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Dec 31, 2021
Hilltop Q4 2021 Earnings Report
Hilltop's earnings decreased due to lower noninterest income, partially offset by a reversal of credit losses.
Key Takeaways
Hilltop Holdings reported a decrease in net income for Q4 2021 compared to Q4 2020, primarily due to a decline in noninterest income. However, PlainsCapital Bank showed an increase in pre-tax income. The company also returned a significant amount of capital to shareholders during the year.
PlainsCapital Bank's pre-tax income increased by $9.2 million compared to Q4 2020.
PrimeLending's pre-tax income decreased by $52.7 million compared to Q4 2020.
HilltopSecurities' pre-tax income decreased by $32.6 million compared to Q4 2020.
Mortgage origination volume decreased by 27% compared to Q4 2020, while the overall industry volume declined approximately 34%.
Forward Guidance
Hilltop Holdings provided its outlook for 2022, including expectations for loan and deposit growth, net interest income, noninterest income and expense, provision expense, and effective tax rate.
Positive Outlook
- 1 – 4 family loan retention $30 – $75 million per month, through first half of 2022
- FY average commercial loan growth: 2 – 5%, excluding PPP loans
- NII growth 0 – 3%, headwinds from lower PPP and accretion
- Outlook assumes two rate increases by the Federal Reserve during 2022
- Non - variable expenses increase: 3% – 6%
Challenges Ahead
- FY average total deposits decline: 3% – 7%, excluding any additional stimulus efforts
- Purchase accounting accretion expected to decline by 50% versus 2021 levels
- Loan floors and competition expected to pressure loan yields during 2022
- Mortgage gain on sale margins continue to be pressured as volumes decline across the industry, FY average 300 – 325 bps (third party sales)
Historical Earnings Impact
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Avg. Return Before/After Earnings
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