HTH - Earnings call transcript Q4 2020

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Operator

Good morning and welcome to the Hilltop Holdings Fourth Quarter and Full Year 2020 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 now like to turn the conference over to Erik Yohe. ahead. go Please

Erik Yohe

operator. Thank you,

strategy, get future These of today's started, in of fact, certain we impact outlook, our concerning note statements for presentation conditions, credit COVID-XX, losses, please that stock well are that, as during current the business our presentation preface as historical potential dividends such statements events plans, not based financial as concerning such management's forward-looking allowance nature, the impact Before and to items that statements. future statements including statements their repurchases and other are on items are referenced and risks by are expectations subject uncertainties. of

variety financial may recent precautionary liquidity SEC. data actual statements the filed we preliminary any from the result presentation of statements Please by capital, law, to referenced Our information expressly in with this a and that new information. the of those report differ most required a is factors to condition our earlier results, update included at in our including Except available obligation presented note extent these and report the upon materially quarterly and as annual to disclaim statements based and time. due

and presentation, measure presentation includes GAAP Ford. Additionally, CEO, President to turn is may share. tangible posted book be now A With like tangible in non-GAAP value which certain that, this nearest at common ir.hilltop-holdings.com. found presentation appendix over per to Jeremy on measures reconciliation including measures equity the this to the I’d and our of website the to these

Jeremy Ford

morning. good and Erik, you, Thank

X.X% period or million of income diluted quarter the final with $X.X settlement assets diluted $X.XX $X.XX increase representing on the a from share. net diluted sale was $XXX XX%. National Full quarter off share diluted $X.XX the from equity XXXX the of included for $X from and per million or This remarkable diluted return fourth discontinued This share, growth net XXXX The of share. an million, of for or year Full $XXX or reflected Return quarter $X.XX share. to per average increase equated For the Hilltop organization. fourth million. from per of Lloyds or $XX capped XXXX, National an XXXX. million in income Lloyds fourth $XX was on year per reported year results of average operations million per $XXX

due a or primarily PPP broker-dealer $X.X $X.X $X.X businesses. the loans deposits average increased XX%, tremendous billion for We X% as loan mortgage increased prior by by Net as totaled year fourth $XX volumes to and quarter continue well. finance, quarter the period the fixed billion. billion structured Driven bank’s and balances, on XX% from million of robust increased grew and finance, public year or prior to capitalize revenues the for average originations prior year market over by same the and at from income for

XXXX. and million is payable of quarterly dividend $X.XX February This tender us Board XX% Our in and our a cash X quarter. million common that paid repurchases. where increase the Hilltop was distribute approximately prior share dividend includes million capital common declared XXXX stock. auction dividends the in both in quarter, This enabled of Dutch Directors repurchase position per strong fourth executed shares of from the share to on to Yesterday, XX, $XXX $XXX of

of at modification. approval active as we second continue banking of $XXX the the the of The from COVID-related million, down quarter. XX to deferrals total During balance clients loan impacted December of our period, was support million to end the $XXX

clients. from us, was the and very and the of lower volatility treasury December by and credit occurred This take in as year and reflects had reserve company-wide to fourth believe the proud of us XXXX $X.X how payoff, the clients teammates immediately ample onset as the X% all quarter, to loan the markets the bank's of was liquidity businesses $XXX we our a XX, for totaled teams driven care a pandemic, third as I'm our million together they allowance the better of in or reduction Our losses capital a challenging I portfolio. economic company. to ensure for outlook. communities At of needs balance million of of stronger expected which and which charge-off so serve. our than well other shift our responded quarter each made and pulled to manage of our serve a the

human As our and resources transition enabled technology, a of groups work-from-home of in well XX efforts less our effectively to the days. than employees management us model to properties XX% coordinated

notable, months highlight did Although, for partnering It work. Hilltop complex loan PlainsCapital their the that culture most company. Also and pandemic change from their the in the and impacted pandemic, by of breaking caused deter year for way supporting our their making loans X,XXX the originated PlainsCapital quality also and clients record XXXX at commercial short our and to our a and team not were bankers. we Bank a initiatives. of efforts consumer progress was banking PPP clients payments deferred few in company on large the our

net billion $XX record record Securities generated record in million produced a mortgage funded loans, of $XXX revenues Hilltop Hilltop earnings. PrimeLending As and

conditions we continue favorable market Importantly, not expect indefinitely. do to these

businesses, believe that substantial established and is embark Hilltop XXXX, with upon we As well positioned capital. synchronized leadership we

Slide as income driven interest margin XXXX, interest provision to with million Net million Bank PPP from $X.X of Net PlainsCapital during loans. Moving linked-quarter increase X.XX% period XX reported. was $XX interest basis from income had the million and fees QX negative increased a quarter by solid of of points. was of X, pre-tax income a $XX

outstanding XX% net of Finance million increase an million, had origination by million, fourth QX Hilltop points, XXXX, Structured both $XX TBA key the revenue volumes grew from the with XXXX. $XX capabilities quarter income increase volume. grew basis increase a addition. revenue of sale from bank XX%, margin the payoff improved That XXXX. a Public lock a on by gain Securities. XX% for generated PPP in an $XX XXX outstanding talent increase also proceeds net $XX XX% and volumes, sweep or reduce incredible an Finance to from strong of of an Securities Hilltop XX% by XX% quarter an finish million As PrimeLending was pre-tax net income by to revenue and Services Services from from and loan driven by driven quarter deposits a Fixed cash PrimeLending in robust QX by grew Income utilized of year driven had fourth team. pre-tax and

enhance XXXX, to Moving future growth. our In set X. late the operating platform Slide announced and with of of operations streamline costs and foundation lowering initiatives a to goal broad building for we a

the origination changes and replacement the succession was first of loan the revenue through as through system and organizational $XX benefit And the alignment resulted This end was PPNR services. by enhanced front-end shared Hilltop reorganization business run we leadership the PrimeLending cost and systems large staff FIS Sage and at projects program effecting with of the PrimeLending making XXXX, management in of main of of restructuring legacy with the plan Blue we certain in in deliver area XXXX organization that of to goal three centered streamlined Securities. million million have operations, Through sourcing, and operations rate platform risk XXXX. and operations, core business and $XX strategic enhanced Hilltop’s end such the in benefits. in improved Also, Our the we have completed XXXX. areas, around

data do leverage as with supply. to order our Additionally, area the platform Hilltop advantage build was was huge sourcing shown software, in platform includes single a compliments of organization contract results and hardware been platform of our for a established we travel and strategic continue this, sourcing, vendors, And strategic procurement discounts sourcing, pricing In leverage Securities, services janitorial that MBS focus the to improve aggregate vendors. IT services to to contracts area The securitized will we better has discounts our office shared a positive rates an and through entertainment and contracts. negotiate organization take second which we that to focus the all enterprise origination scale last and the to and is a to effort mortgage to we work and consolidation very group supplier Notably, across enterprise. the and to of and a support businesses. has and agency third of implemented to at entire size organization which the our better product of the effectively and enable order

of for centralization scalability the the and the We financials. services importantly, in rate will organization and our now communications certain we better Most turn presentation acquisitive that, departments enhanced across support the controls, to have talk and most run to has through organization through responsibilities, functional over positioned growth. now organic us I Will With both costs. have shared to redundancy

Will Furr

I'll on Thank you, start Jeremy. X. Page

of Hilltop for per consolidated equating operations diluted reported or fourth stockholders to share Hilltop from $XXX diluted As produced per to of Jeremy continuing the quarter. discussed quarter income the XXXX, common attributable of share. fourth $X.XX million, income $XX $XXX during million

to continuing operations XXXX. $X.XX reported stockholders full to to income or continuing from For million reported Hilltop of stockholders effectively $X.XX Income from share. $X.XX share equated the available attributable share. diluted $XXX doubled million operations per Earnings or from common common consolidated $XXX XXXX, year of diluted per per in

other to accounting for pre-tax expenses current In $X.X largely assets the net purchase related acquisitions. a fourth quarter, amortization million the $X.X During to and related and the period, $X.X million prior purchase in of impact resulting accounting positive represent expenses was purchase the revenue quarter. of accounting the were intangible million

of assumptions, The fourth of losses for in recovery improvements the allowance reflected quarter, provision client reduction as well the charge-offs. payoffs a pay the net a million quarter. and the losses net loan million as in loan during the $X.X macroeconomic of net and downs yielded the for During included $X.X impact

performance capital remained strong XX.XX% XXXX, of X with capital result XX.XX%. Tier of the common of a earnings year-end leverage As a taken ratio in and Tier and actions ratios equity X Hilltop’s

million macroeconomic allowance volatile to the allowance credit equated and will by $XXX changes could of prior time. we the X%. in and recognition the referenced be for allowance of year-end of note, X.XX% and portfolio, Of million period million losses remained as be result and credit the over the by credit the continue deposit the PPP $XXX third and elevated increased in Year-end higher versus interest of in quarter from Page X. year XXXX XXXX. X, purchase the third million, by assets. driven lower remain loans that the and including to pressure XX broker quarter a fees, institutions, the their Net Page the at-risk quarter ACL income versus versus turning balance. decreased quarter to prior income as XXXX growth by $XXX Moving loan modest for interest net were by the yields lower the to in versus margin, debt TE able somewhat to versus resulting approximately I'm interest $X.X believe bank losses specific yields our of macroeconomic ratio previously declined decline changes $X Loan clients improvements the cash balances accretion, of origination in the HFI net origination to and credit Page allowance driven deposits on migration which of PPP prior as in payoffs accounting fees refinance X, to million year of our here deferred to outlook a reserves losses costs for quarter, whereby Hilltop’s points million. as outlook other or of basis Net fourth $X.X shown declined

and an loan by where the X.XX%, continue originations in quarter, return as book-to-yield deposit lower maintained X lower quarter of deposit approximately the customer deposits renewals we costs points Total points. X basis is third which During broker than average basis declined originations including to rates the appropriate. by of XXXX quarter, bearing credit interest

$XXX yields margin as pressured rates commercial remain We across remain competition and interest low, the putting aggressive expect to Page net the market for fees non-interest quarter loan on quarters. million mortgage I'm interest XXXX held could to the by related the production total quarter remain sale And pressure coming equated XXXX. fourth for will Fourth income the X, new portfolio. fourth of over yields income of quarter net income $XXX million. overall and and versus increased moving

quarter, in terms mortgage drove $XXX mortgages, and strong remained $X.X XXXX, business purchase rates, million mortgage improved prior XX% our outperformed mortgages banking or During demand refinanced and billion volumes, by origination lower the fourth year improved purchase or versus substantially by volumes driven of of increased environment quarter refinance XXX%. by and increasing in the both the which expectations our principally for

the quarter gain-on-sale points basis margins improved of XXX during to volumes third were While strong quarter points also XXXX. by very versus basis X the

improve While full and by in Hilltop TBA tangent market of to driven the since these to a finance the rates, businesses somewhat XX% to be increase $XX.X we provide is improvements that XXXX. we could investments believe market evolved businesses basis trends. XXXX, sales XXX activities conditions. liquidity securitized capital by be XXX expect And volumes basis structuring, products on of million, will we can in third market margins of production move at in overall points while in their ongoing impacted have to expect in structured sales benefits, Securities. versus and continue they primarily quarter markets by recognize prior businesses and training it are benefits interest making the conditions income increased and locked continue to Favorable both investments period-to-period important as these resulted bottled year from points gain-on-sale period. been margins distribution the average realize in capabilities year our we to Other The range

by was in of The the approximately year non-interest compensation growth at This $XX to expenses variable variable fee an increased Hilltop and Turning revenue period. the prior prior compared in $XX compensation driven expenses PrimeLending. increase Securities to the $XXX million to million increase period linked Page quarter in strong in prior by the in the year XX were versus from same to million. growth year

efficiency levels further XXXX, will will investments we That record streamline remain few over our manage that said, to digital Looking forward, last of ratio. the aggressively put decline businesses leveraging revenues XXXX, the pressure focused while we on we've costs, accelerate which to years transformation. our made our from our expect improvement, and fixed we in on the continue continuous

period fourth prior remain XX, the driven tibit by versus the PPP average was Turning growth stable banking principally versus loans X% pandemic. grew the quarter. during to in loan prior demand of same in second growth period HFI loans Into versus by as total XXXX, quarter Page throughout loans year the the remained the year period commercial has

prior consumer As and from call, loans million conditions. earnings subject we on our are market we offset between clients, help to to our planning retain mortgage at noted $XX $XX million per demand commercial of PrimeLending month to originated

the be of loans blocked over approximately the X.XX% FICO loans had Capital LTV to PrimeLending of and and million average XXXX $XXX quarter XX% These to average Plains an months. During delivered XXX% respectively. of and fourth yield coming

teams pandemic. have data highlight throughout work to gain credit clients to support our Moving this This Page XX. by been the or ongoing doing

ratings result to that consistent and note of our XXXX, were reflect borrowers. of active active $XXX million at XX.X% the clients had and for XXXX It Hilltop a As cases were financial hotel deferrals the of reviewed and for are a an represents restaurant concentrated important the of this many credit of to carries noted fourth in clients this we our each loans deferral In and managing XX% approximately policies these third decline with loans the in This portfolio total, allowance losses of of quarters existing current portfolio credit and from of XX/XX, program. is as credit portfolios. situation is X/XX. on during as adjusted exposure an these

currently the continuing As active deferral, focused million protect on rated on result criticized capital. remain bank’s million as while $XXX clients are We times of loans our supporting the challenging loans. through $XXX of a the to

Page to XX. Turning

credit million During the allowance mortgage including page, at to or both the ended at loss graph, for XXXX on charge loans. loans, total it’s basis of net quarter lending, the offs warehouse bottom $X.X shown X.XX%, as coverage as well the PPP to equated points the the as XX HFI bank right

maintain as well banks loans to for loss and HFI the We PPP continue content loss mortgage believe warehouse PPP will allow warehouse, our as time, loans over loans, including ratio equates to mortgage both that to X.XX%. lower credit

and average customers XX% government $XX.X efforts challenging XX. client driven is stimulus are as to deposits quarter or during we've and continued Turning $X.X times. versus remain Throughout shifting customers from the increased Fourth approximately strong total quarter it Page these pandemic, at flows behaviors our billion XXXX. of experience to billion, by cautious fourth deposit by normally the

million will $XXX into deepening we and in successful of base The expect an growth was $XXX, be and that inventory deposits average we’ve customer All points, million client of XXXX enroll to $XXX Securities and quarters. them to to XX deposits, basis Hilltop million quarter, wallet $XXX and deposits continue it $XXX of broker additional Page At our XX. broker the that of services, will this points, sweep in ever of growing million fourth noted of the we have basis X/XX XXXX. by yield and should products maintained of quarter an maintain XXXX. broker to return deposits XX for grew will allow remain levels to elevated, deposits continue they over be Hilltop continue the from approximately focused these the I'm maturing and to we share setting million XX/XX accelerate coming moving fourth blended in the a of XXXX. treasury which During on deposits while remain yield the $XXX mature maintained broker by positive

income did period. presented recapture right resiliency million across year drift number $X.X and recognition teammate solid and provision $X.X bank profitability our previously clients generated benefited producing mentioned reflect million down for the the credit the of During this of Non-interest we're million, has losses the of the quarter of fourth the ratio OREO certain of of Bank from This $XX PPPs. PlainsCapital, $X.X pre-tax for business. the a expenses in challenges assets to from for quarter cause which quarter, pleased PlainsCapital higher the the during XXXX with very efficiency of million

demonstrates team our the great fourth growth this The balance while X,XXX delivering clients driven XXXX remains by protecting approximately of focused for clients mentioned, Page been that I'm have In the in delivered the that profile. for moving most the payments team XX. providing a Jeremy of and on Hilltop. providing our deferring of profitable the PPP year pandemic. the to by XXXX, increased quarter solid impacted and XXXX As by of prior risk origination XX%. to from $X.X bank for billion $XX support for customer those million principal customers the service a while loans strong moderate and pre-tax PrimeLending profit generated by maintaining volumes work

gain-on-sale This during discussed As noted the margins fourth earlier, during the half second continued sold retention to of million. and quarters. we $XXX asset of XX%. previous XXXX, expanded In the loans of of the fourth Throughout end calls, the the MSR quarter. quarter during servicing our the year value second percentage third and on with a of we retention rights reduced MSRs

PrimeLending and at on for In PrimeLending execute grateful volume both for our generating assets remain year, will sales is of profitable operational across potentially a execute first We deliver customers retaining XXXX business. outstanding forth to record and mortgage all levels expect to continue the for robust. during to by results efficiencies if teamwork PrimeLending servicing almost delivering Hilltop the the throughout XXXX and And We're market participation the half looking effort we market on to these XXXX be and and conditions. will year subject company. continue our focused these measures. across reflects put

Page to businesses, in capital our over in from backdrop. delivered XX. solid a infrastructure finance years $XX have fourth talent Moving profit XXXX the finance, public markets ongoing which of and by Securities driven structure few Hilltop quarter last benefited constructed market the and a pre-tax in investments million and of execution

growth, and versus we even in risk the services, revenue to across offerings million country. which net same profile. the business in while decline. overall delivery, of expenses in The bankers prior across liquidity on While and delivering set quarter, execute professionals moderate is to municipalities Hilltop deliver same deliver enhance market to plans, a in product investing activity solution market strong differentiated finance sales year, managing our within the fourth This the to continue risk product is was Securities growth our focused issuance operating revenue public optimizing additional the period quarter highlighted support able was XX% the as and on our $X growth volumes for profitable and

Turning to Page XX.

long-term of risk our over remain our clients In a remaining centered safe years, serve, circumstances the delivering opportunities the customers to to presented as moderate where in XXXX franchise, a customer focused very take our we meeting the to the of to infrastructure evolves value. and delivering team's were market of our remains new teams communities work and the result nimble shareholder profile our we customers Further priorities as clients. franchise XXXX. As financial serve the our past by and attracting XXXX, great our as walk supporting clients, safety and maintaining on to and for some the teammates we times few our service advantage well-positioned ensure hands challenging during leveraging on possible pandemic

concludes that the continuing the of to back year. we'll volatile financial call. prepared it, with our Q&A call remain current to of the marketplace, for could current during to provide turn the quarterly we we business updates uncertainties in further the call. you most XXXX Given the for the the That's commentary future continue environment, and providing our the of are pandemic the but comments, our to will throughout not Operator, guidance, we specific provide including section as impact are outlook understanding

Operator

Matt from Inc. Olney go ahead. with [Operator question Instructions] first comes Stephens, The Please

Matt Olney

it's guys want fully forward gave easy of billion I at arrived and that and to originations. of you you some $XX to guidance how how hear for you to how you're us that. the at I to kind for XXXX, about mortgage, the Great. guidance wrap to hear especially that not any Love on appreciate, Thanks. kind guidance, start guidance the we'd business, guys Good kind in but mortgage morning give of $XX love Thanks. some range thinking billion of guys.

Will Furr

Yes.

So other evaluate which market we MBA perspective. volume for and will obviously obviously industry in a we but outlooks somewhat XXXX. continue think geared number the grow the and kind refinance challenged, mortgage be we also of of will thrive think And market purchase model, towards is our to and oriented business

the So we is as was battle to left earlier outperform recognized noted a result somewhat significant. positioned outperform believe about we we positioned as market be but of of what what saw do our that, And a pullback. can that XX% expecting we believe to we out, mortgage we are the volatility the you kind that, in market that

are, we'll of a provide perspective there provides think those what well. the a basis updates but likely to quarterly try outcomes as that we we provide So most some range on

Matt Olney

thing Okay. seeing color Will. the have we on that what the range at that, of that end you're year? how of the throughout would Is could XXX the and That's weeks on year? few the thinking And – basis down about like them? assume the the should higher guidance moved the same margins, basis And XXX point, you first any helpful, gave gain-on-sale point, you're – then start

Will Furr

I think that's right.

the evaluating – – – stronger first of expected. part are of part has been first year XXXX the you the first we're than We is would've otherwise seasonally way

it volumes range the described well. than average XXX in they for continues [indiscernible] thinking year For level. that year of through we the the full the as first the volume to that think to fourth quarter do down but remains expect a We little quarter XXX of to kind will just peaked do year we will at, of we normalized gain-on-sale about – stronger XXX peaked believe down, way more they a to the basis peaked Again, be roll think trend points. you

Matt Olney

be rate what it the the the front, us Okay. I around the materials quarter? question third you there think night, the didn't can And see lock of last were any fourth can then with quarter-over-quarter, in a the on last know I interest provide million was $XX quarter. in commitments thanks. I mortgage evolve

Jeremy Ford

Yes. come and which out That quarterly indicate, will fall number will in February.

want to get don't the case. I of ahead So

Matt Olney

Okay. Thanks guys.

Jeremy Ford

Thank you.

Will Furr

Thanks.

Operator

Rose Michael comes James. The with next Raymond question go Please ahead. from

Michael Rose

How morning are you? good Hey, guys.

Jeremy Ford

Michael? Hey,

Will Furr

morning. Good

Michael Rose

Hey.

So with guys obviously the robust here. past buyback, actions did still the know it's capital pretty guys you strategic Auction but levels M&A past, and are quarter talked this in now some Dutch the you capital about you have the I you give a on where multiple willing about just us environment to for talk improved. kind update Can And has certainly an would your capital time in if priorities? of guys. Thanks. capital then normalized you'd be levels

Jeremy Ford

Okay. Thanks, Michael.

an by capital I the tender with think we dividend the offer XX%. did is as also far in have, and increase I think a as strong concerned quarter

XXXX, us opportunities other buyer, We partner it business value seek out really we will M&A right to as I good really be and looking that. And say was we our for I want for right in to – repurchase can again, insider want and well. and think to a stock, hope we liquidity now, do – $XX I all that's given our as than the share million we'll ownership so model in authorized

Michael Rose

at Thanks. on the or the deliver is small of macro? optimal you the Houston fairly what would deal it's look excuse was have terms accretion? at But me. at know Dallas what in market, that we're of whether the market you in did the you deal priorities looking from done, kind size I follow-up to this think guys whether I or are kind last point, what the Just given guys in of M&A, we

Jeremy Ford

to think biggest right the set for find I the is just us. thing strategic

that's be. to and would institution going commercial bank in that's probably priority be only a what depository our So Texas,

Michael Rose

have give then the you great. maybe to you color just could finally Okay. do up have maturities big there continued Thanks. deposit would And any for how much come costs be room well, think down, any you Do me coming you have?

Jeremy Ford

to kind is the a continue mentioned, of of but work be prudent, Yes, maturities I through interest from number interest they that moving an context as NIM we in just deposit, regard. income expect think half them we're in will of as that's that first necessarily going as there'll of income, the not to fair will I that think, improve we overall net perspective broker down the net year through

deposit months. next the our will levels. on over XX to continue cost costs, XX it they CD that lower mature Our to view is and But reset where happens

it's moving So do rates going lower deposit be lower, but we to a over slow see nonetheless time. slog

Michael Rose

for taking questions. all my Thanks Great.

Operator

The with comes Please next ahead. question Woody Lay from go KBW.

Woody Lay

morning guys. good Hey,

Jeremy Ford

morning. Good

Woody Lay

your stable. non-variable So fourth I wanted remain rate, at full And for if run XXXX called just that expenses stable expenses. clarify the if year was that's from non-variable to or to looking outlook quarter

Will Furr

a That's so to more XXXX with stable aggregate. the full year, of comparative

Woody Lay

more you call Securities, those Okay. the That's on wondering of I Hilltop in one totals expenses, the Dutch it had the quarter helpful. the with deck, fees one-time some then Auction And earnings expenses. professional if conversion incurred think just of during your and you systems

Will Furr

million. $X.X About

Woody Lay

XXXX. your that an you I know ones And net hotel pick the of up in restaurant That's on last you wondering on if expect that for on portfolios could provide to was still those you'll specifically update Okay. just helpful. and then back me, half deferral. charge are offs

Will Furr

I the mean, restaurant. question. – and the deferrals on kind I I the Well, that those as of mean of you can are preponderance still And didn't see the remains take hotel remains loans

Woody Lay

rates right to in Yes. those on trending just you Do to you was two deferral. direction? think some pick the get color buckets they're do up and the hoping in expect occupancy I

Will Furr

in improvement, is the seeing it's would to them from I the also year, of excess well are continuing but June to cash rates otherwise saw it's terms still break-even from some we're to than of of end some some a flow vacancy according in see think we seasonal, expected perspective. are till hoteliers the of of they where be, have the what they certainly year, higher

space. see cash challenges to flow continuing are we So hotel the in

I businesses think holding are better. the little up a restaurant

of how they've been operating the in be they the nimble evolve pandemic. model their able think I address more to to challenges overall

next tell place a levels flow to But in modest to or are required say, of to closer of put continuing reach kind below the break-even and are the the I over move starting of wild, And neutral little profitability. improvement. would rates are the been some to, hotels utilization you, cash couple quarters. see restrictions I'd that have

Woody Lay

Got Thanks it. color. good guys. That's

Will Furr

you. Thank

Jeremy Ford

Thanks.

Operator

The Please next with Michael Young from comes Truist Securities. question go ahead.

Michael Young

of kind Hey, taking the an of Thanks improvement that for you to product kind back overall give just us ledger, what can just or you kind are could additional general like the guys of morning. more and up you on you Jeremy, benefits could in that good cetera, of question. of with one PPNR the maybe where on the now? start consolidated you kind us overview better kind enhancements you services et manage offer just can be would walk system Wanted of much sets Or through for the feel business of everything any up, plan, helpful?

Jeremy Ford

in to place put ways, it you on also grow efficiency us. hit the have the of a a the company. I to fortunate team really point, XXXX COVID years, of efficiency, able of finding all I this the the the this amongst gotten that are we've three we gotten over to a the when good done organization economic underlying we've support work one really think work gains were programs at cohesively we we last numbers and lot leverage, go And really and because organization. think provide before better as so got and just lot pandemic have But together we've if ways – operating for this to the do in Well, have we're really see showcases that benefits

Michael Young

any like kind does confidence be maybe process businesses growing certain and helpful you that cost scaling savings? proceed give better more that would higher your potential M&A, or be can or you fruitful that about? a assume as would Okay. you of more And can it strategic hear be to with will Anything

Jeremy Ford

think all correct. I Well, Absolutely. are that those

on improvement, lot of a of think lot there's talent PrimeLending implementations, all a company. the just can really a very the capabilities, what's additions, and you And in the Hilltop just holding got enterprise, and we've They provide lot at see hear building. – confidence going scalable. I for a we're a even larger systems if for what model in bank shared think improved of Securities, that I you services it's

Will Furr

at just Group add emerged at Warehouse Treasury is clearly mean, look our Securities, a fees lot National And Lending saw Jeremy finance bank. think in noting around Will, gross I'll I has profitable. that Services business this group worth growth the year a mentioned, of the XXXX in for fees, clients. that couple of also we that just Hilltop challenging that long a And is we pretty make we've at to couple examples time, Michael, continued we've Hey, in The investments about structured the treasury there. X% last growth by forward. the operating group of a just launched it's been in years, but a bank in I

are Jeremy's to improving we've given and for just last enhance making the the of tangible to been just do demonstrate in these our profitability some what already strategic started investments But to point, examples. starting couple to overall So point there, been businesses platform. years, we've and able have growth

Michael Young

strong Yes, volume I of that's given actually finance where is to volume, that's business. follow origination structured And had great. be And that volume on it kind Obviously, is assume extra purchase to. appreciate in color. a the finance I year wanted to structured year. up mortgage of most up XXXX very I supposed the the related next

So could least be we on maybe you provide any expect at be color stable year-over-year helpful? that or item that line to should would other

Jeremy Ford

it at be then also XXXX. real to extraordinary. it's got just of But lot time as high business. which very give market first that strong think that – here. demand really the think has going as going for I for buying be a think in. investor great and that but look very a the And can built challenge, and home to constructive tight there's was an team be you is We provide in We incredible we've a in XXXX. level support was it was And inventory, It still we’ll – I business a jump in for this. me And to XXXX. challenging let strong very

it. good extraordinary. about So XXXX, I In mean, I was we think feel XXXX

Michael Young

both one from me, Okay. growth not and And that's PrimeLending loan contemplated the for on effort, warehouse guidance. last in this warehouse new just growth the

you So I versus or guess. I be would assume we volumes gain volumes in should do expect share in growth activity think to year-over-year, volume decline just a market growth, there'll lower mortgage related year-over-year, incremental

Will Furr

lending a lending the than business, would would those little that PrimeLending warehouse kind with basis. higher refinance does on a core Yes, that we mortgage of warehouse business have expect percentage mortgage level track national production outlook industry businesses activity of

Michael Young

great. all for That's Okay, me.

Will Furr

Thanks.

Operator

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

You may now disconnect.

Hilltop (HTH) 29 Jan 212020 Q4 Earnings call transcript