Hilltop Holdings Inc. · NYSE:HTH
Hilltop — Q4 2016 Earnings Presentation
23 slides from Hilltop's earnings presentation, Jan 26, 2017
Slide 1: Forward-Looking Statements
Preface 200 Crescent Court, Suite 1330 Dallas, TX 75201 Phone: (214) 855-2177 www.hilltop-holdings.com FORWARD-LOOKING STATEMENTS Please contact: Isabell Novakov Phone: (214) 252-4029 Email: [email protected] This presentation and statements made by representatives of Hilltop Holdings In
Slide 2: Hilltop Holdings – Q4 2016 Highlights
Hilltop Holdings – Q4 2016 Highlights • For the fourth quarter of 2016, net income to common stockholders was $35.3 million, or $0.36 per diluted share • During the fourth quarter of 2016, results included a specific legal reserve of $16.0 million pre-tax related to one matter involving HilltopSecur
Slide 3: Hilltop Holdings – Financial Summary
Hilltop Holdings – Financial Summary 0.87% 0.93% 0.93% 0.87% 0.93% Covered Loans 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 to
Slide 4: Operating Report – Subsidiary Updates
Operating Report – Subsidiary Updates Note: Mortgage market share per Mortgage Bankers Association as of December 14, 2016. (1) Non-covered HFI loan growth excludes impact of broker-dealer margin loans. (2) See appendix for reconciliation of NIM to taxable equivalent NIM, as well as taxable equivale
Slide 5: Operating Report – Subsidiary Updates
Operating Report – Subsidiary Updates Note: (1) See appendix for reconciliation of reported pre-tax income to adjusted pre-tax income. 6 HilltopSecurities •In Q4 2016, HilltopSecurities had a pre-tax loss of $24 thousand and $67 thousand of pre-tax income after adjusting for transaction and integrat
Slide 6: Hilltop Holdings – Net Interest Income & Margin
Hilltop Holdings – Net Interest Income & Margin • Reported NIM and taxable equivalent NIM increased by 15 bps in Q4 2016 compared to Q3 2016 Interest Earning Assets • Increase primarily a result of higher accretion, higher loan balance and improved yield on taxable securities Decline in yield on oth
Slide 7: Hilltop Holdings – Noninterest Income
Hilltop Holdings – Noninterest Income • • Noninterest income for Q4 2016 was $309.1 million, up 11.6% versus Q4 2015 Net gains from the sale of loans, other mortgage production income, and mortgage loan origination fees increased $28.5 million, or 21.4%, from Q4 2015 to $162.1 million in Q4 2016, re
Slide 8: Hilltop Holdings – Noninterest Expense
Hilltop Holdings – Noninterest Expense • • Noninterest expense was $355.8 million in Q4 2016, up 5.0% from Q4 2015 Compensation was $208.8 million in Q4 2016 (compared to $182.5 million in Q4 2015), representing 59% of noninterest expense for the quarter • During Q4 2016 we incurred no employee comp
Slide 9: Hilltop Holdings – Balance Sheet
Hilltop Holdings – Balance Sheet • Total assets increased 2.5% in Q4 2016, primarily driven by growth in broker-dealer & clearing org receivables, non-covered loans HFI and loans HFS • Loans HFS increased $122.4 million, or 7.3%, from Q3 2016 to $1.8 billion at Q4 2016 • Gross non-covered loans HFI
Slide 10: PlainsCapital Bank – Q4 2016 Highlights
PlainsCapital Bank – Q4 2016 Highlights • Pre-tax income increased to $39.9 million in Q4 2016 versus $34.2 million in Q4 2015 primarily due to improved net interest income, flat provision expense and lower noninterest expenses Net interest income improved due to non-covered loan growth and increase
Slide 11: PlainsCapital Bank – Energy Exposure
PlainsCapital Bank – Energy Exposure • • No energy SNC’s in 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 bala
Slide 12: PlainsCapital Bank – Credit Quality and Capital Ratios
PlainsCapital Bank – Credit Quality and Capital Ratios $70.0 0.30% 18.00% 16.99% 15.87% 15.90% 15.51% 15.38% 16.00% $60.0 16.25% 0.24% 0.24% 0.24% 0.25% 15.15% 15.12% 14.77% 14.64% 14.00% 0.21% 0.20% $50.0 13.22% 0.20% 12.00% 12.72% 12.70% 12.65% 12.35% $40.0 10.00% 0.15% $29.9 $30.1 $27.7 $30.0 8.0
Slide 13: PrimeLending – Q4 2016 Highlights
PrimeLending – Q4 2016 Highlights • Pre-tax income increased to $9.4 million in Q4 2016 versus $3.8 million in Q4 2015 Origination volume of $3.9 billion in Q4 2016 was $822.4 million greater than Q4 2015 • Purchase volume (as a % of total volume) declined to 71.3% in Q4 2016 from 76.5% in Q4 2015 •
Slide 14: HilltopSecurities – Q4 2016 Highlights
HilltopSecurities – Q4 2016 Highlights • Pre-tax loss of $24 thousand in Q4 2016 versus pre-tax income of $3.7 million in Q4 2015 • Q4 2016 results include pre-tax integration related costs of $0.1 million directly attributable to the acquisition of SWS • After adjusting for the pre-tax integration
Slide 15: National Lloyds Corporation – Q4 2016 Highlights
National Lloyds Corporation – Q4 2016 Highlights • Pre-tax income of $13.3 million in Q4 2016 relative to pre-tax income of $7.0 million in Q4 2015 • Q4 2015 results include impact of severe storms in North Texas that led to elevated losses • The seasonal decline in severe storms in Q4 2016 resulted
Slide 16: National Lloyds Corporation — Q4 2016 Highlights
National Lloyds Corporation — Q4 2016 Highlights + Pre-tax income of $13.3 million in Q4 2016 relative to pre-tax income of $7.0 million in Qq 2015 Nat Interest Income 803 95a t + Q4 2015 results include impact of severe storms in North Texas that led to elevated losses Provision for Loan Loses - ~
Slide 17: Questions?
Questions? nop OP
Slide 18: Hilltop Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures
Hilltop Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures Hilltop presents one measure on pages six and fifteen and two measures on pages three, four, five and seven of this presentation that are not measures of financial performance recognized by generally
Slide 19: Hilltop Non-GAAP to GAAP Reconciliation (Continued)
Hilltop Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures (Continued) NIM Add: Taxable Equivalent Adjustment1 Non-GAAP Taxable Equivalent NIM 3.70 3.65 3.80 3.78 3.74 Non-GAAP Taxable Equivalent NIM Less: Purchase Accounting Adjustment Non-GAAP Pre-PAA Taxab
Slide 20: Loan Portfolio by Classification
Loan Portfolio by Classification C&I 1% C&D 4% C&D 3% C&I 1% Real Estate 95% Real Estate 96% Q4 2016 Total: $122.4 million Q4 2016 Total: $133.8 million Consumer 1% C&D 7% Broker-dealer C&I 17% 9% Consumer 1% C&I 29% C&D 14% Real Estate 48% Real Estate 76% Q4 2016 Total: $51.4 million Q4 2016 Total:
Slide 21: PCI Loans at Dec. 31, 2016
PCI Loans at Dec. 31, 2016 • 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 22: Non-PCI Loans at Dec. 31, 2016
Non-PCI Loans at Dec. 31, 2016 • 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 23: Non-PCI Loans at Dec. 31, 2016
Non-PCI Loans at Dec. 31, 2016 + 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