Group 1: Market Developments - The number of foreign buyers purchasing homes in the U.S. has increased, indicating a potential growth opportunity in the real estate market [1] - Brokerage giant Compass is set to acquire Anywhere for $1.6 billion, positioning itself as the largest residential real estate firm globally, with a combined valuation of approximately $10 billion [1] Group 2: Lending Products and Strategies - With interest rates decreasing, there is an anticipated rise in demand for home equity loans, refinancing, and new purchase loans, highlighting the importance of effective recapture programs [2] - Spring EQ has lowered fixed-rate HELOC rates by 40 basis points, creating more opportunities for borrowers to secure predictable payments [8] Group 3: Compliance and Operational Efficiency - PlainsCapital Bank National Warehouse Lending emphasizes its commitment to providing mortgage lenders with a sustainable funding source without unnecessary fees, enhancing operational efficiency [3] - The mortgage industry is increasingly focusing on compliance as a foundational element, ensuring regulatory requirements are met with precision [3] Group 4: AI Integration in Financial Services - Financial institutions are under pressure to implement AI solutions effectively, with a focus on purpose-built AI that integrates deeply into existing systems to drive real business outcomes [4] - Blue Sage's AI Sales Agent is designed to enhance customer service by allowing loan officers to respond to borrower needs quickly and accurately [6] Group 5: Consumer Insights and Data Utilization - Consumer-permissioned data platforms like Truework are transforming the mortgage process for first-time buyers by providing clarity and confidence, leading to higher satisfaction and trust [12][15] - The 2025 Homebuyer Report indicates that over 60% of first-time buyers feel overwhelmed, highlighting the need for tools that build certainty and trust early in the buying process [14][16] Group 6: Housing Affordability Challenges - Natural disasters have increased in frequency and severity, contributing to rising costs and straining housing affordability, with over $1.4 trillion in damages reported from 190 billion-dollar disasters from 2015 to 2024 [11] - Market-based approaches are suggested as more effective than regulatory restrictions in addressing housing affordability challenges and promoting community resilience [10][11]

Non-QM, Post-Closing, QC, Warehouse Products; Pulte vs. Bessent; Conventional Conforming Updates; Nice Jump in Apps “Rob, I hate it when mom and dad fight. Will this Pulte/Bessent, FHFA/Treasury tussle impact mortgage rates?” Probably not; it hasn’t so far. Director Pulte is certainly in the news. Occupancy isn’t a partisan issue, right?! FHFA Director Pulte, who continues to point out potential fraud by Fed. Governor Lisa Cook (who a Federal judge ruled yesterday could stay in her post), has two close rel ...

Core Insights - Hilltop Holdings Inc. (HTH) shares reached a new 52-week high of $35.63, with a 15.6% increase over the past month, outperforming the industry and major indices [1][8] - The company has shown strong performance compared to peers like Commerce Bancshares, Inc. (CBSH) and Hancock Whitney, Corp. (HWC) [1][8] Financial Performance - Hilltop Holdings has focused on improving net interest income (NII), which significantly rose in 2023 and 2022 due to strategic buyouts, strong loan demand, and higher interest rates [4] - The net interest margin (NIM) expanded to 3.09% in 2023 from 2.88% in 2022, although both NII and NIM saw declines in 2024 but rebounded in the first half of 2025 [5] - Management expects NII to rise by 2-4% in 2025, driven by lower deposit costs [11] - The company has consistently increased dividends since 2016, with an annualized growth of 13.7% over the last five years [12] Capital Management - As of June 30, 2025, Hilltop Holdings had total debt of $969 million and cash and due from banks amounting to $982.5 million, indicating a solid balance sheet [11] - The company has a share repurchase plan extended to $135 million, with approximately $67 million remaining as of June 30, 2025 [15] Expense Management - Hilltop Holdings has effectively managed non-interest expenses, which reflected a negative CAGR of 5.1% over the five years ending in 2024 [16] - However, the trend reversed in the first half of 2025, with expectations of variable expenses rising by 1-4% in 2025 due to continued investments and inflationary pressures [18] Challenges - Weak asset quality remains a concern, with provisions for credit losses rising significantly in 2023 and 2022, despite a decline in 2024 [19] - The mortgage origination segment has faced challenges, with volumes decreasing by 44.2% in 2022 and 34.9% in 2023, although a slight increase of 4% was noted in the first half of 2025 [22][26] - The company anticipates mortgage origination volumes in 2025 to be between $8 billion and $9 billion [27] Analyst Sentiment - The Zacks Consensus Estimate for 2025 earnings has increased by 7.5% to $2.01, while the estimate for 2026 has decreased by 2.2% to $1.81 [28] - The projected figures imply a year-over-year rise of 15.5% in 2025, but a decline of 10.2% in 2026 [30] Valuation - Hilltop Holdings has a forward price to earnings (P/E) ratio of 18.71X, which is above the industry average of 11.13X, indicating that its shares are trading at a premium [31] - Comparatively, Commerce Bancshares and Hancock Whitney have forward P/E ratios of 14.08X and 10.85X, respectively [32] Conclusion - Prudent expense management and a solid balance sheet are expected to support Hilltop Holdings' financials, with higher rates likely driving NII and NIM growth [33] - However, weak asset quality and subdued mortgage origination volumes present significant challenges, alongside mixed analyst sentiments and stretched valuations [33]

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section provides the company's financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for H1 2025 show increased net income driven by credit loss reversal and higher net interest income, despite a decrease in total assets [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$15.36 billion** by June 30, 2025, primarily due to reduced cash, while stockholders' equity remained stable Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | **Total Assets** | **$15,362,273** | **$16,268,129** | | Cash and due from banks | $982,488 | $2,298,977 | | Securities | $2,860,741 | $2,659,661 | | Loans held for investment, net | $7,963,243 | $7,849,435 | | **Total Liabilities** | **$13,135,428** | **$14,049,817** | | Total deposits | $10,391,557 | $11,065,322 | | Notes payable | $148,475 | $347,667 | | **Total Stockholders' Equity** | **$2,226,845** | **$2,218,312** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Net income significantly increased in Q2 and H1 2025, driven by a credit loss reversal and higher net interest income Quarterly Performance Summary (in thousands, except per share data) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | | Net Interest Income | $110,674 | $103,650 | | Provision for (reversal of) credit losses | $(7,340) | $10,934 | | Total Noninterest Income | $192,634 | $193,305 | | Total Noninterest Expense | $261,176 | $256,464 | | **Income attributable to Hilltop** | **$36,073** | **$20,333** | | **Diluted EPS** | **$0.57** | **$0.31** | Six-Month Performance Summary (in thousands, except per share data) | Metric | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | | Net Interest Income | $215,791 | $207,271 | | Provision for (reversal of) credit losses | $1,998 | $8,063 | | Total Noninterest Income | $405,974 | $374,923 | | Total Noninterest Expense | $512,649 | $506,487 | | **Income attributable to Hilltop** | **$78,189** | **$48,001** | | **Diluted EPS** | **$1.22** | **$0.74** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash decreased by **$1.34 billion** in H1 2025, primarily due to cash used in operating and financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 (USD) | 2024 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | $(228,761) | $(364,459) | | Net cash provided by (used in) investing activities | $(97,516) | $29,497 | | Net cash used in financing activities | $(1,014,017) | $(726,787) | | **Net change in cash, cash equivalents and restricted cash** | **$(1,340,294)** | **$(1,061,749)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, financial instruments, and key events including a merchant bank gain and debt redemptions - The company's business is conducted through two primary units: **PlainsCapital Corporation (PCC)** for banking and mortgage services, and **Hilltop Securities Holdings LLC** for broker-dealer and investment banking services[21](index=21&type=chunk) - A preliminary pre-tax gain of **$27.1 million** (**$21.0 million** net of tax) was recognized in H1 2025 from the sale of the company's interest in Moser Holdings, LLC, a merchant bank investment[68](index=68&type=chunk) - The company redeemed all of its outstanding **$150 million Senior Notes** in January 2025 and all of its **$50 million 5.75% Subordinated Notes** due 2030 in May 2025[152](index=152&type=chunk)[153](index=153&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=48&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights strong H1 2025 performance driven by a merchant bank gain and credit loss reversal, alongside capital strength and market challenges - The company's board authorized a new stock repurchase program of up to **$100.0 million** in January 2025, which was later increased to **$135.0 million** in July 2025. During the first six months of 2025, the company repurchased **2.2 million shares** for **$68.2 million**[258](index=258&type=chunk) - Management notes that while funding costs remain elevated, the cost of deposits decreased in H1 2025 compared to H1 2024 as actions were taken to reduce interest paid on interest-bearing deposits[269](index=269&type=chunk) - The company is evaluating potential loss exposures from the central Texas flooding that occurred in July 2025, which could impact the banking and mortgage origination segments[277](index=277&type=chunk) [Consolidated Operating Results](index=63&type=section&id=Consolidated%20Operating%20Results) Consolidated net income significantly increased in Q2 and H1 2025, driven by credit loss reversal and improved net interest margin Key Performance Indicators | Ratio | Q2 2025 (%) | Q2 2024 (%) | H1 2025 (%) | H1 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Return on average stockholders' equity | 6.62% | 3.84% | 7.21% | 4.54% | | Return on average assets | 0.98% | 0.59% | 1.05% | 0.67% | | Net interest margin (taxable equivalent) | 3.04% | 2.92% | 2.95% | 2.89% | [Segment Results](index=66&type=section&id=Segment%20Results) Banking segment income rose significantly due to credit loss reversal, while other segments showed mixed results including a mortgage legal settlement Income (Loss) Before Taxes by Segment (in thousands) | Segment | Q2 2025 (USD) | Q2 2024 (USD) | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | :--- | :--- | | Banking | $54,928 | $32,813 | $94,986 | $83,155 | | Broker-Dealer | $6,397 | $7,225 | $15,613 | $26,143 | | Mortgage Origination | $3,210 | $1,350 | $(5,072) | $(15,099) | | Corporate | $(15,079) | $(11,868) | $1,540 | $(26,571) | - The Mortgage Origination segment received **$9.5 million** from legal settlements in April 2025, which significantly contributed to its Q2 profitability[368](index=368&type=chunk)[384](index=384&type=chunk) [Financial Condition](index=85&type=section&id=Financial%20Condition) Total assets decreased to **$15.4 billion**, while the loan portfolio grew modestly and ACL decreased due to an improved macroeconomic outlook - The allowance for credit losses was determined using a single **'baseline' macroeconomic forecast** from Moody's Analytics as of June 30, 2025, a shift from the more pessimistic 'S5' alternative scenario used previously[440](index=440&type=chunk) - A sensitivity analysis shows that a downside **'S3' economic scenario** would increase the ACL by approximately **$66 million**, while an upside **'S1' scenario** would decrease it by about **$12 million**[454](index=454&type=chunk)[455](index=455&type=chunk) - Total estimated uninsured deposits were **$5.2 billion** (**50%** of total deposits). Excluding collateralized and internal accounts, uninsured deposits were **$4.5 billion** (**43%** of total deposits)[480](index=480&type=chunk) [Liquidity and Capital Resources](index=93&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, with regulatory ratios well above thresholds despite cash decrease from debt redemptions Regulatory Capital Ratios (June 30, 2025) | Ratio | Hilltop (%) | PlainsCapital (%) | Minimum Requirement (incl. buffer) (%) | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 | 20.74% | 15.08% | 7.0% | | Tier 1 Capital | 20.74% | 15.08% | 8.5% | | Total Capital | 23.38% | 16.29% | 10.5% | | Tier 1 Leverage | 13.11% | 10.71% | 4.0% | - The Bank had available liquidity of **$6.55 billion** at June 30, 2025, primarily from **FHLB capacity ($4.3 billion)** and its available investment portfolio (**$1.4 billion**)[505](index=505&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=94&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company primarily manages interest rate risk, with the banking segment being asset sensitive, while other segments face specific market exposures Banking Segment Interest Rate Sensitivity Analysis (June 30, 2025) | Change in Rates (bps) | Change in Net Interest Income (Amount in thousands) | Change in Net Interest Income (%) | Change in Economic Value of Equity (Amount in thousands) | Change in Economic Value of Equity (%) | | :--- | :--- | :--- | :--- | :--- | | +200 | $38,950 | 9.24% | $157,684 | 9.73% | | +100 | $20,120 | 4.77% | $94,001 | 5.80% | | -100 | $(19,436) | (4.61)% | $(155,396) | (9.59)% | - The mortgage origination segment's primary market exposure is interest rate risk impacting mortgage loans held for sale, interest rate lock commitments (IRLCs), and mortgage servicing rights (MSRs). This risk is managed through forward commitments to sell mortgage-backed securities[544](index=544&type=chunk)[545](index=545&type=chunk) [Item 4. Controls and Procedures](index=99&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal controls during Q2 2025 - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[553](index=553&type=chunk) - No changes in internal control over financial reporting occurred during the second fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[554](index=554&type=chunk) [PART II — OTHER INFORMATION](index=100&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other disclosures relevant to the company's operations [Item 1. Legal Proceedings](index=100&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including an ongoing investigative inquiry into PrimeLending's float down option - PrimeLending is cooperating with an ongoing investigative inquiry from the U.S. Attorney for the Western District of Virginia regarding its float down option, which has included grand jury subpoenas[166](index=166&type=chunk) [Item 1A. Risk Factors](index=100&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's previously disclosed risk factors have occurred since the 2024 Form 10-K filing - No material changes to risk factors have occurred since the filing of the **2024 Form 10-K**[558](index=558&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=100&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **1.16 million shares** of common stock in Q2 2025 as part of an increased repurchase program Common Stock Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share (USD) | | :--- | :--- | :--- | | April 2025 | — | $— | | May 2025 | 817,396 | $30.29 | | June 2025 | 340,000 | $29.80 | | **Total** | **1,157,396** | **$30.14** | [Item 5. Other Information](index=100&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted, terminated, or modified by directors or officers in Q2 2025 - There were no adoptions, terminations, or modifications of **Rule 10b5-1 trading arrangements** by directors or executive officers during the three months ended June 30, 2025[561](index=561&type=chunk) [Item 6. Exhibits](index=101&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including officer certifications and XBRL data

Financial Data and Key Metrics Changes - Hilltop reported net income of approximately $36 million or $0.57 per diluted share for Q2 2025, with a return on average assets of 1% and return on average equity of 6.6% [4] - Net interest income increased by 7% year-over-year, totaling $110.7 million, while net interest margin improved by 17 basis points to 301 basis points [16][19] - The allowance for credit losses declined by $8.2 million to $98 million, with a net reversal of credit losses of $7.3 million during the quarter [15][8] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $55 million of pretax income on average assets of $12.7 billion, resulting in a return on average assets of 1.35% [5] - PrimeLending reported a pretax gain of $3 million, including a nonrecurring legal settlement of $9.5 million, while origination volumes increased by 2% year-over-year [9][10] - Hilltop Securities generated pretax income of $6 million on net revenues of $110 million, with public finance services seeing a 36% year-over-year increase in net revenues [11][12] Market Data and Key Metrics Changes - Average total deposits at PlainsCapital declined during the quarter, reflecting normal seasonal flows, but are expected to grow again in the second half of 2025 [17][7] - Core deposits increased by approximately $275 million year-over-year, indicating strong growth in the market [8] - Mortgage revenues declined by $12 million due to lower valuation marks and origination fees, highlighting ongoing challenges in the mortgage banking sector [19][20] Company Strategy and Development Direction - The company aims to manage deposit costs actively while expanding lending activity, focusing on maintaining strong capital levels with a common equity Tier one capital ratio of 20.8% [13][8] - Hilltop is looking to continue share repurchases and evaluate M&A opportunities, particularly in cash-type deals, as the stock trades at a discount to tangible book value [58][59] - The company is adjusting its expected full-year average loan growth rate to 0% to 2% for 2025, reflecting competitive pressures and market conditions [23][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the bank's performance despite uncertainties in the market regarding interest rates and inflation [24][25] - The outlook for 2025 reflects the current assessment of the economy, with expectations for continued activity in M&A and a focus on returning the mortgage business to profitability [25][58] - Management noted that competition in the mortgage origination market remains challenging, impacting overall margins and production volumes [9][10] Other Important Information - The company returned over $46 million to stockholders through dividends and share repurchases during the quarter [5][13] - Fixed expenses increased by 1.8% year-over-year, driven by higher variable compensation and inflation in personnel and software costs [20][34] Q&A Session Summary Question: Regarding the broker dealer business and efficiency ratio - Management indicated that the elevated efficiency ratio is largely due to the revenue mix, with public finance services up and structured finance flat or down [30][32] Question: On fixed expense guidance - The increase in non-variable expense outlook is driven by inflation in personnel and software costs [34] Question: About net interest margin (NIM) and deposit beta - Management noted that improved analytics and a more rational marketplace contributed to achieving a higher than expected deposit beta [34][35] Question: On loan growth and competition - Management discussed strong pipelines but acknowledged that competition is impacting loan growth, particularly in commercial real estate and C&I portfolios [42][46] Question: On capital management and share repurchases - Management confirmed a strong appetite for share repurchases, with $135 million authorized for 2025, and noted ongoing M&A activity in the market [58][59] Question: About classified loans and credit quality - The improvement in classified loans was primarily driven by paydowns and successful workout activities [61] Question: On deposit costs and outflows - Management expects seasonal outflows to normalize and deposits to rebuild in the latter half of the year [63]

Financial Data and Key Metrics Changes - Hilltop reported net income of approximately $36 million or $0.57 per diluted share, with a return on average assets of 1% and return on average equity of 6.6% [4] - The net interest margin increased by 19 basis points, while the blended cost of deposits declined by 9 basis points [5][6] - Net interest income for the second quarter was $110.7 million, reflecting a year-over-year increase of 7% [14][17] - The allowance for credit losses declined by $8.2 million to $98 million, with net charge-offs of approximately $900,000 [15][16] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $55 million of pretax income on average assets of $12.7 billion, resulting in a return on average assets of 1.35% [5] - PrimeLending reported a pretax gain of $3 million, including a nonrecurring legal settlement of $9.5 million [9] - Hilltop Securities generated pretax income of $6 million on net revenues of $110 million, with public finance services seeing a 36% year-over-year increase in net revenues [11] Market Data and Key Metrics Changes - Average total deposits at PlainsCapital declined during the quarter, reflecting normal seasonal flows related to tax payments and distributions [18] - Core deposits increased by approximately $275 million year-over-year [8] - Mortgage revenues declined by $12 million, driven by lower valuation marks on the pipeline and lower loan origination fees [20] Company Strategy and Development Direction - The company aims to return its mortgage business to profitability while managing deposit costs and expanding lending activity [24] - Hilltop continues to focus on prudent growth of revenue producers while gaining efficiency across middle and back office functions [21] - The company anticipates ongoing activity in M&A, looking for cash-type deals due to trading at a discount on a tangible book value basis [51] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the work being done to support customers and communities, despite uncertainties in the market regarding interest rates and inflation [24] - The outlook for 2025 reflects the current assessment of the economy and market conditions, with adjustments expected as the market changes [25] - The company expects to recapture a material portion of deposits in the second half of 2025 as seasonal inflows occur [7] Other Important Information - The company returned over $46 million to stockholders through dividends and share repurchases during the quarter [5] - The tangible book value per share increased by $0.54 to $30.56 [13] Q&A Session Summary Question: Regarding the broker dealer business and elevated efficiency ratio - Management indicated that the elevated efficiency ratio is largely a reflection of the revenue mix, with public finance services up and structured finance flat to down [27][28] Question: On fixed expense guidance and incremental expense outlook - Management noted ongoing inflation in personnel and software expenses as drivers for the increased expense outlook [30] Question: About the net interest margin and deposit beta - Management highlighted improvements in analytic capabilities and a more rational marketplace as factors contributing to a higher than expected deposit beta [31][32] Question: On loan growth and competition - Management discussed strong pipelines and the impact of competition on loan growth, indicating that it will take time to fund commitments [36][41] Question: On capital management and share repurchases - Management expressed satisfaction with share repurchases and indicated plans to continue this strategy, while also evaluating M&A opportunities [50][51] Question: About credit improvements and classified loans - Management attributed improvements in classified loans to pay downs and effective workout activities by the credit team [53] Question: On deposit costs and outflows - Management clarified that recent outflows were seasonal and expected to rebuild in the second half of the year [55]

Core Insights - Hilltop Holdings Inc. (HTH) reported second-quarter 2025 earnings of 57 cents per share, exceeding the Zacks Consensus Estimate of 41 cents, and reflecting an 83.9% increase from the prior-year quarter [1][9] - The earnings growth was driven by higher net interest income (NII) and a reversal of provisions, although higher non-interest expenses and lower non-interest income, along with a decline in deposits, posed challenges [1][10] Financial Performance - Net income attributable to common stockholders was $36.1 million, representing a 77.4% year-over-year increase, surpassing the estimate of $22.4 million [2] - Net revenues for the second quarter totaled $303.3 million, a 2.1% year-over-year increase, but fell short of the Zacks Consensus Estimate of $307.6 million [3] - NII rose by 6.8% year over year to $110.7 million, exceeding the estimate of $106.1 million, while the net interest margin (NIM) improved to 3.04%, up 12 basis points from the previous year [3] - Non-interest income decreased slightly to $192.6 million, missing the projected $196.3 million, primarily due to declines in most components except for securities commissions and fees [4] - Non-interest expenses increased by 1.8% year over year to $261.2 million, slightly below the estimate of $262.4 million [4] Loan and Deposit Trends - As of June 30, 2025, net loans held for investment were $8 billion, reflecting a 1.3% sequential increase, while total deposits decreased by 4.1% to $10.4 billion [5] Credit Quality and Capital Ratios - Hilltop Holdings experienced a reversal of credit losses amounting to $7.3 million, compared to a provision for credit losses of $10.9 million in the prior-year quarter [6] - Non-performing assets as a percentage of total assets improved to 0.53%, down 17 basis points from the previous year [6] - Return on average assets increased to 0.98% from 0.59% year over year, and return on average stockholders' equity rose to 6.62% from 3.84% [7] - The common equity tier 1 capital ratio improved to 20.74% from 19.45% year over year, while the total capital ratio increased to 23.38% from 22.57% [7] Strategic Outlook - The company's restructuring efforts, improving fee income, and favorable interest rates are expected to support revenue growth, although challenges remain in the Mortgage Origination segment and asset quality [10]

Financial Performance - Hilltop Holdings' Q2 2025 net income available to common stockholders was $31 million[5] - The company's Q2 2025 earnings per diluted share (EPS) was $095[5] - Hilltop Securities generated pre-tax income of $62 million in Q2 2025[5, 63] - PrimeLending generated income before taxes of $32 million in Q2 2025[57] Capital Management - Hilltop returned $464 million to stockholders through dividends and share repurchases in Q2 2025[9] - $115 million in dividends[9] - $349 million in share repurchases[9] - Tangible book value per share increased to $3490 as of June 30, 2025, representing a 2074% increase year-over-year[7] PlainsCapital Bank Highlights - PlainsCapital Bank's net interest margin was 310%[56] - Full-service branches decreased to 55[56] - Efficiency ratio was 554%[56] Mortgage Origination - PrimeLending's origination volume was $24 billion in Q2 2025, with 89% purchase[5, 57] - PrimeLending's sales volume was $2135 million[57] Net Interest Income and Margin - Net interest income increased to $1107 million in Q2 2025[17] - Net interest margin increased to 301% in Q2 2025[19]

Core Insights - Hilltop Holdings (HTH) reported revenue of $303.31 million for Q2 2025, a year-over-year increase of 2.1% and an EPS of $0.57, up from $0.31 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $307.62 million, resulting in a surprise of -1.4%, while the EPS exceeded expectations by 39.02% compared to the consensus estimate of $0.41 [1] Financial Performance Metrics - Average Outstanding Balance of interest-earning assets was $14.72 billion, below the three-analyst average estimate of $14.95 billion [4] - Non-accrual loans were reported at $72.74 million, compared to the estimated $86.47 million [4] - Net Interest Margin stood at 3%, slightly above the three-analyst average estimate of 2.9% [4] - Non-performing assets totaled $81.89 million, lower than the $94.75 million average estimate [4] - Efficiency Ratio was reported at 55.4%, significantly better than the two-analyst average estimate of 86.8% [4] - Net Interest Income (FTE) was $111.48 million, exceeding the average estimate of $106.91 million [4] - Total Noninterest Income was $192.63 million, below the estimated $201.11 million [4] - Investment and securities advisory fees and commissions reached $43.73 million, higher than the average estimate of $37.05 million [4] - Mortgage loan origination fees were $28.74 million, slightly below the average estimate of $30.82 million [4] - Noninterest income from other sources was $35.18 million, compared to the average estimate of $48.96 million [4] - Net gains from the sale of loans and other mortgage production income were $51.95 million, below the average estimate of $54.28 million [4] Stock Performance - Hilltop Holdings shares returned +5% over the past month, compared to the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - Hilltop Holdings reported quarterly earnings of $0.57 per share, exceeding the Zacks Consensus Estimate of $0.41 per share, and up from $0.31 per share a year ago, representing an earnings surprise of +39.02% [1] - The company posted revenues of $303.31 million for the quarter ended June 2025, which was 1.4% below the Zacks Consensus Estimate, but an increase from $296.95 million year-over-year [2] - Hilltop Holdings has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Group 2 - The stock has gained approximately 9.5% since the beginning of the year, outperforming the S&P 500's gain of 8.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $320.73 million, and for the current fiscal year, it is $1.88 on revenues of $1.24 billion [7] - The Zacks Industry Rank for Banks - Southeast, to which Hilltop Holdings belongs, is currently in the top 9% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]