Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Investor Presentation (May 2020)
36 slides from Hilltop's investor presentation, May 4, 2020
Slide 1: Hilltop Holdings Inc. Investor Presentation May 2020
Hilltop Holdings Inc. Investor Presentation May 2020
Slide 2: Preface and Forward-Looking Statements
Preface Corporate Headquarters 6565 Hillcrest Ave Dallas, TX 75205 Phone: 214-855-2177 www.hilltop-holdings.com Additional Information Please Contact: Erik Yohe Phone: 214-525-4634 Email: eyohe@hilltop-holdings.com FORWARD-LOOKING STATEMENTS This presentation and statements made by representatives o
Slide 3: Company Overview
Company Overview
Slide 4: Hilltop Holdings – Overview
Hilltop Holdings – Overview Hilltop Holdings is a Dallas, Texas-based diversified financial holding company with a complementary set of operating companies Hilltop Holdings Inc. ranked No. 35 on Forbes’ best banks listing of the Top 100 largest publicly traded banks and thrifts(1) Hilltop provides b
Slide 5: Hilltop Holdings – Timeline
Hilltop Holdings – Timeline 2004 Operated as Affordable Residential Communities (“ARC”) and completed IPO on NYSE 2005 Gerald J. Ford invested in ARC and joined the Board of Directors 2006 Announced the acquisition of National Lloyds Corporation (completed in 2007) 2007 Company sold all assets of ma
Slide 6: Hilltop Holdings – Leadership
Hilltop Holdings – Leadership Gerald J. Ford, Hilltop’s Chairman and largest shareholder, has successfully acquired, managed and sold banks and other financial institutions for the past 45 years Our senior management teams have complimentary expertise in management and acquisitions Subsidiary CEOs J
Slide 7: Return on Average Assets (ROAA) History
Return on Average Assets (ROAA) History 2013 - Q1 2020 Average ROAA: 1.37% Note: 2017 includes estimated non-cash, non-recurring charges to Hilltop consolidated and banking segment results of $28.4 million and $25.7 million, respectively, primarily attributable to the revaluation of deferred tax ass
Slide 8: Capital Ratios
Tier 1 Leverage RatioCommon Equity Tier 1 Ratio Tier 1 Capital RatioTotal Capital Ratio
Slide 9: Asset Quality History
Asset Quality History NPAs / Loans HFI + OREO 1 NCOs / Average HFI Loans Related to non-recurring, full charge-off of $24.5 million loan Note: Figures represent bank asset quality metrics only (excludes Loans HFS and Broker Dealer Margin Loans). Figures prior to Q4 2018 include both covered and non-
Slide 10: COVID-19 Update
COVID-19 Update
Slide 11: COVID-19 Response: Employees, Giving, Remote Work, Cost and Capital
Employee Benefits & Health Charitable Giving Remote Work Cost and Capital Management •COVID-19 testing 100% covered under employee benefits plan •All employees continue to be paid regardless of ability to work from home •Social distancing and no face to face meetings in offices •Tracking COVID-19 ca
Slide 12: COVID-19 Modified Loan Summary and PPP
COVID-19 Modified Loan SummaryPaycheck Protection Program (PPP) Partnering with borrowers that have been impacted by COVID-19 Approximately $775 million of loan modification (up to 90 days) requests in process as of April 23, 2020 Completed principal only deferrals of PlainsCapital Bank, an SBA pref
Slide 13: Recent Results & Operational Highlights
Recent Results & Operational Highlights
Slide 14: Investor Highlights – Q1 2020
Investor Highlights – Q1 2020 HTH Consolidated1 Continuing Operations Net Income EPS – Diluted ROAA ROAE $$4298..61MM $ 0.5530 01.467%95.7368%% $ 46.5 MM$ 0.511.41%9.30% Diversified Growth Value Creation and Capital Optimization Mortgage origination volume of $3.6 billion in Q1 2020 grew by $1.2 bil
Slide 15: Pre-Tax Income vs. Prior Year
Pre-Tax Income vs. Prior Year ($ in millions) Business Drivers for1Q210210920 Banking pre-tax income of $11.5 million declined by approximately $30.1 million from Q1 2019 as the first CECL-impacted provision expense equated to $34.3 million. Partially offsetting the provision expense was increased n
Slide 16: Key Metrics
Notes: Pre-provision net revenue is calculated as the sum of net interest income and noninterest income less noninterest expense (except provision for credit losses). Includes impact of Purchase Accounting, FDIC Indemnification and True-up accrual. Key metrics are for HTH Consolidated results. Based
Slide 17: CECL Loans HFI Rollforward
CECL Loans HFI Rollforward 12/31/19 to 3/31/20 $12.6 ($1.5) $17.6 $16.9 $106.7 CRE 53.9 C&I 38.6 Construction 6.4 1-4 SFR 6.4 Consumer 1.2 Broker Dealer 0.3 $61.1 $73.7 Total$106.7 During Q1 2020, Total Allowance for Credit Losses (ACL) on Loans HFI increased to $106.7 million PCB/HTS reserves on in
Slide 18: Average Earning Assets and NIM Trends
Average Earning Assets and NIM TrendsNet Interest Income Highlights ($ in billions) 3.66% 3.47%3.43% 3.27% 3.39% Net interest income of $110.3 million increased $2.0 million, or 2%, from Q1 2019 Q1 2020 loan accretion equated to $6.6 million, a decline of $2.0 million versus Q1 2019 $11.8 $12.3 $12.
Slide 19: Noninterest Income & Fee Income Ratio
Noninterest Income & Fee Income Ratio 1 Year-over-Year Noninterest Income ($MM) Q1 2019 $216.0 Mortgage Production Income & Fees61.0 $276.7 $306.5 $263.6 $271.7 Securities Related Fees & Commissions7.1 Other Income(12.4) Q1 2020 $271.7 Noninterest Income Highlights 66.6% 72.1%73.1%70.4%71.1% Noninte
Slide 20: Noninterest Expenses and Efficiency Ratio
Noninterest Expenses and Efficiency Ratio1 Year-over-Year Noninterest Expense ($MM) Q1 2019 $278.7 Compensation and Benefits9.7 Noninterest Expense Highlights Total compensation increased by $9.7 million from Q1 2019 primarily driven by increased variable compensation related to higher mortgage volu
Slide 21: Loan Mix and Yield
Loan Mix and Yield ($ in billions, ending and average balances) Notes: The sum of the period amounts may not equal the total amounts due to rounding.
Slide 22: Hilltop Holdings — Asset Quality
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Slide 23: Deposit Mix and Cost
Deposit Mix and Cost ($ in billions, ending and average balances) Notes: Noninterest-bearing deposits excludes broker-dealer sweep deposits.
Slide 24: Loan to Deposit Trending and Liquidity
Loan to Deposit Trending 12.0 10.0 104.1% 106.6% 105.0% 2.12.4 Loan/Deposit Ratio (%) 105.0% ($ billions) 6.0 1.11.62.0 97.3% 98.3% 101.0% 97.0% 93.0% 4.0 2.0 0.0 7.07.27.37.47.3 Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020 89.0% 85.0% 81.0% 77.0% Loans HFILoans HFSLoan/Deposit Ratio Hilltop’s Loan to deposi
Slide 25: Banking Segment Q1 2020 Highlights
Income Before Taxes$41.6$11.5 Q1 2020 Highlights Q1 2019 Key Highlights Q1 2019 Q1 2020 ROAA 1.34% 0.33% Efficiency Ratio1 58.8% 55.5% Net Interest Margin 4.24% 3.81% Assets ($bn) $9.7 $11.6 Year-over-year HFI loan growth of $319 million, or 5% National Warehouse Lending volume increased $305 millio
Slide 26: PlainsCapital Bank – Impacted Industry Credit Portfolio
PlainsCapital Bank – “Impacted Industry” Credit Portfolio The “Impacted Industry” portfolio represents loans within certain non-energy industries we have identified as potentially being severely impacted by COVID-19 The outstanding balance of the “Impacted Industry” portfolio was $1.1 billion as of
Slide 27: PlainsCapital Bank Energy Exposure
PlainsCapital Bank’s outstanding energy exposure equates to $146 million in outstanding balance, or 2.1% of the total loan Energy Exposure Breakdown by Type portfolio, down from $239 million, or 4.6%, in Q1 2016 Q1 2020 energy ACL of $13.7 million, representing 9.4% of outstanding balances No energy
Slide 28: Securities Portfolio
Cash and Cash Equivalents $492.1 million Portfolio Breakout by Type(1) A gency Securities Portfolio Weighted Average Yield2 Effective Duration $1.3 billion 2.5% 2.2 7% MBS PT 31 % Muni 9% A gency CMBS 24% A djustable Rate MBS/CMO 8% Fix ed Rate CMO 21 % Portfolio Breakout by ClassificationPortfolio
Slide 29: Interest Rate Sensitivity
Estimated impact of a range of changes in interest rates (bps) on net interest income and on economic value of equity for the banking segment:
Slide 30: Mortgage Origination Key Highlights
Key Highlights ($ in millions) Q1 2019 Q1 2020 Origination Volume ($mm) $2 ,4 4 7 $3 ,6 2 3 % Purchase 84 % 6 5% Sales Volume ($mm) $2 ,7 1 1 $3 ,4 86 Servicing Asset ($mm) $6 4 $3 1 Origination volume of $3.6 billion in Q1 2020 increased from Q1 2019 by $1.2 billion, or 48% Q1 2020 loan sales to PC
Slide 31: Broker-Dealer Key Highlights
Income Before Taxes $16.4$18.2 Key Highlights ($ in millions) Q1 2019 Q1 2020 Compensation/Net Revenue (%)60.6%56.9% FDIC Insured Balances at PCB$1,302$1,500 Other FDIC Insured Balances$747$761 Public Finance Offerings$11,792$11,522 TBA Volume$1,148$1,954 Highlights Q1 2019Net Revenues by Business L
Slide 32: Insurance Key Highlights
Key Highlights ($ in millions) Q1 2019 Q1 2020 Direct Premiums Written30.830.0 Net Premiums Earned33.232.6 QQ1 420220018 HighlightsCombined Ratio National Lloyds moved to discontinued operations The sale of National Lloyds Corporation to Align Financial Holdings is expected to close during the secon
Slide 33: Hilltop Holdings — 2020 Commentary
Hilltop Holdings —- 2020 Commentary Ra | Set Cormeen + PPP loan originations expected to provide majority of loan growth Suspending the retention of single family mortgage loans at PlainsCapital Bank + Commercial loan pipelines remain solid, clients delaying pricing and funding until further economi
Slide 34: Entity: Hilltop Holdings Inc.
Entity: Hilltop Holdings Inc.
Slide 35: Appendix
Appendix sai ae
Slide 36: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures (Continued) This presentation includes two non-GAAP financial measures, Tangible Common Equity and Tangible book value per share, or TBVPS. Tangible common equity is defined as our total stockholders’ equity,