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Jun 30, 2021
Hilltop Q2 2021 Earnings Report
Hilltop Holdings' financial performance decreased due to lower noninterest income, partially offset by an increase in net interest income and a reversal of credit losses.
Key Takeaways
Hilltop Holdings reported a net income of $99.1 million for Q2 2021, a decrease of 23% compared to Q2 2020. The decline was primarily driven by lower noninterest income, partially offset by an increase in net interest income and a reversal of credit losses. EPS diluted was $1.21 compared to $1.42 in the prior year quarter.
PlainsCapital generated $87.0 million in pre-tax income during Q2 2021, an increase of $104.4 million from Q2 2020.
PrimeLending generated $49.0 million in pre-tax income during Q2 2021, a decrease of $89.3 million from Q2 2020.
Mortgage origination volume in Q2 2021 was $5.9 billion, a decline of 3% from Q2 2020 and gain-on-sale margin declined by 4 basis points versus Q2 2020 to 364 basis points.
HilltopSecurities generated $6.9 million in pre-tax income and a 7.3% pre-tax margin in Q2 2021.
Forward Guidance
Hilltop Holdings provided commentary on loan growth, deposit growth, net interest income, noninterest income, noninterest expense, provision expense, and effective tax rate for 2021.
Positive Outlook
- FY average total deposit growth: 7 – 10% excluding additional stimulus efforts
- Deposit costs expected to improve slowly as Consumer CDs mature and reset
- Non-variable expenses to remain stable with 2020 levels
- 1 – 4 family loan retention $50 – $75 million per month
- Effective Tax Rate (GAAP) 22 – 24% full year basis
Challenges Ahead
- Loan yields expected to remain under pressure, excluding accelerated PPP loan fees
- Mortgage gain on sale margins continue to be pressured as volumes decline across the industry, FY average 360 – 385 bps (third party sales)
- Expecting FY PrimeLending mortgage originations between $20 – $23 billion, subject to market conditions
Historical Earnings Impact
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Avg. Return Before/After Earnings
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