Financial Data and Key Metrics Changes - Hilltop reported net income of approximately $46 million or $0.74 per diluted share for Q3 2025, with a return on average assets of 1.2% and return on average equity of 8.35% [4][13] - Net interest income increased by $7.4 million or 7% year-over-year, driven by improving deposit costs and growth in higher yielding commercial loans [16][19] - The allowance for credit losses declined by $2.8 million to $95 million, resulting in a coverage ratio of 1.16% [13][14] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $55 million of pre-tax income on $12.6 billion of average assets, with a return on average assets of 1.34% [4][5] - PrimeLending reported a pre-tax loss of $7 million due to subdued mortgage origination volumes and pressure on margins [6][8] - Hilltop Securities Inc. generated pre-tax income of $26.5 million on net revenues of $144.5 million, achieving a pre-tax margin of 18% [8][10] Market Data and Key Metrics Changes - Total core deposits at PlainsCapital increased by 6% on a linked quarter basis, attributed to seasonal cash inflows [5] - Existing home sales across the country reached their lowest level in over 30 years, impacting PrimeLending's performance [7][20] - Hilltop Securities experienced solid growth in public finance, structured finance, and wealth management, with net revenues increasing significantly year-over-year [9][21] Company Strategy and Development Direction - The company aims to focus on reducing fixed expenses and recruiting talented mortgage originators to restore profitability at PrimeLending [8][20] - Hilltop Securities continues to invest in core areas of expertise and leverage its national brand to serve clients effectively [10][21] - The company is exploring opportunities for growth through potential M&A in the Texas market, which has seen increased interest from out-of-market entrants [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong capital levels with a common equity tier one capital ratio of 20% and tangible book value per share increasing to $31.23 [10] - The outlook for 2025 reflects current assessments of the economy and market conditions, with expectations for continued challenges in the mortgage market [25] - Management remains vigilant regarding credit risks and is focused on early detection and aggressive workout strategies [24] Other Important Information - The company returned $11 million to stockholders through dividends and repurchased $55 million in shares during the quarter [10] - A leadership transition is occurring at PlainsCapital Bank, with the promotion of Brent Randall to Chief Credit Officer [11] Q&A Session Summary Question: NII guidance and margin expectations - Management explained that the NII guidance was not increased due to expected rate cuts and potential asset contraction, emphasizing the balance sheet's asset sensitivity [27][28] Question: Stock buyback strategy and M&A outlook - Management confirmed a consistent approach to share repurchases given the current stock price and excess capital, while also exploring M&A opportunities in Texas [30][31] Question: Auto portfolio exposure - Management acknowledged subprime exposure in the auto portfolio but stated that they are closely monitoring and managing the situation [32][38] Question: Broker-dealer fee income and future expectations - Management highlighted strong performance across all broker-dealer business lines in Q3 but anticipated a reversion to lower pre-tax margins in the future [40][41]

Financial Data and Key Metrics Changes - Hilltop reported net income of approximately $46 million or $0.74 per diluted share for the third quarter [4] - Return on average assets for the period was 1.2% and return on average equity was 8.35% [4] - Net interest income increased by $7.4 million or 7% year-over-year, driven by improving deposit costs and growth in new higher yielding commercial loans [18] - Tangible book value per share increased by $0.67 to $31.23 [11] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $55 million of pretax income on $12.6 billion of average assets, resulting in a return on average assets of 1.34% [5] - PrimeLending reported a pretax loss of $7 million due to subdued mortgage origination volumes [7] - Hilltop Securities produced pretax income of $26.5 million on net revenues of $144.5 million, achieving a pretax margin of 18% [9] Market Data and Key Metrics Changes - Total core deposits at PlainsCapital increased by 6% on a linked quarter basis [6] - Existing home sales across the country reached their lowest level in over thirty years, impacting PrimeLending's performance [8] - Hilltop Securities experienced a 28% year-over-year increase in net revenues in public finance services [9] Company Strategy and Development Direction - The company aims to increase market share despite elevated competition in Texas [6] - Hilltop Securities continues to invest in core areas of expertise and leverage its national brand [10] - The leadership team at PrimeLending is focused on optimizing costs and productivity to restore profitability [21] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges in the mortgage market due to higher interest rates and home prices [21] - The company anticipates one additional 25 basis point rate cut in 2025, followed by two more in 2026 [18] - Management remains vigilant in assessing risk and negative credit migration, focusing on early detection and aggressive workout when necessary [26] Other Important Information - The allowance for credit losses declined by $2.8 million to $95 million, resulting in a coverage ratio of 1.16% [15] - The company returned $11 million to stockholders through dividends and repurchased $55 million in shares [11] - A leadership transition is occurring at PlainsCapital Bank with the retirement of the Chief Credit Officer [12] Q&A Session Summary Question: NII guidance and near-term outlook - Management explained that they remain asset sensitive and did not increase the overall loan growth profile due to expected paydowns and production [30] Question: Stock buybacks and M&A outlook - Management confirmed they are leaning into share repurchases given their excess capital position and discussed opportunities in the Texas market for potential M&A [37][38] Question: Auto portfolio exposure - Management acknowledged subprime exposure in the auto financing sector but emphasized their proactive management and workout efforts [40][46] Question: Broker dealer fee income - Management noted strong performance across all business units in the broker dealer segment but expects some reversion to lower levels in the future [49][51]

Financial Highlights - Net income available to common stockholders was $36.1 million[4], or $0.57 per diluted share[4] - Return on average assets was 0.98%[4] and return on average equity was 6.62%[4] - PlainsCapital Bank reported net income of $54.7 million[5] - Hilltop Securities generated pre-tax income of $26.5 million[5] with a pre-tax margin of 18.3% on total net revenues of $144.5 million[5] Balance Sheet and Capital Management - Tangible book value per share increased to $35.69 as of September 30, 2025[7] - Common Equity Tier 1 Risk-Based Ratio was 20.33% as of September 30, 2025[7] - Hilltop returned $66.3 million to stockholders in Q3 2025 through dividends ($11.2 million) and share repurchases ($55.1 million)[9] PlainsCapital Bank Performance - Bank net interest margin rose from 3.16% in Q2 2025 to 3.23% in Q3 2025[5] - Average bank loans HFI increased by $74 million, or 1.0%, from Q2 2025[5] - Average bank deposits decreased by $132 million, or 1.2%, from Q2 2025[5] - PlainsCapital Bank recorded a reversal of credit loss reserves of $2.6 million[5] Mortgage Operations - PrimeLending incurred a $7.2 million pre-tax loss during Q3 2025[5] - Origination volume was $2.3 billion, a decrease of $136 million or 5.6% from Q2 2025[5] - Gain on sale of loans sold to third parties increased 6 basis points from Q2 2025 to 239 basis points[5] Noninterest Income and Expense - Consolidated noninterest income increased by $20.2 million from Q3 2024 to Q3 2025[5] - Noninterest expenses decreased by $2.4 million, or 2.9%, from Q3 2024 to Q3 2025[5] Asset Quality - Allowance for credit losses totaled $95.2 million, representing 1.16% of total loans[16] - ACL % of Loans HFI excluding broker-dealer margin loans and mortgage warehouse loans equated to 1.25% as of September 30, 2025[17] 2025 Outlook - The company anticipates full year average bank loan growth of 0%-2% excluding mortgage related loans[52] - The company anticipates full year average deposit growth of 0%-2%[52] - The company anticipates net interest income to increase 2%-4% driven by deposit costs[52]

Core Viewpoint - Hilltop Holdings reported quarterly earnings of $0.74 per share, exceeding the Zacks Consensus Estimate of $0.49 per share, and showing an increase from $0.46 per share a year ago, resulting in an earnings surprise of +51.02% [1][2] Financial Performance - The company posted revenues of $330.2 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.10%, compared to $305.49 million in the same quarter last year [2] - Over the last four quarters, Hilltop Holdings has consistently surpassed consensus EPS estimates four times and topped revenue estimates three times [2] Stock Performance - Hilltop Holdings shares have increased approximately 13.8% since the beginning of the year, closely aligning with the S&P 500's gain of 13.9% [3] Future Outlook - The company's earnings outlook will be crucial for investors, particularly in understanding how current consensus earnings expectations for upcoming quarters may evolve [4] - The current consensus EPS estimate for the next quarter is $0.43 on revenues of $298.71 million, and for the current fiscal year, it is $2.03 on revenues of $1.22 billion [7] Industry Context - The Banks - Southeast industry, to which Hilltop Holdings belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8]

Core Insights - Hilltop Holdings Inc. reported a net income of $45.8 million, or $0.74 per diluted share, for Q3 2025, a significant increase from $29.7 million, or $0.46 per diluted share, in Q3 2024, driven by improved credit loss reversals and net interest income [1][5][9] Financial Performance - The reversal of credit losses was $2.5 million in Q3 2025, compared to $1.3 million in Q3 2024, indicating a positive shift in the economic outlook [9] - Net interest income for Q3 2025 was $112.4 million, up from $105.0 million in Q3 2024, reflecting a net interest margin increase to 3.06% from 2.84% [11][9] - Noninterest income rose to $217.8 million in Q3 2025, an 8.7% increase from $200.4 million in Q3 2024 [9][13] - Total assets increased to $15.6 billion at the end of Q3 2025, up from $15.4 billion at the end of Q2 2025 [9] Shareholder Returns - The Board declared a quarterly cash dividend of $0.18 per common share, payable on November 21, 2025 [2] - Hilltop repurchased 1,701,274 shares for $55.1 million at an average price of $32.36 per share during Q3 2025 [2][3] - The total amount authorized for share repurchase was increased to $185 million, providing approximately $62 million of available capacity through January 2026 [3] Segment Performance - PlainsCapital Bank generated $55 million in pre-tax income, supported by strong loan and deposit growth [5] - The mortgage origination segment faced challenges with a pre-tax loss of $7 million due to a dampened home-buying market, despite stable origination volumes of $2.3 billion [5][9] - HilltopSecurities achieved a pre-tax margin of 18% on net revenues of $144 million, indicating robust performance across business lines [5] Capital and Asset Quality - Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio of 13.13% and a Common Equity Tier 1 Capital Ratio of 20.33% as of September 30, 2025 [9][15] - Non-accrual loans decreased to $68.3 million, or 0.75% of total loans, down from 0.80% in the previous quarter [9][15]

Financial Performance - Hilltop reported net income of $45.8 million, or $0.74 per diluted share, for Q3 2025, a significant increase from $29.7 million, or $0.46 per diluted share, in Q3 2024, representing a 54.5% year-over-year growth[1] - Hilltop's consolidated annualized return on average assets and return on average stockholders' equity for Q3 2025 were 1.20% and 8.35%, respectively, up from 0.84% and 5.51% in Q3 2024[8] - Net income attributable to Hilltop for the three months ended September 30, 2025, was $45,818,000, a significant increase of 27.1% from $36,073,000 in the previous quarter[10] - Basic earnings per share increased to $0.74, compared to $0.57 in the previous quarter, reflecting a growth of 29.8%[10] Income and Revenue - Noninterest income rose to $217.8 million in Q3 2025, an 8.7% increase from $200.4 million in Q3 2024[8] - Total interest income for the three months ended September 30, 2025, was $200,261,000, an increase of 1.1% from $197,181,000 in the previous quarter[10] - Net interest income for the three months ended September 30, 2025, was $113.334 million, an increase from $105.624 million in the prior year[17] - Noninterest income totaled $217,807,000, up from $192,634,000 in the previous quarter, marking an increase of 13.1%[10] Asset and Deposit Growth - Total assets increased to $15.6 billion at September 30, 2025, compared to $15.4 billion at June 30, 2025[8] - Hilltop's total deposits grew to $10.7 billion at September 30, 2025, up from $10.4 billion at June 30, 2025[8] Credit Quality - The reversal of credit losses was $2.5 million in Q3 2025, compared to $1.3 million in Q3 2024, indicating improved credit quality[6] - Non-accrual loans totaled $68.253 million, representing 0.75% of total loans as of September 30, 2025, a decrease from 1.02% a year earlier[16] - Total non-performing assets amounted to $76.542 million, or 0.49% of total assets, as of September 30, 2025[16] Capital Management - The company repurchased 1,701,274 shares for $55.1 million at an average price of $32.36 per share during Q3 2025[2] - The Board of Directors authorized an increase in the stock repurchase program to $185.0 million, up by $50.0 million[3] - Hilltop's Tier 1 capital ratio to average assets was 13.13% as of September 30, 2025, up from 12.95% a year earlier[15] Dividends - Hilltop declared a quarterly cash dividend of $0.18 per common share, payable on November 21, 2025[2] - The company declared cash dividends of $0.18 per common share, consistent with the previous quarter[10] Operational Efficiency - The efficiency ratio improved to 51.7% for the quarter, down from 55.4% in the previous quarter[11] Market and Competitive Risks - The company acknowledges known and unknown risks that may cause actual results to differ materially from forward-looking statements[21] - Key risks include credit risks of lending activities, effectiveness of data security controls, and changes in economic conditions[21] - The company faces competition from various financial institutions and investment firms in its banking and mortgage segments[21] - Risks associated with merger and acquisition integration are highlighted as a significant concern[21] - Changes in interest rate environment and economic disruptions are noted as potential impacts on business performance[21] - Legal and regulatory proceedings are identified as ongoing risks that could affect the company's performance[21] Strategic Focus - The company is focused on the effective use of excess capital to enhance growth opportunities[21] - Changes in federal and state regulations, including those under the Dodd-Frank Act, are critical factors influencing business strategy[21] - The company does not assume any duty to update forward-looking statements unless required by law[21] Employment and Operations - Hilltop employed approximately 3,600 people and operated 312 locations in 47 states as of September 30, 2025[20] - The company will host a conference call on October 24, 2025, to review third quarter 2025 financial results[19]

Core Insights - Hilltop Holdings Inc. is set to release its quarterly earnings on October 23, 2025, with analysts estimating an EPS of $0.49 and projected revenue of approximately $310.6 million [1][6] - The anticipated earnings report for the quarter ending September 2025 is expected to show a year-over-year increase in earnings, driven by higher revenues, with the Zacks Consensus Estimate suggesting a slightly lower EPS of $0.47 [2][6] - The company's financial metrics indicate a P/E ratio of approximately 14.28, a price-to-sales ratio of about 1.31, and an enterprise value to sales ratio of around 1.35, reflecting its market valuation and financial health [3][6] Financial Ratios - The enterprise value to operating cash flow ratio is approximately 5.11, indicating efficiency in generating cash flow [4] - The earnings yield stands at about 7.00%, providing insight into the return on investment [4] - Hilltop Holdings has a debt-to-equity ratio of roughly 0.48, suggesting a moderate level of debt relative to equity, while the current ratio is around 0.30, which may indicate liquidity challenges [4] Upcoming Events - Hilltop Holdings will host a live webcast and conference call on October 24, 2025, at 8:00 AM Central to discuss its third-quarter 2025 financial results, led by Chairman, President, and CEO Jeremy B. Ford, along with CFO William B. Furr [5]

Group 1: Industry Innovations and Trends - The mortgage industry is experiencing significant technological shifts, with AI playing a central role in transforming customer engagement and operational efficiency [7][6] - Companies like Beeline Loans have successfully transitioned to modern platforms like Optimal Blue, enhancing pricing control and operational efficiency [2] - The commercial lending market is booming, with $2.7 trillion in maturing loans over the next five years, creating opportunities for brokers to tap into this demand [6] Group 2: Non-QM and Market Dynamics - Non-QM lending is gaining traction, taking market share from traditional Agencies, with many lenders selling these loans to avoid spread risk [9][10] - The HELOC and second mortgage sectors are seeing lenders prioritize speed and ease of closing over competitive rates [11] - Adjustable-rate mortgages and jumbo loans are under scrutiny as capital markets seek optimal product offerings amid rising mortgage rates [12] Group 3: New Tools and Solutions - Procision AVM by First American Data & Analytics offers a modern automated valuation model, providing lenders with daily updates and nationwide coverage [4] - Gateless Smart Underwrite® utilizes AI to streamline the underwriting process, significantly reducing approval times and enhancing decision accuracy [6] - The FinLocker GPT Toolkit assists loan officers in utilizing new technology for marketing and client engagement, simplifying complex tools for better relationship management [13][16]

Core Points - Hilltop Holdings Inc. will host a live webcast and conference call on October 24, 2025, to review its third quarter 2025 financial results [1][2] - The company is a Dallas-based financial holding company providing business and consumer banking services through PlainsCapital Bank and residential mortgage lending via PrimeLending [3] - Hilltop Holdings has approximately 3,600 employees and operates 312 locations across 47 states as of September 30, 2025 [3] Company Overview - Hilltop Holdings is listed on the New York Stock Exchange under the symbol "HTH" [3] - The company has broker-dealer subsidiaries, Hilltop Securities Inc. and Momentum Independent Network Inc., offering a range of securities brokerage and investment banking services [3] - The company recently announced a dual listing of its common stock on NYSE Texas, emphasizing its strong operational roots in Texas [6]

Trading, Non-QM, Fraud Detection Tools; Equifax's Price Cut; Webinars and Events We’re sailing through autumn. Places like Seattle and Minneapolis are losing 3-5 minutes of sunlight a day. Donald Trump told Congress to end changing clocks, but is seems that most states will still do it (“spring ahead, fall back”) November 2. Time flies, and we’re 23 days away from Halloween. Despite how it’s celebrated by 5-year-olds and their parents, frat houses, or at many malls around the U.S., is thought to come from ...