HTH - Earnings call transcript Q4 2018

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Operator

Good morning and welcome to the Hilltop Holdings’ Fourth Quarter and Full Year 2018 Earnings Conference Call and Webcast. All participants today are in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note today’s event is being recorded. And with that, I would like to turn the conference over to Isabell Novakov. ahead. go Please

Isabell Novakov

Good morning.

are Chairman White, Furr, and call Ford, and CFO. the President Jeremy Co-CEO; Alan on Vice Co-CEO; me Joining and Will

their today’s events plans concerning are current such are Before certain risks as These our nature, statements please statements started, strategy, items that, condition, historical presentation acquisitions, expectations and are business during statements. future of statements we management’s not financial to that concerning based including note facts, by on outlook, future are and get subject statements uncertainties. that forward-looking

and with required to of Our actual of condition the the results, statements SEC. annual today from materially these the recent a statements included most Except by any obligation we including due capital filed referenced variety extent expressly financial update disclaim earlier a information. those may our discussion result our as report and differ to in and new precautionary report statements in law, factors, to quarterly

Additionally, appendix tangible the I this and margin, hand to on interest equity be measures, nearest may in this common over to And found presentation posted the these GAAP which presentation, would equivalent is our presentation the ir.hilltop-holdings.com. reconciliation measure at share. to margin, tangible of equivalent taxable non-GAAP website accounting to now, A taxable pre-purchase measures like includes Ford. value net Jeremy per certain book net interest including

Jeremy Ford

good and Isabell you, Thank morning.

Hilltop reported share. XXXX, income quarter diluted earnings. PlainsCapital or fourth the solid per $XX.X delivered For net of million Bank $X.XX

investment dividends deposits the basis income. returned and up year's XX acquisition, year and year interest the to on by other in quarter prior end, $XX in of market results from net shareholders. creation points Further prudent we Bank management for or loans grew same conditions. value were River and [ph]. the X% this to approximately in our our our prior fourth capital We the of over To net stockholders focus However, that of by million versus Oaks’ X% continually versus period. challenging held XXXX on for share expanded declined repurchases our Building X.XX% margin XX% businesses

of Additionally, declared share, with ratio and Hilltop’s and program. million capitalized XX% of share common cash leverage a representing reauthorized value dividend Board of Directors Hilltop increase per $XX.XX. remains year-over-year [ph] our a X $X.XX share per quarterly a just $XX of XX.XX% a book repurchase tier well

basis executed the on to recorded writing X% therefore our key five the our equating quality, we on non-core charge fourth in million, in criticized new and a policies fourth and we of quarter, premiums. represented focus offs $X.X strategic asset to markets quarter insurance points Regarding of in XX loans the six average net of our loans. states, the year declined In business, for which we discontinued only initiative insurance

Bank Moving by to $X.X driven the of to business growth mortgage and year. at and acquisition in XX% River both million. of decline income on transaction do in pretax expenses resulted gain related loans for compared by bank XX% of Volume expense a margins points of the XXX compared prior Oaks loss provision basis of million. $X.X for $X.X sale year quarter results the NIM These pretax higher include in to prior fourth deposits, increased million the slide from quarter and X, and

level. albeit We seen stabilization in at secondary pressured have margins,

leader Hill’s will as him to and fortunate hiring of time, Securities. become Securities, to Hill are Winges excited securities are Hilltop successor. Feinberg exceptional Hilltop XXXX. XX, we announce CEO Brad President of At We Brad a Chairman of as have has February as an track the effective that record and industry

execute environment fourth the markets challenging our quarter to all quality impacted were firm that and Hill future. to Hill make capital And Importantly, At by be for trading into working a Hilltop issuance. will that for his in over Brad is done we're for all a has doing, extremely municipal results grateful Securities career today. Securities, a Hilltop with the XX% decline for it

Additionally, negatively a impacted our quarter. to and lending structured securities spreads clearing On competition credit finance increased the organization. businesses widening for revenue retail, note, during continued solid deliver and positive the

a relocating earlier Operationally, primarily million insurance in Our year difficult from pretax quarter, the and this in to October. delivered through in business had hurricane since Michael loss a has business Georgia to to due Dallas $X.X traversed that continued $X.X income XXXX. million improve,

currently for enhance our our of lowering are well to of core future foundation call, projects of department. streamline and and and organic quarter platform strategic include underway functional and third during on earnings X, Moving broad costs executing shared operations and as in goal These we a set growth. operating slide introduced to enhancements, initiatives services a system sourcing building our procurement acquisitive the with

digital financials. plan the this deliver these communicate and and an the I to XX%. through reduction as the believe of estimates leverage the very turn to Embedded we roadmap consolidation including We have for the equating As to operating already realized for rollout feel network PlainsCapital implementation office and back information term a of already to of being progress system excited end, X% larger will revenue organization, communicate and focused centralized the technology positive assets special Hilltop towards to been the expenses. departments, and benefits the we now pre-provision enable our presentation $XXX in entertainment excess aforementioned income the the benefit of made, combination in XXXX, of be long lending Bank. in we projections our over now expense are a will system a in of investments. will seen. and platform We drive now and as services efforts, at the of plan and of ahead pretax travel largest underway group. of a including growth shared strategic who payment sourcing will the implementations Most program development the the core confident are initiatives, Will and Substantial of million incurring talk the rollout our annual back progress are prime has program such still

Will Furr

you, Thank Jeremy.

disclosed, during the of PlainsCapital the fourth the Bank previously with As agreements FDIC quarter share terminated XXXX. law

As present we I'm of a page or presentation. have and adjusted result, loans XX and the remove pages to to presentation covered are references XX to this These moving X. non-covered changes any assets. on

fourth the of equating for to Hilltop reported of XX.X diluted income discussed, shareholders, XXXX, Jeremy share. As $X.XX per common attributable million quarter to

for continued oil improvement million and quarter, portfolio. and charge reflects in losses loan net fourth offs the quarter million. gas $X.X Hilltop’s the was includes Fourth X.X provision During of provision

full full million, decline the charge ratio offs year average net equated $X a approximately million, off basis For to to million to of XX of $X.X $X.X points. in balance equated year a loan versus charge year XXXX. Full XXXX of XXXX, expense net total provision resulting

with amortization amortization. related revenue purchase the the fourth for absence X XXXX, is strong principally $X.X on be ratios purchase of expect prior impacted impact quarter. ratio to X, driven were During with accounting XX.XX%. equity remains a of notable million, accounting the assets largely position of capital tier and quarter will expenses X intangibles and XX.XX% in of from acquisitions. assets represent million our accounting risk negatively Hilltop’s that changes asset to intangible ratio Of $XX.X and FDIC in during purchase of the the capital associated accretion period a other of to quarter, XX the million increase related XXXX, a based accounting period, deposit we end risk that net by related and In leases. prior points driven an purchase tier XX $X.X basis year, was in the first current resulting weighted million by expenses lease declined $XX.X by January effective common note related accounting expenses leverage the that It to Hilltop’s became

income Moving quarter, X% interest to while and to XXXX. of rates income XX.X average on million during accretion basis per points including from to aforementioned fourth X, between purchase the equated Net or $XXX increased versus equated loan loan modestly X.XX%, by X in remain prior the in equated by million extremely page Net versus $X increased income accretion. the improvement increased have purchase offset million million, interest pre-purchase net prior year margin net HFI the in by quarter accretion, prior purchase to acquisition managing margin XX quarter. an NIM X.X to accounting to purchase somewhat equivalent income asset XX portfolio continue excluding accretion balances both interest growth, BORO million. accounting, the loan year, and to Interest of the loan purchased We taxable higher expect loan Related purchase focused during fourth year both quarter to points related X.XX% growth in costs. the points interest of The from basis accounting from we period. organic deposits, terms purchase and basis million as decline, and increased $X including interest XX deposit accretion. the yields, paid. the quarter, expanded

continue yield As the higher. on to move continues seen increased of approximately rise interest have curve flatness Further, net NIM more remain term XX%. from December income, increases bearing term pressure expected, as Hilltop’s for interest has and and we deposit to cumulative Reserve short deposits the betas borrowing rates Federal longer been costs beta has as short yields stable. the asset XXXX term

Hilltop’s XXXX, beta deposit interest was bearing XX%. During approximately

continue Federal these XX%, While and the beta cycle to of continues expected to our the the our will XX% Reserve rise deposit levels to favorably continue towards it to compare levels, pressures increase if through is rates to betas cycle competitive betas through persist. model that

pre-purchase noted, net our outlook or current at X equivalent margin factors minus are basis plus we X.X% the points. taxable maintaining Given interest accounting,

revisit based and across future to the rate and yield Reserve continue shifts asset Federal the will on portfolios. We assumptions curve outcome movements, liability our of flows

quarter funding fees Fourth value million X. core page points. Hilltop Fourth by lower versus quarterly have moving average related the for funding Total is million XX $XXX I'm earning by the quarter assets for Over X.X by cost, to coupled and of non-interest equated which growth quarter net XXXX. year, to This the acquisition, billion basis for funding, blended with wholesale versus the of demonstrates fourth Hilltop X.X is in the loans portfolios. substantially fourth prior the declined mortgage the declined driven by loans held to past approximately million, Securities. XXXX these sale swept income BORO income million. $XXX XXX of of deposits than $XX year. quarter cost from Securities billion have average increased The

million XXX fourth Hilltop’s The mortgage period. year from declined majority approximately XX%. period. the banking as million mortgage quarter came in comprised environment XXXX, or mortgage XXX the the mortgage During XX% of the refinancing remained declined intense, by origination of reduction our prior versus volumes or activity, which the volume in by Purchase origination competitive originations total XX% annual

to of mortgage While volumes improve in gain XXX from challenged, during the sale quarter margins were XXXX. third points the of XXX basis basis or on points did

gain In throughout current offering pressured of year, in included declined pressured improved volumes linked XX%. Hilltop the $X was million, that year remain merchant million, income quarter will on investment market declined versus banking the quarter. volumes yielded in public credit we and bond XXXX. by issuance Securities competition the municipal year. fourth $XX business, modestly income were XXXX recorded the by on market, other fourth an volatility, previously a quarter finance decreased this and Given Hilltop Securities. down the competitive expect on primarily Other disclosed, prior the structured market by driven while equated challenging they finance in XXXX as US fixed on income by gain to area. origination million. significant widening basis, by and versus a The volumes spreads prior $X.X within gain municipal which our The liquidation the the margins sale as lower Also primarily spreads fees sale and increased conditions, driven of intense and versus related during

from a legacy offsetting the a this of banking recognized investment valuation gain, XXXX, quarter, million. merchant during equating negative to $X.X Hilltop Somewhat fourth adjustment

lowered of expenses page prior related or the by from XX. approximately the X% revenues, Non-interest improved during period Turning decrease XXXX expenses $XXX in impacts impact by driving million insurance of quarter lower were lower which commissions across million to businesses. million. $XX in Georgia. the the a production of The period $XX to to of the principally discretionary year expenses Michael, in fourth included Compensation million state Hurricane resulted same the of losses, related X.X and

LAE colder Overall, year temperatures, year’s insurance Plains increased increased losses including weather, and the impacted prior In addition, versus our the versus by clients. million prior period. $XX

$X.X the related earlier related core of efficiency ongoing significant earlier, referenced integration items approximately Further, enhancements – to X.X initiatives. that X.X and BORO As replacements incurred million and to were million final Hilltop of million ongoing cost includes by reported Jeremy. this in quarter system

take As future. to our businesses we may for related additional position the we efficiency continue term charges success, in long

to including full book market closing. year. to average deal driven versus versus dealer focus our competitive by the rates, economic grow Moving X% XXXX. Hilltop HFI broker BORO This the XX, value X% growth XXXX, page as loans reflects to the and over prior and the by activity pressures. or on year current total grew year considers of XXX of X% net ongoing we expect which XXX In the quality contributed million Growth at loans of loans, is fourth quarter acquisition, million Securities,

deposit we page to be remain have rate the deposits active $X.X fourth were XXX remain we in million to increase X% or the while terms in the by being not Interest have including approximately rates prior million ensure short term increased costs rates versus deposits interest our testing competitive, by bearing year. acquisition. and Further, approximately quarter modestly and XX. intentional billion X% XXXX, and the versus to offerings. Total continued $XXX with market, to increased overly Moving of non-interest aggressive have BORO or bearing

page for balance XXXX, are income to we providing items. Turning outlook and of full our for key year statement some sheet XX,

all the across change These capital support optimizing to will year and markets, our value changed. creating more not the in our to rigorously M&A our and The our Our franchise, growth perspectives updates, current priorities while going I'll forward. provide to organic calls insights the risk necessary it growth as rates delivering may businesses diversified we represents of Alan turn economic activity. businesses. now by outlook has managing of on overall quarterly and throughout on on provide

Alan White

Okay. Will. Thank you,

and and talk bit about ‘XX $XX.X a down bit recovery we ’XX, a bank me we had that's XXX $XX million you over The insurance quarter and the have income for our million, remember had up net bank tax year. before [ph] starts little roll first. Let Fourth was year, in on. did little as from stronger accretion good to the to it a made million

’XX, forward very had looking good we So, a year in to ‘XX.

X%. felt was about Our loan good growth that. Year-over-year, we

or or XX% year-over-year. deposit does it That not Our broker XXX have. BORO, deposits growth but million any include was excludes might that we might

So that’s true growth. pure

both good offs ’XX. side. the year we of provision a the for charge So on on little $X deposit million. had over look million good loan million, We side, the net make both of for $X did look $X we We

points December, still cats the billion. loan of do we of that, our All see says, $X.X Will weakness. the a cleanup had As extremely portfolio and remains aspects, about that’s no rates basis in we in total doing little XX rid We of that strong. loans but did getting

our from they're in from X.XX they're the ago. down in down at down quarter, to and the look fourth non-performings, third X.XX quarter a X.XX you If year

improve we to So continue those.

are Our conservative. aspects in well to quality We on past line our our all credit good. of and dues loan very remain underwriting are be standards the

of we trying excluding for Houston, growth in and are has that and strong focus approximately care on Oaks been talking that transaction in million competitive made and River market. a us. good a things balance. good looking taking out we're for the We on transaction $X We loan the road, to costs of relationships month, as customers our to grow to very our we're and continue Bank

that we're interest pleased net really with we’re for Our our and it was year the with pleased margin, XXX too. and ROA

quarter, XXX it For after year-to-date, and the XXX. purchase was accounting it’s

about it, So We the about really feel problem the the up we’re in hard fourth we're but less have we’re year. PrimeLending, in there We quarter. up over good additional a guess I are. but We we than we industry really feel going year-over-year, I were you same declined considerably million, know year. the about fourth Big branch, good not officers. did the period and tough and I in $XX.X a ended prior what seeing was a good bank, and feel good. an where it, and quarter don’t mortgage year, tough feel at it and some the forgot hired people the good volumes is branches was it’s the business, we XX making XX% it off it X, over been terminology, X%, office, XX% money improvement the out loan I I man, call I nevertheless, really there an got XX

that that And to some and X at in of gosh, us. better We sale the on the have pretty of big We it's The about really to well adjustments have really made risks of of to quarter that think and sale. when in lot going end been at we year leveled our realize the gain XXX. came hurt XXX did trying kind second point. we we around on gain we So about in that sale issue saw were effect things, a a do It's XXX from, XXX, light off. to down April now XXX to has gain on range. drop

attract people XXX income We come producing cleaning rid and you other that a and strength stability got doing, I the And have will you, officers, out strength up, been tell to of and we've strong track looking by rid side, for strong sheet. might purchased officers. easy places of have balance because and is we you and XXX to ask, not gotten $X able record, generating hired commitment to with with we've billion stability, not loan good a line. us PrimeLending we’re warehouse loan and and team were people prime for do are of on loan to but it's a what recruit that were company a do background are of the Hilltop’s and We backed officers in go for

they is So only but liquidity can of because forward. them been loans a so we've these going track to, they to prove people for strong be and which that and come position we know people, and in, think to get can thing get funded not good us their committed we’re good they going the funded to able know back

Blue So we're end continue to to we’re to sale, will We new closer gain be control controls. loan allow customers lot do to and it faster. loan lot on continue our help officers That us Sage. going play pricing to work lot able the to have call things a experience going in on towards XXXX to better our and on and do will coming operating our a into system better, our quicker a work

year. a but has change purchase a optimistic to back, company our market we’re So gain we that see it from I you're considerable been tough because don't in that a hoping to ’XX, going will able we’ll We're think be be, are standpoint. ’XX

business we're year. country. typical fairly it, Hilltop we So, competitive I’m have and had over that and a it this all very all but this mortgage right markets now across the Securities is that we're turn optimistic we all of can all around, and in over places difficult the they're positively

finance XX ’XX, had big income main has XX%, quarter the our then drove strong we XXXX down there in hardest, to was And good, just then the off was from finance. about the municipal tax quarter December is fell Fourth a been legislation after and in issuance is they was not think and new million tough million. I wall of of [indiscernible] off saying ‘XX that. really XX really business, public of one which public

a can So see there. significant you change

our deals we and along The that structured story in TVA volumes affected other income the the Hilltop was again kind prime, drop same finance our things squeeze of with drop us with spread that off saw and Securities in mortgage, a or there.

strong. lending clearing securities has and retail business Our been and

business been management cash has strong. Our

the Jeremy help mentioned, he of succeed place, in a as a we're but will he in to bring markets Winges can in in name bringing expertise think we Brad new opportunity that his As and for to Hill business. us lot Hill Hill, gentleman capital

that the his bank and to there. has to deposits each deposits liquidity certainly core prime. needed, line more money So, that our billion at available we we're looking the and $X.X brokerage help us we and worth but those are continues if to certainly of day able dealer us forward the broker to core and provide what can be strengthen arrival to come every The business, fund do position

million. we cost as were by year which far the Fourth profitable at we As got not was not Georgia, $X.X what $X.X quarter we us but ended hit were National we about million. hurricane Lloyds, hoping, in expecting,

And it so our mean such hurt ratios all not us, so of not does so balance were out that and year. good a

We relocated now Dallas. everything have in

on strong We out core to million our we hope systems bring recruit back here, tax. we can to quarter free made level working up about fourth ‘XX management we trying our everything in team we our and that in sales $XX the and of arm have people where we're had this the and we're

this we get company back bring the income up. back So we this can in think and can we

and So of was that's well continues bank my I businesses, tough It it help to anticipate to we continue to forward highlights. the a go report do year. and as these but the other basically year, rest the through

got. So I that's all

Isabell Novakov

remarks. prepared our concludes This

take We questions. now will

Operator

first Today's with Instructions] be KBW. will from Brady Gailey [Operator question

Brady Gailey

‘XX I X% just ’XX. the growth. the that in loan right? is average balance to that XXXX you the X% outlook confirm wanted to and Is over That average deposit all balance the in gave,

Will Furr

That’s correct.

Brady Gailey

loan loans like X% for balances lower average balances is higher the you're that for seems period and higher flat at about XXXX, of of than you it's end I in X% in if over it period mean, already had X% deposit than the talked and, deposits end XXXX, already ’XX. one, guiding to so seems average X% before ‘XX kind the we end growth loan that's just It period than to like, – a for look

’XX? mean -- and is this X that deposit growth guidance will period be it in there So does end loan

Alan White

My answer, we like to going payoffs. at payoffs the of the you’re We did no, experience ’XX. in of fourth a end quarter didn't have lot

we're see So to we're and those. to replace payoffs we’re have going going and to come to going it hate

I had think XXX billion loan of million about $XXX to that have $X about able loans you year, we last growth guys but be million. to of generated generate

So we book we we out do we payoffs, think on right we'll and and have can doing grow working the to the X% out that now doing that where that's think everybody that about I’d see I’ve are we're people sticking good got nose relationships our you to that street tell deals. with and

Brady Gailey

Okay.

on growth? going So able be be period end not makes kind to this the feel there's end at still think looking it I you do to you any from Hilltop, loans guidance of grow to it of consolidated ’XX, all because a like, basis, like will now of, said,

Jeremy Ford

is The way given I earnings. perspective targeting X% X% on of kind average given think difficult from secular about and across also any to it is rollover and we're a the at full That’s think predict, year the of to what basis. thinking way a income the fiscal the interest translates point net what off end is the portfolio kind of about is to it period pay year. we're of timing

move think want again to capacity. averages, we which of to I from So and represent earnings kind point targeting in balances, terms levels point moving away of of kind

Brady Gailey

higher mean a are those okay. percentages thought balances like said, higher, the just confusing, little so been the end I X% would when still starting, It's because you're than to I already have have X% but would period I average,

the may on, on quarter X XX did per more so just about of quarter like $X you X, just maybe is little does any moving not you scheduled $X So ’XX, accretion that to include [indiscernible], that that accretion Will, per a that I that's, a prepayment to almost of color happen? million possible sort mean, million talked million in

Will Furr

Yes.

past, in try X been view the I’ll has a it and as to X provide that's So accretion million million. scheduled to the

of assets or not decline, of the recoveries. the overtime. purchased size decline one continues portfolio say special to will if of become number extraordinary will will that so kind or be and kind however that though, portfolio does So it recoveries, include off, prepayments any nominal items continues continue assets to I and of you could will, decline addressable and

that's the run transaction time. given has favorable and accretion that's towards again those portfolio normal continued of over we’re -- as just the variances a did, the accretion, off So to end we but at course, running

Brady Gailey

XXXX? XX% that you also Okay. on would excluding that one of kind the the in think is that's to so PP&R, like timers of $XX the I to but into goal $XXX XXXX, so PP&R about roughly And is of all I to XXX I then unchanged, million provision a base one million I there, me, finally in you're starting between then XXXX, think assuming I for and the operating closer growth the noticed was at XX% for reported, in just are look and million XX%. if what that XX% from growth annual XXX, guess you EPS roughly taxes number in in timers, that translate guess there now then and so

Jeremy Ford

the I here let again, and we number our positive we the can the point go sit baseline and reported starting is but through use Well, of to and as go kind course you baseline think you if consider the of occur we we'll from the because as you're year, we year, that, the through will, principally, numbers realistic that adjust, any perspective, reported of all XXXX course as is to have of such. that you going to through XXXX any negatives be given go as of

Brady Gailey

taxes XX% the same, to that growth, XX% the the provision EPS And is and fair? assuming

Will Furr

noted, and as time be think there's we which not to basis do we normalization provision we loans. going points do of we expense $X of over of We kind $X in is believe point from HFI was would level our XX year, sustainable. total period to guidance, experience and the so for ‘XX. XX the would My as to be, of there provision expect million credit in a million provision believe, We do see increase put a

Jeremy Ford

the the really think, Whatever is I I that next other think started, And thing what the focusing value is creating is, over this the years. three Jeremy. we're difference on, baseline

So actual XXX to to articulate the XXX. from started to our it’s And we that. the able with be walk number,

Operator

from Point. with Chris is question Next Gamaitoni Compass

Chris Gamaitoni

a I'm business, quarter-over-quarter decline. the officers, XX% than bit potentially to overall focus from last wanted purchase lost in performed market to issue if wondering market loan transitory a And a forecasted. was pipeline the volume quarters, integrated quarter-over-quarter. if the just mortgage call new two a down or so you've at standpoint was a a it of company. I a volume you've fair lot think gets just little maybe from The worse is new and off that XX% system, you some hired was the I'm there share their rebuilds share forecast pipeline sure for on before market amount laid everyone consensus

Alan White

think I you’re right.

XX% a going any, our I for in to with share. but there I up. of purchase I market transition pick lag to XXX think coming think think don't And and doing XX% XXX still held in, out We're there's we've that we've the time business. lost

inventories of things. were I think kind those and off, volumes were off

a as think side. welcome game and people I back and you're these the is on getting be this as target our right on into So, far we think,

We're out are As them, people, good out and the of it's that business. is is running and shrinking being hire we say, because the that forever can effort. hire And a going pool to because people lot very running there recruit people and you people are there who cautious on we’re easy lender mortgage quality for pool, safety. but hiring, of I there's

Chris Gamaitoni

Is recruiting lenders it, of maybe most from, your call coming struggling smaller scale issues? are from non-bank that

Will Furr

to have Non place loans like funded can it all them then companies, where we and like smaller are they business of but out a know future. paid and larger, or get and for we can of go, going looking a bank their they're and get can be some lenders then are

and might to pretty may then the off we people people at, off they we We The that producing doing what we clean were be level tried to good wanted volume. So that people were of we’ve nor our we get that. been able and that make to produce work. doesn't not money, and money people got have enough attract any some rid hold these of good pricing were we won’t of and been making were

away. people did that to lot thought sale the April We and year. May were lenders we the out money. making these that were getting in and hell making on we’ve we So of and it half woke of they the up were any went we and a and great last we They gain one weren’t found did loans,

Chris Gamaitoni

All right.

not on the mean, the point? obviously, a a part creates I business, volatility, of retaining this update large thought why this business very it Just the business, an point lot what's at of insurance at just strategic of sell business not that your it's

Will Furr

relocated Waco. we is the done in we've I year that think last to from Well, Dallas business the what

and here other that initiatives Michael from positive it's lot pretty hurricane have with business of performed year, year this having businesses year. well So the rebounding also we it’s and last we a stabilize this the to albeit a for take all

continuing we're stabilizing it business So, we're I strategic make focus on and operate that's our right to what decisions mean, the to is. continuing it the and growing and

Chris Gamaitoni

ongoing back one-time the the growth XXXX does you expense potential And include the then said that for outlook future the kind cost you gave, that the and XXXX? just benefit towards year end charges to expenses initiatives -- of prior of cal the that would it, longer related

Jeremy Ford

all earlier, the we we year includes well as -- the investments and reported so what forward mentioned we of where baseline as Yes. of kind I growth the -- as targeted going this use It saves those includes cost forward.

Operator

question from will Rabatin Next with be Piper Jaffray. Brett

Brett Rabatin

kind can of cats and? entailed I cleanup wanted entailed to talk just that specific the the what Alan, few end a the and what you, and at rats was a and or in that your loans first about ask, industry

Alan White

and over of what was. of They’re it credit. already messing get take the board. clean you year, smaller out. wanted efforts and them, all collection it we've to to stuff One out. collected, it They’re that just get thing And around, couple had particular It’s loans, the a we’re just the that's up trying in [indiscernible] we’d been time them

Brett Rabatin

sale like from thinking thinking gain just to wanted for pretax then perspective you some And sale maybe margins pretax what modest for but Okay. improve you to know can, how on you to on have it to far and to go ability in there's and like profit a if ball, crystal us and just I gain relative year about mortgage can plays give don't been mortgage, a margin that this just happen color, think about what needs back seems a around perfect improvements you little you so margin did? out ‘XX spreads,

Alan White

on gain sale on working We're constantly.

processes our and We’re on control to and go a the better. that working our expenses place into put costs we've been in procedures We and and some looking our pricing that. lot at policies

pricing us going it, maybe Sage, of I some will increase. us away helps a our is help significant, say this I which I to it I think is significant got little think that’s operating on that of system, from also side it show control tremendously us the is an where Blue things, increase. pricing, all bit a loan those think new

better it But were. a don’t sale to think I see you time. get gain on think going to you’re it's margin. think back I little I a we’ll going to take where

difficult. first We’re in quarter first always quarter, is the

said, and in the there, better huge it to gain to So out focus and going like I hopefully see we start change from sale season the have as people or going business hopefully, in move bit better quarter, see back business think I to and a will be get system look in results don't relatively off the we think think the competitive selling trying we to than we on this we’ll the we’ll do can think get the and I away that's leveled standpoint, of to a is don’t a been then in a first getting in but to pressure you’re and but on profitability. a pricing it’s been I to alive, forward get as year, allow that go better mortgage If I able stay last a ’XX, forward. spread get decent step ’XX and business. it’s you little did now to can the of we hopefully bit people up, little can in hopefully these a go being a we fantastic thing forward

Brett Rabatin

that of platform just for or these that at initiatives lot kind and branches impact Hilltop bank core PrimeLending. the to to core relative bank just it lastly around just and then might how is core around the like Securities you seems else initiatives, And impact and the initiatives? efficiency bank anything color the a you're expect the of growth if and looking just me, Any

Will Furr

So this is Will.

centralization Jeremy the including data shared the centralized an Bank in of centralized of that as all Blue systems will I integrated impact of estate, consolidating initiative also organization, spot we the of a in impact integrated as information platforms ledger you've things think think banks. you're – but will terms mentioned, mortgage implementation in accounting about platform, corporate technology terms the will of and centers, real as service well. think our the Securities, And on entire and kind we look those we Hilltop got benefit set, bank that it's as Sage. in work finance bringing a general in across FIS the enhancements Then about are lot that related the at the

favorably targeted entire of well and global and are as services would the we the perspective initiatives a say strategic Hilltop sourcing perspective a PrimeLending, shared very sourcing I the enterprise franchise. a a have at strategic are do few and services as wide, Securities from implementations So number while shared will impact

Jeremy Ford

was like the bank FIS. through what think went noted I had be Securities They Hilltop systems implementation, the involved journey kind XXXX PrimeLending a of and of to are it's with already And done the in.

$XX program really is working factor just on I there something big So it's fourth isolating to the the grow quarter the much as of only on of growth a and XXXX was growth our said, acquisitive that's this aspect our in what costs a Will or of billion of I really lot this to and that and we started mean, other think here, were seeming it result are over planned will results and for across good going for initiative think wanted fully big and build most the size on we we and and what Hilltop. on and working franchise acquisitions, we the grow we've what for we been some been feel increase and time and executing and our to through of projects that these so a are has really entire the about an organically platform here want future this be because

Operator

conclude you today's as well everyone for want At this as question-and-answer attending will We today's this you. conference. this your now and time, thank to do disconnect lines. time, may session Thank at

Hilltop (HTH) 25 Jan 192018 Q4 Earnings call transcript