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]

Group 1: Industry Trends and Developments - The mortgage industry is experiencing significant changes with the introduction of new technologies and platforms aimed at improving efficiency and borrower engagement, such as MMI's Pathways Home and Gridavate's SaaS platform [2][3] - Verus Mortgage Capital reports record-breaking growth, particularly in the non-QM sector, driven by recent Fed rate cuts and an increase in borrower activity, marking August as their best month in history [6] - Equifax is responding to rising costs in the credit scoring market by offering VantageScore 4.0 at a 50% reduction compared to FICO prices, aiming to support competitive mortgage costs for homebuyers [6] Group 2: Events and Webinars - The MBA Education Group is launching a series of training modules focused on risk management across the loan lifecycle, with limited attendance to encourage participation [7] - Upcoming webinars include discussions on AI in mortgage finance and economic outlooks, featuring industry experts and aimed at providing insights into current market conditions [8][13] - The MBA Annual Convention & Expo is scheduled for October 19 in Las Vegas, presenting opportunities for networking and learning about the latest industry trends [12] Group 3: Market Insights - Recent data indicates a 4.7% decrease in mortgage applications, reflecting current lending conditions and consumer behavior [17] - Consumers are showing signs of increased reliance on borrowing due to rising inflation and tightening lending conditions, particularly affecting lower and middle-income households [16] - The mortgage-backed securities market is being transformed by Agile, which is enhancing trading efficiency and transparency through technology [14]

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]

Group 1: Mortgage Industry Updates - FHFA Director Pulte is involved in a controversy regarding occupancy fraud allegations, which may not impact mortgage rates significantly [1] - Chase has launched a limited-time "mortgage rate refinance sale" offering discounts on refinancing rates, with variations based on mortgage products and locations [1] - PlainsCapital Bank's "Express Funding" service allows quick loan funding with an average turnaround time of under 20 minutes, catering to mortgage lenders' efficiency needs [3] Group 2: Loan Quality and Compliance - ACES Q1 2025 Mortgage QC Industry Trends Report indicates a rise in critical defect rates, with overall defects increasing by 12.93% to 1.31%, marking the end of a two-quarter improvement streak [4] - Significant increases in specific defect categories include Income/Employment defects rising by 42.5% and Borrower and Mortgage Eligibility defects surging by 328.57% quarter-over-quarter [4] Group 3: Non-QM and Alternative Lending - Logan Finance's Asset Qualification program allows affluent clients to qualify for loans without W-2s, accepting both liquid and non-liquid assets at full value [8] - Verus Mortgage Capital has achieved over $40 billion in cumulative acquisitions and aims for a $10 billion non-agency production goal for 2025, indicating strong momentum in the non-QM market [8] Group 4: Regulatory and Market Developments - Fannie Mae's August 2025 National Housing Survey shows a slight decrease in the Home Purchase Sentiment Index (HPSI) by 0.4 points to 71.4, reflecting consumer sentiment towards housing [9] - Ongoing discussions between the Treasury and FHFA regarding the future of Fannie Mae and Freddie Mac may complicate reform efforts, with concerns about regulatory oversight and market competition [18][19]

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