Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q2 2019 Earnings Presentation
19 slides from Hilltop's earnings presentation, Jul 25, 2019
Slide 1: Hilltop Holdings Inc. Q2 2019 Earnings Presentation
HilltopHoldingsInc. Q2 2019 Earnings Presentation July 2019
Slide 2: 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: Erik Yohe Phone: 214-525-4634 Email: eyohe@hilltop-holdings.com This presentation and statements made by representatives of Hilltop Holdings Inc. (“Hilltop” o
Slide 3: Highlights – Q2 2019
Highlights – Q2 2019 Investor Average Bank loans1 grew by $740 million, or 13%, compared to second quarter of 2018 Mortgage origination pre-tax earnings increased 62% driven by expense discipline and improved pricing Structured Finance Q2 2019 net revenue increased by $31 million compared to prior y
Slide 4: Business Results – Q2 2019
Business Results – Q2 2019 ($9.9) • Banking pre-tax income of $46.6 million increased by 41% from prior year period due to net interest income growth of $5.5 million, despite a decline in accretion of $1.9 million, and a $7.3 million reduction in noninterest expenses as Q2 2018 included a wire fraud
Slide 5: Financial Summary
Hilltop Holdings – Financial Summary Noninterest income 279.4 252.5 312.9 PPNR1 $45.7 $52.3 $77.1 Pre-tax income $45.4 $51.4 $77.7 Revenue 8.0 8.6 6.4 Pre-tax income impact $4.3 $6.7 $4.4 ROAA 1.03% 1.21% 1.74% Efficiency Ratio3 88.1% 85.5% 81.7% Tier 1 Leverage Ratio4 12.90% 13.22% 13.00% Notes: Th
Slide 6: Net Interest Income & Margin
Hilltop Holdings – Net Interest Income & Margin ($ in billions) • Net interest income of $107.9 million increased $3.0 million, or 3%, from second quarter 2018 •Second quarter 2019 loan accretion equated to $6.4 million, a decline of $1.9 million versus prior year period NIM decreased 20 basis point
Slide 7: Noninterest Income
Hilltop Holdings – Noninterest Income ($ in millions) $312.9 Sec urities Related Fees & Co mmissio ns (3 .3 ) Other I nc o me 3 4.6 • Noninterest income of $312.9 million increased by $33.4 million compared to the second quarter 2018 • $2.8 million increase in mortgage production income and fees dri
Slide 8: Noninterest Expenses
Hilltop Holdings – Noninterest Expenses ($ in millions) $343.7 $338.5 $335.7 Occupancy and Equipment 0.3 Insurance Loss and LAE 0.6 • Compensation-related expenses increased by $15.1 million from prior year quarter primarily driven by increased variable compensation •Variable compensation at PrimeLe
Slide 9: Loan Mix and Yield
Hilltop Holdings – Loans ($ in billions, ending and average balances) 5.90% 5.7 6% Annualized Loan HFI Yield1: 5.5 7 % 5.41% 5.34% $ 6.9 $ 6.9 $7 .0 $ 6.8 $ 6.9 $ 6.8 Ending Balance Vs. Prior Quarter: (Excludes B/D Loans) Ending Balance – Loans excluding B/D Ending Balance – B/D Loans Average Balanc
Slide 10: PlainsCapital Bank Asset Quality
Hilltop Holdings – PlainsCapital Bank Asset Quality 3.5% 3.0% 2.8% 2.5% 2.3 % 2.0% 1.5% 1.0% 0.5% 0.0% Q2 2018 Q3 2018 Q4 2018 Special Mention Q1 2019 Q2 2019 Classified 2.2x 3.00% 2.7 0% 2.67% 2.47% 2.2 7% 2.0x 2.50% % 1.8x 2.00% 1.6x 1.50% .94% 0.90 % 0.83 % 1.4x 1.00% 1.2x 0.50% 1.0x 0.00% Q2 201
Slide 11: Deposit Mix and Cost
Hilltop Holdings – Deposits ($ in billions) 1 . 25% 1 . 1 9% 1 . 01 % 0. 8 7 % Cost of Interest Bearing Deposits: 0. 7 6% Q2 2018 Q1 2019 Q3 2018 Q4 2018 Q2 2019 Vs. Prior Quarter: (Total Deposits end of period) Ending Balance – Broker Dealer Sweep Deposits Ending Balance – Noninterest Bearing Depos
Slide 12: Q2 2019 PlainsCapital Bank Highlights
– Q2 2019 PlainsCapital Bank Highlights Net Interest Income Provision (Recovery) for Loan Losses Noninterest Income Noninterest Expense 88. 0 --10. 6 6 5.5 9 3 . 4 (0. 7 ) 10. 7 58 .3 ROAA Efficiency Ratio1 Net Interest Margin TE Net Interest Margin – Pre PAA2 Assets ($bn) 1.09% 66.5% 4.11% 3.70% $9
Slide 13: Q2 2019 Highlights PrimeLending
Q2 2019 Highlights PrimeLending – 0. 7 (1 . 0) $4 , 1 07 $3 , 9 6 0 Net Interest Income (Expense) Noninterest Income Noninterest Expense Origination Volume ($mm) % Purchase Originations Sales Volume ($mm) Servicing Asset ($mm) 16 2 . 8 1 6 4 . 5 88% 84 % 15 0. 0 1 4 1 . 7 $3 , 5 2 7 $3 , 3 3 8 $57 $
Slide 14: Q2 2019 Highlights HilltopSecurities
Q2 2019 Highlights HilltopSecurities – 12 . 9 0. 3 73 . 6 7 8 .0 11 . 4 (0. 0) 1 05 . 6 9 4 .9 Compensation/Net Revenue (%) FDIC Insured Balances at PCB Other FDIC Insured Balances 60. 6 % $1 , 2 7 9 $8 9 7 $1 5, 06 6 $1 ,3 1 8 6 0. 1 % $1 , 3 05 $6 7 6 $1 4 , 3 4 8 $1 ,6 51 Net Interest Income Prov
Slide 15: Q2 2019 Highlights National Lloyds
Q2 2019 Highlights National Lloyds – 35. 8 34 . 1 35. 6 33. 5 Net Interest Income Noninterest Income Noninterest Expense 0. 8 36 . 5 39 . 7 0. 6 36 . 2 39 . 6 Direct Premiums Written Net Premiums Earned 120.0% 113.0% 111.1% • • Core states have begun to realize premium growth The increase in the com
Slide 16: 2019 Hilltop Holdings Full Year Outlook
– 2019 Hilltop Holdings Full Year Outlook origination trends, secondary margins impacted by market rates (market 16 Outlook Comments Loan Growth 4 – 6% •Full year average HFI loan growth Deposit Growth 4 – 6% •Full year average deposit growth Net Interest Income (3%) - 0% growth •FY TE NIM (pre-PAA)
Slide 17: Appendix
Appendix viens
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