Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q4 2018 Earnings Presentation
21 slides from Hilltop's earnings presentation, Jan 24, 2019
Slide 1: Hilltop Holdings Inc. Q4 2018 Earnings Presentation
Hilltop Holdings Inc. Q4 2018 Earnings Presentation January 2019
Slide 2: Preface: Additional Information and Forward-Looking Statements
Preface 2 Additional InformationCorporate Headquarters 2323 Victory Ave, Suite 1400 Dallas, TX 75219 Phone: 214-855-2177 www.hilltop-holdings.com Please Contact: Isabell Novakov Phone: 214-252-4029 Email: inovakov@hilltop-holdings.com FORWARD-LOOKING STATEMENTS This presentation and statements made
Slide 3: Investor Highlights – Q4 2018
3 Investor Highlights – Q4 2018 Value Creation and Capital Optimization • Net charge-offs in 2018 equated to $9.3 million, or 14 basis points, of full year average loans • During Q4 2018, criticized loans as a percent of bank loans declined to 2.4% from 2.7% in the fourth quarter 2017 • National Llo
Slide 4: Business Results – Q4 2018 Pre-Tax Income vs. Prior Year
4 Business Results – Q4 2018 Pre-Tax Income vs. Prior Year ($ in millions) • Banking pre-tax income of $41.8 million increased by 16% from prior year. Increase was largely driven by growth in loan and deposit balances coupled with higher yields. Net interest margin at PCB increased to 4.50% during t
Slide 5: Building a Platform for Growth and Efficiency
Building a Platform for Growth and Efficiency 5 Key Projects Vendor Partners Enhanced Business Operations • Core Systems enhancements – PrimeLending and HilltopSecurities • Consolidate to single General Ledger platform • Streamlining mid/back office to reflect current operating conditions Strategic
Slide 6: Efficiency and Growth Program
Efficiency and Growth Program 6 PPNR1 income trend: 2018 - 2021 ($ in millions) $166 $250 2018 2021 Shared Services Strategic Sourcing Enhanced Business Operations Total expected annual PPNR growth of 10-15% Building a scalable platform, supporting long-term growth and efficiency to drive positive o
Slide 7: Income Statement and Key Metrics
$ in Millions, except EPS Income Statement Q4 2017 Q3 2018 Q4 2018 FY 2017 FY 2018 Net interest income 108.7 110.3 117.7 421.7 436.3 Noninterest income 290.5 269.7 238.5 1,205.1 1,022.8 Noninterest expense 328.7 335.7 310.8 1,369.3 1,293.2 PPNR1 $70.5 $44.3 $45.4 $257.6 $165.9 Provision (recovery) f
Slide 8: Hilltop Holdings – Net Interest Income & Margin
8 Hilltop Holdings – Net Interest Income & Margin • Net interest income of $117.7 million increased $9 million, or 8%, from fourth quarter 2017 • Fourth quarter 2018 loan accretion equated to $12.6 million, stable versus prior year • NIM increased 27 basis points versus Q3 2018 and 18 basis points v
Slide 9: Hilltop Holdings – Noninterest Income
9 Hilltop Holdings – Noninterest Income • Noninterest income of $238.5 million declined by $51.9 million compared to the fourth quarter 2017 • $28 million reduction in mortgage production income and fees driven by lower volume and secondary market spreads tightening by 46 bps to 334 bps • Securities
Slide 10: Hilltop Holdings – Noninterest Expenses
10 Hilltop Holdings – Noninterest Expenses Year-over-Year Noninterest Expense ($MM)Noninterest Expenses and Efficiency Ratio Noninterest Expense Highlights •Noninterest expense of $310.8 million declined $17.9 million from the fourth quarter 2017, driven by lower compensation and benefits expense •
Slide 11: Hilltop Holdings – Loans
11 Notes: -The sum of the period amounts may not equal the total amounts due to rounding. -As a result of the termination of the loss-share agreements, loans which were previously referred to as either “covered loans” if covered by the loss-share agreements or otherwise “non-covered loans” are colle
Slide 12: Hilltop Holdings – Deposits
12 Vs. Prior Quarter: (Total Deposits) Deposit Mix and Cost 3.0% $8.0 4.1% ($ in billions, ending balances) Notes: -Noninterest-bearing deposits excludes broker-dealer sweep deposits. -The sum of the period amounts may not equal the total amounts due to rounding. -Q3 2018 and Q4 2018 results include
Slide 13: Hilltop Holdings – 2019 Full Year Outlook
13 Hilltop Holdings – 2019 Full Year Outlook Current Guidance Comments Loan Growth 4 – 6% • Full Year HFI Average Loan Growth Deposit Growth 4 – 6% • Full Year Average Deposit Growth • Deposit Betas continue to trend towards 50 – 60% through the cycle levels Net Interest Income 1 – 3% growth • Growt
Slide 14: PlainsCapital Bank – Q4 2018 Highlights
14 PlainsCapital Bank – Q4 2018 Highlights Credit QualityQ4 2018 Highlights Note: (1) Efficiency Ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income. (2) Net Interest Margin – PAA is the taxable equivalent Net Interest Margin less the impact of
Slide 15: PrimeLending – Q4 2018 Highlights
15 PrimeLending – Q4 2018 Highlights Mortgage Originations and Gain on SaleQ4 2018 Highlights • Origination volume of $3.0 billion in Q4 2018 declined versus Q4 2017 by $631 million, or 18% • Industry volume declined by 13% over the same period1 • The noninterest income decrease of ($28) million, or
Slide 16: HilltopSecurities – Q4 2018 Highlights
16 HilltopSecurities – Q4 2018 Highlights • Pre-tax income of $10.9 million in Q4 2018 versus $19.1 million in Q4 2017 • Net Revenue2 decreased $24.6 million to $89.8 million in Q4 2018 compared to $114.3 million in Q4 2017 • During Q4 2017 Public Finance recorded a strong quarter as new Tax Legisla
Slide 17: National Lloyds Corporation – Q4 2018 Highlights
17 National Lloyds Corporation – Q4 2018 Highlights • Pre-tax loss of ($0.4) million in Q4 2018 versus pre-tax income of $13.8 million in Q4 2017 • Q4 2017 experienced low storm activity and severity while Q4 2018 includes losses of ($6.2) million as a result of Hurricane Michael in the Georgia mark
Slide 18: Q&A
Q&A 18
Slide 19: Appendix
Appendix top ny ARP
Slide 20: Non-GAAP to GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
20 Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures • Hilltop Consolidated Hilltop presents measures in this presentation that are not measures of financial performance recognized by generally accepted accounting principles in the United States (“GAAP”) inc
Slide 21: Non-GAAP to GAAP Reconciliation (Continued)
21 Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures (Continued) • Hilltop Consolidated Tangible Common Equity, is a non-GAAP financial measure. Tangible common equity is defined as our total stockholders’ equity, excluding preferred stock, reduced by goodwi