Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the fourth quarter and full year 2022. Hilltop produced income to common stockholders of $25.6 million, or $0.39 per diluted share, for the fourth quarter of 2022, compared to $62.2 million, or $0.78 per diluted share, for the fourth quarter of 2021. Income to common stockholders for the full year 2022 was $113.1 million, or $1.60 per diluted share, compared to $374.5 million, or $4.61 per diluted share, for the full year 2021. Hilltop’s financial results for the fourth quarter and full year of 2022 included significant decreases in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income, while the banking segment recorded a provision for credit losses as opposed to a reversal of credit losses in respective prior year periods.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.16 per common share, a 7% increase from the prior quarter, payable on February 24, 2023, to all common stockholders of record as of the close of business on February 10, 2023. Additionally, the Hilltop Board of Directors authorized, subject to regulatory approvals or non-objections, a new stock repurchase program through January 2024, under which Hilltop may repurchase, in the aggregate, up to $75.0 million of its outstanding common stock. During 2022, Hilltop paid $442.3 million to repurchase approximately 14.87 million shares of its common stock at a price of $29.75 per share pursuant to the tender offer completed in May 2022. These shares were returned to the pool of authorized but unissued shares of common stock.

Headwinds during 2022, including the impact of tight housing inventories on mortgage volumes, declining deposit balances, rapid increases in market interest rates and a declining economic forecast, are expected to continue to have an adverse impact on our operating results during 2023. The impacts of such headwinds in 2023 remain uncertain and will depend on developments outside of our control, including, among others, 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, the Russian-Ukraine conflict and its impact on supply chains, and the impact of the pandemic.

Jeremy B. Ford, President and CEO of Hilltop, said “Although we experienced a challenging operating environment in 2022, Hilltop still generated consolidated profitability and finished the year a more resilient company. The abrupt market shifts in the mortgage and fixed income businesses had a negative impact across our company, particularly at PrimeLending and HilltopSecurities, while PlainsCapital Bank delivered across all of its key priorities, including prudent loan growth, sound credit quality and efficiency. I am proud of our teams’ accomplishments during the year, as they continued to deliver high-quality products and services for our clients, while also making tough, yet prudent, expense decisions to right-size our franchise.

“Additionally, our focus on maintaining a strong balance sheet with significant capital and liquidity has positioned Hilltop for long-term success regardless of interest rate and economic volatility. Finally, I am very pleased that Hilltop returned a record amount of capital to stockholders during 2022, primarily through our successful tender offer share repurchase completed in May.”

Fourth Quarter 2022 Highlights for Hilltop:

  • The provision for credit losses was $3.6 million during the fourth quarter of 2022, compared to a reversal of credit losses of $0.8 million in the third quarter of 2022 and a reversal of credit losses of $18.6 million in the fourth quarter of 2021;
    • The provision for credit losses during the fourth quarter of 2022 reflected a deteriorating U.S. economic outlook since the prior quarter.
  • For the fourth quarter of 2022, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $71.1 million, compared to $192.0 million in the fourth quarter of 2021, a 63.0% decrease;
    • Mortgage loan origination production volume was $2.0 billion during the fourth quarter of 2022, compared to $5.0 billion in the fourth quarter of 2021;
    • Net gains from mortgage loans sold to third parties decreased to 211 basis points during the fourth quarter of 2022, compared to 227 basis points in the third quarter of 2022.
  • Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the fourth quarter of 2022 were 0.63% and 4.99%, respectively, compared to 1.41% and 9.93%, respectively, for the fourth quarter of 2021;
  • Hilltop’s book value per common share increased to $31.62 at December 31, 2022, compared to $31.46 at September 30, 2022;
  • Hilltop’s total assets were $16.3 billion and $16.6 billion at December 31, 2022 and September 30, 2022, respectively;
  • Loans1, net of allowance for credit losses, were $7.6 billion and $7.4 billion at December 31, 2022 and September 30, 2022;
  • Non-performing loans were $30.3 million, or 0.33% of total loans, at December 31, 2022, compared to $34.6 million, or 0.39% of total loans, at September 30, 2022;
  • Loans held for sale decreased by 2.1% from September 30, 2022 to $1.0 billion at December 31, 2022;
  • Total deposits were $11.3 billion and $11.4 billion at December 31, 2022 and September 30, 2022, respectively;
  • Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 11.47% and a Common Equity Tier 1 Capital Ratio of 18.22% at December 31, 2022;
  • Hilltop’s consolidated net interest margin4 increased to 3.23% for the fourth quarter of 2022, compared to 3.19% in the third quarter of 2022;
  • For the fourth quarter of 2022, noninterest income was $169.8 million, compared to $284.8 million in the fourth quarter of 2021, a 40.4% decrease;
  • For the fourth quarter 2022, noninterest expense was $253.4 million, compared to $322.2 million in the fourth quarter of 2021, a 21.4% decrease; and
  • Hilltop’s effective tax rate was 26.6% during the fourth quarter of 2022, compared to 24.2% during the same period in 2021.
    • The effective tax rate for the fourth quarter of 2022 was higher than the applicable statutory rate primarily due to the impact of non-deductible compensation expense and other permanent adjustments.

___________________

1

“Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $431.0 million and $402.0 million at December 31, 2022 and September 30, 2022, 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.

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

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(in 000's)

 

2022

 

2022

 

2022

 

2022

 

2021

Cash and due from banks

 

$

1,579,512

 

 

$

1,777,584

 

 

$

1,783,554

 

 

$

2,886,812

 

 

$

2,823,138

 

Federal funds sold

 

 

650

 

 

 

663

 

 

 

381

 

 

 

383

 

 

 

385

 

Assets segregated for regulatory purposes

 

 

67,737

 

 

 

109,358

 

 

 

120,816

 

 

 

128,408

 

 

 

221,740

 

Securities purchased under agreements to resell

 

 

118,070

 

 

 

145,365

 

 

 

139,929

 

 

 

256,991

 

 

 

118,262

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading, at fair value

 

 

755,032

 

 

 

641,864

 

 

 

593,273

 

 

 

471,763

 

 

 

647,998

 

Available for sale, at fair value, net

 

 

1,658,766

 

 

 

1,584,724

 

 

 

1,562,222

 

 

 

1,462,340

 

 

 

2,130,568

 

Held to maturity, at amortized cost, net

 

 

875,532

 

 

 

889,452

 

 

 

920,583

 

 

 

953,107

 

 

 

267,684

 

Equity, at fair value

 

 

200

 

 

 

209

 

 

 

197

 

 

 

225

 

 

 

250

 

 

 

 

3,289,530

 

 

 

3,116,249

 

 

 

3,076,275

 

 

 

2,887,435

 

 

 

3,046,500

 

Loans held for sale

 

 

982,616

 

 

 

1,003,605

 

 

 

1,491,579

 

 

 

1,643,994

 

 

 

1,878,190

 

Loans held for investment, net of unearned income

 

 

8,092,673

 

 

 

7,944,246

 

 

 

7,930,619

 

 

 

7,797,903

 

 

 

7,879,904

 

Allowance for credit losses

 

 

(95,442

)

 

 

(91,783

)

 

 

(95,298

)

 

 

(91,185

)

 

 

(91,352

)

Loans held for investment, net

 

 

7,997,231

 

 

 

7,852,463

 

 

 

7,835,321

 

 

 

7,706,718

 

 

 

7,788,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-dealer and clearing organization receivables

 

 

1,038,055

 

 

 

1,255,052

 

 

 

1,049,830

 

 

 

1,610,352

 

 

 

1,672,946

 

Premises and equipment, net

 

 

184,950

 

 

 

191,423

 

 

 

195,361

 

 

 

198,906

 

 

 

204,438

 

Operating lease right-of-use assets

 

 

102,443

 

 

 

103,099

 

 

 

106,806

 

 

 

108,180

 

 

 

112,328

 

Mortgage servicing assets

 

 

100,825

 

 

 

156,539

 

 

 

121,688

 

 

 

100,475

 

 

 

86,990

 

Other assets

 

 

527,469

 

 

 

624,235

 

 

 

513,570

 

 

 

546,622

 

 

 

452,880

 

Goodwill

 

 

267,447

 

 

 

267,447

 

 

 

267,447

 

 

 

267,447

 

 

 

267,447

 

Other intangible assets, net

 

 

11,317

 

 

 

12,209

 

 

 

13,182

 

 

 

14,233

 

 

 

15,284

 

Total assets

 

$

16,267,852

 

 

$

16,615,291

 

 

$

16,715,739

 

 

$

18,356,956

 

 

$

18,689,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

3,968,862

 

 

$

4,546,816

 

 

$

4,601,643

 

 

$

4,694,592

 

 

$

4,577,183

 

Interest-bearing

 

 

7,346,887

 

 

 

6,805,198

 

 

 

7,319,143

 

 

 

7,972,110

 

 

 

8,240,894

 

Total deposits

 

 

11,315,749

 

 

 

11,352,014

 

 

 

11,920,786

 

 

 

12,666,702

 

 

 

12,818,077

 

Broker-dealer and clearing organization payables

 

 

966,470

 

 

 

1,176,156

 

 

 

934,818

 

 

 

1,397,836

 

 

 

1,477,300

 

Short-term borrowings

 

 

970,056

 

 

 

942,309

 

 

 

822,649

 

 

 

835,054

 

 

 

859,444

 

Securities sold, not yet purchased, at fair value

 

 

53,023

 

 

 

99,515

 

 

 

135,968

 

 

 

97,629

 

 

 

96,586

 

Notes payable

 

 

346,654

 

 

 

390,354

 

 

 

389,722

 

 

 

395,479

 

 

 

387,904

 

Operating lease liabilities

 

 

126,759

 

 

 

120,635

 

 

 

124,406

 

 

 

125,919

 

 

 

130,960

 

Other liabilities

 

 

417,042

 

 

 

475,425

 

 

 

329,987

 

 

 

347,742

 

 

 

369,606

 

Total liabilities

 

 

14,195,753

 

 

 

14,556,408

 

 

 

14,658,336

 

 

 

15,866,361

 

 

 

16,139,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

647

 

 

 

646

 

 

 

646

 

 

 

794

 

 

 

790

 

Additional paid-in capital

 

 

1,046,331

 

 

 

1,043,605

 

 

 

1,039,261

 

 

 

1,275,649

 

 

 

1,274,446

 

Accumulated other comprehensive loss

 

 

(124,961

)

 

 

(119,864

)

 

 

(95,279

)

 

 

(80,565

)

 

 

(10,219

)

Retained earnings

 

 

1,123,636

 

 

 

1,107,586

 

 

 

1,085,208

 

 

 

1,267,415

 

 

 

1,257,014

 

Deferred compensation employee stock trust, net

 

 

481

 

 

 

479

 

 

 

695

 

 

 

744

 

 

 

752

 

Employee stock trust

 

 

(640

)

 

 

(641

)

 

 

(954

)

 

 

(104

)

 

 

(115

)

Total Hilltop stockholders' equity

 

 

2,045,494

 

 

 

2,031,811

 

 

 

2,029,577

 

 

 

2,463,933

 

 

 

2,522,668

 

Noncontrolling interests

 

 

26,605

 

 

 

27,072

 

 

 

27,826

 

 

 

26,662

 

 

 

26,535

 

Total stockholders' equity

 

 

2,072,099

 

 

 

2,058,883

 

 

 

2,057,403

 

 

 

2,490,595

 

 

 

2,549,203

 

Total liabilities & stockholders' equity

 

$

16,267,852

 

 

$

16,615,291

 

 

$

16,715,739

 

 

$

18,356,956

 

 

$

18,689,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

Consolidated Income Statements

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(in 000's, except per share data)

 

2022

 

2022

 

2021

 

2022

 

2021

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

117,906

 

$

109,165

 

 

$

96,104

 

 

$

416,207

 

$

404,312

 

Securities borrowed

 

 

14,162

 

 

 

10,938

 

 

 

8,524

 

 

 

44,414

 

 

 

61,667

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

23,293

 

 

 

19,642

 

 

 

13,916

 

 

 

75,805

 

 

 

47,633

 

Tax-exempt

 

 

3,002

 

 

 

2,451

 

 

 

2,639

 

 

 

10,013

 

 

 

9,766

 

Other

 

 

21,611

 

 

 

14,276

 

 

 

1,872

 

 

 

44,677

 

 

 

6,595

 

Total interest income

 

 

179,974

 

 

 

156,472

 

 

 

123,055

 

 

 

591,116

 

 

 

529,973

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

28,238

 

 

 

12,525

 

 

 

4,404

 

 

 

50,412

 

 

 

23,624

 

Securities loaned

 

 

13,179

 

 

 

9,407

 

 

 

6,624

 

 

 

38,570

 

 

 

50,974

 

Short-term borrowings

 

 

10,278

 

 

 

5,550

 

 

 

2,279

 

 

 

20,893

 

 

 

9,065

 

Notes payable

 

 

3,988

 

 

 

3,907

 

 

 

5,871

 

 

 

16,141

 

 

 

21,386

 

Junior subordinated debentures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,558

 

Other

 

 

849

 

 

 

1,597

 

 

 

(417

)

 

 

6,125

 

 

 

384

 

Total interest expense

 

 

56,532

 

 

 

32,986

 

 

 

18,761

 

 

 

132,141

 

 

 

106,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

123,442

 

 

 

123,486

 

 

 

104,294

 

 

 

458,975

 

 

 

422,982

 

Provision for (reversal of) credit losses

 

 

3,638

 

 

 

(780

)

 

 

(18,565

)

 

 

8,309

 

 

 

(58,213

)

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

 

 

119,804

 

 

 

124,266

 

 

 

122,859

 

 

 

450,666

 

 

 

481,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gains from sale of loans and other mortgage production income

 

 

35,949

 

 

 

57,998

 

 

 

156,103

 

 

 

302,384

 

 

 

825,960

 

Mortgage loan origination fees

 

 

35,198

 

 

 

39,960

 

 

 

35,930

 

 

 

149,598

 

 

 

160,011

 

Securities commissions and fees

 

 

33,143

 

 

 

34,076

 

 

 

32,801

 

 

 

139,122

 

 

 

143,827

 

Investment and securities advisory fees and commissions

 

 

30,661

 

 

 

35,031

 

 

 

42,834

 

 

 

127,399

 

 

 

152,443

 

Other

 

 

34,833

 

 

 

39,910

 

 

 

17,178

 

 

 

113,957

 

 

 

128,034

 

Total noninterest income

 

 

169,784

 

 

 

206,975

 

 

 

284,846

 

 

 

832,460

 

 

 

1,410,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees' compensation and benefits

 

 

167,892

 

 

 

200,450

 

 

 

229,717

 

 

 

773,688

 

 

 

1,007,235

 

Occupancy and equipment, net

 

 

23,077

 

 

 

25,041

 

 

 

25,741

 

 

 

97,115

 

 

 

100,602

 

Professional services

 

 

11,555

 

 

 

10,631

 

 

 

9,904

 

 

 

48,495

 

 

 

54,270

 

Other

 

 

50,844

 

 

 

52,616

 

 

 

56,832

 

 

 

207,701

 

 

 

225,291

 

Total noninterest expense

 

 

253,368

 

 

 

288,738

 

 

 

322,194

 

 

 

1,126,999

 

 

 

1,387,398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

36,220

 

 

 

42,503

 

 

 

85,511

 

 

 

156,127

 

 

 

504,072

 

Income tax expense

 

 

9,642

 

 

 

9,249

 

 

 

20,715

 

 

 

36,833

 

 

 

117,976

 

Net income

 

 

26,578

 

 

 

33,254

 

 

 

64,796

 

 

 

119,294

 

 

 

386,096

 

Less: Net income attributable to noncontrolling interest

 

 

1,022

 

 

 

1,186

 

 

 

2,611

 

 

 

6,160

 

 

 

11,601

 

Income attributable to Hilltop

 

$

25,556

 

 

$

32,068

 

 

$

62,185

 

 

$

113,134

 

 

$

374,495

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

0.40

 

 

$

0.50

 

 

$

0.79

 

 

$

1.61

 

 

$

4.64

 

Diluted:

 

$

0.39

 

 

$

0.50

 

 

$

0.78

 

 

$

1.60

 

 

$

4.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.15

 

 

$

0.15

 

 

$

0.12

 

 

$

0.60

 

 

$

0.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

64,602

 

 

 

64,552

 

 

 

78,933

 

 

 

70,434

 

 

 

80,708

 

Diluted

 

 

64,779

 

 

 

64,669

 

 

 

79,427

 

 

 

70,626

 

 

 

81,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2022

Segment Results

 

 

 

 

 

 

 

Mortgage

 

 

 

 

All Other and

 

Hilltop

(in 000's)

 

Banking

 

Broker-Dealer

 

Origination

 

Corporate

 

Eliminations

 

Consolidated

Net interest income (expense)

 

$

109,335

 

$

14,116

 

 

$

(4,464

)

 

$

(3,279

)

 

$

7,734

 

 

$

123,442

Provision for (reversal of) credit losses

 

 

3,925

 

 

(287

)

 

 

 

 

 

 

 

 

 

 

 

3,638

Noninterest income

 

 

11,869

 

 

92,803

 

 

 

71,439

 

 

 

1,870

 

 

 

(8,197

)

 

 

169,784

Noninterest expense

 

 

59,269

 

 

87,406

 

 

 

92,532

 

 

 

14,642

 

 

 

(481

)

 

 

253,368

Income (loss) before taxes

 

$

58,010

 

$

19,800

 

 

$

(25,557

)

 

$

(16,051

)

 

$

18

 

 

$

36,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2022

Segment Results

 

 

 

 

 

 

 

Mortgage

 

 

 

 

All Other and

 

Hilltop

(in 000's)

 

Banking

 

Broker-Dealer

 

Origination

 

Corporate

 

Eliminations

 

Consolidated

Net interest income (expense)

 

$

413,603

 

$

51,597

 

$

(10,529

)

 

$

(13,135

)

 

$

17,439

 

 

$

458,975

Provision for (reversal of) credit losses

 

 

8,250

 

 

59

 

 

 

 

 

 

 

 

 

 

 

 

8,309

Noninterest income

 

 

49,307

 

 

341,943

 

 

 

452,915

 

 

 

7,525

 

 

 

(19,230

)

 

 

832,460

Noninterest expense

 

 

235,190

 

 

355,713

 

 

 

478,904

 

 

 

59,030

 

 

 

(1,838

)

 

 

1,126,999

Income (loss) before taxes

 

$

219,470

 

$

37,768

 

 

$

(36,518

)

 

$

(64,640

)

 

$

47

 

 

$

156,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

Selected Financial Data

 

2022

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hilltop Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average stockholders' equity

 

 

4.99

%

 

 

6.26

%

 

 

9.93

%

 

 

5.11

%

 

 

15.38

%

Return on average assets

 

 

0.63

%

 

 

0.79

%

 

 

1.41

%

 

 

0.69

%

 

 

2.17

%

Net interest margin (1)

 

 

3.23

%

 

 

3.19

%

 

 

2.44

%

 

 

2.87

%

 

 

2.57

%

Net interest margin (taxable equivalent) (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

 

3.24

%

 

 

3.20

%

 

 

2.45

%

 

 

2.88

%

 

 

2.58

%

Impact of purchase accounting

 

 

7 bps

 

 

8 bps

 

 

12 bps

 

 

7 bps

 

 

12 bps

Book value per common share ($)

 

 

31.62

 

 

 

31.46

 

 

 

31.95

 

 

 

31.62

 

 

 

31.95

 

Shares outstanding, end of period (000's)

 

 

64,685

 

 

 

64,591

 

 

 

78,965

 

 

 

64,685

 

 

 

78,965

 

Dividend payout ratio (3)

 

 

37.92

%

 

 

30.19

%

 

 

15.19

%

 

 

37.36

%

 

 

10.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (1)

 

 

3.42

%

 

 

3.42

%

 

 

2.81

%

 

 

3.11

%

 

 

3.07

%

Net interest margin (taxable equivalent) (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported

 

 

3.43

%

 

 

3.43

%

 

 

2.82

%

 

 

3.11

%

 

 

3.08

%

Impact of purchase accounting

 

 

8 bps

 

 

10 bps

 

 

15 bps

 

 

9 bps

 

 

16 bps

Accretion of discount on loans ($000's)

 

 

2,173

 

 

 

2,858

 

 

 

4,716

 

 

 

10,552

 

 

 

18,789

 

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

 

 

21

 

 

 

(2,735

)

 

 

405

 

 

 

(4,219

)

 

 

521

 

Return on average assets

 

 

1.31

%

 

 

1.41

%

 

 

1.44

%

 

 

1.19

%

 

 

1.55

%

Fee income ratio

 

 

9.8

%

 

 

9.9

%

 

 

10.8

%

 

 

10.7

%

 

 

10.0

%

Efficiency ratio

 

 

48.9

%

 

 

48.9

%

 

 

54.2

%

 

 

50.8

%

 

 

50.3

%

Employees' compensation and benefits ($000's)

 

 

34,526

 

 

 

35,934

 

 

 

34,415

 

 

 

137,531

 

 

 

130,276

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-Dealer Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue ($000's) (4)

 

 

106,919

 

 

 

114,184

 

 

 

94,569

 

 

 

393,540

 

 

 

424,421

 

Employees' compensation and benefits ($000's)

 

 

60,552

 

 

 

70,274

 

 

 

65,301

 

 

 

251,145

 

 

 

276,176

 

Variable compensation expense ($000's)

 

 

32,042

 

 

 

42,567

 

 

 

35,939

 

 

 

138,705

 

 

 

161,264

 

Compensation as a % of net revenue

 

 

56.6

%

 

 

61.5

%

 

 

69.1

%

 

 

63.8

%

 

 

65.1

%

Pre-tax margin (5)

 

 

18.5

%

 

 

15.3

%

 

 

1.8

%

 

 

9.6

%

 

 

10.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Origination Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loan originations - volume ($000's):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home purchases

 

 

1,895,731

 

 

 

2,832,136

 

 

 

3,559,137

 

 

 

10,823,002

 

 

 

14,429,190

 

Refinancings

 

 

147,511

 

 

 

211,075

 

 

 

1,430,369

 

 

 

1,837,154

 

 

 

8,239,093

 

Total mortgage loan originations - volume

 

 

2,043,242

 

 

 

3,043,211

 

 

 

4,989,506

 

 

 

12,660,156

 

 

 

22,668,283

 

Mortgage loan sales - volume ($000's)

 

 

2,038,990

 

 

 

3,419,950

 

 

 

4,988,538

 

 

 

13,200,471

 

 

 

23,059,160

 

Net gains from mortgage loan sales (basis points):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans sold to third parties

 

 

211

 

 

 

227

 

 

 

362

 

 

 

263

 

 

 

375

 

Impact of loans retained by banking segment

 

 

(19

)

 

 

(9

)

 

 

(15

)

 

 

(11

)

 

 

(13

)

As reported

 

 

192

 

 

 

218

 

 

 

347

 

 

 

252

 

 

 

362

 

Mortgage servicing rights asset ($000's) (6)

 

 

100,825

 

 

 

156,539

 

 

 

86,990

 

 

 

100,825

 

 

 

86,990

 

Employees' compensation and benefits ($000's)

 

 

64,940

 

 

 

86,079

 

 

 

121,758

 

 

 

353,973

 

 

 

568,221

 

Variable compensation expense ($000's)

 

 

26,724

 

 

 

44,312

 

 

 

73,208

 

 

 

183,804

 

 

 

373,929

 

___________________

(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 $0.3 million, $0.4 million, $0.5 million, $1.6 million and $1.7 million, respectively, for the periods presented and for the banking segment were $0.2 million for each of 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

Capital Ratios

 

2022

 

2022

 

2022

 

2022

 

2021

Tier 1 capital (to average assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

10.26

%

 

 

10.29

%

 

 

9.67

%

 

 

9.74

%

 

 

10.20

%

Hilltop

 

 

11.47

%

 

 

11.41

%

 

 

10.53

%

 

 

12.46

%

 

 

12.58

%

Common equity Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

14.97

%

 

 

14.68

%

 

 

14.65

%

 

 

15.37

%

 

 

16.00

%

Hilltop

 

 

18.22

%

 

 

17.45

%

 

 

17.24

%

 

 

21.27

%

 

 

21.22

%

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

14.97

%

 

 

14.68

%

 

 

14.65

%

 

 

15.37

%

 

 

16.00

%

Hilltop

 

 

18.22

%

 

 

17.45

%

 

 

17.24

%

 

 

21.27

%

 

 

21.22

%

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PlainsCapital

 

 

15.90

%

 

 

15.54

%

 

 

15.55

%

 

 

16.18

%

 

 

16.77

%

Hilltop

 

 

20.97

%

 

 

20.07

%

 

 

19.90

%

 

 

23.85

%

 

 

23.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

Non-Performing Assets Portfolio Data

 

2022

 

2022

 

2022

 

2022

 

2021

Loans accounted for on a non-accrual basis ($000's) (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

4,269

 

 

 

4,735

 

 

 

4,947

 

 

 

6,153

 

 

 

6,601

 

Commercial and industrial

 

 

9,095

 

 

 

12,078

 

 

 

13,315

 

 

 

18,486

 

 

 

22,478

 

Construction and land development

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

2

 

1-4 family residential

 

 

16,138

 

 

 

16,968

 

 

 

16,542

 

 

 

18,723

 

 

 

21,123

 

Consumer

 

 

14

 

 

 

16

 

 

 

19

 

 

 

21

 

 

 

23

 

Broker-dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,517

 

 

 

33,798

 

 

 

34,824

 

 

 

43,384

 

 

 

50,227

 

Troubled debt restructurings included in accruing loans held for investment ($000's)

 

 

803

 

 

 

825

 

 

 

857

 

 

 

890

 

 

 

922

 

Non-performing loans ($000's)

 

 

30,320

 

 

 

34,623

 

 

 

35,681

 

 

 

44,274

 

 

 

51,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans as a % of total loans

 

 

0.33

%

 

 

0.39

%

 

 

0.38

%

 

 

0.47

%

 

 

0.52

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate owned ($000's)

 

 

2,325

 

 

 

1,637

 

 

 

1,516

 

 

 

2,175

 

 

 

2,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other repossessed assets ($000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets ($000's)

 

 

32,645

 

 

 

36,260

 

 

 

37,197

 

 

 

46,449

 

 

 

53,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets as a % of total assets

 

 

0.20

%

 

 

0.22

%

 

 

0.22

%

 

 

0.25

%

 

 

0.29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans past due 90 days or more and still accruing ($000's) (2):

 

 

92,099

 

 

 

96,532

 

 

 

82,410

 

 

 

87,489

 

 

 

60,775

 

___________________

(1)

Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications through January 1, 2022. The banking segment’s COVID-19 payment deferment programs since the second quarter of 2020 allowed for a deferral of principal and/or interest payments with such deferred principal payments due and payable on the maturity date of the existing loan. For the periods presented, the banking segment’s actions through December 31, 2021 included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $4 million as of December 31, 2021.

(2)

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 December 31,

 

 

 

2022

 

2021

 

 

 

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

 

$

882,322

 

 

$

11,634

 

5.27

%

$

1,852,140

 

 

$

13,708

 

2.96

%

Loans held for investment, gross (2)

 

 

7,774,350

 

 

 

106,271

 

5.42

%

 

7,695,090

 

 

 

82,396

 

4.25

%

Investment securities - taxable

 

 

2,843,881

 

 

 

23,293

 

3.28

%

 

2,677,894

 

 

 

13,916

 

2.08

%

Investment securities - non-taxable (3)

 

 

354,207

 

 

 

3,286

 

3.71

%

 

331,959

 

 

 

3,188

 

3.84

%

Federal funds sold and securities purchased under agreements to resell

 

 

161,632

 

 

 

2,173

 

5.33

%

 

194,351

 

 

 

164

 

0.33

%

Interest-bearing deposits in other financial institutions

 

 

1,749,902

 

 

 

15,751

 

3.57

%

 

2,683,656

 

 

 

943

 

0.14

%

Securities borrowed

 

 

1,350,873

 

 

 

14,162

 

4.10

%

 

1,474,421

 

 

 

8,524

 

2.26

%

Other

 

 

56,196

 

 

 

3,686

 

26.02

%

 

52,848

 

 

 

765

 

5.74

%

Interest-earning assets, gross (3)

 

 

15,173,363

 

 

 

180,256

 

4.71

%

 

16,962,359

 

 

 

123,604

 

2.89

%

Allowance for credit losses

 

 

(92,344

)

 

 

 

 

 

 

 

(109,555

)

 

 

 

 

 

 

Interest-earning assets, net

 

 

15,081,019

 

 

 

 

 

 

 

 

16,852,804

 

 

 

 

 

 

 

Noninterest-earning assets

 

 

1,637,295

 

 

 

 

 

 

 

 

1,402,216

 

 

 

 

 

 

 

Total assets

 

$

16,718,314

 

 

 

 

 

 

 

$

18,255,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

7,154,802

 

 

$

28,238

 

1.57

%

$

7,901,704

 

 

$

4,404

 

0.22

%

Securities loaned

 

 

1,274,038

 

 

 

13,179

 

4.10

%

 

1,422,303

 

 

 

6,624

 

1.85

%

Notes payable and other borrowings

 

 

1,355,809

 

 

 

15,114

 

4.42

%

 

1,233,924

 

 

 

7,733

 

2.49

%

Total interest-bearing liabilities

 

 

9,784,649

 

 

 

56,531

 

2.29

%

 

10,557,931

 

 

 

18,761

 

0.70

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

4,222,143

 

 

 

 

 

 

 

 

4,509,891

 

 

 

 

 

 

 

Other liabilities

 

 

652,900

 

 

 

 

 

 

 

 

677,433

 

 

 

 

 

 

 

Total liabilities

 

 

14,659,692

 

 

 

 

 

 

 

 

15,745,255

 

 

 

 

 

 

 

Stockholders’ equity

 

 

2,032,287

 

 

 

 

 

 

 

 

2,484,301

 

 

 

 

 

 

 

Noncontrolling interest

 

 

26,335

 

 

 

 

 

 

 

 

25,464

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

16,718,314

 

 

 

 

 

 

 

$

18,255,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (3)

 

 

 

 

$

123,725

 

 

 

 

 

 

$

104,843

 

 

 

Net interest spread (3)

 

 

 

 

 

 

 

2.42

%

 

 

 

 

 

 

2.19

%

Net interest margin (3)

 

 

 

 

 

 

 

3.24

%

 

 

 

 

 

 

2.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

 

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

 

$

1,221,235

 

 

$

52,315

 

4.28

%

$

2,293,543

 

 

$

64,767

 

2.82

%

Loans held for investment, gross (2)

 

 

7,840,848

 

 

 

363,892

 

4.71

%

 

7,645,292

 

 

 

339,548

 

4.44

%

Investment securities - taxable

 

 

2,819,282

 

 

 

75,805

 

2.69

%

 

2,493,848

 

 

 

47,582

 

1.91

%

Investment securities - non-taxable (3)

 

 

310,315

 

 

 

11,608

 

3.74

%

 

313,703

 

 

 

11,448

 

3.65

%

Federal funds sold and securities purchased under agreements to resell

 

 

162,575

 

 

 

4,098

 

2.52

%

 

152,273

 

 

 

372

 

0.24

%

Interest-bearing deposits in other financial institutions

 

 

2,306,960

 

 

 

31,705

 

1.37

%

 

2,078,666

 

 

 

2,942

 

0.14

%

Securities borrowed

 

 

1,298,276

 

 

 

44,414

 

3.37

%

 

1,445,464

 

 

 

61,667

 

4.21

%

Other

 

 

55,280

 

 

 

8,873

 

16.05

%

 

50,929

 

 

 

3,332

 

6.54

%

Interest-earning assets, gross (3)

 

 

16,014,771

 

 

 

592,710

 

3.70

%

 

16,473,718

 

 

 

531,658

 

3.23

%

Allowance for credit losses

 

 

(92,828

)

 

 

 

 

 

 

 

(129,689

)

 

 

 

 

 

 

Interest-earning assets, net

 

 

15,921,943

 

 

 

 

 

 

 

 

16,344,029

 

 

 

 

 

 

 

Noninterest-earning assets

 

 

1,488,994

 

 

 

 

 

 

 

 

1,451,928

 

 

 

 

 

 

 

Total assets

 

$

17,410,937

 

 

 

 

 

 

 

$

17,795,957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

7,561,501

 

 

$

50,412

 

0.67

%

$

7,722,584

 

 

$

23,624

 

0.31

%

Securities loaned

 

 

1,184,498

 

 

 

38,570

 

3.26

%

 

1,374,142

 

 

 

50,974

 

3.71

%

Notes payable and other borrowings

 

 

1,293,133

 

 

 

43,158

 

3.34

%

 

1,216,381

 

 

 

32,393

 

2.66

%

Total interest-bearing liabilities

 

 

10,039,132

 

 

 

132,140

 

1.32

%

 

10,313,107

 

 

 

106,991

 

1.04

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

4,455,779

 

 

 

 

 

 

 

 

4,157,962

 

 

 

 

 

 

 

Other liabilities

 

 

675,629

 

 

 

 

 

 

 

 

863,976

 

 

 

 

 

 

 

Total liabilities

 

 

15,170,540

 

 

 

 

 

 

 

 

15,335,045

 

 

 

 

 

 

 

Stockholders’ equity

 

 

2,213,756

 

 

 

 

 

 

 

 

2,435,185

 

 

 

 

 

 

 

Noncontrolling interest

 

 

26,641

 

 

 

 

 

 

 

 

25,727

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

17,410,937

 

 

 

 

 

 

 

$

17,795,957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (3)

 

 

 

 

$

460,570

 

 

 

 

 

 

$

424,667

 

 

 

Net interest spread (3)

 

 

 

 

 

 

 

2.38

%

 

 

 

 

 

 

2.19

%

Net interest margin (3)

 

 

 

 

 

 

 

2.88

%

 

 

 

 

 

 

2.58

%

___________________

(1)

Information presented on a consolidated basis.

(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 $0.3 million and $0.5 million for the three months ended December 31, 2022 and 2021, respectively, and $1.6 million and $1.7 million for the year ended December 31, 2022 and 2021, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, January 27, 2023. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review fourth quarter and full year 2022 financial results. Interested parties can access the conference call by dialing 1-844-200-6205 (United States), 1-833-950-0062 (Canada) or 1-929-526-1599 (all other locations) and then using the access code 429656. 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 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 December 31, 2022, Hilltop employed approximately 4,140 people and operated approximately 360 locations in 47 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 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 “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,” “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; (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; and (v) risks associated with concentration in real estate related loans. 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.

Investor Relations Contact: Erik Yohe 214-525-4634 eyohe@hilltop-holdings.com

Hilltop (NYSE:HTH)
Historical Stock Chart
From Apr 2023 to May 2023 Click Here for more Hilltop Charts.
Hilltop (NYSE:HTH)
Historical Stock Chart
From May 2022 to May 2023 Click Here for more Hilltop Charts.