Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q2 2017 Earnings Presentation
22 slides from Hilltop's earnings presentation, Jul 27, 2017
Slide 1: Forward-Looking Statements
Preface 200 Crescent Court, Suite 1330 Dallas, TX 75201 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 by representatives of Hilltop Holdings In
Slide 2: Hilltop Holdings – Q2 2017 Highlights
Hilltop Holdings – Q2 2017 Highlights • For the second quarter of 2017, net income to common stockholders was $62.5 million, or $0.63 per diluted share • Q2 2017 results include two significant nonrecurring items: • $11.6 million pre-tax ($14.3 million after income tax benefit of $2.6 million; $0.15
Slide 3: Hilltop Holdings – Financial Summary
Hilltop Holdings – Financial Summary Notes: (1) (2) See appendix for reconciliation of NIM to taxable equivalent NIM, as well as taxable equivalent NIM to Pre-PAA taxable equivalent NIM, as presented. Based on the end of period Tier 1 capital divided by total average assets during the quarter, exclu
Slide 4: Operating Report – Subsidiary Updates
Operating Report – Subsidiary Updates Notes: Mortgage market share and industry volume information per Mortgage Bankers Association as of July 20, 2017. (1) Non-covered HFI loan growth excludes impact of broker-dealer margin loans. (2) See appendix for reconciliation of NIM to taxable equivalent NIM
Slide 5: Operating Report – Subsidiary Updates: HilltopSecurities
Operating Report – Subsidiary Updates 6 HilltopSecurities •In Q2 2017, HilltopSecurities had pre-tax income of $15.8 million compared to $18.3 million in Q2 2016 • Pre-tax margin of 15.3% in Q2 2017 compared to 16.6% in Q2 2016 •Net revenue of $103.2 million in Q2 2017, a decrease of 6.5%, compared
Slide 6: Hilltop Holdings – Net Interest Income & Margin
Hilltop Holdings – Net Interest Income & Margin • Reported NIM (4.04%) and taxable equivalent NIM (4.05%) increased by 52 bps and 51 bps, respectively, in Q2 2017 • Increase significantly driven by elevated accretion due to certain accelerated loan resolutions and loan growth, as well as higher inte
Slide 7: Hilltop Holdings – Noninterest Income
Hilltop Holdings – Noninterest Income • • Noninterest income for Q2 2017 was $344.7 million, down 0.4% versus Q2 2016 Net gains from the sale of loans, other mortgage production income, and mortgage loan origination fees decreased $13.1 million, or 6.8%, from Q2 2016 to $179.7 million in Q2 2017, re
Slide 8: Hilltop Holdings – Noninterest Expense
Hilltop Holdings – Noninterest Expense • • Noninterest expense was $366.3 million in Q2 2017, down 0.3% from Q2 2016 Compensation was $214.4 million in Q2 2017 (compared to $217.4 million in Q2 2016), representing 59% of noninterest expense for the quarter Loss and LAE and policy acquisition and oth
Slide 9: Hilltop Holdings – Balance Sheet
Hilltop Holdings – Balance Sheet • Total assets increased 7.7% in Q2 2017 relative to Q1 2017, mainly driven by increases in loans HFS and gross non-covered loans HFI • Cash & federal funds decreased $164.0 million, or 28.8%, from Q1 2017 to $406.3 million at Q2 2017 • Loans held for sale increased
Slide 10: PlainsCapital Bank – Q2 2017 Highlights
PlainsCapital Bank – Q2 2017 Highlights • Pre-tax income increased to $59.8 million in Q2 2017 versus $21.6 million in Q2 2016 primarily due to a lower provision and an insurance receivable and related increase to other noninterest income of $15.0 million, and to a lesser extent an increase in net i
Slide 11: PlainsCapital Bank – Energy Exposure
PlainsCapital Bank – Energy Exposure • No energy SNC’s in Bank loan portfolio Continue to have relatively small balance of loans in Houston and surrounding region, though prudently growing Unfunded energy commitments are subject to borrowing bases and credit review before draw-downs Overall energy b
Slide 12: PlainsCapital Bank – Credit Quality and Capital Ratios
PlainsCapital Bank – Credit Quality and Capital Ratios $90.0 0.30% 18.00% 0.28% 16.30% 15.90% 0.26% 15.51% 15.38% $80.0 16.00% 14.72% 0.24% 0.24% 0.25% 15.50% 15.15% $70.0 14.00% 14.77% 14.64% 13.95% 0.20% 13.09% $60.0 0.20% 12.00% 12.72% 12.65% 12.35% 12.11% $50.0 10.00% 0.15% $40.0 8.00% $34.8 $34
Slide 13: PrimeLending – Q2 2017 Highlights
PrimeLending – Q2 2017 Highlights • Pre-tax income decreased to $19.3 million in Q2 2017 versus $28.1 million in Q2 2016 Origination volume of $4.1 billion in Q2 2017 was $92.4 million less than Q2 2016 • Purchase volume (as a % of total volume) increased to 86.3% in Q2 2017 from 78.6% in Q2 2016 •
Slide 14: HilltopSecurities – Q2 2017 Highlights
HilltopSecurities – Q2 2017 Highlights • Pre-tax income of $15.8 million in Q2 2017 versus pre-tax income of $18.3 million in Q2 2016 •Pre-tax margin of 15.3% in Q2 2017 compared to 16.6% in Q2 2016 Net revenue decreased $7.2 million to $103.2 million in Q2 2017 compared to $110.3 million in Q2 2016
Slide 15: National Lloyds Corporation – Q2 2017 Highlights
National Lloyds Corporation – Q2 2017 Highlights • Pre-tax loss of $10.4 million in Q2 2017 relative to pre-tax loss of $9.6 million in Q2 2016 • Seasonally normal storms in Texas drove the loss and LAE ratio to 92.1% and the combined ratio to 131.8% for the quarter • The decline in direct premiums
Slide 16: National Lloyds Corporation — Q2 2017 Highlights
National Lloyds Corporation — Q2 2017 Highlights + Pre-tax loss of $10.4 million in Q2 2017 relative to pre-taxloss ERR EREEES of $9.6 million in Q2 2016 Net Interest come 75 602 Provision for Loan Loss + Seasonally normal storms in Texas drove the loss and LAE ratio to 92.1% and the combined ratio
Slide 17: Questions?
Questions? nop OP
Slide 18: Hilltop Non-GAAP to GAAP Reconciliation
Hilltop Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures Hilltop presents measures on pages four, five and seven of this presentation that are not measures of financial performance recognized by generally accepted accounting principles in the United States
Slide 19: Loan Portfolio by Classification
Loan Portfolio by Classification C&D 2% C&I C&D 3% C&I 1% 1% Real Estate 97% Real Estate 96% Q2 2017 Total: $107.6 million Q2 2017 Total: $99.6 million Consumer 0% C&D 5% Broker-dealer C&I 16% 8% Consumer 1% C&I 29% C&D 14% Real Estate 78% Real Estate 48% Q2 2017 Total: $6,073.9 million Q2 2017 Tota
Slide 20: PCI Loans at June 30, 2017
PCI Loans at June 30, 2017 • Purchased Credit Impaired (“PCI”) loans are loans with evidence of credit quality deterioration, for which it is probable that not all contractually required payments will be collected • PCI loans include covered and non-covered loans • PCI loans had a total discount of
Slide 21: Non-PCI Loans at June 30, 2017
Non-PCI Loans at June 30, 2017 • Non-PCI loans include newly originated loans, acquired loans without credit impairment at acquisition, and acquired loans that have renewed • Non-PCI loans include covered loans and non-covered loans • Portfolio on balance sheet at 98.8% unpaid principal balance with
Slide 22: Non-PCI Loans at June 30, 2017
Non-PCI Loans at June 30, 2017 + Non-PCI loans include newly originated loans, aequired loans without credit impairment at acquisition, and aequired loans that have renewed + Non-PCI loans include covered loans and non-covered loans + Portfolio on balance sheet at 98.8% unpaid principal balance with