EX-99.1 2 ex-99d1.htm EX-99.1 hth_Ex_99-1_Earnings

Exhibit 99.1

 

 

Investor Relations Contact:

 

Isabell Novakov

 

214-252-4029

 

inovakov@hilltop-holdings.com

 

Hilltop Holdings Inc. Announces Financial Results for Second Quarter 2017

 

DALLAS — (BUSINESS WIRE) July 27, 2017 — Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2017. Hilltop produced income of $62.5 million, or $0.63 per diluted share, for the second quarter of 2017, compared to $31.1 million, or $0.32 per diluted share, for the second quarter of 2016.  Hilltop’s annualized return on average assets and return on average equity for the second quarter of 2017 were 1.94% and 13.24%, respectively, compared to 1.05% and 7.07%, respectively, for the second quarter of 2016.

 

Hilltop’s results during the three and six months ended June 30, 2017 included non-recurring items related to the Bank’s recording of an insurance receivable and related increase to other noninterest income of $15.0 million from coverage provided by an insurance policy for forgery related to a single, large loan previously charged-off by the Bank during the second quarter of 2016 and the recognition within corporate of a pre-tax net increase to other noninterest income of $11.6 million (or $14.3 million after income tax benefit of $2.6 million) related to the resolution of the appraisal proceedings from the SWS Merger. The resolution of this matter resulted in 1,856,638 shares of HTH common stock, which had been held in escrow during the pendency of the proceeding, being returned to the Company’s pool of authorized but unissued shares of common stock.

 

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.06 per common share, payable on August 31, 2017, to all common stockholders of record as of the close of business on August 15, 2017. Additionally, pursuant to the stock repurchase program reauthorized by the Hilltop Board of Directors in January 2017, Hilltop paid $8.8 million to repurchase 343,823 shares at an average price of $25.58 per share during the second quarter of 2017. These shares were returned to the pool of authorized but unissued shares of common stock. 

 

Jeremy Ford, Co-CEO of Hilltop, said, “The second quarter 2017 results continued to demonstrate the benefit of our diversified business model with seasonal strength in the mortgage origination segment, offset by expected seasonal storm activity in the insurance segment. Our strong balance sheet and earnings enabled us to return $14.6 million of capital to shareholders during the quarter.”

 

Alan White, Co-CEO of Hilltop, added, “We continue to focus on improving the long-term fundamental drivers of our businesses. PlainsCapital Bank maintained a stable net interest margin and sound credit quality. PrimeLending grew home purchase origination volumes compared to the second quarter of 2016. HilltopSecurities achieved a pre-tax margin of 15.3% and provided $1.3 billion of core deposits to PlainsCapital Bank. Despite an active spring storm season, National Lloyds reported a modest improvement in its loss and LAE ratio.”

 

Second Quarter 2017 Highlights for Hilltop:

 

·

Hilltop’s total assets were $13.3 billion at June 30, 2017, compared to $12.3 billion at March 31, 2017;

·

Hilltop’s common equity increased by $4.1 million from March 31, 2017 to $1.9 billion at June 30, 2017;

·

Non-covered loans1 held for investment, net of allowance for loan losses, increased by  5.8% to $6.1 billion and covered loans1, net of allowance for loan losses, decreased by 12.3% to $205.9 million at June 30, 2017 from March 31, 2017;

·

Non-covered non-performing loans increased to $29.5 million, or 0.36% of total non-covered loans, at June 30, 2017, compared to $28.8 million, or 0.41% of total non-covered loans, at March 31, 2017;

·

Energy classified and criticized loans were $26.9 million at June 30, 2017,  slightly up from  $26.5 million at March 31, 2017;

·

Loans held for sale increased by 50.5% to $2.0 billion from March 31, 2017 to June 30, 2017;

·

Total deposits were $7.6 billion at June 30, 2017, compared to $7.3 billion at March 31, 2017;

·

Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio2 of 13.07% and a Common Equity Tier 1 Capital Ratio of 17.53% at June 30, 2017;

Y:\HTH Branding-Logo\HTH Vertical Logo - Color.jpg


 

·

Hilltop’s net interest margin3 increased to 4.04%  for the  second quarter of 2017, from 3.52% in the first quarter of 2017;

·

The provision for loan losses was $5.9 million during the second quarter of 2017, compared to $1.7 million in the first quarter of 2017;  

·

For the second quarter of 2017, noninterest income was $344.7 million, compared to $346.0 million in the second quarter of 2016,  a 0.4%  decrease, and included significant non-recurring items related to the following: 

o

During the second quarter of 2017, the recognition within corporate of a pre-tax net increase to other noninterest income of $11.6 million related to the resolution of the appraisal proceedings from  the SWS Merger;

o

During the second quarter of 2017, the Bank recorded an insurance receivable and related increase to other noninterest income of $15.0 million from coverage provided by an insurance policy for forgery related to a single, large loan of $24.5 million previously charged-off during the second quarter of 2016; 

·

For the second quarter of 2017, noninterest expense was $366.3 million, compared to $367.4 million in the second quarter of 2016, a 0.3%  decrease; and

·

National Lloyds Corporation paid off its $20.0 million insurance company note payable due March 2035.

 


1   “Covered loans” refer to loans acquired in the FNB Transaction that are subject to loss-share agreements with the FDIC, while all other loans are referred to as “non-covered loans.”

2   Based on the end of period Tier 1 capital divided by total average assets during  2017, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(in 000's)

    

2017

    

2017

    

2016

    

2016

    

2016

Cash and due from banks

 

$

405,938

 

$

545,928

 

$

669,357

 

$

528,519

 

$

583,984

Federal funds sold

 

 

388

 

 

24,404

 

 

21,407

 

 

40,419

 

 

29,677

Securities purchased under agreements to resell

 

 

125,188

 

 

113,228

 

 

89,430

 

 

138,284

 

 

149,474

Assets segregated for regulatory purposes

 

 

167,565

 

 

166,395

 

 

180,993

 

 

173,840

 

 

120,214

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading, at fair value

 

 

471,485

 

 

373,300

 

 

265,534

 

 

402,104

 

 

305,418

Available for sale, at fair value

 

 

763,206

 

 

755,546

 

 

598,007

 

 

563,720

 

 

517,784

Held to maturity, at amortized cost

 

 

359,847

 

 

337,357

 

 

351,831

 

 

365,934

 

 

354,443

 

 

 

1,594,538

 

 

1,466,203

 

 

1,215,372

 

 

1,331,758

 

 

1,177,645

Loans held for sale

 

 

2,000,257

 

 

1,329,493

 

 

1,795,463

 

 

1,673,069

 

 

1,550,475

Non-covered loans, net of unearned income

 

 

6,118,211

 

 

5,783,853

 

 

5,843,499

 

 

5,674,655

 

 

5,472,446

Allowance for non-covered loan losses

 

 

(59,208)

 

 

(55,157)

 

 

(54,186)

 

 

(52,625)

 

 

(51,013)

Non-covered loans, net

 

 

6,059,003

 

 

5,728,696

 

 

5,789,313

 

 

5,622,030

 

 

5,421,433

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Covered loans, net of allowance for covered loan losses

 

 

205,877

 

 

234,681

 

 

255,714

 

 

292,031

 

 

322,073

Broker-dealer and clearing organization receivables

 

 

1,552,525

 

 

1,574,031

 

 

1,497,741

 

 

1,340,617

 

 

2,257,480

Premises and equipment, net

 

 

183,994

 

 

184,091

 

 

190,361

 

 

190,645

 

 

189,511

FDIC indemnification asset

 

 

40,304

 

 

47,940

 

 

71,313

 

 

73,351

 

 

74,460

Covered other real estate owned

 

 

42,304

 

 

45,374

 

 

51,642

 

 

61,988

 

 

67,634

Other assets

 

 

618,368

 

 

583,554

 

 

613,453

 

 

657,805

 

 

832,344

Goodwill

 

 

251,808

 

 

251,808

 

 

251,808

 

 

251,808

 

 

251,808

Other intangible assets, net

 

 

40,516

 

 

42,601

 

 

44,695

 

 

47,112

 

 

49,690

Total assets

 

$

13,288,573

 

$

12,338,427

 

$

12,738,062

 

$

12,423,276

 

$

13,077,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing

 

$

2,251,208

 

$

2,272,905

 

$

2,199,483

 

$

2,232,813

 

$

2,280,108

Interest bearing

 

 

5,323,414

 

 

5,056,957

 

 

4,864,328

 

 

4,797,772

 

 

4,846,705

Total deposits

 

 

7,574,622

 

 

7,329,862

 

 

7,063,811

 

 

7,030,585

 

 

7,126,813

Broker-dealer and clearing organization payables

 

 

1,395,314

 

 

1,437,548

 

 

1,347,128

 

 

1,251,839

 

 

2,111,994

Short-term borrowings

 

 

1,515,069

 

 

753,777

 

 

1,417,289

 

 

1,265,022

 

 

1,012,862

Securities sold, not yet purchased, at fair value

 

 

149,869

 

 

144,193

 

 

153,889

 

 

164,633

 

 

178,235

Notes payable

 

 

300,283

 

 

324,701

 

 

317,912

 

 

313,313

 

 

319,636

Junior subordinated debentures

 

 

67,012

 

 

67,012

 

 

67,012

 

 

67,012

 

 

67,012

Other liabilities

 

 

393,351

 

 

392,025

 

 

496,501

 

 

481,504

 

 

464,904

Total liabilities

 

 

11,395,520

 

 

10,449,118

 

 

10,863,542

 

 

10,573,908

 

 

11,281,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

963

 

 

984

 

 

985

 

 

985

 

 

985

Additional paid-in capital

 

 

1,529,903

 

 

1,570,329

 

 

1,572,877

 

 

1,570,025

 

 

1,568,053

Accumulated other comprehensive income

 

 

2,112

 

 

897

 

 

485

 

 

8,039

 

 

8,782

Retained earnings

 

 

356,564

 

 

313,197

 

 

295,568

 

 

266,048

 

 

214,116

Deferred compensation employee stock trust, net

 

 

845

 

 

893

 

 

903

 

 

900

 

 

938

Employee stock trust

 

 

(248)

 

 

(300)

 

 

(309)

 

 

(309)

 

 

(347)

Total Hilltop stockholders' equity

 

 

1,890,139

 

 

1,886,000

 

 

1,870,509

 

 

1,845,688

 

 

1,792,527

Noncontrolling interests

 

 

2,914

 

 

3,309

 

 

4,011

 

 

3,680

 

 

3,919

Total stockholders' equity

 

 

1,893,053

 

 

1,889,309

 

 

1,874,520

 

 

1,849,368

 

 

1,796,446

Total liabilities & stockholders' equity

 

$

13,288,573

 

$

12,338,427

 

$

12,738,062

 

$

12,423,276

 

$

13,077,902

Y:\HTH Branding-Logo\HTH Vertical Logo - Color.jpg


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Consolidated Income Statements

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

(in 000's, except per share data)

    

2017

    

2017

    

2016

    

2016

    

2016

    

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

113,793

 

$

89,991

 

$

102,046

 

$

97,590

 

$

98,468

 

Securities borrowed

 

 

9,597

 

 

8,053

 

 

6,566

 

 

9,037

 

 

6,326

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Taxable

 

 

9,539

 

 

7,027

 

 

7,097

 

 

5,935

 

 

6,834

 

 Tax-exempt

 

 

1,375

 

 

1,244

 

 

1,530

 

 

1,518

 

 

1,537

 

Other

 

 

2,002

 

 

1,926

 

 

1,096

 

 

1,183

 

 

1,037

 

Total interest income

 

 

136,306

 

 

108,241

 

 

118,335

 

 

115,263

 

 

114,202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

5,464

 

 

4,690

 

 

3,971

 

 

3,996

 

 

4,037

 

Securities loaned

 

 

7,481

 

 

6,340

 

 

4,653

 

 

6,954

 

 

4,916

 

Short-term borrowings

 

 

3,648

 

 

1,418

 

 

1,829

 

 

1,497

 

 

1,392

 

Notes payable

 

 

2,826

 

 

2,814

 

 

2,856

 

 

2,793

 

 

2,618

 

Junior subordinated debentures

 

 

744

 

 

711

 

 

703

 

 

673

 

 

655

 

Other

 

 

167

 

 

168

 

 

199

 

 

180

 

 

187

 

Total interest expense

 

 

20,330

 

 

16,141

 

 

14,211

 

 

16,093

 

 

13,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

115,976

 

 

92,100

 

 

104,124

 

 

99,170

 

 

100,397

 

Provision for loan losses

 

 

5,853

 

 

1,705

 

 

4,347

 

 

3,990

 

 

28,876

 

Net interest income after provision for loan losses

 

 

110,123

 

 

90,395

 

 

99,777

 

 

95,180

 

 

71,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gains (losses) on securities

 

 

14

 

 

 —

 

 

 —

 

 

 —

 

 

(46)

 

Net gains from sale of loans and other mortgage production income

 

 

153,688

 

 

124,150

 

 

137,270

 

 

175,412

 

 

167,012

 

Mortgage loan origination fees

 

 

25,976

 

 

19,556

 

 

24,850

 

 

26,807

 

 

25,797

 

Securities commissions and fees

 

 

37,804

 

 

39,057

 

 

39,425

 

 

39,722

 

 

40,442

 

Investment and securities advisory fees and commissions

 

 

25,537

 

 

22,202

 

 

31,690

 

 

31,129

 

 

29,354

 

Net insurance premiums earned

 

 

36,020

 

 

36,140

 

 

38,344

 

 

38,747

 

 

38,721

 

Other

 

 

65,653

 

 

30,334

 

 

37,548

 

 

42,641

 

 

44,725

 

Total noninterest income

 

 

344,692

 

 

271,439

 

 

309,127

 

 

354,458

 

 

346,005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees' compensation and benefits

 

 

214,413

 

 

186,559

 

 

208,760

 

 

225,194

 

 

217,398

 

Occupancy and equipment, net

 

 

27,919

 

 

27,293

 

 

27,154

 

 

27,460

 

 

26,971

 

Loss and loss adjustment expenses

 

 

33,184

 

 

21,700

 

 

14,018

 

 

16,055

 

 

37,211

 

Policy acquisition and other underwriting expenses

 

 

11,251

 

 

11,229

 

 

10,757

 

 

11,064

 

 

11,316

 

Other

 

 

79,484

 

 

73,711

 

 

95,095

 

 

84,360

 

 

74,469

 

Total noninterest expense

 

 

366,251

 

 

320,492

 

 

355,784

 

 

364,133

 

 

367,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

88,564

 

 

41,342

 

 

53,120

 

 

85,505

 

 

50,161

 

Income tax expense

 

 

25,754

 

 

15,035

 

 

17,582

 

 

33,017

 

 

18,439

 

Net income

 

 

62,810

 

 

26,307

 

 

35,538

 

 

52,488

 

 

31,722

 

Less: Net income (loss) attributable to noncontrolling interest

 

 

334

 

 

(127)

 

 

217

 

 

556

 

 

648

 

Income attributable to Hilltop

 

$

62,476

 

$

26,434

 

$

35,321

 

$

51,932

 

$

31,074

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.64

 

$

0.27

 

$

0.36

 

$

0.53

 

$

0.32

 

Diluted

 

$

0.63

 

$

0.27

 

$

0.36

 

$

0.53

 

$

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.06

 

$

0.06

 

$

0.06

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

98,154

 

 

98,441

 

 

98,514

 

 

98,490

 

 

98,457

 

Diluted

 

 

98,414

 

 

98,757

 

 

98,810

 

 

98,625

 

 

98,586

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2017

Segment Results

 

 

 

 

 

 

 

Mortgage

    

 

    

 

 

    

All Other and

    

Hilltop

(in 000's)

    

Banking

    

Broker-Dealer

    

Origination

    

Insurance

    

Corporate

    

Eliminations

    

Consolidated

Net interest income (expense)

 

$

102,191

 

$

10,349

 

$

996

 

$

602

 

$

(2,288)

 

$

4,126

 

$

115,976

Provision for loan losses

 

 

5,405

 

 

448

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

5,853

Noninterest income

 

 

25,499

 

 

92,810

 

 

179,637

 

 

38,413

 

 

12,608

 

 

(4,275)

 

 

344,692

Noninterest expense

 

 

62,511

 

 

86,901

 

 

161,369

 

 

49,416

 

 

6,298

 

 

(244)

 

 

366,251

Income (loss) before income taxes

 

$

59,774

 

$

15,810

 

$

19,264

 

$

(10,401)

 

$

4,022

 

$

95

 

$

88,564

 

 

Y:\HTH Branding-Logo\HTH Vertical Logo - Color.jpg


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

Selected Financial Data

    

2017

    

2017

    

2016

    

2016

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hilltop Consolidated:

 

 

   

 

 

   

 

 

 

 

 

 

 

 

 

Return on average stockholders' equity

 

 

13.24%

 

 

5.73%

 

 

7.56%

 

 

11.41%

 

 

7.07%

Return on average assets

 

 

1.94%

 

 

0.88%

 

 

1.13%

 

 

1.69%

 

 

1.05%

Net interest margin (1)

 

 

4.04%

 

 

3.52%

 

 

3.80%

 

 

3.65%

 

 

3.77%

Net interest margin (taxable equivalent) (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

 

4.05%

 

 

3.54%

 

 

3.82%

 

 

3.67%

 

 

3.80%

Impact of purchase accounting

 

 

82 bps

 

 

49 bps

 

 

71 bps

 

 

64 bps

 

 

72 bps

Book value per common share ($)

 

 

19.62

 

 

19.17

 

 

18.98

 

 

18.73

 

 

18.20

Shares outstanding, end of period (000's)

 

 

96,333

 

 

98,407

 

 

98,544

 

 

98,541

 

 

98,498

Dividend payout ratio (3)

 

 

9.43%

 

 

22.30%

 

 

16.71%

 

 

0.00%

 

 

0.00%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (1)

 

 

4.80%

 

 

4.21%

 

 

4.57%

 

 

4.50%

 

 

4.85%

Net interest margin (taxable equivalent) (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

 

4.81%

 

 

4.23%

 

 

4.59%

 

 

4.53%

 

 

4.87%

Impact of purchase accounting

 

 

112 bps

 

 

67 bps

 

 

96 bps

 

 

90 bps

 

 

104 bps

Accretion of discount on loans ($000's)

 

 

23,164

 

 

12,098

 

 

17,926

 

 

15,969

 

 

17,344

Non-covered net charge-offs (recoveries) ($000's)

 

 

842

 

 

238

 

 

3,083

 

 

3,107

 

 

26,130

Return on average assets

 

 

1.63%

 

 

0.94%

 

 

1.09%

 

 

1.09%

 

 

0.66%

Fee income ratio

 

 

19.97%

 

 

13.13%

 

 

12.57%

 

 

12.31%

 

 

12.67%

Efficiency ratio

 

 

48.96%

 

 

64.36%

 

 

59.00%

 

 

59.59%

 

 

52.32%

Employees' compensation and benefits ($000's)

 

 

31,790

 

 

31,512

 

 

32,350

 

 

31,167

 

 

30,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-Dealer Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees' compensation and benefits ($000's)

 

 

62,840

 

 

57,240

 

 

62,929

 

 

68,051

 

 

63,976

Variable compensation expense ($000's)

 

 

36,556

 

 

30,808

 

 

37,984

 

 

42,446

 

 

38,750

Compensation as a % of net revenue

 

 

60.9%

 

 

62.9%

 

 

58.6%

 

 

61.1%

 

 

58.0%

Pre-tax margin

 

 

15.33%

 

 

10.45%

 

 

-0.02%

 

 

15.65%

 

 

16.58%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Origination Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loan originations - volume ($000's):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home purchases

 

 

3,502,128

 

 

2,269,138

 

 

2,772,316

 

 

3,191,851

 

 

3,261,386

Refinancings

 

 

555,956

 

 

555,193

 

 

1,115,764

 

 

1,300,702

 

 

889,078

 Total mortgage loan originations - volume

 

 

4,058,084

 

 

2,824,331

 

 

3,888,080

 

 

4,492,553

 

 

4,150,464

Mortgage loan sales - volume ($000's)

 

 

3,385,260

 

 

3,275,167

 

 

3,723,751

 

 

4,349,794

 

 

3,964,190

Mortgage servicing rights asset ($000's) (4)

 

 

43,580

 

 

45,573

 

 

61,968

 

 

43,751

 

 

33,491

Employees' compensation and benefits ($000's)

 

 

115,189

 

 

89,958

 

 

106,894

 

 

120,548

 

 

117,537

Variable compensation expense ($000's)

 

 

71,877

 

 

46,906

 

 

64,809

 

 

75,271

 

 

74,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio

 

 

92.1%

 

 

60.0%

 

 

36.6%

 

 

41.4%

 

 

96.1%

Expense ratio

 

 

39.7%

 

 

38.4%

 

 

33.2%

 

 

33.6%

 

 

33.9%

Combined ratio

 

 

131.8%

 

 

98.4%

 

 

69.8%

 

 

75.0%

 

 

130.0%

Employees' compensation and benefits ($000's)

 

 

2,786

 

 

2,780

 

 

2,262

 

 

2,401

 

 

2,304

 


(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 a 35% federal income tax rate. 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. For the periods presented, the taxable equivalent adjustments to interest income for Hilltop Consolidated were $0.5 million, $0.5 million, $0.6 million, $0.5 million, and $0.6 million, respectively, and for the Banking Segment were $0.4 million, $0.4 million, $0.4 million, $0.4 million, and $0.5 million, respectively.

(3)

Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share.

(4)

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

   

2017

   

2017

    

2016

    

2016

    

2016

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

12.11%

 

 

13.09%

 

 

12.35%

 

 

12.65%

 

 

12.72%

Hilltop

 

 

13.07%

 

 

13.98%

 

 

13.51%

 

 

13.41%

 

 

13.18%

Common equity Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

13.95%

 

 

15.50%

 

 

14.64%

 

 

15.15%

 

 

14.71%

Hilltop

 

 

17.53%

 

 

19.03%

 

 

18.30%

 

 

17.80%

 

 

16.67%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

13.95%

 

 

15.50%

 

 

14.64%

 

 

15.15%

 

 

14.77%

Hilltop

 

 

18.07%

 

 

19.62%

 

 

18.87%

 

 

18.37%

 

 

17.26%

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

14.72%

 

 

16.30%

 

 

15.38%

 

 

15.90%

 

 

15.51%

Hilltop

 

 

18.57%

 

 

20.12%

 

 

19.34%

 

 

18.82%

 

 

17.69%

 

 

 

 

 

Y:\HTH Branding-Logo\HTH Vertical Logo - Color.jpg


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

Non-Covered Non-Performing Loans Portfolio Data

    

2017

    

2017

    

2016

    

2016

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered loans accounted for on a non-accrual basis ($000's):

 

 

   

 

 

   

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

13,818

 

 

13,490

 

 

9,515

 

 

19,651

 

 

18,412

Real estate

 

 

14,877

 

 

14,437

 

 

13,932

 

 

4,817

 

 

4,777

Construction and land development

 

 

632

 

 

661

 

 

755

 

 

703

 

 

139

Consumer

 

 

208

 

 

223

 

 

244

 

 

50

 

 

61

Broker-dealer

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 

29,535

 

 

28,811

 

 

24,446

 

 

25,221

 

 

23,389

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered non-performing loans as a % of total non-covered loans

 

 

0.36%

 

 

0.41%

 

 

0.32%

 

 

0.34%

 

 

0.33%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered other real estate owned ($000's)

 

 

4,591

 

 

4,556

 

 

4,507

 

 

3,063

 

 

2,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other repossessed assets ($000's)

 

 

723

 

 

681

 

 

1,117

 

 

1,654

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered non-performing assets ($000's)

 

 

34,849

 

 

34,048

 

 

30,070

 

 

29,938

 

 

26,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered non-performing assets as a % of total assets

 

 

0.26%

 

 

0.28%

 

 

0.24%

 

 

0.24%

 

 

0.20%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered non-PCI loans past due 90 days or more and still accruing ($000's)

 

 

48,757

 

 

42,767

 

 

47,486

 

 

41,824

 

 

50,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Troubled debt restructurings included in accruing non-covered loans ($000's)

 

 

1,170

 

 

1,180

 

 

1,196

 

 

1,216

 

 

1,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

PlainsCapital Bank - Energy Exposure

     

2017

   

2017

    

2016

  

2016

   

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Select Energy Statistics

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

Outstanding energy loan balance ($MM)

 

 

158.2

 

 

149.1

 

 

166.5

 

 

168.8

 

 

223.6

 

Energy unfunded commitments ($MM)

 

 

121.9

 

 

130.4

 

 

121.4

 

 

120.7

 

 

88.5

 

Energy loans as a % of total loans

 

 

2.7%

 

 

2.7%

 

 

3.0%

 

 

3.1%

 

 

4.2%

 

Classified and criticized energy loans ($MM):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Criticized energy loans

 

 

0.0

 

 

0.0

 

 

0.0

 

 

1.8

 

 

12.7

 

Performing classified energy loans

 

 

23.6

 

 

22.5

 

 

23.5

 

 

24.2

 

 

22.1

 

Non-performing classified energy loans

 

 

3.3

 

 

4.0

 

 

5.2

 

 

13.4

 

 

6.7

 

 

 

 

26.9

 

 

26.5

 

 

28.7

 

 

39.4

 

 

41.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unimpaired energy reserves ($MM)

 

 

11.3

 

 

10.6

 

 

10.6

 

 

10.0

 

 

9.8

 

Energy reserves as a % of energy loans

 

 

7.1%

 

 

7.1%

 

 

6.5%

 

 

6.7%

 

 

4.7%

 

Energy NCOs ($MM)

 

 

0.0

 

 

0.0

 

 

1.5

 

 

1.0

 

 

0.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy Portfolio Breakdown

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and production

 

 

14%

 

 

13%

 

 

11%

 

 

13%

 

 

10%

 

Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Field services

 

 

22%

 

 

24%

 

 

22%

 

 

26%

 

 

22%

 

Pipeline construction

 

 

22%

 

 

22%

 

 

21%

 

 

21%

 

 

15%

 

 

 

 

44%

 

 

46%

 

 

43%

 

 

47%

 

 

37%

 

Midstream:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

16%

 

 

18%

 

 

30%

 

 

21%

 

 

38%

 

Transportation

 

 

9%

 

 

10%

 

 

9%

 

 

11%

 

 

9%

 

 

 

 

25%

 

 

28%

 

 

39%

 

 

32%

 

 

47%

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesalers

 

 

1%

 

 

1%

 

 

1%

 

 

1%

 

 

1%

 

Equipment rentals

 

 

0%

 

 

0%

 

 

0%

 

 

0%

 

 

0%

 

Equipment wholesalers

 

 

16%

 

 

12%

 

 

6%

 

 

7%

 

 

5%

 

Total

 

 

100%

 

 

100%

 

 

100%

 

 

100%

 

 

100%

 

 

 

Y:\HTH Branding-Logo\HTH Vertical Logo - Color.jpg


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

2017

 

2016

 

 

    

Average

    

Interest

    

Annualized

    

Average

    

Interest

    

Annualized

    

 

 

Outstanding

 

Earned or

 

Yield or

 

Outstanding

 

Earned or

 

Yield or

 

 

 

Balance

 

Paid

 

Rate

 

Balance

 

Paid

 

Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, gross (1)

 

$

7,794,300

 

$

113,794

 

5.81

%  

$

7,038,518

 

$

98,468

 

5.56

%  

Investment securities - taxable

 

 

1,399,402

 

 

9,516

 

2.72

%  

 

1,080,097

 

 

6,813

 

2.53

%  

Investment securities - non-taxable (2)

 

 

232,340

 

 

1,903

 

3.28

%  

 

291,288

 

 

2,166

 

2.98

%  

Federal funds sold and securities purchased under agreements to resell

 

 

147,179

 

 

27

 

0.07

%  

 

144,820

 

 

36

 

0.10

%  

Interest-bearing deposits in other financial institutions

 

 

381,100

 

 

885

 

0.93

%  

 

388,520

 

 

484

 

0.50

%  

Securities borrowed

 

 

1,512,222

 

 

9,597

 

2.51

%  

 

1,702,286

 

 

6,327

 

1.49

%  

Other

 

 

81,230

 

 

1,113

 

5.49

%  

 

58,081

 

 

537

 

3.72

%  

Interest-earning assets, gross (2)

 

 

11,547,773

 

 

136,835

 

4.72

%  

 

10,703,610

 

 

114,831

 

4.27

%  

Allowance for loan losses

 

 

(57,976)

 

 

 

 

 

 

 

(51,247)

 

 

 

 

 

 

Interest-earning assets, net

 

 

11,489,797

 

 

 

 

 

 

 

10,652,363

 

 

 

 

 

 

Noninterest-earning assets

 

 

1,529,020

 

 

 

 

 

 

 

1,523,095

 

 

 

 

 

 

Total assets

 

$

13,018,817

 

 

 

 

 

 

$

12,175,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

5,140,116

 

$

5,464

 

0.43

%  

$

4,821,695

 

$

4,037

 

0.34

%  

Securities loaned

 

 

1,388,897

 

 

7,481

 

2.16

%  

 

1,626,021

 

 

4,916

 

1.22

%  

Notes payable and other borrowings

 

 

1,708,241

 

 

7,386

 

1.72

%  

 

1,096,007

 

 

4,852

 

1.78

%  

Total interest-bearing liabilities

 

 

8,237,254

 

 

20,331

 

0.99

%  

 

7,543,723

 

 

13,805

 

0.73

%  

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

2,273,533

 

 

 

 

 

 

 

2,203,065

 

 

 

 

 

 

Other liabilities

 

 

612,712

 

 

 

 

 

 

 

657,435

 

 

 

 

 

 

Total liabilities

 

 

11,123,499

 

 

 

 

 

 

 

10,404,223

 

 

 

 

 

 

Stockholders’ equity

 

 

1,893,052

 

 

 

 

 

 

 

1,768,717

 

 

 

 

 

 

Noncontrolling interest

 

 

2,266

 

 

 

 

 

 

 

2,518

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

13,018,817

 

 

 

 

 

 

$

12,175,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (2)

 

 

 

 

$

116,504

 

 

 

 

 

 

$

101,026

 

 

 

Net interest spread (2)

 

 

 

 

 

 

 

3.73

%  

 

 

 

 

 

 

3.53

%  

Net interest margin (2)

 

 

 

 

 

 

 

4.05

%  

 

 

 

 

 

 

3.80

%  


(1)

Average balance includes non-accrual loans.

(2)

Presented on a taxable equivalent basis with annualized taxable equivalent adjustments based on a 35% federal income tax rate. The adjustment to interest income was $0.5 million and $0.6  million for the  three months ended June 30, 2017 and 2016, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday,  July 28, 2017. Hilltop Co-CEOs Jeremy B. Ford and Alan B. White and other key management members will review second quarter 2017 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, 2017, Hilltop employed approximately 5,500 people and operated approximately 465 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,

Y:\HTH Branding-Logo\HTH Vertical Logo - Color.jpg


 

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 and 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.

 

Source: Hilltop Holdings Inc.

 

Y:\HTH Branding-Logo\HTH Vertical Logo - Color.jpg