DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the first quarter of 2022. Hilltop produced income to common stockholders of $22.3 million, or $0.28 per diluted share, for the first quarter of 2022, compared to $120.3 million, or $1.46 per diluted share, for the first quarter of 2021. Hilltop’s financial results for the first quarter of 2022 included decreases in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income as well as declines in net revenues within the broker-dealer segment’s structured finance and fixed income services business lines.
Rising interest rates and inflationary pressures materially impacted our financial results during the first quarter of 2022. Additional headwinds during 2022 are expected to include tight housing inventories on mortgage volumes, a return to normalized credit losses and declining deposit balances. The COVID-19 pandemic may also continue to adversely impact financial markets and overall economic conditions. The extent of the impact of these expected headwinds and the pandemic on our operational and financial performance for the remainder of 2022 remains uncertain.
Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per common share payable on May 27, 2022, to all common stockholders of record as of the close of business on May 13, 2022. During the three months ended March 31, 2022, there were no stock repurchases.
Jeremy B. Ford, President and CEO of Hilltop, said “Our results in the first quarter were driven primarily by the strength and stability of PlainsCapital Bank, which generated growth in its core loan portfolio while experiencing improvement in its asset quality. PrimeLending and HilltopSecurities, both primarily fee-based businesses, were pressured by the sharp rise in interest rates, lower housing inventories and lower trading volumes. Additionally, total noninterest expenses at Hilltop declined during the period as our team remains focused on expense management. Overall, we are adapting to the new mortgage and interest rate environments and believe we have the team and business model in place to drive improvement.”
First Quarter 2022 Highlights for Hilltop:
-
The provision for credit losses was $0.1 million during the first quarter of 2022, compared to a reversal of credit losses of $18.6 million in the fourth quarter of 2021;
- The provision for credit losses during the first quarter of 2022 primarily reflected a slower U.S. economic outlook since the prior quarter, significantly offset by decreases in specific reserves and positive risk rating grade migration.
-
For the first quarter of 2022, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $143.0 million, compared to $310.2 million in the first quarter of 2021, a 53.9% decrease;
- Mortgage loan origination production volume was $3.8 billion during the first quarter of 2022, compared to $6.2 billion in the first quarter of 2021;
- Net gains from mortgage loans sold to third parties decreased to 321 basis points during the first quarter of 2022, compared to 362 basis points in the fourth quarter of 2021.
- Hilltop’s consolidated annualized return on average assets and return on average equity for the first quarter of 2022 were 0.53% and 3.60%, respectively, compared to 2.90% and 20.58%, respectively, for the first quarter of 2021;
-
Hilltop’s book value per common share decreased to $31.02 at March 31, 2022, compared to $31.95 at December 31, 2021;
- Decline in book value per common share during the first quarter of 2022 impacted by the significant increase of approximately $120 million in pre-tax net unrealized losses within our available for sale investment portfolio related to increases in market interest rates since purchase;
- Certain agency-issued securities were transferred from the available-for-sale to held-to-maturity portfolio on March 31, 2022 with pre-tax unrealized losses of approximately $74 million as of the date of transfer.
- Hilltop’s total assets were $18.4 billion and $18.7 billion at March 31, 2022 and December 31, 2021, respectively;
- Loans1, net of allowance for credit losses, increased to $7.2 billion at March 31, 2022 compared to $7.1 billion at December 31, 2021;
- Non-performing loans were $44.3 million, or 0.47% of total loans, at March 31, 2022, compared to $51.1 million, or 0.52% of total loans, at December 31, 2021;
- Loans held for sale decreased by 12.5% from December 31, 2021 to $1.6 billion at March 31, 2022;
- Total deposits were $12.7 billion and $12.8 billion at March 31, 2022 and December 31, 2021, respectively;
- Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.46% and a Common Equity Tier 1 Capital Ratio of 21.27% at March 31, 2022;
-
Hilltop’s consolidated net interest margin4 decreased to 2.36% for the first quarter of 2022, compared to 2.44% in the fourth quarter of 2021;
- Includes previously deferred interest income of $1.6 million during the first quarter of 2022 related to PPP loan-related origination fees, compared to $7.5 million in the first quarter of 2021.
- For the first quarter of 2022, noninterest income was $216.4 million, compared to $417.6 million in the first quarter of 2021, a 48.2% decrease;
- For the first quarter 2022, noninterest expense was $286.4 million, compared to $366.7 million in the first quarter of 2021, a 21.9% decrease; and
-
Hilltop’s effective tax rate was 19.4% during the first quarter of 2022, compared to 23.4% during the same period in 2021.
- The effective tax rate for the first quarter of 2022 was lower than the applicable statutory rate primarily due to the discrete impact of restricted stock vesting during the quarter.
1
|
“Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $506.2 million and $733.0 million at March 31, 2022 and December 31, 2021, respectively. |
|
2
|
Capital ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period. |
|
3 |
Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets. |
|
4 |
Net interest margin is defined as net interest income divided by average interest-earning assets. |
|
Consolidated Financial and Other Information |
||||||||||||||||||||
|
||||||||||||||||||||
Consolidated Balance Sheets |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||||||
(in 000's) |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
||||||||||
Cash and due from banks |
|
$ |
2,886,812 |
|
|
$ |
2,823,138 |
|
|
$ |
2,463,111 |
|
|
$ |
1,372,818 |
|
|
$ |
1,564,489 |
|
Federal funds sold |
|
|
383 |
|
|
|
385 |
|
|
|
406 |
|
|
|
387 |
|
|
|
396 |
|
Assets segregated for regulatory purposes |
|
|
128,408 |
|
|
|
221,740 |
|
|
|
269,506 |
|
|
|
207,284 |
|
|
|
273,393 |
|
Securities purchased under agreements to resell |
|
|
256,991 |
|
|
|
118,262 |
|
|
|
155,908 |
|
|
|
202,638 |
|
|
|
106,342 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Trading, at fair value |
|
|
471,763 |
|
|
|
647,998 |
|
|
|
609,813 |
|
|
|
682,483 |
|
|
|
528,712 |
|
Available for sale, at fair value, net |
|
|
1,462,340 |
|
|
|
2,130,568 |
|
|
|
1,994,183 |
|
|
|
1,817,807 |
|
|
|
1,715,406 |
|
Held to maturity, at amortized cost, net |
|
|
953,107 |
|
|
|
267,684 |
|
|
|
277,419 |
|
|
|
288,776 |
|
|
|
300,088 |
|
Equity, at fair value |
|
|
225 |
|
|
|
250 |
|
|
|
221 |
|
|
|
193 |
|
|
|
189 |
|
|
|
|
2,887,435 |
|
|
|
3,046,500 |
|
|
|
2,881,636 |
|
|
|
2,789,259 |
|
|
|
2,544,395 |
|
Loans held for sale |
|
|
1,643,994 |
|
|
|
1,878,190 |
|
|
|
2,108,878 |
|
|
|
2,885,458 |
|
|
|
2,538,986 |
|
Loans held for investment, net of unearned income |
|
|
7,797,903 |
|
|
|
7,879,904 |
|
|
|
7,552,926 |
|
|
|
7,645,227 |
|
|
|
7,810,657 |
|
Allowance for credit losses |
|
|
(91,185 |
) |
|
|
(91,352 |
) |
|
|
(109,512 |
) |
|
|
(115,269 |
) |
|
|
(144,499 |
) |
Loans held for investment, net |
|
|
7,706,718 |
|
|
|
7,788,552 |
|
|
|
7,443,414 |
|
|
|
7,529,958 |
|
|
|
7,666,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Broker-dealer and clearing organization receivables |
|
|
1,610,352 |
|
|
|
1,672,946 |
|
|
|
1,419,652 |
|
|
|
1,403,447 |
|
|
|
1,596,817 |
|
Premises and equipment, net |
|
|
198,906 |
|
|
|
204,438 |
|
|
|
210,026 |
|
|
|
212,402 |
|
|
|
213,304 |
|
Operating lease right-of-use assets |
|
|
108,180 |
|
|
|
112,328 |
|
|
|
115,942 |
|
|
|
115,698 |
|
|
|
101,055 |
|
Mortgage servicing assets |
|
|
100,475 |
|
|
|
86,990 |
|
|
|
110,931 |
|
|
|
124,497 |
|
|
|
142,125 |
|
Other assets |
|
|
546,622 |
|
|
|
452,880 |
|
|
|
526,339 |
|
|
|
535,536 |
|
|
|
648,895 |
|
Goodwill |
|
|
267,447 |
|
|
|
267,447 |
|
|
|
267,447 |
|
|
|
267,447 |
|
|
|
267,447 |
|
Other intangible assets, net |
|
|
14,233 |
|
|
|
15,284 |
|
|
|
16,455 |
|
|
|
17,705 |
|
|
|
19,035 |
|
Total assets |
|
$ |
18,356,956 |
|
|
$ |
18,689,080 |
|
|
$ |
17,989,651 |
|
|
$ |
17,664,534 |
|
|
$ |
17,682,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Noninterest-bearing |
|
$ |
4,694,592 |
|
|
$ |
4,577,183 |
|
|
$ |
4,433,148 |
|
|
$ |
4,231,082 |
|
|
$ |
4,031,181 |
|
Interest-bearing |
|
|
7,972,110 |
|
|
|
8,240,894 |
|
|
|
7,699,014 |
|
|
|
7,502,703 |
|
|
|
7,701,598 |
|
Total deposits |
|
|
12,666,702 |
|
|
|
12,818,077 |
|
|
|
12,132,162 |
|
|
|
11,733,785 |
|
|
|
11,732,779 |
|
Broker-dealer and clearing organization payables |
|
|
1,397,836 |
|
|
|
1,477,300 |
|
|
|
1,496,923 |
|
|
|
1,439,620 |
|
|
|
1,546,227 |
|
Short-term borrowings |
|
|
835,054 |
|
|
|
859,444 |
|
|
|
747,040 |
|
|
|
915,919 |
|
|
|
676,652 |
|
Securities sold, not yet purchased, at fair value |
|
|
97,629 |
|
|
|
96,586 |
|
|
|
113,064 |
|
|
|
132,950 |
|
|
|
97,055 |
|
Notes payable |
|
|
395,479 |
|
|
|
387,904 |
|
|
|
395,804 |
|
|
|
396,653 |
|
|
|
401,713 |
|
Operating lease liabilities |
|
|
125,919 |
|
|
|
130,960 |
|
|
|
134,296 |
|
|
|
134,019 |
|
|
|
120,339 |
|
Junior subordinated debentures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
67,012 |
|
|
|
67,012 |
|
Other liabilities |
|
|
347,742 |
|
|
|
369,606 |
|
|
|
468,020 |
|
|
|
348,200 |
|
|
|
595,045 |
|
Total liabilities |
|
|
15,866,361 |
|
|
|
16,139,877 |
|
|
|
15,487,309 |
|
|
|
15,168,158 |
|
|
|
15,236,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Common stock |
|
|
794 |
|
|
|
790 |
|
|
|
790 |
|
|
|
812 |
|
|
|
823 |
|
Additional paid-in capital |
|
|
1,275,649 |
|
|
|
1,274,446 |
|
|
|
1,270,272 |
|
|
|
1,302,439 |
|
|
|
1,319,518 |
|
Accumulated other comprehensive income (loss) |
|
|
(80,565 |
) |
|
|
(10,219 |
) |
|
|
367 |
|
|
|
7,093 |
|
|
|
3,486 |
|
Retained earnings |
|
|
1,267,415 |
|
|
|
1,257,014 |
|
|
|
1,204,307 |
|
|
|
1,159,304 |
|
|
|
1,094,727 |
|
Deferred compensation employee stock trust, net |
|
|
744 |
|
|
|
752 |
|
|
|
751 |
|
|
|
754 |
|
|
|
752 |
|
Employee stock trust |
|
|
(104 |
) |
|
|
(115 |
) |
|
|
(116 |
) |
|
|
(121 |
) |
|
|
(121 |
) |
Total Hilltop stockholders' equity |
|
|
2,463,933 |
|
|
|
2,522,668 |
|
|
|
2,476,371 |
|
|
|
2,470,281 |
|
|
|
2,419,185 |
|
Noncontrolling interests |
|
|
26,662 |
|
|
|
26,535 |
|
|
|
25,971 |
|
|
|
26,095 |
|
|
|
26,830 |
|
Total stockholders' equity |
|
|
2,490,595 |
|
|
|
2,549,203 |
|
|
|
2,502,342 |
|
|
|
2,496,376 |
|
|
|
2,446,015 |
|
Total liabilities & stockholders' equity |
|
$ |
18,356,956 |
|
|
$ |
18,689,080 |
|
|
$ |
17,989,651 |
|
|
$ |
17,664,534 |
|
|
$ |
17,682,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|||||||||||||||||
Consolidated Income Statements |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|||||||||
(in 000's, except per share data) |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|||||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans, including fees |
|
$ |
90,408 |
|
$ |
96,104 |
|
|
$ |
99,769 |
|
|
$ |
104,162 |
|
|
$ |
104,277 |
|
Securities borrowed |
|
|
8,817 |
|
|
8,524 |
|
|
|
8,585 |
|
|
|
15,586 |
|
|
|
28,972 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Taxable |
|
|
15,581 |
|
|
13,916 |
|
|
|
12,341 |
|
|
|
11,125 |
|
|
|
10,251 |
|
Tax-exempt |
|
|
2,419 |
|
|
2,639 |
|
|
|
2,687 |
|
|
|
2,338 |
|
|
|
2,102 |
|
Other |
|
|
2,312 |
|
|
1,872 |
|
|
|
1,796 |
|
|
|
1,607 |
|
|
|
1,321 |
|
Total interest income |
|
|
119,537 |
|
|
123,055 |
|
|
|
125,178 |
|
|
|
134,818 |
|
|
|
146,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits |
|
|
4,193 |
|
|
4,404 |
|
|
|
5,303 |
|
|
|
6,176 |
|
|
|
7,741 |
|
Securities loaned |
|
|
7,472 |
|
|
6,624 |
|
|
|
6,519 |
|
|
|
12,345 |
|
|
|
25,486 |
|
Short-term borrowings |
|
|
2,045 |
|
|
2,279 |
|
|
|
2,400 |
|
|
|
2,374 |
|
|
|
2,013 |
|
Notes payable |
|
|
4,437 |
|
|
5,871 |
|
|
|
5,465 |
|
|
|
5,253 |
|
|
|
4,797 |
|
Junior subordinated debentures |
|
|
— |
|
|
— |
|
|
|
419 |
|
|
|
577 |
|
|
|
562 |
|
Other |
|
|
1,399 |
|
|
(417 |
) |
|
|
(18 |
) |
|
|
177 |
|
|
|
642 |
|
Total interest expense |
|
|
19,546 |
|
|
18,761 |
|
|
|
20,088 |
|
|
|
26,902 |
|
|
|
41,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net interest income |
|
|
99,991 |
|
|
104,294 |
|
|
|
105,090 |
|
|
|
107,916 |
|
|
|
105,682 |
|
Provision for (reversal of) credit losses |
|
|
115 |
|
|
(18,565 |
) |
|
|
(5,819 |
) |
|
|
(28,720 |
) |
|
|
(5,109 |
) |
Net interest income after provision for (reversal of) credit losses |
|
|
99,876 |
|
|
122,859 |
|
|
|
110,909 |
|
|
|
136,636 |
|
|
|
110,791 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net gains from sale of loans and other mortgage production income |
|
|
110,894 |
|
|
156,103 |
|
|
|
203,152 |
|
|
|
199,625 |
|
|
|
267,080 |
|
Mortgage loan origination fees |
|
|
32,062 |
|
|
35,930 |
|
|
|
38,780 |
|
|
|
42,146 |
|
|
|
43,155 |
|
Securities commissions and fees |
|
|
37,146 |
|
|
32,801 |
|
|
|
34,412 |
|
|
|
38,300 |
|
|
|
38,314 |
|
Investment and securities advisory fees and commissions |
|
|
29,705 |
|
|
42,834 |
|
|
|
49,646 |
|
|
|
32,268 |
|
|
|
27,695 |
|
Other |
|
|
6,621 |
|
|
17,178 |
|
|
|
41,955 |
|
|
|
27,560 |
|
|
|
41,341 |
|
Total noninterest income |
|
|
216,428 |
|
|
284,846 |
|
|
|
367,945 |
|
|
|
339,899 |
|
|
|
417,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Employees' compensation and benefits |
|
|
200,019 |
|
|
229,717 |
|
|
|
258,679 |
|
|
|
248,486 |
|
|
|
270,353 |
|
Occupancy and equipment, net |
|
|
24,766 |
|
|
25,741 |
|
|
|
25,428 |
|
|
|
25,004 |
|
|
|
24,429 |
|
Professional services |
|
|
10,063 |
|
|
9,904 |
|
|
|
14,542 |
|
|
|
16,239 |
|
|
|
13,585 |
|
Other |
|
|
51,502 |
|
|
56,832 |
|
|
|
56,525 |
|
|
|
53,639 |
|
|
|
58,295 |
|
Total noninterest expense |
|
|
286,350 |
|
|
322,194 |
|
|
|
355,174 |
|
|
|
343,368 |
|
|
|
366,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income taxes |
|
|
29,954 |
|
|
85,511 |
|
|
|
123,680 |
|
|
|
133,167 |
|
|
|
161,714 |
|
Income tax expense |
|
|
5,815 |
|
|
20,715 |
|
|
|
28,257 |
|
|
|
31,234 |
|
|
|
37,770 |
|
Net income |
|
|
24,139 |
|
|
64,796 |
|
|
|
95,423 |
|
|
|
101,933 |
|
|
|
123,944 |
|
Less: Net income attributable to noncontrolling interest |
|
|
1,889 |
|
|
2,611 |
|
|
|
2,517 |
|
|
|
2,873 |
|
|
|
3,599 |
|
Income attributable to Hilltop |
|
$ |
22,250 |
|
$ |
62,185 |
|
|
$ |
92,906 |
|
|
$ |
99,060 |
|
|
$ |
120,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.28 |
|
$ |
0.79 |
|
|
$ |
1.16 |
|
|
$ |
1.21 |
|
|
$ |
1.46 |
|
Diluted |
|
$ |
0.28 |
|
$ |
0.78 |
|
|
$ |
1.15 |
|
|
$ |
1.21 |
|
|
$ |
1.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends declared per common share |
|
$ |
0.15 |
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
79,114 |
|
|
78,933 |
|
|
|
80,109 |
|
|
|
81,663 |
|
|
|
82,169 |
|
Diluted |
|
|
79,356 |
|
|
79,427 |
|
|
|
80,542 |
|
|
|
82,199 |
|
|
|
82,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended March 31, 2022 |
|||||||||||||||||||||
Segment Results |
|
|
|
|
|
|
|
Mortgage |
|
|
|
|
All Other and |
|
Hilltop |
||||||||
(in 000's) |
|
Banking |
|
Broker-Dealer |
|
Origination |
|
Corporate |
|
Eliminations |
|
Consolidated |
|||||||||||
Net interest income (expense) |
|
$ |
92,070 |
|
|
$ |
11,518 |
|
|
$ |
(1,835 |
) |
|
$ |
(3,389 |
) |
|
$ |
1,627 |
|
|
$ |
99,991 |
Provision for (reversal of) credit losses |
|
|
(50 |
) |
|
|
165 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
115 |
Noninterest income |
|
|
12,771 |
|
|
|
60,691 |
|
|
|
143,195 |
|
|
|
1,766 |
|
|
|
(1,995 |
) |
|
|
216,428 |
Noninterest expense |
|
|
58,430 |
|
|
|
80,647 |
|
|
|
134,859 |
|
|
|
12,793 |
|
|
|
(379 |
) |
|
|
286,350 |
Income (loss) before taxes |
|
$ |
46,461 |
|
|
$ |
(8,603 |
) |
|
$ |
6,501 |
|
|
$ |
(14,416 |
) |
|
$ |
11 |
|
|
$ |
29,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||||||
Selected Financial Data |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hilltop Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Return on average stockholders' equity |
|
|
3.60 |
% |
|
|
9.93 |
% |
|
|
14.96 |
% |
|
|
16.42 |
% |
|
|
20.58 |
% |
Return on average assets |
|
|
0.53 |
% |
|
|
1.41 |
% |
|
|
2.13 |
% |
|
|
2.29 |
% |
|
|
2.90 |
% |
Net interest margin (1) |
|
|
2.36 |
% |
|
|
2.44 |
% |
|
|
2.53 |
% |
|
|
2.62 |
% |
|
|
2.69 |
% |
Net interest margin (taxable equivalent) (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
As reported |
|
|
2.37 |
% |
|
|
2.45 |
% |
|
|
2.54 |
% |
|
|
2.63 |
% |
|
|
2.69 |
% |
Impact of purchase accounting |
|
|
7 bps |
|
|
12 bps |
|
|
9 bps |
|
|
16 bps |
|
|
13 bps |
|||||
Book value per common share ($) |
|
|
31.02 |
|
|
|
31.95 |
|
|
|
31.36 |
|
|
|
30.44 |
|
|
|
29.41 |
|
Shares outstanding, end of period (000's) |
|
|
79,439 |
|
|
|
78,965 |
|
|
|
78,959 |
|
|
|
81,153 |
|
|
|
82,261 |
|
Dividend payout ratio (3) |
|
|
53.57 |
% |
|
|
15.19 |
% |
|
|
10.34 |
% |
|
|
9.92 |
% |
|
|
8.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Banking Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest margin (1) |
|
|
2.65 |
% |
|
|
2.81 |
% |
|
|
2.99 |
% |
|
|
3.19 |
% |
|
|
3.30 |
% |
Net interest margin (taxable equivalent) (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
As reported |
|
|
2.65 |
% |
|
|
2.82 |
% |
|
|
3.00 |
% |
|
|
3.20 |
% |
|
|
3.31 |
% |
Impact of purchase accounting |
|
|
8 bps |
|
|
15 bps |
|
|
11 bps |
|
|
20 bps |
|
|
17 bps |
|||||
Accretion of discount on loans ($000's) |
|
|
2,510 |
|
|
|
4,716 |
|
|
|
3,221 |
|
|
|
6,001 |
|
|
|
4,851 |
|
Net recoveries (charge-offs) ($000's) |
|
|
(282 |
) |
|
|
405 |
|
|
|
62 |
|
|
|
(510 |
) |
|
|
564 |
|
Return on average assets |
|
|
0.98 |
% |
|
|
1.44 |
% |
|
|
1.36 |
% |
|
|
1.91 |
% |
|
|
1.48 |
% |
Fee income ratio |
|
|
12.2 |
% |
|
|
10.8 |
% |
|
|
10.5 |
% |
|
|
8.9 |
% |
|
|
9.8 |
% |
Efficiency ratio |
|
|
55.7 |
% |
|
|
54.2 |
% |
|
|
48.8 |
% |
|
|
49.7 |
% |
|
|
48.4 |
% |
Employees' compensation and benefits ($000's) |
|
|
33,517 |
|
|
|
34,415 |
|
|
|
31,500 |
|
|
|
33,369 |
|
|
|
30,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Broker-Dealer Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net revenue ($000's) (4) |
|
|
72,209 |
|
|
|
94,569 |
|
|
|
126,570 |
|
|
|
94,145 |
|
|
|
109,137 |
|
Employees' compensation and benefits ($000's) (5) |
|
|
55,825 |
|
|
|
65,301 |
|
|
|
82,429 |
|
|
|
62,289 |
|
|
|
66,157 |
|
Variable compensation expense ($000's) |
|
|
26,625 |
|
|
|
35,939 |
|
|
|
53,505 |
|
|
|
34,409 |
|
|
|
37,412 |
|
Compensation as a % of net revenue (5) |
|
|
77.3 |
% |
|
|
69.1 |
% |
|
|
65.1 |
% |
|
|
66.2 |
% |
|
|
60.6 |
% |
Pre-tax margin (6) |
|
|
(11.9 |
)% |
|
|
1.8 |
% |
|
|
13.8 |
% |
|
|
7.3 |
% |
|
|
16.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mortgage Origination Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mortgage loan originations - volume ($000's): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Home purchases |
|
|
2,753,031 |
|
|
|
3,559,137 |
|
|
|
3,948,420 |
|
|
|
4,018,922 |
|
|
|
2,902,710 |
|
Refinancings |
|
|
1,011,452 |
|
|
|
1,430,369 |
|
|
|
1,646,208 |
|
|
|
1,881,121 |
|
|
|
3,281,395 |
|
Total mortgage loan originations - volume |
|
|
3,764,483 |
|
|
|
4,989,506 |
|
|
|
5,594,628 |
|
|
|
5,900,043 |
|
|
|
6,184,105 |
|
Mortgage loan sales - volume ($000's) |
|
|
3,868,596 |
|
|
|
4,988,538 |
|
|
|
6,195,559 |
|
|
|
5,524,226 |
|
|
|
6,350,837 |
|
Net gains from mortgage loan sales (basis points): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans sold to third parties |
|
|
321 |
|
|
|
362 |
|
|
|
359 |
|
|
|
376 |
|
|
|
398 |
|
Impact of loans retained by banking segment |
|
|
(9 |
) |
|
|
(15 |
) |
|
|
(13 |
) |
|
|
(12 |
) |
|
|
(10 |
) |
As reported |
|
|
312 |
|
|
|
347 |
|
|
|
346 |
|
|
|
364 |
|
|
|
388 |
|
Mortgage servicing rights asset ($000's) (7) |
|
|
100,475 |
|
|
|
86,990 |
|
|
|
110,931 |
|
|
|
124,497 |
|
|
|
142,125 |
|
Employees' compensation and benefits ($000's) |
|
|
102,748 |
|
|
|
121,758 |
|
|
|
134,814 |
|
|
|
145,401 |
|
|
|
166,248 |
|
Variable compensation expense ($000's) |
|
|
56,243 |
|
|
|
73,208 |
|
|
|
88,153 |
|
|
|
97,081 |
|
|
|
115,486 |
|
(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 $0.5 million, $0.5 million, $0.6 million, $0.4 million, and $0.2 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.2 million, $0.2 million, and $0.2 million, respectively, for 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 and total broker-dealer noninterest income. |
|
(5) | Noted balances and ratios during all prior periods reflect certain reclassifications to conform to current period presentation. |
|
(6) | Pre-tax margin is defined as income before income taxes divided by net revenue. |
|
(7) | 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||||||
Capital Ratios |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
||||||||||
Tier 1 capital (to average assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
9.74 |
% |
|
|
10.20 |
% |
|
|
10.02 |
% |
|
|
10.22 |
% |
|
|
10.50 |
% |
Hilltop |
|
|
12.46 |
% |
|
|
12.58 |
% |
|
|
12.64 |
% |
|
|
12.87 |
% |
|
|
13.01 |
% |
Common equity Tier 1 capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
15.37 |
% |
|
|
16.00 |
% |
|
|
15.40 |
% |
|
|
15.00 |
% |
|
|
14.74 |
% |
Hilltop |
|
|
21.27 |
% |
|
|
21.22 |
% |
|
|
21.28 |
% |
|
|
20.22 |
% |
|
|
19.63 |
% |
Tier 1 capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
15.37 |
% |
|
|
16.00 |
% |
|
|
15.40 |
% |
|
|
15.00 |
% |
|
|
14.74 |
% |
Hilltop |
|
|
21.27 |
% |
|
|
21.22 |
% |
|
|
21.28 |
% |
|
|
20.82 |
% |
|
|
20.22 |
% |
Total capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PlainsCapital |
|
|
16.18 |
% |
|
|
16.77 |
% |
|
|
16.32 |
% |
|
|
15.95 |
% |
|
|
15.64 |
% |
Hilltop |
|
|
23.85 |
% |
|
|
23.75 |
% |
|
|
24.00 |
% |
|
|
23.48 |
% |
|
|
22.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||||||
Non-Performing Assets Portfolio Data |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
|
2021 |
||||||||||
Loans accounted for on a non-accrual basis ($000's) (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial real estate |
|
|
6,153 |
|
|
|
6,601 |
|
|
|
5,705 |
|
|
|
7,211 |
|
|
|
10,668 |
|
Commercial and industrial |
|
|
18,486 |
|
|
|
22,478 |
|
|
|
29,808 |
|
|
|
33,033 |
|
|
|
36,144 |
|
Construction and land development |
|
|
1 |
|
|
|
2 |
|
|
|
366 |
|
|
|
474 |
|
|
|
501 |
|
1-4 family residential |
|
|
18,723 |
|
|
|
21,123 |
|
|
|
25,255 |
|
|
|
27,100 |
|
|
|
30,937 |
|
Consumer |
|
|
21 |
|
|
|
23 |
|
|
|
24 |
|
|
|
26 |
|
|
|
26 |
|
Broker-dealer |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
43,384 |
|
|
|
50,227 |
|
|
|
61,158 |
|
|
|
67,844 |
|
|
|
78,276 |
|
Troubled debt restructurings included in accruing loans held for investment ($000's) |
|
|
890 |
|
|
|
922 |
|
|
|
1,038 |
|
|
|
1,139 |
|
|
|
1,584 |
|
Non-performing loans ($000's) |
|
|
44,274 |
|
|
|
51,149 |
|
|
|
62,196 |
|
|
|
68,983 |
|
|
|
79,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-performing loans as a % of total loans |
|
|
0.47 |
% |
|
|
0.52 |
% |
|
|
0.64 |
% |
|
|
0.66 |
% |
|
|
0.77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other real estate owned ($000's) |
|
|
2,175 |
|
|
|
2,833 |
|
|
|
21,605 |
|
|
|
21,078 |
|
|
|
19,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other repossessed assets ($000's) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-performing assets ($000's) |
|
|
46,449 |
|
|
|
53,982 |
|
|
|
83,801 |
|
|
|
90,061 |
|
|
|
99,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-performing assets as a % of total assets |
|
|
0.25 |
% |
|
|
0.29 |
% |
|
|
0.47 |
% |
|
|
0.51 |
% |
|
|
0.56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans past due 90 days or more and still accruing ($000's) (2): |
|
|
87,489 |
|
|
|
60,775 |
|
|
|
175,734 |
|
|
|
245,828 |
|
|
|
265,230 |
|
(1) |
Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications through January 1, 2022. The Bank’s COVID-19 payment deferral programs since the second quarter of 2020 allowed for a deferral of principal and/or interest payments with such deferred principal payments due and payable on the maturity date of the existing loan. The Bank’s actions through 2021 included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $4 million, $17 million, $76 million, and $130 million as of December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively. |
|
(2) |
Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Three Months Ended March 31, |
|
||||||||||||||||
|
|
2022 |
|
|
2021 |
|
|
||||||||||||
|
|
Average |
|
Interest |
|
Annualized |
|
Average |
|
Interest |
|
Annualized |
|
||||||
|
|
Outstanding |
|
Earned |
|
Yield or |
|
Outstanding |
|
Earned |
|
Yield or |
|
||||||
Net Interest Margin (Taxable Equivalent) Details (1) |
|
Balance |
|
or Paid |
|
Rate |
|
Balance |
|
or Paid |
|
Rate |
|
||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Loans held for sale |
|
$ |
1,467,998 |
|
|
$ |
11,966 |
|
3.26 |
% |
$ |
2,573,085 |
|
|
$ |
16,233 |
|
2.52 |
% |
Loans held for investment, gross (2) |
|
|
7,839,047 |
|
|
|
78,442 |
|
4.06 |
% |
|
7,645,883 |
|
|
|
88,044 |
|
4.62 |
% |
Investment securities - taxable |
|
|
2,768,849 |
|
|
|
15,581 |
|
2.25 |
% |
|
2,267,709 |
|
|
|
10,233 |
|
1.80 |
% |
Investment securities - non-taxable (3) |
|
|
324,084 |
|
|
|
2,888 |
|
3.56 |
% |
|
284,001 |
|
|
|
2,280 |
|
3.21 |
% |
Federal funds sold and securities purchased under agreements to resell |
|
|
157,313 |
|
|
|
136 |
|
0.35 |
% |
|
93,525 |
|
|
|
— |
|
0.00 |
% |
Interest-bearing deposits in other financial institutions |
|
|
3,116,369 |
|
|
|
1,427 |
|
0.19 |
% |
|
1,565,879 |
|
|
|
582 |
|
0.15 |
% |
Securities borrowed |
|
|
1,455,166 |
|
|
|
8,817 |
|
2.42 |
% |
|
1,452,704 |
|
|
|
28,972 |
|
7.98 |
% |
Other |
|
|
54,602 |
|
|
|
750 |
|
5.57 |
% |
|
49,916 |
|
|
|
762 |
|
6.18 |
% |
Interest-earning assets, gross (3) |
|
|
17,183,428 |
|
|
|
120,007 |
|
2.83 |
% |
|
15,932,702 |
|
|
|
147,106 |
|
3.70 |
% |
Allowance for credit losses |
|
|
(92,239 |
) |
|
|
|
|
|
|
|
(149,397 |
) |
|
|
|
|
|
|
Interest-earning assets, net |
|
|
17,091,189 |
|
|
|
|
|
|
|
|
15,783,305 |
|
|
|
|
|
|
|
Noninterest-earning assets |
|
|
1,401,584 |
|
|
|
|
|
|
|
|
1,559,039 |
|
|
|
|
|
|
|
Total assets |
|
$ |
18,492,773 |
|
|
|
|
|
|
|
$ |
17,342,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest-bearing deposits |
|
$ |
8,201,824 |
|
|
$ |
4,193 |
|
0.21 |
% |
$ |
7,626,575 |
|
|
$ |
7,741 |
|
0.41 |
% |
Securities loaned |
|
|
1,371,816 |
|
|
|
7,472 |
|
2.21 |
% |
|
1,355,945 |
|
|
|
25,486 |
|
7.62 |
% |
Notes payable and other borrowings |
|
|
1,249,222 |
|
|
|
7,881 |
|
2.56 |
% |
|
1,130,068 |
|
|
|
8,014 |
|
2.85 |
% |
Total interest-bearing liabilities |
|
|
10,822,862 |
|
|
|
19,546 |
|
0.73 |
% |
|
10,112,588 |
|
|
|
41,241 |
|
1.65 |
% |
Noninterest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Noninterest-bearing deposits |
|
|
4,507,661 |
|
|
|
|
|
|
|
|
3,729,994 |
|
|
|
|
|
|
|
Other liabilities |
|
|
631,790 |
|
|
|
|
|
|
|
|
1,101,972 |
|
|
|
|
|
|
|
Total liabilities |
|
|
15,962,313 |
|
|
|
|
|
|
|
|
14,944,554 |
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
2,504,383 |
|
|
|
|
|
|
|
|
2,371,281 |
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
26,077 |
|
|
|
|
|
|
|
|
26,509 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
18,492,773 |
|
|
|
|
|
|
|
$ |
17,342,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net interest income (3) |
|
|
|
|
$ |
100,461 |
|
|
|
|
|
|
$ |
105,865 |
|
|
|
||
Net interest spread (3) |
|
|
|
|
|
|
|
2.10 |
% |
|
|
|
|
|
|
2.05 |
% |
||
Net interest margin (3) |
|
|
|
|
|
|
|
2.37 |
% |
|
|
|
|
|
|
2.69 |
% |
(1) |
Information presented on a consolidated basis. |
|
(2) |
Average balance includes non-accrual loans. |
|
(3) |
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 $0.5 million and $0.2 million for the three months ended March 31, 2022 and 2021, respectively. |
|
Conference Call Information
Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, April 22, 2022. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review first quarter 2022 financial results. Interested parties can access the conference call by dialing 1-844-200-6205 (United States), 1-833-950-0062 (Canada) or 1-929-526-1599 (all other locations) and then using the access code 352794. 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 Momentum Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At March 31, 2022, Hilltop employed approximately 4,800 people and operated approximately 400 locations in 47 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 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,” “building,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “probable,” “progressing,” “projects,” “seeks,” “should,” “target,” “view,” “well-tuned,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (ii) effectiveness of our data security controls in the face of cyber attacks; (iii) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (iv) changes in the interest rate environment; (v) the COVID-19 pandemic and the response of governmental authorities to the pandemic and disruptions in global or national supply chains, which have had, and may continue to have, an adverse impact on the global economy and our business operations and performance; (vi) transitions away from the London Interbank Offered Rate; and (vii) risks associated with concentration in real estate related loans. For further discussion of such factors, see the risk factors described 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.