[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Hilltop Holdings reported strong Q2 2025 results, marked by increased profitability and effective capital management [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Hilltop Holdings reported a significant increase in profitability for the second quarter of 2025, with net income to common stockholders reaching $36.1 million, or $0.57 per diluted share | Metric | Q2 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | | Income to Common Stockholders | $36.1 million | $20.3 million | | Diluted EPS | $0.57 | $0.31 | - Key drivers for the improved financial results compared to Q2 2024 include: a reversal of credit losses, an increase in net interest income within the banking segment, increased net revenues and noninterest expenses in the broker-dealer segment, and declines in net interest expense, noninterest income, and noninterest expense in the mortgage origination segment[1](index=1&type=chunk) [Capital Management](index=1&type=section&id=Capital%20Management) The company demonstrated a commitment to returning capital to shareholders by declaring a quarterly cash dividend of $0.18 per share and repurchasing $34.9 million of its common stock during the quarter - A quarterly cash dividend of **$0.18 per common share** was declared, payable on August 29, 2025[2](index=2&type=chunk) | Share Repurchase Activity | Value (USD) | | :--- | :--- | | Shares Repurchased in Q2 2025 | 1,157,396 | | Total Cost | $34.9 million | | Average Price per Share | $30.17 | - The stock repurchase program was increased by **$35.0 million** to a total of **$135.0 million**, with approximately **$67 million** of capacity available through January 2026, subject to Federal Reserve non-objection[3](index=3&type=chunk) [CEO Commentary and Segment Highlights](index=1&type=section&id=CEO%20Commentary%20and%20Segment%20Highlights) Chairman, President and CEO Jeremy B. Ford highlighted the company's solid performance, including a 1% return on average assets and the return of $47 million to stockholders - PlainsCapital Bank's net interest margin expanded by **19 basis points** due to proactive deposit cost management and higher repricing of earning assets[5](index=5&type=chunk) - HilltopSecurities achieved a **5% year-over-year increase** in net revenue and a pre-tax margin of **5.8%**[5](index=5&type=chunk) - PrimeLending generated pre-tax income of **$3.2 million** on **$2.4 billion** of mortgage origination volume, including a one-time pre-tax benefit of **$9.5 million** from prior legal settlements[5](index=5&type=chunk) [Key Financial Highlights and Metrics](index=1&type=section&id=Key%20Financial%20Highlights%20and%20Metrics) This section details Hilltop's consolidated and segment-specific financial performance, asset quality, and capital ratios for Q2 2025 [Consolidated Performance Highlights](index=1&type=section&id=Consolidated%20Performance%20Highlights) Hilltop's consolidated performance in Q2 2025 showed significant improvement over the prior year, with a reversal of credit losses of $7.3 million compared to a $10.9 million provision in Q2 2024 - The company recorded a reversal of credit losses of **$7.3 million** in Q2 2025, a significant shift from the **$10.9 million provision** for credit losses in Q2 2024, primarily driven by changes in the U.S. economic outlook[5](index=5&type=chunk) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Return on Average Assets (ROA) | 0.98% | 0.59% | | Return on Average Stockholders' Equity (ROE) | 6.62% | 3.84% | | Book Value per Common Share | $34.90 | $32.86 (at June 30, 2024) | - The consolidated net interest margin increased to **3.01%** for Q2 2025, compared to **2.84%** in Q1 2025[7](index=7&type=chunk) [Segment Performance](index=4&type=section&id=Segment%20Performance) The Banking segment was the main contributor to profitability with $54.9 million in pre-tax income, while Broker-Dealer and Mortgage Origination segments also reported positive pre-tax income | Segment (Q2 2025) | Income (Loss) Before Taxes (USD) | | :--- | :--- | | Banking | $54,928,000 | | Broker-Dealer | $6,397,000 | | Mortgage Origination | $3,210,000 | - Mortgage loan origination volume was **$2.4 billion** in Q2 2025, consistent with the volume in Q2 2024[7](index=7&type=chunk) - The Broker-Dealer segment's pre-tax margin was **5.8%** in Q2 2025, a decrease from **6.9%** in Q2 2024[10](index=10&type=chunk) [Asset Quality](index=2&type=section&id=Asset%20Quality) Asset quality improved during the quarter, with non-accrual loans decreasing to $72.7 million, or 0.80% of total loans, down from $81.5 million (0.93%) in the previous quarter | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Non-accrual loans | $72.7 million | $81.5 million | $105.7 million | | Non-accrual loans as a % of total loans | 0.80% | 0.93% | 1.12% | | Non-performing assets as a % of total assets | 0.53% | 0.56% | 0.70% | [Capital Ratios](index=2&type=section&id=Capital%20Ratios) Hilltop maintained robust capital levels as of June 30, 2025, with Tier 1 Leverage Ratio at 13.11% and CET1 Capital Ratio at 20.74%, both well above regulatory requirements | Capital Ratio (Hilltop Consolidated) | June 30, 2025 (%) | | :--- | :--- | | Tier 1 Leverage Ratio | 13.11% | | Common Equity Tier 1 Capital Ratio | 20.74% | | Total Capital (to risk-weighted assets) | 23.38% | [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents Hilltop's consolidated balance sheets, income statements, and net interest margin analysis for Q2 2025 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Hilltop's total assets were $15.4 billion, a slight decrease from $15.8 billion at the end of the prior quarter | Balance Sheet Item | June 30, 2025 (USD Billions) | March 31, 2025 (USD Billions) | | :--- | :--- | :--- | | Total Assets | $15.4 | $15.8 | | Loans held for investment, net | $8.0 | $7.9 | | Total Deposits | $10.4 | $10.8 | | Total Stockholders' Equity | $2.2 | $2.2 | [Consolidated Income Statements](index=4&type=section&id=Consolidated%20Income%20Statements) For the second quarter of 2025, the company generated $110.7 million in net interest income and $192.6 million in noninterest income, contributing to a net income of $36.1 million | Income Statement Item (Q2 2025) | Amount (USD Millions) | | :--- | :--- | | Net Interest Income | $110.7 | | Provision for (reversal of) credit losses | $(7.3) | | Total Noninterest Income | $192.6 | | Total Noninterest Expense | $261.2 | | Income Attributable to Hilltop | $36.1 | [Net Interest Margin Analysis](index=6&type=section&id=Net%20Interest%20Margin%20Analysis) The taxable equivalent net interest margin (NIM) expanded to 3.04% in Q2 2025, up from 2.92% in Q2 2024, driven by a reduction in the cost of interest-bearing liabilities | Net Interest Margin Detail | Q2 2025 (%) | Q2 2024 (%) | | :--- | :--- | :--- | | Net Interest Margin (Taxable Equivalent) | 3.04% | 2.92% | | Net Interest Spread | 2.01% | 1.75% | | Yield on Interest-Earning Assets | 5.39% | 5.82% | | Rate on Interest-Bearing Liabilities | 3.38% | 4.07% | [Supplementary Information](index=8&type=section&id=Supplementary%20Information) This section provides details on the upcoming conference call and an overview of Hilltop Holdings' business operations [Conference Call Information](index=8&type=section&id=Conference%20Call%20Information) Hilltop Holdings will host a conference call and live webcast to discuss its second quarter 2025 financial results on Friday, July 25, 2025, at 8:00 AM Central Time - The conference call to review Q2 2025 results is scheduled for **Friday, July 25, 2025, at 8:00 AM Central (9:00 AM Eastern)**[17](index=17&type=chunk) [About Hilltop](index=8&type=section&id=About%20Hilltop) Hilltop Holdings is a Dallas-based financial holding company operating primarily through its subsidiaries: PlainsCapital Bank, PrimeLending, and Hilltop Securities Inc - Hilltop is a financial holding company with key business lines in: - **Banking:** PlainsCapital Bank - **Mortgage Lending:** PrimeLending - **Broker-Dealer:** Hilltop Securities Inc. and Momentum Independent Network Inc.[18](index=18&type=chunk)

The market expects Hilltop Holdings (HTH) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on July 24, might help the stock move higher if these key numbers are bette ...

Core Viewpoint - Hilltop Holdings (HTH) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it focuses on earnings estimate revisions, which are strongly correlated with near-term stock price movements [2][3]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to significant price movements when estimates change [3]. Company Performance - The upgrade for Hilltop Holdings reflects an improvement in the company's underlying business, suggesting that investor sentiment may drive the stock price higher [4]. - Over the past three months, the Zacks Consensus Estimate for Hilltop Holdings has increased by 21.1%, indicating a positive trend in earnings expectations [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - Hilltop Holdings' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Company Overview - Hilltop Holdings Inc. is a financial holding company founded in 1998 and headquartered in Dallas, TX, providing consumer and business banking services through PlainsCapital Bank [12] - The company offers a wide range of financial products and services through its broker-dealers and mortgage origination, employing nearly 3,640 people and operating approximately 316 locations across 47 states as of March 31, 2025 [12] Investment Ratings - Hilltop Holdings is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating a solid position in the market [13] - The company has a Momentum Style Score of B, with shares increasing by 0.8% over the past four weeks [13] Earnings Estimates - For fiscal 2025, four analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.32 to $1.86 per share [13] - Hilltop Holdings boasts an average earnings surprise of 68.9%, suggesting strong performance relative to expectations [13] Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Hilltop Holdings is recommended for investors' short lists [14]

Company Overview - Hilltop Holdings Inc. is a financial holding company founded in 1998 and headquartered in Dallas, TX, providing consumer and business banking services through PlainsCapital Bank and offering a range of financial products through its broker-dealers and mortgage origination services [12]. Investment Ratings - Hilltop Holdings has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [13]. - The company has a Momentum Style Score of B, with shares increasing by 2.2% over the past four weeks [13]. Earnings Estimates - Four analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.32 to $1.86 per share [13]. - Hilltop Holdings boasts an average earnings surprise of 68.9%, suggesting strong performance relative to expectations [13]. Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Hilltop Holdings is recommended for investors' consideration [14].

Company Overview - Hilltop Holdings (HTH) is headquartered in Dallas and operates in the Finance sector, with a stock price change of 4.61% since the start of the year [3] - The company currently pays a dividend of $0.18 per share, resulting in a dividend yield of 2.4%, which is higher than the Banks - Southeast industry's yield of 2.38% and the S&P 500's yield of 1.6% [3] Dividend Performance - Hilltop Holdings has an annualized dividend of $0.72, reflecting a 5.9% increase from the previous year [4] - The company has increased its dividend 5 times over the last 5 years, with an average annual increase of 15.18% [4] - The current payout ratio is 37%, indicating that the company paid out 37% of its trailing 12-month EPS as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Hilltop Holdings' earnings in 2025 is $1.75 per share, with an expected increase of 0.57% from the previous year [5] Investment Appeal - Hilltop Holdings is considered an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]

Financial Performance - Net interest income for Q1 2025 was $105.1 million, an increase from $103.6 million in Q1 2024, representing a growth of 1.4%[250] - Total noninterest income rose to $213.3 million in Q1 2025, compared to $181.6 million in Q1 2024, marking an increase of 17.4%[250] - Net income attributable to Hilltop for Q1 2025 was $42.1 million, up from $27.7 million in Q1 2024, reflecting a growth of 52.2%[250] - Total consolidated income before taxes increased by 51% to $57.65 million in Q1 2025 from $38.09 million in Q1 2024[278] - Income applicable to common stockholders for the three months ended March 31, 2025, was $42.1 million, or $0.65 per diluted share, compared to $27.7 million, or $0.42 per diluted share, for the same period in 2024[286] Dividends and Stock Repurchase - The company declared total common dividends of $11.6 million during Q1 2025, with a quarterly cash dividend of $0.18 per common share announced for payment on May 22, 2025[253] - A new stock repurchase program was authorized, allowing the repurchase of up to $100 million of common stock, with $33.3 million spent to repurchase 1,046,540 shares at an average price of $31.80 per share in Q1 2025[254] Assets and Equity - Total assets as of March 31, 2025, were $15.8 billion, a decrease from $16.3 billion at the end of 2024[250] - The common equity to assets ratio improved to 13.91% as of March 31, 2025, compared to 13.46% at the end of 2024[250] - The leverage ratio at the end of the period was 12.86% for the three months ended March 31, 2025, compared to 12.49% for the same period in 2024[290] Credit Losses and Provisions - The allowance for credit losses increased to $106.2 million as of March 31, 2025, from $101.1 million at the end of 2024[250] - The provision for credit losses in the banking segment increased significantly by 428% to $9.37 million in Q1 2025 from a reversal of $2.85 million in Q1 2024[278] - The provision for credit losses during the three months ended March 31, 2025, was primarily driven by a build in the allowance related to loan portfolio changes and specific reserves[301] - The provision for credit losses for the three months ended March 31, 2025, included a provision of $1.7 million for individually evaluated loans and $7.7 million for collectively evaluated loans[437] Economic Outlook - The company anticipates continued economic uncertainties and challenges related to interest rate movements and funding costs throughout 2025[264] - The overall economic conditions and market uncertainties are expected to adversely impact operating results during the remainder of 2025[269] - The U.S. economic forecast predicts real GDP growth rates of 1.7% for 2025 and 1.2% for 2026, with an unemployment rate peaking at 5.5% in the first half of 2026[435][436] - Elevated borrowing costs are anticipated to reduce credit-sensitive spending, while tariffs and immigration policies are expected to weaken the economy[435] Segment Performance - The banking segment contributed $40.1 million to income before income taxes in Q1 2025, while the broker-dealer segment contributed $9.2 million, and the mortgage origination segment incurred losses of $8.3 million[257] - Noninterest income for the broker-dealer segment decreased by 7% to $96.94 million in Q1 2025 compared to $104.58 million in Q1 2024[278] - The broker-dealer segment's net revenue decreased to $108.5 million for the three months ended March 31, 2025, down from $116.8 million in the same period of 2024[339] - The mortgage origination segment reported a loss before income taxes of $8,282,000 in Q1 2025, an improvement from a loss of $16,450,000 in Q1 2024[355] Interest Income and Expenses - Net interest income for the banking segment decreased by 1% to $90.55 million in Q1 2025 compared to $91.61 million in Q1 2024[278] - Net interest margin for the three months ended March 31, 2025, was 2.86%, slightly down from 2.87% in the same period in 2024[290] - Net interest income decreased slightly due to reduced earnings on interest-earning assets, with average yield on interest-earning assets dropping 38 basis points from 5.58% to 5.20%[328] - The average rate paid on interest-bearing liabilities decreased 67 basis points from 3.90% to 3.23%[328] Noninterest Expenses - The banking segment's noninterest expense decreased by 7% to $51.93 million in Q1 2025 from $56.02 million in Q1 2024[278] - Noninterest expense in the broker-dealer segment increased to $99.3 million, up from $97.9 million in the same period of 2024[339] - Noninterest expenses decreased by 5.4% to $74,660 million from $78,898 million in 2024[382] Mortgage Origination - Total loan origination volume increased by 3.9% to $1,742,341 million for the three months ended March 31, 2025, compared to $1,676,486 million in the same period of 2024[367] - Mortgage loan originations decreased by 38 units, from 5,411 units in 2024 to 5,373 units in 2025[365] - The mortgage origination segment's loans held for sale decreased to $722.6 million as of March 31, 2025, from $809.8 million at December 31, 2024[427] Securities and Investments - The total securities portfolio increased to $2,814,983 as of March 31, 2025, from $2,659,661 at December 31, 2024[405] - The banking segment's securities portfolio was valued at $2.1 billion, consisting of trading securities of $0.7 million, available for sale securities of $1.4 billion, and held to maturity securities of $762.4 million[407] Credit Policies - The banking segment's credit policies emphasize strong underwriting and governance standards to mitigate potential losses[414] - The allowance for credit losses on the Bank's energy portfolio was $0.4 million, or 0.7% of loans held for investment, as of March 31, 2025[420]

Financial Data and Key Metrics Changes - Hilltop Holdings Inc. reported net income of $42 million, or $0.65 per diluted share, with a return on average assets of 1.1% and return on average equity of 7.8% for Q1 2025 [6][22] - The tangible book value per share increased from year-end 2024 by $0.53 to $30 per share [21] - Net interest income for the first quarter was $105 million, reflecting a year-over-year increase of $1.5 million or 1.4% [29] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $40 million pretax income on $13 billion of average assets, with a return on average assets of 0.96% [8] - PrimeLending reported a pretax loss of $8 million, with origination volumes under pressure due to elevated interest rates [12][13] - Hilltop Securities experienced a 34% year-over-year increase in net revenues from Public Finance Services, while structured finance net revenues declined by $8 million [15][16] Market Data and Key Metrics Changes - Average total deposits at the bank decreased by approximately $89 million or 1% versus the fourth quarter of 2024, with an ending balance decline of $233 million [31] - Average loans held for investment (HFI) remained stable at $7.9 billion, with expectations of loan growth between 0% to 3% for the full year [38][39] Company Strategy and Development Direction - The company plans to continue investing in its merchant banking platform while managing its fixed cost structure in response to market conditions [20][14] - Management is focused on right-sizing the mortgage business to align with current market conditions and is actively pursuing growth in its loan officer pool [76] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the ongoing volatility in the market due to interest rates and inflation, but remains optimistic about the company's balance sheet positioning [43] - The outlook for 2025 reflects current economic assessments, with expectations for modest growth in various segments despite market uncertainties [44] Other Important Information - The company recognized two nonrecurring items impacting consolidated results: a gain from the sale of Mosier Energy Solutions and an insurance recovery, contributing positively to net income [19][20] - The allowance for credit losses increased by $5 million to $106 million, reflecting negative migration in certain credit relationships [26] Q&A Session Summary Question: What was the size of the downgraded office credit? - The downgraded office credit was approximately $18 million, with improvements in classified loans driven by smaller credits migrating positively [50] Question: Can deposit costs decrease further? - Management indicated that while there is potential for deposit costs to decrease, they are balancing this with the need to grow customer deposits [52][54] Question: Will there be a reversal of seasonal deposit outflows in Q2 2025? - Seasonal outflows are expected to continue into Q2 due to tax season, but growth in core customer deposits is anticipated afterward [62][64] Question: How is the mortgage business positioned for future improvements? - Management believes the mortgage business will see slow but steady improvement, with efforts to right-size operations for the next 12 to 18 months [75] Question: What is the outlook for loan growth? - The loan growth outlook has been reduced, but the pipeline remains strong, with expectations for modest growth in the one to four family portfolio [78][79] Question: Will stock repurchases continue? - The company has $67 million available for stock repurchases and is evaluating market conditions for potential buybacks [81] Question: How much of the expense improvement was due to the insurance recovery? - The insurance recovery had a limited impact on overall expense improvement, as the company has focused on optimizing and stabilizing expenses [86]

Core Viewpoint - Hilltop Holdings Inc. reported better-than-expected first-quarter 2025 earnings, with a significant increase in net income and revenues, driven by higher net interest income and non-interest income, despite challenges from rising expenses and lower deposits [1][2][3]. Financial Performance - First-quarter 2025 earnings per share were 65 cents, exceeding the Zacks Consensus Estimate of 28 cents, and reflecting a 54.8% increase year-over-year [1] - Net income attributable to common stockholders was $42.1 million, up 52.2% from the prior year, surpassing the estimate of $17.9 million [2] - Net revenues reached $318.5 million, an 11.6% increase year-over-year, exceeding the Zacks Consensus Estimate of $283.9 million [3] - Non-interest income was $213.3 million, up 17.5% year-over-year, driven by increases across most components [4] Income and Expense Analysis - Net interest income increased by 1.4% year-over-year to $105.1 million, surpassing the estimate of $102.3 million [3] - Non-interest expenses rose slightly to $251.5 million, marginally below the projected $253.4 million [4] Loan and Deposit Trends - As of March 31, 2025, net loans held for investment were $7.9 billion, showing a slight sequential increase [5] - Total deposits were $10.8 billion, down 2.1% from the previous quarter, which was below the estimate of $11.6 billion [5] Credit Quality and Provisions - The company recorded a provision for credit losses of $9.3 million, compared to a reversal of credit losses of $2.9 million in the prior-year quarter [6] - Non-performing assets as a percentage of total assets increased to 0.56%, up 13 basis points year-over-year [6] Profitability and Capital Ratios - Return on average assets improved to 1.13%, up from 0.74% in the prior year [7] - Return on average stockholders' equity increased to 7.82%, compared to 5.23% in the previous year [7] - Common equity tier 1 capital ratio was 21.29%, up from 19.73% year-over-year, while the total capital ratio rose to 24.59% from 22.79% [7] Strategic Outlook - The company's restructuring efforts and improving fee income, along with favorable interest rates and decent loan demand, are expected to support revenue growth [8] - Challenges remain in the mortgage origination segment and asset quality, but a solid balance sheet allows for sustainable capital distributions [8]

Financial Data and Key Metrics Changes - Hilltop reported net income of $42 million or $0.65 per diluted share for Q1 2025, with a return on average assets of 1.1% and return on average equity of 7.8% [5][16] - The common equity Tier one capital ratio stood at 21%, and tangible book value per share increased from year-end 2024 by $0.53 to $30 per share [14][15] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $40 million of pretax income on $13 billion of average assets, representing a return on average assets of 0.96% [6] - PrimeLending reported a pretax loss of $8 million, with origination volume increasing year-over-year to $1.7 billion, but faced a decline in mortgage origination fees [10][11] - Hilltop Securities generated pretax income of $9 million on net revenue of $109 million, with Public Finance Services seeing a 34% year-over-year increase in net revenues [11][12] Market Data and Key Metrics Changes - Average total deposit balances at PlainsCapital Bank decreased by approximately $89 million or 1% compared to Q4 2024, but increased by nearly $300 million year-over-year [8][21] - The bank experienced a one basis point compression in net interest margin to 2.97% [9] Company Strategy and Development Direction - The company plans to continue investing in its merchant banking platform and maintain a focus on growing customer deposits while managing deposit costs [13][15] - Management is actively monitoring operating expenses at PrimeLending and has reduced the fixed expense base by 12% year-over-year [10] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about the ongoing volatility in the mortgage origination market and the impact of interest rates on affordability for homebuyers [10][11] - The company expects to see a modest improvement in economic conditions but acknowledges potential volatility due to inflation and tariffs [19][29] Other Important Information - Hilltop recognized a preliminary gain of $23.6 million from the sale of its investment in Mosier Energy Solutions, impacting net income positively [13][16] - The company returned $12 million to stockholders through dividends and repurchased $33 million in shares during the quarter [15] Q&A Session Summary Question: What was the size of the downgraded office credit? - The downgraded office credit was approximately $18 million, with positive migration in classified loans driven by smaller credits [32] Question: Can deposit costs move lower and improve NIM? - Management indicated that deposit costs have been reduced significantly, and while further reductions are possible, NIM has stabilized [33][34] Question: Should we expect a reversal of seasonal deposit outflows in Q2? - Management expects core customer deposits to rebuild after the tax season, leading to growth in deposits through the remainder of the year [44][45] Question: How were businesses impacted by bond market volatility? - The municipal portfolio was most impacted by volatility, but management is working to recover from the trading challenges faced [52] Question: What is the outlook for mortgage business and loan growth? - Management anticipates a slow and steady improvement in the mortgage business, while also focusing on right-sizing operations for the current market [55][56] Question: How much of the expense improvement was due to the insurance recovery? - The insurance recovery had a limited impact on overall expense guidance, which remains stable due to ongoing optimization efforts [63][64]