Hilltop 8K Announces Financial Results for Third Quarter 2020 | HTH 22 Oct 20

Exhibit 99.1

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

Hilltop Holdings Inc. Announces Financial Results for Third Quarter 2020

DALLAS — (BUSINESS WIRE) October 22, 2020 — Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the third quarter of 2020. Hilltop produced income from continuing operations to common stockholders of $152.5 million, or $1.69 per diluted share, for the third quarter of 2020, compared to $74.2 million, or $0.81 per diluted share, for the third quarter of 2019. Hilltop’s financial results from continuing operations for the third quarter of 2020 reflect a significant increase in mortgage origination segment net gains from sale of loans and other mortgage production income. Including income from discontinued operations related to the insurance segment, income applicable to common stockholders was $153.3 million, or $1.70 per diluted share, for the third quarter of 2020, compared to $79.4 million, or $0.86 per diluted share, for the third quarter of 2019.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.09 per common share, payable on November 30, 2020, to all common stockholders of record as of the close of business on November 16, 2020.

The COVID-19 pandemic has negatively impacted financial markets and overall economic conditions, and is expected to continue to have implications on our business and operations. The extent of the impact of COVID-19 on our operational and financial performance for the remainder of 2020 is dependent on certain developments, including, among others, the broader adverse implications of COVID-19 on our customers and clients, potential further disruption and deterioration in the financial services industry, including the mortgage servicing and commercial paper markets, and additional, or extended, federal, state and local government orders and regulations that might be imposed in response to the pandemic, all of which are uncertain.

Jeremy Ford, President and CEO of Hilltop, said, “Our results this quarter highlight the strength of our diversified operating model and the commitment of our team. I could not be more pleased with the performance of our businesses and our team for working tirelessly to serve customers in a safe and highly effective manner. Our focus on execution and delivering exceptional customer service will continue to provide the foundation for prudent growth in the future.

Hilltop’s results this quarter reflect record performance from our mortgage origination franchise, enhanced performance in our securities businesses and stable credit performance at the bank. The mortgage business generated $6.5 billion of mortgage originations and $146 million of pre-tax income, as PrimeLending leveraged recent investments in technology and superior teamwork. HilltopSecurities generated $149 million of net revenue and a 24% pre-tax margin from improved results in its fixed income capital markets, structured finance and public banking business lines. PlainsCapital Bank generated $50 million of pre-tax income, representing a return to profitability as credit trends remained stable after the significant build in the allowance for credit losses during the second quarter. During the third quarter, the bank continued to support our customers facing adversity in the pandemic, resulting in approximately $291 million of active loan payment deferrals.”

Third Quarter 2020 Highlights for Hilltop:

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For the third quarter of 2020, net gains from sale of loans and other mortgage production income within our mortgage origination segment was $307.9 million, compared to $157.1 million in the third quarter of 2019, a 96.0% increase;

Mortgage loan origination production volume was $6.5 billion during the third quarter of 2020, compared to $4.8 billion in the third quarter of 2019.

●

The provision for (reversal of) credit losses was $(0.6) million during the third quarter of 2020, compared to $66.0 million in the second quarter of 2020;

The significant provision for credit losses during the second quarter of 2020 was primarily associated with the increase in the expected lifetime credit losses under CECL on collectively evaluated loans within the portfolio attributable to the continued market disruption and related macroeconomic uncertainties caused by COVID-19 through June 2020.

The reversal of credit losses during the third quarter of 2020 primarily reflected changes in reserves on margin loans within the broker-dealer segment given that the changes in the provision for credit losses associated with the Bank’s loan portfolio composition and credit quality were offset by improvements in macroeconomic factor assumptions and qualitative factors from the prior quarter.

●

Hilltop’s consolidated annualized return on average assets and return on average equity for the third quarter of 2020 were 3.71% and 25.94%, respectively, compared to 2.26% and 15.55%, respectively, for the third quarter of 2019;

●

Hilltop’s book value per common share increased to $26.72 at September 30, 2020, compared to $25.08 at June 30, 2020;

●

Hilltop’s total assets were $16.9 billion at both September 30, 2020 and June 30, 2020;

●

Loans¹, net of allowance for credit losses, were $7.3 billion at both September 30, 2020 and June 30, 2020;

Includes supporting our impacted banking clients through funding of over 2,800 loans through the Paycheck Protection Program, or PPP, which totaled approximately $671 million at September 30, 2020.

●

Non-performing loans were $82.1 million, or 0.78% of total loans, at September 30, 2020, compared to $68.3 million, or 0.65% of total loans, at June 30, 2020;

●

During the third quarter of 2020, we further supported our impacted banking clients through the approval of COVID-19 related loan modifications, resulting in active deferrals that have not reached the end of their deferral period of approximately $291 million as of September 30, 2020;

As of June 30, 2020, active COVID-19 related loan modifications totaled approximately $968 million;

During the third quarter of 2020, COVID-19 related loan modifications of approximately $662 million have made at least one payment pursuant to agreed-upon contractual terms;

Extent of progression of these loans into non-performing loans during future periods is uncertain.

●

Loans held for sale decreased by 1.7% from June 30, 2020 to $2.5 billion at September 30, 2020;

●

Total deposits were $11.3 billion at September 30, 2020, compared to $11.6 billion at June 30, 2020;

●

Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio² of 13.03% and a Common Equity Tier 1 Capital Ratio of 19.85% at September 30, 2020;

Ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period.

●

Hilltop’s consolidated net interest margin³decreased to 2.56% for the third quarter of 2020, compared to 2.80% in the second quarter of 2020;

●

For the third quarter of 2020, noninterest income from continuing operations was $502.7 million, compared to $306.5 million in the third quarter of 2019, a 64.0% increase;

●

For the third quarter of 2020, noninterest expense from continuing operations was $399.3 million, compared to $321.2 million in the third quarter of 2019, a 24.3% increase; and

●

Hilltop’s effective tax rate from continuing operations was 22.7% during the third quarter of 2020, compared to 21.9% during the same period in 2019.

Discontinued Operations

On June 30, 2020, Hilltop completed the sale of its insurance segment, National Lloyds Corporation, for cash proceeds of $154.1 million. Insurance segment results and its assets and liabilities have been presented as discontinued operations. Included within discontinued operations of corporate for the third quarter of 2020 is the recognition of a pre-tax post-closing adjustment gain of $0.7 million related to the finalization of the June 30, 2020 closing balance sheet, resulting in an aggregate gain on sale of NLC of $33.1 million. The resulting book gain from this sale transaction was not recognized for tax purposes pursuant to the rules under the Internal Revenue Code. Income from discontinued operations, net of income taxes, was $0.7 million, or $0.01 per diluted share, for the third quarter of 2020, compared to $5.3 million, or $0.05 per diluted share, for the third quarter of 2019.

Note: “Consolidated” refers to our consolidated financial position and consolidated results of operations, including discontinued operations and assets and liabilities classified as held for sale.

¹ “Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $502.1 million and $422.1 million at September 30, 2020 and June 30, 2020, respectively.

² Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets.

³ Net interest margin is defined as net interest income divided by average interest-earning assets.

Consolidated Financial and Other Information


Consolidated Balance Sheets	September 30,		June 30,		March 31,		December 31,		September 30,
(in 000's)	2020		2020		2020		2019		2019
Cash and due from banks	$	1,277,865	$	1,655,492	$	524,370	$	433,626	$	281,445
Federal funds sold		420		385		401		394		423
Assets segregated for regulatory purposes		221,621		194,626		178,805		157,436		83,878
Securities purchased under agreements to resell		90,103		161,457		23,356		59,031		49,998
Securities:
Trading, at fair value		667,751		648,037		393,581		689,576		707,268
Available for sale, at fair value, net		1,310,240		1,091,348		972,318		911,493		915,334
Held to maturity, at amortized cost, net		323,299		343,198		355,110		386,326		371,361
Equity, at fair value		117		122		107		166		164
		2,301,407		2,082,705		1,721,116		1,987,561		1,994,127
Loans held for sale		2,547,975		2,592,307		2,433,407		2,106,361		1,984,231
Loans held for investment, net of unearned income		7,945,560		7,849,904		7,345,250		7,381,400		7,321,208
Allowance for credit losses		(155,214)		(156,383)		(106,739)		(61,136)		(55,604)
Loans held for investment, net		7,790,346		7,693,521		7,238,511		7,320,264		7,265,604

Broker-dealer and clearing organization receivables		1,363,478		1,222,627		1,838,789		1,780,280		1,731,979
Premises and equipment, net		208,078		210,975		215,261		210,375		203,601
Operating lease right-of-use assets		109,354		119,954		113,395		114,320		119,035
Mortgage servicing assets		127,712		81,264		30,299		55,504		51,297
Other assets		607,932		627,982		846,316		404,754		527,125
Goodwill		267,447		267,447		267,447		267,447		267,447
Other intangible assets, net		21,814		23,374		25,019		26,666		28,432
Assets of discontinued operations		—		—		249,758		248,429		248,407
Total assets	$	16,935,552	$	16,934,116	$	15,706,250	$	15,172,448	$	14,837,029

Deposits:
Noninterest-bearing	$	3,557,603	$	3,467,500	$	2,865,192	$	2,769,556	$	2,732,325
Interest-bearing		7,704,312		8,182,098		7,082,297		6,262,658		5,998,547
Total deposits		11,261,915		11,649,598		9,947,489		9,032,214		8,730,872
Broker-dealer and clearing organization payables		1,310,835		1,158,628		1,259,181		1,605,518		1,546,163
Short-term borrowings		780,109		720,164		1,329,948		1,424,010		1,502,755
Securities sold, not yet purchased, at fair value		56,023		55,340		22,768		43,817		59,249
Notes payable		396,006		450,158		244,042		256,269		217,841
Operating lease liabilities		122,402		131,411		124,123		125,619		128,295
Junior subordinated debentures		67,012		67,012		67,012		67,012		67,012
Other liabilities		502,517		409,672		408,224		348,519		355,629
Liabilities of discontinued operations		—		—		139,730		140,674		145,786
Total liabilities		14,496,819		14,641,983		13,542,517		13,043,652		12,753,602

Common stock		902		902		901		906		906
Additional paid-in capital		1,443,588		1,439,686		1,437,301		1,445,233		1,441,604
Accumulated other comprehensive income		23,790		23,813		20,939		11,419		12,305
Retained earnings		942,461		797,331		676,946		644,860		602,835
Deferred compensation employee stock trust, net		774		778		774		776		789
Employee stock trust		(143)		(150)		(150)		(155)		(170)
Total Hilltop stockholders' equity		2,411,372		2,262,360		2,136,711		2,103,039		2,058,269
Noncontrolling interests		27,361		29,773		27,022		25,757		25,158
Total stockholders' equity		2,438,733		2,292,133		2,163,733		2,128,796		2,083,427
Total liabilities & stockholders' equity	$	16,935,552	$	16,934,116	$	15,706,250	$	15,172,448	$	14,837,029


	Three Months Ended
Consolidated Income Statements	September 30,		June 30,		March 31,		December 31,		September 30,
(in 000's, except per share data)	2020		2020		2020		2019		2019
Interest income:
Loans, including fees	$	104,955	$	107,860	$	111,168	$	115,696	$	119,580
Securities borrowed		10,705		12,883		13,327		16,196		21,010
Securities:
Taxable		11,035		11,698		15,695		15,174		14,885
Tax-exempt		1,687		1,539		1,610		1,572		1,576
Other		1,446		951		3,075		3,180		3,889
Total interest income		129,828		134,931		144,875		151,818		160,940

Interest expense:
Deposits		10,700		11,947		15,124		17,480		18,887
Securities loaned		8,729		10,796		11,277		13,989		17,889
Short-term borrowings		2,346		2,367		4,744		6,244		8,166
Notes payable		4,904		3,768		2,418		2,337		2,265
Junior subordinated debentures		608		705		850		909		955
Other		641		790		126		99		132
Total interest expense		27,928		30,373		34,539		41,058		48,294

Net interest income		101,900		104,558		110,336		110,760		112,646
Provision for (reversal of) credit losses		(602)		66,026		34,549		6,880		47
Net interest income after provision for (reversal of) credit losses		102,502		38,532		75,787		103,880		112,599

Noninterest income:
Net gains from sale of loans and other mortgage production income		307,896		295,317		150,486		120,573		157,050
Mortgage loan origination fees		47,681		45,341		28,554		36,939		37,782
Securities commissions and fees		32,496		34,234		40,069		33,205		34,426
Investment and securities advisory fees and commissions		36,866		29,120		23,180		32,083		28,685
Other		77,772		64,113		29,424		40,846		48,562
Total noninterest income		502,711		468,125		271,713		263,646		306,505

Noninterest expense:
Employees' compensation and benefits		294,907		276,893		196,356		212,498		232,449
Occupancy and equipment, net		26,124		26,174		19,522		30,617		27,002
Professional services		17,522		15,737		14,798		17,211		15,472
Other		60,792		51,405		51,225		47,542		46,263
Total noninterest expense		399,345		370,209		281,901		307,868		321,186

Income from continuing operations before income taxes		205,868		136,448		65,599		59,658		97,918
Income tax expense		46,820		31,808		15,148		13,579		21,472
Income from continuing operations		159,048		104,640		50,451		46,079		76,446
Income from discontinued operations, net of income taxes		736		30,775		3,151		5,623		5,261
Net income		159,784		135,415		53,602		51,702		81,707
Less: Net income attributable to noncontrolling interest		6,505		6,939		3,966		2,426		2,289
Income attributable to Hilltop	$	153,279	$	128,476	$	49,636	$	49,276	$	79,418

Earnings per common share:
Basic:
Earnings from continuing operations	$	1.69	$	1.08	$	0.51	$	0.48	$	0.81
Earnings from discontinued operations		0.01		0.34		0.04		0.06		0.06
	$	1.70	$	1.42	$	0.55	$	0.54	$	0.87
Diluted:
Earnings from continuing operations	$	1.69	$	1.08	$	0.51	$	0.48	$	0.81
Earnings from discontinued operations		0.01		0.34		0.04		0.06		0.05
	$	1.70	$	1.42	$	0.55	$	0.54	$	0.86

Cash dividends declared per common share	$	0.09	$	0.09	$	0.09	$	0.08	$	0.08

Weighted average shares outstanding:
Basic		90,200		90,164		90,509		90,606		91,745
Diluted		90,200		90,164		90,550		90,711		91,824


	Three Months Ended September 30, 2020
Segment Results					Mortgage						All Other and		Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	96,416	$	8,168	$	(2,349)	$	—	$	(4,594)	$	4,259	$	101,900
Provision for (reversal of) credit losses		—		(602)		—		—		—		—		(602)
Noninterest income		9,819		141,022		355,471		—		477		(4,078)		502,711
Noninterest expense		55,980		114,393		207,176		—		21,999		(203)		399,345
Income (loss) from continuing operations before taxes		50,255		35,399		145,946		—		(26,116)		384		205,868
Income from discontinued operations before taxes		—		—		—		—		736		—		736
	$	50,255	$	35,399	$	145,946	$	—	$	(25,380)	$	384	$	206,604


	Nine Months Ended September 30, 2020
Segment Results					Mortgage						All Other and		Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	284,440	$	31,005	$	(3,647)	$	—	$	(9,482)	$	14,478	$	316,794
Provision for credit losses		99,875		98		—		—		—		—		99,973
Noninterest income		29,246		350,192		874,926		—		3,315		(15,130)		1,242,549
Noninterest expense		169,569		299,743		547,222		—		35,741		(820)		1,051,455
Income (loss) from continuing operations before taxes		44,242		81,356		324,057		—		(41,908)		168		407,915
Income from discontinued operations before taxes		—		—		—		2,103		33,077		—		35,180
	$	44,242	$	81,356	$	324,057	$	2,103	$	(8,831)	$	168	$	443,095


	Three Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,
Selected Financial Data	2020		2020		2020		2019		2019

Hilltop Consolidated (1):
Return on average stockholders' equity		25.94%		23.32%		9.38%		9.43%		15.55%
Return on average assets		3.71%		3.30%		1.47%		1.40%		2.26%
Net interest margin (2)		2.56%		2.80%		3.41%		3.30%		3.45%
Net interest margin (taxable equivalent) (3):
As reported		2.57%		2.81%		3.42%		3.31%		3.46%
Impact of purchase accounting		10 bps		10 bps		22 bps		19 bps		26 bps
Book value per common share ($)		26.72		25.08		23.71		23.20		22.71
Shares outstanding, end of period (000's)		90,238		90,222		90,108		90,641		90,629
Dividend payout ratio (4)		5.30%		6.32%		16.41%		14.71%		9.24%

Banking Segment:
Net interest margin (2)		3.03%		3.11%		3.81%		3.77%		3.97%
Net interest margin (taxable equivalent) (3):
As reported		3.03%		3.12%		3.82%		3.78%		3.98%
Impact of purchase accounting		13 bps		12 bps		30 bps		25 bps		35 bps
Accretion of discount on loans ($000's)		3,346		3,217		6,639		5,698		7,868
Net charge-offs (recoveries) ($000's)		567		16,382		1,508		1,348		(380)
Return on average assets		1.14%		-0.42%		0.33%		1.17%		1.51%
Fee income ratio		9.2%		10.2%		8.5%		10.8%		8.3%
Efficiency ratio		52.7%		54.1%		55.5%		54.9%		50.5%
Employees' compensation and benefits ($000's)		29,808		31,583		32,347		31,455		31,309

Broker-Dealer Segment:
Net revenue ($000's) (5)		149,190		132,624		99,382		113,128		121,466
Employees' compensation and benefits ($000's)		88,063		79,697		56,550		64,301		69,954
Variable compensation expense ($000's)		60,774		52,372		32,024		39,505		44,921
Compensation as a % of net revenue		59.0%		60.1%		56.9%		56.8%		57.6%
Pre-tax margin (6)		23.7%		21.0%		18.3%		21.4%		22.2%

Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		4,183,560		3,204,573		2,341,847		2,958,176		3,380,812
Refinancings		2,266,793		2,894,486		1,280,741		1,442,329		1,390,989
Total mortgage loan originations - volume		6,450,353		6,099,059		3,622,588		4,400,505		4,771,801
Mortgage loan sales - volume ($000's)		6,521,773		5,934,914		3,486,249		4,226,425		4,316,118
Net gains from mortgage loan sales (basis points):
As reported		440		368		325		304		335
Impact of sales to banking segment		(1)		(1)		(13)		(8)		(1)
Mortgage servicing rights asset ($000's) (7)		127,712		81,263		30,299		55,504		51,297
Employees' compensation and benefits ($000's)		161,738		160,824		100,328		109,753		123,890
Variable compensation expense ($000's)		116,275		113,826		58,280		67,224		81,287

(1)	Ratios and financial data presented on a consolidated basis and includes discontinued operations and those assets and liabilities classified as held for sale.

(2)	Net interest margin is defined as net interest income divided by average interest-earning assets.

(3)

Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.3 million, $0.3 million, $0.3 million, $0.1 million, and $0.1 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.2 million, $0.1 million, and $0.1 million, respectively, for the periods presented.

(4)	Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share.

(5)	Net revenue is defined as the sum of total broker-dealer net interest income plus total broker-dealer noninterest income.

(6)	Pre-tax margin is defined as income before income taxes divided by net revenue.

(7)	Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation.


	September 30,		June 30,		March 31,		December 31,		September 30,
Capital Ratios	2020		2020		2020		2019		2019
Tier 1 capital (to average assets):
PlainsCapital		10.19%		10.37%		12.06%		11.61%		11.79%
Hilltop		13.03%		12.60%		13.03%		12.71%		12.67%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.64%		14.03%		13.33%		13.45%		13.25%
Hilltop		19.85%		18.46%		15.96%		16.70%		16.15%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.64%		14.03%		13.33%		13.45%		13.25%
Hilltop		20.46%		19.06%		16.38%		17.13%		16.58%
Total capital (to risk-weighted assets):
PlainsCapital		15.49%		14.88%		14.26%		14.13%		13.87%
Hilltop		23.22%		21.82%		17.00%		17.55%		16.95%


	September 30,		June 30,		March 31,		December 31,		September 30,
Non-Performing Assets Portfolio Data	2020		2020		2020		2019		2019
Loans accounted for on a non-accrual basis ($000's) (1):
Commercial real estate		14,079		13,743		23,352		7,308		8,727
Commercial and industrial		38,708		32,259		47,121		15,262		13,313
Construction and land development		528		1,404		1,402		1,316		1,358
1-4 family residential		28,707		20,552		15,237		12,204		12,103
Consumer		53		308		310		26		30
Broker-dealer		—		—		—		—		—
		82,075		68,266		87,422		36,116		35,531

Non-performing loans as a % of total loans		0.78%		0.65%		0.89%		0.38%		0.38%

Other real estate owned ($000's)		25,387		26,602		15,429		18,202		18,738

Other repossessed assets ($000's)		239		315		315		—		—

Non-performing assets ($000's)		107,701		95,183		103,166		54,318		54,269

Non-performing assets as a % of total assets		0.64%		0.56%		0.66%		0.36%		0.37%

Loans past due 90 days or more and still accruing ($000's)		187,105		124,682		101,300		102,707		81,678

Troubled debt restructurings included in accruing loans held for investment ($000's)		1,919		2,025		2,286		2,173		2,222

(1)

Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications. The Bank’s COVID-19 payment deferral programs allow for a deferral of principal and/or interest payments with such deferred principal payments due and payable on maturity date of the existing loan. During the third quarter of 2020, the Bank’s actions included approval of COVID-19 related loan modifications, resulting in active loan modificaitons of approximately $291 million as of September 30, 2020, down from approximately $968 million as of June 30, 2020. The extent to which these measures will impact the Bank is uncertain, and any progression of loans, whether receiving COVID-19 payment deferrals or not, into non-accrual status, during future periods is uncertain and will depend on future developments that cannot be predicted.


	Three Months Ended September 30,
	2020						2019
	Average		Interest		Annualized		Average		Interest		Annualized
	Outstanding		Earned or		Yield or		Outstanding		Earned or		Yield or
Net Interest Margin (Taxable Equivalent) Details (1)	Balance		Paid		Rate		Balance		Paid		Rate
Assets
Interest-earning assets
Loans held for sale	$	2,530,805	$	20,108	3.18	%	$	1,754,975	$	18,178	4.14	%
Loans held for investment, gross ⁽²⁾		7,730,711		84,847	4.32	%		7,167,169		101,402	5.57	%
Investment securities - taxable		1,974,911		11,017	2.23	%		1,815,454		15,733	3.47	%
Investment securities - non-taxable ⁽³⁾		243,716		2,011	3.30	%		240,595		1,694	2.82	%
Federal funds sold and securities purchased under agreements to resell		154,588		10	0.03	%		50,522		251	1.97	%
Interest-bearing deposits in other financial institutions		1,794,652		626	0.14	%		330,968		1,928	2.31	%
Securities borrowed		1,297,112		10,705	3.23	%		1,565,608		21,010	5.25	%
Other		49,701		823	6.59	%		83,379		1,862	8.89	%
Interest-earning assets, gross ⁽³⁾		15,776,196		130,147	3.26	%		13,008,670		162,058	4.92	%
Allowance for credit losses		(156,071)						(55,710)
Interest-earning assets, net		15,620,125						12,952,960
Noninterest-earning assets		1,493,194						1,389,963
Total assets	$	17,113,319					$	14,342,923

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	7,868,100	$	10,700	0.54	%	$	5,943,901	$	18,887	1.26	%
Securities loaned		1,193,497		8,729	2.91	%		1,448,345		17,889	4.90	%
Notes payable and other borrowings		1,259,559		8,500	2.69	%		1,605,598		11,968	2.94	%
Total interest-bearing liabilities		10,321,156		27,929	1.08	%		8,997,844		48,744	2.15	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		3,508,282						2,680,729
Other liabilities		903,571						611,337
Total liabilities		14,733,009						12,289,910
Stockholders’ equity		2,350,900						2,029,511
Noncontrolling interest		29,410						23,502
Total liabilities and stockholders' equity	$	17,113,319					$	14,342,923

Net interest income ⁽³⁾			$	102,218					$	113,314
Net interest spread ⁽³⁾					2.18	%					2.77	%
Net interest margin ⁽³⁾					2.57	%					3.46	%

(1)	Information presented on a consolidated basis and includes discontinued operations and those assets and liabilities classified as held for sale.

(2)	Average balance includes non-accrual loans.

(3)

Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rates for the periods presented. The adjustment to interest income was $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, October 23, 2020. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review third quarter 2020 financial results. Interested parties can access the conference call by dialing 1-877-508-9457 (domestic) or 1-412-317-0789 (international). The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop-holdings.com).

About Hilltop

Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Hilltop Securities Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At September 30, 2020, Hilltop employed approximately 4,800 people and operated approximately 430 locations in 48 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol "HTH." Find more information at Hilltop-Holdings.com, PlainsCapital.com, PrimeLending.com and Hilltopsecurities.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “building,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “probable,” “projects,” “seeks,” “should,” “target,” “view,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (ii) the COVID-19 pandemic and the response of governmental authorities to the pandemic, which have caused and are causing significant harm to the global economy and our business; (iii) the credit risks of lending activities, including our ability to estimate credit losses, as well as the effects of, and trends in, loan delinquencies and write-offs; (iv) risks of participation as a lender in the PPP; (v) changes in the interest rate environment and transitions away from London Interbank Offered Rate; and (vi) risks associated with concentration in real estate related loans. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K, and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.

Source: Hilltop Holdings Inc.

Hilltop (HTH) 8-KHilltop Holdings Inc. Announces Financial Results for Third Quarter 2020