Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q3 2022 Earnings Presentation
19 slides from Hilltop's earnings presentation, Oct 21, 2022
Slide 1: Hilltop Holdings Inc. Q3 2022 Earnings Presentation
Hilltop Holdings Inc. Q3 2022 Earnings Presentation October 21, 2022
Slide 2: Preface
Preface Corporate Headquarters Additional Information 6565 Hillcrest Ave Please Contact: Dallas, TX 75205 Erik Yohe Phone: 214-855-2177 Phone: 214-525-4634 www.hilltop-holdings.com Email: eyohe@hilltop-holdings.com FORWARD-LOOKING STATEMENTS This presentation and statements made by representatives o
Slide 3: Investor Highlights – Q3 2022
Investor Highlights – Q3 2022 Net Income EPS – Diluted ROAA ROAE $32.1 MM $0.50 $0.30 0.79% .86% 6.26% 5.76% • PlainsCapital Bank generated $63.6 million in pre-tax income during Q3 2022, an increase of $0.7 million from Q3 2021 • Average bank loans HFI1 increased from Q2 2022 by $158 million, or 2%
Slide 4: Capital Highlights – Q3 2022
Capital Highlights – Q3 2022 • During the quarter, HTH returned $9.7 million of capital to shareholders through dividends • Moderate increase in tangible book value per common share during the third quarter of 2022 was a result of an increase in net retained earnings which was largely offset by nega
Slide 5: Financial Summary
Hilltop Holdings – Financial Summary $ in Millions, except EPS Income Statement and Key Metrics Q3 2022 Q2 2022 QoQ% Q3 2021 YoY% Net interest income $123.5 $112.1 10% $105.1 18% Noninterest income 207.0 239.3 (13%) 367.9 (44%) Noninterest expenses 288.7 298.5 (3%) 355.2 (19%) Efficiency ratio 87.4%
Slide 6: Allowance for Credit Losses
Hilltop Holdings – Allowance for Credit Losses Allowance for Credit Losses at Period End ($ in millions) $120.0 4.00% $109.5 3.50% $91.4 $91.2 $95.3 $100.0 $3.0 $91.8 3.00% ($2.7) ($0.2) $80.0 ($3.6) ACL / Total Loans HFI 2.50% $60.0 2.00% $40.0 1.45% 1.50% 1.16% 1.17% 1.20% 1.16% 1.00% $20.0 0.50%
Slide 7: Net Interest Income & Margin
Hilltop Holdings – Net Interest Income & Margin Net Interest Income Net Interest Margin Rollforward ($ in millions) Q2 2022 2.7 5% $130.0 2 $125 .0 $123.5 Y ield on Cash and Due Balances 0.29% $120.0 Loans HFI Y ield Increase 0.27 % Loans HFS 0.04% $115 .0 $112.1 $110 .0 Securities Portfolio Y ield
Slide 8: Net Interest Income Rate Impacts
Hilltop Holdings – Net Interest Income Rate Impacts Estimated Impact on 12-month Net Interest Income1 Bank Loans HFI – Fixed vs. Variable Rate at 9/30/22 10% 5% 7% 4% 35% 0% Fixed Rate -4% Variable rate at or below floors -5% -9% 55% Variable rate above floor 10% -10% -100 -50 +50 +100 Interest Rate
Slide 9: Noninterest Income
Hilltop Holdings – Noninterest Income Noninterest Income Year-over-Year Noninterest Income ($MM) ($ in millions) Q3 2021 $367 .9 $367.9 $1 1 .7 Mortgage Production Income & Fees (144.0) Securities and Inv estment Adv isory Fees & Commissions (15.0) Other Income (2.0) $1 16.1 $284.8 $1 1 .8 Q3 2022 $
Slide 10: Noninterest Expenses
Hilltop Holdings – Noninterest Expenses Noninterest Expenses and Efficiency Ratio 1 Year-over-Year Noninterest Expense ($MM) ($ in millions) Q3 2021 $355.2 Com pensation and Benefits (58.2) Occupancy and Equipm ent (0.4) 90.5% 87.4% Professional Serv ices (3.9) 82.8% 85.0% 75.1% Other Expenses (3.9)
Slide 11: Loans
Hilltop Holdings – Loans Loan Mix at Period End Key Drivers & Statistics ($ in billions) Q3'21 Q2'22 Q3'22 $ 7 .9 $ 7 .9 $ 7 .9 $ 7 .8 $ 7 .6 $ 0.3 $ 0.2 Av erage Loans HFI Balance ($B) $7 .5 $7 .8 $7 .9 $ 0.4 $ 0.3 $ 0.5 Annualized Loan HFI Yield % 4 .3 3 % 4 .3 2 % 4 .7 5% $ 0.9 $ 1.1 $ 1.2 $ 1.0
Slide 12: Asset Quality
Hilltop Holdings – Asset Quality Criticized Loans Non-Performing Assets 7.0% $125,000 1.75% 6.0% 1.50% $100,000 1.21% 5.0% 1.25% % of Bank Loans 4.2% $75,000 4.0% 0.1% 1.00% 3.3% 0.7 6% 3.0% 2.8% 2.7 % 0.64% 0.75% 2.5% $50,000 0.0% 0.50% 0.48% 2.0% 4.1% 0.50% 3.3% $25,000 2.8% 2.5% 2.6% 1.0% 0.25% $
Slide 13: Deposits
Hilltop Holdings – Deposits Deposit Mix at Period End Key Drivers & Statistics ($ in billions) Q3'21 Q2'22 Q3'22 $12.8 $12.7 $0.2 Av erage Deposits ($B) $1 1 .9 $1 2.3 $1 1 .7 $12.1 $0.2 $11.9 1 $0.2 $ 0.8 $ 0.8 $0.1 Cost of Interest-Bearing Deposits 0.28% 0.28% 0.7 0% $11.4 $ 0.8 $ 0.8 1 $ 0.7 Cost
Slide 14: 2022 Outlook
Hilltop Holdings – 2022 Outlook Outlook • 1 – 4 family loan retention $25 – $75 million per month, throughout the remainder of 2022 Loan Growth • Full year average bank loan growth 1% – 3%, excluding PPP loans and retained mortgages, (Full year average HFI loan growth) lower guidance due to mortgage
Slide 15: Appendix
Appendix 15
Slide 16: PlainsCapital Bank – Q3 2022 Highlights
PlainsCapital Bank – Q3 2022 Highlights Summary Results ($ in millions) Q3 2021 Q3 2022 Key Highlights Q3 2021 Q3 2022 Net Interest Incom e $1 00.0 $1 1 0.9 ROAA 1 .3 6% 1 .41 % Prov ision for (rev ersal of) Credit Losses (5.8) (0.7 ) Full Serv ice Branches (period end) 59 59 Noninterest Incom e 1 1
Slide 17: PrimeLending – Q3 2022 Highlights
PrimeLending – Q3 2022 Highlights Sum m ary Results ($ in m illions) Q3 2021 Q3 2022 Key Highlights Q3 2021 Q3 2022 Net Interest Incom e (Expense) ($3 .5) ($2 .9) Origination Volum e ($m m ) $5,595 $3 ,043 Noninterest Incom e 2 42 .3 98.2 % Purchase 71% 93 % Noninterest Expense 1 7 6.6 1 1 8.3 Sales
Slide 18: HilltopSecurities – Q3 2022 Highlights
HilltopSecurities – Q3 2022 Highlights Summary Results Key Highlights ($ in millions) Q3 2021 Q3 2022 ($ in millions) Q3 2021 Q3 2022 Net Interest Incom e $1 0.4 $1 3 .4 Com pensation/Net Rev enue (%) 65.1 % 61 .5% Prov ision for (Rev ersal of) Credit Losses (0.0) (0.1 ) Pre-tax Margin % 1 3 .8% 1 5
Slide 19: 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 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 assets. This i