You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Our actual results, capital and financial condition may differ materially from these statements due to a variety of factors, including the precautionary statements referenced in our discussion today and those included in our most recent annual report and quarterly report filed with the SEC.
Except to the extent required by law, we expressly disclaim any obligation to update earlier statements as a result of new information.
Erik and I have worked together for a long time, and I know he will do a great job.
For the second quarter 2019, Hilltop reported net income of $57.8 million or $0.62 per diluted share, which represents a 77% increase compared with the $0.35 reported during the same quarter last year.
Additionally, Hilltop delivered a return on average assets of 1.74% and a return on average equity of 11.6%.
This quarter reflected the strength and diversification of our business model with the bank, mortgage business and broker-dealer all delivering significant year-over-year pre-tax income growth.
Average loans held for investment excluding broker-dealer loans grew by $740 million or 13% compared to the prior second quarter.
The large drivers were our Bank of River Oaks acquisition in Q3 2018 and our national warehouse lending business, which increases average balance by $225 million or 81% from second quarter 2018.
We continue to make paying a healthy pipeline of unfunded commitments and aim to prudently grow our loan portfolio by fostering our bank value relationships.
This was a strong quarter for PrimeLending as reflected by improvements versus Q2 2018 in both gain-on-sale margin and operating costs.
Also, the structured finance business at HilltopSecurities yielded a net revenue increase of $31 million compared to prior year from optimal market conditions and the strategic alignment with the capital market business.
Through the first six months of 2019, we have returned $40 million to our stockholders in dividends and share repurchases.
Under our Board-authorized share repurchase program, $25 million remains available through January 2020.
Credit quality remains a high priority, and we continue to focus on maintaining our underwriting discipline.
For the second quarter, nonperforming assets were $53 million, down slightly linked quarter and down $32 million compared to the second quarter 2018.
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The bank had a healthy quarter with pre-tax income increasing by $13.5 million or 41% from prior year.
This increase was partially driven by a reduction in noninterest expense of $7.3 million attributed to a wire fraud and indemnification asset amortization in Q2 2018 as well as operational efficiency within the business.
Additionally, higher yields on higher loans balances delivered net interest income growth of $5.5 million despite lower accretion during the period.
In the second quarter, the bank closed two underperforming branches resulting in 62 full service branches.
Mortgage pre-tax income of $21.8 million for the quarter, an improvement of $8.4 million from Q2 2018, was the result of disciplined pricing and expense management despite a 4% decline in origination volume.
Multiple initiatives implemented during the second half of 2018 resulted in $6 million lower fixed cost and $4.3 million higher origination and closing costs fees.
Gain-on-sale margins increased by 15 basis points from Q2 2018, though remained stable over the trailing 12 months.
With elevated refinancing volume, we expect margin compression to persist and remain focused on delivering profitable volumes through the second half of 2019.
The broker-dealer reported a very strong quarter with a pre-tax margin of 18.9% on increased net revenues of 35% versus prior year.
The increase was largely driven by structured finance, which experienced higher production levels and strong secondary market margin at 10-year rates decline.
We feel good about the path of our new CEO, Brad Winges, and his leadership team are on to build upon HilltopSecurities established business line.
Results were relatively stable compared to prior year in our insurance business as we reported a pre-tax loss of $2.8 million for the quarter with a combined ratio of 113%.
Notably, we have begun to realize written premium growth in Texas and other core states.
In January, we introduced our platform for growth and efficiency initiatives, which includes a broad set of projects to operate -- to lower operating cost and build a foundation for future growth.
During the quarter, we benefited from the previously referenced mortgage efficiency and capital market strategic alignment initiatives as well as realized savings from our consolidated shared services and strategic sourcing.
While we expect the benefits to largely materialize in 2021, we are encouraged by the profits being made.
This past quarter, I traveled with several of our business leaders to our major markets in Texas and nationwide and met with employees from across all lines of businesses.
It gave us the opportunity to have candid roundtable discussions and learn about what our people are seeing in the market.
I came back inspired by our leadership and overwhelmed by the quality of our people in the field.
The strength of Hilltop is in our talented people and the impact they have on our customers and communities.
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As Jeremy discussed, for the second quarter of 2019, Hilltop reported $57.8 million of income attributable to common stockholders equating to $0.62 per diluted share.
During the second quarter, Hilltop reported a $700,000 recovery and provision for loan losses.
In the quarter, the bank recaptured $6.2 million of allowance for loan loss, principally related to ongoing improvement in the oil and gas portfolio and a significant recovery from a previously classified oil and gas loan.
The second quarter provision includes approximately $3 million of net charge-offs or 18 basis points of average bank loans on an annualized basis.
Credit quality during the quarter remains solid.
But even with the recent strong performance, we are monitoring our portfolio rigorously to evaluate areas that may be experiencing any weakness.
Currently, we do not see any industries or concentrated exposures that are experiencing material deterioration.
During the second quarter, revenue-related purchase accounting accretion was $6.4 million and expenses were $2 million, resulting in a net purchase accounting pre-tax impact of $4.4 million for the quarter.
In the current period, the purchase accounting expenses largely represent amortization of deposits and other intangible assets related to prior acquisitions.
Related to the purchase loan accretion, as the purchase portfolio balances continued to decline, we expect scheduled interest income related to purchase loan accretion to average between $4 million and $6 million per quarter for the remainder of 2019.
Hilltop's capital position remains strong with a period in Common Equity Tier 1 ratio of 16.32% and a Tier 1 leverage ratio of 13%.
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Net interest income in the second quarter equated to $108 million, including $6.4 million of purchased loan accretion.
Net interest income increased $3 million or 3% versus the same quarter in the prior year.
The growth in net interest income was driven by asset growth, including the acquired loans in Houston and improvement in net interest margin, which expanded by three basis points versus the prior year period.
Net interest margin equated to 3.49% in the second quarter and included 23 basis points of purchase accounting accretion.
The prepurchase accounting taxable equivalent net interest margin equated to 3.26%, which improved by eight basis points versus the same period in the prior year.
On a linked-quarter basis, taxable equivalent prepurchase accounting net interest margin declined by 12 basis points, resulting from lower yields on loans held for sale and the six basis point increase in the interest-bearing deposit costs.
During the second quarter, long-term interest rates and more directly 10-year rates continued to decline that began earlier in the year.
Year-to-date, the 10-year treasury yield has declined by approximately 65 basis points, which has a direct impact on Hilltop's loans held-for-sale yields, albeit on a lag basis.
Overall, the average yield on loans held for sale during the second quarter dropped by 32 basis points to 460 basis points, putting pressure on net interest margin during the quarter.
Given the continued declines in the 10-year rates during the second quarter, we expect that yields on loans held for sale will continue to decline further during the third quarter.
In addition, bank loan yields have increased as compared to the same period prior year, but the competitive pressure continues to intensify on both new and renewed loans.
As expected, we've seen deposit betas continue to increase even as the Federal Reserve did not move short-term rates higher.
Hilltop's cumulative beta for interest-bearing deposits in December of 2015 has been approximately 46%, remaining below our through-the-cycle model ranges of 50% to 60%.
With the change in market sentiment and the market's indication that the Fed could reduce rates throughout the remainder of 2019, we expect the deposit cost will reach peak levels later this year.
With the combination of lower loan held-for-sale yields and somewhat higher deposit costs, we expect additional pressure on net interest margin for the remainder of the year.
Therefore, we are maintaining our full year average prepurchase accounting net interest margin outlook of 3.25% plus or minus three basis points.
We will continue to revisit our assumptions based on the outcome of future Federal Reserve rate movements, yield curve shifts and asset liability flows across our portfolios.
Quarterly average gross earning assets increased by $268 million versus the same period in the prior year.
Second quarter earning asset growth was driven by the BORO acquisition and growth in our national warehouse lending business, which provides warehouse financing to third-party mortgage companies.
Growth was impacted by lower average loans held for sale, which declined by $282 million versus the prior year period.
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Total noninterest income for the second quarter of 2019 equated to $313 million.
Second quarter mortgage-related income and fees increased by $2.8 million versus the second quarter 2018.
During the second quarter of 2019, the competitive environment in mortgage banking remained intense as Hilltop's mortgage origination volumes declined by $147 million or 4% versus the same period in the prior year.
While mortgage volumes were challenged, gain-on-sale margins remained relatively stable during the second quarter at 333 basis points.
With the recent decline in the primary mortgage rate, the business experienced improvement in the refinance market as refinance volumes grew by 28% versus the prior year.
Given the improvements in the market related to lower long-term rates, we expect that full year origination volume in 2019 will be in line with full year 2018 production levels.
Regarding mortgage gain-on-sale margins, given the current competitive dynamics, our projected mix of origination business and our expectations on market rate, we expect the gain-on-sale margins will trend lower throughout the balance of 2019.
Other income increased by $35 million, driven primarily by improvements in sales and trading activities in both capital markets and structured finance services at HilltopSecurities.
Favorable market conditions resulted in a 25% increase in structured finance mortgage-backed security volumes and improved secondary spreads.
These businesses continue to realize the benefits of the investments we've been making to improve our structuring and distribution capabilities since the third quarter of 2018.
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Noninterest expenses increased in the same period in the prior year by $5 million to $344 million.
The growth in expenses versus the prior year were driven by an increase in variable compensation of $18 million at HilltopSecurities and PrimeLending.
This increase in variable compensation was going to strong fee revenue growth in the quarter.
Over the past five quarters, we've continued to make progress in aligning our businesses to the current market conditions and driving efficiencies across the franchise.
Through these efforts, headcount, nonvariable compensation, professional services costs and marketing and development expenses continue to trend lower as we make progress against our efficiency initiatives.
During the second quarter, Hilltop incurred $2 million in costs related to the ongoing core system enhancements, and we do expect that these related expenses will increase for the remainder of 2019.
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Total average HFI loans grew by 11% versus the second quarter of 2018.
Growth versus the same period in the prior year was driven by loans acquired in Houston during the third quarter of 2018 and growth in our mortgage warehouse lending business.
Based on current production trends, seasonal and scheduled paydowns, the current competitive environment and our focus on high-quality conservative underwriting, we continue to expect the full year average HFI loans will grow between 4% and 6% in 2019.
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As previously noted and as shown on this chart on the top right of the slide, Hilltop's businesses have maintained solid credit quality as nonperforming assets have declined $32.5 million from the same period in the prior year.
The allowance for loan loss to HFI loans ratio equates to 83 basis points at the end of the second quarter of 2019 and the decline from the first quarter of 2019 reflects the aforementioned allowance recapture.
It is important to note that we maintain approximately $90 million of remaining discounts across the purchase loan pools, and these discounts provide additional coverage against future losses.
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Average total deposits are approximately $8.3 billion and have increased by $483 million versus the second quarter of 2018.
Interest-bearing deposit costs have risen by six basis points from the first quarter of 2019 as competitive pressures remain and clients are actively seeking higher rates of return on their deposits by migrating monies from noninterest-bearing and savings products into higher-yielding money market, CD and investment products.
We continue to focus on growing deposits through the expansion of existing relationships and new client acquisition while managing overall deposit cost as aggressively as possible while remaining competitive.
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During the second quarter of 2019, PlainsCapital Bank continued to demonstrate solid improvement in profitability, generating approximately $47 million of pre-tax income during the quarter.
The quarter's results reflect the benefits of the growth in the Houston market, the affirmation allowance recaptured, which equated to $6.2 million and improvement in the efficiency ratio versus the prior year period of 10.6%.
The improvement in the efficiency ratio was driven by both revenue growth and lower expenses versus the prior year period.
Of note, the second quarter of 2018 included $4 million of expense related to the previously reported wire fraud and $2 million loss share related expenses.
The focus at PlainsCapital remains consistent: provide great service to our clients, drive profitable growth while maintaining a moderate risk profile and delivering positive operating leverage by balancing revenue growth and expense efficiency.
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PrimeLending generated a pre-tax profit of $22 million in the second quarter of 2019 driven by the efficiency efforts that the leadership team at PrimeLending executed during the third and fourth quarters of 2018 and has continued in the 2019.
While origination volumes declined by 4% versus the same period in the prior year, the combination of back-office efficiencies and branch performance management have yielded significant reduction in operating expenses, which declined by approximately $6 million versus the same period in the prior year.
Further supporting the improved results is our focus on pricing and fees.
Mortgage origination fees have increased from the same period in the prior year by 12 basis points, which yielded a small increase in fees versus the prior year even as origination volumes declined.
The focus for PrimeLending is to generate profitable mortgage volume, continue to focus on operational efficiencies and successfully launch our new mortgage loan operating system.
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HilltopSecurities delivered a pre-tax profit of $22 million for the second quarter of 2019, driven by solid execution in the structured finance and capital markets businesses, which have benefited from both our ongoing investments in structuring, sales and distribution and improved market conditions.
While activity was strong in the quarter, results from both of these businesses can be volatile as market rates, spreads and volumes can change significantly from period to period.
Related to Public Finance, while revenues declined modestly versus the same period in the prior year, we are investing in our franchise to support long-term growth by strategically hiring bankers to support client expansion and acquisition.
Based on current market activity, we expect results in this business to continue to improve throughout the remainder of 2019.
The focus for HilltopSecurities is to grow profitable revenue, optimize operating expenses, manage marketing liquidity risks within a moderate risk profile and finalize the deployment of the new core operating system.
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National Lloyds recorded a $3 million pre-tax loss for the quarter, which reflects seasonal increases in storm activity and client-related losses.
During the second quarter, the business delivered modest improvement in written premiums in our core states.
Growth in these core states remains the primary focus for 2019.
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For 2019, we're maintaining the full year outlook for our key balance sheet items, loans and deposits.
Given the actual changes in market interest rates and our expectation for rates over the coming quarters, we are adjusting our full year net interest income range lower to reflect our asset-sensitive position at PlainsCapital, the impact of lower market rates on loan-held-for-sale yields and our expectation of increasing deposit costs.
To reflect the strength in our fee businesses, we are adjusting our noninterest income outlook higher to reflect the results during the first half of 2019 and the improvement in current market conditions.
Our noninterest expense outlook range is slightly higher as variable expenses will continue to be correlated to our fee revenue businesses.
Lastly, as credit quality has remained solid and as a result of performance in the first half of 2019, we are adjusting our full year provision outlook range lower.
This outlook represents our current expectations with respect to the markets, rates and overall economic activity.
These, however, may change throughout the remainder of the year, and we will provide updates as necessary on our quarterly calls going forward.

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hilltop holdings q2 earnings per share $0.62.
q2 earnings per share $0.62.

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