Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q4 2015 Earnings Presentation
22 slides from Hilltop's earnings presentation, Feb 24, 2016
Slide 1: Forward-Looking Statements
Preface 200 Crescent Court, Suite 1330 Dallas, TX 75201 Phone: (214) 855-2177 Fax: (817) 887-1687 www.hilltop-holdings.com Please contact: Isabell Novakov Phone: (214) 252-4029 Email: inovakov@plainscapital.com FORWARD-LOOKING STATEMENTS This presentation and statements made by representatives of Hi
Slide 2: Hilltop Holdings – Q4 2015 Highlights
Hilltop Holdings – Q4 2015 Highlights • For the fourth quarter of 2015, net income to common stockholders was $20.7 million, or $0.21 per diluted share • Fourth quarter 2015 adjusted net income1 was $33.4 million, or $0.34 per diluted share, when excluding the transaction and integration costs relat
Slide 3: Hilltop Holdings – Financial Summary
Hilltop Holdings – Financial Summary Notes: (1) (2) NPLs, NPAs and Total Loans exclude covered loans and covered OREO Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible ass ets 4 Selected ItemsQ4 2014Q3 2015Q4 2015FY 2014FY
Slide 4: Hilltop Holdings – Net Interest Income & Margin
Hilltop Holdings – Net Interest Income & Margin • Stated NIM declined by 47 bps in Q4 2015 to 3.73% compared with 4.20% in Q3 2015 primarily due to the favorable resolution of certain significant loan relationships that increased yields earned on loans in Q3 2015 • Increased yields in securities len
Slide 5: Hilltop Holdings – Noninterest Income
Hilltop Holdings – Noninterest Income • • Noninterest income for Q4 2015 was $276.9 million, up 29.5% versus Q4 2014 Net gains from the sale of loans, other mortgage production income, and mortgage loan origination fees increased $20.9 million, or 18.6%, from Q4 2014 to $133.6 million in Q4 2015, re
Slide 6: Hilltop Holdings – Noninterest Expense
Hilltop Holdings – Noninterest Expense • • Noninterest expense was $338.7 million in Q4 2015, up 37.3% from Q4 2014 Compensation increased $49.0 million, or 36.8%, from Q4 2014 to $182.5 million in Q4 2015 (primarily due to the SWS Merger and increased mortgage volume), representing 54% of nonintere
Slide 7: Hilltop Holdings – Balance Sheet
Hilltop Holdings – Balance Sheet • Assets were slightly down, as growth in non-covered loans and loans HFS was more than offset by a decline in broker-dealer & clearing receivables and covered loans Gross non-covered loans HFI increased $220.5 million, or 4.4%, from Q3 2015 to $5.2 billion at Q4 201
Slide 8: Company Operational Updates
Company Operational Updates Note: Market share per Mortgage Bankers Association as of January 20, 2016 9 PlainsCapital Bank •Q4 2015 ROAA of 1.07% driven by strong net interest margin of 4.92% (3.73% Pre-PAA) •Non-covered HFI loan (excluding margin loans) growth of 22% annualized for Q4 2015; favora
Slide 9: Company Operational Updates
Company Operational Updates Note: (1) See appendix for reconciliation of reported pre-tax income to adjusted pre-tax income as presented 10 Hilltop Securities Holdings •Net revenue increased $7.4 million (8.1%) to $99.6 million in Q4 2015 compared to Q3 2015 – primarily driven by increased revenue i
Slide 10: PlainsCapital Bank – Q4 2015 Highlights
PlainsCapital Bank – Q4 2015 Highlights • Pre-tax income decreased to $34.2 million in Q4 2015 versus $41.1 million in Q4 2014 primarily due to an increase in noninterest expense Net interest income was driven by non-covered loan growth, accretion and improving core NIM (pre-PAA) Noninterest income
Slide 11: PlainsCapital Bank – Energy Exposure
PlainsCapital Bank – Energy Exposure Note: (1) Total loans equal to HTH consolidated gross covered and non-covered loans HFI less margin loans held at the broker-dealer 12 Energy Portfolio BreakdownQ3 2015Q4 2015 Exploration and Production Field Services Pipeline Construction Services Distribution T
Slide 12: PlainsCapital Bank – Credit Quality and Capital Ratios
PlainsCapital Bank – Credit Quality and Capital Ratios $50.0 20.00% 18.13% $45.0 18.00% 17.19% 17.17% 16.99% 17.36% $40.0 16.00% 16.46% 16.46% 16.25% 14.45% $35.0 14.00% $32.8 $31.2 13.74% $30.0 13.22% $30.0 12.00% 12.77% 12.17% 11.34% $25.0 $23.2 10.00% 10.31% $20.0 8.00% $15.0 6.00% $10.0 4.00% $5
Slide 13: PlainsCapital Bank – Loan Portfolio by Classification
PlainsCapital Bank – Loan Portfolio by Classification C&I C&I 3% C&D 6% C&D 9% 1% Real Estate 87% Real Estate 93% Q4 2015 Total: $158.3 million Q4 2015 Total: $222.0 million Consumer 1% Consumer 1% C&D 7% C&D 14% C&I 19% C&I 42% Real Estate 44% Real Estate 73% Q4 2015 Total: $72.1 million Q4 2015 To
Slide 14: PlainsCapital Bank – PCI Loans at Dec. 31, 2015
PlainsCapital Bank – PCI Loans at Dec. 31, 2015 • Purchased Credit Impaired (“PCI”) loans are loans with evidence of credit quality deterioration, for which it is probable that not all contractually required payments will be collected • PCI loans include covered and non-covered loans • PCI loans had
Slide 15: PlainsCapital Bank – Non-PCI Loans at Dec. 31, 2015
PlainsCapital Bank – Non-PCI Loans at Dec. 31, 2015 • Non-PCI loans include newly originated loans, acquired loans without credit impairment at acquisition, and acquired loans that have renewed • Non-PCI loans include covered loans and non-covered loans • Portfolio on balance sheet at 98.6% unpaid p
Slide 16: PrimeLending – Q4 2015 Highlights
PrimeLending – Q4 2015 Highlights • Pre-tax income grew to $3.8 million in Q4 2015 versus a pre-tax loss of $4.9 million in Q4 2014 due to higher origination volumes Origination volume of $3.1 billion in Q4 2015 was $353 million greater than Q4 2014 due to growth in both refinance and purchase busin
Slide 17: Hilltop Securities Holdings – Q4 2015 Highlights
Hilltop Securities Holdings – Q4 2015 Highlights • Q4 2015 includes operations of SWS, though Q4 2014 includes only FSW Pre-tax income of $3.7 million in Q4 2015 versus pre-tax income of $5.1 million in Q4 2014; however, continued improvement in profitability since the SWS merger • Q4 2015 results i
Slide 18: National Lloyds Corporation – Q4 2015 Highlights
National Lloyds Corporation – Q4 2015 Highlights • Pre-tax income of $7.0 million in Q4 2015 relative to $11.6 million in Q4 2014 • Written premium and policies in force fell as focus remains on profitability and core products • Severe weather in North Texas in late December drove Loss and LAE ratio
Slide 19: National Lloyds Corporation — Q4 2015 Highlights
National Lloyds Corporation — Q4 2015 Highlights + Pre-tax income of $7.0 million in Q4 2015 relative to $11.6 million in Qq 2014 Net fnterest come 104689 187 + Written premium and policies in force fell as focus Provision for Loan Losses E E E : remains on profitability and core products Seats trec
Slide 20: Appendix
Appendix 21
Slide 21: Non-GAAP to GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
Hilltop Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures Hilltop presents one measure on page ten and eighteen and two measures on page three of this presentation that are not measures of financial performance recognized by generally accepted accounting pri
Slide 22: Non-GAAP to GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
Hilltop Non-GAAP to GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures Hilltop presents one measure on page ten and eighteen and two measures on page three of this presentation that are not measures of financial performance recognized by generally accepted accounting pri