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

DALLAS--(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.

Contacts

Investor Relations Contact:
Erik Yohe
214-525-4634
[e-mail]