Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2023

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DALLAS, January 25, 2024--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) ("Hilltop") today announced financial results for the fourth quarter and full year 2023. Hilltop produced income to common stockholders of $28.7 million, or $0.44 per diluted share, for the fourth quarter of 2023, compared to $25.6 million, or $0.39 per diluted share, for the fourth quarter of 2022. Income to common stockholders for the full year 2023 was $109.6 million, or $1.69 per diluted share, compared to $113.1 million, or $1.60 per diluted share, for the full year 2022. Hilltop’s financial results for the fourth quarter and full year 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 $0.17 per common share, a 6% increase from the prior quarter, payable on February 28, 2024, to all common stockholders of record as of the close of business on February 12, 2024. Additionally, the Hilltop Board of Directors authorized, subject to regulatory approvals or non-objections, a new stock repurchase program through January 2025, under which Hilltop may repurchase, in the aggregate, up to $75.0 million of its outstanding common stock. During 2023, Hilltop paid $5.1 million to repurchase an aggregate of 164,604 shares of its common stock at an average price of $30.95 per share pursuant to the 2023 stock repurchase program, which is inclusive of repurchases during the fourth quarter of 2023. These shares were returned to the pool of authorized but unissued shares of common stock.

Headwinds that began in 2022, and continued through 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 an adverse impact on our operating results during 2023. The impacts of such headwinds during 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, "2023 presented a challenging operating environment for Hilltop. Despite the turmoil created by bank failures in the first quarter of 2023, the prudent management of operations at our lines of business and sound stewardship of our balance sheet allowed us to continue to support our clients with exceptional service and end a volatile year with strong capital and liquidity.

"At PlainsCapital Bank, we delivered profitable results in the face of steep competition for deposits and muted loan demand from borrowers. PrimeLending continued to experience a difficult mortgage market as tight inventories and elevated mortgage rates challenged affordability for consumers and production volume. HilltopSecurities offset down markets for our Public Finance and Fixed Income business lines by generating exceptional results from our Structured Finance and Wealth Management platforms. The results at the broker-dealer reflect the value in our diversified offerings at HilltopSecurities.

"As we move into 2024, we will continue to proactively manage costs in this tight operating environment and focus on our conservative, long-term strategy to further build on Hilltop’s franchise value."

Fourth Quarter 2023 Highlights for Hilltop:

  • The provision for credit losses was $1.3 million during the fourth quarter of 2023, compared to a reversal of credit losses of $40 thousand in the third quarter of 2023 and a provision for credit losses of $3.6 million in the fourth quarter of 2022;

    • The provision for credit losses during the fourth quarter of 2023 reflected a slight build in the allowance related to increases in specific reserves and net portfolio changes, partially offset by improvements to the U.S. economic outlook since the prior quarter within the banking segment.

  • For the fourth 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 $69.2 million, compared to $71.1 million in the fourth quarter of 2022, a 2.7% decrease;

    • Mortgage loan origination production volume was $1.8 billion during the fourth quarter of 2023, compared to $2.0 billion in the fourth quarter of 2022;

    • Net gains from mortgage loans sold to third parties decreased to 189 basis points during the fourth quarter of 2023, compared to 199 basis points in the third quarter of 2023.

  • Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the fourth quarter of 2023 were 0.75% and 5.46%, respectively, compared to 0.63% and 4.99%, respectively, for the fourth quarter of 2022;

  • Hilltop’s book value per common share increased to $32.58 at December 31, 2023, compared to $31.91 at September 30, 2023;

  • Hilltop’s total assets were $16.5 billion and $16.4 billion at December 31, 2023 and September 30, 2023, respectively;

  • Loans1, net of allowance for credit losses, were $7.6 billion and $7.7 billion at December 31, 2023 and September 30, 2023, respectively;

  • Non-performing loans were $68.3 million, or 0.76% of total loans, at December 31, 2023, compared to $31.5 million, or 0.34% of total loans, at September 30, 2023;

    • Non-performing loans during the fourth quarter of 2023 increased from the prior period primarily due to the addition of a single non-owner occupied commercial real estate credit relationship within our hotel/motel portfolio industry subsector of $33.3 million.

  • Loans held for sale decreased by 10.9% from September 30, 2023 to $0.9 billion at December 31, 2023;

  • Total deposits were $11.1 billion at each of December 31, 2023 and September 30, 2023;

    • Total estimated uninsured deposits were $4.7 billion, or approximately 42% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $315.7 million, were $4.4 billion, or approximately 40% of total deposits, at December 31, 2023.

  • Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.23% and a Common Equity Tier 1 Capital Ratio of 19.31% at December 31, 2023;

  • Hilltop’s consolidated net interest margin4 decreased to 2.96% for the fourth quarter of 2023, compared to 3.02% in the third quarter of 2023;

  • For the fourth quarter of 2023, noninterest income was $179.0 million, compared to $169.8 million in the fourth quarter of 2022, a 5.4% increase;

  • For the fourth quarter 2023, noninterest expense was $250.8 million, compared to $253.4 million in the fourth quarter of 2022, a 1.0% decrease; and

  • Hilltop’s effective tax rate was 18.7% during the fourth quarter of 2023, compared to 26.6% during the same period in 2022.

    • The effective tax rate for the fourth quarter of 2023 was lower than the applicable statutory rate primarily due to investments in tax-exempt instruments and changes in accumulated tax reserves, partially offset by the impact of nondeductible expenses, 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 $344.1 million and $357.1 million at December 31, 2023 and September 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 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

December 31,

September 30,

June 30,

March 31,

December 31,

(in 000's)

2023

2023

2023

2023

2022

Cash and due from banks

$

1,858,700

$

1,513,747

$

1,584,709

$

1,764,081

$

1,579,512

Federal funds sold

650

3,650

650

743

650

Assets segregated for regulatory purposes

57,395

47,491

50,711

36,199

67,737

Securities purchased under agreements to resell

80,011

123,719

143,982

144,201

118,070

Securities:

Trading, at fair value

515,991

578,901

696,649

692,908

755,032

Available for sale, at fair value, net (1)

1,507,595

1,456,238

1,526,869

1,641,571

1,658,766

Held to maturity, at amortized cost, net (1)

812,677

825,079

847,437

862,280

875,532

Equity, at fair value

321

264

258

231

200

2,836,584

2,860,482

3,071,213

3,196,990

3,289,530

Loans held for sale

943,846

1,058,806

1,333,044

1,040,138

982,616

Loans held for investment, net of unearned income

8,079,745

8,204,052

8,354,122

8,192,846

8,092,673

Allowance for credit losses

(111,413

)

(110,822

)

(109,306

)

(97,354

)

(95,442

)

Loans held for investment, net

7,968,332

8,093,230

8,244,816

8,095,492

7,997,231

Broker-dealer and clearing organization receivables

1,573,931

1,460,352

1,474,177

1,560,246

1,038,055

Premises and equipment, net

168,856

172,097

176,574

180,132

184,950

Operating lease right-of-use assets

88,580

93,057

97,979

100,122

102,443

Mortgage servicing assets

96,662

104,951

95,101

103,314

100,825

Other assets

517,545

588,751

588,166

529,438

518,899

Goodwill

267,447

267,447

267,447

267,447

267,447

Other intangible assets, net

8,457

9,078

9,772

10,544

11,317

Total assets

$

16,466,996

$

16,396,858

$

17,138,341

$

17,029,087

$

16,259,282

Deposits:

Noninterest-bearing

$

3,007,101

$

3,200,247

$

3,451,438

$

3,807,878

$

3,968,862

Interest-bearing

8,056,091

7,902,850

7,712,739

7,289,269

7,346,887

Total deposits

11,063,192

11,103,097

11,164,177

11,097,147

11,315,749

Broker-dealer and clearing organization payables

1,430,734

1,368,064

1,306,646

1,383,317

966,470

Short-term borrowings

900,038

882,999

1,628,637

1,572,794

970,056

Securities sold, not yet purchased, at fair value

34,872

51,527

74,761

51,497

53,023

Notes payable

347,145

347,020

364,531

376,410

346,654

Operating lease liabilities

109,002

114,334

119,999

122,878

126,759

Other liabilities

431,684

422,955

389,336

341,246

417,042

Total liabilities

14,316,667

14,289,996

15,048,087

14,945,289

14,195,753

Common stock

652

652

651

650

647

Additional paid-in capital

1,054,662

1,052,867

1,050,191

1,044,774

1,046,331

Accumulated other comprehensive loss

(121,505

)

(145,083

)

(131,718

)

(125,461

)

(133,531

)

Retained earnings

1,189,222

1,171,250

1,144,624

1,136,901

1,123,636

Deferred compensation employee stock trust, net

228

340

450

446

481

Employee stock trust

(292

)

(446

)

(599

)

(599

)

(640

)

Total Hilltop stockholders' equity

2,122,967

2,079,580

2,063,599

2,056,711

2,036,924

Noncontrolling interests

27,362

27,282

26,655

27,087

26,605

Total stockholders' equity

2,150,329

2,106,862

2,090,254

2,083,798

2,063,529

Total liabilities & stockholders' equity

$

16,466,996

$

16,396,858

$

17,138,341

$

17,029,087

$

16,259,282

_______________________________

(1)

At December 31, 2023, the amortized cost of the available for sale securities portfolio was $1,621,747, while the fair value of the held to maturity securities portfolio was $731,858.

Three Months Ended

Year Ended

Consolidated Income Statements

December 31,

September 30,

December 31,

December 31,

December 31,

(in 000's, except per share data)

2023

2023

2022

2023

2022

Interest income:

Loans, including fees

$

138,096

$

142,402

$

117,906

$

542,274

$

416,207

Securities borrowed

18,659

17,683

14,162

71,924

44,414

Securities:

Taxable

28,763

27,166

23,293

108,250

75,805

Tax-exempt

2,545

2,464

3,002

10,763

10,013

Other

28,704

27,040

21,611

105,164

44,677

Total interest income

216,767

216,755

179,974

838,375

591,116

Interest expense:

Deposits

68,339

64,290

28,238

223,179

50,412

Securities loaned

17,247

16,169

13,179

65,175

38,570

Short-term borrowings

13,495

14,212

10,278

57,857

20,893

Notes payable

3,596

4,026

3,988

15,448

16,141

Other

2,864

2,408

849

9,869

6,125

Total interest expense

105,541

101,105

56,532

371,528

132,141

...

Net interest income

111,226

115,650

123,442

466,847

458,975

Provision for (reversal of) credit losses

1,265

(40

)

3,638

18,392

8,309

Net interest income after provision for (reversal of) credit losses

109,961

115,690

119,804

448,455

450,666

Noninterest income:

Net gains from sale of loans and other mortgage production income

36,387

47,262

35,949

172,150

302,384

Mortgage loan origination fees

32,844

41,478

35,198

144,539

149,598

Securities commissions and fees

33,002

28,044

33,143

121,875

139,122

Investment and securities advisory fees and commissions

35,780

39,662

30,661

134,327

127,399

Other

40,965

40,403

34,833

156,082

113,957

Total noninterest income

178,978

196,849

169,784

728,973

832,460

Noninterest expense:

Employees' compensation and benefits

160,390

173,195

167,892

678,310

773,688

Occupancy and equipment, net

21,524

21,912

23,077

89,326

97,115

Professional services

13,170

12,639

11,555

49,100

48,495

Other

55,761

52,271

50,844

211,573

207,701

Total noninterest expense

250,845

260,017

253,368

1,028,309

1,126,999

Income before income taxes

38,094

52,522

36,220

149,119

156,127

Income tax expense

7,132

13,211

9,642

31,140

36,833

Net income

30,962

39,311

26,578

117,979

119,294

Less: Net income attributable to noncontrolling interest

2,291

2,269

1,022

8,333

6,160

Income attributable to Hilltop

$

28,671

$

37,042

$

25,556

$

109,646

$

113,134

Earnings per common share:

Basic

$

0.44

$

0.57

$

0.40

$

1.69

$

1.61

Diluted

$

0.44

$

0.57

$

0.39

$

1.69

$

1.60

Cash dividends declared per common share

$

0.16

$

0.16

$

0.15

$

0.64

$

0.60

Weighted average shares outstanding:

Basic

65,136

65,106

64,602

65,043

70,434

Diluted

65,138

65,108

64,779

65,045

70,626

Three Months Ended December 31, 2023

Segment Results

Mortgage

All Other and

Hilltop

(in 000's)

Banking

Broker-Dealer

Origination

Corporate

Eliminations

Consolidated

Net interest income (expense)

$

93,133

$

13,615

$

(4,715

)

$

(2,985

)

$

12,178

$

111,226

Provision for (reversal of) credit losses

1,350

(85

)

—

—

—

1,265

Noninterest income

11,784

106,374

69,185

3,943

(12,308

)

178,978

Noninterest expense

55,784

99,960

80,367

14,881

(147

)

250,845

Income (loss) before taxes

$

47,783

$

20,114

$

(15,897

)

$

(13,923

)

$

17

$

38,094

Year Ended December 31, 2023

Segment Results

Mortgage

All Other and

Hilltop

(in 000's)

Banking

Broker-Dealer

Origination

Corporate

Eliminations

Consolidated

Net interest income (expense)

$

397,936

$

52,894

$

(20,305

)

$

(12,961

)

$

49,283

$

466,847

Provision for (reversal of) credit losses

18,525

(133

)

—

—

—

18,392

Noninterest income

45,830

403,538

316,840

12,887

(50,122

)

728,973

Noninterest expense

226,234

383,024

359,285

60,631

(865

)

1,028,309

Income (loss) before taxes

$

199,007

$

73,541

$

(62,750

)

$

(60,705

)

$

26

$

149,119

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

Selected Financial Data

2023

2023

2022

2023

2022

Hilltop Consolidated:

Return on average stockholders' equity

5.46

%

7.11

%

4.99

%

5.31

%

5.11

%

Return on average assets

0.75

%

0.94

%

0.63

%

0.71

%

0.69

%

Net interest margin (1)

2.96

%

3.02

%

3.23

%

3.07

%

2.87

%

Net interest margin (taxable equivalent) (2):

As reported

2.98

%

3.04

%

3.24

%

3.09

%

2.88

%

Impact of purchase accounting

4 bps

7 bps

7 bps

6 bps

7 bps

Book value per common share ($)

32.58

31.91

31.49

32.58

31.49

Shares outstanding, end of period (000's)

65,153

65,170

64,685

65,153

64,685

Dividend payout ratio (3)

36.35

%

28.12

%

37.92

%

37.97

%

37.36

%

Banking Segment:

Net interest margin (1)

2.94

%

3.08

%

3.42

%

3.13

%

3.11

%

Net interest margin (taxable equivalent) (2):

As reported

2.95

%

3.09

%

3.43

%

3.14

%

3.11

%

Impact of purchase accounting

5 bps

8 bps

8 bps

7 bps

9 bps

Accretion of discount on loans ($000's)

1,202

2,226

2,173

8,632

10,552

Net recoveries (charge-offs) ($000's)

(674

)

1,556

21

(2,421

)

(4,219

)

Return on average assets

1.12

%

1.20

%

1.31

%

1.15

%

1.19

%

Fee income ratio

11.2

%

10.5

%

9.8

%

10.3

%

10.7

%

Efficiency ratio

53.2

%

51.4

%

48.9

%

51.0

%

50.8

%

Employees' compensation and benefits ($000's)

29,420

30,641

34,526

123,345

137,531

Broker-Dealer Segment:

Net revenue ($000's) (4)

119,989

118,703

106,919

456,432

393,540

Employees' compensation and benefits ($000's)

68,746

69,930

60,552

266,395

251,145

Variable compensation expense ($000's)

39,435

39,929

32,042

144,984

138,705

Compensation as a % of net revenue

57.3

%

58.9

%

56.6

%

58.4

%

63.8

%

Pre-tax margin (5)

16.8

%

18.2

%

18.5

%

16.1

%

9.6

%

Mortgage Origination Segment:

Mortgage loan originations - volume ($000's):

Home purchases

1,698,009

2,091,444

1,895,731

7,701,758

10,823,002

Refinancings

117,018

152,257

147,511

541,373

1,837,154

Total mortgage loan originations - volume

1,815,027

2,243,701

2,043,242

8,243,131

12,660,156

Mortgage loan sales - volume ($000's)

1,874,001

2,395,357

2,038,990

8,046,585

13,200,471

Net gains from mortgage loan sales (basis points):

Loans sold to third parties

189

199

211

198

263

Impact of loans retained by banking segment

0

(1

)

(19

)

(4

)

(11

)

As reported

189

198

192

194

252

Mortgage servicing rights asset ($000's) (6)

96,662

104,951

100,825

96,662

100,825

Employees' compensation and benefits ($000's)

53,766

64,016

64,940

251,119

353,973

Variable compensation expense ($000's)

24,085

33,070

26,724

118,977

183,804

_________________________________

(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, $0.3 million, $2.7 million and $1.6 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.2 million, $0.7 million and $0.8 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.

December 31,

September 30,

June 30,

March 31,

December 31,

Capital Ratios

2023

2023

2023

2023

2022

Tier 1 capital (to average assets):

PlainsCapital

10.55

%

10.62

%

10.28

%

10.69

%

10.26

%

Hilltop

12.23

%

11.92

%

11.47

%

11.82

%

11.47

%

Common equity Tier 1 capital (to risk-weighted assets):

PlainsCapital

15.43

%

15.31

%

14.48

%

14.97

%

14.98

%

Hilltop

19.31

%

18.60

%

17.61

%

17.99

%

18.23

%

Tier 1 capital (to risk-weighted assets):

PlainsCapital

15.43

%

15.31

%

14.48

%

14.97

%

14.98

%

Hilltop

19.31

%

18.60

%

17.61

%

17.99

%

18.23

%

Total capital (to risk-weighted assets):

PlainsCapital

16.57

%

16.45

%

15.56

%

15.94

%

15.91

%

Hilltop

22.33

%

21.54

%

20.41

%

20.75

%

20.98

%

December 31,

September 30,

June 30,

March 31,

December 31,

Non-Performing Assets Portfolio Data

2023

2023

2023

2023

2022

Loans accounted for on a non-accrual basis ($000's):

Commercial real estate:

Non-owner occupied

36,440

2,375

2,456

1,038

1,250

Owner occupied

5,098

4,964

1,096

935

3,019

Commercial and industrial

9,502

10,190

21,442

10,807

9,095

Construction and land development

3,480

760

593

199

198

1-4 family residential

13,801

13,202

13,360

14,387

15,941

Consumer

6

7

9

12

14

Broker-dealer

—

—

—

—

—

68,327

31,498

38,956

27,378

29,517

Troubled debt restructurings included in accruing loans held for investment ($000's) (1)

—

—

—

—

803

Non-performing loans ($000's) (1)

68,327

31,498

38,956

27,378

30,320

Non-performing loans as a % of total loans ($000's) (1)

0.76

%

0.34

%

0.40

%

0.30

%

0.33

%

Other real estate owned ($000's)

5,095

5,386

3,481

3,202

2,325

Other repossessed assets ($000's)

—

—

—

—

—

Non-performing assets ($000's) (1)

73,422

36,884

42,437

30,580

32,645

Non-performing assets as a % of total assets ($000's) (1)

0.45

%

0.22

%

0.25

%

0.18

%

0.20

%

Loans past due 90 days or more and still accruing ($000's) (2)

115,090

106,346

130,036

114,523

92,099

________________________________

(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 December 31,

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

$

841,715

$

13,239

6.29

%

$

882,322

$

11,634

5.27

%

Loans held for investment, gross (2)

7,902,814

124,857

6.27

%

7,774,350

106,271

5.42

%

Investment securities - taxable

2,629,808

28,763

4.37

%

2,843,881

23,293

3.28

%

Investment securities - non-taxable (3)

313,714

3,157

12.08

%

354,207

3,286

3.71

%

Federal funds sold and securities purchased under agreements to resell

153,785

2,082

5.37

%

161,632

2,173

5.33

%

Interest-bearing deposits in other financial institutions

1,646,885

21,948

5.29

%

1,749,902

15,751

3.57

%

Securities borrowed

1,371,092

18,659

5.33

%

1,350,873

14,162

4.10

%

Other

48,120

4,675

38.54

%

56,196

3,686

26.02

%

Interest-earning assets, gross (3)

14,907,933

217,380

5.79

%

15,173,363

180,256

4.71

%

Allowance for credit losses

(110,832

)

(92,344

)

Interest-earning assets, net

14,797,101

15,081,019

Noninterest-earning assets

1,473,839

1,637,202

Total assets

$

16,270,940

$

16,718,221

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

$

7,966,770

$

68,339

3.40

%

$

7,154,802

$

28,238

1.57

%

Securities loaned

1,324,887

17,247

5.16

%

1,274,038

13,179

4.10

%

Notes payable and other borrowings

1,439,297

19,955

5.50

%

1,355,809

15,114

4.42

%

Total interest-bearing liabilities

10,730,954

105,541

3.90

%

9,784,649

56,531

2.29

%

Noninterest-bearing liabilities

Noninterest-bearing deposits

3,096,244

4,222,143

Other liabilities

335,307

652,900

Total liabilities

14,162,505

14,659,692

Stockholders’ equity

2,081,833

2,032,194

Noncontrolling interest

26,602

26,335

Total liabilities and stockholders' equity

$

16,270,940

$

16,718,221

Net interest income (3)

$

111,839

$

123,725

Net interest spread (3)

1.89

%

2.42

%

Net interest margin (3)

2.98

%

3.24

%

Year Ended December 31,

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

$

944,470

$

53,736

5.69

%

$

1,221,235

$

52,315

4.28

%

Loans held for investment, gross (2)

7,950,878

488,538

6.23

%

7,840,848

363,892

4.71

%

Investment securities - taxable

2,726,763

108,250

3.97

%

2,819,282

75,805

2.69

%

Investment securities - non-taxable (3)

363,493

13,463

3.70

%

310,315

11,608

3.74

%

Federal funds sold and securities purchased under agreements to resell

145,696

8,954

6.15

%

162,575

4,098

2.52

%

Interest-bearing deposits in other financial institutions

1,597,865

79,657

4.99

%

2,306,960

31,705

1.37

%

Securities borrowed

1,409,765

71,924

5.03

%

1,298,276

44,414

3.37

%

Other

65,912

16,554

25.11

%

55,280

8,873

16.05

%

Interest-earning assets, gross (3)

15,204,842

841,076

5.53

%

16,014,771

592,710

3.70

%

Allowance for credit losses

(103,975

)

(92,828

)

Interest-earning assets, net

15,100,867

15,921,943

Noninterest-earning assets

1,404,393

1,488,970

Total assets

$

16,505,260

$

17,410,913

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

$

7,711,570

$

223,179

2.89

%

$

7,561,501

$

50,412

0.67

%

Securities loaned

1,331,443

65,175

4.90

%

1,184,498

38,570

3.26

%

Notes payable and other borrowings

1,579,170

83,174

5.27

%

1,293,133

43,158

3.34

%

Total interest-bearing liabilities

10,622,183

371,528

3.50

%

10,039,132

132,140

1.32

%

Noninterest-bearing liabilities

Noninterest-bearing deposits

3,441,437

4,455,779

Other liabilities

351,938

675,628

Total liabilities

14,415,558

15,170,539

Stockholders’ equity

2,063,174

2,213,733

Noncontrolling interest

26,528

26,641

Total liabilities and stockholders' equity

$

16,505,260

$

17,410,913

Net interest income (3)

$

469,548

$

460,570

Net interest spread (3)

2.03

%

2.38

%

Net interest margin (3)

3.09

%

2.88

%

_____________________________

(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 $0.3 million for the three months ended December 31, 2023 and 2022, respectively, and $2.7 million and $1.6 million for the year ended December 31, 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, January 26, 2024. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review fourth quarter and full year 2023 financial results. Interested parties can access the conference call by dialing 1-888-886-7786 (North America) or 1-416-764-8658 (International) and then using the access code 16475706. 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 December 31, 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 financial services industry, 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/20240125547483/en/

Contacts

Investor Relations Contact:
Erik Yohe
214-525-4634
eyohe@hilltop-holdings.com

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