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DALLAS, January 30, 2025--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) ("Hilltop") today announced financial results for the fourth quarter and full year 2024. Hilltop produced income to common stockholders of $35.5 million, or $0.55 per diluted share, for the fourth quarter of 2024, compared to $28.7 million, or $0.44 per diluted share, for the fourth quarter of 2023. Income to common stockholders for the full year 2024 was $113.2 million, or $1.74 per diluted share, compared to $109.6 million, or $1.69 per diluted share, for the full year 2023. Hilltop’s financial results for the fourth quarter, compared with the same period in 2023, included an increase in net interest income and a reversal of credit losses, partially offset by an increase in noninterest expenses within the banking segment, net revenues and noninterest expenses increased within the broker-dealer segment, and the mortgage origination segment had an increase in noninterest income. Hilltop’s financial results for the full year 2024, compared with 2023, included a decline in net interest income, partially offset by a decline in the provision for credit losses within the banking segment, net revenues and noninterest expenses increased within the broker-dealer segment, and the mortgage origination segment had decreases in both noninterest income and expense.
Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.18 per common share, a 6% increase from the prior quarter, payable on February 27, 2025, to all common stockholders of record as of the close of business on February 13, 2025. Additionally, the Hilltop Board of Directors authorized a new stock repurchase program through January 2026, under which Hilltop may repurchase, in the aggregate, up to $100.0 million of its outstanding common stock. During 2024, Hilltop paid $19.9 million to repurchase an aggregate of 640,042 shares of its common stock at an average price of $31.04 per share pursuant to the 2024 stock repurchase program. These shares were returned to the pool of authorized but unissued shares of common stock.
On January 15, 2025, Hilltop redeemed all of its outstanding 5% senior notes due April 15, 2025 at a redemption price equal to the aggregate principal amount of $150 million, plus accrued and unpaid interest using cash on hand. In addition, on January 27, 2025, Hilltop announced that its merchant bank subsidiary entered into a definitive agreement to sell all of the capital stock of Moser Acquisition, Inc. Our approximate 30% aggregate interest in Moser Holdings, LLC, which owns Moser Acquisition, Inc., is expected to result in an estimated net gain on sale of approximately $23 million to $27 million. The closing of the transaction, which is expected to occur in the first quarter of 2025, is subject to customary closing conditions.
The extent of the impact of uncertain economic conditions on our financial performance during 2025 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, changes in the political environment and international armed conflicts and their impact on supply chains.
Jeremy B. Ford, President and CEO of Hilltop, said, "Over the course of 2024, Hilltop adapted to a new operating environment as the Federal Reserve cut interest rates for the first time since the spring of 2020, and we delivered a year over year increase in pre-tax profitability. During the fourth quarter, PlainsCapital Bank grew customer deposit balances and improved loan pipeline pull through rates. HilltopSecurities capitalized on tailwinds in its Structured Finance and Wealth Management business lines to deliver a pre-tax margin of 16%. PrimeLending realized a 24% increase in origination volume, when compared to the fourth quarter of 2023, but continued to face a challenging mortgage market due to a lack of inventory and stressed affordability for potential home buyers.
"As we enter 2025, we remain focused on protecting our balance sheet and executing on our strategic plan to further build on Hilltop’s franchise value by serving our customers and the communities in which we operate."
Fourth Quarter 2024 Highlights for Hilltop:
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The reversal of credit losses was $5.9 million during the fourth quarter of 2024, compared to a reversal of credit losses of $1.3 million in the third quarter of 2024 and a provision for credit losses of $1.3 million in the fourth quarter of 2023;
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The reversal of credit losses during the fourth quarter of 2024 was primarily driven by net charge-offs, loan portfolio changes and changes in the U.S. economic outlook 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.
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For the fourth quarter of 2024, net gains from sale of loans and other mortgage production income and mortgage loan origination fees was $73.7 million, compared to $69.2 million in the fourth quarter of 2023, a 6.4% increase;
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Mortgage loan origination production volume was $2.3 billion during the fourth quarter of 2024, compared to $1.8 billion in the fourth quarter of 2023;
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Net gains from mortgage loans sold to third parties increased to 226 basis points during the fourth quarter of 2024, compared to 224 basis points in the third quarter of 2024.
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Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the fourth quarter of 2024 were 0.92% and 6.50%, respectively, compared to 0.75% and 5.46%, respectively, for the fourth quarter of 2023;
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Hilltop’s book value per common share increased to $33.71 at December 31, 2024, compared to $33.51 at September 30, 2024;
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Hilltop’s total assets were $16.3 billion and $15.9 billion at December 31, 2024 and September 30, 2024, respectively;
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Loans1, net of allowance for credit losses, were $7.5 billion at both December 31, 2024 and September 30, 2024, respectively;
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Non-accrual loans were $88.1 million, or 1.00% of total loans, at December 31, 2024, compared to $91.2 million, or 1.02% of total loans, at September 30, 2024;
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Loans held for sale decreased by 8.0% from September 30, 2024 to $858.7 million at December 31, 2024;
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Total deposits were $11.1 billion and $10.8 billion at December 31, 2024 and September 30, 2024, respectively;
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Total estimated uninsured deposits were $5.7 billion, or approximately 52% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $363.1 million, were $5.3 billion, or approximately 48% of total deposits, at December 31, 2024.
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Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.57% and a Common Equity Tier 1 Capital Ratio of 21.23% at December 31, 2024;
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Hilltop’s consolidated net interest margin4 decreased to 2.72% for the fourth quarter of 2024, compared to 2.84% in the third quarter of 2024;
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For the fourth quarter of 2024, noninterest income was $195.6 million, compared to $179.0 million in the fourth quarter of 2023, an 9.3% increase;
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For fourth quarter of 2024, noninterest expense was $262.8 million, compared to $250.8 million in the fourth quarter of 2023, a 4.7% increase; and
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Hilltop’s effective tax rate was 14.2% during the fourth quarter of 2024, compared to 18.7% during the same period in 2023.
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The effective tax rate for the fourth quarter of 2024 was lower than the applicable statutory rate primarily due to changes in accumulated tax reserves, state income tax reductions realized during the quarter and investments in tax-exempt instruments, partially offset by the impact of nondeductible expenses, nondeductible compensation expense and other permanent adjustments.
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| ________________ | |
| 1 | "Loans" reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $363.7 million and $340.4 million at December 31, 2024 and September 30, 2024, respectively. |
| 2 | Capital ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period through December 31, 2024. As of January 1, 2025, Hilltop had fully captured the day-one regulatory capital effects resulting from the implementation of CECL. |
| 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) | 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||||||||
| Cash and due from banks | $ | 2,298,977 | $ | 1,961,627 | $ | 798,300 | $ | 1,710,066 | $ | 1,858,700 | ||||||||||
| Federal funds sold | 650 | 3,650 | 5,650 | 650 | 650 | |||||||||||||||
| Assets segregated for regulatory purposes | 70,963 | 55,628 | 51,046 | 70,717 | 57,395 | |||||||||||||||
| Securities purchased under agreements to resell | 88,728 | 81,766 | 111,914 | 91,608 | 80,011 | |||||||||||||||
| Securities: | ||||||||||||||||||||
| Trading, at fair value | 524,916 | 540,836 | 721,384 | 657,700 | 515,991 | |||||||||||||||
| Available for sale, at fair value, net (1) | 1,396,549 | 1,405,700 | 1,433,107 | 1,480,555 | 1,507,595 | |||||||||||||||
| Held to maturity, at amortized cost, net (1) | 737,899 | 754,824 | 777,456 | 790,550 | 812,677 | |||||||||||||||
| Equity, at fair value | 297 | 287 | 254 | 315 | 321 | |||||||||||||||
| 2,659,661 | 2,701,647 | 2,932,201 | 2,929,120 | 2,836,584 | ||||||||||||||||
| Loans held for sale | 858,665 | 933,724 | 1,264,437 | 842,324 | 943,846 | |||||||||||||||
| Loans held for investment, net of unearned income | 7,950,551 | 7,979,630 | 8,173,520 | 8,062,693 | 8,079,745 | |||||||||||||||
| Allowance for credit losses | (101,116 | ) | (110,918 | ) | (115,082 | ) | (104,231 | ) | (111,413 | ) | ||||||||||
| Loans held for investment, net | 7,849,435 | 7,868,712 | 8,058,438 | 7,958,462 | 7,968,332 | |||||||||||||||
| Broker-dealer and clearing organization receivables | 1,452,366 | 1,220,784 | 1,297,175 | 1,473,561 | 1,573,931 | |||||||||||||||
| Premises and equipment, net | 148,245 | 157,803 | 161,746 | 165,557 | 168,856 | |||||||||||||||
| Operating lease right-of-use assets | 90,563 | 92,041 | 93,994 | 95,343 | 88,580 | |||||||||||||||
| Mortgage servicing assets | 5,723 | 45,742 | 52,902 | 95,591 | 96,662 | |||||||||||||||
| Other assets | 470,073 | 528,839 | 517,811 | 501,244 | 517,545 | |||||||||||||||
| Goodwill | 267,447 | 267,447 | 267,447 | 267,447 | 267,447 | |||||||||||||||
| Other intangible assets, net | 6,633 | 6,995 | 7,429 | 7,943 | 8,457 | |||||||||||||||
| Total assets | $ | 16,268,129 | $ | 15,926,405 | $ | 15,620,490 | $ | 16,209,633 | $ | 16,466,996 | ||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing | $ | 2,768,707 | $ | 2,831,539 | $ | 2,845,441 | $ | 3,028,543 | $ | 3,007,101 | ||||||||||
| Interest-bearing | 8,296,615 | 7,959,908 | 7,528,415 | 7,855,553 | 8,056,091 | |||||||||||||||
| Total deposits | 11,065,322 | 10,791,447 | 10,373,856 | 10,884,096 | 11,063,192 | |||||||||||||||
| Broker-dealer and clearing organization payables | 1,331,902 | 1,110,373 | 1,285,226 | 1,436,462 | 1,430,734 | |||||||||||||||
| Short-term borrowings | 834,023 | 914,645 | 897,613 | 892,574 | 900,038 | |||||||||||||||
| Securities sold, not yet purchased, at fair value | 57,234 | 47,773 | 75,546 | 60,562 | 34,872 | |||||||||||||||
| Notes payable | 347,667 | 347,533 | 347,402 | 347,273 | 347,145 | |||||||||||||||
| Operating lease liabilities | 109,103 | 110,799 | 113,096 | 114,518 | 109,002 | |||||||||||||||
| Other liabilities | 304,566 | 397,976 | 365,140 | 314,718 | 431,684 | |||||||||||||||
| Total liabilities | 14,049,817 | 13,720,546 | 13,457,879 | 14,050,203 | 14,316,667 | |||||||||||||||
| Common stock | 650 | 650 | 650 | 653 | 652 | |||||||||||||||
| Additional paid-in capital | 1,052,219 | 1,050,497 | 1,047,523 | 1,049,831 | 1,054,662 | |||||||||||||||
| Accumulated other comprehensive loss | (111,497 | ) | (98,168 | ) | (119,171 | ) | (119,606 | ) | (121,505 | ) | ||||||||||
| Retained earnings | 1,248,593 | 1,224,117 | 1,205,467 | 1,201,013 | 1,189,222 | |||||||||||||||
| Deferred compensation employee stock trust, net | — | — | 1 | 115 | 228 | |||||||||||||||
| Employee stock trust | — | — | (1 | ) | (142 | ) | (292 | ) | ||||||||||||
| Total Hilltop stockholders' equity | 2,189,965 | 2,177,096 | 2,134,469 | 2,131,864 | 2,122,967 | |||||||||||||||
| Noncontrolling interests | 28,347 | 28,763 | 28,142 | 27,566 | 27,362 | |||||||||||||||
| Total stockholders' equity | 2,218,312 | 2,205,859 | 2,162,611 | 2,159,430 | 2,150,329 | |||||||||||||||
| Total liabilities & stockholders' equity | $ | 16,268,129 | $ | 15,926,405 | $ | 15,620,490 | $ | 16,209,633 | $ | 16,466,996 | ||||||||||
| ________________ | |
| (1) | At December 31, 2024, the amortized cost of the available for sale securities portfolio was $1,498,415, while the fair value of the held to maturity securities portfolio was $649,872. |
| 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) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans, including fees | $ | 131,726 | $ | 139,821 | $ | 138,096 | $ | 544,505 | $ | 542,274 | ||||||||||
| Securities borrowed | 17,492 | 19,426 | 18,659 | 77,785 | 71,924 | |||||||||||||||
| Securities: | ||||||||||||||||||||
| Taxable | 29,212 | 26,265 | 28,763 | 107,007 | 108,250 | |||||||||||||||
| Tax-exempt | 2,944 | 2,438 | 2,545 | 10,186 | 10,763 | |||||||||||||||
| Other | 27,216 | 23,092 | 28,704 | 96,906 | 105,164 | |||||||||||||||
| Total interest income | 208,590 | 211,042 | 216,767 | 836,389 | 838,375 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 67,411 | 70,641 | 68,339 | 275,291 | 223,179 | |||||||||||||||
| Securities loaned | 16,407 | 18,499 | 17,247 | 72,614 | 65,175 | |||||||||||||||
| Short-term borrowings | 10,992 | 10,878 | 13,495 | 44,134 | 57,857 | |||||||||||||||
| Notes payable | 3,910 | 3,555 | 3,596 | 14,659 | 15,448 | |||||||||||||||
| Other | 4,386 | 2,426 | 2,864 | 11,893 | 9,869 | |||||||||||||||
| Total interest expense | 103,106 | 105,999 | 105,541 | 418,591 | 371,528 | |||||||||||||||
| Net interest income | 105,484 | 105,043 | 111,226 | 417,798 | 466,847 | |||||||||||||||
| Provision for (reversal of) credit losses | (5,852 | ) | (1,270 | ) | 1,265 | 941 | 18,392 | |||||||||||||
| Net interest income after provision for (reversal of) credit losses | 111,336 | 106,313 | 109,961 | 416,857 | 448,455 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Net gains from sale of loans and other mortgage production income | 43,553 | 47,816 | 36,387 | 190,021 | 172,150 | |||||||||||||||
| Mortgage loan origination fees | 30,111 | 32,119 | 32,844 | 123,066 | 144,539 | |||||||||||||||
| Securities commissions and fees | 35,338 | 30,434 | 27,380 | 125,655 | 100,532 | |||||||||||||||
| Investment and securities advisory fees and commissions | 37,514 | 42,220 | 35,780 | 142,952 | 134,327 | |||||||||||||||
| Other | 49,074 | 47,854 | 46,587 | 189,262 | 177,425 | |||||||||||||||
| Total noninterest income | 195,590 | 200,443 | 178,978 | 770,956 | 728,973 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Employees' compensation and benefits | 173,334 | 177,987 | 160,390 | 687,149 | 678,310 | |||||||||||||||
| Occupancy and equipment, net | 25,707 | 22,317 | 21,524 | 91,233 | 89,326 | |||||||||||||||
| Professional services | 12,791 | 11,645 | 13,170 | 44,437 | 49,100 | |||||||||||||||
| Other | 50,925 | 52,363 | 55,761 | 210,737 | 211,573 | |||||||||||||||
| Total noninterest expense | 262,757 | 264,312 | 250,845 | 1,033,556 | 1,028,309 | |||||||||||||||
| Income before income taxes | 44,169 | 42,444 | 38,094 | 154,257 | 149,119 | |||||||||||||||
| Income tax expense | 6,285 | 9,539 | 7,132 | 31,047 | 31,140 | |||||||||||||||
| Net income | 37,884 | 32,905 | 30,962 | 123,210 | 117,979 | |||||||||||||||
| Less: Net income attributable to noncontrolling interest | 2,365 | 3,212 | 2,291 | 9,997 | 8,333 | |||||||||||||||
| Income attributable to Hilltop | $ | 35,519 | $ | 29,693 | $ | 28,671 | $ | 113,213 | $ | 109,646 | ||||||||||
| Earnings per common share: | ||||||||||||||||||||
| Basic | $ | 0.55 | $ | 0.46 | $ | 0.44 | $ | 1.74 | $ | 1.69 | ||||||||||
| Diluted | $ | 0.55 | $ | 0.46 | $ | 0.44 | $ | 1.74 | $ | 1.69 | ||||||||||
| Cash dividends declared per common share | $ | 0.17 | $ | 0.17 | $ | 0.16 | $ | 0.68 | $ | 0.64 | ||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 64,935 | 64,928 | 65,136 | 65,036 | 65,043 | |||||||||||||||
| Diluted | 64,943 | 64,946 | 65,138 | 65,046 | 65,045 | |||||||||||||||
| Three Months Ended December 31, 2024 | ||||||||||||||||||||||||
| Segment Results | Mortgage | All Other and | Hilltop | |||||||||||||||||||||
| (in 000's) | Banking | Broker-Dealer | Origination | Corporate | Eliminations | Consolidated | ||||||||||||||||||
| Net interest income (expense) | $ | 94,946 | $ | 12,046 | $ | (3,627 | ) | $ | (3,277 | ) | $ | 5,396 | $ | 105,484 | ||||||||||
| Provision for (reversal of) credit losses | (5,665 | ) | (187 | ) | — | — | — | (5,852 | ) | |||||||||||||||
| Noninterest income | 11,411 | 114,321 | 73,740 | 1,767 | (5,649 | ) | 195,590 | |||||||||||||||||
| Noninterest expense | 61,426 | 106,181 | 80,022 | 15,379 | (251 | ) | 262,757 | |||||||||||||||||
| Income (loss) before taxes | $ | 50,596 | $ | 20,373 | $ | (9,909 | ) | $ | (16,889 | ) | $ | (2 | ) | $ | 44,169 | |||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||||||
| Segment Results | Mortgage | All Other and | Hilltop | |||||||||||||||||||||
| (in 000's) | Banking | Broker-Dealer | Origination | Corporate | Eliminations | Consolidated | ||||||||||||||||||
| Net interest income (expense) | $ | 372,546 | $ | 48,942 | $ | (16,867 | ) | $ | (12,838 | ) | $ | 26,015 | $ | 417,798 | ||||||||||
| Provision for (reversal of) credit losses | 992 | (51 | ) | — | — | — | 941 | |||||||||||||||||
| Noninterest income | 43,295 | 422,801 | 313,229 | 18,515 | (26,884 | ) | 770,956 | |||||||||||||||||
| Noninterest expense | 232,954 | 408,283 | 330,088 | 63,110 | (879 | ) | 1,033,556 | |||||||||||||||||
| Income (loss) before taxes | $ | 181,895 | $ | 63,511 | $ | (33,726 | ) | $ | (57,433 | ) | $ | 10 | $ | 154,257 | ||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| Selected Financial Data | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Hilltop Consolidated: | ||||||||||||||||||||
| Return on average stockholders' equity | 6.50 | % | 5.51 | % | 5.46 | % | 5.29 | % | 5.31 | % | ||||||||||
| Return on average assets | 0.92 | % | 0.84 | % | 0.75 | % | 0.78 | % | 0.71 | % | ||||||||||
| Net interest margin (1) | 2.72 | % | 2.84 | % | 2.96 | % | 2.81 | % | 3.07 | % | ||||||||||
| Net interest margin (taxable equivalent) (2): | ||||||||||||||||||||
| As reported | 2.74 | % | 2.85 | % | 2.98 | % | 2.83 | % | 3.09 | % | ||||||||||
| Impact of purchase accounting | 3 bps | 2 bps | 4 bps | 4 bps | 6 bps | |||||||||||||||
| Book value per common share ($) | 33.71 | 33.51 | 32.58 | 33.71 | 32.58 | |||||||||||||||
| Shares outstanding, end of period (000's) | 64,968 | 64,960 | 65,153 | 64,968 | 65,153 | |||||||||||||||
| Dividend payout ratio (3) | 31.08 | % | 37.17 | % | 36.35 | % | 39.06 | % | 37.97 | % | ||||||||||
| Banking Segment: | ||||||||||||||||||||
| Net interest margin (1) | 2.98 | % | 3.05 | % | 2.94 | % | 3.04 | % | 3.13 | % | ||||||||||
| Net interest margin (taxable equivalent) (2): | ||||||||||||||||||||
| As reported | 2.99 | % | 3.06 | % | 2.95 | % | 3.04 | % | 3.14 | % | ||||||||||
| Impact of purchase accounting | 4 bps | 3 bps | 5 bps | 4 bps | 7 bps | |||||||||||||||
| Accretion of discount on loans ($000's) | 1,076 | 737 | 1,202 | 5,057 | 8,632 | |||||||||||||||
| Net recoveries (charge-offs) ($000's) | (3,950 | ) | (2,894 | ) | (674 | ) | (11,238 | ) | (2,421 | ) | ||||||||||
| Return on average assets | 1.24 | % | 1.14 | % | 1.12 | % | 1.10 | % | 1.15 | % | ||||||||||
| Fee income ratio | 10.7 | % | 10.3 | % | 11.2 | % | 10.4 | % | 10.3 | % | ||||||||||
| Efficiency ratio | 57.8 | % | 55.2 | % | 53.2 | % | 56.0 | % | 51.0 | % | ||||||||||
| Employees' compensation and benefits ($000's) | 33,313 | 31,920 | 29,420 | 130,974 | 123,345 | |||||||||||||||
| Broker-Dealer Segment: | ||||||||||||||||||||
| Net revenue ($000's) (4) | 126,367 | 124,258 | 119,989 | 471,743 | 456,432 | |||||||||||||||
| Employees' compensation and benefits ($000's) | 75,150 | 75,912 | 68,746 | 286,700 | 266,395 | |||||||||||||||
| Variable compensation expense ($000's) | 42,484 | 42,569 | 39,435 | 153,062 | 144,984 | |||||||||||||||
| Compensation as a % of net revenue | 59.5 | % | 61.1 | % | 57.3 | % | 60.8 | % | 58.4 | % | ||||||||||
| Pre-tax margin (5) | 16.1 | % | 13.7 | % | 16.8 | % | 13.5 | % | 16.1 | % | ||||||||||
| Mortgage Origination Segment: | ||||||||||||||||||||
| Mortgage loan originations - volume ($000's): | ||||||||||||||||||||
| Home purchases | 1,909,706 | 2,096,009 | 1,698,009 | 7,759,812 | 7,701,758 | |||||||||||||||
| Refinancings | 343,400 | 211,454 | 117,018 | 856,541 | 541,373 | |||||||||||||||
| Total mortgage loan originations - volume | 2,253,106 | 2,307,463 | 1,815,027 | 8,616,353 | 8,243,131 | |||||||||||||||
| Mortgage loan sales - volume ($000's) | 2,065,356 | 2,569,678 | 1,874,001 | 8,223,734 | 8,046,585 | |||||||||||||||
| Net gains from mortgage loan sales (basis points): | ||||||||||||||||||||
| Loans sold to third parties | 226 | 224 | 189 | 226 | 198 | |||||||||||||||
| Impact of loans retained by banking segment | (5 | ) | 0 | 0 | (4 | ) | (4 | ) | ||||||||||||
| As reported | 221 | 224 | 189 | 222 | 194 | |||||||||||||||
| Mortgage servicing rights asset ($000's) (6) | 5,723 | 45,742 | 96,662 | 5,723 | 96,662 | |||||||||||||||
| Employees' compensation and benefits ($000's) | 56,402 | 60,573 | 53,766 | 231,293 | 251,119 | |||||||||||||||
| Variable compensation expense ($000's) | 30,784 | 33,862 | 24,085 | 121,720 | 118,977 | |||||||||||||||
| ________________ | |
| (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 $0.7 million, $0.6 million, $0.6 million, $2.5 million and $2.7 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.2 million, $0.6 million and $0.7 million, respectively, for the periods presented. |
| (3) | Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share. |
| (4) | Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income. |
| (5) | Pre-tax margin is defined as income before income taxes divided by net revenue. |
| (6) | Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation. |
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| Capital Ratios | 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||||||||
| Tier 1 capital (to average assets): | ||||||||||||||||||||
| PlainsCapital | 9.99 | % | 10.34 | % | 11.36 | % | 11.00 | % | 10.55 | % | ||||||||||
| Hilltop | 12.57 | % | 12.95 | % | 12.87 | % | 12.49 | % | 12.23 | % | ||||||||||
| Common equity Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||
| PlainsCapital | 15.35 | % | 14.94 | % | 15.58 | % | 15.87 | % | 15.44 | % | ||||||||||
| Hilltop | 21.23 | % | 20.48 | % | 19.45 | % | 19.73 | % | 19.32 | % | ||||||||||
| Tier 1 capital (to risk-weighted assets): | ||||||||||||||||||||
| PlainsCapital | 15.35 | % | 14.94 | % | 15.58 | % | 15.87 | % | 15.44 | % | ||||||||||
| Hilltop | 21.23 | % | 20.48 | % | 19.45 | % | 19.73 | % | 19.32 | % | ||||||||||
| Total capital (to risk-weighted assets): | ||||||||||||||||||||
| PlainsCapital | 16.54 | % | 16.13 | % | 16.77 | % | 17.06 | % | 16.58 | % | ||||||||||
| Hilltop | 24.40 | % | 23.68 | % | 22.57 | % | 22.79 | % | 22.34 | % | ||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| Non-Performing Assets Portfolio Data | 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||||||||
| Loans accounted for on a non-accrual basis ($000's): | ||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Non-owner occupied | $ | 7,166 | $ | 8,042 | $ | 6,894 | $ | 34,661 | $ | 36,440 | ||||||||||
| Owner occupied | 6,092 | 2,410 | 6,437 | 4,846 | 5,098 | |||||||||||||||
| Commercial and industrial | 59,025 | 66,929 | 80,755 | 12,165 | 9,502 | |||||||||||||||
| Construction and land development | 3,003 | 2,682 | 485 | 698 | 3,480 | |||||||||||||||
| 1-4 family residential | 12,863 | 11,123 | 11,092 | 12,363 | 13,801 | |||||||||||||||
| Consumer | — | — | 1 | 3 | 6 | |||||||||||||||
| Broker-dealer | — | — | — | — | — | |||||||||||||||
| Non-accrual loans ($000's) | $ | 88,149 | $ | 91,186 | $ | 105,664 | $ | 64,736 | $ | 68,327 | ||||||||||
| Non-accrual loans as a % of total loans | 1.00 | % | 1.02 | % | 1.12 | % | 0.73 | % | 0.76 | % | ||||||||||
| Other real estate owned ($000's) | 2,848 | 2,744 | 2,973 | 5,254 | 5,095 | |||||||||||||||
| Other repossessed assets ($000's) | 98 | 413 | 464 | 472 | — | |||||||||||||||
| Non-performing assets ($000's) | 91,095 | 94,343 | 109,101 | 70,462 | 73,422 | |||||||||||||||
| Non-performing assets as a % of total assets | 0.56 | % | 0.59 | % | 0.70 | % | 0.43 | % | 0.45 | % | ||||||||||
| Loans past due 90 days or more and still accruing ($000's) (1) | 22,090 | 140,763 | 122,451 | 112,799 | 115,090 | |||||||||||||||
| ________________ | |
| (1) | Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending. |
| Three Months Ended December 31, | |||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||
| Average | Interest | Annualized | Average | Interest | Annualized | ||||||||||||||||
| Outstanding | Earned | Yield or | Outstanding | Earned | Yield or | ||||||||||||||||
| Net Interest Margin (Taxable Equivalent) Details (1) | Balance | or Paid | Rate | Balance | or Paid | Rate | |||||||||||||||
| Assets | |||||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||
| Loans held for sale | $ | 1,011,036 | $ | 13,278 | 5.25 | % | $ | 841,715 | $ | 13,239 | 6.29 | % | |||||||||
| Loans held for investment, gross (2) | 7,931,572 | 118,448 | 5.93 | % | 7,902,814 | 124,857 | 6.27 | % | |||||||||||||
| Investment securities - taxable | 2,443,886 | 29,213 | 4.78 | % | 2,629,808 | 28,763 | 4.37 | % | |||||||||||||
| Investment securities - non-taxable (3) | 360,622 | 3,666 | 4.07 | % | 313,714 | 3,157 | 12.08 | % | |||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 96,066 | 1,797 | 7.42 | % | 153,785 | 2,082 | 5.37 | % | |||||||||||||
| Interest-bearing deposits in other financial institutions | 2,033,482 | 23,052 | 4.50 | % | 1,646,885 | 21,948 | 5.29 | % | |||||||||||||
| Securities borrowed | 1,361,481 | 17,492 | 5.03 | % | 1,371,092 | 18,659 | 5.33 | % | |||||||||||||
| Other | 130,624 | 2,367 | 7.19 | % | 48,120 | 4,675 | 38.54 | % | |||||||||||||
| Interest-earning assets, gross (3) | 15,368,769 | 209,313 | 5.40 | % | 14,907,933 | 217,380 | 5.79 | % | |||||||||||||
| Allowance for credit losses | (110,191 | ) | (110,832 | ) | |||||||||||||||||
| Interest-earning assets, net | 15,258,578 | 14,797,101 | |||||||||||||||||||
| Noninterest-earning assets | 1,065,783 | 1,473,839 | |||||||||||||||||||
| Total assets | $ | 16,324,361 | $ | 16,270,940 | |||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||
| Interest-bearing deposits | $ | 8,176,034 | $ | 67,411 | 3.27 | % | $ | 7,966,770 | $ | 68,339 | 3.40 | % | |||||||||
| Securities loaned | 1,353,195 | 16,407 | 4.81 | % | 1,324,887 | 17,247 | 5.16 | % | |||||||||||||
| Notes payable and other borrowings | 1,399,178 | 19,288 | 5.47 | % | 1,439,297 | 19,955 | 5.50 | % | |||||||||||||
| Total interest-bearing liabilities | 10,928,407 | 103,106 | 3.74 | % | 10,730,954 | 105,541 | 3.90 | % | |||||||||||||
| Noninterest-bearing liabilities | |||||||||||||||||||||
| Noninterest-bearing deposits | 2,795,588 | 3,096,244 | |||||||||||||||||||
| Other liabilities | 399,964 | 335,307 | |||||||||||||||||||
| Total liabilities | 14,123,959 | 14,162,505 | |||||||||||||||||||
| Stockholders’ equity | 2,172,640 | 2,081,833 | |||||||||||||||||||
| Noncontrolling interest | 27,762 | 26,602 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 16,324,361 | $ | 16,270,940 | |||||||||||||||||
| Net interest income (3) | $ | 106,207 | $ | 111,839 | |||||||||||||||||
| Net interest spread (3) | 1.66 | % | 1.89 | % | |||||||||||||||||
| Net interest margin (3) | 2.74 | % | 2.98 | % | |||||||||||||||||
| Year Ended December 31, | |||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||
| Average | Interest | Annualized | Average | Interest | Annualized | ||||||||||||||||
| Outstanding | Earned | Yield or | Outstanding | Earned | Yield or | ||||||||||||||||
| Net Interest Margin (Taxable Equivalent) Details (1) | Balance | or Paid | Rate | Balance | or Paid | Rate | |||||||||||||||
| Assets | |||||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||
| Loans held for sale | $ | 934,983 | $ | 53,073 | 5.60 | % | $ | 944,470 | $ | 53,736 | 5.69 | % | |||||||||
| Loans held for investment, gross (2) | 7,921,528 | 491,432 | 6.20 | % | 7,950,878 | 488,538 | 6.23 | % | |||||||||||||
| Investment securities - taxable | 2,537,856 | 107,007 | 4.16 | % | 2,726,763 | 108,250 | 3.97 | % | |||||||||||||
| Investment securities - non-taxable (3) | 324,684 | 12,638 | 3.84 | % | 363,493 | 13,463 | 3.70 | % | |||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 98,337 | 7,232 | 7.35 | % | 145,696 | 8,954 | 6.15 | % | |||||||||||||
| Interest-bearing deposits in other financial institutions | 1,526,748 | 75,633 | 4.95 | % | 1,597,865 | 79,657 | 4.99 | % | |||||||||||||
| Securities borrowed | 1,355,554 | 77,785 | 5.66 | % | 1,409,765 | 71,924 | 5.03 | % | |||||||||||||
| Other | 159,141 | 14,041 | 8.82 | % | 65,912 | 16,554 | 25.11 | % | |||||||||||||
| Interest-earning assets, gross (3) | 14,858,831 | 838,841 | 5.65 | % | 15,204,842 | 841,076 | 5.53 | % | |||||||||||||
| Allowance for credit losses | (110,123 | ) | (103,975 | ) | |||||||||||||||||
| Interest-earning assets, net | 14,748,708 | 15,100,867 | |||||||||||||||||||
| Noninterest-earning assets | 1,130,198 | 1,404,393 | |||||||||||||||||||
| Total assets | $ | 15,878,906 | $ | 16,505,260 | |||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||
| Interest-bearing deposits | $ | 7,822,536 | $ | 275,291 | 3.52 | % | $ | 7,711,570 | $ | 223,179 | 2.89 | % | |||||||||
| Securities loaned | 1,335,155 | 72,614 | 5.44 | % | 1,331,443 | 65,175 | 4.90 | % | |||||||||||||
| Notes payable and other borrowings | 1,397,313 | 70,686 | 5.06 | % | 1,579,170 | 83,174 | 5.27 | % | |||||||||||||
| Total interest-bearing liabilities | 10,555,004 | 418,591 | 3.97 | % | 10,622,183 | 371,528 | 3.50 | % | |||||||||||||
| Noninterest-bearing liabilities | |||||||||||||||||||||
| Noninterest-bearing deposits | 2,824,450 | 3,441,437 | |||||||||||||||||||
| Other liabilities | 332,340 | 351,938 | |||||||||||||||||||
| Total liabilities | 13,711,794 | 14,415,558 | |||||||||||||||||||
| Stockholders’ equity | 2,139,732 | 2,063,174 | |||||||||||||||||||
| Noncontrolling interest | 27,380 | 26,528 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 15,878,906 | $ | 16,505,260 | |||||||||||||||||
| Net interest income (3) | $ | 420,250 | $ | 469,548 | |||||||||||||||||
| Net interest spread (3) | 1.68 | % | 2.03 | % | |||||||||||||||||
| Net interest margin (3) | 2.83 | % | 3.09 | % | |||||||||||||||||
| ________________ | |
| (1) | Information presented on a consolidated basis (dollars in thousands). |
| (2) | Average balance includes non-accrual loans. |
| (3) | Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rate for the periods presented. The adjustment to interest income was $0.7 million and $0.6 million for the three months ended December 31, 2024 and 2023, respectively, and $2.5 million and $2.7 million for the year ended December 31, 2024 and 2023, respectively. |
Conference Call Information
Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, January 31, 2025. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review fourth quarter and full year 2024 financial results. Interested parties can access the conference call by dialing 800-549-8228 (Toll Free North America) or (+1) 289-819-1520 (International Toll) and then using the conference ID 03956. 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 December 31, 2024, Hilltop employed approximately 3,650 people and operated 280 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) the effects of indebtedness on our ability to manage our business successfully, including the restrictions imposed by the indenture governing our indebtedness; (vii) 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; (viii) cost and availability of capital; (ix) changes in state and federal laws, regulations or policies affecting one or more of our business segments, including changes in policies under the new Presidential administration, changes in regulatory fees, deposit insurance premiums, capital requirements and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"); (x) changes in key management; (xi) competition in our banking, broker-dealer, and mortgage origination segments from other banks and financial institutions as well as investment banking and financial advisory firms, mortgage bankers, asset-based non-bank lenders and government agencies; (xii) legal and regulatory proceedings; (xiii) risks associated with merger and acquisition integration; and (xiv) our ability to use excess capital in an effective manner. 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/20250130136611/en/
Contacts
Investor Relations Contact:
Matt Dunn
214-525-4636
mdunn@hilltop.com