Hilltop Holdings Inc. Announces Financial Results for Second Quarter 2024

Rhea-AI Summary

Hilltop Holdings Inc. (NYSE: HTH) reported financial results for Q2 2024, with income to common stockholders of $20.3 million, or $0.31 per diluted share, compared to $18.1 million, or $0.28 per diluted share, in Q2 2023. Key highlights include:

- Provision for credit losses of $10.9 million
- Mortgage loan origination production volume of $2.4 billion
- Net gains from mortgage loans sold to third parties increased to 233 basis points
- Consolidated annualized return on average assets of 0.59%
- Book value per common share increased to $32.86
- Total assets of $15.6 billion
- Loans, net of allowance for credit losses, of $7.7 billion
- Total deposits of $10.4 billion

The company maintained strong capital levels with a Tier 1 Leverage Ratio of 12.87% and a Common Equity Tier 1 Capital Ratio of 19.45%.

Positive

• Income to common stockholders increased to $20.3 million from $18.1 million year-over-year
• Net gains from mortgage loans sold to third parties increased to 233 basis points
• Book value per common share increased to $32.86
• Maintained strong capital levels with Tier 1 Leverage Ratio of 12.87% and Common Equity Tier 1 Capital Ratio of 19.45%
• Consolidated net interest margin increased to 2.90% from 2.85% in Q1 2024

Negative

• Provision for credit losses increased to $10.9 million compared to a reversal of $2.9 million in Q1 2024
• Non-accrual loans increased to $105.7 million, or 1.12% of total loans, from $64.7 million, or 0.73% of total loans, in Q1 2024
• Total deposits decreased to $10.4 billion from $10.9 billion in Q1 2024
• Total assets decreased to $15.6 billion from $16.2 billion in Q1 2024

Insights

Financial Analyst

As a Financial Analyst, I see several key points in Hilltop Holdings' Q2 2024 results:

• Income to common stockholders was $20.3 million ($0.31 per diluted share), up from $18.1 million ($0.28 per share) in Q2 2023.
• Net interest margin increased slightly to 2.90% from 2.85% in Q1 2024.
• The provision for credit losses was $10.9 million, compared to a $2.9 million reversal in Q1 2024.
• Non-accrual loans increased to $105.7 million (1.12% of total loans) from $64.7 million (0.73%) in Q1 2024.
• The company maintained strong capital levels with a Tier 1 Leverage Ratio of 12.87% and Common Equity Tier 1 Capital Ratio of 19.45%.

While income improved year-over-year, the increase in non-accrual loans and credit loss provisions suggests some deterioration in loan quality. The company's strong capital position provides a buffer, but investors should monitor credit trends closely in coming quarters.

DALLAS--(BUSINESS WIRE)-- Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2024. Hilltop produced income to common stockholders of $20.3 million, or $0.31 per diluted share, for the second quarter of 2024, compared to $18.1 million, or $0.28 per diluted share, for the second quarter of 2023. Hilltop’s financial results for the second quarter of 2024 included a decline in net interest income and a build in the allowance for credit losses due to an increase in the provision for credit losses within the banking segment, a decrease in net revenues within all of the broker-dealer segment’s business lines except public finance services, and a decline in noninterest expense 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 August 30, 2024, to all common stockholders of record as of the close of business on August 16, 2024. Additionally, during the second quarter of 2024, Hilltop paid $9.9 million to repurchase an aggregate of 320,000 shares of its common stock at an average price of $30.98 per share pursuant to the 2024 stock repurchase program. As a result of share repurchases during 2024, Hilltop has approximately $55 million of available share repurchase capacity through the expiration of the 2024 stock repurchase program in January 2025.

The impacts of economic headwinds that began in 2022, and have 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, “Despite the continuation of a challenging environment for our operating businesses, Hilltop generated $29.6 million of pre-tax income as all three business segments delivered profitable pre-tax results during the second quarter of 2024. The onerous interest rate environment presented by an elevated federal-funds rate and inverted yield curve continued to negatively impact a number of business units throughout Hilltop. In spite of this, we have been focused on controlling funding and operating costs that have resulted in a modest expansion in net interest margin and pre-provision net revenue compared to the first quarter of 2024. As we enter the second half of 2024, we will work hard at prudently managing costs and positioning our balance sheet for long-term success.”

Second Quarter 2024 Highlights for Hilltop:

• The provision for credit losses was $10.9 million during the second quarter of 2024, compared to a reversal of credit losses of $2.9 million in the first quarter of 2024 and a provision for credit losses of $14.8 million in the second quarter of 2023;
  • The provision for credit losses during the second quarter of 2024 reflected a build in the allowance related to specific reserves and loan portfolio changes within the banking segment since the prior quarter, slightly offset by an improved U.S. economic outlook.
• For the second quarter of 2024, net gains from sale of loans and other mortgage production income and mortgage loan origination fees was $92.9 million, compared to $90.0 million in the second quarter of 2023, a 3.2% increase;
  • Mortgage loan origination production volume was $2.4 billion during the second quarter of 2024, compared to $2.5 billion in the second quarter of 2023;
  • Net gains from mortgage loans sold to third parties increased to 233 basis points during the second quarter of 2024, compared to 221 basis points in the first quarter of 2024.
• Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the second quarter of 2024 were 0.59% and 3.84%, respectively, compared to 0.47% and 3.53%, respectively, for the second quarter of 2023;
• Hilltop’s book value per common share increased to $32.86 at June 30, 2024, compared to $32.66 at March 31, 2024;
• Hilltop’s total assets were $15.6 billion and $16.2 billion at June 30, 2024 and March 31, 2024, respectively;
• Loans¹, net of allowance for credit losses, were $7.7 billion and $7.6 billion at June 30, 2024 and March 31, 2024, respectively;
• Non-accrual loans were $105.7 million, or 1.12% of total loans, at June 30, 2024, compared to $64.7 million, or 0.73% of total loans, at March 31, 2024;
  • Non-accrual loans at June 30, 2024 increased primarily due to the addition of two commercial and industrial credit relationships within our auto note financing industry subsector, partially offset by the sale of a single non-owner occupied commercial real estate credit relationship within our hotel/motel portfolio industry subsector that was classified in loans held for sale.
• Loans held for sale increased by 50.1% from March 31, 2024 to $1.3 billion at June 30, 2024;
• Total deposits were $10.4 billion and $10.9 billion at June 30, 2024 and March 31, 2024, respectively;
  • Total estimated uninsured deposits were $4.8 billion, or approximately 46% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $325.4 million, were $4.5 billion, or approximately 43% of total deposits, at June 30, 2024.
• Hilltop maintained strong capital levels² with a Tier 1 Leverage Ratio³ of 12.87% and a Common Equity Tier 1 Capital Ratio of 19.45% at June 30, 2024;
• Hilltop’s consolidated net interest margin⁴ increased to 2.90% for the second quarter of 2024, compared to 2.85% in the first quarter of 2024;
• For the second quarter of 2024, noninterest income was $193.3 million, compared to $190.7 million in the second quarter of 2023, a 1.4% increase;
• For second quarter of 2024, noninterest expense was $256.5 million, compared to $267.0 million in the second quarter of 2023, a 3.9% decrease; and
• Hilltop’s effective tax rate was 22.5% during the second quarter of 2024, compared to 26.4% during the same period in 2023.
  • The effective tax rate for the second 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 $348.3 million and $332.6 million at June 30, 2024 and March 31, 2024, 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		June 30,			March 31,			December 31,			September 30,			June 30,
(in 000's)		2024			2024			2023			2023			2023
Cash and due from banks		$	798,300		$	1,710,066		$	1,858,700		$	1,513,747		$	1,584,709
Federal funds sold			5,650			650			650			3,650			650
Assets segregated for regulatory purposes			51,046			70,717			57,395			47,491			50,711
Securities purchased under agreements to resell			111,914			91,608			80,011			123,719			143,982
Securities:
Trading, at fair value			721,384			657,700			515,991			578,901			696,649
Available for sale, at fair value, net (1)			1,433,107			1,480,555			1,507,595			1,456,238			1,526,869
Held to maturity, at amortized cost, net (1)			777,456			790,550			812,677			825,079			847,437
Equity, at fair value			254			315			321			264			258
			2,932,201			2,929,120			2,836,584			2,860,482			3,071,213
Loans held for sale			1,264,437			842,324			943,846			1,058,806			1,333,044
Loans held for investment, net of unearned income			8,173,520			8,062,693			8,079,745			8,204,052			8,354,122
Allowance for credit losses			(115,082)			(104,231)			(111,413)			(110,822)			(109,306)
Loans held for investment, net			8,058,438			7,958,462			7,968,332			8,093,230			8,244,816
Broker-dealer and clearing organization receivables			1,297,175			1,473,561			1,573,931			1,460,352			1,474,177
Premises and equipment, net			161,746			165,557			168,856			172,097			176,574
Operating lease right-of-use assets			93,994			95,343			88,580			93,057			97,979
Mortgage servicing assets			52,902			95,591			96,662			104,951			95,101
Other assets			517,811			501,244			517,545			588,751			588,166
Goodwill			267,447			267,447			267,447			267,447			267,447
Other intangible assets, net			7,429			7,943			8,457			9,078			9,772
Total assets		$	15,620,490		$	16,209,633		$	16,466,996		$	16,396,858		$	17,138,341
Deposits:
Noninterest-bearing		$	2,845,441		$	3,028,543		$	3,007,101		$	3,200,247		$	3,451,438
Interest-bearing			7,528,415			7,855,553			8,056,091			7,902,850			7,712,739
Total deposits			10,373,856			10,884,096			11,063,192			11,103,097			11,164,177
Broker-dealer and clearing organization payables			1,285,226			1,436,462			1,430,734			1,368,064			1,306,646
Short-term borrowings			897,613			892,574			900,038			882,999			1,628,637
Securities sold, not yet purchased, at fair value			75,546			60,562			34,872			51,527			74,761
Notes payable			347,402			347,273			347,145			347,020			364,531
Operating lease liabilities			113,096			114,518			109,002			114,334			119,999
Other liabilities			365,140			314,718			431,684			422,955			389,336
Total liabilities			13,457,879			14,050,203			14,316,667			14,289,996			15,048,087
Common stock			650			653			652			652			651
Additional paid-in capital			1,047,523			1,049,831			1,054,662			1,052,867			1,050,191
Accumulated other comprehensive loss			(119,171)			(119,606)			(121,505)			(145,083)			(131,718)
Retained earnings			1,205,467			1,201,013			1,189,222			1,171,250			1,144,624
Deferred compensation employee stock trust, net			1			115			228			340			450
Employee stock trust			(1)			(142)			(292)			(446)			(599)
Total Hilltop stockholders' equity			2,134,469			2,131,864			2,122,967			2,079,580			2,063,599
Noncontrolling interests			28,142			27,566			27,362			27,282			26,655
Total stockholders' equity			2,162,611			2,159,430			2,150,329			2,106,862			2,090,254
Total liabilities & stockholders' equity		$	15,620,490		$	16,209,633		$	16,466,996		$	16,396,858		$	17,138,341

(1)

At June 30, 2024, the amortized cost of the available for sale securities portfolio was $1,545,966, while the fair value of the held to maturity securities portfolio was $687,194.

		Three Months Ended
Consolidated Income Statements		June 30,			March 31,			December 31,			September 30,			June 30,
(in 000's, except per share data)		2024			2024			2023			2023			2023
Interest income:
Loans, including fees		$	138,627		$	134,331		$	138,096		$	142,402		$	138,397
Securities borrowed			20,306			20,561			18,659			17,683			18,515
Securities:
Taxable			25,289			26,241			28,763			27,166			26,719
Tax-exempt			2,389			2,415			2,545			2,464			2,566
Other			20,532			26,066			28,704			27,040			27,229
Total interest income			207,143			209,614			216,767			216,755			213,426
Interest expense:
Deposits			68,095			69,144			68,339			64,290			54,726
Securities loaned			18,669			19,039			17,247			16,169			16,413
Short-term borrowings			10,676			11,588			13,495			14,212			17,706
Notes payable			3,604			3,590			3,596			4,026			3,973
Other			2,449			2,632			2,864			2,408			2,342
Total interest expense			103,493			105,993			105,541			101,105			95,160
Net interest income			103,650			103,621			111,226			115,650			118,266
Provision for (reversal of) credit losses			10,934			(2,871)			1,265			(40)			14,836
Net interest income after provision for (reversal of) credit losses			92,716			106,492			109,961			115,690			103,430
Noninterest income:
Net gains from sale of loans and other mortgage production income			58,455			40,197			36,387			47,262			48,535
Mortgage loan origination fees			34,398			26,438			32,844			41,478			41,440
Securities commissions and fees and other			67,460			84,757			73,967			68,447			68,640
Investment and securities advisory fees and commissions			32,992			30,226			35,780			39,662			32,037
Total noninterest income			193,305			181,618			178,978			196,849			190,652
Noninterest expense:
Employees' compensation and benefits			169,998			165,830			160,390			173,195			176,908
Occupancy and equipment, net			21,297			21,912			21,524			21,912			23,025
Professional services			10,270			9,731			13,170			12,639			12,594
Other			54,899			52,550			55,761			52,271			54,450
Total noninterest expense			256,464			250,023			250,845			260,017			266,977
Income before income taxes			29,557			38,087			38,094			52,522			27,105
Income tax expense			6,658			8,565			7,132			13,211			7,167
Net income			22,899			29,522			30,962			39,311			19,938
Less: Net income attributable to noncontrolling interest			2,566			1,854			2,291			2,269			1,805
Income attributable to Hilltop		$	20,333		$	27,668		$	28,671		$	37,042		$	18,133
Earnings per common share:
Basic		$	0.31		$	0.42		$	0.44		$	0.57		$	0.28
Diluted		$	0.31		$	0.42		$	0.44		$	0.57		$	0.28
Cash dividends declared per common share		$	0.17		$	0.17		$	0.16		$	0.16		$	0.16
Weighted average shares outstanding:
Basic			65,085			65,200			65,136			65,106			65,025
Diluted			65,086			65,214			65,138			65,108			65,054

		Three Months Ended June 30, 2024
Segment Results								Mortgage						All Other and			Hilltop
(in 000's)		Banking			Broker-Dealer			Origination			Corporate			Eliminations			Consolidated
Net interest income (expense)		$	92,458		$	12,218		$	(4,571)		$	(3,153)		$	6,698		$	103,650
Provision for (reversal of) credit losses			10,950			(16)			—			—			—			10,934
Noninterest income			9,255			92,053			92,867			6,001			(6,871)			193,305
Noninterest expense			57,950			97,062			86,946			14,716			(210)			256,464
Income (loss) before taxes		$	32,813		$	7,225		$	1,350		$	(11,868)		$	37		$	29,557

		Six Months Ended June 30, 2024
Segment Results								Mortgage						All Other and			Hilltop
(in 000's)		Banking			Broker-Dealer			Origination			Corporate			Eliminations			Consolidated
Net interest income (expense)		$	184,064		$	24,486		$	(8,823)		$	(6,255)		$	13,799		$	207,271
Provision for (reversal of) credit losses			8,097			(34)			—			—			—			8,063
Noninterest income			21,158			196,631			159,567			11,785			(14,218)			374,923
Noninterest expense			113,970			195,008			165,843			32,101			(435)			506,487
Income (loss) before taxes		$	83,155		$	26,143		$	(15,099)		$	(26,571)		$	16		$	67,644

		Three Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
Selected Financial Data		2024			2024			2023			2023			2023
Hilltop Consolidated:
Return on average stockholders' equity			3.84%			5.23%			5.46%			7.11%			3.53%
Return on average assets			0.59%			0.74%			0.75%			0.94%			0.47%
Net interest margin (1)			2.90%			2.85%			2.96%			3.02%			3.03%
Net interest margin (taxable equivalent) (2):
As reported			2.92%			2.87%			2.98%			3.04%			3.03%
Impact of purchase accounting			6 bps			4 bps			4 bps			7 bps			9 bps
Book value per common share ($)			32.86			32.66			32.58			31.91			31.71
Shares outstanding, end of period (000's)			64,953			65,267			65,153			65,170			65,071
Dividend payout ratio (3)			54.42%			40.06%			36.35%			28.12%			57.37%
Banking Segment:
Net interest margin (1)			3.10%			3.00%			2.94%			3.08%			3.11%
Net interest margin (taxable equivalent) (2):
As reported			3.10%			3.00%			2.95%			3.09%			3.11%
Impact of purchase accounting			7 bps			5 bps			5 bps			8 bps			11 bps
Accretion of discount on loans ($000's)			1,945			1,299			1,202			2,226			3,334
Net recoveries (charge-offs) ($000's)			(83)			(4,311)			(674)			1,556			(2,884)
Return on average assets			0.81%			1.20%			1.12%			1.20%			0.89%
Fee income ratio			9.1%			11.5%			11.2%			10.5%			10.0%
Efficiency ratio			57.0%			54.1%			53.2%			51.4%			51.2%
Employees' compensation and benefits ($000's)			33,352			32,389			29,420			30,641			30,603
Broker-Dealer Segment:
Net revenue ($000's) (4)			104,271			116,847			119,989			118,703			113,241
Employees' compensation and benefits ($000's)			66,181			69,457			68,746			69,930			65,290
Variable compensation expense ($000's)			32,734			35,274			39,435			39,929			34,798
Compensation as a % of net revenue			63.5%			59.4%			57.3%			58.9%			57.7%
Pre-tax margin (5)			6.9%			16.2%			16.8%			18.2%			16.3%
Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases			2,205,157			1,548,941			1,698,009			2,091,444			2,301,007
Refinancings			174,141			127,545			117,018			152,257			150,643
Total mortgage loan originations - volume			2,379,298			1,676,486			1,815,027			2,243,701			2,451,650
Mortgage loan sales - volume ($000's)			1,838,841			1,749,857			1,874,001			2,395,357			2,115,706
Net gains from mortgage loan sales (basis points):
Loans sold to third parties			233			221			189			199			207
Impact of loans retained by banking segment			(5)			(5)			0			(1)			(6)
As reported			228			216			189			198			201
Mortgage servicing rights asset ($000's) (6)			52,902			95,591			96,662			104,951			95,101
Employees' compensation and benefits ($000's)			61,624			52,694			53,766			64,016			70,982
Variable compensation expense ($000's)			34,886			22,188			24,085			33,070			36,249

(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, $0.6 million and $0.1 million, respectively, for the periods presented and for the banking seg ment were $0.1 million, $0.1 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.

		June 30,			March 31,			December 31,			September 30,			June 30,
Capital Ratios		2024			2024			2023			2023			2023
Tier 1 capital (to average assets):
PlainsCapital			11.36%			11.00%			10.55%			10.62%			10.28%
Hilltop			12.87%			12.49%			12.23%			11.92%			11.47%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital			15.58%			15.87%			15.44%			15.31%			14.48%
Hilltop			19.45%			19.73%			19.32%			18.60%			17.61%
Tier 1 capital (to risk-weighted assets):
PlainsCapital			15.58%			15.87%			15.44%			15.31%			14.48%
Hilltop			19.45%			19.73%			19.32%			18.60%			17.61%
Total capital (to risk-weighted assets):
PlainsCapital			16.77%			17.06%			16.58%			16.45%			15.56%
Hilltop			22.57%			22.79%			22.34%			21.54%			20.41%

		June 30,			March 31,			December 31,			September 30,			June 30,
Non-Performing Assets Portfolio Data		2024			2024			2023			2023			2023
Loans accounted for on a non-accrual basis ($000's):
Commercial real estate:
Non-owner occupied		$	6,894		$	34,661		$	36,440		$	2,375		$	2,456
Owner occupied			6,437			4,846			5,098			4,964			1,096
Commercial and industrial			80,755			12,165			9,502			10,190			21,442
Construction and land development			485			698			3,480			760			593
1-4 family residential			11,092			12,363			13,801			13,202			13,360
Consumer			1			3			6			7			9
Broker-dealer			—			—			—			—			—
Non-accrual loans ($000's)		$	105,664		$	64,736		$	68,327		$	31,498		$	38,956
Non-accrual loans as a % of total loans			1.12%			0.73%			0.76%			0.34%			0.40%
Other real estate owned ($000's)			2,973			5,254			5,095			5,386			3,481
Other repossessed assets ($000's)			464			472			—			—			—
Non-performing assets ($000's)			109,101			70,462			73,422			36,884			42,437
Non-performing assets as a % of total assets			0.70%			0.43%			0.45%			0.22%			0.25%
Loans past due 90 days or more and still accruing ($000's) (1)			122,451			112,799			115,090			106,346			130,036

(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 June 30,
		2024								2023
		Average			Interest			Annualized		Average			Interest			Annualized
		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		$	934,445		$	13,494		5.78	%	$	1,043,526		$	14,125		5.41	%
Loans held for investment, gross (2)			7,892,879			125,133		6.36	%		8,033,095			124,272		6.21	%
Investment securities - taxable			2,612,049			25,284		3.87	%		2,776,375			26,719		3.85	%
Investment securities - non-taxable (3)			321,928			2,965		3.68	%		412,609			2,410		2.34	%
Federal funds sold and securities purchased under agreements to resell			105,520			1,944		7.39	%		123,219			2,190		7.13	%
Interest-bearing deposits in other financial institutions			1,057,783			13,572		5.15	%		1,711,945			21,273		4.98	%
Securities borrowed			1,358,425			20,306		5.91	%		1,477,502			18,515		4.96	%
Other			39,758			5,016		50.60	%		82,608			3,766		18.29	%
Interest-earning assets, gross (3)			14,322,787			207,714		5.82	%		15,660,879			213,270		5.46	%
Allowance for credit losses			(104,551)								(97,387)
Interest-earning assets, net			14,218,236								15,563,492
Noninterest-earning assets			1,332,959								1,355,997
Total assets		$	15,551,195							$	16,919,489
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits		$	7,617,862		$	68,095		3.59	%	$	7,736,582		$	54,726		2.84	%
Securities loaned			1,338,825			18,669		5.59	%		1,373,435			16,413		4.79	%
Notes payable and other borrowings			1,253,394			16,729		5.35	%		1,861,063			24,021		5.18	%
Total interest-bearing liabilities			10,210,081			103,493		4.07	%		10,971,080			95,160		3.48	%
Noninterest-bearing liabilities
Noninterest-bearing deposits			2,814,179								3,540,643
Other liabilities			377,516								320,706
Total liabilities			13,401,776								14,832,429
Stockholders’ equity			2,122,144								2,060,677
Noncontrolling interest			27,275								26,383
Total liabilities and stockholders' equity		$	15,551,195							$	16,919,489
Net interest income (3)					$	104,221							$	118,110
Net interest spread (3)								1.75	%							1.98	%
Net interest margin (3)								2.92	%							3.03	%

(1)		Information presented on a consolidated basis (dollars in thousands).
(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 June 30, 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, July 26, 2024. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review second quarter 2024 financial results. Interested parties can access the conference call by dialing 800-245-3047 (North America) or 203-518-9765 (International) and then using the conference ID HH2Q24. 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 June 30, 2024, Hilltop employed approximately 3,780 people and operated approximately 320 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/20240725968264/en/

Investor Relations Contact:

Matt Dunn

214-525-4636

mdunn@hilltop.com

Source: Hilltop Holdings Inc.

FAQ

What was Hilltop Holdings' earnings per share in Q2 2024?

Hilltop Holdings reported earnings of $0.31 per diluted share in Q2 2024.

How much was Hilltop's provision for credit losses in Q2 2024?

Hilltop's provision for credit losses was $10.9 million in Q2 2024.

What was Hilltop's mortgage loan origination volume in Q2 2024?

Hilltop's mortgage loan origination production volume was $2.4 billion in Q2 2024.

What was Hilltop's book value per common share at the end of Q2 2024?

Hilltop's book value per common share increased to $32.86 at the end of Q2 2024.

What were Hilltop's capital ratios at the end of Q2 2024?

Hilltop reported a Tier 1 Leverage Ratio of 12.87% and a Common Equity Tier 1 Capital Ratio of 19.45% at the end of Q2 2024.