Hilltop Holdings Inc. Announces Financial Results for Third Quarter 2024

Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the third quarter of 2024. Hilltop produced income to common stockholders of $29.7 million, or $0.46 per diluted share, for the third quarter of 2024, compared to $37.0 million, or $0.57 per diluted share, for the third quarter of 2023. Hilltop’s financial results for the third quarter of 2024, compared with the same period in 2023, included a decline in net interest income, partially offset by changes in the provision for credit losses within the banking segment, an increase in net revenues in the structured finance and fixed income services business lines, a decline in net revenues in the wealth management business line and higher noninterest expenses within the broker-dealer segment, while the mortgage origination segment had declines in both noninterest income and expense.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.17 per common share payable on November 22, 2024, to all common stockholders of record as of the close of business on November 8, 2024.

The extent of the impacts of uncertain economic conditions on our financial performance for the remainder of 2024 will depend in part 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, changes in funding costs, inflationary pressures, and international armed conflicts and their impact on supply chains.

Jeremy B. Ford, President and CEO of Hilltop, said, “Hilltop continues to demonstrate operational strength despite challenging mortgage conditions and the transitioning interest rate environment. During the quarter, PlainsCapital Bank and HilltopSecurities both increased profitability on a sequential basis, while PrimeLending’s results were impacted by lower origination volume and a negative mortgage servicing rights asset fair value mark to market adjustment. As we enter the anticipated rate cutting cycle, we are focused on strategically lowering funding costs, managing asset yields and optimizing total earning assets. We will continue to execute on our long-term strategy of serving our customers, compounding stockholder value and prudently stewarding our capital.”

Third Quarter 2024 Highlights for Hilltop:

• The reversal of credit losses was $1.3 million during the third quarter of 2024, compared to a provision for credit losses of $10.9 million in the second quarter of 2024 and a reversal of credit losses of $40 thousand in the third quarter of 2023;
  • The reversal of credit losses during the third quarter of 2024 was primarily driven by net charge-offs and loan portfolio changes, including a change in the macroeconomic outlook scenario utilized, associated with collectively evaluated loans, partially offset by a build in the allowance related to specific reserves within the banking segment since the prior quarter.
• For the third quarter of 2024, net gains from sale of loans and other mortgage production income and mortgage loan origination fees was $79.9 million, compared to $88.7 million in the third quarter of 2023, a 9.9% decrease;
  • Mortgage loan origination production volume was $2.3 billion during the third quarter of 2024, compared to $2.2 billion in the third quarter of 2023;
  • Net gains from mortgage loans sold to third parties decreased to 224 basis points during the third quarter of 2024, compared to 233 basis points in the second quarter of 2024.
• Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the third quarter of 2024 were 0.84% and 5.51%, respectively, compared to 0.94% and 7.11%, respectively, for the third quarter of 2023;
• Hilltop’s book value per common share increased to $33.51 at September 30, 2024, compared to $32.86 at June 30, 2024;
• Hilltop’s total assets were $15.9 billion and $15.6 billion at September 30, 2024 and June 30, 2024, respectively;
• Loans ¹ , net of allowance for credit losses, were $7.5 billion and $7.7 billion at September 30, 2024 and June 30, 2024, respectively;
• Non-accrual loans were $91.2 million, or 1.02% of total loans, at September 30, 2024, compared to $105.7 million, or 1.12% of total loans, at June 30, 2024;
• Loans held for sale decreased by 26.2% from June 30, 2024 to $0.9 billion at September 30, 2024;
• Total deposits were $10.8 billion and $10.4 billion at September 30, 2024 and June 30, 2024, respectively;
  • Total estimated uninsured deposits were $5.3 billion, or approximately 49% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $312.3 million, were $5.0 billion, or approximately 46% of total deposits, at September 30, 2024.
• Hilltop maintained strong capital levels ² with a Tier 1 Leverage Ratio ³ of 12.95% and a Common Equity Tier 1 Capital Ratio of 20.48% at September 30, 2024;
• Hilltop’s consolidated net interest margin ⁴ decreased to 2.84% for the third quarter of 2024, compared to 2.90% in the second quarter of 2024;
• For the third quarter of 2024, noninterest income was $200.4 million, compared to $196.8 million in the third quarter of 2023, a 1.8% increase;
• For third quarter of 2024, noninterest expense was $264.3 million, compared to $260.0 million in the third quarter of 2023, a 1.7% increase; and
• Hilltop’s effective tax rate was 22.5% during the third quarter of 2024, compared to 25.2% during the same period in 2023.
  • The effective tax rate for the third 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.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, October 25, 2024. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review third quarter 2024 financial results. Interested parties can access the conference call by dialing 800-267-6316 (North America) or 203-518-9856 (International) and then using the conference ID HH3Q24. 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 September 30, 2024, Hilltop employed approximately 3,650 people and operated approximately 310 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; (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.

Source: Hilltop Holdings Inc.