Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Hilltop Holdings Inc. Announces Financial Results for First Quarter 2024 By: Hilltop Holdings Inc. via Business Wire April 18, 2024 at 16:45 PM EDT Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the first quarter of 2024. Hilltop produced income to common stockholders of $27.7 million, or $0.42 per diluted share, for the first quarter of 2024, compared to $25.8 million, or $0.40 per diluted share, for the first quarter of 2023. Hilltop’s financial results for the first quarter of 2024 included a decline in net interest income, partially offset by a reversal of credit losses due to an improved economic outlook within the banking segment, an increase in net revenues within certain of the broker-dealer segment’s business lines, and a decline in other mortgage production income, partially offset by an increase in net gains from sale of loans within the mortgage origination segment. Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.17 per common share payable on May 24, 2024, to all common stockholders of record as of the close of business on May 10, 2024. Additionally, during the first quarter of 2024, Hilltop paid $9.9 million to repurchase an aggregate of 320,042 shares of its common stock at an average price of $31.04 per share pursuant to the 2024 stock repurchase program. These shares were returned to the pool of authorized but unissued shares of common stock. The impacts of economic headwinds that began in 2022, and continued into 2024, remain uncertain and will depend on developments outside of our control, including, among others, the timing and significance of further changes in U.S. treasury yields and mortgage interest rates, exposure to increasing funding costs, inflationary pressures associated with compensation, occupancy and software costs and labor market conditions, and international armed conflicts and their impact on supply chains. Jeremy B. Ford, President and CEO of Hilltop, said, “Hilltop’s operating results for the first quarter of 2024 reflect a general continuation in market trends that were experienced throughout 2023. The elevated interest rate environment continues to impact our net interest margin primarily through increased borrowing costs. Additionally, a lack of housing inventory and pressured home buying affordability limited mortgage origination volumes. Despite these pressures, Hilltop’s robust liquidity position allowed for a return of high-cost deposits. “During the quarter, PlainsCapital Bank produced an annualized return on average assets of 1.20% highlighting the steady earnings power of the franchise. HilltopSecurities delivered a pre-tax margin of 16% on net revenues of $117 million, primarily due to strong results from the structured finance and wealth management business lines. As previously mentioned, PrimeLending’s results remain challenged due to elevated mortgage rates and suboptimal housing inventory across the country. From a consolidated perspective, we will continue to protect our strong balance sheet position and aim to produce results that improve our tangible book value per share over time.” First Quarter 2024 Highlights for Hilltop: The reversal of credit losses was $2.9 million during the first quarter of 2024, compared to a provision for credit losses of $1.3 million in the fourth quarter of 2023 and a provision for credit losses of $2.3 million in the first quarter of 2023; The reversal of credit losses during the first quarter of 2024 reflected a release in the allowance related to improvements to the U.S. economic outlook since the prior quarter, partially offset by increases in specific reserves within the banking segment. For the first quarter of 2024, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within the mortgage origination segment was $66.6 million, compared to $68.7 million in the first quarter of 2023, a 3.1% decrease; Mortgage loan origination production volume was $1.7 billion during the first quarter of 2024, compared to $1.7 billion in the first quarter of 2023; Net gains from mortgage loans sold to third parties increased to 221 basis points during the first quarter of 2024, compared to 189 basis points in the fourth quarter of 2023. Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the first quarter of 2024 were 0.74% and 5.23%, respectively, compared to 0.69% and 5.12%, respectively, for the first quarter of 2023; Hilltop’s book value per common share increased to $32.66 at March 31, 2024, compared to $32.58 at December 31, 2023; Hilltop’s total assets were $16.2 billion and $16.5 billion at March 31, 2024 and December 31, 2023, respectively; Loans1, net of allowance for credit losses, were $7.6 billion at each of March 31, 2024 and December 31, 2023, respectively; Non-accrual loans were $64.7 million, or 0.73% of total loans, at March 31, 2024, compared to $68.3 million, or 0.76% of total loans, at December 31, 2023; Non-accrual loans at March 31, 2024 included a single non-owner occupied commercial real estate credit relationship within our hotel/motel portfolio industry subsector that was reclassified since the prior period from loans held for investment to loans held for sale. Loans held for sale decreased by 10.8% from December 31, 2023 to $0.8 billion at March 31, 2024; Total deposits were $10.9 billion and $11.1 billion at March 31, 2024 and December 31, 2023, respectively; Total estimated uninsured deposits were $4.8 billion, or approximately 44% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $360.5 million, were $4.5 billion, or approximately 41% of total deposits, at March 31, 2024. Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.49% and a Common Equity Tier 1 Capital Ratio of 19.73% at March 31, 2024; Hilltop’s consolidated net interest margin4 decreased to 2.85% for the first quarter of 2024, compared to 2.96% in the fourth quarter of 2023; For the first quarter of 2024, noninterest income was $181.6 million, compared to $162.5 million in the first quarter of 2023, an 11.8% increase; For the first quarter of 2024, noninterest expense was $250.0 million, compared to $250.5 million in the first quarter of 2023, a 0.2% decrease; and Hilltop’s effective tax rate was 22.5% during the first quarter of 2024, compared to 11.6% during the same period in 2023. The effective tax rate for the first quarter of 2024 was higher than the applicable statutory rate primarily due to the impact of nondeductible expenses, nondeductible compensation expense and other permanent adjustments, partially offset by the discrete impact of restricted stock vesting during the quarter and investments in tax-exempt instruments. _____________________________ 1 “Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $332.6 million and $344.1 million at March 31, 2024 and December 31, 2023, respectively. 2 Capital ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period through December 31, 2024. 3 Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets. 4 Net interest margin is defined as net interest income divided by average interest-earning assets. Consolidated Financial and Other Information Consolidated Balance Sheets March 31, December 31, September 30, June 30, March 31, (in 000's) 2024 2023 2023 2023 2023 Cash and due from banks $ 1,710,066 $ 1,858,700 $ 1,513,747 $ 1,584,709 $ 1,764,081 Federal funds sold 650 650 3,650 650 743 Assets segregated for regulatory purposes 70,717 57,395 47,491 50,711 36,199 Securities purchased under agreements to resell 91,608 80,011 123,719 143,982 144,201 Securities: Trading, at fair value 657,700 515,991 578,901 696,649 692,908 Available for sale, at fair value, net (1) 1,480,555 1,507,595 1,456,238 1,526,869 1,641,571 Held to maturity, at amortized cost, net (1) 790,550 812,677 825,079 847,437 862,280 Equity, at fair value 315 321 264 258 231 2,929,120 2,836,584 2,860,482 3,071,213 3,196,990 Loans held for sale 842,324 943,846 1,058,806 1,333,044 1,040,138 Loans held for investment, net of unearned income 8,062,693 8,079,745 8,204,052 8,354,122 8,192,846 Allowance for credit losses (104,231 ) (111,413 ) (110,822 ) (109,306 ) (97,354 ) Loans held for investment, net 7,958,462 7,968,332 8,093,230 8,244,816 8,095,492 Broker-dealer and clearing organization receivables 1,473,561 1,573,931 1,460,352 1,474,177 1,560,246 Premises and equipment, net 165,557 168,856 172,097 176,574 180,132 Operating lease right-of-use assets 95,343 88,580 93,057 97,979 100,122 Mortgage servicing assets 95,591 96,662 104,951 95,101 103,314 Other assets 501,244 517,545 588,751 588,166 529,438 Goodwill 267,447 267,447 267,447 267,447 267,447 Other intangible assets, net 7,943 8,457 9,078 9,772 10,544 Total assets $ 16,209,633 $ 16,466,996 $ 16,396,858 $ 17,138,341 $ 17,029,087 Deposits: Noninterest-bearing $ 3,028,543 $ 3,007,101 $ 3,200,247 $ 3,451,438 $ 3,807,878 Interest-bearing 7,855,553 8,056,091 7,902,850 7,712,739 7,289,269 Total deposits 10,884,096 11,063,192 11,103,097 11,164,177 11,097,147 Broker-dealer and clearing organization payables 1,436,462 1,430,734 1,368,064 1,306,646 1,383,317 Short-term borrowings 892,574 900,038 882,999 1,628,637 1,572,794 Securities sold, not yet purchased, at fair value 60,562 34,872 51,527 74,761 51,497 Notes payable 347,273 347,145 347,020 364,531 376,410 Operating lease liabilities 114,518 109,002 114,334 119,999 122,878 Other liabilities 314,718 431,684 422,955 389,336 341,246 Total liabilities 14,050,203 14,316,667 14,289,996 15,048,087 14,945,289 Common stock 653 652 652 651 650 Additional paid-in capital 1,049,831 1,054,662 1,052,867 1,050,191 1,044,774 Accumulated other comprehensive loss (119,606 ) (121,505 ) (145,083 ) (131,718 ) (125,461 ) Retained earnings 1,201,013 1,189,222 1,171,250 1,144,624 1,136,901 Deferred compensation employee stock trust, net 115 228 340 450 446 Employee stock trust (142 ) (292 ) (446 ) (599 ) (599 ) Total Hilltop stockholders' equity 2,131,864 2,122,967 2,079,580 2,063,599 2,056,711 Noncontrolling interests 27,566 27,362 27,282 26,655 27,087 Total stockholders' equity 2,159,430 2,150,329 2,106,862 2,090,254 2,083,798 Total liabilities & stockholders' equity $ 16,209,633 $ 16,466,996 $ 16,396,858 $ 17,138,341 $ 17,029,087 _____________________________ (1) At March 31, 2024, the amortized cost of the available for sale securities portfolio was $1,594,167, while the fair value of the held to maturity securities portfolio was $702,843. Three Months Ended Consolidated Income Statements March 31, December 31, September 30, June 30, March 31, (in 000's, except per share data) 2024 2023 2023 2023 2023 Interest income: Loans, including fees $ 134,331 $ 138,096 $ 142,402 $ 138,397 $ 123,379 Securities borrowed 20,561 18,659 17,683 18,515 17,068 Securities: Taxable 26,241 28,763 27,166 26,719 25,602 Tax-exempt 2,415 2,545 2,464 2,566 3,188 Other 26,066 28,704 27,040 27,229 22,190 Total interest income 209,614 216,767 216,755 213,426 191,427 Interest expense: Deposits 69,144 68,339 64,290 54,726 35,824 Securities loaned 19,039 17,247 16,169 16,413 15,346 Short-term borrowings 11,588 13,495 14,212 17,706 12,444 Notes payable 3,590 3,596 4,026 3,973 3,853 Other 2,632 2,864 2,408 2,342 2,255 Total interest expense 105,993 105,541 101,105 95,160 69,722 Net interest income 103,621 111,226 115,650 118,266 121,705 Provision for (reversal of) credit losses (2,871 ) 1,265 (40 ) 14,836 2,331 Net interest income after provision for (reversal of) credit losses 106,492 109,961 115,690 103,430 119,374 Noninterest income: Net gains from sale of loans and other mortgage production income 40,197 36,387 47,262 48,535 39,966 Mortgage loan origination fees 26,438 32,844 41,478 41,440 28,777 Securities commissions and fees 35,557 33,002 28,044 29,606 31,223 Investment and securities advisory fees and commissions 30,226 35,780 39,662 32,037 26,848 Other 49,200 40,965 40,403 39,034 35,680 Total noninterest income 181,618 178,978 196,849 190,652 162,494 Noninterest expense: Employees' compensation and benefits 165,830 160,390 173,195 176,908 167,817 Occupancy and equipment, net 21,912 21,524 21,912 23,025 22,865 Professional services 9,731 13,170 12,639 12,594 10,697 Other 52,550 55,761 52,271 54,450 49,091 Total noninterest expense 250,023 250,845 260,017 266,977 250,470 Income before income taxes 38,087 38,094 52,522 27,105 31,398 Income tax expense 8,565 7,132 13,211 7,167 3,630 Net income 29,522 30,962 39,311 19,938 27,768 Less: Net income attributable to noncontrolling interest 1,854 2,291 2,269 1,805 1,968 Income attributable to Hilltop $ 27,668 $ 28,671 $ 37,042 $ 18,133 $ 25,800 Earnings per common share: Basic $ 0.42 $ 0.44 $ 0.57 $ 0.28 $ 0.40 Diluted $ 0.42 $ 0.44 $ 0.57 $ 0.28 $ 0.40 Cash dividends declared per common share $ 0.17 $ 0.16 $ 0.16 $ 0.16 $ 0.16 Weighted average shares outstanding: Basic 65,200 65,136 65,106 65,025 64,901 Diluted 65,214 65,138 65,108 65,054 64,954 Three Months Ended March 31, 2024 Segment Results Mortgage All Other and Hilltop (in 000's) Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 91,606 $ 12,269 $ (4,252 ) $ (3,103 ) $ 7,101 $ 103,621 Provision for (reversal of) credit losses (2,853 ) (18 ) — — — (2,871 ) Noninterest income 11,903 104,578 66,700 5,785 (7,348 ) 181,618 Noninterest expense 56,020 97,947 78,898 17,384 (226 ) 250,023 Income (loss) before taxes $ 50,342 $ 18,918 $ (16,450 ) $ (14,702 ) $ (21 ) $ 38,087 Three Months Ended March 31, December 31, September 30, June 30, March 31, Selected Financial Data 2024 2023 2023 2023 2023 Hilltop Consolidated: Return on average stockholders' equity 5.23 % 5.46 % 7.11 % 3.53 % 5.12 % Return on average assets 0.74 % 0.75 % 0.94 % 0.47 % 0.69 % Net interest margin (1) 2.85 % 2.96 % 3.02 % 3.03 % 3.28 % Net interest margin (taxable equivalent) (2): As reported 2.87 % 2.98 % 3.04 % 3.03 % 3.28 % Impact of purchase accounting 4 bps 4 bps 7 bps 9 bps 6 bps Book value per common share ($) 32.66 32.58 31.91 31.71 31.63 Shares outstanding, end of period (000's) 65,267 65,153 65,170 65,071 65,023 Dividend payout ratio (3) 40.06 % 36.35 % 28.12 % 57.37 % 40.25 % Banking Segment: Net interest margin (1) 3.00 % 2.94 % 3.08 % 3.11 % 3.40 % Net interest margin (taxable equivalent) (2): As reported 3.00 % 2.95 % 3.09 % 3.11 % 3.41 % Impact of purchase accounting 5 bps 5 bps 8 bps 11 bps 7 bps Accretion of discount on loans ($000's) 1,299 1,202 2,226 3,334 1,870 Net recoveries (charge-offs) ($000's) (4,311 ) (674 ) 1,556 (2,884 ) (419 ) Return on average assets 1.20 % 1.12 % 1.20 % 0.89 % 1.44 % Fee income ratio 11.5 % 11.2 % 10.5 % 10.0 % 9.6 % Efficiency ratio 54.1 % 53.2 % 51.4 % 51.2 % 48.4 % Employees' compensation and benefits ($000's) 32,389 29,420 30,641 30,603 32,681 Broker-Dealer Segment: Net revenue ($000's) (4) 116,847 119,989 118,703 113,241 104,498 Employees' compensation and benefits ($000's) 69,457 68,746 69,930 65,290 62,429 Variable compensation expense ($000's) 35,274 39,435 39,929 34,798 30,821 Compensation as a % of net revenue 59.4 % 57.3 % 58.9 % 57.7 % 59.7 % Pre-tax margin (5) 16.2 % 16.8 % 18.2 % 16.3 % 12.8 % Mortgage Origination Segment: Mortgage loan originations - volume ($000's): Home purchases 1,548,941 1,698,009 2,091,444 2,301,007 1,607,330 Refinancings 127,545 117,018 152,257 150,643 125,423 Total mortgage loan originations - volume 1,676,486 1,815,027 2,243,701 2,451,650 1,732,753 Mortgage loan sales - volume ($000's) 1,749,857 1,874,001 2,395,357 2,115,706 1,661,521 Net gains from mortgage loan sales (basis points): Loans sold to third parties 221 189 199 207 193 Impact of loans retained by banking segment (5 ) 0 (1 ) (6 ) (7 ) As reported 216 189 198 201 186 Mortgage servicing rights asset ($000's) (6) 95,591 96,662 104,951 95,101 103,314 Employees' compensation and benefits ($000's) 52,694 53,766 64,016 70,982 62,355 Variable compensation expense ($000's) 22,188 24,085 33,070 36,249 25,573 _____________________________ (1) Net interest margin is defined as net interest income divided by average interest-earning assets. (2) Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.6 million, $0.6 million, $0.6 million, $0.1 million and $0.1 million, respectively, for the periods presented and for the banking segment were $0.1 million, $0.2 million, $0.2 million, $0.2 million and $0.2 million, respectively, for the periods presented. (3) Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share. (4) Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income. (5) Pre-tax margin is defined as income before income taxes divided by net revenue. (6) Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation. March 31, December 31, September 30, June 30, March 31, Capital Ratios 2024 2023 2023 2023 2023 Tier 1 capital (to average assets): PlainsCapital 11.00 % 10.55 % 10.62 % 10.28 % 10.69 % Hilltop 12.49 % 12.23 % 11.92 % 11.47 % 11.82 % Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 15.87 % 15.44 % 15.31 % 14.48 % 14.97 % Hilltop 19.73 % 19.32 % 18.60 % 17.61 % 17.99 % Tier 1 capital (to risk-weighted assets): PlainsCapital 15.87 % 15.44 % 15.31 % 14.48 % 14.97 % Hilltop 19.73 % 19.32 % 18.60 % 17.61 % 17.99 % Total capital (to risk-weighted assets): PlainsCapital 17.06 % 16.58 % 16.45 % 15.56 % 15.94 % Hilltop 22.79 % 22.34 % 21.54 % 20.41 % 20.75 % March 31, December 31, September 30, June 30, March 31, Non-Performing Assets Portfolio Data 2024 2023 2023 2023 2023 Loans accounted for on a non-accrual basis ($000's): Commercial real estate: Non-owner occupied $ 34,661 $ 36,440 $ 2,375 $ 2,456 $ 1,038 Owner occupied 4,846 5,098 4,964 1,096 935 Commercial and industrial 12,165 9,502 10,190 21,442 10,807 Construction and land development 698 3,480 760 593 199 1-4 family residential 12,363 13,801 13,202 13,360 14,387 Consumer 3 6 7 9 12 Broker-dealer — — — — — Non-accrual loans ($000's) $ 64,736 $ 68,327 $ 31,498 $ 38,956 $ 27,378 Non-accrual loans as a % of total loans ($000's) 0.73 % 0.76 % 0.34 % 0.40 % 0.30 % Other real estate owned ($000's) 5,254 5,095 5,386 3,481 3,202 Other repossessed assets ($000's) 472 — — — — Non-performing assets ($000's) 70,462 73,422 36,884 42,437 30,580 Non-performing assets as a % of total assets ($000's) 0.43 % 0.45 % 0.22 % 0.25 % 0.18 % Loans past due 90 days or more and still accruing ($000's) (1) 112,799 115,090 106,346 130,036 114,523 _____________________________ (1) Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending. Three Months Ended March 31, 2024 2023 Average Interest Annualized Average Interest Annualized Net Interest Margin (Taxable Equivalent) Details (1) Outstanding Earned Yield or Outstanding Earned Yield or Balance or Paid Rate Balance or Paid Rate Assets Interest-earning assets Loans held for sale $ 802,098 $ 11,655 5.81 % $ 815,393 $ 10,724 5.26 % Loans held for investment, gross (2) 7,835,647 122,676 6.28 % 7,894,668 112,655 5.79 % Investment securities - taxable 2,619,081 26,241 4.01 % 2,813,734 25,602 3.64 % Investment securities - non-taxable (3) 293,420 2,992 4.08 % 412,543 3,286 3.19 % Federal funds sold and securities purchased under agreements to resell 94,108 1,631 6.95 % 163,601 2,368 5.87 % Interest-bearing deposits in other financial institutions 1,458,784 19,245 5.29 % 1,480,323 16,116 4.42 % Securities borrowed 1,442,870 20,561 5.64 % 1,419,797 17,068 4.81 % Other 39,885 5,190 52.19 % 63,219 3,706 23.77 % Interest-earning assets, gross (3) 14,585,893 210,191 5.78 % 15,063,278 191,525 5.16 % Allowance for credit losses (110,583 ) (97,060 ) Interest-earning assets, net 14,475,310 14,966,218 Noninterest-earning assets 1,522,337 1,336,908 Total assets $ 15,997,647 $ 16,303,126 Liabilities and Stockholders' Equity Interest-bearing liabilities Interest-bearing deposits $ 7,748,633 $ 69,144 3.58 % $ 7,239,556 $ 35,824 2.01 % Securities loaned 1,401,975 19,039 5.45 % 1,323,857 15,346 4.70 % Notes payable and other borrowings 1,327,889 17,810 5.38 % 1,490,075 18,552 5.05 % Total interest-bearing liabilities 10,478,497 105,993 4.06 % 10,053,488 69,722 2.81 % Noninterest-bearing liabilities Noninterest-bearing deposits 2,951,357 3,789,757 Other liabilities 420,355 390,107 Total liabilities 13,850,209 14,233,352 Stockholders’ equity 2,120,494 2,043,157 Noncontrolling interest 26,944 26,617 Total liabilities and stockholders' equity $ 15,997,647 $ 16,303,126 Net interest income (3) $ 104,198 $ 121,803 Net interest spread (3) 1.72 % 2.35 % Net interest margin (3) 2.87 % 3.28 % _____________________________ (1) Information presented on a consolidated basis. (2) Average balance includes non-accrual loans. (3) Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rate for the periods presented. The adjustment to interest income was $0.6 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Conference Call Information Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, April 19, 2024. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review first quarter 2024 financial results. Interested parties can access the conference call by dialing 800-579-2543 (North America) or 785-424-1789 (International) and then using the conference ID HH1Q24. The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop.com). About Hilltop Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Momentum Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At March 31, 2024, Hilltop employed approximately 3,740 people and operated approximately 325 locations in 48 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol “HTH.” Find more information at Hilltop.com, PlainsCapital.com, PrimeLending.com and HilltopSecurities.com. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “aim,” “anticipates,” “believes,” “building,” “continue,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “position,” “probable,” “progressing,” “projects,” “prudent,” “seeks,” “should,” “steady,” “target,” “view,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (ii) effectiveness of our data security controls in the face of cyber attacks and any legal, reputational and financial risks following a cybersecurity incident; (iii) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (iv) changes in the interest rate environment; (v) risks associated with concentration in real estate related loans and (vi) disruptions to the economy and financial services industry, and (vii) risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators, including increases in the cost of our deposit insurance assessments. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. View source version on businesswire.com: https://www.businesswire.com/news/home/20240418458905/en/Contacts Investor Relations Contact: Erik Yohe 214-525-4634 eyohe@hilltop.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Hilltop Holdings Inc. Announces Financial Results for First Quarter 2024 By: Hilltop Holdings Inc. via Business Wire April 18, 2024 at 16:45 PM EDT Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the first quarter of 2024. Hilltop produced income to common stockholders of $27.7 million, or $0.42 per diluted share, for the first quarter of 2024, compared to $25.8 million, or $0.40 per diluted share, for the first quarter of 2023. Hilltop’s financial results for the first quarter of 2024 included a decline in net interest income, partially offset by a reversal of credit losses due to an improved economic outlook within the banking segment, an increase in net revenues within certain of the broker-dealer segment’s business lines, and a decline in other mortgage production income, partially offset by an increase in net gains from sale of loans within the mortgage origination segment. Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.17 per common share payable on May 24, 2024, to all common stockholders of record as of the close of business on May 10, 2024. Additionally, during the first quarter of 2024, Hilltop paid $9.9 million to repurchase an aggregate of 320,042 shares of its common stock at an average price of $31.04 per share pursuant to the 2024 stock repurchase program. These shares were returned to the pool of authorized but unissued shares of common stock. The impacts of economic headwinds that began in 2022, and continued into 2024, remain uncertain and will depend on developments outside of our control, including, among others, the timing and significance of further changes in U.S. treasury yields and mortgage interest rates, exposure to increasing funding costs, inflationary pressures associated with compensation, occupancy and software costs and labor market conditions, and international armed conflicts and their impact on supply chains. Jeremy B. Ford, President and CEO of Hilltop, said, “Hilltop’s operating results for the first quarter of 2024 reflect a general continuation in market trends that were experienced throughout 2023. The elevated interest rate environment continues to impact our net interest margin primarily through increased borrowing costs. Additionally, a lack of housing inventory and pressured home buying affordability limited mortgage origination volumes. Despite these pressures, Hilltop’s robust liquidity position allowed for a return of high-cost deposits. “During the quarter, PlainsCapital Bank produced an annualized return on average assets of 1.20% highlighting the steady earnings power of the franchise. HilltopSecurities delivered a pre-tax margin of 16% on net revenues of $117 million, primarily due to strong results from the structured finance and wealth management business lines. As previously mentioned, PrimeLending’s results remain challenged due to elevated mortgage rates and suboptimal housing inventory across the country. From a consolidated perspective, we will continue to protect our strong balance sheet position and aim to produce results that improve our tangible book value per share over time.” First Quarter 2024 Highlights for Hilltop: The reversal of credit losses was $2.9 million during the first quarter of 2024, compared to a provision for credit losses of $1.3 million in the fourth quarter of 2023 and a provision for credit losses of $2.3 million in the first quarter of 2023; The reversal of credit losses during the first quarter of 2024 reflected a release in the allowance related to improvements to the U.S. economic outlook since the prior quarter, partially offset by increases in specific reserves within the banking segment. For the first quarter of 2024, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within the mortgage origination segment was $66.6 million, compared to $68.7 million in the first quarter of 2023, a 3.1% decrease; Mortgage loan origination production volume was $1.7 billion during the first quarter of 2024, compared to $1.7 billion in the first quarter of 2023; Net gains from mortgage loans sold to third parties increased to 221 basis points during the first quarter of 2024, compared to 189 basis points in the fourth quarter of 2023. Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the first quarter of 2024 were 0.74% and 5.23%, respectively, compared to 0.69% and 5.12%, respectively, for the first quarter of 2023; Hilltop’s book value per common share increased to $32.66 at March 31, 2024, compared to $32.58 at December 31, 2023; Hilltop’s total assets were $16.2 billion and $16.5 billion at March 31, 2024 and December 31, 2023, respectively; Loans1, net of allowance for credit losses, were $7.6 billion at each of March 31, 2024 and December 31, 2023, respectively; Non-accrual loans were $64.7 million, or 0.73% of total loans, at March 31, 2024, compared to $68.3 million, or 0.76% of total loans, at December 31, 2023; Non-accrual loans at March 31, 2024 included a single non-owner occupied commercial real estate credit relationship within our hotel/motel portfolio industry subsector that was reclassified since the prior period from loans held for investment to loans held for sale. Loans held for sale decreased by 10.8% from December 31, 2023 to $0.8 billion at March 31, 2024; Total deposits were $10.9 billion and $11.1 billion at March 31, 2024 and December 31, 2023, respectively; Total estimated uninsured deposits were $4.8 billion, or approximately 44% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $360.5 million, were $4.5 billion, or approximately 41% of total deposits, at March 31, 2024. Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.49% and a Common Equity Tier 1 Capital Ratio of 19.73% at March 31, 2024; Hilltop’s consolidated net interest margin4 decreased to 2.85% for the first quarter of 2024, compared to 2.96% in the fourth quarter of 2023; For the first quarter of 2024, noninterest income was $181.6 million, compared to $162.5 million in the first quarter of 2023, an 11.8% increase; For the first quarter of 2024, noninterest expense was $250.0 million, compared to $250.5 million in the first quarter of 2023, a 0.2% decrease; and Hilltop’s effective tax rate was 22.5% during the first quarter of 2024, compared to 11.6% during the same period in 2023. The effective tax rate for the first quarter of 2024 was higher than the applicable statutory rate primarily due to the impact of nondeductible expenses, nondeductible compensation expense and other permanent adjustments, partially offset by the discrete impact of restricted stock vesting during the quarter and investments in tax-exempt instruments. _____________________________ 1 “Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $332.6 million and $344.1 million at March 31, 2024 and December 31, 2023, respectively. 2 Capital ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period through December 31, 2024. 3 Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets. 4 Net interest margin is defined as net interest income divided by average interest-earning assets. Consolidated Financial and Other Information Consolidated Balance Sheets March 31, December 31, September 30, June 30, March 31, (in 000's) 2024 2023 2023 2023 2023 Cash and due from banks $ 1,710,066 $ 1,858,700 $ 1,513,747 $ 1,584,709 $ 1,764,081 Federal funds sold 650 650 3,650 650 743 Assets segregated for regulatory purposes 70,717 57,395 47,491 50,711 36,199 Securities purchased under agreements to resell 91,608 80,011 123,719 143,982 144,201 Securities: Trading, at fair value 657,700 515,991 578,901 696,649 692,908 Available for sale, at fair value, net (1) 1,480,555 1,507,595 1,456,238 1,526,869 1,641,571 Held to maturity, at amortized cost, net (1) 790,550 812,677 825,079 847,437 862,280 Equity, at fair value 315 321 264 258 231 2,929,120 2,836,584 2,860,482 3,071,213 3,196,990 Loans held for sale 842,324 943,846 1,058,806 1,333,044 1,040,138 Loans held for investment, net of unearned income 8,062,693 8,079,745 8,204,052 8,354,122 8,192,846 Allowance for credit losses (104,231 ) (111,413 ) (110,822 ) (109,306 ) (97,354 ) Loans held for investment, net 7,958,462 7,968,332 8,093,230 8,244,816 8,095,492 Broker-dealer and clearing organization receivables 1,473,561 1,573,931 1,460,352 1,474,177 1,560,246 Premises and equipment, net 165,557 168,856 172,097 176,574 180,132 Operating lease right-of-use assets 95,343 88,580 93,057 97,979 100,122 Mortgage servicing assets 95,591 96,662 104,951 95,101 103,314 Other assets 501,244 517,545 588,751 588,166 529,438 Goodwill 267,447 267,447 267,447 267,447 267,447 Other intangible assets, net 7,943 8,457 9,078 9,772 10,544 Total assets $ 16,209,633 $ 16,466,996 $ 16,396,858 $ 17,138,341 $ 17,029,087 Deposits: Noninterest-bearing $ 3,028,543 $ 3,007,101 $ 3,200,247 $ 3,451,438 $ 3,807,878 Interest-bearing 7,855,553 8,056,091 7,902,850 7,712,739 7,289,269 Total deposits 10,884,096 11,063,192 11,103,097 11,164,177 11,097,147 Broker-dealer and clearing organization payables 1,436,462 1,430,734 1,368,064 1,306,646 1,383,317 Short-term borrowings 892,574 900,038 882,999 1,628,637 1,572,794 Securities sold, not yet purchased, at fair value 60,562 34,872 51,527 74,761 51,497 Notes payable 347,273 347,145 347,020 364,531 376,410 Operating lease liabilities 114,518 109,002 114,334 119,999 122,878 Other liabilities 314,718 431,684 422,955 389,336 341,246 Total liabilities 14,050,203 14,316,667 14,289,996 15,048,087 14,945,289 Common stock 653 652 652 651 650 Additional paid-in capital 1,049,831 1,054,662 1,052,867 1,050,191 1,044,774 Accumulated other comprehensive loss (119,606 ) (121,505 ) (145,083 ) (131,718 ) (125,461 ) Retained earnings 1,201,013 1,189,222 1,171,250 1,144,624 1,136,901 Deferred compensation employee stock trust, net 115 228 340 450 446 Employee stock trust (142 ) (292 ) (446 ) (599 ) (599 ) Total Hilltop stockholders' equity 2,131,864 2,122,967 2,079,580 2,063,599 2,056,711 Noncontrolling interests 27,566 27,362 27,282 26,655 27,087 Total stockholders' equity 2,159,430 2,150,329 2,106,862 2,090,254 2,083,798 Total liabilities & stockholders' equity $ 16,209,633 $ 16,466,996 $ 16,396,858 $ 17,138,341 $ 17,029,087 _____________________________ (1) At March 31, 2024, the amortized cost of the available for sale securities portfolio was $1,594,167, while the fair value of the held to maturity securities portfolio was $702,843. Three Months Ended Consolidated Income Statements March 31, December 31, September 30, June 30, March 31, (in 000's, except per share data) 2024 2023 2023 2023 2023 Interest income: Loans, including fees $ 134,331 $ 138,096 $ 142,402 $ 138,397 $ 123,379 Securities borrowed 20,561 18,659 17,683 18,515 17,068 Securities: Taxable 26,241 28,763 27,166 26,719 25,602 Tax-exempt 2,415 2,545 2,464 2,566 3,188 Other 26,066 28,704 27,040 27,229 22,190 Total interest income 209,614 216,767 216,755 213,426 191,427 Interest expense: Deposits 69,144 68,339 64,290 54,726 35,824 Securities loaned 19,039 17,247 16,169 16,413 15,346 Short-term borrowings 11,588 13,495 14,212 17,706 12,444 Notes payable 3,590 3,596 4,026 3,973 3,853 Other 2,632 2,864 2,408 2,342 2,255 Total interest expense 105,993 105,541 101,105 95,160 69,722 Net interest income 103,621 111,226 115,650 118,266 121,705 Provision for (reversal of) credit losses (2,871 ) 1,265 (40 ) 14,836 2,331 Net interest income after provision for (reversal of) credit losses 106,492 109,961 115,690 103,430 119,374 Noninterest income: Net gains from sale of loans and other mortgage production income 40,197 36,387 47,262 48,535 39,966 Mortgage loan origination fees 26,438 32,844 41,478 41,440 28,777 Securities commissions and fees 35,557 33,002 28,044 29,606 31,223 Investment and securities advisory fees and commissions 30,226 35,780 39,662 32,037 26,848 Other 49,200 40,965 40,403 39,034 35,680 Total noninterest income 181,618 178,978 196,849 190,652 162,494 Noninterest expense: Employees' compensation and benefits 165,830 160,390 173,195 176,908 167,817 Occupancy and equipment, net 21,912 21,524 21,912 23,025 22,865 Professional services 9,731 13,170 12,639 12,594 10,697 Other 52,550 55,761 52,271 54,450 49,091 Total noninterest expense 250,023 250,845 260,017 266,977 250,470 Income before income taxes 38,087 38,094 52,522 27,105 31,398 Income tax expense 8,565 7,132 13,211 7,167 3,630 Net income 29,522 30,962 39,311 19,938 27,768 Less: Net income attributable to noncontrolling interest 1,854 2,291 2,269 1,805 1,968 Income attributable to Hilltop $ 27,668 $ 28,671 $ 37,042 $ 18,133 $ 25,800 Earnings per common share: Basic $ 0.42 $ 0.44 $ 0.57 $ 0.28 $ 0.40 Diluted $ 0.42 $ 0.44 $ 0.57 $ 0.28 $ 0.40 Cash dividends declared per common share $ 0.17 $ 0.16 $ 0.16 $ 0.16 $ 0.16 Weighted average shares outstanding: Basic 65,200 65,136 65,106 65,025 64,901 Diluted 65,214 65,138 65,108 65,054 64,954 Three Months Ended March 31, 2024 Segment Results Mortgage All Other and Hilltop (in 000's) Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 91,606 $ 12,269 $ (4,252 ) $ (3,103 ) $ 7,101 $ 103,621 Provision for (reversal of) credit losses (2,853 ) (18 ) — — — (2,871 ) Noninterest income 11,903 104,578 66,700 5,785 (7,348 ) 181,618 Noninterest expense 56,020 97,947 78,898 17,384 (226 ) 250,023 Income (loss) before taxes $ 50,342 $ 18,918 $ (16,450 ) $ (14,702 ) $ (21 ) $ 38,087 Three Months Ended March 31, December 31, September 30, June 30, March 31, Selected Financial Data 2024 2023 2023 2023 2023 Hilltop Consolidated: Return on average stockholders' equity 5.23 % 5.46 % 7.11 % 3.53 % 5.12 % Return on average assets 0.74 % 0.75 % 0.94 % 0.47 % 0.69 % Net interest margin (1) 2.85 % 2.96 % 3.02 % 3.03 % 3.28 % Net interest margin (taxable equivalent) (2): As reported 2.87 % 2.98 % 3.04 % 3.03 % 3.28 % Impact of purchase accounting 4 bps 4 bps 7 bps 9 bps 6 bps Book value per common share ($) 32.66 32.58 31.91 31.71 31.63 Shares outstanding, end of period (000's) 65,267 65,153 65,170 65,071 65,023 Dividend payout ratio (3) 40.06 % 36.35 % 28.12 % 57.37 % 40.25 % Banking Segment: Net interest margin (1) 3.00 % 2.94 % 3.08 % 3.11 % 3.40 % Net interest margin (taxable equivalent) (2): As reported 3.00 % 2.95 % 3.09 % 3.11 % 3.41 % Impact of purchase accounting 5 bps 5 bps 8 bps 11 bps 7 bps Accretion of discount on loans ($000's) 1,299 1,202 2,226 3,334 1,870 Net recoveries (charge-offs) ($000's) (4,311 ) (674 ) 1,556 (2,884 ) (419 ) Return on average assets 1.20 % 1.12 % 1.20 % 0.89 % 1.44 % Fee income ratio 11.5 % 11.2 % 10.5 % 10.0 % 9.6 % Efficiency ratio 54.1 % 53.2 % 51.4 % 51.2 % 48.4 % Employees' compensation and benefits ($000's) 32,389 29,420 30,641 30,603 32,681 Broker-Dealer Segment: Net revenue ($000's) (4) 116,847 119,989 118,703 113,241 104,498 Employees' compensation and benefits ($000's) 69,457 68,746 69,930 65,290 62,429 Variable compensation expense ($000's) 35,274 39,435 39,929 34,798 30,821 Compensation as a % of net revenue 59.4 % 57.3 % 58.9 % 57.7 % 59.7 % Pre-tax margin (5) 16.2 % 16.8 % 18.2 % 16.3 % 12.8 % Mortgage Origination Segment: Mortgage loan originations - volume ($000's): Home purchases 1,548,941 1,698,009 2,091,444 2,301,007 1,607,330 Refinancings 127,545 117,018 152,257 150,643 125,423 Total mortgage loan originations - volume 1,676,486 1,815,027 2,243,701 2,451,650 1,732,753 Mortgage loan sales - volume ($000's) 1,749,857 1,874,001 2,395,357 2,115,706 1,661,521 Net gains from mortgage loan sales (basis points): Loans sold to third parties 221 189 199 207 193 Impact of loans retained by banking segment (5 ) 0 (1 ) (6 ) (7 ) As reported 216 189 198 201 186 Mortgage servicing rights asset ($000's) (6) 95,591 96,662 104,951 95,101 103,314 Employees' compensation and benefits ($000's) 52,694 53,766 64,016 70,982 62,355 Variable compensation expense ($000's) 22,188 24,085 33,070 36,249 25,573 _____________________________ (1) Net interest margin is defined as net interest income divided by average interest-earning assets. (2) Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.6 million, $0.6 million, $0.6 million, $0.1 million and $0.1 million, respectively, for the periods presented and for the banking segment were $0.1 million, $0.2 million, $0.2 million, $0.2 million and $0.2 million, respectively, for the periods presented. (3) Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share. (4) Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income. (5) Pre-tax margin is defined as income before income taxes divided by net revenue. (6) Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation. March 31, December 31, September 30, June 30, March 31, Capital Ratios 2024 2023 2023 2023 2023 Tier 1 capital (to average assets): PlainsCapital 11.00 % 10.55 % 10.62 % 10.28 % 10.69 % Hilltop 12.49 % 12.23 % 11.92 % 11.47 % 11.82 % Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 15.87 % 15.44 % 15.31 % 14.48 % 14.97 % Hilltop 19.73 % 19.32 % 18.60 % 17.61 % 17.99 % Tier 1 capital (to risk-weighted assets): PlainsCapital 15.87 % 15.44 % 15.31 % 14.48 % 14.97 % Hilltop 19.73 % 19.32 % 18.60 % 17.61 % 17.99 % Total capital (to risk-weighted assets): PlainsCapital 17.06 % 16.58 % 16.45 % 15.56 % 15.94 % Hilltop 22.79 % 22.34 % 21.54 % 20.41 % 20.75 % March 31, December 31, September 30, June 30, March 31, Non-Performing Assets Portfolio Data 2024 2023 2023 2023 2023 Loans accounted for on a non-accrual basis ($000's): Commercial real estate: Non-owner occupied $ 34,661 $ 36,440 $ 2,375 $ 2,456 $ 1,038 Owner occupied 4,846 5,098 4,964 1,096 935 Commercial and industrial 12,165 9,502 10,190 21,442 10,807 Construction and land development 698 3,480 760 593 199 1-4 family residential 12,363 13,801 13,202 13,360 14,387 Consumer 3 6 7 9 12 Broker-dealer — — — — — Non-accrual loans ($000's) $ 64,736 $ 68,327 $ 31,498 $ 38,956 $ 27,378 Non-accrual loans as a % of total loans ($000's) 0.73 % 0.76 % 0.34 % 0.40 % 0.30 % Other real estate owned ($000's) 5,254 5,095 5,386 3,481 3,202 Other repossessed assets ($000's) 472 — — — — Non-performing assets ($000's) 70,462 73,422 36,884 42,437 30,580 Non-performing assets as a % of total assets ($000's) 0.43 % 0.45 % 0.22 % 0.25 % 0.18 % Loans past due 90 days or more and still accruing ($000's) (1) 112,799 115,090 106,346 130,036 114,523 _____________________________ (1) Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending. Three Months Ended March 31, 2024 2023 Average Interest Annualized Average Interest Annualized Net Interest Margin (Taxable Equivalent) Details (1) Outstanding Earned Yield or Outstanding Earned Yield or Balance or Paid Rate Balance or Paid Rate Assets Interest-earning assets Loans held for sale $ 802,098 $ 11,655 5.81 % $ 815,393 $ 10,724 5.26 % Loans held for investment, gross (2) 7,835,647 122,676 6.28 % 7,894,668 112,655 5.79 % Investment securities - taxable 2,619,081 26,241 4.01 % 2,813,734 25,602 3.64 % Investment securities - non-taxable (3) 293,420 2,992 4.08 % 412,543 3,286 3.19 % Federal funds sold and securities purchased under agreements to resell 94,108 1,631 6.95 % 163,601 2,368 5.87 % Interest-bearing deposits in other financial institutions 1,458,784 19,245 5.29 % 1,480,323 16,116 4.42 % Securities borrowed 1,442,870 20,561 5.64 % 1,419,797 17,068 4.81 % Other 39,885 5,190 52.19 % 63,219 3,706 23.77 % Interest-earning assets, gross (3) 14,585,893 210,191 5.78 % 15,063,278 191,525 5.16 % Allowance for credit losses (110,583 ) (97,060 ) Interest-earning assets, net 14,475,310 14,966,218 Noninterest-earning assets 1,522,337 1,336,908 Total assets $ 15,997,647 $ 16,303,126 Liabilities and Stockholders' Equity Interest-bearing liabilities Interest-bearing deposits $ 7,748,633 $ 69,144 3.58 % $ 7,239,556 $ 35,824 2.01 % Securities loaned 1,401,975 19,039 5.45 % 1,323,857 15,346 4.70 % Notes payable and other borrowings 1,327,889 17,810 5.38 % 1,490,075 18,552 5.05 % Total interest-bearing liabilities 10,478,497 105,993 4.06 % 10,053,488 69,722 2.81 % Noninterest-bearing liabilities Noninterest-bearing deposits 2,951,357 3,789,757 Other liabilities 420,355 390,107 Total liabilities 13,850,209 14,233,352 Stockholders’ equity 2,120,494 2,043,157 Noncontrolling interest 26,944 26,617 Total liabilities and stockholders' equity $ 15,997,647 $ 16,303,126 Net interest income (3) $ 104,198 $ 121,803 Net interest spread (3) 1.72 % 2.35 % Net interest margin (3) 2.87 % 3.28 % _____________________________ (1) Information presented on a consolidated basis. (2) Average balance includes non-accrual loans. (3) Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rate for the periods presented. The adjustment to interest income was $0.6 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Conference Call Information Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, April 19, 2024. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review first quarter 2024 financial results. Interested parties can access the conference call by dialing 800-579-2543 (North America) or 785-424-1789 (International) and then using the conference ID HH1Q24. The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop.com). About Hilltop Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Momentum Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At March 31, 2024, Hilltop employed approximately 3,740 people and operated approximately 325 locations in 48 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol “HTH.” Find more information at Hilltop.com, PlainsCapital.com, PrimeLending.com and HilltopSecurities.com. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “aim,” “anticipates,” “believes,” “building,” “continue,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “position,” “probable,” “progressing,” “projects,” “prudent,” “seeks,” “should,” “steady,” “target,” “view,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (ii) effectiveness of our data security controls in the face of cyber attacks and any legal, reputational and financial risks following a cybersecurity incident; (iii) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (iv) changes in the interest rate environment; (v) risks associated with concentration in real estate related loans and (vi) disruptions to the economy and financial services industry, and (vii) risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators, including increases in the cost of our deposit insurance assessments. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. View source version on businesswire.com: https://www.businesswire.com/news/home/20240418458905/en/Contacts Investor Relations Contact: Erik Yohe 214-525-4634 eyohe@hilltop.com
Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the first quarter of 2024. Hilltop produced income to common stockholders of $27.7 million, or $0.42 per diluted share, for the first quarter of 2024, compared to $25.8 million, or $0.40 per diluted share, for the first quarter of 2023. Hilltop’s financial results for the first quarter of 2024 included a decline in net interest income, partially offset by a reversal of credit losses due to an improved economic outlook within the banking segment, an increase in net revenues within certain of the broker-dealer segment’s business lines, and a decline in other mortgage production income, partially offset by an increase in net gains from sale of loans within the mortgage origination segment. Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.17 per common share payable on May 24, 2024, to all common stockholders of record as of the close of business on May 10, 2024. Additionally, during the first quarter of 2024, Hilltop paid $9.9 million to repurchase an aggregate of 320,042 shares of its common stock at an average price of $31.04 per share pursuant to the 2024 stock repurchase program. These shares were returned to the pool of authorized but unissued shares of common stock. The impacts of economic headwinds that began in 2022, and continued into 2024, remain uncertain and will depend on developments outside of our control, including, among others, the timing and significance of further changes in U.S. treasury yields and mortgage interest rates, exposure to increasing funding costs, inflationary pressures associated with compensation, occupancy and software costs and labor market conditions, and international armed conflicts and their impact on supply chains. Jeremy B. Ford, President and CEO of Hilltop, said, “Hilltop’s operating results for the first quarter of 2024 reflect a general continuation in market trends that were experienced throughout 2023. The elevated interest rate environment continues to impact our net interest margin primarily through increased borrowing costs. Additionally, a lack of housing inventory and pressured home buying affordability limited mortgage origination volumes. Despite these pressures, Hilltop’s robust liquidity position allowed for a return of high-cost deposits. “During the quarter, PlainsCapital Bank produced an annualized return on average assets of 1.20% highlighting the steady earnings power of the franchise. HilltopSecurities delivered a pre-tax margin of 16% on net revenues of $117 million, primarily due to strong results from the structured finance and wealth management business lines. As previously mentioned, PrimeLending’s results remain challenged due to elevated mortgage rates and suboptimal housing inventory across the country. From a consolidated perspective, we will continue to protect our strong balance sheet position and aim to produce results that improve our tangible book value per share over time.” First Quarter 2024 Highlights for Hilltop: The reversal of credit losses was $2.9 million during the first quarter of 2024, compared to a provision for credit losses of $1.3 million in the fourth quarter of 2023 and a provision for credit losses of $2.3 million in the first quarter of 2023; The reversal of credit losses during the first quarter of 2024 reflected a release in the allowance related to improvements to the U.S. economic outlook since the prior quarter, partially offset by increases in specific reserves within the banking segment. For the first quarter of 2024, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within the mortgage origination segment was $66.6 million, compared to $68.7 million in the first quarter of 2023, a 3.1% decrease; Mortgage loan origination production volume was $1.7 billion during the first quarter of 2024, compared to $1.7 billion in the first quarter of 2023; Net gains from mortgage loans sold to third parties increased to 221 basis points during the first quarter of 2024, compared to 189 basis points in the fourth quarter of 2023. Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the first quarter of 2024 were 0.74% and 5.23%, respectively, compared to 0.69% and 5.12%, respectively, for the first quarter of 2023; Hilltop’s book value per common share increased to $32.66 at March 31, 2024, compared to $32.58 at December 31, 2023; Hilltop’s total assets were $16.2 billion and $16.5 billion at March 31, 2024 and December 31, 2023, respectively; Loans1, net of allowance for credit losses, were $7.6 billion at each of March 31, 2024 and December 31, 2023, respectively; Non-accrual loans were $64.7 million, or 0.73% of total loans, at March 31, 2024, compared to $68.3 million, or 0.76% of total loans, at December 31, 2023; Non-accrual loans at March 31, 2024 included a single non-owner occupied commercial real estate credit relationship within our hotel/motel portfolio industry subsector that was reclassified since the prior period from loans held for investment to loans held for sale. Loans held for sale decreased by 10.8% from December 31, 2023 to $0.8 billion at March 31, 2024; Total deposits were $10.9 billion and $11.1 billion at March 31, 2024 and December 31, 2023, respectively; Total estimated uninsured deposits were $4.8 billion, or approximately 44% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $360.5 million, were $4.5 billion, or approximately 41% of total deposits, at March 31, 2024. Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.49% and a Common Equity Tier 1 Capital Ratio of 19.73% at March 31, 2024; Hilltop’s consolidated net interest margin4 decreased to 2.85% for the first quarter of 2024, compared to 2.96% in the fourth quarter of 2023; For the first quarter of 2024, noninterest income was $181.6 million, compared to $162.5 million in the first quarter of 2023, an 11.8% increase; For the first quarter of 2024, noninterest expense was $250.0 million, compared to $250.5 million in the first quarter of 2023, a 0.2% decrease; and Hilltop’s effective tax rate was 22.5% during the first quarter of 2024, compared to 11.6% during the same period in 2023. The effective tax rate for the first quarter of 2024 was higher than the applicable statutory rate primarily due to the impact of nondeductible expenses, nondeductible compensation expense and other permanent adjustments, partially offset by the discrete impact of restricted stock vesting during the quarter and investments in tax-exempt instruments. _____________________________ 1 “Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $332.6 million and $344.1 million at March 31, 2024 and December 31, 2023, respectively. 2 Capital ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period through December 31, 2024. 3 Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets. 4 Net interest margin is defined as net interest income divided by average interest-earning assets. Consolidated Financial and Other Information Consolidated Balance Sheets March 31, December 31, September 30, June 30, March 31, (in 000's) 2024 2023 2023 2023 2023 Cash and due from banks $ 1,710,066 $ 1,858,700 $ 1,513,747 $ 1,584,709 $ 1,764,081 Federal funds sold 650 650 3,650 650 743 Assets segregated for regulatory purposes 70,717 57,395 47,491 50,711 36,199 Securities purchased under agreements to resell 91,608 80,011 123,719 143,982 144,201 Securities: Trading, at fair value 657,700 515,991 578,901 696,649 692,908 Available for sale, at fair value, net (1) 1,480,555 1,507,595 1,456,238 1,526,869 1,641,571 Held to maturity, at amortized cost, net (1) 790,550 812,677 825,079 847,437 862,280 Equity, at fair value 315 321 264 258 231 2,929,120 2,836,584 2,860,482 3,071,213 3,196,990 Loans held for sale 842,324 943,846 1,058,806 1,333,044 1,040,138 Loans held for investment, net of unearned income 8,062,693 8,079,745 8,204,052 8,354,122 8,192,846 Allowance for credit losses (104,231 ) (111,413 ) (110,822 ) (109,306 ) (97,354 ) Loans held for investment, net 7,958,462 7,968,332 8,093,230 8,244,816 8,095,492 Broker-dealer and clearing organization receivables 1,473,561 1,573,931 1,460,352 1,474,177 1,560,246 Premises and equipment, net 165,557 168,856 172,097 176,574 180,132 Operating lease right-of-use assets 95,343 88,580 93,057 97,979 100,122 Mortgage servicing assets 95,591 96,662 104,951 95,101 103,314 Other assets 501,244 517,545 588,751 588,166 529,438 Goodwill 267,447 267,447 267,447 267,447 267,447 Other intangible assets, net 7,943 8,457 9,078 9,772 10,544 Total assets $ 16,209,633 $ 16,466,996 $ 16,396,858 $ 17,138,341 $ 17,029,087 Deposits: Noninterest-bearing $ 3,028,543 $ 3,007,101 $ 3,200,247 $ 3,451,438 $ 3,807,878 Interest-bearing 7,855,553 8,056,091 7,902,850 7,712,739 7,289,269 Total deposits 10,884,096 11,063,192 11,103,097 11,164,177 11,097,147 Broker-dealer and clearing organization payables 1,436,462 1,430,734 1,368,064 1,306,646 1,383,317 Short-term borrowings 892,574 900,038 882,999 1,628,637 1,572,794 Securities sold, not yet purchased, at fair value 60,562 34,872 51,527 74,761 51,497 Notes payable 347,273 347,145 347,020 364,531 376,410 Operating lease liabilities 114,518 109,002 114,334 119,999 122,878 Other liabilities 314,718 431,684 422,955 389,336 341,246 Total liabilities 14,050,203 14,316,667 14,289,996 15,048,087 14,945,289 Common stock 653 652 652 651 650 Additional paid-in capital 1,049,831 1,054,662 1,052,867 1,050,191 1,044,774 Accumulated other comprehensive loss (119,606 ) (121,505 ) (145,083 ) (131,718 ) (125,461 ) Retained earnings 1,201,013 1,189,222 1,171,250 1,144,624 1,136,901 Deferred compensation employee stock trust, net 115 228 340 450 446 Employee stock trust (142 ) (292 ) (446 ) (599 ) (599 ) Total Hilltop stockholders' equity 2,131,864 2,122,967 2,079,580 2,063,599 2,056,711 Noncontrolling interests 27,566 27,362 27,282 26,655 27,087 Total stockholders' equity 2,159,430 2,150,329 2,106,862 2,090,254 2,083,798 Total liabilities & stockholders' equity $ 16,209,633 $ 16,466,996 $ 16,396,858 $ 17,138,341 $ 17,029,087 _____________________________ (1) At March 31, 2024, the amortized cost of the available for sale securities portfolio was $1,594,167, while the fair value of the held to maturity securities portfolio was $702,843. Three Months Ended Consolidated Income Statements March 31, December 31, September 30, June 30, March 31, (in 000's, except per share data) 2024 2023 2023 2023 2023 Interest income: Loans, including fees $ 134,331 $ 138,096 $ 142,402 $ 138,397 $ 123,379 Securities borrowed 20,561 18,659 17,683 18,515 17,068 Securities: Taxable 26,241 28,763 27,166 26,719 25,602 Tax-exempt 2,415 2,545 2,464 2,566 3,188 Other 26,066 28,704 27,040 27,229 22,190 Total interest income 209,614 216,767 216,755 213,426 191,427 Interest expense: Deposits 69,144 68,339 64,290 54,726 35,824 Securities loaned 19,039 17,247 16,169 16,413 15,346 Short-term borrowings 11,588 13,495 14,212 17,706 12,444 Notes payable 3,590 3,596 4,026 3,973 3,853 Other 2,632 2,864 2,408 2,342 2,255 Total interest expense 105,993 105,541 101,105 95,160 69,722 Net interest income 103,621 111,226 115,650 118,266 121,705 Provision for (reversal of) credit losses (2,871 ) 1,265 (40 ) 14,836 2,331 Net interest income after provision for (reversal of) credit losses 106,492 109,961 115,690 103,430 119,374 Noninterest income: Net gains from sale of loans and other mortgage production income 40,197 36,387 47,262 48,535 39,966 Mortgage loan origination fees 26,438 32,844 41,478 41,440 28,777 Securities commissions and fees 35,557 33,002 28,044 29,606 31,223 Investment and securities advisory fees and commissions 30,226 35,780 39,662 32,037 26,848 Other 49,200 40,965 40,403 39,034 35,680 Total noninterest income 181,618 178,978 196,849 190,652 162,494 Noninterest expense: Employees' compensation and benefits 165,830 160,390 173,195 176,908 167,817 Occupancy and equipment, net 21,912 21,524 21,912 23,025 22,865 Professional services 9,731 13,170 12,639 12,594 10,697 Other 52,550 55,761 52,271 54,450 49,091 Total noninterest expense 250,023 250,845 260,017 266,977 250,470 Income before income taxes 38,087 38,094 52,522 27,105 31,398 Income tax expense 8,565 7,132 13,211 7,167 3,630 Net income 29,522 30,962 39,311 19,938 27,768 Less: Net income attributable to noncontrolling interest 1,854 2,291 2,269 1,805 1,968 Income attributable to Hilltop $ 27,668 $ 28,671 $ 37,042 $ 18,133 $ 25,800 Earnings per common share: Basic $ 0.42 $ 0.44 $ 0.57 $ 0.28 $ 0.40 Diluted $ 0.42 $ 0.44 $ 0.57 $ 0.28 $ 0.40 Cash dividends declared per common share $ 0.17 $ 0.16 $ 0.16 $ 0.16 $ 0.16 Weighted average shares outstanding: Basic 65,200 65,136 65,106 65,025 64,901 Diluted 65,214 65,138 65,108 65,054 64,954 Three Months Ended March 31, 2024 Segment Results Mortgage All Other and Hilltop (in 000's) Banking Broker-Dealer Origination Corporate Eliminations Consolidated Net interest income (expense) $ 91,606 $ 12,269 $ (4,252 ) $ (3,103 ) $ 7,101 $ 103,621 Provision for (reversal of) credit losses (2,853 ) (18 ) — — — (2,871 ) Noninterest income 11,903 104,578 66,700 5,785 (7,348 ) 181,618 Noninterest expense 56,020 97,947 78,898 17,384 (226 ) 250,023 Income (loss) before taxes $ 50,342 $ 18,918 $ (16,450 ) $ (14,702 ) $ (21 ) $ 38,087 Three Months Ended March 31, December 31, September 30, June 30, March 31, Selected Financial Data 2024 2023 2023 2023 2023 Hilltop Consolidated: Return on average stockholders' equity 5.23 % 5.46 % 7.11 % 3.53 % 5.12 % Return on average assets 0.74 % 0.75 % 0.94 % 0.47 % 0.69 % Net interest margin (1) 2.85 % 2.96 % 3.02 % 3.03 % 3.28 % Net interest margin (taxable equivalent) (2): As reported 2.87 % 2.98 % 3.04 % 3.03 % 3.28 % Impact of purchase accounting 4 bps 4 bps 7 bps 9 bps 6 bps Book value per common share ($) 32.66 32.58 31.91 31.71 31.63 Shares outstanding, end of period (000's) 65,267 65,153 65,170 65,071 65,023 Dividend payout ratio (3) 40.06 % 36.35 % 28.12 % 57.37 % 40.25 % Banking Segment: Net interest margin (1) 3.00 % 2.94 % 3.08 % 3.11 % 3.40 % Net interest margin (taxable equivalent) (2): As reported 3.00 % 2.95 % 3.09 % 3.11 % 3.41 % Impact of purchase accounting 5 bps 5 bps 8 bps 11 bps 7 bps Accretion of discount on loans ($000's) 1,299 1,202 2,226 3,334 1,870 Net recoveries (charge-offs) ($000's) (4,311 ) (674 ) 1,556 (2,884 ) (419 ) Return on average assets 1.20 % 1.12 % 1.20 % 0.89 % 1.44 % Fee income ratio 11.5 % 11.2 % 10.5 % 10.0 % 9.6 % Efficiency ratio 54.1 % 53.2 % 51.4 % 51.2 % 48.4 % Employees' compensation and benefits ($000's) 32,389 29,420 30,641 30,603 32,681 Broker-Dealer Segment: Net revenue ($000's) (4) 116,847 119,989 118,703 113,241 104,498 Employees' compensation and benefits ($000's) 69,457 68,746 69,930 65,290 62,429 Variable compensation expense ($000's) 35,274 39,435 39,929 34,798 30,821 Compensation as a % of net revenue 59.4 % 57.3 % 58.9 % 57.7 % 59.7 % Pre-tax margin (5) 16.2 % 16.8 % 18.2 % 16.3 % 12.8 % Mortgage Origination Segment: Mortgage loan originations - volume ($000's): Home purchases 1,548,941 1,698,009 2,091,444 2,301,007 1,607,330 Refinancings 127,545 117,018 152,257 150,643 125,423 Total mortgage loan originations - volume 1,676,486 1,815,027 2,243,701 2,451,650 1,732,753 Mortgage loan sales - volume ($000's) 1,749,857 1,874,001 2,395,357 2,115,706 1,661,521 Net gains from mortgage loan sales (basis points): Loans sold to third parties 221 189 199 207 193 Impact of loans retained by banking segment (5 ) 0 (1 ) (6 ) (7 ) As reported 216 189 198 201 186 Mortgage servicing rights asset ($000's) (6) 95,591 96,662 104,951 95,101 103,314 Employees' compensation and benefits ($000's) 52,694 53,766 64,016 70,982 62,355 Variable compensation expense ($000's) 22,188 24,085 33,070 36,249 25,573 _____________________________ (1) Net interest margin is defined as net interest income divided by average interest-earning assets. (2) Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.6 million, $0.6 million, $0.6 million, $0.1 million and $0.1 million, respectively, for the periods presented and for the banking segment were $0.1 million, $0.2 million, $0.2 million, $0.2 million and $0.2 million, respectively, for the periods presented. (3) Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share. (4) Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income. (5) Pre-tax margin is defined as income before income taxes divided by net revenue. (6) Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation. March 31, December 31, September 30, June 30, March 31, Capital Ratios 2024 2023 2023 2023 2023 Tier 1 capital (to average assets): PlainsCapital 11.00 % 10.55 % 10.62 % 10.28 % 10.69 % Hilltop 12.49 % 12.23 % 11.92 % 11.47 % 11.82 % Common equity Tier 1 capital (to risk-weighted assets): PlainsCapital 15.87 % 15.44 % 15.31 % 14.48 % 14.97 % Hilltop 19.73 % 19.32 % 18.60 % 17.61 % 17.99 % Tier 1 capital (to risk-weighted assets): PlainsCapital 15.87 % 15.44 % 15.31 % 14.48 % 14.97 % Hilltop 19.73 % 19.32 % 18.60 % 17.61 % 17.99 % Total capital (to risk-weighted assets): PlainsCapital 17.06 % 16.58 % 16.45 % 15.56 % 15.94 % Hilltop 22.79 % 22.34 % 21.54 % 20.41 % 20.75 % March 31, December 31, September 30, June 30, March 31, Non-Performing Assets Portfolio Data 2024 2023 2023 2023 2023 Loans accounted for on a non-accrual basis ($000's): Commercial real estate: Non-owner occupied $ 34,661 $ 36,440 $ 2,375 $ 2,456 $ 1,038 Owner occupied 4,846 5,098 4,964 1,096 935 Commercial and industrial 12,165 9,502 10,190 21,442 10,807 Construction and land development 698 3,480 760 593 199 1-4 family residential 12,363 13,801 13,202 13,360 14,387 Consumer 3 6 7 9 12 Broker-dealer — — — — — Non-accrual loans ($000's) $ 64,736 $ 68,327 $ 31,498 $ 38,956 $ 27,378 Non-accrual loans as a % of total loans ($000's) 0.73 % 0.76 % 0.34 % 0.40 % 0.30 % Other real estate owned ($000's) 5,254 5,095 5,386 3,481 3,202 Other repossessed assets ($000's) 472 — — — — Non-performing assets ($000's) 70,462 73,422 36,884 42,437 30,580 Non-performing assets as a % of total assets ($000's) 0.43 % 0.45 % 0.22 % 0.25 % 0.18 % Loans past due 90 days or more and still accruing ($000's) (1) 112,799 115,090 106,346 130,036 114,523 _____________________________ (1) Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending. Three Months Ended March 31, 2024 2023 Average Interest Annualized Average Interest Annualized Net Interest Margin (Taxable Equivalent) Details (1) Outstanding Earned Yield or Outstanding Earned Yield or Balance or Paid Rate Balance or Paid Rate Assets Interest-earning assets Loans held for sale $ 802,098 $ 11,655 5.81 % $ 815,393 $ 10,724 5.26 % Loans held for investment, gross (2) 7,835,647 122,676 6.28 % 7,894,668 112,655 5.79 % Investment securities - taxable 2,619,081 26,241 4.01 % 2,813,734 25,602 3.64 % Investment securities - non-taxable (3) 293,420 2,992 4.08 % 412,543 3,286 3.19 % Federal funds sold and securities purchased under agreements to resell 94,108 1,631 6.95 % 163,601 2,368 5.87 % Interest-bearing deposits in other financial institutions 1,458,784 19,245 5.29 % 1,480,323 16,116 4.42 % Securities borrowed 1,442,870 20,561 5.64 % 1,419,797 17,068 4.81 % Other 39,885 5,190 52.19 % 63,219 3,706 23.77 % Interest-earning assets, gross (3) 14,585,893 210,191 5.78 % 15,063,278 191,525 5.16 % Allowance for credit losses (110,583 ) (97,060 ) Interest-earning assets, net 14,475,310 14,966,218 Noninterest-earning assets 1,522,337 1,336,908 Total assets $ 15,997,647 $ 16,303,126 Liabilities and Stockholders' Equity Interest-bearing liabilities Interest-bearing deposits $ 7,748,633 $ 69,144 3.58 % $ 7,239,556 $ 35,824 2.01 % Securities loaned 1,401,975 19,039 5.45 % 1,323,857 15,346 4.70 % Notes payable and other borrowings 1,327,889 17,810 5.38 % 1,490,075 18,552 5.05 % Total interest-bearing liabilities 10,478,497 105,993 4.06 % 10,053,488 69,722 2.81 % Noninterest-bearing liabilities Noninterest-bearing deposits 2,951,357 3,789,757 Other liabilities 420,355 390,107 Total liabilities 13,850,209 14,233,352 Stockholders’ equity 2,120,494 2,043,157 Noncontrolling interest 26,944 26,617 Total liabilities and stockholders' equity $ 15,997,647 $ 16,303,126 Net interest income (3) $ 104,198 $ 121,803 Net interest spread (3) 1.72 % 2.35 % Net interest margin (3) 2.87 % 3.28 % _____________________________ (1) Information presented on a consolidated basis. (2) Average balance includes non-accrual loans. (3) Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rate for the periods presented. The adjustment to interest income was $0.6 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Conference Call Information Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, April 19, 2024. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review first quarter 2024 financial results. Interested parties can access the conference call by dialing 800-579-2543 (North America) or 785-424-1789 (International) and then using the conference ID HH1Q24. The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop.com). About Hilltop Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Momentum Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At March 31, 2024, Hilltop employed approximately 3,740 people and operated approximately 325 locations in 48 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol “HTH.” Find more information at Hilltop.com, PlainsCapital.com, PrimeLending.com and HilltopSecurities.com. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “aim,” “anticipates,” “believes,” “building,” “continue,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “position,” “probable,” “progressing,” “projects,” “prudent,” “seeks,” “should,” “steady,” “target,” “view,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (ii) effectiveness of our data security controls in the face of cyber attacks and any legal, reputational and financial risks following a cybersecurity incident; (iii) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (iv) changes in the interest rate environment; (v) risks associated with concentration in real estate related loans and (vi) disruptions to the economy and financial services industry, and (vii) risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators, including increases in the cost of our deposit insurance assessments. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. View source version on businesswire.com: https://www.businesswire.com/news/home/20240418458905/en/