Horizon Bancorp Q4 2023 Earnings Call Transcript

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January 25, 2024

There are 8 speakers on the call.

Operator

Good morning, everyone, and welcome to the Horizon Bancorp Inc. Conference Call to discuss Financial Results for the Q4 and Full Year 2023. All participants will be in listen only mode. Please note this event is being recorded. Before turning the call over to management, Please remember that today's call may contain statements that are forward looking in nature.

Operator

These statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those discussed, including those factors noted in the slide presentation. Additional information about factors that could cause actual results to differ materially is contained in Horizon's most recent Form 10 ks and its later filings with the Securities and Exchange Commission. In addition, management may refer to certain non GAAP financial measures that are intended to help investors understand Horizon's business. Reconciliations for these measures are contained in the presentation. The company assumes no obligation to update any forward looking statements made during the call.

Operator

For anyone who does not already have a copy of the press release and supplemental presentation issued by Horizon yesterday, They can be accessed at the company's website horizonbank.com. Representing Horizon today are Executive Vice President and Chief Commercial Banking Officer, Lynn Herbert Executive Vice President and Senior Operations Officer, Kathy DeRuyter Executive Vice President, Corporate Secretary and General Counsel, Todd Etzler Executive Vice President and Chief Financial Officer, Mark Secor and Chief Executive Officer and President, Thomas Prane. At this time, I would like to turn the call over to Mr. Thomas Prane. Please go ahead, sir.

Speaker 1

Good morning and thank you for participating in Horizon's earnings call. We are pleased to share our Q4 and full year 2023 results. The 4th quarter experienced many positive trends highlighted by strong lending results that were led by our commercial banking team, which posted a 13% annualized growth rate Q4. Horizon also continues to see excellent credit metrics with low non performing loans and charge offs with provision expense for the quarter primarily reflective of our positive loan growth and modest charge offs. In Q4, we were pleased to see net interest income expand as a result of our disciplined pricing strategy and the resiliency of our core deposit base.

Speaker 1

Late in the quarter, we also executed on a balance sheet restructuring, which position the company exceptionally well heading into 2024 to further enhance our financial performance with significant excess cash that can be deployed into higher yielding assets and a meaningful reduction in lower yielding securities and Liquidity Ready to Fund a Robust Loan Pipeline. Within our comments today, we will update the 4th quarter and full year results, The positive momentum in our core revenue platforms going into 2024, financial details from the balance sheet restructuring and progress in our new leasing division. Additionally, we'll provide insight to our continued disciplined operating model as well as our well positioned capital and liquidity levels that will continue to build throughout 2024. To offer more detail into our Q4 results, let me introduce Lynn Kerber, our Executive Vice President and Chief Commercial Banking Officer to shed light on our lending and credit performance. Lynn?

Speaker 2

Thank you, Thomas. Beginning on Slide 5, we are pleased to report commercial loans increased $85,700,000 for the Q4 or 13.1 percent on an annualized basis. Net fundings were $117,000,000 for the quarter versus $96,800,000 for the 3rd quarter. Our average commercial loan portfolio yield increased from 5.80% The 3rd quarter to 6.05 percent for the 4th quarter and new production yields increased from 7.50 percent The 7.87 percent in the 4th quarter. New loan originations continue to be very diverse across our markets and industries.

Speaker 2

In the Q4, 25% of our new fundings were C and I and 11% owner commercial real estate with the balance of 64% being diversified across the various commercial real estate categories. As our equipment finance division ramps up in 2024, we expect C and I production to expand measurably as a proportion of both new originations and a total commercial portfolio. We have hired several key managers for the equipment financing division and expect balance sheet growth in Q1 with continued expansion throughout the second quarter. The overall commercial pipeline increased from $145,000,000 at September 30 to 100 and $67,000,000 as of December 31. Activity continues to be well diversified by industry and geography and this pipeline excludes the new equipment finance business, which we expect to contribute over $100,000,000 in 2024.

Speaker 2

Commercial credit quality remains strong with year to date net charge offs of 2 basis points on an annualized basis. On Slide 6, we have an overview of the loan portfolio as of December 31, 2023 with a mix of 61 percent commercial, 15% residential and 23% consumer. Year over year commercial loans increased $208,000,000 and our residential mortgage increased 4% and consumer loans increased 5%, which is a net effect of an increase in home equity loans and decrease in indirect loans. Also provided for reference is a breakdown of key sectors in our commercial portfolio, which demonstrates no significant concentration in any one sector, including office, which represents just 3.5% of our total portfolio and less than 6% of commercial loans. We believe our portfolio breakdown is well balanced and represents nature of Horizon's risk profile.

Speaker 2

Turning to Slide 7, you will see the consumer direct loan balances increased $27,000,000 during the quarter, driven principally by the addition of transactional home equity lines of credit. Indirect auto loans decreased by $38,000,000 in the quarter, which is consistent with our stated strategy of reducing exposure in this lower performing loan category and redeploying capital to higher yielding product types. The average consumer direct yield increased from 8.05% to 8.26% for the portfolio with an average of 8.95 percent for new production. The average yield for Consumer Indirect was 3.27%, which is consistent with recent quarters. Credit remains positive and in line with expectations with year to date net recoveries, consumer direct at 1 basis point and consumer indirect charge offs at 36 basis points.

Speaker 2

Slide 8 highlights our mortgage loan performance for our quarter. Our portfolio was stable and consistent with our expectations for 2023 aligning with industry trends. Mortgages increased $5,700,000 in the 4th quarter, representing a 3.4% increase on an annualized basis. The average mortgage loan yield was 4.32% for the portfolio and 7.50 percent for new production. With 0 charge offs for the quarter, this portfolio continues to reflect high quality borrowers with significant payment capacity and equity in our homes.

Speaker 2

Our asset quality metrics continue to be strong as outlined on Slide 9. Past dues over 30 days were 0.38%, A slight increase, which was spread across all portfolios. Non performing loans increased slightly from 19,400,000 to $19,600,000 However, they decreased 1 basis point as a percent of total loans. The increases were primarily in retail loans, offset by reduction in commercial non performing loans. Net charge offs for the 4th quarter were $785,000 representing 2 basis points of average loans.

Speaker 2

The provision of $1,100,000 was primarily due to loan growth with replenishment of the reserve for charge off loans in the 4th quarter. The allowance represents 1 0.13% of total gross loans, which we believe is appropriate given credit performance and current economic forecast. Future reserve amount and related provision will be driven by loan growth and mix, economic forecasts and credit trends. Credit quality across all of our lending classes is performing well and reflects our history of consistent and well balanced approach to lending. Now, I'd like to turn things back to Thomas, who will provide an overview of how our earnings asset mix and deposit franchise and flexible funding profile are contributing to Horizon's performance.

Speaker 1

Thank you, Lynn, and truly appreciate the insight and detail. On Slide 10, you can see the positive impact of the team's stewardship towards loan pricing and the strategic efforts to shift to higher yielding assets. We feel confident in continuing this momentum in 2024 as we begin to redeploy our abundant cash position. Horizon is achieving meaningful increases in loan yields with an intentional focus on loan pricing discipline, while we continue to maintain our historical conservative credit culture. Our securities portfolio is now strategically smaller and exhibits a slightly increased yield from Q3 and our cash position has increased significantly late in the quarter and the impact on our margin was minimal.

Speaker 1

We will realize the full effect of this balance sheet repositioning in Q1 as we are well positioned to fund the growth of higher yielding assets throughout 2024. As I stated in my opening remarks, we are also very pleased with our 4th quarter deposit performance. With Slide 11 providing detail on the resiliency of the portfolio and our upbeat view about its strength. Our core to consumer and commercial relationships were slightly up in Q4 with minimal changes in total balances. The combined portfolio balances experienced a positive growth of 1.14% for the quarter with non interest bearing deposits relatively flat from the Q3.

Speaker 1

Public funds balances were strategically down in the quarter, aligned with the objective to reduce exposure to these higher cost funding sources. The leadership team will continue to be well balanced in its approach to this segment, focusing on full client relationships and expansion of treasury management services. The quarter closed out with brokered CDs and other fixed borrowings unchanged with ample capacity if needed. As mentioned previously, we ended the quarter with approximately $416,000,000 in excess cash. Beyond the ability to reinvest in the higher yielding assets, this excess liquidity provides great flexibility in our funding strategies, limits our dependency on higher cost funding sources and provides flexibility to our go forward deposit pricing.

Speaker 1

The consistency and discipline of our pricing strategy of loans and deposits has yield very positive results this quarter and the added flexibility of excess cash further advances Horizon's revenue growth options. On Slide 12, you'll see that Horizon's margin improved from the 3rd quarter. Horizon yield and interest bearing assets increased 23 basis points during the quarter compared to the liability costs increasing 19 basis points and purchase accounting down 2 basis points. We believe these results as an indication that we've hit the floor on margin compression based on current expectations for short term rates. The contribution of the balance sheet restructure was minimum during the quarter due to the timing of settlement throughout December as the lower yield investments were liquidated and moved into cash later in the quarter.

Speaker 1

As previously mentioned, we anticipate a portion of the cash from the restructure will be redeployed into higher yielding assets throughout 2024, including funding the growth of our leasing platform. Let me hand the presentation over to Executive Vice President and Chief Financial Officer, Mark Secor, who will walk through some other key financial metrics and our outlook for the beginning of 2024. Mark?

Speaker 3

Thank you, Thomas.

Speaker 4

Beginning with Slide 14, excluding the $31,600,000 loss on the sale of securities in the quarter, Non interest income was down slightly from the linked quarter, primarily due to lower gain on sale of mortgages and lower BOLI income from the balance sheet restructure. The company continues to diversify core fee income through key talent adds in treasury management and expanded private wealth capabilities to elevate non interest income performance and expand our relationship banking model. Slide 15, Non interest expenses were 1.98 percent of average assets annualized for the 4th quarter compared to 1.81% in the linked quarter. The increase reflected $705,000 of extraordinary expenses from previously announced personnel changes, the start up of Horizon's Equipment Finance and the talent adds in our treasury management division. We also had additional employee benefit costs due to an adjustment to variable deferred compensation costs as we ended the year.

Speaker 4

Excluding extraordinary items, annualized non interest expense would have represented 1.94 percent of average assets in the quarter or 1.85 percent for all of 2023. On FDIC insurance expense, Horizon was not subject to the special assessment that recently impacted some other banks, given our relatively low level of uninsured deposits. Our regular FDIC assessment was $1,200,000 in the 4th quarter, and we currently believe that it is a good baseline run rate for the full year of 2024. Overall, the full year of 2024, we expect non interest to be slightly higher than last year. This is primarily due to annual merit increases, the addition of the equipment finance business and 2024 Investments in Digital Banking and Technology that is designed to improve our customer acquisition capabilities and drive additional revenue.

Speaker 4

We will provide guidance on the Q1 expenses in the upcoming slides. Moving to the investment portfolio on Slide 16. After the sale of $383,000,000 of AFS securities in the 4th quarter, we wanted to provide details on the remaining portfolio. The portfolio totaled $2,500,000,000 at the end of the quarter, down $339,000,000 from September 30, netting out the cash flows, sales and the decrease in unrealized losses during the quarter. The portfolio had a book yield of 2.25% and an effective duration of approximately 7 years at the end of the quarter.

Speaker 4

As longer term investments were originally identified as held to maturity, The duration for that portfolio is approximately 1 year longer than the available for sale portfolio. Expected cash flows from investments are estimated to $34,000,000 for the Q1 of 2024 and a total of $105,000,000 over the next 12 months. We will continue to actively manage our portfolio for opportunities to create shareholder value in the future. Slide 17. Horizon continues to maintain solid regulatory capital ratios after the balance sheet restructure.

Speaker 4

Capital ratios are well above the requirements We anticipate that growth in capital will outpace the growth in total assets during the next 12 months, providing strength and flexibility to pursue strategic growth options. As we deploy the liquidity from the balance sheet restructure, we do anticipate risk weighted assets to increase and there will be a slight decline to risk weighted capital ratios. Looking ahead on Slide 18, we provide you with an update on our current expectations for 2024. We expect sustainable loan growth in both our commercial and direct consumer portfolios, which should be valuable contributors to core earnings. For the Q1 of 2024, we expect 4% to 5% total loan growth annualized.

Speaker 4

We expect a net interest margin of greater than 2.5% for the Q1 as well as pre provision net interest income of greater than 43,800,000 As stated, we believe Horizon's net interest margin has reached its floor in the Q3 of 2023, assuming the Fed Funds target is at its terminal rate. Non interest income should continue near recent levels with the anticipation of consistent fee income from our investments in treasury management and private wealth, coupled with seasonal softening in mortgage originations and lower BOLI income. The expected range is $10,000,000 to $10,500,000 in non interest income in the Q1. Non interest expenses continue to be proactively managed across the organization, specifically in segments of our business impacted by rising rates, such as mortgage and consumer lending. As discussed, we have invested in revenue generating talent in our lease build out and our treasury management teams, which are expected to contribute to revenue growth in 2024.

Speaker 4

As a result, we expect non interest expense to range of about $37,000,000 to $38,000,000 in the Q1. We also expect non interest expense to continue to remain below 2% of average assets. Now I will turn it back over to Thomas for some final comments.

Speaker 1

Thank you, Mark. Appreciate the insight. So why invest in Horizon? Our investment thesis is simple. As seen on Slide 19, we are located in attractive Midwest Growth Markets.

Speaker 1

These markets have desirable economic environments, significant infrastructure investment and flourishing ecosystems for both businesses and for our communities. Horizon has made significant progress executing on its strategy of shifting its balance sheet to higher yielding assets in 2023. We are entering 2024 with an expanding margin and abundant cash position to further reinvest in higher yielding assets, fund the growth of our new equipment leasing platform and to continue the flexibility in our revenue strategies. The franchise has resilient and loyal deposit base that is actively managed by leadership to create shareholder value. Additionally, Horizon has excess liquidity of $2,900,000,000 providing nimbleness to our operating model as needed.

Speaker 1

Horizon has a disciplined operating culture that consistently displays a low ratio of operating expenses to average assets. We expect this to remain less than 2% even with the strategic investments in new revenue teams. Additionally, Horizon has a proven conservative credit profile displayed through its practical credit underwriting and proactive portfolio management. These efforts have consistently delivered low non performing loans and annual charge offs. And lastly, Even with the recent positive trends in our stock performance, we believe Horizon is still a compelling value, supported by our commitment to our dividend, With shares recently trading less than 9 times 2023 adjusted EPS and offering a 4.8% dividend yield, Horizon has a track record of 30 plus years of uninterrupted quarterly cash dividends to our shareholders.

Speaker 1

As always, We thank you for joining our presentation this morning. This concludes our prepared remarks. And I will now ask our operator to please open up the lines for questions.

Operator

At this time, we will pause momentarily to assemble our roster. The first question comes from Terry McEvoy with Stephens. Please go ahead.

Speaker 1

Questions.

Speaker 5

Maybe a couple of modeling questions. Mark, could you just talk about the size of the balance sheet in 2024? Whether you think the loan growth will be kind of offset by declining cash balances?

Speaker 1

Thanks, Terry. This is Thomas. Appreciate the question. As we look at our asset growth strategy, you're Pretty much spot on. We would see that we use a portion of our cash balances and then reinvest them into our loan growth, but still keeping liquidity in and our cash position for any type of fluctuations in other parts of the balance sheet.

Speaker 5

Thanks. And I think Lynn pointed out about $100,000,000 of new leasing new leases in 2024. Leases, I'm guessing, carry higher yields. There's a fee component, as well as maybe longer term higher charge offs. So can you just help us kind of understand The growth dynamics, the profitability and maybe some long term charge offs that you'd expect out of that portfolio.

Speaker 2

Sure. Thanks for your question. Good morning. Relative to the lease portfolio, we are focusing on small ticket and lower end middle market ticket. And as you have probably seen with our press releases, we hired a very strong experienced leader.

Speaker 2

As relative to originations in that portfolio, we're looking at approximately $100,000,000 for the year. You're correct, the yield would be a little bit higher than our normal commercial portfolio with the anticipated spread that's higher than commercial C and I typically. As far as losses go, we are still modeling some of that based on the credit quality that we're targeting. So I will probably need to potentially get back to you on that Terry, but I would expect that it would be a little bit higher And our core commercial experience has been over recent years.

Speaker 3

Thank you. Let's answer. Terry, maybe just

Speaker 1

a little bit more color on that. I think if you look at the balance sheet and look at the momentum there in different parts Adding the leasing assets at a higher yield, I completely agree with Lynn that we'll probably see somewhere around $100,000,000 or so this year. We're also anticipating our continued trend in indirect auto, which is a much lower yielding asset with higher credit losses. So As you look at the net net, I would say from the credit exposure, it's probably going to par out with the 2, if not, we might get a slight pickup. So I wouldn't see that the leasing part in changing significantly the overall credit profile of the organization because the indirect auto will continue to decline.

Speaker 5

Right. Thank you, Thomas, and thank you, Lynn.

Operator

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

Speaker 6

Yes. Hi, everyone. Good morning. Thanks for taking the questions.

Speaker 1

Good morning.

Speaker 6

I was curious just in terms of thinking about the size of the position Debt going forward, looks like borrowings were kind of flat quarter over quarter. So just curious how you guys are maybe thinking about using some of that dry powder post repositioning in 4Q to maybe pay down some wholesale sources over the next quarter or 2.

Speaker 4

Thanks, Nate. Good morning. This is Mark. We've for the immediate future, the next period, we don't Plan on seeing any reduction in the borrowings. It is a desire to reduce the borrowings down the road.

Speaker 4

We'd like to see that with deposit growth. But the cash that we have currently is planned to go into the lending and to be able to keep for liquidity. So we don't See any additional borrowings either as we see loans grow.

Speaker 6

Got it. I appreciate the margin guidance for the 1Q. And just kind of think about the cadence of the margin over the course of the Best of this year. In terms of just the impact from Fed cuts and kind of maintaining that liability since the balance sheet with the Borrowing is expected to remain kind of flat and using that dry powder to support loan growth. So just trying to think about kind of the liability sensitivity of the balance sheet and how the Margin should react to some Fed rate cuts expected at some point this year.

Speaker 4

Yes, we would expect it to be positive on the deposit side. Competition will drive a little bit of how quickly we can lower rates when it comes to some of the funding, But we would anticipate trying to bring down those funding costs if there are rate cuts.

Speaker 6

Okay, great.

Speaker 1

And then just This is Thomas. On your question there around the liability sense, Mark, spot on. And also from our model, we're anticipating rate cuts in the second half of the year. We're not anticipating I think we have a conservative profile there with 2 cuts later in the second half of the year. So, please agree with Mark, we're still on a liability sensitive position And that we would have a probably a nice pickup if something happened a little bit earlier.

Speaker 6

Okay. So putting those pieces together, it sounds like the margin can continue to trend higher At least in the 2nd quarter, if there aren't any rate cuts in 2Q And then maybe greater expansion in 3Q and 4Q if we do have those cuts in Fed rates?

Speaker 4

That would be our expectation.

Speaker 6

Okay, great. And then just one lastly from me on expenses. I appreciate the guidance for 1Q. And just given some of the growth initiatives that you guys have laid out on the equipment leasing side of things and elsewhere. Curious how we Maybe think about the cadence of expense growth in 2Q, 3Q and 4Q and just kind of any guidepost you can provide in terms of overall year over year expense growth in 2024?

Speaker 4

Yes, we gave the guidance for the Q1, so we don't get too far ahead. But That would be on the higher end of that range as we get into the second half and as we continue to build out. But we also anticipate revenue generation as those teams continue to grow and start to get active that will start to offset the expense as we get into the later part of the year.

Speaker 6

Okay, great. And then I'm sorry, if I could just squeeze one last one on the tax rate going forward. Obviously, some noise this quarter, but I think historically it's been in the 7% to 9% range. Is that still a good target to use going forward?

Speaker 4

Yes, I think you can go back to the norms that we saw this year.

Operator

The next question comes from Damon DelMonte with KBW. Please go ahead.

Speaker 7

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

Speaker 4

Good morning, Dan.

Speaker 7

Good morning. Just wanted to check on The outlook here for provision, as you onboard these new equipment leasing or financing loans, do You feel like you're going to need to kind of add to the provision since there tend to be shorter duration, higher levels of charge offs? And I guess kind of When you look at your reserve, I think it ended at like 1.13% last quarter. Do you think that's an adequate level or do you kind of plan for some build here?

Speaker 2

Yes, thanks for that question. So as far as the reserve, we do think that's appropriate for our current state as far as our credit quality and economic forecast as we sit here today. Moving forward into 2024, the provision is going to be really driven by 2 main factors. First is credit quality trends. So we're always going to cover or look at covering our charge offs and replenishing those And then loan growth.

Speaker 2

And so it's going to really come down to the mix in the new originations, how much commercial, residential and adding the leasing. The leasing, as I said, we're working on our credit policy right now and Credit Metrics. We have done some modeling around that. As you would expect, it's going to be a little bit different risk profile. But the originations this year Compared to our overall portfolio are still going to be a fairly small portion.

Speaker 4

Got it. Okay. That's helpful. Thanks. And then, I don't know if this

Speaker 7

is for Thomas or for Lynn here, but as far

Speaker 4

as like the commercial growth that we saw this past quarter, can you just talk

Speaker 7

a little bit about Some of the key drivers of that solid growth and kind of how the pipelines are shaping up as we head into 2024, please?

Speaker 2

Sure. As mentioned in my comments, our pipeline is currently positioned at 167,000,000 as we came into the quarter. That's new originations, it's not always new fundings. For Q4, We really had a very strong quarter. I would say we had several things contributing to that.

Speaker 2

That we have been working with some projects on and those came together in the Q4. We also had some contribution from some of our construction loans that we're funding up in late December. And so we've kept a pretty even cadence on originations. And so we expect that to continue at this point in time.

Speaker 1

Thank you.

Operator

The next question comes from Brian Martin with Janney Montgomery Scott. Please go ahead.

Speaker 1

Hey, good morning guys. Good morning, Brian. Good morning, Brian.

Speaker 3

Wondering, can you comment at all about this? I know it's just the expenses, but the any other changes you might be making as far as additional hires, As far as the equipment finance team or just other considering some of the changes that were made in the Q4, just maybe just talk a little bit about what On the expense side, any other initiatives you have going on as you look into 2024?

Speaker 1

Great. Thank you for the question. I'll let Lynn give detail on the equipment finance. I'd We made significant progress in both the treasury management and equipment finance. I'll let Lynn give detail there.

Speaker 1

More around the leadership team was put in place. We had a couple of strategic hires also in treasury management. We've made nice progress in the Q4, which would be in our run rate. And I'll give Lynn a little bit look forward to talk

Speaker 2

As far as leasing, we are really focusing on our key leadership roles right now. We've hired 3 key individuals and have a couple other key management roles that we'll be adding in over the next month. Then we're going to really just start focusing on standing up the tent and getting the operation going as far as new originations and syndication type activity. Don't see a lot of sales and servicing type adds until probably late Q2 and then ramping up Q3, Q4. So as far as dollar amounts, I don't know that I can give you that specificity this morning, but it's going to ramp up and I think you'll see it be aligned With new originations and that cadence will kind of match and align with some of our expense outlays later in the year.

Speaker 6

Got you.

Speaker 3

Okay. Thank you for that. And then just two last ones. Just in terms of the mortgage contribution this year, I guess, this year it sounds like Consistent with the industry outlook, I guess your expectations for mortgage would just I guess is it I guess mortgage would be improving in 2024 is that number 1 that was number 1. And number 2 is just on the credit front, given how strong the performance has been.

Speaker 3

Any areas you point to as far as that you're a little bit more concerned with today or watching more closely within the portfolio?

Speaker 1

It's Thomas, thank you for the question. As far as the mortgage piece, we're anticipating a line with the what the MBA forecast is, which would be a little bit softer Q1, 1, some recovery coming back in Q2 and then probably more aligned with 2023 production as we get into the second half of the year. The mortgage piece for us, we have not seen anything material in credit quality there. Again, most of our assets So, with servicing retained, the assets that we do put on our balance sheet are exceptional quality, as you can see from the slide around FICO's and debt to income ratios. And I'd say we're pretty we're relatively conservative in our strategy there.

Speaker 1

We do feel though with our excess liquidity that is going to give us an opportunity to portfolio some higher quality clients as we go forward because the rates that are accepted in the market right now and where we Excess liquidity is going to give us some flexibility there. So we do think there's an opportunity there, but that would not be fee income driven, that would be more of a balance sheet growth for us.

Operator

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

Speaker 1

Thank you. And again, thank you for participating in today's earnings call. As stated, we are very optimistic about 2024. The momentum in our lending platforms and our excess liquidity at year end positions the franchise well to continue to fuel the strategy of growing high year yielding assets and increasing top line revenue. Our core community banking platforms are gaining momentum and we expect to see additional lift as our equipment financing team comes to life in subsequent quarters.

Speaker 1

We believe the balance sheet is extremely well positioned for potential lowering rates later in 2024 and resiliency of our Horizon's deposit portfolio continues to deliver promising results even in an extended elevated rate environment. These positive tailwinds add to the value created by Horizon's disciplined operating model and our conservative credit culture. Lastly, as we close out the call today, I wanted to thank our industry partners and peers who reached out to provide support and well wishes regarding the passing of our independent Director, Spiro Balavenas. Spiro was a member of the company's Board of Directors since 2000 and the bank's Board since 1998. The organization significantly benefited from Spiro's experience and reputation as a successful entrepreneur and community leader.

Speaker 1

But he will be most remembered as a dedicated father, a grandfather and a friend who had all the pleasure of meeting him. On behalf of all of us at Horizon, want to express our condolences to Spiro's family and thank them for sharing Spiro with the Horizon family for over 2 decades. Thank you again for your attendance today and we look forward to our next update in April.

Operator

This concludes the conference call today. Thank you for attending today's presentation. You may now disconnect.

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Earnings Conference Call
Horizon Bancorp Q4 2023
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