For the second quarter, Hilltop reported net income of $99 million or $1.21 per diluted share.
Return on average assets for the period was 2.29% and return on average equity was 16.4%.
PlainsCapital Bank generated pre-tax income of $87 million compared to a pre-tax loss of $17 million in Q2 2020.
Improvements in the economic outlook and positive credit migration drove a $29 million reversal of provision, compared to a provision expense of $66 million in Q2 2020.
Strong deposit growth has continued with average interest-bearing deposits, excluding broker deposits and HilltopSecurities sweep deposits, increasing by 26% from Q2 2020.
This growth was partially offset by the planned run-off of approximately $858 million in broker deposits and the reduction in HilltopSecurities sweep deposits of approximately $690 million, as we optimize our liquidity sources and defend our net interest margin.
Total average bank loans declined modestly by 2% versus Q2 2020 as PPP loans have run off and commercial loan growth remains pressured.
PrimeLending had another solid quarter, generating $49 million in pre-tax income.
PrimeLending originated $5.9 billion in volume with a gain on sale margin on loans sold to third parties of 364 basis points.
Although, average mortgage interest rates declined year-over-year, refinance volumes decreased to 32% of total origination compared to 47% in Q2 2020.
As the third-party market for mortgage servicing has continued to improve, we have reduced our retained servicing to 25% of total mortgage loans sold during the quarter and executed an MSR sale of $32 million, reducing our MSR assets to $124 million.
In the second quarter, PrimeLending had a net gain of 11 loan officers that we believe could add incremental annual volume of nearly $300 million.
For HilltopSecurities, they generated $6.9 million of pre-tax income on net revenues of $94 million for a pre-tax margin of 7.3%.
The Structured Finance business was adversely impacted by mortgage market volatility in March and April and generated net revenue of $11.5 million, a decline of 75% from Q2 2020.
Moving to Page 4, Hilltop maintained strong capital with common equity tier 1 capital ratio of 20% at quarter end.
During the quarter, Hilltop returned $55 million to shareholders through dividends and share repurchases.
The $45 million in shares repurchased are part of the $75 million share authorization the Board granted in January.
This week, the Hilltop Board authorized an increase to the stock purchase program to $150 million, an increase of $75 million.
Factoring in shares repurchased made during the first half of 2021, Hilltop now has approximately $100 million of available capacity through the expiration of the program in January 2022.
Even with sizable capital distributions to shareholders over the past two years, including the opportunistic tender offer executed in 2020, our tangible book value per share has grown at a compound annual rate of 21%, because of the profitability of our unique business model.
I'll start on Page 5.
As Jeremy discussed, for the second quarter of 2021, Hilltop reported consolidated income attributable to common stockholders of $99 million, equating to $1.21 per diluted share.
Included in the second quarter results was a net reversal of provision for credit losses of $28.7 million, which included approximately $500,000 of net charge-offs in the quarter.
On Page 6, we've detailed the significant drivers to the change in allowance for credit losses for the period.
The impact of the improving economic outlook resulted in the release of $11 million of ACL during the second quarter.
The result of the improvements at the client level equated with net release of ACL of $17 million during the second quarter.
The combination of improved client performance and the improving macroeconomic inbound [Phonetic] outlook which were only modestly offset by net charge-offs resulted in allowance for credit losses for the period ending June 30 of $115 million or 1.51% of total loans.
Further, the coverage ratio of ACL to total loans increases to 1.86%.
Turning to Page 7, net interest income in the second quarter equated to $108 million, including $12.4 million of PPP-related interest and fee income as well as purchase accounting accretion.
Somewhat offsetting these items were higher loans held for sale yields resulting from higher overall mortgage rates, coupled with lower interest bearing deposit costs, which should continue to trend lower as expected, finishing the quarter down 9 basis points at 32 basis points.
Further, with funded loan growth continuing to be slower than we expected, we are increasing the level of one-to-four family loans we are retaining on the balance sheet to approximately $50 million to $75 million per month from the prior outlook of $30 million to $50 million per month.
To that end, we expect that NIM will maintain -- will remain pressured into the second half of 2021 moving lower toward 240 basis points and 250 basis points by year-end.
Turning to Page 8, total non-interest income for the second quarter of 2021 equated to $340 million.
Second quarter mortgage-related income and fees decreased by $99 million versus the second quarter of 2020, driven by lower origination volumes, declining gain on sale margins and lower lock volumes.
As it relates to gain on sale margins, we note in our key driver tables on lower right of the page, the gain on sale margin on loans fell 22 basis points versus the prior quarter.
For the second quarter, purchase mortgage volumes increased by $1.1 billion or 38.5%, while refinance volumes declined 43% or $1.4 billion versus the first quarter origination level.
We continue to expect the gain on sale margins for third-party sales will fall within the full year average range of 360 basis points and 385 basis points.
Other income declined by $37 million, driven primarily by declines in TBA lock volumes, volatility in market rates and volatile trading and fixed income capital markets.
Moving to Page 9, non-interest expenses decreased from the same period in the prior year by $27 million to $343 million.
The decline in expenses versus the prior year was driven by decline in variable compensation of approximately $35 million at HilltopSecurities and PrimeLending.
Moving to Page 10, end of period HFI loan equated to $7.6 billion.
We continue to expect full year average total loan growth, excluding PPP loans, will be within a range of zero to 3%.
As noted earlier, we are increasing the level of retention of one-to-four family loans originated in PrimeLending to between $50 million and $75 million per month.
During the second quarter of 2021, PrimeLending locked approximately $176 million loans to be retained by PlainsCapital over the coming months.
These loans had an average yield of 3.11% and an average FICO and LTV of 780% and 64%, respectively.
Turning to Page 11, second quarter credit trends continue to reflect the slow but steady recovery in the Texas economy as the reopening of businesses continues to provide for improved customer cash flows and fewer borrowers on active deferral programs.
As of June 30, we have approximately $76 million of loan on active deferral programs, down from $130 million at March 31.
Further, the allowance for credit losses to end-of-period loan ratio for the active deferral loan equates to 16.8% at June 30.
As is shown in the graph at the bottom right of the page, the allowance for credit loss coverage ratio, including both mortgage warehouse lending as well as PPP loans at the bank ended the second quarter at 1.64%.
Excluding mortgage warehouse and PPP loans, the bank's ACL to end-of-period loans HFI ratio equated to 1.86%.
Turning to Page 12, second quarter end-of-period total deposits were approximately $11.7 billion and remained stable with the first quarter 2021 levels.
While the overall balances were relatively unchanged, the mix of deposits continues to improve as brokered deposits declined approximately $300 million and non-interest-bearing deposits rose by approximately $200 million versus the first quarter 2021 levels.
At 6/30/21, Hilltop maintained $268 million of brokered deposits that have a blended yield of 31 basis points.
Turning to Page 13, in 2021, we continue to remain nimble as the pandemic evolves to ensure the safety of our teammates and our clients.

Summary:
For the second quarter, Hilltop reported net income of $99 million or $1.21 per diluted share.
As Jeremy discussed, for the second quarter of 2021, Hilltop reported consolidated income attributable to common stockholders of $99 million, equating to $1.21 per diluted share.