| Hilltop Holdings Inc. |
200 Crescent Court, Suite 1330 | |
Dallas, Texas 75201 | |
Tel: 214.855.2177 | |
Fax: 214.855.2173 | |
www.hilltop-holdings.com | |
NYSE: HTH |
November 20, 2008 Via Facsimile & EDGAR
United States Securities and Exchange Commission
Division of Corporate Finance
Mail Stop 6010
100 F Street, N.E.
Washington, D.C. 20549
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| Re: | Hilltop Holdings Inc. |
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| Form 10-K for the Fiscal Year Ended December 31, 2007 |
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| Form 10-Q for the Quarterly Period Ended June 30, 2008 |
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| File No. 001-31987 |
Ladies and Gentlemen:
Hilltop Holdings Inc., a Maryland corporation (the “Company”), hereby files via EDGAR with the United States Securities and Exchange Commission (the “Commission”) the following responses to the Staff’s comments in a letter to the Company, dated November 10, 2008. For your convenience, we have repeated each comment prior to the response. All references to page numbers in the discussion below are to the pages in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as originally filed with the Commission on March 17, 2008 (the “Form 10-K”).
Form 10-K for the Fiscal Year Ended December 31, 2007
Loss Development, pages 13-14
1. Please refer to your response to our prior comment number one. It does not appear that you have addressed our comment in its entirety. Please provide in your disclosure a reconciliation explaining and quantifying the reasons for the differences between the statutory reserves as of December 31, 2007 (for ASIC and NLIC) and your total GAAP reserves of $18,091,000 as of December 31, 2007. In addition, please revise your disclosure to include a ten year table presented in accordance with GAAP as required by Industry Guide 6 or disclose why it is impracticable to do so.
Response: For purposes of clarification, the ten year tables appearing on pages 13 (NLIC) and 14 (ASIC) of the Form 10-K are presented in statutory format, which is the same as GAAP, net of reinsurance recoverable.
With respect to your request for a reconciliation of statutory reserves and GAAP reserves, we propose that prospectively the Company include the following table in its filings beginning with the year end 2008.
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| Year Ended December 31, |
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| 1998 |
| 1999 |
| 2000 |
| 2001 |
| 2002 |
| 2003 |
| 2004 |
| 2005 |
| 2006 |
| 2007 |
| Total |
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Net liability - end of year (NLIC) |
| — |
| — |
| 18 |
| 19 |
| 25 |
| 41 |
| 544 |
| 5,966 |
| 1,473 |
| 4,790 | (a) | 12,876 |
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Net liability - end of year (ASIC) |
| — |
| — |
| (22 | ) | 7 |
| 28 |
| 8 |
| 189 |
| 288 |
| 590 |
| 1,435 | (a) | 2,523 |
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Reinsurance recoverable |
| — |
| — |
| 431 |
| 19 |
| — |
| — |
| 8 |
| 1,095 |
| 100 |
| 1,039 |
| 2,692 |
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Gross combined liability - end of year |
| — |
| — |
| 427 |
| 45 |
| 53 |
| 49 |
| 741 |
| 7,349 |
| 2,163 |
| 7,264 |
| 18,091 |
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Note:
(a) 2007 net of amounts paid in 2007 of 47,601
By reconciling the original reserve, less the cumulative amount of net liability paid in the tables presented in the Form 10-K, and adding reinsurance recoverable to arrive at the gross liability on the balance sheet in the table above, we will be providing a ten year table presented in accordance with GAAP as required by Industry Guide 6 in our future filings.
Item 7. Management’s Discussion and Analysis of Financial Condition and Result of Operations, page 50
Critical Accounting Policies and Estimates, page 52
2. With respect to part (a) of your prior comment two, please present the reserve by line of business for each year presented.
Response: We respectfully request that the Commission accept the table below, as previously presented with the reserves by line of business identified at the top of the table.
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| Special |
| Commercial |
| Other |
| Fidelity |
| All |
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Company |
| Homeowners |
| Property |
| Multiple Peril |
| Liability |
| &Surety |
| Lines |
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ASIC |
| $ | 1,511 |
| $ | 1,199 |
| $ | 227 |
| $ | 913 |
| $ | 0 |
| $ | 3,850 |
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NLIC |
| 7,035 |
| 5,584 |
| 609 |
| 962 |
| 51 |
| 14,241 |
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Consolidated |
| $ | 8,546 |
| $ | 6,783 |
| $ | 836 |
| $ | 1,875 |
| $ | 51 |
| $ | 18,091 |
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In conclusion, the Company hereby acknowledges that:
· the Company is responsible for the adequacy and accuracy of the disclosure in the filings;
· staff comments or changes to disclosures in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
· the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If any members of the Commission have any questions concerning the responses above or desire further information or clarification in connection therewith, he or she should contact Darren Parmenter (214) 855-2171 or Corey Prestidge at (214) 855-2181.
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| Very truly yours, |
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| /s/ DARREN PARMENTER |
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| Darren Parmenter |
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| Senior Vice President |
CGP:cgp
cc: Tabatha Akins
United States Securities and Exchange Commission
Corey Prestidge
Hilltop Holdings Inc.
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