Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q3 2018 Earnings Presentation
20 slides from Hilltop's earnings presentation, Oct 25, 2018
Slide 1: Forward-Looking Statements
Preface 2323 Victory Ave, Suite 1400 Dallas, TX 75219 Phone: 214-855-2177 www.hilltop-holdings.com FORWARD-LOOKING STATEMENTS Please Contact: Isabell Novakov Phone: 214-252-4029 Email: inovakov@hilltop-holdings.com This presentation and statements made by representatives of Hilltop Holdings Inc. (“H
Slide 2: Investor Highlights – Q3 2018
Investor Highlights – Q3 2018 • Successfully completed acquisition of The Bank of River Oaks (“BORO”), which included $327 million (net of fair value mark) in loans and $376 million in deposits at time of acquisition Net interest income grew 5% versus prior year period despite declining accretion, d
Slide 3: Business Results – Q3 2018
Business Results – Q3 2018 $48.4 $44.7 • Banking pre-tax income of $38.6 million increased by 6% from prior year, largely driven by strong asset quality and improving net interest income. Third quarter 2018 results include transaction related expenses of ($6.6) million associated with the acquisitio
Slide 4: PlainsCapital Bank – Houston Market Opportunity
PlainsCapital Bank – Houston Market Opportunity System integration – During October existing systems were converted to PCB core platforms Increase market presence - The acquisition of BORO increased PCB’s branch presence to 5 locations in attractive Houston submarkets and allowed PCB to retain an ex
Slide 5: Building a Platform for Growth and Efficiency
Building a Platform for Growth and Efficiency Implementing a cloud-based network of business platforms to support scale and long-term growth Improving the digital client experience to deliver higher satisfaction and improved execution Reducing organizational redundancy by streamlining business proce
Slide 6: Hilltop Holdings – Financial Summary
Hilltop Holdings – Financial Summary Notes: (1) (2) (3) (4) (5) Pre-provision net revenue is calculated as the sum of net interest income and noninterest income less noninterest expense (excep t provision for loan losses). Includes impact of Purchase Accounting, FDIC Indemnification and True-up accr
Slide 7: Hilltop Holdings – Net Interest Income & Margin
Hilltop Holdings – Net Interest Income & Margin ($ in billions) • Net interest income of $110 million increased $5 million, or 5%, from third quarter 2017 • Loan accretion of $8.1 million declined by $2.4 million, or 23%, year over year NIM increased 2 basis points versus Q2 2018 and 4 basis points
Slide 8: Hilltop Holdings – Noninterest Income
Hilltop Holdings – Noninterest Income ($ in millions) $298.5 $290.5 Securities Related Fees & Commissions $279.4 (3.9) $269.7 Other Income (4.1) • Noninterest income of $270 million declined by $29 million compared to the third quarter 2017 • $21 million reduction in mortgage production income and f
Slide 9: Hilltop Holdings – Noninterest Expenses
Hilltop Holdings – Noninterest Expenses ($ in millions) $353.8 $328.7 Occupancy and Equipment --Insurance Loss and LAE (12.5) • Noninterest expense of $336 million declined $18 million from the third quarter 2017, driven by lower Loss & LAE in the insurance business • Q3 2017 noninterest expenses in
Slide 10: Hilltop Holdings – Loans
Hilltop Holdings – Loans ($ in billions, ending balances) 5.56% 5.42% 5.41% Annualized Loan HFI Yield1: 5.34% 5.26% $6.9 $6.5 $6.5 $6.4 $6.3 $5.8 Q3 2017 Non-Covered Loans Q4 2017 Q1 2018 Q2 2018 Q3 2018 Annualized Gross Loan Yield Covered Loans B/D Margin Loans Vs. Prior Quarter: (Non-Covered Loans
Slide 11: Hilltop Holdings – Deposits
Hilltop Holdings – Deposits ($ in billions, ending balances) 0.51% Cost of IB Deposits: 0.87% 0.76% 0.64% 0.56% $8.3 $8.0 $8.0 Q3 2017 Noninterest bearing Q4 2017 Q1 2018 Q2 2018 B/D Sweep Deposits Q3 2018 Interest bearing Cost of IB Deposits (%) Vs. Prior Quarter: (Total Deposits) Notes: Noninteres
Slide 12: PlainsCapital Bank – Q3 2018 Highlights
PlainsCapital Bank – Q3 2018 Highlights Net Interest Income Provision for Loan Losses Noninterest Income Noninterest Expense 89.3 1.7 11.4 62.7 94.9 --11.4 67.7 ROAA Efficiency Ratio1 Net Interest Margin TE - Net Interest Margin – Pre-PAA 0.94% 62.3% 4.03% 3.54% $9.7 1.19% 63.7% 4.13% 3.75% $10.0 Av
Slide 13: PrimeLending – Q3 2018 Highlights
PrimeLending – Q3 2018 Highlights Origination Volume ($mm) % Purchase Sales Volume ($mm) Servicing Assets ($mm) $3,973 84% $4,002 $48 $3,654 89% $4,015 $69 Net Interest Income Noninterest Income Noninterest Expense 0.1 163.8 151.1 0.4 144.4 140.0 • Origination volume of $3.7 billion in Q3 2018 decli
Slide 14: HilltopSecurities – Q3 2018 Highlights
HilltopSecurities – Q3 2018 Highlights Net Interest Income Provision for Loan Losses 12.2 (0.4) 12.4 (0.4) Compensation/Net Revenue (%) FDIC Insured Balances at PCB 58.2% $1,301 62.5% $1,300 Noninterest Income Noninterest Expense 91.4 83.8 82.8 85.7 Other FDIC Insured Balances Public Finance Offerin
Slide 15: National Lloyds Corporation – Q3 2018 Highlights
National Lloyds Corporation – Q3 2018 Highlights Net Interest Income Noninterest Income Noninterest Expense 0.9 36.8 47.0 0.7 36.7 33.8 Direct Premiums Written Net Premiums Earned $33.9 $34.5 $32.7 $34.2 • Pre-tax income of $3.6 million in Q3 2018 versus pre-tax loss of ($9.3) million in Q3 2017 140
Slide 16: National Lloyds Corporation — Q3 2018 Highlights
National Lloyds Corporation — Q3 2018 Highlights ary Results millions) Key Highlights (Gin millions) Qs2017 Qs erest Income 09 07 Direet Premiums Weiten| $339 $327 Noninterest Income 96.8 367 Net Premiums Earned Saas saa Noninterest Expense 470 338 Income Before Taxes (9.3) $3.6 + Pre-taxincome of $
Slide 17: Appendix
Appendix 18
Slide 18: Non-GAAP to GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures Hilltop presents measures in this presentation that are not measures of financial performance recognized by generally accepted accounting principles in the United States (“GAAP”) including taxable equivalent
Slide 19: Non-GAAP to GAAP Reconciliation (Continued)
Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures (Continued) Tangible Common Equity, is a non-GAAP financial measure. Tangible common equity is defined as our total stockholders’ equity, excluding preferred stock, reduced by goodwill and other intangible as
Slide 20: Non-GAAP to GAAP Reconciliation (Continued)
Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures (Continued) ‘Tangible Common Equity, is a non-GAAP financial measure. Tangible common equity is defined as our total stockholders’ equity, excluding preferred stock, reduced by goodwill and other intangible a