HBNC - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone and welcome to the Horizon Bancorp Conference Call to discuss financial results for the three months ended. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity for you to ask questions. [Operator Instructions] Please note this event has been recorded.

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

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

Horizon update and today website, EVP Lynn to Dwight; Financial and Chief it copy call. business. to Craig If of at certain www.horizonbank.com. and for the non-GAAP measures forward-looking yesterday, presentation Mortgage anyone help Noe time, a over management and Operations Representing this release investors you, made Kathie Officer, Secor; and At turn contained Thank press Horizon Lending addition, intended Senior understand have obligation like to are supplemental Horizon company's and The may already refer any Chief measures In during presentation. Banking company Executive Dwight. the and Reconciliations EVP Officer, sir. issued statements to no that EVP Mr. Najera. call Chief and I'd Senior the Commercial Officer, Mark are Officer, these Chairman access does to can Officer, the financial by you EVP not over you and DeRuiter; the Kerber; to are in assumes Retail

Craig Dwight

participating Horizon conference call. Thank you, morning. earnings quarter Jacob, Bancorp's second you good thank in and And for

record July XX. report pleased and second that follow presentation published press a earnings yesterday, today quarter. the to will comments Our is for release the continuation of investor Horizon we

and and to quarter, going loan the into continuation commercial excellent The quality. our XXXX seven the close plans And pipelines. strong asset offices consumer with in additional solid of momentum third and an growth

Horizon XX.X% a quarter the growth, of a annualized reported tangible associates financial X.XX% which strategies. are second our first X.X%. Starting for reported of the company in highlights. quarter how implemented on at and first completed quarter last X% Other double-digit from and income; the are of achieved closures they've consumer results, reported branch share, efficiency income This Horizon the $XX.X earnings return the represents represents pretax to $X.XX which record a from net We Horizon $X.XX a XX.X%. net of on successfully return the X offices, for million, the favorably Slide XX.X%; proud increase pre-provision quarter's per equity cost reduction commercial of Bancorp. our to quarter a very just reporting our pre-provision the fourth as growth margin. in in $X.XX an Driving ended, over metrics the quarter's average ratio increase average pretax quarter-over-quarter increase in saves notable of XXXX. outstanding on net Overall at year's interest an prior organic loan quarter additional assets and revenue and acquired compares

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

due core to deposits. Our risk low-cost So and continues diversified lower is Horizon thesis liquidity returns to excess in with report why superior sheet, a investment invest simple. balance profile Horizon? our

has private and the regional development focused transportation-oriented double Lake We expansion improvements known in track Indiana promoting infrastructure rail development inflows are attracting in the commuter Midwest and a on Michigan located attractive regional Considerable Northwest investments as extensions. The transportation West and region. of in of County are in record creation line Indiana include the growth markets. authorities

manufacturing And is lines XX% between then local as of The To in further growth they back yesterday, both There and distinguish in additional to South to just Today, a build-out Bend. output, a lower ranked which Rescue as through life. dividend the Horizon's creatively Horizon a believe quality and to is and outlook growth $X earnings include years top accelerate with June infrastructure of XXXX, life, in Indiana opportunities approved company, in will seeing and is years. GDP. taxes. additional for which and communications XX. quantum next us a enhanced quartile will due Indiana and Lafayette beginning challenges. XX% for are American continue investment Horizon through surplus considered are quality to labor with are considerable this relocations supply anticipated availability has spending has growth support change Illinois a we that total compounded continued partnering managed force in into investment and to XXXX net Senate has communities favorably we infrastructure dollars the its income. of provide Horizon affordability considerable region. rolling support Horizon provide Science spent increased next are the two stock the quantum for peers. billion from are Both Michigan manufacturing the plans of outpaced of an corridor. of X.X% XXXX the communication we an finally, in CHIPS markets annual assets universities rate into and Our Act, to promote value Chicago, the attractive with attractive over were And out chain couple historically be to Plan of over increase state to our

ability clearly change and attract For in talent. past This demonstrates grew share X.Xx the four years, market the our to target we GDP.

total ability grow the increase to Horizon's line. illustrates than to the efficiently bottom assets earnings faster company's addition, In ability

to advantage is technology data the key and digital new select peers, CRM due ability management. transaction in-house to on per community than technology with banks strategic partners optimum at Moving core cost and Horizon partners and on in of expedite flexibility. services price transformation. to relying to our who the a lower best products and able to best-in-class Horizon's include provider, over flexibility onboarding platforms based core By Fintech and on can our deliver not service

has Our acquisitions, integrate XX also last proven branch in-house strategy effective deal. when Fall's very we including the core

In voice are an improving groups. have be addition, our future allow entities on user developments as of and on advisory active considerable resources Horizon have focused on to customer the nimble, these boards Fintech partners or most experience we representatives

total proportion applications As to doubled and pricing you spend can devoted of customer the than XX, see employee-facing last over four more on years. Slide the strategic tech

assets measured XXXX. investments a $X.X per in million employee employee our As assets million from to $X.X per in in technology, result has of as productivity in improved in its Horizon XXXX

to And answered in our increased over see spend now our deposit XX% to increased online annual continue in experience XX% our XX% account an technology to the programmed XXXX scalable. from and over transactions bots. XXXX. plan digital by in to from are the Horizon's Our increase more chats We model our make will customer XX% year-to-date. openings years over XX% two enhance year of next online finally, last consumer ever

in and capital throughout occurring levels at XXXX. the X.X% dividend Even we technology Horizon or the as and As the has to offset retail XX, in recent increase increased to initiatives. the organic of to of with guidelines interest network continue accumulative a of rates income manages prior deployment dividend and dividends Rising these growth effective analysts for and at organization. financial on losses June on the evidenced earnings less improving sheet efficiently, investment in years, yield comparable to reporting. holding growth average non-interest a than continually unrealized as we aligned example, companies focus full-year capital based Fall Horizon's these in comprehensive with of efficiencies expense deploys as by assets XX reported other in recent the target our intend adjustments bank's our mark-to-market acquisition most a by the X% investments, losses of for result investment XXXX, the balance branches in of investments to portfolio. to be appear unrealized

loss, Due position pursue period end strategies. to our as from As strong payback that and to quarter the June declined to the March we organic at bank's capital significant growth Horizon's X.XX% the we unrealized result believe on have dilution, flexibility a quick to XX. still XX, TCE AOCI X.XX% continue of of

as dividend In of fully in aligned announced XX-year share. our dividend quarterly dividends. addition, $X.XX has with We uninterrupted per a are Again, X.X% expect we plus quarterly just to policy from continue $X.XX earnings our cash Horizon to in increase consistent June growth. dividends our a

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

Mark Secor

margin. Thank consecutive net as a income quarter you, of improving growth Horizon second of reported loan record and result net interest strong Craig. its

gain and as our annualized revenues XX.X% $X.X increasing into and to going solid XXXX asset-sensitive compared reduction balance first continue control. second successful XX. quarter strong reflect more We increasing assets pleased put details of the more mortgage quarter without with sale on the increases, X.X%. with the Disciplined noise in quarter. basis while was revenue of only on loan pre-provision Starting and of growth. results second we with quarter. deposit place income million driving and driven in quarter income one the The assets provide sheet. impairment they XXXX to increase from deposit very primarily balance continued XXXX, wanted core demonstrates interest-earning in pretax point interest-earning to which costs of XX, increasing sheet, the in with The mortgages achieved of net total with maintaining second XX.X% of adjusted with an the the increase the PPP, expense increase by Comparing servicing momentum interest we to along by during adjusted net on growth pricing in the a a to are quarter are strategies in core earnings quarter focus Slide income third company's few net results income Slide the as of second rate absorbed

includes a previous change move June more GAAP asset their that the XX, which with billion adjustable of ratio sensitive rate with billion XX-month $X to assets, of of we compared to would of X.XX% quarter are As $X.X end index. approximately rate a

is XXX basis growth increase in XX, base result lagging income a margin increase net betas million. of increase assets increased expected in approximately to to With the of consumer used or a from range the with X.XX% quarter, interest in income and $XX we our net for increase deposits point for what interest-earning markets generate second X% as was at the currently beta in as the below deposit June As rates million. the model growth betas actual rising are rose, X% assets for case growth money during which deposit The an a public would rising being interest of rates, earning XX%. the the total to interest the on of adjustable income $X beta higher an rate modeled. second rates for assets, Contributing in net average from and deposits, helped margin, in XX% for funds with along quarter well

We not increase. rates continue the years of unrealized intent points the and loan as these losses like the losses the expected due higher of basis available-for-sale repurchase quarter in reinvested and disciplined and of $XXX no to margin. margin approach on are of more during sufficient short-term during Slide change XX, the time by over expected from will increase of XX securities Slide common and expect ability deposits. we balance equity started the assets maintaining entire total our the economic like rates maturity, by billion expand the rates. the flows end to was impact offset is a these share in model will liabilities from over of This ability this basis bank's rates margin XX, investments quarter. balance lag actual rising Slide do end support rate the this the on hold second only recognizes increase impact management. increase two point continue to cost from continue through quarter. growth valued, the portfolio four use was of conservative investments million the rate one compared XXXX interest-bearing to the or equity basis available-for-sale basis liabilities. sheet. cash activity tangible more deposit the continue our and decrease year-end. in flows pay the cash lag strong the loss in increased the betas increase portfolio this yield of increases. X.XX% the years. our last to growth quarter-end, to deposit we We down to and assets deposit allowed deposits quarter-end deposit rates, portfolio quarter pressure XX, raising XX, second have first for common costs investments and the flow Slide beta quarter the as of had the the points, effective capital to only growth to $X.X cost X.X in with expect the future. adjusted at second deposit are additional quarter short-term items that With duration points increasing the to book our to rate to rates, a is the quarter and and The we merger the as in the was XX believe increased by value this the anticipate to not to the cash rates of rising continue to disciplined basis recover end in fund increases. earning due an certain is We beta these help positively ability yield at to investment from is to restrict the increased using in equity, asset-sensitive of The fund When to to But sheet The next XX in unrealized X% increase ability value Because on tangible increasing initial will and core increases enough expected point margin consider With to due the during cost anticipated, approximately higher-yielding during reduced will more the a quarter. XXXX. the interest at

beta reaches XX% if for short-term to total rates is Our or around XX% higher. deposits X.XX% targeted

significant to help going down lag our flexibility rising spread will deposit expenses were last The rate core operating our this into XX. to the slightly assets. interest-earning maintain opportunity will low-cost We deposits initially that However, provide valuable ability believe rates quarter. on our Slide environment. and core compared

core and achieving for expenses, less. increases in continue expenses net growing by core in X.XX% service to absorbing or we X.XX% As in We expenses. average employee our we XXXX, consolidate mortgage-related to of quarter, was fixed will benefits as and and income the operating anticipate loan goal PPP expenses. on to interest incentive quarter. year-to-date, our core before now deposit achieved This quarter six at Last an interchange anticipated We were compensation second income, in manage charge in do the and plans reduction months. noninterest seven will and tax assets The leverage has growth was and of the need to performance. plans to payback reflect goal charge charge the continue assets onetime this and revenue, additional controlling increasing salaries expensed help positive $XXX,XXX approximately onetime branches announced results overall which X%

investments tax our credits to make to continue effective tax also support rate. We in

on an our will Craig lending activities. provide update Now

Craig Dwight

Mark. you, Thank

manufacturing update. Now an quarter increase loans We growth an the for investments. of of excluding for and continue loan the the $XXX loan in in second most there's loan annualized business million growth XX.X%, we rate number strong participation, loan an to regional a commercial Midwest and quarter commercial growth, officers, growth reported for PPP across in and to reported growth rebounded as quick credit commercial year-to-date, sectors. see of at sold the outstandings, infrastructure loan increase Contributing line

to quarter is approximately momentum of good commercial second into comparable of a In quarter's addition, [indiscernible]. the second we million, $XXX pipeline with have going which the pipeline

first continue growth pace loan in loans as a annualized the XX.X% in we and credit strong car consumer quarter of at line reported equity, experience addition, excellent balances. we of to demand home loan In in balances consumer loan for increase

production year to $XXX XXXX pleased million. for productions the are and favorably $XXX with We quarter which of total million, our first entire at $XXX loan compares consumer respectively, and the second of million

franchise key loan loans down Overall production first even loan low Mortgage rates, inflation prior-year asset company rate quality compares highlights, a low Bancorp's reduction employment remain years. growth the high Horizon's income strong by favorably XX the we in third at assets is our total Mae's summarize Loan Bankers over quarter. year-to-date remained period, the Horizon Horizon the revenue in robust of annual in and evidenced respectively. net XX% a forecast nonperforming and and quarter reserve compounded annual the markets, second loss compounded revenue. Mortgage by demand expect quarter Association's To for as charge-offs Given for over a with XX% to past XX%, our Fannie total and as The to which XX% constituted only of and of rate credit solid evidenced consumer loans is growth total net XX% X.XX%. growth X.X%

in interest and investments branches rising in acquisitions XXXX growth commercial of commercial discipline, earnings approach chain is rationalization. in well operating loan made result branch 'XX balance in both given The lower ample than investors, capital growth, flows returns peers. especially cash profile tangible provides and liquidity geography portfolio, many wage XX to and low consumer is of a loan teams, and consumer future combination XX.X% Horizon and positioned footprints, expanded as to lower Our our risk and of rates, which of sweet higher for sheet the our has supply a disruptions. for a and and product sheet spot new lending with a demand, Horizon's inflation balance an to fund diversified related our recent mix volatility for on profile increase risk disciplined of our cost

annualized our XX%. solid growth, year-to-date is sold loans commercial in an Slide growth our an to annualized five year. please of loan equity As X.XX% exceeds beating exceeds our This growth Thank of we XX.X%, noted XX.X%. December prepared the on Horizon XX%. increased results, six range is target X.XX%. today. quarter to of concludes in questions. metrics year-to-date the targeted for XX% Core second to XX.X%, target now announced Horizon rate ask XX for of PPP quarter I'll our XXXX and our operator lines excluding second and XX.XX% our on exceeds to outlooks and quarter Return reported Return is of our production this at range which average assets participations And XX% on Bancorp. Consumer Overall, target given exceeds open you. the just of which average of at remarks on outstanding

Operator

Thank you.

We will Instructions]. now begin the [Operator session. question-and-answer

The is of from McEvoy question go first Terry Stephens. line ahead. the with Please

Terry McEvoy

Hi, good morning everyone.

Craig Dwight

Terry. morning, Good

Terry McEvoy

you Maybe bottom question, the consolidated. if branches across line the savings, in plan the first they'll if be that you to on using scheduled about Could invest to fall seven bank, making talk that on would just to the investments? you business? plan so, cost are the those whether the where And or

Craig Dwight

Terry, there? we fund software in that see that's our better adding in the to help just to Mark, customer to of over are technology anything team, we add to cost our and to you both bank. And else the branch people. to want where enhance really rationalization their and investments the technology side experience, and do is serve that transfer

Mark Secor

similar saves to as from we've the cost year did I goal seen No, think the expenses and we spend the more expand. to branches what with keep last having flat is able technology that's we

Terry McEvoy

the follow-up, betas model. as XX% XX% question the Mark, this X% longer-term deposit second of my want So of XX% your mentioned you a by to see you end quarter where was half last a beta still prepared And beta betas year? this total you I in the that what clarify Perfect, Or year? in doing and figure? is, the just versus was do the see to remarks, then that that just guess I trending

Craig Dwight

with larger were the come to when Yes, of towards be we're we accounts lag. the the end some to of quarter. the that is just started -- at for X% that would looking feel quarter, the We able pressure which

couple as to that costs, XX% for to continue that we the range the the to yesterday, we're for And would we rates targeting So for guidance so go anticipate and year. more. what up we have the we do be will as expect that's increase saw a XX% deposit our year and

Terry McEvoy

I you appreciate Understood, that. Thank both.

Craig Dwight

Thanks.

Operator

Long question you. Raymond with Thank line the David James. ahead. from next The is go Please of

David Long

and do third growth place. strong the off mentioned for a everyone remains quarter, loan see annualized and morning kind growth questions. percent in you pipeline in quarter in Good maybe as well? here you thanks loan fourth my of the still sustained of XX-plus taking what quarter Coming in Craig, the loan

Craig Dwight

comparable comparable the in expect Noe pipelines consumer both there last quarter. like Lynn, our especially starts and year, consumer quarter, and in are side. comments? they the head have to Lynn so side. jump production any flow seasonality, And on David, to commercial the and for third in additional we since Fourth commercial I'd to consumer

Lynn Kerber

Sure, good morning.

pipeline As We holding. has that our projections this and really Craig have saw our in and second held fourth been first originations and the of mentioned, quite year. and XXXX, third actual of quarter projections quarter pickup in a both

our mentioned, loans. anticipated And those the with projection third quarter. is is on it we very closed we consistent based when As second projections, and approved do quarter

So we good feel about pretty that.

just at the at QX, some this there's not point. with there to environment We're increasing, that course, sure We're the possible fallout and more from ahead could much point. that. interest really rate be how where rates Of impact looking

David Long

do how simply driving where Got the Is you with veteran And the it, I'm categories? among is really some it it view through? from in this loan color Or thank those and wins it there. some well markets? PPP doing really -- down, And hiring of peers? the then What from additional it? of -- your Is what's dig really for you market its just some you growth -- share the driving you the question. coming going what's gains it -- with the Horizon is when growth, have what bankers is

Lynn Kerber

I'll Well, commercial. speak to

a it's combination really. of think I factors

their and lenders West and in are in very that the well-known XXXX. our and added feel benefiting expand markets. Indiana, in we're did we know, seeing development particularly And you those relationships their of Central experienced that. lending benefit Troy Those from team and as we're I efforts, Michigan business and in we've First, also

Additionally, strong in demand there's been market. the

some rate make they're don't know benefiting our we're think interest And that going of a there's the then do in like from the market markets, environment, happen it's looking competitors disruption customers, I to with that the a if our time we've you been rate and at and to few with they're some project, forecast. of some candidly, that.

David Long

Great, thank you. And then just, okay go ahead.

Noe Najera

wanted side No, strong and the same add to some Kerber gains. of Lynn I had just We've on that and realizing consumer sentiments regionally and footprint the hires our echo shared. are some those expanded

that want side. I So echo consumer on sentiment same to the

David Long

you. thank it, Got

Craig Dwight

this Dwight. David, Yes, Craig is

gains We outlook. have group every in partly of And that the expand and construction do any supply and further actually overall, some improved. with members and They the are contractors feedback busy. projects general delays are less chain. host because county some very concerned business, positive, the biggest about that get we we in area so meetings including regular economic local advisory The board

members. So positive individual overall, Board from very Advisory our

David Long

I it, of Got color. Thanks. Thanks everyone, it. lot that's appreciate

Craig Dwight

Thank you.

Operator

next Thank Please from Race go of question Sandler. Piper Nathan ahead. the you. The is with line

Nathan Race

morning. hi Yes, guys. Good

Craig Dwight

Nathan. morning, Good

Nathan Race

saw just this Question balance on of of going quarter. little We sheet a kind outflows is bit forward. dynamics deposit overall

liquidity, by augmented last thinking of of this branch how Obviously, acquisition the the back with Mark, perhaps, ample about you half in flows year. overall kind curious, guys are just you're just year. operating So

asset have or anticipated stable hold quarter? are earning saw there guess earning the kind the of you mix asset kind from balances in of stable I second So what in we base earlier guys

Mark Secor

No, thanks question, the for Nate.

municipal comes and First, There's we on flat. had some deposits, with money out. tax stay seen in seasonality deposits when fairly

anything bit not have in decline here significant. little but this We seen of bit, nothing deposits month, little a a significant,

we have So have has but from our growth -- we anticipated guidance. -- outpaced would loan the what

to that we So fund growth. and borrowing are

other cash half is -- from flows And it of mid, in The we we the later the portfolio. will that the we that started back we're that quarter. mentioned I back the thing can investment second get bringing

the will will we help be growth. by of some those the fund use dollars So growth But deposits. start to loan funded to loan

look of are We point to this growth. deposits at try to because looking loan for the

out strategy there So is a that's also. that

Nathan Race

helpful. It the we've Understood, outlook the forward. margin outlook despite that's And of in for relative the as the discussed, relatively pretty a like strong loan quarter. quarter production about may back to perhaps of increase the growth sounds half some fourth just then going remains solid third uncertainty thinking overall that kind year into

I And at guess, of about point? guys what around variable for XX% potential you are that what of with second saw kind of lower expansion So similar being a quarter we how margin here are your loans rates? from you additional decrease Should expect the in the we execution. kind just given guys forecast than kind deposit of beta trending have thinking this

Mark Secor

funding able here cost this of beginning it so year, looks of at the up. going the the should were we to that side much are deposit we Yes, I because low think still pick see to the -- do because margin we expand. lag

XX%. anticipate year for the the would said, to we I As beta XX% be

assets this loans still should of upward So at re-price continue but and margin move it I think will rates. we higher on that what earning put we from to growth as at saw the quarter, slow higher some rates

Nathan Race

I just it, Got one understood. Craig if And for perhaps. could ask more

Just curious base. hold external internal President of an you the guys title you candidates? does and stand kind on internal succession that to today? both on search process that where Are Or for a continue update as to get exploring

Craig Dwight

to here third we Committee Search and Board -- it move have continue forward quarter. to the announcement an Nathan, in the Well, plan

So…

Nathan Race

the Okay, back great. will questions. for step and I thanks congrats quarter. on great And taking a

Craig Dwight

you, Thank Nathan.

Mark Secor

you. Thank

Operator

is next question Please DelMonte go KBW. The Instructions] of ahead. [Operator with you. the from line Thank Damon

Damon DelMonte

Hope guys. today. morning good Hey, well are you all doing

see Just did be and the dovetail obviously, loan the into you of side in going the light credit of credit in I we kind does trends reserve combination to on we of guys. forward? this very are despite probably in strong growth start of But about environment -- And you the quarter, trends wanted markets? could of remain going the off down strong in reserving then for into view the how come How things. macro thinking with mean, your provision recessionary size broader that portfolio. a issues the of the

Lynn Kerber

Damon. morning, Good

Craig Dwight

Lynn. ahead, Go

Lynn Kerber

Okay, Star pandemic. could related par some quarter. rather thoughts We've RevPAR, reserve seen not that few report of the on we release to is quarters, we pre-pandemic in in We bit start over positive change do numbers. the The well numbers just mix special very We a were occupancy, with some last but on a our Hotel allocations significant the cases, above the that through in our hotel two segment. did reserve. felt portfolio to this very recent in those. had And performance even pre-pandemic had high little

portfolio that geopolitical So for that fuel driving the really segment that, impact and allowance. and supply we in real is additional of macroeconomic of on allocations and some some our the wages had Offsetting of is in inflation, mix income, disposable well, change conditions, continuation performing the chain.

consistent. little this for So our feel philosophy say that in portfolio is I ratio analysis and on the a there's in we is at would amount overall and point reserve. on metrics it the mix bit And But of the a time. our reserve appropriate going

quality. be that to credit going more see the know our I dramatically. changing of So macroeconomic don't I and general conditions reflective that It's

Damon DelMonte

Great, that's great color. Thank you.

kind to if current let the not it's this you level you're about good reserve at then level? quarter? feel guess that will XXXs assume into level I the the to said low XXXs drift driven So that provision in going down the the keep that differently, help of

Lynn Kerber

the amount. going my And will to we look general be driver Yes, be that that. again, key I watchful I at as regarding back comments and economic to go conditions, reserve think a the we're of

Damon DelMonte

fair Do great. for of as more the little Mark hold little the a charges to year? core does up this from back the you nonrecurring $XXX,XXX here? And $XX Or Can provide expense out kind number. color enough. take you trend line? on it, Got that half quarter outlook. a or If think then question a the close $XXX,XXX of you puts of bit a you around for you're it expectations That's Thanks. the million

Mark Secor

a it's think I Yes, good core.

as there'll up going -- are by the in rest quarters. stable. the mentioned, the here categories side be be some will and into and we third I of large, should might we -- think I But as probably some where of fourth increases that fairly the benefit trend

Damon DelMonte

just What's I guess back on expectation rate. the half year? of the your Great, tax it, the and okay. Got for then lastly

Mark Secor

-- it active in investment are low-income -- maintain. in credits. Yes, We solar should with of the housing then municipals credit, the also and investment we portfolio

that we good effective should anticipate through tax the So be would year. rate

Damon DelMonte

very you Thank great. right, All much.

Operator

the Brian Martin Janney you. is The ahead. Please of Montgomery. go Thank question line next from with

Brian Martin

just effective rate, The be on, Mark, are to you of guys guys. follow-up. year second rate Hey, good expecting, the what clear tax of on morning that? so one half just the because

Mark Secor

XX% XX% range. the It in be should to

Brian Martin

if think think for then margin, got Maybe, okay. as of maybe XX%, off you. about see get more to a just just Mark, about you later increases of kind Perfect, year, from I as me. I general, next the thinking that level, one the taper is in you betas doing on next year outlook kind in you here? And Is margin that, on maybe process know, and how balance what just if begin of year? quarter kind just we just it thought the the year's couple in the pick you're begins based don't today is about sheet your high to first stabilize, that and of outlook, up, growth next mean, rate

Mark Secor

And the which I will that increases, stabilize. margin. see these continue after be we which will We'll see through the Yes, assets we think accurate, kind rate higher Brian. funding rates, to to help of should costs would see should re-pricing, help we get

that into be before see -- year So that. next might you but

Brian Martin

Okay, got you.

side? this for seeing maybe mortgage bit by on guys in performance mixed mortgage? sense. quarter your moment, kind far? some How of but of the strategies. kind mortgage success some the a kind lower -- others thinking just you that touching you for your to about how then a But is a higher the some about of makes banks baseline the still is on little And and year, with on are change had here of so Okay, of just relative to side this outperformance Or think or it

Noe Najera

Noe production that we I the in and for is Najera. take mode. are question. I'll you that. believe pre-pandemic Thank This ahead seeing the go

what 'XX I were to 'XX and we go back and think accomplish. to we able

seen think go off same those I we that to it's trend remain if the going back and we've years. to level

going consistent to that So we're outlook. remain in and

Brian Martin

production, dollar that's for is level? your that saying kind Noe the consistent and Okay, a with to be referring the clear comment. of kind in mortgage, of amount is of $X.X Just million like the that to you kind

Noe Najera

consistency forward. going more I -- that we're see that is to moving We do do.

Brian Martin

how or payoffs on side. Got you, production then there -- been payoffs me masking maybe one been for there And loan the Certainly, just kind this have of is to but it really some it's and I relative it in strong quarter, this lastly masking payoffs making trending not have originations? soft. it, Or mean really been okay. of just muted originations. the strong

Noe Najera

have payoffs our seen historical have We to trends. remained

closely. very monitor do we So

So continued. those

So still there the is consumers. for demand

continued our are shine we payoffs. to performance seeing So I overall, But is overall. think through

Brian Martin

if one That in And sneak Yes, sense. for can Craig. it okay. one I maybe makes last

Just Craig, your of of is the given that given potential out about to there today? conditions on mean, table just M&A M&A. the short I your today your comments not market restrict not growth some today, and M&A. on still Or for it take dynamics the ability term, in kind are and in and capital it's market is conditions

Craig Dwight

for Brian. you the question, Thank

M&A. plan looking without robust First pretty of is all, out three-year Horizon's

very our in a transaction, be transaction. it at market low-cost M&A look or growth attractive very to complements a to that So strategy one has to a

focus. converting which taking primary years. I So today. for of loans, those our the is would to our sheet, balance M&A the That's is say strategy next priority our couple investments higher It's not

Brian Martin

Got questions thanks you, quarter. and for nice the okay, guys taking

Craig Dwight

Thank you, Brian.

Operator

to over concludes session. to remarks. This back question-and-answer the you. would conference Thank I closing Dwight our turn like any for Craig Mr.

Craig Dwight

that future great earnings. continue Thank and have this you, forward and Thank we of record speaking the our morning, pace to a in with joined you you, look call and hopefully this Jacob, near to and again all day.

Operator

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

disconnect. now may You

Horizon Bancorp (HBNC) 31 Jul 222022 Q2 Earnings call transcript