HTH - Earnings call transcript Q1 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Hilltop Holdings First Quarter 2019 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would like to now turn the conference over to Isabell Novakov. ahead. go Please

Isabell Novakov

Good morning.

this Will CEO; Furr, call are Ford, the Jeremy morning CFO. and on and President me Joining

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

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

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

Jeremy Ford

Thank you, Isabell, morning. and good

of net same represents For the the million the year. reported a with first compared income $X.XX last $XX.X increase $X.XX per quarter quarter reported Hilltop share, XX% XXXX, or diluted which of during

X%. return X.X% on on return a Additionally, Hilltop delivered of assets and average of equity average

teams both growth, by the and hard to and efficiencies organization. quarter's diversified our results operational commitment This our drive the are throughout of work strong representative to prudent

broker-dealer year. by versus This loans loans and deposits grew excluding X% investment quarter, XX% prior by average grew held for average

in the non-accrual reduction accounting net modestly due consolidated interest While coupled on interest purchase a rate between quarter from finance a non-bank pricing efforts lower increase markets quarter, linked securities to subsidiary. and market the basis alignment lower investment deposit versus last by Also yielded the Securities. of expanded and capital of on disciplined rates Hilltop's and a XX recovery. recent driven net prior higher to structured yields addition at in points during basis benefit by contracted million with It department $XX margin year a revenue Hilltop as year, higher

and increasing on focused book a leverage Tier X% remain was with value our capital share XX.X%. per of versus value to continue to X ratio year We by our structure $XX.XX creation, prior

Our credit million quality million loans, and at equated $X.X at million from evidences QX our of our XXXX decreased as risk the charge-offs in to basis points efforts of XX only XXXX. $XX loans year-end bank to $XX.X average non-performing management net

two we previously leadership quarter, to efficiency items and costs out, changes associated significant initiatives the including announced to the During organization. call expenses across had with the related

driven at yields, to PlainsCapital by lower increased accretion. accounting partially four. $X.X X%, purchase offset higher income Pretax or million loan Moving page by by Bank

do $XX the to volumes. the enhancements the and basis of note, of of quarter, Of reduced other QX lower were QX with pretax second managing as on declined relatively income of generated during made an from million X.XX% improved from PrimeLending assets half outstanding non-performing fixed for reduction cost points result Cost loss was XXXX. margins $X.X million the income continued the XXXX, Our team origination bank at XXX to a stable in commensurate sale line the base. a and million pretax improvements $X.X of gain in XXXX. headcount operational in job a loans, lenders bank and credit X.XX% from of from Mortgage declined, to of down or portfolio warehouse mortgage

margin decline volumes strong As in broker-dealer The quarter the we rates on reported versus prior with market continue a interest under to very of trading business, a profitability. year. combined in ongoing pretax XX% net and on XX.X% strong we gains. investments with The pressure, remain focus expect of to efficiency increase will revenues yielded

Additionally, the to compensation XXXX. from improved XX.X% in ratio QX XX.X%

remains quarter Winges Chairman. the Brad Securities Brad us to Hill Importantly, joined President CEO Feinberg as Securities. in succeeds of the and become Hilltop Hilltop who with

as in Hilltop We are Securities with of expertise well our caliber with contribution Hill advance be leader support build Hill team continued its core the very has such look to and contribution to high to have we are our and firm the grateful made to firm. for quality a will making as Likewise, businesses the deep momentous forward working to excited extremely the have for growth. we and Brad today, capabilities

portfolio business year-over-year XX.X%. The in reported was million during period. insurance current $X.X of a income of Our improvement quarter by the with investment combined pretax for fair market the gains ratio value the aided

five. Moving to page

and and projects include efficiency projects broad for to operations, set shared These for growth of costs the services. Our enhance operations of foundation a lowering include enhanced business organic initiatives future streamline and growth. and building acquisitive platform operating our platform goal a strategic with sourcing, and

the to by materialize are While we we and being to heavy be encouraged investment benefits into expect XXXX a progress year, made. largely the XXXX,

did contracts that IT lower and to quarters for costs has services services this organization shared the in brand’s middle work unify been and reflected the expected the size our and PrimeLending the the started improved office has better identified to than and newly back has formed of diligently off performance pay working team and Also, year and to profitability. right while Steve Todd, are last For rest consolidation. department example, enhancing with

businesses leverage size by of business We and the us opportunity combining are scale seeing Hilltop core the for centers data bundling and to software.

services and regulatory. two of our of enterprise compliance, operational our Another units, management department risk example and into is risk realignment shared recent cohesive a risk efforts and

company. very and grateful building. new this our within will Overall, what responsibilities management well as realized the believe We commitment organization duplication for of of enhance entire have am synergies response the and shared leadership model and risk eliminating the I are the as for teams our the we across business by and services roles capabilities

in Finally, and I culture. a Alan million of PlainsCapital our retired his past like you me others and for assets. outstanding Will April Alan now in partner, retirement. the relationships our co-CEO, great financials. walk and branch and founded with will White I over leaves many commitment building has one $XX.X mentor Vice to Hilltop XX would his years. billion has Xst four X,XXX Alan thank been give employees. a the legacy on friend, Bank heartfelt on and in and Chairman to to to We assets $XXX so organization. leadership him to well dedicated the a to presentation with over today Alan lasting Because in and behind through complementary businesses Lubbock wish XXXX, leadership, turn a of his In former dear

Will Furr

Thank you, starting on Jeremy. page I'm six.

As Jeremy XX%. discussed, reported the per attributable of equating to diluted stockholders, for Hilltop period prior million share, common the quarter $X.XX of XXXX, $XX.X to representing first income growth from

$X loan During the losses Hilltop’s million. was first provision approximately quarter for

-- The that their did bank Hurricane seen losses of related any remaining were to During ‘XX, reserve been performance have in first $X not to clients credit Harvey. Harvey sufficient incur at-risk, loss loan have quarter the as related previously Hurricane the improvement this million identified reserve. to business as released we the remove

see at million currently provision includes we Credit of remained closely, The points quality And first monitor any charge-offs very or exposures or are average quarter during material this portfolio of quarter net deterioration not do while bank concentrated basis we that credit $X.X XX experiencing the loan. solid. time. our industry

asset capital During portfolio that impact purchase for loan accretion we million continue declined amortization. notable and quarter. revenue income of scheduled per expenses resulting the Tier absence principally $X.X purchase purchase million accounting quarter, related was the current purchase of to the by It period-end acquisitions. balances related deposit intangible leverage decline, were purchase purchase from is to amortization pretax to the year period, prior million, first ratio any $X.X assets XXXX. accounting related accounting million of $X.X the the as a and In accounting and expect net expenses the X million a average represent to the driven in Hilltop's with accretion the strong $X.X related between and largely prior remains $X equity XX.XX% XX.XX%. of other of expenses X $X million period, purchase ratio to creation, Tier loan position loan common Related to quarter during interest FDIC

prior points interest to same of by taxable X% same accounting in in the to in the an which The equated loan The assets purchase of Net in million, the was net purchase million net accretion. X. the income XX margin, includes year. Houston net pre-purchase the by in equated interest increased $X first growth same points asset period accounting improvement margin X.XX%, including driven X.XX% the which year. in growth, $X.X interest XX versus $XXX in income prior loan margin to to the including Net income versus quarter, XX interest year. interest in an equivalent the basis Net basis of the expanded first interest Moving and principally page million accretion. equated quarter quarter growth, days prior or improvement quarter acquired versus

deposit benefits the the prior same remain We closely costs. pay yields the extremely as somewhat on and loan the clients. our higher compared While we as have managing to have growing rates increased managing by as been well period deposits, to offset in focused year,

have interest-bearing paused as higher. has approximately beta rates to from December Hilltop’s have As seen appears Hilltop’s first deposit of for quarter the we moving Federal XXXX, Since deposit been even has increase XXXX beta continue approximately deposits Reserve been interest-bearing XX%. expected, to XX%. betas the cumulative

Given period XXXX our higher through-the-cycle loan to first expect XX%. in decline recent which we the the beta rates, betas betas, to closer yields continue in from Further, generally XX-year overall of current will with the mortgage our increase to and expect decline that held-for-sale we will through-the-cycle the XX% the origination align quarter rates, to modeled therefore levels levels. continued move

will the believe interest continue X outlook pressure to our margin we increasing throughout accounting equivalent taxable do we X.XX% pre-purchase are remainder basis taxable the or full-year plus While to net accounting minus XXXX, points. these equivalent to factors NIM pre-purchase

curve by across shifts, the We our liability remained period million. continue asset year, future based increasing assumptions will relatively portfolios. the and have and movements, of earning same net flows prior assets rate yield on Quarterly $XX stable the Federal revisit in approximately average outcome Reserve the versus to

has change overall While lower lower lower it a as quality the to modest, taxable by and reflect, both shifts first securities, growth non-interest million. securities the high loan in held-for-sale. has been in held-for-sale, to loans a offset and eight. with as securities the moving repo quarter securities occurred HFI business These growth, of borrowed mix lower to borrowed shift well origination I’m has seasonal been average balances coupled XXXX loans activity page the for mortgage as shifts equated for activity as Total $XXX balances. income relates

First XXXX. versus quarter mortgage-related the first $X by of declined quarter fees million income

environment as year. XXXX, banking declined of same period quarter by million in the origination versus first mortgage remained the the XX% During volume Hilltop’s competitive in or prior intense mortgage $XXX the

challenged, relatively sale first were gain at stable during volumes quarter mortgage While points. the XXX remained margins basis on

With production decline we rate, modest the primary in quarter. mortgage in improvements recent translate did the the see in

stabilize of in to sales the and XXXX Further, Other the increased improvements the we and We current conditions. for remain with expect by market over assuming production in XXXX within origination gain $XX quarters, million, consistent volume the by resulted also an trading primarily in remainder line conditions that will page Hilltop million by Non-interest income XX% will same expenses securities volumes. sale capital on be Securities. activities levels. margins trading coming increased the range finance $X Favorable improve $XXX markets driven X% turning market increase structured at increase from businesses finance to in the spreads I'm both and to period volumes, in in in and million. year secondary structured prior mortgage-backed nine. a expect

changes equating mentioned, have a did to previously $X related million. announced the significant to Jeremy leadership of As set charges we

of Related the changes, to charges related charges occurring ongoing to $XXX,XXX do Hilltop. announcements. we recognized initiatives further these across we related addition, In efficiency to not leadership expect

make the Over our progress market are the businesses across past aligning continuing to the and efficiencies to XX months, conditions and franchise. driving current we

by to FTE million defined Variable Hilltop will same these origination $X.X expense. in $X by of prior efforts, expect by core for increased incurred ongoing related the which $X.X has Further, costs we in the prior net growth result decline of total securities do period that remainder business, offset reduced increase commissions period XXX, million compared declined the revenues in XXXX. expenses at the to salaries versus same these somewhat in related year. the by a in year, by driven and million systems compensation As the mortgage related enhancements,

success grow position driven by to the in during XXXX, quarter X% trends, real third estate year focus conservative pay-downs underwriting, to to additional expect competitive mortgage to X% our take by the our business. loans for grew of X% market XX. in continue page on XXXX. the full-year We and current average quarter outlook high-quality we the in businesses future. in increase charges warehouse growth lending Growth prior efficiency-related throughout I’m and an loans versus lending and environment, same our production loans our our Based XXXX. HFI HFI for on Houston was Total versus first the in the year long-term moving acquired may period average

XX. to page Turning

quality recent credit to We and ratios. our this have new added covered highlight asset presentation trends to slide

quarter to maintained highlighted to provide As the the our $XX prior loans the year. previously losses. ratio approximately at on credit These against the points businesses the maintained remaining from discounts future chart right right in reference for of the of the coverage of on loan slide, loan XX loss XXXX. of $XX quality million basis period note have allowance discounts slide, shown across for top first purchase the equates we to the additional we important and In that end bottom same is assets noted as pools. the solid on million It declined investment to as approximately chart the have non-performing the held

and as the XXXX, including XX. market. quarter costs acquired deposit are page to increase Moving continued approximately have increased first and Average $X.X total in versus $XXX have the deposits the seeking noninterest-bearing to billion of deposits million rates Interest-bearing deposits yielding market by competitive Houston pressures I’m monies money of migrating remain, products actively by their and are higher XX. savings CD on clients higher products. return moving page to the and from in investment

Bank release to quarter's the which a clients, The great During pretax the service the continued moderate Harvey PlainsCapital $XX and benefits $X and of growth during the improvement was improvement in which of demonstrate and million equated by quarter. the hurricane the revenue year growth the first Houston quarter solid The maintaining consistent, XXXX, growth. of reserves, while efficiency in results expense PlainsCapital of market, driven generating prior ratio aforementioned risk million growth remains of versus period, profitability, profitable provide reflect to operating delivering in focus income profile, our efficiency. leverage drive the revenue to positive by balancing the

for executed Turning efficiency generated quarters the efforts team to of the page the pretax that and first third solid PrimeLending the $X PrimeLending million by at driven profit a during XX. XXXX. leadership quarter, of fourth

in year, Further management the our significant the to increased expenses, PrimeLending same reductions prior operating origination have generate by focus While period Mortgage in branch mortgage for in XX% year, $X points, improved The yielded results the origination prior operating small supporting profitable back efficiencies, in fees XXXX. fees volumes and XX declined prior by same launch the volumes, operational the continue versus period efficiencies on yielded new approximately office million system year in origination successfully by loan the is performance as the focus declined basis the same and volumes year. combination increase which the and even prior in to versus fees. decline. is from focus on mortgage versus has pricing the period of which

solid quarter made XXXX Securities pretax of investments been securities The and $XX the improved conditions have Turning capital gains in distribution earned trading to finance structuring and from page the as strong businesses. that a fourth yield XXXX of by start business to sales beginning and the market are driven income Hilltop structured in markets had XX. to million returns.

from public period the same prior volumes the spreads both strong modestly as to XXXX from in results million seeing be as improve did continue $X market equity improve. million and loss Lloyds expect the business revenues these was moving finance, I'm National the significantly to pretax the during in the can a period in while results the fair to versus recorded to $X.X period-to-period. can improved activity we change year. profit are same quarter, rate, versus for year, businesses market gain and While activity quarter, XX. volatile of quarter the page marks a million $X.X yielded Related in prior

During Lloyds dividend bringing $XX Hilltop, the to XXXX of to million did total distribute of first million. quarter the dividends $XX.X since XXXX, National

to page moving I'm XX. Finally,

XXXX, outlook statement sheet key and For we're consistent. balance our income full items year the maintaining for

activity. As equivalent full-year NIM outlook with outlook our range increasing basis our we economic does prepared going but net our overall updates our interest by may The markets, our These that we noted, pre-purchase respect forward. year for income represents you are necessary previously and that change call the comments, not growth. as change expectations and X to calls for the to the over Q&A. turn provide accounting points, Operator, rates will quarterly taxable on we'll throughout outlook however current and concludes

Operator

you. Thank

Instructions] begin The go now Young session. question-and-answer ahead. from Please today with will first SunTrust. comes Michael question We the [Operator

Michael Young

higher think of pretax full snapping you maybe margin on past? total for you revenue good to the update that broker-dealer. the an kind year. us the start performance the this Is kind year? a your the in give last wanted and rate off back you tough a just for outlook just year that on provide of I Obviously, from quarter year Can now

Jeremy Ford

last gave that looked the range I to $XXX of higher be I'd so, No. conservative. We don't $XXX is million million just the to -- probably view quarter. my or

maybe But the say and XX%. so to the year pretax the -- is maybe business real quarter, not and for finance XX%-plus tempered. a trend. XXX of we had it's a This I'd in XXX be in a margin structured up early it's kind So third late I'd pop little

Michael Young

business margin within just from Okay. finance XX-year run should drop additional or in the whole revenue we rates could or some else really the at drove the just least rate forward not anywhere kind at the of necessarily about as you structured And maybe talk going magnitude? or a expect company that same where

Jeremy Ford

talking I Yes. we're what about. mean that's

long on we're And net so in mortgages. that business this TBA basically

about the million. when And it pop, us so was XX-year that think $XX I dropped, gave a

what last lot it's the the And went in we suffered so of a through other first way. quarter year

I how -- nationwide would first that's thing was on up and the the So And quarter Houston of that year the think up. departed, it. starting talk for just exclude municipal is then team on well. XXXX about if real quarter depressed And We're the the stronger as year-over-year the issuance. you business, other I issuance we're

being Brad's well. arms that's there. him good all well his So feeling get leadership And him there with company coming getting really Hill around built working and about continued momentum and and on to good employees as as we're the Feinberg's board the as know about the and

Michael Young

Okay. just switching And maybe to expenses quickly. really

But mentioned model the on good some where so year. going control we pretty help sort within be correctly? a incremental in be You year when we of And was units. can strong might you to kind that number of us expense with investment investments of of started can heavy year off just get to provide year Obviously, that timing going this understand can you just be? business those a are they any the

Jeremy Ford

think kind fixed-cost articulated Prime, on think rate. far of the we've run I we illustrated we've as a that of As basis, kind it

revenue out be million will to $XX where earnings and half the out to growth generating of As more quarter materialized. early, efficiency it's the from and and details XXXX, numbers in efficiency of far we going saves and be platform rolled as of XX% the later XX% more expense it, and initiatives, from into of going the ratio last other it's or it broader

anything the kind to tell savings. this don't to on level So, in phase I -- really to like how lot right We the of -- going don't of through have Will. ahead, felt now of quarter. about have offset I you wouldn't Go investments things those it a I

Will Furr

Yes.

we $X.X So, of expect in higher. add is, Michael what comments my I page reported kind of million our systems on of would in, -- do we nine those about improvements go core slide there, noted deck, to And this what quarter. I'd that

those are this the we're the as expenses a I higher So million we $X.X of through trend really we end through, would say, year. going year process few those across this see deployment start platforms of which number that to

Michael Young

that and point Okay. will kind of and going to how to occur much? of us in continue that call terms And out where you that's out to

Will Furr

Yes.

that to continue very we're be regard. in will transparent what spending about We

Operator

The ahead. Gailey go next question KBW. comes with from Brady Please

Brady Gailey

stock So, no trades I X.X tangible. buybacks at times this quarter. the mean

You're nearing XX% TCE.

get guys Just updated this you And buyback? quarter? on no the wanted why buybacks how about thoughts think to

Jeremy Ford

no a To this start why doing buyback in were share quarter. Clearly we with we the that we not latter legally part, actions corporate that position felt to had some repurchases. be

in -- the were inactive that's we we why first with the leadership changes. quarter So

as toward as future back have we a obviously we about the look $XX share do do we windows, had we share active of the the did in little last in repurchases. million million continue so stocks we that we'll be authorization open have. the and to to plan $XX we And come market year, and bit, As and

Brady Gailey

your I mean, then, the NIM going to was XXX quarters, quarter. But level, you, X hear in it mid-XXX couple basis Will closer has on core been NIM core points. last guidance at of look up running the And the I you this like if

down So you're core the the about margin recent that past? level to talking relative to gets the what

Will Furr

Yes.

higher view of on the the increase continue betas which is, of the to loans to continuing the of are going stabilize So as where and see comments. sets. do in I some this ours period, pauses think if pressure, to linkage to environment expect a under to -- direct Fed I different even mentioned, here deposits XX-year we are it I yield, the given competitive competitive even presuming with kind was from tried the to couple on side highlight that But be held-for-sale the is. rates we deposit Fed, Further, a the

And things And so we then pace, on for yields in the book, to a core takes its pressure be funding market. pull also way intensely it particular that do while those in loan expect if given you to remaining levels through, pressure. will an and competitive commercial about that quarter under are under lending two

And so, perspective. pressure, as yields, both it, HFI we under at yields HFS also look deposit under and and loan beta pressure from a

So, would think we Obviously, that's it what the And changes, take range, there. X.XX% current reasonably we would of levels. us kind to about as with X.XX% right market again, consistent we conditions assuming that's any evaluate. see how now, stay

Brady Gailey

Okay. All wondering, was guys are with the Halloween probably I Alan finally, being question, if with to important going video? you most right. my And then, retired, continue

Jeremy Ford

Absolutely, to we've committed that.

Brady Gailey

It's to great. wish him hear not on That's weird best Alan's in retirement. the the voice call. I

Jeremy Ford

we appreciate very you agree. But, thank and that. we much, Well,

Operator

with question Please comes Gamaitoni Compass from go Chris Point. next Your ahead.

Chris Gamaitoni

of the Going hold wanted much you has well. structured down like completely get at very having XX-year April quarter now not have drop are business. finance on I that end always the touch in spreads on the where I What benefit your inventory. been the XX-year the looking or volatility? to the as

Will Furr

current levels. of want QX. is don't say rates quarterly stabilized give and spreads, at think kind guidance I'd But had again, around what I to the reasonably here I market

after outlook rates with of or assumptions stable the and this forward March expect going virtue we reasonably remain expectation going of that, -- the our new forward year. by so reset And our levels

Chris Gamaitoni

to give or expense. expense All for I right. a total us of the remember core systems number the correctly, integration year? did you of Getting If kind

Will Furr

a to to as windows. deployment quarter work through through of the through and we're been we Historically and higher level implementation, absolute implementation into part closer quarter-by-quarter, and year, million. million, not. is, travel do But this difficult And We expect the we have final work we it. pace $X.X spent an $X we little that again, it's saying dollar is our put we to it's as that on what

Chris Gamaitoni

looks attributed loans. job fourth fixing And up one great congratulated be correctly, mortgage another expenses. year. quarter, But call variable like that. at a the If I I higher It following you on you seems need money you've out remember the the for on comp it done mortgage, you've think to for operations loser the in curtailed, really like

think down a So throughout -- at variable with make volumes be year-over-year will least the -- and the lot quarter comps down. first stable year that me in volume, that is should down if

Will Furr

That's correct.

Chris Gamaitoni

my just Okay. just loan is I that construction gap if loan of why if your loan I than higher least one on be I average the upward is rate that don't guidance? first and would And you of quarter bias commitments. the the X%. just It of kind just warehouse growth unfunded take do number at has then your assume our all last year, you take average guidance, could there's seasonality mildly bridge your with seem rest of at grow and balances lines for growth guidance period-end growth I know still won't Can billion $X.X the

Will Furr

otherwise where pretty would with have first think the to expected. tracking quarter I we're Well, we close

the virtue business lending contingent improvement by in and which And mentioned did we also, know see, as in of we the trail again, market. will mortgage warehouse my growth or that, our So upon comments an toward volumes is year. I seasonal mortgage the of end in

underwriting intense the So given maintaining that, is the to And prudent businesses. an virtue in and grow, where market our it a we of seeing that's structures we around we by performance. of are guidance then that continue currently And we first the expect commercial where driver to first kind -- are lending quarter relative think the while will is. pace to be at pressure of driver

Chris Gamaitoni

answers. it. mean, All have Thank you appreciate that I take of I -- right. estimate offline. don't much much so the how for I'll you an

Will Furr

you. Thank

Operator

Please The Jaffray. with next question Rabatin go ahead. Piper comes from Brett

Brett Rabatin

level market, you and I income wanted guess, improving. mortgage. little guess, follow-up guidance -- I about you to last year? on are gain-on-sale But I that volumes mortgage. this around you I higher not fee ask, talk And mixed and from why a some of And higher guidance been with kind to But strong mortgage, than the on still struggling bit surprised get not fee this banks just expecting income expected around first I guess a that player guys I'm had year. various just quarter I guess, in just results there's I like you're I'm

Will Furr

is So, quarter -- it a both fees, so to volume year-on-year, the over billion. down was volume quarter relates XX% as just origination which first first little $X.X

of the think you of at we expect. our -- as year kind rest what the about So

that to travel like down levels production been line look point. That's improvement expect going what has obviously XXXX A. with this to We to versus an it's is which year-on-year Part of in

of terms X%, large second recognize be to origination activity of that quarters. third a movement rate portion Jeremy as generally that rate our next strong do our structured of -- And expect in significant then to TBA as portion mortgage and the of non-interest overall the Securities. in mentioned, did that capital see markets portion driven income was But In guidance finance we by businesses late business Hilltop generates X% business in movement we March without and additional a is rate the both recurring. you fees quarter as and in the the wouldn't of a that its mortgage our well

year. that, through of that quarter guidance still cautiously be quarters and And given those so at in prudent of we second optimistic level. we're volumes we But it's to quarters, fee generation the current will -- that stronger of the this maintain income think the third production a preponderance to result as need

Jeremy Ford

on just And follow-up that. a

X last a gain of to little origination I off but bit year-over-year. their fees basis they've on sale mortgage maybe basis. year, points, job bit The and from basis great up That's a -- a think, specific done increasing little XX mortgage more relative loan margins PrimeLending. a per-unit on points

Brett Rabatin

it's Could XXXX, on are working And other in guess you through ratio some like XQ trend question over you initiative realistic then, next a going ask the I maybe guys ratio us I XXXX on very we just how do where give at I year? you're color to? expense XXXX a the an whether or job that efficiency expect wanted can efficiency is like think might doing the to early. good you what's get to you pretty goal, think think and the As about

Jeremy Ford

You're talking a consolidated on about basis?

Brett Rabatin

Correct.

Jeremy Ford

now. I have mean to don't give Yes. that we just right

we're to -- go. as more. curve be we're get able with where And that think is the articulate quarter I closer just trying articulate shape of try we one to we end we'll to

Brett Rabatin

just And me. maybe for one then last one

profile of I trying on company Just Houston just much I be in about money of on that's XQ just grow or spending how and going either you've the Houston. talk to wanted rest and Houston-focused? the growth, hear, of you the been year, Can vis-à-vis how Houston to of to know Houston. much this

Jeremy Ford

-- as far okay. As

think... I So,

Brett Rabatin

not other bank, stuff. Commercial

Jeremy Ford

Yes.

same they're we that going it's had leadership Lane the And integration building we've the together I articulated not think that pleased pointing there we maybe process -- of I all, and and in the that's and think now, great there. getting really I a that and we And and there. a are and funding -- the Brewer job. with got and right see really wasn't level Troth, through as actually the there's But, do cohesive of And that really business, loan towards credit at quarter, some unit -- significant. first hockey want time first to some growth and be Mark a one in a think things Andy we're stick. so opportunities are doing Jerry come growth they've Houston

Operator

session. has question-and-answer for attending also our The conference presentation. concludes This Thank today's you concluded.

You may now disconnect.

Hilltop (HTH) 26 Apr 192019 Q1 Earnings call transcript