Hilltop Holdings Inc. Announces Financial Results for Third Quarter 2023

Rhea-AI Summary

Hilltop Holdings Inc. announces financial results for Q3 2023

Positive

• Hilltop produced income to common stockholders of $37.0 million for Q3 2023, compared to $32.1 million for Q3 2022.
• Hilltop's Board of Directors declared a quarterly cash dividend of $0.16 per common share.
• Hilltop's consolidated annualized return on average assets and return on average stockholders' equity for Q3 2023 were 0.94% and 7.11%, respectively, compared to 0.79% and 6.26%, respectively, for Q3 2022.
• Hilltop's total assets were $16.4 billion at September 30, 2023, compared to $17.1 billion at June 30, 2023.

Negative

• Headwinds, including tight housing inventories and volatile economic forecast, have had an adverse impact on Hilltop's operating results.
• Hilltop's net interest margin decreased to 3.02% for Q3 2023, compared to 3.03% in Q2 2023.
• Hilltop's noninterest income decreased by 4.9% for Q3 2023, compared to Q3 2022.
• Hilltop's noninterest expense decreased by 9.9% for Q3 2023, compared to Q3 2022.

DALLAS--(BUSINESS WIRE)-- Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the third quarter of 2023. Hilltop produced income to common stockholders of $37.0 million, or $0.57 per diluted share, for the third quarter of 2023, compared to $32.1 million, or $0.50 per diluted share, for the third quarter of 2022. Hilltop’s financial results for the third quarter of 2023 included decreases in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income, a decline in the net interest income within the banking segment, and increases in net revenues within certain of the broker-dealer segment’s business lines.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.16 per common share, payable on November 28, 2023, to all common stockholders of record as of the close of business on November 13, 2023.

Headwinds that began in 2022, and continued through the first nine months of 2023, including the impact of tight housing inventories on mortgage volumes, declining deposit balances, rapid increases in market interest rates and a volatile economic forecast have had, and are expected to continue to have, an adverse impact on our operating results during the remainder of 2023. The impacts of such headwinds during the remainder of 2023 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, international armed conflicts and their impact on supply chains, and disruptions to the economy and the U.S. banking system caused by high-profile bank failures during early 2023.

Jeremy B. Ford, President and CEO of Hilltop, said “Hilltop’s operating results for the third quarter reflect a general continuation in market pressures experienced in the first half of the year. While PlainsCapital Bank produced strong financial results for the quarter with a 1.20% return on average assets, the competitive environment around deposits resulted in further pressure on the bank’s net interest margin. HilltopSecurities generated robust financial results as the wealth management and structured finance businesses produced strong net revenues, which more than offset challenging market conditions for the public finance and fixed income capital markets businesses. PrimeLending’s results continued to be impacted by the housing market’s lack of inventory, consumer affordability challenges and a stubbornly compressed gain-on-sale margin.

“As we progress into the final quarter of the year, we will continue to prudently manage our balance sheet, closely monitor our expenses and serve our valued clients.”

Third Quarter 2023 Highlights for Hilltop:

• The reversal of credit losses was $40 thousand during the third quarter of 2023, compared to a provision for credit losses of $14.8 million in the second quarter of 2023 and a reversal of credit losses of $0.8 million in the third quarter of 2022;
  • The slight reversal of credit losses during the third quarter of 2023 reflected improvements to the U.S. economic outlook and decreases in specific reserves within our broker dealer segment, offset by increases in specific reserves and net portfolio changes within the banking segment.

• For the third quarter of 2023, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $88.7 million, compared to $98.0 million in the third quarter of 2022, a 9.4% decrease;
  • Mortgage loan origination production volume was $2.2 billion during the third quarter of 2023, compared to $3.0 billion in the third quarter of 2022;
  • Net gains from mortgage loans sold to third parties decreased to 199 basis points during the third quarter of 2023, compared to 207 basis points in the second quarter of 2023.
• Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the third quarter of 2023 were 0.94% and 7.11%, respectively, compared to 0.79% and 6.26%, respectively, for the third quarter of 2022;
• Hilltop’s book value per common share increased to $31.91 at September 30, 2023, compared to $31.71 at June 30, 2023;
• Hilltop’s total assets were $16.4 billion and $17.1 billion at September 30, 2023 and June 30, 2023, respectively;
• Loans¹, net of allowance for credit losses, were $7.7 billion and $7.9 billion at September 30, 2023 and June 30, 2023, respectively;
• Non-performing loans were $31.5 million, or 0.34% of total loans, at September 30, 2023, compared to $39.0 million, or 0.40% of total loans, at June 30, 2023;
• Loans held for sale decreased by 20.6% from June 30, 2023 to $1.1 billion at September 30, 2023;
• Total deposits were $11.1 billion and $11.2 billion at September 30, 2023 and June 30, 2023, respectively;
  • Total estimated uninsured deposits were $4.4 billion, or approximately 40% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $276.3 million, were $4.2 billion, or approximately 37% of total deposits at September 30, 2023.
• Hilltop maintained strong capital levels² with a Tier 1 Leverage Ratio³ of 11.92% and a Common Equity Tier 1 Capital Ratio of 18.60% at September 30, 2023;
• Hilltop’s consolidated net interest margin⁴ decreased to 3.02% for the third quarter of 2023, compared to 3.03% in the second quarter of 2023;
• For the third quarter of 2023, noninterest income was $196.8 million, compared to $207.0 million in the third quarter of 2022, a 4.9% decrease;
• For the third quarter 2023, noninterest expense was $260.0 million, compared to $288.7 million in the third quarter of 2022, a 9.9% decrease; and
• Hilltop’s effective tax rate was 25.2% during the third quarter of 2023, compared to 21.8% during the same period in 2022.
  • The effective tax rate for the third quarter was higher than the applicable statutory rate primarily due to the impact of non-deductible compensation expense and other permanent adjustments.

_____________________________

1 “Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $357.1 million and $358.5 million at September 30, 2023 and June 30, 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.

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		September 30,				June 30,				March 31,				December 31,				September 30,
(in 000's)		2023				2023				2023				2022				2022
Cash and due from banks		$	1,513,747			$	1,584,709			$	1,764,081			$	1,579,512			$	1,777,584
Federal funds sold			3,650				650				743				650				663
Assets segregated for regulatory purposes			47,491				50,711				36,199				67,737				109,358
Securities purchased under agreements to resell			123,719				143,982				144,201				118,070				145,365
Securities:
Trading, at fair value			578,901				696,649				692,908				755,032				641,864
Available for sale, at fair value, net (1)			1,456,238				1,526,869				1,641,571				1,658,766				1,584,724
Held to maturity, at amortized cost, net (1)			825,079				847,437				862,280				875,532				889,452
Equity, at fair value			264				258				231				200				209
			2,860,482				3,071,213				3,196,990				3,289,530				3,116,249
Loans held for sale			1,058,806				1,333,044				1,040,138				982,616				1,003,605
Loans held for investment, net of unearned income			8,204,052				8,354,122				8,192,846				8,092,673				7,944,246
Allowance for credit losses			(110,822	)			(109,306	)			(97,354	)			(95,442	)			(91,783	)
Loans held for investment, net			8,093,230				8,244,816				8,095,492				7,997,231				7,852,463
Broker-dealer and clearing organization receivables			1,460,352				1,474,177				1,560,246				1,038,055				1,255,052
Premises and equipment, net			172,097				176,574				180,132				184,950				191,423
Operating lease right-of-use assets			93,057				97,979				100,122				102,443				103,099
Mortgage servicing assets			104,951				95,101				103,314				100,825				156,539
Other assets			588,751				588,166				529,438				518,899				624,235
Goodwill			267,447				267,447				267,447				267,447				267,447
Other intangible assets, net			9,078				9,772				10,544				11,317				12,209
Total assets		$	16,396,858			$	17,138,341			$	17,029,087			$	16,259,282			$	16,615,291
Deposits:
Noninterest-bearing		$	3,200,247			$	3,451,438			$	3,807,878			$	3,968,862			$	4,546,816
Interest-bearing			7,902,850				7,712,739				7,289,269				7,346,887				6,805,198
Total deposits			11,103,097				11,164,177				11,097,147				11,315,749				11,352,014
Broker-dealer and clearing organization payables			1,368,064				1,306,646				1,383,317				966,470				1,176,156
Short-term borrowings			882,999				1,628,637				1,572,794				970,056				942,309
Securities sold, not yet purchased, at fair value			51,527				74,761				51,497				53,023				99,515
Notes payable			347,020				364,531				376,410				346,654				390,354
Operating lease liabilities			114,334				119,999				122,878				126,759				120,635
Other liabilities			422,955				389,336				341,246				417,042				475,425
Total liabilities			14,289,996				15,048,087				14,945,289				14,195,753				14,556,408
Common stock			652				651				650				647				646
Additional paid-in capital			1,052,867				1,050,191				1,044,774				1,046,331				1,043,605
Accumulated other comprehensive loss			(145,083	)			(131,718	)			(125,461	)			(133,531	)			(119,864	)
Retained earnings			1,171,250				1,144,624				1,136,901				1,123,636				1,107,586
Deferred compensation employee stock trust, net			340				450				446				481				479
Employee stock trust			(446	)			(599	)			(599	)			(640	)			(641	)
Total Hilltop stockholders' equity			2,079,580				2,063,599				2,056,711				2,036,924				2,031,811
Noncontrolling interests			27,282				26,655				27,087				26,605				27,072
Total stockholders' equity			2,106,862				2,090,254				2,083,798				2,063,529				2,058,883
Total liabilities & stockholders' equity		$	16,396,858			$	17,138,341			$	17,029,087			$	16,259,282			$	16,615,291
_____________________________
(1) At September 30, 2023, the amortized cost of the available for sale securities portfolio was $1,606,340, while the fair value of the held to maturity securities portfolio was $703,366.

		Three Months Ended
Consolidated Income Statements		September 30,				June 30,			March 31,			December 31,			September 30,
(in 000's, except per share data)		2023				2023			2023			2022			2022
Interest income:
Loans, including fees		$	142,402			$	138,397		$	123,379		$	117,906		$	109,165
Securities borrowed			17,683				18,515			17,068			14,162			10,938
Securities:
Taxable			27,166				26,719			25,602			23,293			19,642
Tax-exempt			2,464				2,566			3,188			3,002			2,451
Other			27,040				27,229			22,190			21,611			14,276
Total interest income			216,755				213,426			191,427			179,974			156,472
Interest expense:
Deposits			64,290				54,726			35,824			28,238			12,525
Securities loaned			16,169				16,413			15,346			13,179			9,407
Short-term borrowings			14,212				17,706			12,444			10,278			5,550
Notes payable			4,026				3,973			3,853			3,988			3,907
Other			2,408				2,342			2,255			849			1,597
Total interest expense			101,105				95,160			69,722			56,532			32,986
Net interest income			115,650				118,266			121,705			123,442			123,486
Provision for (reversal of) credit losses			(40	)			14,836			2,331			3,638			(780	)
Net interest income after provision for (reversal of) credit losses			115,690				103,430			119,374			119,804			124,266
Noninterest income:
Net gains from sale of loans and other mortgage production income			47,262				48,535			39,966			35,949			57,998
Mortgage loan origination fees			41,478				41,440			28,777			35,198			39,960
Securities commissions and fees			28,044				29,606			31,223			33,143			34,076
Investment and securities advisory fees and commissions			39,662				32,037			26,848			30,661			35,031
Other			40,403				39,034			35,680			34,833			39,910
Total noninterest income			196,849				190,652			162,494			169,784			206,975
Noninterest expense:
Employees' compensation and benefits			173,195				176,908			167,817			167,892			200,450
Occupancy and equipment, net			21,912				23,025			22,865			23,077			25,041
Professional services			12,639				12,594			10,697			11,555			10,631
Other			52,271				54,450			49,091			50,844			52,616
Total noninterest expense			260,017				266,977			250,470			253,368			288,738
Income before income taxes			52,522				27,105			31,398			36,220			42,503
Income tax expense			13,211				7,167			3,630			9,642			9,249
Net income			39,311				19,938			27,768			26,578			33,254
Less: Net income attributable to noncontrolling interest			2,269				1,805			1,968			1,022			1,186
Income attributable to Hilltop		$	37,042			$	18,133		$	25,800		$	25,556		$	32,068
Earnings per common share:
Basic		$	0.57			$	0.28		$	0.40		$	0.40		$	0.50
Diluted		$	0.57			$	0.28		$	0.40		$	0.39		$	0.50
Cash dividends declared per common share		$	0.16			$	0.16		$	0.16		$	0.15		$	0.15
Weighted average shares outstanding:
Basic			65,106				65,025			64,901			64,602			64,552
Diluted			65,108				65,054			64,954			64,779			64,669

		Three Months Ended September 30, 2023
Segment Results									Mortgage								All Other and				Hilltop
(in 000's)		Banking			Broker-Dealer				Origination				Corporate				Eliminations				Consolidated
Net interest income (expense)		$	99,047		$	12,215			$	(5,482	)		$	(3,175	)		$	13,045			$	115,650
Provision for (reversal of) credit losses			675			(715	)			—				—				—				(40	)
Noninterest income			11,668			106,488				88,747				3,159				(13,213	)			196,849
Noninterest expense			56,887			97,865				91,505				13,937				(177	)			260,017
Income (loss) before taxes		$	53,153		$	21,553			$	(8,240	)		$	(13,953	)		$	9			$	52,522
		Nine Months Ended September 30, 2023
Segment Results									Mortgage								All Other and				Hilltop
(in 000's)		Banking			Broker-Dealer				Origination				Corporate				Eliminations				Consolidated
Net interest income (expense)		$	304,804		$	39,279			$	(15,590	)		$	(9,976	)		$	37,105			$	355,622
Provision for (reversal of) credit losses			17,175			(48	)			—				—				—				17,127
Noninterest income			34,046			297,164				247,655				8,944				(37,815	)			549,994
Noninterest expense			170,450			283,063				278,918				45,750				(717	)			777,464
Income (loss) before taxes		$	151,225		$	53,428			$	(46,853	)		$	(46,782	)		$	7			$	111,025

		Three Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
Selected Financial Data		2023				2023				2023				2022				2022
Hilltop Consolidated:
Return on average stockholders' equity			7.11	%			3.53	%			5.12	%			4.99	%			6.26	%
Return on average assets			0.94	%			0.47	%			0.69	%			0.63	%			0.79	%
Net interest margin (1)			3.02	%			3.03	%			3.28	%			3.23	%			3.19	%
Net interest margin (taxable equivalent) (2):
As reported			3.04	%			3.03	%			3.28	%			3.24	%			3.20	%
Impact of purchase accounting			7 bps				9 bps				6 bps				7 bps				8 bps
Book value per common share ($)			31.91				31.71				31.63				31.49				31.46
Shares outstanding, end of period (000's)			65,170				65,071				65,023				64,685				64,591
Dividend payout ratio (3)			28.12	%			57.37	%			40.25	%			37.92	%			30.19	%
Banking Segment:
Net interest margin (1)			3.08	%			3.11	%			3.40	%			3.42	%			3.42	%
Net interest margin (taxable equivalent) (2):
As reported			3.09	%			3.11	%			3.41	%			3.43	%			3.43	%
Impact of purchase accounting			8 bps				11 bps				7 bps				8 bps				10 bps
Accretion of discount on loans ($000's)			2,226				3,334				1,870				2,173				2,858
Net recoveries (charge-offs) ($000's)			1,556				(2,884	)			(419	)			21				(2,735	)
Return on average assets			1.20	%			0.89	%			1.44	%			1.31	%			1.41	%
Fee income ratio			10.5	%			10.0	%			9.6	%			9.8	%			9.9	%
Efficiency ratio			51.4	%			51.2	%			48.4	%			48.9	%			48.9	%
Employees' compensation and benefits ($000's)			30,641				30,603				32,681				34,526				35,934
Broker-Dealer Segment:
Net revenue ($000's) (4)			118,703				113,241				104,498				106,919				114,184
Employees' compensation and benefits ($000's)			69,930				65,290				62,429				60,552				70,274
Variable compensation expense ($000's)			39,929				34,798				30,821				32,042				42,567
Compensation as a % of net revenue			58.9	%			57.7	%			59.7	%			56.6	%			61.5	%
Pre-tax margin (5)			18.2	%			16.3	%			12.8	%			18.5	%			15.3	%
Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases			2,091,444				2,301,007				1,607,330				1,895,731				2,832,136
Refinancings			152,257				150,643				125,423				147,511				211,075
Total mortgage loan originations - volume			2,243,701				2,451,650				1,732,753				2,043,242				3,043,211
Mortgage loan sales - volume ($000's)			2,395,357				2,115,706				1,661,521				2,038,990				3,419,950
Net gains from mortgage loan sales (basis points):
Loans sold to third parties			199				207				193				211				227
Impact of loans retained by banking segment			(1	)			(6	)			(7	)			(19	)			(9	)
As reported			198				201				186				192				218
Mortgage servicing rights asset ($000's) (6)			104,951				95,101				103,314				100,825				156,539
Employees' compensation and benefits ($000's)			64,016				70,982				62,355				64,940				86,079
Variable compensation expense ($000's)			33,070				36,249				25,573				26,724				44,312
________________________________
(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, $0.1 million, $0.1 million, $0.3 million and $0.4 million, respectively, for the periods presented and for the banking segment were $0.2 million for each of 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.

		September 30,			June 30,			March 31,			December 31,			September 30,
Capital Ratios		2023			2023			2023			2022			2022
Tier 1 capital (to average assets):
PlainsCapital		10.62	%		10.28	%		10.69	%		10.26	%		10.29	%
Hilltop		11.92	%		11.47	%		11.82	%		11.47	%		11.41	%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		15.31	%		14.48	%		14.97	%		14.98	%		14.68	%
Hilltop		18.60	%		17.61	%		17.99	%		18.23	%		17.45	%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		15.31	%		14.48	%		14.97	%		14.98	%		14.68	%
Hilltop		18.60	%		17.61	%		17.99	%		18.23	%		17.45	%
Total capital (to risk-weighted assets):
PlainsCapital		16.45	%		15.56	%		15.94	%		15.91	%		15.54	%
Hilltop		21.54	%		20.41	%		20.75	%		20.98	%		20.07	%

		September 30,				June 30,				March 31,				December 31,				September 30,
Non-Performing Assets Portfolio Data		2023				2023				2023				2022				2022
Loans accounted for on a non-accrual basis ($000's):
Commercial real estate			7,339				3,552				1,973				4,269				4,735
Commercial and industrial			10,190				21,442				10,807				9,095				12,078
Construction and land development			760				593				199				198				1
1-4 family residential			13,202				13,360				14,387				15,941				16,968
Consumer			7				9				12				14				16
Broker-dealer			—				—				—				—				—
			31,498				38,956				27,378				29,517				33,798
Troubled debt restructurings included in accruing loans held for investment ($000's) (1)			—				—				—				803				825
Non-performing loans ($000's) (1)			31,498				38,956				27,378				30,320				34,623
Non-performing loans as a % of total loans ($000's) (1)			0.34	%			0.40	%			0.30	%			0.33	%			0.39	%
Other real estate owned ($000's)			5,386				3,481				3,202				2,325				1,637
Other repossessed assets ($000's)			—				—				—				—				—
Non-performing assets ($000's) (1)			36,884				42,437				30,580				32,645				36,260
Non-performing assets as a % of total assets ($000's) (1)			0.22	%			0.25	%			0.18	%			0.20	%			0.22	%
Loans past due 90 days or more and still accruing ($000's) (2)			106,346				130,036				114,523				92,099				96,532
_____________________________
(1) Effective January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2022-02 which eliminated the recognition and measurement guidance on troubled debt restructurings for creditors. Therefore, we no longer present troubled debt restructurings as a component of non-performing loans and assets.
(2) 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 September 30,
		2023									2022
		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		$	1,075,518			$	15,649		5.82	%	$	1,166,265			$	14,414		4.94	%
Loans held for investment, gross (2)			7,972,604				126,753		6.31	%		7,911,833				94,751		4.75	%
Investment securities - taxable			2,690,977				27,166		4.04	%		2,883,412				19,642		2.72	%
Investment securities - non-taxable (3)			315,294				3,069		3.89	%		312,312				2,817		3.61	%
Federal funds sold and securities purchased under agreements to resell			142,324				2,313		6.45	%		137,728				1,309		3.77	%
Interest-bearing deposits in other financial institutions			1,550,991				20,320		5.20	%		1,780,220				9,542		2.13	%
Securities borrowed			1,371,625				17,683		5.04	%		1,116,837				10,938		3.83	%
Other			69,827				4,407		25.04	%		56,331				3,425		24.12	%
Interest-earning assets, gross (3)			15,189,160				217,360		5.68	%		15,364,938				156,838		4.05	%
Allowance for credit losses			(110,398	)								(95,083	)
Interest-earning assets, net			15,078,762									15,269,855
Noninterest-earning assets			1,448,834									1,399,228
Total assets		$	16,527,596								$	16,669,083
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits		$	7,893,384			$	64,290		3.23	%	$	7,136,779			$	12,525		0.70	%
Securities loaned			1,303,883				16,169		4.92	%		980,530				9,407		3.81	%
Notes payable and other borrowings			1,527,371				20,646		5.36	%		1,262,985				11,054		3.47	%
Total interest-bearing liabilities			10,724,638				101,105		3.74	%		9,380,294				32,986		1.40	%
Noninterest-bearing liabilities
Noninterest-bearing deposits			3,347,752									4,543,067
Other liabilities			362,133									685,843
Total liabilities			14,434,523									14,609,204
Stockholders’ equity			2,066,564									2,032,717
Noncontrolling interest			26,509									27,162
Total liabilities and stockholders' equity		$	16,527,596								$	16,669,083
Net interest income (3)						$	116,255								$	123,852
Net interest spread (3)									1.94	%								2.65	%
Net interest margin (3)									3.04	%								3.20	%
________________________________
(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 $0.4 million for the three months ended September 30, 2023 and 2022, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, October 20, 2023. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review third quarter 2023 financial results. Interested parties can access the conference call by dialing 1-888-259-6580 (North America) and then using the access code 31393751. The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop-holdings.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 September 30, 2023, Hilltop employed approximately 3,900 people and operated approximately 336 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-Holdings.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 “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,” “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 the U.S. banking system caused by bank failures during early 2023, 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/20231019863942/en/

Investor Relations Contact:

Erik Yohe

214-525-4634

eyohe@hilltop-holdings.com

Source: Hilltop Holdings Inc.

FAQ

What were Hilltop's financial results for Q3 2023?

Hilltop produced income to common stockholders of $37.0 million, or $0.57 per diluted share, for Q3 2023.

Did Hilltop declare a dividend?

Yes, Hilltop's Board of Directors declared a quarterly cash dividend of $0.16 per common share.

What were Hilltop's return on average assets and return on average stockholders' equity for Q3 2023?

Hilltop's consolidated annualized return on average assets and return on average stockholders' equity for Q3 2023 were 0.94% and 7.11%, respectively.

What were Hilltop's total assets at September 30, 2023?

Hilltop's total assets were $16.4 billion at September 30, 2023.