Summary of Hilltop Holdings Q1 2026 Earnings Call

1Key Financial Results and Metrics

Net Income: $38 million, or $0.64 per diluted share.

Return on Average Assets: 1%.

Return on Average Equity: 7.1%.

Net Interest Income: $112 million, up 6.7% year-over-year.

Net Interest Margin: 3.38%.

Average Loans Held for Investment (HFI): $8.3 billion, a 2.7% increase from Q4 2025.

Total Deposits: Approximately $10.6 billion, a decline of $82 million (less than 1%) from Q4 2025.

Tangible Book Value per Share: Increased to $31.97.

Common Equity Tier 1 Capital Ratio: 19.1%.

2Strategic Updates and Business Highlights

PlainsCapital Bank: Continued expansion in net interest margin and growth in core loans and deposits. Achieved $47 million in pretax income.

PrimeLending: Narrowed operating loss to $2 million, benefiting from higher origination volumes despite ongoing challenges in the mortgage market.

HilltopSecurities: Generated $15 million in pretax income, with strong performance in public finance and fixed income services.

Capital Management: Returned $11.8 million to shareholders through dividends and repurchased $47.5 million in shares.

3Forward Guidance and Outlook

Loan Growth: Expected full-year average HFI loan growth of 4% to 6%.

Mortgage Production: Maintaining guidance of $9 billion to $10 billion for the year, though caution is advised due to potential impacts from interest rates and geopolitical tensions.

Net Interest Income (NII): Anticipates two additional Fed rate cuts in 2026, which could impact NII positively by $8 million to $10 million if no cuts occur.

Expense Management: Non-variable expenses expected to grow modestly by 0% to 2% due to inflation and investments in technology and personnel.

4Bad News, Challenges, or Points of Concern

Deposit Declines: Total deposits decreased by $347 million from the previous quarter, attributed to seasonal outflows from public entity and commercial clients.

Mortgage Market Volatility: Ongoing geopolitical tensions and rising interest rates are creating uncertainty in mortgage demand, particularly in the spring and summer months.

Credit Quality: A $1.8 million provision expense was noted, primarily related to stressed auto note credits. Nonperforming assets increased slightly.

Competitive Pressures: Intense competition in the deposit market may necessitate higher interest rates, impacting margins.

5Notable Q&A Insights

NII Guidance: Analysts inquired about the increase in NII guidance, with management citing solid loan growth and improved deposit beta.

Mortgage Outlook: Management expressed cautious optimism regarding mortgage volumes, acknowledging potential softness due to external factors.

Capital Priorities: Share buybacks remain a focus, with M&A considered if compelling opportunities arise.

Expense Management: Non-variable expenses are expected to remain stable, with ongoing investments in technology and personnel to drive productivity. Overall, Hilltop Holdings reported a solid first quarter with growth in key areas, but faces challenges from external economic factors, particularly in the mortgage sector and competitive deposit pressures.