Hilltop Holdings Inc (HTH)

[Enterprising Investor]

Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2015 (2/24/16)

DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the fourth quarter and full year 2015. Hilltop produced income to common stockholders of $20.7 million, or $0.21 per diluted share, for the fourth quarter of 2015, compared to $31.7 million, or $0.35 per diluted share, for the fourth quarter of 2014. Income to common stockholders for the full year 2015 was $209.1 million, or $2.09 per diluted share, compared to $105.9 million, or $1.17 per diluted share, for the full year 2014. Hilltop’s annualized return on average assets and return on average equity for the fourth quarter of 2015 were 0.68% and 4.70%, respectively, compared to 1.42% and 8.55% for the fourth quarter of 2014, respectively. The return on average assets and return on average equity for the full year 2015 were 1.70% and 12.32%, respectively, compared to 1.26% and 8.01% for the full year 2014, respectively.

Jeremy Ford, CEO of Hilltop, commented, “Hilltop finished 2015 with a solid fourth quarter. PlainsCapital Bank generated robust loan growth, while maintaining a strong core net interest margin and healthy credit quality. PrimeLending continues to grow mortgage loan origination volume and defend its market share. Despite unseasonal severe storms in North Texas in late December, National Lloyds achieved profitable fourth quarter and full year results.”

Mr. Ford added, “We are excited to report our two broker-dealer subsidiaries have successfully merged into one entity, HilltopSecurities. While managing through the integration process, the broker-dealer segment’s profitability steadily improved during 2015, and we are now well-positioned to execute on our vision during 2016.”

Mr. Ford concluded, “The core fundamentals of our operating businesses continue to trend positively, led by the banking segment, during the current challenging market environment. With Hilltop’s strong excess capital position and diversified earnings stream, we are well-situated to pursue M&A and organic growth opportunities.”

Fourth Quarter 2015 Highlights for Hilltop:

• Hilltop’s total assets were $11.9 billion at December 31, 2015, compared to $12.4 billion at September 30, 2015;

• Hilltop’s common equity increased by $21.3 million from September 30, 2015 to $1.7 billion at December 31, 2015;

• Non-covered loans1 held for investment, net of allowance for loan losses, increased by 4.4% to $5.2 billion, and covered loans1, net of allowance for loan losses, decreased by 9.9% to $378.8 million from September 30, 2015 to December 31, 2015;

• Total deposits increased by $131.9 million from September 30, 2015 to $7.0 billion at December 31, 2015;

• Hilltop was well-capitalized with a Tier 1 Leverage Ratio2 of 12.65% and Total Capital Ratio of 18.89% at December 31, 2015;

• Hilltop’s taxable equivalent net interest margin3 was 3.73% for the fourth quarter of 2015, a 47 basis point decrease from 4.20% in the third quarter of 2015;

• The provision for loan losses was $4.3 million during the fourth quarter of 2015, compared to $5.6 million in the third quarter of 2015;

• For the fourth quarter of 2015, noninterest income was $276.9 million, compared to $213.8 million in the fourth quarter of 2014, a 29.5% increase;

• For the fourth quarter of 2015, noninterest expense was $338.7 million, compared to $246.8 million in the fourth quarter of 2014, a 37.3% increase; and

• In connection with the SWS Merger, during the fourth quarter of 2015, Hilltop incurred $14.4 million in pre-tax transaction and integration costs, consisting of $4.9 million in the broker-dealer segment and $9.5 million within corporate.

1 “Covered loans” refers 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 fourth quarter of 2015, excluding goodwill and intangible assets.
3 Taxable equivalent adjustments are based on a 35% tax rate. Measure is defined as taxable equivalent net interest income divided by average interest-earning assets.

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Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Thursday, February 25, 2016. Hilltop President and CEO Jeremy B. Ford and other key management members will discuss 2015 year end 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. Through its wholly owned subsidiary, PlainsCapital Corporation, a regional commercial banking franchise, it has two operating subsidiaries: PlainsCapital Bank and PrimeLending. Through its wholly owned subsidiaries Hilltop Securities Inc. and Hilltop Securities Independent Network Inc. it provides 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 December 31, 2015, Hilltop employed approximately 5,300 people and operated approximately 400 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.

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