Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2024. Hilltop produced income to common stockholders of $20.3 million, or $0.31 per diluted share, for the second quarter of 2024, compared to $18.1 million, or $0.28 per diluted share, for the second quarter of 2023. Hilltop’s financial results for the second quarter of 2024 included a decline in net interest income and a build in the allowance for credit losses due to an increase in the provision for credit losses within the banking segment, a decrease in net revenues within all of the broker-dealer segment’s business lines except public finance services, and a decline in noninterest expense within the mortgage origination segment.
Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.17 per common share payable on August 30, 2024, to all common stockholders of record as of the close of business on August 16, 2024. Additionally, during the second quarter of 2024, Hilltop paid $9.9 million to repurchase an aggregate of 320,000 shares of its common stock at an average price of $30.98 per share pursuant to the 2024 stock repurchase program. As a result of share repurchases during 2024, Hilltop has approximately $55 million of available share repurchase capacity through the expiration of the 2024 stock repurchase program in January 2025.
The impacts of economic headwinds that began in 2022, and have continued into 2024, remain uncertain and will depend on developments outside of our control, including, among others, the timing and significance of further changes in U.S. Treasury yields and mortgage interest rates, exposure to increasing funding costs, inflationary pressures associated with compensation, occupancy and software costs and labor market conditions, and international armed conflicts and their impact on supply chains.
Jeremy B. Ford, President and CEO of Hilltop, said, “Despite the continuation of a challenging environment for our operating businesses, Hilltop generated $29.6 million of pre-tax income as all three business segments delivered profitable pre-tax results during the second quarter of 2024. The onerous interest rate environment presented by an elevated federal-funds rate and inverted yield curve continued to negatively impact a number of business units throughout Hilltop. In spite of this, we have been focused on controlling funding and operating costs that have resulted in a modest expansion in net interest margin and pre-provision net revenue compared to the first quarter of 2024. As we enter the second half of 2024, we will work hard at prudently managing costs and positioning our balance sheet for long-term success.”
Second Quarter 2024 Highlights for Hilltop:
-
The provision for credit losses was $10.9 million during the second quarter of 2024, compared to a reversal of credit losses of $2.9 million in the first quarter of 2024 and a provision for credit losses of $14.8 million in the second quarter of 2023;
- The provision for credit losses during the second quarter of 2024 reflected a build in the allowance related to specific reserves and loan portfolio changes within the banking segment since the prior quarter, slightly offset by an improved U.S. economic outlook.
-
For the second quarter of 2024, net gains from sale of loans and other mortgage production income and mortgage loan origination fees was $92.9 million, compared to $90.0 million in the second quarter of 2023, a 3.2% increase;
- Mortgage loan origination production volume was $2.4 billion during the second quarter of 2024, compared to $2.5 billion in the second quarter of 2023;
- Net gains from mortgage loans sold to third parties increased to 233 basis points during the second quarter of 2024, compared to 221 basis points in the first quarter of 2024.
- Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the second quarter of 2024 were 0.59% and 3.84%, respectively, compared to 0.47% and 3.53%, respectively, for the second quarter of 2023;
- Hilltop’s book value per common share increased to $32.86 at June 30, 2024, compared to $32.66 at March 31, 2024;
- Hilltop’s total assets were $15.6 billion and $16.2 billion at June 30, 2024 and March 31, 2024, respectively;
- Loans1, net of allowance for credit losses, were $7.7 billion and $7.6 billion at June 30, 2024 and March 31, 2024, respectively;
-
Non-accrual loans were $105.7 million, or 1.12% of total loans, at June 30, 2024, compared to $64.7 million, or 0.73% of total loans, at March 31, 2024;
- Non-accrual loans at June 30, 2024 increased primarily due to the addition of two commercial and industrial credit relationships within our auto note financing industry subsector, partially offset by the sale of a single non-owner occupied commercial real estate credit relationship within our hotel/motel portfolio industry subsector that was classified in loans held for sale.
- Loans held for sale increased by 50.1% from March 31, 2024 to $1.3 billion at June 30, 2024;
-
Total deposits were $10.4 billion and $10.9 billion at June 30, 2024 and March 31, 2024, respectively;
- Total estimated uninsured deposits were $4.8 billion, or approximately 46% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $325.4 million, were $4.5 billion, or approximately 43% of total deposits, at June 30, 2024.
- Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.87% and a Common Equity Tier 1 Capital Ratio of 19.45% at June 30, 2024;
- Hilltop’s consolidated net interest margin4 increased to 2.90% for the second quarter of 2024, compared to 2.85% in the first quarter of 2024;
- For the second quarter of 2024, noninterest income was $193.3 million, compared to $190.7 million in the second quarter of 2023, a 1.4% increase;
- For second quarter of 2024, noninterest expense was $256.5 million, compared to $267.0 million in the second quarter of 2023, a 3.9% decrease; and
-
Hilltop’s effective tax rate was 22.5% during the second quarter of 2024, compared to 26.4% during the same period in 2023.
- The effective tax rate for the second quarter of 2024 was higher than the applicable statutory rate primarily due to the impact of nondeductible expenses, nondeductible compensation expense and other permanent adjustments, partially offset by the discrete impact of restricted stock vesting during the quarter and investments in tax-exempt instruments.
1 |
“Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $348.3 million and $332.6 million at June 30, 2024 and March 31, 2024, respectively. |
2 |
Capital 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 through December 31, 2024. |
3 |
Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets. |
4 |
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) |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|||||
Cash and due from banks |
|
$ |
798,300 |
|
$ |
1,710,066 |
|
$ |
1,858,700 |
|
$ |
1,513,747 |
|
$ |
1,584,709 |
Federal funds sold |
|
|
5,650 |
|
|
650 |
|
|
650 |
|
|
3,650 |
|
|
650 |
Assets segregated for regulatory purposes |
|
|
51,046 |
|
|
70,717 |
|
|
57,395 |
|
|
47,491 |
|
|
50,711 |
Securities purchased under agreements to resell |
|
|
111,914 |
|
|
91,608 |
|
|
80,011 |
|
|
123,719 |
|
|
143,982 |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading, at fair value |
|
|
721,384 |
|
|
657,700 |
|
|
515,991 |
|
|
578,901 |
|
|
696,649 |
Available for sale, at fair value, net (1) |
|
|
1,433,107 |
|
|
1,480,555 |
|
|
1,507,595 |
|
|
1,456,238 |
|
|
1,526,869 |
Held to maturity, at amortized cost, net (1) |
|
|
777,456 |
|
|
790,550 |
|
|
812,677 |
|
|
825,079 |
|
|
847,437 |
Equity, at fair value |
|
|
254 |
|
|
315 |
|
|
321 |
|
|
264 |
|
|
258 |
|
|
|
2,932,201 |
|
|
2,929,120 |
|
|
2,836,584 |
|
|
2,860,482 |
|
|
3,071,213 |
Loans held for sale |
|
|
1,264,437 |
|
|
842,324 |
|
|
943,846 |
|
|
1,058,806 |
|
|
1,333,044 |
Loans held for investment, net of unearned income |
|
|
8,173,520 |
|
|
8,062,693 |
|
|
8,079,745 |
|
|
8,204,052 |
|
|
8,354,122 |
Allowance for credit losses |
|
|
(115,082) |
|
|
(104,231) |
|
|
(111,413) |
|
|
(110,822) |
|
|
(109,306) |
Loans held for investment, net |
|
|
8,058,438 |
|
|
7,958,462 |
|
|
7,968,332 |
|
|
8,093,230 |
|
|
8,244,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broker-dealer and clearing organization receivables |
|
|
1,297,175 |
|
|
1,473,561 |
|
|
1,573,931 |
|
|
1,460,352 |
|
|
1,474,177 |
Premises and equipment, net |
|
|
161,746 |
|
|
165,557 |
|
|
168,856 |
|
|
172,097 |
|
|
176,574 |
Operating lease right-of-use assets |
|
|
93,994 |
|
|
95,343 |
|
|
88,580 |
|
|
93,057 |
|
|
97,979 |
Mortgage servicing assets |
|
|
52,902 |
|
|
95,591 |
|
|
96,662 |
|
|
104,951 |
|
|
95,101 |
Other assets |
|
|
517,811 |
|
|
501,244 |
|
|
517,545 |
|
|
588,751 |
|
|
588,166 |
Goodwill |
|
|
267,447 |
|
|
267,447 |
|
|
267,447 |
|
|
267,447 |
|
|
267,447 |
Other intangible assets, net |
|
|
7,429 |
|
|
7,943 |
|
|
8,457 |
|
|
9,078 |
|
|
9,772 |
Total assets |
|
$ |
15,620,490 |
|
$ |
16,209,633 |
|
$ |
16,466,996 |
|
$ |
16,396,858 |
|
$ |
17,138,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
2,845,441 |
|
$ |
3,028,543 |
|
$ |
3,007,101 |
|
$ |
3,200,247 |
|
$ |
3,451,438 |
Interest-bearing |
|
|
7,528,415 |
|
|
7,855,553 |
|
|
8,056,091 |
|
|
7,902,850 |
|
|
7,712,739 |
Total deposits |
|
|
10,373,856 |
|
|
10,884,096 |
|
|
11,063,192 |
|
|
11,103,097 |
|
|
11,164,177 |
Broker-dealer and clearing organization payables |
|
|
1,285,226 |
|
|
1,436,462 |
|
|
1,430,734 |
|
|
1,368,064 |
|
|
1,306,646 |
Short-term borrowings |
|
|
897,613 |
|
|
892,574 |
|
|
900,038 |
|
|
882,999 |
|
|
1,628,637 |
Securities sold, not yet purchased, at fair value |
|
|
75,546 |
|
|
60,562 |
|
|
34,872 |
|
|
51,527 |
|
|
74,761 |
Notes payable |
|
|
347,402 |
|
|
347,273 |
|
|
347,145 |
|
|
347,020 |
|
|
364,531 |
Operating lease liabilities |
|
|
113,096 |
|
|
114,518 |
|
|
109,002 |
|
|
114,334 |
|
|
119,999 |
Other liabilities |
|
|
365,140 |
|
|
314,718 |
|
|
431,684 |
|
|
422,955 |
|
|
389,336 |
Total liabilities |
|
|
13,457,879 |
|
|
14,050,203 |
|
|
14,316,667 |
|
|
14,289,996 |
|
|
15,048,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
650 |
|
|
653 |
|
|
652 |
|
|
652 |
|
|
651 |
Additional paid-in capital |
|
|
1,047,523 |
|
|
1,049,831 |
|
|
1,054,662 |
|
|
1,052,867 |
|
|
1,050,191 |
Accumulated other comprehensive loss |
|
|
(119,171) |
|
|
(119,606) |
|
|
(121,505) |
|
|
(145,083) |
|
|
(131,718) |
Retained earnings |
|
|
1,205,467 |
|
|
1,201,013 |
|
|
1,189,222 |
|
|
1,171,250 |
|
|
1,144,624 |
Deferred compensation employee stock trust, net |
|
|
1 |
|
|
115 |
|
|
228 |
|
|
340 |
|
|
450 |
Employee stock trust |
|
|
(1) |
|
|
(142) |
|
|
(292) |
|
|
(446) |
|
|
(599) |
Total Hilltop stockholders' equity |
|
|
2,134,469 |
|
|
2,131,864 |
|
|
2,122,967 |
|
|
2,079,580 |
|
|
2,063,599 |
Noncontrolling interests |
|
|
28,142 |
|
|
27,566 |
|
|
27,362 |
|
|
27,282 |
|
|
26,655 |
Total stockholders' equity |
|
|
2,162,611 |
|
|
2,159,430 |
|
|
2,150,329 |
|
|
2,106,862 |
|
|
2,090,254 |
Total liabilities & stockholders' equity |
|
$ |
15,620,490 |
|
$ |
16,209,633 |
|
$ |
16,466,996 |
|
$ |
16,396,858 |
|
$ |
17,138,341 |
(1) |
At June 30, 2024, the amortized cost of the available for sale securities portfolio was $1,545,966, while the fair value of the held to maturity securities portfolio was $687,194. |
|
||||||||||||||||
|
|
Three Months Ended |
|
|||||||||||||
Consolidated Income Statements |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|||||
(in 000's, except per share data) |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|
|||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
138,627 |
|
$ |
134,331 |
|
$ |
138,096 |
|
$ |
142,402 |
|
$ |
138,397 |
|
Securities borrowed |
|
|
20,306 |
|
|
20,561 |
|
|
18,659 |
|
|
17,683 |
|
|
18,515 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
25,289 |
|
|
26,241 |
|
|
28,763 |
|
|
27,166 |
|
|
26,719 |
|
Tax-exempt |
|
|
2,389 |
|
|
2,415 |
|
|
2,545 |
|
|
2,464 |
|
|
2,566 |
|
Other |
|
|
20,532 |
|
|
26,066 |
|
|
28,704 |
|
|
27,040 |
|
|
27,229 |
|
Total interest income |
|
|
207,143 |
|
|
209,614 |
|
|
216,767 |
|
|
216,755 |
|
|
213,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
68,095 |
|
|
69,144 |
|
|
68,339 |
|
|
64,290 |
|
|
54,726 |
|
Securities loaned |
|
|
18,669 |
|
|
19,039 |
|
|
17,247 |
|
|
16,169 |
|
|
16,413 |
|
Short-term borrowings |
|
|
10,676 |
|
|
11,588 |
|
|
13,495 |
|
|
14,212 |
|
|
17,706 |
|
Notes payable |
|
|
3,604 |
|
|
3,590 |
|
|
3,596 |
|
|
4,026 |
|
|
3,973 |
|
Other |
|
|
2,449 |
|
|
2,632 |
|
|
2,864 |
|
|
2,408 |
|
|
2,342 |
|
Total interest expense |
|
|
103,493 |
|
|
105,993 |
|
|
105,541 |
|
|
101,105 |
|
|
95,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
103,650 |
|
|
103,621 |
|
|
111,226 |
|
|
115,650 |
|
|
118,266 |
|
Provision for (reversal of) credit losses |
|
|
10,934 |
|
|
(2,871) |
|
|
1,265 |
|
|
(40) |
|
|
14,836 |
|
Net interest income after provision for (reversal of) credit losses |
|
|
92,716 |
|
|
106,492 |
|
|
109,961 |
|
|
115,690 |
|
|
103,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains from sale of loans and other mortgage production income |
|
|
58,455 |
|
|
40,197 |
|
|
36,387 |
|
|
47,262 |
|
|
48,535 |
|
Mortgage loan origination fees |
|
|
34,398 |
|
|
26,438 |
|
|
32,844 |
|
|
41,478 |
|
|
41,440 |
|
Securities commissions and fees and other |
|
|
67,460 |
|
|
84,757 |
|
|
73,967 |
|
|
68,447 |
|
|
68,640 |
|
Investment and securities advisory fees and commissions |
|
|
32,992 |
|
|
30,226 |
|
|
35,780 |
|
|
39,662 |
|
|
32,037 |
|
Total noninterest income |
|
|
193,305 |
|
|
181,618 |
|
|
178,978 |
|
|
196,849 |
|
|
190,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees' compensation and benefits |
|
|
169,998 |
|
|
165,830 |
|
|
160,390 |
|
|
173,195 |
|
|
176,908 |
|
Occupancy and equipment, net |
|
|
21,297 |
|
|
21,912 |
|
|
21,524 |
|
|
21,912 |
|
|
23,025 |
|
Professional services |
|
|
10,270 |
|
|
9,731 |
|
|
13,170 |
|
|
12,639 |
|
|
12,594 |
|
Other |
|
|
54,899 |
|
|
52,550 |
|
|
55,761 |
|
|
52,271 |
|
|
54,450 |
|
Total noninterest expense |
|
|
256,464 |
|
|
250,023 |
|
|
250,845 |
|
|
260,017 |
|
|
266,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
29,557 |
|
|
38,087 |
|
|
38,094 |
|
|
52,522 |
|
|
27,105 |
|
Income tax expense |
|
|
6,658 |
|
|
8,565 |
|
|
7,132 |
|
|
13,211 |
|
|
7,167 |
|
Net income |
|
|
22,899 |
|
|
29,522 |
|
|
30,962 |
|
|
39,311 |
|
|
19,938 |
|
Less: Net income attributable to noncontrolling interest |
|
|
2,566 |
|
|
1,854 |
|
|
2,291 |
|
|
2,269 |
|
|
1,805 |
|
Income attributable to Hilltop |
|
$ |
20,333 |
|
$ |
27,668 |
|
$ |
28,671 |
|
$ |
37,042 |
|
$ |
18,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.31 |
|
$ |
0.42 |
|
$ |
0.44 |
|
$ |
0.57 |
|
$ |
0.28 |
|
Diluted |
|
$ |
0.31 |
|
$ |
0.42 |
|
$ |
0.44 |
|
$ |
0.57 |
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
65,085 |
|
|
65,200 |
|
|
65,136 |
|
|
65,106 |
|
|
65,025 |
|
Diluted |
|
|
65,086 |
|
|
65,214 |
|
|
65,138 |
|
|
65,108 |
|
|
65,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2024 |
||||||||||||||||
Segment Results |
|
|
|
|
|
|
|
Mortgage |
|
|
|
|
All Other and |
|
Hilltop |
|||
(in 000's) |
|
Banking |
|
Broker-Dealer |
|
Origination |
|
Corporate |
|
Eliminations |
|
Consolidated |
||||||
Net interest income (expense) |
|
$ |
92,458 |
|
$ |
12,218 |
|
$ |
(4,571) |
|
$ |
(3,153) |
|
$ |
6,698 |
|
$ |
103,650 |
Provision for (reversal of) credit losses |
|
|
10,950 |
|
|
(16) |
|
|
— |
|
|
— |
|
|
— |
|
|
10,934 |
Noninterest income |
|
|
9,255 |
|
|
92,053 |
|
|
92,867 |
|
|
6,001 |
|
|
(6,871) |
|
|
193,305 |
Noninterest expense |
|
|
57,950 |
|
|
97,062 |
|
|
86,946 |
|
|
14,716 |
|
|
(210) |
|
|
256,464 |
Income (loss) before taxes |
|
$ |
32,813 |
|
$ |
7,225 |
|
$ |
1,350 |
|
$ |
(11,868) |
|
$ |
37 |
|
$ |
29,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2024 |
||||||||||||||||
Segment Results |
|
|
|
|
|
|
|
Mortgage |
|
|
|
|
All Other and |
|
Hilltop |
|||
(in 000's) |
|
Banking |
|
Broker-Dealer |
|
Origination |
|
Corporate |
|
Eliminations |
|
Consolidated |
||||||
Net interest income (expense) |
|
$ |
184,064 |
|
$ |
24,486 |
|
$ |
(8,823) |
|
$ |
(6,255) |
|
$ |
13,799 |
|
$ |
207,271 |
Provision for (reversal of) credit losses |
|
|
8,097 |
|
|
(34) |
|
|
— |
|
|
— |
|
|
— |
|
|
8,063 |
Noninterest income |
|
|
21,158 |
|
|
196,631 |
|
|
159,567 |
|
|
11,785 |
|
|
(14,218) |
|
|
374,923 |
Noninterest expense |
|
|
113,970 |
|
|
195,008 |
|
|
165,843 |
|
|
32,101 |
|
|
(435) |
|
|
506,487 |
Income (loss) before taxes |
|
$ |
83,155 |
|
$ |
26,143 |
|
$ |
(15,099) |
|
$ |
(26,571) |
|
$ |
16 |
|
$ |
67,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|||||||||||||
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|||||
Selected Financial Data |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hilltop Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average stockholders' equity |
|
|
3.84% |
|
|
5.23% |
|
|
5.46% |
|
|
7.11% |
|
|
3.53% |
Return on average assets |
|
|
0.59% |
|
|
0.74% |
|
|
0.75% |
|
|
0.94% |
|
|
0.47% |
Net interest margin (1) |
|
|
2.90% |
|
|
2.85% |
|
|
2.96% |
|
|
3.02% |
|
|
3.03% |
Net interest margin (taxable equivalent) (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported |
|
|
2.92% |
|
|
2.87% |
|
|
2.98% |
|
|
3.04% |
|
|
3.03% |
Impact of purchase accounting |
|
|
6 bps |
|
|
4 bps |
|
|
4 bps |
|
|
7 bps |
|
|
9 bps |
Book value per common share ($) |
|
|
32.86 |
|
|
32.66 |
|
|
32.58 |
|
|
31.91 |
|
|
31.71 |
Shares outstanding, end of period (000's) |
|
|
64,953 |
|
|
65,267 |
|
|
65,153 |
|
|
65,170 |
|
|
65,071 |
Dividend payout ratio (3) |
|
|
54.42% |
|
|
40.06% |
|
|
36.35% |
|
|
28.12% |
|
|
57.37% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (1) |
|
|
3.10% |
|
|
3.00% |
|
|
2.94% |
|
|
3.08% |
|
|
3.11% |
Net interest margin (taxable equivalent) (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported |
|
|
3.10% |
|
|
3.00% |
|
|
2.95% |
|
|
3.09% |
|
|
3.11% |
Impact of purchase accounting |
|
|
7 bps |
|
|
5 bps |
|
|
5 bps |
|
|
8 bps |
|
|
11 bps |
Accretion of discount on loans ($000's) |
|
|
1,945 |
|
|
1,299 |
|
|
1,202 |
|
|
2,226 |
|
|
3,334 |
Net recoveries (charge-offs) ($000's) |
|
|
(83) |
|
|
(4,311) |
|
|
(674) |
|
|
1,556 |
|
|
(2,884) |
Return on average assets |
|
|
0.81% |
|
|
1.20% |
|
|
1.12% |
|
|
1.20% |
|
|
0.89% |
Fee income ratio |
|
|
9.1% |
|
|
11.5% |
|
|
11.2% |
|
|
10.5% |
|
|
10.0% |
Efficiency ratio |
|
|
57.0% |
|
|
54.1% |
|
|
53.2% |
|
|
51.4% |
|
|
51.2% |
Employees' compensation and benefits ($000's) |
|
|
33,352 |
|
|
32,389 |
|
|
29,420 |
|
|
30,641 |
|
|
30,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broker-Dealer Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue ($000's) (4) |
|
|
104,271 |
|
|
116,847 |
|
|
119,989 |
|
|
118,703 |
|
|
113,241 |
Employees' compensation and benefits ($000's) |
|
|
66,181 |
|
|
69,457 |
|
|
68,746 |
|
|
69,930 |
|
|
65,290 |
Variable compensation expense ($000's) |
|
|
32,734 |
|
|
35,274 |
|
|
39,435 |
|
|
39,929 |
|
|
34,798 |
Compensation as a % of net revenue |
|
|
63.5% |
|
|
59.4% |
|
|
57.3% |
|
|
58.9% |
|
|
57.7% |
Pre-tax margin (5) |
|
|
6.9% |
|
|
16.2% |
|
|
16.8% |
|
|
18.2% |
|
|
16.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Origination Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loan originations - volume ($000's): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home purchases |
|
|
2,205,157 |
|
|
1,548,941 |
|
|
1,698,009 |
|
|
2,091,444 |
|
|
2,301,007 |
Refinancings |
|
|
174,141 |
|
|
127,545 |
|
|
117,018 |
|
|
152,257 |
|
|
150,643 |
Total mortgage loan originations - volume |
|
|
2,379,298 |
|
|
1,676,486 |
|
|
1,815,027 |
|
|
2,243,701 |
|
|
2,451,650 |
Mortgage loan sales - volume ($000's) |
|
|
1,838,841 |
|
|
1,749,857 |
|
|
1,874,001 |
|
|
2,395,357 |
|
|
2,115,706 |
Net gains from mortgage loan sales (basis points): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans sold to third parties |
|
|
233 |
|
|
221 |
|
|
189 |
|
|
199 |
|
|
207 |
Impact of loans retained by banking segment |
|
|
(5) |
|
|
(5) |
|
|
0 |
|
|
(1) |
|
|
(6) |
As reported |
|
|
228 |
|
|
216 |
|
|
189 |
|
|
198 |
|
|
201 |
Mortgage servicing rights asset ($000's) (6) |
|
|
52,902 |
|
|
95,591 |
|
|
96,662 |
|
|
104,951 |
|
|
95,101 |
Employees' compensation and benefits ($000's) |
|
|
61,624 |
|
|
52,694 |
|
|
53,766 |
|
|
64,016 |
|
|
70,982 |
Variable compensation expense ($000's) |
|
|
34,886 |
|
|
22,188 |
|
|
24,085 |
|
|
33,070 |
|
|
36,249 |
(1) |
Net interest margin is defined as net interest income divided by average interest-earning assets. |
|
(2) |
Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.6 million, $0.6 million, $0.6 million, $0.6 million and $0.1 million, respectively, for the periods presented and for the banking seg ment were $0.1 million, $0.1 million, $0.2 million, $0.2 million and $0.2 million, respectively, for the periods presented. |
|
(3) |
Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share. |
|
(4) |
Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income. |
|
(5) |
Pre-tax margin is defined as income before income taxes divided by net revenue. |
|
(6) |
Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|||||
Capital Ratios |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|||||
Tier 1 capital (to average assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PlainsCapital |
|
|
11.36% |
|
|
11.00% |
|
|
10.55% |
|
|
10.62% |
|
|
10.28% |
Hilltop |
|
|
12.87% |
|
|
12.49% |
|
|
12.23% |
|
|
11.92% |
|
|
11.47% |
Common equity Tier 1 capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PlainsCapital |
|
|
15.58% |
|
|
15.87% |
|
|
15.44% |
|
|
15.31% |
|
|
14.48% |
Hilltop |
|
|
19.45% |
|
|
19.73% |
|
|
19.32% |
|
|
18.60% |
|
|
17.61% |
Tier 1 capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PlainsCapital |
|
|
15.58% |
|
|
15.87% |
|
|
15.44% |
|
|
15.31% |
|
|
14.48% |
Hilltop |
|
|
19.45% |
|
|
19.73% |
|
|
19.32% |
|
|
18.60% |
|
|
17.61% |
Total capital (to risk-weighted assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PlainsCapital |
|
|
16.77% |
|
|
17.06% |
|
|
16.58% |
|
|
16.45% |
|
|
15.56% |
Hilltop |
|
|
22.57% |
|
|
22.79% |
|
|
22.34% |
|
|
21.54% |
|
|
20.41% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|||||
Non-Performing Assets Portfolio Data |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|||||
Loans accounted for on a non-accrual basis ($000's): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-owner occupied |
|
$ |
6,894 |
|
$ |
34,661 |
|
$ |
36,440 |
|
$ |
2,375 |
|
$ |
2,456 |
Owner occupied |
|
|
6,437 |
|
|
4,846 |
|
|
5,098 |
|
|
4,964 |
|
|
1,096 |
Commercial and industrial |
|
|
80,755 |
|
|
12,165 |
|
|
9,502 |
|
|
10,190 |
|
|
21,442 |
Construction and land development |
|
|
485 |
|
|
698 |
|
|
3,480 |
|
|
760 |
|
|
593 |
1-4 family residential |
|
|
11,092 |
|
|
12,363 |
|
|
13,801 |
|
|
13,202 |
|
|
13,360 |
Consumer |
|
|
1 |
|
|
3 |
|
|
6 |
|
|
7 |
|
|
9 |
Broker-dealer |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Non-accrual loans ($000's) |
|
$ |
105,664 |
|
$ |
64,736 |
|
$ |
68,327 |
|
$ |
31,498 |
|
$ |
38,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual loans as a % of total loans |
|
|
1.12% |
|
|
0.73% |
|
|
0.76% |
|
|
0.34% |
|
|
0.40% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned ($000's) |
|
|
2,973 |
|
|
5,254 |
|
|
5,095 |
|
|
5,386 |
|
|
3,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other repossessed assets ($000's) |
|
|
464 |
|
|
472 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets ($000's) |
|
|
109,101 |
|
|
70,462 |
|
|
73,422 |
|
|
36,884 |
|
|
42,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a % of total assets |
|
|
0.70% |
|
|
0.43% |
|
|
0.45% |
|
|
0.22% |
|
|
0.25% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans past due 90 days or more and still accruing ($000's) (1) |
|
|
122,451 |
|
|
112,799 |
|
|
115,090 |
|
|
106,346 |
|
|
130,036 |
(1) |
Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
||||||||||||||
|
|
2024 |
|
2023 |
|
||||||||||||
|
|
Average |
|
Interest |
|
Annualized |
|
Average |
|
Interest |
|
Annualized |
|
||||
|
|
Outstanding |
|
Earned |
|
Yield or |
|
Outstanding |
|
Earned |
|
Yield or |
|
||||
Net Interest Margin (Taxable Equivalent) Details (1) |
|
Balance |
|
or Paid |
|
Rate |
|
Balance |
|
or Paid |
|
Rate |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale |
|
$ |
934,445 |
|
$ |
13,494 |
|
5.78 |
% |
$ |
1,043,526 |
|
$ |
14,125 |
|
5.41 |
% |
Loans held for investment, gross (2) |
|
|
7,892,879 |
|
|
125,133 |
|
6.36 |
% |
|
8,033,095 |
|
|
124,272 |
|
6.21 |
% |
Investment securities - taxable |
|
|
2,612,049 |
|
|
25,284 |
|
3.87 |
% |
|
2,776,375 |
|
|
26,719 |
|
3.85 |
% |
Investment securities - non-taxable (3) |
|
|
321,928 |
|
|
2,965 |
|
3.68 |
% |
|
412,609 |
|
|
2,410 |
|
2.34 |
% |
Federal funds sold and securities purchased under agreements to resell |
|
|
105,520 |
|
|
1,944 |
|
7.39 |
% |
|
123,219 |
|
|
2,190 |
|
7.13 |
% |
Interest-bearing deposits in other financial institutions |
|
|
1,057,783 |
|
|
13,572 |
|
5.15 |
% |
|
1,711,945 |
|
|
21,273 |
|
4.98 |
% |
Securities borrowed |
|
|
1,358,425 |
|
|
20,306 |
|
5.91 |
% |
|
1,477,502 |
|
|
18,515 |
|
4.96 |
% |
Other |
|
|
39,758 |
|
|
5,016 |
|
50.60 |
% |
|
82,608 |
|
|
3,766 |
|
18.29 |
% |
Interest-earning assets, gross (3) |
|
|
14,322,787 |
|
|
207,714 |
|
5.82 |
% |
|
15,660,879 |
|
|
213,270 |
|
5.46 |
% |
Allowance for credit losses |
|
|
(104,551) |
|
|
|
|
|
|
|
(97,387) |
|
|
|
|
|
|
Interest-earning assets, net |
|
|
14,218,236 |
|
|
|
|
|
|
|
15,563,492 |
|
|
|
|
|
|
Noninterest-earning assets |
|
|
1,332,959 |
|
|
|
|
|
|
|
1,355,997 |
|
|
|
|
|
|
Total assets |
|
$ |
15,551,195 |
|
|
|
|
|
|
$ |
16,919,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
7,617,862 |
|
$ |
68,095 |
|
3.59 |
% |
$ |
7,736,582 |
|
$ |
54,726 |
|
2.84 |
% |
Securities loaned |
|
|
1,338,825 |
|
|
18,669 |
|
5.59 |
% |
|
1,373,435 |
|
|
16,413 |
|
4.79 |
% |
Notes payable and other borrowings |
|
|
1,253,394 |
|
|
16,729 |
|
5.35 |
% |
|
1,861,063 |
|
|
24,021 |
|
5.18 |
% |
Total interest-bearing liabilities |
|
|
10,210,081 |
|
|
103,493 |
|
4.07 |
% |
|
10,971,080 |
|
|
95,160 |
|
3.48 |
% |
Noninterest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
2,814,179 |
|
|
|
|
|
|
|
3,540,643 |
|
|
|
|
|
|
Other liabilities |
|
|
377,516 |
|
|
|
|
|
|
|
320,706 |
|
|
|
|
|
|
Total liabilities |
|
|
13,401,776 |
|
|
|
|
|
|
|
14,832,429 |
|
|
|
|
|
|
Stockholders’ equity |
|
|
2,122,144 |
|
|
|
|
|
|
|
2,060,677 |
|
|
|
|
|
|
Noncontrolling interest |
|
|
27,275 |
|
|
|
|
|
|
|
26,383 |
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
15,551,195 |
|
|
|
|
|
|
$ |
16,919,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (3) |
|
|
|
|
$ |
104,221 |
|
|
|
|
|
|
$ |
118,110 |
|
|
|
Net interest spread (3) |
|
|
|
|
|
|
|
1.75 |
% |
|
|
|
|
|
|
1.98 |
% |
Net interest margin (3) |
|
|
|
|
|
|
|
2.92 |
% |
|
|
|
|
|
|
3.03 |
% |
(1) |
Information presented on a consolidated basis (dollars in thousands). |
|
(2) |
Average balance includes non-accrual loans. |
|
(3) |
Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rate for the periods presented. The adjustment to interest income was $0.6 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively. |
Conference Call Information
Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, July 26, 2024. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review second quarter 2024 financial results. Interested parties can access the conference call by dialing 800-245-3047 (North America) or 203-518-9765 (International) and then using the conference ID HH2Q24. The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop.com).
About Hilltop
Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Momentum Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At June 30, 2024, Hilltop employed approximately 3,780 people and operated approximately 320 locations in 48 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol “HTH.” Find more information at Hilltop.com, PlainsCapital.com, PrimeLending.com and HilltopSecurities.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “aim,” “anticipates,” “believes,” “building,” “continue,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “position,” “probable,” “progressing,” “projects,” “prudent,” “seeks,” “should,” “steady,” “target,” “view,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (ii) effectiveness of our data security controls in the face of cyber attacks and any legal, reputational and financial risks following a cybersecurity incident; (iii) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (iv) changes in the interest rate environment; (v) risks associated with concentration in real estate related loans and (vi) disruptions to the economy and financial services industry, and (vii) risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators, including increases in the cost of our deposit insurance assessments. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240725968264/en/
Contacts
Investor Relations Contact:
Matt Dunn
214-525-4636
mdunn@hilltop.com
