HTH - Earnings call transcript Q1 2021

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Operator

Good morning everyone and welcome to the Hilltop Holdings First Quarter Year 2021 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 also note today's event is being recorded. At this time, I would like to turn the conference call over to Erik Yohe. ahead. go please Sir,

Erik Yohe

operator. you, Thank

strategy, we future These of get today's in of fact, certain during impact outlook, our concerning note statements for presentation conditions, credit COVID-XX, losses, started, that stock well are that, as please current the business our presentation preface as historical potential dividends, such that events plans, not based financial as concerning such management's forward-looking allowance nature, the impact statements and to items Before 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 would 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 and our of website the to these

Jeremy Ford

morning. good and Erik, you, Thank

economy or outlook of income quarter assets for diluted had $X.XX increase deposits the into quarter. These strong representing was the provision long-term quarter a Notwithstanding the average from billion compared last refinance year were in increased include and diluted remained first from bank volumes able first volume, the million billion period around the as the QX or business on million deteriorating. Driven to mortgages results interest looked we XX% for first Return return was Most in share, a entered net to XXXX overall average prior of continued PPP when of $X.X mortgage of a X% $XX.X million, as in credit X.X% this of on do million $XXX from deliver or quarter $X.X $X.XX from share. rates momentum first per For loan origination Hilltop quarter higher and increase the average XXXX we XX% prior $X.X XX.X%. XXXX. for the and the and XXXX, grew loans be by an and average the year first from provision $XX equity per to expense reversal reported of by year slowing, balances [indiscernible] our market well.

to improve down strong While benefited growth from in financial first return, and the as business increased finance mortgage positive net productivity pre-tax growth broker-dealer from showing see also XXXX. and XXXX, market, the did efforts we at which business, the margin structured from QX was X% the quarter public a are revenue slightly

XX.X% ratio strong authorization of Liquidity to $X share $XX very and are X The period, granted million of X $XX tier returned shares the Board repurchases. January. shareholders XX% of a quarter with the common million share capital the equity dividends capital leverage of During ratio a remained through Hilltop at million end. tier part and and repurchased in

return modified COVID-XX restaurant as million XXXX end now June the off now Notably to a contractual which is We we This of large of continue and was in portfolio. down see to quarter $XXX million of all loan to for loans trends deferral programs. portion economic and had payoff and the portfolio, improvement during retail March modified are the payments $XXX at a XX.

losses reduction $X.X quarter, in from XX, portfolio. outlook. primarily reserve in million March loan credit which the balance for the a allowance fourth as million totaled the Our of was the positive economic $XXX.X or of reflects of driven by This shifts X.XX% bank

higher and longer economy economic were hotel The recover. general of communication for These has to segments office the borrowers Our outlook bank cautious in our more constant impacted the with by and and will Texas remains improved. take portfolios. in pandemic segments certain severely risk

Slide solid with million. income XXXX affirmation, lower a interest the recapture to $X.X the costs and higher deposit Bank million, pre-tax was Also and pre-tax includes PPP of contributing of X, to interest loan QX net Moving income quarter a provision which increased fees PlainsCapital income income. from has $XX from

to to bankers and with period million million PPP and on generated income at XXXX as $XX customers Our margin an XXXX. continue part funded increase points. of business from sale XX, work origination of PPP small $XX by end. $XXX second $X.X quarter March program million balance loans driven outstanding another pre-tax in increase both as approximately $XXX of XXX basis and had volume totaling PrimeLending bringing total round, the loan on of had [ph] gain was a the of QX million million, That a

encouraged and while country that by continues originators. team across by the the towards tightened, loan perform quarter, recruiting demand and we the actively end the PrimeLending the for quality mortgages increased rates remain to While margins of exceptionally

interest a rise had impacted $XX had business they million. and strong recruiting is efforts. pre-tax finance public and sheet sound. quarter the fixed a The year from this structured is great generated grew revenues was Overall, Net The an businesses levels. to in for and with services compared in lower rates insurance with a our net year. XXXX The quarter excellent our and March. revenue Securities, increase in the management income QX finance good national services adversely volumes in modest strong prior of wealth start start income to believe and quarter net favorable revenue a sudden quality Hilltop in For credit modestly Hilltop We balance spreads. to

three growth for about excited talk and are presentation turn across strategic the about With now are the to the have financials. over We tools businesses we our will dedicated talented the direction Will grateful to and of I we Hilltop. that, leadership potential and

Will Furr

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

As for common Jeremy discussed, a XXXX the attributable of share. million, $XXX to of stockholders recording diluted first consolidated reported income quarter about $X.XX per Hilltop

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

during off the million During The the reflected quarter, and end for losses approximately net allowance outlook of positively further Hilltop for reversal ratio strong Tier environment, provision $XXX,XXX X net the of continued losses ratios economic the improvements and credit macroeconomic quarter. Tier quarter impacted current a for as previously with XX.XX% in XX.XX%. first leverage as written methods remained of common equity recoveries capital included and well the key improvement X credits. of $X.X of

pricing Versus moving million million, origination equated Page benefitted lower the deferred absolute $XXX interest by and first driven and origination accounting yield X current the or interest net declined reserve In PPP the of million yields recognition mortgage from income of net quarter market. quarter in from accretion. Offsetting basis the Further, and $X.X an margin were fourth net HFS year prior previously $X.X Further of points. pressure cash levels excess yields decreased the Now PCB's increased net lower versus putting million interest income fees quarter, with and X. on will deferred higher stock X%. the by a HFI including they the in margin to purchase points market margin. these period by PPP $XXX quarter fees, to loan, better interest X in additional XXXX deposit fourth interest benefits, flows costs. basis by loan, Net

During deposits in declined the average the Total we was of book rates with This loan the costs renewals continued fourth quarter. bearing broker during to the and as new an X%. including lower deposit of customer returned by commitments yield X first quarter quarter, interest stable deposit XXXX. basis points quarter, credit maintained

maturities quarters, costs in bearing support of consumer both which costs. continue decline expect deposit We interest coming CD broker additional the continued deposit in steady and

market market rates expect conditions, overall net pressured interest low yields levels. pressure the demand and remain remain loan coming below the we historical current as expect and Given income we held as quarters remain will for net could will the on aggressive margin commercial the putting loan interest over remain competition and sale

non-interest quarter Turning the for to million. to Page income equated of $XXX XXXX Total X. first

quarter fees increased by $XXX related versus mortgage XXXX. and quarter of the First income first million

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

of market seasonal during pressures the of lower first quarter strong yielded gain sale to and volumes volumes the quarter relative While margins combination the competitive basis decline gain mix a of loan on did margin as quarter on purchase volumes, were points. XXXX trends, XXX mortgage principally traditional to sale versus product fourth

the within to increased a expect and full margins conditions. pipeline. of negative year by range XXX favorable to to period as driven on the basis basis $XX the expect move year realized we $XX included in average by XXX on pressures We Structured points credit primarily XXXX a mark-to-market to million improvements million prior market persist in points business margins on continue a Other income Finance throughout

as in by evolve Structured liquidity. origination they volume impacted capital and overall market noted the the from period-to-period and market trends businesses have we Finance can rates, are past, interest As

versus prior in prior prior Turning the growth the growth in increased balance increase The in $XXX Securities higher million to of of increase PrimeLending. Non-interest taxes, $XX expenses year million fee to payroll one and Hilltop million. the the was X. period. strong same expenses. benefit salaries were was variable The in driven in compensation variable and increase in This $XX by compensation by compensation compared quarter at the expenses the revenue Page expenses year of the period approximately overtime to of in the year

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

the period X% and the of PPP prior mortgage the the period loans modestly In prior Now quarter business. in year Total the versus XXXX. remained of and has loans balances same higher lending driven loans moving banking excluding period the have HFI versus declined demand growth warehouse the versus first as by was X. in mortgage year average to grew tepid Page by warehouse pandemic. lending PPP loan commercial throughout Growth

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

During the and quarter over of PlainsCapital XXXX, XX% These average $XXX to the to I'm an XXX% PrimeLending by XX. had million approximately Page lost LTV of moving an first yield and basis points loans of coming of loans and XXX months. average respectively. be FICO retained

trends the the in recovery Texas slow credit economy. quarter to continued but reflect steady First

flows active cash of provide customer on programs. the borrowers grew fewer As reopening continued and businesses deferral to and

to As of March during at active the ratio XX. on approximately December for we from programs, the XX. deferral million for $XXX million down period allowance March XX.X% $XXX deferral loans Further loans the loan equates active credit of at loans XXst, have

at is the as the at including PPP bottom As loss the X.XX%. shown as in right the credit ended mortgage the quarter both well warehouse at first loans allowance bank, of the for graph coverage page lending

continue We lower warehouse will mortgage that well loans believe our lending, as loss to maintain both content PPP as time. over

Excluding loans the better X.XX% ACL [ph]. held ratio of the and at end period for PPP [ph] warehouse banks loans, the mortgage equated

Turning to XX. Page

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

XX maintain of basis to deposits liquidity expecting strong balance mature points. Hilltop profile, and mature of continue run yield then position X/XX of our basis million broker will Given yield by blended to and At deposits $XXX average XX are [indiscernible] $XXX and These off. broker we million an deposits sheet X/XX/XXXX. points. maintained maturing broker Early a

While I'm deposits through remain elevated, driving and products remained sales we base wallet treasury that share our efforts. and of Page acquisition services we focused to remained the and moving our be noted it commercial should deepening on growing on client focused XX. client

quarter first origination income Bank $X.X from profitability million reversal the fees. during million of generated quarter. credit The the producing During the the previously solid $XX of $X.X and PlainsCapital of PPP recognition XXXX, of of deferred losses benefited bank million pre-tax

During quarter dropped below protect is be a efficiency XX% working income the combination. through on the to our expenses, diligently successful efforts focus the as treasury managing proving sales banks the ratio improving income to and the managing net interest streams

we remain operate do ratio efficiency within efficiency we not do to range over that XX% time. While will below a will of XX%, expect banks expect the that the XX%

first of profit $XX a increased billion quarter. this from or driven first generated PrimeLending purchase prior XXXX million percentage period that the quarter XX%. the volumes the was origination for XX. of origination Page by XX% volume to pre-tax Further, the $X.X in Moving strong by of

While our first above the quarters refinance expect last XXXX. the that a marketplace expectations begin remained to with focused market three shift during purchase during quarter, more will we of the

of yet mix margins is earlier, contracted year and points given production, full during expect range to outlook the basis our we noted competition. first the on product continue to quarter, appropriate XXX As average gain-on-sales XXX

closed the million value. During PrimeLending a in quarter, sale first of $XX MSR on bulk

X/XX net a impact $XXX to rate levels. Somewhat value XX% at bulk roughly offsetting sale, a of yielded the servicing approximately continued the at XX/XX stable of MSR million, with a business which retain of the

looking rate We expect a assets at potentially execute additional servicing to market be to retaining robust. to to newly created XXXX subject sales continue XX% XX% conditions. market of servicing we participation the remains of bulk year during And throughout if will

XX. Finance million Services first and page XXXX, a the business. Hilltop XX.X% of respectively by quarter Public and $XX and to profit of Structured Finance pre-tax driven delivered Moving Securities in margin the

to the quarter, continued to activity on professionals solutions differentiated execute business and strong While additional country. delivery, municipalities the bankers our product product support investing and our sales in was plans, growth we to our offerings the have across in enhance deliver across

walls value. remaining to we're on communities nimble to XX. Page Further, risk pandemic ensure service customer to safety clients, and XXXX, serve, financial our to XXXX of Moving the the for new delivering our In focused teammates the shareholder maintaining our the clients. as our our hits franchise, we and great delivering supporting on attracting moderate customers profile centered remains where a long-term priorities

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

Operator

Instructions] Michael go first Ladies this comes we question your Truist. Please with time Young question-and-answer from the [Operator session. from today question. will Our at and begin gentlemen, ahead

Michael Young

Thanks morning. good question. taking Hey, for the

Jeremy Ford

Hey, Michael?

Michael Young

fixed business, I just but down businesses costs some the the variable the had Why on across you accordance stable, have how costs don’t to year of obviously lower I lower in there maybe sort would fixed will the they side, the you of made bring being gain-on-sale, factor that's obviously but opportunity move potentially with costs there's know to start be assume you the in historically. and just think swing this expense mention on going comments revenue, with mortgage

expense there So, any color the mortgage? side for add on to

Will Furr

in we're made of digital substantial to origination relates investments some as I business think the continue loan to we the through as and customer our engagement. system, activities sit launching here Yes, technology we've mortgage launch it

our expectation back us So, increased I to those those to merit costs originate be cost occur that the our all relates that the naturally progress make real year-on-year of reducing and point, through it specifically allow again, in middle things costs whether And salaries are loan, inflationary to the think on or stable continue your is escalators and and otherwise. and that's as streamline functions. or going to remain costs estate a office to business to good offsetting kind

ongoing are perspective our the as the again to inflation year. from going throughout we offset help of and within hope that, benefits costs to So, but also, investments stable us volumes rationalize exceed maintain the

Michael Young

any softer growth revenue we move guys you opportunities new Okay. revenue looking business year? or And or into mortgage at growth new broader a then new on help winning that question are maybe XXXX verticals as in just could a with opportunities,

Jeremy Ford

far the new we're the what we as have, think looking and doing. anything to any model and different wouldn't there differently our that do anything I think business. we're is as from Yes, to or each grow vertical things not I business looking companies and we're

Michael Young

back Okay. And customer of any around well? then potential in demand a to appetite, of, you the as just quality think guys that. of were growth signs think of little caution coming year I on I know the lot new kind kind credit just banks last half bit of expressing demand one, but seeing are or of pointed a and still you you

So, or in wanted guys your seeing customer I within are your to know geography? base just that you

Jeremy Ford

optimism we're and loan demand solid soft, currently we like pipeline but we for we a there today. we commercial Well is do think think at where is pretty have feel

Michael Young

step Okay. back, I'll thanks.

Operator

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

Michael Rose

doing? you are how guys, Hey

Jeremy Ford

it how going? is Hey,

Michael Rose

going thanks for asking. All well,

to update us know buyback, asked question ton get is kind of thoughts on your you your we've weeks in a capital. you see thoughts of wanted thoughts updated a what activity have to seen M&A, a wanted are? Thanks. Just guys and recent amount kind little fair of Jeremy, of the on here just your just every there? on this quarter just color maybe And just I Can

Jeremy Ford

sit repurchases, towards we regard quarter can then largely trading was want know, all we'll And [ph] authorization, we in With value. we that to Sure. $XX first million -- before M&A we we versus Board. have share that environment. like left we have utilize the [ph] due evaluate relatively the limited million that to have to on $X repurchased we And repurchase as back $XX we've that front, we the million feel constantly LBR as window stated, so period. a you along only separate going like open to do today a where still it's healthy deploy And intrinsic expectation we capital and a M&A. They're are the

and kind makes done So, there it past. distressed to less conversations easier of about the is have so historically in we've deals yields

So, focus really as quarter, value. find our that I said and be our to enhance trying to think we last strategic going something right on will collective partner is the shareholder

Michael Rose

That's helpful.

year Just the reiterated MBA, than origination yesterday guys to to switching 'XX upward quarter, first mortgage, what guys in to guide. you quarter refi, implies the second the it expectations 'XX much you revision so if annualize and for the the higher did big I

that So is you be end all Thanks. upper I as come at of wouldn't to off range? mortgage thought that point, is going we but thought know why the guess to any some at the

Will Furr

Yes.

would the think I effort in yield certainly annualization there. [ph]

quarters a market. view more our rotate towards become is, to next couple start I more, I think purchase would oriented say as will they and intrajectory seasonal the normalize of

outsized know volumes that in and do rationalize the think operations of to out are we [ph] is some and left the overall to challenges and how emerge you of months. organizations competition challenges left that that built marketplace to considerations You eighteen competitive our and know they've the twelve as we inventory market or believe the it come are about going around the

market are but to the billion think -- demand inventory billion And at the reasonable some like in and is again $XX today. think purchase our we'd But strong, albeit challenges are side, it's range remains from present a we we the is our remains to headwinds again real range. the and reasonably on the forward perspective again, going constructive. top be So, $XX certainly that there

Michael Rose

that's color. and understood good I

the us Finally Income trying for can Jeremy, Fed and get Fixed quarters. Just puts just if where and get if to how point from walk but because rise down of through the the then would what and are, takes of just rates on there next trying the know space the push rates the road? as outlook you pieces business that an actually business at rates at, the of again I kind be does me, to over different some increase and expectations within for the kind Thanks. of business couple pull are

Jeremy Ford

talking about? you're Securities, Hilltop For

Michael Rose

correct. Yes,

Jeremy Ford

Okay sure. great, yes

we Finance recruiting. You we also of Public know, four business in think kind are given we've really Services primary the I issuance and of on had I business. have guess strong just is that that that lines positive and One a national lot backdrop,

So we growth business. good that about of feel the

in has the it know Structured been mentioned, Securities just first a You revenue as [ph] did Hilltop quarter. And creator been the mortgage what's like in that, we followed really dominant a in Prime pattern business. related similar which is Finance,

So, that there. that tie the the the business, like will. Income our taxable lot purchase will, market a I income the home of fixed Fixed will home, that's we're and purchase, and Services, rates municipal enhancing capabilities purchase interest think

any to changes of rates. that of interest we, sudden room is to That spread have the short is rates Management bottom to subject line. I where when it And direction term we've we in grow. think straight falls interest and got Wealth the kind then

up So, first term solely million, $X.X X% because having quarter the was revenue of short its in rates.

Michael Rose

my guys. That's Thanks for color. questions great taking

Jeremy Ford

first finance is Finance if and term Kind wealth issuance and these if Structured of a well. in But of see a increase rates increase preclude increase rates level not that seeing don't rates of even we're in they're, will would as that the that rates the time period homebuyers alleviate business, direction lot deferred before like of [ph]. short we to general, I public our such a or time think interest

Michael Rose

Great, thank you.

Operator

with Millsaps your Brad ahead question. go Our from Sandler. Piper Please question comes next from

Jeremy Ford

Brad. Hey

Brad Millsaps

it You on questions. sheet, lot did I to $X.X liquidity balance good about my the address how again you average, manage Hey about of would didn't dynamics existing kind particularly got you? ask cash, but how the and think of PPP quarter, just curious the want lot How the and forgiveness you like the of to some you bond to with cash, talking a in about growth of you're in about of and expect that are long the also a horizon? grew look kind excess morning. portfolio first kind managing the on

Will Furr

also Yes, obviously The right. of so cash top excess is you're mind for us.

I think as looking take we've excessive exposure here. not said historically, on right we're duration to of amounts

where ended backed they so since given And $X saw about of kind are, investment into quarters, of the prior billion. absolute the bank with period kind although rates have you up portfolio the so

We we expect I higher drift exposure. put drift we do it kind outside to don't somebody in higher, will but like it a I to to work don't expect take, have expect function where there step as of we higher that it feel places

million $XX million. $XX the retaining are to We

marginal steps in approach. demand adjustments overall make the loan to to that commercial and expect terms PrimeLending mortgages we do again some and I'd of this of say continue we're and third expectation to to make, do think the is, to the retention we curve, second prudent the commercial year originated then at be of top I and pick doesn't the notwithstanding time. the deployment. And we balance end going quarter and and we'll to into during we're expecting if demand stronger up fourth, the for our that range react impact But do continue expect of that

I'd broker mention tried say, my comments, deposits balance series have we Lastly, to a in sheet. on we of do the

off expectations We run this the of they expect our year. those will will mature balance or and throughout

as terms drifting to quarter-by-quarter. broker then deposits, the in and of sheet, the kind billion mortgage the I'd liquidity well of as level retention securities access of So, higher and over overall $X balance rationalization on say portfolio

Brad Millsaps

that's follow quality. to And on asset up great, helpful. Okay, just

year. like in this massive of elevated maybe half guys of X% that you the some at back slide deck to have if seems were I potentially It loans expense provision the to you think in you other commented I again adjustments. the pretty higher even expect quarter make reserve the be

of credit given be if the to could past. what's I you what kind Just maybe square kind and of what environment, up improving in an kind you the believe with you with reserve building you've picture the elevated back done economic frame those that how provision factors? curious all would of wonder an half seemingly sort in expense of all

Will Furr

Yes, perspective, so, as light you and comments, seeing credit others. we to in in a of of from and I then see some rays noted portfolios, we continue noted think certain in challenges our but are the opportunity

that are deferrals it to June principally last loans Jeremy and those challenged about deferrals oriented $XXX business properties outperformed, $XXX up do a perspective have wholesale retail is in So, portfolio is of and have mentioned of little more those, that destination to of those be as but of as in business his to continuing comments, those we're relates active so some to which from what that. oriented, year. that continue a make kind we've targeted properties about substantial from see and a space zero, are business is now and moved restaurant million those have And active we got improvement of million, the certainly challenges specific hotel the

I On at portfolio think looking across the Texas. important of that State of So we're top the that's to office note.

known there of reasonably growing on. of vacancy it's subletting going well are I kind trends think and

so, remain as And cautious we that well. portfolio on

focus have credit our where some evaluation. to continue are reasons and to while So more places measurement there heightened also optimistic, there's be we on clearly

of kind this there loans likely of these unprecedented second in second year. been deferral to said, deferral there's charge will on decisions be aggressive with has window do, an through at an some the again, offs trying of get here, it, made the every that As it is kind help relates environment. to our be tough through look run active just expectation And to we With yield of we to offs some be half half the currently the half. will the in that that second charge again, continue and as I there'll in working expectation having we charge think offs once what be and clients some client some in in our they

Brad Millsaps

under maybe just You general that kind impact in P&L reserves framework, sort I the mean of I do know, suppose? you'd move specific position trying to think some these about kind situations, you to of think be to of of

Will Furr

right. of see that, about and be that's entities I [indiscernible]. you'll specific kind you I outside I kind that you properties Yes think as of get clarity articulate think will into more mean which time which over more

Brad Millsaps

you Okay guys. great, thank

Will Furr

you. Thank

Operator

Our next from comes question. ahead question your Please Olny Stephens. go from Matt with

Matthew Olny

Thanks for taking the mortgage, circle we volumes. in move into as my spring quarter year build we this obviously each that mortgage want refi back think I month we season, falling the have the see selling volumes but year to on I first each typically and consecutive question.

curious can So in commentary you what more recent Thanks. recently? months if you're provide seeing any and volumes on

Will Furr

would the think of that is very in up back obviously XXX portion April. high. Yes, if and Jeremy was volume through I in in points that had high. in March the first his you refinance But that that settle I'd XX% start XXXs. certainly to mentioned sensitive as we purchase for and a pullback of was say, in tenure will, the We saw decline and percentage quarter as We the saw backed the rate rate the XXX, continued comments, volume so and it month seasonally that's basis March

the move of continue be oriented So believe my a again, purchase roll to But that of perspective in going positioned from challenged volume business half in the which believe will even this time. market our second is towards ours more but do more that we strength and second forwards year. certainly quarter, the to we've over refinance and how is we market

Matthew Olny

the that And versus I Do on seeing for thanks just versus sale the we're on mortgage margins, a Will. divergence margins, of side getting think your the your hit retail remind us lot Okay, considerable mix wholesale then on of harder wholesale side? of pretty on the what retail. gain marketplace, from of

Will Furr

business. We're XXX% have corresponding don't wholesaler any retail. We

Matthew Olny

in sale strategy. the then the $XXX Okay, MSR, from material about I financials lastly first asset just that that quarter. moving and on on thinking you quarter? the the executed trying there on manage saw level you million Was And then first are just any impact update the in us me the [indiscernible] forward? around to just the

Will Furr

had there. positive sale, so a did a have Yes, we outcome we

a I'll little the last year. take you back So to

XXXX that you for last the second of strategy That to the bid the year. that MSR started quarter balance as were period during was last strength. because period, result sheet to no to early the the of in increase of the liquidity strategy market of were periods the So third has to kind quarter assets servicing and deteriorated able servicing of as retain a heal. year servicing Obviously, saw point where really and that for do we there during our balance

extent million tried range. terms think opportunistic Well recognition the able we doing my historically sales. objectively we in did, of MSR million outsized million first kind the in of is of our has borne $XX has to and higher that that, of likely may we an last the of comments, to $XX of note, and little XXXX, to do we a end believe sales objective move through but at asset. have I bulk will these market MSR. strategic year for than our In a maintain over not strategy favorable to be travel additional for So both to that. execute the ours again were price executed that. But again, time. has to It's long-term some favorable and $XXX a is is executed that and to that for million quarter currently continue balance the there I target gain objective it lower It to and the market again, expect been it But been robust do not we $XXX outcomes,

Matthew Olny

Okay, question. taking thanks my for

Will Furr

Yes.

Operator

go And our Lay Woody with your KBW. ahead comes question question. from from next Please

Woody Lay

morning, guys. Hey, good

Will Furr

Good morning.

Jeremy Ford

Good morning.

Woody Lay

and do So expect the over on this the point, recognize unearned that the front, are have forgiveness origination PPP fees you to of process? at amount net

Will Furr

it $XX.X As million. was of X/XX, about

Woody Lay

remind yield mortgage that these plan us it. on retain? from got the could And you consumer Okay, then me, last just loans to average you

Will Furr

about sheet The on other months the come quarter lost basis that points. the they the XXX over were will coming loans during balance

Woody Lay

thanks Okay, great, guys.

Will Furr

over periods points. again, now sheet, the drift on mortgage into with that but basis do XXX expect X% on as will, will that quarter that When the loans for higher, rates balance the come loss are and loss these first we about future

Woody Lay

Got guys. it. That's helpful. All right, thanks

Jeremy Ford

you. Thank

Operator

conclude and today's gentlemen attending we Again that, thank will with ladies webcast. first earnings presentation. you XXXX do conference today's Hilltop quarter Holdings call We for and

now may your disconnect You lines.

Hilltop (HTH) 23 Apr 212021 Q1 Earnings call transcript