Hilltop Holdings Inc. Announces Financial Results for First Quarter 2020

DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the first quarter of 2020. Hilltop produced income from continuing operations to common stockholders of $46.5 million, or $0.51 per diluted share, for the first quarter of 2020, compared to $33.4 million, or $0.36 per diluted share, for the first quarter of 2019. After income from discontinued operations related to the insurance segment, income applicable to common stockholders was $49.6 million, or $0.55 per diluted share, for the first quarter of 2020, compared to $38.8 million, or $0.41 per diluted share, for the first quarter of 2019. Hilltop’s financial results from continuing operations for the first quarter of 2020 include a significant build in the allowance for credit losses associated with the impact of economic forecast modeling implications attributable to the market disruption and economic uncertainties caused by COVID-19, while the first quarter of 2019 results included the costs associated with the significant leadership changes and other efficiency initiative-related charges which, in the aggregate, totaled $8.7 million before income taxes.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.09 per common share, payable on May 29, 2020, to all common stockholders of record as of the close of business on May 15, 2020. Additionally, under the stock repurchase program approved by the Hilltop Board of Directors in January 2020, Hilltop paid $15.0 million to repurchase 700,901 shares at a weighted average price of $21.32 during the first quarter of 2020. These shares were returned to the pool of authorized but unissued shares of common stock.

In light of the uncertain outlook for 2020 due to the COVID-19 pandemic, and Hilltop’s commitment to maintain strong capital and liquidity to meet the needs of its customers and communities during this exceptional period of economic uncertainty, Hilltop’s Board of Directors has suspended its stock repurchase program. Hilltop’s Board of Directors has the ability to reinstate the share repurchase program at its discretion as circumstances warrant.

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, “In this unprecedented time, I am most proud of our teammates across our franchise as they have shown compassion, focus and certainly resilience during very stressful and challenging circumstances. We are focused first and foremost on the safety and well-being of our team and our clients. While most of our associates continue to work remotely, they remain committed to serving our clients. The mortgage origination team locked over $3.7 billion in new mortgages during March, a record month for our company, while our bank team will have processed and funded over 3,100 PPP loans during the month of April. Further, in our securities business we experienced near record ticket volumes in February and March as clients worked to reposition their portfolios given the volatility created from COVID-19. National Lloyds produced very strong underwriting results, with first quarter underwriting income up approximately 60% relative to the first quarter last year. Additionally, the sale of National Lloyds to Align Financial continues to progress, and we believe that it remains on track for a second quarter 2020 closing.

Hilltop generated $100 million of pre-provision net revenue, or PPNR, from continuing operations for the quarter, demonstrating the strength of our business model in a very challenging environment. The mortgage origination business generated $40 million of pre-tax income for the quarter, as mortgage origination volumes surged and market rates declined. In the securities business, we successfully traded through periods of significant market volatility and illiquidity to produce $18 million of pre-tax income in the quarter, which highlights our strong risk management and our enhanced focus on hedging and inventory management. During the quarter, PlainsCapital Bank generated $46 million of PPNR which was largely offset by the impact of higher provision expense resulting both from credit migrations and the current economic outlook reflecting the impact of COVID-19.”

First Quarter 2020 Highlights for Hilltop:

• In January 2020, Hilltop adopted the current expected credit loss (CECL) model which, among other things:
  • Increased credit reserves by $17.3 million, with net reduction to retained earnings by $5.7 million when adopted on January 1, 2020; and
  • Reflects expected credit losses over the expected life of the assessed portfolios and takes into account forecasts of expected future macroeconomic conditions.
• The provision for credit losses was $34.5 million during the first quarter of 2020, compared to $6.9 million in the fourth quarter of 2019;
  • This significant increase in the provision for credit losses during the first quarter 2020 was primarily associated with the increase in the expected lifetime credit losses under CECL on both individually and collectively evaluated loans within the portfolio attributable to the market disruption and related economic uncertainties caused by COVID-19.
• Hilltop’s consolidated annualized return on average assets and return on average equity for the first quarter of 2020 were 1.47% and 9.38%, respectively, compared to 1.21% and 8.04%, respectively, for the first quarter of 2019;
• Hilltop’s book value per common share increased to $23.71 at March 31, 2020, compared to $23.20 at December 31, 2019;
• Hilltop’s total assets were $15.7 billion at March 31, 2020, compared to $15.2 billion at December 31, 2019;
  • Included $249.8 million at March 31, 2020 and $248.4 million at December 31, 2019 of assets classified as held for sale associated with the insurance segment.
• Loans¹, net of allowance for credit losses, remained stable at $6.7 billion compared to December 31, 2019;
• Non-performing loans were $87.4 million, or 0.89% of total loans at March 31, 2020, compared to $36.1 million, or 0.38% of total loans, at December 31, 2019;
• Loans held for sale increased by 15.5% from December 31, 2019 to $2.4 billion at March 31, 2020;
• Total deposits were $9.9 billion at March 31, 2020, compared to $9.0 billion at December 31, 2019;
• Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio² of 13.03% and a Common Equity Tier 1 Capital Ratio of 15.96% at March 31, 2020;
  • Ratios reflect Hilltop’s decision to elect the transition option as recently 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 margin³ increased to 3.41% for the first quarter of 2020, compared to 3.30% in the fourth quarter of 2019;
• For the first quarter of 2020, noninterest income from continuing operations was $271.7 million, compared to $216.0 million in the first quarter of 2019, a 25.8% increase;
• For the first quarter of 2020, noninterest expense from continuing operations was $281.9 million, compared to $278.7 million in the first quarter of 2019, a 1.1% increase; and
• Hilltop’s effective tax rate from continuing operations was 23.1% during the first quarter of 2020, compared to 22.8% during the same period in 2019.

Discontinued Operations

In January 2020, Hilltop announced the pending sale of its insurance segment, National Lloyds Corporation, for a cash purchase price of $150.0 million, subject to post closing adjustment. The transaction is subject to customary closing conditions, including required regulatory approvals, and is expected to close during the second quarter of 2020. Insurance segment results have been presented as discontinued operations and its assets and liabilities have been classified as held for sale for all periods presented. Income from discontinued operations, net of income taxes, was $3.2 million, or $0.04 per diluted share, for the first quarter of 2020, compared to $5.4 million, or $0.05 per diluted share, for the first 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 loans, net of allowance for credit losses, of $505.9 million and $576.5 million at March 31, 2020 and December 31, 2019, 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	March 31,			December 31,			September 30,			June 30,			March 31,
(in 000's)	2020			2019			2019			2019			2019
Cash and due from banks	$	524,370		$	433,626		$	281,445		$	303,424		$	273,589
Federal funds sold		401			394			423			521			438
Assets segregated for regulatory purposes		178,805			157,436			83,878			151,271			156,851
Securities purchased under agreements to resell		23,356			59,031			49,998			50,660			65,205
Securities:
Trading, at fair value		393,581			689,576			707,268			601,524			703,295
Available for sale, at fair value, net		972,318			911,493			915,334			916,519			924,699
Held to maturity, at amortized cost, net		355,110			386,326			371,361			365,905			369,865
Equity, at fair value		107			166			164			150			158
		1,721,116			1,987,561			1,994,127			1,884,098			1,998,017
Loans held for sale		2,433,407			2,106,361			1,984,231			1,609,477			1,059,280
Loans held for investment, net of unearned income		7,345,250			7,381,400			7,321,208			7,202,604			7,011,679
Allowance for credit losses		(106,739	)		(61,136	)		(55,604	)		(55,177	)		(58,809	)
Loans held for investment, net		7,238,511			7,320,264			7,265,604			7,147,427			6,952,870
Broker-dealer and clearing organization receivables		1,838,789			1,780,280			1,731,979			1,707,249			1,651,199
Premises and equipment, net		215,261			210,375			203,601			198,266			199,066
Operating lease right-of-use assets		113,395			114,320			119,035			120,965			105,877
Other assets		876,615			460,258			578,422			547,768			540,353
Goodwill		267,447			267,447			267,447			267,447			267,447
Other intangible assets, net		25,019			26,666			28,432			30,308			32,271
Assets held for sale		249,758			248,429			248,407			246,989			246,907
Total assets	$	15,706,250		$	15,172,448		$	14,837,029		$	14,265,870		$	13,549,370
Deposits:
Noninterest-bearing	$	2,865,192		$	2,769,556		$	2,732,325		$	2,598,253		$	2,490,144
Interest-bearing		7,082,297			6,262,658			5,998,547			5,864,826			5,807,975
Total deposits		9,947,489			9,032,214			8,730,872			8,463,079			8,298,119
Broker-dealer and clearing organization payables		1,259,181			1,605,518			1,546,163			1,531,891			1,490,227
Short-term borrowings		1,329,948			1,424,010			1,502,755			1,338,893			914,525
Securities sold, not yet purchased, at fair value		22,768			43,817			59,249			45,447			69,354
Notes payable		244,042			256,269			217,841			204,423			197,872
Operating lease liabilities		124,123			125,619			128,295			129,858			115,508
Junior subordinated debentures		67,012			67,012			67,012			67,012			67,012
Other liabilities		408,224			348,519			355,629			284,136			236,551
Liabilities held for sale		139,730			140,674			145,786			149,326			145,071
Total liabilities		13,542,517			13,043,652			12,753,602			12,214,065			11,534,239
Common stock		901			906			906			928			938
Additional paid-in capital		1,437,301			1,445,233			1,441,604			1,473,599			1,491,585
Accumulated other comprehensive income (loss)		20,939			11,419			12,305			7,862			(1,062	)
Retained earnings		676,946			644,860			602,835			544,275			499,452
Deferred compensation employee stock trust, net		774			776			789			788			827
Employee stock trust		(150	)		(155	)		(170	)		(171	)		(213	)
Total Hilltop stockholders' equity		2,136,711			2,103,039			2,058,269			2,027,281			1,991,527
Noncontrolling interests		27,022			25,757			25,158			24,524			23,604
Total stockholders' equity		2,163,733			2,128,796			2,083,427			2,051,805			2,015,131
Total liabilities & stockholders' equity	$	15,706,250		$	15,172,448		$	14,837,029		$	14,265,870		$	13,549,370

	Three Months Ended
Consolidated Income Statements	March 31,		December 31,		September 30,		June 30,			March 31,
(in 000's, except per share data)	2020		2019		2019		2019			2019
Interest income:
Loans, including fees	$	111,168	$	115,696	$	119,580	$	114,325		$	110,870
Securities borrowed		13,327		16,196		21,010		15,517			16,859
Securities:
Taxable		15,695		15,174		14,885		13,778			14,656
Tax-exempt		1,610		1,572		1,576		1,513			1,498
Other		3,075		3,180		3,889		3,867			5,055
Total interest income		144,875		151,818		160,940		149,000			148,938
Interest expense:
Deposits		15,124		17,480		18,887		18,036			17,106
Securities loaned		11,277		13,989		17,889		13,470			14,738
Short-term borrowings		4,744		6,244		8,166		6,897			5,471
Notes payable		2,418		2,337		2,265		2,165			2,181
Junior subordinated debentures		850		909		955		986			1,001
Other		126		99		132		162			152
Total interest expense		34,539		41,058		48,294		41,716			40,649
Net interest income		110,336		110,760		112,646		107,284			108,289
Provision for (reversal of) credit losses		34,549		6,880		47		(672	)		951
Net interest income after provision for (reversal of) credit losses		75,787		103,880		112,599		107,956			107,338
Noninterest income:
Net gains from sale of loans and other mortgage production income		150,486		120,573		157,050		131,173			96,139
Mortgage loan origination fees		28,554		36,939		37,782		33,409			21,873
Securities commissions and fees		40,069		33,205		34,426		34,142			35,969
Investment and securities advisory fees and commissions		23,180		32,083		28,685		22,859			20,160
Other		29,424		40,846		48,562		55,120			41,822
Total noninterest income		271,713		263,646		306,505		276,703			215,963
Noninterest expense:
Employees' compensation and benefits		196,356		212,498		232,449		212,959			186,696
Occupancy and equipment, net		19,522		30,617		27,002		27,938			27,779
Professional services		14,798		17,211		15,472		13,773			14,109
Other		51,225		47,542		46,263		49,418			50,163
Total noninterest expense		281,901		307,868		321,186		304,088			278,747
Income from continuing operations before income taxes		65,599		59,658		97,918		80,571			44,554
Income tax expense		15,148		13,579		21,472		18,526			10,137
Income from continuing operations		50,451		46,079		76,446		62,045			34,417
Income (loss) from discontinued operations, net of income taxes		3,151		5,623		5,261		(2,254	)		5,360
Net income		53,602		51,702		81,707		59,791			39,777
Less: Net income attributable to noncontrolling interest		3,966		2,426		2,289		1,980			991
Income attributable to Hilltop	$	49,636	$	49,276	$	79,418	$	57,811		$	38,786
Earnings per common share:
Basic:
Earnings from continuing operations	$	0.51	$	0.48	$	0.81	$	0.64		$	0.36
Earnings (losses) from discontinued operations		0.04		0.06		0.06		(0.02	)		0.05
	$	0.55	$	0.54	$	0.87	$	0.62		$	0.41
Diluted:
Earnings from continuing operations	$	0.51	$	0.48	$	0.81	$	0.64		$	0.36
Earnings (losses) from discontinued operations		0.04		0.06		0.05		(0.02	)		0.05
	$	0.55	$	0.54	$	0.86	$	0.62		$	0.41
Cash dividends declared per common share	$	0.09	$	0.08	$	0.08	$	0.08		$	0.08
Weighted average shares outstanding:
Basic		90,509		90,606		91,745		93,399			93,669
Diluted		90,550		90,711		91,824		93,418			93,669

	Three Months Ended March 31, 2020
Segment Results					Mortgage							All Other and			Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Insurance		Corporate			Eliminations			Consolidated
Net interest income (expense)	$	93,923	$	13,173	$	368	$	—	$	(1,656	)	$	4,528		$	110,336
Provision for credit losses		34,275		274		—		—		—			—			34,549
Noninterest income		8,771		86,209		178,968		—		2,309			(4,544	)		271,713
Noninterest expense		56,967		80,939		139,552		—		4,853			(410	)		281,901
Income (loss) before taxes from continuing operations		11,452		18,169		39,784		—		(4,200	)		394			65,599
Income before taxes from discontinued operations		—		—		—		4,014		—			—			4,014
	$	11,452	$	18,169	$	39,784	$	4,014	$	(4,200	)	$	394		$	69,613

	Three Months Ended
	March 31,			December 31,			September 30,			June 30,		March 31,
Selected Financial Data	2020			2019			2019			2019		2019
Hilltop Consolidated (1):
Return on average stockholders' equity		9.38%			9.43%			15.55%			11.63%		8.04%
Return on average assets		1.47%			1.40%			2.26%			1.74%		1.21%
Net interest margin (2)		3.41%			3.30%			3.45%			3.49%		3.69%
Net interest margin (taxable equivalent) (3):
As reported		3.42%			3.31%			3.46%			3.49%		3.70%
Impact of purchase accounting		22 bps			19 bps			26 bps			23 bps		32 bps
Book value per common share ($)		23.71			23.20			22.71			21.85		21.23
Shares outstanding, end of period (000's)		90,108			90,641			90,629			92,775		93,821
Dividend payout ratio (4)		16.41%			14.71%			9.24%			12.92%		19.32%
Banking Segment:
Net interest margin (2)		3.81%			3.77%			3.97%			4.06%		4.24%
Net interest margin (taxable equivalent) (3):
As reported		3.82%			3.78%			3.98%			4.06%		4.25%
Impact of purchase accounting		30 bps			25 bps			35 bps			31 bps		44 bps
Accretion of discount on loans ($000's)		6,639			5,698			7,868			6,444		8,735
Net charge-offs (recoveries) ($000's)		1,508			1,348			(380	)		2,960		1,628
Return on average assets		0.33%			1.17%			1.51%			1.43%		1.34%
Fee income ratio		8.5%			10.8%			8.3%			10.3%		10.3%
Efficiency ratio		55.5%			54.9%			50.5%			55.9%		58.8%
Employees' compensation and benefits ($000's)		32,347			31,455			31,309			33,050		32,171
Broker-Dealer Segment:
Net revenue ($000's) (5)		99,382			113,128			121,466			116,969		104,157
Employees' compensation and benefits ($000's)		56,550			64,301			69,954			70,333		63,075
Variable compensation expense ($000's)		32,024			39,505			44,921			44,833		34,581
Compensation as a % of net revenue		56.9%			56.8%			57.6%			60.1%		60.6%
Pre-tax margin (6)		18.3%			21.4%			22.2%			18.9%		15.8%
Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		2,341,847			2,958,176			3,380,812			3,329,024		2,050,760
Refinancings		1,280,741			1,442,329			1,390,989			631,065		396,282
Total mortgage loan originations - volume		3,622,588			4,400,505			4,771,801			3,960,089		2,447,042
Mortgage loan sales - volume ($000's)		3,486,249			4,226,425			4,316,118			3,338,070		2,711,114
Net gains from mortgage loan sales (basis points):
As reported		325			304			335			333		330
Impact of sales to banking segment		(13	)		(8	)		(1	)		0		0
Mortgage servicing rights asset ($000's) (7)		30,298			55,504			51,297			53,695		62,049
Employees' compensation and benefits ($000's)		100,328			109,753			123,890			106,449		79,043
Variable compensation expense ($000's)		58,280			67,224			81,287			65,516		38,929
Insurance Segment:
Loss and LAE ratio		39.7%			43.6%			44.9%			74.6%		45.0%
Expense ratio		38.0%			40.5%			38.3%			38.4%		41.5%
Combined ratio		77.7%			84.1%			83.2%			113.0%		86.5%
Employees' compensation and benefits ($000's)		2,777			2,929			2,748			2,784		3,202

___________________
(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, $0.1 million, $0.1 million, $0.2 million, and $0.2 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.1 million, $0.1 million, $0.2 million, and $0.2 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.

	March 31,		December 31,		September 30,		June 30,		March 31,
Capital Ratios	2020		2019		2019		2019		2019
Tier 1 capital (to average assets):
PlainsCapital		12.06%		11.61%		11.79%		12.53%		12.61%
Hilltop		13.03%		12.71%		12.67%		13.00%		13.22%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		13.33%		13.45%		13.25%		13.84%		13.89%
Hilltop		15.96%		16.70%		16.15%		16.32%		16.75%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		13.33%		13.45%		13.25%		13.84%		13.89%
Hilltop		16.38%		17.13%		16.58%		16.77%		17.22%
Total capital (to risk-weighted assets):
PlainsCapital		14.26%		14.13%		13.87%		14.48%		14.60%
Hilltop		17.00%		17.55%		16.95%		17.14%		17.64%

	March 31,		December 31,		September 30,		June 30,		March 31,
Non-Performing Assets Portfolio Data	2020		2019		2019		2019		2019
Loans accounted for on a non-accrual basis ($000's):
Commercial real estate		23,352		7,308		8,727		5,276		5,332
Commercial and industrial		47,121		15,262		13,313		14,152		13,350
Construction and land development		1,402		1,316		1,358		1,413		1,473
1-4 family residential		15,237		12,204		12,103		11,136		10,662
Consumer		310		26		30		34		38
Broker-dealer		—		—		—		—		—
		87,422		36,116		35,531		32,011		30,855
Non-performing loans as a % of total loans		0.89%		0.38%		0.38%		0.36%		0.38%
Other real estate owned ($000's)		15,429		18,202		18,738		20,753		23,066
Other repossessed assets ($000's)		315		—		—		—		30
Non-performing assets ($000's)		103,166		54,318		54,269		52,764		53,951
Non-performing assets as a % of total assets		0.66%		0.36%		0.37%		0.37%		0.40%
Loans past due 90 days or more and still accruing ($000's)		101,300		102,707		81,678		77,425		77,045
Troubled debt restructurings included in accruing loans held for investment ($000's)		2,286		2,173		2,222		2,256		1,313

	Three Months Ended March 31,
	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	$	1,619,644		$	15,631	3.86	%	$	1,015,010		$	12,487	4.92	%
Loans held for investment, gross ^(2)		7,262,282			95,537	5.23	%		6,843,343			98,383	5.76	%
Investment securities - taxable		1,798,897			16,606	3.69	%		1,792,501			15,584	3.48	%
Investment securities - non-taxable ^(3)		208,863			1,902	3.64	%		221,602			1,658	2.99	%
Federal funds sold and securities purchased under agreements to resell		60,943			134	0.89	%		66,346			388	2.37	%
Interest-bearing deposits in other financial institutions		461,775			1,512	1.32	%		505,582			3,151	2.53	%
Securities borrowed		1,568,737			13,327	3.36	%		1,446,412			16,859	4.66	%
Other		78,595			1,512	7.72	%		61,263			1,671	11.01	%
Interest-earning assets, gross ^(3)		13,059,736			146,161	4.45	%		11,952,059			150,181	5.03	%
Allowance for credit losses		(74,430	)						(59,549	)
Interest-earning assets, net		12,985,306							11,892,510
Noninterest-earning assets		1,633,387							1,419,075
Total assets	$	14,618,693						$	13,311,585
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	6,264,827		$	15,124	0.97	%	$	5,825,886		$	17,106	1.19	%
Securities loaned		1,474,988			11,277	3.07	%		1,295,002			14,738	4.62	%
Notes payable and other borrowings		1,368,038			8,544	2.50	%		1,065,432			9,265	3.51	%
Total interest-bearing liabilities		9,107,853			34,945	1.54	%		8,186,320			41,109	2.03	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		2,730,975							2,520,057
Other liabilities		633,722							623,710
Total liabilities		12,472,550							11,330,087
Stockholders’ equity		2,121,877							1,958,531
Noncontrolling interest		24,266							22,967
Total liabilities and stockholders' equity	$	14,618,693						$	13,311,585
Net interest income ^(3)				$	111,216						$	109,072
Net interest spread ^(3)						2.91	%						3.00	%
Net interest margin ^(3)						3.42	%						3.70	%

____________________
(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 $0.2 million for the three months ended March 31, 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, May 1, 2020. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review first 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. 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 March 31, 2020, Hilltop employed approximately 4,850 people and operated approximately 420 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, 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 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 loan losses and increases to the allowance for credit losses as a result of the implementation of CECL, as well as the effects of, and trends in, loan delinquencies and write-offs; (iv) changes in the interest rate environment; (v) the failure of the National Lloyds Corporation sale transaction to close on the expected timeline or at all; (vi) risks associated with concentration in real estate related loans; and (v) severe catastrophic events in Texas and other areas of the southern United States. 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.