Hilltop Holdings Inc. Announces Financial Results for Second Quarter 2020

Company Release - 7/30/2020 5:45 PM ET

DALLAS--(BUSINESS WIRE)-- Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2020. Hilltop produced income from continuing operations to common stockholders of $97.7 million, or $1.08 per diluted share, for the second quarter of 2020, compared to $60.1 million, or $0.64 per diluted share, for the second quarter of 2019. Including income from discontinued operations related to the insurance segment, income applicable to common stockholders was $128.5 million, or $1.42 per diluted share, for the second quarter of 2020, compared to $57.8 million, or $0.62 per diluted share, for the second quarter of 2019. Hilltop’s financial results from continuing operations for the second quarter of 2020 reflect both a significant increase in mortgage origination segment net gains from sales of loans and other mortgage production income and a significant build in the allowance for credit losses associated with the deterioration of the economic outlook from the first quarter of 2020 attributable to the market disruption and economic uncertainties caused by COVID-19.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.09 per common share, payable on August 31, 2020, to all common stockholders of record as of the close of business on August 14, 2020.

As previously announced on April 30, 2020, in light of the uncertain outlook for 2020 due to the COVID-19 pandemic, and Hilltop’s commitment to maintain strong capital and liquidity to meet the needs of its customers and communities during this exceptional period of economic uncertainty, Hilltop’s Board of Directors suspended its stock repurchase program. Hilltop’s Board of Directors has the ability to reinstate the share repurchase program at its discretion as circumstances warrant.

The COVID-19 pandemic has negatively impacted financial markets and overall economic conditions, and is expected to continue to have implications on our business and operations. The extent of the impact of COVID-19 on our operational and financial performance for the remainder of 2020 is dependent on certain developments, including, among others, the broader adverse implications of COVID-19 on our customers and clients, potential further disruption and deterioration in the financial services industry, including the mortgage servicing and commercial paper markets, and additional, or extended, federal, state and local government orders and regulations that might be imposed in response to the pandemic, all of which are uncertain.

Jeremy Ford, President and CEO of Hilltop, said, “While these remain very challenging times and there is significant uncertainty about the future impacts from the pandemic, I am very proud of our teammates across Hilltop as they continue to execute and display compassion for our clients and each other. Our results from the second quarter demonstrate the strength and durability of our operating model as the mortgage franchise delivered record pre-tax income of $138 million on $6 billion of mortgage originations, while the securities business grew pre-tax income by 26% to $28 million from strength in the fixed income capital markets and structured finance business lines. While the Bank incurred a pre-tax loss of $17 million, it generated pre-provision net revenue, or PPNR, of $48 million during the quarter driven by solid net interest income and lower operating expenses. The Bank also recognized approximately $66 million of provision expense related to significant deterioration in the economic outlook from the end of the first quarter through June. In addition to exceptional PPNR performance, we were also able to fortify our strong excess capital and liquidity positions during the quarter by executing a subordinated debt offering and closing the sale of National Lloyds.”

___________________________
Note: Pre-provision net revenue, or PPNR, is a non-GAAP financial measure which represents pre-tax income (loss) plus provision for credit losses. We believe that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.


Second Quarter 2020 Highlights for Hilltop:

  • For the second quarter of 2020, net gains from sales of loans and other mortgage production income within our mortgage origination segment was $295.3 million, compared to $131.2 million in the second quarter of 2019, a 125.1% increase;
    • Mortgage loan origination production volume was $6.1 billion during the second quarter of 2020, compared to $4.0 billion in the second quarter of 2019.
  • The provision for credit losses was $66.0 million during the second quarter of 2020, compared to $34.5 million in the first quarter of 2020;
    • This significant increase in the provision for credit losses during the second quarter of 2020 was primarily associated with the increase in the expected lifetime credit losses under CECL on collectively evaluated loans within the portfolio attributable to the continued market disruption and related macroeconomic uncertainties caused by COVID-19.
  • Hilltop’s consolidated annualized return on average assets and return on average equity for the second quarter of 2020 were 3.30% and 23.32%, respectively, compared to 1.74% and 11.63%, respectively, for the second quarter of 2019;
  • Hilltop’s book value per common share increased to $25.08 at June 30, 2020, compared to $23.71 at March 31, 2020;
  • Hilltop’s total assets were $16.9 billion at June 30, 2020 compared to $15.7 billion at March 31, 2020;
    • Included $249.8 million in assets of discontinued operations associated with the insurance segment at March 31, 2020.
  • Loans1, net of allowance for credit losses, increased to $7.3 billion compared to $6.7 billion at March 31, 2020;
    • Included supporting our impacted banking clients through funding of over 2,800 loans totaling approximately $672 million at June 30, 2020 through the Paycheck Protection Program, or PPP.
  • Non-performing loans were $68.3 million, or 0.65% of total loans at June 30, 2020, compared to $87.4 million, or 0.89% of total loans, at March 31, 2020;
  • As of June 30, 2020, we approved approximately $968 million in COVID-19 related loan modifications;
    • Extent of progression of these loans into non-performing loans during future periods is uncertain.
  • Loans held for sale increased by 6.5% from March 31, 2020 to $2.6 billion at June 30, 2020;
  • Total deposits were $11.6 billion at June 30, 2020, compared to $9.9 billion at March 31, 2020;
  • On May 11, 2020, Hilltop completed the issuance and sale of $50 million aggregate principal amount of 5.75% fixed-to-floating rate subordinated notes due May 2030 and $150 million aggregate principal amount of 6.125% fixed-to-floating rate subordinated notes due May 2035;
  • Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio2 of 12.60% and a Common Equity Tier 1 Capital Ratio of 18.46% at June 30, 2020;
    • Ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period.
  • Hilltop’s consolidated net interest margin3 decreased to 2.80% for the second quarter of 2020, compared to 3.41% in the first quarter of 2020;
  • For the second quarter of 2020, noninterest income from continuing operations was $468.1 million, compared to $276.7 million in the second quarter of 2019, a 69.2% increase;
  • For the second quarter of 2020, noninterest expense from continuing operations was $370.2 million, compared to $304.1 million in the second quarter of 2019, a 21.7% increase; and
  • Hilltop’s effective tax rate from continuing operations was 23.3% during the second quarter of 2020, compared to 23.0% during the same period in 2019.

Discontinued Operations

On June 30, 2020, Hilltop completed the sale of its insurance segment, National Lloyds Corporation, for cash proceeds of $154.1 million. Insurance segment results and its assets and liabilities have been presented as discontinued operations. Included within discontinued operations for the second quarter of 2020 is the recognition of a gain associated with this transaction of $32.3 million, net of $5.1 million in transaction costs and subject to post-closing adjustments. The resulting book gain from this sale transaction was not recognized for tax purposes pursuant to the rules under the Internal Revenue code. Income (loss) from discontinued operations, net of income taxes, was $30.8 million, or $0.34 per diluted share, for the second quarter of 2020, compared to ($2.3) million, or ($0.02) per diluted share, for the second quarter of 2019.

___________________________
Note: “Consolidated” refers to our consolidated financial position and consolidated results of operations, including discontinued operations and assets and liabilities classified as held for sale.
1 “Loans” reflect loans held for investment excluding broker-dealer loans, net of allowance for credit losses, of $422.1 million and $505.9 million at June 30, 2020 and March 31, 2020, respectively.
2 Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets.
3 Net interest margin is defined as net interest income divided by average interest-earning assets.






Consolidated Financial and Other Information

 

Consolidated Balance Sheets

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(in 000's)

 

2020

 

2020

 

2019

 

2019

 

2019

Cash and due from banks

 

$

1,655,492

 

 

$

524,370

 

 

$

433,626

 

 

$

281,445

 

 

$

303,424

 

Federal funds sold

 

 

385

 

 

 

401

 

 

 

394

 

 

 

423

 

 

 

521

 

Assets segregated for regulatory purposes

 

 

194,626

 

 

 

178,805

 

 

 

157,436

 

 

 

83,878

 

 

 

151,271

 

Securities purchased under agreements to resell

 

 

161,457

 

 

 

23,356

 

 

 

59,031

 

 

 

49,998

 

 

 

50,660

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading, at fair value

 

 

648,037

 

 

 

393,581

 

 

 

689,576

 

 

 

707,268

 

 

 

601,524

 

Available for sale, at fair value, net

 

 

1,091,348

 

 

 

972,318

 

 

 

911,493

 

 

 

915,334

 

 

 

916,519

 

Held to maturity, at amortized cost, net

 

 

343,198

 

 

 

355,110

 

 

 

386,326

 

 

 

371,361

 

 

 

365,905

 

Equity, at fair value

 

 

122

 

 

 

107

 

 

 

166

 

 

 

164

 

 

 

150

 

 

 

 

2,082,705

 

 

 

1,721,116

 

 

 

1,987,561

 

 

 

1,994,127

 

 

 

1,884,098

 

Loans held for sale

 

 

2,592,307

 

 

 

2,433,407

 

 

 

2,106,361

 

 

 

1,984,231

 

 

 

1,609,477

 

Loans held for investment, net of unearned income

 

 

7,849,904

 

 

 

7,345,250

 

 

 

7,381,400

 

 

 

7,321,208

 

 

 

7,202,604

 

Allowance for credit losses

 

 

(156,383

)

 

 

(106,739

)

 

 

(61,136

)

 

 

(55,604

)

 

 

(55,177

)

Loans held for investment, net

 

 

7,693,521

 

 

 

7,238,511

 

 

 

7,320,264

 

 

 

7,265,604

 

 

 

7,147,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-dealer and clearing organization receivables

 

 

1,222,627

 

 

 

1,838,789

 

 

 

1,780,280

 

 

 

1,731,979

 

 

 

1,707,249

 

Premises and equipment, net

 

 

210,975

 

 

 

215,261

 

 

 

210,375

 

 

 

203,601

 

 

 

198,266

 

Operating lease right-of-use assets

 

 

119,954

 

 

 

113,395

 

 

 

114,320

 

 

 

119,035

 

 

 

120,965

 

Other assets

 

 

709,246

 

 

 

876,615

 

 

 

460,258

 

 

 

578,422

 

 

 

547,768

 

Goodwill

 

 

267,447

 

 

 

267,447

 

 

 

267,447

 

 

 

267,447

 

 

 

267,447

 

Other intangible assets, net

 

 

23,374

 

 

 

25,019

 

 

 

26,666

 

 

 

28,432

 

 

 

30,308

 

Assets of discontinued operations

 

 

 

 

 

249,758

 

 

 

248,429

 

 

 

248,407

 

 

 

246,989

 

Total assets

 

$

16,934,116

 

 

$

15,706,250

 

 

$

15,172,448

 

 

$

14,837,029

 

 

$

14,265,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

3,467,500

 

 

$

2,865,192

 

 

$

2,769,556

 

 

$

2,732,325

 

 

$

2,598,253

 

Interest-bearing

 

 

8,182,098

 

 

 

7,082,297

 

 

 

6,262,658

 

 

 

5,998,547

 

 

 

5,864,826

 

Total deposits

 

 

11,649,598

 

 

 

9,947,489

 

 

 

9,032,214

 

 

 

8,730,872

 

 

 

8,463,079

 

Broker-dealer and clearing organization payables

 

 

1,158,628

 

 

 

1,259,181

 

 

 

1,605,518

 

 

 

1,546,163

 

 

 

1,531,891

 

Short-term borrowings

 

 

720,164

 

 

 

1,329,948

 

 

 

1,424,010

 

 

 

1,502,755

 

 

 

1,338,893

 

Securities sold, not yet purchased, at fair value

 

 

55,340

 

 

 

22,768

 

 

 

43,817

 

 

 

59,249

 

 

 

45,447

 

Notes payable

 

 

450,158

 

 

 

244,042

 

 

 

256,269

 

 

 

217,841

 

 

 

204,423

 

Operating lease liabilities

 

 

131,411

 

 

 

124,123

 

 

 

125,619

 

 

 

128,295

 

 

 

129,858

 

Junior subordinated debentures

 

 

67,012

 

 

 

67,012

 

 

 

67,012

 

 

 

67,012

 

 

 

67,012

 

Other liabilities

 

 

409,672

 

 

 

408,224

 

 

 

348,519

 

 

 

355,629

 

 

 

284,136

 

Liabilities of discontinued operations

 

 

 

 

 

139,730

 

 

 

140,674

 

 

 

145,786

 

 

 

149,326

 

Total liabilities

 

 

14,641,983

 

 

 

13,542,517

 

 

 

13,043,652

 

 

 

12,753,602

 

 

 

12,214,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

902

 

 

 

901

 

 

 

906

 

 

 

906

 

 

 

928

 

Additional paid-in capital

 

 

1,439,686

 

 

 

1,437,301

 

 

 

1,445,233

 

 

 

1,441,604

 

 

 

1,473,599

 

Accumulated other comprehensive income

 

 

23,813

 

 

 

20,939

 

 

 

11,419

 

 

 

12,305

 

 

 

7,862

 

Retained earnings

 

 

797,331

 

 

 

676,946

 

 

 

644,860

 

 

 

602,835

 

 

 

544,275

 

Deferred compensation employee stock trust, net

 

 

778

 

 

 

774

 

 

 

776

 

 

 

789

 

 

 

788

 

Employee stock trust

 

 

(150

)

 

 

(150

)

 

 

(155

)

 

 

(170

)

 

 

(171

)

Total Hilltop stockholders' equity

 

 

2,262,360

 

 

 

2,136,711

 

 

 

2,103,039

 

 

 

2,058,269

 

 

 

2,027,281

 

Noncontrolling interests

 

 

29,773

 

 

 

27,022

 

 

 

25,757

 

 

 

25,158

 

 

 

24,524

 

Total stockholders' equity

 

 

2,292,133

 

 

 

2,163,733

 

 

 

2,128,796

 

 

 

2,083,427

 

 

 

2,051,805

 

Total liabilities & stockholders' equity

 

$

16,934,116

 

 

$

15,706,250

 

 

$

15,172,448

 

 

$

14,837,029

 

 

$

14,265,870

 

 
 
 
 

 

 

 

Three Months Ended

 

Consolidated Income Statements

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

(in 000's, except per share data)

 

2020

 

2020

 

2019

 

2019

 

2019

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

107,860

 

$

111,168

 

$

115,696

 

$

119,580

 

$

114,325

 

 

Securities borrowed

 

 

12,883

 

 

13,327

 

 

16,196

 

 

21,010

 

 

15,517

 

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

11,698

 

 

15,695

 

 

15,174

 

 

14,885

 

 

13,778

 

 

Tax-exempt

 

 

1,539

 

 

1,610

 

 

1,572

 

 

1,576

 

 

1,513

 

 

Other

 

 

951

 

 

3,075

 

 

3,180

 

 

3,889

 

 

3,867

 

 

Total interest income

 

 

134,931

 

 

144,875

 

 

151,818

 

 

160,940

 

 

149,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

11,947

 

 

15,124

 

 

17,480

 

 

18,887

 

 

18,036

 

 

Securities loaned

 

 

10,796

 

 

11,277

 

 

13,989

 

 

17,889

 

 

13,470

 

 

Short-term borrowings

 

 

2,367

 

 

4,744

 

 

6,244

 

 

8,166

 

 

6,897

 

 

Notes payable

 

 

3,768

 

 

2,418

 

 

2,337

 

 

2,265

 

 

2,165

 

 

Junior subordinated debentures

 

 

705

 

 

850

 

 

909

 

 

955

 

 

986

 

 

Other

 

 

790

 

 

126

 

 

99

 

 

132

 

 

162

 

 

Total interest expense

 

 

30,373

 

 

34,539

 

 

41,058

 

 

48,294

 

 

41,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

104,558

 

 

110,336

 

 

110,760

 

 

112,646

 

 

107,284

 

 

Provision for (reversal of) credit losses

 

 

66,026

 

 

34,549

 

 

6,880

 

 

47

 

 

(672

)

 

Net interest income after provision for (reversal of) credit losses

 

 

38,532

 

 

75,787

 

 

103,880

 

 

112,599

 

 

107,956

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gains from sale of loans and other mortgage production income

 

 

295,317

 

 

150,486

 

 

120,573

 

 

157,050

 

 

131,173

 

 

Mortgage loan origination fees

 

 

45,341

 

 

28,554

 

 

36,939

 

 

37,782

 

 

33,409

 

 

Securities commissions and fees

 

 

34,234

 

 

40,069

 

 

33,205

 

 

34,426

 

 

34,142

 

 

Investment and securities advisory fees and commissions

 

 

29,120

 

 

23,180

 

 

32,083

 

 

28,685

 

 

22,859

 

 

Other

 

 

64,113

 

 

29,424

 

 

40,846

 

 

48,562

 

 

55,120

 

 

Total noninterest income

 

 

468,125

 

 

271,713

 

 

263,646

 

 

306,505

 

 

276,703

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees' compensation and benefits

 

 

276,893

 

 

196,356

 

 

212,498

 

 

232,449

 

 

212,959

 

 

Occupancy and equipment, net

 

 

26,174

 

 

19,522

 

 

30,617

 

 

27,002

 

 

27,938

 

 

Professional services

 

 

15,737

 

 

14,798

 

 

17,211

 

 

15,472

 

 

13,773

 

 

Other

 

 

51,405

 

 

51,225

 

 

47,542

 

 

46,263

 

 

49,418

 

 

Total noninterest expense

 

 

370,209

 

 

281,901

 

 

307,868

 

 

321,186

 

 

304,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

 

136,448

 

 

65,599

 

 

59,658

 

 

97,918

 

 

80,571

 

 

Income tax expense

 

 

31,808

 

 

15,148

 

 

13,579

 

 

21,472

 

 

18,526

 

 

Income from continuing operations

 

 

104,640

 

 

50,451

 

 

46,079

 

 

76,446

 

 

62,045

 

 

Income (loss) from discontinued operations, net of income taxes

 

 

30,775

 

 

3,151

 

 

5,623

 

 

5,261

 

 

(2,254

)

 

Net income

 

 

135,415

 

 

53,602

 

 

51,702

 

 

81,707

 

 

59,791

 

 

Less: Net income attributable to noncontrolling interest

 

 

6,939

 

 

3,966

 

 

2,426

 

 

2,289

 

 

1,980

 

 

Income attributable to Hilltop

 

$

128,476

 

$

49,636

 

$

49,276

 

$

79,418

 

$

57,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

$

1.08

 

$

0.51

 

$

0.48

 

$

0.81

 

$

0.64

 

 

Earnings (losses) from discontinued operations

 

 

0.34

 

 

0.04

 

 

0.06

 

 

0.06

 

 

(0.02

)

 

 

 

$

1.42

 

$

0.55

 

$

0.54

 

$

0.87

 

$

0.62

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations

 

$

1.08

 

$

0.51

 

$

0.48

 

$

0.81

 

$

0.64

 

 

Earnings (losses) from discontinued operations

 

 

0.34

 

 

0.04

 

 

0.06

 

 

0.05

 

 

(0.02

)

 

 

 

$

1.42

 

$

0.55

 

$

0.54

 

$

0.86

 

$

0.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.09

 

$

0.09

 

$

0.08

 

$

0.08

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

90,164

 

 

90,509

 

 

90,606

 

 

91,745

 

 

93,399

 

 

Diluted

 

 

90,164

 

 

90,550

 

 

90,711

 

 

91,824

 

 

93,418

 

 

 
 
 
 

 

 

 

Three Months Ended June 30, 2020

Segment Results

 

 

 

 

 

 

 

Mortgage

 

 

 

 

 

 

All Other and

 

Hilltop

(in 000's)

 

Banking

 

Broker-Dealer

 

Origination

 

Insurance

 

Corporate

 

Eliminations

 

Consolidated

Net interest income (expense)

 

$

94,102

 

 

$

9,663

 

$

(1,667

)

 

$

 

 

$

(3,232

)

 

$

5,692

 

 

$

104,558

Provision for credit losses

 

 

65,600

 

 

 

426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

66,026

Noninterest income

 

 

10,656

 

 

 

122,961

 

 

340,487

 

 

 

 

 

 

550

 

 

 

(6,529

)

 

 

468,125

Noninterest expense

 

 

56,622

 

 

 

104,411

 

 

200,493

 

 

 

 

 

 

8,888

 

 

 

(205

)

 

 

370,209

Income (loss) from continuing operations before taxes

 

 

(17,464

)

 

 

27,787

 

 

138,327

 

 

 

 

 

 

(11,570

)

 

 

(632

)

 

 

136,448

Income (loss) from discontinued operations before taxes

 

 

 

 

 

 

 

 

 

 

(1,911

)

 

 

32,341

 

 

 

 

 

 

30,430

 

 

$

(17,464

)

 

$

27,787

 

$

138,327

 

 

$

(1,911

)

 

$

20,771

 

 

$

(632

)

 

$

166,878

 

 

 

 

Six Months Ended June 30, 2020

Segment Results

 

 

 

 

 

 

 

Mortgage

 

 

 

 

 

 

All Other and

 

Hilltop

(in 000's)

 

Banking

 

Broker-Dealer

 

Origination

 

Insurance

 

Corporate

 

Eliminations

 

Consolidated

Net interest income (expense)

 

$

188,025

 

 

$

22,836

 

$

(1,299

)

 

$

 

$

(4,888

)

 

$

10,220

 

 

$

214,894

Provision for credit losses

 

 

99,875

 

 

 

700

 

 

 

 

 

 

 

 

 

 

 

 

 

100,575

Noninterest income

 

 

19,427

 

 

 

209,170

 

 

519,455

 

 

 

 

 

2,838

 

 

 

(11,052

)

 

 

739,838

Noninterest expense

 

 

113,589

 

 

 

185,350

 

 

340,045

 

 

 

 

 

13,741

 

 

 

(615

)

 

 

652,110

Income (loss) from continuing operations before taxes

 

 

(6,012

)

 

 

45,956

 

 

178,111

 

 

 

 

 

(15,791

)

 

 

(217

)

 

 

202,047

Income from discontinued operations before taxes

 

 

 

 

 

 

 

 

 

 

2,103

 

 

32,341

 

 

 

 

 

 

34,444

 

 

$

(6,012

)

 

$

45,956

 

$

178,111

 

 

$

2,103

 

$

16,550

 

 

$

(217

)

 

$

236,491

 

 

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

Selected Financial Data

 

2020

 

2020

 

2019

 

2019

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hilltop Consolidated (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average stockholders' equity

 

 

23.32%

 

 

9.38%

 

 

9.43%

 

 

15.55%

 

 

11.63%

Return on average assets

 

 

3.30%

 

 

1.47%

 

 

1.40%

 

 

2.26%

 

 

1.74%

Net interest margin (2)

 

 

2.80%

 

 

3.41%

 

 

3.30%

 

 

3.45%

 

 

3.49%

Net interest margin (taxable equivalent) (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

 

2.81%

 

 

3.42%

 

 

3.31%

 

 

3.46%

 

 

3.49%

Impact of purchase accounting

 

 

10 bps

 

 

22 bps

 

 

19 bps

 

 

26 bps

 

 

23 bps

Book value per common share ($)

 

 

25.08

 

 

23.71

 

 

23.20

 

 

22.71

 

 

21.85

Shares outstanding, end of period (000's)

 

 

90,222

 

 

90,108

 

 

90,641

 

 

90,629

 

 

92,775

Dividend payout ratio (4)

 

 

6.32%

 

 

16.41%

 

 

14.71%

 

 

9.24%

 

 

12.92%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

3.11%

 

 

3.81%

 

 

3.77%

 

 

3.97%

 

 

4.06%

Net interest margin (taxable equivalent) (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

 

3.12%

 

 

3.82%

 

 

3.78%

 

 

3.98%

 

 

4.06%

Impact of purchase accounting

 

 

12 bps

 

 

30 bps

 

 

25 bps

 

 

35 bps

 

 

31 bps

Accretion of discount on loans ($000's)

 

 

3,217

 

 

6,639

 

 

5,698

 

 

7,868

 

 

6,444

Net charge-offs (recoveries) ($000's)

 

 

16,382

 

 

1,508

 

 

1,348

 

 

(380)

 

 

2,960

Return on average assets

 

 

-0.42%

 

 

0.33%

 

 

1.17%

 

 

1.51%

 

 

1.43%

Fee income ratio

 

 

10.2%

 

 

8.5%

 

 

10.8%

 

 

8.3%

 

 

10.3%

Efficiency ratio

 

 

54.1%

 

 

55.5%

 

 

54.9%

 

 

50.5%

 

 

55.9%

Employees' compensation and benefits ($000's)

 

 

31,583

 

 

32,347

 

 

31,455

 

 

31,309

 

 

33,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-Dealer Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue ($000's) (5)

 

 

132,624

 

 

99,382

 

 

113,128

 

 

121,466

 

 

116,969

Employees' compensation and benefits ($000's)

 

 

79,697

 

 

56,550

 

 

64,301

 

 

69,954

 

 

70,333

Variable compensation expense ($000's)

 

 

52,372

 

 

32,024

 

 

39,505

 

 

44,921

 

 

44,833

Compensation as a % of net revenue