DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the third quarter of 2017. Hilltop produced income of $30.2 million, or $0.31 per diluted share, for the third quarter of 2017, compared to $51.9 million, or $0.53 per diluted share, for the third quarter of 2016. Hilltop’s annualized return on average assets and return on average equity for the third quarter of 2017 were 0.90% and 6.32%, respectively, compared to 1.69% and 11.41%, respectively, for the third quarter of 2016. During August and September 2017, Hurricanes Harvey and Irma affected both Hilltop and its customers. The estimated pre-tax earnings impact from these hurricanes on our third quarter operating results was $9.8 million.
Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.06 per common share, payable on November 30, 2017, to all common stockholders of record as of the close of business on November 15, 2017. Additionally, pursuant to the stock repurchase program reauthorized by the Hilltop Board of Directors in January 2017, Hilltop paid $11.4 million to repurchase 452,225 shares at an average price of $25.14 per share during the third quarter of 2017. These shares were returned to the pool of authorized but unissued shares of common stock.
Jeremy Ford, Co-CEO of Hilltop, said, “Hilltop’s results in the third quarter of 2017 further support our diversified operating model and reinforce our strong risk management fundamentals. While the storm activity within the quarter impacted all of our businesses, we mitigated a significant portion of the risk through diversification and reinsurance. Additionally, during the third quarter of 2017 we returned $17.2 million of capital to our shareholders through dividends and share repurchases.”
Alan White, Co-CEO of Hilltop, added, “Our team continues to deliver for our company, our shareholders and the communities we serve. With the exclusion of the insurance business, which was most significantly impacted by the hurricanes, all of our businesses generated solid profits as we continue to grow commercial loans and core deposits, improve margins in the securities business and produce solid mortgage results in a purchase-focused market.”
Third Quarter 2017 Highlights for Hilltop:
- Hilltop’s total assets were $13.5 billion at September 30, 2017, compared to $13.3 billion at June 30, 2017;
- Hilltop’s common equity increased by $16.0 million from June 30, 2017 to $1.9 billion at September 30, 2017;
- Non-covered loans1 held for investment, net of allowance for loan losses, increased by 0.5% to $6.1 billion and covered loans1, net of allowance for loan losses, decreased by 8.6% to $188.3 million at September 30, 2017 compared to June 30, 2017;
- Non-covered non-performing loans increased to $40.1 million, or 0.50% of total non-covered loans, at September 30, 2017, compared to $29.5 million, or 0.36% of total non-covered loans, at June 30, 2017;
- Energy classified and criticized loans were $24.4 million at September 30, 2017, decreasing from $26.9 million at June 30, 2017;
- Loans held for sale decreased by 3.0% from June 30, 2017 to $1.9 billion at September 30, 2017;
- Total deposits were $7.7 billion at September 30, 2017, compared to $7.6 billion at June 30, 2017;
- Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio2 of 12.87% and a Common Equity Tier 1 Capital Ratio of 17.66% at September 30, 2017;
- Hilltop’s net interest margin3 decreased to 3.50% for the third quarter of 2017, from 4.04% in the second quarter of 2017;
- The provision for loan losses was $1.3 million during the third quarter of 2017, compared to $5.9 million in the second quarter of 2017;
- For the third quarter of 2017, noninterest income was $298.5 million, compared to $354.5 million in the third quarter of 2016, a 15.8% decrease; and
- For the third quarter of 2017, noninterest expense was $353.8 million, compared to $364.1 million in the third quarter of 2016, a 2.8% decrease.
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| 1 | “Covered loans” refer to loans acquired in the FNB Transaction that are subject to loss-share agreements with the FDIC, while all other loans are referred to as “non-covered loans.” | |
| 2 | Based on the end of period Tier 1 capital divided by total average assets during the nine months ended September 30, 2017, 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 | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| (in 000's) | 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||||||
| Cash and due from banks | $ | 354,569 | $ | 405,938 | $ | 545,928 | $ | 669,357 | $ | 528,519 | |||||||||||||||
| Federal funds sold | 400 | 388 | 24,404 | 21,407 | 40,419 | ||||||||||||||||||||
| Securities purchased under agreements to resell | 134,654 | 125,188 | 113,228 | 89,430 | 138,284 | ||||||||||||||||||||
| Assets segregated for regulatory purposes | 207,336 | 167,565 | 166,395 | 180,993 | 173,840 | ||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||
| Trading, at fair value | 676,411 | 471,485 | 373,300 | 265,534 | 402,104 | ||||||||||||||||||||
| Available for sale, at fair value | 765,542 | 763,206 | 755,546 | 598,007 | 563,720 | ||||||||||||||||||||
| Held to maturity, at amortized cost | 368,031 | 359,847 | 337,357 | 351,831 | 365,934 | ||||||||||||||||||||
| 1,809,984 | 1,594,538 | 1,466,203 | 1,215,372 | 1,331,758 | |||||||||||||||||||||
| Loans held for sale | 1,939,321 | 2,000,257 | 1,329,493 | 1,795,463 | 1,673,069 | ||||||||||||||||||||
| Non-covered loans, net of unearned income | 6,148,813 | 6,118,211 | 5,783,853 | 5,843,499 | 5,674,655 | ||||||||||||||||||||
| Allowance for non-covered loan losses | (58,779 | ) | (59,208 | ) | (55,157 | ) | (54,186 | ) | (52,625 | ) | |||||||||||||||
| Non-covered loans, net | 6,090,034 | 6,059,003 | 5,728,696 | 5,789,313 | 5,622,030 | ||||||||||||||||||||
| Covered loans, net of allowance for covered loan losses | 188,269 | 205,877 | 234,681 | 255,714 | 292,031 | ||||||||||||||||||||
| Broker-dealer and clearing organization receivables | 1,672,123 | 1,552,525 | 1,574,031 | 1,497,741 | 1,340,617 | ||||||||||||||||||||
| Premises and equipment, net | 176,281 | 183,994 | 184,091 | 190,361 | 190,645 | ||||||||||||||||||||
| FDIC indemnification asset | 33,143 | 40,304 | 47,940 | 71,313 | 73,351 | ||||||||||||||||||||
| Covered other real estate owned | 40,343 | 42,304 | 45,374 | 51,642 | 61,988 | ||||||||||||||||||||
| Other assets | 596,095 | 618,368 | 583,554 | 613,453 | 657,805 | ||||||||||||||||||||
| Goodwill | 251,808 | 251,808 | 251,808 | 251,808 | 251,808 | ||||||||||||||||||||
| Other intangible assets, net | 38,440 | 40,516 | 42,601 | 44,695 | 47,112 | ||||||||||||||||||||
| Total assets | $ | 13,532,800 | $ | 13,288,573 | $ | 12,338,427 | $ | 12,738,062 | $ | 12,423,276 | |||||||||||||||
| Deposits: | |||||||||||||||||||||||||
| Non-interest bearing | $ | 2,279,633 | $ | 2,251,208 | $ | 2,272,905 | $ | 2,199,483 | $ | 2,232,813 | |||||||||||||||
| Interest bearing | 5,383,814 | 5,323,414 | 5,056,957 | 4,864,328 | 4,797,772 | ||||||||||||||||||||
| Total deposits | 7,663,447 | 7,574,622 | 7,329,862 | 7,063,811 | 7,030,585 | ||||||||||||||||||||
| Broker-dealer and clearing organization payables | 1,517,698 | 1,395,314 | 1,437,548 | 1,347,128 | 1,251,839 | ||||||||||||||||||||
| Short-term borrowings | 1,477,201 | 1,515,069 | 753,777 | 1,417,289 | 1,265,022 | ||||||||||||||||||||
| Securities sold, not yet purchased, at fair value | 173,509 | 149,869 | 144,193 | 153,889 | 164,633 | ||||||||||||||||||||
| Notes payable | 300,196 | 300,283 | 324,701 | 317,912 | 313,313 | ||||||||||||||||||||
| Junior subordinated debentures | 67,012 | 67,012 | 67,012 | 67,012 | 67,012 | ||||||||||||||||||||
| Other liabilities | 424,381 | 393,351 | 392,025 | 496,501 | 481,504 | ||||||||||||||||||||
| Total liabilities | 11,623,444 | 11,395,520 | 10,449,118 | 10,863,542 | 10,573,908 | ||||||||||||||||||||
| Common stock | 959 | 963 | 984 | 985 | 985 | ||||||||||||||||||||
| Additional paid-in capital | 1,525,169 | 1,529,903 | 1,570,329 | 1,572,877 | 1,570,025 | ||||||||||||||||||||
| Accumulated other comprehensive income | 2,585 | 2,112 | 897 | 485 | 8,039 | ||||||||||||||||||||
| Retained earnings | 376,873 | 356,564 | 313,197 | 295,568 | 266,048 | ||||||||||||||||||||
| Deferred compensation employee stock trust, net | 840 | 845 | 893 | 903 | 900 | ||||||||||||||||||||
| Employee stock trust | (241 | ) | (248 | ) | (300 | ) | (309 | ) | (309 | ) | |||||||||||||||
| Total Hilltop stockholders' equity | 1,906,185 | 1,890,139 | 1,886,000 | 1,870,509 | 1,845,688 | ||||||||||||||||||||
| Noncontrolling interests | 3,171 | 2,914 | 3,309 | 4,011 | 3,680 | ||||||||||||||||||||
| Total stockholders' equity | 1,909,356 | 1,893,053 | 1,889,309 | 1,874,520 | 1,849,368 | ||||||||||||||||||||
| Total liabilities & stockholders' equity | $ | 13,532,800 | $ | 13,288,573 | $ | 12,338,427 | $ | 12,738,062 | $ | 12,423,276 | |||||||||||||||
| Three Months Ended | |||||||||||||||||||||
| Consolidated Income Statements | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| (in 000's, except per share data) | 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Interest income: | |||||||||||||||||||||
| Loans, including fees | $ | 102,546 | $ | 113,793 | $ | 89,991 | $ | 102,046 | $ | 97,590 | |||||||||||
| Securities borrowed | 11,404 | 9,597 | 8,053 | 6,566 | 9,037 | ||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | 11,157 | 9,539 | 7,027 | 7,097 | 5,935 | ||||||||||||||||
| Tax-exempt | 1,471 | 1,375 | 1,244 | 1,530 | 1,518 | ||||||||||||||||
| Other | 2,366 | 2,002 | 1,926 | 1,096 | 1,183 | ||||||||||||||||
| Total interest income | 128,944 | 136,306 | 108,241 | 118,335 | 115,263 | ||||||||||||||||
| Interest expense: | |||||||||||||||||||||
| Deposits | 6,841 | 5,464 | 4,690 | 3,971 | 3,996 | ||||||||||||||||
| Securities loaned | 8,935 | 7,481 | 6,340 | 4,653 | 6,954 | ||||||||||||||||
| Short-term borrowings | 4,567 | 3,648 | 1,418 | 1,829 | 1,497 | ||||||||||||||||
| Notes payable | 2,680 | 2,826 | 2,814 | 2,856 | 2,793 | ||||||||||||||||
| Junior subordinated debentures | 774 | 744 | 711 | 703 | 673 | ||||||||||||||||
| Other | 167 | 167 | 168 | 199 | 180 | ||||||||||||||||
| Total interest expense | 23,964 | 20,330 | 16,141 | 14,211 | 16,093 | ||||||||||||||||
| Net interest income | 104,980 | 115,976 | 92,100 | 104,124 | 99,170 | ||||||||||||||||
| Provision for loan losses | 1,260 | 5,853 | 1,705 | 4,347 | 3,990 | ||||||||||||||||
| Net interest income after provision for loan losses | 103,720 | 110,123 | 90,395 | 99,777 | 95,180 | ||||||||||||||||
| Noninterest income: | |||||||||||||||||||||
| Net realized gains on securities | - | 14 | - | - | - | ||||||||||||||||
| Net gains from sale of loans and other mortgage production income | 138,498 | 153,688 | 124,150 | 137,270 | 175,412 | ||||||||||||||||
| Mortgage loan origination fees | 25,256 | 25,976 | 19,556 | 24,850 | 26,807 | ||||||||||||||||
| Securities commissions and fees | 38,735 | 37,804 | 39,057 | 39,425 | 39,722 | ||||||||||||||||
| Investment and securities advisory fees and commissions | 25,620 | 25,537 | 22,202 | 31,690 | 31,129 | ||||||||||||||||
| Net insurance premiums earned | 34,493 | 36,020 | 36,140 | 38,344 | 38,747 | ||||||||||||||||
| Other | 35,875 | 65,653 | 30,334 | 37,548 | 42,641 | ||||||||||||||||
| Total noninterest income | 298,477 | 344,692 | 271,439 | 309,127 | 354,458 | ||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||
| Employees' compensation and benefits | 209,747 | 214,719 | 186,886 | 208,760 | 225,194 | ||||||||||||||||
| Occupancy and equipment, net | 29,073 | 27,919 | 27,293 | 27,154 | 27,460 | ||||||||||||||||
| Loss and loss adjustment expenses | 31,234 | 33,184 | 21,700 | 14,018 | 16,055 | ||||||||||||||||
| Policy acquisition and other underwriting expenses | 10,917 | 11,251 | 11,229 | 10,757 | 11,064 | ||||||||||||||||
| Other | 72,871 | 79,178 | 73,384 | 95,095 | 84,360 | ||||||||||||||||
| Total noninterest expense | 353,842 | 366,251 | 320,492 | 355,784 | 364,133 | ||||||||||||||||
| Income before income taxes | 48,355 | 88,564 | 41,342 | 53,120 | 85,505 | ||||||||||||||||
| Income tax expense | 18,003 | 25,754 | 15,035 | 17,582 | 33,017 | ||||||||||||||||
| Net income | 30,352 | 62,810 | 26,307 | 35,538 | 52,488 | ||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | 146 | 334 | (127 | ) | 217 | 556 | |||||||||||||||
| Income attributable to Hilltop | $ | 30,206 | $ | 62,476 | $ | 26,434 | $ | 35,321 | $ | 51,932 | |||||||||||
| Earnings per common share: | |||||||||||||||||||||
| Basic | $ | 0.31 | $ | 0.64 | $ | 0.27 | $ | 0.36 | $ | 0.53 | |||||||||||
| Diluted | $ | 0.31 | $ | 0.63 | $ | 0.27 | $ | 0.36 | $ | 0.53 | |||||||||||
| Cash dividends declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | - | |||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||
| Basic | 96,096 | 98,154 | 98,441 | 98,514 | 98,490 | ||||||||||||||||
| Diluted | 96,306 | 98,414 | 98,757 | 98,810 | 98,625 | ||||||||||||||||
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Three Months Ended September 30, 2017 |
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| Segment Results ($000s) | Mortgage | All Other and | Hilltop | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2017 | Banking | Broker-Dealer | Origination | Insurance | Corporate | Eliminations | Consolidated | |||||||||||||||||||||||||
| Net interest income (expense) | $ | 89,322 | $ | 12,215 | $ | 94 | $ | 864 | $ | (2,589 | ) | $ | 5,074 | $ | 104,980 | |||||||||||||||||
| Provision for loan losses | 1,665 | (405 | ) | - | - | - | - | 1,260 | ||||||||||||||||||||||||
| Noninterest income | 11,414 | 91,418 | 163,758 | 36,839 | 182 | (5,134 | ) | 298,477 | ||||||||||||||||||||||||
| Noninterest expense | 62,750 | 83,836 | 151,056 | 47,015 | 9,325 | (140 | ) | 353,842 | ||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 36,321 | $ | 20,202 | $ | 12,796 | $ | (9,312 | ) | $ | (11,732 | ) | $ | 80 | $ | 48,355 | ||||||||||||||||
| Three Months Ended | |||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
| Selected Financial Data | 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||
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Hilltop Consolidated: |
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| Return on average stockholders' equity | 6.32% | 13.24% | 5.73% | 7.56% | 11.41% | ||||||||||
| Return on average assets | 0.90% | 1.94% | 0.88% | 1.13% | 1.69% | ||||||||||
| Net interest margin (1): | 3.50% | 4.04% | 3.52% | 3.80% | 3.65% | ||||||||||
| Net interest margin (taxable equivalent) (2): | |||||||||||||||
| As reported | 3.52% | 4.05% | 3.54% | 3.82% | 3.67% | ||||||||||
| Impact of purchase accounting | 37 bps | 82 bps | 49 bps | 71 bps | 64 bps | ||||||||||
| Book value per common share ($) | 19.88 | 19.62 | 19.17 | 18.98 | 18.73 | ||||||||||
| Shares outstanding, end of period (000's) | 95,904 | 96,333 | 98,407 | 98,544 | 98,541 | ||||||||||
| Dividend payout ratio (3) | 19.09% | 9.43% | 22.30% | 16.71% | 0.00% | ||||||||||
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Banking Segment: |
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| Net interest margin (1): | 4.03% | 4.80% | 4.21% | 4.57% | 4.50% | ||||||||||
| Net interest margin (taxable equivalent) (2): | |||||||||||||||
| As reported | 4.05% | 4.81% | 4.23% | 4.59% | 4.53% | ||||||||||
| Impact of purchase accounting | 51 bps | 112 bps | 67 bps | 96 bps | 90 bps | ||||||||||
| Accretion of discount on loans ($000's) | 10,541 | 23,164 | 12,098 | 17,926 | 15,969 | ||||||||||
| Non-covered net charge-offs (recoveries) ($000's) | 908 | 842 | 238 | 3,083 | 3,107 | ||||||||||
| Return on average assets | 0.94% | 1.63% | 0.94% | 1.09% | 1.09% | ||||||||||
| Fee income ratio | 11.33% | 19.97% | 13.13% | 12.57% | 12.31% | ||||||||||
| Efficiency ratio | 62.29% | 48.96% | 64.36% | 59.00% | 59.59% | ||||||||||
| Employees' compensation and benefits ($000's) | 30,810 | 31,790 | 31,512 | 32,350 | 31,167 | ||||||||||
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Broker-Dealer Segment: |
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| Net revenue (4) | 103,633 | 103,159 | 91,039 | 107,331 | 111,334 | ||||||||||
| Employees' compensation and benefits ($000's) | 60,365 | 62,840 | 57,240 | 62,929 | 68,051 | ||||||||||
| Variable compensation expense ($000's) | 35,085 | 36,556 | 30,808 | 37,984 | 42,446 | ||||||||||
| Compensation as a % of net revenue | 58.2% | 60.9% | 62.9% | 58.6% | 61.1% | ||||||||||
| Pre-tax margin | 19.49% | 15.33% | 10.45% | -0.02% | 15.65% | ||||||||||
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Mortgage Origination Segment: |
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| Mortgage loan originations - volume ($000's): | |||||||||||||||
| Home purchases | 3,332,441 | 3,502,128 | 2,269,138 | 2,772,316 | 3,191,851 | ||||||||||
| Refinancings | 640,064 | 555,956 | 555,193 | 1,115,764 | 1,300,702 | ||||||||||
| Total mortgage loan originations - volume | 3,972,505 | 4,058,084 | 2,824,331 | 3,888,080 | 4,492,553 | ||||||||||
| Mortgage loan sales - volume ($000's) | 4,002,195 | 3,385,260 | 3,275,167 | 3,723,751 | 4,349,794 | ||||||||||
| Mortgage servicing rights asset ($000's) (4) | 47,766 | 43,580 | 45,573 | 61,968 | 43,751 | ||||||||||
| Employees' compensation and benefits ($000's) | 111,133 | 115,189 | 89,958 | 106,894 | 120,548 | ||||||||||
| Variable compensation expense ($000's) | 66,420 | 71,877 | 46,906 | 64,809 | 75,271 | ||||||||||
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Insurance Segment: |
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| Loss and LAE ratio | 90.6% | 92.1% | 60.0% | 36.6% | 41.4% | ||||||||||
| Expense ratio | 40.4% | 39.7% | 38.4% | 33.2% | 33.6% | ||||||||||
| Combined ratio | 131.0% | 131.8% | 98.4% | 69.8% | 75.0% | ||||||||||
| Employees' compensation and benefits ($000's) | 2,578 | 2,786 | 2,780 | 2,262 | 2,401 | ||||||||||
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| (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 a 35% federal income tax rate. 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. For the periods presented, the taxable equivalent adjustments to interest income for Hilltop Consolidated were $0.6 million, $0.5 million, $0.5 million, $0.6 million, and $0.5 million, respectively, and for the Banking Segment were $0.4 million, $0.4 million, $0.4 million, $0.4 million, and $0.4 million, respectively. | |
| (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 plus total broker-dealer noninterest income. |
|
| (5) | 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. | |
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| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| Capital Ratios | 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Tier 1 capital (to average assets): | ||||||||||||||||||||
| PlainsCapital | 12.18 | % | 12.11 | % | 13.09 | % | 12.35 | % | 12.65 | % | ||||||||||
| Hilltop | 12.87 | % | 13.07 | % | 13.98 | % | 13.51 | % | 13.41 | % | ||||||||||
| Common equity Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||
| PlainsCapital | 14.44 | % | 13.95 | % | 15.50 | % | 14.64 | % | 15.15 | % | ||||||||||
| Hilltop | 17.66 | % | 17.53 | % | 19.03 | % | 18.30 | % | 17.80 | % | ||||||||||
| Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||
| PlainsCapital | 14.44 | % | 13.95 | % | 15.50 | % | 14.64 | % | 15.15 | % | ||||||||||
| Hilltop | 18.20 | % | 18.07 | % | 19.62 | % | 18.87 | % | 18.37 | % | ||||||||||
| Total capital (to risk-weighted assets): | ||||||||||||||||||||
| PlainsCapital | 15.23 | % | 14.72 | % | 16.30 | % | 15.38 | % | 15.90 | % | ||||||||||
| Hilltop | 18.71 | % | 18.57 | % | 20.12 | % | 19.34 | % | 18.82 | % | ||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| Non-Covered Non-Performing Loans Portfolio Data | 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Non-covered loans accounted for on a non-accrual basis ($000's): | ||||||||||||||||||||
| Commercial and industrial | 21,434 | 13,818 | 13,490 | 9,515 | 19,651 | |||||||||||||||
| Real estate | 17,996 | 14,877 | 14,437 | 13,932 | 4,817 | |||||||||||||||
| Construction and land development | 626 | 632 | 661 | 755 | 703 | |||||||||||||||
| Consumer | 63 | 208 | 223 | 244 | 50 | |||||||||||||||
| Broker-dealer | - | - | - | - | - | |||||||||||||||
| 40,119 | 29,535 | 28,811 | 24,446 | 25,221 | ||||||||||||||||
| Non-covered non-performing loans as a % of total non-covered loans | 0.50 | % | 0.36 | % | 0.41 | % | 0.32 | % | 0.34 | % | ||||||||||
| Non-covered other real estate owned ($000's) | 4,827 | 4,591 | 4,556 | 4,507 | 3,063 | |||||||||||||||
| Other repossessed assets ($000's) | 437 | 723 | 681 | 1,117 | 1,654 | |||||||||||||||
| Non-covered non-performing assets ($000's) | 45,383 | 34,849 | 34,048 | 30,070 | 29,938 | |||||||||||||||
| Non-covered non-performing assets as a % of total assets | 0.34 | % | 0.26 | % | 0.28 | % | 0.24 | % | 0.24 | % | ||||||||||
| Non-covered non-PCI loans past due 90 days or more and still accruing ($000's) | 45,134 | 48,757 | 42,767 | 47,486 | 41,824 | |||||||||||||||
| Troubled debt restructurings included in accruing non-covered loans ($000's) | 1,163 | 1,170 | 1,180 | 1,196 | 1,216 | |||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| PlainsCapital Bank - Energy Exposure | 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
|
Select Energy Statistics |
||||||||||||||||||||
| Outstanding energy loan balance ($MM) | 151.3 | 158.2 | 149.1 | 166.5 | 168.8 | |||||||||||||||
| Energy unfunded commitments ($MM) | 137.9 | 121.9 | 130.4 | 121.4 | 120.7 | |||||||||||||||
| Energy loans as a % of total loans | 2.6 | % | 2.7 | % | 2.7 | % | 3.0 | % | 3.1 | % | ||||||||||
| Classified and criticized energy loans ($MM): | ||||||||||||||||||||
| Criticized energy loans | 0.0 | 0.0 | 0.0 | 0.0 | 1.8 | |||||||||||||||
| Performing classified energy loans | 11.6 | 23.6 | 22.5 | 23.5 | 24.2 | |||||||||||||||
| Non-performing classified energy loans | 12.8 | 3.3 | 4.0 | 5.2 | 13.4 | |||||||||||||||
| 24.4 | 26.9 | 26.5 | 28.7 | 39.4 | ||||||||||||||||
| Unimpaired energy reserves ($MM) | 12.0 | 11.3 | 10.6 | 10.6 | 10.0 | |||||||||||||||
| Energy reserves as a % of energy loans | 7.9 | % | 7.1 | % | 7.1 | % | 6.5 | % | 6.7 | % | ||||||||||
| Energy NCOs ($MM) | 0.0 | 0.0 | 0.0 | 1.5 | 1.0 | |||||||||||||||
|
Energy Portfolio Breakdown |
||||||||||||||||||||
| Exploration and production | 14 | % | 14 | % | 13 | % | 11 | % | 13 | % | ||||||||||
| Services: | ||||||||||||||||||||
| Field services | 23 | % | 22 | % | 24 | % | 22 | % | 26 | % | ||||||||||
| Pipeline construction | 22 | % | 22 | % | 22 | % | 21 | % | 21 | % | ||||||||||
| 45 | % | 44 | % | 46 | % | 43 | % | 47 | % | |||||||||||
| Midstream: | ||||||||||||||||||||
| Distribution | 16 | % | 16 | % | 18 | % | 30 | % | 21 | % | ||||||||||
| Transportation | 9 | % | 9 | % | 10 | % | 9 | % | 11 | % | ||||||||||
| 25 | % | 25 | % | 28 | % | 39 | % | 32 | % | |||||||||||
| Other: | ||||||||||||||||||||
| Wholesalers | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||
| Equipment rentals | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||||
| Equipment wholesalers | 15 | % | 16 | % | 12 | % | 6 | % | 7 | % | ||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
| Three Months Ended September 30, | |||||||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||||||
| Average | Interest | Annualized | Average | Interest | Annualized | ||||||||||||||||||||||
| Outstanding | Earned or | Yield or | Outstanding | Earned or | Yield or | ||||||||||||||||||||||
| Balance | Paid | Rate | Balance | Paid | Rate | ||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||||||
| Loans, gross (1) | $ | 8,077,804 | $ | 102,546 | 5.01 | % | $ | 7,315,433 | $ | 97,590 | 5.26 | % | |||||||||||||||
| Investment securities - taxable | 1,538,890 | 11,134 | 2.88 | % | 999,394 | 5,915 | 2.36 | % | |||||||||||||||||||
| Investment securities - non-taxable (2) | 229,089 | 2,032 | 3.54 | % | 296,013 | 2,052 | 2.77 | % | |||||||||||||||||||
| Federal funds sold and securities purchased | |||||||||||||||||||||||||||
| under agreements to resell | 139,398 | - | 0.00 | % | 185,533 | 52 | 0.11 | % | |||||||||||||||||||
| Interest-bearing deposits in other | |||||||||||||||||||||||||||
| financial institutions | 282,806 | 853 | 1.20 | % | 478,560 | 567 | 0.47 | % | |||||||||||||||||||
| Securities borrowed | 1,548,039 | 11,404 | 2.88 | % | 1,476,297 | 9,037 | 2.44 | % | |||||||||||||||||||
| Other | 87,281 | 1,536 | 7.00 | % | 65,858 | 585 | 3.54 | % | |||||||||||||||||||
| Interest-earning assets, gross (2) | 11,903,307 | 129,505 | 4.30 | % | 10,817,088 | 115,798 | 4.22 | % | |||||||||||||||||||
| Allowance for loan losses | (61,243 | ) | (53,470 | ) | |||||||||||||||||||||||
| Interest-earning assets, net | 11,842,064 | 10,763,618 | |||||||||||||||||||||||||
| Noninterest-earning assets | 1,506,552 | 1,588,921 | |||||||||||||||||||||||||
| Total assets | $ | 13,348,616 | $ | 12,352,539 | |||||||||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 5,350,959 | $ | 6,841 | 0.51 | % | $ | 4,851,952 | $ | 3,996 | 0.33 | % | |||||||||||||||
| Securities loaned | 1,398,922 | 8,935 | 2.53 | % | 1,390,071 | 6,955 | 1.99 | % | |||||||||||||||||||
| Notes payable and other borrowings | 1,781,498 | 8,188 | 1.81 | % | 1,339,395 | 5,142 | 1.53 | % | |||||||||||||||||||
| Total interest-bearing liabilities | 8,531,379 | 23,964 | 1.11 | % | 7,581,418 | 16,093 | 0.84 | % | |||||||||||||||||||
| Noninterest-bearing liabilities | |||||||||||||||||||||||||||
| Noninterest-bearing deposits | 2,290,151 | 2,251,744 | |||||||||||||||||||||||||
| Other liabilities | 627,907 | 705,985 | |||||||||||||||||||||||||
| Total liabilities | 11,449,437 | 10,539,147 | |||||||||||||||||||||||||
| Stockholders' equity | 1,896,838 | 1,810,266 | |||||||||||||||||||||||||
| Noncontrolling interest | 2,341 | 3,126 | |||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 13,348,616 | $ | 12,352,539 | |||||||||||||||||||||||
| Net interest income (2) | $ | 105,541 | $ | 99,705 | |||||||||||||||||||||||
| Net interest spread (2) | 3.19 | % | 3.38 | % | |||||||||||||||||||||||
| Net interest margin (2) | 3.52 | % | 3.67 | % | |||||||||||||||||||||||
|
____________________ |
||
| (1) | Average balance includes non-accrual loans. | |
| (2) | Presented on a taxable equivalent basis with annualized taxable equivalent adjustments based on a 35% federal income tax rate. The adjustment to interest income was $0.6 million and $0.5 million for the three months ended September 30, 2017 and 2016, respectively. | |
Conference Call Information
Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, October 27, 2017. Hilltop Co-CEOs Jeremy B. Ford and Alan B. White and other key management members will review third quarter 2017 financial results. Interested parties can access the conference call by dialing 1-877-508-9457 (domestic) or 1-412-317-0789 (international). The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop-holdings.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 Hilltop Securities Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. Through Hilltop Holdings’ other wholly owned subsidiary, National Lloyds Corporation, it provides property and casualty insurance through two insurance companies, National Lloyds Insurance Company and American Summit Insurance Company. At September 30, 2017, Hilltop employed approximately 5,500 people and operated approximately 475 locations in 44 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol "HTH." Find more information at Hilltop-Holdings.com, PlainsCapital.com, PrimeLending.com, Nationallloydsinsurance.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 and intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “might,” “plan,” “probable,” “projects,” “seeks,” “should,” “target,” “view” or “would” or the negative of these words and phrases or similar words or phrases. For a discussion of certain factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed 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.
