Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| Slide 15, our efforts to manage our operating expenses continues to be a strength for Horizon |
| As I stated in my opening remarks, we're very pleased with our third quarter deposit performance, maintaining Horizon's core funding stability and limiting additional funding needs from brokered and/or wholesale balances |
| Not unlike the first half of 2023, the team continues to manage expenses very well, and you'll see in our presentation, our credit quality performance remains a positive foundation for the franchise |
| Those performed extremely well, in fact, really stellar |
| So I think where we are right now is good guidance |
| Commercial credit quality remains strong with low past dues of 8 basis points for quarter end |
| Horizon has demonstrated a track record of consistent underwriting and active portfolio management to ensure the success of our clients and our shareholders |
| Our asset quality metrics continue to be strong as outlined on Slide 10 |
| The franchise has a stable and loyal deposit base with significant excess liquidity of $2.8 billion, providing flexibility and nimbleness to our funding strategies |
| Credit quality across all of our lending classes is performing well and reflects our history of consistent and well-balanced approach to lending |
| While it narrowed in the quarter, we believe a 414 basis point spread in Horizon's loan and deposit pricing remains healthy, compares favorable its peer's recent median, and has the ability to improve over time |
| Our net interest margin and net interest income trends should continue to benefit from our balance sheet and pricing management |
| On Slide 13, provides detail on the resiliency of the portfolio, and the team continues to be very upbeat about its strength |
| We believe our end market revenue opportunities, the valuable deposit franchise, credit culture, expense management discipline have positioned Horizon well for the final month of 2024 |
| Slide 18, Horizon continues to maintain solid regulatory capital ratios well above the required -- requirements to be considered well capitalized, and we believe we have sufficient capital to be open to options to improve our earnings outlook in the foreseeable future |
| The cash position helps provide additional stability in uncertain times and as mentioned previously, keeps the door open for strategies to improve our earnings |
| Our loan growth continues to be solid in both commercial and consumer sectors, which should be valuable contributors to core earnings in subsequent quarters |
| As mentioned previously, the deposit portfolio continues to deliver strong results in terms of stability, resiliency, and flexibility in our funding |
| Our third quarter results were positive on many fronts |
| As Lynn stated, we had quality loan growth from the commercial team, improved non-interest income and continued a disciplined operating model in respect to expenses and credit |
| And our approach to new loan production spreads and strong loan growth shifted lower yielding assets into higher yielding loans |
| Horizon continues to execute well on its strategy of shifting growth to higher yielding assets while maintaining its conservative credit risk profile |
| We're pleased to share our third quarter results that were highlighted by strong loan growth led by our commercial banking team, resilient and stable core deposit portfolio, and an increase in our non-interest income performance |
| Starting with Slide 14, non-interest income improvement over the linked quarter was led by increases in gain on sale of mortgages and other income from sale of assets, while most other line items remain consistent |
| We anticipate that growth in capital will outpace the growth in total assets during the next 12 months providing additional strength |
| Our loan and deposit pricing management maintains a strong spread as displayed on Slide 16 |
| We are very compelling value stock support of our commitment to our dividend with a 5.9 times PE ratio and a 6% dividend yield |
| With zero charge-offs for the quarter, this portfolio continues to reflect high quality borrowers with significant payment capacity and equity in their homes |
| Horizon has a track record of 30 plus years of uninterrupted quarterly cash dividends to our shareholders |
| Non-interest expenses improved modestly even with an elevated FDIC insurance expense that was offset by lower quarter-over-quarter expenses in several other categories |
| Statement |
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| In Q3, we experienced elevated deposit pressure on commercial and public liquid funds, putting pressure on the net interest margin and net interest income in the near-term |
| The effective tax rate continues to go down as earnings -- pre-tax earnings have come down from the last year |
| Our operating metrics, ROAA and ROAE are expected to be slightly lower in the next quarter |
| Past dues continued to be low at 30 basis points of total loans for the quarter |
| Public funds balances were also stable and experienced some heightened pricing pressures for excess liquid funds this quarter |
| This is coupled with our annualized net charge-offs of only 2 basis points and historically low non-performing loans |
| Our credit quality metrics all remain very low, as you can see |
| Where do you feel is a comfortable level to settle at? It's down to 1.14% as of this quarter |
| So I would say we see a slight decline, but nothing of major concern, probably just the seasonality that you saw from the first quarter of last year |
| Non-performing commercial loans decreased 16% in the quarter and year-to-date net charge-offs were 1 basis point on an annualized basis |
| And then mortgage has been that one there has been a slight up and that's really because our prepayments are slowing down on that |
| Salary and benefits in the third quarter were slightly lower based on stable headcount and modest reductions in commissions and other variable compensation |
| Moving to the investment portfolio on Slide 17, it totaled $2.8 billion at the end of the quarter, down $26 million from June 30 |
| And then second question, as it relates to noninterest-bearing deposits, the contraction there seems to have stabilized a little bit for you guys |
| I would anticipate on a go forward, the decline in that portfolio will be relatively neared for the next several quarters |
| And as Mark talked about earlier, we believe that our margin is probably at the bottom of the trough now as we move into 2024 |
| Finally, our allowance for credit losses was maintained at $49.9 million representing 1.14% of total gross loans, which we believe is appropriate given the low level of past dues and non-performing and charge-offs and current economic forecasts |
| We're seeing a natural runoff this quarter of indirect, which is reflective of our pricing |
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