The
There are signs of optimism for a turnaround, although in the next few quarters
This increase did not keep the unit out of the red, as it lost $16.45 million on a pretax basis during the first quarter, compared with a $15.9 million fourth quarter loss and a loss of $24.1 million on a year-over-year basis.
Ford blamed the current period loss on
Approximately $5 million of the MSR valuation hit is due to a letter of intent to sell all of its conventional servicing rights, William Furr, executive vice president and chief financial officer said.
"As we've noted in the past, the MSR asset is not a strategic asset for Hilltop," Furr said. "And while we may choose to retain MSRs at times through the cycle, our long-term view remains that we will maintain a small MSR asset, sufficient to support the sale of certain product to PrimeLending and that we will execute bulk sales when we deem appropriate to limit our overall exposure on the balance sheet."
During the first quarter, PrimeLending produced origination volume of $1.68 billion, compared with $1.82 billion in the fourth quarter and $1.73 billion in the prior year period.
But over that same time frame, gain-on-sale margins grew to 216 basis points, versus 189 basis points one quarter ago and 186 basis points in the first quarter of 2023.
The trade-off for the higher GOS is lower mortgage loan origination fees as fewer clients bought down the rate. They fell 158 basis points from 181 basis points in the fourth quarter and 166 basis points one year ago.
Borrowers are making what Furr called "kind of real-time decisions" about
"So we're looking at it, on an aggregate revenue basis of about 375 basis points is where we've been here recently," Furr said. "One of the revenue components moving higher, while the other necessarily almost offsets it dollar-for-dollar, I think just puts us in a similar spot."
Hilltop Holdings ended up with net income of $27.7 million for the quarter, down from $28.7 million for the fourth quarter but improved from $25.8 million in the first quarter of 2023. PrimeLending is a subsidiary of its depository, PlainsCapital Bank, and Hilltop also owns two broker/dealer businesses.
