Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2017

January 25, 2018

January 25, 2018 - 5:10 PM EST

Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2017

DALLAS

Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial
results for the fourth quarter and full year of 2017. Hilltop produced
income of $13.4 million, or $0.14 per diluted share, for the fourth
quarter of 2017, compared to $35.3 million, or $0.36 per diluted share,
for the fourth quarter of 2016. Income to common stockholders for the
full year 2017 was $132.5 million, or $1.36 per diluted share, compared
to $145.9 million, or $1.48 per diluted share, for the full year 2016.

Hilltop’s results during the fourth quarter and full year of 2017
include the estimated impact of a non-recurring, non-cash charge¹
of $28.4 million primarily attributable to the revaluation of deferred
tax assets as a result of the enactment of the Tax Cuts and Jobs Act
(“Tax Legislation”). Our results during the full year of 2017 were also
impacted by losses from Hurricanes Harvey and Irma of $8.2 million, as
well as increases to other noninterest income of $15.0 million from
coverage provided by an insurance policy for forgery of a document
delivered in connection with a single, large loan charged off by the
Bank in 2016 and $11.6 million from the resolution of the appraisal
proceedings from the SWS merger, both of which occurred during the
second quarter of 2017. The results for the fourth quarter and full year
of 2016 included a specific legal reserve of $16.0 million related to
one matter involving HilltopSecurities. The results for the full year of
2016 also included a $24.5 million charge-off of the previously
discussed loan by the Bank.

Hilltop also announced that its Board of Directors declared a quarterly
cash dividend of $0.07 per common share, a 16.7% increase from prior
quarter, payable on February 28, 2018, to all common stockholders of
record as of the close of business on February 15, 2018. Furthermore,
the Hilltop Board of Directors authorized a new stock repurchase program
through January 2019, under which Hilltop may repurchase, in the
aggregate, up to $50.0 million of its outstanding common stock.

Jeremy Ford, Co-CEO of Hilltop, said, “Hilltop’s fourth quarter earnings
reflect solid performance across our businesses, particularly from our
insurance segment. We remain focused on profitable growth, efficiency
improvements and sound capital management. Importantly, in 2017 Hilltop
returned $50.5 million of capital to shareholders through dividends and
share repurchases.”

Alan White, Co-CEO of Hilltop, added, “Hilltop’s operating companies
continued to thrive from a shared commitment to our clients and
communities. During this quarter, PlainsCapital Bank was able to grow
core deposits and commercial loans, PrimeLending was able to increase
mortgage market share, and HilltopSecurities was able to build on its
earnings and margin momentum.”

Fourth Quarter 2017 Highlights for Hilltop:

Hilltop’s annualized return on average assets¹ and return
on average equity¹ for the fourth quarter of 2017 were
0.41% and 2.78%, respectively, compared to 1.13% and 7.56%,
respectively, for the fourth quarter of 2016;
Hilltop’s total assets were $13.4 billion at December 31, 2017,
compared to $13.5 billion at September 30, 2017;
Hilltop’s common equity increased by $5.9 million from September 30,
2017 to $1.9 billion at December 31, 2017;
Non-covered loans² held for investment, net of allowance
for loan losses, increased by 2.0% to $6.2 billion and covered loans²,
net of allowance for loan losses, decreased by 4.7% to $179.4 million
at December 31, 2017 compared to September 30, 2017;
Non-covered non-performing loans increased to $40.5 million, or 0.51%
of total non-covered loans, at December 31, 2017, compared to $40.1
million, or 0.50% of total non-covered loans, at September 30, 2017;
Energy classified and criticized loans were $28.6 million at December
31, 2017, increasing from $24.4 million at September 30, 2017;
Loans held for sale decreased by 11.6% from September 30, 2017 to $1.7
billion at December 31, 2017;
Total deposits were $8.0 billion at December 31, 2017, compared to
$7.7 billion at September 30, 2017;
Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio³
of 12.94% and a Common Equity Tier 1 Capital Ratio of 17.69% at
December 31, 2017;
Hilltop’s net interest margin⁴of 3.63% for the fourth
quarter of 2017, compared to 3.50% in the third quarter of 2017;
The provision for loan losses was $5.5 million during the fourth
quarter of 2017, compared to $1.3 million in the third quarter of 2017;
For the fourth quarter of 2017, noninterest income was $290.5 million,
compared to $309.1 million in the fourth quarter of 2016, a 6.0%
decrease; and
For the fourth quarter of 2017, noninterest expense was $328.7
million, compared to $355.8 million in the fourth quarter of 2016, a
7.6% decrease.

____________________
¹		The enactment of Tax Legislation during the noted periods resulted in an estimated non-cash, non-recurring charge of $28.4 million primarily attributable to the revaluation of deferred tax assets. Certain Tax Legislation amounts are considered reasonable estimates as of December 31, 2017 and could be adjusted during the measurement period, which will end in December 2018, as a result of further refinement of our calculations, changes in interpretations and assumptions made, guidance that may be issued and actions we may take as a result of Tax Legislation.
²		“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.”
³		Based on the end of period Tier 1 capital divided by total average assets during 2017, excluding goodwill and intangible assets.
⁴		Net interest margin is defined as net interest income divided by average interest-earning assets.


Consolidated Balance Sheets	December 31,			September 30,			June 30,			March 31,			December 31,
(in 000's)	2017			2017			2017			2017			2016
Cash and due from banks	$	486,977		$	354,569		$	405,938		$	545,928		$	669,357
Federal funds sold		405			400			388			24,404			21,407
Securities purchased under agreements to resell		186,537			134,654			125,188			113,228			89,430
Assets segregated for regulatory purposes		186,578			207,336			167,565			166,395			180,993
Securities:
Trading, at fair value		730,685			676,411			471,485			373,300			265,534
Available for sale, at fair value		765,560			765,542			763,206			755,546			598,007
Held to maturity, at amortized cost		355,849			368,031			359,847			337,357			351,831
		1,852,094			1,809,984			1,594,538			1,466,203			1,215,372
Loans held for sale		1,715,357			1,939,321			2,000,257			1,329,493			1,795,463
Non-covered loans, net of unearned income		6,273,669			6,148,813			6,118,211			5,783,853			5,843,499
Allowance for non-covered loan losses		(60,957	)		(58,779	)		(59,208	)		(55,157	)		(54,186	)
Non-covered loans, net		6,212,712			6,090,034			6,059,003			5,728,696			5,789,313

Covered loans, net of allowance for covered loan losses		179,400			188,269			205,877			234,681			255,714
Broker-dealer and clearing organization receivables		1,464,378			1,672,123			1,552,525			1,574,031			1,497,741
Premises and equipment, net		177,577			176,281			183,994			184,091			190,361
FDIC indemnification asset		29,340			33,143			40,304			47,940			71,313
Covered other real estate owned		36,744			40,343			42,304			45,374			51,642
Other assets		556,683			596,095			618,368			583,554			613,453
Goodwill		251,808			251,808			251,808			251,808			251,808
Other intangible assets, net		36,432			38,440			40,516			42,601			44,695
Total assets	$	13,373,022		$	13,532,800		$	13,288,573		$	12,338,427		$	12,738,062

Deposits:
Non-interest bearing	$	2,411,849		$	2,279,633		$	2,251,208		$	2,272,905		$	2,199,483
Interest bearing		5,566,270			5,383,814			5,323,414			5,056,957			4,864,328
Total deposits		7,978,119			7,663,447			7,574,622			7,329,862			7,063,811
Broker-dealer and clearing organization payables		1,287,563			1,517,698			1,395,314			1,437,548			1,347,128
Short-term borrowings		1,206,424			1,477,201			1,515,069			753,777			1,417,289
Securities sold, not yet purchased, at fair value		232,821			173,509			149,869			144,193			153,889
Notes payable		216,045			300,196			300,283			324,701			317,912
Junior subordinated debentures		67,012			67,012			67,012			67,012			67,012
Other liabilities		470,231			424,381			393,351			392,025			496,501
Total liabilities		11,458,215			11,623,444			11,395,520			10,449,118			10,863,542

Common stock		960			959			963			984			985
Additional paid-in capital		1,526,369			1,525,169			1,529,903			1,570,329			1,572,877
Accumulated other comprehensive income		(394	)		2,585			2,112			897			485
Retained earnings		384,545			376,873			356,564			313,197			295,568
Deferred compensation employee stock trust, net		848			840			845			893			903
Employee stock trust		(247	)		(241	)		(248	)		(300	)		(309	)
Total Hilltop stockholders' equity		1,912,081			1,906,185			1,890,139			1,886,000			1,870,509
Noncontrolling interests		2,726			3,171			2,914			3,309			4,011
Total stockholders' equity		1,914,807			1,909,356			1,893,053			1,889,309			1,874,520
Total liabilities & stockholders' equity	$	13,373,022		$	13,532,800		$	13,288,573		$	12,338,427		$	12,738,062


	Three Months Ended						Year Ended
Consolidated Income Statements	December 31,		September 30,		December 31,		December 31,		December 31,
(in 000's, except per share data)	2017		2017		2016		2017		2016
Interest income:
Loans, including fees	$	105,658	$	102,546	$	102,046	$	411,988	$	389,637
Securities borrowed		11,994		11,404		6,566		41,048		29,518
Securities:
Taxable		11,910		11,157		7,097		39,633		26,233
Tax-exempt		1,717		1,471		1,530		5,807		6,222
Other		2,386		2,366		1,096		8,680		4,344
Total interest income		133,665		128,944		118,335		507,156		455,954

Interest expense:
Deposits		7,700		6,841		3,971		24,695		15,843
Securities loaned		9,581		8,935		4,653		32,337		22,510
Short-term borrowings		4,118		4,567		1,829		13,751		5,803
Notes payable		2,611		2,680		2,856		10,931		10,849
Junior subordinated debentures		787		774		703		3,016		2,676
Other		176		167		199		678		742
Total interest expense		24,973		23,964		14,211		85,408		58,423

Net interest income		108,692		104,980		104,124		421,748		397,531
Provision for loan losses		5,453		1,260		4,347		14,271		40,620
Net interest income after provision for loan losses		103,239		103,720		99,777		407,477		356,911

Noninterest income:
Net gains from sale of loans and other mortgage production income		122,132		138,498		137,270		538,468		606,991
Mortgage loan origination fees		23,156		25,256		24,850		93,944		96,267
Securities commissions and fees		40,868		38,735		39,425		156,464		157,906
Investment and securities advisory fees and commissions		36,561		25,620		31,690		109,920		115,992
Net insurance premiums earned		35,645		34,493		38,344		142,298		155,545
Other		32,094		35,875		37,548		163,970		154,264
Total noninterest income		290,456		298,477		309,127		1,205,064		1,286,965

Noninterest expense:
Employees' compensation and benefits		205,642		209,747		208,760		816,994		834,113
Occupancy and equipment, net		29,658		29,073		27,154		113,943		109,418
Professional services		24,220		25,560		42,983		101,521		128,176
Loss and loss adjustment expenses		8,583		31,234		14,018		94,701		89,243
Other		60,567		58,228		62,869		242,096		251,521
Total noninterest expense		328,670		353,842		355,784		1,369,255		1,412,471

Income before income taxes		65,025		48,355		53,120		243,286		231,405
Income tax expense		51,350		18,003		17,582		110,142		83,461
Net income		13,675		30,352		35,538		133,144		147,944
Less: Net income attributable to noncontrolling interest		247		146		217		600		2,050
Income attributable to Hilltop	$	13,428	$	30,206	$	35,321	$	132,544	$	145,894

Earnings per common share:
Basic	$	0.14	$	0.31	$	0.36	$	1.36	$	1.48
Diluted	$	0.14	$	0.31	$	0.36	$	1.36	$	1.48

Cash dividends declared per common share	$	0.06	$	0.06	$	0.06	$	0.24	$	0.06

Weighted average shares outstanding:
Basic		95,903		96,096		98,514		97,137		98,404
Diluted		96,080		96,306		98,810		97,353		98,629


	Three Months Ended December 31, 2017
Segment Results ($000s)					Mortgage									All Other and			Hilltop
Three Months Ended December 31, 2017	Banking		Broker-Dealer		Origination			Insurance			Corporate			Eliminations			Consolidated
Net interest income (expense)	$	92,986	$	12,684	$	(124	)	$	880		$	(2,656	)	$	4,922		$	108,692
Provision for loan losses		5,166		287		-			-			-			-			5,453
Noninterest income		10,580		101,642		145,355			37,820			5			(4,946	)		290,456
Noninterest expense		62,328		94,917		137,636			24,910			8,974			(95	)		328,670
Income (loss) before income taxes	$	36,072	$	19,122	$	7,595		$	13,790		$	(11,625	)	$	71		$	65,025

	Year Ended December 31, 2017
Segment Results ($000s)					Mortgage									All Other and			Hilltop
Year Ended December 31, 2017	Banking		Broker-Dealer		Origination			Insurance			Corporate			Eliminations			Consolidated
Net interest income (expense)	$	366,581	$	43,735	$	(915	)	$	2,861		$	(10,069	)	$	19,555		$	421,748
Provision for loan losses		14,073		198		-			-			-			-			14,271
Noninterest income		59,904		368,421		632,388			151,382			12,798			(19,829	)		1,205,064
Noninterest expense		248,404		347,314		581,899			158,354			33,983			(699	)		1,369,255
Income (loss) before income taxes	$	164,008	$	64,644	$	49,574		$	(4,111	)	$	(31,254	)	$	425		$	243,286


	Three Months Ended			Year Ended
	December 31,	September 30,	December 31,	December 31,	December 31,
Selected Financial Data	2017	2017	2016	2017	2016

Hilltop Consolidated:
Return on average stockholders' equity ⁽¹⁾	2.78%	6.32%	7.56%	7.00%	8.13%
Return on average assets ⁽¹⁾	0.41%	0.90%	1.13%	1.03%	1.21%
Net interest margin ⁽²⁾:	3.63%	3.50%	3.80%	3.67%	3.74%
Net interest margin (taxable equivalent) ⁽³⁾:
As reported	3.65%	3.52%	3.82%	3.69%	3.76%
Impact of purchase accounting	44 bps	37 bps	71 bps	53 bps	67 bps
Book value per common share ($)	19.92	19.88	18.98	19.92	18.98
Shares outstanding, end of period (000's)	95,982	95,904	98,544	95,982	98,544
Dividend payout ratio ⁽⁴⁾	42.86%	19.09%	16.71%	17.59%	4.05%

Banking Segment:
Net interest margin ⁽²⁾:	4.23%	4.03%	4.57%	4.31%	4.65%
Net interest margin (taxable equivalent) ⁽³⁾:
As reported	4.24%	4.05%	4.59%	4.33%	4.68%
Impact of purchase accounting	60 bps	51 bps	96 bps	72 bps	93 bps
Accretion of discount on loans ($000's)	12,642	10,541	17,926	58,445	67,870
Non-covered net charge-offs (recoveries) ($000's)	4,635	908	3,083	4,635	32,970
Return on average assets ⁽¹⁾	-0.08%	0.94%	1.09%	0.85%	0.94%
Fee income ratio	10.22%	11.33%	12.57%	14.05%	12.65%
Efficiency ratio	60.18%	62.29%	59.00%	58.24%	58.87%
Employees' compensation and benefits ($000's)	31,159	30,810	32,350	125,271	123,489

Broker-Dealer Segment:
Net revenue ⁽⁵⁾	114,326	103,633	107,331	412,156	416,938
Employees' compensation and benefits ($000's)	70,169	60,365	62,929	250,614	252,772
Variable compensation expense ($000's)	41,239	35,085	37,984	143,688	148,611
Compensation as a % of net revenue	61.4%	58.2%	58.6%	60.8%	60.6%
Pre-tax margin	16.73%	19.49%	-0.02%	15.68%	9.47%

Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases	2,870,864	3,332,441	2,772,316	11,974,571	11,276,378
Refinancings	732,129	640,064	1,115,764	2,483,342	4,183,835
Total mortgage loan originations - volume	3,602,993	3,972,505	3,888,080	14,457,913	15,460,213
Mortgage loan sales - volume ($000's)	3,791,638	4,002,195	3,723,751	14,454,260	15,155,340
Mortgage servicing rights asset ($000's)⁽⁶⁾	54,714	47,766	61,968	54,714	61,968
Employees' compensation and benefits ($000's)	96,257	111,133	106,894	412,537	435,669
Variable compensation expense ($000's)	59,130	66,420	64,809	244,333	266,373

Insurance Segment:
Loss and LAE ratio	24.1%	90.6%	36.6%	66.6%	57.4%
Expense ratio	41.0%	40.4%	33.2%	39.9%	33.5%
Combined ratio	65.1%	131.0%	69.8%	106.5%	90.9%
Employees' compensation and benefits ($000's)	3,418	2,578	2,262	11,562	9,145

____________________
(1)		Noted measures during the three months and year ended December 31, 2017 include estimated non-cash, non-recurring charges to Hilltop Consolidated and Banking Segment results of $28.4 million and $25.7 million, respectively, primarily attributable to the revaluation of deferred tax assets as a result of the enactment of the Tax Legislation. Certain Tax Legislation amounts are considered reasonable estimates as of December 31, 2017 and could be adjusted during the measurement period, which will end in December 2018, as a result of further refinement of our calculations, changes in interpretations and assumptions made, guidance that may be issued and actions we may take as a result of Tax Legislation.
(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 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 $0.6 million, $0.6 million, $0.6 million, $2.2 million, and $2.4 million, respectively, and for the Banking Segment were $0.4 million, $0.4 million, $0.4 million, $1.6 million, and $1.5 million, respectively.
(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)		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.


	December 31,		September 30,		June 30,		March 31,		December 31,
Capital Ratios	2017		2017		2017		2017		2016

Tier 1 capital (to average assets):
PlainsCapital	12.32	%	12.18	%	12.11	%	13.09	%	12.35	%
Hilltop	12.94	%	12.87	%	13.07	%	13.98	%	13.51	%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital	14.46	%	14.44	%	13.95	%	15.50	%	14.64	%
Hilltop	17.69	%	17.66	%	17.53	%	19.03	%	18.30	%
Tier 1 capital (to risk-weighted assets):
PlainsCapital	14.46	%	14.44	%	13.95	%	15.50	%	14.64	%
Hilltop	18.23	%	18.20	%	18.07	%	19.62	%	18.87	%
Total capital (to risk-weighted assets):
PlainsCapital	15.28	%	15.23	%	14.72	%	16.30	%	15.38	%
Hilltop	18.77	%	18.71	%	18.57	%	20.12	%	19.34	%


	December 31,		September 30,		June 30,		March 31,		December 31,
Non-Covered Non-Performing Loans Portfolio Data	2017		2017		2017		2017		2016

Non-covered loans accounted for on a non-accrual basis ($000's):
Commercial and industrial	20,878		21,434		13,818		13,490		9,515
Real estate	18,978		17,996		14,877		14,437		13,932
Construction and land development	611		626		632		661		755
Consumer	56		63		208		223		244
Broker-dealer	-		-		-		-		-
	40,523		40,119		29,535		28,811		24,446

Non-covered non-performing loans as a % of total non-covered loans	0.51	%	0.50	%	0.36	%	0.41	%	0.32	%

Non-covered other real estate owned ($000's)	3,883		4,827		4,591		4,556		4,507

Other repossessed assets ($000's)	323		437		723		681		1,117

Non-covered non-performing assets ($000's)	44,729		45,383		34,849		34,048		30,070

Non-covered non-performing assets as a % of total assets	0.33	%	0.34	%	0.26	%	0.28	%	0.24	%

Non-covered non-PCI loans past due 90 days or more and still accruing ($000's)	61,082		45,134		48,757		42,767		47,486

Troubled debt restructurings included in accruing non-covered loans ($000's)	1,150		1,163		1,170		1,180		1,196


	December 31,	September 30,	June 30,	March 31,	December 31,
PlainsCapital Bank - Energy Exposure	2017	2017	2017	2017	2016

Select Energy Statistics
Outstanding energy loan balance ($MM)	151.3	151.3	158.2	149.1	166.5
Energy unfunded commitments ($MM)	126.2	137.9	121.9	130.4	121.4
Energy loans as a % of total loans	2.6%	2.6%	2.7%	2.7%	3.0%
Classified and criticized energy loans ($MM):
Criticized energy loans	0.0	0.0	0.0	0.0	0.0
Performing classified energy loans	16.1	11.6	23.6	22.5	23.5
Non-performing classified energy loans	12.5	12.8	3.3	4.0	5.2
	28.6	24.4	26.9	26.5	28.7

Unimpaired energy reserves ($MM)	12.0	12.0	11.3	10.6	10.6
Energy reserves as a % of energy loans	7.9%	7.9%	7.1%	7.1%	6.5%
Energy NCOs ($MM)	0.0	0.0	0.0	0.0	1.5

Energy Portfolio Breakdown
Exploration and production	13%	14%	14%	13%	11%
Services:
Field services	22%	23%	22%	24%	22%
Pipeline construction	26%	22%	22%	22%	21%
	48%	45%	44%	46%	43%
Midstream:
Distribution	16%	16%	16%	18%	30%
Transportation	8%	9%	9%	10%	9%
	24%	25%	25%	28%	39%
Other:
Wholesalers	<1%	1%	1%	1%	1%
Equipment rentals	0%	0%	0%	0%	0%
Equipment wholesalers	15%	15%	16%	12%	6%
Total	100%	100%	100%	100%	100%


	Three Months Ended December 31,
	2017							2016
	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⁾	$	7,895,956		$	105,658	5.28	%	$	7,588,895		$	102,046	5.32	%
Investment securities - taxable		1,564,445			11,885	3.02	%		1,031,667			7,076	2.74	%
Investment securities - non-taxable ⁽²⁾		257,779			2,323	3.59	%		282,027			2,139	3.03	%
Federal funds sold and securities purchased
under agreements to resell		156,691			-	0.00	%		145,354			40	0.11	%
Interest-bearing deposits in other
financial institutions		388,930			1,186	1.21	%		411,538			500	0.48	%
Securities borrowed		1,524,086			11,994	3.08	%		1,371,633			6,566	1.87	%
Other		80,787			1,225	6.04	%		74,583			576	3.06	%
Interest-earning assets, gross ⁽²⁾		11,868,674			134,271	4.47	%		10,905,697			118,943	4.31	%
Allowance for loan losses		(61,674	)						(54,089	)
Interest-earning assets, net		11,807,000							10,851,608
Noninterest-earning assets		1,518,435							1,646,800
Total assets	$	13,325,435						$	12,498,408

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	5,446,430		$	7,700	0.56	%	$	4,839,376		$	3,971	0.33	%
Securities loaned		1,365,153			9,581	2.78	%		1,260,159			4,653	1.47	%
Notes payable and other borrowings		1,516,749			7,692	2.00	%		1,507,513			5,587	1.47	%
Total interest-bearing liabilities		8,328,332			24,973	1.19	%		7,607,048			14,211	0.74	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		2,438,605							2,356,373
Other liabilities		641,302							674,297
Total liabilities		11,408,239							10,637,718
Stockholders' equity		1,915,184							1,857,830
Noncontrolling interest		2,012							2,860
Total liabilities and stockholders' equity	$	13,325,435						$	12,498,408

Net interest income ⁽²⁾				$	109,298						$	104,732
Net interest spread ⁽²⁾						3.28	%						3.57	%
Net interest margin ⁽²⁾						3.65	%						3.82	%


	Year Ended December 31,
	2017							2016
	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⁾	$	7,718,933		$	411,987	5.34	%	$	7,153,769		$	389,637	5.45	%
Investment securities - taxable		1,399,379			39,539	2.83	%		1,038,838			26,152	2.52	%
Investment securities - non-taxable ⁽²⁾		234,741			8,012	3.41	%		282,780			8,674	3.07	%
Federal funds sold and securities purchased
under agreements to resell		140,337			50	0.04	%		150,337			155	0.10	%
Interest-bearing deposits in other
financial institutions		387,258			3,826	0.99	%		426,150			2,024	0.47	%
Securities borrowed		1,518,041			41,048	2.70	%		1,523,195			29,518	1.94	%
Other		85,125			4,897	5.75	%		66,088			2,247	3.40	%
Interest-earning assets, gross ⁽²⁾		11,483,814			509,359	4.44	%		10,641,157			458,407	4.31	%
Allowance for loan losses		(59,153	)						(51,925	)
Interest-earning assets, net		11,424,661							10,589,232
Noninterest-earning assets		1,531,311							1,606,572
Total assets	$	12,955,972						$	12,195,804

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	5,220,359		$	24,695	0.47	%	$	4,824,374		$	15,843	0.33	%
Securities loaned		1,378,748			32,337	2.35	%		1,428,829			22,510	1.58	%
Notes payable and other borrowings		1,516,015			28,378	1.87	%		1,237,609			20,070	1.62	%
Total interest-bearing liabilities		8,115,122			85,410	1.05	%		7,490,812			58,423	0.78	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		2,309,776							2,241,561
Other liabilities		634,630							665,878
Total liabilities		11,059,528							10,398,251
Stockholders' equity		1,894,009							1,795,219
Noncontrolling interest		2,435							2,334
Total liabilities and stockholders' equity	$	12,955,972						$	12,195,804

Net interest income ⁽²⁾				$	423,949						$	399,984
Net interest spread ⁽²⁾						3.38	%						3.53	%
Net interest margin ⁽²⁾						3.69	%						3.76	%

____________________
(1)		Average balance includes non-accrual loans.
(2)		Presented on a taxable equivalent basis with annualized taxable equivalent adjustments based on a 35% federal income tax rate. The adjustment to interest income was $0.6 million and $0.6 million for the three months ended December 31, 2017 and 2016, respectively, and $2.2 million and $2.4 million for the year ended December 31, 2017 and 2016, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central
(9:00 AM Eastern) on Friday, January 26, 2018. Hilltop Co-CEOs Jeremy B.
Ford and Alan B. White and other key management members will review
fourth quarter 2017 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 December 31, 2017, Hilltop employed
approximately 5,500 people and operated approximately 475 locations in
45 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, expected tax impacts
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. For a discussion of certain factors that could cause our actual
results to differ materially from those described in the forward-looking
statements, please see the risk factors discussed 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20180125006353/en/

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

Source: Business Wire
(January 25, 2018 - 5:10 PM EST)

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Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2017

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