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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 26, 2023

Hilltop Holdings Inc.

(Exact name of registrant as specified in its charter)


Maryland	1-31987	84-1477939
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


6565 Hillcrest Avenue
Dallas, Texas		75205
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (214) 855-2177

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HTH	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b–2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

On January 26, 2023, Hilltop Holdings Inc., or the Company, issued a press release announcing its results of operations and financial condition as of and for the three months and year ended December 31, 2022. The text of the release is set forth in Exhibit 99.1 attached to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth in such filing.

Section 8 – Other Events

Item 8.01 Other Events.

On January 26, 2023, the Board of Directors of the Company declared a quarterly cash dividend of $0.16 per common share, payable on February 24, 2023, to stockholders of record as of the close of business on February 10, 2023.

Additionally, on January 26, 2023, the Board of Directors of the Company authorized, subject to regulatory approvals or non-objections, a new stock repurchase program through January 2024. Under the program, the Company is authorized to repurchase, in the aggregate, up to $75.0 million of its outstanding common stock in open market purchases or through privately negotiated transactions as permitted under Rule 10b-18 promulgated under the Securities Exchange Act of 1934. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations, as determined by the Company’s management team. Any repurchases are expected to be funded from available cash balances.

Forward-Looking Statements

This Current Report on Form 8-K 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 the Company’s 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, the Company does not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning the Company’s 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. For a list of factors that could cause actual results to differ materially from those set forth in the forward-looking statements, see the risk factors described in the Company’s 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.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a)

Financial statements of businesses acquired.

Not applicable.

(b)

Pro forma financial information.

Not applicable.

(c)

Shell company transactions.

Not applicable.

(d)

Exhibits.

The following exhibit(s) are filed or furnished, depending on the relevant item requiring such exhibit, in accordance with the provisions of Item 601 of Regulation S-K and Instruction B.2 to this form.


Exhibit Number		Description of Exhibit
99.1		Press Release issued January 26, 2023 (furnished pursuant to Item 2.02).

104		Cover Page Interactive File (formatted as Inline XBRL).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		Hilltop Holdings Inc.,
		a Maryland corporation


Date:	January 26, 2023	By:	/s/ COREY PRESTIDGE
		Name:	Corey G. Prestidge
		Title:	Executive Vice President,
			General Counsel & Secretary

EX-99.1 2 hth-20230126xex99d1.htm EX-99.1

Exhibit 99.1

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

Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2022

DALLAS — (BUSINESS WIRE) January 26, 2023 — Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the fourth quarter and full year 2022. Hilltop produced income to common stockholders of $25.6 million, or $0.39 per diluted share, for the fourth quarter of 2022, compared to $62.2 million, or $0.78 per diluted share, for the fourth quarter of 2021. Income to common stockholders for the full year 2022 was $113.1 million, or $1.60 per diluted share, compared to $374.5 million, or $4.61 per diluted share, for the full year 2021. Hilltop’s financial results for the fourth quarter and full year of 2022 included significant decreases in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income, while the banking segment recorded a provision for credit losses as opposed to a reversal of credit losses in respective prior year periods.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.16 per common share, a 7% increase from the prior quarter, payable on February 24, 2023, to all common stockholders of record as of the close of business on February 10, 2023. Additionally, the Hilltop Board of Directors authorized, subject to regulatory approvals or non-objections, a new stock repurchase program through January 2024, under which Hilltop may repurchase, in the aggregate, up to $75.0 million of its outstanding common stock. During 2022, Hilltop paid $442.3 million to repurchase approximately 14.87 million shares of its common stock at a price of $29.75 per share pursuant to the tender offer completed in May 2022. These shares were returned to the pool of authorized but unissued shares of common stock.

Headwinds during 2022, including the impact of tight housing inventories on mortgage volumes, declining deposit balances, rapid increases in market interest rates and a declining economic forecast, are expected to continue to have an adverse impact on our operating results during 2023. The impacts of such headwinds in 2023 remain uncertain and will depend on developments outside of our control, including, among others, 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, the Russian-Ukraine conflict and its impact on supply chains, and the impact of the pandemic.

Jeremy B. Ford, President and CEO of Hilltop, said “Although we experienced a challenging operating environment in 2022, Hilltop still generated consolidated profitability and finished the year a more resilient company. The abrupt market shifts in the mortgage and fixed income businesses had a negative impact across our company, particularly at PrimeLending and HilltopSecurities, while PlainsCapital Bank delivered across all of its key priorities, including prudent loan growth, sound credit quality and efficiency. I am proud of our teams’ accomplishments during the year, as they continued to deliver high-quality products and services for our clients, while also making tough, yet prudent, expense decisions to right-size our franchise.

“Additionally, our focus on maintaining a strong balance sheet with significant capital and liquidity has positioned Hilltop for long-term success regardless of interest rate and economic volatility. Finally, I am very pleased that Hilltop returned a record amount of capital to stockholders during 2022, primarily through our successful tender offer share repurchase completed in May.”

Fourth Quarter 2022 Highlights for Hilltop:

●

The provision for credit losses was $3.6 million during the fourth quarter of 2022, compared to a reversal of credit losses of $0.8 million in the third quarter of 2022 and a reversal of credit losses of $18.6 million in the fourth quarter of 2021;

o

The provision for credit losses during the fourth quarter of 2022 reflected a deteriorating U.S. economic outlook since the prior quarter.

●

For the fourth quarter of 2022, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $71.1 million, compared to $192.0 million in the fourth quarter of 2021, a 63.0% decrease;

o

Mortgage loan origination production volume was $2.0 billion during the fourth quarter of 2022, compared to $5.0 billion in the fourth quarter of 2021;

o

Net gains from mortgage loans sold to third parties decreased to 211 basis points during the fourth quarter of 2022, compared to 227 basis points in the third quarter of 2022.

●

Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the fourth quarter of 2022 were 0.63% and 4.99%, respectively, compared to 1.41% and 9.93%, respectively, for the fourth quarter of 2021;

●

Hilltop’s book value per common share increased to $31.62 at December 31, 2022, compared to $31.46 at September 30, 2022;

●

Hilltop’s total assets were $16.3 billion and $16.6 billion at December 31, 2022 and September 30, 2022, respectively;

●

Loans1, net of allowance for credit losses, were $7.6 billion and $7.4 billion at December 31, 2022 and September 30, 2022;

●

Non-performing loans were $30.3 million, or 0.33% of total loans, at December 31, 2022, compared to $34.6 million, or 0.39% of total loans, at September 30, 2022;

●

Loans held for sale decreased by 2.1% from September 30, 2022 to $1.0 billion at December 31, 2022;

●

Total deposits were $11.3 billion and $11.4 billion at December 31, 2022 and September 30, 2022, respectively;

●

Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 11.47% and a Common Equity Tier 1 Capital Ratio of 18.22% at December 31, 2022;

●

Hilltop’s consolidated net interest margin4 increased to 3.23% for the fourth quarter of 2022, compared to 3.19% in the third quarter of 2022;

●

For the fourth quarter of 2022, noninterest income was $169.8 million, compared to $284.8 million in the fourth quarter of 2021, a 40.4% decrease;

●

For the fourth quarter 2022, noninterest expense was $253.4 million, compared to $322.2 million in the fourth quarter of 2021, a 21.4% decrease; and

●

Hilltop’s effective tax rate was 26.6% during the fourth quarter of 2022, compared to 24.2% during the same period in 2021.

o

The effective tax rate for the fourth quarter of 2022 was higher than the applicable statutory rate primarily due to the impact of 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 $431.0 million and $402.0 million at December 31, 2022 and September 30, 2022, 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.

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)	2022		2022		2022		2022		2021
Cash and due from banks	$	1,579,512	$	1,777,584	$	1,783,554	$	2,886,812	$	2,823,138
Federal funds sold		650		663		381		383		385
Assets segregated for regulatory purposes		67,737		109,358		120,816		128,408		221,740
Securities purchased under agreements to resell		118,070		145,365		139,929		256,991		118,262
Securities:
Trading, at fair value		755,032		641,864		593,273		471,763		647,998
Available for sale, at fair value, net		1,658,766		1,584,724		1,562,222		1,462,340		2,130,568
Held to maturity, at amortized cost, net		875,532		889,452		920,583		953,107		267,684
Equity, at fair value		200		209		197		225		250
		3,289,530		3,116,249		3,076,275		2,887,435		3,046,500
Loans held for sale		982,616		1,003,605		1,491,579		1,643,994		1,878,190
Loans held for investment, net of unearned income		8,092,673		7,944,246		7,930,619		7,797,903		7,879,904
Allowance for credit losses		(95,442)		(91,783)		(95,298)		(91,185)		(91,352)
Loans held for investment, net		7,997,231		7,852,463		7,835,321		7,706,718		7,788,552

Broker-dealer and clearing organization receivables		1,038,055		1,255,052		1,049,830		1,610,352		1,672,946
Premises and equipment, net		184,950		191,423		195,361		198,906		204,438
Operating lease right-of-use assets		102,443		103,099		106,806		108,180		112,328
Mortgage servicing assets		100,825		156,539		121,688		100,475		86,990
Other assets		527,469		624,235		513,570		546,622		452,880
Goodwill		267,447		267,447		267,447		267,447		267,447
Other intangible assets, net		11,317		12,209		13,182		14,233		15,284
Total assets	$	16,267,852	$	16,615,291	$	16,715,739	$	18,356,956	$	18,689,080

Deposits:
Noninterest-bearing	$	3,968,862	$	4,546,816	$	4,601,643	$	4,694,592	$	4,577,183
Interest-bearing		7,346,887		6,805,198		7,319,143		7,972,110		8,240,894
Total deposits		11,315,749		11,352,014		11,920,786		12,666,702		12,818,077
Broker-dealer and clearing organization payables		966,470		1,176,156		934,818		1,397,836		1,477,300
Short-term borrowings		970,056		942,309		822,649		835,054		859,444
Securities sold, not yet purchased, at fair value		53,023		99,515		135,968		97,629		96,586
Notes payable		346,654		390,354		389,722		395,479		387,904
Operating lease liabilities		126,759		120,635		124,406		125,919		130,960
Other liabilities		417,042		475,425		329,987		347,742		369,606
Total liabilities		14,195,753		14,556,408		14,658,336		15,866,361		16,139,877

Common stock		647		646		646		794		790
Additional paid-in capital		1,046,331		1,043,605		1,039,261		1,275,649		1,274,446
Accumulated other comprehensive loss		(124,961)		(119,864)		(95,279)		(80,565)		(10,219)
Retained earnings		1,123,636		1,107,586		1,085,208		1,267,415		1,257,014
Deferred compensation employee stock trust, net		481		479		695		744		752
Employee stock trust		(640)		(641)		(954)		(104)		(115)
Total Hilltop stockholders' equity		2,045,494		2,031,811		2,029,577		2,463,933		2,522,668
Noncontrolling interests		26,605		27,072		27,826		26,662		26,535
Total stockholders' equity		2,072,099		2,058,883		2,057,403		2,490,595		2,549,203
Total liabilities & stockholders' equity	$	16,267,852	$	16,615,291	$	16,715,739	$	18,356,956	$	18,689,080


	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)	2022		2022		2021		2022		2021
Interest income:
Loans, including fees	$	117,906	$	109,165	$	96,104	$	416,207	$	404,312
Securities borrowed		14,162		10,938		8,524		44,414		61,667
Securities:
Taxable		23,293		19,642		13,916		75,805		47,633
Tax-exempt		3,002		2,451		2,639		10,013		9,766
Other		21,611		14,276		1,872		44,677		6,595
Total interest income		179,974		156,472		123,055		591,116		529,973

Interest expense:
Deposits		28,238		12,525		4,404		50,412		23,624
Securities loaned		13,179		9,407		6,624		38,570		50,974
Short-term borrowings		10,278		5,550		2,279		20,893		9,065
Notes payable		3,988		3,907		5,871		16,141		21,386
Junior subordinated debentures		—		—		—		—		1,558
Other		849		1,597		(417)		6,125		384
Total interest expense		56,532		32,986		18,761		132,141		106,991

Net interest income		123,442		123,486		104,294		458,975		422,982
Provision for (reversal of) credit losses		3,638		(780)		(18,565)		8,309		(58,213)
Net interest income after provision for (reversal of) credit losses		119,804		124,266		122,859		450,666		481,195

Noninterest income:
Net gains from sale of loans and other mortgage production income		35,949		57,998		156,103		302,384		825,960
Mortgage loan origination fees		35,198		39,960		35,930		149,598		160,011
Securities commissions and fees		33,143		34,076		32,801		139,122		143,827
Investment and securities advisory fees and commissions		30,661		35,031		42,834		127,399		152,443
Other		34,833		39,910		17,178		113,957		128,034
Total noninterest income		169,784		206,975		284,846		832,460		1,410,275

Noninterest expense:
Employees' compensation and benefits		167,892		200,450		229,717		773,688		1,007,235
Occupancy and equipment, net		23,077		25,041		25,741		97,115		100,602
Professional services		11,555		10,631		9,904		48,495		54,270
Other		50,844		52,616		56,832		207,701		225,291
Total noninterest expense		253,368		288,738		322,194		1,126,999		1,387,398

Income before income taxes		36,220		42,503		85,511		156,127		504,072
Income tax expense		9,642		9,249		20,715		36,833		117,976
Net income		26,578		33,254		64,796		119,294		386,096
Less: Net income attributable to noncontrolling interest		1,022		1,186		2,611		6,160		11,601
Income attributable to Hilltop	$	25,556	$	32,068	$	62,185	$	113,134	$	374,495

Earnings per common share:
Basic:	$	0.40	$	0.50	$	0.79	$	1.61	$	4.64
Diluted:	$	0.39	$	0.50	$	0.78	$	1.60	$	4.61

Cash dividends declared per common share	$	0.15	$	0.15	$	0.12	$	0.60	$	0.48

Weighted average shares outstanding:
Basic		64,602		64,552		78,933		70,434		80,708
Diluted		64,779		64,669		79,427		70,626		81,173


	Three Months Ended December 31, 2022
Segment Results					Mortgage				All Other and		Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	109,335	$	14,116	$	(4,464)	$	(3,279)	$	7,734	$	123,442
Provision for (reversal of) credit losses		3,925		(287)		—		—		—		3,638
Noninterest income		11,869		92,803		71,439		1,870		(8,197)		169,784
Noninterest expense		59,269		87,406		92,532		14,642		(481)		253,368
Income (loss) before taxes	$	58,010	$	19,800	$	(25,557)	$	(16,051)	$	18	$	36,220


	Year Ended December 31, 2022
Segment Results					Mortgage				All Other and		Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	413,603	$	51,597	$	(10,529)	$	(13,135)	$	17,439	$	458,975
Provision for (reversal of) credit losses		8,250		59		—		—		—		8,309
Noninterest income		49,307		341,943		452,915		7,525		(19,230)		832,460
Noninterest expense		235,190		355,713		478,904		59,030		(1,838)		1,126,999
Income (loss) before taxes	$	219,470	$	37,768	$	(36,518)	$	(64,640)	$	47	$	156,127


	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
Selected Financial Data	2022		2022		2021		2022		2021

Hilltop Consolidated:
Return on average stockholders' equity		4.99%		6.26%		9.93%		5.11%		15.38%
Return on average assets		0.63%		0.79%		1.41%		0.69%		2.17%
Net interest margin (1)		3.23%		3.19%		2.44%		2.87%		2.57%
Net interest margin (taxable equivalent) (2):
As reported		3.24%		3.20%		2.45%		2.88%		2.58%
Impact of purchase accounting		7 bps		8 bps		12 bps		7 bps		12 bps
Book value per common share ($)		31.62		31.46		31.95		31.62		31.95
Shares outstanding, end of period (000's)		64,685		64,591		78,965		64,685		78,965
Dividend payout ratio (3)		37.92%		30.19%		15.19%		37.36%		10.34%

Banking Segment:
Net interest margin (1)		3.42%		3.42%		2.81%		3.11%		3.07%
Net interest margin (taxable equivalent) (2):
As reported		3.43%		3.43%		2.82%		3.11%		3.08%
Impact of purchase accounting		8 bps		10 bps		15 bps		9 bps		16 bps
Accretion of discount on loans ($000's)		2,173		2,858		4,716		10,552		18,789
Net recoveries (charge-offs) ($000's)		21		(2,735)		405		(4,219)		521
Return on average assets		1.31%		1.41%		1.44%		1.19%		1.55%
Fee income ratio		9.8%		9.9%		10.8%		10.7%		10.0%
Efficiency ratio		48.9%		48.9%		54.2%		50.8%		50.3%
Employees' compensation and benefits ($000's)		34,526		35,934		34,415		137,531		130,276

Broker-Dealer Segment:
Net revenue ($000's) (4)		106,919		114,184		94,569		393,540		424,421
Employees' compensation and benefits ($000's)		60,552		70,274		65,301		251,145		276,176
Variable compensation expense ($000's)		32,042		42,567		35,939		138,705		161,264
Compensation as a % of net revenue		56.6%		61.5%		69.1%		63.8%		65.1%
Pre-tax margin (5)		18.5%		15.3%		1.8%		9.6%		10.3%

Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		1,895,731		2,832,136		3,559,137		10,823,002		14,429,190
Refinancings		147,511		211,075		1,430,369		1,837,154		8,239,093
Total mortgage loan originations - volume		2,043,242		3,043,211		4,989,506		12,660,156		22,668,283
Mortgage loan sales - volume ($000's)		2,038,990		3,419,950		4,988,538		13,200,471		23,059,160
Net gains from mortgage loan sales (basis points):
Loans sold to third parties		211		227		362		263		375
Impact of loans retained by banking segment		(19)		(9)		(15)		(11)		(13)
As reported		192		218		347		252		362
Mortgage servicing rights asset ($000's) (6)		100,825		156,539		86,990		100,825		86,990
Employees' compensation and benefits ($000's)		64,940		86,079		121,758		353,973		568,221
Variable compensation expense ($000's)		26,724		44,312		73,208		183,804		373,929

(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 $0.3 million, $0.4 million, $0.5 million, $1.6 million and $1.7 million, respectively, for the periods presented and for the banking segment were $0.2 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	2022		2022		2022		2022		2021
Tier 1 capital (to average assets):
PlainsCapital		10.26%		10.29%		9.67%		9.74%		10.20%
Hilltop		11.47%		11.41%		10.53%		12.46%		12.58%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.97%		14.68%		14.65%		15.37%		16.00%
Hilltop		18.22%		17.45%		17.24%		21.27%		21.22%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.97%		14.68%		14.65%		15.37%		16.00%
Hilltop		18.22%		17.45%		17.24%		21.27%		21.22%
Total capital (to risk-weighted assets):
PlainsCapital		15.90%		15.54%		15.55%		16.18%		16.77%
Hilltop		20.97%		20.07%		19.90%		23.85%		23.75%


	December 31,		September 30,		June 30,		March 31,		December 31,
Non-Performing Assets Portfolio Data	2022		2022		2022		2022		2021
Loans accounted for on a non-accrual basis ($000's) (1):
Commercial real estate		4,269		4,735		4,947		6,153		6,601
Commercial and industrial		9,095		12,078		13,315		18,486		22,478
Construction and land development		1		1		1		1		2
1-4 family residential		16,138		16,968		16,542		18,723		21,123
Consumer		14		16		19		21		23
Broker-dealer		—		—		—		—		—
		29,517		33,798		34,824		43,384		50,227
Troubled debt restructurings included in accruing loans held for investment ($000's)		803		825		857		890		922
Non-performing loans ($000's)		30,320		34,623		35,681		44,274		51,149

Non-performing loans as a % of total loans		0.33%		0.39%		0.38%		0.47%		0.52%

Other real estate owned ($000's)		2,325		1,637		1,516		2,175		2,833

Other repossessed assets ($000's)		—		—		—		—		—

Non-performing assets ($000's)		32,645		36,260		37,197		46,449		53,982

Non-performing assets as a % of total assets		0.20%		0.22%		0.22%		0.25%		0.29%

Loans past due 90 days or more and still accruing ($000's) (2):		92,099		96,532		82,410		87,489		60,775

(1)

Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications through January 1, 2022. The banking segment’s COVID-19 payment deferment programs since the second quarter of 2020 allowed for a deferral of principal and/or interest payments with such deferred principal payments due and payable on the maturity date of the existing loan. For the periods presented, the banking segment’s actions through December 31, 2021 included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $4 million as of December 31, 2021.

(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,
	2022						2021
	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	$	882,322	$	11,634	5.27	%	$	1,852,140	$	13,708	2.96	%
Loans held for investment, gross (2)		7,774,350		106,271	5.42	%		7,695,090		82,396	4.25	%
Investment securities - taxable		2,843,881		23,293	3.28	%		2,677,894		13,916	2.08	%
Investment securities - non-taxable (3)		354,207		3,286	3.71	%		331,959		3,188	3.84	%
Federal funds sold and securities purchased under agreements to resell		161,632		2,173	5.33	%		194,351		164	0.33	%
Interest-bearing deposits in other financial institutions		1,749,902		15,751	3.57	%		2,683,656		943	0.14	%
Securities borrowed		1,350,873		14,162	4.10	%		1,474,421		8,524	2.26	%
Other		56,196		3,686	26.02	%		52,848		765	5.74	%
Interest-earning assets, gross (3)		15,173,363		180,256	4.71	%		16,962,359		123,604	2.89	%
Allowance for credit losses		(92,344)						(109,555)
Interest-earning assets, net		15,081,019						16,852,804
Noninterest-earning assets		1,637,295						1,402,216
Total assets	$	16,718,314					$	18,255,020

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	7,154,802	$	28,238	1.57	%	$	7,901,704	$	4,404	0.22	%
Securities loaned		1,274,038		13,179	4.10	%		1,422,303		6,624	1.85	%
Notes payable and other borrowings		1,355,809		15,114	4.42	%		1,233,924		7,733	2.49	%
Total interest-bearing liabilities		9,784,649		56,531	2.29	%		10,557,931		18,761	0.70	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		4,222,143						4,509,891
Other liabilities		652,900						677,433
Total liabilities		14,659,692						15,745,255
Stockholders’ equity		2,032,287						2,484,301
Noncontrolling interest		26,335						25,464
Total liabilities and stockholders' equity	$	16,718,314					$	18,255,020

Net interest income (3)			$	123,725					$	104,843
Net interest spread (3)					2.42	%					2.19	%
Net interest margin (3)					3.24	%					2.45	%


	Year Ended December 31,
	2022						2021
	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	$	1,221,235	$	52,315	4.28	%	$	2,293,543	$	64,767	2.82	%
Loans held for investment, gross (2)		7,840,848		363,892	4.71	%		7,645,292		339,548	4.44	%
Investment securities - taxable		2,819,282		75,805	2.69	%		2,493,848		47,582	1.91	%
Investment securities - non-taxable (3)		310,315		11,608	3.74	%		313,703		11,448	3.65	%
Federal funds sold and securities purchased under agreements to resell		162,575		4,098	2.52	%		152,273		372	0.24	%
Interest-bearing deposits in other financial institutions		2,306,960		31,705	1.37	%		2,078,666		2,942	0.14	%
Securities borrowed		1,298,276		44,414	3.37	%		1,445,464		61,667	4.21	%
Other		55,280		8,873	16.05	%		50,929		3,332	6.54	%
Interest-earning assets, gross (3)		16,014,771		592,710	3.70	%		16,473,718		531,658	3.23	%
Allowance for credit losses		(92,828)						(129,689)
Interest-earning assets, net		15,921,943						16,344,029
Noninterest-earning assets		1,488,994						1,451,928
Total assets	$	17,410,937					$	17,795,957

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	7,561,501	$	50,412	0.67	%	$	7,722,584	$	23,624	0.31	%
Securities loaned		1,184,498		38,570	3.26	%		1,374,142		50,974	3.71	%
Notes payable and other borrowings		1,293,133		43,158	3.34	%		1,216,381		32,393	2.66	%
Total interest-bearing liabilities		10,039,132		132,140	1.32	%		10,313,107		106,991	1.04	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		4,455,779						4,157,962
Other liabilities		675,629						863,976
Total liabilities		15,170,540						15,335,045
Stockholders’ equity		2,213,756						2,435,185
Noncontrolling interest		26,641						25,727
Total liabilities and stockholders' equity	$	17,410,937					$	17,795,957

Net interest income (3)			$	460,570					$	424,667
Net interest spread (3)					2.38	%					2.19	%
Net interest margin (3)					2.88	%					2.58	%

(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 $0.3 million and $0.5 million for the three months ended December 31, 2022 and 2021, respectively, and $1.6 million and $1.7 million for the year ended December 31, 2022 and 2021, 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 27, 2023. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review fourth quarter and full year 2022 financial results. Interested parties can access the conference call by dialing 1-844-200-6205 (United States), 1-833-950-0062 (Canada) or 1-929-526-1599 (all other locations) and then using the access code 429656. 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, 2022, Hilltop employed approximately 4,140 people and operated approximately 360 locations in 47 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; (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; and (v) risks associated with concentration in real estate related loans. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.

Source: Hilltop Holdings Inc.