Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q3 2013 Earnings Presentation
20 slides from Hilltop's earnings presentation, Nov 12, 2013
Slide 1: Hilltop Holdings Inc. Q3 2013 Earnings Presentation
Hilltop Holdings Inc. Q3 2013 Earnings Presentation Investor Presentation | November 12, 2013
Slide 2: Preface and Forward-Looking Statements
Preface 2 200 Crescent Court Suite 1330 Dallas, TX 75201 Phone: (214) 855-2177 Fax: (817) 887-1687 www.hilltop-holdings.com Anyone desiring additional information may contact: Isabell Novakov Phone: (214) 252-4029 Email: inovakov@plainscapital.com FORWARD-LOOKING STATEMENTS This presentation and sta
Slide 3: Hilltop Holdings – Q3 2013 Highlights
3 Hilltop Holdings – Q3 2013 Highlights GAAP net income to common stockholders for Hilltop Holdings (“Hilltop”) was $31.8 million or $0.36 diluted earnings per share Return on average equity improved to 10.92%, up from 7.29% in Q2 2013 Return on average assets improved to 1.73%, up from 1.24% in Q2
Slide 4: Hilltop Holdings – Linked Quarter Summary Financial Highlights
4 Hilltop Holdings – Linked Quarter Summary Financial Highlights 2013Q3 2013Q2 Change % Change EPS - Diluted ($) 0.36 0.24 0.12 50.0% Book Value Per Share ($) 13.00 12.59 0.41 3.3% NIM 4.45% 4.33% 12 bps 2.8% Assets ($000) 9,093,592 7,402,803 1,690,789 22.8% Loans, Gross ($000) 4,406,814 3,253,001 1
Slide 5: First National Bank – Transaction Update
First National Bank – Transaction Update 5 Acquired $1.7 billion of loans & REO, of which 97% are covered by FDIC loss share agreements Loss share agreements with 3 tranches: Tranche 1 max of $240.4 million; FDIC covers 80% of losses Tranche 2 max of $365.7 million; FDIC covers 0% of losses Tranche
Slide 6: Hilltop Holdings – Net Interest Income & Margin
6 Hilltop Holdings – Net Interest Income & Margin NIM expanded by 12 bps to 4.45%, a result of higher loan and securities yields as well as lower cost of funding Yield on earning assets of 4.93% driven by loan yield of 6.03% Cost of interest bearing liabilities of 0.54% resulted from an increase in
Slide 7: Hilltop Holdings – Noninterest Income
7 Hilltop Holdings – Noninterest Income Noninterest income was $205.8 million, down 14.0% from Q2 2013 Revenue from the mortgage segment declined $37.8 million from Q2 2013 to $127.4 million in Q3 2013, representing 62% of total non-interest income Net premiums earned increased to $40.0 million in Q
Slide 8: Hilltop Holdings – Noninterest Expense
8 Hilltop Holdings – Noninterest Expense Noninterest expense was $216.6 million, down 16.8% from Q2 2013 Compensation declined $13.5 million from Q2 2013, or 10.2%, to $119.2 million due to lower variable compensation Loss and LAE declined to $24.6 million in Q3 2013 from $48.2 million in Q2 2013 Am
Slide 9: Hilltop Holdings – Balance Sheet
Hilltop Holdings – Balance Sheet Mortgage Loans HFS declined $366 million as origination volume slowed due to an increase in interest rates Non-Covered Loans HFI increased 2% from Q2 2013 As part of the FNB Transaction, Hilltop added $1.1 billion of covered loans, $119.7 million of covered REO and a
Slide 10: PlainsCapital Corporation – Q3 2013 Highlights
10 PlainsCapital Corporation – Q3 2013 Highlights Banking Highlights ($000) Q2 2013 Q3 2013 Pre-Tax Income 36,664 42,251 Net Interest Income 68,685 70,230 NIM (%) 5.20 5.07 Assets 6,195,775 8,143,611 Tier 1 Leverage Ratio (%) 9.74 11.05 Mortgage Origination Highlights ($000) Q2 2013 Q3 2013 Pre-Tax
Slide 11: PlainsCapital Bank – Texas Deposit Market Share
11 PlainsCapital Bank – Texas Deposit Market Share Source: SNL Financial Deposit data as of June 30, 2013 and pro forma for acquisitions (including Hilltop/FNB) Includes banks & thrifts headquartered in Texas Rank Texas Headquartered Banks & Thrifts Number of Branches Deposits ($mm) Market Share (%)
Slide 12: PlainsCapital Bank – Franchise Overview
12 PlainsCapital Bank – Franchise Overview Source: SNL Financial Deposit/branch data as of June 30, 2013 and pro forma for acquisitions (including Hilltop/FNB) With the addition of FNB, PlainsCapital Bank (“PCB”) is now in all major Texas markets With addition of 51 FNB branches, PCB now has 84 bran
Slide 13: PlainsCapital Bank – Q3 2013 Highlights
13 PlainsCapital Bank – Q3 2013 Highlights Bank’s income before taxes of $42.3 million for Q3 2013 represents $5.6 million increase from Q2 2013 Driven by strong net interest income Total loans HFI increased $1.2 billion from Q2 2013; primarily from FNB Transaction Non-covered loans HFI up $57.2 mil
Slide 14: PCI Loans at Sep. 30, 2013
PCI Loans at Sep. 30, 2013 14 PCI loans are loans with evidence of credit quality deterioration, for which it is probable that all contractually required payments will not be collected PCI loans include: Covered loans – Loans that are subject to the loss share agreement entered into by the Bank and
Slide 15: Non-PCI Loans at Sep. 30, 2013
Non-PCI Loans at Sep. 30, 2013 15 ($000) Covered Non-PCI Non-Covered Non-PCI Total Non-PCI Unpaid Principal Balance (UPB) 346,802 3,216,096 3,562,898 (Discount) / Premium (32,772) (45,096) (77,868) Carrying Value 314,030 3,171,000 3,485,030 Allowance for Loan Loss - (30,169) (30,169) Carrying Value,
Slide 16: PlainsCapital Bank – Loan Portfolio by Classification
PlainsCapital Bank – Loan Portfolio by Classification 16 Covered PCI Loans1 Q3 2013 Total: $782.6 million Covered Non-PCI Loans Q3 2013 Total: $314.0 million Non-Covered PCI Loans1 Q3 2013 Total: $139.2 million Non-Covered Non-PCI Loans Q3 2013 Total: $3,171.0 million Note: Loan classification mix r
Slide 17: PrimeLending – Q3 2013 Highlights
17 PrimeLending – Q3 2013 Highlights Income before taxes declined from lower origination volume and gain on sale spreads Origination volume of $2.9 billion in Q3 2013 Purchase volume remained flat Refinance volume declined to $0.5 billion Mortgage loans HFS decreased by $366.2 million in Q3 2013 to
Slide 18: First Southwest – Q3 2013 Highlights
18 First Southwest – Q3 2013 Highlights Rising interest rates along with increased volatility in fixed income markets in recent months have resulted in: Reduced sales of fixed income securities to institutional customers Some trading losses on securities held to support those sales Reduction in fina
Slide 19: National Lloyds Corporation – Q3 2013 Highlights
19 National Lloyds Corporation – Q3 2013 Highlights Rate and volume increases in homeowners and mobile home products, as well as lower claims volume and containment of significant losses from the May 2013 storms, drove Q3 pre-tax income of $4.3 million Direct Premiums Written increased 8.8% year-ove
Slide 20: Questions?
20 Questions?