Edgar Filing: Hilltop Holdings Inc.

hth_Current folio_10Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-31987

Hilltop Holdings Inc.

(Exact name of registrant as specified in its charter)


Maryland		84-1477939
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)

200 Crescent Court, Suite 1330
Dallas, TX		75201
(Address of principal executive offices)		(Zip Code)

(214) 855-2177

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒		Accelerated filer ☐

Non-accelerated filer ☐ (Do not check if a smaller reporting company)		Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding at April 28, 2016 was 98,498,077.

Table of Contents

HILLTOP HOLDINGS INC.

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2016

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	56

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	88

Item 4.	Controls and Procedures	90


PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	91

Item 1A.	Risk Factors	91

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	91

Item 6.	Exhibits	91

Table of Contents

HILLTOP HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)


	March 31,		December 31,
	2016		2015
Assets
Cash and due from banks	$	512,103	$	652,036
Federal funds sold		15,406		17,409
Securities purchased under agreements to resell		96,646		105,660
Assets segregated for regulatory purposes		120,714		158,613
Securities:
Trading, at fair value		368,425		214,146
Available for sale, at fair value (amortized cost of $655,989 and $670,003, respectively)		666,328		673,706
Held to maturity, at amortized cost (fair value of $313,553 and $331,468, respectively)		310,478		332,022
		1,345,231		1,219,874

Loans held for sale		1,344,333		1,533,678
Non-covered loans, net of unearned income		5,366,065		5,220,040
Allowance for non-covered loan losses		(48,450)		(45,415)
Non-covered loans, net		5,317,615		5,174,625

Covered loans, net of allowance of $1,217 and $1,532, respectively		346,169		378,762
Broker-dealer and clearing organization receivables		1,370,622		1,362,499
Premises and equipment, net		198,414		200,618
FDIC indemnification asset		80,522		91,648
Covered other real estate owned		78,890		99,090
Other assets		601,181		565,813
Goodwill		251,808		251,808
Other intangible assets, net		52,274		54,868
Total assets	$	11,731,928	$	11,867,001

Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing	$	2,233,608	$	2,235,436
Interest-bearing		4,750,567		4,717,247
Total deposits		6,984,175		6,952,683

Broker-dealer and clearing organization payables		1,284,016		1,338,305
Short-term borrowings		832,921		947,373
Securities sold, not yet purchased, at fair value		165,704		130,044
Notes payable		232,190		238,716
Junior subordinated debentures		67,012		67,012
Other liabilities		405,899		454,743
Total liabilities		9,971,917		10,128,876
Commitments and contingencies (see Notes 12 and 13)
Stockholders' equity:
Hilltop stockholders' equity:
Common stock, $0.01 par value, 125,000,000 shares authorized; 98,584,947 and 98,896,184 shares issued and outstanding, respectively		986		989
Additional paid-in capital		1,567,150		1,577,270
Accumulated other comprehensive income		6,878		2,629
Retained earnings		183,042		155,475
Deferred compensation employee stock trust, net		1,020		1,034
Employee stock trust (21,453 and 22,196 shares, at cost, respectively)		(428)		(443)
Total Hilltop stockholders' equity		1,758,648		1,736,954
Noncontrolling interests		1,363		1,171
Total stockholders' equity		1,760,011		1,738,125
Total liabilities and stockholders' equity	$	11,731,928	$	11,867,001

See accompanying notes.

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HILLTOP HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,
	2016		2015
Interest income:
Loans, including fees	$	91,551	$	87,388
Securities borrowed		7,589		10,018
Securities:
Taxable		6,367		7,049
Tax-exempt		1,637		1,741
Other		1,009		1,473
Total interest income		108,153		107,669

Interest expense:
Deposits		4,102		4,315
Securities loaned		5,987		7,506
Short-term borrowings		1,120		1,024
Notes payable		2,582		669
Junior subordinated debentures		645		585
Other		176		178
Total interest expense		14,612		14,277

Net interest income		93,541		93,392
Provision for loan losses		3,407		2,687
Net interest income after provision for loan losses		90,134		90,705

Noninterest income:
Net realized gains on securities		46		4,403
Net gains from sale of loans and other mortgage production income		127,297		120,545
Mortgage loan origination fees		18,813		14,589
Net insurance premiums earned		39,733		39,567
Securities commissions and fees		38,752		42,918
Investment and securities advisory fees and commissions		23,819		24,922
Bargain purchase gain		—		81,289
Other		29,226		24,613
Total noninterest income		277,686		352,846

Noninterest expense:
Employees' compensation and benefits		182,655		182,504
Loss and loss adjustment expenses		21,959		18,860
Policy acquisition and other underwriting expenses		11,252		11,674
Occupancy and equipment, net		27,791		29,185
Other		81,544		72,253
Total noninterest expense		325,201		314,476

Income before income taxes		42,619		129,075
Income tax expense		14,423		15,420

Net income		28,196		113,655
Less: Net income attributable to noncontrolling interest		629		353

Income attributable to Hilltop		27,567		113,302
Dividends on preferred stock		—		1,426
Income applicable to Hilltop common stockholders	$	27,567	$	111,876

Earnings per common share:
Basic	$	0.28	$	1.12
Diluted	$	0.28	$	1.11

Weighted average share information:
Basic		98,153		99,741
Diluted		98,669		100,627

See accompanying notes.

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HILLTOP HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)


	Three Months Ended March 31,
	2016		2015
Net income	$	28,196	$	113,655
Other comprehensive income:
Net unrealized gains on securities available for sale, net of tax of $2,390 and $4,454, respectively		4,279		7,913
Reclassification adjustment for gains included in net income, net of tax of $(16) and $(1,589), respectively		(30)		(2,814)
Comprehensive income		32,445		118,754
Less: comprehensive income attributable to noncontrolling interest		629		353

Comprehensive income applicable to Hilltop	$	31,816	$	118,401

See accompanying notes.

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HILLTOP HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)


									Accumulated		Retained		Deferred					Total
							Additional		Other		Earnings		Compensation		Employee			Hilltop				Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		(Accumulated		Employee Stock		Stock Trust			Stockholders’		Noncontrolling		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Income		Deficit)		Trust, Net		Shares	Amount		Equity		Interest		Equity
Balance, December 31, 2014	114	$	114,068	90,182	$	902	$	1,390,788	$	651	$	(45,957)	$	—	—	$	—	$	1,460,452	$	787	$	1,461,239
Net income	—		—	—		—		—		—		113,302		—	—		—		113,302		353		113,655
Other comprehensive income	—		—	—		—		—		5,099		—		—	—		—		5,099		—		5,099
Issuance of common stock	—		—	10,113		101		199,932		—		—		—	—		—		200,033		—		200,033
Stock-based compensation expense	—		—	—		—		1,814		—		—		—	—		—		1,814		—		1,814
Common stock issued to board members	—		—	2		—		51		—		—		—	—		—		51		—		51
Issuance of common stock related to share-based awards, net	—		—	(11)		—		—		—		—		—	—		—		—		—		—
Dividends on preferred stock	—		—	—		—		—		—		(1,427)		—	—		—		(1,427)		—		(1,427)
Deferred compensation plan	—		—	—		—		—		—		—		1,189	30		(597)		592		—		592
Net cash distributed to noncontrolling interest	—		—	—		—		—		—		—		—	—		—		—		(264)		(264)
Balance, March 31, 2015	114	$	114,068	100,286	$	1,003	$	1,592,585	$	5,750	$	65,918	$	1,189	30	$	(597)	$	1,779,916	$	876	$	1,780,792

Balance, December 31, 2015	—	$	—	98,896	$	989	$	1,577,270	$	2,629	$	155,475	$	1,034	22	$	(443)	$	1,736,954	$	1,171	$	1,738,125
Net income	—		—	—		—		—		—		27,567		—	—		—		27,567		629		28,196
Other comprehensive income	—		—	—		—		—		4,249		—		—	—		—		4,249		—		4,249
Issuance of common stock	—		—	500		5		3,845		—		—		—	—		—		3,850		—		3,850
Stock-based compensation expense	—		—	—		—		2,228		—		—		—	—		—		2,228		—		2,228
Common stock issued to board members	—		—	6		—		108		—		—		—	—		—		108		—		108
Issuance of common stock related to share-based awards, net	—		—	(1)		—		(33)		—		—		—	—		—		(33)		—		(33)
Retirement of common stock	—		—	(816)		(8)		(16,268)		—		—		—	—		—		(16,276)		—		(16,276)
Deferred compensation plan	—		—	—		—		—		—		—		(14)	(1)		15		1		—		1
Net cash distributed to noncontrolling interest	—		—	—		—		—		—		—		—	—		—		—		(437)		(437)
Balance, March 31, 2016	—	$	—	98,585	$	986	$	1,567,150	$	6,878	$	183,042	$	1,020	21	$	(428)	$	1,758,648	$	1,363	$	1,760,011

See accompanying notes.

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HILLTOP HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Three Months Ended March 31,
	2016		2015
Operating Activities
Net income	$	28,196	$	113,655
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses		3,407		2,687
Depreciation, amortization and accretion, net		(11,830)		(14,486)
Net realized gains on securities		(46)		(4,403)
Bargain purchase gain		—		(81,289)
Deferred income taxes		494		(2,545)
Other, net		8,320		(3,814)
Net change in securities purchased under agreements to resell		9,014		(22,486)
Net change in assets segregated for regulatory purposes		37,899		(20,657)
Net change in trading securities		(154,279)		11,632
Net change in broker-dealer and clearing organization receivables		130,858		(793,613)
Net change in FDIC Indemnification Asset		11,214		23,376
Net change in other assets		(14,890)		(34,554)
Net change in broker-dealer and clearing organization payables		(162,722)		690,552
Net change in other liabilities		(48,283)		(52,528)
Net gains from sales of loans		(127,297)		(120,545)
Loans originated for sale		(3,052,579)		(2,904,331)
Proceeds from loans sold		3,352,409		3,094,705
Net cash provided by (used in) operating activities		9,885		(118,644)

Investing Activities
Proceeds from maturities and principal reductions of securities held to maturity		21,398		6,329
Proceeds from sales, maturities and principal reductions of securities available for sale		64,918		449,892
Purchases of securities available for sale		(51,531)		(2,623)
Net change in loans		(233,309)		(2,080)
Purchases of premises and equipment and other assets		(9,948)		(5,565)
Proceeds from sales of premises and equipment and other real estate owned		22,068		31,818
Net cash received for Federal Home Loan Bank and Federal Reserve Bank stock		12,311		4,044
Net cash from acquisitions		—		41,097
Net cash provided by (used in) investing activities		(174,093)		522,912

Financing Activities
Net change in deposits		139,925		(556,657)
Net change in short-term borrowings		(114,452)		72,540
Proceeds from notes payable		5,553		1,000
Payments on notes payable		(12,028)		(23,904)
Proceeds from issuance of common stock		3,850		—
Dividends paid on preferred stock		—		(1,426)
Net cash distributed to noncontrolling interest		(437)		(264)
Other, net		(139)		(99)
Net cash provided by (used in) financing activities		22,272		(508,810)

Net change in cash and cash equivalents		(141,936)		(104,542)
Cash and cash equivalents, beginning of period		669,445		813,075
Cash and cash equivalents, end of period	$	527,509	$	708,533

Supplemental Disclosures of Cash Flow Information
Cash paid for interest	$	16,377	$	14,325
Cash paid for income taxes, net of refunds	$	831	$	45,981
Supplemental Schedule of Non-Cash Activities
Conversion of loans to other real estate owned	$	4,726	$	26,211
Common stock issued in acquisition	$	—	$	200,626
Additions to mortgage servicing rights	$	1,639	$	2,690

See accompanying notes.

Table of Contents

Hilltop Holdings Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

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, mortgage origination and insurance subsidiaries.

The Company provides its products and services through three primary operating subsidiaries, PlainsCapital Corporation (“PlainsCapital”), Hilltop Securities Holdings LLC (“Securities Holdings”) and National Lloyds Corporation (“NLC”). PlainsCapital is a financial holding company, headquartered in Dallas, Texas, 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, headquartered in Dallas, Texas, 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, equity trading, clearing, securities lending, structured finance and retail brokerage services throughout the United States. NLC is a property and casualty insurance holding company, headquartered in Waco, Texas, that provides, through its subsidiaries, fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other areas of the southern United States.

On January 1, 2015, Hilltop completed its acquisition of SWS Group, Inc. (“SWS”) in a stock and cash transaction (the “SWS Merger”), whereby SWS’s broker-dealer subsidiaries, Southwest Securities, Inc. and SWS Financial Services, Inc., became subsidiaries of Securities Holdings, and SWS’s banking subsidiary, Southwest Securities, FSB (“SWS FSB”), was merged into the Bank. On October 5, 2015, Southwest Securities, Inc. and SWS Financial Services, Inc. were renamed “Hilltop Securities Inc.” (“Hilltop Securities”) and “Hilltop Securities Independent Network Inc.” (“HTS Independent Network”), respectively.

On October 22, 2015, the Financial Industry Regulatory Authority (“FINRA”) granted approval to combine First Southwest Company, LLC (“FSC”) and Hilltop Securities, subject to customary conditions. FSC, Hilltop Securities and HTS Independent Network operated as separate broker-dealers, under coordinated leadership from the date of the SWS Merger until January 22, 2016, when FSC was merged into Hilltop Securities to form a combined firm operating under the “Hilltop Securities” name. We use the term “Hilltop Broker-Dealers” to refer to FSC, Hilltop Securities and HTS Independent Network prior to January 22, 2016 and Hilltop Securities and HTS Independent Network after such date.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, these financial statements contain all adjustments necessary for a fair statement of the results of the interim periods presented. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”). Results for interim periods are not necessarily indicative of results to be expected for a full year or any future period.

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 loan losses, the fair values of financial instruments, the amounts receivable from the Federal Deposit Insurance Corporation (the “FDIC”) under loss-share agreements (the “FDIC Indemnification Asset”), reserves for losses and loss adjustment expenses (“LAE”), the

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Hilltop Holdings Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(Unaudited)

mortgage loan indemnification liability, and the potential impairment of assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements.

Hilltop owns 100% of the outstanding stock of PlainsCapital. PlainsCapital owns 100% of the outstanding stock of the Bank and 100% of the membership interest in PlainsCapital Equity, LLC. The Bank owns 100% of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”) and has a 100% membership interest in PlainsCapital Securities, LLC.

PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC, the controlling and sole managing member of PrimeLending Ventures, LLC (“Ventures”).

PlainsCapital also owns 100% of the outstanding common securities of PCC Statutory Trusts I, II, III and IV (the “Trusts”), which are not included in the consolidated financial statements under the requirements of the Variable Interest Entities Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), because the primary beneficiaries of the Trusts are not within the consolidated group.

Hilltop has a 100% membership interest in Securities Holdings, which operates through its wholly-owned subsidiaries, Hilltop Securities, HTS Independent Network and First Southwest Holdings, LLC (“First Southwest”). Hilltop Securities is a broker-dealer registered with the SEC and the Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”), HTS Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA, and First Southwest Asset Management, LLC, a wholly-owned subsidiary of First Southwest, is a registered investment advisor under the Investment Advisors Act of 1940. As discussed above, prior to January 22, 2016, Securities Holdings’ subsidiaries also included FSC, First Southwest’s principal subsidiary and formerly a broker-dealer registered with the SEC and FINRA and a member of the NYSE.

Hilltop also owns 100% of NLC, which operates through its wholly owned subsidiaries, National Lloyds Insurance Company (“NLIC”) and American Summit Insurance Company (“ASIC”).

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.

The operations acquired in the SWS Merger were included in the Company’s operating results beginning January 1, 2015 and such operations included a preliminary bargain purchase gain of $82.8 million as disclosed in the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 6, 2015. During 2015, certain adjustments were recorded that resulted in an aggregate decrease in the preliminary bargain purchase gain associated with the SWS Merger to $81.3 million, which also decreased net income for the three months ended March 31, 2015 by $1.5 million as compared with amounts previously reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015. Accordingly, our results for the quarter ended March 31, 2015 and related disclosures have been revised to reflect these adjustments.

Certain reclassifications have been made to the prior period consolidated financial statements to conform with the current period presentation. Additionally, during the preparation of the condensed consolidated financial statements for the period ended September 30, 2015, the Company determined that its previously reported unaudited consolidated statements of cash flows contained in the previously filed Quarterly Reports on Form 10-Q filed with SEC on May 6, 2015 and July 29, 2015 contained a classification error related to how certain acquired balances related to its acquisition of SWS were reflected. Management has evaluated the quantitative and qualitative impact of the classification error to previously issued unaudited consolidated statements of cash flows and concluded that the previously issued condensed consolidated financial statements were not materially misstated. However, in order to correctly present the cash flow statements, management has elected to revise the unaudited consolidated statements of cash flows for each of the three

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Hilltop Holdings Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(Unaudited)

months ended March 31, 2015 included herein and the six months ended June 30, 2015 in its future filings. The correction had no impact on the Company’s financial condition or results of operations for the periods presented.

The following table summarizes the revisions made to the Company’s unaudited consolidated statements of cash flows for the noted periods (in thousands).


	Three Months Ended March 31, 2015
	As Originally Reported		As Revised
Operating Activities
Net change in broker-dealer and clearing organization receivables	$	(1,062,969)	$	(793,613)
Net change in broker-dealer and clearing organization payables		1,039,786		690,552
Net cash used in operating activities		(38,766)		(118,644)

Investing Activities
Net change in loans		267,275		(2,080)
Net cash provided by investing activities		792,267		522,912

Financing Activities
Net change in deposits		(905,890)		(556,657)
Net cash used in financing activities		(858,043)		(508,810)

Net change in cash and cash equivalents		(104,542)		(104,542)

2. Acquisition

SWS Merger

On January 1, 2015, Hilltop completed its acquisition of SWS in a stock and cash transaction, whereby each outstanding share of SWS common stock was converted into the right to receive 0.2496 shares of Hilltop common stock and $1.94 in cash, equating to $6.92 per share based on Hilltop’s closing price on December 31, 2014 and resulting in an aggregate purchase price of $349.1 million, consisting of 10.1 million shares of common stock, $78.2 million in cash and $70.3 million associated with Hilltop’s existing investment in SWS common stock. The operations of SWS are included in the Company’s operating results beginning January 1, 2015. Such operating results include a bargain purchase gain of $81.3 million and are not necessarily indicative of future operating results. SWS’s results of operations prior to the acquisition date are not included in the Company’s consolidated operating results.

The SWS Merger was accounted for using the acquisition method of accounting, and accordingly, purchased assets, including identifiable intangible assets, and assumed liabilities were recorded at their respective acquisition date fair values. The components of the consideration paid are shown in the following table (in thousands).


Fair value of consideration paid:
Common stock issued	$	200,626
Cash		78,217
Fair value of Hilltop’s existing investment in SWS		70,282
Total consideration paid	$	349,125

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Hilltop Holdings Inc. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The resulting fair values of the identifiable assets acquired, and liabilities assumed, acquired in the SWS Merger at January 1, 2015 are summarized in the following table (in thousands).


Cash and due from banks	$	119,314
Federal funds sold and securities purchased under agreements to resell		44,741
Assets segregated for regulatory purposes		181,610
Securities		707,476
Non-covered loans, net		863,819
Broker-dealer and clearing organization receivables		1,221,793
Other assets		159,906
Total identifiable assets acquired		3,298,659

Deposits		(1,287,509)
Broker-dealer and clearing organization payables		(1,109,978)
Short-term borrowings		(164,240)
Securities sold, not yet purchased, at fair value		(140,409)
Notes payable		(76,643)
Other liabilities		(89,466)
Total liabilities assumed