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