DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2019. Hilltop produced income to common stockholders of $57.8 million, or $0.62 per diluted share, for the second quarter of 2019, compared to $33.1 million, or $0.35 per diluted share, for the second quarter of 2018.
Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.08 per common share payable on August 30, 2019, to all common stockholders of record as of the close of business on August 15, 2019. Additionally, pursuant to the stock repurchase program authorized by the Hilltop Board of Directors in January 2019, Hilltop paid $25.0 million to repurchase 1,214,843 shares at an average price of $20.54 during the second quarter of 2019. These shares were returned to the pool of authorized but unissued shares of common stock. Aggregate repurchases of $25.0 million remain available under this program, which expires in January 2020. Share repurchase amounts include the repurchase of common shares to offset issuances under the employee compensation plan.
Jeremy Ford, CEO of Hilltop, said, “Our second quarter results demonstrate the strength and diversification of our franchise, as pre-tax contribution grew in our three largest businesses. At Hilltop Securities, our investments in Structured Finance and Capital Markets, combined with a supportive market environment, generated significant revenue and income growth. Total average loans held for investment grew by 11% from the second quarter of 2018 and credit quality remains sound. PrimeLending’s pre-tax contribution increased by 62% from the prior year, driven by our focus on profitable volume and cost management. While we are very pleased with the results from the first half of 2019, our team remains committed to generating long-term stockholder value by delivering prudent growth and executing on our platform efficiency initiatives.”
Second Quarter 2019 Highlights for Hilltop:
- Hilltop’s annualized return on average assets and return on average equity for the second quarter of 2019 were 1.74% and 11.63%, respectively, compared to 1.03% and 6.95%, respectively, for the second quarter of 2018;
- Hilltop’s book value per common share increased to $21.85 at June 30, 2019, compared to $21.23 at March 31, 2019;
- Hilltop’s total assets were $14.3 billion at June 30, 2019, compared to $13.5 billion at March 31, 2019;
- Loans1, net of allowance for loan losses, increased to $6.6 billion compared to $6.5 billion at March 31, 2019;
- Non-performing loans were $32.0 million, or 0.36% of total loans at June 30, 2019, compared to $30.9 million, or 0.38% of total loans, at March 31, 2019;
- Loans held for sale increased by 51.9% from March 31, 2019 to $1.6 billion at June 30, 2019;
- Total deposits were $8.5 billion at June 30, 2019, compared to $8.3 billion at March 31, 2019;
- Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio2 of 13.00% and a Common Equity Tier 1 Capital Ratio of 16.32% at June 30, 2019;
- Hilltop’s net interest margin3 decreased to 3.49% for the second quarter of 2019, compared to 3.69% in the first quarter of 2019;
- The provision (recovery) for loan losses was ($0.7) million during the second quarter of 2019, compared to $1.0 million in the first quarter of 2019;
- For the second quarter of 2019, noninterest income was $312.9 million, compared to $279.4 million in the second quarter of 2018, a 12.0% increase;
- For the second quarter of 2019, noninterest expense was $343.7 million, compared to $338.5 million in the second quarter of 2018, a 1.5% increase; and
- Hilltop’s effective tax rate decreased to 23.1% during the second quarter of 2019, compared to 24.3% during the same period in 2018.
1 |
“Loans” reflect loans held for investment excluding broker-dealer loans, net of allowance for loan losses, of $570.3 million and $491.8 million at June 30, 2019 and March 31, 2019, respectively. |
2 |
Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets. |
3 |
Net interest margin is defined as net interest income divided by average interest-earning assets. |
Consolidated Financial and Other Information
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Consolidated Balance Sheets |
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June 30, |
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March 31, |
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December 31, |
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September 30, |
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June 30, |
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(in 000's) |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
||||||||||
Cash and due from banks |
|
$ |
342,001 |
|
|
$ |
313,192 |
|
|
$ |
644,073 |
|
|
$ |
405,682 |
|
|
$ |
353,432 |
|
Federal funds sold |
|
|
521 |
|
|
|
438 |
|
|
|
400 |
|
|
|
468 |
|
|
|
403 |
|
Assets segregated for regulatory purposes |
|
|
151,271 |
|
|
|
156,851 |
|
|
|
133,993 |
|
|
|
220,115 |
|
|
|
128,417 |
|
Securities purchased under agreements to resell |
|
|
50,660 |
|
|
|
65,205 |
|
|
|
61,611 |
|
|
|
164,656 |
|
|
|
229,172 |
|
Securities: |
|
|
|
|
|
|
|
|
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|||||
Trading, at fair value |
|
|
601,524 |
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|
|
703,295 |
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|
|
745,466 |
|
|
|
660,314 |
|
|
|
634,197 |
|
Available for sale, at fair value |
|
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1,009,924 |
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1,019,851 |
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|
875,658 |
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|
874,496 |
|
|
|
811,218 |
|
Held to maturity, at amortized cost |
|
|
365,905 |
|
|
|
369,865 |
|
|
|
351,012 |
|
|
|
348,163 |
|
|
|
353,192 |
|
Equity, at fair value |
|
|
19,592 |
|
|
|
19,343 |
|
|
|
19,679 |
|
|
|
21,555 |
|
|
|
21,218 |
|
|
|
|
1,996,945 |
|
|
|
2,112,354 |
|
|
|
1,991,815 |
|
|
|
1,904,528 |
|
|
|
1,819,825 |
|
Loans held for sale |
|
|
1,609,477 |
|
|
|
1,059,280 |
|
|
|
1,393,246 |
|
|
|
1,524,980 |
|
|
|
1,953,562 |
|
Loans held for investment, net of unearned income |
|
|
7,202,604 |
|
|
|
7,011,679 |
|
|
|
6,930,458 |
|
|
|
6,940,306 |
|
|
|
6,545,630 |
|
Allowance for loan losses |
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|
(55,177 |
) |
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|
(58,809 |
) |
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(59,486 |
) |
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(60,152 |
) |
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(61,970 |
) |
Loans held for investment, net |
|
|
7,147,427 |
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|
|
6,952,870 |
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|
|
6,870,972 |
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6,880,154 |
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|
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6,483,660 |
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Broker-dealer and clearing organization receivables |
|
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1,707,249 |
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|
|
1,651,199 |
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|
|
1,440,287 |
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|
|
1,491,507 |
|
|
|
1,614,951 |
|
Premises and equipment, net |
|
|
208,975 |
|
|
|
210,333 |
|
|
|
237,373 |
|
|
|
236,172 |
|
|
|
172,911 |
|
Operating lease right-of-use assets |
|
|
123,832 |
|
|
|
108,806 |
|
|
|
— |
|
|
|
— |
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|
|
— |
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Other assets |
|
|
602,143 |
|
|
|
591,442 |
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|
|
580,362 |
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|
|
604,445 |
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|
|
648,317 |
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Goodwill |
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|
291,435 |
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|
291,435 |
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|
291,435 |
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|
|
291,435 |
|
|
|
251,808 |
|
Other intangible assets, net |
|
|
33,934 |
|
|
|
35,965 |
|
|
|
38,005 |
|
|
|
40,394 |
|
|
|
32,716 |
|
Total assets |
|
$ |
14,265,870 |
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|
$ |
13,549,370 |
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|
$ |
13,683,572 |
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$ |
13,764,536 |
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$ |
13,689,174 |
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Deposits: |
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Non interest-bearing |
|
$ |
2,598,253 |
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|
$ |
2,490,144 |
|
|
$ |
2,560,750 |
|
|
$ |
2,525,677 |
|
|
$ |
2,468,332 |
|
Interest-bearing |
|
|
5,864,826 |
|
|
|
5,807,975 |
|
|
|
5,975,406 |
|
|
|
5,764,556 |
|
|
|
5,345,290 |
|
Total deposits |
|
|
8,463,079 |
|
|
|
8,298,119 |
|
|
|
8,536,156 |
|
|
|
8,290,233 |
|
|
|
7,813,622 |
|
Broker-dealer and clearing organization payables |
|
|
1,531,891 |
|
|
|
1,490,227 |
|
|
|
1,294,925 |
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|
|
1,396,401 |
|
|
|
1,409,904 |
|
Short-term borrowings |
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|
1,338,893 |
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|
914,525 |
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|
|
1,065,807 |
|
|
|
1,216,649 |
|
|
|
1,610,735 |
|
Securities sold, not yet purchased, at fair value |
|
|
45,447 |
|
|
|
69,354 |
|
|
|
81,667 |
|
|
|
179,582 |
|
|
|
251,581 |
|
Notes payable |
|
|
231,923 |
|
|
|
225,372 |
|
|
|
228,872 |
|
|
|
220,192 |
|
|
|
227,736 |
|
Operating lease liabilities |
|
|
132,750 |
|
|
|
118,452 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Junior subordinated debentures |
|
|
67,012 |
|
|
|
67,012 |
|
|
|
67,012 |
|
|
|
67,012 |
|
|
|
67,012 |
|
Other liabilities |
|
|
403,070 |
|
|
|
351,178 |
|
|
|
435,240 |
|
|
|
430,309 |
|
|
|
392,171 |
|
Total liabilities |
|
|
12,214,065 |
|
|
|
11,534,239 |
|
|
|
11,709,679 |
|
|
|
11,800,378 |
|
|
|
11,772,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Common stock |
|
|
928 |
|
|
|
938 |
|
|
|
936 |
|
|
|
946 |
|
|
|
946 |
|
Additional paid-in capital |
|
|
1,473,599 |
|
|
|
1,491,585 |
|
|
|
1,489,816 |
|
|
|
1,504,467 |
|
|
|
1,502,105 |
|
Accumulated other comprehensive income (loss) |
|
|
7,862 |
|
|
|
(1,062 |
) |
|
|
(8,627 |
) |
|
|
(14,722 |
) |
|
|
(11,846 |
) |
Retained earnings |
|
|
544,275 |
|
|
|
499,452 |
|
|
|
466,737 |
|
|
|
448,923 |
|
|
|
419,683 |
|
Deferred compensation employee stock trust, net |
|
|
788 |
|
|
|
827 |
|
|
|
825 |
|
|
|
860 |
|
|
|
857 |
|
Employee stock trust |
|
|
(171 |
) |
|
|
(213 |
) |
|
|
(217 |
) |
|
|
(252 |
) |
|
|
(252 |
) |
Total Hilltop stockholders' equity |
|
|
2,027,281 |
|
|
|
1,991,527 |
|
|
|
1,949,470 |
|
|
|
1,940,222 |
|
|
|
1,911,493 |
|
Noncontrolling interests |
|
|
24,524 |
|
|
|
23,604 |
|
|
|
24,423 |
|
|
|
23,936 |
|
|
|
4,920 |
|
Total stockholders' equity |
|
|
2,051,805 |
|
|
|
2,015,131 |
|
|
|
1,973,893 |
|
|
|
1,964,158 |
|
|
|
1,916,413 |
|
Total liabilities & stockholders' equity |
|
$ |
14,265,870 |
|
|
$ |
13,549,370 |
|
|
$ |
13,683,572 |
|
|
$ |
13,764,536 |
|
|
$ |
13,689,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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||
|
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Three Months Ended |
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Consolidated Income Statements |
|
June 30, |
|
March 31, |
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December 31, |
|
September 30, |
|
June 30, |
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|||||||
(in 000's, except per share data) |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
|||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Loans, including fees |
|
$ |
114,325 |
|
|
$ |
110,870 |
|
$ |
119,322 |
|
$ |
113,535 |
|
|
$ |
103,924 |
|
Securities borrowed |
|
|
15,517 |
|
|
|
16,859 |
|
|
16,782 |
|
|
16,346 |
|
|
|
17,486 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Taxable |
|
|
14,684 |
|
|
|
15,616 |
|
|
15,512 |
|
|
11,994 |
|
|
|
12,516 |
|
Tax-exempt |
|
|
1,513 |
|
|
|
1,498 |
|
|
1,648 |
|
|
1,717 |
|
|
|
1,697 |
|
Other |
|
|
4,017 |
|
|
|
5,197 |
|
|
4,438 |
|
|
4,734 |
|
|
|
4,417 |
|
Total interest income |
|
|
150,056 |
|
|
|
150,040 |
|
|
157,702 |
|
|
148,326 |
|
|
|
140,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Deposits |
|
|
18,036 |
|
|
|
17,106 |
|
|
14,838 |
|
|
12,353 |
|
|
|
10,136 |
|
Securities loaned |
|
|
13,470 |
|
|
|
14,738 |
|
|
13,935 |
|
|
13,984 |
|
|
|
15,075 |
|
Short-term borrowings |
|
|
6,897 |
|
|
|
5,471 |
|
|
7,476 |
|
|
7,831 |
|
|
|
6,466 |
|
Notes payable |
|
|
2,629 |
|
|
|
2,641 |
|
|
2,627 |
|
|
2,702 |
|
|
|
2,437 |
|
Junior subordinated debentures |
|
|
986 |
|
|
|
1,001 |
|
|
968 |
|
|
955 |
|
|
|
918 |
|
Other |
|
|
162 |
|
|
|
152 |
|
|
143 |
|
|
160 |
|
|
|
160 |
|
Total interest expense |
|
|
42,180 |
|
|
|
41,109 |
|
|
39,987 |
|
|
37,985 |
|
|
|
35,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net interest income |
|
|
107,876 |
|
|
|
108,931 |
|
|
117,715 |
|
|
110,341 |
|
|
|
104,848 |
|
Provision (recovery) for loan losses |
|
|
(672 |
) |
|
|
951 |
|
|
6,926 |
|
|
(371 |
) |
|
|
340 |
|
Net interest income after provision (recovery) for loan losses |
|
|
108,548 |
|
|
|
107,980 |
|
|
110,789 |
|
|
110,712 |
|
|
|
104,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net gains from sale of loans and other mortgage production income |
|
|
131,173 |
|
|
|
96,139 |
|
|
90,628 |
|
|
116,243 |
|
|
|
132,478 |
|
Mortgage loan origination fees |
|
|
33,409 |
|
|
|
21,873 |
|
|
26,615 |
|
|
27,004 |
|
|
|
29,318 |
|
Securities commissions and fees |
|
|
34,142 |
|
|
|
35,969 |
|
|
36,984 |
|
|
36,968 |
|
|
|
38,320 |
|
Investment and securities advisory fees and commissions |
|
|
22,859 |
|
|
|
20,160 |
|
|
26,260 |
|
|
23,487 |
|
|
|
21,965 |
|
Net insurance premiums earned |
|
|
33,466 |
|
|
|
33,203 |
|
|
34,146 |
|
|
34,185 |
|
|
|
34,105 |
|
Other |
|
|
57,822 |
|
|
|
45,124 |
|
|
23,883 |
|
|
31,810 |
|
|
|
23,248 |
|
Total noninterest income |
|
|
312,871 |
|
|
|
252,468 |
|
|
238,516 |
|
|
269,697 |
|
|
|
279,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Employees' compensation and benefits |
|
|
215,743 |
|
|
|
189,898 |
|
|
179,881 |
|
|
205,575 |
|
|
|
200,632 |
|
Occupancy and equipment, net |
|
|
28,219 |
|
|
|
28,023 |
|
|
30,512 |
|
|
29,015 |
|
|
|
27,893 |
|
Professional services |
|
|
23,753 |
|
|
|
22,942 |
|
|
26,793 |
|
|
27,984 |
|
|
|
26,020 |
|
Loss and loss adjustment expenses |
|
|
24,981 |
|
|
|
14,926 |
|
|
20,694 |
|
|
18,712 |
|
|
|
24,409 |
|
Other |
|
|
50,981 |
|
|
|
53,296 |
|
|
52,939 |
|
|
54,425 |
|
|
|
59,563 |
|
Total noninterest expense |
|
|
343,677 |
|
|
|
309,085 |
|
|
310,819 |
|
|
335,711 |
|
|
|
338,517 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Income before income taxes |
|
|
77,742 |
|
|
|
51,363 |
|
|
38,486 |
|
|
44,698 |
|
|
|
45,425 |
|
Income tax expense |
|
|
17,951 |
|
|
|
11,586 |
|
|
8,928 |
|
|
7,600 |
|
|
|
11,034 |
|
Net income |
|
|
59,791 |
|
|
|
39,777 |
|
|
29,558 |
|
|
37,098 |
|
|
|
34,391 |
|
Less: Net income attributable to noncontrolling interest |
|
|
1,980 |
|
|
|
991 |
|
|
1,443 |
|
|
1,293 |
|
|
|
1,311 |
|
Income attributable to Hilltop |
|
$ |
57,811 |
|
|
$ |
38,786 |
|
$ |
28,115 |
|
$ |
35,805 |
|
|
$ |
33,080 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Basic |
|
$ |
0.62 |
|
|
$ |
0.41 |
|
$ |
0.30 |
|
$ |
0.38 |
|
|
$ |
0.35 |
|
Diluted |
|
$ |
0.62 |
|
|
$ |
0.41 |
|
$ |
0.30 |
|
$ |
0.38 |
|
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash dividends declared per common share |
|
$ |
0.08 |
|
|
$ |
0.08 |
|
$ |
0.07 |
|
$ |
0.07 |
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Basic |
|
|
93,399 |
|
|
|
93,669 |
|
|
94,092 |
|
|
94,554 |
|
|
|
95,270 |
|
Diluted |
|
|
93,418 |
|
|
|
93,669 |
|
|
94,130 |
|
|
94,610 |
|
|
|
95,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended June 30, 2019 |
||||||||||||||||||||||||||
Segment Results |
|
|
|
|
|
|
|
Mortgage |
|
|
|
|
|
|
All Other and |
|
Hilltop |
|||||||||||
(in 000's) |
|
Banking |
|
Broker-Dealer |
|
Origination |
|
Insurance |
|
Corporate |
|
Eliminations |
|
Consolidated |
||||||||||||||
Net interest income (expense) |
|
$ |
93,423 |
|
|
$ |
11,410 |
|
|
$ |
(1,031 |
) |
|
$ |
592 |
|
|
$ |
(1,331 |
) |
|
$ |
4,813 |
|
|
$ |
107,876 |
|
Provision (recovery) for loan losses |
|
|
(670 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(672 |
) |
Noninterest income |
|
|
10,742 |
|
|
|
105,559 |
|
|
|
164,548 |
|
|
|
36,151 |
|
|
|
665 |
|
|
|
(4,794 |
) |
|
|
312,871 |
|
Noninterest expense |
|
|
58,251 |
|
|
|
94,870 |
|
|
|
141,721 |
|
|
|
39,589 |
|
|
|
9,274 |
|
|
|
(28 |
) |
|
|
343,677 |
|
Income (loss) before income taxes |
|
$ |
46,584 |
|
|
$ |
22,101 |
|
|
$ |
21,796 |
|
|
$ |
(2,846 |
) |
|
$ |
(9,940 |
) |
|
$ |
47 |
|
|
$ |
77,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Six Months Ended June 30, 2019 |
|||||||||||||||||||||||
Segment Results |
|
|
|
|
|
|
|
Mortgage |
|
|
|
|
|
|
All Other and |
|
Hilltop |
||||||||
(in 000's) |
|
Banking |
|
Broker-Dealer |
|
Origination |
|
Insurance |
|
Corporate |
|
Eliminations |
|
Consolidated |
|||||||||||
Net interest income (expense) |
|
$ |
186,113 |
|
$ |
24,260 |
|
|
$ |
(1,499 |
) |
|
$ |
1,236 |
|
$ |
(2,661 |
) |
|
$ |
9,358 |
|
|
$ |
216,807 |
Provision (recovery) for loan losses |
|
|
355 |
|
|
(76 |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
279 |
Noninterest income |
|
|
21,362 |
|
|
196,865 |
|
|
|
282,580 |
|
|
|
72,643 |
|
|
1,390 |
|
|
|
(9,501 |
) |
|
|
565,339 |
Noninterest expense |
|
|
118,977 |
|
|
182,677 |
|
|
|
256,398 |
|
|
|
69,926 |
|
|
24,836 |
|
|
|
(52 |
) |
|
|
652,762 |
Income (loss) before income taxes |
|
$ |
88,143 |
|
$ |
38,524 |
|
|
$ |
24,683 |
|
|
$ |
3,953 |
|
$ |
(26,107 |
) |
|
$ |
(91 |
) |
|
$ |
129,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|||||||||||||
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|||||
Selected Financial Data |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hilltop Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average stockholders' equity |
|
|
11.63% |
|
|
8.04% |
|
|
5.76% |
|
|
7.41% |
|
|
6.95% |
Return on average assets |
|
|
1.74% |
|
|
1.21% |
|
|
0.86% |
|
|
1.07% |
|
|
1.03% |
Net interest margin (1) |
|
|
3.49% |
|
|
3.69% |
|
|
3.75% |
|
|
3.48% |
|
|
3.46% |
Net interest margin (taxable equivalent) (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported |
|
|
3.49% |
|
|
3.70% |
|
|
3.76% |
|
|
3.49% |
|
|
3.47% |
Impact of purchase accounting |
|
|
23 bps |
|
|
32 bps |
|
|
43 bps |
|
|
28 bps |
|
|
29 bps |
Book value per common share ($) |
|
|
21.85 |
|
|
21.23 |
|
|
20.83 |
|
|
20.51 |
|
|
20.21 |
Shares outstanding, end of period (000's) |
|
|
92,775 |
|
|
93,821 |
|
|
93,610 |
|
|
94,594 |
|
|
94,571 |
Dividend payout ratio (3) |
|
|
12.92% |
|
|
19.32% |
|
|
23.43% |
|
|
18.48% |
|
|
20.16% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (1) |
|
|
4.06% |
|
|
4.24% |
|
|
4.50% |
|
|
4.13% |
|
|
4.11% |
Net interest margin (taxable equivalent) (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported |
|
|
4.06% |
|
|
4.25% |
|
|
4.51% |
|
|
4.14% |
|
|
4.12% |
Impact of purchase accounting |
|
|
31 bps |
|
|
44 bps |
|
|
61 bps |
|
|
39 bps |
|
|
42 bps |
Accretion of discount on loans ($000's) |
|
|
6,444 |
|
|
8,735 |
|
|
12,737 |
|
|
8,147 |
|
|
8,343 |
Net charge-offs ($000's) |
|
|
2,960 |
|
|
1,628 |
|
|
7,592 |
|
|
1,447 |
|
|
1,564 |
Return on average assets |
|
|
1.43% |
|
|
1.34% |
|
|
1.31% |
|
|
1.19% |
|
|
1.09% |
Fee income ratio |
|
|
10.3% |
|
|
10.3% |
|
|
10.1% |
|
|
10.7% |
|
|
10.8% |
Efficiency ratio |
|
|
55.9% |
|
|
58.8% |
|
|
56.8% |
|
|
63.7% |
|
|
66.5% |
Employees' compensation and benefits ($000's) |
|
|
33,050 |
|
|
32,171 |
|
|
31,955 |
|
|
36,878 |
|
|
32,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broker-Dealer Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue ($000's) (4) |
|
|
116,969 |
|
|
104,157 |
|
|
89,750 |
|
|
95,266 |
|
|
86,479 |
Employees' compensation and benefits ($000's) |
|
|
70,333 |
|
|
63,075 |
|
|
54,249 |
|
|
59,535 |
|
|
52,418 |
Variable compensation expense ($000's) |
|
|
44,833 |
|
|
34,581 |
|
|
31,744 |
|
|
33,574 |
|
|
26,036 |
Compensation as a % of net revenue |
|
|
60.1% |
|
|
60.6% |
|
|
60.4% |
|
|
62.5% |
|
|
60.6% |
Pre-tax margin (5) |
|
|
18.9% |
|
|
15.8% |
|
|
12.1% |
|
|
10.4% |
|
|
9.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Origination Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loan originations - volume ($000's): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home purchases |
|
|
3,329,024 |
|
|
2,050,760 |
|
|
2,586,677 |
|
|
3,237,444 |
|
|
3,615,991 |
Refinancings |
|
|
631,065 |
|
|
396,282 |
|
|
384,990 |
|
|
416,201 |
|
|
491,384 |
Total mortgage loan originations - volume |
|
|
3,960,089 |
|
|
2,447,042 |
|
|
2,971,667 |
|
|
3,653,645 |
|
|
4,107,375 |
Mortgage loan sales - volume ($000's) |
|
|
3,338,070 |
|
|
2,711,114 |
|
|
3,008,793 |
|
|
4,015,051 |
|
|
3,526,603 |
Net gains from mortgage loan sales (basis points) |
|
|
333 |
|
|
330 |
|
|
334 |
|
|
330 |
|
|
317 |
Mortgage servicing rights asset ($000's) (6) |
|
|
53,695 |
|
|
62,049 |
|
|
66,102 |
|
|
68,804 |
|
|
57,373 |
Employees' compensation and benefits ($000's) |
|
|
106,449 |
|
|
79,043 |
|
|
84,334 |
|
|
102,025 |
|
|
111,713 |
Variable compensation expense ($000's) |
|
|
65,516 |
|
|
38,929 |
|
|
44,529 |
|
|
58,686 |
|
|
66,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio |
|
|
74.6% |
|
|
45.0% |
|
|
60.6% |
|
|
54.7% |
|
|
71.6% |
Expense ratio |
|
|
38.4% |
|
|
41.5% |
|
|
37.9% |
|
|
38.8% |
|
|
39.5% |
Combined ratio |
|
|
113.0% |
|
|
86.5% |
|
|
98.5% |
|
|
93.5% |
|
|
111.1% |
Employees' compensation and benefits ($000's) |
|
|
2,784 |
|
|
3,202 |
|
|
2,670 |
|
|
2,595 |
|
|
2,954 |
(1) |
Net interest margin is defined as net interest income divided by average interest-earning assets. |
(2) |
Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.2 million, $0.2 million, $0.3 million, $0.2 million, and $0.2 million, respectively, for the periods presented and for the banking segment were $0.2 million for each of the periods presented. |
(3) |
Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share. |
(4) |
Net revenue is defined as the sum of total broker-dealer net interest income plus total broker-dealer noninterest income. |
(5) |
Pre-tax margin is defined as income before income taxes divided by net revenue |
(6) |
Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
||||||||||
Capital Ratios |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
||||||||||
Tier 1 capital (to average assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
12.53 |
% |
|
|
12.61 |
% |
|
|
12.47 |
% |
|
|
11.86 |
% |
|
|
12.80 |
% |
Hilltop |
|
|
13.00 |
% |
|
|
13.22 |
% |
|
|
12.53 |
% |
|
|
12.40 |
% |
|
|
12.90 |
% |
Common equity Tier 1 capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
13.84 |
% |
|
|
13.89 |
% |
|
|
13.90 |
% |
|
|
13.88 |
% |
|
|
14.59 |
% |
Hilltop |
|
|
16.32 |
% |
|
|
16.75 |
% |
|
|
16.58 |
% |
|
|
16.95 |
% |
|
|
17.61 |
% |
Tier 1 capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
13.84 |
% |
|
|
13.89 |
% |
|
|
13.90 |
% |
|
|
13.88 |
% |
|
|
14.59 |
% |
Hilltop |
|
|
16.77 |
% |
|
|
17.22 |
% |
|
|
17.04 |
% |
|
|
17.42 |
% |
|
|
18.10 |
% |
Total capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
14.48 |
% |
|
|
14.60 |
% |
|
|
14.63 |
% |
|
|
14.63 |
% |
|
|
15.38 |
% |
Hilltop |
|
|
17.14 |
% |
|
|
17.64 |
% |
|
|
17.47 |
% |
|
|
17.87 |
% |
|
|
18.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
||||||||||
Non-Performing Loans Portfolio Data |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
||||||||||
Loans accounted for on a non-accrual basis ($000's): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial real estate |
|
|
5,276 |
|
|
|
5,332 |
|
|
|
5,324 |
|
|
|
7,506 |
|
|
|
14,256 |
|
Commercial and industrial |
|
|
14,152 |
|
|
|
13,350 |
|
|
|
14,870 |
|
|
|
21,323 |
|
|
|
22,815 |
|
Construction and land development |
|
|
1,413 |
|
|
|
1,473 |
|
|
|
3,278 |
|
|
|
3,402 |
|
|
|
569 |
|
1-4 family residential |
|
|
11,136 |
|
|
|
10,662 |
|
|
|
10,437 |
|
|
|
4,476 |
|
|
|
4,273 |
|
Mortgage warehouse |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Consumer |
|
|
34 |
|
|
|
38 |
|
|
|
41 |
|
|
|
45 |
|
|
|
49 |
|
Broker-dealer |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Covered |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,777 |
|
|
|
5,277 |
|
|
|
|
32,011 |
|
|
|
30,855 |
|
|
|
33,950 |
|
|
|
42,529 |
|
|
|
47,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-performing loans as a % of total loans |
|
|
0.36 |
% |
|
|
0.38 |
% |
|
|
0.41 |
% |
|
|
0.50 |
% |
|
|
0.56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other real estate owned ($000's) |
|
|
20,753 |
|
|
|
23,066 |
|
|
|
27,578 |
|
|
|
32,518 |
|
|
|
37,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other repossessed assets ($000's) |
|
|
— |
|
|
|
30 |
|
|
|
68 |
|
|
|
99 |
|
|
|
168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-performing assets ($000's) |
|
|
52,764 |
|
|
|
53,951 |
|
|
|
61,596 |
|
|
|
75,146 |
|
|
|
85,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-performing assets as a % of total assets |
|
|
0.37 |
% |
|
|
0.40 |
% |
|
|
0.45 |
% |
|
|
0.55 |
% |
|
|
0.62 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-PCI loans past due 90 days or more and still accruing ($000's) |
|
|
77,425 |
|
|
|
77,045 |
|
|
|
83,131 |
|
|
|
80,664 |
|
|
|
74,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Troubled debt restructurings included in accruing loans held for investment ($000's) |
|
|
2,256 |
|
|
|
1,313 |
|
|
|
1,339 |
|
|
|
1,362 |
|
|
|
1,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended June 30, |
|
|||||||||||||||||
|
|
2019 |
|
2018 |
|
|||||||||||||||
|
|
Average |
|
Interest |
|
Annualized |
|
Average |
|
Interest |
|
Annualized |
|
|||||||
|
|
Outstanding |
|
Earned or |
|
Yield or |
|
Outstanding |
|
Earned or |
|
Yield or |
|
|||||||
Net Interest Margin (Taxable Equivalent) Details |
|
Balance |
|
Paid |
|
Rate |
|
Balance |
|
Paid |
|
Rate |
|
|||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Loans held for sale |
|
$ |
1,307,251 |
|
|
$ |
15,041 |
|
4.60 |
% |
$ |
1,589,149 |
|
|
$ |
18,241 |
|
4.59 |
% |
|
Loans held for investment, gross (1) |
|
|
7,078,807 |
|
|
|
99,284 |
|
5.57 |
% |
|
6,374,873 |
|
|
|
85,683 |
|
5.34 |
% |
|
Investment securities - taxable |
|
|
1,733,536 |
|
|
|
14,654 |
|
3.38 |
% |
|
1,663,257 |
|
|
|
12,486 |
|
3.00 |
% |
|
Investment securities - non-taxable (2) |
|
|
227,953 |
|
|
|
1,687 |
|
2.96 |
% |
|
252,591 |
|
|
|
1,912 |
|
3.03 |
% |
|
Federal funds sold and securities purchased under agreements to resell |
|
|
69,369 |
|
|
|
369 |
|
2.13 |
% |
|
228,786 |
|
|
|
859 |
|
1.51 |
% |
|
Interest-bearing deposits in other financial institutions |
|
|
325,130 |
|
|
|
1,982 |
|
2.44 |
% |
|
419,006 |
|
|
|
1,890 |
|
1.81 |
% |
|
Securities borrowed |
|
|
1,598,063 |
|
|
|
15,517 |
|
3.84 |
% |
|
1,544,235 |
|
|
|
17,486 |
|
4.48 |
% |
|
Other |
|
|
68,990 |
|
|
|
1,682 |
|
9.77 |
% |
|
69,297 |
|
|
|
1,691 |
|
9.77 |
% |
|
Interest-earning assets, gross (2) |
|
|
12,409,099 |
|
|
|
150,216 |
|
4.81 |
% |
|
12,141,194 |
|
|
|
140,248 |
|
4.59 |
% |
|
Allowance for loan losses |
|
|
(59,437 |
) |
|
|
|
|
|
|
|
(63,944 |
) |
|
|
|
|
|
|
|
Interest-earning assets, net |
|
|
12,349,662 |
|
|
|
|
|
|
|
|
12,077,250 |
|
|
|
|
|
|
|
|
Noninterest-earning assets |
|
|
1,414,227 |
|
|
|
|
|
|
|
|
1,286,608 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
13,763,889 |
|
|
|
|
|
|
|
$ |
13,363,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest-bearing deposits |
|
$ |
5,792,236 |
|
|
$ |
18,036 |
|
1.25 |
% |
$ |
5,366,535 |
|
|
$ |
10,136 |
|
0.76 |
% |
|
Securities loaned |
|
|
1,462,370 |
|
|
|
13,470 |
|
3.69 |
% |
|
1,382,984 |
|
|
|
15,075 |
|
4.37 |
% |
|
Notes payable and other borrowings |
|
|
1,389,295 |
|
|
|
10,674 |
|
3.06 |
% |
|
1,588,132 |
|
|
|
9,981 |
|
2.51 |
% |
|
Total interest-bearing liabilities |
|
|
8,643,901 |
|
|
|
42,180 |
|
1.95 |
% |
|
8,337,651 |
|
|
|
35,192 |
|
1.69 |
% |
|
Noninterest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Noninterest-bearing deposits |
|
|
2,549,792 |
|
|
|
|
|
|
|
|
2,492,253 |
|
|
|
|
|
|
|
|
Other liabilities |
|
|
551,333 |
|
|
|
|
|
|
|
|
620,900 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
11,745,026 |
|
|
|
|
|
|
|
|
11,450,804 |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
1,995,811 |
|
|
|
|
|
|
|
|
1,910,316 |
|
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
23,052 |
|
|
|
|
|
|
|
|
2,738 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
13,763,889 |
|
|
|
|
|
|
|
$ |
13,363,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net interest income (2) |
|
|
|
|
$ |
108,036 |
|
|
|
|
|
|
$ |
105,056 |
|
|
|
|||
Net interest spread (2) |
|
|
|
|
|
|
|
2.86 |
% |
|
|
|
|
|
|
2.90 |
% |
|||
Net interest margin (2) |
|
|
|
|
|
|
|
3.49 |
% |
|
|
|
|
|
|
3.47 |
% |
(1) |
Average balance includes non-accrual loans. |
(2) |
Presented on a taxable equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rates for the periods presented. The adjustment to interest income was $0.2 million for both the three months ended June 30, 2019 and 2018. |
Conference Call Information
Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, July 26, 2019. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review second quarter 2019 financial results. Interested parties can access the conference call by dialing 1-877-508-9457 (domestic) or 1-412-317-0789 (international). The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop-holdings.com).
About Hilltop
Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Hilltop Securities Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. Through Hilltop Holdings’ other wholly owned subsidiary, National Lloyds Corporation, it provides property and casualty insurance through two insurance companies, National Lloyds Insurance Company and American Summit Insurance Company. At June 30, 2019, Hilltop employed approximately 5,100 people and operated approximately 440 locations in 44 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol "HTH." Find more information at Hilltop-Holdings.com, PlainsCapital.com, PrimeLending.com, Nationallloydsinsurance.com and Hilltopsecurities.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “might,” “plan,” “probable,” “projects,” “seeks,” “should,” “target,” “view” or “would” or the negative of these words and phrases or similar words or phrases. For a discussion of certain factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.