Hilltop Holdings Inc. Announces Financial Results for Third Quarter 2016

Company Release - 10/27/2016 5:05 PM ET

DALLAS--(BUSINESS WIRE)-- Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the third quarter of 2016. Hilltop produced income of $51.9 million, or $0.53 per diluted share, for the third quarter of 2016, compared to $46.9 million, or $0.47 per diluted share, for the third quarter of 2015. Hilltop’s annualized return on average assets and return on average equity for the third quarter of 2016 were 1.69% and 11.41%, respectively, compared to 1.49% and 10.97%, respectively, for the third quarter of 2015.

Hilltop also announced that, for the first time in its history, it will now start paying a quarterly dividend. Hilltop’s Board of Directors authorized a dividend program and declared a quarterly cash dividend of $0.06 per common share, payable on November 30, 2016, to all common stockholders of record as of the close of business on November 15, 2016.

Jeremy Ford, Co-CEO of Hilltop, said, “We are excited to announce that Hilltop’s Board of Directors has approved the initiation of a cash dividend to its stockholders. Our strong capital position and consistent earnings generation enable us to invest in future acquisitions and organic growth, while also returning cash to our stockholders.”

Mr. Ford continued, “During the quarter, we also began implementing the previously announced changes to our organization. The new structure and addition of William Furr as Hilltop CFO create a solid foundation to support the operations of our subsidiary companies and ensure Hilltop has the right platform for future growth.”

Alan White, Co-CEO of Hilltop, added, “Our strong third quarter earnings highlight the diversity of our franchise and the earnings power of our collective business. PlainsCapital Bank delivered strong commercial loan growth, PrimeLending produced outstanding results by growing originations and expanding margins, HilltopSecurities generated solid revenue growth in its core businesses and National Lloyds experienced seasonally lower claims volumes.”

Third Quarter 2016 Highlights for Hilltop:

  • Hilltop’s total assets were $12.4 billion at September 30, 2016, compared to $13.1 billion at June 30, 2016;
  • Hilltop’s common equity increased by $53.2 million from June 30, 2016 to $1.8 billion at September 30, 2016;
  • Non-covered loans1 held for investment, net of allowance for loan losses, increased by 3.7% to $5.6 billion and covered loans1, net of allowance for loan losses, decreased by 9.3% to $292.0 million from June 30, 2016 to September 30, 2016;
  • Non-covered non-performing loans increased to $25.2 million, or 0.34% of total non-covered loans, at September 30, 2016, compared to $23.4 million, or 0.33% of total non-covered loans, at June 30, 2016;
  • Energy classified and criticized loans were $39.4 million at September 30, 2016, down from $41.5 million at June 30, 2016;
  • Loans held for sale increased by 7.9% to $1.7 billion from June 30, 2016 to September 30, 2016;
  • Total deposits were $7.0 billion at September 30, 2016, compared to $7.1 billion at June 30, 2016;
  • Hilltop maintains strong capital levels with a Tier 1 Leverage Ratio2 of 13.41% and Total Capital Ratio of 18.82% at September 30, 2016;
  • Hilltop’s net interest margin3 decreased to 3.65% for the third quarter of 2016, from 3.77% in the second quarter of 2016;
  • The provision for loan losses was $4.0 million during the third quarter of 2016, compared to $28.9 million in the second quarter of 2016;
    • The second quarter of 2016 included an isolated, $24.5 million charge-off as a result of irregularities in connection with a single loan that is currently in default, representing the entire outstanding principal balance of the loan;
  • For the third quarter of 2016, noninterest income was $354.5 million, compared to $296.5 million in the third quarter of 2015, a 19.6% increase;
  • For the third quarter of 2016, noninterest expense was $364.1 million, compared to $333.5 million in the third quarter of 2015, a 9.2% increase; and
  • In connection with the SWS Merger, during the third quarter of 2016, Hilltop incurred $5.4 million in pre-tax transaction and integration costs, consisting of $1.0 million in the broker-dealer segment and $4.4 million within corporate.

___________________________

1

  “Covered loans” refer to loans acquired in the FNB Transaction that are subject to loss-share agreements with the FDIC, while all other loans are referred to as “non-covered loans.”

2

Based on the end of period Tier 1 capital divided by total average assets during the third quarter of 2016, 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)   2016     2016     2016     2015     2015  
Cash and due from banks $ 528,519 $ 583,984 $ 512,103 $ 652,036 $ 526,692
Federal funds sold 40,419 29,677 15,406 17,409 24,861
Securities purchased under agreements to resell 138,284 149,474 96,646 105,660 83,889
Assets segregated for regulatory purposes 173,840 120,214 120,714 158,613 228,251
Securities:
Trading, at fair value 402,104 305,418 368,425 214,146 292,418
Available for sale, at fair value 563,720 517,784 666,328 673,706 726,132
Held to maturity, at amortized cost   365,934     354,443     310,478     332,022     305,316  
1,331,758 1,177,645 1,345,231 1,219,874 1,323,866
Loans held for sale 1,673,069 1,550,475 1,344,333 1,533,678 1,354,107
Non-covered loans, net of unearned income 5,674,655 5,472,446 5,366,065 5,220,040 4,999,529
Allowance for non-covered loan losses   (52,625 )   (51,013 )   (48,450 )   (45,415 )   (42,989 )
Non-covered loans, net 5,622,030 5,421,433 5,317,615 5,174,625 4,956,540
 
Covered loans, net of allowance for covered loan losses 292,031 322,073 346,169 378,762 420,547
Broker-dealer and clearing organization receivables 1,340,617 2,257,480 1,370,622 1,362,499 2,111,864
Premises and equipment, net 190,645 189,511 198,414 200,618 204,273
FDIC indemnification asset 73,351 74,460 80,522 91,648 92,902
Covered other real estate owned 61,988 67,634 78,890 99,090 106,024
Other assets 657,805 832,344 601,181 565,813 644,916
Goodwill 251,808 251,808 251,808 251,808 251,808
Other intangible assets, net   47,112     49,690     52,274     54,868     58,916  
Total assets $ 12,423,276   $ 13,077,902   $ 11,731,928   $ 11,867,001   $ 12,389,456  
 
Deposits:
Non-interest bearing $ 2,232,813 $ 2,280,108 $ 2,233,608 $ 2,235,436 $ 2,173,890
Interest bearing   4,797,772     4,846,705     4,750,567     4,717,247     4,646,859  
Total deposits 7,030,585 7,126,813 6,984,175 6,952,683 6,820,749
Broker-dealer and clearing organization payables 1,251,839 2,111,994 1,284,016 1,338,305 2,045,604
Short-term borrowings 1,265,022 1,012,862 832,921 947,373 910,490
Securities sold, not yet purchased, at fair value 164,633 178,235 165,704 130,044 156,775
Notes payable 313,313 319,636 232,190 238,716 243,556
Junior subordinated debentures 67,012 67,012 67,012 67,012 67,012
Other liabilities   481,504     464,904     405,899     454,743     428,442  
Total liabilities 10,573,908 11,281,456 9,971,917 10,128,876 10,672,628
 
Common stock 985 985 986 989 989
Additional paid-in capital 1,570,025 1,568,053 1,567,150 1,577,270 1,574,769
Accumulated other comprehensive income 8,039 8,782 6,878 2,629 4,592
Retained earnings 266,048 214,116 183,042 155,475 134,748
Deferred compensation employee stock trust, net 900 938 1,020 1,034 1,182
Employee stock trust   (309 )   (347 )   (428 )   (443 )   (590 )
Total Hilltop stockholders' equity 1,845,688 1,792,527 1,758,648 1,736,954 1,715,690
Noncontrolling interests   3,680     3,919     1,363     1,171     1,138  
Total stockholders' equity   1,849,368     1,796,446     1,760,011     1,738,125     1,716,828  
Total liabilities & stockholders' equity $ 12,423,276   $ 13,077,902   $ 11,731,928   $ 11,867,001   $ 12,389,456  
 
 
    Three Months Ended
Consolidated Income Statements September 30,     June 30,     March 31,     December 31,     September 30,
(in 000's, except per share data) 2016 2016 2016 2015 2015
Interest income:
Loans, including fees $ 97,590 $ 98,468 $ 91,533 $ 94,689 $ 111,315
Securities borrowed 9,037 6,326 7,589 11,242 10,116
Securities:
Taxable 5,935 6,834 6,367 7,046 6,262
Tax-exempt 1,518 1,537 1,637 1,647 1,683
Other   1,183   1,037     1,028   1,338   1,169
Total interest income 115,263 114,202 108,154 115,962 130,545
 
Interest expense:
Deposits 3,996 4,037 3,839 3,589 3,719
Securities loaned 6,954 4,916 5,987 8,388 7,110
Short-term borrowings 1,497 1,392 1,085 1,218 1,189
Notes payable 2,793 2,618 2,582 2,661 2,524
Junior subordinated debentures 673 655 645 616 605
Other   180   187     176   177   187
Total interest expense 16,093 13,805 14,314 16,649 15,334
 
Net interest income 99,170 100,397 93,840 99,313 115,211
Provision for loan losses   3,990   28,876     3,407   4,277   5,593
Net interest income after provision for loan losses 95,180 71,521 90,433 95,036 109,618
 
Noninterest income:
Net realized gains (losses) on securities (46 ) 46
Net gains from sale of loans and other mortgage production income 175,412 167,012 127,297 114,080 137,303
Mortgage loan origination fees 26,807 25,797 18,813 19,514 22,647
Net insurance premiums earned 38,747 38,721 39,733 41,001 41,196
Securities commissions and fees 39,722 40,442 38,317 37,459 39,070
Investment and securities advisory fees and commissions 31,129 29,354 23,819 33,678 27,667
Other   42,641   44,725     29,350   31,195   28,586
Total noninterest income 354,458 346,005 277,375 276,927 296,469
 
Noninterest expense:
Employees' compensation and benefits 225,194 217,398 182,761 182,472 200,620
Loss and loss adjustment expenses 16,055 37,211 21,959 21,630 17,335
Policy acquisition and other underwriting expenses 11,064 11,316 11,252 11,928 11,784
Occupancy and equipment, net 27,460 26,971 27,833 30,285 29,341
Other   84,360   74,469     81,384   92,406   74,422
Total noninterest expense 364,133 367,365 325,189 338,721 333,502
 
Income before income taxes 85,505 50,161 42,619 33,242 72,585
Income tax expense   33,017   18,439     14,423   12,020   25,338
Net income 52,488 31,722 28,196 21,222 47,247
Less: Net income attributable to noncontrolling interest   556   648     629   495   353
Income attributable to Hilltop $ 51,932 $ 31,074   $ 27,567 $ 20,727 $ 46,894
 
Earnings per common share:
Basic $ 0.53 $ 0.32 $ 0.28 $ 0.21 $ 0.47
Diluted $ 0.53 $ 0.32 $ 0.28 $ 0.21 $ 0.47
Weighted average shares outstanding:
Basic 98,490 98,457 98,153 98,412 98,676
Diluted 98,625 98,586 98,669 99,266 99,556
 
 
    Three Months Ended September 30, 2016
Segment Results         Mortgage             All Other and     Hilltop
(in 000's) Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated
Net interest income (expense) $ 90,549 $ 7,823 $ (3,076 ) $ 716 $ (1,854 ) $ 5,012 $ 99,170
Provision for loan losses 4,179 (189 ) 3,990
Noninterest income 12,711 103,511 202,560 41,170 (5,494 ) 354,458
Noninterest expense   61,536   94,094     168,303     30,415   10,041     (256 )   364,133
Income (loss) before income taxes $ 37,545 $ 17,429   $ 31,181   $ 11,471 $ (11,895 ) $ (226 ) $ 85,505
 
 
    Three Months Ended
September 30,     June 30,     March 31,     December 31,     September 30,
Selected Financial Data 2016 2016 2016 2015 2015
 

Hilltop Consolidated:

Return on average stockholders' equity 11.41 % 7.07 % 6.32 % 4.70 % 10.97 %
Return on average assets 1.69 % 1.05 % 0.96 % 0.68 % 1.49 %
Net interest margin (1) 3.65 % 3.77 % 3.67 % 3.70 % 4.18 %
Net interest margin (taxable equivalent) (2):
As reported 3.67 % 3.80 % 3.70 % 3.73 % 4.20 %
Impact of purchase accounting 64 bps 72 bps 74 bps 79 bps 137 bps
Book value per common share ($) 18.73 18.20 17.84 17.56 17.35
Shares outstanding, end of period (000's) 98,541 98,498 98,585 98,896 98,893
 

Banking Segment:

Net interest margin (1) 4.50 % 4.85 % 4.70 % 4.90 % 5.77 %
Net interest margin (taxable equivalent) (2):
As reported 4.53 % 4.87 % 4.73 % 4.92 % 5.79 %
Impact of purchase accounting 90 bps 104 bps 103 bps 119 bps 210 bps
Accretion of discount on loans ($000's) 15,969 17,344 16,631 19,503 36,000
Non-covered net charge-offs (recoveries) ($000's) 3,108 26,130 650 2,088 1,775
Return on average assets 1.09 % 0.66 % 0.98 % 1.07 % 1.64 %
Fee income ratio 12.31 % 12.67 % 13.08 % 13.83 % 11.64 %
Efficiency ratio 59.59 % 52.32 % 64.97 % 62.78 % 50.56 %
Employees' compensation and benefits ($000's) 31,167 30,847 29,125 27,456 29,881
 

Broker-Dealer Segment:

Employees' compensation and benefits ($000's) 68,051 63,976 57,816 62,868 64,099
Variable compensation expense ($000's) 42,446 38,750 29,431 35,298 36,157
Compensation as a % of net revenue 61.1 % 58.0 % 65.7 % 63.2 % 69.6 %
Pre-tax margin 15.65 % 16.58 % 4.28 % 3.70 % 1.58 %
 

Mortgage Origination Segment:

Mortgage loan originations - volume ($000's):
Home purchases 3,191,851 3,261,386 2,050,825 2,344,328 2,945,626
Refinancings 1,300,702   889,078   878,291   721,308   693,572  
Total mortgage loan originations - volume 4,492,553 4,150,464 2,929,116 3,065,636 3,639,198
Mortgage loan sales - volume ($000's) 4,349,794 3,964,190 3,117,605 2,888,903 3,699,047
Mortgage servicing rights asset ($000's) (3) 43,751 33,491 39,863 52,285 47,527
Employees' compensation and benefits ($000's) 120,548 117,537 90,690 87,387 101,490
Variable compensation expense ($000's) 75,271 74,604 51,689 48,706 64,582
 

Insurance Segment:

Loss and LAE ratio 41.4 % 96.1 % 55.3 % 52.8 % 42.1 %
Expense ratio 33.6 % 33.9 % 33.2 % 34.2 % 33.3 %
Combined ratio 75.0 % 130.0 % 88.5 % 87.0 % 75.4 %
Employees' compensation and benefits ($000's) 2,401 2,304 2,178 2,180 2,182

___________________________

(1)   Net interest margin is defined as net interest income divided by average interest-earning assets.
(2) Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Annualized taxable equivalent adjustments are based on a 35% federal income tax rate. 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. For the periods presented, the taxable equivalent adjustments to interest income for Hilltop Consolidated were $0.5 million, $0.6 million, $0.7 million, $0.8 million and $0.8 million, respectively, and for the Banking Segment were $0.4 million, $0.5 million, $0.4 million, $0.4 million and $0.4 million, respectively.
(3) 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 2016 2016 2016 2015 2015
Tier 1 capital (to average assets):
Bank 12.65 % 12.72 % 12.70 % 13.22 % 12.77 %
Hilltop 13.41 % 13.18 % 13.35 % 12.65 % 12.01 %
Common equity Tier 1 capital (to risk-weighted assets):
Bank 15.15 % 14.71 % 15.10 % 16.23 % 17.36 %
Hilltop 17.80 % 16.67 % 17.56 % 17.87 % 18.36 %
Tier 1 capital (to risk-weighted assets):
Bank 15.15 % 14.77 % 15.12 % 16.25 % 17.36 %
Hilltop 18.37 % 17.26 % 18.17 % 18.48 % 18.89 %
Total capital (to risk-weighted assets):
Bank 15.90 % 15.51 % 15.87 % 16.99 % 18.13 %
Hilltop 18.82 % 17.69 % 18.60 % 18.89 % 19.29 %
 
 
    September 30,     June 30,     March 31,     December 31,     September 30,
Non-Covered Non-Performing Loans Portfolio Data 2016 2016 2016 2015 2015
 
Non-covered loans accounted for on a non-accrual basis ($000's):
Commercial and industrial 19,651 18,412 19,179 17,764 22,302
Real estate 4,817 4,777 7,802 7,160 7,087
Construction and land development 703 139 102 114 118
Consumer 50 61 1 7 14
Broker-dealer          
25,221 23,389 27,084 25,045 29,521
 
Non-covered non-performing loans as a % of total non-covered loans 0.34 % 0.33 % 0.40 % 0.37 % 0.46 %
 
Non-covered other real estate owned ($000's) 3,063 2,656 543 394 511
 
Other repossessed assets ($000's) 1,654 30
 
Non-covered non-performing assets ($000's) 29,938 26,045 27,657 25,439 30,032
 
Non-covered non-performing assets as a % of total assets 0.24 % 0.20 % 0.24 % 0.21 % 0.24 %
 
Non-covered non-PCI loans past due 90 days or more and still accruing ($000's) 41,824 50,032 51,943 50,776 37,435
 
Troubled debt restructurings included in accruing non-covered loans ($000's) 1,216 1,235 1,409 1,418 3,664
 
 
    Three Months Ended September 30,
2016     2015
Average     Interest     Annualized Average     Interest     Annualized
Outstanding Earned or Yield or Outstanding Earned or Yield or
Balance Paid Rate Balance Paid Rate
Assets
Interest-earning assets
Loans, gross (1) $ 7,315,433 $ 97,590 5.26 % $ 6,636,328 $ 111,315 6.64 %
Investment securities - taxable 999,394 5,915 2.36 % 1,110,813 6,243 2.24 %
Investment securities - non-taxable (2) 296,013 2,052 2.77 % 253,170 2,439 3.85 %
Federal funds sold and securities purchased under agreements to resell 185,533 52 0.11 % 122,826 20 0.07 %
Interest-bearing deposits in other financial institutions 478,560 567 0.47 % 442,689 237 0.21 %
Other   1,542,155     9,622 2.44 %   2,381,905     11,047 1.82 %
Interest-earning assets, gross 10,817,088 115,798 4.22 % 10,947,731 131,301 4.74 %
Allowance for loan losses   (53,470 )   (43,446 )
Interest-earning assets, net 10,763,618 10,904,285
Noninterest-earning assets   1,588,921     1,706,720  
Total assets $ 12,352,539   $ 12,611,005  
 
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits $ 4,851,952 $ 3,996 0.33 % $ 4,709,244 $ 3,719 0.31 %
Notes payable and other borrowings   2,729,466     12,097 1.76 %   3,385,804     11,615 1.36 %
Total interest-bearing liabilities 7,581,418 16,093 0.84 % 8,095,048 15,334 0.75 %
Noninterest-bearing liabilities
Noninterest-bearing deposits 2,251,744 2,177,319
Other liabilities   705,985     641,456  
Total liabilities 10,539,147 10,913,823
Stockholders’ equity 1,810,266 1,696,396
Noncontrolling interest   3,126     786  
Total liabilities and stockholders' equity $ 12,352,539   $ 12,611,005  
   
Net interest income (2) $ 99,705 $ 115,967
Net interest spread (2) 3.38 % 3.99 %
Net interest margin (2) 3.67 % 4.20 %

___________________________

(1)   Average balance includes non-accrual loans.
(2) Annualized taxable equivalent adjustments are based on a 35% federal income tax rate. The taxable equivalent adjustments to interest income were $0.5 million and $0.8 million for the three months ended September 30, 2016 and 2015, respectively.
 
 
    September 30,     June 30,     March 31,     December 31,     September 30,
PlainsCapital Bank - Energy Exposure 2016 2016 2016 2015 2015
 

Select Energy Statistics

Outstanding energy loan balance ($M) 168.8 223.6 233.5 179.8 194.9
Energy unfunded commitments ($M) 120.7 88.5 102.9 108.7 110.0
Energy loans as a % of total loans 3.1 % 4.2 % 4.5 % 3.6 % 4.0 %
Classified and criticized energy loans ($M):
Criticized energy loans 1.8 12.7 13.0 3.4 0.0
Performing classified energy loans 24.2 22.1 33.4 25.7 27.0
Non-performing classified energy loans 13.4   6.7   4.9   3.6   2.8  
39.4 41.5 51.3 32.7 29.8
 
Unimpaired energy reserves ($M) 10.0 9.8 9.2 7.3 6.5
Energy reserves as a % of energy loans 6.7 % 4.7 % 4.3 % 4.4 % 3.4 %
Energy NCOs ($M) 1.0 0.4 0.2 1.2 1.1
 

Energy Portfolio Breakdown

Exploration and production 13 % 10 % 13 % 19 % 20 %
Services:
Field services 26 % 22 % 22 % 21 % 15 %
Pipeline construction 21 % 15 % 15 % 23 % 25 %
47 % 37 % 37 % 44 % 40 %
Midstream:
Distribution 21 % 38 % 37 % 25 % 25 %
Transportation 11 % 9 % 7 % 7 % 7 %
32 % 47 % 44 % 32 % 32 %
Other:
Wholesalers 1 % 1 % 1 % 2 % 2 %
Equipment rentals 0 % 0 % 0 % 1 % 5 %
Equipment wholesalers 7 % 5 % 5 % 2 % 1 %
Total 100 % 100 % 100 % 100 % 100 %
 
 

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, October 28, 2016. Hilltop Co-CEOs Jeremy B. Ford and Alan B. White and other key management members will discuss results for the third quarter of 2016. 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. Through Hilltop Holdings’ other wholly owned subsidiary, National Lloyds Corporation, it provides property and casualty insurance through two insurance companies, National Lloyds Insurance Company and American Summit Insurance Company. At September 30, 2016, Hilltop employed approximately 5,500 people and operated approximately 450 locations in 44 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, Nationallloydsinsurance.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 business strategy, our financial condition, our efforts to make strategic acquisitions, the integration of the operations acquired in the SWS Merger, our revenue, our liquidity and sources of funding, market trends, operations and business, stock repurchases, dividend payments, expectations concerning mortgage loan origination volume, expected losses on covered loans and related reimbursements from the Federal Deposit Insurance Corporation (“FDIC”), expected levels of refinancing as a percentage of total loan origination volume, projected losses on mortgage loans originated, anticipated changes in our revenues or earnings, the effects of government regulation applicable to our operations, the appropriateness of our allowance for loan losses and provision for loan losses, the collectability of loans and the outcome of litigation, our other plans, objectives, strategies, expectations and intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “might,” “plan,” “probable,” “projects,” “seeks,” “should,” “target,” “view” 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 from those set forth in the forward-looking statements: (i) our ability to estimate loan losses; (ii) changes in the default rate of our loans; (iii) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (iv) risks associated with concentration in real estate related loans; (v) risks associated with merger and acquisition integration, including our ability to promptly and effectively integrate our businesses with those acquired in the SWS Merger and achieve the anticipated synergies and cost savings in connection therewith, as well as the diversion of management time on acquisition- and integration-related issues; (vi) severe catastrophic events in Texas and other areas of the southern United States; (vii) changes in the interest rate environment; (viii) cost and availability of capital; (vix) effectiveness of our data security controls in the face of cyber attacks; (x) changes in state and federal laws, regulations or policies affecting one or more of the our business segments, including changes in regulatory fees, deposit insurance premiums, capital requirements and the Dodd-Frank Wall Street Reform and Consumer Protection Act; (xi) approval of new, or changes in, accounting policies and practices; (xii) changes in key management; (xiii) competition in our banking, broker-dealer, mortgage origination and insurance segments from other banks and financial institutions, as well as investment banking and financial advisory firms, mortgage bankers, asset-based non-bank lenders, government agencies and insurance companies; (xiv) our ability to obtain reimbursements for losses on acquired loans under loss-share agreements with the FDIC to the extent the FDIC determines that we did not adequately manage the covered loan portfolio; (xv) failure of our insurance segment reinsurers to pay obligations under reinsurance contracts; and (xvi) our ability to use excess cash in an effective manner, including the execution of successful acquisitions. For further discussion of such factors, see the risk factors described in the Hilltop Annual Report on Form 10-K for the year ended December 31, 2015 and other reports filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.

Hilltop Holdings Inc.
Isabell Novakov, 214-252-4029
inovakov@hilltop-holdings.com

Source: Hilltop Holdings Inc.