Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 16, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 1-31987 | ||
Entity Registrant Name | Hilltop Holdings Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 84-1477939 | ||
Entity Address, Address Line One | 6565 Hillcrest Avenue | ||
Entity Address, City or Town | Dallas | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75205 | ||
City Area Code | 214 | ||
Local Phone Number | 855-2177 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | HTH | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 82,188,513 | ||
Entity Central Index Key | 0001265131 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 1,180 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 1,062,560 | $ 433,626 |
Federal funds sold | 386 | 394 |
Assets segregated for regulatory purposes | 290,357 | 157,436 |
Securities purchased under agreements to resell | 80,319 | 59,031 |
Securities: | ||
Trading, at fair value | 694,255 | 689,576 |
Available for sale, at fair value, net (amortized cost of $1,435,919 and 899,817, respectively) | 1,462,205 | 911,493 |
Held to maturity, at amortized cost, net (fair value of $326,671 and $388,930, respectively) | 311,944 | 386,326 |
Equity, at fair value | 140 | 166 |
Total securities | 2,468,544 | 1,987,561 |
Loans held for sale | 2,788,386 | 2,106,361 |
Loans held for investment, net of unearned income | 7,693,141 | 7,381,400 |
Allowance for credit losses | (149,044) | (61,136) |
Loans held for investment, net | 7,544,097 | 7,320,264 |
Broker-dealer and clearing organization receivables | 1,404,727 | 1,780,280 |
Premises and equipment, net | 211,595 | 210,375 |
Operating lease right-of-use assets | 105,757 | 114,320 |
Mortgage servicing rights | 143,742 | 55,504 |
Other assets | 555,983 | 404,754 |
Goodwill | 267,447 | 267,447 |
Other intangible assets, net | 20,364 | 26,666 |
Assets of discontinued operations | 248,429 | |
Total assets | 16,944,264 | 15,172,448 |
Deposits: | ||
Noninterest-bearing | 3,612,384 | 2,769,556 |
Interest-bearing | 7,629,935 | 6,262,658 |
Total deposits | 11,242,319 | 9,032,214 |
Broker-dealer and clearing organization payables | 1,368,373 | 1,605,518 |
Short-term borrowings | 695,798 | 1,424,010 |
Securities sold, not yet purchased, at fair value | 79,789 | 43,817 |
Notes payable | 381,987 | 256,269 |
Operating lease liabilities | 125,450 | 125,619 |
Junior subordinated debentures | 67,012 | 67,012 |
Other liabilities | 632,889 | 348,519 |
Liabilities of discontinued operations | 140,674 | |
Total liabilities | 14,593,617 | 13,043,652 |
Commitments and contingencies (see Notes 21 and 22) | ||
Hilltop stockholders' equity: | ||
Common stock, $0.01 par value, 125,000,000 shares authorized; 82,184,993 and 90,640,944 shares issued and outstanding at December 31, 2020 and 2019, respectively | 822 | 906 |
Additional paid-in capital | 1,317,929 | 1,445,233 |
Accumulated other comprehensive income | 17,763 | 11,419 |
Retained earnings | 986,792 | 644,860 |
Deferred compensation employee stock trust, net | 771 | 776 |
Employee stock trust (6,930 and 7,794 shares, at cost, at December 31, 2020 and 2019, respectively) | (138) | (155) |
Total Hilltop stockholders' equity | 2,323,939 | 2,103,039 |
Noncontrolling interests | 26,708 | 25,757 |
Total stockholders' equity | 2,350,647 | 2,128,796 |
Total liabilities and stockholders' equity | $ 16,944,264 | $ 15,172,448 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Available for sale, amortized cost | $ 1,435,919 | $ 899,817 |
Held to maturity, fair value | $ 326,671 | $ 388,930 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 82,184,893 | 90,640,944 |
Common stock, shares outstanding | 82,184,893 | 90,640,944 |
Employee stock trust, shares | 6,930 | 7,794 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest income: | |||
Loans, including fees | $ 433,311 | $ 460,471 | $ 436,725 |
Securities borrowed | 51,360 | 69,582 | 66,914 |
Securities: | |||
Taxable | 48,273 | 58,493 | 46,665 |
Tax-exempt | 6,698 | 6,159 | 6,834 |
Other | 6,853 | 15,991 | 17,485 |
Total interest income | 546,495 | 610,696 | 574,623 |
Interest expense: | |||
Deposits | 47,040 | 71,509 | 46,002 |
Securities loaned | 42,816 | 60,086 | 56,733 |
Short-term borrowings | 11,611 | 26,778 | 25,816 |
Notes payable | 15,897 | 8,948 | 8,483 |
Junior subordinated debentures | 2,772 | 3,851 | 3,663 |
Other | 2,193 | 545 | 627 |
Total interest expense | 122,329 | 171,717 | 141,324 |
Net interest income | 424,166 | 438,979 | 433,299 |
Provision for credit losses | 96,491 | 7,206 | 5,088 |
Net interest income after provision for credit losses | 327,675 | 431,773 | 428,211 |
Noninterest income: | |||
Net gains from sale of loans and other mortgage production income | 1,001,059 | 504,935 | 445,116 |
Mortgage loan origination fees | 171,769 | 130,003 | 103,563 |
Securities commissions and fees | 142,720 | 137,742 | 150,989 |
Investment and securities advisory fees and commissions | 131,327 | 103,787 | 90,066 |
Other | 243,605 | 186,350 | 90,396 |
Total noninterest income | 1,690,480 | 1,062,817 | 880,130 |
Noninterest expense: | |||
Employees' compensation and benefits | 1,059,645 | 844,602 | 757,214 |
Occupancy and equipment, net | 99,416 | 113,336 | 113,923 |
Professional services | 69,984 | 60,565 | 69,799 |
Other | 224,758 | 193,386 | 212,392 |
Total noninterest expense | 1,453,803 | 1,211,889 | 1,153,328 |
Income from continuing operations before income taxes | 564,352 | 282,701 | 155,013 |
Income tax expense | 133,071 | 63,714 | 34,227 |
Income from continuing operations | 431,281 | 218,987 | 120,786 |
Income from discontinued operations, net of income taxes | 38,396 | 13,990 | 4,941 |
Net income | 469,677 | 232,977 | 125,727 |
Less: Net income attributable to noncontrolling interest | 21,841 | 7,686 | 4,286 |
Income attributable to Hilltop | $ 447,836 | $ 225,291 | $ 121,441 |
Basic: | |||
Earnings from continuing operations (in dollars per share) | $ 4.59 | $ 2.29 | $ 1.23 |
Earnings from discontinued operations (in dollars per share) | 0.43 | 0.15 | 0.05 |
Basic earnings per common share (in dollars per share) | 5.02 | 2.44 | 1.28 |
Diluted: | |||
Earnings from continuing operations (in dollars per share) | 4.58 | 2.29 | 1.23 |
Earnings from discontinued operations (in dollars per share) | 0.43 | 0.15 | 0.05 |
Diluted earnings per common share (in dollars per share) | $ 5.01 | $ 2.44 | $ 1.28 |
Weighted average share information: | |||
Basic (in shares) | 89,280 | 92,345 | 94,969 |
Diluted (in shares) | 89,304 | 92,394 | 95,067 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 469,677 | $ 232,977 | $ 125,727 |
Other comprehensive income: | |||
Change in fair value of cash flow and fair value hedges, net of tax of $(820), $111 and $0, respectively | (2,950) | 417 | |
Net unrealized gains (losses) on securities available for sale, net of tax of $2,756, $6,276 and $(1,558), respectively | 9,111 | 21,599 | (5,632) |
Reclassification adjustment for gains (losses) included in net income, net of tax of $55, $(573) and $0, respectively | 183 | (1,970) | |
Comprehensive income | 476,021 | 253,023 | 120,095 |
Less: comprehensive income attributable to noncontrolling interest | 21,841 | 7,686 | 4,286 |
Comprehensive income applicable to Hilltop | $ 454,180 | $ 245,337 | $ 115,809 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Cash flow hedge, tax | $ (820) | $ 111 | $ 0 |
Net unrealized gains on securities available for sale, tax | 2,756 | 6,276 | (1,558) |
Reclassification adjustment, tax | $ 55 | $ (573) | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | ParentCumulative Effect, Period of Adoption, Adjustment | Parent | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Deferred Compensation Employee Stock Trust, Net | Employee Stock Trust | Noncontrolling Interest | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at Dec. 31, 2017 | $ 1,912,081 | $ 960 | $ 1,526,369 | $ (394) | $ 384,545 | $ 848 | $ (247) | $ 2,726 | $ 1,914,807 | ||||
Balance (in shares) at Dec. 31, 2017 | 95,982,000 | 12,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income | 121,441 | 121,441 | 4,286 | 125,727 | |||||||||
Other comprehensive income (loss) | (5,632) | (5,632) | (5,632) | ||||||||||
Stock-based compensation expense | 8,454 | 8,454 | 8,454 | ||||||||||
Common stock issued to board members | 654 | 654 | 654 | ||||||||||
Common stock issued to board members (in shares) | 30,000 | ||||||||||||
Issuance of common stock related to share-based awards, net | (1,847) | $ 3 | (1,850) | (1,847) | |||||||||
Issuance of common stock related to share-based awards, net (in shares) | 327,000 | ||||||||||||
Repurchases of common stock | (58,990) | $ (27) | (43,811) | (15,152) | $ (58,990) | ||||||||
Repurchases of common stock (in shares) | (2,729,000) | (2,729,568) | |||||||||||
Dividends on common stock | (26,698) | (26,698) | $ (26,698) | ||||||||||
Deferred compensation plan | 7 | (23) | $ 30 | 7 | |||||||||
Deferred compensation plan (in shares) | (1,000) | ||||||||||||
Net cash contributed from noncontrolling interest | 17,411 | 17,411 | |||||||||||
Balance at Dec. 31, 2018 | 1,949,470 | $ 936 | 1,489,816 | $ 2,601 | (8,627) | $ (2,601) | 466,737 | 825 | $ (217) | 24,423 | 1,973,893 | ||
Balance (in shares) at Dec. 31, 2018 | 93,610,000 | 11,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income | 225,291 | 225,291 | 7,686 | 232,977 | |||||||||
Other comprehensive income (loss) | 20,046 | 20,046 | 20,046 | ||||||||||
Stock-based compensation expense | 11,243 | 11,243 | 11,243 | ||||||||||
Common stock issued to board members | 573 | 573 | 573 | ||||||||||
Common stock issued to board members (in shares) | 27,000 | ||||||||||||
Issuance of common stock related to share-based awards, net | (1,978) | $ 4 | (1,982) | (1,978) | |||||||||
Issuance of common stock related to share-based awards, net (in shares) | 394,000 | ||||||||||||
Repurchases of common stock | (73,385) | $ (34) | (54,417) | (18,934) | $ (73,385) | ||||||||
Repurchases of common stock (in shares) | (3,390,000) | (3,390,247) | |||||||||||
Dividends on common stock | (29,627) | (29,627) | $ (29,627) | ||||||||||
Deferred compensation plan | 13 | (49) | $ 62 | 13 | |||||||||
Deferred compensation plan (in shares) | (3,000) | ||||||||||||
Net cash distributed to noncontrolling interest | (6,352) | (6,352) | |||||||||||
Balance at Dec. 31, 2019 | $ (1,393) | 2,103,039 | $ 906 | 1,445,233 | 11,419 | (1,393) | 644,860 | 776 | $ (155) | 25,757 | $ (1,393) | 2,128,796 | |
Balance (in shares) at Dec. 31, 2019 | 90,641,000 | 8,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income | 447,836 | 447,836 | 21,841 | 469,677 | |||||||||
Other comprehensive income (loss) | 6,344 | 6,344 | 6,344 | ||||||||||
Stock-based compensation expense | 14,089 | 14,089 | 14,089 | ||||||||||
Common stock issued to board members | 586 | 586 | 586 | ||||||||||
Common stock issued to board members (in shares) | 31,000 | ||||||||||||
Issuance of common stock related to share-based awards, net | (1,088) | $ 3 | (1,091) | (1,088) | |||||||||
Issuance of common stock related to share-based awards, net (in shares) | 293,000 | ||||||||||||
Repurchases of common stock | (208,664) | $ (87) | (140,888) | (67,689) | (208,664) | ||||||||
Repurchases of common stock (in shares) | (8,780,000) | ||||||||||||
Dividends on common stock | (32,524) | (32,524) | (32,524) | ||||||||||
Deferred compensation plan | 12 | (5) | $ 17 | 12 | |||||||||
Deferred compensation plan (in shares) | (1,000) | ||||||||||||
Net cash distributed to noncontrolling interest | (20,890) | (20,890) | |||||||||||
Balance at Dec. 31, 2020 | $ (5,691) | $ 2,323,939 | $ 822 | $ 1,317,929 | $ 17,763 | $ (5,691) | $ 986,792 | $ 771 | $ (138) | $ 26,708 | $ (5,691) | $ 2,350,647 | |
Balance (in shares) at Dec. 31, 2020 | 82,185,000 | 7,000 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | Jan. 28, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||
Cash dividends declared per common share | $ 0.12 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.36 | $ 0.32 | $ 0.28 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities | |||
Net income | $ 469,677 | $ 232,977 | $ 125,727 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Provision for credit losses | 96,491 | 7,206 | 5,088 |
Depreciation, amortization and accretion, net | 21,930 | (1,483) | (5,272) |
Deferred income taxes | 16,583 | (4,063) | 13,009 |
Other, net | 11,849 | 15,445 | 8,972 |
Net change in securities purchased under agreements to resell | (21,288) | 2,580 | 124,926 |
Net change in trading securities | (4,679) | 55,890 | (14,781) |
Net change in broker-dealer and clearing organization receivables | 515,073 | (338,158) | 23,618 |
Net change in other assets | (78,997) | 61,688 | 33,321 |
Net change in broker-dealer and clearing organization payables | (152,158) | 206,170 | (7,054) |
Net change in other liabilities | 249,313 | 78,245 | (78,708) |
Net change in securities sold, not yet purchased | 35,972 | (37,850) | (151,154) |
Proceeds from sale of mortgage servicing rights asset | 35,142 | 9,303 | |
Change in valuation of mortgage servicing rights asset | 37,926 | 24,353 | 4,337 |
Net gains from sales of loans | (1,001,059) | (504,935) | (445,116) |
Loans originated for sale | (26,766,999) | (16,644,259) | (14,287,551) |
Proceeds from loans sold | 26,848,663 | 16,413,647 | 15,037,339 |
Net cash provided by (used in) operating activities for continuing operations | 313,439 | (432,547) | 396,004 |
Net cash used in operating activities for discontinued operations | (33,003) | (476) | (6,464) |
Net cash provided by (used in) operating activities | 280,436 | (433,023) | 389,540 |
Investing Activities | |||
Proceeds from maturities and principal reductions of securities held to maturity | 81,140 | 73,924 | 43,699 |
Proceeds from sales, maturities and principal reductions of securities available for sale | 433,828 | 296,812 | 215,368 |
Purchases of securities held to maturity | (7,553) | (109,622) | (39,259) |
Purchases of securities available for sale | (975,289) | (415,763) | (306,005) |
Net change in loans held for investment | (457,540) | (423,890) | (110,615) |
Purchases of premises and equipment and other assets | (37,746) | (42,287) | (67,726) |
Proceeds from sales of premises and equipment and other real estate owned | 21,512 | 14,309 | 25,847 |
Net cash received from (paid to) Federal Home Loan Bank and Federal Reserve Bank stock | 22,808 | (17,092) | 3,198 |
Net cash paid for acquisition | (63,245) | ||
Other, net | 904 | (49) | |
Net cash used in investing activities for continuing operations | (918,840) | (622,705) | (298,787) |
Net cash provided by investing activities for discontinued operations | 1,941 | 18,413 | 9,120 |
Net cash received from disposal of discontinued operations | 89,233 | ||
Net cash used in investing activities | (827,666) | (604,292) | (289,667) |
Financing Activities | |||
Net change in deposits | 2,125,118 | 600,481 | 196,060 |
Net change in short-term borrowings | (729,110) | 358,203 | (140,617) |
Proceeds from notes payable | 1,451,249 | 1,055,772 | 664,045 |
Payments on notes payable | (1,325,711) | (1,000,960) | (643,921) |
Payments to repurchase common stock | (208,664) | (73,385) | (58,990) |
Dividends paid on common stock | (32,524) | (29,627) | (26,698) |
Net cash distributed to (from) noncontrolling interest | (20,890) | (6,352) | 17,411 |
Other, net | (1,724) | (2,494) | (2,657) |
Net cash provided by financing activities | 1,257,744 | 901,638 | 4,633 |
Net change in cash, cash equivalents and restricted cash | 710,514 | (135,677) | 104,506 |
Cash, cash equivalents and restricted cash, beginning of year | 642,789 | 778,466 | 673,960 |
Cash, cash equivalents and restricted cash, end of year | 1,353,303 | 642,789 | 778,466 |
Supplemental Disclosures of Cash Flow Information | |||
Cash paid for interest | 124,934 | 168,535 | 143,201 |
Cash paid for income taxes, net of refunds | 123,553 | 56,901 | 8,378 |
Supplemental Schedule of Non-Cash Activities | |||
Derecognition of construction in progress related to build-to-suit lease obligations | 27,802 | ||
Conversion of loans to other real estate owned | 13,865 | 4,669 | 6,899 |
Additions to mortgage servicing rights | $ 162,914 | $ 13,755 | $ 25,028 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash to Consolidated Balance Sheets | ||
Cash and due from banks | $ 433,626 | $ 598,999 |
Cash and due from banks, included within assets of discontinued operations | 51,333 | 45,074 |
Federal funds sold | 394 | 400 |
Assets segregated for regulatory purposes | 157,436 | 133,993 |
Total cash, cash equivalents and restricted cash | $ 642,789 | $ 778,466 |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting and Reporting Policies | |
Summary of Significant Accounting and Reporting Policies | 1. Summary of Significant Accounting and Reporting Policies Nature of Operations Hilltop Holdings Inc. (“Hilltop” and, collectively with its subsidiaries, the “Company”) is a financial holding company registered under the Bank Holding Company Act of 1956. The Company’s primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank (the “Bank”). In addition, the Company provides an array of financial products and services through its broker-dealer and mortgage origination subsidiaries. On June 30, 2020, Hilltop completed the sale of all of the outstanding capital stock of National Lloyds Corporation (“NLC”), which comprised the operations of the former insurance segment, for cash proceeds of $154.1 million and was subject to post-closing adjustments. Accordingly, NLC’s results and its assets and liabilities have been presented as discontinued operations in the consolidated financial statements. For further details, see Note 3 to the consolidated financial statements. As a result of the above noted sale of NLC, the Company, headquartered in Dallas, Texas, provides its products and services through two primary business units within continuing operations, PlainsCapital Corporation (“PCC”) and Hilltop Securities Holdings LLC (“Securities Holdings”). PCC is a financial holding company, that provides, through its subsidiaries, traditional banking, wealth and investment management and treasury management services primarily in Texas and residential mortgage lending throughout the United States. Securities Holdings is a holding company, that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, clearing, securities lending, structured finance and retail brokerage services throughout the United States. Unless otherwise noted, the Company’s notes to the consolidated financial statements present information limited to continuing operations. As a result of the spread of the novel coronavirus (“COVID-19”) pandemic, economic uncertainties continue to adversely impact the global economy and have contributed to significant volatility in banking and other financial activity in the areas in which the Company operates. The effects of COVID-19 and the governmental and societal response to the virus have negatively impacted financial markets and overall economic conditions on an unprecedented scale, resulting in the shuttering of businesses across the country and significant job loss. Many of these businesses reopened but may be operating at limited capacity. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19. COVID-19 presents material uncertainty which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. Basis of Presentation The audited financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Other than changes related to the implementation of the current expected credit losses (“CECL”) standard, as further described in Note 2 to the consolidated financial statements, the Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. Hilltop owns 100% of the outstanding stock of PCC. PCC owns 100% of the outstanding stock of the Bank and 100% of the membership interest in Hilltop Opportunity Partners LLC, a merchant bank utilized to facilitate investments in companies engaged in non-financial activities. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”). PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds an ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC also owns 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which are not included in the consolidated financial statements under the requirements of the Variable Interest Entities (“VIE”) Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), because the primary beneficiaries of the Trusts are not within the consolidated group. Hilltop has a 100% membership interest in Securities Holdings, which operates through its wholly-owned subsidiaries, Hilltop Securities Inc. (“Hilltop Securities”), Momentum Independent Network Inc., formerly Hilltop Securities Independent Network Inc., (“Momentum Independent Network” and collectively with Hilltop Securities, the “Hilltop Broker-Dealers”) and Hilltop Securities Asset Management, LLC. Hilltop Securities is a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”), Momentum Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA. Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC are registered investment advisers under the Investment Advisers Act of 1940. In addition, Hilltop owns 100% of the membership interest in each of HTH Hillcrest Project LLC (“HTH Project LLC”) and Hilltop Investments I, LLC The consolidated financial statements include the accounts of the above-named entities. Intercompany transactions and balances have been eliminated. Noncontrolling interests have been recorded for minority ownership in entities that are not wholly owned and are presented in compliance with the provisions of Noncontrolling Interest in Subsidiary Subsections of the ASC. Certain reclassifications have been made to the prior period consolidated financial statements to conform with the current period presentation, including reclassifications due to the adoption of new accounting pronouncements and reclassifications due to the presentation of NLC’s results and its assets and liabilities as discontinued operations. In preparing these consolidated financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all stockholders and other financial statement users, or filed with the SEC. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates regarding the allowance for credit losses, the fair values of financial instruments, the mortgage loan indemnification liability, and the potential impairment of assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. Acquisition Accounting Acquisitions are accounted for under the acquisition method of accounting. Purchased assets, including identifiable intangible assets, and assumed liabilities are recorded at their respective acquisition date fair values. If the fair value of net assets purchased exceeds the consideration given, a bargain purchase gain is recognized. If the consideration given exceeds the fair value of the net assets received, goodwill is recognized. Securities Purchased Under Agreements to Resell Securities purchased under agreements to resell (reverse repurchase agreements or reverse repos) are treated as collateralized financings and are carried at the amounts at which the securities will subsequently be resold as specified in the agreements. The Company is in possession of collateral with a fair value equal to or in excess of the contract amounts. Securities Management classifies securities at the time of purchase and reassesses such designation at each balance sheet date. Securities held for resale to facilitate principal transactions with customers are classified as trading and are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. The Company reports interest income on trading securities as interest income on securities and other changes in fair value as other noninterest income. Debt securities held but not intended to be held to maturity or on a long-term basis are classified as available for sale. Securities included in this category are those that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates, prepayment risk or other factors related to interest rate and prepayment risk. Debt securities available for sale are carried at fair value. Unrealized holding gains and losses on debt securities available for sale, net of taxes, are reported in other comprehensive income (loss) until realized. Premiums and discounts are recognized in interest income using the effective interest method and reflect any optionality that may be embedded in the security. Equity securities are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. Equity securities that do not have readily determinable fair values are initially recorded at cost and subsequently remeasured when there is (i) an observable transaction involving the same investment, (ii) an observable transaction involving a similar investment from the same issuer or (iii) an impairment. These remeasurements are reflected in the consolidated statements of operations. Allowance for Credit Losses on Available for Sale and Held to Maturity Securities Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available for sale debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes. Allowances for credit losses may result from credit deterioration of the issuer or the collateral underlying the security. In performing an assessment of whether any decline in fair value is due to a credit loss, all relevant information is considered at the individual security level. In assessing whether a credit loss exists, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount by which the fair value is less than the amortized cost basis. Under the new credit loss guidance adopted on January 1, 2020, the previous other-than-temporary-impairment (“OTTI”) model was replaced. Under the OTTI model, credit losses were recognized as a reduction to the cost basis of the investment with recovery of an impairment loss recognized prospectively over time as interest income, and reversals of impairment were not allowed. Effective January 1, 2020, if the Company intends to sell a debt security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged against the allowance for credit losses, with any incremental impairment reported in earnings. Reversals of the allowance for credit losses are permitted and should not exceed the allowance amount initially recognized. For debt securities held to maturity, estimated expected credit losses are calculated in a manner like that used for loans held for investment. That is, the historical lifetime probability of default and severity of loss in the event of default is derived or obtained from external sources and adjusted for the expected effects of reasonable and supportable forecasts over the expected lives of the securities on those historical credit losses. With respect to certain classes of debt securities, primarily U.S. Treasuries, the Company considers the history of credit losses, current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero, even if the U.S. government were to technically default. Therefore, for those securities, the Company does not record expected credit losses. Loans Held for Sale Loans held for sale consist primarily of single-family residential mortgages funded through PrimeLending. These loans are generally on the consolidated balance sheet between 30 and 45 days. Substantially all mortgage loans originated by PrimeLending are sold to various investors in the secondary market, historically with the majority with servicing released. Mortgage loans held for sale are carried at fair value in accordance with the provisions of the Fair Value Option Subsections of the ASC (the “Fair Value Option”). Changes in the fair value of the loans held for sale are recognized in earnings and fees and costs associated with origination are recognized as incurred. The specific identification method is used to determine realized gains and losses on sales of loans, which are reported as net gains (losses) in noninterest income. Loans sold are subject to certain indemnification provisions with investors, including the repurchase of loans sold and repayment of certain sales proceeds to investors under certain conditions. In addition, certain mortgage loans guaranteed by U.S. Government agencies and sold into Government National Mortgage Association (“GNMA”) pools may, under certain conditions specified in the government programs, become subject to repurchase by PrimeLending. When such loans subject to repurchase no longer qualify for sale accounting, they are reported as loans held for sale in the consolidated balance sheets. Loans Held for Investment Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal reduced by unearned income, net unamortized deferred fees and an allowance for credit losses. Unearned income on installment loans and interest on other loans is recognized using the effective interest method. Net fees received for providing loan commitments and letters of credit that result in loans are deferred and amortized to interest income over the life of the related loan, beginning with the initial borrowing. Net fees on commitments and letters of credit that are not expected to be funded are amortized to noninterest income over the commitment period. Income on direct financing leases is recognized on a basis that achieves a constant periodic rate of return on the outstanding investment. The accrual of interest on credit deteriorated loans is discontinued when, in management’s opinion, there is a clear indication that the borrower’s cash flow may not be sufficient to meet principal and interest payments, which is generally when a loan is 90 days past due unless the asset is both well secured and in the process of collection. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is charged against income. Once placed on non-accrual status, interest income is recognized on a cash basis. Additionally, accretion of purchased discount on non-accrual loans is suspended. The Company follows applicable regulatory guidance when measuring past due status. The Company uses the actual days elapsed since the payment due date of the loan to determine delinquency. In response to the ongoing COVID-19 pandemic, the Company allowed modifications, such as payment deferrals for up to 90 days and temporary forbearance, to credit-worthy borrowers who are experiencing temporary hardship due to the effects of COVID-19. These modifications generally meet the criteria of the CARES Act, and therefore, the Company does not account for such loan modifications as TDRs Management defines loans acquired in a business combination as acquired loans. Acquired loans are recorded at estimated fair value on their purchase date with no carryover of the related allowance for credit losses. Acquired loans are segregated between those considered to be credit deteriorated and those without credit deterioration at acquisition. To make this determination, management considers such factors as past due status, non-accrual status and credit risk ratings. For acquired performing loans, a lifetime allowance for credit losses is estimated as of the date of acquisition and is recorded through provision for (reversal of) credit losses. The difference between the purchase price and loan receivable is amortized over the remaining life of the loan. All formerly designated purchased credit impaired (“PCI”) loans became purchased credit deteriorated (“PCD”) loans effective January 1, 2020. PCD loans are loans that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination. For PCD loans, any non-credit discount or premium related to an acquired pool of PCD loans is allocated to each individual asset within the pool. On the acquisition date, the initial allowance for credit losses measured on a pooled basis is allocated to each individual asset within the pool to allocate any non-credit discount or premium. Credit losses are measured based on unpaid principal balance. A lifetime allowance for credit losses is estimated as of the date of acquisition. The initial allowance for credit losses is added to the purchase price and is considered to be part of the PCD loan amortized cost basis. Allowance for Credit Losses for Loans Held for Investment Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses for loans. The allowance for credit losses, or reserve, is an estimate of expected losses over the lifetime of a loan within the Company’s existing loans held for investment portfolio. The allowance for credit losses for loans held for investment is adjusted by a provision for (reversal of) credit losses, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio segments, which are further disaggregated into loan classes, the level at which credit risk is monitored. The allowance for credit losses for loans not evaluated for specific reserves is calculated using statistical credit factors, including probabilities of default (“PD”) and loss given default (“LGD”), to the amortized cost of pools of loan exposures with similar risk characteristics over its contractual life, adjusted for prepayments, to arrive at an estimate of expected credit losses. Economic forecasts are applied over the period management believes it can estimate reasonable and supportable forecasts. Reasonable and supportable forecast periods and reversion assumptions to historical data are credit model specific. The Company typically forecasts economic variables over a one Commercial loans that exceed a minimum size scope are underwritten and graded using credit models that leverage national industry default data to score the loans. At the conclusion of the process of underwriting or re-grading a borrower, each borrower (for commercial and industrial loans) or property (for commercial real estate loans) is assigned a PD grade threshold. The valuation methodology of risk rating internal grades is based on the merits of the financial ratios of the borrower or the property. In addition, an LGD grade is determined by the credit models utilizing collateral information provided. A master rating scale effectively "pools" the loans by credit scores and assigns a standard one year PD percentage and an LGD percentage equally for all loans that have a given score. For borrowers or loans that do not meet the minimum balance threshold, an internal scorecard is utilized to approximate the grades derived from the credit models and is mapped to the master rating scale. The resulting numerical PD grade is the credit quality indicator for commercial loans. The grades on borrowers or properties that are scored in the credit models are determined at origination and updated at least annually. The grades on the internal scorecards are updated annually if they meet a minimum threshold, or if new circumstances (favorable or unfavorable) warrant a re-scoring. When computing allowance levels, credit loss assumptions are estimated using models that analyze loans according to credit risk ratings, historic loss experience, past due status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Future factors and forecasts may result in significant changes in the allowance and provision (reversal) for credit losses in those future periods. The allowance for credit losses will primarily reflect estimated losses for pools of loans that share similar risk characteristics, but will also consider individual loans that do not share risk characteristics with other loans. Loans that Share Risk Characteristics with Other Loans In estimating the component of the allowance for credit losses for loans that share similar risk characteristics with other loans, such loans are segregated into loan classes. Loans are designated into loan classes based on loans pooled by product types and similar risk characteristics or areas of risk concentration. In determining the allowance for credit losses, the Company derives an estimated credit loss assumption from a model that categorizes loan pools based on loan type and internal risk rating or past due category as follows. Commercial and Industrial and Commercial Real Estate Loans. These factors are based on an evaluation of historical and current information and sometimes involve subjective assessment and interpretation. Specific considerations for construction are considered in the internal PD and LGD risk ratings including property type, development phase and complexity, as well as lease-up and stabilization projections. The PD and LGD factors are further sensitized in the models for future expectations over the loan’s contractual life, adjusted for prepayments. 1-4 Family Residential Loans. The 1-4 family residential loan portfolio is segmented into pools of residential real estate loans with similar credit risk characteristics. For 1-4 family residential loans, the Company utilizes separate credit models designed for these types of loans to estimate the PD and LGD grades for the allowance for credit losses calculation. The models calculate expected losses and prepayments using borrower information at origination, including FICO score, loan type, collateral type, lien position, geography, origination year, and loan to value. Past due status post-origination is also a key input in the models. Current and future changes in economic conditions, including unemployment rates, home prices, index rates, and mortgage rates, are also considered. New originations and loan purchases are scored using the FICO score at origination. FICO score bands are assigned following prevalent industry standards and are used as the credit quality indicator for these types of loans. Substandard non-accrual loans are treated as a separate category in the credit scoring grid as the probability of default is 100% and the FICO score is no longer a relevant predictor. Consumer Loans. The consumer loan portfolio is segmented into pools of consumer installment loans or revolving lines of credit with similar credit characteristics. The models calculate expected losses using borrower information at origination, including FICO score, origination year, geography, and collateral type. Broker-Dealer Loans. The broker-dealer loan portfolio is evaluated on an individual basis using the collateral maintenance practical expedient. The collateral maintenance practical expedient allows the broker-dealer to compare the fair value of the collateral of each loan as of the reporting date to loan value. The underlying collateral of the loans to customers and correspondents is marked to market daily and any required additional collateral is collected. The allowance represents the amount of unsecured loan balances at the end of the period. Qualitative Factors Estimating the timing and amounts of future loss cash flows is subject to significant management judgment as these loss cash flows rely upon estimates such as default rates, loss severities, collateral valuations, the amounts and timing of principal payments (including any expected prepayments) or other factors that are reflective of current or future expected conditions. These estimates, in turn, depend on the duration of current overall economic conditions, industry, borrower, or portfolio specific conditions, the expected outcome of bankruptcy or insolvency proceedings, as well as, in certain circumstances, other economic factors, including the level of current and future real estate prices. All of these estimates and assumptions require significant management judgment and certain assumptions that are highly subjective. Model imprecision also exists in the allowance for credit losses estimation process due to the inherent time lag of available industry information and differences between expected and actual outcomes. Management considers adjustments for these conditions in its allowance for credit loss estimates qualitatively where they may not be measured directly in its individual or collective assessments, including but not limited to: ● an adjustment to historical loss data to measure credit risk even if that risk is remote and does not meet the scope of assets with zero expected losses; ● the environmental factors and the areas in which credit is concentrated, such as the regulatory, environmental, or technological environment, the geographical area or key industries, or in the national or regional economic and business conditions where the borrower has exposure; ● the nature and volume of the company’s financial assets; ● the borrower’s financial condition, credit rating, credit score, asset quality, or business prospects; ● the borrower’s ability to make scheduled interest or principal payments; ● the remaining payment terms of the financial assets and the remaining time to maturity and the timing and extent of prepayments on the financial assets; ● the volume and severity of past due or adversely classified financial assets; ● the value of underlying collateral in which the collateral-dependent practical expedient has not been utilized; ● any updates to credit lending policies and procedures, including lending strategies, underwriting standards, collection and recovery practices, not reflected in the models; and ● the quality of the internal credit review system. Loans that Do Not Share Risk Characteristics with Other Loans When a loan is assigned a substandard non-accrual risk rating grade, the loan subsequently is evaluated on an individual basis and no longer evaluated on a collective basis. The net realizable value of the loan is compared to the appropriate loan basis (i.e. PCD loan versus non-PCD loan) to determine any allowance for credit losses. Loans that are below a predetermined threshold, with the exception of 1-4 family residential loans, are fully reserved. The Company generally considers non-accrual loans to be collateral-dependent. The practical expedient to measure credit losses using the fair value of the collateral has been exercised. For commercial real estate loans, the fair value of collateral is primarily based on appraisals. For owner occupied real estate loans, underlying properties are occupied by the borrower in its business, and evaluations are based on business operations used to service the debt. For non-owner occupied real estate loans, underlying properties are income-producing and evaluations are based on tenant revenues. For income producing construction and land development loans, appraisals reflect the assumption that properties are completed. For 1-4 family residential loans that are graded substandard non-accrual, an assessment of value is made using the most recent appraisal on file. If the appraisal on file is older than two years, the latest property tax assessment is used as a screening value to determine if a reserve might be required. If the assessed value is less than the appraised value, this value is discounted for selling costs and is used to measure the reserve required. If the appraisal is less than two years old, the value is discounted for selling costs and compared to the appropriate basis in the loan. Consumer loans are charged off when they reach 90 days delinquency as a general rule. There are limited cases where the loan is not charged off due to special circumstances and is subject to the collateral review process. Allowance for Loan Losses for Loans Held for Investment Prior to the adoption of the new CECL standard as described in Note 2 to the consolidated financial statements, the Company’s allowance for loan losses was a reserve established through a provision for loan losses charged to or recovered from expense, which represents management’s best estimate of probable losses inherent in the existing portfolio of loans at the balance sheet date. The allowance for loan losses included allowance allocations calculated in accordance with the regulatory Interagency Policy Statement on the Allowance for Loan and Lease Losses and the Receivables and Contingencies Topics of the ASC. The level of the allowance reflected management’s continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions, and unidentified losses inherent in the current loan portfolio. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. While management utilized its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond its control, including the performance of the loan portfolio, the economy and changes in interest rates. The Bank’s allowance for loan losses consisted of three elements: (i) specific valuation allowances established for probable losses on individually impaired loans; (ii) general historical valuation allowances calculated based on historical loan loss experience for homogenous loans with similar collateral; and (iii) valuation allowances to adjust general reserves based on current economic conditions and other qualitative risk factors, including projected loss emergence period, both internal and external to the Bank. Changes in the volume and severity of past due, n |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2020 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | 2. Recently Issued Accounting Standards Accounting Standards Adopted During 2020 In March 2020, FASB issued ASU 2020-03 which included various clarifications and improvements related to financial instruments. The following topics are addressed: fair value option disclosures, applicability of portfolio exception to non-financial items, disclosures for depository and lending institutions, cross-reference to line-of-credit or revolving debt arrangements, cross-reference to net asset value practical expedient, the contractual term of a net investment in a lease for measuring expected credit losses, and recording of an allowance for credit losses when control of financial assets sold is regained. All items had various effective dates, which for the Company ranged from January 1, 2020 to the date of issuance. The adoption of ASU 2020-03 did not have a material impact on the Company’s consolidated financial statements. In December 2019, FASB issued ASU 2019-12 which simplifies the accounting for income taxes by removing certain exceptions to the general principles in the ASC and is intended to improve consistency by clarifying and amending existing guidance. The amendments are effective for annual periods beginning after December 15, 2020. As permitted within the amendment, the Company elected to early adopt and prospectively apply the provisions of this amendment as of January 1, 2020. The removal of the exceptions did not result in a material change in the Company’s current or deferred income tax provisions and did not have a material impact on the Company’s consolidated financial statements. In August 2018, FASB issued ASU 2018-15 which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include internal-use software licenses). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendment also includes presentation and disclosure provisions regarding capitalized implementation costs. The amendment is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. The Company adopted the provisions of this amendment as of January 1, 2020. The impact of this amendment is limited to presentation and disclosure changes that did not have an impact on the Company’s consolidated financial statements. In August 2018, FASB issued ASU 2018-13 which includes various removals, modifications and additions to existing guidance regarding fair value disclosures. The amendments are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. The Company adopted the provisions of these amendments as of January 1, 2020. The impact of these amendments is limited to presentation and disclosure changes that did not have an impact on the Company’s consolidated financial statements. In June 2016, FASB issued ASU 2016-13 which sets forth a current expected credit loss model that requires entities to measure all credit losses expected over the life of an exposure (or pool of exposures) for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The FASB has issued various updates, improvements and technical corrections to the standard since the issuance of ASU 2016-13. The new standard, which is codified in ASC 326, Financial Instruments – Credit Losses In March 2020, FASB issued ASU 2020-04, which is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. Further, in January 2021, FASB issued ASU 2021-01, which clarifies that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment are in the scope of ASU 2020-04 and therefore qualify for the available temporary optional expedients and exceptions. As such, entities that employ derivatives that are the designated hedged item in a hedge relationship where perfect effectiveness is assumed can continue to apply hedge accounting without de-designating the hedging relationship to the extent such derivatives are impacted by the discounting transition. The Company adopted the provisions of ASU 2020-04, as well as retrospectively applied the amendments of ASU 2021-01, as of December 31, 2020. The adoption of these amendments did not have a material impact on the Company’s consolidated financial statements. Accounting Standards Issued But Not Yet Adopted In January 2020, FASB issued ASU 2020-01 to clarify the interaction among ASC 321, ASC 323, and ASC 815 for equity securities, equity method investments, and certain financial instruments to acquire equity securities. ASU 2020-01 clarifies whether re-measurement of equity investments is appropriate when observable transactions cause the equity method to be triggered or discontinued. ASU 2020-01 also provides that certain forward contracts and purchased options to acquire equity securities will be measured under ASC 321 without an assessment of subsequent accounting upon settlement or exercise. The amendment is effective in periods beginning after December 15, 2020. The Company adopted the provisions of ASU 2020-01 as of January 1, 2021. The impact of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations | |
Discontinued Operations | 3. Discontinued Operations NLC Sale On June 30, 2020, Hilltop completed the sale of all of the outstanding capital stock of NLC, which comprised the operations of the former insurance segment, for cash proceeds of $154.1 million. During 2020, Hilltop recognized an aggregate gain associated with this transaction of $36.8 million, net of customary transaction costs of $5.1 million and was subject to post-closing adjustments. The resulting book gain from this sale transaction was not recognized for tax purposes due to the excess tax basis over book basis being greater than the recorded book gain. Any tax loss related to this transaction is deemed disallowed pursuant to the rules under the Internal Revenue Code. During the first quarter of 2020, management determined that the pending sale of NLC met the criteria to be presented as discontinued operations. Therefore, NLC’s results and its assets and liabilities have been presented as discontinued operations in the consolidated financial statements. All related notes to consolidated financial statements for discontinued operations have been included in this note. The following table details the carrying amounts of assets and liabilities of NLC reflected in the consolidated balance sheet under the caption “Assets of discontinued operations” and “Liabilities of discontinued operations”, respectively, at December 31, 2019. Assets Cash and due from banks $ 51,333 Securities: Available for sale, at fair value 86,899 Equity, at fair value 19,841 106,740 Premises and equipment, net 9,607 Operating lease right-of-use assets 2,739 Other assets 50,533 Goodwill 23,988 Other intangible assets, net 3,489 Total assets of discontinued operations $ 248,429 Liabilities Notes payable $ 27,500 Operating lease liabilities 2,783 Other liabilities 110,391 Total liabilities of discontinued operations $ 140,674 The following table presents the results of discontinued operations for NLC for the periods indicated. Year Ended December 31, 2020 2019 2018 Interest income: Securities: Taxable $ 1,752 $ 3,611 $ 4,310 Other 71 522 495 Total interest income 1,823 4,133 4,805 Interest expense: Notes payable 775 1,806 1,780 Noninterest income: Net insurance premiums earned 65,077 132,284 136,751 Other 3,051 10,915 5,909 Total noninterest income 68,128 143,199 142,660 Noninterest expense: Employees' compensation and benefits 6,002 11,663 11,474 Occupancy and equipment, net 464 991 1,284 Professional services 18,201 35,528 35,953 Loss and loss adjustment expenses 38,419 68,940 79,347 Other 3,987 10,796 11,863 Total noninterest expense 67,073 127,918 139,921 Income from discontinued operations before income taxes 2,103 17,608 5,764 Gain on disposal of discontinued operations 36,811 — — Income tax expense 518 3,618 823 Income from discontinued operations, net of income taxes $ 38,396 $ 13,990 $ 4,941 Securities The available for sale securities held by NLC at December 31, 2019 reflected in the consolidated balance sheets under the caption “Assets of discontinued operations” were primarily comprised of U.S. Treasury, residential mortgage-backed and corporate debt securities with aggregate unrealized gross gains of $2.5 million and measured using Level 2 inputs on a recurring basis. NLC’s available for sale portfolio had nominal unrealized gross losses at December 31, 2019. NLC had unrealized net gains of $1.1 million during 2020 from the equity securities held at December 31, 2019, measured using Level 1 inputs on a recurring basis. NLC recognized net gains of $1.9 million during 2019 due to changes in the fair value of equity securities still held at the balance sheet date. Reinsurance Activity Net insurance premiums earned, losses and LAE, and policy acquisition and other underwriting expenses are reported net of the amounts related to reinsurance ceded to other companies. Amounts recoverable from reinsurers related to the portions of the liability for losses and LAE and unearned insurance premiums ceded to them are included in other assets within the consolidated balance sheets. Reinsurance assumed from other companies, including assumed premiums written and earned, and losses and LAE, is accounted for in the same manner as direct insurance written. The effects of reinsurance on premiums written and earned are included within discontinued operations for all periods presented and are summarized as follows (in thousands). Year Ended December 31, 2020 2019 2018 Written Earned Written Earned Written Earned Premiums from direct business $ 63,811 $ 61,384 $ 125,157 $ 126,434 $ 129,611 $ 133,112 Reinsurance assumed 6,396 6,452 13,148 13,041 12,917 12,516 Reinsurance ceded (2,759) (2,759) (7,191) (7,191) (8,749) (8,877) Net premiums $ 67,448 $ 65,077 $ 131,114 $ 132,284 $ 133,779 $ 136,751 The effects of reinsurance on incurred losses and LAE are included within discontinued operations for all periods and are as follows (in thousands). Year Ended December 31, 2020 2019 2018 Losses and LAE incurred $ 38,225 $ 68,130 $ 76,464 Reinsurance recoverables 194 810 2,883 Net loss and LAE incurred $ 38,419 $ 68,940 $ 79,347 Costs of acquiring insurance primarily consist of commissions, premium taxes and underwriting expenses, and are deferred and amortized over the terms of the policies or reinsurance treaties to which they relate. Proceeds from reinsurance transactions that represent recovery of acquisition costs reduce applicable unamortized acquisition costs in such a manner that net acquisition costs are capitalized and charged to expense in proportion to net revenue recognized. A premium deficiency and a corresponding charge to income is recognized if the sum of the expected loss and LAE, unamortized policy acquisition costs, and maintenance costs exceed related unearned insurance premiums and anticipated investment income. At December 31, 2019, there was no premium deficiency. Policy acquisition expenses, primarily commissions, premium taxes and underwriting expenses related to the successful issuance of a new or renewal policy incurred by NLC are deferred and charged against income ratably over the terms of the related policies. A summary of the activity in deferred policy acquisition costs included within discontinued operations for all periods is as follows (in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 15,672 $ 16,633 $ 16,988 Acquisition expenses capitalized 17,642 32,245 34,328 Amortization charged to income (16,967) (33,206) (34,683) Balance, end of year $ 16,347 $ 15,672 $ 16,633 Insurance Losses and Loss Adjustment Expenses At December 31, 2019, our gross reserve for unpaid losses and LAE reflected in the consolidated balance sheet under the caption “Liabilities of discontinued operations” was $15.3 million, including estimated recoveries from reinsurance of $1.0 million. The liability for insurance losses and LAE represents estimates of the ultimate unpaid cost of all losses incurred, including losses for claims that have not yet been reported, less a reduction for reinsurance recoverables related to those liabilities. Separately for each insurance subsidiary and each line of business, our actuaries estimate the liability for unpaid losses and LAE by first estimating ultimate losses and LAE amounts for each year, prior to recognizing the impact of reinsurance. The amount of liabilities for reported claims was based primarily on a claim-by-claim evaluation of coverage, liability, injury severity or scope of property damage, and any other information considered relevant to estimating exposure presented by the claim. The methods that our actuaries utilized to estimate ultimate loss and LAE amounts were the paid and reported loss development method and the paid and reported Bornhuetter-Ferguson method. Significant periods of time can elapse between the occurrence of an insured loss, the reporting of the loss to the insurer and the insurer’s payment of that loss. NLC’s liabilities for unpaid losses represent the best estimate at a given point in time of what it expects to pay claimants, based on facts, circumstances and historical trends then known. Estimating the liability for unpaid losses and LAE is inherently judgmental and is influenced by factors that are subject to significant variation. Liabilities for LAE are intended to cover the ultimate cost of settling claims, including investigation and defense of lawsuits resulting from such claims. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition | |
Acquisition | 4. Acquisition On August 1, 2018, in an effort to expand its Houston-area banking operations, the Company acquired privately-held The Bank of River Oaks (“BORO”) in an all-cash transaction (the “BORO Acquisition”). Pursuant to the terms of the definitive agreement, the Company paid cash in the aggregate amount of $85 million to the shareholders and option holders of BORO. The operations of BORO are included in the Bank’s operating results beginning August 1, 2018. BORO’s results of operations prior to the acquisition date are not included in the Company’s consolidated operating results. The BORO Acquisition was accounted for using the acquisition method of accounting, and accordingly, purchased assets, including identifiable intangible assets, and assumed liabilities were recorded at their respective acquisition date fair values. The resulting fair values of the identifiable assets acquired and liabilities assumed from BORO at August 1, 2018 are summarized in the following table (in thousands). Cash and due from banks $ 21,756 Securities 60,477 Loans held for investment 326,618 Other assets 25,912 Total identifiable assets acquired 434,763 Deposits 376,393 Short-term borrowings 10,000 Other liabilities 2,996 Total liabilities assumed 389,389 Net identifiable assets acquired 45,374 Goodwill resulting from the acquisition 39,627 Net assets acquired $ 85,001 The goodwill of $39.6 million resulting from the BORO Acquisition represents the inherent long-term value expected from the business opportunities created from combining BORO with the Company. The Company used significant estimates and assumptions to value the identifiable assets acquired and liabilities assumed. The amount of goodwill recorded in connection with the Company’s acquisition of BORO is not deductible for tax purposes. Included within the fair value of other assets in the table above are identifiable core deposits intangible assets recorded in connection with the BORO Acquisition of $10.0 million which is being amortized on an accelerated basis over an estimated useful life of six years . The fair value of the core deposit intangible assets was estimated using the net cost savings method, a variation of the income approach. This involved the use of the following significant assumptions: cost of deposits, customer attrition rate, and discount rate. During 2018, pre-tax transaction- and integration-related expenses of $8.2 million associated with the BORO Acquisition are included in noninterest expense within the consolidated statement of operations. Such expenses were for professional services and other incremental employee costs associated with the integration of BORO’s operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 5. Fair Value Measurements Fair Value Measurements and Disclosures The Company determines fair values in compliance with The Fair Value Measurements and Disclosures Topic of the ASC (the “Fair Value Topic”). The Fair Value Topic defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The Fair Value Topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Fair Value Topic assumes that transactions upon which fair value measurements are based occur in the principal market for the asset or liability being measured. Further, fair value measurements made under the Fair Value Topic exclude transaction costs and are not the result of forced transactions. The Fair Value Topic includes a fair value hierarchy that classifies fair value measurements based upon the inputs used in valuing the assets or liabilities that are the subject of fair value measurements. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs, as indicated below. ● Level 1 Inputs : Unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. ● Level 2 Inputs : Observable inputs other than Level 1 prices. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, yield curves, prepayment speeds, default rates, credit risks and loss severities), and inputs that are derived from or corroborated by market data, among others. ● Level 3 Inputs : Unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Level 3 inputs include pricing models and discounted cash flow techniques, among others . Fair Value Option The Company has elected to measure substantially all of PrimeLending’s mortgage loans held for sale and the retained MSR asset at fair value, under the provisions of the Fair Value Option. The Company elected to apply the provisions of the Fair Value Option to these items so that it would have the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. At December 31, 2020 and 2019, the aggregate fair value of PrimeLending’s mortgage loans held for sale accounted for under the Fair Value Option was $2.52 billion and $1.94 billion, respectively, and the unpaid principal balance of those loans was $2.41 billion and $1.88 billion, respectively. The interest component of fair value is reported as interest income on loans in the accompanying consolidated statements of operations. The Company holds a number of financial instruments that are measured at fair value on a recurring basis, either by the application of the Fair Value Option or other authoritative pronouncements. The fair values of those instruments are determined primarily using Level 2 inputs, as further described below. Those inputs include quotes from mortgage loan investors and derivatives dealers and data from independent pricing services. The fair value of loans held for sale is determined using an exit price method. Trading Securities Available For Sale Securities Equity Securities Loans Held for Sale Derivatives MSR Asset — The MSR asset is reported at fair value using Level 3 inputs. The MSR asset is valued by projecting net servicing cash flows, which are then discounted to estimate the fair value. The fair value of the MSR asset is impacted by a variety of factors. Prepayment rates and discount rates, the most significant unobservable inputs, are discussed further in Note 12 to the consolidated financial statements. The increase in the weighted average discount rate used to value the MSR asset at December 31, 2020, compared to December 31, 2019, addresses the effect of the reduction in third-party servicing outlets beginning in the second quarter of 2020 resulting from the impact of the Coronavirus Aid Relief, and Economic Security Act (“CARES Act”). The CARES Act permits borrowers of federally-backed mortgage loans to forbear payments, which could negatively impact servicers’ liquidity and their ability to purchase servicing. Securities Sold, Not Yet Purchased The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands). Level 1 Level 2 Level 3 Total December 31, 2020 Inputs Inputs Inputs Fair Value Trading securities $ 45,390 $ 648,865 $ — $ 694,255 Available for sale securities — 1,462,205 — 1,462,205 Equity securities 140 — — 140 Loans held for sale — 2,449,588 71,816 2,521,404 Derivative assets — 126,898 — 126,898 MSR asset — — 143,742 143,742 Securities sold, not yet purchased 54,494 25,295 — 79,789 Derivative liabilities — 74,598 — 74,598 Level 1 Level 2 Level 3 Total December 31, 2019 Inputs Inputs Inputs Fair Value Trading securities $ — $ 689,576 $ — $ 689,576 Available for sale securities — 911,493 — 911,493 Equity securities 166 — — 166 Loans held for sale — 1,868,518 67,195 1,935,713 Derivative assets — 33,129 — 33,129 MSR asset — — 55,504 55,504 Securities sold, not yet purchased 29,080 14,737 — 43,817 Derivative liabilities — 17,140 — 17,140 The following table includes a rollforward for those financial instruments measured at fair value using Level 3 inputs (in thousands). Total Gains or Losses (Realized or Unrealized) Balance at Included in Other Beginning of Purchases/ Sales/ Transfers into Included in Comprehensive Balance at Year Additions Reductions Level 3 Net Income Income (Loss) End of Year Year ended December 31, 2020 Loans held for sale $ 67,195 $ 61,410 $ (57,682) $ 10,323 $ (9,430) $ — $ 71,816 MSR asset 55,504 162,914 (36,750) — (37,926) — 143,742 Total $ 122,699 $ 224,324 $ (94,432) $ 10,323 $ (47,356) $ — $ 215,558 Year ended December 31, 2019 Loans held for sale $ 50,464 $ 60,475 $ (34,849) $ 1,136 $ (10,031) $ — $ 67,195 MSR asset 66,102 13,755 — — (24,353) — 55,504 Total $ 116,566 $ 74,230 $ (34,849) $ 1,136 $ (34,384) $ — $ 122,699 Year ended December 31, 2018 Loans held for sale $ 36,972 $ 61,573 $ (41,801) $ — $ (6,280) $ — $ 50,464 MSR asset 54,714 25,028 (9,303) — (4,337) — 66,102 Total $ 91,686 $ 86,601 $ (51,104) $ — $ (10,617) $ — $ 116,566 All net realized and unrealized gains (losses) in the table above are reflected in the accompanying consolidated financial statements. The unrealized gains (losses) relate to financial instruments still held at December 31, 2020. For Level 3 financial instruments measured at fair value on a recurring basis at December 31, 2020 and 2019, the significant unobservable inputs used in the fair value measurements were as follows. Range (Weighted-Average) December 31, Financial instrument Valuation Technique Unobservable Inputs 2020 2019 Loans Market comparable Projected price 91 - 94 % ( 94 %) 92 - 96 % ( 95 %) MSR asset Discounted cash flows Constant prepayment rate 12.15 % 13.16 % Discount rate 14.60 % 11.14 % The Company had no transfers between Levels 1 and 2 during the periods presented. Any transfers are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur. The following table presents those changes in fair value of instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Other Total Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ 52,296 $ — $ 52,296 $ 12,775 $ — $ 12,775 $ (8,063) $ — $ (8,063) MSR asset (37,926) — (37,926) (24,353) — (24,353) (4,337) — (4,337) The Company determines the fair value of OREO on a non-recurring basis. In particular, the fair value of properties are determined at their respective acquisition date fair values. In addition, facts and circumstances may dictate a fair value measurement when there is evidence of impairment. The Company determines fair value primarily using independent appraisals of OREO properties. The resulting fair value measurements are classified as Level 2 inputs. At December 31, 2020 and 2019, the estimated fair value of OREO was $21.3 million and $18.2 million, respectively, and the underlying fair value measurements utilized Level 2 inputs. The amounts are included in other assets within the consolidated balance sheets. During the reported periods, all fair value measurements for OREO subsequent to initial recognition utilized Level 2 inputs. The Company recorded total losses of $4.4 million, $1.4 million and $2.8 million during 2020, 2019 and 2018, respectively, which represent a change in fair value subsequent to initial recognition of the asset. The Fair Value of Financial Instruments Subsection of the ASC requires disclosure of the fair value of financial assets and liabilities, including the financial assets and liabilities previously discussed. The methods for determining estimated fair value for financial assets and liabilities measured at fair value on a recurring or non-recurring basis are discussed above. For other financial assets and liabilities, the Company utilizes quoted market prices, if available, to estimate the fair value of financial instruments. Because no quoted market prices exist for a significant portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows, and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the estimates provided herein do not necessarily indicate amounts which could be realized in a current transaction. Further, as it is management’s intent to hold a significant portion of its financial instruments to maturity, it is not probable that the fair values shown below will be realized in a current transaction. Because of the wide range of permissible valuation techniques and the numerous estimates which must be made, it may be difficult to make reasonable comparisons of the Company’s fair value information to that of other financial institutions. The aggregate estimated fair value amount should in no way be construed as representative of the underlying value of Hilltop and its subsidiaries. The following methods and assumptions are typically used in estimating the fair value disclosures for financial instruments: Cash and Cash Equivalents Assets Segregated for Regulatory Purposes Securities Purchased Under Agreements to Resell Held to Maturity Securities Loans Held for Sale Loans Held for Investment Broker-Dealer and Clearing Organization Receivables and Payables Deposits offered for deposits of similar remaining maturities. The carrying amount for variable-rate certificates of deposit approximates their fair values. Short-Term Borrowings Debt Other Assets and Liabilities The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands). Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2020 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 1,062,946 $ 1,062,946 $ — $ — $ 1,062,946 Assets segregated for regulatory purposes 290,357 290,357 — — 290,357 Securities purchased under agreements to resell 80,319 — 80,319 — 80,319 Held to maturity securities 311,944 — 326,671 — 326,671 Loans held for sale 266,982 — 266,982 — 266,982 Loans held for investment, net 7,544,097 — 437,007 7,351,411 7,788,418 Broker-dealer and clearing organization receivables 1,404,727 — 1,404,727 — 1,404,727 Other assets 74,881 — 73,111 1,770 74,881 Financial liabilities: Deposits 11,242,319 — 11,256,629 — 11,256,629 Broker-dealer and clearing organization payables 1,368,373 — 1,368,373 — 1,368,373 Short-term borrowings 695,798 — 695,798 — 695,798 Debt 448,999 — 448,999 — 448,999 Other liabilities 6,133 — 6,133 — 6,133 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2019 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 434,020 $ 434,020 $ — $ — $ 434,020 Assets segregated for regulatory purposes 157,436 157,436 — — 157,436 Securities purchased under agreements to resell 59,031 — 59,031 — 59,031 Held to maturity securities 386,326 — 388,930 — 388,930 Loans held for sale 170,648 — 170,648 — 170,648 Loans held for investment, net 7,320,264 — 576,527 6,990,706 7,567,233 Broker-dealer and clearing organization receivables 1,780,280 — 1,780,280 — 1,780,280 Other assets 71,040 — 69,580 1,460 71,040 Financial liabilities: Deposits 9,032,214 — 9,032,496 — 9,032,496 Broker-dealer and clearing organization payables 1,605,518 — 1,605,518 — 1,605,518 Short-term borrowings 1,424,010 — 1,424,010 — 1,424,010 Debt 323,281 — 323,281 — 323,281 Other liabilities 8,340 — 8,340 — 8,340 The Company held equity investments other than securities of $63.6 million and $36.6 million at December 31, 2020 and 2019, respectively, which are included within other assets in the consolidated balance sheets. Of the $63.6 million of such equity investments held at December 31, 2020, $22.8 million do not have readily determinable fair values and each is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The following table presents the adjustments to the carrying value of these investments (in thousands). Year Ended December 31, 2020 2019 Balance, beginning of year $ 19,771 $ 20,376 Additional investments 500 — Upward adjustments 4,188 403 Impairments and downward adjustments (1,615) (1,008) Dispositions — — Balance, end of year $ 22,844 $ 19,771 |
Securities
Securities | 12 Months Ended |
Dec. 31, 2020 | |
Securities | |
Securities | 6. Securities The fair value of trading securities are summarized as follows (in thousands). December 31, 2020 2019 U.S. Treasury securities $ 40,491 $ — U.S. government agencies: Bonds 40 24,680 Residential mortgage-backed securities 336,081 331,601 Commercial mortgage-backed securities 876 2,145 Collateralized mortgage obligations 69,172 191,154 Corporate debt securities 62,481 36,973 States and political subdivisions 171,573 93,117 Unit investment trusts — 3,468 Private-label securitized product 8,571 2,992 Other 4,970 3,446 Totals $ 694,255 $ 689,576 In addition to the securities shown above, the Hilltop Broker-Dealers enter into transactions that represent commitments to purchase and deliver securities at prevailing future market prices to facilitate customer transactions and satisfy such commitments. Accordingly, the Hilltop Broker-Dealers’ ultimate obligation may exceed the amount recognized in the financial statements. These securities, which are carried at fair value and reported as securities sold, not yet purchased in the consolidated balance sheets, had a value of $79.8 million and $43.8 million at December 31, 2020 and 2019, respectively. The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). Available for Sale Amortized Unrealized Unrealized December 31, 2020 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 82,036 $ 1,095 $ (325) $ 82,806 Residential mortgage-backed securities 624,863 17,194 (446) 641,611 Commercial mortgage-backed securities 124,929 768 (1,159) 124,538 Collateralized mortgage obligations 559,362 6,916 (370) 565,908 States and political subdivisions 44,729 2,613 — 47,342 Totals $ 1,435,919 $ 28,586 $ (2,300) $ 1,462,205 Available for Sale Amortized Unrealized Unrealized December 31, 2019 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 84,590 $ 1,049 $ (64) $ 85,575 Residential mortgage-backed securities 430,514 6,662 (147) 437,029 Commercial mortgage-backed securities 11,488 543 — 12,031 Collateralized mortgage obligations 333,256 3,175 (815) 335,616 States and political subdivisions 39,969 1,273 — 41,242 Totals $ 899,817 $ 12,702 $ (1,026) $ 911,493 Held to Maturity Amortized Unrealized Unrealized December 31, 2020 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 13,547 $ 708 $ — $ 14,255 Commercial mortgage-backed securities 152,820 9,205 — 162,025 Collateralized mortgage obligations 74,932 2,036 — 76,968 States and political subdivisions 70,645 2,778 — 73,423 Totals $ 311,944 $ 14,727 $ — $ 326,671 Held to Maturity Amortized Unrealized Unrealized December 31, 2019 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 24,020 $ 10 $ (35) $ 23,995 Residential mortgage-backed securities 17,776 295 — 18,071 Commercial mortgage-backed securities 161,624 2,810 (655) 163,779 Collateralized mortgage obligations 113,894 226 (904) 113,216 States and political subdivisions 69,012 1,013 (156) 69,869 Totals $ 386,326 $ 4,354 $ (1,750) $ 388,930 Additionally, the Company had unrealized net gains of $0.1 million at both December 31, 2020 and 2019 from equity securities with fair values of $0.1 million and $0.2 million at December 31, 2020 and 2019, respectively. The Company recognized nominal net gains and losses during 2020 and 2019 due to changes in the fair value of equity securities still held at the balance sheet date. During 2020 and 2019, net gains and losses recognized from equity securities sold were nominal. Information regarding available for sale, held to maturity and equity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). December 31, 2020 December 31, 2019 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. government agencies: Bonds: Unrealized loss for less than twelve months 8 $ 60,298 $ 325 2 $ 24,937 $ 64 Unrealized loss for twelve months or longer — — — — — — 8 60,298 325 2 24,937 64 Residential mortgage-backed securities: Unrealized loss for less than twelve months 15 86,287 429 37 36,187 87 Unrealized loss for twelve months or longer — — — 2 13,683 58 15 86,287 429 39 49,870 145 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 10 105,386 1,176 1 9,967 2 Unrealized loss for twelve months or longer — — — — — — 10 105,386 1,176 1 9,967 2 Collateralized mortgage obligations: Unrealized loss for less than twelve months 10 101,990 324 15 94,545 446 Unrealized loss for twelve months or longer 5 13,611 46 13 46,217 369 15 115,601 370 28 140,762 815 States and political subdivisions: Unrealized loss for less than twelve months — — — — — — Unrealized loss for twelve months or longer — — — 1 487 — — — — 1 487 — Total available for sale: Unrealized loss for less than twelve months 43 353,961 2,254 55 165,636 599 Unrealized loss for twelve months or longer 5 13,611 46 16 60,387 427 48 $ 367,572 $ 2,300 71 $ 226,023 $ 1,026 December 31, 2020 December 31, 2019 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Held to Maturity U.S. government agencies: Bonds: Unrealized loss for less than twelve months — $ — $ — 2 $ 9,665 $ 35 Unrealized loss for twelve months or longer — — — — — — — — — 2 9,665 35 Commercial mortgage-backed securities: Unrealized loss for less than twelve months — — — 8 44,610 656 Unrealized loss for twelve months or longer — — — — — — — — — 8 44,610 656 Collateralized mortgage obligations: Unrealized loss for less than twelve months — — — 4 23,904 287 Unrealized loss for twelve months or longer — — — 8 59,560 617 — — — 12 83,464 904 States and political subdivisions: Unrealized loss for less than twelve months 2 578 — 38 15,996 124 Unrealized loss for twelve months or longer — — — 4 1,099 31 2 578 — 42 17,095 155 Total held to maturity: Unrealized loss for less than twelve months 2 578 — 52 94,175 1,102 Unrealized loss for twelve months or longer — — — 12 60,659 648 2 $ 578 $ — 64 $ 154,834 $ 1,750 Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. The amortized cost and fair value of securities, excluding trading and equity securities, at December 31, 2020 are shown by contractual maturity below (in thousands). Available for Sale Held to Maturity Amortized Amortized Cost Fair Value Cost Fair Value Due in one year or less $ 4,999 $ 5,072 $ 645 $ 646 Due after one year through five years 61,182 62,636 1,225 1,273 Due after five years through ten years 17,537 18,179 8,205 8,525 Due after ten years 43,047 44,261 60,570 62,979 126,765 130,148 70,645 73,423 Residential mortgage-backed securities 624,863 641,611 13,547 14,255 Collateralized mortgage obligations 559,362 565,908 74,932 76,968 Commercial mortgage-backed securities 124,929 124,538 152,820 162,025 $ 1,435,919 $ 1,462,205 $ 311,944 $ 326,671 During 2020, 2019 and 2018, the Company recognized net gains from its trading portfolio of $122.0 million, $20.5 million and $6.2 million, respectively. In addition, the Hilltop Broker-Dealers realized net gains from structured product trading activities of $77.1 million, $132.7 million and $41.9 million during 2020, 2019 and 2018, respectively. During 2020 and 2019, the Company had other realized gains on securities of $0.2 million and other realized losses on securities of $2.5 million, respectively, while other net realized gains on securities during 2018 were nominal. All such net gains and losses are recorded as a component of other noninterest income within the consolidated statements of operations. Securities with a carrying amount of $712.3 million and $576.0 million (with a fair value of $733.8 million and $583.6 million, respectively) at December 31, 2020 and 2019, respectively, were pledged by the Bank to secure public and trust deposits, federal funds purchased and securities sold under agreements to repurchase, and for other purposes as required or permitted by law. Substantially all of these pledged securities were included in the Company’s available for sale and held to maturity securities portfolios at December 31, 2020 and 2019. Mortgage-backed securities and collateralized mortgage obligations consist principally of GNMA, Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) pass-through and participation certificates. GNMA securities are guaranteed by the full faith and credit of the United States, while FNMA and FHLMC securities are fully guaranteed by those respective United States government-sponsored agencies, and conditionally guaranteed by the full faith and credit of the United States. |
Loans Held for Investment
Loans Held for Investment | 12 Months Ended |
Dec. 31, 2020 | |
Loans Held for Investment | |
Loans Held for Investment | 7. Loans Held for Investment The Bank originates loans to customers primarily in Texas. Although the Bank has diversified loan and leasing portfolios and, generally, holds collateral against amounts advanced to customers, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the region and of the industries in which its debtors operate, which consist primarily of agribusiness, construction, energy, real estate and wholesale/retail trade. The Hilltop Broker-Dealers make loans to customers and correspondents through transactions originated by both employees and independent retail representatives throughout the United States. The Hilltop Broker-Dealers control risk by requiring customers to maintain collateral in compliance with various regulatory and internal guidelines, which may vary based upon market conditions. Securities owned by customers and held as collateral for loans are not included in the consolidated financial statements. Loans held for investment summarized by portfolio segment are as follows (in thousands). December 31, 2020 2019 Commercial real estate $ 3,133,903 $ 3,000,523 Commercial and industrial (1) 2,627,774 2,025,720 Construction and land development 828,852 940,564 1-4 family residential 629,938 791,020 Consumer 35,667 47,046 Broker-dealer (2) 437,007 576,527 7,693,141 7,381,400 Allowance for credit losses (149,044) (61,136) Total loans held for investment, net of allowance $ 7,544,097 $ 7,320,264 (1) Included loans totaling $486.7 million at December 31, 2020 funded through the Paycheck Protection Program. (2) Primarily represents margin loans to customers and correspondents associated with broker-dealer segment operations. The following table provides details associated with non-accrual loans, excluding those classified as held for sale (in thousands). Non-accrual Loans Interest Income December 31, 2020 Recognized (1) With With No December 31, Year Ended Allowance Allowance Total 2019 December 31, 2020 Commercial real estate: Non-owner occupied $ 1,213 $ 445 $ 1,658 $ 3,813 $ 1,364 Owner occupied 3,473 6,002 9,475 3,495 295 Commercial and industrial 10,821 23,228 34,049 15,262 2,362 Construction and land development 102 405 507 1,316 110 1-4 family residential 4,726 16,651 21,377 7,382 1,568 Consumer 28 — 28 26 122 Broker-dealer — — — — — $ 20,363 $ 46,731 $ 67,094 $ 31,294 $ 5,821 (1) At December 31, 2020 and 2019, $10.9 million and $4.8 million, respectively, of real estate loans secured by residential properties and classified as held for sale were in non-accrual status. Loans accounted for on a non-accrual basis increased from December 31, 2019 to December 31, 2020, by $35.8 million. A number of loans previously accounted for in accruing pools under ASC 310-30 were reclassified to non-accrual in the CECL transition. The increase in commercial real estate loans in non-accrual status at December 31, 2020 of $3.8 million was primarily related to the addition of loans totaling $8.4 million, of which $6.8 million were previously accruing at December 31, 2019, partially offset by the resolution of loans totaling $4.5 million. Commercial real estate loans in non-accrual status carried a reserve of $1.1 million at December 31, 2020. The increase in commercial and industrial loans in non-accrual status since December 31, 2019 was primarily due to a small number of relationships that included loans totaling $18.9 million and a CECL transition gross-up adjustment of $4.3 million related to a single loan. Commercial and industrial loans in non-accrual status carried a reserve of $7.9 million at December 31, 2020. The increase in 1-4 family residential loans in non-accrual status at December 31, 2020, compared to December 31, 2019, was primarily related to the addition of $17.1 million of loans in non-accrual status, of which $15.0 million were previously accruing at December 31, 2019, partially offset by both the return to accruing classification and resolution of loans totaling $3.2 million. 1-4 family residential loans in non-accrual status carried a reserve of $0.7 million at December 31, 2020. The Company considers non-accrual loans to be collateral-dependent unless there are underlying mitigating circumstances. The practical expedient to measure the allowance using the fair value of the collateral has been implemented. The Bank classifies loan modifications as troubled debt restructurings (“TDRs”) when it concludes that it has both granted a concession to a debtor and that the debtor is experiencing financial difficulties. Loan modifications are typically structured to create affordable payments for the debtor and can be achieved in a variety of ways. The Bank modifies loans by reducing interest rates and/or lengthening loan amortization schedules. The Bank may also reconfigure a single loan into two or more loans (“A/B Note”). The typical A/B Note restructure results in a “bad” loan which is charged off and a “good” loan or loans, the terms of which comply with the Bank’s customary underwriting policies. The debt charged off on the “bad” loan is not forgiven to the debtor. In March 2020, the CARES Act was passed, which, among other things, allows the Bank to suspend the requirements for certain loan modifications to be categorized as a TDR, including the related impairment for accounting purposes. On December 27, 2020, the Consolidated Appropriations Act 2021 was signed into law . Information regarding TDRs granted during 2020 and 2019 that do not qualify for the CARES Act exemption is shown in the following table (dollars in thousands). There were no TDRs granted during 2018. Year Ended December 31, 2020 Year Ended December 31, 2019 Number of Balance at Balance at Number of Balance at Balance at Loans Extension End of Period Loans Extension End of Period Commercial real estate: Non-owner occupied — $ — $ — — $ — $ — Owner occupied — — — — — — Commercial and industrial 3 9,464 4,116 4 9,618 8,566 Construction and land development — — — — — — 1-4 family residential 5 438 438 — — — Consumer — — — — — — Broker-dealer — — — — — — 8 $ 9,902 $ 4,554 4 $ 9,618 $ 8,566 All of the loan modifications included in the table above involved payment term extensions. The Bank did not grant principal reductions on any restructured loans during 2020, 2019 or 2018. At December 31, 2020 and 2019, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs. There were no TDRs granted during the twelve months preceding December 31, 2020, 2019 or 2018 for which a payment was at least 30 days past due. An analysis of the aging of the Company’s loan portfolio is shown in the following tables (in thousands). Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current Total Past Due December 31, 2020 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 1,919 $ — $ 199 $ 2,118 $ 1,786,193 $ 1,788,311 $ — Owner occupied 195 522 8,328 9,045 1,336,547 1,345,592 — Commercial and industrial 3,114 407 7,318 10,839 2,616,935 2,627,774 6 Construction and land development 19 — — 19 828,833 828,852 — 1-4 family residential 8,110 3,040 12,420 23,570 606,368 629,938 — Consumer 172 123 26 321 35,346 35,667 — Broker-dealer — — — — 437,007 437,007 — $ 13,529 $ 4,092 $ 28,291 $ 45,912 $ 7,647,229 $ 7,693,141 $ 6 Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current Total Past Due December 31, 2019 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 4,062 $ — $ 2,790 $ 6,852 $ 1,702,500 $ 1,709,352 $ — Owner occupied 1,813 880 3,265 5,958 1,285,213 1,291,171 — Commercial and industrial 5,967 1,735 3,395 11,097 2,014,623 2,025,720 3 Construction and land development 7,580 1,827 — 9,407 931,157 940,564 — 1-4 family residential 12,058 3,442 6,520 22,020 769,000 791,020 — Consumer 455 34 — 489 46,557 47,046 — Broker-dealer — — — — 576,527 576,527 — $ 31,935 $ 7,918 $ 15,970 $ 55,823 $ 7,325,577 $ 7,381,400 $ 3 In addition to the loans shown in the tables above, PrimeLending had $243.6 million and $102.7 million of loans included in loans held for sale (with an aggregate unpaid principal balance of $245.5 million and $104.0 million, respectively) that were 90 days past due and accruing interest at December 31, 2020 and 2019, respectively. These loans are guaranteed by U.S. government agencies and include loans that are subject to repurchase, or have been repurchased, by PrimeLending. In response to the ongoing COVID-19 pandemic, the Company allowed modifications, such as payment deferrals for up to 90 days and temporary forbearance, to credit-worthy borrowers who are experiencing temporary hardship due to the effects of COVID-19. These short-term modifications generally meet the criterial of the CARES Act and, therefore, they are not reported as past due or placed on non-accrual status (provided the loans were not past due or on non-accrual status prior to the deferral). The Company elected to accrue and recognize interest income on these modifications during the payment deferral period. Additionally, the Company granted temporary forbearance to borrowers of a federally backed mortgage loan experiencing financial hardship due, directly or indirectly, to the COVID-19 pandemic. The CARES Act, which among other things, established the ability for financial institutions to grant a forbearance for up to 180 days, which can be extended for an additional 180-day period upon the request of the borrower. During that time, no fees, penalties or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the mortgage contract will accrue on the borrower’s account. As of December 31, 2020, PrimeLending had $198.8 million of loans subject to repurchase under a forbearance agreement. Management tracks credit quality trends on a quarterly basis related to: (i) past due levels, (ii) non-performing asset levels, (iii) classified loan levels, and (v) general economic conditions in state and local markets. The Company defines classified loans as loans with a risk rating of substandard, doubtful or loss. A description of the risk rating internal grades for commercial loans to is presented in the following table. Risk Rating Internal Grade Risk Rating Description Pass low risk 1 - 3 Represents loans to very high credit quality commercial borrowers of investment or near investment grade. These borrowers have significant capital strength, moderate leverage, stable earnings and growth, and readily available financing alternatives. Commercial borrowers entirely cash secured are also included in this category. Pass normal risk 4 - 7 Represents loans to commercial borrowers of solid credit quality with moderate risk. Borrowers in these grades are differentiated from higher grades on the basis of size (capital and/or revenue), leverage, asset quality and the stability of the industry or market area. Pass high risk 8 - 10 Represents "pass grade" loans to commercial borrowers of higher, but acceptable credit quality and risk. Such borrowers are differentiated from Pass Normal Risk in terms of size, secondary sources of repayment or they are of lesser stature in other key credit metrics. Watch 11 Represents loans on management's "watch list" and is intended to be utilized on a temporary basis for pass grade commercial borrowers where a significant risk-modifying action is anticipated in the near term. Special mention 12 Represents loans with potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in a deterioration of the repayment prospects for the loans and weaken the Company's credit position at some future date. Substandard accrual 13 Represents loans for which the accrual of interest has not been stopped, but are inadequately protected by the current sound worth and paying capacity of the obligor or the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Substandard non-accrual 14 Represents loans for which the accrual of interest has been stopped and includes loans where interest is more than 90 days past due and not fully secured and loans where a specific valuation allowance may be necessary. Doubtful 15 Represents loans that are placed on non-accrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near-term event which lacks certainty. Loss 16 Represents loans that are to be charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. Rating is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt. The following table presents loans held for investment grouped by asset class and credit quality indicator, segregated by year of origination or renewal (in thousands). Amortized Cost Basis by Origination Year 2015 and December 31, 2020 2020 2019 2018 2017 2016 Prior Revolving Total Commercial real estate: non-owner occupied Internal Grade 1-3 (Pass low risk) $ 21,135 $ 22,913 $ 3,171 $ 2,735 $ 12,896 $ 15,263 $ 1 $ 78,114 Internal Grade 4-7 (Pass normal risk) 245,833 138,836 83,951 88,119 108,371 64,200 47,920 777,230 Internal Grade 8-11 (Pass high risk and watch) 227,440 133,246 122,022 99,473 108,536 64,031 488 755,236 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 34,020 16,139 29,166 29,810 33,353 33,467 118 176,073 Internal Grade 14 (Substandard non-accrual) — — — — — 1,658 — 1,658 Commercial real estate: owner occupied Internal Grade 1-3 (Pass low risk) $ 60,809 $ 21,011 $ 12,712 $ 44,163 $ 21,567 $ 37,688 $ 1 $ 197,951 Internal Grade 4-7 (Pass normal risk) 164,939 169,582 131,821 56,801 53,811 75,372 39,868 692,194 Internal Grade 8-11 (Pass high risk and watch) 118,328 80,375 49,601 23,588 23,330 30,249 1,291 326,762 Internal Grade 12 (Special mention) 365 — 3,691 — — 527 — 4,583 Internal Grade 13 (Substandard accrual) 8,372 5,620 69,617 10,315 8,663 12,040 — 114,627 Internal Grade 14 (Substandard non-accrual) 506 1,259 441 5,345 1,045 879 — 9,475 Commercial and industrial Internal Grade 1-3 (Pass low risk) $ 30,754 $ 27,144 $ 7,149 $ 5,486 $ 3,587 $ 335 $ 21,651 $ 96,106 Internal Grade 4-7 (Pass normal risk) 179,394 54,423 53,908 29,778 24,179 10,945 395,320 747,947 Internal Grade 8-11 (Pass high risk and watch) 95,835 62,411 20,162 13,459 13,885 2,144 197,273 405,169 Internal Grade 12 (Special mention) 757 14 3,723 — 152 — 2,093 6,739 Internal Grade 13 (Substandard accrual) 9,863 3,689 13,788 5,531 5,759 253 19,360 58,243 Internal Grade 14 (Substandard non-accrual) 25,107 5,084 2,021 315 16 98 1,408 34,049 Construction and land development Internal Grade 1-3 (Pass low risk) $ 15,764 $ 2,710 $ 4,176 $ 264 $ 4,129 $ 331 $ 624 $ 27,998 Internal Grade 4-7 (Pass normal risk) 202,624 103,864 63,135 3,210 2,596 3,142 28,387 406,958 Internal Grade 8-11 (Pass high risk and watch) 194,432 97,206 47,102 9,659 3,552 544 7,951 360,446 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 8,684 29 — 5,385 — 65 — 14,163 Internal Grade 14 (Substandard non-accrual) — 405 — — — 102 — 507 Construction and land development - individuals FICO less than 620 $ — $ — $ — $ — $ — $ — $ — $ — FICO between 620 and 720 557 — 1,253 — — — — 1,810 FICO greater than 720 13,207 — 2,539 — — — — 15,746 Substandard non-accrual — — — — — — — — Other (1) 1,224 — — — — — — 1,224 1-4 family residential FICO less than 620 $ 1,109 $ 819 $ 3,674 $ 56 $ 883 $ 32,077 $ 318 $ 38,936 FICO between 620 and 720 17,269 18,461 9,545 8,714 8,171 41,625 1,289 105,074 FICO greater than 720 125,094 80,688 65,975 37,943 29,171 70,815 5,313 414,999 Substandard non-accrual — — — 96 714 20,567 — 21,377 Other (1) 27,407 10,085 5,998 1,899 920 2,529 714 49,552 Consumer FICO less than 620 $ 955 $ 1,235 $ 106 $ 128 $ 43 $ 22 $ 334 $ 2,823 FICO between 620 and 720 5,194 2,627 478 536 118 79 2,157 11,189 FICO greater than 720 6,849 1,674 2,952 292 60 34 3,054 14,915 Substandard non-accrual — — — 27 — 1 — 28 Other (1) 5,050 1,141 129 43 36 — 313 6,712 Total loans with credit quality measures $ 1,848,876 $ 1,062,690 $ 814,006 $ 483,170 $ 469,543 $ 521,082 $ 777,246 $ 5,976,613 Commercial and industrial (mortgage warehouse lending) $ 792,806 Commercial and industrial (Paycheck Protection Program loans) $ 486,715 Broker-Dealer (margin loans and correspondent receivables) $ 437,007 Total loans held for investment $ 7,693,141 (1) Loans classified in this category were assigned a FICO score based on various factors specific to the borrower for credit modeling purposes. |
Allowance for Credit Losses
Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2020 | |
Allowance for Credit Losses | |
Allowance for Credit Losses | 8. Allowance for Credit Losses Available for Sale Securities and Held to Maturity Securities The Company has evaluated available for sale debt securities that are in an unrealized loss position and has determined that any declines in value is unrelated to credit loss and related to changes in market interest rates since purchase. None of the available for sale debt securities held were past due at December 31, 2020. In addition, as of December 31, 2020, the Company had not made a decision to sell any of its debt securities held, nor did the Company consider it more likely than not that it would be required to sell such securities before recovery of their amortized cost basis. The Company does not expect to have credit losses associated with the debt securities and no allowance was recognized on the debt securities portfolio at transition. Loans Held for Investment The allowance for credit losses for loans held for investment represents management’s best estimate of all expected credit losses over the expected contractual life of our existing portfolio. Management revised its methodology for determining the allowance for credit losses upon the implementation of CECL. Management considers the level of allowance for credit losses to be a reasonable and supportable estimate of expected credit losses inherent within the loans held for investment portfolio as of December 31, 2020. While the Company believes it has an appropriate allowance for the existing loan portfolio at December 31, 2020, additional provision for losses on existing loans may be necessary in the future. Future changes in the allowance for credit losses are expected to be volatile given dependence upon, among other things, the portfolio composition and quality, as well as the impact of significant drivers, including prepayment assumptions and macroeconomic conditions and forecasts. In addition to the allowance for credit losses, the Company maintains a separate allowance for credit losses related to off-balance sheet credit exposures, including unfunded loan commitments, and this amount is included in other liabilities within the consolidated balance sheets. For further information on the policies that govern the estimation of the allowances for credit losses levels, see Note 1 to the consolidated financial statements. One of the most significant judgments involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the reasonable and supportable forecast period. To determine our best estimate of expected credit losses as of December 31, 2020, the Company utilized a single macroeconomic baseline scenario published by a third party in December 2020 that was updated to reflect the U.S. economic outlook due to COVID-19 conditions. This baseline scenario utilizes multiple economic variables in forecasting the economic outlook. Significant variables that impact the modeled losses across our loan portfolios are the U.S. Real Gross Domestic Product, or GDP, growth rates and unemployment rate assumptions. Changes in these assumptions and forecasts of economic conditions could significantly affect the estimate of expected credit losses at the balance sheet date or between reporting periods. The COVID-19 pandemic has resulted in a weak labor market and weak overall economic conditions that will affect borrowers across our lending portfolios and significant judgment is required to estimate the severity and duration of the current economic downturn, as well as its potential impact on borrower defaults and loss severity. In particular, macroeconomic conditions and forecasts regarding the duration and severity of the economic downturn are rapidly changing and remain highly uncertain as the resurgence of COVID-19 cases evolves nationally and in key geographies. It is difficult to predict exactly how borrower behavior will be impacted by these economic conditions as the effectiveness of government stimulus, customer relief and enhanced unemployment benefits should help mitigate in the short term, but the extent and duration of government stimulus as well as performance of recently implemented payment deferral programs remains uncertain. During the first quarter of 2020, the Company adopted the new CECL standard and recorded transition adjustment entries that resulted in an allowance for credit losses of $73.7 million as of January 1, 2020, an increase of $12.6 million. This increase included an increase in credit losses of $18.9 million from the expansion of the loss horizon to life of loan, partially offset by the elimination of the non-credit component within the historical allowance related to previously categorized PCI loans of $6.3 million. During 2020, the significant build in the allowance included provision for credit losses on individually evaluated loans of $20.2 million, while the provision for credit losses on expected losses of collectively evaluated loans accounted for $76.1 million of the total provision primarily due to the identified changes in the Bank’s loan portfolio composition and credit quality and the increase in the expected lifetime credit losses under CECL attributable to the deteriorating economic outlook associated with the impact of the market disruption caused by the COVID-19 pandemic. The change to the reserve due to the impact of COVID-19 reflects economic uncertainty which, along with the expectation of continued higher unemployment and lower GDP, has increased the probability of default and loss given default rates used in our estimate of the lifetime expected credit losses for our loan portfolio. The change in the allowance for credit losses during 2020 was primarily attributable to the Bank and also reflected other factors including, but not limited to, loan growth, loan mix, and changes in risk rating grades, macroeconomic factor assumptions and qualitative factors. The change in the allowance during 2020 was also impacted by net charge-offs of $21.1 million, primarily associated with loans specifically reserved for during the first quarter of 2020. Changes in the allowance for credit losses for loans held for investments, distributed by portfolio segment, are shown below (in thousands). Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2020 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 31,595 $ 8,073 $ 73,865 $ (4,517) $ 613 $ 109,629 Commercial and industrial 17,964 3,193 22,870 (18,158) 1,834 27,703 Construction and land development 4,878 577 1,222 (2) 2 6,677 1-4 family residential 6,386 (29) (1,717) (748) 54 3,946 Consumer 265 748 86 (615) 392 876 Broker-dealer 48 — 165 — — 213 Total $ 61,136 $ 12,562 $ 96,491 $ (24,040) $ 2,895 $ 149,044 Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2019 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 27,100 $ — $ 5,649 $ (1,160) $ 6 $ 31,595 Commercial and industrial 21,980 — (921) (5,924) 2,829 17,964 Construction and land development 6,061 — (1,183) — — 4,878 1-4 family residential 3,956 — 3,276 (907) 61 6,386 Consumer 267 — 459 (498) 37 265 Broker-dealer 122 — (74) — — 48 Total $ 59,486 $ — $ 7,206 $ (8,489) $ 2,933 $ 61,136 Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2018 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 27,232 $ — $ 668 $ (800) $ — $ 27,100 Commercial and industrial 23,698 — 6,750 (12,741) 4,273 21,980 Construction and land development 7,847 — (1,792) — 6 6,061 1-4 family residential 4,245 — (292) (143) 146 3,956 Consumer 311 — (15) (93) 64 267 Broker-dealer 353 — (231) — — 122 Total $ 63,686 $ — $ 5,088 $ (13,777) $ 4,489 $ 59,486 Unfunded Loan Commitments The Bank uses a process similar to that used in estimating the allowance for credit losses on the funded portion to estimate the allowance for credit loss on unfunded loan commitments. The allowance is based on the estimated exposure at default, multiplied by the lifetime PD grade and LGD grade for that particular loan segment. The Bank estimates expected losses by calculating a commitment usage factor based on industry usage factors. The commitment usage factor is applied over the relevant contractual period. Loss factors from the underlying loans to which commitments are related are applied to the results of the usage calculation to estimate any liability for credit losses related for each loan type. The expected losses on unfunded commitments align with statistically calculated parameters used to calculate the allowance for credit losses on the funded portion. There is no reserve calculated for letters of credit as they are issued primarily as credit enhancements and the likelihood of funding is low. Changes in the allowance for credit losses for loans with off-balance sheet credit exposures are shown below (in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 2,075 $ 2,366 $ 1,932 Transition adjustment CECL accounting standard 3,837 — — Other noninterest expense 2,476 (291) 434 Balance, end of year $ 8,388 $ 2,075 $ 2,366 As previously discussed, the Company adopted the new CECL standard and recorded a transition adjustment entry that resulted in an allowance for credit losses of $5.9 million as of January 1, 2020. During 2020, the increase in the reserve for unfunded commitments was primarily due to the macroeconomic uncertainties associated with the impact of the market disruption caused by COVID-19 conditions. |
Cash and Due from Banks
Cash and Due from Banks | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Due from Banks | |
Cash and Due from Banks | 9. Cash and Due from Banks Cash and due from banks consisted of the following (in thousands). December 31, 2020 2019 Cash on hand $ 45,207 $ 39,590 Clearings and collection items 82,396 129,055 Deposits at Federal Reserve Bank 874,998 232,019 Deposits at Federal Home Loan Bank 1,607 1,458 Deposits in FDIC-insured institutions 58,352 31,504 $ 1,062,560 $ 433,626 The amounts above include interest-bearing deposits of $878.0 million and $235.4 million at December 31, 2020 and 2019, respectively. Cash on hand and deposits at the Federal Reserve Bank satisfy regulatory reserve requirements at December 31, 2020 and December 31, 2019. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Premises and Equipment | |
Premises and Equipment | 10. Premises and Equipment The components of premises and equipment are summarized as follows (in thousands). December 31, 2020 2019 Land and premises $ 125,701 $ 130,312 Furniture and equipment 257,810 265,602 383,511 395,914 Less accumulated depreciation and amortization (171,916) (185,539) $ 211,595 $ 210,375 The amounts shown above include gross assets recorded under finance leases of $7.8 million, with accumulated amortization of $4.8 million and $4.2 million at December 31, 2020 and 2019, respectively. Occupancy expense was reduced by rental income of $1.7 million, $2.7 million and $1.4 million during 2020, 2019 and 2018, respectively. Depreciation and amortization expense on premises and equipment, which includes amortization of finance leases, amounted to $27.9 million, $27.3 million and $30.8 million during 2020, 2019 and 2018, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 11. Goodwill and Other Intangible Assets At December 31, 2020, the carrying amount of goodwill of $267.4 million was comprised of $39.6 million recorded in connection with the BORO Acquisition and $227.8 million recorded in connection with the completion of the merger with PCC (the “PlainsCapital Merger”). Other intangible assets were $20.4 million and $26.7 million at December 31, 2020 and 2019, respectively. The Company performed required annual impairment tests of its goodwill and other intangible assets having an indefinite useful life as of October 1 st for each of its reporting units. At October 1, 2020, the Company determined that the estimated fair value of each of its reporting units exceeded its carrying value. The Company estimated the fair values of its reporting units based on both a market and income approach using historical, normalized actual and forecasted results. Based on this evaluation, at December 31, 2020, the Company concluded that the goodwill and other identifiable intangible assets were fully realizable. The Company’s evaluation includes multiple assumptions, including estimated discounted cash flows and other estimates that may change over time. If future discounted cash flows become less than those projected by the Company, future impairment charges may become necessary that could have a materially adverse impact on the Company’s results of operations and financial condition. As quoted market prices in active stock markets are relevant evidence of fair value, a significant decline in the Company’s common stock trading price may indicate an impairment of goodwill. Additionally, given the potential impacts as a result of COVID-19, actual results may differ materially from the Company’s current estimates as the scope of COVID-19 evolves or if the duration of business disruptions is longer than currently anticipated. While certain valuation assumptions and judgments may change to account for pandemic-related circumstances, the Company does not anticipate significant changes in methodology used to determine the fair value of its goodwill, intangible assets and other long-lived assets. The Company will continue to monitor developments regarding the COVID-19 pandemic and measures implemented in response to the pandemic, market capitalization, overall economic conditions and any other triggering events or circumstances that may indicate an impairment in the future. The carrying value of intangible assets subject to amortization was as follows (in thousands). Estimated Gross Net Useful Life Intangible Accumulated Intangible December 31, 2020 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (40,997) $ 7,933 Trademarks and trade names 20 16,500 (7,563) 8,937 Noncompete agreements 4 4,310 (4,310) — Customer contracts and relationships 12 - 14 15,300 (11,806) 3,494 $ 85,040 $ (64,676) $ 20,364 Estimated Gross Net Useful Life Intangible Accumulated Intangible December 31, 2019 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (36,576) $ 12,354 Trademarks and trade names 20 16,500 (6,812) 9,688 Noncompete agreements 4 4,310 (4,310) — Customer contracts and relationships 12 - 14 15,300 (10,676) 4,624 $ 85,040 $ (58,374) $ 26,666 Amortization expense related to intangible assets during 2020, 2019 and 2018 was $6.3 million, $7.5 million and $8.0 million, respectively. The estimated aggregate future amortization expense for intangible assets at December 31, 2020 is as follows (in thousands). 2021 $ 5,080 2022 3,967 2023 2,860 2024 1,826 2025 1,028 Thereafter 5,603 $ 20,364 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | 12. Mortgage Servicing Rights The following tables present the changes in fair value of the Company’s MSR asset, and other information related to the serviced portfolio (dollars in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 55,504 $ 66,102 $ 54,714 Additions 162,914 13,755 25,028 Sales (36,750) — (9,303) Changes in fair value: Due to changes in model inputs or assumptions (1) (27,261) (16,054) 159 Due to customer payoffs (10,665) (8,299) (4,496) Balance, end of year $ 143,742 $ 55,504 $ 66,102 December 31, 2020 2019 Mortgage loans serviced for others (2) $ 14,643,623 $ 4,948,441 MSR asset as a percentage of serviced mortgage loans 0.98 % 1.12 % (1) Primarily represents normal customer payments, changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates and the refinement of other MSR model assumptions. (2) Represents unpaid principal balance of mortgage loans serviced for others. The key assumptions used in measuring the fair value of the Company’s MSR asset were as follows. December 31, 2020 2019 Weighted average constant prepayment rate 12.15 % 13.16 % Weighted average discount rate 14.60 % 11.14 % Weighted average life (in years) 6.3 6.0 A sensitivity analysis of the fair value of the Company’s MSR asset to certain key assumptions is presented in the following table (in thousands). December 31, 2020 2019 Constant prepayment rate: Impact of 10% adverse change $ (5,639) $ (3,072) Impact of 20% adverse change (11,164) (5,943) Discount rate: Impact of 10% adverse change (6,435) (2,094) Impact of 20% adverse change (12,287) (4,028) This sensitivity analysis presents the effect of hypothetical changes in key assumptions on the fair value of the MSR asset. The effect of such hypothetical changes in assumptions generally cannot be extrapolated because the relationship of the change in one key assumption to the change in the fair value of the MSR asset is not linear. In addition, in the analysis, the impact of an adverse change in one key assumption is calculated independent of any impact on other assumptions. In reality, changes in one assumption may change another assumption. Contractually specified servicing fees, late fees and ancillary fees earned of $35.4 million, $25.3 million and $23.3 million during 2020, 2019 and 2018, respectively, were included in other noninterest income within the consolidated statements of operations. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Deposits | 13. Deposits Deposits are summarized as follows (in thousands). December 31, 2020 2019 Noninterest-bearing demand $ 3,612,384 $ 2,769,556 Interest-bearing: Demand accounts 2,399,341 1,881,614 Brokered - demand 282,426 — Money market 2,716,878 2,641,116 Brokered - money market 124,243 5,000 Savings 276,327 199,076 Time 1,506,435 1,505,375 Brokered - time 324,285 30,477 $ 11,242,319 $ 9,032,214 At December 31, 2020, deposits include $1.1 billion of time deposit accounts that meet or exceed the FDIC insurance limit of $250,000. Scheduled maturities of interest-bearing time deposits at December 31, 2020 are as follows (in thousands). 2021 $ 1,600,039 2022 148,404 2023 49,026 2024 22,091 2025 and thereafter 11,160 $ 1,830,720 |
Short-term Borrowings
Short-term Borrowings | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Borrowings | |
Short-term Borrowings | 14. Short-term Borrowings Short-term borrowings are summarized as follows (in thousands). December 31, 2020 2019 Federal funds purchased $ 180,325 $ 81,625 Securities sold under agreements to repurchase 237,856 612,125 Federal Home Loan Bank — 600,000 Short-term bank loans — 111,000 Commercial paper 277,617 19,260 $ 695,798 $ 1,424,010 Federal funds purchased and securities sold under agreements to repurchase generally mature daily, on demand, or on some other short-term basis. The Bank and the Hilltop Broker-Dealers execute transactions to sell securities under agreements to repurchase with both customers and other broker-dealers. Securities involved in these transactions are held by the Bank, the Hilltop Broker-Dealers or a third-party dealer. Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). Year Ended December 31, 2020 2019 2018 Average balance during the year $ 509,577 $ 605,858 $ 701,622 Average interest rate during the year 0.89 % 2.48 % 1.96 % Maximum month-end balance during the year $ 714,507 $ 693,750 $ 849,568 December 31, 2020 2019 Average interest rate at end of year 0.25 % 1.97 % Securities underlying the agreements at end of year: Carrying value $ 237,913 $ 612,515 Estimated fair value $ 262,554 $ 661,023 FHLB short-term borrowings mature over terms not exceeding 365 days and are collateralized by FHLB Dallas stock, nonspecified real estate loans and certain specific commercial real estate loans. At December 31, 2020, the Bank had available collateral of $4.4 billion, substantially all of which was blanket collateral. Other information regarding FHLB short-term borrowings is shown in the following tables (dollars in thousands). Year Ended December 31, 2020 2019 2018 Average balance during the year $ 38,634 $ 329,356 $ 214,110 Average interest rate during the year 1.63 % 2.16 % 2.09 % Maximum month-end balance during the year $ 150,000 $ 700,000 $ 675,000 December 31, 2020 2019 Average interest rate at end of year — % 1.56 % The Hilltop Broker-Dealers use short-term bank loans periodically to finance securities owned, margin loans to customers and correspondents, and underwriting activities. Interest on the borrowings varies with the federal funds rate. The weighted average interest rate on the short-term bank loan borrowings at December 31, 2020 and 2019 was 0.00% and 2.52%, respectively. During 2019, Hilltop Securities initiated two commercial paper programs in the ordinary course of its business of which the net proceeds (after deducting related issuance expenses) from the sale will be used for general corporate purposes, including working capital and the funding of a portion of its securities inventories. The commercial paper notes (“CP Notes”) may be issued with maturities of 14 days to 270 days from the date of issuance. The CP Notes are issued under two separate programs, Series 2019-1 CP Notes and Series 2019-2 CP Notes, in maximum aggregate amounts of $300 million and $200 million, respectively. The CP Notes are not redeemable prior to maturity or subject to voluntary prepayment and do not bear interest, but are sold at a discount to par. The CP Notes are secured by a pledge of collateral owned by Hilltop Securities. As of December 31, 2020, the weighted average maturity of the CP Notes was 146 days at a rate of 1.23%, with a weighted average remaining life of 70 days. At December 31, 2020, the amount outstanding under these secured arrangements was $277.6 million, which was collateralized by securities held for firm accounts valued at $296.3 million. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Notes Payable | |
Notes Payable | 15. Notes Payable Notes payable consisted of the following (in thousands). December 31, 2020 2019 Senior Notes due April 2025, net of discount of $1,063 and $1,232, respectively $ 148,937 $ 148,768 Subordinated Notes due May 2030, net of discount of $793 49,207 — Subordinated Notes due May 2035, net of discount of $2,392 147,608 — FHLB notes, including premium of $0 and $146 , respectively — 28,848 Ventures Management lines of credit 36,235 78,653 $ 381,987 $ 256,269 Senior Notes On April 9, 2015, Hilltop completed an offering of $150.0 million aggregate principal amount of its 5% senior notes due 2025 (“Senior Unregistered Notes”) in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Senior Unregistered Notes were offered within the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to persons outside of the United States under Regulation S under the Securities Act. The Senior Unregistered Notes were issued pursuant to an indenture, dated as of April 9, 2015, by and between Hilltop and U.S. Bank National Association, as trustee. The net proceeds from the offering, after deducting estimated fees and expenses and the initial purchasers’ discounts, were approximately $148 million. Hilltop used the net proceeds of the offering to redeem all of Hilltop’s outstanding Non-Cumulative Perpetual Preferred Stock, Series B at an aggregate liquidation value of $114.1 million, plus accrued but unpaid dividends of $0.4 million, and Hilltop utilized the remainder for general corporate purposes. Unamortized debt issuance costs presented as a reduction from the Senior Notes are discussed further in Note 1 to the consolidated financial statements. In connection with the issuance of the Senior Unregistered Notes, on April 9, 2015, the Company entered into a registration rights agreement with the initial purchasers of the Senior Unregistered Notes. Under the terms of the registration rights agreement, the Company agreed to offer to exchange the Senior Unregistered Notes for notes registered under the Securities Act (the “Senior Registered Notes”). The terms of the Senior Registered Notes are substantially identical to the Senior Unregistered Notes for which they were exchanged (including principal amount, interest rate, maturity and redemption rights), except that the Senior Registered Notes generally are not subject to transfer restrictions. On May 22, 2015 and subject to the terms and conditions set forth in the Senior Registered Notes prospectus, the Company commenced an offer to exchange the Senior Unregistered Notes for Senior Registered Notes. Substantially all of the Senior Unregistered Notes were tendered in the exchange offer, and on June 22, 2015, the Company fulfilled its requirements under the registration rights agreement for the Senior Unregistered Notes by issuing Senior Registered Notes in exchange for the tendered Senior Unregistered Notes. The Senior Registered Notes and the Senior Unregistered Notes that remain outstanding are collectively referred to as the “Senior Notes.” The Senior Notes bear interest at a rate of 5% per year, payable semi-annually in arrears in cash on April 15 and October 15 of each year. The Senior Notes will mature on April 15, 2025, unless Hilltop redeems the Senior Notes, in whole at any time or in part from time to time, on or after January 15, 2025 (three months prior to the maturity date of the Senior Notes) at its election at a redemption price equal to 100% of the principal amount of the Senior Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. The indenture contains covenants that limit the Company’s ability to, among other things and subject to certain significant exceptions: (i) dispose of or issue voting stock of certain of the Company’s bank subsidiaries or subsidiaries that own voting stock of the Company’s bank subsidiaries, (ii) incur or permit to exist any mortgage, pledge, encumbrance or lien or charge on the capital stock of certain of the Company’s bank subsidiaries or subsidiaries that own capital stock of the Company’s bank subsidiaries and (iii) sell all or substantially all of the Company’s assets or merge or consolidate with or into other companies. The indenture also provides for certain events of default, which, if any of them occurs, would permit or require the principal amount, premium, if any, and accrued and unpaid interest on the then outstanding Senior Notes to be declared immediately due and payable. Subordinated Notes On May 7, 2020, Hilltop completed a public offering of $50 million aggregate principal amount of 5.75% fixed-to-floating rate subordinated notes due May 15, 2030 (the “2030 Subordinated Notes”) and $150 million aggregate principal amount of 6.125% fixed-to-floating rate subordinated notes due May 15, 2035 (the “2035 Subordinated Notes”) (collectively, the “Subordinated Notes”). The price for the Subordinated Notes was 100% of the principal amount of the Subordinated Notes. The net proceeds from the offering, after deducting underwriting discounts and fees and expenses of $3.4 million, were $196.6 million. The 2030 Subordinated Notes and the 2035 Subordinated Notes will mature on May 15, 2030 and May 15, 2035, respectively. Hilltop may redeem the Subordinated Notes, in whole or in part, from time to time, subject to obtaining regulatory approval, beginning with the interest payment date of May 15, 2025 for the 2030 Subordinated Notes and beginning with the interest payment date of May 15, 2030 for the 2035 Subordinated Notes, in each case at a redemption price equal to 100% of the principal amount of the Subordinated Notes being redeemed plus accrued and unpaid interest to but excluding the date of redemption. The 2030 Subordinated Notes bear interest at the rate of 5.75% per year, payable semi-annually in arrears commencing on November 15, 2020. The interest rate for the 2030 Subordinated Notes will reset quarterly beginning May 15, 2025 to an interest rate, per year, equal to the then-current benchmark rate, which is expected to be three-month term Secured Overnight Financing Rate Federal Home Loan Bank notes The FHLB notes, as well as other borrowings from the FHLB, are collateralized by FHLB stock, a blanket lien on commercial and real estate loans, as well as by the amount of securities that are in safekeeping at the FHLB. Ventures Management Lines of Credit At December 31, 2020, Ventures Management’s ABAs had combined available lines of credit totaling $170.0 million, $80.0 million of which was with a single unaffiliated bank and $90.0 million of which was with the Bank. At December 31, 2020, Ventures Management had outstanding borrowings of $47.5 million, $11.3 million of which was with the Bank with stated interest rates of the greater of a calculated index rate on mortgage notes or 3.13% to 3.75%. The weighted average interest rate of these lines of credit at December 31, 2020 was 3.27%. The Ventures Management lines of credit are collateralized by mortgage notes, and the loan agreements relating to the lines of credit contain various financial and other covenants which must be maintained until all indebtedness to the financial institution is repaid. Scheduled Maturities Scheduled maturities for notes payable outstanding at December 31, 2020 are as follows (in thousands). 2021 $ 36,235 2022 — 2023 — 2024 — 2025 150,000 Thereafter 200,000 $ 386,235 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 16 . Leases Hilltop and its subsidiaries lease space, primarily for corporate offices, branch facilities and automated teller machines, under both operating and finance leases. Certain of the Company’s leases have options to extend, with the longest extension option being options Supplemental balance sheet information related to finance leases is as follows (in thousands). Year Ended December 31, 2020 2019 Finance leases: Premises and equipment $ 7,780 $ 7,780 Accumulated depreciation (4,768) (4,178) Premises and equipment, net $ 3,012 $ 3,602 Operating lease rental cost and finance lease amortization of ROU assets is included within occupancy and equipment, net in the consolidated statements of operations. Finance lease interest expense is included within other interest expense in the consolidated statements of operations. The Company does not generally enter into leases which contain variable payments, other than due to the passage of time. The components of lease costs, including short-term lease costs, are as follows (in thousands). Year Ended December 31, 2020 2019 Operating lease cost $ 41,903 $ 44,331 Less operating lease and sublease income (1,676) (2,657) Net operating lease cost $ 40,227 $ 41,674 Finance lease cost: Amortization of ROU assets $ 590 $ 590 Interest on lease liabilities 561 596 Total finance lease cost $ 1,151 $ 1,186 Supplemental cash flow information related to leases is as follows (in thousands): Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 31,850 $ 37,527 Operating cash flows from finance leases 561 587 Financing cash flows from finance leases 636 603 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 11,723 $ 27,055 Finance leases — — Information regarding the lease terms and discount rates of the Company’s leases is as follows. December 31, 2020 December 31, 2019 Weighted Average Weighted Average Remaining Lease Weighted Average Remaining Lease Weighted Average Lease Classification Term (Years) Discount Rate Term (Years) Discount Rate Operating 5.5 4.67 % 5.9 5.29 % Finance 5.6 4.81 % 6.5 4.79 % Maturities of lease liabilities at December 31, 2020, under lease agreements that had commenced as of or subsequent to January 1, 2019, are presented below (in thousands). Operating Leases Finance Leases 2021 $ 36,132 $ 1,212 2022 28,189 1,241 2023 22,645 1,280 2024 15,395 1,163 2025 11,177 886 Thereafter 29,636 1,411 Total minimum lease payments 143,174 7,193 Less amount representing interest (17,724) (2,334) Lease liabilities $ 125,450 $ 4,859 As of December 31, 2020, the Company had additional operating leases that have not yet commenced with aggregate future minimum lease payments of approximately $22.9 million. These leases are expected to commence between January 2021 and October 2021 with lease terms ranging from two |
Junior Subordinated Debentures
Junior Subordinated Debentures and Trust Preferred Securities | 12 Months Ended |
Dec. 31, 2020 | |
Junior Subordinated Debentures and Trust Preferred Securities | |
Junior Subordinated Debentures and Trust Preferred Securities | 17. Junior Subordinated Debentures and Trust Preferred Securities PCC has four statutory Trusts, three of which were formed under the laws of the state of Connecticut and one of which, PCC Statutory Trust IV, was formed under the laws of the state of Delaware. The Trusts were created for the sole purpose of issuing and selling preferred securities and common securities, using the resulting proceeds to acquire junior subordinated debentures issued by PCC (the “Debentures”). Accordingly, the Debentures are the sole assets of the Trusts, and payments under the Debentures are the sole revenue of the Trusts. All of the common securities are owned by PCC; however, PCC is not the primary beneficiary of the Trusts. Accordingly, the Trusts are not included in the Company’s consolidated financial statements. The Trusts have issued $65,000,000 of floating rate preferred securities and $2,012,000 of common securities and have invested the proceeds from the securities in floating rate Debentures of PCC. Information regarding the PCC Debentures is shown in the following table (in thousands). Investor Issue Date Amount PCC Statutory Trust I July 31, 2001 $ 18,042 PCC Statutory Trust II March 26, 2003 $ 18,042 PCC Statutory Trust III September 17, 2003 $ 15,464 PCC Statutory Trust IV February 22, 2008 $ 15,464 The stated term of the Debentures is 30 years with interest payable quarterly. The rate on the Debentures, which resets quarterly, is 3-month LIBOR plus an average spread of 3.22%. The total average interest rate at December 31, 2020 was 3.45%. The term, rate and other features of the preferred securities are the same as the Debentures. PCC’s obligations under the Debentures and related documents, taken together, constitute a full and unconditional guarantee of the Trust’s obligations under the preferred securities. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 18. Income Taxes The significant components of the income tax provision are as follows (in thousands). Year Ended December 31, 2020 2019 2018 Current: Federal $ 97,338 $ 58,562 $ 18,977 State 19,150 9,215 2,241 116,488 67,777 21,218 Deferred: Federal $ 13,325 $ (2,690) $ 11,153 State 3,258 (1,373) 1,856 16,583 (4,063) 13,009 $ 133,071 $ 63,714 $ 34,227 The income tax provision differs from the amount that would be computed by applying the statutory Federal income tax rate to income before income taxes as a result of the following (in thousands). The applicable corporate federal income tax rates were 21% for all periods presented. Year Ended December 31, 2020 2019 2018 Computed tax at federal statutory rate $ 118,629 $ 59,392 $ 32,572 Tax effect of: Nondeductible expenses 2,304 2,681 1,373 State income taxes 17,702 6,195 3,236 Tax-exempt income, net (1,706) (1,727) (1,432) Minority interest (4,587) (1,614) (900) Other 729 (1,213) (622) $ 133,071 $ 63,714 $ 34,227 The components of the tax effects of temporary differences that give rise to the net deferred tax asset included in other assets within the consolidated balance sheets are as follows (in thousands). December 31, 2020 2019 Deferred tax assets: Net operating and built-in loss carryforward $ 5,736 $ 7,823 Purchase accounting adjustment - loans 11,814 15,850 Allowance for credit losses 35,542 14,796 Compensation and benefits 22,513 17,723 Legal and other reserves 7,097 1,272 Foreclosed property 1,913 5,456 Operating lease liabilities 29,348 29,125 Other 9,717 6,475 123,680 98,520 Deferred tax liabilities: Premises and equipment 20,076 10,079 Intangible assets 4,518 6,098 Derivatives 17,688 4,342 Loan servicing 34,868 13,278 Operating lease ROU assets 24,755 26,498 Other 8,015 5,251 109,920 65,546 Net deferred tax asset $ 13,760 $ 32,974 The Company’s effective tax rate was 23.6%, 22.5% and 22.1% during 2020, 2019 and 2018, respectively. The increase in the effective tax rate during 2020 was primarily attributable to the percentage of income at subsidiaries with higher state effective tax rates, while the effective tax rates for 2019 and 2018 approximated statutory rates and included the effect of investments in tax-exempt instruments, offset by nondeductible expenses. At December 31, 2020 and 2019, the Company had net operating loss carryforwards for Federal income tax purposes of $2.7 million and $12.2 million, respectively (or $0.6 million and $2.4 million, respectively, on a tax effected basis at applicable rates for respective tax years). The net operating loss carryforwards are subject to an annual Section 382 limitation on their usage. These net operating loss carryforwards expire starting in 2034. The Company expects to realize its current deferred tax asset for these net operating loss carryforwards through the implementation of certain tax planning strategies, core earnings, and reversal of timing differences. At December 31, 2020, the Company also had a recognized built-in loss (“RBIL”) carryover of $20.5 million from the ownership change resulting from the SWS Merger. These RBILs that were recognized during a five year recognition period before January 1, 2020 are subject to the annual Section 382 limitation rules similar to the Company’s net operating loss carryforwards. The RBILs are expected to be fully realized prior to any expiration. Based on the Company’s evaluation of its deferred tax assets, management determined that no valuation allowance against its gross deferred tax assets was necessary at December 31, 2020 or 2019. GAAP requires the measurement of uncertain tax positions. Uncertain tax positions are the difference between a tax position taken, or expected to be taken, in a tax return and the benefit recognized for accounting purposes. At December 31, 2020 and 2019, the total amount of gross unrecognized tax benefits was $3.8 million and $2.8 million, respectively, of which $3.0 million and $2.1 million, respectively, if recognized, would favorably impact the Company’s effective tax rate. The aggregate changes in gross unrecognized tax benefits, which excludes interest and penalties, are as follows (in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 2,808 $ 3,056 $ 1,574 Increases related to tax positions taken during a prior year 327 317 770 Decreases related to tax positions taken during a prior year — (423) — Increases related to tax positions taken during the current year 1,017 288 712 Decreases related to expiration of the statute of limitations (374) (430) — Balance, end of year $ 3,778 $ 2,808 $ 3,056 Specific positions that may be resolved include issues involving apportionment and tax credits. At December 31, 2020, the unrecognized tax benefit is a component of taxes receivable, which is included in other assets within the consolidated balance sheet. The Company files income tax returns in U.S. federal and numerous state jurisdictions. The Company is subject to tax examinations in numerous jurisdictions in the United States until the applicable statute of limitations expires. The Company is no longer subject to U.S. federal tax examinations for tax years prior to 2017. The Company is open for various state tax examinations for tax years 2016 and later. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefits | |
Employee Benefits | 19. Employee Benefits Hilltop and its subsidiaries have benefit plans that provide for elective deferrals by employees under Section 401(k) of the Internal Revenue Code. Employee contributions are determined by the level of employee participation and related salary levels per Internal Revenue Service regulations. Hilltop and its subsidiaries match a portion of employee contributions based on the amount of eligible employees’ contributions and salaries. The amount charged to operating expense for these matching contributions totaled $17.7 million, $15.5 million and $14.8 million during 2020, 2019 and 2018, respectively. In July 2020, pursuant to stockholders’ approval, the Company adopted the Hilltop Holdings Inc. Employee Stock Purchase Plan (the “ESPP”) to provide a means for eligible employees of the Company to purchase shares of Hilltop common stock at a discounted price by accumulating funds, normally through payroll deductions and is intended to qualify under Section 423 of the Internal Revenue Code. Participating employees may purchase shares of common stock at 90% of the fair market value on the last day of each quarterly offering period. The initial offering period commenced on January 1, 2021. Effective upon the completion of the PlainsCapital Merger, the Company recorded a liability associated with separate retention agreements originally entered into between Hilltop and two executive officers. At December 31, 2020 and 2019, the recorded liability, including interest, was $2.6 million and related to a single executive officer. The Bank purchased $15.0 million of flexible premium universal life insurance in 2001 to help finance the annual expense incurred in providing various employee benefits. At December 31, 2020 and 2019, the carrying value of the policies included in other assets was $26.8 million and $26.2 million, respectively. During each of 2020, 2019 and 2018, the Bank recorded income of $0.5 million, $1.0 million and $0.6 million, respectively, related to the policies that was reported in other noninterest income within the consolidated statement of operations. Deferred Compensation Plan As a result of the SWS Merger, the Company assumed a deferred compensation plan (the “SWS Plan”) that allows former SWS eligible officers and employees to defer a portion of their bonus compensation and commissions. The SWS Plan matched 15% of the deferrals made by participants up to a predetermined limit through matching contributions that vest ratably over four years. Pursuant to the terms of the SWS Plan, the trustee periodically purchased the former SWS common stock in the open market. As a result of the SWS Merger, the former SWS common shares were converted into Hilltop common stock based on the terms of the merger agreement. No further contributions can be made to this plan. The assets of the SWS Plan are held in a rabbi trust and primarily include investments in company-owned life insurance (“COLI”) and Hilltop common stock. These assets are consolidated with those of the Company. Investments in COLI are carried at the cash surrender value of the insurance policies and recorded in other assets within the consolidated balance sheet at December 31, 2020 and 2019, respectively. Investments in Hilltop common stock, which are carried at cost, and the corresponding liability related to the deferred compensation plan are presented as components of stockholders’ equity as employee stock trust and deferred compensation employee stock trust, net, respectively, at December 31, 2020 and 2019, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | 20. Related Party Transactions Jeremy B. Ford, a director and the President and Chief Executive Officer of Hilltop, is the beneficiary of a trust that owns a 49% limited partnership interest in Diamond A Financial, L.P., which owned 18.9% of the outstanding Hilltop common stock at December 31, 2020. Jeremy B. Ford is the son of Gerald J. Ford. Corey G. Prestidge, Hilltop’s General Counsel and Secretary, is the son-in-law of Gerald J. Ford. Accordingly, Messrs. Jeremy Ford and Corey Prestidge are brothers-in-law. In the ordinary course of business, the Bank has granted loans to certain directors, executive officers and their affiliates (collectively referred to as related parties) totaling $0.6 million and $5 thousand at December 31, 2020 and 2019, respectively. These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other unaffiliated persons and do not involve more than normal risk of collectability. For such loans during 2020, principal additions and payments were $0.6 million and $2 thousand, respectively. At December 31, 2020 and 2019, the Bank held deposits of related parties of $154.1 million and $141.2 million, respectively. A related party is the lessor in an operating lease with Hilltop. Hilltop’s minimum payment under the lease is $0.5 million annually through 2028, for an aggregate remaining obligation of $4.2 million at December 31, 2020. The Bank purchased loans from a company for which a related party served as a director, president and chief executive officer. At December 31, 2020 and 2019, the outstanding balance of the purchased loans was $0.5 million and $0.7 million, respectively. The loans were purchased with recourse in the ordinary course of business and the related party had no direct financial interest in the transaction. Hilltop Plaza Investment On July 31, 2018, Hillcrest Land LLC purchased approximately 1.7 acres of land in the City of University Park, Texas for $38.5 million. Hillcrest Land LLC is owned equally between Hilltop Investments I, LLC, a wholly owned entity of Hilltop, and Diamond Ground, LLC, an affiliate of Mr. Gerald J. Ford. Each of Hilltop Investments I, LLC and Diamond Ground , LLC contributed $19.3 million to Hillcrest Land LLC to complete the purchase. As the voting rights of Hillcrest Land LLC are shared equally between the Company and Diamond Ground, LLC, there is no primary beneficiary, and Diamond Ground, LLC’s interest in Hillcrest Land LLC has been reflected as a noncontrolling interest in the Company’s consolidated financial statements. Therefore, the Company has consolidated Hillcrest Land LLC under the VIE model according to the “most-closely associated” test. The purchased land is included within premises and equipment, net in the consolidated balance sheets. Any income (loss) associated with Hillcrest Land LLC is included within other noninterest income in the consolidated statements of operations. Trusts for which Jeremy Ford and the wife of Corey Prestidge are a beneficiary own 10.2% and 10.1%, respectively, of Diamond Ground, LLC. In connection with the purchase of the land, Hillcrest Land LLC entered into a 99-year ground lease of the land with three tenants-in-common: SPC Park Plaza Partners LLC (“Park Plaza LLC”), an unaffiliated entity which received an undivided 50% leasehold interest; HTH Project LLC, a wholly owned subsidiary of Hilltop, which received an undivided 25% leasehold interest; and Diamond Hillcrest, LLC (“Diamond Hillcrest”), an entity owned by Mr. Gerald J. Ford, which received an undivided 25% leasehold interest (collectively, the “Co-Owners”). The ground lease is triple net. The base rent from the Co-Owners under the ground lease commences 18 months after the ground lease was signed at $1.8 million per year and increases 1.0 % per year each January 1 thereafter. The ground lease was classified as an operating lease under ASC 840, and the accounting commencement date was determined to be July 31, 2018, the date the land was available to the Co-Owners. Concurrent with the ground lease, the Co-Owners entered into an agreement to purchase the improvements of a mixed-use project containing a six-story building (“Hilltop Plaza”). HTH Project LLC and Diamond Diamond Hilltop and the Bank entered into leases for a significant portion of the total rentable corporate office space in Hilltop Plaza which serves as the headquarters for both companies. Affiliates of Mr. Gerald J. Ford also entered into leases for office space in the building. The two separate 129 -month office and retail leases of Hilltop and the Bank, respectively, have combined total base rent of approximately $35 million with the first nine months of rent abated. The accounting commencement date of both leases was determined to be June 20, 2019, the date the building was delivered in order for tenant improvement work to commence. The combined operating lease liability, net of lease incentives, recognized during the second quarter of 2019 as a result of the commencement of these leases was $18.9 million. During 2018, the office and retail leases were considered under the build-to-suit provisions of ASC 840, and the Company was determined to be the accounting owner of the project as its affiliate, HTH Project LLC, has an equity investment in the project. As such, the assets of Hilltop Plaza were recognized during the construction period through December 31, 2018, as costs were incurred to construct the asset, with a corresponding liability representing the costs paid for by the lessor (the Co-Owners). At December 31, 2018, the $27.8 million of costs incurred to date were included within premises and equipment and other liabilities, respectively, in the consolidated balance sheets. The Company reassessed its accounting ownership of the Hilltop Plaza assets under construction as of January 1, 2019, under the build-to-suit provisions of the newly adopted ASC 842, Leases All intercompany transactions associated with the Hilltop Plaza investment and the related transactions discussed above are eliminated in consolidation. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 21. Commitments and Contingencies During 2020, the Bank acted as agent on behalf of certain correspondent banks in the purchase and sale of federal funds that aggregated to $2.5 million and zero at December 31, 2020 and 2019, respectively. Legal Matters The Company is subject to loss contingencies related to litigation, claims, investigations and legal and administrative cases and proceedings arising in the ordinary course of business. The Company evaluates these contingencies based on information currently available, including advice of counsel. The Company establishes accruals for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. Any accruals are periodically reviewed and may be adjusted as circumstances change. A portion of the Company’s exposure with respect to loss contingencies may be offset by applicable insurance coverage. In determining the amounts of any accruals or estimates of possible loss contingencies, the Company does not take into account the availability of insurance coverage. When it is practicable, the Company estimates loss contingencies for possible litigation and claims, whether or not there is an accrued probable loss. When the Company is able to estimate such probable losses, and when it estimates that it is reasonably possible it could incur losses in excess of amounts accrued, the Company is required to make a disclosure of the aggregate estimation. As available information changes, however, the matters for which the Company is able to estimate, as well as the estimates themselves, will be adjusted accordingly. Assessments of litigation and claims exposures are difficult due to many factors that involve inherent unpredictability. Those factors include the following: the varying stages of the proceedings, particularly in the early stages; unspecified, unsupported, or uncertain damages; damages other than compensatory, such as punitive damages; a matter presenting meaningful legal uncertainties, including novel issues of law; multiple defendants and jurisdictions; whether discovery has begun or is complete; whether meaningful settlement discussions have commenced; and whether the claim involves a class action and if so, how the class is defined. As a result of some of these factors, the Company may be unable to estimate reasonably possible losses with respect to some or all of the pending and threatened litigation and claims asserted against the Company. The Company is involved in information-gathering requests and investigations (both formal and informal), as well as reviews, examinations and proceedings (collectively, “Inquiries”) by various governmental regulatory agencies, law enforcement authorities and self-regulatory bodies regarding certain of its businesses, business practices and policies, as well as the conduct of persons with whom it does business. Additional Inquiries will arise from time to time. In connection with those Inquiries, the Company receives document requests, subpoenas and other requests for information. The Inquiries could develop into administrative, civil or criminal proceedings or enforcement actions that could result in consequences that have a material effect on the Company's consolidated financial position, results of operations or cash flows as a whole. Such consequences could include adverse judgments, findings, settlements, penalties, fines, orders, injunctions, restitution, or alterations in the Company’s business practices, and could result in additional expenses and collateral costs, including reputational damage. While the final outcome of litigation and claims exposures or of any Inquiries is inherently unpredictable, management is currently of the opinion that the outcome of pending and threatened litigation and Inquiries will not, except related to specific matters disclosed above, have a material effect on the Company’s business, consolidated financial position, results of operations or cash flows as a whole. However, in the event of unexpected future developments, it is reasonably possible that an adverse outcome in any matter, including the matters discussed above, could be material to the Company’s business, consolidated financial position, results of operations or cash flows for any particular reporting period of occurrence. Indemnification Liability Reserve The mortgage origination segment may be responsible to agencies, investors, or other parties for errors or omissions relating to its representations and warranties that each loan sold meets certain requirements, including representations as to underwriting standards and the validity of certain borrower representations in connection with the loan. If determined to be at fault, the mortgage origination segment either repurchases the affected loan from or indemnifies the claimant against loss. The mortgage origination segment has established an indemnification liability reserve for such probable losses. Generally, the mortgage origination segment first becomes aware that an agency, investor, or other party believes a loss has been incurred on a sold loan when it receives a written request from the claimant to repurchase the loan or reimburse the claimant’s losses. Upon completing its review of the claimant’s request, the mortgage origination segment establishes a specific claims reserve for the loan if it concludes its obligation to the claimant is both probable and reasonably estimable. An additional reserve has been established for probable agency, investor or other party losses that may have been incurred, but not yet reported to the mortgage origination segment based upon a reasonable estimate of such losses. Factors considered in the calculation of this reserve include, but are not limited to, the total volume of loans sold exclusive of specific claimant requests, actual claim settlements and the severity of estimated losses resulting from future claims, and the mortgage origination segment’s history of successfully curing defects identified in claim requests. In addition, the mortgage origination segment has considered that GNMA, FNMA and FHLMC have imposed certain restrictions on loans the agencies will accept under a forbearance agreement resulting from the COVID-19 pandemic, which could increase the magnitude of indemnification losses on these loans. While the mortgage origination segment’s sales contracts typically include borrower early payment default repurchase provisions, these provisions have not been a primary driver of claims to date, and therefore, are not a primary factor considered in the calculation of this reserve. At December 31, 2020 and 2019, the mortgage origination segment’s indemnification liability reserve totaled $21.5 million and $11.8 million, respectively. The provision for indemnification losses was $11.2 million, $3.1 million, and $3.2 million during 2020, 2019, and 2018, respectively. The following tables provide for a rollforward of claims activity for loans put-back to the mortgage origination segment based upon an alleged breach of a representation or warranty with respect to a loan sold and related indemnification liability reserve activity (in thousands). Representation and Warranty Specific Claims Activity - Origination Loan Balance Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 32,144 $ 33,784 $ 33,702 Claims made 17,429 20,054 22,156 Claims resolved with no payment (7,778) (14,154) (13,169) Repurchases (11,588) (6,170) (8,250) Indemnification payments (122) (1,370) (655) Balance, end of year $ 30,085 $ 32,144 $ 33,784 Indemnification Liability Reserve Activity Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 11,776 $ 10,701 $ 23,472 Additions for new sales 9,991 3,116 3,170 Repurchases (768) (495) (612) Early payment defaults (624) (380) (368) Indemnification payments (1) (39) (352) (13,687) Change in reserves for loans sold in prior years 1,195 (814) (1,274) Balance, end of year $ 21,531 $ 11,776 $ 10,701 December 31, 2020 2019 Reserve for Indemnification Liability: Specific claims $ 961 $ 1,071 Incurred but not reported claims 20,570 10,705 Total $ 21,531 $ 11,776 (1) Indemnification payments in 2018 included $13.5 million related to agreements with the DOJ and HUD in exchange for release of any civil claims related to certain loans originated by PrimeLending. These claims were included in incurred but not reported claims in prior periods. Although management considers the total indemnification liability reserve to be appropriate, there may be changes in the reserve over time to address incurred losses due to unanticipated adverse changes in the economy and historical loss patterns, discrete events adversely affecting specific borrowers or industries, and/or actions taken by institutions or investors. The impact of such matters is considered in the reserving process when probable and estimable. Other Contingencies As discussed in Note 19 to the consolidated financial statements, effective upon completion of the PlainsCapital Merger, Hilltop entered into separate retention agreements with certain executive officers. As of December 31, 2020, a single retention agreement remains, with an initial term of two years (with automatic one-year renewals at the end of the first year and each anniversary thereof). This retention agreement provides for severance pay benefits if the executive officer’s employment is terminated without “cause”. In addition to this retention agreement, Hilltop and its subsidiaries maintain employment contracts with certain officers that provide for benefits in the event of a “change in control” as defined in these agreements. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2020 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | 22. Financial Instruments with Off-Balance Sheet Risk Banking The Bank is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit that involve varying degrees of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. Such financial instruments are recorded in the consolidated financial statements when they are funded or related fees are incurred or received. The contract amounts of those instruments reflect the extent of involvement (and therefore the exposure to credit loss) the Bank has in particular classes of financial instruments. Commitments to extend credit are agreements to lend to a customer provided that the terms established in the contract are met. Commitments generally have fixed expiration dates and may require payment of fees. Because some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers. In the aggregate, the Bank had outstanding unused commitments to extend credit of $1.9 billion at December 31, 2020 and outstanding financial and performance standby letters of credit of $91.5 million at December 31, 2020. The Bank uses the same credit policies in making commitments and standby letters of credit as it does for loans held for investment. The amount of collateral obtained, if deemed necessary, in these transactions is based on management’s credit evaluation of the borrower. Collateral held varies but may include real estate, accounts receivable, marketable securities, interest-bearing deposit accounts, inventory, and property, plant and equipment. Broker-Dealer In the normal course of business, the Hilltop Broker-Dealers execute, settle, and finance various securities transactions that may expose the Hilltop Broker-Dealers to off-balance sheet risk in the event that a customer or counterparty does not fulfill its contractual obligations. Examples of such transactions include the sale of securities not yet purchased by customers or for the accounts of the Hilltop Broker-Dealers, use of derivatives to support certain non-profit housing organization clients and to hedge changes in the fair value of certain securities, clearing agreements between the Hilltop Broker-Dealers and various clearinghouses and broker-dealers, secured financing arrangements that involve pledged securities, and when-issued underwriting and purchase commitments. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 23. Stock-Based Compensation Since 2012, the Company has issued stock-based incentive awards pursuant to the Hilltop Holdings Inc. 2012 Equity Incentive Plan (the “2012 Plan”). In July 2020, pursuant to stockholders’ approval, the Company adopted the Hilltop Holdings Inc. 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan serves as successor to the 2012 Plan. The 2012 Plan and the 2020 Plan are referred to collectively as “the Equity Plans.” The Equity Plans provide for the grant of nonqualified stock options, stock appreciation rights, restricted stock, RSUs, performance awards, dividend equivalent rights and other awards to employees of the Company, its subsidiaries and outside directors of the Company. Shares available for grant under the 2012 Plan that were reserved but not issued as of the effective date of the 2020 Plan were added to the reserves of the 2020 Plan. No additional awards may be made under the 2012 Plan, but the 2012 Plan remains in effect as to outstanding awards. Outstanding awards under the Equity Plans continue to be subject to the terms and conditions of the respective Plans. The number of shares authorized for issuance pursuant to awards under the 2020 Plan is 3,650,000 plus any shares that become available upon the forfeiture, expiration, cancellation or settlement in cash awards outstanding under the 2012 Plan as of April 30, 2020. At December 31, 2020, 3,428,547 shares of common stock remained available for issuance pursuant to awards granted under the 2020 Plan, excluding shares that may be delivered pursuant to outstanding awards. Compensation expense related to the Equity Plans was $14.6 million, $11.8 million and $9.1 million during 2020, 2019 and 2018, respectively. During 2020, 2019 and 2018, Hilltop granted 31,222, 26,659 and 30,400 shares of common stock, respectively, pursuant to the Equity Plans to certain non-employee members of the Company’s board of directors for services rendered to the Company. Restricted Stock Units The Compensation Committee of the board of directors of the Company issued RSUs to certain employees pursuant to the Equity Plans. Certain RSUs are subject to time-based vesting conditions and generally provided for a cliff vest on the third anniversary of the grant date, while other RSUs provided for vesting based upon the achievement of certain performance goals over a three-year period subject to service conditions set forth in the award agreements, with associated costs generally recognized on a straight-line basis over the respective vesting periods. The RSUs are not transferable, and the shares of common stock issuable upon conversion of vested RSUs may be subject to transfer restrictions for a period of one year following conversion, subject to certain exceptions. In addition, the applicable RSU award agreements provide for accelerated vesting under certain conditions. The following table summarizes information about nonvested RSU activity (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value Balance, December 31, 2017 1,318 $ 20.89 Granted 510 $ 24.00 Vested/Released (406) $ 19.92 Forfeited (152) $ 20.97 Balance, December 31, 2018 1,270 $ 22.44 Granted 719 $ 20.02 Vested/Released (496) $ 18.17 Forfeited (56) $ 24.12 Balance, December 31, 2019 1,437 $ 22.64 Granted 777 $ 21.79 Vested/Released (350) $ 26.83 Forfeited (31) $ 22.38 Balance, December 31, 2020 1,833 $ 21.48 Vested/Released RSUs include an aggregate of 238,914 shares withheld to satisfy employee statutory tax obligations during 2020, 2019 and 2018. Pursuant to certain RSU award agreements, an aggregate of 5,482 vested RSUs at December 31, 2020 require deferral of the settlement in shares and statutory tax obligations to a future date. During 2020, the Compensation Committee of the board of directors of the Company awarded certain executives and key employees an aggregate of 763,140 RSUs pursuant to the Equity Plans. At December 31, 2020, 636,208 of these RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 122,232 of these outstanding RSUs will cliff vest based upon the achievement of certain performance goals over a three-year period. At December 31, 2020, in the aggregate, 1,543,756 of the RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 289,493 outstanding RSUs cliff vest based upon the achievement of certain performance goals over a three-year period. At December 31, 2020, unrecognized compensation expense related to outstanding RSUs of $20.1 million is expected to be recognized over a weighted average period of 1.49 years. |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Matters | |
Regulatory Matters | 24. Regulatory Matters Banking and Hilltop PlainsCapital, which includes the Bank and PrimeLending, and Hilltop are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct, material effect on the consolidated financial statements. The regulations require PlainsCapital and Hilltop to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company performs reviews of the classification and calculation of risk-weighted assets to ensure accuracy and compliance with the Basel III regulatory capital requirements as implemented by the Board of Governors of the Federal Reserve System. The capital classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the companies to maintain minimum amounts and ratios (set forth in the following table) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of common equity Tier 1, Tier 1 and total capital (as defined) to risk-weighted assets (as defined). In order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers, Basel III requires banking organizations to maintain a capital conservation buffer above minimum risk-based capital requirements measured relative to risk-weighted assets. In addition, bank holding companies with less than $15 billion in assets as of December 31, 2009 are allowed to include junior subordinated debentures in Tier 1 capital, subject to certain restrictions. However, because Hilltop has grown above $15 billion in assets, if we make an acquisition in the future, the debentures issued to the PCC Statutory Trusts I, II, III and IV (the “Trusts”) may be phased out of Tier 1 and into Tier 2 capital. All of the debentures issued to the Trusts, less the common stock of the Trusts, qualified as Tier 1 capital as of December 31, 2020, under guidance issued by the Board of Governors of the Federal Reserve System. The following tables show PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including conservation buffer ratio in effect at the end of the period (dollars in thousands). Based on actual capital amounts and ratios shown in the following table, PlainsCapital’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. Actual capital amounts and ratios as of December 31, 2020 reflect PlainsCapital’s and Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period. Capital amounts and ratios in the following table as of December 31, 2019 are presented on a consolidated basis and include discontinued operations and those assets and liabilities classified as discontinued. Minimum Capital Requirements Including To Be Well Actual Conservation Buffer Capitalized Amount Ratio Ratio Ratio December 31, 2020 Tier 1 capital (to average assets): PlainsCapital $ 1,385,842 10.44 % 4.0 % 5.0 % Hilltop 2,111,580 12.64 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,385,842 14.40 % 7.0 % 6.5 % Hilltop 2,046,580 18.97 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,385,842 14.40 % 8.5 % 8.0 % Hilltop 2,111,580 19.57 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,470,364 15.27 % 10.5 % 10.0 % Hilltop 2,409,684 22.34 % 10.5 % N/A Minimum Capital Requirements Including To Be Well Actual Conservation Buffer Capitalized Amount Ratio Ratio Ratio December 31, 2019 Tier 1 capital (to average assets): PlainsCapital $ 1,236,289 11.61 % 4.0 % 5.0 % Hilltop 1,822,970 12.71 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,236,289 13.45 % 7.0 % 6.5 % Hilltop 1,776,381 16.70 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,236,289 13.45 % 8.5 % 8.0 % Hilltop 1,822,970 17.13 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,299,453 14.13 % 10.5 % 10.0 % Hilltop 1,867,771 17.55 % 10.5 % N/A A reconciliation of equity capital to common equity Tier 1, Tier 1 and total capital (as defined) is as follows (in thousands). December 31, 2020 December 31, 2019 PlainsCapital Hilltop PlainsCapital Hilltop Total equity capital $ 1,654,249 $ 2,323,939 $ 1,523,549 $ 2,103,039 Add: Net unrealized holding losses (gains) on securities available for sale and held in trust (17,763) (17,763) (9,452) (11,419) CECL transition adjustment 22,905 23,842 — — Deduct: Goodwill and other disallowed intangible assets (273,330) (283,187) (276,249) (313,756) Other (219) (251) (1,559) (1,483) Common equity Tier 1 capital (as defined) 1,385,842 2,046,580 1,236,289 1,776,381 Add: Tier 1 capital Trust preferred securities — 65,000 — 65,000 Deduct: Additional Tier 1 capital deductions — — — (18,411) Tier 1 capital (as defined) 1,385,842 2,111,580 1,236,289 1,822,970 Add: Allowable Tier 2 capital Allowance for credit losses, including unfunded commitments 120,334 134,853 63,164 63,212 Capital instruments — 200,000 — — Deduct: Additional Tier 2 capital deductions (35,812) (36,749) — (18,411) Total capital (as defined) $ 1,470,364 $ 2,409,684 $ 1,299,453 $ 1,867,771 Broker-Dealer Pursuant to the net capital requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Hilltop Securities has elected to determine its net capital requirement using the alternative method. Accordingly, Hilltop Securities is required to maintain minimum net capital, as defined in Rule 15c3-1 promulgated under the Exchange Act, equal to the greater of $250,000 and $1,000,000, respectively, or 2% of aggregate debit balances, as defined in Rule 15c3-3 promulgated under the Exchange Act. Additionally, the net capital rule of the NYSE provides that equity capital may not be withdrawn or cash dividends paid if resulting net capital would be less than 5% of the aggregate debit items. Momentum Independent Network follows the primary (aggregate indebtedness) method, as defined in Rule 15c3-1 promulgated under the Exchange Act, which requires the maintenance of the larger of $250,000 or 6-2/3% of aggregate indebtedness. At December 31, 2020, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). Momentum Hilltop Independent Securities Network Net capital $ 291,228 $ 3,220 Less: required net capital 7,045 250 Excess net capital $ 284,183 $ 2,970 Net capital as a percentage of aggregate debit items 82.7 % Net capital in excess of 5% aggregate debit items $ 273,616 Under certain conditions, Hilltop Securities may be required to segregate cash and securities in a special reserve account for the benefit of customers under Rule 15c3-3 promulgated under the Exchange Act. Assets segregated for regulatory purposes under the provisions of the Exchange Act are restricted and not available for general corporate purposes. At December 31, 2020 and 2019, the Hilltop Broker-Dealers held cash of $290.4 million and $157.4 million, respectively, segregated in special reserve bank accounts for the benefit of customers. The Hilltop Broker-Dealers were not required to segregate cash or securities in special reserve accounts for the benefit of proprietary accounts of introducing broker-dealers at December 31, 2020. Mortgage Origination As a mortgage originator, PrimeLending and its subsidiaries are subject to minimum net worth and liquidity requirements established by HUD and GNMA, as applicable. On an annual basis, PrimeLending and its subsidiaries submit audited financial statements to HUD and GNMA, as applicable, documenting their respective compliance with minimum net worth and liquidity requirements. As of December 31, 2020, PrimeLending and its subsidiaries net worth and liquidity exceeded the amounts required by HUD and GNMA, as applicable. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | 25. Stockholders’ Equity The Bank is subject to certain restrictions on the amount of dividends it may declare without prior regulatory approval. At December 31, 2020, $248.1 million of its earnings was available for dividend declaration without prior regulatory approval. Dividends During 2020, 2019 and 2018, the Company declared and paid cash dividends of $0.36, $0.32 and $0.28 per common share, or $32.5 million, $29.6 million and $26.7 million, respectively. On January 28, 2021, the Company announced that its board of directors declared a quarterly cash dividend of $0.12 per common share, payable on February 26, 2021, to all common stockholders of record as of the close of business on February 15, 2021. Stock Repurchase Programs The Company’s board of directors has periodically approved stock repurchase programs under which it authorized the Company to repurchase its outstanding common stock. Under the respective stock repurchase program authorized, the Company could repurchase shares in open-market purchases or through privately negotiated transactions as permitted under Rule 10b-18 promulgated under the Exchange Act. The extent to which the Company repurchased its shares and the timing of such repurchases depended upon market conditions and other corporate considerations, as determined by Hilltop’s management team. Repurchased shares will be returned to the Company’s pool of authorized but unissued shares of common stock. In January 2018, the Hilltop board of directors authorized a stock repurchase program through January 2019 pursuant to which the Company was originally authorized to repurchase, in the aggregate, up to $50.0 million of its outstanding common stock. In July 2018, the Hilltop board of directors authorized an increase to the aggregate amount of common stock the Company may repurchase under this program to $100.0 million, inclusive of repurchases to offset dilution related to grants of stock-based compensation. During 2018, the Company paid $59.0 million to repurchase an aggregate of 2,729,568 shares of common stock at a weighted average price of $21.61 per share. This stock repurchase program expired in January 2019. The purchases were funded from available cash balances. In January 2019, the Hilltop board of directors authorized a stock repurchase program through January 2020, pursuant to which the Company was authorized to repurchase, in the aggregate, up to $50.0 million of its outstanding common stock. On August 19, 2019, the Company entered into a Securities Purchase Agreement to purchase 2,175,404 shares of its common stock from Oak Hill Capital Partners III, L.P., Oak Hill Capital Management Partners III, L.P. and Oak Hill Capital Management, LLC (collectively, “Oak Hill Capital”). The Hilltop board of directors, other than Messrs. J. Taylor Crandall and Gerald J. Ford, considered and approved the purchase of the shares of Hilltop common stock from Oak Hill Capital. Hilltop director J. Taylor Crandall is a founding Managing Partner of Oak Hill Capital Management, LLC. The purchase was consummated on August 20, 2019 at a purchase price of $48.4 million, or $22.25 per share. The purchase price per share was determined by the weighted average of the closing prices of Hilltop common stock as reported by the New York Stock Exchange for each trading day commencing on August 12, 2019 and ending on August 16, 2019. The repurchase of shares by Hilltop from Oak Hill Capital fully utilized all remaining availability of the stock repurchase program previously authorized in January 2019. During 2019, the Company paid $73.4 million to repurchase an aggregate of 3,390,247 shares of common stock at a weighted average price of $21.64 per share. These amounts are inclusive of the repurchase of shares by Hilltop from Oak Hill Capital discussed above. This stock repurchase program expired in January 2020. The purchases were funded from available cash balances. In January 2020, the Hilltop board of directors authorized a new stock repurchase program through January 2021, pursuant to which the Company is authorized to repurchase, in the aggregate, up to $75.0 million of its outstanding common stock, inclusive of repurchases to offset dilution related to grants of stock-based compensation. As previously announced on April 30, 2020, in light of the uncertain outlook for 2020 due to the COVID-19 pandemic, Hilltop’s board of directors suspended its stock repurchase program. During 2020, prior to its suspension, the Company paid $15.2 million to repurchase an aggregate of 720,901 shares of common stock at a weighted average price of $21.13 per share associated with the stock repurchase program In January 2021, the Hilltop board of directors authorized a new stock repurchase program through January 2022, pursuant to which the Company is authorized to repurchase, in the aggregate, up to $75.0 million of its outstanding common stock, inclusive of repurchases to offset dilution related to grants of stock-based compensation. Tender Offer On September 23, 2020, the Company announced the commencement of a modified “Dutch auction” tender offer to purchase shares of its common stock for an aggregate cash purchase price up to $350 million. On November 17, 2020, the Company completed its tender offer, repurchasing 8,058,947 shares of outstanding common stock at a price of $24.00 per share for a total of $193.4 million excluding fees and expenses. The Company funded the tender offer with cash on hand. |
Other Noninterest Income and Ex
Other Noninterest Income and Expense | 12 Months Ended |
Dec. 31, 2020 | |
Other Noninterest Income and Expense | |
Other Noninterest Income and Expense | 26. Other Noninterest Income and Expense The following table shows the components of other noninterest income and expense (in thousands). Year Ended December 31, 2020 2019 2018 Other noninterest income: Net gains from trading securities portfolio $ 121,983 $ 20,521 $ 6,197 Net gains from Hilltop Broker-Dealer structured product and derivative activities 81,111 129,571 41,543 Service charges on depositor accounts 14,845 15,170 14,484 Trust fees 9,804 10,255 9,807 Other 15,862 10,833 18,365 $ 243,605 $ 186,350 $ 90,396 Other noninterest expense: Software and information technology $ 56,872 $ 50,751 $ 52,882 Mortgage origination and servicing 27,808 19,892 19,705 Brokerage commissions and fees 24,113 20,039 20,674 Unreimbursed loan closing costs 21,696 16,784 16,798 Business development 10,190 12,940 15,853 Amortization of intangible assets 6,301 7,567 8,026 Travel, meals and entertainment 4,804 12,160 11,968 Funding fees 4,461 5,393 5,414 Office supplies 3,953 4,809 5,788 Other 64,560 43,051 55,284 $ 224,758 $ 193,386 $ 212,392 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 27. Derivative Financial Instruments The Company uses various derivative financial instruments to mitigate interest rate risk. The Bank’s interest rate risk management strategy involves effectively managing the re-pricing characteristics of certain assets and liabilities to mitigate potential adverse impacts from changes in interest rates on the Bank’s net interest margin. Additionally, the Bank manages variability of cash flows associated with its variable rate debt in interest-related cash outflows with interest rate swap contracts. PrimeLending has interest rate risk relative to interest rate lock commitments (“IRLCs”) and its inventory of mortgage loans held for sale. PrimeLending is exposed to such interest rate risk from the time an IRLC is made to an applicant to the time the related mortgage loan is sold. To mitigate interest rate risk, PrimeLending executes forward commitments to sell mortgage-backed securities (“MBSs”) and Eurodollar futures. Additionally, PrimeLending has interest rate risk relative to its MSR asset and uses derivative instruments, including interest rate swaps and U.S. Treasury bond futures and options, to hedge this risk. The Hilltop Broker-Dealers use forward commitments to both purchase and sell MBSs to facilitate customer transactions and as a means to hedge related exposure to interest rate risk in certain inventory positions. Additionally, Hilltop Securities uses U.S. Treasury bond, Eurodollar futures and municipal market data, or MMD, rate locks to hedge changes in the fair value of its securities. Non-Hedging Derivative Instruments and the Fair Value Option As discussed in Note 5 to the consolidated financial statements, the Company has elected to measure substantially all mortgage loans held for sale at fair value under the provisions of the Fair Value Option. The election provides the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without applying hedge accounting provisions. The fair values of PrimeLending’s IRLCs and forward commitments are recorded in other assets or other liabilities, as appropriate, and changes in the fair values of these derivative instruments are recorded as a component of net gains from sale of loans and other mortgage production income. These changes in fair value are attributable to changes in the volume of IRLCs, mortgage loans held for sale, commitments to purchase and sell MBSs and MSR assets, and changes in market interest rates. Changes in market interest rates also conversely affect the value of PrimeLending’s mortgage loans held for sale and its MSR asset, which are measured at fair value under the Fair Value Option. The effect of the change in market interest rates on PrimeLending’s loans held for sale and MSR asset is discussed in Note 12 to the consolidated financial statements. The fair values of the Hilltop Broker-Dealers’ and the Bank’s derivative instruments are recorded in other assets or other liabilities, as appropriate. Changes in the fair value of derivatives are presented in the following table (in thousands). Year Ended December 31, 2020 2019 2018 Increase (decrease) in fair value of derivatives during period: PrimeLending $ 33,714 $ 8,550 $ (12,788) Hilltop Broker-Dealers 3,969 (3,085) (381) Bank (7) (148) 30 Hedging Derivative Instruments During 2020, the Company entered into interest rate swap contracts with the initial notional amount of $61 million to manage the exposure to changes in fair value associated with certain available for sale fixed rate collateralized mortgage backed securities attributable to changes in the designated benchmark interest rate. These fair value hedges have been designated as a last-of-layer hedge, which provides the Company the ability to execute a fair value hedge of the interest rate risk associated with a portfolio of similar prepayable assets whereby the last dollar amount estimated to remain in the portfolio of assets is identified as the hedged item. Under these interest rate swap contracts, we receive a floating rate and pay a fixed rate on the outstanding notional amount. The Company recorded a cumulative basis adjustment. The Company has assessed the hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the derivative. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income. The Company has outstanding interest rate swap contracts utilized to manage the variability of cash flows associated with our variable rate borrowings. Under these interest rate swap contract, we receive a floating rate and pay a fixed rate on the outstanding notional amount. The Company has designated the interest rate swap as a cash flow hedge and assessed the hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the derivative. To the extent that the interest rate swap is highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the derivative are included as a component of other comprehensive loss on our consolidated balance sheets. Although the Company has determined at the onset of the hedge that the interest rate swap will be a highly effective hedge throughout the term of the contract, any portion of fair value swap subsequently determined to be ineffective will be recognized in earnings. Derivative positions are presented in the following table (in thousands). December 31, 2020 December 31, 2019 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments (not designated as hedges): IRLCs $ 2,470,013 $ 76,048 $ 914,526 $ 18,222 Customer-based written options — — 31,200 — Customer-based purchased options — — 31,200 — Commitments to purchase MBSs 2,478,041 22,311 3,346,946 3,321 Commitments to sell MBSs 6,141,079 (40,621) 5,988,198 (5,904) Interest rate swaps 43,786 (2,196) 15,012 (178) U.S. Treasury bond futures and options (1) 225,400 — 283,500 — Eurodollar futures (1) — — 934,000 — Derivative instruments (designated as hedges): Interest rate swaps designated as cash flow hedges $ 105,000 $ (3,112) $ 50,000 $ 528 Interest rate swaps designated as fair value hedges (2) 60,618 (130) — — (1) Changes in the fair value of these contracts are settled daily with the respective counterparties of PrimeLending and the Hilltop Broker-Dealers. (2) The Company designated $60.6 million as the hedged amount (from a closed portfolio of prepayable available for sale securities with a carrying value of $60.7 million as of December 31, 2020) in a last-of-layer hedging relationship, which commenced in the fourth quarter of 2020. The cumulative basis adjustment included in the carrying value of the hedged items totaled $0.1 million. The increase in the estimated fair value of the IRLCs at December 30, 2020, compared to December 31, 2019, was driven by the accelerated decrease in mortgage interest rates during 2020 triggered by the economic impact of the COVID-19 pandemic, and an increase in the average value of individual IRLCs. The increase in average value of individual IRLCs was primarily driven by PrimeLending managing increased loan origination volumes to a level that could be supported by its loan fulfillment operations and addressing anticipated enhanced credit and liquidity risks triggered by the economic impact of the COVID-19 pandemic. PrimeLending has cash collateral advances totaling $26.1 million and $4.5 million to offset net liability derivative positions on its commitments to sell MBSs at December 31, 2020 and 2019, respectively. In addition, PrimeLending and the Hilltop Broker-Dealers advanced cash collateral totaling $2.7 million and $3.7 million on its U.S. Treasury bond futures and options and Eurodollar futures at December 31, 2020 and 2019, respectively. These amounts are included in other assets within the consolidated balance sheets. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Offsetting | |
Balance Sheet Offsetting | 28. Balance Sheet Offsetting Certain financial instruments, including resale and repurchase agreements, securities lending arrangements and derivatives, may be eligible for offset in the consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Assets Cash of Recognized Offset in the Presented in the Financial Collateral Net Assets Balance Sheet Balance Sheet Instruments Pledged Amount December 31, 2020 Securities borrowed: Institutional counterparties $ 1,338,855 $ — $ 1,338,855 $ (1,273,955) $ — $ 64,900 Reverse repurchase agreements: Institutional counterparties 80,319 — 80,319 (79,925) — 394 Forward MBS derivatives: Institutional counterparties 22,311 — 22,311 (22,311) — — $ 1,441,485 $ — $ 1,441,485 $ (1,376,191) $ — $ 65,294 December 31, 2019 Securities borrowed: Institutional counterparties $ 1,634,782 $ — $ 1,634,782 $ (1,586,820) $ — $ 47,962 Reverse repurchase agreements: Institutional counterparties 59,031 — 59,031 (58,619) — 412 Forward MBS derivatives: Institutional counterparties 3,640 — 3,640 (3,640) — — $ 1,697,453 $ — $ 1,697,453 $ (1,649,079) $ — $ 48,374 Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Liabilities Cash of Recognized Offset in the Presented in the Financial Collateral Net Liabilities Balance Sheet Balance Sheet Instruments Pledged Amount December 31, 2020 Securities loaned: Institutional counterparties $ 1,245,066 $ — $ 1,245,066 $ (1,179,090) $ — $ 65,976 Interest rate swaps: Institutional counterparties 2,196 — 2,196 (2,123) — 73 Repurchase agreements: Institutional counterparties 237,856 — 237,856 (237,856) — — Forward MBS derivatives: Institutional counterparties 40,741 (120) 40,621 (12,670) — 27,951 $ 1,525,859 $ (120) $ 1,525,739 $ (1,431,739) $ — $ 94,000 December 31, 2019 Securities loaned: Institutional counterparties $ 1,555,964 $ — $ 1,555,964 $ (1,509,933) $ — $ 46,031 Interest rate swaps: Institutional counterparties 178 — 178 (112) — 66 Repurchase agreements: Institutional counterparties 586,651 — 586,651 (586,651) — — Customer counterparties 25,474 — 25,474 (25,474) — — Forward MBS derivatives: Institutional counterparties 6,890 (667) 6,223 (2,384) — 3,839 $ 2,175,157 $ (667) $ 2,174,490 $ (2,124,554) $ — $ 49,936 Secured Borrowing Arrangements Secured Borrowings (Repurchase Agreements) — one Securities Lending Activities — When lending securities, the Company receives cash or similar collateral and generally pays interest (based on the amount of cash deposited) to the other party to the transaction. Securities lending transactions are executed pursuant to written agreements with counterparties that generally require securities loaned to be marked-to-market on a daily basis. The Company receives collateral in the form of cash in an amount generally in excess of the fair value of securities loaned. The Company monitors the fair value of securities loaned on a daily basis, with additional collateral obtained or refunded, as necessary. Collateral adjustments are made on a daily basis through the facilities of various clearinghouses. The Company is a principal in these securities lending transactions and is liable for losses in the event of a failure of any other party to honor its contractual obligation. Management sets credit limits with each counterparty and reviews these limits regularly to monitor the risk level with each counterparty. The Company is subject to credit risk through its securities lending activities if securities prices decline rapidly because the value of the Company’s collateral could fall below the amount of the indebtedness it secures. In rapidly appreciating markets, credit risk increases due to short positions. The Company’s securities lending business subjects the Company to credit risk if a counterparty fails to perform or if collateral securing its obligations is insufficient. In securities transactions, the Company is subject to credit risk during the period between the execution of a trade and the settlement by the customer. The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both December 31, 2020 and 2019. Remaining Contractual Maturities Overnight and Greater Than December 31, 2020 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities $ 110,831 $ — $ 127,025 $ — $ 237,856 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,244,953 — — — 1,244,953 Total $ 1,355,897 $ — $ 127,025 $ — $ 1,482,922 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,482,922 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2019 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: U.S. Treasury and agency securities $ 45,950 $ — $ — $ — $ 45,950 Asset-backed securities 257,396 12,892 295,887 — 566,175 Securities lending transactions: Corporate securities 120 — — — 120 Equity securities 1,555,844 — — — 1,555,844 Total $ 1,859,310 $ 12,892 $ 295,887 $ — $ 2,168,089 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 2,168,089 Amount related to agreements not included in offsetting disclosure above $ — |
Broker-Dealer and Clearing Orga
Broker-Dealer and Clearing Organization Receivables and Payables | 12 Months Ended |
Dec. 31, 2020 | |
Broker-Dealer and Clearing Organization Receivables and Payables | |
Broker-Dealer and Clearing Organization Receivables and Payables | 29. Broker-Dealer and Clearing Organization Receivables and Payables Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). December 31, 2020 2019 Receivables: Securities borrowed $ 1,338,855 $ 1,634,782 Securities failed to deliver 58,244 18,726 Trades in process of settlement — 104,922 Other 7,628 21,850 $ 1,404,727 $ 1,780,280 Payables: Securities loaned $ 1,245,066 $ 1,555,964 Correspondents 33,547 37,036 Securities failed to receive 61,589 8,568 Trades in process of settlement 21,765 — Other 6,406 3,950 $ 1,368,373 $ 1,605,518 |
Segment and Related Information
Segment and Related Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment and Related Information | |
Segment and Related Information | 30. Segment and Related Information Following the sale of NLC on June 30, 2020, we have two primary business units within continuing operations, PCC (banking and mortgage origination) and Securities Holdings (broker-dealer). Under GAAP, our continuing operations business units are comprised of three reportable business segments organized primarily by the core products offered to the segments’ respective customers: banking, broker-dealer and mortgage origination. These segments reflect the manner in which operations are managed and the criteria used by the chief operating decision maker, the Company’s President and Chief Executive Officer, to evaluate segment performance, develop strategy and allocate resources. The banking segment includes the operations of the Bank. The broker-dealer segment includes the operations of Securities Holdings, and the mortgage origination segment is composed of PrimeLending. As discussed in Note 3 to the consolidated financial statements, during the first quarter of 2020, management had determined that the insurance segment met the criteria to be presented as discontinued operations. On June 30, 2020, Hilltop completed the sale of NLC, which comprised the operations of the former insurance segment. As a result, insurance segment results and its assets and liabilities have been presented as discontinued operations in the consolidated financial statements. Income from discontinued operations before taxes was $38.9 million, $17.6 million and $5.8 million during 2020, 2019 and 2018, respectively. At December 31, 2019, goodwill and assets of discontinued operations were $24.0 million and $248.4 million, respectively. Corporate includes certain activities not allocated to specific business segments. These activities include holding company financing and investing activities, merchant banking investment opportunities and management and administrative services to support the overall operations of the Company. Balance sheet amounts not discussed previously and the elimination of intercompany transactions are included in “All Other and Eliminations.” The following tables present certain information about continuing operations reportable business segment revenues, operating results, goodwill and assets (in thousands). Mortgage All Other and Continuing Year Ended December 31, 2020 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 390,871 $ 39,912 $ (10,489) $ (14,192) $ 18,064 $ 424,166 Provision for credit losses 96,326 165 — — — 96,491 Noninterest income 41,376 491,355 1,172,450 3,945 (18,646) 1,690,480 Noninterest expense 232,447 415,463 753,917 53,040 (1,064) 1,453,803 Income (loss) from continuing operations before taxes $ 103,474 $ 115,639 $ 408,044 $ (63,287) $ 482 $ 564,352 Mortgage All Other and Continuing Year Ended December 31, 2019 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 379,258 $ 51,308 $ (6,273) $ (5,541) $ 20,227 $ 438,979 Provision for (reversal of) credit losses 7,280 (74) — — — 7,206 Noninterest income 41,753 404,411 634,992 2,104 (20,443) 1,062,817 Noninterest expense 231,524 366,031 563,998 50,968 (632) 1,211,889 Income (loss) from continuing operations before taxes $ 182,207 $ 89,762 $ 64,721 $ (54,405) $ 416 $ 282,701 Mortgage All Other and Continuing Year Ended December 31, 2018 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 370,732 $ 50,878 $ 1,485 $ (9,176) $ 19,380 $ 433,299 Provision for (reversal of) credit losses 5,319 (231) — — — 5,088 Noninterest income 43,588 301,714 551,860 4,798 (21,830) 880,130 Noninterest expense 256,577 320,241 540,474 36,628 (592) 1,153,328 Income (loss) from continuing operations before taxes $ 152,424 $ 32,582 $ 12,871 $ (41,006) $ (1,858) $ 155,013 Mortgage All Other and Continuing Banking Broker-Dealer Origination Corporate Eliminations Operations December 31, 2020 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 13,338,930 $ 3,196,346 $ 3,285,005 $ 2,823,374 $ (5,699,391) $ 16,944,264 December 31, 2019 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets in continuing operations $ 11,147,344 $ 3,457,068 $ 2,357,415 $ 2,393,604 $ (4,431,412) $ 14,924,019 |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings per Common Share | |
Earnings per Common Share | 31. Earnings per Common Share The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data). Year Ended December 31, 2020 2019 2018 Basic earnings per share: Income from continuing operations $ 409,440 $ 211,301 $ 116,500 Income from discontinued operations 38,396 13,990 4,941 Income attributable to Hilltop $ 447,836 $ 225,291 $ 121,441 Weighted average shares outstanding - basic 89,280 92,345 94,969 Basic earnings per common share: Income from continuing operations $ 4.59 $ 2.29 $ 1.23 Income from discontinued operations 0.43 0.15 0.05 $ 5.02 $ 2.44 $ 1.28 Diluted earnings per share: Income from continuing operations $ 409,440 $ 211,301 $ 116,500 Income from discontinued operations 38,396 13,990 4,941 Income attributable to Hilltop $ 447,836 $ 225,291 $ 121,441 Weighted average shares outstanding - basic 89,280 92,345 94,969 Effect of potentially dilutive securities 24 49 98 Weighted average shares outstanding - diluted 89,304 92,394 95,067 Diluted earnings per common share: Income from continuing operations $ 4.58 $ 2.29 $ 1.23 Income from discontinued operations 0.43 0.15 0.05 $ 5.01 $ 2.44 $ 1.28 |
Financial Statements of Parent
Financial Statements of Parent | 12 Months Ended |
Dec. 31, 2020 | |
Financial Statements of Parent | |
Financial Statements of Parent | 32. Financial Statements of Parent The following tables present the condensed combined financial statements of the Company’s bank holding company entities, Hilltop and PCC. The tables also include the corporate activities associated with Hilltop Opportunity Partners LLC and the Hilltop Plaza Entities (in thousands). Investments in subsidiaries are determined using the equity method of accounting. Condensed Combined Statements of Operations and Comprehensive Income Year Ended December 31, 2020 2019 2018 Dividends from bank subsidiaries $ 249,771 $ 143,000 $ 42,000 Dividends from nonbank subsidiaries 56,150 36,950 37,500 Investment income 4,102 5,933 3,089 Interest expense 18,294 11,474 12,265 Other income 45,887 2,221 4,893 General and administrative expense 58,130 50,968 36,628 Income before income taxes and equity in undistributed earnings of subsidiaries activity 279,486 125,662 38,589 Income tax benefit (13,897) (12,706) (7,767) Equity in undistributed earnings of subsidiaries 176,294 94,609 79,371 Net income $ 469,677 $ 232,977 $ 125,727 Other comprehensive income (loss), net 6,344 20,046 (5,656) Comprehensive income $ 476,021 $ 253,023 $ 120,071 Condensed Combined Balance Sheets December 31, 2020 2019 2018 Assets: Cash and cash equivalents $ 478,826 $ 116,471 $ 54,405 Investment in subsidiaries: Bank subsidiaries 1,654,249 1,523,549 1,459,984 Nonbank subsidiaries 453,847 533,844 483,593 Other assets 236,452 219,740 245,200 Total assets $ 2,823,374 $ 2,393,604 $ 2,243,182 Liabilities and Stockholders’ Equity: Accounts payable and accrued expenses $ 64,635 $ 53,418 $ 58,319 Notes payable 412,764 215,780 215,620 Stockholders’ equity 2,345,975 2,124,406 1,969,243 Total liabilities and stockholders’ equity $ 2,823,374 $ 2,393,604 $ 2,243,182 Condensed Combined Statements of Cash Flows Year Ended December 31, 2020 2019 2018 Operating Activities: Net income $ 469,677 $ 232,977 $ 125,727 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (176,294) (94,609) (79,371) Net realized gains on equity investments — — (5,336) Net realized gains on disposal of discontinued operations (41,901) — — Deferred income taxes 4,432 (123) 217 Other, net 37,465 44,943 19,368 Net cash provided by operating activities 293,379 183,188 60,605 Investing Activities: Purchases of equity investments (29,365) — (12,492) Purchases of premises and equipment and other (12,547) (17,302) (42,390) Proceeds from sales of equity investments — — 16,174 Proceeds from sale of discontinued operations 154,963 — — Net cash provided by (used in) investing activities 113,051 (17,302) (38,708) Financing Activities: Payments to repurchase common stock (208,664) (73,385) (58,990) Proceeds from issuance of notes payable 196,657 — — Dividends paid on common stock (32,524) (29,627) (26,698) Net cash contributed from noncontrolling interest 825 100 19,250 Other, net (369) (908) 2,182 Net cash used in financing activities (44,075) (103,820) (64,256) Net change in cash and cash equivalents 362,355 62,066 (42,359) Cash and cash equivalents, beginning of year 116,471 54,405 96,764 Cash and cash equivalents, end of year $ 478,826 $ 116,471 $ 54,405 Supplemental Schedule of Non-Cash Activities: Construction in progress related to build-to-suit lease obligations $ — $ — $ 27,802 Note receivable contributed from nonbank subsidiary $ — $ — $ 111,653 |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Information (Unaudited) | |
Selected Quarterly Financial Information (Unaudited) | 33 Selected Quarterly Financial Information (Unaudited) Selected quarterly financial information is summarized as follows (in thousands, except per share data). Year Ended December 31, 2020 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 136,861 $ 129,828 $ 134,931 $ 144,875 $ 546,495 Interest expense 29,489 27,928 30,373 34,539 122,329 Net interest income 107,372 101,900 104,558 110,336 424,166 Provision for (reversal of) credit losses (3,482) (602) 66,026 34,549 96,491 Noninterest income 447,931 502,711 468,125 271,713 1,690,480 Noninterest expense 402,348 399,345 370,209 281,901 1,453,803 Income from continuing operations before income taxes 156,437 205,868 136,448 65,599 564,352 Income tax expense 39,295 46,820 31,808 15,148 133,071 Income from continuing operations 117,142 159,048 104,640 50,451 431,281 Income from discontinued operations, net of income taxes 3,734 736 30,775 3,151 38,396 Net income 120,876 159,784 135,415 53,602 469,677 Less: Net income attributable to noncontrolling interest 4,431 6,505 6,939 3,966 21,841 Income attributable to Hilltop $ 116,445 $ 153,279 $ 128,476 $ 49,636 $ 447,836 Earnings per common share: Basic: Earnings from continuing operations $ 1.31 $ 1.69 $ 1.08 $ 0.51 $ 4.59 Earnings from discontinued operations 0.04 0.01 0.34 0.04 0.43 $ 1.35 $ 1.70 $ 1.42 $ 0.55 $ 5.02 Diluted: Earnings from continuing operations $ 1.30 $ 1.69 $ 1.08 $ 0.51 $ 4.58 Earnings from discontinued operations 0.05 0.01 0.34 0.04 0.43 $ 1.35 $ 1.70 $ 1.42 $ 0.55 $ 5.01 Cash dividends declared per common share $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.36 Year Ended December 31, 2019 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 151,818 $ 160,940 $ 149,000 $ 148,938 $ 610,696 Interest expense 41,058 48,294 41,716 40,649 171,717 Net interest income 110,760 112,646 107,284 108,289 438,979 Provision for (reversal of) credit losses 6,880 47 (672) 951 7,206 Noninterest income 263,646 306,505 276,703 215,963 1,062,817 Noninterest expense 307,868 321,186 304,088 278,747 1,211,889 Income from continuing operations before income taxes 59,658 97,918 80,571 44,554 282,701 Income tax expense 13,579 21,472 18,526 10,137 63,714 Income from continuing operations 46,079 76,446 62,045 34,417 218,987 Income (loss) from discontinued operations, net of income taxes 5,623 5,261 (2,254) 5,360 13,990 Net income 51,702 81,707 59,791 39,777 232,977 Less: Net income attributable to noncontrolling interest 2,426 2,289 1,980 991 7,686 Income attributable to Hilltop $ 49,276 $ 79,418 $ 57,811 $ 38,786 $ 225,291 Earnings per common share: Basic: Earnings from continuing operations $ 0.48 $ 0.81 $ 0.64 $ 0.36 $ 2.29 Earnings (losses) from discontinued operations 0.06 0.06 (0.02) 0.05 0.15 $ 0.54 $ 0.87 $ 0.62 $ 0.41 $ 2.44 Diluted: Earnings from continuing operations $ 0.48 $ 0.81 $ 0.64 $ 0.36 $ 2.29 Earnings (losses) from discontinued operations 0.06 0.05 (0.02) 0.05 0.15 $ 0.54 $ 0.86 $ 0.62 $ 0.41 $ 2.44 Cash dividends declared per common share $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.32 |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting and Reporting Policies | |
Nature of Operations | Nature of Operations Hilltop Holdings Inc. (“Hilltop” and, collectively with its subsidiaries, the “Company”) is a financial holding company registered under the Bank Holding Company Act of 1956. The Company’s primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank (the “Bank”). In addition, the Company provides an array of financial products and services through its broker-dealer and mortgage origination subsidiaries. On June 30, 2020, Hilltop completed the sale of all of the outstanding capital stock of National Lloyds Corporation (“NLC”), which comprised the operations of the former insurance segment, for cash proceeds of $154.1 million and was subject to post-closing adjustments. Accordingly, NLC’s results and its assets and liabilities have been presented as discontinued operations in the consolidated financial statements. For further details, see Note 3 to the consolidated financial statements. As a result of the above noted sale of NLC, the Company, headquartered in Dallas, Texas, provides its products and services through two primary business units within continuing operations, PlainsCapital Corporation (“PCC”) and Hilltop Securities Holdings LLC (“Securities Holdings”). PCC is a financial holding company, that provides, through its subsidiaries, traditional banking, wealth and investment management and treasury management services primarily in Texas and residential mortgage lending throughout the United States. Securities Holdings is a holding company, that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, clearing, securities lending, structured finance and retail brokerage services throughout the United States. Unless otherwise noted, the Company’s notes to the consolidated financial statements present information limited to continuing operations. As a result of the spread of the novel coronavirus (“COVID-19”) pandemic, economic uncertainties continue to adversely impact the global economy and have contributed to significant volatility in banking and other financial activity in the areas in which the Company operates. The effects of COVID-19 and the governmental and societal response to the virus have negatively impacted financial markets and overall economic conditions on an unprecedented scale, resulting in the shuttering of businesses across the country and significant job loss. Many of these businesses reopened but may be operating at limited capacity. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19. COVID-19 presents material uncertainty which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. |
Basis of Presentation | Basis of Presentation The audited financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Other than changes related to the implementation of the current expected credit losses (“CECL”) standard, as further described in Note 2 to the consolidated financial statements, the Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. Hilltop owns 100% of the outstanding stock of PCC. PCC owns 100% of the outstanding stock of the Bank and 100% of the membership interest in Hilltop Opportunity Partners LLC, a merchant bank utilized to facilitate investments in companies engaged in non-financial activities. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”). PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds an ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC also owns 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which are not included in the consolidated financial statements under the requirements of the Variable Interest Entities (“VIE”) Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), because the primary beneficiaries of the Trusts are not within the consolidated group. Hilltop has a 100% membership interest in Securities Holdings, which operates through its wholly-owned subsidiaries, Hilltop Securities Inc. (“Hilltop Securities”), Momentum Independent Network Inc., formerly Hilltop Securities Independent Network Inc., (“Momentum Independent Network” and collectively with Hilltop Securities, the “Hilltop Broker-Dealers”) and Hilltop Securities Asset Management, LLC. Hilltop Securities is a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”), Momentum Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA. Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC are registered investment advisers under the Investment Advisers Act of 1940. In addition, Hilltop owns 100% of the membership interest in each of HTH Hillcrest Project LLC (“HTH Project LLC”) and Hilltop Investments I, LLC The consolidated financial statements include the accounts of the above-named entities. Intercompany transactions and balances have been eliminated. Noncontrolling interests have been recorded for minority ownership in entities that are not wholly owned and are presented in compliance with the provisions of Noncontrolling Interest in Subsidiary Subsections of the ASC. Certain reclassifications have been made to the prior period consolidated financial statements to conform with the current period presentation, including reclassifications due to the adoption of new accounting pronouncements and reclassifications due to the presentation of NLC’s results and its assets and liabilities as discontinued operations. In preparing these consolidated financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all stockholders and other financial statement users, or filed with the SEC. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates regarding the allowance for credit losses, the fair values of financial instruments, the mortgage loan indemnification liability, and the potential impairment of assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. |
Acquisition Accounting | Acquisition Accounting Acquisitions are accounted for under the acquisition method of accounting. Purchased assets, including identifiable intangible assets, and assumed liabilities are recorded at their respective acquisition date fair values. If the fair value of net assets purchased exceeds the consideration given, a bargain purchase gain is recognized. If the consideration given exceeds the fair value of the net assets received, goodwill is recognized. |
Securities Purchased Under Agreements to Resell | Securities Purchased Under Agreements to Resell Securities purchased under agreements to resell (reverse repurchase agreements or reverse repos) are treated as collateralized financings and are carried at the amounts at which the securities will subsequently be resold as specified in the agreements. The Company is in possession of collateral with a fair value equal to or in excess of the contract amounts. |
Securities | Securities Management classifies securities at the time of purchase and reassesses such designation at each balance sheet date. Securities held for resale to facilitate principal transactions with customers are classified as trading and are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. The Company reports interest income on trading securities as interest income on securities and other changes in fair value as other noninterest income. Debt securities held but not intended to be held to maturity or on a long-term basis are classified as available for sale. Securities included in this category are those that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates, prepayment risk or other factors related to interest rate and prepayment risk. Debt securities available for sale are carried at fair value. Unrealized holding gains and losses on debt securities available for sale, net of taxes, are reported in other comprehensive income (loss) until realized. Premiums and discounts are recognized in interest income using the effective interest method and reflect any optionality that may be embedded in the security. Equity securities are carried at fair value, with changes in fair value reflected in the consolidated statements of operations. Equity securities that do not have readily determinable fair values are initially recorded at cost and subsequently remeasured when there is (i) an observable transaction involving the same investment, (ii) an observable transaction involving a similar investment from the same issuer or (iii) an impairment. These remeasurements are reflected in the consolidated statements of operations. |
Allowance for Credit Losses on Available for Sale and Held to Maturity Securities | Allowance for Credit Losses on Available for Sale and Held to Maturity Securities Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available for sale debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes. Allowances for credit losses may result from credit deterioration of the issuer or the collateral underlying the security. In performing an assessment of whether any decline in fair value is due to a credit loss, all relevant information is considered at the individual security level. In assessing whether a credit loss exists, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount by which the fair value is less than the amortized cost basis. Under the new credit loss guidance adopted on January 1, 2020, the previous other-than-temporary-impairment (“OTTI”) model was replaced. Under the OTTI model, credit losses were recognized as a reduction to the cost basis of the investment with recovery of an impairment loss recognized prospectively over time as interest income, and reversals of impairment were not allowed. Effective January 1, 2020, if the Company intends to sell a debt security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged against the allowance for credit losses, with any incremental impairment reported in earnings. Reversals of the allowance for credit losses are permitted and should not exceed the allowance amount initially recognized. For debt securities held to maturity, estimated expected credit losses are calculated in a manner like that used for loans held for investment. That is, the historical lifetime probability of default and severity of loss in the event of default is derived or obtained from external sources and adjusted for the expected effects of reasonable and supportable forecasts over the expected lives of the securities on those historical credit losses. With respect to certain classes of debt securities, primarily U.S. Treasuries, the Company considers the history of credit losses, current conditions and reasonable and supportable forecasts, which may indicate that the expectation that nonpayment of the amortized cost basis is or continues to be zero, even if the U.S. government were to technically default. Therefore, for those securities, the Company does not record expected credit losses. |
Loans Held for Sale | Loans Held for Sale Loans held for sale consist primarily of single-family residential mortgages funded through PrimeLending. These loans are generally on the consolidated balance sheet between 30 and 45 days. Substantially all mortgage loans originated by PrimeLending are sold to various investors in the secondary market, historically with the majority with servicing released. Mortgage loans held for sale are carried at fair value in accordance with the provisions of the Fair Value Option Subsections of the ASC (the “Fair Value Option”). Changes in the fair value of the loans held for sale are recognized in earnings and fees and costs associated with origination are recognized as incurred. The specific identification method is used to determine realized gains and losses on sales of loans, which are reported as net gains (losses) in noninterest income. Loans sold are subject to certain indemnification provisions with investors, including the repurchase of loans sold and repayment of certain sales proceeds to investors under certain conditions. In addition, certain mortgage loans guaranteed by U.S. Government agencies and sold into Government National Mortgage Association (“GNMA”) pools may, under certain conditions specified in the government programs, become subject to repurchase by PrimeLending. When such loans subject to repurchase no longer qualify for sale accounting, they are reported as loans held for sale in the consolidated balance sheets. |
Loans Held for Investment | Loans Held for Investment Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal reduced by unearned income, net unamortized deferred fees and an allowance for credit losses. Unearned income on installment loans and interest on other loans is recognized using the effective interest method. Net fees received for providing loan commitments and letters of credit that result in loans are deferred and amortized to interest income over the life of the related loan, beginning with the initial borrowing. Net fees on commitments and letters of credit that are not expected to be funded are amortized to noninterest income over the commitment period. Income on direct financing leases is recognized on a basis that achieves a constant periodic rate of return on the outstanding investment. The accrual of interest on credit deteriorated loans is discontinued when, in management’s opinion, there is a clear indication that the borrower’s cash flow may not be sufficient to meet principal and interest payments, which is generally when a loan is 90 days past due unless the asset is both well secured and in the process of collection. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is charged against income. Once placed on non-accrual status, interest income is recognized on a cash basis. Additionally, accretion of purchased discount on non-accrual loans is suspended. The Company follows applicable regulatory guidance when measuring past due status. The Company uses the actual days elapsed since the payment due date of the loan to determine delinquency. In response to the ongoing COVID-19 pandemic, the Company allowed modifications, such as payment deferrals for up to 90 days and temporary forbearance, to credit-worthy borrowers who are experiencing temporary hardship due to the effects of COVID-19. These modifications generally meet the criteria of the CARES Act, and therefore, the Company does not account for such loan modifications as TDRs Management defines loans acquired in a business combination as acquired loans. Acquired loans are recorded at estimated fair value on their purchase date with no carryover of the related allowance for credit losses. Acquired loans are segregated between those considered to be credit deteriorated and those without credit deterioration at acquisition. To make this determination, management considers such factors as past due status, non-accrual status and credit risk ratings. For acquired performing loans, a lifetime allowance for credit losses is estimated as of the date of acquisition and is recorded through provision for (reversal of) credit losses. The difference between the purchase price and loan receivable is amortized over the remaining life of the loan. All formerly designated purchased credit impaired (“PCI”) loans became purchased credit deteriorated (“PCD”) loans effective January 1, 2020. PCD loans are loans that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination. For PCD loans, any non-credit discount or premium related to an acquired pool of PCD loans is allocated to each individual asset within the pool. On the acquisition date, the initial allowance for credit losses measured on a pooled basis is allocated to each individual asset within the pool to allocate any non-credit discount or premium. Credit losses are measured based on unpaid principal balance. A lifetime allowance for credit losses is estimated as of the date of acquisition. The initial allowance for credit losses is added to the purchase price and is considered to be part of the PCD loan amortized cost basis. |
Allowance for Credit Losses for Loans Held for Investment | Allowance for Credit Losses for Loans Held for Investment Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses for loans. The allowance for credit losses, or reserve, is an estimate of expected losses over the lifetime of a loan within the Company’s existing loans held for investment portfolio. The allowance for credit losses for loans held for investment is adjusted by a provision for (reversal of) credit losses, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio segments, which are further disaggregated into loan classes, the level at which credit risk is monitored. The allowance for credit losses for loans not evaluated for specific reserves is calculated using statistical credit factors, including probabilities of default (“PD”) and loss given default (“LGD”), to the amortized cost of pools of loan exposures with similar risk characteristics over its contractual life, adjusted for prepayments, to arrive at an estimate of expected credit losses. Economic forecasts are applied over the period management believes it can estimate reasonable and supportable forecasts. Reasonable and supportable forecast periods and reversion assumptions to historical data are credit model specific. The Company typically forecasts economic variables over a one Commercial loans that exceed a minimum size scope are underwritten and graded using credit models that leverage national industry default data to score the loans. At the conclusion of the process of underwriting or re-grading a borrower, each borrower (for commercial and industrial loans) or property (for commercial real estate loans) is assigned a PD grade threshold. The valuation methodology of risk rating internal grades is based on the merits of the financial ratios of the borrower or the property. In addition, an LGD grade is determined by the credit models utilizing collateral information provided. A master rating scale effectively "pools" the loans by credit scores and assigns a standard one year PD percentage and an LGD percentage equally for all loans that have a given score. For borrowers or loans that do not meet the minimum balance threshold, an internal scorecard is utilized to approximate the grades derived from the credit models and is mapped to the master rating scale. The resulting numerical PD grade is the credit quality indicator for commercial loans. The grades on borrowers or properties that are scored in the credit models are determined at origination and updated at least annually. The grades on the internal scorecards are updated annually if they meet a minimum threshold, or if new circumstances (favorable or unfavorable) warrant a re-scoring. When computing allowance levels, credit loss assumptions are estimated using models that analyze loans according to credit risk ratings, historic loss experience, past due status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Future factors and forecasts may result in significant changes in the allowance and provision (reversal) for credit losses in those future periods. The allowance for credit losses will primarily reflect estimated losses for pools of loans that share similar risk characteristics, but will also consider individual loans that do not share risk characteristics with other loans. Loans that Share Risk Characteristics with Other Loans In estimating the component of the allowance for credit losses for loans that share similar risk characteristics with other loans, such loans are segregated into loan classes. Loans are designated into loan classes based on loans pooled by product types and similar risk characteristics or areas of risk concentration. In determining the allowance for credit losses, the Company derives an estimated credit loss assumption from a model that categorizes loan pools based on loan type and internal risk rating or past due category as follows. Commercial and Industrial and Commercial Real Estate Loans. These factors are based on an evaluation of historical and current information and sometimes involve subjective assessment and interpretation. Specific considerations for construction are considered in the internal PD and LGD risk ratings including property type, development phase and complexity, as well as lease-up and stabilization projections. The PD and LGD factors are further sensitized in the models for future expectations over the loan’s contractual life, adjusted for prepayments. 1-4 Family Residential Loans. The 1-4 family residential loan portfolio is segmented into pools of residential real estate loans with similar credit risk characteristics. For 1-4 family residential loans, the Company utilizes separate credit models designed for these types of loans to estimate the PD and LGD grades for the allowance for credit losses calculation. The models calculate expected losses and prepayments using borrower information at origination, including FICO score, loan type, collateral type, lien position, geography, origination year, and loan to value. Past due status post-origination is also a key input in the models. Current and future changes in economic conditions, including unemployment rates, home prices, index rates, and mortgage rates, are also considered. New originations and loan purchases are scored using the FICO score at origination. FICO score bands are assigned following prevalent industry standards and are used as the credit quality indicator for these types of loans. Substandard non-accrual loans are treated as a separate category in the credit scoring grid as the probability of default is 100% and the FICO score is no longer a relevant predictor. Consumer Loans. The consumer loan portfolio is segmented into pools of consumer installment loans or revolving lines of credit with similar credit characteristics. The models calculate expected losses using borrower information at origination, including FICO score, origination year, geography, and collateral type. Broker-Dealer Loans. The broker-dealer loan portfolio is evaluated on an individual basis using the collateral maintenance practical expedient. The collateral maintenance practical expedient allows the broker-dealer to compare the fair value of the collateral of each loan as of the reporting date to loan value. The underlying collateral of the loans to customers and correspondents is marked to market daily and any required additional collateral is collected. The allowance represents the amount of unsecured loan balances at the end of the period. Qualitative Factors Estimating the timing and amounts of future loss cash flows is subject to significant management judgment as these loss cash flows rely upon estimates such as default rates, loss severities, collateral valuations, the amounts and timing of principal payments (including any expected prepayments) or other factors that are reflective of current or future expected conditions. These estimates, in turn, depend on the duration of current overall economic conditions, industry, borrower, or portfolio specific conditions, the expected outcome of bankruptcy or insolvency proceedings, as well as, in certain circumstances, other economic factors, including the level of current and future real estate prices. All of these estimates and assumptions require significant management judgment and certain assumptions that are highly subjective. Model imprecision also exists in the allowance for credit losses estimation process due to the inherent time lag of available industry information and differences between expected and actual outcomes. Management considers adjustments for these conditions in its allowance for credit loss estimates qualitatively where they may not be measured directly in its individual or collective assessments, including but not limited to: ● an adjustment to historical loss data to measure credit risk even if that risk is remote and does not meet the scope of assets with zero expected losses; ● the environmental factors and the areas in which credit is concentrated, such as the regulatory, environmental, or technological environment, the geographical area or key industries, or in the national or regional economic and business conditions where the borrower has exposure; ● the nature and volume of the company’s financial assets; ● the borrower’s financial condition, credit rating, credit score, asset quality, or business prospects; ● the borrower’s ability to make scheduled interest or principal payments; ● the remaining payment terms of the financial assets and the remaining time to maturity and the timing and extent of prepayments on the financial assets; ● the volume and severity of past due or adversely classified financial assets; ● the value of underlying collateral in which the collateral-dependent practical expedient has not been utilized; ● any updates to credit lending policies and procedures, including lending strategies, underwriting standards, collection and recovery practices, not reflected in the models; and ● the quality of the internal credit review system. Loans that Do Not Share Risk Characteristics with Other Loans When a loan is assigned a substandard non-accrual risk rating grade, the loan subsequently is evaluated on an individual basis and no longer evaluated on a collective basis. The net realizable value of the loan is compared to the appropriate loan basis (i.e. PCD loan versus non-PCD loan) to determine any allowance for credit losses. Loans that are below a predetermined threshold, with the exception of 1-4 family residential loans, are fully reserved. The Company generally considers non-accrual loans to be collateral-dependent. The practical expedient to measure credit losses using the fair value of the collateral has been exercised. For commercial real estate loans, the fair value of collateral is primarily based on appraisals. For owner occupied real estate loans, underlying properties are occupied by the borrower in its business, and evaluations are based on business operations used to service the debt. For non-owner occupied real estate loans, underlying properties are income-producing and evaluations are based on tenant revenues. For income producing construction and land development loans, appraisals reflect the assumption that properties are completed. For 1-4 family residential loans that are graded substandard non-accrual, an assessment of value is made using the most recent appraisal on file. If the appraisal on file is older than two years, the latest property tax assessment is used as a screening value to determine if a reserve might be required. If the assessed value is less than the appraised value, this value is discounted for selling costs and is used to measure the reserve required. If the appraisal is less than two years old, the value is discounted for selling costs and compared to the appropriate basis in the loan. Consumer loans are charged off when they reach 90 days delinquency as a general rule. There are limited cases where the loan is not charged off due to special circumstances and is subject to the collateral review process. |
Allowance for Loan Losses for Loans Held for Investment | Allowance for Loan Losses for Loans Held for Investment Prior to the adoption of the new CECL standard as described in Note 2 to the consolidated financial statements, the Company’s allowance for loan losses was a reserve established through a provision for loan losses charged to or recovered from expense, which represents management’s best estimate of probable losses inherent in the existing portfolio of loans at the balance sheet date. The allowance for loan losses included allowance allocations calculated in accordance with the regulatory Interagency Policy Statement on the Allowance for Loan and Lease Losses and the Receivables and Contingencies Topics of the ASC. The level of the allowance reflected management’s continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions, and unidentified losses inherent in the current loan portfolio. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. While management utilized its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond its control, including the performance of the loan portfolio, the economy and changes in interest rates. The Bank’s allowance for loan losses consisted of three elements: (i) specific valuation allowances established for probable losses on individually impaired loans; (ii) general historical valuation allowances calculated based on historical loan loss experience for homogenous loans with similar collateral; and (iii) valuation allowances to adjust general reserves based on current economic conditions and other qualitative risk factors, including projected loss emergence period, both internal and external to the Bank. Changes in the volume and severity of past due, non-accrual and classified loans, as well as changes in the nature, volume and terms of loans in the portfolio are key indicators of changes that could indicate a necessary adjustment to the historical loss factors. Classified loans are defined as loans having a well-defined weakness or weaknesses related to the borrower's financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. The magnitude of the impact of these factors on the qualitative assessment of the allowance for loan loss changes from quarter to quarter. Periodically, management conducted an analysis to estimate the loss emergence period for each loan portfolio segment based on historical charge-offs, loan type and loan payment history and considered available industry peer bank data. Model output by loan category was reviewed to evaluate the reasonableness of the reserve levels in comparison to the estimated loss emergence period applied to historical loss experience. In connection with business combinations, the Bank acquired loans both with and without evidence of credit quality deterioration since origination. PCI loans were accounted for in pools as well as on an individual loan basis. Cash flows expected to be collected were recast quarterly for each loan or pool. These evaluations required the continued use and updating of key assumptions and estimates such as default rates, loss severity given default and prepayment speed assumptions (similar to those used for the initial fair value estimate). Management judgment was applied in developing these assumptions. If expected cash flows for a loan or pool decreased, an increase in the allowance for loan losses was made through a charge to the provision for loan losses. If expected cash flows for a loan or pool increased, any previously established allowance for loan losses was reversed and any remaining difference increased the accretable yield. This increase in accretable yield was taken into income over the remaining life of the loan. Loans without evidence of credit impairment at acquisition were subsequently evaluated for any required allowance at each reporting date. An allowance for loan losses was calculated using a methodology similar to that described above for originated loans. The allowance as determined for each loan collateral type was compared to the remaining fair value discount for that loan collateral type. If greater, the excess was recognized as an addition to the allowance through a provision for loan losses. If less than the discount, no additional allowance was recorded. Charge-offs and losses first reduced any remaining fair value discount for the loan and once the discount was depleted, losses were applied against the allowance established for that loan. |
Off-Balance Sheet Credit Exposures, Including Unfunded Loan Commitments | Off-Balance Sheet Credit Exposures, Including Unfunded Loan Commitments The Company maintains a separate allowance for credit losses from off-balance sheet credit exposures, including unfunded loan commitments, which is included in other liabilities within the consolidated balance sheets. The Company estimates expected losses by calculating a commitment usage factor based on industry usage factors. The commitment usage factor is applied over the relevant contractual period. Loss factors from the underlying loans to which commitments are related are applied to the results of the usage calculation to estimate any liability for credit losses related for each loan type. |
Broker-Dealer and Clearing Organization Transactions | Broker-Dealer and Clearing Organization Transactions Amounts recorded in broker-dealer and clearing organization receivables and payables include securities lending activities, as well as amounts related to securities transactions for either customers of the Hilltop Broker-Dealers or for the accounts of the Hilltop Broker-Dealers. Securities borrowed and securities loaned transactions are generally reported as collateralized financings. Securities borrowed transactions require the Hilltop Broker-Dealers to deposit cash, letters of credit, or other collateral with the lender. With respect to securities loaned, the Hilltop Broker-Dealers receive collateral in the form of cash or other assets in an amount generally in excess of the market value of securities loaned. The Hilltop Broker-Dealers monitor the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as necessary. Interest income and interest expense associated with collateralized financings is included in the accompanying consolidated statements of operations. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization computed principally on the straight-line method over the estimated useful lives of the assets, which range between 3 and 25 years. Gains or losses on disposals of premises and equipment are included in results of operations. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases with a term of greater than one year are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the Company’s consolidated balance sheets. Finance leases are included in premises and equipment and other liabilities on the Company’s consolidated balance sheets. The Company has lease agreements with lease and nonlease components, which are generally accounted for as a single lease component. Leases of low-value assets are assessed on a lease-by-lease basis to determine the need for balance sheet capitalization. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate commensurate with the lease term based on the information available at the lease commencement date in determining the present value of lease payments. No significant judgments or assumptions were involved in developing the estimated operating lease liabilities as the Company’s operating lease liabilities largely represent the future rental expenses associated with operating leases, and the incremental borrowing rates are based on publicly available interest rates. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease. These options to extend or terminate are assessed on a lease-by-lease basis, and the ROU assets and lease liabilities are adjusted when it is reasonably certain that an option will be exercised. Rental expense for lease payments is recognized on a straight-line basis over the lease term and is included in occupancy and equipment, net within our consolidated statements of operations. |
Other Real Estate Owned | Other Real Estate Owned Real estate acquired through foreclosure (“OREO”) is included in other assets within the consolidated balance sheets and is carried at management’s estimate of fair value, less estimated cost to sell. Any excess of recorded investment over fair value, less cost to sell, is charged against the allowance for credit losses when property is initially transferred to OREO. Subsequent to the initial transfer to OREO, downward valuation adjustments are charged against earnings. Valuation adjustments, revenue and expenses from operations of the properties and resulting gains or losses on sale are included within the consolidated statements of operations in other noninterest income or expense, as appropriate. |
Debt Issuance Costs | Debt Issuance Costs The Company capitalizes debt issuance costs associated with financing of debt. These costs are amortized using the effective interest method over the repayment term of the debt. Unamortized debt issuance costs are presented in the consolidated balance sheets as a direct reduction from the associated debt liability. Debt issuance costs of $0.3 million, $0.2 million and $0.2 million during 2020, 2019 and 2018, respectively, were amortized and included in interest expense within the consolidated statements of operations. In May 2020 and April 2015, debt issuance costs of $3.2 million and $1.9 million, respectively, were capitalized in connection with Hilltop’s issuance of the Subordinated Notes due 2030 and 2035 (defined hereafter) and the 5% senior notes due 2025 (defined hereafter), respectively. |
Goodwill | Goodwill Goodwill, which represents the excess of cost over the fair value of the net assets acquired, is allocated to reporting units and tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount should be assessed. The Company performs required annual impairment tests of its goodwill as of October 1 st impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, any loss recognized will not exceed the total amount of goodwill allocated to that reporting unit. |
Intangibles and Other Long-Lived Assets | Intangibles and Other Long-Lived Assets Intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. The Company’s intangible assets primarily consist of core deposits, trade names and customer relationships. Intangible assets with definite useful lives are generally amortized on the straight-line method over their estimated lives, although certain intangibles, including core deposits, and customer relationships, are amortized on an accelerated basis. Amortization of intangible assets is recorded in other noninterest expense within the consolidated statements of operations. Intangible assets with indefinite useful lives are tested for impairment on an annual basis as of October 1 st |
Mortgage Servicing Rights | Mortgage Servicing Rights The Company determines its portfolio segment of residential mortgage servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures its servicing assets at fair value and reports changes in fair value through earnings. The retained mortgage servicing rights (“MSR”) asset is measured at fair value as of the date of sale of the related mortgage loan. Subsequent fair value measurements of the MSR asset are determined by valuing the projected net servicing cash flows, which are then discounted to estimate fair value using a discounted cash flow model. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. The model assumptions and the MSR asset fair value estimates are compared to observable trades of similar portfolios as well as to MSR asset broker valuations and industry surveys, as available. The expected life of the loan can vary from management’s estimates due to prepayments by borrowers. The value of the MSR asset is also dependent upon the discount rate used in the model, which is based on current market rates that are reviewed by management on an ongoing basis. |
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities. The Company’s derivative financial instruments also include interest rate lock commitments (“IRLCs”) executed with its customers that allow those customers to obtain a mortgage loan on a future date at an agreed-upon interest rate. The IRLCs, forward commitments, interest rate swaps, U.S. Treasury bond futures and options and Eurodollar futures meet the definition of a derivative under the provisions of the Derivatives and Hedging Topic of the ASC. Derivatives are recorded at fair value in the consolidated balance sheets. To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract. If derivative instruments are designated as hedges of fair values, the change in the fair value of both the derivative instrument and the hedged item are included in current earnings. Changes in the fair value of derivatives designated as hedges of cash flows are recorded in other comprehensive income (loss). Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the line item where the hedged item’s effect on earnings is recorded. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Certain activities primarily within the Company’s broker-dealer and banking segments are subject to the provisions of ASC 606, Revenue from Contracts with Customers The Company’s banking segment has three primary lines of business: (i) business banking, (ii) personal banking and (iii) wealth and investment management. Revenue from contracts with customers subject to the guidance in ASC 606 from the banking segment (certain retail and trust fees) is included within the other noninterest income line item within the consolidated statements of operations. Retail and trust fees are generally recognized at the time the related transaction occurs or when services are completed. Fees are based on the dollar amount of the transaction or are otherwise predefined in contracts associated with each customer account depending on the type of account and services provided. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for all share-based awards granted is based on the grant date fair value estimated in accordance with the provisions of the Stock Compensation Topic of the ASC. The Company recognizes these compensation costs for only those awards expected to vest over the service period of the award. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded for the estimated future tax effects of the temporary difference between the tax basis and book basis of assets and liabilities reported in the accompanying consolidated balance sheets. The provision for income tax expense or benefit differs from the amounts of income taxes currently payable because certain items of income and expense included in the consolidated financial statements are recognized in different time periods by taxing authorities. Interest and penalties incurred related to tax matters are charged to other interest expense or other noninterest expense, respectively. The revaluation of deferred tax assets as a result of enacted tax rate changes, such as those found in the Tax Cuts and Jobs Act of 2017 (“Tax Legislation”), is recognized within income tax expense in continuing operations in the period of enactment. Benefits from uncertain tax positions are recognized in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority having full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of cumulative benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the reporting period in which that threshold is no longer met. If the Company were to prevail on all uncertain tax positions, the effect would be a benefit to the Company’s effective tax rate. Due to uncertainties in any tax audit outcome, estimates of the ultimate settlement of unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimate. Deferred tax assets, including net operating loss and tax credit carry forwards, are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that any portion of these tax attributes will not be realized. Periodic reviews of the carrying amount of deferred tax assets are made when it is more likely than not that all or a portion of a deferred tax asset will not be realized. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash For the purpose of presentation in the consolidated statements of cash flows, cash, cash equivalents and restricted cash are defined as the amounts included in the consolidated balance sheet captions “Cash and due from banks”, “Federal funds sold” and “Assets segregated for regulatory purposes.” Cash equivalents have original maturities of three months or less. |
Repurchases of Common Stock | Repurchases of Common Stock In accordance with Maryland law, the Company uses the par value method of accounting for its stock repurchases, whereby the par value of the shares is deducted from common stock. The excess of the cost of shares acquired over the par value is allocated to additional paid-in capital based on an estimated average sales price per issued share with the excess amounts charged to retained earnings. |
Basic and Diluted Net Income Per Share | Basic and Diluted Net Income Per Share Nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of earnings per share pursuant to the two-class method prescribed by the Earnings Per Share Topic of the ASC. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Net earnings, less any preferred dividends accumulated for the period (whether or not declared), is allocated between the common stock and participating securities pursuant to the two-class method. Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares. The Company calculated basic earnings per common share using the treasury method instead of the two-class method because there were no instruments which qualified as participating securities during 2020, 2019 or 2018. Diluted earnings per common share is computed in a similar manner, except that first the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares, excluding the participating securities, were issued using the treasury stock method. During 2020, 2019 and 2018, restricted stock units (“RSUs”) were the only potentially dilutive non-participating instruments issued by Hilltop. Next, the Company determines and includes in the diluted earnings per common share calculation the more dilutive effect of the participating securities using the treasury stock method or the two-class method. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations | |
Schedule of discontinued operations | Assets Cash and due from banks $ 51,333 Securities: Available for sale, at fair value 86,899 Equity, at fair value 19,841 106,740 Premises and equipment, net 9,607 Operating lease right-of-use assets 2,739 Other assets 50,533 Goodwill 23,988 Other intangible assets, net 3,489 Total assets of discontinued operations $ 248,429 Liabilities Notes payable $ 27,500 Operating lease liabilities 2,783 Other liabilities 110,391 Total liabilities of discontinued operations $ 140,674 The following table presents the results of discontinued operations for NLC for the periods indicated. Year Ended December 31, 2020 2019 2018 Interest income: Securities: Taxable $ 1,752 $ 3,611 $ 4,310 Other 71 522 495 Total interest income 1,823 4,133 4,805 Interest expense: Notes payable 775 1,806 1,780 Noninterest income: Net insurance premiums earned 65,077 132,284 136,751 Other 3,051 10,915 5,909 Total noninterest income 68,128 143,199 142,660 Noninterest expense: Employees' compensation and benefits 6,002 11,663 11,474 Occupancy and equipment, net 464 991 1,284 Professional services 18,201 35,528 35,953 Loss and loss adjustment expenses 38,419 68,940 79,347 Other 3,987 10,796 11,863 Total noninterest expense 67,073 127,918 139,921 Income from discontinued operations before income taxes 2,103 17,608 5,764 Gain on disposal of discontinued operations 36,811 — — Income tax expense 518 3,618 823 Income from discontinued operations, net of income taxes $ 38,396 $ 13,990 $ 4,941 |
Schedule of effects of reinsurance on premiums written and earned included within discontinued operations | The effects of reinsurance on premiums written and earned are included within discontinued operations for all periods presented and are summarized as follows (in thousands). Year Ended December 31, 2020 2019 2018 Written Earned Written Earned Written Earned Premiums from direct business $ 63,811 $ 61,384 $ 125,157 $ 126,434 $ 129,611 $ 133,112 Reinsurance assumed 6,396 6,452 13,148 13,041 12,917 12,516 Reinsurance ceded (2,759) (2,759) (7,191) (7,191) (8,749) (8,877) Net premiums $ 67,448 $ 65,077 $ 131,114 $ 132,284 $ 133,779 $ 136,751 |
Schedule of effects of reinsurance on incurred losses included within discontinued operations | The effects of reinsurance on incurred losses and LAE are included within discontinued operations for all periods and are as follows (in thousands). Year Ended December 31, 2020 2019 2018 Losses and LAE incurred $ 38,225 $ 68,130 $ 76,464 Reinsurance recoverables 194 810 2,883 Net loss and LAE incurred $ 38,419 $ 68,940 $ 79,347 |
Schedule of activity in deferred policy acquisition costs included within discontinued operations | A summary of the activity in deferred policy acquisition costs included within discontinued operations for all periods is as follows (in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 15,672 $ 16,633 $ 16,988 Acquisition expenses capitalized 17,642 32,245 34,328 Amortization charged to income (16,967) (33,206) (34,683) Balance, end of year $ 16,347 $ 15,672 $ 16,633 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Acquisition | |
Summary of fair values of the identifiable assets acquired, and liabilities assumed | Cash and due from banks $ 21,756 Securities 60,477 Loans held for investment 326,618 Other assets 25,912 Total identifiable assets acquired 434,763 Deposits 376,393 Short-term borrowings 10,000 Other liabilities 2,996 Total liabilities assumed 389,389 Net identifiable assets acquired 45,374 Goodwill resulting from the acquisition 39,627 Net assets acquired $ 85,001 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Schedule of information regarding financial assets and liabilities measured at fair value on a recurring basis | The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands). Level 1 Level 2 Level 3 Total December 31, 2020 Inputs Inputs Inputs Fair Value Trading securities $ 45,390 $ 648,865 $ — $ 694,255 Available for sale securities — 1,462,205 — 1,462,205 Equity securities 140 — — 140 Loans held for sale — 2,449,588 71,816 2,521,404 Derivative assets — 126,898 — 126,898 MSR asset — — 143,742 143,742 Securities sold, not yet purchased 54,494 25,295 — 79,789 Derivative liabilities — 74,598 — 74,598 Level 1 Level 2 Level 3 Total December 31, 2019 Inputs Inputs Inputs Fair Value Trading securities $ — $ 689,576 $ — $ 689,576 Available for sale securities — 911,493 — 911,493 Equity securities 166 — — 166 Loans held for sale — 1,868,518 67,195 1,935,713 Derivative assets — 33,129 — 33,129 MSR asset — — 55,504 55,504 Securities sold, not yet purchased 29,080 14,737 — 43,817 Derivative liabilities — 17,140 — 17,140 |
Rollforward for financial instruments measured at fair value using Level 3 inputs | The following table includes a rollforward for those financial instruments measured at fair value using Level 3 inputs (in thousands). Total Gains or Losses (Realized or Unrealized) Balance at Included in Other Beginning of Purchases/ Sales/ Transfers into Included in Comprehensive Balance at Year Additions Reductions Level 3 Net Income Income (Loss) End of Year Year ended December 31, 2020 Loans held for sale $ 67,195 $ 61,410 $ (57,682) $ 10,323 $ (9,430) $ — $ 71,816 MSR asset 55,504 162,914 (36,750) — (37,926) — 143,742 Total $ 122,699 $ 224,324 $ (94,432) $ 10,323 $ (47,356) $ — $ 215,558 Year ended December 31, 2019 Loans held for sale $ 50,464 $ 60,475 $ (34,849) $ 1,136 $ (10,031) $ — $ 67,195 MSR asset 66,102 13,755 — — (24,353) — 55,504 Total $ 116,566 $ 74,230 $ (34,849) $ 1,136 $ (34,384) $ — $ 122,699 Year ended December 31, 2018 Loans held for sale $ 36,972 $ 61,573 $ (41,801) $ — $ (6,280) $ — $ 50,464 MSR asset 54,714 25,028 (9,303) — (4,337) — 66,102 Total $ 91,686 $ 86,601 $ (51,104) $ — $ (10,617) $ — $ 116,566 |
Schedule of significant unobservable inputs used in the fair value measurements | For Level 3 financial instruments measured at fair value on a recurring basis at December 31, 2020 and 2019, the significant unobservable inputs used in the fair value measurements were as follows. Range (Weighted-Average) December 31, Financial instrument Valuation Technique Unobservable Inputs 2020 2019 Loans Market comparable Projected price 91 - 94 % ( 94 %) 92 - 96 % ( 95 %) MSR asset Discounted cash flows Constant prepayment rate 12.15 % 13.16 % Discount rate 14.60 % 11.14 % |
Schedule of changes in fair value for instruments reported at fair value under the Fair Value Option | The following table presents those changes in fair value of instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Other Total Other Total Other Total Net Noninterest Changes in Net Noninterest Changes in Net Noninterest Changes in Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Gains (Losses) Income Fair Value Loans held for sale $ 52,296 $ — $ 52,296 $ 12,775 $ — $ 12,775 $ (8,063) $ — $ (8,063) MSR asset (37,926) — (37,926) (24,353) — (24,353) (4,337) — (4,337) |
Schedule of carrying values and estimated fair values of financial instruments | The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands). Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2020 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 1,062,946 $ 1,062,946 $ — $ — $ 1,062,946 Assets segregated for regulatory purposes 290,357 290,357 — — 290,357 Securities purchased under agreements to resell 80,319 — 80,319 — 80,319 Held to maturity securities 311,944 — 326,671 — 326,671 Loans held for sale 266,982 — 266,982 — 266,982 Loans held for investment, net 7,544,097 — 437,007 7,351,411 7,788,418 Broker-dealer and clearing organization receivables 1,404,727 — 1,404,727 — 1,404,727 Other assets 74,881 — 73,111 1,770 74,881 Financial liabilities: Deposits 11,242,319 — 11,256,629 — 11,256,629 Broker-dealer and clearing organization payables 1,368,373 — 1,368,373 — 1,368,373 Short-term borrowings 695,798 — 695,798 — 695,798 Debt 448,999 — 448,999 — 448,999 Other liabilities 6,133 — 6,133 — 6,133 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2019 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 434,020 $ 434,020 $ — $ — $ 434,020 Assets segregated for regulatory purposes 157,436 157,436 — — 157,436 Securities purchased under agreements to resell 59,031 — 59,031 — 59,031 Held to maturity securities 386,326 — 388,930 — 388,930 Loans held for sale 170,648 — 170,648 — 170,648 Loans held for investment, net 7,320,264 — 576,527 6,990,706 7,567,233 Broker-dealer and clearing organization receivables 1,780,280 — 1,780,280 — 1,780,280 Other assets 71,040 — 69,580 1,460 71,040 Financial liabilities: Deposits 9,032,214 — 9,032,496 — 9,032,496 Broker-dealer and clearing organization payables 1,605,518 — 1,605,518 — 1,605,518 Short-term borrowings 1,424,010 — 1,424,010 — 1,424,010 Debt 323,281 — 323,281 — 323,281 Other liabilities 8,340 — 8,340 — 8,340 |
Schedule of adjustments to the carrying value of these investments | The following table presents the adjustments to the carrying value of these investments (in thousands). Year Ended December 31, 2020 2019 Balance, beginning of year $ 19,771 $ 20,376 Additional investments 500 — Upward adjustments 4,188 403 Impairments and downward adjustments (1,615) (1,008) Dispositions — — Balance, end of year $ 22,844 $ 19,771 |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Securities | |
Summary of trading securities | The fair value of trading securities are summarized as follows (in thousands). December 31, 2020 2019 U.S. Treasury securities $ 40,491 $ — U.S. government agencies: Bonds 40 24,680 Residential mortgage-backed securities 336,081 331,601 Commercial mortgage-backed securities 876 2,145 Collateralized mortgage obligations 69,172 191,154 Corporate debt securities 62,481 36,973 States and political subdivisions 171,573 93,117 Unit investment trusts — 3,468 Private-label securitized product 8,571 2,992 Other 4,970 3,446 Totals $ 694,255 $ 689,576 |
Summary of amortized cost and fair value of available for sale securities | The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). Available for Sale Amortized Unrealized Unrealized December 31, 2020 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 82,036 $ 1,095 $ (325) $ 82,806 Residential mortgage-backed securities 624,863 17,194 (446) 641,611 Commercial mortgage-backed securities 124,929 768 (1,159) 124,538 Collateralized mortgage obligations 559,362 6,916 (370) 565,908 States and political subdivisions 44,729 2,613 — 47,342 Totals $ 1,435,919 $ 28,586 $ (2,300) $ 1,462,205 Available for Sale Amortized Unrealized Unrealized December 31, 2019 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 84,590 $ 1,049 $ (64) $ 85,575 Residential mortgage-backed securities 430,514 6,662 (147) 437,029 Commercial mortgage-backed securities 11,488 543 — 12,031 Collateralized mortgage obligations 333,256 3,175 (815) 335,616 States and political subdivisions 39,969 1,273 — 41,242 Totals $ 899,817 $ 12,702 $ (1,026) $ 911,493 |
Summary of amortized cost and fair value of held to maturity securities | Held to Maturity Amortized Unrealized Unrealized December 31, 2020 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 13,547 $ 708 $ — $ 14,255 Commercial mortgage-backed securities 152,820 9,205 — 162,025 Collateralized mortgage obligations 74,932 2,036 — 76,968 States and political subdivisions 70,645 2,778 — 73,423 Totals $ 311,944 $ 14,727 $ — $ 326,671 Held to Maturity Amortized Unrealized Unrealized December 31, 2019 Cost Gains Losses Fair Value U.S. government agencies: Bonds $ 24,020 $ 10 $ (35) $ 23,995 Residential mortgage-backed securities 17,776 295 — 18,071 Commercial mortgage-backed securities 161,624 2,810 (655) 163,779 Collateralized mortgage obligations 113,894 226 (904) 113,216 States and political subdivisions 69,012 1,013 (156) 69,869 Totals $ 386,326 $ 4,354 $ (1,750) $ 388,930 |
Schedule of information regarding available for sale securities that were in an unrealized loss position | Information regarding available for sale, held to maturity and equity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). December 31, 2020 December 31, 2019 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. government agencies: Bonds: Unrealized loss for less than twelve months 8 $ 60,298 $ 325 2 $ 24,937 $ 64 Unrealized loss for twelve months or longer — — — — — — 8 60,298 325 2 24,937 64 Residential mortgage-backed securities: Unrealized loss for less than twelve months 15 86,287 429 37 36,187 87 Unrealized loss for twelve months or longer — — — 2 13,683 58 15 86,287 429 39 49,870 145 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 10 105,386 1,176 1 9,967 2 Unrealized loss for twelve months or longer — — — — — — 10 105,386 1,176 1 9,967 2 Collateralized mortgage obligations: Unrealized loss for less than twelve months 10 101,990 324 15 94,545 446 Unrealized loss for twelve months or longer 5 13,611 46 13 46,217 369 15 115,601 370 28 140,762 815 States and political subdivisions: Unrealized loss for less than twelve months — — — — — — Unrealized loss for twelve months or longer — — — 1 487 — — — — 1 487 — Total available for sale: Unrealized loss for less than twelve months 43 353,961 2,254 55 165,636 599 Unrealized loss for twelve months or longer 5 13,611 46 16 60,387 427 48 $ 367,572 $ 2,300 71 $ 226,023 $ 1,026 |
Schedule of held-to-maturity and equity securities continuous unrealized loss position | December 31, 2020 December 31, 2019 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Held to Maturity U.S. government agencies: Bonds: Unrealized loss for less than twelve months — $ — $ — 2 $ 9,665 $ 35 Unrealized loss for twelve months or longer — — — — — — — — — 2 9,665 35 Commercial mortgage-backed securities: Unrealized loss for less than twelve months — — — 8 44,610 656 Unrealized loss for twelve months or longer — — — — — — — — — 8 44,610 656 Collateralized mortgage obligations: Unrealized loss for less than twelve months — — — 4 23,904 287 Unrealized loss for twelve months or longer — — — 8 59,560 617 — — — 12 83,464 904 States and political subdivisions: Unrealized loss for less than twelve months 2 578 — 38 15,996 124 Unrealized loss for twelve months or longer — — — 4 1,099 31 2 578 — 42 17,095 155 Total held to maturity: Unrealized loss for less than twelve months 2 578 — 52 94,175 1,102 Unrealized loss for twelve months or longer — — — 12 60,659 648 2 $ 578 $ — 64 $ 154,834 $ 1,750 |
Schedule of amortized cost and fair value of securities, excluding trading and equity available for sale securities, by contractual maturity | The amortized cost and fair value of securities, excluding trading and equity securities, at December 31, 2020 are shown by contractual maturity below (in thousands). Available for Sale Held to Maturity Amortized Amortized Cost Fair Value Cost Fair Value Due in one year or less $ 4,999 $ 5,072 $ 645 $ 646 Due after one year through five years 61,182 62,636 1,225 1,273 Due after five years through ten years 17,537 18,179 8,205 8,525 Due after ten years 43,047 44,261 60,570 62,979 126,765 130,148 70,645 73,423 Residential mortgage-backed securities 624,863 641,611 13,547 14,255 Collateralized mortgage obligations 559,362 565,908 74,932 76,968 Commercial mortgage-backed securities 124,929 124,538 152,820 162,025 $ 1,435,919 $ 1,462,205 $ 311,944 $ 326,671 |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Loans Held for Investment | |
Summary of loans held for investment by portfolio segment | Loans held for investment summarized by portfolio segment are as follows (in thousands). December 31, 2020 2019 Commercial real estate $ 3,133,903 $ 3,000,523 Commercial and industrial (1) 2,627,774 2,025,720 Construction and land development 828,852 940,564 1-4 family residential 629,938 791,020 Consumer 35,667 47,046 Broker-dealer (2) 437,007 576,527 7,693,141 7,381,400 Allowance for credit losses (149,044) (61,136) Total loans held for investment, net of allowance $ 7,544,097 $ 7,320,264 (1) Included loans totaling $486.7 million at December 31, 2020 funded through the Paycheck Protection Program. (2) Primarily represents margin loans to customers and correspondents associated with broker-dealer segment operations. |
Summary of non-accrual loans by portfolio segment | The following table provides details associated with non-accrual loans, excluding those classified as held for sale (in thousands). Non-accrual Loans Interest Income December 31, 2020 Recognized (1) With With No December 31, Year Ended Allowance Allowance Total 2019 December 31, 2020 Commercial real estate: Non-owner occupied $ 1,213 $ 445 $ 1,658 $ 3,813 $ 1,364 Owner occupied 3,473 6,002 9,475 3,495 295 Commercial and industrial 10,821 23,228 34,049 15,262 2,362 Construction and land development 102 405 507 1,316 110 1-4 family residential 4,726 16,651 21,377 7,382 1,568 Consumer 28 — 28 26 122 Broker-dealer — — — — — $ 20,363 $ 46,731 $ 67,094 $ 31,294 $ 5,821 (1) |
Schedule of information regarding TDRs granted | Information regarding TDRs granted during 2020 and 2019 that do not qualify for the CARES Act exemption is shown in the following table (dollars in thousands). Year Ended December 31, 2020 Year Ended December 31, 2019 Number of Balance at Balance at Number of Balance at Balance at Loans Extension End of Period Loans Extension End of Period Commercial real estate: Non-owner occupied — $ — $ — — $ — $ — Owner occupied — — — — — — Commercial and industrial 3 9,464 4,116 4 9,618 8,566 Construction and land development — — — — — — 1-4 family residential 5 438 438 — — — Consumer — — — — — — Broker-dealer — — — — — — 8 $ 9,902 $ 4,554 4 $ 9,618 $ 8,566 |
Schedule of analysis of the aging of the entity's loan portfolio | An analysis of the aging of the Company’s loan portfolio is shown in the following tables (in thousands). Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current Total Past Due December 31, 2020 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 1,919 $ — $ 199 $ 2,118 $ 1,786,193 $ 1,788,311 $ — Owner occupied 195 522 8,328 9,045 1,336,547 1,345,592 — Commercial and industrial 3,114 407 7,318 10,839 2,616,935 2,627,774 6 Construction and land development 19 — — 19 828,833 828,852 — 1-4 family residential 8,110 3,040 12,420 23,570 606,368 629,938 — Consumer 172 123 26 321 35,346 35,667 — Broker-dealer — — — — 437,007 437,007 — $ 13,529 $ 4,092 $ 28,291 $ 45,912 $ 7,647,229 $ 7,693,141 $ 6 Accruing Loans Loans Past Due Loans Past Due Loans Past Due Total Current Total Past Due December 31, 2019 30-59 Days 60-89 Days 90 Days or More Past Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 4,062 $ — $ 2,790 $ 6,852 $ 1,702,500 $ 1,709,352 $ — Owner occupied 1,813 880 3,265 5,958 1,285,213 1,291,171 — Commercial and industrial 5,967 1,735 3,395 11,097 2,014,623 2,025,720 3 Construction and land development 7,580 1,827 — 9,407 931,157 940,564 — 1-4 family residential 12,058 3,442 6,520 22,020 769,000 791,020 — Consumer 455 34 — 489 46,557 47,046 — Broker-dealer — — — — 576,527 576,527 — $ 31,935 $ 7,918 $ 15,970 $ 55,823 $ 7,325,577 $ 7,381,400 $ 3 |
Schedule of internal risk grades of loans by class | The following table presents loans held for investment grouped by asset class and credit quality indicator, segregated by year of origination or renewal (in thousands). Amortized Cost Basis by Origination Year 2015 and December 31, 2020 2020 2019 2018 2017 2016 Prior Revolving Total Commercial real estate: non-owner occupied Internal Grade 1-3 (Pass low risk) $ 21,135 $ 22,913 $ 3,171 $ 2,735 $ 12,896 $ 15,263 $ 1 $ 78,114 Internal Grade 4-7 (Pass normal risk) 245,833 138,836 83,951 88,119 108,371 64,200 47,920 777,230 Internal Grade 8-11 (Pass high risk and watch) 227,440 133,246 122,022 99,473 108,536 64,031 488 755,236 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 34,020 16,139 29,166 29,810 33,353 33,467 118 176,073 Internal Grade 14 (Substandard non-accrual) — — — — — 1,658 — 1,658 Commercial real estate: owner occupied Internal Grade 1-3 (Pass low risk) $ 60,809 $ 21,011 $ 12,712 $ 44,163 $ 21,567 $ 37,688 $ 1 $ 197,951 Internal Grade 4-7 (Pass normal risk) 164,939 169,582 131,821 56,801 53,811 75,372 39,868 692,194 Internal Grade 8-11 (Pass high risk and watch) 118,328 80,375 49,601 23,588 23,330 30,249 1,291 326,762 Internal Grade 12 (Special mention) 365 — 3,691 — — 527 — 4,583 Internal Grade 13 (Substandard accrual) 8,372 5,620 69,617 10,315 8,663 12,040 — 114,627 Internal Grade 14 (Substandard non-accrual) 506 1,259 441 5,345 1,045 879 — 9,475 Commercial and industrial Internal Grade 1-3 (Pass low risk) $ 30,754 $ 27,144 $ 7,149 $ 5,486 $ 3,587 $ 335 $ 21,651 $ 96,106 Internal Grade 4-7 (Pass normal risk) 179,394 54,423 53,908 29,778 24,179 10,945 395,320 747,947 Internal Grade 8-11 (Pass high risk and watch) 95,835 62,411 20,162 13,459 13,885 2,144 197,273 405,169 Internal Grade 12 (Special mention) 757 14 3,723 — 152 — 2,093 6,739 Internal Grade 13 (Substandard accrual) 9,863 3,689 13,788 5,531 5,759 253 19,360 58,243 Internal Grade 14 (Substandard non-accrual) 25,107 5,084 2,021 315 16 98 1,408 34,049 Construction and land development Internal Grade 1-3 (Pass low risk) $ 15,764 $ 2,710 $ 4,176 $ 264 $ 4,129 $ 331 $ 624 $ 27,998 Internal Grade 4-7 (Pass normal risk) 202,624 103,864 63,135 3,210 2,596 3,142 28,387 406,958 Internal Grade 8-11 (Pass high risk and watch) 194,432 97,206 47,102 9,659 3,552 544 7,951 360,446 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 8,684 29 — 5,385 — 65 — 14,163 Internal Grade 14 (Substandard non-accrual) — 405 — — — 102 — 507 Construction and land development - individuals FICO less than 620 $ — $ — $ — $ — $ — $ — $ — $ — FICO between 620 and 720 557 — 1,253 — — — — 1,810 FICO greater than 720 13,207 — 2,539 — — — — 15,746 Substandard non-accrual — — — — — — — — Other (1) 1,224 — — — — — — 1,224 1-4 family residential FICO less than 620 $ 1,109 $ 819 $ 3,674 $ 56 $ 883 $ 32,077 $ 318 $ 38,936 FICO between 620 and 720 17,269 18,461 9,545 8,714 8,171 41,625 1,289 105,074 FICO greater than 720 125,094 80,688 65,975 37,943 29,171 70,815 5,313 414,999 Substandard non-accrual — — — 96 714 20,567 — 21,377 Other (1) 27,407 10,085 5,998 1,899 920 2,529 714 49,552 Consumer FICO less than 620 $ 955 $ 1,235 $ 106 $ 128 $ 43 $ 22 $ 334 $ 2,823 FICO between 620 and 720 5,194 2,627 478 536 118 79 2,157 11,189 FICO greater than 720 6,849 1,674 2,952 292 60 34 3,054 14,915 Substandard non-accrual — — — 27 — 1 — 28 Other (1) 5,050 1,141 129 43 36 — 313 6,712 Total loans with credit quality measures $ 1,848,876 $ 1,062,690 $ 814,006 $ 483,170 $ 469,543 $ 521,082 $ 777,246 $ 5,976,613 Commercial and industrial (mortgage warehouse lending) $ 792,806 Commercial and industrial (Paycheck Protection Program loans) $ 486,715 Broker-Dealer (margin loans and correspondent receivables) $ 437,007 Total loans held for investment $ 7,693,141 (1) Loans classified in this category were assigned a FICO score based on various factors specific to the borrower for credit modeling purposes. |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Allowance for Credit Losses | |
Schedule of changes in the allowance for loan losses by portfolio segment | Changes in the allowance for credit losses for loans held for investments, distributed by portfolio segment, are shown below (in thousands). Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2020 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 31,595 $ 8,073 $ 73,865 $ (4,517) $ 613 $ 109,629 Commercial and industrial 17,964 3,193 22,870 (18,158) 1,834 27,703 Construction and land development 4,878 577 1,222 (2) 2 6,677 1-4 family residential 6,386 (29) (1,717) (748) 54 3,946 Consumer 265 748 86 (615) 392 876 Broker-dealer 48 — 165 — — 213 Total $ 61,136 $ 12,562 $ 96,491 $ (24,040) $ 2,895 $ 149,044 Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2019 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 27,100 $ — $ 5,649 $ (1,160) $ 6 $ 31,595 Commercial and industrial 21,980 — (921) (5,924) 2,829 17,964 Construction and land development 6,061 — (1,183) — — 4,878 1-4 family residential 3,956 — 3,276 (907) 61 6,386 Consumer 267 — 459 (498) 37 265 Broker-dealer 122 — (74) — — 48 Total $ 59,486 $ — $ 7,206 $ (8,489) $ 2,933 $ 61,136 Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2018 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 27,232 $ — $ 668 $ (800) $ — $ 27,100 Commercial and industrial 23,698 — 6,750 (12,741) 4,273 21,980 Construction and land development 7,847 — (1,792) — 6 6,061 1-4 family residential 4,245 — (292) (143) 146 3,956 Consumer 311 — (15) (93) 64 267 Broker-dealer 353 — (231) — — 122 Total $ 63,686 $ — $ 5,088 $ (13,777) $ 4,489 $ 59,486 |
Schedule of changes in the allowance for credit losses for loans with off-balance sheet credit exposures | Changes in the allowance for credit losses for loans with off-balance sheet credit exposures are shown below (in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 2,075 $ 2,366 $ 1,932 Transition adjustment CECL accounting standard 3,837 — — Other noninterest expense 2,476 (291) 434 Balance, end of year $ 8,388 $ 2,075 $ 2,366 |
Cash and Due from Banks (Tables
Cash and Due from Banks (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Due from Banks | |
Schedule of cash and due from banks | Cash and due from banks consisted of the following (in thousands). December 31, 2020 2019 Cash on hand $ 45,207 $ 39,590 Clearings and collection items 82,396 129,055 Deposits at Federal Reserve Bank 874,998 232,019 Deposits at Federal Home Loan Bank 1,607 1,458 Deposits in FDIC-insured institutions 58,352 31,504 $ 1,062,560 $ 433,626 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Premises and Equipment | |
Summary of the components of premises and equipment | The components of premises and equipment are summarized as follows (in thousands). December 31, 2020 2019 Land and premises $ 125,701 $ 130,312 Furniture and equipment 257,810 265,602 383,511 395,914 Less accumulated depreciation and amortization (171,916) (185,539) $ 211,595 $ 210,375 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |
Schedule of carrying value of intangible assets subject to amortization | The carrying value of intangible assets subject to amortization was as follows (in thousands). Estimated Gross Net Useful Life Intangible Accumulated Intangible December 31, 2020 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (40,997) $ 7,933 Trademarks and trade names 20 16,500 (7,563) 8,937 Noncompete agreements 4 4,310 (4,310) — Customer contracts and relationships 12 - 14 15,300 (11,806) 3,494 $ 85,040 $ (64,676) $ 20,364 Estimated Gross Net Useful Life Intangible Accumulated Intangible December 31, 2019 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (36,576) $ 12,354 Trademarks and trade names 20 16,500 (6,812) 9,688 Noncompete agreements 4 4,310 (4,310) — Customer contracts and relationships 12 - 14 15,300 (10,676) 4,624 $ 85,040 $ (58,374) $ 26,666 |
Schedule of estimated aggregate future amortization expense for intangible assets | The estimated aggregate future amortization expense for intangible assets at December 31, 2020 is as follows (in thousands). 2021 $ 5,080 2022 3,967 2023 2,860 2024 1,826 2025 1,028 Thereafter 5,603 $ 20,364 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Servicing Rights | |
Schedule of change in fair value of the Company's MSR asset | The following tables present the changes in fair value of the Company’s MSR asset, and other information related to the serviced portfolio (dollars in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 55,504 $ 66,102 $ 54,714 Additions 162,914 13,755 25,028 Sales (36,750) — (9,303) Changes in fair value: Due to changes in model inputs or assumptions (1) (27,261) (16,054) 159 Due to customer payoffs (10,665) (8,299) (4,496) Balance, end of year $ 143,742 $ 55,504 $ 66,102 December 31, 2020 2019 Mortgage loans serviced for others (2) $ 14,643,623 $ 4,948,441 MSR asset as a percentage of serviced mortgage loans 0.98 % 1.12 % (1) Primarily represents normal customer payments, changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates and the refinement of other MSR model assumptions. (2) Represents unpaid principal balance of mortgage loans serviced for others. |
Schedule of key assumptions used in measuring the fair value of the Company's MSR | December 31, 2020 2019 Weighted average constant prepayment rate 12.15 % 13.16 % Weighted average discount rate 14.60 % 11.14 % Weighted average life (in years) 6.3 6.0 |
Schedule of sensitivity analysis of fair value of the Company's MSR to certain key assumptions | A sensitivity analysis of the fair value of the Company’s MSR asset to certain key assumptions is presented in the following table (in thousands). December 31, 2020 2019 Constant prepayment rate: Impact of 10% adverse change $ (5,639) $ (3,072) Impact of 20% adverse change (11,164) (5,943) Discount rate: Impact of 10% adverse change (6,435) (2,094) Impact of 20% adverse change (12,287) (4,028) |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Summary of deposits | Deposits are summarized as follows (in thousands). December 31, 2020 2019 Noninterest-bearing demand $ 3,612,384 $ 2,769,556 Interest-bearing: Demand accounts 2,399,341 1,881,614 Brokered - demand 282,426 — Money market 2,716,878 2,641,116 Brokered - money market 124,243 5,000 Savings 276,327 199,076 Time 1,506,435 1,505,375 Brokered - time 324,285 30,477 $ 11,242,319 $ 9,032,214 |
Summary of scheduled maturities of interest-bearing time deposits | Scheduled maturities of interest-bearing time deposits at December 31, 2020 are as follows (in thousands). 2021 $ 1,600,039 2022 148,404 2023 49,026 2024 22,091 2025 and thereafter 11,160 $ 1,830,720 |
Short-term Borrowings (Tables)
Short-term Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Short-term borrowings | |
Schedule of short-term borrowings | Short-term borrowings are summarized as follows (in thousands). December 31, 2020 2019 Federal funds purchased $ 180,325 $ 81,625 Securities sold under agreements to repurchase 237,856 612,125 Federal Home Loan Bank — 600,000 Short-term bank loans — 111,000 Commercial paper 277,617 19,260 $ 695,798 $ 1,424,010 |
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | |
Short-term borrowings | |
Schedule of short-term borrowings | Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). Year Ended December 31, 2020 2019 2018 Average balance during the year $ 509,577 $ 605,858 $ 701,622 Average interest rate during the year 0.89 % 2.48 % 1.96 % Maximum month-end balance during the year $ 714,507 $ 693,750 $ 849,568 December 31, 2020 2019 Average interest rate at end of year 0.25 % 1.97 % Securities underlying the agreements at end of year: Carrying value $ 237,913 $ 612,515 Estimated fair value $ 262,554 $ 661,023 |
FHLB notes | |
Short-term borrowings | |
Schedule of short-term borrowings | Other information regarding FHLB short-term borrowings is shown in the following tables (dollars in thousands). Year Ended December 31, 2020 2019 2018 Average balance during the year $ 38,634 $ 329,356 $ 214,110 Average interest rate during the year 1.63 % 2.16 % 2.09 % Maximum month-end balance during the year $ 150,000 $ 700,000 $ 675,000 December 31, 2020 2019 Average interest rate at end of year — % 1.56 % |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes Payable | |
Schedule of notes payable | Notes payable consisted of the following (in thousands). December 31, 2020 2019 Senior Notes due April 2025, net of discount of $1,063 and $1,232, respectively $ 148,937 $ 148,768 Subordinated Notes due May 2030, net of discount of $793 49,207 — Subordinated Notes due May 2035, net of discount of $2,392 147,608 — FHLB notes, including premium of $0 and $146 , respectively — 28,848 Ventures Management lines of credit 36,235 78,653 $ 381,987 $ 256,269 |
Scheduled maturities of notes payable | Scheduled maturities for notes payable outstanding at December 31, 2020 are as follows (in thousands). 2021 $ 36,235 2022 — 2023 — 2024 — 2025 150,000 Thereafter 200,000 $ 386,235 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to finance leases is as follows (in thousands). Year Ended December 31, 2020 2019 Finance leases: Premises and equipment $ 7,780 $ 7,780 Accumulated depreciation (4,768) (4,178) Premises and equipment, net $ 3,012 $ 3,602 |
Schedule of components of lease costs | . The components of lease costs, including short-term lease costs, are as follows (in thousands). Year Ended December 31, 2020 2019 Operating lease cost $ 41,903 $ 44,331 Less operating lease and sublease income (1,676) (2,657) Net operating lease cost $ 40,227 $ 41,674 Finance lease cost: Amortization of ROU assets $ 590 $ 590 Interest on lease liabilities 561 596 Total finance lease cost $ 1,151 $ 1,186 |
Schedule of supplemental cash flow information | Supplemental cash flow information related to leases is as follows (in thousands): Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 31,850 $ 37,527 Operating cash flows from finance leases 561 587 Financing cash flows from finance leases 636 603 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 11,723 $ 27,055 Finance leases — — |
Schedule of lease terms and discount rates | Information regarding the lease terms and discount rates of the Company’s leases is as follows. December 31, 2020 December 31, 2019 Weighted Average Weighted Average Remaining Lease Weighted Average Remaining Lease Weighted Average Lease Classification Term (Years) Discount Rate Term (Years) Discount Rate Operating 5.5 4.67 % 5.9 5.29 % Finance 5.6 4.81 % 6.5 4.79 % |
Schedule of maturities of lease liabilities under the Leasing Standard | Maturities of lease liabilities at December 31, 2020, under lease agreements that had commenced as of or subsequent to January 1, 2019, are presented below (in thousands). Operating Leases Finance Leases 2021 $ 36,132 $ 1,212 2022 28,189 1,241 2023 22,645 1,280 2024 15,395 1,163 2025 11,177 886 Thereafter 29,636 1,411 Total minimum lease payments 143,174 7,193 Less amount representing interest (17,724) (2,334) Lease liabilities $ 125,450 $ 4,859 |
Junior Subordinated Debenture_2
Junior Subordinated Debentures and Trust Preferred Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Junior Subordinated Debentures and Trust Preferred Securities | |
Schedule of information regarding the PlainsCapital Debentures | Information regarding the PCC Debentures is shown in the following table (in thousands). Investor Issue Date Amount PCC Statutory Trust I July 31, 2001 $ 18,042 PCC Statutory Trust II March 26, 2003 $ 18,042 PCC Statutory Trust III September 17, 2003 $ 15,464 PCC Statutory Trust IV February 22, 2008 $ 15,464 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of components of the provision for income tax provision (benefit) | The significant components of the income tax provision are as follows (in thousands). Year Ended December 31, 2020 2019 2018 Current: Federal $ 97,338 $ 58,562 $ 18,977 State 19,150 9,215 2,241 116,488 67,777 21,218 Deferred: Federal $ 13,325 $ (2,690) $ 11,153 State 3,258 (1,373) 1,856 16,583 (4,063) 13,009 $ 133,071 $ 63,714 $ 34,227 |
Schedule of reconciliation of the income tax provision (benefit) and the amount that would be computed by applying the statutory Federal income tax rate to income (loss) before income taxes | The income tax provision differs from the amount that would be computed by applying the statutory Federal income tax rate to income before income taxes as a result of the following (in thousands). The applicable corporate federal income tax rates were 21% for all periods presented. Year Ended December 31, 2020 2019 2018 Computed tax at federal statutory rate $ 118,629 $ 59,392 $ 32,572 Tax effect of: Nondeductible expenses 2,304 2,681 1,373 State income taxes 17,702 6,195 3,236 Tax-exempt income, net (1,706) (1,727) (1,432) Minority interest (4,587) (1,614) (900) Other 729 (1,213) (622) $ 133,071 $ 63,714 $ 34,227 |
Schedule of components of the tax effects of temporary differences that give rise to the net deferred tax asset | The components of the tax effects of temporary differences that give rise to the net deferred tax asset included in other assets within the consolidated balance sheets are as follows (in thousands). December 31, 2020 2019 Deferred tax assets: Net operating and built-in loss carryforward $ 5,736 $ 7,823 Purchase accounting adjustment - loans 11,814 15,850 Allowance for credit losses 35,542 14,796 Compensation and benefits 22,513 17,723 Legal and other reserves 7,097 1,272 Foreclosed property 1,913 5,456 Operating lease liabilities 29,348 29,125 Other 9,717 6,475 123,680 98,520 Deferred tax liabilities: Premises and equipment 20,076 10,079 Intangible assets 4,518 6,098 Derivatives 17,688 4,342 Loan servicing 34,868 13,278 Operating lease ROU assets 24,755 26,498 Other 8,015 5,251 109,920 65,546 Net deferred tax asset $ 13,760 $ 32,974 |
Schedule of changes in gross unrecognized tax benefits, which excludes interest and penalties | The aggregate changes in gross unrecognized tax benefits, which excludes interest and penalties, are as follows (in thousands). Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 2,808 $ 3,056 $ 1,574 Increases related to tax positions taken during a prior year 327 317 770 Decreases related to tax positions taken during a prior year — (423) — Increases related to tax positions taken during the current year 1,017 288 712 Decreases related to expiration of the statute of limitations (374) (430) — Balance, end of year $ 3,778 $ 2,808 $ 3,056 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Schedule of rollforward of claims activity for loans put-back to the mortgage origination segment | The following tables provide for a rollforward of claims activity for loans put-back to the mortgage origination segment based upon an alleged breach of a representation or warranty with respect to a loan sold and related indemnification liability reserve activity (in thousands). Representation and Warranty Specific Claims Activity - Origination Loan Balance Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 32,144 $ 33,784 $ 33,702 Claims made 17,429 20,054 22,156 Claims resolved with no payment (7,778) (14,154) (13,169) Repurchases (11,588) (6,170) (8,250) Indemnification payments (122) (1,370) (655) Balance, end of year $ 30,085 $ 32,144 $ 33,784 Indemnification Liability Reserve Activity Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 11,776 $ 10,701 $ 23,472 Additions for new sales 9,991 3,116 3,170 Repurchases (768) (495) (612) Early payment defaults (624) (380) (368) Indemnification payments (1) (39) (352) (13,687) Change in reserves for loans sold in prior years 1,195 (814) (1,274) Balance, end of year $ 21,531 $ 11,776 $ 10,701 December 31, 2020 2019 Reserve for Indemnification Liability: Specific claims $ 961 $ 1,071 Incurred but not reported claims 20,570 10,705 Total $ 21,531 $ 11,776 (1) Indemnification payments in 2018 included $13.5 million related to agreements with the DOJ and HUD in exchange for release of any civil claims related to certain loans originated by PrimeLending. These claims were included in incurred but not reported claims in prior periods. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock-Based Compensation | |
Schedule of nonvested RSU activity | The following table summarizes information about nonvested RSU activity (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value Balance, December 31, 2017 1,318 $ 20.89 Granted 510 $ 24.00 Vested/Released (406) $ 19.92 Forfeited (152) $ 20.97 Balance, December 31, 2018 1,270 $ 22.44 Granted 719 $ 20.02 Vested/Released (496) $ 18.17 Forfeited (56) $ 24.12 Balance, December 31, 2019 1,437 $ 22.64 Granted 777 $ 21.79 Vested/Released (350) $ 26.83 Forfeited (31) $ 22.38 Balance, December 31, 2020 1,833 $ 21.48 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Matters | |
Schedule of comparison of the Plain Capital's and Hilltop's consolidated actual capital amounts and ratios to the regulatory minimum requirements and the Bank's regulatory minimum capital requirements and the Bank's regulatory minimum capital requirements needed to qualify as a well-capitalized institution without giving effect to the final Basel III capital rules adopted by the Federal Reserve Board | The following tables show PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including conservation buffer ratio in effect at the end of the period (dollars in thousands). Minimum Capital Requirements Including To Be Well Actual Conservation Buffer Capitalized Amount Ratio Ratio Ratio December 31, 2020 Tier 1 capital (to average assets): PlainsCapital $ 1,385,842 10.44 % 4.0 % 5.0 % Hilltop 2,111,580 12.64 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,385,842 14.40 % 7.0 % 6.5 % Hilltop 2,046,580 18.97 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,385,842 14.40 % 8.5 % 8.0 % Hilltop 2,111,580 19.57 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,470,364 15.27 % 10.5 % 10.0 % Hilltop 2,409,684 22.34 % 10.5 % N/A Minimum Capital Requirements Including To Be Well Actual Conservation Buffer Capitalized Amount Ratio Ratio Ratio December 31, 2019 Tier 1 capital (to average assets): PlainsCapital $ 1,236,289 11.61 % 4.0 % 5.0 % Hilltop 1,822,970 12.71 % 4.0 % N/A Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 1,236,289 13.45 % 7.0 % 6.5 % Hilltop 1,776,381 16.70 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,236,289 13.45 % 8.5 % 8.0 % Hilltop 1,822,970 17.13 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,299,453 14.13 % 10.5 % 10.0 % Hilltop 1,867,771 17.55 % 10.5 % N/A |
Schedule of reconciliation of equity capital to common equity Tier 1, Tier 1 and total capital (as defined) | A reconciliation of equity capital to common equity Tier 1, Tier 1 and total capital (as defined) is as follows (in thousands). December 31, 2020 December 31, 2019 PlainsCapital Hilltop PlainsCapital Hilltop Total equity capital $ 1,654,249 $ 2,323,939 $ 1,523,549 $ 2,103,039 Add: Net unrealized holding losses (gains) on securities available for sale and held in trust (17,763) (17,763) (9,452) (11,419) CECL transition adjustment 22,905 23,842 — — Deduct: Goodwill and other disallowed intangible assets (273,330) (283,187) (276,249) (313,756) Other (219) (251) (1,559) (1,483) Common equity Tier 1 capital (as defined) 1,385,842 2,046,580 1,236,289 1,776,381 Add: Tier 1 capital Trust preferred securities — 65,000 — 65,000 Deduct: Additional Tier 1 capital deductions — — — (18,411) Tier 1 capital (as defined) 1,385,842 2,111,580 1,236,289 1,822,970 Add: Allowable Tier 2 capital Allowance for credit losses, including unfunded commitments 120,334 134,853 63,164 63,212 Capital instruments — 200,000 — — Deduct: Additional Tier 2 capital deductions (35,812) (36,749) — (18,411) Total capital (as defined) $ 1,470,364 $ 2,409,684 $ 1,299,453 $ 1,867,771 |
Schedule of net capital position | At December 31, 2020, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). Momentum Hilltop Independent Securities Network Net capital $ 291,228 $ 3,220 Less: required net capital 7,045 250 Excess net capital $ 284,183 $ 2,970 Net capital as a percentage of aggregate debit items 82.7 % Net capital in excess of 5% aggregate debit items $ 273,616 |
Other Noninterest Income and _2
Other Noninterest Income and Expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Noninterest Income and Expense | |
Schedule of components of other noninterest income and expense | The following table shows the components of other noninterest income and expense (in thousands). Year Ended December 31, 2020 2019 2018 Other noninterest income: Net gains from trading securities portfolio $ 121,983 $ 20,521 $ 6,197 Net gains from Hilltop Broker-Dealer structured product and derivative activities 81,111 129,571 41,543 Service charges on depositor accounts 14,845 15,170 14,484 Trust fees 9,804 10,255 9,807 Other 15,862 10,833 18,365 $ 243,605 $ 186,350 $ 90,396 Other noninterest expense: Software and information technology $ 56,872 $ 50,751 $ 52,882 Mortgage origination and servicing 27,808 19,892 19,705 Brokerage commissions and fees 24,113 20,039 20,674 Unreimbursed loan closing costs 21,696 16,784 16,798 Business development 10,190 12,940 15,853 Amortization of intangible assets 6,301 7,567 8,026 Travel, meals and entertainment 4,804 12,160 11,968 Funding fees 4,461 5,393 5,414 Office supplies 3,953 4,809 5,788 Other 64,560 43,051 55,284 $ 224,758 $ 193,386 $ 212,392 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Financial Instruments | |
Schedule of changes in fair value of derivatives | Changes in the fair value of derivatives are presented in the following table (in thousands). Year Ended December 31, 2020 2019 2018 Increase (decrease) in fair value of derivatives during period: PrimeLending $ 33,714 $ 8,550 $ (12,788) Hilltop Broker-Dealers 3,969 (3,085) (381) Bank (7) (148) 30 |
Schedule of derivative positions | Derivative positions are presented in the following table (in thousands). December 31, 2020 December 31, 2019 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments (not designated as hedges): IRLCs $ 2,470,013 $ 76,048 $ 914,526 $ 18,222 Customer-based written options — — 31,200 — Customer-based purchased options — — 31,200 — Commitments to purchase MBSs 2,478,041 22,311 3,346,946 3,321 Commitments to sell MBSs 6,141,079 (40,621) 5,988,198 (5,904) Interest rate swaps 43,786 (2,196) 15,012 (178) U.S. Treasury bond futures and options (1) 225,400 — 283,500 — Eurodollar futures (1) — — 934,000 — Derivative instruments (designated as hedges): Interest rate swaps designated as cash flow hedges $ 105,000 $ (3,112) $ 50,000 $ 528 Interest rate swaps designated as fair value hedges (2) 60,618 (130) — — (1) Changes in the fair value of these contracts are settled daily with the respective counterparties of PrimeLending and the Hilltop Broker-Dealers. (2) The Company designated $60.6 million as the hedged amount (from a closed portfolio of prepayable available for sale securities with a carrying value of $60.7 million as of December 31, 2020) in a last-of-layer hedging relationship, which commenced in the fourth quarter of 2020. The cumulative basis adjustment included in the carrying value of the hedged items totaled $0.1 million. |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Offsetting | |
Schedule of the assets subject to an enforceable master netting arrangement or repurchase agreements | The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Assets Cash of Recognized Offset in the Presented in the Financial Collateral Net Assets Balance Sheet Balance Sheet Instruments Pledged Amount December 31, 2020 Securities borrowed: Institutional counterparties $ 1,338,855 $ — $ 1,338,855 $ (1,273,955) $ — $ 64,900 Reverse repurchase agreements: Institutional counterparties 80,319 — 80,319 (79,925) — 394 Forward MBS derivatives: Institutional counterparties 22,311 — 22,311 (22,311) — — $ 1,441,485 $ — $ 1,441,485 $ (1,376,191) $ — $ 65,294 December 31, 2019 Securities borrowed: Institutional counterparties $ 1,634,782 $ — $ 1,634,782 $ (1,586,820) $ — $ 47,962 Reverse repurchase agreements: Institutional counterparties 59,031 — 59,031 (58,619) — 412 Forward MBS derivatives: Institutional counterparties 3,640 — 3,640 (3,640) — — $ 1,697,453 $ — $ 1,697,453 $ (1,649,079) $ — $ 48,374 |
Schedule of the liabilities subject to an enforceable master netting arrangement or repurchase agreements | Gross Amounts Not Offset in Net Amounts the Balance Sheet Gross Amounts Gross Amounts of Liabilities Cash of Recognized Offset in the Presented in the Financial Collateral Net Liabilities Balance Sheet Balance Sheet Instruments Pledged Amount December 31, 2020 Securities loaned: Institutional counterparties $ 1,245,066 $ — $ 1,245,066 $ (1,179,090) $ — $ 65,976 Interest rate swaps: Institutional counterparties 2,196 — 2,196 (2,123) — 73 Repurchase agreements: Institutional counterparties 237,856 — 237,856 (237,856) — — Forward MBS derivatives: Institutional counterparties 40,741 (120) 40,621 (12,670) — 27,951 $ 1,525,859 $ (120) $ 1,525,739 $ (1,431,739) $ — $ 94,000 December 31, 2019 Securities loaned: Institutional counterparties $ 1,555,964 $ — $ 1,555,964 $ (1,509,933) $ — $ 46,031 Interest rate swaps: Institutional counterparties 178 — 178 (112) — 66 Repurchase agreements: Institutional counterparties 586,651 — 586,651 (586,651) — — Customer counterparties 25,474 — 25,474 (25,474) — — Forward MBS derivatives: Institutional counterparties 6,890 (667) 6,223 (2,384) — 3,839 $ 2,175,157 $ (667) $ 2,174,490 $ (2,124,554) $ — $ 49,936 |
Schedule of contractual maturities of repurchase agreements and secured borrowing transactions | The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both December 31, 2020 and 2019. Remaining Contractual Maturities Overnight and Greater Than December 31, 2020 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities $ 110,831 $ — $ 127,025 $ — $ 237,856 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,244,953 — — — 1,244,953 Total $ 1,355,897 $ — $ 127,025 $ — $ 1,482,922 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,482,922 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2019 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: U.S. Treasury and agency securities $ 45,950 $ — $ — $ — $ 45,950 Asset-backed securities 257,396 12,892 295,887 — 566,175 Securities lending transactions: Corporate securities 120 — — — 120 Equity securities 1,555,844 — — — 1,555,844 Total $ 1,859,310 $ 12,892 $ 295,887 $ — $ 2,168,089 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 2,168,089 Amount related to agreements not included in offsetting disclosure above $ — |
Broker-Dealer and Clearing Or_2
Broker-Dealer and Clearing Organization Receivables and Payables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Broker-Dealer and Clearing Organization Receivables and Payables | |
Schedule of broker-dealer and clearing organization receivables and payables | Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). December 31, 2020 2019 Receivables: Securities borrowed $ 1,338,855 $ 1,634,782 Securities failed to deliver 58,244 18,726 Trades in process of settlement — 104,922 Other 7,628 21,850 $ 1,404,727 $ 1,780,280 Payables: Securities loaned $ 1,245,066 $ 1,555,964 Correspondents 33,547 37,036 Securities failed to receive 61,589 8,568 Trades in process of settlement 21,765 — Other 6,406 3,950 $ 1,368,373 $ 1,605,518 |
Segment and Related Informati_2
Segment and Related Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment and Related Information | |
Schedule of information about the segment revenues, operating results, goodwill, and assets of entity's reportable segments | The following tables present certain information about continuing operations reportable business segment revenues, operating results, goodwill and assets (in thousands). Mortgage All Other and Continuing Year Ended December 31, 2020 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 390,871 $ 39,912 $ (10,489) $ (14,192) $ 18,064 $ 424,166 Provision for credit losses 96,326 165 — — — 96,491 Noninterest income 41,376 491,355 1,172,450 3,945 (18,646) 1,690,480 Noninterest expense 232,447 415,463 753,917 53,040 (1,064) 1,453,803 Income (loss) from continuing operations before taxes $ 103,474 $ 115,639 $ 408,044 $ (63,287) $ 482 $ 564,352 Mortgage All Other and Continuing Year Ended December 31, 2019 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 379,258 $ 51,308 $ (6,273) $ (5,541) $ 20,227 $ 438,979 Provision for (reversal of) credit losses 7,280 (74) — — — 7,206 Noninterest income 41,753 404,411 634,992 2,104 (20,443) 1,062,817 Noninterest expense 231,524 366,031 563,998 50,968 (632) 1,211,889 Income (loss) from continuing operations before taxes $ 182,207 $ 89,762 $ 64,721 $ (54,405) $ 416 $ 282,701 Mortgage All Other and Continuing Year Ended December 31, 2018 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 370,732 $ 50,878 $ 1,485 $ (9,176) $ 19,380 $ 433,299 Provision for (reversal of) credit losses 5,319 (231) — — — 5,088 Noninterest income 43,588 301,714 551,860 4,798 (21,830) 880,130 Noninterest expense 256,577 320,241 540,474 36,628 (592) 1,153,328 Income (loss) from continuing operations before taxes $ 152,424 $ 32,582 $ 12,871 $ (41,006) $ (1,858) $ 155,013 Mortgage All Other and Continuing Banking Broker-Dealer Origination Corporate Eliminations Operations December 31, 2020 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 13,338,930 $ 3,196,346 $ 3,285,005 $ 2,823,374 $ (5,699,391) $ 16,944,264 December 31, 2019 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets in continuing operations $ 11,147,344 $ 3,457,068 $ 2,357,415 $ 2,393,604 $ (4,431,412) $ 14,924,019 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings per Common Share | |
Schedule of the computation of basic and diluted earnings per common share | The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data). Year Ended December 31, 2020 2019 2018 Basic earnings per share: Income from continuing operations $ 409,440 $ 211,301 $ 116,500 Income from discontinued operations 38,396 13,990 4,941 Income attributable to Hilltop $ 447,836 $ 225,291 $ 121,441 Weighted average shares outstanding - basic 89,280 92,345 94,969 Basic earnings per common share: Income from continuing operations $ 4.59 $ 2.29 $ 1.23 Income from discontinued operations 0.43 0.15 0.05 $ 5.02 $ 2.44 $ 1.28 Diluted earnings per share: Income from continuing operations $ 409,440 $ 211,301 $ 116,500 Income from discontinued operations 38,396 13,990 4,941 Income attributable to Hilltop $ 447,836 $ 225,291 $ 121,441 Weighted average shares outstanding - basic 89,280 92,345 94,969 Effect of potentially dilutive securities 24 49 98 Weighted average shares outstanding - diluted 89,304 92,394 95,067 Diluted earnings per common share: Income from continuing operations $ 4.58 $ 2.29 $ 1.23 Income from discontinued operations 0.43 0.15 0.05 $ 5.01 $ 2.44 $ 1.28 |
Financial Statements of Parent
Financial Statements of Parent (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Financial Statements of Parent | |
Schedule of Condensed Combined Statements of Operations and Comprehensive Income (Loss) | The following tables present the condensed combined financial statements of the Company’s bank holding company entities, Hilltop and PCC. The tables also include the corporate activities associated with Hilltop Opportunity Partners LLC and the Hilltop Plaza Entities (in thousands). Investments in subsidiaries are determined using the equity method of accounting. Condensed Combined Statements of Operations and Comprehensive Income Year Ended December 31, 2020 2019 2018 Dividends from bank subsidiaries $ 249,771 $ 143,000 $ 42,000 Dividends from nonbank subsidiaries 56,150 36,950 37,500 Investment income 4,102 5,933 3,089 Interest expense 18,294 11,474 12,265 Other income 45,887 2,221 4,893 General and administrative expense 58,130 50,968 36,628 Income before income taxes and equity in undistributed earnings of subsidiaries activity 279,486 125,662 38,589 Income tax benefit (13,897) (12,706) (7,767) Equity in undistributed earnings of subsidiaries 176,294 94,609 79,371 Net income $ 469,677 $ 232,977 $ 125,727 Other comprehensive income (loss), net 6,344 20,046 (5,656) Comprehensive income $ 476,021 $ 253,023 $ 120,071 |
Schedule of Condensed Combined Balance Sheets | Condensed Combined Balance Sheets December 31, 2020 2019 2018 Assets: Cash and cash equivalents $ 478,826 $ 116,471 $ 54,405 Investment in subsidiaries: Bank subsidiaries 1,654,249 1,523,549 1,459,984 Nonbank subsidiaries 453,847 533,844 483,593 Other assets 236,452 219,740 245,200 Total assets $ 2,823,374 $ 2,393,604 $ 2,243,182 Liabilities and Stockholders’ Equity: Accounts payable and accrued expenses $ 64,635 $ 53,418 $ 58,319 Notes payable 412,764 215,780 215,620 Stockholders’ equity 2,345,975 2,124,406 1,969,243 Total liabilities and stockholders’ equity $ 2,823,374 $ 2,393,604 $ 2,243,182 |
Schedule of Condensed Combined Statements of Cash Flows | Condensed Combined Statements of Cash Flows Year Ended December 31, 2020 2019 2018 Operating Activities: Net income $ 469,677 $ 232,977 $ 125,727 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (176,294) (94,609) (79,371) Net realized gains on equity investments — — (5,336) Net realized gains on disposal of discontinued operations (41,901) — — Deferred income taxes 4,432 (123) 217 Other, net 37,465 44,943 19,368 Net cash provided by operating activities 293,379 183,188 60,605 Investing Activities: Purchases of equity investments (29,365) — (12,492) Purchases of premises and equipment and other (12,547) (17,302) (42,390) Proceeds from sales of equity investments — — 16,174 Proceeds from sale of discontinued operations 154,963 — — Net cash provided by (used in) investing activities 113,051 (17,302) (38,708) Financing Activities: Payments to repurchase common stock (208,664) (73,385) (58,990) Proceeds from issuance of notes payable 196,657 — — Dividends paid on common stock (32,524) (29,627) (26,698) Net cash contributed from noncontrolling interest 825 100 19,250 Other, net (369) (908) 2,182 Net cash used in financing activities (44,075) (103,820) (64,256) Net change in cash and cash equivalents 362,355 62,066 (42,359) Cash and cash equivalents, beginning of year 116,471 54,405 96,764 Cash and cash equivalents, end of year $ 478,826 $ 116,471 $ 54,405 Supplemental Schedule of Non-Cash Activities: Construction in progress related to build-to-suit lease obligations $ — $ — $ 27,802 Note receivable contributed from nonbank subsidiary $ — $ — $ 111,653 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Information (Unaudited) | |
Schedule of quarterly financial information | Selected quarterly financial information is summarized as follows (in thousands, except per share data). Year Ended December 31, 2020 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 136,861 $ 129,828 $ 134,931 $ 144,875 $ 546,495 Interest expense 29,489 27,928 30,373 34,539 122,329 Net interest income 107,372 101,900 104,558 110,336 424,166 Provision for (reversal of) credit losses (3,482) (602) 66,026 34,549 96,491 Noninterest income 447,931 502,711 468,125 271,713 1,690,480 Noninterest expense 402,348 399,345 370,209 281,901 1,453,803 Income from continuing operations before income taxes 156,437 205,868 136,448 65,599 564,352 Income tax expense 39,295 46,820 31,808 15,148 133,071 Income from continuing operations 117,142 159,048 104,640 50,451 431,281 Income from discontinued operations, net of income taxes 3,734 736 30,775 3,151 38,396 Net income 120,876 159,784 135,415 53,602 469,677 Less: Net income attributable to noncontrolling interest 4,431 6,505 6,939 3,966 21,841 Income attributable to Hilltop $ 116,445 $ 153,279 $ 128,476 $ 49,636 $ 447,836 Earnings per common share: Basic: Earnings from continuing operations $ 1.31 $ 1.69 $ 1.08 $ 0.51 $ 4.59 Earnings from discontinued operations 0.04 0.01 0.34 0.04 0.43 $ 1.35 $ 1.70 $ 1.42 $ 0.55 $ 5.02 Diluted: Earnings from continuing operations $ 1.30 $ 1.69 $ 1.08 $ 0.51 $ 4.58 Earnings from discontinued operations 0.05 0.01 0.34 0.04 0.43 $ 1.35 $ 1.70 $ 1.42 $ 0.55 $ 5.01 Cash dividends declared per common share $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.36 Year Ended December 31, 2019 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 151,818 $ 160,940 $ 149,000 $ 148,938 $ 610,696 Interest expense 41,058 48,294 41,716 40,649 171,717 Net interest income 110,760 112,646 107,284 108,289 438,979 Provision for (reversal of) credit losses 6,880 47 (672) 951 7,206 Noninterest income 263,646 306,505 276,703 215,963 1,062,817 Noninterest expense 307,868 321,186 304,088 278,747 1,211,889 Income from continuing operations before income taxes 59,658 97,918 80,571 44,554 282,701 Income tax expense 13,579 21,472 18,526 10,137 63,714 Income from continuing operations 46,079 76,446 62,045 34,417 218,987 Income (loss) from discontinued operations, net of income taxes 5,623 5,261 (2,254) 5,360 13,990 Net income 51,702 81,707 59,791 39,777 232,977 Less: Net income attributable to noncontrolling interest 2,426 2,289 1,980 991 7,686 Income attributable to Hilltop $ 49,276 $ 79,418 $ 57,811 $ 38,786 $ 225,291 Earnings per common share: Basic: Earnings from continuing operations $ 0.48 $ 0.81 $ 0.64 $ 0.36 $ 2.29 Earnings (losses) from discontinued operations 0.06 0.06 (0.02) 0.05 0.15 $ 0.54 $ 0.87 $ 0.62 $ 0.41 $ 2.44 Diluted: Earnings from continuing operations $ 0.48 $ 0.81 $ 0.64 $ 0.36 $ 2.29 Earnings (losses) from discontinued operations 0.06 0.05 (0.02) 0.05 0.15 $ 0.54 $ 0.86 $ 0.62 $ 0.41 $ 2.44 Cash dividends declared per common share $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.32 |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies - Basis of Presentation, Ownership (Details) $ in Millions | Jun. 30, 2020USD ($) | Dec. 31, 2020item |
Basis of Presentation | ||
Number of primary business units | item | 2 | |
Appraisal on file period to determine if reserve is required on 1-4 family residential loans | 2 years | |
Period Delinquent Consumer Loans Written Off | 90 days | |
Minimum | ||
Basis of Presentation | ||
Economic forecast variables period | 1 year | |
Maximum | ||
Basis of Presentation | ||
Economic forecast variables period | 4 years | |
NLC | Discontinued Operations, Disposed of by sale | ||
Basis of Presentation | ||
Cash proceeds from sale | $ | $ 154.1 | |
PPC | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
Securities Holdings | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
HTH Hillcrest Project LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
Hilltop Investments I, LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
PPC | PlainsCapital (the Bank) | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
PPC | Hilltop Opportunity Partners LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
PPC | PCC Statutory Trusts | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
PlainsCapital (the Bank) | Prime Lending | ||
Basis of Presentation | ||
Ownership percentage | 100.00% | |
Prime Lending | Ventures Management | ||
Basis of Presentation | ||
Membership ownership percentage | 100.00% | |
Hilltop Investments I, LLC | Hillcrest Land LLC | ||
Basis of Presentation | ||
Membership ownership percentage | 50.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting and Reporting Policies - Loans (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | Single Family Residential Loans | |
Loans Held for Sale | |
Loans held-for-sale, period reported on balance sheet | 30 days |
Maximum | |
Loans Held for Sale | |
Loans held-for-sale, period reported on balance sheet | 30 days |
Maximum | Single Family Residential Loans | |
Loans Held for Sale | |
Loans held-for-sale, period reported on balance sheet | 45 days |
Summary of Significant Accoun_5
Summary of Significant Accounting and Reporting Policies - Premises and Equipment (Details) - Property, Plant and Equipment [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Premises and Equipment | |
Estimated useful lives | 3 years |
Maximum | |
Premises and Equipment | |
Estimated useful lives | 25 years |
Summary of Significant Accoun_6
Summary of Significant Accounting and Reporting Policies - Other Information (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 22, 2015 | May 22, 2015USD ($) | Apr. 09, 2015USD ($) | |
Broker-Dealer | ||||||
Debt Instrument | ||||||
Number of primary lines of business | item | 4 | |||||
Banking | ||||||
Debt Instrument | ||||||
Number of primary lines of business | item | 3 | |||||
Interest Expense | ||||||
Debt Instrument | ||||||
Debt issuance costs amortized | $ | $ 0.3 | $ 0.2 | $ 0.2 | |||
Senior exchangeable notes 7.50 percent due 2025 | Private Placement | ||||||
Debt Instrument | ||||||
Capitalized debt issuance costs | $ | $ 3.2 | $ 1.9 | ||||
Senior Notes due April 2025 | ||||||
Debt Instrument | ||||||
Interest rate (as a percent) | 5.00% | |||||
Senior Notes due April 2025 | Private Placement | ||||||
Debt Instrument | ||||||
Interest rate (as a percent) | 5.00% |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Recent Accounting Pronouncements | ||
Retained Earnings (Accumulated Deficit) | $ 986,792 | $ 644,860 |
Cumulative Effect, Period of Adoption, Adjusted Balance | ASU 2016-13 | ||
Recent Accounting Pronouncements | ||
Aggregate allowance for credit loss | 83,600 | |
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13 | ||
Recent Accounting Pronouncements | ||
Retained Earnings (Accumulated Deficit) | $ (5,700) |
Discontinued Operations - Balan
Discontinued Operations - Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Discontinued Operations | |||
Goodwill | $ 24,000 | ||
Total assets of discontinued operations | 248,429 | ||
Total liabilities of discontinued operations | 140,674 | ||
Discontinued Operations, Disposed of by sale | NLC | |||
Discontinued Operations | |||
Cash proceeds from sale | $ 154,100 | ||
Net gains on disposal of discontinued operations | $ 36,811 | ||
Transaction cost | $ 5,100 | ||
Cash and due from banks | 51,333 | ||
Available for sale, at fair value | 86,899 | ||
Equity, at fair value | 19,841 | ||
Total securities | 106,740 | ||
Premises and equipment, net | 9,607 | ||
Operating lease right-of-use assets | 2,739 | ||
Other assets | 50,533 | ||
Goodwill | 23,988 | ||
Other intangible assets, net | 3,489 | ||
Total assets of discontinued operations | 248,429 | ||
Note payable | 27,500 | ||
Operating lease liabilities | 2,783 | ||
Other liabilities | 110,391 | ||
Total liabilities of discontinued operations | $ 140,674 |
Discontinued Operations - Opera
Discontinued Operations - Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Discontinued Operations | |||||||||||
Income from discontinued operations before income taxes | $ 38,900 | $ 17,600 | $ 5,800 | ||||||||
Income from discontinued operations, net of income taxes | $ 3,734 | $ 736 | $ 30,775 | $ 3,151 | $ 5,623 | $ 5,261 | $ (2,254) | $ 5,360 | 38,396 | 13,990 | 4,941 |
Discontinued Operations, Disposed of by sale | NLC | |||||||||||
Discontinued Operations | |||||||||||
Securities: Taxable | 1,752 | 3,611 | 4,310 | ||||||||
Other | 71 | 522 | 495 | ||||||||
Total interest income | 1,823 | 4,133 | 4,805 | ||||||||
Interest expense - notes payable | 775 | 1,806 | 1,780 | ||||||||
Net insurance premiums earned | 65,077 | 132,284 | 136,751 | ||||||||
Other | 3,051 | 10,915 | 5,909 | ||||||||
Total noninterest income | 68,128 | 143,199 | 142,660 | ||||||||
Employees' compensation and benefits | 6,002 | 11,663 | 11,474 | ||||||||
Occupancy and equipment, net | 464 | 991 | 1,284 | ||||||||
Professional services | 18,201 | 35,528 | 35,953 | ||||||||
Loss and loss adjustment expenses | 38,419 | 68,940 | 79,347 | ||||||||
Other | 3,987 | 10,796 | 11,863 | ||||||||
Total noninterest expense | 67,073 | 127,918 | 139,921 | ||||||||
Income from discontinued operations before income taxes | 2,103 | 17,608 | 5,764 | ||||||||
Gain on disposal of discontinued operations | 36,811 | ||||||||||
Income tax expense | 518 | 3,618 | 823 | ||||||||
Income from discontinued operations, net of income taxes | $ 38,396 | $ 13,990 | $ 4,941 |
Discontinued Operations - Secur
Discontinued Operations - Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Discontinued Operations | ||
Available-for-sale unrealized gains | $ 28,586 | $ 12,702 |
Unrealized net gains from equity securities | 100 | 100 |
Discontinued Operations, Disposed of by sale | NLC | ||
Discontinued Operations | ||
Available-for-sale unrealized gains | 2,500 | |
Unrealized net gains from equity securities | $ 1,100 | |
Recognized net gain (loss) on equity securities | $ 1,900 |
Discontinued Operations - Effec
Discontinued Operations - Effects of Reinsurance (Details) - NLC - Discontinued Operations, Disposed of by sale - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Written | |||
Premiums from direct business | $ 63,811 | $ 125,157 | $ 129,611 |
Reinsurance assumed | 6,396 | 13,148 | 12,917 |
Reinsurance ceded | (2,759) | (7,191) | (8,749) |
Net premiums | 67,448 | 131,114 | 133,779 |
Earned | |||
Premiums from direct business | 61,384 | 126,434 | 133,112 |
Reinsurance assumed | 6,452 | 13,041 | 12,516 |
Reinsurance ceded | (2,759) | (7,191) | (8,877) |
Net premiums | 65,077 | 132,284 | 136,751 |
Effect of reinsurance on incurred losses | |||
Loss and LAE incurred | 38,225 | 68,130 | 76,464 |
Reinsurance recoverables | 194 | 810 | 2,883 |
Net loss and LAE incurred | $ 38,419 | 68,940 | $ 79,347 |
Amount of premium deficiency | $ 0 |
Discontinued Operations - Defer
Discontinued Operations - Deferred Policy Acquisition Cost (Details) - Discontinued Operations, Disposed of by sale - NLC - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Activity in deferred acquisition costs | |||
Balance, beginning of year | $ 15,672 | $ 16,633 | $ 16,988 |
Acquisition expenses capitalized | 17,642 | 32,245 | 34,328 |
Amortization charged to income | (16,967) | (33,206) | (34,683) |
Balance, end of year | $ 16,347 | $ 15,672 | $ 16,633 |
Discontinued Operations - Insur
Discontinued Operations - Insurance Losses and Loss Adjustment Expenses (Details) - Discontinued Operations, Disposed of by sale - NLC $ in Millions | Dec. 31, 2019USD ($) |
Discontinued Operations | |
Liability for claims and claims adjustment expense | $ 15.3 |
Estimated reinsurance recoveries | $ 1 |
Acquisition - Identifiable Asse
Acquisition - Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Aug. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair values of the identifiable assets acquired, and liabilities assumed | ||||
Goodwill resulting from the acquisition | $ 267,447 | $ 267,447 | ||
BORO | ||||
Fair values of the identifiable assets acquired, and liabilities assumed | ||||
Cash purchase price | $ 85,000 | |||
Cash and due from banks | 21,756 | |||
Securities | 60,477 | |||
Loans held for investment | 326,618 | |||
Other assets | 25,912 | |||
Total identifiable assets acquired | 434,763 | |||
Deposits | 376,393 | |||
Short-term borrowings | 10,000 | |||
Other liabilities | 2,996 | |||
Total liabilities assumed | 389,389 | |||
Net identifiable assets acquired | 45,374 | |||
Goodwill resulting from the acquisition | 39,627 | |||
Net assets acquired | 85,001 | |||
Allocation to intangible assets | ||||
Transaction and integration related expenses | $ 8,200 | |||
Core Deposits | BORO | ||||
Allocation to intangible assets | ||||
Intangible Assets | $ 10,000 | |||
Estimated Useful Life | 6 years |
Fair Value Measurements - FV Op
Fair Value Measurements - FV Option (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value measurements | ||
Mortgage loans held for sale, fair value | $ 2,520 | $ 1,940 |
Mortgage loans held for sale, unpaid principal balance | $ 2,410 | $ 1,880 |
Maximum | ||
Fair value measurements | ||
Loans Held for Sale Period of Time | 30 days |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets: | ||||
Trading securities | $ 694,255 | $ 689,576 | ||
Available for sale | 1,462,205 | 911,493 | ||
Equity securities | 140 | 166 | ||
MSR asset | 143,742 | 55,504 | $ 66,102 | $ 54,714 |
Financial liabilities: | ||||
Securities sold, not yet purchased | 79,789 | 43,817 | ||
Recurring | ||||
Financial assets: | ||||
Trading securities | 694,255 | 689,576 | ||
Available for sale | 1,462,205 | 911,493 | ||
Equity securities | 140 | 166 | ||
Loans held for sale | 2,521,404 | 1,935,713 | ||
Derivative assets | 126,898 | 33,129 | ||
MSR asset | 143,742 | 55,504 | ||
Financial liabilities: | ||||
Securities sold, not yet purchased | 79,789 | 43,817 | ||
Derivative liabilities | 74,598 | 17,140 | ||
Recurring | Level 1 | ||||
Financial assets: | ||||
Trading securities | 45,390 | |||
Equity securities | 140 | 166 | ||
Financial liabilities: | ||||
Securities sold, not yet purchased | 54,494 | 29,080 | ||
Recurring | Level 2 | ||||
Financial assets: | ||||
Trading securities | 648,865 | 689,576 | ||
Available for sale | 1,462,205 | 911,493 | ||
Loans held for sale | 2,449,588 | 1,868,518 | ||
Derivative assets | 126,898 | 33,129 | ||
Financial liabilities: | ||||
Securities sold, not yet purchased | 25,295 | 14,737 | ||
Derivative liabilities | 74,598 | 17,140 | ||
Recurring | Level 3 | ||||
Financial assets: | ||||
Loans held for sale | 71,816 | 67,195 | ||
MSR asset | $ 143,742 | $ 55,504 |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward, Level 3 (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Rollforward for financial instruments measured at fair value using Level 3 inputs | |||
Asset balance, beginning of period | $ 122,699 | $ 116,566 | $ 91,686 |
Purchases/Additions | 224,324 | 74,230 | 86,601 |
Sales/Reductions | (94,432) | (34,849) | (51,104) |
Transfers into Level 3 | 10,323 | 1,136 | |
Total gains or losses (realized or unrealized): | |||
Included in Net Income | (47,356) | (34,384) | (10,617) |
Asset balance, end of period | 215,558 | 122,699 | 116,566 |
Loans Held for Sale | |||
Rollforward for financial instruments measured at fair value using Level 3 inputs | |||
Asset balance, beginning of period | 67,195 | 50,464 | 36,972 |
Purchases/Additions | 61,410 | 60,475 | 61,573 |
Sales/Reductions | (57,682) | (34,849) | (41,801) |
Transfers into Level 3 | 10,323 | 1,136 | |
Total gains or losses (realized or unrealized): | |||
Included in Net Income | (9,430) | (10,031) | (6,280) |
Asset balance, end of period | 71,816 | 67,195 | 50,464 |
MSR | |||
Rollforward for financial instruments measured at fair value using Level 3 inputs | |||
Asset balance, beginning of period | 55,504 | 66,102 | 54,714 |
Purchases/Additions | 162,914 | 13,755 | 25,028 |
Sales/Reductions | (36,750) | (9,303) | |
Total gains or losses (realized or unrealized): | |||
Included in Net Income | (37,926) | (24,353) | (4,337) |
Asset balance, end of period | $ 143,742 | $ 55,504 | $ 66,102 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3, Inputs, Recurring (Details) - Level 3 - Recurring | Dec. 31, 2020item | Dec. 31, 2019item |
Loans Held for Sale | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Loans Held-for-sale, Measurement Input [Extensible List] | us-gaap:MeasurementInputPriceVolatilityMember | us-gaap:MeasurementInputPriceVolatilityMember |
Loans Held for Sale | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.94 | 0.95 |
Loans Held for Sale | Minimum | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.91 | 0.92 |
Loans Held for Sale | Maximum | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.94 | 0.96 |
MSR | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
MSR | Constant Prepayment Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Measurement Input | 0.1215 | 0.1316 |
MSR | Discount Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Measurement Input | 0.1460 | 0.1114 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in FV (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Transfers Between Level 1 and Level 2 | |||
Transfers of assets from level 1 to level 2 | $ 0 | $ 0 | |
Transfers of assets from level 2 to level 1 | 0 | 0 | |
Transfers of liabilities from level 1 to level 2 | 0 | 0 | |
Transfers of liabilities from level 2 to level 1 | 0 | 0 | |
Fair Value Option | |||
Net Gains (Losses) | 1,001,059 | 504,935 | $ 445,116 |
Other Noninterest Income | 243,605 | 186,350 | 90,396 |
Loans Held for Sale | |||
Fair Value Option | |||
Net Gains (Losses) | 52,296 | 12,775 | (8,063) |
Total Changes in Fair Value | 52,296 | 12,775 | (8,063) |
MSR | |||
Fair Value Option | |||
Net Gains (Losses) | (37,926) | (24,353) | (4,337) |
Total Changes in Fair Value | $ (37,926) | $ (24,353) | $ (4,337) |
Fair Value Measurements - OREO
Fair Value Measurements - OREO (Details) - Nonrecurring - Estimate of Fair Value - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value | |||
Total losses of other real estate owned | $ 4.4 | $ 1.4 | $ 2.8 |
Level 2 | Other Assets | |||
Fair Value | |||
Other real estate owned | $ 21.3 | $ 18.2 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Held to maturity securities | $ 326,671 | $ 388,930 |
Broker-dealer and clearing organization receivables | 1,404,727 | 1,780,280 |
Financial liabilities: | ||
Broker-dealer and clearing organization payables | 1,368,373 | 1,605,518 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 1,062,946 | 434,020 |
Assets segregated for regulatory purposes | 290,357 | 157,436 |
Securities purchased under agreements to resell | 80,319 | 59,031 |
Held to maturity securities | 311,944 | 386,326 |
Loans held for sale | 266,982 | 170,648 |
Loans held for investment, net | 7,544,097 | 7,320,264 |
Broker-dealer and clearing organization receivables | 1,404,727 | 1,780,280 |
Other assets | 74,881 | 71,040 |
Financial liabilities: | ||
Deposits | 11,242,319 | 9,032,214 |
Broker-dealer and clearing organization payables | 1,368,373 | 1,605,518 |
Short-term borrowings | 695,798 | 1,424,010 |
Debt | 448,999 | 323,281 |
Other liabilities | 6,133 | 8,340 |
Estimate of Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 1,062,946 | 434,020 |
Assets segregated for regulatory purposes | 290,357 | 157,436 |
Securities purchased under agreements to resell | 80,319 | 59,031 |
Held to maturity securities | 326,671 | 388,930 |
Loans held for sale | 266,982 | 170,648 |
Loans held for investment, net | 7,788,418 | 7,567,233 |
Broker-dealer and clearing organization receivables | 1,404,727 | 1,780,280 |
Other assets | 74,881 | 71,040 |
Financial liabilities: | ||
Deposits | 11,256,629 | 9,032,496 |
Broker-dealer and clearing organization payables | 1,368,373 | 1,605,518 |
Short-term borrowings | 695,798 | 1,424,010 |
Debt | 448,999 | 323,281 |
Other liabilities | 6,133 | 8,340 |
Estimate of Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 1,062,946 | 434,020 |
Assets segregated for regulatory purposes | 290,357 | 157,436 |
Estimate of Fair Value | Level 2 | ||
Financial assets: | ||
Securities purchased under agreements to resell | 80,319 | 59,031 |
Held to maturity securities | 326,671 | 388,930 |
Loans held for sale | 266,982 | 170,648 |
Loans held for investment, net | 437,007 | 576,527 |
Broker-dealer and clearing organization receivables | 1,404,727 | 1,780,280 |
Other assets | 73,111 | 69,580 |
Financial liabilities: | ||
Deposits | 11,256,629 | 9,032,496 |
Broker-dealer and clearing organization payables | 1,368,373 | 1,605,518 |
Short-term borrowings | 695,798 | 1,424,010 |
Debt | 448,999 | 323,281 |
Other liabilities | 6,133 | 8,340 |
Estimate of Fair Value | Level 3 | ||
Financial assets: | ||
Loans held for investment, net | 7,351,411 | 6,990,706 |
Other assets | $ 1,770 | $ 1,460 |
Fair Value Measurements - Adjus
Fair Value Measurements - Adjustments to the carrying value of investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Adjustments to the carrying value of these investments | ||
Balance, beginning of year | $ 19,771 | $ 20,376 |
Additional investments | 500 | |
Upward adjustments | 4,188 | 403 |
Impairments and downward adjustments | (1,615) | (1,008) |
Balance, end of year | 22,844 | 19,771 |
Other Assets | ||
Equity Securities without Readily Determinable Fair Value | ||
Other equity investments | $ 63,600 | $ 36,600 |
Securities - Trading Securities
Securities - Trading Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of fair value of trading securities | ||
Debt Securities, Trading | $ 694,255 | $ 689,576 |
Investment-related Liabilities | ||
Securities sold, not yet purchased, at fair value | 79,789 | 43,817 |
US Treasury Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 40,491 | |
Bonds | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 40 | 24,680 |
Residential Mortgage Backed Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 336,081 | 331,601 |
Commercial mortgage-backed securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 876 | 2,145 |
Collateralized Mortgage Obligations | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 69,172 | 191,154 |
Corporate debt securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 62,481 | 36,973 |
States and political subdivisions | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 171,573 | 93,117 |
Unit investment trusts | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 3,468 | |
Private-label securitized product | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 8,571 | 2,992 |
Other | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | $ 4,970 | $ 3,446 |
Securities - AFS and HTM, Amort
Securities - AFS and HTM, Amortized Cost and FV (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Available for sale | ||
Amortized cost | $ 1,435,919 | $ 899,817 |
Unrealized Gains | 28,586 | 12,702 |
Unrealized Losses | (2,300) | (1,026) |
Fair Value | 1,462,205 | 911,493 |
Held to maturity | ||
Amortized cost | 311,944 | 386,326 |
Unrealized Gains | 14,727 | 4,354 |
Unrealized Losses | (1,750) | |
Held to maturity, fair value | 326,671 | 388,930 |
Equity Securities | ||
Unrealized net gains from equity securities | 100 | 100 |
Equity, at fair value | 140 | 166 |
Bonds | ||
Available for sale | ||
Amortized cost | 82,036 | 84,590 |
Unrealized Gains | 1,095 | 1,049 |
Unrealized Losses | (325) | (64) |
Fair Value | 82,806 | 85,575 |
Held to maturity | ||
Amortized cost | 24,020 | |
Unrealized Gains | 10 | |
Unrealized Losses | (35) | |
Held to maturity, fair value | 23,995 | |
Residential Mortgage Backed Securities | ||
Available for sale | ||
Amortized cost | 624,863 | 430,514 |
Unrealized Gains | 17,194 | 6,662 |
Unrealized Losses | (446) | (147) |
Fair Value | 641,611 | 437,029 |
Held to maturity | ||
Amortized cost | 13,547 | 17,776 |
Unrealized Gains | 708 | 295 |
Held to maturity, fair value | 14,255 | 18,071 |
Commercial mortgage-backed securities | ||
Available for sale | ||
Amortized cost | 124,929 | 11,488 |
Unrealized Gains | 768 | 543 |
Unrealized Losses | (1,159) | |
Fair Value | 124,538 | 12,031 |
Held to maturity | ||
Amortized cost | 152,820 | 161,624 |
Unrealized Gains | 9,205 | 2,810 |
Unrealized Losses | (655) | |
Held to maturity, fair value | 162,025 | 163,779 |
Collateralized Mortgage Obligations | ||
Available for sale | ||
Amortized cost | 559,362 | 333,256 |
Unrealized Gains | 6,916 | 3,175 |
Unrealized Losses | (370) | (815) |
Fair Value | 565,908 | 335,616 |
Held to maturity | ||
Amortized cost | 74,932 | 113,894 |
Unrealized Gains | 2,036 | 226 |
Unrealized Losses | (904) | |
Held to maturity, fair value | 76,968 | 113,216 |
States and political subdivisions | ||
Available for sale | ||
Amortized cost | 44,729 | 39,969 |
Unrealized Gains | 2,613 | 1,273 |
Fair Value | 47,342 | 41,242 |
Held to maturity | ||
Amortized cost | 70,645 | 69,012 |
Unrealized Gains | 2,778 | 1,013 |
Unrealized Losses | (156) | |
Held to maturity, fair value | $ 73,423 | $ 69,869 |
Securities - AFS in an Unrealiz
Securities - AFS in an Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 43 | 55 |
Unrealized loss for twelve months or longer | item | 5 | 16 |
Total | item | 48 | 71 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 353,961 | $ 165,636 |
Unrealized loss for twelve months or longer | 13,611 | 60,387 |
Total | 367,572 | 226,023 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 2,254 | 599 |
Unrealized loss for twelve months or longer | 46 | 427 |
Total | $ 2,300 | $ 1,026 |
Bonds | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 8 | 2 |
Total | item | 8 | 2 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 60,298 | $ 24,937 |
Total | 60,298 | 24,937 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 325 | 64 |
Total | $ 325 | $ 64 |
Residential Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 15 | 37 |
Unrealized loss for twelve months or longer | item | 2 | |
Total | item | 15 | 39 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 86,287 | $ 36,187 |
Unrealized loss for twelve months or longer | 13,683 | |
Total | 86,287 | 49,870 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 429 | 87 |
Unrealized loss for twelve months or longer | 58 | |
Total | $ 429 | $ 145 |
Commercial mortgage-backed securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 10 | 1 |
Total | item | 10 | 1 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 105,386 | $ 9,967 |
Total | 105,386 | 9,967 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 1,176 | 2 |
Total | $ 1,176 | $ 2 |
Collateralized Mortgage Obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 10 | 15 |
Unrealized loss for twelve months or longer | item | 5 | 13 |
Total | item | 15 | 28 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 101,990 | $ 94,545 |
Unrealized loss for twelve months or longer | 13,611 | 46,217 |
Total | 115,601 | 140,762 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 324 | 446 |
Unrealized loss for twelve months or longer | 46 | 369 |
Total | $ 370 | $ 815 |
States and political subdivisions | ||
Number of Securities | ||
Unrealized loss for twelve months or longer | item | 1 | |
Total | item | 1 | |
Fair Value | ||
Unrealized loss for twelve months or longer | $ 487 | |
Total | $ 487 |
Securities - HTM in an Unrealiz
Securities - HTM in an Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 2 | 52 |
Unrealized loss for twelve months or longer | item | 12 | |
Total | item | 2 | 64 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 578 | $ 94,175 |
Unrealized loss for twelve months or longer | 60,659 | |
Total | $ 578 | 154,834 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 1,102 | |
Unrealized loss for twelve months or longer | 648 | |
Total | $ 1,750 | |
Bonds | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 2 | |
Total | item | 2 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 9,665 | |
Total | 9,665 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 35 | |
Total | $ 35 | |
Commercial mortgage-backed securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 8 | |
Total | item | 8 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 44,610 | |
Total | 44,610 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 656 | |
Total | $ 656 | |
Collateralized Mortgage Obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 4 | |
Unrealized loss for twelve months or longer | item | 8 | |
Total | item | 12 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 23,904 | |
Unrealized loss for twelve months or longer | 59,560 | |
Total | 83,464 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 287 | |
Unrealized loss for twelve months or longer | 617 | |
Total | $ 904 | |
States and political subdivisions | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 2 | 38 |
Unrealized loss for twelve months or longer | item | 4 | |
Total | item | 2 | 42 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 578 | $ 15,996 |
Unrealized loss for twelve months or longer | 1,099 | |
Total | $ 578 | 17,095 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 124 | |
Unrealized loss for twelve months or longer | 31 | |
Total | $ 155 |
Securities - AFS Contractual Ma
Securities - AFS Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
AFS, Amortized Cost, Rolling Maturity | ||
Due in one year or less | $ 4,999 | |
Due after one year through five years | 61,182 | |
Due after five years through ten years | 17,537 | |
Due after ten years | 43,047 | |
Total | 126,765 | |
Amortized cost | 1,435,919 | $ 899,817 |
AFS, Fair Value, Rolling Maturity | ||
Due in one year or less | 5,072 | |
Due after one year through five years | 62,636 | |
Due after five years through ten years | 18,179 | |
Due after ten years | 44,261 | |
Total | 130,148 | |
Fair Value | 1,462,205 | 911,493 |
Residential Mortgage Backed Securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 624,863 | |
Amortized cost | 624,863 | 430,514 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 641,611 | |
Fair Value | 641,611 | 437,029 |
Collateralized Mortgage Obligations | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 559,362 | |
Amortized cost | 559,362 | 333,256 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 565,908 | |
Fair Value | 565,908 | 335,616 |
Commercial mortgage-backed securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 124,929 | |
Amortized cost | 124,929 | 11,488 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 124,538 | |
Fair Value | $ 124,538 | $ 12,031 |
Securities - HTM Contractual Ma
Securities - HTM Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
HTM, Amortized Cost, Rolling Maturities | ||
Due in one year or less | $ 645 | |
Due after one year through five years | 1,225 | |
Due after five years through ten years | 8,205 | |
Due after ten years | 60,570 | |
Total | 70,645 | |
Amortized cost | 311,944 | $ 386,326 |
HTM, Fair Value, Rolling Maturities | ||
Due in one year or less | 646 | |
Due after one year through five years | 1,273 | |
Due after five years through ten years | 8,525 | |
Due after ten years | 62,979 | |
Total | 73,423 | |
Fair Value | 326,671 | 388,930 |
Residential Mortgage Backed Securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 13,547 | |
Amortized cost | 13,547 | 17,776 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 14,255 | |
Fair Value | 14,255 | 18,071 |
Collateralized Mortgage Obligations | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 74,932 | |
Amortized cost | 74,932 | 113,894 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 76,968 | |
Fair Value | 76,968 | 113,216 |
Commercial mortgage-backed securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 152,820 | |
Amortized cost | 152,820 | 161,624 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 162,025 | |
Fair Value | $ 162,025 | $ 163,779 |
Securities - Additional Informa
Securities - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Securities | |||
Realized net gains (losses) from trading securities portfolio | $ 122 | $ 20.5 | $ 6.2 |
Realized net gains (losses) from other securities | 0.2 | (2.5) | |
Carrying amount of securities pledged | 712.3 | 576 | |
Fair value of securities pledged | 733.8 | 583.6 | |
Hilltop Broker-Dealers | |||
Securities | |||
Realized net gains (losses) from trading securities portfolio | $ 77.1 | $ 132.7 | $ 41.9 |
Loans Held for Investment - Sum
Loans Held for Investment - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Loans | ||||
Total loans | $ 7,693,141 | $ 7,381,400 | ||
Allowance for loan losses | (149,044) | (61,136) | $ (59,486) | $ (63,686) |
Loans held for investment, net | 7,544,097 | 7,320,264 | ||
Commercial Real Estate | ||||
Loans | ||||
Total loans | 3,133,903 | 3,000,523 | ||
Allowance for loan losses | (109,629) | (31,595) | (27,100) | (27,232) |
Commercial and Industrial | ||||
Loans | ||||
Total loans | 2,627,774 | 2,025,720 | ||
Allowance for loan losses | (27,703) | (17,964) | (21,980) | (23,698) |
Commercial and Industrial | Loans Funded Through Paycheck Protection Program | ||||
Loans | ||||
Total loans | 486,700 | |||
Construction and land development | ||||
Loans | ||||
Total loans | 828,852 | 940,564 | ||
Allowance for loan losses | (6,677) | (4,878) | (6,061) | (7,847) |
1 - 4 family residential | ||||
Loans | ||||
Total loans | 629,938 | 791,020 | ||
Allowance for loan losses | (3,946) | (6,386) | (3,956) | (4,245) |
Consumer | ||||
Loans | ||||
Total loans | 35,667 | 47,046 | ||
Allowance for loan losses | (876) | (265) | (267) | (311) |
Broker-dealer | ||||
Loans | ||||
Total loans | 437,007 | 576,527 | ||
Allowance for loan losses | $ (213) | $ (48) | $ (122) | $ (353) |
Loans Held for Investment - Non
Loans Held for Investment - Non-accrual Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Non-accrual loans | |||
Non-accrual Loans With Allowance | $ 20,363 | ||
Non-accrual Loans With No Allowance | 46,731 | ||
Non-accrual loans | 67,094 | $ 31,294 | |
Interest Income Recognized | 5,821 | $ 1,600 | $ 1,400 |
Addition of loans in non-accrual status | 35,800 | ||
Commercial Real Estate | |||
Non-accrual loans | |||
Addition of loans in non-accrual status | 3,800 | ||
Amount of non-accrual loans increase during the period, including loans previously categorized | 8,400 | ||
Number of previous loans included in non-accrual | 6,800 | ||
Nonaccrual loans resolved during the period | 4,500 | ||
Non-accrual status, reserve | 1,100 | ||
Commercial Real Estate | Non-owner occupied | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 1,213 | ||
Non-accrual Loans With No Allowance | 445 | ||
Non-accrual loans | 1,658 | $ 3,813 | |
Interest Income Recognized | 1,364 | ||
Commercial Real Estate | Owner occupied | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 3,473 | ||
Non-accrual Loans With No Allowance | 6,002 | ||
Non-accrual loans | 9,475 | 3,495 | |
Interest Income Recognized | 295 | ||
Commercial and Industrial | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 10,821 | ||
Non-accrual Loans With No Allowance | 23,228 | ||
Non-accrual loans | 34,049 | 15,262 | |
Interest Income Recognized | 2,362 | ||
Amount of non-accrual loans increase during the period, including loans previously categorized | 18,900 | ||
Non-accrual status, reserve | 7,900 | ||
Commercial and Industrial | ASU 2016-13 | |||
Non-accrual loans | |||
CECL transition gross-up adjustment | 4,300 | ||
Construction and land development | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 102 | ||
Non-accrual Loans With No Allowance | 405 | ||
Non-accrual loans | 507 | 1,316 | |
Interest Income Recognized | 110 | ||
1 - 4 family residential | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 4,726 | ||
Non-accrual Loans With No Allowance | 16,651 | ||
Non-accrual loans | 21,377 | 7,382 | |
Interest Income Recognized | 1,568 | ||
Amount of non-accrual loans increase during the period, including loans previously categorized | 17,100 | ||
Previously categorized loans included in non-accrual | 15,000 | ||
Nonaccrual loans resolved during the period | 3,200 | ||
Non-accrual status, reserve | 700 | ||
1 - 4 family residential | Secured by Residential Properties | |||
Non-accrual loans | |||
Non-accrual loans held for sale | 10,900 | 4,800 | |
Consumer | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 28 | ||
Non-accrual loans | 28 | $ 26 | |
Interest Income Recognized | $ 122 |
Loans Held for Investment - TDR
Loans Held for Investment - TDRs (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Dec. 31, 2018loan | |
TDRs, Non-covered loans | |||||
COVID-19 related loan modifications | $ 968,000,000 | $ 75,000,000 | |||
COVID-19 loans modified and in deferral period | 240,000,000 | $ 240,000,000 | |||
COVID-19 loans modified with an extended deferral period | 90,000,000 | 90,000,000 | |||
COVID-19 loans modified which have returned to agreed upon contractual terms | $ 714,000,000 | $ 714,000,000 | |||
Number of TDR loans granted | 8 | 4 | 0 | ||
TDR at extension | $ 9,902,000 | $ 9,618,000 | |||
TDR modifications, in which a payment was at least 30 days past due | $ 4,554,000 | $ 8,566,000 | |||
Number of TDRs granted in preceding twelve months for which payment was at least 30 days past due | loan | 0 | 0 | 0 | ||
AB Note | Minimum | PlainsCapital (the Bank) | |||||
TDRs, Non-covered loans | |||||
Number of loans into which a single loan may be reconfigured | loan | 2 | ||||
Commercial and Industrial | Payment Term Extension | |||||
TDRs, Non-covered loans | |||||
Number of TDR loans granted | 3 | 4 | |||
TDR at extension | $ 9,464,000 | $ 9,618,000 | |||
TDR modifications, in which a payment was at least 30 days past due | $ 4,116,000 | $ 8,566,000 | |||
1 - 4 family residential | Payment Term Extension | |||||
TDRs, Non-covered loans | |||||
Number of TDR loans granted | 5 | ||||
TDR at extension | $ 438,000 | ||||
TDR modifications, in which a payment was at least 30 days past due | $ 438,000 |
Loans Held for Investment - Agi
Loans Held for Investment - Aging (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | $ 45,912 | $ 55,823 |
Current Loans | 7,647,229 | 7,325,577 |
Total loans | 7,693,141 | 7,381,400 |
Accruing Loans Past Due 90 Days or More | 6 | 3 |
Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 13,529 | 31,935 |
Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 4,092 | 7,918 |
Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 28,291 | 15,970 |
Prime Lending | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Repurchase under a forbearance agreement | 198,800 | |
Prime Lending | U S Government Agencies Secured | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Accruing Loans Past Due 90 Days or More | 243,600 | 102,700 |
Unpaid principal balance loans past due 90 days or more | 245,500 | 104,000 |
Commercial Real Estate | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total loans | 3,133,903 | 3,000,523 |
Commercial Real Estate | Non-owner occupied | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 2,118 | 6,852 |
Current Loans | 1,786,193 | 1,702,500 |
Total loans | 1,788,311 | 1,709,352 |
Commercial Real Estate | Non-owner occupied | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 1,919 | 4,062 |
Commercial Real Estate | Non-owner occupied | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 199 | 2,790 |
Commercial Real Estate | Owner occupied | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 9,045 | 5,958 |
Current Loans | 1,336,547 | 1,285,213 |
Total loans | 1,345,592 | 1,291,171 |
Commercial Real Estate | Owner occupied | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 195 | 1,813 |
Commercial Real Estate | Owner occupied | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 522 | 880 |
Commercial Real Estate | Owner occupied | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 8,328 | 3,265 |
Commercial and Industrial | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 10,839 | 11,097 |
Current Loans | 2,616,935 | 2,014,623 |
Total loans | 2,627,774 | 2,025,720 |
Accruing Loans Past Due 90 Days or More | 6 | 3 |
Commercial and Industrial | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 3,114 | 5,967 |
Commercial and Industrial | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 407 | 1,735 |
Commercial and Industrial | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 7,318 | 3,395 |
Construction and land development | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 19 | 9,407 |
Current Loans | 828,833 | 931,157 |
Total loans | 828,852 | 940,564 |
Construction and land development | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 19 | 7,580 |
Construction and land development | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 1,827 | |
1 - 4 family residential | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 23,570 | 22,020 |
Current Loans | 606,368 | 769,000 |
Total loans | 629,938 | 791,020 |
1 - 4 family residential | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 8,110 | 12,058 |
1 - 4 family residential | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 3,040 | 3,442 |
1 - 4 family residential | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 12,420 | 6,520 |
Consumer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 321 | 489 |
Current Loans | 35,346 | 46,557 |
Total loans | 35,667 | 47,046 |
Consumer | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 172 | 455 |
Consumer | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 123 | 34 |
Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Total Past Due Loans | 26 | |
Broker-dealer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Current Loans | 437,007 | 576,527 |
Total loans | $ 437,007 | $ 576,527 |
Loans Held for Investment - Int
Loans Held for Investment - Internal Risk Grades (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Internal risk grades of non-covered loans | ||
2020 | $ 1,848,876 | |
2019 | 1,062,690 | |
2018 | 814,006 | |
2017 | 483,170 | |
2016 | 469,543 | |
2015 and Prior | 521,082 | |
Financing Receivable, Revolving | 777,246 | |
Total loans with credit quality measures | 5,976,613 | |
Total loans | 7,693,141 | $ 7,381,400 |
Commercial Real Estate | ||
Internal risk grades of non-covered loans | ||
Total loans | 3,133,903 | 3,000,523 |
Commercial Real Estate | Non-owner occupied | ||
Internal risk grades of non-covered loans | ||
Total loans | 1,788,311 | 1,709,352 |
Commercial Real Estate | Non-owner occupied | Internal Grade 1-3 | ||
Internal risk grades of non-covered loans | ||
2020 | 21,135 | |
2019 | 22,913 | |
2018 | 3,171 | |
2017 | 2,735 | |
2016 | 12,896 | |
2015 and Prior | 15,263 | |
Financing Receivable, Revolving | 1 | |
Total loans with credit quality measures | 78,114 | |
Commercial Real Estate | Non-owner occupied | Internal Grade 4-7 | ||
Internal risk grades of non-covered loans | ||
2020 | 245,833 | |
2019 | 138,836 | |
2018 | 83,951 | |
2017 | 88,119 | |
2016 | 108,371 | |
2015 and Prior | 64,200 | |
Financing Receivable, Revolving | 47,920 | |
Total loans with credit quality measures | 777,230 | |
Commercial Real Estate | Non-owner occupied | Internal Grade 8-11 | ||
Internal risk grades of non-covered loans | ||
2020 | 227,440 | |
2019 | 133,246 | |
2018 | 122,022 | |
2017 | 99,473 | |
2016 | 108,536 | |
2015 and Prior | 64,031 | |
Financing Receivable, Revolving | 488 | |
Total loans with credit quality measures | 755,236 | |
Commercial Real Estate | Non-owner occupied | Internal Grade 13 | ||
Internal risk grades of non-covered loans | ||
2020 | 34,020 | |
2019 | 16,139 | |
2018 | 29,166 | |
2017 | 29,810 | |
2016 | 33,353 | |
2015 and Prior | 33,467 | |
Financing Receivable, Revolving | 118 | |
Total loans with credit quality measures | 176,073 | |
Commercial Real Estate | Non-owner occupied | Internal Grade 14 | ||
Internal risk grades of non-covered loans | ||
2015 and Prior | 1,658 | |
Total loans with credit quality measures | 1,658 | |
Commercial Real Estate | Owner occupied | ||
Internal risk grades of non-covered loans | ||
Total loans | 1,345,592 | 1,291,171 |
Commercial Real Estate | Owner occupied | Internal Grade 1-3 | ||
Internal risk grades of non-covered loans | ||
2020 | 60,809 | |
2019 | 21,011 | |
2018 | 12,712 | |
2017 | 44,163 | |
2016 | 21,567 | |
2015 and Prior | 37,688 | |
Financing Receivable, Revolving | 1 | |
Total loans with credit quality measures | 197,951 | |
Commercial Real Estate | Owner occupied | Internal Grade 4-7 | ||
Internal risk grades of non-covered loans | ||
2020 | 164,939 | |
2019 | 169,582 | |
2018 | 131,821 | |
2017 | 56,801 | |
2016 | 53,811 | |
2015 and Prior | 75,372 | |
Financing Receivable, Revolving | 39,868 | |
Total loans with credit quality measures | 692,194 | |
Commercial Real Estate | Owner occupied | Internal Grade 8-11 | ||
Internal risk grades of non-covered loans | ||
2020 | 118,328 | |
2019 | 80,375 | |
2018 | 49,601 | |
2017 | 23,588 | |
2016 | 23,330 | |
2015 and Prior | 30,249 | |
Financing Receivable, Revolving | 1,291 | |
Total loans with credit quality measures | 326,762 | |
Commercial Real Estate | Owner occupied | Internal Grade 12 (Special mention) | ||
Internal risk grades of non-covered loans | ||
2020 | 365 | |
2018 | 3,691 | |
2015 and Prior | 527 | |
Total loans with credit quality measures | 4,583 | |
Commercial Real Estate | Owner occupied | Internal Grade 13 | ||
Internal risk grades of non-covered loans | ||
2020 | 8,372 | |
2019 | 5,620 | |
2018 | 69,617 | |
2017 | 10,315 | |
2016 | 8,663 | |
2015 and Prior | 12,040 | |
Total loans with credit quality measures | 114,627 | |
Commercial Real Estate | Owner occupied | Internal Grade 14 | ||
Internal risk grades of non-covered loans | ||
2020 | 506 | |
2019 | 1,259 | |
2018 | 441 | |
2017 | 5,345 | |
2016 | 1,045 | |
2015 and Prior | 879 | |
Total loans with credit quality measures | 9,475 | |
Commercial and Industrial | ||
Internal risk grades of non-covered loans | ||
Total loans | 2,627,774 | 2,025,720 |
Commercial and Industrial | Internal Grade 1-3 | ||
Internal risk grades of non-covered loans | ||
2020 | 30,754 | |
2019 | 27,144 | |
2018 | 7,149 | |
2017 | 5,486 | |
2016 | 3,587 | |
2015 and Prior | 335 | |
Financing Receivable, Revolving | 21,651 | |
Total loans with credit quality measures | 96,106 | |
Commercial and Industrial | Internal Grade 4-7 | ||
Internal risk grades of non-covered loans | ||
2020 | 179,394 | |
2019 | 54,423 | |
2018 | 53,908 | |
2017 | 29,778 | |
2016 | 24,179 | |
2015 and Prior | 10,945 | |
Financing Receivable, Revolving | 395,320 | |
Total loans with credit quality measures | 747,947 | |
Commercial and Industrial | Internal Grade 8-11 | ||
Internal risk grades of non-covered loans | ||
2020 | 95,835 | |
2019 | 62,411 | |
2018 | 20,162 | |
2017 | 13,459 | |
2016 | 13,885 | |
2015 and Prior | 2,144 | |
Financing Receivable, Revolving | 197,273 | |
Total loans with credit quality measures | 405,169 | |
Commercial and Industrial | Internal Grade 12 (Special mention) | ||
Internal risk grades of non-covered loans | ||
2020 | 757 | |
2019 | 14 | |
2018 | 3,723 | |
2016 | 152 | |
Financing Receivable, Revolving | 2,093 | |
Total loans with credit quality measures | 6,739 | |
Commercial and Industrial | Internal Grade 13 | ||
Internal risk grades of non-covered loans | ||
2020 | 9,863 | |
2019 | 3,689 | |
2018 | 13,788 | |
2017 | 5,531 | |
2016 | 5,759 | |
2015 and Prior | 253 | |
Financing Receivable, Revolving | 19,360 | |
Total loans with credit quality measures | 58,243 | |
Commercial and Industrial | Internal Grade 14 | ||
Internal risk grades of non-covered loans | ||
2020 | 25,107 | |
2019 | 5,084 | |
2018 | 2,021 | |
2017 | 315 | |
2016 | 16 | |
2015 and Prior | 98 | |
Financing Receivable, Revolving | 1,408 | |
Total loans with credit quality measures | 34,049 | |
Commercial and Industrial | Mortgage Warehouse Lending | ||
Internal risk grades of non-covered loans | ||
Total loans with credit quality measures | 792,806 | |
Commercial and Industrial | Loans Funded Through Paycheck Protection Program | ||
Internal risk grades of non-covered loans | ||
Total loans with credit quality measures | 486,715 | |
Total loans | 486,700 | |
Construction and land development | ||
Internal risk grades of non-covered loans | ||
Total loans | 828,852 | 940,564 |
Construction and land development | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2020 | 557 | |
2018 | 1,253 | |
Total loans with credit quality measures | 1,810 | |
Construction and land development | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2020 | 13,207 | |
2018 | 2,539 | |
Total loans with credit quality measures | 15,746 | |
Construction and land development | Other | ||
Internal risk grades of non-covered loans | ||
2020 | 1,224 | |
Total loans with credit quality measures | 1,224 | |
Construction and land development | Internal Grade 1-3 | ||
Internal risk grades of non-covered loans | ||
2020 | 15,764 | |
2019 | 2,710 | |
2018 | 4,176 | |
2017 | 264 | |
2016 | 4,129 | |
2015 and Prior | 331 | |
Financing Receivable, Revolving | 624 | |
Total loans with credit quality measures | 27,998 | |
Construction and land development | Internal Grade 4-7 | ||
Internal risk grades of non-covered loans | ||
2020 | 202,624 | |
2019 | 103,864 | |
2018 | 63,135 | |
2017 | 3,210 | |
2016 | 2,596 | |
2015 and Prior | 3,142 | |
Financing Receivable, Revolving | 28,387 | |
Total loans with credit quality measures | 406,958 | |
Construction and land development | Internal Grade 8-11 | ||
Internal risk grades of non-covered loans | ||
2020 | 194,432 | |
2019 | 97,206 | |
2018 | 47,102 | |
2017 | 9,659 | |
2016 | 3,552 | |
2015 and Prior | 544 | |
Financing Receivable, Revolving | 7,951 | |
Total loans with credit quality measures | 360,446 | |
Construction and land development | Internal Grade 13 | ||
Internal risk grades of non-covered loans | ||
2020 | 8,684 | |
2019 | 29 | |
2017 | 5,385 | |
2015 and Prior | 65 | |
Total loans with credit quality measures | 14,163 | |
Construction and land development | Internal Grade 14 | ||
Internal risk grades of non-covered loans | ||
2019 | 405 | |
2015 and Prior | 102 | |
Total loans with credit quality measures | 507 | |
1 - 4 family residential | ||
Internal risk grades of non-covered loans | ||
Total loans | 629,938 | 791,020 |
1 - 4 family residential | FICO Score, Less than 620 | ||
Internal risk grades of non-covered loans | ||
2020 | 1,109 | |
2019 | 819 | |
2018 | 3,674 | |
2017 | 56 | |
2016 | 883 | |
2015 and Prior | 32,077 | |
Financing Receivable, Revolving | 318 | |
Total loans with credit quality measures | 38,936 | |
1 - 4 family residential | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2020 | 17,269 | |
2019 | 18,461 | |
2018 | 9,545 | |
2017 | 8,714 | |
2016 | 8,171 | |
2015 and Prior | 41,625 | |
Financing Receivable, Revolving | 1,289 | |
Total loans with credit quality measures | 105,074 | |
1 - 4 family residential | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2020 | 125,094 | |
2019 | 80,688 | |
2018 | 65,975 | |
2017 | 37,943 | |
2016 | 29,171 | |
2015 and Prior | 70,815 | |
Financing Receivable, Revolving | 5,313 | |
Total loans with credit quality measures | 414,999 | |
1 - 4 family residential | Substandard non-accrual | ||
Internal risk grades of non-covered loans | ||
2017 | 96 | |
2016 | 714 | |
2015 and Prior | 20,567 | |
Total loans with credit quality measures | 21,377 | |
1 - 4 family residential | Other | ||
Internal risk grades of non-covered loans | ||
2020 | 27,407 | |
2019 | 10,085 | |
2018 | 5,998 | |
2017 | 1,899 | |
2016 | 920 | |
2015 and Prior | 2,529 | |
Financing Receivable, Revolving | 714 | |
Total loans with credit quality measures | 49,552 | |
Consumer | ||
Internal risk grades of non-covered loans | ||
Total loans | 35,667 | 47,046 |
Consumer | FICO Score, Less than 620 | ||
Internal risk grades of non-covered loans | ||
2020 | 955 | |
2019 | 1,235 | |
2018 | 106 | |
2017 | 128 | |
2016 | 43 | |
2015 and Prior | 22 | |
Financing Receivable, Revolving | 334 | |
Total loans with credit quality measures | 2,823 | |
Consumer | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2020 | 5,194 | |
2019 | 2,627 | |
2018 | 478 | |
2017 | 536 | |
2016 | 118 | |
2015 and Prior | 79 | |
Financing Receivable, Revolving | 2,157 | |
Total loans with credit quality measures | 11,189 | |
Consumer | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2020 | 6,849 | |
2019 | 1,674 | |
2018 | 2,952 | |
2017 | 292 | |
2016 | 60 | |
2015 and Prior | 34 | |
Financing Receivable, Revolving | 3,054 | |
Total loans with credit quality measures | 14,915 | |
Consumer | Substandard non-accrual | ||
Internal risk grades of non-covered loans | ||
2017 | 27 | |
2015 and Prior | 1 | |
Total loans with credit quality measures | 28 | |
Consumer | Other | ||
Internal risk grades of non-covered loans | ||
2020 | 5,050 | |
2019 | 1,141 | |
2018 | 129 | |
2017 | 43 | |
2016 | 36 | |
Financing Receivable, Revolving | 313 | |
Total loans with credit quality measures | 6,712 | |
Broker-dealer | ||
Internal risk grades of non-covered loans | ||
Total loans with credit quality measures | 437,007 | |
Total loans | $ 437,007 | $ 576,527 |
Allowance for Credit Losses - N
Allowance for Credit Losses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for loan losses | |||||
Available for sale debt securities past due | $ 0 | ||||
Allowance for credit losses | 149,044 | $ 61,136 | $ 59,486 | $ 63,686 | |
Increase in allowance on individually evaluated loans | 20,200 | ||||
Increase in allowance on collectively evaluated loans | $ 76,100 | ||||
Allowance for Loan and Lease Losses Write-offs, Net | $ 21,100 | ||||
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||||
Allowance for loan losses | |||||
Allowance for credit losses | 73,700 | ||||
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Allowance for loan losses | |||||
Allowance for credit losses | 12,562 | ||||
Allowance in credit loss from expansion of horizon to life of loan | 18,900 | ||||
Non-credit component with allowance of previous categorized PCI loans | $ 6,300 |
Allowance for Credit Losses - A
Allowance for Credit Losses - Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | $ 61,136 | $ 59,486 | $ 61,136 | $ 59,486 | $ 63,686 | ||||||
Provision for (reversal of) credit losses | $ (3,482) | $ (602) | $ 66,026 | 34,549 | $ 6,880 | $ 47 | $ (672) | 951 | 96,491 | 7,206 | 5,088 |
Loans charged off | (24,040) | (8,489) | (13,777) | ||||||||
Recoveries on charged off loans | 2,895 | 2,933 | 4,489 | ||||||||
Balance, end of the year | 149,044 | 61,136 | 149,044 | 61,136 | 59,486 | ||||||
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 12,562 | 12,562 | |||||||||
Balance, end of the year | 12,562 | 12,562 | |||||||||
Commercial Real Estate | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 31,595 | 27,100 | 31,595 | 27,100 | 27,232 | ||||||
Provision for (reversal of) credit losses | 73,865 | 5,649 | 668 | ||||||||
Loans charged off | (4,517) | (1,160) | (800) | ||||||||
Recoveries on charged off loans | 613 | 6 | |||||||||
Balance, end of the year | 109,629 | 31,595 | 109,629 | 31,595 | 27,100 | ||||||
Commercial Real Estate | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 8,073 | 8,073 | |||||||||
Balance, end of the year | 8,073 | 8,073 | |||||||||
Commercial and Industrial | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 17,964 | 21,980 | 17,964 | 21,980 | 23,698 | ||||||
Provision for (reversal of) credit losses | 22,870 | (921) | 6,750 | ||||||||
Loans charged off | (18,158) | (5,924) | (12,741) | ||||||||
Recoveries on charged off loans | 1,834 | 2,829 | 4,273 | ||||||||
Balance, end of the year | 27,703 | 17,964 | 27,703 | 17,964 | 21,980 | ||||||
Commercial and Industrial | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 3,193 | 3,193 | |||||||||
Balance, end of the year | 3,193 | 3,193 | |||||||||
Construction and land development | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 4,878 | 6,061 | 4,878 | 6,061 | 7,847 | ||||||
Provision for (reversal of) credit losses | 1,222 | (1,183) | (1,792) | ||||||||
Loans charged off | (2) | ||||||||||
Recoveries on charged off loans | 2 | 6 | |||||||||
Balance, end of the year | 6,677 | 4,878 | 6,677 | 4,878 | 6,061 | ||||||
Construction and land development | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 577 | 577 | |||||||||
Balance, end of the year | 577 | 577 | |||||||||
1 - 4 family residential | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 6,386 | 3,956 | 6,386 | 3,956 | 4,245 | ||||||
Provision for (reversal of) credit losses | (1,717) | 3,276 | (292) | ||||||||
Loans charged off | (748) | (907) | (143) | ||||||||
Recoveries on charged off loans | 54 | 61 | 146 | ||||||||
Balance, end of the year | 3,946 | 6,386 | 3,946 | 6,386 | 3,956 | ||||||
1 - 4 family residential | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | (29) | (29) | |||||||||
Balance, end of the year | (29) | (29) | |||||||||
Consumer | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 265 | 267 | 265 | 267 | 311 | ||||||
Provision for (reversal of) credit losses | 86 | 459 | (15) | ||||||||
Loans charged off | (615) | (498) | (93) | ||||||||
Recoveries on charged off loans | 392 | 37 | 64 | ||||||||
Balance, end of the year | 876 | 265 | 876 | 265 | 267 | ||||||
Consumer | ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | 748 | 748 | |||||||||
Balance, end of the year | 748 | 748 | |||||||||
Broker-dealer | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, beginning of the year | $ 48 | $ 122 | 48 | 122 | 353 | ||||||
Provision for (reversal of) credit losses | 165 | (74) | (231) | ||||||||
Balance, end of the year | $ 213 | $ 48 | $ 213 | $ 48 | $ 122 |
Allowance for Credit Losses - O
Allowance for Credit Losses - Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the allowance for credit losses for loans with off-balance sheet credit exposures | |||
Balance, beginning of year | $ 2,075 | $ 2,366 | $ 1,932 |
Transition adjustment CECL accounting standard | 3,837 | ||
Other noninterest expense | (2,476) | 291 | (434) |
Balance, end of year | 8,388 | 2,075 | $ 2,366 |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Changes in the allowance for credit losses for loans with off-balance sheet credit exposures | |||
Balance, beginning of year | $ 5,900 | ||
Balance, end of year | $ 5,900 |
Cash and Due from Banks (Detail
Cash and Due from Banks (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and Due from Banks | |||
Cash on hand | $ 45,207 | $ 39,590 | |
Clearings and collection items | 82,396 | 129,055 | |
Deposits at Federal Reserve Bank | 874,998 | 232,019 | |
Deposits at Federal Home Loan Bank | 1,607 | 1,458 | |
Deposits in FDIC-insured institutions | 58,352 | 31,504 | |
Cash and due from banks | 1,062,560 | 433,626 | $ 598,999 |
Interest-bearing deposits | $ 878,000 | $ 235,400 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Premises and Equipment | |||
Premises and equipment, gross | $ 383,511 | $ 395,914 | |
Less accumulated depreciation and amortization | (171,916) | (185,539) | |
Premises and equipment, net | 211,595 | 210,375 | |
Gross assets under finance leases | 7,780 | 7,780 | |
Accumulated amortization for assets under finance leases | 4,768 | 4,178 | |
Rental income | 1,700 | 2,700 | $ 1,400 |
Depreciation and amortization expense | 27,900 | 27,300 | $ 30,800 |
Land and premises | |||
Premises and Equipment | |||
Premises and equipment, gross | 125,701 | 130,312 | |
Furniture and equipment | |||
Premises and Equipment | |||
Premises and equipment, gross | $ 257,810 | $ 265,602 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill and Other (Details) - USD ($) $ in Thousands | Aug. 01, 2018 | Nov. 30, 2012 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Other Intangible Assets | ||||
Carrying amount of goodwill | $ 267,447 | $ 267,447 | ||
Other intangible assets, net | $ 20,364 | $ 26,666 | ||
PPC | ||||
Goodwill and Other Intangible Assets | ||||
Goodwill in connection with acquisition | $ 227,800 | |||
BORO | ||||
Goodwill and Other Intangible Assets | ||||
Carrying amount of goodwill | $ 39,627 | |||
Goodwill in connection with acquisition | $ 39,600 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $ 85,040 | $ 85,040 | |
Accumulated Amortization | (64,676) | (58,374) | |
Net Intangible Assets | 20,364 | 26,666 | |
Amortization expense related to intangible assets | 6,301 | 7,567 | $ 8,026 |
Core Deposits | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | 48,930 | 48,930 | |
Accumulated Amortization | (40,997) | (36,576) | |
Net Intangible Assets | $ 7,933 | $ 12,354 | |
Core Deposits | Minimum | |||
Carrying value of intangible assets subject to amortization | |||
Estimated Useful Life | 4 years | 4 years | |
Core Deposits | Maximum | |||
Carrying value of intangible assets subject to amortization | |||
Estimated Useful Life | 12 years | 12 years | |
Trademarks and Trade Names | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $ 16,500 | $ 16,500 | |
Accumulated Amortization | (7,563) | (6,812) | |
Net Intangible Assets | $ 8,937 | $ 9,688 | |
Estimated Useful Life | 20 years | 20 years | |
Noncompete Agreements | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $ 4,310 | $ 4,310 | |
Accumulated Amortization | $ (4,310) | $ (4,310) | |
Estimated Useful Life | 4 years | 4 years | |
Customer contracts and relationships | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $ 15,300 | $ 15,300 | |
Accumulated Amortization | (11,806) | (10,676) | |
Net Intangible Assets | $ 3,494 | $ 4,624 | |
Customer contracts and relationships | Minimum | |||
Carrying value of intangible assets subject to amortization | |||
Estimated Useful Life | 12 years | 12 years | |
Customer contracts and relationships | Maximum | |||
Carrying value of intangible assets subject to amortization | |||
Estimated Useful Life | 14 years | 14 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Estimated aggregate future amortization expense for intangible assets | ||
2021 | $ 5,080 | |
2022 | 3,967 | |
2023 | 2,860 | |
2024 | 1,826 | |
2025 | 1,028 | |
Thereafter | 5,603 | |
Net Intangible Assets | $ 20,364 | $ 26,666 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in fair value of mortgage servicing rights | |||
Balance, beginning of year | $ 55,504 | $ 66,102 | $ 54,714 |
Additions | 162,914 | 13,755 | 25,028 |
Sales | (36,750) | (9,303) | |
Changes in fair value: Due to changes in model inputs or assumptions | (27,261) | (16,054) | 159 |
Changes in fair value: Due to customer payoffs | (10,665) | (8,299) | (4,496) |
Balance, end of year | 143,742 | 55,504 | $ 66,102 |
Mortgage loans serviced for others | $ 14,643,623 | $ 4,948,441 | |
MSR asset as a percentage of serviced mortgage loans | 0.98% | 1.12% | |
MSR | |||
Key Assumptions | |||
Weighted average constant prepayment rate (as a percent) | 12.15% | 13.16% | |
Weighted average discount rate (as a percent) | 14.60% | 11.14% | |
Weighted average life (in years) | 6 years 3 months 18 days | 6 years |
Mortgage Servicing Rights - Sen
Mortgage Servicing Rights - Sensitivity Analysis (Details) - MSR - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Sensitivity analysis | |||
Constant prepayment rate: Impact of 10% adverse change | $ (5,639) | $ (3,072) | |
Constant prepayment rate: Impact of 20% adverse change | (11,164) | (5,943) | |
Discount rate: Impact of 10% adverse change | (6,435) | (2,094) | |
Discount rate: Impact of 20% adverse change | (12,287) | (4,028) | |
Contractually specified servicing fees, late fees and ancillary fees | $ 35,400 | $ 25,300 | $ 23,300 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deposits | ||
Noninterest-bearing demand | $ 3,612,384 | $ 2,769,556 |
Interest-bearing: | ||
Demand | 2,399,341 | 1,881,614 |
Brokered - demand | 282,426 | |
Money market | 2,716,878 | 2,641,116 |
Brokered - money market | 124,243 | 5,000 |
Savings | 276,327 | 199,076 |
Time | 1,506,435 | 1,505,375 |
Brokered - time | 324,285 | 30,477 |
Total deposits | 11,242,319 | $ 9,032,214 |
Time deposits that meet or exceed FDIC insurance limit | 1,100,000 | |
Scheduled maturities of interest-bearing time deposits | ||
2021 | 1,600,039 | |
2022 | 148,404 | |
2023 | 49,026 | |
2024 | 22,091 | |
2025 and thereafter | 11,160 | |
Time deposits | $ 1,830,720 |
Short-term Borrowings (Details)
Short-term Borrowings (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Short-term borrowings | |||
Short-term borrowings | $ 695,798 | $ 1,424,010 | |
Hilltop Broker-Dealers | |||
Short-term borrowings | |||
Weighted average interest rate on short-term bank loan borrowings (as a percent) | 0.00% | 2.52% | |
Federal Funds Purchased. | |||
Short-term borrowings | |||
Short-term borrowings | $ 180,325 | $ 81,625 | |
Securities Sold under Agreements to Repurchase | |||
Short-term borrowings | |||
Short-term borrowings | 237,856 | 612,125 | |
FHLB notes | |||
Short-term borrowings | |||
Short-term borrowings | 600,000 | ||
Average balance during the period | $ 38,634 | $ 329,356 | $ 214,110 |
Average interest rate during the period | 1.63% | 2.16% | 2.09% |
Maximum month-end balance during the year | $ 150,000 | $ 700,000 | $ 675,000 |
Average interest rate at end of period (as a percent) | 1.56% | ||
Amount of available collateral | $ 4,400,000 | ||
FHLB notes | Maximum | |||
Short-term borrowings | |||
Maturity term of debt | 365 days | ||
Short Term Bank Loans. | |||
Short-term borrowings | |||
Short-term borrowings | $ 111,000 | ||
Commercial paper | |||
Short-term borrowings | |||
Short-term borrowings | $ 277,617 | $ 19,260 | |
Number of commercial paper programs initiated | item | 2 | ||
Weighted average maturity term | 146 days | ||
Weighted average interest rate on short-term bank loan borrowings (as a percent) | 1.23% | ||
Weighted average remaining life | 70 days | ||
Debt instrument, collateral | $ 296,300 | ||
Commercial paper | Minimum | |||
Short-term borrowings | |||
Maturity term of debt | 14 days | ||
Commercial paper | Maximum | |||
Short-term borrowings | |||
Maturity term of debt | 270 days | ||
Series 2019-1 CP Notes | |||
Short-term borrowings | |||
Maximum borrowing capacity | $ 300,000 | ||
Series 2019-2 CP Notes | |||
Short-term borrowings | |||
Maximum borrowing capacity | 200,000 | ||
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | |||
Short-term borrowings | |||
Average balance during the period | $ 509,577 | $ 605,858 | $ 701,622 |
Average interest rate during the period | 0.89% | 2.48% | 1.96% |
Maximum month-end balance during the year | $ 714,507 | $ 693,750 | $ 849,568 |
Average interest rate at end of period (as a percent) | 0.25% | 1.97% | |
Securities underlying the agreements at end of period: Carrying value | $ 237,913 | $ 612,515 | |
Securities underlying the agreements at end of period: Estimated fair value | $ 262,554 | $ 661,023 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | May 07, 2020 | Jun. 22, 2015 | Apr. 09, 2015 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 28, 2015 |
Debt Instrument | ||||||
Notes payable | $ 381,987 | $ 256,269 | ||||
Series B Preferred Stock | ||||||
Debt Instrument | ||||||
Aggregate liquidation value | $ 114,100 | |||||
Unpaid dividend | $ 400 | |||||
Senior Notes due April 2025 | ||||||
Debt Instrument | ||||||
Notes payable | 148,937 | 148,768 | ||||
Unamortized discount | 1,063 | 1,232 | ||||
Period before maturity for redemption of Senior Notes | 3 months | |||||
Interest rate (as a percent) | 5.00% | |||||
Percentage of redemption price | 100.00% | |||||
Senior Notes due April 2025 | Private Placement | ||||||
Debt Instrument | ||||||
Aggregate principal amount | $ 150,000 | |||||
Interest rate (as a percent) | 5.00% | |||||
Net proceeds from the offering, after deducting estimated fee and expenses and the initial purchaser' discounts | $ 148,000 | |||||
Subordinated Debt | ||||||
Debt Instrument | ||||||
Percentage of principal amount representing price to public | 100.00% | |||||
Underwriting discounts, fees and expenses | $ 3,400 | |||||
Net proceeds from the offering, after deducting estimated fee and expenses and the initial purchaser' discounts | $ 196,600 | |||||
Percentage of redemption price | 100.00% | |||||
Subordinated Notes due May 2030 | ||||||
Debt Instrument | ||||||
Notes payable | 49,207 | |||||
Unamortized discount | 793 | |||||
Aggregate principal amount | $ 50,000 | |||||
Interest rate (as a percent) | 5.75% | |||||
Subordinated Notes due May 2030 | Three-month term SOFR | ||||||
Debt Instrument | ||||||
Margin on interest rate (as a percent) | 5.68% | |||||
Subordinated Notes Due May 2035 | ||||||
Debt Instrument | ||||||
Notes payable | 147,608 | |||||
Unamortized discount | 2,392 | |||||
Aggregate principal amount | $ 150,000 | |||||
Interest rate (as a percent) | 6.125% | |||||
Subordinated Notes Due May 2035 | Three-month term SOFR | ||||||
Debt Instrument | ||||||
Margin on interest rate (as a percent) | 5.80% | |||||
FHLB notes | ||||||
Debt Instrument | ||||||
Notes payable | 28,848 | |||||
Unamortized premium | 0 | 146 | ||||
Ventures Management lines of credit | ||||||
Debt Instrument | ||||||
Notes payable | 36,235 | $ 78,653 | ||||
Maximum borrowing capacity | 170,000 | |||||
Outstanding borrowing | $ 47,500 | |||||
Calculated index rate (as a percent) | 3.27% | |||||
Single unaffiliated bank | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | $ 80,000 | |||||
Bank | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 90,000 | |||||
Outstanding borrowing | $ 11,300 | |||||
Bank | Minimum | ||||||
Debt Instrument | ||||||
Interest rate (as a percent) | 3.13% | |||||
Bank | Maximum | ||||||
Debt Instrument | ||||||
Interest rate (as a percent) | 3.75% |
Notes Payable - Scheduled Matur
Notes Payable - Scheduled Maturities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Scheduled maturities | |
2021 | $ 36,235 |
2025 | 150,000 |
Thereafter | 200,000 |
Total Notes Payable | $ 386,235 |
Lease - Narrative (Details)
Lease - Narrative (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Option to extend period - Operating | 10 years |
Option to extend period - Finance | 10 years |
Option to extend - Operating | true |
Option to extend - Finance | true |
Option to terminate period - Operating | 1 year |
Option to terminate period - Finance | 1 year |
Option to terminate - Operating | true |
Option to terminate - Finance | true |
Lease - Supplemental balance sh
Lease - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finance leases: | ||
Premises and equipment | $ 7,780 | $ 7,780 |
Accumulated depreciation | (4,768) | (4,178) |
Premises and equipment, net | $ 3,012 | $ 3,602 |
Lease - Components of lease cos
Lease - Components of lease costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Components of operating lease costs | ||
Operating lease cost | $ 41,903 | $ 44,331 |
Less operating lease and sublease income | (1,676) | (2,657) |
Net operating lease cost | 40,227 | 41,674 |
Amortization of ROU assets | 590 | 590 |
Interest on lease liabilities | 561 | 596 |
Total finance lease cost | $ 1,151 | $ 1,186 |
Lease - Supplemental cash flow
Lease - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Operating cash flows from operating leases | $ 31,850 | $ 37,527 |
Operating cash flows from finance leases | 561 | 587 |
Financing cash flows from finance leases | 636 | 603 |
Right-of-use assets obtained in exchange for new lease obligations - Operating leases | $ 11,723 | $ 27,055 |
Lease - Lease terms and discoun
Lease - Lease terms and discount rates (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases | ||
Operating - Weighted Average Remaining Lease Term (Years) | 5 years 6 months | 5 years 10 months 24 days |
Finance - Weighted Average Remaining Lease Term (Years) | 5 years 7 months 6 days | 6 years 6 months |
Operating - Weighted Average Discount Rate | 4.67% | 5.29% |
Finance - Weighted Average Discount Rate | 4.81% | 4.79% |
Lease - Lease maturities - ASC
Lease - Lease maturities - ASC 842 (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating leases maturities | ||
2021 | $ 36,132 | |
2022 | 28,189 | |
2023 | 22,645 | |
2024 | 15,395 | |
2025 | 11,177 | |
Thereafter | 29,636 | |
Total minimum lease payments | 143,174 | |
Less amount representing interest | (17,724) | |
Lease liabilities | 125,450 | $ 125,619 |
Finance Leases maturities: | ||
2021 | 1,212 | |
2022 | 1,241 | |
2023 | 1,280 | |
2024 | 1,163 | |
2025 | 886 | |
Thereafter | 1,411 | |
Total minimum lease payments | 7,193 | |
Less amount representing interest | (2,334) | |
Lease liabilities | $ 4,859 |
Lease - Operating leases that h
Lease - Operating leases that have not yet commenced (Details) $ in Millions | Dec. 31, 2020USD ($) |
Leases | |
Additional operating leases that have not yet commenced | $ 22.9 |
Minimum | |
Leases | |
Expected to commence | 2 years |
Maximum | |
Leases | |
Expected to commence | 11 years |
Junior Subordinated Debenture_3
Junior Subordinated Debentures and Trust Preferred Securities (Details) | 12 Months Ended | ||||
Dec. 31, 2020USD ($)item | Feb. 22, 2008USD ($) | Sep. 17, 2003USD ($) | Mar. 26, 2003USD ($) | Jul. 31, 2001USD ($) | |
PPC | |||||
Junior subordinated debentures and trust preferred securities | |||||
Number of statutory trusts owned by subsidiary | item | 4 | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Junior Subordinated Debt | Four statutory trusts | |||||
Junior subordinated debentures and trust preferred securities | |||||
Stated term | 30 years | ||||
Average interest rate (as a percent) | 3.45% | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Junior Subordinated Debt | Four statutory trusts | three-month LIBOR | |||||
Junior subordinated debentures and trust preferred securities | |||||
Margin on interest rate | 3-month LIBOR | ||||
Average spread on variable rate basis (as a percent) | 3.22% | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Junior Subordinated Debt | P C C Statutory Trust I | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | $ 18,042,000 | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Junior Subordinated Debt | P C C Statutory Trust I I | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | $ 18,042,000 | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Junior Subordinated Debt | P C C Statutory Trust I I I | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | $ 15,464,000 | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Junior Subordinated Debt | PCC Statutory Trust IV | |||||
Junior subordinated debentures and trust preferred securities | |||||
Amount | $ 15,464,000 | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Preferred Class A [Member] | Four statutory trusts | |||||
Junior subordinated debentures and trust preferred securities | |||||
Floating rate preferred securities issued by the trusts | $ 65,000,000 | ||||
PPC | Variable Interest Entity, Not Primary Beneficiary | Common Class A [Member] | Four statutory trusts | |||||
Junior subordinated debentures and trust preferred securities | |||||
Floating rate preferred securities issued by the trusts | $ 2,012,000 | ||||
PPC | CONNECTICUT | |||||
Junior subordinated debentures and trust preferred securities | |||||
Number of statutory trusts owned by subsidiary, which were formed under laws of state | item | 3 | ||||
PCC Statutory Trust IV | Delaware | |||||
Junior subordinated debentures and trust preferred securities | |||||
Number of statutory trusts owned by subsidiary, which were formed under laws of state | item | 1 |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||||||||||
Federal | $ 97,338 | $ 58,562 | $ 18,977 | ||||||||
State | 19,150 | 9,215 | 2,241 | ||||||||
Total | 116,488 | 67,777 | 21,218 | ||||||||
Deferred: | |||||||||||
Federal | 13,325 | (2,690) | 11,153 | ||||||||
State | 3,258 | (1,373) | 1,856 | ||||||||
Total | 16,583 | (4,063) | 13,009 | ||||||||
Income tax provision (benefit) | $ 39,295 | $ 46,820 | $ 31,808 | $ 15,148 | $ 13,579 | $ 21,472 | $ 18,526 | $ 10,137 | $ 133,071 | $ 63,714 | $ 34,227 |
Statutory Federal income tax rate (as a percent) | 21.00% | 21.00% | 21.00% | ||||||||
Reconciliation of the income tax provision (benefit) and the amount that would be computed by applying the statutory federal income tax rate to income (loss) before income taxes | |||||||||||
Computed tax at federal statutory rate | $ 118,629 | $ 59,392 | $ 32,572 | ||||||||
Tax effect of: | |||||||||||
Nondeductible expenses | 2,304 | 2,681 | 1,373 | ||||||||
State income taxes | 17,702 | 6,195 | 3,236 | ||||||||
Tax-exempt income, net | (1,706) | (1,727) | (1,432) | ||||||||
Minority interest | (4,587) | (1,614) | (900) | ||||||||
Other | 729 | (1,213) | (622) | ||||||||
Income tax provision (benefit) | $ 39,295 | $ 46,820 | $ 31,808 | $ 15,148 | $ 13,579 | $ 21,472 | $ 18,526 | $ 10,137 | $ 133,071 | $ 63,714 | $ 34,227 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating and built-in-loss carryforward | $ 5,736 | $ 7,823 |
Purchase accounting adjustment - loans | 11,814 | 15,850 |
Allowance for credit losses | 35,542 | 14,796 |
Compensation and benefits | 22,513 | 17,723 |
Legal and other reserves | 7,097 | 1,272 |
Foreclosed property | 1,913 | 5,456 |
Operating lease liabilities | 29,348 | 29,125 |
Other | 9,717 | 6,475 |
Deferred tax assets | 123,680 | 98,520 |
Deferred tax liabilities: | ||
Premises and equipment | 20,076 | 10,079 |
Intangible assets | 4,518 | 6,098 |
Derivatives | 17,688 | 4,342 |
Loan servicing | 34,868 | 13,278 |
Operating lease ROU assets | 24,755 | 26,498 |
Other | 8,015 | 5,251 |
Deferred tax liabilities | 109,920 | 65,546 |
Net deferred tax asset | $ 13,760 | $ 32,974 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Statutory Federal income tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
Effective income tax rate (as a percent) | 23.60% | 22.50% | 22.10% |
Net operating loss carryforwards | $ 2,700 | $ 12,200 | |
Net operating loss carryforwards, tax effected basis | 600 | 2,400 | |
Recognized built-in loss carryforward ("RBIL") | $ 20,500 | ||
Realized built-in-loss recognition period | 5 years | ||
Valuation allowance on deferred tax assets for net operating loss carryforwards | $ 0 | $ 0 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Uncertain tax positions | |||
Unrecognized tax benefits if recognized would favorably impact the effective tax rate | $ 3,000 | $ 2,100 | |
Unrecognized Tax Benefits | |||
Balance, beginning of year | 2,808 | 3,056 | $ 1,574 |
Increases related to tax positions taken during a prior year | 327 | 317 | 770 |
Decreases related to tax positions taken during a prior year | (423) | ||
Increases related to tax positions taken during the current year | 1,017 | 288 | 712 |
Decreases related to expiration of the statute of limitations | (374) | (430) | |
Balance, end of year | $ 3,778 | $ 2,808 | $ 3,056 |
Employee Benefits (Details)
Employee Benefits (Details) $ in Millions | Jan. 01, 2015USD ($) | Nov. 30, 2012item | Jul. 31, 2020 | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2001USD ($) |
Employee Benefits | |||||||
Matching contributions | $ 17.7 | $ 15.5 | $ 14.8 | ||||
Number of executive officers of PlainsCapital with retention agreements | item | 2 | ||||||
Liability, including interest | 2.6 | 2.6 | |||||
Flexible premium universal life insurance | |||||||
Amount of insurance purchased | $ 15 | ||||||
Carrying value of the policies | 26.8 | 26.2 | |||||
Income related to the policies | $ 0.5 | $ 1 | $ 0.6 | ||||
ESPP | |||||||
Employee Benefits | |||||||
Percentage of shares to be purchased at fair market value | 90.00% | ||||||
SWS Plan | |||||||
Employee Benefits | |||||||
Deferred compensation plan, matching percentage | 15.00% | ||||||
Deferred compensation plan, vesting period | 4 years | ||||||
Contributions allowed under plan | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transactions | ||
Aggregate remaining lease obligation | $ 143,174 | |
Diamond A Financial LP | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 18.90% | |
PlainsCapital (the Bank) | ||
Related Party Transactions | ||
Deposits of related parties held | $ 154,100 | $ 141,200 |
Chief Executive Officer | Diamond A Financial LP | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 49.00% | |
Directors Executive Officers and Affiliates | PlainsCapital (the Bank) | ||
Related Party Transactions | ||
Loans to related parties | $ 600 | 5 |
Total principal additions to loans | 600 | |
Total principal payments | 2 | |
Lessor | PlainsCapital (the Bank) | Lease Agreements | ||
Related Party Transactions | ||
Future minimum payments due annually through 2028 | 500 | |
Aggregate remaining lease obligation | 4,200 | |
Related Party Company | PlainsCapital (the Bank) | ||
Related Party Transactions | ||
Loan Purchases | $ 500 | $ 700 |
Related Party Transactions - Hi
Related Party Transactions - Hilltop Plaza Investment (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2018USD ($)atenantitem | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | |
Related Party Transactions | |||||
Operating lease liabilities | $ 125,450 | $ 125,619 | |||
Retained earnings | $ 986,792 | $ 644,860 | |||
Hilltop Plaza | |||||
Related Party Transactions | |||||
Construction Loan | $ 41,000 | ||||
Operating lease liabilities | $ 18,900 | ||||
Costs incurred and capitalized | $ 27,800 | ||||
Hilltop and the Bank | Hilltop Plaza | |||||
Related Party Transactions | |||||
Number of office and retail lease | item | 2 | ||||
Total base rent | $ 35,000 | ||||
Rent abated | 9 months | ||||
Hilltop | Hilltop Plaza | |||||
Related Party Transactions | |||||
Term of contract | 129 months | ||||
PlainsCapital (the Bank) | Hilltop Plaza | |||||
Related Party Transactions | |||||
Term of contract | 129 months | ||||
Hilltop Investments I, LLC | |||||
Related Party Transactions | |||||
Investment contribution | $ 19,300 | ||||
Diamond Ground, LLC | |||||
Related Party Transactions | |||||
Investment contribution | $ 19,300 | ||||
Park Plaza | Hilltop Plaza | |||||
Related Party Transactions | |||||
Ownership interest (as a percent) | 50.00% | ||||
HTH Hillcrest Project LLC | Hilltop Plaza | |||||
Related Party Transactions | |||||
Ownership interest (as a percent) | 25.00% | ||||
Cash contributions | $ 5,300 | ||||
Diamond Hillcrest | Hilltop Plaza | |||||
Related Party Transactions | |||||
Ownership interest (as a percent) | 25.00% | ||||
Cash contributions | $ 5,300 | ||||
Hillcrest Land LLC | |||||
Related Party Transactions | |||||
Acres of land | a | 1.7 | ||||
Payments to acquire land | $ 38,500 | ||||
Primary Beneficiary | item | 0 | ||||
Ground lease term | 99 years | ||||
Number of tenants | tenant | 3 | ||||
Ground lease commences | 18 months | ||||
Ground lease | $ 1,800 | ||||
Annual ground lease increase (as percent) | 1.00% | ||||
Hillcrest Land LLC | Park Plaza | |||||
Related Party Transactions | |||||
Leasehold interest | 50.00% | ||||
Hillcrest Land LLC | HTH Hillcrest Project LLC | |||||
Related Party Transactions | |||||
Leasehold interest | 25.00% | ||||
Hillcrest Land LLC | Diamond Hillcrest | |||||
Related Party Transactions | |||||
Leasehold interest | 25.00% | ||||
Diamond Ground, LLC | Jeremy Ford | |||||
Related Party Transactions | |||||
Ownership interest (as a percent) | 10.20% | ||||
Diamond Ground, LLC | Wife of Corey Prestidge | |||||
Related Party Transactions | |||||
Ownership interest (as a percent) | 10.10% | ||||
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-02 | Hilltop Plaza | |||||
Related Party Transactions | |||||
Retained earnings | $ 1,400 |
Commitments and Contingencies -
Commitments and Contingencies - Legal (Details) $ in Thousands | Nov. 30, 2012item | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Reserve for Indemnification Liability: | ||||||
Number of executive officers | item | 2 | |||||
Retention Agreement | Chief Executive Officer | ||||||
Reserve for Indemnification Liability: | ||||||
Period from date of agreement at which initial renewal of agreement may occur | 2 years | |||||
Renewal period of contract | 1 year | |||||
Representation and Warranty Claims | ||||||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | ||||||
Balance, beginning of year | $ 32,144 | $ 33,784 | $ 33,702 | |||
Claims made | 17,429 | 20,054 | 22,156 | |||
Claims resolved with no payment | (7,778) | (14,154) | (13,169) | |||
Repurchases | (11,588) | (6,170) | (8,250) | |||
Indemnification payments | (122) | (1,370) | (655) | |||
Balance, end of year | 30,085 | 32,144 | 33,784 | |||
Reserve for Indemnification Liability: | ||||||
Total | 32,144 | 32,144 | 33,702 | $ 30,085 | $ 32,144 | |
Indemnification Agreement | ||||||
Commitments and Contingencies | ||||||
Provision for indemnification losses | 11,200 | 3,100 | 3,200 | |||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | ||||||
Balance, beginning of year | 11,776 | 10,701 | 23,472 | |||
Additions for new sales | 9,991 | 3,116 | 3,170 | |||
Repurchases | (768) | (495) | (612) | |||
Early payment defaults | (624) | (380) | (368) | |||
Indemnification payments | (39) | (352) | (13,687) | |||
Change in reserves for loans sold in prior years | 1,195 | (814) | (1,274) | |||
Balance, end of year | 21,531 | 11,776 | 10,701 | |||
Reserve for Indemnification Liability: | ||||||
Specific claims | 961 | 1,071 | ||||
Incurred but not reported claims | 20,570 | 10,705 | ||||
Total | $ 21,531 | $ 10,701 | 23,472 | 21,531 | 11,776 | |
Settlement Agreement with DOJ And HUD | ||||||
Commitments and Contingencies | ||||||
Payments for Legal Settlements | $ 13,500 | |||||
PlainsCapital (the Bank) | ||||||
Commitments and Contingencies | ||||||
Aggregate amount of federal funds purchased and sold for which the Bank acts as an agent on behalf of certain correspondent banks | $ 2,500 | $ 0 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Details) $ in Millions | Dec. 31, 2020USD ($) |
Unused commitments to extend credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 1,900 |
Standby letters of credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 91.5 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock based compensation | |||
Compensation expense | $ 14.6 | $ 11.8 | $ 9.1 |
RSUs | |||
Stock based compensation | |||
Vesting period | 3 years | ||
Transfer restrictions period | 1 year | ||
Board of Directors | |||
Stock based compensation | |||
Common shares granted to members of board of directors as compensation for director services | 31,222 | 26,659 | 30,400 |
2012 Plan | |||
Stock based compensation | |||
Number of additional awards permissible under the plan | 0 | ||
2020 Plan | |||
Stock based compensation | |||
Number of awards approved for grant (in shares) | 3,650,000 | ||
Common stock remaining available for issuance (in shares) | 3,428,547 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - RSUs - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of shares outstanding | |||
Balance at the beginning of the period ( in shares) | 1,437 | 1,270 | 1,318 |
Granted (in shares) | 777 | 719 | 510 |
Vested/Released (in shares) | (350) | (496) | (406) |
Forfeited (in shares) | (31) | (56) | (152) |
Balance at the end of the period ( in shares) | 1,833 | 1,437 | 1,270 |
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 22.64 | $ 22.44 | $ 20.89 |
Grant date fair value (in dollars per share) | 21.79 | 20.02 | 24 |
Vested/Released (in dollars per share) | 26.83 | 18.17 | 19.92 |
Forfeited (in dollars per share) | 22.38 | 24.12 | 20.97 |
Balance at the end of the period (in dollars per share) | $ 21.48 | $ 22.64 | $ 22.44 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - RSUs - USD ($) $ in Millions | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Stock based compensation | ||||
Vested/Released number of shares withheld to satisfy employee statutory tax obligations (in shares) | 238,914 | |||
Vested RSUs which require deferral of share settlement and statutory tax obligations | 5,482 | 5,482 | ||
Number of shares awarded (in shares) | 777,000 | 719,000 | 510,000 | |
Number of awards subject to time-based vesting (in shares) | 1,543,756 | |||
Number of awards vesting upon achievement of performance goals (in shares) | 289,493 | |||
Vesting period | 3 years | |||
Unrecognized compensation expense | $ 20.1 | $ 20.1 | ||
Weighted average period for unrecognized compensation expense (in years) | 1 year 5 months 26 days | |||
Certain Executives and Key Employees | ||||
Stock based compensation | ||||
Number of shares awarded (in shares) | 763,140 | |||
Number of awards subject to time-based vesting (in shares) | 636,208 | |||
Number of awards vesting upon achievement of performance goals (in shares) | 122,232 | |||
Vesting period | 3 years |
Regulatory Matters - Minimum Ca
Regulatory Matters - Minimum Capital Requirements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Regulatory matters | ||
Regulatory capital effects from CECL transitionary period | 5 years | |
PlainsCapital (the Bank) | ||
Tier 1 capital (to average assets) | ||
Actual Amount | $ 1,385,842 | $ 1,236,289 |
Actual Ratio (as a percent) | 10.44 | 11.61 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 4.00% | 4.00% |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 5 | 5 |
Common equity Tier 1 capital (to risk weighted assets) | ||
Actual Amount | $ 1,385,842 | $ 1,236,289 |
Actual Ratio (as a percent) | 14.40 | 13.45 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 7.00% | 7.00% |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 6.50% | 6.50% |
Tier 1 capital (to risk-weighted assets) | ||
Actual Amount | $ 1,385,842 | $ 1,236,289 |
Actual Ratio (as a percent) | 14.40 | 13.45 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 8.50% | 8.50% |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 8 | 8 |
Total capital (to risk-weighted assets) | ||
Actual Amount | $ 1,470,364 | $ 1,299,453 |
Actual Ratio (as a percent) | 15.27 | 14.13 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 10.50% | 10.50% |
To Be Well Capitalized Minimum Capital Requirements, Ratio (as a percent) | 10 | 10 |
Hilltop | ||
Tier 1 capital (to average assets) | ||
Actual Amount | $ 2,111,580 | $ 1,822,970 |
Actual Ratio (as a percent) | 12.64 | 12.71 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 4.00% | 4.00% |
Common equity Tier 1 capital (to risk weighted assets) | ||
Actual Amount | $ 2,046,580 | $ 1,776,381 |
Actual Ratio (as a percent) | 18.97 | 16.70 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 7.00% | 7.00% |
Tier 1 capital (to risk-weighted assets) | ||
Actual Amount | $ 2,111,580 | $ 1,822,970 |
Actual Ratio (as a percent) | 19.57 | 17.13 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 8.50% | 8.50% |
Total capital (to risk-weighted assets) | ||
Actual Amount | $ 2,409,684 | $ 1,867,771 |
Actual Ratio (as a percent) | 22.34 | 17.55 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio (as a percent) | 10.50% | 10.50% |
Regulatory Matters - Reconcilia
Regulatory Matters - Reconciliation (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||
Total equity capital | $ 2,323,939 | $ 2,103,039 |
PlainsCapital (the Bank) | ||
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||
Total equity capital | 1,654,249 | 1,523,549 |
Add: | ||
Net unrealized holding losses (gains) on securities available for sale and held in trust | (17,763) | (9,452) |
CECL transition adjustment | 22,905 | |
Deduct: | ||
Goodwill and other disallowed intangible assets | (273,330) | (276,249) |
Other | (219) | (1,559) |
Common equity Tier 1 capital (as defined) | 1,385,842 | 1,236,289 |
Deduct: | ||
Tier 1 capital (as defined) | 1,385,842 | 1,236,289 |
Add: Allowable Tier 2 capital | ||
Allowance for credit losses, including unfunded commitments | 120,334 | 63,164 |
Deduct: | ||
Additional Tier 2 capital deduction | (35,812) | |
Total capital (as defined) | 1,470,364 | 1,299,453 |
Hilltop | ||
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||
Total equity capital | 2,323,939 | 2,103,039 |
Add: | ||
Net unrealized holding losses (gains) on securities available for sale and held in trust | (17,763) | (11,419) |
CECL transition adjustment | 23,842 | |
Deduct: | ||
Goodwill and other disallowed intangible assets | (283,187) | (313,756) |
Other | (251) | (1,483) |
Common equity Tier 1 capital (as defined) | 2,046,580 | 1,776,381 |
Add: Tier 1 capital | ||
Trust preferred securities | 65,000 | 65,000 |
Deduct: | ||
Additional Tier 1 capital deductions | (18,411) | |
Tier 1 capital (as defined) | 2,111,580 | 1,822,970 |
Add: Allowable Tier 2 capital | ||
Allowance for credit losses, including unfunded commitments | 134,853 | 63,212 |
Capital instruments | 200,000 | |
Deduct: | ||
Additional Tier 2 capital deduction | (36,749) | (18,411) |
Total capital (as defined) | $ 2,409,684 | $ 1,867,771 |
Regulatory Matters - Net Capita
Regulatory Matters - Net Capital Position, Broker-Dealers (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 290,357 | $ 157,436 | $ 133,993 |
Hilltop Securities | |||
Net Capital | |||
Net capital | 291,228 | ||
Less required net capital | 7,045 | ||
Excess net capital | $ 284,183 | ||
Net capital as a percentage of aggregate debit items | 82.70% | ||
Net capital in excess of 5% aggregate debt items | $ 273,616 | ||
Momentum Independent Network | |||
Net Capital | |||
Net capital | 3,220 | ||
Less required net capital | 250 | ||
Excess net capital | 2,970 | ||
Hilltop Broker-Dealers | |||
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 290,400 | $ 157,400 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 28, 2021 | Nov. 17, 2020 | Sep. 23, 2020 | Aug. 20, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2019 | Jul. 31, 2018 | Jan. 31, 2018 |
Stock repurchase program | |||||||||||||||||||||
Cash dividends declared per common share | $ 0.12 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.36 | $ 0.32 | $ 0.28 | |||||||||
Cash dividends paid | $ 32,500 | $ 29,600 | $ 26,700 | ||||||||||||||||||
Earnings available for dividend payments without regulatory approval | $ 248,100 | 248,100 | |||||||||||||||||||
Repurchase common stock authorized amount | $ 75,000 | $ 75,000 | $ 50,000 | $ 100,000 | $ 50,000 | ||||||||||||||||
Payments to repurchase shares | $ 15,200 | $ 208,664 | $ 73,385 | $ 58,990 | |||||||||||||||||
Repurchase of common stock (in shares) | 720,901 | 3,390,247 | 2,729,568 | ||||||||||||||||||
Average price (per share) | $ 21.13 | $ 21.64 | $ 21.61 | ||||||||||||||||||
Securities Purchase Agreement | |||||||||||||||||||||
Stock repurchase program | |||||||||||||||||||||
Payments to repurchase shares | $ 48,400 | ||||||||||||||||||||
Repurchase of common stock (in shares) | 2,175,404 | ||||||||||||||||||||
Average price (per share) | $ 22.25 | ||||||||||||||||||||
Tender Offer Agreement | |||||||||||||||||||||
Stock repurchase program | |||||||||||||||||||||
Aggregate cash purchase price | $ 350,000 | ||||||||||||||||||||
Payments to repurchase shares | $ 193,400 | ||||||||||||||||||||
Repurchase of common stock (in shares) | 8,058,947 | ||||||||||||||||||||
Average price (per share) | $ 24 |
Other Noninterest Income and _3
Other Noninterest Income and Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other noninterest income: | |||
Net gains from trading securities portfolio | $ 121,983 | $ 20,521 | $ 6,197 |
Net gains from Hilltop Broker-Dealer structured product and derivative activities | 81,111 | 129,571 | 41,543 |
Service charges on depositor accounts | 14,845 | 15,170 | 14,484 |
Trust fees | 9,804 | 10,255 | 9,807 |
Other | 15,862 | 10,833 | 18,365 |
Other noninterest income | 243,605 | 186,350 | 90,396 |
Other noninterest expense: | |||
Software and information technology | 56,872 | 50,751 | 52,882 |
Mortgage origination and servicing | 27,808 | 19,892 | 19,705 |
Brokerage commissions and fees | 24,113 | 20,039 | 20,674 |
Unreimbursed loan closing costs | 21,696 | 16,784 | 16,798 |
Business development | 10,190 | 12,940 | 15,853 |
Amortization of intangible assets | 6,301 | 7,567 | 8,026 |
Travel, meals and entertainment | 4,804 | 12,160 | 11,968 |
Funding fees | 4,461 | 5,393 | 5,414 |
Office supplies | 3,953 | 4,809 | 5,788 |
Other | 64,560 | 43,051 | 55,284 |
Other noninterest expense | $ 224,758 | $ 193,386 | $ 212,392 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative financial instruments | |||
Available for sale | $ 1,462,205 | $ 911,493 | |
Not designated as hedges | Prime Lending | |||
Derivative financial instruments | |||
Increase (decrease) in the fair value of the derivatives | 33,714 | 8,550 | $ (12,788) |
Not designated as hedges | Hilltop Broker-Dealers | |||
Derivative financial instruments | |||
Increase (decrease) in the fair value of the derivatives | 3,969 | (3,085) | (381) |
Not designated as hedges | PlainsCapital (the Bank) | |||
Derivative financial instruments | |||
Increase (decrease) in the fair value of the derivatives | (7) | (148) | $ 30 |
IRLCs | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 2,470,013 | 914,526 | |
Estimated Fair Value | 76,048 | 18,222 | |
Customer-based written options | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 31,200 | ||
Customer-based purchased options | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 31,200 | ||
Commitments to Purchase MBSs | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 2,478,041 | 3,346,946 | |
Estimated Fair Value | 22,311 | 3,321 | |
Commitments to Sell MBSs | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 6,141,079 | 5,988,198 | |
Estimated Fair Value | (40,621) | (5,904) | |
Commitments to Sell MBSs | Not designated as hedges | Prime Lending | |||
Derivative financial instruments | |||
Cash collateral advanced to offset net derivative liability | 26,100 | 4,500 | |
Interest rate swaps | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 43,786 | 15,012 | |
Estimated Fair Value | (2,196) | (178) | |
Interest rate swaps | Cash Flow Hedging | Designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 105,000 | 50,000 | |
Estimated Fair Value | (3,112) | 528 | |
Interest rate swaps | Fair Value Hedging | Designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 60,618 | ||
Estimated Fair Value | (130) | ||
Available for sale | 60,700 | ||
Cumulative adjustment in available for sale securities | 100 | ||
U.S. Treasury bond futures and options | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 225,400 | 283,500 | |
Eurodollar futures | Not designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 934,000 | ||
Treasury bond futures and options and Eurodollar futures | Not designated as hedges | PrimeLending and Hilltop Broker-Dealers | |||
Derivative financial instruments | |||
Cash collateral advanced to offset net derivative liability | $ 2,700 | $ 3,700 |
Balance Sheet Offsetting - Asse
Balance Sheet Offsetting - Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Reverse repurchase agreements: | ||
Net Amounts of Assets Presented in the Balance Sheet | $ 80,319 | $ 59,031 |
Total | ||
Gross Amounts of Recognized Assets | 1,441,485 | 1,697,453 |
Net Amounts of Assets Presented in the Balance Sheet | 1,441,485 | 1,697,453 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,376,191) | (1,649,079) |
Net Amount | 65,294 | 48,374 |
Institutional Counterparties | ||
Securities borrowed: | ||
Gross Amounts of Recognized Assets | 1,338,855 | 1,634,782 |
Net Amounts of Assets Presented in the Balance Sheet | 1,338,855 | 1,634,782 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,273,955) | (1,586,820) |
Net Amount | 64,900 | 47,962 |
Reverse repurchase agreements | Institutional Counterparties | ||
Reverse repurchase agreements: | ||
Gross Amounts of Recognized Assets | 80,319 | 59,031 |
Net Amounts of Assets Presented in the Balance Sheet | 80,319 | 59,031 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (79,925) | (58,619) |
Net Amount | 394 | 412 |
Forward MBS Derivatives | Institutional Counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 22,311 | 3,640 |
Net Amounts of Assets Presented in the Balance Sheet | 22,311 | 3,640 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (22,311) | (3,640) |
Net Amounts of Assets Presented in the Balance Sheet | $ 0 | $ 0 |
Balance Sheet Offsetting - Liab
Balance Sheet Offsetting - Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Total | ||
Gross Amounts of Recognized Liabilities | $ 1,525,859 | $ 2,175,157 |
Gross Amounts Offset in the Balance Sheet | (120) | (667) |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,525,739 | 2,174,490 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,431,739) | (2,124,554) |
Net Amount | 94,000 | 49,936 |
Institutional Counterparties | ||
Securities loaned: | ||
Gross Amounts of Recognized Liabilities | 1,245,066 | 1,555,964 |
Net Amounts of Liabilities Presented in the Balance Sheets | 1,245,066 | 1,555,964 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,179,090) | (1,509,933) |
Net Amount | 65,976 | 46,031 |
Institutional Counterparties | Interest rate swaps | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 2,196 | 178 |
Net Amounts of Liabilities Presented in the Balance Sheet | 2,196 | 178 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (2,123) | (112) |
Net Amount | 73 | 66 |
Institutional Counterparties | Repurchase agreements | ||
Repurchase agreements: | ||
Gross Amounts of Recognized Liabilities | 237,856 | 586,651 |
Net Amounts of Liabilities Presented in the Balance Sheet | 237,856 | 586,651 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (237,856) | (586,651) |
Net Amount | 0 | 0 |
Institutional Counterparties | Forward MBS Derivatives | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 40,741 | 6,890 |
Gross Amounts Offset in the Balance Sheet | (120) | (667) |
Net Amounts of Liabilities Presented in the Balance Sheet | 40,621 | 6,223 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (12,670) | (2,384) |
Net Amount | $ 27,951 | 3,839 |
Customer Counterparties | Repurchase agreements | ||
Repurchase agreements: | ||
Gross Amounts of Recognized Liabilities | 25,474 | |
Net Amounts of Liabilities Presented in the Balance Sheet | 25,474 | |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (25,474) | |
Net Amount | $ 0 |
Balance Sheet Offsetting - Secu
Balance Sheet Offsetting - Secured Borrowings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Number of repurchase-to-maturity transactions outstanding | item | 0 | |
Total borrowings | $ 1,482,922 | $ 2,168,089 |
Gross amount of recognized liabilities for repurchase agreements and securities lending in offsetting disclosure above | 1,482,922 | 2,168,089 |
Amount related to agreements not included in offsetting disclosure above | $ 0 | 0 |
Minimum | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Security repurchase agreement maturity period | 1 day | |
Maximum | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Security repurchase agreement maturity period | 90 days | |
Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | $ 1,355,897 | 1,859,310 |
Maturity up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 12,892 | |
Maturity 30 to 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 127,025 | 295,887 |
US Treasury and agency securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 45,950 | |
US Treasury and agency securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 45,950 | |
Assets-backed securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 237,856 | 566,175 |
Assets-backed securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 110,831 | 257,396 |
Assets-backed securities | Maturity up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 12,892 | |
Assets-backed securities | Maturity 30 to 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 127,025 | 295,887 |
Corporate debt securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 113 | 120 |
Corporate debt securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 113 | 120 |
Equity Securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 1,244,953 | 1,555,844 |
Equity Securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | $ 1,244,953 | $ 1,555,844 |
Broker-Dealer and Clearing Or_3
Broker-Dealer and Clearing Organization Receivables and Payables (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables: | ||
Securities borrowed | $ 1,338,855 | $ 1,634,782 |
Securities failed to deliver | 58,244 | 18,726 |
Trades in process of settlement | 104,922 | |
Other | 7,628 | 21,850 |
Total receivables | 1,404,727 | 1,780,280 |
Payables: | ||
Securities loaned | 1,245,066 | 1,555,964 |
Correspondents | 33,547 | 37,036 |
Securities failed to receive | 61,589 | 8,568 |
Trades in process of settlement | 21,765 | |
Other | 6,406 | 3,950 |
Total Payables | $ 1,368,373 | $ 1,605,518 |
Segment and Related Informati_3
Segment and Related Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($)item | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segmentitem | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Information about the revenues, operating results, goodwill and assets | |||||||||||
Number of primary business units | item | 2 | 2 | |||||||||
Number of reportable segments | segment | 3 | ||||||||||
Goodwill of discontinued operations | $ 24,000 | $ 24,000 | |||||||||
Assets of discontinued operations | 248,429 | 248,429 | |||||||||
Net interest income (expense) | $ 107,372 | $ 101,900 | $ 104,558 | $ 110,336 | 110,760 | $ 112,646 | $ 107,284 | $ 108,289 | $ 424,166 | 438,979 | $ 433,299 |
Provision for (reversal of) credit losses | (3,482) | (602) | 66,026 | 34,549 | 6,880 | 47 | (672) | 951 | 96,491 | 7,206 | 5,088 |
Noninterest income | 447,931 | 502,711 | 468,125 | 271,713 | 263,646 | 306,505 | 276,703 | 215,963 | 1,690,480 | 1,062,817 | 880,130 |
Noninterest expense | 402,348 | 399,345 | 370,209 | 281,901 | 307,868 | 321,186 | 304,088 | 278,747 | 1,453,803 | 1,211,889 | 1,153,328 |
Income from continuing operations before income taxes | 156,437 | $ 205,868 | $ 136,448 | $ 65,599 | 59,658 | $ 97,918 | $ 80,571 | $ 44,554 | 564,352 | 282,701 | 155,013 |
Income from discontinued operations before taxes | 38,900 | 17,600 | 5,800 | ||||||||
Goodwill | 267,447 | 267,447 | 267,447 | 267,447 | |||||||
Total assets | 16,944,264 | 15,172,448 | 16,944,264 | 15,172,448 | |||||||
Continuing Operations | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Total assets | 16,944,264 | 14,924,019 | 16,944,264 | 14,924,019 | |||||||
Operating segment | Banking | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 390,871 | 379,258 | 370,732 | ||||||||
Provision for (reversal of) credit losses | 96,326 | 7,280 | 5,319 | ||||||||
Noninterest income | 41,376 | 41,753 | 43,588 | ||||||||
Noninterest expense | 232,447 | 231,524 | 256,577 | ||||||||
Income from continuing operations before income taxes | 103,474 | 182,207 | 152,424 | ||||||||
Goodwill | 247,368 | 247,368 | 247,368 | 247,368 | |||||||
Operating segment | Banking | Continuing Operations | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Total assets | 13,338,930 | 11,147,344 | 13,338,930 | 11,147,344 | |||||||
Operating segment | Broker-Dealer | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 39,912 | 51,308 | 50,878 | ||||||||
Provision for (reversal of) credit losses | 165 | (74) | (231) | ||||||||
Noninterest income | 491,355 | 404,411 | 301,714 | ||||||||
Noninterest expense | 415,463 | 366,031 | 320,241 | ||||||||
Income from continuing operations before income taxes | 115,639 | 89,762 | 32,582 | ||||||||
Goodwill | 7,008 | 7,008 | 7,008 | 7,008 | |||||||
Operating segment | Broker-Dealer | Continuing Operations | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Total assets | 3,196,346 | 3,457,068 | 3,196,346 | 3,457,068 | |||||||
Operating segment | Mortgage Origination Segment | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | (10,489) | (6,273) | 1,485 | ||||||||
Noninterest income | 1,172,450 | 634,992 | 551,860 | ||||||||
Noninterest expense | 753,917 | 563,998 | 540,474 | ||||||||
Income from continuing operations before income taxes | 408,044 | 64,721 | 12,871 | ||||||||
Goodwill | 13,071 | 13,071 | 13,071 | 13,071 | |||||||
Operating segment | Mortgage Origination Segment | Continuing Operations | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Total assets | 3,285,005 | 2,357,415 | 3,285,005 | 2,357,415 | |||||||
Corporate | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | (14,192) | (5,541) | (9,176) | ||||||||
Noninterest income | 3,945 | 2,104 | 4,798 | ||||||||
Noninterest expense | 53,040 | 50,968 | 36,628 | ||||||||
Income from continuing operations before income taxes | (63,287) | (54,405) | (41,006) | ||||||||
Corporate | Continuing Operations | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Total assets | 2,823,374 | 2,393,604 | 2,823,374 | 2,393,604 | |||||||
All Other and Eliminations. | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 18,064 | 20,227 | 19,380 | ||||||||
Noninterest income | (18,646) | (20,443) | (21,830) | ||||||||
Noninterest expense | (1,064) | (632) | (592) | ||||||||
Income from continuing operations before income taxes | 482 | 416 | $ (1,858) | ||||||||
All Other and Eliminations. | Continuing Operations | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Total assets | $ (5,699,391) | $ (4,431,412) | $ (5,699,391) | $ (4,431,412) |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic earnings per share: | |||||||||||
Income from continuing operations | $ 409,440 | $ 211,301 | $ 116,500 | ||||||||
Income from discontinued operations | $ 3,734 | $ 736 | $ 30,775 | $ 3,151 | $ 5,623 | $ 5,261 | $ (2,254) | $ 5,360 | 38,396 | 13,990 | 4,941 |
Income attributable to Hilltop | $ 116,445 | $ 153,279 | $ 128,476 | $ 49,636 | $ 49,276 | $ 79,418 | $ 57,811 | $ 38,786 | $ 447,836 | $ 225,291 | $ 121,441 |
Weighted average shares outstanding - basic | 89,280 | 92,345 | 94,969 | ||||||||
Income from continuing operations (in dollars per share) | $ 1.31 | $ 1.69 | $ 1.08 | $ 0.51 | $ 0.48 | $ 0.81 | $ 0.64 | $ 0.36 | $ 4.59 | $ 2.29 | $ 1.23 |
Earnings from discontinued operations (in dollars per share) | 0.04 | 0.01 | 0.34 | 0.04 | 0.06 | 0.06 | (0.02) | 0.05 | 0.43 | 0.15 | 0.05 |
Basic earnings per common share (in dollars per share) | $ 1.35 | $ 1.70 | $ 1.42 | $ 0.55 | $ 0.54 | $ 0.87 | $ 0.62 | $ 0.41 | $ 5.02 | $ 2.44 | $ 1.28 |
Diluted earnings per share: | |||||||||||
Income from continuing operations | $ 409,440 | $ 211,301 | $ 116,500 | ||||||||
Income from discontinued operations | $ 3,734 | $ 736 | $ 30,775 | $ 3,151 | $ 5,623 | $ 5,261 | $ (2,254) | $ 5,360 | 38,396 | 13,990 | 4,941 |
Income attributable to Hilltop | $ 116,445 | $ 153,279 | $ 128,476 | $ 49,636 | $ 49,276 | $ 79,418 | $ 57,811 | $ 38,786 | $ 447,836 | $ 225,291 | $ 121,441 |
Weighted average shares outstanding - basic | 89,280 | 92,345 | 94,969 | ||||||||
Effect of potentially dilutive securities (in shares) | 24 | 49 | 98 | ||||||||
Weighted average shares outstanding - diluted | 89,304 | 92,394 | 95,067 | ||||||||
Income from continuing operations (in dollars per share) | $ 1.30 | $ 1.69 | $ 1.08 | $ 0.51 | $ 0.48 | $ 0.81 | $ 0.64 | $ 0.36 | $ 4.58 | $ 2.29 | $ 1.23 |
Earnings from discontinued operations (in dollars per share) | 0.05 | 0.01 | 0.34 | 0.04 | 0.06 | 0.05 | (0.02) | 0.05 | 0.43 | 0.15 | 0.05 |
Diluted earnings per common share (in dollars per share) | $ 1.35 | $ 1.70 | $ 1.42 | $ 0.55 | $ 0.54 | $ 0.86 | $ 0.62 | $ 0.41 | $ 5.01 | $ 2.44 | $ 1.28 |
Financial Statements of Paren_2
Financial Statements of Parent - Operations and Comp Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Interest expense | $ 29,489 | $ 27,928 | $ 30,373 | $ 34,539 | $ 41,058 | $ 48,294 | $ 41,716 | $ 40,649 | $ 122,329 | $ 171,717 | $ 141,324 |
Income tax benefit | 39,295 | 46,820 | 31,808 | 15,148 | 13,579 | 21,472 | 18,526 | 10,137 | 133,071 | 63,714 | 34,227 |
Net income | $ 120,876 | $ 159,784 | $ 135,415 | $ 53,602 | $ 51,702 | $ 81,707 | $ 59,791 | $ 39,777 | 469,677 | 232,977 | 125,727 |
Other comprehensive income (loss), net | 6,344 | 20,046 | (5,632) | ||||||||
Comprehensive income | 476,021 | 253,023 | 120,095 | ||||||||
Parent Company | Reportable Legal Entities | |||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Dividends from bank subsidiaries | 249,771 | 143,000 | 42,000 | ||||||||
Dividends from nonbank subsidiaries | 56,150 | 36,950 | 37,500 | ||||||||
Investment income | 4,102 | 5,933 | 3,089 | ||||||||
Interest expense | 18,294 | 11,474 | 12,265 | ||||||||
Other income | 45,887 | 2,221 | 4,893 | ||||||||
General and administrative expense | 58,130 | 50,968 | 36,628 | ||||||||
Income before income taxes, equity in undistributed earnings of subsidiaries and preferred stock activity | 279,486 | 125,662 | 38,589 | ||||||||
Income tax benefit | (13,897) | (12,706) | (7,767) | ||||||||
Equity in undistributed earnings of subsidiaries | 176,294 | 94,609 | 79,371 | ||||||||
Net income | 469,677 | 232,977 | 125,727 | ||||||||
Other comprehensive income (loss), net | 6,344 | 20,046 | (5,656) | ||||||||
Comprehensive income | $ 476,021 | $ 253,023 | $ 120,071 |
Financial Statements of Paren_3
Financial Statements of Parent - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Investment in subsidiaries: | |||
Other assets | $ 555,983 | $ 404,754 | |
Total assets | 16,944,264 | 15,172,448 | |
Liabilities and Stockholders' Equity | |||
Notes payable | 381,987 | 256,269 | |
Stockholders' equity | 2,323,939 | 2,103,039 | |
Total liabilities and stockholders' equity | 16,944,264 | 15,172,448 | |
Parent Company | Reportable Legal Entities | |||
Assets | |||
Cash and cash equivalents | 478,826 | 116,471 | $ 54,405 |
Investment in subsidiaries: | |||
Bank subsidiaries | 1,654,249 | 1,523,549 | 1,459,984 |
Nonbank subsidiaries | 453,847 | 533,844 | 483,593 |
Other assets | 236,452 | 219,740 | 245,200 |
Total assets | 2,823,374 | 2,393,604 | 2,243,182 |
Liabilities and Stockholders' Equity | |||
Accounts payable and accrued expenses | 64,635 | 53,418 | 58,319 |
Notes payable | 412,764 | 215,780 | 215,620 |
Stockholders' equity | 2,345,975 | 2,124,406 | 1,969,243 |
Total liabilities and stockholders' equity | $ 2,823,374 | $ 2,393,604 | $ 2,243,182 |
Financial Statements of Paren_4
Financial Statements of Parent - Cash flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities: | ||||||||||||
Net income | $ 120,876 | $ 159,784 | $ 135,415 | $ 53,602 | $ 51,702 | $ 81,707 | $ 59,791 | $ 39,777 | $ 469,677 | $ 232,977 | $ 125,727 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Deferred income taxes | 16,583 | (4,063) | 13,009 | |||||||||
Net cash provided by (used in) operating activities | 280,436 | (433,023) | 389,540 | |||||||||
Investing Activities: | ||||||||||||
Purchases of premises and equipment and other assets | (37,746) | (42,287) | (67,726) | |||||||||
Net cash used in investing activities | (827,666) | (604,292) | (289,667) | |||||||||
Financing Activities: | ||||||||||||
Payments to repurchase common stock | $ (15,200) | (208,664) | (73,385) | (58,990) | ||||||||
Proceeds from issuance of notes payable | 1,451,249 | 1,055,772 | 664,045 | |||||||||
Dividends paid on common stock | (32,524) | (29,627) | (26,698) | |||||||||
Net cash contributed from noncontrolling interest | (20,890) | (6,352) | 17,411 | |||||||||
Other, net | (1,724) | (2,494) | (2,657) | |||||||||
Net cash provided by financing activities | 1,257,744 | 901,638 | 4,633 | |||||||||
Net change in cash, cash equivalents and restricted cash | 710,514 | (135,677) | 104,506 | |||||||||
Cash, cash equivalents and restricted cash, beginning of year | 642,789 | 778,466 | 642,789 | 642,789 | 778,466 | 673,960 | ||||||
Cash, cash equivalents and restricted cash, end of year | 1,353,303 | 642,789 | 1,353,303 | 642,789 | 778,466 | |||||||
Parent Company | Reportable Legal Entities | ||||||||||||
Operating Activities: | ||||||||||||
Net income | 469,677 | 232,977 | 125,727 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in undistributed earnings of subsidiaries | (176,294) | (94,609) | (79,371) | |||||||||
Net realized gains on equity investments | (5,336) | |||||||||||
Net realized gains on disposal of discontinued operations | (41,901) | |||||||||||
Deferred income taxes | 4,432 | (123) | 217 | |||||||||
Other, net | 37,465 | 44,943 | 19,368 | |||||||||
Net cash provided by (used in) operating activities | 293,379 | 183,188 | 60,605 | |||||||||
Investing Activities: | ||||||||||||
Purchases of equity securities | (29,365) | (12,492) | ||||||||||
Purchases of premises and equipment and other assets | (12,547) | (17,302) | (42,390) | |||||||||
Proceeds from sales of equity investments | 16,174 | |||||||||||
Proceeds from sale of discontinued operations | 154,963 | |||||||||||
Net cash used in investing activities | 113,051 | (17,302) | (38,708) | |||||||||
Financing Activities: | ||||||||||||
Payments to repurchase common stock | (208,664) | (73,385) | (58,990) | |||||||||
Proceeds from issuance of notes payable | 196,657 | |||||||||||
Dividends paid on common stock | (32,524) | (29,627) | (26,698) | |||||||||
Net cash contributed from noncontrolling interest | 825 | 100 | 19,250 | |||||||||
Other, net | (369) | (908) | 2,182 | |||||||||
Net cash provided by financing activities | (44,075) | (103,820) | (64,256) | |||||||||
Net change in cash, cash equivalents and restricted cash | 362,355 | 62,066 | (42,359) | |||||||||
Cash, cash equivalents and restricted cash, beginning of year | $ 116,471 | $ 54,405 | $ 116,471 | 116,471 | 54,405 | 96,764 | ||||||
Cash, cash equivalents and restricted cash, end of year | $ 478,826 | $ 116,471 | $ 478,826 | $ 116,471 | 54,405 | |||||||
Supplemental Schedule of Non-Cash Activities: | ||||||||||||
Construction in progress related to build-to-suit lease obligations | 27,802 | |||||||||||
Note receivable contributed from nonbank subsidiary | $ 111,653 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 28, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Selected Quarterly Financial Information (Unaudited) | ||||||||||||
Interest income | $ 136,861 | $ 129,828 | $ 134,931 | $ 144,875 | $ 151,818 | $ 160,940 | $ 149,000 | $ 148,938 | $ 546,495 | $ 610,696 | $ 574,623 | |
Interest expense | 29,489 | 27,928 | 30,373 | 34,539 | 41,058 | 48,294 | 41,716 | 40,649 | 122,329 | 171,717 | 141,324 | |
Net interest income | 107,372 | 101,900 | 104,558 | 110,336 | 110,760 | 112,646 | 107,284 | 108,289 | 424,166 | 438,979 | 433,299 | |
Provision for (reversal of) credit losses | (3,482) | (602) | 66,026 | 34,549 | 6,880 | 47 | (672) | 951 | 96,491 | 7,206 | 5,088 | |
Noninterest income | 447,931 | 502,711 | 468,125 | 271,713 | 263,646 | 306,505 | 276,703 | 215,963 | 1,690,480 | 1,062,817 | 880,130 | |
Noninterest expense | 402,348 | 399,345 | 370,209 | 281,901 | 307,868 | 321,186 | 304,088 | 278,747 | 1,453,803 | 1,211,889 | 1,153,328 | |
Income from continuing operations before income taxes | 156,437 | 205,868 | 136,448 | 65,599 | 59,658 | 97,918 | 80,571 | 44,554 | 564,352 | 282,701 | 155,013 | |
Income tax expense | 39,295 | 46,820 | 31,808 | 15,148 | 13,579 | 21,472 | 18,526 | 10,137 | 133,071 | 63,714 | 34,227 | |
Income from continuing operations | 117,142 | 159,048 | 104,640 | 50,451 | 46,079 | 76,446 | 62,045 | 34,417 | 431,281 | 218,987 | 120,786 | |
Income from discontinued operations, net of income taxes | 3,734 | 736 | 30,775 | 3,151 | 5,623 | 5,261 | (2,254) | 5,360 | 38,396 | 13,990 | 4,941 | |
Net income | 120,876 | 159,784 | 135,415 | 53,602 | 51,702 | 81,707 | 59,791 | 39,777 | 469,677 | 232,977 | 125,727 | |
Less: Net income attributable to noncontrolling interest | 4,431 | 6,505 | 6,939 | 3,966 | 2,426 | 2,289 | 1,980 | 991 | 21,841 | 7,686 | 4,286 | |
Income attributable to Hilltop | $ 116,445 | $ 153,279 | $ 128,476 | $ 49,636 | $ 49,276 | $ 79,418 | $ 57,811 | $ 38,786 | $ 447,836 | $ 225,291 | $ 121,441 | |
Basic: | ||||||||||||
Earnings from continuing operations (in dollars per share) | $ 1.31 | $ 1.69 | $ 1.08 | $ 0.51 | $ 0.48 | $ 0.81 | $ 0.64 | $ 0.36 | $ 4.59 | $ 2.29 | $ 1.23 | |
Earnings (losses) from discontinued operations (in dollars per share) | 0.04 | 0.01 | 0.34 | 0.04 | 0.06 | 0.06 | (0.02) | 0.05 | 0.43 | 0.15 | 0.05 | |
Basic earnings per common share (in dollars per share) | 1.35 | 1.70 | 1.42 | 0.55 | 0.54 | 0.87 | 0.62 | 0.41 | 5.02 | 2.44 | 1.28 | |
Diluted: | ||||||||||||
Earnings from continuing operations (in dollars per share) | 1.30 | 1.69 | 1.08 | 0.51 | 0.48 | 0.81 | 0.64 | 0.36 | 4.58 | 2.29 | 1.23 | |
Earnings (losses) from discontinued operations (in dollars per share) | 0.05 | 0.01 | 0.34 | 0.04 | 0.06 | 0.05 | (0.02) | 0.05 | 0.43 | 0.15 | 0.05 | |
Diluted earnings per common share (in dollars per share) | 1.35 | 1.70 | 1.42 | 0.55 | 0.54 | 0.86 | 0.62 | 0.41 | 5.01 | 2.44 | 1.28 | |
Cash dividends declared per common share | $ 0.12 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.36 | $ 0.32 | $ 0.28 |