UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.) | |
organization) | ||
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to section 12(b) of the Act:
Title of each class | Trading symbol | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated filer ◻ | ||
Non-accelerated filer ◻ | Smaller reporting company | |
Emerging growth company | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The number of shares of the registrant's common stock outstanding at April 23, 2021 was
HILLTOP HOLDINGS INC.
FORM 10-Q
FOR THE QUARTER ENDED March 31, 2021
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 42 | |
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87 | ||
88 | ||
88 | ||
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89 |
2
HILLTOP HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(Unaudited)
March 31, | December 31, |
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| 2021 |
| 2020 |
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Assets | |||||||
Cash and due from banks | $ | | $ | | |||
Federal funds sold |
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Assets segregated for regulatory purposes | | | |||||
Securities purchased under agreements to resell | | | |||||
Securities: | |||||||
Trading, at fair value |
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Available for sale, at fair value, net (amortized cost of $ |
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Held to maturity, at amortized cost, net (fair value of $ | | | |||||
Equity, at fair value | | | |||||
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Loans held for sale |
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Loans held for investment, net of unearned income |
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Allowance for credit losses |
| ( |
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Loans held for investment, net |
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Broker-dealer and clearing organization receivables |
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Premises and equipment, net |
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Operating lease right-of-use assets | |
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Mortgage servicing rights | | | |||||
Other assets |
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Goodwill |
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Other intangible assets, net |
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Total assets | $ | | $ | | |||
Liabilities and Stockholders' Equity | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | | $ | | |||
Interest-bearing |
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Total deposits |
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Broker-dealer and clearing organization payables |
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Short-term borrowings |
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Securities sold, not yet purchased, at fair value | | | |||||
Notes payable |
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Operating lease liabilities | |
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Junior subordinated debentures |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (see Notes 14 and 15) | |||||||
Stockholders' equity: | |||||||
Hilltop stockholders' equity: | |||||||
Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Retained earnings | |
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Deferred compensation employee stock trust, net | |
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Employee stock trust ( | ( |
| ( | ||||
Total Hilltop stockholders' equity |
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Noncontrolling interests |
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Total stockholders' equity |
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Total liabilities and stockholders' equity | $ | | $ | |
See accompanying notes.
3
HILLTOP HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended March 31, | ||||||
| 2021 |
| 2020 | |||
Interest income: | ||||||
Loans, including fees | $ | | $ | | ||
Securities borrowed | | | ||||
Securities: | ||||||
Taxable |
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Tax-exempt |
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Other |
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Total interest income |
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Interest expense: | ||||||
Deposits |
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Securities loaned | | | ||||
Short-term borrowings |
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Notes payable |
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Junior subordinated debentures |
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Other |
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Total interest expense |
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Net interest income |
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Provision for (reversal of) credit losses |
| ( |
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Net interest income after provision for (reversal of) credit losses |
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Noninterest income: | ||||||
Net gains from sale of loans and other mortgage production income |
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Mortgage loan origination fees |
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Securities commissions and fees |
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Investment and securities advisory fees and commissions | |
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Other |
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Total noninterest income |
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Noninterest expense: | ||||||
Employees' compensation and benefits |
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Occupancy and equipment, net |
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Professional services |
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Other |
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Total noninterest expense |
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Income from continuing operations before income taxes |
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Income tax expense |
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Income from continuing operations | | | ||||
Income from discontinued operations, net of income taxes | — | | ||||
Net income |
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Less: Net income attributable to noncontrolling interest |
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Income attributable to Hilltop | $ | | $ | | ||
Earnings per common share: | ||||||
Basic: | ||||||
Earnings from continuing operations | $ | | $ | | ||
Earnings from discontinued operations | — | | ||||
$ | | $ | | |||
Diluted: | ||||||
Earnings from continuing operations | $ | | $ | | ||
Earnings from discontinued operations | — | | ||||
$ | | $ | | |||
Weighted average share information: | ||||||
Basic |
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Diluted |
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See accompanying notes.
4
HILLTOP HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(Unaudited)
Three Months Ended March 31, | ||||||
| 2021 |
| 2020 | |||
Net income | $ | | $ | | ||
Other comprehensive income: | ||||||
Change in fair value of cash flow and fair value hedges, net of tax of $ | | ( | ||||
Net unrealized gains (losses) on securities available for sale, net of tax of $( |
| ( |
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Reclassification adjustment for gains (losses) included in net income, net of tax of $( |
| ( |
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Comprehensive income |
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Less: comprehensive income attributable to noncontrolling interest |
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Comprehensive income applicable to Hilltop | $ | | $ | |
See accompanying notes.
5
HILLTOP HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
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| Accumulated |
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| Deferred |
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| Total |
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Additional | Other | Compensation | Employee | Hilltop | Total | |||||||||||||||||||||||||
Common Stock | Paid-in | Comprehensive | Retained | Employee Stock | Stock Trust | Stockholders’ | Noncontrolling | Stockholders’ | ||||||||||||||||||||||
Shares | Amount | Capital | Income | Earnings | Trust, Net | Shares | Amount | Equity | Interest | Equity | ||||||||||||||||||||
Balance, December 31, 2019 | | $ | | $ | | $ | | $ | | $ | | | $ | ( | $ | | $ | | $ | | ||||||||||
Net income | — | — | — | — | | — | — | — | | | | |||||||||||||||||||
Other comprehensive income | — | — | — | | — | — | — | — | | — | | |||||||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | — | | — | | |||||||||||||||||||
Common stock issued to board members | | — | | — | — | — | — | — | | — | | |||||||||||||||||||
Issuance of common stock related to share-based awards, net | | | ( | — | — | — | — | — | ( | — | ( | |||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||
Dividends on common stock ($ | — | — | — | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||
Deferred compensation plan | — | — | — | — | — | ( | — | | | — | | |||||||||||||||||||
Adoption of accounting standards | — | — | — | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||
Net cash distributed to noncontrolling interest | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||
Balance, March 31, 2020 | | $ | | $ | | $ | | $ | | $ | | | $ | ( | $ | | $ | | $ | | ||||||||||
Balance, December 31, 2020 | | $ | | $ | | $ | | $ | | $ | | | $ | ( | $ | | $ | | $ | | ||||||||||
Net income | — | — | — | — | | — | — | — | | | | |||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||
Stock-based compensation expense | — | — | | — | — | — | — | — | | — | | |||||||||||||||||||
Common stock issued to board members | | — | | — | — | — | — | — | | — | | |||||||||||||||||||
Issuance of common stock related to share-based awards, net | | | ( | — | — | — | — | — | ( | — | ( | |||||||||||||||||||
Repurchases of common stock | ( | ( | ( | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||
Dividends on common stock ($ | — | — | — | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||
Deferred compensation plan | — | — | — | — | — | ( | ( | | ( | — | ( | |||||||||||||||||||
Net cash distributed to noncontrolling interest | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||
Balance, March 31, 2021 | | $ | | $ | | $ | | $ | | $ | | | $ | ( | $ | | $ | | $ | |
See accompanying notes.
6
HILLTOP HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three Months Ended March 31, | |||||||
| 2021 |
| 2020 |
| |||
Operating Activities | |||||||
Net income | $ | | $ | | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Provision for (reversal of) credit losses |
| ( |
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Depreciation, amortization and accretion, net |
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Deferred income taxes |
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| ( | |||
Other, net |
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| ( | |||
Net change in securities purchased under agreements to resell |
| ( |
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Net change in trading securities |
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Net change in broker-dealer and clearing organization receivables |
| ( |
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Net change in other assets |
| ( |
| ( | |||
Net change in broker-dealer and clearing organization payables |
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| ( | |||
Net change in other liabilities |
| ( |
| ( | |||
Net change in securities sold, not yet purchased | |
| ( | ||||
Proceeds from sale of mortgage servicing rights asset |
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Change in valuation of mortgage servicing rights asset | ( | | |||||
Net gains from sales of loans | ( |
| ( | ||||
Loans originated for sale |
| ( |
| ( | |||
Proceeds from loans sold | |
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Net cash provided by (used in) operating activities for continuing operations |
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| ( | |||
Net cash provided by operating activities for discontinued operations | — | | |||||
Net cash provided by (used in) operating activities | | ( | |||||
Investing Activities | |||||||
Proceeds from maturities and principal reductions of securities held to maturity |
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Proceeds from sales, maturities and principal reductions of securities available for sale |
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Purchases of securities held to maturity |
| — | ( | ||||
Purchases of securities available for sale |
| ( | ( | ||||
Net change in loans held for investment |
| ( | ( | ||||
Purchases of premises and equipment and other assets |
| ( | ( | ||||
Proceeds from sales of premises and equipment and other real estate owned | | | |||||
Net cash received from (paid to) Federal Home Loan Bank and Federal Reserve Bank stock |
| ( | | ||||
Net cash used in investing activities for continuing operations | ( |
| ( | ||||
Net cash provided by investing activities for discontinued operations | — | | |||||
Net cash used in investing activities |
| ( |
| ( | |||
Financing Activities | |||||||
Net change in deposits |
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Net change in short-term borrowings |
| ( |
| ( | |||
Proceeds from notes payable |
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Payments on notes payable |
| ( |
| ( | |||
Payments to repurchase common stock |
| ( |
| ( | |||
Dividends paid on common stock |
| ( |