Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q3 2015 Earnings Presentation
21 slides from Hilltop's earnings presentation, Nov 3, 2015
Slide 1: 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 Please contact: Isabell Novakov Phone: (214) 252-4029 Email: inovakov@plainscapital.com FORWARD-LOOKING STATEMENTS This presentation and statements made by representatives of
Slide 2: Hilltop Holdings – Q3 2015 Highlights
3 Hilltop Holdings – Q3 2015 Highlights For the third quarter of 2015, net income to common stockholders was $46.9 million, or $0.47 per diluted share Third quarter 2015 adjusted net income1 was $49.6 million, or $0.50 per diluted share, when excluding the transaction and integration costs related t
Slide 3: Hilltop Holdings – Financial Summary
4 Hilltop Holdings – Financial Summary Selected Items Q3 2014 Q2 2015 Q3 2015 Net Income to Common ($000) 23,386 29,622 46,894 EPS - Diluted ($) $0.26 $0.30 $0.47 Book Value Per Share ($) $14.51 $16.82 $17.35 NIM (taxable equivalent) 4.38% 3.75% 4.20% Assets ($000) 9,180,402 12,479,510 12,389,456 Lo
Slide 4: Hilltop Holdings – Net Interest Income & Margin
5 Hilltop Holdings – Net Interest Income & Margin Stated NIM increased by 45 bps in Q3 2015 to 4.20% compared with 3.75% in Q2 2015 primarily due to the favorable resolution of certain significant loan relationships acquired in the FNB Transaction that increased yields earned on loans Cost of intere
Slide 5: Hilltop Holdings – Noninterest Income
6 Hilltop Holdings – Noninterest Income Noninterest income for Q3 2015 was $296.5 million, up 39.8% versus Q3 2014 Net gains from the sale of loans, other mortgage production income, and mortgage loan origination fees increased $33.7 million, or 26.7%, from Q3 2014 to $160.0 million in Q3 2015, repr
Slide 6: Hilltop Holdings – Noninterest Expense
7 Hilltop Holdings – Noninterest Expense Noninterest expense was $333.5 million in Q3 2015, up 30.9% from Q3 2014 During the quarter we incurred $2.8 million in transaction and integration costs associated with employee expenses and professional fees, both related to the SWS Merger Compensation incr
Slide 7: Hilltop Holdings – Balance Sheet
Hilltop Holdings – Balance Sheet Assets were slightly down, as growth in non-covered loans was more than offset by a decline in cash, loans HFS and covered loans Gross non-covered loans HFI increased $42.6 million, or 0.9%, from Q2 2015 to $5.0 billion at Q3 2015 Gross covered loans decreased $71.8
Slide 8: Company Operational Updates – PlainsCapital Bank
9 Company Operational Updates PlainsCapital Bank ROAA of 1.64%, driven by strong net interest margin of 5.79% (3.69% Pre-PAA) and improved efficiency ratio (51% vs. 57% for Q2 2015) Healthy non-covered HFI loan (excluding margin loans) growth of 6% annualized for Q3 2015; favorable loan pipeline wit
Slide 9: Company Operational Updates – Hilltop Securities Holdings, National Lloyds
10 Company Operational Updates Hilltop Securities Holdings Revenue was relatively flat for most business lines relative to Q2 2015, though stock loan and structured finance had strong results Even with modest overall revenue growth, expenses (excluding integration costs) were down and the comp./net
Slide 10: PlainsCapital Bank pre-tax income increase
11 Pre-tax income increased to $53.6 million in Q3 2015 versus $24.6 million in Q3 2014 primarily due to a decline in expenses and favorable resolution of significant loan relationships from the FNB Transaction Net interest income was driven by non-covered loan growth and accretion Noninterest incom
Slide 11: PlainsCapital Bank – Credit Quality and Capital Ratios
12 PlainsCapital Bank – Credit Quality and Capital Ratios Credit Quality Bank Capital Ratios Note: Tier 1 Leverage Ratio based on the end of period Tier 1 capital divided by total average assets during the respective quarter, excluding goodwill and intangible assets $27.0 $23.2 $32.8 $31.2 $30.0 $0.
Slide 12: PlainsCapital Bank – Loan Portfolio by Classification
PlainsCapital Bank – Loan Portfolio by Classification 13 Note: PCI stands for Purchased Credit Impaired loans. Loan classification mix represents consolidated balances at Hilltop and, therefore, eliminate intercompany loans. Amounts above equal carrying value, after deductions for discount Covered P
Slide 13: PlainsCapital Bank – PCI Loans at Sep. 30, 2015
PlainsCapital Bank – PCI Loans at Sep. 30, 2015 14 ($000) Covered PCI Non-Covered PCI Total PCI Outstanding Balance 450,581 104,055 554,636 (Discount) (199,563) (22,894) (222,457) Carrying Amount 251,018 81,161 332,179 Allowance for Loan Loss 1,822 4,599 6,421 Total PCI Loans, Net of Allowance 249,1
Slide 14: PlainsCapital Bank – Non-PCI Loans at Sep. 30, 2015
PlainsCapital Bank – Non-PCI Loans at Sep. 30, 2015 15 ($000) Covered Non-PCI Non-Covered Non-PCI Total Non-PCI Outstanding Balance 183,661 4,945,867 5,129,528 (Discount) (12,262) (27,499) (39,761) Carrying Amount 171,399 4,918,368 5,089,767 Allowance for Loan Loss 48 38,390 38,438 Total Non-PCI Loa
Slide 15: PrimeLending – Q3 2015 Highlights
16 PrimeLending – Q3 2015 Highlights Pre-tax income grew to $12.1 million in Q3 2015 versus $11.1 million in Q3 2014 due to higher origination volumes Origination volume of $3.6 billion in Q3 2015 was $693 million greater than Q3 2014 due to growth in both refinance and purchase business Purchase vo
Slide 16: Hilltop Securities Holdings – Q3 2015 Highlights
17 Hilltop Securities Holdings – Q3 2015 Highlights Q3 2015 includes operations of SWS, though Q3 2014 includes only FSW Pre-tax income of $1.5 million in Q3 2015 versus pre-tax income of $1.2 million in Q3 2014; continued improvement in profitability since the SWS merger Q3 2015 results include pre
Slide 17: National Lloyds Corporation – Q3 2015 Highlights
18 National Lloyds Corporation – Q3 2015 Highlights Reported Summary Results ($000) Q3 2014 Q3 2015 Net Interest Income 808 838 Provision for Loan Losses - - Noninterest Income 44,014 43,534 Noninterest Expense (36,636) (32,366) Income Before Taxes 8,186 12,006 Combined Ratio Q3 2015 Direct Premiums
Slide 18: National Lloyds Corporation — Q3 2015 Highlights
National Lloyds Corporation — Q3 2015 Highlights + Pre-tax income of $12.0 millio million in Q3 2014 n.Q3 2015 relative to $8.2 + Premiums remain flat due to exposure initiatives and less new business; the competitive environment has hardened as we have taken significant rate increases over the prio
Slide 19: Appendix
20 Appendix
Slide 20: Hilltop Non-GAAP to GAAP Reconciliation
21 Hilltop Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures Q3 2015 Reconciliation of Non-GAAP Segment Adjusted Income Before Income Taxes ($M) Broker-Dealer GAAP Income Before Income Taxes 1.5 Add: Transaction and Integration Costs (pre-tax)1 2.1 Non-GAAP
Slide 21: Non-GAAP Financial Measures Explanation
Hilltop Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures Hilltop presents one measure on page ten and seventeen and two measures on page three of this presentation that are not measures of financial performance recognized by generally accepted accounting pr