Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 16, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
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 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | HTH | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
Entity Public Float | $ 1,240 | ||
Entity Common Stock, Shares Outstanding | 64,695,467 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Firm ID | 238 | ||
Auditor Location | Dallas, Texas | ||
Entity Central Index Key | 0001265131 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and due from banks | $ 1,579,512 | $ 2,823,138 |
Federal funds sold | 650 | 385 |
Assets segregated for regulatory purposes | 67,737 | 221,740 |
Securities purchased under agreements to resell | 118,070 | 118,262 |
Securities: | ||
Trading, at fair value | 755,032 | 647,998 |
Available for sale, at fair value, net (amortized cost of $1,788,557 and $2,148,635, respectively) | 1,658,766 | 2,130,568 |
Held to maturity, at amortized cost, net (fair value of $785,335 and $276,296, respectively) | 875,532 | 267,684 |
Equity, at fair value | 200 | 250 |
Total securities | 3,289,530 | 3,046,500 |
Loans held for sale | 982,616 | 1,878,190 |
Loans held for investment, net of unearned income | 8,092,673 | 7,879,904 |
Allowance for credit losses | (95,442) | (91,352) |
Loans held for investment, net | 7,997,231 | 7,788,552 |
Broker-dealer and clearing organization receivables | 1,038,055 | 1,672,946 |
Premises and equipment, net | 184,950 | 204,438 |
Operating lease right-of-use assets | 102,443 | 112,328 |
Mortgage servicing rights | 100,825 | 86,990 |
Other assets | 518,899 | 452,880 |
Goodwill | 267,447 | 267,447 |
Other intangible assets, net | 11,317 | 15,284 |
Total assets | 16,259,282 | 18,689,080 |
Deposits: | ||
Noninterest-bearing | 3,968,862 | 4,577,183 |
Interest-bearing | 7,346,887 | 8,240,894 |
Total deposits | 11,315,749 | 12,818,077 |
Broker-dealer and clearing organization payables | 966,470 | 1,477,300 |
Short-term borrowings | 970,056 | 859,444 |
Securities sold, not yet purchased, at fair value | 53,023 | 96,586 |
Notes payable | 346,654 | 387,904 |
Operating lease liabilities | 126,759 | 130,960 |
Other liabilities | 417,042 | 369,606 |
Total liabilities | 14,195,753 | 16,139,877 |
Commitments and contingencies (see Notes 13 and 14) | ||
Hilltop stockholders' equity: | ||
Common stock, $0.01 par value, 125,000,000 shares authorized; 64,684,625 and 78,964,978 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 647 | 790 |
Additional paid-in capital | 1,046,331 | 1,274,446 |
Accumulated other comprehensive income (loss) | (133,531) | (10,219) |
Retained earnings | 1,123,636 | 1,257,014 |
Deferred compensation employee stock trust, net | 481 | 752 |
Employee stock trust (22,566 and 5,749 shares, at cost, at December 31, 2022 and December 31, 2021, respectively) | (640) | (115) |
Total Hilltop stockholders' equity | 2,036,924 | 2,522,668 |
Noncontrolling interests | 26,605 | 26,535 |
Total stockholders' equity | 2,063,529 | 2,549,203 |
Total liabilities and stockholders' equity | $ 16,259,282 | $ 18,689,080 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Available for sale, amortized cost | $ 1,788,557 | $ 2,148,635 |
Fair Value | $ 785,335 | $ 276,296 |
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 | 64,684,625 | 78,964,978 |
Common stock, shares outstanding | 64,684,625 | 78,964,978 |
Employee stock trust, shares | 22,566 | 5,749 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest income: | |||
Loans, including fees | $ 416,207 | $ 404,312 | $ 433,311 |
Securities borrowed | 44,414 | 61,667 | 51,360 |
Securities: | |||
Taxable | 75,805 | 47,633 | 48,273 |
Tax-exempt | 10,013 | 9,766 | 6,698 |
Other | 44,677 | 6,595 | 6,853 |
Total interest income | 591,116 | 529,973 | 546,495 |
Interest expense: | |||
Deposits | 50,412 | 23,624 | 47,040 |
Securities loaned | 38,570 | 50,974 | 42,816 |
Short-term borrowings | 20,893 | 9,065 | 11,611 |
Notes payable | 16,141 | 21,386 | 15,897 |
Junior subordinated debentures | 1,558 | 2,772 | |
Other | 6,125 | 384 | 2,193 |
Total interest expense | 132,141 | 106,991 | 122,329 |
Net interest income | 458,975 | 422,982 | 424,166 |
Provision for (reversal of) credit losses | 8,309 | (58,213) | 96,491 |
Net interest income after provision for (reversal of) credit losses | 450,666 | 481,195 | 327,675 |
Noninterest income: | |||
Net gains from sale of loans and other mortgage production income | 302,384 | 825,960 | 1,001,059 |
Mortgage loan origination fees | 149,598 | 160,011 | 171,769 |
Securities commissions and fees | 139,122 | 143,827 | 142,720 |
Investment and securities advisory fees and commissions | 127,399 | 152,443 | 131,327 |
Other | 113,957 | 128,034 | 243,605 |
Total noninterest income | 832,460 | 1,410,275 | 1,690,480 |
Noninterest expense: | |||
Employees' compensation and benefits | 773,688 | 1,007,235 | 1,059,645 |
Occupancy and equipment, net | 97,115 | 100,602 | 99,416 |
Professional services | 48,495 | 54,270 | 69,984 |
Other | 207,701 | 225,291 | 224,758 |
Total noninterest expense | 1,126,999 | 1,387,398 | 1,453,803 |
Income from continuing operations before income taxes | 156,127 | 504,072 | 564,352 |
Income tax expense | 36,833 | 117,976 | 133,071 |
Income from continuing operations | 119,294 | 386,096 | 431,281 |
Income from discontinued operations, net of income taxes | 38,396 | ||
Net income | 119,294 | 386,096 | 469,677 |
Less: Net income attributable to noncontrolling interest | 6,160 | 11,601 | 21,841 |
Income attributable to Hilltop | $ 113,134 | $ 374,495 | $ 447,836 |
Basic: | |||
Earnings from continuing operations (in dollars per share) | $ 1.61 | $ 4.64 | $ 4.59 |
Earnings from discontinued operations (in dollars per share) | 0.43 | ||
Basic (in dollars per share) | 1.61 | 4.64 | 5.02 |
Diluted: | |||
Earnings from continuing operations (in dollars per share) | 1.60 | 4.61 | 4.58 |
Earnings from discontinued operations (in dollars per share) | 0.43 | ||
Diluted (in dollars per share) | $ 1.60 | $ 4.61 | $ 5.01 |
Weighted average share information: | |||
Basic (in shares) | 70,434 | 80,708 | 89,280 |
Diluted (in shares) | 70,626 | 81,173 | 89,304 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 119,294 | $ 386,096 | $ 469,677 |
Other comprehensive income (loss): | |||
Change in fair value of cash flow hedges, net of tax of $4,874, $849, and $(820), respectively | 16,226 | 6,205 | (2,950) |
Net unrealized gains (losses) on securities available for sale, net of tax of $(34,379), $(10,146), and $2,756, respectively | (89,136) | (34,115) | 9,111 |
Reclassification adjustment for gains (losses) included in net income, net of tax of $3, $(21), and $55, respectively | 10 | (72) | 183 |
Adjustment for unrealized losses on securities transferred from available-for sale to held-to-maturity, net of tax of $(17,033), $0, and $0, respectively | (56,690) | ||
Amortization of unrealized losses on securities transferred from available-for-sale to held-maturity, net of tax $1,886, $0 and $0, respectively | 6,278 | ||
Comprehensive income (loss) | (4,018) | 358,114 | 476,021 |
Less: comprehensive income attributable to noncontrolling interest | 6,160 | 11,601 | 21,841 |
Comprehensive income (loss) applicable to Hilltop | $ (10,178) | $ 346,513 | $ 454,180 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Cash flow hedge, tax | $ 4,874 | $ 849 | $ (820) |
Net unrealized gains (losses) on securities available for sale, tax | (25,809) | (10,146) | 2,756 |
Reclassification adjustment, tax | 3 | (21) | 55 |
Adjustment for unrealized losses on securities | (17,033) | 0 | 0 |
Amortization of unrealized losses on securities | $ 1,886 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Parent Cumulative Effect, Period of Adoption, Adjustment | Parent | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings Cumulative 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, 2019 | $ (5,691) | $ 2,103,039 | $ 906 | $ 1,445,233 | $ 11,419 | $ (5,691) | $ 644,860 | $ 776 | $ (155) | $ 25,757 | $ (5,691) | $ 2,128,796 |
Balance (in shares) at Dec. 31, 2019 | 90,641 | 8 | ||||||||||
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 | |||||||||||
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 | |||||||||||
Repurchases of common stock | (208,664) | $ (87) | (140,888) | (67,689) | (208,664) | |||||||
Repurchases of common stock (in shares) | (8,780) | |||||||||||
Dividends on common stock | (32,524) | (32,524) | (32,524) | |||||||||
Deferred compensation plan | 12 | (5) | $ 17 | 12 | ||||||||
Deferred compensation plan (in shares) | (1) | |||||||||||
Net cash distributed to noncontrolling interest | (20,890) | (20,890) | ||||||||||
Balance at Dec. 31, 2020 | 2,323,939 | $ 822 | 1,317,929 | 17,763 | 986,792 | 771 | $ (138) | 26,708 | 2,350,647 | |||
Balance (in shares) at Dec. 31, 2020 | 82,185 | 7 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 374,495 | 374,495 | 11,601 | 386,096 | ||||||||
Other comprehensive income (loss) | (27,982) | (27,982) | (27,982) | |||||||||
Stock-based compensation expense | 16,927 | 16,927 | 16,927 | |||||||||
Common stock issued to board members | 602 | 602 | 602 | |||||||||
Common stock issued to board members (in shares) | 17 | |||||||||||
Issuance of common stock related to share-based awards, net | (2,708) | $ 3 | (2,711) | (2,708) | ||||||||
Issuance of common stock related to share-based awards, net (in shares) | 396 | |||||||||||
Repurchases of common stock | (123,631) | $ (35) | (58,301) | (65,295) | (123,631) | |||||||
Repurchases of common stock (in shares) | (3,633) | |||||||||||
Dividends on common stock | (38,978) | (38,978) | (38,978) | |||||||||
Deferred compensation plan | 4 | (19) | $ 23 | 4 | ||||||||
Deferred compensation plan (in shares) | (1) | |||||||||||
Net cash distributed to noncontrolling interest | (11,774) | (11,774) | ||||||||||
Balance at Dec. 31, 2021 | 2,522,668 | $ 790 | 1,274,446 | (10,219) | 1,257,014 | 752 | $ (115) | 26,535 | 2,549,203 | |||
Balance (in shares) at Dec. 31, 2021 | 78,965 | 6 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 113,134 | 113,134 | 6,160 | 119,294 | ||||||||
Other comprehensive income (loss) | (123,312) | (123,312) | (123,312) | |||||||||
Stock-based compensation expense | 15,027 | 15,027 | 15,027 | |||||||||
Common stock issued to board members | 599 | 599 | 599 | |||||||||
Common stock issued to board members (in shares) | 22 | |||||||||||
Issuance of common stock related to share-based awards, net | (5,097) | $ 5 | (5,102) | (5,097) | ||||||||
Issuance of common stock related to share-based awards, net (in shares) | 567 | |||||||||||
Repurchases of common stock | (442,336) | $ (148) | (238,639) | (203,549) | (442,336) | |||||||
Repurchases of common stock (in shares) | (14,869) | |||||||||||
Dividends on common stock | (42,963) | (42,963) | (42,963) | |||||||||
Deferred compensation plan | (796) | (271) | $ (525) | (796) | ||||||||
Deferred compensation plan (in shares) | 17 | |||||||||||
Net cash distributed to noncontrolling interest | (6,090) | (6,090) | ||||||||||
Balance at Dec. 31, 2022 | $ 2,036,924 | $ 647 | $ 1,046,331 | $ (133,531) | $ 1,123,636 | $ 481 | $ (640) | $ 26,605 | $ 2,063,529 | |||
Balance (in shares) at Dec. 31, 2022 | 64,685 | 23 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 26, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||
Cash dividends declared per common share | $ 0.16 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.60 | $ 0.48 | $ 0.36 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | |||
Net income | $ 119,294 | $ 386,096 | $ 469,677 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for (reversal of) credit losses | 8,309 | (58,213) | 96,491 |
Depreciation, amortization and accretion, net | 32,625 | 24,628 | 21,930 |
Deferred income taxes | 8,184 | (7,077) | 16,583 |
Other, net | 15,257 | 18,580 | 11,849 |
Net change in securities purchased under agreements to resell | 192 | (37,943) | (21,288) |
Net change in trading securities | (107,034) | 46,257 | (4,679) |
Net change in broker-dealer and clearing organization receivables | 936,861 | (564,404) | 515,073 |
Net change in other assets | (10,620) | 3,185 | (78,997) |
Net change in broker-dealer and clearing organization payables | (734,242) | 129,495 | (152,158) |
Net change in other liabilities | 54,123 | (212,408) | 249,313 |
Net change in securities sold, not yet purchased | (43,563) | 16,797 | 35,972 |
Proceeds from sale of mortgage servicing rights asset | 65,108 | 142,558 | 35,142 |
Change in valuation of mortgage servicing rights asset | (21,969) | (7,373) | 37,926 |
Net gains from sales of loans | (302,384) | (825,960) | (1,001,059) |
Loans originated for sale | (14,214,874) | (26,933,574) | (26,766,999) |
Proceeds from loans sold | 15,384,181 | 28,644,978 | 26,848,663 |
Net cash provided by operating activities for continuing operations | 1,189,448 | 765,622 | 313,439 |
Net cash used in operating activities for discontinued operations | (33,003) | ||
Net cash provided by operating activities | 1,189,448 | 765,622 | 280,436 |
Investing Activities | |||
Proceeds from maturities and principal reductions of securities held to maturity | 95,603 | 43,695 | 81,140 |
Proceeds from sales, maturities and principal reductions of securities available for sale | 329,558 | 621,984 | 433,828 |
Purchases of securities held to maturity | (13,180) | (7,553) | |
Purchases of securities available for sale | (768,461) | (1,343,763) | (975,289) |
Purchases of equity securities | (30) | ||
Net change in loans held for investment | (515,326) | 125,315 | (457,540) |
Purchases of premises and equipment and other assets | (9,798) | (24,751) | (37,746) |
Proceeds from sales of premises and equipment and other real estate owned | 4,544 | 24,353 | 21,512 |
Net cash received from (paid to) Federal Home Loan Bank and Federal Reserve Bank stock | (212) | (107) | 22,808 |
Net cash used in investing activities for continuing operations | (877,302) | (553,274) | (918,840) |
Net cash provided by investing activities for discontinued operations | 1,941 | ||
Net cash received from disposal of discontinued operations | 89,233 | ||
Net cash used in investing activities | (877,302) | (553,274) | (827,666) |
Financing Activities | |||
Net change in deposits | (1,278,916) | 1,555,190 | 2,125,118 |
Net change in short-term borrowings | 108,369 | 163,735 | (729,110) |
Proceeds from notes payable | 821,570 | 976,119 | 1,451,249 |
Payments on notes payable and junior subordinated debentures | (863,284) | (1,037,652) | (1,325,711) |
Payments to repurchase common stock | (442,336) | (123,631) | (208,664) |
Dividends paid on common stock | (42,963) | (38,978) | (32,524) |
Net cash distributed to noncontrolling interest | (6,090) | (11,774) | (20,890) |
Other, net | (5,860) | (3,397) | (1,724) |
Net cash provided by (used in) financing activities | (1,709,510) | 1,479,612 | 1,257,744 |
Net change in cash, cash equivalents and restricted cash | (1,397,364) | 1,691,960 | 710,514 |
Cash, cash equivalents and restricted cash, beginning of year | 3,045,263 | 1,353,303 | 642,789 |
Cash, cash equivalents and restricted cash, end of year | 1,647,899 | 3,045,263 | 1,353,303 |
Supplemental Disclosures of Cash Flow Information | |||
Cash paid for interest | 128,414 | 110,108 | 124,934 |
Cash paid for income taxes, net of refunds | 15,088 | 136,183 | 123,553 |
Supplemental Schedule of Non-Cash Activities | |||
Hilltop Plaza build to suit derecognition | 27,802 | ||
Conversion of loans to other real estate owned | 1,251 | 3,561 | 13,865 |
Additions to mortgage servicing rights | 56,974 | $ 78,433 | $ 162,914 |
Carrying amount of AFS securities transferred to HTM, net of $65,559 unrealized loss | $ 691,716 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash to Consolidated Balance Sheets | ||||
Cash and due from banks | $ 1,579,512 | $ 2,823,138 | $ 1,062,560 | |
Federal funds sold | 650 | 385 | 386 | |
Assets segregated for regulatory purposes | 67,737 | 221,740 | 290,357 | |
Total cash, cash equivalents and restricted cash | 1,647,899 | $ 3,045,263 | $ 1,353,303 | $ 642,789 |
Carrying amount of AFS securities transferred to HTM, net | $ 65,559 |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 12 Months Ended |
Dec. 31, 2022 | |
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 as of June 30, 2020 have been presented as discontinued operations in the consolidated financial statements. For further details, see Note 3 to the consolidated financial statements. 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. Basis of Presentation The 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 (“SEC”). Other than changes related to the implementation of the current expected credit losses (“CECL”) standard as of January 1, 2020, 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 a controlling ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC also owned 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which were 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. Following receipt of regulatory approval, during June, July and August 2021, PCC submitted to the trustees of each of the Trusts notices to redeem in full outstanding junior subordinated debentures of $67.0 million issued by PCC, which resulted in the full redemption to the holders of the associated preferred securities and common securities during the third quarter of 2021. 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. (“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 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 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. 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. Other than changes related to the implementation of the CECL standard as of January 1, 2020, 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. Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them until maturity. 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. 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, the Company has not recorded expected credit losses for those securities. 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, both with servicing retained and 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 COVID-19 pandemic, the Company allowed modifications, such as payment deferrals for up to 90 days and temporary forbearance, to credit-worthy borrowers who were experiencing temporary hardship due to the effects of COVID-19. These modifications generally met the criteria of the Economic Security Act (“CARES Act”) passed in March 2020. Therefore, the Company did 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. Purchased credit deteriorated (“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 (“ Collectively Evaluated”) 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. quality of earnings. Other non-financial metrics are also evaluated including the geographies and industries within which it operates, its management strength, and its reputation and historical experience. The internal LGD risk rating also considers assessment of collateral quality and current loan to value, collateral type and loan seniority, covenant strength and performance, as well as any individual, corporate, or government guarantees. 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 grouped 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 grouped 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 losses 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 or worse 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 for the assessment of value. The assessment of value is discounted for selling costs and compared against the appropriate basis of the loan to determine if a reserve might be required. 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. 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 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 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 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 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2022 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | 2. Recently Issued Accounting Standards Accounting Standards Adopted During 2022 In March 2022, the FASB issued ASU 2022-01 to expand and clarify the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets. ASU 2022-01 amends the guidance in ASU 2017-12 that, among other things, established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible. The amendment further improves the last-of-layer (renamed the “portfolio layer”) concepts to expand to nonprepayable financial assets and allows more flexibility in the derivative structures used to hedge the interest rate risk. For entities that have already adopted ASU 2017-12 this update is available for immediate adoption. As permitted within the amendment, the Company elected to early adopt the provisions as of April 1, 2022 on a prospective basis. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements. In June 2022, the FASB issued ASU 2022-03 to clarify the guidance on the fair value measurement of an equity security that is subject to a contractual sale restriction, and require specific disclosures for equity securities that are subject to such restrictions. The amendments are effective in periods beginning after December 15, 2023, with early adoption permitted. As permitted within the amendment, the Company elected to early adopt the provisions as of July 1, 2022 on a prospective basis. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements. Accounting Standards To Be Adopted in 2023 In March 2022, the FASB issued ASU 2022-02 to eliminate the recognition and measurement guidance on troubled debt restructurings for creditors, and require enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The amendments are effective in periods beginning after December 15, 2022 using either a prospective or modified retrospective transition. The Company adopted the provisions of ASU 2022-02 as of January 1, 2023 on a prospective basis. The adoption of this amendment did not have a material impact on the Company’s future consolidated financial statements. In September 2022, the FASB issued ASU 2022-04 to require entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of such programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations and a description of where in the financial statements outstanding amounts are present. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The amendments are effective in periods beginning after December 15, 2022, except that the amendments to disclose a rollforward of obligations outstanding will be effective beginning after December 15, 2023. The Company adopted the provisions as of January 1, 2023. The adoption of this amendment did not have a material impact on the Company’s future consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2022 | |
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 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 then-pending sale of NLC met the criteria to be presented as discontinued operations. All related notes to the consolidated financial statements for discontinued operations have been included in this note. The following table presents the results of discontinued operations for NLC for 2020 (in thousands). Interest income: Securities: Taxable $ 1,752 Other 71 Total interest income 1,823 Interest expense: Notes payable 775 Noninterest income: Net insurance premiums earned 65,077 Other 3,051 Total noninterest income 68,128 Noninterest expense: Employees' compensation and benefits 6,002 Occupancy and equipment, net 464 Professional services 18,201 Loss and loss adjustment expenses 38,419 Other 3,987 Total noninterest expense 67,073 Income from discontinued operations before income taxes 2,103 Gain on disposal of discontinued operations 36,811 Income tax expense 518 Income from discontinued operations, net of income taxes $ 38,396 Reinsurance Activity The effects of reinsurance on premiums written and earned are included within discontinued operations for 2020 are summarized as follows (in thousands). Written Earned Premiums from direct business $ 63,811 $ 61,384 Reinsurance assumed 6,396 6,452 Reinsurance ceded (2,759) (2,759) Net premiums $ 67,448 $ 65,077 The effects of reinsurance on incurred losses and LAE are included within discontinued operations for 2020 and are as follows (in thousands). Losses and LAE incurred $ 38,225 Reinsurance recoverables 194 Net loss and LAE incurred $ 38,419 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 4. 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, 2022 and 2021, the aggregate fair value of PrimeLending’s mortgage loans held for sale accounted for under the Fair Value Option was $855.7 million and $1.78 billion, respectively, and the unpaid principal balance of those loans was $850.3 million and $1.73 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 prevailing market conditions. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the financial instruments’ terms and conditions, among other things. Equity Securities Loans Held for Sale . As a result, changes in instrument-specific credit risk are not a significant component of the change in fair value. The fair value of certain loans held for sale that cannot be sold through normal sale channels or are non-performing is measured using Level 3 inputs. The fair value of such loans is generally based upon estimates of expected cash flows using unobservable inputs, including listing prices of comparable assets, uncorroborated expert opinions, and/or management’s knowledge of underlying collateral. Certain mortgage loans held for sale that are guaranteed by U.S. government agencies that are subject to repurchase, or have been repurchased by PrimeLending and certain mortgage loans originated by PrimeLending on behalf of the Bank are reported at amortized cost and are not recorded at fair value on either a recurring or non-recurring basis. Loans Held for Investment Derivatives MSR Asset 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, 2022 Inputs Inputs Inputs Fair Value Trading securities $ 15,456 $ 739,576 $ — $ 755,032 Available for sale securities — 1,658,766 — 1,658,766 Equity securities 200 — — 200 Loans held for sale — 814,990 40,707 855,697 Loans held for investment — — 9,181 9,181 Derivative assets — 88,977 — 88,977 MSR asset — — 100,825 100,825 Securities sold, not yet purchased 25,506 27,517 — 53,023 Derivative liabilities — 11,405 — 11,405 Level 1 Level 2 Level 3 Total December 31, 2021 Inputs Inputs Inputs Fair Value Trading securities $ 8,628 $ 639,370 $ — $ 647,998 Available for sale securities — 2,130,568 — 2,130,568 Equity securities 250 — — 250 Loans held for sale — 1,734,875 47,716 1,782,591 Derivative assets — 48,122 — 48,122 MSR asset — — 86,990 86,990 Securities sold, not yet purchased 45,973 50,613 — 96,586 Derivative liabilities — 21,816 — 21,816 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) Included in Balance, Transfers Other Beginning of Purchases/ Sales/ to (from) Included in Comprehensive Balance, Year Additions Reductions Level 3 Net Income Income (Loss) End of Year Year ended December 31, 2022 Loans held for sale $ 47,716 $ 52,058 $ (48,900) $ 5,587 $ (15,754) $ — $ 40,707 Loans held for investment — 9,611 (562) — 132 — 9,181 MSR asset 86,990 56,974 (65,108) — 21,969 — 100,825 Total $ 134,706 $ 118,643 $ (114,570) $ 5,587 $ 6,347 $ — $ 150,713 Year ended December 31, 2021 Loans held for sale $ 71,816 $ 56,480 $ (76,166) $ (4,139) $ (275) $ — $ 47,716 MSR asset 143,742 78,433 (142,558) — 7,373 — 86,990 Total $ 215,558 $ 134,913 $ (218,724) $ (4,139) $ 7,098 $ — $ 134,706 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 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, 2022. For Level 3 financial instruments measured at fair value on a recurring basis at December 31, 2022 and 2021, the significant unobservable inputs used in the fair value measurements were as follows. Range (Weighted-Average) Financial instrument Valuation Technique Unobservable Inputs December 31, 2022 December 31, 2021 Loans held for sale Market comparable Projected price 88 - 95 % ( 89 %) 94 - 95 % ( 95 %) Loans held for investment Discounted cash flow Discount rate 11.88 % — MSR asset Discounted cash flow Constant prepayment rate 8.14 % 10.02 % Discount rate 12.10 % 14.32 % 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 material instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 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 $ (48,916) $ — $ (48,916) $ (55,442) $ — $ (55,442) $ 52,296 $ — $ 52,296 Loans held for investment (660) — (660) — — — — — — MSR asset 21,969 — 21,969 7,373 — 7,373 (37,926) — (37,926) 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, 2022 and 2021, the estimated fair value of OREO was $2.3 million and $2.8 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 $0.1 million, $1.2 million and $4.4 million during 2022, 2021 and 2020, respectively, which represent a change in fair value subsequent to initial recognition of the asset. Financial Assets and Liabilities Not Measured at Fair Value on Recurring or Non-Recurring Basis 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 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, 2022 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 1,580,162 $ 1,580,162 $ — $ — $ 1,580,162 Assets segregated for regulatory purposes 67,737 67,737 — — 67,737 Securities purchased under agreements to resell 118,070 — 118,070 — 118,070 Held to maturity securities 875,532 — 785,335 — 785,335 Loans held for sale 126,919 — 82,684 42,908 125,592 Loans held for investment, net 7,988,050 — 431,223 7,434,038 7,865,261 Broker-dealer and clearing organization receivables 1,038,055 — 1,038,055 — 1,038,055 Other assets 77,052 — 75,386 1,666 77,052 Financial liabilities: Deposits 11,315,749 — 11,295,153 — 11,295,153 Broker-dealer and clearing organization payables 966,470 — 966,470 — 966,470 Short-term borrowings 970,056 — 970,056 — 970,056 Debt 346,654 — 350,104 — 350,104 Other liabilities 5,410 — 5,410 — 5,410 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2021 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 2,823,523 $ 2,823,523 $ — $ — $ 2,823,523 Assets segregated for regulatory purposes 221,740 221,740 — — 221,740 Securities purchased under agreements to resell 118,262 — 118,262 — 118,262 Held to maturity securities 267,684 — 276,296 — 276,296 Loans held for sale 95,599 — 95,599 — 95,599 Loans held for investment, net 7,788,552 — 733,193 7,266,732 7,999,925 Broker-dealer and clearing organization receivables 1,672,946 — 1,672,946 — 1,672,946 Other assets 73,041 — 71,290 1,751 73,041 Financial liabilities: Deposits 12,818,077 — 12,821,138 — 12,821,138 Broker-dealer and clearing organization payables 1,477,300 — 1,477,300 — 1,477,300 Short-term borrowings 859,444 — 859,444 — 859,444 Debt 387,904 — 387,904 — 387,904 Other liabilities 3,944 — 3,944 — 3,944 The Company held equity investments other than securities of $57.6 million and $54.0 million at December 31, 2022 and 2021, respectively, which are included within other assets in the consolidated balance sheets. Of the $57.6 million of such equity investments held at December 31, 2022, $27.3 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, 2022 2021 Balance, beginning of year $ 16,817 $ 22,844 Additional investments 11,000 — Upward adjustments 916 6,411 Impairments and downward adjustments (1,469) (1,072) Dispositions — (11,366) Balance, end of year $ 27,264 $ 16,817 |
Securities
Securities | 12 Months Ended |
Dec. 31, 2022 | |
Securities | |
Securities | 5. Securities The fair value of trading securities are summarized as follows (in thousands). December 31, 2022 2021 U.S. Treasury securities $ 10,466 $ 3,728 U.S. government agencies: Bonds 20,878 3,410 Residential mortgage-backed securities 214,100 152,093 Collateralized mortgage obligations 182,717 126,389 Corporate debt securities 42,685 60,671 States and political subdivisions 260,271 285,376 Private-label securitized product 9,265 11,377 Other 14,650 4,954 Totals $ 755,032 $ 647,998 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 $53.0 million and $96.6 million at December 31, 2022 and 2021, 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, 2022 Cost Gains Losses Fair Value U.S. Treasury securities $ 19,655 $ 3 $ (514) $ 19,144 U.S. government agencies: Bonds 202,834 323 (900) 202,257 Residential mortgage-backed securities 455,121 12 (48,775) 406,358 Commercial mortgage-backed securities 183,266 65 (7,832) 175,499 Collateralized mortgage obligations 887,521 — (68,627) 818,894 States and political subdivisions 40,160 57 (3,603) 36,614 Totals $ 1,788,557 $ 460 $ (130,251) $ 1,658,766 Available for Sale Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. Treasury securities $ 14,937 $ — $ (75) $ 14,862 U.S. government agencies: Bonds 43,448 838 (153) 44,133 Residential mortgage-backed securities 900,084 7,979 (9,617) 898,446 Commercial mortgage-backed securities 219,460 367 (9,128) 210,699 Collateralized mortgage obligations 926,783 2,547 (12,464) 916,866 States and political subdivisions 43,923 1,839 (200) 45,562 Totals $ 2,148,635 $ 13,570 $ (31,637) $ 2,130,568 Held to Maturity Amortized Unrealized Unrealized December 31, 2022 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 301,583 $ — $ (29,727) $ 271,856 Commercial mortgage-backed securities 180,942 — (14,935) 166,007 Collateralized mortgage obligations 314,705 — (38,343) 276,362 States and political subdivisions 78,302 26 (7,218) 71,110 Totals $ 875,532 $ 26 $ (90,223) $ 785,335 Held to Maturity Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 9,892 $ 400 $ — $ 10,292 Commercial mortgage-backed securities 145,742 5,311 — 151,053 Collateralized mortgage obligations 43,990 476 — 44,466 States and political subdivisions 68,060 2,428 (3) 70,485 Totals $ 267,684 $ 8,615 $ (3) $ 276,296 Additionally, the Company had unrealized net gains of $0.1 million and $0.2 million at December 31, 2022 and 2021 from equity securities with fair values of $0.2 million and $0.2 The Company transferred certain agency-issued securities from the available-for-sale to held-to-maturity portfolio on March 31, 2022 having a book value of approximately $782 million and a market value of approximately $708 million. As of the date of transfer, the related pre-tax net unrecognized losses of approximately $74 million within the accumulated other comprehensive loss balance are being amortized over the remaining term of the securities using the effective interest method. This transfer was completed after careful consideration of the Company’s intent and ability to hold these securities to maturity. Factors used in assessing the ability to hold these securities to maturity were future liquidity needs and sources of funding. Information regarding available for sale and held to maturity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). December 31, 2022 December 31, 2021 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. treasury securities: Unrealized loss for less than twelve months — $ — $ — 2 $ 14,862 $ 75 Unrealized loss for twelve months or longer 1 4,465 514 — — — 1 4,465 514 2 14,862 75 U.S. government agencies: Bonds: Unrealized loss for less than twelve months 15 98,246 388 2 9,904 94 Unrealized loss for twelve months or longer 3 15,263 512 1 6,184 59 18 113,509 900 3 16,088 153 Residential mortgage-backed securities: Unrealized loss for less than twelve months 95 168,351 10,036 52 548,392 6,915 Unrealized loss for twelve months or longer 30 236,739 38,739 17 104,378 2,702 125 405,090 48,775 69 652,770 9,617 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 11 79,337 2,047 5 65,636 1,776 Unrealized loss for twelve months or longer 8 86,923 5,785 14 138,619 7,352 19 166,260 7,832 19 204,255 9,128 Collateralized mortgage obligations: Unrealized loss for less than twelve months 97 563,872 30,980 72 618,464 11,316 Unrealized loss for twelve months or longer 48 244,917 37,647 10 62,647 1,148 145 808,789 68,627 82 681,111 12,464 States and political subdivisions: Unrealized loss for less than twelve months 34 20,555 964 14 5,576 200 Unrealized loss for twelve months or longer 29 7,892 2,639 — — — 63 28,447 3,603 14 5,576 200 Total available for sale: Unrealized loss for less than twelve months 252 930,361 44,415 147 1,262,834 20,376 Unrealized loss for twelve months or longer 119 596,199 85,836 42 311,828 11,261 371 $ 1,526,560 $ 130,251 189 $ 1,574,662 $ 31,637 December 31, 2022 December 31, 2021 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Held to Maturity Residential mortgage-backed securities: Unrealized loss for less than twelve months 14 $ 59,089 $ 5,928 — $ — $ — Unrealized loss for twelve months or longer 31 212,768 23,799 — — — 45 271,857 29,727 — — — Commercial mortgage-backed securities: Unrealized loss for less than twelve months 30 163,172 14,483 — — — Unrealized loss for twelve months or longer 1 2,834 452 — — — 31 166,006 14,935 — — — Collateralized mortgage obligations: Unrealized loss for less than twelve months 18 33,836 3,225 — — — Unrealized loss for twelve months or longer 38 242,527 35,118 — — — 56 276,363 38,343 — — — States and political subdivisions: Unrealized loss for less than twelve months 150 59,459 5,362 2 558 1 Unrealized loss for twelve months or longer 27 8,093 1,856 1 266 2 177 67,552 7,218 3 824 3 Total held to maturity: Unrealized loss for less than twelve months 212 315,556 28,998 2 558 1 Unrealized loss for twelve months or longer 97 466,222 61,225 1 266 2 309 $ 781,778 $ 90,223 3 $ 824 $ 3 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, 2022 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 $ 34,856 $ 34,636 $ 853 $ 849 Due after one year through five years 80,274 79,428 1,121 1,084 Due after five years through ten years 63,313 62,849 23,764 22,429 Due after ten years 84,206 81,102 52,564 46,748 262,649 258,015 78,302 71,110 Residential mortgage-backed securities 455,121 406,358 301,583 271,856 Commercial mortgage-backed securities 183,266 175,499 180,942 166,007 Collateralized mortgage obligations 887,521 818,894 314,705 276,362 $ 1,788,557 $ 1,658,766 $ 875,532 $ 785,335 During 2022, 2021 and 2020, the Company recognized net gains from its trading portfolio of $23.7 million, $26.4 million and $122.0 million, respectively. In addition, the Hilltop Broker-Dealers realized net gains from structured product trading activities of $21.0 million, $68.7 million and $77.1 million during 2022, 2021 and 2020, respectively. During 2022, the Company’s other realized losses on securities were nominal. During 2021, the Company had other realized losses on securities of $0.1 million, compared with other realized gains on securities during 2020 of $0.2 million. 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 $778.6 million and $809.9 million (with a fair value of $717.6 million and $817.7 million, respectively) at December 31, 2022 and 2021, 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, 2022 and 2021. 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, 2022 | |
Loans Held for Investment | |
Loans Held for Investment | 6. 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 real estate (including construction and land development), wholesale/retail trade, agribusiness and energy. 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, December 31, 2022 2021 Commercial real estate $ 3,245,873 $ 3,042,729 Commercial and industrial (1) 1,639,980 1,875,420 Construction and land development 980,896 892,783 1-4 family residential 1,767,099 1,303,430 Consumer 27,602 32,349 Broker-dealer (2) 431,223 733,193 8,092,673 7,879,904 Allowance for credit losses (95,442) (91,352) Total loans held for investment, net of allowance $ 7,997,231 $ 7,788,552 (1) Included loans totaling $77.7 million at December 31, 2021 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 December 31, 2022 December 31, 2021 Interest Income Recognized With With No With With No Year Ended December 31, Allowance Allowance Total Allowance Allowance Total 2022 2021 2020 Commercial real estate: Non-owner occupied $ 688 $ 562 $ 1,250 $ 413 $ 1,853 $ 2,266 $ 483 $ 378 $ 1,364 Owner occupied 2,862 157 3,019 3,058 1,277 4,335 556 648 295 Commercial and industrial 3,727 5,368 9,095 16,536 5,942 22,478 1,099 2,585 2,362 Construction and land development 1 — 1 2 — 2 29 202 110 1-4 family residential 433 10,862 11,295 902 17,306 18,208 3,420 3,721 1,568 Consumer 14 — 14 23 — 23 — (120) 122 Broker-dealer — — — — — — — — — $ 7,725 $ 16,949 $ 24,674 $ 20,934 $ 26,378 $ 47,312 $ 5,587 $ 7,414 $ 5,821 At December 31, 2022 and 2021, $4.8 million and $2.9 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 decreased from December 31, 2021 to December 31, 2022, by $22.6 million. The change in non-accrual loans was primarily due to decreases in commercial and industrial loans of $13.4 million, 1-4 family residential loans of $6.9 million, and commercial real estate owner occupied loans of $1.3 million. The decrease in non-accrual commercial and industrial loans was due to $11.8 million in loan payoffs and paydowns and $4.6 million in charge-offs, partially offset by $3.0 million in additional loans placed on non-accrual status. The decrease in non-accrual 1-4 family residential loans was primarily due to $4.3 million of loans that were returned to accrual status and $3.5 million in loan payoffs and paydowns. 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, allowed 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 2022, 2021, and 2020 that did not qualify for the CARES Act exemption is shown in the following table (dollars in thousands). Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Number of Balance at Balance at Number of Balance at Balance at Number of Balance at Balance at Loans Extension End of Year Loans Extension End of Year Loans Extension End of Year Commercial real estate: Non-owner occupied — $ — $ — — $ — $ — — $ — $ — Owner occupied 2 2,743 2,072 1 725 713 — — — Commercial and industrial 1 873 734 — — — 3 9,464 4,116 Construction and land development — — — — — — — — — 1-4 family residential — — — — — — 5 438 438 Consumer — — — — — — — — — Broker-dealer — — — — — — — — — 3 $ 3,616 $ 2,806 1 $ 725 $ 713 8 $ 9,902 $ 4,554 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 2022, 2021 or 2020. At December 31, 2022 and 2021, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs. There were two TDRs totaling $2.2 million granted during the twelve months preceding December 31, 2022 for which a payment was at least 30 days past due. The $2.2 million included one commercial real estate owner occupied loan of $2.1 million and one 1-4 family residential loan of $0.1 million. There were no TDRs granted during the twelve months preceding December 31, 2021 or 2020 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 Total Past Current Total Past Due December 31, 2022 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 567 $ — $ 235 $ 802 $ 1,869,750 $ 1,870,552 $ — Owner occupied 1,037 2,880 — 3,917 1,371,404 1,375,321 — Commercial and industrial 609 82 5,598 6,289 1,633,691 1,639,980 49 Construction and land development 3,665 — — 3,665 977,231 980,896 — 1-4 family residential 9,733 773 4,467 14,973 1,752,126 1,767,099 1 Consumer 177 7 14 198 27,404 27,602 1 Broker-dealer — — — — 431,223 431,223 — $ 15,788 $ 3,742 $ 10,314 $ 29,844 $ 8,062,829 $ 8,092,673 $ 51 Accruing Loans Loans Past Due Total Past Current Total Past Due December 31, 2021 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 117 $ — $ 1,173 $ 1,290 $ 1,728,409 $ 1,729,699 $ — Owner occupied 590 688 2,273 3,551 1,309,479 1,313,030 — Commercial and industrial 1,059 277 13,640 14,976 1,860,444 1,875,420 1 Construction and land development 946 — — 946 891,837 892,783 — 1-4 family residential 7,642 2,738 4,842 15,222 1,288,208 1,303,430 100 Consumer 123 22 22 167 32,182 32,349 — Broker-dealer — — — — 733,193 733,193 — $ 10,477 $ 3,725 $ 21,950 $ 36,152 $ 7,843,752 $ 7,879,904 $ 101 In addition to the loans shown in the tables above, PrimeLending had $92.0 million and $60.7 million of loans included in loans held for sale (with an aggregate unpaid principal balance of $92.4 million and $61.7 million, respectively) that were 90 days past due and accruing interest at December 31, 2022 and 2021, 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 COVID-19 pandemic, the Company allowed modifications, such as payment deferrals for up to 90 days and temporary forbearance, to credit-worthy borrowers who were experiencing temporary hardship due to the effects of COVID-19. These short-term modifications generally met the criteria of the CARES Act and, therefore, were 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. At December 31, 2022, the Company had no loans remaining under the COVID-19 payment deferral program. 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, 2022, PrimeLending had $43.8 million of loans subject to repurchase under a forbearance agreement related to delinquencies on or after April 1, 2020. 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 2017 and December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Commercial real estate: non-owner occupied Internal Grade 1-3 (Pass low risk) $ 49,168 $ 71,349 $ 20,340 $ 7,967 $ 3,882 $ 7,834 $ 1 $ 160,541 Internal Grade 4-7 (Pass normal risk) 355,211 338,276 131,470 82,524 44,138 47,723 53,886 1,053,228 Internal Grade 8-11 (Pass high risk and watch) 98,068 131,054 129,128 61,080 48,085 76,735 12,604 556,754 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 73,578 14,794 1,627 8,042 — 738 — 98,779 Internal Grade 14 (Substandard non-accrual) — 395 — — — 855 — 1,250 Commercial real estate: owner occupied Internal Grade 1-3 (Pass low risk) $ 20,666 $ 101,673 $ 60,303 $ 20,453 $ 13,033 $ 62,397 $ 4,742 $ 283,267 Internal Grade 4-7 (Pass normal risk) 188,833 193,614 81,937 80,572 85,674 48,216 15,189 694,035 Internal Grade 8-11 (Pass high risk and watch) 83,827 67,387 91,528 29,250 58,676 25,881 6,762 363,311 Internal Grade 12 (Special mention) — 94 454 — — — — 548 Internal Grade 13 (Substandard accrual) 2,240 2,794 5,994 2,826 2,762 14,525 — 31,141 Internal Grade 14 (Substandard non-accrual) 174 680 — — — 2,165 — 3,019 Commercial and industrial Internal Grade 1-3 (Pass low risk) $ 31,517 $ 28,724 $ 23,292 $ 5,626 $ 1,289 $ 2,086 $ 51,720 $ 144,254 Internal Grade 4-7 (Pass normal risk) 148,449 146,330 48,756 25,523 8,666 10,846 349,161 737,731 Internal Grade 8-11 (Pass high risk and watch) 146,941 50,878 30,107 15,734 2,114 9,557 242,413 497,744 Internal Grade 12 (Special mention) — — — 3,254 — — 202 3,456 Internal Grade 13 (Substandard accrual) 2,160 4,041 6,393 4,143 3,500 2,993 14,421 37,651 Internal Grade 14 (Substandard non-accrual) 240 196 6,162 — 2,200 297 — 9,095 Construction and land development Internal Grade 1-3 (Pass low risk) $ 23,803 $ 7,419 $ 424 $ 870 $ 443 $ 2,609 $ 1 $ 35,569 Internal Grade 4-7 (Pass normal risk) 364,342 171,250 33,189 2,602 3,686 1,897 39,653 616,619 Internal Grade 8-11 (Pass high risk and watch) 203,560 51,400 17,397 2,454 — 1,349 19,694 295,854 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 5,249 — — — — — — 5,249 Internal Grade 14 (Substandard non-accrual) — — — — — 1 — 1 Construction and land development - individuals FICO less than 620 $ — $ — $ — $ — $ — $ — $ — $ — FICO between 620 and 720 1,214 — — — 969 — — 2,183 FICO greater than 720 18,820 824 54 — — — — 19,698 Substandard non-accrual — — — — — — — — Other (1) 5,723 — — — — — — 5,723 1-4 family residential FICO less than 620 $ 1,202 $ 723 $ 774 $ 508 $ 3,514 $ 21,302 $ 259 $ 28,282 FICO between 620 and 720 9,267 12,893 8,424 5,003 5,957 25,616 3,958 71,118 FICO greater than 720 518,003 785,766 106,067 45,511 28,060 45,644 3,320 1,532,371 Substandard non-accrual — — — — 254 11,041 — 11,295 Other (1) 95,054 18,371 1,602 2,363 571 4,003 2,069 124,033 Consumer FICO less than 620 $ 1,317 $ 222 $ 107 $ 29 $ 1 $ 12 $ 363 $ 2,051 FICO between 620 and 720 4,017 922 514 374 31 371 1,922 8,151 FICO greater than 720 5,033 1,441 1,133 351 69 — 2,770 10,797 Substandard non-accrual — — — — — 14 — 14 Other (1) 5,215 690 383 83 2 18 198 6,589 Total loans with credit quality measures $ 2,462,891 $ 2,204,200 $ 807,559 $ 407,142 $ 317,576 $ 426,725 $ 825,308 $ 7,451,401 Commercial and industrial (mortgage warehouse lending) $ 200,868 Commercial and industrial (loans accounted for at fair value) $ 9,181 Broker-Dealer (margin loans and correspondent receivables) $ 431,223 Total loans held for investment $ 8,092,673 (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, 2022 | |
Allowance for Credit Losses | |
Allowance for Credit Losses | 7. 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, 2022. In addition, as of December 31, 2022, 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. 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’s methodology for determining the allowance for credit losses uses the current expected credit losses (“CECL”) standard. 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, 2022. While the Company believes it has an appropriate allowance for the existing loan portfolio at December 31, 2022, 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 changes in macroeconomic forecasts and loan cash flow assumptions. 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, 2022, the Company utilized a single macroeconomic alternative scenario, or S7, published by Moody’s Analytics in December 2022 that was updated to reflect the U.S. economic outlook. This alternative economic scenario expects inflation to rise more than the baseline scenario as the military conflict between Russia and Ukraine persists longer than anticipated. Inflation continues to trend higher than expectation as supply-chain issues and reductions in disposable income persist during the reasonable and supportable period. Federal Reserve monetary policy raises interest rates faster and higher than the baseline scenario where the federal funds rate increases to 5.3% by the second quarter of 2023. 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 adversely impacted financial markets and overall economic conditions, and may continue to have implications on borrowers across our lending portfolios. Significant judgment is required to estimate the severity and duration of the current economic uncertainties, as well as its potential impact on borrower defaults and loss severity. In particular, macroeconomic conditions and forecasts are rapidly changing and remain highly 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 reflected economic uncertainty which, along with the expectation of continued higher unemployment and lower GDP, had increased the probability of default and loss given default rates used in our estimate of the lifetime expected credit losses for our loan portfolio. During 2021, the decrease in the allowance reflected improvements in both realized economic results and the macroeconomic outlook and were significantly comprised of net reversals of credit losses on expected losses of collectively evaluated loans of $58.3 million. Such reversals were primarily due to improvements in both macroeconomic forecast assumptions and credit quality metrics on COVID-19 impacted industry sector exposures. The net impact to the allowance of changes associated with individually evaluated loans during 2021 included a provision for credit losses of $0.1 million. The change in the allowance for credit losses during 2021 was primarily attributable to the Bank and also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior year. The change in the allowance during 2021 was also impacted by net recoveries of $0.5 million. During 2022, the increase in provision for credit losses was driven by a deteriorating U.S. economic outlook since December 31, 2021. The net impact to the allowance of changes associated with collectively evaluated loans included a provision of credit losses of $10.0 million, while individually evaluated loans during 2022 included reversals of credit losses of $1.7 million. The change in the allowance for credit losses during 2022 was primarily attributable to the Bank and also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior year. The change in the allowance during 2022 was also impacted by net charge-offs of $4.2 million. 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, 2022 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 59,354 $ — $ 3,773 $ — $ 128 $ 63,255 Commercial and industrial 21,982 — (1,748) (6,945) 2,746 16,035 Construction and land development 4,674 — 1,377 — — 6,051 1-4 family residential 4,589 — 4,729 (138) 133 9,313 Consumer 578 — 119 (432) 289 554 Broker-dealer 175 — 59 — — 234 Total $ 91,352 $ — $ 8,309 $ (7,515) $ 3,296 $ 95,442 Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2021 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 109,629 $ — $ (50,231) $ (310) $ 266 $ 59,354 Commercial and industrial 27,703 — (6,128) (2,249) 2,656 21,982 Construction and land development 6,677 — (2,003) — — 4,674 1-4 family residential 3,946 — 409 (312) 546 4,589 Consumer 876 — (222) (357) 281 578 Broker-dealer 213 — (38) — — 175 Total $ 149,044 $ — $ (58,213) $ (3,228) $ 3,749 $ 91,352 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 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. 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, 2022 2021 2020 Balance, beginning of year $ 5,880 $ 8,388 $ 2,075 Transition adjustment CECL accounting standard — — 3,837 Other noninterest expense 1,904 (2,508) 2,476 Balance, end of year $ 7,784 $ 5,880 $ 8,388 As previously discussed, the Company adopted the new CECL standard and recorded a transition adjustment entry that resulted in an allowance for credit losses for unfunded commitments of $5.9 million as of January 1, 2020. During 2020, the increase in the allowance for unfunded commitments was primarily due to the macroeconomic uncertainties associated with the impact of the market disruption caused by COVID-19 conditions. During 2021, the decrease in the allowance for unfunded commitments was primarily due to improvements in loan expected loss rates, while during 2022, the increase in the allowance for unfunded commitments was due to increases in both loan expected loss rates and available commitment balances. |
Cash and Due from Banks
Cash and Due from Banks | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Due from Banks | |
Cash and Due from Banks | 8. Cash and Due from Banks Cash and due from banks consisted of the following (in thousands). December 31, 2022 2021 Cash on hand $ 39,588 $ 39,981 Clearings and collection items 162,817 52,405 Deposits at Federal Reserve Bank 1,334,482 2,692,088 Deposits at Federal Home Loan Bank 1,520 1,509 Deposits in FDIC-insured institutions 41,105 37,155 $ 1,579,512 $ 2,823,138 The amounts above include interest-bearing deposits of $1.3 billion and $2.7 billion at December 31, 2022 and 2021, respectively. Cash on hand and deposits at the Federal Reserve Bank satisfy regulatory reserve requirements at December 31, 2022 and 2021. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Premises and Equipment | |
Premises and Equipment | 9. Premises and Equipment The components of premises and equipment are summarized as follows (in thousands). December 31, 2022 2021 Land and premises $ 125,039 $ 122,376 Furniture and equipment 278,265 275,171 403,304 397,547 Less accumulated depreciation and amortization (218,354) (193,109) $ 184,950 $ 204,438 The amounts shown above include gross assets recorded under finance leases of $7.8 million and $7.8 million, with accumulated amortization of $5.9 million and $5.4 million at December 31, 2022 and 2021, respectively. Occupancy expense was reduced by rental income of $2.4 million, $1.7 million and $1.7 million during 2022, 2021 and 2020, respectively. Depreciation and amortization expense on premises and equipment, which includes amortization of finance leases, amounted to $26.8 million, $28.4 million and $27.9 million during 2022, 2021 and 2020, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 10. Goodwill and Other Intangible Assets At December 31, 2022, the carrying amount of goodwill of $267.4 million was comprised of $39.6 million recorded in connection with the acquisition of The Bank of River Oaks (“BORO”) in an all-cash transaction (“BORO Acquisition”) and $227.8 million recorded in connection with the acquisition of PCC pursuant to a plan of merger whereby PCC merged with and into our wholly owned subsidiary (the “PlainsCapital Merger”). Other intangible assets were $11.3 million and $15.3 million at December 31, 2022 and 2021, 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, 2022, the Company determined that the estimated fair value of goodwill for each of its reporting units and other intangible assets exceeded their carrying values. The Company estimated the fair values of goodwill for its reporting units based on both a market and income approach using historical, normalized actual and forecasted results, taking into consideration the amount by which fair value exceeded book value and sensitivities performed. Based on this evaluation, at December 31, 2022, 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 non-cash impairment charges may become necessary that could have a materially adverse impact on the Company’s results of operations and financial condition. Such a charge would have no impact on tangible capital or regulatory capital. 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. Specifically, the mortgage origination and broker-dealer reporting units have each experienced lower-than-forecasted While certain valuation assumptions and judgments may change to account for operating performance of the reporting segments and overall economic conditions, 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 future operating performance of its reporting units, overall economic conditions, market capitalization, 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, 2022 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (46,801) $ 2,129 Trademarks and trade names 20 16,500 (9,063) 7,437 Customer contracts and relationships 12 - 14 15,300 (13,549) 1,751 $ 80,730 $ (69,413) $ 11,317 Estimated Gross Net Useful Life Intangible Accumulated Intangible December 31, 2021 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (44,370) $ 4,560 Trademarks and trade names 20 16,500 (8,312) 8,188 Noncompete agreements 4 4,310 (4,310) — Customer contracts and relationships 12 - 14 15,300 (12,764) 2,536 $ 85,040 $ (69,756) $ 15,284 Amortization expense related to intangible assets during 2022, 2021 and 2020 was $4.0 million, $5.1 million and $6.3 million, respectively. The estimated aggregate future amortization expense for intangible assets at December 31, 2022 is as follows (in thousands). 2023 $ 2,860 2024 1,826 2025 1,028 2026 959 2027 889 Thereafter 3,755 $ 11,317 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2022 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | 11. 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, 2022 2021 2020 Balance, beginning of year $ 86,990 $ 143,742 $ 55,504 Additions 56,974 78,433 162,914 Sales (65,108) (142,558) (36,750) Changes in fair value: Due to changes in model inputs or assumptions (1) 31,292 30,525 (27,261) Due to customer payoffs (9,323) (23,152) (10,665) Balance, end of year $ 100,825 $ 86,990 $ 143,742 December 31, 2022 2021 Mortgage loans serviced for others (2) $ 5,144,558 $ 6,355,927 MSR asset as a percentage of serviced mortgage loans 1.96 % 1.37 % (1) Primarily represents normal customer payments, the impact of changes in interest rates, changes in discount rates and prepayment speed assumptions, and the refinement of other MSR model assumptions. Included in 2022 and 2021 are MSR asset fair value adjustments totaling losses of $0.9 million and gains of $22.8 million, respectively, reflecting the difference between the MSR asset carrying values and the sale prices reflected in the letters of intent to sell the applicable MSR assets. (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, 2022 2021 Weighted average constant prepayment rate 8.14 % 10.02 % Weighted average discount rate 12.10 % 14.32 % Weighted average life (in years) 8.4 7.1 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, 2022 2021 Constant prepayment rate: Impact of 10% adverse change $ (3,288) $ (2,603) Impact of 20% adverse change (6,375) (5,315) Discount rate: Impact of 10% adverse change (4,797) (4,070) Impact of 20% adverse change (9,147) (7,753) 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 $37.5 million, $57.7 million and $35.4 million during 2022, 2021 and 2020, respectively, were included in net gains from sale of loans and other mortgage production income within the consolidated statements of operations. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2022 | |
Deposits | |
Deposits | 12. Deposits Deposits are summarized as follows (in thousands). December 31, 2022 2021 Noninterest-bearing demand $ 3,968,862 $ 4,577,183 Interest-bearing: Demand accounts 4,110,418 3,270,522 Brokered - demand 5,336 114,393 Money market 2,045,554 3,433,341 Brokered - money market 9,031 98,614 Savings 312,140 345,795 Time 864,408 962,752 Brokered - time — 15,477 $ 11,315,749 $ 12,818,077 At December 31, 2022, remaining maturities of uninsured time deposits greater than $250,000 were $367.4 million. Scheduled maturities of all time deposits at December 31, 2022 are as follows (in thousands). 2023 $ 530,633 2024 293,274 2025 22,597 2026 10,198 2027 and thereafter 7,706 $ 864,408 |
Short-term Borrowings
Short-term Borrowings | 12 Months Ended |
Dec. 31, 2022 | |
Short-term Borrowings | |
Short-term Borrowings | 13. Short-term Borrowings Short-term borrowings are summarized as follows (in thousands). December 31, 2022 2021 Federal funds purchased $ 397,108 $ 171,925 Securities sold under agreements to repurchase 297,856 191,547 Short-term bank loans 57,500 142,000 Commercial paper 217,592 353,972 $ 970,056 $ 859,444 Federal Funds Purchased and Securities Sold under Agreements to Repurchase Federal funds purchased and securities sold under agreements to repurchase generally mature one 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, 2022 2021 2020 Average balance during the year $ 573,183 $ 363,964 $ 509,577 Average interest rate during the year 2.19 % 0.34 % 0.89 % Maximum month-end balance during the year $ 741,499 $ 427,553 $ 714,507 December 31, 2022 2021 Average interest rate at end of year 4.37 % 0.31 % Securities underlying the agreements at end of year: Carrying value $ 296,075 $ 191,483 Estimated fair value $ 318,409 $ 205,734 Federal Home Loan Bank (“FHLB”) 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, 2022, the Bank had available collateral of $4.1 billion, substantially all of which was blanket collateral. Other information regarding FHLB short-term borrowings is shown in the following table (dollars in thousands). Year Ended December 31, 2022 2021 2020 Average balance during the year $ — $ — $ 38,634 Average interest rate during the year — % — % 1.63 % Maximum month-end balance during the year $ — $ — $ 150,000 Short-Term Bank Loans 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, 2022 and 2021 was 5.50% and 1.25%, respectively. Commercial Paper Hilltop Securities uses the net proceeds (after deducting related issuance expenses) from the sale of two commercial paper programs 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, 2022, the weighted average maturity of the CP Notes was 138 days at a rate of 4.96%, with a weighted average remaining life of 65 days. At December 31, 2022, the amount outstanding under these secured arrangements was $217.6 million, which was collateralized by securities held for Hilltop Securities accounts valued at $239.4 million. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable | |
Notes Payable | 14. Notes Payable Notes payable consisted of the following (in thousands). December 31, 2022 2021 Senior Notes due April 2025, net of discount of $699 and $886, respectively $ 149,301 $ 149,114 Subordinated Notes due May 2030, net of discount of $610 and $704, respectively 49,390 49,296 Subordinated Notes due May 2035, net of discount of $2,037 and $2,220, respectively 147,963 147,780 Ventures Management lines of credit — 41,714 $ 346,654 $ 387,904 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, 2022, Ventures Management’s ABAs had combined available lines of credit totaling $115.0 million, $40.0 million of which was with a single unaffiliated bank and $75.0 million of which was with the Bank. At December 31, 2022, Ventures Management had outstanding borrowings of $29.0 million, all of which was with the Bank with a stated interest rate of the greater of a calculated index rate on mortgage notes or 3.65%. The weighted average interest rate of these lines of credit at December 31, 2022 was 6.37%. 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, 2022 are as follows (in thousands). 2023 $ — 2024 — 2025 150,000 2026 — 2027 — Thereafter 200,000 $ 350,000 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 15 . 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). December 31, 2022 2021 Finance leases: Premises and equipment $ 7,780 $ 7,780 Accumulated depreciation (5,948) (5,358) Premises and equipment, net $ 1,832 $ 2,422 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, 2022 2021 2020 Operating lease cost $ 36,950 $ 38,862 $ 41,903 Less operating lease and sublease income (2,380) (1,719) (1,676) Net operating lease cost $ 34,570 $ 37,143 $ 40,227 Finance lease cost: Amortization of ROU assets $ 590 $ 590 $ 590 Interest on lease liabilities 478 522 561 Total finance lease cost $ 1,068 $ 1,112 $ 1,151 Supplemental cash flow information related to leases is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 29,216 $ 37,239 $ 31,850 Operating cash flows from finance leases 482 522 561 Financing cash flows from finance leases 759 689 636 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 24,078 $ 41,615 $ 11,723 Finance leases — — — Information regarding the lease terms and discount rates of the Company’s leases is as follows. December 31, 2022 December 31, 2021 Weighted Average Weighted Average Remaining Lease Weighted Average Remaining Lease Weighted Average Lease Classification Term (Years) Discount Rate Term (Years) Discount Rate Operating 5.7 3.89 % 5.9 3.89 % Finance 4.0 4.89 % 4.8 4.84 % Future minimum lease payments, under lease agreements as of December 31, 2022, are presented below (in thousands). Operating Leases Finance Leases 2023 $ 35,123 $ 1,280 2024 27,137 1,163 2025 20,535 886 2026 16,298 813 2027 13,148 448 Thereafter 28,765 149 Total minimum lease payments 141,006 4,739 Less amount representing interest (14,247) (1,333) Lease liabilities $ 126,759 $ 3,406 As of December 31, 2022, the Company had additional operating leases that have not yet commenced with aggregate future minimum lease payments of approximately $1.2 million. These operating leases commenced in January 2023 with four year lease terms. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 16. Income Taxes The significant components of the income tax provision are as follows (in thousands). Year Ended December 31, 2022 2021 2020 Current: Federal $ 24,951 $ 103,396 $ 97,338 State 3,698 21,657 19,150 28,649 125,053 116,488 Deferred: Federal $ 7,377 $ (4,454) $ 13,325 State 807 (2,623) 3,258 8,184 (7,077) 16,583 $ 36,833 $ 117,976 $ 133,071 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, 2022 2021 2020 Computed tax at federal statutory rate $ 32,787 $ 105,855 $ 118,629 Tax effect of: Nondeductible expenses 1,290 1,195 1,193 Compensation limitation 4,106 2,862 1,111 State income taxes 3,559 15,037 17,702 Tax-exempt income, net (1,620) (2,347) (1,706) Minority interest (1,294) (2,436) (4,587) Other (1,995) (2,190) 729 $ 36,833 $ 117,976 $ 133,071 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, 2022 2021 Deferred tax assets: Net operating and built-in loss carryforward $ 1,379 $ 3,599 Purchase accounting adjustment - loans 6,393 8,299 Allowance for credit losses 23,610 21,784 Compensation and benefits 19,055 26,443 Legal and other reserves 6,515 9,146 Foreclosed property 338 1,182 Net unrealized losses on securities and other investments 40,116 — Operating lease liabilities 29,993 32,830 Other 4,973 6,168 132,372 109,451 Deferred tax liabilities: Premises and equipment 17,860 20,066 Intangible assets 2,360 3,325 Derivatives 393 6,034 Loan servicing 24,098 21,279 Operating lease ROU assets 24,347 28,469 Other 5,263 123 74,321 79,296 Net deferred tax asset $ 58,051 $ 30,155 The Company’s effective tax rate was 23.6%, 23.4% and 23.6% during 2022, 2021 and 2020, respectively. The effective tax rate for 2022, 2021 and 2020 approximated statutory rates and included the effect of investments in tax-exempt instruments, offset by nondeductible expenses. At December 31, 2022, the Company had no net operating loss carryforwards for federal income tax purposes. At December 31, 2022, the Company had a recognized built-in loss (“RBIL”) carryover of $4.2 million from the ownership change resulting from the acquisition of SWS Group, Inc. (“SWS Merger”). These RBILs that were recognized during a five year recognition period before January 1, 2020 are subject to an annual Section 382 limitation. 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, 2022 or 2021. 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, 2022 and 2021, the total amount of gross unrecognized tax benefits was $5.3 million and $4.9 million, respectively, of which $4.2 million and $3.8 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, 2022 2021 2020 Balance, beginning of year $ 4,869 $ 3,778 $ 2,808 Increases related to tax positions taken during a prior year — 603 327 Decreases related to tax positions taken during a prior year (767) — — Increases related to tax positions taken during the current year 2,077 1,249 1,017 Decreases related to expiration of the statute of limitations (906) (761) (374) Balance, end of year $ 5,273 $ 4,869 $ 3,778 Specific positions that may be resolved include issues involving apportionment and tax credits. At December 31, 2022, 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 2019. The Company is open for various state tax examinations for tax years 2018 and later. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefits | |
Employee Benefits | 17. 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 $15.9 million, $18.5 million and $17.7 million during 2022, 2021 and 2020, 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 both December 31, 2022 and 2021, 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, 2022 and 2021, the carrying value of the policies included in other assets was $27.9 million and $27.4 million, respectively. During each of 2022, 2021 and 2020, the Bank recorded income of $0.5 million, $0.5 million and $0.5 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. The SWS Plan was formally terminated in September 2022 with scheduled liquidation and distributions to participants no later than August 2024. 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, 2022 and 2021. 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, at December 31, 2022 and 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | 18. 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 24.4% of the outstanding Hilltop common stock at December 31, 2022. 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 $0.5 million and $0.6 million at December 31, 2022 and 2021, 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 2022, there were no principal additions and payments were de minimis. At December 31, 2022 and 2021, the Bank held deposits of related parties of $233.1 million and $320.3 million, respectively. A related party is the lessor in an operating lease with Hilltop. Hilltop’s minimum payment under the lease is currently $0.6 million annually through 2028, for an aggregate minimum remaining obligation of $3.5 million at December 31, 2022. The Bank purchased loans from a company for which a related party served as a director, president and chief executive officer. At December 31, 2022 and 2021, the outstanding balance of the purchased loans was $0.1 million and $0.3 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 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 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 Hilltop and the Bank entered into separate 129-month June 20, 2019 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, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 19. Commitments and Contingencies During 2022, the Bank acted as agent on behalf of certain correspondent banks in the purchase and sale of federal funds. At December 31, 2022 and 2021, the Bank did not have any federal funds sold acting as an agent. 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. On June 8, 2022, WR Investments, LP (“WR”) filed claims against Hilltop Securities, et al. through FINRA Dispute Resolution, Midwest Region. WR alleges it suffered a $13.0 million loss in its sale of subordinated bonds related to a portfolio of senior living facilities sold by an affiliate of WR. Hilltop Securities believes the claims are without merit and intends to vigorously defend against such claims. There can be no assurance, however, that Hilltop Securities will be successful. At present, Hilltop Securities is unable to estimate the probability or amount of potential losses, if any, related to these claims. In September 2020, PrimeLending received an investigative inquiry from the United States Attorney for the Western District of Virginia regarding PrimeLending’s float down option. The United States Attorney has issued grand jury subpoenas to PrimeLending and PlainsCapital Bank for additional materials regarding this matter. PrimeLending has, and PrimeLending and PlainsCapital Bank will, cooperate with requests for information with respect to this matter. 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, 2022 and 2021, the mortgage origination segment’s indemnification liability reserve totaled $20.5 million and $27.4 million, respectively. The provision for indemnification losses was $1.5 million, $10.0 million, and $11.2 million during 2022, 2021, and 2020, 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, 2022 2021 2020 Balance, beginning of year $ 31,407 $ 30,085 $ 32,144 Claims made 56,579 26,290 17,429 Claims resolved with no payment (14,499) (11,690) (7,778) Repurchases (42,243) (11,934) (11,588) Indemnification payments — (1,344) (122) Balance, end of year $ 31,244 $ 31,407 $ 30,085 Indemnification Liability Reserve Activity Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 27,424 $ 21,531 $ 11,776 Additions for new sales 2,532 10,966 9,991 Repurchases (7,941) (3,559) (768) Early payment defaults (423) (189) (624) Indemnification payments — (366) (39) Change in reserves for loans sold in prior years (1,064) (959) 1,195 Balance, end of year $ 20,528 $ 27,424 $ 21,531 December 31, 2022 2021 Reserve for Indemnification Liability: Specific claims $ 627 $ 345 Incurred but not reported claims 19,901 27,079 Total $ 20,528 $ 27,424 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 17 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, 2022, 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, 2022 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | 20. 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 $2.5 billion at December 31, 2022 and outstanding financial and performance standby letters of credit of $75.8 million at December 31, 2022. 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, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 21. 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, 2022, 2,469,241 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 $15.6 million, $17.5 million and $14.6 million during 2022, 2021 and 2020, respectively. During 2022, 2021 and 2020, Hilltop granted 21,545, 17,330 and 31,222 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 for the periods presented (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value 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 Granted 532 $ 32.93 Vested/Released (475) $ 27.63 Forfeited (21) $ 23.29 Balance, December 31, 2021 1,869 $ 23.16 Granted 551 $ 33.22 Vested/Released (732) $ 20.00 Forfeited (140) $ 24.75 Balance, December 31, 2022 1,548 $ 28.09 Vested/Released RSUs include an aggregate of 302,718 shares withheld to satisfy employee statutory tax obligations during 2022, 2021 and 2020. During 2022, the Compensation Committee of the board of directors of the Company awarded certain executives and key employees an aggregate of 476,560 RSUs pursuant to the Equity Plans. At December 31, 2022, 326,127 of these RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 135,558 of these outstanding RSUs will cliff vest At December 31, 2022, in the aggregate, 1,137,618 of the RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 408,458 outstanding RSUs cliff vest based upon the achievement of certain performance |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2022 | |
Regulatory Matters | |
Regulatory Matters | 22. 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. The following table shows 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, 2022 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. Minimum Capital Requirements Including Conservation To Be Well December 31, 2022 December 31, 2021 Buffer Capitalized Amount Ratio Amount Ratio Ratio Ratio Tier 1 capital (to average assets): PlainsCapital $ 1,405,164 10.26 % $ 1,469,695 10.20 % 4.0 % 5.0 % Hilltop 1,900,701 11.47 % 2,262,356 12.58 % 4.0 % N/A Common equity Tier 1 capital PlainsCapital 1,405,164 14.98 % 1,469,695 16.00 % 7.0 % 6.5 % Hilltop 1,900,701 18.23 % 2,262,356 21.22 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,405,164 14.98 % 1,469,695 16.00 % 8.5 % 8.0 % Hilltop 1,900,701 18.23 % 2,262,356 21.22 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,492,576 15.91 % 1,540,100 16.77 % 10.5 % 10.0 % Hilltop 2,187,652 20.98 % 2,532,008 23.75 % 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, 2022 December 31, 2021 PlainsCapital Hilltop PlainsCapital Hilltop Total equity capital $ 1,533,492 $ 2,036,924 $ 1,721,780 $ 2,522,668 Add: Net unrealized holding losses (gains) on securities available for sale and held in trust 133,531 133,531 10,219 10,219 CECL transition adjustment 5,898 6,594 7,864 8,792 Deduct: Goodwill and other disallowed intangible assets (267,757) (276,348) (270,168) (279,323) Common equity Tier 1 capital (as defined) 1,405,164 1,900,701 1,469,695 2,262,356 Add: Tier 1 capital — — — — Deduct: Additional Tier 1 capital deductions — — — — Tier 1 capital (as defined) 1,405,164 1,900,701 1,469,695 2,262,356 Add: Allowable Tier 2 capital Allowance for credit losses, including unfunded commitments 102,991 103,226 91,177 91,352 Capital instruments — 200,000 — 200,000 Deduct: Additional Tier 2 capital deductions (15,579) (16,275) (20,772) (21,700) Total capital (as defined) $ 1,492,576 $ 2,187,652 $ 1,540,100 $ 2,532,008 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 requirements 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 $1,000,000 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, 2022, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). Momentum Hilltop Independent Securities Network Net capital $ 261,665 $ 3,672 Less: required net capital 8,205 250 Excess net capital $ 253,460 $ 3,422 Net capital as a percentage of aggregate debit items 63.8 % Net capital in excess of 5% aggregate debit items $ 241,151 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, 2022 and 2021, the Hilltop Broker-Dealers held cash of $67.7 million and $221.7 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, 2022. 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, 2022, 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, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 23. Stockholders’ Equity The Bank is subject to certain restrictions on the amount of dividends it may declare without prior regulatory approval. At December 31, 2022, $146.7 million of its earnings was available for dividend declaration without prior regulatory approval. Dividends During 2022, 2021 and 2020, the Company declared and paid cash dividends of $0.60, $0.48 and $0.36 per common share, or $43.0 million, $39.0 million and $32.5 million, respectively. On January 26, 2023, the Company announced that its board of directors declared a quarterly cash dividend of $0.16 per common share, payable on February 24, 2023, to all common stockholders of record as of the close of business on February 10, 2023. 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 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. 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 an 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 was originally authorized to repurchase, in the aggregate, up to $75.0 million of its outstanding common stock. In July 2021, the Hilltop board of directors authorized an increase to the aggregate amount of common stock the Company could repurchase under this program by $75.0 million to $150.0 million. Then, in October 2021, the Hilltop board of directors authorized an increase to the aggregate amount of common stock the Company could repurchase under this program by $50.0 million to $200.0 million, which is inclusive of repurchases to offset dilution related to grants of stock-based compensation. During 2021, the Company paid $123.6 million to repurchase an aggregate of 3,632,482 shares of common stock at an average price of $34.01 per share. In January 2022, the Hilltop board of directors authorized a new stock repurchase program through January 2023, pursuant to which the Company was originally authorized to repurchase, in the aggregate, up to $100.0 million of its outstanding common stock, inclusive of repurchases to offset dilution related to grants of stock-based compensation. As a result of share repurchased during 2022, including the tender offer described below, Hilltop had no further available share repurchase capacity associated with its previously authorized stock repurchase program. In January 2023, the Hilltop board of directors authorized a new stock repurchase program through January 2024, 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 Offers 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. The Company funded the tender offer with cash on hand. On May 2, 2022, 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 of up to $400 million, inclusive of its $100.0 million stock repurchase program authorized in January 2022. On May 27, 2022, including the exercise of its right to purchase up to an additional 2% of its outstanding shares, the Company completed its tender offer, repurchasing 14,868,469 shares of outstanding common stock at a price of $29.75 per share for a total of $442.3 million. 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, 2022 | |
Other Noninterest Income and Expense | |
Other Noninterest Income and Expense | 24. Other Noninterest Income and Expense The following table shows the components of other noninterest income and expense (in thousands). Year Ended December 31, 2022 2021 2020 Other noninterest income: Net gains from Hilltop Broker-Dealer structured product and derivative activities $ 37,407 $ 48,816 $ 81,111 Net gain from trading securities portfolio 23,666 26,353 121,983 Service charges on depositor accounts 16,962 18,081 14,845 Trust fees 13,975 10,998 9,804 Other 21,947 23,786 15,862 $ 113,957 $ 128,034 $ 243,605 Other noninterest expense: Software and information technology $ 64,979 $ 68,105 $ 56,872 Brokerage commissions and fees 27,597 25,826 24,113 Mortgage origination and servicing 25,311 35,421 27,808 Unreimbursed loan closing costs 13,371 20,458 21,696 Business development 12,550 11,998 10,190 Travel, meals and entertainment 9,959 7,646 4,804 Amortization of intangible assets 3,967 5,081 6,301 Funding fees 4,421 4,768 4,461 Office supplies 3,319 3,469 3,953 Other 42,227 42,519 64,560 $ 207,701 $ 225,291 $ 224,758 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 25. 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 various derivative instruments, including U.S. Treasury bond futures and options, Eurodollar futures, credit default swaps and 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 4 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 11 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, 2022 2021 2020 Increase (decrease) in fair value of derivatives during year: PrimeLending $ (21,282) $ (22,170) $ 33,714 Hilltop Broker-Dealers 16,405 (19,884) 3,969 Bank 46 43 (7) Hedging Derivative Instruments The Company has entered into interest rate swap contracts to manage the exposure to changes in fair value associated with certain available for sale fixed rate collateralized mortgage backed securities and fixed rate loans held for investment attributable to changes in the designated benchmark interest rate. Certain of these fair value hedges have been designated as a portfolio layer, 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. Additionally, the Company has outstanding interest rate swap contracts designated as cash flow hedges and utilized to manage the variability of cash flows associated with its variable rate borrowings. Under each of its interest rate swap contracts designated as hedges, the Company receives a floating rate and pays a fixed rate on the outstanding notional amount. The Company assesses 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 derivative instruments are highly effective in offsetting the variability of the hedged cash flows or fair value, 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 hedges that the derivative instruments will be highly effective hedges throughout the term of the contract, any portion of derivative instruments subsequently determined to be ineffective will be recognized in earnings. Derivative positions are presented in the following table (in thousands). December 31, 2022 December 31, 2021 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments (not designated as hedges): IRLCs $ 506,278 $ 1,767 $ 1,283,152 $ 25,489 Commitments to purchase MBSs 819,681 2,435 1,575,264 (674) Commitments to sell MBSs 2,188,964 10,711 3,314,173 (355) Interest rate swaps 35,784 (1,421) 68,413 (1,949) U.S. Treasury bond futures and options (1) 395,500 (449) 247,800 — Eurodollar and other futures (1) 2,612,000 — 2,061,800 — Credit default swaps 3,000 (2) 7,000 (15) Derivative instruments (designated as hedges): Interest rate swaps designated as cash flow hedges $ 430,000 $ 21,703 $ 190,000 $ 603 Interest rate swaps designated as fair value hedges (2) 365,323 42,828 221,232 3,207 (1) Noted derivative instruments include contracts between the Hilltop Broker-Dealers and counterparties with changes in fair value of the contracts that are settled daily. (2) The Company designated $365.3 million and $221.2 million as the hedged amount (from a closed portfolio of prepayable available for sale securities and loans held for investment with a carrying value of $322.5 million and $218.0 million as of December 31, 2022 and 2021, respectively), of which, a subset of these hedges are in portfolio layer hedging relationships. The cumulative basis adjustment included in the carrying value of the hedged items totaled $42.8 million and $3.2 million as of December 31, 2022 and 2021, respectively. The Bank and PrimeLending held aggregate cash collateral advances, in other liabilities within the consolidated balances sheets, of $65.0 million and $3.9 million to offset net asset derivative positions on its commitments to sell MBSs and derivative instruments designated as hedges at December 31, 2022 and 2021, respectively. PrimeLending had advanced cash collateral totaling $8.4 million and $0.1 million to offset net liability positions on its commitments to sell MBSs at December 31, 2022 and 2021, respectively. In addition, PrimeLending and the Hilltop Broker-Dealers had advanced cash collateral totaling $10.6 million and $4.2 million on various derivative instruments at December 31, 2022 and 2021, respectively. The advanced cash collateral amounts are included in other assets within the consolidated balance sheets. |
Balance Sheet Offsetting
Balance Sheet Offsetting | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Offsetting | |
Balance Sheet Offsetting | 26. 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, 2022 Securities borrowed: Institutional counterparties $ 1,012,573 $ — $ 1,012,573 $ (964,517) $ — $ 48,056 Interest rate swaps: Institutional counterparties 64,729 — 64,729 — (64,630) 99 Reverse repurchase agreements: Institutional counterparties 118,070 — 118,070 (115,302) — 2,768 Forward MBS derivatives: Institutional counterparties 16,694 (3,410) 13,284 (9,957) — 3,327 Treasury futures and options derivatives: Institutional counterparties 57 (506) (449) — — (449) $ 1,212,123 $ (3,916) $ 1,208,207 $ (1,089,776) $ (64,630) $ 53,801 December 31, 2021 Securities borrowed: Institutional counterparties $ 1,518,372 $ — $ 1,518,372 $ (1,445,590) $ — $ 72,782 Reverse repurchase agreements: Institutional counterparties 118,262 — 118,262 (118,262) — — Forward MBS derivatives: Institutional counterparties 2,955 (1,773) 1,182 (744) — 438 $ 1,639,589 $ (1,773) $ 1,637,816 $ (1,564,596) $ — $ 73,220 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, 2022 Securities loaned: Institutional counterparties $ 916,570 $ — $ 916,570 $ (871,037) $ — $ 45,533 Interest rate swaps: Institutional counterparties 1,619 — 1,619 (1,438) — 181 Credit default swaps: Institutional counterparties 2 — 2 (2) — — Repurchase agreements: Institutional counterparties 296,978 — 296,978 (319,897) — (22,919) Forward MBS derivatives: Institutional counterparties 138 — 138 (138) — — $ 1,215,307 $ — $ 1,215,307 $ (1,192,512) $ — $ 22,795 December 31, 2021 Securities loaned: Institutional counterparties $ 1,432,196 $ — $ 1,432,196 $ (1,359,850) $ — $ 72,346 Interest rate swaps: Institutional counterparties 1,949 — 1,949 (1,919) — 30 Credit default swaps: Institutional counterparties 15 — 15 (15) — — Repurchase agreements: Institutional counterparties 191,483 — 191,483 (205,734) — (14,251) Forward MBS derivatives: Institutional counterparties 2,211 — 2,211 (2,211) — — $ 1,627,854 $ — $ 1,627,854 $ (1,569,729) $ — $ 58,125 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, 2022 and 2021. Remaining Contractual Maturities Overnight and Greater Than December 31, 2022 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities 130,616 2,539 141,461 22,362 296,978 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 916,457 — — — 916,457 Total $ 1,047,186 $ 2,539 $ 141,461 $ 22,362 $ 1,213,548 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,213,548 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2021 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities $ 93,651 $ — $ 86,357 $ 11,475 $ 191,483 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,432,083 — — — 1,432,083 Total $ 1,525,847 $ — $ 86,357 $ 11,475 $ 1,623,679 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,623,679 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, 2022 | |
Broker-Dealer and Clearing Organization Receivables and Payables | |
Broker-Dealer and Clearing Organization Receivables and Payables | 27. Broker-Dealer and Clearing Organization Receivables and Payables Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). December 31, 2022 2021 Receivables: Securities borrowed $ 1,012,573 $ 1,518,372 Securities failed to deliver 11,350 5,664 Trades in process of settlement 3,476 144,773 Other 10,656 4,137 $ 1,038,055 $ 1,672,946 Payables: Securities loaned $ 916,570 $ 1,432,196 Correspondents 22,760 20,571 Securities failed to receive 20,167 18,808 Other 6,973 5,725 $ 966,470 $ 1,477,300 |
Segment and Related Information
Segment and Related Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment and Related Information | |
Segment and Related Information | 28. Segment and Related Information Following the sale of NLC on June 30, 2020, the Company has two primary business units within continuing operations, PCC (banking and mortgage origination) and Securities Holdings (broker-dealer). Under GAAP, the Company’s 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 have been presented as discontinued operations in the consolidated financial statements. There was no income from discontinued operations before taxes during 2022 and 2021, while income from discontinued operations before taxes was $2.1 million during 2020. 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, 2022 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 413,603 $ 51,597 $ (10,529) $ (13,135) $ 17,439 $ 458,975 Provision for (reversal of) credit losses 8,250 59 — — — 8,309 Noninterest income 49,307 341,943 452,915 7,525 (19,230) 832,460 Noninterest expense 235,190 355,713 478,904 59,030 (1,838) 1,126,999 Income (loss) from continuing operations before taxes $ 219,470 $ 37,768 $ (36,518) $ (64,640) $ 47 $ 156,127 Mortgage All Other and Continuing Year Ended December 31, 2021 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 406,524 $ 43,296 $ (20,400) $ (17,239) $ 10,801 $ 422,982 Provision for (reversal of) credit losses (58,175) (38) — — — (58,213) Noninterest income 45,113 381,125 986,990 9,133 (12,086) 1,410,275 Noninterest expense 226,915 380,798 731,056 50,507 (1,878) 1,387,398 Income (loss) from continuing operations before taxes $ 282,897 $ 43,661 $ 235,534 $ (58,613) $ 593 $ 504,072 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 (reversal of) 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 Hilltop Banking Broker-Dealer Origination Corporate Eliminations Consolidated December 31, 2022 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 13,420,110 $ 2,672,709 $ 1,249,284 $ 2,465,513 $ (3,548,334) $ 16,259,282 December 31, 2021 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 14,944,249 $ 3,673,346 $ 2,207,822 $ 2,940,670 $ (5,077,007) $ 18,689,080 |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per Common Share | |
Earnings per Common Share | 29. 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, 2022 2021 2020 Basic earnings per share: Income from continuing operations $ 113,134 $ 374,495 $ 409,440 Income from discontinued operations — — 38,396 Income attributable to Hilltop $ 113,134 $ 374,495 $ 447,836 Weighted average shares outstanding - basic 70,434 80,708 89,280 Basic earnings per common share: Income from continuing operations $ 1.61 $ 4.64 $ 4.59 Income from discontinued operations — — 0.43 $ 1.61 $ 4.64 $ 5.02 Diluted earnings per share: Income from continuing operations $ 113,134 $ 374,495 $ 409,440 Income from discontinued operations — — 38,396 Income attributable to Hilltop $ 113,134 $ 374,495 $ 447,836 Weighted average shares outstanding - basic 70,434 80,708 89,280 Effect of potentially dilutive securities 192 465 24 Weighted average shares outstanding - diluted 70,626 81,173 89,304 Diluted earnings per common share: Income from continuing operations $ 1.60 $ 4.61 $ 4.58 Income from discontinued operations — — 0.43 $ 1.60 $ 4.61 $ 5.01 |
Financial Statements of Parent
Financial Statements of Parent | 12 Months Ended |
Dec. 31, 2022 | |
Financial Statements of Parent | |
Financial Statements of Parent | 30. 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, 2022 2021 2020 Dividends from bank subsidiaries $ 205,000 $ 295,000 $ 249,771 Dividends from nonbank subsidiaries 10,732 81,675 56,150 Investment income 6,914 4,322 4,102 Interest expense 20,049 21,561 18,294 Other income 7,525 9,070 45,887 General and administrative expense 59,030 50,507 58,130 Income before income taxes and equity in undistributed earnings of subsidiaries activity 151,092 317,999 279,486 Income tax benefit (13,124) (14,065) (13,897) Equity in undistributed earnings of subsidiaries (44,922) 54,032 176,294 Net income $ 119,294 $ 386,096 $ 469,677 Other comprehensive income (loss), net (123,312) (27,982) 6,344 Comprehensive income (loss) $ (4,018) $ 358,114 $ 476,021 Condensed Combined Balance Sheets December 31, 2022 2021 2020 Assets: Cash and cash equivalents $ 205,887 $ 531,260 $ 478,826 Loans held for investment, net of unearned income 9,181 — — Investment in subsidiaries: Bank subsidiaries 1,533,491 1,721,780 1,654,249 Nonbank subsidiaries 427,516 409,835 453,847 Other assets 289,438 277,795 236,452 Total assets $ 2,465,513 $ 2,940,670 $ 2,823,374 Liabilities and Stockholders’ Equity: Accounts payable and accrued expenses $ 34,569 $ 25,762 $ 64,635 Notes payable 370,823 369,618 412,764 Stockholders’ equity 2,060,121 2,545,290 2,345,975 Total liabilities and stockholders’ equity $ 2,465,513 $ 2,940,670 $ 2,823,374 Condensed Combined Statements of Cash Flows Year Ended December 31, 2022 2021 2020 Operating Activities: Net income $ 119,294 $ 386,096 $ 469,677 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries 44,922 (54,032) (176,294) Net realized gains on equity investments — (926) — Net realized gains on disposal of discontinued operations — — (41,901) Deferred income taxes 1,064 (3,049) 4,432 Other, net (981) 14,725 37,465 Net cash provided by operating activities 164,299 342,814 293,379 Investing Activities: Advancement to nonbank subsidiaries — (75,000) — Repayment of advances to/investments in nonbank subsidiaries 15,000 5,762 — Purchases of equity investments (20,006) — (29,365) Purchases of premises and equipment and other (1,015) (2,154) (12,547) Proceeds from sales/disposition of equity investments 4,000 12,292 — Proceeds from sale of discontinued operations — — 154,963 Net cash provided by (used in) investing activities (2,021) (59,100) 113,051 Financing Activities: Payments to repurchase common stock (442,336) (123,631) (208,664) Proceeds from issuance of notes payable — — 196,657 Payments on junior subordinated debentures — (67,012) — Dividends paid on common stock (42,963) (38,978) (32,524) Net cash contributed from (to) noncontrolling interest (918) (909) 825 Other, net (1,434) (750) (369) Net cash used in financing activities (487,651) (231,280) (44,075) Net change in cash and cash equivalents (325,373) 52,434 362,355 Cash and cash equivalents, beginning of year 531,260 478,826 116,471 Cash and cash equivalents, end of year $ 205,887 $ 531,260 $ 478,826 |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
Selected Quarterly Financial Information (Unaudited) | |
Selected Quarterly Financial Information (Unaudited) | 31 Selected Quarterly Financial Information (Unaudited) Selected quarterly financial information is summarized as follows (in thousands, except per share data). Year Ended December 31, 2022 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 179,974 $ 156,472 $ 135,133 $ 119,537 $ 591,116 Interest expense 56,532 32,986 23,077 19,546 132,141 Net interest income 123,442 123,486 112,056 99,991 458,975 Provision for (reversal of) credit losses 3,638 (780) 5,336 115 8,309 Noninterest income 169,784 206,975 239,273 216,428 832,460 Noninterest expense 253,368 288,738 298,543 286,350 1,126,999 Income before income taxes 36,220 42,503 47,450 29,954 156,127 Income tax expense 9,642 9,249 12,127 5,815 36,833 Net income 26,578 33,254 35,323 24,139 119,294 Less: Net income attributable to noncontrolling interest 1,022 1,186 2,063 1,889 6,160 Income attributable to Hilltop $ 25,556 $ 32,068 $ 33,260 $ 22,250 $ 113,134 Earnings per common share: Basic: $ 0.40 $ 0.50 $ 0.45 $ 0.28 $ 1.61 Diluted: $ 0.39 $ 0.50 $ 0.45 $ 0.28 $ 1.60 Cash dividends declared per common share $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.60 Year Ended December 31, 2021 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 123,054 $ 125,178 $ 134,818 $ 146,923 $ 529,973 Interest expense 18,760 20,088 26,902 41,241 106,991 Net interest income 104,294 105,090 107,916 105,682 422,982 Provision for (reversal of) credit losses (18,565) (5,819) (28,720) (5,109) (58,213) Noninterest income 284,846 367,945 339,899 417,585 1,410,275 Noninterest expense 322,194 355,174 343,368 366,662 1,387,398 Income before income taxes 85,511 123,680 133,167 161,714 504,072 Income tax expense 20,715 28,257 31,234 37,770 117,976 Net income 64,796 95,423 101,933 123,944 386,096 Less: Net income attributable to noncontrolling interest 2,612 2,517 2,873 3,599 11,601 Income attributable to Hilltop $ 62,184 $ 92,906 $ 99,060 $ 120,345 $ 374,495 Earnings per common share: Basic: $ 0.79 $ 1.16 $ 1.21 $ 1.46 $ 4.64 Diluted: $ 0.78 $ 1.15 $ 1.21 $ 1.46 $ 4.61 Cash dividends declared per common share $ 0.12 $ 0.12 $ 0.12 $ 0.12 $ 0.48 |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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 as of June 30, 2020 have been presented as discontinued operations in the consolidated financial statements. For further details, see Note 3 to the consolidated financial statements. 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. |
Basis of Presentation | Basis of Presentation The 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 (“SEC”). Other than changes related to the implementation of the current expected credit losses (“CECL”) standard as of January 1, 2020, 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 a controlling ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). PCC also owned 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which were 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. Following receipt of regulatory approval, during June, July and August 2021, PCC submitted to the trustees of each of the Trusts notices to redeem in full outstanding junior subordinated debentures of $67.0 million issued by PCC, which resulted in the full redemption to the holders of the associated preferred securities and common securities during the third quarter of 2021. 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. (“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 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 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. 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. Other than changes related to the implementation of the CECL standard as of January 1, 2020, 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. Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them until maturity. 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. 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, the Company has not recorded expected credit losses for those securities. |
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, both with servicing retained and 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 COVID-19 pandemic, the Company allowed modifications, such as payment deferrals for up to 90 days and temporary forbearance, to credit-worthy borrowers who were experiencing temporary hardship due to the effects of COVID-19. These modifications generally met the criteria of the Economic Security Act (“CARES Act”) passed in March 2020. Therefore, the Company did 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. Purchased credit deteriorated (“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 (“ Collectively Evaluated”) 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. quality of earnings. Other non-financial metrics are also evaluated including the geographies and industries within which it operates, its management strength, and its reputation and historical experience. The internal LGD risk rating also considers assessment of collateral quality and current loan to value, collateral type and loan seniority, covenant strength and performance, as well as any individual, corporate, or government guarantees. 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 grouped 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 grouped 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 losses 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 or worse 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 for the assessment of value. The assessment of value is discounted for selling costs and compared against the appropriate basis of the loan to determine if a reserve might be required. 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. |
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 $0.5 million, $0.4 million and $0.3 million during 2022, 2021 and 2020, 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 |
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, Eurodollar futures, and credit default swaps meet the definition of a derivative under the provisions of the Derivatives and Hedging Topic of the ASC. Derivatives are recorded at fair value and included in other assets and other liabilities within 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, 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 2022, 2021 or 2020. 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, 2022, 2021 and 2020, 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, 2022 | |
Discontinued Operations | |
Schedule of discontinued operations | The following table presents the results of discontinued operations for NLC for 2020 (in thousands). Interest income: Securities: Taxable $ 1,752 Other 71 Total interest income 1,823 Interest expense: Notes payable 775 Noninterest income: Net insurance premiums earned 65,077 Other 3,051 Total noninterest income 68,128 Noninterest expense: Employees' compensation and benefits 6,002 Occupancy and equipment, net 464 Professional services 18,201 Loss and loss adjustment expenses 38,419 Other 3,987 Total noninterest expense 67,073 Income from discontinued operations before income taxes 2,103 Gain on disposal of discontinued operations 36,811 Income tax expense 518 Income from discontinued operations, net of income taxes $ 38,396 |
Schedule of effects of reinsurance on premiums written and earned | The effects of reinsurance on premiums written and earned are included within discontinued operations for 2020 are summarized as follows (in thousands). Written Earned Premiums from direct business $ 63,811 $ 61,384 Reinsurance assumed 6,396 6,452 Reinsurance ceded (2,759) (2,759) Net premiums $ 67,448 $ 65,077 |
Schedule of effects of reinsurance on incurred losses | The effects of reinsurance on incurred losses and LAE are included within discontinued operations for 2020 and are as follows (in thousands). Losses and LAE incurred $ 38,225 Reinsurance recoverables 194 Net loss and LAE incurred $ 38,419 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 Inputs Inputs Inputs Fair Value Trading securities $ 15,456 $ 739,576 $ — $ 755,032 Available for sale securities — 1,658,766 — 1,658,766 Equity securities 200 — — 200 Loans held for sale — 814,990 40,707 855,697 Loans held for investment — — 9,181 9,181 Derivative assets — 88,977 — 88,977 MSR asset — — 100,825 100,825 Securities sold, not yet purchased 25,506 27,517 — 53,023 Derivative liabilities — 11,405 — 11,405 Level 1 Level 2 Level 3 Total December 31, 2021 Inputs Inputs Inputs Fair Value Trading securities $ 8,628 $ 639,370 $ — $ 647,998 Available for sale securities — 2,130,568 — 2,130,568 Equity securities 250 — — 250 Loans held for sale — 1,734,875 47,716 1,782,591 Derivative assets — 48,122 — 48,122 MSR asset — — 86,990 86,990 Securities sold, not yet purchased 45,973 50,613 — 96,586 Derivative liabilities — 21,816 — 21,816 |
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) Included in Balance, Transfers Other Beginning of Purchases/ Sales/ to (from) Included in Comprehensive Balance, Year Additions Reductions Level 3 Net Income Income (Loss) End of Year Year ended December 31, 2022 Loans held for sale $ 47,716 $ 52,058 $ (48,900) $ 5,587 $ (15,754) $ — $ 40,707 Loans held for investment — 9,611 (562) — 132 — 9,181 MSR asset 86,990 56,974 (65,108) — 21,969 — 100,825 Total $ 134,706 $ 118,643 $ (114,570) $ 5,587 $ 6,347 $ — $ 150,713 Year ended December 31, 2021 Loans held for sale $ 71,816 $ 56,480 $ (76,166) $ (4,139) $ (275) $ — $ 47,716 MSR asset 143,742 78,433 (142,558) — 7,373 — 86,990 Total $ 215,558 $ 134,913 $ (218,724) $ (4,139) $ 7,098 $ — $ 134,706 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 |
Schedule of significant unobservable inputs used in the fair value measurements | Range (Weighted-Average) Financial instrument Valuation Technique Unobservable Inputs December 31, 2022 December 31, 2021 Loans held for sale Market comparable Projected price 88 - 95 % ( 89 %) 94 - 95 % ( 95 %) Loans held for investment Discounted cash flow Discount rate 11.88 % — MSR asset Discounted cash flow Constant prepayment rate 8.14 % 10.02 % Discount rate 12.10 % 14.32 % |
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 material instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 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 $ (48,916) $ — $ (48,916) $ (55,442) $ — $ (55,442) $ 52,296 $ — $ 52,296 Loans held for investment (660) — (660) — — — — — — MSR asset 21,969 — 21,969 7,373 — 7,373 (37,926) — (37,926) |
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, 2022 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 1,580,162 $ 1,580,162 $ — $ — $ 1,580,162 Assets segregated for regulatory purposes 67,737 67,737 — — 67,737 Securities purchased under agreements to resell 118,070 — 118,070 — 118,070 Held to maturity securities 875,532 — 785,335 — 785,335 Loans held for sale 126,919 — 82,684 42,908 125,592 Loans held for investment, net 7,988,050 — 431,223 7,434,038 7,865,261 Broker-dealer and clearing organization receivables 1,038,055 — 1,038,055 — 1,038,055 Other assets 77,052 — 75,386 1,666 77,052 Financial liabilities: Deposits 11,315,749 — 11,295,153 — 11,295,153 Broker-dealer and clearing organization payables 966,470 — 966,470 — 966,470 Short-term borrowings 970,056 — 970,056 — 970,056 Debt 346,654 — 350,104 — 350,104 Other liabilities 5,410 — 5,410 — 5,410 Estimated Fair Value Carrying Level 1 Level 2 Level 3 December 31, 2021 Amount Inputs Inputs Inputs Total Financial assets: Cash and cash equivalents $ 2,823,523 $ 2,823,523 $ — $ — $ 2,823,523 Assets segregated for regulatory purposes 221,740 221,740 — — 221,740 Securities purchased under agreements to resell 118,262 — 118,262 — 118,262 Held to maturity securities 267,684 — 276,296 — 276,296 Loans held for sale 95,599 — 95,599 — 95,599 Loans held for investment, net 7,788,552 — 733,193 7,266,732 7,999,925 Broker-dealer and clearing organization receivables 1,672,946 — 1,672,946 — 1,672,946 Other assets 73,041 — 71,290 1,751 73,041 Financial liabilities: Deposits 12,818,077 — 12,821,138 — 12,821,138 Broker-dealer and clearing organization payables 1,477,300 — 1,477,300 — 1,477,300 Short-term borrowings 859,444 — 859,444 — 859,444 Debt 387,904 — 387,904 — 387,904 Other liabilities 3,944 — 3,944 — 3,944 |
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, 2022 2021 Balance, beginning of year $ 16,817 $ 22,844 Additional investments 11,000 — Upward adjustments 916 6,411 Impairments and downward adjustments (1,469) (1,072) Dispositions — (11,366) Balance, end of year $ 27,264 $ 16,817 |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Securities | |
Summary of trading securities | The fair value of trading securities are summarized as follows (in thousands). December 31, 2022 2021 U.S. Treasury securities $ 10,466 $ 3,728 U.S. government agencies: Bonds 20,878 3,410 Residential mortgage-backed securities 214,100 152,093 Collateralized mortgage obligations 182,717 126,389 Corporate debt securities 42,685 60,671 States and political subdivisions 260,271 285,376 Private-label securitized product 9,265 11,377 Other 14,650 4,954 Totals $ 755,032 $ 647,998 |
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, 2022 Cost Gains Losses Fair Value U.S. Treasury securities $ 19,655 $ 3 $ (514) $ 19,144 U.S. government agencies: Bonds 202,834 323 (900) 202,257 Residential mortgage-backed securities 455,121 12 (48,775) 406,358 Commercial mortgage-backed securities 183,266 65 (7,832) 175,499 Collateralized mortgage obligations 887,521 — (68,627) 818,894 States and political subdivisions 40,160 57 (3,603) 36,614 Totals $ 1,788,557 $ 460 $ (130,251) $ 1,658,766 Available for Sale Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. Treasury securities $ 14,937 $ — $ (75) $ 14,862 U.S. government agencies: Bonds 43,448 838 (153) 44,133 Residential mortgage-backed securities 900,084 7,979 (9,617) 898,446 Commercial mortgage-backed securities 219,460 367 (9,128) 210,699 Collateralized mortgage obligations 926,783 2,547 (12,464) 916,866 States and political subdivisions 43,923 1,839 (200) 45,562 Totals $ 2,148,635 $ 13,570 $ (31,637) $ 2,130,568 Held to Maturity Amortized Unrealized Unrealized December 31, 2022 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 301,583 $ — $ (29,727) $ 271,856 Commercial mortgage-backed securities 180,942 — (14,935) 166,007 Collateralized mortgage obligations 314,705 — (38,343) 276,362 States and political subdivisions 78,302 26 (7,218) 71,110 Totals $ 875,532 $ 26 $ (90,223) $ 785,335 Held to Maturity Amortized Unrealized Unrealized December 31, 2021 Cost Gains Losses Fair Value U.S. government agencies: Residential mortgage-backed securities $ 9,892 $ 400 $ — $ 10,292 Commercial mortgage-backed securities 145,742 5,311 — 151,053 Collateralized mortgage obligations 43,990 476 — 44,466 States and political subdivisions 68,060 2,428 (3) 70,485 Totals $ 267,684 $ 8,615 $ (3) $ 276,296 |
Summary of amortized cost and fair value of held to maturity securities | |
Schedule of information regarding available for sale securities that were in an unrealized loss position | Information regarding available for sale and held to maturity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). December 31, 2022 December 31, 2021 Number of Unrealized Number of Unrealized Securities Fair Value Losses Securities Fair Value Losses Available for Sale U.S. treasury securities: Unrealized loss for less than twelve months — $ — $ — 2 $ 14,862 $ 75 Unrealized loss for twelve months or longer 1 4,465 514 — — — 1 4,465 514 2 14,862 75 U.S. government agencies: Bonds: Unrealized loss for less than twelve months 15 98,246 388 2 9,904 94 Unrealized loss for twelve months or longer 3 15,263 512 1 6,184 59 18 113,509 900 3 16,088 153 Residential mortgage-backed securities: Unrealized loss for less than twelve months 95 168,351 10,036 52 548,392 6,915 Unrealized loss for twelve months or longer 30 236,739 38,739 17 104,378 2,702 125 405,090 48,775 69 652,770 9,617 Commercial mortgage-backed securities: Unrealized loss for less than twelve months 11 79,337 2,047 5 65,636 1,776 Unrealized loss for twelve months or longer 8 86,923 5,785 14 138,619 7,352 19 166,260 7,832 19 204,255 9,128 Collateralized mortgage obligations: Unrealized loss for less than twelve months 97 563,872 30,980 72 618,464 11,316 Unrealized loss for twelve months or longer 48 244,917 37,647 10 62,647 1,148 145 808,789 68,627 82 681,111 12,464 States and political subdivisions: Unrealized loss for less than twelve months 34 20,555 964 14 5,576 200 Unrealized loss for twelve months or longer 29 7,892 2,639 — — — 63 28,447 3,603 14 5,576 200 Total available for sale: Unrealized loss for less than twelve months 252 930,361 44,415 147 1,262,834 20,376 Unrealized loss for twelve months or longer 119 596,199 85,836 42 311,828 11,261 371 $ 1,526,560 $ 130,251 189 $ 1,574,662 $ 31,637 |
Schedule of information regarding held to maturity securities that were in an unrealized loss position | |
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, 2022 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 $ 34,856 $ 34,636 $ 853 $ 849 Due after one year through five years 80,274 79,428 1,121 1,084 Due after five years through ten years 63,313 62,849 23,764 22,429 Due after ten years 84,206 81,102 52,564 46,748 262,649 258,015 78,302 71,110 Residential mortgage-backed securities 455,121 406,358 301,583 271,856 Commercial mortgage-backed securities 183,266 175,499 180,942 166,007 Collateralized mortgage obligations 887,521 818,894 314,705 276,362 $ 1,788,557 $ 1,658,766 $ 875,532 $ 785,335 |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, December 31, 2022 2021 Commercial real estate $ 3,245,873 $ 3,042,729 Commercial and industrial (1) 1,639,980 1,875,420 Construction and land development 980,896 892,783 1-4 family residential 1,767,099 1,303,430 Consumer 27,602 32,349 Broker-dealer (2) 431,223 733,193 8,092,673 7,879,904 Allowance for credit losses (95,442) (91,352) Total loans held for investment, net of allowance $ 7,997,231 $ 7,788,552 (1) Included loans totaling $77.7 million at December 31, 2021 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 December 31, 2022 December 31, 2021 Interest Income Recognized With With No With With No Year Ended December 31, Allowance Allowance Total Allowance Allowance Total 2022 2021 2020 Commercial real estate: Non-owner occupied $ 688 $ 562 $ 1,250 $ 413 $ 1,853 $ 2,266 $ 483 $ 378 $ 1,364 Owner occupied 2,862 157 3,019 3,058 1,277 4,335 556 648 295 Commercial and industrial 3,727 5,368 9,095 16,536 5,942 22,478 1,099 2,585 2,362 Construction and land development 1 — 1 2 — 2 29 202 110 1-4 family residential 433 10,862 11,295 902 17,306 18,208 3,420 3,721 1,568 Consumer 14 — 14 23 — 23 — (120) 122 Broker-dealer — — — — — — — — — $ 7,725 $ 16,949 $ 24,674 $ 20,934 $ 26,378 $ 47,312 $ 5,587 $ 7,414 $ 5,821 |
Schedule of information regarding TDRs granted | Information regarding TDRs granted during 2022, 2021, and 2020 that did not qualify for the CARES Act exemption is shown in the following table (dollars in thousands). Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 Number of Balance at Balance at Number of Balance at Balance at Number of Balance at Balance at Loans Extension End of Year Loans Extension End of Year Loans Extension End of Year Commercial real estate: Non-owner occupied — $ — $ — — $ — $ — — $ — $ — Owner occupied 2 2,743 2,072 1 725 713 — — — Commercial and industrial 1 873 734 — — — 3 9,464 4,116 Construction and land development — — — — — — — — — 1-4 family residential — — — — — — 5 438 438 Consumer — — — — — — — — — Broker-dealer — — — — — — — — — 3 $ 3,616 $ 2,806 1 $ 725 $ 713 8 $ 9,902 $ 4,554 |
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 Total Past Current Total Past Due December 31, 2022 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 567 $ — $ 235 $ 802 $ 1,869,750 $ 1,870,552 $ — Owner occupied 1,037 2,880 — 3,917 1,371,404 1,375,321 — Commercial and industrial 609 82 5,598 6,289 1,633,691 1,639,980 49 Construction and land development 3,665 — — 3,665 977,231 980,896 — 1-4 family residential 9,733 773 4,467 14,973 1,752,126 1,767,099 1 Consumer 177 7 14 198 27,404 27,602 1 Broker-dealer — — — — 431,223 431,223 — $ 15,788 $ 3,742 $ 10,314 $ 29,844 $ 8,062,829 $ 8,092,673 $ 51 Accruing Loans Loans Past Due Total Past Current Total Past Due December 31, 2021 30-59 Days 60-89 Days 90 Days or More Due Loans Loans Loans 90 Days or More Commercial real estate: Non-owner occupied $ 117 $ — $ 1,173 $ 1,290 $ 1,728,409 $ 1,729,699 $ — Owner occupied 590 688 2,273 3,551 1,309,479 1,313,030 — Commercial and industrial 1,059 277 13,640 14,976 1,860,444 1,875,420 1 Construction and land development 946 — — 946 891,837 892,783 — 1-4 family residential 7,642 2,738 4,842 15,222 1,288,208 1,303,430 100 Consumer 123 22 22 167 32,182 32,349 — Broker-dealer — — — — 733,193 733,193 — $ 10,477 $ 3,725 $ 21,950 $ 36,152 $ 7,843,752 $ 7,879,904 $ 101 |
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 2017 and December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Commercial real estate: non-owner occupied Internal Grade 1-3 (Pass low risk) $ 49,168 $ 71,349 $ 20,340 $ 7,967 $ 3,882 $ 7,834 $ 1 $ 160,541 Internal Grade 4-7 (Pass normal risk) 355,211 338,276 131,470 82,524 44,138 47,723 53,886 1,053,228 Internal Grade 8-11 (Pass high risk and watch) 98,068 131,054 129,128 61,080 48,085 76,735 12,604 556,754 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 73,578 14,794 1,627 8,042 — 738 — 98,779 Internal Grade 14 (Substandard non-accrual) — 395 — — — 855 — 1,250 Commercial real estate: owner occupied Internal Grade 1-3 (Pass low risk) $ 20,666 $ 101,673 $ 60,303 $ 20,453 $ 13,033 $ 62,397 $ 4,742 $ 283,267 Internal Grade 4-7 (Pass normal risk) 188,833 193,614 81,937 80,572 85,674 48,216 15,189 694,035 Internal Grade 8-11 (Pass high risk and watch) 83,827 67,387 91,528 29,250 58,676 25,881 6,762 363,311 Internal Grade 12 (Special mention) — 94 454 — — — — 548 Internal Grade 13 (Substandard accrual) 2,240 2,794 5,994 2,826 2,762 14,525 — 31,141 Internal Grade 14 (Substandard non-accrual) 174 680 — — — 2,165 — 3,019 Commercial and industrial Internal Grade 1-3 (Pass low risk) $ 31,517 $ 28,724 $ 23,292 $ 5,626 $ 1,289 $ 2,086 $ 51,720 $ 144,254 Internal Grade 4-7 (Pass normal risk) 148,449 146,330 48,756 25,523 8,666 10,846 349,161 737,731 Internal Grade 8-11 (Pass high risk and watch) 146,941 50,878 30,107 15,734 2,114 9,557 242,413 497,744 Internal Grade 12 (Special mention) — — — 3,254 — — 202 3,456 Internal Grade 13 (Substandard accrual) 2,160 4,041 6,393 4,143 3,500 2,993 14,421 37,651 Internal Grade 14 (Substandard non-accrual) 240 196 6,162 — 2,200 297 — 9,095 Construction and land development Internal Grade 1-3 (Pass low risk) $ 23,803 $ 7,419 $ 424 $ 870 $ 443 $ 2,609 $ 1 $ 35,569 Internal Grade 4-7 (Pass normal risk) 364,342 171,250 33,189 2,602 3,686 1,897 39,653 616,619 Internal Grade 8-11 (Pass high risk and watch) 203,560 51,400 17,397 2,454 — 1,349 19,694 295,854 Internal Grade 12 (Special mention) — — — — — — — — Internal Grade 13 (Substandard accrual) 5,249 — — — — — — 5,249 Internal Grade 14 (Substandard non-accrual) — — — — — 1 — 1 Construction and land development - individuals FICO less than 620 $ — $ — $ — $ — $ — $ — $ — $ — FICO between 620 and 720 1,214 — — — 969 — — 2,183 FICO greater than 720 18,820 824 54 — — — — 19,698 Substandard non-accrual — — — — — — — — Other (1) 5,723 — — — — — — 5,723 1-4 family residential FICO less than 620 $ 1,202 $ 723 $ 774 $ 508 $ 3,514 $ 21,302 $ 259 $ 28,282 FICO between 620 and 720 9,267 12,893 8,424 5,003 5,957 25,616 3,958 71,118 FICO greater than 720 518,003 785,766 106,067 45,511 28,060 45,644 3,320 1,532,371 Substandard non-accrual — — — — 254 11,041 — 11,295 Other (1) 95,054 18,371 1,602 2,363 571 4,003 2,069 124,033 Consumer FICO less than 620 $ 1,317 $ 222 $ 107 $ 29 $ 1 $ 12 $ 363 $ 2,051 FICO between 620 and 720 4,017 922 514 374 31 371 1,922 8,151 FICO greater than 720 5,033 1,441 1,133 351 69 — 2,770 10,797 Substandard non-accrual — — — — — 14 — 14 Other (1) 5,215 690 383 83 2 18 198 6,589 Total loans with credit quality measures $ 2,462,891 $ 2,204,200 $ 807,559 $ 407,142 $ 317,576 $ 426,725 $ 825,308 $ 7,451,401 Commercial and industrial (mortgage warehouse lending) $ 200,868 Commercial and industrial (loans accounted for at fair value) $ 9,181 Broker-Dealer (margin loans and correspondent receivables) $ 431,223 Total loans held for investment $ 8,092,673 (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, 2022 | |
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, 2022 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 59,354 $ — $ 3,773 $ — $ 128 $ 63,255 Commercial and industrial 21,982 — (1,748) (6,945) 2,746 16,035 Construction and land development 4,674 — 1,377 — — 6,051 1-4 family residential 4,589 — 4,729 (138) 133 9,313 Consumer 578 — 119 (432) 289 554 Broker-dealer 175 — 59 — — 234 Total $ 91,352 $ — $ 8,309 $ (7,515) $ 3,296 $ 95,442 Balance, Transition Provision for Recoveries on Beginning of Adjustment (Reversal of) Loans Charged Off Balance, Year Ended December 31, 2021 Year CECL Credit Losses Charged Off Loans End of Year Commercial real estate $ 109,629 $ — $ (50,231) $ (310) $ 266 $ 59,354 Commercial and industrial 27,703 — (6,128) (2,249) 2,656 21,982 Construction and land development 6,677 — (2,003) — — 4,674 1-4 family residential 3,946 — 409 (312) 546 4,589 Consumer 876 — (222) (357) 281 578 Broker-dealer 213 — (38) — — 175 Total $ 149,044 $ — $ (58,213) $ (3,228) $ 3,749 $ 91,352 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 |
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, 2022 2021 2020 Balance, beginning of year $ 5,880 $ 8,388 $ 2,075 Transition adjustment CECL accounting standard — — 3,837 Other noninterest expense 1,904 (2,508) 2,476 Balance, end of year $ 7,784 $ 5,880 $ 8,388 |
Cash and Due from Banks (Tables
Cash and Due from Banks (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 Cash on hand $ 39,588 $ 39,981 Clearings and collection items 162,817 52,405 Deposits at Federal Reserve Bank 1,334,482 2,692,088 Deposits at Federal Home Loan Bank 1,520 1,509 Deposits in FDIC-insured institutions 41,105 37,155 $ 1,579,512 $ 2,823,138 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 Land and premises $ 125,039 $ 122,376 Furniture and equipment 278,265 275,171 403,304 397,547 Less accumulated depreciation and amortization (218,354) (193,109) $ 184,950 $ 204,438 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (46,801) $ 2,129 Trademarks and trade names 20 16,500 (9,063) 7,437 Customer contracts and relationships 12 - 14 15,300 (13,549) 1,751 $ 80,730 $ (69,413) $ 11,317 Estimated Gross Net Useful Life Intangible Accumulated Intangible December 31, 2021 (Years) Assets Amortization Assets Core deposits 4 - 12 $ 48,930 $ (44,370) $ 4,560 Trademarks and trade names 20 16,500 (8,312) 8,188 Noncompete agreements 4 4,310 (4,310) — Customer contracts and relationships 12 - 14 15,300 (12,764) 2,536 $ 85,040 $ (69,756) $ 15,284 |
Schedule of estimated aggregate future amortization expense for intangible assets | The estimated aggregate future amortization expense for intangible assets at December 31, 2022 is as follows (in thousands). 2023 $ 2,860 2024 1,826 2025 1,028 2026 959 2027 889 Thereafter 3,755 $ 11,317 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Balance, beginning of year $ 86,990 $ 143,742 $ 55,504 Additions 56,974 78,433 162,914 Sales (65,108) (142,558) (36,750) Changes in fair value: Due to changes in model inputs or assumptions (1) 31,292 30,525 (27,261) Due to customer payoffs (9,323) (23,152) (10,665) Balance, end of year $ 100,825 $ 86,990 $ 143,742 December 31, 2022 2021 Mortgage loans serviced for others (2) $ 5,144,558 $ 6,355,927 MSR asset as a percentage of serviced mortgage loans 1.96 % 1.37 % (1) Primarily represents normal customer payments, the impact of changes in interest rates, changes in discount rates and prepayment speed assumptions, and the refinement of other MSR model assumptions. Included in 2022 and 2021 are MSR asset fair value adjustments totaling losses of $0.9 million and gains of $22.8 million, respectively, reflecting the difference between the MSR asset carrying values and the sale prices reflected in the letters of intent to sell the applicable MSR assets. (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, 2022 2021 Weighted average constant prepayment rate 8.14 % 10.02 % Weighted average discount rate 12.10 % 14.32 % Weighted average life (in years) 8.4 7.1 |
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, 2022 2021 Constant prepayment rate: Impact of 10% adverse change $ (3,288) $ (2,603) Impact of 20% adverse change (6,375) (5,315) Discount rate: Impact of 10% adverse change (4,797) (4,070) Impact of 20% adverse change (9,147) (7,753) |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deposits | |
Summary of deposits | Deposits are summarized as follows (in thousands). December 31, 2022 2021 Noninterest-bearing demand $ 3,968,862 $ 4,577,183 Interest-bearing: Demand accounts 4,110,418 3,270,522 Brokered - demand 5,336 114,393 Money market 2,045,554 3,433,341 Brokered - money market 9,031 98,614 Savings 312,140 345,795 Time 864,408 962,752 Brokered - time — 15,477 $ 11,315,749 $ 12,818,077 |
Summary of scheduled maturities of interest-bearing time deposits | Scheduled maturities of all time deposits at December 31, 2022 are as follows (in thousands). 2023 $ 530,633 2024 293,274 2025 22,597 2026 10,198 2027 and thereafter 7,706 $ 864,408 |
Short-term Borrowings (Tables)
Short-term Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Short-term borrowings | |
Schedule of short-term borrowings | Short-term borrowings are summarized as follows (in thousands). December 31, 2022 2021 Federal funds purchased $ 397,108 $ 171,925 Securities sold under agreements to repurchase 297,856 191,547 Short-term bank loans 57,500 142,000 Commercial paper 217,592 353,972 $ 970,056 $ 859,444 |
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, 2022 2021 2020 Average balance during the year $ 573,183 $ 363,964 $ 509,577 Average interest rate during the year 2.19 % 0.34 % 0.89 % Maximum month-end balance during the year $ 741,499 $ 427,553 $ 714,507 December 31, 2022 2021 Average interest rate at end of year 4.37 % 0.31 % Securities underlying the agreements at end of year: Carrying value $ 296,075 $ 191,483 Estimated fair value $ 318,409 $ 205,734 |
Federal Home Loan Bank | |
Short-term borrowings | |
Schedule of short-term borrowings | Other information regarding FHLB short-term borrowings is shown in the following table (dollars in thousands). Year Ended December 31, 2022 2021 2020 Average balance during the year $ — $ — $ 38,634 Average interest rate during the year — % — % 1.63 % Maximum month-end balance during the year $ — $ — $ 150,000 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable | |
Schedule of notes payable | Notes payable consisted of the following (in thousands). December 31, 2022 2021 Senior Notes due April 2025, net of discount of $699 and $886, respectively $ 149,301 $ 149,114 Subordinated Notes due May 2030, net of discount of $610 and $704, respectively 49,390 49,296 Subordinated Notes due May 2035, net of discount of $2,037 and $2,220, respectively 147,963 147,780 Ventures Management lines of credit — 41,714 $ 346,654 $ 387,904 |
Scheduled maturities of notes payable | Scheduled maturities for notes payable outstanding at December 31, 2022 are as follows (in thousands). 2023 $ — 2024 — 2025 150,000 2026 — 2027 — Thereafter 200,000 $ 350,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to finance leases is as follows (in thousands). December 31, 2022 2021 Finance leases: Premises and equipment $ 7,780 $ 7,780 Accumulated depreciation (5,948) (5,358) Premises and equipment, net $ 1,832 $ 2,422 |
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, 2022 2021 2020 Operating lease cost $ 36,950 $ 38,862 $ 41,903 Less operating lease and sublease income (2,380) (1,719) (1,676) Net operating lease cost $ 34,570 $ 37,143 $ 40,227 Finance lease cost: Amortization of ROU assets $ 590 $ 590 $ 590 Interest on lease liabilities 478 522 561 Total finance lease cost $ 1,068 $ 1,112 $ 1,151 |
Schedule of supplemental cash flow information | Supplemental cash flow information related to leases is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 29,216 $ 37,239 $ 31,850 Operating cash flows from finance leases 482 522 561 Financing cash flows from finance leases 759 689 636 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 24,078 $ 41,615 $ 11,723 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, 2022 December 31, 2021 Weighted Average Weighted Average Remaining Lease Weighted Average Remaining Lease Weighted Average Lease Classification Term (Years) Discount Rate Term (Years) Discount Rate Operating 5.7 3.89 % 5.9 3.89 % Finance 4.0 4.89 % 4.8 4.84 % |
Schedule of future minimum lease payments under operating leases | Future minimum lease payments, under lease agreements as of December 31, 2022, are presented below (in thousands). Operating Leases Finance Leases 2023 $ 35,123 $ 1,280 2024 27,137 1,163 2025 20,535 886 2026 16,298 813 2027 13,148 448 Thereafter 28,765 149 Total minimum lease payments 141,006 4,739 Less amount representing interest (14,247) (1,333) Lease liabilities $ 126,759 $ 3,406 |
Schedule of future minimum lease payments under finance leases | Future minimum lease payments, under lease agreements as of December 31, 2022, are presented below (in thousands). Operating Leases Finance Leases 2023 $ 35,123 $ 1,280 2024 27,137 1,163 2025 20,535 886 2026 16,298 813 2027 13,148 448 Thereafter 28,765 149 Total minimum lease payments 141,006 4,739 Less amount representing interest (14,247) (1,333) Lease liabilities $ 126,759 $ 3,406 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Current: Federal $ 24,951 $ 103,396 $ 97,338 State 3,698 21,657 19,150 28,649 125,053 116,488 Deferred: Federal $ 7,377 $ (4,454) $ 13,325 State 807 (2,623) 3,258 8,184 (7,077) 16,583 $ 36,833 $ 117,976 $ 133,071 |
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, 2022 2021 2020 Computed tax at federal statutory rate $ 32,787 $ 105,855 $ 118,629 Tax effect of: Nondeductible expenses 1,290 1,195 1,193 Compensation limitation 4,106 2,862 1,111 State income taxes 3,559 15,037 17,702 Tax-exempt income, net (1,620) (2,347) (1,706) Minority interest (1,294) (2,436) (4,587) Other (1,995) (2,190) 729 $ 36,833 $ 117,976 $ 133,071 |
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, 2022 2021 Deferred tax assets: Net operating and built-in loss carryforward $ 1,379 $ 3,599 Purchase accounting adjustment - loans 6,393 8,299 Allowance for credit losses 23,610 21,784 Compensation and benefits 19,055 26,443 Legal and other reserves 6,515 9,146 Foreclosed property 338 1,182 Net unrealized losses on securities and other investments 40,116 — Operating lease liabilities 29,993 32,830 Other 4,973 6,168 132,372 109,451 Deferred tax liabilities: Premises and equipment 17,860 20,066 Intangible assets 2,360 3,325 Derivatives 393 6,034 Loan servicing 24,098 21,279 Operating lease ROU assets 24,347 28,469 Other 5,263 123 74,321 79,296 Net deferred tax asset $ 58,051 $ 30,155 |
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, 2022 2021 2020 Balance, beginning of year $ 4,869 $ 3,778 $ 2,808 Increases related to tax positions taken during a prior year — 603 327 Decreases related to tax positions taken during a prior year (767) — — Increases related to tax positions taken during the current year 2,077 1,249 1,017 Decreases related to expiration of the statute of limitations (906) (761) (374) Balance, end of year $ 5,273 $ 4,869 $ 3,778 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Balance, beginning of year $ 31,407 $ 30,085 $ 32,144 Claims made 56,579 26,290 17,429 Claims resolved with no payment (14,499) (11,690) (7,778) Repurchases (42,243) (11,934) (11,588) Indemnification payments — (1,344) (122) Balance, end of year $ 31,244 $ 31,407 $ 30,085 Indemnification Liability Reserve Activity Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 27,424 $ 21,531 $ 11,776 Additions for new sales 2,532 10,966 9,991 Repurchases (7,941) (3,559) (768) Early payment defaults (423) (189) (624) Indemnification payments — (366) (39) Change in reserves for loans sold in prior years (1,064) (959) 1,195 Balance, end of year $ 20,528 $ 27,424 $ 21,531 December 31, 2022 2021 Reserve for Indemnification Liability: Specific claims $ 627 $ 345 Incurred but not reported claims 19,901 27,079 Total $ 20,528 $ 27,424 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Schedule of nonvested RSU activity | The following table summarizes information about nonvested RSU activity for the periods presented (shares in thousands). RSUs Weighted Average Grant Date Outstanding Fair Value 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 Granted 532 $ 32.93 Vested/Released (475) $ 27.63 Forfeited (21) $ 23.29 Balance, December 31, 2021 1,869 $ 23.16 Granted 551 $ 33.22 Vested/Released (732) $ 20.00 Forfeited (140) $ 24.75 Balance, December 31, 2022 1,548 $ 28.09 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 table shows 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 Conservation To Be Well December 31, 2022 December 31, 2021 Buffer Capitalized Amount Ratio Amount Ratio Ratio Ratio Tier 1 capital (to average assets): PlainsCapital $ 1,405,164 10.26 % $ 1,469,695 10.20 % 4.0 % 5.0 % Hilltop 1,900,701 11.47 % 2,262,356 12.58 % 4.0 % N/A Common equity Tier 1 capital PlainsCapital 1,405,164 14.98 % 1,469,695 16.00 % 7.0 % 6.5 % Hilltop 1,900,701 18.23 % 2,262,356 21.22 % 7.0 % N/A Tier 1 capital (to risk-weighted assets): PlainsCapital 1,405,164 14.98 % 1,469,695 16.00 % 8.5 % 8.0 % Hilltop 1,900,701 18.23 % 2,262,356 21.22 % 8.5 % N/A Total capital (to risk-weighted assets): PlainsCapital 1,492,576 15.91 % 1,540,100 16.77 % 10.5 % 10.0 % Hilltop 2,187,652 20.98 % 2,532,008 23.75 % 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, 2022 December 31, 2021 PlainsCapital Hilltop PlainsCapital Hilltop Total equity capital $ 1,533,492 $ 2,036,924 $ 1,721,780 $ 2,522,668 Add: Net unrealized holding losses (gains) on securities available for sale and held in trust 133,531 133,531 10,219 10,219 CECL transition adjustment 5,898 6,594 7,864 8,792 Deduct: Goodwill and other disallowed intangible assets (267,757) (276,348) (270,168) (279,323) Common equity Tier 1 capital (as defined) 1,405,164 1,900,701 1,469,695 2,262,356 Add: Tier 1 capital — — — — Deduct: Additional Tier 1 capital deductions — — — — Tier 1 capital (as defined) 1,405,164 1,900,701 1,469,695 2,262,356 Add: Allowable Tier 2 capital Allowance for credit losses, including unfunded commitments 102,991 103,226 91,177 91,352 Capital instruments — 200,000 — 200,000 Deduct: Additional Tier 2 capital deductions (15,579) (16,275) (20,772) (21,700) Total capital (as defined) $ 1,492,576 $ 2,187,652 $ 1,540,100 $ 2,532,008 |
Schedule of net capital position | At December 31, 2022, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). Momentum Hilltop Independent Securities Network Net capital $ 261,665 $ 3,672 Less: required net capital 8,205 250 Excess net capital $ 253,460 $ 3,422 Net capital as a percentage of aggregate debit items 63.8 % Net capital in excess of 5% aggregate debit items $ 241,151 |
Other Noninterest Income and _2
Other Noninterest Income and Expense (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Other noninterest income: Net gains from Hilltop Broker-Dealer structured product and derivative activities $ 37,407 $ 48,816 $ 81,111 Net gain from trading securities portfolio 23,666 26,353 121,983 Service charges on depositor accounts 16,962 18,081 14,845 Trust fees 13,975 10,998 9,804 Other 21,947 23,786 15,862 $ 113,957 $ 128,034 $ 243,605 Other noninterest expense: Software and information technology $ 64,979 $ 68,105 $ 56,872 Brokerage commissions and fees 27,597 25,826 24,113 Mortgage origination and servicing 25,311 35,421 27,808 Unreimbursed loan closing costs 13,371 20,458 21,696 Business development 12,550 11,998 10,190 Travel, meals and entertainment 9,959 7,646 4,804 Amortization of intangible assets 3,967 5,081 6,301 Funding fees 4,421 4,768 4,461 Office supplies 3,319 3,469 3,953 Other 42,227 42,519 64,560 $ 207,701 $ 225,291 $ 224,758 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Increase (decrease) in fair value of derivatives during year: PrimeLending $ (21,282) $ (22,170) $ 33,714 Hilltop Broker-Dealers 16,405 (19,884) 3,969 Bank 46 43 (7) |
Schedule of derivative positions | Derivative positions are presented in the following table (in thousands). December 31, 2022 December 31, 2021 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Derivative instruments (not designated as hedges): IRLCs $ 506,278 $ 1,767 $ 1,283,152 $ 25,489 Commitments to purchase MBSs 819,681 2,435 1,575,264 (674) Commitments to sell MBSs 2,188,964 10,711 3,314,173 (355) Interest rate swaps 35,784 (1,421) 68,413 (1,949) U.S. Treasury bond futures and options (1) 395,500 (449) 247,800 — Eurodollar and other futures (1) 2,612,000 — 2,061,800 — Credit default swaps 3,000 (2) 7,000 (15) Derivative instruments (designated as hedges): Interest rate swaps designated as cash flow hedges $ 430,000 $ 21,703 $ 190,000 $ 603 Interest rate swaps designated as fair value hedges (2) 365,323 42,828 221,232 3,207 (1) Noted derivative instruments include contracts between the Hilltop Broker-Dealers and counterparties with changes in fair value of the contracts that are settled daily. (2) The Company designated $365.3 million and $221.2 million as the hedged amount (from a closed portfolio of prepayable available for sale securities and loans held for investment with a carrying value of $322.5 million and $218.0 million as of December 31, 2022 and 2021, respectively), of which, a subset of these hedges are in portfolio layer hedging relationships. The cumulative basis adjustment included in the carrying value of the hedged items totaled $42.8 million and $3.2 million as of December 31, 2022 and 2021, respectively. |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 Securities borrowed: Institutional counterparties $ 1,012,573 $ — $ 1,012,573 $ (964,517) $ — $ 48,056 Interest rate swaps: Institutional counterparties 64,729 — 64,729 — (64,630) 99 Reverse repurchase agreements: Institutional counterparties 118,070 — 118,070 (115,302) — 2,768 Forward MBS derivatives: Institutional counterparties 16,694 (3,410) 13,284 (9,957) — 3,327 Treasury futures and options derivatives: Institutional counterparties 57 (506) (449) — — (449) $ 1,212,123 $ (3,916) $ 1,208,207 $ (1,089,776) $ (64,630) $ 53,801 December 31, 2021 Securities borrowed: Institutional counterparties $ 1,518,372 $ — $ 1,518,372 $ (1,445,590) $ — $ 72,782 Reverse repurchase agreements: Institutional counterparties 118,262 — 118,262 (118,262) — — Forward MBS derivatives: Institutional counterparties 2,955 (1,773) 1,182 (744) — 438 $ 1,639,589 $ (1,773) $ 1,637,816 $ (1,564,596) $ — $ 73,220 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, 2022 Securities loaned: Institutional counterparties $ 916,570 $ — $ 916,570 $ (871,037) $ — $ 45,533 Interest rate swaps: Institutional counterparties 1,619 — 1,619 (1,438) — 181 Credit default swaps: Institutional counterparties 2 — 2 (2) — — Repurchase agreements: Institutional counterparties 296,978 — 296,978 (319,897) — (22,919) Forward MBS derivatives: Institutional counterparties 138 — 138 (138) — — $ 1,215,307 $ — $ 1,215,307 $ (1,192,512) $ — $ 22,795 December 31, 2021 Securities loaned: Institutional counterparties $ 1,432,196 $ — $ 1,432,196 $ (1,359,850) $ — $ 72,346 Interest rate swaps: Institutional counterparties 1,949 — 1,949 (1,919) — 30 Credit default swaps: Institutional counterparties 15 — 15 (15) — — Repurchase agreements: Institutional counterparties 191,483 — 191,483 (205,734) — (14,251) Forward MBS derivatives: Institutional counterparties 2,211 — 2,211 (2,211) — — $ 1,627,854 $ — $ 1,627,854 $ (1,569,729) $ — $ 58,125 |
Schedule of the liabilities subject to an enforceable master netting arrangement or repurchase agreements | |
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, 2022 and 2021. Remaining Contractual Maturities Overnight and Greater Than December 31, 2022 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities 130,616 2,539 141,461 22,362 296,978 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 916,457 — — — 916,457 Total $ 1,047,186 $ 2,539 $ 141,461 $ 22,362 $ 1,213,548 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,213,548 Amount related to agreements not included in offsetting disclosure above $ — Remaining Contractual Maturities Overnight and Greater Than December 31, 2021 Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase agreement transactions: Asset-backed securities $ 93,651 $ — $ 86,357 $ 11,475 $ 191,483 Securities lending transactions: Corporate securities 113 — — — 113 Equity securities 1,432,083 — — — 1,432,083 Total $ 1,525,847 $ — $ 86,357 $ 11,475 $ 1,623,679 Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above $ 1,623,679 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, 2022 | |
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, 2022 2021 Receivables: Securities borrowed $ 1,012,573 $ 1,518,372 Securities failed to deliver 11,350 5,664 Trades in process of settlement 3,476 144,773 Other 10,656 4,137 $ 1,038,055 $ 1,672,946 Payables: Securities loaned $ 916,570 $ 1,432,196 Correspondents 22,760 20,571 Securities failed to receive 20,167 18,808 Other 6,973 5,725 $ 966,470 $ 1,477,300 |
Segment and Related Informati_2
Segment and Related Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 413,603 $ 51,597 $ (10,529) $ (13,135) $ 17,439 $ 458,975 Provision for (reversal of) credit losses 8,250 59 — — — 8,309 Noninterest income 49,307 341,943 452,915 7,525 (19,230) 832,460 Noninterest expense 235,190 355,713 478,904 59,030 (1,838) 1,126,999 Income (loss) from continuing operations before taxes $ 219,470 $ 37,768 $ (36,518) $ (64,640) $ 47 $ 156,127 Mortgage All Other and Continuing Year Ended December 31, 2021 Banking Broker-Dealer Origination Corporate Eliminations Operations Net interest income (expense) $ 406,524 $ 43,296 $ (20,400) $ (17,239) $ 10,801 $ 422,982 Provision for (reversal of) credit losses (58,175) (38) — — — (58,213) Noninterest income 45,113 381,125 986,990 9,133 (12,086) 1,410,275 Noninterest expense 226,915 380,798 731,056 50,507 (1,878) 1,387,398 Income (loss) from continuing operations before taxes $ 282,897 $ 43,661 $ 235,534 $ (58,613) $ 593 $ 504,072 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 (reversal of) 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 Hilltop Banking Broker-Dealer Origination Corporate Eliminations Consolidated December 31, 2022 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 13,420,110 $ 2,672,709 $ 1,249,284 $ 2,465,513 $ (3,548,334) $ 16,259,282 December 31, 2021 Goodwill $ 247,368 $ 7,008 $ 13,071 $ — $ — $ 267,447 Total assets $ 14,944,249 $ 3,673,346 $ 2,207,822 $ 2,940,670 $ (5,077,007) $ 18,689,080 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Basic earnings per share: Income from continuing operations $ 113,134 $ 374,495 $ 409,440 Income from discontinued operations — — 38,396 Income attributable to Hilltop $ 113,134 $ 374,495 $ 447,836 Weighted average shares outstanding - basic 70,434 80,708 89,280 Basic earnings per common share: Income from continuing operations $ 1.61 $ 4.64 $ 4.59 Income from discontinued operations — — 0.43 $ 1.61 $ 4.64 $ 5.02 Diluted earnings per share: Income from continuing operations $ 113,134 $ 374,495 $ 409,440 Income from discontinued operations — — 38,396 Income attributable to Hilltop $ 113,134 $ 374,495 $ 447,836 Weighted average shares outstanding - basic 70,434 80,708 89,280 Effect of potentially dilutive securities 192 465 24 Weighted average shares outstanding - diluted 70,626 81,173 89,304 Diluted earnings per common share: Income from continuing operations $ 1.60 $ 4.61 $ 4.58 Income from discontinued operations — — 0.43 $ 1.60 $ 4.61 $ 5.01 |
Financial Statements of Parent
Financial Statements of Parent (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Dividends from bank subsidiaries $ 205,000 $ 295,000 $ 249,771 Dividends from nonbank subsidiaries 10,732 81,675 56,150 Investment income 6,914 4,322 4,102 Interest expense 20,049 21,561 18,294 Other income 7,525 9,070 45,887 General and administrative expense 59,030 50,507 58,130 Income before income taxes and equity in undistributed earnings of subsidiaries activity 151,092 317,999 279,486 Income tax benefit (13,124) (14,065) (13,897) Equity in undistributed earnings of subsidiaries (44,922) 54,032 176,294 Net income $ 119,294 $ 386,096 $ 469,677 Other comprehensive income (loss), net (123,312) (27,982) 6,344 Comprehensive income (loss) $ (4,018) $ 358,114 $ 476,021 |
Schedule of Condensed Combined Balance Sheets | Condensed Combined Balance Sheets December 31, 2022 2021 2020 Assets: Cash and cash equivalents $ 205,887 $ 531,260 $ 478,826 Loans held for investment, net of unearned income 9,181 — — Investment in subsidiaries: Bank subsidiaries 1,533,491 1,721,780 1,654,249 Nonbank subsidiaries 427,516 409,835 453,847 Other assets 289,438 277,795 236,452 Total assets $ 2,465,513 $ 2,940,670 $ 2,823,374 Liabilities and Stockholders’ Equity: Accounts payable and accrued expenses $ 34,569 $ 25,762 $ 64,635 Notes payable 370,823 369,618 412,764 Stockholders’ equity 2,060,121 2,545,290 2,345,975 Total liabilities and stockholders’ equity $ 2,465,513 $ 2,940,670 $ 2,823,374 |
Schedule of Condensed Combined Statements of Cash Flows | Condensed Combined Statements of Cash Flows |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 179,974 $ 156,472 $ 135,133 $ 119,537 $ 591,116 Interest expense 56,532 32,986 23,077 19,546 132,141 Net interest income 123,442 123,486 112,056 99,991 458,975 Provision for (reversal of) credit losses 3,638 (780) 5,336 115 8,309 Noninterest income 169,784 206,975 239,273 216,428 832,460 Noninterest expense 253,368 288,738 298,543 286,350 1,126,999 Income before income taxes 36,220 42,503 47,450 29,954 156,127 Income tax expense 9,642 9,249 12,127 5,815 36,833 Net income 26,578 33,254 35,323 24,139 119,294 Less: Net income attributable to noncontrolling interest 1,022 1,186 2,063 1,889 6,160 Income attributable to Hilltop $ 25,556 $ 32,068 $ 33,260 $ 22,250 $ 113,134 Earnings per common share: Basic: $ 0.40 $ 0.50 $ 0.45 $ 0.28 $ 1.61 Diluted: $ 0.39 $ 0.50 $ 0.45 $ 0.28 $ 1.60 Cash dividends declared per common share $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.60 Year Ended December 31, 2021 Fourth Third Second First Full Quarter Quarter Quarter Quarter Year Interest income $ 123,054 $ 125,178 $ 134,818 $ 146,923 $ 529,973 Interest expense 18,760 20,088 26,902 41,241 106,991 Net interest income 104,294 105,090 107,916 105,682 422,982 Provision for (reversal of) credit losses (18,565) (5,819) (28,720) (5,109) (58,213) Noninterest income 284,846 367,945 339,899 417,585 1,410,275 Noninterest expense 322,194 355,174 343,368 366,662 1,387,398 Income before income taxes 85,511 123,680 133,167 161,714 504,072 Income tax expense 20,715 28,257 31,234 37,770 117,976 Net income 64,796 95,423 101,933 123,944 386,096 Less: Net income attributable to noncontrolling interest 2,612 2,517 2,873 3,599 11,601 Income attributable to Hilltop $ 62,184 $ 92,906 $ 99,060 $ 120,345 $ 374,495 Earnings per common share: Basic: $ 0.79 $ 1.16 $ 1.21 $ 1.46 $ 4.64 Diluted: $ 0.78 $ 1.15 $ 1.21 $ 1.46 $ 4.61 Cash dividends declared per common share $ 0.12 $ 0.12 $ 0.12 $ 0.12 $ 0.48 |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies - Nature of Operations and Basis of Presentation (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
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 | ||||
Redemption of junior subordinated debentures | $ 863,284 | $ 1,037,652 | $ 1,325,711 | ||
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 | $ 154,100 | ||||
PCC | |||||
Basis of Presentation | |||||
Ownership percentage | 100% | ||||
Securities Holdings | |||||
Basis of Presentation | |||||
Membership ownership percentage | 100% | ||||
HTH Hillcrest Project LLC | |||||
Basis of Presentation | |||||
Membership ownership percentage | 100% | ||||
Hilltop Investments I, LLC | |||||
Basis of Presentation | |||||
Membership ownership percentage | 100% | ||||
PCC | Plains Capital Bank | |||||
Basis of Presentation | |||||
Ownership percentage | 100% | ||||
PCC | Hilltop Opportunity Partners LLC | |||||
Basis of Presentation | |||||
Membership ownership percentage | 100% | ||||
PCC | PCC Statutory Trusts | |||||
Basis of Presentation | |||||
Ownership percentage | 100% | ||||
Redemption of junior subordinated debentures | $ 67,000 | ||||
Plains Capital Bank | Prime Lending | |||||
Basis of Presentation | |||||
Ownership percentage | 100% | ||||
Prime Lending | Prime Lending Ventures Management LLC | |||||
Basis of Presentation | |||||
Membership ownership percentage | 100% | ||||
Hilltop Investments I, LLC | Hillcrest Land LLC | |||||
Basis of Presentation | |||||
Membership ownership percentage | 50% |
Summary of Significant Accoun_4
Summary of Significant Accounting and Reporting Policies - Loans (Details) - Single Family Residential Loans | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
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 | 45 days |
Summary of Significant Accoun_5
Summary of Significant Accounting and Reporting Policies - Premises and Equipment (Details) - Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | May 31, 2020 USD ($) | Jun. 22, 2015 | Apr. 30, 2015 USD ($) | Apr. 09, 2015 | |
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 | $ 0.5 | $ 0.4 | $ 0.3 | ||||
Senior Notes due April 2025 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 5% | ||||||
Senior Notes due April 2025 | Private Placement | |||||||
Debt Instrument | |||||||
Capitalized debt issuance costs | $ 1.9 | ||||||
Interest rate (as a percent) | 5% | ||||||
Subordinated Debt | |||||||
Debt Instrument | |||||||
Capitalized debt issuance costs | $ 3.2 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - Discontinued Operations, Disposed of by sale - NLC - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2020 | |
Discontinued Operations | ||
Cash proceeds from sale | $ 154,100 | |
Net gains on disposal of discontinued operations | $ 36,811 | |
Transaction cost | $ 5,100 |
Discontinued Operations - Opera
Discontinued Operations - Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Discontinued Operations | |||
Income from discontinued operations before income taxes | $ 0 | $ 0 | $ 2,100 |
Income from discontinued operations, net of income taxes | 38,396 | ||
Discontinued Operations, Disposed of by sale | NLC | |||
Discontinued Operations | |||
Securities: Taxable | 1,752 | ||
Other | 71 | ||
Total interest income | 1,823 | ||
Interest expense - Notes payable | 775 | ||
Net insurance premiums earned | 65,077 | ||
Other | 3,051 | ||
Total noninterest income | 68,128 | ||
Employees' compensation and benefits | 6,002 | ||
Occupancy and equipment, net | 464 | ||
Professional services | 18,201 | ||
Loss and loss adjustment expenses | 38,419 | ||
Other | 3,987 | ||
Total noninterest expense | 67,073 | ||
Income from discontinued operations before income taxes | 2,103 | ||
Gain on disposal of discontinued operations | 36,811 | ||
Income tax expense | 518 | ||
Income from discontinued operations, net of income taxes | $ 38,396 |
Discontinued Operations - Effec
Discontinued Operations - Effects of Reinsurance (Details) - NLC - Discontinued Operations, Disposed of by sale $ in Thousands | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Written | |
Premiums from direct business | $ 63,811 |
Reinsurance assumed | 6,396 |
Reinsurance ceded | (2,759) |
Net premiums | 67,448 |
Earned | |
Premiums from direct business | 61,384 |
Reinsurance assumed | 6,452 |
Reinsurance ceded | (2,759) |
Net premiums | 65,077 |
Effect of reinsurance on incurred losses | |
Losses and LAE incurred | 38,225 |
Reinsurance recoverables | 194 |
Net loss and LAE incurred | $ 38,419 |
Fair Value Measurements - FV Op
Fair Value Measurements - FV Option (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value measurements | ||
Mortgage loans held for sale, fair value | $ 855.7 | $ 1,780 |
Mortgage loans held for sale, unpaid principal balance | $ 850.3 | $ 1,730 |
Maximum | Mortgage Loan Held For Sale | ||
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, 2022 | Dec. 31, 2021 |
Financial assets: | ||
Trading securities | $ 755,032 | $ 647,998 |
Available for sale securities | 1,658,766 | 2,130,568 |
Equity securities | $ 200 | $ 250 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
MSR asset | $ 100,825 | $ 86,990 |
Financial liabilities: | ||
Securities sold, not yet purchased | $ 53,023 | $ 96,586 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Recurring | ||
Financial assets: | ||
Trading securities | $ 755,032 | $ 647,998 |
Available for sale securities | 1,658,766 | 2,130,568 |
Equity securities | 200 | 250 |
Loans held for sale | 855,697 | 1,782,591 |
Loans held for investment | 9,181 | |
Derivative assets | 88,977 | 48,122 |
MSR asset | 100,825 | 86,990 |
Financial liabilities: | ||
Securities sold, not yet purchased | 53,023 | 96,586 |
Derivative liabilities | 11,405 | 21,816 |
Recurring | Level 1 | ||
Financial assets: | ||
Trading securities | 15,456 | 8,628 |
Equity securities | 200 | 250 |
Financial liabilities: | ||
Securities sold, not yet purchased | 25,506 | 45,973 |
Recurring | Level 2 | ||
Financial assets: | ||
Trading securities | 739,576 | 639,370 |
Available for sale securities | 1,658,766 | 2,130,568 |
Loans held for sale | 814,990 | 1,734,875 |
Derivative assets | 88,977 | 48,122 |
Financial liabilities: | ||
Securities sold, not yet purchased | 27,517 | 50,613 |
Derivative liabilities | 11,405 | 21,816 |
Recurring | Level 3 | ||
Financial assets: | ||
Loans held for sale | 40,707 | 47,716 |
Loans held for investment | 9,181 | |
MSR asset | $ 100,825 | $ 86,990 |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward, Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total gains or losses (realized or unrealized): | |||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Sales of Loans, Net | Gain (Loss) on Sales of Loans, Net | Gain (Loss) on Sales of Loans, Net |
Level 3 | |||
Rollforward for financial instruments measured at fair value using Level 3 inputs | |||
Asset balance, Beginning of Year | $ 134,706 | $ 215,558 | $ 122,699 |
Purchases/Additions | 118,643 | 134,913 | 224,324 |
Sales/Reductions | (114,570) | (218,724) | (94,432) |
Transfers to (from) Level 3 | 5,587 | (4,139) | 10,323 |
Total gains or losses (realized or unrealized): | |||
Included in Net Income | 6,347 | 7,098 | (47,356) |
Asset balance, End of Year | 150,713 | 134,706 | 215,558 |
Level 3 | Loans held for sale | |||
Rollforward for financial instruments measured at fair value using Level 3 inputs | |||
Asset balance, Beginning of Year | 47,716 | 71,816 | 67,195 |
Purchases/Additions | 52,058 | 56,480 | 61,410 |
Sales/Reductions | (48,900) | (76,166) | (57,682) |
Transfers to (from) Level 3 | 5,587 | (4,139) | 10,323 |
Total gains or losses (realized or unrealized): | |||
Included in Net Income | (15,754) | (275) | (9,430) |
Asset balance, End of Year | 40,707 | 47,716 | 71,816 |
Level 3 | Loans held for investment | |||
Rollforward for financial instruments measured at fair value using Level 3 inputs | |||
Purchases/Additions | 9,611 | ||
Sales/Reductions | (562) | ||
Total gains or losses (realized or unrealized): | |||
Included in Net Income | 132 | ||
Asset balance, End of Year | 9,181 | ||
Level 3 | MSR asset | |||
Rollforward for financial instruments measured at fair value using Level 3 inputs | |||
Asset balance, Beginning of Year | 86,990 | 143,742 | 55,504 |
Purchases/Additions | 56,974 | 78,433 | 162,914 |
Sales/Reductions | (65,108) | (142,558) | (36,750) |
Total gains or losses (realized or unrealized): | |||
Included in Net Income | 21,969 | 7,373 | (37,926) |
Asset balance, End of Year | $ 100,825 | $ 86,990 | $ 143,742 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3, Inputs, Recurring (Details) - Level 3 - Recurring | Dec. 31, 2022 | Dec. 31, 2021 |
Loans held for sale | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Valuation Technique [Extensible List] | us-gaap:MarketApproachValuationTechniqueMember | us-gaap:MarketApproachValuationTechniqueMember |
Loans Held-for-sale, Measurement Input [Extensible List] | Projected Price | Projected Price |
Loans held for sale | Projected Price | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.89 | 0.95 |
Loans held for sale | Projected Price | Minimum | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.88 | 0.94 |
Loans held for sale | Projected Price | Maximum | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Measurement Input | 0.95 | 0.95 |
Loans held for investment | Discount Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Loans Held-for-sale, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | |
Loans Held-for-sale, Measurement Input | 0.1188 | |
MSR asset | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
MSR asset | Constant Prepayment Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Measurement Input | 0.0814 | 0.1002 |
MSR asset | Discount Rate | Weighted average | ||
Significant unobservable inputs used in the fair value measurements | ||
Servicing Asset, Measurement Input | 0.1210 | 0.1432 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in FV (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Option | |||
Net Gains (Losses) | $ 302,384 | $ 825,960 | $ 1,001,059 |
Other Noninterest Income | 113,957 | 128,034 | 243,605 |
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 | |
Loans held for sale | |||
Fair Value Option | |||
Net Gains (Losses) | (48,916) | (55,442) | 52,296 |
Total Changes in Fair Value | (48,916) | (55,442) | 52,296 |
Loans held for investment | |||
Fair Value Option | |||
Net Gains (Losses) | (660) | ||
Total Changes in Fair Value | (660) | ||
MSR asset | |||
Fair Value Option | |||
Net Gains (Losses) | 21,969 | 7,373 | (37,926) |
Total Changes in Fair Value | $ 21,969 | $ 7,373 | $ (37,926) |
Fair Value Measurements - OREO
Fair Value Measurements - OREO (Details) - Nonrecurring - Estimate of Fair Value - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value | |||
Total losses of other real estate owned | $ 0.1 | $ 1.2 | $ 4.4 |
Level 2 | Other Assets | |||
Fair Value | |||
Other real estate owned | $ 2.3 | $ 2.8 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial assets: | ||
Held to maturity securities | $ 785,335 | $ 276,296 |
Loans held for investment, net | 7,997,231 | 7,788,552 |
Broker-dealer and clearing organization receivables | 1,038,055 | 1,672,946 |
Financial liabilities: | ||
Broker-dealer and clearing organization payables | 966,470 | 1,477,300 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 1,580,162 | 2,823,523 |
Assets segregated for regulatory purposes | 67,737 | 221,740 |
Securities purchased under agreements to resell | 118,070 | 118,262 |
Held to maturity securities | 875,532 | 267,684 |
Loans held for sale | 126,919 | 95,599 |
Loans held for investment, net | 7,988,050 | 7,788,552 |
Broker-dealer and clearing organization receivables | 1,038,055 | 1,672,946 |
Other assets | 77,052 | 73,041 |
Financial liabilities: | ||
Deposits | 11,315,749 | 12,818,077 |
Broker-dealer and clearing organization payables | 966,470 | 1,477,300 |
Short-term borrowings | 970,056 | 859,444 |
Debt | 346,654 | 387,904 |
Other liabilities | 5,410 | 3,944 |
Estimate of Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 1,580,162 | 2,823,523 |
Assets segregated for regulatory purposes | 67,737 | 221,740 |
Securities purchased under agreements to resell | 118,070 | 118,262 |
Held to maturity securities | 785,335 | 276,296 |
Loans held for sale | 125,592 | 95,599 |
Loans held for investment, net | 7,865,261 | 7,999,925 |
Broker-dealer and clearing organization receivables | 1,038,055 | 1,672,946 |
Other assets | 77,052 | 73,041 |
Financial liabilities: | ||
Deposits | 11,295,153 | 12,821,138 |
Broker-dealer and clearing organization payables | 966,470 | 1,477,300 |
Short-term borrowings | 970,056 | 859,444 |
Debt | 350,104 | 387,904 |
Other liabilities | 5,410 | 3,944 |
Estimate of Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 1,580,162 | 2,823,523 |
Assets segregated for regulatory purposes | 67,737 | 221,740 |
Estimate of Fair Value | Level 2 | ||
Financial assets: | ||
Securities purchased under agreements to resell | 118,070 | 118,262 |
Held to maturity securities | 785,335 | 276,296 |
Loans held for sale | 82,684 | 95,599 |
Loans held for investment, net | 431,223 | 733,193 |
Broker-dealer and clearing organization receivables | 1,038,055 | 1,672,946 |
Other assets | 75,386 | 71,290 |
Financial liabilities: | ||
Deposits | 11,295,153 | 12,821,138 |
Broker-dealer and clearing organization payables | 966,470 | 1,477,300 |
Short-term borrowings | 970,056 | 859,444 |
Debt | 350,104 | 387,904 |
Other liabilities | 5,410 | 3,944 |
Estimate of Fair Value | Level 3 | ||
Financial assets: | ||
Loans held for sale | 42,908 | |
Loans held for investment, net | 7,434,038 | 7,266,732 |
Other assets | $ 1,666 | $ 1,751 |
Fair Value Measurements - Adjus
Fair Value Measurements - Adjustments to the carrying value of investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Adjustments to the carrying value of these investments | ||
Balance, beginning of year | $ 16,817 | $ 22,844 |
Additional investments | 11,000 | |
Upward adjustments | 916 | 6,411 |
Impairments and downward adjustments | (1,469) | (1,072) |
Dispositions | (11,366) | |
Balance, end of year | 27,264 | 16,817 |
Other Assets | ||
Equity Securities without Readily Determinable Fair Value | ||
Other equity investments | $ 57,600 | $ 54,000 |
Securities - Trading Securities
Securities - Trading Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of fair value of trading securities | ||
Debt Securities, Trading | $ 755,032 | $ 647,998 |
Investment-related Liabilities | ||
Securities sold, not yet purchased, at fair value | 53,023 | 96,586 |
US Treasury Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 10,466 | 3,728 |
Bonds | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 20,878 | 3,410 |
Residential Mortgage Backed Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 214,100 | 152,093 |
Collateralized Mortgage Obligations | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 182,717 | 126,389 |
Corporate Debt Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 42,685 | 60,671 |
US States and Political Subdivisions Debt Securities | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 260,271 | 285,376 |
Private-label securitized product | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | 9,265 | 11,377 |
Other | ||
Schedule of fair value of trading securities | ||
Debt Securities, Trading | $ 14,650 | $ 4,954 |
Securities - AFS and HTM, Amort
Securities - AFS and HTM, Amortized Cost and FV (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Available for sale | |||
Amortized Cost | $ 1,788,557 | $ 2,148,635 | |
Unrealized Gains | 460 | 13,570 | |
Unrealized Losses | (130,251) | (31,637) | |
Fair Value | 1,658,766 | 2,130,568 | |
Held to maturity | |||
Amortized Cost | 875,532 | 267,684 | |
Unrealized Gains | 26 | 8,615 | |
Unrealized Losses | (90,223) | (3) | |
Fair Value | 785,335 | 276,296 | |
Equity Securities | |||
Unrealized net gains from equity securities | 100 | 200 | |
Equity, at fair value | 200 | 250 | |
Unrealized net gains (losses) from equity securities during the year | (100) | 100 | |
Book value of held to maturity | 691,716 | ||
Pre-tax net unrecognized losses | 65,559 | ||
Recognized net (loss) gain on equity securities | (100) | 100 | |
US Treasury Securities | |||
Available for sale | |||
Amortized Cost | 19,655 | 14,937 | |
Unrealized Gains | 3 | ||
Unrealized Losses | (514) | (75) | |
Fair Value | 19,144 | 14,862 | |
Bonds | |||
Available for sale | |||
Amortized Cost | 202,834 | 43,448 | |
Unrealized Gains | 323 | 838 | |
Unrealized Losses | (900) | (153) | |
Fair Value | 202,257 | 44,133 | |
Residential Mortgage Backed Securities | |||
Available for sale | |||
Amortized Cost | 455,121 | 900,084 | |
Unrealized Gains | 12 | 7,979 | |
Unrealized Losses | (48,775) | (9,617) | |
Fair Value | 406,358 | 898,446 | |
Held to maturity | |||
Amortized Cost | 301,583 | 9,892 | |
Unrealized Gains | 400 | ||
Unrealized Losses | (29,727) | ||
Fair Value | 271,856 | 10,292 | |
Commercial Mortgage Backed Securities | |||
Available for sale | |||
Amortized Cost | 183,266 | 219,460 | |
Unrealized Gains | 65 | 367 | |
Unrealized Losses | (7,832) | (9,128) | |
Fair Value | 175,499 | 210,699 | |
Held to maturity | |||
Amortized Cost | 180,942 | 145,742 | |
Unrealized Gains | 5,311 | ||
Unrealized Losses | (14,935) | ||
Fair Value | 166,007 | 151,053 | |
Collateralized Mortgage Obligations | |||
Available for sale | |||
Amortized Cost | 887,521 | 926,783 | |
Unrealized Gains | 2,547 | ||
Unrealized Losses | (68,627) | (12,464) | |
Fair Value | 818,894 | 916,866 | |
Held to maturity | |||
Amortized Cost | 314,705 | 43,990 | |
Unrealized Gains | 476 | ||
Unrealized Losses | (38,343) | ||
Fair Value | 276,362 | 44,466 | |
US States and Political Subdivisions Debt Securities | |||
Available for sale | |||
Amortized Cost | 40,160 | 43,923 | |
Unrealized Gains | 57 | 1,839 | |
Unrealized Losses | (3,603) | (200) | |
Fair Value | 36,614 | 45,562 | |
Held to maturity | |||
Amortized Cost | 78,302 | 68,060 | |
Unrealized Gains | 26 | 2,428 | |
Unrealized Losses | (7,218) | (3) | |
Fair Value | $ 71,110 | $ 70,485 | |
Agency Issued Securities | |||
Equity Securities | |||
Book value of held to maturity | $ 782,000 | ||
Market value of held to maturity | 708,000 | ||
Pre-tax net unrecognized losses | $ 74,000 |
Securities - AFS in an Unrealiz
Securities - AFS in an Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 252 | 147 |
Unrealized loss for twelve months or longer | item | 119 | 42 |
Total | item | 371 | 189 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 930,361 | $ 1,262,834 |
Unrealized loss for twelve months or longer | 596,199 | 311,828 |
Total | 1,526,560 | 1,574,662 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 44,415 | 20,376 |
Unrealized loss for twelve months or longer | 85,836 | 11,261 |
Total | $ 130,251 | $ 31,637 |
US Treasury Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 2 | |
Unrealized loss for twelve months or longer | item | 1 | |
Total | item | 1 | 2 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 14,862 | |
Unrealized loss for twelve months or longer | $ 4,465 | |
Total | 4,465 | 14,862 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 75 | |
Unrealized loss for twelve months or longer | 514 | |
Total | $ 514 | $ 75 |
Bonds | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 15 | 2 |
Unrealized loss for twelve months or longer | item | 3 | 1 |
Total | item | 18 | 3 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 98,246 | $ 9,904 |
Unrealized loss for twelve months or longer | 15,263 | 6,184 |
Total | 113,509 | 16,088 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 388 | 94 |
Unrealized loss for twelve months or longer | 512 | 59 |
Total | $ 900 | $ 153 |
Residential Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 95 | 52 |
Unrealized loss for twelve months or longer | item | 30 | 17 |
Total | item | 125 | 69 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 168,351 | $ 548,392 |
Unrealized loss for twelve months or longer | 236,739 | 104,378 |
Total | 405,090 | 652,770 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 10,036 | 6,915 |
Unrealized loss for twelve months or longer | 38,739 | 2,702 |
Total | $ 48,775 | $ 9,617 |
Commercial Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 11 | 5 |
Unrealized loss for twelve months or longer | item | 8 | 14 |
Total | item | 19 | 19 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 79,337 | $ 65,636 |
Unrealized loss for twelve months or longer | 86,923 | 138,619 |
Total | 166,260 | 204,255 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 2,047 | 1,776 |
Unrealized loss for twelve months or longer | 5,785 | 7,352 |
Total | $ 7,832 | $ 9,128 |
Collateralized Mortgage Obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 97 | 72 |
Unrealized loss for twelve months or longer | item | 48 | 10 |
Total | item | 145 | 82 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 563,872 | $ 618,464 |
Unrealized loss for twelve months or longer | 244,917 | 62,647 |
Total | 808,789 | 681,111 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 30,980 | 11,316 |
Unrealized loss for twelve months or longer | 37,647 | 1,148 |
Total | $ 68,627 | $ 12,464 |
US States and Political Subdivisions Debt Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 34 | 14 |
Unrealized loss for twelve months or longer | item | 29 | |
Total | item | 63 | 14 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 20,555 | $ 5,576 |
Unrealized loss for twelve months or longer | 7,892 | |
Total | 28,447 | 5,576 |
Unrealized Loss | ||
Unrealized loss for less than twelve months | 964 | 200 |
Unrealized loss for twelve months or longer | 2,639 | |
Total | $ 3,603 | $ 200 |
Securities - HTM in an Unrealiz
Securities - HTM in an Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) item |
Number of Securities | ||
Unrealized loss for less than twelve months | item | 212 | 2 |
Unrealized loss for twelve months or longer | item | 97 | 1 |
Total | item | 309 | 3 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 315,556 | $ 558 |
Unrealized loss for twelve months or longer | 466,222 | 266 |
Total | 781,778 | 824 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 28,998 | 1 |
Unrealized loss for twelve months or longer | 61,225 | 2 |
Total | $ 90,223 | $ 3 |
Residential Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 14 | |
Unrealized loss for twelve months or longer | item | 31 | |
Total | item | 45 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 59,089 | |
Unrealized loss for twelve months or longer | 212,768 | |
Total | 271,857 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 5,928 | |
Unrealized loss for twelve months or longer | 23,799 | |
Total | $ 29,727 | |
Commercial Mortgage Backed Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 30 | |
Unrealized loss for twelve months or longer | item | 1 | |
Total | item | 31 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 163,172 | |
Unrealized loss for twelve months or longer | 2,834 | |
Total | 166,006 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 14,483 | |
Unrealized loss for twelve months or longer | 452 | |
Total | $ 14,935 | |
Collateralized Mortgage Obligations | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 18 | |
Unrealized loss for twelve months or longer | item | 38 | |
Total | item | 56 | |
Fair Value | ||
Unrealized loss for less than twelve months | $ 33,836 | |
Unrealized loss for twelve months or longer | 242,527 | |
Total | 276,363 | |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 3,225 | |
Unrealized loss for twelve months or longer | 35,118 | |
Total | $ 38,343 | |
US States and Political Subdivisions Debt Securities | ||
Number of Securities | ||
Unrealized loss for less than twelve months | item | 150 | 2 |
Unrealized loss for twelve months or longer | item | 27 | 1 |
Total | item | 177 | 3 |
Fair Value | ||
Unrealized loss for less than twelve months | $ 59,459 | $ 558 |
Unrealized loss for twelve months or longer | 8,093 | 266 |
Total | 67,552 | 824 |
Unrealized Losses | ||
Unrealized loss for less than twelve months | 5,362 | 1 |
Unrealized loss for twelve months or longer | 1,856 | 2 |
Total | $ 7,218 | $ 3 |
Securities - AFS Contractual Ma
Securities - AFS Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
AFS, Amortized Cost, Rolling Maturity | ||
Due in one year or less | $ 34,856 | |
Due after one year through five years | 80,274 | |
Due after five years through ten years | 63,313 | |
Due after ten years | 84,206 | |
Total | 262,649 | |
Amortized Cost | 1,788,557 | $ 2,148,635 |
AFS, Fair Value, Rolling Maturity | ||
Due in one year or less | 34,636 | |
Due after one year through five years | 79,428 | |
Due after five years through ten years | 62,849 | |
Due after ten years | 81,102 | |
Total | 258,015 | |
Fair Value | 1,658,766 | 2,130,568 |
Residential Mortgage Backed Securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 455,121 | |
Amortized Cost | 455,121 | 900,084 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 406,358 | |
Fair Value | 406,358 | 898,446 |
Commercial Mortgage Backed Securities | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 183,266 | |
Amortized Cost | 183,266 | 219,460 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 175,499 | |
Fair Value | 175,499 | 210,699 |
Collateralized Mortgage Obligations | ||
AFS, Amortized Cost, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 887,521 | |
Amortized Cost | 887,521 | 926,783 |
AFS, Fair Value, Rolling Maturity | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 818,894 | |
Fair Value | $ 818,894 | $ 916,866 |
Securities - HTM Contractual Ma
Securities - HTM Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
HTM, Amortized Cost, Rolling Maturities | ||
Due in one year or less | $ 853 | |
Due after one year through five years | 1,121 | |
Due after five years through ten years | 23,764 | |
Due after ten years | 52,564 | |
Total | 78,302 | |
Amortized Cost | 875,532 | $ 267,684 |
HTM, Fair Value, Rolling Maturities | ||
Due in one year or less | 849 | |
Due after one year through five years | 1,084 | |
Due after five years through ten years | 22,429 | |
Due after ten years | 46,748 | |
Total | 71,110 | |
Fair Value | 785,335 | 276,296 |
Residential Mortgage Backed Securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 301,583 | |
Amortized Cost | 301,583 | 9,892 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 271,856 | |
Fair Value | 271,856 | 10,292 |
Commercial Mortgage Backed Securities | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 180,942 | |
Amortized Cost | 180,942 | 145,742 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 166,007 | |
Fair Value | 166,007 | 151,053 |
Collateralized Mortgage Obligations | ||
HTM, Amortized Cost, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 314,705 | |
Amortized Cost | 314,705 | 43,990 |
HTM, Fair Value, Rolling Maturities | ||
Mortgage-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities | 276,362 | |
Fair Value | $ 276,362 | $ 44,466 |
Securities - Additional Informa
Securities - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Securities | |||
Realized net gains (losses) from trading securities portfolio | $ 23.7 | $ 26.4 | $ 122 |
Realized net losses from other securities | (0.1) | 0.2 | |
Asset Pledged as Collateral | |||
Securities | |||
Carrying amount of securities pledged | 778.6 | 809.9 | |
Fair value of securities pledged | 717.6 | 817.7 | |
Hilltop Broker-Dealers | |||
Securities | |||
Realized net gains (losses) from trading securities portfolio | $ 21 | $ 68.7 | $ 77.1 |
Loans Held for Investment - Sum
Loans Held for Investment - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Loans | ||||
Loans | $ 8,092,673 | $ 7,879,904 | ||
Allowance for loan losses | (95,442) | (91,352) | $ (149,044) | $ (61,136) |
Loans held for investment, net | 7,997,231 | 7,788,552 | ||
Commercial real estate | ||||
Loans | ||||
Loans | 3,245,873 | 3,042,729 | ||
Allowance for loan losses | (63,255) | (59,354) | (109,629) | (31,595) |
Commercial and industrial | ||||
Loans | ||||
Loans | 1,639,980 | 1,875,420 | ||
Allowance for loan losses | (16,035) | (21,982) | (27,703) | (17,964) |
Commercial and industrial | Loans Funded Through Paycheck Protection Program | ||||
Loans | ||||
Loans | 77,700 | |||
Construction and Land Development | ||||
Loans | ||||
Loans | 980,896 | 892,783 | ||
Allowance for loan losses | (6,051) | (4,674) | (6,677) | (4,878) |
1 - 4 family residential | ||||
Loans | ||||
Loans | 1,767,099 | 1,303,430 | ||
Allowance for loan losses | (9,313) | (4,589) | (3,946) | (6,386) |
Consumer | ||||
Loans | ||||
Loans | 27,602 | 32,349 | ||
Allowance for loan losses | (554) | (578) | (876) | (265) |
Broker-dealer | ||||
Loans | ||||
Loans | 431,223 | 733,193 | ||
Allowance for loan losses | $ (234) | $ (175) | $ (213) | $ (48) |
Loans Held for Investment - Non
Loans Held for Investment - Non-accrual Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Non-accrual loans | |||
Non-accrual Loans With Allowance | $ 7,725 | $ 20,934 | |
Non-accrual Loans With No Allowance | 16,949 | 26,378 | |
Non-accrual loans | 24,674 | 47,312 | |
Interest Income Recognized | 5,587 | 7,414 | $ 5,821 |
Decrease in non-accrual status loans | 22,600 | ||
Commercial real estate | |||
Non-accrual loans | |||
Decrease in non-accrual status loans | 1,300 | ||
Commercial real estate | Non-owner occupied | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 688 | 413 | |
Non-accrual Loans With No Allowance | 562 | 1,853 | |
Non-accrual loans | 1,250 | 2,266 | |
Interest Income Recognized | 483 | 378 | 1,364 |
Commercial real estate | Owner occupied | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 2,862 | 3,058 | |
Non-accrual Loans With No Allowance | 157 | 1,277 | |
Non-accrual loans | 3,019 | 4,335 | |
Interest Income Recognized | 556 | 648 | 295 |
Commercial and industrial | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 3,727 | 16,536 | |
Non-accrual Loans With No Allowance | 5,368 | 5,942 | |
Non-accrual loans | 9,095 | 22,478 | |
Interest Income Recognized | 1,099 | 2,585 | 2,362 |
Addition of loans in non-accrual status | 3,000 | ||
Decrease in non-accrual status loans | 13,400 | ||
Financing receivable decrease due to loan payoffs and paydowns | 11,800 | ||
Financing receivable decrease due to charge off | 4,600 | ||
Construction and Land Development | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 1 | 2 | |
Non-accrual loans | 1 | 2 | |
Interest Income Recognized | 29 | 202 | 110 |
1 - 4 family residential | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 433 | 902 | |
Non-accrual Loans With No Allowance | 10,862 | 17,306 | |
Non-accrual loans | 11,295 | 18,208 | |
Interest Income Recognized | 3,420 | 3,721 | 1,568 |
Decrease in non-accrual status loans | 6,900 | ||
Financing receivable decrease due to loan payoffs and paydowns | 3,500 | ||
Financing receivables decrease due to loan returned to accrual | 4,300 | ||
1 - 4 family residential | Secured by Residential Properties [Member] | |||
Non-accrual loans | |||
Non-accrual loans held for sale | 4,800 | 2,900 | |
Consumer | |||
Non-accrual loans | |||
Non-accrual Loans With Allowance | 14 | 23 | |
Non-accrual loans | $ 14 | 23 | |
Interest Income Recognized | $ (120) | $ 122 |
Loans Held for Investment - TDR
Loans Held for Investment - TDRs (Details) $ in Thousands | 12 Months Ended | 22 Months Ended | ||
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | Dec. 31, 2020 USD ($) loan | Dec. 31, 2021 USD ($) | |
TDRs, Non-covered loans | ||||
COVID-19 related loan modifications | $ 0 | |||
COVID-19 related loan modifications guaranteed by the SBA | $ 1,000,000 | |||
Number of TDRs granted | loan | 3 | 1 | 8 | |
TDR at extension | $ 3,616 | $ 725 | $ 9,902 | |
TDR modifications, end of period | 2,806 | $ 713 | $ 4,554 | |
TDRs granted | $ 2,200 | |||
Number of TDRs granted in preceding twelve months for which payment was at least 30 days past due | loan | 2 | 0 | 0 | |
AB Note | Minimum | Plains Capital Bank | ||||
TDRs, Non-covered loans | ||||
Number of loans into which a single loan may be reconfigured | loan | 2 | |||
Commercial real estate | ||||
TDRs, Non-covered loans | ||||
Number of TDRs granted | loan | 1 | |||
TDRs granted | $ 2,100 | |||
Commercial real estate | Owner occupied | Payment Term Extension | ||||
TDRs, Non-covered loans | ||||
Number of TDRs granted | loan | 2 | 1 | ||
TDR at extension | $ 2,743 | $ 725 | ||
TDR modifications, end of period | $ 2,072 | $ 713 | ||
Commercial and industrial | Payment Term Extension | ||||
TDRs, Non-covered loans | ||||
Number of TDRs granted | loan | 1 | 3 | ||
TDR at extension | $ 873 | $ 9,464 | ||
TDR modifications, end of period | $ 734 | $ 4,116 | ||
1 - 4 family residential | ||||
TDRs, Non-covered loans | ||||
Number of TDRs granted | loan | 1 | |||
TDRs granted | $ 100 | |||
1 - 4 family residential | Payment Term Extension | ||||
TDRs, Non-covered loans | ||||
Number of TDRs granted | loan | 5 | |||
TDR at extension | $ 438 | |||
TDR modifications, end of period | $ 438 |
Loans Held for Investment - Agi
Loans Held for Investment - Aging (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | $ 8,092,673 | $ 7,879,904 |
Accruing Loans Past Due 90 Days or More | 51 | 101 |
Amount remaining under deferral program | 0 | |
Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 15,788 | 10,477 |
Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,742 | 3,725 |
Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 10,314 | 21,950 |
Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 29,844 | 36,152 |
Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 8,062,829 | 7,843,752 |
Prime Lending | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Repurchase under a forbearance agreement | 43,800 | |
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 | 92,000 | 60,700 |
Unpaid principal balance loans past due 90 days or more | 92,400 | 61,700 |
Commercial real estate | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,245,873 | 3,042,729 |
Commercial real estate | Non-owner occupied | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,870,552 | 1,729,699 |
Commercial real estate | Non-owner occupied | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 567 | 117 |
Commercial real estate | Non-owner occupied | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 235 | 1,173 |
Commercial real estate | Non-owner occupied | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 802 | 1,290 |
Commercial real estate | Non-owner occupied | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,869,750 | 1,728,409 |
Commercial real estate | Owner occupied | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,375,321 | 1,313,030 |
Commercial real estate | Owner occupied | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,037 | 590 |
Commercial real estate | Owner occupied | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 2,880 | 688 |
Commercial real estate | Owner occupied | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 2,273 | |
Commercial real estate | Owner occupied | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,917 | 3,551 |
Commercial real estate | Owner occupied | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,371,404 | 1,309,479 |
Commercial and industrial | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,639,980 | 1,875,420 |
Accruing Loans Past Due 90 Days or More | 49 | 1 |
Commercial and industrial | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 609 | 1,059 |
Commercial and industrial | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 82 | 277 |
Commercial and industrial | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 5,598 | 13,640 |
Commercial and industrial | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 6,289 | 14,976 |
Commercial and industrial | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,633,691 | 1,860,444 |
Construction and Land Development | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 980,896 | 892,783 |
Construction and Land Development | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,665 | 946 |
Construction and Land Development | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 3,665 | 946 |
Construction and Land Development | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 977,231 | 891,837 |
1 - 4 family residential | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,767,099 | 1,303,430 |
Accruing Loans Past Due 90 Days or More | 1 | 100 |
1 - 4 family residential | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 9,733 | 7,642 |
1 - 4 family residential | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 773 | 2,738 |
1 - 4 family residential | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 4,467 | 4,842 |
1 - 4 family residential | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 14,973 | 15,222 |
1 - 4 family residential | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 1,752,126 | 1,288,208 |
Consumer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 27,602 | 32,349 |
Accruing Loans Past Due 90 Days or More | 1 | |
Consumer | Financing Receivables, 30 to 59 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 177 | 123 |
Consumer | Financing Receivables, 60 to 89 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 7 | 22 |
Consumer | Financing Receivables, Greater than 90 Days Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 14 | 22 |
Consumer | Financial Asset, Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 198 | 167 |
Consumer | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 27,404 | 32,182 |
Broker-dealer | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | 431,223 | 733,193 |
Broker-dealer | Financial Asset, Not Past Due | ||
Non-Covered Loans and Allowance for Non-Covered Loan Losses | ||
Loans | $ 431,223 | $ 733,193 |
Loans Held for Investment - Int
Loans Held for Investment - Internal Risk Grades (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Internal risk grades of non-covered loans | ||
2022 | $ 2,462,891 | |
2021 | 2,204,200 | |
2020 | 807,559 | |
2019 | 407,142 | |
2018 | 317,576 | |
2017 and Prior | 426,725 | |
Revolving | 825,308 | |
Total loans with credit quality measures | 7,451,401 | |
Total | 8,092,673 | $ 7,879,904 |
Commercial real estate | ||
Internal risk grades of non-covered loans | ||
Total | 3,245,873 | 3,042,729 |
Commercial real estate | Non-owner occupied | ||
Internal risk grades of non-covered loans | ||
Total | 1,870,552 | 1,729,699 |
Commercial real estate | Non-owner occupied | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 49,168 | |
2021 | 71,349 | |
2020 | 20,340 | |
2019 | 7,967 | |
2018 | 3,882 | |
2017 and Prior | 7,834 | |
Revolving | 1 | |
Total loans with credit quality measures | 160,541 | |
Commercial real estate | Non-owner occupied | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 355,211 | |
2021 | 338,276 | |
2020 | 131,470 | |
2019 | 82,524 | |
2018 | 44,138 | |
2017 and Prior | 47,723 | |
Revolving | 53,886 | |
Total loans with credit quality measures | 1,053,228 | |
Commercial real estate | Non-owner occupied | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 98,068 | |
2021 | 131,054 | |
2020 | 129,128 | |
2019 | 61,080 | |
2018 | 48,085 | |
2017 and Prior | 76,735 | |
Revolving | 12,604 | |
Total loans with credit quality measures | 556,754 | |
Commercial real estate | Non-owner occupied | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 73,578 | |
2021 | 14,794 | |
2020 | 1,627 | |
2019 | 8,042 | |
2017 and Prior | 738 | |
Total loans with credit quality measures | 98,779 | |
Commercial real estate | Non-owner occupied | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2021 | 395 | |
2017 and Prior | 855 | |
Total loans with credit quality measures | 1,250 | |
Commercial real estate | Owner occupied | ||
Internal risk grades of non-covered loans | ||
Total | 1,375,321 | 1,313,030 |
Commercial real estate | Owner occupied | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 20,666 | |
2021 | 101,673 | |
2020 | 60,303 | |
2019 | 20,453 | |
2018 | 13,033 | |
2017 and Prior | 62,397 | |
Revolving | 4,742 | |
Total loans with credit quality measures | 283,267 | |
Commercial real estate | Owner occupied | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 188,833 | |
2021 | 193,614 | |
2020 | 81,937 | |
2019 | 80,572 | |
2018 | 85,674 | |
2017 and Prior | 48,216 | |
Revolving | 15,189 | |
Total loans with credit quality measures | 694,035 | |
Commercial real estate | Owner occupied | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 83,827 | |
2021 | 67,387 | |
2020 | 91,528 | |
2019 | 29,250 | |
2018 | 58,676 | |
2017 and Prior | 25,881 | |
Revolving | 6,762 | |
Total loans with credit quality measures | 363,311 | |
Commercial real estate | Owner occupied | Internal Grade 12 (Special mention) | ||
Internal risk grades of non-covered loans | ||
2021 | 94 | |
2020 | 454 | |
Total loans with credit quality measures | 548 | |
Commercial real estate | Owner occupied | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 2,240 | |
2021 | 2,794 | |
2020 | 5,994 | |
2019 | 2,826 | |
2018 | 2,762 | |
2017 and Prior | 14,525 | |
Total loans with credit quality measures | 31,141 | |
Commercial real estate | Owner occupied | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 174 | |
2021 | 680 | |
2017 and Prior | 2,165 | |
Total loans with credit quality measures | 3,019 | |
Commercial and industrial | ||
Internal risk grades of non-covered loans | ||
Total | 1,639,980 | 1,875,420 |
Commercial and industrial | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 31,517 | |
2021 | 28,724 | |
2020 | 23,292 | |
2019 | 5,626 | |
2018 | 1,289 | |
2017 and Prior | 2,086 | |
Revolving | 51,720 | |
Total loans with credit quality measures | 144,254 | |
Commercial and industrial | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 148,449 | |
2021 | 146,330 | |
2020 | 48,756 | |
2019 | 25,523 | |
2018 | 8,666 | |
2017 and Prior | 10,846 | |
Revolving | 349,161 | |
Total loans with credit quality measures | 737,731 | |
Commercial and industrial | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 146,941 | |
2021 | 50,878 | |
2020 | 30,107 | |
2019 | 15,734 | |
2018 | 2,114 | |
2017 and Prior | 9,557 | |
Revolving | 242,413 | |
Total loans with credit quality measures | 497,744 | |
Commercial and industrial | Internal Grade 12 (Special mention) | ||
Internal risk grades of non-covered loans | ||
2019 | 3,254 | |
Revolving | 202 | |
Total loans with credit quality measures | 3,456 | |
Commercial and industrial | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 2,160 | |
2021 | 4,041 | |
2020 | 6,393 | |
2019 | 4,143 | |
2018 | 3,500 | |
2017 and Prior | 2,993 | |
Revolving | 14,421 | |
Total loans with credit quality measures | 37,651 | |
Commercial and industrial | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 240 | |
2021 | 196 | |
2020 | 6,162 | |
2018 | 2,200 | |
2017 and Prior | 297 | |
Total loans with credit quality measures | 9,095 | |
Commercial and industrial | Mortgage Warehouse Lending | ||
Internal risk grades of non-covered loans | ||
Loans without credit quality measures | 200,868 | |
Commercial and industrial | Loans Funded Through Paycheck Protection Program | ||
Internal risk grades of non-covered loans | ||
Total | 77,700 | |
Commercial and industrial | Loans Accounted At Fair Value | ||
Internal risk grades of non-covered loans | ||
Loans without credit quality measures | 9,181 | |
Construction and Land Development | ||
Internal risk grades of non-covered loans | ||
Total | 980,896 | 892,783 |
Construction and Land Development | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 1,214 | |
2018 | 969 | |
Total loans with credit quality measures | 2,183 | |
Construction and Land Development | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 18,820 | |
2021 | 824 | |
2020 | 54 | |
Total loans with credit quality measures | 19,698 | |
Construction and Land Development | Other. | ||
Internal risk grades of non-covered loans | ||
2022 | 5,723 | |
Total loans with credit quality measures | 5,723 | |
Construction and Land Development | Internal Grade 1-3 (Pass low risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 23,803 | |
2021 | 7,419 | |
2020 | 424 | |
2019 | 870 | |
2018 | 443 | |
2017 and Prior | 2,609 | |
Revolving | 1 | |
Total loans with credit quality measures | 35,569 | |
Construction and Land Development | Internal Grade 4-7 (Pass normal risk) | ||
Internal risk grades of non-covered loans | ||
2022 | 364,342 | |
2021 | 171,250 | |
2020 | 33,189 | |
2019 | 2,602 | |
2018 | 3,686 | |
2017 and Prior | 1,897 | |
Revolving | 39,653 | |
Total loans with credit quality measures | 616,619 | |
Construction and Land Development | Internal Grade 8-11 (Pass high risk and watch) | ||
Internal risk grades of non-covered loans | ||
2022 | 203,560 | |
2021 | 51,400 | |
2020 | 17,397 | |
2019 | 2,454 | |
2017 and Prior | 1,349 | |
Revolving | 19,694 | |
Total loans with credit quality measures | 295,854 | |
Construction and Land Development | Internal Grade 13 (Substandard accrual) | ||
Internal risk grades of non-covered loans | ||
2022 | 5,249 | |
Total loans with credit quality measures | 5,249 | |
Construction and Land Development | Internal Grade 14 (Substandard non-accrual) | ||
Internal risk grades of non-covered loans | ||
2017 and Prior | 1 | |
Total loans with credit quality measures | 1 | |
1 - 4 family residential | ||
Internal risk grades of non-covered loans | ||
Total | 1,767,099 | 1,303,430 |
1 - 4 family residential | FICO Score, Less than 620 | ||
Internal risk grades of non-covered loans | ||
2022 | 1,202 | |
2021 | 723 | |
2020 | 774 | |
2019 | 508 | |
2018 | 3,514 | |
2017 and Prior | 21,302 | |
Revolving | 259 | |
Total loans with credit quality measures | 28,282 | |
1 - 4 family residential | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 9,267 | |
2021 | 12,893 | |
2020 | 8,424 | |
2019 | 5,003 | |
2018 | 5,957 | |
2017 and Prior | 25,616 | |
Revolving | 3,958 | |
Total loans with credit quality measures | 71,118 | |
1 - 4 family residential | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 518,003 | |
2021 | 785,766 | |
2020 | 106,067 | |
2019 | 45,511 | |
2018 | 28,060 | |
2017 and Prior | 45,644 | |
Revolving | 3,320 | |
Total loans with credit quality measures | 1,532,371 | |
1 - 4 family residential | Substandard non-accrual | ||
Internal risk grades of non-covered loans | ||
2018 | 254 | |
2017 and Prior | 11,041 | |
Total loans with credit quality measures | 11,295 | |
1 - 4 family residential | Other. | ||
Internal risk grades of non-covered loans | ||
2022 | 95,054 | |
2021 | 18,371 | |
2020 | 1,602 | |
2019 | 2,363 | |
2018 | 571 | |
2017 and Prior | 4,003 | |
Revolving | 2,069 | |
Total loans with credit quality measures | 124,033 | |
Consumer | ||
Internal risk grades of non-covered loans | ||
Total | 27,602 | 32,349 |
Consumer | FICO Score, Less than 620 | ||
Internal risk grades of non-covered loans | ||
2022 | 1,317 | |
2021 | 222 | |
2020 | 107 | |
2019 | 29 | |
2018 | 1 | |
2017 and Prior | 12 | |
Revolving | 363 | |
Total loans with credit quality measures | 2,051 | |
Consumer | FICO Score, 620 to 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 4,017 | |
2021 | 922 | |
2020 | 514 | |
2019 | 374 | |
2018 | 31 | |
2017 and Prior | 371 | |
Revolving | 1,922 | |
Total loans with credit quality measures | 8,151 | |
Consumer | FICO Score, Greater than 720 | ||
Internal risk grades of non-covered loans | ||
2022 | 5,033 | |
2021 | 1,441 | |
2020 | 1,133 | |
2019 | 351 | |
2018 | 69 | |
Revolving | 2,770 | |
Total loans with credit quality measures | 10,797 | |
Consumer | Substandard non-accrual | ||
Internal risk grades of non-covered loans | ||
2017 and Prior | 14 | |
Total loans with credit quality measures | 14 | |
Consumer | Other. | ||
Internal risk grades of non-covered loans | ||
2022 | 5,215 | |
2021 | 690 | |
2020 | 383 | |
2019 | 83 | |
2018 | 2 | |
2017 and Prior | 18 | |
Revolving | 198 | |
Total loans with credit quality measures | 6,589 | |
Broker-dealer | ||
Internal risk grades of non-covered loans | ||
Loans without credit quality measures | 431,223 | |
Total | $ 431,223 | $ 733,193 |
Allowance for Credit Losses - N
Allowance for Credit Losses - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for loan losses | ||||
Available for sale debt securities past due | $ 0 | |||
Provision (reversal) in allowance on individually evaluated loans | (1,700) | $ 100 | $ 20,200 | |
Provision (reversal) in allowance on collectively evaluated loans | 10,000 | (58,300) | 76,100 | |
Net charge-offs | $ 4,200 | |||
Net recoveries | 500 | |||
Percentage of federal funds interest rate increase scenario | 5.30% | |||
Allowance for credit losses | $ 95,442 | $ 91,352 | 149,044 | $ 61,136 |
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 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 | $ 12,562 |
Allowance for Credit Losses - A
Allowance for Credit Losses - Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | $ 91,352 | $ 149,044 | $ 91,352 | $ 149,044 | $ 61,136 | ||||||
Provision for (Reversal of) Credit Losses | $ 3,638 | $ (780) | $ 5,336 | 115 | $ (18,565) | $ (5,819) | $ (28,720) | (5,109) | 8,309 | (58,213) | 96,491 |
Loans Charged Off | (7,515) | (3,228) | (24,040) | ||||||||
Recoveries on Charged Off Loans | 3,296 | 3,749 | 2,895 | ||||||||
Balance, End of Period | 95,442 | 91,352 | 95,442 | 91,352 | 149,044 | ||||||
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | 12,562 | 12,562 | |||||||||
Balance, End of Period | 12,562 | ||||||||||
Commercial real estate | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | 59,354 | 109,629 | 59,354 | 109,629 | 31,595 | ||||||
Provision for (Reversal of) Credit Losses | 3,773 | (50,231) | 73,865 | ||||||||
Loans Charged Off | (310) | (4,517) | |||||||||
Recoveries on Charged Off Loans | 128 | 266 | 613 | ||||||||
Balance, End of Period | 63,255 | 59,354 | 63,255 | 59,354 | 109,629 | ||||||
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 Period | 8,073 | 8,073 | |||||||||
Balance, End of Period | 8,073 | ||||||||||
Commercial and industrial | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | 21,982 | 27,703 | 21,982 | 27,703 | 17,964 | ||||||
Provision for (Reversal of) Credit Losses | (1,748) | (6,128) | 22,870 | ||||||||
Loans Charged Off | (6,945) | (2,249) | (18,158) | ||||||||
Recoveries on Charged Off Loans | 2,746 | 2,656 | 1,834 | ||||||||
Balance, End of Period | 16,035 | 21,982 | 16,035 | 21,982 | 27,703 | ||||||
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 Period | 3,193 | 3,193 | |||||||||
Balance, End of Period | 3,193 | ||||||||||
Construction and Land Development | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | 4,674 | 6,677 | 4,674 | 6,677 | 4,878 | ||||||
Provision for (Reversal of) Credit Losses | 1,377 | (2,003) | 1,222 | ||||||||
Loans Charged Off | (2) | ||||||||||
Recoveries on Charged Off Loans | 2 | ||||||||||
Balance, End of Period | 6,051 | 4,674 | 6,051 | 4,674 | 6,677 | ||||||
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 Period | 577 | 577 | |||||||||
Balance, End of Period | 577 | ||||||||||
1 - 4 family residential | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | 4,589 | 3,946 | 4,589 | 3,946 | 6,386 | ||||||
Provision for (Reversal of) Credit Losses | 4,729 | 409 | (1,717) | ||||||||
Loans Charged Off | (138) | (312) | (748) | ||||||||
Recoveries on Charged Off Loans | 133 | 546 | 54 | ||||||||
Balance, End of Period | 9,313 | 4,589 | 9,313 | 4,589 | 3,946 | ||||||
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 Period | (29) | (29) | |||||||||
Balance, End of Period | (29) | ||||||||||
Consumer | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | 578 | 876 | 578 | 876 | 265 | ||||||
Provision for (Reversal of) Credit Losses | 119 | (222) | 86 | ||||||||
Loans Charged Off | (432) | (357) | (615) | ||||||||
Recoveries on Charged Off Loans | 289 | 281 | 392 | ||||||||
Balance, End of Period | 554 | 578 | 554 | 578 | 876 | ||||||
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 Period | 748 | 748 | |||||||||
Balance, End of Period | 748 | ||||||||||
Broker-dealer | |||||||||||
Changes in the allowance for loan losses for loans held for investments | |||||||||||
Balance, Beginning of Period | $ 175 | $ 213 | 175 | 213 | 48 | ||||||
Provision for (Reversal of) Credit Losses | 59 | (38) | 165 | ||||||||
Balance, End of Period | $ 234 | $ 175 | $ 234 | $ 175 | $ 213 |
Allowance for Credit Losses - O
Allowance for Credit Losses - Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the allowance for credit losses for loans with off-balance sheet credit exposures | |||
Balance, beginning of period | $ 5,880 | $ 8,388 | $ 2,075 |
Transition adjustment CECL accounting standard | 3,837 | ||
Other noninterest expense | 1,904 | (2,508) | 2,476 |
Balance, end of period | $ 7,784 | $ 5,880 | 8,388 |
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 period | $ 5,900 |
Cash and Due from Banks (Detail
Cash and Due from Banks (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Cash and Due from Banks | |||
Cash on hand | $ 39,588 | $ 39,981 | |
Clearings and collection items | 162,817 | 52,405 | |
Deposits at Federal Reserve Bank | 1,334,482 | 2,692,088 | |
Deposits at Federal Home Loan Bank | 1,520 | 1,509 | |
Deposits in FDIC-insured institutions | 41,105 | 37,155 | |
Cash and due from banks | 1,579,512 | 2,823,138 | $ 1,062,560 |
Interest-bearing deposits | $ 1,300,000 | $ 2,700,000 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Premises and Equipment | |||
Premises and equipment, gross | $ 403,304 | $ 397,547 | |
Less accumulated depreciation and amortization | (218,354) | (193,109) | |
Premises and equipment, net | 184,950 | 204,438 | |
Gross assets under finance leases | 7,780 | 7,780 | |
Accumulated amortization for assets under finance leases | 5,948 | 5,358 | |
Rental income | 2,400 | 1,700 | $ 1,700 |
Depreciation and amortization expense | 26,800 | 28,400 | $ 27,900 |
Land and Building [Member] | |||
Premises and Equipment | |||
Premises and equipment, gross | 125,039 | 122,376 | |
Furniture and Fixtures | |||
Premises and Equipment | |||
Premises and equipment, gross | $ 278,265 | $ 275,171 |
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, 2022 | Dec. 31, 2021 |
Goodwill and Other Intangible Assets | ||||
Carrying amount of goodwill | $ 267,447 | $ 267,447 | ||
Other intangible assets, net | 11,317 | 15,284 | ||
Mortgage Origination Segment | Operating Segments | ||||
Goodwill and Other Intangible Assets | ||||
Carrying amount of goodwill | 13,071 | 13,071 | ||
Broker-Dealer | Operating Segments | ||||
Goodwill and Other Intangible Assets | ||||
Carrying amount of goodwill | $ 7,008 | $ 7,008 | ||
PCC | ||||
Goodwill and Other Intangible Assets | ||||
Goodwill in connection with acquisition | $ 227,800 | |||
BORO | ||||
Goodwill and Other Intangible Assets | ||||
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $ 80,730 | $ 85,040 | |
Accumulated Amortization | (69,413) | (69,756) | |
Net Intangible Assets | 11,317 | 15,284 | |
Amortization expense related to intangible assets | 3,967 | 5,081 | $ 6,301 |
Core deposits | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | 48,930 | 48,930 | |
Accumulated Amortization | (46,801) | (44,370) | |
Net Intangible Assets | $ 2,129 | $ 4,560 | |
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 | (9,063) | (8,312) | |
Net Intangible Assets | $ 7,437 | $ 8,188 | |
Estimated Useful Life | 20 years | 20 years | |
Noncompete agreements | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $ 4,310 | ||
Accumulated Amortization | $ (4,310) | ||
Estimated Useful Life | 4 years | ||
Customer contracts and relationships | |||
Carrying value of intangible assets subject to amortization | |||
Gross Intangible Assets | $ 15,300 | $ 15,300 | |
Accumulated Amortization | (13,549) | (12,764) | |
Net Intangible Assets | $ 1,751 | $ 2,536 | |
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, 2022 | Dec. 31, 2021 |
Estimated aggregate future amortization expense for intangible assets | ||
2023 | $ 2,860 | |
2024 | 1,826 | |
2025 | 1,028 | |
2026 | 959 | |
2027 | 889 | |
Thereafter | 3,755 | |
Net Intangible Assets | $ 11,317 | $ 15,284 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in fair value of mortgage servicing rights | |||
Balance, beginning of year | $ 86,990 | ||
Balance, end of year | 100,825 | $ 86,990 | |
MSR asset | |||
Change in fair value of mortgage servicing rights | |||
Balance, beginning of year | 86,990 | 143,742 | $ 55,504 |
Additions | 56,974 | 78,433 | 162,914 |
Sales | (65,108) | (142,558) | (36,750) |
Changes in fair value: Due to changes in model inputs or assumptions | 31,292 | 30,525 | (27,261) |
Changes in fair value: Due to customer payoffs | (9,323) | (23,152) | (10,665) |
Balance, end of year | 100,825 | 86,990 | $ 143,742 |
Mortgage loans serviced for others | $ 5,144,558 | $ 6,355,927 | |
MSR asset as a percentage of serviced mortgage loans | 1.96% | 1.37% | |
Mortgage servicing assets adjustment, fair value | $ 900 | $ 22,800 | |
Key Assumptions | |||
Weighted average constant prepayment rate (as a percent) | 8.14% | 10.02% | |
Weighted average discount rate (as a percent) | 12.10% | 14.32% | |
Weighted average life (in years) | 8 years 4 months 24 days | 7 years 1 month 6 days |
Mortgage Servicing Rights - Sen
Mortgage Servicing Rights - Sensitivity Analysis (Details) - MSR asset - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Sensitivity analysis | |||
Constant prepayment rate: Impact of 10% adverse change | $ (3,288) | $ (2,603) | |
Constant prepayment rate: Impact of 20% adverse change | (6,375) | (5,315) | |
Discount rate: Impact of 10% adverse change | (4,797) | (4,070) | |
Discount rate: Impact of 20% adverse change | (9,147) | (7,753) | |
Contractually specified servicing fees, late fees and ancillary fees | $ 37,500 | $ 57,700 | $ 35,400 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deposits | ||
Noninterest-bearing demand | $ 3,968,862 | $ 4,577,183 |
Interest-bearing: | ||
Demand accounts | 4,110,418 | 3,270,522 |
Brokered - demand | 5,336 | 114,393 |
Money market | 2,045,554 | 3,433,341 |
Brokered - money market | 9,031 | 98,614 |
Savings | 312,140 | 345,795 |
Time | 864,408 | 962,752 |
Brokered - time | 15,477 | |
Total deposits | 11,315,749 | $ 12,818,077 |
Time deposits that meet or exceed FDIC insurance limit | 367,400 | |
Scheduled maturities of interest-bearing time deposits | ||
2023 | 530,633 | |
2024 | 293,274 | |
2025 | 22,597 | |
2026 | 10,198 | |
2027 and thereafter | 7,706 | |
Time deposits | $ 864,408 |
Short-term Borrowings (Details)
Short-term Borrowings (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Short-term borrowings | |||
Short-term borrowings | $ 970,056 | $ 859,444 | |
Federal funds purchased | |||
Short-term borrowings | |||
Short-term borrowings | 397,108 | 171,925 | |
Securities sold under agreements to repurchase | |||
Short-term borrowings | |||
Short-term borrowings | 297,856 | 191,547 | |
Federal Home Loan Bank | |||
Short-term borrowings | |||
Average balance during the period | $ 38,634 | ||
Average interest rate during the period | 1.63% | ||
Maximum month-end balance during the year | $ 150,000 | ||
Amount of available collateral | $ 4,100,000 | ||
Federal Home Loan Bank | Maximum | |||
Short-term borrowings | |||
Maturity term of debt | 365 days | ||
Short-term bank loans | |||
Short-term borrowings | |||
Short-term borrowings | $ 57,500 | $ 142,000 | |
Short-term bank loans | Hilltop Broker-Dealers | |||
Short-term borrowings | |||
Weighted average interest rate on short-term bank loan borrowings (as a percent) | 5.50% | 1.25% | |
Commercial paper | |||
Short-term borrowings | |||
Short-term borrowings | $ 217,592 | $ 353,972 | |
Number of commercial paper programs initiated | item | 2 | ||
Weighted average interest rate on short-term bank loan borrowings (as a percent) | 4.96% | ||
Weighted average remaining life | 65 days | ||
Debt instrument, collateral | $ 239,400 | ||
Commercial paper | Minimum | |||
Short-term borrowings | |||
Maturity term of debt | 14 days | ||
Commercial paper | Maximum | |||
Short-term borrowings | |||
Maturity term of debt | 270 days | ||
Commercial paper | Weighted average | |||
Short-term borrowings | |||
Maturity term of debt | 138 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 | $ 573,183 | $ 363,964 | $ 509,577 |
Average interest rate during the period | 2.19% | 0.34% | 0.89% |
Maximum month-end balance during the year | $ 741,499 | $ 427,553 | $ 714,507 |
Average interest rate at end of period (as a percent) | 4.37% | 0.31% | |
Securities underlying the agreements at end of period: Carrying value | $ 296,075 | $ 191,483 | |
Securities underlying the agreements at end of period: Estimated fair value | $ 318,409 | $ 205,734 | |
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | Minimum | |||
Short-term borrowings | |||
Maturity term of debt | 1 day | ||
Federal Funds Purchased and Securities Sold under Agreements to Repurchase | Maximum | |||
Short-term borrowings | |||
Maturity term of debt | 90 days |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | May 07, 2020 | Jun. 22, 2015 | Apr. 09, 2015 | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument | |||||
Notes payable | $ 346,654 | $ 387,904 | |||
Series B Preferred Stock | |||||
Debt Instrument | |||||
Aggregate liquidation value | $ 114,100 | ||||
Unpaid dividend | 400 | ||||
Senior Notes due April 2025 | |||||
Debt Instrument | |||||
Notes payable | 149,301 | 149,114 | |||
Unamortized discount | 699 | 886 | |||
Period before maturity for redemption of Senior Notes | 3 months | ||||
Interest rate (as a percent) | 5% | ||||
Percentage of redemption price | 100% | ||||
Senior Notes due April 2025 | Private Placement | |||||
Debt Instrument | |||||
Aggregate principal amount | $ 150,000 | ||||
Interest rate (as a percent) | 5% | ||||
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% | ||||
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% | ||||
Subordinated Notes due May 2030 | |||||
Debt Instrument | |||||
Notes payable | 49,390 | 49,296 | |||
Unamortized discount | 610 | 704 | |||
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 | 147,963 | 147,780 | |||
Unamortized discount | 2,037 | 2,220 | |||
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% | ||||
Ventures Management lines of credit | |||||
Debt Instrument | |||||
Notes payable | $ 41,714 | ||||
Maximum borrowing capacity | 115,000 | ||||
Outstanding borrowing | $ 29,000 | ||||
Calculated index rate (as a percent) | 6.37% | ||||
Single unaffiliated bank | |||||
Debt Instrument | |||||
Maximum borrowing capacity | $ 40,000 | ||||
Bank | |||||
Debt Instrument | |||||
Maximum borrowing capacity | $ 75,000 | ||||
Bank | Maximum | |||||
Debt Instrument | |||||
Interest rate (as a percent) | 3.65% |
Notes Payable - Scheduled Matur
Notes Payable - Scheduled Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Scheduled maturities | |
2025 | $ 150,000 |
Thereafter | 200,000 |
Total Notes Payable | $ 350,000 |
Lease - Narrative (Details)
Lease - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 | Dec. 31, 2021 |
Finance leases: | ||
Premises and equipment | $ 7,780 | $ 7,780 |
Accumulated depreciation | (5,948) | (5,358) |
Premises and equipment, net | $ 1,832 | $ 2,422 |
Lease - Components of lease cos
Lease - Components of lease costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of operating lease costs | |||
Operating lease cost | $ 36,950 | $ 38,862 | $ 41,903 |
Less operating lease and sublease income | (2,380) | (1,719) | (1,676) |
Net operating lease cost | 34,570 | 37,143 | 40,227 |
Amortization of ROU assets | 590 | 590 | 590 |
Interest on lease liabilities | 478 | 522 | 561 |
Total finance lease cost | $ 1,068 | $ 1,112 | $ 1,151 |
Lease - Supplemental cash flow
Lease - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | |||
Operating cash flows from operating leases | $ 29,216 | $ 37,239 | $ 31,850 |
Operating cash flows from finance leases | 482 | 522 | 561 |
Financing cash flows from finance leases | 759 | 689 | 636 |
Right-of-use assets obtained in exchange for new lease obligations - Operating leases | $ 24,078 | $ 41,615 | $ 11,723 |
Lease - Lease terms and discoun
Lease - Lease terms and discount rates (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Operating - Weighted Average Remaining Lease Term (Years) | 5 years 8 months 12 days | 5 years 10 months 24 days |
Finance - Weighted Average Remaining Lease Term (Years) | 4 years | 4 years 9 months 18 days |
Operating - Weighted Average Discount Rate | 3.89% | 3.89% |
Finance - Weighted Average Discount Rate | 4.89% | 4.84% |
Lease - Lease maturities (Detai
Lease - Lease maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases maturities | ||
2023 | $ 35,123 | |
2024 | 27,137 | |
2025 | 20,535 | |
2026 | 16,298 | |
2027 | 13,148 | |
Thereafter | 28,765 | |
Total minimum lease payments | 141,006 | |
Less amount representing interest | (14,247) | |
Lease liabilities | 126,759 | $ 130,960 |
Finance Leases maturities: | ||
2023 | 1,280 | |
2024 | 1,163 | |
2025 | 886 | |
2026 | 813 | |
2027 | 448 | |
Thereafter | 149 | |
Total minimum lease payments | 4,739 | |
Less amount representing interest | (1,333) | |
Lease liabilities | $ 3,406 | |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. |
Lease - Operating leases that h
Lease - Operating leases that have not yet commenced (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Leases | |
Additional operating leases that have not yet commenced | $ 1.2 |
Expected to commence | 4 years |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||||||||||
Federal | $ 24,951 | $ 103,396 | $ 97,338 | ||||||||
State | 3,698 | 21,657 | 19,150 | ||||||||
Total | 28,649 | 125,053 | 116,488 | ||||||||
Deferred: | |||||||||||
Federal | 7,377 | (4,454) | 13,325 | ||||||||
State | 807 | (2,623) | 3,258 | ||||||||
Total | 8,184 | (7,077) | 16,583 | ||||||||
Income tax provision (benefit) | $ 9,642 | $ 9,249 | $ 12,127 | $ 5,815 | $ 20,715 | $ 28,257 | $ 31,234 | $ 37,770 | $ 36,833 | $ 117,976 | $ 133,071 |
Statutory Federal income tax rate (as a percent) | 21% | 21% | 21% | ||||||||
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 | $ 32,787 | $ 105,855 | $ 118,629 | ||||||||
Tax effect of: | |||||||||||
Nondeductible expenses | 1,290 | 1,195 | 1,193 | ||||||||
Compensation limitation | 4,106 | 2,862 | 1,111 | ||||||||
State income taxes | 3,559 | 15,037 | 17,702 | ||||||||
Tax-exempt income, net | (1,620) | (2,347) | (1,706) | ||||||||
Minority interest | (1,294) | (2,436) | (4,587) | ||||||||
Other | (1,995) | (2,190) | 729 | ||||||||
Income tax provision (benefit) | $ 9,642 | $ 9,249 | $ 12,127 | $ 5,815 | $ 20,715 | $ 28,257 | $ 31,234 | $ 37,770 | $ 36,833 | $ 117,976 | $ 133,071 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating and built-in-loss carryforward | $ 1,379 | $ 3,599 |
Purchase accounting adjustment - loans | 6,393 | 8,299 |
Allowance for credit losses | 23,610 | 21,784 |
Compensation and benefits | 19,055 | 26,443 |
Legal and other reserves | 6,515 | 9,146 |
Foreclosed property | 338 | 1,182 |
Net unrealized losses on securities and other investments | 40,116 | |
Operating lease liabilities | 29,993 | 32,830 |
Other | 4,973 | 6,168 |
Deferred tax assets | 132,372 | 109,451 |
Deferred tax liabilities: | ||
Premises and equipment | 17,860 | 20,066 |
Intangible assets | 2,360 | 3,325 |
Derivatives | 393 | 6,034 |
Loan servicing | 24,098 | 21,279 |
Operating lease ROU assets | 24,347 | 28,469 |
Other | 5,263 | 123 |
Deferred tax liabilities | 74,321 | 79,296 |
Net deferred tax asset | $ 58,051 | $ 30,155 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Effective income tax rate (as a percent) | 23.60% | 23.40% | 23.60% |
Net operating loss carryforwards | $ 0 | ||
Recognized built-in loss carryforward ("RBIL") | $ 4.2 | ||
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Uncertain tax positions | |||
Unrecognized tax benefits if recognized would favorably impact the effective tax rate | $ 4,200 | $ 3,800 | |
Unrecognized Tax Benefits | |||
Balance, beginning of year | 4,869 | 3,778 | $ 2,808 |
Increases related to tax positions taken during a prior year | 603 | 327 | |
Decreases related to tax positions taken during a prior year | (767) | ||
Increases related to tax positions taken during the current year | 2,077 | 1,249 | 1,017 |
Decreases related to expiration of the statute of limitations | (906) | (761) | (374) |
Balance, end of year | $ 5,273 | $ 4,869 | $ 3,778 |
Employee Benefits (Details)
Employee Benefits (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Jan. 01, 2015 | Nov. 30, 2012 item | Jul. 31, 2020 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2001 USD ($) | |
Employee Benefits | |||||||
Matching contributions | $ 15.9 | $ 18.5 | $ 17.7 | ||||
Operating expense relating to participated discount | 0.8 | 0.8 | |||||
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 | 27.9 | 27.4 | |||||
Income related to the policies | $ 0.5 | $ 0.5 | $ 0.5 | ||||
ESPP | |||||||
Employee Benefits | |||||||
Percentage of shares to be purchased at fair market value | 90% | ||||||
SWS Plan | |||||||
Employee Benefits | |||||||
Deferred compensation plan, matching percentage | 15% | ||||||
Deferred compensation plan, vesting period | 4 years |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transactions | ||
Aggregate remaining lease obligation | $ 141,006,000 | |
Diamond A Financial LP | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 24.40% | |
Plains Capital Bank | ||
Related Party Transactions | ||
Deposits of related parties held | $ 233,100,000 | $ 320,300,000 |
Chief Executive Officer [Member] | Diamond A Financial LP | ||
Related Party Transactions | ||
Ownership interest (as a percent) | 49% | |
Directors Executive Officers and Affiliates | Plains Capital Bank | ||
Related Party Transactions | ||
Loans to related parties | $ 500,000 | 600,000 |
Total principal additions to loans | 0 | |
Lessor | Plains Capital Bank | Lease Agreements [Member] | ||
Related Party Transactions | ||
Future minimum payments due annually through 2028 | 600,000 | |
Aggregate remaining lease obligation | 3,500,000 | |
Related Party Company | Plains Capital Bank | ||
Related Party Transactions | ||
Loan Purchases | $ 100,000 | $ 300,000 |
Related Party Transactions - Hi
Related Party Transactions - Hilltop Plaza Investment (Details) $ in Millions | 1 Months Ended |
Jul. 31, 2018 USD ($) a item tenant | |
Hilltop Investments I, LLC | |
Related Party Transactions | |
Investment contribution | $ 19.3 |
Diamond Ground, LLC | |
Related Party Transactions | |
Investment contribution | $ 19.3 |
Hillcrest Land LLC | |
Related Party Transactions | |
Acres of land | a | 1.7 |
Payments to acquire land | $ 38.5 |
Primary Beneficiary | item | 0 |
Ground lease term | 99 years |
Number of tenants | tenant | 3 |
Hillcrest Land LLC | Park Plaza | |
Related Party Transactions | |
Leasehold interest | 50% |
Hillcrest Land LLC | HTH Hillcrest Project LLC | |
Related Party Transactions | |
Leasehold interest | 25% |
Hillcrest Land LLC | Diamond Hillcrest | |
Related Party Transactions | |
Leasehold interest | 25% |
Hilltop Plaza | Hilltop | |
Related Party Transactions | |
Term of contract | 129 months |
Hilltop Plaza | Plains Capital Bank | |
Related Party Transactions | |
Term of contract | 129 months |
Hilltop Plaza | Park Plaza | |
Related Party Transactions | |
Ownership interest (as a percent) | 50% |
Hilltop Plaza | HTH Hillcrest Project LLC | |
Related Party Transactions | |
Ownership interest (as a percent) | 25% |
Hilltop Plaza | Diamond Hillcrest | |
Related Party Transactions | |
Ownership interest (as a percent) | 25% |
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% |
Commitments and Contingencies -
Commitments and Contingencies - Legal (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Jun. 08, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retention Agreement | Chief Executive Officer [Member] | |||||
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 period | $ 31,407,000 | $ 30,085,000 | $ 32,144,000 | ||
Claims made | 56,579,000 | 26,290,000 | 17,429,000 | ||
Claims resolved with no payment | (14,499,000) | (11,690,000) | (7,778,000) | ||
Repurchases | (42,243,000) | (11,934,000) | (11,588,000) | ||
Indemnification payments | (1,344,000) | (122,000) | |||
Balance, end of period | $ 31,244,000 | 31,244,000 | 31,407,000 | 30,085,000 | |
Reserve for Indemnification Liability: | |||||
Total | 31,244,000 | 31,244,000 | 31,407,000 | 30,085,000 | |
Indemnification Agreement | |||||
Commitments and Contingencies | |||||
Provision for indemnification losses | 1,500,000 | 10,000,000 | 11,200,000 | ||
Roll-forward of claims activity for loans put-back to the mortgage origination segment | |||||
Balance, beginning of period | 27,424,000 | 21,531,000 | 11,776,000 | ||
Additions for new sales | 2,532,000 | 10,966,000 | 9,991,000 | ||
Repurchases | (7,941,000) | (3,559,000) | (768,000) | ||
Early payment defaults | (423,000) | (189,000) | (624,000) | ||
Indemnification payments | (366,000) | (39,000) | |||
Change in reserves for loans sold in prior years | (1,064,000) | (959,000) | 1,195,000 | ||
Balance, end of period | 20,528,000 | 20,528,000 | 27,424,000 | 21,531,000 | |
Reserve for Indemnification Liability: | |||||
Specific claims | 627,000 | 627,000 | 345,000 | ||
Incurred but not reported claims | 19,901,000 | 19,901,000 | 27,079,000 | ||
Total | 20,528,000 | 20,528,000 | 27,424,000 | $ 21,531,000 | |
Loss on Subordinated Bonds | |||||
Commitments and Contingencies | |||||
Damages sought | $ 13,000,000 | ||||
Plains Capital 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 | $ 0 | $ 0 | $ 0 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Commitments to Extend Credit | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 2,500 |
Standby Letters of Credit [Member] | |
Financial Instruments with Off-Balance Sheet Risk | |
Outstanding commitments | $ 75.8 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock based compensation | |||
Compensation expense | $ 15.6 | $ 17.5 | $ 14.6 |
2012. | |||
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) | 2,469,241 | ||
2020 Plan | Director | |||
Stock based compensation | |||
Common shares granted to members of board of directors as compensation for director services | 21,545 | 17,330 | 31,222 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - 2020 Plan - RSUs - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of shares outstanding | |||
Balance at the beginning of the period ( in shares) | 1,869 | 1,833 | 1,437 |
Granted (in shares) | 551 | 532 | 777 |
Vested/Released (in shares) | (732) | (475) | (350) |
Forfeited (in shares) | (140) | (21) | (31) |
Balance at the end of the period ( in shares) | 1,548 | 1,869 | 1,833 |
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 23.16 | $ 21.48 | $ 22.64 |
Granted (in dollars per share) | 33.22 | 32.93 | 21.79 |
Vested/Released (in dollars per share) | 20 | 27.63 | 26.83 |
Forfeited (in dollars per share) | 24.75 | 23.29 | 22.38 |
Balance at the end of the period (in dollars per share) | $ 28.09 | $ 23.16 | $ 21.48 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - 2020 Plan - RSUs - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock based compensation | |||
Vested/Released number of shares withheld to satisfy employee statutory tax obligations (in shares) | 302,718 | 302,718 | 302,718 |
Number of shares awarded (in shares) | 551,000 | 532,000 | 777,000 |
Number of awards subject to time-based vesting (in shares) | 1,137,618 | ||
Number of awards vesting upon achievement of performance goals (in shares) | 408,458 | ||
Performance period | 3 years | ||
Vesting period | 3 years | ||
Transfer restrictions period | 1 year | ||
Unrecognized compensation expense | $ 17.8 | ||
Weighted average period for unrecognized compensation expense (in years) | 1 year 18 days | ||
Certain Executives and Key Employees | |||
Stock based compensation | |||
Number of shares awarded (in shares) | 476,560 | ||
Number of awards subject to time-based vesting (in shares) | 326,127 | ||
Number of awards vesting upon achievement of performance goals (in shares) | 135,558 | ||
Performance period | 3 years | ||
Vesting period | 3 years |
Regulatory Matters - Minimum Ca
Regulatory Matters - Minimum Capital Requirements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Regulatory matters | ||
Regulatory capital effects from CECL transitionary period | 5 years | |
Plains Capital Bank | ||
Tier 1 capital (to average assets) | ||
Actual Amount | $ 1,405,164 | $ 1,469,695 |
Actual Ratio | 0.1026 | 0.1020 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.04% | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.050 | |
Common equity Tier 1 capital (to risk weighted assets) | ||
Actual Amount | $ 1,405,164 | $ 1,469,695 |
Actual Ratio | 0.1498 | 0.1600 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.07% | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.065% | |
Tier 1 capital (to risk-weighted assets) | ||
Actual Amount | $ 1,405,164 | $ 1,469,695 |
Actual Ratio | 0.1498 | 0.1600 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.085% | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.080 | |
Total capital (to risk-weighted assets) | ||
Actual Amount | $ 1,492,576 | $ 1,540,100 |
Actual Ratio | 0.1591 | 0.1677 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in ratio | 0.105 | |
To Be Well Capitalized Minimum Capital Requirements, Ratio | 0.100 | |
Hilltop | ||
Tier 1 capital (to average assets) | ||
Actual Amount | $ 1,900,701 | $ 2,262,356 |
Actual Ratio | 0.1147 | 0.1258 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.04% | |
Common equity Tier 1 capital (to risk weighted assets) | ||
Actual Amount | $ 1,900,701 | $ 2,262,356 |
Actual Ratio | 0.1823 | 0.2122 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.07% | |
Tier 1 capital (to risk-weighted assets) | ||
Actual Amount | $ 1,900,701 | $ 2,262,356 |
Actual Ratio | 0.1823 | 0.2122 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in, ratio | 0.085% | |
Total capital (to risk-weighted assets) | ||
Actual Amount | $ 2,187,652 | $ 2,532,008 |
Actual Ratio | 0.2098 | 0.2375 |
Minimum Capital Requirement Including Conservation Buffer fully phased-in ratio | 0.105 |
Regulatory Matters - Reconcilia
Regulatory Matters - Reconciliation (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||
Total equity capital | $ 2,036,924 | $ 2,522,668 |
Plains Capital Bank | ||
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||
Total equity capital | 1,533,492 | 1,721,780 |
Add: | ||
Net unrealized holding losses (gains) on securities available for sale and held in trust | 133,531 | 10,219 |
CECL transition adjustment | 5,898 | 7,864 |
Deduct: | ||
Goodwill and other disallowed intangible assets | (267,757) | (270,168) |
Common equity Tier 1 capital (as defined) | 1,405,164 | 1,469,695 |
Tier 1 capital (as defined) | 1,405,164 | 1,469,695 |
Add: Allowable Tier 2 capital | ||
Allowance for credit losses, including unfunded commitments | 102,991 | 91,177 |
Deduct: | ||
Additional Tier 2 capital deduction | (15,579) | (20,772) |
Total capital (as defined) | 1,492,576 | 1,540,100 |
Hilltop | ||
Reconciliation of equity capital to Tier 1 and total capital (as defined) | ||
Total equity capital | 2,036,924 | 2,522,668 |
Add: | ||
Net unrealized holding losses (gains) on securities available for sale and held in trust | 133,531 | 10,219 |
CECL transition adjustment | 6,594 | 8,792 |
Deduct: | ||
Goodwill and other disallowed intangible assets | (276,348) | (279,323) |
Common equity Tier 1 capital (as defined) | 1,900,701 | 2,262,356 |
Tier 1 capital (as defined) | 1,900,701 | 2,262,356 |
Add: Allowable Tier 2 capital | ||
Allowance for credit losses, including unfunded commitments | 103,226 | 91,352 |
Capital instruments | 200,000 | 200,000 |
Deduct: | ||
Additional Tier 2 capital deduction | (16,275) | (21,700) |
Total capital (as defined) | $ 2,187,652 | $ 2,532,008 |
Regulatory Matters - Net Capita
Regulatory Matters - Net Capital Position, Broker-Dealers (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 67,737 | $ 221,740 | $ 290,357 |
Hilltop Securities | |||
Net Capital | |||
Net capital | 261,665 | ||
Less: required net capital | 8,205 | ||
Excess net capital | $ 253,460 | ||
Net capital as a percentage of aggregate debit items | 63.80% | ||
Net capital in excess of 5% aggregate debt items | $ 241,151 | ||
Momentum Independent Network | |||
Net Capital | |||
Net capital | 3,672 | ||
Less: required net capital | 250 | ||
Excess net capital | 3,422 | ||
Hilltop Broker-Dealers | |||
Net Capital | |||
Amount required to be segregated in cash and securities for the benefit of customers | $ 67,700 | $ 221,700 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||||||||||||||
Jan. 26, 2023 | May 27, 2022 | May 02, 2022 | Nov. 17, 2020 | Sep. 23, 2020 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Apr. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2023 | Jan. 31, 2022 | Oct. 31, 2021 | Jul. 31, 2021 | Jan. 31, 2020 | |
Stock repurchase program | ||||||||||||||||||||||
Cash dividends declared per common share | $ 0.16 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.60 | $ 0.48 | $ 0.36 | ||||||||||
Cash dividends paid | $ 43,000 | $ 39,000 | $ 32,500 | |||||||||||||||||||
Earnings available for dividend payments without regulatory approval | $ 146,700 | 146,700 | ||||||||||||||||||||
Payments to repurchase shares | 442,336 | $ 123,631 | $ 208,664 | |||||||||||||||||||
Stock Repurchase Agreement | ||||||||||||||||||||||
Stock repurchase program | ||||||||||||||||||||||
Repurchase common stock authorized amount | $ 75,000 | $ 75,000 | $ 75,000 | $ 100,000 | $ 75,000 | |||||||||||||||||
Repurchase common stock authorized increase amount | $ 50,000 | $ 75,000 | ||||||||||||||||||||
Repurchase of common stock (in shares) | 720,901 | 3,632,482 | ||||||||||||||||||||
Average price (per share) | $ 21.13 | $ 34.01 | ||||||||||||||||||||
Payments to repurchase shares | $ 15,200 | $ 123,600 | ||||||||||||||||||||
Shares available for repurchase | 0 | 0 | ||||||||||||||||||||
Tender Offer Agreement | ||||||||||||||||||||||
Stock repurchase program | ||||||||||||||||||||||
Aggregate cash purchase price | $ 400,000 | $ 350,000 | ||||||||||||||||||||
Percentage of outstanding shares | 2% | |||||||||||||||||||||
Repurchase of common stock (in shares) | 14,868,469 | 8,058,947 | ||||||||||||||||||||
Average price (per share) | $ 29.75 | $ 24 | ||||||||||||||||||||
Payments to repurchase shares | $ 442,300 | $ 193,400 | ||||||||||||||||||||
Maximum | Stock Repurchase Agreement | ||||||||||||||||||||||
Stock repurchase program | ||||||||||||||||||||||
Repurchase common stock authorized amount | $ 200,000 | $ 150,000 |
Other Noninterest Income and _3
Other Noninterest Income and Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other noninterest income: | |||
Net gains from Hilltop Broker-Dealer structured product and derivative activities | $ 37,407 | $ 48,816 | $ 81,111 |
Net gains from trading securities portfolio | 23,666 | 26,353 | 121,983 |
Service charges on depositor accounts | 16,962 | 18,081 | 14,845 |
Trust fees | 13,975 | 10,998 | 9,804 |
Other | 21,947 | 23,786 | 15,862 |
Other noninterest income | 113,957 | 128,034 | 243,605 |
Other noninterest expense: | |||
Software and information technology | 64,979 | 68,105 | 56,872 |
Brokerage commissions and fees | 27,597 | 25,826 | 24,113 |
Mortgage origination and servicing | 25,311 | 35,421 | 27,808 |
Unreimbursed loan closing costs | 13,371 | 20,458 | 21,696 |
Business development | 12,550 | 11,998 | 10,190 |
Travel, meals and entertainment | 9,959 | 7,646 | 4,804 |
Amortization of intangible assets | 3,967 | 5,081 | 6,301 |
Funding fees | 4,421 | 4,768 | 4,461 |
Office supplies | 3,319 | 3,469 | 3,953 |
Other | 42,227 | 42,519 | 64,560 |
Other noninterest expense | $ 207,701 | $ 225,291 | $ 224,758 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Bank And PrimeLending [Member] | Other Liabilities | |||
Derivative financial instruments | |||
Cash collateral advanced to offset net derivative assets | $ 65,000 | $ 3,900 | |
Not Designated as Hedging Instrument | Prime Lending | |||
Derivative financial instruments | |||
Increase (decrease) in the fair value of the derivatives | (21,282) | (22,170) | $ 33,714 |
Not Designated as Hedging Instrument | Hilltop Broker-Dealers | |||
Derivative financial instruments | |||
Increase (decrease) in the fair value of the derivatives | 16,405 | (19,884) | 3,969 |
Not Designated as Hedging Instrument | Plains Capital Bank | |||
Derivative financial instruments | |||
Increase (decrease) in the fair value of the derivatives | 46 | 43 | $ (7) |
Not Designated as Hedging Instrument | PrimeLending and Hilltop Broker-Dealers | Other Assets | |||
Derivative financial instruments | |||
Cash collateral advanced to offset net derivative liability | 10,600 | 4,200 | |
Interest Rate Lock Commitments | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 506,278 | 1,283,152 | |
Estimated Fair Value | 1,767 | 25,489 | |
Commitments to Purchase MBSs | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 819,681 | 1,575,264 | |
Estimated Fair Value | 2,435 | (674) | |
Commitments to Sell MBSs | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 2,188,964 | 3,314,173 | |
Estimated Fair Value | 10,711 | (355) | |
Commitments to Sell MBSs | Not Designated as Hedging Instrument | Prime Lending | Other Assets | |||
Derivative financial instruments | |||
Cash collateral advanced to offset net derivative liability | 8,400 | 100 | |
Interest rate swaps | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 35,784 | 68,413 | |
Estimated Fair Value | (1,421) | (1,949) | |
Interest rate swaps | Designated as hedges | |||
Derivative financial instruments | |||
Available for sale securities and loans held for investment | 322,500 | 218,000 | |
Interest rate swaps | Cash Flow Hedging | Designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 430,000 | 190,000 | |
Estimated Fair Value | 21,703 | 603 | |
Interest rate swaps | Fair Value Hedging | Designated as hedges | |||
Derivative financial instruments | |||
Notional Amount | 365,323 | 221,232 | |
Estimated Fair Value | 42,828 | 3,207 | |
Cumulative adjustment in available for sale securities and loans held for investment | 42,800 | 3,200 | |
U.S. Treasury bond futures and options | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 395,500 | 247,800 | |
Estimated Fair Value | (449) | ||
Eurodollar and other futures | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 2,612,000 | 2,061,800 | |
Credit default swaps | Not Designated as Hedging Instrument | |||
Derivative financial instruments | |||
Notional Amount | 3,000 | 7,000 | |
Estimated Fair Value | $ (2) | $ (15) |
Balance Sheet Offsetting - Asse
Balance Sheet Offsetting - Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Reverse repurchase agreements: | ||
Net Amounts of Assets Presented in the Balance Sheet | $ 118,070 | $ 118,262 |
Total | ||
Gross Amounts of Recognized Assets | 1,212,123 | 1,639,589 |
Gross Amounts Offset in the Balance Sheet | (3,916) | (1,773) |
Net Amounts of Assets Presented in the Balance Sheet | 1,208,207 | 1,637,816 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,089,776) | (1,564,596) |
Cash Collateral Pledged | (64,630) | |
Net Amount | 53,801 | 73,220 |
Institutional Counterparties | ||
Securities borrowed: | ||
Gross Amounts of Recognized Assets | 1,012,573 | 1,518,372 |
Net Amounts of Assets Presented in the Balance Sheet | 1,012,573 | 1,518,372 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (964,517) | (1,445,590) |
Net Amount | 48,056 | 72,782 |
Interest rate swaps | Institutional Counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 64,729 | |
Net Amounts of Assets Presented in the Balance Sheet | 64,729 | |
Gross Amounts Not Offset in the Balance Sheet | ||
Cash Collateral Pledged | (64,630) | |
Net Amounts of Assets Presented in the Balance Sheet | 99 | |
Reverse repurchase agreements | Institutional Counterparties | ||
Reverse repurchase agreements: | ||
Gross Amounts of Recognized Assets | 118,070 | 118,262 |
Net Amounts of Assets Presented in the Balance Sheet | 118,070 | 118,262 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (115,302) | (118,262) |
Net Amount | 2,768 | 0 |
Forward MBS Derivatives | Institutional Counterparties | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 16,694 | 2,955 |
Gross Amounts Offset in the Balance Sheet | (3,410) | (1,773) |
Net Amounts of Assets Presented in the Balance Sheet | 13,284 | 1,182 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (9,957) | (744) |
Net Amounts of Assets Presented in the Balance Sheet | 3,327 | $ 438 |
Treasury Futures And Option Derivatives | ||
Derivatives: | ||
Gross Amounts of Recognized Assets | 57 | |
Gross Amounts Offset in the Balance Sheet | (506) | |
Net Amounts of Assets Presented in the Balance Sheet | (449) | |
Gross Amounts Not Offset in the Balance Sheet | ||
Net Amounts of Assets Presented in the Balance Sheet | $ (449) |
Balance Sheet Offsetting - Liab
Balance Sheet Offsetting - Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Total | ||
Gross Amounts of Recognized Liabilities | $ 1,215,307 | $ 1,627,854 |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,215,307 | 1,627,854 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,192,512) | (1,569,729) |
Net Amount | 22,795 | 58,125 |
Institutional Counterparties | ||
Securities loaned: | ||
Gross Amounts of Recognized Liabilities | 916,570 | 1,432,196 |
Net Amounts of Liabilities Presented in the Balance Sheets | 916,570 | 1,432,196 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (871,037) | (1,359,850) |
Net Amount | 45,533 | 72,346 |
Institutional Counterparties | Interest rate swaps | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 1,619 | 1,949 |
Net Amounts of Liabilities Presented in the Balance Sheet | 1,619 | 1,949 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (1,438) | (1,919) |
Net Amount | 181 | 30 |
Institutional Counterparties | Repurchase agreements | ||
Repurchase agreements: | ||
Gross Amounts of Recognized Liabilities | 296,978 | 191,483 |
Net Amounts of Liabilities Presented in the Balance Sheet | 296,978 | 191,483 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (319,897) | (205,734) |
Net Amount | (22,919) | (14,251) |
Institutional Counterparties | Forward MBS Derivatives | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 138 | 2,211 |
Net Amounts of Liabilities Presented in the Balance Sheet | 138 | 2,211 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (138) | (2,211) |
Net Amount | 0 | 0 |
Institutional Counterparties | Credit default swaps | ||
Derivatives: | ||
Gross Amounts of Recognized Liabilities | 2 | 15 |
Net Amounts of Liabilities Presented in the Balance Sheet | 2 | 15 |
Gross Amounts Not Offset in the Balance Sheet | ||
Financial Instruments | (2) | (15) |
Net Amount | $ 0 | $ 0 |
Balance Sheet Offsetting - Secu
Balance Sheet Offsetting - Secured Borrowings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Number of repurchase-to-maturity transactions outstanding | item | 0 | 0 |
Total borrowings | $ 1,213,548 | $ 1,623,679 |
Gross amount of recognized liabilities for repurchase agreements and securities lending in offsetting disclosure above | 1,213,548 | 1,623,679 |
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 | $ 1,047,186 | 1,525,847 |
Maturity up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 2,539 | |
Maturity 30 to 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 141,461 | 86,357 |
Maturity over 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Total borrowings | 22,362 | 11,475 |
Assets-backed securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 296,978 | 191,483 |
Assets-backed securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 130,616 | 93,651 |
Assets-backed securities | Maturity up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 2,539 | |
Assets-backed securities | Maturity 30 to 90 Days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 141,461 | 86,357 |
Assets-backed securities | Maturity over 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Repurchase agreements transactions | 22,362 | 11,475 |
Corporate Debt Securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 113 | 113 |
Corporate Debt Securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 113 | 113 |
Equity Securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | 916,457 | 1,432,083 |
Equity Securities | Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings | ||
Securities lending transactions | $ 916,457 | $ 1,432,083 |
Broker-Dealer and Clearing Or_3
Broker-Dealer and Clearing Organization Receivables and Payables (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables: | ||
Securities borrowed | $ 1,012,573 | $ 1,518,372 |
Securities failed to deliver | 11,350 | 5,664 |
Trades in process of settlement | 3,476 | 144,773 |
Other | 10,656 | 4,137 |
Total receivables | 1,038,055 | 1,672,946 |
Payables: | ||
Securities loaned | 916,570 | 1,432,196 |
Correspondents | 22,760 | 20,571 |
Securities failed to receive | 20,167 | 18,808 |
Other | 6,973 | 5,725 |
Total Payables | $ 966,470 | $ 1,477,300 |
Segment and Related Informati_3
Segment and Related Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) segment item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Information about the revenues, operating results, goodwill and assets | |||||||||||
Number of primary business units | item | 2 | ||||||||||
Number of reportable segments | segment | 3 | ||||||||||
Net interest income (expense) | $ 123,442 | $ 123,486 | $ 112,056 | $ 99,991 | $ 104,294 | $ 105,090 | $ 107,916 | $ 105,682 | $ 458,975 | $ 422,982 | $ 424,166 |
Provision for (reversal of) credit losses | 3,638 | (780) | 5,336 | 115 | (18,565) | (5,819) | (28,720) | (5,109) | 8,309 | (58,213) | 96,491 |
Noninterest income | 169,784 | 206,975 | 239,273 | 216,428 | 284,846 | 367,945 | 339,899 | 417,585 | 832,460 | 1,410,275 | 1,690,480 |
Noninterest expense | 253,368 | 288,738 | 298,543 | 286,350 | 322,194 | 355,174 | 343,368 | 366,662 | 1,126,999 | 1,387,398 | 1,453,803 |
Income from continuing operations before income taxes | 36,220 | $ 42,503 | $ 47,450 | $ 29,954 | 85,511 | $ 123,680 | $ 133,167 | $ 161,714 | 156,127 | 504,072 | 564,352 |
Income from discontinued operations before taxes | 0 | 0 | 2,100 | ||||||||
Goodwill | 267,447 | 267,447 | 267,447 | 267,447 | |||||||
Total assets | 16,259,282 | 18,689,080 | 16,259,282 | 18,689,080 | |||||||
Operating Segments | Banking | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 413,603 | 406,524 | 390,871 | ||||||||
Provision for (reversal of) credit losses | 8,250 | (58,175) | 96,326 | ||||||||
Noninterest income | 49,307 | 45,113 | 41,376 | ||||||||
Noninterest expense | 235,190 | 226,915 | 232,447 | ||||||||
Income from continuing operations before income taxes | 219,470 | 282,897 | 103,474 | ||||||||
Goodwill | 247,368 | 247,368 | 247,368 | 247,368 | |||||||
Total assets | 13,420,110 | 14,944,249 | 13,420,110 | 14,944,249 | |||||||
Operating Segments | Broker-Dealer | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 51,597 | 43,296 | 39,912 | ||||||||
Provision for (reversal of) credit losses | 59 | (38) | 165 | ||||||||
Noninterest income | 341,943 | 381,125 | 491,355 | ||||||||
Noninterest expense | 355,713 | 380,798 | 415,463 | ||||||||
Income from continuing operations before income taxes | 37,768 | 43,661 | 115,639 | ||||||||
Goodwill | 7,008 | 7,008 | 7,008 | 7,008 | |||||||
Total assets | 2,672,709 | 3,673,346 | 2,672,709 | 3,673,346 | |||||||
Operating Segments | Mortgage Origination Segment | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | (10,529) | (20,400) | (10,489) | ||||||||
Noninterest income | 452,915 | 986,990 | 1,172,450 | ||||||||
Noninterest expense | 478,904 | 731,056 | 753,917 | ||||||||
Income from continuing operations before income taxes | (36,518) | 235,534 | 408,044 | ||||||||
Goodwill | 13,071 | 13,071 | 13,071 | 13,071 | |||||||
Total assets | 1,249,284 | 2,207,822 | 1,249,284 | 2,207,822 | |||||||
Corporate | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | (13,135) | (17,239) | (14,192) | ||||||||
Noninterest income | 7,525 | 9,133 | 3,945 | ||||||||
Noninterest expense | 59,030 | 50,507 | 53,040 | ||||||||
Income from continuing operations before income taxes | (64,640) | (58,613) | (63,287) | ||||||||
Total assets | 2,465,513 | 2,940,670 | 2,465,513 | 2,940,670 | |||||||
All Other and Eliminations | |||||||||||
Information about the revenues, operating results, goodwill and assets | |||||||||||
Net interest income (expense) | 17,439 | 10,801 | 18,064 | ||||||||
Noninterest income | (19,230) | (12,086) | (18,646) | ||||||||
Noninterest expense | (1,838) | (1,878) | (1,064) | ||||||||
Income from continuing operations before income taxes | 47 | 593 | $ 482 | ||||||||
Total assets | $ (3,548,334) | $ (5,077,007) | $ (3,548,334) | $ (5,077,007) |
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, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic earnings per share: | |||||||||||
Income from continuing operations | $ 113,134 | $ 374,495 | $ 409,440 | ||||||||
Income from discontinued operations | 38,396 | ||||||||||
Income attributable to Hilltop | $ 25,556 | $ 32,068 | $ 33,260 | $ 22,250 | $ 62,184 | $ 92,906 | $ 99,060 | $ 120,345 | $ 113,134 | $ 374,495 | $ 447,836 |
Weighted average shares outstanding - basic | 70,434 | 80,708 | 89,280 | ||||||||
Income from continuing operations (in dollars per share) | $ 1.61 | $ 4.64 | $ 4.59 | ||||||||
Income from discontinued operations (in dollars per share) | 0.43 | ||||||||||
Basic earnings per common share (in dollars per share) | $ 0.40 | $ 0.50 | $ 0.45 | $ 0.28 | $ 0.79 | $ 1.16 | $ 1.21 | $ 1.46 | $ 1.61 | $ 4.64 | $ 5.02 |
Diluted earnings per share: | |||||||||||
Income from continuing operations | $ 113,134 | $ 374,495 | $ 409,440 | ||||||||
Income from discontinued operations | 38,396 | ||||||||||
Income attributable to Hilltop | $ 25,556 | $ 32,068 | $ 33,260 | $ 22,250 | $ 62,184 | $ 92,906 | $ 99,060 | $ 120,345 | $ 113,134 | $ 374,495 | $ 447,836 |
Weighted average shares outstanding - basic | 70,434 | 80,708 | 89,280 | ||||||||
Effect of potentially dilutive securities (in shares) | 192 | 465 | 24 | ||||||||
Weighted average shares outstanding - diluted | 70,626 | 81,173 | 89,304 | ||||||||
Income from continuing operations (in dollars per share) | $ 1.60 | $ 4.61 | $ 4.58 | ||||||||
Income from discontinued operations (in dollars per share) | 0.43 | ||||||||||
Diluted earnings per common share (in dollars per share) | $ 0.39 | $ 0.50 | $ 0.45 | $ 0.28 | $ 0.78 | $ 1.15 | $ 1.21 | $ 1.46 | $ 1.60 | $ 4.61 | $ 5.01 |
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, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Interest expense | $ 56,532 | $ 32,986 | $ 23,077 | $ 19,546 | $ 18,760 | $ 20,088 | $ 26,902 | $ 41,241 | $ 132,141 | $ 106,991 | $ 122,329 |
Income tax benefit | 9,642 | 9,249 | 12,127 | 5,815 | 20,715 | 28,257 | 31,234 | 37,770 | 36,833 | 117,976 | 133,071 |
Net income | $ 26,578 | $ 33,254 | $ 35,323 | $ 24,139 | $ 64,796 | $ 95,423 | $ 101,933 | $ 123,944 | 119,294 | 386,096 | 469,677 |
Other comprehensive income (loss), net | (123,312) | (27,982) | 6,344 | ||||||||
Comprehensive income (loss) | (4,018) | 358,114 | 476,021 | ||||||||
Parent Company | Reportable Legal Entities | |||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||
Dividends from bank subsidiaries | 205,000 | 295,000 | 249,771 | ||||||||
Dividends from nonbank subsidiaries | 10,732 | 81,675 | 56,150 | ||||||||
Investment income | 6,914 | 4,322 | 4,102 | ||||||||
Interest expense | 20,049 | 21,561 | 18,294 | ||||||||
Other income | 7,525 | 9,070 | 45,887 | ||||||||
General and administrative expense | 59,030 | 50,507 | 58,130 | ||||||||
Income before income taxes and equity in undistributed earnings of subsidiaries activity | 151,092 | 317,999 | 279,486 | ||||||||
Income tax benefit | (13,124) | (14,065) | (13,897) | ||||||||
Equity in undistributed earnings of subsidiaries | (44,922) | 54,032 | 176,294 | ||||||||
Net income | 119,294 | 386,096 | 469,677 | ||||||||
Other comprehensive income (loss), net | (123,312) | (27,982) | 6,344 | ||||||||
Comprehensive income (loss) | $ (4,018) | $ 358,114 | $ 476,021 |
Financial Statements of Paren_3
Financial Statements of Parent - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | |||
Loans held for investment, net of unearned income | $ 8,092,673 | $ 7,879,904 | |
Investment in subsidiaries: | |||
Other assets | 518,899 | 452,880 | |
Total assets | 16,259,282 | 18,689,080 | |
Liabilities and Stockholders' Equity | |||
Notes payable | 346,654 | 387,904 | |
Stockholders' equity | 2,036,924 | 2,522,668 | |
Total liabilities and stockholders' equity | 16,259,282 | 18,689,080 | |
Parent Company | Reportable Legal Entities | |||
Assets | |||
Cash and cash equivalents | 205,887 | 531,260 | $ 478,826 |
Loans held for investment, net of unearned income | 9,181 | ||
Investment in subsidiaries: | |||
Bank subsidiaries | 1,533,491 | 1,721,780 | 1,654,249 |
Nonbank subsidiaries | 427,516 | 409,835 | 453,847 |
Other assets | 289,438 | 277,795 | 236,452 |
Total assets | 2,465,513 | 2,940,670 | 2,823,374 |
Liabilities and Stockholders' Equity | |||
Accounts payable and accrued expenses | 34,569 | 25,762 | 64,635 |
Notes payable | 370,823 | 369,618 | 412,764 |
Stockholders' equity | 2,060,121 | 2,545,290 | 2,345,975 |
Total liabilities and stockholders' equity | $ 2,465,513 | $ 2,940,670 | $ 2,823,374 |
Financial Statements of Paren_4
Financial Statements of Parent - Cash flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities: | |||||||||||
Net income | $ 26,578 | $ 33,254 | $ 35,323 | $ 24,139 | $ 64,796 | $ 95,423 | $ 101,933 | $ 123,944 | $ 119,294 | $ 386,096 | $ 469,677 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Deferred income taxes | 8,184 | (7,077) | 16,583 | ||||||||
Net cash provided by operating activities | 1,189,448 | 765,622 | 280,436 | ||||||||
Investing Activities: | |||||||||||
Purchases of premises and equipment and other assets | (9,798) | (24,751) | (37,746) | ||||||||
Net cash used in investing activities | (877,302) | (553,274) | (827,666) | ||||||||
Financing Activities: | |||||||||||
Payments to repurchase common stock | (442,336) | (123,631) | (208,664) | ||||||||
Proceeds from issuance of notes payable | 821,570 | 976,119 | 1,451,249 | ||||||||
Dividends paid on common stock | (42,963) | (38,978) | (32,524) | ||||||||
Net cash contributed from (to) noncontrolling interest | (6,090) | (11,774) | (20,890) | ||||||||
Other, net | (5,860) | (3,397) | (1,724) | ||||||||
Net cash provided by (used in) financing activities | (1,709,510) | 1,479,612 | 1,257,744 | ||||||||
Net change in cash, cash equivalents and restricted cash | (1,397,364) | 1,691,960 | 710,514 | ||||||||
Cash, cash equivalents and restricted cash, beginning of year | 3,045,263 | 1,353,303 | 3,045,263 | 1,353,303 | 642,789 | ||||||
Cash, cash equivalents and restricted cash, end of year | 1,647,899 | 3,045,263 | 1,647,899 | 3,045,263 | 1,353,303 | ||||||
Parent Company | Reportable Legal Entities | |||||||||||
Operating Activities: | |||||||||||
Net income | 119,294 | 386,096 | 469,677 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Equity in undistributed earnings of subsidiaries | 44,922 | (54,032) | (176,294) | ||||||||
Net realized gains on equity investments | (926) | ||||||||||
Net realized gains on disposal of discontinued operations | (41,901) | ||||||||||
Deferred income taxes | 1,064 | (3,049) | 4,432 | ||||||||
Other, net | (981) | 14,725 | 37,465 | ||||||||
Net cash provided by operating activities | 164,299 | 342,814 | 293,379 | ||||||||
Investing Activities: | |||||||||||
Advancement to nonbank subsidiaries | (75,000) | ||||||||||
Repayment of advances to/investments in nonbank subsidiaries | 15,000 | 5,762 | |||||||||
Purchases of equity securities | (20,006) | (29,365) | |||||||||
Purchases of premises and equipment and other assets | (1,015) | (2,154) | (12,547) | ||||||||
Proceeds from sales/disposition of equity investments | 4,000 | 12,292 | |||||||||
Proceeds from sale of discontinued operations | 154,963 | ||||||||||
Net cash used in investing activities | (2,021) | (59,100) | 113,051 | ||||||||
Financing Activities: | |||||||||||
Payments to repurchase common stock | (442,336) | (123,631) | (208,664) | ||||||||
Proceeds from issuance of notes payable | 196,657 | ||||||||||
Payments on junior subordinated debentures | (67,012) | ||||||||||
Dividends paid on common stock | (42,963) | (38,978) | (32,524) | ||||||||
Net cash contributed from (to) noncontrolling interest | (918) | (909) | 825 | ||||||||
Other, net | (1,434) | (750) | (369) | ||||||||
Net cash provided by (used in) financing activities | (487,651) | (231,280) | (44,075) | ||||||||
Net change in cash, cash equivalents and restricted cash | (325,373) | 52,434 | 362,355 | ||||||||
Cash, cash equivalents and restricted cash, beginning of year | $ 531,260 | $ 478,826 | 531,260 | 478,826 | 116,471 | ||||||
Cash, cash equivalents and restricted cash, end of year | $ 205,887 | $ 531,260 | $ 205,887 | $ 531,260 | $ 478,826 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 26, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Selected Quarterly Financial Information (Unaudited) | ||||||||||||
Interest income | $ 179,974 | $ 156,472 | $ 135,133 | $ 119,537 | $ 123,054 | $ 125,178 | $ 134,818 | $ 146,923 | $ 591,116 | $ 529,973 | $ 546,495 | |
Interest expense | 56,532 | 32,986 | 23,077 | 19,546 | 18,760 | 20,088 | 26,902 | 41,241 | 132,141 | 106,991 | 122,329 | |
Net interest income | 123,442 | 123,486 | 112,056 | 99,991 | 104,294 | 105,090 | 107,916 | 105,682 | 458,975 | 422,982 | 424,166 | |
Provision for (reversal of) credit losses | 3,638 | (780) | 5,336 | 115 | (18,565) | (5,819) | (28,720) | (5,109) | 8,309 | (58,213) | 96,491 | |
Noninterest income | 169,784 | 206,975 | 239,273 | 216,428 | 284,846 | 367,945 | 339,899 | 417,585 | 832,460 | 1,410,275 | 1,690,480 | |
Noninterest expense | 253,368 | 288,738 | 298,543 | 286,350 | 322,194 | 355,174 | 343,368 | 366,662 | 1,126,999 | 1,387,398 | 1,453,803 | |
Income from continuing operations before income taxes | 36,220 | 42,503 | 47,450 | 29,954 | 85,511 | 123,680 | 133,167 | 161,714 | 156,127 | 504,072 | 564,352 | |
Income tax expense | 9,642 | 9,249 | 12,127 | 5,815 | 20,715 | 28,257 | 31,234 | 37,770 | 36,833 | 117,976 | 133,071 | |
Net income | 26,578 | 33,254 | 35,323 | 24,139 | 64,796 | 95,423 | 101,933 | 123,944 | 119,294 | 386,096 | 469,677 | |
Less: Net income attributable to noncontrolling interest | 1,022 | 1,186 | 2,063 | 1,889 | 2,612 | 2,517 | 2,873 | 3,599 | 6,160 | 11,601 | 21,841 | |
Income attributable to Hilltop | $ 25,556 | $ 32,068 | $ 33,260 | $ 22,250 | $ 62,184 | $ 92,906 | $ 99,060 | $ 120,345 | $ 113,134 | $ 374,495 | $ 447,836 | |
Basic: | ||||||||||||
Basic earnings per common share (in dollars per share) | $ 0.40 | $ 0.50 | $ 0.45 | $ 0.28 | $ 0.79 | $ 1.16 | $ 1.21 | $ 1.46 | $ 1.61 | $ 4.64 | $ 5.02 | |
Diluted: | ||||||||||||
Diluted earnings per common share (in dollars per share) | 0.39 | 0.50 | 0.45 | 0.28 | 0.78 | 1.15 | 1.21 | 1.46 | 1.60 | 4.61 | 5.01 | |
Cash dividends declared per common share | $ 0.16 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.60 | $ 0.48 | $ 0.36 |