Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q4 2019 Earnings Presentation
19 slides from Hilltop's earnings presentation, Jan 30, 2020
Slide 1: Hilltop Holdings Inc. Earnings Presentation Q4 2019
Hilltop Holdings Inc. Earnings Presentation Q4 2019 January 2020
Slide 2: Preface: Additional Information and Forward-Looking Statements
Preface 2 Additional Information Corporate Headquarters 2323 Victory Ave, Suite 1400 Dallas, TX 75219 Phone: 214-855-2177 www.hilltop-holdings.com Please Contact: Erik Yohe Phone: 214-525-4634 Email: eyohe@hilltop-holdings.com FORWARD-LOOKING STATEMENTS This presentation and statements made by repre
Slide 3: Investor Highlights – Value Creation and Capital Optimization
• Net charge-offs in Q4 2019 equated to $1.3 million, or 8 basis points of average loans HFI, and $5.6 million, or 8 basis points of average loans HFI, for the full year 2019 • Combined ratio at the insurance business of 84.1% in Q4 2019, down from 98.5% in Q4 2018, driven by relatively lower Loss a
Slide 4: Business Results – Pre-Tax Income vs. Prior Year
$41.3 $8.5 $24.2 $7.0 ($14.4) $66.7 $41.8 ($2.7) $10.9 ($0.4) ($11.2) $38.5 Banking Mortgage Broker-Dealer Insurance Corporate / Other Hilltop Holdings 4 Business Results – Pre-Tax Income vs. Prior Year ($ in millions) • Banking pre-tax income of $41.3 million declined by approximately $500 thousand
Slide 5: Platform for Growth and Efficiency – Year Update
5 Platform for Growth and Efficiency – Year 1 Update In January 2019, HTH announced a program designed to deliver $84 million in run-rate PPNR improvements by the year end 2021 Through solid execution and the commitment across all of our businesses, actions taken through year end 2019 have resulted
Slide 6: Income Statement and Key Metrics
$ in Millions, except EPS Income Statement Q4 2018 Q3 2019 Q4 2019 FY 2018 FY 2019 Net interest income 117.7 113.2 111.3 436.3 441.3 Noninterest income 238.5 341.4 299.3 1,022.8 1,206.0 Noninterest expense 310.8 350.1 336.9 1,293.2 1,339.8 PPNR1 $45.4 $104.5 $73.6 $165.9 $307.5 Provision (recovery)
Slide 7: Net Interest Income & Margin
7 Hilltop Holdings – Net Interest Income & Margin • Net interest income of $111.3 million decreased $6.4 million, or 5%, from fourth quarter 2018 • Q4 2019 loan accretion equated to $5.7 million, a decline of $7.0 million versus prior year period • NIM decreased 15 basis points versus Q3 2019 and de
Slide 8: Noninterest Income
8 Hilltop Holdings – Noninterest Income • Noninterest income of $299.3 million increased by $60.8 million compared to the fourth quarter of 2018 • $40 million increase in mortgage production income and fees driven by higher origination volumes, though partially offset by lower gain on sale margins •
Slide 9: Noninterest Expenses
$310.8 $309.1 $343.7 $350.1 $336.9 87.3% 85.5% 81.7% 77.0% 82.1% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Noninterest Expense Efficiency Ratio 9 Hilltop Holdings – Noninterest Expenses Year-over-Year Noninterest Expense ($MM) Noninterest Expenses and Efficiency Ratio Noninterest Expense Highlights •
Slide 10: Loan Mix and Yield
10 Notes: The sum of the period amounts may not equal the total amounts due to rounding. (1) Annualized Gross Loan Yield Loan Mix and Yield Total Loan Growth Ending Balance h7% vs. PY Average Balance h5% vs. PY ($ in billions, ending and average balances) Hilltop Holdings – Loans Annualized Loan HFI
Slide 11: Asset Quality
11 Hilltop Holdings – Asset Quality Criticized Loans Non-Performing Assets Note: The sum of the period amounts may not equal the total amounts due to rounding. Figures represent bank asset quality metrics only (excludes Loans HFS and Broker Dealer Margin Loans). Figures prior to Q4 2018 include both
Slide 12: Deposit Mix and Cost
12 Vs. Prior Quarter: (Total Deposits) Deposit Mix and Cost 3.0% 4.1% ($ in billions) Notes: Noninterest-bearing deposits excludes broker-dealer sweep deposits. The sum of the period amounts may not equal the total amounts due to rounding. Total Deposit Growth Ending Balance h6% vs. PY Average Balan
Slide 13: PlainsCapital Bank – Highlights
13 PlainsCapital Bank – Highlights Efficiency and NIM Highlights Note: (1) Efficiency Ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income. • Year-over-year HFI loan growth of $453 million, or 7% • Growth is primarily attributed to an increase i
Slide 14: PrimeLending – Highlights
$3.7 $3.0 $2.4 $4.0 $4.8 $4.4 330 334 330 333 335 304 150 170 190 210 230 250 270 290 310 330 350 $(0.3) $0.7 $1.7 $2.7 $3.7 $4.7 $5.7 $6.7 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Mortgage Originations ($bn) Gain on Sale (bps) 14 PrimeLending – Highlights Mortgage Originations and Gain on Sa
Slide 15: HilltopSecurities – Highlights
15 HilltopSecurities – Highlights • HilltopSecurities generated $113.1 million in net revenue during the fourth quarter of 2019 • Structured Finance revenue growth driven by higher volume with $1.5 billion in locks added compared to $1.2 billion in Q4 2018 • Capital Markets benefited from the lower
Slide 16: National Lloyds Corporation – Highlights
16 National Lloyds Corporation – Highlights • Pre-tax income of $7.0 million in Q4 2019 versus pre-tax loss of ($0.4) million in Q4 2018 • Combined ratio of 84.1% in Q4 2019, down from prior year fourth quarter of 98.5%, driven by lower loss and LAE expenses • The tornado that hit Dallas, TX in Q4 2
Slide 17: 2020 Full Year Outlook
17 Hilltop Holdings – 2020 Full Year Outlook 2020 Outlook Comments Loan Growth 4 – 6% • Full year average HFI loan growth • National Warehouse Lending loans expected to decline as the mortgage market stabilizes at lower production levels • Anticipate retaining additional mortgage production Deposit
Slide 18: Appendix
Appendix notin OP
Slide 19: Non-GAAP to GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
19 Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures • Hilltop Consolidated This presentation includes two non-AAP financial measures, Tangible Common Equity and Tangible book value per share, or TBVPS. Tangible common equity is defined as our total stockhol