Hilltop Holdings Inc. Announces Financial Results for First Quarter 2024

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Investors seeking to gauge the financial health of Hilltop Holdings Inc. would note the marginal increase in income to common stockholders for Q1 2024, an uptick from $25.8 million in Q1 2023 to $27.7 million in Q1 2024. This indicates a company maintaining profitability despite a volatile economic climate. The diluted earnings per share also slightly rose, from $0.40 to $0.42, suggesting a stable return on investment for shareholders. However, the reported decline in net interest income, which forms a core part of a bank's revenue stream, could be an area of concern as it reflects the industry-wide squeeze on margins due to increased borrowing costs.

From a shareholder value perspective, the declaration of a quarterly cash dividend of $0.17 per common share signals a continued commitment to returning value to shareholders, an attractive facet for income-focused investors. The share repurchase at an average price of $31.04 also indicates management's belief in the company's intrinsic value relative to market price, although this merits scrutiny against broader market valuation metrics.

The disclosure of economic uncertainties and their potential impacts provides transparency. However, investors should remain cognizant of external economic factors such as U.S. treasury yields, mortgage interest rates and inflationary pressures that can affect Hilltop's performance. The shift of a commercial credit relationship within the hotel/motel portfolio from investment to sale could imply strategic asset reallocation or issues within that subsector that warrant monitoring. Capital ratios exceeding regulatory requirements highlight a robust balance sheet, offering some security against potential economic downturns.

A key takeaway for investors considering the broader market is Hilltop's net gains from the sale of loans within the mortgage origination segment. The increase to 221 basis points from 189 in the prior quarter might reflect improved profitability in loan sales, albeit in the context of reduced mortgage loan origination volumes due to the housing inventory crunch and affordability issues. This segment's performance could serve as a barometer for the mortgage industry and investor sentiment regarding real estate financing.

Comprehensively, Hilltop's effective tax rate jump to 22.5% from 11.6% points to a higher tax burden year-over-year, a significant financial consideration. It's imperative to parse out non-deductible expenses and other adjustments that resulted in this increase, as it could imply a reduced net income outlook going forward if such rates persist.

Investors with a focus on the banking sector would find the PlainsCapital Bank's annualized return on average assets of 1.20% noteworthy, as it evidences the bank's earning potential. The consolidated annualized return on average assets and equity for Hilltop Holdings, compared year-over-year, exhibit a modest improvement, possibly conveying operational efficiency gains. Nevertheless, with the banking segment experiencing a reversal of credit losses, investors should consider the quality of the loan portfolio and the bank's ability to manage credit risk under evolving economic conditions.

The slight decrease in the consolidated net interest margin to 2.85% aligns with broader banking trends, where margins are compressed due to a challenging rate environment. Investors should weigh this against the sector's performance and regulatory changes that may come into play. It is also prudent to factor in the Tier 1 Leverage Ratio and Common Equity Tier 1 Capital Ratio when assessing risk and stability. Hilltop's strong capital positions well exceed regulatory minimums, potentially mitigating risks associated with economic uncertainty and positioning the bank for continued resilience.

04/18/2024 - 04:45 PM

DALLAS--(BUSINESS WIRE)-- 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 margin⁴decreased 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
Net Interest Margin (Taxable Equivalent) Details ⁽¹⁾	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/

Investor Relations Contact:

Erik Yohe

214-525-4634

eyohe@hilltop.com

Source: Hilltop Holdings Inc.

FAQ

What was Hilltop Holdings Inc.'s income for Q1 2024?

Hilltop reported income of $27.7 million, or $0.42 per diluted share, for Q1 2024.

What dividend did Hilltop declare for Q1 2024?

Hilltop declared a quarterly cash dividend of $0.17 per common share for Q1 2024.

Did Hilltop repurchase any shares in Q1 2024?

Yes, Hilltop repurchased 320,042 shares of its common stock at an average price of $31.04 per share in Q1 2024.

What impacted Hilltop's financial results in Q1 2024?

The financial results in Q1 2024 included a decline in net interest income, offset by a reversal of credit losses due to an improved economic outlook.

What economic conditions affected Hilltop in 2024?

Economic headwinds from 2022 continued into 2024, impacting uncertainties for the future.

Hilltop Holdings Inc. Announces Financial Results for First Quarter 2024

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