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Jun 30, 2020
Hilltop Q2 2020 Earnings Report
Hilltop's financial performance was marked by significant growth in the mortgage origination segment and the sale of the insurance segment, National Lloyds Corporation. Income from continuing operations increased, but was tempered by a substantial build in the allowance for credit losses due to economic deterioration from COVID-19.
Key Takeaways
Hilltop Holdings reported strong second-quarter results, driven by record performance in its mortgage origination segment and growth in its securities business. The company completed the sale of its insurance segment and increased its allowance for credit losses in response to the economic impact of COVID-19.
Income from continuing operations to common stockholders was $97.7 million, or $1.08 per diluted share.
Mortgage origination segment net gains from sales of loans and other mortgage production income increased by 125.1% to $295.3 million.
Mortgage loan origination production volume was $6.1 billion, up from $4.0 billion in the second quarter of 2019.
The company completed the sale of its insurance segment, National Lloyds Corporation, for cash proceeds of $154.1 million.
Hilltop
Hilltop
Hilltop Revenue by Segment
Revenue by Segment
Banking Revenue
CapyFin.comBroker-Dealer Revenue
CapyFin.comMortgage Origination Revenue
CapyFin.com Forward Guidance
The COVID-19 pandemic is expected to continue to have implications on Hilltop's business and operations for the remainder of 2020. The extent of the impact is dependent on certain developments and uncertainties.
Positive Outlook
- Commitment to maintain strong capital and liquidity.
- Ability to meet the needs of its customers and communities.
- Teammates across Hilltop continue to execute and display compassion for clients.
- Mortgage franchise delivered record pre-tax income.
- Securities business grew pre-tax income.
Challenges Ahead
- Uncertain outlook for 2020 due to the COVID-19 pandemic.
- Broader adverse implications of COVID-19 on customers and clients.
- Potential further disruption and deterioration in the financial services industry.
- Additional, or extended, federal, state and local government orders and regulations might be imposed in response to the pandemic.
- The Bank recognized approximately $66 million of provision expense related to significant deterioration in the economic outlook from the end of the first quarter through June.