Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 21, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-31987 | |
Entity Registrant Name | Hilltop Holdings Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 84-1477939 | |
Entity Address, Address Line One | 6565 Hillcrest Avenue | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75205 | |
City Area Code | 214 | |
Local Phone Number | 855-2177 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | HTH | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 64,591,491 | |
Entity Central Index Key | 0001265131 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and due from banks | $ 1,777,584 | $ 2,823,138 |
Federal funds sold | 663 | 385 |
Assets segregated for regulatory purposes | 109,358 | 221,740 |
Securities purchased under agreements to resell | 145,365 | 118,262 |
Securities: | ||
Trading, at fair value | 641,864 | 647,998 |
Available for sale, at fair value, net (amortized cost of $1,753,205 and $2,148,635, respectively) | 1,584,724 | 2,130,568 |
Held to maturity, at amortized cost, net (fair value of $792,559 and $276,296, respectively) | 889,452 | 267,684 |
Equity, at fair value | 209 | 250 |
Total securities | 3,116,249 | 3,046,500 |
Loans held for sale | 1,003,605 | 1,878,190 |
Loans | 7,944,246 | 7,879,904 |
Allowance for credit losses | (91,783) | (91,352) |
Loans held for investment, net | 7,852,463 | 7,788,552 |
Broker-dealer and clearing organization receivables | 1,255,052 | 1,672,946 |
Premises and equipment, net | 191,423 | 204,438 |
Operating lease right-of-use assets | 103,099 | 112,328 |
Mortgage servicing rights | 156,539 | 86,990 |
Other assets | 624,235 | 452,880 |
Goodwill | 267,447 | 267,447 |
Other intangible assets, net | 12,209 | 15,284 |
Total assets | 16,615,291 | 18,689,080 |
Deposits: | ||
Noninterest-bearing | 4,546,816 | 4,577,183 |
Interest-bearing | 6,805,198 | 8,240,894 |
Total deposits | 11,352,014 | 12,818,077 |
Broker-dealer and clearing organization payables | 1,176,156 | 1,477,300 |
Short-term borrowings | 942,309 | 859,444 |
Securities sold, not yet purchased, at fair value | 99,515 | 96,586 |
Notes payable | 390,354 | 387,904 |
Operating lease liabilities | 120,635 | 130,960 |
Other liabilities | 475,425 | 369,606 |
Total liabilities | 14,556,408 | 16,139,877 |
Commitments and contingencies (see Notes 13 and 14) | ||
Hilltop stockholders' equity: | ||
Common stock, $0.01 par value, 125,000,000 shares authorized; 64,591,491 and 78,964,978 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 646 | 790 |
Additional paid-in capital | 1,043,605 | 1,274,446 |
Accumulated other comprehensive income (loss) | (119,864) | (10,219) |
Retained earnings | 1,107,586 | 1,257,014 |
Deferred compensation employee stock trust, net | 479 | 752 |
Employee stock trust (22,606 and 5,749 shares, at cost, at September 30, 2022 and December 31, 2021, respectively) | (641) | (115) |
Total Hilltop stockholders' equity | 2,031,811 | 2,522,668 |
Noncontrolling interests | 27,072 | 26,535 |
Total stockholders' equity | 2,058,883 | 2,549,203 |
Total liabilities and stockholders' equity | $ 16,615,291 | $ 18,689,080 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Available for sale, amortized cost | $ 1,753,205 | $ 2,148,635 |
Held to maturity, fair value | $ 792,559 | $ 276,296 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 64,591,491 | 78,964,978 |
Common stock, shares outstanding | 64,591,491 | 78,964,978 |
Employee stock trust, shares | 22,606 | 5,749 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Interest income: | ||||
Loans, including fees | $ 109,165 | $ 99,769 | $ 298,301 | $ 308,208 |
Securities borrowed | 10,938 | 8,585 | 30,252 | 53,143 |
Securities: | ||||
Taxable | 19,642 | 12,341 | 52,512 | 33,717 |
Tax-exempt | 2,451 | 2,687 | 7,011 | 7,127 |
Other | 14,276 | 1,796 | 23,066 | 4,723 |
Total interest income | 156,472 | 125,178 | 411,142 | 406,918 |
Interest expense: | ||||
Deposits | 12,525 | 5,303 | 22,174 | 19,220 |
Securities loaned | 9,407 | 6,519 | 25,390 | 44,350 |
Short-term borrowings | 5,550 | 2,400 | 10,615 | 6,786 |
Notes payable | 3,907 | 5,465 | 12,154 | 15,515 |
Junior subordinated debentures | 419 | 1,558 | ||
Other | 1,597 | (18) | 5,276 | 801 |
Total interest expense | 32,986 | 20,088 | 75,609 | 88,230 |
Net interest income | 123,486 | 105,090 | 335,533 | 318,688 |
Provision for (reversal of) credit losses | (780) | (5,819) | 4,671 | (39,648) |
Net interest income after provision for (reversal of) credit losses | 124,266 | 110,909 | 330,862 | 358,336 |
Noninterest income: | ||||
Net gains from sale of loans and other mortgage production income | 57,998 | 203,152 | 266,435 | 669,857 |
Mortgage loan origination fees | 39,960 | 38,780 | 114,400 | 124,081 |
Securities commissions and fees | 34,076 | 34,412 | 105,979 | 111,026 |
Investment and securities advisory fees and commissions | 35,031 | 49,646 | 96,738 | 109,609 |
Other | 39,910 | 41,955 | 79,124 | 110,856 |
Total noninterest income | 206,975 | 367,945 | 662,676 | 1,125,429 |
Noninterest expense: | ||||
Employees' compensation and benefits | 200,450 | 258,679 | 605,796 | 777,518 |
Occupancy and equipment, net | 25,041 | 25,428 | 74,038 | 74,861 |
Professional services | 10,631 | 14,542 | 36,939 | 44,366 |
Other | 52,616 | 56,525 | 156,858 | 168,459 |
Total noninterest expense | 288,738 | 355,174 | 873,631 | 1,065,204 |
Income before income taxes | 42,503 | 123,680 | 119,907 | 418,561 |
Income tax expense | 9,249 | 28,257 | 27,191 | 97,261 |
Net income | 33,254 | 95,423 | 92,716 | 321,300 |
Less: Net income attributable to noncontrolling interest | 1,186 | 2,517 | 5,138 | 8,990 |
Income attributable to Hilltop | $ 32,068 | $ 92,906 | $ 87,578 | $ 312,310 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.50 | $ 1.16 | $ 1.21 | $ 3.84 |
Diluted (in dollars per share) | $ 0.50 | $ 1.15 | $ 1.21 | $ 3.82 |
Weighted average share information: | ||||
Basic (in shares) | 64,552 | 80,109 | 72,400 | 81,306 |
Diluted (in shares) | 64,669 | 80,542 | 72,557 | 81,763 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income | $ 33,254 | $ 95,423 | $ 92,716 | $ 321,300 |
Other comprehensive income (loss): | ||||
Change in fair value of cash flow and fair value hedges, net of tax of $2,188, $88, $5,099 and $522, respectively | 21,749 | 1,417 | 58,158 | 5,061 |
Net unrealized gains (losses) on securities available for sale, net of tax of $(14,506), $0, $(34,747) and $(6,619), respectively | (48,361) | (8,143) | (115,679) | (22,385) |
Reclassification adjustment for gains (losses) included in net income, net of tax of $0, $0, $3 and $(21), respectively | 10 | (72) | ||
Adjustment for unrealized losses on securities transferred from available-for sale to held-to-maturity, net of tax of $0, $0, $(17,033) and $0, respectively | (56,690) | |||
Amortization of unrealized losses on securities transferred from available-for-sale to held-maturity, net of tax $609, $0, $1,369 and $0, respectively | 2,027 | 4,556 | ||
Comprehensive income (loss) | 8,669 | 88,697 | (16,929) | 303,904 |
Less: comprehensive income attributable to noncontrolling interest | 1,186 | 2,517 | 5,138 | 8,990 |
Comprehensive income (loss) applicable to Hilltop | $ 7,483 | $ 86,180 | $ (22,067) | $ 294,914 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Cash flow hedge, tax | $ 2,188 | $ 88 | $ 5,099 | $ 522 |
Net unrealized gains (losses) on securities available for sale, tax | (14,506) | 0 | (34,747) | (6,619) |
Reclassification adjustment, tax | 0 | 0 | 3 | (21) |
Adjustment for unrealized losses on securities | 0 | 0 | (17,033) | 0 |
Amortization of unrealized losses on securities | $ 609 | $ 0 | $ 1,369 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Parent | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Deferred Compensation Employee Stock Trust, Net | Employee Stock Trust | Noncontrolling Interest | Total |
Balance at Dec. 31, 2020 | $ 2,323,939 | $ 822 | $ 1,317,929 | $ 17,763 | $ 986,792 | $ 771 | $ (138) | $ 26,708 | $ 2,350,647 |
Balance (in shares) at Dec. 31, 2020 | 82,185 | 7 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 312,310 | 312,310 | 8,990 | 321,300 | |||||
Other comprehensive loss | (17,396) | (17,396) | (17,396) | ||||||
Stock-based compensation expense | 12,889 | 12,889 | 12,889 | ||||||
Common stock issued to board members | 449 | 449 | 449 | ||||||
Common stock issued to board members (in shares) | 13 | ||||||||
Issuance of common stock related to share-based awards, net | (2,691) | $ 3 | (2,694) | (2,691) | |||||
Issuance of common stock related to share-based awards, net (in shares) | 394 | ||||||||
Repurchases of common stock | (123,631) | $ (35) | (58,301) | (65,295) | (123,631) | ||||
Repurchases of common stock (in shares) | (3,633) | ||||||||
Dividends on common stock | (29,500) | (29,500) | (29,500) | ||||||
Deferred compensation plan | 2 | (20) | $ 22 | 2 | |||||
Deferred compensation plan (in shares) | (1) | ||||||||
Net cash distributed to noncontrolling interest | (9,727) | (9,727) | |||||||
Balance at Sep. 30, 2021 | 2,476,371 | $ 790 | 1,270,272 | 367 | 1,204,307 | 751 | $ (116) | 25,971 | 2,502,342 |
Balance (in shares) at Sep. 30, 2021 | 78,959 | 6 | |||||||
Balance at Jun. 30, 2021 | 2,470,281 | $ 812 | 1,302,439 | 7,093 | 1,159,304 | 754 | $ (121) | 26,095 | 2,496,376 |
Balance (in shares) at Jun. 30, 2021 | 81,153 | 6 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 92,906 | 92,906 | 2,517 | 95,423 | |||||
Other comprehensive loss | (6,726) | (6,726) | (6,726) | ||||||
Stock-based compensation expense | 4,103 | 4,103 | 4,103 | ||||||
Common stock issued to board members | 152 | 152 | 152 | ||||||
Common stock issued to board members (in shares) | 5 | ||||||||
Issuance of common stock related to share-based awards, net | (441) | (441) | (441) | ||||||
Issuance of common stock related to share-based awards, net (in shares) | 43 | ||||||||
Repurchases of common stock | (74,160) | $ (22) | (35,981) | (38,157) | (74,160) | ||||
Repurchases of common stock (in shares) | (2,242) | ||||||||
Dividends on common stock | (9,746) | (9,746) | (9,746) | ||||||
Deferred compensation plan | 2 | (3) | $ 5 | 2 | |||||
Net cash distributed to noncontrolling interest | (2,641) | (2,641) | |||||||
Balance at Sep. 30, 2021 | 2,476,371 | $ 790 | 1,270,272 | 367 | 1,204,307 | 751 | $ (116) | 25,971 | 2,502,342 |
Balance (in shares) at Sep. 30, 2021 | 78,959 | 6 | |||||||
Balance at Dec. 31, 2021 | 2,522,668 | $ 790 | 1,274,446 | (10,219) | 1,257,014 | 752 | $ (115) | 26,535 | 2,549,203 |
Balance (in shares) at Dec. 31, 2021 | 78,965 | 6 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 87,578 | 87,578 | 5,138 | 92,716 | |||||
Other comprehensive loss | (109,645) | (109,645) | (109,645) | ||||||
Stock-based compensation expense | 11,553 | 11,553 | 11,553 | ||||||
Common stock issued to board members | 451 | 451 | 451 | ||||||
Common stock issued to board members (in shares) | 17 | ||||||||
Issuance of common stock related to share-based awards, net | (4,202) | $ 4 | (4,206) | (4,202) | |||||
Issuance of common stock related to share-based awards, net (in shares) | 478 | ||||||||
Repurchases of common stock | (442,336) | $ (148) | (238,639) | (203,549) | (442,336) | ||||
Repurchases of common stock (in shares) | (14,869) | ||||||||
Dividends on common stock | (33,457) | (33,457) | (33,457) | ||||||
Deferred compensation plan | (799) | (273) | $ (526) | (799) | |||||
Deferred compensation plan (in shares) | 17 | ||||||||
Net cash distributed to noncontrolling interest | (4,601) | (4,601) | |||||||
Balance at Sep. 30, 2022 | 2,031,811 | $ 646 | 1,043,605 | (119,864) | 1,107,586 | 479 | $ (641) | 27,072 | 2,058,883 |
Balance (in shares) at Sep. 30, 2022 | 64,591 | 23 | |||||||
Balance at Jun. 30, 2022 | 2,029,577 | $ 646 | 1,039,261 | (95,279) | 1,085,208 | 695 | $ (954) | 27,826 | 2,057,403 |
Balance (in shares) at Jun. 30, 2022 | 64,576 | 34 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 32,068 | 32,068 | 1,186 | 33,254 | |||||
Other comprehensive loss | (24,585) | (24,585) | (24,585) | ||||||
Stock-based compensation expense | 4,334 | 4,334 | 4,334 | ||||||
Common stock issued to board members | 146 | 146 | 146 | ||||||
Common stock issued to board members (in shares) | 6 | ||||||||
Issuance of common stock related to share-based awards, net | (136) | (136) | (136) | ||||||
Issuance of common stock related to share-based awards, net (in shares) | 9 | ||||||||
Dividends on common stock | (9,690) | (9,690) | (9,690) | ||||||
Deferred compensation plan | 97 | (216) | $ 313 | 97 | |||||
Deferred compensation plan (in shares) | (11) | ||||||||
Net cash distributed to noncontrolling interest | (1,940) | (1,940) | |||||||
Balance at Sep. 30, 2022 | $ 2,031,811 | $ 646 | $ 1,043,605 | $ (119,864) | $ 1,107,586 | $ 479 | $ (641) | $ 27,072 | $ 2,058,883 |
Balance (in shares) at Sep. 30, 2022 | 64,591 | 23 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Oct. 20, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||||
Cash dividends declared per common share | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.45 | $ 0.36 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net income | $ 92,716 | $ 321,300 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for (reversal of) credit losses | 4,671 | (39,648) |
Depreciation, amortization and accretion, net | 20,207 | 18,393 |
Deferred income taxes | 2,258 | (382) |
Other, net | 11,814 | 14,049 |
Net change in securities purchased under agreements to resell | (27,103) | (75,589) |
Net change in trading securities | 6,134 | 84,442 |
Net change in broker-dealer and clearing organization receivables | 748,584 | (223,819) |
Net change in other assets | (52,021) | (50,625) |
Net change in broker-dealer and clearing organization payables | (470,426) | 152,755 |
Net change in other liabilities | 66,479 | (105,402) |
Net change in securities sold, not yet purchased | 2,929 | 33,275 |
Proceeds from sale of mortgage servicing rights asset | 1,876 | 116,000 |
Change in valuation of mortgage servicing rights asset | (23,575) | (12,821) |
Net gains from sales of loans | (266,435) | (669,857) |
Loans originated for sale | (11,706,056) | (21,563,008) |
Proceeds from loans sold | 12,823,759 | 22,874,493 |
Net cash provided by operating activities | 1,235,811 | 873,556 |
Investing Activities | ||
Proceeds from maturities and principal reductions of securities held to maturity | 78,144 | 34,082 |
Proceeds from sales, maturities and principal reductions of securities available for sale | 259,774 | 507,365 |
Purchases of securities held to maturity | (11,432) | |
Purchases of securities available for sale | (625,522) | (1,075,154) |
Purchases of equity securities | (30) | |
Net change in loans held for investment | (391,040) | 360,518 |
Purchases of premises and equipment and other assets | (7,335) | (22,079) |
Proceeds from sales of premises and equipment and other real estate owned | 1,808 | 4,252 |
Net cash paid to Federal Home Loan Bank and Federal Reserve Bank stock | (175) | (82) |
Net cash used in investing activities | (695,808) | (191,098) |
Financing Activities | ||
Net change in deposits | (1,296,781) | 865,638 |
Net change in short-term borrowings | 82,178 | 51,203 |
Proceeds from notes payable | 638,498 | 739,372 |
Payments on notes payable and junior subordinated debentures | (636,394) | (792,893) |
Payments to repurchase common stock | (442,336) | (123,631) |
Dividends paid on common stock | (33,457) | (29,500) |
Net cash distributed to noncontrolling interest | (4,601) | (9,727) |
Other, net | (4,768) | (3,200) |
Net cash provided by (used in) financing activities | (1,697,661) | 697,262 |
Net change in cash, cash equivalents and restricted cash | (1,157,658) | 1,379,720 |
Cash, cash equivalents and restricted cash, beginning of period | 3,045,263 | 1,353,303 |
Cash, cash equivalents and restricted cash, end of period | 1,887,605 | 2,733,023 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid for interest | 69,681 | 85,069 |
Cash paid for income taxes, net of refunds | 14,956 | 83,129 |
Supplemental Schedule of Non-Cash Activities | ||
Conversion of loans to other real estate owned | 326 | 2,924 |
Additions to mortgage servicing rights | 47,850 | $ 70,368 |
Carrying amount of AFS securities transferred to HTM, net of $67,798 unrealized loss | $ 689,477 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash to Consolidated Balance Sheets | ||||
Cash and due from banks | $ 1,777,584 | $ 2,823,138 | $ 2,463,111 | |
Federal funds sold | 663 | 385 | 406 | |
Assets segregated for regulatory purposes | 109,358 | 221,740 | 269,506 | |
Total cash, cash equivalents and restricted cash | 1,887,605 | $ 3,045,263 | $ 2,733,023 | $ 1,353,303 |
Carrying amount of AFS securities transferred to HTM, net | $ 67,798 |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting and Reporting Policies | |
Summary of Significant Accounting and Reporting Policies | 1. Summary of Significant Accounting and Reporting Policies Nature of Operations Hilltop Holdings Inc. (“Hilltop” and, collectively with its subsidiaries, the “Company”) is a financial holding company registered under the Bank Holding Company Act of 1956. The Company’s primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank (the “Bank”). In addition, the Company provides an array of financial products and services through its broker-dealer and mortgage origination subsidiaries. The Company, headquartered in Dallas, Texas, provides its products and services through two primary business units, PlainsCapital Corporation (“PCC”) and Hilltop Securities Holdings LLC (“Securities Holdings”). PCC is a financial holding company that provides, through its subsidiaries, traditional banking, wealth and investment management and treasury management services primarily in Texas and residential mortgage lending throughout the United States. Securities Holdings is a holding company that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, clearing, securities lending, structured finance and retail brokerage services throughout the United States. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, these financial statements contain all adjustments necessary for a fair statement of the results of the interim periods presented. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). Results for interim periods are not necessarily indicative of results to be expected for a full year or any future period. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates regarding the allowance for credit losses, the fair values of financial instruments, the mortgage loan indemnification liability, and the potential impairment of goodwill and identifiable intangible assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. Hilltop owns 100% of the outstanding stock of PCC. PCC owns 100% of the outstanding stock of the Bank and 100% of the membership interest in Hilltop Opportunity Partners LLC, a merchant bank utilized to facilitate investments in companies engaged in non-financial activities. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”). PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds an ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC also owned 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which were not included in the consolidated financial statements under the requirements of the Variable Interest Entities (“VIE”) Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) because the primary beneficiaries of the Trusts are not within the consolidated group. Following receipt of regulatory approval, during June, July and August 2021, PCC submitted to the trustees of each of the Trusts notices to redeem in full outstanding junior subordinated debentures of $67.0 million issued by PCC, which resulted in the full redemption to the holders of the associated preferred securities and common securities during the third quarter of 2021. For further details, see Note 16 to the consolidated financial statements included in the Company’s 2021 Form 10-K. Hilltop has a 100% membership interest in Securities Holdings, which operates through its wholly owned subsidiaries, Hilltop Securities Inc. (“Hilltop Securities”), Momentum Independent Network Inc. (“Momentum Independent Network” and collectively with Hilltop Securities, the “Hilltop Broker-Dealers”) and Hilltop Securities Asset Management, LLC. Hilltop Securities is a broker-dealer registered with the SEC and Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”). Momentum Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA. Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC are registered investment advisers under the Investment Advisers Act of 1940. In addition, Hilltop owns 100% of the membership interest in each of HTH Hillcrest Project LLC (“HTH Project LLC”) and Hilltop of the membership interest in HTH Diamond Hillcrest Land LLC (“Hillcrest Land LLC”) which is consolidated under the aforementioned VIE Subsections of the ASC. These entities are related to the Hilltop Plaza investment discussed in detail in Note 19 to the consolidated financial statements included in the Company’s 2021 Form 10-K and are collectively referred to as the “Hilltop Plaza Entities.” The consolidated financial statements include the accounts of the above-named entities. Intercompany transactions and balances have been eliminated. Noncontrolling interests have been recorded for minority ownership in entities that are not wholly owned and are presented in compliance with the provisions of Noncontrolling Interest in Subsidiary Subsections of the ASC. Certain reclassifications have been made to the prior period consolidated financial statements to conform with the current period presentation. In preparing these consolidated financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all stockholders and other financial statement users, or filed with the SEC. Significant accounting policies are detailed in Note 1 to the consolidated financial statements included in the Company’s 2021 Form 10-K. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2022 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | 2. Recently Issued Accounting Standards Accounting Standards Adopted During 2022 In March 2022, the FASB issued ASU 2022-01 to expand and clarify the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets. ASU 2022-01 amends the guidance in ASU 2017-12 that, among other things, established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible. The amendment further improves the last-of-layer (renamed the “portfolio layer”) concepts to expand to nonprepayable financial assets and allows more flexibility in the derivative structures used to hedge the interest rate risk. For entities that have already adopted ASU 2017-12 this update is available for immediate adoption. As permitted within the amendment, the Company elected to early adopt the provisions as of April 1, 2022 on a prospective basis. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements. In June 2022, the FASB issued ASU 2022-03 to clarify the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction, and require specific disclosures for equity securities that are subject to such restrictions. The amendments are effective in periods beginning after December 15, 2023, with early adoption permitted. As permitted within the amendment, the Company elected to early adopt the provisions as of July 1, 2022 on a prospective basis. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements. Accounting Standards Issued But Not Yet Adopted In March 2022, the FASB issued ASU 2022-02 to eliminate the recognition and measurement guidance on troubled debt restructurings for creditors, and require enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The amendments are effective in periods beginning after December 15, 2022 using either a prospective or modified retrospective transition. Early adoption of certain or all of the amendments is permitted. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements. In September 2022, the FASB issued ASU 2022-04 to require entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of such programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations and a description of where in the financial statements outstanding amounts are present. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The amendments are effective in periods beginning after December 15, 2022, except that the amendments to disclose a rollforward of obligations outstanding will be effective beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements Fair Value Measurements and Disclosures The Company determines fair values in compliance with The Fair Value Measurements and Disclosures Topic of the ASC (the “Fair Value Topic”). The Fair Value Topic defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The Fair Value Topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Fair Value Topic assumes that transactions upon which fair value measurements are based occur in the principal market for the asset or liability being measured. Further, fair value measurements made under the Fair Value Topic exclude transaction costs and are not the result of forced transactions. The Fair Value Topic includes a fair value hierarchy that classifies fair value measurements based upon the inputs used in valuing the assets or liabilities that are the subject of fair value measurements. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs, as indicated below. ● Level 1 Inputs : Unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. ● Level 2 Inputs : Observable inputs other than Level 1 prices. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, yield curves, prepayment speeds, default rates, credit risks and loss severities), and inputs that are derived from or corroborated by market data, among others. ● Level 3 Inputs : Unobservable inputs that reflect an entity’s own estimates about the assumptions that market participants would use in pricing the assets or liabilities. Level 3 inputs include pricing models and discounted cash flow techniques, among others . Fair Value Option The Company has elected to measure substantially all of PrimeLending’s mortgage loans held for sale and the retained mortgage servicing rights (“MSR”) asset at fair value, under the provisions of the Fair Value Option. The Company elected to apply the provisions of the Fair Value Option to these items so that it would have the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. At September 30, 2022 and December 31, 2021, the aggregate fair value of PrimeLending’s mortgage loans held for sale accounted for under the Fair Value Option was $863.4 million and $1.78 billion, respectively, and the unpaid principal balance of those loans was $882.6 million and $1.73 billion, respectively. The interest component of fair value is reported as interest income on loans in the accompanying consolidated statements of operations. The Company holds a number of financial instruments that are measured at fair value on a recurring basis, either by the application of the Fair Value Option or other authoritative pronouncements. The fair values of those instruments are determined primarily using Level 2 inputs, as further described below. Those inputs include quotes from mortgage loan investors and derivatives dealers and data from independent pricing services. The fair value of loans held for sale is determined using an exit price method. The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands). Level 1 Level 2 Level 3 Total September 30, 2022 Inputs Inputs Inputs Fair Value Trading securities $ 5,259 $ 636,605 $ — $ 641,864 Available for sale securities — 1,584,724 — 1,584,724 Equity securities 209 — — 209 Loans held for sale — 826,013 37,414 863,427 Loans held for investment — — 8,912 8,912 Derivative assets — 141,536 — 141,536 MSR asset — — 156,539 156,539 Securities sold, not yet purchased 65,370 34,145 — 99,515 Derivative liabilities — 45,032 — 45,032 Level 1 Level 2 Level 3 Total December 31, 2021 Inputs Inputs Inputs Fair Value Trading securities $ 8,628 $ 639,370 $ — $ 647,998 Available for sale securities — 2,130,568 — 2,130,568 Equity securities 250 — — 250 Loans held for sale — 1,734,875 47,716 1,782,591 Derivative assets — 48,122 — 48,122 MSR asset — — 86,990 86,990 Securities sold, not yet purchased 45,973 50,613 — 96,586 Derivative liabilities — 21,816 — 21,816 The following tables include a rollforward for those material financial instruments measured at fair value using Level 3 inputs (in thousands). Total Gains or Losses (Realized or Unrealized) Balance, Transfers Included in Other Beginning of Purchases/ Sales/ to (from) Included in Comprehensive Balance, Period Additions Reductions Level 3 Net Income Income (Loss) End of Period Three months ended September 30, 2022 Loans held for sale $ 41,732 $ 18,012 $ (19,594) $ (251) $ (2,485) $ — $ 37,414 Loans held for investment 9,027 — — — (115) — 8,912 MSR asset 121,688 29,340 — — 5,511 — 156,539 Total $ 172,447 $ 47,352 $ (19,594) $ (251) $ 2,911 $ — $ 202,865 Nine months ended September 30, 2022 Loans held for sale $ 47,716 $ 38,454 $ (44,342) $ 5,587 $ (10,001) $ — $ 37,414 Loans held for investment — 9,611 (562) — (137) — 8,912 MSR asset 86,990 47,850 (1,876) — 23,575 — 156,539 Total $ 134,706 $ 95,915 $ (46,780) $ 5,587 $ 13,437 $ — $ 202,865 Three months ended September 30, 2021 Loans held for sale $ 71,433 $ 18,817 $ (22,207) $ (2,291) $ 6,767 $ — $ 72,519 MSR asset 124,497 20,252 (31,366) — (2,452) — 110,931 Total $ 195,930 $ 39,069 $ (53,573) $ (2,291) $ 4,315 $ — $ 183,450 Nine months ended September 30, 2021 Loans held for sale $ 71,816 $ 50,273 $ (51,718) $ (4,099) $ 6,247 $ — $ 72,519 MSR asset 143,742 70,368 (116,000) — 12,821 — 110,931 Total $ 215,558 $ 120,641 $ (167,718) $ (4,099) $ 19,068 $ — $ 183,450 All net realized and unrealized gains (losses) in the tables above are reflected in the accompanying consolidated financial statements. The unrealized gains (losses) relate to financial instruments still held at September 30, 2022. For material Level 3 financial instruments measured at fair value on a recurring basis at September 30, 2022 and December 31, 2021, the significant unobservable inputs used in the fair value measurements were as follows. Range (Weighted-Average) Financial instrument Valuation Technique Unobservable Inputs September 30, 2022 December 31, 2021 Loans held for sale Market comparable Projected price 90 - 92 % ( 91 %) 94 - 95 % ( 95 %) Loans held for investment Discounted cash flow Discount rate 12.00 % — MSR asset Discounted cash flow Constant prepayment rate 8.06 % 10.02 % Discount rate 12.09 % 14.32 % The fair value of certain loans held for sale that cannot be sold through normal sale channels or are non-performing is measured using Level 3 inputs. The fair value of such loans is generally based upon estimates of expected cash flows using unobservable inputs, including listing prices of comparable assets, uncorroborated expert opinions, and/or management’s knowledge of underlying collateral. The fair value of certain loans held for investment by the Company’s merchant bank subsidiary is measured using the income approach with Level 3 inputs. The fair value of such loans is based upon estimates of expected cash flows using unobservable inputs, including credit spreads derived from comparable securities and benchmark credit curves, and management’s knowledge of underlying collateral. The MSR asset is reported at fair value using Level 3 inputs. The MSR asset is valued by projecting net servicing cash flows, which are then discounted to estimate the fair value. The fair value of the MSR asset is impacted by a variety of factors. Prepayment and discount rates, the most significant unobservable inputs, are discussed further in Note 7 to the consolidated financial statements. The decrease in the prepayment rate used to value the MSR asset at September 30, 2022, compared to December 31, 2021, reflects the effect of increased mortgage rates reducing consumer refinancing activity, while the decrease in the discount rate addresses recent market trends related to MSR sales during the same period. The Company had no transfers between Levels 1 and 2 during the periods presented. Any transfers are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur. The following table presents those changes in fair value of material instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (37,526) $ — $ (37,526) $ (32,694) $ — $ (32,694) Loans held for investment (377) — (377) — — — MSR asset 5,511 — 5,511 (2,452) — (2,452) Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (73,520) $ — $ (73,520) $ (55,211) $ — $ (55,211) Loans held for investment (660) — (660) — — — MSR asset 23,575 — 23,575 12,821 — 12,821 The Fair Value of Financial Instruments Subsection of the ASC requires disclosure of the fair value of financial assets and liabilities, including the financial assets and liabilities previously discussed. There have been no changes to the methods for determining estimated fair value for financial assets and liabilities as described in detail in Note 4 to the consolidated financial statements included in the Company’s 2021 Form 10-K. The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands). Estimated Fair Value Carrying Level 1 Level 2 Level 3 September 30, 2022 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 1,778,247 $ 1,778,247 $ — $ — $ 1,778,247 Assets segregated for regulatory purposes 109,358 109,358 — — 109,358 Securities purchased under agreements to resell 145,365 — 145,365 — 145,365 Held to maturity securities 889,452 — 792,559 — 792,559 Loans held for sale 140,178 — 85,137 57,188 142,325 Loans held for investment, net 7,843,551 — 402,502 7,281,532 7,684,034 Broker-dealer and clearing organization receivables 1,255,052 — 1,255,052 — 1,255,052 Other assets 71,365 — 69,699 1,666 71,365 Financial liabilities: Deposits 11,352,014 — 11,333,099 — 11,333,099 Broker-dealer and clearing organization payables 1,176,156 — 1,176,156 — 1,176,156 Short-term borrowings 942,309 — 942,309 — 942,309 Debt 390,354 — 389,632 — 389,632 Other liabilities 9,198 — 9,198 — 9,198 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2021 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 2,823,523 $ 2,823,523 $ — $ — $ 2,823,523 Assets segregated for regulatory purposes 221,740 221,740 — — 221,740 Securities purchased under agreements to resell 118,262 — 118,262 — 118,262 Held to maturity securities 267,684 — 276,296 — 276,296 Loans held for sale 95,599 — 95,599 — 95,599 Loans held for investment, net 7,788,552 — 733,193 7,266,732 7,999,925 Broker-dealer and clearing organization receivables 1,672,946 — 1,672,946 — 1,672,946 Other assets 73,041 — 71,290 1,751 73,041 Financial liabilities: Deposits 12,818,077 — 12,821,138 — 12,821,138 Broker-dealer and clearing organization payables 1,477,300 — 1,477,300 — 1,477,300 Short-term borrowings 859,444 — 859,444 — 859,444 Debt 387,904 — 387,904 — 387,904 Other liabilities 3,944 — 3,944 — 3,944 The Company held equity investments other than securities of $59.2 million and $54.0 million at September 30, 2022 and December 31, 2021, respectively, which are included within other assets in the consolidated balance sheets. Of the $59.2 million of such equity investments held at September 30, 2022, $27.4 million do not have readily determinable fair values and each is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The following table presents the adjustments to the carrying value of these investments during the periods presented (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 28,183 $ 26,988 $ 16,817 $ 22,844 Additional investments — — 11,000 — Upward adjustments 234 122 679 6,006 Impairments and downward adjustments (1,013) (253) (1,092) (1,017) Dispositions — (10,390) — (11,366) Balance, end of period $ 27,404 $ 16,467 $ 27,404 $ 16,467 |
Securities
Securities | 9 Months Ended |
Sep. 30, 2022 | |
Securities | |
Securities | 4. Securities The fair value of trading securities is summarized as follows (in thousands). September 30, December 31, 2022 2021 U.S. Treasury securities $ 309 $ 3,728 U.S. government agencies: Bonds 14,255 3,410 Residential mortgage-backed securities 152,513 152,093 Collateralized mortgage obligations 171,241 126,389 Corporate debt securities 63,626 60,671 States and political subdivisions 200,945 285,376 Private-label securitized product 13,690 11,377 Other 25,285 4,954 Totals $ 641,864 $ 647,998 In addition to the securities shown above, the Hilltop Broker-Dealers enter into transactions that represent commitments to purchase and deliver securities at prevailing future market prices to facilitate customer transactions and satisfy such commitments. Accordingly, the Hilltop Broker-Dealers’ ultimate obligations may exceed the amount recognized in the financial statements. These securities, which are carried at fair value and reported as securities sold, not yet purchased in the consolidated balance sheets, had a value of $99.5 million and $96.6 million at September 30, 2022 and December 31, 2021, respectively. The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). Available for Sale Amortized Unrealized Unrealized September 30, 2022 Cost Gains Losses Fair Value U.S. Treasury securities $ 24,958 $ — $ (696) $ 24,262 U.S. government agencies: Bonds 115,633 315 (814) 115,134 Residential mortgage-backed securities 474,451 20 (55,751) 418,720 Commercial mortgage-backed securities 199,537 — (34,699) 164,838 Collateralized mortgage obligations 898,449 — (72,099) 826,350 States and political subdivisions 40,177 71 (4,828) 35,420 Totals $ 1,753,205 $ 406 $ (168,887) $ 1,584,724 Available for Sale Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. Treasury securities $ 14,937 $ — $ (75) $ 14,862 U.S. government agencies: Bonds 43,448 838 (153) 44,133 Residential mortgage-backed securities 900,084 7,979 (9,617) 898,446 Commercial mortgage-backed securities 219,460 367 (9,128) 210,699 Collateralized mortgage obligations 926,783 2,547 (12,464) 916,866 States and political subdivisions 43,923 1,839 (200) 45,562 Totals $ 2,148,635 $ 13,570 $ (31,637) $ 2,130,568 Held to Maturity Amortized Unrealized Unrealized September 30, 2022 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 308,102 $ — $ (34,442) $ 273,660 Commercial mortgage-backed securities 181,259 — (15,197) 166,062 Collateralized mortgage obligations 323,526 — (36,664) 286,862 States and political subdivisions 76,565 1 (10,591) 65,975 Totals $ 889,452 $ 1 $ (96,894) $ 792,559 Held to Maturity Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 9,892 $ 400 $ — $ 10,292 Commercial mortgage-backed securities 145,742 5,311 — 151,053 Collateralized mortgage obligations 43,990 476 — 44,466 States and political subdivisions 68,060 2,428 (3) 70,485 Totals $ 267,684 $ 8,615 $ (3) $ 276,296 Additionally, the Company had unrealized net gains of $0.1 million and $0.2 million at September 30, 2022 and December 31, 2021, respectively, from equity securities with fair values of $0.2 million and $0.2 gains of $0.1 million, respectively, were recognized due to changes in the fair value of equity securities still held at the balance sheet date. During the three and nine months ended September 30, 2022 and 2021, net losses and gains recognized from equity securities sold were nominal. The Company transferred certain agency-issued securities from the available-for-sale to held-to-maturity portfolio on March 31, 2022 having a book value of approximately $782 million and a market value of approximately $708 million. As of the date of transfer, the related pre-tax net unrecognized losses of approximately $74 million within the accumulated other comprehensive loss balance are being amortized over the remaining term of the securities using the effective interest method. This transfer was completed after careful consideration of the Company’s intent and ability to hold these securities to maturity. Factors used in assessing the ability to hold these securities to maturity were future liquidity needs and sources of funding. Information regarding available for sale and held to maturity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). September 30, 2022 December 31, 2021 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. treasury securities: Unrealized loss for less than twelve months 2 $ 19,845 $ 136 2 $ 14,862 $ 75 Unrealized loss for twelve months or longer 1 4,417 560 — — — 3 24,262 696 2 14,862 75 U.S. government agencies: Bonds: Unrealized loss for less than twelve months 8 51,594 247 2 9,904 94 Unrealized loss for twelve months or longer 3 15,493 567 1 6,184 59 11 67,087 814 3 16,088 153 Residential mortgage-backed securities: Unrealized loss for less than twelve months 98 204,950 17,715 52 548,392 6,915 Unrealized loss for twelve months or longer 26 211,828 38,036 17 104,378 2,702 124 416,778 55,751 69 652,770 9,617 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 12 90,402 12,637 5 65,636 1,776 Unrealized loss for twelve months or longer 7 74,435 22,062 14 138,619 7,352 19 164,837 34,699 19 204,255 9,128 Collateralized mortgage obligations: Unrealized loss for less than twelve months 112 669,347 45,405 72 618,464 11,316 Unrealized loss for twelve months or longer 28 141,868 26,694 10 62,647 1,148 140 811,215 72,099 82 681,111 12,464 States and political subdivisions: Unrealized loss for less than twelve months 51 23,421 3,119 14 5,576 200 Unrealized loss for twelve months or longer 13 3,819 1,709 — — — 64 27,240 4,828 14 5,576 200 Total available for sale: Unrealized loss for less than twelve months 283 1,059,559 79,259 147 1,262,834 20,376 Unrealized loss for twelve months or longer 78 451,860 89,628 42 311,828 11,261 361 $ 1,511,419 $ 168,887 189 $ 1,574,662 $ 31,637 September 30, 2022 December 31, 2021 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Held to Maturity Residential mortgage-backed securities: Unrealized loss for less than twelve months 16 $ 78,772 $ 9,167 — $ — $ — Unrealized loss for twelve months or longer 29 194,888 25,275 — — — 45 273,660 34,442 — — — Commercial mortgage-backed securities: Unrealized loss for less than twelve months 30 163,245 14,736 — — — Unrealized loss for twelve months or longer 1 2,817 461 — — — 31 166,062 15,197 — — — Collateralized mortgage obligations: Unrealized loss for less than twelve months 28 92,710 9,004 — — — Unrealized loss for twelve months or longer 28 194,152 27,660 — — — 56 286,862 36,664 — — — States and political subdivisions: Unrealized loss for less than twelve months 173 62,949 10,360 2 558 1 Unrealized loss for twelve months or longer 3 595 231 1 266 2 176 63,544 10,591 3 824 3 Total held to maturity: Unrealized loss for less than twelve months 247 397,676 43,267 2 558 1 Unrealized loss for twelve months or longer 61 392,452 53,627 1 266 2 308 $ 790,128 $ 96,894 3 $ 824 $ 3 Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. The amortized cost and fair value of securities, excluding trading and equity securities, at September 30, 2022 are shown by contractual maturity below (in thousands). Available for Sale Held to Maturity Amortized Amortized Cost Fair Value Cost Fair Value Due in one year or less $ 35,135 $ 34,938 $ 856 $ 849 Due after one year through five years 23,053 21,705 801 750 Due after five years through ten years 50,701 50,043 23,232 20,884 Due after ten years 71,879 68,130 51,676 43,492 180,768 174,816 76,565 65,975 Residential mortgage-backed securities 474,451 418,720 308,102 273,660 Commercial mortgage-backed securities 199,537 164,838 181,259 166,062 Collateralized mortgage obligations 898,449 826,350 323,526 286,862 $ 1,753,205 $ 1,584,724 $ 889,452 $ 792,559 The Company recognized net losses of $3.2 million and net gains of $2.0 million from its trading portfolio during the three months ended September 30, 2022 and 2021, respectively, and net losses of $7.9 million and net gains of $21.8 million during the nine months ended September 30, 2022 and 2021, respectively. In addition, the Hilltop Broker-Dealers realized net gains from structured product trading activities of $16.6 million and $17.0 million during the three months ended September 30, 2022 and 2021, respectively, and net gains from structured product trading activities of $25.6 million and $52.1 million during the nine months ended September 30, 2022 and 2021, respectively. The Company had nominal other realized gains on securities during the three months ended September 30, 2022 and 2021. Other realized gains on securities during the nine months ended September 30, 2022 were nominal, compared with other realized losses on securities of $0.1 million during the nine months ended September 30, 2021. All such realized gains and losses are recorded as a component of other noninterest income within the consolidated statements of operations. Securities with a carrying amount of $617.1 million and $809.9 million (with a fair value of $556.2 million and $817.7 million, respectively) at September 30, 2022 and December 31, 2021, respectively, were pledged by the Bank to secure public and trust deposits, federal funds purchased and securities sold under agreements to repurchase, and for other purposes as required or permitted by law. Substantially all of these pledged securities were included in the available for sale and held to maturity securities portfolios at September 30, 2022 and December 31, 2021. Mortgage-backed securities and collateralized mortgage obligations consist primarily of Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) pass-through and participation certificates. GNMA securities are guaranteed by the full faith and credit of the United States, while FNMA and FHLMC securities are fully guaranteed by those respective United States government-sponsored enterprises, and conditionally guaranteed by the full faith and credit of the United States. |
Loans Held for Investment
Loans Held for Investment | 9 Months Ended |
Sep. 30, 2022 | |
Loans Held for Investment | |
Loans Held for Investment | 5. Loans Held for Investment The Bank originates loans to customers primarily in Texas. Although the Bank has diversified loan and leasing portfolios and, generally, holds collateral against amounts advanced to customers, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the region and of the industries in which its debtors operate, which consist primarily of agribusiness, construction, energy, real estate and wholesale/retail trade. The Hilltop Broker-Dealers make loans to customers and correspondents through transactions originated by both employees and independent retail representatives throughout the United States. The Hilltop Broker-Dealers control risk by requiring customers to maintain collateral in compliance with various regulatory and internal guidelines, which may vary based upon market conditions. Securities owned by customers and held as collateral for loans are not included in the consolidated financial statements. Loans held for investment summarized by portfolio segment are as follows (in thousands). September 30, December 31, 2022 2021 Commercial real estate $ 3,313,911 $ 3,042,729 Commercial and industrial (1) 1,668,209 1,875,420 Construction and land development 934,915 892,783 1-4 family residential 1,595,270 1,303,430 Consumer 29,439 32,349 Broker-dealer (2) 402,502 733,193 7,944,246 7,879,904 Allowance for credit losses (91,783) (91,352) Total loans held for investment, net of allowance $ 7,852,463 $ 7,788,552 (1) Included loans totaling $1.1 million and $77.7 million at September 30, 2022 and December 31, 2021, respectively, funded through the Paycheck Protection Program. (2) Primarily represents margin loans to customers and correspondents associated with broker-dealer segment operations. The following table provides details associated with non-accrual loans, excluding those classified as held for sale (in thousands). Non-accrual Loans September 30, 2022 December 31, 2021 Interest Income Recognized With With No With With No Three Months Ended September 30, Nine Months Ended September 30, Allowance Allowance Total Allowance Allowance Total 2022 2021 2022 2021 Commercial real estate: Non-owner occupied $ 1,171 $ 95 $ 1,266 $ 413 $ 1,853 $ 2,266 $ 265 $ 76 $ 422 $ 204 Owner occupied 3,469 — 3,469 3,058 1,277 4,335 88 345 505 574 Commercial and industrial 10,745 1,333 12,078 16,536 5,942 22,478 303 179 930 653 Construction and land development 1 — 1 2 — 2 7 13 22 48 1-4 family residential 724 12,124 12,848 902 17,306 18,208 561 796 2,286 2,837 Consumer 16 — 16 23 — 23 — 1 — (120) Broker-dealer — — — — — — — — — — $ 16,126 $ 13,552 $ 29,678 $ 20,934 $ 26,378 $ 47,312 $ 1,224 $ 1,410 $ 4,165 $ 4,196 At September 30, 2022 and December 31, 2021, $4.1 million and $2.9 million, respectively, of real estate loans secured by residential properties and classified as held for sale were in non-accrual status. Loans accounted for on a non-accrual basis decreased from December 31, 2021 to September 30, 2022, by $17.6 million. The change in nonaccrual loans was primarily due to decreases in commercial and industrial loans of $10.4 million, 1-4 family residential loans of $5.4 million, and commercial real estate non-owner occupied loans of $1.0 million. The decrease in commercial and industrial loans in non-accrual status since December 31, 2021 was primarily due to principal paydowns, settlements and charge-offs associated with three relationships, partially offset by the addition of one relationship with a loan balance of $2.7 million to non-accrual status. The Company considers non-accrual loans to be collateral-dependent unless there are underlying mitigating circumstances, such as expected cash flow recovery. The practical expedient to measure the allowance using the fair value of the collateral has been implemented. The Bank classifies loan modifications as troubled debt restructurings (“TDRs”) when it concludes that it has both granted a concession to a debtor and that the debtor is experiencing financial difficulties. Loan modifications are typically structured to create affordable payments for the debtor and can be achieved in a variety of ways. The Bank modifies loans by reducing interest rates and/or lengthening loan amortization schedules. The Bank may also reconfigure a single loan into two or more loans (“A/B Note”). The typical A/B Note restructure results in a “bad” loan which is charged off and a “good” loan or loans, the terms of which comply with the Bank’s customary underwriting policies. The debt charged off on the “bad” loan is not forgiven to the debtor. In March 2020, the CARES Act was passed, which, among other things, allowed the Bank to suspend the requirements for certain loan modifications to be categorized as a TDR, including the related impairment for accounting purposes. On December 27, 2020, the Consolidated Appropriations Act 2021 was signed into law . There were no TDRs granted during the three months ended September 30, 2022 and 2021. There were three TDRs granted during the nine months ended September 30, 2022 with an aggregate balance at date of extension of $3.6 million and an aggregate balance at September 30, 2022 of $2.9 million. There was one TDR granted during the nine months ended September 30, 2021 with a balance at date of extension and at September 30, 2021 of $0.7 million. The Bank had no unadvanced commitments to borrowers whose loans had been restructured in TDRs at September 30, 2022 and nominal unadvanced commitments to such borrowers at December 31, 2021. There were no TDRs granted during the twelve months preceding September 30, 2022, while there were $0.1 million TDRs granted during the twelve months preceding September 30, 2021 for which a payment was at least 30 days past due. An analysis of the aging of the Company’s loan portfolio is shown in the following tables (in thousands). Accruing Loans Loans Past Due Total Past Current Total Past Due September 30, 2022 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ — $ — $ 234 $ 234 $ 1,953,997 $ 1,954,231 $ — Owner occupied 329 — — 329 1,359,351 1,359,680 — Commercial and industrial 3,597 8 8,329 11,934 1,656,275 1,668,209 — Construction and land development 1 — — 1 934,914 934,915 — 1-4 family residential 3,687 1,431 5,046 10,164 1,585,106 1,595,270 102 Consumer 147 7 16 170 29,269 29,439 — Broker-dealer — — — — 402,502 402,502 — $ 7,761 $ 1,446 $ 13,625 $ 22,832 $ 7,921,414 $ 7,944,246 $ 102 Accruing Loans Loans Past Due Total Past Current Total Past Due December 31, 2021 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 117 $ — $ 1,173 $ 1,290 $ 1,728,409 $ 1,729,699 $ — Owner occupied 590 688 2,273 3,551 1,309,479 1,313,030 — Commercial and industrial 1,059 277 13,640 14,976 1,860,444 1,875,420 1 Construction and land development 946 — — 946 891,837 892,783 — 1-4 family residential 7,642 2,738 4,842 15,222 1,288,208 1,303,430 100 Consumer 123 22 22 167 32,182 32,349 — Broker-dealer — — — — 733,193 733,193 — $ 10,477 $ 3,725 $ 21,950 $ 36,152 $ 7,843,752 $ 7,879,904 $ 101 In addition to the loans shown in the tables above, PrimeLending had $96.4 million and $60.7 million of loans included in loans held for sale (with an aggregate unpaid principal balance of $96.9 million and $61.7 million, respectively) that were 90 days past due and accruing interest at September 30, 2022 and December 31, 2021, respectively. These loans are guaranteed by U.S. government agencies and include loans that are subject to repurchase, or have been repurchased, by PrimeLending. In response to the COVID-19 pandemic, the Company allowed modifications, such as payment deferrals for up to 90 days and temporary forbearance, to credit-worthy borrowers who are experiencing temporary hardship due to the effects of COVID-19. These short-term modifications generally meet the criteria of the CARES Act and, therefore, they are not reported as past due or placed on non-accrual status (provided the loans were not past due or on non-accrual status prior to the deferral). The Company elected to accrue and recognize interest income on these modifications during the payment deferral period. Additionally, the Company granted temporary forbearance to borrowers of a federally backed mortgage loan experiencing financial hardship due, directly or indirectly, to the COVID-19 pandemic. The CARES Act, which among other things, established the ability for financial institutions to grant a forbearance for up to 180 days, which can be extended for an additional 180-day period upon the request of the borrower. During that time, no fees, penalties or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the mortgage contract will accrue on the borrower’s account. As of September 30, 2022, PrimeLending had $49.0 million of loans subject to repurchase under a forbearance agreement related to delinquencies on or after April 1, 2020. Management tracks credit quality trends on a quarterly basis related to: (i) past due levels, (ii) non-performing asset levels, (iii) classified loan levels, and (iv) general economic conditions in state and local markets. The Company defines classified loans as loans with a risk rating of substandard, doubtful or loss. There have been no changes to the risk rating internal grades utilized for commercial loans as described in detail in Note 6 to the consolidated financial statements in the Company’s 2021 Form 10-K. The following table presents loans held for investment grouped by asset class and credit quality indicator, segregated by year of origination or renewal (in thousands). Amortized Cost Basis by Origination Year 2017 and September 30, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Commercial real estate: non-owner occupied Internal Grade 1-3 (Pass low risk) $ 47,140 $ 76,592 $ 20,521 $ 8,044 $ 4,779 $ 8,142 $ 1 $ 165,219 Internal Grade 4-7 (Pass normal risk) 341,269 339,862 121,299 80,514 46,457 56,121 47,443 1,032,965 Internal Grade 8-11 (Pass high risk and watch) 82,184 138,346 182,165 82,786 67,328 83,882 11,821 648,512 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 78,037 14,543 1,637 8,133 — 3,546 373 106,269 Internal Grade 14 (Substandard non-accrual) — 399 — — — 867 — 1,266 Commercial real estate: owner occupied Internal Grade 1-3 (Pass low risk) $ 21,049 $ 113,747 $ 65,252 $ 22,938 $ 12,294 $ 64,781 $ 5,977 $ 306,038 Internal Grade 4-7 (Pass normal risk) 162,232 189,775 87,189 81,957 88,019 61,081 15,966 686,219 Internal Grade 8-11 (Pass high risk and watch) 56,849 66,290 87,346 29,326 64,755 27,447 3,200 335,213 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 4,143 430 6,042 2,847 3,425 11,854 — 28,741 Internal Grade 14 (Substandard non-accrual) 14 868 — (4) 330 2,261 — 3,469 Commercial and industrial Internal Grade 1-3 (Pass low risk) $ 29,353 $ 27,282 $ 26,549 $ 6,945 $ 1,994 $ 2,313 $ 50,244 $ 144,680 Internal Grade 4-7 (Pass normal risk) 135,610 142,831 51,782 29,790 10,412 16,103 349,402 735,930 Internal Grade 8-11 (Pass high risk and watch) 88,284 67,652 53,440 18,638 3,141 7,918 274,261 513,334 Internal Grade 12 (Special mention) 86 — — 453 — — 2,654 3,193 Internal Grade 13 (Substandard accrual) 671 2,972 7,150 3,839 3,917 3,160 4,248 25,957 Internal Grade 14 (Substandard non-accrual) 308 85 7,882 — 3,500 303 — 12,078 Construction and land development Internal Grade 1-3 (Pass low risk) $ 12,673 $ 15,535 $ 1,341 $ 889 $ 1,047 $ 2,984 $ 1 $ 34,470 Internal Grade 4-7 (Pass normal risk) 272,658 210,391 63,325 13,191 3,252 1,947 48,263 613,027 Internal Grade 8-11 (Pass high risk and watch) 148,054 74,383 16,404 325 — 1,479 15,352 255,997 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 1,019 — — — — 5,262 — 6,281 Internal Grade 14 (Substandard non-accrual) — — — — — 1 — 1 Construction and land development - individuals FICO less than 620 $ — $ — $ — $ — $ — $ — $ — $ — FICO between 620 and 720 781 223 — — 981 — — 1,985 FICO greater than 720 14,969 3,933 54 — — — — 18,956 Substandard non-accrual — — — — — — — — Other (1) 4,198 — — — — — — 4,198 1-4 family residential FICO less than 620 $ 1,184 $ 733 $ 779 $ 541 $ 3,538 $ 21,699 $ 266 $ 28,740 FICO between 620 and 720 6,077 13,805 8,530 5,265 6,013 26,482 3,705 69,877 FICO greater than 720 334,135 806,223 109,048 46,361 29,057 48,786 3,171 1,376,781 Substandard non-accrual — — (1) — 260 12,589 — 12,848 Other (1) 78,521 18,571 1,616 2,403 577 4,082 1,254 107,024 Consumer FICO less than 620 $ 1,349 $ 332 $ 123 $ 48 $ 7 $ 15 $ 351 $ 2,225 FICO between 620 and 720 3,226 1,736 575 453 35 378 1,923 8,326 FICO greater than 720 5,843 1,705 1,283 413 85 1 3,201 12,531 Substandard non-accrual — — — — — 16 — 16 Other (1) 4,296 1,326 464 89 5 18 143 6,341 Total loans with credit quality measures $ 1,936,212 $ 2,330,570 $ 921,795 $ 446,184 $ 355,208 $ 475,518 $ 843,220 $ 7,308,707 Commercial and industrial (mortgage warehouse lending) $ 223,028 Commercial and industrial (Paycheck Protection Program loans) $ 1,097 Commercial and industrial (loans accounted for at fair value) $ 8,912 Broker-Dealer (margin loans and correspondent receivables) $ 402,502 Total loans held for investment $ 7,944,246 (1) Loans classified in this category were assigned a FICO score for credit modeling purposes. |
Allowance for Credit Losses
Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2022 | |
Allowance for Credit Losses | |
Allowance for Credit Losses | 6. Allowance for Credit Losses Available for Sale Securities and Held to Maturity Securities The Company has evaluated available for sale debt securities that are in an unrealized loss position and has determined that any decline in value is unrelated to credit loss and related to changes in market interest rates since purchase. None of the available for sale debt securities held were past due at September 30, 2022. In addition, as of September 30, 2022, the Company had not made a decision to sell any of its debt securities held, nor did the Company consider it more likely than not that it would be required to sell such securities before recovery of their amortized cost basis. The Company does not expect to have credit losses associated with the debt securities and no allowance was recognized on the debt securities portfolio. Loans Held for Investment The allowance for credit losses for loans held for investment represents management’s best estimate of all expected credit losses over the expected contractual life of our existing portfolio. Management’s methodology for determining the allowance for credit losses uses the current expected credit losses (“CECL”) standard. Management considers the level of allowance for credit losses to be a reasonable and supportable estimate of expected credit losses inherent within the loans held for investment portfolio as of September 30, 2022. While the Company believes it has an appropriate allowance for the existing loan portfolio at September 30, 2022, additional provision for losses on existing loans may be necessary in the future. Future changes in the allowance for credit losses are expected to be volatile given dependence upon, among other things, the portfolio composition and quality, as well as the impact of significant drivers, including prepayment assumptions and macroeconomic conditions and forecasts. In addition to the allowance for credit losses, the Company maintains a separate allowance for credit losses related to off-balance sheet credit exposures, including unfunded loan commitments, and this amount is included in other liabilities within the consolidated balance sheets. For further information on the policies that govern the estimation of the allowances for credit losses levels, see Note 1 to the consolidated financial statements in the Company’s 2021 Form 10-K. One of the most significant judgments involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the reasonable and supportable forecast period. To determine our best estimate of expected credit losses as of September 30, 2022, the Company utilized a single macroeconomic alternative scenario, or S7, published by Moody’s Analytics in September 2022 that was updated to reflect the U.S. economic outlook. This alternative economic scenario expects inflation to rise more than the baseline scenario as the military conflict between Russia and Ukraine persists longer than anticipated. Inflation continues to trend higher than expectation as supply-chain issues and reductions in disposable income persist during the reasonable and supportable period. Federal Reserve monetary policy raises interest rates faster and higher than the baseline scenario where the federal funds rate increases to 3.9% by the third quarter of 2023. Other significant variables that impact the modeled losses across our loan portfolios are the U.S. Real Gross Domestic Product, or GDP, growth rates and unemployment rate assumptions. Changes in these assumptions and forecasts of economic conditions could significantly affect the estimate of expected credit losses at the balance sheet date or between reporting periods. The COVID-19 pandemic has adversely impacted financial markets and overall economic conditions, and may continue to have implications on borrowers across our lending portfolios. Significant judgment is required to estimate the severity and duration of the current economic uncertainties, as well as its potential impact on borrower defaults and loss severity. In particular, macroeconomic conditions and forecasts are rapidly changing and remain highly uncertain. During the three and nine months ended September 30, 2021, the decreases in the allowance reflect improvement in both realized economic results and the macroeconomic outlook and were significantly comprised of net reversals of credit losses on expected losses of collectively evaluated loans of $11.0 million and $45.2 million, respectively. Such reversals were primarily due to improvements in both macroeconomic forecast assumptions and credit quality metrics on COVID-19 impacted industry sector exposures. The net impact to the allowance from changes associated with individually evaluated loans during the three and nine months ended September 30, 2021 included a provision for credit losses of $5.2 million and $5.6 million, respectively. The changes in the allowance for credit losses during the noted periods were primarily attributable to the Bank and also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior quarter. The changes in the allowance during both the three and nine months ended September 30, 2021 were also impacted by net recoveries of $0.1 million. During the three months ended September 30, 2022, the reversal of credit losses reflected modest improvements in the U.S. economic outlook compared to assumptions in the prior quarter outlook, and in specific reserves and credit metrics since the prior quarter, while the increase in provision for credit losses during the nine months ended September 30, 2022 was driven by a deteriorating U.S. economic outlook since December 31, 2021. The net impact to the allowance of changes associated with individually evaluated loans during the three and nine months ended September 30, 2022 included reversals of credit losses of $0.2 million and $1.2 million, respectively, while collectively evaluated loans included a reversal of credit losses of $0.5 million, compared to a provision for credit losses of $5.9 million, respectively. The changes in the allowance for credit losses during the noted periods were primarily attributable to the Bank and also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior quarter. The changes in the allowance during the three and nine months ended September 30, 2022 were also impacted by net charge-offs of $2.7 million and $4.2 million, respectively. Changes in the allowance for credit losses for loans held for investment, distributed by portfolio segment, are shown below (in thousands). Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Three Months Ended September 30, 2022 Period Credit Losses Charged Off Loans Period Commercial real estate $ 63,719 $ (560) $ — $ 41 $ 63,200 Commercial and industrial 19,836 (1,002) (3,096) 370 16,108 Construction and land development 4,996 (228) — — 4,768 1-4 family residential 5,554 1,049 (14) 23 6,612 Consumer 542 91 (149) 90 574 Broker-dealer 651 (130) — — 521 Total $ 95,298 $ (780) $ (3,259) $ 524 $ 91,783 Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Nine Months Ended September 30, 2022 Period Credit Losses Charged Off Loans Period Commercial real estate $ 59,354 $ 3,762 $ — $ 84 $ 63,200 Commercial and industrial 21,982 (1,681) (6,197) 2,004 16,108 Construction and land development 4,674 94 — — 4,768 1-4 family residential 4,589 2,014 (62) 71 6,612 Consumer 578 136 (361) 221 574 Broker-dealer 175 346 — — 521 Total $ 91,352 $ 4,671 $ (6,620) $ 2,380 $ 91,783 Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Three Months Ended September 30, 2021 Period Credit Losses Charged Off Loans Period Commercial real estate $ 77,633 $ (8,993) $ (124) $ 19 $ 68,535 Commercial and industrial 27,866 2,398 (317) 598 30,545 Construction and land development 5,185 (85) — — 5,100 1-4 family residential 3,659 946 (87) 20 4,538 Consumer 592 (41) (73) 26 504 Broker-dealer 334 (44) — — 290 Total $ 115,269 $ (5,819) $ (601) $ 663 $ 109,512 Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Nine Months Ended September 30, 2021 Period Credit Losses Charged Off Loans Period Commercial real estate $ 109,629 $ (41,037) $ (310) $ 253 $ 68,535 Commercial and industrial 27,703 2,848 (1,738) 1,732 30,545 Construction and land development 6,677 (1,577) — — 5,100 1-4 family residential 3,946 358 (248) 482 4,538 Consumer 876 (317) (226) 171 504 Broker-dealer 213 77 — — 290 Total $ 149,044 $ (39,648) $ (2,522) $ 2,638 $ 109,512 Unfunded Loan Commitments The Bank uses a process similar to that used in estimating the allowance for credit losses on the funded portion to estimate the allowance for credit loss on unfunded loan commitments. The allowance is based on the estimated exposure at default, multiplied by the lifetime Probability of Default grade and Loss Given Default grade for that particular loan segment. The Bank estimates expected losses by calculating a commitment usage factor based on industry usage factors. The commitment usage factor is applied over the relevant contractual period. Loss factors from the underlying loans to which commitments are related are applied to the results of the usage calculation to estimate any liability for credit losses related for each loan type. The expected losses on unfunded commitments align with statistically calculated parameters used to calculate the allowance for credit losses on the funded portion. There is no reserve calculated for letters of credit as they are issued primarily as credit enhancements and the likelihood of funding is low. Changes in the allowance for credit losses for loans with off-balance sheet credit exposures are shown below (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 6,931 $ 7,981 $ 5,880 $ 8,388 Other noninterest expense 87 (1,183) 1,138 (1,590) Balance, end of period $ 7,018 $ 6,798 $ 7,018 $ 6,798 During the three and nine months ended September 30, 2021, the decreases in the reserve for unfunded commitments were primarily due to improvements in loan expected loss rates. During the three months ended September 30, 2022, the increase in the reserve for unfunded commitments was primarily due to an increase in available commitment balances, while the increase in the reserve for unfunded commitments during the nine months ended September 30, 2022 was due to increases in both loan expected loss rates and available commitment balances. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 2022 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | 7. Mortgage Servicing Rights The following tables present the changes in fair value of the Company’s MSR asset and other information related to the serviced portfolio (dollars in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 121,688 $ 124,497 $ 86,990 $ 143,742 Additions 29,340 20,252 47,850 70,368 Sales — (31,366) (1,876) (116,000) Changes in fair value: Due to changes in model inputs or assumptions (1) 7,942 3,525 32,035 32,199 Due to customer payoffs (2,431) (5,977) (8,460) (19,378) Balance, end of period $ 156,539 $ 110,931 $ 156,539 $ 110,931 September 30, December 31, 2022 2021 Mortgage loans serviced for others (2) $ 8,277,325 $ 6,355,927 MSR asset as a percentage of serviced mortgage loans 1.89 % 1.37 % (1) Primarily represents normal customer payments, the impact of changes in interest rates, changes in discount rates and prepayment speed assumptions, and the refinement of other MSR model assumptions. Included in the three and nine months ended September 30, 2021 are MSR asset fair value adjustments totaling $3.3 million and $22.2 million, respectively, which reflect the difference between the MSR carrying value and the sales price reflected in the letter of intent to sell the applicable MSR assets. (2) Represents unpaid principal balance of mortgage loans serviced for others. The key assumptions used in measuring the fair value of the Company’s MSR asset were as follows. September 30, December 31, 2022 2021 Weighted average constant prepayment rate 8.06 % 10.02 % Weighted average discount rate 12.09 % 14.32 % Weighted average life (in years) 8.4 7.1 A sensitivity analysis of the fair value of the Company’s MSR asset to certain key assumptions is presented in the following table (in thousands). September 30, December 31, 2022 2021 Constant prepayment rate: Impact of 10% adverse change $ (3,027) $ (2,603) Impact of 20% adverse change (5,869) (5,315) Discount rate: Impact of 10% adverse change (4,439) (4,070) Impact of 20% adverse change (8,466) (7,753) This sensitivity analysis presents the effect of hypothetical changes in key assumptions on the fair value of the MSR asset. The effect of such hypothetical change in assumptions generally cannot be extrapolated because the relationship of the change in one key assumption to the change in the fair value of the MSR asset is not linear. In addition, in the analysis, the impact of an adverse change in one key assumption is calculated independent of any impact on other assumptions. In reality, changes in one assumption may change another assumption. Contractually specified servicing fees, late fees and ancillary fees earned of $9.9 million and $15.6 million during the three months ended September 30, 2022 and 2021, respectively, and $27.3 million and $47.9 million during the nine months ended September 30, 2022 and 2021, respectively, were included in net gains from sale of loans and other mortgage production income within the consolidated statements of operations. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2022 | |
Deposits | |
Deposits | 8. Deposits Deposits are summarized as follows (in thousands). September 30, December 31, 2022 2021 Noninterest-bearing demand $ 4,546,816 $ 4,577,183 Interest-bearing: Demand accounts 3,456,342 3,270,522 Brokered - demand 5,631 114,393 Money market 2,149,812 3,433,341 Brokered - money market 8,717 98,614 Savings 316,788 345,795 Time 852,431 962,752 Brokered - time 15,477 15,477 $ 11,352,014 $ 12,818,077 At September 30, 2022, remaining maturities of uninsured time deposits greater than $250,000 were $358.2 million. |
Short-term Borrowings
Short-term Borrowings | 9 Months Ended |
Sep. 30, 2022 | |
Short-term Borrowings | |
Short-term Borrowings | 9. Short-term Borrowings Short-term borrowings are summarized as follows (in thousands). September 30, December 31, 2022 2021 Federal funds purchased $ 439,200 $ 171,925 Securities sold under agreements to repurchase 302,299 191,547 Federal Home Loan Bank — — Short-term bank loans 7,000 142,000 Commercial paper 193,810 353,972 $ 942,309 $ 859,444 Federal Funds Purchased and Securities Sold under Agreements to Repurchase Federal funds purchased and securities sold under agreements to repurchase generally mature one Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). Nine Months Ended September 30, 2022 2021 Average balance during the period $ 530,180 $ 328,853 Average interest rate during the period 1.36 % 0.37 % September 30, December 31, 2022 2021 Average interest rate at end of period 2.91 % 0.31 % Securities underlying the agreements at end of period: Carrying value $ 343,655 $ 191,483 Estimated fair value $ 362,237 $ 205,734 Federal Home Loan Bank (“FHLB”) FHLB short-term borrowings mature over terms not exceeding 365 days and are collateralized by FHLB Dallas stock, nonspecified real estate loans and certain specific commercial real estate loans. The Company had no FHLB short-term borrowings during the three and nine months ended September 30, 2022 and 2021. Short-Term Bank Loans The Hilltop Broker-Dealers use short-term bank loans periodically to finance securities owned, margin loans to customers and correspondents and underwriting activities. Interest on the borrowings varies with the federal funds rate. The weighted average interest rate on borrowings at September 30, 2022 was 4.25%. Commercial Paper Hilltop Securities uses the net proceeds (after deducting related issuance expenses) from the sale of two commercial paper programs for general corporate purposes, including working capital and the funding of a portion of its securities inventories. The commercial paper notes (“CP Notes”) may be issued with maturities of 14 days to 270 days from the date of issuance. The CP Notes are issued under two separate programs, Series 2019-1 CP Notes and Series 2019-2 CP Notes, in maximum aggregate amounts of $300 million and $200 million, respectively. The CP Notes are not redeemable prior to maturity or subject to voluntary prepayment and do not bear interest, but are sold at a discount to par. The CP Notes are secured by a pledge of collateral owned by Hilltop Securities. As of September 30, 2022, the weighted average maturity of the CP Notes was 145 days at a rate of 3.16%, with a weighted average remaining life of 59 days. At September 30, 2022, the aggregate amount outstanding under these secured arrangements was $193.8 million, which was collateralized by securities held for firm accounts valued at $213.1 million. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable | |
Notes Payable | 10. Notes Payable Notes payable consisted of the following (in thousands). September 30, December 31, 2022 2021 Senior Notes due April 2025, net of discount of $746 and $886, respectively $ 149,253 $ 149,114 Subordinated Notes due May 2030, net of discount of $634 and $704, respectively 49,366 49,296 Subordinated Notes due May 2035, net of discount of $2,084 and $2,220, respectively 147,916 147,780 Ventures Management lines of credit 43,819 41,714 $ 390,354 $ 387,904 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 11. Leases Supplemental balance sheet information related to finance leases is as follows (in thousands). September 30, December 31, 2022 2021 Finance leases: Premises and equipment $ 7,780 $ 7,780 Accumulated depreciation (5,800) (5,358) Premises and equipment, net $ 1,980 $ 2,422 The components of lease costs, including short-term lease costs, are as follows (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost $ 9,121 $ 9,727 $ 28,078 $ 29,130 Less operating lease and sublease income (633) (343) (1,762) (1,024) Net operating lease cost $ 8,488 $ 9,384 $ 26,316 $ 28,106 Finance lease cost: Amortization of ROU assets $ 147 $ 147 $ 442 $ 442 Interest on lease liabilities 118 129 363 396 Total finance lease cost $ 265 $ 276 $ 805 $ 838 Supplemental cash flow information related to leases is as follows (in thousands). Nine Months Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 27,387 $ 28,160 Operating cash flows from finance leases 366 396 Financing cash flows from finance leases 563 509 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 12,336 $ 37,086 Finance leases — — Information regarding the lease terms and discount rates of the Company’s leases is as follows. September 30, 2022 December 31, 2021 Weighted Average Weighted Average Remaining Lease Weighted Average Remaining Lease Weighted Average Lease Classification Term (Years) Discount Rate Term (Years) Discount Rate Operating 5.6 3.85 % 5.9 3.89 % Finance 4.1 4.88 % 4.8 4.84 % Future minimum lease payments under lease agreements as of September 30, 2022, are presented below (in thousands). Operating Leases Finance Leases 2022 $ 1,462 $ 312 2023 33,554 1,280 2024 25,309 1,163 2025 18,642 886 2026 15,050 813 Thereafter 40,636 598 Total minimum lease payments 134,653 5,052 Less amount representing interest (14,018) (1,448) Lease liabilities $ 120,635 $ 3,604 As of September 30, 2022, the Company had additional operating leases that have not yet commenced with aggregate future minimum lease payments of approximately $0.1 million. These operating leases commenced in October 2022 with lease terms of five years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Company applies an estimated annual effective rate to interim period pre-tax income to calculate the income tax provision for the quarter in accordance with the principal method prescribed by the accounting guidance established for computing income taxes in interim periods. The Company’s effective tax rates were 21.8% and 22.8% for the three months ended September 30, 2022 and 2021, respectively, and 22.7% and 23.2% for the nine months ended September 30, 2022 and 2021, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Legal Matters The Company is subject to loss contingencies related to litigation, claims, investigations and legal and administrative cases and proceedings arising in the ordinary course of business. The Company evaluates these contingencies based on information currently available, including advice of counsel. The Company establishes accruals for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. Any accruals are periodically reviewed and may be adjusted as circumstances change. A portion of the Company’s exposure with respect to loss contingencies may be offset by applicable insurance coverage. In determining the amounts of any accruals or estimates of possible loss contingencies, the Company does not take into account the availability of insurance coverage. When it is practicable, the Company estimates loss contingencies for possible litigation and claims, whether or not there is an accrued probable loss. When the Company is able to estimate such probable losses, and when it estimates that it is reasonably possible it could incur losses in excess of amounts accrued, the Company is required to make a disclosure of the aggregate estimation. As available information changes, however, the matters for which the Company is able to estimate, as well as the estimates themselves, will be adjusted accordingly. Assessments of litigation and claims exposures are difficult due to many factors that involve inherent unpredictability. Those factors include the following: the varying stages of the proceedings, particularly in the early stages; unspecified, unsupported, or uncertain damages; damages other than compensatory, such as punitive damages; a matter presenting meaningful legal uncertainties, including novel issues of law; multiple defendants and jurisdictions; whether discovery has begun or is complete; whether meaningful settlement discussions have commenced; and whether the claim involves a class action and if so, how the class is defined. As a result of some of these factors, the Company may be unable to estimate reasonably possible losses with respect to some or all of the pending and threatened litigation and claims asserted against the Company. The Company is involved in information-gathering requests and investigations (both formal and informal), as well as reviews, examinations and proceedings (collectively, “Inquiries”) by various governmental regulatory agencies, law enforcement authorities and self-regulatory bodies regarding certain of its businesses, business practices and policies, as well as the conduct of persons with whom it does business. Additional Inquiries will arise from time to time. In connection with those Inquiries, the Company receives document requests, subpoenas and other requests for information. The Inquiries could develop into administrative, civil or criminal proceedings or enforcement actions that could result in consequences that have a material effect on the Company’s consolidated financial position, results of operations or cash flows as a whole. Such consequences could include adverse judgments, findings, settlements, penalties, fines, orders, injunctions, restitution, or alterations in the Company’s business practices, and could result in additional expenses and collateral costs, including reputational damage. On June 8, 2022, WR Investments, LP (“WR”) filed claims against Hilltop Securities, et al. through FINRA Dispute Resolution, Midwest Region. WR alleges it suffered a $13.0 million loss in its sale of subordinated bonds related to a portfolio of senior living facilities sold by an affiliate of WR. Hilltop Securities believes the claims are without merit and intends to vigorously defend against such claims. There can be no assurance, however, that Hilltop Securities will be successful. At present, Hilltop Securities is unable to estimate the probability or amount of potential losses, if any, related to these claims. In September 2020, PrimeLending received an investigative inquiry from the United States Attorney for the Western District of Virginia regarding PrimeLending’s float down option. The United States Attorney has issued grand jury subpoenas to PrimeLending and PlainsCapital Bank for additional materials regarding this matter. PrimeLending has, and PrimeLending and PlainsCapital Bank will, cooperate with requests for information with respect to this matter. While the final outcome of litigation and claims exposures or of any Inquiries is inherently unpredictable, management is currently of the opinion that the outcome of pending and threatened litigation and inquiries will not, except related to specific matters disclosed above, have a material effect on the Company’s business, consolidated financial position, results of operations or cash flows as a whole. However, in the event of unexpected future developments, it is reasonably possible that an adverse outcome in any matter, including the matters discussed above, could be material to the Company’s business, consolidated financial position, results of operations or cash flows for any particular reporting period of occurrence. Indemnification Liability Reserve The mortgage origination segment may be responsible to agencies, investors, or other parties for errors or omissions relating to its representations and warranties that each loan sold meets certain requirements, including representations as to underwriting standards and the validity of certain borrower representations in connection with the loan. If determined to be at fault, the mortgage origination segment either repurchases the affected loan from or indemnifies the claimant against loss. The mortgage origination segment has established an indemnification liability reserve for such probable losses. Generally, the mortgage origination segment first becomes aware that an agency, investor, or other party believes a loss has been incurred on a sold loan when it receives a written request from the claimant to repurchase the loan or reimburse the claimant’s losses. Upon completing its review of the claimant’s request, the mortgage origination segment establishes a specific claims reserve for the loan if it concludes its obligation to the claimant is both probable and reasonably estimable. An additional reserve has been established for probable agency, investor or other party losses that may have been incurred, but not yet reported to the mortgage origination segment based upon a reasonable estimate of such losses. Factors considered in the calculation of this reserve include, but are not limited to, the total volume of loans sold exclusive of specific claimant requests, actual claim settlements and the severity of estimated losses resulting from future claims, and the mortgage origination segment’s history of successfully curing defects identified in claim requests. In addition, the mortgage origination segment has considered that GNMA, FNMA and FHLMC have imposed certain restrictions on loans the agencies will accept under a forbearance agreement resulting from the COVID-19 pandemic, which could increase the magnitude of indemnification losses on these loans. While the mortgage origination segment’s sales contracts typically include borrower early payment default repurchase provisions, these provisions have not been a primary driver of claims to date, and therefore, are not a primary factor considered in the calculation of this reserve. At September 30, 2022 and December 31, 2021, the mortgage origination segment’s indemnification liability reserve totaled $22.1 million and $27.4 million, respectively. The provision for indemnification losses was $0.1 million and $2.5 million during the three months ended September 30, 2022 and 2021, respectively, and $1.3 million and $8.0 million during the nine months ended September 30, 2022 and 2021, respectively. The following tables provide for a rollforward of claims activity for loans put-back to the mortgage origination segment based upon an alleged breach of a representation or warranty with respect to a loan sold and related indemnification liability reserve activity (in thousands). Representation and Warranty Specific Claims Activity - Origination Loan Balance Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 28,715 $ 32,763 $ 31,407 $ 30,085 Claims made 14,247 5,412 42,305 19,100 Claims resolved with no payment (4,378) (4,217) (12,352) (9,088) Repurchases (11,320) (3,981) (34,096) (9,238) Indemnification payments — (267) — (1,149) Balance, end of period $ 27,264 $ 29,710 $ 27,264 $ 29,710 Indemnification Liability Reserve Activity Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 23,750 $ 26,372 $ 27,424 $ 21,531 Additions for new sales 608 2,702 2,123 8,568 Repurchases (1,591) (2,687) (6,367) (3,086) Early payment defaults (90) (116) (212) (152) Indemnification payments — (78) — (342) Change in reserves for loans sold in prior years (553) (220) (844) (546) Balance, end of period $ 22,124 $ 25,973 $ 22,124 $ 25,973 September 30, December 31, 2022 2021 Reserve for Indemnification Liability: Specific claims $ 394 $ 345 Incurred but not reported claims 21,730 27,079 Total $ 22,124 $ 27,424 Although management considers the total indemnification liability reserve to be appropriate, there may be changes in the reserve over time to address incurred losses due to unanticipated adverse changes in the economy and historical loss patterns, discrete events adversely affecting specific borrowers or industries, and/or actions taken by institutions or investors. The impact of such matters is considered in the reserving process when probable and estimable. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 9 Months Ended |
Sep. 30, 2022 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | 14. Financial Instruments with Off-Balance Sheet Risk Banking The Bank is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit that involve varying degrees of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. Such financial instruments are recorded in the consolidated financial statements when they are funded or related fees are incurred or received. The contract amounts of those instruments reflect the extent of involvement (and therefore the exposure to credit loss) the Bank has in particular classes of financial instruments. Commitments to extend credit are agreements to lend to a customer provided that the terms established in the contract are met. Commitments generally have fixed expiration dates and may require payment of fees. Because some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third-party. These letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers. In the aggregate, the Bank had outstanding unused commitments to extend credit of $2.5 billion at September 30, 2022 and outstanding financial and performance standby letters of credit of $100.3 million at September 30, 2022. The Bank uses the same credit policies in making commitments and standby letters of credit as it does for loans held for investment. The amount of collateral obtained, if deemed necessary, in these transactions is based on management’s credit evaluation of the borrower. Collateral held varies but may include real estate, accounts receivable, marketable securities, interest-bearing deposit accounts, inventory, and property, plant and equipment. Broker-Dealer In the normal course of business, the Hilltop Broker-Dealers execute, settle, and finance various securities transactions that may expose the Hilltop Broker-Dealers to off-balance sheet risk in the event that a customer or counterparty does not fulfill its contractual obligations. Examples of such transactions include the sale of securities not yet purchased by customers or for the accounts of the Hilltop Broker-Dealers, use of derivatives to support certain non-profit housing organization clients and to hedge changes in the fair value of certain securities, clearing agreements between the Hilltop Broker-Dealers and various clearinghouses and broker-dealers, secured financing arrangements that involve pledged securities, and when-issued underwriting and purchase commitments. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 15. Stock-Based Compensation Since 2012, the Company has issued stock-based incentive awards pursuant to the Hilltop Holdings Inc. 2012 Equity Incentive Plan (the “2012 Plan”). In July 2020, pursuant to stockholders’ approval, the Company adopted the Hilltop Holdings Inc. 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan serves as successor to the 2012 Plan. During the nine months ended September 30, 2022 and 2021, Hilltop granted 16,501 and 12,957 shares of common stock, respectively, pursuant to the 2020 Equity Plan to certain non-employee members of the Company’s board of directors for services rendered to the Company. Restricted Stock Units The following table summarizes information about nonvested restricted stock unit (“RSU”) activity for the nine months ended September 30, 2022 (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value Balance, December 31, 2021 1,869 $ 23.16 Granted 548 $ 33.25 Vested/Released (614) $ 19.30 Forfeited (136) $ 24.50 Balance, September 30, 2022 1,667 $ 27.79 Vested/Released RSUs include an aggregate of 135,249 shares withheld to satisfy employee statutory tax obligations during the nine months ended September 30, 2022. During the nine months ended September 30, 2022, the Compensation Committee of the board of directors of the Company awarded certain executives and key employees an aggregate of 474,985 RSUs pursuant to the 2020 Equity Plan. Of the RSUs granted during the nine months ended September 30, 2022, 327,377 that were outstanding at September 30, 2022, are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date. Of the RSUs granted during the nine months ended September 30, 2022, 135,558 that were outstanding at September 30, 2022 At September 30, 2022, in the aggregate, 1,259,181 of the outstanding RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 408,458 outstanding RSUs cliff vest based upon the achievement of certain performance goals over a three-year period. At September 30, 2022 |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2022 | |
Regulatory Matters | |
Regulatory Matters | 16. Regulatory Matters Banking and Hilltop PlainsCapital, which includes the Bank and PrimeLending, and Hilltop are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct, material effect on the consolidated financial statements. The regulations require PlainsCapital and Hilltop to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company performs reviews of the classification and calculation of risk-weighted assets to ensure accuracy and compliance with the Basel III regulatory capital requirements as implemented by the Board of Governors of the Federal Reserve System. The capital classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the companies to maintain minimum amounts and ratios (set forth in the following table) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of common equity Tier 1, Tier 1 and total capital (as defined) to risk-weighted assets (as defined). In order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers, Basel III requires banking organizations to maintain a capital conservation buffer above minimum risk-based capital requirements measured relative to risk-weighted assets. The following table shows PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including conservation buffer ratio in effect at the end of the period (dollars in thousands). Based on actual capital amounts and ratios shown in the following table, PlainsCapital’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. Actual capital amounts and ratios as of September 30, 2022 reflect PlainsCapital’s and Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period. Minimum Capital Requirements Including Conservation To Be Well September 30, 2022 December 31, 2021 Buffer Capitalized Amount Ratio Amount Ratio Ratio Ratio Tier 1 capital (to average assets): PlainsCapital $ 1,404,288 10.29 % $ 1,469,695 10.20 % 4.0 % 5.0 % Hilltop 1,881,289 11.41 % 2,262,356 12.58 % 4.0 % N/A Common equity Tier 1 capital PlainsCapital 1,404,288 14.68 % 1,469,695 16.00 % 7.0 % 6.5 % Hilltop 1,881,289 17.45 % 2,262,356 21.22 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,404,288 14.68 % 1,469,695 16.00 % 8.5 % 8.0 % Hilltop 1,881,289 17.45 % 2,262,356 21.22 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,486,989 15.54 % 1,540,100 16.77 % 10.5 % 10.0 % Hilltop 2,163,815 20.07 % 2,532,008 23.75 % 10.5 % N/A Broker-Dealer Pursuant to the net capital requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Hilltop Securities has elected to determine its net capital requirements using the alternative method. Accordingly, Hilltop Securities is required to maintain minimum net capital, as defined in Rule 15c3-1 promulgated under the Exchange Act, equal to the greater of $1,000,000 or 2% of aggregate debit balances, as defined in Rule 15c3-3 promulgated under the Exchange Act. Additionally, the net capital rule of the NYSE provides that equity capital may not be withdrawn or cash dividends paid if resulting net capital would be less than 5% of the aggregate debit items. Momentum Independent Network follows the primary (aggregate indebtedness) method, as defined in Rule 15c3-1 promulgated under the Exchange Act, which requires the maintenance of the larger of $250,000 or 6-2/3% of aggregate indebtedness. At September 30, 2022, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). Momentum Hilltop Independent Securities Network Net capital $ 198,954 $ 3,842 Less: required net capital 9,313 250 Excess net capital $ 189,641 $ 3,592 Net capital as a percentage of aggregate debit items 42.7 % Net capital in excess of 5% aggregate debit items $ 175,672 Under certain conditions, Hilltop Securities may be required to segregate cash and securities in a special reserve account for the benefit of customers under Rule 15c3-3 promulgated under the Exchange Act. Assets segregated for regulatory purposes under the provisions of the Exchange Act are restricted and not available for general corporate purposes. At September 30, 2022 and December 31, 2021, the Hilltop Broker-Dealers held cash of $109.4 million and $221.7 million, respectively, segregated in special reserve bank accounts for the benefit of customers. The Hilltop Broker-Dealers were not required to segregate cash and securities in special reserve accounts for the benefit of proprietary accounts of introducing broker-dealers at September 30, 2022 or December 31, 2021. Mortgage Origination As a mortgage originator, PrimeLending and its subsidiaries are subject to minimum net worth and liquidity requirements established by HUD and GNMA, as applicable. On an annual basis, PrimeLending and its subsidiaries submit audited financial statements to HUD and GNMA, as applicable, documenting their respective compliance with minimum net worth and liquidity requirements. As of September 30, 2022, PrimeLending and its subsidiaries’ net worth and liquidity exceeded the amounts required by both HUD and GNMA, as applicable. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 17. Stockholders’ Equity Dividends During the nine months ended September 30, 2022 and 2021, the Company declared and paid cash dividends of $0.45 and $0.36 per common share, or an aggregate of $33.5 million and $29.5 million, respectively. On October 20, 2022, Hilltop’s board of directors declared a quarterly cash dividend of $0.15 per common share, payable on November 25, 2022, to all common stockholders of record as of the close of business on November 11, 2022. Stock Repurchases In January 2022, the Hilltop board of directors authorized a new stock repurchase program through January 2023, pursuant to which the Company was originally authorized to repurchase, in the aggregate, up to $100.0 million of its outstanding common stock, inclusive of repurchases to offset dilution related to grants of stock-based compensation. As a result of share repurchases during 2022, including the tender offer described below, Hilltop has no further available share repurchase capacity associated with its previously authorized stock repurchase program. The Company’s stock repurchase program, prior year repurchases and related accounting policy are discussed in detail in Note 1 and Note 24 to the consolidated financial statements included in the Company’s 2021 Form 10-K. Tender Offer On May 2, 2022, the Company announced the commencement of a modified “Dutch auction” tender offer to purchase shares of its common stock for an aggregate cash purchase price of up to $400 million. On May 27, 2022, including the exercise of its right to purchase up to an additional 2% of its outstanding shares, the Company completed its tender offer, repurchasing 14,868,469 shares of outstanding common stock at a price of $29.75 per share for a total of $442.3 million, excluding fees and expenses. The Company funded the tender offer with cash on hand. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 18. Derivative Financial Instruments The Company uses various derivative financial instruments to mitigate interest rate risk. The Bank’s interest rate risk management strategy involves effectively managing the re-pricing characteristics of certain assets and liabilities to mitigate potential adverse impacts from changes in interest rates on the Bank’s net interest margin. Additionally, the Bank manages variability of cash flows associated with its variable rate debt in interest-related cash outflows with interest rate swap contracts. PrimeLending has interest rate risk relative to interest rate lock commitments (“IRLCs”) and its inventory of mortgage loans held for sale. PrimeLending is exposed to such interest rate risk from the time an IRLC is made to an applicant to the time the related mortgage loan is sold. To mitigate interest rate risk, PrimeLending executes forward commitments to sell mortgage-backed securities (“MBSs”) and Eurodollar futures. Additionally, PrimeLending has interest rate risk relative to its MSR asset and uses derivative instruments, including interest rate swaps and U.S. Treasury bond futures and options to hedge this risk. The Hilltop Broker-Dealers use forward commitments to both purchase and sell MBSs to facilitate customer transactions and as a means to hedge related exposure to interest rate risk in certain inventory positions. Additionally, Hilltop Securities uses various derivative instruments, including U.S. Treasury bond futures and options, Eurodollar futures, credit default swaps and municipal market data, or MMD, rate locks, to hedge changes in the fair value of its securities. Non-Hedging Derivative Instruments and the Fair Value Option As discussed in Note 3 to the consolidated financial statements, the Company has elected to measure substantially all mortgage loans held for sale at fair value under the provisions of the Fair Value Option. The election provides the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without applying hedge accounting provisions. The fair values of PrimeLending’s IRLCs and forward commitments are recorded in other assets or other liabilities, as appropriate, and changes in the fair values of these derivative instruments are recorded as a component of net gains from sale of loans and other mortgage production income. These changes in fair value are attributable to changes in the volume of IRLCs, mortgage loans held for sale, commitments to purchase and sell MBSs and MSR assets, and changes in market interest rates. Changes in market interest rates also conversely affect the value of PrimeLending’s mortgage loans held for sale and its MSR asset, which are measured at fair value under the Fair Value Option. The effect of the change in market interest rates on PrimeLending’s loans held for sale and MSR asset is discussed in Note 7 to the consolidated financial statements. The fair values of the Hilltop Broker-Dealers’ and the Bank’s derivative instruments are recorded in other assets or other liabilities, as appropriate. Changes in the fair value of derivatives are presented in the following table (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Increase (decrease) in fair value of derivatives during period: PrimeLending $ 2,276 $ 780 $ (10,975) $ 555 Hilltop Broker-Dealers 14,240 11,427 23,819 (3,845) Bank 7 7 53 26 Hedging Derivative Instruments The Company has entered into interest rate swap contracts to manage the exposure to changes in fair value associated with certain available for sale fixed rate collateralized mortgage backed securities and fixed rate loans held for investment attributable to changes in the designated benchmark interest rate. Certain of these fair value hedges have been designated as a portfolio layer, which provides the Company the ability to execute a fair value hedge of the interest rate risk associated with a portfolio of similar prepayable assets whereby the last dollar amount estimated to remain in the portfolio of assets is identified as the hedged item. Additionally, the Company has outstanding interest rate swap contracts designated as cash flow hedges and utilized to manage the variability of cash flows associated with its variable rate borrowings. Under each of its interest rate swap contracts designated as hedges, the Company receives a floating rate and pays a fixed rate on the outstanding notional amount. The Company assesses the hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the derivative. To the extent that the derivative instruments are highly effective in offsetting the variability of the hedged cash flows or fair value, changes in the fair value of the derivative are included as a component of other comprehensive loss on our consolidated balance sheets. Although the Company has determined at the onset of the hedges that the derivative instruments will be highly effective hedges throughout the term of the contract, any portion of derivative instruments subsequently determined to be ineffective will be recognized in earnings. Derivative positions are presented in the following table (in thousands). September 30, 2022 December 31, 2021 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments (not designated as hedges): IRLCs $ 1,131,664 $ (16,729) $ 1,283,152 $ 25,489 Commitments to purchase MBSs 1,353,969 (27,946) 1,575,264 (674) Commitments to sell MBSs 3,150,790 71,201 3,314,173 (355) Interest rate swaps 36,317 2,976 68,413 (1,949) U.S. Treasury bond futures and options (1) 274,000 — 247,800 — Eurodollar and other futures (1) 2,964,000 — 2,061,800 — Credit default swaps 1,000 5 7,000 (15) Derivative instruments (designated as hedges): Interest rate swaps designated as cash flow hedges $ 415,000 $ 22,675 $ 190,000 $ 603 Interest rate swaps designated as fair value hedges (2) 340,323 44,322 221,232 3,207 (1) Changes in the fair value of these contracts are settled daily with the respective counterparties of PrimeLending and the Hilltop Broker-Dealers. (2) The Company designated $340.3 million and $221.2 million as the hedged amount (from a closed portfolio of prepayable available for sale securities and loans held for investment with a carrying value of $296.0 million and $218.0 million as of September 30, 2022 and December 31, 2021, respectively), of which, a subset of these hedges are in portfolio layer hedging relationships. The cumulative basis adjustment included in the carrying value of the hedged items totaled $44.3 million and $3.2 million as of September 30, 2022 and December 31, 2021, respectively. PrimeLending held cash collateral advances, in other liabilities within the consolidated balance sheets, of $56.3 million to offset net asset derivative positions on its commitments to sell MBSs at September 30, 2022. PrimeLending had advanced cash collateral totaling $0.1 million and $0.1 million to offset net liability positions on its commitments to sell MBSs at September 30, 2022 and December 31, 2021, respectively. In addition, PrimeLending and the Hilltop Broker-Dealers had advanced cash collateral totaling $11.7 million and $4.2 million on various derivative instruments at September 30, 2022 and December 31, 2021, respectively. The advanced cash collateral amounts are included in other assets within the consolidated balance sheets. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Offsetting | |
Balance Sheet Offsetting | 19. Balance Sheet Offsetting Certain financial instruments, including resale and repurchase agreements, securities lending arrangements and derivatives, may be eligible for offset in the consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Assets Cash of Recognized Offset in the Presented in the Financial Collateral Net Assets Balance Sheet Balance Sheet Instruments Pledged Amount September 30, 2022 Securities borrowed: Institutional counterparties $ 1,182,934 $ — $ 1,182,934 $ (1,126,566) $ — $ 56,368 Interest rate swaps: Institutional counterparties 2,976 — 2,976 (2,953) — 23 Credit default swaps: Institutional counterparties 5 — 5 (5) — — Reverse repurchase agreements: Institutional counterparties 145,365 — 145,365 (139,187) — 6,178 Forward MBS derivatives: Institutional counterparties 72,204 (686) 71,518 (39,838) — 31,680 $ 1,403,484 $ (686) $ 1,402,798 $ (1,308,549) $ — $ 94,249 December 31, 2021 Securities borrowed: Institutional counterparties $ 1,518,372 $ — $ 1,518,372 $ (1,445,590) $ — $ 72,782 Reverse repurchase agreements: Institutional counterparties 118,262 — 118,262 (118,262) — — Forward MBS derivatives: Institutional counterparties 2,955 (1,773) 1,182 (744) — 438 $ 1,639,589 $ (1,773) $ 1,637,816 $ (1,564,596) $ — $ 73,220 Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Liabilities Cash of Recognized Offset in the Presented in the Financial Collateral Net Liabilities Balance Sheet Balance Sheet Instruments Pledged Amount September 30, 2022 Securities loaned: Institutional counterparties $ 1,072,408 $ — $ 1,072,408 $ (1,017,959) $ — $ 54,449 Repurchase agreements: Institutional counterparties 302,030 — 302,030 (319,453) — (17,423) Forward MBS derivatives: Institutional counterparties 28,264 — 28,264 (28,264) — — $ 1,402,702 $ — $ 1,402,702 $ (1,365,676) $ — $ 37,026 December 31, 2021 Securities loaned: Institutional counterparties $ 1,432,196 $ — $ 1,432,196 $ (1,359,850) $ — $ 72,346 Interest rate swaps: Institutional counterparties 1,949 — 1,949 (1,919) — 30 Credit default swaps: Institutional counterparties 15 — 15 (15) — — Repurchase agreements: Institutional counterparties 191,483 — 191,483 (205,734) — (14,251) Forward MBS derivatives: Institutional counterparties 2,211 — 2,211 (2,211) — — $ 1,627,854 $ — $ 1,627,854 $ (1,569,729) $ — $ 58,125 Secured Borrowing Arrangements Secured Borrowings (Repurchase Agreements) — one Securities Lending Activities — When lending securities, the Company receives cash or similar collateral and generally pays interest (based on the amount of cash deposited) to the other party to the transaction. Securities lending transactions are executed pursuant to written agreements with counterparties that generally require securities loaned to be marked-to-market on a daily basis. The Company receives collateral in the form of cash in an amount generally in excess of the fair value of securities loaned. The Company monitors the fair value of securities loaned on a daily basis, with additional collateral obtained or refunded, as necessary. Collateral adjustments are made on a daily basis through the facilities of various clearinghouses. The Company is a principal in these securities lending transactions and is liable for losses in the event of a failure of any other party to honor its contractual obligation. Management sets credit limits with each counterparty and reviews these limits regularly to monitor the risk level with each counterparty. The Company is subject to credit risk through its securities lending activities if securities prices decline rapidly because the value of the Company’s collateral could fall below the amount of the indebtedness it secures. In rapidly appreciating markets, credit risk increases due to short positions. The Company’s securities lending business subjects the Company to credit risk if a counterparty fails to perform or if collateral securing its obligations is insufficient. In securities transactions, the Company is subject to credit risk during the period between the execution of a trade and the settlement by the customer. The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both September 30, 2022 and December 31, 2021. Remaining Contractual Maturities Overnight and Greater Than September 30, 2022 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities 182,041 53,624 61,715 4,650 302,030 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,072,295 — — — 1,072,295 Total $ 1,254,449 $ 53,624 $ 61,715 $ 4,650 $ 1,374,438 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,374,438 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2021 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities $ 93,651 $ — $ 86,357 $ 11,475 $ 191,483 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,432,083 — — — 1,432,083 Total $ 1,525,847 $ — $ 86,357 $ 11,475 $ 1,623,679 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,623,679 Amount related to agreements not included in offsetting disclosure above $ — |
Broker-Dealer and Clearing Orga
Broker-Dealer and Clearing Organization Receivables and Payables | 9 Months Ended |
Sep. 30, 2022 | |
Broker-Dealer and Clearing Organization Receivables and Payables | |
Broker-Dealer and Clearing Organization Receivables and Payables | 20. Broker-Dealer and Clearing Organization Receivables and Payables Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). September 30, December 31, 2022 2021 Receivables: Securities borrowed $ 1,182,934 $ 1,518,372 Securities failed to deliver 14,625 5,664 Trades in process of settlement 47,753 144,773 Other 9,740 4,137 $ 1,255,052 $ 1,672,946 Payables: Securities loaned $ 1,072,408 $ 1,432,196 Correspondents 20,700 20,571 Securities failed to receive 78,316 18,808 Other 4,732 5,725 $ 1,176,156 $ 1,477,300 |
Segment and Related Information
Segment and Related Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment and Related Information | |
Segment and Related Information | 21. Segment and Related Information The Company has two primary business units, PCC (banking and mortgage origination) and Securities Holdings (broker-dealer). Under GAAP, the Company’s business units are comprised of three reportable business segments organized primarily by the core products offered to the segments’ respective customers: banking, broker-dealer and mortgage origination. These segments reflect the manner in which operations are managed and the criteria used by the chief operating decision maker, the Company’s President and Chief Executive Officer, to evaluate segment performance, develop strategy and allocate resources. The banking segment includes the operations of the Bank. The broker-dealer segment includes the operations of Securities Holdings and the mortgage origination segment is composed of PrimeLending. Corporate includes certain activities not allocated to specific business segments. These activities include holding company financing and investing activities, merchant banking investment opportunities and management and administrative services to support the overall operations of the Company. Balance sheet amounts not discussed previously and the elimination of intercompany transactions are included in “All Other and Eliminations.” The following tables present certain information about reportable business segment revenues, operating results, goodwill and assets (in thousands). Mortgage All Other and Hilltop Three Months Ended September 30, 2022 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 110,939 $ 13,386 $ (2,939) $ (3,276) $ 5,376 $ 123,486 Provision for (reversal of) credit losses (650) (130) — — — (780) Noninterest income 12,200 100,798 98,200 1,809 (6,032) 206,975 Noninterest expense 60,160 96,843 118,345 14,034 (644) 288,738 Income (loss) before taxes $ 63,629 $ 17,471 $ (23,084) $ (15,501) $ (12) $ 42,503 Mortgage All Other and Hilltop Nine Months Ended September 30, 2022 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 304,269 $ 37,481 $ (6,066) $ (9,856) $ 9,705 $ 335,533 Provision for (reversal of) credit losses 4,325 346 — — — 4,671 Noninterest income 37,438 249,139 381,477 5,655 (11,033) 662,676 Noninterest expense 175,921 268,307 386,372 44,388 (1,357) 873,631 Income (loss) before taxes $ 161,461 $ 17,967 $ (10,961) $ (48,589) $ 29 $ 119,907 Mortgage All Other and Hilltop Three Months Ended September 30, 2021 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 99,978 $ 10,427 $ (3,503) $ (4,341) $ 2,529 $ 105,090 Provision for (reversal of) credit losses (5,775) (44) — — — (5,819) Noninterest income 11,727 116,143 242,270 757 (2,952) 367,945 Noninterest expense 54,567 109,193 176,587 15,355 (528) 355,174 Income (loss) before taxes $ 62,913 $ 17,421 $ 62,180 $ (18,939) $ 105 $ 123,680 Mortgage All Other and Hilltop Nine Months Ended September 30, 2021 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 309,330 $ 31,623 $ (16,554) $ (13,720) $ 8,009 $ 318,688 Provision for (reversal of) credit losses (39,725) 77 — — — (39,648) Noninterest income 33,293 298,229 794,679 8,140 (8,912) 1,125,429 Noninterest expense 167,869 287,831 573,884 37,015 (1,395) 1,065,204 Income (loss) before taxes $ 214,479 $ 41,944 $ 204,241 $ (42,595) $ 492 $ 418,561 Mortgage All Other and Hilltop Banking Broker-Dealer Origination Corporate Eliminations Consolidated September 30, 2022 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 13,455,679 $ 2,866,990 $ 1,405,712 $ 2,453,933 $ (3,567,023) $ 16,615,291 December 31, 2021 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 14,944,249 $ 3,673,346 $ 2,207,822 $ 2,940,670 $ (5,077,007) $ 18,689,080 The Company performs required annual impairment tests of its goodwill as of October 1st. The goodwill impairment tests require the Company to make judgments in determining what assumptions to use in the calculations. The process consists of estimating the fair value of each reporting unit based on valuation techniques, including a discounted cash flow model using revenue and profit forecasts and recent industry transaction and trading multiples of peers, and comparing those estimated fair values with the carrying values of the assets and liabilities of the reporting unit, which includes the allocated goodwill. Specifically, the mortgage origination and broker-dealer reporting units have each experienced lower-than-forecasted |
Earnings per Common Share
Earnings per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings per Common Share | |
Earnings per Common Share | 22. Earnings per Common Share The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Basic earnings per share: Income attributable to Hilltop $ 32,068 $ 92,906 $ 87,578 $ 312,310 Weighted average shares outstanding - basic 64,552 80,109 72,400 81,306 Basic earnings per common share: $ 0.50 $ 1.16 $ 1.21 $ 3.84 Diluted earnings per share: Income attributable to Hilltop $ 32,068 $ 92,906 $ 87,578 $ 312,310 Weighted average shares outstanding - basic 64,552 80,109 72,400 81,306 Effect of potentially dilutive securities 117 433 157 457 Weighted average shares outstanding - diluted 64,669 80,542 72,557 81,763 Diluted earnings per common share $ 0.50 $ 1.15 $ 1.21 $ 3.82 |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting and Reporting Policies | |
Nature of Operations | Nature of Operations Hilltop Holdings Inc. (“Hilltop” and, collectively with its subsidiaries, the “Company”) is a financial holding company registered under the Bank Holding Company Act of 1956. The Company’s primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank (the “Bank”). In addition, the Company provides an array of financial products and services through its broker-dealer and mortgage origination subsidiaries. The Company, headquartered in Dallas, Texas, provides its products and services through two primary business units, PlainsCapital Corporation (“PCC”) and Hilltop Securities Holdings LLC (“Securities Holdings”). PCC is a financial holding company that provides, through its subsidiaries, traditional banking, wealth and investment management and treasury management services primarily in Texas and residential mortgage lending throughout the United States. Securities Holdings is a holding company that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, clearing, securities lending, structured finance and retail brokerage services throughout the United States. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, these financial statements contain all adjustments necessary for a fair statement of the results of the interim periods presented. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). Results for interim periods are not necessarily indicative of results to be expected for a full year or any future period. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates regarding the allowance for credit losses, the fair values of financial instruments, the mortgage loan indemnification liability, and the potential impairment of goodwill and identifiable intangible assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. Hilltop owns 100% of the outstanding stock of PCC. PCC owns 100% of the outstanding stock of the Bank and 100% of the membership interest in Hilltop Opportunity Partners LLC, a merchant bank utilized to facilitate investments in companies engaged in non-financial activities. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”). PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds an ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC also owned 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which were not included in the consolidated financial statements under the requirements of the Variable Interest Entities (“VIE”) Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) because the primary beneficiaries of the Trusts are not within the consolidated group. Following receipt of regulatory approval, during June, July and August 2021, PCC submitted to the trustees of each of the Trusts notices to redeem in full outstanding junior subordinated debentures of $67.0 million issued by PCC, which resulted in the full redemption to the holders of the associated preferred securities and common securities during the third quarter of 2021. For further details, see Note 16 to the consolidated financial statements included in the Company’s 2021 Form 10-K. Hilltop has a 100% membership interest in Securities Holdings, which operates through its wholly owned subsidiaries, Hilltop Securities Inc. (“Hilltop Securities”), Momentum Independent Network Inc. (“Momentum Independent Network” and collectively with Hilltop Securities, the “Hilltop Broker-Dealers”) and Hilltop Securities Asset Management, LLC. Hilltop Securities is a broker-dealer registered with the SEC and Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”). Momentum Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA. Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC are registered investment advisers under the Investment Advisers Act of 1940. In addition, Hilltop owns 100% of the membership interest in each of HTH Hillcrest Project LLC (“HTH Project LLC”) and Hilltop of the membership interest in HTH Diamond Hillcrest Land LLC (“Hillcrest Land LLC”) which is consolidated under the aforementioned VIE Subsections of the ASC. These entities are related to the Hilltop Plaza investment discussed in detail in Note 19 to the consolidated financial statements included in the Company’s 2021 Form 10-K and are collectively referred to as the “Hilltop Plaza Entities.” The consolidated financial statements include the accounts of the above-named entities. Intercompany transactions and balances have been eliminated. Noncontrolling interests have been recorded for minority ownership in entities that are not wholly owned and are presented in compliance with the provisions of Noncontrolling Interest in Subsidiary Subsections of the ASC. Certain reclassifications have been made to the prior period consolidated financial statements to conform with the current period presentation. In preparing these consolidated financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all stockholders and other financial statement users, or filed with the SEC. Significant accounting policies are detailed in Note 1 to the consolidated financial statements included in the Company’s 2021 Form 10-K. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Schedule of information regarding financial assets and liabilities measured at fair value on a recurring basis | The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands). Level 1 Level 2 Level 3 Total September 30, 2022 Inputs Inputs Inputs Fair Value Trading securities $ 5,259 $ 636,605 $ — $ 641,864 Available for sale securities — 1,584,724 — 1,584,724 Equity securities 209 — — 209 Loans held for sale — 826,013 37,414 863,427 Loans held for investment — — 8,912 8,912 Derivative assets — 141,536 — 141,536 MSR asset — — 156,539 156,539 Securities sold, not yet purchased 65,370 34,145 — 99,515 Derivative liabilities — 45,032 — 45,032 Level 1 Level 2 Level 3 Total December 31, 2021 Inputs Inputs Inputs Fair Value Trading securities $ 8,628 $ 639,370 $ — $ 647,998 Available for sale securities — 2,130,568 — 2,130,568 Equity securities 250 — — 250 Loans held for sale — 1,734,875 47,716 1,782,591 Derivative assets — 48,122 — 48,122 MSR asset — — 86,990 86,990 Securities sold, not yet purchased 45,973 50,613 — 96,586 Derivative liabilities — 21,816 — 21,816 |
Rollforward for financial instruments measured at fair value using Level 3 inputs | The following tables include a rollforward for those material financial instruments measured at fair value using Level 3 inputs (in thousands). Total Gains or Losses (Realized or Unrealized) Balance, Transfers Included in Other Beginning of Purchases/ Sales/ to (from) Included in Comprehensive Balance, Period Additions Reductions Level 3 Net Income Income (Loss) End of Period Three months ended September 30, 2022 Loans held for sale $ 41,732 $ 18,012 $ (19,594) $ (251) $ (2,485) $ — $ 37,414 Loans held for investment 9,027 — — — (115) — 8,912 MSR asset 121,688 29,340 — — 5,511 — 156,539 Total $ 172,447 $ 47,352 $ (19,594) $ (251) $ 2,911 $ — $ 202,865 Nine months ended September 30, 2022 Loans held for sale $ 47,716 $ 38,454 $ (44,342) $ 5,587 $ (10,001) $ — $ 37,414 Loans held for investment — 9,611 (562) — (137) — 8,912 MSR asset 86,990 47,850 (1,876) — 23,575 — 156,539 Total $ 134,706 $ 95,915 $ (46,780) $ 5,587 $ 13,437 $ — $ 202,865 Three months ended September 30, 2021 Loans held for sale $ 71,433 $ 18,817 $ (22,207) $ (2,291) $ 6,767 $ — $ 72,519 MSR asset 124,497 20,252 (31,366) — (2,452) — 110,931 Total $ 195,930 $ 39,069 $ (53,573) $ (2,291) $ 4,315 $ — $ 183,450 Nine months ended September 30, 2021 Loans held for sale $ 71,816 $ 50,273 $ (51,718) $ (4,099) $ 6,247 $ — $ 72,519 MSR asset 143,742 70,368 (116,000) — 12,821 — 110,931 Total $ 215,558 $ 120,641 $ (167,718) $ (4,099) $ 19,068 $ — $ 183,450 |
Schedule of significant unobservable inputs used in the fair value measurements | Range (Weighted-Average) Financial instrument Valuation Technique Unobservable Inputs September 30, 2022 December 31, 2021 Loans held for sale Market comparable Projected price 90 - 92 % ( 91 %) 94 - 95 % ( 95 %) Loans held for investment Discounted cash flow Discount rate 12.00 % — MSR asset Discounted cash flow Constant prepayment rate 8.06 % 10.02 % Discount rate 12.09 % 14.32 % |
Schedule of changes in fair value for instruments reported at fair value under the Fair Value Option | The following table presents those changes in fair value of material instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (37,526) $ — $ (37,526) $ (32,694) $ — $ (32,694) Loans held for investment (377) — (377) — — — MSR asset 5,511 — 5,511 (2,452) — (2,452) Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ (73,520) $ — $ (73,520) $ (55,211) $ — $ (55,211) Loans held for investment (660) — (660) — — — MSR asset 23,575 — 23,575 12,821 — 12,821 |
Schedule of carrying values and estimated fair values of financial instruments | The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands). Estimated Fair Value Carrying Level 1 Level 2 Level 3 September 30, 2022 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 1,778,247 $ 1,778,247 $ — $ — $ 1,778,247 Assets segregated for regulatory purposes 109,358 109,358 — — 109,358 Securities purchased under agreements to resell 145,365 — 145,365 — 145,365 Held to maturity securities 889,452 — 792,559 — 792,559 Loans held for sale 140,178 — 85,137 57,188 142,325 Loans held for investment, net 7,843,551 — 402,502 7,281,532 7,684,034 Broker-dealer and clearing organization receivables 1,255,052 — 1,255,052 — 1,255,052 Other assets 71,365 — 69,699 1,666 71,365 Financial liabilities: Deposits 11,352,014 — 11,333,099 — 11,333,099 Broker-dealer and clearing organization payables 1,176,156 — 1,176,156 — 1,176,156 Short-term borrowings 942,309 — 942,309 — 942,309 Debt 390,354 — 389,632 — 389,632 Other liabilities 9,198 — 9,198 — 9,198 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2021 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 2,823,523 $ 2,823,523 $ — $ — $ 2,823,523 Assets segregated for regulatory purposes 221,740 221,740 — — 221,740 Securities purchased under agreements to resell 118,262 — 118,262 — 118,262 Held to maturity securities 267,684 — 276,296 — 276,296 Loans held for sale 95,599 — 95,599 — 95,599 Loans held for investment, net 7,788,552 — 733,193 7,266,732 7,999,925 Broker-dealer and clearing organization receivables 1,672,946 — 1,672,946 — 1,672,946 Other assets 73,041 — 71,290 1,751 73,041 Financial liabilities: Deposits 12,818,077 — 12,821,138 — 12,821,138 Broker-dealer and clearing organization payables 1,477,300 — 1,477,300 — 1,477,300 Short-term borrowings 859,444 — 859,444 — 859,444 Debt 387,904 — 387,904 — 387,904 Other liabilities 3,944 — 3,944 — 3,944 |
Schedule of adjustments to the carrying value of these investments | The following table presents the adjustments to the carrying value of these investments during the periods presented (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 28,183 $ 26,988 $ 16,817 $ 22,844 Additional investments — — 11,000 — Upward adjustments 234 122 679 6,006 Impairments and downward adjustments (1,013) (253) (1,092) (1,017) Dispositions — (10,390) — (11,366) Balance, end of period $ 27,404 $ 16,467 $ 27,404 $ 16,467 |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Securities | |
Summary of trading securities | The fair value of trading securities is summarized as follows (in thousands). September 30, December 31, 2022 2021 U.S. Treasury securities $ 309 $ 3,728 U.S. government agencies: Bonds 14,255 3,410 Residential mortgage-backed securities 152,513 152,093 Collateralized mortgage obligations 171,241 126,389 Corporate debt securities 63,626 60,671 States and political subdivisions 200,945 285,376 Private-label securitized product 13,690 11,377 Other 25,285 4,954 Totals $ 641,864 $ 647,998 |
Summary of amortized cost and fair value of available for sale securities | The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). Available for Sale Amortized Unrealized Unrealized September 30, 2022 Cost Gains Losses Fair Value U.S. Treasury securities $ 24,958 $ — $ (696) $ 24,262 U.S. government agencies: Bonds 115,633 315 (814) 115,134 Residential mortgage-backed securities 474,451 20 (55,751) 418,720 Commercial mortgage-backed securities 199,537 — (34,699) 164,838 Collateralized mortgage obligations 898,449 — (72,099) 826,350 States and political subdivisions 40,177 71 (4,828) 35,420 Totals $ 1,753,205 $ 406 $ (168,887) $ 1,584,724 Available for Sale Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. Treasury securities $ 14,937 $ — $ (75) $ 14,862 U.S. government agencies: Bonds 43,448 838 (153) 44,133 Residential mortgage-backed securities 900,084 7,979 (9,617) 898,446 Commercial mortgage-backed securities 219,460 367 (9,128) 210,699 Collateralized mortgage obligations 926,783 2,547 (12,464) 916,866 States and political subdivisions 43,923 1,839 (200) 45,562 Totals $ 2,148,635 $ 13,570 $ (31,637) $ 2,130,568 |
Summary of amortized cost and fair value of held to maturity securities | Held to Maturity Amortized Unrealized Unrealized September 30, 2022 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 308,102 $ — $ (34,442) $ 273,660 Commercial mortgage-backed securities 181,259 — (15,197) 166,062 Collateralized mortgage obligations 323,526 — (36,664) 286,862 States and political subdivisions 76,565 1 (10,591) 65,975 Totals $ 889,452 $ 1 $ (96,894) $ 792,559 Held to Maturity Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 9,892 $ 400 $ — $ 10,292 Commercial mortgage-backed securities 145,742 5,311 — 151,053 Collateralized mortgage obligations 43,990 476 — 44,466 States and political subdivisions 68,060 2,428 (3) 70,485 Totals $ 267,684 $ 8,615 $ (3) $ 276,296 |
Schedule of information regarding available for sale securities that were in an unrealized loss position | Information regarding available for sale and held to maturity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). September 30, 2022 December 31, 2021 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. treasury securities: Unrealized loss for less than twelve months 2 $ 19,845 $ 136 2 $ 14,862 $ 75 Unrealized loss for twelve months or longer 1 4,417 560 — — — 3 24,262 696 2 14,862 75 U.S. government agencies: Bonds: Unrealized loss for less than twelve months 8 51,594 247 2 9,904 94 Unrealized loss for twelve months or longer 3 15,493 567 1 6,184 59 11 67,087 814 3 16,088 153 Residential mortgage-backed securities: Unrealized loss for less than twelve months 98 204,950 17,715 52 548,392 6,915 Unrealized loss for twelve months or longer 26 211,828 38,036 17 104,378 2,702 124 416,778 55,751 69 652,770 9,617 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 12 90,402 12,637 5 65,636 1,776 Unrealized loss for twelve months or longer 7 74,435 22,062 14 138,619 7,352 19 164,837 34,699 19 204,255 9,128 Collateralized mortgage obligations: Unrealized loss for less than twelve months 112 669,347 45,405 72 618,464 11,316 Unrealized loss for twelve months or longer 28 141,868 26,694 10 62,647 1,148 140 811,215 72,099 82 681,111 12,464 States and political subdivisions: Unrealized loss for less than twelve months 51 23,421 3,119 14 5,576 200 Unrealized loss for twelve months or longer 13 3,819 1,709 — — — 64 27,240 4,828 14 5,576 200 Total available for sale: Unrealized loss for less than twelve months 283 1,059,559 79,259 147 1,262,834 20,376 Unrealized loss for twelve months or longer 78 451,860 89,628 42 311,828 11,261 361 $ 1,511,419 $ 168,887 189 $ 1,574,662 $ 31,637 |
Schedule of information regarding held to maturity securities that were in an unrealized loss position | September 30, 2022 December 31, 2021 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Held to Maturity Residential mortgage-backed securities: Unrealized loss for less than twelve months 16 $ 78,772 $ 9,167 — $ — $ — Unrealized loss for twelve months or longer 29 194,888 25,275 — — — 45 273,660 34,442 — — — Commercial mortgage-backed securities: Unrealized loss for less than twelve months 30 163,245 14,736 — — — Unrealized loss for twelve months or longer 1 2,817 461 — — — 31 166,062 15,197 — — — Collateralized mortgage obligations: Unrealized loss for less than twelve months 28 92,710 9,004 — — — Unrealized loss for twelve months or longer 28 194,152 27,660 — — — 56 286,862 36,664 — — — States and political subdivisions: Unrealized loss for less than twelve months 173 62,949 10,360 2 558 1 Unrealized loss for twelve months or longer 3 595 231 1 266 2 176 63,544 10,591 3 824 3 Total held to maturity: Unrealized loss for less than twelve months 247 397,676 43,267 2 558 1 Unrealized loss for twelve months or longer 61 392,452 53,627 1 266 2 308 $ 790,128 $ 96,894 3 $ 824 $ 3 |
Schedule of amortized cost and fair value of securities, excluding trading and equity available for sale securities, by contractual maturity | The amortized cost and fair value of securities, excluding trading and equity securities, at September 30, 2022 are shown by contractual maturity below (in thousands). Available for Sale Held to Maturity Amortized Amortized Cost Fair Value Cost Fair Value Due in one year or less $ 35,135 $ 34,938 $ 856 $ 849 Due after one year through five years 23,053 21,705 801 750 Due after five years through ten years 50,701 50,043 23,232 20,884 Due after ten years 71,879 68,130 51,676 43,492 180,768 174,816 76,565 65,975 Residential mortgage-backed securities 474,451 418,720 308,102 273,660 Commercial mortgage-backed securities 199,537 164,838 181,259 166,062 Collateralized mortgage obligations 898,449 826,350 323,526 286,862 $ 1,753,205 $ 1,584,724 $ 889,452 $ 792,559 |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Loans Held for Investment | |
Summary of loans held for investment by portfolio segment | Loans held for investment summarized by portfolio segment are as follows (in thousands). September 30, December 31, 2022 2021 Commercial real estate $ 3,313,911 $ 3,042,729 Commercial and industrial (1) 1,668,209 1,875,420 Construction and land development 934,915 892,783 1-4 family residential 1,595,270 1,303,430 Consumer 29,439 32,349 Broker-dealer (2) 402,502 733,193 7,944,246 7,879,904 Allowance for credit losses (91,783) (91,352) Total loans held for investment, net of allowance $ 7,852,463 $ 7,788,552 (1) Included loans totaling $1.1 million and $77.7 million at September 30, 2022 and December 31, 2021, respectively, funded through the Paycheck Protection Program. (2) Primarily represents margin loans to customers and correspondents associated with broker-dealer segment operations. |
Summary of non-accrual loans by portfolio segment | The following table provides details associated with non-accrual loans, excluding those classified as held for sale (in thousands). Non-accrual Loans September 30, 2022 December 31, 2021 Interest Income Recognized With With No With With No Three Months Ended September 30, Nine Months Ended September 30, Allowance Allowance Total Allowance Allowance Total 2022 2021 2022 2021 Commercial real estate: Non-owner occupied $ 1,171 $ 95 $ 1,266 $ 413 $ 1,853 $ 2,266 $ 265 $ 76 $ 422 $ 204 Owner occupied 3,469 — 3,469 3,058 1,277 4,335 88 345 505 574 Commercial and industrial 10,745 1,333 12,078 16,536 5,942 22,478 303 179 930 653 Construction and land development 1 — 1 2 — 2 7 13 22 48 1-4 family residential 724 12,124 12,848 902 17,306 18,208 561 796 2,286 2,837 Consumer 16 — 16 23 — 23 — 1 — (120) Broker-dealer — — — — — — — — — — $ 16,126 $ 13,552 $ 29,678 $ 20,934 $ 26,378 $ 47,312 $ 1,224 $ 1,410 $ 4,165 $ 4,196 |
Schedule of analysis of the aging of the entity's loan portfolio | An analysis of the aging of the Company’s loan portfolio is shown in the following tables (in thousands). Accruing Loans Loans Past Due Total Past Current Total Past Due September 30, 2022 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ — $ — $ 234 $ 234 $ 1,953,997 $ 1,954,231 $ — Owner occupied 329 — — 329 1,359,351 1,359,680 — Commercial and industrial 3,597 8 8,329 11,934 1,656,275 1,668,209 — Construction and land development 1 — — 1 934,914 934,915 — 1-4 family residential 3,687 1,431 5,046 10,164 1,585,106 1,595,270 102 Consumer 147 7 16 170 29,269 29,439 — Broker-dealer — — — — 402,502 402,502 — $ 7,761 $ 1,446 $ 13,625 $ 22,832 $ 7,921,414 $ 7,944,246 $ 102 Accruing Loans Loans Past Due Total Past Current Total Past Due December 31, 2021 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 117 $ — $ 1,173 $ 1,290 $ 1,728,409 $ 1,729,699 $ — Owner occupied 590 688 2,273 3,551 1,309,479 1,313,030 — Commercial and industrial 1,059 277 13,640 14,976 1,860,444 1,875,420 1 Construction and land development 946 — — 946 891,837 892,783 — 1-4 family residential 7,642 2,738 4,842 15,222 1,288,208 1,303,430 100 Consumer 123 22 22 167 32,182 32,349 — Broker-dealer — — — — 733,193 733,193 — $ 10,477 $ 3,725 $ 21,950 $ 36,152 $ 7,843,752 $ 7,879,904 $ 101 |
Schedule of internal risk grades of loans by class | The following table presents loans held for investment grouped by asset class and credit quality indicator, segregated by year of origination or renewal (in thousands). Amortized Cost Basis by Origination Year 2017 and September 30, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Commercial real estate: non-owner occupied Internal Grade 1-3 (Pass low risk) $ 47,140 $ 76,592 $ 20,521 $ 8,044 $ 4,779 $ 8,142 $ 1 $ 165,219 Internal Grade 4-7 (Pass normal risk) 341,269 339,862 121,299 80,514 46,457 56,121 47,443 1,032,965 Internal Grade 8-11 (Pass high risk and watch) 82,184 138,346 182,165 82,786 67,328 83,882 11,821 648,512 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 78,037 14,543 1,637 8,133 — 3,546 373 106,269 Internal Grade 14 (Substandard non-accrual) — 399 — — — 867 — 1,266 Commercial real estate: owner occupied Internal Grade 1-3 (Pass low risk) $ 21,049 $ 113,747 $ 65,252 $ 22,938 $ 12,294 $ 64,781 $ 5,977 $ 306,038 Internal Grade 4-7 (Pass normal risk) 162,232 189,775 87,189 81,957 88,019 61,081 15,966 686,219 Internal Grade 8-11 (Pass high risk and watch) 56,849 66,290 87,346 29,326 64,755 27,447 3,200 335,213 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 4,143 430 6,042 2,847 3,425 11,854 — 28,741 Internal Grade 14 (Substandard non-accrual) 14 868 — (4) 330 2,261 — 3,469 Commercial and industrial Internal Grade 1-3 (Pass low risk) $ 29,353 $ 27,282 $ 26,549 $ 6,945 $ 1,994 $ 2,313 $ 50,244 $ 144,680 Internal Grade 4-7 (Pass normal risk) 135,610 142,831 51,782 29,790 10,412 16,103 349,402 735,930 Internal Grade 8-11 (Pass high risk and watch) 88,284 67,652 53,440 18,638 3,141 7,918 274,261 513,334 Internal Grade 12 (Special mention) 86 — — 453 — — 2,654 3,193 Internal Grade 13 (Substandard accrual) 671 2,972 7,150 3,839 3,917 3,160 4,248 25,957 Internal Grade 14 (Substandard non-accrual) 308 85 7,882 — 3,500 303 — 12,078 Construction and land development Internal Grade 1-3 (Pass low risk) $ 12,673 $ 15,535 $ 1,341 $ 889 $ 1,047 $ 2,984 $ 1 $ 34,470 Internal Grade 4-7 (Pass normal risk) 272,658 210,391 63,325 13,191 3,252 1,947 48,263 613,027 Internal Grade 8-11 (Pass high risk and watch) 148,054 74,383 16,404 325 — 1,479 15,352 255,997 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 1,019 — — — — 5,262 — 6,281 Internal Grade 14 (Substandard non-accrual) — — — — — 1 — 1 Construction and land development - individuals FICO less than 620 $ — $ — $ — $ — $ — $ — $ — $ — FICO between 620 and 720 781 223 — — 981 — — 1,985 FICO greater than 720 14,969 3,933 54 — — — — 18,956 Substandard non-accrual — — — — — — — — Other (1) 4,198 — — — — — — 4,198 1-4 family residential FICO less than 620 $ 1,184 $ 733 $ 779 $ 541 $ 3,538 $ 21,699 $ 266 $ 28,740 FICO between 620 and 720 6,077 13,805 8,530 5,265 6,013 26,482 3,705 69,877 FICO greater than 720 334,135 806,223 109,048 46,361 29,057 48,786 3,171 1,376,781 Substandard non-accrual — — (1) — 260 12,589 — 12,848 Other (1) 78,521 18,571 1,616 2,403 577 4,082 1,254 107,024 Consumer FICO less than 620 $ 1,349 $ 332 $ 123 $ 48 $ 7 $ 15 $ 351 $ 2,225 FICO between 620 and 720 3,226 1,736 575 453 35 378 1,923 8,326 FICO greater than 720 5,843 1,705 1,283 413 85 1 3,201 12,531 Substandard non-accrual — — — — — 16 — 16 Other (1) 4,296 1,326 464 89 5 18 143 6,341 Total loans with credit quality measures $ 1,936,212 $ 2,330,570 $ 921,795 $ 446,184 $ 355,208 $ 475,518 $ 843,220 $ 7,308,707 Commercial and industrial (mortgage warehouse lending) $ 223,028 Commercial and industrial (Paycheck Protection Program loans) $ 1,097 Commercial and industrial (loans accounted for at fair value) $ 8,912 Broker-Dealer (margin loans and correspondent receivables) $ 402,502 Total loans held for investment $ 7,944,246 (1) Loans classified in this category were assigned a FICO score for credit modeling purposes. |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Allowance for Credit Losses | |
Schedule of changes in the allowance for loan losses by portfolio segment | Changes in the allowance for credit losses for loans held for investment, distributed by portfolio segment, are shown below (in thousands). Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Three Months Ended September 30, 2022 Period Credit Losses Charged Off Loans Period Commercial real estate $ 63,719 $ (560) $ — $ 41 $ 63,200 Commercial and industrial 19,836 (1,002) (3,096) 370 16,108 Construction and land development 4,996 (228) — — 4,768 1-4 family residential 5,554 1,049 (14) 23 6,612 Consumer 542 91 (149) 90 574 Broker-dealer 651 (130) — — 521 Total $ 95,298 $ (780) $ (3,259) $ 524 $ 91,783 Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Nine Months Ended September 30, 2022 Period Credit Losses Charged Off Loans Period Commercial real estate $ 59,354 $ 3,762 $ — $ 84 $ 63,200 Commercial and industrial 21,982 (1,681) (6,197) 2,004 16,108 Construction and land development 4,674 94 — — 4,768 1-4 family residential 4,589 2,014 (62) 71 6,612 Consumer 578 136 (361) 221 574 Broker-dealer 175 346 — — 521 Total $ 91,352 $ 4,671 $ (6,620) $ 2,380 $ 91,783 Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Three Months Ended September 30, 2021 Period Credit Losses Charged Off Loans Period Commercial real estate $ 77,633 $ (8,993) $ (124) $ 19 $ 68,535 Commercial and industrial 27,866 2,398 (317) 598 30,545 Construction and land development 5,185 (85) — — 5,100 1-4 family residential 3,659 946 (87) 20 4,538 Consumer 592 (41) (73) 26 504 Broker-dealer 334 (44) — — 290 Total $ 115,269 $ (5,819) $ (601) $ 663 $ 109,512 Balance, Provision for Recoveries on Balance, Beginning of (Reversal of) Loans Charged Off End of Nine Months Ended September 30, 2021 Period Credit Losses Charged Off Loans Period Commercial real estate $ 109,629 $ (41,037) $ (310) $ 253 $ 68,535 Commercial and industrial 27,703 2,848 (1,738) 1,732 30,545 Construction and land development 6,677 (1,577) — — 5,100 1-4 family residential 3,946 358 (248) 482 4,538 Consumer 876 (317) (226) 171 504 Broker-dealer 213 77 — — 290 Total $ 149,044 $ (39,648) $ (2,522) $ 2,638 $ 109,512 |
Schedule of changes in the allowance for credit losses for loans with off-balance sheet credit exposures | Changes in the allowance for credit losses for loans with off-balance sheet credit exposures are shown below (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 6,931 $ 7,981 $ 5,880 $ 8,388 Other noninterest expense 87 (1,183) 1,138 (1,590) Balance, end of period $ 7,018 $ 6,798 $ 7,018 $ 6,798 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Mortgage Servicing Rights | |
Schedule of change in fair value of the Company's MSR asset | The following tables present the changes in fair value of the Company’s MSR asset and other information related to the serviced portfolio (dollars in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 121,688 $ 124,497 $ 86,990 $ 143,742 Additions 29,340 20,252 47,850 70,368 Sales — (31,366) (1,876) (116,000) Changes in fair value: Due to changes in model inputs or assumptions (1) 7,942 3,525 32,035 32,199 Due to customer payoffs (2,431) (5,977) (8,460) (19,378) Balance, end of period $ 156,539 $ 110,931 $ 156,539 $ 110,931 September 30, December 31, 2022 2021 Mortgage loans serviced for others (2) $ 8,277,325 $ 6,355,927 MSR asset as a percentage of serviced mortgage loans 1.89 % 1.37 % (1) Primarily represents normal customer payments, the impact of changes in interest rates, changes in discount rates and prepayment speed assumptions, and the refinement of other MSR model assumptions. Included in the three and nine months ended September 30, 2021 are MSR asset fair value adjustments totaling $3.3 million and $22.2 million, respectively, which reflect the difference between the MSR carrying value and the sales price reflected in the letter of intent to sell the applicable MSR assets. (2) Represents unpaid principal balance of mortgage loans serviced for others. |
Schedule of key assumptions used in measuring the fair value of the Company's MSR | September 30, December 31, 2022 2021 Weighted average constant prepayment rate 8.06 % 10.02 % Weighted average discount rate 12.09 % 14.32 % Weighted average life (in years) 8.4 7.1 |
Schedule of sensitivity analysis of fair value of the Company's MSR to certain key assumptions | A sensitivity analysis of the fair value of the Company’s MSR asset to certain key assumptions is presented in the following table (in thousands). September 30, December 31, 2022 2021 Constant prepayment rate: Impact of 10% adverse change $ (3,027) $ (2,603) Impact of 20% adverse change (5,869) (5,315) Discount rate: Impact of 10% adverse change (4,439) (4,070) Impact of 20% adverse change (8,466) (7,753) |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deposits | |
Summary of deposits | Deposits are summarized as follows (in thousands). September 30, December 31, 2022 2021 Noninterest-bearing demand $ 4,546,816 $ 4,577,183 Interest-bearing: Demand accounts 3,456,342 3,270,522 Brokered - demand 5,631 114,393 Money market 2,149,812 3,433,341 Brokered - money market 8,717 98,614 Savings 316,788 345,795 Time 852,431 962,752 Brokered - time 15,477 15,477 $ 11,352,014 $ 12,818,077 |
Short-term Borrowings (Tables)
Short-term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Short-term borrowings | |
Schedule of short-term borrowings | Short-term borrowings are summarized as follows (in thousands). September 30, December 31, 2022 2021 Federal funds purchased $ 439,200 $ 171,925 Securities sold under agreements to repurchase 302,299 191,547 Federal Home Loan Bank — — Short-term bank loans 7,000 142,000 Commercial paper 193,810 353,972 $ 942,309 $ 859,444 |
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | |
Short-term borrowings | |
Schedule of short-term borrowings | Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). Nine Months Ended September 30, 2022 2021 Average balance during the period $ 530,180 $ 328,853 Average interest rate during the period 1.36 % 0.37 % September 30, December 31, 2022 2021 Average interest rate at end of period 2.91 % 0.31 % Securities underlying the agreements at end of period: Carrying value $ 343,655 $ 191,483 Estimated fair value $ 362,237 $ 205,734 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable | |
Schedule of notes payable | Notes payable consisted of the following (in thousands). September 30, December 31, 2022 2021 Senior Notes due April 2025, net of discount of $746 and $886, respectively $ 149,253 $ 149,114 Subordinated Notes due May 2030, net of discount of $634 and $704, respectively 49,366 49,296 Subordinated Notes due May 2035, net of discount of $2,084 and $2,220, respectively 147,916 147,780 Ventures Management lines of credit 43,819 41,714 $ 390,354 $ 387,904 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to finance leases is as follows (in thousands). September 30, December 31, 2022 2021 Finance leases: Premises and equipment $ 7,780 $ 7,780 Accumulated depreciation (5,800) (5,358) Premises and equipment, net $ 1,980 $ 2,422 |
Schedule of components of lease costs | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost $ 9,121 $ 9,727 $ 28,078 $ 29,130 Less operating lease and sublease income (633) (343) (1,762) (1,024) Net operating lease cost $ 8,488 $ 9,384 $ 26,316 $ 28,106 Finance lease cost: Amortization of ROU assets $ 147 $ 147 $ 442 $ 442 Interest on lease liabilities 118 129 363 396 Total finance lease cost $ 265 $ 276 $ 805 $ 838 |
Schedule of supplemental cash flow information | Supplemental cash flow information related to leases is as follows (in thousands). Nine Months Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 27,387 $ 28,160 Operating cash flows from finance leases 366 396 Financing cash flows from finance leases 563 509 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 12,336 $ 37,086 Finance leases — — |
Schedule of lease terms and discount rates | Information regarding the lease terms and discount rates of the Company’s leases is as follows. September 30, 2022 December 31, 2021 Weighted Average Weighted Average Remaining Lease Weighted Average Remaining Lease Weighted Average Lease Classification Term (Years) Discount Rate Term (Years) Discount Rate Operating 5.6 3.85 % 5.9 3.89 % Finance 4.1 4.88 % 4.8 4.84 % |
Schedule of future minimum lease payments under operating leases | Future minimum lease payments under lease agreements as of September 30, 2022, are presented below (in thousands). Operating Leases Finance Leases 2022 $ 1,462 $ 312 2023 33,554 1,280 2024 25,309 1,163 2025 18,642 886 2026 15,050 813 Thereafter 40,636 598 Total minimum lease payments 134,653 5,052 Less amount representing interest (14,018) (1,448) Lease liabilities $ 120,635 $ 3,604 |
Schedule of future minimum lease payments under finance leases | Operating Leases Finance Leases 2022 $ 1,462 $ 312 2023 33,554 1,280 2024 25,309 1,163 2025 18,642 886 2026 15,050 813 Thereafter 40,636 598 Total minimum lease payments 134,653 5,052 Less amount representing interest (14,018) (1,448) Lease liabilities $ 120,635 $ 3,604 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Schedule of rollforward of claims activity for loans put-back to the mortgage origination segment | The following tables provide for a rollforward of claims activity for loans put-back to the mortgage origination segment based upon an alleged breach of a representation or warranty with respect to a loan sold and related indemnification liability reserve activity (in thousands). Representation and Warranty Specific Claims Activity - Origination Loan Balance Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 28,715 $ 32,763 $ 31,407 $ 30,085 Claims made 14,247 5,412 42,305 19,100 Claims resolved with no payment (4,378) (4,217) (12,352) (9,088) Repurchases (11,320) (3,981) (34,096) (9,238) Indemnification payments — (267) — (1,149) Balance, end of period $ 27,264 $ 29,710 $ 27,264 $ 29,710 Indemnification Liability Reserve Activity Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Balance, beginning of period $ 23,750 $ 26,372 $ 27,424 $ 21,531 Additions for new sales 608 2,702 2,123 8,568 Repurchases (1,591) (2,687) (6,367) (3,086) Early payment defaults (90) (116) (212) (152) Indemnification payments — (78) — (342) Change in reserves for loans sold in prior years (553) (220) (844) (546) Balance, end of period $ 22,124 $ 25,973 $ 22,124 $ 25,973 September 30, December 31, 2022 2021 Reserve for Indemnification Liability: Specific claims $ 394 $ 345 Incurred but not reported claims 21,730 27,079 Total $ 22,124 $ 27,424 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Schedule of nonvested RSU activity | The following table summarizes information about nonvested restricted stock unit (“RSU”) activity for the nine months ended September 30, 2022 (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value Balance, December 31, 2021 1,869 $ 23.16 Granted 548 $ 33.25 Vested/Released (614) $ 19.30 Forfeited (136) $ 24.50 Balance, September 30, 2022 1,667 $ 27.79 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Regulatory Matters | |
Schedule of comparison of the Plain Capital's and Hilltop's consolidated actual capital amounts and ratios to the regulatory minimum requirements and the Bank's regulatory minimum capital requirements and the Bank's regulatory minimum capital requirements needed to qualify as a well-capitalized institution without giving effect to the final Basel III capital rules adopted by the Federal Reserve Board | The following table shows PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including conservation buffer ratio in effect at the end of the period (dollars in thousands). Based on actual capital amounts and ratios shown in the following table, PlainsCapital’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. Actual capital amounts and ratios as of September 30, 2022 reflect PlainsCapital’s and Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period. Minimum Capital Requirements Including Conservation To Be Well September 30, 2022 December 31, 2021 Buffer Capitalized Amount Ratio Amount Ratio Ratio Ratio Tier 1 capital (to average assets): PlainsCapital $ 1,404,288 10.29 % $ 1,469,695 10.20 % 4.0 % 5.0 % Hilltop 1,881,289 11.41 % 2,262,356 12.58 % 4.0 % N/A Common equity Tier 1 capital PlainsCapital 1,404,288 14.68 % 1,469,695 16.00 % 7.0 % 6.5 % Hilltop 1,881,289 17.45 % 2,262,356 21.22 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,404,288 14.68 % 1,469,695 16.00 % 8.5 % 8.0 % Hilltop 1,881,289 17.45 % 2,262,356 21.22 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,486,989 15.54 % 1,540,100 16.77 % 10.5 % 10.0 % Hilltop 2,163,815 20.07 % 2,532,008 23.75 % 10.5 % N/A |
Schedule of net capital position | At September 30, 2022, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). Momentum Hilltop Independent Securities Network Net capital $ 198,954 $ 3,842 Less: required net capital 9,313 250 Excess net capital $ 189,641 $ 3,592 Net capital as a percentage of aggregate debit items 42.7 % Net capital in excess of 5% aggregate debit items $ 175,672 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Financial Instruments | |
Schedule of changes in fair value of derivatives | Changes in the fair value of derivatives are presented in the following table (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Increase (decrease) in fair value of derivatives during period: PrimeLending $ 2,276 $ 780 $ (10,975) $ 555 Hilltop Broker-Dealers 14,240 11,427 23,819 (3,845) Bank 7 7 53 26 |
Schedule of derivative positions | Derivative positions are presented in the following table (in thousands). September 30, 2022 December 31, 2021 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments (not designated as hedges): IRLCs $ 1,131,664 $ (16,729) $ 1,283,152 $ 25,489 Commitments to purchase MBSs 1,353,969 (27,946) 1,575,264 (674) Commitments to sell MBSs 3,150,790 71,201 3,314,173 (355) Interest rate swaps 36,317 2,976 68,413 (1,949) U.S. Treasury bond futures and options (1) 274,000 — 247,800 — Eurodollar and other futures (1) 2,964,000 — 2,061,800 — Credit default swaps 1,000 5 7,000 (15) Derivative instruments (designated as hedges): Interest rate swaps designated as cash flow hedges $ 415,000 $ 22,675 $ 190,000 $ 603 Interest rate swaps designated as fair value hedges (2) 340,323 44,322 221,232 3,207 (1) Changes in the fair value of these contracts are settled daily with the respective counterparties of PrimeLending and the Hilltop Broker-Dealers. (2) The Company designated $340.3 million and $221.2 million as the hedged amount (from a closed portfolio of prepayable available for sale securities and loans held for investment with a carrying value of $296.0 million and $218.0 million as of September 30, 2022 and December 31, 2021, respectively), of which, a subset of these hedges are in portfolio layer hedging relationships. The cumulative basis adjustment included in the carrying value of the hedged items totaled $44.3 million and $3.2 million as of September 30, 2022 and December 31, 2021, respectively. |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Offsetting | |
Schedule of the assets subject to an enforceable master netting arrangement or repurchase agreements | The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Assets Cash of Recognized Offset in the Presented in the Financial Collateral Net Assets Balance Sheet Balance Sheet Instruments Pledged Amount September 30, 2022 Securities borrowed: Institutional counterparties $ 1,182,934 $ — $ 1,182,934 $ (1,126,566) $ — $ 56,368 Interest rate swaps: Institutional counterparties 2,976 — 2,976 (2,953) — 23 Credit default swaps: Institutional counterparties 5 — 5 (5) — — Reverse repurchase agreements: Institutional counterparties 145,365 — 145,365 (139,187) — 6,178 Forward MBS derivatives: Institutional counterparties 72,204 (686) 71,518 (39,838) — 31,680 $ 1,403,484 $ (686) $ 1,402,798 $ (1,308,549) $ — $ 94,249 December 31, 2021 Securities borrowed: Institutional counterparties $ 1,518,372 $ — $ 1,518,372 $ (1,445,590) $ — $ 72,782 Reverse repurchase agreements: Institutional counterparties 118,262 — 118,262 (118,262) — — Forward MBS derivatives: Institutional counterparties 2,955 (1,773) 1,182 (744) — 438 $ 1,639,589 $ (1,773) $ 1,637,816 $ (1,564,596) $ — $ 73,220 |
Schedule of the liabilities subject to an enforceable master netting arrangement or repurchase agreements | Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Liabilities Cash of Recognized Offset in the Presented in the Financial Collateral Net Liabilities Balance Sheet Balance Sheet Instruments Pledged Amount September 30, 2022 Securities loaned: Institutional counterparties $ 1,072,408 $ — $ 1,072,408 $ (1,017,959) $ — $ 54,449 Repurchase agreements: Institutional counterparties 302,030 — 302,030 (319,453) — (17,423) Forward MBS derivatives: Institutional counterparties 28,264 — 28,264 (28,264) — — $ 1,402,702 $ — $ 1,402,702 $ (1,365,676) $ — $ 37,026 December 31, 2021 Securities loaned: Institutional counterparties $ 1,432,196 $ — $ 1,432,196 $ (1,359,850) $ — $ 72,346 Interest rate swaps: Institutional counterparties 1,949 — 1,949 (1,919) — 30 Credit default swaps: Institutional counterparties 15 — 15 (15) — — Repurchase agreements: Institutional counterparties 191,483 — 191,483 (205,734) — (14,251) Forward MBS derivatives: Institutional counterparties 2,211 — 2,211 (2,211) — — $ 1,627,854 $ — $ 1,627,854 $ (1,569,729) $ — $ 58,125 |
Schedule of contractual maturities of repurchase agreements and secured borrowing transactions | The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both September 30, 2022 and December 31, 2021. Remaining Contractual Maturities Overnight and Greater Than September 30, 2022 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities 182,041 53,624 61,715 4,650 302,030 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,072,295 — — — 1,072,295 Total $ 1,254,449 $ 53,624 $ 61,715 $ 4,650 $ 1,374,438 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,374,438 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2021 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities $ 93,651 $ — $ 86,357 $ 11,475 $ 191,483 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,432,083 — — — 1,432,083 Total $ 1,525,847 $ — $ 86,357 $ 11,475 $ 1,623,679 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,623,679 Amount related to agreements not included in offsetting disclosure above $ — |
Broker-Dealer and Clearing Or_2
Broker-Dealer and Clearing Organization Receivables and Payables (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Broker-Dealer and Clearing Organization Receivables and Payables | |
Schedule of broker-dealer and clearing organization receivables and payables | Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). September 30, December 31, 2022 2021 Receivables: Securities borrowed $ 1,182,934 $ 1,518,372 Securities failed to deliver 14,625 5,664 Trades in process of settlement 47,753 144,773 Other 9,740 4,137 $ 1,255,052 $ 1,672,946 Payables: Securities loaned $ 1,072,408 $ 1,432,196 Correspondents 20,700 20,571 Securities failed to receive 78,316 18,808 Other 4,732 5,725 $ 1,176,156 $ 1,477,300 |
Segment and Related Informati_2
Segment and Related Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment and Related Information | |
Schedule of information about the segment revenues, operating results, goodwill, and assets of entity's reportable segments | The following tables present certain information about reportable business segment revenues, operating results, goodwill and assets (in thousands). Mortgage All Other and Hilltop Three Months Ended September 30, 2022 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 110,939 $ 13,386 $ (2,939) $ (3,276) $ 5,376 $ 123,486 Provision for (reversal of) credit losses (650) (130) — — — (780) Noninterest income 12,200 100,798 98,200 1,809 (6,032) 206,975 Noninterest expense 60,160 96,843 118,345 14,034 (644) 288,738 Income (loss) before taxes $ 63,629 $ 17,471 $ (23,084) $ (15,501) $ (12) $ 42,503 Mortgage All Other and Hilltop Nine Months Ended September 30, 2022 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 304,269 $ 37,481 $ (6,066) $ (9,856) $ 9,705 $ 335,533 Provision for (reversal of) credit losses 4,325 346 — — — 4,671 Noninterest income 37,438 249,139 381,477 5,655 (11,033) 662,676 Noninterest expense 175,921 268,307 386,372 44,388 (1,357) 873,631 Income (loss) before taxes $ 161,461 $ 17,967 $ (10,961) $ (48,589) $ 29 $ 119,907 Mortgage All Other and Hilltop Three Months Ended September 30, 2021 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 99,978 $ 10,427 $ (3,503) $ (4,341) $ 2,529 $ 105,090 Provision for (reversal of) credit losses (5,775) (44) — — — (5,819) Noninterest income 11,727 116,143 242,270 757 (2,952) 367,945 Noninterest expense 54,567 109,193 176,587 15,355 (528) 355,174 Income (loss) before taxes $ 62,913 $ 17,421 $ 62,180 $ (18,939) $ 105 $ 123,680 Mortgage All Other and Hilltop Nine Months Ended September 30, 2021 Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 309,330 $ 31,623 $ (16,554) $ (13,720) $ 8,009 $ 318,688 Provision for (reversal of) credit losses (39,725) 77 — — — (39,648) Noninterest income 33,293 298,229 794,679 8,140 (8,912) 1,125,429 Noninterest expense 167,869 287,831 573,884 37,015 (1,395) 1,065,204 Income (loss) before taxes $ 214,479 $ 41,944 $ 204,241 $ (42,595) $ 492 $ 418,561 Mortgage All Other and Hilltop Banking Broker-Dealer Origination Corporate Eliminations Consolidated September 30, 2022 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 13,455,679 $ 2,866,990 $ 1,405,712 $ 2,453,933 $ (3,567,023) $ 16,615,291 December 31, 2021 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 14,944,249 $ 3,673,346 $ 2,207,822 $ 2,940,670 $ (5,077,007) $ 18,689,080 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings per Common Share | |
Schedule of the computation of basic and diluted earnings per common share | The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Basic earnings per share: Income attributable to Hilltop $ 32,068 $ 92,906 $ 87,578 $ 312,310 Weighted average shares outstanding - basic 64,552 80,109 72,400 81,306 Basic earnings per common share: $ 0.50 $ 1.16 $ 1.21 $ 3.84 Diluted earnings per share: Income attributable to Hilltop $ 32,068 $ 92,906 $ 87,578 $ 312,310 Weighted average shares outstanding - basic 64,552 80,109 72,400 81,306 Effect of potentially dilutive securities 117 433 157 457 Weighted average shares outstanding - diluted 64,669 80,542 72,557 81,763 Diluted earnings per common share $ 0.50 $ 1.15 $ 1.21 $ 3.82 |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies - Basis of Presentation, Ownership (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | |
Basis of Presentation | ||
Number of primary business units | item | 2 | |
Redemption of junior subordinated debentures | $ 636,394 | $ 792,893 |
PCC | ||
Basis of Presentation | ||
Ownership percentage | 100% | |
Securities Holdings | ||
Basis of Presentation | ||
Ownership percentage | 100% | |
HTH Hillcrest Project LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100% | |
Hilltop Investments I, LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100% | |
PCC | Plains Capital Bank | ||
Basis of Presentation | ||
Ownership percentage | 100% | |
PCC | Hilltop Opportunity Partners LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100% | |
PCC | PCC Statutory Trusts | ||
Basis of Presentation | ||
Ownership percentage | 100% | |
Redemption of junior subordinated debentures | $ 67,000 | |
Plains Capital Bank | Prime Lending | ||
Basis of Presentation | ||
Ownership percentage | 100% | |
Prime Lending | Prime Lending Ventures Management LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100% | |
Hilltop Investments I, LLC | Hillcrest Land LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 50% |
Fair Value Measurements - FV Op
Fair Value Measurements - FV Option (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Measurements | ||
Mortgage loans held for sale, fair value | $ 863.4 | $ 1,780 |
Mortgage loans held for sale, unpaid principal balance | $ 882.6 | $ 1,730 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financial assets: | ||
Trading securities | $ 641,864 | $ 647,998 |
Available for sale securities | 1,584,724 | 2,130,568 |
Equity securities | 209 | 250 |
MSR asset | 156,539 | 86,990 |
Financial liabilities: | ||
Securities sold, not yet purchased | 99,515 | 96,586 |
Recurring | ||
Financial assets: | ||
Trading securities | 641,864 | 647,998 |
Available for sale securities | 1,584,724 | 2,130,568 |
Equity securities | 209 | 250 |
Loans held for sale | 863,427 | 1,782,591 |
Loans held for investment | 8,912 | |
Derivative assets | 141,536 | 48,122 |
MSR asset | 156,539 | 86,990 |
Financial liabilities: | ||
Securities sold, not yet purchased | 99,515 | 96,586 |
Derivative liabilities | 45,032 | 21,816 |
Recurring | Level 1 | ||
Financial assets: | ||
Trading securities | 5,259 | 8,628 |
Equity securities | 209 | 250 |
Financial liabilities: | ||
Securities sold, not yet purchased | 65,370 | 45,973 |
Recurring | Level 2 | ||
Financial assets: | ||
Trading securities | 636,605 | 639,370 |
Available for sale securities | 1,584,724 | 2,130,568 |
Loans held for sale | 826,013 | 1,734,875 |
Derivative assets | 141,536 | 48,122 |
Financial liabilities: | ||
Securities sold, not yet purchased | 34,145 | 50,613 |
Derivative liabilities | 45,032 | 21,816 |
Recurring | Level 3 | ||
Financial assets: | ||
Loans held for sale | 37,414 | 47,716 |
Loans held for investment | 8,912 | |
MSR asset | $ 156,539 | $ 86,990 |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward, Level 3 (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Asset balance, beginning of period | $ 172,447 | $ 195,930 | $ 134,706 | $ 215,558 |
Purchases/Additions | 47,352 | 39,069 | 95,915 | 120,641 |
Sales/Reductions | (19,594) | (53,573) | (46,780) | (167,718) |
Transfers to (from) Level 3 | (251) | (2,291) | 5,587 | (4,099) |
Total gains or losses (realized or unrealized): | ||||
Included in Net Income | 2,911 | 4,315 | 13,437 | 19,068 |
Asset balance, end of period | 202,865 | 183,450 | 202,865 | 183,450 |
Loans Held for Sale | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Asset balance, beginning of period | 41,732 | 71,433 | 47,716 | 71,816 |
Purchases/Additions | 18,012 | 18,817 | 38,454 | 50,273 |
Sales/Reductions | (19,594) | (22,207) | (44,342) | (51,718) |
Transfers to (from) Level 3 | (251) | (2,291) | 5,587 | (4,099) |
Total gains or losses (realized or unrealized): | ||||
Included in Net Income | (2,485) | 6,767 | (10,001) | 6,247 |
Asset balance, end of period | 37,414 | 72,519 | 37,414 | 72,519 |
Loans Held For Investment | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Asset balance, beginning of period | 9,027 | |||
Purchases/Additions | 9,611 | |||
Sales/Reductions | (562) | |||
Total gains or losses (realized or unrealized): | ||||
Included in Net Income | (115) | (137) | ||
Asset balance, end of period | 8,912 | 8,912 | ||
MSR asset | ||||
Rollforward for financial instruments measured at fair value using Level 3 inputs | ||||
Asset balance, beginning of period | 121,688 | 124,497 | 86,990 | 143,742 |
Purchases/Additions | 29,340 | 20,252 | 47,850 | 70,368 |
Sales/Reductions | (31,366) | (1,876) | (116,000) | |
Total gains or losses (realized or unrealized): | ||||
Included in Net Income | 5,511 | (2,452) | 23,575 | 12,821 |
Asset balance, end of period | $ 156,539 | $ 110,931 | $ 156,539 | $ 110,931 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3, Inputs, Recurring (Details) - Level 3 - Recurring | Sep. 30, 2022 item | Dec. 31, 2021 item |
Loans Held for Sale | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Valuation Technique [Extensible List] | us-gaap:MarketApproachValuationTechniqueMember | us-gaap:MarketApproachValuationTechniqueMember |
Loans Held-for-sale, Measurement Input [Extensible List] | Projected Price | Projected Price |
Loans Held for Sale | Projected Price | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.91 | 0.95 |
Loans Held for Sale | Projected Price | Minimum | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.90 | 0.94 |
Loans Held for Sale | Projected Price | Maximum | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.92 | 0.95 |
Loans Held For Investment | Discount Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | |
Loans Held-for-sale, Measurement Input | 0.1200 | |
MSR asset | Constant Prepayment Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Servicing Asset, Measurement Input | 0.0806 | 0.1002 |
MSR asset | Discount Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Measurement Input | 0.1209 | 0.1432 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in FV (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value Option | ||||
Net Gains (Losses) | $ 57,998 | $ 203,152 | $ 266,435 | $ 669,857 |
Other Noninterest Income | 39,910 | 41,955 | 79,124 | 110,856 |
Transfers of assets from level 1 to level 2 | 0 | 0 | 0 | 0 |
Transfers of assets from level 2 to level 1 | 0 | 0 | 0 | 0 |
Transfers of liabilities from level 1 to level 2 | 0 | 0 | 0 | 0 |
Transfers of liabilities from level 2 to level 1 | 0 | 0 | 0 | 0 |
Loans Held for Sale | ||||
Fair Value Option | ||||
Net Gains (Losses) | (37,526) | (32,694) | (73,520) | (55,211) |
Total Changes in Fair Value | (37,526) | (32,694) | (73,520) | (55,211) |
Loans Held For Investment | ||||
Fair Value Option | ||||
Net Gains (Losses) | (377) | (660) | ||
Total Changes in Fair Value | (377) | (660) | ||
MSR asset | ||||
Fair Value Option | ||||
Net Gains (Losses) | 5,511 | (2,452) | 23,575 | 12,821 |
Total Changes in Fair Value | $ 5,511 | $ (2,452) | $ 23,575 | $ 12,821 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financial assets: | ||
Held to maturity securities | $ 792,559 | $ 276,296 |
Loans held for investment, net | 7,852,463 | 7,788,552 |
Broker-dealer and clearing organization receivables | 1,255,052 | 1,672,946 |
Financial liabilities: | ||
Broker-dealer and clearing organization payables | 1,176,156 | 1,477,300 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 1,778,247 | 2,823,523 |
Assets segregated for regulatory purposes | 109,358 | 221,740 |
Securities purchased under agreements to resell | 145,365 | 118,262 |
Held to maturity securities | 889,452 | 267,684 |
Loans held for sale | 140,178 | 95,599 |
Loans held for investment, net | 7,843,551 | 7,788,552 |
Broker-dealer and clearing organization receivables | 1,255,052 | 1,672,946 |
Other assets | 71,365 | 73,041 |
Financial liabilities: | ||
Deposits | 11,352,014 | 12,818,077 |
Broker-dealer and clearing organization payables | 1,176,156 | 1,477,300 |
Short-term borrowings | 942,309 | 859,444 |
Debt | 390,354 | 387,904 |
Other liabilities | 9,198 | 3,944 |
Estimate of Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 1,778,247 | 2,823,523 |
Assets segregated for regulatory purposes | 109,358 | 221,740 |
Securities purchased under agreements to resell | 145,365 | 118,262 |
Held to maturity securities | 792,559 | 276,296 |
Loans held for sale | 142,325 | 95,599 |
Loans held for investment, net | 7,684,034 | 7,999,925 |
Broker-dealer and clearing organization receivables | 1,255,052 | 1,672,946 |
Other assets | 71,365 | 73,041 |
Financial liabilities: | ||
Deposits | 11,333,099 | 12,821,138 |
Broker-dealer and clearing organization payables | 1,176,156 | 1,477,300 |
Short-term borrowings | 942,309 | 859,444 |
Debt | 389,632 | 387,904 |
Other liabilities | 9,198 | 3,944 |
Estimate of Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 1,778,247 | 2,823,523 |
Assets segregated for regulatory purposes | 109,358 | 221,740 |
Estimate of Fair Value | Level 2 | ||
Financial assets: | ||
Securities purchased under agreements to resell | 145,365 | 118,262 |
Held to maturity securities | 792,559 | 276,296 |
Loans held for sale | 85,137 | 95,599 |
Loans held for investment, net | 402,502 | 733,193 |
Broker-dealer and clearing organization receivables | 1,255,052 | 1,672,946 |
Other assets | 69,699 | 71,290 |
Financial liabilities: | ||
Deposits | 11,333,099 | 12,821,138 |
Broker-dealer and clearing organization payables | 1,176,156 | 1,477,300 |
Short-term borrowings | 942,309 | 859,444 |
Debt | 389,632 | 387,904 |
Other liabilities | 9,198 | 3,944 |
Estimate of Fair Value | Level 3 | ||
Financial assets: | ||
Loans held for sale | 57,188 | |
Loans held for investment, net | 7,281,532 | 7,266,732 |
Other assets | $ 1,666 | $ 1,751 |
Fair Value Measurements - Adjus
Fair Value Measurements - Adjustments to the carrying value of investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Adjustments to the carrying value of these investments | |||||
Balance, beginning of period | $ 28,183 | $ 26,988 | $ 16,817 | $ 22,844 | |
Additional investments | 11,000 | ||||
Upward adjustments | 234 | 122 | 679 | 6,006 | |
Impairments and downward adjustments | (1,013) | (253) | (1,092) | (1,017) | |
Dispositions | (10,390) | (11,366) | |||
Balance, end of period | 27,404 | $ 16,467 | 27,404 | $ 16,467 | |
Other Assets | |||||
Equity Securities without Readily Determinable Fair Value | |||||
Other equity investments | $ 59,200 | $ 59,200 | $ 54,000 |
Securities - Trading Securities
Securities - Trading Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of fair value of trading securities | ||
Debt Securities, Trading | $ 641,864 | $ 647,998 |
Investment-related Liabilities | ||
Securities sold, not yet purchased, at fair value | 99,515 | 96,586 |
US Treasury Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 309 | 3,728 |
Bonds | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 14,255 | 3,410 |
Residential Mortgage Backed Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 152,513 | 152,093 |
Collateralized Mortgage Obligations | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 171,241 | 126,389 |
Corporate Debt Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 63,626 | 60,671 |
US States and Political Subdivisions Debt Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 200,945 | 285,376 |
Private-label securitized product | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 13,690 | 11,377 |
Other | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | $ 25,285 | $ 4,954 |
Securities - AFS and HTM, Amort
Securities - AFS and HTM, Amortized Cost and FV (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Available for sale | ||||
Amortized cost | $ 1,753,205 | $ 2,148,635 | ||
Unrealized Gains | 406 | 13,570 | ||
Unrealized Losses | (168,887) | (31,637) | ||
Fair Value | 1,584,724 | 2,130,568 | ||
Held to maturity | ||||
Amortized cost | 889,452 | 267,684 | ||
Unrealized Gains | 1 | 8,615 | ||
Unrealized Losses | (96,894) | (3) | ||
Held to maturity, fair value | 792,559 | 276,296 | ||
Equity Securities | ||||
Unrealized net gains from equity securities | 100 | 200 | ||
Equity, at fair value | 209 | 250 | ||
Book value of held to maturity | 689,477 | |||
Pre-tax net unrecognized losses | 67,798 | |||
Recognized net loss on equity securities | 100 | $ 100 | ||
US Treasury Securities | ||||
Available for sale | ||||
Amortized cost | 24,958 | 14,937 | ||
Unrealized Losses | (696) | (75) | ||
Fair Value | 24,262 | 14,862 | ||
Bonds | ||||
Available for sale | ||||
Amortized cost | 115,633 | 43,448 | ||
Unrealized Gains | 315 | 838 | ||
Unrealized Losses | (814) | (153) | ||
Fair Value | 115,134 | 44,133 | ||
Residential Mortgage Backed Securities | ||||
Available for sale | ||||
Amortized cost | 474,451 | 900,084 | ||
Unrealized Gains | 20 | 7,979 | ||
Unrealized Losses | (55,751) | (9,617) | ||
Fair Value | 418,720 | 898,446 | ||
Held to maturity | ||||
Amortized cost | 308,102 | 9,892 | ||
Unrealized Gains | 400 | |||
Unrealized Losses | (34,442) | |||
Held to maturity, fair value | 273,660 | 10,292 | ||
Commercial Mortgage Backed Securities | ||||
Available for sale | ||||
Amortized cost | 199,537 | 219,460 | ||
Unrealized Gains | 367 | |||
Unrealized Losses | (34,699) | (9,128) | ||
Fair Value | 164,838 | 210,699 | ||
Held to maturity | ||||
Amortized cost | 181,259 | 145,742 | ||
Unrealized Gains | 5,311 | |||
Unrealized Losses | (15,197) | |||
Held to maturity, fair value | 166,062 | 151,053 | ||
Collateralized Mortgage Obligations | ||||
Available for sale | ||||
Amortized cost | 898,449 | 926,783 | ||
Unrealized Gains | 2,547 | |||
Unrealized Losses | (72,099) | (12,464) | ||
Fair Value | 826,350 | 916,866 | ||
Held to maturity | ||||
Amortized cost | 323,526 | 43,990 | ||
Unrealized Gains | 476 | |||
Unrealized Losses | (36,664) | |||
Held to maturity, fair value | 286,862 | 44,466 | ||
US States and Political Subdivisions Debt Securities | ||||
Available for sale | ||||
Amortized cost | 40,177 | 43,923 | ||
Unrealized Gains | 71 | 1,839 | ||
Unrealized Losses | (4,828) | (200) | ||
Fair Value | 35,420 | 45,562 | ||
Held to maturity | ||||
Amortized cost | 76,565 | 68,060 | ||
Unrealized Gains | 1 | 2,428 | ||
Unrealized Losses | (10,591) | (3) | ||
Held to maturity, fair value | $ 65,975 | $ 70,485 | ||
Agency Issued Securities | ||||
Equity Securities | ||||
Book value of held to maturity | $ 782,000 | |||
Market value of held to maturity | 708,000 | |||
Pre-tax net unrecognized losses | $ 74,000 |
Securities - AFS in an Unrealiz
Securities - AFS in an Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 283 | 147 |
Unrealized loss for twelve months or longer | item | 78 | 42 |
Total | item | 361 | 189 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 1,059,559 | $ 1,262,834 |
Unrealized loss for twelve months or longer | 451,860 | 311,828 |
Total | 1,511,419 | 1,574,662 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 79,259 | 20,376 |
Unrealized loss for twelve months or longer | 89,628 | 11,261 |
Total | $ 168,887 | $ 31,637 |
US Treasury Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 2 | 2 |
Unrealized loss for twelve months or longer | item | 1 | |
Total | item | 3 | 2 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 19,845 | $ 14,862 |
Unrealized loss for twelve months or longer | 4,417 | |
Total | 24,262 | 14,862 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 136 | 75 |
Unrealized loss for twelve months or longer | 560 | |
Total | $ 696 | $ 75 |
Bonds | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 8 | 2 |
Unrealized loss for twelve months or longer | item | 3 | 1 |
Total | item | 11 | 3 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 51,594 | $ 9,904 |
Unrealized loss for twelve months or longer | 15,493 | 6,184 |
Total | 67,087 | 16,088 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 247 | 94 |
Unrealized loss for twelve months or longer | 567 | 59 |
Total | $ 814 | $ 153 |
Residential Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 98 | 52 |
Unrealized loss for twelve months or longer | item | 26 | 17 |
Total | item | 124 | 69 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 204,950 | $ 548,392 |
Unrealized loss for twelve months or longer | 211,828 | 104,378 |
Total | 416,778 | 652,770 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 17,715 | 6,915 |
Unrealized loss for twelve months or longer | 38,036 | 2,702 |
Total | $ 55,751 | $ 9,617 |
Commercial Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 12 | 5 |
Unrealized loss for twelve months or longer | item | 7 | 14 |
Total | item | 19 | 19 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 90,402 | $ 65,636 |
Unrealized loss for twelve months or longer | 74,435 | 138,619 |
Total | 164,837 | 204,255 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 12,637 | 1,776 |
Unrealized loss for twelve months or longer | 22,062 | 7,352 |
Total | $ 34,699 | $ 9,128 |
Collateralized Mortgage Obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 112 | 72 |
Unrealized loss for twelve months or longer | item | 28 | 10 |
Total | item | 140 | 82 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 669,347 | $ 618,464 |
Unrealized loss for twelve months or longer | 141,868 | 62,647 |
Total | 811,215 | 681,111 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 45,405 | 11,316 |
Unrealized loss for twelve months or longer | 26,694 | 1,148 |
Total | $ 72,099 | $ 12,464 |
US States and Political Subdivisions Debt Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 51 | 14 |
Unrealized loss for twelve months or longer | item | 13 | |
Total | item | 64 | 14 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 23,421 | $ 5,576 |
Unrealized loss for twelve months or longer | 3,819 | |
Total | 27,240 | 5,576 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 3,119 | 200 |
Unrealized loss for twelve months or longer | 1,709 | |
Total | $ 4,828 | $ 200 |
Securities - HTM in an Unrealiz
Securities - HTM in an Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 247 | 2 |
Unrealized loss for twelve months or longer | item | 61 | 1 |
Total | item | 308 | 3 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 397,676 | $ 558 |
Unrealized loss for twelve months or longer | 392,452 | 266 |
Total | 790,128 | 824 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 43,267 | 1 |
Unrealized loss for twelve months or longer | 53,627 | 2 |
Total | $ 96,894 | $ 3 |
Residential Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 16 | |
Unrealized loss for twelve months or longer | item | 29 | |
Total | item | 45 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 78,772 | |
Unrealized loss for twelve months or longer | 194,888 | |
Total | 273,660 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 9,167 | |
Unrealized loss for twelve months or longer | 25,275 | |
Total | $ 34,442 | |
Commercial Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 30 | |
Unrealized loss for twelve months or longer | item | 1 | |
Total | item | 31 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 163,245 | |
Unrealized loss for twelve months or longer | 2,817 | |
Total | 166,062 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 14,736 | |
Unrealized loss for twelve months or longer | 461 | |
Total | $ 15,197 | |
Collateralized Mortgage Obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 28 | |
Unrealized loss for twelve months or longer | item | 28 | |
Total | item | 56 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 92,710 | |
Unrealized loss for twelve months or longer | 194,152 | |
Total | 286,862 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 9,004 | |
Unrealized loss for twelve months or longer | 27,660 | |
Total | $ 36,664 | |
US States and Political Subdivisions Debt Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 173 | 2 |
Unrealized loss for twelve months or longer | item | 3 | 1 |
Total | item | 176 | 3 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 62,949 | $ 558 |
Unrealized loss for twelve months or longer | 595 | 266 |
Total | 63,544 | 824 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 10,360 | 1 |
Unrealized loss for twelve months or longer | 231 | 2 |
Total | $ 10,591 | $ 3 |
Securities - AFS Contractual Ma
Securities - AFS Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
AFS, Amortized Cost, Rolling Maturity | ||
Due in one year or less | $ 35,135 | |
Due after one year through five years | 23,053 | |
Due after five years through ten years | 50,701 | |
Due after ten years | 71,879 | |
Total | 180,768 | |
Amortized cost | 1,753,205 | $ 2,148,635 |
AFS, Fair Value, Rolling Maturity | ||
Due in one year or less | 34,938 | |
Due after one year through five years | 21,705 | |
Due after five years through ten years | 50,043 | |
Due after ten years | 68,130 | |
Total | 174,816 | |
Fair Value | 1,584,724 | 2,130,568 |
Residential Mortgage Backed Securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 474,451 | |
Amortized cost | 474,451 | 900,084 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 418,720 | |
Fair Value | 418,720 | 898,446 |
Commercial Mortgage Backed Securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 199,537 | |
Amortized cost | 199,537 | 219,460 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 164,838 | |
Fair Value | 164,838 | 210,699 |
Collateralized Mortgage Obligations | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 898,449 | |
Amortized cost | 898,449 | 926,783 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 826,350 | |
Fair Value | $ 826,350 | $ 916,866 |
Securities - HTM Contractual Ma
Securities - HTM Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
HTM, Amortized Cost, Rolling Maturities | ||
Due in one year or less | $ 856 | |
Due after one year through five years | 801 | |
Due after five years through ten years | 23,232 | |
Due after ten years | 51,676 | |
Total | 76,565 | |
Amortized cost | 889,452 | $ 267,684 |
HTM, Fair Value, Rolling Maturities | ||
Due in one year or less | 849 | |
Due after one year through five years | 750 | |
Due after five years through ten years | 20,884 | |
Due after ten years | 43,492 | |
Total | 65,975 | |
Fair Value | 792,559 | 276,296 |
Residential Mortgage Backed Securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 308,102 | |
Amortized cost | 308,102 | 9,892 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 273,660 | |
Fair Value | 273,660 | 10,292 |
Commercial Mortgage Backed Securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 181,259 | |
Amortized cost | 181,259 | 145,742 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 166,062 | |
Fair Value | 166,062 | 151,053 |
Collateralized Mortgage Obligations | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 323,526 | |
Amortized cost | 323,526 | 43,990 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 286,862 | |
Fair Value | $ 286,862 | $ 44,466 |
Securities - Additional Informa
Securities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Securities | |||||
Realized net gains (losses) from trading securities portfolio | $ (3.2) | $ 2 | $ (7.9) | $ 21.8 | |
Realized net losses from other securities | (0.1) | ||||
Financial Instrument, Owned, Pledged Status [Extensible Enumeration] | Asset Pledged as Collateral | Asset Pledged as Collateral | Asset Pledged as Collateral | ||
Asset Pledged as Collateral | |||||
Securities | |||||
Carrying amount of securities pledged | $ 617.1 | $ 617.1 | $ 809.9 | ||
Fair value of securities pledged | 556.2 | 556.2 | $ 817.7 | ||
Hilltop Broker-Dealers | |||||
Securities | |||||
Realized net gains (losses) from trading securities portfolio | $ 16.6 | $ 17 | $ 25.6 | $ 52.1 |
Loans Held for Investment - Sum
Loans Held for Investment - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Loans | ||||||
Loans | $ 7,944,246 | $ 7,879,904 | ||||
Allowance for loan losses | (91,783) | $ (95,298) | (91,352) | $ (109,512) | $ (115,269) | $ (149,044) |
Loans held for investment, net | 7,852,463 | 7,788,552 | ||||
Commercial real estate | ||||||
Loans | ||||||
Loans | 3,313,911 | 3,042,729 | ||||
Allowance for loan losses | (63,200) | (63,719) | (59,354) | (68,535) | (77,633) | (109,629) |
Commercial and industrial | ||||||
Loans | ||||||
Loans | 1,668,209 | 1,875,420 | ||||
Allowance for loan losses | (16,108) | (19,836) | (21,982) | (30,545) | (27,866) | (27,703) |
Commercial and industrial | Loans Funded Through Paycheck Protection Program | ||||||
Loans | ||||||
Loans | 1,100 | 77,700 | ||||
Construction and Land Development | ||||||
Loans | ||||||
Loans | 934,915 | 892,783 | ||||
Allowance for loan losses | (4,768) | (4,996) | (4,674) | (5,100) | (5,185) | (6,677) |
1 - 4 family residential | ||||||
Loans | ||||||
Loans | 1,595,270 | 1,303,430 | ||||
Allowance for loan losses | (6,612) | (5,554) | (4,589) | (4,538) | (3,659) | (3,946) |
Consumer | ||||||
Loans | ||||||
Loans | 29,439 | 32,349 | ||||
Allowance for loan losses | (574) | (542) | (578) | (504) | (592) | (876) |
Broker-dealer | ||||||
Loans | ||||||
Loans | 402,502 | 733,193 | ||||
Allowance for loan losses | $ (521) | $ (651) | $ (175) | $ (290) | $ (334) | $ (213) |
Loans Held for Investment - Non
Loans Held for Investment - Non-accrual Loans (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Non-accrual loans | |||||
Non-accrual Loans With Allowance | $ 16,126,000 | $ 16,126,000 | $ 20,934,000 | ||
Non-accrual Loans With No Allowance | 13,552,000 | 13,552,000 | 26,378,000 | ||
Non-accrual loans | 29,678,000 | 29,678,000 | 47,312,000 | ||
Interest Income Recognized | $ 1,224,000 | $ 1,410,000 | $ 4,165,000 | $ 4,196,000 | |
Number of loan relationships | 3 | 3 | |||
Decrease in non-accrual status loans | $ 17,600,000 | ||||
Number of non-accrual loan additions during the period | item | 1 | ||||
Amount of non-accrual loans increase during the period, including loans previously categorized | $ 2,700,000 | ||||
Commercial real estate | Non-owner occupied | |||||
Non-accrual loans | |||||
Non-accrual Loans With Allowance | $ 1,171,000 | 1,171,000 | 413,000 | ||
Non-accrual Loans With No Allowance | 95,000 | 95,000 | 1,853,000 | ||
Non-accrual loans | 1,266,000 | 1,266,000 | 2,266,000 | ||
Interest Income Recognized | 265,000 | 76,000 | 422,000 | 204,000 | |
Decrease in non-accrual status loans | 1,000,000 | ||||
Commercial real estate | Owner occupied | |||||
Non-accrual loans | |||||
Non-accrual Loans With Allowance | 3,469,000 | 3,469,000 | 3,058,000 | ||
Non-accrual Loans With No Allowance | 1,277,000 | ||||
Non-accrual loans | 3,469,000 | 3,469,000 | 4,335,000 | ||
Interest Income Recognized | 88,000 | 345,000 | 505,000 | 574,000 | |
Commercial and industrial | |||||
Non-accrual loans | |||||
Non-accrual Loans With Allowance | 10,745,000 | 10,745,000 | 16,536,000 | ||
Non-accrual Loans With No Allowance | 1,333,000 | 1,333,000 | 5,942,000 | ||
Non-accrual loans | 12,078,000 | 12,078,000 | 22,478,000 | ||
Interest Income Recognized | 303,000 | 179,000 | 930,000 | 653,000 | |
Decrease in non-accrual status loans | 10,400,000 | ||||
Construction and Land Development | |||||
Non-accrual loans | |||||
Non-accrual Loans With Allowance | 1,000 | 1,000 | 2,000 | ||
Non-accrual loans | 1,000 | 1,000 | 2,000 | ||
Interest Income Recognized | 7,000 | 13,000 | 22,000 | 48,000 | |
1 - 4 family residential | |||||
Non-accrual loans | |||||
Non-accrual Loans With Allowance | 724,000 | 724,000 | 902,000 | ||
Non-accrual Loans With No Allowance | 12,124,000 | 12,124,000 | 17,306,000 | ||
Non-accrual loans | 12,848,000 | 12,848,000 | 18,208,000 | ||
Interest Income Recognized | 561,000 | 796,000 | 2,286,000 | 2,837,000 | |
Decrease in non-accrual status loans | 5,400,000 | ||||
1 - 4 family residential | Secured by Residential Properties [Member] | |||||
Non-accrual loans | |||||
Non-accrual loans held for sale | 4,100,000 | 4,100,000 | 2,900,000 | ||
Consumer | |||||
Non-accrual loans | |||||
Non-accrual Loans With Allowance | 16,000 | 16,000 | 23,000 | ||
Non-accrual loans | $ 16,000 | $ 16,000 | $ 23,000 | ||
Interest Income Recognized | $ 1,000 | $ (120,000) |
Loans Held for Investment - TDR
Loans Held for Investment - TDRs (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) loan | Sep. 30, 2021 loan | Sep. 30, 2022 USD ($) loan | Sep. 30, 2021 USD ($) loan | |
TDRs, Non-covered loans | ||||
Number of TDR loans granted | loan | 0 | 0 | 3 | 1 |
TDR at extension | $ 3,600,000 | $ 700,000 | ||
TDR modifications, end of period | 2,900,000 | |||
Unadvanced commitments to borrowers | $ 0 | $ 0 | ||
TDR with payment at least 30 days past due | $ 100,000 | |||
Number of TDRs granted in preceding twelve months for which payment was at least 30 days past due | loan | 0 | |||
AB Note | Minimum | Plains Capital Bank | ||||
TDRs, Non-covered loans | ||||
Number of loans into which a single loan may be reconfigured | loan | 2 |
Loans Held for Investment - Agi
Loans Held for Investment - Aging (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | $ 7,944,246 | $ 7,879,904 |
Accruing Loans Past Due 90 Days or More | 102 | 101 |
Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 7,761 | 10,477 |
Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,446 | 3,725 |
Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 13,625 | 21,950 |
Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 22,832 | 36,152 |
Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 7,921,414 | 7,843,752 |
Prime Lending | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Repurchase under a forbearance agreement | 49,000 | |
Prime Lending | U S Government Agencies Secured | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Accruing Loans Past Due 90 Days or More | 96,400 | 60,700 |
Unpaid principal balance loans past due 90 days or more | 96,900 | 61,700 |
Commercial real estate | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,313,911 | 3,042,729 |
Commercial real estate | Non-owner occupied | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,954,231 | 1,729,699 |
Commercial real estate | Non-owner occupied | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 117 | |
Commercial real estate | Non-owner occupied | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 234 | 1,173 |
Commercial real estate | Non-owner occupied | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 234 | 1,290 |
Commercial real estate | Non-owner occupied | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,953,997 | 1,728,409 |
Commercial real estate | Owner occupied | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,359,680 | 1,313,030 |
Commercial real estate | Owner occupied | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 329 | 590 |
Commercial real estate | Owner occupied | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 688 | |
Commercial real estate | Owner occupied | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 2,273 | |
Commercial real estate | Owner occupied | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 329 | 3,551 |
Commercial real estate | Owner occupied | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,359,351 | 1,309,479 |
Commercial and industrial | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,668,209 | 1,875,420 |
Accruing Loans Past Due 90 Days or More | 1 | |
Commercial and industrial | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,597 | 1,059 |
Commercial and industrial | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 8 | 277 |
Commercial and industrial | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 8,329 | 13,640 |
Commercial and industrial | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 11,934 | 14,976 |
Commercial and industrial | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,656,275 | 1,860,444 |
Construction and Land Development | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 934,915 | 892,783 |
Construction and Land Development | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1 | 946 |
Construction and Land Development | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1 | 946 |
Construction and Land Development | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 934,914 | 891,837 |
1 - 4 family residential | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,595,270 | 1,303,430 |
Accruing Loans Past Due 90 Days or More | 102 | 100 |
1 - 4 family residential | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,687 | 7,642 |
1 - 4 family residential | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,431 | 2,738 |
1 - 4 family residential | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 5,046 | 4,842 |
1 - 4 family residential | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 10,164 | 15,222 |
1 - 4 family residential | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,585,106 | 1,288,208 |
Consumer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 29,439 | 32,349 |
Consumer | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 147 | 123 |
Consumer | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 7 | 22 |
Consumer | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 16 | 22 |
Consumer | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 170 | 167 |
Consumer | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 29,269 | 32,182 |
Broker-dealer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 402,502 | 733,193 |
Broker-dealer | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | $ 402,502 | $ 733,193 |
Loans Held for Investment - Int
Loans Held for Investment - Internal Risk Grades (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Internal risk grades of non-covered loans | ||
2022 | $ 1,936,212 | |
2021 | 2,330,570 | |
2020 | 921,795 | |
2019 | 446,184 | |
2018 | 355,208 | |
2017 and Prior | 475,518 | |
Revolving | 843,220 | |
Total loans with credit quality measures | 7,308,707 | |
Total | 7,944,246 | $ 7,879,904 |
Commercial real estate | ||
Internal risk grades of non-covered loans | ||
Total | 3,313,911 | 3,042,729 |
Commercial real estate | Non-owner occupied | ||
Internal risk grades of non-covered loans | ||
Total | 1,954,231 | 1,729,699 |
Commercial real estate | Non-owner occupied | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 47,140 | |
2021 | 76,592 | |
2020 | 20,521 | |
2019 | 8,044 | |
2018 | 4,779 | |
2017 and Prior | 8,142 | |
Revolving | 1 | |
Total loans with credit quality measures | 165,219 | |
Commercial real estate | Non-owner occupied | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 341,269 | |
2021 | 339,862 | |
2020 | 121,299 | |
2019 | 80,514 | |
2018 | 46,457 | |
2017 and Prior | 56,121 | |
Revolving | 47,443 | |
Total loans with credit quality measures | 1,032,965 | |
Commercial real estate | Non-owner occupied | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 82,184 | |
2021 | 138,346 | |
2020 | 182,165 | |
2019 | 82,786 | |
2018 | 67,328 | |
2017 and Prior | 83,882 | |
Revolving | 11,821 | |
Total loans with credit quality measures | 648,512 | |
Commercial real estate | Non-owner occupied | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 78,037 | |
2021 | 14,543 | |
2020 | 1,637 | |
2019 | 8,133 | |
2017 and Prior | 3,546 | |
Revolving | 373 | |
Total loans with credit quality measures | 106,269 | |
Commercial real estate | Non-owner occupied | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2021 | 399 | |
2017 and Prior | 867 | |
Total loans with credit quality measures | 1,266 | |
Commercial real estate | Owner occupied | ||
Internal risk grades of non-covered loans | ||
Total | 1,359,680 | 1,313,030 |
Commercial real estate | Owner occupied | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 21,049 | |
2021 | 113,747 | |
2020 | 65,252 | |
2019 | 22,938 | |
2018 | 12,294 | |
2017 and Prior | 64,781 | |
Revolving | 5,977 | |
Total loans with credit quality measures | 306,038 | |
Commercial real estate | Owner occupied | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 162,232 | |
2021 | 189,775 | |
2020 | 87,189 | |
2019 | 81,957 | |
2018 | 88,019 | |
2017 and Prior | 61,081 | |
Revolving | 15,966 | |
Total loans with credit quality measures | 686,219 | |
Commercial real estate | Owner occupied | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 56,849 | |
2021 | 66,290 | |
2020 | 87,346 | |
2019 | 29,326 | |
2018 | 64,755 | |
2017 and Prior | 27,447 | |
Revolving | 3,200 | |
Total loans with credit quality measures | 335,213 | |
Commercial real estate | Owner occupied | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 4,143 | |
2021 | 430 | |
2020 | 6,042 | |
2019 | 2,847 | |
2018 | 3,425 | |
2017 and Prior | 11,854 | |
Total loans with credit quality measures | 28,741 | |
Commercial real estate | Owner occupied | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 14 | |
2021 | 868 | |
2019 | (4) | |
2018 | 330 | |
2017 and Prior | 2,261 | |
Total loans with credit quality measures | 3,469 | |
Commercial and industrial | ||
Internal risk grades of non-covered loans | ||
Total | 1,668,209 | 1,875,420 |
Commercial and industrial | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 29,353 | |
2021 | 27,282 | |
2020 | 26,549 | |
2019 | 6,945 | |
2018 | 1,994 | |
2017 and Prior | 2,313 | |
Revolving | 50,244 | |
Total loans with credit quality measures | 144,680 | |
Commercial and industrial | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 135,610 | |
2021 | 142,831 | |
2020 | 51,782 | |
2019 | 29,790 | |
2018 | 10,412 | |
2017 and Prior | 16,103 | |
Revolving | 349,402 | |
Total loans with credit quality measures | 735,930 | |
Commercial and industrial | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 88,284 | |
2021 | 67,652 | |
2020 | 53,440 | |
2019 | 18,638 | |
2018 | 3,141 | |
2017 and Prior | 7,918 | |
Revolving | 274,261 | |
Total loans with credit quality measures | 513,334 | |
Commercial and industrial | Internal Grade 12 (Special mention) | ||
Internal risk grades of non-covered loans | ||
2022 | 86 | |
2019 | 453 | |
Revolving | 2,654 | |
Total loans with credit quality measures | 3,193 | |
Commercial and industrial | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 671 | |
2021 | 2,972 | |
2020 | 7,150 | |
2019 | 3,839 | |
2018 | 3,917 | |
2017 and Prior | 3,160 | |
Revolving | 4,248 | |
Total loans with credit quality measures | 25,957 | |
Commercial and industrial | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 308 | |
2021 | 85 | |
2020 | 7,882 | |
2018 | 3,500 | |
2017 and Prior | 303 | |
Total loans with credit quality measures | 12,078 | |
Commercial and industrial | Mortgage Warehouse Lending | ||
Internal risk grades of non-covered loans | ||
Loans without credit quality measures | 223,028 | |
Commercial and industrial | Loans Funded Through Paycheck Protection Program | ||
Internal risk grades of non-covered loans | ||
Loans without credit quality measures | 1,097 | |
Total | 1,100 | 77,700 |
Commercial and industrial | Loans Accounted At Fair Value | ||
Internal risk grades of non-covered loans | ||
Loans without credit quality measures | 8,912 | |
Construction and Land Development | ||
Internal risk grades of non-covered loans | ||
Total | 934,915 | 892,783 |
Construction and Land Development | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 781 | |
2021 | 223 | |
2018 | 981 | |
Total loans with credit quality measures | 1,985 | |
Construction and Land Development | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 14,969 | |
2021 | 3,933 | |
2020 | 54 | |
Total loans with credit quality measures | 18,956 | |
Construction and Land Development | Other. | ||
Internal risk grades of non-covered loans | ||
2022 | 4,198 | |
Total loans with credit quality measures | 4,198 | |
Construction and Land Development | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 12,673 | |
2021 | 15,535 | |
2020 | 1,341 | |
2019 | 889 | |
2018 | 1,047 | |
2017 and Prior | 2,984 | |
Revolving | 1 | |
Total loans with credit quality measures | 34,470 | |
Construction and Land Development | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 272,658 | |
2021 | 210,391 | |
2020 | 63,325 | |
2019 | 13,191 | |
2018 | 3,252 | |
2017 and Prior | 1,947 | |
Revolving | 48,263 | |
Total loans with credit quality measures | 613,027 | |
Construction and Land Development | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 148,054 | |
2021 | 74,383 | |
2020 | 16,404 | |
2019 | 325 | |
2017 and Prior | 1,479 | |
Revolving | 15,352 | |
Total loans with credit quality measures | 255,997 | |
Construction and Land Development | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 1,019 | |
2017 and Prior | 5,262 | |
Total loans with credit quality measures | 6,281 | |
Construction and Land Development | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2017 and Prior | 1 | |
Total loans with credit quality measures | 1 | |
1 - 4 family residential | ||
Internal risk grades of non-covered loans | ||
Total | 1,595,270 | 1,303,430 |
1 - 4 family residential | FICO Score, Less than 620 | ||
Internal risk grades of non-covered loans | ||
2022 | 1,184 | |
2021 | 733 | |
2020 | 779 | |
2019 | 541 | |
2018 | 3,538 | |
2017 and Prior | 21,699 | |
Revolving | 266 | |
Total loans with credit quality measures | 28,740 | |
1 - 4 family residential | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 6,077 | |
2021 | 13,805 | |
2020 | 8,530 | |
2019 | 5,265 | |
2018 | 6,013 | |
2017 and Prior | 26,482 | |
Revolving | 3,705 | |
Total loans with credit quality measures | 69,877 | |
1 - 4 family residential | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 334,135 | |
2021 | 806,223 | |
2020 | 109,048 | |
2019 | 46,361 | |
2018 | 29,057 | |
2017 and Prior | 48,786 | |
Revolving | 3,171 | |
Total loans with credit quality measures | 1,376,781 | |
1 - 4 family residential | Substandard non-accrual | ||
Internal risk grades of non-covered loans | ||
2020 | (1) | |
2018 | 260 | |
2017 and Prior | 12,589 | |
Total loans with credit quality measures | 12,848 | |
1 - 4 family residential | Other. | ||
Internal risk grades of non-covered loans | ||
2022 | 78,521 | |
2021 | 18,571 | |
2020 | 1,616 | |
2019 | 2,403 | |
2018 | 577 | |
2017 and Prior | 4,082 | |
Revolving | 1,254 | |
Total loans with credit quality measures | 107,024 | |
Consumer | ||
Internal risk grades of non-covered loans | ||
Total | 29,439 | 32,349 |
Consumer | FICO Score, Less than 620 | ||
Internal risk grades of non-covered loans | ||
2022 | 1,349 | |
2021 | 332 | |
2020 | 123 | |
2019 | 48 | |
2018 | 7 | |
2017 and Prior | 15 | |
Revolving | 351 | |
Total loans with credit quality measures | 2,225 | |
Consumer | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 3,226 | |
2021 | 1,736 | |
2020 | 575 | |
2019 | 453 | |
2018 | 35 | |
2017 and Prior | 378 | |
Revolving | 1,923 | |
Total loans with credit quality measures | 8,326 | |
Consumer | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 5,843 | |
2021 | 1,705 | |
2020 | 1,283 | |
2019 | 413 | |
2018 | 85 | |
2017 and Prior | 1 | |
Revolving | 3,201 | |
Total loans with credit quality measures | 12,531 | |
Consumer | Substandard non-accrual | ||
Internal risk grades of non-covered loans | ||
2017 and Prior | 16 | |
Total loans with credit quality measures | 16 | |
Consumer | Other. | ||
Internal risk grades of non-covered loans | ||
2022 | 4,296 | |
2021 | 1,326 | |
2020 | 464 | |
2019 | 89 | |
2018 | 5 | |
2017 and Prior | 18 | |
Revolving | 143 | |
Total loans with credit quality measures | 6,341 | |
Broker-dealer | ||
Internal risk grades of non-covered loans | ||
Loans without credit quality measures | 402,502 | |
Total | $ 402,502 | $ 733,193 |
Allowance for Credit Losses - N
Allowance for Credit Losses - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Allowance for Credit Losses | ||||
Available for sale debt securities past due | $ 0 | $ 0 | ||
Provision (reversal) in allowance on individually evaluated loans | (0.2) | $ 5.2 | (1.2) | $ 5.6 |
Provision (reversal) in allowance on collectively evaluated loans | (0.5) | (11) | 5.9 | (45.2) |
Net charge-offs | $ 2.7 | $ 4.2 | ||
Net recoveries | $ 0.1 | $ 0.1 |
Allowance for Credit Losses - A
Allowance for Credit Losses - Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Changes in the allowance for loan losses for loans held for investments | ||||
Balance, Beginning of Period | $ 95,298 | $ 115,269 | $ 91,352 | $ 149,044 |
Provision for (Reversal of) Credit Losses | (780) | (5,819) | 4,671 | (39,648) |
Loans Charged Off | (3,259) | (601) | (6,620) | (2,522) |
Recoveries on Charged Off Loans | 524 | 663 | 2,380 | 2,638 |
Balance, End of Period | 91,783 | 109,512 | 91,783 | 109,512 |
Commercial real estate | ||||
Changes in the allowance for loan losses for loans held for investments | ||||
Balance, Beginning of Period | 63,719 | 77,633 | 59,354 | 109,629 |
Provision for (Reversal of) Credit Losses | (560) | (8,993) | 3,762 | (41,037) |
Loans Charged Off | (124) | (310) | ||
Recoveries on Charged Off Loans | 41 | 19 | 84 | 253 |
Balance, End of Period | 63,200 | 68,535 | 63,200 | 68,535 |
Commercial and industrial | ||||
Changes in the allowance for loan losses for loans held for investments | ||||
Balance, Beginning of Period | 19,836 | 27,866 | 21,982 | 27,703 |
Provision for (Reversal of) Credit Losses | (1,002) | 2,398 | (1,681) | 2,848 |
Loans Charged Off | (3,096) | (317) | (6,197) | (1,738) |
Recoveries on Charged Off Loans | 370 | 598 | 2,004 | 1,732 |
Balance, End of Period | 16,108 | 30,545 | 16,108 | 30,545 |
Construction and Land Development | ||||
Changes in the allowance for loan losses for loans held for investments | ||||
Balance, Beginning of Period | 4,996 | 5,185 | 4,674 | 6,677 |
Provision for (Reversal of) Credit Losses | (228) | (85) | 94 | (1,577) |
Balance, End of Period | 4,768 | 5,100 | 4,768 | 5,100 |
1 - 4 family residential | ||||
Changes in the allowance for loan losses for loans held for investments | ||||
Balance, Beginning of Period | 5,554 | 3,659 | 4,589 | 3,946 |
Provision for (Reversal of) Credit Losses | 1,049 | 946 | 2,014 | 358 |
Loans Charged Off | (14) | (87) | (62) | (248) |
Recoveries on Charged Off Loans | 23 | 20 | 71 | 482 |
Balance, End of Period | 6,612 | 4,538 | 6,612 | 4,538 |
Consumer | ||||
Changes in the allowance for loan losses for loans held for investments | ||||
Balance, Beginning of Period | 542 | 592 | 578 | 876 |
Provision for (Reversal of) Credit Losses | 91 | (41) | 136 | (317) |
Loans Charged Off | (149) | (73) | (361) | (226) |
Recoveries on Charged Off Loans | 90 | 26 | 221 | 171 |
Balance, End of Period | 574 | 504 | 574 | 504 |
Broker-dealer | ||||
Changes in the allowance for loan losses for loans held for investments | ||||
Balance, Beginning of Period | 651 | 334 | 175 | 213 |
Provision for (Reversal of) Credit Losses | (130) | (44) | 346 | 77 |
Balance, End of Period | $ 521 | $ 290 | $ 521 | $ 290 |
Allowance for Credit Losses - O
Allowance for Credit Losses - Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Changes in the allowance for credit losses for loans with off-balance sheet credit exposures | ||||
Balance, beginning of period | $ 6,931 | $ 7,981 | $ 5,880 | $ 8,388 |
Other noninterest expense | 87 | (1,183) | 1,138 | (1,590) |
Balance, end of period | $ 7,018 | $ 6,798 | $ 7,018 | $ 6,798 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Change in fair value of mortgage servicing rights | |||||
Balance, beginning of year | $ 86,990 | ||||
Balance, end of year | $ 156,539 | 156,539 | $ 86,990 | ||
MSR asset | |||||
Change in fair value of mortgage servicing rights | |||||
Balance, beginning of year | 121,688 | $ 124,497 | 86,990 | $ 143,742 | 143,742 |
Additions | 29,340 | 20,252 | 47,850 | 70,368 | |
Sales | (31,366) | (1,876) | (116,000) | ||
Changes in fair value: Due to changes in model inputs or assumptions | 7,942 | 3,525 | 32,035 | 32,199 | |
Changes in fair value: Due to customer payoffs | (2,431) | (5,977) | (8,460) | (19,378) | |
Balance, end of year | 156,539 | 110,931 | 156,539 | 110,931 | 86,990 |
Mortgage loans serviced for others | $ 8,277,325 | $ 8,277,325 | $ 6,355,927 | ||
MSR asset as a percentage of serviced mortgage loans | 1.89% | 1.89% | 1.37% | ||
Mortgage servicing assets adjustment, fair value | $ 3,300 | $ 22,200 | |||
Key Assumptions | |||||
Weighted average constant prepayment rate (as a percent) | 8.06% | 10.02% | |||
Weighted average discount rate (as a percent) | 12.09% | 14.32% | |||
Weighted average life (in years) | 8 years 4 months 24 days | 7 years 1 month 6 days |
Mortgage Servicing Rights - Sen
Mortgage Servicing Rights - Sensitivity Analysis (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Mortgage Servicing Rights | |||||
Constant prepayment rate: Impact of 10% adverse change | $ (3,027) | $ (3,027) | $ (2,603) | ||
Constant prepayment rate: Impact of 20% adverse change | (5,869) | (5,869) | (5,315) | ||
Discount rate: Impact of 10% adverse change | (4,439) | (4,439) | (4,070) | ||
Discount rate: Impact of 20% adverse change | (8,466) | (8,466) | $ (7,753) | ||
Contractually specified servicing fees, late fees and ancillary fees | $ 9,900 | $ 15,600 | $ 27,300 | $ 47,900 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deposits | ||
Noninterest-bearing demand | $ 4,546,816 | $ 4,577,183 |
Interest-bearing: | ||
Demand accounts | 3,456,342 | 3,270,522 |
Brokered - demand | 5,631 | 114,393 |
Money market | 2,149,812 | 3,433,341 |
Brokered - money market | 8,717 | 98,614 |
Savings | 316,788 | 345,795 |
Time | 852,431 | 962,752 |
Brokered - time | 15,477 | 15,477 |
Total deposits | 11,352,014 | $ 12,818,077 |
Time deposits that meet or exceed FDIC insurance limit | $ 358,200 |
Short-term Borrowings (Details)
Short-term Borrowings (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Short-term borrowings | |||||
Short-term borrowings | $ 942,309 | $ 942,309 | $ 859,444 | ||
Hilltop Broker-Dealers | |||||
Short-term borrowings | |||||
Weighted average interest rate on short-term bank loan borrowings (as a percent) | 4.25% | 4.25% | |||
Federal funds purchased | |||||
Short-term borrowings | |||||
Short-term borrowings | $ 439,200 | $ 439,200 | 171,925 | ||
Securities sold under agreements to repurchase | |||||
Short-term borrowings | |||||
Short-term borrowings | 302,299 | 302,299 | 191,547 | ||
Federal Home Loan Bank | |||||
Short-term borrowings | |||||
Short-term borrowings | 0 | $ 0 | $ 0 | $ 0 | |
Federal Home Loan Bank | Maximum | |||||
Short-term borrowings | |||||
Maturity term of debt | 365 days | ||||
Short-term bank loans | |||||
Short-term borrowings | |||||
Short-term borrowings | 7,000 | $ 7,000 | 142,000 | ||
Commercial paper | |||||
Short-term borrowings | |||||
Short-term borrowings | $ 193,810 | $ 193,810 | $ 353,972 | ||
Number of commercial paper programs initiated | item | 2 | ||||
Weighted average maturity term | 145 days | ||||
Weighted average interest rate on short-term bank loan borrowings (as a percent) | 3.16% | 3.16% | |||
Weighted average remaining life | 59 days | ||||
Debt instrument, collateral | $ 213,100 | $ 213,100 | |||
Commercial paper | Minimum | |||||
Short-term borrowings | |||||
Maturity term of debt | 14 days | ||||
Commercial paper | Maximum | |||||
Short-term borrowings | |||||
Maturity term of debt | 270 days | ||||
Series 2019-1 CP Notes | |||||
Short-term borrowings | |||||
Maximum borrowing capacity | 300,000 | $ 300,000 | |||
Series 2019-2 CP Notes | |||||
Short-term borrowings | |||||
Maximum borrowing capacity | $ 200,000 | 200,000 | |||
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | |||||
Short-term borrowings | |||||
Average balance during the period | $ 530,180 | $ 328,853 | |||
Average interest rate during the period | 1.36% | 0.37% | |||
Average interest rate at end of period (as a percent) | 2.91% | 2.91% | 0.31% | ||
Securities underlying the agreements at end of period: Carrying value | $ 343,655 | $ 343,655 | $ 191,483 | ||
Securities underlying the agreements at end of period: Estimated fair value | $ 362,237 | $ 362,237 | $ 205,734 | ||
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | Minimum | |||||
Short-term borrowings | |||||
Maturity term of debt | 1 day | ||||
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | Maximum | |||||
Short-term borrowings | |||||
Maturity term of debt | 90 days |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument | ||
Notes payable | $ 390,354 | $ 387,904 |
Senior Notes due April 2025 | ||
Debt Instrument | ||
Notes payable | 149,253 | 149,114 |
Unamortized discount | 746 | 886 |
Subordinated Notes due May 2030 | ||
Debt Instrument | ||
Notes payable | 49,366 | 49,296 |
Unamortized discount | 634 | 704 |
Subordinated Notes Due May 2035 | ||
Debt Instrument | ||
Notes payable | 147,916 | 147,780 |
Unamortized discount | 2,084 | 2,220 |
Ventures Management lines of credit | ||
Debt Instrument | ||
Notes payable | $ 43,819 | $ 41,714 |
Lease - Supplemental balance sh
Lease - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finance leases: | ||
Premises and equipment | $ 7,780 | $ 7,780 |
Accumulated depreciation | (5,800) | (5,358) |
Premises and equipment, net | $ 1,980 | $ 2,422 |
Lease - Components of lease cos
Lease - Components of lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Components of operating lease costs | ||||
Operating lease cost | $ 9,121 | $ 9,727 | $ 28,078 | $ 29,130 |
Less operating lease and sublease income | (633) | (343) | (1,762) | (1,024) |
Net operating lease cost | 8,488 | 9,384 | 26,316 | 28,106 |
Amortization of ROU assets | 147 | 147 | 442 | 442 |
Interest on lease liabilities | 118 | 129 | 363 | 396 |
Total finance lease cost | $ 265 | $ 276 | $ 805 | $ 838 |
Lease - Supplemental cash flow
Lease - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Operating cash flows from operating leases | $ 27,387 | $ 28,160 |
Operating cash flows from finance leases | 366 | 396 |
Financing cash flows from finance leases | 563 | 509 |
Right-of-use assets obtained in exchange for new lease obligations - Operating leases | $ 12,336 | $ 37,086 |
Lease - Lease terms and discoun
Lease - Lease terms and discount rates (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||
Operating - Weighted Average Remaining Lease Term (Years) | 5 years 7 months 6 days | 5 years 10 months 24 days |
Finance - Weighted Average Remaining Lease Term (Years) | 4 years 1 month 6 days | 4 years 9 months 18 days |
Operating - Weighted Average Discount Rate | 3.85% | 3.89% |
Finance - Weighted Average Discount Rate | 4.88% | 4.84% |
Lease - Lease maturities (Detai
Lease - Lease maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating leases maturities | ||
2022 | $ 1,462 | |
2023 | 33,554 | |
2024 | 25,309 | |
2025 | 18,642 | |
2026 | 15,050 | |
Thereafter | 40,636 | |
Total minimum lease payments | 134,653 | |
Less amount representing interest | (14,018) | |
Lease liabilities | 120,635 | $ 130,960 |
Finance Leases maturities: | ||
2022 | 312 | |
2023 | 1,280 | |
2024 | 1,163 | |
2025 | 886 | |
2026 | 813 | |
Thereafter | 598 | |
Total minimum lease payments | 5,052 | |
Less amount representing interest | (1,448) | |
Lease liabilities | $ 3,604 | |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. |
Lease - Operating leases that h
Lease - Operating leases that have not yet commenced (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Leases | |
Additional operating leases that have not yet commenced | $ 0.1 |
Expected to commence | 5 years |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Taxes | ||||
Effective income tax rate (as a percent) | 21.80% | 22.80% | 22.70% | 23.20% |
Commitments and Contingencies -
Commitments and Contingencies - Legal (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 08, 2022 | Dec. 31, 2021 | |
Representation and Warranty Claims | ||||||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | ||||||
Balance, beginning of period | $ 28,715 | $ 32,763 | $ 31,407 | $ 30,085 | ||
Claims made | 14,247 | 5,412 | 42,305 | 19,100 | ||
Claims resolved with no payment | (4,378) | (4,217) | (12,352) | (9,088) | ||
Repurchases | (11,320) | (3,981) | (34,096) | (9,238) | ||
Indemnification payments | (267) | (1,149) | ||||
Balance, end of period | 27,264 | 29,710 | 27,264 | 29,710 | ||
Reserve for Indemnification Liability: | ||||||
Total | 27,264 | 29,710 | 27,264 | 29,710 | $ 31,407 | |
Indemnification Agreement | ||||||
Commitments and Contingencies | ||||||
Provision for indemnification losses | 100 | 2,500 | 1,300 | 8,000 | ||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | ||||||
Balance, beginning of period | 23,750 | 26,372 | 27,424 | 21,531 | ||
Additions for new sales | 608 | 2,702 | 2,123 | 8,568 | ||
Repurchases | (1,591) | (2,687) | (6,367) | (3,086) | ||
Early payment defaults | (90) | (116) | (212) | (152) | ||
Indemnification payments | (78) | (342) | ||||
Change in reserves for loans sold in prior years | (553) | (220) | (844) | (546) | ||
Balance, end of period | 22,124 | 25,973 | 22,124 | 25,973 | ||
Reserve for Indemnification Liability: | ||||||
Specific claims | 394 | 394 | 345 | |||
Incurred but not reported claims | 21,730 | 21,730 | 27,079 | |||
Total | $ 22,124 | $ 25,973 | $ 22,124 | $ 25,973 | $ 27,424 | |
WR Investments LP | ||||||
Commitments and Contingencies | ||||||
Loss of subordinated bonds | $ 13,000 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Commitments to Extend Credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 2,500 |
Standby Letters of Credit [Member] | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 100.3 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan Information (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
2020 Plan | Director | ||
Stock based compensation | ||
Common shares granted to members of board of directors as compensation for director services | 16,501 | 12,957 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - 2020 Plan - RSUs shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of shares outstanding | |
Balance at the beginning of the period ( in shares) | shares | 1,869 |
Granted (in shares) | shares | 548 |
Vested/Released (in shares) | shares | (614) |
Forfeited (in shares) | shares | (136) |
Balance at the end of the period ( in shares) | shares | 1,667 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 23.16 |
Grant date fair value (in dollars per share) | $ / shares | 33.25 |
Vested/Released (in dollars per share) | $ / shares | 19.30 |
Forfeited (in dollars per share) | $ / shares | 24.50 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 27.79 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - 2020 Plan - RSUs $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) shares | |
Stock based compensation | |
Vested/Released number of shares withheld to satisfy employee statutory tax obligations (in shares) | 135,249 |
Number of shares awarded (in shares) | 548,000 |
Number of awards subject to time-based vesting (in shares) | 1,259,181 |
Number of awards vesting upon achievement of performance goals (in shares) | 408,458 |
Performance period | 3 years |
Vesting period | 3 years |
Unrecognized compensation expense | $ | $ 22 |
Weighted average period for unrecognized compensation expense (in years) | 1 year 2 months 19 days |
Certain Executives and Key Employees | |
Stock based compensation | |
Number of shares awarded (in shares) | 474,985 |
Number of awards subject to time-based vesting (in shares) | 327,377 |
Number of awards vesting upon achievement of performance goals (in shares) | 135,558 |
Performance period | 3 years |
Vesting period | 3 years |
Regulatory Matters - Minimum Ca
Regulatory Matters - Minimum Capital Requirements (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Regulatory matters | ||
Regulatory capital effects from CECL transitionary period | 5 years | |
Plains Capital Bank | ||
Tier 1 capital (to average assets) | ||
Actual Amount | $ 1,404,288 | $ 1,469,695 |
Actual Ratio | 0.1029 | 0.1020 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.040 | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.050 | |
Common equity Tier 1 capital (to risk weighted assets) | ||
Actual Amount | $ 1,404,288 | $ 1,469,695 |
Actual Ratio | 0.1468 | 0.1600 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.070 | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.065 | |
Tier 1 capital (to risk-weighted assets) | ||
Actual Amount | $ 1,404,288 | $ 1,469,695 |
Actual Ratio | 0.1468 | 0.1600 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.085 | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.080 | |
Total capital (to risk-weighted assets) | ||
Actual Amount | $ 1,486,989 | $ 1,540,100 |
Actual Ratio | 0.1554 | 0.1677 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in ratio | 0.105 | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.100 | |
Hilltop | ||
Tier 1 capital (to average assets) | ||
Actual Amount | $ 1,881,289 | $ 2,262,356 |
Actual Ratio | 0.1141 | 0.1258 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.040 | |
Common equity Tier 1 capital (to risk weighted assets) | ||
Actual Amount | $ 1,881,289 | $ 2,262,356 |
Actual Ratio | 0.1745 | 0.2122 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.070 | |
Tier 1 capital (to risk-weighted assets) | ||
Actual Amount | $ 1,881,289 | $ 2,262,356 |
Actual Ratio | 0.1745 | 0.2122 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.085 | |
Total capital (to risk-weighted assets) | ||
Actual Amount | $ 2,163,815 | $ 2,532,008 |
Actual Ratio | 0.2007 | 0.2375 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in ratio | 0.105 |
Regulatory Matters - Net Capita
Regulatory Matters - Net Capital Position, Broker-Dealers (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 109,358 | $ 221,740 | $ 269,506 |
Hilltop Securities | |||
Net Capital | |||
Net capital | 198,954 | ||
Less required net capital | 9,313 | ||
Excess net capital | $ 189,641 | ||
Net capital as a percentage of aggregate debit items | 42.70% | ||
Net capital in excess of 5% aggregate debt items | $ 175,672 | ||
Momentum Independent Network | |||
Net Capital | |||
Net capital | 3,842 | ||
Less required net capital | 250 | ||
Excess net capital | 3,592 | ||
Hilltop Broker-Dealers | |||
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 109,400 | $ 221,700 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 20, 2022 | May 27, 2022 | May 02, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jan. 31, 2022 | |
Stock repurchase program | ||||||||
Cash dividends declared per common share | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.45 | $ 0.36 | |||
Cash dividends paid | $ 33,500 | $ 29,500 | ||||||
Repurchase common stock authorized amount | $ 100,000 | |||||||
Payments to repurchase shares | $ 442,336 | $ 123,631 | ||||||
Shares available for repurchase | 0 | 0 | ||||||
Tender Offer Agreement | ||||||||
Stock repurchase program | ||||||||
Aggregate cash purchase price | $ 400,000 | |||||||
Percentage of outstanding shares | 2% | |||||||
Repurchase of common stock (in shares) | 14,868,469 | |||||||
Average price (per share) | $ 29.75 | |||||||
Payments to repurchase shares | $ 442,300 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Not Designated as Hedging Instrument | Prime Lending | |||||
Derivative financial instruments | |||||
Increase (decrease) in the fair value of the derivatives | $ 2,276 | $ 780 | $ (10,975) | $ 555 | |
Not Designated as Hedging Instrument | Hilltop Broker-Dealers | |||||
Derivative financial instruments | |||||
Increase (decrease) in the fair value of the derivatives | 14,240 | 11,427 | 23,819 | (3,845) | |
Not Designated as Hedging Instrument | Plains Capital Bank | |||||
Derivative financial instruments | |||||
Increase (decrease) in the fair value of the derivatives | 7 | $ 7 | 53 | $ 26 | |
Not Designated as Hedging Instrument | PrimeLending and Hilltop Broker-Dealers | Other Assets | |||||
Derivative financial instruments | |||||
Cash collateral advanced to offset net derivative liability | 11,700 | 11,700 | $ 4,200 | ||
Interest Rate Lock Commitments | Not Designated as Hedging Instrument | |||||
Derivative financial instruments | |||||
Notional Amount | 1,131,664 | 1,131,664 | 1,283,152 | ||
Estimated Fair Value | (16,729) | (16,729) | 25,489 | ||
Commitments to Purchase MBSs | Not Designated as Hedging Instrument | |||||
Derivative financial instruments | |||||
Notional Amount | 1,353,969 | 1,353,969 | 1,575,264 | ||
Estimated Fair Value | (27,946) | (27,946) | (674) | ||
Commitments to Sell MBSs | Not Designated as Hedging Instrument | |||||
Derivative financial instruments | |||||
Notional Amount | 3,150,790 | 3,150,790 | 3,314,173 | ||
Estimated Fair Value | 71,201 | 71,201 | (355) | ||
Commitments to Sell MBSs | Not Designated as Hedging Instrument | Prime Lending | Other Assets | |||||
Derivative financial instruments | |||||
Cash collateral advanced to offset net derivative liability | 100 | 100 | 100 | ||
Commitments to Sell MBSs | Not Designated as Hedging Instrument | Prime Lending | Other Liabilities | |||||
Derivative financial instruments | |||||
Cash collateral advanced to offset net derivative assets | 56,300 | 56,300 | |||
Interest rate swaps | Not Designated as Hedging Instrument | |||||
Derivative financial instruments | |||||
Notional Amount | 36,317 | 36,317 | 68,413 | ||
Estimated Fair Value | 2,976 | 2,976 | (1,949) | ||
Interest rate swaps | Designated as hedges | |||||
Derivative financial instruments | |||||
Available for sale securities and loans held for investment | 296,000 | 296,000 | 218,000 | ||
Interest rate swaps | Cash Flow Hedging | Designated as hedges | |||||
Derivative financial instruments | |||||
Notional Amount | 415,000 | 415,000 | 190,000 | ||
Estimated Fair Value | 22,675 | 22,675 | 603 | ||
Interest rate swaps | Fair Value Hedging | Designated as hedges | |||||
Derivative financial instruments | |||||
Notional Amount | 340,323 | 340,323 | 221,232 | ||
Estimated Fair Value | 44,322 | 44,322 | 3,207 | ||
Cumulative adjustment in available for sale securities and loans held for investment | 44,300 | 44,300 | 3,200 | ||
U.S. Treasury bond futures and options | Not Designated as Hedging Instrument | |||||
Derivative financial instruments | |||||
Notional Amount | 274,000 | 274,000 | 247,800 | ||
Eurodollar and other futures | Not Designated as Hedging Instrument | |||||
Derivative financial instruments | |||||
Notional Amount | 2,964,000 | 2,964,000 | 2,061,800 | ||
Credit default swaps | Not Designated as Hedging Instrument | |||||
Derivative financial instruments | |||||
Notional Amount | 1,000 | 1,000 | 7,000 | ||
Estimated Fair Value | $ 5 | $ 5 | $ (15) |
Balance Sheet Offsetting - Asse
Balance Sheet Offsetting - Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Reverse repurchase agreements: | ||
Net Amounts of Assets Presented in the Balance Sheet | $ 145,365 | $ 118,262 |
Total | ||
Gross Amounts of Recognized Assets | 1,403,484 | 1,639,589 |
Gross Amounts Offset in the Balance Sheet | (686) | (1,773) |
Net Amounts of Assets Presented in the Balance Sheet | 1,402,798 | 1,637,816 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,308,549) | (1,564,596) |
Net Amount | 94,249 | 73,220 |
Institutional Counterparties | ||
Securities borrowed: | ||
Gross Amounts of Recognized Assets | 1,182,934 | 1,518,372 |
Net Amounts of Assets Presented in the Balance Sheet | 1,182,934 | 1,518,372 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,126,566) | (1,445,590) |
Net Amount | 56,368 | 72,782 |
Interest rate swaps | Institutional Counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 2,976 | |
Net Amounts of Assets Presented in the Balance Sheet | 2,976 | |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (2,953) | |
Net Amounts of Assets Presented in the Balance Sheet | 23 | |
Credit default swaps | Institutional Counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 5 | |
Net Amounts of Assets Presented in the Balance Sheet | 5 | |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (5) | |
Net Amounts of Assets Presented in the Balance Sheet | 0 | |
Reverse repurchase agreements | Institutional Counterparties | ||
Reverse repurchase agreements: | ||
Gross Amounts of Recognized Assets | 145,365 | 118,262 |
Net Amounts of Assets Presented in the Balance Sheet | 145,365 | 118,262 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (139,187) | (118,262) |
Net Amount | 6,178 | 0 |
Forward MBS Derivatives | Institutional Counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 72,204 | 2,955 |
Gross Amounts Offset in the Balance Sheet | (686) | (1,773) |
Net Amounts of Assets Presented in the Balance Sheet | 71,518 | 1,182 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (39,838) | (744) |
Net Amounts of Assets Presented in the Balance Sheet | $ 31,680 | $ 438 |
Balance Sheet Offsetting - Liab
Balance Sheet Offsetting - Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Total | ||
Gross Amounts of Recognized Liabilities | $ 1,402,702 | $ 1,627,854 |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,402,702 | 1,627,854 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,365,676) | (1,569,729) |
Net Amount | 37,026 | 58,125 |
Institutional Counterparties | ||
Securities loaned: | ||
Gross Amounts of Recognized Liabilities | 1,072,408 | 1,432,196 |
Net Amounts of Liabilities Presented in the Balance Sheets | 1,072,408 | 1,432,196 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,017,959) | (1,359,850) |
Net Amount | 54,449 | 72,346 |
Institutional Counterparties | Interest rate swaps | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 1,949 | |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,949 | |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,919) | |
Net Amount | 30 | |
Institutional Counterparties | Repurchase agreements | ||
Repurchase agreements: | ||
Gross Amounts of Recognized Liabilities | 302,030 | 191,483 |
Net Amounts of Liabilities Presented in the Balance Sheet | 302,030 | 191,483 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (319,453) | (205,734) |
Net Amount | (17,423) | (14,251) |
Institutional Counterparties | Forward MBS Derivatives | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 28,264 | 2,211 |
Net Amounts of Liabilities Presented in the Balance Sheet | 28,264 | 2,211 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (28,264) | (2,211) |
Net Amount | $ 0 | |
Institutional Counterparties | Credit default swaps | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 15 | |
Net Amounts of Liabilities Presented in the Balance Sheet | 15 | |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (15) | |
Net Amount | $ 0 |
Balance Sheet Offsetting - Secu
Balance Sheet Offsetting - Secured Borrowings (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Number of repurchase-to-maturity transactions outstanding | item | 0 | 0 |
Total borrowings | $ 1,374,438 | $ 1,623,679 |
Gross amount of recognized liabilities for repurchase agreements and securities lending in offsetting disclosure above | $ 1,374,438 | 1,623,679 |
Minimum | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Security repurchase agreement maturity period | 1 day | |
Maximum | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Security repurchase agreement maturity period | 90 days | |
Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | $ 1,254,449 | 1,525,847 |
Maturity up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 53,624 | |
Maturity 30 to 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 61,715 | 86,357 |
Maturity over 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 4,650 | 11,475 |
Assets-backed securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 302,030 | 191,483 |
Assets-backed securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 182,041 | 93,651 |
Assets-backed securities | Maturity up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 53,624 | |
Assets-backed securities | Maturity 30 to 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 61,715 | 86,357 |
Assets-backed securities | Maturity over 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 4,650 | 11,475 |
Corporate Debt Securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 113 | 113 |
Corporate Debt Securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 113 | 113 |
Equity Securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 1,072,295 | 1,432,083 |
Equity Securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | $ 1,072,295 | $ 1,432,083 |
Broker-Dealer and Clearing Or_3
Broker-Dealer and Clearing Organization Receivables and Payables (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Receivables: | ||
Securities borrowed | $ 1,182,934 | $ 1,518,372 |
Securities failed to deliver | 14,625 | 5,664 |
Trades in process of settlement | 47,753 | 144,773 |
Other | 9,740 | 4,137 |
Total receivables | 1,255,052 | 1,672,946 |
Payables: | ||
Securities loaned | 1,072,408 | 1,432,196 |
Correspondents | 20,700 | 20,571 |
Securities failed to receive | 78,316 | 18,808 |
Other | 4,732 | 5,725 |
Total Payables | $ 1,176,156 | $ 1,477,300 |
Segment and Related Informati_3
Segment and Related Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment item | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Information about the revenues, operating results, goodwill and assets | |||||
Number of primary business units | item | 2 | ||||
Number of reportable segments | segment | 3 | ||||
Net interest income (expense) | $ 123,486 | $ 105,090 | $ 335,533 | $ 318,688 | |
Provision for (reversal of) credit losses | (780) | (5,819) | 4,671 | (39,648) | |
Noninterest income | 206,975 | 367,945 | 662,676 | 1,125,429 | |
Noninterest expense | 288,738 | 355,174 | 873,631 | 1,065,204 | |
Income before income taxes | 42,503 | 123,680 | 119,907 | 418,561 | |
Goodwill | 267,447 | 267,447 | $ 267,447 | ||
Total assets | 16,615,291 | 16,615,291 | 18,689,080 | ||
Operating Segments | Banking | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 110,939 | 99,978 | 304,269 | 309,330 | |
Provision for (reversal of) credit losses | (650) | (5,775) | 4,325 | (39,725) | |
Noninterest income | 12,200 | 11,727 | 37,438 | 33,293 | |
Noninterest expense | 60,160 | 54,567 | 175,921 | 167,869 | |
Income before income taxes | 63,629 | 62,913 | 161,461 | 214,479 | |
Goodwill | 247,368 | 247,368 | 247,368 | ||
Total assets | 13,455,679 | 13,455,679 | 14,944,249 | ||
Operating Segments | Broker-Dealer | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 13,386 | 10,427 | 37,481 | 31,623 | |
Provision for (reversal of) credit losses | (130) | (44) | 346 | 77 | |
Noninterest income | 100,798 | 116,143 | 249,139 | 298,229 | |
Noninterest expense | 96,843 | 109,193 | 268,307 | 287,831 | |
Income before income taxes | 17,471 | 17,421 | 17,967 | 41,944 | |
Goodwill | 7,008 | 7,008 | 7,008 | ||
Total assets | 2,866,990 | 2,866,990 | 3,673,346 | ||
Operating Segments | Mortgage Origination Segment | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | (2,939) | (3,503) | (6,066) | (16,554) | |
Noninterest income | 98,200 | 242,270 | 381,477 | 794,679 | |
Noninterest expense | 118,345 | 176,587 | 386,372 | 573,884 | |
Income before income taxes | (23,084) | 62,180 | (10,961) | 204,241 | |
Goodwill | 13,071 | 13,071 | 13,071 | ||
Total assets | 1,405,712 | 1,405,712 | 2,207,822 | ||
Operating Segments | Corporate | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | (3,276) | (4,341) | (9,856) | (13,720) | |
Noninterest income | 1,809 | 757 | 5,655 | 8,140 | |
Noninterest expense | 14,034 | 15,355 | 44,388 | 37,015 | |
Income before income taxes | (15,501) | (18,939) | (48,589) | (42,595) | |
Total assets | 2,453,933 | 2,453,933 | 2,940,670 | ||
All Other and Eliminations | |||||
Information about the revenues, operating results, goodwill and assets | |||||
Net interest income (expense) | 5,376 | 2,529 | 9,705 | 8,009 | |
Noninterest income | (6,032) | (2,952) | (11,033) | (8,912) | |
Noninterest expense | (644) | (528) | (1,357) | (1,395) | |
Income before income taxes | (12) | $ 105 | 29 | $ 492 | |
Total assets | $ (3,567,023) | $ (3,567,023) | $ (5,077,007) |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic earnings per share: | ||||
Income attributable to Hilltop | $ 32,068 | $ 92,906 | $ 87,578 | $ 312,310 |
Weighted average shares outstanding - basic | 64,552 | 80,109 | 72,400 | 81,306 |
Basic earnings per common share (in dollars per share) | $ 0.50 | $ 1.16 | $ 1.21 | $ 3.84 |
Diluted earnings per share: | ||||
Income attributable to Hilltop | $ 32,068 | $ 92,906 | $ 87,578 | $ 312,310 |
Weighted average shares outstanding - basic | 64,552 | 80,109 | 72,400 | 81,306 |
Effect of potentially dilutive securities (in shares) | 117 | 433 | 157 | 457 |
Weighted average shares outstanding - diluted | 64,669 | 80,542 | 72,557 | 81,763 |
Diluted earnings per common share (in dollars per share) | $ 0.50 | $ 1.15 | $ 1.21 | $ 3.82 |