Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q4 2017 Earnings Presentation
21 slides from Hilltop's earnings presentation, Jan 25, 2018
Slide 1: Preface and Forward-Looking Statements
Preface 2323 Victory Ave, Suite 1400 Dallas, TX 75219 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 Inc. (“H
Slide 2: Investor Highlights – Q4 2017
Investor Highlights – Q4 2017 Reported Excluding Tax Legislation1 Net Income Diluted - EPS ROAA ROAE • • Growth in bank non-covered HFI loans2 of 7% and deposit growth of 13% versus prior year HilltopSecurities generated 17% pre-tax margin during the fourth quarter with net revenue growing by 7% ver
Slide 3: Business Results – Q4 2017
Business Results – Q4 2017 • Modest year over year pre-tax decline in Banking largely driven by $5.3 million reduction in purchase accounting impact. Franchise results continue to improve driven by bank non-covered HFI loan growth of 7% and strong NIM of 4.23% (taxable equivalent NIM of 4.24%) Mortg
Slide 4: Hilltop Holdings – Financial Summary
Hilltop Holdings – Financial Summary Noninterest income 290.5 298.5 309.1 1,205.1 1,287.0 PPNR1 $70.5 $49.7 $57.4 $257.6 $271.9 Pre-tax income $65.0 $48.4 $53.1 $243.3 $231.4 Revenue 12.0 10.2 17.4 56.1 64.9 Pre-tax income impact $6.4 $2.8 $11.7 $29.1 $46.7 ROAA 0.41% 0.90% 1.13% 1.03% 1.21% Efficie
Slide 5: Hilltop Holdings – Net Interest Income & Margin
Hilltop Holdings – Net Interest Income & Margin ($ in billions) • Net interest income of $109 million increased $5 million or 4% from fourth quarter 2016 Commercial loan yields, excluding loans HFS and margin loans, continue to increase with higher short-term rates • With the December Fed Funds incr
Slide 6: Hilltop Holdings – Noninterest Income
Hilltop Holdings – Noninterest Income ($ in millions) Mortgage Production Income (16.8) $344.7 Securities Related Fees & Commissions Net Insurance Premiums Earned 6.3 (2.7) Other (5.5) • Noninterest income of $291 million declined by $19 million compared to the fourth quarter 2016 primarily due to a
Slide 7: Hilltop Holdings – Noninterest Expenses
Hilltop Holdings – Noninterest Expenses ($ in millions) $366.2 Compensation and Benefits Occupancy and Equipment Professional Services Insurance Loss and LAE Other Expenses (3.1) 2.5 (18.8) (5.4) (2.3) • Noninterest expense of $329 million declined $27 million from the fourth quarter 2016, driven by
Slide 8: Hilltop Holdings – Loans
Hilltop Holdings – Loans 5.81% ($ in billions) 5.32% 5.28% Annualized Gross Loan Yield1: 5.08% 5.01% $6.5 $6.3 $6.3 $6.0 $6.1 Loan Growth Q4 2016 Non-Covered Loans Q1 2017 Q2 2017 Q3 2017 Q4 2017 Annualized Gross Loan Yield Covered Loans B/D Margin Loans Vs. Prior Quarter: (Non-Covered Loans) Notes:
Slide 9: Hilltop Holdings – Deposits
Hilltop Holdings – Deposits 0.39% ($ in billions) 0.36% 0.30% 0.27% 0.22% Cost of Deposits: $8.0 Q4 2016 Q1 2017 Q2 2017 Q3 2017 B/D Sweep Deposits Q4 2017 Cost of Deposits (%) Noninterest bearing Interest bearing Vs. Prior Quarter: (Total Deposits) Notes: Noninterest-bearing deposits excludes broke
Slide 10: PlainsCapital Bank – Q4 2017 Highlights
PlainsCapital Bank – Q4 2017 Highlights Net Interest Income Provision for Loan Losses Noninterest Income Noninterest Expense 94.4 4.4 13.6 63.7 93.0 5.2 10.6 62.3 363.1 40.7 52.6 244.7 366.6 14.1 59.9 248.4 ROAA Efficiency Ratio1 Fee Income Ratio2 Net Interest Margin – TE Assets ($bn) 1.09% 59.0% 12
Slide 11: HilltopSecurities – Q4 2017 Highlights
HilltopSecurities – Q4 2017 Highlights Net Interest Income Provision for Loan Losses 8.9 (0.0) 12.7 0.3 31.2 (0.1) 43.7 0.2 Compensation/Net Revenue (%) FDIC Insured Balances at PCB 58.6% $1,000 61.4% $1,301 60.6% $1,000 60.8% $1,301 Noninterest Income Noninterest Expense 98.5 107.4 101.6 94.9 385.8
Slide 12: PrimeLending – Q4 2017 Highlights
PrimeLending – Q4 2017 Highlights Net Interest Income Noninterest Income Noninterest Expense (3.7) 162.3 149.3 (0.1) 145.3 137.6 (11.6) 704.1 614.7 (0.9) 632.4 581.9 Origination Volume ($mm) % Purchase Sales Volume ($mm) Servicing Assets ($mm) $3,888 71% $3,724 $62 $3,603 80% $3,792 $55 $15,460 73%
Slide 13: National Lloyds Corporation – Q4 2017 Highlights
National Lloyds Corporation – Q4 2017 Highlights Net Interest Income Noninterest Income Noninterest Expense 0.9 40.5 28.1 0.9 37.8 24.9 3.2 164.8 146.6 2.9 151.4 158.4 Direct Premiums Written Net Premiums Earned 33.0 38.3 29.6 35.6 153.0 155.5 137.1 142.3 • Pre-tax income of $13.8 million in Q4 2017
Slide 14: National Lloyds Corporation — Q4 2017 Highlights
National Lloyds Corporation — Q4 2017 Highlights ry ighlights 2016 ions) ‘Net Interest Income 09 09 32 29 Direct PremiumsWritten go 296 153.0 1 Noninterest Income 405 378 1648 ASL4_——_Net Premiums Earned 383586 Noninterest Expense 2812494661584 Income ReforeTaxes $13.3 ——$13.8 Sang (S41) + Pre-tax i
Slide 15: Questions?
Questions? rman FAP
Slide 16: Hilltop Holdings – Balance Sheet Summary
Hilltop Holdings – Balance Sheet Summary 487,382 1,852,094 1,715,357 354,969 1,809,984 1,939,321 690,764 1,215,372 1,795,463 Cash & Federal Funds Securities Loans Held for Sale 6,273,669 (60,957) 6,212,712 6,148,813 (58,779) 6,090,034 5,843,499 (54,186) 5,789,313 Non-Covered Loans HFI, Gross Allowan
Slide 17: PlainsCapital Bank – Energy Exposure
PlainsCapital Bank – Energy Exposure • No energy SNC’s in PCB loan portfolio Unfunded energy commitments are subject to borrowing bases and credit review before draw-downs Total exposure remains consistent with historical trends Classifieds for the quarter were up $4.2 million • • • Note: (1) Total
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”). You should not view these di
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 (“TCE”), is a non-GAAP financial measure. Tangible common equity to tangible assets is defined as our total stockholders’ equity, excluding preferred stock, reduced by goodw
Slide 20: Non-GAAP to GAAP Reconciliation (Continued)
Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures (Continued) On December 22, 2017, the Tax Cuts & Jobs Act (“Tax Legislation”) was signed into law. The fourth quarter of 2017 and full-year 2017 results reflect the estimated impact of the enactment of the Ta
Slide 21: Non-GAAP to GAAP Reconciliation (Continued)
Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures (Continued) On December 22, 2017, the Tax Cuts & Jobs Act ("Tax Legislation”) was signed into law. The fourth quarter of 2017 and full-year 2017 results reflect the estimated impact of the enactment of the Ta