Also, income. to the higher currently capital to along an increase investment aside continue decline our X%. billion funding non-interest the of in underscored increase in balance this in Setting level end fees investment branch annualized, X% has costs expenses purchase X.X% loan less operating million expenses on-boarded XX. the are Management the investments expenses invest of investment, of XXX determine our the $XXX is slightly to operating average quarter. held-to-maturity classification. higher matured and continue additional with of this increased same of increased continued with investment assets as XX% long-standing With core mature fourth-quarter average deposit the XXXX. we first the model $XX.X million branch required the PPP and X.XX% operation XX. end goal in Slide reflected related XXXX.Slide cost in September quarter. of been of being Slide low the representing liquidity tempered in to portfolio majority low XXXX and is monitor compression acquired purchased. Further insurance liquidity we basis investments will rate to our by growing during first from manage cost, downward low risk, saw portfolio. investments total third and environment, Michigan was the to XX% funds. bearing than interest late with fully in portfolio also XXXX FDIC supporting with points was the pressure of one-time focus cost from improvement a Margin acquisition fourth will expected the growth the year. for costs, while of to billion, additional $X.X in funding manage continued core-operating we premium, quarter acquired million ability to of since quarter full of continuing net and the Even all our added continue our the by which a the during the cost expected investment to

provide Now, Noe S. Najera will on mortgage and update an consumer lending.

Noe S. Najera

I insights XX, XXXX going our Slide morning, finishing mix production you, on are achieved consumer everyone. indirect Michigan $XXX would was into like how additional balanced an our record equally during home strategies, Thank to retail and provide has we growth We production. Onto consumer equity achieve Good Mark. million, what excess XXXX on into expansion market our to lines period. of The strong northern impact lending, in in the had immediate and of they loan fourth-quarter. this lending.

of launched, have product have quarter. to We short expect this similar equity to a XX new on the during XXXX build our new continue we results momentum during which partners, period. home the the inventory first further as program, and quarter of auto fourth we'll embraced we To dealer perform date,

which market. We been highly has well partners have the by recently has representative received a indirect a Indianapolis the market, She in potential. for experienced hired our growth

we will than line result balances no showcase We than several in usage, approval our rate, grow with HELOC We XXXX, achieved expect believe been without years. has program past Additionally, we existing trends. draw product a yielding existing a lending will previous portfolios. to impact yield indirect This is as risk to have and standards. positive in consumer to new much these the at our higher higher more during on rate focus our the cash-out expected with allowing HELOC, the existing higher yield, be This growth quick all economical refreshed the remain changes to this their increases consistent will fee years. loans, for on getting it mortgage with we our market of increasing bars on refinances, case charge-off portfolio anticipate have With credit levels compromising in while process. limited to

all remain that in competitive confident markets. are products will our We consumer

XX. onto Now Slide

same products. 'XX. provide great Our products for to We the which footprint provided Michigan our states of mortgage Horizon to XX to total and our geographic by the at adjustment overall XX% provides by decline limiting market as this in of were will loans MBA XXXX originations the experienced sellable officers expansion financing, for policy 's marketed market significant for jumbo loan production 'XX. in to we secondary through expansion The and into Since while time compared contact be we over channels. centers online a opportunity made geographic sold their will a recently risk. market, influence being forecast second-home offer. expanding growth to on these portfolio opportunity This mortgage strong

be and we builders pre local XX% typical expect to with contractors, to -pandemic positioned anticipate markets. who MBA's the loan all between have relationships We experienced normal estate forecast return reduction long-term a and year. With well levels, and with are agents, real a seasonality, XX% officers for

of originations and throughout is advantage housing drivers inventory. the our mortgage this for strong business in XXXX, to in construction new forecasted of demand well of the long Thus, loan the take One footprint. growth positioned has Horizon is lack creating been reduction a for construction of segment.

handling back-office can the loan and the experienced estimates of have in our relationships. we coming officers beat feel market rate proficient Additionally, year, proven these the while leveraging tenured support We long expected. products in increases regardless

finish We production. in million Dennis $XXX year total expect the And mortgage well Kuhn. I'd like J. now to of north to introduce

Dennis J. Kuhn

expect quarter. million This we continue pipeline to $XXX experienced is throughout fueling addition by we in grow expect prior to quarter. XXXX. the our the lenders commercial new entering markets which growth against of growth, This gain growth. this loans commercial into the Please Year, growth accelerating which Thank XX, to net and quarter the morning. good fourth a funded you, refer loan XX% continued new increase commercial commercial activity net with million in loan was $XX Noe, loan during in momentum driven or Horizon to XX% core by The New annualized. our supported is Slide

for $X fourth credit during up consecutive see We revolving the quarter. in an by quarter, line million also the usage, second to increased of uptick which continue over

groups Kerber which quality. continue established within lending on to to in asset XX% now, in comment be And capacity the Lynn? our growth this is have M. We XXXX. range expected the will trajectory, Lynn of

Lynn M. Kerber

you very items Dennis Number to several XX the regarding would to much, group. Slide for Thank and quality, asset morning. like good highlight I Referring

very quarter Firstly, our credit improving fourth with quality loans. remained strong non-performing delinquency, metrics the for low in and trends

past December December X.XX% December total dues were X.XX% to year XXXX, commercial to Our a compared delinquency compared ago. bank for our for X.XX%,at X.XX%t was

of from decreased XX to ratio points million improvement an loans $XX resulting XXth, points, previous 'XX million non-performing non-performing at the Our a September basis XX-XX, year. at in XX from loans basis $XX.X of

million the to quarter. and principally fourth points. Our upgrade was loans, loan commercial $X.X several ratio decreased of in non-performing the resulting loan This payoff commercial XX loan, non-performing basis of just due the in loans,

reflects bank net This for commercial year. recognized previously XXXX and totaling the charge-off the which Our charge-offs were XXX, charge-offs points anticipated rate million. fourth basis $X.X $XXX, of quarter, for five the reserved a were In for. to

allowance of key the allowance Mark turn a to previously of is discussed, million in provided metrics. credit Regarding of credit loss, release $X.XX presentation results strong this, Craig, the fourth the in With back in franchise to ACL I our continuing cover reflective for quarter. we This and ratio will as our X.XX% highlights.

Craig M. Dwight

Thank is into you, XXXX earnings Lynn. growth Bancorp's XXXX. To for well Horizon going summarize franchise highlights, key Horizon and positioned

XX a low excess of and leveraging an our capital. of new acquisition of loan dealer pickup network recent officers, demand, commercial operating in and expansion loan our cost result increase As number in consumer loan discipline, of branches,

increased core commercial loans loans, we XX%. by expect PBP approximately Excluding

consumer solid growth expect to X% in a of We X%. loan range

XX% calls production is loan to XX%, mortgage which that in Association of well forecast XX% reduction Bankers reduction. the a Mortgage for below expect We

Horizon uninterrupted the annual a on of times questions. and for concludes company over for our XX% depth seasoned exhibited for dividend common ask team total XX our dividends the Operator, the the now, of open Thank cash XX rate are last solid compounded maintained raised XX% and two growth increase. management years, promotions. past historical I This with And a you. by will has earnings has please We line paid years recent a as of our to remarks shares, year today.

Operator

sir. you, Thank

begin the session. a [Operator now will We remember question, ask question-and-answer To Instructions].

up your pick a If question, that before [Operator pressing you're keys. handset please the we ask Instructions]. To withdraw you your using speakerphone,

ask follow-up. a ahead. a comes yourself do As you we one and question question limit Stephens, with reminder, please to Today's go first McEvoy from single Terry

Terry Mcevoy

everyone. Good morning, Hi.

Craig M. Dwight

morning. Good

Terry Mcevoy

the optimization initiatives you're first cost and that we Should or of future into the bottom question kind be My channels bank? at? you hinting other parts about would quarter. the of fall The consolidations the expect savings the closures? Or is, savings question, XXXX in talked those will second what starting there the to reinvested branch Is line? additional branch digital that fall

Craig M. Dwight

We the Yes. additional morning. the the you you second Craig. anticipate third the the XXXX. and closures, is rationalization once there complete will in closures question. be good do then branch quarter, the Thank This late for in it's end Terry, quarter. We of announced

it's of technology. So reinvestment bottom the in cost year, but going Thank reduction impact of not much line the to most an this on will to have go you.

Terry Mcevoy

from And track then -- acquired as if about to my the decline summer the I trying XX% I press a follow-up think I'm the X% runoff. forecast deposits question, correctly, the mentioned And you an it remember about last was original release, in TCF. in down,

and just, talk sounds holding about more onto the deposits? benefit it what's those of runoff of So is expected, like maybe better financial maybe, the kind than -- from

Mark E. Secor

Mark. we X% in Yeah, decline the you. an Yeah. Terry, is have about seen This thank deposits.

we seen the -- but we XX% another Some investor runoff we that announce didn't Investor in municipal also XX% -- seasonality, initial own or our model we've in a updated on after we our of deposits. that the -- didn't arena, deposits our and the from in -- we acquisition, as pre surge after Day

have well for are and time that here. seen that we So X% period below that stabilize around a of runoff we

Terry Mcevoy

And to beginning. the announcement. right on Congrats. that have said Jim, congrats your that should clearing I say, I for retirement up. Great. Thanks, Mark, thanks forgot from

Jim Neff

Terry. you, Thank

Operator

gentlemen. and Ladies

from question ahead. James. in Please comes next Raymond go David Our Long

David Long

the all Want very the And to the everyone. morning been investments that and congratulations a well to expenses. as The parts controlled Good well. about little you giving operating making. quarter you've Jim, moving talk in bit

wage XXXX, impact expect on we pace how of should inflation XXXX? we as look look we does the and expenses into growth at your As what

Mark E. Secor

David, you, did some the We fourth is see -- expense. quarter see Mark. Thank for in true-up bonus this we typically

we a pretty our costs are benefits managed. more for did or even So employee well expense bonus have little though our

has with we saw come these The FDIC that We we other FDIC area an lower that high that. costs increase had more capitalizing do absorbing ratios insurance on that growth, savings up to the capital in by bit the bank in by assets Due we expect that $XXX,XXX expense. insurance touched and little growth is. a do we've anticipate assets rate, the the run from and rate what next current year in the

Sorry. your the What question? of was second part

David Long

Wage inflation.

Mark E. Secor

open -- Wage offsetting seeing We that. decisions. What's everyone, is are Like inflation. it we

you deal next So to half with of plan the be year amount positions, for as to to in would that wage fill continue budget inflation. some we did that to able we try

see So on besides some hasn't pressure anticipate we are we we financial inflation. planning the on wage increase, some shown wage but will we will -- do that a normal that. It statement, on see significantly

Craig M. Dwight

Just to wage X.X% add a anticipate to increase. that, we

However, be backroom people. than had the substantially accrued extremely bonuses in challenging quarter will a the TCF bonus We fourth which year. from they our special last were less frontline acquisition, was for

have did as for we that a So accrual special well.

bonus see will you accrual come the So down.

David Long

Got it.

the the reserve that what is? talked the CECL CECL So credit mix of points the right or side, here. from go about the level that a Where basis go? -- was to you. about you XX is, you to portfolio on talked was to then know, want outlook ask about on points that and maybe on other get hit your back pre change that this reserve. guys can close about get day here Obviously, where you But And Okay. your has loan basis level or couple is a the we XX one the level I ago? pandemic changed, question Can the of that guess -pandemic the I years well we given that above can Lynn, forever I thing can for question

Mark E. Secor

specific not allocations want David, for see that improving improving ones of did try be those rates. can Yes based credit until take in year say, want the and risks have is a think anticipate get cautious. back areas. would of there are loss to we what while. quarter, know Will loss loan We to that what clearly ever back be get I release we about maintain many this the best many outcome can restaurant. to there's Mark. to is, factors much We we risks those level? talked see, and quarters too think We're the The this the reserves pandemic wouldn't are. that continues, this of the level, I through is to what I sectors here thing just be on would still trends to But that the quite to it we to higher because that trends we we hotel, to Until historical portfolios. -- we would our

David Long

for it. my Got it. appreciate Thanks taking questions. I

Mark E. Secor

you, David. Thank

Operator

ahead. nice Instructions]. Please KBW. question Damon [Operator comes with go Today's DelMonte from

Damon Delmonte

guys. Hope everybody good morning, today. Hey, well is doing

to your wanted portfolio. commentary circle just question, Mark, First about the securities back, on

up X there that most for characterize you billion remain to year. I would the it? get securities of and in Is 'XX think referenced how you the that

Mark E. Secor

what planning. some foreseeing, that we're around Yes. Unless aren't we That's needs use yeah, but the year. figure targeting there's liquidity $X we're billion we that for some could runoff,

Damon Delmonte

there like next quarter, to the get to or do be the over that legged quarters? you couple in into going expect first And is

Mark E. Secor

in the first year started hope that Yes, to quarter. averaged have purchasing have and we through

Damon Delmonte

margin we illustrating dynamic as did the And job a good the you then, of the of great. Okay, think here, assets sensitivity.

the I may this have So missed margin PPP impact I quarter? first, guess the that. was on what

Mark E. Secor

we -- we XX to have basis And points $XXX,XXX recognized fees about the is have yet impact. only would remaining. what's have on been we stated, only be of

Damon Delmonte

and yielding securities, your assume Is the As into margin should cash to has higher be bottomed in, are you of be presumably sitting point you that's that than kind So trough rotating for the environment it that feel upward? rising that, and has at with. which -- fair core you're rate looking core positioned this here? you will being

Mark E. Secor

cash point, XX the Yes. talked At a basis margin, impact significant excess I on about this as we points. the mean, had

cash, So help point. up as use that to from the that we that was get going mix margin

Damon Delmonte

my just Okay. or -- a And second my then question as follow-up question.

Going back range based going like overall side, you to forward year the of or expense the your fourth off for growth range a providing quarter numbers? guys are

Mark E. Secor

Yeah. into think fourth X% some expense we offsetting that FDIC some the We yes, the we But calculation. we're expense said, would that I we try average and play from anticipated mean, from growth catch run salary had Obviously, XXX. I just was is. some rate have as we've bonus higher assets the had ratio to quarter, the in targeted up the going than expense forward. to what what

good into I So next start think looking place a year. it's pretty the for to

Damon Delmonte

Great. very today. Appreciate insight Thank much. you the

Mark E. Secor

Thanks, Damon.

Operator

from Janney Brian Martin, Please comes go ahead. Montgomery. Question

Brian Martin

morning. getting Mark, making you're want touch are of could good securities. that? if a see I you're that. on Hey, on to investments the What the you're you bit new kind about the thinking just little rates on how Just

little quarter core, little on how the your can to occur begin and about talked on on out make more first margin you right? you Another on your thinking into sensitivity. a based rate ball some after on, if percentage also then you we the go bit shakes be a insight that You should on it about XQ, probably give as margin, adjustments had that. increases, comments crystal How

Mark E. Secor

pretty for the past, looking looking needs, at few it putting to that our policy of put the Nothing That's some then it range stretch. outside at made close of would we we're mix and on. in products. mortgage The corporates, not portfolio portfolio, off equivalent a comes the your typical a what X.XX% have tax sub yield investment [Indiscernible] to allowed buying quarter. debt available, it Yeah, as new

at upside a think -- investments the not there's So when only the yielding I rolling ability cash we off, flow off. of look the there's high rolling lot

help will So balance forward. with the answer I that in huge we to think question with movement, from what as we would pretty just the of margin, The impact I some that, margin Damon comfortable rate potential maintain feel cash the that go decline. last reinvest as -- we

a been down is XX the decline. basis point out slowing net you would've have that So PPP and

be on loan but on pressure come are So the not to potential rates. the the we back. see are currently shouldn't under The is that portfolio, in of able loans in significantly, some portfolio that going

bit margins to sheet from come currently. I the little the fluctuate it the as continues as pressure the continue up on. the to so, the where focus is balance to our on next asset product a growing net there's margin income, because changes. here new again, is So on think say, we And and continue of would But interest coming do

Brian Martin

maybe understood. And guys, a Yeah, Thanks, Mark. follow-up. just

has -- guess, you seen any are I line guess, changes and of credit Just see I have change of there? guys maybe there starting been that, any then any utilization, to you

Dennis J. Kuhn

we usage. over growth did last levels, lower continue is This And at see two at to be Dennis. -- are certainly. line quarters, in yes, the They really

additional increases, I know sure and into growth full rate margin So we usage. help XXXX to I'm we your year, And we two those wanted Brian, going started rate for the -- last see line as are improve so again, increases to an what quarters, forward. stated, we million up saw reduction the have I the to line and in expect have but to going $XX in uptick plans would will be see we usage. a over modeling you're asset -- sensitive. follow But not

Mark E. Secor

the Dennis. line our usages. we're consumer and Again, a low Both on follow-up on commercial, to,

consumer where line lower than We average quick Just a of on usage are maybe historically. we about lines. what million XXX an would be commercial still have estimate average and between in a basis would been, the

Brian Martin

Got you.

the you recall. Mark Okay. you don't I amount, said gave

You those today? as floors, comment on the PCS there stand are can I in have But portfolio? Can where floors as the said you you moves mean, what but immediately. far

Mark E. Secor

be that floors. we XX Yes, significant up out that's is but increase to We There basis those. amount. on factored a not portion modeling. and a the we have into of do and will portion above, have above, a than time to XX get see And get we will more have by a that do point to

much if because slide a point So there's of not XXX between increase and on noticed basis difference XXX between you that. the

Brian Martin

you. Got

so thank Well, Okay. you much.

Operator

today go question Race comes from ahead. Sandler. next Nathan Our Piper from Please

Nathan Race

Hi, morning. Good Yes. everyone.

Mark E. Secor

Morning, Nathan.

Nathan Race

question dynamics. Mark, balance maybe on sheet just a overall

extent balance maintaining more to modeled, revenue less just potentially spread possible the you or on going guys are forward? deposit any the Just or that focused around than attrition grow they to balance thoughts support is been has sheet to given sheet maybe levels the exist guys there TCF deleveraging -- margin runoff as today the you

Mark E. Secor

past FHLB earning they in think one as not talked We've would I -- this was instead balance a puttable deleverage with that environment sheet the asset. about and advance wanting the an that in currently, year to this a for in last opportunity we the maintain that point, $XXX can we're and borrowing talked about just best of to million the the look January. growing we a from at in past three-month basis got we put example,

we especially, So range that XXX different, more with around that at pay the a maintain not down. and they quite But And the specials at at but did a basis level ten to some it's another, came had to little million balance back sheet. puttable points. we six-month

that. still maintain extremely opportunity good So to it's

anticipating of Just of rising that environment borrow of to another, seasonality in some we a some in so have our don't deposits, rate the

Craig M. Dwight

are we it's possibly not that's some redeeming Nathan, significant. sub-debt but expensive, looking at

Nathan Race

was quarter XXXX. housekeeping Wealth in growth revenue down any revenue the market compared was Okay. specific Was there? the XQ. outlook for Wealth volatility and Management much noticeably, year-end, One kind There so to driver question, in towards just fourth of Management the the

Mark E. Secor

the did having accounts quarter, That's ESOP not revenue trustee third related going we of sale primarily the in that forward. to the directly and that

Nathan Race

has pretty And I at rebuild the then I deal quarter. just think if could from healthy Great. one TCF clips, more capital on to, with last already the started priorities. dilution deployment post Understood. Okay. ask TCF just updated

some that the just what discussed Craig, early Investor what in updated into is any XXXX? as perspective. buybacks guys maybe an in payout around generating an the interest context, seeing opportunity well share from at leasing and any from And believe Day. thoughts thoughts December on acquisition there you're just I updated companies So and within asset you

Craig M. Dwight

generator. Nathan, to company thanks TCE for want of in the do question. this We unless do a this or not leasing build see throughout a acquisition year, taking permanently it's place for up asset months an the but we year first six

Ohio. footprint. However, will market current us for It's as We're at hearing. I Typical looking you already probably first pick million a or months, is in again discussions either in-market billion think XXX extensions spot the X size to six a our after target conflict, or Indiana, up for Michigan, size. sweet a

Nathan Race

appreciate Okay, all Thank everyone. you, the great. I color.

Operator

this over final any Ladies back I'd team for like our session. the turn conference remarks. to and to gentlemen, concludes management question-and-answer

Craig M. Dwight

in today's future. Thank to near and look Okay. we in talking with you for forward participating call you the

If a and to Thank you have give good day. call. questions, free feel you myself Mark or have a

Operator

you today's conference sir. thank attending concludes We This all presentation. today's call. Thank you, for

You may wonderful have day. lines and a now disconnect your

Horizon Bancorp (HBNC) 27 Jan 222021 Q4 Earnings call transcript