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Hilltop’s Mortgage Earnings, Originations Up

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Mortgage Daily

                                                 July 28, 2017

A quarter-over-quarter gain was reported for mortgage earnings and originations at Hilltop Holdings Inc. Year-over-year gains, however, were lacking as servicing shrunk.

Before income taxes, Hilltop earned $89 million during the three months ended mid-2017. Earnings improved from $50 million during the same three months last year.

The Dallas-based parent of PrimeLending disclosed the details along with other operational and financial results
in its second-quarter 2017 earnings report.

Earnings more than doubled from the first-three months of this year, when income was just $41 million.

In just the mortgage origination segment, pre-tax income was $19 million in the second-quarter 2017,
soaring from $10 million the preceding quarter but weakening from $28 million the same three months in 2016.

“The decreases in income before income taxes for both periods were primarily due to decreases in non-interest income, partially offset by decreases in non-interest expense and net interest expense,” the report said of mortgage income.

Originations were 17,594 loans for $4.058 billion during the second quarter of this year, soaring from just 12,392 units for $2.824 billion closed in the preceding period.
Production was little changed from the 18,167 mortgages funded for $4.150 billion in the same quarter during 2016.

During the entire first-half 2017, there were 29,986 residential loans originated for $6.882 billion.

Conventional loans made up 60.2 percent of second-quarter 2017 business, while 24.7 percent was government, 9.3 percent was jumbo and the remaining 5.8 percent were classified as “other.”

Refinance share
continued to plummet, falling to 13.7 percent during the latest period from 19.7 percent in the first quarter.

Texas was where 22 percent of properties securing newly originated mortgages were located, while California was the location of 12 percent.
No other state had a double-digit concentration.

Interest rate lock commitments were $1.5 billion as of the end of last month, a little more than $1.4 billion at the end of March.

Hilltop serviced $3.761 billion in mortgages for third parties. The financial institution trimmed the servicing portfolio from $3.790 billion as of March 31 and reduced it from $4.845 billion as of June 30, 2016.

The mortgage-servicing-rights assets as a percentage of loans serviced was 1.16 percent.

Single-family assets were reduced to $0.933 billion from $0.958 billion as of March 31.

Commercial real estate assets ended the first-half 2017 at $3.105 billion, more than $2.895 billion three months earlier and $2.824 billion one year earlier. Commercial mortgages made up $2.236 billion of the latest total, while construction-and-development loans accounted for the remaining $0.869 billion.

Hilltop carried around 5,500 people on its payroll at the midpoint of this year, a hundred more than previously reported as of three months prior and a year prior.

June 2017 concluded with 465 locations,
five more than at the end of the previous quarter.

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